Money Laundering Act Exposed

The Money Laundering Act does not include adoption or approval information, however, it was included in ALEC's 1995 Sourcebook of American State Legislation. ALEC has attempted to distance itself from this piece of legislation after the launch of ALECexposed.org in 2011, but it has done nothing to get it repealed in the states where it previously pushed for it to be made into law.

ALEC Bill Text

Summary

This Act would require businesses and financial institutions to file cash transaction reports with the appropriate state department when a party to cash transactions involving $10,000 or more. The reports would be identical to reports filed with federal authorities in conformity with federal law. Businesses and financial institutions that do not file the reports would be subject to civil penalty. This Act would also define the offense of money laundering with a penalty of up to 20 years in prison and a fine of up to $1,000,000.

Model Legislation

{Title, enacting clause, etc.}

Section 1. {Title.}

This Act shall be known and may be cited as the Money Laundering Act.

Section 2. {Definitions.}

As used in this Act:

(A) "Business" means [definition].

(B) "Currency" means currency and coin of the United States.

(C) "Financial institution" means any person or business defined as a "bank," "financial agency," or "financial institution" by the United States Code of Federal Regulations and any state bank or banking association, commercial bank, investment bank, insurer, dealer in metals, coins, or gems, trust company, credit union, agency, agent, or branch of a foreign bank, currency dealer, person or business engaged primarily in the cashing of checks, person or business engaged in the issuing, selling, or redeeming of travelers' checks, money orders, or similar instruments, and any broker or dealer in securities organized under the laws of the United States or any state.

(D) "Trade" means [definition].

(E) "Transaction" includes the deposit, withdrawal, transfer, bailment, loan, pledge, payment, or exchange of currency by, through, or to a financial institution.

Section 3. {Cash transaction reporting requirements.}

(A) All financial institutions and any person in a trade or business shall keep a record of any currency transaction in excess of $10,000 and shall file a report of each such transaction with the [cite appropriate department] within 15 days after the date of the transaction.

(B) The information in the report shall include:

(1) full identity of the person who made the transaction;

(2) full identity of the owner of the currency; and

(3) details of the date, location, and amount of the transaction.

(C) The filing with the [cite appropriate department] of a duplicate copy of each report required by 31 U.S.C. 5313 and 31 C.F.R. 103.22 shall satisfy all recording and reporting requirements of this Act. Any currency transactions exempt from recording and reporting under 31 U.S.C. 5313 shall be exempt from the requirements of this Act.

(D) No financial institution or any officer, employee, agent, or director thereof filing a report pursuant to this Act shall be liable to any person for any loss or damage caused in whole or in part by the making, filing, or government use of the report or any information contained therein.

(E) The financial institution or person in trade or business shall keep a copy of the form for five years.

Section 4. {CTR Report confidentiality.}

The information obtained by the [cite appropriate department] pursuant to this Act shall not be provided to any person except:

(A) pursuant to a lawful subpoena or subpoena duces tecum issued by a state attorney, a United States attorney, or a court in a criminal proceeding;

(B) pursuant to any such subpoena issued by a state or federal grand jury;

(C) pursuant to any such subpoena issued by a state attorney, United States attorney, or a court in the course of a civil judicial proceeding instituted by a state attorney or United States attorney; or

(D) when the director of the [cite appropriate department] deems it necessary or proper to the enforcement of the laws of this state or the United States and in the best interest of the public.

Section 5. {Civil penalty for noncompliance.}

Any financial institution, or any officer, employee, agent, or director thereof who knowingly or intentionally violates Section 3 of this Act shall be subject to a civil penalty which shall not exceed $100 for each day in which the violation continues. The cumulative civil penalty shall not exceed $500.

Section 6. {Money laundering.}

(A) It is unlawful for any person knowingly or intentionally to receive or acquire proceeds or engage in transactions involving proceeds known to be derived from any violation of [cite state controlled substance act].

(B) It is unlawful for any person knowingly or intentionally to give, sell, transfer, trade, invest, conceal, transport, or maintain an interest in or otherwise make available anything of value known to be for the purpose of committing or furthering the commission of any violation of the [cite state controlled substance act].

(C) It is unlawful for any person knowingly or intentionally to direct, plan, organize, initiate, finance, manage, supervise, or facilitate the transportation or transfer of proceeds known to be derived from any violation of the [cite state controlled substance act].

(D) It is unlawful for any person knowingly or intentionally to conduct a financial transaction involving proceeds derived from a violation of the [cite state controlled substance act] when the transaction is designed in whole or in part to conceal or disguise the nature, location, source, ownership, or control of the proceeds known to be derived from a violation of the [cite state controlled substance act] or to avoid transaction reporting requirement under state or federal law.

(E) A person who violates this section is guilty of a crime and upon conviction may be imprisoned for not more than 20 years, fined not more than $1,000,000 or 5 times the value of the proceeds involved, or both.

Section 7. {Severability clause.}

Section 8. {Repealer clause.}

Section 9. {Effective date.}

ALEC's Sourcebook of American State Legislation 1995