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What You Need to Know If You are Facing Money Laundering and Drug Trafficking Charges

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Crimes involving drug trafficking activities are aggressively prosecuted at both the state and federal levels.  Oftentimes defendants are charged with money laundering crimes in addition to other drug-related offenses.  Michael Lowe, an experienced Texas criminal defense attorney, explains the laws behind money laundering crimes along with the tactics and strategies law enforcement officials use to target, investigate and arrest individuals suspected of drug trafficking activities. If you have been charged with these types of crimes, Mr. Lowe can explain how the criminal justice system operates and fight to protect your legal rights every step of the way.

A large majority of crimes that take place today in the United States and around the world revolve around money.  While there are many different types of criminal activities that are driven by greed and financial gain, illegal drug trafficking is a multi-billion-dollar industry.  In fiscal year 2016 alone, over 19,000 of the cases reported to the United States Sentencing Commission involved drug trafficking activities, a large number of which occurred in Texas and surrounding states. Moreover, both the  Western and Southern Districts of Texas were listed on the Sentencing Commission’s top five U.S. districts for drug trafficking offenders and North Texas (which includes the Dallas-Fort Worth area) has been designated as a High Intensity Drug Trafficking Area (HIDTA) by the Office of National Drug Control Policy.

Given this high level of criminal activity in Texas and throughout the U.S., the government is continually increasing its efforts to combat drug trafficking.  While most people know that the United States Drug Enforcement Administration (DEA) works with traditional law enforcement agencies and officials to enforce controlled substance laws and regulations in the U.S., many people do not know that the Internal Revenue Service (IRS) also plays a critical role in investigating illegal drug operations.   When alleged criminal activity involves drug dealing, drug trafficking, drug possession, or the cultivation or manufacturing of drugs, the crime of money laundering will often be added to the charges.  Money laundering is often a very complex crime – the IRS has the resources to launch a sophisticated financial investigation to identify and track the movement of money associated with illicit drug activities to establish proof of the criminal activity.

If you are facing money laundering and drug trafficking charges, there are some important things you need to know about these crimes to protect your rights and give yourself the best chance of fighting the criminal charges filed against you.

  • Overview of Money Laundering Laws
  • How do Law Enforcement Officials Target Suspected Drug Traffickers?
  • If I am Arrested on Drug Trafficking Charges, What Can I Expect?
  • How a Texas Criminal Defense Attorney Can Help

Overview of Money Laundering Laws

Put simply, money laundering involves taking money obtained in an illegal transaction, such as drug trafficking, drug manufacturing or distribution and moving the funds so that the money appears to be generated from legitimate source.  The reason why the crime is referred to as “money laundering” is because actions are taken in an attempt to “clean” or “launder” the money to make it appear legitimate so it can be used freely in the economy without fearing that it will be traced back to the criminal activity.

For instance, a drug dealer who transports marijuana and other illegal substances from Texas to other parts of the country could be charged with money laundering if the dealer attempts to conceal the original ownership and source of the money in order to make it appear as if it has been derived from a legitimate source rather than through illegal means.

Since drug trafficking activities such as these often cross over state lines, defendants typically face federal money laundering charges along with other felony charges.  However, states also have money laundering statutes on the books that are often filed in tandem with other state drug crime charges.

Federal Money Laundering Statutes

18 U.S.C. § 1956 is the basic federal money laundering statute which applies to individuals and conspiracies. Under this statute, the offense of money laundering occurs when a person conducts or attempts to conduct a financial transaction knowing that the property involved is derived from the proceeds of a “specified unlawful activity” such as drug trafficking.  In addition to proving that the defendant had knowledge that the money was dirty, under §1956, the government must demonstrate that the defendant acted intending to:

  1. Promote the carrying on of the specified unlawful activity;
  2. Evade taxes;
  3. Conceal the nature, location, ownership, source or control of the proceeds; or
  4. Avoid transaction reporting requirements under federal or state law.

Federal money laundering offenses can also arise under 18 U.S.C. §1957 where a person knowingly conducts or attempts to conduct a monetary transaction involving property which was derived from criminal activity in amount that exceeds $10,000.   For instance, consider a situation where a person uses funds illegally derived from drug trafficking activities to pay off a car loan.   It is important to note that under §1957, money laundering is defined far more broadly than under § 1956 and does not require the government to prove that the defendant acted with specific intent.

The penalties for money laundering under the federal statutes can be severe. For instance, if you are convicted of money laundering under §1956, you could face a fine of up to twice the value of the money laundered (capped at $500,000) and/or be imprisoned for up to 20 years.  A §1957 conviction carries a maximum penalty of 10 years in prison and the fine is capped at $250,000 or twice the value of the money laundered.

Beyond the money laundering charges, drug trafficking cases generally include multiple other criminal counts, such as conspiracy to distribute controlled substances and use of a gun in a drug offense and/or a felon in possession of a firearm.  These federal offenses come with stiff penalties and are best handled by a criminal defense attorney with substantial experience defending complex federal cases.

Texas Money Laundering Statute

Texas’ money laundering statute is set forth at Texas Penal Code § 34.02.  Under the statute, a person commits the offense of money laundering by knowingly:

  1. Acquiring or maintaining an interest in, concealing, possessing, transporting or transferring proceeds from a criminal activity;
  2. Conducting, facilitating or supervising a transaction which involves money from a criminal activity;
  3. Investing, expending or receiving funds (or offering to do so) from a criminal activity or believes such funds to be the proceeds of criminal activity; or
  4. Financing or investing funds (or intending to do so) that the person believes are intended to be used in the furtherance of criminal activity.

The degree of the offense and the associated penalties are based upon the amount of money involved. For instance, a person can be charged with a first degree felony in Texas if the funds associated with the criminal activity are valued at $300,000 or more.

How Do Law Enforcement Officials in Texas Target Suspected Drug Traffickers?

In order to pull over a vehicle traveling on Texas highways, law enforcement officials must first establish “probable cause” to stop the vehicle, which is defined as any violation of the law.  Since there are thousands of different traffic violations in Texas, law enforcement officials are notorious for relying upon traffic violations to establish probable cause to stop vehicles targeted for suspected drug trafficking activities.

Some of the most common violations used to establish probable cause include following another vehicle too closely, driving over the fog line or onto the shoulder, speeding, changing lanes without signaling and driving in the passing lane.  Troopers will closely watch certain “targeted vehicles,” including vehicles with out-of-state plates, rental cars, young drivers, large vehicles with lots of luggage and vehicles traveling in groups to find a traffic violation so that they can stop the driver and conduct a drug investigation.

If you have been pulled over by a trooper, it is very important to understand that the trooper’s rights are limited in scope.  For instance, while you should be respectful and polite, you do not have to consent to a search of your vehicle unless the trooper establishes probable cause to search your vehicle, such as where you have a bag of marijuana in plain view.  If you do not agree to a search and there is no evidence of drug activity in plain view, the trooper may want to use a drug dog to sniff your vehicle.  In most situations, the trooper will not have a drug dog on site and will have to detain you for a sufficient amount of time so that a drug dog can get to the scene.   Because the trooper must establish reasonable suspicion to extend a detention, he or she will use certain techniques to justify the detention, such as an incoherent or inconsistent story as to where you are coming from and going to, a rental car agreement that does not match your name, your prior criminal history and other factors.

The two most important things you can do when you are stopped is to limit your conversation and never give consent to search your vehicle.   Far too often, a driver will say or do something that gives the trooper probable cause to search the vehicle for evidence of drug trafficking.  The best thing you can do is to be polite and respectful. If the trooper is asking you a lot of questions, you can ask if you are required to answer and/or if you are being detained.  Attorney Michael Lowe has developed a video “How to Avoid Trouble When Pulled Over by State Troopers,”  which explains the process in more detail and discusses the techniques and strategies law enforcement will use to establish the facts they need to detain your vehicle.

If I am Arrested on Drug Trafficking Charges, What Can I Expect?

If you are stopped and ultimately arrested on drug trafficking and/or money laundering charges, the most important thing you can do is seek the advice of a qualified criminal defense attorney immediately.  Whether you are facing federal or state charges, your attorney can explain in detail how the process works and make sure that your rights are protected at every stage.  Below is a short summary of how the justice system generally operates in federal and state drug trafficking cases.

The Process Under Texas Law

In Texas State Court, you will be arrested and held in jail until the magistrate conducts arraignment and sets bond.  While the magistrate is required to consider certain facts set forth in the Texas Code of Criminal Procedure § 17.15 when establishing bond, oftentimes the bond amount is set too high.  In these situations, at attorney can file a motion or writ of habeas corpus to get the bond amount reduced.

Every defendant is entitled to have the grand jury hear their felony case to determine probable cause. In Texas State Court, you will be entitled to have an examining trial prior to the grand jury hearing.  It is important to hire a lawyer early in your case because your lawyer can request an examining trial and conduct a probable cause hearing prior to the grand jury. This often yields helpful testimony in preparation for the grand jury hearing or even trial later on.

The Process Under Federal Law

In Federal Court, you will be arrested and brought directly to a U.S. Magistrate for an initial appearance. The purpose for the initial appearance is to read the indictment or complaint to the defendant and appoint the defendant counsel.

If the U.S. Attorney’s office files a Motion to Detain the Defendant, the Magistrate will then schedule a detention hearing in no more than 3 days.   A felony detention hearing can be complicated and the U.S. Attorney has developed a manual that sets forth detailed information on the process.

If there is a Motion to Detain and the offense alleged creates a presumption of detention, you will be required to overcome the presumption with direct testimonial evidence. You can file a motion to have the detention hearing held up to 5 days after your arrest. If there is no indictment and you are arrested strictly on a sworn complaint, you will be entitled to receive a probable cause hearing at the same time as your detention hearing. It is important to find an attorney who is able to put on evidence at these hearings that you are not a danger to the community or a flight risk. It is also important that your lawyer be prepared to cross examine the U.S. Government’s witnesses about probable cause.

How a Texas Criminal Defense Attorney Can Help

If you or someone you care about has been arrested on drug trafficking and other related charges, it is important to seek out the advice of a qualified criminal defense attorney as early on as possible in the process.  Unfortunately, many people wait far too long to contact a defense lawyer and end up jeopardizing their case.

Michael Lowe is a seasoned criminal defense attorney experienced in representing clients in federal and state drug trafficking and money laundering cases.  He knows the tactics that the government uses to investigate and prosecute these cases and has achieved dismissals and reductions of charges for his clients in several cases, including:

Mr. Lowe appreciates that these cases tend to involve complex facts and circumstances.  He meticulously prepares every defense and encourages individuals facing these types of charges to speak with him immediately so that their legal rights are fully protected and preserved at every stage of the legal process.

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