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'Promoting' Money Laundering

By Jeffrey T. Green

In the global marketplace, corporate and outside counsel are inundated with information about corruption levels in various countries, all on a generalized, country-specific level. What happens, though, if you learn that your client is regularly doing business with another company that is the subject of dark, though unsubstantiated, rumors of corruption? In addition to other potential charges, could your client also violate the money laundering statute even if it made no effort to conceal any source of funds?

A new theory of “promotion” liability under 18 U.S.C. ' 1956 (a)(1) indicates that the answer may well be “yes.” The plain language of the statute prohibits both transactions designed to conceal illegal activity, as well as transactions utilizing unlawful proceeds undertaken with “the intent to promote the carrying on of specified unlawful activity.” The concealment prong of the statute ' which prohibits hiding and legitimizing ill-gotten funds ' is the offense most often associated with money laundering. But the promotion prong poses additional, unforeseen risks to your client.

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