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Charging money laundering based upon a tax offence: No longer a bridge too far
Journal of Financial Compliance,
3
(1),
23-28
(2019)
Abstract
Under US law, the most frequently employed money laundering statute involves financial transactions arising from conduct involving specified unlawful activities (SUAs). Tax evasion is not an SUA under US law. Some case law has supported the proposition that tax violations can be charged as a mail or wire fraud offences, which are SUA’s, thereby permitting the statutes to be employed as a vehicle to charge tax violations as money laundering. The US Department of Justice Tax Division issued certain directives (which are not binding) that limited the use of money laundering charges for tax crimes. Recently, in a case involving the Panama Papers arising out of the Southern District of New York, a taxpayer was charged with money laundering based on what seemed to be traditional tax offences. This paper will cover whether this is an anomaly or a trend to be concerned about in the future.
Keywords: money laundering; specified unlawful activities under US money laundering laws; tax evasion; wire fraud; Panama Papers
The full article is available to subscribers to the journal.
Author's Biography
Ian M. Comisky is the Chair of International Compliance with the law firm of Fox Rothschild LLP. Mr Comisky concentrates his practice in the areas of civil and criminal tax litigation, anti-money laundering compliance, and complex corporate and commercial litigation. Mr Comisky is a graduate of the Wharton School of Business of the University of Pennsylvania and the University of Pennsylvania Law School. Mr Comisky was an Assistant United States Attorney in the Southern District of Florida and obtained an LLM in taxation from the University of Miami. Mr Comisky is the co-author of Tax Fraud and Evasion, which contains chapters dealing with US money laundering, Bank Secrecy Act (BSA) and Foreign Account Tax Compliance Act (FATCA) compliance issues. Mr Comisky has been retained by financial institutions with respect to compliance matters primarily relating to the US BSA and related money laundering and asset forfeiture issues. Mr Comisky has represented individuals and entities in connection with issues relating to foreign bank accounts and has represented foreign financial institutions in connection with FATCA and Common Reporting Standard (CRS) compliance. Mr Comisky has further handled other commercial litigation including Racketeer Influenced and Corrupt Organisations (RICO) class action and other complex commercial disputes primarily in federal courts in Philadelphia and Florida. Mr Comisky is an adjunct professor at the University of Pennsylvania law school teaching a course in money laundering.
