Charging money laundering based upon a tax offence: No longer a bridge too far

Ian M. Comisky

Journal of Financial Compliance, 2019, vol. 3, issue 1, 23-28

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 (search for similar items in EconPapers)
JEL-codes: E5 G2 K2 (search for similar items in EconPapers)
Date: 2019
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