GENERAL ASSEMBLY OF NORTH CAROLINA

EXTRA SESSION 1994

H	1 

HOUSE BILL 144

Short Title:  Money Laundering Offense.	(Public)
─────────────────────────────────────── 
Sponsors: Representatives B. Miller and Moore.
─────────────────────────────────────── 
Referred to:  Judiciary III.
─────────────────────────────────────── 

February 14, 1994

A BILL TO BE ENTITLED
AN ACT TO ENACT A MONEY LAUNDERING STATUTE THAT SPECIFIES CRIMINAL PENALTIES FOR VIOLATIONS AND PROVIDES FOR FORFEITURE OF PROPERTY USED TO FACILITATE, RECEIVED AS PROCEEDS FROM, OR TRACEABLE TO FELONIOUS CRIMINAL ACTIVITY.
The General Assembly of North Carolina enacts:
Section 1.  Chapter 14 of the General Statutes is amended by adding a new Article to read:
"ARTICLE 19C.
"Money Laundering and Related Offenses.
"§ 14-113.18.  Definitions.
The following definitions apply in this Article:
(1)	Conduct. – Includes initiating, concluding, or participating in initiating, or concluding a transaction.
(2)	Criminally derived property. – Property constituting, or derived from, proceeds obtained from a criminal offense.
(3)	Financial institution. – When located or doing business in this State:
a.	A national bank or banking association or a State or local bank or banking association.
b.	A commercial bank or trust company organized under the laws of the United States or any state.
c.	A private bank or industrial bank.
d.	A savings bank, thrift association, savings and loan association, or building and loan association organized under the laws of the United States or any state.
e.	An agency or a branch of a foreign bank in the United States.
f.	An insured institution as defined in section 401(a) of the National Housing Act (12 U.S.C. § 1724(a)).
g.	A broker or dealer in securities or commodities registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934 (15 U.S.C. § 78a et seq.).
h.	An investment banker or investment company.
i.	A currency exchange.
j.	An issuer, a redeemer, or a cashier of traveler's checks, checks, money orders, or similar instruments.
k.	An operator of a credit card system.
l.	An insurance company.
m.	A dealer in precious metals, stones, or jewels.
n.	A pawnbroker.
o.	A travel agency.
p.	A licensed sender of money.
q.	A telegraph company.
r.	An agency of the State or of the United States carrying out a duty or power of a business.
s.	A business or agency carrying out a similar, related substitute duty or power the Secretary of the Treasury prescribes.
(4)	Financial transaction. – A transaction that affects interstate or foreign commerce, and involves the movement of funds by wire or another means involving one or more monetary instruments,  or a transaction involving the use of a financial institution that is engaged in, or the activities of which affect interstate or foreign commerce.
(5)	Knowing or knowledge. – A person knew or had knowledge the property involved in the transaction represented proceeds of some form, though not necessarily which form, of activity that constitutes a felony under state or federal law, or that the person knew that the property involved was used to conduct to facilitate, or was traceable to some form, though not necessarily which form, of activity which constituted a felony under state or federal law.
(6)	Monetary instruments. – Coin or currency of the United States or any other country, traveler's checks, personal checks, bank checks, money orders, and investment securities or negotiable instruments in bearer form or another form by which title thereto passes upon delivery.
(7)	Represented. – Any representation made by a law enforcement officer or by another person at the direction of, or with the approval of, a State official authorized to investigate or prosecute violations of this Article.
(8)	Transaction. – Includes a purchase, a sale, a loan, a pledge, a gift, a transfer, a delivery, or another disposition and, with respect to a financial institution, includes a deposit, a withdrawal, a transfer between accounts, an exchange of currency, a loan, an extension of credit, a purchase or sale of a stock, bond, or another monetary instrument, or any other payment, transfer, or delivery, by, through, or to a financial institution, by whatever means effected.
(9)	Unlawful activity. – A criminal offense punished under the laws of this State or the United States by death or imprisonment, or a criminal offense punished under the laws of another jurisdiction or foreign country by death or imprisonment for a term exceeding one year.
"§ 14-113.19. Making unlawful financial transactions.
A person who conducts or attempts to conduct a financial transaction involving one or more monetary instruments whose value exceeds ten thousand dollars ($10,000) and who has any of the following intentions or knowledge makes an unlawful financial transaction through a financial institution:
(1)	The intent to promote the carrying on of an unlawful activity;
(2)	The intent to engage in acts subject to penalty under G.S. 105-229, G.S. 105-236, or 26 U.S.C. §§ 7201 or 7206; or
(3)	Knowledge that the transaction is designed in whole or in part:
a.	To conceal or disguise the nature, location, source, ownership, or control of the proceeds of specified unlawful activity or the nature of the unlawful activity; or
b.	To avoid a transaction-reporting requirement under State or federal law.
Making an unlawful financial transaction is a Class G felony.  A fine imposed may not exceed the greater of five hundred thousand dollars ($500,000) or twice the value of the property involved in the transaction.
"§ 14-113.20. Unlawful transportation of property.
A person who transports, transmits, transfers, or attempts to transport, transmit, or transfer one or more monetary instruments whose value exceeds ten thousand dollars ($10,000) from a place in North Carolina to or through a place outside the State or the United States, or to a place in North Carolina from or through a place outside the State or the United States and who has any of the following intentions or knowledge commits an unlawful transportation of property.
(1)	The intent to promote the carrying on of unlawful activity;
(2)	Knowledge that the transportation represents the proceeds of some form of unlawful activity;
(3)	Knowledge that the monetary instrument or funds were used to conduct or facilitate some form of unlawful activity;
(4)	Knowledge that the monetary instrument or funds are traceable to some form of unlawful activity; or
(5)	Knowledge that the transportation is designed in whole or in part:
a.	To conceal or disguise the nature, location, source, ownership, or control of the property involved; or
b.	To avoid a transaction-reporting requirement under State or federal law.
Committing an unlawful transportation of property is a Class G felony.  A fine imposed may not exceed the greater of five hundred thousand dollars ($500,000) or twice the value of the property involved in the transportation.  For the purpose of an offense under this section, the defendant's knowledge may be established by proof that a law enforcement officer represented the matter specified in this section as true and that the defendant's subsequent statements or actions indicated that the defendant believed the representations to be true.
"§ 14-113.21. Monetary transactions in criminally derived property.
Any person who knowingly engages or attempts to engage in a monetary transaction in criminally derived property that is of a value greater than ten thousand dollars ($10,000) and is derived from unlawful activity is guilty of money laundering or commits a Class H felony.  In a prosecution for an offense under this section, the State is not required to prove that the defendant had knowledge that the activity from which the criminally derived property was derived was an unlawful activity.
"§ 14-113.22. Conspiracy to transact or transport.
A person who conspires to commit an offense set out in G.S. 14-113.20 or G.S. 14-173.21 in this Article is subject to the same penalties as those prescribed for the offense the commission of which was the object of the conspiracy.
"§ 14-113.23. Criminal penalty; forfeiture.
(a)	Penalty. – A person who conducts or attempts to conduct a transaction described in G.S. 14-113.20 is subject to a penalty not to exceed the greater of:
(1)	The value of the property, funds, or monetary instruments involved in the transaction; or
(2)	Ten thousand dollars ($10,000).
(b)	Forfeiture. – Except as provided in this subsection, any property, real or personal, involved in an offense under this Article, or any property traceable to that property is subject to forfeiture to the State.  The court in imposing sentence on a person convicted of an offense in this Article shall order that the person forfeit to the State of North Carolina any property traceable to that property.  No property shall be forfeited under this subsection in the following circumstances:
(1)	To the extent the property used without the knowledge of the interest of an owner or lienholder by reason of any act or omission established by that owner or lienholder to have been committed without the knowledge of that owner or lienholder; or
(2)	In the case of a violation by a domestic financial institution examined by a federal bank supervisory agency of a financial institution regulated by the Securities and Exchange Commission or a partner, director, or employee of the institution.
(c)	Seizure. – Any property subject to forfeiture to the State under subsection (b) may be seized by the Attorney General or any law enforcement officer, upon process issued by an district or superior court having jurisdiction over the property, except that seizure without process may be made when:
(1)	The seizure is pursuant to a lawful arrest or search under a search warrant; or
(2)	The property subject to seizure has been the subject to criminal forfeiture under this Article.
(d)	Disposition of property. – Property taken or detained under this section is not repleviable, and is considered to be in the custody of the Attorney General or the law enforcement agency seizing it which may:
(1)	Place the property under seal;
(2)	Remove the property to a place designated by it; or
(3)	Request the North Carolina Department of Justice take custody of the property and remove it to an appropriate location for disposition in accordance with law.
(e)	Effect of section. – Nothing in this section supersedes any provision of federal, state, or other law imposing criminal penalties or affording civil remedies in addition to those provided for in this Article.
"§ 14-113.24.  Investigations under this Article; jurisdiction.
(a)	Investigations. – Violations of this Article may be investigated by the Attorney General and the Secretary of Revenue.
(b)	Jurisdiction. – There is extraterritorial jurisdiction of conduct prohibited by this Article if:
(1)	The conduct is by a citizen of North Carolina or, in the case of a non-North Carolina citizen, the conduct occurs in whole or in part within North Carolina; and
(2)	The transaction or a series of related transactions involve funds or monetary instruments of a value in excess of ten thousand dollars ($10,000).
"§ 14-113.25.  Report of convicted financial institutions.
If a financial institution or any officer, director, or employee of a financial institution has been found guilty of an offense under this Article, the Attorney General shall provide written notice of such fact to the Secretary of State and to the appropriate regulatory agency for the financial institution."
Sec. 2.  This act becomes effective January 1, 1995, and applies to offenses committed on or after that date.