Recent Trends in U.S. Money Laundering Prosecutions: A Shift in DOJ Priorities
The landscape of money laundering prosecutions in the U.S. is undergoing a significant transformation. With ever-evolving tactics employed by criminal enterprises, the Department of Justice (DOJ) is not just adapting; it’s pivoting towards a more aggressive stance. In this article, we will explore how federal regulations, particularly the Bank Secrecy Act and the Money Laundering Control Act, have shaped the framework for addressing these challenges and what the latest trends indicate for the future of enforcement efforts.
Foundations of Money Laundering Regulations
The Bank Secrecy Act (1970) and the Money Laundering Control Act (1986) set the stage for regulating money laundering in the United States. These foundational regulations criminalize financial transactions linked to criminal activities and mandate that financial institutions take proactive steps to prevent such activities. Noteworthy amendments, such as those introduced by the USA PATRIOT Act, have further strengthened these regulations.
Prior DOJ Guidance: A Coordinated Approach
Coordinating Anti-Money Laundering Efforts
Historically, the DOJ has focused on interagency coordination to combat money laundering effectively. The Money Laundering and Asset Recovery Section (MLARS) spearheads these efforts, often partnering with other sections of the Criminal Division and U.S. Attorney’s Offices across different jurisdictions.
In October 2023, in a response to the burgeoning cryptocurrency sector, the DOJ established the National Cryptocurrency Enforcement Team. This specialized unit aims to harness existing expertise for tackling criminal activities associated with cryptocurrency, recognizing its rising prominence in the financial landscape.
Updates from 2020 Onwards
In January 2020, the DOJ revamped its guidance on money laundering prosecutions. A key focus was to ensure consistent application of the money laundering statutes and streamline the prosecution approval process within MLARS.
On September 17, 2024, MLARS and the DOJ’s Fraud Section initiated the Corporate Whistleblower Awards Pilot Program, designed to incentivize whistleblowers. This initiative targets specific crimes involving financial institutions, from traditional banks to cryptocurrency platforms, including corruption, fraud, and misconduct.
Emerging Trends in DOJ Prosecutions
With a shift in leadership and strategy at the DOJ, recent trends reveal an increasingly aggressive posture towards money laundering investigations and prosecutions.
1. Intensified Prosecutions
The DOJ is stepping up its game. Authorities are now intertwining money laundering charges with other criminal charges such as wire fraud and tax fraud. This multifaceted approach amplifies potential penalties for offenders.
2. Targeting International Criminal Organizations
Focus is shifting towards financial institutions and services aiding narcotics-related laundering operations. Businesses, particularly those with ties to Latin America, should expect heightened scrutiny.
3. Evasion of Sanctions
As the global economy evolves, the DOJ is zeroing in on individuals and entities that are employing evasive tactics to avoid sanctions. This includes entities allied with terrorist organizations and hostile foreign actors.
Recent High-Profile Prosecutions
The DOJ’s renewed focus on money laundering has resulted in significant indictments over the past year.
For instance, in March 2023, the Southern District of New York unsealed an indictment against two defendants charged with a wide array of financial crimes, including wire fraud and money laundering. The indictment alleges a conspiracy that defrauded victims of over $1 billion.
In another case from February 2024, federal prosecutors indicted three individuals, including a Russian oligarch, in connection with schemes to evade sanctions and launder funds tied to elite real estate holdings. The stakes are increasingly high, with potential sentences reaching up to 80 years.
The Evolution of Anti-Corruption Prosecutions
In a surprising shift, the DOJ has requested delays in several anti-corruption and bribery trials, especially in light of the new administration’s executive orders. Several cases have already seen adjournments, signaling a potentially less aggressive approach towards Foreign Corrupt Practices Act (FCPA) enforcement.
Navigating the Crypto Landscape
The rise of digital assets has not gone unnoticed. As of February 2025, there are over 13,700 digital assets worth approximately $3.2 trillion. With this surge, the DOJ continues to monitor major actors in the cryptocurrency space.
In May 2023, a former product manager from Coinbase became the first insider trader in the cryptocurrency realm to face incarceration. The DOJ is also investigating notorious trading practices like wash trading, which aim to artificially inflate a coin’s perceived value.
Navigating New Policy Directions
Recent memos issued by the Attorney General highlight a decentralization of prosecutorial authority. U.S. Attorney’s Offices can now more autonomously pursue charges against cartels without requiring prior approval from Main Justice. This change might trigger a wave of new indictments against drug trafficking organizations and transnational criminal entities.
Significant Court Decisions to Note
A landmark decision in April 2023 reaffirmed that foreign states do not enjoy immunity from criminal proceedings under the Foreign Sovereign Immunities Act (FSIA). This ruling is pivotal as it opens the door for holding foreign entities accountable for their involvement in U.S. sanctions evasion.
Conclusion: A Vigilant Future Ahead
As the DOJ shifts its focus from international corporate crime and crypto cases to a more aggressive hunt for drug trafficking organizations (DTOs) and transnational criminal organizations (TCOs), companies must remain watchful. The evolving regulatory landscape necessitates that businesses ensure compliance and adapt to potential inquiries.
The stakes are higher than ever, and proactive measures are essential. If history serves as a guide, criminal organizations will seek alternative avenues for laundering their illicit gains. Hence, vigilance and preparedness will be paramount for companies operating in a complex financial landscape.
Acknowledgments
We extend our gratitude to Maxwell Weiss and Thaddeus R. Kleckley for their invaluable contributions to this analysis.
Further Reading
- U.S. Department of Justice – Money Laundering Section
- USA PATRIOT Act
- Foreign Corrupt Practices Act Overview
