USA Law and Practice Contributed by: Daniel J. Fetterman and Brian S. Choi, Kasowitz LLP
3.3 Money Laundering To prove money laundering, the government must show that (1) the money at issue was derived as pro - ceeds from specified illegal activity; (2) the defend - ant conducted or attempted to conduct a financial transaction; (3) with knowledge that the funds were derived from criminal activity; and (4) the transaction was intended to conceal the source or ownership of the money, avoid reporting requirements, or promote further illegal activity. Financial institutions have an array of anti-money laundering obligations, including (1) the verification of the identity of new customers; (2) conducting ongo - ing risk-based monitoring of business relationships to identify high-risk customers; (3) identifying actual individuals that own or control a legal entity customer; (4) monitoring transactions and filing suspicious activ - ity reports for activity suspected to be linked to fraud, money laundering, or terrorism; (5) developing internal policies and training staff to identify suspicious activ - ity; (6) conducting regular and independent audits of an anti-money laundering programme; and (7) retain - ing customer identification and transaction records for a minimum required period. 3.4 Financial Services Crime Section 10 (b) of the Securities Exchange Act, and SEC Rule 10b-5, are the primary regulations governing insider trading, market manipulation, misleading dis - closures, and unauthorised financial services activity. Section 10 (b) prohibits the use of any “manipulative or deceptive device or contrivance” in violation of regu - lations governing the purchase or sale of securities. Rule 10b-5 prohibits fraud, material misstatements, omissions, and deceptive practices in connection with the purchase or sale of any security. Federal prosecutors and SEC lawyers often rely on Section 10 (b) and Rule 10b-5 in criminal and civil enforcement actions involving insider trading, pump- and-dump or short-and-distort schemes, or mislead - ing disclosures in corporate documents in which material facts are omitted or deceptive half-truths appear.
those individuals or companies that are the target of the government’s investigation – after notice and hear - ing – if it is able to demonstrate a substantial probabil - ity that it will prevail on seeking the assets’ forfeiture, that without the order the property may be destroyed, removed, or otherwise made unavailable, and that its preservation needs outweigh any hardship to the indi - vidual or company. The government also may seek an ex parte temporary restraining order before an indict - ment is filed based on a showing of probable cause that the property would be forfeitable and that giving notice would jeopardise the property’s availability. The government has similar pre-charge tools under civil forfeiture laws. 3. Core Financial Crime Offences 3.1 Fraud and Dishonesty Offences The principal fraud offences are mail and wire fraud. These offences require the government to prove (1) the existence of a scheme to defraud; (2) an intent to defraud; (3) use of the mails or wires; and (4) mate - riality of the misrepresentations or omissions in the scheme. 3.2 Bribery and Corruption There are three well-known corruption statutes. • First, the Foreign Corrupt Practices Act (15 U.S.C. 78dd1, et seq.) prohibits (1) US companies from; (2) making payments or offering anything of value; (3) to a foreign official; (4) with a corrupt intent to influence the official to act in violation of their duty or to secure an improper advantage to retain or obtain business. • Second, the Federal Bribery Statute (18 U.S.C. 201) prohibits (1) payment of money or a thing of value; (2) to a federal official; (3) with a corrupt intent to influence the official; (4) to undertake an official act in violation of their duty. • Third, Federal Program Bribery (18 U.S.C. 666) prohibits (1) the offering, soliciting, or accepting of any items of value; (2) to an agent of an organisa - tion receiving federal funds; (3) with the corrupt intent to influence or reward the agent to engage in an official act.
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