Cryptocurrency has been at the forefront of debate between various law enforcement and regulatory efforts to impose stricter controls and regulations and those who view it as a form of currency that should not be closely regulated. Within the past two weeks, both the SEC and the Treasury Department have defended their enforcement actions and requested additional tools to combat cryptocurrency fraud and misuse.

The SEC again defended its authority to regulate crypto, despite critics claiming that cryptocurrency is a commodity not an SEC regulated security. At the SEC Speaks in 2024 event, Enforcement Chief Gurbir Grewal maintained that the SEC’s enforcement actions have been consistent and principled, tied to federal securities laws and court precedents. The SEC’s position is that if a crypto asset was offered and sold as an investment contract, it’s a security under the Howey test. The SEC rejects the argument that crypto products are currencies and beyond the reach of SEC regulation. To date, various courts have upheld the SEC’s position.

The Treasury Department has once again called on Congress for additional tools to combat cryptocurrency use by terrorist organizations who circumvent restrictions and embargoes to gain access to funds. One of the recent requests was to introduce secondary sanctions that would allow the Treasury Department to target digital asset providers, even extraterritorially. Included in the various requests was extra funding for the Office of Foreign Assets Control.

A number of Senators support strong anti-money laundering restrictions on cryptocurrency. Many in the crypto sector do not comply with know your customer, documentation of account holders, source of assets and other anti-money laundering measures. Other Senators want only a “light regulatory system” that imposes restrictions on centralized retail crypto exchanges to bring crypto out of the “Wild West”.

Clearly, cryptocurrencies will continue to be subject to increasing regulations and enforcement as Congress and regulatory agencies understand the nuances and complexities of ever developing and expanding platforms.

Stahl Gasiorowski Criminal Defense Attorneys are experienced in defending individuals charged with various crypto related offenses, including wire fraud, money laundering, unregistered currency exchange and securities fraud. To contact us call 908.301.9001 for the NJ office and 212.755.3300 for the NYC office, or email Mr. Stahl at rgs@sgdefenselaw.com or Laura K. Gasiorowski at lkg@sgdefenselaw.com

When facing the formidable gears of the federal justice system, individuals accused of bribery and extortion are immediately thrust into a complex legal arena where the stakes couldn’t be higher. These white-collar crimes carry severe penalties, including hefty fines and significant prison time. In such high-stress, high-stakes situations, securing an experienced criminal defense attorney is not just a strategic move—it’s an absolute necessity.

Understanding the Grave Nature of Federal Charges

Bribery and extortion are federal offenses characterized by an abuse of power or position. Bribery involves offering, giving, receiving, or soliciting something of value for the purpose of influencing the action of an official in the discharge of their legal duties. Extortion, on the other hand, refers to obtaining something of value through coercion. It is critical for defendants to understand that the mere accusation carries with it a social stigma that can tarnish reputations and careers irreparably.

The Defense You Deserve: The Role of Your Attorney

The law surrounding federal bribery and extortion is complex, with numerous statutes and regulations in play. It is extremely important to hire a criminal defense attorney with experience in federal criminal defense to navigate this labyrinthine legal landscape effectively. Federal court procedures, plea negotiations and trials can vary significantly from those of state courts, with their own discovery rules, rules of evidence, pleading standards, and judicial practices. Federal prosecutions are often much more complex than state proceedings, and also involve equally complicated forfeiture and restitution issues that require the assistance of an experienced federal practitioner. At Stahl Gasiorowski, our practice is solely devoted to criminal defense, and partners Robert G. Stahl, a former Assistant United States Attorney, and Laura K. Gasiorowski have more than sixty years’ experience in federal criminal defense between them.

Strategic Defense Planning

Every piece of evidence and every statement made in the context of these charges can profoundly impact the outcome of a case. Partners Robert Stahl and Laura Gasiorowski work diligently to evaluate the prosecution’s evidence and to develop strategies that can counteract the government’s case, utilizing skilled investigators and top notch expert witnesses where necessary.

In cases where evidence is substantial and our client wants to plead, Stahl Gasiorowski will work to secure a plea deal that limits the client’s sentencing exposure and the fines and restitution payments. Where the client may have a factual or legal defense, or insists on exercising her constitutional right to a trial, we use an aggressive pretrial motion practice, investigation and meticulous preparation to mount a defense for trial. Our years of experience mean that we can advise you on the risks and benefits of a plea or trial, and assist you in making the best decision for yourself and your family.

Perhaps most importantly, we ensure that all of your constitutional rights are protected throughout the legal process. Our skilled attorneys are a buffer against potential overreach by prosecutors and work to ensure that you receive a fair trial and the most zealous and aggressive defense possible.

If you or someone you know has been charged with federal bribery or extortion, the time to secure a defense attorney is immediately upon suspicion or accusation. Early legal intervention can be pivotal as it allows for preparation time and the possibility of engaging with federal investigators on your behalf before charges are formally filed.

The complexities of federal bribery and extortion charges demand a defense that is sophisticated, tactical, and rooted in comprehensive legal knowledge. The intervention of a criminal defense attorney is integral in safeguarding rights, securing fair treatment under the law, and ensuring that the defendant’s side of the story is heard. Do not underestimate the gravity of federal criminal charges—invest in the defense you unquestionably need.

For expert legal assistance and a defense that leaves no stone unturned, reach out to Stahl Gasiorowski Criminal Defense where our unwavering commitment to our clients is matched only by our deep understanding of federal criminal law.

Stahl Gasiorowski Criminal Defense Attorneys actively and aggressively protect clients’ rights and offer big law skills at boutique firm prices. To contact us call 908.301.9001 for the NJ office and 212.755.3300 for the NYC office, or email Mr. Stahl at rgs@sgdefenselaw.com or Laura K. Gasiorowski at lkg@sgdefenselaw.com.

Federal regulatory and law enforcement agencies have been redirecting and expanding their resources to investigate and combat frauds involving crypto and other digital platforms. The SEC recently requested $200M from Congress to hire additional 170 new employees, many to focus on crypto-related cases. These new hires will include lawyers in the Division of Enforcement’s Crypto and Cyber Unit (CACU) that focuses on violations of federal securities laws. This request is in addition to the 20 positions added in 2022.

With the recent collapse of FTX, and fraudulent conduct or hacked accounts involving Ethereum, Celsius, Nomad, Wormhole and BlockFi, to name a few, there is good reason for increased budgets, new hires and advanced technology to investigate, uncover and prosecute crypto-related frauds.

Until recently, crypto platforms, initial offerings and digital start-ups were less regulated than traditional financial offerings and investments. With the advent of so many major collapses and frauds, however, law enforcement and Congress have focused their attentions on regulating these platforms to help prevent pump and dump schemes, unregistered money transfers, know your customer requirements, and money laundering.

A major example of this increased scrutiny is the SEC’s recent Wells Notice to Coinbase, a well-established company that was publicly listed in 2021 and has repeatedly attempted to register its spot platform. The Notice listed potential claims Coinbase could face including operating as an unregistered exchange, listing unregistered securities in the form of digital assets, and offering services such as staking and wallet activity that could violate securities law. Coinbase is pushing back hard on these potential claims arguing that the SEC has not specified which digital assets potentially qualify as securities, which aspects of its stalking service are of concern and whether Coinbase’s recent updates corrected any of these potential issues. Moreover, Coinbase has argued that the SEC has dramatically changed its position from May 2021, when SEC Chair Gary Gensler told Congress that there was no framework for crypto at the SEC or at the U.S. Commodity Futures Trading Commission, and that he looked forward to working with Congress to develop one. By the end of 2022, however, Gensler said that he believed the SEC had enough authority to regulate the space. It is Coinbase’s position that these two statements are “diametrically opposed.”

The increase in regulatory and enforcement actions here in the United States, and more recently in countries traditionally sought for their lax monetary regulations, has caught many “crypto entrepreneurs” unaware. Many in this burgeoning field are young who get their “advice” from chat groups, Instagram and other platforms where influencers flaunt their apparent wealth and possessions all allegedly obtained through their skills at buying, trading and investing in crypto and NFTs. Many are completely unaware, while other intentionally ignore, the many statutes, regulations and rules that regulate digital assets and platforms.

Stahl Gasiorowski Criminal Defense Attorneys has represented a number of individuals investigated and charged with crypto-related frauds and failures to register. To contact Mr. Stahl, call 908.301.9001 for the NJ office and 212.755.3300 for the NYC office, or email Mr. Stahl at rgs@sgdefenselaw.com.

News reports today indicate that Bravo celebrity Jen Shah was sentenced to 78 months for her role in a wire fraud that resulted in $5 million in losses.

For people unfamiliar with the federal sentencing guidelines, the base offense level for a wire fraud is enhanced by a number of levels that corresponds to the loss amount. For a loss of more than $3.5 million but less than $9.5 million, USSG 2B1.1 instructs that 18 additional levels should be added to the base offense level. The resulting offense level may then be further enhanced by additional characteristics of the crime including the number of victims and the the special vulnerability of victims, or additional characteristics of the offender, such as whether he or she used a special skill or abused a position of trust. The total offense level then corresponds to a range of months which increases vertically by the prior criminal history of a defendant.

In this case, Jen Shah’s attorneys requested a significant variance down from the applicable 130 month guideline range, insisting that Ms. Shah should serve no more than 36 months, or 3 years. To challenge Jen Shah’s recommended sentencing range, and justify such a significant variance, her lawyers presented mitigating factors pursuant to 18 U.S.C. 3553, which requires a sentencing court to consider the personal history and characteristics of the defendant, the nature and circumstances of the offense, and any other relevant factor that mitigate or reduce the defendant’s culpability.

Even though there are guidelines instructing recommended sentencing ranges for specific offenses, defendants are entitled to individualized sentencing that takes into account their personal history and circumstances, and the specific circumstances of the crime that may distinguish it from the “heartland” case. For defendants facing federal charges, it is crucial to hire a criminal defense attorney with experience in federal criminal matters, and the special skill required to assemble and present a compelling sentencing mitigation argument.

The lawyers at Stahl Gasiorowski. PC have represented hundreds of federal defendants before sentencing courts in New York, New Jersey and elsewhere. For each and every case, we delve into a client’s personal history, and the facts of the case, to present an exquisitely crafted sentencing memo that puts the client’s criminal conduct into context and establishes a reasoned and emotional basis for leniency. To contact the firm’s NJ office, call 908.301.9001 and to contact the firm’s NYC office, call 212.755.3300.

In United States v. Fallon, a precedential opinion published on September 30, the Third Circuit reversed a defendant’s conviction for money laundering and, more importantly, issued a bright-line rule holding that financial transactions that take place before a defendant receives any proceeds from a fraudulent scheme cannot be considered “concealment” money laundering under 18 U.S.C. 1956(a). In the court’s words, “a money-laundering transaction can only occur after funds obtained from unlawful activity (e.g., fraud schemes) are delivered into the defendant’s possession.” The opinion provides white-collar criminal defense attorneys with valuable precedent to counter overzealous money laundering prosecutions and civil forfeiture actions in federal court in New Jersey and throughout the Third Circuit.

Money laundering is a transaction in unlawful proceeds of a crime designed to conceal the nature of the proceeds. Section 1956(a)(1)(B)(i) prohibits the laundering of proceeds of an underlying offense, such as fraud, through complex financial transactions designed “to conceal or disguise the nature, location, source, ownership and control of the proceeds.” Money laundering laws have long been a darling of prosecutors in white collar cases because they can saddle defendants with a second set of criminal charges in addition to the underlying offenses of fraud or theft, while simultaneously carrying heightened civil and criminal penalties.

As noted in Fallon in an extended critical discussion of the federal money laundering statute, a money laundering prosecution subjects a defendant to heightened legal and financial vulnerabilities. First, a defendant who did not participate in the underlying fraud or the entirety of the money laundering scheme can nevertheless be charged based on the full value of the laundered assets, resulting in a sentence that is longer than the sentence for the predicate offense. Second, a money laundering defendant faces significantly heightened exposure for civil and criminal forfeiture, because the Government can – and often does – seek forfeiture of entire accounts containing both legitimate and illegitimate funds, arguing that the account facilitated the concealment of money and was therefore “involved in” money laundering under 18 U.S.C. 982. The statutory scheme provides a powerful legal and financial incentive to the Government to include money laundering charges wherever there is some basis to do so. Because every financial crime involves a financial transfer of some kind, prosecutors can significantly increase a defendant’s criminal exposure and their own chances of prosecutorial success by ascribing an intent to conceal criminal funds to every transaction that follows – or in some cases even to transactions that occur before – a theft or fraud.

In Fallon, the Government alleged that a reverse distributor of pharmaceutical products, a company that specializes in returning or destroying unused pharmaceuticals, engaged in various schemes to defraud its customers, resulting in losses of hundreds of millions of dollars. The defendants were found guilty at trial of charges alleging mail and wire fraud, as well as money laundering. The Government’s chief argument in support of its theory of money laundering was that fraudulent funds and legitimate funds had been commingled in certain company accounts. As noted by the court, however, to the extent that any commingling of accounts had occurred, it occurred earlier in time than the deposits of the fraudulently-derived money into the commingled accounts and was carried out by an employee that lacked knowledge of the fraudulent nature of the defendants’ scheme.

In an extended discussion, the Fallon court explicitly recognized the dangers of prosecutorial misuse of the money laundering statute and reiterated concerns voiced by the United States Supreme Court and the Third Circuit that money laundering charges not serve as a more potent prosecutorial tool for criminal acts more fairly charged as traditional fraud or theft. The Fallon court also noted that the Third Circuit, in United States v. Omoruyi, already limited money laundering prosecutions by requiring that the Government must prove an intent to conceal or disguise the nature of the funds, the intent to conceal being distinct from the intent to commit the crime that rendered the proceeds unlawful. 260 F.3d 291, 294–95 (3d Cir. 2001). Citing Omuyuri, the Fallon court considered the timing the fraudulent transfers a critical determining factor as to the whether the transactions qualified as money laundering under 18 U.S.C.§ 1956. Transactions that take place before the defendant obtains the proceeds of a fraudulent scheme, according the Fallon court, are not money laundering. In the court’s words, “concealment money laundering, whether classic or otherwise, requires financial transactions involving ‘proceeds’ of the fraud, and ill-gotten funds do not become ‘proceeds’ until after a defendant receives them.”

Viewing the evidence in the light most favorable to the Government, the Fallon court found insufficient evidence to prove beyond a reasonable doubt that the alleged complex financial transactions— even after the initial receipt of the “commingled” fraudulent and lawfully obtained funds—were designed for such concealment. The court explained that merely moving ill-gotten funds from one account to another does not constitute money laundering unless there is evidence that such transfers were outside normal operations of the company or designed to obscure the ill-gotten gains. Consequently the court vacated the conviction and sentences for all appellants for the count charging conspiracy to launder money and remanded for resentencing.

Stahl Gasiorowski Criminal Defense Attorneys have represented scores of clients facing restitution and forfeiture orders and garnishments. We actively and aggressively protect clients’ rights. To contact Mr. Olesnycky, call 908.301.9001 for the NJ office and 212.755.3300 for the NYC office, or email Mr. Olesnycky at aolesnycky@stahlesq.com.

A recent high profile case highlights the federal government’s ability to seize a convicted defendant’s accounts to satisfy an Order of Restitution after a conviction at trial or a guilty plea. The Second Circuit recently held that the retirement funds of Evan Greebel, the former convicted attorney and Martin Shkreli’s codefendant, could be seized in partial satisfaction of the restitution amount owed. Greebel was convicted in a separate 2017 trial for assisting his client Shkreli’s fraudulent taking of funds from Retrophin to pay Shkreli’s hedge fund debts, and for manipulating the stock price of Shkreli’s drug company. After conviction, Greebel was sentenced to 18 months in prison and ordered to pay $10.4 million in restitution.

In its opinion, the Second Circuit upheld the trial court’s decision that Greebel’s 401(k) accounts at his former law firm were subject to garnishment in an effort to collect the restitution amount. The Second Circuit held that the Mandatory Victims Restitution Act (MVRA) gives the government full access to retirement funds, and that ERISA’s prohibition on disbursing retirement funds to third parties is trumped by the MVRA.

It is well-established that under 18 U.S.C. § 3664(m)(1)(A), the Government may enforce a restitution order in the manner provided by subchapter B of Chapter 229, or 18 U.S.C. § 3613. An order of restitution may be executed in accordance with the practices and procedures for the enforcement of a civil judgment under federal law or state law or by all other available and reasonable means. 18 U.S.C. § 3613 (a) and (f).

The MVRA broadly permits the United States to enforce a restitution order “against all property or rights to property of the person fined.” Pursuant to §3613(c), once restitution is ordered, all the defendant’s property becomes subject to a lien in favor of the United States, and for purposes of debt collection, such lien is treated like a tax lien. §3613(c). Thus, any property the IRS can reach to satisfy a tax lien, a sentencing court can also reach in a restitution order – bank accounts, retirement funds, stock accounts and even Social Security benefits. Additionally, while periodic payments (usually monthly payments through the Probation Department) in satisfaction of a restitution order are limited to 25% of the defendant’s disposable income, one time lump sums payments, such as the garnishment of a retirement or bank account, are not limited.

The only issue left unanswered by the Second Circuit in Greebel was whether the government could seize all the funds, or whether it had to leave the defendant sufficient funds to pay the 10% tax penalty for early withdrawal of retirement funds. In many instances, the amount left to a defendant to pay tax penalties and taxes on garnishment of retirement accounts can be negotiated with the government.

Stahl Gasiorowski Criminal Defense Attorneys have represented scores of clients facing restitution and forfeiture orders and garnishments. We actively and aggressively protect clients’ rights. To contact Mr. Stahl, call 908.301.9001 for the NJ office and 212.755.3300 for the NYC office, or email Mr. Stahl at rstahl@stahlesq.com.

It’s 6 a.m. or 8 p.m., your doorbell rings and two people are standing outside holding up their badges and credentials. They say they are Special Agents with the FBI or IRS and would like to talk with you for just a few minutes about something important. They ask if they could come in to speak with you privately. Caught off-guard, and not wanting them to think that you have anything to hide, you invite them in (and, of course, you don’t want your neighbors to see them talking to you on your front steps). The agents are “friendly” and just have a few questions to get your input, your side of things, or to serve you with a grand jury subpoena. You decide to talk to them, only for a few minutes, in the comfort of your own home or office. At the end, they thank you for your time and hand you either a grand jury subpoena or a “target letter.”

After they leave, you start to wonder – what did I say? How much did I tell them? Am I in trouble, did I implicate myself or others? You start to look for an attorney. You can’t ask your family or friends who they hired last time the FBI or IRS visited them because you don’t know anyone who ever faced such a situation. So, you scour the internet to find an experienced criminal defense attorney, one with a lot of federal experience because it’s a federal investigation.

The next day you’re in the attorney’s office. After talking to the attorney you realize that what you thought was an innocuous 15 -30 minute chat with the FBI was actually an hour and a half where you told them some things, but not others. You discover that it is a federal crime to lie to the agents. You learn that it doesn’t matter that they didn’t read you your rights, like in the movies, because you weren’t “in custody.” When you tell the lawyer that you only spoke to them because you didn’t want the agents to think you were involved or guilty, the lawyer tells you that the agents already think that you’re involved, that’s why they were at your house to interview you in the first place. You then learn that there were two agents so that the interview was witnessed by two of them for credibility later on if you dispute what you said. You learn that a “target letter” is issued by an Assistant U.S. Attorney because she believes that you are involved in criminal activity and wants you to come in with your attorney to negotiate a plea of guilty. You realize that it was a mistake to say anything to the agents without first talking with an experienced white-collar criminal defense attorney.

So, what should you do in such a situation? The safest course would be to politely tell the agents that while you would like to talk with them, you need to contact your attorney and that he will get back to them. Ask them for their business cards so that you can give the information to your attorney. If they don’t have cards, write down their names, agency and contact information. Do not under any circumstances talk with them about the subject matter of their investigation. After they leave, contact an experienced criminal defense attorney to discuss your rights, potential exposure and your options.

If you did talk with the agents, experienced criminal defense counsel can help you get through the situation and protect your rights going forward. The task will be to mitigate any statements made and develop an overall strategy to succeed.

Stahl Gasiorowski Criminal Defense Lawyers have successfully represented hundreds of individuals under federal and state investigations. To contact the firm’s NJ office, call 908.301.9001 and to contact the firm’s NYC office, call 212.755.3300, or email Mr. Stahl at rstahl@stahlesq.com.

Each new administration, through its Attorney General, set policy as to the Department of Justice’s enforcement priorities. As the Assistant Attorney General in charge of the Criminal Division, Kenneth Polite recently outlined those priorities. In general, those areas include foreign corruption, computer crimes and money laundering/.

Polite announced that his office will be unveiling a new National Cryptocurrency Enforcement Team comprised of lawyers from the Division’s Computer Crime and Money Laundering Sections together with experienced AUSAs from around the country. This new initiative reflects the ongoing concern over the lack of regulations and enforcement of cryptocurrency and its use by cyber criminals, drug cartels and other money launderers around the world.

Continued emphasis will be placed on efforts to combat cyber-attacks and ransom demands from organized groups and state backed hackers from China, Russia and other countries. These ransomware attackers often demand payment in cryptocurrency as it is less traceable than traditional currency.

Other areas of enforcement will include healthcare fraud, opioid distribution, corporate compliance, and human trafficking. DOJ will bring together prosecutors from around the country, as well as agents from various federal law enforcement agencies and other partner agencies like the Commodities Trading Commission, SEC and FINCEN.

An adjunct to DOJ’s increased money laundering enforcement efforts is the Financial Crimes Enforcement Network (FINCEN) recent rule-making notice that it intends to draft “nationwide record keeping and reporting requirements” for certain participants in the non-financed real estate transactions that are made without mortgages or other lender provided credit. The purpose is to uncover money laundering activities in the approximately $460 billion annual cash real estate purchases in the United States. Presently, only banks and mortgage lenders have programs in place to report suspicious activities. FINCEN is considering how feasible it would be to add reporting requirements for title insurers, escrow companies, real estate attorneys and closing agents.

We have represented many doctors, pharmacists and marketing companies charged with healthcare fraud, and money laundering in federal court, as well as cryptocurrency and unregistered money transfer businesses. Stahl Gasiorowski Criminal Defense is here for all your criminal legal needs. We are experienced in all types of complex criminal matters involving many types of electronic evidence. To contact the firm’s NJ office, call 908.301.9001 and to contact the firm’s NYC office, call 212.755.3300, or email Mr. Stahl at rgs@sgdefenselaw.com.

As digital currencies have become more popular and commonplace, the government has stepped up its efforts to make sure that transactions and offerings do not run afoul of established regulations.

On October 11, 2019, the SEC, CRTC and FinCEN issued a joint statement urging those dealing in digital currencies to comply with obligations under the Anti-Money Laundering (AML) and Currency Financial Transactions (CFT) regulations under the Bank Secrecy Act (BSA) – regardless of what the digital assets are called.

This joint statement was meant as a warning. All cryptocurrency trading exchanges must adhere to AML, CFT and know-your-customer (KYC) practices that apply to most other financial transactions. These include:

• Accurate and complete recording of transactions;
• Knowing who the customers are;
• Independent testing of BSA and AML compliance;
• Stringent personnel training; and
• Prompt reporting of suspicious activity to law enforcement.

These regulations apply to large trading platforms and Initial Coin Offerings (ICO), as well as individuals who trade for their own digital wallets as well as for the general public. These part-time traders are especially vulnerable because they usually do not recognize that they must comply with these regulations.

One must also be aware of federal laws governing “registered money transferor” status – when an individual or company regularly trades in digital currency. In addition to the aforementioned federal regulations, there are a host of state regulations and laws regarding registration and licensing, reporting, and bonding requirements. Digital currency transactions have been scrutinized by the IRS and state taxing authorities since at least 2014, as they are considered taxable events just like any other property transaction. When a person trades in digital currency and realizes a profit, that profit is subject to tax like any other gain.

The IRS sent over 10,000 letters to known digital currency holders over the summer, warning them that in certain cases taxpayers could be subject to criminal prosecution if they do not properly report their virtual currency transactions.

In sum, the IRS is moving to enforce various tax provisions for digital currencies, both administratively and criminally. Those that transact in digital currencies must be aware of and comply with a myriad of federal and state regulations or risk civil and potentially criminal penalties.

Stahl Gasiorowski Criminal Defense Lawyers aggressively defend individuals charged with complex federal and state crimes. Founder Robert G. Stahl is recognized as one of the top criminal defense attorneys in the NY/NJ area for his skills, knowledge and success. To contact the firm, call 908.301.9001 for the NJ office and 212.755.3300 for the NYC office, or email Mr. Stahl at rgs@sgdefenselaw.com.

At airports throughout the United States, Customs and Border Patrol (CBP) officers are seizing travelers’ cash when coming into and leaving the country for failure to report the cash. Regular international travelers may be familiar with the Customs forms airlines hand out just prior to arrival in the United States. On the form you must declare goods purchased during your international travel, as well as any cash in excess of $10,000. Most people do not realize, however, that you must also declare any cash in excess of $10,000 before you leave the United States, as well.

If travelers are carrying cash in excess of $10,000 and fail to disclose the exact amount, they risk violation of a little-known anti-money laundering law, the Bank Secrecy Act. Their money, if found, is therefore subject to seizure and forfeiture, unless the traveler contests the forfeiture. At times, even when the cash is declared, it is seized anyway as suspected drug funds.

The U.S. government, to put it bluntly, assumes that anyone traveling with a large amount of cash is a criminal. This completely ignores the reality of currency and banking restrictions in other countries, sometimes costly wire transfer fees, personal or business use, and a host of other legitimate reasons people travel with cash.

We have handled a number of cases where business people from Nigeria and various Middle Eastern countries have traveled to the U.S. to buy merchandise or automobiles for sale in their home country. Our clients declared the cash, were stopped by CBP, and then questioned about the source and purpose of the funds. They were eventually allowed to continue with their money, only to be stopped as they exited passport control by DEA agents, who then seized their cash as suspected drug proceeds.

When this happens, the traveler has a crucial decision to make. They must decide whether to formally contest the seizure administratively or through the court system. Both methods are time consuming and can be expensive, as the individual must prove the legitimate source and use of the funds. This often involves acquiring bank records, currency exchange documents, and proper declarations from their country of origin – a sometimes costly – and complicated proposition.

On a typical day, CBP seizes over $300,000 in undeclared or illicit currency. Last year, the total seizures amounted to more than $65 million in cash from international travelers. At times, it seems that the government simply takes advantage of a foreign traveler’s limited time, ignorance of U.S. law, and limited resources to contest the seizure and simply keeps the funds without any substantive evidence of criminal activity.

Stahl Gasiorowski Criminal Defense Lawyers aggressively defend individuals charged with complex federal and state crimes. Founder Robert G. Stahl is recognized as one of the top criminal defense attorneys in the NY/NJ area for his skills, knowledge and success. To contact the firm, call 908.301.9001 for the NJ office and 212.755.3300 for the NYC office, or email Mr. Stahl at rgs@sgdefenselaw.com.

In their simplest form, Bitcoin and other virtual currencies are digital representations of value that can be traded through an exchange and stored in digital wallets secured by 26-35 character long case sensitive account numbers that require a private key, similar to a password or pin to access. Virtual currency is not legal tender issued or guaranteed by any government. Rather, its value is determined by consensus within a community of users. Since these transactions are done on the internet and through exchanges using cash, wire transfers, or credit cards to a host of web-based businesses, the purchasers’ identities and source of funds are more difficult to uncover.

Starting in 2013, the Department of Justice (DOJ) announced its policy position to prosecute individuals for failing to register their Bitcoin-related businesses. The DOJ, and to date courts have agreed, that Bitcoin and other virtual currencies fall within the parameters of 18 U.S.C. § 1960, and money laundering statutes 18 U.S.C. § 1956 and 1957. § 1960 states in relevant part, “whoever knowingly conducts, controls, manages, supervises, direct, or owns all or part of an unlicensed money transaction business, shall be fined in accordance with this title or imprisoned not more than 5 years, or both.” Thus, using this language, Bitcoin business operators are now being prosecuted by the DOJ as unlicensed money transmitting businesses.

To establish criminal liability, the government must prove that a person or business (a) transferred on behalf of the public (b) funds (c) in violation of State or Federal licensing and registration requirements, or with knowledge that the funds were derived from a criminal offense. The standard merely requires the government to show that the person or entity failed to properly register with their state, usually the Division of Banking and Insurance, and/or with FinCEN (Financial Crimes Enforcement Network). 31 U.S.C. § 5330. The reason for the registration and reporting requirements are simple – without these, the government has no way to regulate and uncover alleged illegal transactions through the use of virtual currencies.

Increasingly, the government is bringing charges against relatively small family-run businesses that trade Bitcoin for their own investment, as well as for the public. In these scenarios, the person sets up a website offering the purchase of Bitcoin for a modest 4-5% commission. The individual may register their company as an LLC or corporation with their home state and properly declare the income on their tax returns. However, if they fail to register with their state banking commission and with FinCEN, they are subject to civil and criminal penalties. They may also be subject to liability for failing to comply with monetary reporting regulations, such as filing Currency Transaction Reports (CTRs) and IRS Form 8300 for currency transactions of $10,000 or more.

Lastly, operators of these businesses face exposure under the other prong of §1960, knowledge that the funds were derived from a criminal offense. To that end, knowing one’s customer, similar to bank requirements, comes into play. Knowing that a customer – or an undercover agent posing as a legitimate customer – has acquired funds through illicit means will subject an individual to criminal liability. The government, for example, has been using undercover investigations to ferret out Bitcoin businesses. An undercover may tell the person that the monies used to purchase the Bitcoin come from the sales of illegal items, such as internet sales of prescription drugs, stolen goods, or the like. Or the agent may simply have several transactions that when totaled exceed $10,000 and the proper reporting forms are not submitted. Each of these transgressions run afoul of the law.

While virtual currency is becoming more widely known and accepted – and certainly has legitimate uses – it is still developing and increasingly regulated. There are a number of ways for a person involved with a Bitcoin business to come under government scrutiny; the registration and intricate regulatory schemes involved in transfers of money and Bitcoin require sophisticated legal advice and caution.

Stahl Gasiorowski Criminal Defense Lawyers aggressively defend individuals charged with complex federal and state crimes. Founder Robert G. Stahl is recognized as one of the top criminal defense attorneys in the NY/NJ area for his skills, knowledge and success. To contact the firm, call 908.301.9001 for the NJ office and 212.755.3300 for the NYC office, or email Mr. Stahl at rgs@sgdefenselaw.com.

A general term used to describe some illegal behaviors that use electronic means is wire fraud.

In the Internet age, some people may think of wire fraud as an activity that uses computers to commit crimes. There are, however, other ways of engaging in wire fraud that are still relevant such as telephone, television, and even fax machine.

Wire fraud is based on much of the same behaviors found in fraud cases, which generally consist of intentionally untruthful representations with regard to material facts, the purpose of which is to gain something of value from a person through deception.

What distinguishes wire fraud from “ordinary” fraud is that the person who engages in wire fraud intentionally creates or participates in a fraudulent scheme that uses interstate wire communications.

Examples of wire fraud activity include:

• Telemarketing scams, which include attempts to trick people into allowing remote site access to their computers or to disclose their credit card or bank account information;
• “Phishing” schemes, which present a computer user with an email or Website that looks legitimate but instead seeks to elicit credit card or bank account information for a fraudulent purpose; and
• False narratives, perhaps best known through variations of the “Nigerian prince” scheme that attempts to fool people into allowing someone to gain access to their bank accounts based on false claims that they will receive large deposits of money into them.

Because of its often interstate nature, wire fraud frequently triggers investigation and prosecution by federal law enforcement, although New Jersey state officials may also be involved. The penalties of a conviction on fraud charges can be very serious and involve jail time and significant fines, so defending against allegations can be crucial.

This post only covers wire fraud, and does so for general information. Anyone who has been accused of wire fraud may wish to communicate with a legal professional to discuss possible strategies to fight these criminal charges/.

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Over the past several years, there has been increasing concern over the threat of international money laundering operations that allow criminals to move billions of dollars illegally overseas and out of the reach of their victims. Gilbert Chikli is one of the most notorious financial con men to date, godfather of the ‘Fake CEO’ scam that allowed him to steal more than 8 million Euros from many of the largest corporations in the world. Despite being convicted of fraud among other things, and sentenced to seven years in a French prison, Chikli is still living freely in Israel today.

The Money Laundering Scam

Gilbert Chikli started off by employing a bold scam over the phone, never expecting his scam to actually work on a grand scale. One day he picked up the phone and placed a seemingly urgent phone call to a local bank acting as the CEO. He insisted that in the wake of recent terrorist attacks in the region, he was investigating whether or not some of the accounts at the bank could be linked to terrorist organizations. He asked the bank’s manager to bring him nearly 400,000 Euros cash at a local cafe where he would take it along with information regarding the largest accounts with the bank to determine if the money was clean or not, at which point he would return the cash to the bank. Needless to say, after receiving the cash, Chikli took off and was nowhere to be found.

While it may seem absurd that anyone would pack a duffel bag with 400,000 Euros and meet a stranger in a restroom to hand it over, the reality is that Chikli fed off of a sense of fear that was linked to the idea of local terrorists. He was able to convince his victims that they were playing a vital role in stopping the next major attack. Chikli placed dozens of phone calls over the next several years, managing to defraud 33 companies including HSBC, Disneyland Paris, and the French Post Office among others.

Moving the Money

Unfortunately for Chikli, most of the industrialized western world has put safeguards and sanctions in place to detect and prosecute money laundering operations. As a result, even after he had money transferred to his accounts, it was nearly impossible for him to spend it without tipping off government agencies. He needed a way to move money into and out of the country and convert it into “washed” funds. China provided just the right place. Currently, China has few laws regarding money laundering, and the laws they do have are not uniformly applied or enforced. There are numerous underground networks used to transfer money into and out of the country all with seemingly legal paper trails. One of these networks allowed Chikli to purchase assets in China and then export them to other countries with inflated receipts. For instance, he could purchase 10 tons of steel in China and export it to Europe along with a receipt that stated 100 tons of steel were purchased. For a small bribe, many Chinese businesses were willing to fabricate documents to corroborate his story. Once the money was associated with actual goods, it could be cleanly moved around the world and cashed out.

The Investigation

After receiving numerous calls reporting large scale theft with the “Fake CEO” scam, first France’s law enforcement agencies and then international agencies were investigated the case. They were able to trace tens of thousands of money laundering transfers into and out of Chikli’s accounts. He was arrested and spent three years in a French prison while waiting for an indictment. He was released in 2009 because prosecutors failed to gather enough evidence of his money laundering scheme to convict him. He promptly took his money and moved to Israel, where he remains. Finally, after two more years, France was able to convict Chikli in absentia to 7 years in prison, and fine him 1.1 million Euros for his crimes. However, Israel does not have an extradition treaty or agreement with France, and now Chikli lives freely on the coast in a large gated home, conducting interviews with news agencies candidly discussing his crime spree.

As a result of crimes like Chikli’s, several governments have come together to create the Financial Action Task Force, an inter-governmental body that promotes best practices in money laundering detection and provides resources to countries struggling with enforcement of anti-money laundering laws. China has joined the task force, requiring it to report any signs of suspected money laundering and to comply with international banking standards. China has been the world’s number one resource for money laundering operations. China is actively engaged in expanding their presence in global markets and will need to reform their reputation for illicit money transfers before western financial institutions will trust them.

Money Laundering Charges

Keep in mind, not everyone charged with money laundering is guilty. Money laundering charges tend to be vague and may lead to other related charges. And money laundering convictions can result in severe penalties. If you face allegations or charges of money laundering, contact the legal team at Robert G. Stahl, Esq. Criminal Defense Lawyers. The firm includes a former Assistant United States Attorney and prosecutor. who has extensive background in criminal investigations and trials. To contact us to discuss your case, call 908.301.9001 for our NJ office and212.755.3300 for our NYC office, email us at rstahl@stahlesq.com, or contact us online.

This blog is not legal advice. If you face allegations of money laundering, contact the legal team at Robert G. Stahl, Esq. Criminal Defense Lawyers. The firm includes former Federal and State prosecutors and seasoned criminal defense attorneys with years of experience handling criminal investigations and trials.

To better understand what money laundering is, it is useful to know that federal law and New Jersey state law both make it illegal and both have their own definitions for what the term means. According to the U.S. Treasury Department, money laundering generally refers to efforts on the part of those engaged in criminal activity to mislead about how they got their money or from where they got it. Being a federal agency, the Treasury Department is concerned not only with homegrown money laundering activities in the United States but also with money laundering connected with activities outside of the nation’s borders.

Thus, the point organization within the Treasury Department to combat money laundering is the Office of Terrorism and Financial Intelligence. A significant part of this office’s activity concerns identifying and combating money laundering activities within the U.S. and international financial systems.

New Jersey, on the other hand, defines money laundering as the act of possessing or transporting property derived from criminal activity, or engaging in transactions involving such property in order to conceal its source, ownership, nature or control, or to avoid legal reporting requirements. The state law also makes it a crime to oversee or indirectly supervise such activity by others. What this means is that under New Jersey law any effort to obtain or otherwise manipulate stolen property – including money – can fall under the definition of money laundering.

Although money laundering is a crime requiring intent to commit it, the range of activities which can be considered to be money laundering in the state could even ensnare people who do not believe that they are engaged in such activity. This post cannot cover all of the aspects of federal or New Jersey money laundering statutes, and is not intended to be legal advice. Anyone who is accused of money laundering in this state should seek the assistance of legal counsel experienced with defending against such criminal charges.

Video Clip: Spiritual Leader of U.S. Syrian Jews Sentenced
to Two Years’ House Arrest; Originally Charged with
Money Laundering in New Jersey’s Biggest Corruption Case,
He Pleads to Unlicensed Money Transmitting

TRENTON, NJ – The spiritual leader of Syrian Jews in the United States, Brooklyn, New York was sentenced to two years’ house arrest in June 2011. They were one of 46 defendants, including three rabbis, charged as a result of a federal sting in New Jersey’s biggest corruption case.

Originally charged with money laundering, the defendant pled guilty to a reduced charge of operating an unlicensed money transmitting business.

Read the Sentencing Article from WCBS TV in New York City

NJ Star-Ledger on the Big Sting and the Big Lawyers:
Money-Laundering Defendants and their Attorneys

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