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Purpose--The purpose of this paper is to explain the changes to the US federal money laundering and criminal fraud statutes contained in the Fraud Enforcement and Recovery Act of 2009 ("FERA")
Design/methodology/approach--The paper explains how FERA extends the definition of "proceeds" under the statute to include gross receipts of illegal activity, how the definition of a financial institution is revised to include a mortgage lending business, and how the federal securities fraud statute is expanded to apply to frauds involving commodity futures and options.
Findings--Any prior ambiguity as to the meaning of "proceeds" has now been unequivocally resolved; alleged money launderers will no longer be able to defend themselves by arguing that they committed unprofitable criminal activities. The classification as a "financial institution" matters because a number of federal criminal statutes either only apply to financial institutions or set out different penalties or statutes when a financial institution is affected by a generally applicable crime. Under FERA, henceforth frauds involving options and futures in commodities will violate the securities fraud statute.
Originality/value--The paper presents practical guidance by an experienced white-collar criminal defense lawyer.
Keywords Fraud, Money laundering, United States of America
Paper type Technical paper
On May 20, 2009, the President of the United States signed into law the Fraud Enforcement and Recovery Act of 2009 ("FERA"). In a prior Fried Frank client alert, we have discussed FERA's substantial amendments to the civil False Claims Act ("FCA"). See www.friedfrank.com, Events & Publications, Alerts and Newsletters, FraudMail Alert No. 09-05-21. Here, we address some of FERA's changes to federal money laundering and criminal fraud statutes.
Briefly, FERA amends the …