Unlicensed Money Transmitting Business

18 U.S.C. § 1960 proscribes the operation of an unlicensed money transmitting business, and provides that a five year prison sentence can attach to any such violation. Although simple on the surface, the federal government has employed this statute in a wide variety of settings leading to serious consequences for defendants facing allegations that they operated unlicensed money transmitting businesses.

18 U.S.C. § 1960 can be violated in three distinct ways. First, one can operate an unlicensed money transmitting business and thus violate the statute by operating a money transmitting business “without an appropriate money transmitting license in a state where such operation is punishable as a misdemeanor or a felony under state law…” Second, one can operate an unlicensed money transmitting business and thus violate the statute by failing to register the business with FinCEN as required by 31 U.S.C. § 5330. Finally, one can operate an unlicensed money transmitting business and thus violate the statute by processing “funds that are known to the defendant to have been derived from a criminal offense or are intended to be used to promote or support unlawful activity.” So, in the third scenario, a defendant can be convicted of operating an unlicensed money transmitting business even if it was adequately licensed.

It is also critical to note that, in most cases, § 1960 is not a specific intent statute. As part of the Patriot Act, Congress amended § 1960(b)(1)(A) to provide that a defendant can be convicted of operating an unlicensed money transmitting business “whether or not the defendant knew that the operation was required to be licensed or that the operation was so punishable.” This makes the unlicensed money transmitting business statute an attractive one for prosecutors, as Congress has freed them of the obligation to prove beyond a reasonable doubt what was on the defendant’s mind at the time the act at issue in the case was committed.

The white collar criminal defense attorneys at Fuerst Ittleman David & Joseph bring a unique perspective to their defense of cases involving allegations that clients operated unlicensed money transmitting businesses.

First, the firm is a correspondent member of the National Money Transmitters Association and a frequent sponsor of the International Money Transfer Conferences. Second, the firm’s lawyers are frequently called upon to lecture to domestic and international money transfer organizations regarding the laws governing money transmitters, and is widely viewed as a thought leader on the subject. Third, the firm’s lawyers are frequently retained by domestic and international financial institutions to give legal advice regarding whether they are money transmitting businesses and, if so, what registration and licensing requirements apply to their business. The firm also has extensive experience advising financial institutions regarding their anti-money laundering obligations, and has extensive experience litigating those issues in both civil and criminal cases. As such, even in cases where the government need not prove that a defendant intentionally violated the § 1960 statute, the firm is uniquely equipped to litigate the complex issue of whether the defendant operated a money transmitting business, licensed or otherwise.

If you have been charged with or are under investigation for operating an unlicensed money transmitting business, contact us now for a free consultation by emailing us at contact@fuerstlaw.com or by calling us at 305.350.5690.