Relates to clarifying the definitions of "illegal money transmission" and "money laundering"; relates to penalties for unlicensed money transmitters; relates to timeliness of prosecutions.
Ayes (63): Adams, Addabbo, Avella, Ball, Bonacic, Boyle, Breslin, Carlucci, DeFrancisco, Diaz, Dilan, Espaillat, Farley, Felder, Flanagan, Fuschillo, Gallivan, Gianaris, Gipson, Golden, Griffo, Grisanti, Hannon, Hassell-Thomps, Hoylman, Kennedy, Klein, Krueger, Lanza, Larkin, Latimer, LaValle, Libous, Little, Marcellino, Marchione, Martins, Maziarz, Montgomery, Nozzolio, O'Brien, O'Mara, Parker, Peralta, Perkins, Ranzenhofer, Ritchie, Rivera, Robach, Sampson, Sanders, Savino, Serrano, Seward, Skelos, Smith, Squadron, Stavisky, Stewart-Cousin, Tkaczyk, Valesky, Young, Zeldin
TITLE OF BILL: An act to amend the banking law, in relation to clarifying the definition of illegal money transmission and increasing the penalties for certain activities by licensed and unlicensed money transmitters; to amend the penal law, in relation to the definition of money laundering; and to amend the criminal procedure law, in relation to timeliness of prosecutions
PURPOSE OF THE BILL: To provide for the effective prosecution of criminal actions by persons or entities whose intended purpose may be the laundering of money through legal money transmission instruments.
SUMMARY OF PROVISIONS: Section 1. Amends subdivision 1 of section 650 of the Banking Law. Deletes the existing provisions and adding new paragraphs (a) and (b) in place thereof. Paragraph (a) provides that any person, who knowingly falsifies or makes a misrepresentation in any type of document that is required to be filed or maintained under article 13-B, or who refuses to permit any lawful investigation by the superintendent, is guilty of a class E felony. Paragraph (b) provides that any licensee or agent that receives moneys for the purpose of transmitting such funds or sells or issues money transmission instruments or travelers checks, knowing that such moneys were derived from, or such instruments or checks were purchased with, proceeds realized from criminal activity, shall be guilty of a class E felony.
Section 2. Amends section 650(2) (a) and (b) (1), (2) and (4) of the Banking Law. (1) Increases and clarifies the application of penalties for certain violations by persons who are not licensed or acting in the capacity of an agent for a licensee, and (2) changes a reference from "individual" to "person" in order to broaden the scope of the prohibition on illegal money transmission activities, thus conforming the reference to other references in the Banking Law.
Section 3. Amends subdivision 5 of section 470.00 of the Penal Law. Includes within the definition of "specified criminal conduct" certain specified violations of the Banking Law that constitute the falsification of records or statements, or the misapplication of moneys or credit by bank personnel, thus making such violations also violations constituting the crime of money laundering.
Section 4. Amends section 30.10(3) of the Criminal Procedure Law (CPL). Adds a new paragraph (h) that conforms New York's statute of limitations time period for certain financial related crimes to the federal time period often years. Such crimes are those defined under Articles 12-D, 13-B and 13-D of the Banking Law or under Articles
155, 170, 175, 176, 180, 185, 187, 190, 200, 210 and 470 of the Penal Law, insofar as they relate to persons and entities under the supervision of the Banking Department. The amendment pertains to crimes committed by persons or entities that are licensed, chartered or registered by the Department, or by their employees, officers, managers, directors, or those persons or entities having a controlling interest in those parties regulated by the Department.
Section 5. Effective Date provides for an immediate effective date except with respect to crimes committed that would be subject to the provisions of section 30.10(3) of CPL as amended.
EXISTING LAW: Persons who violate any provisions of article 13-B of the Banking Law or who knowingly make an incorrect statement upon a required document or omit any required information or refuse to permit a lawful investigation by the Superintendent may be charged with a misdemeanor. Persons who engage in the business of money transmission without a license under certain specified circumstances may be charged with a class A misdemeanor and those persons who knowingly sell money transmission instruments purchased with proceeds realized from criminal activity with a class E felony. Presently, neither the Banking Law nor the General Construction Law defines the term "individual." Otherwise, the Banking Law consistently employs the term "person" to refer to a natural person or other entity. In addition, the provisions of sections 650(2) (b) (1) and (2) are intended to thwart and punish money laundering by a natural person or other entity. In addition, the penalties under section 650(a) and (b) pertain to unlicensed persons and so called undesignated agents engaged in illegal money transmission activities. Presently, certain violations of the Banking Law are not referenced in the Penal Law as activities constituting the crime of money laundering. Section 30.10 of the Criminal Procedure Law provides for a five year Statute of Limitations for virtually all felonies, including crimes related to financial institutions or transactions. Identical crimes defined in federal law have a ten-year term.
PRIOR LEGISLATIVE HISTORY: 2012: S.271 - Passed Senate/A.8531 - Referred to Banks 2011: S.271 - Passed Senate/A.8531 - Referred to Banks 2010: S.2176B - Amend and Recommit to Codes/A.258A - Enacting Clause Stricken 2009: S.2176A - Amend and Recommit to Codes/A.258 - Amend and Recommit to Banks 2007-08: A.1679 - Referred to Banks/A.258A
JUSTIFICATION: The revision of the definitions of certain violations involving illegal money transmission activities and also referencing certain Banking Law violations as the crime of money laundering, are intended to permit the effective prosecution of any form of illegal money transmission within a licensed or chartered entity that is permitted to engage in legitimate money transmission activities. These revisions also differentiate those violations and applicable penalties to persons licensed or engaging in such activities in a regulated context from violations and the applicable penalties by
persons not licensed or engaging in such activity within a regulated context. Further, the referencing of such illegal activities as the crime of money laundering under the Penal Law permits the prosecution of such activities in keeping with the activities' intended purpose, thus potentially resulting in the application of more severe penalties.
The Statute of Limitations relating to financial crimes should be extended from five to ten years for several reasons. First, financial crimes are often extremely complex and can take years to investigate before a criminal proceeding is commenced. Moreover, many crimes are not discovered until several years after they have occurred sometimes after the state limitations statute has run or is about to run in spite of New York banking regulations that require every organization that is organized, licensed or registered under the Banking Law "immediately" to report a variety of misconduct events, criminal or not.
Finally, the federal Statute of Limitations for financial Crimes is ten years. The Banking Department and State criminal enforcement agencies have previously had to rely on Federal authorities to investigate and prosecute cases involving banking institutions with respect to which the Banking Department was the primary regulator and State enforcement agencies would otherwise have commenced a prosecution. Federal authorities have also declined to prosecute cases that the State would have prosecuted were it not for the Statute of Limitations issues. Parity in the Statute of Limitations would give the Banking Department and State enforcement agencies increased flexibility in investigating and prosecuting cases and would also reinforce the Banking Department's stature as a primary regulator of New York financial services institutions.
The application of the ten-year limitation, however, applies only to such crimes committed by persons or entities licensed, chartered or registered by the Banking Department, or persons, who in their capacity as directors, officers, managers, or employees of, or persons or entities that have a controlling interest in, such licensed, chartered, or registered parties. The definition of controlling interest, as it applies to persons or entities licensed, chartered, or registered by the Department, is the definition applicable to banking organizations as stated in section 143-b of the Banking Law.
FINANCIAL IMPLICATIONS: None.
EFFECTIVE DATE: Immediately, with provisions.
STATE OF NEW YORK ________________________________________________________________________ 259 2013-2014 Regular Sessions IN SENATE (PREFILED) January 9, 2013 ___________Introduced by Sen. DIAZ -- read twice and ordered printed, and when printed to be committed to the Committee on Banks AN ACT to amend the banking law, in relation to clarifying the defi- nition of illegal money transmission and increasing the penalties for certain activities by licensed and unlicensed money transmitters; to amend the penal law, in relation to the definition of money launder- ing; and to amend the criminal procedure law, in relation to timeli- ness of prosecutions THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Subdivision 1 of section 650 of the banking law, as amended by chapter 201 of the laws of 1969, is amended to read as follows: 1.
[Any person who violates or participates in the violation of any provisions of this article, or who knowingly makes any incorrect state- ment of a material fact in any application, report or statement made pursuant to this article, or who knowingly omits to state any material fact necessary to give the superintendent any information lawfully required by him or refuses to permit any lawful investigation by the superintendent shall be guilty of a misdemeanor and, upon conviction, shall be fined not more than five hundred dollars or imprisoned for not more than six months or both, in the discretion of the court]A. ANY PERSON WHO KNOWINGLY MAKES ANY FALSE STATEMENT, MISREPRESENTATION OR FALSE CERTIFICATION IN ANY APPLICATION, FINANCIAL STATEMENT, ACCOUNT RECORD, CUSTOMER RECEIPT, REPORT OR OTHER DOCUMENT FILED OR REQUIRED TO BE MAINTAINED OR FILED UNDER THIS ARTICLE, OR WHO KNOWINGLY MAKES ANY FALSE ENTRY OR OMITS A MATERIAL ENTRY IN ANY SUCH DOCUMENT OR REFUSES TO PERMIT ANY LAWFUL INVESTIGATION BY THE SUPERINTENDENT, SHALL BE GUILTY OF A CLASS E FELONY. B. ANY LICENSEE OR AGENT WHO:EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD00628-01-3 S. 259 2
(1) RECEIVES MONEY FOR TRANSMITTING OR TRANSMITS THE SAME, KNOWING SUCH MONEY TO BE THE PROCEEDS OF OR DERIVED FROM ANY CRIMINAL CONDUCT; OR (2) SELLS OR ISSUES NEW YORK INSTRUMENTS OR NEW YORK TRAVELER'S CHECKS AS THOSE TERMS ARE DEFINED BY SECTION SIX HUNDRED FIFTY-THREE OF THIS CHAPTER, KNOWING SUCH INSTRUMENTS OR CHECKS TO BE PURCHASED WITH THE PROCEEDS OF OR DERIVED FROM ANY CRIMINAL CONDUCT, SHALL BE GUILTY OF A CLASS E FELONY. S 2. Paragraph a and subparagraphs 1, 2 and 4 of paragraph b of subdi- vision 2 of section 650 of the banking law, as amended by chapter 543 of the laws of 1990, are amended to read as follows: a. Any person who either (1) engages in the business of receiving money for transmission or transmitting the same or (2) sells or issues New York instruments or New York traveler's checks as those terms are defined by section six hundred fifty-three of this chapter, without a license therefor obtained from the superintendent OR WITHOUT HAVING BEEN DESIGNATED OR APPOINTED AS AN AGENT OF A LICENSEE as provided in this article, shall be guilty of a
[Class A misdemeanor]CLASS D FELONY. (1) knowingly receives or agrees to receive for transmission from one or more [individuals]PERSONS a total of ten thousand dollars or more in a single transaction, a total of twenty-five thousand dollars or more during a period of thirty days or less, or a total of two hundred fifty thousand dollars or more during a period of one year or less; or (2) knowingly sells or issues New York instruments or New York travel- er's checks to one or more [individuals]PERSONS totaling ten thousand dollars or more in a single transaction, a total of twenty-five thousand dollars or more during a period of thirty days or less, or a total of two hundred fifty thousand dollars or more during a period of one year or less; or (4) knowingly sells or issues New York instruments or New York travel- er's checks as those terms are defined by section six hundred fifty- three of this chapter, knowing such instruments or checks to be purchased with the proceeds of or derived from any criminal conduct; shall be guilty of a class [E]C felony. S 3. Subdivision 5 of section 470.00 of the penal law, as amended by chapter 489 of the laws of 2000, is amended to read as follows: 5. "Specified criminal conduct" means criminal conduct committed in this state constituting a criminal act, as the term criminal act is defined in section 460.10 of this [chapter]TITLE, or constituting the crime of enterprise corruption, as defined in section 460.20 of this [chapter]TITLE, OR CONSTITUTING VIOLATIONS OF SECTIONS SIX HUNDRED SEVENTY-TWO AND SIX HUNDRED SEVENTY-THREE OF THE BANKING LAW, or conduct committed in any other jurisdiction which is or would be specified crim- inal conduct if committed in this state. S 4. Subdivision 3 of section 30.10 of the criminal procedure law is amended by adding a new paragraph (h) to read as follows: (H) A PROSECUTION FOR ANY CRIME DEFINED UNDER ARTICLE TWELVE-D, THIR- TEEN-B OR THIRTEEN-D OF THE BANKING LAW, OR UNDER ARTICLE ONE HUNDRED FIFTY-FIVE, ONE HUNDRED SEVENTY, ONE HUNDRED SEVENTY-FIVE, ONE HUNDRED SEVENTY-SIX, ONE HUNDRED EIGHTY, ONE HUNDRED EIGHTY-FIVE, ONE HUNDRED EIGHTY-SEVEN, ONE HUNDRED NINETY, TWO HUNDRED, TWO HUNDRED TEN, OR FOUR HUNDRED SEVENTY OF THE PENAL LAW INSOFAR AS IT RELATES TO PERSONS AND ENTITIES THAT ARE LICENSED, REGISTERED, OR INCORPORATED OR OTHERWISE FORMED PURSUANT TO THE BANKING LAW, OR PERSONS IN THEIR CAPACITY AS DIRECTORS, OFFICERS, MANAGERS, OR EMPLOYEES OR PERSONS OR ENTITIES THAT CONTROL, AS SUCH TERM IS DEFINED IN SECTION ONE HUNDRED FORTY-THREE-B OFS. 259 3
THE BANKING LAW WITH RESPECT TO BANKING INSTITUTIONS, ANY SUCH PERSONS OR ENTITIES THAT ARE LICENSED, REGISTERED, OR INCORPORATED OR OTHERWISE FORMED PURSUANT TO THE BANKING LAW, MAY BE COMMENCED WITHIN TEN YEARS AFTER THE COMMISSION THEREOF. S 5. This act shall take effect immediately; provided, however, that the provisions of section four of this act shall only apply to crimes committed after such effective date.