senate Bill S271

Relates to clarifying definitions of "illegal money transmission" and "money laundering"; and relates to penalties for unlicensed money transmitters

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 05 / Jan / 2011
    • REFERRED TO BANKS
  • 22 / Feb / 2011
    • NOTICE OF COMMITTEE CONSIDERATION - REQUESTED
  • 30 / Mar / 2011
    • REPORTED AND COMMITTED TO CODES
  • 20 / Jun / 2011
    • COMMITTEE DISCHARGED AND COMMITTED TO RULES
  • 20 / Jun / 2011
    • ORDERED TO THIRD READING CAL.1416
  • 20 / Jun / 2011
    • PASSED SENATE
  • 20 / Jun / 2011
    • DELIVERED TO ASSEMBLY
  • 20 / Jun / 2011
    • REFERRED TO BANKS
  • 04 / Jan / 2012
    • DIED IN ASSEMBLY
  • 04 / Jan / 2012
    • RETURNED TO SENATE
  • 04 / Jan / 2012
    • REFERRED TO BANKS
  • 21 / Feb / 2012
    • NOTICE OF COMMITTEE CONSIDERATION - REQUESTED
  • 01 / Mar / 2012
    • NOTICE OF COMMITTEE CONSIDERATION - WITHDRAWN
  • 07 / Mar / 2012
    • REPORTED AND COMMITTED TO CODES
  • 20 / Mar / 2012
    • 1ST REPORT CAL.412
  • 21 / Mar / 2012
    • 2ND REPORT CAL.
  • 22 / Mar / 2012
    • ADVANCED TO THIRD READING
  • 26 / Mar / 2012
    • PASSED SENATE
  • 26 / Mar / 2012
    • DELIVERED TO ASSEMBLY
  • 26 / Mar / 2012
    • REFERRED TO BANKS

Summary

Relates to clarifying the definitions of "illegal money transmission" and "money laundering"; relates to penalties for unlicensed money transmitters; relates to timeliness of prosecutions.

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Bill Details

See Assembly Version of this Bill:
A8531
Versions:
S271
Legislative Cycle:
2011-2012
Current Committee:
Assembly Banks
Law Section:
Banking Law
Laws Affected:
Amd §650, Bank L; amd §470.00, Pen L; amd §30.10, CP L
Versions Introduced in 2009-2010 Legislative Cycle:
S2176B, S2176B

Sponsor Memo

BILL NUMBER:S271 REVISED 12/30/11

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:
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 with in 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.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                   271

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 5, 2011
                               ___________

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.
                                                           LBD02212-01-1

S. 271                              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 OF

S. 271                              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.

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