Senate Bill S2176

                                 BILL NUMBER:  S2176A

 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 :
Bill section 1 amends subdivision 1 of section 650 of the Banking Law
by deleting the existing provisions and adding new paragraphs (a) and
(b) in place thereof. Paragraph (a) provides that any person, whether
a licensee or a non-licensed 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, is guilty of 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.

Bill section 2 amends section 650(2) (a) and (b) (1), (2) and (4) of
the Banking Law to (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) to change 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.

Bill section 3 amends subdivision 5 of section 470.05 of the Penal Law
to include 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.

Bill section 4 amends section 30.10(3) of the Criminal Procedure Law
(CPL) by adding a new paragraph (g) that conforms New York's statute
of limitations time period for certain financial-related crimes to the
federal time period of ten years. Such crimes are those defined under
Articles 12-D, 13-B and 13D of the Banking Law or under Articles 155,
170, 175, 176, 180, 185, 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.

Bill section 5 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 :
2007-2008 - A1679 01/09/08 - Referred to Banks

 STATEMENT IN SUPPORT :
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.

 BUDGET IMPLICATIONS :
None.

 EFFECTIVE DATE :
Immediately.

                                 BILL NUMBER:  S2176B

 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 :
Bill section 1 amends subdivision 1 of section 650 of the Banking Law
by deleting 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.

Bill section 2 amends section 650(2) (a) and (b) (1), (2) and (4) of
the Banking Law to (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) to change 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.

Bill section 3 amends subdivision 5 of section 470.05 of the Penal Law
to include 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.

Bill section 4 amends section 30.10(3) of the Criminal Procedure Law
(CPL) by adding a new paragraph (g) that conforms New York's statute
of limitations time period for certain financial-related crimes to the
federal time period of ten years. Such crimes are those defined under
Articles 12-D, 13-B and 13D of the Banking Law or under Articles 155,
170, 175, 176, 180, 185, 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.

Bill section 5 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 :
2007-2008 - A.1679 01/09/08 - Referred to Banks

 STATEMENT IN SUPPORT :
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.

 BUDGET IMPLICATIONS :
None.

 EFFECTIVE DATE :
Immediately.