NY State Senate Bill 2019-S4921

Senate Bill S4921

2019-2020 Legislative Session

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

download bill text pdf

Archive: Last Bill Status - In Senate Committee Banks Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

Please enter your contact information

First Name

Last Name

Email Address

A valid email address is required.

Home address is used to determine the senate district in which you reside. Your support or opposition to this bill is then shared immediately with the senator who represents you.

Optional services from the NY State Senate:

Create an account. An account allows you to officially support or oppose key legislation, sign petitions with a single click, and follow issues, committees, and bills that matter to you. When you create an account, you agree to this platform's terms of participation.

Include a custom message for your Senator? (Optional)

Enter a message to your senator. Many New Yorkers use this to share the reasoning behind their support or opposition to the bill. Others might share a personal anecdote about how the bill would affect them or people they care about.

Actions

View Actions

	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 08, 2020	referred to banks
Mar 29, 2019	referred to banks

2019-S4921 (ACTIVE) - Details

Current Committee:: Senate Banks
Law Section:: Banking Law
Laws Affected:: Amd §650, Bank L; amd §470.00, Pen L; amd §30.10, CP L
Versions Introduced in Other Legislative Sessions:: 2009-2010: S2176
2011-2012: S271
2013-2014: S259
2015-2016: S235
2017-2018: S506
2021-2022: S5202

2019-S4921 (ACTIVE) - 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.

2019-S4921 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S4921

SPONSOR: SANDERS
 
TITLE OF BILL:  An act to amend the banking law, in relation to clari-
fying the definition of illegal money transmission and increasing the
penalties for certain activities by licensed and unlicensed money trans-
mitters; 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 guil-
ty 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 prohibi-
tion 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 falsifica-
tion of records or statements, or the misapplication of moneys or credit
by bank personnel, thus making such violations also violations consti-
tuting 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 of ten 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 misdemea-
nor 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 consist-
ently 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. Currently, 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.

 
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 applica-
ble penalties by persons not licensed or engaging in such activity with
in a regulated context.  Further, the referencing of such illegal activ-
ities 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 "imme-
diately" 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 agen-
cies would otherwise have commenced a prosecution.  Federal authorities
have also declined to prosecute cases that the State would have prose-
cuted 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 prose-
cuting 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 regis-
tered 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 regis-
tered parties. The definition of controlling interest, as it applies to
persons or entities licensed, chartered, or registered by the Depart-
ment, is the definition applicable to banking organizations as stated in
section 143-b of the Banking Law.

 
PRIOR LEGISLATIVE HISTORY:

A.8531/S.271 of 2011 Passed Senate twice but died in Assembly Banking
Committee in 2011 and 2012.
2010: S.21768 - 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
A2469 of 2013 died in banks.
A.6586 of 2015 died in banks
BILL NO A06309
03/02/2017 referred to banks
01/03/2018 referred to banks

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
Immediately.

2019-S4921 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   4921
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                              March 29, 2019
                                ___________
 
 Introduced  by  Sen. SANDERS -- 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.
                                                            LBD10285-01-9

 S. 4921                             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.
   § 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.
   § 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.
   § 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. 4921                             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.
   §  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.

Comments

Open Legislation is a forum for New York State legislation. All comments are subject to review and community moderation is encouraged.

Comments deemed off-topic, commercial, campaign-related, self-promotional; or that contain profanity, hate or toxic speech; or that link to sites outside of the nysenate.gov domain are not permitted, and will not be published. Attempts to intimidate and silence contributors or deliberately deceive the public, including excessive or extraneous posting/posts, or coordinated activity, are prohibited and may result in the temporary or permanent banning of the user. Comment moderation is generally performed Monday through Friday. By contributing or voting you agree to the Terms of Participation and verify you are over 13.

Create an account. An account allows you to sign petitions with a single click, officially support or oppose key legislation, and follow issues, committees, and bills that matter to you. When you create an account, you agree to this platform's terms of participation.