Tuesday, July 19, 2016

‘Dance Moms’ Star Pleads Guilty to Money Laundering

Originally published by John Floyd.

'Dance Moms' Star Pleads Guilty to Money Laundering


Fame can bring unexpected consequences. American dance instructor Abby Lee Miller is famous for expressing high expectations and use harsh words for her young dance students. The reality TV star, Dance Moms, is now facing harsh prison time for illegal conduct associated with her declaration of bankruptcy.


Miller pled guilty last month to one count of concealing bankruptcy assets and one count of not reporting an international money transaction. The latter count, more commonly known as money laundering, centers around Miller having employees smuggle $120,000 into the United States from Australia in Ziploc bags concealed in their luggage.


The guilty plea did not come immediately. The original charges of bankruptcy fraud were filed last fall, and her case has been delayed more than five times. Miller had been originally indicted on over 20 counts of bankruptcy fraud after she was accused of hiding money and income when she filed for bankruptcy in 2010.


Miller claimed to be making only around $9,000 in monthly income from her appearance the television programs Dance Moms and Abby’s Ultimate Dance Competition, as well as personal appearances and merchandise sales. This raised a lot of red flags for federal investigators. After the initial investigation, it appeared that Miller hid over $775,000 worth of income.


While fraud in bankruptcy proceedings can involve other federal crimes (wire and mail fraud, tax fraud, credit card fraud, etc.), the government, as in Miller’s case, elects to prosecute under one federal statute: 18 U.S.C. § 152, concealment of assets, false oaths and claims, bribery. The statute consists of nine crimes, all of which demand that the government prove that the defendant “knowingly and fraudulently” committed the particular fraud charged.


Concealment of Assets


So where did all of Miller’s money go when it was hidden?


Some of it was smuggled over international borders.


Miller was charged with money laundering in late June after it was discovered that she secretly smuggled between $120,000 and $150,000 of Australian currency to the United States. People are required to declare currency of over $10,000 when entering the United States.


The investigation also revealed text messages from Miller to a friend detailing her white collar crimes, including talking about her needs for “money laundering” of her “foreign cash.”


After being charged with money laundering, Miller pleaded guilty to both smuggling the illegal cash into the United States and hiding over $775,000 worth of income.


What Is Money Laundering?


Federal Money Laundering Defense Lawyer


Money laundering is a serious charge that has a very specific definition and can be complicated to understand. For example, bringing over $10,000 into the country without declaring it is illegal, but it is not money laundering.


The definition of money laundering involves hiding income from the government that you gained through illegal means.  Simply not declaring money does not mean that it was gained through illegal means.


That being said, people who receive an income or assets through illegal means often try to create a story or plan to make it look like their money was obtained legally. They may create a fake business or claim that the money came from some other legal source. Remember the car wash Walter White bought in Breaking Bad? That’s a money laundering scheme.


For example, say a man earns thousands of dollars a month from dealing illegal drugs and buys a new car with that income. The money is illegal income, but he has not engaged in money laundering. But he might feel the need to explain his wealth so the IRS does not investigate him. So he sets up a fake business to make it appear as though that business is where he generates his income. That is money laundering.


Again, simply neglecting to declare the Australian currency is not why Miller was charged with money laundering. The charges came about because the money she smuggled into the United States was not properly claimed beforehand – therefore, it was obtained through illegal means and as a part of her bankruptcy fraud scheme.


Consequences for Money Laundering are Incredibly Severe


The penalties for money laundering vary depending on whether you are being charged at the state or federal level. Penalties are also determined by the amount of money that was being laundered, any prior convictions, and any other counts associated with your money laundering charges. In the case of Abby Lee Miller and many other people who have been charged with money laundering, the charge often is the result of or associated with charges of fraud, tax evasion, or other illegal activities.


18 U.S. Code § 1956 states that anyone convicted of money laundering “shall be sentenced to a fine of not more than $500,000 or twice the value of the property involved in the transaction, whichever is greater, or imprisonment for not more than twenty years, or both.”


Miller faces fines that could reach millions of dollars. Prosecutors have expressed their hopes to send Miller to jail for 24-30 months, but the defense wants to reduce her sentence to six months. Her sentence is scheduled to be determined in early October.


If you face fraud or other white collar crimes, you may also end up with money laundering charges on top of what you are already up against. But money laundering, as you learned above, is complicated. You may be able to argue that the money involved was obtained through legal means, or that you did not attempt to hide funds obtained through illegal means.

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