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Criminal Resource Manual 2186 Memorandum Of Understanding -- Investigatory Authority And Procedures Of Treasury And Justice Bureaus And The Postal Service Under 18 U.S.C. §1956 And 1957

2186

Memorandum of Understanding—Investigatory Authority and Procedures of Treasury and Justice Bureaus and the Postal Service Under 18 U.S.C. §§ 1956 and 1957

AMONG
THE SECRETARY OF THE TREASURY
THE ATTORNEY GENERAL AND
THE POSTMASTER GENERAL
REGARDING MONEY LAUNDERING INVESTIGATIONS

This Memorandum of Understanding (MOU) constitutes an agreement among the Secretary of the Treasury ("the Secretary"), the Attorney General and the Postmaster General as to the investigatory authority and procedures of Treasury and Justice bureaus and the Postal Service under 18 U.S.C. sections 1956 and 1957, as amended by the Anti-Drug Abuse Act of 1988, Pub. L. 100-690 (Nov. 18, 1988). This replaces a previous MOU on this subject between the Secretary and the Attorney General effective May 20, 1987.

Section I.Purpose

The Attorney General, the Secretary and the Postmaster General have entered into this MOU in order to encourage effective and harmonious cooperation by Treasury and Justice bureaus and the Postal Service in the development of cases by bureaus with appropriate experience, to reduce the possibility of duplicative investigations, to minimize the potential for dangerous situations which might arise from uncoordinated multi-bureau efforts, and to enhance the potential for successful prosecution in cases presented to the various United States Attorneys.

As clearly stated in the legislative history of the Act, this MOU does not confer any rights on any third party, including a defendant or other party in litigation with the United States. The fact that a bureau investigates a violation of section 1956 or section 1957 that should have been investigated by another bureau under the terms of this MOU, or that an agency not a party to this MOU investigates a violation of section 1956 or section 1957, confers no rights and provides no defense to any party.

While this MOU allocates jurisdiction to investigate violations of sections 1956 and 1957, nothing in this MOU is intended to augment or diminish the investigatory authority of any Justice or Treasury bureau or the Postal Service over violations of any Federal criminal law, independent of the money laundering statute, or to alter the existing allocation or delegation of such authority. This MOU governs all investigations involving 18 U.S.C. 1956 and 1957 and is intended to be used together with MOU's presently existing between the bureaus. This MOU does not supersede the provision of 26 U.S.C. 6103 (confidentiality and disclosure of returns and return information).

Section II.Definitions

1. "Bureau" includes the Postal Inspection Service.
2. "Treasury bureaus" mean the Internal Revenue Service (IRS), the United States Customs Service, the Bureau of Alcohol, Tobacco, and Firearms (ATF), and the United States Secret Service.
3. "Justice bureaus" means the Drug Enforcement Administration (DEA) and the Federal Bureau of Investigations (FBI).
4. "Violations of section 1956" refers to both civil and criminal violations.
5. "Specified unlawful activities" has the definition set forth 18 U.S.C. section 1956(c)(7).
6. "Justice Department attorney" means the appropriate Assistant United States Attorney or designated Justice Department attorney assigned to the prosecution of the case.
Section III.Investigatory Jurisdiction

A bureau's investigatory actions in pursuit of a section 1956 or 1957 violation shall be conducted only in those areas in which the investigating bureau has existing jurisdiction, independent of the money laundering statutes, as set forth in this Section.

  1. Treasury Bureaus
    1. Internal Revenue Service
      The Internal Revenue Service will have investigative jurisdiction over all violations of Section 1956 and 1957 where the underlying conduct is subject to investigation under Title 26 or the Bank Secrecy Act.
    2. United States Customs Service
      1. The United States Customs Service will have investigatory jurisdiction over violations of section 1956 or section 1957 involving the following specified unlawful activities: criminal offenses under 18 U.S.C. section 542 (relating to entry of goods by means of false statements), section 545 (relating to the smuggling of goods into the United States), section 549 (relating to removing goods from Customs custody), section 659 (relating to theft from foreign shipment), sections 1461-63 and 1465 (relating to illegal import or export of obscene matter), sections 2251-52 (relating to imports or exports of material involving sexual exploitation of children), section 2314 (relating to foreign transportation of stolen property), and section 2321 (relating to the import or export of certain motor vehicles or vehicle parts); 19 U.S.C. section 1590 (relating to aviation smuggling); 21 U.S.C. section 857 (relating to the illegal import or export of drug paraphernalia); criminal offenses under section 11 of the Export Administration Act of 1979 (50 U.S.C. App. section 2410); criminal offenses under section 206 of the International Emergency Economic Powers Act (50 U.S.C. 1705); criminal offenses under section 16 of the Trading with the Enemy Act (50 U.S.C. App. 16); and criminal offenses under section 38(c) of the Arms Export Control Act (22 U.S.C. section 2778) (relating to exportation, intransit, temporary import, or temporary export transactions).
      2. The United States Customs Service will have investigatory jurisdiction over violations of section 1956(a)(2)(B)(ii), involving the international transportation of monetary instruments or funds which are proceeds of some form of unlawful activity and where the defendant knew that the transportation was designed in whole or in part to avoid a transaction reporting requirement under 31 U.S.C. 5316 (Reports on exporting and importing monetary instruments).
    3. United States Secret Service
      The United States Secret Service will have investigatory jurisdiction over violations of section 1956 or section 1957 involving the specified unlawful activity of an offense under 18 U.S.C. sections 471-473 (counterfeiting of obligations or securities of the United States), sections 500-503 (counterfeiting of blank or postal money orders, postage stamps, foreign governments postage and revenue stamps, and postmarking stamps), section 657 (involving theft, embezzlement or misapplication by employees of the FDIC), and section 1029 (fraud and related activity in connection with access devices).
    4. Bureau of Alcohol, Tobacco and Firearms
      The Bureau of Alcohol, Tobacco, and Firearms will have investigatory jurisdiction over violations of section 1956 or section 1957 involving the specified unlawful activity of an offense under 18 U.S.C. sections 2341-2346 (trafficking in contraband cigarettes); section 38(c) of the Arms Export Control Act, 22 U.S.C. section 2778 (relating to the importation of items on the U.S. Munitions Import List, except those relating to exportation, intransit, temporary import, or temporary export transactions); and 18 U.S.C. 1952 (relating to travelling in interstate commerce, with respect to liquor on which Federal excise tax has not been paid and arson); or any act or activity constituting an offense listed in 18 U.S.C. 1961(1), with respect to any act or threat involving arson, which is chargeable under State law and punishable for more than one year.
  2. Justice Bureaus
    1. Federal Bureau of Investigation
      The Federal Bureau of Investigation will have investigatory jurisdiction over violations of section 1956 or section 1957 involving the specified unlawful activities of an offense under 18 U.S.C. section 152 (relating to concealment of assets; false oaths and claims; bribery), section 215 (relating to commissions or gifts for procuring loans), section 513 (relating to securities of States and private entities), section 641 (relating to public money, property, or records), section 656 (relating to theft, embezzlement, or misapplication by bank officer or employee), section 657 (relating to lending, credit, and insurance institutions), 658 (relating to property mortgaged or pledged to farm credit agencies), section 666 (relating to theft or bribery concerning programs receiving Federal funds), sections 793, 794, or 798 (relating to espionage), section 875 (relating to interstate communications), section 1201 (relating to kidnapping), section 1203 (relating to hostage taking), section 1344 (relating to bank fraud), or section 2113 or 2114 (relating to bank and postal robbery and theft), section 2319 (relating to copyright infringement); 21 U.S.C. section 830 (relating to precursor chemicals), section 857 (relating to transportation of drug paraphernalia) and, with respect to a financial transaction occurring in whole or in part in the United States, an offense against a foreign nation involving the manufacture, importation, sale, or distribution of a controlled substance (as such term is defined for the purposes of the Controlled Substances Act); and any act or acts constituting a continuing criminal enterprise, as that term is defined in section 408 of the Controlled Substances Act (21 U.S.C. 848); or any act or activity constituting an offense listed in 18 U.S.C. 1961(1), with respect to any act or threat involving murder, kidnapping, gambling, arson, robbery, bribery, extortion, dealing in obscene matter, or in dealing in narcotics or other dangerous drugs which is chargeable under State law and punishable for more than one year; 18 U.S.C. 201 (bribery); 18 U.S.C. 224 (sports bribery); 18 U.S.C. 659 (theft from interstate shipment); 18 U.S.C. 664 (embezzlement from pension and welfare funds); 18 U.S.C. 891-894 (extortionate credit transactions); 18 U.S.C. 1029 (fraud and related activity in connection with access devices); 18 U.S.C. 1084 (the transmission of gambling information); 18 U.S.C. 1341 (mail fraud); 18 U.S.C. 1343 (wire fraud); 18 U.S.C. 1461-1465 (obscene matter); 18 U.S.C. 1503 (obstruction of justice); 18 U.S.C. 1510 (obstruction of criminal investigation); 18 U.S.C. 1511 (the obstruction of State or local law enforcement); 18 U.S.C. 1512 (tampering with a witness, victim or informant); 18 U.S.C. 1513 (retaliating against a witness, victim or informant); 18 U.S.C. 1951 (interference with commerce, robbery or extortion); 18 U.S.C. 1952 (racketeering, except with respect to untaxed paid liquor and arson); 18 U.S.C. 1953 (interstate transportation of wagering paraphernalia); 18 U.S.C. 1954 (unlawful welfare fund payments); 18 U.S.C. 1955 (the prohibition of illegal gambling businesses); 18 U.S.C. 1958 (use of interstate commerce facilities in the commission of murder-for-hire); 22 U.S.C. 2251-52 (sexual exploitation of children); 18 U.S.C. 2321 (trafficking in certain motor vehicles or motor vehicles parts); 18 U.S.C. 2312 and 2313 (interstate transportation of stolen motor vehicles); 18 U.S.C. 2314 and 2315 (interstate transportation of stolen property); 18 U.S.C. 2421-24 (Mann Act); any act which is indictable under 29 U.S.C. 186 (restrictions on payments and loans to labor organizations) or 29 U.S.C. 501(c) (embezzlement from union funds); any offense involving fraud connected with a case under title 11, fraud in the sale of securities, and the felonious manufacturer, importation, receiving, concealment, buying, selling, or otherwise dealing in narcotic or other dangerous drugs, punishable under any law of the United States.
    2. Drug Enforcement Administration
      The Drug Enforcement Administration shall have investigatory jurisdiction over violations of sections 1956 or 1957 involving the specified unlawful activities of, with respect to a financial transaction occurring in whole or in part in the United States, an offense against a foreign nation involving the manufacture, importation, sale, or distribution of a controlled substance (as such term is defined for the purpose of the Controlled Substances Act) including 21 U.S.C. 830 (relating to precursor and essential chemicals) and 857 (relating to transportation of drug paraphernalia); or any act or acts constituting a continuing criminal enterprise, as that term is defined in section 408 of the Controlled Substances Act (21 U.S.C. 848); or any of the predicate offenses enumerated in 18 U.S.C. 1961(1) dealing in narcotics or other dangerous drugs which are chargeable under State law and punishable for more than one year, or the felonious manufacture, importation, receiving, concealment, buying, selling, or otherwise dealing in narcotics or other dangerous drugs, punishable under any law of the United States.
  3. United States Postal Service
    The investigative jurisdiction of the Postal Inspection Service is limited by 18 U.S.C. 3061 to offenses regarding property in the custody of the Postal Service, property of the Postal Service, use of the mails, other postal offenses, and offenses for which the Postal Service has been delegated investigative authority pursuant to 18 U.S.C. 3061 (b)(2). Subject to these limitations, the Postal Inspection Service shall have investigative jurisdiction over violations of sections 1956 and 1957 involving the specified unlawful activities of 18 U.S.C. 201 (bribery of public officials and witnesses); 18 U.S.C. 500-503 (counterfeiting of money orders, post cards, indicia of postage and postmarking stamps); 18 U.S.C. 641 (theft of public money, property or records); 18 U.S.C. 1029 (fraudulent activity in connection with access devices) with respect to violations involving postal employees, fraud against the Postal Service or where the primary focus of the offense is mail fraud or a violation of 18 U.S.C. 2114 (postal robbery); 18 U.S.C. 1341 (mail fraud); 18 U.S.C. 1343 (wire fraud) where the primary focus of the offense is mail fraud; 18 U.S.C. 1461 and 1463 (mailing of obscene matter); 18 U.S.C. 1503, 1510-1513 (obstruction of justice); 18 U.S.C. 1952 (mailing in aid of racketeering enterprises); 18 U.S.C. 1961 (1)(A) (organized crime); 18 U.S.C. 2114 (robbery of mail, other property); 18 U.S.C. 2251, 2252 (sexual exploitation of minors); any 18 U.S.C. 1961 (1) offense dealing in narcotics and other dangerous drugs which are chargeable under state law and punishable for more than one year, or by the felonious manufacture, importation, receiving, concealment, buying, selling, or otherwise dealing in narcotics or other dangerous drugs punishable under any law of the United States, or any act or acts constituting criminal enterprise, as that term is defined in section 408 of the Controlled Substances Act (21 U.S.C. 848); 21 U.S.C. 843 (b) (use of mails to violate Controlled Substances Act); and, Section 1822 of the Mail Order Drug Paraphernalia Control Act (21 U.S.C. 857) (transportation of drug paraphernalia).

Section IV.Undercover Operations

This MOU will govern the conduct of all money laundering investigations under sections 1956 and 1957 in that all parties hereto agree that all undercover operations will be reviewed using each bureau's internal guidelines, the objectives of which are consistent with existing Attorney General Guidelines on undercover operations.

Section V.Seizure and Forfeiture

Any property involved in a violation of section 1956 or 1957 that a Treasury or Justice bureau or the Postal Service has authority to investigate under Section III of this MOU may be seized by that bureau or the Postal Service, if that property is subject to forfeiture to the United States under 18 U.S.C. 981(a)(1)(A) or 981(a)(1)(B).

Where a Treasury or Justice bureau or the Postal Service would have authority to seize property under the authority stated in the preceding paragraph is not present to make the seizure, any Treasury or Justice bureau or the Postal Service that is present may seize the property and shall immediately turn over that property to the bureau having section III investigatory jurisdiction, where the forfeiture processing shall occur.

Any property seized under this Section shall, upon forfeiture under 18 U.S.C. 981 or 982, be apportioned among the appropriate Treasury or Justice bureaus or the Postal Service in accordance with their respective contribution to the overall efforts expended in the investigation, seizure, or forfeiture.

Pursuant to 18 U.S.C. 981(e) and, where appropriate, the Justice Department, the Treasury Department or the Postal Service forfeiture guidelines, apportionment may include equitable transfers to any other Federal agency or State or local authorities, which participated directly in any of the acts which led to the seizure or forfeiture.

Any dispute regarding the seizure, forfeiture, apportionment, or disposition of property under this section shall be governed by the disputes resolution procedure in Section IX of this MOU.

This MOU does not affect Treasury or Justice bureaus' or the Postal Service's authority to seize property or the disposition of such property under statutory seizure and forfeiture provisions not based on section 1956 and 1957 violations.

A. Seizure of Attorney Fees: Treasury and Justice bureaus and the Postal Service will follow DOJ guidelines in reference to the seizure and forfeiture of any money or property that is held by an attorney for payment for the defense of a client. See United States Attorneys Manual 9-111.000, et seq.

Section VI.Prosecution

A bureau that conducts an investigation under the authority of this MOU shall coordinate with Justice Department attorneys.

Section VII. Notice, Coordination, and Lead Bureau

  1. Notice
    1. If, during the investigation of a section 1956 or 1957 violation, a bureau discovers a specified unlawful activity or a transaction reporting violation over which another bureau has investigatory jurisdiction, that bureau shall give notice to the bureau which has investigatory jurisdiction over the specified unlawful activity or to the Internal Revenue Service or Customs, as appropriate, in the case of a transaction reporting violation, and to consult prior to taking any investigative actions impacting on the other bureau's jurisdiction.
    2. If a bureau discovers transactions involving the proceeds of a specified unlawful activity conducted with intent to engage in a violation of section 7201 or 7206 of the Internal Revenue Code, that bureau shall give notice to the Internal Revenue Service and coordinate the subsequent investigation with the IRS. To the extent that any IRS money laundering investigation requires the acquisition of evidence concerning an underlying specified unlawful activity, the IRS shall notify the bureau having jurisdiction over the specified unlawful activity and coordinate the subsequent investigation with that bureau.
    3. Notice under this section will ordinarily be made at the supervisory field level and will, at a minimum, require a complete summary of the facts and circumstances of the investigation. However, in those instances where a bureau undertakes an investigation in which it determines that field level disclosure would be detrimental to the investigation, the required notice will be made at the headquarters level and dissemination restricted to selected individuals consistent with the need to maintain security of the investigations.
  2. Coordination and Determination of Lead Bureau

    Investigatory actions which involve areas outside the investigating bureau's existing jurisdiction, independent of the money laundering statute, shall be conducted only in coordination with the bureau(s) which do have existing jurisdiction independent of the money laundering statute. Coordination requires, at a minimum, a determination of the degree of cooperation necessary between the coordinating bureau(s) and includes continuing dialogue as the case develops. At the request of any coordinating bureau, at any time as the case develops, there shall be a determination of the lead bureau for the Section 1956 or 1957 investigation. The determination of lead bureau does not preclude a subsequent request by a coordinating bureau for redetermination of the lead as compelling facts and circumstances warrant.

The determination of the lead bureau will be made at the supervisory field level by the bureaus involved and will be governed by which bureau has the paramount investigatory interest. In determining which bureau has the paramount investigatory interest, the factors to be considered shall include, but not be limited to:

  • Likely impact on major criminal enterprises;
  • Likelihood of successful prosecution;
  • Existence of a specified unlawful activity, as defined in section 1956(c)(7);
  • Jeopardy to informants, undercover agents, or third parties;
  • Commitment of investigatory resources; and
  • Any other matter of substantive investigative interest.

Section VIII. Jointly Conducted Investigations

Treasury and Justice bureaus and the Postal Service are encouraged to enter into joint investigatory endeavors in circumstances that may necessitate or justify the use of skills and resources or more than one bureau. The specific details of each joint investigation, including the role of each bureau in the endeavor, will be formulated at the onset of the investigation and will be provided to each bureau's headquarters by each bureau's established procedures. While differing circumstances will result in varied arrangements from project to project, certain conditions will always apply:

  • Participating personnel will be supervised by their respective bureaus. This does not alter any other concerning supervision of investigatory personnel.
  • Only one evidentiary document, such as a record of interview will be prepared, and a copy will be furnished to the other bureau at the time the document is prepared.
  • Resources and investigatory expertise will be provided to the requesting bureau when the investigatory matter meets the criteria of the requested bureau and when available resources allow.
  • Any contact with the news media, such as press releases, will be coordinated and agreed to in advance by the bureaus involved.

Section IX.Dispute Resolution

The Secretary, the Attorney General and the Postmaster General contemplate that in cases of overlapping jurisdiction, the appropriate bureaus will work in concert to the extent authorized by law. Any disputes between bureaus should be resolved at the field level. When this cannot be accomplished, the matter will be referred to the respective headquarters' point of contact. In the event that disputes cannot be resolved by the bureau headquarters, the matter will be expeditiously referred to the Assistant Attorney General, Criminal Division, Department of Justice, and the Assistant Secretary for Enforcement, Department of the Treasury, and in disputes involving the Postal Service, to the Chief Postal Inspector, whose decisions shall be final.

Section X.Extraterritorial Jurisdiction

Treasury and Justice bureaus and the Postal Service must immediately notify the appropriate prosecuting attorney or other designated Department of Justice official if, in the course of a section 1956 or section 1957 investigation, it becomes likely that extraterritorial jurisdiction under section 1956(f) or section 1957(d) will be invoked. See United States Attorneys Manual 9-105.100.

Section XI.Amendment

This MOU may be amended be deletion or modification of any provision contained herein, or by addition of new provisions, after written concurrence of all the parties to the MOU.

Section XII. Termination

This MOU will remain in effect until terminated by the Attorney General or the Secretary or the Postmaster General upon 30 days' written notice.

Section XIII. Approval

This MOU becomes effective when approved by the parties identified below.

[Original Signed]
Peter K. Nunez

Assistant Secretary (Enforcement)
U.S. Department of Treasury

JUL 31 1990
Date

[Original Signed]
William P. Barr
Deputy Attorney General
U.S. Department of Justice

8/11/90
Date [Original Signed]
Charles R. Clauson
Chief Postal Inspector

8/16/90
Date

[cited in USAM 9-105.750; USAM 9-119.600]

Updated February 19, 2015