BILL NUMBER:  S235

 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 illegal money transmission
instruments.

 SUMMARY OF PROVISIONS :

Section 1. Amends the Banking Law (1). Deletes the existing provisions
and adds 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 the Banking Law section 650 paragraph (a) and
subdivision (2) paragraph (b) and subparagraphs (1), (2) and (4).
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 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 the Penal Law section 470.00 (5). 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 the Criminal Procedure Law (CPL) section 30.10 (3)
by adding a new paragraph (h). 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 55,
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 may be charged 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 Statue of Limitations.

 PRIOR LEGISLATIVE HISTORY :  2014: S.259 - Passed Senate/A.2469 -
Referred to Banks 2013: S.259 - Passed Senate/A.2469 - Referred to
Banks 2012: S.271 - Passed Senate/A.8531 - Referred to Banks 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 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.

 FINANCIAL IMPLICATIONS : None

 EFFECTIVE DATE :  Immediately, with provisions.