Does the North Carolina RICO Act include structuring a currency transaction in violation of federal law within its definition of money-laundering activity?

Plain-English summary

The AG was asked whether the North Carolina RICO Act included currency structuring in violation of 31 U.S.C. § 5324(a)(3) within the undefined phrase "money laundering" activity. The opinion answered yes. G.S. § 75D-3(c) listed "[a]ny conduct involved in a 'money laundering' activity" among racketeering activities, but the Act did not define that phrase and no reported North Carolina appellate decision had interpreted it at the time.

The opinion used the Act's declared purpose to guide its reading. G.S. § 75D-2(b) sought to deter organized unlawful activity, prevent unjust enrichment, restore proceeds to the State's economy, and compensate injured private people. The AG treated the statute as remedial and said it should be construed liberally within its intended scope.

The AG described the ordinary meaning of money laundering as a financial transaction aimed at concealing the source or ownership of proceeds. Structuring a currency transaction could have that effect and possibly that purpose, the opinion said. It also read "any conduct involved in" to include conduct directly related to laundering. On those grounds, the AG concluded that violating the federal structuring provision came within the State RICO definition.

The closing paragraph was careful about the opinion's authority. The AG expressly declined to decide whether a federal court had a duty or authority to follow its guidance in a federal forfeiture proceeding. The opinion offered the AG's interpretation of State law; it did not bind a court.

Currency note

This is a 1993 advisory interpretation of the statutes cited. Check current State and federal law and later court decisions for a present RICO question.

Background and statutory framework

G.S. § 75D-3(c), as quoted in the opinion, included specified State offenses, conduct involved in money-laundering activity, and conduct described by federal RICO law within the definition of racketeering activity. The opinion addressed the meaning of the money-laundering clause, not whether a particular person had committed an offense or met any other element of a RICO claim.

The AG used ordinary meaning, the Act's remedial purpose, and the instruction to give effect to every part of a statute. The separate words "any conduct involved in" mattered because they extended the clause to conduct directly related to money laundering, in the AG's reading.

Common questions

Did the AG include federal currency structuring within the State RICO clause?

Yes. The opinion concluded that a currency transaction structured in violation of 31 U.S.C. § 5324(a)(3) was reasonably included within "money laundering" activity and "any conduct involved in" it under G.S. § 75D-3(c)(1)c.

Did the opinion decide whether a federal court must follow that interpretation?

No. It expressly said the office could not and should not give an opinion on a federal court's duty or authority to follow the guidance in a federal forfeiture proceeding.

Is the AG interpretation binding on North Carolina courts?

The document is an advisory opinion. It states the AG's reading of the State statute, not a court ruling on a disputed case.

Source

• Landing page: https://ncdoj.gov/opinions/meaning-of-the-phrase-money-laundering-activity/

Citations

• N.C. Gen. Stat. § 75D-2(b)
• N.C. Gen. Stat. § 75D-3(c)
• N.C. Gen. Stat. § 75D-3(c)(1)c
• 18 U.S.C. § 1961(1)
• 31 U.S.C. § 5324(a)(3)
• Electric Supply Co. v. Swain Electrical Co., 328 N.C. 651, 403 S.E.2d 291 (1991)
• Hunt v. Reinsurance Facility, 302 N.C. 274, 275 S.E.2d 399 (1981)
• Puckett v. Sellars, 235 N.C. 264, 69 S.E.2d 497 (1952)
• Hicks v. Albertson, 284 N.C. 236, 200 S.E.2d 40 (1973)
• Wilmington Shipyard v. State Highway Commission, 6 N.C. App. 649, 171 S.E.2d 222 (1970)
• State v. Hart, 287 N.C. 76, 213 S.E.2d 291 (1975)
• Sellers v. Refrigerators, Inc., 283 N.C. 79, 194 S.E.2d 817 (1973)
• Cab Company v. Charlotte, 234 N.C. 572, 68 S.E.2d 433 (1951)
• In re Hardy, 294 N.C. 90, 240 S.E.2d 367 (1978)
• In re Hickerson, 235 N.C. 716, 71 S.E.2d 129 (1952)
• State v. Williams, 286 N.C. 422, 212 S.E.2d 113 (1975)

Original opinion text

Best-effort transcription from a scrape that omitted the salutation, addressee block, and opening paragraphs. The linked NCDOJ page is authoritative for the full original.

• a. Article 5 of Chapter 90 of the General Statutes of North Carolina relating to controlled substances and counterfeit controlled substances;
• b. Chapter 14 of the General Statutes of North Carolina except . . . .
• c. Any conduct involved in a "money laundering" activity; and

(2) "Racketeering activity" also includes the description in Title 18, United States Code, Section 1961(1).

G.S. 75D-3(c) (1986). The phrase "'money laundering' activity", is not defined further in the North Carolina RICO Act, nor has it been interpreted in the reported decisions of the appellate courts of this state. It is therefore a matter of statutory interpretation as to whether the term incorporates structuring a currency transaction in violation of federal law.

The primary principle of statutory construction is to ensure that the purpose of the legislature in enacting the law, the legislative intent, is accomplished. Electric Supply Co. v. Swain Electrical Co., 328 N.C. 651, 403 S.E.2d 291 (1991); Hunt v. Reinsurance Facility, 302 N.C. 274, 275 S.E.2d 399 (1981). To determine the legislative intent, the purpose of a statute and the evils it was designed to remedy may be considered. Puckett v. Sellars, 235 N.C. 264, 69 S.E.2d 497 (1952). The North Carolina RICO Act contains the following statement of legislative purpose and intent.

The General Assembly declares that the purpose and intent of this Chapter is: to deter organized unlawful activity by imposing civil equitable sanctions against this subversion of the economy by organized unlawful elements; to prevent the unjust enrichment of those engaged in organized unlawful activity; to restore to the general economy of the State all proceeds, money, profits, and property both real and personal of every kind and description which is owned, used or acquired through organized unlawful activity. . . ; and to provide compensation to private persons injured by organized unlawful activity.

G.S. 75D-2(b) (1986). This language clearly reflects the legislature's intent to create a remedial civil forfeiture statute designed to deter a broad range of organized unlawful activity. The RICO Act, being remedial, should be construed liberally in a manner which assures fulfillment of the beneficial goals for which it was enacted and which brings within it all cases fairly falling within its intended scope. Hicks v. Albertson, 284 N.C. 236, 200 S.E.2d 40 (1973); Wilmington Shipyard v. State Highway Commission, 6 N.C. App. 649, 171 S.E.2d 222 (1970). A construction which operates to defeat or impair the object of the RICO Act must be avoided if that can reasonably be done without violence to the legislative language. State v. Hart, 287 N.C. 76, 213 S.E.2d 291 (1975).

The phrase "'money laundering' activity" is ambiguous and susceptible to a wide range of meaning. However, application of the standard principles of statutory construction leads us to conclude the legislature intended the phrase to include structuring a currency transaction in violation of 31 U.S.C. 5324(a)(3).

It is an accepted rule of statutory construction that where the words of a statute have not acquired a technical meaning, their common and ordinary meaning prevails unless a different meaning is apparent or definitely indicated by the context. Sellers v. Refrigerators, Inc., 283 N.C. 79, 194 S.E.2d 817 (1973); Cab Company v. Charlotte, 234 N.C. 572, 68 S.E.2d 433 (1951). The phrase "'money laundering' activity" has not acquired a technical meaning in this state because the offense is not recognized under North Carolina law. However, its ordinary and commonly accepted meaning is a financial transaction conducted for the purpose of concealing the source or ownership of the proceeds used in the transaction. Given the broad scope and remedial purpose of the RICO Act, structuring a currency transaction in violation of federal law reasonably is encompassed within the ordinary meaning of the phrase "'money laundering' activity". This is so because the effect, and possibly the purpose, of structuring is to conceal the source or ownership of the proceeds used in the financial transaction.

Our conclusion also is supported by the rules of construction that statutory language must be interpreted contextually in a manner which harmonizes with the other provisions of the statute and that subsections of the same statute are to be construed together as a whole with every part being given effect. In re Hardy, 294 N.C. 90, 240 S.E.2d 367 (1978); In re Hickerson, 235 N.C. 716, 71 S.E.2d 129 (1952). It also is supported by the presumptions that the legislature inserted every part of a provision for a purpose and that no part is redundant. State v. Williams, 286 N.C. 422, 212 S.E.2d 113 (1975). "[S]ignificance and effect should, if possible, . . . be accorded every part of the act, including every section, paragraph, sentence or clause, and word." Id. at 432. Here, the two subparagraphs preceding the one under consideration bring within the definition of "racketeering activity" specified unlawful activity in violation of the State's criminal law. The separate subparagraph in which the phrase under consideration is found reads "[a]ny conduct involved in a 'money laundering' activity." G.S. 75D-3(c)(1)c (Emphasis added.) Application of the aforesaid principles of statutory construction leads us to conclude that the legislature intended the language of G.S. 75D-3(c)(1)c to include within its scope not only the specified unlawful activity of "money laundering", but any other conduct directly related to that activity. Again, structuring a currency transaction in violation of federal law reasonably is included within the meaning of "[a]ny conduct involved in a 'money laundering' activity" notwithstanding the absence of a specified unlawful activity. Any other interpretation would defeat or impair the object of the RICO Act.

We are pleased to provide this advisory opinion to you. However, whether a federal court has the duty or authority to follow our guidance on this issue in a federal forfeiture proceeding is a question upon which this office cannot and should not render an opinion.

Edwin M. Speas, Jr.
Senior Deputy Attorney General

W. Dale Talbert
Special Deputy Attorney General