21 U.S.C. § 854 — Investment of illicit drug profits

submitted 42 years ago by Pub. L. 91-513 to r/title-21-FOOD-AND-DRUGS · 286 words · no verdicts yet

in plain englishAI-generated · not legal advice

This section bars using illegal drug profits to invest in or run a business. Small open-market stock purchases for investment, not control, are allowed under limits. Violators face a fine up to $50,000, up to ten years in prison, or both.

(a) This section bans using illegal drug profits to invest in a business. It applies to anyone who received income from a drug violation. That violation must be punishable by more than a year in prison. The person must have been a principal in the crime. That person cannot use the income to acquire an interest in an enterprise. That person also cannot use the income to start or run an enterprise. This applies directly or indirectly. It applies to any enterprise affecting interstate or foreign commerce. There is an exception for ordinary investors. Buying securities on the open market purely for investment is not illegal. This is true as long as the buyer is not trying to control the company. The buyer, their immediate family, and any accomplices must together hold less than 1 percent of that class of securities. They must also gain no power to elect a director.

(b) Violating this section can bring a fine of up to $50,000. It can also bring up to ten years in prison. Both penalties can apply together.

(c) An "enterprise" means any individual, partnership, corporation, association, or other legal entity. It also means any group of people working together, even without forming a legal entity.

(d) Courts must interpret this section broadly. This carries out its purpose of remedying the harm from drug-profit investment.

facts

- Code placement: 21 U.S.C. § 854, titled "Investment of illicit drug profits," part of the Controlled Substances Act. - Length: 286 words, organized into four subsections (a)–(d). - Enacting law: Originally enacted as Pub. L. 91-513, title II, § 414, added by Pub. L. 98-473, title II, § 303. - Date: Enacted October 12, 1984 (98 Stat. 2049). - Amendments: Section has been amended 2 times since enactment.

the actual law source: uscode.house.gov ↗public domain

(a) Prohibition

It shall be unlawful for any person who has received any income derived, directly or indirectly, from a violation of this subchapter or subchapter II punishable by imprisonment for more than one year in which such person has participated as a principal within the meaning of section 2 of title 18, to use or invest, directly or indirectly, any part of such income, or the proceeds of such income, in acquisition of any interest in, or the establishment or operation of, any enterprise which is engaged in, or the activities of which affect interstate or foreign commerce. A purchase of securities on the open market for purposes of investment, and without the intention of controlling or participating in the control of the issuer, or of assisting another to do so, shall not be unlawful under this section if the securities of the issuer held by the purchaser, the members of his immediate family, and his or their accomplices in any violation of this subchapter or subchapter II after such purchase do not amount in the aggregate to 1 per centum of the outstanding securities of any one class, and do not confer, either in law or in fact, the power to elect one or more directors of the issuer.

(b) Penalty

Whoever violates this section shall be fined not more than $50,000 or imprisoned not more than ten years, or both.

As used in this section, the term “enterprise” includes any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity.

(d) Construction

The provisions of this section shall be liberally construed to effectuate its remedial purposes.

Source credit: (Pub. L. 91–513, title II, § 414, as added Pub. L. 98–473, title II, § 303, Oct. 12, 1984, 98 Stat. 2049.)

history & why it existsrecord from the source credit

1984Enacted · Pub. L. 91-513 · 98 Stat. 2049

The record. According to the source credit, this section was added to the Comprehensive Drug Abuse Prevention and Control Act of 1970 (Pub. L. 91–513) as title II, § 414, by Pub. L. 98–473, title II, § 303, enacted October 12, 1984, and appears at 98 Stat. 2049. The credit reflects a single enacting event rather than a pattern of frequent subsequent revision, indicating that the provision has seen limited later amendment activity since its 1984 addition. Historical context. Pub. L. 98–473 is generally known as the Comprehensive Crime Control Act of 1984, a broad piece of federal criminal-justice legislation enacted during a period of heightened congressional attention to organized crime, narcotics trafficking, and asset forfeiture. Within that larger act, the provisions inserted into the 1970 drug control statute are commonly understood to have been part of an effort to strengthen federal tools against drug trafficking enterprises, including by targeting the financial infrastructure that sustained them. The placement of this section alongside continuing criminal enterprise and forfeiture provisions is consistent with that broader legislative trend of the era. Beyond this general historical setting, the record does not establish the specific legislative intent behind this particular section — such as any particular case, controversy, or drafting history that prompted its inclusion. No committee reports, sponsor statements, or floor debates are reflected in the supplied material, and none should be inferred.

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