Prosecutors frequently add money laundering charges to fraud cases to increase sentencing exposure, create plea-bargaining leverage, and support forfeiture. Money laundering investigations are often tied to some of the United States government’s most aggressive white collar prosecutions involving wire fraud, healthcare fraud, cryptocurrency investigations, tax offenses, bank fraud, unlicensed money transmitting, and alleged financial conspiracies. Agencies often involved in money laundering investigations include the FBI, IRS Criminal Investigation Division, DEA, Homeland Security Investigations (HSI), FinCEN, and the Department of Justice.
What Is Money Laundering? It’s Not Just “Cleaning Dirty Money”
Many people understand money laundering to be the process of making money that was earned illegally look like it was earned legitimately. However, the Department of Justice is not bringing just traditional money laundering cases anymore. Federal prosecutors rely primarily on 18 U.S.C. § 1956 and 18 U.S.C. § 1957, laws that have been in place for decades but are now being applied in modern and complex ways, especially in cases involving cryptocurrency, cross-border transfers, and sanctioned countries.
Promotion of Illegal Activity
Under § 1956, prosecutors can charge money laundering when certain transactions were intended to promote further unlawful activity, conceal or disguise criminal proceeds, or avoid a required transaction reporting requirement.
Spending More Than $10,000 of “Dirty Money”
Under § 1957, prosecutors can charge money laundering when a person knowingly engages in a transaction involving more than $10,000 in money that was earned illegally. The government does not have to prove an intent to conceal the money or promote further criminal activity under § 1957, but it must prove that the money was derived from specified unlawful activity, that the defendant knew the money was criminally derived, and that the transaction meets the statute’s requirements.
Why Money Laundering Charges Are Stacked Onto Fraud Charges
Maximum Sentencing
Money laundering under § 1956 carries a maximum sentence of 20 years in federal prison, and a maximum of 10 years under § 1957. Depending on the facts of the case, prosecutors may charge each individual qualifying transaction as a separate count.
Plea Negotiation Leverage
By stacking charges, prosecutors have more they can offer to dismiss or reduce as part of a plea agreement. For a defendant facing money laundering penalties in addition to fraud penalties, prosecutors may offer to drop the money laundering charges in exchange for a guilty plea on the underlying fraud.
Asset Seizure
The government may seek forfeiture of money or assets involved in or traceable to the alleged money laundering offense. In some cases, the government may also seek to restrain assets before trial. This can limit the resources available to the defendant during the investigation and trial.
Proof of Criminal Intent in a Money Laundering Investigation
Money laundering prosecutions are often highly technical and document-intensive. Federal investigators often rely on subpoenas and cooperating witnesses, and examine financial records and transaction data such as:
- Banking records
- Wire transfers
- Business records
- Cryptocurrency transactions and digital asset transfers
- Decentralized finance platforms
- Alleged concealment methods involving mixers, wallets, and layered transactions
Prosecutors may use this evidence, depending on the charge, to argue that it is beyond a reasonable doubt that:
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- The defendant engaged in transactions intended to conceal or disguise the funds
- The defendant knew the funds were proceeds of unlawful activity
- The defendant intended to use the funds to promote further unlawful activity
- The defendant intended to avoid a required transaction reporting requirement
When to Contact a Money Laundering Defense Lawyer
If you have received a subpoena, target letter, or contact from federal agents regarding financial transactions, alleged criminal proceeds, cryptocurrency, business accounts, or suspected fraud, do not respond without first consulting a lawyer. Do not delete, alter, or destroy financial records, communications, or other evidence.
Contact a money laundering defense lawyer immediately. Do not assume you have no defenses or recourse. Many people panic and assume they must immediately negotiate a plea deal. In reality, there are always options, even when the feds are at your door.
Proven Defense in White Collar Crime and Money Laundering Cases
Founded by nationally recognized trial lawyer David Tarras and based in Boca Raton, Florida, Tarras Defense approaches federal financial investigations strategically from the earliest stages of the case.
In a case involving allegations of PPP loan fraud and money laundering, Tarras Defense successfully obtained dismissal of the money laundering count and reduced the loss amount, resulting in a substantially lower sentence.
We focus on protecting clients during the investigation phase, managing communication with federal authorities, aggressively challenging the government’s financial theories and intent allegations, pursuing the strongest possible outcome at every stage, and protecting your reputation, freedom, and future. Contact Tarras Defense for a confidential consultation.
Call: 954-592-9416
Email: David@TarrasDefense.com
Frequently Asked Questions: Money Laundering
How Is Cryptocurrency Changing Money Laundering Cases?
Cryptocurrency has made money laundering investigations more complex. There are specific task forces dedicated to cryptocurrency as funds can move across state and international borders through cryptocurrency exchanges, wallets, and other digital asset platforms. Federal investigators are no longer limited to traditional bank records when tracing alleged criminal proceeds and may examine cryptocurrency transactions, exchanges, mixers, and wallet activity. These investigations can involve foreign actors and allegations that cryptocurrency was used to move illicit funds into the United States.
How Is Money Laundering Enforcement Changing in the United States?
In addition to allegations that criminal proceeds were moved or concealed, some money laundering cases now involve broader national security concerns about financial activity connected to foreign actors and alleged ties to major cartel organizations. Investigators may examine how people in the United States move money through cryptocurrency, cash transfers, wire transfers, and other financial channels when those transactions are allegedly connected to actors in countries such as China, North Korea, Mexico, Colombia, and Venezuela.
Disclaimer: The information provided on this website and in any related blog posts is for general informational and educational purposes only. It should not be interpreted as legal advice for any specific case or situation. Viewing or receiving this content does not create an attorney-client relationship, and no such relationship is formed unless expressly agreed to in writing with the firm.