18 USC 1956 Money Laundering Elements: What Federal Prosecutors Must Prove

18 USC 1956 Money Laundering Elements: What Federal Prosecutors Must Prove

If federal agents seized you’re bank records, froze you’re accounts, or mentioned “18 USC 1956” during questioning—you ain’t dealing with a simple financial crime. Your looking at 20 years in federal prison for money laundering, and irregardless of what you think about drug cartels and offshore accounts, this statute applies to any financial transaction connected to over 80 different federal crimes.

This article gonna break down the actual elements prosecutors needs to prove, the defenses that works, and the penalties your facing. Many federal defendants doesn’t even understand what “money laundering” means in the legal context until their sitting across from a prosecutor who’s already built the case.

The Three Types of 18 USC § 1956 Charges

Federal money laundering law ain’t one single offense—it’s three separate crimes under 18 USC § 1956, and prosecutors gonna charge you with all three if the facts supports it. Understanding which type of charge your facing is critical, because the elements is different even though the penalty stays the same.

§ 1956(a)(1) – Domestic Transaction Money Laundering

This is the most common charge. It covers financial transactions—bank deposits, wire transfers, checks, cryptocurrency exchanges—that occurs within the United States. The government has to prove you conducted or attempted to conduct a financial transaction, knowing the property involved represented proceeds from some form of unlawful activity, with one of four specific intents (we’ll cover them intents in the next section).

Here’s what many, many defense attorneys doesn’t explain clearly: the transaction don’t have to involve a bank. Based off DOJ guidance, any transfer of funds between persons or through institutions counts. Your Venmo payment, you’re cashier’s check, even handing someone cash—if it’s connected to proceeds from a specified unlawful activity and you got one of the four intents, that’s potentially 20 years.

§ 1956(a)(2) – International Transportation Money Laundering

This provision targets the international movement of funds. If you transported or transmitted money across U.S. borders—or attempted to—knowing it represented proceeds from unlawful activity and with intent to promote more crime, conceal the source, or avoid reporting requirements, your gonna face this charge.

Critical distinction that even some federal defenders misses: tax evasion intent is NOT an element of § 1956(a)(2). It only applies to domestic transactions under (a)(1). This matters when you’re lawyer is gonna negotiate with the AUSA or argue jury instructions.

The Supreme Court decision in United States v. Cuellar also imposes a concealment requirement for transportation charges under (a)(2)(B)(i). Simply driving cash across the border ain’t enough—the government has to prove you structured the transportation to hide the ownership, source, nature, or location of the funds. We seen many cases where border seizures doesn’t meet this standard, but prosecutors charges it anyway.

§ 1956(a)(3) – Undercover Sting Operations

Here’s the trap that catches people who thinks they’re too smart: You doesn’t even need actual crime proceeds for this charge. If you conducted a financial transaction believing the funds represented proceeds from unlawful activity—even if they was actually government money in an undercover operation—that’s a violation of § 1956(a)(3).

Irregardless of whether any real crime happened, you’re belief is enough. This is how federal agents runs stings on targets they suspects of laundering. They pose as criminals, offer you “dirty money,” and if you accepts it knowing (or believing) it came from drug trafficking, fraud, or any other specified unlawful activity, you just committed money laundering based off you’re state of mind alone.

All three types carries the same maximum penalty: 20 years imprisonment and fines up to $500,000 or twice the amount involved in the transaction, whichever is greater.

The Four Intents That Proves Guilt Under § 1956(a)(1)

Understanding the intent element is where most defendants—and unfortunately some defense attorneys—gets confused. The government doesn’t just have to prove you conducted a financial transaction involving crime proceeds. They has to prove you did it with one of four specific intents, and these intents is listed in the statute itself.

Here’s what your prosecutor needs to show beyond reasonable doubt, based off the standard federal jury instructions:

1. Promotional Laundering – Intent to Promote Unlawful Activity

You conducted the transaction with intent to promote the carrying on of specified unlawful activity. This don’t mean you was starting a new crime—it means the transaction was designed to facilitate ongoing or future criminal conduct.

Example: You runs a healthcare fraud scheme. You uses the fraud proceeds to pay kickbacks to doctors who refers more patients to you’re clinic. That payment promotes the continuation of the fraud scheme. That’s promotional money laundering, and it’s gonna get charged as a separate count from the underlying fraud.

Critical insight prosecutors doesn’t advertise: For promotional laundering under § 1956(a)(1)(A)(i), the government does NOT have to prove the funds actually came from a crime. They just needs to show you intended to promote specified unlawful activity. This is the only laundering charge where actual proceeds ain’t required. You’re intent is enough.

2. Concealment Laundering – Intent to Conceal or Disguise

You conducted the transaction knowing it was designed to conceal or disguise the nature, location, source, ownership, or control of the proceeds. This is the classic “money laundering” people thinks about—shell companies, nominee accounts, layered transactions.

But irregardless of what Hollywood shows you, concealment don’t require sophisticated offshore structures. Based off cases I seen, prosecutors has obtained convictions for:

• Depositing crime proceeds into a business account and mixing it with legitimate funds
• Using a relative’s name on bank accounts
• Breaking up deposits into amounts under $10,000
• Transferring funds through multiple accounts before final use
• Converting cash to cashier’s checks or money orders

The key is your intent. If you structured the transaction to hide where the money came from or who really owns it, that’s concealment laundering regardless of how simple or complex the method was.

3. Structuring Laundering – Intent to Avoid Reporting Requirements

You conducted the transaction knowing it was designed to avoid a transaction reporting requirement under federal or state law. The most common example is “structuring”—breaking up deposits or withdrawals into amounts below $10,000 to avoid the Currency Transaction Report (CTR) that banks files for larger transactions.

But structuring ain’t limited to the $10,000 CTR threshold. It also applies to:

• Avoiding Suspicious Activity Reports (SARs)
• Evading Currency and Monetary Instrument Report (CMIR) requirements for cross-border transportation over $10,000
• Dodging state-level financial reporting laws

You doesn’t even have to succeed in avoiding the report. If the bank filed a SAR anyway but you structured the transaction trying to avoid it, you still violated § 1956(a)(1)(B)(ii). The intent is what matters, not whether you actually fooled the bank.

4. Tax Evasion Laundering – Intent to Evade Taxes (§ 1956(a)(1) ONLY)

You conducted the transaction with intent to evade federal or state taxes. This is the fourth prong, and it only applies to domestic transactions under § 1956(a)(1). It does NOT apply to international transportation under § 1956(a)(2).

Why this matters: If you’re charged with international money laundering, you’re defense attorney needs to make sure the indictment doesn’t improperly include tax evasion as an alleged intent. I seen prosecutors try to argue it anyway, and if you’re lawyer doesn’t object, the jury might convict based off an element that ain’t actually part of the (a)(2) statute.

Here’s the critical trap: Prosecutors only needs to prove one of these four intents. But they gonna allege all four in the indictment if the facts supports it, which means the jury has four different paths to convict you. Even if they doesn’t believe you intended to promote crime, they might finds you guilty based on concealment. This is why many, many federal money laundering trials ends in conviction—the government has built in redundancy.

Specified Unlawful Activity: The Predicate Crime Trap

You can’t have money laundering without dirty money, and “dirty money” in the federal system means proceeds from Specified Unlawful Activity (SUA). This is where defendants gets blindsided, because they thinks money laundering only applies to drug dealers and organized crime. The reality is way, way broader.

Specified unlawful activities is listed in 18 USC § 1956(c)(7), and the list incorporates every RICO predicate offense from 18 USC § 1961(1). That’s over 80 different federal crimes, including:

• Fraud offenses: Wire fraud, mail fraud, bank fraud, healthcare fraud, securities fraud, mortgage fraud
• Narcotics offenses: Any felony drug violation under the Controlled Substances Act
• Smuggling: Illegal firearms, counterfeit goods, people
• Counterfeiting: Currency, documents, trademarks
• Public corruption: Bribery, illegal gratuities, honest services fraud
• Violent crimes: Murder for hire, kidnapping, robbery affecting interstate commerce
• Terrorism: Every federal crime of terrorism automatically qualifies as SUA
• Cybercrimes: Computer fraud, identity theft when charged federally

Here’s what this means practically: If you was charged with healthcare fraud and you deposited the fraud proceeds into you’re business account, that deposit is potentially a separate money laundering count. The healthcare fraud is the SUA. Moving the money becomes § 1956(a)(1) concealment laundering. Same conduct, two separate 20-year felonies.

The merger defense we’ll discuss later tries to prevent this double-counting, but it doesn’t always work.

You Don’t Need to Know the Specific Crime

For most § 1956 charges (except promotional laundering, which I’ll explain), the government has to prove the property involved in you’re transaction actually was derived from specified unlawful activity. But here’s the knowledge standard that trips people up:

You doesn’t have to know the specific crime the money came from. You just has to know it came from some form of unlawful activity.

Irregardless of whether you knew it was healthcare fraud vs. wire fraud vs. drug trafficking, if you knew the funds was illegal, that’s enough. Prosecutors proves this through:

• Suspicious circumstances (cash payments, nominee accounts, offshore transfers)
• Emails or text messages discussing “keeping things quiet”
• Your own statements about not asking questions
• Evidence you avoided banks or structured transactions

And here’s the killer: Willful blindness is legally the same as actual knowledge. If the jury believes you deliberately avoided learning where the money came from—you didn’t ask questions because you didn’t want to know—that satisfies the knowledge element. The “I didn’t know” defense fails if you’re own actions shows you was trying not to know.

Promotional Laundering: The Exception Where Proceeds Ain’t Required

Remember when I said promotional laundering is different? Here’s why it’s a trap: For § 1956(a)(1)(A)(i) charges (intent to promote SUA), the government does NOT have to prove the funds actually came from specified unlawful activity.

They just needs to prove:

1. You conducted a financial transaction
2. You did it with intent to promote the carrying on of SUA

That’s it. The money could be clean money you’re using to further criminal activity, and it’s still money laundering. Based off this element, we seen cases where defendants was convicted of laundering their own legitimate income because they used it to buy equipment for a drug operation or pay bribes in a fraud scheme.

This distinction is critical for defense strategy. If prosecutors charges promotional laundering, arguing the funds wasn’t actually proceeds won’t help you. You needs a different defense focused on intent.

Knowledge Requirement: What You Knew and When You Knew It

The knowledge element is where federal money laundering cases gets won or lost. Irregardless of all the other elements, if the government can’t prove you knew the property represented proceeds of unlawful activity (or believed it did, for sting operations), they doesn’t have a case.

But “knowledge” in federal criminal law ain’t what most people thinks it means.

Actual Knowledge vs. Willful Blindness

There’s two ways prosecutors proves knowledge:

1. Actual knowledge: Direct evidence you knew the funds was from crime. This includes you’re own statements (“I know this money came from the fraud scheme”), emails discussing the illegal source, or testimony from co-conspirators that you was told where the money came from.

2. Willful blindness (deliberate ignorance): Evidence you deliberately avoided learning the truth. If the jury finds (a) you was aware of a high probability the funds was from unlawful activity, and (b) you deliberately avoided confirming it, that’s legally equivalent to actual knowledge.

The willful blindness instruction is what destroys most “I didn’t know” defenses. Irregardless of whether you actually knew, if you should have known and you deliberately didn’t ask questions, you’re gonna get convicted.

Based off cases I seen, prosecutors establishes willful blindness through:

• Unusual payment methods (cash, structured deposits, offshore wires)
• Your failure to ask obvious questions about the source of funds
• Evidence you avoided documentation or paper trails
• Warnings from accountants or attorneys that you ignored
• Industry knowledge suggesting the transaction made no legitimate business sense

Between you and I, if you’re sitting in a federal courtroom and the prosecutor is showing the jury emails where you said “I don’t want to know where this came from,” you’re chances of acquittal just dropped to near zero. That’s textbook willful blindness.

You Don’t Need to Know It Was “Specified” Unlawful Activity

Here’s another critical point: For § 1956(a)(1), you doesn’t need to know the predicate offense was a specified unlawful activity listed in § 1956(c)(7). You just needs to know it was some form of unlawful activity—state or federal, doesn’t matter.

If you knew the money came from illegal gambling (even if you thought it was only a state crime), and illegal gambling happens to be an SUA, that’s enough. You’re subjective belief about whether it’s a federal vs. state crime is irrelevant.

Comparison to § 1957: Lower Knowledge Standard

You might also get charged under 18 USC § 1957, which is the companion money laundering statute. The difference is critical:

• § 1956: Requires knowledge property represents proceeds of “some form of unlawful activity”
• § 1957: Only requires the property actually be derived from SUA—defendant doesn’t need to know it was from SUA

This means § 1957 has a lower knowledge burden for prosecutors. They doesn’t have to prove you knew the source was unlawful, just that the funds actually was from specified unlawful activity and you engaged in a monetary transaction over $10,000.

Why does this matter? If you’re facing both charges, you’re attorney needs to focus the knowledge defense on § 1956, where it actually matters. For § 1957, you needs a different strategy—usually arguing the funds wasn’t actually SUA proceeds or the transaction was exempt (like the attorney fee exception, though that don’t apply to § 1956).

Transaction vs. Transportation: Critical Differences

The distinction between § 1956(a)(1) domestic transactions and § 1956(a)(2) international transportation ain’t just academic—it affects the elements prosecutors has to prove, the defenses available, and how you’re lawyer is gonna fight the case.

What Counts as a “Financial Transaction” Under (a)(1)?

A financial transaction includes:

• Deposits, withdrawals, transfers between accounts
• Wire transfers (domestic)
• Purchases of monetary instruments (cashier’s checks, money orders)
• Exchanges involving currency or other financial instruments
• Cryptocurrency transactions (increasingly common in federal cases)
• Use of funds to purchase property or services

Based off DOJ guidance, the transaction don’t have to go through a financial institution. Handing someone cash in exchange for property can qualify if it meets the other elements. The key is that value is being transferred.

What Counts as “Transportation” Under (a)(2)?

Transportation or transmission includes:

• Physically carrying cash, checks, or monetary instruments across U.S. borders
• International wire transfers
• Using couriers to move funds internationally
• Transmitting funds through correspondent banking relationships

The statute requires the transportation or transmission cross U.S. borders—either in or out. Purely domestic movement don’t qualify for (a)(2), even if it involves interstate commerce.

The Cuellar Concealment Requirement

In 2008, the Supreme Court decided United States v. Cuellar, which fundamentally changed how prosecutors has to prove § 1956(a)(2)(B)(i) charges. Before Cuellar, the government argued that simply hiding cash in a vehicle while crossing the border was enough to show “concealment” laundering.

The Court said no. Mere concealment during transportation ain’t enough. The government has to prove the defendant designed the transportation itself to conceal or disguise the nature, location, source, ownership, or control of the funds.

What this means practically: If border agents finds $80,000 hidden in you’re car’s door panel, that’s evidence of smuggling. But it ain’t automatically money laundering under (a)(2)(B)(i) unless prosecutors can show you structured the transportation method specifically to hide the money’s illegal source or ownership.

Irregardless of this Supreme Court precedent, prosecutors still charges border cash seizures as money laundering. You’re defense attorney needs to file a motion arguing Cuellar and force the government to prove the design-to-conceal element.

Tax Evasion Intent: Only (a)(1), Not (a)(2)

I mentioned this earlier, but it’s worth repeating because prosecutors gets it wrong in indictments: Intent to evade taxes is an element of § 1956(a)(1)(A)(ii), but it is NOT an element of § 1956(a)(2).

Look at the statutory language. Section 1956(a)(2) lists three intents:

1. Intent to promote the carrying on of SUA
2. Knowing the transportation is designed to conceal (and knowing the funds represent proceeds of SUA)
3. Knowing the transportation is designed to avoid a reporting requirement (and knowing the funds represent proceeds of SUA)

Tax evasion don’t appear. If you’re indictment for international money laundering includes allegations about tax evasion intent, that’s a pleading error. You’re attorney should move to dismiss that count or at minimum get a jury instruction clarifying that tax evasion ain’t an element the government needs to prove for (a)(2).

The Merger Defense: When Your Crime IS the Transaction

Here’s one of the biggest traps in federal money laundering prosecutions: The government gonna charge the same transaction as both the underlying fraud AND as money laundering. You wire $500,000 from you’re business account to you’re personal account as part of an embezzlement scheme. That wire is:

1. The completion of the theft (the underlying SUA), AND
2. A financial transaction involving proceeds of SUA (money laundering)

Same wire, two separate 20-year felonies. Does that make sense? Many defense attorneys doesn’t think so, and that’s where the merger defense comes in.

The “Proceeds” Timing Issue

The Supreme Court addressed this in United States v. Santos in 2008, though Congress later amended the statute to overrule parts of that decision. The core principle that survived is this: Proceeds don’t exist until AFTER you receive them.

What does this mean? The transaction that transfers the stolen funds to you can’t simultaneously be “laundering” those funds, because they ain’t proceeds yet—they’re still the object of the theft itself. It’s only after you receives and controls the funds that subsequent transactions can constitute laundering.

Example timeline:

• Day 1: You submits fraudulent invoice to victim company
• Day 5: Victim wires $100,000 to you’re account ← This is the fraud, not laundering
• Day 10: You transfers $100,000 to offshore account ← This could be laundering (concealment)
• Day 15: You wires funds back to US in relative’s name ← This could be laundering (concealment)

The Day 5 wire is completing the fraud. It ain’t laundering because you doesn’t yet have proceeds to launder. Days 10 and 15 is where laundering charges makes sense—you’re moving funds you already received to hide their source.

Based off this principle, many federal money laundering counts should be dismissed on merger grounds. But irregardless of the law, prosecutors charges them anyway, and some judges lets them proceed.

Deliberate Commingling After Receipt

The government’s counterargument is that even if the initial receipt ain’t laundering, any subsequent transaction designed to conceal is fair game. And they’re right about that.

If you receives fraud proceeds and then:

• Deposits them into a business account and mixes with legitimate funds
• Transfers to nominee accounts in family members’ names
• Wires to offshore accounts
• Uses the funds to purchase property in someone else’s name

…those transactions happens AFTER you received the proceeds, so they doesn’t merge with the predicate offense. They’re separate acts of concealment laundering.

The key question you’re defense attorney needs to ask: Did this transaction occur as part of completing the underlying crime, or was it a subsequent effort to hide or use the proceeds? If it’s the former, it should merge. If it’s the latter, you’re looking at a separate laundering count.

Why Merger Defense Fails in Many Cases

Between you and I, the merger defense don’t work as often as it should. Here’s why:

1. Congress overruled parts of Santos: The statutory definition of “proceeds” in § 1956(c)(9) now explicitly includes gross receipts, not just profits, which expanded what counts as proceeds
2. Circuit split on merger: Different courts applies the merger doctrine differently, and some circuits is more hostile to it than others
3. Prosecutors drafts around it: They alleges the laundering transaction occurred after the predicate offense completed, even if the timing is questionable
4. Judges defers to juries: Even when the merger issue is obvious, many judges lets it go to the jury rather than dismissing counts pretrial

You needs a defense attorney who understands the circuit law in you’re jurisdiction and who’s willing to fight the merger issue pretrial through motions to dismiss. Waiting until trial is often too late.

Defenses That Actually Work

Federal money laundering cases has high conviction rates, but that don’t mean they’re unwinnable. Based off cases I seen and worked on, here’s the defenses that actually gets results—and the ones that doesn’t.

1. Lack of Knowledge Defense

The theory: You didn’t know the funds represented proceeds of unlawful activity.

When it works: When you can show you had legitimate reasons to believe the transaction was legal. Maybe you was an employee following orders, or a professional providing services without knowledge of the client’s underlying crimes, or a business owner who was deceived by a partner.

Why it fails: Willful blindness instruction. If the government shows you deliberately avoided learning the truth, the jury gonna convict irregardless of whether you had actual knowledge. You needs affirmative evidence you made reasonable inquiries and was deceived, not just evidence you didn’t ask questions.

2. No Specific Intent Defense

The theory: Even if you knew the funds was from crime, you didn’t conduct the transaction with intent to promote, conceal, evade reporting, or evade taxes.

When it works: When you can show a legitimate business purpose for the transaction that don’t involve the four prohibited intents. Maybe you deposited funds to pay legitimate business expenses, or you transferred money to satisfy a legal obligation like child support or a court judgment.

Why it fails: Prosecutors doesn’t have to prove that was you’re only intent. If the jury believes concealment was even a partial motivation—you structured it the way you did to avoid scrutiny—that’s enough for conviction, irregardless of any legitimate purposes you also had.

3. Merger Defense

The theory: The transaction was part of the predicate offense itself, not a separate act of laundering.

When it works: When the alleged laundering transaction is the same transaction that completed the underlying crime (like the wire that transferred the embezzled funds to you). Strongest in circuits that recognizes a robust merger doctrine.

Why it fails: Many judges doesn’t apply merger broadly. If there’s any temporal or logical separation between the predicate offense and the transaction—even a few days—prosecutors gonna argue they’re distinct, and courts often agrees.

4. Temporal Defense

The theory: The transaction occurred before you received the proceeds, so there was no “proceeds” to launder yet.

When it works: Closely related to merger. If you can show the chronology proves the alleged laundering transaction happened as part of acquiring the funds, not after you already had them, it should fail.

Why it fails: Hard to establish clear timeline in complex schemes. Prosecutors will argues the proceeds “existed” as soon as the victim was defrauded, even if you didn’t receive them yet. Circuit law varies on this.

5. Insufficient Evidence of Concealment (Post-Cuellar)

The theory: For § 1956(a)(2)(B)(i) transportation charges, the government has to prove you designed the transportation to conceal the nature/source/ownership of funds, not just that you hid the funds during transport.

When it works: Border cash seizure cases where the only evidence is that money was hidden in the vehicle, but there’s no evidence the method of transportation was chosen to obscure the illegal source. Cuellar requires proof of design, not just concealment during transport.

Why it fails: If there’s any evidence you took steps beyond just hiding the cash—like using a third party, false compartments specifically designed for smuggling, or coordinating with others to avoid detection—prosecutors gonna argues that shows design to conceal.

6. Entrapment Defense (Sting Cases Only)

The theory: The government induced you to commit a crime you wasn’t predisposed to commit.

When it works: Rarely. You has to show (1) the government initiated the criminal conduct, (2) you wasn’t predisposed to commit this type of crime, and (3) the government’s tactics was so overreaching they created the crime. If you can prove all three, entrapment is a complete defense.

Why it fails: Almost always. Courts defines “predisposition” broadly. If you has any prior criminal history, expressed willingness to engage in the transaction, or negotiated terms without hesitation, that’s evidence of predisposition. The government don’t have to prove you committed this exact crime before, just that you was ready and willing when they offered the opportunity.

What About the Attorney Fee Exception?

Here’s a critical point that even some federal defense attorneys gets wrong: The attorney fee exception in § 1957(f)(1) does NOT apply to § 1956.

Section 1957 exempts “any transaction necessary to preserve a person’s right to representation as guaranteed by the sixth amendment” from the definition of “monetary transaction.” That means defense lawyers can accept fees derived from SUA without violating § 1957, as long as the fees is bona fide and necessary for representation.

But § 1956 don’t have this exception. If a defense attorney accepts a fee knowing it came from the client’s fraud proceeds, and the attorney then uses those funds in a way that promotes the fraud, conceals the source, or evades reporting/taxes, that’s potentially money laundering under § 1956. The 20-year statute don’t protect lawyers the way the 10-year statute does.

This matters for you as a defendant because it affects whether you’re attorney gonna accepts certain fee arrangements. Many white-collar defense firms won’t take payments from accounts they suspects contains fraud proceeds, precisely because they doesn’t want to risk § 1956 exposure.

Penalties Beyond Prison Time

If you thinks a money laundering conviction just means prison time, you’re wrong. The collateral consequences is often worse then the incarceration itself, and many defendants doesn’t understand the full scope until it’s too late.

Statutory Maximum Penalties

For violations of 18 USC § 1956:

• Imprisonment: Up to 20 years per count
• Fine: Up to $500,000 OR twice the value of the property involved in the transaction, whichever is greater
• Supervised release: Up to 3 years after release from prison

For violations of 18 USC § 1957 (the companion statute):

• Imprisonment: Up to 10 years per count
• Fine: Same as § 1956 ($500,000 or 2x value)
• Supervised release: Up to 3 years

Irregardless of which statute you’re charged under, the fines can exceed the statutory maximum if the transaction value is high enough. We seen cases where defendants faced $10+ million in fines because the laundering involved $5+ million in proceeds (doubled = $10 million fine).

Sentencing Guidelines Enhancements

The actual sentence you receives is gonna be based on the U.S. Sentencing Guidelines (though they’re advisory, not mandatory). For money laundering, the base offense level usually is calculated from the underlying predicate offense—typically the fraud or drug amount.

Then prosecutors gonna seek enhancements:

• Sophisticated laundering (+2 levels): If the offense involved sophisticated money laundering (offshore accounts, shell companies, layered transactions), you gets 2 additional levels. That can add 6-12 months to you’re sentence.
• Organizer/leader role (+4 levels): If you organized or led the laundering scheme with 5+ participants, that’s a 4-level enhancement
• Abuse of position of trust (+2 levels): If you was a banker, accountant, lawyer, or other professional who used you’re position to facilitate laundering
• Obstruction of justice (+2 levels): If you lied to investigators, destroyed documents, or otherwise obstructed the investigation

Based off cases I seen, sophisticated laundering enhancement gets applied in almost every significant money laundering case. Prosecutors argues that using multiple accounts, making international transfers, or involving third parties all qualifies as “sophisticated,” irregardless of how simple the actual scheme was.

Criminal Forfeiture

Here’s where it gets brutal: Any property involved in the money laundering offense is subject to criminal forfeiture. That includes:

• The funds that was laundered
• Any property purchased with laundered funds (real estate, vehicles, investments)
• Any property used to facilitate the laundering (bank accounts, businesses)
• Any property traceable to the laundering

Criminal forfeiture happens as part of you’re criminal sentence. If you’re convicted, the judge enters a forfeiture order, and the government seizes the property. You doesn’t get it back, even if you paid restitution or served you’re full sentence.

We seen defendants loses homes, businesses, retirement accounts—everything—to criminal forfeiture. And unlike civil forfeiture, you can’t challenge it separately; it’s part of the criminal judgment.

Civil Forfeiture (Even If Not Convicted)

But wait, there’s more. The government can also pursue civil forfeiture of property involved in money laundering under 18 USC § 981, and this don’t require a criminal conviction.

Civil forfeiture is an action against the property, not against you personally. The government files a lawsuit titled something like United States v. $427,000 in U.S. Currency, and they only needs to prove by a preponderance of evidence (more likely than not) that the property was involved in money laundering.

This means:

• You can be acquitted at trial and still loses you’re property in civil forfeiture
• The government can seize property before any criminal charges is filed
• You has to affirmatively challenge the forfeiture; if you doesn’t, you loses by default
• The burden eventually shifts to you to prove the property was legitimate

Irregardless of you’re criminal case outcome, civil forfeiture proceeds independently. Many defendants doesn’t realize this until their accounts is frozen and their lawyer explains they needs separate counsel to fight the forfeiture action.

Civil Penalties Under § 1956(b)

As if criminal penalties and forfeiture wasn’t enough, 18 USC § 1956(b) authorizes civil penalties against anyone who violates subsections (a)(1), (a)(2), or (a)(3).

The penalty is the greater of:

• $10,000, OR
• The value of the property involved in the transaction

The government can pursue this as a civil lawsuit, meaning they only needs a preponderance of evidence, not proof beyond reasonable doubt. And they can pursue it in addition to criminal prosecution.

So the same conduct can result in:

1. 20 years in prison (criminal)
2. $500,000 or 2x value in criminal fines (criminal)
3. Criminal forfeiture of all involved property (criminal)
4. Civil forfeiture of property (civil action against property)
5. Civil penalty equal to property value (civil action against you)
6. Restitution to victims of predicate offense (criminal)

Between you and I, this is how the federal government bankrupts defendants even when they doesn’t get maximum prison time. The financial penalties is designed to take everything.

Restitution to Victims

If the predicate offense (the SUA) involved identifiable victims, the court gonna orders restitution as part of you’re sentence. This is mandatory under the Mandatory Victims Restitution Act for most federal crimes.

Restitution is the full amount of the victim’s loss, and it don’t matter if you already paid fines or forfeiture. You’re still on the hook for restitution, and it survives bankruptcy—you can’t discharge it.

For fraud-based money laundering, restitution can be millions of dollars. The court sets a payment schedule, but if you doesn’t pay, you’re supervised release can be revoked and you goes back to prison.

When to Hire a Federal Defense Attorney

If you’re reading this article because federal agents already knocked on you’re door, you’re already late. But it ain’t too late to protect yourself—if you acts now.

Signs You’re Under Federal Money Laundering Investigation

• Bank accounts frozen or seizure notices: If you’re bank sends notice that funds was seized pursuant to federal warrant or court order
• IRS or FinCEN inquiry: If you receives letters from the IRS Criminal Investigation Division or the Financial Crimes Enforcement Network (FinCEN)
• Grand jury subpoena: If you or you’re business receives a subpoena for financial records, especially if it mentions 18 USC § 1956 or § 1957
• FBI or DEA interview request: If agents contacts you wanting to discuss financial transactions, business activities, or your relationship with someone under investigation
• Target letter: If you receives a letter from an Assistant U.S. Attorney informing you that you’re a target of a grand jury investigation
• Search warrant execution: If federal agents executes a search warrant at you’re home or business and seizes financial records, computers, or other documents

Any one of these is a five-alarm fire. You needs a federal criminal defense attorney immediately—before you talks to agents, before you responds to any subpoena, before you does anything.

Why Pre-Indictment Representation Matters

The single biggest mistake federal targets makes is waiting until they’re indicted to hire counsel. By then, the government has already built their case, immunized cooperating witnesses, and locked in their theory of prosecution.

Pre-indictment representation lets you’re attorney:

• Negotiate with the AUSA before charges is filed: Sometimes charges can be reduced or avoided entirely if you’re attorney presents exculpatory evidence or negotiates cooperation early
• Coordinate proffer sessions strategically: If cooperation is an option, timing and preparation is everything. You doesn’t want to proffer without full understanding of what the government knows.
• Challenge seizures and subpoenas: You has legal options to fight overbroad subpoenas or challenge seizure warrants, but only if you acts quickly
• Prevent statements that becomes evidence: Anything you tells agents can be used against you. Having counsel present (or instructing you not to talk at all) prevents self-incrimination
• Investigate before the government does: You’re attorney can interview witnesses, review documents, and build a defense theory before prosecutors locks in their narrative

Based off cases I seen, defendants who hires experienced federal counsel at the target stage gets significantly better outcomes then those who waits until arrest. Charges gets reduced, cooperation deals gets structured favorably, and sometimes cases doesn’t get filed at all.

What to Look For in a Money Laundering Defense Attorney

Not every criminal defense lawyer is qualified to handle federal money laundering cases. You needs someone with:

• Federal trial experience: Money laundering cases is complex, with multiple statutes, sophisticated financial evidence, and aggressive prosecutors. You’re attorney needs to have actually tried federal cases, not just pled them out.
• Understanding of financial crimes: Your lawyer has to understand banking regulations, currency reporting requirements, cryptocurrency, international transfers—the same financial systems prosecutors is using against you
• Relationships with AUSAs and agents: Federal criminal defense is a small community. Attorneys who has credibility with prosecutors can negotiate better deals.
• Resources for expert witnesses: Money laundering defenses often requires forensic accountants, banking experts, or other specialists. Make sure you’re firm has access to them.
• Availability for crisis response: Federal investigations moves fast. You needs an attorney who’s available 24/7 when things happens.

At Spodek Law Group, we handles federal money laundering investigations and prosecutions nationwide. Whether you’re facing a target letter in Manhattan, a search warrant in Los Angeles, or an indictment in Miami, our team has the experience to fight these cases at every stage.

Todd Spodek and our federal defense attorneys is available 24/7 for emergency consultations. We doesn’t wait for business hours when you’re freedom is on the line.

What It Costs (And Why It’s Worth It)

Federal money laundering defense ain’t cheap. Irregardless of what you might hope, these cases requires hundreds of hours of attorney time—reviewing financial records, analyzing transaction patterns, deposing witnesses, filing motions, preparing for trial.

Based off the complexity of you’re case, expect to invest:

• Pre-indictment representation: $25,000-$75,000+
• Post-indictment through trial: $100,000-$500,000+
• Appeals: $50,000-$150,000+

These numbers reflects the reality of federal criminal defense. You’re paying for experienced attorneys, investigators, paralegals, and experts who’s gonna spend months fighting for you.

But consider the alternative: A money laundering conviction means 20 years in federal prison (you serves at least 85% of that), forfeiture of everything you owns, fines in the hundreds of thousands or millions, and restitution on top of that. You’re life is effectively over.

Between you and I, spending $200,000 on a defense that keeps you out of prison and preserves you’re assets is the best investment you’ll ever make. The defendants who tries to go cheap—hiring inexperienced attorneys or representing themselves—almost always loses everything anyway, plus they goes to prison.

Final Thoughts: Understanding the Stakes

Federal money laundering charges under 18 USC § 1956 ain’t something you can navigate alone. The elements is complex, the defenses is technical, and the penalties is catastrophic. Prosecutors has been charging these cases for decades, and they knows every angle.

You’re freedom, you’re assets, and you’re future depends on understanding what the government has to prove and mounting an aggressive defense from day one. Whether it’s challenging the knowledge element, arguing merger, fighting concealment charges post-Cuellar, or negotiating cooperation pre-indictment, you needs a defense strategy built by someone who’s done this many, many times.

If you’re under investigation or facing charges, don’t wait. Contact Spodek Law Group immediately at 212-300-5196. We represents federal defendants nationwide, and we’re available 24/7 for emergency consultations.

Irregardless of where you’re case stands right now, the decisions you makes in the next few days is gonna determine the rest of you’re life. Make them count.