Criminal Defense Lawyers

New York Penal Law § 470.10: Money Laundering in the Third Degree

Last Updated on: 1st June 2025, 04:23 am

What Makes This Different from Street Crimes Most People Know

Money laundering sounds like something from a mob movie – guys with briefcases full of cash meeting in dark warehouses. But here’s what’s really happening in New York courtrooms today. The law has evolved way beyond the old RICO cases from the 1980s. Today’s money laundering prosecutions hit regular business owners, professionals, even people who thought they were just helping out a friend. New York Penal Law § 470.10 defines third-degree money laundering as knowingly conducting financial transactions with proceeds from criminal activity – when those proceeds exceed $5,000.

That threshold is lower than most people realize.

In 2023, the Manhattan DA’s office alone secured convictions in 78% of money laundering cases that went to trial. Higher than assault cases, higher than drug possession cases. Why? Financial crimes leave paper trails. Every bank transfer, every deposit, every withdrawal creates evidence. Prosecutors love these cases because they can build them methodically, document by document. They don’t need cooperating witnesses who might change their stories. They have bank records, and bank records don’t lie — or at least that’s what they’ll tell the jury.

The Anatomy of § 470.10 – Breaking Down Each Element

The statute seems straightforward enough, but each word carries weight that can mean the difference between freedom and a felony conviction. First, there’s the “criminal conduct” requirement. This doesn’t mean you had to commit the underlying crime yourself. It means the money came from some criminal activity – drug sales, fraud, theft, illegal gambling, whatever. The prosecution doesn’t even need to prove exactly which crime generated the money. They just need to show it came from something illegal.

$5,000. That’s it.

Multiple smaller transactions add up. You deposit $2,000 one week, $3,500 the next week, thinking you’re staying under some radar. Wrong. The prosecution will add those up, and boom – you’ve hit the threshold. The intent element is where things get really tricky. The law says you must act “knowing” the money represents proceeds of criminal conduct. But knowing doesn’t mean the prosecutor needs a recording of you saying “this is drug money.” Courts have ruled that willful blindness — deliberately avoiding knowledge – counts as knowing. If a reasonable person would have suspected something was off, and you didn’t ask questions, that can be enough.

How Regular Business Transactions Become Criminal Cases

Last year in Brooklyn, a construction company owner got indicted for money laundering. He wasn’t running drugs or stealing cars. His crime? He accepted cash payments from a subcontractor who was evading taxes. The owner claimed he didn’t know about the tax evasion – he just thought the guy preferred cash like a lot of contractors do. Didn’t matter. Prosecutors claimed he should have known something was wrong when the subcontractor insisted on payments under $10,000 to avoid bank reporting requirements. The jury convicted him.

He’s doing 2-4 years upstate right now.

Restaurant owners face this nightmare regularly. You run a cash-heavy business, you make regular deposits, everything seems normal. Then one day the FBI shows up. Turns out your produce supplier was smuggling drugs in vegetable trucks. Some of the money he used to buy from wholesalers was drug money. When he paid you for meals, catering, whatever — that money was tainted. Now you’re depositing drug proceeds. The feds traced $50,000 in payments to your restaurant over two years. Even if you had no idea about the drugs, you’re now fighting a money laundering charge because you should have suspected something when the guy always paid in cash, always exact amounts, always crisp bills.

Digital Footprints That Build Prosecutors’ Cases

Banks use sophisticated algorithms now that flag suspicious patterns:

Multiple deposits just under $10,000? Flagged.
Sudden increase in cash deposits? Flagged.
Wire transfers to certain countries? Definitely flagged.
These Suspicious Activity Reports (SARs) go straight to FinCEN and law enforcement. You don’t know a SAR was filed – banks are prohibited from telling you. But somewhere in a government database, your financial behavior is being analyzed. One red flag might not trigger an investigation. Multiple flags over time create a pattern.

Text messages and emails become crucial evidence. “Can you handle some cash for me?” seems innocent enough. But in a money laundering trial, that message gets blown up on a screen for the jury. The prosecutor argues it shows consciousness of guilt – why specify cash unless you’re trying to hide something? Your response matters too. If you wrote back “sure, no problem,” that’s one thing. If you wrote “is everything cool with this money?” – well, now the prosecutor argues you suspected something illegal. Even deleted messages aren’t safe. Digital forensics can recover them, and trying to delete evidence becomes its own crime – obstruction of justice.

Defense Strategies That Actually Work in NY Courts

The first line of defense is attacking the predicate crime.

Money laundering requires proceeds from criminal conduct. If the prosecution can’t prove the money was dirty, the whole case collapses. This isn’t easy – courts have ruled the government doesn’t need to prove a specific crime, just criminal activity generally. But skilled defense attorneys can create reasonable doubt. Maybe the money came from gambling winnings. Gambling might violate some regulations, but if it’s not criminal under New York law, it can’t support a money laundering charge. Or maybe it was tax evasion — the prosecution says it’s criminal, but the defense argues the defendant didn’t know about the tax issues. The legitimate business defense requires careful documentation. You need to show normal business practices, proper recordkeeping, standard pricing. If you can demonstrate that you treated these transactions like any other customer, it undermines the prosecution’s claim that you “knew” something was wrong.

But here’s the catch – sloppy recordkeeping gets flipped against you.

Witness credibility becomes crucial when the case relies on cooperating witnesses. These witnesses are often involved in the underlying crimes, testifying in exchange for leniency. Defense attorneys hammer their motivations, prior lies, and deals with the government. Show the jury that the star witness is saying whatever the prosecutor wants to hear to save their own skin. Reasonable doubt creeps in.

The Brutal Mathematics of Sentencing

Third-degree money laundering is a Class D felony in New York. The judge can sentence you to 1-7 years in state prison. But that’s just the starting point. Prior convictions? Enhanced sentencing as a predicate felon. The amount of money involved matters too. Laundering $10,000 might get you probation or a short sentence. Laundering $500,000? The judge sees you as a major player, even if you were just a small cog in someone else’s operation. Federal sentences hit even harder. While NY caps third-degree money laundering at 7 years, federal money laundering under 18 USC 1956 carries up to 20 years. Federal judges must follow sentencing guidelines that calculate punishment based on complex factors — the amount laundered, number of transactions, sophistication of the scheme. A million-dollar money laundering conspiracy in federal court starts at 87-108 months under the guidelines. Before any enhancements for leadership role, obstruction of justice, or using sophisticated means.

The math gets brutal fast.

Collateral Damage Beyond Prison Time

Prison is just the beginning.

Professional licenses evaporate with a money laundering conviction. Lawyers get disbarred. Doctors lose medical licenses. Real estate brokers, insurance agents, financial advisors – all gone. These licensing boards don’t care if you got probation or served minimal time. A felony conviction involving financial crimes equals career death in regulated professions. Even trades like plumbing or electrical work become problematic – many contractors need bonding, and bonding companies won’t touch someone with a money laundering conviction. Asset forfeiture is where the government really twists the knife. Under New York law, any property involved in money laundering is subject to forfeiture. Not just the laundered funds. Your car, if you drove to meet co-conspirators. Your house, if you discussed the scheme there. Your business, if you used it to launder funds. The government can seize these assets through civil forfeiture – they don’t even need to convict you criminally. They just need to show by preponderance of the evidence that the property was connected to money laundering.

For non-citizens? Devastating.

It’s an aggravated felony under immigration law, triggering mandatory deportation. Doesn’t matter if you’re a green card holder who’s been here 20 years with US citizen kids. One money laundering conviction and ICE will be waiting when you finish your sentence.

When Cooperation Becomes Your Best Option

Sometimes the evidence is overwhelming, and fighting means risking decades in prison. When cooperation discussions begin. Prosecutors offer deals to smaller players who can help them climb the ladder to bigger targets. The process usually starts with a proffer session – a meeting where you tell prosecutors everything you know. Your attorney negotiates a “queen for a day” agreement, meaning your statements can’t be used directly against you. These sessions are intense – prosecutors test your honesty, probe for details, check your story against evidence they already have. If prosecutors believe you’re truthful and useful, they might offer a cooperation agreement. You plead guilty, usually to a lesser charge or with a sentencing recommendation. In exchange:

Testify against co-defendants
Wear a wire
Provide documents
Substantial assistance can dramatically reduce sentences. Someone facing 7 years might get probation. Someone facing 20 years might get 5. But cooperation isn’t easy. You’re admitting crimes, possibly revealing more crimes prosecutors didn’t know about. You’re potentially putting yourself in danger. And if prosecutors think you’re lying or holding back, the deal is dead.

Family members often get dragged into money laundering investigations. Spouses who co-signed on bank accounts, adult children who made deposits, siblings who received wire transfers – all become potential defendants. Cooperation agreements sometimes include promises not to prosecute family members, but only if they truly weren’t involved. If your spouse knew about the criminal source of funds, no cooperation deal will protect them.

Prosecutors use this leverage ruthlessly.

Protecting Yourself Starts with Understanding the Stakes

Money laundering charges in New York aren’t just about prison time – they’re about destroying everything you’ve built. Your career, your assets, your immigration status, your family’s future. The law is written broadly, prosecutors interpret it aggressively, and juries tend to convict when they see financial evidence. If you’re under investigation or charged with money laundering under § 470.10, you need attorneys who understand both the legal complexities and the human cost. At Spodek Law Group, we’ve handled money laundering cases from initial investigation through trial and appeal. We know how prosecutors build these cases and where they’re vulnerable. Call us at 888-997-5177 for a consultation about your case.