A federal money laundering charge can be complicated and stressful. Federal money laundering law covers financial transactions involving money that comes from specified criminal activity, when the transaction is done for certain prohibited purposes or involves more than $10,000. The penalties include prison terms of up to 20 years and substantial fines, so it is important to speak with an attorney early.
At Touma Law, our attorneys represent people facing federal money laundering charges. Our federal defense attorneys can review the details of your case, examine the evidence, and discuss your options. General information on this page is not legal advice. A licensed South Carolina attorney at the firm must review the facts of your case before you rely on it.
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Understanding Federal Money Laundering Charges
Federal money laundering laws are aimed at the practice of disguising the origins of money obtained through criminal activity. The two main statutes are 18 U.S.C. § 1956 and 18 U.S.C. § 1957, which were added by the Money Laundering Control Act of 1986 as part of the Anti-Drug Abuse Act of 1986.
Under § 1956(a)(1), a person is guilty if the person knows the property involved in a financial transaction represents the proceeds of some form of unlawful activity, conducts or tries to conduct a transaction that in fact involves the proceeds of “specified unlawful activity,” and does so for one of the listed purposes. Those purposes include:
- intending to promote the carrying on of specified unlawful activity;
- intending to engage in certain tax offenses under the Internal Revenue Code;
- knowing the transaction is designed in whole or in part to conceal or disguise the nature, location, source, ownership, or control of the proceeds; or
- knowing the transaction is designed to avoid a transaction reporting requirement under state or federal law.
Section 1957 is different. It covers knowingly engaging, or attempting to engage, in a monetary transaction in criminally derived property of a value greater than $10,000 that is derived from specified unlawful activity. The government does not have to prove that the person knew the underlying offense was a specified unlawful activity (§ 1957(c)).
A person who conspires to commit an offense under § 1956 or § 1957 is subject to the same penalties as the offense that was the object of the conspiracy (18 U.S.C. § 1956(h)). The government does not have to prove an overt act to convict for a § 1956(h) conspiracy (Whitfield v. United States, 543 U.S. 209 (2005)).
Money laundering is a felony. In addition to criminal penalties, the government may seek forfeiture of property involved in the offense. Federal money laundering laws apply to a wide range of transactions, including those involving banks, wire transfers, currency exchanges, and other financial institutions. Federal agencies such as the Internal Revenue Service, the Federal Bureau of Investigation, and the Drug Enforcement Administration may investigate these cases, and federal prosecutors bring the charges.
What Are the Penalties for Money Laundering?
The statutes set these maximum penalties:
- Section 1956: A fine of up to $500,000 or twice the value of the property involved in the transaction, whichever is greater, or imprisonment for up to 20 years, or both (§ 1956(a)(1)).
- Section 1957: A fine under Title 18 or imprisonment for up to 10 years, or both. The court may impose an alternate fine of up to twice the amount of the criminally derived property involved (§ 1957(b)).
- Forfeiture: On conviction under § 1956 or § 1957, the court must order forfeiture of any property involved in the offense, or any property traceable to it (18 U.S.C. § 982(a)(1)).
- Restitution: Where an identifiable victim suffered a financial loss from an offense covered by 18 U.S.C. § 3663A, the court must order restitution to that victim.
- Supervised release: After a prison term, a court can order supervised release with conditions set by the court (18 U.S.C. § 3583).
These are maximums. The actual sentence depends on the Sentencing Guidelines calculation, the factors the court considers under 18 U.S.C. § 3553(a), the amount of money involved, and the role the defendant is found to have played. The fine limits in 18 U.S.C. § 3571 also apply.
A federal money laundering conviction can have lasting effects. A person facing a felony charge should speak with an attorney who can review the specific statute charged.
Evidence Used to Prove Money Laundering
The evidence the government uses varies by case. Common examples include:
- Financial records: Bank statements, wire transfer records, and other documents showing the movement of funds.
- Witness testimony: Testimony from people who took part in or saw the transactions, such as bank employees or co-defendants.
- Documentary evidence: Contracts, emails, and other writings the government says show the purpose of the transactions.
- Surveillance footage: Video of people the government says were exchanging money or conducting suspicious transactions.
- Forensic accounting analysis: Examination of financial records by forensic accountants to look for patterns the government says point to laundering.
- Undercover operations: Evidence from sting operations. Under § 1956(a)(3), a transaction involving property that a law enforcement officer represented to be criminal proceeds can be charged even though the property was not in fact criminal proceeds.
- Statements: Statements by the defendant or co-defendants that the government says show knowledge of the scheme.
The government must prove each element of the charged offense beyond a reasonable doubt, including that the defendant acted knowingly. A defense attorney can challenge whether the evidence is enough and whether it can be used at trial.
How Can You Defend Against Money Laundering Charges?
Defense strategies depend on the facts of the case and the statute charged. Common examples include:
Lack of Intent or Knowledge
Under § 1956(a)(1), the government must prove the defendant knew the property involved represented proceeds of some form of unlawful activity, and that the defendant acted for one of the listed purposes. A defense attorney may argue that the defendant did not know the funds came from criminal activity or did not intend to conceal anything. That can involve evidence of the defendant’s lack of involvement in or awareness of the underlying offense.
Lack of Sufficient Evidence
A defense attorney may challenge the government’s evidence and argue that it does not establish every element beyond a reasonable doubt. That can involve reviewing financial records, transaction data, and other evidence for weaknesses or inconsistencies.
Constitutional Violations
An attorney may ask the court to suppress evidence obtained through illegal searches or seizures in violation of the Fourth Amendment. If law enforcement obtained evidence unlawfully, such as through a warrantless search or a wiretap without proper authorization, the court may exclude it.
Entrapment
In some cases a defendant may argue that law enforcement induced them to engage in conduct they would not otherwise have engaged in. A defense attorney can present evidence to support an entrapment claim.
Questions About the Reach of the Statute
Federal money laundering law has limits. For example, conduct outside the United States is covered only if it meets the conditions in § 1956(f): the conduct is by a United States citizen or, for a non-citizen, occurs in part in the United States, and the transactions involve funds or monetary instruments of a value exceeding $10,000. An attorney can examine whether the government can reach the conduct charged.
These are examples only. Which strategy fits depends on the unique facts and circumstances of each case, so it is important to work with an attorney to review the specific situation.
Can You Be Charged With Money Laundering if You Didn’t Know the Funds Were From Illegal Activity?
Prosecutors can file a charge based on what they believe the evidence shows, but a conviction under § 1956 requires proof that the person knew the property represented proceeds of some form of unlawful activity. The statute defines that knowledge to mean the person knew the property came from some form, though not necessarily which form, of activity that constitutes a felony under state, federal, or foreign law (§ 1956(c)(1)). So a person does not have to know the specific crime that produced the money, but the government does have to prove knowledge that the money came from criminal activity.
Section 1957 also requires that the person act knowingly. It does not require proof that the person knew the underlying offense was a “specified unlawful activity” (§ 1957(c)).
The government may try to prove knowledge from circumstances, such as how the transactions were structured or what the defendant said. Whether the evidence in a particular case is enough is a question an attorney can examine.
Call Touma Law if You Need Help With a Money Laundering Charge
Facing a federal money laundering charge can be overwhelming, but you do not have to go through it alone. Our attorneys represent people accused of federal money laundering.
Reach out to our legal team today to schedule a consultation. A licensed South Carolina attorney at the firm must review the facts of your case before any advice is given about it.
