Federal Money Laundering Charges Under 18 USC 1956 and 1957
So your probably facing money laundering charges and your confused because you thought you were just conducting normal business transactions. Maybe you deposited cash from your business. Maybe you wired money internationally. Or maybe your just accused of handling money that prosecutors claim came from crimes. Look, we get it. Your ABSOLUTELY SHOCKED these are federal crimes. And you should be TERRIFIED! Because 18 USC 1956 carries 20 YEARS in federal prison and prosecutors charge money laundering in almost EVERY financial crime case!
What Is Federal Money Laundering Under 18 USC 1956?
Let me explain the trap prosecutors are using. Section 1956 criminalizes laundering proceeds from over 250 “specified unlawful activities” – incredibly broad statute turning ordinary financial transactions into federal crimes!
The statute has FOUR types of money laundering! Promotional laundering (transactions to promote illegal activity), concealment laundering (hiding source/ownership of proceeds), structuring (avoiding reporting requirements), and tax evasion laundering! Each carries 20 years maximum!
Here’s what’s really scary – don’t need to be convicted of underlying crime to face money laundering charges! Prosecutors charge money laundering even when they can’t prove predicate offense! We’ve seen acquittals on fraud but convictions on laundering same money!
“Specified unlawful activity” includes HUNDREDS of crimes! Most RICO predicates, drug crimes, fraud, bribery, environmental crimes, healthcare fraud, immigration offenses! List keeps expanding! Your “underlying crime” could be something you didn’t know was illegal!
What’s the Difference Between 18 USC 1956 and 1957?
Two money laundering statutes with DIFFERENT elements and penalties!
Section 1956 requires proof of intent to promote or conceal illegal activity – more elements but higher penalties (20 years)! Must show you conducted financial transaction with proceeds from specified unlawful activity AND intended to promote crime or hide proceeds!
Section 1957 is “simpler” but still devastating! Prohibits any monetary transaction over $10,000 involving proceeds from specified unlawful activity – that’s IT! Don’t need to prove promotional or concealment intent!
1957 penalties are “only” 10 years versus 1956’s 20 years! But prosecutors charge BOTH! Same transaction charged under both statutes! Deposit $50,000 in drug proceeds? That’s one 1956 count (concealment) AND one 1957 count (monetary transaction)!
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(212) 300-5196The $10,000 threshold for 1957 is PER TRANSACTION! Make 10 deposits of $15,000? That’s 10 separate counts! Each wire transfer, each check, each withdrawal is separate violation! We’ve seen indictments with 50+ counts from routine banking!
Knowledge requirements differ slightly! 1956 requires knowing property represents proceeds from “some form” of illegal activity! 1957 requires knowing property derived from specified unlawful activity! Subtle distinction but affects defenses!
What Are the Three Stages of Money Laundering?
Classic money laundering has three stages prosecutors look for!
Placement: introducing illicit funds into financial system – cash deposits, purchasing assets, commingling with legitimate funds! This is riskiest stage because large cash transactions trigger reporting!
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Layering: complex series of transactions obscuring money’s origins! Wire transfers through multiple accounts, shell company transactions, international transfers, purchasing and selling assets! More layers = harder to trace!
Integration: laundered money re-enters economy appearing legitimate! Investing in businesses, real estate purchases, luxury goods, “consulting fees,” loans to legitimate entities! By this stage, money looks clean!
Your accountant discovered that a business partner had been funneling proceeds from an illegal gambling operation through your jointly owned restaurant, and now federal prosecutors are charging you under 18 USC 1956 for laundering over $2 million in criminal proceeds. You had no idea the money was dirty — you just thought the restaurant was doing well — but agents seized your business accounts and personal assets last week.
Can I really be convicted of money laundering under 18 USC 1956 if I had no idea the funds came from illegal activity?
Under 18 USC 1956, prosecutors must prove you knew the funds represented proceeds of unlawful activity and that you conducted a financial transaction with intent to promote that activity or conceal its nature. The lack of actual knowledge can be a strong defense, but willful blindness — deliberately avoiding learning the truth — can substitute for knowledge under federal case law. Section 1957 is broader and criminalizes knowingly engaging in monetary transactions over $10,000 derived from specified unlawful activity, even without intent to conceal. We would immediately challenge the government's evidence of your knowledge, move to unfreeze legitimate assets, and build a defense around your good-faith reliance on your partner's representations about the business revenue.
This is general information only. Contact us for advice specific to your situation.
But you DON’T need all three stages for conviction! Single deposit can be money laundering! One wire transfer! Prosecutors argue every financial transaction is potential laundering!
We’ve seen prosecutions for “placement” only – depositing cash into bank! Or “layering” only – moving money between accounts! Don’t need sophisticated scheme – basic banking becomes money laundering if involves crime proceeds!
