NATIONALLY RECOGNIZED FEDERAL LAWYERS
How serious is underground banking
|Thanks for visiting Spodek Law Group – a second-generation law firm managed by Todd Spodek. We have over 40 years of combined experience handling federal criminal cases others won’t touch. Many, many people know us from the Netflix series about our client Anna Delvey, or from our work on the Ghislaine Maxwell juror misconduct case. If you’re reading this, federal agents are probably already investigating you for underground banking – and you need to understand how serious this is.
Underground banking sounds harmless, it sounds like a cultural practice or a convenience for immigrants sending money home. Federal prosecutors don’t see it that way. They see money laundering networks, cartel connections, and Bank Secrecy Act violations that can land you in federal prison for years. In 2025 the government is prosecuting these cases more aggressively than ever, even while backing off certain cryptocurrency cases.
What Underground Banking Actually Means to Federal Prosecutors
You’re probably familiar with hawala or similar informal value transfer systems. Someone walks into your shop, hands you $10,000 in cash to send to their family in another country. You call your contact overseas – they deliver the equivalent amount to the recipient’s family, minus your fee. No banks involved, no paperwork, just trust and phone calls.
This system has existed for centuries. It’s faster than wire transfers, cheaper than Western Union, and it helps people who don’t trust banks or can’t access traditional banking. Federal law doesn’t care about any of that. Operating this type of business without registering with FinCEN as a money transmitter violates 18 USC 1960, and they will prosecute you for it.
The statute is straightforward – if you’re transmitting money as a business and you’re not properly licensed under state law, or if you fail to register with FinCEN, you’re committing a federal felony. Maximum sentence is five years in federal prison. That’s before we even get to money laundering charges.
What makes underground banking especially dangerous is that you often have no idea where the money actually comes from or where it’s really going. Your customers tell you it’s for family, for business expenses, for legitimate purposes. Federal agents will show you evidence that the funds came from fentanyl sales, fraud proceeds, cartel operations. Suddenly you’re not just facing unlicensed money transmitter charges – you’re looking at 20 years for money laundering under 18 USC 1956.
Chinese Underground Banking Networks and the 2025 Crackdown
In June 2024 DOJ announced charges against associates of Mexico’s Sinaloa Cartel who were working with Chinese underground banking networks to launder drug proceeds. This isn’t some isolated case, it’s part of a massive enforcement priority. FinCEN issued a formal advisory about Chinese Money Laundering Networks (CMLNs) operating informal value transfer systems in the United States.
These networks move hundreds of millions of dollars for drug cartels. They use the same hawala-style system you might be running for your immigrant community. Federal prosecutors don’t distinguish between your small operation helping families and these massive criminal networks – they use the same statutes to prosecute both.
Attorney General Bondi directed DOJ resources in 2025 specifically toward cartels and transnational criminal organizations, prioritizing the Money Laundering and Asset Recovery section to focus on these cases. If your underground banking operation has any connection to individuals or businesses tied to these networks, even unknowingly, you’re in their crosshairs.
The government’s theory is simple – underground banking enables money laundering because it operates outside the regulated banking system. No suspicious activity reports, no currency transaction reports, no audit trail. That’s exactly what makes it valuable to criminals, and that’s exactly why they prosecute it so aggressively.
FinCEN Penalties Show How Serious the Government Is
In 2025 FinCEN assessed a record-breaking $1.3 billion penalty against TD Bank for Bank Secrecy Act violations. One point three billion dollars against a major bank. In February 2025 they hit Brink’s Global Services with a $37 million penalty for dealing with unregistered foreign money services businesses.
These massive penalties against legitimate companies show you how the government views BSA compliance in 2025. If they’re going after major corporations with billions in resources for compliance failures, what do you think they’ll do to an individual running an unlicensed hawala operation out of a storefront?
The Brink’s case is especially relevant – the violations involved interactions with high-risk, unregistered foreign money services businesses facilitating cross-border transactions. That’s precisely what most underground banking operations do every single day.
The Investigation Process and What Evidence They Use Against You
Federal agents don’t just stumble onto underground banking operations. They’re conducting sophisticated financial investigations using tools you probably don’t even realize exist. They analyze currency transaction patterns, they surveil your location, they send in confidential informants posing as customers.
They’ll subpoena your bank records – because even underground bankers usually deposit cash somewhere eventually. They’ll track every deposit you make, compare it to your reported income, and document the discrepancies. They’ll identify your overseas contacts through phone records and wire transfers. They’ll interview your customers and offer them immunity in exchange for testimony against you.
By the time federal agents knock on your door to execute a search warrant, they’ve already built most of their case. They have months or years of evidence showing you accepted cash, transmitted it overseas, and made money doing it without a license. The search warrant is just to grab your records, your phones, your customer lists – evidence they’ll use at trial.
The moment you learn you’re under investigation, the moment agents contact you or execute a search warrant, you need a federal criminal defense attorney who has actually handled these cases. Not someone who handles state cases or does immigration law on the side – someone who knows how federal prosecutors build money transmitting and money laundering cases, someone who understands the Bank Secrecy Act and FinCEN regulations, someone who has negotiated with the Money Laundering and Asset Recovery section of DOJ.
Sentencing Reality for Underground Banking Cases
Federal sentencing guidelines for money laundering and unlicensed money transmitter cases depend heavily on the amount of money involved. The more money you transmitted, the higher your offense level, the longer your prison sentence. They’ll calculate loss amount based on every transaction they can prove, even transactions from years ago.
If they can show you knew or should have known the money came from illegal activity, they’ll charge money laundering. That’s 18 USC 1956, and the maximum sentence jumps from five years to twenty years. If they find evidence you structured transactions to avoid reporting requirements, that’s additional charges. If they connect your operation to drug trafficking or fraud, you’re looking at even more time.
Recent cases show the government’s approach. The Tornado Cash and Samourai Wallet cryptocurrency cases in 2025 resulted in guilty pleas to unlicensed money transmitter charges with maximum five-year sentences. DOJ announced they’re backing off merely writing code without ill intent – but traditional underground banking? They’re still prosecuting that aggressively because of the cartel and Chinese money laundering network connections.
Judges have limited discretion in cases involving mandatory minimums or guidelines calculations showing high dollar amounts. A good federal defense attorney can sometimes negotiate cooperation agreements, argue for downward departures based on mitigating factors, challenge the government’s loss calculations – but you need someone who knows what they’re doing.
Why You Need Spodek Law Group for Federal Underground Banking Charges
At Spodek Law Group we’ve handled federal money laundering and financial crime cases that other attorneys told clients were unwinnable. Todd Spodek is a second-generation criminal defense lawyer who has spent many, many years developing relationships and strategies for federal cases. We have former federal prosecutors on our team who understand exactly how the government builds these cases – because they used to build them.
We’re available 24/7, we handle cases nationwide, and we start working the moment you contact us. We’ll review the evidence against you, identify weaknesses in the government’s case, negotiate with federal prosecutors, and fight for the best possible outcome whether that’s dismissal, a favorable plea agreement, or trial.
The worst thing you can do is talk to federal agents without a lawyer. They will use everything you say against you, they will mischaracterize your statements, and they will build their case stronger with your own words. The second worst thing you can do is hire an attorney who doesn’t handle federal financial crime cases regularly.
Our firm has over 700 five-star reviews because we focus on clients who we can actually help, we communicate clearly about your options and the risks you face, and we fight for you – not for our relationship with prosecutors. We’ve represented clients in cases that became Netflix series, in cases involving allegations against public figures like Alec Baldwin, in complex federal matters that required years of litigation.
If you’re under investigation for underground banking, unlicensed money transmission, or money laundering – contact Spodek Law Group immediately. We’ll explain what you’re facing, what defenses exist, and what we can do to protect your freedom.