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How serious is using front companies to hide money
|Thanks for visiting Spodek Law Group. We’re a second-generation law firm managed by Todd Spodek, with over 40 years of combined experience. You’ve probably seen us in the news – we represented Anna Delvey in the Netflix series, handled the Ghislaine Maxwell juror misconduct case, and took on the Alec Baldwin stalking matter. If you’re reading this, you’re worried about front company charges, shell company investigations, or federal prosecutors accusing you of money laundering.
Using front companies to hide money is extremely serious. Federal law treats this as money laundering – and the penalties are brutal. We’re talking up to 20 years in federal prison, fines reaching $500,000 or twice what you moved, plus the government seizing everything tied to the scheme. In 2025, prosecutors are still filing these cases aggressively, even after the Corporate Transparency Act got gutted in March.
Two Federal Statutes That Destroy Lives
Federal prosecutors charge front company cases under 18 USC 1956 or 18 USC 1957. Section 1956 is the heavyweight – it covers laundering money to conceal the source, avoid taxes, or promote illegal activity. Maximum sentence is 20 years. Fines go up to $500,000, but here’s the part that ruins you: fines can also equal twice the value of what you laundered, whichever number is higher.
Section 1957 is narrower but easier for prosecutors to prove. If you deposit or spend more than $10,000 from illegal activity, that’s a violation. They don’t need to prove you intended to hide anything – just that you knew the money came from crime and you moved it. This one carries 10 years maximum, fines up to $250,000 or twice the transaction amount.
Both statutes trigger asset forfeiture. The feds will take your bank accounts, real estate, vehicles, even legitimate businesses you used in the scheme. We’ve seen clients lose everything they built over decades because prosecutors traced one bad transaction through a shell company.
What Happened to the Corporate Transparency Act
You might’ve heard the Corporate Transparency Act was supposed to crack down on anonymous shell companies. Congress passed it in 2021 with bipartisan support – required companies to report their real owners to FinCEN, the Treasury’s Financial Crimes Enforcement Network. The idea was closing the loophole that let criminals hide behind fake corporate structures.
Then March 2025 happened. FinCEN issued an interim rule exempting all U.S. companies and U.S. persons from beneficial ownership reporting. Treasury Secretary Scott Bessent called it “reining in burdensome regulations” – critics called it opening the door to dirty money from fentanyl traffickers, Iranian shell operations, Chinese money laundering networks. Now only foreign entities registered in the U.S. have to report ownership.
Does this mean front companies are legal now? Absolutely not. The CTA rollback doesn’t touch the underlying criminal statutes. Prosecutors still charge money laundering under 1956 and 1957, they still go after tax evasion, wire fraud, bank fraud. What changed is the reporting requirement, not the criminal liability. If anything, the rollback made prosecutors more aggressive because they see shell companies proliferating again.
How Federal Sentencing Actually Works
Sentencing for money laundering depends on the amount you moved and how sophisticated the operation was. Federal sentencing guidelines start with the dollar amount – higher amounts mean higher offense levels. Then prosecutors add enhancements for using offshore accounts, multiple shell companies, professional money launderers,structuring transactions to avoid reporting requirements.
The statistics are grim. In 2016 – the most recent comprehensive data – 78.6% of people convicted of money laundering as the primary offense went to prison. Mean sentence was 41 months. That’s over three years. And that’s the average, many defendants get far more when sophisticated methods like front companies are involved.
There’s no mandatory minimum for money laundering itself, but guideline ranges climb fast. Launder $1.5 million through shell companies? You’re looking at offense level adjustments that push you toward 5-7 years. Add a prior criminal history and you’re over a decade. Judges can vary from guidelines after United States v. Booker, but most sentences still fall within the recommended range.
What the DOJ Is Doing in 2025
Federal prosecutors didn’t slow down after the CTA rollback. Attorney General priorities shifted the Money Laundering and Asset Recovery Section toward cartels and transnational criminal organizations, narcotics trafficking got bumped to the top of the list. If your front company touched drug money – even indirectly – expect MLARS attorneys handling your case.
Recent enforcement actions show how aggressive this gets. February 2025: Brink’s Global Services settled for $42 million over anti-money laundering violations involving unregistered foreign money services. Cryptocurrency exchanges got hammered – one Seychelles-based platform forfeited $184.5 million, paid a $112.9 million criminal fine, total penalties exceeded $504 million. Another exchange pled guilty to operating without FinCEN registration or adequate AML programs.
These aren’t individuals, these are corporations with compliance departments and legal teams. If billion-dollar companies are paying nine-figure penalties, what do you think happens to a small business owner who set up a Delaware LLC to hide income?
Why You Need a Defense Attorney Who Actually Knows This Area
Money laundering cases are document-intensive, they involve financial analysis, tracing funds through multiple entities, challenging the government’s theory of what transactions mean. At Spodek Law Group – we’ve handled federal financial crimes for many, many years. Todd Spodek is a second-generation criminal defense attorney, his father practiced law, Todd grew up watching courtroom strategy from the inside.
We’ve taken on cases others called unwinnable. Anna Delvey’s prosecution had every media outlet in the country calling her guilty before trial – Todd used Frank Sinatra’s “My Way” in closing arguments and got partial acquittals on major charges. The Ghislaine Maxwell juror represented by our firm drew national headlines when his misconduct threatened the entire verdict. These cases required understanding complex financial transactions, jury psychology, media pressure.
Front company cases demand similar skills. Prosecutors will claim every transaction was designed to hide money, they’ll call your legitimate business expenses part of a laundering scheme, they’ll freeze assets before you even get charged. We’ve represented clients in $12 million Ponzi scheme cases and secured six-month sentences when guidelines called for years. That doesn’t happen by accident – it happens because we know how to challenge loss calculations, argue for downward variances, negotiate with MLARS attorneys who respect our track record.
Unlike other law firms who worry about their relationships with judges and prosecutors, we owe loyalty only to you. Our criminal defense lawyers have been interviewed by Fox News, New York Post, Bloomberg – we’re not afraid of high-profile fights. Available 24/7, coast-to-coast representation, completely digital portal so you can access everything from anywhere.
If you’re under investigation for using shell companies or front companies to move money, the worst thing you can do is wait. The government is building a case right now – subpoenaing bank records, interviewing witnesses, preparing charging documents. Call us before they freeze your accounts. Call us before they file charges. Call us while you still have options.