Can you go to prison for all-cash property purchases

| by Max Soni

Thanks for visiting Spodek Law Group. We’re a second-generation law firm managed by Todd Spodek, with over 40 years of combined experience handling federal criminal cases. Many of the cases we’re famous for handling – are cases that others say were unwinnable. You might know us from the Netflix series about Anna Delvey, or the Ghislaine Maxwell juror misconduct case. If you’re reading this article, you’re probably worried about a real estate transaction – and whether it could land you in federal prison.

Buying property with cash isn’t illegal. People do it every day. But federal prosecutors don’t care about the transaction itself, they care about where the money came from and what you’re trying to hide.

The Answer Nobody Wants to Hear

Yes – you can absolutely go to prison for all-cash property purchases. Not because paying cash is criminal, but because federal money laundering laws make it a crime to use real estate transactions to conceal proceeds from illegal activity. Under 18 USC § 1956, you’re facing up to 20 years in federal prison if prosecutors prove you conducted a financial transaction involving crime proceeds with intent to conceal the source. That’s the maximum. The average sentence for money laundering is 62 months according to U.S. Sentencing Commission data – that’s over five years of your life gone.

Here’s what makes this terrifying. You don’t need to be a drug kingpin or run a Ponzi scheme to get charged. Federal law also prohibits “structuring” under the Bank Secrecy Act. Structuring means breaking up large cash amounts into smaller transactions to avoid the $10,000 reporting threshold banks must follow. A medical doctor in California got convicted for making cash deposits under $10,000 into four separate accounts on the same day – sometimes within minutes of each other. The government doesn’t need to prove you committed another crime first, just that you deliberately avoided reporting requirements. Maximum penalty for structuring? Five years in federal prison.

And starting March 1, 2026, there’s a new federal rule that makes things worse. FinCEN’s Residential Real Estate Reporting Rule requires settlement agents, title companies, and attorneys to report certain non-financed transfers of residential property to legal entities or trusts. If you willfully violate this reporting requirement, you’re looking at up to five years in prison and fines up to $250,000. Even negligent violations can cost you over $100,000 in fines.

What Federal Prosecutors Actually Look For

The government isn’t watching every cash real estate deal. They’re watching patterns. FinCEN has been running Geographic Targeting Orders since 2016 in major metropolitan areas – currently covering counties in California, Florida, New York, Texas, Illinois, and other states through October 2025. Title insurance companies must identify the natural persons behind shell companies used in non-financed purchases above $300,000 in most areas. In Baltimore, it’s only $50,000.

When you buy property through an LLC or trust using all cash, title companies report the beneficial owners to FinCEN within 30 days. Federal agents use this to generate investigative leads – because that’s exactly how criminals launder money through real estate.

Using cash from drug trafficking, fraud, embezzlement, tax evasion – any “specified unlawful activity” under federal law. Making multiple cash deposits under $10,000 to avoid bank reporting. Lying on settlement forms about the source of funds. Purchasing property through an LLC while hiding your identity as the beneficial owner. Any of these patterns combined with evidence you knew the money was dirty, and prosecutors will charge you under 18 USC § 1956 or § 1957.

Section 1956 requires prosecutors to prove specific intent – that you conducted the transaction to promote illegal activity, to conceal the source of proceeds, or to avoid transaction reporting requirements. Section 1957 is easier for them. They only need to prove you engaged in a monetary transaction over $10,000 involving proceeds from specified unlawful activity. No intent to conceal required. Just the transaction itself.

The Sentences Are Real

A real estate developer in Connecticut just got 65 months – over five years – for money laundering and tax evasion. Robert Matthews was developing The Palm House Hotel in Palm Beach when federal prosecutors charged him. In Southern California, a woman received 20 years for a $3.9 million real estate scheme.

Federal judges follow the U.S. Sentencing Guidelines, which calculate your sentence based on offense level and criminal history. Money laundering offenses increase based on the amount involved. Over $550,000? Add levels. Over $1.5 million? More levels. The more money laundered, the higher your guideline range climbs.

Even if you get the minimum, you’re doing real time. Federal prisoners must serve at least 85% of their sentence. There’s no parole in the federal system. Good behavior might knock off 54 days per year, but that’s it. A five-year sentence means over four years behind bars.

When the Government Comes After You

Federal money laundering investigations don’t start with a knock on your door. They start with bank records, FinCEN reports, wire transfer records, and informants. By the time agents interview you, they already know the answer to every question. They’re testing whether you’ll lie – because lying to federal agents is another crime that adds five years under 18 USC § 1001.

The worst thing you can do is talk without a lawyer. Federal prosecutors have a conviction rate over 90%. If they’re investigating your real estate transactions, they’ve already subpoenaed your bank accounts, reviewed your tax returns, and interviewed witnesses. They know about the LLC. They know about the cash deposits.

What they want is a statement they can use at trial. Anything you say becomes evidence. And if your story changes later, that’s consciousness of guilt.

This Is Where We Come In

At Spodek Law Group – we’ve spent decades defending federal criminal cases that other attorneys won’t touch. Todd Spodek is a second-generation criminal defense lawyer who grew up in the courtroom watching his father try cases. He represented Anna Sorokin in the case that became a Netflix series. He represented the juror in the Ghislaine Maxwell trial when the government and defense both came after him for alleged misconduct.

We pride ourselves on having attorneys who understand federal money laundering law – not just the statutes, but how prosecutors build these cases and where the weaknesses are. When prosecutors allege you structured transactions or used real estate to launder money, we challenge the evidence at every stage. We file motions to suppress bank records. We challenge the government’s proof of intent. We negotiate with prosecutors before charges are filed, and we fight at trial when negotiation fails.

If federal agents have contacted you about real estate transactions, if you’ve received a grand jury subpoena, if you’re worried about past cash purchases – you need to talk to us now. Federal investigations move fast, and once prosecutors make charging decisions, your options narrow. We’re available 24/7 because these situations don’t wait for business hours.

Regardless of how complicated your case is, or how challenging it is – we can help you understand what you’re facing. We handle cases coast to coast, we’ve represented clients in complex financial cases, and we know how to fight federal prosecutors. Because many, many, times – the cases prosecutors think are unwinnable turn out differently when you have attorneys who refuse to back down.