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What is real estate money laundering
|Last Updated on: 8th October 2025, 12:39 pm
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 that other attorneys won’t touch. You’ve probably heard about some of our high-profile cases – representing Anna Delvey in the Netflix series, the Ghislaine Maxwell juror misconduct case, stalking allegations involving Alec Baldwin. If you’re researching real estate money laundering, you’re either facing charges or worried about an investigation – and you need to understand what federal prosecutors are looking at, what the penalties are, and how defense actually works in 2025.
Real estate money laundering isn’t just buying property with dirty money. It’s using real estate transactions to hide where money came from, who owns it, or what it’s for. Federal prosecutors love these cases because real estate creates a paper trail they can follow – deeds, title transfers, wire transfers, LLC formations. Every transaction leaves evidence.
Here’s how it typically works. Someone has cash from drug trafficking, fraud, corruption, or other crimes. They can’t deposit $2 million in a bank without triggering reports, they can’t explain the source. So they buy property – usually through a shell company or trust – using cash or structured payments that avoid reporting thresholds. The property gets resold later, sometimes at a profit, sometimes at a loss. Either way, the money comes out the other side looking legitimate. It’s now proceeds from a real estate sale, not proceeds from crime.
Federal Charges for Real Estate Money Laundering
The main statute is 18 U.S.C. § 1956 – that’s the federal money laundering law. You face up to 20 years in federal prison, fines up to $500,000 or twice the amount of money involved (whichever is greater), and asset forfeiture. The government seizes everything tied to the scheme. Your property, your bank accounts, vehicles, even legitimate businesses you own.
Sentencing gets worse based on several factors. If you laundered more money, your offense level goes up under the federal sentencing guidelines. If prosecutors can prove you were “in the business of laundering funds” – meaning you did this repeatedly, for profit, with some level of sophistication – you get a four-level enhancement under U.S.S.G. §2S1.1(b)(2)(C). That enhancement alone can add years to your sentence. Courts have consistently applied it when defendants set up multiple shell companies, conduct numerous transactions over time, or provide laundering services to others.
Real estate cases often involve additional charges. Wire fraud if you used electronic transfers. Bank fraud if you lied on loan applications or structuring cash deposits. Conspiracy charges if anyone else was involved. Tax evasion if you didn’t report the income. Each charge stacks – you’re not just facing one count, you’re facing five, ten, fifteen counts with sentences that run consecutively if the judge wants them to.
FinCEN’s 2025 Crackdown on Real Estate
Federal enforcement on real estate money laundering has intensified dramatically. FinCEN issued a final rule in August 2024 requiring certain real estate professionals to report non-financed transfers of residential property to legal entities and trusts. This rule was supposed to take effect December 1, 2025, but FinCEN postponed it until March 1, 2026. When it kicks in, title companies and settlement agents across the country will report cash purchases to LLCs, trusts, and other entities directly to FinCEN.
Right now, FinCEN uses Geographic Targeting Orders. The current GTOs were renewed April 15, 2025 and cover certain counties in California, Colorado, Connecticut, Florida, Hawaii, Illinois, Maryland, Massachusetts, Nevada, New York, Texas, Washington, Virginia, and D.C. If you buy residential property in these areas with cash – meaning no mortgage – and the purchase price is over $300,000 (or $50,000 in Baltimore), title insurance companies must identify who the actual buyer is. Not just the LLC name, but the natural persons behind it.
Why does this matter for defendants? Because FinCEN data goes straight to law enforcement. Federal prosecutors told FinCEN they use this information to generate investigative leads, identify subjects in ongoing cases, and support prosecutions and asset forfeiture. Between 2016 and 2021, nearly 61 percent of federal money laundering cases involving real estate included at least one transfer in a county not covered by the old GTOs – that’s why FinCEN expanded to nationwide reporting.
In February 2025, FinCEN and DOJ hit Brink’s Global Services with a $50 million penalty for anti-money laundering failures. Brink’s transported large sums of currency across the U.S.-Mexico border for high-risk entities, including a Mexican currency exchanger later convicted of Bank Secrecy Act violations. That case signals aggressive enforcement – if a company as large as Brink’s gets $50 million in penalties, federal prosecutors are going after individuals involved in laundering schemes just as hard, maybe harder.
What Prosecutors Actually Prove at Trial
Federal prosecutors must prove three elements beyond a reasonable doubt. First, you conducted or attempted to conduct a financial transaction. That’s the real estate purchase, the wire transfer, the LLC formation – any transaction involving property. Second, the transaction involved proceeds of specified unlawful activity. The money came from a crime listed in the statute – drug trafficking, fraud, extortion, corruption, human trafficking, dozens of others. Third, you acted with intent to promote the unlawful activity, conceal the source of the funds, or avoid reporting requirements.
That third element – intent – is where defense happens. Prosecutors use circumstantial evidence to prove intent. You bought property through a shell company with no business purpose. You used nominee buyers or straw purchasers who didn’t actually provide the funds. You structured payments just under $10,000 to avoid currency transaction reports. You sold the property quickly after purchase – sometimes to yourself through another entity – to create layers of transactions. You couldn’t explain the source of funds when questioned, or you gave inconsistent explanations.
Real cases show how this plays out. A 2025 case in Singapore involved 10 Chinese nationals who laundered $2.2 billion through real estate purchases, shell companies, and cryptocurrency. Between 2015 and 2021, more than $2.3 billion was laundered through U.S. real estate according to Global Financial Integrity. These aren’t small-time cases – federal prosecutors target high-dollar schemes because the penalties and forfeitures justify the resources they spend investigating.
Defense Strategy in Real Estate Money Laundering Cases
Defense starts with challenging knowledge and intent. Did you actually know the money came from illegal activity? Maybe you thought the funds were legitimate – inheritance, foreign business income, loan proceeds. If prosecutors can’t prove you knew or deliberately avoided knowing the source, they can’t convict you. This defense works better earlier in the transaction chain. If you’re the first person who received funds directly from criminal activity, it’s harder to claim ignorance. If you’re three transactions removed – someone bought property, sold it, invested proceeds in another property you helped facilitate – knowledge becomes much more difficult for prosecutors to establish.
Proving legitimate source of funds is another approach. You provide documentation showing where money actually came from – tax returns, business records, loan documents, foreign income statements. Prosecutors often assume cash means crime, but cash isn’t illegal. Some countries have cash-based economies, some industries deal primarily in cash, some wealthy individuals hold substantial cash reserves. Your attorney needs to build a narrative explaining why cash doesn’t equal criminal proceeds in your specific situation.
Fighting sentencing enhancements matters enormously. That four-level enhancement for being “in the business” of laundering adds years to your sentence. We challenge it by showing you weren’t repeatedly engaged in laundering, you didn’t profit from providing laundering services, there was no sophisticated operation. Maybe you were involved in one transaction, not a continuing business. Maybe you made an isolated mistake helping a friend or business associate. Maybe prosecutors are overcharging based on limited evidence.
Asset forfeiture defense runs parallel to criminal defense. The government files a civil forfeiture action to seize your property, bank accounts, vehicles – anything connected to the alleged laundering. You can challenge forfeiture even if you’re convicted criminally, though it’s harder. We argue the property wasn’t involved in the offense, or it was legitimately acquired before any criminal activity, or the forfeiture is disproportionate to the offense. Third parties – spouses, business partners, lenders – can also claim interests in the property if they weren’t involved in criminal activity.
What You Need to Do If You’re Under Investigation
Federal investigations move slowly. You might not know you’re under investigation until agents show up with a search warrant or a grand jury issues a subpoena. By then, prosecutors have built most of their case – they’ve reviewed financial records, interviewed witnesses, obtained surveillance footage, traced transactions through multiple entities. Your first conversation with them can determine whether you go to trial or prison.
Don’t talk to federal agents without an attorney. This isn’t about guilt or innocence, this is about how investigations work. Agents are trained to ask questions that seem innocuous but create inconsistencies they use against you later. You think you’re explaining your side – you’re actually giving them evidence. Miranda warnings only apply if you’re in custody, so agents can question you at your home or office without any warnings at all, and everything you say is admissible.
We see defendants who tried to cooperate early without counsel, thinking cooperation would help them. It didn’t. They gave statements that contradicted documents agents already had. They admitted facts that became elements prosecutors needed to prove. They identified other people involved – turning a single-defendant case into a conspiracy. Once you’ve made statements to federal agents, you’re locked into that version of events. If you testify differently at trial, prosecutors use your prior statements to impeach you.
At Spodek Law Group – we’ve spent decades handling federal white-collar cases, including complex money laundering prosecutions. We’ve represented clients in cases others said were unwinnable, we’ve fought asset forfeiture actions where the government seized millions in property, and we understand how FinCEN investigations turn into DOJ prosecutions. Todd Spodek grew up working in his father’s law firm – he’s a second-generation criminal defense attorney who’s handled everything from fraud to money laundering to high-profile cases that made national headlines. If federal agents contacted you about real estate transactions, if FinCEN flagged your property purchases, if you received a grand jury subpoena – you need experienced counsel who knows how these cases are built and how they’re defended.