NATIONALLY RECOGNIZED FEDERAL LAWYERS
What is willful blindness in money laundering
|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 heard about us – we represented Anna Delvey in the Netflix series, handled the Ghislaine Maxwell juror misconduct case, defended clients in cases others said were impossible to win. If you’re reading this, you’re worried about a money laundering investigation – and you need to understand how willful blindness can destroy your defense.
Federal prosecutors don’t need to prove you knew money was illegal. They just need to prove you suspected it and looked the other way. That’s willful blindness, and it carries the same penalties as if you knew exactly what you were doing – up to 20 years in federal prison.
Willful Blindness Means You Can’t Ignore Red Flags
Willful blindness is a legal doctrine that expands the definition of “knowledge” to include situations where you deliberately avoid confirming what you strongly suspect. Federal courts developed this standard decades ago, but according to DOJ policy, it now applies to money laundering prosecutions under 18 USC 1956 and 1957.
The doctrine has two prongs. First – prosecutors must prove you were aware of a high probability that funds came from illegal activity. Second – they must show you took deliberate actions to avoid confirming that fact. Both elements are required.
You’re a business owner accepting large cash payments from a customer who always pays in wrinkled bills, never provides proper invoices, conducts transactions at odd hours. You don’t ask questions because you don’t want to know the answers. That’s willful blindness – conscious avoidance of facts you suspect are true.
TD Bank Paid $3 Billion For Looking The Other Way
In October 2024, TD Bank pleaded guilty to conspiracy to commit money laundering and became the largest bank in U.S. history to face criminal money laundering charges. The penalty – $3.09 billion in fines plus a federal monitor for three years.
What did TD Bank do? They willfully failed to monitor $18.3 trillion in customer transactions from 2018 to 2024. That’s 92% of their transaction volume unmonitored. Money launderers moved $670 million through the bank, including one defendant who walked into branches carrying cash in bags. Bank employees knew. Management didn’t want to know because monitoring systems cost money.
Attorney General Merrick Garland said it clearly: “TD Bank created an environment that allowed financial crime to flourish.” The bank’s executives were willfully blind, and that’s the same thing as knowledge under federal law. FinCEN assessed a record $1.3 billion penalty – the largest civil penalty in FinCEN history.
The Penalties Are Identical To Actual Knowledge
Federal prosecutors treat willful blindness exactly the same as actual knowledge for sentencing purposes. Under 18 USC 1956, conviction carries up to 20 years in federal prison per count, fines up to $500,000 or twice the value of the property involved (whichever is greater), and asset forfeiture. Under 18 USC 1957, you face up to 10 years per count. The average sentence was 62 months in fiscal year 2024 – over five years in federal prison.
These aren’t state charges where you might get probation. Federal judges follow sentencing guidelines based on the amount laundered and your criminal history. There’s no parole in the federal system, you serve at least 85% of your sentence.
Many defendants think claiming ignorance will help at sentencing. It won’t. Once the jury convicts you based on willful blindness, the judge treats you the same as someone who had actual knowledge. Prosecutors stack charges – each transaction can be a separate count. You handle ten suspicious wire transfers, that’s ten counts of up to 20 years each. The exposure is massive, and that’s leverage prosecutors use to force guilty pleas.
Common Scenarios Where Willful Blindness Gets You Convicted
Cash-intensive businesses are high-risk targets. Restaurants, car washes, check cashing stores, money service businesses, cryptocurrency exchanges – any business handling large amounts of cash faces scrutiny. Federal agents look for businesses that don’t ask questions when customers bring duffel bags of cash, make deposits just under $10,000 to avoid reporting requirements.
Cryptocurrency transactions attract particular attention in 2025. You’re operating a crypto exchange and a customer converts $500,000 in Bitcoin to cash over three months, always in amounts below reporting thresholds, using multiple wallets. You process the transactions without asking questions. That’s willful blindness.
Real estate transactions are another target. A buyer purchases property using cash from multiple LLC accounts, provides inconsistent explanations about the source of funds, requests the title in a nominee’s name. You’re the broker, you don’t investigate because the commission is substantial. Federal prosecutors will argue you were willfully blind. Professional facilitators face the most risk – lawyers, accountants, real estate brokers, anyone who structures transactions or moves money. The DOJ specifically targets professionals who should know better.
How Federal Prosecutors Prove Willful Blindness To Juries
The DOJ’s standard jury instruction for 18 USC 1956 tells jurors that knowledge can be proven three ways: actual knowledge, knowledge based on circumstantial evidence, or willful blindness. Prosecutors use circumstantial evidence – you can’t prove what someone was thinking, but you can prove the circumstances that made suspicion inevitable.
Email evidence destroys defendants. Internal messages where employees raise concerns and management tells them to stop asking questions, or where you acknowledge something “seems off” but proceed anyway – that’s direct evidence of willful blindness. Juries read your own words showing you suspected illegal activity but chose not to confirm it. Good defense attorneys challenge whether the government proved “high probability” – maybe the circumstances weren’t as suspicious as prosecutors claim, maybe alternative explanations existed, maybe you lacked specialized knowledge.
What You Should Do Right Now
If federal agents contacted you about suspicious transactions, if FinCEN flagged your accounts, if you received a grand jury subpoena – stop talking immediately. Willful blindness cases are built on your own statements. Agents will ask what you knew, when you knew it, what red flags you saw. Every answer provides evidence for the “deliberate avoidance” prong.
Don’t try to explain away suspicious circumstances without a lawyer. Defendants always think they can talk their way out of trouble. Federal prosecutors are listening for inconsistencies, admissions that you noticed anything unusual, statements showing you avoided asking questions. Anything you say will be used to prove willful blindness at trial.
Time matters. Once prosecutors present your case to a grand jury and secure an indictment, your leverage disappears. Before indictment, we can sometimes convince prosecutors the evidence doesn’t support willful blindness – maybe you had legitimate reasons for not investigating further, maybe the red flags weren’t that obvious.
At Spodek Law Group – we handle cases that other law firms won’t touch. Our managing partner Todd Spodek is a second-generation criminal defense attorney with many, many, years of experience handling complex white collar cases. You’ve seen our work – the Anna Delvey case that became a Netflix series, the Ghislaine Maxwell juror case that made national headlines. Call us 24/7 if you’re facing a money laundering investigation – the longer you wait to retain counsel, the harder it becomes to challenge their willful blindness theory.