Federal Money Laundering Defense Lawyer

Federal Defense for Money Laundering Charges

Money laundering is a serious federal crime that often arises from complex financial investigations involving organized crime, white-collar fraud, or drug trafficking.

If you are indicted for federal money laundering, you could faceup to 20 years in federal prison, substantial financial penalties, and the seizure or forfeiture of assets connected to the alleged offense.

Federal prosecutors aggressively pursue money laundering cases because these charges often accompany other serious criminal allegations.

If you are under investigation or have been contacted by federal agents regarding a money-laundering scheme, it is critical to speak with an experienced federal criminal defense attorney before answering any questions.

The defense attorneys at Eisner Gorin LLP represent clients accused of federal financial crimes across California and throughout the United States. Our legal team understands federal money laundering laws and how prosecutors build these complex cases.

Call 818-781-1570 or visit our contact page to schedule a confidential consultation.

What Is Federal Money Laundering?

Federal money laundering laws make it illegal to conduct financial transactions involving proceeds from criminal activity while attempting to conceal the source of those funds. There is a fine line between “sophisticated tax planning” and “criminal concealment”.

Under 18 U.S.C. §1956, it is a crime to knowingly conduct or attempt to conduct a financial transaction involving money derived from unlawful activity.

The statute also prohibits transferring funds internationally or structuring financial transactions to disguise the origin, ownership, or control of criminal proceeds.

If convicted under federal law, a defendant may face:

up to 20 years in federal prison
fines of up to $500,000 or twice the value of the property involved
forfeiture of assets connected to the crime.

Because these cases often involve extensive financial records and federal investigations, defending against money laundering charges requires a lawyer experienced in federal criminal defense.

How Money Laundering Schemes Work

Money laundering is typically described as a process designed to make illegally obtained funds appear legitimate. The scheme usually occurs in three main stages.

Placement

Placement occurs when illegally obtained funds are first introduced into the financial system. This may involve depositing cash into bank accounts, purchasing financial instruments, or transferring funds through businesses.

Layering

Layering refers to a series of complex financial transactions designed to obscure the origin of the funds. This may include multiple wire transfers, offshore bank accounts, shell companies, or cryptocurrency transactions intended to disguise the source of the money.

Integration

Integration occurs when the laundered funds are reintroduced into the economy as seemingly legitimate income. This may involve investments, real estate purchases, or business transactions that make the money appear lawful.

Federal Money Laundering Statutes

Federal money laundering laws were established under the Money Laundering Control Act of 1986, which created the primary criminal statutes used in federal prosecutions.

18 U.S.C. §1956 – Laundering of Monetary Instruments

This statute prohibits financial transactions involving criminal proceeds when the defendant knows the funds were obtained through unlawful activity. The law also criminalizes attempts to conceal the source, ownership, or control of those funds.

18 U.S.C. §1957 – Monetary Transactions in Criminally Derived Property

Under this statute, it is illegal to knowingly conduct a financial transaction involving more than $10,000 in criminally derived property obtained from unlawful activity.

Both statutes carry severe criminal penalties and are commonly charged together in federal indictments.

Related Federal Crimes

Money laundering allegations are frequently connected to other federal criminal offenses. Prosecutors often add laundering charges when financial transactions were used to hide proceeds from another crime.

Bank Fraud – 18 U.S.C. §1344

Bank fraud involves schemes designed to defraud financial institutions or obtain funds under false pretenses. Laundering charges often arise when fraud proceeds are moved through financial accounts.

Check kiting is a federal financial crime charged as bank fraud under 18 U.S.C. § 1344. It involves using multiple bank accounts to falsely give the impression of available funds that are not actually present.

Wire Fraud – 18 U.S.C. §1343

Wire fraud occurs when interstate communications such as phone calls, emails, or electronic transfers are used to execute a fraudulent scheme. Money laundering may follow when proceeds are transferred between accounts.

When wire fraud cases involve high-profile companies or individuals, they often lead to negative media coverage and professional shame, effects that can persist even after the case concludes.

Drug Trafficking – 21 U.S.C. §841

Large drug trafficking organizations frequently rely on money laundering to conceal profits obtained from illegal narcotics distribution.

Federal law, under 21 U.S.C. § 952, prohibits the unauthorized importation of controlled substances and certain precursor chemicals.

Pilots engaging in drug trafficking conspiracies face strict criminal penalties under 21 U.S.C. § 846, which provides that the punishment for conspiracy is the same as for the underlying offense.

Unlicensed Money Transmitting Businesses – 18 U.S.C. §1960

This law criminalizes operating money-transmitting businesses without proper licensing, including underground financial networks used to move criminal proceeds.

Structuring Transactions – 31 U.S.C. §5324

Structuring involves intentionally breaking financial transactions into smaller amounts to avoid federal reporting requirements. Structuring is often charged alongside money laundering.

Racketeering (RICO) – 18 U.S.C. §1962

Money laundering activity connected to organized criminal enterprises may lead to prosecution under federal racketeering laws.

The federal government does not need to prove you built a criminal empire. It only needs to convince a jury that your company qualifies as an “enterprise” and that two or more acts of racketeering occurred within a ten-year window.

Shell companies occupy a gray area in business and law. While they are entirely legal when used appropriately, they are also often associated with white-collar crime.

Federal Investigations for Money Laundering

Federal money laundering cases are often investigated by multiple federal agencies, including:

Federal Bureau of Investigation (FBI)
Internal Revenue Service Criminal Investigation (IRS-CI)
Drug Enforcement Administration (DEA)
Department of Homeland Security (HSI)
Financial Crimes Enforcement Network (FinCEN).

These agencies analyze bank records, cryptocurrency transactions, international wire transfers, and business financial statements when building a money laundering case.

A DEA pharmacy audit is a regulatory inspection conducted by the Drug Enforcement Administration to ensure that pharmacies comply with federal controlled substance laws.

Legal Defenses to Federal Money Laundering Charges

Money laundering is considered a specific intent crime, meaning prosecutors must prove that the defendant knowingly conducted financial transactions involving proceeds from unlawful activity.

Several legal defenses may apply depending on the circumstances of the case.

Lack of Knowledge

A common defense is demonstrating that the defendant did not know the funds involved in the transaction were derived from illegal activity.

No Criminal Proceeds

If prosecutors cannot prove that the money involved originated from unlawful activity, the money laundering charges may fail.

Lack of Intent

The government must show the defendant intended to conceal or promote unlawful activity through financial transactions.

Insufficient Evidence

Federal money laundering cases often rely on complex financial evidence. Challenging the government's interpretation of financial records can create reasonable doubt.

Duress or Coercion

A defendant may argue that they were forced or pressured to participate in financial transactions related to a money laundering scheme.

Asset Forfeiture in Money Laundering Cases

Federal prosecutors frequently seek asset forfeiture in money laundering cases. This means the government may attempt to seize money, property, bank accounts, or business assets allegedly connected to criminal activity.

Asset forfeiture actions are often pursued alongside criminal charges and may involve separate legal proceedings.

Why Early Legal Representation Matters

Federal investigations often begin months or even years before formal charges are filed. During this time, investigators may gather extensive financial records, subpoena witnesses, and analyze transactions.

Speaking with federal agents without legal counsel can expose individuals to additional criminal liability.

An experienced federal criminal defense attorney can help:

protect your constitutional rights
respond to subpoenas or federal investigations
evaluate the government's financial evidence
build an effective defense strategy.

Frequently Asked Questions

What is money laundering under federal law?

Legal definition of federal money laundering

Money laundering is the act of conducting financial transactions with money obtained from criminal activity while attempting to conceal the origin, ownership, or control of those funds.

Under federal law, statutes such as 18 U.S.C. §1956 and 18 U.S.C. §1957 prohibit knowingly transferring, spending, or investing proceeds from unlawful activity to make the money appear legitimate.

What are the penalties for federal money laundering?

Federal sentencing consequences

A conviction for federal money laundering can result in severe criminal penalties. Defendants may face up to 20 years in federal prison, substantial fines of up to $500,000 or twice the value of the property involved, and forfeiture of assets connected to the alleged illegal activity.

Can someone be charged with money laundering without committing the underlying crime?

Relationship between money laundering and predicate offenses

Yes. A person can be charged with money laundering even if they were not directly involved in the underlying criminal activity. Prosecutors only need to prove that the defendant knowingly handled or transferred money that was derived from illegal conduct.

What financial transactions can lead to money laundering charges?

Common examples of laundering transactions

Financial transactions that may trigger federal money laundering charges include international wire transfers, cryptocurrency transfers, real estate purchases using illegal funds, shell company transactions, and bank deposits structured to conceal the source of money.

How do federal prosecutors prove money laundering?

Evidence used in federal financial crime investigations

Federal prosecutors typically rely on financial records, bank transactions, wire transfers, cryptocurrency activity, and witness testimony to show that the defendant knowingly conducted financial transactions involving proceeds from unlawful activity.

What defenses are available in money laundering cases?

Common legal defense strategies

Defense strategies often involve arguing that the defendant did not know the funds were derived from criminal activity, that the money did not originate from illegal conduct, or that the government lacks sufficient evidence to prove intent beyond a reasonable doubt.

Contact a Federal Money Laundering Defense Lawyer

If you find yourself under federal investigation, it is essential to act swiftly, strategically, and within the law to protect your assets.

If you are under investigation or charged with federal money laundering, the consequences can be life-changing. Federal prosecutors aggressively pursue these cases and often combine them with other serious criminal charges.

An experienced federal criminal defense lawyer can review your case, challenge the government's evidence, and develop a strategy designed to protect your freedom and financial future.

Early legal intervention can make a critical difference in the outcome of a federal money laundering case.

Eisner Gorin LLP is here to help. Schedule your consultation by calling (818) 781-1570 or using the contact form. Our law firm is based in Los Angeles.