Money Laundering Defense: A Federal Defense Lawyer’s Guide

By Elizabeth Franklin-Best, Esq., and Christopher Zoukis, JD, MBA

Money laundering is rarely the first crime the government investigates — it is the charge prosecutors add to make a case bigger, longer, and harder to defend. If you face money laundering, structuring, or Bank Secrecy Act allegations, an experienced money laundering lawyer is essential, because these statutes have demanding elements that an aggressive prosecution often glosses over. At Elizabeth Franklin-Best, P.C., we defend individuals and businesses against federal money laundering allegations nationwide.

Federal money laundering law is a cluster of statutes: the core money laundering offenses, the structuring and currency-reporting laws, the Bank Secrecy Act, and the unlicensed money transmitting statute. Each has its own elements and defenses, and a money laundering count can dramatically increase the exposure associated with an underlying offense.

Our firm brings a federal-court defense practice grounded in detailed statutory analysis and controlling case law. Elizabeth Franklin-Best is a federal criminal and appellate attorney recognized in Best Lawyers for appellate practice. We approach every money laundering matter by mapping the precise elements against the facts and testing whether the government can prove the knowledge and intent these statutes require. If you are facing a money laundering investigation or charge, we invite you to schedule a paid, one-hour initial consultation.

Money Laundering: Quick Answer

Question	Answer
What is money laundering?	Conducting financial transactions with the proceeds of crime to promote, conceal, or disguise that crime — prosecuted under 18 U.S.C. §§ 1956 and 1957.
What must the government prove?	That the property was criminal proceeds, that the defendant knew it, and that the transaction was meant to promote, conceal, or evade reporting — depending on the theory.
What penalties can apply?	Core money laundering carries up to 20 years per count; the related transaction offense up to 10 years; structuring up to 5 or 10 years.
Is money laundering a stand-alone charge?	It can be, but it is usually added to an underlying offense — and it requires its own separate proof.

Key Takeaways

• Federal money laundering law is a cluster of statutes — the core offenses, structuring, the Bank Secrecy Act, and unlicensed money transmitting.
• Core money laundering under 18 U.S.C. § 1956 requires criminal proceeds, knowledge, and an intent to promote, conceal, or evade reporting.
• The related offense under 18 U.S.C. § 1957 applies to knowingly engaging in a financial transaction involving more than $10,000 in criminally derived property, with a lower intent requirement.
• Structuring under 31 U.S.C. § 5324 is breaking up cash transactions to evade currency reporting — and it is a frequent stand-alone charge.
• Money laundering requires its own proof; an underlying crime does not automatically establish it.
• The proceeds at issue must come from a “specified unlawful activity,” and the funds laundered are generally net profits.
• Money laundering counts carry severe penalties and aggressive forfeiture exposure.
• Knowledge and intent are the elements where money laundering cases are most often won.

What Is Money Laundering?

Money laundering, in the broadest sense, is the process of moving the proceeds of crime through transactions designed to make those proceeds appear legitimate, or to promote further crime. Federal law addresses it through several statutes, and the key point is that money laundering is a separate offense from the crime that generated the money.

That separateness is what makes money laundering such a powerful prosecution tool. A wire fraud, a drug offense, or a corruption scheme is one crime. The financial transactions that follow — moving the money, spending it, depositing it, transferring it — can be charged as additional, separate money laundering crimes, each carrying its own lengthy sentence. A money laundering count can double the exposure of an underlying case and substantially expand the government’s forfeiture reach.

But that same separateness cuts the other way for the defense. Because money laundering is an offense in its own right, it has its own elements, and the government must prove each of them. It is not enough to prove the underlying crime and point to some money moving afterward. The knowledge and intent requirements are real, and they are where money laundering cases are most often defended.

The Federal Money Laundering Statutes

Federal money laundering exposure runs through a cluster of statutes, each covered in depth in its own guide:

• Money Laundering Defense (18 U.S.C. §§ 1956 & 1957) — the core money laundering offenses: promotional and concealment laundering, and the related monetary-transaction offense.
• Structuring & Currency Transaction Violations (31 U.S.C. § 5324) — breaking up cash transactions to evade the currency reporting rules.
• Bank Secrecy Act Violations Defense — the anti-money-laundering recordkeeping, reporting, and compliance regime.
• Unlicensed Money Transmitting Business Defense (18 U.S.C. § 1960) — operating a money transmitting business without the required license or registration.

A single matter can implicate several of these statutes at once, and money laundering counts frequently accompany federal fraud, drug, and public corruption charges. Understanding how the statutes interact is essential to defending the whole case.

The Core Money Laundering Offenses

The two central statutes are 18 U.S.C. § 1956 and § 1957, and they work differently.

Section 1956 is the principal money laundering statute. It reaches a person who conducts a financial transaction, knowing the property involved represents the proceeds of unlawful activity, where the property in fact is the proceeds of a “specified unlawful activity,” and where the transaction is intended to promote further crime, or is known to be designed to conceal the nature, source, ownership, or control of the proceeds, or to avoid a reporting requirement. It also reaches the international transportation of criminal funds. Section 1956 carries a maximum penalty of 20 years per count.

Section 1957 is broader in one sense and narrower in another. It reaches a person who knowingly engages in a monetary transaction through a financial institution involving criminally derived property worth more than $10,000. It does not require an intent to promote or conceal — simply knowingly transacting with more than $10,000 of criminal proceeds can violate it. Section 1957 carries up to 10 years in federal prison per count.

Both statutes require that the proceeds come from a “specified unlawful activity” — a long statutory list of predicate offenses — and both require knowledge that the money was criminal proceeds. Importantly, the government generally need not prove the defendant committed the underlying crime; it must prove the defendant knew the money was dirty.

Applied Insight: Prosecutors often treat money laundering as automatic — underlying crime, then money moved, therefore laundering. It is not automatic. Section 1956 requires a specific promotional or concealment design, and merely spending criminal proceeds is not, by itself, concealment laundering. Insisting on proof of that design is one of the most effective money laundering defenses.

Knowledge and the “Proceeds” Question

Two elements deserve particular attention because they are so often contested.

The first is knowledge. The government must prove that the defendant knew the property involved represented the proceeds of unlawful activity. It need not prove the defendant knew exactly which crime, but it must prove genuine knowledge of the property’s criminal character. A person who handled funds without knowing they were criminal proceeds — a family member, an employee, a professional providing ordinary services — has not committed money laundering. Willful blindness can sometimes substitute for actual knowledge, but that, too, has limits the defense can press.

The second is the “proceeds” question. Money laundering reaches transactions in criminal proceeds, and courts have grappled with what counts — in particular, whether “proceeds” means gross receipts or net profits, and how to separate tainted money from clean money once funds are commingled. These are genuine, litigable questions. A transaction that the government wants to call laundering may, on close analysis, involve funds that were not “proceeds” at all, or that cannot be traced to the predicate offense.

Penalties and Forfeiture

Money laundering penalties are severe. Section 1956 carries a maximum sentence of up to 20 years per count and a fine of up to $500,000, or twice the value of the property involved, whichever is greater. Section 1957 carries up to 10 years per count. Structuring under § 5324 carries a penalty of up to 5 years, or up to 10 years if it is part of a pattern of illegal activity or another violation of law. Because each transaction can be charged as a separate count, money laundering indictments can carry extraordinary aggregate exposure.

Forfeiture is a defining feature of money laundering cases. The government routinely seeks forfeiture of the property involved in the laundering transactions, and it often moves to freeze or seize assets early — sometimes before trial — which can leave a defendant without resources to live on or to fund a defense. Restitution to victims of the underlying crime is also common.

In federal court, the advisory United States Sentencing Guidelines drive the actual sentence. The value of the laundered funds, the nature of the underlying offense, the defendant’s role, and the use of sophisticated means all influence the range. Contesting the value attributed to the offense and the applicable enhancements is an essential part of any sentencing defense.

Applied Insight: The forfeiture and asset-freeze side of a money laundering case can be as urgent as the criminal charge itself. Early, focused work to contest the seizure of untainted assets — and to preserve the funds a defendant needs to live and to retain counsel — is often a priority from the first days of the matter.

Defenses to Money Laundering Charges

No two money laundering cases are alike, and no lawyer can promise a result. But several defense themes recur, and matching them to the evidence is the core of building a strategy:

• Lack of knowledge. The defendant did not know the property represented the proceeds of unlawful activity.
• No promotional or concealment design. For a § 1956 charge, the transaction was not intended to promote crime or designed to conceal — it was ordinary spending or transfer.
• The funds were not “proceeds.” The money was not criminal proceeds, nor can it be traced to a specified unlawful activity.
• No specified unlawful activity. The underlying conduct does not qualify as an SUA predicate.
• Commingling. The transaction involved legitimate funds, not traceable criminal proceeds.
• No financial transaction or institution nexus. The conduct does not meet the statutory definition of a covered transaction.
• Innocent handling. The defendant provided ordinary services — banking, accounting, family financial help — without criminal knowledge or intent.
• Forfeiture and sentencing challenges. The government’s valuation and the scope of forfeiture can be contested.

The right combination depends entirely on the facts and the financial record. Our role is to test the government’s proof element by element, develop a favorable record, and press every legitimate defense during the investigation, in pretrial motions, at trial, and on appeal.

How Money Laundering Investigations Begin

Money laundering investigations frequently begin with the financial system itself. Banks file Suspicious Activity Reports and Currency Transaction Reports, and that data feeds federal investigations. A money laundering case can also grow out of an investigation of the underlying offense — fraud, drugs, corruption — as agents follow the money. Whistleblowers, cooperating witnesses, and audits also play a role.

The early steps matter. Preserve all records, do not discuss the matter with anyone who may be a witness, decline to give an unprepared interview, and consult an experienced money laundering lawyer before saying anything substantive. Because money laundering turns on knowledge and intent, an early, careless explanation of a transaction can be recast as evidence — and the asset-freeze risk makes early counsel involvement especially important.

Why Work With Elizabeth Franklin-Best, P.C.

Money laundering cases are document-intensive and turn on knowledge, intent, and the tracing of funds. They reward defense lawyers who can hold the government to each element, who understand the proceeds and commingling problems, and who can fight the forfeiture side of the case as hard as the criminal side.

Elizabeth Franklin-Best is a federal criminal defense and appellate attorney recognized in Best Lawyers for appellate practice and the author of a book on challenging criminal convictions. Our team — including Christopher Zoukis, who focuses on federal sentencing and corrections issues — handles federal matters nationwide, appearing pro hac vice in district courts across the country alongside our standing bar admissions. We defend individuals and businesses at every stage of a money laundering case.

We do not promise outcomes. What we promise is rigorous, honest, practitioner-grade defense work: a close reading of the law and the financial record, a candid assessment of the evidence, and a strategy built for your situation. If you are facing a money laundering investigation or charge, we invite you to schedule a paid, one-hour initial consultation.

Talk With a Money Laundering Defense Lawyer

A money laundering case can multiply the exposure of an underlying matter and put your assets at risk through forfeiture. The earlier an experienced money laundering lawyer is involved, the more options you are likely to have. To discuss your circumstances confidentially with our team, schedule your one-hour initial consultation today.