Predicate offense
Criminal Defense
Federal Money Laundering
Federal money laundering charges under 18 U.S.C. § 1956 and § 1957 are rarely charged in isolation. They almost always appear alongside the underlying predicate offense — drug trafficking, fraud, or another federal crime — and their primary function is to add sentencing exposure, expand conspiracy liability, and allow forfeiture of assets that might otherwise not be reachable.
Important
This is general information, not legal advice. If an arrest happened recently or you believe you are under investigation, do not explain anything to law enforcement before speaking with counsel.
Overview
Money laundering charges amplify exposure and forfeiture reach in federal cases involving financial proceeds.
18 U.S.C. § 1956 covers four distinct types of money laundering: (1) financial transactions that promote the underlying criminal activity; (2) concealment or disguise of the nature, location, source, ownership, or control of proceeds; (3) transactions designed to evade reporting requirements; and (4) international transportation to promote or conceal proceeds.
18 U.S.C. § 1957 is broader but less severe — it covers transactions in criminally derived property exceeding $10,000, regardless of whether the purpose was concealment. The key element is that the defendant knew the funds were the proceeds of some form of unlawful activity.
Structuring — breaking large transactions into smaller ones to avoid Bank Secrecy Act reporting requirements — is charged under § 5324 of Title 31, not § 1956, but is treated similarly and frequently appears in the same indictment.
Asset forfeiture is a central feature of federal money laundering cases. The government may seek forfeiture of all property "involved in" or "traceable to" the money laundering offense, which can sweep in bank accounts, real estate, vehicles, and other assets — even if they were only partly connected to the alleged proceeds.
Key points
Knowledge
The defendant must know the funds were proceeds of unlawful activity
Forfeiture
Asset forfeiture is aggressive and sweeps broadly in money laundering cases
Merged charges
Money laundering is rarely the only charge — it amplifies existing exposure
Penalties & Exposure
Penalties and sentencing
§ 1956 carries a maximum of 20 years per count. § 1957 carries a maximum of 10 years. Both carry maximum fines of $500,000 or twice the value of the property involved, whichever is greater.
Because money laundering is typically charged alongside a predicate offense, the combined sentencing exposure can be substantial. The sentencing guidelines for money laundering (§ 2S1.1) cross-reference the guideline for the underlying offense and add enhancements for sophistication and amount of funds involved.
Asset forfeiture under 18 U.S.C. § 982 is mandatory upon conviction for money laundering offenses. The government must prove the forfeitable nexus by a preponderance of evidence at sentencing — a lower standard than the guilt finding at trial.
Civil asset forfeiture proceedings can also run parallel to the criminal case, and assets can be restrained prior to trial through a pretrial restraining order or seizure warrant, affecting the defendant's ability to fund a defense.
How These Cases Are Defended
Defense strategies
Challenging whether the proceeds were from a specified unlawful activity; disputing knowledge that funds were criminally derived; challenging the forfeiture nexus to specific assets; attacking the predicate offense that allegedly generated the proceeds.
If the underlying predicate offense is successfully defended or results in acquittal, the money laundering charge may collapse. Where knowledge is disputed, the government must prove not just that funds were criminal proceeds but that the defendant knew it — a showing that often depends on circumstantial evidence susceptible to challenge.
Common Questions
Frequently asked
Quick answers to the questions we hear most often. Every case is different — call for a private consultation.
What is "specified unlawful activity"?
§ 1956 requires the proceeds to come from a "specified unlawful activity" (SUA) — a defined list of federal, state, and foreign offenses enumerated in § 1956(c)(7). Drug trafficking, fraud, robbery, and many other offenses are SUAs. Not all crimes qualify, so whether the alleged predicate constitutes an SUA is sometimes a threshold legal issue.
Can the government seize my assets before trial?
Yes. The government can obtain a pretrial restraining order or seizure warrant for assets it believes are subject to forfeiture. Challenging a pretrial asset restraint is possible but difficult — the standard is whether there is probable cause to believe the assets are forfeitable. The freeze can significantly limit funds available for defense.
What is the "transaction" required under § 1957?
§ 1957 requires a financial transaction involving criminally derived property of a value greater than $10,000. Unlike § 1956, § 1957 does not require that the purpose of the transaction was to launder money — the offense is complete if the person conducts a qualifying transaction knowing the property represents criminal proceeds.
Talk to counsel before the state defines your case for you.
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