Money laundering might sound like something out of a movie about organized crime, but federal charges for this offense are brought against all sorts of people, sometimes even those who didn’t realize their actions were part of a larger illegal scheme. Essentially, money laundering is the process of making money obtained from illegal activities (like drug trafficking, fraud, or other crimes) look like it came from a legitimate source – “washing” the dirty money clean.
If you are facing federal money laundering charges or investigation in Greensboro, Winston-Salem, High Point, or anywhere in North Carolina, you are dealing with a very serious accusation. These charges often accompany other federal indictments (like drug conspiracy or wire fraud) and carry substantial prison sentences and fines on their own. Understanding what the government needs to prove is crucial for your defense.
Here at Huggins Law Firm, our team has experience defending clients against complex federal Criminal Law charges, including those involving intricate financial transactions like money laundering. We know how federal agencies like the IRS Criminal Investigation or the FBI build these cases, and we understand the defenses that can be raised.This page explains the basics of federal money laundering. For information on other federal offenses, please see our main guide: Understanding Federal Crimes in North Carolina.
What Exactly is Money Laundering Under Federal Law?
There isn’t just one federal money laundering statute; there are several, but the two main ones are:
- 18 U.S.C. § 1956 (Laundering of Monetary Instruments): This is the primary and broader statute. It prohibits knowingly conducting or attempting to conduct a financial transaction involving the proceeds of “specified unlawful activity” (SUA), with the intent to do one of the following:
- Promote the carrying on of the SUA (e.g., using drug money to buy more drugs).
- Conceal or disguise the nature, location, source, ownership, or control of the proceeds.
- Avoid a transaction reporting requirement under state or federal law (like structuring cash deposits to avoid bank reporting thresholds).
- Evade taxes. It also prohibits transporting or transferring monetary instruments into or out of the U.S. with similar intents.
- 18 U.S.C. § 1957 (Engaging in Monetary Transactions in Property Derived from Specified Unlawful Activity): This statute is simpler but still serious. It prohibits knowingly engaging or attempting to engage in a monetary transaction (like a deposit, withdrawal, or transfer) involving criminally derived property worth more than $10,000, where that property comes from an SUA. This law doesn’t require proof of intent to conceal or promote, only that you knew the money came from illegal activity and you conducted a transaction over $10,000 with it.
Key Terms:
- Financial Transaction: Very broad – includes almost any movement of money or property (purchases, sales, deposits, withdrawals, transfers, exchanges).
- Specified Unlawful Activity (SUA): A long list of federal and state crimes that can form the basis for a money laundering charge. This includes drug trafficking, fraud (wire, mail, bank, healthcare), bribery, extortion, racketeering, terrorism financing, and many others. The money must come from one of these underlying crimes.
- Proceeds: The money or property obtained directly or indirectly from the SUA.
- Knowingly: The government must prove you knew the money was derived from illegal activity (or, under § 1956, sometimes that you acted with “willful blindness,” intentionally ignoring obvious red flags).
Essentially, these laws target the handling of money after the underlying crime has generated illegal profits.
How is Money Typically Laundered? What Do Schemes Look Like?
Money laundering often happens in three stages:
- Placement: Getting the “dirty” cash into the legitimate financial system (e.g., making small cash deposits into multiple accounts, mixing cash with legitimate business receipts).
- Layering: Conducting complex transactions to obscure the money’s origin and make it hard to trace (e.g., wiring funds between different accounts or shell companies, often internationally; buying and quickly selling assets like real estate or luxury goods).
- Integration: Making the laundered money appear legitimate, allowing the criminal to use it freely (e.g., investing it in businesses, purchasing assets).
Common methods investigated by federal agencies include:
- Using Cash-Intensive Businesses: Funneling illicit cash through businesses that normally handle a lot of cash (restaurants, car washes, check cashing stores) and mixing it with legitimate revenue.
- Shell Corporations: Creating fake companies with no real operations to move money through.
- Bulk Cash Smuggling: Physically moving large amounts of cash across borders.
- Real Estate Transactions: Buying property with illegal funds, sometimes using complex ownership structures.
- Trade-Based Laundering: Disguising proceeds through falsified invoices or over/under-valuing goods in international trade.
- Cryptocurrency: Using digital currencies to obscure the source and movement of funds (though transactions on public blockchains are often traceable).
A Stat Few Discuss: While large international schemes get attention, a significant risk area involves third-party money launderers. These are individuals or professionals (sometimes lawyers, accountants, or real estate agents) who may not be involved in the underlying crime but knowingly help criminals disguise their illicit funds. Federal agencies, including the Financial Crimes Enforcement Network (FinCEN), are increasingly focused on identifying and prosecuting these “professional enablers.” ([Source: FinCEN Advisories and Enforcement Actions]). Being willfully blind to red flags about a client’s source of funds can lead directly to money laundering charges for professionals.
What Are the Penalties for Federal Money Laundering?
Money laundering convictions carry severe federal penalties:
- Under § 1956: Punishable by up to 20 years in prison per count and massive fines (up to $500,000 or twice the value of the laundered property, whichever is greater).
- Under § 1957: Punishable by up to 10 years in prison per count and significant fines.
Other Consequences:
- Forfeiture: The government will seek to forfeit any property involved in or traceable to the laundering activity. This can include bank accounts, cars, houses, businesses, etc.
- Sentencing Enhancements: Money laundering convictions often significantly increase the sentence calculation under the U.S. Sentencing Guidelines for any underlying crime (like drug trafficking or fraud).
- Permanent Felony Record: Severely impacts future employment, financial opportunities, and professional licenses.
- Reputational Damage: Particularly damaging for professionals accused of facilitating laundering.
Because money laundering is often tied to other serious federal crimes, defendants frequently face multiple charges and potentially very long cumulative sentences. Finding the best defense strategy requires a lawyer who understands the interplay between these complex charges.
How Can a Lawyer Defend Against Money Laundering Charges in North Carolina?
Defending against federal money laundering charges is complex and requires a deep dive into financial records and evidence of intent. An experienced federal criminal defense lawyer in North Carolina will explore defenses such as:
- Lack of Knowledge: This is often the central defense. The government must prove you knew the funds were proceeds of illegal activity (or were willfully blind). If you genuinely believed the money came from a legitimate source, or had no reason to suspect otherwise, you may lack the required criminal knowledge. Proving what someone “knew” can be difficult for the prosecution.
- Funds Not Proceeds of SUA: Were the funds actually derived from one of the “specified unlawful activities” listed by law? If the underlying activity wasn’t illegal, or wasn’t on the list, there’s no money laundering. Your lawyer will scrutinize the government’s evidence linking the money to a specific crime.
- No Financial Transaction (or Not Over $10k for § 1957): Did your actions actually constitute a “financial transaction” as defined by the statute? For § 1957, was the specific transaction clearly over the $10,000 threshold using illicit funds?
- Lack of Intent (for § 1956): For charges under § 1956, the government must also prove your specific intent (e.g., intent to conceal the source, intent to promote the SUA). If you conducted a transaction knowing the money was dirty, but without one of those specific intents required by the statute, you might have a defense to that specific charge (though § 1957 might still apply if over $10k).
- Illegal Search/Seizure: If financial records or other evidence were obtained through illegal searches or subpoenas, your lawyer will file motions to suppress.
- Withdrawal/Abandonment (Rare): In some conspiracy-related laundering cases, showing you withdrew from the illegal agreement might be a defense to subsequent acts.
- Negotiation: Given the complexity and severity, negotiating with the AUSA for reduced charges, a plea to a less serious offense (perhaps related to the underlying SUA instead of laundering), or a favorable sentencing recommendation is often a key strategy. A lawyer familiar with the federal prosecutors in the Middle District of North Carolina (covering Greensboro, Winston-Salem, etc.) is vital for effective negotiation “near me.”
Key Takeaways for North Carolina Federal Money Laundering Charges
- Involves conducting financial transactions with funds known to be from illegal activities (“Specified Unlawful Activity” or SUA).
- Main laws are 18 U.S.C. § 1956 (requires intent like concealment/promotion) and § 1957 (requires transaction >$10k with known dirty money).
- Proof of knowledge that funds were illicit is crucial for the prosecution.
- Often charged alongside the underlying crime (drugs, fraud, etc.).
- Penalties are severe: up to 10 or 20 years per count, massive fines, and forfeiture of assets.
- Defenses focus on lack of knowledge, funds not being from an SUA, lack of required intent (§ 1956), or illegal evidence gathering.
- Professionals (lawyers, accountants) can be charged if they knowingly facilitate laundering.
- Never handle or transact funds you suspect are from illegal sources. Consult a lawyer immediately if you have concerns or are questioned by federal agents.
Federal money laundering charges are complex financial prosecutions with devastating potential consequences. If you are under investigation or facing indictment in Greensboro, Winston-Salem, or anywhere in the Middle District of North Carolina, secure experienced legal representation immediately. The Criminal Law team at Huggins Law Firm has the knowledge to defend against these intricate charges. Contact us today for a confidential consultation.
Common Questions About Federal Money Laundering for NC Criminal Lawyers
1. What if I didn't know exactly what crime the money came from, just that it seemed suspicious?
Federal law often includes a standard of “willful blindness” for money laundering. This means if you deliberately ignored obvious red flags or consciously avoided learning the truth about the source of suspicious funds, you might still be considered to have the required “knowledge” that the money was dirty, even if you didn’t know the specific underlying crime (like whether it was drug trafficking or fraud). Simply suspecting illegality and looking the other way can be enough for a conviction.
2. I deposited large amounts of cash for my boss/client into the bank in smaller amounts to avoid reporting. Is that money laundering?
Yes, that activity is called “structuring” and it is a specific form of money laundering under 18 U.S.C. § 1956(a)(1)(B)(ii) (conducting a transaction designed to avoid a transaction reporting requirement). Banks are required to file Currency Transaction Reports (CTRs) for cash transactions over $10,000. Intentionally breaking up larger cash amounts into smaller deposits specifically to prevent that report from being filed is illegal, even if the cash itself came from a legitimate (though perhaps untaxed) source. If the cash also came from an SUA, it’s even more serious.
3. My business partner was laundering money through our company, but I wasn't involved. Can I still be charged?
You could potentially be charged if the government believes you knew about the illegal activity and either actively participated or were willfully blind to it. If you truly had no knowledge and weren’t involved in the illicit transactions, you should have a strong defense. However, prosecutors often charge broadly initially. It would be crucial for your lawyer to gather evidence demonstrating your lack of knowledge and separation from the illegal conduct. Having good corporate records and clear divisions of responsibility can help.
4. Can the government take my house or car if I'm convicted of money laundering?
Yes, through a process called asset forfeiture. Federal law allows the government to seize assets that were involved in the money laundering transaction itself (e.g., a car bought with laundered funds) or assets that are traceable to the proceeds of the underlying illegal activity. They can pursue both criminal forfeiture (as part of the criminal case) and sometimes civil forfeiture (a separate case against the property itself). Protecting legitimate assets from forfeiture is a critical part of defending a money laundering case.
5. If the underlying crime (like the drug offense) gets dismissed, does the money laundering charge automatically get dismissed too?
Not necessarily. While the money laundering charge requires proof that the funds came from a “Specified Unlawful Activity,” the government doesn’t always need a conviction for that underlying SUA to proceed with the laundering charge. If they can still independently prove (often through circumstantial evidence) that the money did come from qualifying illegal activity, the money laundering charge can potentially stand on its own, even if the separate charge for the underlying crime fails for some reason (like insufficient evidence for that specific charge, or a statute of limitations issue).
