There are two federal criminal laws that specifically address money laundering. The first law (18 U.S.C. §1956) makes it a crime for any person to engage in a financial transaction with money that was obtained from criminal activity with the intent to try and promote the criminal activity or conceal it. The second law (18 U.S.C. §1957) makes it a crime for a person to engage in a monetary transaction in an amount greater than $10,000, knowing that the money was obtained through criminal activity.
Rarely is someone charged with just a money laundering offense. We usually see money laundering charges brought in cases where someone is being accused of drug conspiracy, mail and wire fraud, racketeering (RICO), or some other financially motivated crime.
Money laundering laws cover both domestic and international financial transactions. International money laundering cases are usually focused on the purpose of the financial transaction. Even a transaction with “clean” money can be the basis of an international money laundering charge if the money is being used to promote a particular crime.
The government can also use undercover “sting” operations to investigate and prosecute money laundering offenses where the money is not actually “dirty money.” In these “sting” operations, an undercover agent can say that the money is “dirty” even if it is clearly not.
In addition to these crimes, federal law also makes it illegal to enter into an agreement to commit money laundering. Money laundering conspiracy charges are often brought against people who have only played a small role in the alleged criminal activity. In order to prove that someone is part of a money laundering conspiracy, the government must show that there was an agreement to launder money and that the person knew about the agreement and wanted to join in it. The government does not have to prove that the person actually handled the money or did anything specific to assist the money laundering offense.
Money laundering is a serious crime under federal law. A violation of 18 U.S.C. §1956 can result in a sentence of up to 20 years in prison. A violation of 18 U.S.C. §1957 can result in a sentence of up to 10 years in prison. As with most federal financial crimes, the exact sentence will be determined primarily by the amount of money involved in the offense.