New Jersey Federal Money Laundering & Structuring Lawyer

Money laundering charges are some of the most powerful weapons in the federal criminal code. They can turn an ordinary financial transaction, such as a bank deposit, a wire transfer, a car purchase or a real estate closing, into a separate felony carrying up to 20 years. They allow prosecutors to multiply counts, seek forfeiture of assets far beyond the proceeds of the underlying crime, and charge people who were only on the periphery of a scheme. In New Jersey, federal money laundering charges arise in drug trafficking, fraud, corruption, tax, cybercrime and cryptocurrency cases. If you are being investigated or charged, a New Jersey federal money laundering lawyer can identify the weaknesses in the government’s financial theories.

This page focuses on the federal statutes enforced by the U.S. Attorney’s Office for the District of New Jersey. For state charges under N.J.S.A. 2C:21-25, see our New Jersey money laundering page.

Money Laundering Under 18 U.S.C. § 1956

Section 1956 contains several distinct offenses. The most commonly charged is transactional laundering under § 1956(a)(1), which requires proof that the defendant:

1. Conducted or attempted to conduct a financial transaction;
2. Knowing that the property involved represented the proceeds of some form of unlawful activity;
3. Where the property was in fact the proceeds of a “specified unlawful activity”; and
4. Acted with one of the required intents: to promote the carrying on of the unlawful activity; to engage in tax evasion or file a false return; to conceal or disguise the nature, location, source, ownership or control of the proceeds; or to avoid a transaction reporting requirement.

Section 1956(a)(2) covers international transportation or transfer of funds into or out of the United States with similar intents. Section 1956(a)(3) covers “sting” transactions, in which the defendant launders funds represented by a law enforcement officer to be criminal proceeds. Section 1956(h) punishes conspiracy to commit any money laundering offense, with the same penalties as the substantive crime.

The “concealment” theory is the most frequently litigated. In Cuellar v. United States (2008), the Supreme Court held that merely hiding money while transporting it is not enough; the government must prove that the purpose of the transaction or transportation was to conceal or disguise the nature, location, source, ownership or control of the funds. Simply spending criminal proceeds openly, in one’s own name, often does not satisfy the concealment element.

Monetary Transactions Over $10,000 – 18 U.S.C. § 1957

Section 1957 is sometimes called the “spending statute.” It punishes knowingly engaging in a monetary transaction in criminally derived property of a value greater than $10,000 that is derived from specified unlawful activity. Unlike § 1956, it does not require any intent to conceal or promote. Buying a car, paying a mortgage or transferring more than $10,000 of fraud proceeds through a bank can be enough. The maximum penalty is ten years. Because the statute requires only knowledge that the funds were criminally derived, it is frequently added to fraud indictments, including PPP loan fraud and health care fraud cases.

Structuring – 31 U.S.C. § 5324

Banks must file a Currency Transaction Report (CTR) for cash transactions over $10,000. Structuring is the crime of breaking up cash transactions into smaller amounts for the purpose of evading that requirement. Since 1994, the government no longer needs to prove the defendant knew structuring was illegal, only that he intended to evade the reporting requirement. It also does not need to prove the money came from crime. Small business owners who deal in cash, such as restaurant, bodega, laundromat and contractor owners, have been charged with structuring legitimate earnings because they believed that deposits over $10,000 would trigger an audit.

Structuring carries up to five years, or up to ten years if committed while violating another federal law or as part of a pattern of illegal activity involving more than $100,000 in a 12-month period. The IRS’s policy since 2014 has been to pursue structuring forfeitures of legitimate funds only in limited circumstances, but criminal structuring cases continue to be brought.

Other Federal Money Laundering Offenses

• Unlicensed money transmitting business, 18 U.S.C. § 1960: operating a money transmitting business without required state licensing or federal registration, or transmitting funds known to be criminal proceeds. This statute is used against informal value transfer systems, check cashers and cryptocurrency exchangers.
• Bulk cash smuggling, 31 U.S.C. § 5332: concealing more than $10,000 in currency to transport it into or out of the United States to evade reporting.
• Failure to file reports and Bank Secrecy Act violations, 31 U.S.C. § 5322: willful violations by financial institutions and their employees.

Penalties for Federal Money Laundering

In addition to prison, a § 1956 conviction carries a fine of up to $500,000 or twice the value of the property involved, whichever is greater. All of these offenses carry criminal forfeiture of any property “involved in” the offense, which can include the entire amount laundered, not just profits, and property traceable to it. Forfeiture can reach legitimate funds commingled with criminal proceeds in the same account. Supervised release, restitution in fraud-based cases and severe immigration consequences for non-citizens also apply.

How Money Laundering Is Sentenced

Under U.S.S.G. § 2S1.1, if the defendant committed the underlying offense and its offense level can be determined, the base offense level is the offense level for that underlying crime. Otherwise, the base is 8 plus levels from the fraud loss table corresponding to the value of the laundered funds. Specific enhancements are then added, as shown below. Structuring is sentenced under § 2S1.3, which starts at a base of 6 plus levels for the value of the funds, with potential reductions when the funds were legitimate and the defendant did not act with a criminal purpose.

Because laundering enhancements are added on top of the underlying offense, a defendant convicted of both fraud and laundering can face a significantly higher range than for the fraud alone. Negotiating the dismissal of laundering counts, or challenging the factual basis for them, can have a substantial impact.

How Money Laundering Investigations Begin

Banks and other financial institutions file Suspicious Activity Reports (SARs) with FinCEN when they detect unusual patterns, such as frequent cash deposits just under $10,000, rapid movement of funds between accounts, wires to high-risk jurisdictions or transactions inconsistent with a customer’s stated business. Federal task forces review SARs and CTRs for leads. Investigations may also stem from an underlying drug, fraud or corruption case, where agents follow the money to identify assets for forfeiture and additional defendants. Agencies involved include IRS Criminal Investigation, Homeland Security Investigations, the DEA, the FBI and the Secret Service.

Defenses to Federal Money Laundering Charges

• No knowledge that funds were criminal proceeds. Relatives, employees, real estate agents, car dealers and business partners who received or handled money may not have known its source. Willful blindness instructions require proof that the defendant deliberately avoided learning the truth.
• Funds were not proceeds of specified unlawful activity. If the government cannot prove the underlying crime, or that it qualifies as a specified unlawful activity, the laundering charge fails.
• No concealment or promotion intent. After Cuellar, openly spending money is not concealment laundering.
• Merger problems. Payments that are part of the underlying fraud itself, rather than subsequent transactions with completed proceeds, may not support separate laundering counts.
• Tracing. Under § 1957, the government must show that more than $10,000 of criminally derived property was involved, which can be difficult when accounts contain commingled legitimate funds.
• Legitimate reasons for cash practices. In structuring cases, evidence that deposit patterns reflected normal business operations rather than an intent to evade reporting can defeat the charge.

Protecting Your Assets

In money laundering cases, the fight over assets often begins before any charge is filed. Agents may seize bank accounts and cash under civil forfeiture laws, and owners have strict deadlines, sometimes as short as 35 days from a notice letter, to file claims contesting the seizure. Missing those deadlines can result in permanent loss of the property. An attorney can file claims, seek the return of legitimate funds and, in criminal cases, challenge restraining orders that prevent you from paying ordinary living and business expenses.

Related pages: federal drug charges, wire fraud, bank fraud, tax evasion, RICO and federal conspiracy.

Professionals, Family Members and “Third-Party” Defendants

A distinctive feature of federal money laundering law is how often it reaches people who did not commit the underlying crime. Spouses and relatives who held accounts or titled property in their names, accountants and bookkeepers who processed transactions, real estate agents and attorneys involved in closings, car and jewelry dealers who accepted large payments, and business partners whose companies received funds have all been charged in New Jersey cases. Prosecutors frequently rely on the theory of willful blindness, arguing that a defendant who suspected the funds were dirty and deliberately avoided confirming that suspicion is as guilty as one who knew for certain.

Defending a third-party defendant usually requires reconstructing what that person actually knew at the time of each transaction, rather than what the government learned later. Communications, the defendant’s own financial situation, the explanations given for the money, documentation the defendant received, and the presence or absence of red flags all matter. In cryptocurrency cases, the same analysis applies to people who exchanged digital assets for others or provided their exchange accounts. Many of these individuals have strong defenses or are better positioned as witnesses than as targets, and early representation can help establish that status before charges are filed. Third parties with an ownership interest in forfeited property may also be able to protect that property through the ancillary proceedings available after a criminal forfeiture order, but only if they act within the court’s deadlines.

If agents have asked you about money you received from someone else, or a bank has closed your accounts and filed a report, do not try to explain the transactions on your own. A lawyer can determine your status and present your side in a way that protects you.

Related Federal Defense Guides

• Federal investigations, target letters and grand jury subpoenas
• Federal wire fraud
• Federal drug charges
• How the federal sentencing guidelines work

Frequently Asked Questions

Is depositing cash under $10,000 illegal?

Depositing cash is legal. What is illegal is structuring: deliberately breaking up cash deposits or withdrawals into amounts of $10,000 or less for the purpose of evading the bank’s currency transaction reporting requirement. The government does not have to prove the money came from crime.

Can I be charged with money laundering if I did not commit the underlying crime?

Yes. Money laundering is a separate offense. A person who knowingly conducts financial transactions with proceeds of someone else’s crime, intending to conceal their source or promote the crime, can be charged even without participating in the underlying offense.

What does “specified unlawful activity” mean?

It is the list of underlying crimes whose proceeds can support a money laundering charge, found in 18 U.S.C. § 1956(c)(7). It includes drug trafficking, fraud offenses, bribery, many foreign crimes and all RICO predicates, among others.

Can the government seize my money before I am convicted?

Yes. Through civil forfeiture and pretrial restraint in criminal cases, the government can seize bank accounts, cash, vehicles and property it alleges are connected to the offense. Prompt legal action is needed to contest seizures and meet filing deadlines.

Are cryptocurrency transactions covered by money laundering laws?

Yes. Cryptocurrency is treated as a monetary instrument or funds for purposes of these laws, and operating an unregistered crypto exchange or mixing service can also violate the unlicensed money transmitting statute.

Talk to a New Jersey Federal Defense Lawyer Today

Federal cases are won or lost early, often before an indictment is ever filed. If an agent has contacted you, a search warrant has been executed, or you have received a target letter or grand jury subpoena, call Keith Oliver Criminal Law at (732) 858-6959 or contact us online for a confidential consultation. We defend clients throughout New Jersey in the U.S. District Court in Newark, Trenton and Camden, with offices in Monmouth, Mercer and Somerset Counties and Jersey City. Learn more about our federal criminal defense practice and attorney Keith G. Oliver.