18 U.S.C. § 1956 creates four laundering offenses: domestic transactions, international transfers, sting transactions, and conspiracy to launder. Maximum: 20 years per count, $500,000 fine. The statute reaches transactions involving proceeds of "specified unlawful activity" — a list of 200+ predicate offenses including drug trafficking, fraud, and bribery.
Money laundering is the federal government's force-multiplier in white-collar and drug cases. Once a predicate offense (specified unlawful activity) is established, every subsequent financial transaction with the proceeds becomes a potential separate count. Defending these cases requires breaking the link between the predicate offense and the alleged laundering activity, or defeating the predicate altogether.
The Four § 1956 Offenses
(a)(1) Domestic Money Laundering
Conducting financial transactions with proceeds of specified unlawful activity, with intent to:
- (A)(i) Promote the carrying on of specified unlawful activity;
- (A)(ii) Engage in tax evasion;
- (B)(i) Conceal nature, source, ownership, or control;
- (B)(ii) Avoid a transaction reporting requirement.
(a)(2) International Transfers
Transferring funds to or from the United States with intent to promote SUA, conceal source, or evade reporting requirements.
(a)(3) Sting Transactions
Conducting transactions involving funds represented by law enforcement to be proceeds of SUA.
(h) Conspiracy
Conspiracy to launder — same elements as substantive offense, no overt act required.
Specified Unlawful Activity (SUA)
The list of predicate "specified unlawful activities" in § 1956(c)(7) is over 200 offenses long. Common predicates:
- Drug trafficking under 21 U.S.C. § 841;
- Bank fraud, wire fraud, mail fraud, healthcare fraud;
- RICO predicates;
- Bribery of federal officials;
- Tax evasion (limited to certain categories);
- Foreign bribery, terrorism financing;
- Trafficking in firearms.
The breadth of SUA makes laundering charges available in nearly every federal economic-crime case.
Concealment Limitations from Cuellar
The Supreme Court in Cuellar v. United States, 553 U.S. 550 (2008) limited concealment laundering. Mere transportation of cash — even hidden cash — is not concealment laundering unless the design of the transaction itself was to conceal source, ownership, or control of the proceeds.
This is significant defense leverage in cases involving:
- Cash transport (smuggling cases);
- Routine commercial transactions with tainted funds;
- Cases where the defendant did not actively design concealment.
The Santos "Proceeds" Limitation
The Supreme Court in United States v. Santos, 553 U.S. 507 (2008) held that "proceeds" in § 1956 means profits, not gross receipts. In a fragmented decision, the plurality limited "proceeds" to net profits in cases where the alternative reading would create a "merger problem" — punishing the underlying offense and laundering for the same conduct.
Santos provides defense leverage in cases where the underlying scheme had little or no profit margin — illegal gambling, certain narcotics distribution, sham businesses with high overhead.
Sentencing Under USSG § 2S1.1
Money laundering sentencing under USSG § 2S1.1:
- Base offense level: same as the underlying SUA, OR offense level 8, whichever is greater;
- Plus enhancements:
- +1 if defendant knew funds were proceeds of unlawful activity;
- +2 if conviction under § 1956 (vs. § 1957);
- +1 to +4 for value of laundered funds.
The grouping rules under USSG § 3D1.2 typically merge laundering with the underlying offense. But the § 1956 enhancement of 2-3 levels above base is real and significant.
Defenses
No SUA
If the predicate fails, the laundering fails. Defending the underlying offense is foundational.
Cuellar Defense
Mere transportation or transfer without concealment design.
Santos "Proceeds" Defense
The underlying scheme had no net profits to launder.
No Knowledge of Proceeds
Defendant did not know the funds were proceeds of unlawful activity. Willful blindness can supply knowledge but the standard requires conscious avoidance.
No Concealment Purpose
Routine commerce — paying suppliers, payroll, household expenses — is not laundering even when funded with tainted proceeds, unless the design was concealment.
Strategic Considerations
Common plea-negotiation strategies:
- Plead to the underlying SUA only, dismissing § 1956 counts;
- Plead to § 1957 (transactions over $10,000 in criminally derived property) — easier but only 10-year max;
- Cooperate against larger laundering operations;
- Restitution and forfeiture cooperation in exchange for reduced exposure.
Forfeiture is significant in laundering cases — under 18 U.S.C. § 981 and § 982, the government can forfeit substitute assets, real property, and accounts.
What to Do If You Are Under Investigation or Charged
- Do not speak with federal agents — FBI, DEA, ATF, IRS-CI, HSI, USPS — without an attorney. Even small lies can become independent § 1001 charges.
- Do not destroy or alter records — destruction is obstruction under 18 U.S.C. § 1519, a 20-year felony.
- Preserve all communications — emails, texts, messaging apps, financial records — but do not delete anything.
- Do not contact witnesses or co-defendants — even social contact can become witness tampering.
- Engage federal defense counsel immediately — call (214) 466-1398. We are admitted in TXND and TXED.
Frequently Asked Questions
What is the difference between § 1956 and § 1957?
§ 1956 requires concealment, promotion, or evasion intent — 20 years per count. § 1957 requires only a transaction over $10,000 with criminally derived property — 10 years per count and easier to prove.
Can a single bank deposit support a laundering count?
Yes if the deposit was part of a transaction designed to conceal proceeds. Sequential deposits with the same funds can each be separate counts.
What is the Cuellar v. United States case about?
A 2008 Supreme Court decision limiting concealment laundering. Mere movement of cash — even hidden — is not laundering unless the transaction itself was designed to conceal source, ownership, or control.
Do I have to know the funds were proceeds of crime?
Yes. § 1956 requires knowledge that the funds were proceeds of "some form of unlawful activity." Willful blindness can supply knowledge in some circumstances.
Can the government seize my assets in a money laundering case?
Yes. 18 U.S.C. §§ 981 and 982 authorize civil and criminal forfeiture of property involved in laundering. Substitute assets can be forfeited if the actual laundered funds are unavailable.
Speak With a Frisco Criminal Defense Attorney
If you or a loved one is facing federal defense charges in Frisco, Collin County, or anywhere in the Dallas-Fort Worth metroplex, the time to act is now. L and L Law Group attorneys are available 24 hours a day, 7 days a week. Call (214) 466-1398 for a free, confidential consultation, or submit your case online and a licensed attorney will contact you directly.
This article is general information, not legal advice. Texas and federal criminal law are complex and fact-specific — please consult a licensed attorney about your particular situation. Past results do not guarantee future outcomes.