Criminal Defense · Haute Lawyer Network
What Is Money Laundering?
Last reviewed: June 2026
Money laundering is the process of concealing the illegal origin of funds obtained through criminal activity — typically by moving the money through a series of transactions designed to make it appear to have come from legitimate sources.
Federal money laundering statutes — 18 U.S.C. §§ 1956 and 1957 — criminalize engaging in financial transactions knowing that the funds derive from specified unlawful activity, with intent to promote that activity, conceal its proceeds, or evade taxes. Money laundering convictions carry up to 20 years in federal prison.
The classic three-stage model describes placement — introducing cash into the financial system — layering — moving money through complex transactions to obscure its origins — and integration — re-introducing the funds into the legitimate economy.
Drug trafficking, healthcare fraud, tax evasion, Ponzi schemes, and public corruption are the most common predicate crimes for money laundering prosecutions.
Frequently Asked Questions
Can someone be convicted of money laundering without knowing the source of the funds?
No. Money laundering requires knowing that the funds derive from some form of unlawful activity. However, willful blindness — deliberately avoiding knowledge of the funds' origin — can satisfy the knowledge requirement.
What is structuring?
The practice of breaking large cash transactions into smaller ones to avoid the $10,000 cash transaction reporting requirement. Structuring is itself a federal crime — 31 U.S.C. § 5324 — even if the underlying funds are legitimate.
What is a Bank Secrecy Act violation?
Financial institutions are required to report certain transactions and maintain records under the Bank Secrecy Act. Businesses that fail to file required reports or that help customers evade reporting requirements can face civil and criminal penalties.
What is forfeiture in a money laundering case?
The government can seize and forfeit property involved in or traceable to money laundering — including bank accounts, real estate, vehicles, and businesses. Forfeiture is one of the most powerful tools in money laundering prosecutions.
What is the difference between money laundering and tax evasion?
Tax evasion involves failing to report income or pay taxes owed on it. Money laundering involves disguising the criminal origin of funds. The two often overlap — proceeds of crime that are unreported are both laundered and part of a tax evasion scheme.
Related Questions
Are you a Criminal Defense attorney?
Join Haute Lawyer Network and have your profile featured alongside these answers.
Apply for Membership →This information is provided for general informational purposes only and does not constitute legal advice or create an attorney-client relationship.