Facing Federal Money Laundering Conspiracy Charges?

At the federal level, conspiracy to commit money laundering is governed by 18 U.S.C. § 1956(h).

To be convicted under 18 U.S.C. § 1956(h), the prosecution must establish:

1. An agreement between two or more persons to commit a money laundering offense.
2. Knowledge and voluntary participation by the defendant in that conspiracy.
3. An overt act taken to advance the conspiracy.

These mirror general conspiracy principles under federal law, but apply specifically to money laundering statutes.

How We Fight Federal Money Laundering Conspiracy Charges

Core defense strategies, centered on attacking the elements of the charge, include:

• Challenge the Element of "Knowledge": A primary defense involves demonstrating the defendant lacked the requisite knowledge that the funds were criminally derived. Counsel must force the prosecution to prove the defendant's actual, subjective knowledge, arguing that a negligence standard—that the defendant should have known—is insufficient for a conviction. To counter allegations of "willful blindness," the defense should present evidence that the defendant did not take deliberate actions to avoid learning the truth, a standard clarified in Global-Tech Appliances, Inc. v. SEB S.A., 563 U.S. 754 (2011).
• Negate the Specific "Intent" to Launder (§ 1956): An effective strategy is to argue the defendant did not possess the specific criminal intent required by the statute.
• Absence of Intent to Conceal: Citing Cuellar v. United States, 553 U.S. 550 (2008), counsel should argue that the purpose of the transaction was not to hide the source, ownership, or control of the funds, even if the transaction had a concealing effect
• Absence of Intent to Promote: The defense can argue that the financial transaction was merely for personal spending or enjoying the fruits of an alleged crime, not to "promote the carrying on" of the underlying criminal activity.
• Dispute the Existence of an "Agreement": A fundamental defense is to attack the core of the conspiracy charge itself—the agreement. Counsel should frame the defendant's involvement as a "mere association" or a legitimate business relationship, distinct from a knowing and willful agreement to participate in a money laundering scheme. An attorney can argue a "variance," asserting that the evidence points to multiple, separate conspiracies rather than the single, overarching one charged, thereby severing the defendant's liability from the broader scheme.

Auxiliary defense strategies centered around:

• Attack the Link to the "Specified Unlawful Activity" (SUA): The defense can undermine the entire money laundering charge by severing its connection to the predicate crime. This involves arguing that the government cannot prove the underlying SUA occurred or cannot trace the funds in question directly to that specific criminal activity. For transactions involving commingled funds, counsel can create reasonable doubt by challenging the government's ability to trace the illicit money.

Possible Sentencing & Penalties in New York

Under 18 U.S.C. § 1956(h), a conspiracy to commit money laundering carries the same penalties as the underlying money laundering offense, which can include:

• Up to 20 years in federal prison for violations under § 1956. Fines may reach $500,000 or twice the value of the property involved, plus forfeiture of assets.
• If the underlying offense is § 1957, the maximum is 10 years’ imprisonment.

A conviction for conspiracy to commit money laundering under 18 U.S.C. § 1956(h) carries the same severe penalties as the substantive offense the defendant conspired to commit. Defense counsel must advise clients of the significant exposure they face under the federal statutes and the U.S. Sentencing Guidelines.

Maximum Term of Imprisonment

• A conspiracy to violate § 1956 (promotional or concealment laundering) is punishable by up to 20 years in prison. 
• A conspiracy to violate § 1957 (transaction laundering over $10,000) is punishable by up to 10 years in prison.

Substantial Criminal Fines

• For a § 1956 conspiracy, the maximum fine is the greater of $500,000 or twice the value of the property involved in the illicit transaction. 
• For a § 1957 conspiracy, the maximum fine is the greater of $250,000 or twice the value of the criminally derived property, pursuant to the general federal fine statute.

Mandatory Criminal Forfeiture

Upon conviction, the court is required to order the forfeiture to the United States of any property, real or personal, involved in the money laundering offense, as well as any property traceable to it.

U.S. Sentencing Guidelines

• The actual sentence will be calculated under the advisory U.S. Sentencing Guidelines, where the guideline for money laundering, U.S.S.G. §2S1.1, uses the total value of the laundered funds as the principal factor in determining the offense level and corresponding sentencing range. This makes challenging the government's loss calculation a critical component of sentencing advocacy.

Examples and Related Cases

Our firm has handled several matters whereby clients were prosecuted by the Southern and Eastern Districts of New York for money laundering.

In one specific matter, we represented an accountant and CPA who had a successful tax preparation business for several decades. Our client was accused of assisting individuals with avoiding taxes and in turn, laundering money through different enterprises.

Despite guidelines calling for a sentence in the three year range, we successfully secured a non-jail sentence for our client, who in recent years had been suffering from memory loss. We used our client’s medical issues coupled with his complete lack of criminal history to persuade a district court judge to impose a probation only sentence.

Major Money Laundering Conspiracy Cases

U.S. v. Adedayo John, et al. (Southern District of New York, 2024)

• Ruling: The leader of a money laundering and bank fraud ring, Adedayo John, was sentenced to seven years in prison. He had previously pleaded guilty to one count of conspiracy to commit money laundering and one count of conspiracy to commit bank fraud. In total, 11 defendants in this case pleaded guilty for their roles.
• Key Takeaways: This case highlights the significant penalties for those who orchestrate and lead money laundering schemes, even if they are not the ones directly committing the initial fraud. The operation laundered millions of dollars obtained through business email compromises and romance scams that targeted vulnerable individuals, demonstrating the real-world impact of such financial crimes. The court ordered the defendants to forfeit over $25 million in fraud proceeds and pay over $8 million in restitution.
• Legal Standard Applied: The core of the case was a "conspiracy," which in simple terms means an agreement between two or more people to commit a crime. Here, the crime was money laundering. To prove this, the prosecution had to show that the defendants knowingly and willfully joined a plan to conduct financial transactions with money they knew was obtained illegally, and that they took some action to further that plan. The underlying crimes that generated the money were business email compromises and romance scams.

Case: U.S. v. Daren Li and Yicheng Zhang (Central District of California, 2024)

• Ruling: An indictment was unsealed charging two Chinese nationals for their leading roles in a scheme to launder at least $73 million in proceeds from cryptocurrency investment scams. The defendants were arrested and are charged with conspiracy to commit money laundering and multiple counts of international money laundering.
• Key Takeaways: This case underscores the increasing focus of law enforcement on combating cryptocurrency-related financial crime, particularly "pig butchering" scams where victims are manipulated into making fraudulent investments. The use of shell companies and international networks to launder the proceeds demonstrates the sophisticated methods employed in modern money laundering operations. A cryptocurrency wallet involved in the scheme received over $341 million in virtual assets, showing the immense scale of these operations.
• Legal Standard Applied: The legal standard here is again "conspiracy," meaning an agreement to commit the crime of money laundering. The specific type of money laundering involved international transactions, which brings in additional federal statutes. The prosecution needs to prove that the defendants agreed to and knowingly participated in a scheme to move money derived from illegal activities (in this case, cryptocurrency scams) across international borders, with the intent to conceal the source and ownership of the funds.

Case: U.S. v. Robert Bandfield, et al. (Eastern District of New York)

• Ruling: Six corporate executives and six corporate entities were indicted on charges of conspiracy to commit securities fraud, tax fraud, and money laundering.
• Key Takeaways: This case illustrates how money laundering can be intertwined with other complex financial crimes like securities fraud and tax evasion. The defendants allegedly created a sophisticated offshore scheme using brokerage firms and shell companies in Belize to help U.S. citizens hide their ownership in publicly traded companies, manipulate stock prices, and evade U.S. tax reporting requirements. The scheme laundered approximately $500 million for over 100 U.S. clients.
• Legal Standard Applied: This case involves a conspiracy with multiple criminal objectives. For the money laundering conspiracy charge, the government must prove that the defendants agreed to conduct financial transactions with the proceeds of an unlawful activity (here, securities fraud) and that they knew the money was from that illegal activity. The scheme was designed to conceal the nature, location, source, ownership, or control of the proceeds. The creation of sham companies and the use of nominees were key elements in proving the intent to conceal. 

Your Defense Begins Now

If you or a loved one is facing conspiracy to commit money laundering accusations, the stakes couldn’t be higher. With your freedom, future, and reputation on the line, early, strategic counsel from an experienced criminal defense attorney can make all the difference. Please contact The Law Offices of Jason Goldman for a confidential evaluation and start building your defense today.