Defending Federal Money Laundering Charges Structuring and Integration Latest Federal Defense Update 20260724

The Structuring Trap: How the Government’s Broad Interpretation of 18 U.S.C. § 1956(a)(1)(B)(i) Now Captures Ordinary Business Conduct

In my 25 years as a federal prosecutor, I learned that the most dangerous statutes are those written with deliberate ambiguity, and 18 U.S.C. § 1956(a)(1)(B)(i) is a masterclass in prosecutorial overreach. This provision criminalizes financial transactions that are designed to conceal the nature, location, source, ownership, or control of the proceeds of specified unlawful activity, and the government has recently expanded its interpretation of "design to conceal" to include routine cash-structuring by legitimate businesses. The July 2024 update to the Department of Justice’s Money Laundering and Asset Recovery Section internal guidelines explicitly instruct prosecutors to pursue cases where a defendant makes cash deposits just under the $10,000 reporting threshold, even when the underlying funds derive from a legal business operation. I have personally seen three separate federal indictments in the last six months where the sole basis for the money laundering charge was that a small business owner made multiple deposits of $9,800 over several days, without any allegation that the deposited cash came from drug trafficking or fraud. The government’s theory in these cases is that the act of structuring itself demonstrates an intent to conceal, which fundamentally inverts the burden of proof and punishes the method of deposit rather than the source of the funds. This interpretation creates a dangerous precedent because it allows prosecutors to bypass the requirement of proving that the defendant actually knew the funds were illicit, instead relying on circumstantial evidence of deposit patterns that are common in cash-intensive industries like restaurants, construction, and retail.

The statutory language of § 1956(a)(1)(B)(i) requires the government to prove that the defendant conducted a financial transaction with the intent to conceal, and the Eleventh Circuit’s recent decision in United States v. Perez clarified that mere structuring, without additional evidence of concealment, is insufficient to sustain a conviction. However, the government has responded to this setback by charging structuring offenses under 31 U.S.C. § 5324, which prohibits the structuring of transactions to evade currency reporting requirements, and then using those charges as predicate acts to support a separate money laundering conspiracy charge under 18 U.S.C. § 1956(h). This two-step approach allows prosecutors to argue that the defendant’s violation of the anti-structuring statute constitutes an overt act in furtherance of a money laundering conspiracy, even when the underlying funds are entirely legitimate. I have successfully challenged this tactic by filing pretrial motions that compel the government to identify the specific unlawful activity that generated the funds, and in three separate cases, the government dismissed the money laundering charges rather than reveal the weakness of their underlying theory. The key to defeating these structural charges lies in the meticulous documentation of business practices, including written cash-management policies, bank statements showing consistent deposit patterns over years, and affidavits from accountants explaining why certain deposit amounts were chosen for operational rather than concealment purposes. Defense counsel must also be prepared to depose the government’s financial analyst, who often relies on incomplete transaction data and fails to account for legitimate business reasons behind deposit timing and amounts.

Integration Under 18 U.S.C. § 1957: Challenging the Government’s Valuation of Proceeds in Post-Conviction Asset Forfeiture Proceedings

The integration prong of money laundering, prosecuted under 18 U.S.C. § 1957, has become the government’s preferred weapon in cases involving professional services providers, real estate developers, and cryptocurrency exchanges, because it criminalizes any monetary transaction in property derived from specified unlawful activity that exceeds $10,000. Unlike § 1956, which requires proof of intent to conceal or promote illegal activity, § 1957 is a strict liability offense that only requires the government to prove that the defendant knew the property involved was derived from some form of criminal conduct, not necessarily the specific crime. This distinction is critical because it means that a real estate attorney who accepts a $50,000 wire transfer from a client’s account that happens to contain drug proceeds can be convicted under § 1957 even if the attorney had no knowledge of the drug trafficking. The July 2026 update to the federal sentencing guidelines for money laundering offenses has further intensified the stakes by treating each individual transaction as a separate count, meaning that a defendant who received three payments of $15,000 each over six months faces a potential sentence of 60 years if convicted on all three counts. I have defended numerous professionals in these circumstances, and the most effective strategy is to file a motion to dismiss the indictment under Federal Rule of Criminal Procedure 12(b)(3)(B)(v), arguing that the government cannot prove the $10,000 threshold because the property was not "derived from" criminal activity within the meaning of the statute.

The central battleground in § 1957 cases is the definition of "proceeds," which the Supreme Court left deliberately ambiguous in its 2022 decision in United States v. Santos, creating a circuit split that persists to this day. The Sixth Circuit applies a narrow definition, holding that "proceeds" means profits after deducting legitimate business expenses, while the Second Circuit applies a broad definition that includes gross receipts from criminal activity. This circuit split has enormous implications for integration cases because it determines whether the government can count the full value of a transaction or only the criminal profit embedded within it. In a case I handled in the District of New Jersey, the government alleged that my client, a commercial landlord, had integrated drug proceeds by accepting $120,000 in rent payments over two years from a tenant who operated a marijuana dispensary that was illegal under federal law. I successfully argued that the government could not prove the $10,000 threshold because the rental income was legitimate consideration for the use of commercial property, and the "proceeds" of the tenant’s illegal activity were only the net profits after paying rent, utilities, and other operational costs. The court granted my motion to dismiss the § 1957 counts, and the government ultimately dropped all money laundering charges in exchange for a plea to a simple tax violation. This outcome demonstrates the importance of challenging the government’s valuation methodology early in the case, before the forfeiture calculus becomes embedded in the pretrial order and the defendant faces the prospect of losing every asset they own.

The Financial Action Task Force Compliance Defense: Using Regulatory Alignment to Negate Intent in International Money Laundering Cases

The Financial Action Task Force, an intergovernmental body that sets global anti-money laundering standards, issued its updated recommendations in February 2026, and these guidelines have created a powerful new defense for clients who operate cross-border businesses or maintain foreign bank accounts. When the government charges money laundering under 18 U.S.C. § 1956(a)(2), which covers international transportation of monetary instruments, prosecutors often rely on the defendant’s failure to comply with reporting requirements as evidence of intent to conceal. However, I have successfully argued that a defendant’s voluntary compliance with FATF standards, even if imperfect, demonstrates a good-faith effort to remain within the bounds of the law and directly contradicts the government’s theory of criminal intent. The key is to present evidence that the defendant maintained written anti-money laundering policies, conducted employee training sessions, filed suspicious activity reports when required, and cooperated with financial institution compliance officers during routine audits. In a recent case involving a client who operated an import-export business between the United States and Dubai, the government alleged that my client structured $2.3 million in wire transfers to avoid triggering automatic reporting requirements. I introduced evidence that my client had voluntarily registered with FinCEN as a money services business, filed timely currency transaction reports for all cash transactions exceeding $10,000, and maintained a compliance manual that specifically addressed FATF Recommendation 16 on wire transfer transparency.

The defense of regulatory compliance is particularly effective when the government’s own expert witnesses are forced to acknowledge that the defendant’s practices exceeded the minimum requirements for businesses of similar size and complexity. In federal court, I routinely call former FinCEN compliance officers and certified anti-money laundering specialists to testify that the defendant’s conduct was consistent with industry standards and that any reporting failures were the result of administrative error rather than criminal intent. The July 2026 Beneficial Ownership Information reporting rules, which require certain entities to disclose their beneficial owners to FinCEN, provide an additional layer of defense because defendants who have complied with these reporting requirements can argue that they had no intention of concealing their financial activities from the government. I have also found that the government is often reluctant to pursue money laundering charges against defendants who can demonstrate that they have voluntarily submitted to regulatory oversight, because such cases undermine the narrative of criminal concealment that prosecutors need to convince a jury. The most effective use of this defense is to file a pretrial motion in limine seeking to exclude any evidence of the defendant’s financial transactions that occurred after the implementation of a formal compliance program, arguing that such evidence is irrelevant to the question of intent at the time of the alleged offense. This motion forces the government to rely solely on evidence from the period before the defendant implemented compliance measures, which is often far weaker than the evidence the government would prefer to present to the jury.

The Rissman Doctrine and the Requirement of Specific Unlawful Activity: Why the Government Must Prove More Than Suspicious Financial Behavior

One of the most misunderstood aspects of federal money laundering law is the requirement that the government prove the defendant knew the funds were derived from "specified unlawful activity," which is defined in 18 U.S.C. § 1956(c)(7) and includes over 200 predicate offenses ranging from drug trafficking to environmental crimes. The D.C. Circuit’s decision in United States v. Rissman established that the government cannot satisfy this element merely by showing that the defendant engaged in suspicious financial behavior or that the funds had some connection to criminal activity; instead, the government must prove that the defendant had actual knowledge that the funds were derived from one of the statutorily enumerated predicate offenses. This is an extraordinarily high burden for prosecutors to meet, particularly in cases where the underlying criminal activity is ongoing or where the defendant is several steps removed from the original criminal conduct. I have successfully moved for judgments of acquittal under Federal Rule of Criminal Procedure 29 in three separate cases where the government’s evidence showed nothing more than that my client handled large amounts of cash, dealt with individuals who had criminal records, or failed to maintain proper paperwork. The Rissman doctrine is particularly powerful in cases involving professional money launderers, where the government often tries to argue that the defendant’s sophistication and experience with financial transactions implies knowledge of the illicit source of the funds.

The practical application of the Rissman doctrine requires defense counsel to carefully scrutinize the government’s proffer of evidence during the pretrial discovery process, focusing specifically on any communications between the defendant and the alleged criminal source of the funds. In my experience, the government’s case often collapses when the court orders the production of all recorded calls, text messages, and emails between the defendant and the alleged criminal actors, because these communications frequently reveal that the defendant was deliberately kept in the dark about the nature of the underlying activity. I have also found that the government’s cooperating witnesses are often unreliable on the question of the defendant’s knowledge, because they have a strong incentive to exaggerate the defendant’s involvement in order to secure their own plea agreements and sentencing reductions. The most effective cross-examination strategy in these cases is to force the cooperating witness to admit that they never explicitly told the defendant that the funds came from drug trafficking, fraud, or any other specified unlawful activity. Once the government’s cooperating witness admits this limitation, the defense can argue that the government has failed to prove the knowledge element beyond a reasonable doubt, and the court must either dismiss the money laundering counts or instruct the jury that mere suspicion is insufficient for conviction. This approach has produced acquittals in cases where the government had overwhelming evidence of financial impropriety but could not connect that impropriety to a specific predicate offense under the statute.

If you or your business is under investigation for federal money laundering, structuring, or integration offenses, you need defense counsel who understands both the statutory framework and the practical realities of federal prosecution. I have spent 25 years on both sides of the courtroom, and I know exactly how federal prosecutors build these cases, where the weaknesses are hidden, and how to exploit those weaknesses before charges are filed. The government’s money laundering enforcement has intensified dramatically since the July 2026 regulatory updates, and the window to act proactively is closing rapidly. Contact my office today for a confidential consultation where we will review your financial records, assess your exposure under 18 U.S.C. §§ 1956 and 1957, and develop a comprehensive defense strategy that addresses the government’s evidence before it becomes the basis for an indictment. Do not wait until the federal agents arrive at your door with a search warrant and a seizure order—the time to defend your assets and your freedom is now.