Federal Investigation of My Laundromat - Money Laundering
Welcome to Spodek Law Group. Our mission here is to give you the reality of what happens when federal investigators come for your laundromat - not the sanitized version other law firms present, not the television fiction where everything works out, but the actual truth about how the government builds cases against cash business owners and what you can do about it.
If you found this page, something happened. Maybe federal agents showed up at your business. Maybe your bank called with questions about your deposits. Maybe your accountant mentioned something concerning about a subpoena for your financial records. Whatever brought you here at this hour, understand this: the playbook the government uses against laundromat owners is designed to make your legitimate business look exactly like a criminal enterprise. And they have been perfecting this approach for decades.
Here is what nobody tells laundromat owners until it is too late: the government does not need to prove your money came from illegal sources to prosecute you for money laundering crimes. According to the Treasury Department's own Inspector General, 91% of structuring seizures involved money that was legally earned. That statistic should terrify every cash business owner in America. The crime they are looking for is the deposit pattern itself - and your normal business operations create exactly the pattern that federal prosecutors need to build their case against you.
Why Laundromats Become Federal Targets
Theres a reason the term "money laundering" literally comes from laundromats. Back in the 1920s, organized crime figures like Al Capone used coin laundry businesses to mix illegal cash with legitimate revenue becuase the all-cash nature made it impossible to verify actual customer volume. A hundred years later, the basic problem hasnt changed - your laundromat generates cash that you cant prove came from customers versus any other source.
Think about your typical week operating a laundromat. Customers pay with quarters and cash. You empty the machines every few days. You deposit the money at your bank. There is no credit card trail for most transactions, no detailed receipt for every load of laundry, no way to prove definitively that your $8,500 deposit came from legitimate customers and not from drug proceeds being filtered through your business. From the goverments perspective, a laundromat making $500,000 per year looks exactly the same whether its 100% legitimate or whether half that money comes from illegal sources being "cleaned."
This creates what defense attorneys call the laundromat paradox - your cash-intensive business model, which is completly legal and has been the foundation of small business America for generations, generates the exact same financial patterns that actual money launderers use when running dirty cash through legitimate businesses. And once federal investigators see those patterns in your banking records, the burden begins shifting to YOU to prove the money is clean.
Heres the thing that makes this so dangerous. In October 2024, TD Bank - the tenth largest bank in America - paid over $3 billion in penalties and became the first major US bank to plead guilty to money laundering conspiracy. If the federal goverment will go after a massive bank like that, do you really think they wont prosecute a laundromat owner with suspicious deposit patterns? The enforcement environment has never been more aggressive.
The Crime Your Probably Committing Right Now
Most laundromat owners I talk to are committing a federal felony without having any idea they're doing it. Its called structuring, and it carries up to 10 years in federal prison. Let that sink in for a moment.
Let me explain how this works becuase it matters more then you realize. Under the Bank Secrecy Act, banks must file a Currency Transaction Report (CTR) for any cash deposit over $10,000. This is just paperwork - the bank fills out a form, sends it to the government, and everyone moves on with there day. But heres were it gets dangerous: at some point, someone probably told you that you could "avoid the hassle" by keeping your deposits under $10,000. Maybe it was your accountant trying to help. Maybe a friendly bank teller. Maybe you just figured it out yourself.
That advice - keeping deposits under $10,000 to avoid paperwork - is a federal crime called structuring under 31 U.S.C. § 5324. And heres the part that shocks everyone when they hear it: the money does not need to be illegal for structuring to be a crime. The crime is the pattern of deposits itself. Your trying to avoid reporting requirements, and that attempt is the felony regardless of were the money came from.
OK so lets say you run a laundromat and you deposit $8,500 every Monday becuase thats what your machines take in over the weekend. Completly legitimate money from your machines. You pay all your taxes on every dollar. Your not hiding anything illegal except you dont want the bank filing paperwork every single week. Sound familiar? That pattern - regular deposits just under $10,000 - can get you indicted for federal structuring charges with a sentence of 5-10 years in prison.
In 2024 alone, there were 1,095 federal money laundering cases prosecuted - a 45% increase since 2020. The goverment is prosecuting these cases more aggressively than ever.
How Banks Build The Case Against You (In Secret)
But wait - it gets worse then the structuring trap. You think your bank is just a place to put your money, a financial partner helping you run your business. In reality, your bank is a surveillance system that reports directly to federal law enforcement, and they are legaly prohibited from telling you about it.
Banks use sophisticated software that flags customers who repeatedly deposit or withdraw amounts near $10,000. When that software identifies a suspicious pattern, the bank files something called a Suspicious Activity Report, or SAR. Heres the kicker: federal regulations make it a crime for the bank to tell you theyve filed one. Your being investigated by the federal goverment and you cant legally know its happening.
Once that SAR hits the system, it goes to FinCEN (the Financial Crimes Enforcement Network), were it becomes available to the IRS Criminal Investigation division, the FBI, the DEA, and other federal agencies. They can start investigating you immedialty - pulling all your financial records, monitoring your accounts in real time, building a criminal case - and your completely in the dark about all of it. Thats the fantasy version of financial privacy. In reality, the goverment has been watching your accounts for 12 to 18 months before you ever hear from an investigator.
Read that again. By the time a federal investigator contacts you or your business recieves a subpoena, the case against you has been building for over a year. They know every deposit you've made, every withdrawl, every payment to vendors and employees. Theyve mapped your entire financial life. And your just finding out the game started a long time ago.
The Treasury Department's own numbers show that IRS Criminal Investigation maintains a 90% conviction rate. They only bring cases they expect to win. If theyve been building a case against you for a year, the math is not in your favor.
The 91% Reality That Changes Everything
Remember what I said earlier about the Treasury Inspector General? That 91% statistic is the most important number you'll read today.
The vast majority of structuring seizures involve money that was legaly obtained. That means convenience store owners, restaurant operators, car wash owners, and laundromat operators - people running legitmate cash businesses day in and day out - are getting there money seized and facing federal prosecution. Not drug dealers. Not international fraudsters. Regular small business owners who made the wrong kind of deposits.
The reason this happens is becuase structuring is whats called a "conduct crime." The goverment doesnt have to prove the money was dirty. They dont have to show it came from illegal activity. They just have to prove you broke up your deposits to avoid the $10,000 reporting threshold, and that you knew about the threshold when you did it. The conduct itself is the crime.
Heres the irony that should make you angry. If your accountant or bank teller ever told you "just keep it under $10,000 and you wont have to deal with the paperwork," that conversation just became evidence of your knowledge and intent. Your defense - "someone told me to do this" - becomes the prosecutions best evidence that you knew exactly what you were doing when you structured those deposits.
Consider what happened to a Texas retailer in 2023. He made multiple $9,000 deposits over several months. The funds were from completly legitimate sales at his store. He paid all his taxes. His only mistake was admitting he "didnt want to deal with IRS paperwork." The result: criminal fine and forfeiture of over $200,000 in assets. His own words about avoiding paperwork became the proof of criminal intent.
What Civil Forfeiture Actually Means For Your Business
The federal conviction rate for money laundering and structuring cases is around 90%. But heres what keeps small business owners up at night: the government doesnt even need to convict you to take everything you own.
Civil asset forfeiture is a legal mechanism were the government seizes your property - your bank accounts, your business assets, your equipment, even your laundromat building itself - without ever charging you with a crime. Instead of prosecuting YOU, they file a civil case against your PROPERTY. The case will literally be titled something like "United States v. $127,450 in U.S. Currency" as if your money is the defendent.
In civil forfeiture, the burden of proof flips completely. Your money is presumed guilty, and YOU have to prove its innocent. You have to hire a lawyer - with what money, since they just seized all of it? - and sue the government to get your own money back. And even if you eventually win after years of litigation, you've spent all that time fighting, your business has been destroyed, and the government keeps the money until the case fully resolves.
This is critical to understand: the goverment can seize your accounts, shut down your laundromat, and force you into years of expensive litigation without ever proving you did anything wrong. They just need to show "probable cause" that the money is connected to structuring or money laundering activity - which basicly means they need to show you made a pattern of under-$10,000 deposits. The pattern you thought was "smart business" becomes the basis for taking everything.
The Timeline Nobody Prepares You For
If federal investigators show up at your laundromat, heres what the next several months to years typically look like for business owners in your situation:
The investigation has probably been running for 12-24 months already before you knew anything was happening. They have your bank records, your tax returns, and possibly evidence from physical surveillance of your business. The visit or subpoena your recieving today isnt the beginning of there investigation - its closer to the middle or even the end.
Within days of the government making contact, they may freeze your bank accounts through emergency court orders. Civil forfeiture can happen simultaneosly with a criminal investigation. Your employees cant get paid. Your suppliers cant get paid. Your business begins dying immedialty.
If your charged criminaly, the average federal money laundering sentence is 62 months - thats more then five years in federal prison. Add structuring charges and the sentence increases further. And unlike state court, federal sentancing guidelines give judges very little flexibility. The guidlines are what they are, and judges follow them.
Throughout this entire process, your paying legal fees that can easily reach six figures. Your defending yourself in both criminal court and civil forfeiture proceedings at the same time. Your business reputation is completely destroyed. And even if you eventualy beat the charges, you dont get those years back. You dont get your reputation back. The government kept your money the entire time the case was pending.
The Voluntary Interview Trap
Heres were people make there biggest mistake. Federal agents show up at your laundromat and ask if you have "a few minutes to talk." They seem friendly. They say theyre just trying to understand your business. They assure you that cooperating will help clear things up faster.
This is the trap Todd Spodek warns every client about. Those "friendly conversations" are interrogations designed to get you to make statements that prosecutors will use against you at trial. Everything you say is being recorded and will be used to build there case.
When you explain your deposit patterns to try and seem helpfull, your providing evidence that you knew about the $10,000 threshold. When you tell them your accountant said to keep deposits under $10,000, your proving intent to structure. When you try to explain why your deposits looked suspicious, your creating a record of explanations that prosecutors will tear apart.
The correct response to federal investigators asking for a "voluntary interview" is polite refusal and immediate contact with a federal criminal defense attorney. This is your constitutional right under the Fifth Amendment, and exercising it cannot be used against you. But talking without a lawyer present almost certainly will be.
The Defenses That Actually Work
At Spodek Law Group, we've seen what defenses succeed and which ones fail in these cases. Understanding the landscape matters becuase not every approach works.
Lack of Knowledge Defense: Structuring requires proving you knew about the $10,000 reporting threshold. If you genuinely didnt know CTRs existed - never heard about them, never discussed them with anyone - this can be a valid defense. The problem is that its 2026 and most people have encountered this information somewhere. And if your accountant or bank ever mentioned it, that conversation becomes evidence against you.
Legitimate Business Practices Defense: If your deposit patterns reflect actual business revenue and theres a legitimate reason for the amounts - say, you deposit on Mondays and your weekend revenue consistently runs $8,000-$9,000 - you may be able to argue the pattern wasnt intentional structuring. This requires extensive documentation and often expert testimony about industry norms for laundromat operations.
Constitutional Challenges: If investigators violated your Fourth Amendment rights through illegal searches or Fifth Amendment rights through improper interrogation, evidence may be excluded from trial. This is technically complex and requires an attorney who understands federal constitutional law deeply.
Challenging the Predicate Offense: Money laundering requires an underlying crime that generated the funds. If prosecutors cant prove a predicate offense - if theirs no drug trafficking, no fraud, no tax evasion - the money laundering charges may collapse even if structuring charges remain.
What doesnt work: "I didnt know it was illegal." Ignorance of the law isnt a defense. What also doesnt work: "The money was all legitimate." Remember, the pattern is the crime, not the source of funds. And what definately doesnt work: trying to explain yourself to investigators without an attorney present.
What You Should Do Right Now
If your reading this becuase federal investigators have already made contact with your laundromat, stop everything and call a federal criminal defense attorney immedialy. Do not talk to investigators. Do not try to explain. Do not assume you can clear this up on your own. Every word you say can and will be used against you, and the governments case is already substantially built.
If your reading this becuase youve been making under-$10,000 deposits and your worried about what that means, heres what Todd Spodek advises clients in this situation:
First, stop the pattern immediately. Going forward, deposit whatever amount you actually have from your business operations. If you have $15,000 from a good week, deposit $15,000. The CTR gets filed, and thats fine - thats how its supposed to work. What triggers investigations is the obvious pattern of staying just under the threshold week after week, not the occasional large deposit.
Second, do not go back and try to "fix" old deposits by suddenly depositing large amounts. Dramatic changes in behavior can also trigger additional scrutiny and look like consciousness of guilt.
Third, document everything about your legitimate business operations going forward. Keep records of machine revenues, customer counts if you have them, utility bills that correlate with usage patterns. You want to be able to demonstrate that your deposits matched your actual business activity.
Fourth, and most importantly, consult with a federal criminal defense attorney even if no investigation has started. A proactive consultation can help you understand your exposure and develop a strategy before investigators come calling. The cost of an hour of legal advice is nothing compared to the cost of fighting federal charges.
The Clock Is Already Running
If the federal government is investigating your laundromat, they had months or years to build their case against you. You have days to respond effectively. That asymmetry defines everything that comes next.
They know your deposits. They know your withdrawals. They know who you paid and who paid you. They have your tax returns. They may have surveillance footage. They definitely have a theory about what you did and why you did it.
What you have is the presumption of innocence - which matters in court but not during the investigation phase. What you have is the right to counsel - which only helps if you actually use it. What you have is this moment, right now, before you say anything that makes the situation worse.
The government built a system where your legitimate cash business looks identical to money laundering. They built a system where avoiding paperwork is a federal felony. They built a system where they can take your money without ever proving you committed a crime. That system is working exactly as designed.
Your only move is to get representation from attorneys who understand how that system actually operates and how to fight within it.
Call Spodek Law Group at 212-300-5196. The call is confidential. The consultation is free. And the alternative - facing federal investigators alone - is a mistake that can cost you everything you've built over years of hard work.
The 91% didnt have lawyers when they needed them most. Dont become another statistic.
