Federal Sentencing Guidelines for Money Laundering

Money laundering is the federal prosecutor's sentence multiplier. That's what it is. That's how it functions in the system. Section 1956 carries a 20-year maximum per count - and each financial transaction is a separate count. Move money ten times? 200 years of theoretical exposure. Fifty transactions in a fraud scheme? 1,000 years. Welcome to Spodek Law Group. Our goal is to explain how money laundering actually works in federal court, because the reality is far more dangerous than most people realize when they hear the charge.

Here's what nobody explains until you're staring at an indictment: money laundering is almost never a standalone charge. It's stacked on top of whatever underlying crime generated the money. Tax evasion carries a 5-year maximum. Wire fraud carries 20 years. But add money laundering counts for every time the proceeds moved - and suddenly the add-on charge produces more exposure than the original crime. The DOJ manual explicitly instructs prosecutors to charge each transaction as a separate count. This isn't prosecutorial discretion. It's policy. It's designed to work this way.

The mathematics of count multiplication changes everything about how these cases get resolved. When a prosecutor can credibly threaten 200 years for 10 transactions, the plea leverage is overwhelming. Accept 5 years or risk everything at trial. Most defendants take the deal. The 20-year maximum per count isn't about actually sentencing anyone to 20 years - it's about creating leverage to force guilty pleas. That's the system. That's what Todd Spodek explains to every client facing these charges.

Twenty Years Per Transaction Is the Point

OK so heres the thing most people miss about federal money laundering. The statute wasnt designed to punish hiding money. It was designed to punish moving money - and to punish each movement separately. Thats a critical distinction that changes everything about how these cases work. Section 1956 and Section 1957 cover overlapping conduct, but there designed for different purposes in prosecution. Section 1956 is the heavy hitter - 20 years maximum per count. It requires proof that you knew the money came from criminal activity AND that you conducted a financial transaction with intent to either promote the underlying crime, conceal the source, or avoid reporting requirements.

The statute covers three types of conduct: domestic money laundering transactions (Section 1956(a)(1)), international money laundering (Section 1956(a)(2)), and undercover "sting" operations where law enforcement provides the dirty money (Section 1956(a)(3)). All three carry the same 20-year maximum. All three get sentenced under USSG 2S1.1. The guidelines start at base offense level 8, then increase based on the value of laundered funds using the same loss table that applies to fraud offenses.

Heres were the trap springs. The Department of Justice Criminal Resource Manual states explicitly that "each transaction should be charged in a separate count." This isnt guidance - its instruction. Charging multiple transactions in a single count is considered "duplicitous." So when prosecutors look at a money laundering case, there not asking "how much money moved." There asking "how many times did it move." Each wire transfer. Each deposit. Each withdrawal. Each payment. Seperate count. Seperate 20-year maximum.

Think about what this means for an ordinary fraud scheme. You commit wire fraud, then move the proceeds through three bank accounts before spending them. Thats the underlying wire fraud charge plus three money laundering counts. The wire fraud carries 20 years. The money laundering carries 60 years (three counts times twenty). The "add-on" charge just tripled your exposure - and thats a simple case with only three transactions.

At Spodek Law Group, weve seen cases were clients face dozens of money laundering counts for what they thought was a single scheme. Every time money touched a new account, every time a wire went out, every time a check cleared - thats a potential count. Prosecutors dont always charge every possible count. But they use the THREAT of all those counts as plea leverage. "We could charge fifty counts. Were offering to charge five. Take the deal."

The Two-Statute Trap

If Section 1956 is the heavyweight, Section 1957 is the backup that makes escape almost impossible. Section 1957 carries a 10-year maximum per count - still serious - but its much easier to prove. The government dosent need to show intent to conceal or promote. They just need to show you engaged in a monetary transaction over $10,000 in criminally derived property.

Heres why this matters for defendants. Sometimes the evidence for Section 1956 is weak. Maybe the prosecution cant prove you knew the specific source of the funds. Maybe they cant show intent to conceal. In a world with only Section 1956, that might mean aquittial or dismissal. But prosecutors have Section 1957 as a fallback. If the heavy charge dosent stick, the lighter charge probably will.

The $10,000 threshold in Section 1957 basicly means any significant financial transaction triggers potential liability. Deposit a check for $15,000 that came from fraud? Section 1957. Wire $25,000 that originated in tax evasion? Section 1957. Buy a car with $50,000 in drug proceeds? Section 1957. The knowledge element is there - you have to know the money came from criminal activity - but proving knowledge is usualy easier then proving intent to conceal.

This two-statute structure creates a trap with no easy exit. Its deliberate. Its how the statute was designed to function. Prosecutors can charge Section 1956 counts for the serious money movements with clear concealment intent, and Section 1957 counts for everything else. Or they can charge Section 1956 at trial and fall back to Section 1957 if the jury dosent buy the concealment argument. Either way, the defendant faces liability. The question becomes how much, not wheather.

Todd Spodek tells clients that fighting both statutes requires differant strategies. Section 1956 challenges focus on intent - you didnt know, you didnt intend to conceal, there was a legitimate business purpose. Section 1957 challenges focus on knowledge - you genuinly beleived the money was clean, the transaction was ordinary business, you had no reason to suspect criminal origin. Both defenses are possible. Both require careful factual development.

The Add-On That Becomes the Main Punishment

Heres the uncomfortable truth about money laundering prosecutions. In most cases, the money laundering charges create more exposure then the underlying crime that generated the dirty money. Thats not an accident. Thats the point.

Consider tax evasion. The maximum sentence under 26 USC 7201 is 5 years. If you evade $500,000 in taxes and then move that money through three accounts to hide it, you have one tax evasion count (5 years max) plus three money laundering counts (60 years max under 1956, or 30 years under 1957). The "hiding the evidence" part carries twelve times more exposure then the original crime.

Wire fraud has a 20-year maximum - the same as Section 1956. But wire fraud is typically one count per scheme, while money laundering is one count per transaction. A fraud scheme might generate one wire fraud count and twenty money laundering counts. Even with the same per-count maximum, the multiplication effect means money laundering exposure dwarfs the underlying fraud.

This is why prosecutors love adding money laundering to everything. It transforms the case mathematics. A defendant who might fight a single 20-year count is much more likely to plead when facing 400 years of theoretical exposure. The plea leverage is immense. And becuase money laundering is so easy to add - nearly every financial crime involves moving money - prosecutors can stack these counts almost automaticaly.

Weve seen this play out at Spodek Law Group across dozens of cases. The client thinks there charged with fraud. There actualy facing a fraud charge plus fifteen money laundering counts. The fraud might have a reasonable defense. But with 300 years of money laundering exposure hanging over them, fighting at trial seems impossibly risky. Most clients take whatever deal gets offered. Thats exactaly what the system is designed to produce.

Paul Manafort Faced 19-24 Years Before Sentencing

The Paul Manafort case shows exactaly how money laundering exposure works in high-profile prosecutions. Manafort, President Trump's former campaign chairman, was indicted on charges including money laundering for allegedly moving over $30 million through offshore bank accounts between 2006 and 2015.

The federal sentencing guidelines calculated a range of 19 to 24 years for Manafort's convictions. Not for the tax fraud. Not for the bank fraud. For the full package including money laundering charges. The jury convicted him on eight counts: two counts of bank fraud, five counts of tax fraud, and one count of failing to declare a foreign bank account. The money laundering charges were central to his ultimate exposure.

Manafort eventualy received 47 months in the Virginia case and an additional 43 months (with 30 concurrent) in the DC case, totaling approximately 7.5 years. He was also ordered to pay $24.8 million in restitution. The sentence was well below the guideline range - but the guideline range showed what money laundering exposure can produce when combined with other financial crimes.

Let that sink in. The guidelines called for 19-24 years. He got 7.5. Thats a massive variance. But most defendants dont get treated like high-profile political figures. Most defendants facing a 19-24 year guideline range plead guilty long before any judge considers variance. The exposure number is what drives decisions - not the final sentence that might result years later.

What's important about Manafort isnt the final sentence. Its the exposure. A guideline range of 19-24 years creates enormous pressure to cooperate, to plead, to accept whatever terms might reduce that number. Even if the judge ultimately sentences below guidelines, the defendant dosent know that going in. The exposure drives decisions. Most defendants cant afford to gamble their lives on the possibility of judicial variance. They see the guideline range, they see the evidence, and they take whatever deal gets offered. Thats how the system is designed to function.

The Guidelines Math

Money laundering sentencing under USSG 2S1.1 follows familiar patterns if youve looked at fraud sentencing - but with some unique twists that make it potentialy worse.

Base offense level starts at 8. Then add levels based on the value of laundered funds:

• Laundered funds between $6,500 and $15,000: add 2 levels
• Laundered funds between $250,000 and $550,000: add 12 levels
• Laundered funds over $550 million: add 30 levels

If convicted under Section 1956 (not 1957) and the offense involved "sophisticated laundering," add 2 more levels. Sophisticated laundering means "complex or intricate" conduct "typically involving the use of layering transactions" intended to make funds appear legitimate. Many money laundering cases involve layering by definition - thats what moving money through multiple accounts is.

If you were "in the business of laundering funds," additional enhancements apply. Factors include: regularly engaging in laundering, laundering over extended periods, laundering from multiple sources, and generating substantial revenue from laundering services. Professional money launderers face significantly higher offense levels.

Prior convictions for money laundering or currency structuring offenses trigger additional enhancements. The guidelines explicitly increase punishment for repeat offenders in this area. Think about that for a second. If youve been convicted before of currency structuring - which basicly means making deposits under $10,000 to avoid bank reporting - that prior conviction increases your money laundering sentence. The system remembers and compounds.

Heres were it gets interesting. The base offense level starts at 8, but if the offense involved criminally derived funds and the defendant knew or beleived the funds were proceeds of unlawful activity, the offense level is actually the greater of 8 OR "the offense level for the underlying offense from which the laundered funds were derived." This means if you laundered proceeds from a high-offense-level crime (like drug trafficking), your money laundering offense level might exceed what youd expect from the value tables alone.

At Spodek Law Group, we explain that money laundering guidelines arent just about how much money moved - there also about what crime generated that money, how sophisticated the laundering was, and wheather you did this once or repeatedly. All of these factors compound.

Fighting Count Multiplication

If the system is designed to stack counts and create overwhelming exposure, what defenses actualy work? This is were experienced federal defense counsel matters.

The first defense is challenging the "transaction" definition itself. Not every movement of money is a seperate transaction for charging purposes. Courts have required that each charged transaction be meaningfully distinct. If prosecutors are charging ten counts for what is essentialy one continuous transfer, defense counsel can argue multiplicious charging - that multiple counts describe the same offense.

Second, attack the knowledge element. Both Section 1956 and Section 1957 require proof that the defendant knew the funds came from criminal activity. Willful blindness can satisfy this element, but genuine lack of knowledge is a defense. If you reasonably beleived the money was legitimate, you may not have committed money laundering - regardless of what the money actualy was.

Third, challenge the "proceeds" characterization. Money laundering requires that the funds be "proceeds" of specified unlawful activity. If prosecutors cant prove the underlying crime, they cant prove money laundering. This is why defendants are sometimes aquitted of the predicate offense but convicted of laundering - the burden of proof on the underlying crime is lower for money laundering purposes (preponderance, not beyond reasonable doubt). But if the defense can create doubt about both, both charges may fail.

Fourth, challenge the intent element for Section 1956 specifically. You must have conducted the transaction with intent to promote the crime, conceal the nature/location/source/ownership/control of proceeds, or avoid reporting requirements. Legitimate business transactions dont satisfy this element even if they happen to involve dirty money. The intent to conceal or promote must be proven.

Fifth, fight the loss calculation. The value of laundered funds drives the offense level. If prosecutors overstate the amount, the guideline range is artificially high. Defense counsel can challenge what constitutes "laundered funds" versus legitimate funds that happened to move through the same accounts.

Todd Spodek tells clients that money laundering cases are winnable - not always at trial, but through strategic positioning and aggressive defense work. The count multiplication looks overwhelming on paper. But many counts can be consolidated. Many can be challenged on the elements. The key is having counsel who understands how prosecutors build these cases and how to dismantle them systematicaly.

Sixth, negotiate the count structure during plea discussions. Prosecutors often overcharge knowing they will drop counts as part of negotiations. If your facing 30 money laundering counts, the goal isnt necessarily aquittial on all 30 - its getting the government to consolidate or dismiss enough counts that the exposure becomes manageable. This is were experienced federal defense counsel earns their fee. Understanding which counts are weakest, which overlap, which can be challenged - thats the difference between a 15-year guideline range and a 7-year one.

What This Means for Your Case

Federal money laundering sentencing uses USSG 2S1.1, with base offense level 8 and value-based enhancements similar to fraud offenses. But the real danger isnt the guidelines - its the count multiplication. Each transaction is a separate count. Each count carries up to 20 years (Section 1956) or 10 years (Section 1957). The exposure compounds much faster then any other federal charge.

If your facing money laundering charges, understand that your dealing with a statute designed for sentence multiplication. The DOJ instructs prosecutors to charge each transaction separately. The two-statute structure ensures fallback options. The add-on effect means money laundering often produces more exposure then whatever underlying crime youre accused of committing.

Call Spodek Law Group at 212-300-5196. We handle federal money laundering cases from our office in the Woolworth Building in Manhattan, and we represent clients nationwide. The consultation is free. The mistake of treating money laundering as "just an add-on charge" - thats not free. Money laundering is often were the real punishment comes from. The transaction multiplication is designed to create overwhelming exposure. Dont face these charges without counsel who understands the mathematics of federal sentencing and how to fight back against count stacking.

The federal banking system creates a paper trail for every transaction. Banks are required to file Currency Transaction Reports for deposits over $10,000. Suspicious Activity Reports get filed when patterns look unusual. Wire transfers leave electronic records. All of this becomes evidence. The same financial infrastructure that makes modern commerce possible also makes money laundering prosecutions easier to prove. Every transaction you thought was private has a record somewhere. Prosecutors know were to find it. And once they find it, they know how to turn those records into counts - each one carrying 20 years of exposure that compounds into centuries of theoretical prison time.