Welcome to Spodek Law Group. Our goal is to give you the reality of what happens when federal agents start investigating your money transfer business - not the sanitized version other attorneys present, not the procedural fiction, but the actual truth about what you're facing and why most business owners discover the investigation far too late to protect themselves.
You found out. Maybe an agent showed up at your door. Maybe your bank suddenly closed your accounts. Maybe an employee mentioned they were questioned. However it happened, you now know federal investigators have been looking at your money services business. Here is the first thing you need to understand: this investigation did not start when you found out about it. The federal government has been building this case against you for six to eighteen months. They have subpoenaed your bank records. They have interviewed your customers. They have mapped every transaction. By the time they let you know they're watching, they've already decided you're going down.
The second thing you need to understand is even more difficult to accept. You probably think this investigation is about money laundering - about the possibility that some customer sent drug money or fraud proceeds through your business. But the federal government doesn't necessarily need to prove that. Under 18 U.S.C. § 1960, simply operating a money transmitting business without proper state licensing is a federal felony punishable by five years in prison. They don't need to prove criminal intent. They don't need to prove you knew anything was wrong. They just need to prove you transmitted money without every required license in every state where you had customers.
What Federal Investigation of Your Money Transfer Business Actually Means
Most MSB owners don't understand what federal investigation actualy means. They think it's like state investigations - some paperwork issues, maybe a fine, business as usual eventually. That's not how it works. Federal prosecutors have a 93% or higher conviction rate. Not a typo. Real number. They achieve this by only bringing cases they're certain to win. If your being investigated by federal agents, they have already reviewed the evidence and decided it supports prosecution.
The structure of federal MSB investigations follows a predictable pattern that works against you at every stage. First, FinCEN identifies potential targets through the registration database and suspicious activity reports. Your own compliance filings became the starting point for investigating you. Then IRS Criminal Investigation, Homeland Security Investigations, or the FBI takes the lead - often working in coordination. They subpoena your bank records going back years. They interview customers and employees. They build their case completely before you ever know your a target.
By the time agents make contact with you, they've answered most of their questions. What remains is getting you to fill in the gaps - to explain the things they couldn't figure out from documents alone. Every word you say during these conversations is recorded and analyzed. Inconsistencies become evidence of consciousness of guilt. Nervousness becomes evidence of deception. And if you say something that isn't perfectly accurate - even by mistake - that's a seperate federal crime under 18 U.S.C. § 1001. Lying to federal agents carries its own five-year maximum sentence.
The Licensing Trap Nobody Explained
Heres were most MSB owners get confused. You registered with FinCEN. You filed your Form 107. You have your registration number. You thought that made you legal. Wrong. FinCEN registration is federal. But money transmission is regulated primarily at the state level. You need a money transmitter license in every state where you have customers - not just where your physically located.
The Money Laundering Suppression Act of 1994 made operating an unregistered MSB a federal crime. But that was just the beginning of the regulatory maze. The Bank Secrecy Act imposes anti-money laundering program requirements. Each state has its own money transmission laws. Some states exempt certain types of businesses. Others don't. The rules change regularly, and keeping up is a full-time job that most small business owners can't afford.
Think about what this means for a typical remittance business. Your located in New York. You have customers in New York, New Jersey, California, Texas, Florida. Maybe customers in fifteen or twenty states. Each state has its own licensing requirements, its own application process, its own fees, its own bonding requirements. Some states have reciprocity agreements. Most dont. The patchwork is deliberatly complicated.
Stop. This is the trap. Operating without a license in even one state where you have customers makes you an unlicensed money transmitter under federal law. Doesn't matter that you have licenses in ten other states. Doesn't matter that you tried to get a license and the application is pending. Doesnt matter that you genuinly beleived you were compliant. The statute reads "knowingly" operates - but courts have interpreted this to mean knowledge that you were operating a money transmission business, not knowledge that you were unlicensed. As Todd Spodek explains to clients: the government only needs to prove you knew you were in the money transmission business. They don't need to prove you knew you were breaking the law.
Wait. It gets worse. Many states have changed there licensing requirements in recent years, especialy around cryptocurrency and digital payments. A business that was fully licensed in 2019 might have compliance gaps in 2024 without realizing it. And those gaps can form the basis of federal prosecution.
How Your Own Customers Became Witnesses Against You
This is the part no other law firm website will tell you becuase it's too uncomfortable. The people you helped - the customers who used your money transfer service to send money to their families overseas, to pay bills, to conduct legitimate business - those people are now cooperating witnesses against you.
Heres how it works. Federal investigators identify customers who sent or recieved suspicious transactions. They approach these customers. They explain that the customer is potentially implicated in money laundering. They offer a deal: cooperate against the money transfer business, provide testimony about how the business operated, and the government won't prosecute you. It's a deal most people take.
And you believed them? Your customers beleive the federal agents are there friends now. They beleive that telling the truth will help everyone. They don't realize that "the truth" as they remember it might not match the documents perfectly. They don't realize that agents are trained to ask questions in ways that produce incriminating answers. They dont realize there own memories will be shaped by the investigator's theories about what happened.
The irony is devastating. The same customers you served - maybe for years, maybe people you knew by name, people whos children you watched grow up through photos they showed you - those customers are now sitting in federal grand jury rooms describing your business in the worst possible terms. Not becuase they want to hurt you. Becuase they want to save themselves.
What makes this especially painful is the power imbalance. Federal agents have subpoena power. They can compel testimony. They can threaten prosecution. They can offer immunity deals. Your former customers have every incentive to tell prosecutors what they want to hear - and no incentive to protect you. The relationship you thought you had, built on years of service to their community, means nothing when someone is facing there own potential prosecution.
Worse. Some of these cooperating witnesses may genuinely believe they're telling the truth. But memory is malleable. Investigators ask leading questions. They suggest narrative frameworks. They show documents and ask witnesses to confirm interpretations. By the time a witness testifies before the grand jury, what they "remember" has been shaped by hours of interviews with federal agents. The story they tell might be sincerely beleived - and still be devastating to your defense.
Willful Blindness: When Not Knowing Isnt a Defense
Most MSB owners think there strongest defense is "I didn't know." I didn't know that customer was a drug dealer. I didnt know those funds came from fraud. I didn't know I needed a license in that state. Heres the problem: federal law doesn't require prosecutors to prove you actualy knew. They can prove "willful blindness" instead.
Willful blindness means: if you deliberately avoided learning something, the law treats you as if you knew it. Did you ask customers where there money came from? Did you investigate when transactions seemed unusual? Did you file suspicious activity reports when something felt wrong? If you didn't - if you avoided asking questions becuase you didnt want to know the answers - prosecutors will argue thats the same as knowing.
Courts have upheld this doctrine repeatedly. In case after case, MSB owners who genuinly beleived they were running legitimate businesses have been convicted based on what they should have known, not what they actualy knew. The standard isnt whether you were a criminal. The standard is whether a reasonable person in your position would have been suspicious. And federal prosecutors are very good at constructing narratives were the answer to that question is always yes.
Cooperation window closes. 5K1.1 territory. Thats defense lawyer shorthand for the federal rule that allows reduced sentences for cooperating defendants. But heres the thing about cooperation: it has to happen early, it has to be complete, and you have to have something valuable to offer. If your the last one to the table, there's nothing left to trade.
The First 72 Hours After You Find Out
The first 72 hours after you learn of a federal investigation are the most important - and most dangerous - of your life. What you do in this window will determine everything that follows. Most MSB owners make catastrophic mistakes during this period becuase they dont understand the stakes.
First mistake: talking to investigators without a lawyer. The agents who contact you are trained to seem friendly, understanding, helpful. They might suggest this is all a misunderstanding that can be cleared up with a quick conversation. They might imply that getting a lawyer makes you look guilty. Don't believe them. Anything you say - anything - becomes evidence. The "friendly" agent is building a case against you with every word.
Second mistake: contacting employees or customers. Your instinct is to find out what happened, to understand what the investigators are asking about. But contacting witnesses after you learn of an investigation can be charged as obstruction of justice or witness tampering. Even innocent conversations - "hey, did anyone ask you about the business?" - can become additional felony charges.
Third mistake: moving money or destroying documents. Panic makes people do stupid things. Deleting texts. Transferring funds to family members. Throwing away old records. Every one of these actions, if discovered, adds years to your potential sentence. Federal investigators assume you'll panic. They're watching for exactly these mistakes.
Forfeiture. This is what keeps people awake at 3am. The federal government can seize your assets before you're convicted of anything. Your bank accounts. Your house. Your car. Everything you've built over years of work can be frozen based on probable cause that the assets are connected to criminal activity. You can't pay your mortgage. You can't pay your employees. You can't pay your lawyer. This is deliberate - its designed to force quick plea deals from defendants who cant afford to fight.
The civil forfeiture process runs parallel to the criminal case - and has a lower burden of proof. In criminal court, the government must prove guilt beyond a reasonable doubt. In civil forfeiture, they only need preponderance of the evidence. This means your assets can be permanantly taken even if your never convicted of anything. Even if charges are eventually dropped. The forfeiture is a seperate proceeding and you have to actively fight to get your property back.
And there's another consequence many MSB owners don't think about until it's too late. Immigration. If your not a citizen, federal conviction for money transmission crimes can result in deportation. It doesn't matter how long you've lived here. Doesnt matter if your family is here. Doesnt matter if your children are citizens. Certain money laundering offenses are considered aggravated felonies under immigration law. One conviction can end decades of life in America.
Why 97% of Federal Cases Never Go to Trial
Heres a number that should terrify every MSB owner facing federal investigation: 97% of federal cases end in guilty pleas. Less than 3% go to trial. And the conviction rate at trial is still over 80%. The system is designed to produce pleas, not trials.
The trial penalty is real. If you take your case to trial and lose, you will receive a significantly harsher sentence then if you had pled guilty. Judges call this "acceptance of responsibility" - defendants who plead guilty get credit for not wasting the court's time. In practice, it means exercising your constitutional right to trial comes with a punishment.
Look at the recent cases. Jose Luis Garcia, co-owner of Envios Express in Oakland, pled guilty to conspiracy to commit money laundering. Sentenced to 12 months. Raul Rodriguez in Miami operated a cryptocurrency exchange converting digital currency to cash. Sentenced to 57 months - nearly five years federal prison. He exchanged over $5 million between 2016 and 2022. David Motovich in Brooklyn took his case further and was convicted of operating illegal money transmitting business, failure to file currency transaction reports, bank fraud, money laundering, and aggravated identity theft. Sentenced to 15 years. Ordered to forfeit $38 million including his Manhattan penthouse with a private swimming pool.
That's not a typo. Fifteen years. The difference in outcomes is staggering. The difference between a one-year sentence and a fifteen-year sentence often comes down to how the case is handled from the beginning. The charging decisions prosecutors make. The evidence they choose to emphasize. The cooperation they receive - or don't receive - from the defendant.
At Spodek Law Group, weve seen this pattern hundreds of times. The clients who come to us early, before they've talked to investigators, before they've made mistakes in the first 72 hours - those clients have options. The clients who wait, who try to handle it themselves, who beleive they can explain there way out of trouble - those clients have fewer and worse options.
What Spodek Law Group Does Differently
Every federal criminal defense firm claims to be different. Most aren't. Heres what actually matters when your facing investigation of your money transfer business.
First, we understand MSB regulations at a technical level. This isn't a generic white-collar case. The intersection of FinCEN requirements, state licensing, Bank Secrecy Act compliance, and federal criminal law is specific and complicated. Getting the technical details right - understanding exactly what you were required to do and whether you did it - is essential for building any defense.
Second, we engage immediately with prosecutors. The critical window in federal cases is before indictment. Once you're indicted, options narrow dramatically. Before indictment, there's room to negotiate - to present mitigating evidence, to challenge the government's theory, to explore alternatives to prosecution. Todd Spodek has spent years building relationships with federal prosecutors in districts across the country. Those relationships matter when your future is on the line.
Third, we're honest about outcomes. We won't tell you everything will be fine if it won't. We wont promise results we cant deliver. What we will do is give you a realistic assessment of where you stand and what options are actualy available. Sometimes that means negotiating the best possible plea. Sometimes that means fighting charges that shouldn't have been brought. The right approach depends on the facts of your specific case.
Fourth, we understand the stakes beyond the criminal case itself. Federal prosecution doesn't happen in a vacuum. There's the civil forfeiture running parallel. There's the potential immigration consequences. Theres the professional licensing issues, the banking relationships that will never recover, the reputational damage that follows you forever. A federal conviction for money transmission crimes appears on every background check for the rest of your life. It affects employment, housing, credit, travel. We help clients understand and prepare for all of these consequences - not just the immediate criminal case.
The clock started when you learned about this investigation. Every day that passes without proper representation is a day the government continues building its case while you're unprotected.
The people who sent money through your business - some of them are already cooperating. The bank records are already in federal hands. The transaction patterns have already been analyzed. What hasnt been decided yet is how your case ends.
Call Spodek Law Group at 212-300-5196. We answer calls personally. We understand what your facing. And we've helped MSB owners navigate federal investigations when it seemed like there was no way out.
The federal government had months to prepare there case against you. You have days to respond. Use them.
