A money laundering charge rarely arrives alone. It usually rides on top of another accusation — fraud, drugs, a kickback scheme — and it can double the exposure of the case underneath it.

That’s the part that catches people off guard. You can be looking at more prison time for what you did with the money than for how it was earned. And often the government’s real goal is the money itself.

Keith & Lorfing defends individuals and businesses accused of federal money laundering under 18 U.S.C. §§ 1956 and 1957, and related structuring charges under 31 U.S.C. § 5324. Our team is led by a former Assistant U.S. Attorney and includes a retired federal judge of counsel.

If agents have contacted you, or you’ve learned your accounts are frozen, speak with our Houston money laundering defense team before you say or sign anything.

What the government has to prove

Money laundering, at its core, is the crime of trying to make illegal money look legal — or using illegal money in a way the law forbids. But the statutes are more specific than that, and the details decide cases.

Two ideas run through every money laundering charge. First, the money has to be proceeds of a crime. Second, that underlying crime has a name in the law: specified unlawful activity, often called the predicate offense.

The predicate is the source. It might be wire fraud, bank fraud, drug trafficking, healthcare fraud, or a securities scheme that also leads to SEC fraud allegations — the crime that allegedly generated the money in the first place. When the alleged proceeds come from loans, applications, or transactions involving a financial institution, a Federal Bank Fraud Defense Lawyer can help address the underlying bank fraud theory while the laundering defense challenges what the government says happened to the money afterward.

Because laundering is a second layer, it is almost always stacked on the predicate charge, and frequently on a federal conspiracy charge as well. That stacking is exactly why the sentence exposure climbs so fast.

Section 1956 vs. Section 1957 — a real difference

These two statutes get lumped together, but they are not the same crime, and the difference often decides how a case is defended.

Section 1956 is the serious one. It covers three kinds of conduct, and each one requires that you knew the money was criminal proceeds:

• Concealment laundering: conducting a transaction designed to hide the source, ownership, or control of the money.
• Promotion laundering: using the money to keep the underlying criminal activity going.
• International-transfer laundering: moving funds into or out of the United States to promote a crime or conceal proceeds.

Each § 1956 theory demands both knowledge that the funds were dirty and a specific intent — to conceal, to promote, or to evade reporting. That intent requirement is where many of these cases are won or lost.

Section 1957 is simpler, and that makes it dangerous. It criminalizes spending or moving more than $10,000 of criminally derived money through a bank or business in a single transaction. There is no requirement that you tried to hide anything — just that you knew the money came from crime and you used it.

That lower bar is why prosecutors often reach for § 1957. It’s easier to prove. Which statute you’re actually charged under changes the entire defense, because the government’s burden is very different in each.

If you’re not sure what you’re facing, ask a federal defense lawyer to review the charges line by line.

Structuring is a different crime (31 U.S.C. § 5324)

Structuring gets confused with money laundering constantly, but it’s a separate offense — and the money involved doesn’t even have to be dirty.

Banks must report cash transactions over $10,000 to the government. Structuring is breaking a larger amount into smaller deposits or withdrawals to keep the bank from filing that report.

Here’s the trap: you can be charged with structuring even if the cash was earned completely legally. The crime is the intent to dodge the reporting requirement, not the source of the funds.

That’s a genuinely unfair-feeling result, and it’s also a defense opening. The government still has to prove you knew about the reporting rule and acted specifically to avoid it — not that you simply made several deposits for ordinary reasons.

How money laundering cases are investigated

These are paper cases. The evidence is in the bank records, and the investigation usually starts inside the financial system before any agent knocks.

Banks are required to file two kinds of reports that feed directly into federal investigations:

• Suspicious Activity Reports (SARs): filed when a bank flags a transaction as unusual — the customer never sees them.
• Currency Transaction Reports (CTRs): filed automatically on cash transactions over $10,000.

From there, IRS Criminal Investigation, the FBI, and the DEA “follow the money” — subpoenaing account records, mapping transfers, tracing where funds moved and who controlled them. By the time you hear about it, they may already have years of your financial history.

How these investigations begin has changed. When our managing partner served as a federal prosecutor, many financial cases started with a whistleblower and a spreadsheet. Today the government leads with data — analytics and AI-assisted review that scan transaction patterns across whole industries and flag outliers automatically.

The lesson is blunt: you no longer need an angry employee to draw scrutiny. Transacting differently from your peers can be enough, and you don’t want to be the outlier in a dataset the government is already mining. The DOJ has also shifted toward charging individuals — executives, controllers, and decision-makers — not just companies. These cases move quietly on the surface while they build underneath, so acting early is about leverage, not a deadline.

The two costliest early mistakes

Two early decisions tend to hurt people the most.

• Deleting or “cleaning up” records. As a former prosecutor, our managing partner saw this again and again: destroying emails, documents, or financial records doesn’t make a problem disappear — it creates a second one. Obstruction is often easier to prove than the underlying conduct, because the government can show what existed, what was removed, and when.
• Putting your head in the sand. Ignoring a quiet investigation lets the government keep building while your options shrink.

The flip side is leverage. Evidence preserved and produced strategically through counsel can become an advantage — sometimes narrowing exposure or improving your positioning rather than deepening the hole.

This is a moment where early counsel matters enormously, because how you respond to a subpoena or an agent visit can either protect you or hand the government its next piece of evidence. Our guide to what to do when federal agents want to talk walks through those first decisions.

Our managing partner has been on the training side of this world — he once delivered a lecture to bankers titled A Banker’s Guide to Money Laundering, explaining how these schemes are spotted and reported. We understand these cases from the inside of the reporting system that generates them.

What a money laundering charge puts at risk

The prison exposure is severe — and it’s driven mostly by the value of the laundered funds, which we break down in the section below. But for many clients the fight over their assets comes first, and forfeiture is the reason.

Beyond prison, the collateral damage is real. Depending on the facts of your case, you may face:

• Asset forfeiture: This is central to these cases. The government can pursue both criminal forfeiture (tied to a conviction) and civil forfeiture (a separate action against the property itself), and it often moves to seize accounts, homes, and cash before trial — sometimes before you’re even charged.
• Immigration consequences: For non-citizens, a laundering conviction can trigger removal. Under Padilla v. Kentucky, your lawyer must advise you on those effects before any plea.
• Professional and financial fallout: Banking, real estate, and other licensed professionals can lose the credentials their careers depend on.

None of these outcomes is automatic. How early and how well the case is defended can change every one of them.

If your accounts are already frozen, talk to us about your options — moving quickly on forfeiture matters.

How we defend money laundering cases

The strongest money laundering defense usually attacks the government’s story about the money — where it came from, what you knew, and whether the numbers hold up.

Our approach is built around concrete strategies:

• Lack of knowledge: Both statutes require that you knew the money was criminal proceeds. If you genuinely didn’t know, the government’s case fails at its foundation.
• No intent to conceal: For § 1956 concealment charges, the government must prove a transaction designed to hide something. Ordinary business banking, done openly, is not concealment.
• The funds were legitimate: If the money came from lawful sources, it isn’t “proceeds” of anything — and there’s no laundering.
• Commingling problems: When legal and alleged illegal money sit in the same account, the government must untangle them. That’s often far harder than the indictment admits.
• Tracing and attribution disputes: Prosecutors have to trace specific funds to a specific crime. We challenge how they connect the dots and whether their number is inflated.
• Suppression: We examine every search, seizure, and subpoena for constitutional violations. Evidence obtained illegally can be kept out.

We also negotiate from a prepared, trial-ready position, and when the government won’t offer a fair resolution, we try cases. If a case reaches sentencing, we litigate the loss and laundered-amount calculations, acceptance of responsibility, and every fact that lowers exposure.

Ready to push back? Reach out to our team for a confidential review.

Where money laundering cases are actually won: the numbers

Most of these cases turn on a single figure — the value of the laundered funds. The advisory Sentencing Guidelines build the range largely from that number, and it climbs in steps at set dollar thresholds, so pulling the amount below a threshold can drop the range meaningfully. You don’t just plead — you litigate the math.

The government’s number isn’t handed down on stone tablets. It’s usually a spreadsheet built on assumptions, and the defense job is to test every cell. Three places we press hardest:

• Credits that belong off the top. Value that was legitimate — funds from lawful sources, money already accounted for elsewhere — shouldn’t be swept into the laundered total.
• Double counting. The same dollar sometimes gets counted twice across different transactions or accounts, quietly inflating the figure.
• Speculative or over-attributed amounts. Prosecutors often attribute the entire flow through an account to laundering. The amount has to be realistic and actually tied to the conduct, not a ceiling that was never real.

Where the predicate is a fraud — as it often is — the § 2B1.1 loss analysis feeds directly into this exposure. The loss figure from the underlying fraud becomes the engine of the laundering sentence too, which is why we litigate that number as hard as any element in the case. Our page on how federal sentences are calculated walks through that math in plain English.

One enhancement deserves special attention here. The “sophisticated means” enhancement is a prosecutor favorite, and it’s easier to trigger than the name suggests. In laundering cases it can be almost automatic — even moving money between a main account and a shell or secondary account to obscure spending can draw it. You don’t need an elaborate offshore structure.

We push back three ways:

• Legitimate-business explanation: the separate entities and accounts were real LLCs formed for ordinary tax or business reasons.
• Deconstruction: the conduct wasn’t a layered, coordinated scheme — it was repetitive, simple transactions.
• Proportionality: measured against genuinely sophisticated operations, routine paperwork and everyday banking shouldn’t qualify.

If the conduct was routine, the enhancement shouldn’t apply — and each level we knock out is time back.

A simplified illustration. Picture a case built on a fraudulent transaction in the low-to-mid six figures. It starts from a low base offense level; the amount of money adds roughly a dozen levels; and enhancements like a fake identity or “sophisticated means” stack on more — quietly pushing it into serious prison-range territory. Winning acceptance-of-responsibility credit and knocking out even one enhancement can pull the range back down substantially. This is only an illustration — the U.S. Sentencing Commission sets and periodically revises these numbers, and no one can promise a result — but the lesson holds: the math is litigable, and every level fought is time back.

Want us to pressure-test the government’s figure? Ask for a confidential case review.

Before charges: proactive internal reviews

Not every client comes to us after a subpoena. Many sophisticated organizations no longer wait for a raid — they bring in experienced counsel early to find vulnerabilities, tighten internal controls, and review financial practices before a small issue becomes catastrophic.

When concerns surface, our process is deliberate:

• Immediate assessment. We evaluate exposure, preserve privilege, gauge investigative risk, and set an initial strategy.
• Discreet internal investigation. Where appropriate, we review records and interview witnesses quietly, before anyone outside knows there’s a question.
• Controlled engagement. When it’s needed, we manage contact with agencies — DOJ, the FBI, IRS-CI, HHS-OIG, or the U.S. Attorney’s Office — so nothing is said or produced without a plan.

conduct these discreet reviews for companies, family offices, and financial institutions — the point being to get there before the government does, while you still have room to decide.

Why choose Keith & Lorfing

Financial-crime defense rewards experience on both sides of the courtroom, and a real command of how the money moves. Our team has both.

• A former federal prosecutor leads the firm. Managing partner Russell Lorfing is a former Assistant U.S. Attorney recognized for white-collar work by the IRS, DHS, and FBI — the same agencies that build money laundering cases.
• A retired federal judge sits of counsel. The Hon. E. Scott Frost (Ret.) brings more than 30 years of federal courtroom experience to our strategy.
• A veteran trial lawyer at the founding chair. Trey Keith has defended the accused for over 20 years, with many “Not Guilty” verdicts.
• A deep bench. Our team includes former federal prosecutors and defenders, former FBI agents, former IRS criminal investigators, and former general counsel to large family offices — so we’ve seen these problems from every side, including from the desks of the people who trace funds in these cases.
• Admitted where federal cases live. Russell Lorfing is admitted in the Southern, Northern, and Western Districts of Texas, the Fifth Circuit, and the U.S. Supreme Court.

We represent clients in federal courts across the country. Federal law applies the same way in every district, so what matters is not where a firm sits but how it defends federal cases.

One honest note: past results never guarantee a future outcome. Every case turns on its own facts, and we’ll tell you straight what yours looks like.

What to expect in the federal process

Money laundering cases move quietly at first and then all at once. Here’s the general path:

• Investigation: IRS-CI, the FBI, or the DEA gather bank records, SARs, and CTRs, often for months or years. Grand jury subpoenas and target letters surface here.
• Seizure: The government may freeze or seize accounts and property early, sometimes before any charge is filed.
• Charging: Charges come by indictment, usually stacked on the predicate offense and often a conspiracy count.
• Initial appearance and detention: You appear before a magistrate judge, and the court decides on release or detention.
• Pretrial: Both sides exchange discovery. The defense files motions to suppress evidence, to dismiss counts, and to challenge the government’s tracing and its dollar figures.
• Resolution and sentencing: The case ends in a negotiated plea or a trial, and any sentence is guided by the advisory Guidelines and the value the court attributes to the laundered funds.

You can contact our firm at any stage — the earlier we’re involved, the more we can do.

Talk to a federal money laundering defense lawyer before you make a statement

A money laundering investigation is frightening — the government is reading your financial life and may already be moving on your assets. But you are not out of options, and you don’t have to face it alone.

Keith & Lorfing defends federal money laundering and structuring cases nationwide, led by a former prosecutor who knows how these cases are built and how the money is traced. If your case is in the Houston area, our Houston money laundering defense team is ready as well.

Speak with our federal defense team about your situation, in confidence, today.

Frequently asked questions

Can I be charged with money laundering if I never touched the underlying crime?
Yes. Money laundering is a separate offense from the crime that generated the money. If the government believes you knowingly handled or moved criminal proceeds, you can be charged even if you had nothing to do with the original scheme.

What’s the difference between money laundering and structuring?
Money laundering under §§ 1956 and 1957 involves proceeds of a crime. Structuring under 31 U.S.C. § 5324 is breaking up cash deposits to avoid bank reporting — and it can be charged even when the money was earned legally.

Does the government have to prove the predicate offense?
It must prove the money was proceeds of some specified unlawful activity, but it does not always have to convict you of that underlying crime separately. How the government defines and proves the predicate is often a key battleground.

Can they take my house and bank accounts before I’m convicted?
Often, yes. Federal forfeiture law allows the government to seize property it claims is tied to laundering, sometimes before trial and occasionally before charges. Acting quickly with counsel is critical to challenging a seizure.

Is spending my own money really a federal crime?
Under § 1957 it can be, if the government proves the money came from criminal activity and you knew it and moved more than $10,000 of it. That’s why the source and your knowledge are so central to the defense.

How does the amount of money affect my sentence?
Heavily. The value of the laundered funds is the main driver of the advisory Guidelines range, so the government’s dollar figure often matters as much as the charge itself. We challenge inflated numbers directly.

What if I didn’t know the money was dirty?
Then a core element is missing. Both statutes require knowledge that the funds were criminal proceeds. A genuine lack of knowledge can defeat the charge, depending on the facts of your case.

How long does a federal money laundering case take?
It varies widely. Investigations can run for a year or more before charges, and complex financial cases often take many months to resolve once filed.