What Is Money Laundering Under California Law?

The act of concealing the origins of illegally obtained funds by integrating them into legitimate financial systems is a serious crime under California Penal Code § 186.10. Prosecuted as money laundering, this offense often involves financial transactions designed to hide, transfer, or legitimize proceeds from unlawful activities such as drug trafficking, fraud, or embezzlement.

Common Methods of Money Laundering:

• Structuring Transactions: Breaking up large sums of money into smaller deposits or withdrawals to evade reporting requirements by financial institutions.
• Using Shell Companies: Routing money through fake businesses to obscure its illegal origins.
• Transferring Funds Overseas: Moving illicit funds to offshore accounts or foreign financial institutions to bypass domestic scrutiny.
• Purchasing High-Value Assets: Acquiring real estate, vehicles, or luxury goods with illegal money and reselling them to “clean” the funds.

While money laundering may seem like a financial or “non-violent” crime, California law treats it as a serious offense due to its role in supporting organized crime and other illegal enterprises. The penalties for money laundering can include jail or prison time, hefty fines, and long-term damage to your reputation and career.

An effective defense against these charges requires an in-depth understanding of complex financial transactions and the ability to challenge the prosecution’s evidence. This makes it essential to seek experienced money laundering defense lawyer if you are accused of money laundering.

How Money Laundering is Investigated in California

Money laundering charges typically arise during investigations into other alleged crimes, such as fraud, drug trafficking, embezzlement, or organized crime. Law enforcement agencies scrutinize financial transactions and patterns of activity to identify efforts to disguise the origins of illicit funds. Suspicious financial behavior, such as unexplained wealth or irregularities in business records, often triggers deeper investigations.

Authorities may examine bank records for large deposits or withdrawals, especially when they are structured to avoid reporting requirements. Business records are also closely reviewed for discrepancies, as they can reveal attempts to funnel illegal money through seemingly legitimate channels. Asset purchases, including luxury items or real estate, are another focal point, as they are commonly used to conceal the movement of criminal proceeds.

Examples of money laundering include purchasing expensive properties with illicit funds, depositing small sums repeatedly to evade financial reporting rules, and using casinos to convert illegal cash into gambling chips before cashing out. The use of cryptocurrency has also become a frequent method of laundering money, as funds can be transferred through anonymous wallets or converted between currencies to obscure their origin.

These activities are prosecuted under California Penal Code §186.10 and other applicable statutes. If you face money laundering charges, the prosecution must prove that the funds involved were derived from illegal activity and that you knowingly participated in efforts to conceal their origin. A skilled legal defense can challenge these assertions, focusing on a lack of evidence or alternative explanations for the transactions in question.

Penalties for Money Laundering in California

Money laundering is considered a “wobbler” offense in California, meaning it can be charged as either a misdemeanor or felony, depending on the circumstances.

Misdemeanor Money Laundering Penalties:

• Up to 1 year in county jail.
• Fines up to $1,000.

Felony Money Laundering Penalties:

• State Prison Sentence: 16 months, 2 years, or 3 years.
• Fines: Up to $250,000 or twice the value of the laundered money, whichever is greater.

Enhanced Sentences for Larger Amounts:

• Laundered Money Exceeds $2.5 Million: Additional 2–4 years in prison.
• Subsequent Convictions: Fines up to $500,000 or five times the value of laundered funds.

Building a Strong Defense Against Money Laundering Charges

Proving Lack of Knowledge or Intent

The prosecution must prove that you knew the funds were derived from illegal activities and that you intended to conceal their source. If there is evidence showing you were unaware of the money’s illicit origins or did not intend to launder it, this lack of knowledge or intent can form the basis of a strong defense. For example, you may have unknowingly deposited or transferred funds on behalf of someone else without understanding their illegal nature.

Challenging the Source of Funds

If the money involved in the transactions originated from lawful activities, the prosecution’s case may lack the necessary foundation for a conviction. By presenting documentation or other evidence that proves the funds were earned legally, you can challenge the accusation that they were derived from criminal activity.

No Intent to Conceal

A key element of money laundering is the intent to disguise the origin or ownership of illicit funds. If your actions were not aimed at concealing the money’s source—such as routine financial transactions conducted in good faith—this lack of intent may undermine the prosecution’s argument.

Unlawful Law Enforcement Actions

Unlawful actions by law enforcement, such as conducting an illegal search and seizure, coercing a confession, or failing to follow proper procedures, can result in critical evidence being excluded from the case. If your constitutional rights were violated during the investigation or arrest, our money laundering defense lawyer can file motions to suppress the improperly obtained evidence, weakening the prosecution’s case.

Failure to Meet Statutory Thresholds

California law requires that the transactions in question involve more than $5,000 within a seven-day period or $25,000 within a 30-day period. If the prosecution cannot prove that these thresholds were met, the charges may not hold. This defense can be particularly effective if the financial transactions were minor or unrelated to any alleged criminal activity.

Tailored Defense for Your Case

Every money laundering case is unique, and the right defense strategy depends on the specific facts and evidence involved. At The Law Offices of Arash Hashemi, our money laundering defense lawyer leverages his extensive experience in white-collar crime defense to protect our clients’ rights and pursue the best possible outcome. From challenging the prosecution’s evidence to demonstrating lawful financial practices, Attorney Hashemi’s goal is to dismantle the case against you.

Contact a Los Angeles Money Laundering Defense Lawyer

Often, individuals accused of this crime may have been unaware they were involved in illegal activity, such as professionals unknowingly facilitating transactions linked to criminal proceeds. In other cases, coercion or threats may have forced someone to participate in a money-laundering scheme.

No matter the circumstances, you deserve a Los Angeles criminal defense attorney that understands how to challenge these allegations effectively. With decades of experience in white-collar crime defense, Attorney Arash Hashemi is dedicated to protecting your rights, guiding you through every stage of the legal process, and pursuing the best possible outcome for your case.

Take the first step toward safeguarding your future. Contact our office today for a confidential consultation.

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