Money laundering charges accuse a person or business of handling money they knew, or should have known, came from crime. In the United States the main laws are 18 U.S.C. 1956 and 1957, and penalties reach up to 20 years in prison plus large fines.
Key takeaways
- A money laundering charge accuses someone of handling the proceeds of crime.
- In the US, the main statutes are 18 U.S.C. 1956 and 1957.
- Section 1956 carries up to 20 years in prison; section 1957 up to 10 years.
- Fines can reach $500,000 or twice the value of the funds, whichever is greater.
- A charge usually sits on top of a predicate offense that produced the money.
- In the UK, the Proceeds of Crime Act 2002 sets a maximum of 14 years.
On this page
What they areWhat must be provenUS lawsPenaltiesHow charges ariseIn the UKPossible defensesIf you are chargedFAQsRead more
Up to 20 years
Maximum US prison term under 18 U.S.C. 1956
Source: 18 U.S.C. 1956
Up to 14 years
Maximum UK prison term under the Proceeds of Crime Act
Source: POCA 2002
$500k or 2x
US fine per count, whichever is greater
Source: 18 U.S.C. 1956
What are money laundering charges?
Money laundering charges are criminal accusations that someone handled money they knew, or should have known, came from crime. The charge is about what happened to the money, not the crime that produced it.
That first crime is called the predicate offense. Money laundering is a separate offense layered on top, which is why a person can face both at once.
The charge exists because moving and hiding criminal money is itself harmful. Read more: for the underlying concept, see money laundering.
What has to be proven
A money laundering charge is not proven by the money alone. A prosecutor generally has to show a few things together.
- Criminal proceeds. The money came from an unlawful activity.
- A transaction. The defendant took part in a financial transaction with those funds.
- Knowledge. The defendant knew, or in some cases should have known, the money was criminal.
- Intent. In many charges, an intent to promote crime or to hide the source of the funds.
The exact elements depend on which statute is charged, covered below. Knowledge is often the hardest element to prove, because it turns on what the defendant actually understood about the source of the money. Prosecutors may rely on the circumstances, such as efforts to hide funds, to show that a person knew or deliberately ignored the obvious.
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US money laundering laws
US money laundering charges usually come under two statutes. They cover different conduct.
- 18 U.S.C. 1956. The main money laundering law, covering transactions meant to promote crime, hide the source of funds, or avoid reporting.
- 18 U.S.C. 1957. Covers spending or depositing more than $10,000 of criminal proceeds, even without an intent to hide anything.
Prosecutors also use the Bank Secrecy Act for reporting failures. Read more: the Bank Secrecy Act sets many of the duties behind these cases.
Penalties for money laundering
Penalties are severe, and they stack on top of any sentence for the underlying crime. The table shows the US and UK maximums.
| Law | Maximum prison | Fine |
|---|---|---|
| 18 U.S.C. 1956 (US) | 20 years | $500,000 or twice the value, whichever is greater |
| 18 U.S.C. 1957 (US) | 10 years | Up to twice the amount involved |
| POCA 2002 (UK) | 14 years | Unlimited fine |
Businesses face penalties too. In 2024, TD Bank agreed to about $3 billion after admitting money laundering failures (US Department of Justice, 2024).
How money laundering charges arise
Charges usually grow out of an investigation into another crime. The money trail often becomes the case.
An investigation into fraud, drugs, or corruption can uncover how the proceeds were moved, and that movement supports a separate money laundering charge. A suspicious activity report from a bank can also start or support an inquiry.
Because the money trail can be easier to prove than the original crime, prosecutors sometimes lead with laundering charges. Bank records, transfers, and property purchases leave a paper trail that a jury can follow, even when the underlying offense is harder to pin down.
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Money laundering charges in the UK
The United Kingdom handles money laundering charges under the Proceeds of Crime Act 2002. The structure is different from the US, but the idea is the same.
The Act sets three main offenses: concealing criminal property, arranging to help someone acquire or use it, and acquiring, using, or possessing it. The maximum sentence is 14 years in prison plus an unlimited fine.
The UK also requires regulated staff to report suspicion, and failing to do so can be an offense in its own right, separate from handling the money. That duty is one reason banks file so many reports each year.
Possible defenses
Defenses depend entirely on the facts, and only a lawyer can advise on a specific case. In general terms, they often center on knowledge and intent.
- No knowledge. The defendant did not know and had no reason to know the money was criminal.
- No criminal source. The funds did not come from unlawful activity.
- Authorized disclosure. In the UK, reporting a suspicion to the authorities can provide a defense.
- Lack of intent. The required intent to promote or conceal was not present.
These are general categories, not advice. The right approach depends on the charge and the evidence.
What to do if you are charged
If you are charged with money laundering, the single most useful step is to get qualified legal help. The stakes are high and the law is complex.
A criminal defense lawyer can explain the specific charge, review the evidence, and advise on the best course. Nothing on this page replaces that advice.
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Frequently asked questions
What are money laundering charges?
Money laundering charges are criminal accusations that someone handled money they knew, or should have known, came from crime. The charge focuses on what happened to the money rather than the original offense. It is a separate crime, so a person can face both money laundering charges and charges for the underlying crime at once.
What is the penalty for money laundering in the US?
Under 18 U.S.C. 1956, the main US money laundering law, the maximum penalty is 20 years in prison and a fine of $500,000 or twice the value of the funds, whichever is greater. Under 18 U.S.C. 1957, which covers spending criminal proceeds, the maximum is 10 years. Penalties stack on top of the underlying crime.
What has to be proven for a money laundering charge?
A prosecutor generally has to show that the money came from unlawful activity, that the defendant took part in a financial transaction with it, and that the defendant knew, or should have known, the money was criminal. Many charges also require an intent to promote crime or to hide the source of the funds.
What laws cover money laundering in the United States?
The main laws are 18 U.S.C. 1956 and 18 U.S.C. 1957. Section 1956 covers transactions meant to promote crime, hide the source of funds, or avoid reporting. Section 1957 covers spending or depositing more than $10,000 of criminal proceeds. The Bank Secrecy Act is also used for reporting failures.
Can you be charged with money laundering without the original crime?
In some cases, yes. Prosecutors must show the money came from unlawful activity, but they do not always need a separate conviction for that crime first. Because the money trail can be easier to prove than the original offense, money laundering charges are sometimes brought when the underlying crime is hard to prosecute directly.
What is the difference between 18 U.S.C. 1956 and 1957?
Section 1956 is the main money laundering statute and requires an intent to promote crime, conceal the source of funds, or avoid reporting, with a maximum of 20 years. Section 1957 is narrower and covers knowingly spending or depositing more than $10,000 of criminal proceeds, even without intent to hide, with a maximum of 10 years.
How much prison time can you get for money laundering?
In the United States, up to 20 years under 18 U.S.C. 1956 for each count, or up to 10 years under 18 U.S.C. 1957. In the United Kingdom, up to 14 years under the Proceeds of Crime Act 2002. Actual sentences depend on the amounts, the conduct, and the jurisdiction, and they stack on the underlying crime.
What are money laundering charges in the UK?
In the UK, money laundering is charged under the Proceeds of Crime Act 2002. It sets three main offenses: concealing criminal property, arranging to help someone acquire or use it, and acquiring, using, or possessing it. The maximum sentence is 14 years in prison plus an unlimited fine.
What are possible defenses to money laundering charges?
Defenses depend on the facts, and only a lawyer can advise on a case. In general terms, they often center on knowledge and intent, such as showing the defendant did not know the money was criminal, that the funds were not from unlawful activity, or that the required intent was absent. In the UK, an authorized disclosure can provide a defense.
What should you do if charged with money laundering?
The most useful step is to get qualified legal help immediately. A criminal defense lawyer can explain the specific charge, review the evidence, and advise on the best course. Money laundering law is complex and the penalties are severe, so general information is no substitute for advice on your own situation.
Do money laundering charges apply to businesses?
Yes. Businesses, including banks, can face money laundering penalties, often through settlements and fines rather than prison. In 2024, TD Bank agreed to about $3 billion after admitting money laundering failures. Individual officers can also be held personally responsible, depending on their role and knowledge.
What is a predicate offense in money laundering?
A predicate offense is the underlying crime that produces the illegal money, such as fraud, drug trafficking, or corruption. Money laundering is the separate act of handling the proceeds of that offense. A money laundering charge usually sits on top of, or alongside, the predicate offense that generated the funds.
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Last reviewed July 12, 2026 · 11 min read · Written for compliance and risk professionals · By the WhoWiki editorial team
Key takeaway: a money laundering charge accuses someone of handling the proceeds of crime, and it carries heavy prison terms and fines on top of any underlying offense.