Money laundering is one of the most legally complex criminal charges a person can face in Texas. Prosecutors have access to sophisticated investigative tools, and the penalties for a conviction are severe. Understanding how these cases are built is an important first step toward protecting yourself.
The bottom line: Texas money laundering charges are based on the total value of funds involved and can be prosecuted at the state level, the federal level, or both. If you have been charged or believe you may be, it is critical to contact an experienced Killeen criminal defense attorney as soon as possible.
Key Takeaways
Money laundering involves transforming illegally obtained funds into what appear to be legitimate financial resources.
Charges can be filed at the state level, the federal level, or both simultaneously.
Texas penalties range from a Class C misdemeanor to a first-degree felony depending on the total value of the funds involved.
Federal convictions can carry up to 20 years in federal prison and asset seizure.
Investigators use forensic accounting, data analysis software, surveillance, and financial institution reporting to build cases.
Social consequences, including damage to your reputation, employment, and housing, can be as serious as the legal penalties.
An experienced Killeen criminal defense attorney can begin building your defense from day one.
What Is Money Laundering in Texas?
Money laundering refers to the illegal act of transforming ill-gotten gains into funds that appear legitimate. When money generated by drug trafficking, human trafficking, corruption, or fraud is processed to obscure its illegal origins, it is considered money laundering. The goal is to disguise funds associated with illegal activity as a legitimate financial source that does not raise suspicion.
Under Texas law, money laundering charges can arise from knowingly taking the following actions:
Concealing fraudulently obtained funds
Acquiring fraudulently obtained funds
Maintaining an interest in fraudulently obtained funds
Transporting fraudulently obtained funds
Receiving fraudulently obtained funds
Transmitting or transferring fraudulently obtained funds
Texas Money Laundering Penalties
The severity of a money laundering charge in Texas is determined by the total value of the funds involved. Prosecutors add all proceeds together when calculating the charge level.
Total Value of Funds | Charge Level | Penalties |
Less than $2,500 | Class C misdemeanor | Fine up to $500; no jail time |
$2,500 – $30,000 | State jail felony | 180 days to 2 years in state jail; fines up to $10,000 |
$30,000 – $150,000 | Third-degree felony | 2 to 10 years in prison; fines up to $10,000 |
$300,000 or more | First-degree felony | 5 to 99 years in prison; fines up to $10,000 |
Penalties can be enhanced for repeat offenders, cases involving very large sums, and highly sophisticated operations.
The Social Consequences of a Money Laundering Conviction
Beyond the legal penalties, a money laundering conviction carries lasting social consequences. Criminal charges and convictions are a matter of public record, which means your reputation can be significantly damaged. Additional consequences can include:
Difficulty renting a home or securing a mortgage
Loss of or complications with professional licensure
Challenges finding employment
Reduced access to federal student loans and financial aid for higher education
Federal Money Laundering Laws
Money laundering can be prosecuted at the federal level as well as at the state level. Two primary federal laws govern these charges.
The Money Laundering Control Act (MLCA)
The Money Laundering Control Act (MLCA) is the foundation of federal money laundering legislation. It makes financial transactions involving proceeds from specific unlawful activities — such as fraud, racketeering, and drug trafficking — a federal crime.
The MLCA identifies two primary categories of charges:
Concealment
Concealment includes knowingly concealing or disguising the source, location, or nature of illegally obtained funds. Examples include structuring transactions to bypass reporting requirements and using shell companies to obscure the source of funds.
Monetary Transactions
This aspect of MLCA addresses transactions that exceed $10,000 when the intention is avoiding reporting requirements or promoting illegal activities.
The Bank Secrecy Act
The Bank Secrecy Act works alongside the MLCA by requiring all financial institutions to establish anti-money laundering (AML) programs. Key requirements include:
Currency Transaction Reports (CTRs): Financial institutions must report all transactions exceeding $10,000.
Customer Due Diligence (CDD): Institutions must verify the identity of customers, particularly in high-risk situations.
Suspicious Activity Reports (SARs): Institutions must file reports for suspicious transactions or patterns of behavior inconsistent with a customer's normal banking activity.
Federal money laundering convictions can result in sentences of up to 20 years in federal prison. The federal government can also seize assets obtained through the money laundering operation.
How Investigators Trace Illegal Funds
Successful money laundering operations typically involve complex chains of financial transactions spread across multiple people, entities, and sometimes countries. Investigators use a range of tools to follow the money and build their cases.
Suspicious Transaction Analysis
Investigators begin by identifying financial transactions that raise red flags, such as large sums transferred repeatedly between accounts with no clear legitimate purpose, or significant money movement between businesses with no apparent connection to one another.
Shell Companies and Offshore Accounts
Investigators look closely at shell companies (businesses that exist in name only) and offshore accounts that make tracing true ownership more difficult. They search for inconsistencies in:
Tax filings
Company ownership records
General financial documentation
Banks are required to report swift transfers of large sums across international borders and large cash deposits, and these reports often become the starting point for money laundering investigations.
Forensic Accounting
Investigators frequently turn to forensic accountants, who are professionals specialized in analyzing financial transactions and identifying irregularities. Forensic accountants examine transaction histories, financial statements, and bank records to identify patterns that support money laundering charges.
Data Analysis Software
Data analysis tools can process enormous volumes of financial information and flag patterns indicative of money laundering, such as sudden unexplained spikes in transactions or unusual financial movement between suspicious entities.
Surveillance
Once investigators identify a suspect, they may monitor that person's communications and activities. Surveillance can ultimately produce the evidence needed to link an individual directly to a money laundering operation.
A Texas Money Laundering Case: Real-World Example
In July 2024, a 42-year-old man from Katy, Texas was convicted of federal money laundering charges involving $8.8 million in fraudulently obtained funds. The case involved romance schemes and business email compromise schemes, including 12 separate instances in which a Maryland county treasurer's office was tricked into transferring a total of more than $167,000 to a bank account controlled by the defendant.
What Are Business Email Compromise Schemes?
These schemes exploit the fact that businesses conduct most transactions online. Fraudulent emails that appear to come from legitimate sources direct victims to send money to accounts controlled by the criminals. Common examples include:
A fake invoice from what appears to be a familiar vendor, with an updated payment address
A message appearing to come from a title company asking a homebuyer to wire their down payment
A message appearing to come from a supervisor asking an assistant to purchase gift cards and send serial numbers immediately
Evidence Seized in the Texas Case
When law enforcement searched the defendant's Texas home under a federal search warrant, they seized several forms of evidence:
Money orders and pawn shop receipts
Numerous bank records
Articles of incorporation for multiple shell companies
Many bank cards
An electronic device containing WhatsApp messages and audio recordings between co-conspirators discussing the laundering of fraud proceeds
The defendant used the fraudulently obtained funds to purchase luxury items and open a Texas poker room.
Facing Money Laundering Charges in Killeen, TX? Contact Us Today.
The State of Texas and the federal government both pursue money laundering charges aggressively. The consequences of a conviction, legal and social, can be life-altering. Brett Pritchard at the Law Office of Brett H. Pritchard is a formidable Killeen criminal defense attorney who will spare no effort in pursuit of the best possible resolution for your case.
Call (254) 781-4222 or contact us online to schedule a FREE consultation today. Do not wait.
Frequently Asked Questions
What is money laundering under Texas law?
Money laundering refers to knowingly concealing, acquiring, transporting, receiving, or transferring funds that were obtained through illegal activity, such as drug trafficking, human trafficking, fraud, or corruption, in order to disguise their illegal origin.
How are Texas money laundering charges determined?
Charges are based on the total value of the funds involved. The total is calculated by adding all proceeds together, and the charge level ranges from a Class C misdemeanor for amounts under $2,500 to a first-degree felony for amounts of $300,000 or more.
Can money laundering be charged at both the state and federal levels in Texas?
Yes. Money laundering can be charged at the state level, the federal level, or both simultaneously. Federal convictions can carry sentences of up to 20 years in federal prison, along with asset seizure.
How do investigators detect money laundering?
Investigators use a combination of tools including suspicious transaction analysis, forensic accounting, data analysis software, surveillance, and reports filed by financial institutions under the Bank Secrecy Act — such as Currency Transaction Reports and Suspicious Activity Reports.
What are the social consequences of a money laundering conviction?
Beyond legal penalties, a conviction can damage your reputation, make it difficult to rent or purchase a home, affect professional licensure, limit employment opportunities, and reduce access to federal student loans and financial aid.
What should I do if I have been charged with money laundering in Texas?
Contact an experienced criminal defense attorney immediately. The sooner you act, the sooner your attorney can begin investigating the charges and building your defense. Brett Pritchard at the Law Office of Brett H. Pritchard in Killeen, Texas is ready to fight for you. Call (254) 781-4222 or contact us online today.