Money Laundering (Penal Code 186.10) in California

Money laundering charges aren’t just another white-collar accusation—they’re a direct threat to your freedom, your finances, and your reputation.

Prosecutors treat these cases like high-stakes crimes, often throwing every resource they have into proving you funneled money through illegal channels. The penalties under Penal Code § 186.10 can be devastating, stacking years in prison and crushing fines on top of the damage to your name.

If you’ve been accused of money laundering in California, you can’t afford to “wait and see.” The state is already building its case—you need to start building your defense now.

Breaking Down California’s Money Laundering Law

California Penal Code 186.10 targets the practice of disguising illegally obtained funds by making them appear legitimate. Unlike simple possession of stolen money, money laundering involves the deliberate processing of criminal proceeds through financial institutions to hide their illicit origins.

For prosecutors to secure a conviction under Penal Code 186.10, they must prove three essential elements beyond a reasonable doubt:

1. You conducted or attempted to conduct financial transactions through a bank or other financial institution
2. The transactions exceeded specific monetary thresholds – either more than $5,000 within a seven-day period or more than $25,000 within a 30-day period
3. You acted with specific criminal intent – either to promote criminal activity,
4. You knew or reasonably should have known that the money came, directly or indirectly, from criminal activity

The law specifically targets the “laundering” process – the attempt to conceal or disguise the source of illegal funds by running them through legitimate financial channels.

How Money Laundering Typically Works

Money laundering generally follows a three-stage process, though not all schemes include every stage:

1. Placement

The initial entry of “dirty money” into the financial system. This might involve:

• Depositing cash into bank accounts
• Converting cash into monetary instruments like money orders or checks
• Using cash to purchase high-value assets

2. Layering

Creating complex layers of financial transactions to distance the money from its source. Common methods include:

• Transferring funds between multiple accounts or financial institutions
• Creating shell companies to move money
• Converting money into cryptocurrency and back
• Using offshore accounts in countries with strict banking secrecy laws

3. Integration

Returning the now “cleaned” money to the launderer in what appears to be a legitimate form:

• Business loans from shell companies
• False invoices for international “consulting” services
• Real estate transactions
• Investments in legitimate businesses

According to the California Department of Justice, money laundering operations have become increasingly sophisticated, often involving professional expertise and international networks.

Money Laundering vs. Simple Receipt of Stolen Funds

A crucial distinction exists between money laundering and merely possessing stolen money. The key differences include:

• Intent – Money laundering requires specific intent to conceal the source of funds or promote criminal activity
• Financial institutions – Money laundering typically involves transactions through banks or similar institutions
• Pattern of activity – Money laundering usually involves multiple transactions designed to obscure the money trail
• Monetary thresholds – California’s money laundering statute only applies when transactions exceed specific dollar amounts

This distinction is important because it can mean the difference between facing felony money laundering charges and lesser charges like receiving stolen property.

The Serious Consequences of Money Laundering Charges

Penal Code 186.10 is a “wobbler” offense, meaning it can be charged as either a misdemeanor or a felony depending on:

• The amount of money involved
• Your criminal history
• The sophistication of the scheme
• The prosecutor’s discretion

Misdemeanor Penalties

If charged as a misdemeanor, potential consequences include:

• Up to one year in county jail
• Fines up to $1,000
• Probation
• Restitution

Felony Penalties

If charged as a felony, the stakes become much higher:

• Up to three years in county jail (under California’s realignment program)
• Fines up to $250,000 or twice the amount laundered, whichever is greater
• For repeat offenders, fines up to $500,000 or five times the amount laundered

Additional Terms

The penalties increase significantly based on the amount of money involved:

• An additional year if the amount exceeds $50,000
• An additional two years if the amount exceeds $150,000
• An additional three years if the amount exceeds $1,000,000
• An additional four years if the amount exceeds $2,500,000

Beyond criminal penalties, a money laundering conviction can have devastating professional consequences, particularly for those working in financial services, law, or accounting. Professional licenses may be suspended or revoked, and career opportunities can disappear overnight.

Common Defense Strategies Against Money Laundering Charges

When facing money laundering allegations, several defense strategies may be effective depending on your specific situation:

Lack of Knowledge or Intent

One of the strongest defenses is showing you didn’t know the money came from illegal activity or that you didn’t intend to promote criminal activity. Perhaps you were unwittingly handling funds for a friend, family member, or business associate without realizing their criminal origin.

Insufficient Transaction Amounts

The law specifically requires transactions exceeding $5,000 in a seven-day period or $25,000 in a 30-day period. If the prosecution cannot prove these thresholds were met, the charges may be dismissed or reduced.

Constitutional Violations

Law enforcement must respect your constitutional rights during an investigation. Common violations that can lead to dismissed evidence include:

• Illegal searches and seizures
• Miranda rights violations
• Coerced confessions
• Unlawful surveillance

Legitimate Source of Funds

If we can demonstrate that the money in question came from legitimate sources (business revenue, inheritance, investments, etc.), this directly counters the prosecution’s claim that the funds derived from criminal activity.

The Lawyer You Choose Could Decide Your Future

Money laundering cases are among the most complex in the criminal justice system. They often involve:

• Extensive financial records and transaction histories
• Expert witness testimony
• Complex legal and regulatory frameworks
• Parallel civil proceedings
• Potential asset seizure and forfeiture

At David P. Shapiro Criminal Defense Attorneys, we approach money laundering cases with meticulous attention to detail and strategic thinking.

FAQs About Money Laundering Charges

Can I be charged with money laundering if I didn’t know the money was illegal?

No. Knowledge is a required element of the crime. If you truly had no knowledge that the funds were derived from criminal activity, you should not be convicted of money laundering as long as a “reasonable person” would also not have known. However, proving what you knew or didn’t know can be challenging, which is why professional legal representation is crucial.

Does money laundering always involve cash?

No. While cash is commonly involved in money laundering schemes, the crime can involve any type of financial instrument or asset, including wire transfers, checks, cryptocurrency, real estate, or other valuable property.

Can businesses be charged with money laundering?

Yes. Both individuals and business entities can face money laundering charges. Business owners, executives, and employees who participated in or facilitated the money laundering can also face individual criminal liability.

Protect Your Future From Money Laundering Allegations

If you or someone you love is facing criminal charges in California, swift action is imperative. The penalties can be life-altering and long-lasting. Give us a call today to set up a case evaluation with one of our attorneys and learn how to best protect your freedom and future.

Too often, we see clients who “wait and see,” unsure of the legal landscape ahead, only for charges to escalate. They then find themselves backpedaling into a bad defense and an even worse lawyer. Don’t let that happen to you. Protect your freedom. Protect your future. Know your rights.

The contents of this article and blog are meant for informational and marketing purposes only and do not constitute legal advice. Viewing and/or use of the blog does not form an attorney-client relationship. No statements in this post are a guarantee, warranty, or prediction of a particular result in your case.