Texas money laundering defense

What is money laundering under PC § 34.02?

Texas Penal Code § 34.02 prohibits knowingly acquiring, concealing, possessing, transferring, or transporting the proceeds of criminal activity. The State must prove the defendant knew or believed the funds were criminally derived — but does not have to prove the specific underlying offense.

Actus reus — five statutory verbs under § 34.02(a)

Penal Code § 34.02(a) reaches a person who knowingly (1) acquires, (2) maintains an interest in, (3) conceals, (4) possesses, transfers, or transports, or (5) invests, expends, or receives, the proceeds of criminal activity, or who finances or invests funds the person believes are intended to further the commission of criminal activity. The breadth of the verbs is intentional — the statute targets every stage of the laundering cycle from placement (initial deposit) through layering (transactional concealment) to integration (apparent legitimization). Defense counsel categorizes the State's theory by verb at intake because each verb has its own proof requirements and defense angles.

Mens rea — knowledge under § 34.02(b)

The State must prove the defendant knew or believed the funds were the proceeds of criminal activity. Almanza v. State, 481 S.W.3d 308 (Tex. App.—Houston [1st Dist.] 2015), confirms that the knowledge requirement reaches actual or subjective belief — willful blindness instructions apply but require proof of deliberate avoidance, not mere negligence. The State need not prove the defendant knew the specific underlying offense — knowledge that the funds derived from "some offense" is sufficient. This is structurally different from federal § 1956, which requires proof that the defendant knew the funds derived from "some form" of unlawful activity but does not require knowledge of the specific SUA category.

Proceeds of criminal activity — § 34.01 definition

Proceeds of criminal activity (§ 34.01) means funds acquired or derived directly or indirectly from, produced through, or realized through an act of criminal activity. "Criminal activity" under § 34.01(1) is any offense — including federal offenses — classified as a felony under Texas law or punishable by confinement of more than one year under federal law. The State does not have to identify the specific predicate offense — only that the funds derived from some offense within the statutory definition. Henderson v. State, 187 S.W.3d 720 (Tex. App.—Houston [14th Dist.] 2006), construed the proceeds element in a tracing-disputed prosecution, holding that circumstantial evidence of the criminal origin is sufficient where it excludes reasonable alternative explanations.

Value of funds — grade trigger under § 34.02(e)

The penalty grade is keyed to the value of the funds involved, structurally parallel to the theft ladder under § 31.03(e). State-jail felony at $2,500–$29,999, third-degree at $30,000–$149,999, second-degree at $150,000–$299,999, and first-degree at $300,000 or more. The same threshold-line dynamics that drive theft litigation drive money-laundering litigation — a $29,999 case is a state-jail felony, a $30,000 case is a third-degree felony with TDCJ exposure. Value-element work and tracing-versus-commingling analysis are the highest-leverage defense investments because successful reductions across threshold lines drop the entire case grade.

The Texas money-laundering statute is structurally unusual among state criminal codes. Most state statutes — and the federal § 1956 framework — require the prosecution to identify the specific underlying offense (the "predicate" or "specified unlawful activity") and prove its commission. Texas § 34.02 does not. The State must prove that funds were proceeds of "criminal activity," but the term is defined so broadly under § 34.01 that virtually any felony or federal offense punishable by more than one year qualifies. The practical effect is that the State can frame a money-laundering case without the evidentiary infrastructure required for the underlying offense — bank records, surveillance footage, and informant testimony about the source of funds can carry the case even where no predicate offense has been separately charged. Defense counsel uses this structural breadth as a litigation lever: the State's freedom from predicate-offense specificity is also a constraint on what the State can rely on at trial. Where the State refuses to identify the predicate, defense argues for jury instructions that require the State to prove some specific qualifying offense; where the State does identify a predicate, defense attacks the predicate-offense proof directly.

What counts as proceeds — § 34.01 and the tracing problem

The proceeds element is the structural heart of every money-laundering case. Defense counsel attacks the State's tracing — commingled funds, intervening legitimate transactions, gross-versus-net characterization, and the boundary between proceeds and lawful income.

Penal Code § 34.01(4) defines "proceeds" broadly — funds acquired or derived directly or indirectly from, produced through, or realized through an act. The breadth means that the State can argue that any traceable benefit from a predicate offense counts as proceeds, including funds that have moved through multiple lawful transactions before reaching the defendant. Henderson v. State, 187 S.W.3d 720 (Tex. App.—Houston [14th Dist.] 2006), addressed the proceeds element in a case where the State traced funds through several intervening accounts and held that circumstantial evidence of the criminal origin can support the proceeds element where the evidence excludes reasonable alternative explanations under the Geesa v. State, 820 S.W.2d 154 (Tex. Crim. App. 1991), standard. The defense leverage lives in (1) the tracing chain itself — every account, every transaction, every transfer must be linked to the criminal-origin source — and (2) the alternative-explanation analysis under Geesa.

Commingled-funds analysis is the single highest-yield defense doctrine in money-laundering cases. Where the defendant's account holds both lawful income (salary, business revenue, investment returns) and allegedly criminal proceeds, the State faces a structural problem: which dollars in the account are "proceeds" and which are not? Under federal practice, courts have adopted various tracing presumptions — the "lowest intermediate balance" rule, the "first-in-first-out" rule, the "pro rata" rule — each producing different results from the same underlying ledger. Texas case law has not fully resolved which tracing methodology controls under § 34.02; Vela v. State, 209 S.W.3d 128 (Tex. App.—Houston [1st Dist.] 2006), provides the closest Texas guidance. Defense counsel exploits the unsettled doctrine by demanding a specific tracing methodology, attacking the State's methodology as arbitrary, and supplying alternative tracings that produce sub-threshold proceeds totals or no proceeds at all.

The gross-versus-net distinction was the subject of substantial federal litigation following United States v. Santos, 553 U.S. 507 (2008), in which the Supreme Court held that "proceeds" in some federal § 1956 contexts meant "net profits" rather than "gross receipts." The Santos rule produced what came to be called the "merger problem" — many criminal enterprises do not produce "net profits" until receipts are spent on operational expenses, so prosecutorial reliance on every-dollar-received characterizations failed. Congress responded with the Fraud Enforcement and Recovery Act of 2009 (FERA), which legislatively defined "proceeds" as "gross receipts" for federal § 1956 purposes — partially reversing Santos. The Texas statute under § 34.01(4) uses its own broad formulation, but defense counsel sometimes finds gross-versus-net analytical traction in Texas cases involving complex multi-step transactions where the gross/net characterization moves the value across a grade-threshold line.

Intervening legitimate transactions create a tracing-rupture defense. Where allegedly criminal proceeds passed through one or more genuinely lawful transactions before reaching the defendant — for example, a sale of legitimate property using funds that allegedly originated from a criminal source — defense counsel argues that the legitimate intermediate transaction broke the proceeds chain. The argument has stronger doctrinal footing in some categories of cases (where the intermediate transaction was at arm's length with a third party, where the property received in exchange has independent legitimate value) than in others (where the intermediate transaction was sham or designed specifically to launder the funds). Each case turns on the facts of the intermediate transactions, and defense counsel develops the record through document discovery, third-party witness testimony, and where the stakes justify it, forensic-accounting expert work.

The boundary between proceeds and lawful income is the foundational litigation question on most money-laundering cases involving an ongoing business. A small business owner who runs a cash-intensive enterprise (restaurant, retail, automotive, beauty services) and is alleged to have laundered drug-trafficking proceeds through that business faces a structural challenge: separating legitimate business cash flow from allegedly criminal cash flow. The State's typical proof — bank deposits exceeding apparent business revenue, lifestyle indicators inconsistent with reported income, witness testimony about cash sources — is circumstantial. Defense counsel develops the legitimate-revenue record (sales receipts, supplier invoices, employee testimony about actual business volume, industry-benchmark expert testimony about cash-intensity in the relevant sector) to establish a lawful-origin alternative that the State's case cannot exclude beyond reasonable doubt.

Penalty range by funds value — § 34.02(e)

Texas money laundering is value-graded under § 34.02(e) — state-jail felony at $2,500 through first-degree felony at $300,000+. The grade ladder parallels theft and produces the same threshold-line litigation dynamics.

Penal Code § 34.02(e) sets four felony tiers tied to the value of the funds involved. The comparison table below shows the complete grade ladder. The structural parallel to the theft ladder under § 31.03(e) is intentional — the legislature chose to grade money laundering by financial scale rather than by conduct, making value-element work and tracing-versus-commingling analysis the central defense fronts on every case. The grade triggers are exact dollar values, and a successful reduction across one threshold line drops the entire case by one felony tier. The difference between a $29,999 state-jail-felony charge and a $30,000 third-degree-felony charge is substantial — the third-degree exposure of 2 to 10 years TDCJ versus the state-jail exposure of 180 days to 2 years state jail is meaningful, and the third-degree carries cleaner probation eligibility while state-jail-felony service is day-for-day under § 12.35(a).

Note the structural absence of a misdemeanor tier — Texas money laundering starts at state-jail felony. Funds valued at less than $2,500 are typically prosecuted as theft, fraud, or a related Chapter 31 or Chapter 32 offense rather than as money laundering. Where the State has framed a sub-$2,500 case as money laundering, defense counsel files a motion to quash for failure to allege a value within § 34.02(e) — the State must allege and prove a value within one of the four statutory tiers. The minimum-threshold defense is not commonly raised because most money-laundering prosecutions involve substantially larger sums, but where it applies, it produces dismissal.^[1]

Repeat-offender enhancements under Penal Code Chapter 12 apply to money-laundering convictions in the standard way. Two prior state-jail felony convictions can elevate a current state-jail-felony money-laundering charge to a third-degree-felony range under § 12.425(a). One prior felony of any grade plus a current third-degree money-laundering conviction enhances to second-degree under § 12.42(a). One prior felony plus a current second-degree money-laundering conviction enhances to first-degree under § 12.42(b). A "habitual" enhancement under § 12.42(d) — two prior, sequential felonies — produces a 25-year-to-life minimum on any non-state-jail felony, including all three higher tiers of money laundering. Counsel runs the criminal history at intake to identify enhancement exposure before bond and plea posture are set.

The Texas statute does not contain the targeted enhancements that appear in § 31.03(f) for theft (public servant, elderly individual, nonprofit, Medicaid). Where the predicate criminal activity that produced the proceeds involves any of those § 31.03(f) categories, the State sometimes adds a theft-from-elderly enhancement charge alongside the money-laundering count to capture the additional grade tier — but the money-laundering count itself does not bump by virtue of victim category. The structural narrowness of the § 34.02 grade ladder, compared to § 31.03, means that nearly all penalty-grade litigation focuses on value-element work and tracing methodology rather than on enhancement-allegation challenges.^[2]

Federal vs. state — forum, overlap, and dual-sovereignty

Most Texas money-laundering cases involve parallel federal exposure under 18 U.S.C. §§ 1956 and 1957. Federal prosecutors prefer the federal forum for higher penalties and longer sentencing-guideline ranges; state prosecutors prefer Texas for cases with limited federal interest. Coordination — and dual-sovereignty doctrine — drives the forum decision.

Federal money laundering is prosecuted primarily under 18 U.S.C. §§ 1956 and 1957. Section 1956 reaches three theories: § 1956(a)(1) covers financial transactions involving criminally-derived property with intent to promote unlawful activity, conceal the source of funds, or evade tax-reporting requirements; § 1956(a)(2) covers international transportation of criminally-derived funds; § 1956(a)(3) covers government-sting transactions where law enforcement supplies the apparently criminal funds. Each theory carries up to 20 years per count plus a fine of the greater of $500,000 or twice the value of the property involved. Whitfield v. United States, 543 U.S. 209 (2005), confirms that conspiracy under § 1956(h) does not require an overt act — agreement alone, combined with criminal-source knowledge, supplies the elements.

Section 1957 — "engaging in monetary transactions in property derived from specified unlawful activity" — applies only to transactions exceeding $10,000 and carries up to 10 years per count. The mens-rea bar under § 1957 is lower than § 1956: the defendant must know that the funds were criminally derived (matching the § 1956 requirement) but does not need to act with the specific intent to promote, conceal, or evade. The statute is the federal prosecutor's preferred tool for "ordinary" laundering — depositing criminal proceeds into accounts, paying for goods or services with criminal proceeds, or otherwise running criminal money through ordinary financial channels in transactions exceeding $10,000. United States v. Ness, 565 F.3d 73 (2d Cir. 2009), addressed the § 1957 transaction definition in detail.

The forum question is driven by several factors. Federal prosecutors prefer the federal forum for (1) higher dollar-value cases where the USSG § 2S1.1 guideline ranges produce more substantial sentencing than Texas would; (2) cases with multi-state or international transactions that benefit from federal investigative resources (IRS-CI, FBI, DEA, HSI); (3) cases tied to drug-trafficking organizations where federal forfeiture under 18 U.S.C. § 981 and § 982 produces stronger asset recovery; (4) cases involving bank or financial-services defendants where the federal Bank Secrecy Act framework supplies a coherent regulatory narrative. State prosecutors prefer the Texas forum for (1) cases with limited federal interest where coordination with the U.S. Attorney would be slow or unwelcome; (2) cases tied to local predicate offenses (Texas drug trafficking, Texas Medicaid fraud, Texas insurance fraud) where state evidence is stronger than federal; (3) cases below the federal prosecutorial threshold for white-collar charges (typically $100,000+ in many federal districts).

Dual-sovereignty doctrine permits both federal and state prosecution for the same conduct. Gamble v. United States, 587 U.S. ___ (2019), reaffirmed that the Double Jeopardy Clause does not prohibit successive prosecution by separate sovereigns for the same act. In practice, the federal and state prosecutors generally coordinate to avoid duplicative prosecutions — the Petite Policy under DOJ Justice Manual § 9-2.031 instructs federal prosecutors against successive prosecution after state action absent compelling federal interest, and the practical reverse applies to state prosecutors. But the coordination is discretionary, and there is no formal bar to dual prosecution. Defense counsel's pre-charge forum advocacy — engaging with both the AUSA and the local DA before either has filed charges, proposing dispositions in one forum that resolve the case in both — is the single highest-leverage strategic move on cases with parallel federal-state exposure.

Asset forfeiture coordination is a separate but related dimension of the forum question. Federal civil forfeiture under 18 U.S.C. § 981 operates on a preponderance standard with substantial procedural protections under the Civil Asset Forfeiture Reform Act of 2000 (CAFRA), 18 U.S.C. § 983. Federal criminal forfeiture under 18 U.S.C. § 982 is a sentence-imposed consequence following conviction. Texas civil forfeiture under Chapter 59 forfeiture (CCP) operates on a preponderance standard but with weaker procedural protections than CAFRA — owner notification, hearing scheduling, and innocent-owner-defense procedures differ from federal practice. Where assets have been seized, defense counsel coordinates with civil-forfeiture counsel from intake to ensure that the forfeiture proceeding does not produce unfavorable factual findings that bind the criminal case, and to ensure that any forfeiture-stipulation in connection with a plea is properly structured to limit the financial impact.

Defenses we evaluate first

Seven defense doctrines do most of the work in money-laundering cases: no knowledge of criminal origin, no proceeds of criminal activity, § 34.02(c) bona-fide-service affirmative defense, tracing-and-commingling challenges, multiplicity attacks on parallel theft charges, statute-of-limitations defenses, and federal Cuellar concealment-element attacks. Each is fact-specific and supported by Texas or federal case law.

The first defense doctrine — no knowledge of criminal origin — targets the § 34.02(b) mens rea element directly. The State must prove the defendant knew or believed the funds were proceeds of criminal activity. Almanza v. State, 481 S.W.3d 308 (Tex. App.—Houston [1st Dist.] 2015), and the parallel federal cases under Regalado v. United States, 334 F.3d 520 (5th Cir. 2003), confirm that the knowledge requirement reaches actual or subjective belief, not mere suspicion or recklessness. The "willful blindness" or "deliberate ignorance" doctrine applies but requires proof of an affirmative effort to avoid learning the criminal origin — passively failing to inquire is not sufficient. The defense reaches business owners who received cash payments in the ordinary course; professionals (attorneys, real-estate brokers, accountants) who handled client funds in apparent good faith; family members and acquaintances who received gifts or loans without knowing the source; and corporate officers who processed transactions without independent knowledge of the underlying source of funds. The proof — emails, texts, business records contemporaneous with the receipt — is built at the discovery stage.

The second defense — no proceeds of "criminal activity" — attacks the proceeds element. The State must prove that the funds derived from some offense within the § 34.01 "criminal activity" definition. Where the State has not separately charged a predicate offense, the proof of criminal origin must come from circumstantial evidence — bank records, transaction patterns, lifestyle indicators, informant testimony — under the Geesa v. State, 820 S.W.2d 154 (Tex. Crim. App. 1991), reasonable-alternative-explanation standard. Defense counsel develops the legitimate-origin alternative through (1) business-revenue documentation, (2) inheritance, gift, or loan documentation, (3) prior-asset documentation, (4) family-financial-history records, and (5) expert testimony from forensic accountants on cash-intensity in the relevant industry sector. Where the legitimate-origin alternative is credible, the State's proceeds proof fails under Geesa.

The third defense — the § 34.02(c) affirmative defense for bona-fide services — protects defendants who received funds as compensation for genuine services rendered for fair value, where the defendant had no intent to facilitate the underlying offense. The affirmative defense applies to attorneys who received legal fees from clients with criminal-source funds; medical providers who received payment from drug-trafficking patients; real-estate brokers, accountants, and other professionals who provided legitimate services to clients with criminal income. The Texas statute does not contain a "tainted-fee" jurisprudence as developed as federal practice under Caplin & Drysdale, Chartered v. United States, 491 U.S. 617 (1989), and United States v. Monsanto, 491 U.S. 600 (1989), but the § 34.02(c) framework supplies the analogous protective doctrine. Defense counsel develops the bona-fide-service record through engagement letters, fee invoices, time records, work product, and witness testimony confirming the services were genuinely rendered.

The fourth defense — tracing and commingling challenges — attacks the State's linkage between alleged criminal proceeds and the specific funds in the defendant's possession or accounts. As discussed in detail above, commingled-funds analysis is the single highest-yield defense doctrine. Defense counsel develops alternative tracings (lowest intermediate balance, first-in-first-out, pro rata) and forensic-accounting analyses that produce sub-threshold proceeds totals. The State's typical tracing — totaling all suspicious-looking deposits over a period and characterizing the full amount as "proceeds" — is methodologically thin and vulnerable to disciplined cross-examination. Vela v. State, 209 S.W.3d 128 (Tex. App.—Houston [1st Dist.] 2006), provides Texas case law on tracing methodology; the broader federal tracing jurisprudence (United States v. Banco Cafetero Panama, 797 F.2d 1154 (2d Cir. 1986), and progeny) supplies persuasive authority on the tracing-presumption framework.

The fifth defense — multiplicity attacks on parallel theft or fraud charges — applies where the State has charged the same conduct as both money laundering under § 34.02 and theft under § 31.03 or fraud under Chapter 32. Under Ex parte Ervin, 991 S.W.2d 804 (Tex. Crim. App. 1999), the unit-of-prosecution analysis requires that the State not punish the same conduct twice unless the legislature clearly authorized multiple punishments. The money-laundering statute and the theft statute target different conduct — § 31.03 punishes the unlawful acquisition, § 34.02 punishes the subsequent handling of proceeds — but where the State has alleged a single transaction as both offenses, the defense argues that the prosecutions punish the same act and should merge for sentencing. The argument has stronger doctrinal footing where the State's § 34.02 theory does not allege any independent post-acquisition conduct beyond the original taking.

The sixth defense — statute-of-limitations attacks — applies under Code of Criminal Procedure art. 12.01(2)(D), which sets a 5-year limitations period for money laundering. The federal parallel under 18 U.S.C. § 3282 also sets a 5-year limitations period for most § 1956 and § 1957 prosecutions. Tax-related laundering under § 1956(a)(1)(A)(ii) and certain bank-secrecy violations can carry 6-year periods under specialized provisions. Defense counsel scrutinizes the indictment for limitations exposure — particularly where the State has alleged a continuing course of conduct that includes pre-limitations transactions. Where the alleged transactions span the limitations boundary, the defense argues that pre-limitations transactions cannot supply the charge's factual basis and must be stricken from the proceeds calculation, potentially dropping the case below a grade-threshold line.

The seventh defense — federal concealment element (Cuellar) attacks — applies to federal § 1956(a)(2)(B)(i) "international transportation" prosecutions. Cuellar v. United States, 553 U.S. 550 (2008), held that the concealment element requires proof that the transportation was designed to conceal a listed attribute of the funds (nature, location, source, ownership, or control) — not merely that the funds were hidden during transport. Pure transportation of bulk cash, without proof of concealment design, is insufficient. The doctrine substantially limits federal "bulk cash smuggling" prosecutions and supplies cross-applicable analytical tools for parallel Texas § 34.02(a) transport-theory cases. The federal-state cross-pollination is particularly valuable in cases involving cash transport across the U.S.-Mexico border or through Texas as a transit jurisdiction.

Common prosecution errors in money-laundering cases

The State's typical errors in money-laundering prosecutions are predictable: charging the same conduct as both § 34.02 and § 31.03, commingled-funds proceeds calculations that include legitimate income, predicate-offense proof that fails to establish "criminal activity" under § 34.01, defective § 34.02(c) affirmative-defense analysis at indictment, dual federal-state prosecutions without coordination, and Chapter 59 forfeiture overreach.

A recurring pattern across DFW money-laundering prosecutions involves double-charging the same conduct as both § 34.02 money laundering and § 31.03 theft (or as § 34.02 plus a Chapter 32 fraud offense). The unit-of-prosecution analysis under Ex parte Ervin, 991 S.W.2d 804 (Tex. Crim. App. 1999), and Garza v. State, 213 S.W.3d 338 (Tex. Crim. App. 2007), governs whether the State can punish a single course of conduct under multiple statutory provisions. Where the State has charged the same proceeds under both § 31.03 (the original taking) and § 34.02 (the subsequent handling), defense counsel files motions to quash one count or to merge the counts for sentencing under the Blockburger-style analysis. The argument has stronger doctrinal footing where the alleged § 34.02 conduct does not extend meaningfully beyond the original taking — for example, where the only "handling" is the defendant's retention of the proceeds without any post-acquisition transaction.

Second, commingled-funds proceeds calculations that include legitimate income. The State's typical proof methodology in cases involving an ongoing business or significant lawful income is to total all suspicious-looking deposits and characterize the full amount as "proceeds." The methodology ignores the commingled-funds doctrine and produces inflated value-element totals that often push cases above threshold-grade lines. Defense counsel attacks the methodology with forensic-accounting analysis (typically a CPA or forensic accountant retained as defense expert) that disaggregates lawful from allegedly criminal cash flows. The disaggregation work is labor-intensive but high-yield because successful reductions across threshold lines drop the entire case grade.

Third, predicate-offense proof that fails to establish "criminal activity" under § 34.01. The State does not have to prove the specific underlying offense — but it does have to prove that the funds derived from some offense within the § 34.01 definition. Where the State's case rests on circumstantial inference (suspicious lifestyle, unexplained cash, association with suspected criminals) without direct evidence of any specific criminal source, defense counsel attacks the proceeds element under Geesa v. State, 820 S.W.2d 154 (Tex. Crim. App. 1991), and argues that the circumstantial evidence fails to exclude reasonable alternative explanations. The argument is particularly viable in cash-intensive business contexts where the defendant's industry routinely produces large cash flows that look suspicious in isolation but are explainable in context.

Fourth, defective § 34.02(c) affirmative-defense analysis at indictment. The bona-fide-service affirmative defense under § 34.02(c) protects defendants who received funds as compensation for genuine services at fair value without intent to facilitate the underlying offense. Where the facts at indictment support the affirmative defense — engagement letters and contemporaneous fee records show legitimate services for fair value — defense counsel raises the defense in pretrial motion practice and at the close of the State's case-in-chief to support directed-verdict relief. The defense is most viable for professional defendants (attorneys, accountants, real-estate brokers, financial advisors) and for vendors who provided ordinary goods or services to customers with criminal-source funds. The State's failure to anticipate and rebut the affirmative defense produces directed-verdict opportunities at trial.

Fifth, dual federal-state prosecutions without coordination. As discussed above, dual-sovereignty doctrine permits both federal and state prosecution for the same conduct, but the Petite Policy and parallel state practice generally produce coordination between the AUSA and the DA. Where coordination has failed — the State has indicted in county court while a federal investigation is ongoing, or the State has refused to defer to federal disposition — defense counsel engages both prosecutors directly to seek a unified resolution. The pre-indictment forum advocacy is most effective; once both indictments have been returned, the coordination becomes mechanical and the defense leverage is reduced. Where dual prosecution proceeds despite defense efforts, the resulting disposition often includes a structured federal-state credit arrangement that limits total exposure.

Sixth, Chapter 59 forfeiture overreach. Chapter 59 forfeiture (CCP) operates on a preponderance standard with weaker procedural protections than federal CAFRA. The State sometimes pursues forfeiture of assets that have weak nexus to the alleged money-laundering offense — vehicles, residences, or business assets that were lawfully acquired but happen to be owned by the defendant. Defense counsel files responsive pleadings under CCP art. 59.04 challenging the State's nexus showing and invoking innocent-owner defenses under art. 59.02(c) where third parties (spouses, business partners, lenders) have independent interests in the seized property. The forfeiture defense work is procedurally distinct from the criminal defense and requires coordination with civil-forfeiture counsel — but the financial stakes often exceed the criminal-case stakes, particularly in cases involving residential or business real estate.

What to do if you're charged with money laundering

The first 30 days are decisive: do not make statements to federal or state investigators, do not respond to subpoenas without counsel, preserve financial records, coordinate with forfeiture counsel if assets have been seized, and assess federal-versus-state forum exposure before any disposition discussion.

Six things matter in the opening 30-day window for a money-laundering investigation or charge. First, do not give a statement to federal or state investigators. Money-laundering investigations frequently open with a pre-indictment interview request from an IRS-CI special agent, an FBI agent, an HSI agent, or a Texas DPS Financial Crimes investigator. The interview is voluntary — there is no obligation to participate — and statements made in the interview are admissible at trial. Innocent-sounding explanations of source of funds, business operations, or transaction patterns become the State's strongest evidence on the knowledge element. The Fifth Amendment privilege applies; invoke it explicitly through counsel or in writing, decline the interview request, and let counsel manage any subsequent communication with investigators.

Second, do not respond to subpoenas — grand jury subpoenas, IRS administrative summonses under 26 U.S.C. § 7602, FinCEN information-request letters, or state financial-records subpoenas — without counsel review. Subpoena responses can produce records that supply the predicate-offense or knowledge proof the State otherwise lacks. Counsel reviews the subpoena scope, asserts applicable privileges (attorney-client, work product, Fifth Amendment act-of-production for individual defendants under Fisher v. United States, 425 U.S. 391 (1976)), negotiates scope reduction with the issuing prosecutor, and where appropriate, moves to quash. The act-of-production doctrine for individual targets — particularly small-business owners whose records double as their personal records — is one of the most important pre-indictment defense tools.

Third, preserve all financial records. Once a money-laundering investigation is active, the records that establish (1) legitimate source of funds, (2) business-revenue context, (3) bona-fide-service affirmative defense, and (4) lawful-acquisition history for any seized assets become foundational. Counsel issues a litigation-hold instruction covering bank statements, account ledgers, sales receipts, supplier invoices, employment records, business-formation documents, tax returns, and contemporaneous communications. Records get destroyed in routine business operations, witnesses move, and memories fade — early preservation is essential.

Fourth, coordinate with civil-forfeiture counsel if assets have been seized. As discussed above, federal civil forfeiture under 18 U.S.C. § 981 and Texas civil forfeiture under CCP Chapter 59 operate on parallel but procedurally distinct tracks. The forfeiture deadlines are short — federal CAFRA requires the government to file a complaint within 90 days of a timely-filed administrative claim under § 983(a)(3); Texas Chapter 59 has its own response-deadline structure under art. 59.04. Missing the deadlines forfeits the property by default. Counsel coordinates with civil-forfeiture counsel from intake to ensure the deadlines are met, the responsive pleadings are filed, and the discovery in the forfeiture case does not produce binding factual findings that prejudice the criminal case.

Fifth, assess federal-versus-state forum exposure before any disposition discussion. As discussed in detail above, the federal-state forum question drives the entire defense strategy. Counsel engages with the relevant AUSA and DA early — often before any indictment has been returned — to assess each prosecutor's interest and to propose unified dispositions where possible. Pre-indictment forum advocacy is the single highest-leverage strategic move on parallel federal-state cases. Post-indictment, the leverage is reduced but not eliminated; the federal Petite Policy and the analogous state practice still allow for declination on coordination grounds.

Sixth, run the criminal-history check and the asset-history check at intake. Prior felony convictions affect Chapter 12 enhancement exposure on the Texas case; prior federal convictions affect USSG criminal-history-category calculation on any federal case. The asset history — when each major asset was acquired, the legitimate source of funds for the acquisition, the documentation that supports the lawful-origin defense — must be established early because the forfeiture case depends on it. For non-citizen defendants, money-laundering convictions trigger immigration consequences under 8 U.S.C. § 1101(a)(43)(D) (aggravated felony for money-laundering offenses with proceeds exceeding $10,000) — concurrent immigration-counsel retention is essential.

DFW context, cost, and outcome expectations

DFW money-laundering prosecutions split between the N.D. Texas USAO (Dallas, Plano, Sherman divisions) and the four county DAs. Federal sentencing under USSG § 2S1.1 produces longer ranges than Texas; Texas sentencing under Chapter 12 lacks early-release on state-jail-felony service. Defense fees range $15,000–$150,000+ depending on case scale; cases resolve in 12–36 months.

DFW money-laundering prosecutions split across multiple offices. At the federal level, the U.S. Attorney's Office for the Northern District of Texas — operating from Dallas (main office), Plano (Sherman Division for cases originating in Collin, Denton, and Grayson counties), and Fort Worth (for Tarrant and surrounding counties) — handles the federal money-laundering caseload. The Northern District prosecutorial offices coordinate with IRS-Criminal Investigation, the FBI, HSI, the DEA (through the Organized Crime Drug Enforcement Task Force, or OCDETF), and FinCEN. The Northern District has a substantial financial-crimes practice driven by the DFW financial-services corridor (the banking and money-services-business presence in Dallas, the cryptocurrency-exchange and fintech presence in Plano/Frisco, and the payment-processing infrastructure across the metroplex).

At the state level, the Collin County DA's office, the Dallas County DA's office, the Denton County DA's office, and the Tarrant County Criminal DA's office each prosecute money-laundering cases through their economic-crimes or property-crimes divisions. Collin County's docket is driven by the Frisco-Plano-McKinney corporate corridor and the Stonebriar/Legacy financial-services concentration. Dallas County prosecutes through the property-crimes division and coordinates closely with the federal OCDETF on drug-trafficking-derived laundering cases. Denton County's docket reflects the I-35 transportation corridor and the Lewisville/Highland Village retail concentration. Tarrant County prosecutes through the Tim Curry Justice Center economic-crimes division. The Texas Attorney General's Medicaid Fraud Control Unit (MFCU) handles healthcare-derived laundering cases statewide, including the substantial DFW healthcare-fraud caseload generated by the Medicare Advantage and Medicaid managed-care concentrations in the metroplex.

Sentencing differs substantially between federal and state. Federal sentencing under USSG § 2S1.1 sets the base offense level by reference to the underlying offense — drug trafficking, fraud, or another SUA — and applies enhancements for value of laundered funds (up to +30 levels), sophisticated means (+2), offender role (+2 to +4 for organizer or leader), and several other factors. Post-United States v. Booker, 543 U.S. 220 (2005), the Guidelines are advisory rather than binding, and the sentencing court applies the § 3553(a) factors to determine a final sentence. Typical federal money-laundering sentences for first-time defendants range from probation (in cases with minimal loss and substantial cooperation) through 60-month sentences (in mid-sized fraud-derived laundering cases) to 120-month-plus sentences in large-scale drug-derived laundering cases. The 5K1.1 substantial-assistance departure under USSG § 5K1.1 — available where the defendant provides substantial assistance to the government — is the single most important post-conviction sentencing lever and the focus of substantial pre-charge defense advocacy.

Texas sentencing under Chapter 12 lacks the granular guideline structure of the federal system but applies straightforward statutory ranges. The Texas system is more bench-discretionary at the misdemeanor and state-jail-felony levels and more jury-driven at the upper-felony levels (defendants in Texas have the right to a jury for sentencing under Code Crim. Proc. art. 37.07). State-jail-felony money laundering carries day-for-day service under § 12.35(a) — no early-release credit — making the state-jail tier substantially harder time than the parallel federal sentence at equivalent total months. Third-degree, second-degree, and first-degree money-laundering sentences are served at TDCJ with parole eligibility under Government Code § 508.145 (typically half the sentence or 30 years, whichever is less, for first-degree). The bench-versus-jury sentencing decision is a critical strategic question on Texas money-laundering cases and is litigated separately from the guilt-or-innocence phase.

Defense fees vary substantially by scale and complexity. A straightforward Texas state-jail-felony money-laundering case with no parallel federal exposure runs $15,000–$25,000 flat-fee. Add federal investigation exposure or asset-forfeiture coordination and the range moves to $25,000–$60,000. Federal indictment with substantial discovery, forensic-accounting expert work, and contested USSG sentencing runs $60,000–$150,000. Multi-defendant racketeering or drug-trafficking-derived laundering prosecutions with parallel forfeiture, cooperation-agreement negotiation, and multi-month-trial readiness run $150,000–$500,000+. Forensic-accounting expert costs add $25,000–$150,000 on top depending on case complexity and the volume of records requiring analysis.

Timeline expectations: federal money-laundering cases resolve in 12–36 months from indictment to disposition, with cooperation cases potentially extending longer (the government often delays sentencing pending cooperation completion). Texas state cases resolve in 8–18 months depending on county and complexity. Pre-indictment federal investigations can run 1–3 years before any charging decision is made — and the pre-indictment window is the most defensible time on the case, where forum advocacy, proffer-decision analysis, and target-letter response under DOJ Justice Manual § 9-11.150 produce the highest leverage. Outcomes range from declination (no charge filed) in approximately 15%–25% of pre-indictment federal investigations through cooperation-driven sentence reductions (Rule 35 and § 5K1.1) in approximately 30%–40% of post-indictment federal cases, to plea-to-charge dispositions in the majority of remaining cases, with trials in fewer than 5% of federal money-laundering matters. Texas state outcomes cluster more heavily around plea dispositions with structured probation or split-sentence packages, with trials remaining rare (under 10% of state cases).