Money Laundering · Federal Charges

What Is a Specified Unlawful Activity?

Section 1956(c)(7) identifies the offenses that can qualify as money-laundering predicates. Prosecutors must still connect the charged property to a qualifying source; the list does not make every business receipt criminal.

By Heath Hyde · Financial Crimes Knowledge Hub

Mr. Heath Enix ‘Heath’ Hyde
Eligible to Practice in Texas
Attorney at Law
Bar Card Number: 00796807
TX License Date: 11/01/1996

Primary Practice Location: Sulphur Springs, TX and Dallas, TX
214 Connally St Ste A
Sulphur Spgs, TX 75482-2612

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Which underlying crime produced the money?

A specified unlawful activity is the underlying crime, the one lawyers call the predicate. Section 1956(c)(7) lists the categories and cross-references to other statutes. An agent’s hunch that money came from something illegal doesn’t get the government past that list. Somebody has to check it, and in a federal money laundering case your lawyer should be the first to do so.

Take a domestic proceeds charge under § 1956(a)(1). The prosecution has to show the transaction involved proceeds of a qualifying offense. It does not have to win a separate conviction for that offense first. Your knowledge is a separate question. The statute asks whether you knew the property came from some kind of felony. It does not ask whether you knew the predicate’s name or could recite its citation. Whichever laundering branch is charged adds its own requirements on top.

How do legitimate receipts fit into the account?

Picture a business accused of a $3 million wire-fraud scheme. The same account holds $1 million from ordinary sales. Those two figures tell you nothing about where any particular transfer came from. When an agent labels every deposit “fraud proceeds,” the question the records are supposed to answer never gets asked.

Ask your financial crimes defense lawyer to compare the source contract, promised service, invoice, customer payment, actual delivery and any refund. A customer named as a fraud victim may also have made lawful purchases. An investigator’s labels on a payment chart are claims to test against those records, rather than proof by themselves. For each charged transfer, counsel should examine both the proceeds theory and the evidence of the accused’s knowledge.

What if the alleged predicate is wire fraud?

Two Supreme Court decisions help frame that review, and both matter to any Texas wire fraud defense. In Ciminelli, the Court rejected treating a person’s right to valuable economic information as property under the federal fraud statutes. A wire-fraud theory based only on withholding that information therefore presents a different issue from a scheme aimed at obtaining money or property.

In Kousisis, the Court went the other way on a different question. There the Court held that a materially false statement used to get a victim to hand over money or property can support federal fraud liability even when the victim suffered no net economic loss. Delivering goods or services worth what was paid doesn’t defeat that theory on its own. The prosecution still has to prove the rest of the fraud elements. And neither case decides a separate laundering count by itself.

Which questions should counsel take into trial preparation?

Where prosecutors allege more than one predicate, counsel should check each against § 1956(c)(7), identify the evidence supporting it, and determine what governing law requires the jury to agree on. The source of the funds can affect jury instructions and trial strategy. An absent separate predicate conviction does not settle those questions.