Money Laundering in California
Penal Code 186.10 PC

The crime of money laundering in California is addressed in California Penal Code 186.10 PC.1

This law sets forth a broad definition of money laundering that covers a wide range of behavior. In contrast, Health & Safety Code 11370.9 HS deals with the narrower offense of money laundering in connection with drug crimes.2

What is the legal definition of PC 186.10 money laundering?

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The basic elements of the crime of money laundering are set forth in Penal Code 186.10 PC.

In order to convict a person of money laundering under Penal Code 186.10 PC, the prosecutor needs to prove certain facts (known as “elements” of the crime). These are:

You made or attempted a transaction through a financial institution

You commit the crime of money laundering by conducting, or attempting to conduct, a transaction through a bank (or, as the statute puts it, a “financial institution”).3 Types of transactions that can lead to money laundering charges include:

  • Making a deposit;
  • Withdrawing money;
  • Initiating an electronic or wire transfer;
  • Exchanging money into a foreign currency; and
  • Writing a check.4

You can NOT be convicted of money laundering under Penal Code 186.10 PC for any transaction that doesn't involve a bank.5

Example: James robs an armored car, committing the crime of grand theft, and walks away with $10,000 in cash. He takes that cash to a car dealership and uses it to pay for a used car.

James did not launder that money under Penal Code 186.10 PC because he never conducted a transaction through a bank.

The transactions involved more than $5,000 in a 7-day period

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You are only guilty of California money laundering under Penal Code 186.10 PC if you launder more than $5,000.

Penal Code 186.10 PC only applies if a certain minimum amount of money is laundered. In order to violate this law, you have to engage in a single transaction OR a series of transactions with a total value of:

  1. More than five thousand dollars ($5,000) in a seven (7)-day period; or
  2. More than twenty-five thousand dollars ($25,000) in a thirty (30)-day period.6

Example: Marv makes thousands of dollars in cash through the crime of pimping.

On Monday, he deposits $3,000 in cash into his bank account. On Friday, he deposits another $3,000 to the same account.

The two transactions took place within 4 days of each other and total $6,000. So Marv may be guilty of money laundering.

Example: Jerry also makes money in cash through pimping. But he makes less money than Marv. Every Monday, he deposits the past week's earnings into his bank account. These deposits are never more than $1,500.

Because Jerry never makes deposits of $5,000 or more in a 7-day period, he is not guilty of money laundering under California Penal Code 186.10 PC.

You intended to promote, or knew that the funds came from, criminal activity

The most important element of the crime of money laundering under Penal Code 186.10 PC is that you EITHER:

  1. Specifically intended to promote criminal activity with your financial transaction; OR
  2. Knew that the money involved in the transaction came from criminal activity.7

According to Oakland criminal defense attorney Reve Bautista8:

“The legal definition of PC 186.10 money laundering has specific intent or knowledge as one of its key elements. This means that you are not guilty of money laundering if you unknowingly initiated a banking transaction that turned out to be connected with a crime.” 

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In order to be guilty of money laundering, you need to have either intended to contribute to criminal activity or known that you were dealing with the proceeds of criminal activity.

Example: Doug asks his mother, Mary, for a loan of $10,000. He tells her he wants to use the money to start a business. Mary writes him a check for this amount.

Doug's “business” turns out to be purchasing materials to start a meth lab, in violation of California's laws against manufacturing of drugs. Mary does not know this when she gives Doug the money.

Mary is not guilty of money laundering because she did not specifically intend to support Doug's criminal activity.

Example: Wilma is the wife of Phil, a doctor who has been supplementing his income by engaging in health care fraud.

Wilma knows that Phil makes some of their money from health care fraud but doesn't think this is her problem. She frequently deposits very large checks from health insurance companies into their bank account and writes checks from that same account.

If the amount of money derived from criminal activity is large enough, Wilma may be guilty of money laundering, because she knew that the money she was dealing with came from criminal activity.

Penalties for PC 186.10 money laundering

The crime of money laundering under Penal Code 186.10 PC is what is known as a “wobbler” in California law.9

This means that prosecutors may choose to charge it as either a misdemeanor or a felony, depending on your criminal history and the facts of the case.10

If money laundering is charged as a misdemeanor, the potential penalties include:

  • Up to one (1) year in county jail; and/or
  • A fine of up to one thousand dollars ($1,000).11
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PC 186.10 money laundering may be charged as either a misdemeanor or a felony.

In contrast, the basic penalties for money laundering as a felony are:

  • A sentence of sixteen (16) months, two (2) years, or three (3) years, served in county jail under California's realignment program; and/or
  • A fine of up to two hundred fifty thousand dollars ($250,000) or twice the amount of money laundered (whichever is greater).12

And, if this is not your first conviction for money laundering, the maximum felony fine goes up to five hundred thousand dollars ($500,000) or five (5) times the amount laundered (whichever is greater).13

Also, the maximum prison sentence for money laundering increases with the amount of money laundered.

For example, one (1) extra year is added to the maximum prison sentence if the amount of money laundered is more than fifty thousand dollars ($50,000). If the amount is more than two million five hundred thousand dollars ($2,500,000), the maximum prison sentence is increased by four (4) years.14

Legal defenses against money laundering charges

If you are charged with California money laundering under Penal Code 186.10, a good California criminal defense attorney can help you assert legal defenses that could get you a verdict of “innocent.”

These include:

  • You did not specifically intend to promote or support criminal activity, and/or did not know that you were handling money that came from criminal activity; and
  • The amount of money you laundered from illegal sources did not exceed the minimum amounts.15

Example: Alvin runs both an illegal escort (prostitution) business and a legal music studio business. He deposits the profits from both in the same bank account. He is arrested for money laundering based on an $8,000 rent check he writes from that account.

The prosecutor will need to show that, on the day he wrote that check, at least $5,000 of the money in the account came from the prostitution business (not the music studio). Otherwise, Alvin cannot be convicted.16

Call us for help…

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For questions about California's money laundering law, Penal Code 186.10 PC, or to discuss your case confidentially with one of our California criminal defense attorneys, do not hesitate to contact us at Shouse Law Group.

We have local criminal law offices in and around Los Angeles, San Diego, Orange County, Riverside, San Bernardino, Ventura, San Jose, Oakland, Sacramento, the San Francisco Bay area, and several nearby cities.

Legal References:


1 Penal Code 186.10 PC – Money laundering; elements; violations; punishment; pleadings. (“(a) Any person who conducts or attempts to conduct a transaction or more than one transaction within a seven-day period involving a monetary instrument or instruments of a total value exceeding five thousand dollars ($5,000), or a total value exceeding twenty-five thousand dollars ($25,000) within a 30-day period, through one or more financial institutions (1) with the specific intent to promote, manage, establish, carry on, or facilitate the promotion, management, establishment, or carrying on of any criminal activity, or (2) knowing that the monetary instrument represents the proceeds of, or is derived directly or indirectly from the proceeds of, criminal activity, is guilty of the crime of money laundering.”)

2 Same.

See also Health & Safety Code 11370.9 HSC – Proceeds over $25,000 derived from controlled substance offenses; penalties [money laundering in connection with drug crimes]. (“(a) It is unlawful for any person knowingly to receive or acquire proceeds, or engage in a transaction involving proceeds, known to be derived from any violation of this division or Division 10.1 with the intent to conceal or disguise or aid in concealing or disguising the nature, location, ownership, control, or source of the proceeds or to avoid a transaction reporting requirement under state or federal law. (b) It is unlawful for any person knowingly to give, sell, transfer, trade, invest, conceal, transport, or maintain an interest in, or otherwise make available, anything of value which that person knows is intended to be used for the purpose of committing, or furthering the commission of, any violation of this division or Division 10.1 with the intent to conceal or disguise or aid in concealing or disguising the nature, location, ownership, control, or source of the proceeds or to avoid a transaction reporting requirement under state or federal law. (c) It is unlawful for any person knowingly to direct, plan, organize, initiate, finance, manage, supervise, or facilitate the transportation or transfer of proceeds known to be derived from any violation of this division or Division 10.1 with the intent to conceal or disguise or aid in concealing or disguising the nature, location, ownership, control, or source of the proceeds or to avoid a transaction reporting requirement under state or federal law. (d) It is unlawful for any person knowingly to conduct a transaction involving proceeds derived from a violation of this division or Division 10.1 when the transaction is designed in whole or in part to conceal or disguise the nature, location, source, ownership, or control of the proceeds known to be derived from a violation of this division or Division 10.1 with the intent to conceal or disguise or aid in concealing or disguising the nature, location, ownership, control, or source of the proceeds or to avoid a transaction reporting requirement under state or federal law. . . . (h) For the purposes of this section, the following terms have the following meanings: (1) ‘Proceeds' means property acquired or derived directly or indirectly from, produced through, or realized through any violation of this division or Division 10.1.”)

3 Penal Code 186.10(a) PC – Money laundering; elements; violations; punishment; pleadings, endnote 1, above.

See also Judicial Council of California Criminal Jury Instructions (“CALCRIM”) 2997 – Money Laundering (Pen. Code, § 186.10). (“The defendant is charged [in Count ] with money laundering [in violation of Penal Code section 186.10]. To prove that the defendant is guilty of this crime, the People must prove that: 1. The defendant (conducted/ [or] attempted to conduct) one or more financial transactions involving at least one monetary instrument through at least one financial institution; 1. <Give 2A when only one transaction is alleged.> [2A. The financial transaction involved [a] monetary instrument[s] with a total value of more than $5,000;] [2A. <Give 2B and/or 2C as appropriate when multiple transactions are alleged.> [2B. The defendant (conducted/ [or] attempted to conduct) the financial transactions within a seven-day period and the monetary instrument[s] involved had a total value of more than $5,000;] [OR] [2C. The defendant (conducted/ [or] attempted to conduct) the financial transactions within a 30-day period and the monetary instrument[s] involved had a total value of more than $25,000;] [AND] [2C. <Give 3A, 3B, or both, as appropriate.> [3A. When the defendant did so, (he/she) intended to (promote/ [or] manage/ [or] establish/ [or] carry on/ [or] facilitate) criminal activity;] [OR] [3B. The defendant knew that the monetary instrument[s] represented the proceeds of criminal activity or (was/were) derived directly or indirectly from the proceeds of criminal activity(;/.)] [AND] [3B. <Give element 4 as appropriate if the defendant is an attorney.> [4. The attorney defendant accepted a fee for representing a client in a criminal investigation or proceeding and accepted the monetary instrument with the intent to disguise or aid in disguising the source of the funds or the nature of the criminal activity.]”)

4 CALCRIM 2997 – Money Laundering (Pen. Code, § 186.10). (“A transaction includes the (deposit/ [or] withdrawal/ [or] transfer/ [or] bailment/ [or] loan/ [or] pledge/ [or] payment/ [or] exchange) of (currency/ [or] a monetary instrument/ [or] the electronic, wire, magnetic, or manual transfer) of funds between accounts by, through, or to, a financial institution. A monetary instrument means (money of the United States of America/ [or] <insert appropriate item from Pen. Code, § 186.9(d)>.”)

5 Penal Code 186.10(a) PC – Money laundering; elements; violations; punishment; pleadings, endnote 1, above.

6 CALCRIM 2997 – Money Laundering (Pen. Code, § 186.10), endnote 3, above.

7 Same.

8 Oakland criminal defense attorney Reve Bautista spent over 20 years as a prosecutor with the Contra Costa District Attorney and the San Francisco District Attorney. As a result, she is well-known at every courthouse in the San Francisco Bay Area. Now, she devotes her energy to helping protect the rights of criminal defendants in cases ranging from DUI to white collar offenses such as money laundering.

9 Penal Code 186.10 PC – Money laundering; elements; violations; punishment; pleadings. (“(a) . . . A violation of this section shall be punished by imprisonment in a county jail for not more than one year or pursuant to subdivision (h) of Section 1170, by a fine of not more than two hundred fifty thousand dollars ($250,000) or twice the value of the property transacted, whichever is greater, or by both that imprisonment and fine. However, for a second or subsequent conviction for a violation of this section, the maximum fine that may be imposed is five hundred thousand dollars ($500,000) or five times the value of the property transacted, whichever is greater.”)

10 Same.

11 Same.

See also Penal Code 672 PC. (“Upon a conviction for any crime punishable by imprisonment in any jail or prison, in relation to which no fine is herein prescribed, the court may impose a fine on the offender not exceeding one thousand dollars ($1,000) in cases of misdemeanors [including misdemeanor money laundering] or ten thousand dollars ($10,000) in cases of felonies, in addition to the imprisonment prescribed.”)

12 Penal Code 186.10 PC – Money laundering; elements; violations; punishment; pleadings, endnote 9, above.

See also Penal Code 1170(h) PC – Determinate sentencing. (“(h)(1) Except as provided in paragraph (3), a felony punishable pursuant to this subdivision where the term is not specified in the underlying offense shall be punishable by a term of imprisonment in a county jail for 16 months, or two or three years.”)

13 Penal Code 186.10 PC – Money laundering; elements; violations; punishment; pleadings, endnote 9, above.

14 Penal Code 186.10(c) PC – Money laundering; elements; violations; punishment; pleadings. (“(c)(1) Any person who is punished under subdivision (a) by imprisonment pursuant to subdivision (h) of Section 1170 shall also be subject to an additional term of imprisonment pursuant to subdivision (h) of Section 1170 as follows: (A) If the value of the transaction or transactions exceeds fifty thousand dollars ($50,000) but is less than one hundred fifty thousand dollars ($150,000), the court, in addition to and consecutive to the felony punishment otherwise imposed pursuant to this section, shall impose an additional term of imprisonment of one year. (B) If the value of the transaction or transactions exceeds one hundred fifty thousand dollars ($150,000) but is less than one million dollars ($1,000,000), the court, in addition to and consecutive to the felony punishment otherwise imposed pursuant to this section, shall impose an additional term of imprisonment of two years. (C) If the value of the transaction or transactions exceeds one million dollars ($1,000,000), but is less than two million five hundred thousand dollars ($2,500,000), the court, in addition to and consecutive to the felony punishment otherwise imposed, shall impose an additional term of imprisonment of three years. (D) If the value of the transaction or transactions pursuant to this section exceeds two million five hundred thousand dollars ($2,500,000), the court, in addition to and consecutive to the felony punishment otherwise prescribed by this section, shall impose an additional term of imprisonment of four years.”)

15 See People v. Mays (2007) 148 Cal.App.4th 13, 32.

16 Loosely based on the facts of the same.

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