Federal prosecutors building a healthcare fraud indictment routinely add money laundering counts under 18 U.S.C. § 1956 and § 1957 alongside the underlying billing charges. On September 4, 2026, the Department of Justice announced an indictment in the District of Massachusetts charging a defendant with a single count of money laundering conspiracy, not healthcare fraud, over an alleged role moving proceeds from a $1.3 billion durable medical equipment billing scheme. Adding a laundering count changes the shape of a case. It reaches people who never submitted a claim, adds years of separate sentencing exposure, and puts a defendant's bank accounts, real estate and vehicles into forfeiture proceedings that run independently.
Why Prosecutors Add Money Laundering Counts
Money laundering counts do more than add pages to an indictment. A healthcare fraud charge under 18 U.S.C. § 1347 is prosecuted where the false claims were submitted, but 18 U.S.C. § 1956 carries its own venue provision: prosecutors may bring the case in any district where the financial transaction occurred or through which the proceeds moved. That reach lets the government indict people who never touched a patient file or a billing system, as in the Massachusetts case, where the defendant faced only a money laundering conspiracy count. Investigators build that trail with a grand jury subpoena served on the banks and a civil investigative demand sent to the billing entity, before indictment. For the response window on each, see Responding to a Civil Investigative Demand (CID) and Grand Jury Subpoenas in Healthcare Investigations.
18 U.S.C. § 1956 and § 1957: The Two Laundering Statutes
The two statutes work differently. Section 1956 prohibits conducting a financial transaction with proceeds of unlawful activity while intending to promote the underlying crime or conceal its source, and it carries a maximum of 20 years per count; a conspiracy charged under the same section, as in the Massachusetts indictment, carries the identical maximum. Section 1957 is narrower and easier to prove: it reaches any transaction over $10,000 in criminally derived property, with no concealment intent required, and carries a 10-year maximum. The predicate crime behind a healthcare-related laundering count is usually the healthcare fraud statute or a violation of the Anti-Kickback Statute. Stark Law is a civil self-referral prohibition, not a criminal statute, and cannot by itself supply that predicate.
The Effect on Sentencing Exposure
For background on the underlying charge, see The Federal Healthcare Fraud Statute (18 USC 1347) Explained. That statute caps most convictions at 10 years, rising to 20 years if the offense causes serious bodily injury and up to life if it causes death. The Anti-Kickback Statute caps out at 10 years per violation. A single count under 18 U.S.C. § 1956 can carry a 20-year maximum on its own, and prosecutors can charge a separate count for each financial transaction tied to the scheme.
A single count under 18 U.S.C. § 1956 can carry a 20-year maximum on its own, and a conviction requires forfeiture of any property involved in the transaction or traceable to it, reaching well beyond what the underlying healthcare fraud count alone could seize.
Asset Forfeiture Under 18 U.S.C. § 982
A laundering conviction opens a wider door to forfeiture. 18 U.S.C. § 982(a)(1) directs the court to order forfeiture of any property involved in a money laundering offense, or property traceable to it, once a defendant is convicted under § 1956 or § 1957. That standard reaches further than forfeiture tied to a fraud count alone, which targets only the fraud proceeds. Property involved in a laundering transaction can include the account that received the funds, real estate bought with commingled money, and vehicles purchased with the proceeds.
Why Early Legal Counsel Is Critical
It is critical that healthcare providers promptly retain experienced healthcare defense counsel upon receiving a grand jury subpoena, a civil investigative demand, or any other sign that a billing dispute has become a criminal investigation. Early legal intervention can protect a provider's rights, ensure appropriate responses to government requests for financial records, avoid statements that later support a money laundering charge, preserve relevant defenses, and allow counsel to communicate with investigators on the provider's behalf. Delaying legal representation can significantly affect the outcome of a matter and expose the provider to additional charges.
How Health Law Alliance Can Help
Health Law Alliance defends physicians, pharmacies and healthcare companies against healthcare fraud indictments that pair billing charges with money laundering counts under 18 U.S.C. § 1956 and § 1957. Our bench includes a former federal prosecutor with experience in how the government builds these charges: tracing the financial trail through a grand jury subpoena, then attaching forfeiture allegations to the indictment. If your practice has been contacted about a healthcare billing investigation or a related financial inquiry, contact us today for a free consultation.
