California Health & Safety Code §11370.9, often called the “drug-money laundering” law, makes it a crime to handle or conceal money or property that comes from illegal drug activity. This law specifically targets financial transactions involving drug profits, aiming to stop traffickers and their associates from disguising or hiding the source of their money.
In simple terms, if someone knows that money came from selling or manufacturing controlled substances and does something to conceal or disguise where that money came from—or tries to avoid financial reporting laws—that person can be charged under HS 11370.9.
The law doesn’t just apply to large-scale drug traffickers. It can also affect anyone who knowingly assists in concealing or transferring the proceeds of drug crimes, such as business owners, brokers, or individuals who handle cash deposits or transfers.
Purpose of the Law
Drug trafficking is a major source of illegal revenue. Without a way to spend or invest their profits, traffickers can’t sustain their operations. HS 11370.9 was created to target the financial side of drug crime—the “laundering” process that turns illegal cash into assets that appear legitimate. By attacking the money trail, California lawmakers aimed to weaken criminal networks that rely on illicit profits to operate.
This statute allows prosecutors to charge not just those who sell or transport drugs, but also those who manage, transfer, or conceal the proceeds.
Key Legal Elements
To convict someone under HS 11370.9, the prosecution must prove several specific elements beyond a reasonable doubt:
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Knowledge:
The defendant must know that the money or property involved came from a drug-related offense. -
Transaction or Possession:
The defendant must receive, acquire, transfer, invest, or engage in a transaction involving the proceeds. -
Intent to Conceal or Avoid Reporting:
The person must have intended to hide the source, nature, ownership, or control of the proceeds—or to avoid required financial reporting under state or federal law. -
Value Threshold:
The transactions must involve more than $25,000 in a single instance, or within a 30-day period if several related transactions occur.
If any one of these elements cannot be proven, the defendant cannot be convicted under this statute.
Common Examples
To understand how this law works, here are a few practical examples:
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Structuring deposits:
Someone splits $100,000 in cash from drug sales into smaller bank deposits under $10,000 each to avoid triggering a currency-transaction report. -
Purchasing assets:
A person buys real estate or cars using drug money, but puts the property in someone else’s name to conceal ownership. -
Transferring funds through businesses:
A drug trafficker funnels profits through a legitimate business to make the money appear as lawful income. -
International transfers:
Illicit funds are wired overseas or exchanged for cryptocurrency to hide the original source.
In all these scenarios, the key factors are knowledge and intent to disguise or conceal the illicit origin of the money.
Penalties Under HS 11370.9
Violating HS 11370.9 can lead to serious consequences. The law is what’s known as a “wobbler,” meaning prosecutors can charge it as either a misdemeanor or a felony depending on the circumstances.
Misdemeanor Penalties
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Up to one year in county jail
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Fines up to $1,000
Felony Penalties
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Two, three, or four years in state prison
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Fines up to $250,000 or twice the value of the money or property involved (whichever is greater)
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Possible forfeiture of property or assets connected to the crime
Each separate act of laundering can be charged as its own offense, which can multiply the penalties significantly.
Additional Consequences
A conviction under HS 11370.9 can also lead to:
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Asset forfeiture: Law enforcement may seize money, vehicles, or real estate believed to be connected to the laundering.
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Probation or parole conditions: Courts may impose restrictions such as mandatory drug testing or financial oversight.
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Impact on professional licenses: People in banking, real estate, law, or healthcare may face disciplinary actions or license suspension.
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Immigration consequences: For non-citizens, a felony conviction can lead to deportation or denial of naturalization.
Defenses Against HS 11370.9 Charges
Several defense strategies may apply depending on the facts of the case. Common defenses include:
1. Lack of Knowledge
You cannot be convicted if you didn’t know the money came from drug-related activity. For example, if someone gave you cash to deposit and you reasonably believed it was from a legitimate source, the knowledge element is missing.
2. No Intent to Conceal
Even if the funds were drug proceeds, the prosecution must show that you intentionally tried to hide or disguise them. Honest or innocent transactions without intent to conceal may not violate the law.
3. Amount Below the Legal Threshold
If the total value involved was less than $25,000 within a 30-day period, HS 11370.9 doesn’t apply.
4. Unlawful Search or Seizure
If evidence was obtained through an illegal search, wiretap, or seizure, a skilled criminal defense attorney may be able to suppress that evidence, weakening the prosecution’s case.
5. Insufficient Evidence
The state must prove every element beyond a reasonable doubt. Weak or circumstantial proof of intent or knowledge can often lead to a dismissal or reduction of charges.
How HS 11370.9 Differs From Other Money-Laundering Laws
While HS 11370.9 deals specifically with drug-related proceeds, California Penal Code §186.10 covers money laundering for any type of criminal activity. The Health & Safety Code provision is narrower but carries significant consequences because it directly targets narcotics operations.
In some cases, prosecutors may file both statutes if the laundering activity overlaps with other criminal conduct. An experienced criminal-defense lawyer can argue that charging both laws for the same conduct is unfair or duplicative.
Real-World Impact
Drug-money laundering laws like HS 11370.9 are part of California’s broader strategy to dismantle the financial side of the illegal drug market. Instead of focusing solely on street-level dealers, prosecutors use this law to target those who fund, manage, or disguise the profits of narcotics enterprises.
However, because the statute is complex, it can sometimes ensnare individuals who had no criminal intent—such as business owners, accountants, or family members who unknowingly help someone deposit or move funds.
For that reason, early legal intervention is critical if you’re under investigation or have been charged.
What To Do If You’re Accused of Laundering Drug Money
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Do not speak to investigators without legal counsel. Anything you say can be used against you.
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Gather documentation showing your income sources and business transactions.
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Avoid moving or transferring funds once you’re aware of an investigation—it could appear as an attempt to conceal assets.
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Contact an experienced criminal-defense attorney who understands both drug laws and financial crimes.
A knowledgeable lawyer can review whether prosecutors can actually prove knowledge, intent, and the $25,000 threshold, or if the case can be reduced or dismissed.
Frequently Asked Questions
Can I be charged even if I didn’t sell drugs myself?
Yes. You can be prosecuted if you knowingly helped hide or handle money that came from drug activity—even if you weren’t involved in the underlying drug sale.
Is depositing someone else’s cash risky?
If you know or suspect that cash came from illegal drug sales, depositing it for them can trigger a laundering charge. Always verify the source of funds before handling large sums.
Can my property be taken even if I’m not convicted?
In some situations, law enforcement can seize assets through civil forfeiture proceedings, even without a criminal conviction. Legal representation is essential to protect your rights.
What’s the difference between state and federal money laundering?
HS 11370.9 is a state law. Federal authorities can also prosecute laundering under federal statutes like 18 U.S.C. §1956 and §1957, which often carry much harsher penalties.
Final Thoughts
California’s Health & Safety Code §11370.9 is a powerful law designed to hit drug traffickers where it hurts most—their profits. But because the statute relies heavily on intent and knowledge, it can also be misapplied in complex financial situations.
Anyone accused of laundering drug money should take the allegation seriously. The penalties can be life-changing, but with experienced legal counsel, it’s possible to challenge the evidence, negotiate reduced charges, or even have the case dismissed entirely.
Call to Action
If you or someone you know is under investigation or has been charged under California Health & Safety Code §11370.9, don’t wait to get help. The sooner you act, the better your chances of protecting your freedom, your assets, and your future. Contact us today for a free, confidential consultation with an experienced defense attorney who knows how to fight complex financial and drug-related cases in California.
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