Seventh Circuit Clarifies: “Middlemen” Who Initiate or Conclude Transactions Are “In the Business of Laundering Funds” Under U.S.S.G. §2S1.1(b)(2)(C)

Introduction

In United States v. Miguel Salinas-Salcedo, the Seventh Circuit addressed a recurring sentencing issue in money-laundering prosecutions: does the four-level Guideline enhancement for being “in the business of laundering funds” apply to a broker who never physically touches the cash but orchestrates the transactions from start to finish? The court’s answer is yes. Drawing on the text of the money-laundering statute, 18 U.S.C. §1956, and the Sentencing Guidelines, the court held that a defendant who participates in initiating or concluding laundering transactions falls within the ambit of “laundering funds,” and that repeated, remunerated facilitation over time qualifies as being “in the business.”

The case involves a guilty plea to conspiracy to commit money laundering by a facilitator who linked Mexican drug cartels to purported U.S.-based launders, relaying codes, confirming deposits, and transmitting wiring instructions. The central dispute on appeal was legal, not factual: whether a “middleman” who does not personally deposit or wire funds can be sentenced as someone “in the business of laundering funds” under U.S.S.G. §2S1.1(b)(2)(C).

Summary of the Judgment

The Seventh Circuit affirmed a four-level enhancement under U.S.S.G. §2S1.1(b)(2)(C). It held that:

“Laundering funds” in the Guideline incorporates 18 U.S.C. §1956’s definition of “conducting” a financial transaction, which expressly includes “initiating,” “concluding,” or “participating in initiating or concluding” the transaction.
Because the defendant admitted he was an “integral” broker between the cartels and the on-the-ground launderers—coordinating codes, confirming deposits, and passing wire details—he participated in initiating and concluding the transactions and therefore “laundered funds” within the meaning of §2S1.1.
Applying the Guideline’s non-exhaustive factors, the defendant’s conduct over two-and-a-half years, across 24 transactions totaling roughly $3 million, with over $44,000 in commissions and incriminating statements to undercover agents, showed he was “in the business.”
The court rejected the argument that the district judge committed procedural error by inadequately addressing objections; the record showed the court engaged with the legal argument and explained why the enhancement applied.

The sentence of 96 months—below the advisory range—was affirmed.

Analysis

Precedents Cited and Their Influence

Textual interpretation baseline
- United States v. Feeney, 100 F.4th 841 (7th Cir. 2024), and Loughrin v. United States, 573 U.S. 351 (2014): The court began with the text and gave effect to each clause, reinforcing a textualist approach to guideline interpretation.
- Niz-Chavez v. Garland, 593 U.S. 155 (2021): Cited for the legitimacy of consulting ordinary meaning via dictionaries; here, to define “participate.”
The meaning of “participate”
- Harden v. Raffensperger, Hughes & Co., Inc., 65 F.3d 1392 (7th Cir. 1995), citing Pinter v. Dahl, 486 U.S. 622 (1988): In analogous statutory contexts (securities), “participation” extends beyond the person who consummates the sale to those who take necessary steps in the distribution. The court imported that breadth to §1956’s “participating in initiating or concluding” language.
- Gross v. FBL Financial Services, Inc., 557 U.S. 167 (2009), and Safeco Insurance Co. of America v. Burr, 551 U.S. 47 (2007): Used to underscore a commonsense “but-for” notion—if the transactions would not have occurred but for the defendant’s integral role, participation is established.
Standards of review
- United States v. Bowling, 952 F.3d 861 (7th Cir. 2020): Clear-error review for factual findings.
- United States v. Reese, 666 F.3d 1007 (7th Cir. 2012): De novo review for Guideline interpretation. The parties’ agreement on facts made this a de novo legal question.
Sentencing explanation and procedural reasonableness
- United States v. Griffith, 913 F.3d 683 (7th Cir. 2019); United States v. Jones, 798 F.3d 613 (7th Cir. 2015); United States v. Diekemper, 604 F.3d 345 (7th Cir. 2010): Collectively establish that a sentencing court’s explanation need only show meaningful consideration of arguments—even implicitly—when facts are undisputed.
- United States v. King, No. 23-1138, 2024 WL 911070 (7th Cir. Mar. 4, 2024) (unpublished), and United States v. Lucena-Rivera, 750 F.3d 43 (1st Cir. 2014): Distinguished; those cases involved contested facts or inadequate factual underpinnings, which were not present here.
Policy rationale and analogy to “fencing” stolen goods
- U.S.S.G. App’x C, Vol. II, at 223 (2003): Commission commentary likens routine launderers to professional “fences” of stolen goods (now addressed in §2B1.1(b)(4)); both create and sustain markets for criminal proceeds, justifying “substantial additional punishment.”
- United States v. Aguasvivas-Castillo, 668 F.3d 7 (1st Cir. 2012), and United States v. Kimbrew, 406 F.3d 1149 (9th Cir. 2005): Reinforce the rationale that businesses trading in criminal proceeds spur more underlying crime by increasing its payoff.

Legal Reasoning

The court’s analysis proceeds in two steps: defining “laundering funds” and determining when someone is “in the business” of doing so.

Defining “laundering funds” through §1956
The Guideline’s application note defines “laundering funds” by reference to the money laundering statutes, including §1956. Section 1956(a)(1) covers a person who, knowing property represents unlawful proceeds, “conducts or attempts to conduct” a financial transaction designed to conceal or disguise aspects of the proceeds. Crucially, §1956(c)(2) defines “conducts” to include “initiating,” “concluding,” or “participating in initiating, or concluding” the transaction. The ordinary meaning of “participate” is simply “to take part.”

Applying this text, the court rejected the “middleman” theory. Even if the defendant never physically deposited the cash or pushed the wire button, he structured and authenticated the deals: relayed the secret code, confirmed deposits, and delivered wiring details to complete the movement. He admitted his role was “integral” from start to finish. By the plain text of §1956, that is participation in initiating and concluding transactions—i.e., “conducting” them—and therefore it is “laundering funds” for §2S1.1 purposes.
When participation becomes a “business”
The four-level enhancement under §2S1.1(b)(2)(C) requires more than a single qualifying transaction; the court looks to the “totality of the circumstances” guided by six non-exhaustive factors in Application Note 4. The defendant’s argument—that the factors use of “engaged” excludes a mere facilitator—fell with the earlier conclusion: he did “launder funds,” so he necessarily “engaged” in the conduct contemplated by the factors.

On the facts, at least four factors strongly supported the enhancement:
- Regularity and duration: 24 transactions over about 30 months showed both recurring conduct and an extended period.
- Financial gain: roughly $44,526 in commissions demonstrated a profit motive and ongoing enterprise.
- Statements to undercover agents: he openly discussed his regular laundering activity, and even contemplated 79 additional jobs totaling approximately $15 million.
The court also invoked the Sentencing Commission’s policy: like “fences,” routine launderers and brokers enable crime by converting illicit proceeds into apparently legitimate assets. Punishing these market-makers more severely aligns with the Guideline’s purpose.

Impact and Implications

This decision meaningfully clarifies the reach of §2S1.1(b)(2)(C) within the Seventh Circuit:

Facilitators are squarely within the enhancement’s scope: The physical handling of money is not the touchstone. Coordinators, brokers, and go-betweens who are integral to initiating and concluding the laundering transactions now face the same “business of laundering” exposure as hands-on depositors.
Prosecutorial focus on functional necessity: “But-for” necessity and the defendant’s self-described “integral” role will be potent in establishing “participation.” Undercover admissions (factor six) can be decisive proof of regularity and business-like intent.
Wider application to modern laundering modalities: The reasoning naturally extends to nontraditional typologies—cryptocurrency mixers or brokers, money mule coordinators, hawala or informal value transfer brokers, and P2P currency exchangers—whose roles are often orchestration without possession.
Plea and sentencing strategy:
- For the government: Build the record on the Note 4 factors—especially duration, number of transactions, remuneration, and the defendant’s contemporaneous statements.
- For the defense: Where facts permit, focus on minimizing regularity and duration, showing isolated or sporadic conduct, small or incidental compensation, fewer or single sources/clients, and absence of admissions suggesting a business model. Contest knowledge and concealment design where viable; emphasize if the defendant’s acts were peripheral and not part of initiating or concluding transactions.
Procedural adequacy at sentencing: When facts are undisputed and the argument is legal, a district court’s concise explanation—demonstrating engagement with the legal point—will suffice on appeal.

Complex Concepts Simplified

Money laundering under 18 U.S.C. §1956: It is a crime to conduct a financial transaction involving unlawful proceeds, knowing they are unlawful, when the transaction is designed at least in part to conceal or disguise the source, ownership, control, or nature of those proceeds. “Conducts” includes participating in starting or finishing the transaction. One need not physically handle the cash to “conduct” it.
U.S.S.G. §2S1.1(b)(2)(C) “business of laundering funds” enhancement: Adds four offense levels if the defendant is in the business of laundering funds for others. Courts examine the totality of circumstances with six guidepost factors: regularity, duration, number of sources/clients, revenue earned, prior laundering convictions, and admissions during undercover investigations. A single transaction is typically captured by a lesser two-level enhancement under §2S1.1(b)(2)(B).
“Participation” and “but-for” causation: Participation means taking part. If the laundering transaction would not have occurred but for the defendant’s role in initiating or concluding it, participation is present, even absent physical custody of funds.
“Fence” analogy: A “fence” buys and sells stolen goods, creating a market for theft. Routine money launderers (including brokers) similarly create a market for converting illicit proceeds into seemingly clean assets. Both are punished more severely because they enable more upstream crime.
Standards of review: Appellate courts review factual findings for clear error but interpret the Guidelines de novo. Challenges about legal meaning (like “what counts as laundering?”) are legal questions; disputes about “what happened?” are factual.

Conclusion

United States v. Salinas-Salcedo clarifies a pivotal principle in federal sentencing for financial crimes: a defendant who orchestrates money-laundering transactions—by initiating, concluding, and coordinating their essential steps—“conducts” them under §1956 and therefore “launders funds” under §2S1.1. When such conduct is regular, extended, remunerated, and evidenced by the defendant’s own statements, the four-level “business of laundering funds” enhancement applies—even if the defendant never physically handles the money.

The decision forecloses the common “I never touched the cash” defense to the business-of-laundering enhancement in the Seventh Circuit and aligns the Guideline’s operation with its policy rationale of targeting the market-makers who enable criminal proceeds to be recycled into the legitimate economy. Going forward, prosecutors and courts can more readily treat facilitators and brokers as professional launderers when the totality of circumstances shows a sustained, profit-driven laundering enterprise.