Money laundering is a violation of the federal laws 18 U.S.C. §1956 and 18 U.S.C. §1957, which are enforced by the Federal Bureau of Investigations (FBI). According to the FBI, money laundering is the process by which criminals conceal or disguise their proceeds and make them appear to have come from legitimate sources. This allows guilty parties to hide wealth they have accumulated from untoward or illegal means and avoid taxes, prosecution, and other consequences of reporting while giving them a way to illegally increase profit and the ability to invest in other illegal activities. In other words, to launder money is to perform the act of making dirty laundry appear clean through a real business.
There are a variety of penalties for money laundering, but the most common is jail time, restitution payments, fines, and community service. However, your sentence is more likely to carry steeper fines and longer jail time if the money laundering ties you to other serious crimes, like illegal drug trafficking.