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Prosecutors will drop charges against Canberra lawyer Bridie Harders, who was charged with conspiracy to deal with the proceeds of crime last year alongside her boss Ben Aulich.
Mr Aulich was also charged with recruiting people to engage in criminal activity.
Upon her arrest, Ms Harders was described by police as a member of the legal community and a close associate of Mr Aulich, and she was also charged with dealing with proceeds of crime and money laundering.
But on advice, prosecutors confirmed with the ABC that they would drop charges against Ms Harders a legal partner at the Aulich law firm because they have no chance of success.
Canberra lawyers Ben Aulich and Bridie Harders, accountant Michael Papandrea set to fight money laundering charges
MonMonday 21
Aulich law firm partners Ben Aulich and Bridie Harders.
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One of Canberra s most senior criminal lawyers has indicated he will fight charges over alleged money laundering.
Key points:
The trio were arrested last week after an eight-month police investigation
All three have indicated that they will fight the charges
Ben Aulich, 47, was arrested last week along with lawyer Bridie Harders, 35, and accountant Michael Papandrea, 54, after an eight-month police investigation.
At the time, police described the trio as facilitators of money laundering, and alleged they had discussed how to use contracts and agreements to set up a business to launder the proceeds of crime.
Canberra law firm backs partners after Ben Aulich and Bridie Harders arrested on money laundering charges
FriFriday 18
updated
FriFriday 18
Aulich s founder, Ben Aulich, faces three criminal charges including money laundering.
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One of Canberra s top law firms has publicly backed two of its legal partners after they were charged with money laundering offences.
Key points:
Aulich law firm partners Ben Aulich and Bridie Harders face several charges linked to an alleged money laundering plot
Aulich managing partner Peter Woodhouse says the pair have the firm s full support
Police also arrested a 54-year-old accountant this week after an eight-month criminal investigation