I'm not sure about that. I don't know the details; but I strongly suspect that while Shrem very likely knew he was laundering 'illegal' money (at least, I think he would have done it whether he knew or not), he was not ripping people off on purpose.
Personally, I find it hard to feel too bad for Shrem; since he was sloppy and loud.. and kind of just had it coming. That being said, I don't think he did anything morally wrong w/r/t what is he is being convicted of.
This is more a case of a bad law and a stupid person than a bad person. In a more reasonable world where people are legally allowed to enter into mutual, private contracts without a nanny state policing people's morals.. what Shrem did could not even be considered a crime.
His fault? sure. Stupid of him? Sure.. but laundering money for drug dealers is not morally reprehensible in its own right (unless they are violent drug dealers); it's just dumb to do in an obvious way with thousands of people watching you (and not even charging a ridiculous mark up!)