High Court says that Federal Money Laundering Statute has been Interpreted to Broadly
In a pair of decisions issued on June 2, 2008, the United States Supreme Court narrowed the scope of the federal money-laundering statute, 18 U. S. C. §1956. According to reports, the federal government initiates money laundering cases against more than 1,300 people each year. The two decisions will significantly affect any future prosecutions and may impact a number of cases that are currently pending on appeal.
Cuellar v. United States
In the first case, Cuellar v. United States, Humberto Fidel Regaldo Cuellar was arrested on the Texas-Mexican border after agents searched his car and found $81,000 in cash bundled in plastic bags and duct tape. Cuellar was then tried, convicted and sentenced to 78 months in federal prison for his crime.
After an unsuccessful 28 U.S.C. §2255 petition to the district court, Cuellar appealed to the Fifth Circuit Court of Appeals. He claimed that the government did not meet its burden of proving that he possessed the money in an attempt to create the “appearance of legitimate wealth.” This argument was rejected and Cuellar then petitioned the Supreme Court for a writ of certiorari and the Court agreed to hear the case.
Cuellar’s attorneys again asserted the claim to the Supreme Court that the transportation of the money must be undertaken in such a way as to create the appearance of legitimate wealth. The Court did not waste time on this argument and stated that Congress had broad intentions when it created the law, and making funds look legitimate is just one way to launder money. However, the Court found that merely concealing money while transporting it to Mexico was not sufficient evidence of money laundering in and of itself. If it was sufficient to gain a conviction in this manner, then even small-time criminals who put money in their shoe before heading across the border for a night on the town could be charged with breaking the law, the Court added. “How one moves the money is distinct from why one moves the money,” Justice Clarence Thomas wrote in his opinion.
United States v. Santos
In the second opinion, United States v. Santos, the Court held that the statute applies only to transactions involving criminal profits, not necessarily all criminal receipts. The case against Santos originated after he was arrested for conducting an illegal lottery operation in Indiana. A jury found Santos guilty on two gambling counts in addition to the three money laundering charges which the Supreme Court considered. Santos was given five years in prison for his participation in the illegal gambling operation and nearly 18 years more for money laundering.
In its opinion, the Supreme Court noted that Congress did not clearly define in the statue what it meant by “proceeds,” and that it was not the high court’s role to “play the part of mind reader.” The Court ultimately held that the Government’s position that the “profits” interpretation hinders effective enforcement of the law is exaggerated and that the Rule of Leniency applies. The Court concluded: “We interpret ambiguous criminal statutes in favor of defendants, not prosecutors.” Both decisions are considered to be major blows to the federal government’s attempts to battle organize crime and the war on drugs.
If you or a family member has been accused of money laundering, contact federal Dallas money laundering defense attorney John Teakell.