Supremes Say Money Can Be Touched Without Being Laundered

Jacob Sullum | June 3, 2008

Two Supreme Court decisions that were announced yesterday, both involving interpretation of a money laundering statute, illustrate the malleability of the federal criminal code, which enables prosecutors to make a federal case out of almost anything and to pile on charges for the same underlying conduct. The Court imposed some modest limits on these tendencies.

In one case, a man who was caught driving to Mexico with $81,000 in cash hidden beneath the floor of his car was convicted of money laundering and sentenced to six and a half years in prison. The Court unanimously ruled that transporting the proceeds from illegal drug sales does not in itself constitute money laundering, which requires an intent to "conceal or disguise the nature, the location, the source, the ownership, or the control" of ill-gotten gains.

In the second case, a man who ran an illegal lottery in Indiana and one of his employees were convicted under a provision of the money laundering law that prohibits the use of "proceeds" from illegal activity to carry on further illegal activity. The boss was convicted for paying his employees and his winning customers, while his underling was convicted for collecting money from customers. A five-justice majority said the convictions were invalid because prosecutors had failed to show these transactions involved "proceeds" of the gambling business, which they interpreted to mean the defendants' profits.

Notably, both opinions were written by justices who are often perceived as hostile to criminal defendants, the first by Clarence Thomas and the second by Antonin Scalia. But don't get too excited. While the drug money courier and the lottery collector faced just the money laundering charges, the guy who ran the lottery was not so lucky. He no longer has to serve 17.5 years for money laundering, but he still has to spend five years in prison for daring to compete with the state of Indiana. 

In a 2004 reason article, William Anderson and Candice Jackson bemoaned the ever-expanding reach of federal criminal law. 

Comments

|6.3.08 @ 6:23PM|#

He no longer has to serve 17.5 years for money laundering, but he still has to spend five years in prison for daring to compete with the state of Indiana


12.5 years of of the sentence isn't too shabby

Naga Sadow|6.3.08 @ 6:27PM|#

Does this mean I can finally open my own stipclub/casino? Now that the penalties are a measley five years in federal "pound you in the ass" prison?

|6.3.08 @ 8:38PM|#

Notably, both opinions were written by justices who are often perceived as hostile to criminal defendants, the first by Clarence Thomas and the second by Antonin Scalia. But don't get too excited.

Oh don't worry. I am sure this group of nine will continue to make a mockery out of the concepts of reason, compassion, and justice well into the future.

h-dawg|6.3.08 @ 9:01PM|#

Facts: you go along with your boss's e-mailed, suggestion to change a single number on a spreadsheet that will eventually be used for disclosure purposes, and then delete the e-mail.

What the Feds can go after you for: conspiracy, wire fraud, obstruction of justice. That's up to 15 years. "Unless, of course, you testify against your boss. Then we can let you plead down to one or two, nice guys that we are."

"But," you might say, "I didn't do anything wrong."

"Yes," your lawyer replies. "Innocence gives you about an 80 percent chance of prevailing at trial."

You do the math.

JMR|6.4.08 @ 7:16AM|#

They need to find a way to rule against

http://www.e-gold.com/letter3.html

honest money. And they will, because the media's totally ignoring both the e-gold and Liberty Dollar cases. The idea of anything -- especially anything mentioned explicitly in the Constitution -- competing with the fiat paper "dollar" is anathema to DC-insider judges addicted to obese government spending, so they're guaranteed to find an excuse to uphold the raid, despite the lack of anything like probable cause whatsoever.

Meanwhile...

http://www.nytimes.com/imagepages/2008/02/17/business/20080217_SWAP_2_GRAPHIC.html

goes-on, and is exactly as "unregulated" as e-gold ever was, with 0 consequences despite what looks like obvious, large scale dishonesty. How many people even know "credit default swaps" EXIST, despite the massive and recent nature of the "market"?
JMR

Chuck|6.4.08 @ 7:57AM|#

h-dog:

That's one reason why I keep all my old email. It has occasionally proven useful to dig out a year-old email to show to somebody who claims "I never said THAT!" or "How come nobody ever consulted with us?"