Supremes Say Money Can Be Touched Without Being Laundered
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.