For the last 22 years, it has been relatively easy to bring charges of money laundering against people concealing or moving large amounts of cash. In June the U.S. Supreme Court made it a little harder, ruling for defendants in two money laundering cases.
The 1986 Money Laundering Control Act broadly criminalized attempts to "conceal or disguise" the origin of ill-gotten lucre. That gave police the leeway to charge Humberto Cuellar with the crime after they pulled him over to search for drugs and found goat hair scattered around his Volkswagen Beetle-apparently an attempt to conceal the recent presence of marijuana in the car from drug-sniffing dogs. "Trooper Nuñez," Justice Clarence Thomas wrote for the majority in Cuellar v. United States, "doubted that goats couldfit in such a small space."
Police searched the car and found $81,000 bundled in a hidden compartment. Thomas said the money laundering charge brought against Cuellar could not be "satisfied solely by evidence that a defendant concealed the funds during their transport." According to the Court, transporting 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.
The same day that Cuellar came down, the Court affirmed a lower court's ruling in United States v. Santos. Efrain Santos of Indiana had already broken the law by holding an unauthorized lottery; prosecutors nailed him again on the grounds that passing out lottery profits to winners was a form of money laundering, since the statute prohibits the use of "proceeds" from illegal activity to carry on further illegal activity.
The Court disagreed, interpreting "proceeds" to mean profits, as opposed to revenue. "Allowing the Government to treat the mere payment of an illegal gambling business' operating expenses as a separate offense is in practical effect tantamount to double jeopardy," Justice John Paul Stevens wrote, concurring with the majority.
These clarifications should mean fewer trumped-up charges of money laundering. Anthony Green, a representative of the National Association of Criminal Defense Lawyers who filed amicus briefs for the defendants in both cases, told reporters the decision will "significantly raise the bar" for prosecutors and reduce abuse of the statute.