Thread: Court Questions Money Laundering Cases

Published Monday | February 25, 2008
Court Questions Money Laundering Cases
By PETE YOST Associated Press Writer
The Associated Press

WASHINGTON (AP) - The Supreme Court suggested Monday the federal government may be stretching the anti-money laundering law too far in prosecutions of small-time criminals.

A lawyer for the Bush administration ran into aggressive questioning by justices who wondered why the mere concealment of cash in a car headed for Mexico meets the standard for an international money laundering charge, which carries a maximum penalty of 20 years in prison.

"All you have here" is transporting cash and concealing it, complained Justice Antonin Scalia.

A person who prevents detection of illegal proceeds "is exactly what Congress had in mind" when it passed the law, replied Lisa Schertler of the Justice Department solicitor general's office.

It is the second such case the court has heard this term.

Four months ago, the justices expressed other concerns with the government's use of the money laundering law in a gambling case. That case is still pending.

When Congress cracked down on the crime of money laundering in 1986, it had two problems in mind: drug cartels and organized crime. The law makes it a crime to transport money across the border when it is designed to conceal the source, ownership or control of the funds.

The government brought money laundering cases against 1,347 people in 2006, according to the Administrative Office of the U.S. Courts, with the numbers remaining fairly steady for the five-year span starting in 2002.

Between $8 billion and $25 billion a year from Mexican and Colombian drugs is moved across the border and laundered, says the Justice Department's National Drug Intelligence Center.

In the case Monday, officers stopped Humberto Cuellar in Schleicher County, Texas, about a hundred miles from Mexico after his car swerved onto the shoulder of the road. On request, Cuellar pulled out rolled-up cash that police said smelled of marijuana. When he let lawmen search his car, authorities found more than $80,000 in cash in a secret compartment in the car. Cuellar was convicted of international money laundering and sentenced to 6 1/2 years in prison.

In Cuellar's case, there's "no grand design," said Justice Ruth Bader Ginsburg. "All he is is a courier."

Chief Justice John Roberts and Justices Anthony Kennedy, Stephen Breyer and David Souter expressed skepticism that someone caught trying to cross the border with concealed cash would be enough to make a money laundering prosecution.

In an argument in the earlier case in October, Scalia made clear his displeasure with prosecutors who pile a money laundering count onto a lesser charge in routine gambling cases.

Prosecutors justified the money laundering charges by saying the operator of an illegal lottery was compensating his employees and paying off the winning bettors.

"Come on," Scalia told a Justice Department lawyer. "Nobody runs a gambling operation without paying off the winners. It's not going to last very long. To make the paying off of the winners a separate crime from running the gambling operation seems to me quite extraordinary."

Scalia's comments came in the case of Efrain Santos, who ran an illegal lottery, or bolita, in northwest Indiana.

Santos was sentenced to five years in prison for gambling and 17 1/2 years for money laundering.

A federal judge set aside his money laundering conviction, saying that law refers to only the profits of an illegal operation, not the gross proceeds. Prosecutors must show that profits were used to promote the illegal activity, said the judge.

http://www.omaha.com/index.php?u_page=1 ... d=10267825

In Cuellar's case, there's "no grand design," said Justice Ruth Bader Ginsburg. "All he is is a courier."




Courier or not, his arrest denied a criminal enterprise of $80,000. And, disposable stooges, such as couriers, have been known to give up intelligence proven invaluable in combating organized crime.

Were I these Supreme Court Justices, I think I would be extremely careful in making decisions which could be construed by some as possibly having ulterior motives.

When Congress cracked down on the crime of money laundering in 1986, it had two problems in mind: drug cartels and organized crime. The law makes it a crime to transport money across the border when it is designed to conceal the source, ownership or control of the funds.

It seems to me that the original intent of the "money laundering" law has been used (successfully) against organized crime here in the U.S. Why doesn't the $8 billion and $25 billion a year from Mexican and Colombian drugs moved across the border fit the money laundering mold. If a drug courier (going either way) is involved in an illegal act, even though he is a minor player, is he not just as guilty? Because he is a player, the illegal act couldn't go on without him.

It seems to me that drug cartels and organized crime, avoid banks for two reasons: 1) it's illegal, and 2) no taxes. I can't remember what the limit is but if over say a $1,000 is deposited in a bank account, the bank is supposed to notify the Feds and you are hauled in and they want to know where you got that money and if you paid taxes on it. Right? Please correct me if I am wrong. (My wife is terrified of putting too much legal money into our account if it is cash so she makes 4 trips to the bank and deposits $250. each time).

Any day of the week, especially on Saturdays, you can find all these white girls lined up at my U.S. Post Office and Sam's in Nebraska wiring money to Mexico. About $25 billion annually goes out and most of it hasn't been taxed. That seems to me to be just as great a crime as drug and human smuggling.