Justices rule for defendants on money laundering
The Associated Press
Article Launched: 06/02/2008 08:16:23 AM MDT


WASHINGTON—The Supreme Court on Monday ruled against the government in two money laundering cases, making it more difficult for prosecutors to use an important weapon in the war on drugs and organized crime.
In a unanimous decision, Justice Clarence Thomas said that a money laundering case cannot be proven merely by showing that funds were concealed while being transported.

The case involved Efrain Santos, who was on his way to Mexico with over $80,000 concealed in a secret compartment of a car when he was arrested in Schleicher County in West Texas.

In a 5-4 ruling, Justice Antonin Scalia said that money laundering refers to profits of an illegal operation, not gross receipts. The court's interpretation is a narrow one opposed by law enforcement agencies.

Scalia said the narrow definition will not unduly burden authorities, who must show only that a single instance of unlawful activity was profitable.

In the cases of Santos and Benedicto Diaz, a federal judge and the 7th U.S. Circuit Court of Appeals in Chicago said that paying off gambling winners and compensating employees who collect the bets don't qualify as money laundering. Those are expenses, and prosecutors must show that profits were used to promote the illegal activity, the appeals court ruled in a decision affirmed by the Supreme Court.

In dissent, Justice Samuel Alito said that the court's ruling would frustrate congressional intent and "maim" a law that was enacted as



an important defense against organized criminal enterprises.
Money laundering carries a maximum penalty of 20 years in prison and prosecutors often use it in drug and gambling cases.

Congress enacted the anti-money laundering law in 1986 after the President's Commission on Organized Crime highlighted the growing problem of "washing" criminal proceeds through overseas bank accounts and legitimate businesses.

The cases are U.S. v. Santos, 06-1005, and Cuellar v. U.S., 06-1456.







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