U.S. Supreme Court Rules Against Government in Two Money Laundering Cases

By Dennis Lormel


This morning, the U.S. Supreme Court ruled against the government in two money laundering cases. In one case the Supreme Court overturned the money laundering conviction of Humberto Cuellar, who was convicted following his arrest in 2004, in Texas, while driving toward Mexico with $83,000 in cash hidden beneath the floor of his car. Police believed the money came from drug trafficking. In this case, the Supreme Court ruled the government failed to introduce evidence that the reason drug smugglers move money to Mexico is to conceal or disguise a listed attribute of the funds. In the other case, the Supreme Court overturned the money laundering conviction of Efrain Santos, who ran an illegal lottery in northwest Indiana. Santos was convicted of money laundering based on the payments he made to winners of the lottery and his employees. The Supreme Court ruled this was not enough to sustain a conviction and prosecutors had to show Santos laundered money he made from the criminal business.

I have not had the opportunity to review the findings in either case as yet. My concern is the rulings in these cases will have an extreme adverse impact on the government's ability to bring money laundering charges in future cases. Certainly the narrower focus will make it more challenging.

This is an issue Congress should look at closely. Law enforcement has limited resources to bring to bear on money laundering cases. If the standard of proof necessary to sustain convictions is elevated to extremely specific levels, the government will be forced to be more selective in the cases brought forward. The simple translation, criminals and terrorist financiers who rely on laundering funds to sustain their operations will be the winners at the expense of our economy and national security. Not a good outcome.

June 2, 2008 01:13 PM Link