In the Courts

In United States v. Santos, No. 06-1005, slip op. (U.S. June 2, 2008), available at http://www.supremecourtus.gov/opinions/07pdf/06-1005.pdf, a plurality of the Court held that the term 'proceeds' in 18 U.S.C. ' 1956(a)(1) means 'profits,' and does not mean 'receipts,' when there is no legislative history to the contrary. The federal money-laundering statute makes it a crime for someone to knowingly use the proceeds of specific unlawful activity in a financial transaction. After parsing the statute and examining to the legislative history of the statute to no avail, the plurality invoked the rule of lenity, which 'requires ambiguous criminal laws to be interpreted in favor of defendants subjected to them.' Id. at 6. That meant that the more restrictive and defendant-friendly definition of 'proceeds' as including profits, rather than profits and receipts, was adopted by the plurality.

Supreme Court Sides with Defendants in Federal Money-Laundering Cases

The Supreme Court recently issued two opinions interpreting federal money-laundering statutes in favor of the criminal defendants. Justice Thomas, writing for a unanimous Court in Cuellar v. United States, No. 06-1456, slip op. (U.S. June 2, 2008), available at http://www.supremecourtus.gov/ opinions/07pdf/06-1456.pdf, held that the government must show that a defendant did more than just conceal money during transport to support a conviction under 18 U.S.C. ' 1956(a)(2)(B)(i), which prohibits international transportation of proceeds from unlawful activity. The petitioner was charged with attempting to transport the proceeds of unlawful activity across the border, knowing that the transportation was designed 'to conceal or disguise the nature, the location, the source, the ownership, or the control' of the money. 18 U.S.C. ' 1956(a)(2)(B)(i).

Cuellar was apprehended near the U.S-Mexico border with $81,000 in cash that a drug-detection dog found in a secret compartment of his vehicle. The Court's decision centered on whether the statute required the government to show that the concealment during transport was designed 'to conceal or disguise the nature, the location, the source, the ownership, or the control' of the money. In reversing the en banc decision of the Fifth Circuit Court of Appeals, the Court held that evidence of concealment of the funds during transport by itself was not sufficient to support Petitioner's conviction, because there was no evidence that the concealment when Cuellar was apprehended was designed 'to conceal or disguise the nature, the location, the source, the ownership, or the control' of the money.

In United States v. Santos, No. 06-1005, slip op. (U.S. June 2, 2008), available at http://www.supremecourtus.gov/opinions/07pdf/06-1005.pdf, a plurality of the Court held that the term 'proceeds' in 18 U.S.C. ' 1956(a)(1) means 'profits,' and does not mean 'receipts,' when there is no legislative history to the contrary. The federal money-laundering statute makes it a crime for someone to knowingly use the proceeds of specific unlawful activity in a financial transaction. After parsing the statute and examining to the legislative history of the statute to no avail, the plurality invoked the rule of lenity, which 'requires ambiguous criminal laws to be interpreted in favor of defendants subjected to them.' Id. at 6. That meant that the more restrictive and defendant-friendly definition of 'proceeds' as including profits, rather than profits and receipts, was adopted by the plurality.