- The Washington Times - Tuesday, February 26, 2008


The Supreme Court suggested yesterday that 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, said 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 that the court has heard this term.

Four months ago, the justices expressed other concerns about 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 persons 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, according to the Justice Department’s National Drug Intelligence Center.

In the case yesterday, 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 officers search his car, authorities found more than $80,000 in cash in a secret compartment. Cuellar was convicted of international money laundering and sentenced to 6½ 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 G. Roberts Jr. and Justices Anthony M. Kennedy, Stephen G. Breyer and David H. 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, Justice 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,” Justice 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.”

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

Santos was sentenced to five years in prison for gambling and 17½ 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.

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