Money laundering: On a hanger or in a box?

Sep 09, 2008 Money laundering: On a hanger or in a box?

 Image from Bureau of Engraving and Printing’s website.

The closest I ever came to being a cop was my year before law school as a financial auditor at a large Wall Street commercial bank. Early on, among our duties, we were taught to monitor for violations of the money laundering laws, by verifying that IRS Form 8300 had been properly filed for cash transactions over $10,000, and that multiple deposits by the same customer were not being used to circumvent the money laundering laws. Later on, one of my department’s vice presidents, a very colorful man, did a training presentation on money laundering, and spoke of the law’s focus on drugs, which I felt was a waste of time and resources for the criminal law to focus on. It was 1985, in the midst of Nancy Reagan’s oversimplified "Just Say No to Drugs" campaign (easier for many to say about cocaine and heroin, but how about valuum and percodan?).

Today, money laundering is a significant part of many federal prosecutions for such cases as drug felonies. Worth reading for the limitations on the reach of the money laundering laws are the following Supreme Court cases from the last term. In Cuellar v. U.S., ___ U.S. ___, 128 S. Ct. 1994 (2008), the Supreme Court limited the circumstances under which a person can be inferred to know that a plan to transport funds to outside the United States "was designed at least in part to ‘conceal or disguise the nature, the location, the source, the ownership, or the control’ of the funds. 18 U. S. C. §1956(a)(2)(B)(i)." Cuellar (Alito, J., concurring).

In U.S. v. Santos, ___ U.S. ___ 128 S. Ct. 2020, (2008), Justice Scalia — writing for a four-justice plurality and construing the meaning of that case when adding Justice Stevens’s concurring opinion — concluded that:

"The money-laundering charges brought against Santos were based on his payments to the lottery winners and his employees, and the money-laundering charge brought against Diaz was based on his receipt of payments as an employee. Neither type of transaction can fairly be characterized as involving the lottery’s profits. Indeed, the Government did not try to prove, and respondents have not admitted, that they laundered criminal profits. We accordingly affirm [the lower court’s dismissal of the convictions]."  Jon Katz

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