WASHINGTON — Hiding $81,000 in cash under the floorboard of a car and driving toward Mexico are not enough to prove the driver is guilty of money laundering, the Supreme Court ruled Monday. Instead, the court said, prosecutors must also prove the driver was traveling to Mexico for the purpose of hiding the true source of the funds.
This was one of a pair of decisions handed down Monday that could make it harder for prosecutors to win convictions for money laundering. This law has been one of the government’s most powerful weapons in the war on drugs.
In the second ruling, the court said the law against money laundering applies only to the profits of an illegal operation, not all of the cash it generates.
Although there are other laws that can be used to prosecute the smuggling of cash, Congress hoped to interrupt the drug trade when it made it a separate crime in 1986 to transport cash into or out of the country so as to carry on “unlawful activity” or to “conceal or disguise” the source of the money. This measure sometimes allowed prosecutors to win convictions and long prison terms by catching defendants who could not explain why they had large quantities of cash.
Defense lawyers complained the law was used to press defendants to plead guilty to other crimes, such as drug dealing. A conviction for money laundering can result in up to 20 years in prison.
Most people who carry large amounts of cash are inclined to hide it for security, said Washington defense attorney Jeffrey T. Green, so this alone should not be enough to prove the crime.
In a second ruling, the court by a 5-4 vote reversed an Indiana man’s conviction for money laundering that was based on the cash from an illegal lottery.
Justice Antonin Scalia said the law refers to the “proceeds of some form of unlawful activity.” Congress did not define proceeds, and Scalia said the court should give the benefit of the doubt to the defendant.
“The money-laundering charges brought against (defendant Efrain) Santos were based on his payments to the lottery winners and his employees,” Scalia said. This money cannot “fairly be characterized as involving the lottery’s profits.”
Chief Justice John Roberts and Justices Anthony Kennedy, Steven Breyer and Samuel Alito Jr. dissented, saying the law was intended to apply to all of the cash from an illegal operation, not just the profits.
