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Harder task to nail money launderers

Two high court rulings on Monday will complicate US efforts to prove certain crimes.

Jason Reed

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The Supreme Court has made it more difficult for the government to prove certain money-laundering crimes.

Ruling against federal prosecutors in two cases on Monday, the high court reversed the conviction of a man caught with cash hidden in his car in Texas near the Mexican border, and the court refused to reinstate a money-laundering conviction in a case involving an illegal gambling operation in Indiana.

Both decisions hold potentially important implications for crime fighting. In both cases the justices rejected the Justice Department's expansive reading of the federal money-laundering statutes.

In the hidden cash case, the court ruled 9 to 0 that prosecutors had failed to prove their case when Humberto Fidel Regalado Cuellar was convicted of money laundering after authorities discovered $81,000 in a secret compartment in his car.

An appeals court upheld the conviction, but the Supreme Court on Monday reversed it.

Writing for the court, Justice Clarence Thomas said: "We agree with the petitioner that the government must demonstrate that the defendant did more than merely hide the money during its transport."

At issue in the illegal gambling case was whether Congress used the word "proceeds" in the money-laundering statute to refer to the total amount of money received in a criminal operation or whether lawmakers were referring only to the criminal operation's profits after expenses were paid.

The question arose in a gambling case from East Chicago, Ind.

A federal appeals court ruled in 2006 that the "proceeds" referred to in the statute were merely the resulting profits of the gambling operation, not the larger amount of total receipts from all gamblers. The distinction isn't simply an accounting calculation or mere semantics. It can make the difference between a long prison sentence and an extraordinarily long sentence.


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