View Full Version : Is Hidden Money, 'Laundered' Money?

February 26th, 2008, 09:54 AM
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February 26, 2008

Justices Weigh if Cash Hidden Is Cash Laundered

By LINDA GREENHOUSE (http://topics.nytimes.com/top/reference/timestopics/people/g/linda_greenhouse/index.html?inline=nyt-per)

WASHINGTON ? In colloquial terms, ?money laundering? means cleaning
?dirty? money ? the proceeds of a drug transaction, for example ? by
using it in a way that hides its origins and gives it the appearance of
legitimate wealth.

The Supreme Court is not known for its bent for the colloquial, but a
majority of the justices appeared ready to insist on this definition, as a
matter of statutory interpretation, during an argument on Monday on the
scope of the federal Money Laundering Control Act.

That presented an obvious problem for the government, which interprets
the law a good deal more broadly, applying it in this case to the activity of
a courier who hid $83,000 in cash under the floorboard of his car as he
headed for the Texas border with Mexico.

According to the government, that act of concealment, as part of a plan to
take the money out of the country, was exactly what Congress had in mind
when it passed the act in 1986. The federal appeals court in New Orleans
agreed, upholding the money-laundering conviction of a Mexican man,
Humberto F. R. Cuellar, who was stopped on a Texas highway for driving
substantially under the speed limit. The police officers began searching the
car after they smelled marijuana on the roll of bills that Mr. Cuellar took out
of his pocket.

The justices on Monday appeared unpersuaded by the breadth of the
government?s argument, wondering why its interpretation of the statute
might not make a criminal out of someone who walked across the border
with a few dollars tucked into a shoe.

?I don?t know why they call this statute ?Laundering of Monetary
Instruments,? ? Justice Stephen G. Breyer (http://topics.nytimes.com/top/reference/timestopics/people/b/stephen_g_breyer/index.html?inline=nyt-per), referring to the set of provisions
at issue. ?Why didn?t they call it ?shoe hiding???

And Justice Ruth Bader Ginsburg (http://topics.nytimes.com/top/reference/timestopics/people/g/ruth_bader_ginsburg/index.html?inline=nyt-per) observed, ?On the government?s theory,
anyone who transports hidden money to get it out of the country, who
drives the car, just the driver, is a money launderer.?

An assistant to the solicitor general, Lisa H. Schertler, replied, ?No matter
how you see it, this was precisely the conduct that Congress was getting

The law makes it a crime to take the proceeds of ?some form of unlawful
activity? out of the country while concealing or disguising any of five of the
proceeds? ?attributes.? These are the money?s ?nature,? location, source,
ownership or control.

Mr. Cuellar?s lawyer, Jerry V. Beard, urged the justices to interpret the word
?conceal? in context, to mean some activity other than simply hiding cash.
?The statute does not criminalize concealing money?s existence,? Mr. Beard
said. He added that while his client ?may have in fact concealed money
itself, he did not conceal the ?nature, source, location, ownership or control?
of the unlawful proceeds.?

?Well, he certainly concealed the location,? Chief Justice John G. Roberts Jr. (http://topics.nytimes.com/top/reference/timestopics/people/r/john_g_jr_roberts/index.html?inline=nyt-per)

?All money changes location,? Mr. Beard replied, adding that the
government?s position ?would effectively render all transportation of funds
necessarily to be money laundering.? By contrast, he said, the crime of
money laundering requires the effort to ?minimize the criminal taint of
unlawful proceeds? by making them appear legitimate.

Although the chief justice?s initial questions during the argument suggested
that he supported the government, he later appeared to share the
mounting skepticism of his colleagues. When Ms. Schertler said that putting
money in a suitcase in a car?s trunk might be evidence of a ?design to
conceal,? Chief Justice Roberts said: ?When I use a suitcase, I?m using it to
carry my clothes, not to conceal them.?

Justice John Paul Stevens (http://topics.nytimes.com/top/reference/timestopics/people/s/john_paul_stevens/index.html?inline=nyt-per) told Ms. Schertler that the government?s position
in the case, Cuellar v. United States, No. 06-1456, seemed to make the
concept of money laundering, as such, irrelevant. ?Is this just a total wild
goose chase?? the justice asked.

The statute is a powerful prosecutorial weapon that carries a sentence of
up to 20 years and fines of $500,000 or more. In 2006, it accounted for
nearly 1,000 convictions. Another law, which requires reporting the
transportation of more than $10,000 in cash across the border, carries
much lighter sentences and is not often useful in the case of drug couriers,
because it requires proof that the defendant knew the law?s requirements
and was deliberately violating them.

In another development on Monday, the court accepted an appeal from the
State of Arizona on whether the police need a warrant to search a car after
arresting the driver and any passengers and removing them from the car?s

Over the years, the Supreme Court has ruled on so many permutations of
automobile searches that it might have seemed safe to assume that all
possible questions had been answered. But the one presented by this case,
Arizona v. Gant, No. 07-542, evidently has not been.

The Arizona Supreme Court ruled that once a car?s occupants had been
arrested and secured, presenting no threat to officers on the scene, there
were no ?exigent circumstances? to justify a search without warrants, and
that the Fourth Amendment required a warrant.

Arizona is arguing that its Supreme Court places too great a burden on the
police by underestimating the threat to their safety and requiring them to
make detailed assessments of different circumstances. Instead, the state
argues, there should be a ?bright-line rule? that permitted searches without
warrants of cars whose occupants had just been arrested.

February 26th, 2008, 10:09 AM
Judge, I think the money issue is wrong. There is a big difference in hiding 20 bucks in your shoe, when you cross over into Mexico, and stashing 83k in bills in the floorboards of the car.

On the search and siezure. I was taught that once the suspect is in custody. There are no exigent circumstances. Hence, no search without a warrant. The way around that is an inventory search, once the vehicle is impounded.

February 26th, 2008, 10:10 AM
Did he cross the border? Nope don't see he broke the law. And even then would they have to prove intent to wash the money? Heck I once in my life had 25 K with me in my car in an envelope stashed under the seat on the way to buy a car. Was I breaking the law? Yes it is another Oscar Observation of simplistic thinking. :D

February 26th, 2008, 10:21 AM
Oscar I think you?re on with this. You don?t carry that much money sitting in the pax seat. I had like 650 with me just the other day, is that a suspicious amount? What amount becomes enough to say it?s suspicious or criminal? Also, what law applies if you?re carrying large sums of money inside of one state? MAYBE if he was crossing state lines he could get in trouble with some undeclared interstate commerce, or like they were trying to nail him, going out of the country. This just doesn?t add up, I like the ?when I put clothes in a suit case it?s to carry them, not conceal them.?

February 26th, 2008, 10:22 AM
x2 on Nate and Oscar's position. It's a fine line, and I've tread it before I'm sure.

February 26th, 2008, 11:01 AM
Seems like a real stretch on the money laundering thing. I mean, the question has to be asked, if "hiding" the money under the floorboards is evidence of concealment, or if "hiding" it in a suitcase is evidence of laundering, is there any reasonable way to carry that much money that wouldn't be considered evidence of "laundering?"

The government's position would seem to be that unless the cash is laid out on the back seat in plain sight it is evidence of an intent to conceal or launder the money. I call BS because nobody would carry a large amount of cash like that.

If it's illegal to transport more than $10k in cash without declaring it (and I believe it is) then prosecute him for that. But without showing that he knew it was drug proceeds and was intentionally transporting it out of the country so as to conceal its illicit nature (which I'm sure is exactly what was happening) I don't see how they can make the laundering charge stick.

February 26th, 2008, 11:04 AM
As for the car search thing I know that under NY v. Belton an officer making an arrest can search the passenger area of a car and any other containers within the passenger area incident to the arrest. The idea is that he is looking for evidence that may be concealed there or weapons. My recollection is that a Belton search can be done immediately or can be done later after the passengers have been removed as long as the car is on the public highway. And a Carroll search of the entire car (including the trunk) can be conducted if the officer has probable cause and the car is on the public highway.

Depending on what they arrested the driver for, it would seem that they might have had probable cause to search the car, which would make a warrant unneccessary.

February 26th, 2008, 11:05 AM
Heck I once in my life had 25 K with me in my car in an envelope stashed under the seat on the way to buy a car.

I did the same thing once. When I paid for the car, they asked no questions, probably in hopes that they would get no answers. :D