VICTORIES FOR MONEY-LAUNDERING DEFENDANTS

The Supreme Court yesterday made it tougher for prosecutors to prove
money-laundering charges, ruling twice against the government's
employment of what it says is a critical weapon in fighting drug
lords and other criminals.

The justices were unanimous in one case that merely proving that a
person hid drug money while transporting it was not enough to satisfy
the law's standard that the transportation was intended to disguise
the "nature, location, the source, the ownership or the control" of the funds.

But the court was splintered in the other case, interpreting the law
to refer only to the profits garnered from an illegal enterprise,
rather than gross receipts. The government said that would make
indictment far more difficult to prove.

Justice Samuel A. Alito Jr., a former prosecutor, led the dissenters
in the 5 to 4 ruling, saying the opinion "would frustrate Congress'
intent and maim a statute that was enacted as an important defense
against organized criminal enterprises."

Justice Antonin Scalia, who wrote for a four-member plurality in the
case, said that the money-laundering statute refers to criminal
"proceeds" but that Congress did not define the word further to mean
"receipts" or "profits."

"Under a long line of our decisions, the tie must go to the
defendant," Scalia wrote, saying the "rule of lenity" requires the
court to interpret the law in the light most favorable to those subject to it.

Justice John Paul Stevens broke what was in essence a 4 to 4 tie,
saying that in this instance he thought "proceeds" referred to
"profits." But he frustrated Scalia by saying that may not always be
the case, especially in prosecution of organized-crime syndicates, on
which he said Congress has been more clear.

Yesterday's decision came in United States v. Santos, in which Efrain
Santos and Benedicto Diaz ran an illegal lottery in Indiana. They
were convicted of several offenses, but a federal appeals court threw
out the money-laundering charge. It said that transactions such as
paying off winners and helpers in the enterprise did not qualify as
criminal profits and thus could not be the basis for money-laundering charges.

Without such an interpretation, Scalia wrote, "nearly every violation
of the illegal lottery statue would also be a violation of the
money-laundering statute."

In the other case, Humberto Fidel Regalado Cuellar was stopped in
2004 while driving erratically in southern Texas, headed for Mexico.
He aroused further suspicion when, after telling officers they could
search his car, began "making the sign of the cross," according to
the opinion written by Justice Clarence Thomas. Officers found
$81,000 that smelled like marijuana under the floorboard.

Cuellar was found guilty of violating the money-laundering law.

Thomas disagreed with Cuellar's argument that the law requires proof
that the defendant attempted to create the appearance that the money
was legitimate. But it does require more than simply proving the
money was concealed, the court found.