WASHINGTON (CN) – The U.S. Supreme Court handed down a pair of decisions that limits the scope of federal law in money-laundering cases. The first ruling vacated the conviction of a man who hid $81,000 in cash under the floorboard of his car, while the second ruling found that the money-laundering law only applies to the profits made by illegal operations, not their operating costs.
In Cuellar v. U.S., the justices unanimously vacated the money-laundering conviction of Regalado Cuellar, who was arrested after Texas police seized $81,000 that had been bundled in plastic bags, covered in animal hair and stashed in a secret compartment under the rear floorboard of his car. He was convicted of money laundering for trying to covertly transport the money to Mexico, but the high court said prosecutors needed to prove not only that the defendant hid the $81,000 en route to Mexico, but also knew that the plan to transport the funds across the border was meant to disguise the source of the funds.
The ruling U.S. v. Santos vacated the convictions of individuals who ran an illegal lottery, took commissions from the bets, and used the rest to pay the salaries of collectors and winning gamblers.
The court held that the collectors cannot be convicted of money laundering for receiving salaries from the illegal scheme.
“Allowing the government to treat the mere payment of an illegal gambling business’ operating expenses as a separate offense is in practical effect tantamount to double jeopardy,” Justice Stevens concluded.