Court rules for defendants on money laundering

Lawyer Blogs

The Supreme Court ruled Monday that federal prosecutors have gone too far in their use of money laundering charges to combat drug traffickers and organized crime.

In two decisions — one a 5-4 split, the other unanimous — the justices found that money laundering charges apply only to profits of an illegal gambling ring and cannot be used when the only evidence of a possible crime is when someone hides large amounts of cash in his car when heading for the border.

The government brings money laundering cases against more than 1,300 people annually and the justices appeared to agree with defense lawyers who said government prosecutors have been stretching the bounds of the law. The Justice Department drew little sympathy from Justice Antonin Scalia.

"The government exaggerates the difficulties" of enforcing a narrowed interpretation of money laundering, Scalia wrote in the gambling case involving an illegal lottery. Scalia drew the support of three other justices. The deciding fifth vote came in a separate opinion from a member of the liberal wing of the court, Justice John Paul Stevens. Stevens declined to go as far as Scalia did in rejecting the government's position.

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