ILNews

SCOTUS quiet on money-laundering case

Michael W. Hoskins
January 1, 2008
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The nation's highest court hasn't yet ruled on an East Chicago case involving money laundering, but that could be because justices are waiting to hear a similar case before making a decision.

Indianapolis attorney Todd Vare with Barnes & Thornburg argued before the Supreme Court of the United States Oct. 3, but so far the court hasn't issued a decision on U.S. v. Efrain Santos, No. 06-1005.

Ten of the 14 cases argued that month have been ruled on, as well as other cases argued before the justices since October.

One possible reason the court hasn't ruled yet is that it's going to consider another similar case at the same time, said Vare, who represents Santos. Less than two weeks after his arguments last fall, justices accepted Cuellar v. U.S., No. 06-1456, that deals with the question of whether merely hiding funds without trying to make that money appear "clean" or "laundered" is sufficient to support a money-laundering conviction.

Arguments are set for Monday morning, and Vare anticipates the court will decide both simultaneously.

"It's possible - now quite probable - that the court will issue opinions in both cases on the same day," Vare said, adding that he hopes the delay will bode well for his client.

In Santos, the court is considering the definition of money laundering and the word "proceeds" as it's used in the federal statute. Federal Circuit Courts, including the 7th Circuit in Chicago, do not agree on an exact definition and have disagreed about whether it's considered money laundering to pay for the operation of a criminal enterprise with the profits of that illegal business. The nation's high court will determine whether the ban on the use of "proceeds" of a crime to promote or conceal it - "laundering" the proceeds - applies to the total amount of money or only the profits after expenses.

Specifically, this case involves the federal prosecution of an old tavern lottery raid where Santos - known as "Puerto Rican Frankie" - was arrested for running the illegal operation throughout northwest Indiana from the 1970s to 1994. He was sentenced to 17 years in prison in 1998, but he was later released after the 7th Circuit heard two other cases in 2000 and 2002 and issued rulings that changed the interpretation of money laundering.

Following those decisions, U.S. District Judge James Moody in Hammond ruled that Santos' actions were no longer considered money laundering because of an interpretation of "net proceeds" and "gross proceeds" in federal laws.

Vare took Santos' case as part of the 7th Circuit's pro bono appointment program.

The Cuellar case deals with the concealment prong of the statute, while Santos involves the "promotion" prong of the statute, Vare said. He recalled how several justices focused on how a ruling in Santos could affect cases arising under that concealment issue raised in Cuellar.
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  5. First, I want to thank Justice Rucker for his many years of public service, not just at the appellate court level for over 25 years, but also when he served the people of Lake County as a Deputy Prosecutor, City Attorney for Gary, IN, and in private practice in a smaller, highly diverse community with a history of serious economic challenges, ethnic tensions, and recently publicized but apparently long-standing environmental health risks to some of its poorest residents. Congratulations for having the dedication & courage to practice law in areas many in our state might have considered too dangerous or too poor at different points in time. It was also courageous to step into a prominent and highly visible position of public service & respect in the early 1990's, remaining in a position that left you open to state-wide public scrutiny (without any glitches) for over 25 years. Yes, Hoosiers of all backgrounds can take pride in your many years of public service. But people of color who watched your ascent to the highest levels of state government no doubt felt even more as you transcended some real & perhaps some perceived social, economic, academic and professional barriers. You were living proof that, with hard work, dedication & a spirit of public service, a person who shared their same skin tone or came from the same county they grew up in could achieve great success. At the same time, perhaps unknowingly, you helped fellow members of the judiciary, court staff, litigants and the public better understand that differences that are only skin-deep neither define nor limit a person's character, abilities or prospects in life. You also helped others appreciate that people of different races & backgrounds can live and work together peacefully & productively for the greater good of all. Those are truths that didn't have to be written down in court opinions. Anyone paying attention could see that truth lived out every day you devoted to public service. I believe you have been a "trailblazer" in Indiana's legal community and its judiciary. I also embrace your belief that society's needs can be better served when people in positions of governmental power reflect the many complexions of the population that they serve. Whether through greater understanding across the existing racial spectrum or through the removal of some real and some perceived color-based, hope-crushing barriers to life opportunities & success, movement toward a more reflective representation of the population being governed will lead to greater and uninterrupted respect for laws designed to protect all peoples' rights to life, liberty & the pursuit of happiness. Thanks again for a job well-done & for the inevitable positive impact your service has had - and will continue to have - on countless Hoosiers of all backgrounds & colors.

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