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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  1. I just wanted to point out that Congressman Jim Sensenbrenner, Senator Feinstein, former Senate majority leader Bill Frist, and former attorney general John Ashcroft are responsible for this rubbish. We need to keep a eye on these corrupt, arrogant, and incompetent fools.

  2. Well I guess our politicians have decided to give these idiot federal prosecutors unlimited power. Now if I guy bounces a fifty-dollar check, the U.S. attorney can intentionally wait for twenty-five years or so and have the check swabbed for DNA and file charges. These power hungry federal prosecutors now have unlimited power to mess with people. we can thank Wisconsin's Jim Sensenbrenner and Diane Feinstein, John Achcroft and Bill Frist for this one. Way to go, idiots.

  3. I wonder if the USSR had electronic voting machines that changed the ballot after it was cast? Oh well, at least we have a free media serving as vicious watchdog and exposing all of the rot in the system! (Insert rimshot)

  4. Jose, you are assuming those in power do not wish to be totalitarian. My experience has convinced me otherwise. Constitutionalists are nearly as rare as hens teeth among the powerbrokers "managing" us for The Glorious State. Oh, and your point is dead on, el correcta mundo. Keep the Founders’ (1791 & 1851) vision alive, my friend, even if most all others, and especially the ruling junta, chase only power and money (i.e. mammon)

  5. Hypocrisy in high places, absolute immunity handed out like Halloween treats (it is the stuff of which tyranny is made) and the belief that government agents are above the constitutions and cannot be held responsible for mere citizen is killing, perhaps has killed, The Republic. And yet those same power drunk statists just reel on down the hallway toward bureaucratic fascism.

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