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. So that none are misinformed by my posting wihtout a non de plume here, please allow me to state that I am NOT an Indiana licensed attorney, although I am an Indiana resident approved to practice law and represent clients in Indiana's fed court of Nth Dist and before the 7th circuit. I remain licensed in KS, since 1996, no discipline. This must be clarified since the IN court records will reveal that I did sit for and pass the Indiana bar last February. Yet be not confused by the fact that I was so allowed to be tested .... I am not, to be clear in the service of my duty to be absolutely candid about this, I AM NOT a member of the Indiana bar, and might never be so licensed given my unrepented from errors of thought documented in this opinion, at fn2, which likely supports Mr Smith's initial post in this thread: http://caselaw.findlaw.com/us-7th-circuit/1592921.html

  2. When I served the State of Kansas as Deputy AG over Consumer Protection & Antitrust for four years, supervising 20 special agents and assistant attorneys general (back before the IBLE denied me the right to practice law in Indiana for not having the right stuff and pretty much crushed my legal career) we had a saying around the office: Resist the lure of the ring!!! It was a take off on Tolkiem, the idea that absolute power (I signed investigative subpoenas as a judge would in many other contexts, no need to show probable cause)could corrupt absolutely. We feared that we would overreach constitutional limits if not reminded, over and over, to be mindful to not do so. Our approach in so challenging one another was Madisonian, as the following quotes from the Father of our Constitution reveal: The essence of Government is power; and power, lodged as it must be in human hands, will ever be liable to abuse. We are right to take alarm at the first experiment upon our liberties. I believe there are more instances of the abridgement of freedom of the people by gradual and silent encroachments by those in power than by violent and sudden usurpations. Liberty may be endangered by the abuse of liberty, but also by the abuse of power. All men having power ought to be mistrusted. -- James Madison, Federalist Papers and other sources: http://www.constitution.org/jm/jm_quotes.htm RESIST THE LURE OF THE RING ALL YE WITH POLITICAL OR JUDICIAL POWER!

  3. My dear Mr Smith, I respect your opinions and much enjoy your posts here. We do differ on our view of the benefits and viability of the American Experiment in Ordered Liberty. While I do agree that it could be better, and that your points in criticism are well taken, Utopia does indeed mean nowhere. I think Madison, Jefferson, Adams and company got it about as good as it gets in a fallen post-Enlightenment social order. That said, a constitution only protects the citizens if it is followed. We currently have a bevy of public officials and judicial agents who believe that their subjectivism, their personal ideology, their elitist fears and concerns and cause celebs trump the constitutions of our forefathers. This is most troubling. More to follow in the next post on that subject.

  4. Yep I am not Bryan Brown. Bryan you appear to be a bigger believer in the Constitution than I am. Were I still a big believer then I might be using my real name like you. Personally, I am no longer a fan of secularism. I favor the confessional state. In religious mattes, it seems to me that social diversity is chaos and conflict, while uniformity is order and peace.... secularism has been imposed by America on other nations now by force and that has not exactly worked out very well.... I think the American historical experiment with disestablishmentarianism is withering on the vine before our eyes..... Since I do not know if that is OK for an officially licensed lawyer to say, I keep the nom de plume.

  5. I am compelled to announce that I am not posting under any Smith monikers here. That said, the post below does have a certain ring to it that sounds familiar to me: http://www.catholicnewworld.com/cnwonline/2014/0907/cardinal.aspx

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