In case after case, courts have deemed simply finding large amounts of hidden, unexplained cash sufficient to justify state seizure, often when no associated crime is prosecuted. That should change, though, after the US Supreme Court just ruled in a Texas case this week that more investigation is required to justify asset seizures. Reports the Christian Science Monitor ("Harder task to nail money launderers," June 3):
Uh, Clarence Thomas writing for the defense? Wow! That's the kind of ruling that makes you glad federal judges have lifetime appointments. Anyone worried about their political future would never make that determination, but SCOTUS supported it 9-0. (See a fuller discussion of the ruling at SCOTUSblog.)
Ruling against federal prosecutors in two cases on Monday, the high court reversed the conviction of a man caught with cash hidden in his car in Texas near the Mexican border, and the court refused to reinstate a money-laundering conviction in a case involving an illegal gambling operation in Indiana.
Both decisions hold potentially important implications for crime fighting. In both cases the justices rejected the Justice Department's expansive reading of the federal money-laundering statutes.
In the hidden cash case, the court ruled 9 to 0 that prosecutors had failed to prove their case when Humberto Fidel Regalado Cuellar was convicted of money laundering after authorities discovered $81,000 in a secret compartment in his car.
An appeals court upheld the conviction, but the Supreme Court on Monday reversed it.Writing for the court, Justice Clarence Thomas said: "We agree with the petitioner that the government must demonstrate that the defendant did more than merely hide the money during its transport.
The other ruling mentioned in the article might also have significant ripple effects if support for the majority weren't so shaky and disputed. SCOTUS ruled much more narrowly (4-1-4, with JP Stevens, the one, siding with Scalia's faction) that a law allowing seizures of "proceeds" from illegal gambling applied only to profits, but not payouts for winning bets or employee wages. Stevens and Alito cannot agree if the interpretation applies beyond gambling cases.
That's a good ruling in my view; it reduces incentives significantly for speculative forfeiture actions, making it more likely forfeiture decisions will be based on justice interests, not profit motives.
UPDATE: Scott Greenfield at Simple Justice says I misunderstood the implications of the ruling; they can still seize the cash, they just can't charge a defendant with money laundering for hiding it, he said. Check out his post.