Thursday, June 05, 2008

SCOTUS: Just finding hidden cash not enough to justify asset seizure

It's a truism in Texas drug enforcement that dope runs north on the highways while money and guns flow south, so much so when the Department of Public Safety took over Texas' now-defunct drug task force system, they discovered some agencies were only working southbound lanes, ignoring the drug supply in hopes of making a big asset forfeiture score.

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):

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.
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.)

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.


Anonymous said...

Charles Kiker here

Chief Justice Roberts opined that money in a suitcase is not necessarily hidden cash. "If I put my clothes in a suitcase, am I hiding them?"

Anonymous said...

I'm glad this decision came down like this, I was tired of taping all of my cash to the inside of my windows for all to see in case they decided keeping it in my wallet was money laundering.

Anonymous said...

Damn boys this is Texas! Law enforcement in Texas has a primary function of generating cash for money hungry government agencies. In Temple, Texas where I live you can always find several local police units running radar or laser on I-35 but people can blow through the residential areas at 40 to 50 mph and have little chance of getting a ticket. I heard one local police officer refer to I-35 as the best fishing hole in town. So much for protect and server! After reading this blog post I now understand why Temple PD mostly operates their speed traps on the south bound part of I-35. I gain a great deal of understanding from reading Scott’s Blog, thanks Scott for helping this old guy to understand the crazy stuff that goes on in Texas. One common thread seems to be politics and money when you are trying to figure out some of the dumb ass stuff that goes on in Texas. Whatever happened to integrity, honesty, and serving the people of Texas by our elected officials. I always knew they stole a little but now days they are getting bold and in your face about their corruption. I guess it is just politics Texas style!

Anonymous said...

The patrons of Justice Clarence Thomas are the types of people who have access to large amounts of cash.

Anonymous said...

"Whatever happened to integrity, honesty, and serving the people of Texas by our elected officials."

You must be new here...

kbp said...

The thing about this mess of seizures that has always amazed me is that they can take it and YOU have to prove it's your personal property not gained by an illegal means.

The trend towards "prove you're innocent" has gone too far in the courts today, be it a civil or criminal case.

Anonymous said...

I have not read the opinion, but I couldn't help but notice there was no mention of any sort of reversal on the seizure of the money.

Lawyers, guns and money (make the world go round in South Texas), with apologies to the late Warren Zevon.

kbp said...

I must admit I'm just now getting around to reading a tab I'd opened from the links here!

"..he pulled from his pocket a wad of cash that smelled of marijuana, and his car bore features that suggested it had a secret compartment. "


That's worse than the ol' "my grandmother died" line, used to get out of working.