Finally: Some Common Sense on Money Laundering
For more than 20 years, I've opposed making money laundering a criminal offense on many grounds.But most importantly: Since enacting the first money laundering law in 1986, the U.S. government has expanded this law to the point where prosecutors can add money-laundering charges to virtually any prosecution involving money. The penalties for money laundering are much more severe than for other crimes, so criminal defendants must plead guilty or face much higher sentences. Now, the Supreme Court has injected a small element of sanity into the money laundering law. In two decisions it handed down last week, the court concluded:
~The mere fact that you "conceal" money doesn't violate the money laundering statute. The government must also prove you concealed your funds to hide the source, ownership, or control of the money.
~The "proceeds" of a money laundering crime should be interpreted to mean profits and not gross receipts.
Taken together, these decisions significantly restrict the reach and scope of the money-laundering statute. One practical effect is that you can no longer be prosecuted for money laundering just for keeping cash in your home, in a safety deposit box, or in your vehicle. But more significantly, the decisions mean that the government won't be able to convert garden-variety financial crimes into money laundering prosecutions. For the moment, these decisions are good news for anyone concerned about financial privacy. Not to mention the overarching authority of a government that demands that we reveal every detail of our financial affairs, or face draconian criminal sanctions.
For more than 20 years, I've opposed making money laundering a criminal offense on many grounds.But most importantly: Since enacting the first money laundering law in 1986, the U.S. government has expanded this law to the point where prosecutors can add money-laundering charges to virtually any prosecution involving money. The penalties for money laundering are much more severe than for other crimes, so criminal defendants must plead guilty or face much higher sentences. Now, the Supreme Court has injected a small element of sanity into the money laundering law. In two decisions it handed down last week, the court concluded:
~The mere fact that you "conceal" money doesn't violate the money laundering statute. The government must also prove you concealed your funds to hide the source, ownership, or control of the money.
~The "proceeds" of a money laundering crime should be interpreted to mean profits and not gross receipts.
Taken together, these decisions significantly restrict the reach and scope of the money-laundering statute. One practical effect is that you can no longer be prosecuted for money laundering just for keeping cash in your home, in a safety deposit box, or in your vehicle. But more significantly, the decisions mean that the government won't be able to convert garden-variety financial crimes into money laundering prosecutions. For the moment, these decisions are good news for anyone concerned about financial privacy. Not to mention the overarching authority of a government that demands that we reveal every detail of our financial affairs, or face draconian criminal sanctions.
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