Justice Thomas, writing for a unanimous Supreme Court in Cuellar v. U.S., held that merely concealing currency in a secret compartment of a car was not tantamount to money laundering.

The capsule of the decision, courtesy of SCOTUSBlog :

The federal money laundering statute, 18 U.S.C. § 1956, prohibits international transportation of the proceeds of unlawful activity.  The statute requires the defendant to know that such transportation is “designed in whole or in part . . . to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity.”  In Cuellar v. United States, No. 06-1456, the Court considered whether that part of the statute requires the government to prove (1) that the defendant attempted to make illegal funds appear legitimate or (2) merely that the defendant hid the money during transportation. 

The answer:  neither.  On Monday, June 2, 2008, the Court held that although the government does not need to show that the defendant attempted to make illegal funds appear legitimate, it is required to show that the defendant did more than merely hide the funds during transport.  To sustain a conviction, the government must prove that the defendant knew that a purpose of the transportation was to conceal or disguise a listed attribute of the illicit funds.

This is another long-overdue decision, distinguishing the mere concealment of currency from the intent to disguise criminal proceeds. 

Scott at Grits for Breakfast has posted about Cuellar, both in praise of Justice Thomas (who’da thunk!) and to take this decision a few steps further. 

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.

While Cuellar’s implications for a money laundering conviction are significant, I doubt this decision will have any impact whatsoever on asset seizures.  They are two completely different animals in almost every respect.  Asset seizures are in rem proceedings against the cash, rather than in personam proceedings against the person.  The elements are entirely different, as well as the burden of proof, contrasting beyond a reasonable doubt with probable cause. 

Asset seizures of cash in excess of $10,000 are presumed to be criminal proceeds, having the effect of shifting the burden to the claimant to prove that the funds are lawful.  The proceedings are civil in nature, meaning that the discovery mechanisms are available to the government to demand where the assets came from and how they ended up in a secret compartment.  Lie under oath in discovery about the cash and end up sharing a cell with Martha Stewart. 

I wholly agree with Grits that asset forfeiture is one of the most notorious and outrageous scams that the government has in its arsenal, and like Scott I wish that some degree of fairness and due process was brought to bear on these actions.  I just can’t see how the Cuellar decision can be extended to reach it. 

So when the cops stop and search, find the cache of cash, there’s a good chance that they will smile and wave as they let you drive away.  But the reason they’re smiling is that they’ve got your money, and there’s no basis to believe that it’s going to change any time soon.