Cuellar v. US--summary of Decision

I predicted that the Supreme Court would reverse the Fifth Circuit in this case, thereby reversing the conviction of Mr. Cuellar for money-laundering when what he had done was to hide drug money in the floor boards of his car as he sped through Texas towards Mexico. No question about it--Mr. Cuellar's activity was illegal; it just wasn't money-laundering. The Supreme Court (opinion by Thomas) said so unanimously. When a "tough on crime" Supreme Court reverses a criminal conviction, you know that the lower court reading of the law permitting or upholding the conviction was skewed. This will be a longish essay quoting at length from the Syllabus of the decision.

Facts and Procedural Background

"Arrested after a search of the car he was driving through Texas toward Mexico revealed nearly $81,000 bundled in plastic bags and covered with animal hair in a secret compartment under the rear floorboard, petitioner was charged with, and convicted of, attempting to transport “funds from a place in the United States to ... a place outside the United States ... knowing that the ... funds ... represent the proceeds of ... unlawful activity and ... that such transportation ... is designed ... to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of” the money, in violation of the federal money laundering statute, 18 U.S.C. § 1956(a)(2)(B)(i). Affirming, the Fifth Circuit rejected as inconsistent with the statutory text petitioner's argument that the Government must prove that he attempted to create the appearance of legitimate wealth, but held that his extensive efforts to prevent the funds' detection during transportation showed that he sought to conceal or disguise their nature, location, source, ownership, or control."

The Court's Holding

In few words, the Court held:

"Although § 1956(a)(2)(B)(i) does not require proof that the defendant attempted to create the appearance of legitimate wealth, neither can it be satisfied solely by evidence that the funds were concealed during transport. The statutory text makes clear that a conviction requires proof that the transportation's purpose-not merely its effect-was to conceal or disguise one of the listed attributes: the funds' nature, location, source, ownership, or control."

Reasoning

Even though the Court was ultimately going to agree with Cuellar's argument (that he didn't launder the money), the Court first clarified that there was no "appearance of legitimate wealth" requirement in the law (i.e., Cuellar's lawyers had argued that the law required this and that Cuellar didn't fit that definition).

"The statute contains no “appearance of legitimate wealth” requirement. Although petitioner is correct that taking steps to make funds appear legitimate is the common meaning of “money laundering,” this Court must be guided by a statute's words, not by its title's common meaning, to the extent they are inconsistent, see Pennsylvania Dept. of Corrections v. Yeskey, 524 U.S. 206, 212, 118 S.Ct. 1952, 141 L.Ed.2d 215. Here, Congress used broad language that captures more than classic money laundering: In addition to concealing or disguising the nature or source of illegal funds, Congress also sought to reach transportation designed to conceal or disguise the funds' location, ownership, or control. Nor does the Court find persuasive petitioner's attempt to infuse a money-laundering requirement into the listed attributes. Only the attribute “nature” is coextensive with the funds' illegitimate character, but that does not mean that Congress intended nature to swallow the other attributes. The Court is likewise skeptical of petitioner's argument that violating the statute's elements would necessarily have the effect of making the funds appear more legitimate than they did before. It is not necessarily true that concealing or disguising any one of the listed attributes may have the effect of making the funds appear more legitimate by impeding law enforcement's ability to identify illegitimate funds. Finally, the Court disagrees with petitioner's argument that § 1956(a)(2) must be aimed at something other than merely secretive transportation of illicit funds because that conduct is already punished by the bulk cash smuggling statute, 31 U.S.C. § 5332. Even if § 1956(a)(2)(B)(i) has no “appearance of legitimate wealth” requirement, the two statutes nonetheless target distinct conduct, in that § 5332(a)(1) encompasses, inter alios, a defendant who, “with the intent to evade a currency reporting requirement ..., knowingly conceals more than $10,000 ... and transports [it] from ... the United States to a place outside” the country."

With all this disagreement with Cuellar, you would think that his case was lost. But, it wasn't, as the following explains:

"The evidence that petitioner concealed the money during transportation is not sufficient to sustain his conviction. In determining whether he knew that “such transportation,” § 1956(a)(2)(B)(i), was designed to conceal or disguise the specified attributes of the illegally obtained funds, the critical transportation was not the transportation of the funds within this country on the way to the border, but transportation “from a place in the United States to ... a place outside the United States,” ibid.-here, from this country to Mexico. Therefore, what the Government had to prove was that petitioner knew that taking the funds to Mexico was “designed,” at least in part, to conceal or disguise their “nature,” “location,” “source,” “ownership,” or “control.” The Court agrees with petitioner that merely hiding funds during transportation is not sufficient to violate the statute, even if substantial efforts have been expended to conceal the money. This conclusion turns on § 1956(a)(2)(B)(i)'s text, particularly the term “design,” which the dictionaries show means purpose or plan; i.e., the transportation's intended aim. Congress wrote “knowing that such transportation is designed ... to conceal or disguise” a listed attribute, and when an act is “designed to” do something, the most natural reading is that it has that something as its purpose. Because the Fifth Circuit used “design” to refer not to the transportation's purpose but to the manner in which it was carried out, its use of the term in this context was consistent with the alternate meaning of “design” as structure or arrangement. It is implausible, however, that Congress intended this meaning. If it had, it could have expressed its intention simply by writing “knowing that such transportation conceals or disguises,” rather than the more complex formulation “knowing that such transportation ... is designed ... to conceal or disguise.” § 1956(a)(2)(B)(i). It seems far more likely that Congress intended courts to apply the familiar criminal law concepts of purpose and intent than to focus exclusively on how a defendant “structured” the transportation. In addition, the structural meaning of “design” is both overinclusive and underinclusive: It would capture individuals who structured transportation in a secretive way but lacked any criminal intent (such as a person who hid illicit funds en route to turn them over to law enforcement); yet it would exclude individuals who fully intended to move the funds in order to impede detection by law enforcement but failed to hide them during transport."

Instead of bundling the money as he did and driving it to Mexico being a sign that Cuellar was laundering money under the meaning of the statute, it was merely probative of a goal to evade detection while driving with the money. As the Court said:

"In this case, evidence that petitioner transported the cash bundled in plastic bags and hidden in a secret compartment covered with animal hair was plainly probative of an underlying goal to prevent the funds' detection during the drive into Mexico. However, even with the abundant evidence that petitioner had concealed the money in order to transport it, the Government's own expert testified that the transportation's purpose was to compensate the Mexican leaders of the operation. Thus, the evidence suggested that the transportation's secretive aspects were employed to facilitate it, but not necessarily that secrecy was its purpose. Because petitioner's extensive efforts to conceal the funds en route to Mexico was the only evidence the Government introduced to prove that the transportation was “designed in whole or in part to conceal or disguise the [funds'] nature, ... location, ... source, ... ownership, or ... control,” petitioner's conviction cannot stand."

There you have it...an other case that caused no waves in almost any circle. But, rest assured, some "big cases" are still to come this term.

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