Illegal drug operations, terrorist groups and other criminal enterprises use money laundering to hide the movement of their funds. So after reading in the Wall Street Journal that the Supreme Court ruled against the government in two distinct money laundering cases, my concern was that it may become harder for authorities to target terrorists and other criminals for prosecution.
Following a conversation with a money laundering expert, it became clear I was wrong.
In the first case decided on June 2, money hidden in a van was being ferried toward the Mexican border. The second case dealt with the movement of funds from an illegal lottery operation. In its rulings yesterday, the Supreme Court did some fine-tuning to the way money laundering cases must be proven.
“The justices thought about these at the same time although they are technically unrelated” cases, says John F. Cooney, partner in the Washington, D.C., office of law firm Venable LLP. Because the statutes are narrow, “I don’t think they are going to have a major effect on the money laundering generally,” says Cooney, whose work is concentrated in the banking and anti-money laundering areas. Although the Supreme Court has done some fine tuning with its rulings, Cooney explains that skilled prosecutors will still be able to prove their cases.
Terrorist money laundering is somewhat unique, anyway. In terrorism cases, money is unlikely to be leaving the country, but rather coming into the United States for operational or day-to-day funding. Additionally, terrorist cases tend to involve the use of funds for criminal purposes on the back-end, rather than disguising the source of money as in drug money laundering cases, Cooney says.
The recent Supreme Court decisions are unlikely to embolden terrorists. “These decisions are so narrow and technical that they would not give a terrorist any comfort,” he says. “You would not be able to fine tune your terrorist scheme enough to avoid prosecution.”
That’s good to hear.
Separately, my blog post, “Troubled times call for speedy gift card redemption,” appeared in the June 2, 2008, edition of the Carnival of 20-Something Finances, hosted by Dollar Frugal. Check it out.