'United States v. Santos': 'Proceeds' in Federal Criminal Money Laundering Statute, 18 U.S.C. Section 1956, Means 'Profits,' Not 'Gross Receipts' [June 13, 2008]   [open pdf - 72KB]

From the Summary: "On June 2, 2008, the U. S. Supreme Court, in 'United States v. Santos' (No. 96- 1005), vacated convictions of the operator of an illegal lottery and one of his runners who had been charged with conducting financial transactions involving the 'proceeds' of an illegal gaming business in violation of 18 U.S.C. [United States Code] § 1956. The ruling is that 'proceeds,' as used in this money laundering statute, means 'profits' rather than 'gross receipts' of the underlying unlawful activity. The decision combines a plurality opinion interpreting the word 'proceeds' in the statute to mean 'profits' and a concurring opinion, necessary for a majority ruling, that leaves room for interpreting 'proceeds' as 'gross receipts' in other circumstances. A strong dissenting opinion emphasized the constraints the ruling will place on prosecutors. The interpretation rests on two principles of statutory construction: the rule of lenity and the merger doctrine. Under the rule of lenity, ambiguities in criminal statutes are construed in favor of the defendant. Application of the merger doctrine avoids the prospect that a defendant would receive two punishments under different statutes for what is essentially a single offense. Because the decision is likely to hamper money laundering prosecutions, it is likely that the Department of Justice will pursue a legislative remedy to the ambiguity found in the statute. This report will be updated should there be legislative activity."

Report Number:
CRS Report for Congress, RS22896
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