Sunday, November 28, 2004

Money Laundering on Tuesday's Supreme Court Docket

This Tuesday the Supreme Court will hear oral argument in a case that is important to white collar crime law, as the case will determine whether the crime of conspiracy to commit money laundering under 18 U.S.C. 1956 requires an overt act.   The reason that this case is significant to white collar prosecutions and defense is because in recent years the government has been tacking on money laundering charges to cases involving  traditional white collar crimes, like mail or wire fraud. (see p. 201-05 Israel, Podgor, Borman, & Henning, White Collar Crime: Law & Practice).

The cases to be heard are Whitfield v. United States and Hall v. United States.  The defendants were alleged to have participated in a fraudulent investment scheme connected with a church organization.  (e.g. "Double Your Blessings Program")  Going across the country raising money, the defendants allegedly made promises of money to be made by investing with them.  According to the 11th Circuit decision in the Hall case, "many investors received little or no return on their gifts."  As you might suspect, the defendants, on the hand, were accused of receiving amounts of $539,000 and $678,000.  The government convicted Hall of conspiracy to commit mail fraud and conspiracy to commit money laundering.

Whether a conspiracy to commit money laundering requires an overt act will be the focus on Tuesday.  It is a fascinating question because the general conspiracy statute located at 18 U.S.C. 371 requires an overt act, while drug conspiracy statutes do not. The Court will likely spend significant time questioning the lawyers about the wording of the statute and the intent of Congress when the statute was passed.  But the bottom line really is - will money laundering end up being more like drug conspiracies or the regular generic conspiracies.   If the Court decides to omit the overt act in money laundering conspiracies then prosecutors will be able to charge this offense merely upon the agreement of the parties and the defendant's intent. The defendant will not have to take any steps toward the commission of the crime. The breadth of the money laundering statute is already obvious, as demonstrated by the fact that it is being used in white collar cases.  If no overt act is required for conspiracies to commit money laundering, the money laundering statute becomes an even more powerful tool for prosecutors.

(esp) 

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