# Amicus Curiae Brief — Cuellar v. United States

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385016_0537%3A10

## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 2008
- **Citation:** 553 U.S. 550

## Text

FILED

S(oTY/|
«\ Oo ! DEC 14 2007
2 x “Ps No. 06-1456 SUPREME COURT ES

IN THE
Supreme Court of the Anited States

HUMBERTO FIDEL REGALADO CUELLAR,
Petitioner,

Vv.

UNITED STATES OF AMERICA,
< Respondent.

On Writ of Certiorari
to the United States Court of Appeals for the Fifth Circuit

AMICUS CURIAE BRIEF OF NATIONAL
ASSOCIATION OF CRIMINAL DEFENSE
LAWYERS IN SUPPORT OF PETITIONER

JEFFREY T. GREEN CralIG D. SINGER
SIDLEY AUSTIN LLP (Counsel of Record)
1501 K Street, NW JOHN E. CLABBY
Washington, DC 20005 CHRISTOPHER R. HART
(202) 736-8000 Davip A. TAYLOR
WILLIAMS & CONNOLLY LLP
725 Twelfth Street, NW
Washington, DC 20005
(202) 434-5000
Attorneys for Amicus Curiae

National Association of Criminal Defense Lawyers.

Wiison-EPes PRINTING Co., Inc. — (202) 789-0096 — WASHINGTON, D.C. 20002

aa?

QUESTION PRESENTED

Whether merely hiding funds with no design
to create the appearance of legitimate wealth is

sufficient to support a conviction for money
laundering under 18 § U.S.C. § 1956(a)(2).

QUESTION PRESENTED

ii
TABLE OF CONTENTS ©

SESS EHEE HH HHH HEHEHE

IIE vcictenicveccnvvenivensrevccssmenseseesvenesnenese ii
INTEREST OF AMICUS CURIAE...............cccccccccssesesees 1
IED erscsevientnerensennvenvenssewseemntenninmnenestuowuneennne 2

Il.

THE FIFTH CIRCUITS
INTERPRETATION OF “CONCEAL OR
DISGUISE” EXPANDS 18 U.S.C. § 1956
BEYOND CONGRESS'S INTENT AND

FOSTERS UNJUST RESULTG................c:cccse0e0 4

A.

“The Money Laundering Statute

Is Subject to Expansive
Interpretations That Invite
Prosecutorial Over-Reliance.................... 4

Many Courts Consistently Have
Expanded Specific Terms of 18

U.S.C. § 1956, Encouraging Broad,
Unintended, and Unfair

Applications of the Statute...................... 6

Expansive Interpretations of

§ 1956 Have Significant Negative
Ramifications for the Criminal
ee iecniircimtassemmeneees 13

MANY DEFENDAN’’S WHO SUFFER

OVERBROAD APPLICATION OF
§ 1956 WOULD BE SUBJECT TO
PROSECUTION UNDER OTHER
CRIMINAL STATUTES IN ANY

____,_ SEES Neer 16

CONCLUSION

iv
TABLE OF AUTHORITIES
FEDERAL CASES
Blakely v. Washington, 542 U.S. 296 (2004)............ 17

Santos v. United States, 461 F.3d 886
ETAT eee 10

United States v. Akintobi, 159 F.3d 401
i a i cerca eermrereresnnnns 10

United States v. Cuellar, 478 F.3d 282
inane ceinerennencnegeas 15,17

United States v. Dimeck, 24 F.3d 1239
Tae 9

United States v. Elso, 422 F.3d 1305
ee 7

United States v. Epstein, 426 F.3d 431
cc 11

United States v. Estacio, 64 F.3d 477
NT 10

United States v. Flores, 454 F.3d 149
re 11

United States v. Grasso, 381 F.3d 160
i errant 10

United States v. Haun, 90 F.3d 1096
nis a errteneranenenansseunnnes i]

United States v. Hurtado, 38 F. App’x. 661

EERE. AE ERE SO Te 7
United States v. Iacaboni, 363 F.3d 1

ETE SUE IT ea a 10
United States v. Leslie, 103 F.3d 1093

SE ee ee OC Ee 12
United States v. Lopez, 514 U.S. 549 (1995)............ 12

United States v. Ness, 466 F.3d 79
FEST a anne ae 7

United States v. Posters ‘N’ Things, Ltd., 969 F.2d
elaine 8

United States v. Reed, 77 F.3d 139
EERE SPE ar nee renee OP 8

United States v. Sayakhom, 186 F.3d 928
ESTES ee 11

United States. v. Shepard, 396 F.3d 1116
RIT 8

United States v. Skinner, 946 F.2d 176
EE ee 12

United States v. Sutera, 933 F.2d 641
I a 8

United States v. Valuck, 286 F.3d 221
STR SA TES 12

United States v. Wydermyer, 51 F.3d 319

i. 9 8,9
DOCKETED CASES —
United States v. Santos, No. 06-1005 (cert. granted
Age. BB, BODT) .22<0.cercceccescsccccccccscsccccccssessees 10, 11
FEDERAL STATUTES
BB U.B.C.. 6 BBG .nnccccceccccesccccescsccccesecsosscossessossess passim
Lit. 8 > , passim
BB UBL. 6 BBG nxccccccccecccccscecescsccccsscsesessnscssssssccsessonse 17
ll -) 17
31 J) A) 17
te | 17
Lt Te |, ee 17
OT Ed: 17
RE 14, 17

U.S.S.G. § 2S1.1(DM2NMB)...........ecececeereeeeeeeeeeeseneneeneees 15

vii
MISCELLANEOUS

2007 National Money Laundering Strategy, available
at http://www.treas.gov/press/releases/
docs/nmls.pdf (last visited
Be a acrieiiiiaiiaiiciiicinicienncitttnsiiasbondaiinasis 14

Adam K. Weinstein, Prosecuting Attorneys for Money
Laundering: A New and Questionable. Weapon
in the War on Crime, 51 Law & Contemp.
Probs. 369 (Winter 1988) ...............:cccccccsseeeeeees 4

Ellen S. Podgor, Book Review, Money Laundering
and Legal Globalization: Where Does the
United States Stand on This Issue?, 5 Wash.
U. Global Stud. L. Rev. 151 (2006) .................. 6

Eric. J. Gouvin, Are There Any Checks and Balances
on the Government’s Power to Check Our
Balances? The Fate of Financial Privacy in the
War on Terrorism, 14 Temp. Pol. & Civ. Rts.
AERA CR Se mages ee 15

John K. Villa, Banking Crimes (2001) ................. 9,14

Larry D. Thompson & Elizabeth Barry Johnson,
Money Laundering: Business Beware, 44 Ala.
ERRORS Ea ran 6

Mariano-F lorentino Cuellar, Criminal Law: The
Tenuous Relationship Between the Fight
Against Money Laundering and the Disruption
of Criminal Finance, 93 J. Crim. L. &
Criminology 311 (2003) ..............cccccccc00e. passim

Viii
Mary McNamara, Edward W. Swanson, & Alexis
Haller, Money Laundering: How Prosecutors
Clean up Under 18 U.S.C. Sections 1956 and
1957, 26 Forum 61 (1999), available at

http://www.smhlegal.com/articles/
money%20laund.pdf (last visited Dec. 13,

NACDL Money Laundering Task Force, Proposals to
Reform the Federal Money Laundering
Statutes (Aug. 1, 2001), available at
http://www.nacdl.org/public.nsf/legislation/
CI_01_018?o0pendocument (last visited Dec.
is at eictennninitnntniaatibislindenieadingiaibespdeimenane: 2

Norman Abrams & Sara Sun Beale, Federal
Criminal Law and Its Enforcement
I lta lc errmiinnsnen 4

Sally Baghdasarian, Note, Gatekeepers: How the
Broad Application of Anti-Money Laundering
Statutes and Strategies May Open an
Attorney’s Gates to Prosecution, 32 Sw. U. L.
BE, Se a aincnticiintninsiipeninmectigecminetemneennes 5

Scott J. Golde & Winston E. Calvert, A Practitioner’s
Guide to the Federal Money Laundering
Statutes, 62 J. Mo. B. 312 (2006) ..............0.00-0- 5

Teresa E. Adams, Notes & Comments, Tacking on
Money Laundering Charges to White Collar
Crimes: What Did Congress Intend, and What
Are the Courts Doing?, 17 Ga. St. U. L. Rev.
TE TON WER or mane Deere 13

ix
Tracy Tucker Mann, Money Laundering: Twenty-

Second Survey of White Collar Crime, 44 Am.
Crim. L. Rev. 769, 777-78 (2007) ............ 11,12

United States Sentencing Guidelines Manual
GERD UEED ccvmsnecsvsassonsonsssorpuansnsennecsvesqsesesseuvessequesuns 14

IN THE
Supreme Court of the Anited States

No. 06-1456

HUMBERTO FIDEL REGALADO CUELLAR,
Petitioner,
Vv.

UNITED STATES OF AMERICA,
Respondent.

On Writ of Certiorari
to the United States Court of Appeals for the Fifth
Circuit

INTEREST OF AMICUS CURIAE!

The National Association of Criminal Defense
Lawyers (“NACDL”) is a non-profit organization
with direct national membership of over 11,500
attorneys, in addition to more than 28,000 affiliate
members from all 50 states. Founded in 1958,
NACDL is the only professional bar association that

1 Pursuant to Supreme Court Rule 37.6, counsel for amicus
states that no counsel for a party authored this brief in whole
or in part, and that no person other than amicus, its members,
or its counsel made a monetary contribution to the preparation
or submission of this brief. Letters of consent to the filing of
this brief have been lodged with the Clerk of the Court
pursuant to Rule 37.3.

2

represents public defenders and private criminal
defense lawyers at the national level. The American
Bar Association recognizes NACDL as an affiliated
organization with full representation in the ABA
House of Delegates. NACDL’s mission is to ensure
justice and due process for the accused; to foster the
integrity, independence, and expertise of the
criminal defense profession; and to promote the
proper and fair administration of criminal justice,
including issues -involving the Bill of Rights.
Consistent with these goals, NACDL has previously
criticized illogical and improper judicial expansions
of the money laundering statute at issue in this case,
18 U.S.C. § 1956.2 Amicus also highlighted the legal
problems and practical consequences of expansive
interpretations of § 1956 in its brief in support of
Respondents in United States v. Santos, No. 06-1005,
for which this Court held oral argument on October
3, 2007.

INTRODUCTION

Amicus agrees with Petitioner that merely
hiding funds with no design to create the appearance
of legitimate wealth is insufficient to support a
money laundering conviction. Amicus submits this
brief to elaborate on the reasons why, in its view, the
expansive interpretation of the “conceal or disguise”

2 See NACDL Money Laundering Task Force, Proposals
to Reform the Federal Money Laundering Statutes
(Aug. 1, 2001), available at
http//www.nacdl.org/public.nsMegislation/CI_01_018?opendocu
ment (last visited Dec. 13, 2007).

3

clause of the principal federal money laundering
statute, 18 U.S.C. § 1956(a), given by some courts of
appeals conflicts with the plain language and
meaning of that statute. Amicus writes principally
to explain how the increased and continued
expansion of the money laundering statute has real
and detrimental effects on the rights of criminal
defendants and on the enforcement of the money
laundering statutes.

The expansive and unwarranted
interpretation adopted by the Fifth Circuit below,
and by the Second, Third, and Eleventh Circuits «a
analogous circumstances, improperly expands the
scope of an already broad statute far beyond its
intended reach. Section 1956 has become a vehicle
for increasing potential sentences substantially in
excess of what otherwise would be permissible for
the underlying conduct, without any showing of the
aggravated societal harm that the money laundering
statute was designed to redress. If this over-
expansive interpretation is allowed to _ stand,
criminal defendants unjustly will face longer
sentences and will be forced to weigh the potential
for such sentences in considering whether to plead

guilty.

These grave concerns regarding the scope of
the money laundering statute militate strongly in
favor of reversal. Amicus respectfully requests that
this Court restore the meaning of “conceal or
disguise” in § 1956 to that which the statutory
language supports and which Congress intended.

4
ARGUMENT

I. THE FIFTH CIRCUIT'S
INTERPRETATION OF “CONCEAL OR
DISGUISE” EXPANDS 18 U.S.C. § 1956
BEYOND CONGRESS’S INTENT AND.

FOSTERS UNJUST RESULTS.

A. The Money Laundering Statute Is
Subject to Expansive
Interpretations That Invite
Prosecutorial Over-Reliance.

The Money Laundering Control Act of 1986
(“MLCA”), codified at 18 U.S.C. §§ 1956-1957, was
the first federal statute to criminalize money
laundering per se. See Adam K. Weinstein, Note,
Prosecuting Attorneys for Money Laundering: A New
and Questionable Weapon in the War on Crime, 51
Law & Contemp. Probs. 369, 372—73 (Winter 1988).
As enacted, the MLCA was and is a powerful tool for
prosecutors. Compared with RICO and various
criminal conspiracy statutes, prosecutors can bring
cases relatively easily under § 1956, and its long list
of predicate offenses facilitates convictions. See,
e.g., Norman Abrams & Sara Sun Beale, Federal
Criminal Law and Its Enforcement 397 (3d ed. 2000).

Although the scope of the MLCA was broad
when enacted, many courts since have interpreted

3 Section 1956(c)(7) provides a lengthy list of offenses that
qualify as “specified unlawful activity,” including the definition
of racketeering found in § 1961(1) (which includes, inter alia,
mail and wire fraud).

5

the statute to capture conduct substantially beyond
traditional money laundering. See Scott J. Golde &
Winston E. Calvert, A Practioner’s Guide to the
Federal Money Laundering Statutes, 62 J. Mo. B.
312, 312 (2006) (“The federal statutes not only cover
the classic money laundering scenario where an
individual takes steps to make illegally earned
assets appear legitimate, they also affect a far
broader range of conduct that many would not
consider ‘laundering’ money.”); Sally Baghdasarian,
Note, Gatekeepers: How the Broad Application of
Anti-Money Laundering Statutes and Strategies May
Open an Attorney’s Gates to Prosecution, 32 Sw. U. L.
Rev. 721, 723 (2003) (“The scope of the MLCA can be
rather broad. In fact, the statute can reach so far as
to impose liability on individuals, such as attorneys,
who were not originally involved in any illegal
activity, but later became involved in post-illegal
activity.” (footnote omitted).

Prosecutors accordingly may seek to “tack on”
money laundering charges where the alleged
“laundering” conduct is incidental to or virtually
indistinguishable from the underlying offense. More
broadly, they may seek to use the money laundering
statutes to punish conduct well beyond those
statutes’ proper realm. See Mariano-Florentino
Cuellar, Criminal Law: The Tenuous Relationship
Between the Fight Against Money Laundering and
the Disruption of Criminal Finance, 93 J. Crim. L. &
Criminology 311, 406 (2003) (“People committing
federal offenses that can be predicates for money
laundering (such as drug trafficking), for example,
can now be charged with money laundering for doing
almost anything in the world with money from

6

specified unlawful activity, because of the watered
down interpretations of the anti-money laundering
statutes.”); see also Ellen S. Podgor, Book Review,
Money Laundering and Legal Globalization: Where
Does the United States Stand on This Issue?, 5 Wash.
U. Global Stud. L. Rev. 151, 152 (2006) (“While being
a leader in fighting money laundering activity, the
U.S. Department of Justice has used new statutes
creatively to expand _ prosecutorial power beyond its
intended purpose.”). So broad is the money
laundering statutes’ potential scope that legitimate
conduct may be threatened. See Larry D. Thompson
& Elizabeth Barry Johnson, Money Laundering:
Business Beware, 44 Ala. L. Rev. 703, 723 (1993)
(“[Ajdditional guidelines are needed to prevent
overzealous prosecutors from misapplying the
statutes and to ensure that corporations are not
deterred from entering into legitimate business
transactions.”).

B. Many Courts Consistently Have
Expanded Specific Terms of 18
U.S.C. § 1956, Encouraging Broad,
Unintended, and Unfair
Applications of the Statute.

As Petitioners brief demonstrates, the
principal federal money laundering statute, 18
U.S.C. § 1956, and in particular its “conceal or
disguise” prong,‘ have been interpreted more broadly
than Congress intended. See Pet’r Br. 28-32.

4 A defendant may be convicted under § 1956(a\1) or (a)(2) if it
is shown, inter alia, that the defendant knew the transaction,
(a)(1), or the international transportation, (a)(2), was “designed
in whole or in part—to conceal or disguise the nature, the

“Conceal or Disguise.” Many courts—
including the Fifth Circuit in the decision below—
have adopted extraordinarily expansive
constructions of the phrase “conceal or disguise,”
interpreting it to encompass the mere hiding of
funds.

For example, the Second Circuit recently
upheld the money laundering conviction of the owner
of an armored-car business for transportation of
cash, without evidence that the cash transportation
was designed to give the appearance of legitimate
wealth. United States v. Ness, 466 F.3d 79, 81 (2d
Cir. 2006), petition for cert. filed, June 1, 2007 (No.
. 06-1604); see also United States v. Elso, 422 F.3d
1305 (11th Cir. 2005) (attorney’s placement of
client’s illicitly-obtained cash into personal briefcase,
which: he attempted to transport by car to his law
office, satisfied concealment prong); United States v.
Hurtado, 38 F. App’x. 661 (2d Cir. 2002) (facts
indicating only that money being transported into
the United States was hidden in luggage bags,
without evidence that the transportation was meant
to make the money appear legitimate, sufficed to
show a violation of § 1956). Some courts also have
found the “conceal” element satisfied when the
defendant has done no more than commingle the
proceeds of lawful and unlawful activity in a single
bank account. See United States v. Posters ‘N’

location, the source, the ownership, or the control of the
proceeds of specified unlawful activity.” See also
§1956(a)(3)B).

8

Things Ltd., 969 F.2d 652, 661 (8th Cir. 1992),
(deposit by “head shop” owner of shop proceeds into
_ business account), affd on other grounds, 511 US.
513 (1994); United States v. Sutera, 933 F.2d 641,
648 (8th Cir. 1991) (deposit of gambling proceeds
into family business account bearing defendant’s
name); see also United States v. Shepard, 396 F.3d
1116, 1121 (10th Cir.) (“[Dlepositing illegal proceeds
into the bank account of a legitimate business may
support the inference of an intent to conceal.”), cert.
denied, 545 U.S. 1110 (2005).

“Financial Transaction.” The breadth with
which some courts have construed the term “conceal”
is illustrative of a larger trend among the federal
courts to interpret provisions in § 1956 in an
expansive fashion. For example, to be convicted
under § 1956(a)(1), a defendant must have conducted
a “financial transaction,” which § 1956(c)(4) defines
as “a transaction which in any way or degree affects
interstate or foreign commerce” involving, inter alia,
“the movement of funds by wire or other means.”
Some courts have construed the phrase “or other
means” to be virtually unlimited. See, e.g., United
States v. Reed, 77 F.3d 139, 143 (6th Cir. 1996)
(delivery of money to courier “involved the
movement of funds by wire or other means”
(alteration and quotation omitted); United States v.
Wydermyer, 51 F.3d 319, 326-27 (2d Cir. 1995)
(“physical transportation of money out of the United
States by hand” is a financial transaction by “other
means”); United States v. Dimeck, 24 F.3d 1239,
1246 (10th Cir. 1994) (noting that physical delivery
of cash is “movement of funds by wire or other
means” (emphasis and quotations omitted).

~=

9

According to one commentator, such interpretations
have “the potential to extend the reach of the money
laundering statute to any movement of property and
greatly expand its scope.” 1 John K. Villa, Banking
Crimes § 8:10 at 8-33 (2007). Another commentator
expressed a similar concern:

The continuing trend toward widening
what is meant by financial transaction
gives prosecutors ever more leeway in
deciding when to use § 1956, because
the occurrence of some kind of
financial transaction is what triggers
liability under the statute. In short,
the pattern is that interpretations
have become more draconian over
time.

Cuellar, supra, at 348.

“Proceeds.” As an additional element of a
money laundering offense, § 1956(a)(1) requires
proof that the defendant knew the property involved
in the financial transaction was the proceeds of
specified unlawful activity. Although the statute
does not define this term, some courts have
interpreted it broadly. See United States v. Haun, 90
F.3d 1096, 1101 (6th Cir. 1996) (defining “[p]roceeds”
as “what is produced by or derived from something
(as a sale, investment, levy, business) by way of total
revenue.” (quotations omitted)). Contrary to the
plain language of the statute, “proceeds” has even
been held to include worthless items. See United
States v. Akintobi, 159 F.3d 401, 403—04 (9th Cir.
1998) (holding that, although the term “may refer to

10

something of value,” it “has the broader meaning of
that which is obtained . . . by any transaction,” and
therefore included checks that “ultimately proved
worthless because the accounts backing them up
were either empty or closed” (quotations omitted));
see also United States v. Estacio, 64 F.3d 477, 480
(9th Cir. 1995), as amended on denial of reh’g (noting
that courts “define the term broadly,” and holding
that “proceeds” included a “fraudulently obtained
line of credit, which results in an artificially inflated
bank balance”).

Some circuits also have interpreted “proceeds”
to include gross receipts of the specified criminal
activity rather than only the net income of that
activity; consequently, they construe the statute
broadly to prohibit reinvestment of gross receipts as
expenses of the criminal enterprise. See United
States v. lacaboni, 363 F.3d 1, 4 (1st Cir.), cert.
denied, 543 U.S. 978 (2004); United States v. Grasso,
381 F.3d 160, 169 (3d Cir. 2004), vacated and rev'd
on other grounds, 544 U.S. 945 (2005), reinstated in
relevant part, Nos. 03-1441 & 03-1442 (May 20,
2005). But see Santos v. United States, 461 F.3d 886,
893-94 (7th Cir. 2006). The Court recently granted
certiorari to resolve the circuit split on this issue in
United States v. Santos, No. 06-1005 (cert. granted
Apr. 23, 2007), which was argued on October 3,
2007.5

5 The oral argument in Santos included the following exchange:

Justice Alito: “Mr. Roberts, isn’t it true that
the problems that are being highlighted are
problems that result from expansive
interpretations of other concepts that are not

11

“Willful Blindness.” Additionally, Circuits
have interpreted § 1956 as allowing for conviction
premised on “willful blindness” to the specified
illegal activity. See United States v. Flores, 454 F.3d
149, 155-56 (3d Cir. 2006) (holding willful blindness
sufficient for conviction); United States v. Epstein,
426 F.3d 431, 440 (1st Cir. 2005) (same). But cf.
United States v. Sayakhom, 186 F.3d 928, 943 n.8
(9th Cir. 1999) (explaining that prosecution must
prove more than the defendant “should have
known”). See generally Tracy Tucker Mann, Money
Laundering: Twenty-Second Survey of White Collar
Crime, 44 Am. Crim. L. Rev. 769, 777-78 (2007)
(collecting cases). This despite the statute’s plain
language requiring actual knowledge of illegality.
E.g., 18 U.S:C. § 1956(a) (““Whoever, knowing that
the property involved in a financial transaction
represents the proceeds of some form of unlawful
activity ....” (emphasis added)); see Mann, supra, at
777 (“Sections 1956 and 1957 require actual
knowledge, which is a more stringent standard than

before us here, expansive interpretation of
promotion, expansive interpretation of
concealment? The Seventh Circuit in the first
appeal in this case interpreted promotion very
broadly. And then, I guess it felt that it had
boxed itself in and that’s what led to this
interpretation of proceeds. But if you
interpret those other concepts more narrowly,
you don’t have the same kind of overlap.” Mr.
Roberts: “I agree with that, Your Honor.”

Transcript of Oral Argument at 7-8, United States v. Santos
(U.S. Oct. 3, 2007) (No. 06-1005).

12

‘should have known’ or ‘reckless disregard.’
However, some courts have weakened this
requirement ... .” (footnote omitted)).

Through such expansive interpretations of
terms that otherwise would appear to limit
application of the statute,* many courts now punish
as “money laundering” conduct that bears virtually
no relation to that concept as it is commonly
understood. See United States v. Skinner, 946 F.2d
176 (2d Cir. 1991) (sale of cocaine sufficient for
conviction under the money laundering statute).
“(T]he fluidity of the judicial understanding of these
concepts means that defenses based on grammar and
logic seem . . . doomed to failure.” Mary McNamara,
Edward W. Swanson, & Alexis Haller, Money
Laundering: How Prosecutors Clean up Under 18
U.S.C. Sections 1956 and 1957, 26 Forum 61 (1999),
available at http://www.smhlegal.com/articles/
money%20laund.pdf (last visited Dec. 13, 2007).
These interpretations raise serious concerns that the
power of prosecutors to bring a defendant’s conduct
within the statute has been unfairly and improperly
expanded. “Distinctions in the details of §§ 1956 and
1957 should not obscure the prevailing pattern in

6 See also United States v. Valuck, 286 F.3d 221, 226 (5th Cir.
2002) (announcing that the Fifth Circuit “subscribes to a broad
interpretation of the word ‘promote’ within the context of
section 1956”); United States v. Leslie, 103 F.3d 1093, 1100 (2d
Cir. 1997) (concluding that United States v. Lopez, 514 U.S. 549
(1995), “did not elevate the government’s burden under the
money laundering statute,” and that “[t}he government need
only prove that the individual subject transaction has, at least,
a de minimis effect on interstate commerce”).

13

the way courts parse the statutes’ abstruse terms:
with just occasional exceptions, over time the
statutes’ interpretation has tended to favor
prosecutors.” Cuellar, supra, at 343.7

Interpreting “conceal or disguise” consistent
with the statutory language and intent would not
solve all of these issues, but it would be a step in the
right direction of restoring the money laundering
statutory scheme to its intended scope.

C. Expansive Interpretations of § 1956
Have Significant Negative
Ramifications for the Criminal
Justice System.

These concerns are not merely abstract. An
overbroad reading of the principal federal money
laundering statute has severe consequences for the
many criminal defendants accused of violating it,
and for the criminal justice system as a whole.®

7 Compounding the problem, the United States Attorneys’
Manual imposes limited obligations on prosecutors to notify the
Department of Justice before pursuing money laundering
charges, “in sharp contrast to even the broadly interpreted and
applied RICO statutes which require authorization prior to
prosecution under any circumstances.” Teresa E. Adams,
Notes & Comments, 7 1cking on Money Laundering Charges to
White Collar Crimes: What Did Congress Intend, and What Are
the Courts Doing?, 17 Ga. St. U. L. Rev. 531, 569 (2000) (citing
U.S. Attorneys’ Manual §%§ 9-105.310-.330, 9-110.101).

8 In the most recent year for which statistics are available,
nearly one thousand defendants were convicted under § 1956—
62% of all defendants convicted of money-laundering related
crimes in the federal system. See 2007 National Money
Laundering Strategy 94 tbl. 16 (App. B), available at

14

Section 1956 comes with harsh penalties: a
statutory maximum of up to twenty years’
imprisonment and a fine of either $500,000 or twice
the value of the property involved in the transaction,
whichever is greater. Additionally, although the
Sentencing Guidelines were amended in 2001 in an
effort to “tie[ ] offense levels for money laundering
more closely to the underlying conduct,” U.S.
Sentencing Guidelines Manual app. C, amend. 634,
reason for amend., Vol. II at 781 (2006), even today
money laundering charges can result in a sentence
far greater than that for the predicate offense alone
when the predicate offense is not a drug trafficking
crime. Villa, § 11:30 (Supp. 2006); see also Cuellar,
supra, at 348-49 (2001 Sentencing Guidelines
amendments left sentences for money laundering
“severe enough that prosecutors and investigators
could use money laundering charges as substitutes
for underlying predicate offense charges that might
be more difficult to prove against particular
defendants”).9 Conviction under § 1956
automatically adds two offense levels to the base
level offense applicable to the underlying offense,

http://www.treas.gov/press/releases/docs/nmls.pdf (last visited
Dec. 13, 2007) (citing Dep't of Justice Office of Policy and
Legislation, Crim. Div. (FY 2004)).

° As explained below, even though Petitioner Cuellar’s
predicate conduct was drug-related, had he been convicted
under the bulk money smuggling statute, 31 U.S.C. § 5332
(under which he was not even charged, see United States v.
Cuellar, 478 F.3d 282, 300 n.10 (5th Cir. 2007) (en banc)
(Smith, J., dissenting))}—the charge most directly applicable to
his conduct—he would have faced a statutory maximum one-
fourth that of § 1956.

15

even if no other sentencing enhancements apply.
U.S.S.G. § 2S1.1(b)(2)(B).

In white-collar criminal cases, in particular,
the prospect of higher sentences allows prosecutors
to extract plea bargains and forfeitures that might
not otherwise be forthcoming and that may well not
be in the interest of justice. See Eric. J. Gouvin, Are
There Any Checks and Balances on the Government's
Power to Check Our Balances? The Fate of Financial
Privacy in the War on Terrorism, 14 Temp. Pol. &
Civ. Rts. L. Rev. 517, 534~—35 (2005) (noting, in tne
context of anti-money laundering provisions in the
USA PATRIOT Act, that “prosecutors have used
money laundering violations as a device to leverage
up the criminal consequences for regulated behavior,
creating incentives for the accused to plea bargain”).
Because an indictment with a § 1956 charge risks a
heavier sentence than does an indictment (for the
same conduct) without such a: charge, prosecutors
have a great incentive to use it as a bargaining chip
in pretrial conferences. The mere threat of a money
laundering charge thus can be a powerful weapon in
the prosecutor’s negotiating arsenal.

This vast increase in potential punishment is
entirely unjustifiable if it is not accompanied by
greater culpability on the part of the accused—and,
specifically, by the culpability that Congress meant
to punish when it enacted the statute in the first
place (i.e., “traditional” money laundering). Instead,
prosecutors and courts have interpreted § 1956 to
embrace conduct—as here, “concealment” in an
automobile—that comes nowhere close to presenting
the dangers to society that the money laundering

16

statute was designed to address. Defendants,
including Petitioner here, should not face enhanced
potential sentences for conduct not meaningfully
more blameworthy than the underlying predicate
offenses.

The continued broad and improper application
of § 1956 has real-world consequences for defendants
convicted under it, as well as for defendants
threatened with money laundering charges. The
Fifth Circuit’s expansion of § 1956 in this case, if
affirmed, would further increase prosecutorial power
at the expense of fairness.

ll. MANY DEFENDANTS WHO SUFFER
OVERBROAD APPLICATION OF § 1956
WOULD BE SUBJECT TO
PROSECUTION UNDER OTHER
CRIMINAL STATUTES IN ANY EVENT.

If this Court reversed the Fifth Circuit’s
decision, it would not deprive the government of the
means to punish international financial crimes. On
the contrary, given the numerous other money
laundering statutes, cash reporting statutes, and
anti-smuggling statutes, “there is already no

10 In addition to §§ 1956 and 1957, these include 18 U.S.C. §
1960 (prohibition of illegal money transmitting businesses); 18
U.S.C. § 982 (criminal forfeiture after conviction under, inter
alia, §§ 1956, 1957, 1960); 31 U.S.C. § 5313 (reports on
domestic coin and currency transactions); 31 U.S.C. § 5316
(reports on exporting and importing monetary instruments); 31
U.S.C. § 5317 (search and forfeiture of monetary instruments);
31 U.S.C. § 5324 (structuring transactions to evade reporting

17

shortage of in terrorem tools at prosecutors’
disposal.” Blakely v. Washington, 542 U.S. 296, 311
(2004).

Petitioner’s case is illustrative. As the dissent
in the Fifth Circuit pointed out, and as Petitioner
himself has conceded, Cuellar’s conduct is squarely
captured by the bulk cash smuggling statute, 31
U.S.C. § 5332, because he intended to transport cash
in excess of $10,000 across an international border
without reporting it. See United States v. Cuellar,
478 F.3d 282, 299-300 (5th Cir. 2007) (en banc)
(Smith, J., dissenting) (explaining that the
legislative history of § 5332 demonstrates that
Congress did not intend § 1956 to capture conduct
such as petitioner Cuellar’s). If charged under §
5332, Cuellar would have faced a_ statutory
maximum of five years in prison. Instead, having
been accused and convicted of “money laundering,”
Cuellar was exposed to a twenty-year statutory
maximum sentence under § 1956."

* * *

- Amicus does not dispute the need for an anti-
money laundering strategy, or for an anti-money
laundering statutory scheme. Rather, Amicus
contends that the breadth of § 1956, as interpreted

requirement prohibited); 31 U.S.C. § 5332 (bulk cash smuggling
into or out of the United States).

11 Petitioner was sentenced to a term of seventy-eight months,
with supervised release of three years immediately following.
JA. 4.

18

by the Fifth Circuit, does not conform to the
language of the statute or to Congress’s intent and
leads to unintended and unfair results. This Court
should therefore reverse the judgment below.

CONCLUSION

For the foregoing reasons, amicus curiae
National Association of Criminal Defense Lawyers
supports Petitioner Cuellar’s request that this Court
reverse the judgment of the Fifth Circuit.

19

Respectfully submitted,
JEFFREY T. GREEN CRAIG D. SINGER
SIDLEY AUSTIN LLP (Counsel of Record)
1501 K Street, NW JOHN E. CLABBY
Washington, DC 20005 CHRISTOPHER R. HART
(202) 736-8000 DAVID A. TAYLOR
WILLIAMS & CONNOLLY
LLP

725 Twelfth Street, NW
Washington, DC 20005
(202) 434-5000

Attorneys for Amicus Curiae
National Association of Criminal Defense Lawyers.

December 14, 2007

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385016_0537%3A10. Public record. Not legal advice.