Cuellar v. United States - Brief (Merits)

Docket number: 
No. 06-1456
Supreme Court Term: 
2007 Term
Court Level: 
Supreme Court


No. 06-1456

 

In the Supreme Court of the United States

HUMBERTO FIDEL REGALADO CUELLAR, PETITIONER

v.

UNITED STATES OF AMERICA

ON WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT

BRIEF FOR THE UNITED STATES

PAUL D. CLEMENT
Solicitor General
Counsel of Record
ALICE S. FISHER
Assistant Attorney General
MICHAEL R. DREEBEN
Deputy Solicitor General
LISA H. SCHERTLER
Assistant to the Solicitor
General
JOEL M. GERSHOWITZ
Attorney
Department of Justice
Washington, D.C. 20530-0001
(202) 514-2217

QUESTION PRESENTED

Whether petitioner's attempt to transport more than $80,000 in drug proceeds, hidden in a secret compart ment of a car, from the United States to Mexico suf ficiently established that the transportation was "de signed," in whole or in part, to "conceal or disguise" the nature, location, source, ownership, or control of those illegal proceeds within the meaning of 18 U.S.C. 1956(a)(2)(B)(i), absent proof that the transportation was designed to create the appearance of legitimate wealth.

In the Supreme Court of the United States

No. 06-1456

HUMBERTO FIDEL REGALADO CUELLAR, PETITIONER

v.

UNITED STATES OF AMERICA

ON WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT

BRIEF FOR THE UNITED STATES

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. 1a-44a) is reported at 478 F.3d 282. A previous, now-vacated opinion of the court of appeals (Pet. App. 45a-56a) is reported at 441 F.3d 329.

JURISDICTION

The judgment of the court of appeals was entered on February 2, 2007. The petition for a writ of certiorari was filed on May 3, 2007. The petition for a writ of cer tiorari was granted on October 15, 2007. The jurisdic tion of this Court rests on 28 U.S.C. 1254(1).

STATUTORY PROVISIONS INVOLVED

The relevant statutory provisions are set forth in an appendix to this brief. App., infra, 1a-19a.

STATEMENT

After a jury trial, petitioner was convicted of at tempting to transport the proceeds of drug trafficking from the United States to Mexico with knowledge that the funds were derived from crime and that the trans portation was "designed in whole or in part * * * to conceal or disguise the nature, the location, the source, the ownership, or the control" of the proceeds, in viola tion of 18 U.S.C. 1956(a)(2)(B)(i). A divided panel of the court of appeals reversed petitioner's conviction, holding that the government failed to prove that his transporta tion was designed to create the appearance of legitimate wealth. Pet. App. 51a-53a. On rehearing, the en banc court affirmed petitioner's conviction, rejecting peti tioner's contention that the statute requires proof of conduct that creates the appearance of legitimate wealth and holding that the evidence proved every element of the offense. Id. at 11a-12a. This Court granted certio rari.

1. Section 1956(a)(2)(B)(i) of Title 18 makes it a crime, punishable by up to 20 years' imprisonment, to

transport[], transmit[], or transfer[], or attempt[] to transport, transmit, or transfer a monetary instru ment or funds from a place in the United States to or through a place outside the United States or to a place in the United States from or through a place outside the United States-

* * * * *

(B) knowing that the monetary instrument or funds involved in the transportation, transmis sion, or transfer represent the proceeds of some form of unlawful activity and knowing that such transportation, transmission, or transfer is de signed in whole or in part-

(i) to conceal or disguise the nature, the loca tion, the source, the ownership, or the control of the proceeds of specified unlawful activity[.]

18 U.S.C. 1956(a)(2)(B)(i). Section 1956(c)(7)(A) defines "specified unlawful activity" to include the racketeering crimes enumerated in 18 U.S.C. 1961(1), which in turn include state and federal drug trafficking offenses. See 18 U.S.C. 1961(1)(A) and (D) (Supp. V 2005).

2. The government's evidence at trial showed that on the evening of July 14, 2004, petitioner was traveling south toward Mexico in a Volkswagen Beetle on United States Route 277. Route 277 ends at Del Rio, Texas, which is across the border from Acuna, Mexico. Deputy Kevin Herbert noticed that petitioner's car was travel ing only 40 miles per hour in a 70 mile-per-hour zone and also observed the car veer onto the shoulder of the road. Deputy Herbert suspected that the driver might be intoxicated. Deputy Herbert pulled behind peti tioner's car and saw that the car displayed no registra tion or license plate. Deputy Herbert stopped petitioner two miles south of Eldorado, Texas, about 114 miles from the Mexican border. J.A. 13-15; Gov't Supp. C.A. Br. on Reh'g 2.

Petitioner spoke no English. Deputy Herbert tried to determine whether petitioner had a license and insur ance. Petitioner provided a Mexican license and some paperwork from the glove box, but no insurance. On his own, petitioner exited the car and lifted the trunk lid at the front of the car. Nothing was visible in the trunk except the gas tank and spare tire. J.A. 15-17, 20-21, 39.

Trooper Danny Nunez arrived and asked petitioner some questions in Spanish. Petitioner said he had no insurance, and he avoided eye contact and seemed ner vous. Petitioner indicated he had been on a road trip for three days looking for a vehicle. Trooper Nunez noticed a large bulge in petitioner's front pocket and asked what it was; petitioner said it was money. Trooper Nunez asked if he could see the money, and petitioner removed the rolled-up cash from his pocket. Both Trooper Nunez and Deputy Herbert detected the odor of marijuana on the money. Petitioner had $2275 in his wallet and pock et. J.A. 24-25, 27, 36-38, 44, 50-51.

Trooper Nunez obtained petitioner's consent to search the vehicle. The officers found no personal items in the car, but did find bus tickets in petitioner's name that showed that petitioner had traveled a lengthy route through Texas by bus over the previous day and night.1 The officers also looked under the hood and noticed that one of the two clamps on the gas tank of the car was backwards and both clamps had fresh tool marks on them. The fender walls had drill marks and mud was splashed in unusual places on the car, as if it had been applied with an acoustic gun. Trooper Nunez had ob served similar techniques used to cover up work done on a vehicle. Trooper Nunez noticed that the carpet in peti tioner's car appeared newer than the rest of the vehicle's interior. Animal hair was concentrated in the area be hind the back seat. When asked about the animal hair, petitioner said that he had carried goats to Mexico in the car. Trooper Nunez was skeptical, because the hair was concentrated in only one area. J.A. 18, 22, 25, 39-45.

Deputy Jason Chatham arrived with a certified nar- cotics-detection dog. During a search around the vehicle, the dog alerted to the passenger's side door. Inside the car, the dog alerted to the driver's seat and the back seat. The officers put the currency from petitioner's pocket in the glove box. The dog searched the car again five minutes later and alerted to the glove box in addition to the previous locations. J.A. 55-56.

In the small carpeted cargo area behind the back seat, Deputy Chatham noticed two wooden speaker boxes and a concentration of white animal hair. Deputy Chat ham knew that individuals often used animal hair to try to distract drug-detection dogs. Deputy Chatham also noticed two new upholstery tabs holding the carpeting in place and signs of metal welding. Deputy Chatham re moved the tabs, pulled back the carpet, and found that a cut-out square of the floorboard was being held in place by screws. Deputy Chatham shined his flashlight under a corner of the cut-out floorboard and discovered a false compartment that contained seven duct-tape bundles. J.A. 28, 57-59.

The bundles contained more than $80,000 in United States currency of all denominations. Each bundle was wrapped in a plastic bag and duct tape and was marked with a dollar amount that accurately reflected the money inside the bundle. In the glove box, officers discovered a Sharpie marker and a Phillips-head screwdriver that matched the screws that secured the hidden compart ment. J.A. 29-31.

Petitioner was arrested. At the police station, peti tioner asked to call his family in Mexico and said that if "the vehicle wasn't in Mexico by midnight, * * * his family would be floating down the river." During ques tioning, petitioner said he had picked up the Volkswagen in a Walmart parking lot and received money from a man he did not know to drive the car to Mexico. At trial, peti tioner testified that he previously owned the car, had sold it to a "Mr. Morcia," and was driving the car to Mex ico for repairs. J.A. 49-50; Gov't Supp. C.A. Br. on Reh'g 8-10.

An expert in drug trafficking organizations explained that the largest problem of any drug organization is "what to do with their cash." Cash sales of drugs gener ate a "huge * * * amount of paper," and drug organiza tions cannot deposit currency in the bank without "doing some paperwork that they don't want to do." Drug orga nizations, the expert explained, therefore hire drivers to take the money "in secret back down to Mexico," often using hidden compartments in cars. The money is usu ally packaged in cellophane or duct tape so that it is easy to handle and the amount is known. Materials such as plastic and duct tape also can contain the scent of mari juana, which will "permeate" money that has been stored with the drugs. The expert explained that a driver often does not load the car, see the car loaded, or "know any thing more than what he needs to drive that money into Mexico," which limits the information he can provide if he is stopped by law enforcement. The drivers generally do know that they are transporting drugs or money, and the vehicle often is registered to the driver to negate suspicion in the event of a traffic stop. The expert testi fied that the Mexican economy is largely cash-based and that American dollars are widely accepted in the border towns. J.A. 63-71.

3. The jury found petitioner guilty of violating 18 U.S.C. 1956(a)(2)(B)(i). The district court sentenced him to 78 months of imprisonment, to be followed by three years of supervised release. J.A. 2-4.

4. A divided panel of the court of appeals reversed petitioner's conviction. Pet. App. 45a-56a. The majority concluded that the government had proved beyond a rea sonable doubt that the cash secreted in petitioner's car was illegal drug proceeds, that petitioner knew it was illegal drug proceeds, and that petitioner was attempting to transport the money to Mexico. Id. at 49a. But the majority held that the government failed to show that petitioner's transportation of the money "was designed in whole or in part to conceal or disguise its nature, loca tion, source, ownership or control." Id. at 49a-50a. The majority noted that petitioner "was not trying to create the appearance of legitimate wealth by smuggling drug money across the border." Id. at 52a (internal quotation marks and citation omitted). In the majority's view, "[t]aking hidden cash to Mexico is not money laundering unless some further design to conceal can be proved. The statute would prohibit taking drug money to Mexico for the purpose of concealing the fact that it is drug money. The statute does not outlaw concealing drug money from the police for the purpose of taking it to Mexico." Id. at 51a.

In a dissent, Judge Davis concluded that the govern ment's proof that "the defendant knowingly concealed the [drug proceeds] in the vehicle and intended to deliver the funds to Mexico" established the concealment ele ment of money laundering. Pet. App. 53a.

5. The court of appeals granted the government's petition for rehearing en banc and affirmed petitioner's conviction. Pet. App. 1a-44a. The court concluded that "[o]n several bases, * * * the government adequately established the concealment prong of the statute, i.e.[,] that [petitioner's] transportation of the funds was de signed, in whole or in part, to conceal or disguise the na ture, location, source, ownership or control of the pro ceeds." Id. at 10a-11a. The court held, first, that the evidence established that the transportation of the drug proceeds "was designed to conceal the nature of the pro ceeds." Id. at 11a. The court noted that the odor of the proceeds "associated [them] with illicit drug activity" and that "aspects of the transportation"-particularly the manner in which the money was wrapped and concealed for transport and the use of animal hair to distract drug detection dogs-"were designed to conceal or disguise the nature of the cash as drug proceeds." Ibid. The court held that those same facts also supported the con clusion that "the transportation was designed to conceal the location of the cash." Ibid.

Second, the court held that the evidence demon strated that "the transportation was designed to conceal or disguise the source, ownership or control of the cash." Pet. App. 11a. The court noted that petitioner had little information about the owner of the cash and that the "transportation plan allowed the owner to put the cash in the hands of an intermediary or third party, which made it difficult for authorities to determine who actually owned or controlled the cash." Ibid. That conclusion, the court explained, was further supported by the expert testimony concerning drug dealers' practice of "insu- lat[ing] themselves" from couriers and others in the drug organization "to avoid revealing their identity." Id. at 11a-12a.

The en banc majority rejected petitioner's contention that the money laundering statute "requires proof that the defendant's acts created the appearance of legitimate wealth or converted dirty money into clean." Pet. App. 12a. The court reasoned that "creating the appearance of legitimate wealth is one way of concealing illicit funds, [but] it is not the only way concealment can be estab lished." Ibid. The court observed that "Congress chose the broad, unqualified word 'conceal'" and that "[i]t makes no sense to say that Congress only intended to prohibit concealment that is accomplished in a certain way." Ibid.

Three judges dissented. Pet. App. 22a-44a. The dis sent distinguished between "concealing money to trans port it, and transporting money to conceal its location" and concluded that only the latter conduct is encom passed by the "definition of money laundering, which is to make dirty money difficult to trace by concealing its illegality." Id. at 27a. In the dissent's view, the govern ment failed to satisfy the concealment element because it did not prove "what [petitioner] planned to do with the money once he reached his destination" and did not es tablish "a design to create the appearance of legitimate wealth." Id. at 25a, 38a.

SUMMARY OF ARGUMENT

The money laundering statute prohibits, among other things, the cross-border transportation of illegal pro ceeds when that transportation is "designed to conceal or disguise" any one of five attributes of the proceeds- their nature, location, source, ownership, or control. The statute does not limit the "concealment or disguise" ele ment to any one means or method, nor does it require proof of a design to create an "appearance of legitimate wealth," words that appear nowhere in the statute's text. Petitioner's conduct fell squarely within the terms of the statute as written, and his conviction should be affirmed.

A. The money laundering statute contains clearly defined elements prohibiting the transportation or at tempted transportation of certain criminally derived pro ceeds when the defendant has knowledge of two things: that the funds are proceeds of some unlawful activity and that the transportation is designed to conceal or disguise one of the five listed attributes of the proceeds. Peti tioner's argument that the transportation must be de signed to produce an "appearance of legitimate wealth" would engraft language onto the statute that Congress did not write. That phrase is not in the statute and can not be inferred from the statutory terms. The title of the statute- "Laundering of monetary instruments"-can not limit the plain meaning of the text. Indeed, it is in disputable that the operative provisions of the money laundering statute prohibit some conduct that is not "tra ditional" money laundering as petitioner would define it. Even if the title of the statute had relevance, it could not be read to limit the scope of only some of the provisions within it.

B. The legislative history of the money laundering statute reinforces the conclusion that the statute con tains no "appearance of legitimate wealth" limitation. That history demonstrates that Congress did not view "money laundering" as being limited to a "traditional" or "classic" form of the offense. Congress viewed "money laundering" as encompassing many methods and motives for concealing or disguising the proceeds of crime, in cluding the surreptitious transportation of illegal pro ceeds across the United States border. Congress was concerned with a variety of means of disguising or con cealing illegitimate funds. Disguising illegitimate funds as legitimate wealth is just one means to that end, and there is no reason to think that Congress intended to address only that one means. To the contrary, Congress enacted the money laundering statute to criminalize a spectrum of conduct that impairs the ability of law en forcement to find and recover the illegal proceeds of cer tain crimes. Petitioner's conduct falls squarely within that spectrum.

C. The bulk cash smuggling statute, 31 U.S.C. 5332 (Supp. V 2005), does not support the argument that money laundering requires an "appearance of legitimate wealth." The bulk cash smuggling statute covers a dis tinct and less culpable category of conduct and extends to large sums of cash that are wholly legitimate. Bulk cash smuggling requires proof that a defendant con cealed more than $10,000 during a border crossing and intended to evade a currency reporting requirement. It does not purport to deal with cases where the govern ment can show that the proceeds were illegal and the defendant knew that fact. When a defendant surrepti- tiously transports or attempts to transport illegal pro ceeds across the border knowing of their illegal charac ter, money laundering is the appropriate charge.

D. The rule of lenity has no applicability to this case. The text of the money laundering statute "does not dem onstrate ambiguity. It demonstrates breadth." Sedima, SPRL v. Imrex Co., 473 U.S. 479, 499 (1985) (internal quotation marks and citation omitted). Nor is there any reason to believe that the statute poses any danger of criminalizing apparently innocent conduct. The require ment that a defendant know that he is concealing or dis guising criminally derived proceeds ensures that no blameless conduct is even possibly reached by the stat ute.

E. Petitioner's conduct fell squarely within the cover age of the money laundering statute. Petitioner at tempted to transport more than $80,000 in drug traffick ing proceeds to Mexico in a secret compartment of a car, knowing of the illegal origins of the funds. The evidence established that petitioner's transportation of the illegal proceeds was designed, at least in part, to conceal or dis guise the "location" and "nature" of the funds by moving them to Mexico without detection by law enforcement. The evidence also established that the transportation of the funds was designed, at least in part, to conceal or disguise the "source," "ownership," and "control" of the proceeds by shielding the identity of the party for whom petitioner transported the funds.

ARGUMENT

PETITIONER'S ATTEMPTED CROSS-BORDER TRANSPOR TATION OF ILLEGAL PROCEEDS VIOLATES THE FED ERAL MONEY LAUNDERING STATUTE, REGARDLESS OF WHETHER IT WAS DESIGNED TO CREATE AN APPEAR ANCE OF LEGITIMATE WEALTH

The money laundering statute under which petitioner was charged is clearly written to reach the conduct in which petitioner engaged, i.e., seeking to transport ille gal proceeds out of the United States knowing of their illegal character and knowing of the design of the trans portation to hide the funds themselves, their illegal ori gins, their ownership, and their control. Petitioner ar gues that "concealment" money laundering encompasses only conduct that "creates the appearance of legitimate wealth." That phrase, however, does not appear in the statute, and none of petitioner's arguments justifies im porting such an extra-textual limitation. See Lamie v. United States Tr., 540 U.S. 526, 538 (2004) (courts should not "read * * * absent word[s] into [a] statute"). Be cause a jury could reasonably find that petitioner's at tempted transportation to Mexico of drug proceeds hid den in a secret compartment of a car was designed to conceal or disguise at least one of the characteristics of the funds listed in the statute, the judgment should be affirmed.

A. The Text Of The Statute Does Not Require A Design To Create The Appearance Of Legitimate Wealth

Petitioner and amicus principally argue (Br. 11; Na tional Association of Criminal Defense Lawyers Amicus Br. in Support of Pet. 2) that "only concealment that cre ates the appearance of legitimate wealth" is covered by 18 U.S.C. 1956 (2000 & Supp. V 2005) and that, therefore, the "[m]ere[] hiding" of drug proceeds while crossing the United States border is not money laundering. That argument is contrary to the statutory text and relies on an incomplete reading of the legislative history. While "traditional" money laundering-complex financial transactions intended to make illegal money look legiti mate-was a central concern of Congress in enacting Section 1956, it was not Congress's sole concern. The statute explicitly covers, and was intended to cover, a wide range of conduct that impairs the ability of law en forcement to find and recover the proceeds of crime.

1. Section 1956(a) prohibits, among other things, transactions in or the cross-border transportation of the proceeds of certain crimes (that is, the proceeds of "spec ified unlawful activity," including drug trafficking) if the transaction or transportation "is designed in whole or in part * * * to conceal or disguise the nature, the loca tion, the source, the ownership, or the control of" the funds. 18 U.S.C. 1956(a)(2)(B)(i). A violation occurs when a transaction or cross-border transportation is de signed either to conceal "or" to disguise any one of the listed attributes of illegal proceeds. The phrase "in whole or in part" indicates that the "concealment" or "disguising" of a listed attribute need not be the sole design of the transaction or cross-border transportation. The government must prove that the defendant knew that the proceeds were derived from crime (although the defendant need not know that the underlying crime was "specified unlawful activity") and that the transaction or transportation was designed to conceal or disguise the proceeds in the relevant sense.

Congress did not define the phrase "designed in whole or in part * * * to conceal or disguise," although it did define some other statutory terms. See 18 U.S.C. 1956(c) (2000 & Supp. V 2005). When not otherwise de fined, "statutory terms are generally interpreted in ac cordance with their ordinary meaning." BP Am. Prod. Co. v. Burton, 127 S. Ct. 638, 643 (2006). The ordinary and primary meaning of the verb "design" is "to conceive and plan out in the mind." Webster's Third New Interna tional Dictionary of the English Language Unabridged 611 (1993) (Webster's Third). See Webster's New Inter national Dictionary Second Edition Unabridged 707 (1958) (Webster's Second) ("To plan mentally."); The American Heritage Dictionary of the English Language 506 (3d ed. 1992) (American Heritage) ("to conceive or fashion in the mind; invent"). "Conceal" ordinarily means: "to hide; withdraw or remove from observation; cover or keep from sight." The Random House Dictio nary of the English Language Unabridged 422 (2d ed. 1987). See Webster's Third 469 ("To place out of sight: withdraw from being observed: shield from vision or no tice."); Webster's Second 551 ("To hide or withdraw from observation."); The Oxford Dictionary of the English Language 646 (2d ed. 1989) ("To keep from the knowl edge or observation of others, refrain from disclosing or divulging, keep close or secret."). "Disguise" has as its primary meaning: to "change the customary dress or appearance of: furnish with a false appearance or an assumed identity." Webster's Third 649; accord Web ster's Second 747.

2. Petitioner argues that an "appearance of legiti mate wealth" requirement is implicit in the "conceal or disguise" provisions of 18 U.S.C. 1956(a). Petitioner rea sons that the "attributes" of illegal proceeds listed in those provisions are ones "that would reveal [the pro ceeds] to be illicit." Pet. Br. 20-21. Therefore, petitioner concludes, any conduct that "conceal[s]" or "disguis[es]" any of those attributes "will necessarily have the effect of making the funds appear to be legitimate." Id. at 21. That argument is unsound.

In the first place, the object of money laundering is accomplished by concealing or disguising the illegitimate nature of illegal proceeds. While the classic way to con ceal or disguise such illegitimate funds is to make "the funds appear to be legitimate," it is not the only way. An equally effective way to "disguise" illegitimate funds is to get them out of the country altogether, in which case they will not betray the illicit nature of an unlawful en terprise. "Concealing" those funds by moving them abroad has the same effect. Section 1956(a) expressly covers this stratagem for concealing or disguising illegit imate funds.

Moreover, petitioner is not correct when he contends that each of the "attributes" of illegal proceeds listed in the statute, if exposed, "would reveal" the illegitimacy of the funds. Merely revealing the "location" of funds in a bank account, a safe deposit box, or in the Cayman Is lands, for instance, need not also reveal that the funds are criminally derived. Likewise, revealing the "owner ship" or "control" of funds need not expose their illegiti macy. Individuals engaged in crime can have legally- derived assets also. The same is true with respect to the "source" of proceeds: revealing from whom the proceeds came would not necessarily reveal their illegal character. Only revelation of the "nature" of the funds would neces sarily disclose their origins in illegal activity. If Con gress intended to limit the statute to the concealment or disguising of attributes that "would reveal [illegal pro ceeds] to be illicit," it would have stopped with "nature." Pet. Br. 21-22.

Petitioner also is incorrect that any transaction or transportation designed to conceal or disguise one of the listed attributes necessarily will "mak[e] the funds appear to be legitimate." Pet. Br. 21. A transaction or transportation designed to make illicit funds appear le gitimate will necessarily be designed to disguise their "nature." A transaction that disguises another attribute, such as the "source," "ownership," or "control" of illegal proceeds, may make detection less likely without mak- ing the funds appear legitimate at all. A drug kingpin who transfers illegal proceeds to the account of his con federate to obscure his role in the crime has not made the funds appear legitimate, but he has "disguised" his "control" of them.

Moreover, "conceal" and "disguise" are different verbs with distinct meanings. A design to "conceal" an attribute of illegal proceeds listed in the statute need not make the funds appear legitimate. To the contrary, a design to conceal generally makes the funds or an attrib ute of the funds "disappear." Making the funds or an attribute of the funds appear to be something else is more naturally covered by the statutory term "disguise." Thus, transferring illegal proceeds to an offshore account to avoid taxation or forfeiture "conceals" the location and existence of the funds, but it does not transform them into apparently legitimate wealth. To the contrary, it creates the appearance of having no wealth at all.2

3. Petitioner notes (Br. 17) that the President's Com mission on Organized Crime (Commission) defined money laundering as "the process by which one conceals the existence, illegal source, or illegal application of in come, and then disguises that income to make it appear legitimate." President's Comm'n on Organized Crime, The Cash Connection: Organized Crime, Financial In stitutions, and Money Laundering, Interim Report to the President and the Attorney General 7 (1984) (Com mission Interim Report) (emphasis added).3 In the stat ute, however, Congress departed from the language in the Commission's definition in several ways, including through the use of "or" rather than "and" in the "conceal or disguise" provision. This drafting choice is consistent with the overall approach that Congress took to the money laundering statute: while its terms capture what is conventionally understood to be "money laundering," Congress also reached a broader range of conduct in or der to prevent laundering strategies and concealment of funds that would evade a narrower prohibition.

4. Petitioner also argues (Br. 21-23 & n.11) that the "overall structure" of the statute compels the conclusion that the "conceal or disguise" provision is, in fact, an "appearance of legitimate wealth" provision. The argu ment goes: (1) the "conceal or disguise" provision is identically worded in the "financial transaction[]" and the "international transportation" subsections of 18 U.S.C. 1956(a); (2) "the only way" (Pet. Br. 21) a financial trans action can "conceal or disguise" the relevant attributes of illegal proceeds is to make the proceeds appear legiti mate; and (3) therefore, an international transportation cannot "conceal or disguise" within the meaning of the statute unless it too is designed to make illegal proceeds appear legitimate. Petitioner is correct at step one, but his logic fails at steps two and three.

In particular, petitioner is incorrect (Br. 21-22) that a financial transaction can conceal the relevant attributes of illegal proceeds "only" by making the proceeds "ap pear[] to be the product of legitimate commercial activ ity." Although petitioner asserts (Br. 21) that a trans action "is not a tangible opaque thing, like a vault or a wall, that can be employed to hide money or property from prying eyes," the statutory definition of "transac tion" includes "use of a safe deposit box," which is ex actly "like a vault." See 18 U.S.C. 1956(c)(3). The use of a safe deposit box cannot make illegal proceeds appear legitimate or otherwise disguise them. But it can conceal their location, which violates the statute when that is the design of the transaction.4 In 1992, Congress amended Section 1956 to add the use of safe deposit boxes to the statutory definition of "transaction." See Housing and Community Development Act of 1992, Pub. L. No. 102-550, 106 Stat. 3672. That amendment refutes peti tioner's argument that an "appearance of legitimate wealth" requirement is implicit in the statute.

Furthermore, other types of transactions also can be designed to conceal attributes of illegal proceeds without making the launderer's wealth appear legitimate. A de fendant who merely transfers illegal proceeds to his off shore account has concealed the location of the proceeds but has created no appearance that they were earned legitimately. A defendant who uses a fictitious name on that same offshore account has concealed his ownership and control of the funds but has come no closer to creat ing an appearance of legitimate wealth. Like a safe de posit box, bank accounts can indeed "hide money or prop erty from prying eyes," and thus can "conceal" attributes of funds without also disguising the funds as "legitimate wealth." Pet. Br. 21.5 As those examples show, peti- tioner's theory ignores the reality that Congress' concern was with a variety of mechanisms to conceal or disguise illegitimate wealth, and it was not focused exclusively on just one way to do so-viz., making illegitimate wealth look legitimate.

Even if it were true that financial transactions designed to conceal one or more of the relevant attrib utes of illegal proceeds often will result in an "appear ance of legitimate wealth," it does not follow logically that the statute covers only a cross-border transporta tion that has that effect. As petitioner concedes (Br. 23), the context of a phrase matters. A "transportation" of illegal proceeds ordinarily will involve a "carrying" of the funds from one geographical location to another. See, e.g., American Heritage Dictionary of the English Lan guage (4th ed. 2000) (to "transport" means to "carry from one place to another; convey"); Webster's Third 2430 (to "transport" means to "transfer or convey from one person or place to another: carry, move"). Because of its essentially spatial nature, a "transportation" of funds is more likely to be designed to conceal, at a mini mum, the "location" of illegal proceeds and may less of ten be designed to conceal the "nature" or "source" of the proceeds (although those attributes will often be con cealed as well). That result is entirely consistent with the statutory language. Moreover, in the particular con text of trans-border transactions, the need to disguise illegitimate wealth as legitimate wealth is reduced. The very act of getting the funds out of the country signifi cantly reduces the chance that substantial quantities of unexplained cash that would betray the criminal nature of an enterprise will be detected.

Congress focused the international provision of the statute on the "transportation" itself-not, as petitioner urges (Br. 30), on "transactions" that might follow the transportation. It would have made no sense for Con gress to have required the government to establish the uses to which funds might be put in the future after they are secreted abroad. Just as removing illegitimate funds from the country decreases the chance that those funds will be detected by United States authorities, the re moval of the funds makes it more difficult for United States authorities to determine what happens next to the funds. Accordingly, petitioner's proposed requirement would enable money launderers to frustrate enforcement efforts because of the inability of the government to identify the foreign laundering networks who might aid domestic criminals once the funds were successfully exported. Instead of requiring proof of post-transporta tion designs, Congress focused on how the transportation itself was "designed." And Congress underscored that focus by including "location"-a similarly spatial con cept-as one of the attributes of illegal proceeds that may be the object of the prohibited concealment under the statute. Congress further provided that the design to conceal need be shown with respect to only one of the attributes of illegal proceeds for the offense to be estab lished. All of those choices indicate that Congress did not intend to draft a statute that could be violated in only one way that was tied to ultimate efforts to cleanse ille gal funds. Rather, Congress drafted a statute that would comprehensively reach the variety of ways that criminals would seek to dispose of their illegal proceeds, without saddling the government with unduly onerous burdens of proof.

5. Petitioner argues (Br. 14-15) that the title of 18 U.S.C. 1956 (2000 & Supp. V 2005), "Laundering of mon etary instruments," supports his view that the statute covers only conduct that creates the appearance of legiti mate wealth. This Court has repeatedly held that "the title of a statute . . . cannot limit the plain meaning of the text." Pennsylvania Dep't of Corr. v. Yeskey, 524 U.S. 206, 212 (1998) (quoting Brotherhood of R.R. Train men v. Baltimore & Ohio R.R., 331 U.S. 519, 528-529 (1947)). That axiom is particularly relevant to the money laundering statute because "[t]he phrase 'money launder ing' has been used in very different senses" and "Con gress has used it loosely in legislative history, sometimes limiting it to the classic core but also including the cur rency reporting requirements." B. Frederic Williams, Jr. & Frank D. Whitney, Federal Money Laundering: Crimes and Forfeitures 5 (1999).6 See, e.g., 31 U.S.C. 5340(2) (defining "money laundering and related finan cial crime" as "the movement of illicit cash or cash equiv alent proceeds into, out of, or through the United States, or into, out of, or through United States financial institu tions).

Moreover, the same statute includes both "promo tional" money laundering (18 U.S.C. 1956(a)(1)(A)(i))- transactions that plow proceeds back into an illegal enterprise-and the transportation of any funds across the United States border with the intent to promote spe cified unlawful activity (18 U.S.C. 1956(a)(2)(A)). Neith er of those offenses constitutes "traditional" money laun dering under petitioner's definition. There is thus no basis for petitioner's argument that an "appearance of legitimate wealth" requirement should be inferred from the title of the statute.7

B. The Legislative History Does Not Support Petitioner

Because the statutory text defeats petitioner's argu ment that 18 U.S.C. 1956(a) contains an implicit "ap pearance of legitimate wealth" requirement, there is no need to resort to legislative history. See, e.g., Whitfield v. United States, 543 U.S. 209, 215 (2005). If consulted, however, the legislative history does not assist peti tioner. Petitioner's argument for an "appearance of le gitimate wealth" requirement relies heavily on his asser tion that the statute has a single purpose. Petitioner refers to the "specific evil" (Br. 14) addressed by the statute and asserts that "Congress's sole concern was with the ultimate act of sanitizing the proceeds of illegal activity to remove its illicit taint" (id. at 24-25). Peti tioner's suggestion that Congress enacted Section 1956 as a surgical strike on only those defendants who manip ulate illegal proceeds to create the appearance of legiti mate wealth lacks merit. Certainly, "traditional" money laundering and its increasing level of sophistication was a central concern of Congress. "But statutory prohibi tions often go beyond the principal evil to cover reason ably comparable evils, and it is ultimately the provisions of our laws rather than the principal concerns of our leg islators by which we are governed." Oncale v. Sundown er Offshore Servs., Inc., 523 U.S. 75, 79 (1998). See Gon zales v. Oregon, 546 U.S. 243, 288 (2006) (finding "no reason to think" that a statute's "principal concern" is its "exclusive concern") (Scalia, J., dissenting). The leg islative history of 18 U.S.C. 1956 confirms what its text makes clear: Congress's purpose was to address a spec trum of conduct-including but not limited to "tradi tional" money laundering-that impairs the ability of law enforcement to find and recover the proceeds of crime. Indeed, Congress's principal focus could be aptly de scribed as addressing efforts to disguise or conceal ille gitimate funds. Making illegitimate funds appear legiti mate is just one means to that end and making the funds disappear by secreting them out of the jurisdiction works well too-and there is no reason that Congress would have been concerned with only one aspect of the prob lem.

1. As noted, note 3, supra, the initiative to enact criminal federal money laundering legislation to supple ment currency reporting requirements began with the appointment of the Commission. In March 1984, the Commission held a public hearing on money laundering. The Commission's chairman, Irving R. Kaufman (Kauf- man), opened the hearing by outlining a variety of law enforcement challenges the Commission sought to ad dress, which included not only the investment of crimi nal proceeds in the legitimate economy, but also the concealment of funds from taxation and civil forfeiture. President's Comm'n on Organized Crime, Organized Crime and Money Laundering, Record of Hearing II, March 14, 1984, New York, New York 6-7 (1984) (Record of Hearing).8 Kaufman noted that laundering "schemes are conducted in a number of different fashions," includ ing through the "simpl[e] deposit [of] large sums of cash with an off-shore financial institution." Id. at 6.

In its interim report, the Commission made clear that it viewed "laundering" as encompassing a "broad spectrum of techniques." Commission Interim Report 7. "At one end of the spectrum" was the "narcotics traf ficker who wishes merely to increase the immediate por tability of his cash receipts [by] simply exchang[ing] smaller-denomination bills (e.g., one-, five-, and ten-dol lar bills) for larger-denomination bills." Id. at 8. "At the other end of the spectrum" was the "high-level member of a large organization that derives vast sums of money from continuing illegal activities." Ibid. The Commission observed that the more sophisticated crimi nal's laundering techniques could include "the use of courier services or electronic fund transfers, the pro cessing of funds through layers of fictitious entities, and the creation of false documentation to improve the ap pearance of legitimacy." Ibid. The Commission Interim Report also expressed specific concern about the law enforcement challenge presented by the physical trans portation of illegal funds across the southern borders of the United States, providing as one example a "Mr. X" who on one occasion attempted to transport boxes containing $5 million in unreported cash to Panama on his Learjet. Id. at 14-15. Thirty kilograms of cocaine and an Uzi submachine gun were later found in Mr. X's "business office." Ibid.

The Commission prepared a draft of a new criminal offense, which it entitled "Laundering of monetary in struments." Commission Interim Report 67. The Com mission's proposal criminalized participation in any transaction involving monetary instruments in, through, or by a financial institution (1) with the intent to pro mote unlawful activity or (2) with knowledge or reason to know that the monetary instruments were derived from unlawful activity. Ibid.9

2. In October 1985, the Senate Committee on the Judiciary held hearings on three bills (S. 572, 99th Cong., 1st Sess.; S. 1335, 99th Cong., 1st Sess.; and S. 1385, 99th Cong., 1st Sess.) to create, among other things, a criminal money laundering offense.10 In March 1986, the Judiciary Committee held additional hearings. The witness testimony and lawmaker remarks at both hearings reflected an understanding that "laundering" as Congress understood it encompassed simpler tech niques to smuggle and hide illegal proceeds abroad, as well as more sophisticated schemes.

For example, a United States Justice Department official testified that "some criminal organizations still wash their own illegally generated money by such rela tively crude methods as one of their members' smug gling a suitcase full of currency out of the country for deposit in an offshore bank." Money Laundering Legis lation: Hearing on S. 572, S. 1335, and S. 1385 Before the Senate Comm. on the Judiciary, 99th Cong., 1st Sess. 57 (1985) (statement of Stephen S. Trott, Assistant Attorney General, Criminal Division). Testimony from the Executive Director and Chief Counsel of the Com mission emphasized the need for legislation to target the entire money laundering "process" in order to en able law enforcement "to intercept the money launder ers, and the money, and the cash, and the profits, before they enter the bank." Id. at 100 (Testimony of James D. Harmon, Jr., Executive Director and Chief Counsel, President's Commission on Organized Crime).

Senator Joseph Biden expressed concern during his questioning of a Treasury Department official that as banks improved their compliance with reporting re quirements to combat money laundering, "the down side" could be that criminals would revert to "physically transport[ing] [illicit cash] out of the United States by cargo and in luggage and by air." White Collar Crime (Money Laundering): Hearings on Oversight of the Problem of White Collar Crime Before the Senate Comm. on the Judiciary, 99th Cong., 1st Sess. Pt. 2, at 23 (1986) (1986 Senate Hearings) (statement of Senator Joseph Biden during questioning of David D. Queen (Queen), Acting Assistant Secretary for Enforcement and Operations, Department of the Treasury). Senator Biden noted that the Customs Service "ha[d] enough problem[s] trying to figure out what is coming into the country, let alone what is going out." Ibid. The Trea sury Department official noted that the Customs Ser vice recently had "interrupted" "several major currency smuggling operations[,] * * * some carrying $2 and $3 and $4 million in small bills out of the country." Id. at 35 (testimony of Queen). The official observed that the events were "in some ways * * * heartening because it is indicative of the fact that large-scale money laun dering operations or illicit criminal organizations do not feel comfortable processing their money through our banking institutions because of the improved degree of compliance." Ibid.

3. The bill (S. 2683, 99th Cong., 1st Sess. (1986)) that included the final version of 18 U.S.C. 1956 (2000 & Supp. V 2005) resulted from a bipartisan effort in the Senate Judiciary Committee to "address the concerns raised [about the prior bills] and to formulate consensus money laundering legislation." S. Rep. No. 433, 99th Cong., 2d Sess. 4 (1986). The Senate Report indicated that 18 U.S.C. 1956(a)(2) was "designed to illegalize in ternational money laundering transactions" and defined the physical transportation of cash into and out of the United States as "laundering" activities in and of them selves:

[Section 1956(a)(2)] covers situations in which money is being laundered by transferring it into the United States as well as those in which money is being laun dered by transferring it out of the United States. The inclusion of this section is intended to support recent United States' efforts to obtain international cooperation to halt the flow of drug money, and to prevent the United States from becoming a haven in which foreign drug traffickers can keep or invest their earnings.

S. Rep. No. 433, supra, at 11 (emphasis added).

4. Petitioner recites few details from this legislative history and instead generalizes (Br. 28-29) that the "leg islative record was unambiguous" that Congress was "concerned with the processes by which criminal organi zations gained access to their illegitimate wealth by re moving any appearance of illegality from their proceeds." That generalization does not assist peti tioner. Congress was concerned about "processes" for "removing any appearance of illegality from [criminal] proceeds." But disguising funds as legitimate is only one way to dispose of illegitimate funds such that they will be less likely to betray the criminal activity that generated them. And the legislative history reveals that Congress did not confine "laundering" to a single model or view it as amenable to a narrow solution. Con gress's concern was that criminal organizations were profitable and increasingly more sophisticated, and that law enforcement needed better tools to find and seize illegal proceeds no matter how criminals sought to con ceal or disguise them.11 Stopping criminals from con verting illegal proceeds into apparently legitimate as sets was one aspect of the law enforcement challenge, but so was stopping the surreptitious flow of illegal pro ceeds across the border where they would be more diffi cult, if not impossible, to find. It was no oversight that Congress drafted a criminal statute that punishes the concealment or disguising of the attributes of illegal proceeds without use of the limiting phrase "appearance of legitimate wealth." That phrase would have ham strung the effort to solve a broader problem. This Court should reject petitioner's invitation to read that phrase into the statute now.

5. Petitioner argues (Br. 30) that the statement in Senate Report No. 433, supra, that 18 U.S.C. 1956(a)(2) would cover "situations in which money is being laun dered by transferring it" into or out of the United States demonstrates Congress's intent to reach only "trans portations that are necessary preludes to further laun dering transactions." Neither the text of the statute nor the legislative history supports that conclusion. Con gress could have drafted Section 1956(a)(2) to require that the cross-border transportation of illegal proceeds be designed to "deliver the funds to a location where transactions that conceal or disguise the funds" would occur, as petitioner suggests. Indeed, Congress could have used words equivalent to those it employed in the "promotion" subsection of the same statute-transpor tation of illegal proceeds "with the intent to" engage in transactions that conceal or disguise the funds. 18 U.S.C. 1956(a)(1)(A)(i). But Congress did not write the statute that way, and there is no indication in the legis lative history that one who transports illegal proceeds across the border in a way that conceals their attributes also must intend that the cash be transformed, through future transactions, into seemingly legitimate wealth.

Instead, Congress viewed "laundering" as a term that encompassed the transportation of funds into or out of the United States with the design to conceal or dis guise an attribute of the proceeds, including its "loca tion." The reason is that such transportation vel non would frustrate the ability of law enforcement to find the money-and thus prevent the funds from betraying the criminal nature of the enterprise, while at the same time permitting the launderer to evade taxes or forfei ture, promote further illegal activity, or transform the money into untraceable funds. That conclusion is reinforced by one of the stated purposes of Section 1956(a)(2)-"to obtain international cooperation to halt the flow of drug money." S. Rep. No. 433, supra, at 11. This objective would be ill-served if drug money could only be halted at the border under this provision in the unlikely event that the government knew of the defen dant's plans to engage in transactional money launder ing in the future.

6. Petitioner also is incorrect (Br. 31) that the deci sion of the court of appeals "would resurrect the over broad proposals that Congress rejected." Congress explained three ways in which 18 U.S.C. 1956 (2000 & Supp. V 2005) as enacted differed from the proposals Congress had considered. First, the statute as enacted contained heightened scienter requirements (the con sensus bill "employ[ed] a scienter standard of 'knowing,' rather than 'reason to know' or 'reckless disregard'"). Second, the statute took "a qualitatively different approach" to "the nature of the transactions that it cov ers" by "applying its coverage to those transactions that can be said to constitute the core of money laundering- transactions designed to conceal or disguise the nature, location, source, ownership, or control of criminal pro ceeds, or to evade Federal or State cash reporting re quirements" (the Commission's bill had "limited its cov erage to bank transactions" and the administration bill "extended coverage to all transactions affecting inter state or foreign commerce"). Third, the statute "str[u ck] a balance" between the Commission's bill (which limited its application to the proceeds of Racketeer In fluenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1961 et seq., predicate crimes) and the adminis tration bill (which covered the proceeds of any State or Federal crime) by "covering the proceeds of Federal financial offenses and foreign drug offenses as well as RICO predicate offenses." See S. Rep. No. 433, supra, at 9.

Petitioner's argument is directed only to the second modification. Petitioner contends (Br. 31) that, unless an "appearance of legitimate wealth" requirement is read into the "conceal or disguise" provision of the sta tute, the statute will revert to covering "all transactions or transportations involving illicit money" because "[v]irtually every" transaction or international transpor tation in illegal funds "will involve some level of conceal ment and secrecy, lest the criminals expose their under lying criminal activity." Petitioner is incorrect. Not every transaction in or transportation of illegal pro ceeds will evidence a design to conceal or disguise a per tinent attribute of illegal proceeds. A commercial pur chase using illegally-earned money, for instance, may or may not be designed to conceal or disguise attributes of the funds. So too with a mere deposit of illegal funds into a personal bank account, or a transfer of funds be tween accounts. When the circumstances surrounding a transaction or transportation do not demonstrate it was designed to conceal or disguise in the relevant sense, a money laundering conviction will not be sup ported by the evidence.12 The result would be the same under the court of appeals' decision; indeed, the court applied the same analysis in this case. Pet. App. 16a.

Moreover, the Senate Report indicates that the "con cept" for the international transportation provision of Section 1956 was "derived" from the provision in the administration's bill for receiving the proceeds of a crime. S. Rep. No. 433, supra, at 11. See note 10, su pra. Section 1956(a)(2) "avoid[ed] two pitfalls" of the administration's proposal, "which would have been trig gered by the mere receipt of property and by the recipi ent's mere 'belief' that the property represented the proceeds of crime." Ibid. The Senate Report indicates that, as enacted, the statute "requires that the accused defendant engage in an act of transporting or attempted transporting and either intend to facilitate a crime or know that the transaction [sic] was designed to conceal a crime." Ibid. Thus, in enacting Section 1956(a)(2) in particular, Congress elected to criminalize the cross- border transportation of illegal money that is designed to conceal, rather than criminalize the mere receipt of foreign drug money. Petitioner's argument (Br. 32) that the court of appeals' ruling "reverses" an "explicit choice by Congress" has no support.

C. The Bulk Cash Smuggling Statute Does Not Support Petitioner

Petitioner contends that his conduct could have been charged as a violation of 31 U.S.C. 5332 (Supp. V 2005), which makes "bulk cash smuggling" into or out of the United States a five-year felony, and that the availabil ity of that charge means that his conduct was not cov ered by 18 U.S.C. 1956 (2000 & Supp. V 2005). The bulk cash smuggling statute supports the government's posi tion, not petitioner's.

1. The offense of bulk cash smuggling was created in 2001 as part of the USA PATRIOT Act.13 The statute is violated when (1) with the intent to evade a currency reporting requirement under 31 U.S.C. 5316,14 (2) a per son knowingly conceals more than $10,000 in currency or monetary instruments on his person or in a convey ance, piece of luggage, merchandise, or other container, and (3) transports or attempts to transport the funds across the United States border in either direction. 18 U.S.C. 5332 (Supp. V 2005). The statute provides for criminal and civil forfeiture of any property involved in the violation. The statute was enacted in response to United States v. Bajakajian, 524 U.S. 321 (1998), which held that, when a violation of only a currency reporting offense is proved, forfeiture of the full amount of the unreported currency would violate the Excessive Fines Clause. Id. at 337-340. See United States v. Jose, 499 F.3d 105, 109-110 (1st Cir. 2007).

Unlike money laundering, the offense of bulk cash smuggling requires no evidence that the smuggled funds were derived from illegal activity. Bulk cash smuggling is shown when a defendant knowingly con ceals more than $10,000, whether legally- or illegally- derived, and acts with the intent to evade the require ment for filing a currency transaction report. Neither of these two requirements (a threshold amount of $10,000 or the intent to evade a reporting requirement) applies under the money laundering statute. Rather, in an international money laundering case, the government must prove that the funds at issue, which can be of any amount, were derived from specified unlawful activity and that the defendant knew the funds were illegal pro ceeds. In addition, the government may prove that the defendant's cross-border transportation was designed in whole or in part to avoid a transaction reporting re quirement, in which case it will have proven a 20-year felony (see 18 U.S.C. 1956(a)(2)(B)(ii)),15 or the govern ment may prove, among other things, that the transpor tation was designed to conceal or disguise a pertinent attribute of the proceeds.

2. In light of these differences, petitioner's argu ment (Br. 35) that the bulk cash smuggling statute was "plainly enacted to address the conduct at issue here" is without merit. It is questionable whether the govern ment even could have proved, as it must under the bulk cash smuggling statute, that petitioner knew of the cur rency transaction reporting requirement at the border and intended to evade it. Petitioner was stopped 114 miles from the border, and there is no record evidence that petitioner was on notice of the requirement. Cf. United States v. Tatoyan, 474 F.3d 1174, 1177 (9th Cir. 2007) (evidence was sufficient to show actual knowledge of reporting requirement where inspector explained requirement to defendants orally, defendants were given a customs form, placards were posted around air port, and defendants' passports detailed the require ment in writing).

More importantly, petitioner's crime entailed culpa ble conduct not addressed by the bulk cash smuggling statute. The evidence in this case showed that the cash petitioner attempted to transport across the border was drug trafficking proceeds. Where the government can prove that funds in transport are derived from specified criminal activity and the defendant had knowledge of the unlawful nature of the proceeds, and where there is evidence that the transportation was designed to con ceal or disguise the funds, bulk cash smuggling is not the appropriate charge because it does not reflect the gravity of the offense. Petitioner emphasizes (Pet. Br. 36) the difference in the maximum penalty between money laundering (20 years) and bulk cash smuggling (five years). The penalty difference, however, reflects the increased magnitude of the crime when the funds are not simply being smuggled, but are demonstrably the proceeds of criminal activity, the defendant has knowledge of that fact, and the transportation is de signed to conceal or disguise one of the attributes of the illegal proceeds.

3. Petitioner recites (Br. 34) the statement in the House Report prepared in connection with the bulk cash smuggling bill that "[p]resently, the only law enforce ment weapon against [bulk cash] smuggling is section 5316 of title 31, United States Code, which makes it an offense to transport more than $10,000 in currency or monetary instruments into, or out of, the United States without filing a report with the United States Customs Service." H.R. Rep. No. 250, 107th Cong., 1st Sess. Pt. 1, at 36-37 (2001). That statement does not assist peti tioner. A currency reporting violation was the only available charge in a smuggling case where there was no evidence that the concealed currency was criminally derived (such as Bajakajian). An ambiguous sentence in a House Report written 15 years after the money laundering statute became law permits no inference that Congress intended for the money laundering stat ute to contain an "appearance of legitimate wealth" limi tation that is absent from its text and is contrary to its legislative history.

In fact, the opposite is true. In its statement of find ings that accompanied the bulk cash smuggling bill, Congress declared:

The transportation and smuggling of cash in bulk form may now be the most common form of money laundering, and the movement of large sums of cash is one of the most reliable warning signs of drug trafficking, terrorism, money laundering, racketeer ing, tax evasion and similar crimes.

USA PATRIOT Act, Pub. L. 107-56, § 371(a)(3), 115 Stat. 337; see § 371(b), 115 Stat. 337 (emphasis added). That finding directly refutes petitioner's argument that Congress could not have intended petitioner's conduct to constitute "money laundering" under 18 U.S.C. 1956(a)(2). Congress has consistently understood "mon ey laundering" to encompass the surreptitious cross- border transportation (i.e., smuggling) of illegal pro ceeds. What Congress lacked was a means to confiscate and forfeit bulk cash when it could not yet be tied to crime. Smuggling of that sort was a "reliable warning sign" of money laundering, but it could not be prose cuted under the laundering statute. A bulk cash smug gling offense provided the answer.

D. The Rule Of Lenity Is Inapplicable

Petitioner asserts incorrectly (Br. 14) that the rule of lenity is "a crucial aid in the construction of any crim inal statute." It is not. The rule of lenity applies only if, "at the end of the process of construing what Congress has expressed," including the use of ordinary tools of statutory construction, Callanan v. United States, 364 U.S. 587, 596 (1961), "there is a grievous ambiguity or uncertainty in the statute." Muscarello v. United States, 524 U.S. 125, 139 (1998) (internal quotation marks and citations omitted). Neither "[t]he mere pos sibility of articulating a narrower construction," Smith v. United States, 508 U.S. 223, 239 (1993), nor "[t]he simple existence of some statutory ambiguity" is suffi cient to warrant application of the rule. Muscarello, 524 U.S. at 138. The rule of lenity applies "only if, after seizing everything from which aid can be derived, . . . [the Court] can make no more than a guess as to what Congress intended." Ibid. (internal quotation marks and citations omitted).

There is no cause for resort to the rule of lenity (Br. 37-38) in this case. The text of the money laundering statute contains no "appearance of legitimate wealth" requirement and the plain meaning of the text is but tressed by the statute's purpose and legislative history. Congress has written a statute that "demonstrates breadth," not "ambiguity." Sedima, SPRL v. Imrex Co., 473 U.S. 479, 499 (1985) (internal quotation marks and citation omitted). Moreover, the rule of lenity has the greatest force when the broader reading of a statute threatens to criminalize conduct that reasonable people could regard as innocent. See Arthur Anderson LLP v. United States, 544 U.S. 696, 703-704 (2005). There is no such danger here. The concealment of criminally-de rived proceeds is inherently wrongful, and the require ments under Section 1956 that a defendant know of the illegal nature of the proceeds and know that the cross- border transportation of those proceeds is designed to conceal or disguise one or more of their attributes en sures that innocent conduct will not be criminalized. See 18 U.S.C. 1956(a)(2)(B)(i).

E. The Evidence, Viewed Under A Correct Interpretation Of The Money Laundering Statute, Supports Peti tioner's Conviction

The government was not required to prove that peti tioner's transportation of drug proceeds to Mexico was designed to "create the appearance of legitimate wealth." The government was required to prove that the transportation was "designed in whole or in part" to "conceal or disguise" the nature, location, ownership, source, or control of the proceeds. The government clearly met that burden.

1. There is no dispute that petitioner's movement of drug proceeds toward Mexico in his car constituted "transportation" of those funds. It is also clear that any transportation of illegal funds covered by 18 U.S.C. 1956(a)(2)(B)(i) will be "designed" to alter the geo graphic location of illegal funds by moving them outside the United States (if the funds began in the country) or to a location inside the United States (if the funds began elsewhere). Whether that cross-border transportation of the funds also is "designed" to conceal or disguise one or more attributes of the funds within the meaning of 18 U.S.C. 1956 (2000 & Supp. V 2005) requires examination of the circumstances of the transportation and the infer ences that can reasonably be drawn from the circum stances. See United States v. Cruzado-Laureano, 404 F.3d 470, 483 (1st Cir.) (design to conceal may be proved by direct or circumstantial evidence), cert. denied, 546 U.S. 1009 (2005).

As with any fact-intensive determination, a range of scenarios exists. If an individual transports illegal currency in a way that does not differ from how cur rency ordinarily is transported-such as in a wallet or purse or pocket-then no reasonable inference could be drawn, based on the transportation method alone, that the transportation was designed to conceal or disguise a pertinent attribute of the proceeds. If that same indi vidual engages in no conduct designed to prevent the discovery of that money or to evade law enforcement, and makes no incriminating admissions, there would remain no reasonable basis for an inference that the transportation was designed to conceal or disguise a pertinent attribute of the proceeds. And if no independ ent evidence establishes that concealment or disguising of a pertinent attribute of the proceeds would occur at the point of destination, then a factfinder still would lack a reasonable and non-speculative basis for an infer ence that the transportation was "designed to conceal or disguise" within the meaning of the money laundering statute. See United States v. Gonzalez-Rodriguez, 966 F.2d 918 (5th Cir. 1992) (evidence insufficient to estab lish design to conceal or disguise when defendant pos sessed $8000 in airport, readily disclosed it to law en forcement and made no false exculpatory statements).

If any of those variables changes, then the result could change as well. An unusual method of concealing illegal proceeds during transportation could support an inference that the transportation is "designed to con ceal" pertinent attributes of the funds. Evidence of unusual, evasive, or secretive conduct during the trans portation could support the same inference. A damag ing admission by the defendant or independent evidence that the purpose of the transportation was to conceal or disguise an attribute of the proceeds as part of a larger effort to remove funds from the United States to avoid having the funds betray criminal activity would likewise support a conviction.16

2. A similar analysis applies in transactional money laundering cases when the transaction is a commercial purchase. As with the ordinary transportation of mon ey, a degree of disguising or concealment is inherent in any ordinary purchase. Exchanging illegal funds for an item purposefully alters the location, ownership, and control of the funds and converts the funds into "a dif ferent and more legitimate-appearing form." United States v. Willey, 57 F.3d 1374, 1384 (5th Cir.), cert. de nied, 516 U.S. 1029 (1995). Every such purchase there fore has the effect of concealing attributes of the funds. To prevent 18 U.S.C. 1956 (2000 & Supp. V 2005) from becoming a "money spending statute," courts examine the circumstances of the transaction to discern whether there is "more than a trivial motivation to conceal." United States v. Garcia-Emanuel, 14 F.3d 1469, 1474 (10th Cir. 1994). Evidence that could support such a finding includes, but is not limited to:

[S]tatements by a defendant probative of intent to conceal; unusual secrecy surrounding the transac tion; structuring the transaction in a way to avoid attention; depositing illegal profits in the bank ac count of a legitimate business; highly irregular fea tures of the transaction; using third parties to con ceal the real owner; a series of unusual financial moves cu[lmin]ating in the transaction; or expert testimony on practices of criminals.

Id. at 1475-1476 (footnotes omitted).

3. The court of appeals applied these factors to the circumstances of this case and correctly held that peti tioner's transportation of drug proceeds bore numerous indicia that the transportation was "designed" to "con ceal or disguise" pertinent characteristics of the illegal funds. First, the transportation was designed to "con ceal" the "location" and the "nature" of the funds by moving them to Mexico without detection by law en forcement. That design of the transportation was evi denced by petitioner's admitted destination of Mexico, the elaborate measures taken to convert the rear por tion of the Beetle into a secret cargo compartment se cured by screws, carpet tabs, and speaker boxes, and the use of scent-suppressing packaging materials on the money and animal hair around the compartment as a technique to distract drug-detection dogs.17

The transportation also bore indicia of a design to conceal the "source," "ownership," and "control" of the proceeds. In transactional money laundering cases, the use of third parties is viewed as significant evidence of a design to conceal those attributes of illegal funds.18 Here too, the evidence supports the conclusion that peti tioner's transportation of illegal drug proceeds for an unidentified third person was designed to conceal the identity of that owner and controller of the funds. See United States v. Garcia-Jaimes, 484 F.3d 1311, 1322 (11th Cir. 2007) (plan to transport drug proceeds to Mexico "allowed the owner of the money to place it in the hands of a third party, which makes it difficult to determine both the owner and the source of the mon ey"), petition for cert. pending, No. 06-11863 (filed June 11, 2007). Petitioner told the officers he did not know who paid him to drive the Beetle to Mexico, petitioner gave an inconsistent account at trial about how he came to possess the Beetle from a Mr. Morcia, and petitioner provided no satisfactory explanation for the lengthy bus journey, without luggage, that preceded his occupation of the Beetle. The conclusion that petitioner's transpor tation of illegal proceeds was designed to conceal the ownership and control of the funds was further evi denced by expert testimony that drug organizations utilize couriers who know little about the source of their cargo, precisely because this business model limits the information that can be provided to law enforcement in the event the driver is stopped. See Garcia-Emanuel, 14 F.3d at 1476 (expert testimony on practices of crimi nals can support finding of design to conceal or dis guise).

Moreover, the court of appeals correctly viewed peti tioner's substantial efforts at concealment during trans portation as circumstantial evidence that the larger de sign of the transportation was to "successfully trans port[] the funds to Mexico without detection" so that the funds would be "better concealed or concealable after the transportation than before." Pet. App. 16a. In the words of the dissent, the court of appeals determined that petitioner was "transporting money to conceal its location" and not just "concealing money to transport it." Id. at 27a. That finding was well-supported by the evidence.19

4. Petitioner argues (Br. 43) that it "simply is not rational to infer a further purpose of concealment at the destination from the mere fact that the money was hid den during transportation" and hypothesizes that the illegal funds might be used openly in Mexico to "finance a vacation" or make other purchases. Whatever is done with the illegal proceeds in Mexico, however, they have been surreptitiously moved to a location where United States law enforcement authorities are impaired from detecting and intercepting them. That conduct falls squarely within the terms of the statute and was a specific concern of Congress in enacting the cross-bor der transportation provision of the laundering offense.20

CONCLUSION

The judgment of the court of appeals should be affirmed.

Respectfully submitted.

 

PAUL D. CLEMENT
Solicitor General
ALICE S. FISHER
Assistant Attorney General
MICHAEL R. DREEBEN
Deputy Solicitor General
LISA H. SCHERTLER
Assistant to the Solicitor
General
JOEL M. GERSHOWITZ
Attorney

JANUARY 2008

1 Petitioner first traveled eastward from the border (from Del Rio to Uvalde to San Antonio). Overnight, petitioner traveled north (from San Antonio to Big Spring, Lubbock, Tulia, and Amarillo). Petitioner then traveled south to arrive at the location of the traffic stop, covering near ly 1000 miles in less than two days. J.A. 22-24, 33-34, 48-49; Gov't Supp. C.A. Br. on Reh'g 3.

2 Under the anti-surplusage canon of statutory construction, courts have a duty "to give effect, if possible, to every clause and word of a statute." Duncan v. Walker, 533 U.S. 167, 174 (2001) (quoting United States v. Menasche, 348 U.S. 528, 538-539 (1955)); see Williams v. Taylor, 529 U.S. 362, 404 (2000) (describing anti-surplusage canon as a "cardinal principle of statutory construction"). In order to give inde pendent meaning to the statutory phrases "designed * * * to * * * disguise" and "designed * * * to conceal," 18 U.S.C. 1956(a)(1)(B)(i) and (a)(2)(B)(i), the phrases should be interpreted to encompass distinct classes of transactions and transportations.

3 The Commission was established by President Ronald Reagan in 1983 and was directed to analyze organized crime, including the sources and amounts of its income, and to evaluate federal laws directed at com bating organized crime. Exec. Order No. 12,435, 3 C.F.R. 214 (1983). Its report led to the initiative in Congress to enact a money laundering offense. The money laundering statute was enacted two years later, in October 1986.

4 See United States v. Stephenson, 183 F.3d 110, 120 (2d Cir.) (af firming conviction under Section 1956(a)(1)(B)(i) where defendant caused his wife to place $27,800 in drug proceeds in safe deposit box "so as to conceal" them), cert. denied, 528 U.S. 1013 (1999); see also United States v. Bowman, 235 F.3d 1113, 1115-1116 (8th Cir. 2000) (affirming convictions under Section 1956(a)(1)(B)(i) where defendant deposited $1,640,000 in bank-robbery proceeds in multiple safe deposit boxes in his own name and shifted the proceeds between boxes; jury could con clude that defendant's conduct was designed "to make tracking the money difficult").

5 See United States v. Cihak, 137 F.3d 252, 262 (5th Cir.) (following co-defendant's conviction, defendant's hasty liquidation and transfer of illegal assets to his own accounts abroad showed design to conceal source and location of funds), cert. denied, 525 U.S. 847, and 525 U.S. 888 (1998); United States v. Abbell, 271 F.3d 1286, 1298 (11th Cir. 2001) (lawyer who deposited "hush money" in inmates' accounts using drug- cartel proceeds concealed the source of the funds; statute does not require that appearance of legitimate wealth be generated).

6 The commentators further explained:

Congress has never prohibited 'money laundering,' but targeted certain conduct which it specified in technical detail without ever using the phrase within the text of the statute. * * * The phrase has no value except as a convenient short hand for the offenses specified in [Sections] 1956 and 1957 or perhaps the general pro blem these and the currency reporting statutes were designed to constrain. Whether conduct meets anyone's concept of what is "money laundering" is irrelevant to whether conduct violates one of these sections. If conduct meets all the elements of one of these offenses, the statute is violated even if the conduct could not be called money laundering by any particular definition.

Williams & Whitney, supra, at 6.

7 Petitioner also cannot support an "appearance of legitimate wealth" requirement merely by citing cases that, on their own facts, would have met such a requirement if it existed. See Pet. Br. 25-27. One of the cases petitioner cites for its complex facts alone, United States v. Bock ius, 228 F.3d 305 (3d Cir. 2000), actually undercuts petitioner's argu ment that Section 1956 is limited to conduct that creates an "appear ance of legitimate wealth." In Bockius, the Third Circuit recognized that the money laundering statute has an "inclusive scope" that extends beyond the traditional understanding of that term. Id. at 312-313.

8 Kaufman stated: "Whatever technique is employed, the result is the same. When criminals launder funds they avoid both taxation and the possibility of loss in civil forfeiture proceedings." Record of Hearing 7.

9 The statute ultimately enacted by Congress bore the same title. The origin of the title in the Commission's proposal further undercuts petitioner's argument (Br. 14-15) that the term "laundering" limits the scope of the statute to offenses involving an "appearance of legitimate wealth." The offense proposed by the Commission was very broad and contained no hint of the limitation that petitioner now indicates is im plicit in the title of the statute.

10 S. 572, supra, and S. 1385, supra, substantially tracked the Com- mission's proposal for Section 1956. Money Laundering Legislation: Hearing on S. 572, S. 1335, and S. 1385 Before the Senate Comm. on the Judiciary, 99th Cong., 1st Sess. 38-43 (1985). S. 1335 was prepared by the United States Department of Justice and the United States Treasury Department. Id. at 1. Its draft of Section 1956 tracked the substance (although not the precise words) of the Commission's pro posal, but (1) included transactions that affected interstate commerce even if they did not involve financial institutions and (2) substituted a "reckless disregard" standard for the Commission's "reason to know" standard applicable to the category of transactions involving illegal proceeds of crime. Id. at 6. S. 1335 also included a proposal for a sepa rate criminal provision entitled "Receiving the proceeds of a crime." That proposal would have created a ten-year felony for anyone who "re ceives, possesses, conceals, or disposes of" money or property obtained in connection with a felony offense or for anyone who "brings or trans fers" into the United States money or property obtained in connection with a felony violation of foreign drug trafficking laws. Id. at 20.

11 Congress's broad enforcement goals are further illustrated by 18 U.S.C. 1957, which was enacted at the same time as Section 1956. Sec tion 1957 creates a ten-year felony for engaging or attempting to en gage in any monetary transaction by, to, or through a financial institu tion with the proceeds of specified unlawful activity if the property has a value exceeding $10,000 and the defendant knows the funds are derived from crime.

12 See, e.g., United States v. Corchado-Peralta, 318 F.3d 255, 259 (1st Cir. 2003) (commercial purchases, deposit of funds into account, and single transfer of funds between accounts were insufficient to show that transactions were designed to conceal); Stephenson, 183 F.3d at 120- 121 (car purchase using illegal proceeds was insufficient to show design to conceal); United States v. Herron, 97 F.3d 234, 236 (8th Cir. 1996) (wire transfers alone did not evidence design to conceal), cert. denied, 519 U.S. 1133, and 520 U.S. 1129 (1997); United States v. Willey, 57 F.3d 1374, 1388 (5th Cir.) (mere transfer of funds between accounts was insufficient to show design to conceal), cert. denied, 516 U.S. 1029 (1995); United States v. Sanders, 929 F.2d 1466, 1472 (10th Cir.) (buy ing a car in own name or daughter's name with drug proceeds is not a violation of 18 U.S.C. 1956(a)(1)(B)(i); Section 1956 is not a money spending statute), cert. denied, 502 U.S. 846 (1991).

13 Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. No. 107-56, § 371, 115 Stat. 336.

14 Section 5316 requires the filing of a Currency and Monetary In- strument Report whenever monetary instruments of more than $10,000 are transported into or out of the United States. 31 U.S.C. 5316.

15 Petitioner does not contend that he should have been charged under 18 U.S.C. 1956(a)(2)(B)(ii), which would not have changed his sen tencing exposure.

16 For instance, in United States v. Carr, 25 F.3d 1194 (1994), cert. denied, 513 U.S. 939 (1994), and 513 U.S. 1086 (1995), the Third Circuit upheld a conviction for international money laundering where (1) the defendant received a carry-on bag from another person, (2) the defen dant indicated at a customs checkpoint before boarding a plane to Colombia that he had only $4000 in cash, (3) the carry-on bag was found to contain $180,000 secreted in two coffee thermos mugs and a talcum powder container, (4) the defendant had an additional $6000 on his person, and (5) the defendant told a "highly suspicious, if not incredible, story" about retrieving the bag from a train station locker in response to an anonymous phone call. Id. at 1206. When concealment measures undertaken during the transportation are sufficiently unusual and probative, as in Carr, the jury reasonably can infer that the transporta tion has been "planned out in the mind," or "designed," to conceal the illegal proceeds by moving them abroad.

17 See United States v. Garcia-Jaimes, 484 F.3d 1311, 1322 (11th Cir. 2007) (evidence sufficient to support design to conceal in conspiracy case where defendants entered scheme to transport drug proceeds to Mexico in gas tanks on car hauler trailers; defendants "hid the money in the cars to prevent the authorities from finding it"), petition for cert. pending, No. 06-11863 (filed June 11, 2007); United States v. Elso, 422 F.3d 1305, 1309 n.7 (11th Cir. 2005) (evidence sufficient to support design to conceal location of drug money where attorney retrieved drug proceeds from client's safe, loaded money in briefcase in car trunk, and attempted to drive proceeds to law office), cert. denied, 126 S. Ct. 2049 (2006); cf. United States v. Farese, 248 F.3d 1056, 1060 (11th Cir. 2001) (design to conceal "location" of proceeds evidenced by exchange of small-denomination bills into large-denomination bills; reducing volume of paper currency facilitates concealment for transportation out of country); Stephenson, 183 F.3d at 120 (design to conceal supported by evidence that defendant's wife put drug proceeds in safe deposit box at defendant's direction); United States v. Wolny, 133 F.3d 758, 760- 761 (10th Cir. 1998) ("unusual secrecy" of hotel-room meeting sup ported inference of design to conceal).

18 See, e.g., Abbell, 271 F.3d at 1299 (payments made to cartel employ ees by attorneys were designed to conceal that cartel leader was source of money); United States v. Powers, 168 F.3d 741, 748 (5th Cir.) (intent to conceal source of illegal funds evidenced by use of checks made payable to third party), cert. denied, 528 U.S. 945 (1999); United States v. Beddow, 957 F.2d 1330, 1334-1335 (6th Cir. 1992) (intent to disguise ownership of proceeds evidenced by use of "front man" to transport money overseas and purchase emeralds).

19 The facts and decision here contrast with those of United States v. Dimeck, 24 F.3d 1239 (10th Cir. 1994), upon which petitioner relies (Pet. Br. 27-28). Unlike this case, Dimeck involved neither cross-border transportation nor elaborate measures designed to conceal the location and nature of illegal proceeds from law enforcement. Dimeck involved a plan to transport drug proceeds from Detroit to California. The intended recipient of the funds was a marijuana supplier who needed the money to pay his own suppliers. Id. at 1243. Dimeck merely de livered the drug proceeds in an unsealed box to a courier in a Detroit hotel room. Dimeck suggested that the courier put the money in his suitcase or "tape [the box] up" to take it to California. Ibid. (brackets in original). The proceeds traveled no farther, because the courier was a government informant who turned the money over to the Drug Enforcement Administration. Ibid.

The Tenth Circuit determined that Dimeck's "delivery of the money did not result in the kind of transaction prohibited by [18 U.S.C.] 1956(a)(1)(B)(i)." Dimeck, 24 F.3d at 1246. Because the evidence showed that the only purpose for which the money was being delivered was to permit the California supplier to pay his own suppliers, the court determined that on the facts of that case, the use of couriers and the "secrecy surrounding the funds" were not designed "to confuse or mislead anyone as to the characteristics of those proceeds, or to assist in allowing these proceeds to enter into legitimate commerce." Ibid. Instead, the transportation of the funds was "the final part of the [drug distribution] business deal." Id. at 1247. Thus, the holding in Dimeck is that transactional money laundering is not shown when the evidence demonstrates that funds are being delivered for the purpose of closing the "business deal." The manner in which the funds were transported was not the focus of the court and was irrelevant to the holding.

20 The en banc dissent hypothesized that the result in this case would mean that a "young petty thief" who pickpockets a tourist in Texas and attempts to cross the border with the proceeds in his shoe would violate the money laundering statute. It is not clear that the dissent's example implicates any form of "specified unlawful activity" under the money laundering statute. Setting aside that difficulty, transporting currency concealed in a shoe is unusual enough (absent evidence that the defendant routinely transported money that way) to give rise to a reasonable inference that the transportation of illegally-obtained funds to Mexico in those circumstances was designed to conceal pertinent attributes of the money. Prosecution of such an offense under Section 1956 would be viable (but unlikely, given the petty nature of the underlying offense). If that same defendant instead secreted in his shoe a $500,000 money order representing the illegal proceeds of a scheme to defraud senior citizens of their retirement savings, then the claimed "absurdity" of the result is diminished.

 

APPENDIX

 

1. 18 U.S.C. 1956 (2000 & Supp. V 2005) provides:

Laundering of monetary instruments

(a)(1) Whoever, knowing that the property involved in a financial transaction represents the proceeds of some form of unlawful activity, conducts or attempts to conduct such a financial transaction which in fact in volves the proceeds of specified unlawful activity-

(A)(i) with the intent to promote the carrying on of specified unlawful activity; or

(ii) with intent to engage in conduct constituting a violation of section 7201 or 7206 of the Internal Revenue Code of 1986; or

(B) knowing that the transaction is designed in whole or in part-

(i) to conceal or disguise the nature, the loca tion, the source, the ownership, or the control of the proceeds of specified unlawful activity; or

(ii) to avoid a transaction reporting require ment under State or Federal law,

shall be sentenced to a fine of not more than $500,000 or twice the value of the property involved in the transac tion, whichever is greater, or imprisonment for not more than twenty years, or both.

 

(2) Whoever transports, transmits, or transfers, or attempts to transport, transmit, or transfer a monetary instrument or funds from a place in the United States to or through a place outside the United States or to a

place in the United States from or through a place out side the United States-

(A) with the intent to promote the carrying on of specified unlawful activity; or

(B) knowing that the monetary instrument or funds involved in the transportation, transmission, or transfer represent the proceeds of some form of un lawful activity and knowing that such transportation, transmission, or transfer is designed in whole or in part-

(i) to conceal or disguise the nature, the loca tion, the source, the ownership, or the control of the proceeds of specified unlawful activity; or

(ii) to avoid a transaction reporting require ment under State or Federal law,

shall be sentenced to a fine of not more than $500,000 or twice the value of the monetary instrument or funds involved in the transportation, transmission, or transfer whichever is greater, or imprisonment for not more than twenty years, or both. For the purpose of the offense described in subparagraph (B), the defendant's knowl edge may be established by proof that a law enforce ment officer represented the matter specified in sub paragraph (B) as true, and the defendant's subsequent statements or actions indicate that the defendant be lieved such representations to be true.

(3) Whoever, with the intent-

(A) to promote the carrying on of specified un lawful activity;

(B) to conceal or disguise the nature, location, source, ownership, or control of property believed to be the proceeds of specified unlawful activity; or

(C) to avoid a transaction reporting requirement under State or Federal law,

conducts or attempts to conduct a financial transaction involving property represented to be the proceeds of specified unlawful activity, or property used to conduct or facilitate specified unlawful activity, shall be fined under this title or imprisoned for not more than 20 years, or both. For purposes of this paragraph and paragraph (2), the term "represented" means any repre sentation made by a law enforcement officer or by an other person at the direction of, or with the approval of, a Federal official authorized to investigate or prosecute violations of this section.

(b) PENALTIES.-

(1) IN GENERAL.-Whoever conducts or attempts to conduct a transaction described in subsection (a)(1) or (a)(3), or section 1957, or a transportation, transmission, or transfer described in subsection (a)(2), is liable to the United States for a civil penalty of not more than the greater of-

(A) the value of the property, funds, or mone tary instruments involved in the transaction; or

(B) $10,000.

(2) JURISDICTION OVER FOREIGN PERSONS.-For purposes of adjudicating an action filed or enforcing a penalty ordered under this section, the district courts shall have jurisdiction over any foreign person, includ ing any financial institution authorized under the laws of a foreign country, against whom the action is brought, if service of process upon the foreign person is made under the Federal Rules of Civil Procedure or the laws of the country in which the foreign person is found, and-

(A) the foreign person commits an offense under subsection (a) involving a financial transaction that occurs in whole or in part in the United States;

(B) the foreign person converts, to his or her own use, property in which the United States has an ownership interest by virtue of the entry of an order of forfeiture by a court of the United States; or

(C) the foreign person is a financial institution that maintains a bank account at a financial institu tion in the United States.

(3) COURT AUTHORITY OVER ASSETS.-A court de scribed in paragraph (2) may issue a pretrial restraining order or take any other action necessary to ensure that any bank account or other property held by the defen dant in the United States is available to satisfy a judg ment under this section.

(4) FEDERAL RECEIVER.-

(A) IN GENERAL.-A court described in para graph (2) may appoint a Federal Receiver, in accor dance with subparagraph (B) of this paragraph, to collect, marshal, and take custody, control, and pos session of all assets of the defendant, wherever lo cated, to satisfy a civil judgment under this subsec tion, a forfeiture judgment under section 981 or 982, or a criminal sentence under section 1957 or subsec tion (a) of this section, including an order of restitu tion to any victim of a specified unlawful activity.

(B) APPOINTMENT AND AUTHORITY.-A Federal Receiver described in subparagraph (A)-

(i) may be appointed upon application of a Federal prosecutor or a Federal or State regula tor, by the court having jurisdiction over the de fendant in the case;

(ii) shall be an officer of the court, and the powers of the Federal Receiver shall include the powers set out in section 754 of title 28, United States Code; and

(iii) shall have standing equivalent to that of a Federal prosecutor for the purpose of submit ting requests to obtain information regarding the assets of the defendant-

(I) from the Financial Crimes Enforce ment Network of the Department of the Trea sury; or

(II) from a foreign country pursuant to a mutual legal assistance treaty, multilateral agreement, or other arrangement for interna tional law enforcement assistance, provided that such requests are in accordance with the policies and procedures of the Attorney Gen eral.

(c) As used in this section-

(1) the term "knowing that the property involved in a financial transaction represents the proceeds of some form of unlawful activity" means that the per son knew the property involved in the transaction represented proceeds from some form, though not necessarily which form, of activity that constitutes a felony under State, Federal, or foreign law, regard less of whether or not such activity is specified in paragraph (7);

(2) the term "conducts" includes initiating, con cluding, or participating in initiating, or concluding a transaction;

(3) the term "transaction" includes a purchase, sale, loan, pledge, gift, transfer, delivery, or other disposition, and with respect to a financial institution includes a deposit, withdrawal, transfer between ac counts, exchange of currency, loan, extension of credit, purchase or sale of any stock, bond, certifi cate of deposit, or other monetary instrument, use of a safe deposit box, or any other payment, transfer, or delivery by, through, or to a financial institution, by whatever means effected;

(4) the term "financial transaction" means (A) a transaction which in any way or degree affects inter state or foreign commerce (i) involving the move ment of funds by wire or other means or (ii) involv ing one or more monetary instruments, or (iii) in volving the transfer of title to any real property, ve hicle, vessel, or aircraft, or (B) a transaction involv ing the use of a financial institution which is engaged in, or the activities of which affect, interstate or for eign commerce in any way or degree;

(5) the term "monetary instruments" means (i) coin or currency of the United States or of any other country, travelers' checks, personal checks, bank checks, and money orders, or (ii) investment securi ties or negotiable instruments, in bearer form or oth erwise in such form that title thereto passes upon delivery;

(6) the term "financial institution" includes-

(A) any financial institution, as defined in sec tion 5312(a)(2) of title 31, United States Code, or the regulations promulgated thereunder; and

(B) any foreign bank, as defined in section 1 of the International Banking Act of 1978 (12 U.S.C. 3101);

(7) the term "specified unlawful activity" means-

(A) any act or activity constituting an offense listed in section 1961(1) of this title except an act which is indictable under subchapter II of chap ter 53 of title 31;

(B) with respect to a financial transaction occurring in whole or in part in the United States, an offense against a foreign nation in volving-

(i) the manufacture, importation, sale, or distribution of a controlled substance (as such term is defined for the purposes of the Con trolled Substances Act);

(ii) murder, kidnapping, robbery, extor tion, destruction of property by means of ex plosive or fire, or a crime of violence (as de fined in section 16);

(iii) fraud, or any scheme or attempt to defraud, by or against a foreign bank (as de fined in paragraph 7 of section 1(b) of the In ternational Banking Act of 1978));1

(iv) bribery of a public official, or the mis appropriation, theft, or embezzlement of pub lic funds by or for the benefit of a public offi cial;

(v) smuggling or export control viola tions involving-

(I) an item controlled on the United States Munitions List established under section 38 of the Arms Export Control Act (22 U.S.C. 2778); or

(II) an item controlled under regula tions under the Export Administration Regulations (15 C.F.R. Parts 730-774);

(vi) an offense with respect to which the United States would be obligated by a multi lateral treaty, either to extradite the alleged offender or to submit the case for prosecution, if the offender were found within the territory of the United States; or

(vii) trafficking in persons, selling or buy ing of children, sexual exploitation of children, or transporting, recruiting or harboring a per son, including a child, for commercial sex acts;

(C) any act or acts constituting a continuing criminal enterprise, as that term is defined in section 408 of the Controlled Substances Act (21 U.S.C. 848);

(D) an offense under section 32 (relating to the destruction of aircraft), section 37 (relating to violence at international airports), section 115 (relating to influencing, impeding, or retaliating against a Federal official by threatening or injur ing a family member), section 152 (relating to concealment of assets; false oaths and claims; bribery), section 175c (relating to the variola vi rus), section 215 (relating to commissions or gifts for procuring loans), section 351 (relating to con gressional or Cabinet officer assassination), any of sections 500 through 503 (relating to certain counterfeiting offenses), section 513 (relating to securities of States and private entities), section 541 (relating to goods falsely classified), section 542 (relating to entry of goods by means of false statements), section 545 (relating to smuggling goods into the United States), section 549 (relat ing to removing goods from Customs custody), section 641 (relating to public money, property, or records), section 656 (relating to theft, embez zlement, or misapplication by bank officer or em ployee), section 657 (relating to lending, credit, and insurance institutions), section 658 (relating to property mortgaged or pledged to farm credit agencies), section 666 (relating to theft or bribery concerning programs receiving Federal funds), section 793, 794, or 798 (relating to espionage), section 831 (relating to prohibited transactions involving nuclear materials), section 844(f) or (i) (relating to destruction by explosives or fire of Government property or property affecting inter state or foreign commerce), section 875 (relating to interstate communications), section 922(l) (re lating to the unlawful importation of firearms), section 924(n) (relating to firearms trafficking), section 956 (relating to conspiracy to kill, kidnap, maim, or injure certain property in a foreign country), section 1005 (relating to fraudulent bank entries), 10062 (relating to fraudulent Fed eral credit institution entries), 10072 (relating to Federal Deposit Insurance transactions), 10142 (relating to fraudulent loan or credit applica tions), section 1030 (relating to computer fraud and abuse), 10322 (relating to concealment of as sets from conservator, receiver, or liquidating agent of financial institution), section 1111 (relat ing to murder), section 1114 (relating to murder of United States law enforcement officials), sec tion 1116 (relating to murder of foreign officials, official guests, or internationally protected per sons), section 1201 (relating to kidnaping), sec tion 1203 (relating to hostage taking), section 1361 (relating to willful injury of Government property), section 1363 (relating to destruction of property within the special maritime and territo rial jurisdiction), section 1708 (theft from the mail), section 1751 (relating to Presidential as sassination), section 2113 or 2114 (relating to bank and postal robbery and theft), section 2280 (relating to violence against maritime naviga tion), section 2281 (relating to violence against maritime fixed platforms), section 2319 (relating to copyright infringement), section 2320 (relating to trafficking in counterfeit goods and services), section 2332 (relating to terrorist acts abroad against United States nationals), section 2332a (relating to use of weapons of mass destruction), section 2332b (relating to international terrorist acts transcending national boundaries), section 2332g (relating to missile systems designed to destroy aircraft), section 2332h (relating to radio logical dispersal devices), or section 2339A or 2339B (relating to providing material support to terrorists), of this title, section 46502 of title 49, United States Code, a felony violation of the Chemical Diversion and Trafficking Act of 1988 (relating to precursor and essential chemicals), section 590 of the Tariff Act of 1930 (19 U.S.C. 1590) (relating to aviation smuggling), section 422 of the Controlled Substances Act (relating to transportation of drug paraphernalia), section 38(c) (relating to criminal violations) of the Arms Export Control Act, section 11 (relating to viola tions) of the Export Administration Act of 1979, section 206 (relating to penalties) of the Interna tional Emergency Economic Powers Act, section 16 (relating to offenses and punishment) of the Trading with the Enemy Act, any felony violation of section 15 of the Food Stamp Act of 1977 (re lating to food stamp fraud) involving a quantity of coupons having a value of not less than $5,000, any violation of section 543(a)(1) of the Housing Act of 1949 (relating to equity skimming), any felony violation of the Foreign Agents Registra tion Act of 1938, any felony violation of the For eign Corrupt Practices Act, or section 92 of the Atomic Energy Act of 1954 (42 U.S.C. 2122) (re lating to prohibitions governing atomic weapons)3

ENVIRONMENTAL CRIMES

(E) a felony violation of the Federal Water Pollution Control Act (33 U.S.C. 1251 et seq.), the Ocean Dumping Act (33 U.S.C. 1401 et seq.), the Act to Prevent Pollution from Ships (33 U.S.C. 1901 et seq.), the Safe Drinking Water Act (42 U.S.C. 300f et seq.), or the Resources Conserva tion and Recovery Act (42 U.S.C. 6901 et seq.); or

(F) any act or activity constituting an offense involving a Federal health care offense;

(8) the term "State" includes a State of the Uni ted States, the District of Columbia, and any com monwealth, territory, or possession of the United States.

(d) Nothing in this section shall supersede any pro vision of Federal, State, or other law imposing criminal penalties or affording civil remedies in addition to those provided for in this section.

 

(e) Violations of this section may be investigated by such components of the Department of Justice as the Attorney General may direct, and by such components of the Department of the Treasury as the Secretary of the Treasury may direct, as appropriate and, with re spect to offenses over which the United States Postal Service has jurisdiction, by the Postal Service. Such authority of the Secretary of the Treasury and the Pos tal Service shall be exercised in accordance with an ag reement which shall be entered into by the Secretary of the Treasury, the Postal Service, and the Attorney Gen eral. Violations of this section involving offenses de scribed in paragraph (c)(7)(E) may be investigated by such components of the Department of Justice as the Attorney General may direct, and the National Enforce ment Investigations Center of the Environmental Pro tection Agency.

 

(f) There is extraterritorial jurisdiction over the conduct prohibited by this section if-

(1) the conduct is by a United States citizen or, in the case of a non-United States citizen, the con duct occurs in part in the United States; and

(2) the transaction or series of related transac tions involves funds or monetary instruments of a value exceeding $10,000.

(g) NOTICE OF CONVICTION OF FINANCIAL INSTITU TIONS.-If any financial institution or any officer, direc tor, or employee of any financial institution has been found guilty of an offense under this section, section 1957 or 1960 of this title, or section 5322 or 5324 of title 31, the Attorney General shall provide written notice of such fact to the appropriate regulatory agency for the financial institution.

(h) Any person who conspires to commit any offense defined in this section or section 1957 shall be subject to the same penalties as those prescribed for the offense the commission of which was the object of the conspir acy.

 

(i) VENUE.-(1) Except as provided in paragraph (2), a prosecution for an offense under this section or section 1957 may be brought in-

(A) any district in which the financial or mone tary transaction is conducted; or

(B) any district where a prosecution for the un derlying specified unlawful activity could be brought, if the defendant participated in the transfer of the proceeds of the specified unlawful activity from that district to the district where the financial or mone tary transaction is conducted.

(2) A prosecution for an attempt or conspiracy of fense under this section or section 1957 may be brought in the district where venue would lie for the completed offense under paragraph (1), or in any other district where an act in furtherance of the attempt or conspiracy took place.

(3) For purposes of this section, a transfer of funds from 1 place to another, by wire or any other means, shall constitute a single, continuing transaction. Any person who conducts (as that term is defined in subsec tion (c)(2)) any portion of the transaction may be charged in any district in which the transaction takes place.

 

2. 18 U.S.C. 1957 provides:

Engaging in monetary transactions in property derived from specified unlawful activity

(a) Whoever, in any of the circumstances set forth in subsection (d), knowingly engages or attempts to en gage in a monetary transaction in criminally derived property of a value greater than $10,000 and is derived from specified unlawful activity, shall be punished as provided in subsection (b).

(b)(1) Except as provided in paragraph (2), the pun ishment for an offense under this section is a fine under title 18, United States Code, or imprisonment for not more than ten years or both.

(2) The court may impose an alternate fine to that imposable under paragraph (1) of not more than twice the amount of the criminally derived property involved in the transaction.

(c) In a prosecution for an offense under this sec tion, the Government is not required to prove the defen dant knew that the offense from which the criminally derived property was derived was specified unlawful activity.

(d) The circumstances referred to in subsection (a) are-

(1) that the offense under this section takes place in the United States or in the special maritime and territorial jurisdiction of the United States; or

(2) that the offense under this section takes place outside the United States and such special ju risdiction, but the defendant is a United States per son (as defined in section 3077 of this title, but ex cluding the class described in paragraph (2)(D) of such section).

(e) Violations of this section may be investigated by such components of the Department of Justice as the Attorney General may direct, and by such components of the Department of the Treasury as the Secretary of the Treasury may direct, as appropriate and, with re spect to offenses over which the United States Postal Service has jurisdiction, by the Postal Service. Such au thority of the Secretary of the Treasury and the Postal Service shall be exercised in accordance with an agree ment which shall be entered into by the Secretary of the Treasury, the Postal Service, and the Attorney General.

(f) As used in this section-

(1) the term "monetary transaction" means the deposit, withdrawal, transfer, or exchange, in or af fecting interstate or foreign commerce, of funds or a monetary instrument (as defined in section 1956(c)(5) of this title) by, through, or to a financial institution (as defined in section 1956 of this title), including any transaction that would be a financial transaction under section 1956(c)(4)(B) of this title, but such term does not include any transaction nec essary to preserve a person's right to representation as guaranteed by the sixth amendment to the Consti tution;

(2) the term "criminally derived property" means any property constituting, or derived from, proceeds obtained from a criminal offense; and

(3) the term "specified unlawful activity" has the meaning given that term in section 1956 of this title.

 

3. 31 U.S.C. 5332 (Supp. V 2005) provides:

Bulk cash smuggling into or out of the United States

(a) CRIMINAL OFFENSE.-

(1) IN GENERAL.-Whoever, with the intent to evade a currency reporting requirement under sec tion 5316, knowingly conceals more than $10,000 in currency or other monetary instruments on the per son of such individual or in any conveyance, article of luggage, merchandise, or other container, and trans ports or transfers or attempts to transport or trans fer such currency or monetary instruments from a place within the United States to a place outside of the United States, or from a place outside the United States to a place within the United States, shall be guilty of a currency smuggling offense and subject to punishment pursuant to subsection (b).

(2) CONCEALMENT ON PERSON.-For purposes of this section, the concealment of currency on the person of any individual includes concealment in any article of clothing worn by the individual or in any luggage, backpack, or other container worn or car ried by such individual.

(b) PENALTY.-

(1) TERM OF IMPRISONMENT.-A person con victed of a currency smuggling offense under subsec tion (a), or a conspiracy to commit such offense, shall be imprisoned for not more than 5 years.

(2) FORFEITURE.-In addition, the court, in im posing sentence under paragraph (1), shall order that the defendant forfeit to the United States, any property, real or personal, involved in the offense, and any property traceable to such property.

(3) PROCEDURE.-The seizure, restraint, and forfeiture of property under this section shall be governed by section 413 of the Controlled Sub stances Act.

(4) PERSONAL MONEY JUDGMENT.-If the prop erty subject to forfeiture under paragraph (2) is un available, and the defendant has insufficient substi tute property that may be forfeited pursuant to sec tion 413(p) of the Controlled Substances Act, the court shall enter a personal money judgment against the defendant for the amount that would be subject to forfeiture.

(c) CIVIL FORFEITURE.-

(1) IN GENERAL.-Any property involved in a violation of subsection (a), or a conspiracy to commit such violation, and any property traceable to such violation or conspiracy, may be seized and forfeited to the United States.

(2) PROCEDURE.-The seizure and forfeiture shall be governed by the procedures governing civil forfeitures in money laundering cases pursuant to section 981(a)(1)(A) of title 18, United States Code.

(3) TREATMENT OF CERTAIN PROPERTY AS IN VOLVED IN THE OFFENSE.-For purposes of this sub section and subsection (b), any currency or other monetary instrument that is concealed or intended to be concealed in violation of subsection (a) or a con spiracy to commit such violation, any article, con tainer, or conveyance used, or intended to be used, to conceal or transport the currency or other monetary instrument, and any other property used, or in tended to be used, to facilitate the offense, shall be considered property involved in the offense.

 

 

1 So in original. The second closing parenthesis probably should not appear.

2 So in original. Probably should be preceded by "section".

3 So in original. Probably should be followed by a semicolon.

Type: 
Merits Stage Brief
Updated October 21, 2014