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Friday, October 05, 2007

Ind. Decisions - Yet more on: U.S. Supreme Court hears Lake County definition of "money laundering" case

Still more on the oral arguments before the SCOTUS in the East Chicago money laundering case (for earlier ILB entries, start here), via a report today by Bill Dolan of the NWI Times:

U.S. Supreme Court justices are mulling the question of whether East Chicago's bolita was simply an illegal lottery or a more sinister and organized criminal enterprise that used money laundering to promote its success and conceal it from police.

Federal prosecutors want the high court, which began hearing oral arguments in the case Wednesday, to declare Efrain Santos -- better known as "Puerto Rican Frankie" -- guilty of being both a gambler and a money launderer.

The U.S. attorney's office proved to a Hammond federal jury 10 years ago that Santos raked in $1.7 million in profits by selling bolita lottery-like tickets to customers patronizing East Chicago taverns from 1989 to 1994.

U.S. District Court Judge James Moody sentenced Santos to five years in prison for illegal gambling.

Moody gave Santos an additional sentence of 17.5 years for money laundering for payments Santos made to runners who collected bets and delivered winnings.

Typically, the crime of money laundering is defined as concealing the profits of criminal activity as legitimate income, but another provision in that law also makes it illegal to spend the proceeds of a crime to ensure the success of a continuing criminal enterprise.

Federal prosecutors argued that paying the runners promoted the bolita game and was money laundering.

However, Moody reversed himself in 2004, overturned Santos' money laundering conviction and freed Santos from serving the remainder of his prison sentence.

The federal government asked the U.S. Supreme Court on Wednesday to reinstate the money laundering conviction. It is unclear whether Santos would have to return to prison if the government prevails.

Santos' attorney, Todd G. Vare, of Indianapolis, argued Wednesday that payments to the runners were an essential part of gambling and not a separate crime.

Justice Antonin Scalia seemed to agree with Santos' attorney.

"I think it ... extraordinary ... that Congress would want to make all betting operations like this a violation automatically of two criminal statutes," Scalia said.

Justice Ruth Bader Ginsburg said, "It's hard to see this ... just in the sense of laundering. Nothing is being concealed."

The justices debated whether the money laundering law applies to financial transactions involving any money Santos' bolita game brought in or only financial transactions involving the profits -- money left over after Santos paid his runners.

Posted by Marcia Oddi on October 5, 2007 09:44 AM
Posted to Ind. (7th Cir.) Decisions