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From: "Muller, John D." <JMuller@brobeck.com>
Subject: RE: Money laundering cases and Microsoft patent
Date: Wed, 24 Jun 1998 19:56:48 -0700
The sad thing about the Supreme Court decision is that there were four
Justices voting to uphold the $370,000 forfeiture even where the
prosecutors could not show that the unreported money stemmed from any
crime. Not too surprising from Rehnquist, the ultimate statist, but I
expected better from Scalia. Here's some frightening language from the
dissent (guilty til proven innocent):
In short, respondent was unable to give a single truthful
explanation of the source of the cash. The multitude of lies and
suspicious circumstances points to some form of crime. Yet, though the
Government rebutted each and every fable respondent proffered, it was
unable to adduce affirmative proof of another crime in this particular
case.
Because of the problems of individual proof, Congress found it
necessary to enact a blanket punishment. See S. Rep. No. 99-130, p. 21
(1985); see also Drug Money Laundering Control Efforts, Hearing before
the Subcommittee on Consumer and Regulatory Affairs of the Senate
Banking, Housing, and Urban Affairs Committee, 101st Cong., 1st Sess.,
84 (1989) (former IRS agent found it " 'unbelievably difficult' " to
discern which money flows were legitimate and which were tied to crime).
One of the few reliable warning signs of some serious crimes is the use
of large sums of cash. See id., at 83. So Congress punished all cash
smuggling or non-reporting, authorizing single penalties for the offense
alone and double penalties for the offense coupled with proof of other
crimes. See 31 U. S. C. =A7=A75322(a), (b). The requirement of willfulness,
it judged, would be enough to protect the innocent. See ibid. The
majority second-guesses this judgment without explaining why Congress'
blanket approach was unreasonable.
A sort-of-related item, from today's Wall Street Journal:
THE IRS WINS again in its bid to require lawyers to report
cash-paying clients.
The Supreme Court this week declined to review an appeals-court
decision that sided with the IRS on a closely watched issue. The case
involved rules requiring businesses receiving more than $10,000 in cash
to report that and other information on Form 8300. Some lawyers have
reacted by filling out part of the form but refusing to identify their
clients, claiming "lawyer-client privilege."
Among those lawyers was Gerald B. Lefcourt of New York. The IRS
reacted by imposing a $25,000 penalty. Mr. Lefcourt sued the IRS. It was
his case the Supreme Court declined to review. "The attorney-client
privilege is really under attack from all sides," he says.