{"ID":55522,"name":"United States v. Santos","href":"https:\/\/api.oyez.org\/cases\/2007\/06-1005","view_count":0,"docket_number":"06-1005","additional_docket_numbers":null,"manner_of_jurisdiction":"Writ of \u003Ci\u003Ecertiorari\u003C\/i\u003E","first_party":"United States","second_party":"Efrain Santos and Benedicto Diaz","timeline":[{"event":"Granted","dates":[1177304400],"href":"https:\/\/api.oyez.org\/case_timeline\/case_timeline\/40053"},{"event":"Argued","dates":[1191387600],"href":"https:\/\/api.oyez.org\/case_timeline\/case_timeline\/40054"},{"event":"Decided","dates":[1212382800],"href":"https:\/\/api.oyez.org\/case_timeline\/case_timeline\/40055"}],"lower_court":{"ID":12,"name":"United States Court of Appeals for the Seventh Circuit","href":"https:\/\/api.oyez.org\/taxonomy\/term\/12"},"facts_of_the_case":"\u003Cp\u003EFor his role in running an illegal lottery or \u0022bolita,\u0022 Efrain Santos was convicted on charges of illegal gambling and money laundering. Santos had used income from the lottery to pay both the winners and the couriers and collectors who worked for the gambling operation. The money laundering charges were based on 18 U.S.C. 1956(a)(1), which criminalizes the use of the \u0022proceeds\u0022 of an illegal activity to promote or conceal that activity. However, federal courts disagreed on the meaning of \u0022proceeds.\u0022 The U.S. Court of Appeals for the Third Circuit had ruled that the proceeds used in money laundering can be any of the gross income obtained from the illegal activity, but the U.S. Court of Appeals for the Seventh Circuit, which had jurisdiction over Santos\u0027s case, had recently ruled that only net income (gross revenues minus expenses) used to promote or conceal illegal activities can be the basis of a money laundering conviction. Because Santos had only used gross revenues to promote his lottery, the District Court reversed the convictions.\u003C\/p\u003E\n\u003Cp\u003EThe government argued on appeal that the Seventh Circuit\u0027s interpretation would put too great a burden on prosecutions, because the bookkeeping of criminal operations is often purposefully incomplete or misleading in order to obscure the distinction between gross and net income. The narrow interpretation would also restrict money laundering prosecutions to criminal enterprises that are actually profitable. Santos countered that the government\u0027s broad interpretation would result in overlapping convictions for a wide variety of offenders charged with both money laundering and the underlying crime. He argued that the government\u0027s interpretation strayed too far from the traditional understanding of money laundering, which focuses on the subsequent disguising of profits obtained from a criminal venture. The Seventh Circuit ruled for Santos and affirmed its original ruling.\u003C\/p\u003E\n","question":"\u003Cp\u003EIn the federal money laundering statute 18 U.S.C. 1956(a)(1), which makes it a crime to use the proceeds of an illegal activity to promote the activity or conceal the proceeds, does the word \u0022proceeds\u0022 refer to the gross income received from the illegal activity or to the net income (profits, or gross income minus expenses)?\u003C\/p\u003E\n","conclusion":"\u003Cp\u003ESplitting 5 to 4, the Court affirmed the Seventh Circuit, answering that \u0022proceeds\u0022 refers to \u0022net income\u0022 or profits and not to \u0022gross income.\u0022 Because the statute nowhere defines the term \u0022proceeds\u0022, the plurality applied the so-called rule of lenity which requires such ambiguous statutes to be interpreted in favor of defendants. Justice Antonin Scalia announced the judgment and wrote a plurality opinion for himself and three other justices. 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