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“Checks aren’t cash” back before 3rd Court of Appeals

Sometimes when you least expect it, Tom DeLay pops up in the news.

It would defy common sense to reverse the three-year prison sentence of former U.S. House Majority Leader Tom DeLay because his money-laundering case involved a check instead of cash, Travis County prosecutors are arguing.

Their argument comes in a legal brief to the 3rd Court of Appeals, the only court to embrace the novel defense before a higher court criticized the 3rd Court for acting prematurely during pre trial maneuvers and ordered DeLay to stand trial.

The check-versus-cash argument is only one of several legal points on appeal, but it might give the Sugar Land Republican his best chance to reverse his felony conviction because some of the judges previously appeared open to the argument. Republicans still control the majority on the Austin appeals court, 4-to-2, but half of the six judges have left the bench since the 2008 ruling that had judges publicly accusing one another of partisanship and acting in bad faith.

[…]

“No doubt an ordinary person would expect that a defendant could not circumvent the money laundering law by merely having the ill-gotten gains deposited in a bank and using a check to transfer the money,” [Travis County Assistant DA Holly] Taylor wrote.

Taylor noted that Texas courts have upheld guilty verdicts in other money laundering cases where the laundered funds consisted of checks written before the law was amended in 2005.

Taylor also challenged the reasoning behind the 3rd Court’s controversial opinion about checks.

Under the court’s theory, Taylor said, a drug dealer who deposited his criminal proceeds in a bank could not be prosecuted for money laundering if he wrote a check on that account. On the other hand, if the dealer withdrew cash or used a cashier’s check, he could be charged with money laundering.

“Certainly the Legislature never intended such nonsensical results,” Taylor wrote.

See my various posts here for background. The original ruling on the “checks aren’t cash” defense theory came in 2005. Whatever the 3rd Court of Appeals says – and I have no idea when they will say it – you can be sure this will go back to the CCA afterward, which to its credit got this one right the first time around. There’s still a couple of years to go before this one finally hits the end of the road.

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One Comment

  1. actually, to a certain degree regarding money laundering it is true checks from a bank aren’t cash. I have to deal with federal reporting requirements on form 8300 designed to fight money laundering and the rule is you don’t consider personal checks for $10,000 transactions or above to be “cash”.

    “11. Is a personal check considered cash for reporting on Form 8300?
    Personal checks are not considered cash. ”

    http://www.irs.gov/businesses/small/article/0,,id=148821,00.html

    The idea is since it is going through a bank account the cash is in the system that is trackable by the bank. I don’t know how or even if this applies here, but just an example of how checks are sometimes not considered “cash”.