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Money Laundering

February 28, 2020

Money Laundering

Case: State of Tennessee v. Robert Jason Allison

Facts: Defendant “fronted” marijuana on two occasions to a drug dealer in exchange for payments on a later date. The drug dealer turned out to be a cooperating informant, and Defendant was arrested for both selling the drugs as well as money laundering for accepting the subsequent payments. Defendant appealed his convictions for money laundering.

Appellate decision: The intermediate court affirmed, holding “the act of accepting payment for the fronted drugs constituted a ‘financial transaction’ separate and distinct from the original transactions.” The court also noted there was evidence Defendant intended to use the money paid to him to buy more drugs to resell.

Review granted: January 15, 2020.

Prediction: Ben thinks the Supreme Court will reverse. Like in many other business dealings, there was a single transaction to sell the drugs in exchange for payment. The Defendant was guilty of “selling” drugs when they were first “fronted” in exchange for a future promise to pay, so the later receipt of money was simply the culmination of the underlying transaction. The money laundering statute proscribes the conducting of a transaction involving proceeds from a crime with the intent to promote the carrying on unlawful activity. But the conduct here was the actual receipt of the proceeds in the underlying crime itself; the law contemplates some separate transaction. David agrees. To affirm would allow money laundering to swallow the drug charges in almost every case given how common “fronting” is.