In the United States v. Efrain Santos and Benedicto Diaz case of 2007, the U.S. Supreme Court ruled on a matter concerning money laundering laws. The defendants, Santos and Diaz, were convicted for running an illegal lottery in Indiana and subsequently laundering the proceeds through various methods to promote their operation further. However, they appealed against their conviction arguing that since some of these funds were used to pay winners and collectors within this scheme (which is necessary for its functioning), it should not be considered as 'proceeds' under federal law related to money laundering which defines 'proceeds' as profits only. The Supreme Court agreed with them by a 5-4 vote stating that "proceeds" meant "profits," not gross receipts in cases where there's no legislative history indicating Congress intended otherwise; thus overturning their convictions for money-laundering charges but upholding those related to operating an illegal gambling business.

In the dissenting opinion for United States v. Efrain Santos and Benedicto Diaz, Justice Stevens argued that the majority's interpretation of "proceeds" in the federal money laundering statute was too narrow. He contended that "proceeds" should be understood as gross receipts rather than net profits, a definition more consistent with its ordinary meaning and usage in legal contexts. This broader interpretation would also better serve Congress' intent to criminalize all transactions involving illegally obtained funds, not just those where criminals make a profit. Furthermore, he criticized the majority's reliance on rule of lenity (which requires ambiguous criminal laws to be interpreted in favor of defendants), asserting it should only apply when there is grievous ambiguity or uncertainty about statutory provisions after considering language structure, legislative history and motivating policies - conditions which were not met here according to him.