A recent U.S. Supreme Court ruling could become a significant part of the defense of former City Councilman John “Duke” Franklin Jr., who is charged with money laundering and other crimes in connection with an alleged cocaine ring.

“The Supreme Court decision has definitely narrowed the scope of money laundering,” said Marty Levitt, Mr. Franklin’s defense attorney. “It’s going to make it more difficult to prosecute money laundering crimes.”

And if the decision makes it difficult to prosecute Mr. Franklin’s case specifically, it could help him dodge a possible maximum prison term of 20 years on the money laundering charge alone.

At issue in the Supreme Court case was the meaning of the term “proceeds,” which dictionaries variously define as “profits” or “receipts” in business. The U.S. law that describes the crime of money laundering, however, fails to define it at all, which has left courts historically to interpret its meaning in each case where people are accused of trying to conceal the “proceeds” of unlawful activity.

Federal prosecutors claim Mr. Franklin laundered money — which he knew to be “the proceeds of some form of unlawful activity,” according to his indictment — by helping to falsify a loan document that was designed to make a large amount of cash look legitimate.

The allegations are in connection with a March 5 traffic stop by Hamilton County sheriff’s deputies, who found $69,500 in codefendant Michael Kelley’s car. Mr. Kelley intended to use the money to pay for cocaine, according to the federal indictment against him and Mr. Franklin.

But the 5-4 Supreme Court decision issued June 2 has directed courts to begin defining “proceeds” in the context of money laundering as “profits” only. The decision overturned one man’s money laundering conviction in Indiana with regard to an illegal gambling operation.

“The impact of this decision going forward,” said Indianapolis attorney Todd Vare, “is that the government will have to prove that someone is concealing net profits as opposed to gross receipts to convict them of money laundering.”

At question in Mr. Franklin’s case is whether the $69,500 is the true net “profit” of selling drugs.

The answer still is unclear. Mr. Levitt said he is reviewing the government’s evidence, and the indictment does not reveal where the money came from.

Assistant U.S. Attorney Scott Winne said he is examining the Supreme Court decision but has not determined whether it will affect Mr. Franklin’s case.

But like Mr. Levitt, Mr. Vare, who argued the Supreme Court case for the Indiana defendant, said the decision could impact all money laundering cases, regardless of circumstances.

“My feeling is that (the decision) implicates any money laundering charge,” Mr. Vare said. “Because it defines the term ‘proceeds’ and that’s pretty much an aspect of all money laundering cases.”