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recent blog posts

December 2019
Tweaked the USC index pages
SCOTUSblog predicts win for Banister
Arguments in Banister set for Wednesday
Bribery 101

November 2019
RICO 101
Ninth Circuit October 2019 civil instruction revisions
Eighth Circuit publishes a Supplement to its 2017 Manual of Model Criminal Jury Instructions
A roundup of recent additions and revisions to state jury instructions
Money Laundering 101

archived posts
 

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Welcome to the trialdex blog. While you are here, be sure to check out the other free trial resources linked on the trialdex front page, including the jury instruction alerts.

December 2019

Tweaked the USC index pages

The trialdex jury instruction index indexes about 20,000 legal terms, statutes, CFRs, and Supreme Court cases. It is a helpful tool that I use almost every day.

That being said, the USC index had an issue. There are separate pages for every Title of the United States Code, and Title 18 has pages for each chapter. In many cases there are a small number of entries, so paging down to the statute you are looking for is a small matter. In other cases, though there are hundreds of entries on the page, and scrolling down to a particular statute can be a nuisance.

That has been fixed. Any page with an appreciable number of entries now has a list of statutes to click on at the top of the page.

(12/11/19)

SCOTUSblog predicts win for Banister

Justices seem likely to side with Texas prisoner in important habeas case

(12/06/19)

Arguments in Banister set for Wednesday

The Supreme Court will hear the arguments in Banister v. Davis on Wednesday. The issue is "Whether and under what circumstances a timely Rule 59(e) motion should be recharacterized as a second or successive habeas petition under Gonzalez v. Crosby."

Following the arguments will be tough going for those not well schooled in the nuances of habeas corpus review. There was a concise description of the case posted here in September. SCOTUSblog has a more detailed preview that concludes that the case could have broad ramifications "because AEDPA limits to two very specific circumstances the available grounds for relief in a second-or-successive application for post-conviction relief by state or federal prisoners. A ruling for Texas, therefore, would dramatically curtail the availability of Rule 59(e) motions in all first federal habeas petitions by state or federal prisoners."

(12/02/19) (permalink)

Bribery 101

"Bribery" and "quid pro quo" are phrases that are in the news today, but we won't be talking about Presidential politics today. This survey looks at current federal bribery law as codified in the United States Code (generic, common law, or historical "bribery" may be more relevant in that other context).

Before we get started, you may wish to look at the previous "101" posts:

Conspiracy
Mail and wire fraud part one (jurisdictional elements)
Mail and wire fraud part two (elements in common)
Obstruction of justice
Hobbs Act
Travel Act
Money Laundering
RICO

The principal bribery statutes are found in 18 U.S.C. chapter 11, especially § 201, which specifies eight individual crimes, four of them involving witnesses, and four involving public officials.

There are other federal bribery statutes, e.g., bankruptcy bribery, (18 U.S.C. § 152(6)), bribery involving financial institutions (§§ 215 and 225), federal program fraud (§ 666), obstruction of criminal investigations by bribery (1510), Hobbs Act (1951), Travel Act 1952 and pension and welfare bribery (1954), but the principles and definitions are pretty much the same throughout the federal criminal code.

So, to simplify our discussion, let's take a close look at the four § 201 crimes involving public officials:

  • Bribery of a public official (§ 201(b)(1))
  • Receiving bribe by a public official (§ 201(b)(2))
  • Illegal gratuity to a public official (§ 201(c)(1)(A))
  • Receiving an illegal gratuity by a public official (§ 201(c)(1)(B))

Bribery of a public official (§ 201(b)(1)) takes place when something of value is promised, given, or offered to influence an official act. Receiving a bribe (§ 201(b)(2)) takes place when something is demanded, sought, or received in return for being influenced in the performance of an official act. In each case, the act must be done corruptly.

A person offers a thing of value to a public official corruptly if the person acts knowingly and intentionally with the purpose either of accomplishing an unlawful end or unlawful result or of accomplishing some otherwise lawful end or lawful result influenced by the offer of the thing of value to the public official. Mod. Crim. Jury Instr. 3rd Cir. 6.18.201B1-3 (2017).

Giving or receiving a gratuity (§ 201(c)(1)) is criminalized if it is done for or because of an official act that had been performed or was going to be performed. There need not be proof that the act was done corruptly.

Bribery requires intent "to influence" an official act or "to be influenced" in an official act. An illegal gratuity requires only that the gratuity be given or accepted "for or because of" an official act.

In other words, for bribery there must be a quid pro quo—a specific intent to give or receive something of value in exchange for an official act. An illegal gratuity, on the other hand, may constitute merely a reward for some future act that the public official will take (and may already have determined to take), or for a past act that he has already taken.

United States v. Sun-Diamond Growers of California, 526 U.S. 398, 404-05 (1999).

Nevertheless, illegal gratuity cases require proof of

a link between the offer or giving of the thing of value and a specific official act for or because of which it was offered or given. It is not sufficient that the gratuity was offered or given because the public official had authority over matters in which the defendant had an interest, or that the gratuity was offered or given solely for social reasons or friendship. The government, however, does not need to show that the gratuity influenced or was intended to influence the official act; it is sufficient if the gratuity was a reward for some future act that the public official would later take (and may already have determined to take), or for a past act that (he)(she) had already taken.

Mod. Crim. Jury Instr. 3rd Cir. 6.18.201C1A (2017).

An official act is a decision or action on a question, matter, cause, suit, proceeding or controversy that involves

  • "a formal exercise of governmental power that is similar in nature to a lawsuit before a court, a determination before an agency, or a hearing before a committee." McDonnell v. United States, 136 S.Ct. 2355, 2371-72 (2016).
  • It must be something specific and focused that is “pending” or “may by law be brought” before a public official. Id. at 2372.
  • The public official must make a decision, take an action on it, or agree to do so. Id.

The decision or action could be using his or her official position to exert pressure on another official to perform an "official act," or advising another official, knowing or intending that such advice will form the basis for an "official act" by another official. Id. But "[s]etting up a meeting, talking to another official, or organizing an event (or agreeing to do so)—without more—does not fit that definition of 'official act.'" Id.

(12/01/19) (permalink)

November 2019

A bit of site housekeeping

I have changed the way substantive blog entries are archived on the site. Each of them will have their own file name, with "permalink" links at the end of the entry. Google typically takes a few days, maybe longer, to figure stuff like this out, so the "archived posts" search box on this page may not give reliable results for a while.

(11/24/19)

RICO 101

There are a number of federal (and state) statutes that impose civil and criminal penalties on organized crime defendants. We are focusing here on the crimes defined in the federal RICO statute, 18 U.S.C. § 1962.

Before we get started, you may wish to look at the previous "101" posts:

Conspiracy
Mail and wire fraud part one (jurisdictional elements)
Mail and wire fraud part two (elements in common)
Obstruction of justice
Hobbs Act
Travel Act
Money Laundering

Three different substantive criminal violations are proscribed by 18 U.S.C. § 1962:

Section 1962(a) makes it a crime to invest the proceeds of a pattern of racketeering activity or from collection of an unlawful debt in an enterprise affecting interstate or foreign commerce. For example, a narcotics trafficker violates this provision by purchasing a legitimate business with the proceeds of a pattern of multiple drug transactions.

Section 1962(b) makes it a crime to acquire or maintain an interest in an enterprise affecting interstate or foreign commerce through a pattern of racketeering activity or collection of an unlawful debt. For example, an organized crime figure violates this provision by taking over a legitimate business through a pattern of extortionate acts or arsons designed to intimidate the owners into selling the business to him.

Section 1962(c) makes it a crime to conduct the affairs of an enterprise affecting interstate or foreign commerce "through" a pattern of racketeering activity or through the alternative theory of collection of an unlawful debt. For example, an automobile dealer violates this provision by using the dealership's facilities to operate a stolen car ring through a pattern of predicate violations.

Criminal RICO: 18 U.S.C. §§ 1961-1968 A Manual for Federal Prosecutors § I.A. (U.S. Dept. of Justice May 2016) (emphasis added) [hereinafter RICO Manual].

"Subsection (b) of section 1962 has been used very rarely by prosecutors." Pattern Crim. Jury Instr. 10th Cir. 2.75 (2018). "In general, Section 1962(b) should be reserved for the classic cases involving infiltration of legitimate businesses by organized criminal groups." RICO Manual § III.B.

Section 1962 does not require any mens rea beyond that necessary for the predicate acts. The language of § 1962(a) in particular is rather broad, since a defendant could derive income "from a pattern of racketeering activity" without ever having committed a racketeering act, without knowing of the commission of a racketeering act, or without even knowing that the income is derived from racketeering activity. See Pattern Crim. Jury Instr. 10th Cir. 2.74.2 (2018). In any event, it is DOJ policy to require allegations and proof that defendants acted knowingly or intentionally. RICO Manual § VI.C. And, "as a matter of policy, a RICO prosecution under Section 1962(a) will not be approved unless the RICO defendant is actually charged with the underlying pattern of racketeering activity." RICO Manual § III.A.

There need not be any proof that a RICO defendant or a RICO offense had any nexus to organized crime. See H.J. Inc. v. Northwestern Bell Telephone Co., 492 U.S. 229, 243-49 (1989).

An enterprise is "any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity." 18 U.S.C. §1961(4).

An association-in-fact enterprise is a "group of persons associated for a common purpose of engaging in a course of conduct." United States v. Turkette, 452 U.S. 576, 583 (1981). It "must have at least three structural features: a purpose, relationships among those associated with the enterprise, and longevity sufficient to permit these associations to pursue the enterprise's purpose," but the enterprise "need not have a hierarchical structure or a 'chain of command.'" Boyle v. United States, 556 U.S. 938, 945-49 (2009). An association-in-fact enterprise may include purely illegal criminal associations, and there is no requirement that the enterprise have any economic purpose. Pattern Crim. Jury Instr. 10th Cir. 2.74.3 Comment (2018); National Organization for Women, Inc. v. Scheidler, 510 U.S. 249, 259 (1994).

"The Fourth and Eighth Circuits have held that the government must prove that the association or enterprise exists separate and apart from the pattern of racketeering in which it engages." Model Crim. Jury Instr. 8th Cir. 6.18.1962D Note (2017).

A defendant participates in the conduct of an enterprise's affairs by participating in the operation or management of the enterprise. Reves v. Ernst & Young, 507 U.S. 170 (1993). Congress did not intend to penalize all of the employees of a RICO enterprise, "but only those, who by virtue of their association of employment, play a part in directing the enterprise' affairs. An attorney or other professional does not conduct an enterprise' affairs through run-of-the-mill professional services." Model Crim. Jury Instr. 8th Cir. 6.18.1962A Comment (2017) (citation omitted). Lower level participants may be prosecuted if they act under the direction of upper management, knowingly furthering the aims of the enterprise by implementing management decisions or carrying out the instructions of those in control, or knowingly perform acts, functions, or duties that were necessary to, or helpful in, the operation of the enterprise. Mod. Crim. Jury Instr. 3rd Cir. 6.18.1962C-5 (2013); Reves v. Ernst & Young, id. at 184.

This "operation or management test" applies to the principal. If the defendant is charged as an aider or abettor under 18 U.S.C. § 2, proof that he or she aided or abetted another person who was involved in the operation or management of the enterprise would be sufficient. Mod. Crim. Jury Instr. 3rd Cir. 6.18.1962C-5 Comment (2013). Similarly, the operation or management test would not limit liability for a conspiracy (or Pinkerton liability) for a substantive § 1962(c) offense committed by the defendant's co-conspirator. Id.

Racketeering activity is defined in a very long list of state and federal crimes at 18 U.S.C. § 1961(1). See RICO Manual § II.A.

A pattern of racketeering activity "requires at least two acts of racketeering activity, one of which occurred after the effective date of [the RICO act] and the last of which occurred within ten years (excluding any period of imprisonment) after the commission of a prior act of racketeering activity." 18 U.S.C. § 1961(5). Case law has established that the government must also "show that the racketeering predicates are related and that they amount to or pose a threat of continued criminal activity." H.J. Inc. v. Northwestern Bell Telephone Co., 492 U.S. 229, 239 (1989). See also Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479 (1985).

Unlawful debt is defined in 18 U.S.C. § 1961(6) (basically, debts incurred in connection with the business of gambling or lending money at a usurious rate).

The enterprise and the defendant must be separate and distinct (the distinctness principle) in § 1956(c) and (d) cases. See Cedric Kushner Promotion Ltd. v. King, 533 U.S. 158, 161, 166 (2001); Model Crim. Jury Instr. 8th Cir. 6.18.1962D Note (2017); RICO Manual § II.D.7.

"No RICO criminal indictment or information or civil complaint shall be filed, and no civil investigative demand shall be issued, without the prior approval of the Criminal Division." JM 9-110.101. Guidelines are set forth at JM 9-110.200. See also RICO Manual § I.C.

The conspiracy provision at § 1962(d) does not require proof of an overt act. Note, however, that a conspiracy crime cannot be used as predicate racketeering acts for a RICO conspiracy charge ("conspiracy to conspire"). See RICO Manual § III.D.6.c. Convictions for conspiracy and a substantive count do not merge. Id. § VI.B.

Regarding the extraterritorial application of RICO, see RJR Nabisco, Inc. v. European Cmty., 136 S.Ct. 2090 (2016).

The maximum term of imprisonment is twenty years, or "for life if the violation is based on a racketeering activity for which the maximum penalty includes life imprisonment." 18 U.S.C. § 1963(a). This language arguably imposes a mandatory life sentence where the racketeering act permits a maximum life sentence. The Department of Justice, however, reads this as a maximum, not minimum sentence. RICO Manual § IV.A.

The Sentencing Guidelines range can be readily ascertained by using the Federal Sentencing Guidelines Calculator.

The Apprendi rule applies in any case where the government seeks a sentence of more than twenty years, so "the indictment must track the charging language of the underlying statute." RICO Manual § IV.B.

Title 18 U.S.C. §§ 1963(a)(1)-(3) prescribes mandatory forfeiture of the proceeds and interests obtained from the racketeering activity, and all of the defendant's interests in the charged enterprise. Title 18 U.S.C. § 1963(d) authorizes restraining orders or other actions necessary to preserve the availability of the property for forfeiture. Proposed restraining orders under § 1963(d) must be reviewed and approved by the Criminal Division. See Criminal Resource Manual 2084 (DOJ 1997).

(11/22/19) (permalink)

Ninth Circuit October 2019 civil instruction revisions

The Ninth Circuit has published October 2019 revisions to its Manual of Model Civil Jury Instructions. Some of these are simply the addition of new case authority. The substantive changes are described below:

  • Instruction 1.19 has been renamed "Questions to Witnesses by Jurors During Trial," and is now broken into two options, depending on whether the trial judge wishes to permit questions. The Comment has been rewritten accordingly, and the entire treatment reduced somewhat in size.
  • The Comment to Instruction 7.8 (Jones Act Negligence or Unseaworthiness—Damages—Proof) notes a change in case law; punitive damages are not available in unseaworthiness or Jones Act cases.
  • A new Jones Act instruction, "7.13 Integrated Product Manufacturer's Duty to Warn," apparently occasioned by Air & Liquid Systems Corp. v. Devries, 139 S.Ct. 986, 996 (2019).
  • Two new § 1983 instructions, "9.17A Particular Rights—Fourth Amendment—Unreasonable Search—Judicial Deception," and "9.33B Particular Rights—Fourteenth Amendment—Due Process—State Created Danger."
  • The Comment to Instruction 9.27 ("Particular Rights—Eighth Amendment—Convicted Prisoner's Claim re Conditions of Confinement/Medical Care") has been rewritten, apparently in reaction to Disability Rights Montana v. Batista, 930 F.3d 1090, 1097 (9th Cir. 2019).
  • The Comment to 9.34 ("Qualified Immunity") now briefly references Lane v. Franks, 573 U.S. 228, 243 (2014).
  • The Introductory Comment to Chapter 12. Americans With Disabilities Act, has been rewritten to note the unavailability of compensatory and punitive damages for retaliation.
  • The Comment to 12.1A ("ADA Employment Actions—Actual Disability—Elements") now recognizes an issue regarding whether obesity without an underlying physiological cause is an impairment under the ADA, and the causation section now notes that an "ADA discrimination plaintiff bringing a claim under 42 U.S.C. § 12112 must show that the adverse employment action would not have occurred but for the disability," citing Murray v. Mayo Clinic, 934 F.3d 1101, 1105 (9th Cir. 2019).
  • The Elements list in 12.7 ("ADA—Reasonable Accommodation") has been rewritten.
  • Instruction 12.8 ("ADA—Undue Hardship") now emphasizes that undue hardship is an affirmative defense.
  • Instruction 12.9 ("ADA—Retaliation") has been withdrawn.

A redline/strikeout document showing these changes is posted here.

(11/19/19) (permalink)

Eighth Circuit publishes a Supplement to its 2017 Manual of Model Criminal Jury Instructions

The Eighth Circuit has published a September 2019 Supplement (pdf) (word) with new instructions and revisions to its Manual of Model Criminal Jury Instructions. Instructions included in the Supplement include:

  • 2.08 Defendant's Prior Similar Acts— Where Introduced to Prove an Issue Other Than Identity (Fed. R. Evid. 404(B))
  • 5.06A-1 Conspiracy: Elements (18 U.S.C. § 371)
  • 6.18.924C-1 Firearms—Possession In Furtherance of A Crime of Violence/ Drug Trafficking Offense (18 U.S.C.§ 924(C))
  • 6.18.924C-2 Firearms—Use Or Carry A Firearm During A Crime of Violence/Drug Trafficking Offense (18 U.S.C.§ 924(C)) (former instruction now split in two)
  • 6.18.1956K Conspiracy to Launder Money (18 U.S.C. § 1956(H)) (new)
  • 6.18.2250 Failure to Register (18 U.S.C. § 2250)
  • 6.21.841A Controlled Substances—Possession With Intent to Distribute (21 U.S.C. § 841(A)(1))
  • 6.26.5861 Firearms—Possession of Unregistered Firearms (26 U.S.C. § 5861(D))
  • 9.08B Good Faith (Tax Cases)
  • 9.09 Advice of Counsel

The 2017 edition is posted on the site if you need to see the precise changes. I am guessing that they will soon fold the supplement into one document.

For reasons explained here, the Eighth Circuit § 152(1) instruction is dubious, but that's not addressed in the new supplement.

(11/18/19) (permalink)

A roundup of recent additions and revisions to state jury instructions

The California Criminal Jury Instructions Resource Center has posted a 2019 Supplement to its 2019 instructions ("CALCRIM"). "This Supplement of CALCRIM includes all of the revised Judicial Council of California Criminal Jury Instructions approved by the Judicial Council of California at its September 2019 meeting."

On June 6, 2019, the Supreme Court of Florida issued a per curiam opinion authorizing new and amended standard instructions amending standard criminal jury instructions 3.6(a) (Insanity), 3.6(e)(1) (Involuntary Intoxication Negating Specific Intent), 3.6(e)(2) (Involuntary Intoxication Resulting in Insanity), and 3.6(j) (Entrapment), and creating two new instructions, 3.14 (Scoresheet Findings), and 7.7(c) (Assisted Self-Murder). The changes are discussed in the opinion.

In October 2019 Michigan amended the following Model Civil Jury Instructions:

  • 97.01 (Preliminary Instructions to Prospective Jurors)
  • 97.13 (Judging Credibility and Weight of Evidence)
  • 97.19 (Jurors Not to Discuss Case)
  • 97.33 (Witnesses-Credibility)
  • 97.35 (Statutory Grounds)
  • 97.36 (Definitions)
  • 171.02 (Mental Illness: Involuntary Treatment—Elements and Burden of Proof)

Prior copies of these instructions are archived here.

The Vermont Bar Association's criminal instructions notes:

  • New instruction CR03-061 (Partial Rule 29 Dismissal) (10-22-19), "for situations where one or more charges have been dismissed pursuant to a V.R.Cr.P. 29(a) motion for judgment of acquittal, but where other charges remain for the jury's consideration."
  • Revised DUII instructions (9/20/19).

Prior copies of these instructions are archived here.

(11/12/19) (permalink)

Money Laundering 101

This is one of a series of blog posts surveying federal criminal law topics, grounded for the most part on a study of official federal circuit jury instructions. This one surveys Money Laundering, and introduces the trialdex money laundering tool.

Before we get started, you may wish to look at the previous "101" posts:

Conspiracy
Mail and wire fraud part one (jurisdictional elements)
Mail and wire fraud part two (elements in common)
Obstruction of justice
Hobbs Act
Travel Act

Also, be sure to check out all of the trialdex litigation tools.

Money laundering occurs when a person takes money or property ("proceeds") generated (or represented to be generated) by a "Specified Unlawful Activity" (SUA) and moves, attempts to move, or conspires to move them in a prohibited manner.

The principal federal statutes, 18 U.S.C. §§ 1956 and 1957, define eleven money laundering crimes, which are grouped in four broad categories: domestic money laundering (§ 1956(a)(1)), international money laundering (§ 1956(a)(2)), money laundering stings (reverse money laundering) (§ 1956(a)(3)), and money laundering spending (§ 1957).

You can use the trialdex money laundering tool to identify the specific provision that applies to any particular set of facts. The trialdex money laundering flowchart provides an overview. Before proceeding further, however, you may wish to review the notes below.

All money laundering crimes (except § 1956(a)(2)(B)(ii)) involve "proceeds" of "Specified Unlawful Activities" (SUAs) or, in money laundering stings (reverse money laundering), funds that are represented to be the proceeds of SUAs.

Proceeds are "any property derived from or obtained or retained, directly or indirectly, through some form of unlawful activity, including the gross receipts of such activity." 18 U.S.C. § 1956(c)(9). This provision was enacted in 2009 as a legislative rejection of United States v. Santos, 553 U.S. 507 (2008), where a divided Supreme Court had suggested that proceeds could, at least in some cases, be limited to profits.

Unlawful activity is "activity that constitutes a felony under State, Federal, or foreign law, regardless of whether or not such activity is [an SUA]." 18 U.S.C. § 1956(c)(1).

Specified Unlawful Activity (SUA) is a narrower term, and includes the crimes listed or cross-referenced in 18 U.S.C. § 1956(c)(7). That list includes by reference all of the racketeering predicates listed in 18 U.S.C. § 1961(1). It also includes financial transactions associated with drug crimes, enumerated violent crimes, fraud, smuggling, bribery, sex trafficking; and much more.

In domestic money laundering (§ 1956(a)(1)) cases, the government must prove that there was a financial transaction involving an SUA. A "Financial transaction" is

(A) a transaction which in any way or degree affects interstate or foreign commerce (i) involving the movement of funds by wire or other means or (ii) involving one or more monetary instruments, or (iii) involving the transfer of title to any real property, vehicle, vessel, or aircraft, or (B) a transaction involving the use of a financial institution which is engaged in, or the activities of which affect, interstate or foreign commerce in any way or degree;

18 U.S.C. § 1956(c)(4). Note that this definition adds a commerce element to every money laundering crime involving a financial transaction. "The only serious limitation, in the case law, is that the simple transportation of cash from point A to point B by a single individual may not be a financial transaction. There has to be a transfer or disposition of the cash between two people." The Money Laundering Statutes, U.S. Attorneys' Bulletin 55:5 at 22 (Sept. 2007).

The defendant must know, at the time of the financial transaction, that the money or property represented the proceeds of some form of unlawful activity (as defined in § 1956(c)(1)), but the government need not prove that the defendant knew that the property was an SUA (as defined or cross-referenced in § 1956(c)(7)).

  • If the transaction was conducted with the intent to promote the carrying on of an SUA, the conduct violates § 1956(a)(1)(A)(i).
  • If the transaction was conducted with the intent to engage in conduct constituting a violation of 26 U.S.C. §§ 7201 or 7206 (tax evasion and false returns), the conduct violates § 1956(a)(1)(A)(ii).
  • If the transaction was designed in whole or in part to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of an SUA, the conduct violates § 1956(a)(1)(B)(i).
  • If it was done knowing that the transaction was designed in whole or in part to avoid a transaction reporting requirement under State or Federal law, the conduct violates § 1956(a)(1)(B)(ii).

    "Transaction reporting requirements" include things like Currency Transaction Reports (CTRs) for cash transactions over $10,000, and Reports of International Transportation of Currency or Monetary Instruments (CMIRs) filed by individuals or businesses that transport $10,000 or more in currency or other negotiable instruments into or out of the United States.

Note that the unit of prosecution in money laundering cases is the transaction. The four intents listed above are typically pleaded conjunctively as alternate elements. The Money Laundering Statutes, supra at 26.

International money laundering (§ 1956(a)(2)) differs from domestic money laundering because it does not require a "financial transaction," substituting as the actus reus that the transaction flows from a place in the United States to or through a place outside the United States or to a place in the United States from or through a place outside the United States

It requires proof that the defendant transported, transmitted, or transfered (or attempted or conspired to do so) a monetary instrument or funds. A monetary instrument is "(i) coin or currency of the United States or of any other country, travelers' checks, personal checks, bank checks, and money orders, or (ii) investment securities or negotiable instruments, in bearer form or otherwise in such form that title thereto passes upon delivery." 18 U.S.C. § 1956(c)(5).

There are three international money laundering crimes, determined by the defendant's intent:

  • If the transaction was done with the intent to promote the carrying on of an SUA, the conduct violates § 1956(a)(2)(A).
  • If the transaction involved the proceeds of unlawful activity, knowing that the transaction was designed in whole or in part to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of an SUA, the conduct violates § 1956(a)(2)(B)(i). "Designed" means that the transaction itself was intended to avoid the detection of the funds. Cuellar v. United States, 553 U.S. 550 (2008).

  • If the transaction involved the proceeds of unlawful activity, knowing that the transaction was designed in whole or in part to avoid a transaction reporting requirement under State or Federal law, the conduct violates § 1956(a)(2)(B)(ii).

There is a separate group of money laundering sting (sometimes called "reverse money laundering") provisions that cover circumstances where representations about purported SUA money or property are made by law enforcement officers or cooperators. The representation must be "made by a law enforcement officer or by another person at the direction of, or with the approval of, a Federal official authorized [in 18 U.S.C. § 1956(e)] to investigate or prosecute violations of [18 U.S.C. § 1956]." 18 U.S.C. § 1956(a)(3). As with normal domestic money laundering, the defendant must conduct (or attempt or conspire to conduct) a financial transaction as defined in § 1956(c)(4).

There are three money laundering sting crimes, determined by the defendant's intent:

  • If the transaction was done with the intent to promote the carrying on of an SUA, the conduct violates § 1956(a)(3)(A).
  • If it was done knowing that the transaction was designed in whole or in part to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of an SUA, the conduct violates § 1956(a)(3)(B).
  • If it was done knowing that the transaction was designed in whole or in part to avoid a transaction reporting requirement under State or Federal law, the conduct violates § 1956(a)(3)(C).

The final provision is § 1957, the money spending crime. It must be shown that the defendant knowingly conducted (or attempted or conspired to conduct) a monetary transaction involving money or property derived from an SUA of a value greater than $10,000. "Section 1957 may be used to prosecute someone for using SUA proceeds to buy a car, to invest in securities, or simply to make a deposit into a bank." The Money Laundering Statutes, supra at 29.

A "monetary transaction" is not the same thing as a "financial transaction." It is the "deposit, withdrawal, transfer, or exchange, in or affecting interstate or foreign commerce," of funds or a monetary instrument by, through, or to a financial institution, "including any transaction that would be a financial transaction" but does not include "any transaction necessary to preserve a person's right to representation as guaranteed by the sixth amendment to the Constitution." The principle distinction is that financial transactions require interstate commerce, and monetary transactions require the use of a financial institution. All "financial transactions" are monetary transactions, except those meeting the Sixth Amendment exception.

The defendant must know that the money or property involved in the transaction represented the proceeds of "criminally derived property," that is, "any property constituting, or derived from, proceeds obtained from a criminal offense." 18 U.S.C. § 1957(f)(2). But the government need not prove that the defendant knew it was proceeds of an SUA.

In addition, the transaction must have taken place in the United States, the special maritime and territorial jurisdiction (SMTJ) of the United States, or, if outside the United States or SMTJ, the defendant must have been a "United States person" as defined by 18 U.S.C. § 3077 (excluding § 3077(2)(D))].

"The transaction that created the criminally-derived property must be distinct from the charged money laundering transaction, because § 1957 criminalizes transactions in criminally-derived property, not the transactions that create the property—the latter transactions comprise the underlying specified activity itself." Fed. Crim. Jury Instr. 7th Cir. 18 U.S.C. § 1957 Definitions Comment (2018).

Conspiracies to violate §§ 1956 and 1957 may be charged under 18 U.S.C. §§ 371 or 1956(h). If charged under § 1956(h), proof of an overt act in furtherance of the conspiracy is not required. Whitfield v. United States, 543 U.S. 209, 210 (2005).

Section 1956 crimes are twenty year felonies. Section 1957 crimes are ten year felonies. The Sentencing Guidelines range can be readily ascertained by using the Federal Sentencing Guidelines Calculator.

(11/10/19) (permalink)

 
 
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