18 Apr 2016
Stefan Cassella of Asset Forfeiture Law, LLC discusses the conviction of a defense attorney for conspiring with a client to launder his drug money. The attorney’s knowledge of the source of the money and the purpose of the laundering transaction may be inferred from his representation of the client, his structuring of the transactions conducted on the client’s behalf, and his false statements about the source of the money.
[United States v. Crozier, ___ Fed. Appx. ___, 2016 WL 827773 (2nd Cir. Mar. 3, 2016).]
Defendant, a defense attorney, was convicted of conspiring with a former client, a drug dealer, to launder the client’s drug proceeds. He appealed, arguing that the evidence was insufficient to prove that he knew the money in question was the proceeds of criminal activity, or that the purpose of the transactions that he conducted on the client’s behalf was to conceal or disguise such proceeds.
Defendant’s former client was the Government’s principal witness at trial. He testified that he approached Defendant about investing $100,000 of his drug proceeds in a legitimate business and that Defendant did so on his behalf. Although the client did not expressly tell Defendant that the $100,000 constituted drug proceeds, the panel held that the jury could have reasonably inferred Defendant’s knowledge from the following facts: Defendant represented the client on the drug charges; the client testified that Defendant knew “everything” about his illegal drug business; and Defendant’s admission that the client was “up to his neck in dealing drugs.”
Moreover, when Defendant made the investment for his client, he did so by depositing the money in small amounts in various bank accounts before transferring it to the solar energy company in which the client wished to invest. Defendant explained to the client that he did this both to avoid reporting obligations and to ensure that authorities did not notice “that type of money” coming in.
Finally, when Defendant made the investment, he falsely told the solar energy company that the money came from a lawsuit award.
With respect to the concealment element, the panel rejected Defendant’s argument that because the investment was made in the client’s name, there was no evidence that the purpose of the transaction was to conceal or disguise. To prove concealment money laundering, the court said, the Government need only prove that the transaction was designed to conceal or disguise one of the attributes of the criminal proceeds, not all of them.
Here, although the transaction identified the client as the investor, the evidence was sufficient to show that the purpose of the transaction was to conceal or disguise the nature and the source of the money being invested.
Defendant also appealed his conviction on a separate count of attempted money laundering. The evidence was that the client’s mother, then working as an undercover agent for the Government, approached Defendant, told him that she had “found” $11,000 of her son’s drug proceeds, and asked Defendant if he would hold the money so that her son would have the money when he got out of prison. Defendant agreed to do so, and gave the client’s mother a receipt, admonishing her not to give the receipt to her son “because then they’ll know he has money.”
That evidence, combined with the earlier incidents of money laundering, was sufficient, the panel held, to support the jury’s verdict on the attempt charge.
Comment: Convictions of defense attorneys for laundering the proceeds of their clients’ illegal activity are rare but unfortunately are not unknown. Another recent case involving an attorney and his former client was United States v. George, 761 F.3d 42, 50 (1st Cir. 2014) (circumstantial evidence established that lawyer who laundered money for former client, knowing that he had retained proceeds of past crimes, knew he was laundering criminally derived property, even though he also knew former client had legitimate assets as well; evidence of “bad acts” committed with the former client was admissible to illustrate the relationship).
Many money laundering defendants have made the “I conducted the transaction in my own name, so how could I have concealed anything” argument. Most have been unsuccessful.
Stefan Cassella, Asset Forfeiture Law, LLC
Count reading this article to your CPD minutes, by signing up to our CPD WalletFREE CPD Wallet