RECORD IMPOUNDED

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-1838-16T1

STATE OF NEW JERSEY,

Plaintiff-Appellant,

v.

JOSEPH J. TALAFOUS, JR.,

Defendant-Respondent.

_____________________________

Submitted May 23, 2017 – Decided

Before Judges Reisner and Mayer.

On appeal from the Superior Court of New 

Jersey, Law Division, Hudson County, 

Indictment No. 16-05-0072.

Christopher S. Porrino, Attorney General, 

attorney for appellant (Joseph A. Glyn, of 

counsel and on the brief).

Miller, Meyerson & Corbo, attorneys for 

respondent (Gerald D. Miller, of counsel and 

on the brief).

PER CURIAM

By leave granted, the State appeals from an October 13, 2016 

order granting defendant's motion to dismiss Count One of 

Superseding Indictment No. 16-05-0072-S, which charged defendant 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

This opinion shall not "constitute precedent or be binding upon any court." 

Although it is posted on the internet, this opinion is binding only on the 

parties in the case and its use in other cases is limited. R.1:36-3.

June 13, 2017
2 A-1838-16T1

with first-degree money laundering, N.J.S.A. 2C:21-25(b)(2)(a), 

and from a November 14, 2016 order denying reconsideration. We 

affirm both orders. 

In the nineteen-count indictment, the State charged 

defendant, an attorney, with a litany of offenses arising from his 

alleged theft of funds from clients.1 The top count of the 

indictment charged defendant with allegedly "laundering" the 

stolen funds, by depositing them or directing that they be 

deposited into either his attorney trust account or his attorney 

business account "knowing that the transactions were designed in 

whole or in part to conceal or disguise the nature, location, 

source, ownership or control of the said client monies" in an 

amount "in excess of $1,500,000." 

Before discussing the Grand Jury evidence, it is helpful to 

consider the money laundering statute, and the case law construing 

it. The section with which defendant was charged prohibits a 

person from "engag[ing] in a transaction involving property known 

 

1 The indictment also included multiple counts of second-degree 

theft by unlawful taking, N.J.S.A. 2C:20-3; second-degree theft 

by failure to make required disposition of property, N.J.S.A.

2C:20-9; second-degree misapplication of entrusted property, 

2C:21-15; second-degree theft by deception, N.J.S.A. 2C:20-4; and 

third-degree filing a false or fraudulent gross income tax return, 

N.J.S.A. 54:52-10. Prior to the indictment, defendant had been 

disbarred by consent after admitting that he knowingly 

misappropriated client funds. In re Talafous, 222 N.J. 127 (2015).
3 A-1838-16T1

. . . to be derived from criminal activity . . . knowing that the 

transaction is designed in whole or in part . . . to conceal or 

disguise the nature, location, source, ownership or control of the 

property derived from criminal activity[.]" N.J.S.A. 2C:21-

25(b)(2)(a). 

As expressed in N.J.S.A. 2C:21-23, the money laundering 

statute was designed to "stop the conversion of ill-gotten criminal 

profits, . . . and punish those who are converting the illegal 

profits, those who are providing a method of hiding the true source 

of the funds, and those who facilitate such activities." The 

Legislature emphasized the "need to deter individuals and business 

entities from assisting in the 'legitimizing' of proceeds of 

illegal activity." N.J.S.A. 2C:21-23(e). 

The money laundering statute is intended to be construed 

broadly to serve its purposes. State v. Diorio, 216 N.J. 598, 625 

(2016). However, it requires proof of something more than an 

underlying crime. Id. at 622. "[T]the statute requires two 

'transactions,' (1) the underlying criminal activity generating 

the property, and (2) the money-laundering transaction where that 

property is either (a) used to facilitate or promote criminal 

activity, or (b) concealed, or 'washed.'" State v. Harris, 373 

N.J. Super. 253, 266 (App. Div. 2004), certif. denied, 183 N.J.

257 (2005). The Supreme Court recently reaffirmed that analysis 
4 A-1838-16T1

in Diorio, supra, 216 N.J. at 622 (quoting Harris, supra, 373 N.J. 

Super. at 266). 

The federal courts have interpreted the federal money 

laundering statute similarly. See 18 U.S.C.A. § 1956(a)(1). The 

statute does not prohibit "non-money laundering acts such as a 

defendant's depositing the proceeds of unlawful activity in a bank 

account in his own name and using the money for personal purposes." 

United States v. Conley, 37 F.3d 970, 979 (3d Cir. 1994). 

Money laundering must be a crime distinct from 

the crime by which the money is obtained. The 

money laundering statute is not simply the 

addition of a further penalty to a criminal 

deed; it is a prohibition of processing the 

fruits of a crime or of a completed phase of 

an ongoing offense.

[United States v. Abuhouran, 162 F.3d 230, 233 

(3d Cir. 1998) (citing Conley, supra, 37 F.3d 

at 980).]

In this case, the motion judge reasoned that placing the 

money in defendant's attorney trust account (ATA) was not a crime, 

because ATA money is by definition not the attorney's money and 

is held for the client's benefit. She further reasoned that 

defendant's crime was taking the money out of the account and 

using it for himself, and the State had not presented evidence of 

a subsequent crime. Hence, she found that the State failed to 

present evidence establishing each element of the money laundering 

charge. See State v. Morrison, 188 N.J. 2, 12 (2006) ("A trial 
5 A-1838-16T1

court . . . should not disturb an indictment if there is some 

evidence establishing each element of the crime to make out a 

prima facie case."). The judge stated:

[A]s to the money laundering Count . . . I 

don't see that . . . [some] evidence is there 

. . . analyzing it under Harris, because an 

attorney trust account is where that money 

should have been. It should have . . . 

remained there until it went for the benefit 

of the beneficiary. But the simple act of 

taking it and misappropriating it, or stealing 

it, . . . [is] a crime for which he is charged 

. . . and he will have to answer to those 

charges. But I just don't see . . . [some] 

evidence for the money laundering.

Unless the trial court acts under a "misconception of the 

law," the "decision to dismiss an indictment is left to the sound 

discretion of the trial court, and will only be overturned upon a 

showing of a mistaken exercise of that discretion." State v. 

Lyons, 417 N.J. Super. 251, 258 (App. Div. 2010) (citation 

omitted). We conclude that the motion judge reached the correct 

result and therefore we find no abuse of discretion here. 

We do not necessarily agree with the judge that, in all of 

the cases presented to the Grand Jury, placing the money in 

defendant's ATA was appropriate. In some of the cases, that 

transfer in itself constituted theft or misappropriation, because 

defendant had no lawful reason to transfer the money from the 

client's accounts to any of his accounts and there was some 
6 A-1838-16T1

evidence of his unlawful purpose in making the transfer. In other 

cases, where defendant initially properly placed funds in his ATA, 

we agree with the judge that his subsequent theft of the money 

from his ATA was not money laundering. Most importantly, while 

the State presented some evidence that defendant stole or 

misappropriated his clients' money in all of the cases, the State 

failed to present evidence that he laundered the funds in any of 

the cases. A brief review of the State's Grand Jury evidence will 

illustrate our conclusion. 

In the first case, the State presented evidence that defendant 

held a power of attorney (POA) for Peter Pasinosky, an 

incapacitated person, and used the POA to wrongfully transfer 

money from Pasinosky's bank accounts into defendant's ATA or 

attorney business account (ABA). After Pasinosky's death, 

defendant used his position as co-executor of Pasinosky's estate 

to misappropriate estate funds, which he placed in his ATA or ABA. 

The State did not produce evidence that defendant moved money from 

his ATA into his ABA, but only that he took Pasinosky's funds and 

put it into one or the other of those accounts and then used the 

money for his own purposes. As in all of the cases, the State 

produced no evidence of what those purposes were or what became 

of the money after it left defendant's ATA or ABA. 
7 A-1838-16T1

In answer to a question from one of the Grand Jurors, the 

prosecutor told the Grand Jury that "it's not so relevant . . . 

that it's the attorney trust account or the attorney business 

account. These were accounts maintained by [defendant] and he had 

full control of these accounts." She explained that, for purposes 

of the theft charges, what was important was "that money is removed 

from [the victim's accounts] and moved to accounts that [defendant] 

had control over." The State presented no evidence that the theft 

was concealed (as opposed to committed) through placement of the 

money in defendant's accounts. 

The next matter involved the Jared Sharengo Trust, which 

contained the proceeds of a settlement for a minor, resulting from 

a lawsuit over his father's death. Defendant controlled the trust 

funds and misappropriated some of the money. However, the State 

produced no evidence that any money was moved from defendant's ATA

into his ABA, or that he used either account to "launder" any 

funds. Rather, the State simply produced testimony that defendant 

took about $400,000 of the Sherango Trust money and, in the 

detective-witness's conclusory terms, used it "for his own 

purposes." As presented to the Grand Jury, there was no evidence 

that defendant committed any crime beyond the initial theft or 

misapplication of the entrusted funds, which under the facts 

presented, was completed when he transferred the money to his own 
8 A-1838-16T1

accounts without any legal justification and with an unlawful 

purpose. 

Similarly, the State presented evidence to the Grand Jury 

that defendant stole about $316,000 from the Estate of Mildred 

Colavito, while he was the estate executor. Again, the State 

presented evidence that defendant transferred money from the 

Estate into either his ABA or his ATA. There was no evidence of 

any second transaction, between the two accounts or from either 

account to a third account belonging to defendant. There was no 

evidence as to how placing the money in either the ABA or ATA 

facilitated or concealed the theft of the money from the Estate, 

or that defendant committed any further crime which the prior 

deposits helped to conceal or facilitate. To the contrary, 

according to the proofs the State presented, transferring the 

money into those accounts, without legal justification, 

constituted the misapplication or theft of the funds.2 

The State next presented evidence that defendant stole funds 

from the Estate of Michael Zaccaria while serving as the estate's 

attorney. Defendant was hired by the decedent's family to collect 

 

2 The State also presented evidence that defendant committed tax 

fraud by telling his accountant that some of the deposited funds 

were "loans" from the Estate. However, there was no evidence that 

putting the money in the ATA or ABA made that story more plausible 

or otherwise facilitated or concealed the tax fraud. 
9 A-1838-16T1

the proceeds of several life insurance policies. Defendant did 

so and deposited some of the proceeds in his ATA. He disbursed 

some of the money to the beneficiaries. However, he moved about 

$183,000 of those funds into his ABA, noting on some of the checks 

that they represented partial payment for his fees or reimbursement 

of expenses. However, he never billed the estate or the 

beneficiaries for those amounts. He also used about $222,000 of 

the insurance proceeds, which he had deposited in his ATA, for his 

personal use. 

The State produced no testimony or other evidence that it was 

wrongful or illegal for defendant to have initially placed the 

collected funds in the ATA. As presented to the Grand Jury, the 

crimes he committed consisted of wrongfully taking the money out 

of the ATA, either to pay for phantom "fees" which were deducted 

and placed in the ABA, or directly taken from the ATA and spent 

for defendant's benefit in unspecified ways.

The State also presented evidence that, while acting as the 

attorney for the Estate of Maria Matarazzo, defendant stole money 

from her estate. According to the State's evidence to the Grand 

Jury, defendant stole the money by convincing the estate executor 

that he needed about $335,000 to pay either his own legal fees or 

to pay other fees that he would expend on behalf of the estate. 

The Grand Jury testimony was somewhat vague, but construing it 
10 A-1838-16T1

most favorably to the State, it would support inferences that the 

estate was involved in litigation over property in New York and 

defendant falsely represented to the estate executor that the 

"fees" were needed to pay counsel in that litigation. Instead of 

using the money for the New York litigation, defendant used the 

money for his own purposes. Again, there was no evidence that 

putting the money in his ABA facilitated or concealed defendant's 

theft of the money. 

On this appeal, the State acknowledges that N.J.S.A. 2C:21-

25(b) requires proof of two transactions, the initial crime, 

followed by the "laundering." See Harris, supra, 373 N.J. Super.

at 266. The State argues that defendant engaged in two 

transactions, because when he stole the money from his clients' 

estate or trust accounts, he placed the funds in his attorney 

trust or business accounts "to give the stolen money an air of 

legitimacy." However, the State produced no evidence before the 

Grand Jury to establish that putting money in either account served 

to "conceal or disguise the nature, location, source, ownership 

or control of the property derived from criminal activity." 

N.J.S.A. 2C:21-25(b)(2)(a). In fact, in most of the cases, the 

State's evidence, as presented and explained to the Grand Jurors, 

was that defendant stole the money when he placed it in his own 
11 A-1838-16T1

accounts rather than leaving it in the clients' trust or estate 

accounts. 

Notably, the Grand Jurors twice asked for clarification as 

to how defendant's conduct constituted money laundering. At one 

point, a juror asked: "Can you explain the rationale for the 

money laundering? What's the rationale for the first indictment 

[count one]? It's not very clear." The prosecutor did not answer 

the questions, other than by referring to the statute in general 

terms and telling the jurors to read the indictment.

Because the State did not present some evidence to support 

each of the elements of the money laundering charge, the trial 

court did not abuse its discretion in dismissing Count One of the 

superseding indictment. See Morrison, supra, 188 N.J. at 12. 

Affirmed.