Source: https://www.scribd.com/document/64736038/Siriwans-DOJresponse
Timestamp: 2017-02-26 06:52:03
Document Index: 734929396

Matched Legal Cases: ['§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 78', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1957', '§ 1959', '§ 2', '§ 641', '§ 317', '§ 401', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 78', '§ 1956', '§ 1957', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1957', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 78', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§1956', '§ 1956', '§ 17', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§\n1956', '§ 1956', '§ 1956', '§ 641', '§ 641', '§ 1956', '§ 1956', '§ 1956', '§ 641', '§ 1956', '§ 1956', '§ 1956', '§ 2', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 20', '§ 317', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 2', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 401', '§ 401', '§ 402', '§ 402', '§ 1959', '§ 1956', '§ 403', 'art 3', '§1956', 'art 3', '§403', '§ 403', '§ 1956', '§ 1956', '§ 403', '§ 403', '§ 1956']

Siriwans_DOJresponse | Money Laundering
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ANDRÉ BIROTTE JR. United States Attorney ROBBERT E. DUGDALE Assistant United States Attorney Chief, Criminal Division JONATHAN E. LOPEZ (SBN 210513) Deputy Chief, Asset Forfeiture and Money Laundering Section Criminal Division United States Dept. of Justice 1400 New York Ave, N.W. Bond Building, Room 2200 Washington, D.C. 20005 Telephone: (202) 307-0846 Facsimile: (202) 616-2547 Email: jonathan.lopez@usdoj.gov Attorneys for Plaintiff UNITED STATES OF AMERICA UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION ) ) Plaintiff, ) ) v. ) ) JUTHAMAS SIRIWAN, ) aka “the Governor,” and ) JITTISOPA SIRIWAN, ) aka “Jib,” ) ) Defendants. ) ) ______________________________) UNITED STATES OF AMERICA, CR No. 09-81-GW GOVERNMENT'S RESPONSE IN OPPOSITION TO DEFENDANTS’ MOTION TO DISMISS THE INDICTMENT; DECLARATION OF JONATHAN E. LOPEZ Hearing Date: Hearing Time: October 20, 2011 8:30 a.m.
Plaintiff United States of America, through its counsel of record, hereby files its Response in Opposition to defendants’ Motions to Dismiss the Indictment. The government’s Opposition
is based upon the attached memorandum of points and authorities, the attached declaration of Jonathan E. Lopez, the files and records in this matter, as well as any evidence or argument presented at any hearing on this matter.
Case 2:09-cr-00081-GW Document 67
Filed 09/09/11 Page 2 of 57 Page ID #:742
Filed 09/09/11 Page 3 of 57 Page ID #:743
1 2 3 4 5 6 7 8 9 10 2. 11 12 3. 13 14 15 B. 16 1. 17 2. 18 19 20 21 22 23 24 25 3. 26 27 2. D. C. 4. DESCRIPTION:
TABLE OF AUTHORITIES.......................................iv-vii MEMORANDUM OF POINTS AND AUTHORITIES............................1 I. II. SUMMARY OF ARGUMENT......................................1-6 DISCUSSION..............................................6-49 A. THE INDICTMENT PROPERLY CHARGES LEGITIMATE AND FAMILIAR MONEY LAUNDERING OFFENSES..........................6-22 1. Defendants’ Claims Ignore a Fundamental Aspect of 18 U.S.C. § 1956(a)(2)(A): There Is No Requirement For Separate Ill-Gotten Gains or “Proceeds” to Be Obtained Before the Statute Can Be Charged....7-13 “Double Duty” Is Permissible Under 18 U.S.C. § 1956(a)(2)(A); Contrary to Defendants’ Assertions There Is No Merger Problem...................13-16 The Promotion Aspect of 18 U.S.C. § 1956(a)(2)(A) Is Properly Charged..........................17-21 The Rule of Lenity Is Not Implicated by These Familiar and Often-Used Charges..............21-22
THE SUAS ARE APPROPRIATELY CHARGED IN THIS CASE...22-30 The FCPA Is a Proper SUA.....................22-25 The Thai Offenses Defendants Promoted Fit Squarely Within 18 U.S.C. § 1956(C)(7)(B)(iv).........26-30
THE MONEY LAUNDERING STATUTES PROVIDE FOR EXTRATERRITORIAL JURISDICTION FOR THE STATUTES CHARGED...........................................31-35 THIS COURT IS THE PROPER FORUM FOR THE INDICTMENT.35-49 1. Defendants' Statutory Construction Analysis Fails: The Presumption Against Extraterritoriality Has Been Rebutted by Section 1956's Plain Text...36-38 Application of § 1956 (a)(2)(A) to Defendants Does Not Violate International Law................38-45 Section 9 of Thailand’s Penal Code Is Not an Assertion by Thailand of Sole Jurisdiction Over The Offenses in The Indictment...............45-49
III. CONCLUSION................................................49 28 iii
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1 TABLE OF AUTHORITIES 2 CASES: 3 Blockburger v. United States, 284 U.S. 299 (1932) . . . . . . 4 5 6 7 8 The Case of the S.S. "Lotus," P.C.I.J., Ser. A, No. 10 (1927) 9 10 11 12 United States v. $125,938.62, 537 F.3d 1287 (11th Cir. 2008) 13 14 15 16 17 18 19 20 21 United States v. Corey, 232 F.3d 1166 (9th Cir. 2000) . . . . 22 23 24 25 26 27 United States v. Hall, 613 F.3d 249 (D.C. Cir. 2010) 28 iv . . . . 20 United States v. Esfahani, 2006 WL 163025 (N.D. Ill. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States v. Faust, 401 F.3d 1107 (9th Cir. 1988) . . . . United States v. Felix-Gutierrez, 940 F.2d. 1200 . . . . 15 30 46 United States v. Bodmer, 342 F. Supp. 2d 176 (S.D.N.Y. 2004) 4, 16, 23, 24, 32 United States v. Bowman, 260 U.S. 94 (1922) . . . . . . . . . United States v. Bush, 626 F.3d 527 (9th Cir. 2010) . . . . . United States v. Castle, 925 F.2d 831 (5th Cir. 1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 12 24 United States v. 2291 Ferndown Lane, 2011 WL 2441254 (W.D. Va. 2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 United States v. Anvari-Hamedani, 378 F. Supp. 2d 821 (N.D. Ohio 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 29 United States v. Capligner, 339 F.3d 226 (4th Cir. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States v. All Assets Held At Bank Julius Baer, 571 F. Supp. 2d 1 (D.D.C. 2008) . . . . . . . . . . . . . . . . . . 19 28 46 Morrison v. National Australia Bank, 130 S.Ct. 2869 (2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Munoz v. Ashcroft, 339 F.3d 950 (9th Cir. 2003) . . . . . . . Murray v. Schooner the Charming Betsy, 6 U.S. (2 Cranch) 64 (1804) . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 37 37 16
United States v. Green et al., CR-08-59-GW (CDCA 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . 8, 9, 16, 27
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United States v. Hamilton, 931 F.2d 1046 (2d Cir. 1991) . . . United States v. Hill, 279 F.3d 731 (9th Cir. 2002) . . . . .
9, 13 35 16 30
3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 v STATUTES: 15 U.S.C. § 78dd-1, et seq. . . . . . . . . . . . . . . . . 2, 16 18 U.S.C. § 1956 . . . . . . . . . . . . . . . . . . . . . . . 5 32 United States v. Trejo, 610 F.3d 308 (5th Cir. 2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States v. Vasquez-Velasco, 15 F.3d 833 (9th Cir. 1994) United States v. Yakou, 428 F.3d 241 (D.D.C. 2005) . . . . . 19 39 35 37 United States v. Piervinanzi, 23 F.3d 670 (2d Cir. 1994), cert. denied, 513 U.S. 900 (1994) . . . . . . . . . . . . . . 10-12, 14 United States v. Savage, 67 F.3d 1435 (9th Cir. 1995) . . . . 2, 12, 14, 19 United States v. Melvyn Arnold Stein, 1994 WL 285020 (E.D. La. Jun. 23, 1994) . . . . . . . . . . . . . . . . . . . . . . . 33 United States v. Montoya, 945 F.2d 1068 (9th Cir. 1991) . 20, 21 United States v. Lazarenko, 564 F.3d 1026 (9th Cir. 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . 26, 27, 29 United States v. Lloyds TSB Bank Plc, 639 F. Supp. 2d 314 (S.D.N.Y. 2009) . . . . . . . . . . . . . . . . . . . . . . . 34 United States v. Kimbrew, 406 F.3d 1149 (9th Cir. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States v. Kranovich, 401 F.3d 1107 (9th Cir. 2005) . .
United States v. Krasinski, 545 F.3d 546 (7th Cir. 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . 12, 14, 19
United States v. Moreland, 622 F.3d 1147 (9th Cir. 2010) . . . . . . . . . . . . . . . . . . . . . . . . . 12, 14, 18, 19
United States v. Yousef, 327 F.3d 56 (2d Cir. 2003) . . . . .
18 U.S.C. § 1956(a) . . . . . . . . . . . . . . . . . . . . . 18 U.S.C. § 1956(a)(1)
. . . . . . . . . . . . . . . . 11-13, 21 3, 8, 12, 15, 17, 18, 20
18 U.S.C. § 1956(a)(1)(A) . . . . . . .
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18 U.S.C. § 1956(a)(2)
18 U.S.C. § 1956(a)(2)(A) . 1-4, 7-19, 21-23, 25, 32, 35, 37, 38, 44, 47 18 U.S.C. § 1956(a)(2)(B) . . . . . . . . . . . . . . . . . . 12
4 18 U.S.C. § 1956(b) . . . . . . . . . . . . . . . . 5, 31, 33, 34 5 18 U.S.C. § 1956(b)(2) 6 18 U.S.C. § 1956(b)(2)(A) . . . . . . . . . . . . . . . . 7 18 U.S.C. § 1956(c)(7)(B)(iv) . . . . . . . . . . . . 8 18 U.S.C. § 1956(c)(7)(D) . . . . . . . . . . . . . . . . . 3, 25 9 18 U.S.C. § 1956(c)(7)(D) . . . . . . . . . . . . . . . . . . 10 18 U.S.C. § 1956(f) . . . . . . . . . . 11 18 U.S.C. § 1956(h) . . . . . . . . . . . . . . 1, 23, 32, 38, 48 12 18 U.S.C. § 1957 13 18 U.S.C. § 1959 14 18 U.S.C. § 2 . . . . . . . . . . . . . . . . . . . 1, 10, 31, 34 15 18 U.S.C. § 641 . . . . . . . . . . . . . . . . . . . . . . . 16 Pub. L. 107-56, 115 Stat. 272, § 317 17 Pub.L. 102-550, Title XV (Oct. 28, 1992) 18 Pub.L. 109-177 (Mar. 6. 2006) . . . . . . . . . . . . . . . . 19 Pub.L. 95-213, Title I (Dec. 19, 1977) 20 21 22 23 24 OTHER AUTHORITIES: 25 26 27 28 vi Extradition Treaty with Thailand, U.S.-Thail, Dec. 14, 1983, S. TREATY DOC. NO. 98-16 (1984) . . . . . . . . . . . . . . . . 47 H.R. Rep. No. 107-250, at 55 (2010) . . . . . . . . . . . 26, 28 RULES: Fed. R. Crim. P. 12(b)(3) . . . . . . . . . . . . . . . . . . . 1 Fed. R. Crim. P. 7(c) . . . . . . . . . . . . . . . . . . . . . 6 . . . . . . . . . . . 24 25 . . . . . . . . . . 25 . . . . . . . . . . . . 33 30 . . . . . . . . . . . . . . . . . . . . . . 40 . . . . . . . . . . . . . . . . . . . . . 3, 10 5, 31-35, 37, 38, 40, 43 25 3-5, 26-30 34, 35 . . . . . . . . . . . . . . . . . . 33-35
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Restatement (Third) of Foreign Relations Law of the United States § 401 - 403 (1987) . . . . . . . . . . . . 38-40, 41, 44, 46-47
S. Rep. No. 433, 99th Cong., 2d Sess., at 11 (Sept. 3, 1986) 11, 32, 33 Thai Penal Code Section 147 to Section 166 . . . . . . . . . 46
5 Thai Penal Code Section 149 . . . . . . . . . . . . . . 6 Thai Penal Code Section 152 . . . . . . . . . . . . . 4, 5, 27-29 7 Thai Penal Code Section 9 . . . . . . . . . . . . . . . . . 44-46 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 vii JOURNALS: M. Hagler, International Money Laundering and U.S. Law: A Need to “Know-Your-Partner,” 31 Syracuse J. Of Int’l Law & Com. 227, 228 (2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 4, 5, 27
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MEMORANDUM OF POINTS AND AUTHORITIES I. SUMMARY OF ARGUMENT On January 28, 2009, a federal grand jury returned an eightcount sealed Indictment against defendants.1 The Indictment
charged defendants with one count of conspiring to conduct international wire transfers intended to promote specified unlawful activities in violation 18 U.S.C. §§ 1956(h) and (a)(2)(A), (Count 1); and seven substantive international promotion money laundering offenses, in violation of 18 U.S.C. §§ 1956(a)(2)(A) and 2, (Counts 2-8). a forfeiture count (Count 9). Defendants have moved to dismiss the Indictment pursuant to Rule 12(b)(3) of the Federal Rules of Criminal Procedure on various perceived substantive and jurisdictional deficiencies. Upon analysis of defendants’ arguments, it is quickly evident that, in support of their positions, defendants routinely conflate and confuse multiple statutes, interpret and argue the elements of uncharged statutes, and ignore case law relevant to the statutes actually charged. In sum, defendants argue that (1) the Indictment fails to allege a distinct money laundering violation because of what defendants refer to as a “double duty” issue2 and that the The Indictment also includes
The Indictment against defendants was unsealed on January 19, 2010. That is, the payments charged in the Indictment are part of the FCPA scheme and, therefore, cannot also be part of a money laundering offense. 1
Filed 09/09/11 Page 9 of 57 Page ID #:749
government is exploiting the “ambiguity” in the phrase “to promote the carrying on” of specified unlawful activity; (2) the specified unlawful activities relating to the money laundering charges are improper and that the government is really trying to charge Foreign Corrupt Practices Act (“FCPA”)3 offenses; (3) there are jurisdictional issues with the charges in the Indictment; and (4) Thailand is the proper forum to review these allegations, not the United States. Each of defendants’
arguments are wholly without merit and Defendants’ motion should be denied. Throughout the motion to dismiss, defendants focus on and cite case law concerning the wrong statutes, and ignore the clear dictates of the statutes charged. a prime example of this infirmity. Defendants’ first argument is It is perfectly permissible
under § 1956(a)(2)(a) for acts (such as wire transfers) that are an integral part of the underlying specified unlawful activity (in this case FCPA offenses), to also serve as the basis for a distinct § 1956(a)(2)(A) money laundering offense. See United
States v. Savage, 67 F.3d 1435, 1440 (9th Cir. 1995). Defendants’ arguments of perceived merger and “double duty” issues may pertain to offenses charged under other provisions of the money laundering laws where proceeds of an underlying offense must be first be generated before a money laundering charge can apply, but not § 1956(a)(2)(A), which has no such requirement. Inexplicably, defendants do not spend any time in their motion discussing or analyzing § 1956(a)(2)(A). Rather, in what appears
15 U.S.C. § 78dd-1, et seq. 2
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to be an attempt to lump together all money laundering statutes, defendants analyze and cite cases that discuss the elements of either § 1956(a)(1)(A) or § 1957 (provisions which might present merger issues, and do have a ill-gotten gains or “proceeds” requirement).4 the Indictment. Defendants’ claims of “ambiguity” within the promotional aspect of the money laundering statutes are equally flawed. There is no ambiguity surrounding promotion, and the Indictment’s charges in this area are consistent with well-developed case law in the Ninth Circuit. Defendants, however, once again fail to Neither of those statutes, however, is charged in
rely on this case law and instead retreat to a litany of irrelevant and out-of-circuit § 1956(a)(1)(A) cases for support. Defendants’ second claim, that the specified unlawful activities set forth in the Indictment are improper or otherwise deficient similarly relies on muddled interpretation of the statutes involved. There are two specified unlawful activities
(each, an “SUA”) that defendants are alleged to have intended to promote through their international wire transfers: (1) violations of the FCPA, specifically enumerated as an SUA at 18 U.S.C. § 1956(c)(7)(D); and (2) an offense against a foreign nation – bribery of a public official, or the misappropriation, theft, or embezzlement of public funds by or for the benefit of a
Indeed, only two of the ten cases they cite for their incorrect propositions in this area even relate to § 1956(a)(2)(A) (United States v. Savage, 67 F.3d 1435 (9th Cir. 1995) and United States v. Moreland, 622 F.3d 1147 (9th Cir. 2010)). In these cases, defendants fail to point to anything relating to such discussions. They instead focus on other, irrelevant, holdings. 3
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public official, specifically enumerated as an SUA at 18 U.S.C. § 1956(c)(7)(B)(iv). The Indictment sets forth two different Thai
statutes that apply under § 1956(c)(7)(B)(iv): Thai Penal Code Section 152, and Thai Penal Code Section 149. corruption offenses in Thailand. Defendants’ arguments against the FCPA-SUA are based primarily on the same misplaced and incorrect merger arguments they set forth in their first claim. As noted above, the money Both are
laundering offenses charged in the Indictment are familiar and appropriately charged, and distinct from the FCPA offenses committed by the Greens. Contrary to defendants’ arguments, the
government is not charging the defendants with FCPA violations. Defendants are being charged with the separate and distinct crime of promoting the Greens' FCPA violations, which serve as one of the two “specified unlawful activities” in this case. Inexplicably, defendants simply ignore case law directly on point, United States v. Bodmer, 342 F. Supp. 2d 176 (S.D.N.Y. 2004), where similarly, a defendant - who could not be charged with FCPA offenses – was charged with conspiring to commit international promotion money laundering, the same charge in the instant Indictment. In Bodmer, the court held that the
defendant’s exemption from being criminally sanctioned for FCPA offenses is “irrelevant to proving that he transported money in furtherance of FCPA violations.” Id. at 191. As the court in
Bodmer reaffirmed, § 1956(a)(2)(A) money laundering is a completely distinct offense from the FCPA containing different elements. Id.
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As for defendants’ claims against the second SUA, defendants appear to concede that Thai Penal Code Section 149 is properly alleged in the Indictment, as they only take issue with the portion of the Indictment that relates to Thai Penal Code Section 152 and make no argument against Thai Penal Code Section 149. With respect to Thai Penal Code Section 152, defendants claim that the government has mis-translated the code and that it does not really relate to an embezzlement offense, but rather, an honest services offense. Defendants’ miss the point that even
under their interpretation, Thai Penal Code Section 152 is still a corruption offense in which the foreign official is obtaining a benefit as a result of her official action. This fits squarely
within the SUA of “the misappropriation, theft, or embezzlement of public funds by or for the benefit of a public official,” as specifically enumerated as an SUA at 18 U.S.C. § 1956(c)(7)(B)(iv) Defendants’ third argument, their jurisdictional claims, similarly suffer from the issue of analyzing the wrong statute. Defendants’ claims are based on the civil penalty jurisdiction laid in 18 U.S.C. § 1956(b), and completely ignore the criminal jurisdictional authority for § 1956 offenses specifically set forth explicitly in 18 U.S.C. § 1956(f). Lastly, defendants claim improper forum due to principles of statutory construction, international law and Thailand’s alleged sole jurisdiction over the alleged corrupt acts of its officials, like the arguments before them, fail under scrutiny. Defendants’
statutory construction arguments ignore the express intent of
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Congress and are unnecessary to determine the appropriateness of the charges at hand. Similarly, defendants’ international law
and sole jurisdiction arguments misapply the principles of international law and assume facts that are not established or supported - such as defendants’ claim that Thailand has exerted sole jurisdiction of the offenses alleged in the Indictment. Thailand has not yet been asked to even review the charges set forth in the Indictment, let alone exert sole jurisdiction over them. Defendants’ arguments in this area are another attempt to
confuse and muddle issues that are otherwise straightforward. Defendants’ entire motion is based on a tortured analysis, or, in certain areas, a complete lack of analysis, of the charges actually set forth in the Indictment. The Indictment presents
valid allegations that are properly charged in accordance with Fed. R. Crim. P. 7(c). There is no basis to dismiss this
Indictment and defendants’ motion should be DENIED. II. DISCUSSION A. THE INDICTMENT PROPERLY CHARGES LEGITIMATE FAMILIAR MONEY LAUNDERING OFFENSES Contrary to defendants’ claims, the charges set forth in the Indictment do not represent any type of recently developed novel approach to charging foreign officials, nor do these charges attempt to exploit any ambiguities within the money laundering statutes. As demonstrated below, these charges are familiar and Defendants’ claims otherwise disregard the
properly alleged.
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offenses charged and the extensive case law interpreting those offenses. 1. Defendants’ Claims Ignore a Fundamental Aspect of 18 U.S.C. § 1956(a)(2)(A): There Is No Requirement For Separate Ill-Gotten Gains or “Proceeds” to Be Obtained Before the Statute Can Be Charged
Defendants’ first claim is that government has failed to allege a “distinct MLCA violation” and that the “Indictment fails for lack of an independent MLCA violation.” Def. Mot. at 1, 5.
In support of these allegations, defendants rely on the wellknown concept that “the offense of money laundering must be separate and distinct from the underlying offense that generated the money to be laundered.” Def. Mot. at 3-5. In support of
this argument, defendants consistently reference the concept of a “completed predicate offense” in an attempt to reinforce the misplaced notion that money to be laundered first needs to be generated by a separate and distinct crime. This concept of the
need to generate, as defendants state “ill-gotten gains” (Def. Mot. at 5), before the government can charge a defendant with money laundering applies to many offenses within the MLCA. It
does not, however, apply to the offense defendants are actually charged with in the Indictment – 18 U.S.C. § 1956(a)(2)(A).5
Defendants cite to the “MLCA” repeatedly in their motion as a reference to the crimes charged in the Indictment. The MLCA, or Money Laundering Control Act, is a set of many distinct offenses, each with different elements, not just one all-encompassing statute. Defendants are not charged with violating the MLCA, they are charged with violating § 1956(a)(2)(A) - International Promotion Money Laundering, a specific offense within the MLCA that contains very different elements from other offenses within the MLCA. Defendants never draw this distinction; instead, in attempt to blur the lines of all the MLCA offenses, defendants consistently 7
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18 U.S.C. § 1956(a)(2)(A) has no requirement that dirty money or “proceeds” of criminal activity (completed predicate offense) be generated prior to a violation of that statute, or that there be any “ill-gotten” gains at all. 1956(a)(2)(A) states: (2) Whoever transports, transmits, or transfers, or attempts to transport, transmit, or transfer a monetary instrument or funds 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 – (A) with the intent to promote the carrying on of specified unlawful activity...shall be sentenced... (emphasis added). Section
11 To prove a violation of 18 U.S.C. § 1956(a)(2)(A), the 12 government must prove the following elements: 13 First: 14 15 Second: 16 17 18 19 20 21 22 Second: 23 24 25 26 27 28 cite to the MLCA as a whole. See Jury instructions, United States v. Green et al., CR08-59-GW (CDCA 2008), DE 288; Ninth Circuit Model Jury Instructions No. 8.148 (2010) [Transporting Funds to Promote Unlawful Activity]. 8
The defendant transported money from a place in the United States to or through a place outside the United States; and The defendant acted with the intent to promote the carrying on of unlawful activity.6
In contrast, § 1956(a)(1)(A), on which defendants erroneously rely, has very different elements. § 1956(a)(1)(A) are as follows: First: The defendant [conducted] [intended to conduct] a financial transaction involving property that represented the proceeds of [specify prior, separate criminal activity]; The defendant knew that the property represented the proceeds of [specify prior, separate criminal activity]; and The elements of a
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The defendant acted with the intent to promote the carrying on of [specify unlawful activity being promoted.7
The first and second element above clearly require that the financial transaction conducted involve proceeds of the specified unlawful activity. Section 1956(a)(2)(A), however, manifestly has no such requirement that the money or funds transported internationally be proceeds of the SUA defendants are alleged to be promoting or any SUA for that matter.8 Prosecutors must only establish
that the defendant transmitted, or attempted to transmit, funds with the “intent to promote the carrying on of specified unlawful activity.”9 Those funds can be entirely clean money, that is,
not generated from the SUA, or, alternatively, can indeed be money generated from the SUA. For the purposes of promoting a
SUA under § 1956(a)(2)(A), the source of the funds that serve as the basis for that promotion is completely irrelevant.10 As
discussed further in the merger/double duty section of this response, the lack of a proceeds element similarly means there is
See Ninth Circuit Model Jury Instructions No. 8.146 (2010) [Financial Transaction to Promote Unlawful Activity]. This fact was specifically stated in the Green jury instructions as part of the § 1956(a)(2)(A) charge (DE 288). Under § 1956(a)(2)(A), defendants do not have to have any involvement in the specified unlawful activities. See United States v. Hamilton, 931 F.2d 1046, 1052 (2d Cir. 1991)(noting that “a person could, in effect, violate section 1956(a)(2) without actually participating in an unlawful transaction). Unlike the second element in a § 1956(a)(2)(A) charge, there is no “knowledge” requirement in § 1956(a)(2)(A). 9
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no requirement that a separate and distinct SUA be completed prior to charging a § 1956(a)(2)(A) violation.11 The lack of a proceeds element and its implications is best explained by United States v. Piervinanzi, 23 F.3d 670 (2d Cir. 1994), cert. denied, 513 U.S. 900 (1994). In Piervinanzi, the
defendant was charged and found guilty of conspiracy, attempted bank fraud, and attempted money laundering in connection with the defendant’s attempt to conduct a fraudulent and unauthorized wire transfer of money from a bank in the United States to an overseas account. This conduct served the basis of both the bank fraud Specifically, the money laundering
and money laundering charges.
violations charged were international promotion money laundering pursuant 18 U.S.C. § 1956(a)(2)(A) and 2 (similar to the defendants in this case) as well violations of 18 U.S.C. § 1957. As in this case, the defendant in Piervinanzi claimed that “the asserted criminal laundering activity, the overseas transfer of bank funds, was simply a component of the bank fraud that conspirators attempted to perpetrate,” and that “there was no analytically distinct ‘secondary’ activity, thus no money laundering.” Id. at 677. The court rejected the defendant’s
argument and found that the “conduct at issue falls within the prohibition of statute [§ 1956(a)(2)(A)].” court stated that Id. at 679. The
That is not to say that the SUA need not be a separate and distinct crime. Only that the SUA defendants, activity need not be a crime the defendants committed, nor does that crime necessarily need to be completed or have generated proceeds prior to a violation of § 1956(a)(2)(A). 10
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1956(a)(1)...requires first that the proceeds of specified unlawful activity be generated, and second that the defendant, knowing the proceeds to be tainted, conduct or attempt to conduct a financial transaction with these proceeds with the intent to promote specified unlawful activity. By, contrast, § 1956(a)(2)(A) contains no requirement that “proceeds” first be generated by unlawful activity, followed by a financial transaction with those proceeds, for criminal liability to attach. Instead, it penalizes overseas transfers with intent to promote the carrying on of specified unlawful activity. Id. At 680 (emphasis added). The court further stated:
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 11 Id. (emphasis added). A review of the legislative history of this statute demonstrates that Congress was well-aware of this difference. pointed out in Piervinanzi, the Senate report for this bill explains that § 1956(a)(2)(A) is “designed to illegalize international money laundering transactions” and “covers situations in which money is being laundered ... by transferring out of the United States.” Id. at 680-81; S. Rep. No. 433, 99th The Senate Report’s As The clearly demarcated two-step requirement which Piervinanzi advocates in the construction of 1956(a)(2) is apparent in other provisions of the federal money laundering statutes, but not in 1956(a)(2). We have no authority to supply the omission.
Cong., 2d Sess., at 11 (Sept. 3, 1986).
discussion is silent about any requirement that the funds be proceeds of some distinct criminal activity. Instead, it states
that § 1956(a)(2)(A) is violated when a defendant “engages in an act of transporting or attempted transporting and either intends to facilitate a crime or knows that the transaction was designed to facilitate a crime.” Id. By contrast, again as pointed out
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in Piervinanzi, the Senate Report explains that § 1956(a)(1) “requires that the property involved in a transaction must in fact be proceeds of ‘specified unlawful activity.’” S. Rep. No. 433 at 9-10. This critical difference in § 1956(a)(2)(A) has been wellunderstood for over 25 years. See United States v. Savage, 67 Id. at 681.;
F.3d 1435, 1440-142 (9th Cir. 1995)(analysis of § 1956(a)(2)(A) violation which does not have a proceeds element, as compared to analysis of § 1956(a)(2)(B) violation which does)12; United States v. Moreland, 622 F.3d 1147, 1167 (9th Cir. 2010)(noting that while § 1956(a)(2)(B) requires a showing of “proceeds,” § 1956(a)(2)(A) does not); United States v. Bush, 626 F.3d 527, 536 (9th Cir. 2010)(noting that it is irrelevant whether profits of the illegal activity were involved). As stated in United States
v. Krasinski, “[T]he absence of a ‘proceeds’ requirement in § 1956(a)(2)(A) reflects that Congress decided to prohibit any funds transfer out of the country that promotes the carrying on of certain unlawful activity.” 545 F.3d 546, 551 (7th Cir. 2008). Moreover, even if the “monetary instrument or funds” of a § 1956(a)(2)(A) charge, might, actually be “proceeds of unlawful activity,” does not change the fact that § 1956(a)(2)(A) and § 1956(a)(1)(A) were passed to address two completely different
Defendants quote Savage for the proposition that “Congress intended the money laundering statute to be a separate crime distinct from the underlying offense that generated the money to be laundered.” Def. Mot. at 5. Defendants fail to point out that this passage occurs during the court’s discussion of the proceeds requirement of the § 1956(a)(2)(B) violations, not with respect to § 1956(a)(2)(A), the statute defendants are charged with in this case. 12
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problems. Cir. 1991).
United States v. Hamilton, 931 F.2d 1046, 1050-51 (2d
Emphasizing the purported need for a “separate and distinct crime” from “the underlying offense that generated the money to be laundered” (Def. Mot. at 3-4), defendants incorrectly imply that criminal money must be generated to be laundered in the first instance. This requirement may apply to other uncharged
money laundering statutes, but is wholly irrelevant here, as there is no such requirement. 2. “Double Duty” Is Permissible Under 18 U.S.C. § 1956(a)(2)(A); Contrary to Defendants’ Assertions There Is No Merger Problem
Defendants also claim that the § 1956(a)(2)(A) forces each wire transfer to improperly pull “double duty,” by serving both as an alleged bribe payment and a monetary transaction designed to promote the carrying of the very same bribe. Defendants state
that the government improperly has the “predicate crime and the money laundering charges to distill wholly into the very same crime, which the law does not allow.” Def. Mot. at 5.
Defendants are simply wrong, and once again basing their arguments on an analysis of a different, uncharged, money laundering statute. The law does allow the same transaction in a
§ 1956(a)(2)(A) offense to pull, as the defendants say, “double duty.” This is not a § 1956(a)(1) case and the arguments
defendants advance on pages 3-10 of their motion are entirely irrelevant because they do not address the statute charged. The issue of merger under § 1956(a)(2)(A) is well-settled law. In a § 1956(a)(2)(A) charge, the monetary transfer that is
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the basis of the international promotion money laundering transaction can also serve as the basis of a separate charge alleging as an offense the very SUA being promoted. long been settled law. Piervinanzi, 23 F.3d at 679. This has As
mentioned previously, in the Piervinanzi case, the defendant was found guilty of attempted bank fraud and attempted money laundering under § 1956(a)(2)(A). The defendant argued that “the
overseas transmission of funds [§ 1956(a)(2)(A) violation] ‘merges’ with the underlying bank fraud, precluding independent liability under 1956(a)(2).” Id. The court squarely rejected
the defendant’s merger argument and held that the act of attempting to fraudulently transfer funds out of the bank (the bank fraud) was analytically distinct from the attempted transmission of those funds overseas (the § 1956(a)(2)(A) violation), and was therefore itself independently illegal. The logic and reasoning in Piervinanzi has been widely embraced. Indeed, there is ample case law that says merger Id.
issues do not apply to § 1956(a)(2)(A) charges and that the same transactions that serve as the basis for the SUA can also serve as the basis for an international promotion money laundering charge under § 1956(a)(2)(A) in that the crimes being charged are analytically distinct. See Krasinski, 545 F.3d at 551 (at least
some activities that are part and parcel of underlying offense can be considered to promote carrying on of unlawful activity); Moreland, 622 F.3d at 1166-67 (finding merger issue with respect to 1956(a)(1)(A) charges, but not 1956(a)(2)(A) charges, which “stand on different ground”); Savage, 67 F.3d at 1440-41
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(1956(a)(2)(A) charge has as SUA being promoted mail and wire fraud transactions charged in indictment); United States v. Anvari-Hamedani, 378 F. Supp. 2d 821, 832-33 (N.D. Ohio 2005)(eight counts of 1956(a)(2)(A) violations are proper even though counts mirror eight other counts charging the SUA being promoted as “the two actions are independently illegal and do not merge”); United States v. Esfahani, 2006 WL 163025, *4 (N.D. Ill. 2006)(no merger where counts one hundred through one hundred ninety-one are based on same transfer of funds found in counts two through ninety three). Curiously, not one case in defendants’ motion to dismiss discusses any aspect of § 1956(a)(2)(A), let alone the discussion within those cases stating that there is no merger issue with a § 1956(a)(2)(A) charge. Defendants’ claims and the cases they cite
through the first 8 pages of their motion are all based on an analysis of § 1956(a)(1)(A). As such, defendants completely fail
to address the elements of § 1956(a)(2)(A), choosing instead to discuss a statute the government did not even charge. Defendants also incorrectly claim that the Indictment improperly has both the MLCA’s and the FCPA’s statutory terms require a monetary transfer as an “essential element.” at 4. Def. Mot.
Defendants’ argument here fail because, as an initial
matter, their basic premise is incorrect: the FCPA does not require a monetary transfer as an essential element. All the
FCPA requires is a promise or offer of something “of value,” which can be a gift, an offer to do some act in return, or, as the statute says, “anything of value” – it does not have to be
Filed 09/09/11 Page 23 of 57 Page ID #:763
monetary, nor does there need to be an actual transfer. U.S.C. § 78dd-1, et seq. Defendants’ claims of a shared
“essential element” are flat out wrong. Even if there was a shared element between the two statutes, it is unclear what effect defendants believe that fact would have.13 Defendants incorrectly claim the existence of a shared
element, yet cite no authority for the effect of that proposition. The standard to be applied when the same act or
transaction constitutes a violation of two distinct statutory provisions has been set out in Blockburger v. United States, 284 U.S. 299 (1932). The Supreme Court in Blockburger stated that
whether there are two offenses or only one depends on whether each provision requires proof of a fact which the other does not. Id. at 304. As the Ninth Circuit has said, in applying
Blockburger, “it matters not that there is ‘substantial overlap’ in the evidence used to prove the two offenses, so long as they involve different statutory elements.” 406 F.3d 1149, 1151 (9th Cir. 2005). United States v. Kimbrew,
Regardless, defendants’ As is
conclusory argument on this issue serves no purpose.
evident from the statutes themselves, and as explicitly recognized in Bodmer, the FCPA and § 1956(a)(2)(A) have very different statutory elements. 342 F. Supp. 2d 176 at 189. Not
to mention, the FCPA is not even charged in the Indictment.14
This is especially true given that defendants are not even charged with an FCPA violation. Even in cases where both statutes were charged, such as United States v. Green, the charges are proper. 16
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The Promotion Aspect of 18 U.S.C. § 1956(a)(2)(A) Is Properly Charged
Defendants, in another attempt to incorporate their 3 misdirected merger argument, allege that the government is 4 reading the statutory promotion phrase “in an overly literal way 5 as to extend MLCA liability to the transactions that consummate 6 the alleged predicate bribes themselves” thereby “eluding the 7 essential requirement that a separate act of promotion be 8 alleged.” 9 phrase “to promote the carrying on of” is “ambiguous.” 10 at 2. 11 clause of § 1956(a)(2)(A) is neither ambiguous nor is the 12 government relying on the statute in an overly literal way. 13 Rather, the government is relying and interpreting the statute 14 and the promotion clause in accordance with the extensive body of 15 case law on promotion as applied to § 1956(a)(2)(A) charges. 16 Defendants, in making their allegations, fail to discuss or 17 address in any fashion how the courts have interpreted 18 “promotion” with respect to § 1956(a)(2)(A). 19 yet again rely on cases interpreting a different offense all 20 together – § 1956(a)(1)(A) – for their arguments.15 21 the whole premise of their argument is based on a merger theory 22 that does not apply to § 1956(a)(2)(A) cases. 23 government, as set forth below, has properly charged defendants 24 with “promotion” under § 1956(a)(2)(A). 25 26 27 28 While the intent to promote language appears in both statutes, defendants chose to ignore the § 1956(a)(2)(A) cases (including cases directly on point in this Circuit) and instead solely rely on out-of-circuit § 1956(a)(1)(A) cases. 17
Def. Mot. at 10.
Defendants further allege that the Def. Mot.
Defendants are incorrect on all points.
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Intent to promote the carrying on of a specified unlawful activity under 18 U.S.C. § 1956(a)(2)(A) can be proven in several different ways. In Moreland, the Ninth Circuit held that an
intent to promote can be found under § 1956(a)(2)(A) when there is an overseas transfer that carries out the underlying fraud, or when the transfer is for the purpose of hiding the funds. F.3d at 1167, 1170. 622
The defendant in that case was convicted of
mail fraud, wire fraud, conspiracy, and money laundering in connection with a pyramid scheme. The defendant transferred
money from accounts containing the victims’ investment funds into his own accounts to pay salary and personal expenses. 1153. Id. at
The § 1956(a)(2)(A) counts involved transfers from one of
the corporate accounts in Washington to three accounts in the Bahamas. While the court dismissed certain § 1956(a)(1)(A)
charges under a separate proceeds issue, the court found the convictions under § 1956(a)(2)(A) were proper “because Moreland agreed to transfer funds outside of the United States in order to carry on his fraud.” Id. at 1169. The court held that the
“promotion” element was satisfied because the purpose of transferring funds out of the country was to “hide the funds from the government, which promoted the fraudulent scheme.” 1170. As in Moreland, the Greens, at the direction of defendant Juthamas Siriwan, transferred bribe payments into overseas accounts set up by defendant Jittisopa Siriwan.16 Ind. ¶¶ 18, Id. at
Ample evidence of this fact was presented during the trial of the Greens before this Court. 18
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Defendant Juthamas Siriwan directed these payments overseas
into accounts in defendant Jittisopa Siriwan’s name in order to conceal the benefit to herself.17 Ind. ¶¶ 18, 29. The overseas
payments enabled defendants to avoid detection and thereby promoted the Greens’ FCPA violations and their own violations of Thai public corruption laws. Other circuits have similarly held that under Section 1956(a)(2)(A), the promotion prong can be met by activity that furthers criminal activity. In Krasinski, the Seventh Circuit
held that “the promotion element [under § 1956(a)(2)(A)] can by met by transactions that promote the continued prosperity of the underlying offense”. 545 F.3d at 551. The Krasinski court held
that the “international transport of funds contributed to the drug conspiracy’s prosperity and furthered it along.”18 Id.
The defense in Moreland also argued that Moreland himself did not wire the funds at issue. The court rejected that argument, stating that a “rational juror could have concluded that Moreland was involved in the transfer,” and that even for transactions that “did not directly involve” Moreland, Moreland was liable under a Pinkerton theory which holds a conspirator criminally liable for the substantive offenses committed by a conspirator when they are reasonably foreseeable and in furtherance of the conspiracy. Id. at 1168-69. See also United States v. Trejo, 610 F.3d 308, 314-316 (5th Cir. 2010)(defendant intent to further the progress of the underlying activity can be proven circumstantially through the “defendant’s involvement in the illegal enterprise thereby rendering it more likely that he intended to further its progress by his actions.”); Savage, 67 F.3d 1435 at 1440 (evidence of intent to promote a fraudulent scheme under § 1956(a)(2)(A) exists if the transfer lends an "aura of legitimacy to the scheme”); United States v. Capligner, 339 F.3d 226, 233 (4th Cir. 2003)(1956(a)(2)(A) promotion can be proven by circumstantial evidence that the defendant applied unlawful proceeds to promote and perpetuate the scheme). 19
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The idea that the promotion element can be satisfied by overseas transfers that complete, or make successful, the very activity that gave rise to the proceeds that are the subject of the transaction is well-established in the Ninth Circuit. United States v. Montoya, 945 F.2d 1068 (9th Cir. 1991), a California state senator was convicted for racketeering, money laundering, and other charges arising from an FBI sting operation. The FBI, through a fictitious front company, gave In
Montoya a $3,000 check derived from the proceeds of the undercover bribery transaction. Id. at 1075. Montoya argued
that the deposit of the check could not have promoted the unlawful activity (the bribe), because the activity had been completed upon receipt of the check from the FBI. The Ninth
Circuit rejected Montoya’s claims and found that Montoya could not have made use of the funds without depositing the check; thus, it concluded that the “deposit of the check amounts to an intent to promote the carrying on of the specified unlawful activity.” Id. at 1076.19 Like Montoya, the defendants caused
the bribe payments to be deposited and thereby promoted the carrying on of the alleged SUAs. Defendants’ attempt to distinguish Montoya, calling it a case “on the extreme.”20
Nevertheless, the “promotion” analysis,
While Montoya is a § 1956(a)(1)(A) case, it is helpful to understanding the genesis of the Ninth Circuit’s reasoning on promotion that has subsequently been extended to § 1956(a)(2)(A) cases – such as Savage and Moreland. Defendants’ claim that a D.C. Circuit case, United States v. Hall, 613 F.3d 249 (D.C. Cir. 2010) is “the most instructive case on the MLCA promotion issue.” Def. Mot. at 6. Hall is not only an out-of-circuit § 1956(a)(1) case, it is premised on a 20
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as applied to § 1956(a)(2)(A) offenses, is the law of this circuit and defendants fail to cite any cases that undermine its authority.21 4. The Rule of Lenity Is Not Implicated by These Familiar And Often-Used Charges
The crimes alleged in the Indictment are neither novel nor 6 vague, and there is no basis for invoking the rule of lenity in 7 this case. 8 government’s is not trying a “novel approach” to “overcome a 9 fundamental FCPA limitation.” 10 government attempting to “exploit a MLCA ambiguity” such that the 11 rule of lenity must be applied. 12 1956(a)(2)(A) cases the government has cited in this response is 13 demonstrative of the well-developed landscape supporting the 14 money-laundering charges in this case. 15 Indeed, the Greens were charged with, and convicted of, 16 precisely the same money laundering offenses. 17 difference here is that the Greens were also charged with the 18 underlying FCPA violations. 19 below, defendants’ claim of a “foreign official” exception is 20 21 22 23 24 25 26 27 28 merger argument, which does not apply to § 1956(a)(2)(A) cases. Defendants cap off their Montoya discussion with yet another conclusory statement that “[N]o court has allowed the making of a payment that is an essential element of the predicate unlawful activity - such as a bribe in bribery cases - constitute promotion of that same activity.” Def. Mot. at 7. Defendants make this claim because Montoya’s payment was not the direct bribe, but proceeds of the bribery activity. This distinction once again tries to incorporate an erroneous merger argument. Regardless, and as discussed previously, the making of a monetary payment is not an essential element of an FCPA offense. 21
Despite defendants’ claims to the contrary, the
Def. Mot. at 1.
The litany of §
As discussed further in Section B
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The entirety of defendants’ lenity arguments, as
with the other areas of their § 1956(a)(2)(A) challenges, are entirely premised on the analysis of elements of statutes that do not apply to them and were not charged with. As such,
defendants’ claims of error, impropriety, and pleas for lenity should be rejected. B. THE SUAS ARE APPROPRIATELY CHARGED IN THIS CASE Defendants next argue that the two independent specified unlawful activities set forth in the Indictment are each either improper or otherwise deficient. Neither claim has merit.
Defendants’ arguments again rely on the misplaced merger theory and an incorrect analysis of the law. 1. The FCPA Is A Proper SUA
Defendants allege that the international promotion money laundering charges set forth in the Indictment are “aimed at overcoming a fundamental FCPA limitation” in that the FCPA does not criminalize a foreign public official’s receipt of a bribe. Def. Mot. at 1. Defendants further assert that if the
“government wishes to extend U.S. criminal penalties to foreign officials accepting a bribe, it must go back to Congress.” at 10. Id.
Defendants once again ignore that the charges set forth
in the Indictment simply do not charge them with accepting a bribe, or conspiring to violate the FCPA. Rather, defendants are
charged with the separate, and entirely analytically distinct, crime of international transportation money laundering to promote the Greens’ violation of the FCPA. That defendant Juthamas
Siriwan was a foreign official at the time of these offenses, and
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therefore, not charged under the FCPA does not change the analysis.22 As discussed previously, and, as set forth by Bodmer, 342 F. Supp. 2d 176, this type of promotional money laundering violation is an appropriate and well-established crime separate and apart from the Greens’ FCPA violations. The defendant in Bodmer was a He was charged
foreign citizen and agent of a domestic concern.
with violations of the FCPA, as well as conspiracy to violate international promotion money laundering under 18 U.S.C. §§ 1956(a)(2)(A), and (h), with the FCPA as the specified unlawful activity (the same offenses defendants are charged with in the instant Indictment). The court found that at the time of the defendant’s conduct, pre1998, the FCPA prohibited the prosecution of foreign nationals acting as agents of domestic concerns. Id. at 189. Yet despite
the prohibition of the FCPA prosecution, the court held that: “whether Bodmer violated the FCPA, and the fact that he cannot be criminally sanctioned for that conduct, is irrelevant to proving that he transported money in furtherance of FCPA violations.” Id. at 191 (emphasis added). That foreign officials cannot face liability for FCPA offenses does not give foreign officials a
While defendant Jittisopa Siriwan was an employee of the Tourism Authority of Thailand for a period of time, the evidence at the Green trial showed that she was not being bribed to influence her official acts, and she neither influenced a decision in order to assist the Greens in obtaining or retaining business nor did she ever act in a official capacity with respect to the conduct charged in the Indictment. Therefore, defendant Jittisopa Siriwan cannot be encompassed within any of defendants’ arguments on this point. 23
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free pass to commit other, entirely separate, crimes. in Bodmer continued:
The statute clearly penalizes the transportation of monetary instruments in promotion of unlawful activity, not the underlying unlawful activity; in passing the money laundering statute, Congress determined that the transportation of monetary instruments in promotion of unlawful activity itself constitutes a crime. Id. (emphasis in original quotation).
7 Further, the court in Bodmer stated that it would be 8 illogical for immunity from the FCPA’s criminal penalties to 9 also confer immunity from the money laundering statutes. 10 court held that “the government [was] not circumventing the 11 FCPA’s limitations on FCPA penalties by charging the defendant 12 with money laundering.” 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 See Pub.L. 95-213, Title I (Dec. 19, 1977); United States v. Castle, 925 F.2d 831, 831-32 (5th Cir. 1991)(holding that foreign officials cannot be charged under the FCPA either substantively or as part of a conspiracy.) 24
If immunity from the FCPA’s criminal penalties automatically conferred non-resident foreign nationals with immunity from the money laundering statute, these non-resident foreign nationals could openly serve as professional money launderers of proceeds derived from violations of the FCPA... Id. at 191. The legislative history surrounding the inclusion of the FCPA as a SUA also supports the conclusion that Congress never intended to exempt foreign officials from money laundering prosecutions in instances where the FCPA is the alleged SUA. When Congress enacted the FCPA in 1977, it did
not provide for the prosecution of foreign officials.23 Following the passage of the FCPA and the decision in
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Castle, Congress, in 1992, included the FCPA as a specified unlawful activity for money laundering offenses in 18 U.S.C. § 1956(c)(7)(D). 1992). See Pub.L. 102-550, Title XV (Oct. 28,
Congress, in making this addition, could have
specifically exempted foreign officials from its application. Congress, however, declined to do so,
evidencing an intent not to exempt foreign officials from money laundering violations that have the FCPA as an SUA. Further cement this conclusion is the fact that Congress made no effort to exclude the FCPA as an SUA when it revised the statute again in 2006. In July 2004, the
Bodmer decision was issued stating affirmatively that even though a defendant may not be liable for FCPA violations, the defendant can still be charged with money laundering with the FCPA as the SUA. Two years later, on March 9,
2006, Congress enacted and the President signed into law HR 3199, The USA Patriot and Improvement Act of 2005. Pub.L. 109-177 (Mar. 6. 2006). See
Section 403(b) of the Act
made minor changes to the FCPA SUA in 18 U.S.C. § 1956(c)(7)(D), yet Congress did nothing to undo the holding in Bodmer. In short, the legislative history and the case law surrounding § 1956(a)(2)(A), both generally, as well as applied to FCPA violations, squarely support the charges against defendants in this case, and flatly rejects defendants’ claims that the charges are novel or represent a case of first impression.
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The Thai Offenses Defendants Promoted Fit Squarely Within 18 U.S.C. §1956(C)(7)(B)(iv)
Aside from promoting the Green’s FCPA violations, 3 defendants are also charged with promoting a second, 4 separate, specified unlawful activity - an offense against a 5 foreign nation involving public corruption. 6 18 U.S.C. § 1956(C)(7)(B)(iv) includes as an SUA: 7 an offense against a foreign nation involving... 8 9 10 Id.24 11 include all crimes of foreign public corruption. 12 No. 107-250, at 55 (2010)(“The additional crimes include all 13 crimes of violence, public corruption, and offense covered by 14 existing bilateral extradition treaties.”)(emphasis added). 15 Indictment specifies two public corruption offenses under 16 Thailand’s Penal Code that defendants promoted under § 17 1956(C)(7)(B)(iv): 18 Section 149: 19 20 21 22 23 24 25 26 27 28 “Bribery of a public official [under § 1956(C)(7)(B)(iv)] extends to the individual who offers the bribe as well as to the public official who accepts the bribe.” United States v. Lazarenko, 564 F.3d 1026, 1039 (9th Cir. 2009)(emphasis added). 26
bribery of a public official, or the misappropriation, theft, or embezzlement of public funds by or for the benefit of a public official. This provision is meant to be interpreted broadly to See H.R. Rep.
It is unlawful for any government official of the Kingdom of Thailand to accept property or any other benefit for exercising or not exercising any of official function; and It is unlawful for any government official, having the duty of managing or looking after any activity, to take the interest for the benefit of herself or another person concerning such activity.
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Ind. ¶¶ 2,3,15.
Defendants are not charged with substantively
violating these offenses; rather, they are charged with promoting these violations. The government need not prove or allege the
elements of SUA that form the basis for the money laundering offense charged. Lazarenko, 564 F.3d at 1033. Indeed, despite
the government’s reference to Thai law in the Indictment, the government is not required “to plead a specific violation of foreign law in the Indictment.”25 Id.
Defendants seem to take issue with two aspects of this particular SUA. First, defendants allege that the government’s
translation of Thai Penal Code Section 152 is incomplete. Second, defendants claim that the “public funds” language in § 1956(C)(7)(B)(iv) requires that those funds be the property of the United States from the United States’ public treasury. of these arguments lack merit. Further, defendants make no Both
mention of Thai Penal Code 149 (bribery of a public official in Thailand), the second foreign offense set forth in the Indictment pursuant 18 U.S.C. § 1956(C)(7)(B)(iv). Defendants’ failure to
challenge Thai Penal Code 149 suggests that they recognize, that at least on this basis, the SUA is legitimate. Defendants’ claims that the government has mistranslated Thai Penal Code Section 152 have no merit. Section 152 is an
The governments’ citation to these specific Thai charges are by no means the only Thai public corruption laws that apply under this sub-section. These same two citations were made alleged in the Green indictment, however, at trial, the parties stipulated to these two referenced violations as well as other violations of Thai law not specifically referenced, or required to be referenced, in the indictment. See United States v. Green et al., CR-08-59-GW (CDCA 2008), DE 250. 27
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appropriate foreign offense under § 1956(C)(7)(B)(iv) even under defendants’ proffered translation26. Section 152 states as follows: Any official in charge of managing or supervising any affair takes advantage, in the nature of conflict of interests in such affair, for the benefit of himself or herself, or any other person shall be liable to imprisonment... Def. Mot. at 11. Notwithstanding the fact that the above Defendants allege that
translation does not make sense grammatically, the crux of their proffered translation still makes it a violation for the official to take advantage of their position for his or her own benefit. This plainly qualifies as a misappropriation, theft, or embezzlement of public funds by or for the benefit of a public official. Defendants claim that the “conflict of interest” language in their translation makes Section 152 akin to an “honest services” violation and therefore removes it from the purview of § 1956(C)(7)(B)(iv). Def. Mot. at 12. It does not. First, and as
noted previously, Congress intended § 1956(C)(7)(B)(iv) to be read broadly to cover “all crimes of public corruption.” H.R. Rep. No. 107-250, at 55 (2010).27 See
Second, whether Section
The government does not concede that its proffered translation is incorrect. The government’s translation comes from “The Criminal Code, Translated Thai-English, Update 2005-2008", translated by Mr. Yonguth V’s Yuthankun. As noted previously, this translation was stipulated to in the Green trial at DE 250. See also United States v. All Assets Held At Bank Julius Baer, 571 F. Supp. 2d 1, *6, *10-11 (D.D.C. 2008)(reading § 1956(C)(7)(B)(iv) to include a broad range of conduct, including extortion); See also M. Hagler, International Money Laundering and U.S. Law: A Need to “Know-Your-Partner,” 31 Syracuse J. Of Int’l Law & Com. 227, 228 (2004)(Patriot Act expanded the money 28
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152 has a conflict of interest component is entirely irrelevant. Section 152 clearly penalizes, even under defendants’ translation, obtaining a benefit as a result of official action. Whether defendants obtained the benefit through exploiting a conflict of interest, the benefit – that is the misappropriation, theft or embezzlement of Thai public funds – is an offense against Thailand under Section 152 and a specified unlawful activity pursuant to 18 U.S.C. § 1956(C)(7)(B)(iv). Defendants’
attempts to draw parallels to U.S. honest services law (which still criminalizes the type of “kickback” scheme defendants perpetrated) is an irrelevant tangent. Defendants’ second claim, that the “public funds” referenced in § 1956(C)(7)(B)(iv) must involve funds that the United States has “title to, possession of, or control over” is just plain false. Def. Mot. at 13. The “public funds” language of §
1956(C)(7)(B)(iv) refers to the funds of the foreign nation – as is borne out by the case law interpreting this provision. See
Lazarenko, 564 F.3d at 1029 (funds came from Ukranian treasury as well as private individuals in United States); United States v. $125,938.62, 537 F.3d 1287 (11th Cir. 2008)(forfeiture proceedings pursuant to § 1956(C)(7)(B)(iv) where funds came from Nigerian treasury); United States v. 2291 Ferndown Lane, 2011 WL 2441254 (W.D. Va. 2011) (forfeiture proceedings pursuant to § 1956(C)(7)(B)(iv) where funds were New Taiwan dollars). Not one
laundering laws to extend the list of predicate offenses “to include, most notably, any foreign corruption.”) 29
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of the above-referenced cases involved funds belonging to the United States. Defendants try to support their tortured reading of the law by citing to 18 U.S.C. § 641 - Embezzlement of Government Property – a statute that specifically criminalizes the theft of United States government property. Indeed, § 641 explicitly
references the requirement that the property at issue be property of the United States: Whoever embezzles, steals, purloins, or knowingly converts to his use ...any record, voucher, money, or thing of value of the United States... Id. (emphasis added). By contrast, 18 § 1956(C)(7)(B)(iv)
contains no such language nor has any court ever drawn this nonsensical parallel. The two cases defendants cite for their Indeed, they do not even
proposition contain no such holding.
relate to § 1956(c)(7)(B)(iv) or any money laundering offense for that matter.28 Defendants’ arguments on this point once again
have no relation to the specified unlawful activity or the charges set forth in the Indictment. Lastly, defendants do not contest the applicability of Thai Penal Code Section 149 as an appropriate offense against a foreign nation pursuant to 18 U.S.C. § 1956(C)(7)(B)(iv). On
this ground alone, the SUA is sufficient and properly charged.
Defendants cite United States v. Kranovich, 401 F.3d 1107 (9th Cir. 2005) and United States v. Faust, 401 F.3d 1107 (9th Cir. 1988). Both cases interpret 18 U.S.C. § 641, where the defendants were alleged to have stolen United States property, on grounds entirely unrelated to money laundering or 18 U.S.C. § 1956(C)(7)(B)(iv). 30
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THE MONEY LAUNDERING STATUTES PROVIDE FOR EXTRATERRITORIAL JURISDICTION FOR THE STATUTES CHARGED Defendants challenge the jurisdictional underpinnings of the
3 Indictment by arguing that since 18 U.S.C. § 1956(b) (the civil 4 penalty portion of the money laundering statutes) does not 5 expressly include a reference to § 1956(h) (conspiracy) or 18 6 U.S.C. § 2 (aiding and abetting or causing an act to be done), 7 the Court lacks jurisdiction in this case. 8 rely and focus on an entirely incorrect part of the statute. 9 Defendants ignore, and their brief is entirely devoid of citation 10 to, the provision governing extraterritorial criminal 11 jurisdiction under Section 1956: § 1956(f). 12 extraterritorial jurisdiction in this case under § 1956(f) and 13 defendants’ efforts to obfuscate this simple fact through 14 reliance on the civil penalties provision of § 1956(b) are 15 entirely baseless. 16 Section 1956(f) has been part of the statute since it was 17 first enacted in 1986. 18 (f) 19 20 21 22 23 24 (emphasis added). 25 extraterritorial jurisdiction over criminal prosecutions for 26 “conduct prohibited by this section.” 27 emphasized phrase plainly encompasses conduct prohibited by the 28 31 (Emphasis added.) The Section 1956(f), by its express terms, defines There is extraterritorial jurisdiction over the conduct prohibited by this section if -(1) the conduct is by a United States citizen or, in the case of a non-United States citizen, the conduct occurs in part in the United States; and (2) the transaction or series of related transactions involves funds or monetary instruments of a value exceeding $10,000. § 1956(f) states: There is plainly Defendants once again
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conspiracy provisions of § 1956(h) as well as the substantive provisions of § 1956(a). The legislative history of this provision, as originally enacted, also explicitly states that it was intended to govern extraterritorial criminal jurisdiction: Section 1956(f) is intended to clarify the jurisdiction of U.S. courts over extraterritorial acts that could be construed to fall within the scope of section 1956. It is not the Committee’s intention to impose a duty on foreign citizens operating wholly outside of the United States to become aware of U.S. laws. Section (f) avoids this by limiting extraterritorial jurisdiction over the offense to situations in which the interests of the United States are involved, either because the defendant is a U.S. citizen or because the transaction occurred in whole or in part in the United States. S. Rep. No. 433, 99th Cong., 2d Sess., at 14 (Sept. 3, 1986) (emphasis added). Courts have long recognized that § 1956(f)
provides for extraterritorial criminal jurisdiction against foreign persons that have violated §§ 1956(a)(2)(A) and (h). Bodmer case is a perfect example. The
In Bodmer, the defendant was a
Swiss national charged with conspiring to commit international promotion money laundering pursuant to § 1956(h) in violation of § 1956(a)(2)(A). 342 F. Supp. 2d at 190. The Bodmer court, in
holding that non-resident foreign nationals did not have immunity from the money laundering statutes, stated that Congress had a: [c]learly articulated intention to include foreigners within the scope of the money laundering statute. See 18 U.S.C. § 1956(f)(providing extraterritorial jurisdiction over non-United States citizens who violate the money laundering statute if part of the transactions occur in the United States and involve funds or monetary instruments exceeding a value of $10,000). Id. at 191 (emphasis added). See also United States v. Melvyn
27 Arnold Stein, 1994 WL 285020, at *5 (E.D. La. Jun. 23, 1994) 28 32
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(“If, as it is alleged in this case, a defendant, who never enters this country, initiates a transfer of funds from a place within the United States to place outside the United States, there will be extraterritorial jurisdiction, because a portion of the conduct occurred in this country”). Section 1956(b) – the provision on which defendants rely – was also part of the original money laundering statute enacted in 1986. The legislative history reveals the obvious: that
Subsection (b) is limited to civil penalties for violations of Section 1956: Section 1956(b) authorizes the imposition of civil penalties on those found to have committed any of the acts proscribed in section (a). As with most civil provisions, the standard of proof for imposition of such a penalty is a preponderance of the evidence. The maximum amount of such a civil penalty is the value of the property involved in the illegal transaction or $10,000, whichever is greater. If imposed, such a civil penalty is payable to the United States. This section does not create a private civil remedy, in which penalties would be payable to a prevailing private litigant. S. Rep. No. 433, 99th Cong., 2d Sess., at 12 (emphasis added).
19 Congress added the long-arm civil jurisdiction provision of § 20 1956(b)(2) in 2001 as part of the USA PATRIOT ACT, Pub. L. 10721 56, 115 Stat. 272, § 317. 22 so, Congress did not repeal nor did it amend the criminal 23 extraterritorial provisions of § 1956(f), which remains in effect 24 today. 25 The fact that § 1956(b) is limited to civil enforcement of 26 the statute is manifest from the language of the provision 27 itself, which vests federal courts with jurisdiction over foreign 28 33 It is most noteworthy that, in doing
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persons “against whom the action is brought, if service of process upon the foreign person is made under the Federal Rules of Civil Procedure or the laws of the country in which the foreign person is found . . . . (emphasis added).” It would be
nothing short of nonsensical to allow for extraterritorial criminal jurisdiction over foreign persons to be perfected upon “service of process... under the Federal Rules of Civil Procedure....” Yet this is how defendants insist on reading the
statute while entirely ignoring the provision directly on point, § 1956(f). Defendants’ failure to cite one § 1956(b)(2) in support of their novel jurisdictional position shows that they are aware that the civil jurisdictional provisions of § 1956(b)(2) are entirely inapplicable to the criminal Indictment against them. Indeed, the only case they cite on this topic, United States v. Lloyds TSB Bank Plc, 639 F. Supp. 2d 314 (S.D.N.Y. 2009), relates to a civil penalty the government was seeking to enforce. Defendants’ arguments fail by the express terms of the statute, and they are unable to find any support in the law for their tortured mixing and matching of civil and criminal statutes in this area. Defendants’ reliance on § 1956(b)(2)(A) to challenge jurisdiction with respect to charges based on 18 U.S.C. § 2 offense is flawed for the same reasons. The civil penalty
provisions of § 1956(b)(2)(A) have nothing to do with the criminal enforcement of international promotion money laundering under § 1956(a)(2)(A). Section 1956(f) provides this Court with
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the extraterritorial jurisdiction to prosecute the defendants and, therefore, the inclusion of 18 U.S.C. 2 is entirely appropriate. As stated in United States v. Yakou, “[a]bsent an
indication from Congress to the contrary, the crime of aiding and abetting ‘confer[s] extraterritorial jurisdiction to the same extent as the offense [ ] that underlie[s it].’” 428 F.3d 241, 173 (D.D.C. 2005) (quoting United States v. Hill, 279 F.3d 731, 739 (9th Cir. 2002)). Congress has made no such indication and
the charges set forth in the Indictment are proper. Defendants’ misplaced jurisdictional arguments, premised on the entirely inapplicable provisions of § 1956(b)(2), are without foundation and should be denied. D. THIS COURT IS THE PROPER FORUM FOR THE INDICTMENT
Defendants ask the Court to dismiss the Indictment on the basis of principles of statutory construction, international law and the Thai government’s determined judgment that it has sole jurisdiction over the alleged corrupt acts of its officials. Defendants’ arguments are without merit and should be flatly rejected. In support of their arguments, Defendants’ introduce
concepts of customary international law (as set forth by the Restatement (Third) of Foreign Relations Law) in an attempt to convince this Court that because Thailand has initiated its own proceedings against the defendants for violations of its own laws, the United States lacks the ability to prosecute the defendants for completely separate violations of United States law, that are based, in part, on the same conduct.
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In making these claims, Defendants disregard the plain language of U.S. statutes that specifically provide the appropriate jurisdiction for the charges set forth in the Indictment, mis-apply and distort customary international law in showing that the government’s prosecution is “unreasonable,” and
completely ignore the firmly rooted and accepted practice of concurrent jurisdiction - enabling two nations to prosecute defendants if their conduct violates the laws of both nations. Moreover, contrary to defendants’ assertions, Thailand has not exercised exclusive jurisdiction in this matter. Thailand’s
statue is merely an assertion of its own jurisdiction, it does not prevent the punishment of the same defendants by a foreign country (such as the United States) for violations of its own laws. 1. Defendants' Statutory Construction Analysis Fails: The Presumption Against Extraterritoriality Has Been Rebutted By Section 1956's Plain Text.
Defendants’ motion to dismiss alludes only briefly to the presumption against extraterritoriality (the extraterritorial application of a statute). Def. Mot. at 19. As the Supreme
Court has recently reiterated, “[i]t is a longstanding principle of American law that legislation of Congress, unless a contrary intent appears, is meant to apply only within the territorial jurisdiction of the United States.” Morrison v. National However, this
Australia Bank, 130 S.Ct. 2869, 2877 (2010).
cannon of construction is “a presumption about a statute’s meaning, rather than a limit upon Congress’s power to legislate,” id., and may be rebutted by a “clear indication of
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extraterritoriality.”
Felix-Gutierrez, 940 F.2d. 1200, 1204 (citing United States v. Bowman, 260 U.S. 94, 98 (1922) (extraterritorial application of a statute can arise from Congress’s expressed intent or by a proper inference from the nature of the offense)). As discussed at length in Part B of this Response, Congress has expressly provided for extraterritorial jurisdiction through § 1956(f). This clear indication of extraterritorial scope in
the text of the statute is sufficient to overcome any presumption against extraterritoriality that might be implicated through a statutory construction analysis. Defendants’ reliance on the Charming Betsy canon of avoiding a construction of U.S. that conflicts with international law is similarly unfounded in this case. While the government agrees
with the general proposition that,“[w]here fairly possible, a United States statute is to be construed as not to conflict with international law or with an international agreement with the U.S." Munoz v. Ashcroft, 339 F.3d 950, 958 (9th Cir. 2003)
(quoting the Restatement, Section 114 and citing Murray v. Schooner the Charming Betsy, 6 U.S. (2 Cranch) 64, 118 (1804)), the Charming Betsy canon is irrelevant for two reasons: first and most importantly, there is no ambiguity with Congress’ intent. See United States v. Yousef, 327 F.3d 56, 92 (2d Cir. 2003)(Charming Betsy cannon applicable only when Congressional intent is ambiguous). In this case, there is absolutely no
ambiguity in Congressional intent as Congress explicitly stated through § 1956(f) that criminal extraterritorial jurisdiction
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exists for MLCA offenses, including violations of 1956(a)(2)(A) and (h).
The Court thus has no need to look to the
Restatement, statutory construction, or any other expression of customary international law, in this case. Secondly, and as
discussed below, Charming Betsy is inapplicable because application of § 1956(a)(2)(A) to defendants’ conduct does not create a conflict with international law or an international agreement. 2. Application of § 1956(a)(2)(A) to Defendants Does Not Violate Customary International Law
While there is no reason to do so, even if the Court were to consult customary international law in this case, the extraterritorial application of § 1956(a)(2)(A) through § 1956(f) falls well within those norms. Defendants’ analysis of those International law requires no
principles is badly off the mark.
more from a nation’s exercise of extraterritorial jurisdiction than that it comport with a recognized basis to prescribe and be reasonable.29 The application of § 1956(a)(2)(A) to defendants’
money laundering activities easily meets those standards. As applied by the Ninth Circuit, customary international law requires a two stage analysis: (1) whether a basis for jurisdiction to prescribe exists30; and (2) whether the exercise Defendants do not base their claim on any statute, treaty or convention through which the United States has provided an individual right under international law principles to attack § 1956(a)(2)(A). Indeed, there is none. The Restatement description of customary international law distinguishes between jurisdiction to prescribe (a nation's jurisdiction to make its law applicable to a case) and jurisdiction to adjudicate (a nation's jurisdiction to subject persons to the 38
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of jurisdiction to prescribe is reasonable.
United States v. It is well-
Vasquez-Velasco, 15 F.3d 833, 840 (9th Cir. 1994).
settled under customary international law that “a state has jurisdiction to prescribe law with respect to...conduct that wholly or in substantial part, takes place within it territory.” Restatement § 401(a). Here, the defendants knowingly used the
United States’ financial system in order to promote two separate unlawful activities – the Greens’ FCPA offenses as well as defendants’ offenses against a foreign nation, that is, Thailand. Each is specifically enumerated as such within the MLCA and represents conduct, the promotion of which through international transfers of money from or to the United States, Congress has explicitly deemed criminal under the laws of this nation. The financial transactions in the United States that defendants caused to promote those SUAs totaled close to $1,800,000 from 2002-2007. Ind. ¶ 11. These international
transfers originated from numerous bank accounts within the Central District of California and were transferred, at the express direction of defendant Juthamas Siriwan, to numerous bank accounts all over the world in the name of defendant Jittisopa Siriwan – including bank accounts in Singapore, the United Kingdom, and the Isle of Jersey. Ind. ¶ 11, 18, 19.
A basis for jurisdiction plainly exists.
process of its courts). See §§ 401(a),(b). Although defendants phrase their argument in terms of whether this court is the "proper forum," their real argument concerns U.S. jurisdiction to prescribe, as the authorities upon they rely makes clear. 39
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Defendants’ arguments relate less to the basis of jurisdiction under customary international law and more to a challenge of the “reasonableness” of the government’s prosecution. While this Court need not decide that the
government’s prosecution in this case is “reasonable,” since Congress has clearly expressed its intention that the statute apply to conduct committed outside the United States, even if “reasonableness” under customary international law were at issue here, the government’s prosecution of defendants entirely satisfies that standard. As demonstrated below, defendants’
arguments rely on a distortion of the facts and self-serving proclamations that have little or no substance or support.31
Customary international law recognizes two additional bases for jurisdiction to prescribe: (1) jurisdiction on the basis of effect in the United States, see Restatement § 402(1)(c); and (2) the “protective principle.” See id. § 402 cmt. F. Since the defendants used a bank in the United States to promote the SUAs, their conduct plainly had serious and harmful effects within this country. Consequently, jurisdiction under the “effects” basis is present and consistent with customary international law. In addition, the United States has a strong national interest in maintaining the integrity of its financial institutions by protecting them from being used to commit money laundering offenses in the United States to promote bribery of foreign government officials or commit offenses against foreign nations. These interests justify application of the “protective” basis of jurisdiction as well. See, e.g., Vasquez-Velasco, 15 F.3d at 84041 (applying 18 U.S.C. § 1959, violent crimes in aid of racketeering activity , to defendant’s participation in murders of two Americans in Mexico comported with international law); FelixGutierrez, 940 F.2d at 1205-06 (conviction for being accessory after fact of murder of DEA agent, committed in Mexico, was consistent with international law). This case is on even stronger footing than those cited above, however, because the statute at issue here, § 1956(f), contains a clear Congressional expression of extraterritorial application, whereas the statutes applied in the cases above did not. 40
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Defendants’ application of the Restatement’s reasonableness factors does not in any way call into question the reasonableness of the Indictment or prosecution of defendants. Per § 403 of the
Restatement, whether exercise of jurisdiction over a person or activity is unreasonable is determined by evaluating all relevant factors, including, where appropriate: (a) the link of the activity to the territory of the regulating state, i.e., the extent to which the activity takes place within the territory, or has substantial, direct, and foreseeable effect upon or in the territory; the connections, such as nationality, residence, or economic activity, between the regulating state and the person principally responsible for the activity to be regulated, or between that state and those whom the regulation is designed to protect; the character of the activity to be regulated, the importance of regulation to the regulating state, the extent to which other states regulate such activities, and the degree to which the desirability of such regulation is generally accepted. the existence of justified expectations that might be protected or hurt by the regulation; the importance of the regulation to the international political, legal, or economic system; the extent to which the regulation is consistent with the traditions of the international system; the extent to which another state may have an interest in regulating the activity; and the likelihood of conflict with regulation by another state.
18 19 20 (g) 21 22 23 24 25 26 27 28 (h) (f)
As set forth below, defendants’ proffered arguments with respect to these factors fall well short of a showing of lack of “reasonableness.”
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In support of this factor, defendants boldly
state that the "center of gravity" of events giving rise to defendants' culpability is in Thailand. Def. Mot. At 21. In
making this claim, defendants conveniently ignore the $1,800,000 defendants caused to be wired from the United States to bank accounts all over the world. Defendants also conveniently ignore
the much larger scope of activity in the United States that occurred as a direct result of defendant Juthamas Siriwan awarding contracts to the Greens from 2002-2006, such as the subcontracting with third party companies, and the creation of numerous shell companies to service the tourism contracts. ¶¶ 17, 21, 22. They also fail to mention the significant Ind.
activity that took place at the Los Angeles office of the Tourism Authority of Thailand in connection with awarding the contracts to the Greens.32 Moreover, while defendants would like to claim
that since the film festival was held in Thailand there is a strong link to Thailand, the fact remains that the links are much stronger in the United States and abroad. Indeed, defendants' Ind. ¶ 11.
kickback money did not even make it back to Thailand. Factor (b):
Defendants' sole argument in this regard is
that they are Thai citizens residing in their home country. Defendants fail to cite any authority that stands for the proposition that prosecution of a foreign national living in his or her own home country by itself, makes such prosecution unreasonable.
This fact was proved extensively during the Green trial through the testimony of “Tippi.” 42
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Factor (c):
Defendants incorrectly claim in this category
that as to "the underlying specified acts resting on Thai laws" that Thailand has "asserted the fullest jurisdiction consistent with international law." Def. Mot. at 22. Defendants' further Both assertions
claim that the MLCA has limited jurisdiction. are false.
As discussed further in sub-part 3 below, defendants
have provided no evidence that Thailand has asserted its jurisdiction over this matter in such a way that forecloses prosecution by the United States. Indeed, Thailand has yet to
even consider the United States' interests in this matter as a request for extradition has not been transmitted. As for the
scope of Untied States’ jurisdiction, as discussed previously at length, §1956(f) provides ample jurisdiction to prosecute the defendants pursuant to the statutes charged. Factors (d)-(f): Defendants' have in fact affirmed the United States' own interests in prosecuting this case. As
defendants state in their motion, "the United States has an interest in preventing its financial institutions from being used to launder proceeds of unlawful activity...” Def. Mot. at 21.
Defendants then attempt to attack that interest through arguments that once again fall back on their incorrect claims of the government’s perceived lack of jurisdiction and/or defendants’ claims that Thailand has exercised exclusive jurisdiction. Thailand’s alleged assertion of exclusive jurisdiction will be addressed in sub-part 3 below. Factor (h). Defendants' here attempt to reconcile their
admission that the United States has a legitimate interest in
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this area with their argument that Thailand has a superior interest. Despite defendants' desire for this to be a Def. Mot. at 16, 24. On the
"tie-breaker" situation, it is not.
contrary, there is no tie to be broken in this case. International law plainly recognizes that two sovereigns can reasonably prescribe the same conduct. See Restatement §403(3) &
cmt d (“Exercise of jurisdiction by more than one state may be reasonable for example, when one state exercises jurisdiction on the basis of territoriality and the other on the basis of nationality; or when one state exercises jurisdiction over activity in its territory and the other on the basis of the effect of that activity in its territory”). Moreover, there is “no conflict of regulation by another state.” Restatement § 403(2)(h). There is no tension between
the Thai bribery laws and the extraterritorial application of § 1956(a)(2)(A). Thailand is pursuing allegations completely As stated in Part B
of this Response, the government is not charging the defendants with violations of bribery or the offenses that serve as the SUAs being promoted. Defendants are charged with violating United That
States money laundering laws for promoting those offenses.
Thailand wishes to prosecute defendants for whatever violations of Thai law their conduct represents is not in any way in conflict with the prosecution of the defendants by the United States for using its financial system to promote specified unlawful activities, in violation of § 1956(a)(2)(A). In
addition, and as discussed further below, Section 9 of Thailand’s
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Penal Code poses no conflict – concurrent jurisdiction among nations is a widely recognized and well accepted. 3. Section 9 of Thailand’s Penal Code Is Not An Assertion By Thailand Of Sole Jurisdiction Over The Offenses In The Indictment.
Defendants’ claim that Thai Penal Code Section 9 is an assertion of Thailand’s superior interests or that it provides exclusive or sole jurisdiction in this matter so as to prohibit the United States from prosecuting the defendants is incorrect. Contrary to defendants’ suggestions, Thailand has not claimed a superior interest in this matter, nor has the Thai government, through Section 9 or otherwise, issued a “determined judgment that it has sole jurisdiction over alleged corrupt acts of its officials.” Def. Mot. at 16. Indeed, the United States
has not received any indication, formally or informally, that Thailand has asserted sole jurisdiction over this matter, is claiming superior interests, or has otherwise expressed disapproval of the investigation leading up to the Indictment or the return of the Indictment. (Lopez Decl. ¶2). Thailand is well
aware of the government’s investigation into defendants’ violation of United States’ money laundering laws and has provided, via the Mutual Legal Assistance Process and at the government’s request, materials in connection with the investigation and indictment of the defendants. 3). (Lopez Decl. ¶
Thailand has never claimed sole jurisdiction over these Id. at ¶2. It is up to Thailand, not the defendants,
to make assertions of superior interests or sole jurisdiction. Defendants’ reliance on Section 9 of the Thai Penal Code is
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Section 9 simply affirmatively states that
government officials that commit offenses “as provided in Section 147 to Section 166 . . . outside the Kingdom shall be punished in the Kingdom.” Def. Mot. at 2. This statute does not imply or
suggest exclusive jurisdiction – it is merely an assertion of its own jurisdiction. The statute does not prevent the punishment of
the same defendants by a foreign country (such as the United States) for violations of its own laws. Even assuming that this
was an assertion of sole jurisdiction for those offenses, this section in no way curtails the government’s jurisdiction to prosecute defendants for violations of its money laundering laws. To reiterate, the government is not prosecuting the defendants for violation of Section 147 to Section 166 of the Thai Penal Code. Therefore, Section 9 is completely irrelevant to the
jurisdiction of the United States in this matter. Defendants’ claims in this area also completely ignore the well-accepted practice of concurrent jurisdiction. As the
Permanent Court of International Justice recognized in its seminal Lotus decision, customary international law permits concurrent jurisdiction. When a course of conduct crosses
national borders “[i]t is only natural that each [nation] should be able to exercise jurisdiction and to do so in respect of the incident as a whole. It is therefore a case of concurrent jurisdiction.” The Case of the S.S. "Lotus," P.C.I.J., Ser. A,
No. 10, at 30-31 (1927); see also United States v. Corey, 232 F.3d 1166, 1179 (9th Cir. 2000)(“[t]hus, concurrent jurisdiction as such raises no eyebrows among international lawyers.”) The
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Restatement itself notes that § 403(3) “applies only when one state requires what another prohibits, or where compliance with the regulations of two states exercising jurisdiction consistently with this section is otherwise impossible. It does
not apply where a person subject to regulation by two states can comply with the laws of both.”). not present here. Moreover, purported tensions with Thailand arising from the extraterritorial application of '1956(a)(2)(A) are best left to the political branches of the respective governments to sort out. Id. at n.9 (“we must presume that the President has evaluated the foreign policy consequences of such an exercise of U.S. law and determined that it serves the interests of the United States”); accord Restatement, § 403(3), cmt e (“Subsection (3) is addressed primarily to the political departments of government, but it may be relevant also in judicial proceedings”). In that vein, the United States and Thailand have an extradition treaty in force which will require the Thailand, through its own judicial process, to decide whether to approve defendants’ extraditions. Extradition Treaty with Thailand, In That type of conflict is simply
U.S.-Thail, Dec. 14, 1983, S. TREATY DOC. NO. 98-16 (1984).
addition, if the extraditions are approved by the judiciary, the Thai executive branch will decide whether to actually surrender the defendants to the United States. In considering the United
States’ extradition requests, Thai officials will, inter alia, determine if the defendants’ money laundering activities charged in the Indictment constitute an extraditable offense under the
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treaty (Article 1).
Thai officials, even if they approve the
defendants’ extraditions, could delay the surrender until any possible Thai prosecution and sentence has been completed (Article 12). Perhaps most significantly, Article 4 of the treaty, entitled “Dual Jurisdiction,” provides “The Requested State may refuse to extradite a person claimed for a crime which is requested by its laws as having been committed in whole or in part in its territory, or in a place treated as its territory, provided it shall proceed against the person for that crime according to its laws.” This provision would allow Thailand to
deny the United States requests for defendants' extraditions if they choose to prosecute them for money laundering. As a result,
the extradition treaty provides established mechanisms for Thailand and the United States to accommodate any foreign relations concerns which either may perceive in this case. Defendants' arguments and conclusory statements in this area are nothing more than an attempt to convince this Court to ignore the process for resolving the order of prosecution among nations (set out through the extradition process), ignore the statutory authority set out by Congress regarding extraterritorial application of the MLCA (as set forth by § 1956(h)), and distort the application of customary international law. There has been
no violation of international law and defendants' motion should be denied.
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III. CONCLUSION Under the present circumstances, this Court should DENY defendants’ motion to dismiss. DATED: September 9, 2011 Respectfully submitted, ANDRÉ BIROTTE JR. United States Attorney ROBERT E. DUGDALE Assistant United States Attorney Chief, Criminal Division JENNIFER SHASKY CALVERY Chief, Asset Forfeiture and Money Laundering Section Criminal Division United States Dept. of Justice /s/ JONATHAN E. LOPEZ Deputy Chief, Asset Forfeiture and Money Laundering Section Criminal Division United States Dept. of Justice Attorneys for Plaintiff UNITED STATES OF AMERICA
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DECLARATION OF JONATHAN E. LOPEZ I, Jonathan E. Lopez, declare as follows: 1. I am a Deputy Chief in the Asset Forfeiture and Money
Laundering Section of the Criminal Division of the United States Department of Justice. I am one of the attorneys currently
assigned to the above-captioned matter. 2. To my knowledge, the government has not received any
indication, formally or informally, that Thailand has expressed disapproval of with the government’s investigation leading up to the Indictment or as a result of the return of the Indictment. Thailand similarly has not indicated to the United States that it has sole jurisdiction over this matter. 3. The government has cooperated with Thailand via the
Mutual Legal Assistance Process, pre and post Indictment on the instant matter as well as on the related case United States v. Green, CR-08-59-JW. I declare under penalty of perjury that the foregoing is true and correct to the best of my knowledge and belief. DATED: September 9, 2011 /s/ JONATHAN E. LOPEZ
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