Opinion ID: 3010610
Heading Depth: 1
Heading Rank: 3

Heading: The Bad Checks Scam. Between October 23 and

Text: October 25, 1991, Steve Houran deposited at BBV four worthless checks, totaling about $2.4 million, from Kassem Alaouie into the account of Houran Trading Company. HTC's account, which had held around $3,000, swelled mightily. But Steve Houran was aware that he must act fast to benefit from the deposits, for Alaouie had only $1,200 in the account on which the checks were written. Between October 23 and October 29, 1991, Steve Houran wrote ten checks totaling $2,527,812.15 on the HTC account, causing an overdraft of over $100,000, and transferred the money into accounts controlled by the Hourans in banks in New Jersey. One of the checks on the HTC account, written by Steve on October 25, 1991, was to Tony in the amount of $55,000. Tony deposited it in his account at First Fidelity Bank in New Jersey. On October 31, 1991 he opened a new checking account at Citizens First Bank in New Jersey and wrote a check for $25,000 on the First Fidelity account. He deposited this check in the new checking account at Citizens First. On October 28, 1991 Steve Houran also wrote a check on the HTC account at BBV for $150,000 payable to Izdehar Houran, Tony's wife. Tony helped his wife open a new account at National Community Bank in New Jersey, in which this check was deposited. On October 31, 1991 Izdehar withdrew the entire amount with a check payable to Tony, which he deposited at a newly-opened savings account at Citizens First. By December 16, 1991 Tony had transferred $125,000 from the savings account to his checking account at Citizens First. On December 16 Tony wrote a certified check on this account made out to himself for $150,000, which he deposited at the HCC account at 5 First Fidelity. The government convincingly contends that this movement of money was in aid of Steve Houran's fraud on BBV in depositing Alaouie's bad checks and immediately drawing on the HTC account before their worthlessness had been determined. In addition, Tony Houran assisted the fraud in two other ways. When BBV discovered that the Alaouie checks had not cleared, it sought return of the money and, pending restitution, collateral to secure the return. The Houran brothers furnished real estate purporting to have equity in it; in none of the property, including that pledged by Tony, did the Hourans have equity. Tony's second assistance to the fraud was his support of Steve's story of how he had happened to receive the Alaouie checks. According to Steve, he had sold a collection of goods consisting of army boots, blankets, canned tuna, corned beef, sardines, shoes, and sweaters for $3,625,000 to a buyer in Lebanon, who paid the first installment of $2,400,000 by checks to Kassem Alaouie as the broker in the sale; Steve said he had accompanied Alaouie to the bank when the Lebanese checks were deposited and had been assured that they were good; it was a surprise to him when they did not clear, leaving the Alaouie checks to HTC worthless. This tale was of whole cloth, a figment of Steve's imagination. Tony, however, attempted to corroborate it by his deposition on January 5, 1992 testifying that the international deal had taken place and that he had seen Alaouie in Steve's office negotiating the sale. The indictment charged that the fraud, began in October 1991, had continued through February 1992, so that the deposition occurred as the attempt to keep the fraud alive was in progress. As participant in hiding the money taken, as fraudulent provider of collateral, and as perjurious deponent, Tony Houran abetted his brother's swindle of BBV. V. Conspiracy to Make False Statements To BBV and To Commit Perjury. Tony Houran was also indicted for conspiring with his brothers to deceive BBV as to the collateral offered and to lie under oath in his deposition given in BBV's collection action. The lies were, as already noted, part of his aid to Steve Houran in the bad check caper. Tony was properly convicted of violation of 18 U.S.C. 6 S 371, an offense distinct from the individual actions he committed. VI. Money Laundering. Tony Houran was indi cted for, and convicted of, money laundering by his withdrawal of $100,000 from the Petra Construction Co. account on August 5, 1991 by a check payable to the trust account of his lawyer Raymond Murphy, who in turn used the money to pay the mortgage on the Hourans' residence. The reshuffle of a portion of the funds obtained by Steve Houran through the Webster Avenue bank fraud constituted money laundering, that is, the concealment of the bank fraud as well as furtherance of the fraud by concealment. Money laundering must be a crime distinct from the crime by which the money is obtained. United States v. Conley, 37 F.3d 970, 980 (3rd Cir. 1994). The money laundering statute is not simply the addition of a further penalty to a criminal deed; it is a prohibition of processing the fruits of a crime or of a completed phase of an ongoing offense. Id. at 979. The check to Murphy was the same check referred to in the charge of abetting Steve Houran in the bank fraud involved in the Webster Avenue loans. It could be objected that the act charged as money laundering was not distinct from one of the acts charged as aiding and abetting bank fraud. This objection was not raised at trial; the error, if any, was therefore forfeited, and we review it under the criteria governing our exercise of review under Fed. R. Crim. P. 52(b). A majority of the court is of the opinion that it is sufficient under Conley that a distinct phase of the bank fraud have been completed before the act of money laundering was committed. The majority views the bank fraud which Steve Houran committed and of which the check Tony Houran wrote constituted proceeds, as having already been completed at the time Tony Houran wrote the check. Judge Noonan does not agree with this approach. In the light of the division of the court he does believe that the error, if any, does not meet the criteria set for the recognition of plain error by United States v. Olano, 507 U.S. 725, 730 (1993).