Opinion ID: 615921
Heading Depth: 3
Heading Rank: 2

Heading: Money Transmitting Instructions (Counts One and Three)

Text: Count Three charged Banki with conducting, or aiding and abetting the conduct of, an unlicensed money-transmitting business, in violation of 18 U.S.C. § 1960. Under § 1960, [w]hoever knowingly conducts, controls, manages, supervises, directs, or owns all or part of an unlicensed money transmitting business is subject to criminal penalties. 18 U.S.C. § 1960(a). As used in § 1960: the term `unlicensed money transmitting business' means a money transmitting business which ...  (A) is operated without an appropriate money transmitting license in a State where such operation is punishable as a misdemeanor or a felony under State law, ...; (B) fails to comply with the money transmitting business registration requirements under [31 U.S.C. § 5330, which require money-transmitting businesses to register with the Secretary of the Treasury] ...; or (C) otherwise involves the transportation or transmission of funds that are known to the defendant to have been derived from a criminal offense or are intended to be used to promote or support unlawful activity.... Id.; see 31 U.S.C. § 5330(a)(1) (Any person who owns or controls a money transmitting business shall register the business (whether or not the business is licensed as a money transmitting business in any State) with the Secretary of the Treasury....). New York, where Banki lived during the relevant time period, prohibits engag[ing] in the business of transmitting money without a license, and violators can be convicted of a misdemeanor or felony, depending on the amount transmitted. N.Y. Banking Law §§ 641, 650 (McKinney 2011). It is undisputed that Banki neither possessed a New York money-transmitting license nor registered with the Secretary of the Treasury. Section 1960 defines money transmitting broadly: `money transmitting' includes transferring funds on behalf of the public by any and all means including but not limited to transfers within this country or to locations abroad by wire, check, draft, facsimile, or courier. Id. § 1960(b)(2). The parties do not dispute that transferring funds through a hawala qualifies as money transmitting under § 1960. Relying on this Court's definition of money transmitting business in United States v. Velastegui , Banki argues that the district court, in instructing the jury, erred by failing to define money transmitting business as (1) an enterprise (not a single transaction) (2) that is conducted for a fee or profit. See United States v. Velastegui, 199 F.3d 590, 592, 595 n. 4 (2d Cir.1999) (defining a money transmitting business as the transmission of money for a fee involving more than a single, isolated transmission of money). Banki requested such an instruction below, [10] but the district court declined to give it, instructing the jury instead as follows: The term money transmitting business includes any business which provides check cashing, currency exchange or money transmitting or remittance services or issues or redeems money orders, travelers checks and other similar instruments or any other person who engages as a business in the transmission of funds, including any person who engages as a business in an informal money transfer system or any network of people who engage as a business in facilitating the transfer of money domestically or internationally outside of the conventional financial institutions system. It is for you to determine whether the quantity and nature of the transmittals constitute a business. However, I instruct you that a hawala is a money transmitting business. The district court, in denying Banki's Rule 33 motion, explained that it declined to define business because the term is self-explanatory: A business is not a complex or legal concept. No juror needs a judge's charge of law to comprehend that a `business' is an ongoing enterprise carried out for financial gain; there is no other interpretation of the term `business' the jury could have possibly applied. Banki, 733 F.Supp.2d at 417; cf. Vargas v. Keane, 86 F.3d 1273, 1283 (2d Cir.1996) (Weinstein, J., concurring) (The phrase `reasonable doubt' is self-explanatory and is its own best definition. (internal quotation marks and citation omitted)). While we largely agree with the district court that the term business is self-explanatory, we conclude that the district court erred in its charge here. First, Banki's requested charge was legally correct. Han, 230 F.3d at 565. [11] In United States v. Velastegui , we held that an agent could [not] face federal criminal prosecution [under § 1960] ... for an isolated instance of improper transmittal of money because section 1960(a) requires that the unlicensed entity be `an illegal money transmitting business.' 199 F.3d at 595 n. 4. Thus, to find a defendant liable for operating an unlicensed money transmitting business, a jury must find that he participated in more than a single, isolated transmission of money. See id. Likewise, giving the term business its plain and unambiguous meaning, see United States v. Fuller, 627 F.3d 499, 504 (2d Cir.2010), under § 1960 a business is an enterprise that is carried on for profit or financial gain. See Merriam-Webster's Collegiate Dictionary 1067 (10th ed.2000) (defining business as a commercial or sometimes an industrial enterprise); Webster's II New Riverside University Dictionary (1994) (defining business as a commercial enterprise or establishment). See Velastegui, 199 F.3d at 592 (A money transmitting business receives money from a customer and then, for a fee paid by the customer, transmits that money to a recipient.... (emphasis added)). Second, there was a foundation in the [trial] evidence, United States v. Russo, 74 F.3d 1383, 1393 (2d Cir.1996), for Banki's request for an instruction that a business must involve more than a single, isolated transaction. The evidence at trial was such that a rational jury could have concluded that the government proved beyond a reasonable doubt that Banki knew funds were moving to Iran in only one transaction: the $6,000 Sheikholeslami transaction. Although the e-mails associated with the $6,000 transaction clearly showed that Banki knew that funds were moving to Iran as part of the transaction, e-mails relating to other hawala transactions were far less explicit. In addition, Bakhtiari's testimony and ledgers supported the inference that Bakhtiari was not involved in the $6,000 transaction; thus, the jury could have concluded, as the defense argued, that the $6,000 transaction was a one-time favor for a family friend. The jury could have concluded that the government failed to prove that Banki knew funds were moving to Iran in more than one transaction, and, accordingly, Banki was entitled to the substance of his requested instructionthat he could not be convicted under § 1960 for a single, isolated transmission of money. Third, the district court compounded the problem by stating, in its charge to the jury: I instruct you that a hawala is a money transmitting business. By doing so, the district court arguably relieved the government of its burden of proving that Banki's knowledge that money was moving to Iran extended beyond the $6,000 transaction. See 18 U.S.C. § 1960 (prohibiting knowingly conducting an unlicensed money transmitting business); Velastegui, 199 F.3d at 592, 595 n. 4 (holding that a money transmitting business must involve more than a single, isolated transmission of money). In its background instructions, the district court had charged the jury, In this case you have heard allegations that the defendant operated a hawala, an unlicensed value transfer system, through which money was sent to Iran. (Tr. at 1629:13-15 (emphasis added)). By later instructing the jury that a hawala is a money transmitting business, the district court arguably was instructing the jury that if it found that Banki operated a hawala, then he necessarily operated a money transmitting business, thereby taking the latter issue away from the jury. Simply put, looking at the charge in the context of the entire trial, we are uncertain of the theory on which the jury chose to convict. Accordingly, we vacate Banki's convictions on Count One (to the extent it alleged that Banki operated an unlicensed money-transmitting business in violation of 18 U.S.C. § 1660) and Count Three and remand for a new trial.