Opinion ID: 4017397
Heading Depth: 3
Heading Rank: 2

Heading: The Money Laundering Theory of Forfeiture

Text: The Government’s second civil forfeiture claim arises under the money laundering statutes. In relevant part, the civil forfeiture statute states: (a)(1) The following property is subject to forfeiture to the United States: (A) Any property, real or personal, involved in a transaction or attempted transaction in violation of section 1956, 1957 or 1960 of this title, or any property traceable to such property. 18 U.S.C. § 981(a)(1)(A). To show that the property was “involved in” such a transaction, the Government has the burden of proving that “there was a substantial connection between the property and the offense.” Id. § 983(c)(3). The Government claims that Alavi and 650 Fifth Ave. Co. committed a forfeitable offense by committing three types of money laundering violations prohibited by 58 § 1956: promotion money laundering, concealment money laundering, and international money laundering. In relevant part, § 1956 states: (a)(1) Whoever, knowing that the property involved in a financial transaction represents the proceeds of some form of unlawful activity, conducts or attempts to conduct such a financial transaction which in fact involves the proceeds of specified unlawful activity— (A) [Promotion] (i) with the intent to promote the carrying on of specified unlawful activity; or (ii) with intent to engage in conduct constituting a violation of section 7201 or 7206 of the Internal Revenue Code of 1986; or (B) [Concealment] knowing that the transaction is designed in whole or in part—(i) to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity [shall be guilty of an offense] . . . . (a)(2) [International] 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; or (B) knowing that the monetary instrument or funds involved in the transportation, transmission, or transfer represent the proceeds of some form of unlawful activity and knowing that such transportation, 59 transmission, or transfer is designed in whole or in part—(i) to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity; or (ii) to avoid a transaction reporting requirement under State or Federal law, shall be [guilty of an offense]. Id. § 1956(a)(1)(A)–(B), (a)(2). Knowledge of unlawful activity—or intent to carry out an unlawful activity—is an element of every one of the three money laundering offenses. To secure summary judgment based on promotion or concealment money laundering, the Government must show, inter alia, that there is no genuine dispute that the Claimants knew that “property involved in a financial transaction represents the proceeds of some form of unlawful activity.” Id. § 1956(a)(1). To secure summary judgment based on international money laundering, the Government must show, inter alia, no genuine dispute that the Claimants either (1) intended to promote the carrying on of a specified unlawful activity, or (2) knew that the funds being transferred were proceeds of specified unlawful activity. Id. § 1956(a)(2); accord United States v. Ness, 565 F.3d 73, 77 (2d Cir. 2009). 60 Here, the Government alleges that the Claimants engaged in proscribed money laundering by committing IEEPA violations. As discussed above, however, whether Claimants violated the IEEPA depends on the disputed question of Claimant Alavi’s knowledge of Bank Melli’s post‐1995 control of Assa, which gives rise to a triable issue as to its culpable intent in providing services to Assa pursuant to their partnership in 650 Fifth Ave. Co. These material issues preclude determining Claimants’ involvement in money laundering violations as a matter of law and, thus, require us to vacate the award of summary judgment on this claim for forfeiture and to remand the case for further proceedings.27