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

Heading: Customer or Beneficiary Instruction (Counts One, Two, and Three)

Text: Banki next argues that the district court erred by refusing to instruct the jury that a mere customer or beneficiary of a hawala transaction cannot be held criminally liable, either as an aider and abettor on Counts Two and Three, or as a conspirator on Count One. [12] With respect to the money-transmitting count, Banki argues that the district court erred by refusing to instruct the jury that a mere customer or beneficiary of an unlicensed money-transmitting business is exempt from criminal liability. In so arguing, Banki draws an analogy between his case and this Court's case law excepting certain minor participants in (1) illegal gambling businesses and (2) drug transactions from criminal liability. Banki's reliance on these cases is misplaced. First, as to the gambling analogy, Count Three charges Banki with violating 18 U.S.C. § 1960, which imposes criminal penalties on a person who knowingly conducts, controls, manages, supervises, directs, or owns all or part of an unlicensed money transmitting business. 18 U.S.C. § 1960(a). Similarly, 18 U.S.C. § 1955 which was the model for § 1960, see S.Rep. No. 101-460, at 15 (1990)imposes criminal sanctions on any person who conducts, finances, manages, supervises, directs, or owns all or part of an illegal gambling business. 18 U.S.C. § 1955(a). We have interpreted 18 U.S.C. § 1955 to prohibit a broad range of conduct: the statute reaches not only the upper, but also the lower, echelon of a gambling business, including agents, runners, independent contractors, and salesmen. United States v. Grezo, 566 F.2d 854, 857 (2d Cir.1977); United States v. Becker, 461 F.2d 230, 232 (2d Cir.1972), vacated on other grounds, 417 U.S. 903, 94 S.Ct. 2597, 41 L.Ed.2d 208 (1974). Mere betting customers, however, do not conduct the gambling business within the meaning of § 1955. Grezo, 566 F.2d at 857. But not all bettors are isolated from criminal liability under § 1955. In Grezo, the defendant, who was an independent bookmaker who placed layoff bets with a larger gambling business that was the target of the indictment, was accused of conducting the target gambling business. Id. at 857-58. Rejecting the defendant's argument that he was a mere bettor or customer, we held that when otherwise independent bookmakers [whose gambling businesses do not meet the definition of `business' under § 1955] regularly place consistent, substantial layoff bets with a gambling business [as defined by § 1955], they should be considered to `conduct' that business within the meaning of § 1955, despite any superficial similarity which their activities may bear to those of the average customer. Id. at 859. In so holding, we reasoned that because a layoff bettor's bets help a bookmaker balance his own book of bets and maintain a uniform line among bookmakers, the bookmaker and defendant layoff bettor shared a community of interest, which separated the layoff bettor from a mere bettor. Id. at 859. Second, Banki draws an analogy to Abuelhawa v. United States, 556 U.S. 816, 129 S.Ct. 2102, 173 L.Ed.2d 982 (2009). In Abuelhawa, the defendant placed six phone calls to arrange two one-gram cocaine purchasestransactions that amount to misdemeanors under the Controlled Substances Act, 21 U.S.C. § 844. 129 S.Ct. at 2104. Instead of charging Abuelhawa with misdemeanors, however, the government charged Abuelhawa with, and obtained convictions on, six felony counts of using a communication facility to facilitate drug distribution, 21 U.S.C. § 843(b). 129 S.Ct. at 2104. The Supreme Court reversed Abuelhawa's convictions, reasoning that where a statute treats one side of a bilateral transaction more leniently, adding to the penalty of the party on that side for facilitating the action by the other would upend the calibration of punishment set by the legislature. Id. at 2106. Even assuming, however, that a mere customer or beneficiary exemption, as requested by Banki, applies in the context of § 1960, we would conclude that Banki was not entitled to such an instruction. A defendant is entitled to a jury instruction on a defense theory for which there is any foundation in the evidence. United States v. Russo, 74 F.3d 1383, 1393 (2d Cir.1996) (emphasis added) (internal quotation marks omitted). Here, there was no foundation in the evidence for a mere customer or beneficiary instruction. Banki was convicted of facilitating the transfer of money to Iran, not with receiving money from Iran. The Indictment alleged in Count Three that Banki effectuated, and aided and abetted, the transfer of [funds] ... to residents within Iran. (Indictment ¶ 22 (emphasis added)). In addition, the district court repeatedly instructed the jury that it was Banki's role in the transfer of funds to Iran, not his receipt of funds from Iran, that potentially subjected him to criminal liability. ( See Tr. 1629:13-23 (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.... I remind you that the defendant is charged with sending money to Iran, not with receiving money from Iran.); see Tr. 17:9-11 ([Banki] is not charged with transmitting money or services to the Iranian government; he is charged with sending money to people in Iran.)). Thus, the jury could only convict Banki for money-transmitting for his role in transferring funds to Iran. With respect to the transfer of funds to Iran, Banki's role was that of an intermediarynot a customer or beneficiary. By finding Banki guilty on the money-transmitting count, the jury necessarily found that Banki knew that he was facilitating the transfer of funds to Iran. See 18 U.S.C. § 1960(a). The defense argues that if Banki had the requisite knowledge with respect to any transaction, it was only the $6,000 transaction. But even with respect to that transaction, Banki was an intermediary not a customer or beneficiary. Simply put, where the crime charged is transmitting money to Iran without a license, the customer is the wire originator and/or the intended recipient. Nor was Banki entitled to a mere customer or beneficiary instruction on the ITR count. The ITR count charged Banki with violating the ITR by providing money transfer services, through the operation of a `hawala' informal value transfer system, to persons in Iran. (Indictment ¶ 20 (emphasis added)). In other words, Banki was accused of being the supplier of the unlawful servicenot a customer or beneficiary. Thus, to give a mere customer or beneficiary instruction on the ITR count at Banki's trial would be the equivalent of giving such an instruction at the trial of Abuelhawa's drug dealer. Accordingly, there was no foundation in the evidence for Banki's requested instruction. See Russo, 74 F.3d at 1393. Finally, Banki was not entitled to a mere customer or beneficiary instruction on the conspiracy count. In support of such an instruction, Banki relies on the buyer-seller exception in this Court's conspiracy case law. To prove a conspiracy, the evidence must show that `two or more persons agreed to participate in a joint venture intended to commit an unlawful act.' United States v. Parker, 554 F.3d 230, 234 (2d Cir.2009) (quoting United States v. Desimone, 119 F.3d 217, 223 (2d Cir.1997)). Although, [a]s a literal matter, when a buyer purchases illegal drugs from a seller, two persons have agreed to a concerted effort to achieve the unlawful transfer of the drugs from the seller to the buyer, we have carved out a narrow exception to the general conspiracy rule for such transactions. Id. at 234. This exception is intended to preserve[] important priorities and distinctions of the federal narcotics laws, which would otherwise be obliterated. Id. It is the buyer the less culpable partywho may take advantage of the buyer-seller exception. Id. Given that Banki was accused of conspiring to export a service to Iran and operate an unlicensed money-transmitting business that remitted funds to Iran, there is no basis in the evidence to conclude that Banki was the equivalent of the buyer, even if the buyer-seller exception were extended to the present facts. Thus, the district court properly declined to give Banki's requested mere customer or beneficiary instruction on the Conspiracy Count. In sum, the district court properly denied Banki's request for an instruction that, if the jury found that Banki acted as a mere customer or beneficiary of a hawala transaction or unlicensed transmittal service, it could not hold Banki liable either as an aider and abettor under Counts Two and Three or as a conspirator under Count One.