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United States v. Howard

July 01, 2005

UNITED STATES
v.
LORRAINE HOWARD



The opinion of the court was delivered by: J.m. Kelly, J.

CRIMINAL ACTION

MEMORANDUM AND ORDER

Presently before the Court is Defendant Lorraine Howard's Motion to Dismiss counts fourteen through fifty-two of her indictment. Counts one through thirteen of the indictment, not contested here, charge Howard with bank and wire fraud. Counts fourteen through fifty-two allege violations of 18 U.S.C. §§ 1956 and 1957. For the reasons that follow, Howard's Motion to Dismiss counts fourteen through fifty-two is denied.

I. The Motion to Dismiss Standard

The purpose of a motion to dismiss the indictment is to question the sufficiency of the indictment to charge an offense. United States v. Sampson, 371 U.S. 75, 78-79 (1962). The indictment "must be taken as a whole, read reasonably and given fair construction." United States v. Schramm, 75 F.3d 156, 162 (3d Cir. 1996). The indictment is sufficient if it contains the elements of the charged offense and informs the defendant of the charge which must defended against. See Hamling v. United States, 418 U.S. 87, 117 (1974). The indictment must also enable the defendant to plead a prior acquittal or conviction to preclude future prosecutions for the same offense. Id. The words of the indictment therefore must "themselves fully, directly, and expressly, without any uncertainty or ambiguity, set forth all the elements necessary to constitute the offense intended to be punished." Hamling, 418 U.S. at 117.

II. The Money Laundering Charge

A. § 1956

To prove its case under the money laundering statute, 18 U.S.C. § 1956, the government must show four elements:

"(1) an actual or attempted financial transaction (2) involving the proceeds of specified unlawful activity; (3) knowledge that the transaction involves the proceeds of some unlawful activity; and (4) either (a) an intent to promote the carrying on of specified unlawful activity, or (b) knowledge that the transaction is designed to promote the underlying specified unlawful activity or 'to conceal or disguise the nature [or] the source ... of the proceeds of specified unlawful activity.'" United States v. Morelli, 169 F.3d 798, 804 (3d Cir. 1999) (citing 18 U.S.C. § 1956(a)(1)). None of these requirements is very rigorous, however. Perhaps in recognition of this, Howard contests only the crime's fourth element in her motion.

A. Counts Fourteen through Twenty-one

Counts fourteen through twenty-one allege that wire transfers from Howard's business account at CoreStates Bank ("CoreStates") to Sean Tucker, an alleged victim of Howard's fraud, and to a nursing home violated 18 U.S.C. § 1956(a)(1)(A)(I). Defendant argues that the return of money to a person she defrauded does not demonstrate the intent to promote her bank fraud scheme, and she therefore lacked the requisite mens rea for the crime.

The Third Circuit has interpreted the "intent to promote the carrying on of specified unlawful activity" prong of the money laundering statute broadly. See United States v. Paramo, 998 F.2d 1212, 1215 (3d Cir. 1993) (holding jury could infer that Defendant had intent to promote antecedent mail fraud by cashing embezzled IRS checks). For example, in United States v. Conley, the Third Circuit again addressed the "intent to promote" prong and found that money paid to repair and purchase poker machines was intended to promote an illegal gambling scheme. Conley, 37 F.3d 970, 979 (3d Cir. 1994) (citing United States v. Jackson, 935 F.2d 832 (7th Cir. 1991) (holding that purchasing beepers promoted drug activity)). The common theme running through these cases is that "promotion" generally means the advancing or furthering the illegal activity. See e.g., id.

The Third Circuit's expansive view of "promotion" undermines Howard's argument. Assuming the indictment's allegations to be true, a jury might find the withdrawals made from Howard's CoreStates account to make a refund to Mr. Tucker might have enabled Howard to continue her scheme to defraud other clients. The jury might also find that the monthly payments to the nursing home where her client's mother resided could give her client the impression that her money had legitimately been invested, further enabling her scheme. These conceivable findings of advancement or furtherance ...


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