Opinion
99 Cr. 75 (SWK)
January 29, 2004
OPINION AND ORDER
Pro se defendant, Roberto Beras, moves this Court, pursuant to Rule 12(b)(2) of the Federal Rules of Criminal Procedure to dismiss the indictment charging him with 82 counts of money laundering and structuring transactions to evade reporting requirements in violation of 18 U.S.C. § 1956 and 31 U.S.C. § 5324. Beras essentially asserts that this Court lacked jurisdiction over his criminal activities because the federal government did not have exclusive jurisdictional authority over the geographical location where the criminal activities took place. For the reasons set forth below, Beras' motion is denied.
Beras' motion is entitled: "Motion to Dismiss for Lack of Territorial Jurisdiction."
The Court notes that pursuant to a 2002 Amendment to Federal Rule of Criminal Procedure 12, it is apparent that Rule 12(b)(3)(B), rather than Rule 12(b)(2), encompasses the rule regarding challenges to the court's jurisdiction. Rule 12(b)(3)(B) states: "[A]t any time while the case is pending, the court may hear a claim that the indictment or information fails to invoke the court's jurisdiction. . . ." Fed.R.Crim.P. 12(b)(3)(B). The new Rule 12(b)(2) states: "Motions That May Be Made Before Trial. A party may raise by pretrial motion any defense, objection, or request: that the court can determine.1 without a trial of the general issue." Fed.R.Crim.P. 12(b)(2).
I. BACKGROUND
On December 4, 2000, Beras was convicted by a jury of one COUNT of conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h); one count of conspiracy to evade currency repairing requirements, in violation of 18 U.S.C. § 371; 33 counts of international money laundering, in violation of 18 U.S.C. § 2 and 1956(a)(2)(B); seven counts of money laundering, in violation of 18 U.S.C. § 2 and 1956(a)(3); 33 counts of evading currency reporting requirements by structuring financial transactions, in violation of 18 U.S.C. § 2 and 31 U.S.C. § 5324 (3); and seven counts of evading currency reporting requirements by causing a domestic financial institution to fail to file a currency transaction report, in violation of 18 U.S.C. § 2 and 31 U.S.C. § 5324(a)(1). On November 21, 2001, he was sentenced to a total of 292 months imprisonment, 3 years supervised release, a $4,100.00 special assessment, and was additionally subject to an order of forfeiture in the amount of $10 million.
Defendant Dinero Express, Inc., a money remitter agency with its headquarters located in New York, New York that transmitted funds to and from the Dominican Republic and other countries., Defendant Roberto Beras, Vice-President of Dinero Express, Inc., and other co-conspirators transported funds from their offices in the United States to their offices in Puerto Rico, the Dominican Republic and Columbia, knowing that the transported funds represented proceeds derived from some form of unlawful activity, including narcotics activities. Dinero Express, Inc., Beras, and other co-conspirators subdivided funds received at Dinero Express, Inc. locations within the United States into amounts below $10,000. These funds were remitted to Puerto Rico and to the Dominican Republic, using false names and addresses for the purported senders of the funds, to hide the source of the funds and to avoid currency transaction reporting requirements. Additionally, Dinero Express, Inc. and Beras physically transported these funds from the United States to the Dominican Republic, Colombia, Aruba, and Curacao.
The Second Circuit affirmed Beras' conviction on December 20, 2002. However, on February 21, 2003, the Second Circuit granted Beras' motion to recall the mandate to allow Beras to request an en banc hearing out of time. The motion for an en banc hearing is still pending, and the mandate has not yet reissued from the Second Circuit. Beras filed the instant motion on July 2, 2003.
II. DISCUSSION
Prior to a 2002 Amendment to the Federal Rules of Civil Procedure Rule 12, subsection (b)(2) of Rule 12 stated objections that the indictment "failed to show jurisdiction in the court . . . shall be noticed by the court at any time during the pendency of the proceedings." Fed.R.Crim.P 12(b)(2). Presently, Federal Rules of Civil Procedure Rule 12(b)(3)(B), rather than Rule 12(b)(2), encompasses the rule regarding objections to the court's jurisdiction. Rule 12(b)(3)(B) states [A]t any time while the case is pending, the court may hear a claim that the indictment or information fails to invoke the court's jurisdiction. . . ." Fed.R.Crim.P. 12(b)(3)(B). Beras' two main arguments in support of his motion to dismiss the indictment for lack of territorial jurisdiction are as follows; (1) The federal government and this Court lack territorial jurisdiction over this case because the federal government does not have control over the geographical location where the crime took place and because the federal government may not investigate Dinero Express, Inc. because Dinero Express, Inc. was regulated by the New York State Banking Commission, a State agency. (2) The money laundering statute, 18 U.S.C. § 1956, does not fall within Congress's Commerce Clause power. Beras arguments are incorrect.
A. Defendant's Motion to Dismiss for Lack of Territorial Jurisdiction
[U]nder the U.S. Constitution, the federal government may regulate conduct occurring anywhere in the fifty states so long as it sufficiently implicates one of the national government's enumerated powers, such as the power over interstate commerce." United States v. Carnes, 113 F. Supp.2d 1145, 1150 (E.D. Mich. 2000). Both the state and federal governments have the authority to regulate certain forms of conduct occurring within each state. The federal government also has power to investigate and prosecute a private money remitter agency that violates a valid federal law, despite the fact that the institution is regulated by a State agency. Accordingly, because Beras' criminal conduct occurred in the United States it is irrelevant that the federal government has not attempted to demonstrate that Beras' activity occurred in some zone of exclusively federal `territorial' jurisdiction." Id. Further, that the New York State Banking Commission regulates Dinero Express, Inc. is of no consequence.
The next issue is whether the money laundering statute, 18 U.S.C. § 1956, comes within Congress's enumerated powers, specifically its Commerce Clause authority. In United States v. Lopez 514 U.S. 549 (1995), the United States Supreme Court held that where economic activity substantially affects interstate commerce [congressional] legislation regarding that activity will be sustained." Id. at 560. The Second Circuit has held that section 1956 has "everything to do with commerce" and that money laundering is an economic activity.United States v. Goodwin 141 F.3d 394, 399 (2d Cir. 1997). The Second Circuit wrote
money laundering is a quintessential economic activity. Indeed, it is difficult to imagine a more obviously commercial; activity than engaging in financial transactions involving the profits of unlawful activity. This is particularly so where the intent of the transaction is to conceal the source of those profits or to promote the unlawful activity and thereby yield even greater economic rewards.Id. Further, the Court stated that money laundering "substantially affects interstate commerce" and that `money laundering is the archetypical activity which, while in isolation may not: affect interstate commerce, undoubtedly will have ramifications in interstate commerce when taken in the aggregate.' Id. (quoting United States v. Leslie, 103 F.3d 1093, 1100 (2d Cir. 1997). Accordingly, this Court finds that Beras' argument that Section 1956 does not fall within Congress's Commerce power has no merit and the Court rejects Beras' objection to the Court's jurisdiction over his case.
The Second Circuit also stated when the underlying criminal activity is narcotics trafficking, which is the case here, it is particularly apparent that Section 1956 regulates economic activity that has a substantial effect on interstate commerce:
The conclusion that § 1956 concerns obviously economic activity having a substantial effect on interstate commerce is especially clear in appellant['s] . . . case. Section 1956 is not a free-standing statute; it criminalizes only financial transactions involving the proceeds of unlawful activity specified in § 1956(c)(7). One such specified unlawful activity — the one underlying the appellants' money laundering convictions — is narcotics trafficking, as defined by the Comprehensive Drug Abuse Prevention and Control Act of 1970, 21 U.S.C. § 801 et seq. (the"Controlled Substances Act"). We have repeatedly held that the Controlled Substances Act concerns an obviously economic activity substantially affecting interstate commerce, namely, narcotics trafficking, and have sustained the Act against criminal defendants' Lopez challenges.Id.(internal quotations omitted).
The Court also notes that the actual transactions in this case substantially affected interstate and foreign commerce. For example, drug traffickers delivered cash to Dinero Express, Inc. headquarters in New York, Dinero Express, Inc. remitted those funds to the Dominican Republic, and Dinero Express, Inc. then paid the drug traffickers the cash in the Dominican Republic. Additionally, Beras transported these funds to the Dominican Republic and other countries.
III CONCLUSION
For reasons set forth above, Beras Motion to Dismiss for Lack of Territorial Jurisdiction is denied.
SO ORDERED