Sunday, April 19, 2009

Wire Fraud is Not Limitless - It Requires "in Furtherance"

The Ninth Circuit Court of Appeals in U.S. v. Lazarenko tells the story of an international money laundering, wire and mail fraud, and transportation of stolen property case that is much reduced from the original charges/convictions brought by the government.  It started as a 53-count indictment, but after the government dismissal of some, and the court dismissal of others, what remained was 14 counts.  This decision brings it even lower.

The facts of this case present a unique international flavor, in that Ukrainian law is the specified unlawful activity for the money laundering charges. The breadth of the money laundering statute is clearly reaching international levels when a US jury is being asked to determine whether there has been a violation of another countries laws. Although the Ninth Circuit upholds the money laundering convictions, the court does reverse the interstate transportation of stolen property count. 

But the more fascinating part of this decision relates to the wire fraud counts.  In reversing the convictions here, the court focuses on the "in furtherance" element of wire fraud. The court states:

"If the government's theory were correct, then it would be possible for an ordinary fraud to be converted into wire fraud simply by the perpetrator picking up the telephone three years later and asking a friend if he can store some fraudulently obtained property in his garage before the police execute a search warrant or later taking the proceeds of fraud and transferring them to another bank. The government's theory extends an already broad statute too far."

It is good to see a court requiring strict adherence to the "in furtherance" element.

(esp) (w/ a hat tip to Evan Jenness)

http://lawprofessors.typepad.com/whitecollarcrime_blog/2009/04/wire-fraud-is-not-limitless.html

Fraud, International, Judicial Opinions, Money Laundering | Permalink

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