Wednesday, June 3, 2020

“People Usually Don’t Walk Into An Office With A Million Dollars In Cash”

A three year suspension has been imposed for a criminal conviction by the New York Appellate Division for the Second Judicial Department

On January 5, 2017, in the United States District Court for the Southern District of New York, before U.S. District Judge John G. Koeltl, the respondent was convicted, upon a plea of guilty, of operating an unlicensed money transmitting business, in violation of 18 USC § 1960(a), a federal felony. On October 20, 2017, the respondent was sentenced to probation for a period of one year, and was directed to perform 250 hours of community service and pay a $25,000 fine.

The facts

The facts disclosed at a mitigation hearing showed the following: in the fall of 2010, the respondent was introduced to a business investor from South America who wished to invest $1 million cash for the production of a movie. The goal was to use the $1 million to leverage an additional $5 million from lenders to be used for the marketing of the movie. The respondent was assured that the money was “clean.” The idea was for the $1 million cash to be delivered to the respondent’s offices, and for the money to be deposited into a client’s account, and then wired to different designated accounts. The respondent testified that he “didn’t feel good about it,” but agreed and went ahead with the arrangement. For the respondent’s role in the transaction, he was paid a $25,000 fee. Several years later, the respondent learned that the money was “drug money.” The respondent was initially charged with money laundering; however, upon acknowledgment by the government that the respondent had no knowledge that the money was linked to narcotics, the respondent pleaded guilty to a lesser offense.


we find that the respondent should have known that the money was from an illegal source because, as the judge remarked at sentencing, “people usually don’t walk into an office with a million dollars in cash” and ask that it be converted into another form. The respondent should have been on notice that this was not a legitimate transaction. The respondent acknowledged that something was not right and that he thought he was breaking some law somewhere, but decided to participate anyway. While no client was harmed, the respondent acted recklessly and was motivated by greed.

Credit for time served on an interim suspension was granted. (Mike Frisch)

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