168 F.3d 49 (2nd Cir. 1999), 97-1418, United States v. Zvi

Docket Nº:97-1418, 97-1422.
Citation:168 F.3d 49
Party Name:UNITED STATES of America, Appellee, v. Luiz Ben ZVI and Roz Ben Zvi, Defendants-Appellants.
Case Date:January 21, 1999
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
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168 F.3d 49 (2nd Cir. 1999)

UNITED STATES of America, Appellee,

v.

Luiz Ben ZVI and Roz Ben Zvi, Defendants-Appellants.

Nos. 97-1418, 97-1422.

United States Court of Appeals, Second Circuit

January 21, 1999

Argued June 8, 1998.

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Alan S. Futerfas, New York City, (Gerald L. Shargel, Ellen B. Resnick, on the brief), for defendant-appellant Roz Ben Zvi.

John L. Pollok, New York City, (Alan S. Futerfas, Gerald L. Shargel, Ellen B. Resnick, on the brief), for defendant-appellant Luiz Ben Zvi.

Cecilia L. Gardner, Assistant U.S. Attorney for the Eastern District of New York, Brooklyn, N.Y. (Zachary W. Carter, United States Attorney, Peter A. Norling, Assistant United States Attorney, of counsel), for appellee.

Before: OAKES and WALKER, Circuit Judges, and CARMAN, Judge. [*]

JOHN M. WALKER, Jr., Circuit Judge.

Brother and sister defendants-appellants, Roz Ben Zvi and Luiz Ben Zvi, respectively, appeal from a judgment entered June 26, 1997 in the United States District Court for the Eastern District of New York (Thomas C. Platt, Jr., Judge ), following a jury trial. They were both convicted of a multiple-object conspiracy involving wire fraud, in violation of 18 U.S.C. § 371 (Count 1), and domestic and international money laundering, in violation of 18 U.S.C. §§ 1956(a)(1)(B)(i), (a)(2)(B)(i) (Counts 8-11, 16-19); Roz Ben Zvi also was convicted of additional counts of domestic and international money laundering (Counts 5 and 13) and of filing false income tax returns in violation of 26 U.S.C. § 7206(1) (Counts 2 and 3). The charges in the indictment all arose out of the defendants' scheme to defraud their insurer, Lloyd's of London, by staging a robbery of Roz Ben Zvi's jewelry business. Roz Ben Zvi was sentenced to concurrent terms on each count that totaled ten years' imprisonment, while his sister, Luiz, received concurrent terms on each count for a total term of five years' imprisonment. Additionally, both defendants were ordered to pay restitution in the amount of $6,624,512, were subjected to criminal forfeitures of $1,370,000 and two properties, and were ordered to pay special assessments.

For the reasons stated below, we hold that (1) all money laundering counts charged against Luiz Ben Zvi and most of those charged against Roz Ben Zvi were time-barred, and therefore must be dismissed; (2) the judgment of criminal forfeiture against Luiz Ben Zvi, entered pursuant to the money laundering statute, must be reversed and we remand to the district court to reconsider the judgment of criminal forfeiture against Roz Ben Zvi; and (3) all of the domestic money laundering charges must be dismissed as multiplicitous with international money laundering charges for the same transactions.

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We affirm both defendants' convictions for conspiracy and Roz Ben Zvi's conviction on the counts of international money laundering not time-barred and for filing false tax returns. We remand to the district court to reconsider sentencing, including forfeiture, and its order of restitution in light of this opinion.

BACKGROUND

Roz Ben Zvi was the owner of Josi Jewelry, a gold chain manufacturing business in New York City. Luiz Ben Zvi was an employee of Josi Jewelry. On February 26, 1988, police responded to cries for help at Josi Jewelry and found the Zvis bound together in a back room. The Zvis falsely told the police that unidentified assailants had overtaken them, bound them, and stolen millions of dollars worth of gold chain. In actuality, a co-conspirator tied them up after they had created the appearance of a struggle; he then struck Roz Ben Zvi for added "realism" and left them locked in the back room. The Zvis subsequently filed an insurance claim with Lloyd's of London for $3,995,000. On August 15, 1988, Lloyd's made an electronic funds transfer from London, England, to Josi Jewelry's account at Chemical Bank in New York as full payment on the claim.

In the spring of 1993, the government informed the Zvis that they were under investigation by a grand jury for possible violations of federal law. The government sought stipulations from the Zvis to toll the statute of limitations for three months as to criminal violations that were not yet time barred. Roz Ben Zvi signed a stipulation on July 2, 1993 tolling the limitations period as to him until October 2, 1993. Luiz Ben Zvi refused to stipulate to any tolling.

On August 11, 1993, the grand jury indicted Luiz Ben Zvi, alleging her participation in a conspiracy to stage the February 26, 1988 robbery in order to defraud Lloyd's. In addition to one count of conspiracy to commit wire fraud, Luiz Ben Zvi was charged with a substantive count of wire fraud based on the August 15, 1988 wire transfer from Lloyd's in London to Josi Jewelry's New York account. On September 15, 1993, the government filed a superseding indictment alleging essentially the same criminal acts and adding Roz Ben Zvi as a defendant.

On March 9, 1994, a second superseding indictment was filed alleging that: (1) prior to the staged robbery of February 26, 1988, the Zvis had surreptitiously sold all of the gold they later claimed was stolen; (2) the Zvis allegedly laundered the proceeds of the wire fraud through six additional international funds transfers, dated May 17, 1988, July 28, 1988, September 1, 1988, September 23, 1988, November 11, 1988, and March 3, 1989; (3) Roz Ben Zvi had also engaged in three counts of laundering proceeds from narcotics trafficking and two counts of filing false tax returns; (4) international and domestic money laundering and filing false tax returns were additional objects of the conspiracy charged in count one; and (5) the Zvis were guilty of fourteen counts of money laundering, seven counts each of domestic and international money laundering for each of the seven identified funds transfers. The indictment also sought forfeiture, pursuant to 18 U.S.C. § 1956, of all property involved in the money laundering offenses.

On May 5, 1994, a third superseding indictment was filed that contained the forgoing allegations and added two more counts each of domestic and international money laundering against both defendants for two additional funds transfers, dated November 21, 1988, and March 1, 1989.

Before trial, in response to the defendants' motion, the district court dismissed for lack of venue the substantive wire fraud count and dismissed as time-barred the money laundering counts against both defendants based on the May 17, 1988 transfer and the money laundering count against Luiz Ben Zvi based on the July 28, 1988 transfer. At trial, the jury acquitted Roz Ben Zvi on the three counts of laundering proceeds from narcotics trafficking. The jury deadlocked on the money laundering counts for the September 1, 1988 and September 23, 1988 transfers, and the district court granted a mistrial as to those counts. Defendants were found guilty on the remaining counts. This appeal followed.

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DISCUSSION

The defendants challenge their convictions on numerous grounds. Specifically, they contend that: (1) most of the money laundering counts were barred by the statute of limitations; (2) the money received from the pre-robbery sale of gold did not constitute "proceeds" of the wire fraud within the meaning of 18 U.S.C. § 1343; (3) the charges for domestic and international money laundering based on the same underlying transaction were multiplicitous; (4) the district court's recital in its jury charge of the wrong parts of the statute with respect to the elements for domestic and international money laundering constituted plain error; (5) the district court's failure to instruct the jury on the element of materiality in the false tax return claims was plain error; (6) the money laundering counts must be reversed because the substantive charge for wire fraud, which constituted the "specified unlawful activity" underlying the money laundering counts, was dismissed on venue grounds; (7) the redacted indictment, which removed the substantive charge for wire fraud, when combined with the judge's erroneous instruction concerning which wire transfers could be considered in the wire fraud count, constructively amended the indictment; (8) the district court removed the factual issue of the scope of the conspiracy from the jury by instructing the jury on the government's theory of the case; (9) the district court erred in admitting testimony that bolstered the credibility of witnesses and drew legal conclusions; and (10) the district court abused its discretion in denying Luiz Ben Zvi's motion to sever. Some of these arguments require extended discussion; others do not. We will address each in turn.

  1. Statute of Limitations

    Defendants contend that all of the money laundering counts for which Luiz Ben Zvi was convicted, as well as Roz Ben Zvi's convictions based on the July 28, November 11, and November 21, 1988 funds transfers, were time-barred, because the superseding indictments first alleging these counts were filed more than five years (for Luiz Ben Zvi) and five years and three months (for Roz Ben Zvi) after the transfers occurred, in violation of 18...

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