State v. Lemoine

• Decision Date: 03 May 2017
• Docket Number: No. 2015–K–1120,2015–K–1120
• Citation: 222 So.3d 688
• Parties: STATE of Louisiana v. Martin G. LEMOINE
• Court: Louisiana Supreme Court

222 So.3d 688

STATE of Louisiana

v.Martin G. LEMOINE

No. 2015–K–1120

Supreme Court of Louisiana.

May 3, 2017

LOUISIANA DEPARTMENT OF JUSTICE, Hon. Jeffrey Martin Landry, Attorney General, Colin Andrew Clark; POINTE COUPEE PARISH DISTRICT ATTORNEY'S OFFICE, Hon. Richard J. Ward, Jr., District Attorney, Elizabeth A. Engolio, Antonio Marcell Clayton ; for Applicant.

Mary Olive Pierson ; KOCH LAW FIRM, Karl J. Koch ; for Respondent.

Per Curiam^*

We granted writs to examine whether the court of appeal correctly found the evidence insufficient to support the jury's determination that defendant committed money laundering pursuant to R.S. 14:230(B)(2), in conjunction with his scheme to fraudulently overbill Union Pacific Railroad (hereinafter "Union Pacific") for diesel fuel. We find that the jury rationally concluded that defendant knowingly gave, transferred, maintained an interest in, and/or otherwise made available things of value which he knew to be for the purpose of committing or furthering the commission of the criminal overbilling scheme. We therefore vacate the First Circuit's ruling and remand to the court of appeal for consideration of the two remaining grounds in the motion for post-judgment verdict of acquittal.¹

After the trial in this matter, jurors returned a unanimous verdict finding defendant guilty as charged of money laundering, pursuant to R.S. 14:230(B)(2), in the amount of $20,001. Defendant filed a motion for post-verdict judgment of acquittal, contending the evidence was insufficient to support the verdict because: 1) the state failed to prove that any fraudulent invoices were sent to Union Pacific during the 46–day period charged; (2) the state failed to prove that defendant acted for the purpose of committing or furthering the commission of any criminal activity; and (3), in the alternative, the state had only proven misdemeanor grade money laundering because the "things of value" were checks, rather than cash. The trial court granted the motion on all three grounds, after which a divided First Circuit panel affirmed. State v. Lemoine , 14-1158 (La.App. 1 Cir. 5/6/15), 174 So.3d 31 (Welch, J., dissenting with reasons).

A motion for post-verdict judgment of acquittal shall be granted only if the evidence viewed in a light most favorable to the state does not reasonably permit a finding of guilt. La.C.Cr.P. art. 821(B). A comment to Art. 821 clarifies that the test to be applied in ruling on such a motion is "whether a reasonable fact finder must have a reasonable doubt" under the well-settled standard of Jackson v. Virginia , 443 U.S. 307, 99 S.Ct. 2781, 61 L.Ed.2d 560 (1979).

The section of the money laundering statute under which defendant was found guilty, R.S. 14:230(B)(2), makes it unlawful to knowingly: "Give, sell, transfer, trade, invest, conceal, transport, maintain an interest in, or otherwise make available anything of value known to be for the purpose of committing or furthering the commission of any criminal activity."² The issue before us is whether, viewing the evidence in the light most favorable to the prosecution, any rational fact-finder could have found these essential elements proven beyond a reasonable doubt. See Jackson , 443 U.S. at 319, 99 S.Ct. at 2789.

The evidence at trial showed that defendant, as president of Morel G. Lemoine Distributors, Inc. ("Morel"), concocted and executed a scheme by which he routinely defrauded Union Pacific by billing the railroad for more fuel than was dispensed to it. Union Pacific's payments of the inflated invoices came in the form of checks which were deposited into Morel's business checking account.³ This scheme flourished during 1995, 1996, and 1997, until Morel's lead driver, Keith Glaser, who had been a key figure in inflating the fuel sales at defendant's direction, left employment at Morel. Thereafter, the scheme was adjusted to further obscure the overbilling⁴ and, later, to overcome checks and balances Union Pacific put in place; yet continued nonetheless at defendant's direction and through the efforts of his wife, Veronica Lemoine (who scratched out fuel totals on manifests), and Morel's truck dispatcher, Rex Averill (who inflated invoices sent to Union Pacific to add "phantom gallons" not dispensed). Though the scheme ultimately ceased by March 6, 1998, when Union Pacific's own fueling facility became operational, the illegal activity did not come to light until 2002, when Averill was terminated by Morel, hired by Union Pacific, and disclosed the scheme's existence to its long-standing target.

In affirming the trial court's post-verdict judgment of acquittal, the First Circuit noted the dearth of jurisprudence interpreting the money laundering statute⁵ and, having perceived similarities between R.S. 14:230 and the federal money laundering law, see 18 U.S.C.A. § 1956, the First Circuit majority analogized to federal money laundering jurisprudence⁶ before ultimately concluding that the trial court correctly granted an acquittal. See Lemoine , 14–1158, pp. 11, 13–25, 174 So.3d at 38–47.

The First Circuit majority erred to the extent it conflated the federal law and related jurisprudence with the Louisiana statute at issue. The Louisiana legislature has designated money laundering as a crime of "general intent."⁷ In contrast, the federal money laundering statute exacts a higher burden of proof by requiring that a transaction was conducted with specific intent to promote the carrying on of unlawful activity.⁸ In this regard, as Judge Welch's dissent observed, the majority overstated any similarities between the state and federal provisions. See Lemoine , 14–1158, pp. 4–5, 174 So.3d at 51 (Welch, J., dissenting).

The First Circuit majority further blurred the lines between the state and federal statutes, and their various subsections, when it imported a requirement that the state must prove that the defendant here specifically sought to conceal his ill-gotten gains. Though concealment is among the several prohibited acts listed in Section (B)(2), it is but one way in which this particular method of money laundering may be committed. The act of concealing proceeds of criminal activity is also found within other subsections of the Louisiana statute and is likewise a separate means of establishing money laundering under federal law. See R.S. 14:230(B)(1) and (B)(5) ; 18 U.S.C. § 1956(a)(1)(B)(i).

We are also unpersuaded by the First Circuit majority's view that the Louisiana money laundering statute is susceptible to the "merger problem;" a concept according to which a statute is drafted in such a way that the evidence necessary to prove the underlying or primary crime (here, theft from Union Pacific) is sufficient to also prove a more serious secondary offense (here, money laundering). Evidence of defendant's fraudulent billing alone, i.e. , the thefts for which he was not prosecuted, could not, without more, serve as a basis for a money laundering prosecution. Rather, Section (B)(2) of the money laundering statute applies here because the evidence shows, not only that defendant repeatedly stole from Union Pacific, but that he was depositing those ill-gotten gains into his business account, in which he maintained an interest and from which he routinely transferred money to perpetuate and further his business operations, which functions involved the recurring thefts. Put another way, this is not a "garden variety" theft case, as defendant asks us to find, but rather, in light of the use of stolen money to finance future thefts, a prototypical money laundering case.

Moreover, related concerns that Section (B)(2) is open-ended, because it applies to "anything of value," overlook the purpose of the money laundering statute, which is not to enable prosecutors to latch onto most any crime and, on a whim, elevate the charges to the offense of money laundering, but rather as the statute's title announces, to prohibit "transactions involving proceeds of criminal activity." See R.S. 14:230.⁹ For this reason, defendant was subject to prosecution for and ultimately found guilty of the more serious offense of money laundering.¹⁰ See Lemoine , 14–1158, pp. 7–8, 174 So.3d at 52–53 (Welch, J., dissenting) ("It sets a dangerous precedent to judicially legislate in accordance with federal law and federal jurisprudence without attempting to ascertain the Louisiana legislative intent .... The clear legislative intent was to prohibit transactions involving the proceeds of criminal activity.").

Setting aside issues of interpretation, we turn now to the sufficiency of the evidence and conclude that the First Circuit and trial court erred in finding that the state failed to prove defendant acted for the purpose of committing or furthering the commission of any criminal activity.

First, the state was not required to prove that any actual tainted or "dirty"¹¹ dollars were used during the charged period. Defendant contends that "because money is fungible and the checks from the railroad commingled [with] legitimate payments," the state was required to show that "the ‘dirty’ portion of the money was necessarily used for the criminal purpose." In defendant's appreciation, this Court should adopt what he sees as the preferred approach when funds have been commingled in a money laundering case, which is to require proof that the expenditures from the commingled account exceeded the amount of clean money therein. In advocating for this approach, he points to a case from the Federal Fifth Circuit in which that standard was applied. See United States v. Loe , 248 F.3d 449, 466–67 (5th Cir. 2001).¹²

After careful consideration, we find that the Louisiana money laundering law places no such burden on the state to trace dirty money after it has been commingled with clean money. Money launderers often mix the fruit of their crimes with legitimately-acquired assets, assuming detection of the dirty funds will be more difficult as a result. Mindful of this reality, courts...