U.S. v. Uddin

• Decision Date: 11 April 2005
• Docket Number: No. 04-CR-80192.,04-CR-80192.
• Citation: 365 F.Supp.2d 825
• Parties: UNITED STATES of America, Plaintiff, v. Mohummed Islam UDDIN, Defendant.
• Court: U.S. District Court — Eastern District of Michigan

365 F.Supp.2d 825

UNITED STATES of America, Plaintiff, v. Mohummed Islam UDDIN, Defendant.

No. 04-CR-80192.

United States District Court, E.D. Michigan, Southern Division.

April 11, 2005.

Julia C. Pidgeon, Detroit, MI, for Plaintiff.

Federal Defender, Detroit, MI, Majed A. Moughni, Dearborn, MI, Paul J. Stablein, Dickow & Trivax, Farmington Hills, MI, for Defendant.

MEMORANDUM OPINION AND ORDER DENYING DEFENDANT'S MOTION TO DISMISS INDICTMENT

ROSEN, District Judge.

I. INTRODUCTION

Defendant Mohummed Islam Uddin is charged in a one-count Indictment with violating 18 U.S.C. § 1960(a) by knowingly conducting an "unlicensed money transmitting business," as that term is defined in Section subsection (b)(1)(B) of the statute. The Indictment charges a violation from January 1, 2002 until December 3, 2003, during which time Defendant allegedly transmitted within the United States and to locations abroad, at least $4,000,000 in funds.

Subsection (b)(1) of Section 1960(a) provides three alternative definitions of "unlicensed money transmitting business." It is undisputed that the Government's Indictment is predicated only on the definition set forth in Subsection (b)(1)(B), which defines "unlicensed money transmitting business" as a money transmitting business that "fails to comply with the money transmitting business registration requirements under Section 5330 of title 31, United States Code, or regulations prescribed under such section."

Defendant does not dispute that he operated a money transmitting business nor does he dispute that the business was not registered with the Secretary of Treasury as required under 31 U.S.C. § 5330. Defendant, however, maintains that, in addition to alleging that he operated a money transmitting business and that the business was not registered, the Government is also required allege, and ultimately prove, that he knew of the federal registration requirement and that he intentionally failed to register his business. Because such allegations are lacking, Defendant argues that the Indictment must be dismissed.

II. DISCUSSION

18 U.S.C. § 1960 provides, in pertinent part, as follows:

(a) Whoever knowingly conducts, controls, manages, supervises, directs, or owns all or part of an unlicensed money transmitting business, shall be fined in accordance with this title or imprisoned not more than five (5) years, or both.

(b) As used in this section —

(1) the term "unlicensed money transmitting business" means a money transmitting business which affects interstate or foreign commerce in any manner or degree and —

(A) is operated without an appropriate money transmitting license in a state where such an operation is punishable as a misdemeanor or a felony under state law, whether or not the defendant knew that the operation was required to be licensed or that the operation was so punishable;

(B) fails to comply with the money transmitting business registration requirements under Section 5330 of Title 31, United States Code, or regulation prescribed under such section;¹ or (C) otherwise involves the transportation or transmission of funds that are known to the defendant to have been derived from a criminal offense or are intended to be used to promote or support unlawful activity; ...

18 U.S.C. § 1960(a), (b)(1).

The current above-quoted provisions of Section 1960 are the product of the Patriot Act. Prior to the Patriot Act amendments to Section 1960, the statute provided, in pertinent part, as follows:

(a) Whoever conducts, controls, manages, supervises, directs or owns all or part of a business knowing the business is an illegal money transmitting business, shall be fined in accordance with this title or imprisoned not more than 5 years, or both.

(b) As used in this section —

(1) The term "illegal money transmitting business" means a money transmitting business which affects interstate or foreign commerce in any manner or degree and —

(A) is intentionally operated without an appropriate money transmitting license in a State where such operation is punishable as a misdemeanor or a felony under State law;...

Subsection (b)(1)(B) remained unchanged, as it provided both prior to and after the Patriot Act amendments, that an unlicensed money transmitting business was also one that

(B) fails to comply with the money transmitting business registration requirements under section 5330 of title 31, United States Code, or regulation prescribed under such section;....

The Department of Justice summarized the amendment's purpose in its Report from the Field: The USA PATRIOT Act at Work:

The USA Patriot Act also strengthened the criminal laws against terrorism by making it easier to prosecute those responsible for funneling money to terrorists. Under previous federal law, 18 U.S.C. § 1960, those who operated unlicensed money transmitting businesses were entitled to rely on the affirmative defense that they had no knowledge of the applicable state licensing requirements. Some of these businesses, called hawalas, have funneled extensive amounts of money to terrorist groups abroad. Section 373 of the USA PATRIOT Act amended federal law by eliminating this loophole requiring that the defendant know about state licensing requirements....

DOJ Report 10 (July 2004), (quoted in United States v. Talebnejad, 342 F.Supp.2d 346, 348 (D.Md.2004)).

As indicated, Defendant Uddin is charged only under subsection(b)(1)(B) for operating an unlicensed money transmitting business while that business was required to be registered with the Secretary of Treasury pursuant to 31 U.S.C. § 5330. Defendant's argument in this Motion to Dismiss is that a violation of 18 U.S.C. § 1960(a) is a specific intent crime requiring proof not only that the defendant knew that his money transmitting business did not have a license but also that the defendant knew of the federal registration requirement and intentionally failed to comply with that requirement. The Government counters that 18 U.S.C. § 1960(a) is only a general intent crime that premises guilt on the defendant's conduct, not on his state of mind.

In support of his specific intent/ mens rea requirement argument, Defendant relies upon the decision of the U.S. District Court for the District of Maryland in United States v. Talebnejad, supra. Defendant's reliance on the Talebnejad case, however, is unavailing.

First of all, the defendant in Talebnejad was only indicted under 18 U.S.C. § 1960(b)(1)(A) and, as such, the only real issue in that case involved the question of a mens rea requirement with regard to a violation of Section 1960(a) predicated upon a money transmitting business that was not licensed in Maryland, a state that requires state licensing where a failure to obtain such a license is punishable under state law as either a misdemeanor or a felony as provided in subsection (b)(1)(A) of the statute. (Michigan does not require money transmitting businesses to have a license or to otherwise register with the state.) It was only because Maryland state law, Section 12-405 of the Financial Institutions Article of the Maryland Code, renders punishable as a felony only a "knowing and willful" failure to obtain a license² that the federal district court read into 18 U.S.C. § 1960(b)(1)(A) a mens rea requirement, notwithstanding the second clause of subsection (A) which provides that a person is guilty of a violation of 18 U.S.C. § 1960 for operating a money transmitting business without obtaining a state license to do so "whether or not the defendant knew that the operation was required to be licensed or that the operation was so punishable [under state law]." Because of the state law's "knowing and willful" requirement, the federal district court held that

To the extent that any prosecution under 18 U.S.C. § 1960 may go forward on the basis of a Defendant's lack of a Maryland license, the Government must establish that the lack of license was knowing and willful, i.e., that the defendant knew that his lack of license was illegal and that he acted or failed to act intentionally with respect to that fact.

342 F.Supp.2d at 354.

Because the indictment failed to show that Talebnejad knew that noncompliance with the Maryland licensing statute was criminal, the federal district court dismissed the indictment, without prejudice.

Although not required to do so, the Talebnejad court then proceeded to find that, "by implication," subsection (b)(1)(B) of § 1960 also incorporates a mens rea requirement i.e., that it must be shown that a defendant knew he was required to register his money transmission business with the U.S. Treasury and that he intentionally failed to do so. The court reached this conclusion "based ... upon Congress's failure to amend 18 U.S.C. § 1960(b)(1)(B) when it amended § (b)(1)(A) [and] the conventional understanding that mens rea is a fundamental component of every criminal act." 342 F.Supp.2d at 356 (citing Morissette v. United States, 342 U.S. 246, 250, 72 S.Ct. 240, 96 L.Ed. 288 (1952)).

The Talebnejad court's reasoning with regard to subsection (b)(1)(B) is flawed because, as indicated above, there was no need to amend the federal registration subsection; the only "loophole" that existed in the prior version of the statute was in subsection (A) which, before the Patriot Act amendments, required the government to show that the defendant knew that state law required a license to operate a money transmitting business and intentionally operated the business without an appropriate state license. The prior version of subsection (B) contained no such "loophole," and therefore, no amendment to subsection (B) was needed.

Indeed, the legislative history of the Patriot Act amendment to Section 1960 makes clear that a section 1960 violation is a general intent crime that does not require proof of the defendant's knowledge of the federal registration requirement:

First, section 104 clarifies the scienter requirement in § 1960 to avoid...