USA v. Velastegui, Docket No. 99-1362
| Court | United States Courts of Appeals. United States Court of Appeals (2nd Circuit) |
| Writing for the Court | OAKES |
| Citation | 199 F.3d 590 |
| Parties | (2nd Cir. 1999) United States of America, Appellant, v. Galo Velastegui, also known as Galo R. Velastegui, and GMJ Travel & Shipping Corp., Defendants-Appellees |
| Docket Number | Docket No. 99-1362 |
| Decision Date | 01 August 1999 |
Page 590
v.
Galo Velastegui, also known as Galo R. Velastegui, and GMJ Travel & Shipping Corp., Defendants-Appellees.
August Term, 1999
SECOND CIRCUIT
Decided: Dec. 13, 1999
The United States charges Galo R. Velastegui and GMJ Travel & Shipping Corporation with engaging in an unlawful money transmitting business. The United States District Court for the Southern District of New York (Scheindlin, J.) dismissed counts one and two of the indictment. The United States appeals the district court's ruling.
Reversed.
Page 591
Peter B. Sobol, Assistant United States Attorney, New York, NY (Mary Jo White, United States Attorney, Paul A. Engelmayer and Ira M. Feinberg, Assistant United States Attorneys, of counsel), for Appellant.
Raymond J. Aab, New York, NY (Carol Kahn, of counsel), for Defendants-Appellees.
Page 592
Before: OAKES, POOLER and KATZMANN, Circuit Judges.
OAKES, Senior Circuit Judge:
The United States appeals from two orders entered by the United States District Court for the Southern District of New York dismissing counts one and two of the indictment charging Galo R. Velastegui and GMJ Travel & Shipping Corporation ("GMJ") (collectively "Defendants") 1. with engaging in an unlawful money transmitting business. The second order was issued after the Government moved for reconsideration and the district court adhered to its earlier ruling dismissing those counts. We determine that the particular conduct alleged in the indictment falls within the ambit of conduct that 18 U.S.C. 1960(a) makes criminal. Accordingly, we reverse.
This case involves the business of money transmitting. A money transmitting business receives money from a customer and then, for a fee paid by the customer, transmits that money to a recipient in a place that the customer designates, usually a foreign country. After the customer gives the money transmitter an amount to send to the designee, the transmitter notifies the "payer" with whom it has a contractual arrangement in the recipient country. The payer then notifies the designated recipient of the money, and pays the money to the designee at the payer's office. The transmitter then remits to the payer the amount paid to the designee, plus the payer's commission.
GMJ is a New York corporation that was employed as an agent of several licensed money transmitting businesses. It did not have a New York license authorizing it to engage in the direct transmission of money. Generally, GMJ's agency agreements appointed GMJ for the sole purpose of collecting money for transmission by the licensed principal. GMJ does not dispute that, in contravention of these agreements, it often sent funds left for transmission by its principals directly to Mexican payers. Additionally, the Government proffered in its motion for reconsideration that the evidence at trial would show (1) that GMJ had transmitted millions of dollars to recipients in Mexico and elsewhere, entirely outside of its agency relationships with licensed transmitters; (2) that it did not purport to act as an agent of any licensee when it made those transmissions; and (3) that it did not share commissions for those transmissions with any licensee. 2. As a result of GMJ's breaches of its agency agreements, each principal canceled its agency contract with GMJ. At all times relevant to this indictment, however, GMJ operated as an agent of at least one New York state licensed money transmitting business.
Defendants were indicted on September 2, 1998, on three counts. They are charged with two counts of illegal money transmitting, in violation of 18 U.S.C. 1960(a) and 18 U.S.C. 2 (1999), and one count of money structuring, in violation of 31 U.S.C. 5324(a)(3) and (c)(2) (1999), and 18 U.S.C. 2.
Page 593
On February 22, 1999, Defendants filed a motion to dismiss the indictment and to suppress statements made by Velastegui to agents upon his arrest. Defendants argued that prosecution under 18 U.S.C. 1960 violates their due process rights because the transmittal of funds directly to beneficiaries in Mexico was not a reasonably clear violation of the statute. The district court granted Defendants' motion to dismiss counts one and two pursuant to the rule of lenity and denied Defendants' motion to dismiss count three and its motion to suppress Valestegui's statements. This appeal by the government followed.
Because a motion to dismiss on grounds that a criminal statute provides insufficient notice raises a question of law, we review the dismissal of the indictment by the district court de novo. See Alfonso, 143 F.3d at 775. Due process requires that a criminal statute "give fair warning of the conduct that it makes a crime." Bouie v. City of Columbia, 378 U.S. 347, 350-1 (1964). The rule of lenity, a manifestation of the fair warning requirement, "ensures fair warning by so resolving ambiguity in a criminal statute as to apply it only to conduct clearly covered." United States v. Lanier, 520 U.S. 259, 266 (1997). The touchstone inquiry is "whether the statute, either standing alone or as construed, made it reasonably clear at the relevant time that the defendant's conduct was criminal." Id. at 267. The rule "applies only when, after consulting traditional canons of statutory construction, we are left with an ambiguous statute." United States v. Shabani, 513 U.S. 10, 17 (1994). If we find that the ambit of the criminal statute is ambiguous, the ambiguity should be resolved in favor of lenity. See Rewis v. United States, 401 U.S. 808, 812 (1971). Therefore, we must decide whether Defendants' conduct -- the direct transmission of money to Mexico by an unlicensed agent of a state-licensed money transmitting business -- falls clearly within the range of criminal liability under section 1960.
Title 18 U.S.C. 1960 was enacted in order to combat the growing use of money transmitting businesses to transfer large amounts of the monetary proceeds of unlawful enterprises. See S. Rep. No. 101-460, at 14 (1990), reprinted in 1990 U.S.C.C.A.N. 6645, 6658-59. The statute provides, in pertinent part:
(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; or
(B) 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 . . . .
18 U.S.C. 1960. The statute makes it a federal crime to knowingly operate a money transmitting business in violation of state law where the state requires a license and makes unlicensed money transmitting punishable as a misdemeanor or felony. Therefore, we must look to New York law to...
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U.S. v. Coffey, No. 04-CR-651(ILG).
...to dismiss is well settled — the Court must treat the allegations in the indictment as true. See, e.g., United States v. Velastegui, 199 F.3d 590, 592 n. 2 (2d Cir.1999), cert. denied, 531 U.S. 823, 121 S.Ct. 67, 148 L.Ed.2d 32 (2000). The indictment is governed by Fed.R.Crim.P. 7(c), which......
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Mannix v. Phillips, No. 04CIV 1335RCC GWG.
...1219, 137 L.Ed.2d 432 (1997); accord Parker v. Levy, 417 U.S. 733, 757, 94 S.Ct. 2547, 41 L.Ed.2d 439 (1974); United States v. Velastegui, 199 F.3d 590, 593 (2d Cir.1999), cert. denied, 531 U.S. 823, 121 S.Ct. 67, 148 L.Ed.2d 32 (2000). In the words of the Second Circuit, "[b]ecause the sta......
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U.S. v. Talebnejad, No. CRIM.PJM 03-0517.
...of money transmitting businesses to transfer large amounts of the monetary proceeds of unlawful enterprises." United States v. Velastegui, 199 F.3d 590, 593 (2d Cir.1999). See also S. Rep. 101-460, reprinted in 1990 U.S.S.C.A.N. 6658-59 ("The New York Times reported on September 25, 1989.........
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United States v. Raniere, 18-CR-204-1 (NGG) (VMS)
...a motion to dismiss, the [c]ourt must treat the indictment's allegations as true." Id. at *5 (citing United States v. Velastegui, 199 F.3d 590, 592 n.2 (2d Cir. 1999) ). That said, there are "very rare cases in which an indictment that track[s] the statutory language and furnishe[s] the per......
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U.S. v. Coffey, No. 04-CR-651(ILG).
...to dismiss is well settled — the Court must treat the allegations in the indictment as true. See, e.g., United States v. Velastegui, 199 F.3d 590, 592 n. 2 (2d Cir.1999), cert. denied, 531 U.S. 823, 121 S.Ct. 67, 148 L.Ed.2d 32 (2000). The indictment is governed by Fed.R.Crim.P. 7(c), which......
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Mannix v. Phillips, No. 04CIV 1335RCC GWG.
...1219, 137 L.Ed.2d 432 (1997); accord Parker v. Levy, 417 U.S. 733, 757, 94 S.Ct. 2547, 41 L.Ed.2d 439 (1974); United States v. Velastegui, 199 F.3d 590, 593 (2d Cir.1999), cert. denied, 531 U.S. 823, 121 S.Ct. 67, 148 L.Ed.2d 32 (2000). In the words of the Second Circuit, "[b]ecause the sta......
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U.S. v. Talebnejad, No. CRIM.PJM 03-0517.
...of money transmitting businesses to transfer large amounts of the monetary proceeds of unlawful enterprises." United States v. Velastegui, 199 F.3d 590, 593 (2d Cir.1999). See also S. Rep. 101-460, reprinted in 1990 U.S.S.C.A.N. 6658-59 ("The New York Times reported on September 25, 1989.........
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United States v. Zemlyansky, No. 12 Cr. 171(JPO).
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