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United States v. Piervinanzi - 23 F.3d 670 (2d Cir. 1994)

Rule:

The ordinary meaning of the word "obtained" entails possession of a thing. Similarly, the word "property" implies ownership, or the exclusive right to possess, enjoy, and dispose of a thing. The use of such language demonstrates a congressional intent that the proceeds of a crime be in the defendant's possession before he can attempt to transfer those proceeds in violation of 18 U.S.C.S. § 1957. Both the plain language of § 1957 and the legislative history behind it suggest that congress targeted only those transactions occurring after proceeds have been obtained from the underlying unlawful activity. Congress intended § 1957 to separately punish a defendant for monetary transactions that follow in time the underlying specified unlawful activity that generated the criminally derived property in the first place. 

Facts:

After an 11-day trial, a jury found defendants Michael Piervinanzi and Daniel Tichio guilty of conspiracy, attempted bank fraud, and attempted money laundering charges arising from a scheme to fraudulently transfer funds overseas from an account at Irving Trust Company (Irving Trust). Additionally, the jury convicted Piervinanzi of wire fraud, attempted bank fraud, attempted money laundering, and money laundering charges stemming from a separate but related scheme targeting an account at Morgan Guaranty Trust Company (Morgan Guaranty). The United States District Court for the Southern District of New York sentenced Piervinanzi to concurrent terms of 210 months' imprisonment on each of seven counts of conviction, imposed a five-year term of supervised release for one attempted money laundering count and concurrent three-year terms of supervised release on the six other counts, and fined him $10,000. The district court sentenced Tichio to concurrent terms of 135 months' imprisonment on each of his three counts of conviction, and to concurrent three-year terms of supervised release. Defendants appealed.

Issue:

Can there be a conviction for money laundering in violation of 18 U.S.C.S. § 1957 if the funds never came into the possession or under the control of the conspirators?

Answer:

No

Conclusion:

The Court of Appeals for the Second Circuit vacated defendants' sentences for the offenses under 18 U.S.C.S. §§ 37113431344 because they exceeded the maximum allowable sentences for the convictions. The court also reversed the conviction of Piervinanzi for money laundering in violation of 18 U.S.C.S. § 1957 because the funds never came into the possession or under the control of the conspirators. The court held that the act of attempting to fraudulently transfer funds out of the trust companies was analytically distinct from the attempted transmission of those funds overseas and was itself independently illegal under 18 U.S.C.S. § 1344. The court further held that neither the United States Attorney Manuel Guidelines nor the United State Sentencing Guidelines Commentary confer substantive rights on defendants.

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