In U.S. v. Seher, No. 07-13935 (March 26, 2009), the Court affirmed money laundering convictions but vacated the forfeiture judgment, in a case arising out of the use of jewelry stores in Atlanta to launder cocaine trafficking cash proceeds.
The Court rejected the argument that the indictment failed to charge the requisite mens rea for the money laundering offenses. The Court noted that the indictment cited specific subsections of the money laundering statutes. These subsections, in turn, contained mens rea elements. Thus, it was reasonable to infer that the grand jury found that the defendants had the intents to violate the laws.
The Court also rejected a duplicitous indictment challenge. The defendants argued that 18 U.S.C. § 1956(a)(3) contains three different offenses. Consequently, when certain counts of the indictment referenced different subsections of the same statute, they charged two different offenses in the same count. Although the defendants waived this challenge by failing to raise it pre-trial, the government itself waived the waiver on appeal, and the Court therefore considered the argument. The Court concluded that § 1956(a)(3) did not create separate offenses, but listed alternative mental states for a single offense.
Turning to the forfeiture order, the Court rejected the argument that the assets of the jewelry stores, and their bank accounts, should not have been forfeited, because they were not "involved" in the money laundering offenses. The Court found that one of the businesses was a "facade of legitimacy" for the money laundering enterprise. The other jewelry business, however, was unconnected to the unlawful laundering.
Finally, the Court that the record below was insufficient to determine whether the forfeiture of the jewelry business was an excessive fine in violation of the Eighth Amendment. The Court therefore remanded the entire forfeiture order for reconsideration of this issue.
