Eleventh Circuit Court of Appeals - Published Opinions

Monday, February 27, 2006

Johnson: Insufficient money laundering evidence

In U.S. v. Johnson, No. 04-10514 (Feb. 27, 2006), the Court affirmed convictions for perjury securities fraud, and some money laundering counts arising out of the fraud, but reversed other money laundering convictions because of insufficient evidence.
Certain money laundering convictions were based on 18 U.S.C. § 1957, which criminalizes engaging in a monetary transaction in property derived from specified unlawful activity. The Court affirmed these convictions, pointing out that the evidence showed that Johnson used 25 financial accounts to transfer millions of dollars of fraudulently obtained investor funds.
Other money laundering convictions were based on 18 U.S.C. § 1956(a)(2)(B)(i), which criminalizes tranfer money from the U.S. to outside the country with the intent to conceal illegal proceeds. The Court agreed with Johnson that there was insufficient evidence of intent to conceal. Reviewing the caselaw, the Court noted that "evidence of concealment must be subtantial." Thus, transfers of funds outside the country, while indicative of concealment, would not in and of themselves establish money laundering. Here, the transfer was between accounts bearing the correct name, with no evidence of concealment. Hence, the Court vacated these convictions.
Finally, another convictions was based on 18 U.S.C. § 1956(h) which criminalizes money laundering conspiracy. After the trial, Johnson was the only defendant who was convicted of conspiracy: his alleged co-conspirator was acquitted. The Court noted that Johnson’s conviction could stand notwithstanding his co-conspirator’s acquittal, because consistency among jury verdicts is not required. However, the evidence failed to show that the co-conspirator was aware of the illegal source of the money that was transferred. Thus, there was no evidence that this co-conspirator conspired with Johnson to commit money laundering. Without this evidence, there was no proof of agreement between the two to commit a crime. Accordingly, the Court vacated this conviction.