The opinion of the court was delivered by: Reggie B. Walton United States District Judge
This matter is before the Court on the defendant's motion to dismiss counts four and five of the indictment. The issue presented is whether the government has properly alleged an independent transaction separate from the offenses of wire and mail fraud sufficient to support a claim of money laundering pursuant to 18 U.S.C. § 1957 against the defendant. For the reasons set forth below, the Court answers this question in the affirmative.
The following are the facts alleged by the government in the indictment: Mildred Powell died intestate on July 15, 1996. Indictment ¶ 2, at 1. Sometime thereafter, the defendant, Kinley Howard, sought to be appointed the administrator of the estate of Ms. Powell, who was his aunt. Id. ¶ 5, at 2. Although the defendant's initial petition to be appointed personal administrator of Ms. Powell's estate was rejected because he was not "a direct blood relative of his aunt[,]" id. ¶ 6, at 2, he successfully filed a second petition on December 30, 1996, with the Probate Division of the Superior Court of the District of Columbia seeking his appointment as co-personal representative of the estate along with his mother, Lillian Powell Howard. Id. ¶ 8, at 2-3. The defendant allegedly forged his mother's signature on the second petition, and also represented that his mother resided at a residence in Florida that belonged to defendant, although she actually resided in Tennessee. Id. ¶ 9, at 3.
Thereafter, between July 1996 and December 1997, the defendant allegedly engaged in a series of transactions wherein he transferred funds, via electronic means and through use of the mails, to accounts he established for the deposit of the estate funds in Florida. *fn1 Specifically, between January and July 1997, the defendant transferred approximately $126,582.18 from Ms. Powell's bank accounts located in Washington D.C. and Georgia into the Florida accounts that he had established. Id. ¶ 15, at 4. In addition, beginning in January 1997 and continuing through April 1997, the defendant mailed letters to each of the banks where Ms. Powell had deposited her funds and, stating that he was the personal representative of Ms. Powell's estate, requested that the banks close any accounts in Ms. Powell's name and transfer the funds from those accounts into one of the two Florida bank accounts he had established. Id. ¶¶ 16-17, at 5. The government also alleges that at some point the defendant transferred funds from Ms. Powell's Federal Employees Group Life Insurance program and Liberty Life Insurance policy to the Florida accounts. Id. ¶ 19, at 5-6. In addition, shortly after Ms. Powell's death, the defendant removed savings bonds from her apartment and deposited these bonds into the two Florida bank accounts he had established. Id. ¶ 22, at 6.
After his mother's death in March 1997, the defendant continued to transfer Ms. Powell's assets into the accounts established by him, allegedly forging his mother's signature on documents necessary to complete the transactions. Id. ¶ 25, at 7. It was after his mother's death that defendant transferred over $94,000 in Ms. Powell's assets to the accounts he had established. In addition, the defendant thereafter transferred over $142,000 from the two Florida estate accounts into his own personal and business accounts, and in the process, continued to forge his mother's name. Id. ¶¶ 25-26, at 7.
The defendant even continued to withdraw funds from the Emerald Coast account after August 7, 1997, when Superior Court Judge Cheryl M. Long issued a written order suspending the defendant's fiduciary powers over Ms. Powell's estate. Id. ¶ 27, at 7. From July 1996 until December 1997, the defendant transferred a total of $81,268.62 in Ms. Powell's assets to the Emerald Coast bank account and a total of $106,008.35 in Ms. Powell's assets to the Florida First account. Id. ¶ 28, at 7. On June 16, 1998, Judge Long issued a second written order, completely removing the defendant as personal representative of Ms. Powell's estate and entered a civil judgment against him in the amount of $207,589.99. Id. ¶ 29, at 7.
In a five count indictment, the government charged the defendant with two counts of mail fraud (counts one and two); one count of wire fraud (count three); and two counts of engaging in monetary transactions in property derived from unlawful activity ("money laundering") (counts four and five). The mail fraud counts are derived from the defendant's letters, written on February 26, 1997 and March 26, 1997, to Riggs Bank and Paine Webber, respectively, closing the accounts of Mildred Powell. Id. ¶ 30, at 8. The wire fraud count alleges that on or about January 15, 1997, the defendant sent a letter from his office in Florida to Crestar Bank in Washington D.C. requesting the wire transfer of Ms. Powell's funds to the Florida First bank, and causing $61,572.02 to be wired from Crestar to the Florida First bank on January 23, 1997. Id. ¶ 4, at 9. On March 26, 1997, the defendant again sent a letter to Crestar requesting a further transfer of Ms. Powell's account's assets. Thereafter, on or about April 9, 1997, the defendant caused a second wire transfer to be made in the amount of $12,859.98 from Crestar Bank to the Florida First Bank. Id. ¶ 6, at 9.
Count Four, although incorporating the first twenty-eight paragraphs of the complaint, specifically asserts that on or about April 9, 1997, the defendant caused $12,859.98 to be transferred from Crestar to the First Florida bank, "that is wire fraud, in violation of Title 18, United States Code, Section 1343." Id. ¶ 2, at 10. Count Five, which again incorporates the first twenty-eight paragraphs of the complaint, specifically charges that on or about February 26, 1997, the defendant caused the mailing of a cashier's check in the amount of $29,903.43 from Riggs Bank to himself in Florida, "that is, mail fraud in violation of Title 18, United States Code Section 1341." Id. ¶ 2, at 11.
In his motion to dismiss counts four and five of the indictment, the defendant argues that he can not lawfully be convicted of money laundering in violation of 18 U.S.C. § 1957 "where there is no proof of an independent criminal transaction separate from the underlying offense[,]" Def.'s Mot. at 1-2, and that the indictment is flawed in this regard.
To establish money laundering pursuant to 18 U.S.C. § 1957, *fn2 the government must establish that the defendant "derived property from a specified unlawful activity and that he engaged in a monetary transaction involving that property." United States v. Seward, 272 F.3d 831, 836 (7th Cir. 2001) (citing 18 U.S.C. § 1957). Thus, the government must establish:
"(1) knowledge, (2) the existence of proceeds derived from a specified unlawful activity, (3) a financial transaction and (4) intent." *fn3 Daniel H. April & Angelo M. Grasso, Money Laundering, 38 Am. Crim. L. Rev. 1051, 1059 (2001). Knowledge is a "requisite element for all of the crimes established by the Money Laundering Control Act, [although] the exact type of knowledge required varies with the specific offense." Id. Regarding section 1957, the government must demonstrate that the defendant "'knowingly engages or attempts to engage in a monetary transaction in criminally derived property.'" Id. The government must also establish that the defendant "kn[ew] that the proceeds were derived ...