The opinion of the court was delivered by: ROBERT W. SWEET
The defendant, Ekaterina Korolkova (Korolkova) has moved to dismiss the indictment filed against her for lack of venue. The Government has moved to take foreign depositions to support its indictment.
Korolkova was initially arrested in San Francisco on August 29, 1994, arrived in this district on September 14, 1994 and was presented with the complaint on the next day. Korolkova was charged in a ten count indictment with substantive violations under the bank fraud statute (18 U.S.C. § 1344) (counts one through five) and the wire fraud statute (18 U.S.C. § 1343) (counts six through ten) filed on September 28, 1994.
A superseding indictment was filed on November 15, 1994, alleging that on August 5, 1994 an unauthorized wire transfer of $ 218,000 was made via the Citibank Cash Management System ("CCMS") from a Citibank account owned by a bank in Jakarta, Bank Artha Graha ("Bank Artha Graha account"), to an account maintained by a San Francisco entity entitled Primorye (USA) Corp. at the Bank of America in San Francisco. ("The Jakarta transfer"). Primorye (USA)'s president is alleged to be Evgueni Korolkov, the defendant's husband.
The superseding indictment further alleges that on August 5, an unknown person made an unauthorized transfer of $ 304,000 via the CCMS from a Citibank account owned by Banco Del Sud, a bank in Buenos Aires ("Banco Del Sud account"), to an account maintained by a California partnership called Shore Co. at Bank of America in San Francisco. Korolkova and her husband are alleged to be two of Shore Company's partners.
The initial indictment did not include the allegations surrounding the Jakarta transfer.
The initial indictment alleged a fraudulent scheme intended to move $ 193,300 from the Citibank account of a customer in Buenos Aires, Invest Capital, S.A. ("Invest Capital") to five different accounts in San Francisco and alleged that on August 17 and 18, 1994, Korolkova opened five bank accounts in her own name in San Francisco, California and that approximately one week later money was wired into those accounts from Invest Capital's Citibank account. The amount of unauthorized transfers totalled $ 199,300. The indictment alleged that the transfers were fraudulent because they were not authorized.
The Government claimed venue in this district based on the allegations that all wire transfers within Citibank's global banking system are routed through New York City.
On November 2, 1994 Korolkova's motion to dismiss the indictment on the grounds of improper venue and the Government's motion to take foreign depositions in support of its indictment were heard.
On November 15, the grand jury returned a superseding indictment in this case. According to this indictment, the funds were wired from the Jakarta, Buenos Aires and Invest Capital
accounts to San Francisco via Citibank's "Citibank Cash Management System" (the "CCMS"). This system permits a Citibank customer to access a computer network through a password and execute wire transfers of funds from an account at Citibank, or one of its affiliates, to accounts at other financial institutions. All CCMS money transfers were routed through Citibank's wire transfer department located at 111 Wall Street, which is located in this district.
The superseding indictment adds a conspiracy count to the original ten counts, adds Evgueni Korolkov (Ekaterina Korolkova's husband) as a defendant and includes the Jakarta transfer in the indictment. The superseding indictment also places the situs of the Banco Del Sud, Bank Artha Graha and Invest Capital accounts in New York and adds that the allegedly unauthorized transfers resulted in a loss to Citibank of approximately $ 23,000.
It is the Government's burden to show that a particular district has constitutional venue. See United States v. Potamitis, 739 F.2d 784, 791 (2d Cir.), cert. denied, 469 U.S. 918 (1984).
Congress has enacted no specific venue provisions applicable to wire and bank fraud provisions. The Supreme Court has held that where Congress has not explicitly specified the proper venue for a particular offense, courts should look to "the nature of the crime alleged and the location of the act or acts constituting it." Travis v. United States, 364 U.S. 631, 635, 5 L. Ed. 2d 340, 81 S. Ct. 358 (1981).
In addition, because some offenses are continuing in nature and thus are not restricted to one district, Congress has adopted a broad statutory definition for constitutional venue to accommodate such circumstances:
Except as otherwise expressly provided by enactment of Congress, any offense against the United States begun in one district, any offense against the United States begun in one district and competed in another, or committed in more than one district, may be inquired of and prosecuted ...