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U.S. v. BERAS

United States District Court, S.D. New York


January 29, 2004.

UNITED STATES OF AMERICA -against- ROBERTO BERAS, Defendant

The opinion of the court was delivered by: SHIRLEY KRAM, Senior District Judge

OPINION AND ORDER

Pro se defendant, Roberto Beras, moves this Court,*fn1 pursuant to Rule 12(b)(2)*fn2 of the Federal Rules of Criminal Procedure to dismiss the indictment charging him with 82 counts of money laundering and structuring transactions to evade reporting requirements in violation of 18 U.S.C. § 1956 and 31 U.S.C. § 5324. Beras essentially asserts that this Court lacked jurisdiction over his criminal activities because the federal government did not have exclusive jurisdictional authority over Page 2 the geographical location where the criminal activities took place. For the reasons set forth below, Beras' motion is denied.

I. BACKGROUND

  On December 4, 2000, Beras was convicted by a jury of one COUNT of conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h); one count of conspiracy to evade currency repairing requirements, in violation of 18 U.S.C. § 371; 33 counts of international money laundering, in violation of 18 U.S.C. § 2 and 1956(a)(2)(B); seven counts of money laundering, in violation of 18 U.S.C. § 2 and 1956(a)(3); 33 counts of evading currency reporting requirements by structuring financial transactions, in violation of 18 U.S.C. § 2 and 31 U.S.C. § 5324 (3); and seven counts of evading currency reporting requirements by causing a domestic financial institution to fail to file a currency transaction report, in violation of 18 U.S.C. § 2 and 31 U.S.C. § 5324(a)(1).*fn3 On November 21, 2001, he was Page 3 sentenced to a total of 292 months imprisonment, 3 years supervised release, a $4,100.00 special assessment, and was additionally subject to an order of forfeiture in the amount of $10 million.

  The Second Circuit affirmed Beras' conviction on December 20, 2002. However, on February 21, 2003, the Second Circuit granted Beras' motion to recall the mandate to allow Beras to request an en banc hearing out of time. The motion for an en banc hearing is still pending, and the mandate has not yet reissued from the Second Circuit. Beras filed the instant motion on July 2, 2003.

 II. DISCUSSION

  Prior to a 2002 Amendment to the Federal Rules of Civil Procedure Rule 12, subsection (b)(2) of Rule 12 stated objections that the indictment "failed to show jurisdiction in the court . . . shall be noticed by the court at any time during the pendency of the proceedings." Fed.R. Crim. P 12(b)(2). Presently, Federal Rules of Civil Procedure Rule 12(b)(3)(B), rather than Rule 12(b)(2), encompasses the rule regarding Page 4 objections to the court's jurisdiction. Rule 12(b)(3)(B) states [A]t any time while the case is pending, the court may hear a claim that the indictment or information fails to invoke the court's jurisdiction. . . ." Fed.R.Crim.P. 12(b)(3)(B). Beras' two main arguments in support of his motion to dismiss the indictment for lack of territorial jurisdiction are as follows; (1) The federal government and this Court lack territorial jurisdiction over this case because the federal government does not have control over the geographical location where the crime took place and because the federal government may not investigate Dinero Express, Inc. because Dinero Express, Inc. was regulated by the New York State Banking Commission, a State agency. (2) The money laundering statute, 18 U.S.C. § 1956, does not fall within Congress's Commerce Clause power. Beras arguments are incorrect.

 A. Defendant's Motion to Dismiss for Lack of Territorial Jurisdiction

  [U]nder the U.S. Constitution, the federal government may regulate conduct occurring anywhere in the fifty states so long as it sufficiently implicates one of the national government's enumerated powers, such as the power over interstate commerce." United States v. Carnes, 113 F. Supp.2d 1145, 1150 (E.D. Mich. 2000). Both the state and federal governments have the Page 5 authority to regulate certain forms of conduct occurring within each state. The federal government also has power to investigate and prosecute a private money remitter agency that violates a valid federal law, despite the fact that the institution is regulated by a State agency. Accordingly, because Beras' criminal conduct occurred in the United States it is irrelevant that the federal government has not attempted to demonstrate that Beras' activity occurred in some zone of exclusively federal `territorial' jurisdiction." Id. Further, that the New York State Banking Commission regulates Dinero Express, Inc. is of no consequence.

  The next issue is whether the money laundering statute, 18 U.S.C. § 1956, comes within Congress's enumerated powers, specifically its Commerce Clause authority. In United States v. Lopez 514 U.S. 549 (1995), the United States Supreme Court held that where economic activity substantially affects interstate commerce [congressional] legislation regarding that activity will be sustained." Id. at 560. The Second Circuit has held that section 1956 has "everything to do with commerce" and that money laundering is an economic activity. United States v. Goodwin 141 F.3d 394, 399 (2d Cir. 1997). The Second Circuit wrote

  money laundering is a quintessential economic activity. Indeed, it is difficult to imagine a Page 6 more obviously commercial; activity than engaging in financial transactions involving the profits of unlawful activity. This is particularly so where the intent of the transaction is to conceal the source of those profits or to promote the unlawful activity and thereby yield even greater economic rewards.

 Id. Further, the Court stated that money laundering "substantially affects interstate commerce" and that `money laundering is the archetypical activity which, while in isolation may not: affect interstate commerce, undoubtedly will have ramifications in interstate commerce when taken in the aggregate.' Id. (quoting United States v. Leslie, 103 F.3d 1093, 1100 (2d Cir. 1997). Accordingly, this Court finds that Beras' argument that Section 1956 does not fall within Congress's Commerce power has no merit*fn4 and the Court rejects Beras' objection to the Court's jurisdiction over his case.*fn5 Page 7

 III CONCLUSION

  For reasons set forth above, Beras Motion to Dismiss for Lack of Territorial Jurisdiction is denied.

  SO ORDERED


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