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United States v. Mazza-Alaluf

September 22, 2010

UNITED STATES OF AMERICA, APPELLEE,
v.
MAURICIO ALFONSO MAZZA-ALALUF, DEFENDANT-APPELLANT.



SYLLABUS BY THE COURT

Appeal from a judgment entered after a bench trial in the United States District Court for the Southern District of New York (P. Kevin Castel, Judge) convicting defendant of conspiring to operate and actually operating an unlicensed money transmitting business. See 18 U.S.C. §§ 371, 1960(b)(1)(A). We conclude that the trial evidence was sufficient to support defendant's conviction because (1) 18 U.S.C. § 1960(b)(1)(A) does not require a showing that the unlicensed money transmitting business was a "domestic financial institution" as defined in 31 U.S.C. § 5312, and (2) defendant's business transmitted more than $200 million from accounts located in three states without obtaining appropriate state licenses. We further conclude that defendant's sentence was reasonable.

AFFIRMED.

The opinion of the court was delivered by: Reena Raggi, Circuit Judge

Submitted: August 3, 2010

Before: SACK, RAGGI, and LYNCH, Circuit Judges.

Defendant Mauricio Alfonso Mazza-Alaluf appeals from a judgment of conviction entered after a bench trial in the United States District Court for the Southern District of New York (P. Kevin Castel, Judge). The district court found Mazza-Alaluf guilty of conspiring to operate and actually operating an unlicensed money transmitting business, see 18 U.S.C. §§ 371, 1960(b)(1)(A), based on evidence that his company, Turismo Costa Brava, S.A. ("Turismo"), transmitted more than $200 million in New York, Illinois, and Michigan without obtaining appropriate state licenses. Mazza-Alaluf submits that the trial evidence was insufficient to support his conviction because, as a Chilean company whose office and employees were located in Chile, Turismo was neither (1) a United States "domestic financial institution" within the meaning of 31 U.S.C. § 5312;nor (2) required to obtain money transmitting licenses in any of the three states through which it transmitted millions of dollars. He further contends that his forty-two-month, below-Guidelines sentence was procedurally and substantively unreasonable.

We reject these arguments as without merit. Title 18 U.S.C. § 1960(b)(1)(A), under which Mazza-Alaluf was convicted for operating Turismo without appropriate state licenses, does not require the government to prove that the charged money transmitting business was a "domestic financial institution." Further, the trial evidence was sufficient to permit a finding that Mazza-Alaluf operated a money transmitting business in New York, Illinois, and Michigan that required appropriate state licenses. Finally, Mazza-Alaluf's sentence was neither procedurally nor substantively unreasonable. Accordingly, we affirm the judgment of conviction.

I. Background

On October 15, 2008, a grand jury in the Southern District of New York charged Mazza-Alaluf in a two-count, superseding indictment with conspiring to operate and actually operating an unlicensed money transmitting business, Turismo, in violation of 18 U.S.C. § 371 and § 1960. The indictment alleged that Turismo was an unlicensed money transmitting business because it (1) operated without appropriate state money transmitting licenses, see 18 U.S.C. § 1960(b)(1)(A); and (2) failed to comply with federal registration requirements for money transmitting businesses, see id. § 1960(b)(1)(B).

Pursuant to Fed. R. Crim. P. 23, Mazza-Alaluf waived his right to a jury trial. The district court held a two-day bench trial, after which it made thorough findings of fact, which are neither contested on appeal nor clearly erroneous. See United States v. Mazza-Alaluf, 607 F. Supp. 2d 484 (S.D.N.Y. 2009). Accordingly, we assume familiarity with the district court's opinion and do not ourselves repeat its discussion of the facts of the case except as necessary to resolve Mazza-Alaluf's challenges to his conviction.

Although the district court found Mazza-Alaluf guilty of both conspiring to operate and operating a money transmitting business without obtaining appropriate licenses in New York, Illinois, and Michigan, see 18 U.S.C. § 1960(b)(1)(A), it concluded that the government had not proved Mazza-Alaluf guilty of failing to comply with federal money transmitting registration requirements codified at 31 U.S.C. § 5330, see 18 U.S.C. § 1960(b)(1)(B). On this point, the district court found that Turismo's actions in the United States made it a "domestic financial institution" under 31 U.S.C. § 5312. Nevertheless, because Turismo lacked an agent, agency, branch, or office "within the United States," 31 C.F.R. § 103.11(n), (uu), it was not subject to federal registration regulations. The government does not appeal this determination.

Because the value of funds transmitted by Turismo in the three states was approximately $244 million, the Probation Office reported that Mazza-Alaluf's base offense level under the Sentencing Guidelines was thirty-four. See U.S.S.G. §§ 2X1.1, 2S1.3(a)(2), 2B1.1(b)(1)(O). The district court then granted a two-level reduction for acceptance of responsibility. See id. § 3E1.1(a). With a criminal history category of I, the district court calculated that Mazza-Alaluf faced a Guidelines range of 121 to 151 months' imprisonment. Title 18 U.S.C. § 1960(a), however, provided a maximum prison term of five years on each count of conviction, thereby reducing the Guidelines range to a total of 120 months. See U.S.S.G. § 5G1.1(a). Based on its evaluation of the 18 U.S.C. § 3553(a) factors, the court determined that a considerably lower prison term was warranted, and it sentenced MazzaAlaluf to a total of forty-two months' imprisonment, two years' supervised release, and a $200 special assessment. Mazza-Alaluf timely filed this appeal.

II. Discussion

A. Mazza-Alaluf's Sufficiency Challenge

Although we review a challenge to the sufficiency of the evidence de novo, see United States v. Sabhnani, 599 F.3d 215, 241 (2d Cir. 2010), defendant "bears a heavy burden because a reviewing court must consider the evidence 'in the light most favorable to the prosecution' and uphold the conviction if 'any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.'" United States v. Aguilar, 585 F.3d 652, 656 (2d Cir. 2009) (quoting Jackson v. Virginia, 443 U.S. 307, 319 (1979) (emphasis in Jackson)). We apply this same deferential standard when we review a verdict rendered by a judge after a bench trial. See United States v. Pierce, 224 F.3d 158, 164 (2d Cir. 2000); United States v. Zabare, 871 F.2d 282, 284, 286 (2d Cir. 1989). To the extent Mazza-Alaluf's challenge presents an issue of statutory construction, however, our review is de novo. See United States v. Shyne, --- F.3d ----, 2010 WL 3035519, at *2 (2d Cir. 2010).

1. Section 1960(b)(1)(A) Does Not Require Proof that the Charged Money Transmitting Business Was a "Domestic Financial Institution" Covered by Federal Reporting Requirements

Title 18 U.S.C. ยง 1960(a) makes it a crime knowingly to "conduct[], control[], manage[], supervise[], direct[], or own[] all or part of an unlicensed money transmitting business." ...


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