United States v. Bah
2009 U.S. App. LEXIS 16915, 2009 WL 2341968, 574 F.3d 106 (2009)
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Rule of Law:
The federal statute prohibiting the operation of an unlicensed money transmitting business, 18 U.S.C. § 1960, criminalizes the act of transmitting funds without a license, but does not incorporate broader state law prohibitions against merely engaging in the business of receiving money for transmission.
Facts:
- Boubacar Bah operated a company named B & S Bah Enterprises from a restaurant he owned in the Bronx, New York.
- Customers delivered U.S. currency to Bah at his Bronx restaurant with instructions to deliver the equivalent value in local currency to recipients in West Africa.
- Bah also operated a separate money transmitting business in New Jersey, named B & M Bah Enterprises, Inc., for which he had obtained a valid state license.
- Bank records showed that Bah's New York company transferred over $1.2 million through a Bronx bank branch between January and August 2002.
- Bah admitted to federal agents that he collected approximately $15,000 to $20,000 in New York each week.
- Bah stipulated that he never possessed a license from the State of New York for the business of receiving money for transmission or transmitting money.
- Bah's defense was that he only received money in New York ancillary to his legally licensed transmitting business in New Jersey, and that his New York business was for the import and export of goods.
Procedural Posture:
- Boubacar Bah was charged in the U.S. District Court for the Southern District of New York with operating an unlicensed money transmitting business in violation of 18 U.S.C. § 1960.
- Prior to trial, the government filed a motion in limine to prevent Bah from introducing evidence of his valid New Jersey money transmitting license, which the district court granted.
- At the conclusion of the trial, Bah requested a jury instruction clarifying that federal law does not make it unlawful to merely receive money for transmission without a license.
- The district court denied Bah's requested instruction and instead instructed the jury based on the broader New York state law, which criminalizes both receiving and transmitting.
- A jury convicted Bah on the money-transmitting count.
- The district court entered a judgment of conviction and sentenced Bah to probation and a fine.
- Bah, as Defendant-Appellant, appealed his conviction to the U.S. Court of Appeals for the Second Circuit.
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Issue:
Does 18 U.S.C. § 1960, the federal statute prohibiting unlicensed money transmitting businesses, incorporate a state law provision that makes it illegal to engage in the business of receiving money for transmission, in addition to transmitting it?
Opinions:
Majority - Chief Judge Dennis Jacobs
No. The federal statute, 18 U.S.C. § 1960, does not incorporate the feature of New York Banking Law that prohibits engaging in the business of receiving money for transmission without a license. Section 1960 explicitly defines 'money transmitting' as 'transferring funds,' and its text does not mention the receipt of money for transmission. While New York's statute prohibits both receiving and transmitting, the federal law is narrower and only criminalizes the act of transmitting funds from a state where the business is unlicensed. Therefore, receiving money in New York for licensed transmission from New Jersey would not, by itself, constitute a federal crime. The district court's jury instruction, which conflated the state and federal prohibitions, was erroneous and likely misled the jury, requiring a new trial.
Analysis:
This decision clarifies the scope of federal criminal liability for money transmitting businesses that operate across state lines. It establishes that the federal statute, 18 U.S.C. § 1960, is not a simple vessel for all related state licensing laws; rather, it criminalizes only the specific conduct defined within the federal statute itself—the act of 'transmitting' funds. This creates a crucial distinction that can serve as a defense for businesses licensed in one state that engage in ancillary activities, such as collecting funds, in another. Future prosecutions under this statute will require the government to prove not just that money was received in an unlicensed state, but that the actual transmission of funds originated from that state.
