United States v. Michael Piervinanzi, Daniel Tichio, John M. Bookhart, Jr.
1994 U.S. App. LEXIS 9617, 23 F.3d 670 (1994)
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Rule of Law:
An international transfer of funds intended to complete an underlying specified unlawful activity, such as bank fraud, constitutes a violation of the international money laundering statute, 18 U.S.C. § 1956(a)(2), because the transfer is made with the intent to 'promote the carrying on' of that activity. The statute does not require the laundering transaction to be distinct from or subsequent to the completion of the underlying offense, nor does it require that the defendant first obtain possession of criminal 'proceeds'.
Facts:
- Lorenzo DelGiudice, an auditor for Irving Trust, conspired with Anthony Marchese to commit a fraudulent wire transfer.
- They recruited Daniel Tichio, who arranged for the stolen funds to be received in an associate's bank account in the Cayman Islands to leverage its bank secrecy laws.
- Michael Piervinanzi was recruited to provide security for the operation, and the planned amount to be stolen was increased to $14 million.
- On July 6, 1988, Piervinanzi's brother called Irving Trust to initiate the fraudulent transfer, but DelGiudice had intentionally sabotaged the attempt by omitting necessary correspondent bank information from the script.
- After the first scheme failed, DelGiudice, Marchese, and Piervinanzi planned a second scheme targeting a Morgan Guaranty account, arranging to use the stolen funds to buy diamonds overseas.
- On February 23, 1989, Piervinanzi's brother called Morgan Guaranty to initiate a $24 million wire transfer to an account in London.
- A bank clerk became suspicious because the caller's voice was unfamiliar, and although the funds reached a correspondent bank in New York, the transfer was stopped and reversed after the bank confirmed it was unauthorized.
Procedural Posture:
- Michael Piervinanzi and Daniel Tichio were charged in a superseding indictment in the U.S. District Court for the Southern District of New York with conspiracy, attempted bank fraud, and attempted money laundering in violation of 18 U.S.C. § 1956(a)(2).
- Piervinanzi was additionally charged with, among other things, money laundering in violation of 18 U.S.C. § 1957 for the Morgan Guaranty scheme.
- Following an eleven-day trial, a jury returned a verdict convicting Piervinanzi and Tichio on all counts.
- The district court sentenced Piervinanzi to 210 months and Tichio to 135 months imprisonment.
- Piervinanzi and Tichio, as appellants, appealed their convictions and sentences to the U.S. Court of Appeals for the Second Circuit.
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Issue:
Does an attempted international wire transfer of funds, which is an integral component of an underlying bank fraud scheme, constitute a violation of the international money laundering statute, 18 U.S.C. § 1956(a)(2), by being a transfer made 'with the intent to promote the carrying on of specified unlawful activity'?
Opinions:
Majority - Mahoney, Circuit Judge
Yes. An attempted international wire transfer that is an integral part of an underlying bank fraud scheme violates 18 U.S.C. § 1956(a)(2) because it is made with the intent to 'promote the carrying on' of the fraud. The court reasoned that unlike the domestic money laundering statute, § 1956(a)(1), or the monetary transaction statute, § 1957, the international money laundering statute, § 1956(a)(2), contains no requirement that criminal 'proceeds' first be generated or obtained. The act of transferring funds overseas was integral to the success of the fraud schemes by making the funds difficult to trace and recover, which undeniably 'promoted' the underlying crime of bank fraud. The court held that the attempted fraudulent transfer and the attempted overseas transmission were analytically distinct acts, rejecting the argument that the two offenses 'merged'. The statutory phrase 'carrying on' was interpreted to apply to the conduct of a single offense, not just continuous criminal activity.
Analysis:
This decision significantly broadens the application of the international money laundering statute by establishing the 'promotion' theory in the context of financial fraud. It allows prosecutors to charge money laundering in tandem with an underlying fraud even when the transfer is the final step of the fraud itself, rather than a separate, secondary act of cleaning already-acquired proceeds. This interpretation removes the need to prove the defendant ever possessed the 'dirty money,' making it easier to secure convictions with enhanced penalties for financial crimes that involve an international element. The ruling solidifies a distinction between § 1956(a)(2) and other laundering statutes (§ 1956(a)(1) and § 1957) that do have a 'proceeds' requirement.
