11th Cir. Invalidates Money Laundering Charge Against Defense Lawyer Over Fees
Good news for Ben Kuehne and the defense bar today. The 11th Circuit has upheld the trial court's dismissal of a money laundering charge against prominent defense attorney Ben Kuehne. (Background here.) The opinion is here. The SDFla Blog has more here.
The issue was the the meaning of the exemption in § 1957(f)(1), whose plain language excludes from the statute’s scope “any transaction necessary to preserve a person’s right to representation as guaranteed by the sixth amendment to the Constitution.” Both sides agreed the funds in question were used to pay attorneys' fees. [More...]
(Section 1957(a) prohibits a person from knowingly engaging or attempting to engage “in a monetary transaction in criminally derived property that is of a value greater than $10,000 and is derived from specified unlawful activity.”)
Ben was hired by Roy Black's firm to issue an opinion letter as to whether $5.3 million in funds being offered to represent Colombian Fabio Ochoa, an alleged drug cartel leader, were clean or tied to illegal activity.
Kuehne issued “opinion letters” in which he concluded that several monetary transfers from Ochoa to him, as an intermediary, were not comprised of proceeds of criminally derived property. Kuehne then transferred the fees, totaling approximately $5.3 million, to Ochoa’s defense team. The Government alleged that Kuehne and his co-defendants supported their conclusion that the funds were untainted with false documents and statements, knowing that the funds were criminally derived and intending to conceal their true source.
The Court said:
Thus, the plain meaning of the exemption set forth in §1957(f)(1), when considered in its context, is that transactions involving criminally derived proceeds are exempt from the prohibitions of § 1957(a) when they are for the purpose of securing legal representation to which an accused is entitled under the Sixth Amendment. Accordingly, the exemption is limited to attorneys’ fees paid for representation guaranteed by the Sixth Amendment in a criminal proceeding and does not extend to attorneys’ fees paid for other purposes.
The Government relied on the forfeiture case of Caplin v. Drysdale. The 11th Circuit said:
The Government has pointed to no principle of statutory construction—nor indeed to any legal principle—that supports the conclusion that a statutory provision may be “nullified” by a Supreme Court decision on a completely different issue, absent any indication that Congress intended such a result.
...Unlike section 1957, § 853 contains no express exemption for funds paid for legal representation. It simply requires the forfeiture of all criminally derived proceeds, without exception.
The Court ends the opinion with:
The district court was eminently correct in holding that Defendants are not subject to criminal prosecution under § 1957(a), because the plain language of §1957(f)(1) clearly exempts criminally derived proceeds used to secure legal representation to which an accused is entitled under the Sixth Amendment.
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