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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    mr. kuehne may have "won", (none / 0) (#1)
    by cpinva on Tue Oct 27, 2009 at 12:20:58 PM EST
    but how much did it cost him, in terms of out-of-pocket expenditures, to defend himself, and lost opportunity costs, from paid work he could have been doing instead?

    the prosecution (unless they're very stupid lawyers, which i doubt) knew (or should have known) they had no actual case, but it cost none of them personally to file and pursue these charges. they'll claim they had a "good faith" reliance on sect. 853, in bringing charges, but anyone with a brain knows better; the judge as much as said so in his opinion.

    this is a case where sanctions really should be considered, against the prosecution, and civil damages sought by the defense. none of that will happen of course, and they'll be free to to engage in further abusive actions.

    Maybe Criminal Defense Lawyers are the only ones (none / 0) (#2)
    by downtownted on Tue Oct 27, 2009 at 08:28:21 PM EST
    with the courage to go "all in". Cpinva is right about DOJ and local USAs going on these attacks because there will be no downside for them. No one in the judiciary is going to hold them accountable. Never have, never will.

    This quote about the inactivity of German intellectuals following the Nazi rise to power and the purging of their chosen targets, group after group fits pretty well, don't you think.

    "First they came for the communists, and I did not speak out--because I was not a communist;

    "Then they came for the socialists, and I did not speak out--because I was not a socialist;

    "Then they came for the trade unionists, and I did not speak out--because I was not a trade unionist;

    "Then they came for the Jews, and I did not speak out--because I was not a Jew;

    "Then they came for me--and there was no one left to speak out for me."

    Let us give thanks to this valiant fight from Miami.