No Virginia Trial for Michiganders’ Money Laundering

Listen to this article

A Michigan couple accused of money laundering based on their alleged sale of marijuana to a third party in Michigan or Ohio, who then allegedly sold the marijua­na in Buchanan County, Virginia, and wrote checks from various Grundy National Bank accounts payable to a construction compa­ny owned by the Michigan couple, cannot be tried in Virginia on money laundering charges; a Buchanan County Circuit Court says venue in Virginia is improper.

Harm from crime

The court must first address where the harm from the alleged money laundering occurs, and if the key elements in the pros­ecution for money laundering are the imme­diate cause of harm that the commonwealth seeks to punish. The commonwealth posits that the sale of marijuana to Buchanan County residents is the immediate result of defendants’ actions in laundering money in Michigan. The commonwealth is mistaken.

The money launderer only must know that he/she is dealing with funds derived from “an activity which is punishable as a felony,” here, drug distribution. The Virginia venue of that activity is “of no moment” be­cause there is no evidence that defendants ever set foot in Virginia or were ever engaged in a conspiracy to commit money launder­ing; however, the criminal complaint alleges that they only conspired with each other and not the alleged marijuana seller in Virginia. Thus, the sale of drugs in Buchanan County by the seller and others was not the “imme­diate result” of the money laundering com­mitted in Michigan.

In fact, the only acts that formed the ba­sis for the money-laundering charges in the instant case consisted of banking trans­actions, which defendants executed only in Michigan. The only incident that could conceivably confer jurisdiction to this court is the fact that the deposited checks orig­inated from a bank account located in Bu­chanan County. In writing those checks, the alleged marijuana seller was the sole actor and there are no allegations that defendants engaged in any action in the commonwealth that would confer venue upon this court. As a result, the court declines to extend the ven­ue statute so as to allow for a prosecution of an out-of-state actor’s indirect assimilation of the commonwealth.

Economic harm

Moreover, the immediate result of defen­dants’ alleged money laundering is economic harm to financial institutions in Michigan and potential loss of tax revenue for the state of Michigan, not the harm associated with the alleged drug distribution in Virgin­ia. This is because the harm associated with drug distribution is merely ancillary to the harm associated with money laundering. Consequently, Michigan is where the direct and immediate result of the alleged illegal acts occurred. Also, the commonwealth is incorrect in its assertion that if the court declines to exercise jurisdiction, defendants could not be prosecuted anywhere, as Mich­igan Code § 750.411k makes it a crime to launder money.

Lastly, the court’s decision is bolstered by a recent U.S. Supreme Court case presenting facts nearly identical to the current case, U.S. v. Cabrales, 524 U.S. 1 (1998). Recognizing that some crimes may constitute “continuing offenses,” the Supreme Court applies its ven­ue criteria to conclude the money laundering statutes interdict only the financial transac­tions (acts located entirely in Florida), not the anterior criminal conduct that yielded the funds.

As such, Michigan is the proper venue for prosecution of defendants’ alleged mon­ey laundering; the court grants defendant’s objection to venue and dismisses all charges against both defendants.

Commonwealth v. Napier (Johnson) No. 79-16 through 98-16; June 20, 2016; Bu­chanan County Cir.Ct.; Nicholas Compton, Sr. Ass’t Comm. Att’y; Thomas R. Scott, Rob­ert M. Galumbeck for defendants. VLW 016-8-079, 7 pp.