Thursday, October 20, 2011

Money Laundering - Insufficient Knowledge of Intent to Conceal

United States v. Richardson, – F.3d –, 2011 WL 4430808 (3d Cir. Sept. 23, 2011). Asya Richardson was the fiancee of Alton Coles, the leader of a drug ring responsible for selling large amounts of cocaine and cocaine base in the Philadelphia area between 1998 and 2005. In the summer of 2005, the couple bought a home together. The government charged Richardson with money laundering, under 18 U.S.C. § 1956(a)(1)(B)(1), on the theory that she had participated in the purchase of the home knowing that drug money was being used and with intent to conceal that fact. The court found the evidence insufficient to support her conviction.

Although the government proved that Richardson lied about various aspects of the transaction in the mortgage materials, there was little evidence that she did so for any reason other than to hide the couple’s bad credit. There was also little evidence connecting her to Coles’s suspicious financial transactions related to the house (e.g., structuring deposits for the down payment). Thus, the government could not prove the element that Richardson knew the transaction was designed to conceal the nature, location, source, ownership or control of the proceeds of a specified unlawful activity. In considering Richardson’s various arguments, the Court held that “proceeds” of drug trafficking are gross receipts, not profits, weighing in on a question left open in Supreme Court’s decision in United States v. Santos, 553 U.S. 507 (2008).

Summary by Sarah Gannett

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