Money Laundering—Joseph Pellecchia

Pennsylvania business man Joseph Pellecchia, along with five other defendants, has been indicted on 26 counts of committing money laundering, mail fraud, wire fraud, and conspiracy to commit honest-services fraud.^[1] Mr. Pellecchia is accused of engineering bank transactions to conceal payments to the credit-card bill of Rick Marino, a city councilman; in exchange Mr. Marino intervened with the Philadelphia school district, which awarded contracts worth almost $400,000 to Mr. Pellecchia’s workers’ compensation consulting firm.^[2]

Money Laundering
Under 18 U.S.C. § 1956(a)(3)(B), it is a crime for a person to conduct a financial transaction involving property used to conduct or facilitate a specified unlawful activity with the intent to conceal or disguise the nature of that property. Both mail fraud and wire fraud are specified unlawful activities.^[3]

The punishment for a violation of this section is a fine, imprisonment for up to 20 years or both.^[4]

Mail Fraud
Under 18 U.S.C. § 1341, it is a crime to devise a scheme or artifice to defraud and use the nationals mails to carry out that scheme.

The punishment for violating this section is a fine, imprisonment for up to 20 years or both. If a financial institution is harmed in this scheme, the fine can be up to $1 million, and the prison sentence can be as long as 30 years.

Wire Fraud
Wire fraud, criminalized by 18 U.S.C. § 1343, is substantially the same crime, with the same punishments, as mail fraud, except telecommunications technology is used to carry out the fraud instead of the mail.

Conspiracy to Commit Honest-Services Fraud
Under 18 U.S.C. § 1349, any person who commits a fraud offense will be punished as if the offense were actually committed. Honest services fraud is criminalized by 18 U.S.C. § 1346, which states that the definition of “scheme or artifice to defraud” includes a scheme to deprive another of the intangible right of honest services. This definition is used when prosecuting someone for mail or wire fraud.

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[1] Jim Walsh, Sewell Man Helped Mariano Pay Bill, U.S. Charges, Courier-Post, Oct. 26, 2005, available here.
[2] Id.
[3] 18 U.S.C. § 1956(c)(7)(A) (incorporating the definition of an offense under 18 U.S.C. § 1961(1)).
[4] Id. § 1956(a)(3).