Money Laundering—Acquittal

Two motel owners and a corporation who were accused of “laundering money from a prostitution ring” have been acquitted.^[1] Saying that the case “has been a mess from the beginning” and not expecting it to “get any better,” U.S. District Judge W. Craig Broadwater, according to the AP, made the decision at what was supposed to be a sentencing hearing for Dilipkumar Somabhai "Dan" Patel, and Surendra D. "Sam" Singh.^[2] Last April, the two individuals were convicted on one count each of money laundering, two counts each of conspiracy, and five counts each of inducing women to travel across state lines for illegal interstate commerce in violation of the Mann Act.^[3]

The Mann Act violations were allowed to stand, but Judge Broadwater agreed that the two should not have been “charged with money laundering and conspiracy to commit money laundering because a prostitute paying for a room at the motels didn't constitute money laundering.”^[4]

In August, Judge Broadwater issued an order dealing with a number of post-judgment filings. At issue was a post-judgment filing made pursuant to Rule 33 of the Federal Rules of Criminal Procedure. Under this Rule, “the court may vacate any judgment and grant a new trial if the interest of justice so requires.” The motion for a new trial “grounded on any reason other than newly discovered evidence must be filed within 7 days after the verdict or finding of guilty, or within such further time as the court sets during the 7-day period.”

In the first part of the Judge’s order—dealing the parent corporation, Jalaram, Inc., request that its guilty verdict for conspiracy to commit money laundering be vacated—the Judge ruled that “evidence adducted at trial does not support the jury’s finding that … Patel was acting in furtherance of the corporation and that the evidence did not meet the requirements of ‘proceeds’ and ‘financial transactions’ as required by” 18 U.S.C. § 1956(h).”^[5] Thus that verdict was vacated, and a motion for a new trial was granted; the motion for acquittal, however, was denied.^[6] Furthermore, Jalaram’s guilty verdicts on the Mann Act violations were vacated because the evidence presented at trial did not support the jury’s finding that Mr. Patel was acting in furtherance of the corporation; its motion for a new trial was denied, as was its motion for acquittal.^[7]

The second part of the order dealt with Mr. Singh, who requested that the money laundering guilty verdicts be vacated. The court agreed because evidence at trial did not support the jury’s finding.^[8] Thus that verdict was vacated, his motion for a new trial granted in part, and his motion for acquittal was denied.^[9] However, the Judge allowed the Mann Act violation verdicts stand, denying his motion for a new trial on those charges, as well as denying his motion for acquittal.^[10]

The third part of the order dealt with Mr. Patel, who requested that the money laundering guilty verdicts be vacated. The court agreed and vacated those verdicts, thereby granting in part his motion for a new trial and denying his motion for acquittal on those counts.^[11] The judge, however, allowed the Mann Act verdicts to stand.^[12]

If the AP is correct, and the judge ultimately acquitted the defendants on the verdicts to which he ordered a new trial, then the government’s only recourse is to appeal the ruling to the Fourth Circuit Court of Appeals.^[13]

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[1] Federal Judge Acquits Motel Owners in Money Laundering, Associated Press (via The Herald-Mail), Mar. 1, 2006.
[2] Id.
[3] Id.
[4] Id.
[5] Order Granting, Granting in Part, and Denying Defendants’ Post Trial Motions 1, United States v. Singh, No. 3:05-cr-00006 (N.D.W.Va. 2005) (available through PACER).
[6] Id. at 2.
[7] Id.
[8] Id.
[9] Id. at 2-3.
[10] Id. at 3.
[11] Id.
[12] Id. at 3-4.
[13] See AP, supra note 1.