Forfeiture mandatory after money laundering convictions

The 4th U.S. Circuit Court of Appeals affirmed the defendant’s convictions for money laundering, conspiracy and transportation of stolen goods, but reversed a U.S. District Court ruling that denied the government’s request for forfeiture.

The case arose from businesses that bought large volumes of fraudulently obtained Apple iPhones and other electronics at below-market prices and resold them overseas. Investigators uncovered thousands of suspicious transactions after a shipment ruptured during transit, leading to criminal charges.

On appeal, the defendant did not challenge the sufficiency of the evidence. Instead, the defendant argued that the trial court improperly admitted wireless-carrier spreadsheets, invoices, emails and summary exhibits. The defendant contended that some records failed to satisfy the business-records exception to hearsay and that others violated the Confrontation Clause.

The 4th Circuit rejected those arguments. The court held that the wireless-carrier spreadsheets qualified as business records because the underlying data were maintained in the ordinary course of business and merely exported into spreadsheet form in response to subpoenas. For electronically stored information, the relevant record was the underlying data, not the later display format. The court also held that the records were not testimonial because they were created for business administration, not criminal prosecution.

The court further held that any assumed errors involving invoices, advertising emails or summary exhibits were harmless given the overwhelming evidence of guilt, including testimony from co-conspirators and investigators, records of bulk phone transactions and text messages involving third-party phone-unlocking services.

On the government’s cross-appeal, the 4th Circuit held that forfeiture was mandatory once statutory requirements were met. The U.S. District Court could not withhold forfeiture based on concerns that restitution and forfeiture would create duplicative financial penalties. The case was remanded with instructions to enter a forfeiture judgment.

The 25 page opinion is U.S. v. Mhana, Lawyers Weekly No. 001-168-26.