Just a brief update to the Ben Kuehne saga, discussed here, here and here. The 11th Circuit has affirmed the dismissal of the first count of the indictment by Judge Cooke. The court rejected the government’s argument that 18 U.S.C. 1957 (f)(1) was “nullified” by the decision in Caplin & Drysdale, holding that legal fees paid by tainted funds were forfeitable and a companion case to Monsanto.
The Government argues that the exemption in § 1957(f)(1) has been “nullified” or “vitiated” because, shortly after the provision was enacted, the Supreme Court held in Caplin & Drysdale, Chartered v. United States, 491 U.S. 617, 626 (1989) that the Sixth Amendment right to counsel does not protect the right of a criminal defendant to use criminally derived proceeds for legal fees. However, Caplin & Drysdale, which addresses a different statute governing the civil forfeiture of criminally derived proceeds, has no bearing on § 1957(f)(1) and indeed supports the conclusion that such proceeds have been statutorily exempted
from criminal penalties. The Government has pointed to no principle of statutory construction—nor indeed to any legal principle—that supports the conclusion that a statutory provision may be “nullified” by a Supreme Court decision on a completely different issue, absent any indication that Congress intended such a result.
The upshot is while legal fees are subject to forfeiture, the lawyer is exempt from criminal liability, which the Judge Barkett’s opinion calls “an absurd result.” As David Oscar Markus asks at Southern District of Florida Blog,
H/T Brian Tannebaum and Ellen Podgor at White Collar Crime Prof Blog.
Now let’s see if the government does the right thing and dismiss the rest of the indictment against Ben…Or will they, having suffered a decisive loss, persist in some misguided, childish effort to preserve their dignity?
H/T Brian Tannebaum and Ellen Podgor at White Collar Crime Prof Blog.
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