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United States v. Ronald Markham

United States District Court, E.D. Louisiana

February 7, 2019


         SECTION "A" (1)



         The following motions are before the Court:

         Motion to Dismiss Money Laundering Counts 9-22 (Rec. Doc. 126) filed by defendant Ronald Markham.[1]

         Motion for a Bill of Particulars (Rec. Doc. 124) filed by defendant Ronald Markham.

         Motion to Dismiss Counts 2-7 (18 U.S.C. § 1343-Wire Fraud) (Rec. Doc. 125) filed by defendant Ronald Markham.

         Motion to Dismiss Counts 1, 9-18, 21 (Merger) (Rec. Doc. 127) filed by defendant Ronald Markham.[2]

         Defendant Ronald Markham has requested oral argument. (Rec. Doc. 128). The Court is not persuaded, however, that oral argument would be helpful in light of the issues presented.

         For the reasons that follow, the motions are denied.


         On December 14, 2017, a grand jury in the Eastern District of Louisiana indicted Irvin Mayfield and Ronald Markham charging conspiracy to commit wire fraud, mail fraud, and money laundering, wire fraud, mail fraud, money laundering, and obstruction of justice. (CR17-241). As charged in the indictment, Mayfield founded New Orleans Jazz Orchestra (“NOJO”) in 2002, and served as its Artistic Director. NOJO was composed of 18 musicians who routinely performed and toured, and it employed staff. (Rec. Doc. 78, Superseding Indictment ¶ 3). Both Mayfield and Markham received salaries from NOJO. Throughout NOJO's existence the organization relied heavily on donations and charitable grants to fund its operations. (Id. ¶ 5). In February 2011, a significant source of NOJO's funding was terminated. (Id. ¶ 6).

         Mayfield also served as a board member and later chairman of the board of the New Orleans Public Library Foundation (“NOPLF”), a nonprofit that maintained a significant investment account. Markham also joined the board and succeeded Mayfield as chair. (Id. ¶¶ 8-11). The crux of the complaint is that when the funding for NOJO dried up, from August 2011 until about November 2013, Defendants transferred large sums of money from the NOPLF account and used it to fund NOJO and enrich themselves. (Id. ¶ 11). The indictment also charges Defendants with creating false and misleading business records in order to conceal their scheme from auditors, investment managers, and other NOPLF board members. A superseding indictment was returned on June 21, 2018. (Rec. Doc. 78). A second superseding indictment (the “SSI”) was returned on December 6, 2018, (Rec. Doc. 113), and it constitutes the current charging document.

         The criminal trial in this matter is scheduled to commence on April 29, 2019.

         Motion to Dismiss Money Laundering Counts 9-22 (Rec. Doc. 126)

         Defendants move to dismiss Count 9 (money laundering conspiracy) of the SSI and Counts 10-22 (money laundering) of the SSI arguing that the money laundering statute is unconstitutionally vague as applied to them. Defendants argue that the statute is vague as applied to them because it does not provide the defendant with adequate notice that his conduct is criminal.[3] Specifically, Defendants argue that the “derived from” element of the crime provides no limitation on how attenuated the property can be from the specified unlawful activity (in this case mail fraud and wire fraud) before the criminal “taint” is erased. In other words, how close must the connection be between the criminal activity and the property arguably derived from the activity before the statute is triggered? To demonstrate the attenuation problem in this case, Defendants point out that six substantive money laundering counts (10-15) have been charged based on the funds transfers described in Overt Act 42, and that the same money is involved at least four times in monetary transactions. Defendants point out a similar issue with money laundering Counts 17-19, which concern the transfer detailed in Overt Act 46.

         A criminal law so vague that it fails to give ordinary people fair notice of the conduct it punishes, or one that is so standardless that it invites arbitrary enforcement violates due process. Johnson v. United States, 135 S.Ct. 2551, 2556 (2015) (citing Kolender v. Lawson, 461 U.S. 352, 357-58 (1983)). The prohibition of vagueness in criminal statutes is “a well-recognized requirement, consonant alike with ordinary notions of fair play and the settled rules of law.” Id. (quoting Connally v. Gen. Constr. Co., 269 U.S. 385, 391 (1926)).

         While the Court acknowledges that there could be circumstances in which a money laundering charge presents a vagueness problem due to attenuation, the Court is not persuaded that the transactions alleged in this case suffer from that problem. Simply put, the money laundering charges that target multiple transactions with the same funds are not so removed from the specified unlawful activity as to create a vagueness problem. As the Government points out, the transfers are not temporally distant from the criminal violations that are alleged to have generated the property, and there are at most three separate subsequent transfers involved. It follows then that as to any “attenuated” transaction, if the Government proves beyond a reasonable doubt that the defendant knew that the monetary transaction involved criminally derived property then per force there is no issue with notice. In a situation where the attenuation is so prevalent so as to arguably deprive the defendant of the knowledge that the funds involved in the transaction were derived from criminal activity, the Government would most likely be unable to meet its burden of proof as to knowledge, which is an essential element of the crime of money laundering. In other words, in most cases the attenuation problem is dealt with by holding the Government to its burden of proof at trial.

         In sum, Defendants' arguments are more theoretical and cast in the abstract than as applied to this case-this is particularly so before the Government has presented its case at trial. Defendants' motion to dismiss the money laundering counts is denied because the Court is not ...

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