Temporal delay between underlying fraud and subsequent wire transfer dooms wire fraud theory
The Ninth Circuit recently reversed wire fraud convictions on the ground that the wire transfers upon which the 18 U.S.C. § 1343 charges were based occurred so long after the underlying activity was completed that the transfers could not be said to be "in furtherance" of a fraud. United States v. Lazarenko, No. 06-10592 (9th Cir., April 10, 2009).
In Lazarenko, the defendant, a Ukrainian official, had allegedly used his position to receive money and ownership interests in various entities, and allegedly had caused millions of dollars in such monies to be deposited into United States bank accounts. In 1993 and 1994, the evidence showed, Lazarenko had received some $14 million which ended up in this country. Years later, in 1997 and 1998 the defendant caused wire transfers of a portion of those funds to be made, and was charged with wire fraud, among other charges. But the Ninth Circuit held that the intervening three or four years, during which time the monies simply remained on deposit, was too long a period of time to conclude that the later transfers were "in furtherance" of the original scheme which led to the deposits:
"If the government's theory were correct, then it would be possible for an ordinary fraud to be converted into wire fraud simply by the perpetrator picking up the telephone three years later and asking a friend if he can store some fraudulently-obtained property in his garage before the police execute a search warrant or later taking the proceeds of fraud and transferring them to another bank." No rational trier of fact could conclude that the later transfers were "in furtherance" of the earlier fraud, and the convictions on those counts were reversed.
