US v. Elie et. al.

Motion to Dismiss Indictment Count 8

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Count EIGHT of the Superseding Indictment (“Indictment”) purports to charge defendant Chad Elie (along with defendants Scheinberg, Bitar, Beckley, Burtnick, Tate, Lang, Franzen, and Rubin, but not defendants Campos and Tom), with conspiracy to commit bank and wire fraud. It alleges that defendants participated in a conspiracy to deceive United States banks and financial

institutions into processing transactions for three online poker companies by disguising the transactions as unrelated to online poker. Significantly, the Indictment does not charge any substantive wire or bank fraud offense against any defendant, and the purported bank/wire fraud conspiracy charged in Count EIGHT

does not allege that any defendant sought to cause economic injury to any bank or that any bank suffered any actual harm. To the contrary, the Indictment alleges that the defendants made a

concerted effort to avoid “jeopardiz[ing] the relationship with the processor and their banks,” and as a matter of fact, banks profited from the transactions in question. Ind. ¶ 25(e). In addition, the Indictment alleges that certain banks were fully aware that they were processing poker transactions. Id. ¶¶ 28-29.

The theory alleged in Count EIGHT is legally insufficient to charge a cognizable bank or wire fraud conspiracy. Under well-established Second Circuit precedent, an indictment must

allege more than that a bank was deceived into entering into a transaction it would otherwise not have entered into. A “scheme[] that do[es] no more than cause [an alleged victim] to enter into

transactions [it] would otherwise avoid . . . do[es] not violate the mail or wire fraud statutes.” United States v. Shellef, 507 F.3d 82, 108 (2d Cir. 2007). To charge conspiracy to commit wire fraud, an indictment must allege that the defendant

intended through deception, to cause “actual harm,” id. at 107, to a bank. Similarly, to charge conspiracy to commit bank fraud, an indictment must allege that defendants sought to expose a

bank “to actual or potential loss.” United States v. Barrett, 178 F.3d 643, 647-48 (2d Cir. 1999). Count EIGHT fails to allege that defendants conspired to cause actual harm to a bank or to

expose a bank to a loss. Instead, the facts alleged in the Indictment suggest that the defendants intended that banks would profit from processing merchant transactions. Accordingly, Count

EIGHT fails to allege a cognizable conspiracy to commit wire or bank fraud and must be dismissed.

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Published In: Constitutional Law Updates, Criminal Law Updates, Finance & Banking Updates

Reference Info:Legal Memoranda: Motion Addressed to Pleadings | Federal, 2nd Circuit, New York | United States

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Ian Imrich, Law Offices of Ian J. Imrich, APC | Attorney Advertising

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