Deliberations Start in Money-Laundering Trial

A federal jury in Los Angeles began deliberations Friday in the second trial of Nelson Hallidy, a former Orange County banker accused of failing to comply with federal bank-reporting rules as part of an alleged money-laundering scheme with W. Patrick Moriarty.

The seven-man, five-woman panel went home for the weekend after failing to reach a verdict in nearly three hours of deliberations during the afternoon. Final arguments in the weeklong trial were completed in the morning.

Before going home, the jurors asked to hear portions of Hallidy’s testimony read back to them. U.S. District Judge Edward Rafeedie, who has presided over the case, said the testimony would be read to them Monday before the jury resumes deliberations.

A federal grand jury indicted Hallidy on a charge that he conspired with Moriarty, an Orange County fireworks manufacturer, to launder more than $317,000 through the now-defunct Bank of Irvine in 1980-81. He also was accused in the indictment of failing to report cash transactions to the Internal Revenue Service as required by law.

Hallidy was acquitted of the conspiracy charge in a trial last month, but the jury in that case deadlocked on the charges of alleged failure to report bank transactions of $10,000 or more and cash transactions exceeding $100,000 in any one-year period.

He is being tried again on those allegations.

Moriarty allegedly funneled the laundered money to political figures to secure passage of a state law prohibiting cities from outlawing so-called safe-and-sane fireworks. He pleaded guilty in March to seven counts of fraud in a plea-bargain arrangement and agreed to testify against politicians to whom he had given money. The measure eventually was vetoed by then-Gov. Edmund G. Brown Jr.

In final arguments, federal prosecutors contended that as the bank’s No. 2 executive, Hallidy knew about the federal reporting rules and willfully caused the bank not to file the required reports.

Hallidy’s reason for doing this, argued Chief Assistant U.S. Atty. Richard E. Drooyan, was that he wanted to become the bank’s president when the post became vacant in 1982. Moriarty was a founding director of the bank and could influence the directors’ selection.

Hallidy, however, was passed over for the post and left the bank in June, 1983.

Defense attorney Byron McMillan argued that the bank’s operations staff, not Hallidy, was responsible for making the required reports. ‘They just didn’t do their job,’ he said.