Money Dealings Ruled Not Illegal Laundering

In its second such decision in a month, the U.S. 9th Circuit Court of Appeals ruled Monday that it is not necessarily illegal to launder cash from drug dealing or other illicit sources by keeping bank transactions under $10,000, the amount at which banks must report to the Internal Revenue Service.

Money laundering itself, the court said as it reversed charges against five members of a ring arrested nearly two years ago, “is not a crime, and the mere fact that a person launders monies derived from narcotics activities does not make the launderer part of the conspiracy to violate the narcotics laws.”

Sufficient Link

The government, the court concluded, “must show a ‘sufficient link’ between a defendant’s money laundering and the underlying drug transaction to demonstrate that defendant was a member of the conspiracy.”

The court allowed to stand, however, two related charges--including one of drug dealing--against alleged ringleader Gustavo Ricardo Ronderos.

In dropping all charges against Antoinette Espriella, her son Alberto Espriella, Margaret Caro and Pablo Chapoy, the judges cited their Jan. 10 ruling overturning the convictions of Phoenix attorneys Duane N. Varbel and Roy Osborn along with two other men on the same grounds.

The latter four had been convicted of helping undercover federal agents, who posed as cocaine dealers, launder money by funneling it through a corporation set up in the Cayman Islands.

Conditional Pleas

In Monday’s case, the Espriellas, Caro and Chapoy had--pending their appeals that no crime had been committed--entered conditional guilty pleas in Los Angeles federal court to charges of conspiracy to violate currency reporting laws and fraudulent concealment of facts from the Internal Revenue Service.

They reportedly acted as runners for Ronderos, going from bank to bank to convert cash to cashier’s checks or to send wire transfers--each for less than $10,000. The higher court agreed they had not committed a crime and reversed their convictions.

In the case of Ronderos, “the apparent kingpin,” the court reversed the money laundering convictions but upheld his conviction on conspiracy to aid and abet the possession and distribution of cocaine, to which he had entered a conditional guilty plea.

Conviction Sustained

It also sustained his conviction by the federal district court on one count of operating a currency exchange business that failed to file currency transaction reports on the greater amounts of cash he handled.

Ten people originally were charged, but one was acquitted, two chose not to appeal their convictions and two are fugitives.

Assistant U.S. Atty. Brian A. Sun declined to comment on the circuit court decision, saying only, “I’m calling Washington now.”