United States v. Banki
2011 U.S. App. LEXIS 26175
| 2d Cir. | 2011Background
- Banki was convicted at trial of conspiring to violate the ITR and operate an unlicensed money-transmitting business, plus counts for ITR violations, unlicensed transmission, and two false statements to OFAC subpoenas.
- From 2006 to 2009 Banki’s family funds, totaling about $3.4 million, were deposited into his Bank of America account via a matching hawala system involving Bakhtiari and Iran-based brokers.
- Deposits were used for personal purchases, including a $2.4 million NYC apartment; many deposits came from dozens of international depositors Banki did not personally know.
- OFAC subpoenas in 2008 sought information on Iran-related transfers; Banki’s responses identified a cousin as the source of funds and stated no payments to Iran since arriving in the U.S.
- The district court denied post-trial Rule 33 motions; Banki was sentenced to 30 months’ imprisonment, below the Guidelines range, and appeals followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether ITR service definition requires a fee | Banki argues service requires a fee under Homa | Banki asserts no fee means no service; ITR should be limited to paid services | No fee required; transfer of funds on behalf of another is a service even if unpaid |
| Whether non-commercial remittance exemption applies to family remittances | Banki contends § 560.516(a)(2) exempts family remittances from the service ban | Government argues remittances must be processed through U.S. depository institutions and may be restricted | Ambiguous regulation; rule of lenity requires favoring Banki; family remittances potentially not prohibited |
| Whether the district court erred in defining money-transmitting business | Banki asked for a ‘business’ definition requiring profit via multiple transactions | Government contends hawala is a business; court’s self-explanatory ‘business’ suffices | Court erred by not instructing that a ‘business’ requires more than a single, isolated transfer |
| Constructive amendment/variance in Counts Four and Five | Banki argues government changed theory of materiality during trial | Banki claims alteration broadened charges beyond indictment | Indictment gave notice of core criminality; no constructive amendment or prejudicial variance |
| Prosecutorial misconduct in rebuttal | Banki challenges rebuttal remarks about uncle’s OFAC history and the 6,000 transaction | Banki asserts improper expansion of theory and prejudice | No abuse of discretion; no substantial prejudice established |
Key Cases Cited
- Homa International Trading Corp. v. United States, 387 F.3d 144 (2d Cir. 2004) (service defined for ITR; fee language discussed)
- United States v. Velastegui, 199 F.3d 590 (2d Cir. 1999) (money transmitting business requires more than a single transaction)
- United States v. Russo, 74 F.3d 1383 (2d Cir. 1996) (defense entitlements to jury instructions; evidence foundation)
- Milstein, 401 F.3d 53 (2d Cir. 2005) (constructive amendments and flexibility of proof in indictments)
- Rigas, 490 F.3d 208 (2d Cir. 2007) (constructive amendment framework and notice requirement)
- Salmonese, 352 F.3d 608 (2d Cir. 2003) (core criminality in indictment and trial proof alignment)
- Danielson, 199 F.3d 666 (2d Cir. 1999) (tethering of indictment scope to proof at trial)
- Abuelhawa v. United States, 556 U.S. 816 (U.S. 2009) (punitive calibration when one side is treated more leniently)
- Parker, 554 F.3d 230 (2d Cir. 2009) (buyer-seller exception considerations in conspiracy)
- Stirone v. United States, 361 U.S. 212 (Supreme Court 1960) (grand jury indictment binding; broad protections)