Defendant-Appellant Boubacar Bah appeals from a judgment of conviction, entered October 5, 2007 after a jury trial in the United States District Court for the Southern District of New York (Kaplan, J.), on one count of operating an unlicensed money transmitting business in New York in violation of 18 U.S.C. § 1960.
There is no doubt that Bah
received
money in New York for transmittal abroad; Bah tried to defend on the ground that the money he received in New York was transmitted from New Jersey, and that he was licensed to operate a money transmitting business in that state. The district court precluded Bah
in limine
from offering evidence of the New Jersey license, reasoning that the federal statute
Bah argues that the district court erred in: [i] refusing to give his requested charge on the scope of Section 1960; [ii] precluding him from offering evidenсe of his New Jersey license; [iii] permitting the government to cross-examine a character witness concerning a five-year-old customer complaint; and [iv] denying him Criminal Justice Act funding to call thirteen witnesses from overseas.
We hold that the district court erred in concluding that Section 1960 incorporates into federal law the feature of New York Banking Law § 650 that prohibits engaging in the business of receiving money for transmission without a license. This error tainted the district court’s jury charge and the presentation of evidence and argument at trial.
We cannot determine from the record whether Bah was convicted for operating an unlicensed money transmitting business, which is prohibited by fedеral law, or for engaging (without a license) in the business of receiving money for transmission, which is prohibited by New York law, but not federal law. Although the government adduced evidence that Bah (who had several legitimate businesses) had transmitted money abroad from a Banco Popular branch in the Bronx, it is not clear beyond a reasonable doubt that a properly instructed jury would have found that the transmittals from New York were part of a money transmitting business, as opposed to one of Bah’s various other enterprises. We therefore vacate Bah’s conviction and remand for a new trial. We go on to consider Bah’s remaining claims in anticipation of a potеntial retrial, and find them to be without merit.
BACKGROUND
In 2003, Drug Enforcement Administration agents learned that heroin traffickers in the Bronx had used a company named B & S Bah Enterprises to transmit suspected drug proceeds. Agents discovered that B & S Bah Enterprises was operated by Bah from an office in a restaurant he owned at 1715 Webster Avenue in the Bronx, New York. When agents arrested Bah on April 21, 2006, he consented to a search of his restaurant in the Bronx and of his home and office in Fort Lee, New Jersey, and he answered the agents’ questions about his businesses.
On February 27, 2007, Bah was charged in a three-count indictment with conspiring to commit money laundering, in violation of 18 U.S.C. § 1956(h); operating an unlicensed money transmitting business, in violation of 18 U.S.C. § 1960; and making false statements at a December 21, 2006 meeting with the government, in violation of 18 U.S.C. § 1001. On the eve of trial, the money laundering count was severed because the government’s key witness had fled to Africa. Trial on the remaining two counts commenced on April 4, 2007, and concluded on April 6, 2007, when the jury convicted Bah on the money-transmitting count and acquitted him on the false-statements count.
The government’s evidence included testimony from four customers who delivered money to Bah in the Bronx for transmission to Guinea or Sierra Leone. The physical evidence consisted mainly of items seized from the office at the back of the restaurant on Webster Avenue: a laptop computer; an electric money counter; “money receipts for [a] money transmission business” (blank and filled out); faxes addressed to Bah requesting “transfers” of United States currency; spreadsheets and ledgers bearing the name B & S Bah Enterprises and the Bronx address, and showing records of money transfers; business cards for B & S Bah Enterprises at the Webster Avenue address, with Bah listed as “President,” and the words “Money Transfer, Import & Export, Shipping”; and a commercial lease application dated July 18, 2002, signed by Bah, for “B & M Bah Money Remittance Corp.,” listing Bah’s “Existing Business Address” as 1715 Webster Avenue in the Bronx, and Bah’s “Years in Business” as “6 years.” '
The government also introduced bank records showing that B & S Bah Enterprises transferred more than $1.2 million through a Banco Popular branch in the Bronx, during the period from January 2002 through August 2002. The account was opened in October 2001 in Bah’s name and listed 1715 Webster Avenue as the company’s address. At the time Bah closed the account, the bank was investigating his account activity beсause of the number of monthly deposits, and because 95 to 97 percent of the deposit proceeds were transferred to foreign accounts.
Other prosecution evidence included a statement from a 2004 civil deposition in which Bah explained the operation of his money transmitting business and his arrangement for transferring money through businesses in Africa; and a letter, dated October 14, 1999, to the then Immigration and Naturalization Service (“INS”), on letterhead of “B & S Bah Enterprises” with the Bronx address, advertising “Import & Export,” “Money Transfer[],” and “Shipping” services. Bah’s letter to the INS explained that the purpose of his business was to arrange the transfer of funds to countries in West Africa.
The government introduced Bah’s admissions to federal agents: that he had looked into obtaining a money transmitting license in New York State, but determined that it was too expensive; 1 that he had money transmitting receipts at his restaurant in the Bronx because he often brought documents from New Jersey to do “accounting work” in New York; and that, of the $50,000 to $60,000 he collected each week, $15,000 to $20,000 was collected in New York.
Bah stipulated at trial that neither he nor B & S Bah Enterprises had ever been licensed by the State of New York for the businesses of receiving money for transmission or transmitting money and that B & S Bah Enterprises had never registered with the United States Treasury as a money transmitting business.
After several years of operating his export/import business, Bah was approached by customers wanting to safely deliver cash to friends and family in Africa. To meet this need, Bah opened a money transmitting business in New Jersey named B & M Bah Enterprises, Inc. 2
Bah did not transfer money directly from the United States to Africa. Rather, he sеt up a system whereby customers in the United States gave him cash, which he used to purchase goods to sell in Africa. Bah then sold those goods to African merchants and used the proceeds to pay money transfer recipients.
Bah did not operate a money transmitting business prior to opening his New Jersey business in 2002; records predating that business concerned the transmission of money overseas for the purpose of purchasing goods for export.
Bah called three character witnesses who testified to his reputation for truthfulness in the community. The witnesses also testified that they had delivered money to Bah in the United States as payment for the delivery of food or goods to Guinea. Bah stopped calling character witnesses after the district court permitted the government to cross-examine a witness regarding an unsigned 2002 letter allegedly written by one of Bah’s customers accusing him of fraud and theft.
Sentencing. At sentencing, it was determined that Bah had an offense level of four and a Criminal History Category of one, resulting in a United States Sentencing Guidelines (“Guidelines”) range of 0-6 months’ incarceration. The district court adopted the Probation Department’s recommendation and sentenced Bah to a term of one year’s probation and a $1,000 fine. The district court explained that no greater sentence was necessаry because the crime of conviction was a strict liability offense, and it appeared that Bah was attempting to follow the law while supporting himself and serving a legitimate need in his community. The district court declined to resolve outstanding Guidelines calculation issues because it considered that the sentence it was imposing was sufficient to satisfy the factors set forth in 18 U.S.C. § 3553. Neither party challenges the sentence imposed by the district court. It is unclear whether Bah has served his sentence; but the ramifications of his conviction under the immigration laws may be significant.
DISCUSSION
I
A. Scope of 18 U.S.C. § 1960
Bah was convicted under 18 U.S.C. § 1960, which provides (in relevant part):
(a) Whoever knowingly conducts, controls, manages, supervises, directs, or owns all or part of an unlicensed money transmitting business, shall be fined inaccordance with this title or imprisoned not more than 5 years, or both.
18 U.S.C. § 1960(a). “[T]he term ‘money transmitting’ includes transferring funds on behalf of the public by any and all means including but not limited to transfers within this country or to locations abroad by wire, check, draft, facsimile, or courier.” Id. § 1960(b)(2). An “unlicensed money transmitting business” includes “a money transmitting business which affects interstate or foreign commerce in any manner or degree and ... is operated without an appropriate money transmitting license in a State where such operation is punishable as a misdemeanor or a felony under State law.” 3 Id. § 1960(b)(1)(A).
New York Banking Law § 650 is one such licensing statute. 4 Subsection (2)(a)(l) establishes licensing requirements for two distinct activities: “[i] engaging] in the business of receiving money for transmission or [ii] transmitting the same.” Only the latter licensing requirement, however, is incorporated into federal law: Section 1960 explicitly defines “money transmitting” as “transferring funds on behalf of the public by any and all means.” 18 U.S.C. § 1960(b)(2); see also S.Rep. No. 101-460, at 36 (1990), reprinted in 1990 U.S.C.C.A.N. 6645, 6681 (“ ‘Money transmitting’ means transferring funds on behalf of the public.”). The federal statute does not mention the receipt of money for transmission.
It is not surprising that the New York statutory prohibition is broader than the federal. Section 1960 “was enacted in order to combat the growing use of money transmitting businesses to transfer large amounts of the monetary proceeds of unlawful enterprises.”
United States v. Velastegui,
The New York statute reflects that state’s broader interest in licensing and regulating financial institutions.
See, e.g.,
N.Y. Banking Law § 642(1) (requiring Superintendent of Banks to assess the “financial condition and responsibility, financial and business experience, character and general fitness” of a prospective money transmission licensee and to determine whether “the applicant’s business will be conducted honestly, fairly, equitably, earefully[,] efficiently ..., and in a manner commanding the confidence and trust of the community”). New York also stands
B. Bah’s Requested Jury Instruction
We review
de novo
a district court’s refusal to issue a requested jury instruction.
United States v. Desinor,
Pre-trial, the district court observed that New York Banking Law § 650 “mаkes it unlawful to ‘engage[] in the business of receiving money for transmission,’ ” and ruled that there would be a violation of federal law “if defendant’s activities in New York amounted to engaging in th[at] business.”
United States v. Bah,
No. 06-cr-243(LAK),
At the conclusion of trial, Bah requested the following jury instruction on the scope of Section 1960:
1960 does not make it unlawful to receive money for transmission without a license. It makes it unlawful to engage in the business of receiving money for transmission. There was a violation of the statute only if defendant’s activities amount[ed] to engaging in the business of receiving money for transmission, not if his activities constituted merely receiving money for transmission.
The government objected to this instruction on the ground that it made insufficiently clear that Bah could be convicted if he engaged in the business of receiving money for transmission. The district court agreed: the problem was the final clause, which stated that there was no violation of the statute “if his activities constituted merely receiving money for transmission.” The court found this clause potentially misleading, because “merely receiving money for transmission” could violate the statute if the receipt was sufficiеntly frequent and the volume sufficiently great to constitute a business.
Bah argued that no matter how often he received money in New York, any activity there was ancillary to his licensed New Jersey business and not unlawful, “especially because no money was ever transmitted in New York.” Before the charging conference ended, Bah sought an instruction consisting of one sentence: “1960 does not make it unlawful to receive money for transmission without a license.” The government objected on the same ground as before, and the district court rejected this formulation as well. Bah’s first requested charge would have done him little good, and we express no view on the denial of thаt request; the second requested charge went to the heart of the matter, and the denial of that request was error. 5
Bah’s requested charge constituted an accurate statement of the law: while New York law prohibits engaging in the unlicensed business of receiving money for transmission, federal law does not. Even viewing the district court’s charge as a whole, we conclude that the jury was likely misled as to the scope of Section 1960 in the absence of Bah’s requested language.
At oral argument on appeal, the government explained resourcefully [i] that Section 1960 prohibits “conduct[ing], controlling], manag[ing], supervising], directing], or owning] all or part of an unlicensed money transmitting business,” 18 U.S.C. § 1960(a) (emphasis added), аnd [ii] that receiving money is “part” of conducting a money transmitting business. However, even accepting the government’s analysis, the receipt of money would be prohibited only if it is incident to “an unlicensed money transmitting business.” Thus, it would be a defense to the federal charge (not a basis for conviction) that Bah received money in New York (in violation of the New York licensing laws) and transmitted the money via his licensed business in New Jersey. 6
C. Harmless Error Analysis
“An erroneous instruction, unless harmless, requires a new trial.”
Anderson v. Branen,
Under the jury charge as given, Bah’s defense at trial — that he received money in Nеw York for transmission in New Jersey — amounted to a concession of guilt. Bah was entitled to an unqualified instruction that the receipt of money in New York for transmission from New Jersey was no violation of federal law. The proviso (emphasized in the charge) that Bah must have been engaged “in the business” of receiving money for transmission did not repair the omission.
The prejudice was exacerbated by the emphasis placed by the government on particular evidence. For example, the government made much of the fact that $15,000 to $20,000 of the $50,000 to $60,000 Bah received weekly was collected in New York. But under Section 1960 it should not matter how much money Bah received in New York, unless he transmitted it in violation of New York law. Similarly, the government highlighted a stack of blank receipts found in the Bronx restaurant. But because the receipts were not evidence of transmission, they would not be decisive to a properly instructed jury.
The government argues in its brief that its “most direct[]” evidence consisted of “the essentially uncontradicted testimony of four of Bah’s customers” who droppеd off money in the Bronx that was later transferred to But those witnesses did not testify as to how — or from where — the money was transmitted. The fact that the witnesses dropped off money that later arrived in Africa is not inconsistent with Bah’s defense that he received money in New York for transmission from New Jersey. The existence of the New Jersey license thus makes this an unusual case. 7
Much of the government’s remaining evidence was not probative as to Bah’s operation of an unlicensed money transmitting business in New York during the indictment For example, the government introduced bank correspondence, receipts, and business records that the time of the alleged violation of Seсtion 1960. The government also introduced numerous records of money transfers from New Jersey, which were executed lawfully pursuant to Bah’s New Jersey license. Bah could not properly have been convicted based on this evidence.
To prove a violation of Section 1960, the government was required to come forward with evidence that Bah was in the business of transmitting money from New York during the period charged in the indictment: January 1, 2002, up to and including August 21, 2006. The government introduced two kinds of evidence that would show such a violation: bank records showing that (from January 2002 through August 2002) B & S Bah Enterprises transferred more than $1.2 million through a Banco Popular branch in the Bronx; and spreadsheеts and charts (from March 2002 through August 2002) bearing the address of the Bronx restaurant, with columns on senders’ and recipients’ names, a column headed “refunds,” a column with codes for recipients in Africa, and lists of sums in United States dollars with names and con
However, Bah rebutted this evidence. He testified that the transfers from Banco Popular were to facilitate the sale of goods such as televisions, food, and oil, and that the Banco Popular account was never used to send cash to overseas recipients. With respect to the spreadsheets, Bah testified that he listed transactions by dollar amount — instead of by the quantity of good to be delivered — to account for fluctuations in currency exchange rates, so that overseas recipients would receive goods equal to the dollar value paid by United States customers.
There is reason to think that the jury found Bah’s testimony credible: Bah was acquitted on the count that charged him with lying to government agents when he told them [i] that he never remitted money through his New York business and [ii] that he first began operating a money transmitting business in the summer of 2002. Bah contested this charge by testifying that his New York business only engaged in thе import and export of goods. His acquittal suggests that the jury believed his testimony.
In order for the jury to have acquitted as to false statements while convicting as to money transmission, it seems more than likely that its verdict on money transmission rested on something other than Bah transmitting money from New York. That something, under the district court’s charge, would have been Bah’s receipt of money in New York for transmission from New Jersey. In short, given the jury’s verdict, we cannot conclude beyond a reasonable doubt that a properly instructed jury would have found Bah guilty.
“Where an instruction defining one of two alternative grounds is legally erroneous, a court must reverse unless it can determine with absolute cеrtainty that the jury based its verdict on the ground on which it was correctly instructed.”
United States v. Joseph,
The jury charge allowed Bah to be convicted for lawful activity incident to his New Jersey business. Because we are nоt “absolutely] certain[ ]” that the jury found Bah guilty for the appropriate reason, Bah is entitled to a new trial.
II
Bah challenges the grant of the government’s motion
in limine
to preclude evidence that he was licensed to conduct a money transmitting business in New Jersey. “We review a district court’s evidentiary rulings for abuse of discretion, and will reverse only if we find that there was a violation of a substantial right.”
United States v. Ebbers,
The district court precluded the introduction of evidence of Bah’s New Jersey license after concluding that Section 1960 and New York Banking Law § 650 both impose strict liability on the operator of an unlicensed money transmitting business,
The district court did not abuse its discretion in ruling, before trial, that Bah could not offer evidence of his New Jersey license. If the presentation of evidence had been limited to Bah’s money transmitting activities in New York, evidence of Bah’s New Jersey license would not have supported a viable defense. 8
We do not hold, however, that the district court would have erred had it denied the government’s motion. The district court’s evidentiary ruling responded to arguments premised on each party’s theory of how to try the case, which were in turn influenced by the district court’s expressed view of what the government had to prove. This opinion alters the case, and re-conceives the nature of the offense the government can prosecute. The court may wish to reconsider its ruling if the government elects to conduct a second trial.
Ill
Bah contends that the district court improperly permitted the government to cross-examine one of his character witnesses about a letter from a former customer accusing him of fraud.
Federal Rule of Evidence 404(a)(1) permits a defendant to offer character evidence. If a defendant chooses to introduce such evidence, the government may question the defendant’s witnesses regarding “relevant specific instances of conduct.” Fed.R.Evid. 405(a). “We review the district court’s decision to allow the questioning] for abuse of discretion, bearing in mind that once a defendant offers character testimony, the prosecution is afforded substantial latitude to rebut such evidence.”
United States v. Reich,
' Bah called three character witnesses. One of them, Amadou Diallo, testified that Bah had a reputation for truthfulness in the community, and cited an instance in which Bah helped resolve a situation between Diallo and Bah’s brother. On cross-examination, the district court permitted the government — over Bah’s objection — to question Diallo about a letter in which a former customer accused Bah of fraud. Diallo testified that he was unaware of the accusation and that it did not impact his view of Bah or his reputation in the community.
Bah cites the Eighth Circuit’s decision in
United States v. Monteleone,
Monteleone,
of course, is not binding in our circuit, but even if it were, this case is distinguishable for three reasons. First, the evidence presented on cross-examination did not derive from a secret proceeding; to the contrary, the author of the letter expressed a desire that Bah’s actions be widely publicized to other customers and the Better Business Bureau. Second, the challenged evidence did not involve criminal conduct, but dishonesty in Bah’s business dealings — -information closely related to the subject of Diallo’s direct testimony, and far less inflammatory (and potentially prejudicial) than the evidence at issue in
Monteleone.
Third, we have previously observed that the Eighth Circuit has limited
Monteleone
to cases involving reputation evidence and that it has been more permissive in admitting evidence to impeach opinion testimony.
See Reich,
In light of the “substantial latitude” afforded the government to rebut character witness testimony offered by the defense, the district court did not abuse its discretion in permitting the government to question Diallo about the complaint against Bah.
IV
Bah’s final challenge is to the district court’s denial of funds to fly thirteen defense witnesses from overseas to testify at trial, and to fly Bah’s counsel overseas to depose three witnesses. Bah argues,
inter alia,
that: [i] he was denied his Due Process right to present a complete defense,
see California v. Trombetta,
A district court may authorize the expenditure of funds exceeding $500 under the CJA only when “necessary for adequate rеpresentation.” 18 U.S.C. § 3006A(e)(l)-(2);
see also United States v. Durant,
The decision to grant or deny funding under these rules is committed to the discretion of the district court.
See United States v. Salameh,
Bah failed to establish that the witnesses were necessary fоr his defense. The testimony Bah wished to elicit would, at best, have established that the particular witnesses called from overseas did not work with Bah in a money transmitting business prior to the date (September 23, 2002) that Bah registered his New Jersey business with the federal government. Such evidence would not have dissuaded a jury from finding that Bah operated an unlawful business in that time with other people. Further, the evidence lacked probative value with respect to Bah’s activities after September 23, 2002.
Bah’s request also lacked specificity as to: whether the witnesses had agreed to fly to this country, whether they could obtain visas, what countries they would be flying from, why the testimony of all thirteen witnеsses was necessary, or what their dealings with Bah were. Similarly, Bah provided no estimate of expense.
See United States v. Knox,
CONCLUSION
Because the district court erred in refusing to give Bah’s requested charge on the scope of Section 1960, Bah’s conviction is vacated, and the case is remanded for a new trial.
Notes
. Bah. testified at trial that he would have needed $500,000 cash to obtain a license in New York because of bond requirements.
. Although Bah was not permitted to introduce evidence of his New Jersey money transmitting license at trial, it is undisputed that Bah obtained such a license on or about June 13, 2002, and that he registered his New Jersey business with the federal government on or about September 23, 2002.
. The other kind of unlicensed money transmitting business relevant under Section 1960 is one that "fails to comply with the money transmitting business registration requirements under section 5330 of title 31, United States Code.” 18 U.S.C. § 1960(b)(1)(B).
. New York Banking Law § 650 provides that "[a]ny person who ... engages in the business of receiving money for transmission or transmitting the same ... without a license therefor obtained from the superintendent as provided in this article, shall be guilty of a Class A misdemeanor.” N.Y. Banking Law § 650(2)(a). Nеw York Banking Law § 650(2)(b) provides increased penalties for offenses involving the transfer of $10,000 or more in a single transaction, a total of $25,000 or more during a period of thirty days or less, or a total of $250,000 or more during a period of one year or less. The New York Banking Law "makes the operation of an unlicensed money transmitting business either a misdemeanor or a felony, which in turn subjects the offender to federal criminal penalties under 18 U.S.C. § 1960.”
United States v. Velastegui,
. Bah’s initial request suffered from the same infirmity as the instruction given by the district court: it would have permitted the jury to convict if Bah was in the business of receiving money for transmission. To the extent that Bah's initial request inaccurately
. An issue was raised at oral argument as to whether Bah receiving money in New York and transporting it to New Jersey would itself constitute unlawful transmission, because the statute prohibits unlicensed "transfers within this country.” 18 U.S.C. § 1960(b)(2). So long as Bah (or his agents) maintained possession of any payments, the movement оf the money across state lines would not itself violate the statute, because Section 1960 prohibits the "transfer” of money, not the transportation of money by an individual.
. Ordinarily, evidence that customers delivered money for transmission overseas, and that the money was in fact transmitted overseas, would be powerful evidence in a prosecution under Section 1960. But this was not an ordinary Section 1960 prosecution. No circuit court has addressed a case in which a defendant who operated a licensed, registered money transmitting business was charged with operating an unlicensed business in a neighboring state. Two cases from our Court are instructive as to the types of cases that are typically brought under the statute. In
Velastegui,
we anаlyzed New York law and held that the "agent of a licensee who
transmits money directly
to a foreign country ... is operating a money transmitting business without a license as prohibited by section 1960.”
. Having prevailed on its
in limine
motion to preclude Bah from introducing evidence of his New Jersey license, the government introduced reams of bank records from New Jersey showing money transfers related to Bah's New Jersey business. By introducing this evidence, the government arguably opened the door to Bah introducing evidence of his New Jersey license, but this argument was not raised at trial or on appeal.
Cf. United States v. Stewart,