United States v. Hayes

800 F. Supp. 1575, 1992 U.S. Dist. LEXIS 14285, 1992 WL 236186
CourtDistrict Court, S.D. Ohio
DecidedJuly 23, 1992
DocketNo. CR-1-90-92
StatusPublished
Cited by1 cases

This text of 800 F. Supp. 1575 (United States v. Hayes) is published on Counsel Stack Legal Research, covering District Court, S.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Hayes, 800 F. Supp. 1575, 1992 U.S. Dist. LEXIS 14285, 1992 WL 236186 (S.D. Ohio 1992).

Opinion

ORDER GRANTING IN PART AND DENYING IN PART THE DEFENDANT’S MOTION TO VACATE HIS SENTENCE

SPIEGEL, District Judge.

This matter is before the Court for consideration of the defendant’s motion to vacate his sentence (doc. 20). The government opposes the motion (doc. 22), and the defendant replied (doc. 24). For the rea[1577]*1577sons set forth below, the defendant’s motion to vacate his sentence must be granted in part and denied in part.

BACKGROUND

Between October, 1988 and July 17,1990, Dennis Hayes illegally copied the memory programs for Apple Computers onto blank computer chips in the basement of his home. He then retained a local lithographing firm to copy the Apple logo onto his chips. He sold the chips internationally using computer bulletin boards, the mails, parcel post, and interstate and foreign banking wires to advertise, make deliveries and receive proceeds.

Mr. Hayes’ computer chip sales proved to be very profitable. He purchased an airplane, a new car, and opened a Swiss bank account. Over $100,000 in United States currency was recovered from his residence.

On September 10, 1990, the United States Attorney filed a bill of information charging Dennis Hayes with one count of money laundering in violation of 18 U.S.C. § 1956(a)(1)(A), one count of copyright infringement in violation of 17 U.S.C. § 506(a) and 18 U.S.C. § 2319(b)(3), and one count of structuring financial transactions in order to avoid reporting to the Treasury Department in violation of 31 U.S.C. § 5324 and 31 U.S.C. § 5322(a). Mr. Hayes entered into a plea agreement with the government, and on September 13, 1990, Dennis Hayes pled guilty to each charge in the bill of information. Mr. Hayes was represented by privately retained counsel during the plea negotiations and in entering his guilty plea.

Pursuant to the United States sentencing guidelines, Mr. Hayes was sentenced to a five year prison term on the money laundering charge, a one year prison term on the copyright infringement charge, and a five year prison term on the charge of illegally structuring financial transactions. The terms run concurrently.

Mr. Hayes now moves to vacate his sentence. He claims the Court lacked jurisdiction to enter sentence on the money laundering charge and that he received ineffective assistance of counsel in violation of the Sixth Amendment to the United States Constitution.

MONEY LAUNDERING

Count I of the bill of information charged:

That from in or about October 1988, up to and including July 17, 1990, in the Southern District of Ohio, DENNIS W. HAYES, did knowingly, willfully and with the intent to engage in conduct constituting a violation of Section 7201 of the Internal Revenue Code, conduct and cause to be conducted, financial transactions affecting interstate commerce, knowing said financial transactions were conducted with property, to wit: United States Currency and checks that were the proceeds of specific unlawful activity, that being the infringement of a copyright, in violation of 18 U.S.C. § 2319; In violation of 18 U.S.C. § 1956(a)(1)(A).

Doc. 1 at 1 (emphasis in original).

Title 18, section 1956(a)(1)(A) of the United States Code provides:

Whoever, knowing that the property involved in a financial transaction represents the proceeds of some form of unlawful activity, conducts or attempts to conduct such a financial transaction which in fact involves the proceeds of specified unlawful activity— ... (ii) with intent to engage in conduct constituting a violation of section 7201 or 7206 of the Internal Revenue Code of 1986
shall be sentenced to a fine of not more than $500,000 or twice the value of the property involved in the transaction, whichever is greater, or imprisonment for not more than twenty years, or both.

18 U.S.C.A. § 1956(a)(1)(A) (1992 supp.). As used in § 1956, the words “knowing that the property involved in a financial transaction represents the proceeds of some form of unlawful activity” requires that “the person knew the property involved in the transaction represented proceeds from some form, though not necessarily which form, of activity that constitutes a felony under State, Federal, or [1578]*1578foreign law____” 18 U.S.C.A. § 1956(c)(1) (1992 supp.) (emphasis added). Therefore, to constitute money laundering in violation of 18 U.S.C. § 1956(a)(1)(A), the money in question must be proceeds of felonious activity. 18 U.S.C. § 1956(c); see also U.S. v. Sutera, 933 F.2d 641, 646 (8th Cir.1991).

According to the bill of information in this case, the money Mr. Hayes allegedly laundered represents proceeds of a copyright infringement. For the sort of copyright infringement charged in this case, Mr. Hayes could be fined no more than $25,000 or “imprisoned for not more than one year, or both____” 18 U.S.C.A. § 2319(b)(3) (1992 supp.). Therefore, the copyright infringement from which the proceeds resulted is a Class A misdemeanor. 18 U.S.C. § 3559(a)(6). It is not a felony. Accordingly, the requirements of 18 U.S.C. § 1956(a)(1)(A) have not been satisfied, and this Court is without jurisdiction to impose sentence on the money laundering charge.

The government contends that the money in question actually represents the proceeds of mail fraud, wire fraud and concealment of assets as well as copyright infringement. According to the government, the United States Attorney elected not to charge Mr. Hayes with such felonious activity as a result of extensive plea negotiations. However, such allegations are irrelevant to the determination at hand.

Even if the government’s allegations are true, a defendant is still entitled to a trial before sentence is imposed. In the case at bar, Mr. Hayes was never charged with wire fraud, mail fraud or concealment of assets nor was it alleged that the money underlying the money laundering charge represented proceeds of such felonious activity. Instead, the bill of information specifically charged that the money in question represented the proceeds of a copyright infringement in violation of 18 U.S.C. § 2319. Mr. Hayes pled guilty only to those allegations contained in the three-count bill of information.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
800 F. Supp. 1575, 1992 U.S. Dist. LEXIS 14285, 1992 WL 236186, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-hayes-ohsd-1992.