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ANDRÉ BIROTTE JR. United States Attorney ROBERT E. DUGDALE Assistant United States Attorney Chief, Criminal Division JONATHAN E. LOPEZ (SBN 210513) Deputy Chief, Asset Forfeiture and Money Laundering Section Criminal Division United States Dept. of Justice 1400 New York Ave, N.W. Bond Building, Room 2200 Washington, D.C. 20005 Telephone: (202) 307-0846 Facsimile: (202) 616-2547 Email: jonathan.lopez@usdoj.gov Attorneys for Plaintiff UNITED STATES OF AMERICA UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION ) ) Plaintiff, ) ) v. ) ) JUTHAMAS SIRIWAN, ) aka “the Governor,” and ) JITTISOPA SIRIWAN, ) aka “Jib,” ) ) Defendants. ) ) ______________________________) UNITED STATES OF AMERICA, CR No. 09-81-GW GOVERNMENT'S RESPONSE TO DEFENDANTS’ JANUARY 11, 2013 SUPPLEMENTAL BRIEF Hearing Date: Hearing Time: February 21, 2013 8:30 a.m.

Plaintiff United States of America, through its counsel of record, hereby submits its response to Defendants’ January 11, 2013 Supplemental Brief (“January 11 Filing”). The government’s

response is based upon the attached memorandum of points and authorities, the files and records in this matter, including, the government’s Response in Opposition to Defendants’ Motion to Dismiss the Indictment (DE 67), the government’s subsequent

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filings, as well as any evidence or argument presented at any hearing in this matter. DATED: February 1, 2013 Respectfully submitted, ANDRÉ BIROTTE JR. United States Attorney ROBERT E. DUGDALE Assistant United States Attorney Chief, Criminal Division JAIKUMAR RAMASWAMY Chief, Asset Forfeiture and Money Laundering Section Criminal Division United States Dept. of Justice /s/ JONATHAN E. LOPEZ Deputy Chief, Asset Forfeiture and Money Laundering Section Criminal Division United States Dept. of Justice Attorneys for Plaintiff UNITED STATES OF AMERICA

ii

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MEMORANDUM OF POINTS AND AUTHORITIES Defendants’ January 11 Filing simply rehashes many of the same arguments made in defendants’ previous filings with the Court. Specifically, the January 11 Filing reasserts the

following three arguments: (1) the indictment fails to sufficiently allege a money laundering offense because there is no allegation of a separate crime; (2) the government has inadequately shown promotion money laundering and principles of lenity should control; and (3) the indictment is in conflict with Thai and international law. Given that defendants’ instant

filing consists mainly of arguments to which the government has already responded, the government will limit this response to addressing the new twists on old arguments presented in the January 11 Filing, while referring the Court to the government’s previous filings in which the government has refuted the same or very similar arguments. A. Money Laundering As A Separate Offense

Defendants persist in their effort to convince this Court that the government has failed to allege an independent money laundering offense and that the charges set forth in the indictment are tantamount to violations of the Foreign Corrupt Practices Act. In support of their position, defendants

incorrectly state that “in both instances [i.e., United States v. Castle, 925 F.2d 831 (5th Cir. 1991) (per curiam) and this case], the essence of the charge is an alleged unlawful receipt of a bribe by a foreign official.”1 This latest attempt to recast the

DE 106 at 3. -1-

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money laundering charges in this case as violations of the Foreign Corrupt Practices Act (“FCPA”) mischaracterizes both statutes, since the receipt of a bribe is the essence of neither an FCPA violation nor an international promotion money laundering violation.2 Rather, the essence of the charges set forth in the

indictment is the criminal misuse of the financial system to promote two separate unlawful activities: the Green’s FCPA violations and the violations of Thai law alleged as predicates to the money laundering charges. Defendants’ reliance on United States v. Castle, 925 F.8d 831 (5th Cir. 1991), as support for their position is unavailing. As briefed previously (citations referenced below), Castle’s holding is quite narrow and limited specifically to the FCPA; it simply does not apply to each and every crime involving a foreign official that touches in any way upon bribery. Put another way,

the Castle opinion’s ruling on how a conspiracy charge applies to the FCPA does not – and cannot – provide foreign officials with a

Both violations are separate offenses, with separate elements, and are aimed at separate conduct. This is evidenced by the Green indictment in which the Greens were charged, in separate and distinct counts, with FCPA violations as well as the same money laundering violations charged in the instant indictment. Even viewing defendants’ assertions in the most positive light, the money laundering charges are appropriate as the wire transfers at issue in this indictment represent a separate and distinct step in the process. The FCPA violations were completed even before the payments made from the Thai Tourism Authority to the Greens. The wire transfers charged in the indictment, that is, the transfers made from the Green’s bank accounts in the United States to defendants’ overseas bank accounts in multiple countries, constitute a separate money laundering charge. See United States v. Sayakhom, 186 F.3d 928, 941-43 (9th Cir. 1999)(transaction involving proceeds of earlier phase of the fraud scheme can constitute money laundering even though the transaction constitutes yet a further step in the overall scheme). -2-

2

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complete “pass” from criminal prosecution for all other crimes in which the foreign official can claim that bribery was somehow involved. The government’s previous filings (citations referenced below) point to several examples in which foreign officials have been charged with money laundering even though bribery was a part of the overarching scheme. Such examples include United States

Duperval, Cr. 09-21010-SDFL (2012), a case very similar to the instant case in that foreign officials were charged with money laundering offenses that alleged the FCPA as the specified unlawful activity. Defendants attempt to distinguish Duperval by

asserting that the underlying transactions involved “criminally derived property” and not the actual receipt of the bribes.3 Defendants misstate the facts by not acknowledging the salient and obvious point that the “criminally derived property” in Duperval was, in fact, the bribe money the defendants (who were foreign officials) had received as a result of FCPA violations.4 Defendants’ arguments in this area are simply repackaged versions of prior arguments. The government refers the Court to

the following portions of its filings for a fuller discussion of these issues: DE 106 at 2, fn. 2. Defendants also attempt to distinguish Duperval based on the extent of Duperval’s actions in the United States. Id. This line of argument bears no support in case law. See United States v. Moreland, 622 F.3d 1147, 1166-67 (9th Cir. 2010)(defendant liable for transfers because he was “behind” the wires and “controlled” the accounts receiving the money); United States v. Kuok,672 F.3d 931, 938 (9th Cir. 2012)(finding sufficient conduct in the United States even though conduct committed by undercover agent at defendants’ direction).
4 3

Duperval, DE 685 (Second Superseding Indictment) at 28, ¶4. -3-

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DE 67

Pg. 7-16 (The indictment properly charges money laundering offenses separate from FCPA offenses) Pg. 22-30 (The specified unlawful activities are appropriately charged)

• •

DE 80 DE 96

Pg. 1-3 (The money laundering charge is a separate and complete offense) Pg. 2-10 (Congressional intent with regard to the FCPA and the prosecution of foreign officials for non-FCPA crimes) Intent to Promote and Lenity

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B.

In an effort to continue their attempt to portray the charges in the indictment as novel and ambiguous, defendants refer to the “intent to promote” prong of international promotion money laundering as a “malleable phrase” and accuse the government of pursuing a “tortured application” of the statute.5 As set forth in previous filings (citations referenced below) there is a long line of cases, particularly in the Ninth Circuit, interpreting and defining the phrase “intent to promote” in § 1956. The charges set forth in the indictment are

straightforward and closely follow the contours of the ample case law on point. Defendants’ citation to the Supreme Court case, Abuelhawa v. United States, 556 U.S. 816 (2009), is inapplicable to this discussion. In Abuelhawa, the Supreme Court interpreted the

meaning of the word “facilitating” as used in an entirely different statute6 and found that the government’s interpretation

DE 106 at 4.

21 U.S.C. § 843(b)(use of a communication device to facilitate a Title 21 offense). -4-

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had pushed the use of the term to its outer limits.7

The

analysis in Abuelhawa has simply no bearing on how a court should interpret and apply the phrase “intent to promote” in the money laundering statute that forms the basis for the charges in this case. The phrase “intent to promote,” as previously noted, is

the subject of extensive case law that clearly outlines its contours. Moreover, many of the cases interpreting the phrase

“intent to promote” postdate Abuelhawa.8 Given the extensive law on both § 1956(A)(2)(A) and the exterritorial application of § 1956(A)(2)(A) pursuant to § 1956(f), defendants’ lenity claims, which the government has addressed in previous filings, are similarly unavailing. The

government refers the Court to the following portions of its filings for a fuller discussion of these issues: • DE 67 Pg. 17-22 (The promotion aspect of 18 U.S.C. § 1956(a)(2)(A) and rule of lenity) Pg. 31-35 (History and application of § 1956(f) extraterritorial jurisdiction) • DE 84 C. Pg. 1-9 (Discussion of intent to promote) Thai Interests and International Law 1. Thai Interests

Throughout the course of their filings, defendants have tried again and again to invent and interject into this case a
7

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8

556 U.S. at 820.

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See United States v. Moreland, 622 F.3d 1147, 1167 (9th Cir. 2010)(intent to promote includes the transfer of funds outside the United States to carry out the underlying fraud); United States v. Robinson-Gordon, 418 Fed.Appx. 173 (4th Cir. 2011)(intent to promote can be shown when monies from unlawful scheme are used to keep the scheme going, even if the payments are part of the underlying scheme). -5-

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conflict with Thailand that, in fact, does not exist. Specifically, in the January 11 Filing, defendants claim that Thailand’s postponement of the United States’ extradition request “suggest[s] the Thai government feels that extradition and prosecution [in this case] ‘may affect the international relation.’”9 In doing so, defendants take blatantly out of

context a portion of the November 9 Letter and ask the Court to make inferences having no basis in fact. states: “[i]f the Central Authority considers that the request may affect the international relation....the Central Authority shall notify the Requesting State or Ministry of Foreign Affairs, as the case may be, for further proceedings.”10 Thailand has not made any such notification to the United States The November 9 Letter

13 nor has it otherwise signaled that international relations 14 between Thailand and the United States may be impaired by the 15 government’s prosecution. 16 “feelings” of the Thai government concerning this prosecution are 17 completely speculative and entirely inappropriate. 18 Defendants also reiterate their belief that the reference in 19 the November 9 Letter to the double jeopardy provisions of the 20 extradition treaty constitutes evidence that “Thailand views the 21 United States’ crimes as the same as the charges Thailand is 22 investigating.”11 23 24 25 26 27 28
11 9

Defendants’ attempts to express the

Once again, defendants are inappropriately

DE 106 at 3 (emphasis added), citing and quoting the November 9, 2012 Letter from Thailand to the United States indicating Thailand’s intention to postpone review of the United States’ extradition request (the “November 9 Letter”).
10

DE 105, Ex. A (emphasis added). DE 106 at 3 (emphasis added). -6-

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asserting self-serving and unfounded claims on behalf of Thailand. Similar to its sovereign ability to communicate a

concern relating to international relations without the defendants’ officious assistance, Thailand possesses the ability (and had the opportunity in the November 9 Letter and the more recent December 14 Dip Note) to assert double jeopardy concerns. Thailand has not done so. The November 9 Letter speaks for

itself, and in it, Thailand asserts no definitive position on any aspect of the government’s extradition request. Indeed,

Thailand’s only affirmative statement is that it is postponing review of the request for the time being.12 In an effort to buttress their erroneous position and convince the Court that the government’s prosecution runs afoul of Thai law and Thai interests, defendants continually advance unfounded and incorrect claims that Thailand has definitively asserted its sovereign interests in this matter. For example, in

their latest filing, defendants quote: “[n]otably, the Kingdom has expressed sovereign interest as to both the Governor and Miss. Siriwan....”.13 Quite to the contrary, Thailand has never

made such an expression of interest - at least not in the context of “sole” sovereign interests so as to bar the United States from also prosecuting the defendants. Indeed, defendants’ quotation

allegedly “noting” Thailand’s expressed sovereign interests as to

DE 105 Ex. A. Further, in the plain text of the letter, Thailand separately identifies the basis of its own investigation (abuses of public trust) and the basis for the United States’ investigation (money laundering offenses) - clearly evincing an understanding that the two investigations involve separate crimes.
13

12

DE 106 at 3. -7-

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both defendants comes not from a letter written by Thailand or from any other authoritative Thai source that actually asserts Thai sovereign interests. Rather the quote is from defendants’

previous filing in which they advanced the same unsubstantiated allegation (essentially, defendants are quoting themselves as support for their proposition).14 The simple truth is that Thailand has not asserted sole jurisdiction - either directly as to the defendants, indirectly through Section 9 of the Thai Penal Code, or otherwise. Defendants’ repeated incantation of the above statement and similarly unfounded and incorrect statements claiming Thailand has asserted sole jurisdiction over this matter do not and cannot make it true. The government refers the Court to the following portions of its filings for a fuller discussion of these issues: • DE 67 Pg. 45-49 (Section 9 of Thailand’s penal code is not an assertion by Thailand of sole jurisdiction over the offenses in the indictment) Pg. 9-13 (Refuting defendant‘s theories on “organic” or “exclusive” jurisdiction) 2. International Law

DE 84

Despite contrary case law founding extraterritorial jurisdiction under § 1956(f), defendants nevertheless insist that application of this provision in this case conflicts with international law. In support of this assertion, defendants cite

to the two-part test for extraterritorial application of a criminal statute applied in United States v. Neil, 312 F.3d 419,

14

DE 97 at 5. -8-

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420 (9th Cir. 2002): first, the court looks to the text of the statute for an indication that Congress intended it to apply extraterritorially; second (assuming the first step is met), the court looks to the operation of the statute and determines whether the exercise of such jurisdiction comports with principles of international law. Defendants, in analyzing the

above two-part test, finally cede the first prong, acknowledging that the “MCLA expressly provides for extraterritorial application...,[t]hus the first part of the Ninth Circuit’s test is met.”15 Defendants next claim, however, that although

Congress clearly intends for the statutes to apply extraterritorially under the conditions stated in the statutes, such application must be barred as it conflicts with international law in this case.16 The government agrees that the first step is met. As for

the second step, defendants apparently choose to ignore the full discussion regarding this step. The court in Neil quite clearly

stated that “[i]n general, we consult international law as part of our analysis of statutes that do not make explicit their intent to exercise extraterritorial jurisdiction.”17
15

The court

DE 106 at 10 (defendants cite to both 18 U.S.C. § 1956(b)(2)(A) and § 1956(f) as authority). Although the government disagrees as to the applicability of § 1956(b)(2)(A) to the precise issue of the existence of extraterritorial jurisdiction, it concurs – and has consistently asserted – that Congress has clearly expressed its intent that there be extraterritorial jurisdiction for violations of the money laundering statutes charged in the indictment (§§ 1956(a)(2)(A) & (h)).
16

DE 106 at 10-11.

Neil, at 422 (emphasis added)(citing United States v. Hill, 279 F.3d 731, 739 (9th Cir. 2002)); United States v. Felix-9-

17

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further explained that “[i]n this particular case, we consult international law because the text of the statute qualifies the grant of exterritorial jurisdiction by providing that such jurisdiction is available only ‘to the extent permitted by international law.’”18 While many post-Neil Ninth Circuit cases

apply both prongs of the Neil analysis, in nearly all of the cases, the legislative intent regarding extraterritorial application of the statute in question is not explicit.19 Section 1956(f), the extraterritorial jurisdictional provision for the offenses charged in the instant indictment, unmistakably evinces the extraterritorial intent of Congress, as defendants finally concede.

Gutierrez, 940 F.2d 1200, 1204 (9th Cir. 1991). Id., citing 18 U.S.C. §§ 7(8), 2243(a) (emphasis added). In Neil, the statute at issue was 18 U.S.C. § 2243(a) (engaging in a sexual act with a minor) which specifically states that the law applies only “[t]o the extent permitted by international law.” Because the statute specifically limited application only to the extent permitted by international law, the court was compelled to apply the second step of the test. United States v. Felix-Gutierrez,940 F.2d 1200, 1204-1205 (9th Cir. 1991) (statute under which the defendant was charged did not expressly provide for extraterritorial application and the court stated that prior to giving effect to any penal statute, the court must consider the effect on international law); United States v. Vasquez-Velasco, 15 F.3d 833, 839-849 (9th Cir. 1994)(court inferred congressional intent even though statute did not affirmatively state such intent, then engaged in second step analysis); United States v. Hill, 279 F.3d 731, 739 (9th Cir. 2002)(statute did not explicitly state that jurisdiction could be applied extraterritorially); United States v. Clark, 435 F.3d 1100, 1006 (statute explicitly provided for extraterritorial intention yet court nonetheless considered the second step in the analysis). -1019 18

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Defendant Juthamas Siriwan’s status as a former foreign official does not alter this analysis.20 The extraterritorial

jurisdictional prong of § 1956(f) has been utilized in connection with § 1956(a)(2)(A) in countless cases throughout the country.21 Yet defendants fail to cite, and the government has not found, any case in which extraterritorial application of § 1956(f) as applied to § 1956(a)(2)(A) has been denied based on a conflict with international law analysis. Assuming, however, that the Court were to engage in the second step of the analysis, defendants’ arguments in this area fail. Defendants, in their January 11 Filing, reassert two bases

to support their argument that the statutes as charged run afoul of international law: (1) the indictment “runs squarely up against Thailand’s assertion of exclusive jurisdiction”22; and (2) the exercise of such jurisdiction is “unreasonable” within

Foreign policy implications are in the purview of the executive branch. See United States v. Corey, 232 F.3d at 1179 n.9 (9th Cir. 2000)(“[w]hen construing a statute with potential foreign policy implications, we must presume that the President has evaluate the foreign policy consequences of such an exercise of U.S. law and determined that it serves the interests of the United States.” See United States v. Bodmer, 342 F.Supp.2d 176, 190-191 (S.D.N.Y. 2004)(finding extraterritorial jurisdiction (without engaging in an international law analysis) in a prosecution of a foreign national under §§ 1956(a)(2)(A) &(f) where the Foreign Corrupt Practices Act alleged as the specified unlawful activity being promoted); Kuok,672 F.3d at 938 (9th Cir. 2012)(denying §1956(a)(2)(A) extraterritorial jurisdiction under §1956(f) because indictment did not meet monetary threshold (without engaging in an international law analysis)).
22 21

20

DE 106 at 10. -11-

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the meaning of §403 of the Restatement (Third) of the Law of Foreign Relations.23 Both of these bases are groundless.

First, as demonstrated in Part C(1) above (and the government’s previous filings referenced therein), Thailand has not asserted exclusive jurisdiction, through Title 9 or otherwise. As for the reasonableness argument, the January 11

Filing refers back only to defendants’ previous filing on this issue. The government has already addressed this argument and

established that, as applied in this case, extraterritorial jurisdiction is reasonable and does not conflict with international law. The government refers the Court to the

following portion of its filings for a fuller discussion of this issues: • DE 67 Pg. 35-45 (Application of § 1956(a)(2)(A) does not violate customary international law) CONCLUSION Defendants’ contention that the government needs to “run the table” of nine alleged points of law in order for the indictment to survive a motion to dismiss is simply incorrect.24 The

purpose of the indictment is to inform the defendants of the charges against them and to allow them to plead double jeopardy.25 The test for the sufficiency of an indictment is

23

Id. at 11. DE 106 at 1. Hamling v. United States, 418 U.S. 87, 117 (1974). -12-

24

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whether it “contains the elements of the charged crime in adequate detail to inform the defendant of the charge...”26 The government has more than adequately met this burden.27 As argued above, and through its previous submissions and argument before the Court, the charges set forth in the indictment are valid charges that have been sufficiently plead. Defendants have not asserted a valid basis for the Court to dismiss the indictment and the Court should DENY defendants’ Motion to Dismiss. DATED: February 1, 2013 Respectfully submitted, ANDRÉ BIROTTE JR. United States Attorney ROBERT E. DUGDALE Assistant United States Attorney Chief, Criminal Division JAIKUMAR RAMASWAMY Chief, Asset Forfeiture and Money Laundering Section United States Dept. of Justice

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26

/s/ JONATHAN E. LOPEZ Deputy Chief Money Laundering & Bank Integrity Unit AFMLS, Criminal Division United States Dept. of Justice

Id. See also DE 84 pg. 1-5. -13-

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