United States v. Talebnejad

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
UNITED STATES OF AMERICA, 
Plaintiff-Appellant,
v.
FARHAD TALEBNEJAD, a/k/a Fran T.
Nejad, a/k/a Fran T. Nejad Shirazi,
a/k/a Farhad Talebnehad Shirazi;
FATAMEH TALEBNEJAD, a/k/a Fatemeh
Talebnejad, a/k/a Fatameh
Talebnejao; ABDOLRAHMAN
TALEBNEJAD, a/k/a Abdol Rahman  No. 04-4841
Talebnejad, a/k/a Abdol Talebnejad,
a/k/a Abdol R. Talebnejad,
Defendants-Appellees,
and
FOAD TALEBNEJAD, a/k/a Foad
Talebnejad Shirazi, a/k/a Foad
Shirazi,
Defendant.

2 UNITED STATES v. TALEBNEJAD
UNITED STATES OF AMERICA, 
Plaintiff-Appellee,
v.
FARHAD TALEBNEJAD, a/k/a Fran T.
Nejad, a/k/a Fran T. Nejad Shirazi,
a/k/a Farhad Talebnehad Shirazi;
FATAMEH TALEBNEJAD, a/k/a Fatemeh
Talebnejad, a/k/a Fatameh
Talebnejao; ABDOLRAHMAN
TALEBNEJAD, a/k/a Abdol Rahman  No. 04-4873
Talebnejad, a/k/a Abdol Talebnejad,
a/k/a Abdol R. Talebnejad,
Defendants-Appellants,
and
FOAD TALEBNEJAD, a/k/a Foad
Talebnejad Shirazi, a/k/a Foad
Shirazi,
Defendant.

Appeals from the United States District Court
for the District of Maryland, at Greenbelt.
Peter J. Messitte, District Judge.
(CR-03-517-PJM)
Argued: May 25, 2006
Decided: August 21, 2006
Before WILKINS, Chief Judge, GREGORY, Circuit Judge, and
Joseph F. ANDERSON, Jr., Chief United States District Judge
for the District of South Carolina, sitting by designation.
Reversed in part, dismissed in part, and remanded by published opin-
ion. Chief Judge Wilkins wrote the majority opinion, in which Judge
UNITED STATES v. TALEBNEJAD 3
Anderson joined. Judge Gregory wrote an opinion concurring in part
and dissenting in part.
COUNSEL
ARGUED: David Ira Salem, Assistant United States Attorney,
OFFICE OF THE UNITED STATES ATTORNEY, Greenbelt, Mary-
land, for Appellant/Cross-Appellee. Dale Preston Kelberman, MILES
& STOCKBRIDGE, P.C., Baltimore, Maryland, for Appellees/Cross-
Appellants. ON BRIEF: Allen F. Loucks, United States Attorney,
Chan Park, Assistant United States Attorney, OFFICE OF THE
UNITED STATES ATTORNEY, Greenbelt, Maryland, for
Appellant/Cross-Appellee. Todd M. Reinecker, MILES & STOCK-
BRIDGE, P.C., Baltimore, Maryland, for Appellee/Cross-Appellant
Fatameh Talebnejad; Christopher B. Mead, LONDON & MEAD,
Washington, D.C., for Appellee/Cross-Appellant Farhad Talebnejad;
Timothy J. Sullivan, College Park, Maryland, for Appellee/Cross-
Appellant Abdolrahman Talebnejad.
OPINION
WILKINS, Chief Judge:
The United States appeals an order of the district court dismissing
the indictment against Farhad Talebnejad and his parents (collec-
tively, "the Talebnejads"). The Talebnejads were charged with con-
ducting an unlicensed money transmitting business, see 18 U.S.C.A.
§ 1960 (West Supp. 2006). The district court dismissed the indictment
on the basis that its allegations were insufficient in numerous
respects. See United States v. Talebnejad, 342 F. Supp. 2d 346, 353-
61 (D. Md. 2004). The court declined to address the Talebnejads’
Eighth Amendment challenge to the forfeiture allegations of the
indictment on the basis that the claim was premature. See id. at 361.
For the reasons set forth below, we reverse the dismissal of the indict-
ment and dismiss the Talebnejads’ cross-appeal of the refusal to con-
sider the Eighth Amendment claim.
4 UNITED STATES v. TALEBNEJAD
I.
A. Relevant Provisions
1. 18 U.S.C.A. § 1960A money transmitting business is one that, for a fee, accepts cur-
rency for transfer within or outside the United States through foreign
currency exchanges and financial institutions. See 18 U.S.C.A.
§ 1960(b)(2); United States v. Velastegui, 199 F.3d 590, 592 (2d Cir.
1999). Many of these businesses are operated informally, by immi-
grants for fellow immigrants from their home countries. In 1992,
Congress sought "to combat the growing use of money transmitting
businesses to transfer large amounts of the monetary proceeds of
unlawful enterprises" by enacting § 1960. Velastegui, 199 F.3d at
593. Prior to 2001, the statute provided, in pertinent part:
(a) Whoever conducts, controls, manages, supervises,
directs, or owns all or part of a business, knowing the busi-
ness is an illegal money transmitting business, shall be fined
in accordance with this title or imprisoned not more than 5
years, or both.
(b) As used in this section—
(1) the term "illegal money transmitting busi-
ness" means a money transmitting business which
affects interstate or foreign commerce in any man-
ner or degree and—
(A) is intentionally operated without an
appropriate money transmitting license in a
State where such operation is punishable as a
misdemeanor or a felony under State law; or
(B) fails to comply with the money trans-
mitting business registration requirements under
section 5330 of title 31, United States Code, or
regulations prescribed under such section . . . .
UNITED STATES v. TALEBNEJAD 5
18 U.S.C.A. § 1960, historical & statutory notes (West Supp. 2006)
(emphasis added) (internal quotation marks omitted).
On October 26, 2001, Congress amended the statute to provide, in
relevant part, as follows:
(a) Whoever knowingly conducts, controls, manages,
supervises, directs, or owns all or part of an unlicensed
money transmitting business, shall be fined in accordance
with this title or imprisoned not more than 5 years, or both.
(b) As used in this section—
(1) the term "unlicensed money transmitting
business" means a money transmitting business
which affects interstate or foreign commerce in
any manner or degree and—
(A) 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, whether or not the
defendant knew that the operation was required
to be licensed or that the operation was so pun-
ishable; [or]
(B) fails to comply with the money trans-
mitting business registration requirements under
section 5330 of title 31, United States Code, or
regulations prescribed under such section . . . .
18 U.S.C.A. § 1960 (emphasis added). The purpose of the amendment
was to eliminate a potentially available affirmative defense that the
defendant was unaware of applicable state licensing requirements. See
H.R. Rep. No. 107-250, pt. I, at 54 (2001) (explaining that the amend-
ment "clarifies the scienter requirement in § 1960 to avoid the prob-
lems that occurred when the Supreme Court interpreted the currency
transaction reporting statutes to require proof that the defendant knew
that structuring a cash transaction to avoid the reporting requirements
6 UNITED STATES v. TALEBNEJAD
had been made a criminal offense. See Ratzlaf v. United States, [510
U.S. 135,] 114 S. Ct. 655 (1994). The proposal makes clear that an
offense under § 1960 is a general intent crime for which a defendant
is liable if he knowingly operates an unlicensed money transmitting
business.").
2. Maryland Law
Maryland law prohibits a person from engaging in "the business of
money transmission" unless that person is a licensee, is a delegate of
a licensee, or is exempt from the licensing requirement. Md. Code
Ann., Fin. Inst. § 12-405 (LexisNexis 2003). "Money transmission" is
defined as "the business of selling or issuing payment instruments or
stored value devices, or receiving money or monetary value, for trans-
mission to a location within or outside the United States" and includes
"[a]ny informal money transfer system engaged in as a business for
. . . facilitating the transfer of money outside the conventional finan-
cial institutions system to a location within or outside the United
States." Md. Code Ann., Fin. Inst. § 12-401(l) (LexisNexis 2003).
Maryland law sets forth criminal penalties for "[a]ny person who
knowingly and willfully violates" the licensing requirement. Md. Code
Ann., Fin. Inst. § 12-430 (LexisNexis 2003) (emphasis added).
3. Federal Regulations
Although § 1960 has made failure to comply with federal registra-
tion requirements punishable since 1994, see 18 U.S.C.A. § 1960, his-
torical & statutory notes (West 2000), pertinent regulations were not
promulgated until 1999 and did not become effective until December
31, 2001. The actual content of applicable federal regulations is not
pertinent to the issues before us.
B. The Talebnejads
The Talebnejads are Iranian immigrants. Farhad Talebnejad oper-
ated two money transmitting businesses—Shirazi Money Exchange,
Inc., and Shirazi Arz, Inc.—out of his parents’ home in Rockville,
Maryland. The businesses were not licensed under Maryland law, nor
were they registered pursuant to 31 U.S.C.A. § 5330 (West 2003). In
UNITED STATES v. TALEBNEJAD 7
late 1995, Talebnejad investigated the possibility of obtaining
licenses, but decided not to do so because he could not afford the cost
and he believed that the licensing statute did not apply to his busi-
nesses.
In November 2003, the Talebnejads were charged with one count
of conspiring to conduct an unlicensed money transmitting business
and with two substantive counts of conducting an unlicensed money
transmitting business.1 All three counts alleged that the businesses
were "unlicensed" within the meaning of § 1960(a) because (1) the
businesses were required to be licensed under Maryland law, and
were not, in violation of § 1960(b)(1)(A); and (2) the businesses were
required to be registered with the federal government, and were not,
in violation of § 1960(b)(1)(B).2 The indictment also sought forfeiture
of approximately $18 million in property traceable to the charged
offenses.
The Talebnejads moved to dismiss the indictment, asserting that (1)
§ 1960(b)(1)(A) violated the Equal Protection Clause because not all
states require money transmitting businesses to be licensed; (2)
§ 1960(b)(1)(A) violated the Due Process Clause because it lacked a
scienter requirement as to the applicability of state licensing laws; (3)
§ 1960(b)(1)(A) was unconstitutionally vague in several respects; and
(4) the indictment failed to adequately inform the Talebnejads of the
offenses charged.
The district court granted the motion.3 With respect to the due pro-
cess challenge to the lack of a scienter requirement in
§ 1960(b)(1)(A), the court recognized that "Congress attempted to
exclude any mens rea requirement when it amended § (b)(1)(A)."
1
One other family member was also charged, but the charges against
him were subsequently dismissed.
2
For purposes of this appeal, we accept the Government’s contention
that § 1960 sets forth one offense—conducting an unlicensed money
transmitting business—that may be committed in multiple ways. For ease
of reference, however, we will refer to the definitions of "unlicensed" in
§ 1960(b)(1)(A) and (B) as independent violations of § 1960.
3
The court rejected the Talebnejads’ equal protection claim, see Taleb-
nejad, 342 F. Supp. 2d at 350-53, a ruling they do not challenge.
8 UNITED STATES v. TALEBNEJAD
Talebnejad, 342 F. Supp. 2d at 353. But, the court observed,
§ 1960(b)(1)(A) "still refers to the operation of such a business where
such operation is punishable as a misdemeanor or felony under State
law." Id. (internal quotation marks omitted). The court concluded that
"the plain meaning of these words is that unless the lack of a license
is ‘punishable’ under state law, it is not a federal crime at all," and
that the Government therefore was required to allege and prove an
actual violation of state law in order to prove a violation of § 1960.
Id. at 354-55. Because the indictment did not allege that Talebnejad
had "knowingly and willfully" failed to obtain a license, Md. Code
Ann., Fin. Inst. § 12-430, the court ruled it was deficient, see Tale-
bnejad, 342 F. Supp. 2d at 355. The district court acknowledged the
potential conflict between its analysis of the statute and the expressed
intent of Congress to omit any scienter requirement with respect to
state licensing obligations, but purported to avoid this conflict by
declaring that portion of § 1960 "merely inoperative" in states that
have identified a mens rea for violation of licensing requirements. Id.
Although the Talebnejads did not challenge the constitutionality of
§ 1960(b)(1)(B), the district court nevertheless considered that provi-
sion as well. See id. at 355-56. Noting that Congress had not "clearly
expressed" its intent to exclude a mens rea from a violation of
§ 1960(b)(1)(B), the court ruled that the Government could obtain a
conviction under that provision only by "alleg[ing] and prov[ing] that
the Defendant acted knowing that he had an obligation to register and
that he willfully failed to do so." Id. at 356.
II.
We first consider the Talebnejads’ claims regarding the
§ 1960(b)(1)(A) charge.
A. Due Process Challenge
As noted above, § 1960(b)(1)(A) provides that it is a federal
offense to (1) operate a money transmitting business, (2) that affects
interstate commerce, and (3) that is unlicensed under state law, when
(4) state law requires a license and (5) state law punishes lack of a
license as a felony or misdemeanor. See 18 U.S.C.A. § 1960(b)(1)(A).
The parties agree that the Government must allege and prove the
UNITED STATES v. TALEBNEJAD 9
defendant’s knowledge with respect to the first three elements and
that Congress explicitly excluded any mens rea requirement from the
last two elements. The question, therefore, is whether the statute is
constitutional in the absence of a mens rea requirement as to these
two elements.
The definition of federal criminal offenses lies within the province
of Congress. See Liparota v. United States, 471 U.S. 419, 424 (1985).
There is no question that, at least under some circumstances, Con-
gress may dispense with a mens rea element, see Staples v. United
States, 511 U.S. 600, 606 (1994), as it has clearly done with respect
to § 1960(b)(1)(A). The clear language of § 1960(b)(1)(A) requires us
to reject the attempt of the district court to avoid the constitutional
question through statutory construction, i.e., by incorporating the
Maryland intent requirement into the federal statute and declaring
Congress’ language regarding intent to be surplusage. See Talebnejad,
342 F. Supp. 2d at 353-55; see also Md. Code Ann., Fin. Inst. § 12-
430 (setting forth criminal penalties for "knowingly and willfully
violat[ing]" the licensing requirement). First, the principle that a stat-
ute should be construed so as to avoid a grave constitutional question
—as the district court evidently sought to do—"has no application"
when, as here, the statute is unambiguous. United States v. Oakland
Cannabis Buyers’ Coop., 532 U.S. 483, 494 (2001). Second, "[a]
well-recognized canon of construction requires courts to read statu-
tory provisions so that, when possible, no part of the statute is super-
fluous." United States v. Childress, 104 F.3d 47, 52 (4th Cir. 1996).
In light of these principles, the district court was obliged to give effect
to Congress’ clearly expressed intent that no mens rea—whether
derived from § 1960 itself or from an underlying state statute—was
to attach to the latter two elements of a § 1960(b)(1)(A) offense.4
The essence of the Talebnejads’ due process challenge to
§ 1960(b)(1)(A) is that Congress exceeded constitutional bounds
when it declared that ignorance of state licensing requirements is not
4
The partial dissent argues that in amending § 1960(b)(1)(A) in 2001,
Congress nullified only the federal specific intent requirement, leaving
intact any applicable state specific intent requirement. Even if this was
Congress’ intent, the statutory language simply does not allow such a
distinction.
10 UNITED STATES v. TALEBNEJAD
a defense to liability under the federal statute. For the reasons set
forth below, however, we agree with the Government that
§ 1960(b)(1)(A) passes constitutional muster because it "requires . . .
defendants to know the facts that make their conduct illegal," Appel-
lant’s Br. at 27, and omits a knowledge requirement only as to legal
obligations.
The Supreme Court has indicated that there are limits to the author-
ity of Congress to omit a mens rea requirement as to one or more ele-
ments of an offense. For example, in United States v. X-Citement
Video, Inc., 513 U.S. 64 (1994), the Court considered the proper con-
struction of a federal statute prohibiting the knowing interstate trans-
portation of a visual depiction of a minor engaged in sexually explicit
conduct. See X-Citement Video, 513 U.S. at 65-66. The Supreme
Court rejected the Government’s argument that the defendant could
be convicted without knowing that the person depicted was a minor,
reasoning in part that such a reading of the statute was constitution-
ally problematic because the presence of a minor in the video made
the difference between conduct that was constitutionally protected
(possession of pornography) and conduct that was not (possession of
obscenity). See id. at 72-73, 78. Similarly, Staples involved the ques-
tion of whether a statute that prohibited receipt or possession of an
unregistered firearm should be construed so as to include a mens rea
with respect to the facts that brought a particular weapon within the
limited, statutory definition of "firearm." See Staples, 511 U.S. at
603-04. Citing the "long tradition of widespread lawful gun owner-
ship by private individuals in this country," id. at 610, the Court con-
cluded that an individual could be convicted under the statute only if
the factfinder determined that the defendant knew of the factual char-
acteristics that brought the weapon within the statutory definition, see
id. at 619.
Justice Ginsburg, concurring in the judgment in Staples, was care-
ful to note that the presumption that a mens rea attaches to the ele-
ments of the offense "requires knowledge only of the facts that make
the defendant’s conduct illegal, lest it conflict with the related pre-
sumption, deeply rooted in the American legal system, that, ordinar-
ily, ignorance of the law or a mistake of law is no defense to criminal
prosecution." Staples, 511 U.S. at 622 n.3 (Ginsburg, J., concurring
in the judgment) (internal quotation marks omitted). It is here that the
UNITED STATES v. TALEBNEJAD 11
5
Talebnejads’ challenge to § 1960(b)(1)(A) founders. Both X-
Citement Video and Staples concerned whether due process required
the inclusion of a mens rea as to a factual element of a crime, not a
legal element. Accord Bryan v. United States, 524 U.S. 184, 192
(1998) ("[T]he knowledge requisite to knowing violation of a statute
is factual knowledge as distinguished from knowledge of the law."
(internal quotation marks omitted)). Here, the Talebnejads claim that
due process requires the Government to prove that they knew that
their operation of an unlicensed money transmitting business violated
state law.
The Supreme Court has recognized a "mistake of law" defense in
only one case. In Lambert v. California, 355 U.S. 225 (1957), the
Supreme Court considered the constitutionality of a municipal ordi-
nance that required a convicted felon to register with the city, and
subjected the felon to criminal penalties even if he or she was
unaware of the registration requirement, see id. at 226-27. The Court
held that the Due Process Clause "places some limits on [the] exer-
cise" of the rule that ignorance of the law is no excuse, and concluded
that the ordinance exceeded those limits. Id. at 228. The key to the
ruling of the Court was its characterization of the conduct at issue as
"wholly passive," in that violation of the ordinance was "unaccompa-
nied by any activity whatever, mere presence in the city being the
test." Id. at 228-29. The same cannot be said of the licensing require-
ment of § 1960(b)(1)(A), which reaches the unquestionably active
conduct of operating a business.
5
We agree with the Talebnejads that § 1960(b)(1)(A) is not a strict lia-
bility offense. This fact does not help them, however.
A strict liability or "public welfare" offense is one in which no mens
rea is attached to a factual element of a crime, such that a defendant can-
not escape criminal liability on the basis of a mistake of fact. See, e.g.,
United States v. Freed, 401 U.S. 601, 607, 609 (1971) (holding that a
conviction for possession of an unregistered hand grenade did not require
knowledge that the hand grenade was unregistered; characterizing the
statute as "a regulatory measure in the interest of the public safety, which
may well be premised on the theory that one would hardly be surprised
to learn that possession of hand grenades is not an innocent act"). As
explained in the text, however, § 1960(b)(1)(A) is a general intent crime,
as to which the mens rea of "knowledge" attaches to all factual elements
of the offense.
12 UNITED STATES v. TALEBNEJAD
Liparota, on which the Talebnejads rely, is of no help to them.6
There, the Supreme Court considered the mens rea necessary to con-
vict the defendant of unauthorized acquisition of food stamps. Noting
the many innocent circumstances under which an individual might
acquire or use food stamps without authorization (for example, by
being the recipient of a mistaken mailing), see Liparota, 471 U.S. at
426-27, the Court held that the Government was required to demon-
strate that the defendant knew that his acquisition of the food stamps
was unauthorized, see id. at 425. Liparota does not aid the Talebne-
jads’ due process challenge because Liparota concerned only a ques-
tion of statutory construction; once the Supreme Court construed the
statute to require knowledge of the lack of authorization for convic-
tion, it had no occasion to consider whether the absence of a knowl-
edge requirement would violate due process.
In summary, we conclude—consistent with an unbroken line of
Supreme Court precedent—that § 1960(b)(1)(A) requires a mens rea
of knowledge only as to the factual elements of the offense. The Due
Process Clause did not require Congress to include a mens rea as to
the legal elements of the crime, and we reject the Talebnejads’ argu-
ment to the contrary.
B. Other Challenges
The district court also ruled the indictment deficient because it
failed to address the effect of an amendment to Maryland law and
because it did not allege that the Talebnejads had a duty under Mary-
land law to obtain a license. We address these issues below.
6
Nor is Arthur Andersen LLP v. United States, 544 U.S. 696 (2005).
In Arthur Andersen, a unanimous court held that a federal statute that
prohibited "knowingly . . . corruptly persuad[ing]" an individual to with-
hold or alter documents relevant to an official proceeding required proof
that the defendant was conscious of wrongdoing. Id. at 705-06. This con-
clusion was not based on due process concerns, however, but rather on
the statutory language. See id. at 706 ("Only persons conscious of wrong-
doing can be said to knowingly corruptly persuade." (alterations & inter-
nal quotation marks omitted)).
UNITED STATES v. TALEBNEJAD 13
1.
The Maryland money transmitting statute was amended effective
October 1, 2002, to make changes to the definition of "money trans-
mission." Without addressing the materiality of these amendments,
the district court concluded that "the pre-October 1, 2002 definitions
must be satisfied with respect to pre-October 1, 2002 activities and
the post-October 1, 2002 definitions satisfied as to the post October
1, 2002 activities." Talebnejad, 342 F. Supp. 2d at 358.
We agree with the district court that if the amendment of Maryland
law broadened the definition of "money transmission"—and thus,
broadened the applicability of the licensing requirement—prosecuting
pre-October 1, 2002 conduct under the post-October 1, 2002 statute
would violate the Ex Post Facto Clause. In other words, if business
activity "A" was not required to be licensed prior to October 1, 2002
—and thus it was not a violation of federal law to engage in the activ-
ity without a state license—it would be a violation of the Ex Post
Facto Clause to prosecute that conduct on the basis that it required a
license after the October 1, 2002 amendment. See Weaver v. Graham,
450 U.S. 24, 28 (1981) (defining an ex post facto law as "any law
which imposes a punishment for an act which was not punishable at
the time it was committed" (internal quotation marks omitted)).
We conclude, however, that dismissal of the indictment is not
required simply because Maryland law was amended during the time
frame of the offense that is alleged in the indictment. An indictment
meets the requirements of the Fifth and Sixth Amendments "if it, first,
contains the elements of the offense charged and fairly informs a
defendant of the charge against which he must defend, and, second,
enables him to plead an acquittal or conviction in bar of future prose-
cutions for the same offense." Hamling v. United States, 418 U.S. 87,
117 (1974). "Where a particular date is not a substantive element of
the crime charged, strict chronological specificity or accuracy is not
required." United States v. Kimberlin, 18 F.3d 1156, 1159 (4th Cir.
1994) (internal quotation marks omitted). Here, the indictment alleges
that the Talebnejads operated an unlicensed money transmitting busi-
ness, in violation of § 1960(b)(1)(A), "[b]eginning no earlier than
October 26, 2001 and continuing to in or about December 2002." J.A.
25. The offense is proved if, at any time during the period alleged by
14 UNITED STATES v. TALEBNEJAD
the indictment, the Talebnejads’ business was subject to the Maryland
licensing requirement.7 Although the case may be made more difficult
(for both parties) by the necessity of addressing two versions of the
state licensing requirement, the burden on the Talebnejads is not so
great as to amount to a violation of due process.8
2.
The district court also concluded that the indictment was defective
because it did not allege that the Talebnejads had a duty to acquire
a license under Maryland law. See Talebnejad, 342 F. Supp. 2d at
359. The court reasoned that unless the Government was required to
allege and prove a duty to obtain a license, "any number of individu-
als affiliated with an unlicensed money transmitting business could be
punished under § 1960." Id. This simply is not an accurate reading of
the statute. Section 1960(b)(1)(A) applies only to one who "conducts,
controls, manages, supervises, directs, or owns" a money transmitting
business, knowing that it is not licensed, 18 U.S.C.A. § 1960(a).
Criminal liability is thus clearly directed toward those who are, in
some substantial degree, in charge of the operation; the statute does
not reach mere employees. We therefore reject the conclusion of the
district court that the Government is required to allege and prove a
state-law duty to acquire a license in order to obtain a conviction
under § 1960(b)(1)(A).
III.
The district court also concluded that the indictment was lacking
7
The same is true with respect to the allegation that the Talebnejads
violated § 1960(b)(1)(B) by failing to register their business pursuant to
regulations that did not become effective until December 31, 2001.
8
As the district court noted, see Talebnejad, 342 F. Supp. 2d at 358,
Count One of the second superseding indictment alleges a conspiracy to
violate § 1960(b)(1)(A) that began in December 2000, well before the
statute was amended to omit a scienter requirement. This is not an ex
post facto violation; at most, it presents a question for the jury as to
whether the conspiracy continued after the amendment of
§ 1960(b)(1)(A). See United States v. Julian, 427 F.3d 471, 482 (7th Cir.
2005), cert. denied, 126 S. Ct. 1444 (2006).
UNITED STATES v. TALEBNEJAD 15
with respect to the charge that the Talebnejads violated
§ 1960(b)(1)(B), which defines an "unlicensed money transmitting
business" as one that "fails to comply with the money transmitting
business registration requirements" of 31 U.S.C.A. § 5330 and related
regulations. With respect to this provision, the district court con-
cluded that the Government was required "to allege and prove that the
Defendant acted knowing that he had an obligation to register and that
he wilfully failed to do so." Talebnejad, 342 F. Supp. 2d at 356. It
based this conclusion on "Congress’s failure to amend . . . § (b)(1)(B)
when it amended § (b)(1)(A)" and on "[t]he conventional understand-
ing . . . that mens rea is a fundamental component of every criminal
act." Id.
We cannot accept the reasoning of the district court. Section 1960,
as currently written, applies to whoever "knowingly conducts . . . an
unlicensed money transmitting business," 18 U.S.C.A. § 1960(a), and
defines "unlicensed money transmitting business," in relevant part, as
"a money transmitting business which affects interstate or foreign
commerce . . . and . . . fails to comply with the money transmitting
business registration requirements" set forth in 31 U.S.C.A. § 5330 or
accompanying regulations, 18 U.S.C.A. § 1960(b)(1)(B). There is no
question here that the Government must prove the Talebnejads’
knowledge as to all of the factual elements of the crime: that they
were conducting a money transmitting business that affected interstate
commerce and that was unregistered. Therefore, § 1960(b)(1)(B) sets
forth a constitutionally valid general intent crime, just as
§ 1960(b)(1)(A) does. See Bryan, 524 U.S. at 192. Nothing in the stat-
utory language—such as the use of the word "willful"—suggests that
the Government must additionally prove knowledge of the law. Fur-
ther, it is not relevant that Congress made no change to
§ 1960(b)(1)(B) when it amended § 1960(b)(1)(A); there has never
been a question as to whether a conviction under § 1960(b)(1)(B)
required proof of the defendant’s knowledge of the law.9 See United
States v. Uddin, 365 F. Supp. 2d 825, 829 (E.D. Mich. 2005).
9
We note that § 1960(b)(1)(B) bears grammatical resemblance to the
statute at issue in Liparota, discussed supra, as to which the Supreme
Court concluded that "[a]bsent indication of contrary purpose in the lan-
guage or legislative history of the statute," the statutory language "re-
16 UNITED STATES v. TALEBNEJAD
IV.
The Talebnejads cross-appeal the portion of the district court order
that declined to address their challenge to the forfeiture allegations of
the indictment. The Talebnejads maintain that the $18 million forfei-
ture sought by the Government violates the Excessive Fines Clause
of the Eighth Amendment. We agree with the district court that this
challenge is not yet ripe. Accord United States v. Covey, 232 F.3d
641, 646 (8th Cir. 2000) ("We do not have jurisdiction [over an
appeal of a preliminary forfeiture order] when no final forfeiture order
or judgment has been entered . . . ."). Accordingly, we dismiss the
Talebnejads’ cross-appeal.
V.
For the reasons set forth above, we reverse the dismissal of the
indictment and remand for further proceedings. The Talebnejads’
cross-appeal is dismissed.
REVERSED IN PART, DISMISSED IN PART,
AND REMANDED
GREGORY, Circuit Judge, concurring in part and dissenting in part:
Today, we must examine the meaning and constitutionality of 18
U.S.C. § 1960, the federal criminal statute prohibiting unlicensed
money transmitting businesses. Having considered the issues pre-
sented, I cannot join the majority in two respects. First, I believe that
the indictment in this case is defective because it omits the scienter
requirements necessary for a conviction under § 1960(b)(1)(A). I
therefore respectfully dissent from the majority’s decision to reverse
quire[d] a showing that the defendant knew his conduct to be
unauthorized." Liparota, 471 U.S. at 425. With respect to § 1960, in con-
trast, there is relevant legislative history in the form of Congress’ state-
ment that it desired § 1960(b)(1)(A) to be a general intent crime. In light
of this clear expression of congressional purpose with respect to
§ 1960(b)(1)(A), it would be unreasonable to conclude that Congress
intended a greater mens rea for § 1960(b)(1)(B).
UNITED STATES v. TALEBNEJAD 17
the dismissal of the indictment. Second, although I agree that
§ 1960(b)(1)(A) and (B) are not facially unconstitutional, I write sep-
arately to express my concern that these provisions could raise sub-
stantial due process questions in some circumstances.
I.
As the majority notes, the Talebnejads are alleged to have violated
§ 1960 by operating an "unlicensed money transmitting business," as
that term is defined in both § 1960(b)(1)(A) and (B). The first issue
before us is the proper construction of the scienter required for
§ 1960(b)(1)(A), which criminalizes a violation of state licensing
requirements.1 We must determine whether, as the district court held,
the Government must establish a knowing and willful violation of
Maryland’s licensing law to convict the Talebnejads. As always, this
inquiry begins with an examination of the text of the statute.
Under § 1960, it is a crime to operate "an unlicensed money trans-
mitting business." 18 U.S.C. § 1960(a). Subsection 1960(b)(1)(A)
defines an "unlicensed money transmitting business" as a money
transmitting business that:
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, whether or not the
defendant knew that the operation was required to be
licensed or that the operation was so punishable.
18 U.S.C. § 1960(b)(1)(A). Thus, we must look to the relevant state
law to determine whether § 1960(b)(1)(A) has been violated. See
United States v. Velastegui, 199 F.3d 590, 593 (2d Cir. 1999) (exam-
ining New York law under an earlier version of § 1960).
1
Section 1960(b)(1)(B) instead criminalizes a violation of the federal
registration requirements of 31 U.S.C. § 5330 and the regulations pre-
scribed thereunder. I agree with the majority that clear Congressional
intent to the contrary precludes us from construing § 1960(b)(1)(B) to
contain a mens rea element.
18 UNITED STATES v. TALEBNEJAD
During the October 21, 2001 to December 2002 period charged in
the indictment, Maryland has required money transmitting businesses
to be licensed. See Md. Code Ann., Fin. Inst. § 12-405. Up until Octo-
ber 1, 2002, Maryland punished a violation of the licensing require-
ment as a misdemeanor. Md. Code Ann., Fin. Inst. § 12-424 (repealed
2002). On October 1, 2002, however, a new penalty provision
replaced the old, making it a felony to "knowingly and willfully" vio-
late the Maryland licensing requirement. Md. Code Ann., Fin. Inst.
§ 12-430 (emphasis added).
Despite the knowing and willful scienter elements required by the
amended Maryland statute, the majority reasons that due to language
added by 2001 amendments to § 1960, this intent need not be estab-
lished to convict under § 1960(b)(1)(A). The majority concludes that
the final phrase of § 1960(b)(1)(A)—"whether or not the defendant
knew that the operation was required to be licensed or that the opera-
tion was so punishable"—obviates the knowing and willful require-
ments of Maryland law. I cannot agree.
Under the plain language of § 1960(b)(1)(A), a crime is committed
only if the operation of the business without a license is "punishable
as a misdemeanor or a felony under State law." 18 U.S.C.
§ 1960(b)(1)(A). Since October 1, 2002, operating a money transmit-
ting business without a Maryland license can be "punished" as a mis-
demeanor or felony only if the violation was knowing and willful. It
necessarily follows that these scienter elements must be established
before a defendant’s conduct will qualify under § 1960(b)(1)(A) as
"punishable as a misdemeanor or a felony under State law." Just as
there can be no violation of § 1960(b)(1)(A) where a state does not
require a license or does not penalize the lack of a license, there can
be no violation of § 1960(b)(1)(A) where the conduct at issue does
not satisfy the elements of the state misdemeanor or felony offense.
The last phrase of § 1960(b)(1)(A) does not nullify this express
requirement of the law. Rather, this language clarifies how the 2001
amendments to § 1960 changed the scienter requirements of the fed-
eral offense. Prior to 2001, a violation of § 1960(b)(1)(A) only
occurred if there was an "intentional[ ]" violation of the state licensing
law. See 18 U.S.C. § 1960 (2000) (amended 2001). Thus, even in
states that had no mens rea requirement, the federal statute supplied
UNITED STATES v. TALEBNEJAD 19
its own scienter requirement for the federal offense. The amended
language of § 1960(b)(1)(A) makes clear that federal law no longer
supplies an intent requirement; in states that do not require scienter
for a misdemeanor or felony conviction, scienter is not necessary for
a § 1960(b)(1)(A) conviction. The last phrase of the statute simply
does not speak to the situation here, where it is state law that requires
mens rea.
For these reasons, I would hold that the Government must prove
a knowing and willful violation of Maryland’s licensing law for con-
duct occurring after October 1, 2002.2 As written, the indictment fails
to allege a knowing and willful violation of the Maryland licensing
law for activities after that date and omits those scienter requirements
from its recitation of the Maryland law. See J.A. 16 ("since October
1, 2002, it was a felony under Maryland state law, as codified in MD.
CODE ANN., Financial Institutions, Title 12, Subtitle 4, Section 12-
430, to operate a money transmittal business without such a license.").
I would therefore affirm the dismissal of the indictment.
II.
Also before us is whether § 1960(b)(1)(A) and (B) are constitution-
ally infirm to the extent that they fail to require a knowing violation
of the relevant licensing and registration requirements.3 The Talebne-
2
Because I believe the obligation to prove a knowing and willful viola-
tion of Maryland’s licensing law is clear from the plain language of
§ 1960(b)(1)(A) and the Maryland law it references, I reject the Talebne-
jads’ argument that § 1960(b)(1)(A) is void for vagueness. See United
States v. Klecker, 348 F.3d 69, 71 (4th Cir. 2003) ("The void-for-
vagueness doctrine requires that penal statutes define crimes so that ordi-
nary people can understand the conduct prohibited and so that arbitrary
and discriminatory enforcement is not encouraged.") (internal quotation
marks omitted). Even if the different scienter requirements made the stat-
ute ambiguous, I would reach the same result through applying the rule
of lenity. See United States v. Lanier, 520 U.S. 259, 266 (1997) (holding
that the rule of lenity "ensures fair warning by so resolving ambiguity in
a criminal statute as to apply it only to conduct clearly covered"). A
knowing and willful violation of Maryland’s licensing law would be
clearly covered by both of the possible interpretations of the provision.
3
As noted above, I would not find scienter to be required for conduct
prior to October 1, 2002 under § 1960(b)(1)(A), and I agree that scienter
is not required under § 1960(b)(1)(B).
20 UNITED STATES v. TALEBNEJAD
jads argue that to expose an individual to criminal liability for morally
blameless activity (such as operating a money transmitting business),
due process requires that the Government prove that the individual
knew that he or she was in violation of a law or regulation. Although
I join the majority in rejecting this facial constitutional challenge, I
write separately to express my concern about the constitutionality of
§ 1960(b)(1)(A) and (B) in some circumstances.
Although Congress has "wide latitude" to "declare an offense and
to exclude elements of knowledge and diligence from its definition,"
Lambert v. California, 355 U.S. 225, 228 (1957), this power is not
without constitutional limits. See United States v. Foley, 598 F.2d
1323, 1335 (4th Cir. 1979) ("[T]here are undoubtedly due process
restrictions on the legislature’s power to define certain conduct as
criminal absent particular scienter requirements."). In Lambert, the
Supreme Court squarely confronted these boundaries and held that
due process places limits on the application of the principle that "ig-
norance of the law will not excuse." 355 U.S. at 228. In that case, the
ordinance at issue made it a crime for a felon to remain in Los Ange-
les for more than five days without registering with the police. Id. at
226. The Court overturned the defendant’s conviction, reasoning that
the defendant, who did not know of the registration ordinance, lacked
notice that her conduct amounted to a crime, as required by due pro-
cess. Id. at 228. Specifically, nothing about the defendant’s passive
conduct of being present in Los Angeles after having been convicted
of a felony suggested the need to inquire about a registration require-
ment. Id. at 229.
Following the reasoning of Lambert, I agree that the two provisions
of the present statute are not facially unconstitutional. See United
States v. Salerno, 481 U.S. 739, 745 (1987) (to establish that a statute
is unconstitutional on its face, "the challenger must establish that no
set of circumstances exists under which the Act would be valid"). The
statute here requires that one must "knowingly conduct[ ], control[ ],
manage[ ], supervise[ ], direct[ ], or own[ ] all or part of an unli-
censed money transmitting business" to be convicted. 18 U.S.C.
§ 1960(a). In many cases, activities such as conducting and control-
ling a money transmitting business would provide "circumstances
which might move one to inquire as to the necessity of [licensing and]
registration." See id. at 229 (distinguishing the Lambert ordinance
UNITED STATES v. TALEBNEJAD 21
from licensing statutes that regulate business activities). That is, the
individual’s direct and knowing involvement in operating the money
transmitting business would usually provide adequate notice that his
or her conduct might be regulated by the law.
However, I am concerned that in certain circumstances, the con-
duct covered by the statute might not provide constitutionally suffi-
cient notice of possible regulation. For example, under the statute, a
person who knowingly owns just five percent of a money transmitting
business is covered by the prohibition. Such a person would be sub-
ject to up to five years’ imprisonment for the business’s noncompli-
ance with the licensing, registration, or regulatory requirements. In
my view, a significant due process question exists regarding whether
the individual’s conduct would provide notice of a possible crime.
Owning a small stake in a business does not require involvement in
the business activity. Indeed, it may well be greatly attenuated from
the operation of the enterprise. In such a case, minimal ownership
resembles the passive conduct proscribed by the flawed Lambert ordi-
nance, raising a question as to whether the individual’s conduct pro-
vides the notice required by due process. No doubt other
circumstances could raise similar constitutional doubts, given the
breadth of the statute. I would therefore leave open the question of
whether certain situations could give rise to a successful as-applied
challenge to § 1960(b)(1)(A) or (B).
III.
For the reasons stated, I would affirm the dismissal of the indict-
ment. Moreover, although I agree that the charged provisions of
§ 1960 are not facially unconstitutional, I would leave for another day
the question of whether § 1960(b)(1)(A) and (B) are unconstitutional
in certain circumstances. I concur in the decision to dismiss the Taleb-
nejads’ cross-appeal.