STATE OF NEW JERSEY VS. LING ZHOU (18-08-0622, CAPE MAY COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-1151-19
STATE OF NEW JERSEY,
Plaintiff-Respondent,
v.
LING ZHOU,
Defendant-Appellant.
_______________________
Argued October 26, 2020 – Decided February 23, 2021
Before Judges Fasciale and Susswein.
On appeal from Superior Court of New Jersey, Law
Division, Cape May County, Indictment No. 18-08-
0622.
Thomas M. Cannavo argued the cause for appellant
(Steven W. Hernandez, PC, attorneys; Thomas M.
Cannavo, of counsel and on the brief).
Jeffrey H. Sutherland, Cape May County Prosecutor,
argued the cause for respondent (Gretchen A.
Pickering, Senior Assistant Prosecutor, attorney; of
counsel and on the brief).
PER CURIAM
Defendant, Ling Zhou, appeals from her conditional guilty plea conviction
for financial facilitation of criminal activity, N.J.S.A. 2C:21-25(b)(2)(A).
Defendant challenges the April 24, 2019 order issued by Judge Sarah Beth
Johnson denying her motion to dismiss the indictment. After carefully
reviewing the record in light of the governing principles of law, we affirm.
We briefly summarize the evidence presented to the grand jury. In
January 2017, a real estate title agency, Seaboard Title Company, received a
fraudulent email that caused the agency to transfer funds from an escrow
account. Seaboard is located in Avalon, New Jersey. The escrow account
contained the proceeds of the sale of property in Avalon. Prior to closing, the
real estate agent for the seller, RJ Soens, instructed Seaboard to mail a cheque
for the proceeds of the sale in the amount of $788,477. Seaboard thereafter
received an email, purportedly sent by Soens, requesting that the proceeds be
sent instead by wire transfer. However, that email was not sent from Soens —
rather, the originating email address was nearly identical to Soens's save for a
subtle misspelling. Deceived into believing that Soens had sent new
instructions, Seaboard wired the proceeds of the sale to the Wells Fargo Bank
account referenced in the fraudulent email. That account, which was opened
and serviced at a branch in Santa Clara, California, was in the name of Happy
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Oceans, Inc. Defendant's signature is the only signature on that account. The
proceeds of the sale were transferred almost immediately from defendant's Wells
Fargo account to accounts outside the United States.
Law enforcement agencies in other States were investigating similar
fraudulent transactions involving defendant. In the course of those
investigations, defendant admitted to receiving large sums of money and sending
the money to foreign accounts. She admitted to investigators that she knew
some of the transferred funds were the result of fraudulent activity. She also
admitted to lying on multiple occasions to conceal fraudulent transactions.
Based on this evidence, a grand jury returned an indictment charging
defendant with first-degree financial facilitation of criminal activity, N.J.S.A.
2C:21-25(b)(2)(a); second-degree theft by deception, N.J.S.A. 2C:20-4; and
second-degree impersonation, N.J.S.A. 2C:21-17(a)(1). Defendant filed a
motion to dismiss the indictment arguing that New Jersey lacks jurisdiction to
prosecute her for these crimes. She also argued the State failed to present a
prima facie case for theft, financial facilitation of criminal activity, or
impersonation, and that the prosecutor failed to disclose clearly exculpatory
information to the grand jury. Judge Johnson denied defendant's motion,
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rendering an eight-page written decision. Defendant filed an emergent motion
seeking leave to appeal, which we denied.
Thereafter, defendant entered a conditional guilty plea to second-degree
financial facilitation of criminal activity. The State agreed to dismiss the
remaining counts in the indictment. The negotiated agreement recommended a
suspended sentence in the third-degree range. The plea agreement also allowed
defendant to preserve the right to appeal the order denying her motion to dismiss
the indictment. See R. 3:9-3(f).
In November 2019, defendant was sentenced in accordance with the plea
agreement to a non-custodial term of probation. Defendant's sentence runs
concurrently with a non-custodial sentence imposed in Minnesota stemming
from a conviction for similar criminal activity.
Defendant presents the following contentions for our consideration:
POINT I
THE COURT BELOW ERRED IN DENYING THE
DISMISSAL OF THE CHARGES IN THE
INDICTMENT DUE TO LACK OF TERRITORIAL
JURISDICTION AND EVIDENCE. THUS, THE
MONEY LAUNDERING CONVICTION SHOULD
BE VACATED AND DISMISSED WITH
PREJUDICE.
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POINT II
FAILURE BY THE STATE TO DISCLOSE
CLEARLY EXCULPATORY EVIDENCE TO THE
GRAND JURY REQUIRED DISMISSAL OF ALL
CHARGES IN THE INDICTMENT WITH
PREJUDICE. EVEN IF NOT EXCULPATORY, THE
EMAILS AND TEXTS WERE NECESSARY TO A
FAIR CONSIDERATION OF JURISDICTION BY
THE GRAND JURY.
We reject these contentions and affirm substantially for the reasons
expressed in Judge Johnson's thoughtful written opinion. We add the following
comments.
I.
Territorial Jurisdiction
As a general proposition, New Jersey may exercise jurisdiction only over
offenses that occur within its borders. State v. Sumilkoski, 221 N.J. 93, 101
(2015) (citing State v. Denofa, 187 N.J. 24, 36 (2006)). Territorial jurisdiction
nonetheless extends "to offenses committed partly outside of the State." Id. at
102 (quoting State v. Streater, 233 N.J. Super. 537, 543 (App. Div. 1989)). The
critical inquiry is whether there exists "a direct nexus to New Jersey." Ibid.(citing N.J.S.A. 2C:1-3).
N.J.S.A. 2C:1-3(a)(1) provides that "a person may be convicted . . . of an
offense committed by his [or her] own conduct . . . if [e]ither the conduct which
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is an element of the offense or the result which is such an element occurs within
the State." Furthermore, N.J.S.A. 2C:1-3(g) extends jurisdiction
[w]hen the result which is an element of an offense
consists of inflicting a harm upon a resident of this State
or depriving a resident of this State of a benefit, . . .
even if the conduct occurs wholly outside this State and
any property that was affected by the offense was
located outside this State.
In this instance, the sale of the property occurred in New Jersey, the
escrow account containing the proceeds of the sale was located in New Jersey,
the fraudulent email that induced the transfer of funds was received in New
Jersey, the victim of the criminal scheme was in New Jersey, the financial loss
suffered by the victim occurred in New Jersey, and the amount involved that
determined the gradation of the money laundering crime is the amount that was
stolen from the New Jersey escrow account. We view these circumstances as
sufficient to establish a direct nexus between defendant's criminal activity and
this State.
Defendant's reliance on the outcome in Sumilkoski is misplaced. In that
case, school officials chaperoned high school students from New Jersey on an
overseas trip. The school officials were accused of sexually assaulting the
students while abroad. Id. at 95–96. Although the physical acts constituting the
alleged sexual misconduct occurred entirely overseas, the prosecutor argued that
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an element of the sexual assault offense—the school officials' supervisory
authority over the students, N.J.S.A. 2C:14-2(c)(3)(b)—originated in New
Jersey. The Court rejected the State's argument, holding that supervisory
authority over the students was merely an attendant circumstance that did not on
its own confer jurisdiction. 1 Id. at 106–07. The Court concluded there was
insufficient nexus to this State because the alleged sexual conduct and the
result—the harm allegedly inflicted on the children by their adult chaperones —
occurred entirely outside the borders of New Jersey. Id. at 107.
As Judge Johnson aptly noted, the circumstances in the case before us are
quite different from those presented in Sumilkoski. The scheme to electronically
divert funds from the targeted New Jersey escrow account was effectuated by a
fraudulent email that was addressed to an escrow agent in this State. That email
resulted in the transfer of monies from the New Jersey-based account. We deem
it to be significant that the financial facilitation of criminal activity statute
provides that the grade of the offense is determined by the "amount involved."
1
N.J.S.A. 2C:1-14(h) defines an "[e]lement of an offense" as "conduct," "a
result of conduct," or "attendant circumstances." Conduct is defined as "an
action or omission and its accompanying state of mind, or, where relevant, a
series of acts or omissions." N.J.S.A. 2C:1-14(d). The term "attendant
circumstances" is not defined in the New Jersey Code of Criminal Justice statute.
Nor does the statute define the term "result of conduct."
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N.J.S.A. 2C:21-27(a) ("The offense defined in [N.J.S.A. 2C:21-25(b)]
constitutes a crime of the first degree if the amount involved is $500,000.00 or
more."). In the present case, the amount involved relates directly to the money
that was fraudulently diverted from the New Jersey escrow account, reflecting
the loss suffered by the New Jersey victim. In these circumstances, we believe
the "amount involved" element that determines the gradation of the crime is not
an "attendant circumstances" element comparable to the school officials'
supervisory capacity in Sumilkoski. Rather, we believe the amount involved is
tantamount to a "result" element for purposes of establishing territorial
jurisdiction. Cf. State v. Tringali, 451 N.J. Super. 18, 31 (App. Div. 2017)
("[T]he 'result,' consisting of the monetary harm to the victim, is an 'element' of
the crime of second-degree impersonation, within the meaning of the
jurisdiction statute, even though its function is to establish the grade of the
crime."). As Judge Johnson aptly noted, "the State has proffered prima facie
evidence not only that the victim . . . is a New Jersey entity[,] but also that the
property in question . . . was located in New Jersey before it was fraudulently
transferred to California." Cf. State v. Aloi, 458 N.J. Super. 234, 241 (App. Div.
2019) (finding that evidence of threats originating in Maryland but received by
the alleged victim in New Jersey was sufficient to support indictment for
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extortion and establish territorial jurisdiction). Put simply, unlike in
Sumilkoski, the harm in this instance occurred in New Jersey.
Furthermore, the act of sending the fraudulent email to New Jersey, which
accomplished its objective to precipitate the transfer of funds from the escrow
account, constitutes conduct that occurred both in this State and the point of
origin, California. 2 That email was an integral part of the criminal scheme to
siphon monies from this State and to spirit those funds to overseas accounts.
Given that criminal conduct occurred at least partly in this State, and caused
financial harm here, we conclude the State established a direct nexus sufficient
to hold defendant accountable under New Jersey criminal law.
II.
Prima Facie Case
We next address defendant's contention the State failed to present to the
grand jury sufficient proofs to establish a prima facie case of money laundering,
theft, and false personation. This contention lacks sufficient merit to warrant
extensive discussion in this opinion. R. 2:11-3(e)(2). An indictment is
presumed valid, see State v. Perry, 124 N.J. 128, 167–68 (1991), and should not
2
We recognize that defendant denies having sent that email. As discussed in
Section II, infra, the State presented ample evidence to establish a prima facie
case that defendant committed the theft.
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be dismissed unless "manifestly deficient or palpably defective," State v. Hogan,
144 N.J. 216, 229 (1996). See also Tringali, 451 N.J. Super. at 27 ("A trial court
should only dismiss an indictment on the 'clearest and plainest' grounds and only
when it is clearly defective.") (quoting State v. N.J. Trade Waste Ass'n, 96 N.J.
8, 18–19 (1984)). The scope of our review is narrow. We review the trial court's
determination of a motion to dismiss for a clear abuse of discretion. Aloi, 458
N.J. Super. at 238 (citing State v. Ferguson, 455 N.J. Super. 56, 63 (App. Div.
2018)).
The grand jury is tasked with "determin[ing] whether the State has
established a prima facie case that a crime has been committed and that the
accused has committed it." Hogan, 144 N.J. at 228. A prima facie case is much
less than the proof beyond a reasonable doubt standard necessary to sustain a
conviction. While a prima facie case requires "at least 'some evidence as to each
element' of the alleged crime," we have recognized that "the quantum of such
evidence 'need not be great.'" State v. Fleischman, 383 N.J. Super. 396, 399
(App. Div. 2006) (quoting State v. Schenkolewski, 301 N.J. Super. 115, 137
(App. Div. 1997)). In determining whether the prima facie standard is met,
"[t]he court should evaluate whether, viewing the evidence and the rational
inferences drawn from that evidence in the light most favorable to the State, a
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grand jury could reasonably believe that a crime occurred and that the defendant
committed it." State v. Morrison, 188 N.J. 2, 13 (2006).
As Judge Johnson explained in her opinion, the grand jury heard testimony
from a detective that following the receipt of the fraudulent email, Seaboard
Title transferred $788,477 to a bank account that belonged only to defendant.
Money was then electronically transferred almost immediately from defendant's
account to multiple foreign bank accounts. When defendant was asked by out-
of-state investigators about suspicious transactions, she admitted that she knew
some of the funds she had transferred from her account were the result of
fraudulent activity. Defendant also admitted to lying to conceal the fraud.
Viewed in the light most favorable to the State, and allowing for rational
inferences, this evidence was sufficient for the grand jury to reasonably believe
that defendant had committed financial facilitation of criminal activity,
impersonation, and theft by deception. Morrison, 188 N.J. at 13.
III.
Exculpatory Evidence
We also reject defendant's contention Judge Johnson erred by denying the
motion to dismiss the indictment on the grounds the prosecutor failed to present
clearly exculpatory evidence to the grand jury. Defendant portrays herself as a
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victim of a foreign conman referred to as "Gerald Moretti," with whom she had
a romantic relationship. She contends the grand jury should have been provided
with the voluminous emails and text messages between defendant and Moretti.
Judge Johnson did not abuse her discretion in reaching a contrary conclusion.
Prosecutors have a "limited [disclosure] duty" to disclose to the grand jury
evidence that both "directly negates the guilt of the accused and is clearly
exculpatory." State v. Hogan, 144 N.J. 216, 237 (1996). Evidence that directly
negates the guilt of the accused is defined as evidence that "squarely refutes an
element of the crime in question." Ibid. This does not include evidence as to
motive, which generally is not an element of a crime. Ibid.The second requirement, that evidence be clearly exculpatory, "requires
an evaluation of the quality and reliability of the evidence." Ibid. The evidence
"must be sufficiently reliable[,] bear some indicia of credibility in its own right[,
and] cannot require the grand jury to engage in significant credibility
determinations." State v. Evans, 352 N.J. Super. 178, 197 (App. Div. 2001).
Defendant presented Judge Johnson with a package of emails, text
messages, and an audio recording of defendant's interview with out -of-state
investigators. Because we affirm for the reasons explained in Judge Johnson's
written opinion, we need not in this opinion re-address defendant's arguments at
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length, much less describe each communication. We note the record shows that
Judge Johnson carefully reviewed these submissions before rendering her
decision.
Applying the principles established in State v. Evans, 352 N.J. Super. 178,
196 (2001), Judge Johnson examined the emails and text messages to determine
whether they were "sufficiently reliable and bear[] some indicia of credibility in
[their] own right without requiring the grand jury to engage in any credibility
determinations." Ibid. Judge Johnson concluded the emails and text messages
failed to meet that standard because the grand jury would be required to make a
credibility determination as to the authenticity and veracity of those
communications.
Judge Johnson characterized the emails and text messages as "a series of
disjointed communications, taken out of context and supported by a self-serving
statement, which do not establish that [d]efendant was an innocent and unwitting
actor in these events." The judge added that these communications neither
"affirmatively or unequivocally show that [d]efendant played no role in sending
the undisputedly fraudulent email to Seaboard; nor do they show that she
reasonably believed she had a valid or legal claim to the $788,000 transferred
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into her bank account—particularly when [d]efendant knew that similar, past
transfers were the result of fraudulent activity."
The judge also reviewed the recorded interview and found it demonstrated
defendant was aware, or should reasonably have been aware, she was a
participant in a fraudulent money transfer scheme. That interview also
confirmed she intentionally misrepresented the purpose of the transactions.
We agree with Judge Johnson's conclusion that the evidence submitted by
defendant was not clearly exculpatory. Evans, 352 N.J. Super. at 197. At best,
the text messages and emails show that defendant was motivated to commit the
offenses by her misguided devotion to Moretti. However, such evidence of
motive does not directly negate any element of the charged offenses and thus
was not required to be presented to the grand jury. Hogan, 144 N.J. at 235.
Affirmed.
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