United States v. Inco Bank & Trust Corporation
Docket: 87-3057
Court: Court of Appeals for the Eleventh Circuit; May 20, 1988; Federal Appellate Court
The appeal concerns whether a member of a criminal conspiracy can be convicted of conspiracy charges without committing any overt acts within the United States. The Eleventh Circuit affirmed that such a conviction is permissible. The case involves Inco Bank, a Cayman Islands bank charged with conspiring to defraud the United States by facilitating a money-laundering operation for narcotics proceeds. The indictment alleged that Inco Bank and others conspired to smuggle cash from the U.S. to the Cayman Islands and then return it to drug traffickers in a manner that concealed its source and avoided federal income taxes. Inco Bank argued for a not guilty verdict, claiming insufficient evidence of its involvement in the U.S. However, the court found that the conspiracy occurred partially within the U.S., rendering the bank's international law arguments irrelevant. The conspiracy was initiated by Tennessee lawyer Ronald Hedges and accomplice Gene Plemons, who engaged an undercover FBI agent posing as a drug trafficker to launder $400 million in drug money. They were introduced to Inco Bank's president, Christopher Bain, who offered the bank's services for a fee, thus implicating Inco Bank in the conspiracy. The plan involved coordinating with an airplane service to transport the drug money to the Cayman Islands for laundering. The conspiracy was ultimately disrupted when federal agents arrested the pilot during the operation. The government possesses the authority to prosecute all members of a conspiracy within U.S. territory, even if some conspirators never entered the U.S., as established in multiple case precedents. In this instance, the conspiracy originated in the U.S. and continued to operate there after Inco Bank's involvement, which was initiated with the knowledge that activities would persist in U.S. territory. Consequently, the government was empowered to prosecute Inco Bank. Inco Bank conceded that the district court had jurisdiction over it. Under Section 371, conspirators can be fined up to $10,000 or imprisoned for up to five years for conspiring to commit offenses against the U.S. Moreover, U.S. customs laws mandate that anyone transporting over $10,000 in cash must file a Currency and Monetary Instrument Report (CMIR), which the conspirators aimed to evade as part of their money-laundering scheme. Inco Bank argued that the district court should have directed a verdict based on perceived limitations of the government’s extraterritorial jurisdiction. However, the cited authorities did not support the claim that a conspiracy partly occurring within the U.S. could only be prosecuted under extraterritorial jurisdiction. In fact, relevant academic commentary suggests the opposite: such conspiracies can be prosecuted without relying on extraterritorial principles. Additionally, Inco Bank claimed reversible error for the lack of jury instructions that would allow acquittal if no acts were committed in the U.S. to further the conspiracy. The court indicated that such an instruction would contravene established law.