Federal Judge Dismisses 15 Convictions in Important Lazarenko Money Laundering Case

By Andrew Cochran

Yesterday, a federal judge threw out 15 of the 29 convictions in the case against former Ukraine Prime Minister Pavlo Lazarenko. The judge reaffirmed 14 of the convictions, mostly for money laundering and interstate transportation of stolen property. The same judge threw out 24 charges of the original 53-count indictment during the trial last year. The case, an extremely complex matter also involving Lazarenko's claims of assassination attempts against him and his claims for political asylum, is important for two reasons. First, Lazarenko was the first former head of state tried and convicted in the U.S. since Panamanian dictator Manuel Noriega's conviction in 1992, and thus the case strained U.S-Ukraine relations. Second, and more importantly in the terrorism context, this was the first money laundering conviction in the U.S. in which the alleged crimes took place outside the U.S., with the proceeds then deposited in San Francisco financial institutions, thereby supporting money laundering charges in the eyes of federal prosecutors. As one excellent article worth reading states, "If Lazarenko was convicted, it would give U.S. attorneys the authority to judge whether anyone anywhere had committed fraud or extortion under their own nation's legal code, and then to hold them accountable in U.S. courts, as long as their money had moved through ubiquitous dollar accounts." The convictions caused officials of foreign financial institutions to voice concern over extraterritoriality of the Bank Secrecy Act, as amended by the USA Patriot Act. One other interesting point about this case: the U.S. Attorney who gave the final go-ahead to indict Lazarenko was Robert Mueller, now the FBI Director. This continues to be an interesting case to follow as Lazarenko's attorney prepares an appeal for the federal appeals court, where he will certainly challenge the theory underlying the money laundering convictions.

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