State v. Marias

463 N.J.Super. 526

233 A.3d 581

STATE of New Jersey, Plaintiff-Appellant,

v.Ian W. MARIAS, Defendant-Respondent.

DOCKET NO. A-2145-19T1

Superior Court of New Jersey, Appellate Division.

Argued telephonically April 20, 2020

Decided May 19, 2020

Frank J. Ducoat, Special Deputy Attorney General/Acting Assistant Prosecutor, argued the cause for appellant (Theodore N. Stephens II, Acting Essex County Prosecutor, attorney; Frank J. Ducoat, of counsel and on the brief).

Roy B. Greenman, argued the cause for respondent (Budin Greenman & Greenman, attorneys; Roy B. Greenman, Union, on the brief).

Before Judges Sabatino, Geiger and Natali.

The opinion of the court was delivered by

SABATINO, P.J.A.D.

We granted the State leave to appeal in this pending criminal case to address the grading aspects of the money laundering statute, N.J.S.A. 2C:21-23 to -29. The core and unresolved legal question is the meaning of the term "amount involved" in N.J.S.A. 2C:21-27, which calibrates the severity of the offense.

Specifically, N.J.S.A. 2C:21-27(a) prescribes that a defendant commits a first-degree money laundering offense if the "amount involved" is $500,000 or more. The crime is a second-degree offense if the "amount involved" is under $500,000 but equal to or more than $75,000. Lastly, it is a third-degree offense if the "amount involved" is under $75,000.

As this opinion explains, we hold that where, as here, a defendant is charged with engaging in a money laundering transaction prohibited by N.J.S.A. 2C:21-25(b), the "amount involved" is the fair market value of the property transferred in that transaction and any other transactions conducted as part of that common scheme. That fair market value is to be determined by the trier of fact. The value is not necessarily equal to or limited by the sum that the money launderer received in the illicit transaction(s).

Here, the motion judge correctly recognized the "amount involved" in the alleged money laundering transaction was not equal to or capped by the price of approximately $63,000 that defendant received in exchange for the stolen goods he conveyed to a buyer. However, subject to the ultimate trial proofs, we vacate the judge's preemptive determination that the "amount involved" could not reasonably be found by a jury to exceed $500,000. Consequently, we modify the judge's ruling and reinstate defendant's exposure to a possible money laundering conviction of first-degree severity.

I.

We summarize the pertinent allegations against defendant, with a caveat that the State has yet to present its proofs at a trial.

The State alleges that defendant Ian W. Marias stole merchandise from the warehouse of his next-door neighbor and employer, who is in the business of selling doors and door supplies, with the assistance of an accomplice named Adam Edwards (who later cooperated with the State pursuant to a plea bargain). The stolen goods had been obtained by the employer at a cost of about $878,000 but were estimated to have a retail value of about $4 million.

According to the indictment, Marias sold a portion of the stolen merchandise for about $63,000 to a buyer in New Hampshire. The buyer paid that money to a fictitious company created by Marias. The rest of the merchandise defendant kept at his grandmother's house.

Among other offenses, the indictment charged Marias with engaging in a money laundering transaction prohibited under N.J.S.A. 2C:21-25(b)(2)(a). That provision, in pertinent part, makes a person guilty of a crime if he or she:

(b) engages in a transaction involving property known or which a reasonable person would believe to be derived from criminal activity

....

(2) knowing that the transaction is designed in whole or in part:

(a) to conceal or disguise the nature, location, source, ownership or control of the property derived from criminal activity;

A conviction for money laundering carries with it a host of significant penal consequences. For example, a first-degree money laundering conviction requires the defendant to serve a presumptive term of fifteen years' imprisonment, including a period of one-third to one-half of the term that is not eligible for parole. N.J.S.A. 2C:21-27(a) ; N.J.S.A. 2C:44-1. The sentences for the underlying crime and for the money laundering must be served consecutively. N.J.S.A. 2C:21-27(c). A conviction of first-degree money laundering includes a fine of $500,000, N.J.S.A. 2C:21-27.2(a), whereas the lesser grades of the offense have lower prescribed fines.¹

The indictment charged Marias with a first-degree money laundering offense, under a theory that the "amount involved" exceeded $500,000. Marias moved to amend the indictment to charge only a third-degree offense, arguing that the $63,000 he received for the merchandise he was able to sell constituted the "amount involved." The State opposed the motion, arguing that the amount involved should include the unsold merchandise that was stolen, which it says was clearly worth more than $500,000.

The motion judge, sua sponte, conceived of and applied a mathematical formula to calculate the "amount involved" for grading purposes. The judge found that, if the State's proofs at trial were believed, the amount defendant had laundered was $283,500. The judge accordingly modified count three of the indictment from a first-degree to a second-degree money laundering offense.

The judge arrived at this figure by dividing the claimed retail value of the goods that defendant stole from the warehouse (approximately $4 million) by what the owner had paid for those goods ($878,000). By this calculation, the judge determined that the retail cost was 4.5 times what he regarded as the "wholesale" cost. The judge then multiplied the amount defendant realized on the sale of the goods (approximately $63,000) by 4.5 to arrive at a fair market value of $283,500. That calculated sum would place the "amount involved" within the second-degree range, above the third-degree cutoff of $75,000 but below the $500,000 first-degree threshold.

On appeal, the State contends the trial court's method calculated the maximum amount involved too low, while defendant argues the court set the maximum too high.

II.

A.

In State v. Harris, 373 N.J. Super. 253, 263, 861 A.2d 165 (App. Div. 2004), we explained that our money laundering statute in N.J.S.A. 2C:21-25 essentially criminalizes three distinct types of activities.

First, N.J.S.A. 2C:21-25(a) criminalizes the possession or transportation of property that a reasonable person would believe to be derived from criminal activity. Defendant in this case was not indicted under this provision.

Next, N.J.S.A. 2C:21-25(b) criminalizes two types of transactions involving property known to be derived from criminal activity.

N.J.S.A. 2C:21-25(b)(1) prohibits transactions intended to facilitate or promote the criminal activity. N.J.S.A. 2C:21-25(b)(2), meanwhile, bars transactions that attempt to conceal or disguise the nature, location, source, ownership, or control of the property derived from criminal activity.

"Promoting" the money laundering activity under subsection (b)(1) occurs when the funds derived from the criminal activity are plowed back into the criminal enterprise. By comparison, "concealing" occurs when the transaction involves hiding the proceeds acquired in the criminal enterprise. Harris, 373 N.J. Super. at 264-65, 861 A.2d 165. Thus, to convict a defendant under N.J.S.A. 2C:21-25(b), there must be two transactions: the underlying criminal activity and the transaction where the property is either used for promotion or concealment. Id. at 266, 861 A.2d 165.

For grading purposes, our State's money laundering statute uses the term "amount[s] involved" but does not define that term within its text. N.J.S.A. 2C:21-27. The four definitional provisions expressed in the statute at N.J.S.A. 2C:21-24² do not include it. The statute does instruct at N.J.S.A. 2C:21-27(a) that "[a]mounts involved in transactions conducted pursuant to one scheme or course of conduct may be aggregated" to determine the degree of the offense (emphasis added). Apart from that aggregation principle, the statute is otherwise silent about the term's meaning.

The legislative history does not enlighten us as to what the New Jersey Legislature exactly meant by the term "amount[s] involved." The legislative findings and declarations associated with the Act and codified in N.J.S.A. 2C:21-23 are uninformative in this regard.³

Some guidance of a more generic nature is supplied by N.J.S.A. 2C:1-14. Those general definitional provisions cover all portions of our Criminal Code, unless a different meaning is prescribed by a particular statute. Within those general definitions, subsection (m) of N.J.S.A. 2C:1-14 instructs:

m. "Amount involved," "benefit," and other terms of value. Where it is necessary in this act to determine value, for purposes of fixing the degree of an offense, that value shall be the fair market value at the time and place of the operative act.

[ (Emphasis added).]

We applied this general definitional provision in State v. Cetnar, 341 N.J. Super. 257, 263, 775 A.2d 198 (App. Div. 2001), in the context of the embezzlement statute, N.J.S.A. 2C:20-2. We held in Cetnar that N.J.S.A. 2C:1-14(m) requires an assessment of the value of the property involved at the time of the wrongdoing. Hence, the defendant's conduct in Cetnar in returning the funds he had embezzled did not limit the "amount involved" to the interest he could have earned on the funds while he possessed them. Id. at 263-64, 775 A.2d 198. Rather, the amount involved consisted of the value of the funds at the time they were stolen. Id. at 263, 775 A.2d 198.

The Model Criminal Jury Charge for money laundering includes the same principles. The charge instructs that "property means anything of value ... [and] includes any benefit or interest without reduction for expenses incurred .... Value means the fair market value of the property at the time and place of the...