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Former Ukrainian prime minister files appeal in two-decade saga over laundered funds

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The Petitions of the Week column highlights a selection of cert petitions recently filed in the Supreme Court. A list of all petitions we’re watching is available here.

Volodymyr Zelenskyy, the president of Ukraine, has been much in the news for his visit to Washington, D.C., urging greater cooperation with the United States in response to the Russian invasion. But Zelenskyy is not the only Ukrainian leader making an appeal in the U.S. capital. This week, we highlight cert petitions that ask the court to consider, among other things, whether a former prime minister of Ukraine can protect a small portion of the hundreds of millions of dollars in his assets at stake in a pair of money-laundering lawsuits.

From 1996 to 1997, Pavel Lazarenko served as prime minister of Ukraine. He resigned amid swirling political intrigue and sought asylum two years later in the United States. But when Lazarenko stepped off the plane in New York in 1999, Federal Bureau of Investigation agents arrested him on the spot.

Since that day, the government has spent a great deal of time and effort pursuing Lazarenko for using his political influence as prime minister to set up various foreign bank accounts and business ventures to launder huge sums of money for personal gain. Federal prosecutors in California – where Lazarenko had hoped to reside in a sprawling mansion purchased before he fled Ukraine – charged him with 53 counts of money laundering, for which he was sentenced to three years in federal prison and ordered to forfeit $22 million. Meanwhile, the government filed a civil case in Washington to seize an additional $230 million in allegedly laundered funds.

A division exists in federal law between “tainted” and “untainted” property. The former is any property obtained through a crime and, following a conviction, belongs to the government. Under this statutory scheme, a court can only order a defendant to forfeit untainted property if the defendant has made the tainted property inaccessible.

Lazarenko argued that the government could not prove that $2 million of the $230 million it seized was tainted by any connection to his criminal convictions. In response, prosecutors in the criminal proceedings in California moved to substitute this $2 million for roughly the same amount that the government could no longer obtain from his laundered assets.

A California district court granted the prosecutors’ request, and the U.S. Court of Appeals for the 9th Circuit affirmed. Under the law governing tainted property, the 9th Circuit held, a court can order the forfeiture of “any other property of the defendant” – tainted or not – as a substitution for criminally obtained property squirreled out of the government’s reach.

In Lazarenko v. United States, the former prime minister asks the justices to overrule the 9th Circuit’s decision. He argues that the law permitting forfeiture of untainted property only kicks in when tainted property is inaccessible. If the government were really concerned about replacing the $2 million unavailable in his criminal conviction, Lazarenko contends, it would have tried to substitute some of the other $228 million in assets it restrained. What the government cannot do, Lazarenko objects, is argue that he laundered the funds to justify their civil seizure only to claim they are eligible for substitute property in a criminal forfeiture.

A list of this week’s featured petitions is below:

Lomax v. United States
Issues: (1) Whether, pursuant to Kisor v. Wilkie, courts are obligated first to determine whether a sentencing guideline is ambiguous before affording deference to the Sentencing Commission’s commentary interpreting the guideline; and (2) whether courts may defer to the Sentencing Commission’s commentary to U.S.S.G. § 4B1.2(a)(2) that expands the guideline’s definition of “crime of violence,” which includes only specified completed offenses, to include inchoate offenses.

Lazarenko v. United States
Issues: (1) Whether property can be forfeited as substitute property under 21 U.S.C. § 853(p) without first determining whether it is “tainted” property that is derived from criminal activity or “untainted” property; and (2) whether untainted property can be forfeited when tainted property is available.

Bentley v. United States
Issue: Whether, when a defendant shows on collateral review under 28 U.S.C. § 2255 that a prior conviction is no longer a valid predicate offense under the Armed Career Criminal Act, a district court may deny resentencing on the basis of an alternative prior conviction that was not specifically identified by the government as an ACCA predicate at the original sentencing, or whether the court must instead order resentencing to give the defendant an opportunity to challenge the alternative prior conviction’s qualification as an ACCA predicate in a context where the government bears the burden.

Murray v. UBS Securities, LLC
Issue: Whether, following the burden-shifting framework that governs cases under the Sarbanes-Oxley Act of 2002, a whistleblower must prove his employer acted with a “retaliatory intent” as part of his case in chief, or whether the lack of “retaliatory intent” is part of the affirmative defense on which the employer bears the burden of proof.

Recommended Citation: Kalvis Golde, Former Ukrainian prime minister files appeal in two-decade saga over laundered funds, SCOTUSblog (Feb. 3, 2023, 3:22 PM),