## Facts

- An interstate prostitution operation known as the “Gold Club,” run by Susan Powell, operated from two Martinsburg, West Virginia motels at different times.
- Surendra D. (“Sam”) Singh owned the Economy Inn; Jalaram, Inc. owned the Scottish Inn, which was managed by Dilipkumar (“Dan”) Patel.
- Prostitutes rented rooms at discounted rates under arrangements tied to prostitution proceeds, including payment for rooms using earnings from early customers.
- The government alleged Singh, Patel, and Jalaram knowingly facilitated interstate prostitution and used motel room transactions to launder proceeds.
- A jury convicted each defendant of eight offenses: Mann Act conspiracy (18 U.S.C. § 371), five substantive Mann Act counts (18 U.S.C. § 2422(a)), money-laundering conspiracy (18 U.S.C. § 1956(h)), and one substantive promotion money-laundering count (18 U.S.C. § 1956(a)(1)(A)(i)).
- The jury also returned a forfeiture verdict of $670,720.36 and two motels.
- Post-verdict, the district court (i) vacated the money-laundering convictions and initially ordered a new trial, then (ii) entered judgments of acquittal on the money-laundering counts; it also granted Jalaram a new trial on its Mann Act convictions and vacated forfeiture as to Jalaram.
- The government appealed the acquittals and the new-trial/forfeiture rulings; Singh and Patel cross-appealed their Mann Act convictions and aspects of sentencing/forfeiture.

## Issues

1. Whether evidence that prostitutes paid motel room charges with prostitution proceeds proved “promotion” money laundering under 18 U.S.C. § 1956(a)(1)(A)(i) and supported related conspiracy liability under § 1956(h).
2. Whether the evidence was sufficient to sustain the Mann Act conspiracy and substantive Mann Act convictions against motel owner/manager defendants and a corporate motel owner under 18 U.S.C. §§ 371 and 2422(a).
3. Whether the district court erred by granting Jalaram a new trial on its Mann Act convictions and vacating forfeiture tied to those convictions.
4. Whether certain sentencing/forfeiture challenges were moot or otherwise outside appellate jurisdiction.

## Decision

- Affirmed the district court’s Rule 29 judgments of acquittal on the money-laundering conspiracy and substantive promotion money-laundering counts.
- Affirmed Singh’s and Patel’s Mann Act conspiracy and substantive Mann Act convictions.
- Reversed the order granting Jalaram a new trial on its Mann Act convictions and reversed the vacatur of forfeiture as to Jalaram to the extent tied to those Mann Act offenses.
- Dismissed parts of the appeals/cross-appeals involving issues rendered moot or not properly before the court.
- Remanded for further proceedings consistent with the opinion, including reinstatement of Jalaram’s Mann Act verdicts and related forfeiture and any necessary recalculations.

## Legal Principles

- Promotion money laundering under 18 U.S.C. § 1956(a)(1)(A)(i) requires proof of a financial transaction involving unlawful proceeds done with intent to promote the carrying on of specified unlawful activity.
- Transactions that merely pay routine or essential operating expenses of the underlying criminal activity, without a distinct promotional purpose, may be insufficient to constitute “promotion” money laundering.
- Evidence can support Mann Act conspiracy and substantive liability where defendants knowingly and intentionally assist an interstate prostitution venture by providing and structuring lodging arrangements connected to prostitution activity and its proceeds.
- A corporation may be held criminally liable for offenses committed by managerial agents acting within the scope of their authority and for the corporation’s benefit; the agent’s conduct and intent may be imputed to the corporation.
- Appellate courts may dismiss portions of appeals where subsequent rulings or remand-related adjustments render issues moot or nonjusticiable.

## Conclusion

The Fourth Circuit upheld convictions for conspiring to facilitate and facilitate interstate prostitution, including corporate liability based on a motel manager’s conduct, but rejected “promotion” money-laundering liability where the alleged laundering transactions were the same room-rental payments functioning as routine expenses of the prostitution scheme.


United States v. Singh, 518 F.3d 236 (4th Cir. 2008)