The Bonnie and Clyde of Crypto Laundering

Last week the Department of Justice arrested a husband and wife, Ilya “Dutch” Lichtenstein and Heather Morgan, and charged them in a massive cryptocurrency money laundering case. The government alleges the defendants were involved in laundering Bitcoin that was stolen in a 2016 hack of Bitfinex, a virtual currency exchange. At the time, the stolen Bitcoin was worth about $71 million; today it would be worth about $4.5 billion. DOJ also announced that law enforcement had seized about $3.6 billion of the stolen cryptocurrency, the largest financial seizure in the Department’s history.

Last October Deputy Attorney General Lisa Monaco announced the formation of the National Cryptocurrency Enforcement Team to strengthen DOJ’s ability to pursue and disrupt criminal activity in the crypto markets, including money laundering. This case is significant evidence of DOJ’s growing ability to trace illegal activities that use blockchain technology. Those who thought crypto markets and blockchain provide a safe haven for criminal activity may need to think again.

These defendants are not charged with the Bitfinex hack, only with the subsequent laundering of a portion of the stolen Bitcoin. Whether they were involved in the actual hack, and whether there are others involved in the attempted laundering, are just a couple of the questions left unanswered by the court filings thus far. It will be interesting to watch this one unfold.

Lichtenstein and Morgan
Lichtenstein and Morgan

Facts of the Case

Lichtenstein, 34, is a citizen of both Russia and the United States. He works as an entrepreneur and technology investor; one of his early companies was supported by the prestigious start-up funder Y-combinator. His wife Morgan, 31, is a U.S. citizen. She apparently wears many hats, promoting herself as an economist, entrepreneur, writer, rapper, artist, and social-media influencer. In a nice bit of irony, she once wrote an article for Forbes magazine about how to protect your business from cyber-criminals. At the time of their arrest the couple were living in Manhattan.

Bitfinex is a large virtual currency exchange, or VCE – a business that allows customers to buy, sell, and trade cryptocurrencies. In 2016, a hacker breached Bitfinex’s system and ultimately stole nearly 120,000 Bitcoin. The stolen Bitcoin were transferred to a digital wallet – basically a secure online account —  that, at least at the time of his arrest, was under Lichtenstein’s control. Starting in 2017, about 25,000 of the stolen Bitcoin were then transferred out of that wallet in a series of complicated transactions, with some of it ultimately ending up in accounts controlled by the defendants.

The criminal complaint alleges the defendants used a variety of methods to move the cryptocurrency around and ultimately have it end up under their control while trying to conceal its origins. These techniques included using computer programs to engage in thousands of transactions between multiple accounts; depositing and then withdrawing the funds at a variety of different VCEs and “dark web” markets; using accounts opened in the name of businesses and fictitious people; converting the Bitcoin to other cryptocurrencies that provide additional anonymity; and splitting large transactions into many smaller ones. Ultimately, according to the complaint, law enforcement traced the stolen funds through thousands of transactions to over a dozen different VCE accounts controlled by the defendants.

The complaint also recounts how on several occasions VCEs the defendants were using questioned them about the source of their funds, pursuant to various “know your customer” (KYC) and anti-money laundering (AML) obligations. The defendants allegedly lied, claiming the funds were the result of their legitimate investment and business activities or, in Morgan’s case, that the Bitcoin was a gift from her husband. On a few occasions, when the defendants could not provide satisfactory answers or when the true owners of accounts involved in the scheme could not be verified, the VCEs froze those accounts. This allowed law enforcement to later seize the funds, and likely directed their attention to these defendants.

In January of 2022, law enforcement officers used a search warrant to obtain access to Lichtenstein’s cloud storage account. They recovered an encrypted document that contained a list of 2,000 virtual currency addresses (basically online account numbers), along with the private keys to unlock those accounts. Virtually all of those accounts ended up being linked to the 2016 Bitfinex hack. In particular, the list included the information required to access the original wallet where the stolen Bitcoin was moved when the hack first took place. This allowed the government to seize that wallet and recover the $3.6 billion in Bitcoin that still remained there. The list also included accounts that different VCEs had frozen and that law enforcement has linked to the 2016 hack, with a notation “frozen” next to them.

The Charges

The complaint charges the defendants with one count of conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h), and one count of conspiracy to defraud the United States, in violation of 18 U.S.C. § 371.  The money laundering charge carries a maximum penalty of twenty years in prison, and the 371 conspiracy charge carries a maximum penalty of five years.

These are just the charges in the complaint to support the arrest warrant. Once the case is indicted, it’s likely prosecutors will add additional charges.

The government chose to arrest the defendants based on a complaint, rather than waiting until the case was indicted and issuing arrest warrants at that time. That was likely due to a desire to have the defendants detained as soon as possible to ensure they did not flee the country. Under the Speedy Trial Act, the government will now have thirty days from the date of arrest to obtain an indictment.

Money Laundering Basics

I’ve written about the basics of money laundering before, including posts here and here. The crime takes different forms. But the activity alleged in this case is heartland money laundering: taking “dirty” money and trying to clean it up so you can spend it without arousing suspicion. The blockchain technology is relatively new, but the basic laundering techniques are familiar.

(And as my students will attest, I can’t talk about the basics of money laundering without linking to the classic explanation by noted expert Saul Goodman.)

This kind of laundering charge requires the government to prove four elements:

1) The defendant conducted a financial transaction;

2) The defendant knew that the property involved was proceeds of criminal activity, or “dirty money”;

3) The property being laundered was in fact proceeds of a “Specified Unlawful Activity” (which includes a long list of federal crimes); and

4) The defendant knew the transaction was designed, in whole or in part, to conceal the nature, location, source, ownership, or control of the illegal proceeds.

In this case, the various transfers of Bitcoin and other cryptocurrencies through different accounts would constitute financial transactions. It appears that, by tracing the transactions back through the blockchain, the government can prove that the Bitcoin involved in at least some of those transactions was in fact taken in the Bitfinex hack. That would make it proceeds of an SUA, in this case wire fraud or the computer fraud and abuse act. That takes care of elements one and three. This case is likely to hinge, as so many do, on the evidence of the defendant’s knowledge – elements two and four.

The nature of the transactions would be substantial circumstantial evidence of an intent to conceal the nature, origin, and ownership of the proceeds. Just as when traditional money launderers run their funds through multiple bank accounts in different countries owned by shell corporations, the unnecessarily complicated transactions demonstrate a desire to make it difficult to determine where the funds originated. There’s generally no legitimate reason for such convoluted transactions, and so the very fact that the defendant engages in them is circumstantial evidence of intent to conceal.

The one element where the complaint is a bit light is the evidence that these defendants knew the Bitcoin in question was criminal proceeds. The complaint doesn’t allege they were involved in the initial hack, which would of course give them the requisite knowledge. It says the stolen Bitcoin ended up in a wallet ultimately controlled by Lichtenstein, but doesn’t specify exactly how that happened. When it comes to Morgan in particular, the evidence of her knowledge is actually quite thin. She may be able to defend by basically blaming everything on her husband.

The government is going to have to prove the defendants knew they were dealing with stolen Bitcoin. Once again, the convoluted nature of the transactions themselves can be circumstantial evidence of that knowledge. And clearly they knew the Bitcoin did not just magically appear in their accounts. Their lies to various currency exchanges about the origin of the crypto would be further circumstantial evidence of their knowledge that the money was dirty. And if necessary the government can rely on willful blindness to argue that the defendants deliberately closed their eyes to the fact that the Bitcoin in question was criminal proceeds.

The Conspiracy to Defraud the United States

The second crime charged in the complaint is conspiracy to defraud the United States in violation of 18 U.S.C. § 371. There’s no allegation of a monetary loss to the United States, which would be required for a traditional fraud. But this charge is based on the legal doctrine that one can conspire to defraud the United States by conspiring to impair, obstruct, or defeat the government’s lawful functions. This is the theory that was used, for example, to charge the Russians who conspired to interfere with the 2016 presidential election through social media and other methods – they were charged with conspiring to defeat the lawful functions of DOJ, the State Department, and the Federal Election Commission.

The theory here is that by lying to various virtual currency exchanges, opening accounts in fake names, and through their other laundering activities, the defendants impeded the lawful functions of the Treasury Department to monitor and maintain the integrity of the nation’s financial system and combat criminal activity. Bringing this charge strikes me as a little odd, because it is basically redundant of the money laundering charge – all money laundering, by definition, is designed to defeat those lawful government functions. I’m not clear why the government thought it needed to add this charge.

I’ll be watching to see if prosecutors expand on this theory once the case is indicted, or if the charge ends up getting dropped.

Protect your Passwords!

One surprising aspect of this case is how the government finally cracked it open. When announcing the charges, the government rightly trumpeted its impressive ability to trace thousands of complex transactions on the blockchain. But their big break in the case came from an old-fashioned source: a screw-up by the defendant. A search warrant of Lichtenstein’s cloud storage account discovered his spreadsheet listing all the crypto account addresses and private keys. That was what ultimately allowed the government to link the defendants to most of these accounts, including the one that still held $3.6 billion of the stolen Bitcoin.

This document was a classic “smoking gun” and finding it was a lucky break for the government. Even I, with my limited Boomer-era knowledge of crypto and blockchain technology, know that you never leave your wallet and key information in a cloud document that someone else might be able to hack. This is sort of the digital equivalent of the masked bank robber who hands the teller a stick-up note written on the back of one of his own business cards.

Okay, true, the file was encrypted, so it’s not quite that bad. But still, for someone as tech-savvy as Lichtenstein, this can only be considered a serious security breach and a real bone-headed move – one that will end up being very costly for him and his wife.

The Crypto Launderer’s Dilemma

Deputy Attorney General Monaco, when announcing the arrests, highlighted another important aspect of this case. The VCEs the defendants used in their alleged laundering activities are financial institutions subject to federal regulations, including AML and KYC rules. The defendants could move cryptocurrency around freely on the dark web and between different unhosted wallets, but ultimately if they wanted to cash out and convert it to dollars or other more readily-usable currencies, they had to deal with one of these regulated VCEs. And it was those VCEs, seeing to comply with AML and KYC rules, that led to some of the accounts being frozen and ultimately led law enforcement to the defendants’ door. As Monaco noted, if the government and reputable financial institutions work together, they can defeat a lot of attempted laundering activity.

Despite the new technology, therefore, these defendants still faced the classic money launderer’s dilemma: you can just sit on your money, but what fun is that? If you want to actually spend and enjoy it, at some point your activity will be detected. Indeed, this is the entire point of the crime of money laundering: trying to figure out a way to do that without attracting attention. Even with the new cryptocurrency technologies, for now, at least, this problem remains for the potential launderer — at least unless and until a lot more online merchants start accepting cryptocurrency as payment.

One of the flowcharts from the criminal complaint showing the path of the proceeds

Things to Watch

There are several interesting things I’ll be keeping an eye on as this case progresses.

Were they involved in the hack? 

The complaint doesn’t allege these defendants were involved in the initial hack that stole the Bitcoin from Bitfinex. It will be interesting to see when more blanks get filled in about the connection between these defendants and the hack itself, and how Lichtenstein ended up getting access to the wallet with the stolen Bitcoin.

One relevant detail is that the hack took place in 2016, which is now outside the five-year statute of limitations. Whoever was involved in that hack – whether it was these defendants or someone else – it may no longer be possible to charge them with that offense.

Why so slow? 

I’m curious why so much of the Bitcoin remained in the original wallet to which it was first transferred, allowing the government to seize back $3.6 billion of it. If the defendants were really aggressively laundering all of the funds, it seems like they could have spread much more of it around into different accounts over the past six years.

The headlines you’ve seen may claim the couple is charged with laundering $4.6 billion in Bitcoin, but the amount they are actually accused of laundering is only a fraction of that. That they may have laundered less than 20% of the stolen Bitcoin is kind of curious. It makes me wonder whether something else was going on – were they working for someone else? Were they authorized to transfer only small portions at a time, perhaps in payment for other services?  There has to be more to this part of the story.

Where Did the Money Go?

Typically in a case like this, you might expect to see the government alleging all of the flashy, expensive things the defendants purchased with their laundered funds – the boats, the art, the fancy cars and homes. There is very little of that in this complaint. There are some references to Lichtenstein using some of the Bitcoin to buy gold and NFTs (non-fungible tokens, a very trendy kind of digital art), but there are few specifics.

The most detailed allegations of where the money went are almost comical: the complaint describe how the defendants used some of the accounts funded with stolen Bitcoin to purchase gift cards for Walmart, Uber, and Play Station worth a few hundred dollars. This is hardly “Wolf of Wall Street” stuff.

According to court papers, there are still hundreds of millions in the stolen Bitcoin that are unaccounted for. Will we learn where it is? Do these defendants have access? The government claims they do – part of the reason prosecutors wanted them detained prior to trial is their fear that, with access to those millions, the defendants might flee the country.

Connecting More Dots

The complaint does a painstaking job of demonstrating that at least some of the crypto stolen in the initial hack ended up in accounts controlled by these defendants. It provides a lot less detail on how that actually happened and who made some of the various transfers. I’ll be watching for the indictment and future court developments to shore up the government’s allegations on this point, including whether any others were involved.

Warren Beatty and Faye Dunaway in 1967’s “Bonnie And Clyde”

Conclusion

This will be an interesting case to watch. I’m struck by the fact that, despite the new technologies involved, the challenges for the aspiring money launderer – and for the government in proving allegations of money laundering — remain largely the same. New wine in old bottles, or something like that.

In the meantime, there’s a Netflix series about the couple already in the works — because of course there is.

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Trump’s Inaction During the Capitol Riot as a Possible Crime

Representative Liz Cheney (R-Wyo), the vice-chair of the House Select Committee investigating the January 6, 2021 Capitol riot, recently raised some eyebrows with this question: “Did Donald Trump, through action or inaction, corruptly seek to obstruct or impede Congress’s official proceeding to count electoral votes?” The language of Cheney’s question tracks that of the obstruction of justice statute prosecutors have used to charge more than 200 Capitol rioters. Her suggestion that Trump’s failure to act might make him guilty of obstruction was particularly intriguing.

In a subsequent interview with the Washington Post, Committee Chair Bennie Thompson (D-Miss) expanded on the idea of Trump’s criminal liability based on his inaction. Thompson said the committee was exploring why, once the assault on the Capitol began, it took Trump more than three hours to ask his supporters to stand down. He said Trump’s “dereliction of duty” in failing to try to stop the riot could be a factor in whether the committee refers possible criminal charges against Trump to the Department of Justice.

These comments have led to some debate over whether Trump’s inaction during the riot, standing alone, could be a crime. I think the answer is: maybe. But it would be a novel and controversial criminal theory. The Department of Justice is unlikely to rely upon such a theory for something as consequential as the prosecution of a former president.

In any event, the theory is unnecessary. As I’ll discuss at the end of this post, there are plenty of potential crimes to investigate based on Trump’s actions, rather than his inaction. Trump’s failure to try to stop the riot best serves not as a stand-alone crime but as evidence of his intent for other potential charges.

Trump addressing the "Save America'" rally
Trump addressing the “Save America” rally before the riot

Trump’s Inaction on January 6

The theory that Trump’s inaction might be criminal focuses on his behavior once the assault on the Capitol began. Trump spoke that day for more than an hour to the unruly crowd at a rally outside the White House. He repeated his lies about the election being stolen, urging the crowd to march to the Capitol and “fight like hell” to save the country. He then retreated inside the White House and watched developments on television, while the crowd followed his command and headed to the Capitol.

The mob first breached police barriers outside the Capitol around 1:00 pm, and first broke into the building around 2:00 pm. For more than three hours, Trump – who was, let’s remember, still the president of the United States — did nothing to respond as his supporters assaulted police officers, broke windows and doors, desecrated the halls of Congress, and called out violent threats to Mike Pence, Nancy Pelosi, and others. Members of Congress who were under attack called Trump and his staff, pleading with him to call off the mob. Fox News hosts texted Trump’s chief of staff Mark Meadows, urging Trump to ask the rioters to leave the Capitol. Trump’s children also reportedly tried to persuade their father to try to call off the attack.

In response to these appeals, the president did nothing. According to witnesses, Trump appeared delighted when he saw the attack unfolding on television, believing that the mob was fighting for him. As the riot continued, Trump placed phone calls to Senators, still trying to persuade them to reject the certified election results.

Finally, his staff convinced Trump to release a video asking the rioters to leave the Capitol. They had to do several takes because he repeatedly veered off script and failed to ask the rioters to stop the attack. The statement the White House finally released did ask the rioters to leave. But Trump also said he understood their anger because, “We had an election that was stolen from us.” He concluded with, “We love you, you’re very special.”

Criminal Liability Based on Inaction

Could Trump’s failure to act for more than three hours be a crime? As a rule, criminal liability is based on action, not inaction. If I see a robbery taking place and do nothing to stop it, that does not make me criminally responsible for the robbery, even if I could have easily and safely prevented it. If I see an unconscious man lying on the railroad tracks and walk away as I hear a train whistle in the distance, I am not criminally liable for homicide. My behavior may be morally reprehensible, but my inaction does not make me guilty of a crime.  

But there is an exception to this rule if a person was under a legal duty to act. In rare cases, criminal liability can result from a failure to act in knowing violation of such a duty. It must be a clear legal duty, not just a moral or ethical one.

The duty to act can come from different sources. It can be based on a trusted or personal relationship, such as the duty of a parent to care for a child or the duty of a ship’s captain to protect the crew. Sometimes the duty can arise from a specific statute, such as laws making it a crime to fail to file your taxes. It may be based on contract; a lifeguard who willfully allows a swimmer to drown may be criminally liable for that failure to act. And if you create the situation that puts another person in danger, you may then have a legal duty to help that person avoid injury.

Trump sat by and gleefully watched the riot unfold but did nothing to intervene. That was an unconscionable violation of his responsibility as president. But to argue that his failure to act might actually be criminal, we would have to identify a legal duty on which to base his liability.

The U.S. Constitution

The Duty from the Take Care Clause

Some commentators have suggested that Trump had a duty to try to stop the riot based on the “Take Care” clause of the U.S. Constitution. Article II, Sec. 3 of the Constitution provides that the president “shall take Care that the Laws be faithfully executed.” If this obligation means anything, these commentators argue, it should include a duty to act when the Capitol is being attacked and democracy itself is under assault. The argument would be that Trump had a legal duty to act to protect the institutions of democracy and the “faithful execution” of the Electoral Count Act, the law governing Congress’s certification of the winner of the election.

Legal duties can arise not only from statutes but also from common law or other legal obligations. And there is some precedent for using Constitutional obligations to create a legal duty to act. For example, prison guards who stood by and did nothing to intervene while other guards assaulted a prisoner have been found guilty for their failure to act based, at least in part, on the Eighth Amendment’s prohibition of cruel and unusual punishment.

But not surprisingly, there is no precedent for using the Take Care clause to create a presidential legal duty that would support criminal liability. I think taking that step would be problematic. The constitutional obligation to faithfully execute the laws applies to essentially everything a president does; it’s basically the president’s job description. That generic command does not seem sufficiently targeted to give rise to a specific duty to act that would support criminal liability.

It’s easy to see how such a doctrine could be turned into a political weapon. For example, a president has a duty to see that laws related to disaster relief are faithfully executed. Suppose a hurricane strikes a state led by a governor who has been critical of the president. The president fails to authorize federal disaster aid in a timely way, and people die. That’s certainly a violation of the president’s duties, but could a future administration actually prosecute the president for homicide based on his failure to act? It’s true prosecutors would still have to prove criminal intent. But it would be far too easy for political opponents to turn virtually any presidential inaction into an alleged violation of the Take Care clause justifying prosecution. There’s no clear limiting principle.

Another difficult issue, at least in this case, would be causation. If the water conditions mean a lifeguard probably could not have saved a foundering swimmer, the lifeguard will not be responsible for failing to try. Similarly, prosecutors presumably would have to prove that Trump’s intervention would have been effective, so that his failure to act caused at least some of the harm. It’s not clear this is true.

For example, in the recent indictment of the Oath Keepers for seditious conspiracy, their leader Stewart Rhodes is quoted as messaging his followers, “All I see Trump doing is complaining. I see no intent by him to do anything. So the patriots are taking it into their own hands. They’ve had enough.” A riot has a life of its own, and by the time the mob breached the Capitol barriers things may have been beyond even Trump’s control.

It’s true that a number of people on that day apparently believed Trump had the power to call off the attack. But it’s not clear the mob would have listened. This is a far cry from stopping one assault or pulling one overboard sailor from the sea. He absolutely should have tried, of course. But in a criminal case prosecutors would have to prove beyond a reasonable doubt that Trump’s earlier intervention would have made a difference. I’m not sure they could do that.

In sum, although the argument for omission liability based on the Take Care clause has some intuitive appeal, I don’t love it as a matter of criminal law. And I think DOJ would be extremely unlikely to employ such a novel theory.

Creation of the Danger   

A better argument for Trump’s liability for failure to act might be based on the rule that one who creates a situation that puts another in danger may then have a duty to help that person avoid harm. The classic example is a defendant who deliberately sets a building on fire and then fails to help people trying to escape the flames. Here the argument would be that Trump was responsible for causing the riot, and having caused it, he had a legal duty to try to stop it.

This may be a better theory for omission liability. But it does require the prosecution to prove, in the first instance, that Trump intended to cause the riot. And if the government can prove that, then it can potentially charge Trump for a number of direct criminal acts, including for aiding and abetting obstruction of justice and seditious conspiracy. At that point, there is little need for the omission theory.

Some have suggested Trump would have a legal duty to intervene even if he did not intend for the riot to happen. But basing criminal liability (as opposed to moral liability) on a failure to act in response to a dangerous condition the defendant did not intend to create would be extremely aggressive. The first criminal prosecution of a former U.S. president is not the place where DOJ is likely to roll out such a theory.

Former president Donald Trump

The Best Use of Evidence of Trump’s Inaction

A former president clearly is subject to criminal prosecution for affirmative criminal acts while in office. But for dereliction of duty and egregious presidential failures to act, the usual remedy is impeachment and removal from office, or defeat in the next election. Trump was, of course, impeached for his role in the Capitol riot, although he was not convicted.

The evidence of Trump’s failure to act is indeed damning. But it will be most useful not as the basis for a criminal charge based on that omission, but as evidence of his intent that supports his prosecution for affirmative criminal acts.

In any prosecution of Trump for the Capitol riot, proving his intent would be the key. Did he really intend for his followers to storm the Capitol building following his incendiary speech? Did he intend to obstruct the Congressional proceeding that would certify Joe Biden as the winner of the election, whether via the assault, corrupt persuasion of Mike Pence, or by other means? If the government can’t prove corrupt intent on Trump’s part, there is no criminal case.

To prove intent, circumstantial evidence is often the key. Intent can be inferred based on a defendant’s actions. Here, as his followers stormed the Capitol, Trump watched it happen on television and appeared to be delighted. He resisted appeals from multiple sources to try to stop it. Even when he finally filmed his video message, he offered words of encouragement to the rioters and told them he loved them.

These are not the actions of a man who was misunderstood by his followers and is horrified by what they did. If the assault on the Capitol was not what Trump intended, any rational person would expect him to act immediately to try to stop it. That he failed to do so is evidence that he supported what was happening.

Federal District Court Judge Amit Mehta made a similar point recently during oral arguments on a motion to dismiss a civil lawsuit for damages filed against Trump by members of Congress and former Capitol police officers. “What do I do about the fact the president didn’t denounce the conduct immediately?” he wondered. “If my words had been misconstrued … and they led to violence, wouldn’t somebody, the reasonable person, just come out and say, wait a second, stop? . . . Isn’t that . . . enough to at least plausibly infer that the president agreed with the conduct of the people that were inside the Capitol that day?” 

This inference would apply equally in a criminal case. The facts surrounding the riot would not be in dispute; the entire case would come down to Trump’s intent and whether he is responsible. And in such a case, as Judge Mehta observed, a jury could reasonably conclude that if the riot was not what Trump wanted, he would have moved aggressively to try to stop it.

Stewart Rhodes, found of the Oath Keepers
Stewart Rhodes, Founder of the Oath Keepers

The Affirmative Crimes at Issue

So what are the most likely crimes by Trump that DOJ could be investigating based on his actions, rather than his inaction?

Obstruction of Justice, 18 U.S.C. § 1512 – This is the crime of corruptly attempting to obstruct the Congressional proceeding to certify the election. I wrote about that offense here. A number of federal district court judges have now upheld the charge and ruled that it does apply to the Capitol rioters. The maximum penalty is twenty years in prison.

Although not present during the riot itself, Trump could be found guilty of obstruction if the government established that he aided and abetted the assault on the Capitol by inciting or encouraging the rioters or by taking actions that helped them, such as withholding the deployment of additional law enforcement officers. Conspiracy to violate section 1512 carries the same 20-year penalty.

Seditious Conspiracy, 18 U.S.C. § 2384 — This statute makes it a crime for two or more persons to conspire to oppose the U.S. government by force, or “by force to prevent, hinder, or delay the execution of any law of the United States.” It provides a penalty of up to twenty years in prison.

On January 12, 2022 the Department of Justice indicted eleven members of the extremist group the Oath Keepers, including their founder Stewart Rhodes, for seditious conspiracy, obstruction, and other charges. This was the first time DOJ had used that charge in a January 6 prosecution.

Rebellion or Insurrection, 18 U.S.C. § 2383 — Provides a ten-year penalty for anyone who “engages in any rebellion or insurrection against the authority of the United States or the laws thereof, or gives aid or comfort thereto.”  It also provides for disqualification from holding public office in the future. Trump might be vulnerable here if any of his actions could be considered giving aid and comfort to the rioters.

Conspiracy to Commit an Offense, 18 U.S.C. § 371 This would apply if the government established that Trump entered into an agreement with others to violate any of the above statutes with the intent to further that criminal objective.

One benefit of a conspiracy charge is that the crime is the agreement itself. It does not require a co-conspirator to commit any other crime. So, for example, Trump could be liable for conspiring to obstruct the Congressional proceeding to certify the election even though he never set foot in the Capitol himself.

Conspiracy to Defraud the U.S., 18 U.S.C. § 371 — A different conspiracy theory prohibits conspiracies to defraud the United States, even in the absence of an agreement to commit a particular crime. This portion of the statute is violated if a defendant conspires to “impair, obstruct, or defeat” a lawful government function. This theory was used by special counsel Robert Mueller to indict the Russians who engaged in a social media campaign to influence the 2016 presidential election: Mueller indicted them for conspiring to impair the lawful functions of the Federal Election Commission, Department of State, and Department of Justice. Here, prosecutors could charge a conspiracy to obstruct or impede the lawful Congressional function of certifying the election results.

Conclusion: An Unlikely and Unnecessary Theory

Trump’s inaction during the riot is appalling. But dereliction of duty, standing alone, is not usually a crime. And prosecutors trying to turn that inaction into a crime would face a number of significant legal hurdles.

The best use of the evidence of Trump’s inaction is to prove his intent to commit affirmative criminal acts. There are plenty of potential crimes to choose from. That doesn’t mean a criminal case can be made, of course. But a case based on Trump’s actions stands a far better chance than a case based on his failure to act.

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