Olivet University “Pled Guilty to Conspiracy to Commit Money Laundering”; Newsweek Reported That as “Pleaded Guilty to Money Laundering”

From Friday’s decision in Olivet Univ. v. Newsweek Digital LLC, by Second Circuit Judges Guido Calabresi and Sarah Merriam, and District Judge Jed Rakoff (S.D.N.Y.):

For purposes of our de novo review, we accept the following allegations of the operative Amended Complaint as true. “Olivet is a private religious institution consisting of multiple colleges” with “campuses across the United States,” founded by Dr. David Jang in 2004. Olivet had “close ties to” Newsweek from 2013 to 2018; several individuals in leadership at Newsweek’s parent company at the time, IBT Media Inc., were affiliated with Olivet.

In 2018, IBT Media was “facing an investigation by the Manhattan District Attorney’s Office relating to” financial matters. Olivet was under investigation in 2018 as well, and on October 31, 2018, a grand jury issued a 16-count indictment charging Olivet, its Trustee William Anderson, IBT Media, and others with a scheme to fraudulently “obtain financing from financial institutions, divert the proceeds of the financing and conceal its origins in order to fund … needs unrelated to the stated purpose of the financing, and maintain a credit profile sufficient to continue” the scheme. Anderson, Olivet, and others were also charged with laundering the proceeds of that scheme.

Anderson pled guilty to money laundering in the second degree and to participating in a scheme to defraud in the first degree. On February 11, 2020, Olivet … pled guilty to (a) Count 4 of the indictment, charging it with felony falsification of business records in the first degree; and (b) a lesser included charge of Count 3 of the indictment, specifically, conspiracy in the fifth degree, a misdemeanor. Count 3 of the indictment charged Olivet and others with conspiring to commit “Money Laundering in the Second Degree,” a class C felony. Under the terms of Olivet’s plea agreement, the felony falsification of business records charge was eventually reduced to a misdemeanor, and all remaining counts of the indictment, except for the conspiracy charge, were dismissed.

On July 2, 2022, Newsweek published an online article written by Jamali titled: New York Shuts Down Olivet University Amid Federal Money-Laundering Probe (the “2022 article”). The 2022 article discussed a Department of Homeland Security (“DHS”) investigation into whether Olivet-founder Jang and his followers were “part of a scheme to launder money for criminals in China and the United States.” The article stated, in relevant part: “Olivet University was thrust into the national media spotlight in 2018 when the Manhattan District Attorney announced indictments in a fraud and money laundering probe unrelated to the current federal investigation. Olivet pleaded guilty to money laundering, as did several of Jang’s followers and companies they ran.”

On March 28, 2023, Newsweek published an online article co-authored by Jamali and Alex Rouhandeh titled: California Moves to Shut Down David Jang’s Olivet University as Feds Circle. This article reported on an investigation undertaken by the California Attorney General into Olivet’s alleged “violations of education regulations.” It also gave a brief overview of DHS’s “unrelated investigation into whether Olivet laundered money,” and noted twice that Olivet had “pleaded guilty in 2020 to a money laundering charge.”

Olivet filed this action against Newsweek and Jamali asserting one count of defamation per se based on the statement contained in both articles that Olivet had “pleaded guilty to money laundering,” asserting that it had in fact pled guilty only to falsification of business records in the first degree and conspiracy in the fifth degree….

Olivet has failed to plausibly allege that the challenged statement is false. As the District Court correctly concluded, although Olivet pled guilty to conspiracy to commit money laundering, as opposed to substantive money laundering, “such technical inaccuracies, especially in the inherently complicated context of criminal law, cannot be the basis of a defamation claim where the substance of the reported [charge] would ‘not have a different effect on the mind of the reader from that which the pleaded truth would have produced.’” Indeed, under New York law, a conspiracy is simply “an agreement to commit an underlying substantive crime”—here, money laundering—”coupled with an overt act committed by one of the conspirators in furtherance of the conspiracy.” Olivet pled not just to some vague, conceptual “conspiracy” but to a series of detailed statements regarding the purpose and means of that conspiracy. In this case, “the truth is so near to the facts as published that … no legal harm has been done.” …

[Moreover,] New York law provides that “[a] civil action cannot be maintained against any person, firm or corporation, for the publication of a fair and true report of any judicial proceeding ….” “New York courts adopt a liberal interpretation of the ‘fair and true report’ standard of § 74 so as to provide broad protection to news accounts of judicial proceedings. A statement is deemed a fair and true report if it is substantially accurate, that is if, despite minor inaccuracies, it does not produce a different effect on a reader than would a report containing the precise truth.” Whether Olivet pled guilty to substantive money laundering or to a conspiracy to commit money laundering is a nuance lost on most readers, and “[n]ewspapers cannot be held to a standard of strict accountability for use of legal terms of art in a way that is not precisely or technically correct by every possible definition.”

We have little trouble concluding that any inaccuracy in Newsweek’s reporting would “not produce a different effect on a reader than would a report containing the precise truth.” See also Tacopina v. O’Keeffe (2d Cir. 2016) (summary order) (finding that the fair report privilege barred plaintiff’s defamation claims because “the inaccuracies in the Article would not have meaningfully impacted reader perception, and stemmed simply from an inability to perfectly comprehend legalese”).

Of course, I know what you’re thinking: Is it “pleaded guilty” or “pled guilty”? Horace and I will tell you.

Cameron Stracher and Sara Tesoriero (Cameron Stracher, PLLC) represent defendants.

The post Olivet University “Pled Guilty to Conspiracy to Commit Money Laundering”; Newsweek Reported That as “Pleaded Guilty to Money Laundering” appeared first on Reason.com.

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