211 F.3d 826 (4th Cir. 2000), 99-4153, United States v. Butler

Docket Nº:99-4153 (CR-97-146-S).
Citation:211 F.3d 826
Party Name:UNITED STATES OF AMERICA, Plaintiff-Appellee, v. EDWARD R. BUTLER, Defendant-Appellant.
Case Date:May 03, 2000
Court:United States Courts of Appeals, Court of Appeals for the Fourth Circuit
 
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211 F.3d 826 (4th Cir. 2000)

UNITED STATES OF AMERICA, Plaintiff-Appellee,

v.

EDWARD R. BUTLER, Defendant-Appellant.

No. 99-4153 (CR-97-146-S).

United States Court of Appeals, Fourth Circuit

May 3, 2000

Argued: March 1, 2000.

Appeal from the United States District Court for the District of Maryland, at Baltimore.

Eric N. Smalkin, District Judge.

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COUNSEL ARGUED: Nathan Z. Dershowitz, DERSHOWITZ & EIGER, P.C., New York, New York, for Appellant. Barbara Slaymaker Sale, Assistant United States Attorney, Baltimore, Maryland, for Appellee. ON BRIEF: Victoria B. Eiger, DERSHOWITZ & EIGER, P.C., NewYork, New York; Andrew Shear, ALAN M. DERSHOWITZ, Cam-bridge, Massachusetts, for Appellant. Lynne A. Battaglia, United States Attorney, Baltimore, Maryland, for Appellee.

Before LUTTIG, WILLIAMS, and MOTZ, Circuit Judges.

Affirmed by published opinion. Judge Motz wrote the opinion, in which Judge Luttig and Judge Williams joined.

OPINION

DIANA GRIBBON MOTZ, Circuit Judge:

A jury convicted Edward R. Butler of one count of bankruptcy fraud, in violation of 18 U.S.C. § 152 (1994 & Supp. IV 1998) and five counts of money laundering, in violation of 18 U.S.C. § 1957 (1994). On appeal, Butler's principal contention is that his money laundering convictions cannot stand because they are based on the very same transactions that form the basis for his bankruptcy fraud conviction. Butler maintains that the funds involved in these transactions could not constitute "criminally derived property," as required by the money laundering statute, because these funds became "criminally derived" only after the fraudulent transactions were complete. Although we agree that the statute prohibits only the laundering of "criminally derived property," we must reject Butler's argument. At the time of the charged money laundering transactions, Butler had already concealed the funds from the bankruptcy trustee, and the funds that he laundered therefore were "criminally derived

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property." We also reject Butler's other arguments and so affirm his convictions and sentence.

I.

The government introduced evidence from which the jury could find the following facts. After filing for bankruptcy in July 1990, Butler settled a debt owed to him by the Rhema Development Corporation and its principals, Reverend and Mrs. Cornelius Showell, who were also in bankruptcy at the time. Butler had sold a funeral home to the Showells during the 1980's, and he had taken the note as part of the purchase price, with stock in the funeral home held as collateral. The Showells agreed to pay Butler a $350,000 settlement, with payments to be made into an escrow account for which the parties' attorneys would be joint signatories. Butler disclosed the settlement plan to his creditors, but he did not obtain the approval of the bankruptcy court.

Pursuant to this plan, the Showells paid $65,000 into the escrow account but fell behind in their payments. The parties then negotiated a new arrangement. On October 15, 1991, Butler released back to the Showells the $65,000 that had been held in escrow; the Showells then issued three checks: one for $100,000 payable to Butler, and two others, for $100,000 and $150,000 respectively, payable to James Adkins, an associate of Butler who had acquired an interest in the funeral home. Butler did not report any of these transactions to the bankruptcy trustee or his creditors.

Butler used the funds realized from the first $100,000 check, payable to him, for personal expenses; Adkins kept the funds from the second $100,000 check. The government alleged that Butler fraudulently concealed from the bankruptcy trustee the funds derived from both of these checks.

With respect to the remaining $150,000 check, Butler was alleged to have both concealed these funds from the bankruptcy trustee and laundered them. Upon receipt of this check, Butler caused Adkins to endorse it and transfer it to him. Butler then gave the check to Father Edward Miller, a trusted friend. Father Miller, apparently unaware of the origins of the check, held the funds realized from this check on Butler's behalf in bank accounts for over a year.

Between September 1992 and January 1993, Butler directed Father Miller to draw on the $150,000 in order to purchase four cashier's checks payable to Bishop Randolph Caines, a Philadelphia pastor and associate of Butler. These four transactions constitute the basis for Counts II through V of the indictment, which charge Butler with aiding and abetting money laundering in violation of 18 U.S.C. § 1957. Bishop Caines used a substantial portion of the money to open an account, over which Butler had control, at First Fidelity Bank in Philadelphia. In April 1993, Butler directed Alice Tatum, Bishop Caines' assistant, to purchase a cashier's check payable to"S. Lee Martin." This transaction became the basis for Count VI of the indictment, also charging Butler with aiding and abetting money laundering. The government alleges that the funds represented by this last check were eventually used to purchase a lien on Butler's house.

Count I of the indictment charges that, from on or about the date of the Rhema-Showell settlement until 1995, Butler fraudulently concealed from the bankruptcy estate the entire $350,000 received from the settlement.

Butler's first trial ended in a hung jury, but his second trial resulted in convictions on all six counts.

II.

Butler contends that we must reverse his convictions for money laundering because the funds used to purchase the five cashier's checks involved...

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