U.S. v. Carucci

• Citation: 364 F.3d 339
• Decision Date: 13 April 2004
• Docket Number: No. 02-2198.,No. 03-1244.,No. 03-1158.,02-2198.,03-1158.,03-1244.
• Parties: UNITED STATES, Appellant, v. Michael L. CARUCCI, Defendant, Appellee, United States, Appellee, v. Michael L. Carucci, Defendant, Appellant, United States, Appellant, v. Michael L. Carucci, Defendant, Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (1st Circuit)

364 F.3d 339

UNITED STATES, Appellant, v. Michael L. CARUCCI, Defendant, Appellee, United States, Appellee, v. Michael L. Carucci, Defendant, Appellant, United States, Appellant, v. Michael L. Carucci, Defendant, Appellee.

No. 02-2198.

No. 03-1158.

No. 03-1244.

United States Court of Appeals, First Circuit.

Heard November 6, 2003.

Decided April 13, 2004.

Martin G. Weinberg, with who m Oteri, Weinberg & Lawson, were on brief, for Michael L. Carucci.

Demetra Lambros, Attorney, with whom Michael J. Sullivan, United States Attorney, Richard L. Hoffman, Assistant United States Attorney, and James D. Herbert, Assistant United States Attorney, were on brief, for the United States.

Before LIPEZ, Circuit Judge, CAMPBELL, Senior Circuit Judge, and STAHL, Senior Circuit Judge.

STAHL, Senior Circuit Judge.

Defendant-appellant Michael Carucci was a real estate broker and a business associate of Stephen Flemmi, the notorious leader of Boston's "Winter Hill Gang." Carucci and Flemmi were indicted on charges relating to money-laundering, but only Carucci's case was tried. Both during and after the jury trial, the district court, pursuant to Fed.R.Crim.P. 29, entered judgments of acquittal on dozens of the charged counts. Ultimately, Carucci was found guilty of two counts of engaging in monetary transactions in criminally-derived property in violation of 18 U.S.C. § 1957.

On appeal, Carucci contends that the evidence was insufficient to establish criminal liability under the statute, and challenges the trial court's "willful blindness" instruction to the jury. The government cross-appeals, contending that the district court erred in entering the post-verdict judgments of acquittal; in ordering a conditional new trial should the Rule 29 rulings be reversed; and in sentencing. For the reasons set forth below, we reverse Carucci's conviction on the two counts and affirm the district court's judgments of acquittal on the remainder.

I. BACKGROUND

A. Factual history

We set forth the facts underlying Carucci's convictions in the light most favorable to the verdict. See United States v. Diaz, 300 F.3d 66, 69 (1st Cir.2002).

1. 238 Marlborough Street

Carucci's company, Group Boston Real Estate, managed a building at 238 Marlborough Street in Boston. One of the owners of the property expressed interest in selling, and Carucci offered to help find a buyer. In 1991, Carucci submitted a bid from Flemmi. During the negotiations, the seller asked Carucci where Flemmi's money was coming from, and Carucci told them it was from lottery winnings. Flemmi, however, told others that the money was from a family trust. A few months after the sale, Carucci told the seller that the money had come from Flemmi's family.

In the course of the property sale, Carucci referred Flemmi to Anthony Summers, a real estate lawyer. At trial, Summers testified that in September, 1992, Carucci asked Summers whether he thought it would be a problem to sell real estate to Flemmi. Summers responded, "as long as he did everything legally, that I didn't think he'd have a problem."

On October 2, 1992, the Marlborough Street deal closed for $945,000. Carucci, Summers, and Flemmi, among others, attended the closing. The purchaser was a nominee trust set up by Summers, the "238 Marlborough Street Trust." The trustees were Carucci and one of Flemmi's sons, Stephen Hussey; Flemmi was the beneficial owner. Flemmi paid in cash with seven checks. The checks were drawn from different accounts, none of which bore Flemmi's name, and different banks. Three were payable to the Mary Irene Trust¹ (of which Flemmi was a trustee), three were payable to Mary Flemmi (Flemmi's mother) and one was payable to Jeanette Flemmi (Flemmi's ex-wife). In conjunction with the sale, Summers drafted a mortgage evidencing a $975,000 loan from the Mary Irene Trust to the 238 Marlborough Street Trust. The mortgage, on which Flemmi's name appeared, was publicly recorded.

Also on October 2, 1992, Flemmi and Carucci entered a joint venture agreement concerning the development and sale of the condominium units at 238 Marlborough Street. Carucci invested $15,000 of his sales commission into the joint venture, and Flemmi handled the remaining costs.

2. 362 Commonwealth Avenue

In mid-1992, another real estate broker told Carucci that 362 Commonwealth Avenue in Boston, a commercial condominium containing a laundromat, was available as an investment property. Carucci submitted an offer on the property signed by Hussey as trustee of SMS Realty Trust and provided a binder check for $1,000 signed by him and drawn on the account of Group Boston. He also participated in the sale negotiations.

According to the purchase and sale agreement, the purchaser of the property was Jeannette Benedetti, trustee of Comm-1 Realty Trust. The agreement was signed by Benedetti and Karen Snow, Flemmi's daughters. On October 26, 1992, Carucci signed over to the listing broker a check for $5,125 from the Mount Washington Bank payable to Group Boston to serve as a deposit.

At the property closing on December 9, 1992, three checks were tendered as payment: a Mount Washington Bank check in the amount of $30,500 and a Hyde Park Savings Bank check in the amount of $70,000, both payable to Benedetti, and a $16,408.37 Winter Hill Federal Savings Bank check payable to Summers & Summers.

Prior to the closing, in November, 1992, Commonwealth Laundries, Inc. was formed, with Carucci and Flemmi as the major stockholders. Jian-Fen Hu, Flemmi's girlfriend, was president, treasurer, clerk, and director. On December 11, 1992, Commonwealth Laundries entered into a lease of 362 Commonwealth Avenue with Comm-1 Realty Trust. Hu and Benedetti (as trustee) signed the lease. Commonwealth Laundries borrowed $120,000 from the Mary Irene Trust to purchase equipment and $110,000 from Flemmi for improvements.

At trial, Flemmi's other son, William St. Croix, testified pursuant to an immunity agreement about his many years of criminal activity. He also testified that he first met Carucci at his father's home in Milton, Massachusetts, in 1990 or 1991. At that time, Carucci told him he was going to broker the sale of the house. When St. Croix asked Carucci if he knew who his father was, Carucci responded, "Yes, everybody knows who your father is. Your father was the big guy." St. Croix testified that he visited Group Boston's offices "probably hundreds of times."

B. Procedural history

On March 11, 1997, a grand jury of the United States District Court for the District of Massachusetts returned a 103-count indictment against Flemmi and Carucci. It charged both defendants with conspiracy to commit money-laundering in violation of 18 U.S.C. § 1956(h); substantive money-laundering offenses in violation of 18 U.S.C. § 1956; transactions in criminally derived property in violation of 18 U.S.C. § 1957; and RICO conspiracy in violation of 18 U.S.C. § 1962(d). In May 2001, as part of a consolidated plea in another case, Flemmi pleaded guilty to an information that encompassed the money-laundering conspiracy charges and the charges against him in this case were dismissed.

In March and April, 2002, Carucci alone was tried before a jury. At the close of the government's case, pursuant to Fed.R.Crim.P. 29(a), the district court granted Carucci's motions for judgment of acquittal on counts 1, 14-66, and 76-103. It then submitted counts 2-13 and 70-75 to the jury. These counts charged violations of §§ 1956 and 1957 and concerned the laundromat venture. Specifically, counts 9-13 and 73-75 related to the purchase of the condominium, and counts 2-8 and 70-72 related to the purchase of the laundry equipment.

On April 16, 2002, the jury returned a verdict finding Carucci not guilty on the § 1956 counts (2-13) and guilty on the § 1957 counts (70-75). At a post-verdict hearing, the district court granted judgment of acquittal on counts 70-72 and 74, and provisionally granted a new trial on those counts. This left standing only the verdicts on counts 73 and 75, which concern, respectively, the December 9, 1992, transfer of a Mount Washington Bank check in the amount of $30,500 and a Hyde Park Savings Bank check in the amount of $70,000.

On December 20, 2002, the district court sentenced Carucci to ten months in the custody of the Bureau of Prisons, with a recommendation that Carucci serve his sentence in a community confinement center (CCC), followed by twenty-four months of supervised release. The same day, the Department of Justice announced that the Bureau of Prisons would no longer permit CCC placement for more than ten percent of the sentence imposed. On December 31, 2002, the district court revised the sentence to encompass five months' incarceration and five months' home confinement.

II. DISCUSSION

A. Carucci's challenge to his conviction under 18 U.S.C. § 1957

Carucci contends that there was insufficient evidence to convict him on counts 73 and 75, which charge him with engaging in monetary transactions in criminally-derived property in violation of 18 U.S.C. § 1957. We review Rule 29 determinations de novo. United States v. Boulerice, 325 F.3d 75, 79 (1st Cir.2003) (citing United States v. Carroll, 105 F.3d 740, 742 (1st Cir.1997)). We will affirm the conviction if, "after assaying all the evidence in the light most amiable to the government, and taking all reasonable inferences in its favor, a rational factfinder could find, beyond a reasonable doubt, that the prosecution successfully proved the essential elements of the crime." Id. (quoting United States v. O'Brien, 14 F.3d 703, 706 (1st Cir.1994)).

To establish a violation of 18 U.S.C. § 1957, the government must prove that (1) the defendant engaged or attempted to engage in a monetary transaction with a value of more than $10,000; (2) the defendant knew that the property involved in the transaction had been derived from some form of criminal activity; and (3) the property involved in the...