U.S. v. Bucey

• Decision Date: 13 July 1989
• Docket Number: No. 88-1912,88-1912
• Citation: 876 F.2d 1297
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Wesley BUCEY, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1297

876 F.2d 1297

UNITED STATES of America, Plaintiff-Appellee, v. Wesley BUCEY, Defendant-Appellant.

No. 88-1912.

United States Court of Appeals Seventh Circuit.

Argued Jan. 11, 1989.

Decided June 8, 1989.

Rehearing and Rehearing En Banc Denied July 13, 1989.

Susan L. Satter, Chicago, Ill., for Wesley Bucey.

Anton Valukas, U.S. Atty., Chicago, Ill., David J. Stetler, Chief, Victoria J. Peters, and Howard M. Pearl, Deputy Chiefs, John S. Brennan, Asst. U.S. Atty., Criminal Receiving & Appellate Div., G. Roger Markley, Special Asst. U.S. Atty., Chicago, Ill., for U.S.

Before BAUER, Chief Judge, CUDAHY, Circuit Judge, and GRANT, Senior District Judge. ^*

CUDAHY, Circuit Judge.

Defendant-appellant Wesley Bucey was convicted of multiple related offenses arising out of an elaborate money laundering scheme designed to ostensibly "legitimize" the source of illegally obtained cash and to evade taxes. Bucey's conviction was based on a twelve-count indictment charging him with conspiracy, 18 U.S.C. section 371; mail and wire fraud, 18 U.S.C. sections 1341, 1343; failure to file currency transaction reports with the Internal Revenue Service ("IRS"), 31 U.S.C. sections 5313, 5322(b); causing false information to be provided to the IRS, 18 U.S.C. sections 2(b), 1001; and attempting to obstruct the administration of a grand jury, 18 U.S.C. section 1503. Bucey appeals his conviction on all counts. We affirm in part and reverse in part.

I.

This is a tale of an illicit money laundering enterprise engineered by defendant Bucey and Boston Witt, a former Attorney General of New Mexico. ¹ We shall chronicle the facts, keeping in mind that all evidence and permissible inferences must be taken in the light most favorable to the government. See United States v. Gimbel, 830 F.2d 621, 622 (7th Cir.1987).

Bucey and Witt orchestrated a scheme with dual objectives: money laundering and tax evasion. The money laundering aspect of the operation was designed to provide a method for converting cash from unlawful activities, such as narcotics trafficking, into ostensibly legitimate business income. To carry out this scheme, Bucey set up a tax-exempt organization called the "Huguenot National Church," which was the conduit through which money was laundered. ² Bucey and Witt charged a commission for these services rendered through the "church."

Bucey and Witt devised two methods for achieving the secondary objective of their scheme, tax evasion. First, they planned to use the Huguenot Church as a facade for directing their clients' illegally obtained cash overseas to the bank accounts of shell corporations. The clients could then spend this money in connection with the "business" of the foreign corporations, thereby avoiding taxation by the United States government. Bucey and Witt also arranged a second tax evasion strategem for persons seeking an illegal tax deduction to purchase art work through Bucey at an established price but to report the purchase at an inflated price through false documentation. Bucey would then accept the property as a sham donation to the Huguenot Church, enabling the purchaser to take an inflated charitable tax deduction.

Bucey and Witt's machinations were unveiled by an extensive undercover investigation. Undercover police officers, John and Don Smith, posed as drug dealers interested in laundering narcotics proceeds. In October 1985, Witt met the Smiths and advised them of a money laundering device by which they could transfer their cash overseas to a shell corporation and avoid paying taxes. Witt also discussed another mode of laundering the Smiths' cash through channels that would generate income purportedly earned by the Smiths for services provided to the Huguenot Church. All transactions would be supported by bogus documentation.

Following the October 1985 meeting, Witt contacted Bucey in Chicago and the two discussed the feasibility of exchanging the Smiths' cash for cashier's checks using the Huguenot Church account. Witt informed Bucey that the Smiths' cash was from a dubious source. Tr. at 221. On November 4, 1985, Witt met the Smiths in Las Vegas and discussed in more detail the money laundering operation. Witt explained Bucey's role in handling the cash and controlling the church's account. Witt proposed that the Smiths launder an initial deposit through a transaction conducted within the United States. Witt and Bucey viewed this as a step preparatory to generating cash for subsequent overseas transactions. See Tr. at 228. Witt instructed the Smiths to take their money to Chicago where Bucey would exchange it (minus a commission) for cashier's checks. Fraudulent documentation would identify the cashier's checks as income from business activities carried out by the Smiths on behalf of the church. ³ An agreement was made to conduct an initial transaction involving $50,000 at Freedom Federal Savings and Loan ("Freedom Federal") in Chicago on January 6, 1986.

Witt and Bucey met the Smiths in Chicago on January 6 to carry out the laundering transaction at Freedom Federal. Prior to the transaction, Bucey and Witt received $8,000 as part of their 20% commission. Bucey and Don Smith then approached the teller, Smith counted the money, $42,000, and Bucey deposited it into the Huguenot Church account, informing the teller that the money was for medicine and supplies for Mexico earthquake victims. Bucey then drew a check on the church's account for $40,000 to pay for two cashier's checks that were given to the Smiths; $2,000 remained in the church account. ⁴ Bucey completed a Currency Transaction Report ("CTR") describing the cash deposit. On the CTR form, Bucey listed himself as the "individual conducting the transaction with the bank," and listed the Huguenot National Church as the "organization for whom this transaction was completed." See Appellant's App. at 58. Nowhere did he identify the Smiths as the source of the money.

As a result of the January 6 transaction, Bucey had converted $50,000 of the Smiths' purported drug proceeds into $40,000 in cashier's checks supported by false documentation legitimizing its source. While Bucey and Witt understood that the Smiths would be required to pay taxes on the $40,000, the remaining $10,000 of the Smiths' narcotics income would be unreported.

On January 23, 1986, Bucey and Witt arranged a similar transaction involving Dembitz, a third government agent posing as a drug-trafficking associate of the Smiths. The transaction was carried out at Freedom Federal on February 20, 1986. Bucey deposited $84,000 in the church account and completed a CTR again listing himself as the "individual conducting the transaction" and the Huguenot Church as the "organization for whom this transaction was completed." See Appellant's App. at 60. Bucey then drew three checks totaling $80,000 on the Huguenot Church account in exchange for three cashier's checks in the same amount, which were given to Dembitz. Afterwards, the transaction was similarly documented by false invoices.

This second transaction resulted in Bucey's converting $100,000 of purported drug income into $80,000 supported by documentation legitimizing its source. The remaining $20,000 of Dembitz' drug income was to go unreported.

On April 24, 1986, Dembitz introduced Bucey to a fourth undercover government agent, Ahern, who posed as an investor seeking to avoid taxes through illegal deductions. Bucey advised Ahern of an art donation scam in which Ahern would purchase art with a check for an inflated price and receive 80% back as a kickback in cash. He described how Ahern could then donate the art to Bucey's church and report a charitable deduction for the inflated amount of his cancelled check. ⁵ When Dembitz expressed concern about excluding Witt from the deal, Bucey responded reassuringly that he and Witt "are a team as far as that goes." Government's Brief at 20; Government's Exhibit 8A, at 18. Bucey later discussed the art deal with Witt, who wanted to ensure that the transaction ran smoothly. Tr. at 764-65.

Witt was eventually arrested on charges involving cocaine trafficking. Thereafter, agent Dembitz notified Bucey by telephone that he had been served with a grand jury subpoena ordering him to produce documents relating to Bucey and the Huguenot Church. Bucey requested that Dembitz send him the subpoena. Bucey then advised Dembitz to rehearse his grand jury testimony with an attorney. Bucey instructed Dembitz that, "You will discuss with the attorney how you raised funds in dribs and drabs for the Huguenot Church and then went over--went over into Mexico and bought--bought goods for those earthquake victims with funds--you know, funds in Mexico, and that you got reimbursed--you brought in the money that you raised and got reimbursed for your out-of-pocket expenses by check from the Huguenot Church." Government's Brief at 22; Government's Exhibit 18A, at 4. In a later discussion, Bucey reiterated that Dembitz should adhere to the story that he had performed services on behalf of the church. Id. at 23; Tr. at 842.

Bucey's escapades led to a grand jury indictment on twelve counts: count 1--conspiracy; counts 2-5--mail fraud; counts 6-7--wire fraud; counts 8-9--failure to file CTRs in violation of 31 U.S.C. sections 5313 and 5322(b); counts 10-11--causing false information to be provided to the government in violation of 18 U.S.C. sections 2(b) and 1001; and count 12--attempting to influence, obstruct or impede the administration of a grand jury.

A jury convicted Bucey on all twelve counts. He was sentenced to five years' imprisonment on each of counts 1-9, to run concurrently, and two years' imprisonment on each of counts 10 and 11, to run concurrently with each other, but consecutively to the sentences on counts 1-9. On count 12, he was placed on probation for five years and fined $600.00. Bucey has appealed on all counts.

II.

A. Failure to File CTRs

Counts 8 and 9 charge, respectively,...