U.S. v. Haun

• Citation: 90 F.3d 1096
• Decision Date: 19 July 1996
• Docket Number: No. 95-5974,95-5974
• Parties: 45 Fed. R. Evid. Serv. 195 UNITED STATES of America, Plaintiff-Appellee, v. J.T. HAUN, Defendant-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)

Page 1096

90 F.3d 1096

45 Fed. R. Evid. Serv. 195

UNITED STATES of America, Plaintiff-Appellee, v. J.T. HAUN, Defendant-Appellant.

No. 95-5974.

United States Court of Appeals, Sixth Circuit.

Argued June 6, 1996.

Decided July 19, 1996.

Jay I. Bratt (argued), U.S. Dept. of Justice, Kenneth L. Jost, Deborah S. Smolover, (on the brief), U.S. Dept. of Justice, Office of Consumer Litigation, Washington, DC, for plaintiff-appellee.

Jerry H. Summers (argued and briefed), Summers, McCrea & Wyatt, Chattanooga, TN, J.T. Haun, Federal Correctional Institute, Manchester, KY, for defendant-appellant

Before: KENNEDY and NORRIS, Circuit Judges; MATIA, ^* District Judge.

KENNEDY, Circuit Judge.

Defendant J.T. Haun appeals his convictions for mail fraud, conspiracy to commit mail fraud, and money laundering. Defendant challenges his money laundering convictions arguing that there was insufficient evidence to support his convictions and that the money laundering statute is unconstitutionally void for vagueness. He also argues that the District Court improperly admitted certain deposition testimony. Finally, with respect to his sentence, defendant challenges the District Court's calculation of his offense level. For the following reasons, we AFFIRM.

I. Facts

In late 1989, defendant, the operator of Auto World, a Tennessee car dealership, began purchasing automobiles from Ron Germadnik, an Ohio car dealer. Germadnik purchased used Chevrolet Caprices at auctions specializing in wrecked and theft-recovered vehicles. Germadnik separated the cars' bodies from their chassis and replaced the old bodies with new ones. Once rebuilt, the cars looked like new and the odometers reflected low mileages. These cars were titled in Ohio and the "self-assembled" notation on the title's "previous owner" line indicated that the cars had been rebuilt. During 1989 and 1990, Germadnik sold a number of rebuilt Caprices to Auto World. Germadnik told defendant how the Caprices were constructed and provided defendant with true information regarding the chassis' years and mileages.

Defendant and his salesmen Stanford Sharp and Ray Lewis subsequently sold these cars without disclosing to buyers that they were reassembled and that the chassis had mileages far in excess of the body mileages that were reflected on the odometers. Buyers typically paid Auto World a fee to obtain a Tennessee title for them. The Tennessee titles, however, did not bear the "self-assembled" notation so buyers could not learn from the titles that these cars had been rebuilt.

When one buyer wanted to obtain a Tennessee title on his own, defendant instructed Greg Goins, a car buyer for Auto World, to obtain an Ohio title that did not have the "self-assembled" disclosure. Goins then asked Gary Burkeen, a used car wholesaler doing business as Eighty-Eight Fleet, Inc., to "flip" that title for him. To satisfy that request, Goins supplied Burkeen with paperwork that showed that ownership of that vehicle was transferred from Auto World to Eighty-Eight Fleet, Inc. Although that transfer never occurred, the new Ohio title reflected "Auto World" rather than "self-assembled" as the previous owner.

A jury found defendant guilty on five counts of money laundering under 18 U.S.C. § 1956, five counts of mail fraud in violation of 18 U.S.C. § 1341, and one count of conspiracy to commit mail fraud in violation of 18 U.S.C. § 371. ¹

II. Discussion

A. Money Laundering Convictions

1. Sufficiency of the Evidence

Defendant challenges the sufficiency of the evidence to support his money laundering convictions under 18 U.S.C. § 1956(a)(1)(A)(i) on two bases. He contends that (1) the money laundering statute does not apply in the context of criminal offenses that do not involve narcotics; and (2) the trial evidence did not establish the elements of money laundering. We address each argument in turn.

a. Money Laundering Statute's Application to Nondrug-Related Offenses

Defendant's first argument is that the federal money laundering statute under which he was convicted, 18 U.S.C. § 1956(a)(1)(A), was intended to reach money laundering of proceeds of narcotics transactions, not nondrug-related transactions. Because defendant's activities did not involve narcotics, he argues that his convictions under that statute were improper. The District Court rejected defendant's argument based on the clear language of the statute. Reviewing the District Court's decision concerning the question of statutory interpretation de novo, Nixon v. Kent County, 76 F.3d 1381, 1386 (6th Cir.1996) (en banc), we too find defendant's argument to be without merit.

Section 1956(a) provides in relevant part:

(a)(1) Whoever, knowing that the property involved in a financial transaction represents the proceeds of some form of unlawful activity, conducts or attempts to conduct such a financial transaction which in fact involves the proceeds of specified unlawful activity--

(A)(i) with the intent to promote the carrying on of specified unlawful activity

...

* * *

shall be sentenced to a fine of not more than $500,000 or twice the value of the property involved in the transaction, whichever is greater, or imprisonment for not more than twenty years, or both.

The statute defines "specified unlawful activity" to include "any act or activity constituting an offense listed in section 1961(1) of this title." 18 U.S.C. § 1956(c)(7). Included among the offenses listed in § 1961(1) is mail fraud in violation of 18 U.S.C. § 1341, the statute under which defendant was convicted. Nothing in the plain language of the statute suggests that the mail fraud must have been drug related. Moreover, we have previously upheld the application of § 1956 in the context of nondrug-related offenses without discussion of the issue defendant raises here. See, e.g., United States v. Smith, 39 F.3d 119 (6th Cir.1994) (affirming money laundering convictions based on transactions in proceeds of mail and wire fraud that did not involve narcotics). We are satisfied that the plain language of the statute unambiguously makes mail fraud, whether or not related to drug transactions, a specified unlawful activity.

In that the statute is unambiguous, only a showing of congressional intent to exclude nondrug-related offenses from the scope of the money laundering statute would justify limiting the applicability of the statute, as defendant suggests, to financial transactions involving proceeds of narcotics trafficking. See Garcia v. United States, 469 U.S. 70, 75, 105 S.Ct. 479, 482, 83 L.Ed.2d 472 (1984). In surveying the legislative history of § 1956, we find no intent on the part of Congress to limit its scope to only offenses involving drugs. Nor has defendant identified any legislative history that evidences Congress' intent to exclude nondrug-related activity from the statute's purview. In fact, the legislative history reflects that although § 1956 was considered necessary to combat illegal narcotics conspiracies, it was also designed to reach financial transactions involving proceeds of a broad range of criminal activity. See 132 CONG. REC . S9938-05, S9985-87 (1986); HOUSE COMM. ON BANKING, HOUSING, AND URBAN AFFAIRS, COMPREHENSIVE MONEY LAUNDERING PREVENTION ACT , H.R. R EP. No. 746, 99th Cong., 2d Sess. 16 (1986); see also 136 CONG. REC . S9477-02, S9505 (1990); 136 CONG. REC . E3684-02, E3685 (1990).

Because the plain language of the money laundering statute confirms the conclusion that nondrug-related criminal activity may form the basis of a money laundering conviction and nothing in the statute's legislative history reflects Congress' intent to exclude nondrug-related offenses from the statute's scope, we reject defendant's challenge to the statute's application to his conduct.

b. Sufficiency of the Evidence

Next, defendant maintains that the evidence did not support his money laundering convictions under 18 U.S.C. § 1956(a)(1)(A)(i). The standard for a challenge to the sufficiency of the evidence is whether, taking the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt. United States v. Martin, 920 F.2d 345, 348 (6th Cir.1990) (citing Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 2789, 61 L.Ed.2d 560 (1979)), cert. denied, 500 U.S. 926, 111 S.Ct. 2038, 114 L.Ed.2d 122 (1991).

Defendant contends that because the record does not evidence his efforts to disguise the connection between the car trading transactions and the mail fraud activity, the record does not support his money laundering convictions. The defendant, however, was convicted under 18 U.S.C. § 1956(a)(1)(A)(i), not 18 U.S.C. § 1956(a)(1)(B). While a conviction under § 1956(a)(1)(B) may require proof of concealment or disguise, that evidence is not necessary for a conviction under § 1956(a)(1)(A). See 18 U.S.C. §§ 1956(a)(1)(A), (B); United States v. Jackson, 935 F.2d 832, 842 (7thCir.1991) (concluding that a conviction under § 1956 requires proof of either intent to promote a continuing criminal enterprise or a design to conceal the source of the funds).

Instead, to prove a defendant guilty of violating § 1956(a)(1)(A)(i), the government must prove that the defendant: (1) conducted a financial transaction that involved the proceeds of unlawful activity; (2) knew the property involved was proceeds of unlawful activity; and (3) intended to promote that unlawful activity. 18 U.S.C. § 1956(a)(1)(A)(i).

The government has clearly adduced sufficient evidence from which a rational jury could hold defendant criminally liable. The record evidence established that defendant's applications for titles misrepresented the vehicles as new, low mileage vehicles. Defendant used the titles to deceive buyers and sell the vehicles at a price that reflected their description as low mileage vehicles instead of vehicles with higher mileages and received checks representing proceeds of...