U.S. v. Sanders

• Decision Date: 19 March 1991
• Docket Number: No. 90-6030,90-6030
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Johnny Lee SANDERS, Defendant-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 940

928 F.2d 940

UNITED STATES of America, Plaintiff-Appellee, v. Johnny Lee SANDERS, Defendant-Appellant.

No. 90-6030.

United States Court of Appeals, Tenth Circuit.

March 19, 1991.

Susan L. Foreman, Asst. Federal Public Defender (Michael G. Katz, Federal Public Defender with her on the brief), Denver, Colo., for defendant-appellant Johnny Lee Sanders.

Robert E. Mydans, Asst. U.S. Atty. (Timothy D. Leonard, U.S. Atty., and D. Blair Watson, Asst. U.S. Atty., were on the brief), Oklahoma City, Okl., for plaintiff-appellee U.S.

Before McKAY and MOORE, Circuit Judges, and SAFFELS, District Judge. ^*

SAFFELS, District Judge.

Johnny Lee Sanders, defendant-appellant herein, was convicted in the United States District Court for the Western District of Oklahoma of violating 18 U.S.C. Secs. 922(g)(1), 1952(a)(3), 1956(a)(1)(B)(i), 1962(c), 1962(d) and 21 U.S.C. Secs. 841(a)(1), 843(b), 846 and 848. Defendant-appellant Sanders raises three contentions of error in this appeal. First, Sanders contends that cumulative evidentiary errors by the trial court (including evidence of uncharged crimes and an improper instruction) adversely affected his right to a fair trial. Second, Sanders challenges his convictions on racketeering charges on the ground that the evidence presented at trial was insufficient to establish the existence of a racketeering "enterprise." Third, defendant contends that his convictions for money laundering should be reversed because the government presented insufficient evidence of concealment or disguise in the two car purchase transactions upon which defendant's convictions were based. For the reasons stated below, we conclude that defendant's convictions under the money laundering statute should be reversed; we will, however, affirm the district court as to the remainder of the issues presented in this appeal.

I.

Johnny Lee Sanders was charged along with ten other individuals in a 60-count superseding Indictment filed on June 8, 1988. Of the 60 counts, 41 related to Sanders and of those 9 were dismissed before trial. On October 18, 1989, Sanders was tried on the following charges: one count of racketeering, in violation of 18 U.S.C. Sec. 1962(c) (hereinafter referred to as "RICO"), one count of conspiracy to commit RICO in violation of 18 U.S.C. Sec. 1962(d); one count of conspiracy to distribute heroin in violation of 21 U.S.C. Sec. 846; five counts of interstate travel in aid of racketeering in violation of 18 U.S.C. Sec. 1952(a)(3); eight counts of possession of heroin with intent to distribute in violation of 21 U.S.C. Sec. 841(a)(1); three counts of money laundering in violation of 18 U.S.C. Sec. 1956(a)(1)(B)(i); eight counts of distribution of heroin in violation of 21 U.S.C. Sec. 841(a)(1); three counts of phone facilitation in violation of 21 U.S.C. Sec. 843(b); one count of possession of a firearm after a conviction in violation of 18 U.S.C. Sec. 922(g)(1); and one count of continuing criminal enterprise in violation of 21 U.S.C. Sec. 848. The trial concluded on November 9, 1989. On November 13, 1989, a jury found Sanders guilty as charged except it acquitted him of the money laundering charge set out in Count 15 and the possession of heroin with intent to distribute charges set out in Counts 6 and 19. On January 11, 1990, Sanders was sentenced to 30 years imprisonment.

II.

Defendant contends that the trial court erroneously admitted evidence of uncharged crimes and evidence which was unfairly prejudicial. Defendant contends that the cumulative effect of these alleged errors, along with an allegedly erroneous limiting instruction, was to deprive him of a fair trial. Generally, a trial court's decision to admit evidence under Rule 404(b) of the Federal Rules of Evidence is reviewed under an abuse of discretion standard. See, e.g., United States v. Record, 873 F.2d 1363, 1373 (10th Cir.1989). Although one instance of error may not rise to the level of reversible error, the cumulative effect of two or more individually "harmless" errors may warrant reversal where the substantial rights of the defendant were affected. United States v. Rivera, 900 F.2d 1462, 1469-70 (10th Cir.1990) (citations omitted).

Upon review of defendant's contentions, we do not conclude on this rather extensive record that defendant's "cumulative effect" argument has any merit. Even assuming, arguendo, that evidence of approximately five different uncharged offenses was erroneously admitted by the trial court, generally either a limiting instruction was given in each instance (presumptively curing any prejudicial impact on defendant, United States v. Peveto, 881 F.2d 844, 859 (10th Cir.), cert. denied, Hines v. United States, --- U.S. ----, 110 S.Ct. 348, 107 L.Ed.2d 336 (1989)), or the defendant failed to object to the testimony being offered, which operates as a waiver. With regard to the single remaining instance in which evidence relating to uncharged conduct was admitted over a defense objection without the trial court giving a limiting instruction, i.e., one in which a witness mentioned that defendant received stolen property as payment for drugs, (R.Vol. VIII, 632), we do not find that the defendant has demonstrated that the trial court abused its discretion in failing to strike this testimony. ¹ In short, the court does not find that defendant has demonstrated the existence of any reversible error in the district court's evidentiary rulings below or that, on this record, the cumulative effect of any alleged error affected defendant's substantial rights. Rivera, 900 F.2d at 1470. ² Thus, defendant's request for a new trial will be denied.

III.

In his second issue on appeal, defendant contends that the evidence at trial failed to establish the existence of "an enterprise," a necessary element of defendant's convictions under RICO. As stated in United States v. Hooks, a single test applies in reviewing the sufficiency of the evidence in criminal cases: "[t]he evidence--both direct and circumstantial, together with reasonable inferences to be drawn therefrom--is sufficient if, when taken in the light most favorable to the government, a reasonable jury could find the defendant guilty beyond a reasonable doubt." 780 F.2d 1526, 1531 (10th Cir.), cert. denied, 475 U.S. 1128, 106 S.Ct. 1657, 90 L.Ed.2d 199 (1986).

"In order to secure a conviction under RICO, the Government must prove both the existence of an 'enterprise' and the connected 'pattern of racketeering activity.' " United States v. Turkette, 452 U.S. 576, 583, 101 S.Ct. 2524, 2528-2529, 69 L.Ed.2d 246 (1981). Under Turkette, the existence of an enterprise is proved "by evidence of an ongoing organization, formal or informal, and by evidence that the various associates function as a continuing unit." Id. The issues of ongoing organization, continuing membership and an enterprise existing apart from the underlying pattern of racketeering are factual questions for the jury. United States v. Riccobene, 709 F.2d 214, 222 (3d Cir.), cert. denied, Ciancaglini v. United States, 464 U.S. 849, 104 S.Ct. 157, 78 L.Ed.2d 145 (1983). Although the pattern of racketeering activity and the enterprise are separate elements of a RICO violation, the government need not necessarily adduce different proof for each element. Turkette, 452 U.S. at 583, 101 S.Ct. at 2528-2529.

Although courts have differed in their views of how separate and distinct the existence of the enterprise must be from the underlying pattern of racketeering, we conclude that the evidence presented in defendant's case was sufficient to establish the existence of a RICO enterprise. For purposes of this appeal, we will employ the Third Circuit Court of Appeal's elaboration of a framework for analyzing the existence of an enterprise as stated in Riccobene, 709 F.2d at 222-24.

In this case, we conclude that the evidence establishes the first element stated in the Riccobene framework, i.e., an ongoing organization with a decision-making framework or mechanism for controlling the group. 709 F.2d at 222. A witness, Urban Gordon, testified that he was in charge of selling the heroin and Sanders was in charge of maintaining supply, with Gordon and Sanders receiving $18.00 in profit per $30.00 dosage unit. (R.Vol. VII, 375). After Gordon left the organization, other people, such as Ray Gene Jeffries and Elmer Quinn, occupied this same position or role of overseeing street distribution of the heroin while Sanders remained in charge of supplying heroin. (R.Vol. VIII, 546-56, 558-67; R.Vol. VIII, 606, 609). Although the members of defendant's heroin distribution group sometimes changed, the decision-making structure remained the same over time.

The second element of the Riccobene framework, i.e., that various associates function as a continuing unit, is shown by the organization's continuation while defendant Sanders was in prison after his parole was revoked upon his arrest in 1982. During his incarceration, Sanders appointed a different person (i.e., Evelyn Pitts) to meet with his heroin suppliers (i.e., Roy and Patricia Williams) to assure a steady supply of heroin for the organization. (R.Vol. VI, 208-14). At trial, evidence was also presented that Sanders continued to have contact with and instruct group members while he was in prison. (R.Vol. VII, 386, Vol. X, 896-908).

The third Riccobene element, and the one most contested in this appeal, is that the enterprise is shown to be separate and apart from the pattern of racketeering activity. 709 F.2d at 223; see Turkette, 452 U.S. at 583, 101 S.Ct. at 2528-2529. Under Riccobene, this element is satisfied if the evidence shows the organization coordinated the commission of different predicate offenses on an ongoing basis. 709 F.2d at 224. Specifically, defendant argues that the evidence failed to establish the existence of a group of associates functioning as a continuing unit with an ascertainable structure that existed apart from the commission...