U.S. v. Johnson

• Decision Date: 28 July 1992
• Docket Number: No. 91-5030,91-5030
• Citation: 971 F.2d 562
• Parties: 36 Fed. R. Evid. Serv. 425 UNITED STATES of America, Plaintiff-Appellee, v. Robert L. JOHNSON, Defendant-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 562

971 F.2d 562

36 Fed. R. Evid. Serv. 425

UNITED STATES of America, Plaintiff-Appellee, v. Robert L. JOHNSON, Defendant-Appellant.

No. 91-5030.

United States Court of Appeals, Tenth Circuit.

July 28, 1992.

Stanley D. Monroe, Tulsa, Okl., for defendant-appellant.

James L. Swartz, Asst. U.S. Atty. (Tony M. Graham, U.S. Atty., with him on the brief), Tulsa, Okl., for U.S.

Before SEYMOUR and BRORBY, Circuit Judges, and BROWN, ^* District Judge.

WESLEY E. BROWN, Senior District Judge.

The defendant-appellant Robert Johnson was charged in a sixty-three count indictment with various violations of the Money Laundering Control Act of 1986 (18 U.S.C. §§ 1956 & 1957). A jury found him guilty on all but one count. Appellant was sentenced by the district court to 405 months imprisonment. On appeal, Johnson raises several challenges to the propriety of the convictions and the sentence.

The government alleged that the defendant masterminded a "peso scheme" which defrauded investors out of millions of dollars. According to the government, the defendant convinced investors that he was buying Mexican pesos at a discount rate and then reselling the pesos for their market value in American dollars. Johnson told potential investors that he had served in the war in Vietnam with a man from Mexico whose father was highly placed in the Mexican government. Johnson said that through this contact he had access to Mexican citizens and businesses that wanted to exchange pesos for dollars. The Mexicans wanted to convert their money to dollars, Johnson explained, because the peso was rapidly losing its value and the Mexicans preferred to hold a more stable currency. The defendant told investors that, depending on the number of trades he could make in a day, an investor could realize anywhere from fifteen to twenty-five per cent profit per week. ¹

Several individuals who sent money to the defendant for investment in the peso scheme testified at the defendant's trial. They each testified that they began by giving relatively small amounts of money to the defendant for investment in the peso deal. At the defendant's request, they transferred money they wanted to invest in the deal by means of a wire transfer from their own bank to the defendant's account at the Sooner Federal Savings & Loan in Broken Arrow, Oklahoma. Shortly thereafter, the defendant would wire back the amount of "profit" supposedly made by the investor from the purchase and sale of pesos. The amount wired back by the defendant was often fifteen to twenty per cent of the initial investment. The huge "profits" being made by investors apparently convinced them to invest heavily in the scheme and numerous individuals wired a steady stream of money to the defendant. Several of the investors who testified at trial sent upwards of half a million dollars to the defendant. The defendant managed to gain their complete confidence.

An Internal Revenue Service agent who had examined the defendant's bank records determined that about five and a half million dollars were deposited into the defendant's account in shortly over a year's time. The agent further determined that approximately $1.8 million of that amount was withdrawn out of the account and was used by the defendant to purchase various items, including a house, a car, and assorted cashier's checks. Approximately $1.3 million worth of liquid assets was seized from the defendant when he was arrested. The remainder of the money had been intermittently wired back to investors in the form of "profits."

We find it unnecessary for purposes of this opinion to fully recount the evidence presented by the government relating to the defendant's involvement in the peso scheme; we simply observe that the evidence overwhelmingly supported a conclusion that the scheme was fraudulent and that the defendant was not using the investors' money to purchase and resell pesos.

Counts two and three of the indictment charged the defendant with violations of 18 U.S.C. § 1956(a)(1)(A)(i). That section provides:

§ 1956. Laundering of monetary instruments

(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, ... imprisonment for not more than twenty years....

The "specified unlawful activity" alleged in the indictment was wire fraud in violation of 18 U.S.C. § 1343. Count two of the indictment alleged that Johnson used the proceeds of a wire fraud to pay off the mortgage on his house in Tulsa in the amount of $122,796. Count three alleged that Johnson used wire fraud proceeds to purchase a 1989 Mercedes automobile.

Appellant's first argument is that the evidence was insufficient to support his conviction on counts two and three. Our standard of review on this issue is well established: "In judging the sufficiency of the evidence, we are bound to view the proof presented in the light most favorable to the government to ascertain if there is sufficient substantial proof, direct and circumstantial, together with reasonable inferences to be drawn therefrom, from which a jury might find a defendant guilty beyond a reasonable doubt." United States v. Sullivan, 919 F.2d 1403, 1431 (10th Cir.1990).

Appellant contends that the evidence did not show that the payment of the mortgage on his home was done "with the intent to promote the carrying on" of the wire fraud. ² He argues that there was no evidence to support a conclusion that he paid off the mortgage in order to further the wire fraud activity. In response, the government points out that the defendant maintained an office in the home which he used to carry out much of the fraudulent activity.

Direct evidence of a defendant's intent is seldom available. Intent can be proven, however, from surrounding circumstances. United States v. Leopard, 936 F.2d 1138, 1141 (10th Cir.1991). We find that the evidence, when viewed in the light most favorable to the government, is sufficient to support the conviction on count two. The evidence clearly showed that the defendant used the office in his home to carry out the fraudulent scheme. In addition, the defendant's aura of legitimacy was bolstered in the minds of investors who saw the defendant's house. The circumstances give rise to an inference that the defendant paid the mortgage on the house so that he could continue using the office in furtherance of the fraudulent scheme. Although, as appellant points out, he could have retained the use of the office simply by continuing to make monthly mortgage payments, the fact is that he did not do so. Instead, he used wire fraud proceeds to retire the outstanding balance on the loan secured by the mortgage. Paying off the loan gave him the right to continue using the office and the home. The jury could legitimately infer that paying off the mortgage with wire fraud proceeds was done with the intent to promote the carrying on of the unlawful activity.

The evidence similarly supports the conviction on count three of the indictment. The evidence suggests that the defendant used the Mercedes described in count three to impress investors. The jury could conclude from the evidence that appellant purchased the car to promote the carrying on of his fraudulent scheme. Appellant argues that he had two Mercedes automobiles and that evidence was lacking to show that the one described in count three was used by him in furthering the peso scheme. He contends that the Mercedes described in count three was purchased for his wife. The defendant in fact told one of the investors that he had purchased this car for his wife. But the record contains some evidence that contradicts this assertion. Testimony indicated that the defendant used this particular car both before and after he was separated from his wife. Also, after the defendant talked about the car with the same investor mentioned above, the investor went and talked to the auto dealer who sold the car to the defendant. The dealer spoke very highly of the defendant, who had put a down payment of approximately $66,000 on the car. After speaking with the auto dealer and others about the defendant, the investor was persuaded that the defendant was a legitimate businessman. This evidence suggests that the defendant used the car to persuade investors to invest in his scheme. His use of the car in this manner further tends to show that he purchased the car with that purpose in mind. Cf. United States v. Jackson, 935 F.2d 832, 841 (7th Cir.1991) (No evidence that cellular phones purchased by the defendant played any role in his drug operation; evidence was therefore insufficient to show that their purchase was intended to promote his drug activities.) Taken as a whole, the evidence supports the jury's finding that the defendant engaged in the financial transaction of purchasing the car with the intent to promote the carrying on of the wire fraud activity.

Appellant's next argument is that the evidence was insufficient to support the convictions on counts four through sixty-three of the indictment. These counts were brought under 18 U.S.C. § 1957, which provides in part § 1957. Engaging in monetary transactions in property derived from specified unlawful activity

(a) Whoever, ... knowingly engages or attempts to engage in a monetary transaction in criminally derived property that is of a value greater than $10,000 and is derived from specified unlawful activity, shall be punished as provided in subsection (b).

* * * * * *

(f) As used in this section--

(1) the term "monetary transaction" means the deposit, withdrawal, transfer, or exchange, in or affecting interstate or foreign commerce, of funds or a monetary instrument ... by, through, or to a financial...