U.S. v. Kaufmann

• Citation: 985 F.2d 884
• Decision Date: 02 February 1993
• Docket Number: No. 92-1463,92-1463
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Harry C. KAUFMANN, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 884

985 F.2d 884

UNITED STATES of America, Plaintiff-Appellee, v. Harry C. KAUFMANN, Defendant-Appellant.

No. 92-1463.

United States Court of Appeals Seventh Circuit.

Submitted Aug. 26, 1992.

Decided Feb. 2, 1993.

Mel S. Johnson, Asst. U.S. Atty., Office of the U.S. Atty., Milwaukee, WI, for plaintiff-appellee.

Marna M. Tess-Mattner, Franklyn M. Gimbel, Raymond M. Dall'Osto, Gimbel, Reilly, Guerin & Brown, James Collis, Milwaukee, WI, for defendant-appellant.

Before CUMMINGS and EASTERBROOK, Circuit Judges, and FAIRCHILD, Senior Circuit Judge.

FAIRCHILD, Senior Circuit Judge.

Harry C. Kaufmann is the owner of Kaufmann Motorcars, Inc. ("Kaufmann Motors") in Milwaukee, Wisconsin. On September 11, 1990, a grand jury indicted Kaufmann on four counts of money laundering in violation of 18 U.S.C. § 1956(a)(1)(B), and one count of attempted money laundering in violation of 18 U.S.C. § 1956(a)(3)(B). A jury acquitted Kaufmann on counts one and two, was unable to reach a verdict on counts three and four, and convicted Kaufmann on count five for attempted money laundering. Kaufmann was sentenced on the count of conviction and appealed. Because two counts of the indictment remained unresolved, we held that the judgment was not final and therefore we lacked appellate jurisdiction. United States v. Kaufmann, 951 F.2d 793 (7th Cir.1992). Following dismissal of the appeal, the government moved the district court to dismiss the open counts of the indictment without prejudice, pursuant to Fed.R.Crim.P. 48(a). The district court granted the government's motion and the defendant filed a notice of appeal from the judgment and sentence on count five. At the request of the parties, we first considered whether we would have jurisdiction where two counts of the five count indictment were dismissed without prejudice. We decided that we do have jurisdiction, United States v. Kaufmann, No. 92-1463 (7th Cir. July 2, 1992) (unpublished order), the substance of which we include in this opinion. The parties then filed supplemental briefs. We affirm.

I. FACTUAL AND PROCEDURAL HISTORY

Defendant-Appellant Harry C. Kaufmann owns Kaufmann Motors, an automobile dealership in Milwaukee, Wisconsin that specializes in selling luxury and exotic automobiles such as Excalibur, Zimmer, De Lorean and Mercedes Benz. Through his course of dealings in the automobile business, Kaufmann was friendly with a man by the name of Tom Schafer. Schafer was aware that federal authorities might charge him in connection with the passing of counterfeit money. Schafer agreed to cooperate with law enforcement agents with the hope of receiving consideration with regard to the counterfeiting charges. In particular, he agreed to assist the Internal Revenue Service ("IRS") in a "sting" operation directed at Kaufmann by setting up a sale of an automobile to a purported drug dealer. Schafer had a number of conversations with Kaufmann in this regard that were recorded on audiotape. At the trial, Kaufmann and Schafer provided contradictory testimony concerning the number and content of additional unrecorded conversations.

At the IRS agents' instruction, Schafer told Kaufmann about a "friend" of his, Tom Ryder--who, unknown to Kaufmann, was IRS Special Agent Greg Myre. According to the pre-arranged story, Schafer told Kaufmann that Ryder was a marijuana dealer from Minneapolis who was interested in purchasing a Porsche 911 automobile. Schafer stated that the purchase had to be in cash and the car titled in someone else's name. Kaufmann agreed to sell the Porsche under these terms for $40,000. At a later meeting, Schafer provided a letter to Kaufmann, purportedly written by "Ryder" and addressed to Schafer. The letter provided, in pertinent part:

If you can set this up, I'll make your time worth while, but here's what I need from your guy. Number one, the whole deal is cash, period. Number two, I want the car titled in a friend's name. Will I need to have him there? Number three, my name must never come out. Number four, your guy's cool about my business? PS, make sure your guy understands that the arrangements are more important than the price.

During this meeting, Kaufmann acknowledged that Schafer's friend was "in an illegitimate business." Schafer commented, "He's just a marijuana dealer.... Not high profile. Real low profile." In response, Kaufmann told Schafer that he had supported himself when he was a kid, "dealing coke and crystal." Kaufmann also stated that he was willing to title the car in the name of someone else, and that the titleholder need not be present at the dealership.

In February of 1990, Schafer first brought Myre to the dealership, although Kaufmann was not in the store that day. On March 29, 1990, Myre returned to the dealership, along with IRS Special Agent Rich Ahern, posing as Rick Adams (hereinafter referred to by their true names, "Myre" and "Ahern"). Myre carried a briefcase containing approximately $45,000 to $50,000 in cash. During the course of their conversation, Myre informed Kaufmann that he wished to purchase the Porsche in cash, and directed that title be put in Ahern's name. Kaufmann agreed, commenting, "[T]hat's between you guys" and later stated, "I really don't even want to know about it." Kaufmann and Myre also discussed the filing of Form 8300, a form required to be filed with the IRS when a transaction involves more than $10,000 in cash. ¹ Myre made it clear that he did not want his name to appear on any of the paperwork involved in the transaction. Kaufmann told the agents that he must file the form, but agreed to complete the form in Ahern's name. Myre additionally told Kaufmann that he had brought cash in an assortment of denominations, and Kaufmann responded, "That's most likely what I figured." Agent Ahern did not actively participate in this discussion and Myre retained possession of the briefcase throughout their meeting.

After the terms were agreed upon, Kaufmann began to prepare the sales forms. However, before the transaction could be completed, IRS agents entered the office, identified themselves, and purported to "arrest" Myre. Kaufmann was unaware at this time that Myre and Ahern were agents. He told the arresting agents that Myre was in the process of buying an automobile and that he had just begun to fill out the currency report. An arresting agent asked Kaufmann whether it was Myre or Ahern who had brought the money, and Kaufmann responded, "To be honest with you, I can't tell you." This was the last contact Kaufmann had with the agents.

On March 31, 1990--two days after the meeting with Myre and Ahern--Kaufmann asked to meet with Schafer at John Hawk's Pub. This meeting lasted approximately two hours and was also recorded. During this conversation, Kaufmann told Schafer that he was worried that he was in legal trouble, and stated, "I would take a personal vendetta against somebody that got me involved and I've got enough money to cause a guy some hardship."

At trial, the audiotape of the conversations was played for the jury. As well, Schafer and Myre testified in some detail about the "sting" operation. Kaufmann also testified at trial, although his testimony differed in many respects. According to Kaufmann, Schafer had told him that his friend was coming to Milwaukee to buy and sell real estate. Schafer told him that this friend wanted to purchase a Porsche with cash and title the car in another's name so that his wife--whom he was divorcing--would not know he had purchased a car.

On September 11, 1990, a grand jury indicted Kaufmann on four counts of money laundering in violation of 18 U.S.C. § 1956(a)(1)(B) ² and one count of attempted money laundering in violation of 18 U.S.C. § 1956(a)(3)(B). Count five, the only count before us, alleged that Kaufmann attempted to conduct a financial transaction involving property represented by law enforcement officers to be the proceeds of specified unlawful activity, with the intent to conceal and disguise the nature, location, source, ownership, or control of the property believed to be the proceeds of specified unlawful activity. The financial transaction attempted was the sale of a Porsche automobile to an undercover agent of the Criminal Investigation Division of the IRS. The completion of the sale was frustrated by the "arrest."

The jury returned a verdict of not guilty on counts one and two and a verdict of guilty on count five. The jury was unable to reach a verdict on counts three and four, and Judge Warren granted a mistrial as to these counts. Kaufmann was sentenced to 46 months in prison with a $30,000 fine on count five. This sentence was based, in part, on a two level enhancement for obstruction of justice. Judge Warren based the enhancement on three findings of obstruction of justice that had been recommended in the Pre-Sentence Investigation Report ("PSI"). First, he found that Kaufmann had threatened Schafer; second, that Kaufmann had provided false testimony; and third, that Kaufmann had made a false statement to law enforcement officers when they "arrested" Myre. Judge Warren stayed the execution of the sentence pending appeal. Kaufmann appealed.

We initially held on appeal that the judgment was not final because two counts of the indictment remained unresolved, and we therefore did not have appellate jurisdiction. Kaufmann, 951 F.2d 793. Following dismissal of the appeal, the government moved the district court to dismiss the open counts of the indictment without prejudice, pursuant to Fed.R.Crim.P. 48(a). The district court granted the government's motion and the defendant filed a notice of appeal from the judgment and sentence on count five. In an unpublished order, we held that the dismissal without prejudice of the unresolved counts, where there was no evidence that the parties or district judge were attempting to deliberately circumvent the rules of procedure to "create" appellate jurisdiction, rendered the judgment final...