U.S.A. v. Barnes

• Decision Date: 13 October 2000
• Docket Number: No. 99-3583,99-3583
• Parties: (7th Cir. 2000) United States of America, Plaintiff-Appellee, v. Larry Barnes, Defendant-Appellant
• Court: U.S. Court of Appeals — Seventh Circuit

Page 311

230 F.3d 311 (7th Cir. 2000)

United States of America, Plaintiff-Appellee, v. Larry Barnes, Defendant-Appellant.

No. 99-3583

In the United States Court of Appeals For the Seventh Circuit

Argued April 26, 2000

Decided October 13, 2000

Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 99 CR 109--Rebecca R. Pallmeyer, Judge.

Before Bauer, Rovner, and Diane P. Wood, Circuit Judges.

Diane P. Wood, Circuit Judge.

Larry Barnes was a real estate broker who strayed from the realm of legitimate transactions into that of money laundering. A grand jury returned an indictment against him on February 17, 1999, for a single count of attempted money laundering, in violation of 18 U.S.C. sec. 1956(a)(3)(B), with respect to a transaction that took place on February 18, 1994. He moved to dismiss the indictment on the ground that the prosecutors waited too long to bring their case, and thus that it was barred by the five-year federal criminal statute of limitations, 18 U.S.C. sec. 3282. The district court found that the events of February 18, 1994, were enough to support the case and thus rejected his argument. After a one-day bench trial, the court found Barnes guilty as charged; it later sentenced him to 41 months in prison. On appeal, he claims only that the indictment should have been dismissed on timeliness grounds. We disagree, and affirm the judgment of the district court.

I

Barnes worked as a broker for the Amaris Mortgage Company in the Chicago area. On January 24, 1994, as part of a criminal investigation being pursued by the Internal Revenue Service, a confidential informant introduced Barnes to one "A.J.," a purported drug dealer interested in buying real estate with "unreported income." In fact, A.J. was undercover IRS Special Agent Anderson Jackson, who was wearing a recording device. The informant frankly told Barnes that A.J. wanted to use drug money and an assumed name for his property purchase; Barnes indicated that he understood and that he did not care about the source of A.J.'s money.

Once the introductions were complete at the January 24 meeting, Barnes offered A.J. an apartment building for $79,000 and a single- family home for $25,000. A.J. expressed interest, whereupon the three went to view the properties. En route, Barnes explained that, by purchasing the properties, A.J. could "wash" his money so that he could claim he had legitimate income from the real estate, and that he could later invest additional illegitimate funds with income from the properties and claim that everything was legitimate. When A.J. expressed fear about getting caught laundering money, Barnes assured him that everything was "covered." After viewing both properties, A.J. agreed to buy them.

Barnes and A.J. next met at Amaris Mortgage on February 4, 1994. There the two both discussed the mechanics of money laundering further (both generally and how Barnes planned to handle the particular transaction) and they began preparing the paperwork for A.J.'s two purchases. Later that day, they met with an attorney in Barnes's office. Barnes instructed the attorney to prepare a "$29,000 transaction," to disregard the source of the "front money," and to structure the deal so that A.J. would pay in installments at an interest rate of 8.5% with a five-year amortization period. Uncomfortable that A.J. was asking too many questions in front of the lawyer, Barnes took him away from the lawyer's presence and explained his plan further. He suggested that A.J. put $1,000 down on one of the properties and pay the balance in cash, even though the paperwork would show that the balance was to be paid in installments. A.J. then requested that the title be put in the name of "Andrew Jackson," and on that basis Barnes ordered the title commitment. Barnes then suggested that A.J. make a $50,000 down payment at a meeting scheduled to take place the following week. A.J. agreed, noting that he first had to travel to Miami to "square up something," but that he would return in a few days with the money.

Notably, everything we have described up to this point took place more than five years before the indictment was returned. Only the events of the last encounter between Barnes and A.J., which occurred on February 18, 1994, came in under the limitations wire. We therefore pay particularly close attention to what happened on the 18th.

A.J. met with Barnes on the 18th, claiming to have $100,000 in cash from a 75-kilogram cocaine deal in Florida, and bragging that he had made $1,500 per kilogram. Ever the accommodating broker, Barnes replied that he could get rid of the money "real quick . . . through his business." Unfortunately, however, the attorney with whom the two had met on February 4 was in court. Barnes, unwilling to wait for the plum he thought he was about to get, immediately called another attorney to set up a real estate closing. The second attorney was also unavailable, but Barnes was able to leave a message with his assistant indicating that Barnes needed to set up an "emergency" closing that afternoon and asking the attorney to prepare the necessary paperwork. Barnes also told A.J. that he would adjust the paperwork to show a purchase price of $30,000 and that the remaining $70,000 would be a "payoff"; he suggested to A.J. that if the latter were ever questioned about the low selling price, he could say that the properties were causing a headache to the seller and that the seller just wanted to unload them. Barnes expected, however, the full $100,000 as the true down payment. With these matters settled, Barnes and A.J. adjourned to a local restaurant for lunch while they waited for the second attorney.

On the way to the restaurant, A.J. told Barnes that his drug source was a "cocaine farm" and that he had received the extra $50,000 "from a Colombian." Over lunch, Barnes continued to tout his ability to shift money around so that no one could trace it. He described how he had set up a series of different corporations and used their tax identification numbers in lieu of his social security number to open up four separate bank accounts. These accounts, he thought, would be a good place to store A.J.'s cash, using a series of small deposits to avoid IRS reporting requirements. He also suggested that he could help A.J. launder future drug money by helping him buy a business franchise, such as a gas station or a car dealership. When they finished their lunch, the two left the restaurant, ostensibly heading for the lawyer's office. At that point, federal agents performed a mock arrest of A.J. to extract him from the operation. The following day an IRS agent questioned Barnes, but did not arrest him.

II

Four years and 364 days later, the grand jury indicted Barnes for attempted money laundering. Barnes, who had not had contact with the government since the day after A.J.'s "arrest," moved to dismiss the indictment, claiming that the prosecution was barred because the charged conduct occurred on February 4, 1994. The district court deferred ruling on the motion, and then denied it after the bench trial, where the government presented evidence of Barnes's activities on each of the three critical days: January 24, February 4, and February 18, 1994. The court found that Barnes had committed all of the acts constituting elements of the attempted money laundering...