U.S. v. Campbell, 91-5695

• Decision Date: 28 September 1992
• Docket Number: No. 91-5695,91-5695
• Citation: 977 F.2d 854
• Parties: UNITED STATES of America, Plaintiff-Appellant, v. Ellen CAMPBELL, a/k/a Ellen Campbell Fremin, Defendant-Appellee.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 854

977 F.2d 854

UNITED STATES of America, Plaintiff-Appellant, v. Ellen CAMPBELL, a/k/a Ellen Campbell Fremin, Defendant-Appellee.

No. 91-5695.

United States Court of Appeals Fourth Circuit.

Argued June 5, 1992.

Decided Sept. 28, 1992.

Frank DeArmon Whitney, Asst. U.S. Atty., Thomas J. Ashcraft, U.S. Atty., Charlotte, N.C., argued (B. Frederic Williams, Jr., Asst. U.S. Atty., on brief), for plaintiff-appellant.

James Frank Wyatt, III, Charlotte, N.C., argued (Larry D. Tucker, on brief), for defendant-appellee.

Before ERVIN, Chief Judge, WILLIAMS, Circuit Judge, and MERHIGE, Senior District Judge for the Eastern District of Virginia, sitting by designation.

OPINION

ERVIN, Chief Judge:

The United States appeals from the district court's grant of Ellen Campbell's motion for judgment of acquittal on charges of money laundering, 18 U.S.C. § 1956(a)(1)(B)(i), and engaging in a transaction in criminally derived property, 18 U.S.C. § 1957(a). United States v. Campbell, 777 F.Supp. 1259 (W.D.N.C.1991). Campbell had been convicted of the charges by a jury in the Western District of North Carolina. We reverse the judgment of acquittal, but affirm the district court's conditional grant of a new trial, and, accordingly, we remand the case for further proceedings.

I.

The relevant facts are comprehensively set out in the district court's published opinion. Id. at 1260-62. We will only summarize them here. In the summer of 1989, Ellen Campbell was a licensed real estate agent working at Lake Norman Realty in Mooresville, North Carolina. During the same period, Mark Lawing was a drug dealer in Kannapolis, North Carolina. Lawing decided to buy a house on Lake Norman. He obtained Campbell's business card from Lake Norman Realty's Mooresville office, called Campbell, and scheduled an appointment to look at houses.

Over the course of about five weeks, Lawing met with Campbell approximately once a week and looked at a total of ten to twelve houses. Lawing and Campbell also had numerous phone conversations. Lawing represented himself to Campbell as the owner of a legitimate business, L & N Autocraft, which purportedly performed automobile customizing services. When meeting with Campbell, Lawing would travel in either a red Porsche he owned or a gold Porsche owned by a fellow drug dealer, Randy Sweatt, who would usually accompany Lawing. During the trips to look at houses, which occurred during normal business hours, Lawing would bring his cellular phone and would often consume food and beer with Sweatt. At one point, Lawing brought a briefcase containing $20,000 in cash, showing the money to Campbell to demonstrate his ability to purchase a house.

Lawing eventually settled upon a house listed for $191,000 and owned by Edward and Nancy Guy Fortier. The listing with the Fortiers had been secured by Sara Fox, another real estate agent with Lake Norman Realty. After negotiations, Lawing and the Fortiers agreed on a price of $182,500, and entered into a written contract. Lawing was unable to secure a loan and decided to ask the Fortiers to accept $60,000 under the table in cash and to lower the contract price to $122,500. ¹ Lawing contacted Campbell and informed her of this proposal. Campbell relayed the proposal to Fox, who forwarded the offer to the Fortiers. The Fortiers agreed, and Fox had the Fortiers execute a new listing agreement which lowered the sales price and increased the commission percentage (in order to protect the realtors' profits on the sale).

Thereafter Lawing met the Fortiers, Fox and Campbell in the Mooresville sales office with $60,000 in cash. The money was wrapped in small bundles and carried in a brown paper grocery bag. The money was counted, and a new contract was executed reflecting a sales price of $122,500. Lawing tipped both Fox and Campbell with "a couple of hundred dollars." Id. at 1261-62.

William Austin, the closing attorney, prepared closing documents, including HUD-1 and 1099-S forms, reflecting a sales price of $122,500, based on the information provided by Campbell. Campbell, Fox, Austin, Lawing, Lawing's parents and the Fortiers were all present at the closing. The closing documents were signed, all reflecting a sales price of $122,500.

Campbell was indicted on a three count indictment alleging: 1) money laundering, in violation of 18 U.S.C. § 1956(a)(1)(B)(i); 2) engaging in a transaction in criminally derived property, in violation of 18 U.S.C. § 1957(a); and 3) causing a false statement (the HUD-1 form) to be filed with a government agency, in violation of 18 U.S.C. § 1001. She was tried and convicted by a jury on all three counts. After the verdict, the district court granted Campbell's motion for judgment of acquittal with respect to the money laundering and transaction in criminally derived property counts. The district court also conditionally ordered a new trial on these counts if the judgment of acquittal was reversed on appeal. The Government appeals. ²

II.

In reviewing a district court's grant of a post-verdict acquittal, this court must decide "whether, viewing the evidence in the light most favorable to the government, any rational trier of facts could have found the defendant guilty beyond a reasonable doubt." United States v. Tresvant, 677 F.2d 1018, 1021 (4th Cir.1982). Because the question is a matter of law, we review the issue de novo and need accord no deference to the district court's determination that the evidence is insufficient. United States v. Steed, 674 F.2d 284, 286 (4th Cir.), cert. denied, 459 U.S. 829, 103 S.Ct. 67, 74 L.Ed.2d 68 (1982).

The money laundering statute under which Campbell was charged applies to any person who:

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 ... knowing that the transaction is designed in whole or in part ... to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity....

18 U.S.C. § 1956(a)(1). The district court found, and Campbell does not dispute, that there was adequate evidence for the jury to find that Campbell conducted a financial transaction which in fact involved the proceeds of Lawing's illegal drug activities. The central issue in contention is whether there was sufficient evidence for the jury to find that Campbell possessed the knowledge that: (1) Lawing's funds were the proceeds of illegal activity, and (2) the transaction was designed to disguise the nature of those proceeds.

In assessing Campbell's culpability, it must be noted that the statute requires actual subjective knowledge. Campbell cannot be convicted on what she objectively should have known. However, this requirement is softened somewhat by the doctrine of willful blindness. In this case, the jury was instructed that:

The element of knowledge may be satisfied by inferences drawn from proof that a defendant deliberately closed her eyes to what would otherwise have been obvious to her. A finding beyond a reasonable doubt of a conscious purpose to avoid enlightenment would permit an inference of knowledge. Stated another way, a defendant's knowledge of a fact may be inferred upon willful blindness to the existence of a fact.

It is entirely up to you as to whether you find any deliberate closing of the eyes and inferences to be drawn from any evidence. A showing of negligence is not sufficient to support a finding of willfulness or knowledge.

I caution you that the willful blindness charge does not authorize you to find that the defendant acted knowingly because she should have known what was occurring when the property at 763 Sundown Road was being sold, or that in the exercise of hindsight she should have known what was occurring or because she was negligent in failing to recognize what was occurring or even because she was reckless or foolish in failing to recognize what was occurring. Instead, the Government must prove beyond a reasonable doubt that the defendant purposely and deliberately contrived to avoid learning all of the facts.

J.A. at 495-96. Neither party disputes the adequacy of these instructions on willful blindness or their applicability to this case. See, e.g., United States v. Cogdell, 844 F.2d 179, 181 (4th Cir.1988).

As outlined above, a money laundering conviction under section 1956(a)(1)(B)(i) requires proof of the defendant's knowledge of two separate facts: (1) that the funds involved in the transaction were the proceeds of illegal activity; and (2) that the transaction was designed to conceal the nature of the proceeds. In its opinion supporting the entry of the judgment of acquittal, the district court erred in interpreting the elements of the offense. After correctly reciting the elements of the statute, the court stated, "in a prosecution against a party other than the drug dealer," the Government must show "a purpose of concealment " and "knowledge of the drug dealer's activities." Campbell, 777 F.Supp. at 1265. (emphasis added). This assertion misstates the Government's burden. The Government need not prove that the defendant had the purpose of concealing the proceeds of illegal activity. Instead, as the plain language of the statute suggests, the Government must only show that the defendant possessed the knowledge that the transaction was designed to conceal illegal proceeds. ³

This distinction is critical in cases such as the present one, in which the defendant is a person other than the individual who is the source of the tainted money. It is clear from the record that Campbell herself did not act with the purpose of concealing drug proceeds. Her motive, without question, was to close the real estate deal and collect the resulting commission, without regard to the source of the money or the effect of the transaction...