U.S. v. Corchado-Peralta

• Decision Date: 29 January 2003
• Docket Number: No. 01-2086.,01-2086.
• Parties: UNITED STATES of America, Appellee, v. Elena CORCHADO-PERALTA, Defendant, Appellant.
• Court: U.S. Court of Appeals — First Circuit

Page 255

318 F.3d 255

UNITED STATES of America, Appellee, v. Elena CORCHADO-PERALTA, Defendant, Appellant.

No. 01-2086.

United States Court of Appeals, First Circuit.

Heard November 7, 2002.

Decided January 29, 2003.

Ramón García-García, by appointment of the court, for appellant.

Steven N. Siegel with whom Rose A. Briceño, Department of Justice, Criminal Division, Narcotic and Dangerous Drug Section, was on brief for the United States.

Before BOUDIN, Chief Judge, HOWARD, Circuit Judge, and SHADUR,^* Senior District Judge.

BOUDIN, Chief Judge.

Between 1987 and 1996, Ubaldo Rivera Colon ("Colon") smuggled over 150 kilograms of cocaine into Puerto Rico, yielding some $4 million in profits, which he then laundered through a variety of investments and purchases. Colon was indicted on drug, bank fraud, and conspiracy charges and, based on a plea agreement, was sentenced in June 2002 to over 20 years in prison. This case concerns not Colon but three peripheral figures, including his wife.

Colon's wife, Elena Corchado Peralta ("Corchado"), and two associates, Basilio Rivera Rodriguez ("Rivera") and Oscar Trinidad Rodriguez ("Trinidad") were indicted and tried together on one count of conspiring with Colon to launder money. 18 U.S.C. §§ 1956(a)(1)(B) and (h).¹ Corchado was also indicted on one count of bank fraud. 18 U.S.C. § 1344 (2000). During their eight-day trial, Colon provided extensive testimony about his money laundering methods, which included a variety of transactions (purchases, investments, and loans) involving the defendants.

All three defendants were convicted on the charges against them. Corchado received a 27-month sentence, Rivera, 57 months, and Trinidad, 63 months. All three defendants appealed, each arguing that the evidence was not sufficient to support conviction. Trinidad and Rivera raise other issues as well and we address their claims in a companion opinion. Corchado appeals alone, but it is helpful to begin by outlining the criminal offense that was the principal charge against all of them.

The money laundering statute, 18 U.S.C. § 1956 (2000), among other things makes it criminal for anyone, "knowing that the property involved in a financial transaction represents the proceeds of some form of unlawful activity" 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; or

. . . . (B) knowing that the transaction is designed in whole or in part —

(i) to conceal or disguise the nature, the location, the source, the ownership or the control of the proceeds of specified unlawful activity;

. . . .

Id. § 1956(a)(1).

The three defendants in this case were charged under subsection (B)(i), based on knowledge of "design[]", and not under (A)(i), based on an "intent to promote." In each instance, there is no doubt that the defendant did engage in one or more financial transactions involving Colon's drug proceeds. The issue turns, rather, on state of mind elements. Pertinently, as to Corchado, she disputes knowing either that the "property" represented proceeds of drug dealing or that "the transaction" was "designed ... to conceal or disguise...." The evidence, taken most favorably to the government, United States v. Gomez, 255 F.3d 31, 35 (1st Cir.2001), showed the following.

Elena Corchado Peralta met Colon sometime in the early 1990s and they were married in 1994. Corchado, then about 25 years old, was a student when they met and later worked part-time in her mother's jewelry store. She has a college degree in business administration and some training in accounting. Colon testified that he held himself out as a successful legitimate businessman throughout their relationship and that his wife knew about neither his drug smuggling nor his own money laundering activities.

Corchado performed many transactions involving Colon's drug proceeds. These transactions fell into two broad categories — expenditures and deposits. On the expenditure side, Colon directed Corchado to write and endorse checks to purchase a cornucopia of expensive cars, boats, real estate, and personal services. Colon maintained that his wife thought that the money was derived from legitimate businesses.

The purchases themselves were extensive and expensive, affording the couple a fancy lifestyle. For example, Corchado purchased a BMW, a Mercedes Benz, and a Porsche for the couple. At another time, she made a single monthly payment to American Express of $18,384 for interior decorating purchases. And on another day, she signed three checks totaling $350,000 that were used to purchase land for one of Colon's businesses. In total, Corchado signed the majority of 253 checks, representing many hundreds of thousands of dollars of purchases.

With respect to deposits, Corchado's main responsibility was to deposit $6,000 checks on a monthly basis into one of Colon's accounts. Colon testified that he had made a $700,000 loan to an associate using his drug profits with the understanding that the associate was to pay him back over the course of many months so as to dissociate Colon from the illegal proceeds. Under the terms of the arrangement, the checks came from legitimate businesses, and Colon testified that his wife was not aware of the circumstances underlying the monthly payments. At trial, the government also presented evidence showing that on one occasion Corchado wired $40,000 to a Florida company at Colon's request.

Tax records signed by Corchado showed that she knew that her husband's reported income from his legitimate businesses was far less than the money she was handling. For example, the joint tax return that Corchado signed for 1995 listed a total amount of claimed income of only $12,390. The government presented evidence showing that the couple's total reported income between 1992 and 1997 was only approximately $150,000. Corchado did not testify at trial.

We begin with the first knowledge requirement — namely, that Corchado was aware, at the time of the transactions she conducted, that the money she was handling, at least much of the time, was derived from drug dealings.² Corchado argues, correctly, that there is no direct evidence of her knowledge (say, by an admission by her or testimony from Colon that he told her about his business). Indeed, he testified repeatedly that she was unaware of his drug business; that in response to a question from her he had denied doing anything unlawful; that he never allowed her to attend meetings involving his drug business; and that he stopped distributing drugs when they were married.

Needless to say, the jury did not have to accept Colon's exculpatory testimony. It was clearly self-interested since Corchado was his wife and mother of their two children. But here, at least, the jury's disbelief could not count for much in the way of affirmative proof. See Dyer v. MacDougall, 201 F.2d 265, 269 (2d Cir.1952) (Hand, L. J.); Janigan v. Taylor, 344 F.2d 781 (1st Cir.), cert. denied, 382 U.S. 879, 86 S.Ct. 163, 15 L.Ed.2d 120 (1965). Rather, whether there was knowledge of drug dealing, or so much awareness that ignorance was willful blindness, turns in this case on the same circumstantial evidence.

What the evidence shows is that Corchado knew that the family expenditures were huge, that reported income was a fraction of what was being spent and that legitimate sources were not so obvious as to banish all thoughts of possible illegal origin — as demonstrated by Colon's testimony that Corchado once raised the issue. Interviewed by an FBI agent, Corchado told him that her husband had been involved in the cattle business and, more recently, in real estate development but that none of the businesses had employees and that Colon had worked mainly out of his house. And, as the government fairly points out, Corchado was herself well educated and involved in the family bookkeeping.

This might seem to some a modest basis for concluding — beyond a reasonable doubt — that Corchado knew that her husband's income was badly tainted. But the issue turns on judgments about relationships within families and about inferences that might be drawn in the community from certain patterns of working and spending. Further, it is enough to know that the proceeds came from "some form, though not necessarily which form," of felony under state or federal law. 18 U.S.C. § 1956(c)(1). The jury's judgment on this factual issue cannot be called irrational.

The other knowledge requirement is harder for the government. Here, the statute requires, somewhat confusingly, that Corchado have known that "the transaction" was "designed," at least in part, "to conceal or disguise the nature, the location, the source, the ownership or the control of the proceeds." 18 U.S.C. § 1956(a)(1)(B)(i). We will assume that it would be enough if Corchado herself undertook a transaction for her husband, knowing that her husband had such a design to conceal or disguise...