U.S. v. Cunningham, 95-3559

• Decision Date: 06 May 1996
• Docket Number: No. 95-3559,95-3559
• Citation: 83 F.3d 218
• Parties: UNITED STATES of America, Appellee, v. Paul William CUNNINGHAM, Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 218

83 F.3d 218

UNITED STATES of America, Appellee, v. Paul William CUNNINGHAM, Appellant.

No. 95-3559.

United States Court of Appeals Eighth Circuit.

Submitted Feb. 13, 1996.

Decided May 6, 1996.

Appeal from the United States District Court for the Western District of Missouri; Dean Whipple, Judge.

Ray Conrad, Federal Public Defender, Kansas City, MO, for Appellant.

Matt J. Whitworth, Assistant U.S. Attorney, Kansas City, MO, for Appellee.

Before BOWMAN, LOKEN, and MORRIS SHEPPARD ARNOLD, Circuit Judges.

BOWMAN, Circuit Judge.

A jury convicted Paul William Cunningham of one count of conspiring to transport money obtained by fraud in interstate commerce in violation of 18 U.S.C. § 371 (1994) and one count of transporting money obtained by fraud in interstate commerce in violation of 18 U.S.C. § 2314. The District Court ¹ sentenced Cunningham to two concurrent terms of twenty months of imprisonment followed by two concurrent terms of three years of supervised release. The court also imposed a $100 assessment and ordered Cunningham to make restitution to the victims of his crimes in the amount of $155,832.37. Cunningham timely appeals his convictions. We affirm.

I.

Cunningham married Carol W. Jones in the early 1960s. By the mid-1960s they were divorced. Between 1965 and 1988, Cunningham and Jones did not maintain contact with each other. By 1988, Jones had become president and chairman of the board of directors of Jackson County Escrow Services, Inc. She also owned twenty percent of the outstanding shares of Jackson County Escrow. As president of Jackson County Escrow, Jones was responsible for the day-to-day operations of the corporation. In 1986 Jones began stealing large amounts of money from the corporation. She used her authority over the corporation's accounts, including its escrow account, to transfer corporate and client funds to satisfy her personal obligations. As a result of a probe by the Federal Bureau of Investigation, Jones pleaded guilty to mail fraud charges and cooperated with the FBI in its investigation of Cunningham and others. As a part of her plea agreement, Jones testified against Cunningham at his trial.

Jones testified that she contacted Cunningham in 1988, while Cunningham was living in Oklahoma, and asked him to loan her $100,000 to $150,000. Jones needed the money to cover her current husband's gambling debts and to make up a shortfall in the escrow account of Jackson County Escrow. Jones believed that Cunningham might have funds available because she believed that he was a successful bookmaker. Cunningham was not able to loan Jones any money. Cunningham later asked if Jones could loan him $20,000, and Jones agreed to loan him $20,000 at ten percent interest. As the new relationship between Jones and Cunningham blossomed Jones began sending or wiring from Missouri large amounts of escrow funds to Cunningham in Oklahoma. In some instances Jones sent Cunningham checks, which Cunningham endorsed, that were inscribed on their face as "Escrow Account" checks. In other instances, Jones would wire money. At the same time, Cunningham and Jones were engaged in daily telephone conversations. Cunningham, however, used the code name "Don" when he called Jones at her office. Additionally, Federal Express packages sent from Jones to Cunningham were addressed to code names for Cunningham such as Don Hawkins at a rented private mail box.

When Cunningham received money from Jones, he generally sent back some percentage of the money to Jones in Missouri. The money Cunningham returned was deposited in the personal bank account of Harold and Carol Jones at a rural bank near the Lake of the Ozarks. In all, Jones sent Cunningham $155,832.37. Cunningham sent $70,491.64 back to Jones, keeping $85,340.73 for his own use. According to Jones, she hoped that Cunningham would use the escrow money to win more money through his illegal bookmaking. Jones testified that toward the beginning of their joint activities she told Cunningham that she was getting the money from the escrow account of her business and that she would probably have to go to jail if she did not pay back the money she had stolen. She also testified that it was Cunningham's idea to use false names when sending funds through Federal Express and when calling Jones at her office.

Cunningham testified at trial in his own defense. He denied that he knew about Jones's illegal activities. He testified that he believed that Jones was loaning him the money she was sending him. He admitted, however, that no documents existed that would show that the transfers were loans. He also testified that he was unemployed during the relevant time period and that his only source of income was from his illegal bookmaking activities. When asked on cross-examination why Jones required him to remit a portion of the funds back to her, Cunningham testified that he never asked Jones and that he "remained ignorant." Trial Tr. at 258.

Jones testified that after Jackson County Escrow failed she and Cunningham had a number of conversations concerning the length of the statute of limitations, Cunningham's belief that he would not have to return the money because the limitations period had expired, and the "story" that Jones would give to investigators regarding the transfers of funds to Cunningham. When Jones suggested that she tell the FBI that her husband was placing bets through Cunningham, Cunningham demurred. He said that he did not want the FBI to know that money had been transferred across state lines. At trial, Cunningham testified that he knew it was illegal to transport across state lines money that had been obtained through theft or fraud.

II.

Cunningham argues that the District Court abused its discretion by instructing the jury, consistent with Eighth Circuit Model Criminal Jury Instruction 7.04 (1994), that it could impute knowledge to Cunningham if it found that he deliberately remained ignorant of the fact that the money he received had been obtained through fraud or theft. Cunningham also argues that the District Court should have granted his motion for a judgment of acquittal because the evidence is insufficient to support the jury's verdict on either count. We address each of these issues in turn.

A. Deliberate Ignorance Instruction

According to Cunningham, the only contested element of the offenses charged was the element of knowledge. Cunningham has steadfastly maintained that he had no knowledge of Jones's illegal activities. With respect to the proof required for the jury to find that the defendant acted knowingly, the District Court instructed the jury in relevant part as follows:

You may find that the defendant acted knowingly if you find beyond a reasonable doubt that the defendant was aware of a high probability that the money sent to him by Carol Jones was stolen or had been obtained by fraud from Jackson County Escrow and that he deliberately avoided learning the truth. The element of knowledge may be inferred if defendant deliberately closed his eyes to what would otherwise have been obvious to him.

You may not find that the defendant acted knowingly, however, if you find that the defendant actually believed that the money sent to him was not stolen or obtained by fraud from Jackson County Escrow. A showing of negligence, mistake, or carelessness is not sufficient to support a finding of knowledge.

Instruction 22. The District Court's instruction was patterned after Eighth Circuit Model Criminal Jury Instruction 7.04, which is based upon our decisions in United States v. Massa, 740 F.2d 629, 643 (8th Cir.1984), cert. denied, 471 U.S. 1115, 105 S.Ct. 2357, 86 L.Ed.2d 258 (1985), United States v. Graham, 739 F.2d 351, 352 (8th Cir.1984), and United States v. Kershman, 555 F.2d 198, 200 (8th Cir.), cert. denied, 434 U.S. 892, 98 S.Ct. 268, 54 L.Ed.2d 178 (1977). Cunningham argues that this deliberate ignorance (or willful blindness) instruction should not have been given because it is not supported by the evidence. He contends that the evidence proved either that he did or did not have actual knowledge of Jones's illegal activities. In Cunningham's view, no evidence tends to show that he made a deliberate effort to avoid learning the truth.

We will reverse a district court on an instructional issue only when the court has abused its wide discretion to formulate jury instructions. United States v. Darden, 70 F.3d 1507, 1541 (8th Cir.1995), cert. denied, --- U.S. ----, 116 S.Ct. 1449, 134 L.Ed.2d 569 (1996). If the instructions, viewed as a whole, fairly and adequately contain the law applicable to the case, we will not disturb the jury's verdict. Id. A deliberate ignorance instruction should not be given in every...