U.S. v. Fuller, 91-5799

• Decision Date: 06 October 1992
• Docket Number: No. 91-5799,91-5799
• Citation: 974 F.2d 1474
• Parties: 36 Fed. R. Evid. Serv. 696 UNITED STATES of America, Plaintiff-Appellee, v. Henry S. FULLER and Robert Duane Foster, Defendants-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1474

974 F.2d 1474

36 Fed. R. Evid. Serv. 696

UNITED STATES of America, Plaintiff-Appellee, v. Henry S. FULLER and Robert Duane Foster, Defendants-Appellants.

No. 91-5799.

United States Court of Appeals, Fifth Circuit.

Oct. 6, 1992.

Rehearing Denied Feb. 12, 1993.

Philip J. Lynch, Asst. Federal Public Defender, Lucien B. Campbell, Federal Public Defender, San Antonio, Tex., for Fuller.

Ronald P. Guyer, San Antonio, Tex., (Court-appointed), for Foster.

Richard L. Durbin, Jr., Ronald F. Ederer, U.S. Atty., San Antonio, Tex., for U.S.

Appeals from the United States District Court for the Western District of Texas.

Before JONES and WIENER, Circuit Judges, and LITTLE, District Judge. ¹

LITTLE, District Judge:

Henry Silas Fuller and Robert Duane Foster were convicted of conspiracy to launder money. Fuller was also convicted of attempting to launder money. In their appeal, Foster and Fuller assert that the evidence, some of which was wrongfully admitted, was insufficient to support guilty verdicts. The appellants also suggest reversible error in the district court's submission of an instruction on deliberate ignorance. Finally, appellants contest the district court's determination of the sum subject to the offence. This error resulted in an enhanced sentence. Finding no merit in any argument raised by either appellant, we affirm.

According to the indictment, Fuller and Foster allegedly conspired to launder money in violation of 18 U.S.C. § 371 and § 1956(a)(1)(B). Fuller was also charged with violating 18 U.S.C. § 1956(a)(3)(B), attempting to launder money represented by a law enforcement agent to be the proceeds of drug trafficking. Taken in a light most favorable to the verdict, the following are the facts of the case.

Fuller, a domiciliary of Austin, Texas and generally a realtor of some ten years experience, met a bar owner in Del Rio, Texas in the spring of 1989. Fuller asked bar owner Jose Martiarena if he knew of anyone with a strong desire to launder money. Martiarena introduced Fuller to a government informant, Mike Nicholas. Nicholas in turn introduced Fuller to government agent Alfonso Martinez. On 16 May 1989 Martinez met with Fuller, Nicholas and David Ruiz, also a government agent. Martinez was seeking assistance from Fuller in getting cash in and out of a banking system in such a way that the cash would be sanitized, i.e., any illegal taint would be removed and currency reporting forms would not have to be completed. The meeting in May was conducted in a hotel room in San Antonio, Texas and was memorialized through video tape. Fuller bemoaned the fact that a Brazilian based land sale for $25,000,000 had been upended when the government of Brazil appropriated his land for agrarian distribution. Fuller was in need of legitimate funds, as much as $100,000, to finance the cost of a legal attack on the Brazilian uncompensated confiscation. In anticipation of the receipt of $25,000,000, Fuller had gained knowledge in the art of moving money from place to place in order to lessen the impact of taxation. Fuller assumed some expertise in money management and secrecy by boasting of friendship with a group that had control over 23 banks. His knowledge would justify a 20% fee. Certainly the banks could assist Martinez, through Fuller, in hiding or cleansing money. Another currency cleansing creation of Fuller's involved a loan to Hemisphere Insurance Company, a Bahamian based insurance company. Hemisphere was in need of cash to fund the acquisition of another insurance company. Fuller could provide Martinez's dollars to Hemisphere in exchange for Hemisphere debentures. The transaction would be secured by a mortgage on Texas property owned by Hemisphere. As a quid pro quo for the loan, the insurance company, for a fee, would also assist in setting up a corporation offshore into which funds would be deposited and from which funds could be withdrawn without U.S. Government regulation. Fuller had the perfect cover. He would describe the funds to be camouflaged by the insurance company as part of his legally obtained funds from the Brazilian land transaction. In fact, he had a photocopy of a check to his order for the equivalent of $25,000,000, and that would be an impressive prop. Subsequent to the meeting, Fuller, through Foster, sent Martinez, through Nicholas, documents that could be used to effectuate the mortgage proposal.

On 21 June 1989, Martinez and Nicholas met in a San Antonio hotel with Fuller and Foster. This conclave was also the subject of a video and audio recordation. Foster described himself to agent Martinez as a well-drilling fund raiser and real estate broker. Foster sent Martinez financial statements on three related insurance companies, Hemisphere, Benefax and Bowman. Foster was acquainted with the management of these companies and with offshore corporations and banking operations. At After the meeting of 21 June 1989, Martinez communicated by telephone with Fuller. The next communication between Fuller and Martinez occurred on 1 May 1990, when Fuller, in response to a message from Martinez, called Martinez. Over the next sixty days, there were four telephone calls between the two. The third face to face meeting between Martinez and Fuller took place on 28 June 1990, again at the Embassy Suites Hotel in San Antonio, Texas. The third person at that meeting was an undercover San Antonio policeman. Foster, according to Fuller, was working offshore and could not attend the meeting. The laundering scheme was reviewed. Martinez gave $97,500 cash to Fuller. Fuller would carry the money to Foster. The funds would be deposited in a Hemisphere Insurance Company account in Bermuda. The corporation would then transfer the funds to a corporate account to be controlled by Martinez. Hemisphere would issue its debenture and Foster and Fuller would received a commission. Fuller prepared an accounting statement showing the costs, including fees, to which the $97,500 payment was exposed. Martinez's participation was evidenced by his cash delivery of $97,500 and his message to Fuller that he would get possession of the debentures on Sunday. After Fuller accepted the money and immediately prior to his intended departure, he was arrested. Among his possessions was a passport with markings evidencing recent and frequent trips to Brazil. Martinez knew that Fuller needed as much as $100,000 to finance his lawsuit in Brazil. Martinez said his clients were Colombians, but the money itself had no "white dust" on it.

                this time the loan to Hemisphere Insurance Company or Benefax was discussed, as well as the creation of a Martinez controlled Bermuda based bank account into which and from which Martinez could direct funds.   Foster and Fuller both confirmed a fee arrangement ranging from a flat 20% to a declining sliding scale depending upon the volume of funds handled by Foster and Fuller.   For example, the commission would drop to 12 1/2% on funds administered in the amount of $1,000,000 or more per month.   Foster and Fuller were specifically advised that the funds were acquired by illegal activities.   Therefore, loss of the funds by Foster-Fuller would place Martinez in a hot spot.   Martinez could not go to court because he would be unable to disclose the source of his funds
                

Fuller testified that he knew the money was drug driven but that he intended to steal the money from Martinez. Fuller needed money to fund his Brazilian lawsuit and to get even with drug traffickers who had enticed his son down the dark side of the path. Fuller also testified that he told Foster that the Martinez money had come from South America. Foster testified that he was unaware that the Martinez funds were anything other than legally obtained.

SUFFICIENCY OF THE EVIDENCE

We review the evidence, and all reasonable inferences to be drawn therefrom, supporting a conviction in the light most favorable to the verdict. United States v. Triplett, 922 F.2d 1174, 1177 (5th Cir.1991), cert. denied, --- U.S. ----, 111 S.Ct. 2245, 114 L.Ed.2d 486 (1991). We ask whether a rational jury could have found each defendant guilty beyond a reasonable doubt. Every reasonable theory of innocence need not be excluded. All credibility choices are decided in favor of the government. United States v. Montemayor, 703 F.2d 109, 115 (5th Cir.), cert. denied, 464 U.S. 822, 104 S.Ct. 89, 78 L.Ed.2d 97 (1983); United States v. Green, 964 F.2d 365 (5th Cir.1992); United States v. Breque, 964 F.2d 381 (5th Cir.), reh'g denied en banc, 971 F.2d 750 (5th Cir.1992).

I. FULLER'S CONVICTION

Fuller calls into question the sufficiency of evidence to convict him on the attempt to conduct a transaction proscribed by 18 U.S.C. § 1956(a)(3)(B). This statute criminalizes the laundering of funds received from an unlawful activity. It is well settled that mere preparation alone will not suffice to support conviction for conducting a financial transaction affecting interstate commerce. There must be a substantial In order to convict under 18 U.S.C. § 1956, the government must prove beyond a reasonable doubt that the defendant involved himself in a financial transaction with property represented by the undercover agent to be the product of a specified unlawful activity. A specified unlawful activity, according to the statute, includes "dealing in narcotic or other dangerous drugs" punishable by imprisonment for not more than one year. 18 U.S.C. §§ 1956(c)(7)(A) and 1961(1). The government must also prove beyond a reasonable doubt that the defendant knew the illicit source of the funds and that the laundering was done with the intent to conceal or disguise the nature, location, source, ownership or control of the property. 18 U.S.C. § 1956(a)(3)(B). This circuit has adopted a two-step test for proof of attempt:

                step taken toward the commission of a crime.   Fuller accepted drug money from an undercover agent and moved to depart from the hotel room.   Fuller

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