U.S. v. Garcia-Emanuel

• Decision Date: 25 January 1994
• Docket Number: GARCIA-EMANUE,D,Nos. 91-5131,91-5139,s. 91-5131
• Citation: 14 F.3d 1469
• Parties: UNITED STATES of America, Plaintiff-Appellee/Cross-Appellant, v. Mario R.efendant-Appellant/Cross-Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1469

14 F.3d 1469

62 USLW 2487

UNITED STATES of America, Plaintiff-Appellee/Cross-Appellant, v. Mario R. GARCIA-EMANUEL, Defendant-Appellant/Cross-Appellee.

Nos. 91-5131, 91-5139.

United States Court of Appeals Tenth Circuit.

Jan. 25, 1994.

David E. O'Meilia, Asst. U.S. Atty. (Tony M. Graham, U.S. Atty., with him on the briefs), Tulsa, OK, for plaintiff-appellee/cross-appellant.

Thomas Michael Martin, Jonesboro, GA, for defendant-appellant/cross-appellee.

Before BALDOCK, LAY, ¹ and McKAY, Circuit Judges.

McKAY, Circuit Judge.

On April 1, 1991, a jury in the Northern District of Oklahoma convicted Mario R. Garcia-Emanuel of one count of conspiracy to possess with intent to distribute and to distribute cocaine, one count of continuing criminal enterprise (hereinafter CCE), five counts of income tax evasion, one count of conspiracy to launder money, and seventeen counts of money laundering. The district court denied Defendant's motion for a judgment of acquittal on cocaine conspiracy and on the CCE. However, the court granted a judgment of acquittal pursuant to Rule 29(c) on all seventeen money laundering counts and on the money laundering conspiracy. Both sides timely appealed.

I

Defendant challenges the sufficiency of the evidence to support the convictions for the cocaine conspiracy and the CCE. In reviewing a challenge to the sufficiency of the evidence, this court follows a well-established test.

[T]he evidence both direct and circumstantial, together with reasonable inferences to be drawn therefrom, is sufficient if, when taken in the light most favorable to the government, a reasonable jury could find the defendant guilty beyond a reasonable doubt. Further, the evidence presented to support the conviction must be substantial; that is, it must do more than raise a mere suspicion of guilt.

United States v. Sanders, 928 F.2d 940, 944 (10th Cir.) (internal quotations and citations omitted), cert. denied, --- U.S. ----, 112 S.Ct. 142, 116 L.Ed.2d 109 (1991).

Defendant's appeal on the cocaine conspiracy and the CCE is perfunctory. After reciting the standard of review, he merely claims that "[t]he evidence may have been sufficient to show that the government's witnesses conspired with each other but there was insufficient evidence to convince a reasonable mind that the defendant was a part of that conspiracy." (Def.'s Br. at 5-6.) Regarding the CCE, he points out that the government is required to prove that Defendant was the manager or organizer of at least five other persons involved in the CCE. He then states, "The evidence ... did not prove beyond a reasonable doubt that this defendant was the organizer or manager of any enterprise other than his mexican [sic] restaurant." Id. at 6. No argument is offered beyond these conclusory statements.

A brief review of the record reveals why this is so. Far from being insufficient, the evidence was overwhelming. No fewer than four co-conspirators testified at trial to Defendant's central role in the conspiracy. In addition, the evidence, viewed in the light most favorable to the government, supported the jury's finding that Defendant was the organizer, supervisor, or manager of eight other individuals. The trial court was entirely correct in denying the motion for a judgment of acquittal on these counts. We AFFIRM the trial court's denial of a judgment of acquittal on counts 1 and 2.

II

In its cross-appeal, the government asserts that the trial court erred in granting a judgment of acquittal on the money laundering and money laundering conspiracy counts. The district court found the evidence insufficient to sustain any of these counts.

The record, viewed in the light most favorable to the government as required by Sanders, shows that Defendant and his wife engaged in a wide variety of transactions involving the proceeds of his criminal enterprise. They paid their mortgage, bought some land, invested in an insurance company, collected Paso Fino riding horses, built a riding area, bought a pickup truck and horse trailers, and wired money to someone in Colombia. They paid in either cash, personal checks, or cashier's checks. While not all transactions were conducted in Defendant's name (some were in his wife's name, others were in the name of the Guadalajara Restaurant, which he owned), Defendant or his restaurant, or both, were conspicuously involved in each transaction. All told, the government charged that seventeen of the transactions constituted money laundering under 18 U.S.C. Sec. 1956(a)(1)(B)(i) (1988). ²

The district court granted a judgment of acquittal with respect to all the money laundering counts based on the discussion of money laundering in Sanders, which it read as requiring the government to prove that the transactions were structured to "conceal[ ] ... the identity of the person providing the illicit proceeds." (Appellant's App. at 4.) Because Defendant was so conspicuously involved in the transactions, and because it found that "[t]he Guadalajara Restaurant, for our purposes here, was Mario Garcia," (id. at 5), the court granted the judgment of acquittal.

We agree that on twelve of the seventeen counts the government failed to prove a violation of Sec. 1956(a)(1)(B)(i). However, because we disagree with the district court's view of Sanders, we reinstate five of the convictions.

A

A review of the statute reveals that in order to prevail at trial, the government was required to prove four elements beyond a reasonable doubt: (1) that Defendant engaged in a financial transaction; (2) that Defendant knew that the property involved in that transaction represented the proceeds of his unlawful activities; (3) that the property involved was in fact the proceeds of that criminal enterprise; and (4) that Defendant knew that "the transaction [was] 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 the specified unlawful activities. 18 U.S.C. Sec. 1956(a)(1)(B)(i). In this appeal, the only challenge is to the fourth element, which we will refer to as the "design requirement."

This circuit first addressed the design requirement of the money laundering statute in Sanders, where we reversed the conviction of a man charged with using drug proceeds to purchase two automobiles. Even though one of the cars was placed in the name of the defendant's daughter, and even though the defendant's wife signed the daughter's name, we found that the purchase was so open as to negate any inference of a design to conceal. Id. at 946. ³

It is true that Sanders stated that "the purpose of the money laundering statute is to reach commercial transactions intended (at least in part) to disguise the relationship of the item purchased with the person providing the proceeds...." Id. Defendant contended successfully in the trial court that this statement requires a judgment of acquittal unless there is evidence that the transactions were structured to conceal Defendant's identity. (Appellant's App. at 4.) We disagree. As we explained in United States v. Lovett, 964 F.2d 1029 (10th Cir.), cert. denied, --- U.S. ----, 113 S.Ct. 169, 121 L.Ed.2d 117 (1992), there is "no requirement in the statute or in Sanders that every money laundering conviction must be supported by evidence of intent to conceal the identity of the participants to the transaction." Id. at 1034. Rather, "the statute is aimed broadly at transactions designed in whole or in part to conceal or disguise in any manner the nature, location, source, ownership or control of the proceeds of unlawful activity." Id. at 1034 n. 3.

B

Although the trial court based its judgment of acquittal on an erroneous view of Sanders, we nevertheless affirm on twelve of the counts.

Since 1991, challenges to the design requirement of money laundering have become a growth industry, with at least fifteen reported cases from the various courts of appeals. Given the wide range of money laundering claimed by the government in this case, and the prevalence of appeals on this point, it is useful to review both the statute and the recent case law to discern the principles that govern these appeals.

The core issue in Sanders was the government's contention that the money laundering statute should be interpreted broadly to include all purchases made by persons with knowledge that the money used represents the proceeds of illegal activity. We rejected that argument.

To so interpret the statute would, in the court's view, turn the money laundering statute into a "money spending statute." This interpretation would be contrary to Congress' expressly stated intent that the transactions being criminalized in the statute are those transactions "designed to conceal or disguise the nature, the location, the source, the ownership or the control of the proceeds of specified unlawful activity."

Sanders, 928 F.2d at 946 (quoting Sec. 1956(a)(1)(B)(i)).

Implicit in the Sanders formulation is the difficult task of separating money laundering, which is punishable by up to twenty years in prison, from mere money spending, which is legal. This, of course, is an issue of congressional intent.

We agree with the Executive Branch statements quoted by the prosecution as to the purposes of the money laundering statute. The President's Commission on Organized Crime described money laundering as schemes designed to assist criminals who "seek to change large amounts of cash ... into an ostensibly legitimate form, such as business profits or loans, before using those funds for personal benefit...." President's Commission on Organized Crime, The Cash Connection: Organized Crime, Financial Institutions, and Money Laundering, at 7 (Interim Report, Oct. 1984) (quoted in United States v. Cuevas, 847 F.2d 1417, 1424 n. 19 (9th Cir.1988), cert. denied, 489 U.S. 1012, 109 S.Ct. 1122, 103 L.Ed.2d 185 (1989)) [hereinafter The Cash Connection ] (emphasis added). Similarly, the ...