U.S. v. Howard

• Decision Date: 05 February 2003
• Docket Number: No. CRIM. 02-0079(RBW).,CRIM. 02-0079(RBW).
• Citation: 245 F.Supp.2d 24
• Parties: UNITED STATES of America v. Kinley W. HOWARD, Defendant.
• Court: U.S. District Court — District of Columbia

245 F.Supp.2d 24

UNITED STATES of America v. Kinley W. HOWARD, Defendant.

No. CRIM. 02-0079(RBW).

United States District Court, District of Columbia.

February 5, 2003.

COPYRIGHT MATERIAL OMITTED

Harvey Joseph Volzer, Shaughnessy, Volzer & Gagner, Washington, DC, for Kinley W. Howard.

Judith L. Kozlowski, U.S. Attorney's Office, Washington, DC, for U.S.

MEMORANDUM OPINION

WALTON, District Judge.

This matter is before the Court on the defendant's motion for judgment of acquittal on two counts of the indictment and a new trial on the remaining counts of the indictment. After careful consideration of the parties' pleadings, the Court concludes, as conceded by the government, that judgments of acquittal must be entered on counts four and five of the indictment (the money laundering counts). However, despite the defendant's claims of prejudice regarding the other three counts of the indictment, the Court finds all of these claims to be without merit and therefore concludes that he is not entitled to a new trial on counts one, two, and three of the indictment.

I. Summary of Facts:¹

The defendant in this matter, Dr. Kinley W. Howard, was accused of fraudulently acquiring control over the assets of the estate of his deceased aunt, Mildred Powell, by defrauding the Probate Division of the Superior Court of the District of Columbia to get himself appointed as a copersonal representative of his aunt's estate. In a five count indictment, Dr. Howard was charged with two counts of mail fraud (counts one and two), 18 U.S.C. § 1341 (2000); one count of wire fraud (count three), 18 U.S.C. § 1343 (2000); and two counts of engaging in monetary transactions in property derived from unlawful activity ("money laundering") (counts four and five), 18 U.S.C. § 1957 (2000). The mail fraud counts were based upon letters the defendant wrote on February 26, 1997, and March 26, 1997, respectively, to Riggs Bank and Paine Webber, Inc., closing the accounts of Mildred Powell at these institutions. Indictment ¶ 30, at 7-8. The wire fraud count alleged that on or about January 15, 1997, the defendant sent a letter from his office in Florida to Crestar Bank in Washington D.C., requesting the wire transfer of some of Ms. Powell's funds to an account he had established at the Florida First Bank, which resulted in $61,572.02 being wired from Crestar to the Florida First Bank on January 23, 1997. Id. H 4, at 9. On March 26, 1997, the defendant again sent a letter to Crestar requesting a further transfer of Ms. Powell's account assets. Thereafter, on or about April 9, 1997, the defendant caused a second wire transfer to be made in the amount of $12,859.98 from Crestar Bank to the Florida First Bank. Id. ¶ 6, at 9.

Count Four, although incorporating the first twenty-eight paragraphs of the indictment, specifically asserted that on or about April 9, 1997, the defendant engaged in money laundering by causing the wire transfer of the same funds ($12,859.98) that also constituted part of the predicate conduct for the wire fraud offense charged in count three of the indictment. Id. ¶ 2, at 10. Count Five, which again incorporates the first twenty-eight paragraphs of the indictment, specifically charged that on or about February 26, 1997, the defendant engaged in money laundering by causing the mail transfer of the same funds ($23,903.43) that also constituted the predicate conduct for count one of the indictment, wherein the defendant is charged with mail fraud. Id ¶ 2, at 10-11.

The parties appeared before the Court on August 20, 2002, for the commencement of the trial. However, before jury selection began, for the first time the defendant challenged, orally, the sufficiency of the money laundering counts based upon the theory that there was no illegal activity from which funds were acquired by the defendant and then laundered as alleged in the money laundering counts of the indictment, separate from the conduct the government also claimed constituted either mail or wire fraud as charged in counts one and three of the indictment, respectively. Prior to the Court's formal ruling on the defendant's challenge, the defendant filed a written motion to dismiss counts four and five, alleging that he could not be lawfully convicted of money laundering in violation of 18 U.S.C. § 1957 "where there is no proof of an independent criminal transaction separate from the underlying offense[,]" and that the indictment was flawed in this regard. In a Memorandum Opinion dated August 28, 2002, the Court denied the defendant's motion to dismiss. Although agreeing that a conviction for money laundering could not be based upon the same events that constituted either the mail or wire fraud charges, the Court concluded that dismissal was not required because the government had "alleged unlawful activity [other than the conduct charged in the mail and wire fraud counts] that preceded the activity that constituted the defendant's money laundering." United States v. Kinley W. Howard No. 02-0079, slip op. at 21 (D.D.C. Aug. 28, 2002) (Walton, J.). The Court also concluded that "even if details about this underlying unlawful conduct were not set forth in the indictment, this would not be grounds for dismissal of the indictment because whether the criminally derived proceeds `existed before the laundering transaction is a question of proof, not a question of the adequacy of the indictment.'" Id. at 24 (quoting United States v. Seward, 272 F.3d 831, 837 (7th Cir.2001)). Thus, the Court denied the defendant's motion to dismiss counts four and five of the indictment with the caveat that the defendant could renew his motion at the close of the government's case-inchief "based upon a challenge to the sufficiency of the evidence presented in support of the government's position that the laundered proceeds were derived from illegal activity." Id. at 24 n. 13.

On September 5, 2002, the jury found the defendant guilty of all five counts of the indictment. As to counts four and five, the jury had been instructed by the Court that if it found the defendant guilty of these counts, it "must indicate the specified criminal activity from which [it] concluded the money used in the money transaction alleged in [these] count[s] of the indictment [was] derived." Verdict Form at 2. Regarding count four, the jury concluded that the specified unlawful activity from which the laundered funds were obtained were part of the same funds that formed the basis for the wire fraud offense charged in count three of the indictment— the wire transfer of $12,859.98 from Crestar Bank to Florida First Bank on April 9, 1997. Similarly, the jury concluded that the specified unlawful activity in count five from which the laundered funds were acquired were the same funds that formed the basis for one of the mail fraud counts of the indictment (count one)—the mailing by Riggs Bank of a cashier's check in the amount of $23,903.43 on February 26, 1997. Thus, after receipt of the jury's verdict, the Court instructed counsel to file briefs addressing the legality of the defendant's money laundering convictions in light of the jury's findings regarding what constituted the specified criminal activity that formed the basis for the convictions of the money laundering charges.

On September 20, 2002, the defendant filed a Supplemental Memorandum in Support of Judgment of Acquittal ("Def.'s Mem."). In this pleading, the defendant argues that his convictions for money laundering can not survive because of the jury's inability to specify a predicate offense "which is separate from and prior in time to the alleged money laundering offense ..." Def.'s Mem. at 1. The defendant further argues that he was prejudiced as a result of the introduction of evidence regarding the money laundering charges and the denial by the Court of his request to introduce evidence that the government had denied him access to the property it had seized pending the resolution of a separate forfeiture proceeding the government had instituted, thus preventing him from making financial distributions to the estate's heirs. Finally, the defendant argues that the Court should have instructed the jury on the good faith and advice of counsel defenses. The government filed its Memorandum in Support of Dismissing the Two Money Laundering Counts ("Gov.'s Mem.") also on September 20, 2002, in which it agreed that based upon the jury's findings, the money laundering counts were not supported by specified unlawful activities separate from the acts that constituted the predicates for one of the mail and the wire fraud charges. The government, however, disagrees that the defendant suffered any prejudice regarding the mail and wire fraud charges. The Court will address each of the defendant's contentions below.

II. The Money Laundering Counts

In ruling on the defendant's motion for judgment of acquittal, the Court must "view the evidence in the light most favorable to the Government giving full play to the right of the jury to determine credibility, weigh the evidence and draw justifiable inferences of fact." United States v. Treadwell, 760 F.2d 327, 333 (D.C.Cir.1985) (citation omitted). The Court may only take the case away from the jury "when there is no evidence upon which a reasonable mind might fairly conclude guilt beyond a reasonable doubt." Id. (citation and internal quotation marks omitted).

The jury found the defendant guilty of two separate counts of money laundering. The specified unlawful activity that the jury concluded was the source of the funds the defendant laundered were also the same funds that formed the basis for the commission of two of the other counts of the indictment (i.e., one of the mail fraud counts and the wire fraud count). Although the Court denied the defendant's motion to dismiss the money laundering counts prior to the start of the trial, it warned the government at that time that it would have to prove at trial that the...