U.S. v. Koller

• Decision Date: 22 April 1992
• Docket Number: No. 90-3787,90-3787
• Citation: 956 F.2d 1408
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Joseph R. KOLLER, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1408

956 F.2d 1408

UNITED STATES of America, Plaintiff-Appellee, v. Joseph R. KOLLER, Defendant-Appellant.

No. 90-3787.

United States Court of Appeals, Seventh Circuit.

Argued Sept. 20, 1991.

Decided March 3, 1992.

Order on Denial of Rehearing and

Rehearing En Banc April 22, 1992.

Matthew L. Jacobs, Asst. U.S. Atty., Milwaukee, Wis. (argued), for plaintiff-appellee.

Michael O. Bohren, Milwaukee, Wis. (argued), for defendant-appellant.

Before BAUER, Chief Circuit Judge, RIPPLE, Circuit Judge, and FAIRCHILD, Senior Circuit Judge.

FAIRCHILD, Senior Circuit Judge.

A jury found Joseph Koller guilty of conspiring to distribute cocaine, distributing cocaine, possessing in excess of 500 grams of cocaine with the intent to distribute, money laundering, and possession of an interstate firearm as a convicted felon. Judge Evans, Eastern District of Wisconsin, sentenced him to 20 years on each of five counts and 27 years on each of three counts, all to be served concurrently. Koller appeals.

Shia Ben-Hur testified that he had sold cocaine to Koller on twenty-one occasions in 1987 and 1988. Koller resold some of this cocaine to Arlyn Ackley who sold it to an undercover agent on four occasions. Those sales formed the basis for Counts TWO through FIVE of the indictment charging violations of 21 U.S.C. § 841(a)(1). Ben-Hur was arrested for an unrelated cocaine sale in September 1988. Ben-Hur agreed to cooperate with the government in its investigation of several suspected drug traffickers, including Koller. Ben-Hur participated in a government controlled sale of 512 grams of cocaine to Koller, resulting in Count SIX of the indictment and an additional violation of § 841(a)(1). Koller was also charged with (Count ONE) and convicted of conspiring to distribute cocaine in violation of 21 U.S.C. § 846. Counts ONE and SIX involved more than 500 grams of cocaine. Koller was convicted on Count SEVEN, money laundering in violation of 18 U.S.C. § 1956(a)(1)(B)(i), and on Count EIGHT, possession of an interstate firearm as a convicted felon in violation of 18 U.S.C. § 922(g).

On this appeal Koller challenges various aspects of his conviction and sentence. Each argument will be addressed separately and any facts particularly relevant to that argument will be set out in the discussion.

I. MONEY LAUNDERING

Koller challenges the sufficiency of the evidence to support the money laundering conviction on count SEVEN. In April, 1988, Koller's girl friend, Jane Vossekuil, was taken into state custody for violation of her probation, because she had not paid her restitution obligation. She was told that her probation would be revoked unless she paid. Jane called Koller and asked him if he would pay it. He agreed and indicated that he would get some of the money from outstanding drug debts. After gathering the money, Koller went to the probation office and attempted to pay Jane's restitution obligation with over $2000 in cash. The probation officer, Ms. Ware, would not accept that amount of cash and told Koller that he needed to get a money order. Koller then took the cash to nearby Security Bank and purchased a money order. He told the teller that he needed the money in order to get his girl friend out of jail. There was no evidence that he was asked his name or that he made any misrepresentation to the bank. Koller returned to the probation office with the money order and used it to pay Jane's restitution obligation. Ms. Ware wrote out a receipt for the payment to "Gerald Kohler." Although Ms. Ware did not testify specifically that he told her his name was Gerald, she testified that she asked him how to spell his name or that she asked him how to spell "Gerald" and that he spelled it. She was unsure whether she confirmed the spelling of his last name. On cross examination she said that that was the only time he told her his name. A rational juror could infer from her testimony and the name on the receipt that Koller told her his first name was "Gerald" and could also infer that in doing so it was his design to conceal and disguise his identity as the owner of the money order and the funds it represented. ¹

Congress enacted the Money Laundering Control Act of 1986, Pub.L. No. 99-570, § 1352, 100 Stat. 3207-18 (codified at 18 U.S.C. § 1956), to make money laundering a crime and, thus, prevent drug traffickers from enjoying the profits of their crime. S.Rep. No. 433, 99th Cong., 2d Sess. 4 (1986). Senator Biden emphasized, upon introduction of the Senate Bill, that "[d]rug traffickers need money laundering to conceal the billions of dollars in cash generated annually in drug sales and to convert his [sic] cash into manageable form." Id. Section 1956(a)(1)(B)(i) makes it a crime to conduct a financial transaction knowing that the property involved in the transaction represents the proceeds of some form of unlawful activity and knowing that the transaction is designed in whole or in part to conceal or disguise the nature, the location, the source, the ownership, or the control of those proceeds.

There was a conflict in the evidence as to the source of the funds represented by the money order. Jane Vossekuil testified that Koller told her he was going to use the proceeds of his drug dealing, and there was evidence of such dealings. On the other hand, Ms. Vossekuil, Koller and others testified that he had borrowed the funds. Koller seems to argue that this was insufficient support for a verdict that the money originated from drug dealing, although he also seems to concede that the jury could disbelieve his witnesses. We think the jury could properly resolve this conflict against Koller.

Koller also argues that his payment of Ms. Vossekuil's obligation was not an offense because in a "classic" money laundering case the transaction is designed to hide the tainted money by converting it into something valuable which will provide a benefit for the money launderer. Here Koller obtained only Ms. Vossekuil's gratitude or perhaps her contractual obligation to repay the money.

It is true that one court has, in overturning money laundering convictions, considered whether the transaction could be described as a typical money laundering transaction, rejecting the argument that "the money laundering statute should be interpreted to broadly encompass all transactions, however ordinary on their face, which involve the proceeds of unlawful activity." United States v. Sanders, 928 F.2d 940, 946 (10th Cir.1991) (quoted in United States v. Jackson, 935 F.2d 832, 841 (7th Cir.1991). Sanders can readily be distinguished, and in Jackson, this court affirmed the conviction. We do not think the argument can be successful here. Even if Koller was making an outright gift to Ms. Vossekuil, a "transaction" is defined in this statute as including a gift. 18 U.S.C. § 1956(c)(3) (1988).

There are two transactions in this case, the purchase of the money order and the transfer of the money order to the probation officer in payment of Ms. Vossekuil's obligation. Because it is so clear that the purchase of the money order involved no concealment, we have considered, though not argued by Koller, whether that fact would prevent conviction for the second transaction.

In order to convict, the second transaction (where there was evidence of a design to conceal) must be a "financial transaction" as defined in 18 U.S.C. § 1956(c)(4). The part of the definition relevant here is as follows: "a transaction involving the use of a financial institution which is engaged in, or the activities of which affect, interstate or foreign commerce in any way or degree." 18 U.S.C. § 1956(c)(4)(B) (1988). The government did introduce evidence of the activity of Security Bank, the issuer of the money order, in and affecting interstate commerce. In the case before us, there is no evidence that the purchase and use of a money order, and in that sense a "use" of the bank which issued it, was any part of the design to conceal or disguise anything about the funds. Had Koller used cash, as he originally attempted, and concealed his ownership, there would have been no proof of a "financial transaction" and therefore no offense under § 1956(a)(1). Such a transaction would have been a "financial transaction" only if the transaction "in any way or degree affects interstate or foreign commerce." 18 U.S.C. § 1956(c)(4)(A). There was no evidence that it did. The statute does not, however, literally require that the use of the financial institution with the interstate commerce nexus be a part of, contribute to, or facilitate the design to conceal, and since the purpose of the interstate commerce nexus is to provide a predicate for federal legislative jurisdiction, we think that the use of the financial institution involved in the transaction may be incidental, as it was here, and need not be shown to have been a part of, contributed to, or facilitated the design to conceal.

II. SPEEDY TRIAL

Koller objects to his conviction as in violation of the Speedy Trial Act, 18 U.S.C. § 3161, and the Fifth and Sixth Amendments. A summary of the chronology will aid in understanding the discussion. The conspiracy charged in Count ONE continued from May 8, 1987, to August 10, 1988. Four of the substantive offenses occurred from November 10, 1987, to December 22, 1987. The other three occurred from April 8, 1988, to November 2, 1988. Koller was originally arrested on November 2, 1988, and formal charges, in the form of a complaint, were filed the following day. Koller was then held without indictment until December 8, 1988, when the complaint was dismissed because the defendant's state parole was subject to revocation and he was taken into state custody. A new complaint was issued on December 15, 1989, and Koller was arrested upon his release from state custody December 18, 1989, pursuant to a warrant. Koller was indicted on January 16, 1990, and brought before a judicial officer on January 18, 1990. A...