U.S. v. Leung

• Decision Date: 21 November 1994
• Docket Number: Nos. 91,92,D,s. 91
• Citation: 40 F.3d 577
• Parties: UNITED STATES of America, Appellee, v. Lai-Moi LEUNG and Seow Ming Choon, Defendants-Appellants. ockets 93-1784, 93-1880.
• Court: U.S. Court of Appeals — Second Circuit

Page 577

40 F.3d 577

UNITED STATES of America, Appellee, v. Lai-Moi LEUNG and Seow Ming Choon, Defendants-Appellants.

Nos. 91, 92, Dockets 93-1784, 93-1880.

United States Court of Appeals Second Circuit.

Argued Aug. 29, 1994.

Decided Nov. 21, 1994.

William F. Fox, Jr., Washington, DC, for defendant-appellant Leung.

Robert L. Weinstein, New York City, for defendant-appellant Seow.

Thomas M. Finnegan, Asst. U.S. Atty., New York City (Mary Jo White, U.S. Atty., Paul A. Engelmayer, Asst. U.S. Atty., on the brief), for appellee.

Before: NEWMAN, Chief Judge, KEARSE and CARDAMONE, Circuit Judges.

JON O. NEWMAN, Chief Judge:

Defendants Lai-Moi Leung ("Leung") and Seow Ming Choon ("Seow") appeal from judgments of conviction entered after a jury trial by the District Court for the Southern District of New York (John F. Keenan, Judge) for conspiracy to possess and distribute a controlled substance, in violation of 21 U.S.C. Sec. 846 (1988), and for distribution and possession with intent to distribute a controlled substance, in violation of 21 U.S.C. Sec. 841(a) (1988). On appeal, the defendants assert that the District Court committed legal errors in pretrial procedure, trial rulings, and sentencing determinations. We conclude that none of the asserted errors justifies a new trial for either defendant. However, remarks made at the sentencing of Leung, though doubtless uttered with no improper intent, could reasonably be perceived as inappropriate and therefore prompt us to remand for resentencing.

Background

Leung and Seow were both arrested on June 30, 1992, after they participated in a heroin transaction at the Tien Hau Kung Temple ("the Temple"), a Taoist temple in lower Manhattan. Leung owned the Temple and employed Seow as a Taoist master. The investigation of Leung's narcotics activities had begun in April 1989, when agents of the Drug Enforcement Administration ("DEA") arrested Wan Shu Cheng ("Cheng") on narcotics charges and seized 11.2 kilograms of heroin. While Cheng was incarcerated, he began cooperating with the DEA. Near the beginning of 1990, Cheng's brother Zheng also agreed to cooperate with the DEA, on the understanding that his cooperation would be "credited" to Cheng at Cheng's sentencing for his own narcotics offenses. The DEA investigation targeted Cheng's former coconspirators, including Leung. Zheng had already assisted Cheng in heroin deals with Leung before Cheng had begun cooperating with the DEA. After he began cooperating, in January 1990, Zheng spoke numerous times with Leung, who by then had acquired and moved to the Temple. These conversations primarily concerned past and potential future heroin transactions, but no new transactions took place at that time.

In late June 1992, Leung telephoned Zheng and invited him to meet with her at the Temple. During that meeting she told Zheng that she had heroin available for him to purchase. A few days later, in the afternoon of June 30, Zheng again met with Leung at the Temple to finalize the transaction. Leung told Zheng that she had six 700-gram units of heroin for sale at $95,000 per unit. She proposed selling the units one at a time, but was also prepared to sell all six in one transaction. She insisted, however, that the transaction be completed that day. At the end of this meeting Leung told Zheng to call the Temple in an hour, and that Seow would be there at that time if she was not.

Later that day Zheng called the Temple and spoke with Seow several times. These conversations were recorded, and translated transcripts were entered into evidence. The parties disagree, however, whether the recorded conversations show that Seow knew that the transaction he was discussing involved heroin. During their last conversation that afternoon, Seow promised Zheng that he would summon Leung back to the Temple. Zheng then indicated that he wanted to make the entire transaction at one time, and Seow acknowledged this request. When Zheng arrived at the Temple shortly thereafter, he was greeted by both Leung and Seow, and the latter handed Zheng a plastic bag that Leung had just draped with ceremonial flags. The bag Zheng received contained six bricks that tested positive for heroin. Each brick was wrapped in yellow paper, and the whole bundle was covered with the ceremonial flags. At the time of the transfer, Seow asked several times when Zheng would return with the ceremonial flags, while Leung asked when he would return with the money. Zheng promised them that he would be back in an hour.

Approximately one hour later, Zheng called the Temple again to tell Leung that a "friend" would soon be delivering the money. Although Leung had left the Temple, Seow assured Zheng that the latter's friend could leave the money with him. Zheng protested that a large sum was involved, but Seow insisted that Leung had "instructed" him already. When a DEA agent who was posing as Zheng's friend arrived at the Temple, purportedly to tender the payment, Seow indicated that Leung was still away but that he could receive the money in her absence. Seow was then arrested, and Leung was arrested shortly thereafter.

A search of the Temple pursuant to a warrant turned up evidence indicating that Leung leased six safe-deposit boxes at the Hang Seng Bank. The safe-deposit boxes were subsequently searched pursuant to a second warrant; this search turned up jewelry worth millions of dollars as well as records showing the existence of bank accounts in Leung's name. Records from these bank accounts were obtained pursuant to a grand jury investigation of possible money laundering charges against Leung after Leung and Seow had already been indicted on narcotics charges. Leung and Seow were each convicted on the narcotics charges after a two-week jury trial before Judge Keenan.

Discussion

1. The Post-Indictment Grand Jury Subpoenas

The District Court denied Leung's motion to suppress bank records obtained by the Government through grand jury subpoenas that were issued after Leung had been indicted. Leung argues that the Government procured the subpoenas primarily for the impermissible purpose of preparing for trial, and that the bank records therefore should not have been admitted into evidence. She points out that the bank records related to accounts listed under the pending indictment's third count, concerning forfeitures. In a hearing before the District Court, the prosecutor conceded the sequence of events alleged by Leung but represented that the grand jury subpoenas were issued as part of a continuing investigation into potential money laundering charges against Leung pursuant to 18 U.S.C. Sec. 1956. The District Judge, noting that the subpoenas themselves indicated that they were for the purpose of investigating alleged violations of the money laundering statute, accepted the Government's representation.

It is, of course, improper for the Government to use the grand jury for the sole or dominant purpose of preparing for trial under a pending indictment. United States v. Vanwort, 887 F.2d 375, 387 (2d Cir.1989), cert. denied, 495 U.S. 906, 910, 110 S.Ct. 1927, 1936, 109 L.Ed.2d 290, 299 (1990); In re Grand Jury Subpoena Duces Tecum Dated Jan. 2, 1985 (Simels ), 767 F.2d 26, 29 (2d Cir.1985). But where the grand jury investigation is not primarily motivated by this improper purpose, evidence obtained pursuant to the investigation may be offered at the trial on the initial charges. 8 James W. Moore et al., Moore's Federal Practice p 6.04 at 6-106 (1994). Because a presumption of regularity attaches to grand jury proceedings, Hamling v. United States, 418 U.S. 87, 139 n. 23, 94 S.Ct. 2887, 2918 n. 23, 41 L.Ed.2d 590 (1974); United States v. Torres, 901 F.2d 205, 232-33 (2d Cir.), cert. denied, 498 U.S. 906, 111 S.Ct. 273, 112 L.Ed.2d 229 (1990), a defendant seeking to exclude evidence obtained by a post-indictment grand jury subpoena has the burden of showing that the Government's use of the grand jury was improperly motivated, see United States v. Thompson, 944 F.2d 1331, 1337 (7th Cir.1991), cert. denied, --- U.S. ----, 112 S.Ct. 1177, 117 L.Ed.2d 422 (1992); United States v. Moss, 756 F.2d 329, 332 (4th Cir.1985); 8 Moore, supra, p 6.04, at 6-107. In determining the purpose of the grand jury action, this Court must give considerable deference to the relevant findings of the District Court; our review of these findings may, however, be more rigorous than would otherwise be appropriate under the "clearly erroneous" standard. See Simels, 767 F.2d at 29.

Leung failed to establish that the disputed grand jury subpoenas were issued for the sole or dominant purpose of aiding the Government in preparing for trial under the pending indictment. Contrary to Leung's contentions, the timing of the subpoenas does not undermine the presumption of regularity that attaches to the grand jury proceedings. Leung was arrested on June 30, and the existence of her bank accounts was first revealed during the search of her safe-deposit boxes on July 6. The indictment on the narcotics and forfeiture charges was returned eight days after that search, on the last day before a preliminary hearing would otherwise have been required under Fed.R.Crim.P. 5(c). The grand jury subpoenas were then issued five weeks after the indictment, before a trial date had been set. This sequence of events does not undermine the presumption that the grand jury was in fact investigating possible money laundering charges that were not included in the original indictment. Although Leung emphasizes that she was never indicted for money laundering, a grand jury investigation is not improper merely because it does not result in formal charges.

Leung nonetheless contends that this sequence of events was at least suspicious enough to shift the burden to the Government to come forward with evidence of specific grand jury activity in connection with the money laundering investigation. We disagree. A review of grand jury...