U.S. v. London, No. 93-1898

• Court: United States Courts of Appeals. United States Court of Appeals (1st Circuit)
• Writing for the Court: Before CYR, Circuit Judge, COFFIN, Senior Circuit Judge, and BOWNES; BOWNES; Finally, nothing in the text of either page of the papers presented to the district court even remotely suggests that Hess, and not Weld; Before TORRUELLA, Chief Judge, COFF
• Citation: 66 F.3d 1227
• Parties: UNITED STATES, Appellee, v. Michael B. LONDON, Defendant, Appellant. . Heard
• Docket Number: No. 93-1898
• Decision Date: 04 May 1995

Page 1227

66 F.3d 1227 UNITED STATES, Appellee,
v.
Michael B. LONDON, Defendant, Appellant. No. 93-1898. United States Court of Appeals,
First Circuit. Heard May 4, 1995.
Decided Sept. 18, 1995.
Order Denying Rehearing and
Suggestion for Rehearing En Banc
Oct. 20, 1995.

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Henry D. Katz, Chelsea, MA, for appellant.

Nina S. Goodman, Attorney, with whom, David S. Kris, Attorney, Department of Justice, Criminal Division, Appellate Section, Washington, DC, Donald K. Stern, United

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States Attorney, Dina M. Chaitowitz, Assistant United States Attorney, and Michael Kendall, Assistant United States Attorney, Boston, MA, were on brief for appellee.

Before CYR, Circuit Judge, COFFIN, Senior Circuit Judge, and BOWNES, Senior Circuit Judge.

BOWNES, Senior Circuit Judge.

After a trial that spanned the better part of two months, a jury convicted defendant-appellant Michael B. London of conspiring to conduct and actually conducting the affairs of an enterprise through a pattern of racketeering activity ("RICO conspiracy" and "RICO substantive"), money laundering, failing to file currency transaction reports ("CTRs"), conspiring to commit extortion, and aiding and abetting extortion. Subsequent to the jury verdict, London also pleaded guilty to tax evasion. For his crimes, London was sentenced to 188 months' imprisonment and fined $500,000. In addition, he agreed to forfeit $865,000.

In this appeal, London challenges his convictions, arguing that the district court erred: (1) in failing to suppress certain evidence relevant to his counts of conviction; (2) in instructing the jury on the law regarding failure to file CTRs; and (3) in failing to grant his motion for a judgment of acquittal on the money laundering and RICO counts. After carefully considering the parties' arguments, we affirm.

I.

A. Factual Background

London operated Heller's Cafe ("Heller's"), a bar in Chelsea, Massachusetts. He also ran a check-cashing service, known as M & L Associates ("M & L"), out of a small enclosed area in the bar. M & L charged its customers a 1% or 1.5% commission on each check cashed. Both Heller's and M & L had at least one employee other than London.

The evidence at trial demonstrated that bookmakers tended to frequent Heller's and to use M & L as a check-cashing service. Sometimes, M & L cashed bookmaker checks that banks would not accept. For example, some checks were neither made out by nor payable to the bookmakers (or bookmakers' agents) who were cashing them. Others were made out either to fictitious names or to real persons or entities who were not to receive the funds. London neither asked about the names on the checks he cashed nor required that the checks be endorsed. And before December 17, 1986--the day on which federal agents executed a search warrant at Heller's, see infra at 1231--London never filed a CTR notifying the Internal Revenue Service ("IRS") of his many currency transactions involving more than $10,000. See 31 U.S.C. Sec. 5313(a) (requiring financial institutions to report currency transactions in the manner prescribed by the Secretary of the Treasury) and 31 C.F.R. Sec. 103.11(i)(3) (check-casher is a financial institution) and 31 C.F.R. Sec. 103.22(a)(1) (financial institutions must report all currency transactions involving more than $10,000 to the IRS).

London's operating procedures were a boon to his bookmaker customers. Not only did London provide these customers with an immediate and untraceable source of cash to pay their various expenses (including gamblers' winnings), he enabled them to accept checks from their own customers. This, in turn, increased business volume, for the ability to pay gambling debts by check encouraged gamblers to make larger and more frequent bets. It also made it easier for out-of-state gamblers to do business with local bookmakers, and possible for some gamblers to pay debts with company funds (and thereby gamble with money on which they paid no taxes).

London's promotion of bookmaking often took a more active form. In 1986, London operated a bookmaking operation with one Kenny Miller. He also helped run one Dominic Isabella's bookmaking operation while Isabella was ill. Finally, London acted as a "pay and collect" man for many of his bookmaker customers, making payments to winning gamblers and collecting payments from losers.

London also assisted Vincent Ferrara, the leader of an organized crime group, in collecting "rent" (i.e., protection money) from bookmakers. London identified certain of

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his bookmaker customers to Ferrara, telling him "anybody I get you get." London then summoned the bookmakers to Heller's to meet with Ferrara, who demanded that they pay him anywhere from $500 to $1000 (or more) per month for "protection" and help in debt collection. London collected rent payments and, at least once, passed along a request for debt collection assistance from a bookmaker who had been induced to accept Ferrara's protection.

As stated above, London never filed a CTR with the IRS prior to the execution of the search warrant on December 17, 1986. From December 18, 1986, through December 31, 1988, however, he filed 211 CTR's on behalf of M & L. Although London had instructed his customers to make certain that each check was for less than $10,000, London did cash individual checks that were in amounts greater than $10,000. When he cashed a group of checks for the same customer, London would often deposit the checks on different days or in different bank accounts. There was testimonial evidence tending to indicate that London was aware of the statutory and regulatory reporting requirements during the period in which he failed to file any CTRs with the IRS.

B. Procedural History

On October 28, 1986, in response to an application and affidavit made pursuant to an on-going investigation of London, his businesses, and his associates, the district court issued two orders authorizing the government to conduct electronic surveillance at Heller's. The first order authorized, for a thirty-day period, the interception of oral communications in and adjacent to the enclosed area in which M & L operated; the second authorized, also for a thirty-day period, the recording of wire communications made from two telephones located behind the bar. In order to minimize the interception of otherwise non-interceptable communications, the court's orders limited surveillance to times when named targets of the investigation were on Heller's premises. On December 3, 1986, the court extended each of the orders for an additional thirty days. Evidence derived from these interceptions was introduced against London at trial.

On December 17, 1986, federal agents applied to a magistrate judge for a warrant authorizing them to search Heller's for evidence of unlawful gambling, loansharking, distribution of narcotics, money laundering, and failure to file CTRs. The magistrate judge issued the warrant, authorizing the agents to search "Heller's Cafe, which occupies the first floor and basement of 110 Chestnut Street" and to seize "books and records, ledgers, correspondence, notes, slips, checks and any other documents, including bank records, which reflect unlawful gambling, loansharking, narcotics distribution, and failure to file currency transaction reports; and U.S. currency which constitutes proceeds of these offenses." The agents executed the warrant later that day, and seized, inter alia, almost all of the records found in the enclosed area from which M & L operated. Evidence seized in the course of this search was introduced against London at trial.

On April 11, 1990, a federal grand jury returned a two-count indictment charging London with income tax evasion. On May 10, 1990, the grand jury returned a fifty-one count superseding indictment charging London with, inter alia, the counts of conviction: one count of RICO conspiracy, 18 U.S.C. Sec. 1962(d); one count of RICO substantive, 18 U.S.C. Sec. 1962(c); twelve counts of money laundering, 18 U.S.C. Sec. 1956(a)(1); twelve counts of failing to file CTRs, 31 U.S.C. Secs. 5313(a) and 5322(b); one count of conspiring to commit extortion, 18 U.S.C. Sec. 1951; two counts of aiding and abetting extortion, 18 U.S.C. Secs. 2 and 1951; and one count of tax evasion for tax year 1985, 26 U.S.C. Sec. 7201. On September 5, 1991, the grand jury returned a second superseding indictment which charged no new offenses but brought the indictment within the purview of the United States Sentencing Guidelines by extending the period of the alleged RICO conspiracy to after November 1987.

On August 17, 1992, the district court orally denied London's previously-filed motion to suppress the evidence seized during the December 17, 1986, search of Heller's. On August

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18, 1992, the court issued a written memorandum and order denying London's previously-filed motion to suppress the fruits of the electronic surveillance.

Trial commenced on January 4, 1993, and concluded on February 19, 1993, when the jury returned guilty verdicts on the counts of conviction listed above. The other counts contained in the second superseding indictment either had been dismissed by the government prior to trial or were dismissed by the district court at trial. In addition, the jury acquitted London on one money laundering count. On June 30, 1993, the district court sentenced London. This appeal followed.

II.

As set forth above, London's appellate arguments fall into three main groups. First, London takes issue with the district court's denial of his suppression motions. Second, London challenges the jury instructions given in connection with the counts of the second superseding indictment charging him with failing to file CTRs. Third, London makes sundry arguments that there was insufficient evidence to support his money laundering and RICO convictions. We discuss each of London's arguments in turn.

A. Denial of the Motion to...