U.S. v. Long, s. 91-3434

• Decision Date: 20 October 1992
• Docket Number: 91-3440 and 91-3555,91-3436,Nos. 91-3434,s. 91-3434
• Citation: 977 F.2d 1264
• Parties: UNITED STATES of America, Appellee, v. Timothy P. LONG, Appellant. UNITED STATES of America, Appellee, v. Gerald H. BELL, Appellant. UNITED STATES of America, Appellee, v. Stephen James GOETHKE, Appellant. UNITED STATES of America, Appellant, v. Timothy P. LONG, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1264

977 F.2d 1264

UNITED STATES of America, Appellee, v. Timothy P. LONG, Appellant.

UNITED STATES of America, Appellee, v. Gerald H. BELL, Appellant.

UNITED STATES of America, Appellee, v. Stephen James GOETHKE, Appellant.

UNITED STATES of America, Appellant, v. Timothy P. LONG, Appellee.

Nos. 91-3434, 91-3436, 91-3440 and 91-3555.

United States Court of Appeals,

Eighth Circuit.

Submitted May 13, 1992.

Decided Oct. 20, 1992.

Rehearing and Rehearing En Banc

Denied in Nos. 91-3436

and 91-3440 Dec. 10, 1992.

Peter J. Thompson, Minneapolis, Minn., argued, for appellant Long.

Deborah Kay Ellis, St. Paul, Minn., argued, for appellant Bell.

Bruce H. Hanley, Minneapolis, Minn., argued (Bruce H. Hanley and Lisa Dejoras, on the brief), for appellant Goethke.

Nathan P. Petterson, Minneapolis, Minn., argued (Thomas B. Heffelfinger and Nathan P. Petterson, on the brief) for appellee.

Before FAGG, Circuit Judge, BRIGHT, Senior Circuit Judge, and BOWMAN, Circuit Judge.

BOWMAN, Circuit Judge.

Timothy P. Long, Stephen James Goethke, and Gerald Henry Bell appeal their convictions for laundering money derived from the illegal distribution of drugs and aiding and abetting the laundering of such money, all in violation of 18 U.S.C. §§ 2, 1956(a)(1)(B)(i) (1988), and for conspiring to launder such money in violation of 18 U.S.C. § 371 (1988). Bell also appeals his sentence. The government cross-appeals the decision of the District Court ¹ to depart downward from the guidelines in sentencing Long. We affirm.

I.

Long Cadillac, Long's Imports, and Long's Other Place are three automobile dealerships in or near St. Paul. All are owned by Richard Long. Timothy Long, who is Richard Long's son, was a car salesman at Long Cadillac. Gerald Bell was the owner of West Auto Brokers, a used car dealership in St. Paul. His cousin, Terrance Graham, was the finance and insurance manager at Long Cadillac from 1973 to July 1988, and then at Long Imports until July 1989. Stephen Goethke was the finance and insurance manager at Long Cadillac from early 1989 until early 1990.

In February 1987, David Lindsey, a drug dealer from the St. Paul area, purchased a 1985 Cadillac Fleetwood from Graham at Long Cadillac for about $16,000. ² Before Lindsey made this purchase, however, Graham advised him to keep his cash payments under $10,000 so as to avoid the IRS reporting requirements, and to finance the balance of the purchase price. When Lindsey told him that he never had been legitimately employed, Graham nevertheless assured him that financing could be arranged. Once it was approved, Lindsey, as required by this agreement, paid Graham $200 "under the table" for making the arrangements.

During the next two and a half years Lindsey purchased numerous automobiles in this manner, some from dealerships other than those owned by Richard Long. In each case, he made a cash down payment of less than $10,000 and arranged financing through Graham, paying him between $200 and $400 when Lindsey's financing for the particular purchase was approved. Graham arranged Lindsey's financing by putting false jobs on his credit applications. On Lindsey's third purchase, Graham used West Auto Brokers as Lindsey's bogus place of employment. Lindsey discovered this while signing the finance papers and thereafter continued to use West Auto Brokers to obtain financing each time he purchased a car. He still was required to contact Graham before attempting to obtain credit, and continued to pay Graham between $200 and $400 once his credit was approved.

Among the vehicles Lindsey purchased in this manner were a 1989 Cadillac Eldorado and a 1986 Mercedes-Benz. He bought the Cadillac from Timothy Long ³ at Long Cadillac for about $40,000, and the Mercedes from Graham at Long Imports for about $50,000. ⁴ In both cases he made cash down payments of less than $10,000, and in both cases he paid Graham for his services in preparing false credit applications and obtaining financing through West Auto Brokers. In fact, however, the false credit application for the Cadillac was completed by Long and Goethke.

Graham's assistance to Lindsey extended to helping placate the income tax authorities of the state of Minnesota, to which Lindsey never had paid state income taxes, and from which Lindsey was receiving letters. To deal with this problem, Graham had Lindsey sign an "Independent Dealer's Agreement" with West Auto Brokers. Bell signed this document on behalf of West Auto Brokers. Each month thereafter Graham would receive a West Auto Brokers paycheck made out to Lindsey and signed by Bell. He then would sell the check to Lindsey for its face amount plus $700. In this manner Lindsey could appear to have a legitimate income, and thus could pay taxes to satisfy the state. Lindsey considered this arrangement too expensive, however, and he discontinued it after receiving his third check.

John Taylor was another of the several drug dealers who had dealings with the defendants. He used drug money to purchase a 1987 Cadillac Fleetwood from Goethke for about $27,000. Goethke, the finance and insurance manager at Long Cadillac, sent Taylor to Long Imports to have Graham arrange financing. ⁵ Ultimately Taylor submitted a credit application listing a false job at a company called Carpets By Bob. Goethke processed that application and Taylor's credit was approved.

William Davis, another drug dealer, used drug money to purchase a 1986 Cadillac from James Long at Long's Other Place. Although Davis did have a job, his legitimate income was not high enough to acquire financing, so James Long obtained a false job for him at Carpets by Bob. ⁶ Next Davis and James Long went to Long Cadillac to meet with Goethke who then had Davis sign the "finance papers." Transcript at 503, 506 (Testimony of Davis).

During the government's investigation of this case, its agents conducted several interviews with Goethke. Goethke admitted that he knew Carpets by Bob was a "front" that was being used to provide a fictional cover of employment to drug dealers. Transcript at 1894-95 (Testimony of Agent Shoup). He also admitted that he processed a credit application by Taylor knowing that it was false, and that he processed other false credit applications including one for Davis.

On April 3, 1991, based upon these facts and a wealth of other information, ⁷ a United States grand jury charged Long, Goethke, Bell, and three other coconspirators with a total of ten counts of laundering drug money, conspiring to launder drug money, and structuring financial transactions. ⁸ After a month-long jury trial Long was convicted of conspiring to launder money derived from the unlawful distribution of drugs (Count I), and laundering such money through the sale of a 1989 Eldorado to David Lindsey (Count VI); Bell was convicted of conspiring to launder money derived from the unlawful distribution of drugs (Count I), aiding and abetting the laundering of such money in the sale of the 1989 Eldorado to Lindsey (Count VI), and aiding and abetting the laundering of such money in the sale of a 1986 Mercedes-Benz to Lindsey (Count VII); and Goethke was convicted of conspiring to launder money derived from the unlawful distribution of drugs (Count I), laundering such money through the sale of a 1987 Cadillac to John Lee Taylor (Count VIII), and laundering such money through the sale of a 1986 Cadillac to William Davis (Count IX). ⁹ The District Court sentenced Bell and Goethke to guidelines sentences of thirty-seven months in prison and three years of supervised release. In sentencing Long, the court departed downward from the guidelines sentencing range, imposing a sentence of five years on probation, twelve months in home detention, and 300 hours of community service. It also fined him $100,000.

In this appeal, Long, Bell, and Goethke challenge their convictions on a variety of grounds; Bell attacks his sentence on the ground that the District Court misapplied the guidelines; and the government objects to Long's sentence on the ground that the basis for the District Court's downward departure is not supported by the record. We affirm in all respects.

II.

A.

We consider first the appellants' claims that the evidence is insufficient to support their convictions. With respect to their substantive money laundering counts, all three contend that the evidence failed to show that: (1) they knew the proceeds involved in the transactions were the proceeds of some form of unlawful activity; (2) the transactions in question were designed to "conceal or disguise the nature, the location, the source, the ownership, or the control of [drug] proceeds," 18 U.S.C. § 1956(a)(1)(B)(i); ¹⁰ and (3) they knew the transactions were designed to so conceal or disguise drug proceeds. ¹¹ Reviewing the evidence in the light most favorable to the government and giving it the benefit of all reasonable inferences, see, e.g., United States v. Schubel, 912 F.2d 952, 955 (8th Cir.1990), we find the evidence sufficient to support the substantive money laundering convictions.

At trial, Lindsey testified that Long on one occasion counselled him to keep his payments below $10,000 because otherwise "they have to turn it in to the IRS." Transcript at 678 (Testimony of Lindsey). One of Long's co-workers testified that Long told him Lindsey was taking over the drug-dealing business of an individual named Ralph Duke, who was prominently identified with illicit trade in drugs. Another co-worker testified that, after driving Lindsey's car, Long said he was "glad [Lindsey] didn't leave a couple of bags of, you know, drugs in the car." Transcript at 132 (Testimony of Robert Mrak). Long testified that he never asked about Lindsey's job. From this evidence, a reasonable jury could conclude that Long knew Lindsey was paying for his cars with drug money.

The evidence of Goethke's knowledge is even more damning. In the sales of the 1987 Fleetwood to Taylor and the 1986...