U.S. v. Orozco-Prada

Decision Date12 April 1984
Docket NumberOROZCO-PRAD,H,668 and 669,Nos. 667,D,704,s. 667
Citation732 F.2d 1076
PartiesUNITED STATES of America, Appellee, v. Eduardoumberto Orozco-Prada, Paul Forand and Mahlon Clark, Defendants-Appellants. ockets 83-1264, 83-1265, 83-1272 and 83-1332.
CourtU.S. Court of Appeals — Second Circuit

Michael S. Feldberg, New York City, Asst. U.S. Atty., S.D.N.Y. (Rudolph W. Giuliani, U.S. Atty., S.D.N.Y., Roanne L. Mann, Asst. U.S. Atty., New York City, of counsel), for appellee.

Peter H. Morrison, New York City (Morrison, Paul & Beiley, P.C., Kevin T. Rover, New York City, of counsel), for defendant-appellant Eduardo Orozco-Prada.

Robert M. Simels, New York City, for defendant-appellant Humberto Orozco-Prada.

Rex Ryland, Jr., South Miami, Fla., for defendant-appellant Paul Forand.

Laurence B. Finegold, Seattle, Wash. (Jon R. Zulauf, Seattle, Wash., of counsel), for defendant-appellant Mahlon Clark.

Before FEINBERG, Chief Judge, and VAN GRAAFEILAND and KEARSE, Circuit Judges.

FEINBERG, Chief Judge:

Eduardo Orozco-Prada (Eduardo Orozco), Humberto Orozco-Prada (Humberto Orozco), Paul Forand and Mahlon Clark appeal from judgments of conviction entered in the United States District Court for the Southern District of New York, following a seven-week trial before Gerard L. Goettel, J., and a jury.

Appellant Eduardo Orozco headed an organization called Cirex International. Between 1978 and 1982, this organization laundered more than $150,000,000 in cash. The government's investigation, performed with the aid of undercover agent Edward Guillen who posed as a bank officer, established that the organization received large amounts of cash from various cities within the United States and from outside the country, and deposited the cash into different bank accounts maintained by Eduardo Orozco in his own name, in the names of other individuals and in the names of several Panamanian corporations. This money was then rapidly transferred into other accounts and ultimately outside the country. Cirex charged a commission for the service. The government argued at trial that a large percentage of the cash deposited into Cirex accounts constituted the proceeds of domestic drug transactions. Appellant Humberto Orozco, Eduardo Orozco's older brother, was a bookkeeper and record-keeper at Cirex.

Appellant Forand deposited a total of over $1,000,000 in cash with Cirex between November 1980 and September 1981. In particular, on March 4, 1981, he deposited $270,000 in cash. The next day, Eduardo Orozco instructed that this money be transferred to the bank account of a shipbuilding company in Alabama. The money was then used to purchase a vessel called the Northern Edge. Appellant Clark was the captain of this vessel at the time it was captured in Colombian territorial waters carrying a large amount of marijuana.

Following a two-year government investigation, appellants--along with other individuals--were indicted on multiple counts. Count One charged all four appellants with conspiring to distribute and to possess with intent to distribute Schedule I and II controlled substances, and to aid and abet such distribution and possession, in violation of 21 U.S.C. Sec. 846. Count Two charged Eduardo Orozco and Humberto Orozco with conspiring to defraud the United States and to commit currency and other offenses against the United States, in violation of 18 U.S.C. Sec. 371. Counts Three and Four charged Eduardo Orozco and Humberto Orozco with making false statements in a matter within the jurisdiction of the Internal Revenue Service, in violation of 18 U.S.C. Sec. 1001. Count Five charged Eduardo Orozco with violating the Travel Act, 18 U.S.C. Sec. 1952. Count Six charged Eduardo Orozco and Humberto Orozco with acting as a financial institution without filing Currency Transaction Reports for deposits exceeding $10,000, in violation of 31 U.S.C. Secs. 1081, 1059. Count Seven charged Eduardo Orozco with importing cash into the United States in amounts exceeding $5,000, without filing Reports of International Transportation of Currency or Monetary Instruments, in violation of 31 U.S.C. Secs. 1101, 1059.

The jury returned guilty verdicts against Eduardo Orozco on Counts One, Two, Four, Five, Six and Seven; against Humberto Orozco on Count Two; against Forand on Count One and against Clark on Count One. Humberto Orozco was found not guilty on Counts One, Four and Six. Count Three was dismissed at the end of the government's case.

Judge Goettel sentenced Eduardo Orozco to eight years imprisonment on Count One and five years on each of the other counts, and made all sentences concurrent. He also imposed on Eduardo Orozco a total committed fine of $1,035,000 and levied the costs of prosecution against him. Humberto Orozco was sentenced to 18 months imprisonment and a $5,000 fine; Forand to six months in a community treatment center, a three-year probationary term and a $25,000 fine; and Clark to six months imprisonment and three years probation.

Appellants raise a great number of different arguments. In particular, all three appellants convicted on Count One argue that there was insufficient evidence to sustain their drug conspiracy convictions. They contend that the link between their activities and actual drug transactions in the United States was too tenuous to support their conviction. Humberto Orozco, who was acquitted on Count One, argues primarily that there was insufficient evidence to support his conviction on Count Two. He argues that his presence at Cirex, even if coupled with knowledge of the ongoing activities, did not constitute sufficient proof of participation in a conspiracy. For reasons stated hereafter, we affirm the judgments of the district court, except that we withhold judgment for 30 days on Eduardo Orozco's conviction on Count One to allow the government to choose between resentencing or a new trial, as more fully set forth below.

I. Eduardo Orozco
A. The Indictment

We first consider Eduardo Orozco's argument that Count One failed to charge a crime. Count One charged that Eduardo Orozco and others conspired both to violate and to aid and abet the violation of 21 U.S.C. Sec. 841, which, among other things, makes it a crime "to ... distribute ... or possess with intent to ... distribute ... a controlled substance." The indictment alleges that the means used by Eduardo Orozco and others to further the conspiracy was to provide "a money laundering service involving currency deposits and check and wire transfers." Eduardo Orozco argues that simply dealing in the cash proceeds of transactions involving controlled substances is not a violation of section 841 and that, therefore, Count One fails to charge a conspiracy to violate this provision.

We find that this argument, on this record, has no merit. As we stated in United States v. Barnes, 604 F.2d 121, 154-55 (2d Cir.1979), cert. denied, 446 U.S. 907, 100 S.Ct. 1833, 64 L.Ed.2d 260 (1980),

Importers, wholesalers, purchasers of cutting materials, and persons who "wash" money are all as necessary to the success of the venture as is the retailer. They can all be held to have agreed with one another in what has been called a "chain" conspiracy.

Similarly, in United States v. Perry, 643 F.2d 38, 44 (2d Cir.), cert. denied, 454 U.S. 835, 102 S.Ct. 138, 70 L.Ed.2d 115 (1981), the majority held that defendants who "agreed to distribute diluents with the intent that they be mixed with heroin and distributed by one or more heroin networks" could be convicted "under 21 U.S.C. Sec. 846 of conspiring to violate 21 U.S.C. Sec. 841 by aiding and abetting the distribution of heroin." The court stated that "the knowing supply of a raw material necessary for the commission of a crime by another constitutes aiding and abetting that crime." And, in United States v. Rush, 666 F.2d 10, 11 (2d Cir.1981) (per curiam), we held that an individual who "supplied the cash which made the illegal venture possible" could be convicted of conspiring to import marijuana into the United States with intent to distribute it. Read in conjunction, these cases stand for the proposition that an agreement to engage in actions that are integral to the success of a drug venture prohibited by 21 U.S.C. Sec. 841--such as laundering proceeds, or supplying cash or raw materials--violates 21 U.S.C. Sec. 846 as a conspiracy to aid and abet the distribution of controlled substances.

This case is different from Bollenbach v. United States, 326 U.S. 607, 66 S.Ct. 402, 90 L.Ed. 350 (1946), and United States v. Freeman, 498 F.2d 569 (2d Cir.1974), upon which appellant heavily relies. In Bollenbach, the Court held that a defendant who helped dispose of transported securities that had been in interstate commerce could not properly have been convicted "for having conspired to transport securities across State lines merely on proof that he ... helped to dispose of the stolen securities after the interstate transportation was concluded." 326 U.S. at 611, 66 S.Ct. at 404 (emphasis added). Similarly, in Freeman, we held that "the mere fact that a person 'receives, relieves, comforts or assists' one who has been a member of an aborted or completed conspiracy does not make him a participant in the conspiracy or liable for substantive crimes committed during the pendency of the conspiracy." 498 F.2d at 575. Eduardo Orozco argues that these cases support his contention that the mere handling of the proceeds of drug transactions is not punishable under section 841. In this case, however, the indictment charges more than the mere handling of proceeds. It charges a conspiracy to aid and abet the distribution of controlled substances by means of a money laundering organization and identifies one instance (the Northern Edge incident) in which the organization financed and assisted a specific drug transaction. As noted above, a laundering service of this type furthers the distribution of...

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