U.S. v. Prince

• Decision Date: 16 December 1999
• Docket Number: 98-6362,Nos. 98-6361,s. 98-6361
• Citation: 214 F.3d 740
• Parties: (6th Cir. 2000) United States of America, Plaintiff-Appellee, v. John R. Prince (98-6361), Tony White (98-6362), Defendants-Appellants. Argued:
• Court: U.S. Court of Appeals — Sixth Circuit

Page 740

214 F.3d 740 (6th Cir. 2000)

United States of America, Plaintiff-Appellee, v. John R. Prince (98-6361), Tony White (98-6362), Defendants-Appellants.

Nos. 98-6361, 98-6362

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

Argued: December 16, 1999

Decided and Filed: June 1, 2000

Rehearing Denied June 29, 2000

Rehearing and Suggestion for Rehearing En Banc Denied Aug. 10, 2000

Appeal from the United States District Court for the Western District of Tennessee at Jackson. No. 97-10044--James D. Todd, District Judge. [Copyrighted Material Omitted]

[Copyrighted Material Omitted]

[Copyrighted Material Omitted]

[Copyrighted Material Omitted] Richard Leigh Grinalds, ASSISTANT UNITED STATES ATTORNEY, Jackson, Tennessee, for Appellee.

April R. Ferguson, OFFICE OF THE FEDERAL PUBLIC DEFENDER FOR THE WESTERN DISTRICT OF TENNESSEE, Memphis, Tennessee, G. William Hymers III, HARDEE, MARTIN, JAYNES & IVY, Jackson, Tennessee, for Appellants.

Before: MERRITT and SILER, Circuit Judges; BECKWITH,^* District Judge.

OPINION

BECKWITH, District Judge.

Defendant Prince raises on appeal three issues challenging his convictions. Defendant White raises on appeal two issues challenging his convictions and two issues challenging his sentence.

Beginning on or around January 2, 1991, Defendant White devised and engaged in a scheme to "defraud and obtain money by means of false and fraudulent pretenses, representations and promises." Defendant White represented to certain individuals that he was "bonded with" the U.S. Bankruptcy Court and that this enabled him to buy assets involved in bankruptcies which he could then sell for a sizeable profit. Defendants Prince and White solicited individuals to invest in their alleged plan to purchase and then sell these assets. Investors contributed money for purchasing property and for covering alleged costs associated with purchasing property involved in bankruptcies, e.g., taxes, accountant fees, closing costs, etc. The government established at trial that individuals could not purchase property from the bankruptcy court as was represented by Defendants.

According to the evidence presented at trial, Defendants physically obtained investors' money through one of three types of arrangements. Under one arrangement, Defendants directed investors to wire transfer the money into the bank accounts of third parties. Per a pre-arranged agreement with either or both Defendants, the third party wrote a check in the amount of the transfer, cashed that check, and then transferred the money in cash to Defendant Prince. On at least a couple of occasions, Prince received a personal check, rather than cash, from the third party. On at least one occasion the third party transferred the cash to another third party who then transferred the cash to Prince. On all occasions Prince eventually transferred the money to White. Prince explained to some investors that money needed to be wired to a third party's account because Prince did not have a bank account and/or that he was in bankruptcy and a monetary transfer would cause the bankruptcy court to attach his account.

Under a second arrangement, Defendants directed investors to wire transfer money via Western Union to third parties. Per a pre-arranged agreement with either or both Defendants, the third party signed for and received the money and then transferred it in cash to Defendant Prince. Prince then transferred to Defendant White the money received from the third parties.

Under a third arrangement, Defendants directed investors to wire transfer money via Western Union to Prince. Prince signed for and received the money from a Western Union representative. Prince then transferred the money to White.

It was not established at trial how Defendants disposed of the money fraudulently obtained. Victims testified that they had not received any of the money they had invested.

On May 18, 1998, a federal grand jury returned a superseding indictment in which Counts 1 through 16 charged both Defendants with wire fraud and aiding and abetting the commission of wire fraud and Counts 17 through 85 charged both Defendants with money laundering and aiding and abetting the commission of money laundering. A jury trial commenced against Defendants on June 3, 1998. At the close of the government's case, the court entered a judgment of acquittal on Count 33. The jury found Defendants guilty on all remaining counts.

In the interest of economy, we will provide the remaining relevant facts below as we address the issues raised on appeal.

A. Sufficiency of the Evidence

Defendant Prince contends that the evidence was insufficient to convict him of money laundering.

The standard of review for a claim of insufficient evidence is "whether, taking the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt." United States v. Haun, 90 F.3d 1096, 1100 (6th Cir. 1996) (citations omitted). A defendant challenging the sufficiency of the evidence "'bears a very heavy burden.'" United States v. Wright, 16 F.3d 1429, 1439 (6th Cir. 1994) (citations omitted), cert. denied, 512 U.S. 1243, 114 S.Ct. 2759, 129 L.Ed.2d 874 (1994). Circumstantial and direct evidence are afforded the same weight. United States v. Blakeney, 942 F.2d 1001, 1010 (6th Cir. 1991) (citations omitted); United States v. Griffith, 17 F.3d 865, 872 (6th Cir. 1994) ("'[i]t has long been recognized ... that circumstantial evidence ... can be sufficient to support a jury's determination...'") (quoting United States v. Scruggs, 549 F.2d 1097, 1104 (6th Cir.), cert. denied, 434 U.S. 824, 98 S.Ct. 70, 54 L.Ed.2d 81 (1977)). We will reverse a judgment for insufficient evidence if, after viewing the record as a whole, we conclude that the judgment is not supported by substantial and competent evidence. Blakeney, 942 F.2d at 1010 (citing United States v. Ellzey, 874 F.2d 324, 328 (6th Cir. 1989)).

Defendant Prince challenges his convictions for money laundering under 18 U.S.C. section 1956(a)(1)(B)(i)¹. The elements of the charged money laundering offenses are:

(1) use of funds that are proceeds of unlawful activity; (2) knowledge that the funds are proceeds of unlawful activity; and (3) conduct or attempt to conduct a financial transaction, knowing that the transaction is designed in whole or in part to disguise the nature, location, source, ownership or control of the proceeds.

United States v. Moss, 9 F.3d 543, 551 (6th Cir. 1993).

On appeal, Defendant Prince first asserts that the money obtained through the offense of wire fraud did not become proceeds of unlawful activity as defined in the money laundering statute until he physically obtained the funds of the wire transfer. He concludes that once he obtained these funds, he did not conduct or attempt to conduct a transaction and therefore he did not violate the statute. Second, Prince argues that if a transaction occurred, the proof does not establish that it was conducted in an attempt to conceal the nature and source of the money. Third, Prince contends that there was "no substantial evidence" to support a conviction of aiding and abetting.²

Prince has failed to establish that insufficient evidence supports the three elements of money laundering.

1. Use of funds that are proceeds of an unlawful activity

Under the first element of money laundering, the funds allegedly laundered by Defendant Prince must be the proceeds of an unlawful activity. Specifically, the funds must represent proceeds from some form of activity that constitutes a felony. 18 U.S.C. § 1956 (c)(1). "Proceeds" include "'what is produced by or derived from something (as a sale, investment, levy, business) by way of total revenue.'" Haun, 90 F.3d at 1101 (quoting Webster's Third New International Dictionary 1807 (1971)).

In this case, the indictment identifies wire fraud as the underlying felony from which the proceeds were derived. The elements of wire fraud, as prescribed under 18 U.S.C. section 1343,³ are as follows: (1) a scheme or artifice to defraud (2) use of interstate wire communications in furtherance of the scheme;⁴ and (3) intent to deprive a victim of money or property. United States v. Merklinger, 16 F.3d 670, 678 (6th Cir. 1994); United States v. Ames Sintering Co., 927 F.2d 232, 234 (6th Cir. 1990) (citations omitted). Defendants must have used the proceeds of the acts of wire fraud to commit money laundering.

We conclude that the money, once wired by the victims, constituted proceeds of wire fraud. We find instructive the following cases decided in other circuits. United States v. Savage, 67 F.3d 1435 (9th Cir. 1995), cert. denied, 516 U.S. 1136, 116 S.Ct. 964, 133 L.Ed.2d 885 (1996), supports the proposition that Prince did not need to have physical possession of the money before it could be considered proceeds. In Savage, the defendant was convicted of various offenses including wire fraud and money laundering. Id. at 1437. The defendant defrauded individuals by promising that if they sent him $5,000, he would obtain foreign loans and earn each investor a return of $10 million. Id. The defendant recruited assistants to help him raise money, transfer it, and launder it. Id. at 1438. The assistant would direct investors to send money to the assistant's bank account. Id. In some of these transactions, the assistant transferred that money to a foreign bank account; at that point, the money either was sent back to the defendant's personal accounts in the United States or was used directly to pay the defendant's expenses. Id.

On appeal, the defendant in Savage contended that the international monetary transfers did not involve proceeds of unlawful activity as defined in section 1956. Id. at 1441-42. However, the Ninth Circuit concluded that the international monetary transfers did involve the proceeds of the previous acts of wire fraud. Id. at 1442. In appealing...