U.S. v. Reed, 95-1567

• Decision Date: 01 March 1996
• Docket Number: No. 95-1567,95-1567
• Citation: 77 F.3d 139
• Parties: UNITED STATES of America, Plaintiff-Appellant, v. Rosalind K. REED, Defendant-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 139

77 F.3d 139

64 USLW 2612

UNITED STATES of America, Plaintiff-Appellant, v. Rosalind K. REED, Defendant-Appellee.

No. 95-1567.

United States Court of Appeals, Sixth Circuit.

Argued Dec. 6, 1995.

Decided March 1, 1996.

David J. Debold, Asst. U.S. Atty. (argued and briefed), Detroit, MI, for Plaintiff-Appellant.

Cornelius Pitts, Detroit, MI and William B. Moffitt (argued and briefed), Moffitt, Zwerling & Kemler, Alexandria, VA, for Defendant-Appellee.

Before: MERRITT Chief Judge; KENNEDY, MARTIN, MILBURN, NELSON, RYAN, BOGGS, NORRIS, SILER, BATCHELDER, DAUGHTREY, and MOORE, Circuit Judges.

KENNEDY, J., delivered the opinion of the court, in which MERRITT, C.J., MARTIN, MILBURN, NELSON, RYAN, BOGGS, NORRIS, SILER, BATCHELDER, DAUGHTREY, and MOORE, JJ., joined. MARTIN, J. (pp. 143-44), also delivered a separate concurring opinion.

KENNEDY, Circuit Judge.

The government appeals the pre-trial dismissal of three counts of money laundering on the basis that the delivery or transfer of cash is not a "financial transaction" within the meaning of the money laundering statute, 18 U.S.C. § 1956. A majority of this court voted to hear this case en banc. For the following reasons, we reverse the decision of the District Court.

I.

Defendant Rosalind K. Reed, a criminal defense attorney, is charged with two counts of money laundering in violation of 18 U.S.C. § 1956(a)(1)(A)(i) for, on each of two occasions, accepting approximately $100,000, which represented the proceeds of unlawful activity, and then arranging for delivery of the currency to California with the intent of promoting a client's continued marijuana trafficking. ¹ She is also charged in a conspiracy count relating to the same acts. The government filed a pre-trial motion to submit these money laundering counts to the jury with the instructions that "a 'delivery' of cash is a 'financial transaction' " under the statute.

The government's brief in support of the motion sought to distinguish this case from this Court's decisions in United States v. Samour, 9 F.3d 531 (6th Cir.1993), and United States v. Oleson, 44 F.3d 381 (6th Cir.1995), which held that when a defendant delivered or caused the delivery of cash representing drug proceeds to another person for the purchase of more drugs, it was "mere transportation" and was not a violation of § 1956(a)(1)(A)(i).

In support of its motion, the government filed a brief indicating that its evidence would tend to establish the following:

At the time of her indictment on drug and money laundering charges, defendant was representing one Richard Sumpter. Sumpter was arrested in Detroit, Michigan, after he took possession of a van that had been driven from California to Michigan loaded with 560 pounds of marijuana. Apparently, Sumpter intended that this shipment of marijuana be sold by Jerome Maddox. Maddox lived in Detroit and was Sumpter's local distributor of marijuana. Maddox was also a neighbor of defendant. She, Sumpter, and Maddox were friends and defendant knew that Sumpter and Maddox were involved in the ongoing distribution of marijuana. Defendant was engaged to represent Sumpter.

During the course of this representation, defendant learned that Maddox owed Sumpter approximately $500,000 in past drug debts. Defendant conveyed messages back and forth between Sumpter and Maddox so they could determine the exact amount of the debt. Once they determined the exact amount, defendant facilitated repayment of the debt; she told Maddox to bring his marijuana proceeds to her office and arranged for the transfer of the money to a courier, who took the money back to California for Sumpter.

Two such transfers took place according to the government. The first occurred on or about February 11, 1994. Defendant arranged a meeting between Maddox and Sumpter's wife, who travelled to Detroit from California, so that Maddox could repay a portion of the money he owed Sumpter. The meeting took place at defendant's law office. When both individuals were present, defendant momentarily left her office, and Maddox gave Sumpter's wife approximately $96,000. Maddox then left the office and defendant returned. Pursuant to a prearranged plan, defendant and Sumpter's wife put the money in a bag and hid it in defendant's office where it would be picked up by a courier and transported to California for Sumpter. Within a few days a courier did indeed arrive at defendant's office. At defendant's direction, the office receptionist gave the bag containing the money to the courier.

The second transfer of marijuana proceeds occurred approximately one month later, on or about March 10, 1994. Defendant informed Maddox that Sumpter's wife was coming back to Detroit in order to collect more of the drug debt. Maddox arrived at defendant's office, as instructed by defendant, with approximately $96,000 in a cardboard box. He gave this money to Sumpter's wife. Once Maddox left, defendant and Sumpter's wife discussed the retrieval of the money by a courier. They put the money in a suitcase and, as before, hid it in defendant's office. A few days later the same courier arrived at defendant's office, took the suitcase, and transported the money to California. Federal agents arrested the courier upon his arrival in California.

The District Court, after finding itself bound by Samour and Oleson, denied the government's requested jury instruction and dismissed the money laundering counts. The government appealed pursuant to 18 U.S.C. § 3731, which authorizes it to appeal in a criminal case from an order dismissing an indictment as to any one or more counts.

II.

The sole issue we revisit en banc is a discrete question of statutory interpretation: Whether the delivery or transfer of cash, which is the proceeds of unlawful activity, to another person is a financial transaction within the meaning of the money laundering statute, 18 U.S.C. § 1956. The government argues that it is, and that this court, sitting en banc, should overrule Samour and Oleson to the extent that the holdings of those cases are inconsistent with this position.

Defendant argues that Samour and Oleson were correctly decided and that the facts alleged do not constitute a financial transaction for the purposes of the money laundering statute. ²

III.

A.

The counts dismissed by the District Court all alleged that defendant violated Title 18 U.S.C. § 1956(a)(1)(A)(i). That section states, in pertinent part:

(a)(1) Whoever, knowing that the property involved in a financial transaction represents the proceeds of some form of unlawful activity, conducts or attempts to conduct such a financial transaction which in fact involves the proceeds of specified unlawful activity--

(A)(i) with the intent to promote the carrying on of specified unlawful activity;

* * *

shall be [punished as set forth in this subsection].

"Financial transaction" is defined in § 1956(c)(4), which states, in pertinent part:

the term "financial transaction" means (A) a transaction which in any way or degree affects interstate or foreign commerce (i) involving the movement of funds by wire or other means or (ii) involving one or more monetary instruments....

"Transaction" is defined in § 1956(c)(3):

the term "transaction" includes a purchase, sale, loan, pledge, gift, transfer, delivery, or other disposition....

Finally, the term "Monetary instruments" is defined in § 1956(c)(5) and includes "currency of the United States."

We read these provisions to mean that giving drug proceeds to a courier is both a transfer and a delivery and involves the movement of funds by means of the courier, which satisfies the definition of "financial transaction" found in § 1956(c)(4)(A)(i). Further, delivering funds to a courier involves monetary instruments, namely the currency, which satisfies the definition found in § 1956(c)(4)(A)(ii).

Thus, except for our decisions in Samour and Oleson, the allegations against defendant here state a violation of the statute--defendant, knowing that the money was the proceeds of marijuana trafficking, engaged in a financial transaction with the intent to promote the carrying on of further drug activity. We turn then to our decisions in Samour and Oleson.

B.

The District Court dismissed the money laundering counts in the indictment because it found itself bound by this court's opinions in United States v. Samour, 9 F.3d 531 (6th Cir.1993) and United States v. Oleson, 44 F.3d 381 (6th Cir.1995).

Samour involved a defendant (Samour) who was convicted of money laundering under § 1956(a)(1)(A)(i) and (B)(i). On four separate occasions, Samour transferred drug proceeds to a courier who, in turn, used the proceeds to purchase marijuana and settle outstanding drug debts. Samour, 9 F.3d at 533-34. A panel of this court examined § 1956(a)(1)(A)(i) and the statutory definition of financial transaction in § 1956(c)(4) and concluded that "merely transporting cash does not meet the definition of a 'financial transaction' for purposes of the money laundering statute." Id. at 536. Applying this rule to the facts of the case as it understood them, a divided panel decided that Samour's activities constituted mere transportation and hence reversed his money laundering conviction. Id.

In Oleson a jury convicted the defendant of money laundering under § 1956(a)(1)(A)(i) for giving a courier over $100,000 in drug proceeds for the purpose of facilitating continued marijuana trafficking. Oleson, 44 F.3d at 384. The panel, finding Samour dispositive, held that these facts did not establish a requisite financial transaction and reversed the conviction. Id.

Upon re-examination of these cases and the money laundering statute, we now overrule Samour and Oleson to the extent that those cases found that the conduct of the respective defendants in delivering the money to a courier did not amount to, in the parlance of § 1956, "conduct[ing] or attempt[ing] to conduct" a "transfer [or] delivery" that "involv[ed]...