U.S. v. Tedder, 03-3345.

• Decision Date: 06 April 2005
• Docket Number: No. 03-3345.,03-3345.
• Citation: 403 F.3d 836
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. David Hampton TEDDER, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

403 F.3d 836

UNITED STATES of America, Plaintiff-Appellee, v. David Hampton TEDDER, Defendant-Appellant.

No. 03-3345.

United States Court of Appeals, Seventh Circuit.

Argued February 23, 2005.

Decided April 6, 2005.

Daniel J. Graber (argued), Office of the United States Attorney, Madison, WI, for Plaintiff-Appellee.

Peter Goldberger (argued), Ardmore, PA, for Defendant-Appellant.

Before CUDAHY, EASTERBROOK, and WILLIAMS, Circuit Judges.

EASTERBROOK, Circuit Judge.

For using his law license to help offshore gambling businesses conceal their identities and income, David Tedder has been convicted of conspiring to defraud the United States, see 18 U.S.C. § 371, by assisting a wagering enterprise that violated 18 U.S.C. § 1084, plus three counts of money laundering, see 18 U.S.C. § 1956(h), § 1957. No longer a member of the bar, Tedder is serving a sentence of 60 months' imprisonment and has been fined more than $1 million; the district court also ordered almost $2.8 million to be forfeited. (Tedder resigned from the California bar to forestall resolution of disciplinary charges. He has been enjoined from practicing law in Florida, which he had done there despite his lack of a license. Florida Bar v. Tedder, 790 So.2d 1110 (2001) (table).)

Section 1084(a) is a simple statute, providing: "Whoever being engaged in the business of betting or wagering knowingly uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest, or for the transmission of a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers, or for information assisting in the placing of bets or wagers," commits a crime. Tedder created and operated a business called Clear Pay to move money between gamblers in the U.S. and a Curacao business called Gold Medal Sports, which Tedder's clients operated as a sports book. The Attorney General of Florida had warned Western Union not to wire funds to Gold Medal Sports; Clear Pay offered a solution by preventing Western Union (and other intermediaries) from learning the funds' ultimate destination. Tedder also created Bahamian shell corporations, purportedly engaged in software development, to help his clients hide their involvement, and wired the gambling business's profits to nominee accounts of which he was the custodian, plus other foreign investments with a patina of legitimacy.

Tedder told his clients that the disguise would be impenetrable. He was wrong. The clients (Duane Pede and Jeff D'Ambrosia) were caught, pleaded guilty, and testified against Tedder — who contended that he had been so mistaken that he had not appreciated the legal problem. Although he was a lawyer, knew about § 1084, and even knew about criminal prosecutions of similar ventures (after which he whipped up still more layers in a futile attempt to shield his clients), Tedder told the jury that he thought that Gold Medal Sports and Clear Pay were upstanding businesses operated in compliance with all laws. This was essentially the tax protester's defense that he just didn't think that the law, however clear, applied to his endeavors. See Cheek v. United States, 498 U.S. 192, 111 S.Ct. 604, 112 L.Ed.2d 617 (1991). The district judge gave appropriate instructions to the jury, which did not believe Tedder's professions of ignorance and convicted him. Tedder maintained that he drew his understanding of federal law from observing conduct — Gold Medal Sports was not the only offshore gambling enterprise — as if the existence of bank robberies shows that it is lawful to steal money at gunpoint. Testimony about this curious approach to legal "research" did more to demonstrate Tedder's mendacity than to make out a defense. His multifarious endeavors to hide the source and disposition of Gold Medal Sports' funds revealed his true beliefs.

Tedder does not contest the sufficiency of the evidence. Instead he contends that the district judge erred in rulings about evidence. His lead argument is that the judge should have allowed him to present additional witnesses who would have testified that they do not think that § 1084 prohibits the sort of transactions in which Tedder engaged. (Section 1084 is not itself a specific-intent crime, but only a person who knows that the money has an unlawful source commits the offense of money laundering.) Tedder did not propose to present an advice-of-counsel defense based on what other persons told him. Had he done that, he would have been required to waive the attorney-client privilege and allow the prosecutor access to everything he said to his advisers and what they told him in return. Instead he wanted to show only that his (asserted) belief was widely shared by lay persons. How non-lawyers' misunderstandings could have reflected on a lawyer's legal analysis puzzled the district judge — it was at best weak circumstantial evidence about how the statute was understood. So the judge exercised her authority under Fed.R.Evid. 403 to curtail tangential or cumulative evidence and said that she would limit to two (or one plus Tedder himself, should he testify, as he did) the number of such witnesses. Tedder replied that two witnesses on this subject would suffice, thus waiving the argument he now advances.

By testifying, Tedder put his veracity at issue. To address that subject, the prosecutor called three witnesses who testified that Tedder is not a truth-teller. Under Fed.R.Evid. 608(a), this evidence had to take "the form of opinion or reputation" rather than specific instances of deceit. One witness, a lawyer, testified that Tedder's reputation for truthfulness in the legal community was "poor." Tedder's brothers were the other two witnesses; both testified that they had low opinions of his honesty. He contends that the family had been estranged for so long that the brothers' views were out of date, but honesty is more like climate than like weather: it is a stable attribute even though subject to daily variability. Rule 608(a) does not contain a time limit, so the fact that Tedder had not spoken with his brothers for a decade did not compel the judge to block them from testifying. See United States v. Pacione, 950 F.2d 1348, 1354 (7th Cir.1991). The long break in family relations was a subject for cross-examination and argument by counsel. As for the fact that the questions and answers used the word "honesty" rather than "truthfulness" (the language of Rule 608): lay jurors would be unlikely to perceive a difference, and neither did Tedder's lawyer, who failed to object. Using the vernacular was not plain error. See United States v. Manske, 186 F.3d 770, 775-76 (7th Cir.1999).

The district judge told the jury to consider character evidence "in the same way as all the other evidence in the case." That came from instruction 3.06 in the circuit's pattern jury instructions, captioned "Character and Reputation of Defendant." Tedder says that the judge instead should have used instruction 3.12, captioned "Character of a Witness." Tedder was both a witness and the defendant, so both versions could be apt. But the two instructions are materially identical. Instruction 3.12 would have told the jury to "consider this evidence in deciding what weight you will give to Tedder's testimony." Both 3.06 and 3.12 are uninformative; their only use is in implying no special rules govern character and reputation evidence. See United States v. Burke, 781 F.2d 1234, 1238-42 (7th Cir.1985). The jury got that message, and there was no other to convey, so the two instructions were equally good (or equally inconsequential).

Tedder proposed to call a reputation witness of his own on rebuttal. The district judge said no, because the only witness Tedder tendered had been in the courtroom during the trial, and the judge had entered an order forbidding testimony by anyone who had listened to other witnesses. See Fed.R.Evid. 615. Tedder now says that the judge should have disregarded that order, but she did not abuse her discretion in sticking to it. Cf. Wardius v. Oregon, 412 U.S. 470, 93 S.Ct. 2208, 37 L.Ed.2d 82 (1973) (enforcement of alibi-notice rule is compatible with due process even when it leads to preclusion of main defense evidence); Taylor v. Illinois, 484 U.S. 400, 108 S.Ct. 646, 98 L.Ed.2d 798 (1988). If Tedder wanted this witness available for rebuttal, he should have kept him out of the courtroom. Or counsel could have called someone else — if there was anyone else who would testify under oath that Tedder had a good reputation for truthfulness.

We turn to sentencing and start with the fine. Although the Guidelines' fine table prescribes a maximum of $100,000 for someone with Tedder's offense level, there is an exception when the statute authorizes a fine exceeding $250,000. See U.S.S.G. § 5E1.2(c)(4). Money laundering in violation of § 1957 is such a statute, as the Sentencing Commission recognized. See U.S.S.G. § 5E1.2 Application Note 5. Section 1957(b)(2) authorizes a fine "of not more than twice the amount of the criminally derived property involved in the transaction." This governs whether the offense is money laundering or conspiracy to commit money laundering, for the conspiracy statute provides: "Any person who conspires to commit any offense defined in this section or section 1957 shall be subject to the same penalties as those prescribed for the offense the commission of which was the object of the conspiracy." 18 U.S.C. § 1956(h). One of the counts on which Tedder has been convicted entailed conspiring to launder $280,070 in proceeds, and another entailed the substantive offense of laundering $250,000. Doubling these produces a statutory maximum high enough to authorize the fine, without needing to consider the $250,000 maximum fines available on the other counts.

Tedder submits that adding the caps from the two...