United States v. Frank Sarcona ( 2012 )

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
FILED
No. 10-10992 U.S. COURT OF APPEALS
________________________ ELEVENTH CIRCUIT
JAN 6, 2012
D.C. Docket No. 9:07-cr-80138-KAM-2 JOHN LEY
CLERK
UNITED STATES OF AMERICA,
llllllllllllllllllllllllllllllllllllllll Plaintiff-Appellee,
versus
FRANK SARCONA,
a.k.a. Frank Sarcone,
a.k.a. Dave Johnson,
llllllllllllllllllllllllllllllllllllllll Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(January 6, 2012)
Before EDMONDSON, MARTIN, and SUHRHEINRICH,* Circuit Judges.
*
Honorable Richard Suhrheinrich, United States Circuit Judge for the Sixth Circuit,
sitting by designation.
MARTIN, Circuit Judge:
A jury convicted Frank Sarcona of twenty-nine counts of a sixty-two-count
indictment charging fraud and other criminal acts arising from Mr. Sarcona’s
operation of the “LipoBan Clinic.” The LipoBan Clinic, a direct mail-order
business, employed a variety of deceptive practices to market and sell the weight-
loss product “LipoBan Dietary Supplement.”
Mr. Sarcona appeals his conviction on all counts, arguing that: (1) the
injunction which was the predicate for his criminal contempt convictions was
invalid; (2) there was insufficient evidence to support his misbranding convictions
in light of the statute’s ambiguity; (3) the First Amendment requires reversing his
fraud convictions; (4) his money-laundering convictions are invalid under recent
Supreme Court jurisprudence; and (5) the District Court improperly admitted
expert testimony. After oral argument and careful review of the briefs and the
record, we affirm.
I. FACTUAL AND PROCEDURAL HISTORY
A.
On January 27, 1997, the Federal Trade Commission (“FTC”) filed a
complaint in the Southern District of Florida against Mr. Sarcona and the company
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that he co-founded, SlimAmerica, Inc. The complaint alleged that the defendants
engaged in deceptive practices in the advertising and sale of a weight loss product
called “Super-Formula.” These deceptive practices included advertising
scientifically unsupported claims about achieving dramatic weight loss within
brief periods of time without dieting or exercise, as well as false representations of
medical endorsement.
This was not the first scheme for which Mr. Sarcona was accused of using
fraud and deception to market a consumer product. Three similar schemes
preceded SlimAmerica. The first was “Forever Thin,” which promised users
permanent weight losses of up to six pounds in the first forty-eight hours and up to
twelve pounds every two weeks thereafter. This scheme ended in 1985 in
response to proceedings initiated by the U.S. Postal Service and the State of Utah.
A second weight-loss scheme was “Amerdream,” which sold a product called “The
Ultimate Solution Diet Program.” Promotional materials for that program
claimed: “After the first week, some individuals will see losses of up to 35 pounds
. . . an extremely overweight person could easily drop 40, 65, even 100 pounds or
more.” The materials further stated that any participant who made the program’s
minimum purchase for $129.95 would receive a $1,000 U.S. Treasury bond. Four
states enjoined Mr. Sarcona’s marketing practices and claims. By 1991 this
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scheme had also come to an end.
In the third scheme preceding SlimAmerica, Mr. Sarcona led the company
Advanced Automotive Technologies (“AAT”) and telemarketed the “PetroMizer,”
which was described as a fuel saving and emission control device for automobiles.
Six states obtained injunctions or money judgments based on AAT’s allegedly
fraudulent misrepresentations. In addition, Mr. Sarcona signed a settlement
agreement with the U.S. Postal Service. Ultimately, in response to a FTC
complaint filed against Mr. Sarcona, Amerdream, and AAT, the U.S. District
Court for the District of Arizona entered a permanent injunction in 1991 enjoining
Mr. Sarcona from making false statements with respect to the future marketing of
“any diet product, program, or service.” The Court also ordered Mr. Sarcona and
AAT to pay $622,634 in consumer redress.
It was against this background that the FTC succeeded in obtaining a broad
preliminary injunction on July 2, 1997 to address Mr. Sarcona’s then-recent
SlimAmerica scheme. One of the most far-reaching terms of the injunction
entered by the U.S. District Court of the Southern District of Florida prohibited
Mr. Sarcona from engaging in a range of business practices, including making any
statement or representation that a product would cause weight loss or a reduction
in body size. The preliminary injunction also required Mr. Sarcona to obtain a $1
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million performance bond before engaging “in the advertising, marketing, or sale
of any program, service or product” relating to weight loss or control. The
injunction further specified a number of terms and conditions for bond. The bond
had to be issued by a surety company (1) admitted to do business in each state in
which Mr. Sarcona was to do business and that (2) held a Federal Certificate of
Authority As Acceptable Surety On Federal Bond and Reinsuring. The bond had
to be issued in favor of the FTC for the benefit of any victims injured as a result of
Mr. Sarcona’s violation of the preliminary injunction. The bond had to remain in
full force while Mr. Sarcona engaged in the restricted conduct, and for at least the
following three years. And at least ten days before undertaking any restricted
conduct, Mr. Sarcona had to provide written notice and proof of the bond to the
FTC.
Two years later, on June 30, 1999, the U.S. District Court for the Southern
District of Florida entered a permanent injunction. After making a number of
findings of fact and conclusions of law, the Court ordered that “the preliminary
injunction entered in this cause on July 2, 1997 is hereby made permanent.” It
further ordered Mr. Sarcona to “post a performance bond in the amount of $5
million before engaging, directly or indirectly, in any business related to weight-
loss products or services specifically, or in marketing of any product or services
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generally, anywhere in the United States.” Mr. Sarcona appealed, and in both a
motion to stay the permanent injunction and in his appellate brief, argued that the
injunction’s $5 million-dollar bond requirement was excessively burdensome.
This Court denied Mr. Sarcona’s stay request and later dismissed his appeal for
failure to prosecute.
Apparently, the influence of even this drastic permanent injunction on Mr.
Sarcona’s conduct turned out to be quite limited. Starting from late 1999 or early
2000, only months after the issuance of the permanent injunction, Mr. Sarcona
formed and ran a company with several associates called the LipoBan Clinic, Inc.
It marketed and sold a weight-loss product called “LipoBan.” LipoBan’s main
ingredient was chitosan, a shellfish-based product that purports to limit the body’s
absorption of lipids or fat. LipoBan was marketed to consumers through direct
mail solicitations, newspapers advertisements, and the Internet. Mr. Sarcona
wrote and organized the promotional materials, which were sent as a package to
potential customers by first-class mail. The package materials included (1) a letter
from “Joseph Maya, M.D.” that offered customers an opportunity to participate in
a weight-loss study with a new product that would enable them to lose large
amounts of weight quickly without changing their diet or exercise habits; (2) a
LipoBan order form whose flip side contained a “LipoBan Test Participant
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Survey”; (3) newspaper-like advertisements bearing “before” and “after”
photographs and testimonials; (4) a business card from “Joseph Maya, M.D.,”
identifying him as the LipoBan Clinic’s medical director and George Forgione as
the clinic director; and (5) a return envelope pre-addressed to the attention of
“Dr’s. Maya and Forgione” at “The LipoBan Clinic, Inc.” Those who ordered
LipoBan by submitting the “Test Participant Survey” then received the product by
mail.
All of the materials in the promotional package contained highly
misleading, if not patently false, representations. First, “Joseph Maya, M.D.” was
a fiction. The LipoBan Clinic paid Jose Maya Behar, a Mexican doctor who was
not licensed to practice in the United States and had never even visited the
LipoBan Clinic, for use of his name (or one closely resembling it) in connection
with the sale of LipoBan. Directly contrary to the claims in the LipoBan literature
and on the website, Dr. Maya Behar had never conducted studies with LipoBan.
Beyond that, George Forgione was an unlicensed chiropractor, and the LipoBan
Clinic lacked the most basic characteristics of a medical clinic, such as areas for
interviewing, diagnosing, studying, or treating patients.
Second, the weight-loss study that the LipoBan Clinic and its “team of
researchers” purported to be conducting was a fiction. There was no such study.
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Instead, the LipoBan Clinic was simply collecting data from customers who
reported large weight losses. None of the LipoBan Clinic employees were trained
weight-loss, nutrition, or medical professionals.
Finally, some of the testimonials in the promotional package were false.
For example, one stated: “Jerry Brown, a Ph.d, [sic] . . . found that by simply
blocking the fat causing calories in his food, he was able to lose 120 pounds in just
90 days.” In fact, Dr. Brown testified that he lost that weight by, in addition to
taking LipoBan, bicycling up to 100 miles a week and severely restricting his
caloric and fat intakes. He also testified that he never gave the LipoBan Clinic
permission to make that representation on his behalf.
The LipoBan Clinic operated for approximately four years and generated
over $16 million in revenue. During this time, Mr. Sarcona received more profits
from LipoBan sales than anyone else and made virtually all decisions regarding
LipoBan’s sales and marketing. Apparently in light of the prohibitions and
mandates of the permanent injunction entered against him, Mr. Sarcona made
great effort to conceal his involvement with the LipoBan Clinic. Mr. Sarcona’s
name did not appear in any official records or registrations for LipoBan or the
LipoBan Clinic. In dealing with vendors on behalf of the company, he generally
referred to himself as “Dave Johnson.” If anyone called for Mr. Sarcona, the
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company’s employees were supposed to respond that they did not know him. And
Mr. Sarcona never received payment directly from the LipoBan Clinic. Instead, he
received payment via checks that were deposited into an account of a defunct
corporation that was opened with a non-existent tax identification number. Mr.
Sarcona used these funds to pay for his personal living expenses and deposited
some of them into a friend’s account for purposes of paying expenses on a Virgin
Islands home he had purchased in the name of another friend.
Cognizant of the permanent injunction’s performance bond requirement,
Mr. Sarcona claimed a friend in the Bahamas tried to satisfy the requirement on
his behalf. However, at no time did Mr. Sarcona obtain or post a bond in favor of
the FTC that remotely satisfied the conditions specified in the text of the
preliminary injunction. Nor did Mr. Sarcona ever attempt to ask for clarification
regarding how to post the bond properly.
B.
In 2007, a federal grand jury in the Southern District of Florida returned a
sixty-two-count superseding indictment against Mr. Sarcona and a co-defendant,
George Forgione, related to their operation of the LipoBan Clinic. After a jury
trial, Mr. Sarcona was convicted of: one count of conspiracy to commit mail fraud,
wire fraud, and criminal contempt (Count 1); eight counts of mail fraud (Counts 2,
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3, 6, 14, 16, 20, 22, and 25); two counts of wire fraud (Counts 27 and 29); one
count of conspiracy to commit money laundering (Count 30); eight counts of
promotion money laundering (Counts 31–38); four counts of money laundering
transactions over $10,000 (Counts 42, 43, 47, and 48); three counts of causing
misbranded food to be introduced into interstate commerce (Counts 50, 53, and
59); and two counts of criminal contempt (Counts 60 and 62). He was sentenced
to a total of 240 months in prison and filed a timely notice of appeal in March
2010. On appeal, he challenges only his convictions.
II. DISCUSSION
A.
Mr. Sarcona insists that his criminal contempt convictions (Counts 60 and
62) should be reversed because the superseding indictment failed to state an
offense. No offense was stated, Mr. Sarcona claims, because the permanent
injunction was invalid in two ways. First, the injunction failed to comply with the
requirement specified by Federal Rule of Civil Procedure 65(d) that injunctions
“describe in reasonable detail—and not by referring to the complaint or other
document—the act or acts restrained or required.” Fed. R. Civ. P. 65(d)(1)(C).
Contrary to this mandate, the permanent injunction that Mr. Sarcona was
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convicted of knowingly violating said simply that it was making permanent the
detailed preliminary injunction already issued. According to Mr. Sarcona, this
rendered the permanent injunction invalid. Second, by modifying the amount of
the bond requirement from the preliminary injunction, the permanent injunction
conflicted with the preliminary injunction, resulting in ambiguity that should make
the bond requirement unenforceable. Since the primary issue here is whether the
district court properly applied the legal requirements of Rule 65, we review the
matter de novo. Mega Life and Health Ins. Co. v. Pieniozek, 585 F.3d 1399, 1403
(11th Cir. 2009).
Mr. Sarcona is correct that the permanent injunction failed to comply with
the precise terms of Rule 65(d). However, “while the preference is to enforce the
requirements of Rule 65(d) ‘scrupulously,’ failure to abide by the precise terms of
the Rule does not compel finding the judgment below void.” Combs v. Ryan’s
Coal Co., Inc., 785 F.2d 970, 978 (11th Cir. 1986) (citation omitted). Indeed, we
have previously said that “[a] court may . . . disregard the defect if it is clear from
the totality of the language in the various documents that the contemnors
understood their obligations under the injunction.” Id.; accord United States v.
Goehring, 742 F.2d 1323, 1324 (11th Cir. 1984); cf. Chathas v. Local 134 IBEW,
233 F.3d 508, 513 (7th Cir. 2000) (“When the terms of an injunction, although not
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set forth in a separate document as the rule requires, can be inferred from the
documentary record with sufficient clarity to enable a violation of those terms to
be punished as a contempt, the injunction is enforceable.”). In Combs we further
described the factors for assessing the validity of an injunction in the contempt
context. These factors are whether the obligations were “intelligible” to the
contemnor and “capable of enforcement,” and whether the contemnor understood
those obligations. 785 F.2d at 978–79.
We see no issue with respect to the acts to be restrained by the permanent
injunction. The terms of the preliminary injunction were clear and enforceable.
Mr. Sarcona was prohibited from making any statement or representation that a
product would cause weight loss or reduction in body size, could not claim a
product had been validated by scientific studies, and had to post a $1 million bond
before engaging in a business having to do with dieting or weight control. Indeed,
the government presented evidence that Mr. Sarcona understood these obligations
well. When the preliminary injunction was then made permanent through
unequivocal language, it is difficult to see how these terms became less intelligible
or capable of enforcement.
But Mr. Sarcona argues the bond requirements for the permanent injunction
are a different matter. Specifically, when the amount of the performance bond
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increased between the preliminary and permanent injunctions, it became unclear to
him whether he should pay the amount specified by the preliminary injunction, the
amount specified by the permanent injunction, or both. He also claims not to
know whether, in addition to the amount of the bond, the type of bond and method
of posting it had changed. Neither of these arguments is persuasive.
Setting aside for now the objective clarity of the language in the permanent
injunction, we note that on at least two separate occasions Mr. Sarcona indicated
his understanding of the $5 million performance bond obligation. In his August
12, 1999 Motion for Stay Pending Review and Request for Expedited Ruling, Mr.
Sarcona stated that the “Final Judgment for Permanent Injunction and Damages”
“called for a five million dollar performance bond as condition to Defendant
conducting business in his life long profession of marketing.” Furthermore, in an
October 12, 1999 brief appealing the final judgment, Mr. Sarcona wrote that “the
government imposed a five million-dollar performance bond requirement on” him.
Thus, Mr. Sarcona demonstrated a clear understanding of his $5 million
performance bond obligation.
Also, in light of his clear cognizance of the performance bond obligation,
we are simply unpersuaded by Mr. Sarcona’s argument that he believed the
method for paying the bond might have somehow changed. If Mr. Sarcona had
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questions about how exactly to post his $5 million bond in a valid way, he could
have easily asked. But there is no record of him doing so. Moreover, even if Mr.
Sarcona’s story about trying to post the bond were believed, it hardly demonstrates
a good-faith compliance effort that fell short only because Mr. Sarcona was not
quite sure how to post the bond properly. Indeed, little about his version of events
evidences genuine intention on the part of Mr. Sarcona to comply with the bond
requirement.
It is true that the District Court should have scrupulously adhered to Rule
65(d). But both because Sarcona’s obligations were intelligible and capable of
enforcement and because we have every reason to think he understood those
obligations, the permanent injunction underlying Sarcona’s contempt convictions
was not invalid. Consequently, we affirm the convictions.
B.
Mr. Sarcona argues that there was insufficient evidence to support his
misbranding convictions (Counts 50, 53, and 59). Specifically, he asserts that the
language of the statute under which he was convicted, the Federal Food, Drug, and
Cosmetic Act (“FDCA”), is ambiguous, lending itself to different interpretations.
Under a couple of these statutory interpretations, he claims, the evidence simply
did not support conviction.
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To support this argument, Mr. Sarcona points to two ambiguities in
particular. The first ambiguity concerns the scope of the definition of “labeling.”
Section 343(a)(1) of the FDCA deems a food, such as LipoBan, to be
“misbranded” if “its labeling is false or misleading in any particular.” 21 U.S.C.
§ 343(a)(1). “Labeling” is specifically defined as “all labels and other written,
printed, or graphic matter (1) upon any article or any of its containers or wrappers,
or (2) accompanying such article.” 21 U.S.C. § 321(m). Mr. Sarcona contends
that, as a matter of law, it is doubtful whether the LipoBan promotional materials
he helped author and distribute qualified as “labeling.” Because the materials
were mailed separately from the actual LipoBan products, they clearly were
neither located on “any article or any of its containers or wrappers” nor
“accompanying such article.” Instead, he asserts, as materials intended to
advertise LipoBan and attract customers, they simply constituted ordinary
promotional advertising that fell outside the reach of § 343(a)(1). And if this is
right, then as a matter of law Mr. Sarcona could not have been convicted of
violating the statute.
The second ambiguity Mr. Sarcona points to concerns whether § 343(a)(1)
prohibits misbranding on the “labeling” or, instead, just on the “label.” Under the
FDCA, these terms are distinct. “Label” refers only to “a display of written,
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printed, or graphic matter upon the immediate container of any article.” 21 U.S.C.
§ 321(k) (emphasis added). In contrast, as explained above, “labeling”
encompasses a broader universe of materials, including any printed matter
“accompanying” the product. Mr. Sarcona says the ambiguity in the statute
supposedly arises because, on the one hand, the text of the body of the statutory
provision refers specifically to “labeling,” while, on the other hand, the heading or
title of the provision refers only to “[f]alse or misleading label.” 21 U.S.C.
§ 343(a). According to Mr. Sarcona, the heading of § 343(a) thus suggests that the
provision has a narrower scope than the body indicates. And if the statute only
prohibited misbranding on the “label,” then, for this reason as well, the evidence
would fail to support Mr. Sarcona’s conviction under § 343(a)(1).
At the very least, Mr. Sarcona insists, the statute is ambiguous in these two
ways. He argues that in the criminal context such ambiguity demands that we
apply the rule of lenity, under which we interpret the statute narrowly and in favor
of the defendant. He says that if we do so, the evidence will no longer be
sufficient to support his misbranding convictions.
We review both questions of statutory interpretation and challenges to the
sufficiency of evidence de novo, viewing the evidence in the light most favorable
to the government. United States v. Emmanuel, 565 F.3d 1324, 1330 (11th Cir.
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2009).
Mr. Sarcona’s argument assumes that Supreme Court precedent and our
own case law have not already dictated how to resolve these potential ambiguities.
This assumption is mistaken. Regarding the scope of the definition of “labeling,”
the Supreme Court long ago addressed the matter of whether materials that travel
independently of the product in question can be treated as “labeling” for the
purposes of the FDCA. In Kordel v. United States, 335 U.S. 345, 69 S. Ct. 106
(1948), the Court held that where literature “supplements or explains” a product
and “was designed for use in the distribution and sale of the [product],” “[t]he fact
that it went in a different mail [is] wholly irrelevant.” Id. at 350, 69 S. Ct. at 110;
see also United States v. Urbuteit, 335 U.S. 355, 358, 69 S. Ct. 112, 114 (1948)
(“The fact that the false literature leaves in a separate mail does not save the article
from being misbranded.”). That is because it is “the textual relationship,” not a
“physical attachment,” “that is significant.” Kordel, 335 U.S. at 350, 69 S. Ct. at
110. This reading of the statute, the Court reasoned, is simply “common sense.”
Id. at 349, 69 S. Ct. at 110. For, “to hold that these drugs would be misbranded if
the literature had been shipped in the same container but not misbranded if the
literature left in the next or in the preceding mail,” would “create an obviously
wide loophole.” Id. at 349, 69 S. Ct. at 109.
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Here, the evidence indisputably showed that the promotional materials and
the product “had a common origin and a common destination,” and that the
materials were “used in the sale” of LipoBan and “explained [its] use[].” Id. at
348, 69 S. Ct. at 109. While the materials and the product may not have been sent
together in one package, we note the interdependency between them, id., and the
“integrated nature of the transactions.” Id. at 350, 69 S. Ct. at 110. Consequently,
there was sufficient evidence for the jury to conclude that “the advertising matter
that was sent was designed to serve and did in fact serve the purposes of labeling.”
Urbuteit, 335 U.S. at 357, 69 S. Ct. at 113. And under Kordel, the materials the
jury found Mr. Sarcona to have prepared and sent clearly fell within the scope of
the statutory definition of “labeling.”
Regarding the issue of whether the statute’s misbranding prohibitions apply
only to the product’s “label” as opposed to the product’s “labeling,” Mr. Sarcona’s
claim of ambiguity is also unavailing. We have repeatedly held that where there is
no ambiguity in the text of a provision, we should not consider the heading or title
in order to construe the provision. Essex Ins. Co. v. Zota, 466 F.3d 981, 989–90
(11th Cir. 2006); United States v. Ferreira, 275 F.3d 1020, 1029 (11th Cir. 2001);
United States v. Chastain, 198 F.3d 1338, 1353 (11th Cir. 1999); Scarborough v.
Office of Personnel Mgmt., 723 F.2d 801, 811 (11th Cir. 1984). This approach is
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mandated by the Supreme Court’s instruction that “the title of a statute and the
heading of a section cannot limit the plain meaning of the text. For interpretative
purposes, they are of use only when they shed light on some ambiguous word or
phrase. . . . [T]hey cannot undo or limit that which the text makes plain.” Bhd. of
R.R. Trainmen v. Baltimore & Ohio R.R. Co., 331 U.S. 519, 528–29, 67 S. Ct.
1387, 1392 (1947).
Mr. Sarcona’s claim of ambiguity is premised on the supposed conflict
between the heading and text. When only the text is considered, however, no
ambiguity exists because the statute unambiguously prohibits misbranding in
“labeling,” and that term is clearly defined. See 21 U.S.C. § 321(m). Under these
circumstances, we do not allow the heading to undo that which the text makes
plain. We therefore reject Mr. Sarcona’s claim that the statute is ambiguous. And
since there was no ambiguity, we hold the evidence was sufficient to convict Mr.
Sarcona for misbranding in violation of the FDCA.
C.
Mr. Sarcona contends that the First Amendment requires reversal of his mail
and wire fraud convictions, as well as his conspiracy convictions. He claims that
there was some scientific support for his claims and that, while he exaggerated the
weight loss benefits of LipoBan, his exaggerations were mere puffery. Mr.
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Sarcona argues that as a businessman he had a First Amendment right to advertise
his product aggressively.
Mr. Sarcona and the government disagree about what standard of review
should be applied here. However, under either de novo or plain error review,
Sarcona’s argument fails. It is well-established that the First Amendment does not
protect commercial speech that is fraudulent or misleading. Central Hudson Gas
& Elec. Corp. v. Pub. Serv. Comm’n of NY, 447 U.S. 557, 562–63, 566, 100 S. Ct.
2343, 2349–51 (1980). There was sufficient evidence for the jury to find that Mr.
Sarcona intentionally presented materially false and misleading information about
the product’s weight-loss benefits, the company, the “medical director” behind the
product, and a study being conducted by the company. Because the evidence was
sufficient to show that Mr. Sarcona’s advertising went far beyond mere puffery
and into the realm of fraud and deception, he cannot claim protection under the
First Amendment.
D.
Mr. Sarcona argues that his money laundering conspiracy and substantive
promotion money laundering convictions should be vacated in light of United
States v. Santos, 553 U.S. 507, 128 S. Ct. 2020 (2008). In Santos, the Supreme
Court reversed a money laundering conviction arising from an illegal gambling
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enterprise. A plurality opinion concluded that proceeds means “profits” as
opposed to “receipts.” Id. at 514, 128 S. Ct. at 2025. The controlling concurrence
of Justice Stevens, however, limited this holding to certain contexts. See id. at
526–28, 128 S. Ct. at 2032–34 (Stevens, J., concurring in the judgment). Mr.
Sarcona argues that under Santos his convictions should be vacated because the
government only proved he had conspired to launder the “gross receipts” of
fraudulent activity, not “profits.” We review this question de novo. United States
v. Delancy, 502 F.3d 1297, 1304 (11th Cir. 2007).
We have previously declined to recognize the broad interpretation of Santos
that Mr. Sarcona advances here. See United States v. Jennings, 599 F.3d 1241,
1252 (11th Cir. 2010); United States v. Demarest, 570 F.3d 1232, 1242 (11th Cir.
2009). Instead, observing Santos’s “limited precedential value,” Demarest, 570
F.3d at 1242, we have interpreted the holding in Santos “in its narrowest form,”
that is, merely “that the gross receipts of an unlicensed gambling operation [are]
not ‘proceeds’ under section 1956.” Jennings, 599 F.3d at 1252. In non-gambling
contexts, we remain bound by a definition of proceeds that “includes receipts as
well as profits.” Id. Because the proceeds did not come from an unlicensed
gambling operation, they meet the terms of the statute as we have defined it, and
Mr. Sarcona’s argument for why his convictions should be vacated therefore fails.
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E.
Finally, Mr. Sarcona argues that one of the government’s expert witnesses,
IRS Agent Stephan Robinson, testified outside the bounds of Federal Rule of
Evidence 702 by explaining legal concepts and offering his opinion about Mr.
Sarcona’s guilt. Mr. Sarcona maintains that the District Court abused its
discretion by allowing this testimony, and prejudice resulted. We review for an
abuse of discretion, Emmanuel, 565 F.3d at 1332, and conclude that this argument
also lacks merit.
We have previously recognized that admission of “expert testimony on [the
concealment] practices of criminals” is appropriate for educating lay jurors on the
significance of relevant facts. United States v. Garcia-Emanuel, 14 F.3d 1469,
1476 (11th Cir. 1994). Other Circuits have upheld admission of expert testimony
for the specific purpose of educating jurors about money laundering. See, e.g.,
United States v. Nektalov, 461 F.3d 309, 318 (2d Cir. 2006); United States v.
Wilson, 355 F.3d 358, 362 (5th Cir. 2003). Based on his extensive experience in
investigating fraud and money laundering cases, Agent Robinson testified about
the manner in which persons may launder money and explained that some of Mr.
Sarcona’s financial activities raised “red flags” for those investigating money
laundering. He never offered an opinion regarding Mr. Sarcona’s guilt or
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innocence. In addition, the District Court properly instructed the jury regarding
consideration of expert opinion testimony. For these reasons, we hold that the
District Court did not abuse its discretion in admitting the testimony.
For each of these foregoing reasons, we AFFIRM Mr. Sarcona’s
convictions on all counts.
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