United States v. Nunez-Vasquez ( 1998 )

Opinions of the United
1998 Decisions States Court of Appeals
for the Third Circuit
5-20-1998
United States v. Nunez-Vasquez
Precedential or Non-Precedential:
Docket 96-5779,96-5780
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Recommended Citation
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Filed May 20, 1998
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
NOS. 96-5779 and 96-5780
UNITED STATES OF AMERICA,
Appellee
v.
LUIS RICARDO NAVARRO, a.k.a
"Lucho", and PORFIRIO NUNEZ-VASQUEZ,
Appellants
On Appeal From the United States District Court
For the District of New Jersey
(D.C. Cr. No. 93-588)
Argued: January 21, 1998
Before: BECKER, STAPLETON, Circuit Judges and
FEIKENS, District Judge*
(Filed May 20, 1998)
SARAH E. HUNTER, ESQUIRE
(ARGUED)
400 West Maple Road, Suite 3000
Birmingham, MI 48009
Attorney for Appellant Porfirio Nunez-
Vasquez
_________________________________________________________________
*Honorable John Feikens, United States District Judge for the Eastern
District of Michigan, sitting by designation.
JOHN C. WHIPPLE, ESQUIRE
(ARGUED)
Whipple, Ross & Hirsch, P.A.
9 Campus Drive
Parsippany, NJ 07054
Attorney for Appellant Luis Ricardo
Navarro
FAITH S. HOCHBERG, ESQUIRE
United States Attorney
AMANDA HAINES, ESQUIRE
(ARGUED)
Assistant United States Attorney
970 Broad Street
Newark, NJ 07102
Attorneys for United States of
America
OPINION OF THE COURT
FEIKENS, District Judge.
I. Introduction
In this appeal, the central issue is whether S1956(a)(1) of
Title 18 ("Laundering of monetary instruments") sets forth
three separate offenses, each of which could be a basis for
criminal conviction, or three alternative mental states, any
of which being posssessed by a defendant would violate the
statute.
II. Background
Luis Ricardo Navarro ("Navarro") and Porfirio Nunez-
Vasquez ("Nunez") were charged by indictment 1 with, inter
alia, one count of conspiracy in violation of 18 U.S.C.
S1956(g) (Section 1956(g) has since been renumbered as
S1956(h)). The object of the charged conspiracy was money
laundering in violation of 18 U.S.C. S1956(a)(1).
_________________________________________________________________
1. Other counts in the indictment are not relevant to the issues raised in
this appeal.
2
Count 1 of the indictment charged defendants with
knowing that the property involved in the financial
transaction represented the proceeds of some form of
unlawful activity, and (A) with the intent to promote
the carrying on of the specified unlawful activity, that
is, the distribution of narcotics, and (B) knowing that
the transaction was designed in whole or in part to
conceal or disguise the nature, location, source,
ownership, and control of property believed to be the
proceeds of specified unlawful activity, and (C) knowing
that the transaction was designed in whole or in part
to avoid a transaction reporting requirement under
State or Federal law, did conspire and agree with one
another to conduct and attempt to conduct a financial
transaction which in fact involved the proceeds of
specified unlawful activity, specifically the transfer,
delivery, and other disposition of United States
currency in excess of $12,000,000 that was the
proceeds of the distribution of narcotics, contary to
Title 18, United States Code, section 1956(a)(1).
Count 3 of the indictment charged that defendant Nunez,
and others, did
knowingly, willfully, and with the intent (A) to promote
the carrying on of specified unlawful activity, that is,
the distribution of narcotics, (B) to conceal or disguise
the nature, location, source, ownership, and control of
property believed to be the proceeds of specified
unlawful activity, and (C) to avoid a transaction
reporting requirement under State or Federal law,
conspire and agree with one another to conduct and
attempt to conduct a financial transaction, specifically
the transfer, delivery, and other dispostion of United
States currency represented by a law enforcement
officer and by another person at the direction of and
with the approval of a Federal official authorized to
investigate and prosecute violations of Title 18, United
States Code, Section 1956, to be the proceeds of
specified unlawful activity, that is, the distribution of
narcotics, contrary to Title 18, United States Code,
Section 1956(a)(3).
3
In violation of Title 18, United States Code, Section
1956(g).
In 1992, the government began an investigation into a
money-transmitting business known as "Latino Envios,"
located in Union City, New Jersey. It also operated under
the name "Lacino Travel." Latino Envios apparently had a
relationship with "Richard," L.N.U., a money launderer
connected to the Colombian Cali drug cartel. Latino Envios
was managed by Robert Foti, who had a relationship with
Richard, and, at Richard's direction, he established a
branch office in San Juan, Puerto Rico. At that location,
Foti and his wife Rosario hired defendant Nunez to run the
Puerto Rico office at a salary of $700 a week. Defendant
Navarro is alleged to be the brother of Richard and acted as
one of his representatives in dealing with the Foti
organization. On several occasions, Navarro delivered
money to Foti and Nunez in Puerto Rico and New York.
These cash deliveries were large, $500,000 or more. The
deliveries were typically made during early morning hours
or at night. The money would be taken by couriers in cars
and the deliveries were made in garages, motel rooms, or
fast-food parking lots. Nunez admitted to U.S. Customs
Agent Jose Pena that he concluded that the money he
processed was derived from drugs.
After being counted by Nunez, Foti, or both, the money
was then deposited in various banks, including Eurobank
or Banco Bilbao, as well as other banks in the United
States. Thereafter, the money was converted into checks,
made out to a predetermined payee, or wire transferred to
other banks, in accordance with instructions from Navarro
or Richard. Between July 6, 1993 and December 10, 1993,
fourteen monetary transactions, totaling $5,256,004, took
place in Puerto Rico.
At trial, government investigator George Serrano testified
that a confidential informant told Nunez that he would be
dealing with narcotics proceeds. Moreover, Foti had told
Nunez that all involved had to be careful. In the Puerto Rico
office, Nunez had arranged for blankets to be hung on the
walls so that conversations about the funds involved could
not be heard by those in adjoining offices.
4
At trial, telephone conversations were introduced in
which there were constant references to code words and
slang, which Foti described as repeated efforts to conceal
that the talk was about narcotics proceeds. He gave a
detailed description of the money laundering scheme in
which co-conspirators would write checks against accounts
into which they had deposited cash drug proceeds and
direct those checks to payees whose indentities did not
matter as long as the payee was one of a group of payees
selected by drug dealers. He testified that Navarro told him
that Navarro was moving money for a family business, and
that Navarro's father's position was that if people in the
United States wanted to use drugs, the Navarro family was
not responsible for their actions.
The indictment was handed down in December 1993. Foti
pleaded guilty in May 1994. Nunez and Navarro went to
trial in November 1994. Nunez was convicted of conspiracy
to commit money laundering of drug proceeds in violation
of Title 18, U.S.C., S1956(g) (now (h)), Count 1, and
conspiracy to commit money laundering with funds
represented by a law enforcement officer to be proceeds of
narcotics distribution in violation of Title 18, U.S.C.,
S1956(g) (now (h)), Count 3.
Navarro was also found guilty on Count 1 of the
indictment, Title 18, U.S.C., S1956(g) (now (h)).
III. Statement of the Issues Presented by this Appeal:
(1) whether the government's opening and closing
statements, which focused on one of three possible
intended objectives of the money laundering
conspiracy, constructively amended the
indictment;
(2) whether the district court correctly charged the
jury on unanimity;
and
(3) whether there was sufficient evidence viewed in
the light most favorable to the government to
support Nunez's conviction for conspiring to
launder drug proceeds.
5
IV. Analysis
Title 18, U.S.C., S1956, entitled "Laundering of monetary
instruments," states:
(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, or
(ii) with intent to engage in conduct constituting a
violation of section 7201 or 7206 of the Internal
Revenue Code of 1986; or
(B) knowing that the transaction is designed in whole
or in part --
(i) to conceal or disguise the nature, the location, the
source, the ownership, or the control of the proceeds of
specified unlawful activity; or
(ii) to avoid a transaction reporting requirement
under State or Federal law, shall be sentenced to afine
of not more than $500,000 or twice the value of the
property involved in the transaction, whichever is
greater, or imprisonment for not more than twenty
years, or both.
Title 18, U.S.C., S1956(h), states:
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.
Issue 1 - Whether the government's opening and closing
statements, which focused on one of three possible
intended objectives of the money laundering conspiracy,
constructively amended the indictment.
During her opening statement, the prosecutor discussed
the evidence that she would present, and she alluded to the
charges in the indictment. She emphasized the distinction
6
between money laundering and currency transaction
reporting requirements, and she explained that "[t]he Judge
will give you instructions at the end of the case concerning
exactly what elements you need to find in each of those
violations, and I can't and won't try to steal his thunder in
that regard." Nonetheless, she remarked, "Very briefly,
money laundering is the knowing conducting of afinancial
transaction knowing that that cash comes from an illegal
source, one of which is narcotics, and intending to conceal
or disguise the source of those funds." She later reiterated
that "I am not going to try to tell you now all of the
elements that the Government must prove with respect to
[Count 1]."
Before closing arguments, the court briefly summarized
each count of the indictment and generally described the
notion of conspiracy. It then addressed the specific
elements of money laundering, explaining that the
defendants must have
acted either, (A) with the intent to promote the carrying
on of specified unlawful activity, or (B), knowing that
the transaction was designed in whole or in part to
conceal or disguise the nature, location, source,
ownership or control of the proceeds of specified
unlawful activity, or (C), knowing that the transaction
was designed in whole or in part to avoid a transaction
reporting requirement under state or federal law.
In her summation, the prosecutor returned to the
elements of money laundering, explaining as follows:
I am not going to go through all three of [the
subsections on knowledge and intent in the money
laundering statute] because I think that is not
necessary. One of those should suffice. I am going to
read you that one, that the defendant acted knowing
that the transaction was designed in whole or in part
to conceal or disguise the nature, the location, the
source, the ownership or the control of the proceeds
[of] specified unlawful activity, knowing, that is, that
the transaction was designed to conceal the source of
the funds.
7
The defendants argue that the government's opening and
closing statements narrowed the indictment by focusing on
one of three possible alternative mental states -- knowing
concealment -- and the court's presentation of the full
indictment to the jury, allowing conviction on any one of
the three possible alternative mental states, violated their
right to due process. This argument was not raised at trial;
therefore, we will review the court's submission of the
money laundering instruction for plain error in accordance
with United States v. Olano, 507 U.S. 725 (1993). Under
this standard, there must be (1) an error; (2) which is clear
or obvious; and (3) which affects substantial rights (i.e., it
affected the outcome of the district court proceedings). See
United States v. Olano, 507 U.S. 725, 733-34 (1993).
Because Rule 52(b) is permissive, we only correct a plain
error which (a) causes the conviction or sentencing of an
actually innocent defendant, or (b) seriously affect[s] the
fairness, integrity, or public reputation of judicial
proceedings. Id. at 735-36; United States v. Stansfield, 101
F.3d 909, 920 (3d Cir. 1996).
We need not proceed any further than the first element of
the plain error test -- we find that the court committed no
error by presenting a money laundering instruction making
reference to all three alternative mental states. It did not
thereby impose a "constructive amendment" to the
indictment. A constructive amendment occurs when the
defendant is deprived of his "substantial right to be tried
only on charges presented in an indictment returned by a
grand jury." United States v. Miller, 471 U.S. 130, 140
(1985) (quoting Stirone v. United States, 361 U.S. 212, 217
(1960)) (internal quotation marks omitted). The defendants
here were tried on an indictment that clearly set out the
offense for which they were ultimately convicted, and the
indictment was never constructively amended at any point
before, during, or after trial.
We reject the defendants' argument that the prosecutor's
opening and closing remarks focusing on knowing
concealment narrowed the charge to only that one mental
state. The prosecutor clearly stated that she was not going
to address each of the three possible alternative mental
states in her opening and closing remarks. She carefully
8
avoided conveying an intent to narrow the charge, and it
would not have been reasonable for the defendants to rely
on the government's statements as notice of an intention to
narrow the indictment. Accordingly, the indictment was
never narrowed, the district court's charge to the jury
cannot be viewed as having expanded it, and the
indictment was therefore not constructively amended.
Issue 2 - Did the district court correctly charge the jury
on unanimity?
Defendants contend that the district court erred by
failing to instruct the jurors that they must unanimously
decide which of the alternative mental states set forth in
S1956(a)(1) defendants possessed. As noted above, to
constitute a violation of the statute the defendant must
undertake a financial transaction involving proceeds known
to be from a specified unlawful activity:
1) With the intent to promote the carrying on of a
specified unlawful activity (the promotion prong); or
2) Knowing that the transaction was designed in
whole or in part to conceal the nature, location,
ownership, etc. of the proceeds (the conceal or
disguise prong); or
3) Knowing that the transaction was designed to avoid
a transaction reporting requirement under state or
federal law (the reporting requirement prong).
Although defendants were charged with possessing all three
mental states (the indictment was written in the
conjunctive), the jury was instructed in the disjunctive:
The third element of the offense which the Government
must prove is satisfied by any one of three alternatives:
The Government must prove beyond a reasonable
doubt either that the defendant acted with the intent to
promote the carrying on of specified unlawful activity
or that he acted knowing that the transaction was
designed, in whole or in part, to conceal or disguise the
nature, the location, the source, the ownership or
control of the proceeds, or that he acted knowing that
the transaction was designed in whole or in part to
9
avoid a transaction reporting requirement under state
or federal law.
The jury was not told specifically that it must
unanimously decide which mental state each defendant
possessed.
Defendants argue that S1956(a)(1) actually creates three
separate offenses for promotion, concealment, and
avoidance of reporting requirements -- as opposed to
setting forth a single offense which can be violated by any
one of the three mental states. Accordingly, they contend
that the district court should have specifically instructed
the jury that it must unanimously decide which mental
state they possessed. Although the district court gave the
jury a general unanimity instruction, its failure to provide
this specific instruction, defendants maintain, requires a
reversal because the instructions given create a risk of a
patchwork verdict. That is, if the defendants are correct,
and S1956(a)(1) sets forth three different offenses, then the
lack of a specific unanimity instruction could yield a guilty
verdict even though all twelve jurors did not agree on which
provision of S1956(a)(1) was violated. The government
counters that S1956(a)(1) does not create multiple offenses,
only alternative mental states, and therefore the risk of a
patchwork verdict is illusory.
Put differently, defendants' challenge is to the district
court's characterization of S1956(a)(1) as a single crime, as
to which the verdict need not be limited to any one
statutory mens rea alternative. Defendants did not raise
this objection to the jury charge at trial. Thus, we review for
plain error.
A. Schad and Edmonds
Our analytic point of departure on this issue is Schad v.
Arizona, 501 U.S. 624, 111 S.Ct. 243 (1991). The defendant
in that case was convicted under an Arizona statute which
defined first-degree murder as being either (a) willful,
deliberate, or premeditated, or (b) committed in the course
of certain felonies. See Schad, 501 U.S at 628. The state
court determined that the statute defined only one crime,
and that, therefore, the jury need not unanimously decide
which of the two options (a felony murder or a premeditated
10
murder) had occurred. The Supreme Court affirmed, with a
four-Justice plurality rejecting the defendant's contention
that the trial court erred by not requiring the jury to
unanimously agree on a single theory of first-degree
murder.
The plurality held that when a criminal statute provides
alternative routes to a conviction, whether jurors must be
unanimous with respect to a particular route is dependent
on two questions. First, did the legislature intend to create
different offenses or different means for violating a single
offense? Second, if the legislature intended to create
different means for violating the same offense, is that
statutory definition constitutional under the Due Process
Clause? See Schad, 501 U.S. at 632-33, 636-37, 640.
Applying this approach, the plurality found that the Arizona
legislature's intent to create a single offense with alternative
mental states was clear, and that this definition of first-
degree murder did not offend due process. The Court's due
process inquiry looked to history and wide practice as
guides to fundamental values, as well as to narrower
analytic methods of testing the moral and practical
equivalence of alternative means of satisfying an element of
an offense. Schad, 501 U.S. at 637.
We expounded upon and applied the first prong of the
Schad framework in United States v. Edmonds, 80 F.3d 810(3d Cir. 1996) (en banc).2 In that case we analyzed whether
the three predicate crimes required to establish a violation
of the Continuing Criminal Enterprise ("CCE") statute, 21
U.S.C. S848, were intended to be treated as different means
or different offenses -- in other words, whether the jury
must unanimously decide which three predicate acts were
committed. Since the text and legislative history of the CCE
statute offered little guidance on Congress' intent, we set
forth a set of background interpretive principles to guide
_________________________________________________________________
2. We noted in Edmonds our doubt over the usefulness of the legislative
intent prong of Schad. See 80 F.3d at 818 n.10. We expressed a
preference instead for an inquiry into whether the differences between
the statutory alternatives are so important that the lack of jury
agreement as to a specific alternative casts too much doubt on the
accuracy of the verdict. Id.11
our application of Schad's legislative intent prong. Those
principles are:
1) The historical tradition in criminal jurisprudence
that a jury verdict represents substantial
agreement on a discrete set of (actions occurring at
a single place at some specific time;
2) Constitutional considerations suggesting that we
should construe Congress' intent so as to avoid
grave and doubtful constitutional questions;3 and
3) The rule of lenity, counseling that the degree of
jury unanimity required is important enough a
protection that we hesitate to interpret an
ambiguous statute to require less, rather than
more, unanimity.
Id. at 818-821. Based on these principles, we concluded in
Edmonds that when a statute combines formerly distinct
offenses into a single crime as predicate offenses, we should
assume that Congress intended the formerly distinct
offenses to retain their offense status with its attendant
unanimity requirements. Id. at 822.4
B. Application of Schad and Edmonds - Legislative Intent
Our threshold inquiry is to determine whether Congress
intended to create separate offenses or separate means of
committing the same offense when it drafted the alternative
mental state provisions of the money laundering statute.
This inquiry, like our inquiry in Edmonds, is made difficult
by two facts. First, the intent of Congress cannot be readily
inferred from the face of the text of S1956. Second, the
legislative history is similarly unhelpful, as no relevant
congressional reports were submitted with the original
enactment of the statute in 1986.
_________________________________________________________________
3. We identified two primary considerations to be assessed under this
prong: first, whether there is a historical analogue for interpreting the
statutory alternatives as different means of committing a single offense;
and, second, the Schad plurality's belief that different means must
reflect notions of equivalent blameworthiness or culpability. See
Edmonds, 80 F.3d at 819-20.
4. We also held that harmless error review could apply in this context.
See Edmonds, 80 F.3d at 824.
12
1. Case Law Guidance
Although the legislative history is unavailing, other cases
have suggested how we should construe Congress' intent
behind S1956(a)(1). The case that speaks to this issue most
directly is United States v. Holmes, 44 F.3d 1150 (2d Cir.
1995). There, the defendant was charged with two separate
counts of violating S1956, S1956(a)(1)(B)(i) (the conceal or
disguise provision) and (ii) (the reporting requirements
provision), arising out of the same underlying misconduct.
The court in Holmes rejected the argument that the same
financial transaction could give rise to two separate crimes
under these provisions:
We cannot accept the government's implicit contention
that the same financial transaction gives rise to
separate crimes simply because the defendant, at the
time he deposited the money, knew that what he was
doing -- the prohibited conduct -- was designed for
two unlawful purposes: concealing proceeds and
avoiding reporting requirements. The statute punishes
the conducting of a financial transaction with guilty
knowledge. Having knowledge of two improper purpses
rather than one does not multiply the offense of a
single financial transaction into two offenses.
Id. at 1155. Accordingly, the court concluded that
given the language of S1956, congress must be deemed
to have intended only a single punishment for each
transaction even though the defendant may have had
two improper purposes in mind.
Id. at 1155-56. We note, however, that this conclusion was
based only on the court's reading of the text of the statute;
the opinion does not cite to any legislative history or other
texts influencing its decision.
Although not with the clarity of Holmes, other circuits
have reached the same essential result. In United States v.
Brown, 944 F.2d 1377 (7th Cir. 1991), for example, the
U.S. Court of Appeals for the Seventh Circuit considered a
set of factual circumstances similar to the present case.
The indictment charged that the defendant violated both
the promotion and conceal or disguise subsections of
13
S1956(a)(1), but the government's proof and argument, as
well as the trial court's instructions, only discussed the
conceal or disguise alternative. The court held that "[t]he
possibility that the jury nevertheless based its verdict on
the [promotion prong] ... though troubling in the abstract,
is not fatal to the conviction ...." Id. at 1387.
Although Brown appears to support the alternate means
interpretation of S1956, the Seventh Circuit was clearly
uncomfortable with that result:
[W]e renew our caution ... that the government should
in the usual case charge defendants under one prong
of the statute or another as it will be the rare case in
which the government will be able to prove that a
single transaction was intended to promote an illegal
activity and conceal the origin of the funds used in that
activity.
Id. While this statement demonstrates some pause on
behalf of the court, it does not undermine the Seventh
Circuit's basic conclusion that Congress intended that the
jury could be instructed in the disjunctive. See also United
States v. Alford, 999 F.2d 818, 824 (5th Cir. 1993)
(rejecting without discussing, under plain error standard,
defendant's claim that specific unanimity instruction is
required in indictment for violation of subsections (a)(i) and
(B)(i)).
We have not clearly weighed in on this question.
Defendants point us to two cases which they contend
reflect a belief that Congress intended the S1956
alternatives at issue to be treated as separate offenses.
They rely principally on United States v. Paramo, 998 F.2d
1212 (3d Cir. 1993). There, the defendant was convicted of
five counts of violating subsection (A)(i) (the promotion
alternative). Although not charged with violating subsection
(B)(i) (or, for that matter, (B)(ii)), Paramo contended that the
trial court had erred by failing to instruct the jury that they
could not convict him under S1956(a)(1)(A)(i) if they found
him guilty under S1956(a)(1)(B)(i). Paramo, 998 F.2d at
1218, n.3. We rejected this claim in the margin, noting that
"contrary to Paramo's suggestion, a finding of guilt under
subsection (B)(i) is not a defense to a prosecution under
14
subsection (a)(i)." Id. at n.3. Defendants contend that the
Paramo footnote stands for the proposition that a defendant
could be prosecuted separately under the promotion and
concealment subsections, and that the Paramo panel must
have concluded that Congress intended those subsections
to be treated as separate offenses.
In our view, the Paramo footnote is insufficiently clear to
compel a reversal here on a plain error standard of review.
The proposition that Paramo rejected is that a jury could
not convict a defendant under subsection (A)(i) if they found
him guilty under subsection (B)(i). As noted above, Paramo
stated that a finding of guilt under subsection (B)(i) is not
a defense to a prosecution under subsection (A)(i). This
footnote admits of two possible readings. It could mean
either that the (A)(i) prosecution would not be barred on
double jeopardy grounds -- which would imply that (A)(i)
and (B)(i) are separate offenses with distinct elements -- or
simply that a S1956(a)(1) defendant cannot defend the
charge that he intended to promote an unlawful activity by
claiming that he actually intended only to conceal or
disguise the proceeds from that activity. In other words, a
finding of intent to conceal under subsection (B)(i) is not
inconsistent with a finding of intent to promote under
subsection (A)(i). If Paramo means the latter, then its
holding would be entirely consistent with the view that
S1956(a)(1) sets forth separate means of committing a
single offense.
In light of the fact that Paramo was not charged with
violating subsection (B)(i), and had not (at least as appears
from the opinion) been charged with a (B)(i) violation based
on the same conduct in the past, we are hesitant to
conclude that the panel in Paramo was reaching out to
decide a novel double jeopardy issue (without any
discussion) which was not squarely before it. Moreover, we
believe that the second interpretation of the Paramo
footnote -- which need not be predicated on afinding that
Congress intended to create separate offenses -- is more
plausible. We recognize, however, that the import of Paramo
is unclear. Since we are reviewing the defendants'
conviction for plain error, though, we are not persuaded
that the Paramo footnote itself satisfies defendants' burden
15
under Olano of demonstrating that Congress clearly
intended S1956(a)(1) to create three separate offenses.
Unlike Paramo, defendants' second case, United States v.
Conley, 37 F.3d 970 (3d Cir. 1994), is not of much moment.
Conley only states that to violate S1956(a)(1), the
transaction must be committed with the intent either to
promote the specified unlawful activity or to conceal the
nature and source of the income. Id. at 978. This certainly
is an accurate statement, but it does not stand for the
proposition defendants urge -- namely, that we have
recognized two separate offenses under S1956. Conley only
restates the question.
2. The Edmonds Interpretive Principles
Since the text and the legislative history do not provide
insight as to whether Congress intended in S1956(a)(1) to
create separate offenses or separate means of committing a
single offense, we turn for guidance to the three interpretive
principles which we applied in Edmonds. Thefirst principle
(noted supra) is the general historical tradition that a jury
verdict represents substantial agreement on a discrete set
of actions, generally committed at a specific place at some
specific time. We also noted in Edmonds that criminal
statutes and the common law have also generally defined
crimes both in terms of this discrete set of actions and
accompanying mental states. Id. at 818-19. Of course, as
Schad indicates, a statute that sets forth alternative mental
states that could accompany the same set of actions does
not necessarily belie this historical tradition. Thus, we
conclude that this interpretive principle would not clearly
bar a finding of separate means here, because, unlike
Edmonds, we deal in the present case only with alternative
mental states, and not with alternative courses of conduct
accompanied by different mental states. In other words, on
the first principle this case is more like Schad than
Edmonds.
Generally speaking, we avoid statutory constructions that
raise grave and doubtful constitutional questions. See
Edmonds, 80 F.3d at 819. Accordingly, under the second
interpretive principle, we examine whether either competing
16
construction of the statute would raise such concerns as a
matter of due process. Taking our cues from Schad, we
stated in Edmonds that in order to conduct this analysis,
we must assess whether the alternative means are so
morally disparate as to offend the considerations of
historical practice and equivalent blameworthiness which
underpin due process. On the historical practice axis, while
we are not presented here with a criminal statute with a
rich common law or statutory history, see infra, there are
certainly analogous circumstances where single offenses
with alternative mental states have been permitted. In fact,
we need look no further than the murder statute at issue
in Schad itself. Thus, a historical inquiry would not appear
to militate in favor of the separate offense construction.
We similarly find little doubt cast on the separate means
construction of S1956(a)(1) by an equivalent
blameworthiness analysis. We would be hard-pressed to
find that the level of culpability among the promotion,
conceal or disguise, and reporting requirement alternatives
is morally disparate in any significant sense. Indeed, the
avoidance of reporting requirements strikes us as but one
method of concealing large amounts of illicit proceeds, and
to conceal illegal activity is to promote that activity in an
important sense. As these brief comments demonstrate, the
three mental states are closely related, and construing
them as various means of committing the same offense
would appear consistent with due process.
The third principle is the rule of lenity. As in Edmonds,
the ambiguity on the face of the statute, combined with the
lack of relevant legislative history, would counsel us to
apply the rule of lenity and construe the statute in favor of
the defendants. See Edmonds, 80 F.3d at 820-21. In
Edmonds, we note, the rule of lenity was read in
conjunction with findings on the other two interpretive
principles supportive of the defendant's claim. It was this
combination, rather than the rule of lenity standing alone,
that lead us to read the CCE statute to require jury
unanimity on each predicate offense. Id. at 821-22. In the
present case, however, the other two principles suggest that
we should accept the government's interpretation of the
statute, and the mere application of the rule of lenity in
17
these circumstances is insufficient to compel a different
result. Thus, our Edmonds analysis leads us to the
conclusion that Congress intended the S1956(a)(1)
alternatives to be construed as separate means of
committing the same offense.
The foregoing discussion should not be construed as
cutting back on our aspirational pronouncement in
Edmonds that Congress should speak clearly (unlike here)
when it wants to create alternative means of committing the
same offense, and that the failure to speak clearly will
counsel a finding of separate offenses. In this case,
however, defendants simply cannot demonstrate that the
Edmonds principles would support their reading even in the
absence of an amendment to the statute providing a clear
statement to the contrary.
C. Application of Schad - Due Process
Under Schad, once we have determined that the
legislature intended to create different means for violating
the same offense, we must assess whether that statutory
definition is constitutional as a matter of due process.
Although the Schad plurality did not exhaustively define
the universe of those considerations potentially relevant to
judgments, it did suggest that the core of the analysis is an
examination of (1) history and widely shared practice as
indicators of what fundamental fairness and rationality
require; and (2) the equivalent blameworthiness and
culpability of the alternatives. See Schad, 501 U.S. at 640-
42, 645. We recognize that these are the same factors that
we have applied in our legislative intent analysis under
Edmonds, supra; the difference is that our analysis under
the second Schad prong is generally more searching, as we
must decide whether the legislature's construction actually
violates due process, rather than expressing a preference
for the construction which is more likely to avoid
constitutional questions.
1. Historical Practice
As in Edmonds, there is no clear historical analogue to
the federal money laundering statute. The Money
Laundering Control Act of 1986, Pub. L. No. 99-570,
18
SS1351-52, 100 Stat. 3207, 3207-18, defines and prohibits
for the first time a category of activity known as money
laundering. See Max Kaufman, et al., Money Laundering, 34
Am. Crim. L. Rev. 793, 794 (1997). The legislation has its
origins in three otherwise disparate doctrinal threads: (a)
an evolving law of conspiracy; (b) forfeiture law; and (c) law
enforcement authorities' perceived difficulties with
enforcement of the currency transaction reporting
requirements of the Bank Secrecy Act, 31 U.S.C.SS5311-
5324 (1988). See G. Richard Strafer, Money Laundering:
The Crime of the 90's, 27 Am. Crim. L. Rev. 149, 150
(1989); see also Scott Sultzer, Money Laundering: The Scope
of the Problem and Attempts to Combat It, 63 Tenn. L. Rev.
143 (1995) (discussing background of money laundering
legislation). As Schad noted, historical analysis will be "less
useful as a yardstick in cases dealing with modern
statutory offenses lacking clear common-law roots than it is
in cases ... that deal with crimes that existed at common
law." Schad, 501 U.S. at 640 n.7. That is precisely the case
here. While the mere novelty of the statute does not
insulate it from the type of critical examination which
Schad mandates that we conduct to determine whether this
statutory definition is fundamentally fair and rational, id. at
643, defendants have failed to persuade us that history
demands construing S1956(a)(1) as creating separate
offenses in order to satisfy due process.
As noted supra, we are not faced with a statute like the
CCE statute at issue in Edmonds, which involved the
potential interpretation of alternative predicate offenses as
different means of violating a single continuing series
element. Instead, we are presented with a statute which,
like the murder statute at issue in Schad, sets forth
alternative mental states. If we examine the law of
conspiracy -- one historical keystone for S1956-- it is clear
that when a jury returns a general guilty verdict on a
multiple-object conspiracy count, the conviction will stand
over Fifth Amendment due process objections so long as
there is sufficient evidence to support any one of the
objects of the conspiracy. United States v. Conley, 92 F.3d
157, 163 (3d Cir. 1996) (citing Griffin v. United States, 502
U.S. 46, 56-57 (1991)); Edmonds, 80 F.3d at 839 (Garth, J.
concurring in part and dissenting in part); see also United
19
States v. Vastola, 989 F.2d 1318, 1330 (3d Cir. 1993)
(discussing Griffin). In the present case, defendants were
charged with conspiring to money launder, and thus the
alternative mental states act essentially as surrogates for
the objects of the conspiracy. In that sense, the Conley-
Griffin analysis of multiple-object conspiracy counts
provides an apt historical analogue for the statutory
scheme at issue here, and counsels that a specific
unanimity instruction should not be constitutionally
required. We would be hard-pressed to find that historical
analysis clearly would compel the conclusion that the
separate means construction of S1956 violates due process.
2. Equivalent Blameworthiness
The second due process requirement, according to Schad,
is that different means of committing the same offense, for
which unanimity is not required, must reflect notions of
equivalent blameworthiness or culpability. See Schad, 501
U.S. at 643. The proper critical question, Schad informs us,
is not whether the three alternative means are moral
equivalents in all possible cases; the question is whether
the alternatives could ever be treated as the equivalents of
each other. Id. at 643-44. As the Supreme Court stated:
Whether or not everyone would agree that the mental
state that precipitates death in the course of robbery is
the moral equivalent of premeditation, it is clear that
such equivalence could reasonably be found, which is
enough to rule out the argument that this moral
disparity bars treating them as alternative means to
satisfy the mental element of a single offense.
Id. at 644-45. We are persuaded that the same conclusion
obtains here. We have little doubt that the intent to
promote an unlawful activity can reasonably be found to be
the moral equivalent of the intent to conceal or disguise the
proceeds from such an activity. Indeed, those intents will,
in many cases, be coextensive. Similarly, the intent to
conceal or disguise and the intent to avoid reporting
requirements could reasonably be found to be morally
equivalent in the majority of cases.5 Thus, we cannot
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5. Defendants argue that finding moral equivalence here ignores the
nature of the three alternatives, since, they contend, there is a
20
conclude that the different routes of violating the statute
are so morally disparate that a legislature cannot
constitutionally treat them as mere means. See Edmonds,
80 F.3d at 820. Thus, the separate means construction
does not plainly violate due process.
D. Jury Confusion
Defendants further contend that their verdicts should be
reversed on the ground that the jury charge, because of the
lack of a specific unanimity instruction, was capable of
confusing and misleading the jury, citing our opinion in
Bennis v. Gable, 823 F.2d 723, 727 (3d Cir. 1987). The
basis for this contention is the fact that, although the
money laundering statute is written -- and the jury was
instructed -- in the disjunctive, the indictment was drafted
in the conjunctive and the government focused its efforts at
trial on only one of the three alternative mental states.
According to defendants, such circumstances take this case
out of the routine case in which a general unanimity charge
will ensure that the jury is unanimous on the factual basis
for a conviction, even where an indictment alleges
numerous factual bases for criminal liability. See United
States v. Beros, 833 F.2d 455, 460 (3d Cir. 1987). We
disagree.
In United States v. Cusumano, 943 F.2d 305 (3d Cir.
1991), the defendant was indicted under a statute that lists
multiple routes to a conviction in the disjunctive. As in the
present case, while the language of the indictment was
written in the conjunctive, the district court charged the
jury in the disjunctive. Cusumano challenged his conviction
under this charge, arguing that the court should have
charged the jury in the conjunctive, and, failing that, the
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substantial difference between plowing funds back into an illegal
narcotics business and avoiding currency transaction reporting
requirements. Even if true, under Schad, we need only find that the
equivalence could ever reasonably be found. We believe that there is no
significant disparity in blameworthiness between promoting illegal
activity and avoiding a requirement to report financial transactions
associated with that activity, since avoiding the reporting requirements
often promotes the continuation of the illegal activity.
21
district court should have given a specific unanimity
instruction under Beros (i.e., informing the jury that they
must be unanimous in concluding that he had committed
one of the disjunctive acts). We rejected both claims, noting
first that "the general rule is that when a jury returns a
guilty verdict on an indictment charging several acts in the
conjunctive . . . the verdict stands if the evidence is
sufficient with respect to any of the acts charged." Id. at
311. We held that this rule extends to cases where the
indictment is in the conjunctive, but the jury instructions
were in the disjunctive. Id. Furthermore, we found that
since Cusumano's case did not involve allegations of
different sets of facts, the only possible jury confusion arose
from the disjunctive nature of the jury charge under the
statute. Cusumano, 943 F.2d at 312. We concluded that
there was an insufficient risk of jury confusion under such
circumstances to trigger the need for a specific unanimity
instruction. Id. This case is quite analogous. In light of
Cusumano, we do not believe that defendants have
demonstrated plain error here.
E. Conclusion
For all the foregoing reasons, we conclude that
application of the Schad-Edmonds test to the present
statute yields the conclusion that it is neither clear nor
obvious that the three alternative mental states defined in
S1956 could not properly be treated as separate means of
committing a single offense. We find especially persuasive
the reasoning in Holmes that the point of the money
laundering statute is to punish a financial transaction
involving known illicit proceeds, accomplished for a guilty
purpose. That multiple purposes could satisfy this end does
not mean that Congress intended to create multiple offenses.6
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6. To the contrary, like the court in Holmes we find problematic the
obvious import of defendants' position -- namely, that a subsequent
defendant could be convicted of two different money laundering offenses
based on the same transaction simply because he knew that his
prohibited conduct was designed for two unlawful purposes. See Holmes,
44 F.3d at 1155. Take, for example, the situation in which a defendant
deposits proceeds from an investment fraud scam into a bank account,
and then purchases a cashier's check on that account which he uses to
22
Therefore, under a plain error standard of review, no
specific unanimity instruction was necessary.
We recognize that the Paramo footnote could potentially
be read to the contrary. We believe, however, that the
relevant language in that footnote is unclear as to its
import, and it does not control our decision in this case
where we review for plain error. We have indicated why,
under the Schad-Edmonds analysis, we think that
defendants' interpretation of the Paramo footnote is wrong.
We leave, however, to another day (or to the en banc court)
the task of definitive interpretation.
Issue 3 - Did the government present insufficient
evidence to convict Nunez of conspiring to launder money?
When a conviction is challenged on sufficiency of
evidence grounds, we must "view the evidence in the light
most favorable to the verdict, and must presume that the
jury has properly carried out its functions." United States v.
Coleman, 811 F.2d 804, 807 (3rd Cir. 1987) (citations
omitted). A defendant seeking to overturn a verdict for
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pay off a mortgage on a piece of property which he owns. Further
suppose that while much of the property is used for legitimate purposes,
the defendant also conducts his investment scam from an office on the
property. This transaction could satisfy the conceal or disguise prong of
S1956(a)(1), and it could potentially also satisfy the promotion prong,
since by paying off the mortgage, the defendant was able to continue to
use the office and conduct his fraudulent venture. See United States v.
Wilson, 77 F.3d 105 (5th Cir. 1996) (purchase of house with drug
proceeds could satisfy both promotion and concealment prongs); United
States v. Johnson, 971 F.2d 562 (10th Cir. 1992) (sufficient evidence to
satisfy promotion prong when defendant uses illicit proceeds to pay
mortgage on his home, which includes office used to conduct fraudulent
venture). Similarly, if the same defendant purchased a high-priced
automobile in the name of a phony corporation and used that
automobile to impress potential victims and encourage them to
contribute to his sham investments, both the promotion and conceal or
disguise prongs could be satisfied. Id. If we accepted defendants' logic,
our hypothetical defendant could be convicted of two separate crimes in
each instance. But see Wilson, 77 F.3d at 108-09 & n.2 (5th Cir. 1996)
(upholding conviction under S1956(a)(1)(B)(i) and S1956(a)(1)(A)(i) based
on same transaction).
23
insufficient evidence "bears a heavy burden." United States
v. Carr, 25 F.3d 1194, 1201 (3d Cir. 1994) (citations
omitted).
To sustain a conspiracy charge, "the government can rely
entirely on circumstantial evidence to prove" the conspiracy
as long as the inferences drawn from the circumstantial
evidence "have a logical and convincing connection to the
facts established." Id. at 1201 (citations omitted). The
government must prove that the conspirators had"a unity
of purpose, an intent to achieve a common goal, and an
agreement to work together." Id. at 1201. In order to
sustain a conviction for conspiracy to launder money,
Conley requires the government to establish (1) a
conspiracy to launder money was entered into by two or
more people; (2) one of the conspirators committed an overt
act in furtherance of the conspiracy; (3) the defendant knew
the purpose of the conspiracy; and (4) the defendant
deliberately joined the conspiracy. Conley, 37 F.3d at 976-
977.7
In this case, the government established the first element
of the existence of the conspiracy through the testimony of
Robert and Rosario Foti. These two leaders of the
conspiracy made it clear that a conspiracy existed. They
also admitted that they engaged in a number of overt acts
to further the conspiracy. Nunez, as to the third element,
denies that he knew the purpose of the conspiracy. The
evidence against him is that he was present in an
automobile when Robert Foti and another person were
discussing the conspiracy. Upon his arrest, Nunez informed
a U.S. Customs officer that he was aware he was receiving
drug money. Nunez went with Foti to pick up over a half-
million dollars in cash from a fast-food parking lot.
Deliveries of this type occurred on various occasions.
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7. The parties have stated the elements the government must prove as
being different from the Conley test, preferring to rely on Brown.
However, in Brown, the defendant was contesting his conviction of
money laundering, whereas Nunez contests his conviction of conspiring
to launder money. Thus, Conley is the more accurate statement of the
elements the government must satisfy.
24
Nunez now attempts to discredit each piece of evidence
against him. Such attempts are futile; we do not weigh the
evidence. Instead, we determine only if enough evidence
was presented upon which a jury could convict. Nunez's
admission to the U.S. Customs officer that he knew he was
receiving drug money is enough to establish his knowledge
of the conspiracy. Nunez's participation in picking up and
counting thousands of dollars of cash from fast-food
parking lots is further evidence from which a reasonable
jury could conclude Nunez was aware of the purpose of the
conspiracy. The government also showed that Nunez
deliberately joined the conspiracy. By arranging to pick up
hundreds of thousands of dollars in cash from fast-food
parking lots, Nunez deliberately furthered the conspiracy,
and thus joined it.
Therefore, Nunez's request for a new trial is denied.
V. Other Grounds
The defendants also argue they are entitled to a new trial
because of the ineffective assistance of counsel, newly-
discovered evidence, prosecutorial misconduct, and an
improper willful blindness jury instruction. All of these
issues were adequately addressed by the district court in its
post-trial order denying the defendants' motion for a new
trial. None of these contentions merits any further
consideration.
We AFFIRM the rulings of the district court.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
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