United States v. Lieberman ( 1997 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v. No. 96-4118
MICHAEL A. LIEBERMAN,
Defendant-Appellant.
Appeal from the United States District Court
for the District of Maryland, at Baltimore.
Walter E. Black, Jr., Senior District Judge.
(CR-93-391-B)
Argued: December 6, 1996
Decided: January 24, 1997
Before WIDENER, MURNAGHAN, and NIEMEYER,
Circuit Judges.
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Reversed and remanded by unpublished per curiam opinion. Judge
Niemeyer wrote a dissenting opinion.
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COUNSEL
ARGUED: Stephen Howard Sacks, Baltimore, Maryland, for Appel-
lant. Harvey Ellis Eisenberg, Assistant United States Attorney, Balti-
more, Maryland, for Appellee. ON BRIEF: Lynne A. Battaglia,
United States Attorney, Baltimore, Maryland, for Appellee.
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Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
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OPINION
PER CURIAM:
The defendant, Michael A. Lieberman, an attorney and certified
public accountant, was indicted for conspiracy to commit money
laundering in violation of 18 U.S.C. § 1956 (1994 & Supp. 1996). He
practiced alone frequently and over a substantial period of time repre-
sented Christopher Ecker. The representation concerned legal, per-
fectly public matters, especially preparation of income tax returns.
Ecker, so far as the record shows, made no revelation to Lieberman
of the sources from which Ecker derived assets for the financial trans-
actions in which Ecker engaged or from which to meet his tax obliga-
tions.
The matter is of controlling importance since Ecker was a frequent
and successful marijuana smuggler, particularly from Thailand, and
from such activities derived substantial sums of money. The United
States indicted Lieberman for money laundering, on the belief that
many of the sums received by Lieberman from Ecker to carry on busi-
ness ventures for Ecker to meet the income tax liabilities shown on
returns prepared by Lieberman (and which dealt only with legal activ-
ities by Ecker), as well as Lieberman's attorney's fees, were products
of the illegal drug activity. However, the fact of such a source was not
enough alone to prove the money laundering. In addition, proof of
knowledge of an illegal source was requisite. United States v. Heaps,
39 F.3d 479 (4th Cir. 1994); United States v. McDougald, 990 F.2d
259 (6th Cir. 1993); United States v. Campbell , 977 F.2d 854 (4th Cir.
1992) (a conviction of money laundering was possible because there
was evidence of actual subjective knowledge), cert. denied, 507 U.S.
938 (1993). The government acknowledges that actual subjective
knowledge is essential to proof of guilt. Direct, and even indirect,
proof was not forthcoming. Knowledge of other drug dealers or of
other acquaintances to whom Ecker revealed his drug activities was
shown,1 but there was absolutely no proof that Lieberman was told of
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1 Generally, Ecker claimed to be engaged in legitimate business.
2
or was present at or otherwise learned of the illegality of Ecker's
activities or the resulting illegal proceeds.2
The prosecution relied on and the district judge allowed the doc-
trine of willful blindness to permit the jury to find an inference of
knowledge. The fact that Ecker came from a respectable family and
that his father had been the mayor of Rockville, Maryland was one
proof asserted3 together with Ecker's lack of probable sources of legal
funds, which, it was asserted, demonstrated that the money received
from Ecker by Lieberman to meet altogether legal obligations, such
as legal fees and contractual debts were of suspicious origin. But a
Mayor of Rockville could have been wealthy and Ecker's lack of
sources of legal funds at the time of trial does not establish what his
situation was at the earlier times when he dealt with Lieberman. The
lottery and the race tracks are regularly involved in favoring the
lucky, sometimes with substantial sums of money. We know of no
and the government has suggested no requirement that a lawyer or
public accountant must know from where a client's money comes.
Several lawyers who handled transactions involved in the case testi-
fied that they never asked about the source of money provided by
Ecker. Hence concluding knowledge from merely not asking is out-
right speculation.
In short, there has been no proof, let alone proof beyond a reason-
able doubt, of anything about which Lieberman was willfully blind.
Therefore, while the instruction on willful blindness may have been
correct, the evidence to support it was wholly lacking.
Consequently, the judgment of conviction is reversed and the case
is remanded for entry of a judgment of acquittal.
REVERSED AND REMANDED.4
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2 On one occasion, Ecker claimed that Lieberman was aware of all his
business dealings, but the reference was to the legal business dealings.
3 There was no evidence of either knowledge by Lieberman of a lavish
life style by Ecker, or indeed, of actual such lavish life style.
4 Ecker was also charged, but pleaded the Fifth Amendment so was not
available as a witness for either the government or Lieberman. Undoubt-
3
NIEMEYER, Circuit Judge, dissenting:
The question we have is whether the government presented suffi-
cient circumstantial evidence to have allowed any reasonable jury to
find beyond a reasonable doubt that Michael Lieberman conspired to
launder illegal money of his client, Christopher Ecker. Because I
believe the evidence was sufficient, I would affirm the jury's verdict.
While the government was unable to present direct evidence that
Lieberman knew Ecker's illegal drug activity was the source of his
money, the circumstantial evidence and common sense support the
conclusion that he knew enough to attempt to place himself in a posi-
tion of deniability.
For six years Lieberman, who was both an accountant and a law-
yer, acted as Ecker's financial consultant, accountant, and lawyer. In
that capacity, according to the evidence, he "was aware of all of
[Ecker's] business dealings and was hired to help him . . . invest his
money." Evidence was presented that Lieberman was not only
involved in all of Ecker's investments, but also acted aggressively in
negotiating deals on Ecker's behalf.
It is uncontroverted that during the period in which Lieberman
advised Ecker, Ecker was a marijuana dealer who had made millions
of dollars in that illegal business; he made $4 million in one transac-
tion alone. While Ecker had income from legitimate business for
which Lieberman prepared and filed tax returns, the amount of that
income claimed during those years was modest, ranging from $34,000
to $74,000. But during the same period, Lieberman was handling
transactions on behalf of Ecker in the six-figure range, far beyond the
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edly, Ecker was almost certainly the most knowledgeable source of
information as to Lieberman's knowledge of drug source or the absence
thereof. Ecker's plea of guilty, which would have negated the availability
of the Fifth Amendment, was close to being finally negotiated when Lie-
berman was tried, but the government did not seek a deferral of Lieber-
man's trial to secure Ecker's testimony. The fact suggests that Ecker's
testimony would not have been helpful to the prosecution on the issue of
Lieberman's knowledge of Ecker's illegal activities.
4
amounts disclosed on Ecker's tax returns. No legitimate source for
Ecker's additional income was ever offered.
While the government was unable to impute direct knowledge to
Lieberman of Ecker's drug dealings, it did show that Lieberman knew
that Ecker acquired money with "a lot of risk." The government pres-
ented testimony, moreover, that Ecker was cavalier about disclosing
his marijuana deals. There was evidence that he advised both Marc
Klein and his landlord of the $4 million marijuana deal. At one point,
when Ecker turned over a duffle bag full of cash (about $200,000
worth) to invest in Klein's business, Ecker said only he, Lieberman,
Klein and one other person knew about the deal.
From this evidence, and other details presented by the government,
the jury could well have concluded beyond a reasonable doubt that
Lieberman either knew of Ecker's illegal dealings or deliberately
turned a blind eye to them in order to be able to deny knowledge.
Accordingly I would affirm Lieberman's conviction as a conspirator
in Ecker's money laundering efforts.
5