United States v. Wilson ( 2001 )

Revised May 16, 2001
UNITED STATES COURT OF APPEALS
For the Fifth Circuit
___________________________
No. 00-20041
___________________________
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
VERSUS
GEORGE L.J. WILSON,
Defendant-Appellant.
___________________________________________________
Appeal from the United States District Court
for the Southern District of Texas
___________________________________________________
April 19, 2001
Before REYNALDO G. GARZA, DAVIS, JONES, Circuit Judges.
W. EUGENE DAVIS, Circuit Judge:
George Wilson was indicted on multiple charges of conspiracy
to commit money laundering, money laundering, mail fraud, and
engaging in monetary transactions involving property derived from
specified unlawful activity, in violation of 18 U.S.C. §§ 1956(h),
1956(a)(1)(A)(i), 1341, and 1957(a). Wilson was tried by a jury
and convicted on eighteen of nineteen counts. He now appeals these
convictions. For the reasons that follow, we REMAND for a hearing
on Wilson’s motion to dismiss and otherwise AFFIRM, subject to the
district court’s ruling on that motion.
I.
George Wilson was a prominent businessman in Nassau, Bahamas.
In 1986, he became involved with the Winston Hill Assurance
Company, which at that time provided bonding services. Wilson’s
relationship with Winston Hill began in 1986 when American
businessman and former Texas state senator James Day approached
Wilson. Day proposed that he procure the necessary approvals and
business for Winston Hill to expand into the casualty insurance
business if Wilson would provide the financial support to
underwrite that business. Wilson agreed, and the company began
selling insurance through brokers.
Wilson was the president of Winston Hill, and operated out of
Winston Hill’s home office in Nassau. Winston Hill’s Nassau staff
also included a secretary, an office manager, a receptionist, a
typist, and the firm’s accountant, Norwood Rolle. The Nassau
office was an old, small, unkempt, two-story house. Winston Hill’s
other office was located in Houston, Texas. Steve Udell, James
Day, Dion Burkard, and John Adair were all employees of the Houston
office. Udell (a lawyer) and Day headed up the Houston office,
Burkard was the office manager and later became a junior
underwriter, and Adair was the accountant.
In August 1996, Winston Hill was reportedly capitalized with
$5,000,000. Winston Hill issued financial statements to brokers
reporting the following total assets: over $63,000,000 on December
31, 1988, over $65,000,000 on March 31, 1989, almost $67,000,000 on
September 30, 1989, and over $70,000,000 on December 31, 1989. The
2
financial statement reporting over $63,000,000 in total assets as
of December 31, 1988 was audited by Norwood Rolle.
Winston Hill reported that a large portion of the company’s
assets were held in Gulf Union Bank in Nassau, Bahamas. Insurance
brokers and insurance regulators uniformly testified that Wilson
and other employees of Winston Hill denied them access to the
records to substantiate these assets. Wilson and Udell assured
brokers that the assets were in Gulf Union Bank, but they were
unwilling to provide any proof other than the financial statements.
By June of 1990, Winston Hill was placed on the California
Department of Insurance’s (CDOI) “watch list.” CDOI places a
company on this list after it receives a number of complaints of a
company’s tardy payment of claims. A letter sent by the CDOI on
March 20, 1991 triggered a regulatory bulletin directing its
insurance broker members not to do business with Winston Hill.
By December 1991, Winston Hill had filed for bankruptcy in the
Turks and Caicos Islands - the site of incorporation. Norwood
Rolle, Winston Hill’s accountant, was appointed as liquidator to
wind up the company. Rolle went to Houston and filed an ancillary
proceeding in the Bankruptcy Court for the Southern District of
Texas. That court appointed Steve Smith to serve as the co-
fiduciary of this proceeding. Because Rolle had been actively
involved in Winston Hill’s business, Smith had Rolle removed as the
company’s liquidator, and took over that position himself. Smith
determined that most of Winston Hill’s assets were located in the
Gulf Union Bank in Nassau.
3
Smith received records of Winston Hill’s account at Gulf Union
Bank. These records showed the following balances: $174 on April
30, 1988; $11,749 on December 31, 1988; $155 on March 31, 1989;
$8,637 on June 30, 1989; $26 on September 30, 1989; $11,187 on
December 31, 1989; and negative $51,390 on December 31, 1990.
Smith was unable to locate any other significant assets of Winston
Hill.
Wilson was indicted on nineteen counts, and was convicted on
counts one through eighteen. The Government’s case revolved around
Wilson’s alleged false statements (primarily about the financial
condition of Winston Hill) designed to attract insurance premiums
to the company, along with related money laundering and other
illegal monetary transactions. He now appeals this eighteen-count
conviction on a number of grounds which we consider below.
II.
Wilson makes several arguments regarding the application of
the statute of limitations in his case which we consider below.
A.
First, he contends that the district court erred in granting
the Government’s application to toll the statute of limitations in
this case, and later, in failing to dismiss the entire indictment
because the statute of limitations had expired.
The latest offense date alleged in the indictment was June 26,
1991. The indictment in this case was not returned until October
26, 1998. Wilson therefore contends that the indictment is
untimely because it was returned outside of the five-year statute
4
of limitations provided by 18 U.S.C. § 3282.1 The Government
argues that the indictment here was returned timely because the
district court granted its application for a suspension of the
statute of limitations under 18 U.S.C. § 3292 on December 21, 1994.
Section 3292 provides, in pertinent part, as follows:
(a)(1) Upon application of the United States, filed
before return of an indictment, indicating that evidence
of an offense is in a foreign country, the district court
before which a grand jury is impaneled to investigate the
offense shall suspend the running of the statute of
limitations for the offense if the court finds by a
preponderance of the evidence that an official request
has been made for such evidence....
1.
Wilson first maintains that the district court erred in
tolling the statute of limitations under 18 U.S.C. § 3292 in its
December 21, 1994 Order. We review the factual findings underlying
the district court’s decision to toll the statute of limitations
for clear error. United States v. Meador, 138 F.3d 986, 991 (5th
Cir. 1998). An application to toll the statute of limitations
under § 3292 is a preindictment, ex parte proceeding. Thus, the
only evidence the district court had before it was the evidence
presented by the United States.
In its application for tolling, the United States presented
the district court with a copy of a letter addressed to the
Attorney General of the Bahamas and signed by the Director of the
1
18 U.S.C. § 3282 provides that “[e]xcept as otherwise
expressly provided by law, no person shall be prosecuted, tried, or
punished for any offense, not capital, unless the indictment is
found or the information is instituted within five years next after
such offense shall have been committed.”
5
Criminal Division of the Department of Justice’s Office of
International Affairs. This letter requested “authenticated copies
of the records of all accounts at the Gulf Union Bank of Nassau
under the names of Winston Hill, George Wilson, and Management
International” and “authenticated copies of all records of the
Registrar General’s Office...relating to the Winston Hill Assurance
Company.” R. at 1-304-10.2 The United States represented to the
court that this letter was delivered to the Bahamian government on
or about November 24, 1993. The words “VIA FEDERAL EXPRESS” were
typewritten at the top of the letter. Based on this evidence, the
district court made the finding required by § 3292: the United
States made an official request to the Bahamian government for
evidence located in the Bahamas. In light of the evidence the
Government presented, the district court did not clearly err in
finding that the United States made this request for evidence and
correctly tolled the statute of limitations.
2.
Wilson next challenges the district court’s July 13, 1999
Order denying his motion to dismiss the indictment as untimely, as
well as his request for a hearing on this motion. In his bare
bones motion to dismiss, Wilson asserted that the applicable
statute of limitations for all counts of the indictment was five
2
The request was made “pursuant to the Treaty between the
United States and the Commonwealth of The Bahamas on Mutual
Assistance in Criminal Matters, signed at Nassau June 12 and August
18, 1987" and thus meets 18 U.S.C. § 3292's requirement that the
“official request” be “a request under a treaty or convention.” R.
at 1-310.
6
years, and that the five-year period expired before the indictment
was returned. Wilson did not address in his motion the fact that
the district court had tolled the statute.
The Government responded to Wilson’s motion to dismiss by
stating that a formal legal assistance request had been made of the
Bahamian government, and that the statute of limitations had been
tolled under 18 U.S.C. § 3292. It attached the Department of
Justice’s November 24, 1993 letter, described above, its
application for tolling filed on December 12, 1994, and the
district court’s December 21, 1994 Order tolling the statute of
limitations. The district court denied Wilson’s motion because the
statute of limitations had been tolled by its December 21, 1994
Order. The court found that the “official request” required under
§ 3292 was made on November 24, 1993 and that the statute of
limitations was therefore suspended from that day until November
23, 1996. The court then determined that the filing of the
indictment on October 26, 1998 was timely, given the above
suspension period.
We review the district court’s denial of a motion to dismiss
de novo. Yates v. Stalder, 217 F.3d 332, 334 (5th Cir. 2000).
Wilson did not assert in his motion to dismiss or elsewhere that
the Government did not make a formal legal assistance request of
the Bahamian government, nor did he argue that the statute of
limitations was improperly tolled. The Government produced ample
evidence to show that the statute of limitations was extended as a
result of tolling under § 3292, and that the indictment was
7
therefore returned in a timely manner. The district court did not
err in denying Wilson’s motion to dismiss. Moreover, because
Wilson’s motion to dismiss did not raise a factual issue, the
district court did not err in denying his request for a hearing.
See n.3, infra.
3.
Wilson next argues that the district court erred in its August
4, 1999 Order denying his motion for reconsideration of his earlier
motion to dismiss. In his motion for reconsideration, Wilson, for
the first time, challenged the Government’s assertion that it sent
the letter to the Bahamian government requesting assistance.
Wilson presented evidence to support this contention. He pointed
out that this letter differed from another letter sent by the OIA
to the Bahamas on December 3, 1993, because it did not contain a
letterhead address, case number, or identification number. Also,
Wilson pointed out that the United States did not produce the
Federal Express air bill for the letter, nor did it produce the
Federal Express bill for letters sent during November of 1993 to
support its contention that it sent the letter via Federal Express.
Wilson also argued that the government log of the OIA’s
Correspondence Unit indicates that the letter was not sent. This
log has no entry reflecting that a letter was sent to the Bahamas
in November of 1993. In addition, Wilson produced statements of
Bahamian officials, as well as records of the Supreme Court of the
Bahamas, asserting that the Bahamian government never received the
letter.
8
In opposition to Wilson’s assertion that the letter was not
sent, the district court had before it the evidence presented by
the United States in the Government’s Response to Motion to Dismiss
Indictment. As mentioned above, this consisted of a formal legal
assistance request letter dated November 24, 1993 that contained
the words “VIA FEDERAL EXPRESS,” and the United States’
representation that it was sent to the Bahamian government.
The district court has considerable discretion whether to
consider evidence on a motion for rehearing, particularly where
that evidence was available and could have been presented in the
initial hearing. Here, the district court’s August 4, 1999 Order
denying Wilson’s motion for reconsideration and request for a
hearing does not explicitly state whether the court considered the
evidence presented by Wilson to support his contention that the
letter was not sent. Because the order states that the motion for
reconsideration and request for a hearing were denied after
“[h]aving considered the motion, submissions, and applicable law,”
we read the order as though the district court did consider
Wilson’s evidence. District Court’s Order of August 4, 1999. R.
at 2-332. This view is reinforced by the fact that the Government
does not argue that the district court did not consider Wilson’s
evidence or that it was appropriate for it to decline to consider
his evidence. Because the evidence raises a factual issue as to
whether the letter was sent, the district court erred in denying
9
Wilson’s request for a hearing on his motion for reconsideration.3
We therefore vacate the district court’s order denying Wilson’s
motion to dismiss without a hearing and remand for the district
court to conduct a hearing on the factual issue of whether or not
the letter was sent.
B.
Wilson next argues that the district court erred in not
submitting the issue of tolling under 18 U.S.C. § 3292 to the jury.
Relatedly, he contends that the district court abused its
discretion in rejecting his requested jury instruction. Wilson’s
requested jury instruction stated, in pertinent part, that “[i]n
order to find that the statute of limitations was properly
suspended, the Government must establish beyond a reasonable doubt
all of the following: ...[t]he central authority of the United
States properly requested the evidence from the central authority
of the Bahamas on November 24, 1993....” Special Requested Jury
Instruction No. 25, R. at 3-605. In other words, Wilson asked for
an instruction that would have required the jury to determine
beyond a reasonable doubt that the United States sent the formal
legal assistance request letter to the Bahamian government.
Wilson proceeds from two generally accepted premises: 1) that
“commission of the crime within the limitations period of [18
3
See 3 Charles Alan Wright, FEDERAL PRACTICE AND PROCEDURE § 675 (2d
ed. 1982)(“An evidentiary hearing need not be set as a matter of
course, but only if the motion alleges facts that, if proved, would
require the grant of relief. Factual allegations that are general
and conclusory or based upon suspicion and conjecture will not
suffice.”)(citations omitted).
10
U.S.C.] § 3282 is an essential element of the offense which the
government must prove beyond a reasonable doubt,” United States v.
York, 888 F.2d 1050, 1057 n.10 (5th Cir. 1989)(citations omitted);
and 2) that “[t]he Constitution gives a criminal defendant the
right to have a jury determine, beyond a reasonable doubt, his
guilt of every element of the crime with which he is charged.”
United States v. Gaudin, 515 U.S. 506, 522-23, 115 S. Ct. 2310, 2320
(1995). From this, Wilson argues that in this case the question of
whether the statute of limitations was properly tolled must be
found by a jury beyond a reasonable doubt. “We review the refusal
to give a requested jury instruction for abuse of discretion....”
United States v. Barnett, 197 F.3d 138, 142 (5th Cir. 1999).
Section 3292 governs tolling of the statute of limitations
based on a request for evidence made by the United States to a
foreign country. This section provides, in pertinent part, that
“the district court before which a grand jury is impaneled to
investigate the offense shall suspend the running of the statute of
limitations for the offense if the court finds by a preponderance
of the evidence that an official request has been made for such
evidence....” 18 U.S.C. § 3292(a)(1)(emphasis added).
Thus, contrary to Wilson’s argument, the plain language of the
statute requires the district court to decide by a preponderance of
the evidence whether the statute of limitations shall be tolled.
And we have no doubt that Congress has the authority to extend or
retract the statute of limitations. “[T]he history of pleas of
limitation shows them to be good only by legislative grace and to
11
be subject to a relatively large degree of legislative control.”
Chase Securities Corp. v. Donaldson, 325 U.S. 304, 314, 65 S. Ct.
1137, 1142 (1945). The “shelter of statutes of limitations ‘has
never been regarded as what is now called a ‘fundamental’ right,’
but is instead ‘good only by legislative grace and...subject to a
relatively large degree of legislative control.’” Gray v. First
Winthrop Corp., 989 F.2d 1564, 1573 (5th Cir. 1993)(quoting Chase,
325 U.S. at 314). Because Congress assigned to the court the
authority to decide whether the limitations period should be
extended, the district court did not err in deciding this issue and
in declining to submit it to the jury.
Once the district court tolls the statute of limitations, this
becomes the applicable limitations period. The United States must
then prove beyond a reasonable doubt that the indictment was
brought within this extended period, which begins when the
defendant commits his last criminal act. The applicable statute of
limitations period in this case is therefore eight years.4 Wilson
concedes that the indictment was returned within this eight-year
period. Therefore, his constitutional right to have all elements
of his crime proved beyond a reasonable doubt was not violated.
4
The five-year statute of limitations provided by 18 U.S.C. §
3282 can be tolled up to three years by 18 U.S.C. § 3292. The
statute of limitations is tolled from the date the official request
is made until “final action” is taken upon this request by the
foreign government. 18 U.S.C. § 3292(b). See also United States
v. Meador, 138 F.3d 986, 987 (5th Cir. 1998). This tolling cannot
exceed three years. 18 U.S.C. § 3292(c)(1). Because final action
was never taken by the Bahamian government, the statute of
limitations was tolled for three years.
12
C.
Wilson argues, finally, that in no event was the Government’s
request to Bahamian authorities for evidence sufficiently specific
to toll the limitations period for the offense charged under 18
U.S.C. § 1957 - engaging in monetary transactions involving
property derived from specified unlawful activity. The
Government’s official request, attached to its November 24, 1993
letter to the Bahamian government, stated that the U.S. government
was investigating offenses of “mail fraud, embezzlement, and money-
laundering.” The letter further noted possible violations of 18
U.S.C. §§ 1341, 1952, 664, 1956(a)(1), and 1956(a)(2). Wilson
argues that this request was not sufficient to toll the statute of
limitations with regard to 18 U.S.C. § 1957, because that statute
was not specifically enumerated in the letter.
We agree with the Government that “it would be unreasonably
formalistic as well as unnecessary to impose a requirement that the
Government list by citation the statutes that may have been
violated....” United States v. Neill, 952 F. Supp. 831, 833 (D.
D.C. 1996). The request for evidence must only be “reasonably
specific in order to elicit evidence of the alleged violations
under investigation by the grand jury.” Id. This circuit has
referred to a violation of 18 U.S.C. § 1957 as “money laundering.”
It is clear to us that the Government’s use of the phrase “money
laundering” in its request for assistance was “reasonably
specific,” and adequate to toll limitations for this offense. See
e.g., United States v. Davis, 226 F.3d 346, 355 (5th Cir. 2000).
13
III.
Wilson next argues that the district court improperly admitted
Bahamian bank records under Fed. R. Evid. 807, the residual hearsay
exception.5 We review evidentiary rulings of the district court
for abuse of discretion. United States v. Phillips, 219 F.3d 404,
409 (5th Cir. 2000).
The Government obtained the bank records from Steve Smith, the
trustee of the ancillary Winston Hill bankruptcy action. In 1994,
Smith began his efforts to identify and liquidate all of the assets
of Winston Hill. Through his Bahamian counsel, Smith asked Gulf
5
Fed. R. Evid. 807 provides as follows:
A statement not specifically covered by Rule 803 or 804
but having equivalent circumstantial guarantees of
trustworthiness, is not excluded by the hearsay rule, if
the court determines that (A) the statement is offered as
evidence of a material fact; (B) the statement is more
probative on the point for which it is offered than any
other evidence which the proponent can procure through
reasonable efforts; and (C) the general purposes of these
rules and the interests of justice will be best served by
admission of the statement into evidence. However, a
statement may not be admitted under this exception unless
the proponent of it makes known to the adverse party
sufficiently in advance of the trial or hearing to
provide the adverse party with a fair opportunity to
prepare to meet it, the proponent’s intention to offer
the statement and the particulars of it, including the
name and address of the declarant.
The Government conceded that the bank records here were not
admissible under Fed. R. Evid. 803(6) (the business records
exception) because there was no custodian available to testify.
Despite the “statement not specifically covered by rule 803"
language in Fed. R. Evid. 807, 807 “is not limited in availability
as to types of evidence not addressed in other exceptions...[807]
is also available when the proponent fails to meet the standards
set forth in the other exceptions.” United States v. Furst, 886
F.2d 558, 573 (3rd Cir. 1989).
14
Union Bank to produce the records of “any and all accounts” of
Winston Hill from 1988 forward. Smith then received the records
from his Bahamian counsel, who obtained the records from Gulf
Union’s lawyers. Smith testified that he relied on the Gulf Union
records to identify and liquidate Winston Hill’s assets.
Wilson argues that the documents do not meet the
“particularized guarantees of trustworthiness” required by the
Confrontation Clause.6 First, he argues that the records were for
one account only (#010201000051), and Wilson raised questions at
trial as to whether additional accounts existed. Although Wilson
questioned whether additional accounts may have existed during
cross-examination of witnesses, the record is otherwise silent on
any other Winston Hill accounts with Gulf Union Bank.
Second, Wilson argued that Gulf Union bank records were not
produced for some time periods. For example, the records Steve
Smith received do not cover December 31, 1989 to December 30, 1990.
The fact that no records were found for certain months, however,
does not detract from the reliability of those that were produced.
Third, Smith testified that he suspected that some of the
posting dates on the records were inaccurate, i.e., he surmised
that some of the dates were a result of either typographical errors
or post-dating. To illustrate this point, Smith referenced several
transactions occurring in the months of January and March of 1991
showing posting dates of 1995, while most transactions occurring in
6
United States v. Ismoila, 100 F.3d 380, 393 (5th Cir. 1996).
15
February of 1991 show 1991 posting dates. Wilson argues that these
date inconsistencies undermine the reliability of the records.
However, the running balance given after each transaction supports
the inference that the 1995 posting dates were merely the result of
clerical error.
Fourth, Smith did not receive the records from the bank
directly, but rather, from his lawyers in the Bahamas, who received
the records from the bank’s lawyers. This indirect chain of
custody from the bank to the court is an issue that may detract
from the reliability of the records and is a factor for the
district court to consider in assessing reliability, but is not
fatal to the records’ admissibility.
Although Wilson’s arguments that these Bahamian bank records
are unreliable are not insubstantial, we are not persuaded that the
district court abused its discretion in reaching a contrary
conclusion and admitting the records. The Government identified
several wire transfers into Winston Hill’s Gulf Union bank account
#000051 which it was able to trace from known transmittals from
International Reinsurance Consultants, Inc. (IRCI), Winston Hill’s
reinsurance company. IRCI made each of these wire transfers to
Winston Hill’s Chase Manhattan bank account in New York, and from
there to Winston Hill’s Gulf Union account in Nassau
(#010201000051). This is the same Winston Hill account in Gulf
Union Bank that Steve Smith located and relied upon.
Other circuits have held that “bank documents, like other
business records, provide circumstantial guarantees of
16
trustworthiness because the banks and their customers rely on their
accuracy in the course of business.” United States v. Pelullo, 964
F.2d 193, 202 (3rd Cir. 1992). This same rationale has been
extended to foreign bank records. See, e.g., Karme v. Commissioner
of Internal Revenue, 673 F.2d 1062, 1064 (9th Cir. 1982) (discussing
records of a Netherlands Antilles bank). The district court did
not abuse its discretion in concluding that the Bahamian records
here possess the necessary guarantees of trustworthiness.
We agree with the Government that Wilson’s concerns, noted
above, go to the weight of the evidence, not its admissibility.
The possibility that the records were incomplete or inaccurate was
argued to the jury, and the jury was entitled to determine the
appropriate weight to be given to the records in light of those
concerns.
IV.
Wilson next challenges the sufficiency of the evidence on all
eighteen counts of his conviction. In reviewing the sufficiency of
the evidence, we “view the evidence in the light most favorable to
the verdict and uphold the verdict if, but only if, a rational
juror could have found each element of the offense beyond a
reasonable doubt.” United States v. Brown, 186 F.3d 661, 664 (5th
Cir. 1999).
A.
In counts two through nine, Wilson was convicted of committing
mail fraud in violation of 18 U.S.C. § 1341. These counts are
based on eight premium checks that Frank Raab, an insurance broker,
17
mailed to Winston Hill between November of 1990 and March of 1991.
The Government proceeded on a theory that Wilson induced Frank Raab
to send these checks by authorizing the preparation and
dissemination of the December 31, 1989 financial statement that
Wilson knew grossly overreported the amount of assets controlled by
Winston Hill. This statement reported that Winston Hill had over
$70,000,000 in assets, including over $67,000,000 in cash or cash
equivalents.
The two basic elements of 18 U.S.C. § 1341 are 1)
participation in a scheme to defraud, and 2) causing a mailing for
the purpose of executing the scheme.7 United States v. Fox, 69
F.3d 15, 17 (5th Cir. 1995). Wilson challenges the sufficiency of
the evidence as to both elements. Wilson first argues that the
Government’s evidence is insufficient as to element one because it
failed to offer sufficient evidence to prove that the financial
statement was false.
In his January 1993 interview with Marcy Kurtz (lead counsel
for Winston Hill during part of its liquidation), Wilson admitted
that Winston Hill “never really had this money [that was reported
on Winston Hill’s financial statements as an asset] in Winston
Hill’s accounts.” R. at 20-177. The records from Gulf Union Bank
in Nassau indicate that the balance in Winston Hill’s account was
7
Section 1341 provides, in pertinent part, that “[w]hoever,
having devised or intending to devise any scheme...for obtaining
money or property by means of false or fraudulent pretenses,
representations, or promises...for the purpose of executing such
scheme...causes to be delivered by mail or such [private or
commercial interstate] carrier....”
18
only $11,187 on December 29, 1989. Witnesses uniformly testified
that the spartan house and staff that constituted Winston Hill’s
home office in Nassau was inconsistent with a company boasting over
$50,000,000 in assets. This evidence is sufficient to prove that
the financial statement was false.
Wilson next argues that proof of the first element is lacking
because the Government offered insufficient evidence to prove that
Wilson knew that the financial statement was false when it was
made. The Government presented testimony from Dion Burkard, who
started working for Winston Hill’s Houston office in 1988. In
October 1989, Burkard told Wilson that the Houston office did not
have enough money to pay claims being made by policyholders and
asked Wilson to deposit money into these accounts. Wilson declined
this request and informed Burkard that all claims were to be
processed through the Nassau office.
The fact that Winston Hill’s Gulf Union Bank account had a
balance of only $11,187 just two days before the statement was
issued also supports the jury’s conclusion. The jury was entitled
to infer that Wilson, Winston Hill’s president, might misapprehend
within a few thousand dollars the amount of money his company had
in the bank; but that it was inconceivable that he would think his
company had millions of dollars in the bank when it had just
$11,187. Also, Wilson knew that Rolle, who provided the audited
statement of Winston Hill’s financial condition, was on Winston
Hill’s payroll and not an independent auditor. This evidence is
sufficient for the jury to infer that Wilson knew the financial
19
statement was false when it was made.
Wilson also argues that the Government offered insufficient
evidence to prove the second element of 18 U.S.C. § 1341 - that
Wilson caused a mailing for the purpose of executing the fraudulent
scheme. As discussed above, however, the Government offered
sufficient evidence for the jury to find that the financial
statements Wilson authorized for release were false and that this
induced brokers and policyholders to mail premium checks. Thus,
the evidence was sufficient for the jury to convict Wilson on
counts two through nine.
B.
In counts ten through twelve, Wilson was convicted of money
laundering in violation of 18 U.S.C. § 1956(a)(1)(A)(i), based on
three checks totaling $38,005 that Wilson mailed to Udell from
October of 1990 to March of 1991. To establish this offense, §
1956(a)(1)(A)(i) requires that the Government prove beyond a
reasonable doubt that: 1) the financial transaction involved the
proceeds of unlawful activity (mail fraud or wire fraud in this
case); 2) the defendant knew that the property involved in the
financial transaction represented proceeds of an unlawful activity;
and 3) the financial transaction was conducted with the intent to
promote the carrying on of specified unlawful activity.
As discussed above, the Government established that the
evidence was sufficient to support the mail fraud counts, and that
establishes the first element of this offense. Also, as discussed
above, the Government presented sufficient evidence to prove
20
element two - that Wilson knew that the money in the bank account
on which the check was drawn represented proceeds of mail or wire
fraud.
The third element of § 1956(a)(1)(A)(i) requires that the
Government prove that Wilson wrote the checks to Udell with the
intent to promote specified unlawful activity. Wilson argues that
the Government’s evidence is insufficient on this element because
it allegedly failed to show the purpose of the checks. Wilson
asserts that the Government has offered no evidence to show that
these payments to Udell were anything other than legitimate
business expenditures.
In support of this assertion, Wilson cites a case in which
this court reversed money laundering convictions based on a car
dealership’s expenditures on various items used to conduct its
legitimate business, such as office supplies, cars, and
advertising. United States v. Brown, 186 F.3d 661 (5th Cir. 1999).
Brown, however, is readily distinguishable.
In Brown, the payments were to legitimate businesses for
legitimate business expenditures. In our case, the Government
produced sufficient evidence for the jury to conclude that Udell,
the recipient of these payments, was an unindicted coconspirator.
The Government introduced testimony that Udell stalled claimants
and also channeled them to the Nassau office per Wilson’s
instructions. In fact, much of Wilson’s defense consists of
blaming Udell and Day for perpetrating the scheme, and asserting
that he was naive and ignorant of the scheme. Also, Wilson
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concedes that the payments at issue did not represent Udell’s
salary of $5000 a month. Thus, the Government introduced
sufficient evidence to allow the jury to infer that Wilson’s
payments to Udell were designed to compensate one of his
coconspirators so he would continue to assist in carrying out the
conspiracy of bilking policy holders and claimants.
The payments at issue in our case are more analogous to those
made in United States v. Coscarelli, 105 F.3d 984 (5th Cir. 1997),
vacated, 111 F.3d 376 (5th Cir. 1997), reinstated, 149 F.3d 342 (5th
Cir. 1998), and United States v. Leonard, 61 F.3d 1181 (5th Cir.
1995). Both of these cases involved a fraudulent telemarketing
scheme. In Coscarelli, we stated that:
Coscarelli then collected the proceeds of this fraudulent
scheme and paid the coconspirators, the telemarketers,
and general operating expenses of the scheme.... [Thus]
Coscarelli knowingly conducted financial transactions
using the proceeds of this unlawful telemarketing scheme
with intent to promote or carry on the unlawful activity
of the scheme in direct violation of 18 U.S.C. §
1956(a)(1)(A)(i).
105 F.3d at 990.
Similarly, in Leonard, we stated that:
Greene’s money laundering activity, regardless of its
limited extent, advanced the mail and wire fraud scheme
that victimized nearly 500 people.... By conducting
financial transactions–paying [coconspirator] callers,
purchasing leads, paying phone bills–with the victims’
money for the purpose of bilking more people out of
$395.50 each, the group of targeted victims became the
victim of the money laundering activity as well as the
fraud scheme.
61 F.3d at 1186.
The jury was entitled to conclude that Wilson made these
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payments to a coconspirator to continue the fraudulent scheme. The
jury’s conclusion that Wilson paid Udell with the intent to promote
the fraudulent scheme involving mail and wire fraud was
sufficiently supported by the evidence.
C.
In counts thirteen through eighteen, Wilson was convicted of
engaging in monetary transactions with criminally derived property
in violation of 18 U.S.C. § 1957(a). Counts thirteen through
eighteen were based on $875,000 that Wilson withdrew, using six
checks, from Winston Hill’s account at First City Bank of Houston.
Section 1957(a) requires the Government to prove that: 1) property
valued at more than $10,000 was derived from specified unlawful
activity (here, mail or wire fraud); 2) Wilson engaged in a
monetary transaction with this property; and 3) Wilson knew that
this property was derived from unlawful activity. Wilson argues
that the Government has offered insufficient evidence on the first
and third elements.
Specifically, Wilson argues that the Government has offered
insufficient evidence to show that there was a fraudulent scheme.
In the alternative, he argues that if there was sufficient evidence
to demonstrate the existence of a fraudulent scheme, he was not
aware of the scheme. We rejected these arguments in the discussion
above. Thus, there was sufficient evidence to support the jury’s
verdict on counts thirteen through eighteen.
D.
In count one, Wilson was convicted under 18 U.S.C. § 1956(h)
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of conspiring to launder money with Rolle and two others. The
Government is required to prove beyond a reasonable doubt that: 1)
there was an agreement between two or more persons to launder
money; 2) the defendant voluntarily agreed to join the conspiracy;
and 3) one of the persons committed an overt act in furtherance of
the conspiracy. United States v. Pettigrew, 77 F.3d 1500, 1519 (5th
Cir. 1996). Wilson challenges the sufficiency of the evidence on
the first and second elements. As discussed above, the evidence
supported the jury’s verdict that Wilson laundered money by sending
three checks to Udell, which Udell accepted. Thus, the jury was
entitled to infer that there was an agreement between Wilson and
Udell to launder money. Therefore, the evidence is sufficient to
support the jury’s verdict as to count one.
V.
Wilson next argues several points of error with regard to his
sentencing. First, Wilson argues that the district court
misapplied the sentencing guidelines in applying the more severe
money laundering guidelines rather than the fraud guidelines.
Wilson contends that the sentencing guidelines on money laundering
(United States Sentencing Guidelines § 2S1.1, et seq.) were
intended by the Sentencing Commission to be applied to individuals
involved in drug offenses and organized crime. Because Wilson was
not engaged in either of these activities, he argues that the
district court should have applied the fraud guidelines. This
contention is clearly without merit. This court has upheld the
application of the money laundering guidelines in cases not
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involving drugs or organized crime. See, e.g., United States v.
Powers, 168 F.3d 741, 753 (5th Cir. 1999).
Second, Wilson argues that the district court erred in
refusing to grant a downward departure on the basis that Wilson’s
offenses fell outside of the “heartland of the [money laundering]
guidelines” since they involved neither drug trafficking nor
organized crime. Similarly, Wilson argues that the district court
erred in refusing to grant a downward departure based on his status
as a deportable alien. In essence, Wilson argues that his status
as a deportable alien will lengthen his ultimate period of
confinement because he is ineligible for community based programs
administered by the Bureau of Prisons, he is ineligible for
assignment to a minimum security federal correctional camp, and he
is subject to an additional period of confinement after completing
his sentence while awaiting actual deportation.
The failure of the district court to grant such discretionary
departures, however, is not subject to appellate review. Powers,
168 F.3d at 753. Indeed, this court has explained that “a court’s
refusal to grant a downward departure from the Guidelines may only
be reviewed if the refusal was based on a violation of the law.”
Id. Such a violation occurs only when the district court’s
“refusal to depart downward is premised upon the court’s mistaken
conclusion that the Guidelines do not permit such a departure.”
Id. See also, United States v. Palmer, 122 F.3d 215, 222 (5th Cir.
1997). Because we have no basis to conclude that Judge Hittner
erroneously believed he lacked the authority under the Guidelines
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to downwardly depart in this case, his refusal to do so is not
reviewable on appeal.
Third, Wilson argues that his sentence is in violation of the
United States Supreme Court’s recent decision in Apprendi v. New
Jersey, 530 U.S. 466, 120 S. Ct. 2348, 2362-63 (2000) (holding that
“any fact that increases the penalty for a crime beyond the
statutory maximum must be submitted to a jury and proved beyond a
reasonable doubt”). Relying on the PSR, the district court applied
a ten-level enhancement to Wilson’s base level of twenty-three on
the money laundering charge. This enhancement was based on a
finding by the district court that Wilson’s money laundering scheme
involved $34,000,000. Wilson now argues that Apprendi requires
that the jury find that figure beyond a reasonable doubt. This
contention lacks merit. It is clear in this circuit that where an
enhancement does not increase the defendant’s sentence above the
statutory maximum, there is no Apprendi violation. See, e.g.,
United States v. Meshack, 225 F.3d 556, 576 (5th Cir. 2000); United
States v. Doggett, 230 F.3d 160, 166 (5th Cir. 2000). Wilson
received a sentence of 240 months, the statutory maximum.8 Because
the statutory maximum has not been exceeded, Apprendi is not
implicated.
VI.
For the reasons stated above, the judgment and sentence of the
district court is AFFIRMED in all respects, unless the district
8
Wilson concedes as much in his Brief for the Defendant-
Appellant at 61.
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court grants Wilson’s motion to dismiss following a hearing. In
that event, the district court should vacate the conviction on all
counts. If either party is aggrieved by the district court’s
ruling on the motion to dismiss and files a notice of appeal to
this court, this panel will consider any appeals from that ruling.
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