United States v. Rodriguez ( 2002 )

Revised January 22, 2002
UNITED STATES COURT OF APPEALS
For the Fifth Circuit
No. 00-41041
No. 00-41042
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
VERSUS
JUAN GARCIA RODRIGUEZ,
Defendant-Appellant.
Appeals from the United States District Court
for the Southern District of Texas
January 4, 2002
Before GARWOOD, DeMOSS, and DENNIS, Circuit Judges.
DeMOSS, Circuit Judge:
Appellant Juan Garcia Rodriguez was charged in two separate
indictments for his role in the illegal transporting of aliens.
The indictments included charges of conspiracy, transportation of
aliens and money laundering. Rodriguez was ultimately sentenced to
eighteen months for an alien-transporting charge in the first
indictment. After a jury trial for the second indictment,
Rodriguez was found guilty on three counts involving money
laundering and was sentenced to 80 months’ imprisonment to run
concurrent to his 18-month sentence. Rodriguez now appeals,
asserting that the evidence was insufficient to convict him of the
money-laundering charges, that the district court failed to conduct
a proper inquiry into his waiver of conflict-free counsel and that
the total offense level in the pre-sentencing report (“PSR”) was
erroneously based on his income rather than on the actual amount of
money laundered.
BACKGROUND
Beginning in 1996, Juan Garcia Rodriguez (“Rodriguez”) was
engaged in an operation smuggling undocumented aliens from Mexico
to North Texas, primarily to Dallas or Garland, Texas. He would
charge the aliens between $1,000 and $1,200 each per trip.
Rodriguez also recruited his brother, Juan Antonio Garcia
(“Garcia”), to participate in his smuggling operation.
In September 1999, Garcia and Rodriguez’s stepson, Juan Garcia
Rodriguez (“Juan”), were apprehended at the Sarita, Texas,
checkpoint while transporting nine illegal aliens in the back of a
1999 Ford conversion van. Garcia cooperated with the government
and identified Rodriguez as the leader of the smuggling operation.
As a result of Garcia’s cooperation, the government initiated an
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investigation of Rodriguez and established surveillance at his
residence.
On January 21, 2000, Rodriguez was stopped at the United
States Border Checkpoint facility south of Falfurrias, Texas, and
was arrested. He was accompanied by his 16-year-old daughter and
Garcia. Rodriguez was driving a 1997 Chevrolet G-van conversion,
the vehicle subject to the charges contained in counts one, seven
and nine on appeal before this Court. In the rear of the vehicle,
concealed beneath and behind clothing and other materials, were
seven undocumented aliens.
Based upon the information supplied by Garcia and other
corroborating information, the government obtained a search warrant
for Rodriguez’s house and executed it on January 21, 2000. The
search revealed a number of financial documents and records that
formed the basis of the subsequent money laundering charges. The
search also revealed cash, multiple vehicles and many personal
luxury items. The records obtained were used to establish
Rodriguez’s yearly expenditures from 1996-2000. These were
compared to Rodriguez’s recorded annual income. The records
revealed that Rodriguez earned a total of $93,103.22 between 1996
and 2000, but spent $368,787.07 for a documented differential of
$275,683.85.
The 1997 Chevrolet G-van conversion that Rodriguez was
arrested in, and which is the subject of the money laundering
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counts on appeal, was originally purchased in Garcia’s name by
Rodriguez. Rodriguez told the salesperson that he had just
recently gotten married and that is why the vehicle had to be in
Garcia’s name. However, it appears that the vehicle was chosen by
Rodriguez and that it was Rodriguez who negotiated the price.
Furthermore, it was Rodriguez who picked up the car’s license
plates on October 16, 1997. Rodriguez gave Garcia $18,000 to pay
for the van on October 16, 1997. Garcia then paid the remaining
balance of the vehicle on November 10, 1997, which amounted to
$10,209.42; Garcia testified that he received this amount from
Rodriguez. This all occurred during a period in which Rodriguez
was depositing and withdrawing large sums of money into and out of
his bank account, including an insurance settlement check for
$10,884.25. About six months after November 10, 1997, Rodriguez
purchased the vehicle back from Garcia for approximately $5,000 to
$6,000. The vehicle was in Rodriguez’s name as of his arrest on
January 21, 2000.
Rodriguez was charged in an 11-count indictment (No. 00-41041
on appeal or “No. ‘41") involving conspiracy, the transportation of
aliens and money laundering in violation of 8 U.S.C.
§ 1324(a)(1)(A)(i)-(iii), (v)(I)-(II) and 18 U.S.C. § 1956(a)(1)
(A)(i). Pursuant to a plea agreement, Rodriguez entered a plea of
guilty to one count of transporting aliens and the government
agreed to dismiss the conspiracy count but retained the money
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laundering counts. The government later moved to also dismiss the
money laundering counts, but did so only to include the counts in
a subsequent nine-count indictment (No. 00-41042 on appeal or “No.
‘42") involving money laundering in violation of 18 U.S.C. §§ 2,
1956(a)(1)(A)(i), 1957(a). Counts one through four of this
subsequent indictment were the same as counts eight through eleven
in the previous indictment (No. 41).
Rodriguez was ultimately sentenced in district court before
the Honorable Filemon B. Vela to 18 months for the alien
transporting charge in the first indictment (No. ‘41). After a
jury trial for the second indictment (No. ‘42), Rodriguez was found
guilty of counts one, seven and nine and sentenced by the Honorable
Hilda G. Tagle to 80 months’ imprisonment to run concurrent to his
18 month sentence. Count one charged Rodriguez with aiding and
abetting the commission of money laundering by purchasing a 1997
Chevrolet G-van with proceeds from the specified unlawful activity
of transporting and harboring illegal aliens in violation of 18
U.S.C. §§ 2, 1956(a)(1)(A)(i). Count seven charged Rodriguez with
engaging in financial transactions with proceeds from unlawful
activity under 8 U.S.C. § 1324 involving $10,209.42 for the
purchase of the 1997 Chevy G-van in violation of 18 U.S.C. §§ 2,
1957(a). Count nine charged him with money laundering by engaging
in a financial transaction from proceeds from specified unlawful
activity under 8 U.S.C. § 1324 with the intent to conceal the
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source of the $28,209.42 in proceeds involving the 1997 Chevy G-van
in violation of 18 U.S.C. §§ 2, 1956(a)(1)(B)(i). Rodriguez now
appeals his sentence in No.‘42, asserting that the evidence was
insufficient to convict him of the money laundering charges, that
the district court failed to conduct a proper inquiry into his
waiver of conflict-free counsel and that the total offense level in
the PSR was erroneously based on his income rather than on the
actual amount of money laundered.
DISCUSSION
Rodriguez’s appeal as to the first indictment (No. 00-41041)
The government asserts that the notice of appeal filed by
Rodriguez in No. ‘41 is untimely but concedes that his notice of
appeal as to No. ‘42 is timely. Rodriguez’s judgment in No. ‘41
was pronounced on May 11, 2000 and formally entered on May 19,
2000. Rodriguez’s notice of appeal to No. ‘41 was filed on August
31, 2000. Under FED. R. APP. P. 4(b)(1):
In a criminal case, a defendant’s notice of appeal
must be filed in the district court within 10 days
after the later of:
(i) the entry of either the judgment of the order
being appealed; or
(ii) the filing of the government’s notice of
appeal.
The filing of a notice of appeal within the 10-day period
prescribed by this rule is mandatory and jurisdictional. United
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States v. Robinson, 361 U.S. 220, 224 (1960)(addressing Rule 4(b)’s
predecessor rule). “A timely notice of appeal is necessary to the
exercise of appellate jurisdiction.” United States v. Cooper, 135
F.3d 960, 961 (5th Cir.1998) (citing Robinson, 361 U.S. at 224).
“Simply put, if a notice of appeal is untimely, we cannot entertain
the merits of a case.” United States v. Truesdale, 211 F.3d 898,
902 (5th Cir. 2000).
Rodriguez does not address the issue of the timeliness of the
notice of appeal in No. ‘41 in his brief and has filed no reply
brief as to this issue. Rodriguez also does not raise a single
issue from No. ‘41 on appeal. All of his claims concern errors in
his money laundering case, No. ‘42. As we are left without any
explanation as to why we should rule otherwise, Rodriguez’s appeal
as to No. ‘41 is dismissed for lack of jurisdiction due to the
untimeliness of the notice of appeal under FED. R. APP. P.
4(b)(1)(i).
The sufficiency of the evidence
When reviewing the sufficiency of the evidence in a criminal
case, this Court views the evidence, both circumstantial and
direct, in the light most favorable to the government with all
reasonable inferences to be made in support of the jury’s verdict.
United States v. Moser, 123 F.3d 813, 819 (5th Cir. 1997). In
reviewing the jury’s decision, this Court recognizes that the jury
is free to choose among all reasonable constructions of the
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evidence and this Court will accept all credibility choices that
tend to support the jury’s verdict. United States v. Dean, 59 F.3d
1479, 1484 (5th Cir. 1995). “Moreover, we determine only whether
the jury made a rational decision, not whether its verdict was
correct on the issue of innocence or guilt.” Id. (citing United
States v. Jaramillo, 42 F.3d 920, 923 (5th Cir. 1995)). “However,
we must reverse a conviction if the evidence construed in favor of
the verdict ‘gives equal or nearly equal circumstantial support to
a theory of guilt and a theory of innocence of the crime charged.’”
Jaramillo, 42 F.3d at 923 (quoting United States v. Menesses, 962
F.2d 420, 426 (5th Cir. 1992)).
Rodriguez claims that the jury had insufficient evidence to
come to a guilty verdict on counts seven and nine. Count seven
charged Rodriguez with engaging in a financial transaction with
proceeds from an unlawful activity under 8 U.S.C. § 1324 in
violation of 18 U.S.C. §§ 2, 1957(a). To prove an offense under 18
U.S.C. § 1957(a), the government must prove that (1) property
valued at more than $10,000 was derived from a specified unlawful
activity (here transporting and harboring undocumented aliens); (2)
Rodriguez engaged in a financial transaction with the property (the
purchase of the van); and (3) Rodriguez knew that the property was
derived from unlawful activity. United States v. Wilson, 249 F.3d
366, 379 (5th Cir. 2001). Count nine charges Rodriguez with money
laundering by engaging in a financial transaction from proceeds
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from a specified unlawful activity under 8 U.S.C. § 1324 with the
intent to conceal the source of the $28,209.42 in proceeds
involving the 1997 Chevy G-van in violation of 18 U.S.C. §§ 2,
1956(a)(1)(B)(i). To prove a violation of § 1956(a)(1)(B)(i), the
government must show that the defendant conducted a financial
transaction that he knew involved the proceeds of an unlawful
activity and that he did so knowing that the transaction was
intended to conceal or disguise the nature of the proceeds. United
States v. Powers, 168 F.3d 741, 747-48 (5th Cir. 1999) (stating
that the government “must show that the defendant desired to create
the appearance of legitimate wealth or otherwise to conceal the
nature of funds so that the money could enter the economy as
legitimate funds”).
Rodriguez claims that the evidence was insufficient because it
did not prove beyond a reasonable doubt that the $10,209.42 that
was used to pay the remaining balance on the van on November 10,
1997, involved the proceeds of the specified unlawful activity of
transporting and harboring aliens. Rodriguez specifically cites
the fact that he deposited a check for $10,884.25 into his bank
account on September 15, 1997. He then withdrew $10,700 on
September 18, 1997 and he argues he could have used the money he
withdrew to purchase a cashier’s check for $10,209.42 in November
1997, which was then used to pay the remaining balance on the van.
Rodriguez therefore claims that there is no proof that the
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cashier’s check was purchased with the proceeds from an unlawful
activity and that he cannot be found guilty under counts seven and
nine.
Though Rodriguez offered an alternate legitimate source for
the funds used to purchase the van, Rodriguez ignores the fact that
the jury was free to discredit Rodriguez’s theory that the funds
used to acquire the Chevy van were from a legitimate source.
United States v. Restrepo, 994 F.2d 173, 182 (5th Cir. 1993) (“The
jury is the final arbiter of the weight of the evidence, and of the
credibility of witnesses”). The jury heard evidence from both
sides as to where the money could have come from, including
evidence that Rodriguez commingled his funds. Evidence that the
defendant commingled illegal proceeds with legitimate business
funds is sufficient to support a conviction under § 1956. United
States v. Willey, 57 F.3d 1374, 1386 (5th Cir. 1995); United States
v. Jackson, 935 F.2d 832, 840 (7th Cir. 1991). “[I]t is not
necessary to prove with regard to any single transaction that the
defendant removed all trace of his involvement with the money or
that the particular transaction charged is itself highly unusual.”
Willey, 57 F.3d at 1386. The government is under no duty to trace
the individual funds and “it is not necessary that a transaction be
examined wholly in isolation if the evidence tends to show that it
is part of a larger scheme that is designed to conceal illegal
proceeds.” Id.; Jackson, 935 F.2d at 840 (“We do not read
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Congress’s use of the word ‘involve’ as imposing the requirement
that the government trace the origin of all funds deposited into a
bank account to determine exactly which funds were used for what
transaction.”). In short, the jury was free to discredit
Rodriguez’s explanation of the source of the funds and did so.
There was no error on the part of the jury and the evidence was
sufficient to support this finding.
Defense counsel’s potential conflict of interest
Rodriguez also argues that the district court inadequately
inquired into a potential conflict of interest by Rodriguez’s trial
attorney Paul Hajjar. Hajjar represented Juan Garcia Rodriguez
(Rodriguez’s stepson) in his alien transporting case. Prior to
trial, Hajjar filed a “notice of potential conflict” with the
court, because apparently Garcia (not Juan Rodriguez) was listed as
a potential witness. Hajjar did not allege, however, that he had
an actual conflict of interest. At a hearing held on May 19, 2000,
the district court inquired whether either party had any intention
of calling Juan Rodriguez as a witness. Both Hajjar and the
government indicated that they did not intend to call Juan and
they both agreed that no actual conflict existed at that time.
However, the government still sought a “waiver” from Rodriguez
concerning any “potential conflict.” Hajjar then discussed the
issue with Rodriguez over a brief recess and when he returned,
Rodriguez swore under oath that he was aware of Hajjar’s prior
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representation of Juan Rodriguez, aware of the “potential conflict
of interest,” had discussed the matter with Hajjar and advised that
he did not want Hajjar to withdraw from the case. The court agreed
that there was no conflict of interest in the case because Juan
Rodriguez was not even a potential witness.
“We review the district court’s acceptance of defendant’s
waiver of conflict-free counsel for simple error.” United States
v. Moore, 37 F.3d 169, 174 (5th Cir. 1994). The Sixth Amendment
right to counsel includes the right to conflict-free counsel and a
conflict exists when the defense counsel places himself in a
position conducive to divided loyalties. Id. In a situation where
the defendant objects to his representation on the basis of a
conflict and the trial judge fails to inquire into the merits of
the objection, the defendant is entitled to automatic reversal and
a new trial. Holloway v. Arkansas, 435 U.S. 475, 488-90 (1978).
When there is no objection from the defendant but the judge knew or
reasonably should have known about an apparent conflict but fails
to make an inquiry, then the defendant is only required to show
that there was an actual conflict. Wood v. Garcia, 450 U.S. 261,
272-74, n.21 (1981). If there is no objection and the conflict is
not apparent to the judge, then the defendant must show that an
actual conflict existed and that this conflict adversely affected
his lawyer’s performance. Cuyler v. Sullivan, 446 U.S. 335, 347-48
(1980). In most cases, it is the defense attorney in a criminal
12
matter who is in the best position, professionally and ethically,
to determine when a conflict exists or will probably develop in the
course of the trial. Holloway, 435 U.S. at 485.
Though this Circuit has never held that a “notice of potential
conflict” is the functional equivalent of an objection, there is
some support for the argument that filing such a notice requires
the district court to conduct an inquiry into the matter. Cf.
United States v. Wayman, 510 F.2d 1020, 1025-26 (5th Cir. 1975)
(holding that, in the event of a conflict of interest between co-
defendants, where there was neither objection, claim, nor notice to
the court of any alleged conflict, there is no need for the trial
court to advise the defendant of the right to separate counsel);
see also Cambell v. Rice, 265 F.3d 878, 885 (9th Cir. 2001) (citing
Wood, 450 U.S. at 272, as supporting that “[a] court must make an
inquiry whenever it knows or reasonably should know that a
potential conflict of interest exists”); United States v. Pergler,
233 F.3d 1005, 1010 (7th Cir. 2000) (“If an attorney brought the
potential conflict of interest to the attention of the court, or
the court knew or reasonably should have known about the conflict,
we will assume prejudice when the judge fails to address the
conflict adequately.”). In the present case, after the filing of
the “notice of potential conflict,” the district court made an
inquiry into the matter and even had Rodriguez himself take the
stand to testify before he waived his potential conflict claim.
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The district court, therefore, fulfilled any obligation it may have
had arising from the filing of the “notice of potential conflict,”
and resolved the matter concluding that there was no actual
conflict. Rodriguez never objected again after the court
determined that no conflict existed. There is no evidence of any
actual conflict. We hold that, under a “simple error” standard of
review, the district court’s acceptance of Rodriguez’s waiver of
potential conflict was not in error.
The district court’s reliance on the PSR’s recommendation
attributing $275,683.85 to relevant money-laundering conduct
In his final argument on appeal, Rodriguez asserts that his
money-laundering sentence must be vacated because the total offense
level was erroneously based upon the amount of income he
purportedly had earned rather than on the amount of money
laundered. A district court’s valuation of funds under U.S.S.G.
§ 2S1.1(b) is a determination of fact and is therefore reviewed for
clear error. United States v. Hull, 160 F.3d 265, 268 (5th Cir.
1998). Under U.S.S.G. § 2S1.1(b)(2)(C) (2000), a defendant’s base
level may be increased by 2 levels if the value of the funds
laundered exceeds $200,000. Rodriguez asserts that it was error
for the PSR to take into account the amount of money he spent in
excess of his reported income, approximately $275,000, instead of
just the amount of money laundered by him. Rodriguez believes that
the court should be limited to considering the amount that he
laundered in the counts he was found guilty of committing.
14
Though it is true that § 2S1.1(b) takes into account the
amount laundered, the additional money might also be considered
under U.S.S.G. §1B1.3 as relevant conduct.1 See United States v.
Johnson, 971 F.2d 562, 576 n. 10 (10th Cir. 1992) (noting that
funds associated with uncharged instances of money laundering can
be added in to determine the offense level if they are within the
scope of relevant conduct under §1B1.3). However, the application
notes to §1B1.3 state:
A particular guideline (in the base offense level
or in a specific offense characteristic) may
expressly direct that a particular factor be
applied only if the defendant was convicted of a
particular statute. For example, in §2S1.1
(Laundering of Monetary Instruments), subsection
(a)(1) applies if the defendant “is convicted under
18 U.S.C. § 1956(a)(1)(A), (a)(2)(A), (a)(3)(A).”
Unless such an express direction is included,
conviction under the statute is not required.
U.S.S.G. § 1B1.3, application note 6 (1998) (emphasis added). We
read this to mean that unless a defendant is convicted under the
money laundering statute, money laundering cannot be used against
him as relevant conduct to enhance his sentence. However, monies
relating to a conviction under the money laundering statute may be
considered, and a greater amount of money than is charged in the
indictment or proven beyond a reasonable doubt could be considered
if it relates to the conviction. In order for the greater amount
1
Though application of U.S.S.G. § 1B1.3 seems more suited
in the present case to instances involving an accomplice or a
conspiracy.
15
of money to be considered, the government must prove by a
preponderance of the evidence that the money was laundered. Hull,
160 F.3d at 269. In the present case, all the government has done
is show a discrepancy between the income Rodriguez earned and the
value of his total assets. The government has failed to prove that
$275,683.85 was laundered or how it was laundered. The government
has therefore fallen short of its burden of proof and it was
clearly erroneous for the district court to consider the entire
$275,683.85 without further proof that it was laundered.2
CONCLUSION
Therefore, having carefully reviewed the record of this case
and the parties’ respective briefing and for the reasons set forth
above, we hold that the jury had sufficient evidence on which to
convict Rodriguez, that the district court did not err in the
manner in which it inquired into the potential conflict of interest
between Hajjar and Rodriguez, but that the district court did err
in considering the additional $275,683.85 included in the PSR when
determining Rodriguez’s sentence. Therefore, the district court is
2
As an aside, it may be of interest to note (i) that the
2001 version of the Guidelines makes no distinction between amounts
involved in the offense and (ii) that under the current version,
Rodriguez would have received the two level increase anyway, even
if the lower amount of money was used.
16
AFFIRMED in part, but the sentence of the district court is
VACATED, and the case is REMANDED for re-sentencing.
AFFIRMED in part, and VACATED and REMANDED.
17