United States v. Cuellar , 441 F.3d 329 ( 2006 )

JERRY E. SMITH, Circuit Judge:

Humberto Cuellar was arrested while traveling toward Mexico with a large sum of cash hidden in his car. He was convicted of international money laundering in violation of 18 U.S.C. § 1956(a)(2)(B)®. Cuellar argues that the district court improperly admitted the government’s expert testimony. He also contends that the court should have granted his post-trial motion for acquittal because the government failed to present evidence sufficient to prove the required elements of the crime beyond a reasonable doubt. Because we agree that the government’s evidence was insufficient to support a finding of guilt under the specific statute of conviction, we reverse and render a judgment of acquittal.

I.

The following facts were established by the government at trial: On July 14, 2003, Cuellar was traveling south toward Mexico on State Highway 77. He was pulled over by Deputy Kevin Herbert from the Schleicher County Sheriffs office. Because Cuellar spoke no English, Herbert called State Trooper Danny Nunez to assist him.

Nunez became suspicious of Cuellar because he was avoiding eye contact and seemed very nervous. Cuellar claimed he was on a three-day business trip despite the fact that he had no luggage or extra clothing. Nunez noticed a bulge in Cuel-lar’s pocket, and when asked about it, Cu-ellar pulled out a wad of cash that smelled like marihuana to the officers. Nunez then asked and received permission to search the car and requested that a drug search dog come to the scene.

The dog alerted on the money in Cuel-lar’s pocket and on the back floorboard area of the car. The officers found a hidden compartment underneath the floorboard containing $83,000 wrapped in duct tape inside blue sacks and marked with a Sharpie as to the amounts in each bundle.

The foregoing facts were established through the testimony of Herbert, Nunez, and Deputy Jason Chatham, who handled the drug dog. The government also offered testimony from Special Agent Richard Nuckles of U.S. Immigration and Customs, an expert on drug trafficking organizations, who testified that drug operations typically involve the flow of drugs from Mexico into the United States and the flow of cash proceeds of drug sales from the United States back into Mexico. He described the usual methods employed by drug traffickers in transporting drugs and money across the border. He also indicated that couriers of drug proceeds would almost certainly know they were involved in illegal activity and were carrying money.

Nuckles’ description of the typical drug courier was consistent with the facts concerning Cuellar. Nuckles did not testify regarding what customarily happens to the drug money in Mexico other than to say that it is returned to those in charge of the drug trafficking operation.

The government’s case consisted solely of the testimony of the officers and Nuck-les. Cuellar took the stand and testified that he knew nothing about the money and was returning the car to Acuna, Mexico, at the behest of a shadowy character he identified only as Mr. Morcia. After all the evidence was presented, Cuellar moved for a judgment of acquittal, which was denied. The jury found him guilty. After trial, he filed a motion for judgment of acquittal, alleging that the government had failed to prove the required elements of the offense. The district court denied the motion and sentenced Cuellar.

II.

The denial of a motion for judgment of acquittal is reviewed de novo. United States v. Delgado, 256 F.3d 264, 273 (5th Cir.2001). The verdict will be affirmed if a reasonable trier of fact could conclude from the evidence that the elements of the offense were established beyond a reasonable doubt. Id. In assessing the sufficiency of the evidence, this court does not evaluate the weight of the evidence or the credibility of the witnesses but views the evidence in the light most favorable to the verdict, drawing all reasonable inferences to support the verdict. Id. at 273-74.

Cuellar argues that Nuckles’s expert testimony should not have been allowed because the government failed to provide the defense with a summary of his expected testimony after the court ordered it to do so. Cuellar also contends that parts of Nuckles’s testimony constituted impermissible drug courier profiling and should have been excluded on that basis. See United States v. Williams, 957 F.2d 1238, 1241 (5th Cir.1992). Because the government failed to present sufficient evidence to support a guilty verdict, we do not reach these evidentiary issues.

Cuellar argues that we should exclude from our sufficiency of the evidence analysis any evidence that was improperly admitted. This argument is unavailing. In reviewing a verdict for sufficiency of the evidence, we ask whether a reasonable jury could have returned a guilty verdict based on the evidence presented to it.¹ We do not ask at this stage whether that evidence was properly admitted, so we review the sufficiency of the government’s case in light of all the evidence, including the disputed expert testimony.

III.

The plain language of the statute of conviction, 18 U.S.C. § 1956(a)(2)(B)(i), which outlaws international money laundering,² requires the government to prove five distinct elements. First, it must show that the transportation or attempted transportation of funds was across U.S. borders. Second, the funds in question had to be the proceeds of specified unlawful activity. Third, Cuellar must have known that the funds represented such proceeds. Fourth, his transportation of the funds must have been designed (in whole or in part) to conceal or disguise the nature, location, source, or control of the proceeds. Fifth, Cuellar had to know that such concealment was the design of his enterprise.

On the first element (the international element), the government offered sufficient evidence that Cuellar was attempting to transport money into Mexico. He admitted as much when he told the officers he was headed for Acuna. Although he claimed he did not know the money was in the car, the jury was free to disbelieve this testimony, especially given the inconsistencies in his story.

On the second and third elements, there was sufficient evidence to allow a reasonable jury to infer that the money was proceeds of drug trafficking and that Cuel-lar knew that. The circumstances surrounding the arrest were suspicious to say the least, and Cuellar’s proffered explanation for his activities was unimpressive. The money smelled of marihuana and was bundled in a way that is typical of drug trafficking. The jury was able to infer from the expert testimony regarding drug trafficking operations that Cuellar’s conduct was consistent with that of a typical drug money courier who knows what he is carrying. Based on this evidence, a reasonable trier of fact could have concluded that the money hidden in the car was proceeds of drug trafficking and that Cuel-lar knew that.

On the fourth and fifth elements, we ask whether Cuellar’s transportation of the money was designed in whole or in part to conceal or disguise its nature, location, source, ownership or control and whether Cuellar knew that.³ Based on its statements at trial and in its appellate brief, the government apparently thought it had proven this element merely by showing that the money was hidden in Cuellar’s car. Throughout the trial, the government focused its attention on establishing that the money was most likely drug proceeds, essentially overlooking the equally important concealment prong.

In United States v. Olaniyi-Oke, 199 F.3d 767, 771 (5th Cir.1999), this court discussed the concealment prong of the money laundering statute in reversing the conviction of a defendant who used fraudulently-acquired credit cards to purchase computers.⁴ We focused on the underlying purpose or “design” of the alleged laundering transaction and considered the design of the transaction to be the acquisition of computers. The concealment of the true source of the money was just part of the means the defendant employed to achieve this design.

We held that if the defendant’s purchases were “engaged in for present personal benefit, and not to create the appearance of legitimate wealth, they do not violate the concealment prong of the money laundering statute.” Id. (citing United States v. Garcia-Emanuel, 14 F.3d 1469, 1474 (10th Cir.1994) (emphasis added)). Concealment of the money facilitated the transaction but was not itself the design of defendant’s activity, so no money laundering occurred, and the statute was not violated. “[T]he requirement that the transaction be designed to conceal implies that more than this trivial motivation to conceal must be proved.” Id.

The alleged laundering activity is Cuel-lar’s transportation of the cash across the border to an unknown recipient. The underlying purpose of the enterprise, as the government presented it to the jury, was to get the money to Mexico. Concealing the money in the hidden compartment was the means employed to achieve this, but the concealment itself was not the “design” of Cuellar’s activity, as the statute requires; the concealment was merely ancillary to Cuellar’s design.

Taking hidden cash to Mexico is not money laundering unless some further design to conceal can be proved. The statute would prohibit taking drug money to Mexico for the purpose of concealing the fact that it is drug money. The statute does not outlaw concealing drug money from the police for the purpose of taking it to Mexico.

Thus, the government failed to prove the necessary design to conceal. Cuellar was not trying to “create the appearance of legitimate wealth” by smuggling drug money across the border. The financial channels through which the money might have flowed subsequent to Cuellar’s venture are unknown. It is possible, even likely, that the money was destined for some kind of laundering once in Mexico, but the government provided no evidence to indicate such was the case.

Even if such evidence had been presented, the government would also have had to show that Cuellar knew his actions were designed to help launder the money. There is no evidence, nor was it alleged, that Cuellar would have had anything to do with any subsequent laundering.

In summary, under the government’s theory, hiding drug money in one’s car with the intent to take it across the Mexican border is international money laundering. At trial, the government successfully proved the case it set out to establish. This court’s precedent indicates, however, that much more than that is required to uphold a conviction under the particular statute that the government (for whatever reason) elected to use, § 1956(a)(2)(B)(i).

The government failed to provide sufficient evidence to show that Cuellar’s activity was designed “to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity.” Armed with a proper understanding of the statute, no rational trier of fact could have found Cuellar guilty based on the evidence presented at trial.⁵

The conviction is REVERSED and a judgment of acquittal is RENDERED.

1 . See United States v. Marshall, 762 F.2d 419, 423 (5th Cir.1985) (holding defendant not entitled to have court of appeals disregard inadmissible evidence in conducting sufficiency of evidence review).

2 . That section provides:

(a)(2) Whoever transports, transmits, or transfers, or attempts to transport, transmit, or transfer a monetary instrument or funds from a place in the United States to or through a place outside the United States or to a place in the United States from or through a place outside the United States— (B) knowing that the monetary instrument or funds involved in the transportation, transmission, or transfer represent the proceeds of some form of unlawful activity and knowing that such transportation, transmission, or transfer 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 ... shall be sentenced ....

3 .In other words, "the government must prove that the defendant intended to conceal the nature, location, source, ownership, or control of the proceeds of the unlawful activity.” United States v. Cihak, 137 F.3d 252, 261 (5th Cir.1998) (emphasis added) (citing United. States v. Dobbs, 63 F.3d 391, 397-98 (5th Cir.1995)).

4 . The government argues that Olaniyi-Oke is inapplicable because the court was interpreting § 1956(a)(1) rather than § 1956(a)(2)(B)(i). The government attempts to distinguish the two sections on the ground that § 1956(a)(1) requires a “financial transaction” but § 1956(a)(2)(B)(i) proscribes certain transports, transmissions, and transfers of funds and nowhere mentions “financial transactions.” The government's proffered distinction is irrelevant.

The statutory language focused on by the Olaniyi-Oke court is found in the concealment prong of § 1956(a)(1). Section 1956(a)(1) and (2)(B)(i) use identical language to require that the defendant's activity be “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.” Differing language elsewhere in the two sections has no bearing on the meaning of their identical concealment prongs. Precedent directly interpreting the concealment prong of § 1956(a)(1) is therefore binding on our interpretation of the same language in § 1956(a)(2)(B)(i). See United States v. Bieganowski, 313 F.3d 264, 279 (5th Cir. 2002) (holding that an offense under § 1956(a)(2)(B)(i) is almost identical to an offense under § 1956(a)(1), with the lone exception of the international element of § 1956(a)(2)(B)(i)). The government’s concern with whether Cuellar was engaged in a financial transaction is therefore misplaced.

5 . This does not necessarily mean that Cuellar will be free of prosecution. Under United States v. Dixon, 509 U.S. 688, 696, 113 S.Ct. 2849, 125 L.Ed.2d 556 (1993), he may be tried for separate offenses arising from the same criminal transaction so long as "each offense contains an element not contained in the other." Thus the government may try Cuellar again, provided that (1) the new charge contains an element not found in § 1956(a)(2)(B)(i) and (2) § 1956(a)(2)(B)(i) contains an element not found in the second offense. Without passing judgment on the double jeopardy implications of any future prosecution, we note that the government may be able to make a case against Cuellar for bulk cash smuggling under 31 U.S.C. § 5332(a).