United States v. Malone, David E. ( 2007 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 06-2915
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
DAVID E. MALONE,
Defendant-Appellant.
____________
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 05 CR 107—Elaine E. Bucklo, Judge.
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ARGUED JANUARY 16, 2007—DECIDED APRIL 30, 2007
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Before EASTERBROOK, Chief Judge, and POSNER and
EVANS, Circuit Judges.
EVANS, Circuit Judge. David Malone hired Russell
Axtell and others to drive band equipment long distances
across the country in rented vans. Axtell knew there was
something fishy about the arrangement: he never dealt
with any bands or drove to any concert halls; he just
picked up vans in one place and drove them to another.
Given this unusual “job,” Axtell was probably not terribly
surprised when Kansas police stopped him in February
2005 during a delivery drive from Las Vegas to Malone’s
apartment near Chicago and found that the six large
speakers he was transporting contained 141.5 kilograms
of 89 percent pure cocaine.
2 No. 06-2915
Caught red-handed, Axtell not only explained to police
that he worked for Malone and provided them with
extensive details about his boss’s operation, he also
agreed to cooperate with agents from the Drug Enforce-
ment Agency to effectuate a controlled delivery of the
cocaine to Malone. The agents fitted Axtell with a hidden
recording device, and he led them to Malone’s apartment
building, where they waited as he parked the rental van
and proceeded inside. Using his key, Axtell entered the
apartment alone and found Malone asleep. He tried to
rouse him, left briefly, then returned to find Malone
still asleep. So Axtell left again, this time leaving the
door open for the agents to enter and arrest Malone. They
proceeded to do so.
Malone was read his Miranda rights, and he came clean
about his business: he admitted that he employed drivers
like Axtell to transport cocaine around the country for a
group of men based in Tijuana, Mexico. Malone’s drivers
would pick up large quantities of cocaine in California or
Nevada that had passed through Mexico and drive it to
Illinois or New Jersey hidden in large speakers. Buyers
in those markets would remove the drugs from the speak-
ers and load them with cash in payment, and the drivers
would then return across the country with the money,
which was ultimately given to the Mexican group. Malone
was paid for each leg of these deliveries.
He told the agents that Axtell was to be paid $25,000 for
his efforts and noted that another driver, Les Kirschen-
man, was in the process of delivering a large sum of money
from Illinois to Las Vegas. He then gave the agents writ-
ten consent to search the apartment and two nearby
garage units. Acting on this information, agents arrested
Kirschenman when he arrived in Las Vegas that night.
Inside the van he was driving, agents found 10 large music
speakers with almost $2.5 million in cash stashed inside.
A search of Malone’s Chicago premises turned up empty
No. 06-2915 3
speakers, a drill that could be used to open them, a money
counter, and certain notations relating to delivery trips.
Based on other information received from Axtell, agents
also arrested some of Malone’s affiliates in New Jersey
and seized another large shipment of cocaine.
A jury convicted Malone on a bevy of charges: conspiracy
to distribute and possess with the intent to distribute
more than 5 kilograms of cocaine, possessing and causing
the possession of cocaine with the intent to distribute,
traveling in interstate commerce to carry on a cocaine
distribution conspiracy, and conspiracy to commit money
laundering. He received a total sentence of 276 months.
His court-appointed trial attorney subsequently with-
drew from the case and new counsel was secured. Malone
then filed an amended motion for a new trial, arguing
that his previous attorney had provided him with ineffec-
tive assistance of counsel by failing to move for the sup-
pression of Malone’s statements and the evidence found
during the search of his apartment. He now challenges
the district court’s decision to deny that motion. He also
appeals his conviction on the money laundering count.
The elements of an ineffectiveness claim are laid out in
Strickland v. Washington, 466 U.S. 668 (1984): Malone
must demonstrate that counsel’s performance was
deficient—namely, “that counsel made errors so serious
that counsel was not functioning as the ‘counsel’ guaran-
teed the defendant by the Sixth Amendment,” Raygoza v.
Hulick, 474 F.3d 958, 962 (7th Cir. 2007)—and that
counsel’s deficient performance prejudiced the defense so
that there is a reasonable probability that the outcome
would have been different without the deficiency. “We
presume that counsel is effective, and a defendant bears
a heavy burden in making out a winning claim based on
ineffective assistance of counsel.” United States v. Farr,
297 F.3d 651, 658 (7th Cir. 2002).
4 No. 06-2915
Malone argues that his trial counsel’s performance was
deficient because he failed to move for suppression of the
search and statements. Malone insists that the agents
conducted an unauthorized warrantless arrest when they
entered his apartment after Axtell left the door open and
that a motion to suppress would have resulted in the
suppression of evidence and his statements which fol-
lowed. Without the evidence, he suggests, probably
correctly, that the government’s case would have been
kaput.
Typically, an ineffective assistance claim raised in a
motion for new trial is addressed by holding an evidentiary
hearing for the trial court to consider the evidence of the
trial counsel’s deficiency and its possible effect on the
outcome, and indeed this was the approach intended by
the district court, notwithstanding the government’s
position that a hearing was not needed because the
evidence was overwhelming enough to withstand any
possible finding of performance deficiency.
Malone’s new counsel, however, suggested that no
hearing was necessary. She insisted that the record was
already clear enough and that the absence of a warrant
for Malone’s arrest created a presumption of deficient
representation in light of the circumstances surrounding
the arrest. As a result, she said, the burden fell to the
government to justify the search.
Still, the district court judge insisted that a hearing
would be a good idea. But then Malone’s counsel ex-
plained her plans for a hearing, which consisted of nothing
more than asking the court to take judicial notice of the
absence of a warrant and asking Malone and the arresting
officer to confirm the date and time of his arrest. The
judge asked whether she would question trial counsel
about the decision not to move for suppression of the
evidence, and she repeated that the absence of a warrant
No. 06-2915 5
was sufficient to establish the deficiency and that it was
now for the government to justify the warrantless arrest.
Only then did the judge determine that a hearing was
unnecessary before denying the motion for new trial on
the theory that, even if there was a deficiency in trial
counsel’s representation, it did not prejudice the outcome.
Malone’s argument that deficient representation can
be presumed from trial counsel’s failure to file a suppres-
sion motion is without merit. A decision not to file a
suppression motion can be tactical, and there are plausible
reasons (a belief that such a motion has no chance for
success is one) why counsel acted as he did. And those
reasons cannot be deemed inappropriate on the basis of
this record. Trial tactics are a matter of professional
judgment, and as we first observed in Harris v. Reed, 894
F.2d 871, 877 (7th Cir. 1990), and continued to acknowl-
edge in several cases since, we will not play “Monday
morning quarterback”1 when reviewing claims that an
attorney rendered constitutionally deficient representa-
tion in making decisions on how best to handle a case.
When this was made clear to Malone’s new counsel at
oral argument, she asked for a remand to the trial court to
have the evidentiary hearing. The request, without ask-
ing that the claim be dismissed, came too late. Malone had
the opportunity for a hearing in the district court—the
1
Of course, “Monday morning quarterback” is now passé since
the advent of “Tuesday Morning Quarterback,” the terrific
column regularly posted by Gregg Easterbrook on ESPN.com. See
NLRB v. Cook County, 283 F.3d 888, 895 n.5 (7th Cir. 2002). In
light of the column and the marquee “Monday Night Football”
NFL games from September through December each year, we
think the term “Monday morning quarterback,” from now on,
should go the way of the drop-kick, the “T” formation, the
Statue of Liberty play, and offensive tackles who weigh less
than 300 pounds. From now on, a second-guesser should be
called a “Tuesday Morning Quarterback.”
6 No. 06-2915
judge (the Honorable Elaine E. Bucklo) in fact was ready
to hear testimony and receive evidence before she was
effectively talked out of it by Malone’s argument that no
suppression motion by itself established a claim of inef-
fective assistance of counsel. There is no second bite at
the apple. We must rely on the record as it stands, and in
doing so we can only conclude that Malone comes up far
short of proving that counsel’s decision not to file a
suppression motion was ineffective. (Besides, there is
absolutely nothing we can see here that would have
compelled the court to grant a motion to suppress even if
one had been filed.)
Malone next attacks the sufficiency of the evidence
supporting his money laundering conviction, something
we review under a highly deferential standard to deter-
mine whether “any rational trier of fact could have
found the essential elements of the crime beyond a rea-
sonable doubt . . . [and] reverse only when the record
contains no evidence . . . from which a jury could find guilt
beyond a reasonable doubt.” United States v. Turner, 400
F.3d 491, 496 (7th Cir. 2005).
The government charged Malone under 18 U.S.C.
§ 1956(h) with conspiracy to launder money, which re-
quires establishing that he was knowingly involved with
two or more people for the purpose of money laundering,
United States v. Gracia, 272 F.3d 866, 873 (7th Cir. 2001),
and that he “1) conducted a financial transaction with the
proceeds of an illegal activity; 2) knew that the property
represented illegal proceeds; and 3) conducted the trans-
action with the intent to promote the carrying on of the
unlawful activity.” United States v. Febus, 218 F.3d 784,
789 (7th Cir. 2000); see also 18 U.S.C. § 1956(a)(1)(A)(i). As
defined in the statute:
[T]he term “transaction” includes a purchase, sale,
loan, pledge, gift, transfer, delivery, or other disposi-
tion . . . ;
No. 06-2915 7
[T]he term “financial transaction” means (A) a transac-
tion which in any way or degree affects interstate or
foreign commerce (i) involving the movement of funds
by wire or other means or (ii) involving one or more
monetary instruments . . . [.]
18 U.S.C. § 1956(c)(3) & (4).
The cross-country transport of cash to pay for cocaine
purchases (like the effort uncovered by the search of
Kirschenman’s van) certainly constitutes, as a “delivery”
“affect[ing] interstate commerce,” the kind of financial
transaction covered by § 1956. But this does not resolve
whether these transactions (1) involved unlawful “pro-
ceeds” and (2) were conducted with the intent to promote
the carrying on of the unlawful activity.
Malone points out that the cash deliveries merely
completed the sale of drugs and were not part of actions
separate from the substantive criminal drug offenses
for which he is already convicted. In other words, al-
though Malone was technically engaged in a financial
transaction because his drivers were transporting cash,
the deliveries were made only because they served as the
final step in Malone’s services for the Mexico-based drug
operation. He served as the conduit for the Mexican drug
organization’s sales in the Midwest and on the east coast,
and the money being transported was never his. Rather,
he was separately paid for each individual delivery.
We have previously held that the promotion element
can be met by “transactions that promote the continued
prosperity of the underlying offense,” i.e., that at least
some activities that are part and parcel of the underly-
ing offense can be considered to promote the carrying on
of the unlawful activity. Febus, 218 F.3d at 790. But
whether these activities can be considered transactions
in the proceeds of the unlawful activity is a separate
question. In United States v. Scialabba, 282 F.3d 475, 476-
8 No. 06-2915
78 (7th Cir. 2002), we recognized the absence of any clear
definition of “proceeds” in the money laundering statute
in holding that defendants who operated illegal video
poker machines in taverns and other establishments
were not guilty of money laundering for making winner
payouts and compensatory payments to the tavern owners
who helped facilitate the operation. We explained that,
unlike the act of reinvesting a criminal operation’s net
income to promote the carrying on of the operation, the act
of paying a criminal operation’s expenses out of gross
income is not punishable as a transaction in proceeds
under § 1956(a)(1)(A)(i). Id. at 476; see also Santos v.
United States, 461 F.3d 886, 893 (7th Cir. 2006) (declining
to overrule Scialabba in the face of conflicting holdings
in other circuits). In doing so, we relied on the rule of
lenity (which instructs that statutory ambiguities
should be resolved in favor of the defendant) and a desire
to avoid convicting a defendant of multiple crimes “when
the transactions that violate one statute necessarily
violate another.” 282 F.3d at 477.
We believe that the Scialabba rule applies to Malone’s
case. Even though his role in the larger drug conspiracy
was as a middle man, Malone was in a sense paying the
expenses of his own cocaine delivery operation by ex-
changing funds for the product he was required to ship
in order to get paid for his efforts. From Malone’s stand-
point, the transported cash constituted gross income for
the operation that served only to pay for the product at the
core of his delivery business—his only net income was
the delivery fees he was paid for each drive. Malone’s
money laundering conviction can therefore only stand
under the Scialabba definition of proceeds if he were
charged on the basis of evidence that he conducted or
attempted to conduct a financial transaction in these
delivery fees. But there is no such evidence.
No. 06-2915 9
Accordingly, the judgment entered on Malone’s con-
viction for conspiracy to commit money laundering is
VACATED and the case is REMANDED for resentencing. The
district court, however, can skip resentencing if it deter-
mines that the overall sentence imposed would be the
same without the money laundering conviction. In all
other respects, the judgment of the district court is
AFFIRMED.
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—4-30-07