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United States v. Avila

filed: April 16, 1992.

UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE,
v.
MARIA AVILA, A/K/A PATTY REYES, ADRIAN NIEVES MALDONADO, ANA ROSA REYES, AND JOSE REYES, DEFENDANTS-APPELLANTS.



Appeal from the United States District Court for the District of Idaho. D.C. No. CR-89-40020-EJL. Edward J. Lodge, District Judge, Presiding.

Before: Wright and Alarcon, Circuit Judges, and Fong, District Judge*fn**

MEMORANDUM

Maria Avila, Adrian Maldonado, Ana Reyes (A. Reyes), and Jose Reyes (J. Reyes) appeal from the judgment of conviction. A. Reyes and Maldonado seek reversal of their sentences. We discuss each contention and the facts pertinent thereto under separate headings. We affirm the judgment of conviction as to each appellant and the sentences imposed against A. Reyes and Maldonado.

Discussion

I. Sufficiency of the Evidence

The appellants contend that the Government failed to present sufficient evidence to support their convictions for specific acts of money laundering (18 U.S.C. § 1956(a)(1)(A) & (B)), conspiracy to launder money (18 U.S.C. § 1956(a)(1)(A) & (B); 18 U.S.C. § 371), and conspiracy to distribute cocaine (21 U.S.C. § 846).

In considering a challenge to the sufficiency of the evidence, where the issue has been preserved for appeal, we must determine whether "'after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.'" United States v. Floyd, 945 F.2d 1096, 1098 (9th Cir. 1991) (quoting Jackson v. Virginia, 443 U.S. 307, 319 (1979) (emphasis in original)).

In the instant matter, only Avila and A. Reyes objected to the sufficiency of the evidence at the close of trial. A failure to object to the sufficiency of the evidence at the close of trial waives the issue on appeal. Id. at 1098; United States v. Mora, 876 F.2d 76, 77 (9th Cir. 1989). Where such a waiver has occurred, we nonetheless review the sufficiency of the evidence under the less stringent plain error standard. Floyd, at 1098; Mora, at 77. Thus, we review the sufficiency of the evidence to support the judgment of conviction of Maldonado and J. Reyes for plain error. Under the plain error rule, an appellant must demonstrate that his conviction involved a "manifest miscarriage of Justice." United States v. Patton, 771 F.2d 1240, 1243 (9th Cir. 1985).

A. Specific Acts of Money Laundering

In order to support a conviction for money laundering under 18 U.S.C. § 1956(a)(1), the Government has the burden of proving beyond a reasonable doubt that the defendant (1) conducted a financial transaction that involved the proceeds of unlawful activity, (2) that he knew the property involved was the proceeds of some form of unlawful activity, and that he did so either (3) with the intent to promote the unlawful activity (18 U.S.C. § 1956(a)(1)(A)(i)) or (4) with the knowledge that the transaction was designed in whole or in part to conceal or disguise the nature, location, source, ownership, or control of those proceeds (18 U.S.C. § 1956(a)(1)(B)(i)). United States v. Montoya, 945 F.2d 1068, 1076 (9th Cir. 1991). All four appellants were convicted of conspiracy to launder money and specific acts of money laundering under 18 U.S.C. § 1956 (a)(1)(A) & (B) and 18 U.S.C. § 371 for their respective involvement in various wire transfers and purchases of automobiles and residences. They contend that their convictions were not supported by the evidence because the Government failed to satisfy the requisite elements of section 1956(a)(1). We reject appellants' contention.

1. "Financial Transaction"

J. Reyes and Maldonado contend that the purchase of an automobile or residence with cash is not a "financial transaction" within the meaning of section 1956(a)(1). This argument ignores the definitional portion of the statute. Under section 1956(c)(3), "the term 'transaction' includes a purchase [or] sale . . . ." Furthermore, section 1956(c)(4)(A) defines the term "financial transaction" as a transaction "involving the movement of funds by wire or other means. . . ." Because the act of buying a house or automobile with cash is a purchase involving the movement of funds, we hold that the Government has satisfied the financial transaction requirement of section 1956(a)(1). See also United States v. Blackman, 904 F.2d 1250, 1257 (8th Cir. 1990) (holding that the sale of a truck between the defendant and a third party was a financial transaction within the meaning of section 1956 because "the term includes the purchase, sale or Disposition of any kind of property as long as the Disposition involves a monetary instrument.")

2. Proceeds of "Specified Unlawful Activity"

Appellants contend that the Government did not present sufficient evidence to prove that the funds used in their suspect financial transactions were proceeds of drug distribution. They argue that the Government's proof was inadequate because it consisted solely of evidence that appellants wired large sums of money and purchased residences and motor vehicles during a period in which they had no legitimate source of income. Avila argues separately that the Government's evidence against her was inadequate because testimony at trial demonstrated that some, if not all of the money used in her transactions was legitimate income derived from her ownership of a clothing store known as "L.A. Fashions."

The appellants correctly cite Blackman for the proposition that the Government's case "cannot rely exclusively on proof that a defendant charged with using proceeds from an unlawful activity has no legitimate source of income. 904 F.2d at 1257. Blackman also states, however, that "the government's burden on a particular element of [money laundering] may be satisfied by circumstantial evidence as long as it is sufficient to prove that element beyond a reasonable doubt." Id.

Reviewing the record in the light most favorable to the Government, we conclude that the Government presented sufficient circumstantial evidence from which a rational jury could infer that appellants' wire transfers and purchases involved proceeds of drug distribution. Contrary to the appellants' assertion, the Government's evidence did not consist solely of proof that they had purchased expensive items and transferred large sums of money without a legitimate source of income. Instead, the jurors were also presented with substantial evidence from which they could infer that the money used to purchase items and wired to Los Angeles was derived from the illegal sale of cocaine.

We also reject Avila's claim that her ownership of L.A. Fashions defeated the Government's evidence by establishing that she had a legitimate source of income to support the suspect financial transactions. Contrary to Avila's contention, the Government was not required to disprove that any of the money used in Avila's transactions was derived from a legitimate source. Instead, the Government was required to present the jurors with evidence from which they could infer beyond a reasonable doubt that the funds were the proceeds of drug distribution. The Government has met this burden. In addition to evidence that appellants derived substantial income from cocaine sales, the Government also demonstrated that L.A. Fashions was not operated as a normal commercial store. Katie David, the manager of the mall where L.A. Fashions was located, testified that the store had only a limited inventory, did no advertising, and was open on irregular hours. She also noted that the revenues from the store amounted to approximately $1000 per month, a figure well below the $3000 generally required to keep a store of that kind in operation.

3. Knowledge of Unlawful Source of Proceeds

Avila argues that the Government failed to prove that she knew any of the money came from the distribution of drugs because a government informant, Juan Villareal, testified at trial that Hispanic men often deny their women knowledge of what they are doing. A. Reyes claims that her involvement in the purchase of the car and house was in keeping with the Idaho custom of having husbands and wives co-sign agreements for major expenditures. We disagree.

The evidence produced by the Government demonstrates that A. Reyes was present at the scene of at least one major drug transaction in which a diaper bag belonging to her was used to transport 20 ounces of cocaine. The record also shows that narcotics were stored in Avila's place of residence, and that Avila's Cadillac Cimarron was used to transport cocaine. Thus, the evidence was sufficient to persuade a rational jury that A. Reyes and Avila had knowledge that the money came from the distribution of narcotics.

4. Intent to Promote Unlawful Activity

The appellants contend that the Government failed to prove that their wire transfers and purchases were conducted with an intent to promote the distribution of drugs. This contention is without merit.

A representative from the Western Union wire service testified that drug traffickers commonly use wire services to launder drug money. The expert also testified that certain factors are indicative of drug-related transfers, including (1) the use of business fronts, or legitimate businesses that may or may not generate profits, to account for funds derived from illegal activities, (2) the use of code words in wire communications, (3) the frequency of the transfers, (4) whether the transfer is for an amount greater than $500, and (5) whether the transfer is destined for a city which serves as a base for drug trafficking organizations.

Jose Valladares testified that members of J. Reyes' drug operation used wire transfers to move money to Los Angeles to purchase drugs. Valladares also testified that these transfers involved the use of code words. We are persuaded that the Government presented sufficient evidence to convince a rational jury that the appellants intended to promote drug activity through the use of wire transfers.

The Government presented evidence that motor vehicles were purchased by members of the conspiracy. A rational jury could infer that these motor vehicles were used to further the appellants' drug trafficking operation. Evidence was presented that members of the drug operation smuggled cocaine from Los Angeles to Idaho in spare tires and in wheel rims. The record also shows that Avila's Cadillac, as well as a Chevrolet pickup and minivan owned by Maldonado and A. Reyes were used to transport cocaine. Videotapes were introduced into evidence that depicted Avila's Cadillac and Maldonado's Corvette at the scene of drug transactions. The odometers on some of appellants' vehicles, such as Maldonado's and A. Reyes' 1989 Chevrolet pickup, showed that they had a high mileage reading. This evidence could support an inference that these vehicles were used to make trips to and from Los Angeles.

The Government also presented evidence that demonstrates that the Verdugo, Foothill, and Fredregill residences were used to facilitate the distribution of cocaine, or to house members of the drug organization travelling to Idaho.

5. Intent to Conceal Proceeds of Unlawful Activity

Appellants contend that the Government failed to prove that their purchases of motor vehicles and residences were conducted in order to conceal or disguise drug proceeds, because these transactions were made openly. We conclude that the Government was not required to prove that the appellants intended to conceal those proceeds.

Having already proved that the motor vehicles and residences were used to promote the drug operation under section 1956(a)(1)(A)(i), the Government was not under any obligation to prove that the purchases were also intended to conceal or disguise drug proceeds under 1956(a)(1)(B)(i). As we noted in Montoya, "subsections (A)(i) and (B)(i) are set forth in the disjunctive." 945 F.2d at 1076. Thus, the Government's evidence needs to satisfy only one of these two intent requirements. Id. Because the evidence was sufficient to persuade a rational jury that each of the other elements of money laundering were satisfied, we need not consider whether sustaining the judgment on this charge would result in a manifest miscarriage of Justice.

B. Conspiracy Charges

Avila, A. Reyes, and Maldonado contend that the Government failed to present sufficient evidence to convict them of conspiracy to launder money. All four appellants also contend that there was insufficient evidence to convict them of conspiracy to distribute cocaine.

The elements of conspiracy are: (1) an agreement to accomplish an illegal objective, (2) coupled with one or more acts in furtherance of the illegal purpose, and (3) the requisite intent necessary to commit the underlying offense. United States v. Penagos, 823 F.2d 346, 348 (9th Cir. 1987). The existence of a conspiracy may be proven by circumstantial evidence that the defendants acted together for a common illegal purpose. Penagos, 823 F.2d at 348. Once a conspiracy exists, evidence establishing beyond a reasonable doubt a defendant's connection with the conspiracy, even though slight, is sufficient to convict a defendant of knowing participation in the conspiracy. United States v. Skillman, 922 F.2d 1370, 1373 (9th Cir. 1990), cert. dismissed, 112 S. Ct. 353 (1991); Penagos, 823 F.2d at 348.

1. Conspiracy to Launder Money

As discussed above, the evidence was sufficient to persuade a rational jury beyond a reasonable doubt that the appellants engaged in money laundering transactions in violation of 18 U.S.C. § 1956(a)(1). The evidence also supports the inference that the appellants agreed to commit specific acts of money laundering. All of the transactions for which the appellants were convicted involved at least two persons who had some connection to the appellants' drug distribution activities. Furthermore, the evidence of the nature of these transactions demonstrated that there was an agreement between the members of the conspiracy to launder money.

2. Conspiracy to Distribute Cocaine

The appellants contend that the Government failed to prove a single overall conspiracy as charged in the indictment, but instead proved that two separate conspiracies to distribute cocaine existed -- one in Los Angeles and one in Idaho. Appellants argue that the proof of two conspiracies resulted in a fatal variance between the indictment and the proof offered at trial. "The question of whether a single conspiracy has been proved, rather than multiple conspiracies, is a recurring one, which is essentially a question of the sufficiency of the evidence." United States v. Bibbero, 749 F.2d 581, 586 (9th Cir. 1984), cert. denied, 471 U.S. 1103 (1985).

In United States v. Arbelaez, 719 F.2d 1453, 1457-58 (9th Cir. 1983), cert. denied, 467 U.S. 1255 (1984), we stated:

To establish the existence of a single conspiracy, as compared to multiple conspiracies, the basic "test is whether there was 'one overall agreement' to perform various functions to achieve the objectives of the conspiracy" . . . .

To determine whether the evidence supports the existence of one overall criminal venture, relevant areas of inquiry include "the nature of the scheme; the identity of the participants; the quality, frequency, and duration of each ...


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