United States v. Christy
916 F.3d 814
| 10th Cir. | 2019Background
- Denise Christy, a CNB Burlington teller, was discovered to have embezzled $764,000 after a May 21, 2014 surprise audit; she fabricated FRB (Federal Reserve Bank) transfer documents to conceal the shortage.
- Bank records (cash-out tickets with unalterable proof strips, Vertex electronic logs, Garda pickup receipts) and surveillance showed discrepancies and evidence some receipts were copied/fabricated.
- FBI/IRS investigation found >$400,000 in unexplained cash deposits to Christy’s accounts spanning 2008–2014 and underreported income on tax returns.
- Indictment: 1 count bank embezzlement (18 U.S.C. § 656), 6 counts false bank entries (18 U.S.C. § 1005), 6 counts filing false tax returns (26 U.S.C. § 7206(1)), and 10 counts money laundering (18 U.S.C. § 1956(a)(1)(A)(ii)).
- Jury convicted on all counts except four money-laundering counts; district court imposed concurrent sentences and restitution.
- On appeal the Tenth Circuit affirmed embezzlement, false-entry, and tax convictions; reversed six money-laundering convictions for insufficient evidence of the required specific intent, vacated sentence, and remanded for resentencing.
Issues
| Issue | Plaintiff's Argument (Christy) | Government's Argument | Held |
|---|---|---|---|
| Prosecutorial misconduct (cumulative) | Prosecutor made multiple improper comments (criticizing exercise of rights, vouching, implying witness collusion) that denied fair trial | Remarks were mostly permissible, some borderline or improper but harmless given the record and jury instructions | Affirmed: no cumulative constitutional unfairness; comments did not affect substantial rights |
| Sufficiency of evidence for tax-based money laundering (§1956(a)(1)(A)(ii)) | Government failed to prove the required specific intent — that loan payments were made with the purpose to facilitate filing false tax returns | Loan payments and pattern of unreported income show intent to avoid tax reporting; payments disguised proceeds | Reversed: insufficient evidence of the specific intent required for §1956(a)(1)(A)(ii); payments were "money spending," not laundering |
| Jury instruction on false bank entries (§1005) — materiality omission | Omitted a materiality instruction required for conviction | Even if materiality is an element, evidence shows the false entries were plainly material to bank decisions | Affirmed: any omission harmless beyond a reasonable doubt because entries were objectively material |
| Sentencing allocution (procedural issue) | (Raised but not decided) District court failed to personally address Christy before sentencing (Rule 32) | Remand for resentencing after reversing money-laundering counts makes allocution issue unnecessary to decide now | Majority did not decide; remanded for resentencing; concurrence/dissent disagreed on necessity of remand |
Key Cases Cited
- Koon v. United States, 518 U.S. 81 (1996) (appellate role in sentencing and deference to district court’s discretionary sentencing decisions)
- Griffin v. California, 380 U.S. 609 (1965) (prohibition on prosecutorial comment on defendant's failure to testify)
- Berger v. United States, 295 U.S. 78 (1935) (prosecutorial misconduct may require reversal when evidence is weak and misconduct is pronounced)
- Darden v. Wainwright, 477 U.S. 168 (1986) (improper argument must be assessed in context of entire trial; focus on whether jury could fairly judge evidence)
- Neder v. United States, 527 U.S. 1 (1999) (omitted jury instruction element is harmless if the omitted element is uncontested and supported by overwhelming evidence)
- Bailey v. United States, 444 U.S. 394 (1980) (distinguishing specific intent crimes from general-intent, and construing mens rea requirements)
- United States v. Sanders, 929 F.2d 1466 (10th Cir. 1991) (§1956 is not a "money-spending" statute; routine transactions with illicit proceeds are insufficient for laundering absent intent to conceal)
- United States v. Caldwell, 560 F.3d 1214 (10th Cir. 2009) (reversal for insufficient evidence where ordinary transactions did not show intent to conceal proceeds)
- United States v. Zanghi, 189 F.3d 71 (1st Cir. 1999) (affirming §1956(a)(1)(A)(ii) convictions where transfers were used to mischaracterize illegal proceeds as loans to facilitate tax deception)