United States v. Francisco Colorado Cessa
785 F.3d 165
| 5th Cir. | 2015Background
- Los Zetas, a Mexican drug cartel, used U.S. quarter-horse purchases, racing, and related businesses to launder narcotics proceeds and to generate apparently legitimate cash through repeated buy-sell transactions, stud fees, and racing proceeds.
- Four defendants (Jose Trevino Morales, Francisco Colorado Cessa, Fernando Garcia‑Solis, and Eusevio Huitron) were convicted after a jury trial of conspiracy to commit money laundering under 18 U.S.C. § 1956(h).
- Evidence included bulk cash payments, structured deposits, auction purchases (including one coerced purchase by a kidnapping victim), communications showing cartel control, and testimony linking various intermediaries to cartel leaders.
- Roles: Jose Trevino operated ranches and entities that registered horses; Colorado was an alleged intermediary/businessman who bought horses for cartel members; Garcia‑Solis acted as translator/auction agent and accompanied purchases; Huitron was a horse trainer who received large cash payments.
- The district court instructed the jury that commingling illegal and legitimate funds "is evidence of intent to conceal or disguise" without clarifying the inference was permissive. Defendants challenged sufficiency of evidence, trial procedure for Spanish testimony, the commingling instruction, and sentencing calculations.
- Appellate outcome: conviction of Huitron reversed and acquitted for insufficient evidence of guilty knowledge; Colorado’s conviction vacated and remanded because the commingling jury instruction error was not harmless as to him; convictions and sentences for Jose Trevino and Garcia‑Solis affirmed; sentencing findings otherwise affirmed.
Issues
| Issue | Plaintiff's Argument (Government) | Defendant's Argument | Held |
|---|---|---|---|
| Sufficiency of evidence as to Eusevio Huitron (knowledge of concealment purpose) | Huitron accepted large structured cash payments from known cartel members and trained horses that converted drug cash into legitimate-appearing assets, so a jury could infer he knowingly joined concealment scheme | Huitron was a legitimate trainer who was paid for services and was not aware transactions were designed to conceal illegal proceeds | Reversed: evidence insufficient to prove Huitron joined conspiracy with knowledge the transactions were designed to conceal source/nature of illegal funds; acquittal rendered |
| Sufficiency of evidence as to Jose Trevino and Fernando Garcia‑Solis | Circumstantial evidence (sudden wealth, involvement in registrations/LLCs, repeated transactions, presence at auctions, escorting coerced buyers) shows knowledge of cartel activity and intent to conceal proceeds | Defendants claimed mere association or legitimate business role; lacked proof of intent to conceal | Affirmed: substantial circumstantial evidence supports convictions for both |
| Jury instruction on commingling (mandatory vs. permissive inference) | Commingling is established evidence from which intent to conceal may be inferred; instruction was a correct statement of law | Defendants argued instruction was mandatory (no permissive caveat) and unsupported by evidence for some defendants (especially Colorado) | Abuse of discretion to give instruction in mandatory terms; error harmless as to Jose Trevino and Garcia‑Solis but not harmless as to Colorado—Colorado's conviction vacated and remanded |
| Sentencing valuation of laundered funds and enhancements | District court properly used commingled-funds valuation (U.S.S.G. approach) and factual findings (PSR, forfeiture sales, agent testimony) to calculate offense level and leadership/sophistication enhancements | Defendants argued amounts were overstated and enhancements unsupported or clearly erroneous | Affirmed: sentencing findings and guideline calculations upheld as plausible; Garcia‑Solis and Jose Trevino sentences affirmed (Colorado remanded due to conviction vacatur) |
Key Cases Cited
- United States v. Cuellar, 553 U.S. 550 (2008) (mere concealment or manner of moving funds does not prove transaction was "designed to conceal" criminally)
- United States v. Brown, 553 F.3d 768 (5th Cir.) (2008) (application of Cuellar to financial-transaction laundering; mere spending or structuring not enough absent additional evidence of intent to conceal)
- United States v. Trejo, 610 F.3d 308 (5th Cir.) (2010) (need for evidence beyond bare transaction—awareness of inner workings or extensive involvement supports specific intent)
- United States v. Valdez, 726 F.3d 684 (5th Cir.) (2013) (converting illicit proceeds into ordinary assets without hallmark concealment techniques insufficient)
- United States v. Fuchs, 467 F.3d 889 (5th Cir.) (2006) (conspiracy elements and inference from concerted action)
- United States v. Rosbottom, 763 F.3d 408 (5th Cir. 2014) (affirming conspiracy where defendant was intimately involved in coconspirator’s finances and shell entities)
- United States v. Rodriguez, 278 F.3d 486 (5th Cir.) (commingling evidence can support § 1956 conviction when tied to furthering illegality)
- Neder v. United States, 527 U.S. 1 (1999) (harmless-error review for erroneous jury instructions)
- Skilling v. United States, 638 F.3d 480 (5th Cir.) (applying harmless-error standard in complex instruction contexts)
- United States v. Washington, 819 F.2d 221 (9th Cir.) (permissive inference language contrasted with mandatory presumption language)