595 F. App'x 152
3rd Cir.2014Background
- Janice D. Rey owned Paramount Group and ran a storefront, Rey Financial, soliciting investor funds with promises of guaranteed returns and that principal would be safe.
- Rey transferred investor funds from company accounts to other accounts for personal use, including a $1 million transfer to Hong Kong accounts in September 2009; funds were not invested and were later spent or redirected in the U.S.
- Investors complained and the IRS investigated; Rey was indicted on multiple counts including wire fraud, several money‑laundering counts (including international laundering), and tax evasion.
- Rey moved to suppress evidence seized from the Rey Financial office, arguing the state search warrant lacked particularity and probable cause; the government failed initially to enter the warrant into evidence at the suppression hearing.
- The district court allowed the government to reopen the suppression hearing, admitted the warrant, denied suppression as to the office search, and a jury convicted Rey on all counts; district court sentenced her to 125 months for federal counts and ordered restitution.
- On appeal Rey challenged (1) the district court’s decision to reopen the suppression hearing and admit the warrant, and (2) the sufficiency of evidence for international money laundering; the Third Circuit affirmed but remanded for resentencing on counts 27–52 because the sentence exceeded the statutory maximum for those counts.
Issues
| Issue | Plaintiff's Argument (Rey) | Defendant's Argument (Government) | Held |
|---|---|---|---|
| Whether district court abused discretion in reopening suppression hearing to admit state search warrant | Reopening was improper and prejudicial because warrant was not admitted originally and affidavit lacked particularity/probable cause | Reopening was an inadvertent oversight; warrant had been used in testimony and could be admitted without prejudice | No abuse of discretion; reopening allowed because minimal prejudice and government offered reasonable explanation |
| Whether warrant and affidavit lacked particularity/probable cause such that suppression was required | Warrant/affidavit were insufficiently particular and not supported by probable cause | Warrant supported by agent testimony and affidavit; properly particularized | Warrant was sufficiently particular and supported probable cause; suppression denied |
| Sufficiency of evidence for international money laundering under 18 U.S.C. § 1956(a)(2)(B)(i) | Government failed to prove purpose (not just effect) to conceal/disguise listed attributes of funds (relying on Cuellar) | Transfers to Hong Kong corporate accounts with no ties to Paramount, and subsequent rerouting/spending, permitted inference of intent to conceal | Evidence sufficient; reasonable jury could infer intent to conceal and thus conviction affirmed |
| Whether sentence exceeded statutory maximum for counts 27–52 (money laundering to avoid reporting) | (Not raised on appeal) | Government conceded 125‑month sentence exceeded 10‑year statutory maximum and did not oppose remand | Court invoked extraordinary‑circumstances doctrine, vacated sentence as to counts 27–52 and remanded for resentencing |
Key Cases Cited
- United States v. Coward, 296 F.3d 176 (3d Cir. 2002) (discretionary standard for reopening suppression hearing)
- Kithcart v. 218 F.3d 213 (3d Cir. 2000) (party seeking reopening should explain failure to present evidence initially)
- United States v. Smith, 751 F.3d 107 (3d Cir. 2014) (prejudice to opposing party is primary factor in reopening)
- United States v. Blankenship, 775 F.2d 735 (6th Cir. 1985) (timing of reopening is critical to prejudice analysis)
- Cuellar v. United States, 553 U.S. 550 (2008) (§ 1956(a)(2)(B)(i) requires proof the purpose, not merely effect, of transportation was to conceal a listed attribute)
- McDaniel v. Brown, 558 U.S. 120 (2010) (appellate deference to jury resolution of conflicting inferences)
- United States v. Andrews, 681 F.3d 509 (3d Cir. 2012) (extraordinary‑circumstances exception to waiver for sentencing errors)