United States v. Keith Kennedy, 2013 U.S. App. LEXIS 2798

Calhoun, a licensed mortgage originator and preacher, orchestrated a scheme with Keith and Larry Kennedy to fraudulently obtain mortgage loans.
The Kennedys ran Loan Closing and Title Service (LCTS), disbursing funds and channeling illicit proceeds back to Calhoun by paying liens on fraudulent properties.
Calhoun misrepresented borrowers' creditworthiness, forged signatures, misused downpayments, and sometimes used borrowers’ information for additional investments without consent.
Lenders wired loan proceeds to LCTS, from which the Kennedys authorized disbursements and used shell companies to siphon funds and conceal the fraud.
Calhoun used fraud proceeds to fund further fraudulent mortgages, to make downpayments, and to reward borrowers to induce repeat borrowing, from 2004 to 2006.
The defendants were convicted of conspiracy to commit mail and wire fraud, substantive wire fraud, conspiracy to commit money laundering, and promotional money laundering; Calhoun received 200 months, the Kennedys shorter terms, with substantial forfeitures.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Do money laundering convictions merge with wire fraud?	Proceeds from wire fraud were used to launder funds; merger should occur if same conduct or profits.	Money laundering is based on the same transaction as wire fraud; constitutes a single crime.	No merger; wire fraud completed before laundering; profits funded new fraud.
Was there sufficient evidence and was deliberate-ignorance instruction proper?	Evidence supported deliberate ignorance given repeated suspicious acts.	Instruction should not have been given; evidence insufficient.	Deliberate-ignorance instruction proper and supported by the record.
Did the district court correctly handle the Batson challenge on venire strikes?	Prosecution struck non-whites to skew jury composition.	Racial bias existed in voir dire panel selection.	No clear error; race-neutral explanations supported the peremptory challenges.
Were severance and mistrial rulings proper?	Joint trial prejudiced the Kennedys due to Calhoun's prominence.	Severance was necessary to prevent prejudice.	No abuse of discretion; limiting instructions preserved fairness.
Were sentencing enhancements for misrepresentation of religious association and abuse of trust proper?	Enhancements justified by scheme involving a religious organization and trust abuse.	Enhancements overstated or misapplied.	Enhancements supported; findings not clearly erroneous.

United States v. Santos, 553 U.S. 507 (1998) (proceeds/merger interpretation in money laundering context)
Garland v. Roy, 615 F.3d 391 (5th Cir. 2010) (merger analysis for money laundering with underlying offenses)
United States v. Brown, 553 F.3d 768 (5th Cir. 2008) (money laundering not necessarily merger; profits vs proceeds)
United States v. Lineberry, 702 F.3d 210 (5th Cir. 2012) (merger framework for money laundering cases)
United States v. Harris, 666 F.3d 905 (5th Cir. 2012) (completion of wire fraud before money laundering; proceeds analysis)
Nguyen, 493 F.3d 613 (5th Cir. 2007) (deliberate ignorance standard supports certain inferences)