*2 MOTZ, Before NIEMEYER and Circuit GOODWIN, United States Judges, Judge for the District District Southern designation. Virginia, sitting by West part, part, vacated in Affirmed Judge by published opinion. remanded opinion, wrote the NIEMEYER DIANA joined. Judge Judge GOODWIN separate wrote a GRIBBON MOTZ in the concurring in Part III and opinion judgment.
OPINION NIEMEYER, Judge: Circuit Abdillah Abdi Isse and Abdirahman to structure conspiracy pleaded guilty reporting financial transactions to evade ers about the sources of the cash that the requirements, violation of 31 U.S.C. defendants received transmission through 5324. The total amount of struc- Al-Barakat nor the uses for which *3 course during conspiracy money transmitted, tured of the was to be although million, all was over of which was some customers told the $4.2 defendants that to approximately attributable Isse and sending money were $3.3 to relativеs. Abdi, million of which was attributable to When the defendants received funds joined who later. The district court sen- customers, from deposited them in tenced Isse to 18 months’ imprisonment multiple at accounts various branches of and Abdi to 5 months’ imprisonment and 5 banks in Virginia. Northern To avoid the months’ home confinement. $10,000 threshold for reporting transac- appeal, challenge On defendants tiоns, they always deposited the amounts sentences, contending their the dis- $10,- with the in banks sums of less than properly apply trict court did not $9,000 usually $9,990— between 000— so as to reduce their sentenc- days, and on some they made several such ing levels to reflect had no deposits. deposits Because the in were knowledge of whether the funds that $10,000, cash amounts less than they did structured were the of unlawful not prompt currency banks to file activities or were to be used for unlawful transaction reports required under 31 purposes. government cross-appeal- U.S.C. 5313 C.F.R. ed, contending that the district court erred 103.22(b)(1) for amounts more than in failing to take into account all of the $10,000. The defendants then transmitted structured, only funds rather than of 3% the funds from the bank accounts to the that аmount. Al-Barakat headquarters in the United follow, For the reasons that we affirm Arab Emirates for further transfer on the appeals defendants’ and we reverse Somalia, agents in Ethiopia, Kenya, and on the government’s cross-appeals, re- compensation Sudan. As for each trans- manding these cases for resentencing. customer, mission of funds the defen- generally dants deposit retained 1% of the
I Al-Barakat, and remitted another 3% to (2% 7, 2001, kept Between 1997 and which Al-Barakat November two-thirds operated deposit) Isse the total and remitted the money-transmitting ser- remain- (1% vice, Abdi, nephew, joined ing deposit) Isse’s in one-third of the total agent initially operated receiving country. 2000. Isse the service Alexandria, from Virginia, his home business, In conducting their the defen- later, Associates, doing Rage business as dants failed to money-transmittal obtain a conducted the service as an agent of the license required by Virginia as and federal network, Al-Barakat an international mon- law. ey-transmitting exchange headquartered Emirates, 7, 2001, the United Arab Al- using On November Department premises Barakat’s Alexandria. During Treasury of the froze the Al- assets сonspiracy, network, the defendants’ business Barakat including certain bank $4,244,499 Associates, received a total of in cash from Rage accounts of on the wishing ground individuals to transmit the owner of the network Somalia, Ethiopia, Kenya, and profits Al-Qae- Sudan. directed business da, The defendants did not ask their organization. custom- a terrorist theOn same and that the dis- illegal purposes usеd for agents executed enforcement day, law applying gen- erred in not of various trict court on the offices warrants search network, of U.S.S.G. erally applicable provisions includ- Al-Barakat agents of the lB1.3(a), extends —de- which limits or business Alexandria. ing the defendants’ con- pending the defendants’ busi- on one’s circumstances —a premises theOn $29,422 sentencing liability in cash. The to “reason- ness, spirator’s found officers numerous omissions of ably indicted for foreseeable acts and offenses, they pleaded jointly under- others in furtherance of the structuring activity.” Arguing count. conspiracy one taken criminal guilty to the any illegal activities of knowledge *4 testified sentencing, At foreseeable, they state customers was not their customers many of they thаt knew ap- “were unknown to the that such facts they the transactions records of kept and of the scope and fall outside the pellants from where made, not know did They are relevant conduct. appellants’ money and the customers derived under the not be held accountable for it to was to be know for what did not of relevant conduct.” guideline principles transmitted overseas. once it was used reports presented media government The find contentions to be without We these fraud and the col- documenting food-stamp fails to argument merit. The defendants’ refugees to funds Somali lection of meaning of plain account for the U.S.S.G. money to Soma- large transmit amounts 2S1.3(b)(2) § burden that the de- and the simply support- other than lia for thаt carry demonstrating must fendants families. ing the contributors’ to the benefit of the they are entitled sentenced the the district court After reduction. defendants, appeal challeng- they filed this Sentencing 2S1.3 of the Guide- Section court’s determination ing district sentencing assign to to lines directs a court for reduction ineligible plus level of “6 the defendant base 6, pursuant to level to levеl base offense table in of offense levels from the number 1.3(b)(2) reduction that § U.S.S.G. 2S —a Destruction, (Theft, § and Property 2B1.1 The have lowered their sentences.
would Fraud) to the value of the corresponding challenging government cross-appealed, 2S1.3(a) (2001). § It di- funds.” U.S.S.G. by the district of funds used value the base offense rects a court to increase of- defendants’ base court to calculate the the defendant knew “[i]f level two levels 2S1.3(a). § fense under U.S.S.G. level proceeds or that the funds were believed activity, of unlawful or were intended II activity.” Id. promote unlawful contend The defendants 2S1.3(b)(l). And, § in what has been U.S.S.G. interpreted district court provision, its harbor” termed “safe 2S1.3(b)(2) as a “safe har —referred a court to decrease the guideline directs defen entitling eligiblе an provision bor” if conditions offense level to level 6 four sentencing level— dant reduction are satisfied: that denied liability” provision as a “strict (A) (b)(1) apply does not regardless of their subsection them the reduction believe did not know or They contend that knowledge. [that state of funds were the not know whether they did not and could intended to unlawful or were pro were the the monies structured activity]; unlawful promote were to be illegal ceeds of activities or (B) lawful purpose.” Accordingly, the defendant did not act with reck- the defen- funds; the source of the disregard less dants were unable to meet their burden of (C) satisfying the conditions for the safe har- the funds were the of law- provision bor activity; ful obtain reduction of their sentence offense lеvel. (D) argument Their the funds were to be used for a that their conduct only can be measured purpose. lawful by “reasonably ... foreseeable acts fur- 2S1.3(b)(2). govern- Id. Because the jointly therance of the undertaken criminal (A) (B) ment concedes that are satis- activity,” provided lB1.3(a), as under appeal only fied in this involves lB1.3(a) recognize fails to defines (C) conditions, (D). the final twо the factors relevant to generally determine course, government, bears the scope for which a defendant is to be demonstrating require the burden of sentenced. The factors set forth in to increase ments the base offense level lB1.3(a) were not intended to overrule 2S1.3(b)(l). under And re because specific factors made controlling by ap- an sentencing duсtion in a level under plicable guideline. See U.S.S.G. given only can be *5 lB1.3(a) (2001) § that (stating principles of (A)-(D), upon demonstration of conditions “[ujnless relevant conduct apply otherwise defendant, it follows that the gov not the specified”). a guideline And where sets ernment, showing has this burden of enti forth conditions under which the defendant tlement reduction. See United may prove entitlement to a in Solomon, reduction 825, States v. 274 F.3d 2 828 n. (4th Cir.2001) applicable sentencing the otherwise range, (noting “every that circuit to the defendant is not denied that proof] opportuni- [who consider bears the burden of lB1.3(a). assigned has ty by general provisions the defendant the burden the of proving entitlement to sentencing here, re guideline applicable Under the duction”). government’s Absent the dem 2S1.3(b)(2), a defendant will benefit from onstration that the defendants knew the a reduction in if sentencing his level he can activity or purpose was or the affirmatively demonstrate that the struc- unlawful defendants’ demonstration that activity the tured proceeds monies were the of lawful lawful, were purpose guideline the activity and were to be used for lawful defaults to an offensе level of 6 plus purposes. Those conditions by number of offense levels determined 2S1.3(b)(2) quite are distinct from the the value of the funds involved. It is thus lB1.3(a). explicit- factors relevant to As apparent that order to benefit from the lB1.3(a), ly by § directed we must be provision, safe harbor the defendants must guided by specific language of the carry the burden of that showing the funds 2S1.3(b)(2), applicable guideline, when were derived from lawful and were determining whether the defendants are to be used for lawful purposes. guided, entitled to the reduction. soWhen 2S1.3(b)(2)(D) we do not read as limited
In complicated by the nature to the defendant’s conduct and thus dis- of the business which the defendants agree with the statement were Second Circuit’s handling the funds of nu- involved— Bove, 44, in United States v. 155 F.3d merous customers' —thе defendants failed (2d Cir.1998), requirement that of a to demonstrate that the that purpose” “speaks structured were from “lawful “lawful terms of the activity” and that for which the purpose the monies transmitted to the structured funds Al-Barakat network were to be used for “a were used the defendant.” agreed to facts that guilty, that the the defendants this, argue defendants
To Treasury’s they were Office Department in which “the business transmittal (OFAC) activity and that froze Foreign a lawful Assets Control was engaged its of funds to the Barakat Network and transmissions assets of their customers’ States, on the across the United agents for further transmission the defendants the Barakat the owner of headquarters grounds United the Al-Barakat directing profits some of the fulfills their burden of Network was Emirates Arab Al-Qaida,” a terrоrist purposes were lawf of the business to demonstrating that however, addition, probation relies on In argument, organization. ul.* This officer, guideline. responding of the A to the defendants’ reading too narrow stat- “pro objections presentence reports, that defines to the reading them known in the Somalian funds the ed that it was “well ceeds” as defendants launder- community transmitted in their was [Al-Barakat] selves received Al-Q[ae]da” ... and that ing business disassociates funds for wire-transmittal by Al-Bara- sense. The funds retained from common “the funds were that term purpose, were their custom kat not used for a lawful by the defendants were held Al-Q[ae]da.” Al- pro given were not the to ... funds and therefore ers’ business, offered these statements were not though the wire-transmittal ceeds of that the knew of prove of some other rather were funds, illegal ob possible which their customers transactions merely transfer the monies. And nonetheless indicate tained origin probably satisfy unlawful does be unable to of an would ring proceeds *6 burden, so, It to their taint. is thus if had undertaken to do not wash them of regarding were to be proceeds lack of evidence demоnstrate the the defendant’s pre pursuant a to con- purpose of those used for lawful the lawfulness (C). (D). condition their satisfaction of dition cludes short, no in the district In we find error may said for the defen- same be court’s conclusion that that the funds were used argument dants’ reduc- sentencing were not entitled to the transmitting in them to for lawful by provision tion offered the safe harbor Again network. Al-Bara- the A1 Barakat 2S1.3(b)(2). U.S.S.G. paid those funds for being kat was not and that could something that it rendered Ill of the lawfulness provide a measurement govern the cross-appeal, Rather Al-Barakat han- On its activity. ment contends that the district court erred funds and transmitted dled the customers’ source, base of recipient determining the defendants’ some other them to 2S1.3(a) by under any given recipient’s actual fense level legality take into account the entire failing of the funds was not dem- to or intended use of funds the defendants struc way or the other amount onstrated one Indeed, over tured —over million for Isse and if inference to be $4.2 case. facts, (reflecting his later against it would cut million for Abdi drawn from the $3.3 conspiracy). The dis- pleading participation In argument. the defendants’ * however, we that the argument, argument, can assume making this the defendants over- In money-transmittal requisite look the fact could have obtained the required a license as business failed to have license. by Virginia address their and federal law. To PART, IN IN AFFIRMED VACATED these apply found that trict court PART, AND REMANDED “unjust” contrary would be amounts for on convictions sentencing guidelines MOTZ, DIANA Circuit GRIBBON lаw violations. laundering and tax part III and in the Judge, concurring 2S1.3(a) by using,
Accordingly, applied it judgment: funds,” $127,334.97 for for “value of Abdi, $100,588.23 represent-
Isse The defendants’ wire transmittal busi- remittal of the total structured ing the 3% activity” a ness did not constitute “lawful Al-Bara- remittal to funds because 3% under U.S.S.G. because (Al- purpose “went to an unlawful kat required by failed to obtain the licenses Q[ae]da).” of Al support Barakat’s reason, federal law. For this Virginia and judgment affirming I concur in the relying In on the district addition court’s conclusion that the defen- district reasoning, the defendants contend court’s sentencing not entitled to the dants were the funds” alternatively that the “value of provi- the safe harbor reduction offered mon- limited to “that amount of should be 2S1.3(b)(2). I not sion of U.S.S.G. do there would be no struc- ey without whiсh rationale, however, join majority’s be- They explain: “In the turing violation.” if cause the defendants had obtained only that that would include present licenses, I requisite then believe that $10,000 exceeded money which qualified would have for U.S.S.G. de- multiple down into defendants broke 2S1.3(b)’s safe reduction. harbor single day.” posits on 2S1.3(b) provides that a defen- Section reject interpretаtions offered We structuring convicted of can obtain a dant court and the defendants. both the district offense level to level 6 if: decrease his straightforward reading Based on (b)(1) (A) apply does not subsection 2S1.3(a) accompanying applica- and the believe defendants did not know or [that note, agree government’s with the tion we of' the funds were The “value of the funds” is position. unlawful or were intended of the funds that the defen- entire amount *7 activity]; promote unlawful amount because that is the dant structured (B) the did not act with reck- defendant structuring reporting in the or “involved funds; the disregard source less conduct.” See U.S.S.G. cmt. n. 1. 2S1.3 (C) the of law- the funds were portion not limited to the The value is activity; ful and $10,000 any given day, on the funds above grants (D) no discretion to provision and the a were to be used for the funds the court to reduce the amount. purpose. lawful 2S1.3(b)(2). Id. Because the Govern- the Accordingly, we conclude that dis- (B) (A) that and are satis- ment concedes interpretation erred in its trict court only appeal in this involves fied 2S1.3(a) calculation of the value and its (C) (D). conditions, the final two and involved for sen- of the structured funds ' argue they thаt are enti- the defen- The defendants tencing purposes. We vacate re- benefit of the safe harbor and remand for resen- tled to the dants’ sentences 2S1.3(a) only conduct relevant by using duction because the tencing apply determining $4,244,499 when under the Guidelines as the amount involved $3,352,941 structured funds were sen- whether sentencing Isse and when a activity” lawful or “used for “proceeds of tencing Abdi. structuring Although unacknowledged by major- is the financial purpose” lawful themselves, ity, only ques- not the circuit to consider the by the defendants con- interpreted tion has provi- safe harbor gave who the defen- people duct of the Bove, I sion as do. See United States v. recipients to be wired or the money dants (2d Cir.1998). There, here, 155 F.3d as Thus, the of the wire transfers. defen- apply the district court declined to the safe they proved by pre- dants maintain that provision. harbor The had defendant used they of the evidence that re- ponderance illegally buy property structured part ceived the structured funds as from a seller who report then failed to all ie., activity,” operating a “lawful wire Relying from the sale. on (if they transfer had obtained the business failure, the district court held that the licenses), and used the funds for a required buyer was not entitled to the safe harbor ie., purpose,” transferring. “lawful wire reduction, reasoning that the structured they For these reasons assert ultimately by funds were used seller of 2S1.3(b)(2)(C) satisfied conditions property, had legitimately pur- been (D) and so were entitled to the safe harbor (albeit funds), chasеd with structured reduction. evade taxes and therefore not “used for a Government, majority, and now the purpose.” lawful The Second Circuit re- “ not so versed, 2S1.3(b)(2)(D) contend this is because the holding prove only defendants must not that their speaks in of the purpose terms for which lawful, activity own the structured funds were used [H]ere, defendant.... also that those from whom received funds were used for wholly [the lawful defendant’s] engaged activity funds a lawful purpose of purchasing real estate.” Id. at those to whom sent the funds used reason, 48-49. For this the Second Circuit true, purpose. them for a lawful It is held that the defendant was indeed enti- course, co-conspirator responsible that a is tled the safe harbor reduction. for, may and so be sentenced on the basis of, reasonably “all foreseeable acts and I find the Second Circuit’s rationale and omissions of others furtherance of the holding compelling and would not create a activity.” criminal jointly undertaken But, above, circuit conflict. as noted since lB1.3(a)(l)(B). But “conduct the defendants’ wire transmittal business of others that was not furtherance of the in this case did not in fact constitute a activity jointly criminal undertaken lawful because failed to obtain defendant[s], or not reasonably was fore- licenses, I required concur in the judg- with that seeable connection criminal affirming ment the district court’s denial of *8 activity, is not relevant conduct[.]” See the safe harbor reduction. n. 1B1.3 cmt. 2. Since there is no suggestion here that
jointly undertook crimi-nal be-
yond illegal structuring, the manner
which the defen-dants’ clients obtained the
structured funds and the manner in which
recipients of the funds used the
does not relevant conduct constitute attrib- sentencing pur-
utable to defendants for
poses.