*1 Act”) (citation and internal structure of omitted).
quotation have here no such aid to assist our
We
discovery meaning. § 545’s Hence the grievous ambiguity or uncertáin-
cases reveal “day”
ty. though appeared It the word is
in a criminal statute with no indication what- (a) (b) twenty-four hours or
soever whether period daylight (excluding night) ambiguity is a similar
intended. Ours phrase
leads us to the conclusion 545’s law,”
“contrary involving the definition crime, “lenity” principle ap- when the
plied, regulatory does not include violations. my judgment, the conviction under and,
Count Nine should be reversed there-
fore, respectfully dissent. America,
UNITED STATES of
Plaintiff-Appellee, HEAPS,
Ira Nathan Defendant-
Appellant.
No. 93-5923. Appeals,
United States Court
Fourth Circuit.
Argued June 1994.
Decided Oct.
480 Bronx, NY, Berne, Richard
ARGUED: W. Thomas, Sp. Anita appellant. for Asst. U.S. Alexandria, VA, Atty., appellee. ON Fahey, Atty., BRIEF: Helen F. U.S. Alex- andria, VA, appellee. HALL, MURNAGHAN,
Before and NIEMEYER, Judges. Circuit part part Reversed and affirmed in published opinion. Judge MURNAGHAN opinion, Judge wrote the K.K. joined. Judge HALL an NIEMEYER wrote concurring opinion part dissenting and part.
OPINION
MURNAGHAN,
Judge:
Circuit
defendant,
Heaps,
ap-
Ira
Nathan
has
pealed
judgment
from the
of the United
District Court for the Eastern
States
District
Virginia finding
guilty
him
of all counts of
eight-count
charged
indictment.
1
Count
conspiracy
possess
the defendant with
methylendioxyamphetamine
distribute
(MDA), commonly
“ecstasy,”
known as
§
21
2
violation of
U.S.C.
846. Count
charged
conspiracy
the defendant with
commit
in violation of 18
charged
§
U.S.C.
371. Counts 3 and
ecstasy
defendant with distribution of
in vio-
841(a)(1)
lation of U.S.C.
and 18 U.S.C.
charged
5 and 7
Counts
with
in violation of 18
1956(a)(1)(A)©
Finally,
§§
and 2.
charged
6 and 8
Counts
the defendant with
money laundering in violation of 18 U.S.C.
1956(a)(1)(B)®
§§
and 2. The defendant was
29, 1993,
sentenced on October
to months
1, 3,
as to
and to
confinement
Counts
2, 5, 6, 78 months confinement as to Counts
concurrently with one another.
Boccia
to run
testified
he met the defendant
June, 1991,
two-year period
sentencéd to a
at a Grateful Dead
He was also
concert in
Washington,
special
D.C. The defendant
supervisory
release
assess-
became a
totalling
ecstasy
connection for the
that Beck and
ments
$400.
*3
Boccia sold to the DEA. Boccia testified
charges stemmed from the distribu-
The
during
supported
by
1991 he
himself
ecstasy Geoffrey
tion of
Boccia and Gillian
selling drugs
working
and
as a bike messen-
Beck,
subsequent payment
and the
from
ger.
Beck and Boccia to the defendant
wire
upon
Boccia further testified that
receiving
transfer.
quantity
ecstasy
defendant,
a
from the
he
five
in
The Government called
witnesses
pay
portion
and Beck would
for a
of the
case-in-chief,
including Special Agent
ecstasy,
drugs,
pay
sell the
and then
Drug
Robert Valentine of the
Enforcement
outstanding
profits
balance from of the
(DEA),
Beck, Geoffrey
Administration
Gillian
ecstasy sales. Boccia testified that he and
Boccia,
Maire,
Stacey
Deputy
United
bought
ecstasy
Beck
for about
or
$12
$13
Agent
Drake.
States Marshal David
Valen-
hit,
larger quantities
a
sold it in
for
$13
ecstasy
purchased
that he
from
tine testified
hit,
quantities
a
in
smaller
for
$14
$20
separate
and Boccia on five
occasions
Beck
a hit.
$25
August
between
1991 and November 1991.
Both Beck and Boccia
in
testified that
purchased
ecstasy
from
He
150 tablets
June, 1991,
defendant,
through
prear-
9,1991,
August
Boccia on
in
Beck and
Wash-
rangement
Beck,
approximately
with
sold
$2,000.
6,
ington,
September
for
D.C.
On
ecstasy pills
they
to Beck which
then re-
1991,
and Boccia sold 240 tablets to
Beck
sold. The
supplied
pills
defendant next
$3,500
Alexandria,
in
Agent
for
Valentine
ecstasy
8,
August
to Beck and Boccia on
During
purchase,
Virginia.
this
Beck told
1991,
$4,000
in
day
New York. The
ecstasy
Agent Valentine that the
came from
purchase
placed phone
before this
Beck
call
people
two
New York who were 40 or 45.
apartment
from her
to the defendant.
12, 1991, Alexandria,
September
Virgi-
On
nia,
distributed an additional 10
Beck
tablets
1991,
August,
Beck
testified
later
Agent
Valentine
connection with the
again supplied
the defendant
500 hits of ec-
6,
September
1991 sale.
stasy to her and another friend in New York.
arranged
Beck testified that she
to meet the
5, 1991,
D.C.,
Washington,
On October
apartment,”
defendant at “Frank’s
but the
Agent
purchased
Valentine
85 tablets from
defendant was not
there. She met with
sale,
Boccia. Prior to this
Beck and Boccia
Frank, who told her that the defendant had
ecstasy capsules
sold 115
of a different vari-
left
in a
items
her
dresser drawer. Beck
ety
Agent
Valentine. Beck and Boccia
ecstasy
stated that she retrieved
from the
capsules
supplied
testified that the 115
being
Frank
drawer. Beck described
as
be-
California,
by Jeffrey
Saunders of
not
years
age.
tween 40 and 45
13, 1991,
Finally,
defendant.
on November
Alexandria,
Agent
Virginia,
pur-
Valentine
sup-
Boccia testified that
the defendant
10,350 dosage
chased
units of LSD from plied
ecstasy
him
Septem-
with 500 hits of
$5,000
Beck and Boccia for
in cash.
5,
$4,000.
brought
ber
1991 for
Boccia
D.C.,
ecstasy
Washington,
back to
and sold it
Beck testified that
was a
defendant
Agent
and others.
Valentine
from
York.
friend
New
She and the defen-
trips
approximately
dant took two
to Jamaica for which the
Beck testified that at
11:25
13, 1991,
wired,
paid.
p.m.
defendant
Beck visited the defendant
on November
she
via
Union,
regular
spoke
New York on
basis and
to Western
two
'orders made out
“Stacey
was,
telephone periodically.
Stacey
him over the
Maire.”
Maire
at the
She
that,
transactions,
exception
pur-
girl-
with
testified
of the
time
the defendant’s
Saunders,
Jeffrey
chase from
all of the ecsta-
friend. She later became his wife. Beck
sy
bought during
that she
that the
had
her
the summer
stated
defendant
instructed
in the
1991 was obtained from the defendant.
and Boccia to send the
orders
“Stacey
upon
may
order
court
motion of the defendant
Maire.” One
name of
proceeding
amount of
and the
transfer the
as to that defen-
in the
was sent
...
money Beck
Boccia
dant
to another district.
other for $500.
was the
sent to
The decision whether to transfer a case is
Agent Valentine
Alexan-
sale of LSD to
committed to the sound discretion of the
13,
dria,
November
Virginia, on
Espinoza,
district court. United States v.
153,
Cir.),
explained that the
Beck and Boccia
Both
102 S.Ct.
As positing provided opportunity is that the transfer of the the check theories ment’s drug carry completed illegal the antecedent trans for the defendant out the Therefore, action, completion bribery. jury presented that this alone is suffi The with sufficient evidence from to sustain the conviction. Govern which to find cient beyond deposit three cases from other circuits doubt that the ment relies on reasonable position. pro- The first of these of the check amounted to an support of its intent to Paramo, carrying bribery. mote the on of Id. is United States — (3d Cir.1993), U.S. -, Cavalier, Finally, in United States v. (1994). 1076, 127 In Para- L.Ed.2d 393 S.Ct. (5th Cir.1994), up- F.3d 90 the Fifth Circuit mo, embezzled IRS tax refund the defendant held the defendant’s con- Coconspirator Vega, at 1215. checks. Id. Cavalier, upon viction based mail fraud. IRS, sent fictitious re tax examiner for physical possession the defendant took of a payees in New York. The fund checks van, satisfy required monthly failed to picked up the checks and defendant then payments, and then sold the van for cash. depositéd Id. at 1215. The defendant them. Meanwhile, reported the van cashing argued participation that his company as stolen to the insurance promote carrying on the checks did not paid remaining off the lien on the van. Id. at of mail fraud. Id. at 1217. The Government Fifth 95. The Circuit held that the transfer argued promoted that Paramo mail fraud holder, of a check from the insurer to the lien checks into when he converted embezzled defendant, pro- because of the fraud of the cash. Id. completed moted the mail fraud. Id. at 93. “Here, first determined that a Cavalier caused to be Third Circuit reinvested or by engaging plowed defendant can violate the statute back the of his mail fraud to ” not in financial transactions that his overall scheme to defraud.... but, here, only ongoing activity, or future Id. activity. prior unlawful Id. at 1218. Since foregoing The Government relies on the Paramo understood that the embezzled cases, Cavalier, particularly argue checks would have been worthless unless reasonably that “the could have conclud- exchanged cashed at a bank or otherwise ed defendant caused the currency, jury rationally
negotiable
“the
drug
plowed
from the
sales
be
back to
cashing
*7
could have found that
the
of each
possess
his overall scheme to
and
growth
prosper-
to
check contributed
the
drugs.”
distribute
ity
by creating
preceding
of each
mail fraud
argument un-
We find the Government’s
value out of an otherwise unremunerative
Cavalier,
First,
view,
persuasive.
our
su-
enterprise.”
Id.
There,
pra,
distinguishable.
is
next relies on United
Government
fraudulently had to induce the insurance
Montoya,
addition to other
than
phones played
cellular
the same
punishment.
role —or
instead of other
We find that
any
drug opera-
indeed
role —in Davis’s
Congress intended
beepers.
tions as the
“specified
activity”
sepa-
Likewise is the rent-
be
payments
al
separately punishable.
the checks written to
rate offense
cash; certainly
expenditures
these
main-
Edgmon,
United States v.
lifestyle,
tained Davis’
but more than this
—
(10th Cir.1991),
1213-14
they
promoted
is needed
establish that
,
3037, 120
U.S
112 S.Ct.
L.Ed.2d 906
. —
drug
his
activities.
(1992). Although the Tenth
consid
Circuit
case,
only
Id. at
the instant
question
ered the
different context and
evidence as to what was done with the
perhaps placed
emphasis
too much
on the
put
after it was sent was that it was
in a box
past
temporal distinction between
and future
house,
in a
drawer
the defendant’s
behav-
crimes,
Congress’
insight
into
intention is
*8
ior far more innocuous than even that consid-
Congress
prevent
valuable.
intended to
ered
the Seventh Circuit in Jackson.
already prohibited by
ill
than those
other
other laws. The statute should not be inter
money
no
that
There was
evidence
preted
any drug
to make
transaction a mon
acquired through
was itself
ey laundering crime.
promote
activity.
used to
an unlawful
Fol-
Jackson,
lowing
supra,
the rationale of
we
holding
To the extent that our
con
carry
that
hold
the Government failed to
holdings by
flicts with
and Ninth
Third
proving
burden in
that the defendant intends
Circuits,
Paramo,
Montoya
supra,
see
activity
to
unlawful
within mean-
respectfully disagree
we must
that the mere
ing of the statute.
receipt
money
of a
transfer and the subse
can,
quent placement of cash in a box
of
C
itself,
constitute
under the
Circuit,
holding by
statute. A
that
in the
the Seventh
We also must conclude
Jackson,
United States v.
because find that it acted well within its discretion go him.” also asked me She testified its decisions on these matters. pick up money “I order orders 2, 5, 6, Accordingly nowwe reverse Counts identification,” bring needed to and stated grounds and 8 and affirm on all other you “you prove had to were the appeal. person name on the order” whose they Accordingly, judgment “if and that were in someone else’s name, you pick wouldn’t have been able to IN PART AND AF- REVERSED Further, up.” the Government offered them FIRMED IN PART. taped telephone conversation between the defendant and Beck wherein Beck indicated NIEMEYER, Judge, concurring in Circuit going she was to send the defendant some part dissenting part: him, of the owed more she asked respect Heaps’ With to Ira convictions on Stacey again.” if “she should send it to De- indictment, III B Counts 5 and 7 of the Part “Hum, responded, fendant no. You don’t majority opinion of the concludes that you need to do that know.” The defense has government carry failed to its burden of argued go- that since the defendant was not proving Heaps engaged in a financial ing away at time of the be second transaction with intent to wiring money, of the there was no reason meaning within the of the him to have the sent to his wife. We statute, laundering. persuaded are that the second conversation 1956(a)(l)(A)(i). For the reasons that fol- prosecution corroborates the witness’ testi- low, portion opin- I dissent from that mony that the was sent in her name respects, ion. In all other I concur. away. the defendant would be because Heaps A convicted on Counts 5 and 7 *9 money laundering
The Government introduced no other evi- of the indictment for 1956(a)(l)(A)(i). tending § dence to show that violation of 18 U.S.C. 13, 1991, purpose concealing money alleges had the of the Count 5 that on November $1,500 by co-conspirators. by him wire to sent to the Gillian Beck transferred * addition, conspiracy money money laundering In since the convic- to launder is also reversed. reversed, tions are the on 2 of conviction Count majority carry- Heaps argues, opinion the intent
Heaps “with nothing specified agrees, unlawful that this transaction was ing of such distribution],” drugs. majori and Count 7 al- drug payment than a [illegal more notes, on the same date ty payment drugs transaction leges a similar ‘Were the itself review, Our there- promoted $500. in the amount held to be a transaction fore, presented the facts to the must take activity of that same transaction gov- favorable to the jury light most virtually every drugs would be an sale of whether a reasonable and determine ernment laundering money automatic violation as soon under the jury convict the defendant could money changed hands.” United States Cf. proof. I conclude that applicable standard Edgmon, 952 F.2d Cir. v. jury’s supported the verdict ample evidence 1991) (“Congress appears to have intended two counts and would on those of conviction sepa a statute to be affirm. therefore underlying of rate crime distinct from the generated to be laun fense continuing Beginning in June 1991 dered.”) 1991, Heaps, who was locat- until November City, regular suppli- York was the ed New agree that the constitut While drug “ecstaey,” illegal which is sold er of the ing drug a violation cannot serve as the pills, to Gillian Beck and Geof- tablets or money laundering, that does not basis for Boccia, located in frey who were the Wash- com mean that a financial transaction after bought Beck and Boccia ington, D.C. area. pletion illegal drug activity, if even consignment, drugs, often on and sold connected, closely cannot constitute Beck, portions. them to customers in small laundering. A violation 18 U.S.C. Heaps, visited him in New York friend of 1956(a)(1)(A)© requires § a “financial trans travelled with him to City regularly and even (1) necessary action” that is not to the estab Heaps’ expense on two occasions. Jamaica at underlying illegal activity; lishment of the paid portion Boccia for a Typically, Beck and (2) supports promotes illegal or drugs in or other advance and of the tablets activity.* typically by This is revealed evi profits owed from the remitted the balance drug dence that the of a sale are drugs were sold. after the “plowed purchase drugs back” into the $1,500 Indeed, payments of $500 equipment ways or in other used continue pro- were derived from the November 1991 illegal conspiracy. See United States drug and were remitted to ceeds of sales Jackson, F.2d 841-42 of the Heaps to cover the balance amounts Additionally, in circumstances where non- drug purchases. previous him for owed to monetary proceeds are received in the form instructions, Beck wired the Heaps’ On security, may of a a violation occur when the 13, 1991, $2,000 p.m. 11:25 on November at security (by is converted a financial transac Maire, Stacy Heaps’
via Western Union
tion)
money, thereby yielding
into
a benefit
girlfriend. Maire then cashed the
by a transaction which is distinct from the
“money
placed
orders and
the cash
illegal underlying activity.
independently
Heaps’ apartment.
box” in
case,
dispute
Heaps does not
could
this
the most obvious demonstra-
payback
November
tion of
is the loan
conclude that the
orders
which,
effect,
illegal drug
by
Heaps
activities
Beck to
continued
arrangement
sent wire
interstate commerce and that
the credit
facilitated the
illegal
pro-
underlying illegal drug conspiracy.
Heaps
nature of the
While
knew
$2,000
point Heaps
argue
does
is that
there is no direct evidence that
ceeds. The
engage
actually “plowed
illegal
in the financial
back” into
he did not
transac- was
carry-
drug activity,
the intent to
the circumstantial evidence
tions “with
activity.”
clearly
ing
supports
on of
the conclusion that
1956(a)(l)(A)(i).
ongoing drug conspiracy
supported
*
Cashing money
wire or other
order falls within the definition
"the movement of funds
1956(c)(4)(A)(i).
it involves
means.” 18 U.S.C.
*10
"financial
transaction" because
by
“fronting”
Heaps
they
which
tained checks which
through a
scheme
cashed to realize
drugs
illegal conduct,
to Beck and Boccia. With-
distributed
the benefits
their
$2,000 payment,
each,
such a scheme would
by
out the
showing
the court held that
$2,000 payment
The
cashed,
not have continued.
checks were
had
agreed
arrangement
a credit
to as
satisfied
been established. As
court in
Paramo
jury
part
“fronting”
scheme. The
said:
prior
of similar
presented with evidence
case,
present
In the
Paramo understood
subsequent transactions and could well have
the embezzled checks would have
$2,000 promoted
concluded
been worthless unless cashed at a bank or
scheme which had been
existence for the
exchanged
negotiable
otherwise
for
cur-
Significant-
and fall of 1991.
entire summer
fact,
rency.
jury rationally
Given this
1993,
ly,
January
Beck
after her arrest
cashing
could have found that the
of each
telephone
Heaps
placed an undercover
call to
growth
check contributed
pros-
to the
in which the two coordinated the next install-
perity of
preceding
by
each
mail fraud
previously
complet-
ment of
owed for
creating value out of an otherwise unre-
transactions,
drug
demonstrating the
ed
thus
enterprise.
munerative
arrange-
ongoing nature of their financial
Similarly,
promise pay Western Union cash Stacy designated payee,
New York to a i.e.
Maire. This commercial
transaction was
payment money
drugs;
more than
America,
UNITED STATES of
private
it was a “financial transaction” in the
Plaintiff-Appellee,
fully supported
ongoing
sector which
drug conspiracy,
necessary
but was not
drug
establish the
violation. Similar conclu
Tracy WALKER, Defendant-Appellant.
sions have been reached
somewhat distin
No. 94-5084.
guishable
apposite
but no
factual circum
less
Third, Fifth,
Appeals,
United States Court
stances
and Ninth Cir
Paramo,
Fourth Circuit.
cuits. See United States v.
—
(3rd Cir.1993),
F.2d
20,
Argued July
1994.
-,
U.S.
ya, 945 F.2d each of cases, fraudulently
these the defendants ob-