United States v. James Larry Dobbs

on the conviction and AFFIRM McGraw’s laundering counts. We AFFIRM sentences, Polley’s but we VA-

Sneed sentence and REMAND Johnson’s

CATE resentencing, consistent court for district respect him opinion, with alone.

with this America, STATES of

UNITED

Plaintiff-Appellee, Larry DOBBS, Defendant-

James

Appellant.

No. 94-40606. Appeals, Court of

United States

Fifth Circuit.

Aug. 1995.

Rehearing Denied Oct. Payne Rodg- Rodgers,

James Moore Clem Paris, TX, Hodgkiss (Court-appointed), ers & appellant. Kenner, Atty., Tyler, Traci L. Asst. U.S. TX, Atty., Savage, Michael Ernest Asst. U.S. Bradford, Sherman, TX, Atty., Mike appellee.

pervisor for the FmHA that he had sold all slaughter authority of his cattle for without enough money and did have both FmHA and F & M. POLITZ, M. Judge, EMILIO Chief Before agreed give FmHA a to Dobbs new loan and STEWART, Judges. Circuit and GARZA payments years if schedule over seven he applied from his unauthorized STEWART, Judge: outstanding FmHA sale to his loan. Dobbs appeals convictions for L. his James Dobbs agreed. fraudulently collateral of the disposing of the 1991, despite promises contrary, In (FmHA), Home Administration Farmers $101,000 approximately Dobbs borrowed fraud, money laundering. For the and bank separate buy in from F & M five notes to reasons, following his convictions for approximately of cattle. head Dobbs remaining reversed and his are security agreement in signed a which he are affirmed. convictions agreed any prior collateral without not to sell dealings written consent. In addition to its BACKGROUND Dobbs, Larry F M made loans to with & Larry long-time a cattle Dobbs was James buy children to another 120 head of Dobbs’ Grove, Honey Texas. and rancher farmer Although in the cattle. the loans were made of Farmers & regular was a He customer name, the bank knew that Dobbs children’s M) (F Ladonia, Texas, Merchants Bank & manage bought in chil- would the cattle his carry his to on where he borrowed dren’s names. farming ranching operations. Beginning and April In the FmHA sent Dobbs a began borrowing Dobbs also inspec- informing letter him of a collateral developed good a and sub- from FmHA. He responded by informing the tion. Dobbs and F history loan with both FmHA stantial all of cattle FmHA that he had sold & M. forming FmHA’s collateral. the basis January Dobbs borrowed On Although brought receipts for cattle he $175,000 op- FmHA to start a cow-calf outstanding repay did not balance of he eration1, in- annual with the first seven $182,000. July In F approximately & January 1990. Under his stallments due inspect tried to its collateral. M bank also FmHA, pur- agreement Dobbs would responded by informing the Dobbs bank and some approximately chase 330 cows he had sold all of its collateral and had used bulls, produce calves for resale. order operating expenses. all of the for paid outstanding $85,000 FmHA Dobbs’ bank off approximately to F & Dobbs owed except equipment F one loans to & M M.

loan, immediately him advanced FmHA, by criminal referral After a FmHA refi- operating expenses. After disposing indicted on one count of Dobbs was loan, agreed F M Dobbs nanced the & of 18 of FmHA collateral violation U.S.C. purchase ad- obtain other bank loans to in violation § counts of bank fraud two possibility of con- ditional cows. Due to the eight § of mon- 1344 and counts 18 U.S.C. collateral, not like for fusing FmHA does laundering in of 18 ey violation U.S.C. mortgaged cattle to local farmers to have 1956(a)(1). trial, § he was con- After a lenders. FmHA disposing count of victed on one fraud, and two property, two counts of bank entire cattle herd was money laundering. He was sen- counts of quarantined the state after certain imprisonment forty-eight months of tenced to positive for brucellosis.2 On Novem- tested 16, 1988, pay special a assessment of County his and ordered ber Dobbs advised Su- commonly to in the cat- advantage operation a referred of a cow-calf is that Brucellosis 1. The calves, industry "Bangs.” opposed Presence of this disease produces to mere- tle as fanner new opera- devastating impact reselling on a cattle ly fattening up can have a the cows he has and year operation. under the Stocker tion. them after —nied, —, restitution S.Ct. was also ordered He $250. $181,8444.03 Department L.Ed.2d 876 the U.S. $89,325.62to F & M. Dobbs Agriculture and In order to obtain a conviction under appeals his convictions. government § must U.S.C. first, things: knowingly three

DISCUSSION of, wilfully disposed or converted to his use, property described the indict own OF DISPOSING I. FRAUDULENT second, ment; property disposed that the FmHA CONVICTION COLLATERAL mortgaged to the Farmer’s Home Ad insufficient there is Dobbs contends ministration; third, that Dobbs acted to convict him of evidence in the record the FmHA. with intent defraud United property mortgaged disposing of fraudulent (5th Garth, 1469, v. 773 F.2d 1477 States jury’s “unique role” FmHA. It is the to the 1140, Cir.1985), cert. 476 U.S. 106 credibility and evaluate the de judge the (1986). 2246, 90 L.Ed.2d 693 S.Ct. and to decide how much meanor of witnesses trial, Love, county At Robert who was testimony. weight given be to their should FmHA, supervisor for the testified that 312, Higdon, v. 832 F.2d 315 United States agreed writing had to obtain Dobbs (5th Cir.1987), cert. 484 U.S. permission selling any FmHA’s before cattle. (1988). 1051, 98 L.Ed.2d 1013 Our 108 S.Ct. selling He also stated that the entire herd in for suffi resulting narrow standard review operation significant a cow-calf was a event challenges “gives ciency full of the evidence because without the base herd no income responsibility of the trier of fact play to the produced repayment. could be for loan Mar- testimony, fairly to resolve conflicts McPherson, county vin who was the assistant evidence, weigh and to draw reasonable supervisor, also testified that Dobbs had facts to ultimate facts.” inferences from basic agreements signed loan in which he had 307, 319, Virginia, 99 v. 443 U.S. Jackson agreed any to inform the FmHA of (1979). sale 61 L.Ed.2d 560 S.Ct. collateral. He also testified that he never challenge sufficiency A of the evidence fails gave permission Dobbs to sell if of fact could have found a rational trier FmHA’s collateral. McPherson also showed proved the essential that the Government gotten permis- an exhibit where Dobbs had charged beyond a rea elements of the crime from the FmHA to sell cattle in the sion Webster, v. sonable doubt. United States past. (5th Cir.), cert. de F.2d 1307-08 —nied, Dodson, —, Kay county clerk, who was the 113 S.Ct. (1992). end, if permission testified that Dobbs had “[w]e L.Ed.2d 269 Toward light FmHA to must in the most sell cattle there would have view the evidence file, verdict, accepting detailing all credi a form 1962-1 in his loan been favorable bility inferences made how much cattle he could sell. She also choices and reasonable Carrasco, jury.” that there no form United States v. 830 testified 1962-1 his Cir.1987) (footnote omitted). (5th period covering January file for the of 1991 F.2d Dumon, Moreover, necessary August of 1992. be- is not that the evi David who “[i]t Love, every hypothesis County Supervisor in dence reasonable came 1992 after exclude wholly gotten have inconsistent with ev admitted Dobbs could innocence be ery except guilt.... permission that of A FmHA’s to sell some cattle to conclusion family expenses operating among reasonable con essential or ranch free to choose expenses request a United States v. had such been made. structions the evidence.” Bell, Cir.1982), However, aff'd, request a was not to his such made knowledge. Mayberry, district director 462 U.S. 76 L.Ed.2d 638 John FmHA, Finally, policy that the basic “our review remains the stated government obtaining permission or cir on same whether the evidence is direct Cardenas, has since at cumstantial.” United 9 to sell collateral been the same States Cir.1993), least 1971. F.3d cert. de- him the FmHA officials. Because the Gibbs, Bonham Live

Dorothy owner of amply jury’s construc- supports sold almost 200 record that Dobbs stock testified evidence, reject testi sales barn. She we Dobbs’ claim. of cattle at her tion head instance, made out a she fied that one the FmHA and he be1 to Dobbs and check FRAUD II. BANK CONVICTIONS cajoled into writ very upset. He her came was insufficient Dobbs contends there Gould, him alone. Toni

ing a new cheek to him in 2 and 3 of evidence to convict Counts Inspector agent of the General Office an Honey devising to defraud the a scheme Agriculture, testified Department of Farmer’s and Merchants Grove Branch of estimate, sold Dobbs based on a conservative (F M) In order for Bank & of bank fraud. January of 1991 of cattle between 1086 head government Dobbs of bank to convict According to his loan August of 1992. fraud, prove knowingly that Dobbs it must documents, only supposed to have a he was attempted “a scheme executed or to execute of cattle. He also of 667 head maximum federally chartered or or artifice to defraud selling buying and that Dobbs was testified insured financial institution.” U.S.C. gambling if to make a short cattle as he was 1344(1). argues § is insuf- that there profit. term in the that he ficient evidence record thought that Larry testified that he Dobbs to had the intent defraud. FmHA sell permission of the to he had the to defraud” is The term “scheme gotten He stated that he had the cattle. defined, readily see States v. United the cattle. permission to sell McPherson’s (3rd Goldblatt, Cir.1987), F.2d 813 624 given McPherson had also testified that He any pre it includes false or fraudulent but had filled him a blank 1962-1 form he representations tenses or intended to deceive FmHA. it out the form and' sent value, something of others in order to obtain record, con- Upon we careful review money, from the institution to be such in the that there is sufficient evidence clude Lemons, 941 F.2d deceived. United States v. trier of fact from which a rational record Cir.1991); 314-15 United States acted with intent to find that Dobbs could (5th Cir.1989). Church, 23 the FmHA. There was defraud if requisite intent to defraud established report- that Dobbs had been informed knowingly and with the the defendant acted it, and ing requirement, that he was aware of deceive, ordinarily for the specific intent to reporting re- complied with the that he had causing financial loss to purpose of some once, Dobbs quirement past. in the At least gain bringing some financial another or about actively sought FmHA as a to exclude the Gunter, States v. to himself. United in connection with payee on checks issued Cir.), cert. F.2d also waited until these sales. Dobbs L.Ed.2d 152 110 S.Ct. in- FmHA was about to make a collateral Gelais, (1989); F.2d v. St. United States informing it that he had sold spection before — U.S. —, (5th Cir.), evidence, From this a rational the cattle. (1992) (wire 439, 121 L.Ed.2d 358 of fact could infer that Dobbs wanted trier fraud). as to the condition of its deceive the FmHA (the cattle) in security order to convert indictment, In count two of security to his own use. value of the alleged June 1991 government that between bank August Dobbs committed argues emphatically that the FmHA and Dobbs securing the F & by selling the cattle fraud given right him the to sell the cattle had knowledge F & M’s estopped M’s loans without government should be custom, that, argues he authority. Dobbs arguing that it had not authorized to sell above, permission F & M’s did not need the As noted various sale of cattle. period, twenty-year Over a they gave Dobbs the cattle. FmHA officials denied that ap loans and obtained numerous mortgaged cattle. Dobbs had permission to sell notifying without first parently sold cattle require would us Adopting Dobbs’ contention argues so. He of his intent to do credibility between the bank make a determination bring gain him- not need the bank’s another or about financial he did because Gunter, cattle, case, permission there was insuf- to sell self. 876 F.2d at 1120. this prove that he had the ficient evidence to Dobbs acted with intent to deceive order disagree. requisite We intent to defraud. bring gain about financial to himself at someone else’s risk. Fields, trial, presi- who was the At Alvin Bank, dent of the Farmer’s and Merchants indictment, In count three of the only him that he testified that Dobbs told government alleges that Dobbs committed F the bank’s collateral cattle when had sold by selling bank fraud cattle which he knew inspect & M was about to the collateral. He children, security F for & M loans to his that Dobbs told him that he also testified Clint, Ashley, and Melanie Dobbs. Dobbs from the cattle didn’t have again argument makes the same that: be pay sales because he had used required cause he was not to seek the bank’s that, operational expenses. Fields admitted permission past, to sell the cattle there contrary, despite agreements to the written is insufficient evidence from which the F obtain & M had never insisted Dobbs could find that he had the intent to defraud. permission the bank’s to sell the cattle which Again, disagree. we did, however, testify collateral. He served as arrangement was that his testimony regarding In addition to his F when he did sell cattle he would off & two, per- count Alvin Fields testified that he proceeds. M’s loans with the sonally made loans in 1991 to Dobbs’ adult Toni Gould testified that Dobbs had been buy approximately children to 120 head of buying selling continuously from purpose cattle. The of the loans was to fund January August if of 1991until as he college expenses. the children’s He said that gambling. was also testified that Dobbs She signed each child came to the bank and for large portions at had sold of the bank’s cattle the loans and that the bank looked to them Honey sales barns outside of the Grove area. repayment. Fields stated that he knew testified, trial, at that Dobbs Robert Love managing that Dobbs would be the cattle. agreed, writing had in in not to incur He testified that in in- October he anyone than debt from other the FmHA. spected the children’s collateral and found only 112 head of cattle and each of those jury find that a reasonable could con- We appeared recently purchased. to have been clude from this evidence Dobbs commit- replacement He also discovered that even the by selling ted bank fraud the cattle which pay operational cattle had been sold to ranch secured the bank’s loan to Dobbs. The expenses. The failure use the cattle sale prohibition FmHA’s on the incurrence of oth- proceeds pay off the debt left children’s securing er debt made Dobbs’ actions $40,- facing approximately the bank a loss of suspect. jury more debt could conclude that, 000.3 testimony from the of Fields and Gould cattle, selling diverting was Dobbs part grand jury A of Clint Dobbs’ testimo- belonged properly funds that to bank into his it, ny jury. was also read to the In Clint operation. By selling own ranch the cattle that, Dobbs testified in one instance when his area, Honey sought outside the Grove Dobbs father of his sold some cattle Oklahoma to conceal his actions from the bank. Dobbs Oklahoma, City, thought he that his father the bank at risk that loans would

placed its going proceeds pay to use the off his repaid might not be in order that he use the bank note. He later out found that Dobbs proceeds personal as a stream of income. kept money. had Clint Dobbs’ father fact, approximately the bank lost as a pro- later testified that he used result Dobbs’ unauthorized cattle sales. pay family expenses. ceeds to ranch and permit These actions the inference of intent A reasonable could find from the to defraud. Intent to defraud is established evi- presented if the dence at trial that commit- defendant acted with the intent Dobbs by selling deceive order to cause financial loss to ted bank fraud his children’s collat- 3. The children's debt to the bank was later set- tled a relative of the Dobbs. money laundering counts cattle, Dobbs One own with his cattle. As

eral deposited approximately charges that Dobbs the sale of surreptitiously used into his proceeds cattle sale and pay for ranch $4500 cattle to children’s above, Dobbses had de bank account. The Dobbs’ wife’s As we stated family expenses. opera main the account as their cided to use at risk of loss put the bank diversions money was used to gain. From account. The financial his own tional return for actions, juror ordinary expenses find of the ranch could a reasonable these to de- The other requisite intent household. had the that Dobbs converted a cattle charges that Dobbs count fraud. $37,000 into a approximately sale check for CONVIC- LAUNDERING III. MONEY $37,000 and then convert cashiers check for TIONS separate cash cheek into four ed the cashiers checks ier’s checks. These smaller cashiers there is insuf contends that family pay for ranch and then used to were him to convict in the record ficient evidence government concedes expenses. The money laundering. Under of the funds to records reflected use statute, § 1956: laundering 18 U.S.C. family expenses. These pay ranch Whoever, in knowing that the property open notorious —at were transactions represents transaction in a financial volved transac typical bank least as much as form of unlawful proceeds of some did not use tions can be. Dobbs also conduct attempts to activity, conducts or purchases or otherwise parties to make third in fact which a financial transaction such identity making when the transac hide his specified unlawful involves tions. activity— (B) is de- knowing transaction that the Sanders, F.2d 1466 In United States part— signed in whole or (10th Cir.), 502 U.S. nature, (i) disguise the to conceal (1991), the defen 116 L.Ed.2d S.Ct. location, source, ownership, or convicted of dant had been specified the control the first car purchasing two cars. On activity; ... unlawful and her husband the defendant purchase, impris- a fine ... or sentenced to shall be ordering the deposit cash when paid a $500 twenty years, or more than onment for not delivered, ear was Sanders the car. When both, [emphasis ours]. $10,000 by credit in cash and paid $3535 specific prove that the government must The pur car On the second union bank draft. designed, at question in were transactions chase, Lincoln traded an old the defendant money. United part in to launder least $11,400 in for the cash a new one with for 1469, Garcia-Emanuel, 14 F.3d in

States had the defendant The trade-in difference. Cir.1994). (10th necessary to show It is 1474 name daughter’s in put the car her salesman legiti appearance the a to create desire pur the daughter’s name to signed the the na or otherwise to conceal wealth mate conspicu The cars were agreement. chase the might it enter funds so that ture of husband and her ously by the defendant used States economy legitimate funds. United with of the vehicles making the association (10th Dimeck, 24 Cir. F.3d v. enforcement. obvious to law Sanderses the 1994). purpose of the The very purpose of that the court held The transactions to reach commercial statute is transac- commercial (at was to reach disguisé the statute part) to least in intended disguise part in at least tions intended purchased with relationship of the item with the purchased relationship of the item and that providing person pro- illegally obtained providing the person were purchase to make the proceeds used . 1472;. also, v. United States at see ceeds. Id. illegal United activities obtained from (5th Gonzalez-Rodriguez, 966 F.2d Sanders, 1466, 1472 F.2d States Cir.1992) holding (citing in Sanders this Cir.), 112 S.Ct. 502 U.S. cert. that the fact (1991). court found approval). The 143, 116 L.Ed.2d Chevron, U.S.A., present at defendant and her husband were discretion. Williams v. (5th Cir.1989). Inc., purchases readily and were 875 F.2d the car identified by person plus respective sales the fact find merit in We no this contention. The conspicuous in that the cars were used district court allowed the admission of the provided sup- manner an insufficient basis to specifying loan into summaries evidence port money laundering. a conviction for they only were accurate as to June Sanders, Similarly 929 F.2d at 1472-73. Pursuant to Fed.R.Evid. the contents this case where the not use may of voluminous financial documents be disguised purchases family and the were for presented summary. in the form of a With expenses expenses and business is not dis- imposed upon by the limitation the exhibit puted, there is also insufficient evidence to court, the district the loan summaries were support conviction. incomplete. neither inaccurate or We find government argues no abuse the district court’s discretion in showing admitting the record that Dobbs did not dis- the loan summaries.

close these transactions to the bank or to his attorney bankruptcy provides a V. CHALLENGE TO THE reasonable DISTRICT basis to find the transac- COURT’S CONDUCT designed origins tions were to conceal the Dobbs contends that the district disagree. the funds. We This evidence in participated during court in trial the exami only provides showing the record a basis for partisan nation of his witnesses as to be a engaged type the defendant was in some government. In determining whether a There is no link between this fraud. overstepped district court the bounds of ac specific evidence of fraud and these transac- judicial conduct, ceptable must Court tions, Garcia-Emanuel, 14 F.3d at proceedings view the aas whole. United disguise that the transactions were done Williams, States v. 809 F.2d relationship pro- between Dobbs and the Cir.), 484 U.S. Sanders, at ceeds. 472.4 As stated 98 L.Ed.2d 187 by Garcia-Emanuel, the Tenth portions We have examined the “[mjerely engaging in a transaction with the record referred to the defendant money whose nature has been concealed entirety. and the record its A careful through other means is itself a crime.” reading of the record reveals that the district 14 F.3d at 1474. during court took an active role the trial interjecting questions often comments and on IV. EVIDENTIARY CHALLENGE both sides of the case. A federal district Dobbs contends that the district may evidence, question court comment on the in admitting court erred into evidence sum witnesses, adduced, bring yet out facts not maries loans to Dobbs’ children. pace by and maintain the of the trial inter These summaries showed that the bank had rupting or setting limits on counsel. time $40,000 argues suffered a loss. Dobbs Wallace, United States v. 32 F.3d incomplete these summaries were because (5th Cir.1994). case, questions this the $31,000 paid had been to the bank as a by and comments made the court served to settlement the debt and the settlement clarify confusing questions lines and con summary. was not in reflected the Under tentions offered both counsels and wit may Fed.R.Evid. be excluded nesses. We find no merit in contention. this probative from trial if its value is substantial ly outweighed by danger preju the of unfair CONCLUSION dice, issues, misleading confusion of the or to jury. reasons, the The district court’s foregoing decision to For the we REVERSE money admit evidence is reviewed for an abuse both of Dobbs’ convictions for laun- money challenges 4. Because we have reversed the launder- made to the convictions. convictions, ing we do address not the other here; however, the at issue dant is not fraud for bank dering. convictions Dobbs’ money the cattle the is because col- source of disposing of FmHA fraudulently and mortgaged to the bank. that were sold were AFFIRMED. lateral are only prohibits not 1956 of Title 18 Section GARZA, Judge, Circuit EMILIO M. involving pro financial transaction dissenting part: in concurring part in activity designed in whole of unlawful ceeds ownership also to conceal the but part or in except majority opinion, in the I concur Indeed, activity.7 specified of the the source money laundering convictions. Part III —the argu made the same other defendants have out: majority points As the is, makes; that that Dobbs ment money counts One the transactions and open association with approxi- deposited charges that Dobbs element of negates the intent proceeds cattle sale mately $4500 in money laundering statute. The courts account. The Dobbs bank into his wife’s cases, however, rejected the defen those their the account as to use had decided 1956(a)(B)(i) “§ argument, because dants’ money was The operational account. main attempt require an to conceal does not ordinary expenses of the to used defendant; a scheme that identity of the The other and household. ranch falls only the source of the funds conceals con- charges that Dobbs laundering count the statute.” United purview within approximate- check for a cattle sale verted (2d Kinzler, 70, 73 Cir. 55 F.3d States v. $37,000 check for ly into a cashiers 1995).8 Indeed, has Circuit itself the Tenth into check then converted cashiers holding apply limited explicitly Sanders’ These checks. separate cashier’s four identity was at the defendant’s eases in which used to cheeks were then cashiers smaller issue, the defendant cases which but family expenses. pay for ranch and proceeds: the source of sought to hide Majority op. at 5668. that, according to the we noted In Sanders history, Congress intended that legislative v. Garcia-Emanuel5 Both United States money laundering “include statute Sanders,6 Tenth two States and United designed conceal the identi- transactions majority heavily cases on which to the transaction.” ty participants stemming relies, money laundering cases are in the statute requirement no ... We find cases drug sales. The issue both every Sanders structured “the transactions were whether by evidence supported must be conviction identity.” The court conceal Defendant’s identity of the to conceal of intent distinguish be- struggling to those cases was transaction. Even participants money spending and mere tween made no efforts though the defendant signif- are laundering. facts of this case ..., identity evidence suffi- conceal his identity of the defen- icantly different. The Manarite, Cir.1994). United States v. 8.Accord 14 F.3d 1469 (9th Cir.) (rejecting argument that laun identity Cir.), required to conceal dering intent statute F.2d 1466 6. 929 holding attempts conceal source of 116 L.Ed.2d element), cert. intent satisfied U.S. —, L.Ed.2d S.Ct. states as follows: 7. The section — Dimeck, (1995); 24 F.3d States v. 854 United Whoever, knowing property that the involved 1239, (10th Cir.1994) pur (explaining that 1246 pro- represents the a financial transaction on “characteristics pose is to focus of statute activity, con- unlawful of some form of ceeds obliterated, which, allow ille concealed or when attempts such a financial to conduct ducts or passed commerce as gal proceeds into to be proceeds in fact involves transaction which easily”); States legitimate proceeds United more knowing activity that specified ... unlawful of Cir.1993) (h 818, (5th Alford, 824 999 F.2d v. part designed oldi in whole or the transactions is if transactions nature, ng is shown that intent element disguise the the loca- ... to conceal nature, disguising the purpose source, "the of tion, were for ownership, control or the proceeds”); Hollen- and control of location proceeds.... (7th States, added). 1278 (1988) F.2d 1956(a)(1) 987 (emphasis back v. United § 18 U.S.C. 400 (5th Cir.1995)

ciently supports the inference that a con- F.3d (noting 1385 that occurred in another cealment sense. The series of unusual financial supports moves designed conceal); finding [transaction] was conceal the of intent to Hollenback v. illegal proceeds (7th States, source of the from those United 987 F.2d 1279 Cir. 1993) likely expose the who would defendant’s (stating deposits payments that underlying fraudulent activities. small amounts rather than entire sum satis payments fied intent element because were Lovett, United 964 F.2d States — “irregularly structured transactions that Cir.), denied, U.S. —, cert. 113 S.Ct. were calculated to mislead (1992).9 observers as to 169, 121 L.Ed.2d 117 the size of the transactions and the actual Accordingly, the conclusion that there is used”). of nature the funds money laundering insufficient evidence of solely count, based on evidence that “the use of the In placement the other whether of money disguised purchases was not money were proceeds from cattle sales into Dobbs’ family expenses expenses” and business probative money wife’s account is launder target. question is not on I therefore wheth- ing least, question. is a closer At deposit “undisguised er that use” of the proceeds of these into his wife’s account was money probative of Dobbs’s intent to con- unusual under the facts of this case. The activity ceal the source of the unlawful Eighth Circuit as well as our own has found —the mortgaged proceeds sale of cattle whose be- deposits into an account other than the de longed to the bank —which is the material personal fendant’s account sufficient to show view, my issue before In us. the conceal- an intent to conceal. See United States v. ment on which should focus is not the we Willey, (noting 57 F.3d at 1385-86 that de identity of the defendants as in Garcia-Em- posits support into business finding account Sanders, anuel and but the source of the conceal); West, of intent to United States v. money deposited into the Dobbs’s bank ac- (5th Cir.) 22 F.3d (holding that Accordingly, counts. because the cattle sales deposits illegal proceeds girlfriend’s into activity,10 created of an unlawful we statute), account satisfied must focus on what he did — after these sales. denied, U.S. —, 584, 130 cert. 115 S.Ct. (1994); Sutera, L.Ed.2d 498 count, United States v. attempt In one to conceal Cir.1991) (holding 933 F.2d that proceeds by purchasing the source of these deposit gambling into business cashier check without the name (the barn) is, support account sufficed to intent to my the remitter launder money); opinion, probative money Peery, laundering. United States v. 977 F.2d cf. (8th Cir.1992) 1230, 1234 changing (holding combination of that act with defen separate check into four dant’s checks of lesser transfers between accounts satisfied concealed), though identity amounts to hide the total amount of intent element even — is, denied, my opinion, U.S. —, cattle sale sufficient for t. 113 S.Ct. cer (1993).11 Willey, conviction. See United States v. 122 L.Ed.2d 734 1993) (stating Cir. Edgmon, statute covers more than 10. See United States v. 952 F.2d (10th Cir.1991) identity). (stating improper intent to hide 1209-10 FmHA-mortgaged sale "pro cattle created illegal activity”), ceeds of an cert. 9.The court clarified further: —U.S. —, (1992); 112 S.Ct. 120 L.Ed.2d 906 cf. To find that the statute is West, (5th Cir.) United States v. solely designed aimed at those transactions (holding underlying bankruptcy that transactions identity participants conceal the produced "proceeds activity”), fraud of unlawful ignore language transaction is to the broad — —, short, the statute.... launder- L.Ed.2d 498 ing solely statute is not aimed at commercial disguise Moreover, transactions intended to the relation- supports the evidence as a whole ship purchased person of the item with the finding Willey, of intent on this See count. providing proceeds; ("[I]t the statute is aimed necessary F.3d at 1386 is not broadly designed at transactions in whole or in regard any single transaction that the defen- part disguise to conceal or manner dant removed all trace of his involvement with nature, location, source, ownership or control particular or that transaction activity. charged highly of the of unlawful is [and] itself unusual ... it is not Lovett, necessary 964 F.2d at wholly 1034 n. 3. that a transaction be examined Sanders, drug the In used mon- of Garcia-Em- defendant A close examination even Sanders, majority ey on the purchase and which to two vehicles. 929 F.2d at anuel relies, rather than supports the conviction personally 1471. “The handled Sanderses majority acquittal Dobbs. The cor- the of to and purchase the transaction the Volvo and points that in 10 of rectly out Counts readily by salesperson the were identified Garcia-Emanuel, the defendant withdrew they with whom dealt.” Id. This transac- “ $9,000 drug from his bank account tion was described as a ‘normal cash trans- ” on which he purchase a cashier’s check to Although action.’ Id. the Sanderses payment to on a named remitter make was placed daughter’s title of the Lincoln their 1476. mortgage. 14 F.3d at The residential name, paid they traded in their old car .and that use of a cashier’s Tenth Circuit held this “All the the difference cash. three of concealment. was insufficient cheek readily by Lin- were identified Sanderses Clearly, most of these transactions fall Id.12 salesperson they coln Id. with whom- dealt.” “money as category spending” of under Furthermore, Lin- “[b]oth the Volvo and the “money laundering,” but is opposed this conspicuously by coln were used the Sand- identity was the the defendant’s because again erses.” Id. The held Tenth to be concealed. item had support that the evidence was insufficient to conviction, although a it stated that the Lin- however, the court held that In Count case,” “presents coln a be- purchase closer purchase some with a cashier’s of land might an intent to hide be- cause one infer on which the defendant’s restaurant check daughter’s identity. In hind the Id. at 1472. listed remitter was sufficient docu- was as case, placed this mentary support finding a of evidence four in his ac- In unmarked checks wife’s bank deception. at Count Id. 1476-77.13 bought previous course of action unlike his the defendant first a CD cash count —a checks; change for a to handling then used the CD as collateral loan of sales this company partially owned. an insurance he probative of is concealment. method by court as “classic This was described Thus, this I would affirm the conviction on laundering” because the defendant count. transactions, “through complex a series summary, In Dobbs’ eventual use selling the cash he received transform[ed] notorious,” may “open have funds been and drugs legitimate into invest- a business op. at not an- majority but does 1477. is a ...” Id. at This similar ment. question whether the manner swer the used to to that which Dobbs hide scheme accounts he moved the funds his which proceeds in this of the cattle sales source an to conceal the source demonstrated intent case. an structure to the transac- to show that it is dence "of unusual in isolation if the tends it, tion, designed surrounding larger secrecy or of part of a scheme that is to con- undue illegal proceeds.”). upon attempt ceal was to avoid attention” insufficient which to convict. Id. conclusion on other counts was 12. court's pay- Count made a the same. In he second Indeed, purchased 13. in Count Garcia's wife land, again using a ment on some cashier’s check $20,000 drawing a Paso Fino horse another Again which was named as remitter. on he joint checking from a account which check In held this evidence was insufficient. court $7,000, separate checks in the amounts of three a Count $15,000 Defendant made no effort conceal $8,000 $8,000, deposited been the week had payment partial cash for a Paso Fino (B)(ii) case, gov- Although straight a before. payment In he a similar horse. Count made (B)(i). prosecuted Al- the case under ernment 18, 19, In Counts as in Count 14. un- though ”[t]he court inference stated purchased parapher- horse he horses other theory, design that the to conceal der this which with cash or checks on his name nalia (the purchase the cashier's transaction first again appeared. count there insuffi- (the check) pur- imputed be to the second can Gar- because cient evidence weaker,” horse), considerably Lastly, chase of appeared in Count cia 23, remitter. that "this is evidence a court nevertheless held wired Garcia to Florida bank design at to conceal.” Id. without evi- account a Columbian national improper funds —the sale of cattle.14 those simply I am not convinced that the Govern- case on

ment did not its these Accordingly, respect-

laundering charges. I

fully reversal dissent from the

money laundering convictions. TECHNOLOGIES,

MKK INC./NORTH CONSTRUCTION, a

STAR Joint

Venture, Plaintiff-Appellant,

Wayne SCOTT, Individually and Execu Director, Department

tive Texas al., Justice, Defendants-Ap et

Criminal

pellees.

No. 94-10821. Appeals,

United States Court Fifth Circuit. Stephen Yungblut Salazar, K. Terry L. P.C., Nelson, Dallas, TX, & appel- Ford Aug. 1995. lant. Thompson, Atty. Gen., Terrence L. Asst. Morales, Gen., Austin, Atty. TX, and Dan appellees. PARKER,

Before HIGGINBOTHAM and Judges, McBRYDE, Circuit District Judge.* HIGGINBOTHAM, PATRICK E. Judge:

MKK sued Depart- officials the Texas they ment of claiming Criminal Justice de- prived procedural process it pre- due venting timely resolution its contract dispute with the of Texas. The State district Indeed, ..., may "open Dobbs' and notorious” use hidden statute does launderer, require inept show that he was but to find that [the defendant] an good job proceeds.”). necessarily it did a negate does not conclusion * Sutern, money. Texas, he laundered Judge, See 933 F.2d at District of the Northern District of ("While might by designation. sitting have better been

Case Details

Case Name: United States v. James Larry Dobbs

Court Name: Court of Appeals for the Fifth Circuit

Date Published: Oct 11, 1995

Citation: 63 F.3d 391

Docket Number: 94-40606

Court Abbreviation: 5th Cir.