United States v. James M. TurnerUnited States v. James M. Turner
Jаmes Turner was indicted for conspiracy to launder money, in violation of
I. Background
James M. Turner was a friend of Clyde D. Hood’ who masterminded the Omegа fraud. We discussed the scheme at length in United States v. Diamond, from which we now quote.
In 1994, Clyde Hood, a man who claimed to be one of only eight people experienced enough to trade international “Prime Bank Notes” announced that he had received a message from God who told him to use his expertise in the secretive and lucrative trading of Prime Bank Notes to “help the little people.” Accordingly, Hood would allow investors to make as many hundred dollar loans as they liked to Omega Trust and Trading, Ltd. The money would be used to facilitate, trades in Prime Bank Notes. Each unit, at one hundred dollars a piece, was promised a fifty to one return in less than a year. Furthermore, an investor could roll over their profits by reinvesting them into Omega, guaranteeing millions of dollars in return for a small initial investment.
That was the pitch. Like most things that sound too good to bе true, it was; it was a scam. Hood was actually a retired electrician who had come -up with the idea for a Prime Bank Notes scam through his association with other scam artists. Sad to relate, God had not spoken to Hood. The whole thing was .completely fabricated.
Nevertheless, Hood worked hard in creating an image of legitimacy. . For example, he created a database of thе investors to facilitate communication between the investors (more properly, vie-tims) and himself. Later, he set up a recorded message hotline to keep investors up to date on the status of Omega. The status of Omega was always the same; pay-out was just around the bend. Other written communications stated the same, often times including religious references and biblical quotations.
To accоmplish this fraud, Hood enlisted the help of others. These individuals would market the scam and explain to potential investors that they could join Omega by sending their monies to Clyde Hood in cash, money order, or cashier’s check. The investor would then receive a “Private Party Loan Agreement” that purported to represent their interest in the Omega funds.
United States v. Diamond,
The entire Omega conspiracy loss was estimated at аround thirteen million dollars. With all of this money, Hood and the other conspirators needed a way to launder the proceeds of the scam. They did so in a number of ways. For one thing, they simply deposited Omega funds in personal or business bank accounts controlled by Hood’s associates. These associates would then, at Hood’s direction, withdraw the funds in cash and give it to whomever Hood designated. Another method of laundering Omega proceeds was to give interest-free loans to various individuals. This is how Defendant Turner entered the story.
In early 1997, Hood offered to lend Turner $97,000 interest free. Shortly after offering the loan, Hood presented Turner with $15,000 in cash and nine $9,000 cashier’s checks. The checks were payable to William Revelle but Hood endorsed them over to Turner by signing Revelle’s name to the checks. Hood gаve Turner some advice — Turner was not to deposit the cheeks in any of the local banks for fear that those banks may question the source of the funds. Hood also explained that any transaction over $10,000 would be reported to the Internal Revenue Service.
Upon receiving the money, Turner executed a Promissory Note and Mortgage on 2913 Walnut, Mattoon, Illinois (‘Walnut property”), as security for the loan. The documents named Patricia Hood, Hood’s wife, as the lender, who was entitled to eight hundred dollars per month in repayment of the loan. Turner regularly made these payments.
In late 1997, Hood again “loaned” Turner a large sum of money to purchase land located at 3120 Marshall, Mattoon, Illinois, and various trucks and equipment for Turner’s landscaping business (“Marshall property”). Turner paid $146,000 for the property, trucks, and equipment. The interest-free loan was to be repaid on a monthly basis to Patricia Hood in $1,300 increments.
In early 1999, Turner wanted to purchase a house at 3900 Western Avenue, Mattoon, Illinois (“Western property”). In need of approximately $156,000, Turner again obtained an interest-free loan from Hood. This time, Turner, Hood, and Chris Engel, one of Hood’s co-conspirators, went to Hood’s daughter’s house to get the funds. While there, Turner and Engel watched as Hood removed approximately $156,000 in cash from a safe in the garage. When he gave the money to Engel, Hood informed him that he should take the cash to an out-of-town bank and purchase a cashier’s check. Engel ultimately obtained a check from a bank in Farina, Illinois where he named the remittor as Advantage Information Technologies. Turner then used the check to complete the purchase of the Western property.
Hood testified that the money used for these loans was obtained from Omega proceeds.
Turner’s involvement with Hood did not end with the above-described transactions. In addition to the loans, Turner allowed his name to be put on the titles of various properties that Hood had purchased, performed collections for Hood, delivered thousands of dollars of Omega money in cash to various persons, instructed others to structure deposits to avoid the attention of the IRS, structured deposits into his own bank account, and instructed others to destroy documents recording loans Hood had made.
Turner was ultimately indicted together with nineteen other individuals involved in the Omega scheme. Turner and Arlene Diamond were the only two who pleaded not guilty and went to trial. Turner was convicted of conspiracy to commit money laundering. Thе district court sentenced him to one-hundred-fifty-one months imprisonment and two years supervised release. This sentence was based on the entire amount of money involved in the Omega conspiracy. Turner appeals.
II. Discussion
Turner takes a buckshot approach to this appeal, arguing nine full issues with subparts. We will address only those arguments which merit discussion.
A. Sufficiency of the Evidence to Convict for Conspiraсy to Launder Money
The first issue we address is an attack on the sufficiency of the evidence. The relevant question on appeal is whether any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt. We reverse only when the record contains no evidence, regardless of how it is weighed, from which a jury could find guilt beyond a reasonable doubt.
To prove a conspiracy to launder money, the government must “demonstrate that [the defendant] was knowingly involved with two or more people for the purpose of money laundering and that he knew the proceeds used to further the scheme were derived from an illegal activity.”
United States v. Gracia,
As we noted in Diamond,
When a defendant joins a conspiracy, she joins an agreement rather than a group. United States v. Townsend,924 F.2d 1385 , 1390 (7th Cir.1991). An agreement need not be explicit; a tacit agreement is sufficient to support a conspiracy conviction. United States v. Clay,37 F.3d 338 , 341 (7th Cir.1994). There is no bar to using circumstantial evidence in proving the agreement. Id. A conspiracy may be shown by evidence which shows that the conspirator embraced the criminal objective of the conspiracy. United States v. Severson, 3 F.3d 1005 , 1010 (7th Cir.1993).
Diamond,
Within this legal framework, it is clear that Turner was part of the conspiracy to launder money. Under this court’s decision in
United States v. Esterman,
Turner’s argument that the government failed to show concealment because his name was often used in connection with these transactions misses the mark. Turner’s identity was not the one the conspiracy was attempting to conceal, as he was not the source of the ill-gotten funds; it was Hood. The entire reason for using Turner’s name was to conceal Hood as the source of the funds.
The next relevant question is whether Turner knew that the money involved in his various transactions were the proceeds of an illegal act. Notice that, the question is not whether Turner knew the
actual
source of the funds, merely whether he knew they were the proceeds of
some
illegal activity.
See United States v. Marzano,
Numerous transactions and aspects thereof show Turner’s knowledge. First, the vast majority of the money involved in the Walnut property loan came in the form of structured checks made payable to William Revelle. Turner watched Hood endorse these checks with Revеlle’s name. Turner was also instructed not to deposit the money in a local bank for fear that local banks may have questioned the source of the funds. He .was also instructed to structure the deposits to avoid scrutiny by the I.R.S. The convoluted nature of the Marshall property transaction also illustrated that something was amiss. The Western property transaction was similarly suspicious. Turner watched Hood rеmove $156,000 in cash from a safe in Hood’s daughter’s house. After receiving this money, it was taken to another out-of-town bank to be converted into a cashier’s check. There is more.
Along with other shady acts, such as repeatedly putting the title of Hood’s property in Turner’s name, delivering large sums of cash, installing bug-detection de
Looking at all of this evidence in combination, it is silly to suggest that Turner did not know that he was dealing with ill-gotten funds. Any reasonable person watching all of these strange dealings would clearly believe something was amiss.
B. , Internal Revenue Service Agent Hinesley’s Testimony
1. Admissibility of Summaries and Underlying Bank Records
Turner next says that “[t]he court erred in admitting summaries of Turner’s bank records and ‘expert’ testimony of I.R.S. Agent Hinesley.” Agent Hinesley analyzed the bank records of Turner and his wife for the yеars 1995 through 2000. As such records were “voluminous,” Hinesley prepared summary charts as permitted by
Claims of error in admitting evidence are reviewed for abuse of discretion.
United States v. Spiller,
Turner does not argue that the summaries were inaccurate or that they were improperly created. Instead, he continues to argue that the underlying bank records are irrelevant and overly prejudicial. He buttresses this argument by stating that the vast majority of the money was totally unconnected to the Omega scheme. Suffice it to say that the bank records were not irrelevant.
The case was one involving money laundering, or the concealment of funds. Evidence which showed, for example, that Turner’s unexplained cash deposits into his bank accounts exceeded his reported income has a “tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence.”
Next, Turner argues that the summaries, and the underlying records were overly prejudicial under
Having found the evidence to be relevant and noting that Turner does not claim that the records or summaries werе inaccurate, we find that the district court did not abuse its discretion in admitting the summaries. We give special deference to a district court’s assessment of the balance between probative value and prejudice because that court is in the best position to make such assessments.
United States v. Brown,
2. Expert Testimony under
Turner argues that I.R.S. Agent Hinesley testified as an expert when she testified that certain transactions seemed to be struсtured to avoid I.R.S. reporting requirements and about a “typical money laundering conspiracy.” There is no dispute that Hinesley was technically qualified to testify as an expert; her qualifications are found throughout her testimony. Turner’s complaint in this respect is that the court failed to exercise its “gatekeeper” function. Because the record indicates that there is no question that Hinesley would have been accepted as an expert, we find any error in tacitly admitting her as an expert to be harmless. 1
Turner’s next argument is that the testimony that Hinesley gave amounted to nothing more than an opinion of guilt. We treat this claim as an argument premised on
Because
The remainder of Turner’s complaints with respect to Hinesley’s testimony all go to the same issue; whether certain questions were improper because they touched on Turner’s mens rea. We decline to address these issues beyond noting that Turner himself opened the door to such questions оn cross-examination.
C. Sentencing
Turner argues that the court erred in imposing his sentence based on
In determining relevant conduct under the Guidelines, a defendant engaged in a jointly undertaken criminal activity is liable for all reasonably foreseeable acts performed in furtherance of the jointly undertaken criminal activity. U.S.S.G. § 1B1.3. However, “[a] defendant’s relevant conduct does not include the conduct of members of a conspiracy prior to the defendant joining the conspiracy; even if the defendant knows of that conduct.” U.S.S.G. § 1B1.3, comment. (n.2(ii)). So, the relevant question asks when Turner joined the conspiracy-
There is no evidence which points to Turner having entered the Omega conspiracy at its outset in 1994. The government’s argument about the “cumulative” evidence does not support such a proposition. The cumulative evidence supports the conviction; that he entered the conspiracy at some point; that is not enough to hold Turner liable for the entire Omega loss.
The district court presumed that the jury’s guilty verdict for the money laundering conspiracy supported a finding that Turner was engaged in the conspiracy during its entire life span. The indictment for conspiracy included over fifteen people. The fact that Turner was convicted of participating in the conspiracy is not a finding of precisely when he joined.
Subsequent tо the briefing and oral argument in this case, the Supreme Court ruled that the Sixth Amendment is violated when a sentence that has been enhanced under the Guidelines based on the sentencing judge’s determination of a fact (other than a prior conviction) results in a sentence that exceeds the maximum authorized by the facts established by a guilty plea or a jury verdict.
United States v. Booker,
— U.S. -,
In this case, Turner’s sentence was enhanced by the judge’s findings that he obstructed justice, that the money laundering was sophisticated, and that he was accountable for the entire amount of money laundered in the conspiracy. These enhancements exceeded the maximum authorized by the facts established by the jury’s verdict. The judge treated the Guidelines as mandatory аnd sentenced Turner accordingly.
Turner’s sentence is vacated and remanded for resentencing because of the error in imposing his sentence based upon the total amount of laundered money. Upon remand, the court should resentence in light of the principles set out in Booker.
The other issues raised by Appellant are without substantive merit and will not be discussed.
Affirmed in part, Reversed and ReMANDED in part
Notes
. Turner failed to raise the issue of the government’s failure to inform him of its intent to call an expert in his opening brief. The issue is waived.
United States v. Collins,