United States v. Upton

3 (Fed.Cir.2003) (finding unjust of MEEI’s confidential informa- dismissal of QLT’s use appropriate causal factor in the enrichment claim where infor tion was a substantial mation was not trade secret and defendant QLT-CIBA partnership. no obligation under to maintain confi Boats, nor the other Neither Bonito Indeed, dentiality). Supreme Court QLT preclude on which relies precedents suggested has that states should continue recovery a conclusion is estab once such regulate just to these sorts of less-than- QLT’s liability from its ex lished. stems upright practices, they business even if it ploitation of information that obtained incidentally property involve intellectual confidence, pursuant to a confidential dis may subject and information that be permis and agreement, closure received Boats, federal patent laws.3 See Bonito through compen to disclose offers of sion 156, 109 489 at 971 (citing U.S. S.Ct. Aron published articles or sation —not Quick Co., son v. Point Pencil 440 U.S. presentations ophthalmology at confer 257, 262, 99 59 S.Ct. L.Ed.2d 296 Thus, QLT’s liability flows from its ences. (1979)). than savory practices less business rather Accordingly, with this clarification of our public than its reliance on domain sources decision, QLT’s petition rehearing of information. This is not the stuff of Co., denied. preemption. Kewanee See Oil 480-81, (declining at

U.S. S.Ct. 1879 preempted trade secrets statute

find Ohio alia,

because, necessity inter “[t]he honest, dealing faith and fair is the

good

very spirit life and of the commercial

world”) (internal omitted); quotation see America, UNITED STATES Inc., 155-56, at also Bonito Boats 489 U.S. Appellee, (reaffirming authority S.Ct. v. regulate prop use of intellectual states UPTON, Defendant, George L. law); erty not inconsistent with federal Appellant. Pacific, ConFold Inc. v. Polaris Indus No. (7th tries, Inc., 952, 956, 05-1593. 433 F.3d 959-960 Cir.2006) (finding unjust no enrichment Appeals, United States Court of on misuse of confidential informa based First Circuit. permit tion not where Wisconsin law did April Heard 2007. action, plaintiff such cause of failed Decided March competition plead unfair or secret mis law); appropriation under Wisconsin Wan Co.,

er Ford Motor law, preemption, Supreme eventually sought protection patent In order to find QLT Court evaluates a state law three dimen exploit were free to of Dr. and CIBA (1) it sions: whether hinders the federal ob published after, it Miller’s research became invent, (2) jective providing an incentive to available, chose, freely they if so and Dr. whether it inhibits full of inven disclosure eventually published, Miller's research was tions, (3) whether it removes from the Supreme might lead the concerns public domain that which the states lack the sufficiently preemption Court to find are not Co., authority to remove. Oil Kewanee implicated preempt Massachusetts un- 480-82, 1879; U.S. at 6 Donald S. action, just applies as enrichment cause of it Chisum, Patents, 19.03[6][l], Chisum on to this case. (2007). Where, here, 19-416 inventors Klibaner,

Richard B. with whom Kliban- Sabino, appellant. was on er & brief Romano, Attorney, John-Alex Criminal Division, Department of United States Sullivan, Justice, with whom Michael J. Attorney and F. United States William Bloomer, States Attor- Assistant United brief, appellee. ney, were on LYNCH, LIPEZ Judge, Before Chief HOWARD, Judges. Circuit HOWARD, Judge. Circuit George Upton A of con- jury convicted money laundering. commit spiracy to that, by argues he the time appeal, indictment, limitations his the statute of except of his conduct period had run on all tax return and the filing for the of a false failure to file a tax return. asserts that, governing Supreme Court under abili- cabining government’s precedent conspiracies based ty charge continuing two tax subsequent cover-up, acts of not offenses were he contends both premise From this instruction on the he was entitled to limitations and that the evidence Queen statute of suitcase from the car. When re- him of conspira- was insufficient to convict turned to Look Motors and discovered that cy applicable missing, Up- to launder within the suitcase was he accused stealing money. Upton He also claims that ton of period. limitations denied Queen admitting hearsay district court erred accusation and told to leave. Distraught, Queen apartment as an excited statement utterance. We went of a affirm.1 friend and told her that the he parents gone. had taken from his I. Queen stealing accused occasions, money on several con- public Background A. Facts Upton Queen frontations. did not admit to purposes assessing For of the sufficien- money. During he had taken the claim, cy we in light recite the facts 1997, however, fall of Upton did admit to most favorable to the verdict. See United acquaintance an that he had a stolen suit- (1st 444 Boulanger, States v. $900,000 case with more than in cash from Cir.2006). Queen. In Alberico made the same Motors, Inc., Upton Look a owned used admission to her best friend. Hyannis, in car lot Massachusetts that sold 19, 1997, August On a month after the automobiles and offered financing to cus- theft, Upton signed purchase a and sale large tomers who could not afford to make agreement buy property located at payments. down In connection with this in Hyannis, Road Massachu- enterprise, he relationship had business $120,000. $12,000 setts for He made a Queen, a

with Steven lender. check; down payment by that check was 9,1997, July Queen On traveled to Flori- funds, Upton returned for insufficient and large da and removed a amount of cash replaced $12,000 it Upton with in cash. parents’ deposit Queen from his safe $108,000 box. paid purchase balance of the people plans had told several of prior his price with thirteen cashier’s checks. making trip, claiming that the mon- The cashier’s checks had acquired been ey was his inheritance. had heard stages, span several over the of three Queen’s trip purpose. about and its brother, days. Upton’s friends, two and a Upon returning from Florida on the eve- employee Look Motors assisted and 12, 1997, ning July Queen left a Upton provided suitcase Alberico. cash to these $900,000 containing Then, cash the trunk of people. person four each deposited parked a car that was in the Look Motors personal cash into his or her bank parking lot and went to dinner. Upton’s purchase account to one or more cashier’s daughter Queen saw place the suitcase in deposits checks. Most of the and checks the trunk of the car. $10,000 She told and were for sums less than and in- girlfriend twenty years, his Lynn Alber- multiple volved visits to bank branches or ico, Queen about the suitcase. multiple branch, While visits to the same in order dinner, Upton and Alberico removed the to avoid federal reporting requirements.2 case, argument 5313(a) 1. After oral in this § the Su- 2. Pursuant to 31 U.S.C. and 31 States, preme 103.22, Court decided. Cuellar v. United § C.F.R. domestic financial institu- - -, U.S. 170 L.Ed.2d required report currency are tions transac- (2008). pertinent The case is to the limi- $10,000 involving tions more than to the In- required tations issue raised and further con- ternal Revenue Service. sideration. capital gain the sale out to substantial variously were made The checks property. to Alberico. Upton or in the property title to the took Alberico History B. Procedural trust, created Trust.” That

name of “AU August grand indicted 29, 1997, closing, August day on and for Alberico Also Upton’s and initials. bears Alberico’s structuring and for financial transactions granted Alberico day closing, on the requirements, as well reporting to evade to “Bos- property on the mortgage a sham engage as for such struc- Florida,” which did not Trust of tonians 12, 2004, May superseding turing. On was then property then exist. even indictment added counts of $1,000per month. rented out for money laundering, commit violation property was Iyanough Road (h) 1956(a)(1)(B), 1957(a); §§ 18 U.S.C. 5, 1999, $202,000. On January sold materially false income tax filing a return attorney wrote January the real estate 1997, in the'year violation of 26 U.S.C. Upton and Alberico for checks to separate 7206(1); failing to file an income later, and, $39,850 each, than a week less 1999, in year return for violation Upton made out to bank checks purchased § U.S.C. 7203. $52,948.21 Bank each. for and Alberico five-year statute of general The limita- these checks were indicate

records 3282, tions, applies prosecu- 18 U.S.C. to of Look Mo- into the accounts deposited tions violations of the launder- for Alberico, January respectively, in tors and For ing structuring and statutes. reasons 1999. the appeal, filing to this the of not material May established superseding indictment federal eventually filed his 1997 Upton 12, relevant date for statute the 2000, July reporting in return income tax Prosecution for al- purposes. limitations time, $14,165. At the same income of total 12, prior to leged May crimes committed 1994, 1995, for he also filed returns by barred the 1999 was thus statute prepared by were 1996. of his returns All Accordingly, the district court limitations. accountant, pro- based on information his the counts carried over from dismissed the The 1997 return was by Upton. vided money laun- alleging original indictment any portion in that it did not disclose false en- dering, structuring and to $900,000 Queen, nor did stolen structuring. Upton, in gage any of the rental income portion it disclose Upton went to trial on F.Supp.2d 196. at partial Iyanough Road for the from 89 charges remaining tax return for year Alberico’s and the two tax commit neglected to August in also filed violations.3 money or any portion of the stolen report conference, Upton file a Upton charge income. did not During the rental jury a false on a request Alberico instruction return for 1998. filed did not to the con- again defense return October statute of limitations however, at day, next spiracy rental income. Neither The failing report count. completion government’s case filed a tax return for Upton nor Alberico chief, an request such instruction. earned a he did year which each separately July 2005. ously; tried she was tried in October 2004. Alberi- previ- granted co’s to sever had been motion judge request trial denied this on The standard of review. While he acknowl- edges had waived the request request basis he failed to a written charge conference, raise it at the instruction at failing charge Up- confer- presses ton completion govern- At the the fact that he raised ence. his objection case, charge after the unsuccessfully moved conference but ment’s instructed, jury before the acquittal again judgment the basis that after the instructions were money laundering conspiracy delivered charge this, jury. Beyond he asserts that even if jury After the was time-barred. had been preserved objection, he has not his evidence, at the close of the instructed give court’s failure to the instruction was Upton objected request to the denial of his plainly erroneous. See United States v. for a of limitations statute instruction. Thurston, (1st Cir.2004), 358 F.3d 51 va- again The court ruled that had grounds. cated on other right jury his to a waived instruction on the statute of limitations because he did appellant The is not entitled to relief on charge it at not raise conference. First, ground. the claim of error is unpreserved. requirements The for re- jury Upton guilty found on each of questing jury instruction are clear. Fed. the three counts: to commit 30(a) provides R.Crim.P. as follows: return, money laundering, filing a false tax Any party may a tax Following request writing and failure file return. verdict, the district court the court instruct Up- denied on the law as judgment specified request. ton’s renewed motion for in the request of ac- quittal, Upton, United States v. must be made at the close of evidence or (D.Mass.2005), F.Supp.2d time that the reasonably and sen- court imprisonment. tenced him to 162 months’ sets. added). (emphasis Upton concedes

II. he writing did not submit in a request for limitations; an appeals only instruction on the statute of Upton his conviction for indeed, acknowledges he to commit he withheld laundering. request jury for a challenge He does not instruction at the his convictions. conviction, charge conference as of his trial As to the he strat- claims egy. As he requirements district court did not meet the erred in not in- jury instruction, for a structing jury requesting on the his statute of limita- later tions; objections jury to denying erred instructions his motion for were acquittal by deemed waived judge. on statute of the trial grounds; limitations and abused its discretion in admitting a brings That question us to the of how to statement anas excited utterance. unpreserved treat jury instruction is- Muñoz-Franco, sue. In United States v. Jury

A. Instruction on Statute (1st Cir.2007), we held that of Limitations request jury the failure to a instruction Upton contends that the district constitutes waiver. The defendants court by failing erred jury to instruct the Muñoz-Franco claimed that the district on the statute of applicable limitations court instructing jury erred not on laundering conspiracy. limitations, He ar applicable statute of but gues that he preserved objection has they his had not raised that issue at time instruct, the court’s trial, failure to so prior and there to or during including in their 29(a) fore that harmless error is the appropriate post-trial Rule motion. We held that reputation judicial proceedings.” public and thus not re- waived their claim was Olano, 507 U.S. at 113 S.Ct. 1770 appeal. viewable on (internal quotation citation and marks Thurston, argues that Pointing to omitted). in this appropriate is plain error review necessary, It not F.3d at 63. is case. 358 plain court did not commit The trial however, any potential conflict to resolve jury declining error instruct and Thurston Muñoz-Franco 30(a) between the statute of limitations. Rule relin- the “intentional here. Waiver is clear, failed to meet its stric- a known or abandonment of quishment judge The district acted within her tures. Olano, 507 U.S. United States right.” deny Upton’s requested in- discretion to 725, 733, 1770, 123 L.Ed.2d 508 request was untime- struction because omitted) added). (1993) (citation (emphasis ly. jury a instruction can be right The instruction, requesting the

waived not Acquittal on B. Motion for Fed. objecting proper at the time. or not of Limitations Statute (d). 30(a), deliberately R.Crim.P. challenge Presented as a to the suffi of limita- request chose not to statute evidence, ciency Upton argues confer- charge at the tions instruction his granted the district court should have strategy.4 trial as a matter of ence on the acquittal motion to decline to exercise informed decision limitations count because the statute of specific jury instruction right request of this bars his conviction. essence an “inten- straightforward example of is a sufficiency claim is that there was no evi subject to waiver. relinquishment” tional that the continued to dence May years this an time that was within five we to consider Even were superseding fail indictment. and review the instance of forfeiture money laundering objec argues that the jury on the ure to instruct statute error, conspiracy was achieved no limitations would con tive of the plain we conspirators sold the later than when the plain that there was no error. Un clude January standard, property Road Upton must plain error der and his an failure to file a return for 1999 court committed His show that “the trial filing of a false tax return error, July and that 2000 ‘plain,’ that the error was were, acts says, he at most unilateral rights of 1997 affected the substantial the error the after up intended to cover v. Colon- appellant.” the United States (1st Cir.2006) v. Nales, 21, Relying on Grunewald (citing its termination. 464 F.3d 25 1770). 391, 963, 1 States, Olano, 732, 77 S.Ct. 353 U.S. 507 at 113 S.Ct. United U.S. (1957), Upton argues that the Further, only it L.Ed.2d 931 to be corrected if error is more fairness, must be viewed as no integrity or tax violations “seriously affects the parties ad- may charge must face the conference Upton points out that a defendant Here, charge consequences. when a conference the a difficult decision here face the to or government's held before the close of the day is the charge was the before conference might raising point case: a defense at that government the evidence in its case. closed government case alert the to a weakness in its entirely timing of the conference The encourage government addi and the to seek reasonable, explore applica- we need not and Nevertheless, the district tional evidence. presenting an tion of the rule to situations authority manage with court is vested the timing gap in between the conference extreme Saccoccia, 754, trials, 58 F.3d United States and the close of the evidence. (1st Cir.1995), setting including a time for 770 covering up than attempts completed A conspiracy long endures as such, conspiracy. As under co-conspirators Grünewald the endeavor to attain the they constitute acts in cannot furtherance “central purposes” criminal conspiracy. unewald, the 401, U.S. at 77 S.Ct. Gr case, 963. In this the charged indictment government counters that Grüne- conspired Alberico to vio prosecution. wald does not bar this Rath- 1956(a)(1)(B) late §§ 18 U.S.C. er, the indictment because con- 1957(a). 1956(a)(1)(B) Section prohibits the main spiracy which was engaging in financial involving transactions concealment, limiting princi- Grünewald’s the proceeds of unlawful activities: ple applicability no to this has case. knowing that the is de- transaction signed part— in whole or in (i) to disguise nature, conceal or the We review de novo the denial of location, source, ownership, judgment acquittal motion for based or the proceeds control of the speci- insufficiency on the of the evidence. Unit activity fied unlawful ... Hatch, (1st

ed States v. 1956(a)(1)(B) § 18 U.S.C. (emphasis sup- Cir.2006). judgment A motion for of ac plied). The focus of prohibition is thus quittal only if granted “the evidence and trained design on the to conceal or dis- all inferences to be drawn reasonable from guise. The concealment feature distin- evidence, both light taken most 1956(a)(1)(B) guishes 1957(a). § § government, to the favorable are insuffi 1957(a) Section prohibits monetary trans- cient for a rational factfinder to conclude in criminally actions derived property, but prosecution proven, has beyond a does not contain an element of conceal- doubt, reasonable each of the elements of ment disguise. or Pimental, the offense.” United States v. Supreme Court recently has (1st Cir.2004). 1956(a)(2) § examined language in that is To Upton’s determine whether motion identical language to the of the section at acquittal based on the statute of case, 1956(a)(l)(B)(i). limita- § issue — granted, Cuellar, tions should have been we look U.S. —, backward from the date of the superseding L.Ed.2d the Court considered wheth indictment and assess whether 1956(a)(2)’s evi- er certain conduct violated dence, light taken most hospitable to proscription against “transportation” verdict, was such that jury could proceeds with knowledge that the trans reasonably have concluded that portation con- designed to conceal or dis did not end until spiracy May guise nature, 1999 or location, source, owner Walsh, later. See United States v. 928 ship or of proceeds. control the The Court (1st 7, Cir.1991). 11-12 question emphasized The that in phrase the “designed “ boils down to whether the could jury have ... or disguise,” conceal ‘design’ supportably found that either or both i.e., of means purpose plan”; or the intended the tax offenses that in committed aim of transportation. the 128 S.Ct. at 2000 were part of the conspiracy, and the pertinent As the language of is Upton’s 1956(a)(1)(B) wrinkle assertion § that Grüne- is identical to that of wald requires 1956(a)(2)(B), us to view the tax violations we conclude that Con as acts cover-up beyond of scope gress’s of the “designed use of ... to conceal or conspiracy. (a)(1)(B) disguise” in requires likewise

11 rially false federal income tax return pur- was a prove that there government disguise. See receipt to conceal or ... that failed to declare the of plan or pose Inc., 561, Co., 513 Alloyd U.S. illegal v. income or the rental income Gustafson (1995) L.Ed.2d 1 131 in property from the 1997.” (“The statutory construc- rule of normal put Upton The indictment thus on no- used in differ- that identical words tion [is] tice, minimum, at a that his concealment of are intended to of the same Act parts ent Iya- of capital gain from the sale 89 also Finne- meaning.”); see have the same nough part parcel Road was Leu, 431, 438 n. 102 v. 456 U.S. gan alleged carrying means of out the (1982) (noting 72 L.Ed.2d S.Ct. conspiracy.5 To sustain its burden of intended identical Congress “if had that had to establish proof, government substantially different to have language in Upton conspired engage that transac- of the same meanings in different sections concealing tions with the intended aim of have manifested its it would enactment disguising certain attributes of the or fashion.”). concrete intention in some funds involved. And to avoid statute in conspiracy count the indictment bar, it prove of limitations also had to invoked the concealment explicitly in one of the tax offenses was furtherance of 18 laundering prohibition U.S.C. of the central 1956(a)(1)(B), Upton with the charging §§ conceal material characteristics intent to Determining the contours of the money. alleged, The indictment the stolen ordinarily is a factual matter carrying out as the “manner and means” largely jury. to the United entrusted defendants used conspiracy, that the (1st Moran, States multi-lay- monies to make the the stolen Cir.1993). allegations with the Consistent Iyanough Road purchase ered indictment, intro government 1997; commingled August duced evidence that and Alberico re- proceeds theft with business additional purchased property the 89 Road more than twen- ceipts of Look Motors on January it in August 1997 and sold 1997; ty during the remainder of occasions into cashier’s pair converted cash for that Alberico filed a false return purchase cheeks to finance the initial disclose the theft did not up mortgage, the sham property, set Iya- income from the income or her rental title in the name of “AU Trust.” and took and that: nough property; road commingled pro additional theft “It [de- Alberico filed ceeds with business income. dis- attempted to conceal or fendants] return, omitting the theft a false 1997 tax location, source, nature, own- guise Up rental income. Neither proceeds and illegal cash ership, or control of filed tax returns ton nor Alberico by failing to file income tax proceeds they re year which were 199 9 -the returns, capital gain or declare a gain on the sale. quired report capital of the commercial property, the sale reasonably evidence the From this Upton attempted tax year [and Upton’s have found that failure disguise] by filing a mate- could to conceal or conspiracy. any part In expressly allege the the sale was of the 5. The indictment did not event, Iyanough property Janu- sale of the Road claim of does not make transaction, ary 1999 as a that the sale variance and does not contest noted, did but as we have the indictment conspiratorial object. part was of the capital gain allege that the concealment 12 return was in furtherance of laundering conspiracy,

file the 1999 jury or so the could have found.6 objective of conspiracy. the central jury supportably Specifically, the could 2. that the failure to file have concluded his evidence, In the face of this ordinary 1999 return in the course facili- argues that imposes Grünewald a limita money concealment aim of the tated the ability tion on the subsequent acts That act laundering transactions. of omis- concealment to extend the life of a conspira special may significance sion have had bottom, cy.7 noted, At as we have in his jury, because 1999 return argument is that acts that constitute an only any not required was to disclose rent- attempt to cover up completed crime do al receipts capital gain but also he not extend the duration conspiracy. property. realized on the sale of the The Grunewald, 401, See at U.S. jury may significant have also found it that (it is not enough that the defendants Alberico, too, 1999, did not file return for “took care to up cover their crime in order contrary practice previous years. to her escape punishment”). detection and Ac capital gains they disclosures were cording Upton, his failure to file a 1999 easily required to make could have unrav- July tax return and filing his of a scheme, eled the money-laundering entire most, were, false 1997 tax return at only subjecting prosecution, not them to tempts up to cover completed financial resulting also in the but forfeiture of the transactions, namely, buying and sell 981(a). § proceeds. See 18 U.S.C. Avoid- ing of the Iyanough property Road in Au outcome, ing whereby such an their use of gust January Thus, 1997 and 1999. he thwarted, proceeds would be was a maintains, under Grünewald the acts of primary goal of the concealment concealment represented by the two government says Upton’s filing 6. The conspirators 1997 returns filed both were they 2000 of a false 1997 return was also an act in receipt false in that did not disclose the conspiracy. may Pointedly, they furtherance of the It have of the stolen funds. also been, although failed to the act occurred more than disclose the rental income from the years property, cementing two after have Road would been ex- further return, pected ownership the inference years property to file a and almost two of that design disguise was coconspirator similarly after of a his Alberico filed or conceal. definitively a false return. We need not re- Upton’s filing Grunewald, solve whether that false was in general In decided under the conspiracy. statute, furtherance of the The evidence conspiracy 18 U.S.C. the de conspirators’ parallel failures to file fendants had been with 1999 tax returns was sufficient for the connection with a pros scheme to obtain "no conclude that the lasted at least rulings by bribing ecution” an IRS official in May by any until But that does not primarily two discrete tax cases. Based on a Upton's filing stretch render irrelevant. concern that the statute of limitations other minimum, filing At a the fact of the false was open-ended, wise would be the Court con show, strong admissible to evidence cover-up cluded that later acts of did not of, Upton’s knowledge purchase that the 1997 extend the duration of the Sub designed States, to conceal characteristics of the sequently, in Forman v. United addition, proceeds. coming unlawful as it Court held a to have continued did Upton's in the same time frame as failure period, into the relevant limitations where the guilty to file a tax return for his alleged knowl- indictment includ edge concealment, filing associated with the June 2000 false ed the acts of and where the solidifies the inference the reason for the necessary concealment was for the successful prevent failure discovery completion to file was in fact to of the scheme. 361 U.S. 423-24, (1960). laundering conspiracy. S.Ct. L.Ed.2d 412

13 ey laundering. But the life of evidence offenses could not extend support argument, might purchase In of this have shown that the 1997 conspiracy. LaSpina, v. 299 property cites United States constituted concealment mon (2d Cir.2002), the propo- ey laundering 176 does not mean that the con F.3d conspiracy with an economic spiracy money sition that to commit concealment objective only lasts until or, transaction as its laundering ceased at that time for that “anticipated matter, economic benefits” of property with the sale of the in are received. Id. transaction 1999.9 conspiracy to covering up completed

If Where, as we have established is the 1957(a), in by engaging § here, violate 18 U.S.C. case the substantive crime that is the criminally in de- monetary transactions object conspiracy of the has the intent to all that the two tax property, element, rived were an conceal as the success of the accomplished, argument offenses conspiracy may depend itself on further Here, however, might have merit. as we Consequently, concealment. additional noted, Upton was also with have acts of concealment that facilitate the cen 1956(a)(1)(B)by § en- conspiring to violate in conspiracy tral aim of the are further designed in financial transactions gaging See, conspiracy. e.g., ance of the United disguise certain characteris- to conceal or (1st Goldberg, States v. 105 F.3d activity. proceeds tics of the of unlawful Cir.1997) (acts of tax evasion were “inte was more objective The gral part and self-evident of’ fraud con specific monetary than transactions of 371); § spiracy charged under 18 U.S.C. The buying selling Iyanough and Road. Mann, United States in concealment engage was to (5th Cir.1998) (acts designed to frustrate in money laundering order obscure regulatory oversight were “central” to con conspira- the funds and the illicit source of spiracy involving savings fraud within proceeds. tors’ continued control of the Esacove, institution); loan States v. United Accordingly, Upton’s argument fails to (5th Cir.1991) (acts designed gain traction.8 money laundering protect investigation held against government sure, in some the crime of

To be cases And, “necessary” part conspiracy). as money laundering may be concealment above, noted was entitled to infer at the time the transaction itself completed parallel failures to case, conspirators’ In this for exam is consummated. part 1999 were of an file tax returns for ple, there a wealth of evidence that ongoing plan engage concealment purchase prop Road money laundering, merely rather than be- erty in 1997 constituted concealment mon conspiracy, Upton's LaSpina inapposite. thus be in furtherance of the as citation to is conspiracy LaSpina materially differed repaints car the stolen vehicle. when a thief LaSpina case. purpose 353 U.S. at 77 S.Ct. 963. The purpose involved whose laundering is to make concealment monetary criminally engage in transactions legitimate, especially proceeds appear to the property, derived in violation of U.S.C. government. Preventing the authorities from 1957(a). reasoning LaSpina thus discovering proceeds, the illicit nature of the applies conspiracies without an element of by concealing the existence or financial im- concealment. transactions, pact part ongoing conspiracy to as much a Grünewald, the court observed that sub- repainting launder the car is a sequent may facili- acts of concealment well of a theft tate the success of the substantive crime 14

ing attempts up completed later to cover done in objectives furtherance of the main Dazey, conspiracy,” crime. See United States v. 403 “acts of conceal- (10th Cir.2005) (“[T]he ment 1147, objectives done after these central 1159 have purposes been attained for the jury may infer from the defen covering up after the crime.” 353 U.S. at dants’ conduct and other circumstantial ev 405, 77 S.Ct. 963. Where latter is indicating idence coordination and concert involved, government present must action.”). proof express

some of an original agree- engage ment to in the acts of concealment. 3. Twitty, However, See 72 F.3d at 234. Upton presents argument. another nothing imposes the case law a require- assuming engaged Even he in acts of ment conspirators expressly agree that could concealment be considered to be engage in acts of concealment where those of main objectives furtherance acts are done in furtherance of the main conspiracy, no conspiracy could have exist- objectives Rather, conspiracy.10 ed in this case because he and Alberico acts of concealment committed one co- expressly agreed engage never in acts conspirator only need have been “foresee- of concealment. The Court’s decision able” to the other co-conspirator. See Grünewald, posits, requires he Hansen, 92, States v. United 434 F.3d 103 government present proof of defendant’s (1st Cir.2006); United States v. Pinillos- express agreement to conceal. See United Prieto, (1st Cir.2005). 419 F.3d (1st Twitty, States v. 72 F.3d Here, above, as established a reasonable Cir.1995). government, Upton con- jury could conclude that the acts of con- tends, present failed to such evidence. In case, specifically cealment the fail- fact, Upton argues that the record evi- Upton ure of and Alberico to file 1999 tax actually dence supports his contention that returns, were done in furtherance of the express no such agreement existed and objectives And, main that, result, acts of concealment moreover, these acts would have plainly were undertaken unilaterally. This is be- been foreseeable conspirators. to both that, cause the record indicates by the filing Not returns was an “integral and summer of he and Alberico were self-evident of’ the —had estranged. Upton either or Alberico not hidden Upton’s argument misses proceeds sale, of the house this would have Grünewald, point. In the Court drew a primary defeated the purpose of the con- distinction between “acts of concealment spiracy. Goldberg, 105 F.3d at 774.11 fact, Mann, course, cases like 161 F.3d at 859 Of and Alberico did not act 10. Davis, and United States v. (1st Cir.1980) 623 F.2d complete concert at all times. For exam require- indicate that no such ple, in 1998 Alberico filed a false return for ment exists. Queen omitting money, the stolen whereas waited until 2000 to file a Although it unnecessary analysis, to our false return for 1997. But that other evi we note further that a reasonable could conceivably supports dence the absence of an have concluded that and Alberico had express agreement disposi to conceal is not expressly agreed engage in acts of conceal- sufficiency tive in this of the evidence case. ment. and Alberico acted in tandem Ortiz, (1st See United States v. they when both failed to file returns in 1999. Cir.2006) ("[C]ompeting inferences are not activity This concerted is circumstantial evi- verdict”). enough jury’s to disturb a dence express agreement that an to conceal place. was in that because six hours elapsed between the startling disappearance event—the attempt excluding In his final money Queen’s suitcase full of state- consideration, —and Upton tax from offenses Hoell, ment the statement could not estrangement from Al- suggests that his Queen have been made while was “under berico in the summer of alluded to stress excitement” of the loss of the above, amounted to a withdrawal from the 803(2). money. Fed.R.Evid. is waived. See argument conspiracy. This Zannino, 1, 17 United States v. 895 F.2d We review the of ev admission (1st Cir.1990) (“[IJssues adverted to a objection idence after an for an abuse of manner, perfunctory unaccompanied by Garcia, discretion. See United States v. developed argumentation, some effort at (1st Cir.2006). 452 F.3d We will waived.”). event, any are deemed only vacate a verdict if an improperly recognizing standard for a conspirator’s admitted statement was not harmless— withdrawal from a is exacting. “ is, that if its ‘likely admission affected the waived, argument Up Even were this not ” outcome of trial.’ United States v. Cas ton cannot demonstrate his withdrawal tellini, (1st Cir.2004) 392 F.3d (quot See United States v. from the Torres-Galindo, United States v. ing Dunn, (1st Cir.1985) (“[A] 758 F.2d (1st Cir.2000)). 136, 141 affirmatively conspirator must act to either If the admission of the statement was purpose defeat or disavow the of the con all, decide, error at which we needn’t it spiracy”; disagreement mere with co-con First, was harmless for two reasons. spirators is insufficient to constitute withd rawal.).12 likely statement itself did little to influence jury. Conspiracy to commit conceal- Hearsay

C. Evidence ment agree- involves an proceeds ment to conceal the nature of Upton argues that the district Here, unlawfully that were obtained. admitting court an erred excited prove order to pro- the element that the Queen’s hearsay utterance statement obtained, illegally ceeds had been gov- his money friend Janet Hoell “the ernment had that Upton to show stole the gone” night the theft 803(2) money that subsequently he laundered. suitcase. an Fed.R.Evid. creates Queen’s statement does not demonstrate against hearsay to the exception rule stolen, money that the was even much less relating startling “[a] statement to a event Upton or was the one who stole it. condition made while the declarant was Queen’s provide sup- under the stress of excitement caused While statement does Upton port money the event or disap- condition.” contends for the idea that present argu- fairly does an additional offense informs a defen- only summary ment that merits treatment. charge against he dant of the which must that, He defend, and, second, contends for statute of limitation plead enables him to an purposes, the indictment in this case barred acquittal prose- or conviction in bar of future consideration of his crimes because it cutions for the offense.” United States same (1) allege failed to: that he and Alberico Cianci, (1st Cir.2004) (cita- (2) agreed to commit those tax crimes and omitted). quotations tion and internal A re- charge conspiring him with to commit view of the indictment in this case makes laundering with the intent to evade taxes or language plain that the was suffi- indictment's file a false return in violation of 18 U.S.C. put Upton cient to on notice of the 1956(a)(l)(A)(ii). “[A]n indictment is suffi- charge against him. it, first, cient if contains the elements of the during Queen’s trunk of the car peared from the statement event. frame, testimony supported by Their specific implicate time it does not other testimony evidence. Otto’s Alberico Upton. admitted that she took the suit- Second, government presented plen- case supported by to hotel was ty of evidence that did fact steal revealing hotel records introduced at trial friend Phidias Dantos money. Upton’s rented hotel room for two Queen accused Upton testified that people night Queen on the returned from money shortly stealing the after the theft testimony Florida. Otto’s further that Al- significantly, occurred. More Colleen Otto spent part berico said she had of her share told that testified that Alberico her Alberi- money during a trip Italy to was money, co had taken the and and by corroborated airline and credit card revealed Edwin Jones testified records showing Italy Alberico was in money. to him that he had stolen the during February 1999. Jones testified Webb, bookkeeper, Lucy Look Motors’s that in Upton gave him cash from a testified that declined to tell her money” “shoebox full of and that the mon- got money purchase where he ey “looked old” and was dated from the Road, saying that he wanted to 1950s; description is consistent with “maintain her innocence.” And the addi- proposition money that the was earned Upton’s money tional evidence of launder- by Queen’s throughout father his life and ing provided strong support activities subsequently deposit stored a safe box. inference he and Alberico had short, In Queen’s statement to Hoell is large money obtained a sum of around the cumulative of other evidence the record. Queen. time the suitcase was stolen from Regardless of whether admitting the state- Queen’s If it anything, statement was may ment as an excited utterance have merely icing on the cake. error, been any such error was harmless. Upton nevertheless contends that above, For expressed the reasons we Queen’s admission of statement cannot uphold Upton’s conviction. argues constitute harmless error. He Affirmed. Queen’s testimony statement bolstered the Jones, says Otto and witnesses who he LIPEZ, Judge, Circuit dissenting bolstering were in need of because of their part. credibility.13 prob- dubious There are two First, argument. lems with this relationship bol- between the conceal- stering complaint applies only to Otto and ment at issue in Upton’s conspiracy to Jones. explained, As we have the testimo- commit money laundering and the conceal- ny of only Otto Jones was not the ment associated with his subsequent tax indicating that Upton evidence stole the complex. crimes is The majority misap- money Queen. Second, in and, addition plies legal the relevant principles con- credibility being a matter for the sequently, wrongly Upton’s concludes that determine, it is doubtful that the credibili- failure to file 1999 tax return was con- ty of Otto and bolstering Jones needed duct within scope laun- Upton challenges credibility tipped police drug dealing Jones's in two off the to Jones's aspects: serving dr.ug Jones was years ago. Upton time on activities several also chal- charges lenges and testified in return for a poten- reduction Alberico's comments to Otto as sentence; and, may tially his Jones have been motivated a desire to incriminate seeking revenge against Upton Upton following breakup. because their major- distinction, That dering conspiracy. doing, so explained, Court ity government’s misguided embraces governed by “important consider attempt remedy a statute of limitations policy” ations of that hearkened back to by stretching problem launder- prior “repeatedly cases warnfing] that we beyond justifiable ing conspiracy its limits will view with attempts disfavor to broaden to include Upton’s independent crime. already pervasive and wide-sweeping conspiracy prosecutions.” nets of Grune notes, majority

As the the district court wald, U.S. 77 S.Ct. 963. trial, Rou had dismissed before on statute of tinely viewing concealment efforts grounds, alleging money limitations counts of a laundering, structuring, “wipe would out the statute engage structuring. salvage To its in limitations cases” and “re money laundering conspiracy charge, the sult in great widening of the scope of government sidestepped Supreme conspiracy prosecutions” “every because in teaching Court’s Grunewald v. United conspiracy inevitably will be followed States, 391, 963, 1 353 U.S. actions taken to cover the conspirators’ (1957), given L.Ed.2d 931 the evi Grunewald, traces.” at U.S. which— presented treating dence the tax Hence, rejected S.Ct. 963. the Court “the —bars fraud as conduct that furthered the con proposition that the duration of a conspira If, spiracy. requires, Up as Grünewald cy can indefinitely be lengthened merely tax ton’s evasion were eliminated from the conspiracy secret, because the kept scope conspiracy, of the no act in further merely conspirators because the take money laundering ance of the scheme steps traces, bury their in order to avoid five-year would fall within the statute of detection punishment after the central period jury’s guilty limitations —and criminal purpose accomplished.” has been verdict on the count could not Id. at 77 S.Ct. 963. majority’s stand. Because the decision to Thus, if Upton’s tax evasion were con- uphold gov the verdict conflicts with the designed duct to cover up money laun- erning I precedent, respectfully dissent.14 dering conspiracy after the crime had been I. accomplished, rather than conduct under- taken conspiracy’s to further the central Grunewald, In the Supreme Court drew purpose laundering criminal the stolen a distinction between acts of concealment — money money laundering conspiracy that furthered a charged conspiracy and —the charge possi- would be time-barred. Two subsequent acts of concealment done “for theories, however, support ble could a con- purpose only covering up of after the clusion that the failure to file a 1999 tax crime.” Id. at 77 S.Ct. 963. If the return charged conspiracy furthered the at acts issue were of the latter type i.e.,— for of purposes the statute of limitations. they did not further “the main criminal First, if objectives the evidence showed that the con- conspiracy”' of the conceal —-the spiracy express original ment embraced “an would not extend the duration of the purposes agreement among the conspirators of the statute of to con- Id.; limitations. see act in also United States v. tinue to concert order to cover (1st Cir.1995). Twitty, crime, up” those acts of concealment My objections majority’s reasoning challenged to the also her conviction apply separate ap- money laundering also in the its decision to commit on statute of co-defendant, Alberico, peal Upton’s grounds. who limitations regarded accomplishment be further- cessful “properly could the crime neces- 397, 404, conspiracy.” ance of the Id. 77 sitates concealment.” Id. instances, up such S.Ct. 963. In cover— majority premises analysis pri- its only foreseeable —as it would

would be not marily theory, on the concluding second explicit objective be with all crimes-but filing ‘integral “[n]ot returns was an subsidiary conspiracy of “a to conceal.” and self-evident conspiracy,” Id. at 77 S.Ct. 963. it but asserts a footnote that a reason- able could have concluded as well that Second, the tax fraud would be within expressly and Alberico had agreed scope laundering conspir- engage I acts concealment. there- acy if it could be viewed as an act of theories, fore looking consider both first at concealment done furtherance of the possibility an express agreement main criminal conceal. Grünewald, In the defendants had fraudu- lently prosecution” “no rulings obtained II. from the Bureau of Internal Revenue on asserting in this companies seeking behalf of two to avoid case embraced the acts concealment in charges, and the evasion defendants the aftermath of the laundering steps later took to conceal their fraudulent transactions, that, majority emphasizes 395-96, activity. Id. at 77 S.Ct. 963. The pursuant statute, Supreme Court observed that the “no the indictment Upton with con- prosecution” rulings obtained 1948 and spiring alia, disguise,” “to conceal or inter objective main 1949 had been the of the the source and control of the stolen conspiracy presented jury, to the and the 1956(a)(1)(B).15 $900,000. See 18 U.S.C. subsequent efforts to conceal irregu- the majority that, The concludes because of occurring larities —the conduct within the language, objective concealment “[t]he period only statute of limitations —could of the conspiracy was more than spe- the purpose have been for the of avoiding ap- cific monetary transactions of buying and prehension, rather than to further the con- Road,” selling but included spiracy’s already objective. completed Id. purpose the “to obscure the illicit source of 405-06, at 77 S.Ct. 963. The Court ac- the funds and conspirators’ the continued however, knowledged, that some acts of proceeds.” that, control of the It reasons closely concealment are so linked time money laundering because the crime that purpose accomplishment to the was the conspiracy the includ- conspiracy they “in are furtherance of element, ed a concealment the tax fraud objectives the itself.” Id. was within conspiracy’s scope. the 77 S.Ct. The 963. Court cited the kidnappers concealment of who hide while The money concealment element in the awaiting ransom and the repainting laundering not, of a however, statute does stolen car as instances which “the suc- bring scope within the money laun- states, (B) provision part: knowing That in relevant that the transaction is de- signed (a)(1) Whoever, part— in whole or in knowing property that the (i) nature, disguise to conceal or the the repre- involved in a financial transaction location, source, ownership, proceeds sents or the of some form of unlaw- proceeds activity, specified ful control of the conducts ... such a financial unlaw- pro- activity.... transaction which in fact ful involves the shall be sentenced to a fíne specified activity— ceeds of imprisonment.... unlawful ... or all conduct undertaken Abel from the dering Lord.” Id. at to conceal the theft of the defendants $900,000. The concealment element of “[tjhere Grünewald, As in is not a shred 1956(a)(1)(B) goes section to the defen- of direct evidence in this record to show engaging dant’s state-of-mind when in the anything like an express original agree- prohibited transactions. statute ment among conspirators to continue makes unlawful the conduct of a financial to act in concert in order to up, cover “knowing transaction that the transaction their own self-protection, traces of the designed in whole or in ... crime after its commission.” Id. at disguise” origin or conceal or control of S.Ct. 963. Nor does the fact that both unlawfully property. obtained In other Upton and Alberico failed to file 1999 tax words, this case had to find reporting gain returns earned from the Upton conspired money to commit stolen funds constitute indirect evidence of laundering transactions that were under- agreement such an to conceal. The Su- purpose concealing taken for the preme Court in unequivocally Grünewald proceeds crime from which the laundered held that such post-crime evidence was (here, were derived theft insufficient to required show the pre-crime $900,000). statutory state-of-mind re- agreement: not, however, quirement does transform subsequent acts of concealment that do not [A] being conceal is im- involve financial transactions —whether de- plied [by government] from elements signed to hide the laundering activi- which present will be in virtually every or, ty itself, like the case, is, secrecy plus original hide the theft —into conduct that overt acts of concealment.... is within the laundering conspiracy. Acts of covering up, though even done Grünewald, Under efforts to conceal the the context mutually of a understood money laundering conspiracy after secrecy, need for cannot themselves con- (the conspiracy’s primary deceptive aim stitute proof that concealment of the transactions) financial has been achieved crime after its part commission was of may scope be included within the of the the initial agreement among conspir- conspiracy only if the permits evidence ators. jury to find that the “original defendants’ 404, 402, 963; Id. at see also SEC agreement” explicitly subsidiary included a (1st Cir.2009) 31, Papa, v. objective up to cover their crime. See (noting agreement that “an to conceal after Grunewald, 353 U.S. 77 S.Ct. 963 the fact could be viewed as inherent a added). words, (emphasis In other there conspiracy or wrongful fraudulent must agreement be some evidence of an scheme[,] joint then all wrong- but covert defendants, between the entered into be doing permanently would be a continuing they commit the crime that is the fore ... approach Supreme offense an that the object conspiracy, of the to continue to act rejected”); jointly to Court has v. up activity. cover their unlawful United States (1st Cir.1997) Only Goldberg, 105 where there F.3d pre-crime is such a agreement (holding will acts that “mere covering up after collateral effects of jointly agreed-to the crime activity, generally reveal “more than that the con even if spirators foreseeable, do not wish to be apprehended— mechanically are not to be a ... every concomitant object crime since treated as an of the conspiracy”); Cain attempted that, conceal the murder of (noting id. at 774 in the a case of robbers, bly scope every conspiracy know that the within the “[a]ll of bank

band robbery generate will ‘in- agreed-upon question commit such crimes. The is report[, the robbers whether, that none of will theory come’ consistent with the second straining Grünewald, to describe inter- y]et jury it would be permitted by could purpose IRS as a or ference with the that accomplishment find “the successful The inference object conspiracy”). of the the crime that act of con- necessitate^]” par- conceal original agreement of an is cealment.16 Id. at 77 S.Ct. 963. that, ticularly given unwarranted here as that, majority states because the Al- majority acknowledges, Upton purpose money laundering conspira- consistently act in tandem berico did not theft, cy Queen “addi- conceal the money laundering. Alberico following tional acts of concealment facilitate a false return for 1997 that omitted filed aim of the central are $900,000, while filed his the stolen ma- conspiracy.” furtherance of the year in false return for that jority asserts that the tax meets evasion sum, missing “the essential element is description: “[C]oncealing the exis- the act showing [of concealment] tence or financial impact of prior was done in furtherance of criminal laundering is much a transactions[ ] as agreement among conspirators.” Gru part ongoing conspiracy to launder newald, at 404 n. 77 S.Ct. 963. 353 U.S. repainting the car is of a permitting is no evidence Because there conspiracy.” theft to find that and Alberico not, however, This case does involve an “express original agree an entered into “ongoing conspiracy” allegedly up ment” to cover their may beyond not be intended to last the set of transac activity, the tax fraud consid $900,000. scope on tions that laundered the stolen ered within Such a continuous was de basis. Gardiner, scribed in United States III. (6th Cir.2006), where the “ specific court discussed crimes with ‘no failure to file the 1999 tax Nor can the terminating an act of event’ ”—such as a return be viewed as concealment main fix generalized done in furtherance of the court cases or loan money laundering conspiracy. sharking activity mid-conspiracy Al- which —in though necessary is a foreseeable conse- concealment evasion for the scheme to crime, that, quence virtually every financial (recognizing continue. See id. “[i]n Goldberg, conspiracies objective 105 F.3d at it is not inevita- where a main has nature, location, source, alleged guise ownership, Count Four of the indictment the the 16. following by Upton illegal proceeds by tax-related conduct or control of the cash part money laundering conspiracy: of the filing materially a false federal income tax July return in or about 2000 that failed to part conspiracy 5. It a of the that receipt illegal declare the of the income or the George Lynn defendants L. M. property rental income from in 1997. attempted disguise Alberico to conceal or government argues filing Upton's nature, location, source, ownership, or con- a an act in false return 1997 also was illegal proceeds by failing trol of the cash although returns, conspiracy, furtherance of capital file income tax or declare a majority rely does not conduct. I gain proper- from the sale of the commercial objections have ty, year would the same such for the tax Upton’s I part conspiracy It a reliance as do for failure to file the George Upton attempted L. to conceal or dis- 1999 return.

21 original not been attained or abandoned and con of the criminal undertaking rather post-conspiracy than as cover-up. cealment is essential to success of that objective, attempts conspira to conceal the Indeed, the Court in Grünewald extend- conspir cy are made furtherance of the kidnaping ed its example by noting that (citation omitted); acy”) see also United the concealment by govern- addressed Esacove, (5th F.2d States 943 5 Cir. proof ment’s at trial in that case was “ 1991) (noting ‘concealment is some closely analogous to ... conspir- “[m]ore ” necessary conspiracy’ times to ing kidnapers up who cover their traces “ it ‘protect investigative agen from those after the main conspiracy finally is end- i.e., they cies which threatened its continuation’” after have abandoned the ed— Valle, kidnaped person (quoting United States v. Del and then take care to (5th Cir.1979))). escape detection.” at U.S. By confining “necessary” S.Ct. 963. acts here, laundering conspiracy charged fo of concealment to those that occur contem- designed cused as it is on transactions poraneously with the overt acts that com- crime, single conceal a ended at a fixed crime, prise the Supreme substantive point specific in time-when those transac Court’s concern in Grünewald —that acts completed. Papa, tions were See of concealment not be to indefinitely used (“ ‘[TJhough conspira at 36 the result of a extend the duration of a —does cy may continuing, be does ” not arise. thereby continuing not become a one.’ Here, States, too, the (quoting upon Fiswick v. United concealment relied by 211, 216, government to extend the duration U.S. S.Ct. 91 L.Ed. 196 of the (1946))). conspiracy is more akin to the cov- er-up kidnapers pock- conduct of who have majority’s reasoning The flaw in the eted their ransom and abandoned their by considering further revealed the Su- dispute victim. There is no that the overt preme Court’s illustrative crimes in Grü- acts that were the car kidnaping newald. With its stolen financial pro- transactions —the examples, Supreme Court was describ- 1956(a)(1)(B) hibited section end- —had ing acts of concealment that occur—as ed, latest, with the sale of the “ongoing” conspiracies with tandem —in property January Road with the criminal conduct that is the ob- 1999.17 The failure to file a tax return ject charged conspiracy. In such year assuming more than a the usu- later — cases, where the concealment occurs be- April materially al 15th deadline—is differ- object fore the is com- Supreme ent from either of the Court’s (as pleted with kidnapers awaiting examples within-the-conspiraey conceal- ransom) completion or coincident with its First, ment. evasion was remote (as car), paint job the new with on stolen targeted in time from the transactions. closely the concealment is in time related Second, the tax conduct did not facilitate to the commission of the crime that is the those and transactions. Alberico conspiracy’s goal. di- Such concealment successfully changed the cash into cash- rectly facilitates the crime’s completion purchased iers’ checks and the house in and, such, as it properly part money is viewed as completing laundering the Although Upton appears presume purchase that indictment concludes with the of the money laundering the transactions included house. sale, the house the list of transactions in the basis, objective majority principled the of the The offers no that was

conduct however, a drawing Their failure to file distinction between charged conspiracy. disclosing gain a failure to file a return showing gain from the house returns in fact earned 1999 and failure to file return after the protected the scheme reporting gain that same earned at a later it, that function is not concealing but per- date. The concealment function tax evasion within the enough bring by the tax evasion is the same in formed money laundering conspiracy. scope of the instances, I both and do not see how such Indeed, precisely is evasion concealment can be deemed an essential concealment that post-conspiracy sort of money laundering conspiracy of the part a matter of in Court Grünewald —as Moreover, the earlier time but not later.18 to extend the policy insufficient —deemed in both instances the of the mon- contrast, By a car limitations. statute of ey laundering conspiracy commission —the and, of the even repainting thiefs car— money laundering-had of the crime of al- so, kidnapers waiting hiding more Hence, ready completed. timing been necessary for the success- for ransom —is support of the tax evasion does not the crime that accomplishment ful is the majority’s that it was within conclusion object conspiracy. of the original money scope laundering of the contrary, To the the tax con- majority’s logic problem with The charged objec- duct’s remoteness from the by applying it to a scenario demonstrable tive of the launder —to had in which and Alberico sold $900,000 by means of financial transac- later, years Iyanough Road house ten necessary that it not tions—confirms similarly failed to file tax returns of the accomplishment to the majority’s reporting gain. their The anal- required by the sense Grünewald. ysis impermissible leads to the conclusion— money laun- under Grünewald —that IV. dering conspiracy would have continued decade, majority’s undoubtedly despite for another the lack of The confusion laundering throughout part appreciate stems in from its failure to money transactions majority conspir disclaims such a the critical difference between the period. ap- acy alleged type conspira in its in Alberico’s here and the opinion conclusion peal, noting cy charged that “the failure to file and other cases [re- Grunewald relies, majority including turns for was within a short time and on which the 1999] Mann, likely part conspirators’ Goldberg thus to be of the States v. United (5th Cir.1998). agreement.” Those cases majori- original money laundering conspiracy, Beyond highlighting the flaw the ty’s reasoning, hypothetical open-ended shows the the result would be an statute of Supreme problem viewing Court’s concern in the sale of the limitations-the distinguished pur- Road house—as from its Grunewald. See 353 U.S. at S.Ct. 963 ("Sanctioning theory part the Government’s would chase—as con- purposes wipe spiracy. laundering accomplished practical all out the statute by converting the cash to cashier's checks of limitations in cases see estate, Magluta, were then real also United converted into States Cir.2005) (11th (holding purchases from which and Alberico earned rent $1,000 out, points using proceeds years pay if laundered after the month. As report profits original laundering the failure to down-the-line ment that constituted the (such gain considered from the laundered could not be sale) laundering conspiracy). scope the held within the house is to be conspiracies brought involved under 18 tect the Under defendants. the broader 371, § any U.S.C. which theory, however, criminalizes con- those acts could be States, “to defraud the spiracy United or viewed as conduct in furtherance of the any any conspiracy thereof in agency fully protect manner or for to the taxpayers any purpose.” liability. § 409-411, U.S.C. 371. Such a at Id. 77 S.Ct. “can multiple objects, have object agreed-upon purpose can be a The Court remanded the ease for a new of the conspiracy and to used define its trial jury because the charge did not dis- (cit- Goldberg, character.” at tinguish between concealment order to States, ing Ingram v. United 360 U.S. achieve the purpose central of the more 679-80, 3 L.Ed.2d 1503 (immunization broadly stated conspiracy (1959)). taxpayers the from tax-evasion prosecu- tion), and concealment intended

Thus, solely under section a defendant up cover a completed crime (obtaining the may charged guilty be and found of con- prosecution” “no rulings). 413-14, Id. at spiring government defraud the by 77 S.Ct. 963. To find that the acts means of tax conduct purpose whose concealment that place took within the lim- to conceal earlier illicit activity that was itations period were furtherance of the charged separate object as a of the same conspiracy, jury needed to find that Mann, example, “the basic aim of was not government alleged separate objects five yet attained” at that time—a determina- single under tion was not asked to make. Id. section 371 in count, the indictment’s first 77 S.Ct. 963. including misuse of bank funds and the know, therefore, As far as we filing Mann, pres- of false income tax returns. ent convictions were based on the imper- 161 F.3d at rejected 847-48. The court theory missible ... that a subordinate argument defendants’ Grünewald be- agreement to conceal the conspiracy cause central “[t]he aim of the conspira- continued after the central aim cy” alleged in the indictment —includ- —as conspiracy had accomplished.... been ed a purpose Mann, to evade taxes. F.3d at 859. judge’s charge [T]he it open left for the jury to convict though they even found Grünewald also potential illustrates the that the acts of concealment were moti- of conspiracies breadth under section 371. purely vated by purpose of the con- Although the case was theory tried spirators up already cover their ac- conspiratorial objec defendants’ complished this, think, crime. And we tive was to obtain prosecution” “no rulings was fatal error. taxpayers, certain the indictment em Id. theory braced the conspiracy’s object

central beyond extended pro those The majority to recognize fails that the rulings visional “to immunize the taxpay indictment here not similarly elastic. ers completely from prosecution for tax The indictment charged a Grunewald, evasion.” 353 U.S. at commit laundering, in violation of S.Ct. Supreme 963. The Court 1956(a)(1)(B), concluded 18 U.S.C. a not more gen- that, under the theory presented limited eral conspiracy under section 371 “to de- jury, the acts of following States, concealment fraud the any agency United or prosecution” “no rulings only could be thereof’ concealing, through various post-conspiracy viewed as cover-up actions, to pro- unlawful Queen’s the theft of mon- conspiracy purpose up crimes share a to cover the the indictment’s ey. Although Queen, included, theft from with the tax evasion heading under the allegations Means,” presumably having purpose that of the added part was “[i]t “Manner up money laundering. cover Both the attempted conspiracy [defendants] law, however, preclude a the ... source ... facts and the disguise or to conceal by finding by there was an illegal proceeds cash or control of express original subsidiary agreement tax returns ... failing to file income 1999,” government’s among conspirators up de- to cover their year the tax crime, finding a that the to file tax fraud that or failure subsequent a scription of the 1999 return was an act of concealment concealment of shared the same cannot done furtherance of the launder- money laundering transactions ing conspiracy meaning within the of Grü- conspiracy alleged specific turn the —to Thus, charged a newald. while money laundering general commit —into separate convicted of the properly to conceal funds.19 conspiracy return, a tax failing crime of to file conspiracy section 371 Unlike majority treating independent errs Mann, a sepa which included charged money laundering crime as a objective, or conspiracy fraud rate tax conspiracy. Grünewald, general pur whose charged in the United States could pose charge to defraud Because the subsequent time-barred, of concealment embrace acts conviction Upton’s on Count ruling, prosecution” the “no of the indictment should be reversed. i.e., a con to commit — financial transactions—

spiracy to conduct terms,

cannot, include a “central by its income from purpose”

criminal to conceal Grunewald,

the IRS. 353 U.S. simply, Put most the tax eva S.Ct. 963. America, UNITED STATES aim” of sion did not further the “central Appellee, to conduct fi conspiracy,' which was v. nancial in order to conceal the transactions Hence, $900,000. source of the the tax Lynn ALBERICO, Defendant, M. scope evasion was not within the Appellant. conspiracy. No. 06-1502. by the statute charge was therefore barred

of limitations. Appeals, United States Court

First Circuit. V. Heard Dec. 2007. correct, course, majority Decided March file the 1999 tax return Upton’s failure to relationship to the laun- bears some noted,

dering As I have both earlier, originally the district court 19. The indictment included count As noted dismissed alleging under section that count on the basis of the statute of limita- purpose structure transactions Upton, United tions. See States evading currency reporting require- federal (D.Mass.2004). F.Supp.2d 5324(a)(3), §§ ments. See 31 U.S.C.

Case Details

Case Name: United States v. Upton

Court Name: Court of Appeals for the First Circuit

Date Published: Mar 5, 2009

Citation: 559 F.3d 3

Docket Number: 05-1593

Court Abbreviation: 1st Cir.