United States v. Hughes

1 IN THE UNITED STATES COURT OF APPEALS

2 FOR THE FIFTH CIRCUIT
3 _______________
4
5 No. 95-10861
6 _______________

7 UNITED STATES OF AMERICA,

8 Plaintiff-Appellee,

9 VERSUS

10 RONALD W. HUGHES, SR.,

11 BETTY L. ALLEN,

12 and

13 JERRI D. ALLEN,

14 Defendants-Appellants.

15 _________________________
16
17 Appeal from the United States District Court
18 for the Northern District of Texas
19 (3:94-CR-075-X)
20 _________________________

21 October 30, 1996

22 Before POLITZ, SMITH, and DUHÉ, Circuit Judges.

23 JERRY E. SMITH, Circuit Judge:*

24 Ronald Hughes, Sr., Betty Allen, and Jerri Allen appeal their

25 convictions and sentences for conspiracy to launder money and for

*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion
should not be published and is not precedent except under the limited circumstances
set forth in 5TH CIR. R. 47.5.4.
26 individual acts of money laundering. Finding no error, we affirm.

27 I.

28 Ronald Hughes, Sr. (“Hughes”), ran his family’s funeral home

29 business near Dallas. In June 1989, Hughes was visiting with Harry

30 Pierce, an old acquaintance who was at the time doing odd jobs for

31 Hughes, at the site of a church in Cedar Hill, Texas, that Hughes

32 had purchased recently and intended to convert into a funeral home.

33 At this meeting, Pierce asked whether Hughes knew “where a person

34 could invest some money on a long-term basis and where they could

35 earn some interest.” Pierce stated that he knew Betty Allen

36 ("Allen"), who had about $1 million that she was looking to invest.

37 Hughes responded that he was in fact looking for approximately that

38 amount to complete the financing on his new funeral home conversion

39 project.

40 Shortly thereafter, Pierce arranged a meeting with Hughes and

41 Allen, at which meeting Allen agreed to loan Hughes $1 million.

42 Allen related to Hughes that the money had come from a now-

43 deceased, former lover (Joe Brown) who had been distrustful of

44 banks and who liked to keep large sums of cash around. Hughes and

45 Allen closed the loan transaction on July 1, 1989, and a local

46 attorney prepared the necessary documentation. Allen instructed

47 the attorney to make the note payable to Allen and Robert Chambers,

48 explaining that Chambers was a friend of hers and Joe Brown’s who

2
49 had an interest in the money that Brown had left her.1 At the

50 behest of Hughes’s attorney, Allen also provided Hughes with a

51 written statement representing that none of the loan proceeds was

52 derived from illegal activity. Hughes and Allen agreed that the

53 moneySSall delivered in cashSSwould be deposited in increments of

54 less than $10,000 each. Hughes proceeded to do this, making nearly

55 200 separate deposits of cash in eleven different financial

56 institutions during the course of his dealings with Allen.

57 On July 20, 1989, Pierce telephoned Hughes and explained that

58 Allen had asked Pierce to meet her in Scottsdale and then fly back

59 with her to Dallas. Because he was unable to do so, Pierce

60 requested that Hughes go in his place. Hughes agreed and flew the

61 following day to Scottsdale aboard a chartered plane that had been

62 arranged by Pierce.

63 Upon his arrival, Hughes met Allen, who said she needed him to

64 accompany her on an errand, at which time the two drove to a

65 storage facility in Phoenix and removed approximately $2 million in

66 cash from a safe located in the facility.2 Hughes and Allen

1
Chambers, prior to his arrest in 1991, smuggled marihuana and cocaine
into the United States from Mexico and Colombia. He was reportedly the last
“soldier” left in the Pablo Acosta drug organization. According to the
government, Chambers gave some of the currency that he earned in this drug trade
to Allen so that she could help him hide the money. After his arrest and
conviction, Chambers entered into a plea bargain and agreed to testify against
Allen and company in this action in exchange for leniency in sentencing.
2
The parties contest ownership of the money. According to Hughes, Allen
indicated that the money had been placed in the safe. Allen maintains, however,
that the money came from Joe Brown. The government contends that the money
belonged to Chambers and had been placed with a girlfriend of Chambers’s in
Phoenix prior to its being moved to the storage facility.

3
67 returned with the money to the Scottsdale airport and flew to

68 Dallas, whereupon Hughes delivered the money, per Allen’s instruc-

69 tions, to Pierce’s apartment.

70 Hughes subsequently received a second call from Allen in which

71 she indicated that she had an additional $1.9 million to invest

72 with Hughes.3 The money that formed the basis of this second loan

73 had been brought from Alpine, Texas, by Pierce, Allen, and Jerri

74 Allen (“Jerri”), Allen’s daughter. The three passengers had flown

75 to Alpine aboard Allen’s airplane, where a pickup truck pulled up

76 to the plane and loaded the money aboard in trunks and bags.

77 Hughes met the group at the Dallas airport upon their return and

78 took the moneySSagain all of it in cash. The note evincing this

79 loan transaction was executed on November 1, 1989.

80 Although it is undisputed that Chambers came to Dallas on

81 August 8, 1989, to meet with Hughes, the parties dispute virtually

82 every facet of the meeting. The government claims that at this

83 meeting Chambers told Hughes that the money belonged to him and

84 that he had had an extensive relationship with Acosta and was “the

85 last soldier left in the [Acosta] organization.” According to the

86 government, Hughes then told Chambers that he had had a former FBI

87 agent friend of his run a check on Chambers and that this friend

88 would help them stay apprised of whether the IRS was conducting any

89 money laundering investigations in the area.

3
None of the parties contests the amount of the loan, although the second
note reflects only that $1 million was loaned to Hughes.

4
90 Hughes contests this account, saying that Chambers told him

91 that he was a former Green Beret who had done a few favors for

92 Mexican law enforcement personnel. Although Hughes does not

93 dispute that he told Chambers that he had run an FBI check on him,

94 Hughes claims that he never did so and was only making comments to

95 that effect to “level the playing field.” Hughes also points out

96 that the former FBI agent testified at trial that he had not run

97 such a check until April 1990. Hughes does concede, however, that

98 Chambers indicated that the money was his, that he had once worked

99 for a man named Pablo Acosta, that he had inherited Acosta’s turf,

100 and that Acosta was “like a godfather” to him.

101 Hughes had no further contact with Chambers until April 1990,

102 when the two met with Allen and Jerri. Ostensibly, the meeting was

103 called to figure out where all the money (nearly $5 million in

104 total) had gone and who was responsible. The meeting degenerated

105 into a shouting match between all of the parties and was followed

106 by Chambers’s mad search through a mausoleum owned by Hughes in

107 which Chambers believed that Allen and Hughes had hid the money.

108 To everyone’s knowledge except Hughes, the meeting was recorded on

109 audio tape.

110 Chambers was arrested in 1991 and, after being convicted,

111 agreed to testify in the instant case in exchange for leniency in

112 sentencing. Hughes was charged with various counts of money

113 laundering and structuring, Allen with various counts of money

114 laundering, Hughes’s son with various counts of structuring, and

5
115 Jerri with two counts of structuring and one count of money

116 laundering. Hughes, Allen, and Jerri also were charged with

117 conspiracy to launder.

118 Hughes was convicted by a jury on all but one of the launder-

119 ing charges and acquitted on all of the structuring charges. Allen

120 was convicted on all counts, while Jerri was convicted only on the

121 laundering counts. Hughes’s son was acquitted on all charges.

122 II.

123 A.

124 Hughes, Allen, and Jerri first contend that the district court

125 erred in failing to instruct the jury that, as to the money

126 laundering counts, the government was required to show that each

127 possessed actual knowledge that the funds involved in those counts

128 were the product of criminal activity. According to the defen-

129 dants, the court’s failure to adopt their instruction permitted the

130 jury to convict upon a showing of the lesser standard of construc-

131 tive knowledge.

132 We review the district court’s decision for abuse of discre-

133 tion. United States v. Sellers, 926 F.2d 410, 414 (5th Cir. 1991).

134 The refusal to give a jury instruction constitutes reversible error

135 only where the instruction (1) was substantially correct, (2) was

136 not substantially covered in the charge delivered to the jury, and

137 (3) concerned an important issue so that the failure to give it

6
138 seriously impaired the defendant’s ability to present a given

139 defense. United States v. Pennington, 20 F.3d 593, 600 (5th Cir.

140 1994).

141 The defendants’ proposed instruction was substantially

142 correct.4 The government does not dispute that “actual knowledge”

143 that the proceeds of unlawful activity were involved in the

144 laundering is an element of the crime. Actual knowledge requires

145 at a minimum a showing of the defendant’s subjective belief that

146 the fact at issue existed. See United States v. Breque, 964 F.2d

147 381, 389 (5th Cir. 1992), cert. denied, 507 U.S. 909 (1993). The

148 defendants’ jury instruction elucidated as much and thus was

149 substantially correct.

150 We conclude, however, that the defendants’ proposed instruc-

151 tion was substantially covered in the charge delivered to the jury.

152 The actual charge given was as follows:

153 In order to establish a violation of the statute, the
154 government must prove beyond a reasonable doubt . . .
155 Second: That the Defendant under consideration knew that
156 the property involved in the financial transaction
157 represented the proceeds of some form of unlawful
158 activity . . . . The phrase "knowing that the property
159 involved in the financial transaction represented some
160 form of unlawful activity" means that the person knew the
161 property involved in the transaction represented the
162 proceeds from some form, though, not necessarily which

4
The proposed instruction was as follows: “In order to find that the
defendant whom you are considering believed that the property involved was the
proceeds of one or more forms of unlawful activity, as set forth above, you must
be convinced beyond a reasonable doubt that the defendant actually believed that
proceeds of unlawful activity were involved. Reason to know, carelessness,
suspicion, or even reckless disregard of the facts that the proceeds of unlawful
activity were involved is not enough to satisfy the standard.”

7
163 form, or activity that constitutes a felony under State
164 or Federal law. . . . [The government] need only prove
165 that he or she knew that it represented the proceeds of
166 some form, though not necessarily which form, of feloni-
167 ous activity under State or Federal law. [Emphasis
168 added.]

169 The statute requires that the government prove actual

170 knowledge, and the court so instructed the jury, using the word

171 “knew” three times in two paragraphs of the instruction. The court

172 did not instruct that the government could prevail by demonstrating

173 that the defendants “should have known” that the money was

174 criminally tainted, and we do not conclude from the court’s failure

175 to define the term “knew” that the jurors were permitted implicitly

176 to assign guilt based upon a “should have known” standard.

177 “Terms which are reasonably within the common understanding of

178 juries, and which are not technical or unambiguous, need not be

179 defined in the trial court’s charge.” United States v. Anderton,

180 629 F.2d 1044, 1048-49 (5th Cir. 1980) (citation omitted). “Knew”

181 is such a self-defining term, and, when used in common parlance,

182 connotes actual or direct cognition, not constructive awareness

183 attributed to an individual because of his own negligence, gross

184 negligence, or recklessness. Irrespective of whether it is in fact

185 “better practice . . . to instruct the jury on the meaning of all

186 terms of operative significance, even if they are in ordinary

187 parlance,” id. at 1049 n.5 (citation omitted), we find no error in

188 the instant instruction.

8
189 B.

190 Jerri next challenges the jury instruction on the § 1957 money

191 laundering charge stemming from the purchase of her $90,000 home

192 with monies that the government alleges were criminally derived

193 (Count 15). According to the government, Allen gave Jerri $90,000

194 in drug-tainted money with which to purchase a home, which money

195 Jerri deposited in amounts less than $10,000 each and then drew

196 cashier’s checks on in similar amounts.

197 The court instructed the jury that, in addition to the other

198 four elements that they were required to find in order to convict,

199 they must also find “[t]hat the monetary transaction was of a value

200 greater than $10,000; [and] Fourth: That the criminally derived

201 property was in fact derived from the specified unlawful activity

202 of importation, sale or distribution of cocaine.” Jerri contends,

203 and the government concedes, that the instruction wrongly informed

204 the jury that they must find only that the monetary transaction in

205 which the criminally derived monies were used was in excess of

206 $10,000, where in fact a correct statement of the law would require

207 that the jury find that the amount of criminally derived money used

208 in the transaction must exceed $10,000.

209 As Jerri failed to object timely, we review for plain error.

210 United States v. Restivo, 8 F.3d 274, 278-79 (5th Cir. 1993), cert.

211 denied, 115 S. Ct. 54 (1994). Because the government concedes

212 errorSS”a deviation from a legal rule in the absence of a valid

9
213 waiver,” United States v. Calverley, 37 F.3d 160, 162 (5th Cir.

214 1994) (en banc), cert. denied, 115 S. Ct. 1266 (1995)SSand that

215 such error was in fact plainSSso obvious that the trial judge and

216 prosecutor were derelict in countenancing it, see United States v.

217 Frady, 456 U.S. 152, 163 (1982), we need not determine whether

218 Jerri’s construction of § 1957 comports with its statutory meaning.

219 We will exercise remedial discretion where the plain error affects

220 substantial rights and where the defendant carries her burden to

221 show that the error was prejudicial, affecting the outcome of the

222 proceeding. Calverley, 37 F.3d at 164 (citation omitted).

223 Jerri argues that the instruction was indeed prejudicial

224 because the government presented at trial only one cashier’s check

225 that was allegedly used in the purchase of her $90,000 home and

226 that had any clear derivation from illicit funds. That check, in

227 the amount of $8,000, listed Pierce as the remitter. Jerri thus

228 contends that there is a substantial likelihood that the jury

229 wrongly convicted her on Count 15 based upon the $90,000 purchase

230 price of the home and that a different result would have been

231 obtained had the jury been instructed to focus on the $8,000

232 cashier’s check only.

233 Jerri’s own discussion of the facts of this case, however,

234 undermines this argument. Even if we assume that only this single

235 cashier’s check had any derivation from criminal activity, Jerri

236 admits that she made currency deposits (the subject of a separate

10
237 structuring charge) over the course of a month from which she was

238 able to pay the remaining $36,455.85 due on her home. It was

239 precisely the criminal origin of these cash transactions that the

240 government also presented to the jury in arguing for Jerri’s

241 conviction on the § 1957 charge.

242 Even though we acknowledge that Jerri disputes vigorously the

243 notion that this cash was criminally tainted, this argument is

244 unavailing to an inquiry of prejudice on the jury instruction.

245 That is, the jury’s decision to convict Jerri on the § 1957 charge

246 hinged upon its belief or disbelief that Jerri knew that the

247 minimum amount of $44,455.85 that the government contended was

248 criminally tainted was in fact tainted. The correctness of the

249 jury’s decision is not properly at issue under our review of the

250 court’s erroneous jury instructions,5 and, because the government’s

251 case posited that monies at least in excess of $10,000 were used in

252 the purchase of Jerri’s home, we find no prejudice.

253 C.

254 Hughes, Allen, and Jerri also assert as error the district

255 court’s failure to instruct the jury on the elements of the

256 specified unlawful activitySSthe importation, sale, or distribution

257 of cocaineSSthat formed the predicate act of the money laundering

5
Jerri properly raises these concerns in her appellate issues dealing with
the actual knowledge instruction and the sufficiency of the evidence presented
to prove knowledge.

11
258 charges. They do not suggest that the court failed to instruct the

259 jury that a finding of the specified illegal activity was required

260 to establish proof of the money laundering claim,6 but rather

261 assert that the court’s failure to enumerate the elements of the

262 activity prohibited the jury from making the appropriate finding.

263 We review the court’s failure to adopt the defendants’ proposed

264 jury instruction under the Pennington test described above.

265 Assuming arguendo that the proposed instruction was a correct

266 statement of law, we conclude that it was covered sufficiently in

267 the court’s instruction. The court instructed that it must find

268 “[t]hat the property involved in the financial transaction did in

269 fact represent the proceeds of some specified unlawful activity,”

270 defining “specified unlawful activity” as “any activity relating to

271 the sale and distribution of controlled substances.” The court

272 further remarked that “I advise you that the importation, sale, or

273 distribution of cocaine is a felony under federal law.” Given that

274 the drug traffickers themselves were not on trial and that the

275 instructions track the statutory language and embody all of the

276 essential elements of the crime, the instructions incorporate the

277 defendants’ proposed instruction substantially. See United States

6
Even assuming that the defendants have raised this argument on appeal,
we would review it under a plain error standard. Nowhere in Hughes’s citations
to his proposed jury instructions, by which he requested that the elements of the
illegal activity be read to the jury, did he propose that the court specifically
instruct the jury that they must find each of these elements in order to find
that the illegal activity occurred. Rather, Hughes asked that the elements be
read in connection with the mental state requirement of actual knowledge.

12
278 v. Golb, 69 F.3d 1417, 1429 (9th Cir. 1995), cert. denied,

279 116 S. Ct. 1369 (1996).

280 The defendants’ citations to United States v. Lovett, 964 F.2d

281 1029 (10th Cir.), cert. denied, 506 U.S. 857 (1992), and United

282 States v. McDuff, No. 94-20076 (5th Cir. Mar. 12, 1996) (unpub-

283 lished), do not convince us otherwise. Lovett addresses whether a

284 charge under the money laundering statutes, once the defendant has

285 been convicted of the predicate crime, raises a double jeopardy

286 question. The court mentions in dicta only that the elements of

287 the predicate crime are elements of the money laundering crime, but

288 says nothing about the sufficiency of jury instructions in a money

289 laundering case. See Lovett, 964 F.2d at 1041-42.

290 McDuff is also distinguishable, both because the predicate act

291 was bank fraud, a crime for which, unlike cocaine importation and

292 distribution in the instant case, most jurors would require a

293 precise explication of the elements, and because the district court

294 in McDuff never even mentioned the predicate act in the instruc-

295 tions on the money laundering claims. Id. at 8 (“FOURTH, the

296 criminally derived property must also, in fact, have been derived

297 from a specified unlawful activity.”). In contrast, the court in

298 the instant case made clear to the jurors that the predicate act

299 was cocaine importation and distribution.

300 Finally, even if we assume that the defendants have satisfied

301 the second prong of the Pennington test, they have not demonstrated

13
302 that the court’s failure to give the instruction seriously impaired

303 their ability to present a defense that the predicate crime had not

304 in fact occurred. In fact, the only dispute was whether the money

305 at issue had come from the specified unlawful activity, not whether

306 the specified unlawful activity actually had occurred. In

307 rejecting the defendants’ proposed instruction, the court remarked:

308 [S]muggling drugs and importing cocaine, is not a concept
309 that I think is so foreign that you would have to sit and
310 quote verbatim every statute that deals with that . . . .
311 I mean, there is supposed to be some common sense in
312 this, and the purpose of the jury charge is to tell
313 people what the law is so that they can make a common
314 sense factual determination, not to mire them.

315 We can find no evidence that raises any doubt that the jury would

316 have found differently on the laundering claims had the elements

317 been spelled out explicitly. In fact, we agree with the district

318 court that doing so would “confuse them and . . . make their fact-

319 finding mission more difficult by obfuscating common sense

320 determination of the facts.”

321 III.

322 Each of Hughes, Allen, and Jerri next contends that because

323 there was insufficient evidence, the district court erred in

324 allowing the money laundering claims to go to the jury. In

325 particular, the defendants allege that the government presented

326 insufficient evidence of their actual knowledge of the criminal

327 taint of the money involved. In deciding whether there was

14
328 sufficient evidence to support the verdict, we view the evidence

329 and the inferences that may be drawn in the light most favorable to

330 the verdict and determine whether a rational jury could have found

331 the essential elements of the offenses beyond a reasonable doubt.

332 United States v. Bustamente, 45 F.3d 933, 936 (5th Cir.), cert.

333 denied, 116 S. Ct. 473 (1995). The jury is free to choose among

334 reasonable constructs of the evidence, which need not exclude every

335 reasonable hypothesis of innocence. Id. Furthermore, we accept

336 all credibility choices that tend to support the verdict. United

337 States v. Gallo, 927 F.2d 815, 820 (5th Cir. 1991).

338 A.

339 Hughes first challenges the sufficiency of the knowledge

340 evidence with respect to Counts 4 (the July 21 Phoenix money pick-

341 up) and 5 (the August 1 secondary loan of $1.9 million from Allen).

342 Hughes contends that, because he did not meet with Chambers until

343 August 8, a rational jury could not have found that he knew about

344 the illegal origin of the monies prior to that time. The govern-

345 ment points us to several pieces of evidence from which it contends

346 that the jury could have inferred that Hughes had actual knowledge

347 of the criminal source of the funds, including Hughes’s structuring

348 activity that began almost immediately after his receipt of the

349 initial $1 million, the fact that the proceeds of the loans were

350 delivered in cash, Hughes’s traveling with Allen to Phoenix to pick

15
351 up nearly $2 million in cash from a storage facility, and the

352 jury’s disbelief of Allen’s Joe Brown story.

353 According to Hughes, the jury could not have ascribed any

354 significance to the structuring because the jury declined to

355 convict Hughes on Count 2 (the original $1 million loan from Betty

356 Allen on June 27) but so convicted him on Count 4 (the $2 million

357 Phoenix incident on July 21), notwithstanding the fact that the

358 jury was aware that Hughes began making structuring transactions

359 almost immediately after receiving the first $1 million. Had the

360 jury found the structuring important, Hughes asserts, it would have

361 convicted on Count 2 as well. We disagree.

362 Hughes’s suggestion misunderstands the application of a money

363 laundering charge to the events in question. The government

364 properly noted in the indictment, and the court so instructed the

365 jury, that Hughes could be found guilty of Count 2 only if he knew

366 of the illegality of the proceeds at the time of his receipt of the

367 money. Had the jury determined solely from the structuring

368 evidence, all of which followed in time the June 27 receipt of

369 $1 million, that Hughes had actual knowledge of the illegal source

370 of the money at the time that he received the money, the jury would

371 have been concluding, impermissibly, that Hughes should have known

372 at the time he accepted the money that it was from an illegal

373 source, because actions that he took subsequent to the receipt

374 evinced such knowledge, not that he actually knew of its illegality

16
375 at the time of receipt. Rather, the first time the jury could have

376 considered properly the structuring evidence was in their delibera-

377 tions on Count 4, not Count 2.

378 Thus, the government notes correctly that, with respect to all

379 counts that temporally followed Count 2, it posited a theory from

380 which the jury could infer actual knowledge of the illegality of

381 the proceedsSSevidence of Hughes’s structuringSSand that Hughes’s

382 failure to debunk this theory when he took the stand entitled the

383 jury to make such an inference.7 We agree that Hughes’s failure to

384 present the jury with a competing explanation for the structuring

385 entitled the jury to infer that his reason for so doing was to

386 avoid government scrutiny about the illicit source of money.

387 In addition to Hughes’s structuring, the jury also could have

388 inferred knowledge from the all-cash nature of the transactions,

389 Hughes’s accompanying Allen to a storage warehouse in Phoenix

390 wherein they found $2 million in cash that Hughes brought to

391 Dallas, and the jury’s own disbelief of Allen’s Joe Brown story.

392 Whether the jury believed, as Hughes wanted them to, that “[a]dmit-

7
Hughes, as do Allen and Jerri, notes that there are a number of innocent
reasons why one might wish to make deposits in such a way, and thus we should not
allow the jury to conclude that the structuring evinced knowledge of the
illegality of the proceeds. In fact, the defendants contend that Ratzlaf v.
United States, 510 U.S. 135, 144-45 (1994), expressly acknowledges that
structuring is “not inevitably nefarious.” The Ratzlaf Court invoked such
language, however, in response to the government’s suggestion that it need not
prove willfulness to sustain a conviction under 31 U.S.C. § 5324. We find
nothing in Ratzlaf that would prohibit a prosecutor in an 18 U.S.C. § 1956 case
from introducing structuring activities to evince a defendant’s knowledge of the
illegality of the monies being structured. The defendants had every opportunity
to debunk the government’s theory, and they may not now raise on appeal an
alternative explanation for the structuring.

17
393 tedly, the July 21, 1989 “Phoenix Incident” was somewhat out of the

394 ordinary” and that “Hughes was perhaps a bit naive in accepting

395 that [Joe Brown] story, and perhaps (in twenty-twenty hindsight) he

396 should have gone to greater lengths to verify its validity,” turned

397 upon its assessments of witness credibility and the weight of the

398 evidence, functions that are well within the province of the fact-

399 finder and that are beyond the scope of our review on appeal. We

400 find that a rational jury could have made such decisions in the

401 instant case.8

402

403 B.

404 Allen also challenges the sufficiency of the evidence to

405 support the finding that she had knowledge of the criminal origin

406 of the money. Allen notes correctly that Chambers testified that

407 he never actually told her that his money was drug-tainted, and

408 thus she concludes that the jury should have believed her Joe Brown

409 story. What Allen neglects, however, is the additional evidence

410 that Betty knew that Chambers had a drug problem, that she had

411 testified at his detention hearing in May 1989, during which time

8
Because we find sufficient evidence to affirm on Counts 4 and 5, each of
which occurred prior to the August 8 meeting with Chambers, we need not address
Hughes’s sufficiency claims with respect to the subsequent counts. We note
briefly, however, that, notwithstanding the variance between the parties’
accounts of the meeting, Hughes does admit that at a minimum Chambers did
indicate that the money belonged to him, that he had once worked for a man named
Pablo Acosta, that he had inherited Acosta’s “turf,” and that Acosta was “like
a godfather” to Chambers. A reasonable jury could have inferred from this
additional evidence, when considered in light of the previous evidence of
knowledge, that Hughes had knowledge of the illegality of the proceeds.

18
412 allegations of his drug dealing were made in her presence, that she

413 held large sums of cash for Chambers in a safe in her house, that

414 she instructed Hughes to structure his loan deposits, and that she

415 had traveled with Hughes to Phoenix to collect $2 million in cash

416 from a storage facility and with Jerri and Pierce to Alpine to

417 collect an additional $1.9 million in cash. Whether, in light of

418 this additional circumstantial evidence of knowledge, the jury

419 disbelieved the Joe Brown story is beyond the scope of our review.

420 A rational jury could have found sufficient evidence of knowledge

421 beyond a reasonable doubt.

422 C.

423 We similarly reject Jerri’s sufficiency challenge.9 Again,

424 Jerri contends that Chambers’s testimony that he never told her

425 that he was in fact a drug dealer compels a reversal. The evidence

426 did establish, however, that Jerri was aware of the large sums of

9
As a preliminary matter, we must decide whether Jerri’s sufficiency claim
should be reviewed with reference to the evidence presented in the government’s
case-in-chief only or with reference to the additional testimony elicited by
Jerri from Allen and her brother. Where a defendant rests his case at the end
of the government’s case-in-chief, a reviewing court may consider the sufficiency
of the evidence solely from the evidence presented in the government’s case-in-
chief. See United States v. Casilla, 20 F.3d 600, 606 (5th Cir. 1994).
Sufficiency review is similarly constrained where a defendant rebuts testimony
offered against him by another co-party, without attempting to rebut the
government’s case-in-chief. See United States v. Belt, 574 F.2d 1234, 1237 (5th
Cir. 1978). Where, however, a defendant introduces co-party testimony intended
to exculpate him and uses that testimony in closing argument to support his case,
a reviewing court may review all of the evidence presented. See United States
v. Cardenas Alvarado, 806 F.2d 566, 570 n.2 (5th Cir. 1986). Because Jerri
elicited testimony from Allen and her brother that was intended to exculpate her,
and argued such evidence to the jury on closing, we may review all of the
evidence presented.

19
427 Chambers’s cash being stored in her mother’s home, that she opened

428 the safe on at least two occasions to allow Chambers to withdraw

429 money, that she accompanied her mother and Pierce on the Alpine

430 plan trip to pick up the $1.9 million in cash, and that she

431 purchased a new home with monies that she had previously struc-

432 tured. Jerri did attempt to explain away her behavior with regard

433 to her house purchase by eliciting testimony from Allen regarding

434 the derivation of the monies, and she also invoked Betty’s Joe

435 Brown story. Yet, as was the case with Allen, the jury was within

436 its rights to disbelieve this story and to conclude, in light of

437 the other evidence, that Jerri knew of the criminal source of the

438 monies.

439 D.

440 Hughes and Jerri next challenge the sufficiency of the

441 evidence presented to prove that the financial transactions at

442 issue were designed “to conceal or disguise the nature, the

443 location, the source, the ownership, or the control of the proceeds

444 of specified unlawful activity.” 18 U.S.C. § 1956(a)(1)(B)(I). In

445 so doing, they argue that we should look not to their own intent,

446 but rather to the intent of Chambers. Because, they allege, it is

447 undisputed that Chambers never intended to conceal in any way the

448 proceeds of his alleged unlawful activity, they cannot be held

449 liable for money laundering.

450 This objection is without merit, as the following exchange on

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451 direct examination between Chambers and the government illustrates:

452 Q. And why did you start stashing your money in
453 Marathon, Texas, with Betty Allen?

454 A. Because I trusted her. She was my friend and I felt
455 it was the safest place for my money at the time.

456 Q. Did you have any intent to hide the money from law
457 enforcement officers?

458 A. Yes, ma’am.

459 Q. And why is that, sir?

460 A. Well, I wouldn’t have any means to prove that it was
461 mine.

462 The government need only prove that Hughes and Jerri were

463 aware of Chambers’s and Allen’s intention to conceal or disguise

464 the nature of the money, not that Hughes and Jerri themselves so

465 intended. See United States v. Campbell, 977 F.2d 854, 858 (4th

466 Cir. 1992), cert. denied, 507 U.S. 938 (1993). Additionally, the

467 fact that Allen’s and Chambers’s names were listed on the promis-

468 sory notes documenting the purported loan transactions does not

469 undermine the government’s case. See Lovett, 964 F.2d at 1034 n.3

470 (noting that the money laundering statute is “not aimed solely at

471 commercial transactions intended to disguise the relationship of

472 the item purchased with the person providing the proceeds; the

473 statute is aimed broadly at transactions designed in whole or in

474 part to conceal or disguise in any manner the nature, location,

475 source, ownership or control of the proceeds of unlawful activ-

476 ity.). The jury was entitled to infer from the defendants’

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477 knowledge of the illegal source of the proceeds that they were

478 aware of Allen’s and Chambers’s intent to conceal the monies. See

479 Campbell, 977 F.2d at 858.

480 We disagree with defendants that United States v. Dobbs,

481 63 F.3d 391 (5th Cir. 1995), and United States v. Gonzalez-

482 Rodriguez, 966 F.2d 918 (5th Cir. 1992), require anything differ-

483 ent. In Gonzalez-Rodriguez, we reversed a money laundering

484 conviction against the girlfriend of an alleged drug dealer because

485 we noted that her disclosure to law enforcement officials that she

486 was carrying $8,000 in cash followed by her turning the money over

487 to the officials to count hardly evinced an intent to conceal or

488 disguise the funds. Id. at 926. Where, as here, such intent is

489 present, Gonzalez-Rodriguez is inapposite. Similarly, Dobbs merely

490 reiterates the general requirement that the government must prove

491 that the transactions were designed at least in part to launder

492 money, “or otherwise to conceal the nature of funds so that it

493 might enter the economy as legitimate funds.” 63 F.3d at 397. The

494 government has met its Dobbs burden.

495 V.

496 A.

497 Hughes next challenges the enhancement of his sentencing

498 offense by four levels under U.S.S.G. § 3B1.1(a). He asserts both

499 that the district court erred because it failed to find that Hughes

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500 was a “leader or organizer” and because it had insufficient

501 evidence to determine that the scheme was “otherwise extensive.”

502 We review the factual finding that a defendant is a leader or

503 organizer for clear error. See United States v. Valencia, 44 F.3d

504 269, 271-72 (5th Cir. 1995). “A factual finding is not clearly

505 erroneous if it is plausible in light of the record read as a

506 whole.” Id. at 272.

507 Section 3B1.1(a) has two requirements: (1) The defendant must

508 have been an organizer or leader of one or more other participants

509 in the criminal activity, and (2) the scheme must have either

510 included five or more participants or been otherwise extensive.

511 U.S.S.G. § 3B1.1(a). The commentary defines a “participant” as a

512 person who is criminally responsible for the commission of the

513 offense, but who need not have been convicted. Id. commentary

514 n.1.; United States v. Gross, 26 F.3d 552, 554-55 (5th Cir. 1994).

515 We do not find clear error in the conclusion that the criminal

516 activities were “otherwise extensive.” The court noted that the

517 record reflected the participation of numerous people conducting

518 numerous transactions, including structuring 199 deposits in more

519 than eleven financial institutions over a seven-month period. In

520 light of the record as a whole, the court’s findings are more than

521 plausible.

522 Similarly, we reject Hughes’s argument that the court failed

523 to make a finding that he was a leader or organizer of one or more

23
524 criminally responsible persons. The court made an explicit finding

525 of leadership: ”So with regard to that, as well as the direction

526 that was being given, I think the testimony specifically was that

527 Ronald Hughes, Jr., was following orders of Ronald Hughes, Sr., as

528 was Rhonda Hughes as well, in making these deposits.” (Emphasis

529 added.)

530 With respect to a finding regarding the criminal responsibil-

531 ity of those to whom Hughes gave directions, the district court

532 adopted the presentence report (“PSR”), which contains a finding of

533 criminal responsibility on the part of the Hughes children and the

534 company comptroller. Specifically, the court stated, “All other

535 objections affecting the guidleine calculations are overruled, and

536 I accept the presentence report and the addendums thereto.”

537 Although the finding could have been made more specific, we do not

538 see clear error in the determination of criminal responsibility.10

539 B.

540 Jerri objects to the district court’s findings at her

541 sentencing hearing. We have held that under the sentencing

542 guidelines for conspiratorial conduct, a district court must find

543 both (1) that the defendant agreed to undertake jointly criminal

10
Hughes relies on United States v. Ronning, 47 F.3d 710 (5th Cir. 1995),
to argue that as a matter of law he could not have been an organizer or leader.
In Ronning, however, we said only that an organizer or leader, in order to be so
classified, must control or influence other people. Id. at 712. The district
court so found that Hughes acted as a leader with respect to Hughes, Jr., and
this finding is not clearly erroneous.

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544 activities and that the particular crime was within the scope of

545 that agreement and (2) that he could have reasonably foreseen the

546 criminal activity. See United States v. Evbuomwan, 992 F.2d 70, 74

547 (5th Cir. 1993).

548 Although a court must make an express finding that the

549 conspiratorial activity at issue satisfies these requirements, we

550 nevertheless have rejected the proposition that the court must make

551 a “catechismic regurgitation of each fact determined.” United

552 States v. Sherbak, 950 F.2d 1095, 1099 (5th Cir. 1992). Courts may

553 adopt the findings of the PSR, but they must make it clear that

554 they have so adopted the PSR, in order that the reviewing court is

555 not left to second-guess the basis for the sentencing decision.

556 United States v. Carreon, 11 F.3d 1225, 1231 (5th Cir. 1994).

557 We disagree with Jerri that the court failed to make findings

558 that the monies attributed to her were within the scope of the

559 agreement and were reasonably foreseeable to her. The probation

560 office, in preparing the PSR, enhanced Jerri’s sentence based upon

561 her participation in the conspiracy to launder in excess of $3.5

562 million. In a written objection to the PSR, Jerri argued that she

563 should not be held accountable for that entire amount, but rather

564 that her liability was limited to the $90,000 used in the purchase

565 of her home. The probation office, in response, filed a written

566 addendum noting that the court was entitled to make such a finding,

567 but, in any event, Jerri would not be entitled to a role reduction.

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568 The district court at the sentencing hearing explicitly adopted the

569 PSR and the addendum and entertained Jerri’s objections.

570 Jerri again argued at the hearing that her responsibility was

571 limited to the $90,000 home purchase “although she assisted her

572 mother by attending that [August 8 Chambers] meeting much later

573 after all the events were pretty well concluded.” After a long

574 colloquy with Jerri and with the government, the court finally

575 overruled Jerri’s objections, noting:

576 I find the tape recording, clearly that aloneSSplus there
577 was other evidence in this case. As I recall, there was
578 the Sons of the West theater and the involvement with
579 that.

580 And, again, her participation, which certainly the
581 participation in the discussion on that tape, as I recall
582 it, would not be considered minimal. I mean, I seem to
583 recall she was a player in the conversation.

584 The court’s findings are not clearly erroneous. We agree with

585 the government that “while the finding is not a model of clarity,

586 it is plain enough when read in context” and demonstrates attention

587 to the two Evbuomwan factors. Unlike the court in Hooten, 942 F.2d

588 at 881, which summarily refused to address the defendant’s

589 objections to the PSR and thereby left no basis for the appellate

590 court to review its factual findings, the instant court entertained

591 Jerri’s objections and ultimately found them factually erroneous.

592 Thus, with an ample predicate for the court’s findings on record,

593 we find no clear error.

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594 C.

595 Finally, Jerri argues that although the jury found that she

596 knew the monies were derived from some specified unlawful activity,

597 it never found expressly that she knew that the monies were derived

598 from the importation, sale, or distribution of narcotics. Thus,

599 she asserts, the enhancement of her sentence for involvement with

600 narcotics or controlled substances is clearly erroneous. The PSR

601 addressed this argument in a written addendum, noting that each of

602 Count 1 and Count 15 under which Jerri was convicted required that

603 the jury find that Jerri had knowledge that the source of the

604 monies was from “some specified unlawful activity, that is, the

605 sale and distribution of narcotics.” Furthermore, the PSR made its

606 own factual findings in this regard, pointing to the evidence in

607 the record to support Jerri’s awareness of the drug taint of the

608 money.11

609 As noted above, the district court need not undertake a

610 “catechismic regurgitation of each fact determined,” Sherbak, 950

611 F.2d at 1099, but may adopt the factual findings of the PSR. The

612 court so adopted the PSR in the instant case, and we do not see

11
Jerri cites United States v. Medina, 992 F.2d 573, 591 (6th Cir. 1991),
cert. denied, 510 U.S. 1109 (1994), incorrectly to require in all cases that the
district court (or PSR) make factual findings independent of the jury’s findings.
This reading is simply erroneous. Medina notes only that the jury’s decision to
convict a defendant, based in part upon their disbelief of the credibility of his
testimony, is an insufficient basis upon which the sentencing court may then
apply an obstruction of justice enhancement for perjury. Medina does not require
generally that such independent findings must be made, but only that the court
must do so where the jury’s verdict is insufficient to meet the burden of proof
required for the alleged enhancement.

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613 clear error in its factual conclusions.

614 The judgments of conviction and sentence are AFFIRMED.

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