United States v. Castellini

United States Court of Appeals
For the First Circuit

No. 03-2252

UNITED STATES OF AMERICA,

Appellee,

v.

RICHARD CASTELLINI,

Defendant, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Joseph L. Tauro, U.S. District Judge]

Before

Selya, Circuit Judge,
Stahl, Senior Circuit Judge,
and Lynch, Circuit Judge.

James C. Rehnquist, with whom Sarah Heaton Concannon and
Goodwin Procter LLP were on brief, for appellant.
Allison D. Burroughs, Assistant United States Attorney, with
whom Michael J. Sullivan, United States Attorney, was on brief, for
appellee.

December 15, 2004
 LYNCH, Circuit Judge. Richard Castellini ("Castellini"),

a married man with three children and no prior criminal record, was

convicted of the crime of money laundering the proceeds of a

bankruptcy fraud and conspiracy to money launder. 18 U.S.C. §§

1956(a)(3), (c)(7)(D), (h). In fact, the fraud was part of a sting

operation by the government which ensnared at least six people.

All were associated with Anderson Ark and Associates ("AAA"), a

Costa Rican company which moved money offshore through trusts in

several countries before returning the "cleansed" (but diminished)

funds to investors.

At trial, Castellini testified and portrayed himself as

an innocent and naive dupe, not a criminal, who was misled by

Richard Gonet ("Gonet"), the architect of the money laundering

scheme and chief malefactor. In fact, Castellini testified that he

had been victimized by AAA and Gonet, who fleeced him of his own

money. It was Gonet who introduced Castellini to his troubled

friend "Jim Mitchell," and asked him to do two financial

transactions for Mitchell. Unfortunately for Castellini,

"Mitchell" was in fact James Dowling ("Dowling" or "Agent

Dowling"), an undercover agent in a sting operation mounted by the

Internal Revenue Service ("IRS") against Gonet.

The two financial transactions Castellini was asked to,

and did in fact, engineer involved multiple offshore transfers of

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Mitchell's money; Mitchell told Castellini the monies were being

hidden from the bankruptcy court.

Castellini was tried alone. Gonet pled guilty (but did

not testify for the government). A properly instructed jury found

that Castellini had engaged in money laundering by conducting

financial transactions involving property represented to be the

proceeds of "specified unlawful activity," "with the intent . . .

to conceal . . . the nature, location, source, ownership, or

control of property believed to be the proceeds of specified

unlawful activity." 18 U.S.C. § 1956(a)(3).

On appeal, Castellini attacks his conviction and

sentence.1 First, he argues that the guilty verdicts on Counts One

(for conspiracy to launder), Five, and Six (for the two instances

of actual laundering) should be reversed for insufficiency of

evidence. Second, he argues that he is entitled to a new trial for

errors in the admission of coconspirator statements not meeting the

requirements of United States v. Petrozziello, 548 F.2d 20, 22-24

(1st Cir. 1977).

The insufficiency argument is premised on the correct

principle that the "proceeds" used for money laundering must be

"proceeds" from a different illegal activity than the illegal

activity of money laundering itself. United States v. Mankarious,

1
The government also cross-appealed Castellini's sentence in
No. 04-1339. On December 2, 2004, the cross-appeal was dismissed
pursuant to Fed. R. App. P. 42(b) upon the government's motion.

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151 F.3d 694, 705 (7th Cir. 1998). The argument is that the agent

did not explicitly or implicitly "represent" that the money

Castellini laundered was the proceeds of a specified "unlawful

activity," but rather left Castellini with the sense that at most

he was helping in the commission of a bankruptcy fraud, not that he

was laundering the money derived from an ongoing bankruptcy fraud.

While skillfully presented, existing case law dooms the argument.

The Petrozziello arguments are also far from frivolous; but they,

too, do not prevail, because the statements were admissible on

other grounds or their admission was harmless.

Castellini was sentenced to twenty-one months'

imprisonment; he was not ordered to pay a fine. Castellini attacks

this sentence. He argues that the district court wrongly concluded

that it did not have authority to consider granting him a downward

departure for aberrant conduct. The record reflects that the

district court knew it had the authority but did not think

Castellini qualified to receive the reduction given that more than

one transaction was involved. We have no jurisdiction to review

that determination. Castellini also argues for the first time on

appeal that his sentence violated Blakely v. Washington, 124 S. Ct.

2531 (2004). We reject that challenge because there was no plain

error.

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 I.

We set out the facts in the light most favorable to the

jury's verdict. United States v. Glaum, 356 F.3d 169, 172 (1st

Cir. 2004).

This case involves one of two prosecutions of the leaders

of and persons associated with AAA.2 AAA is a Costa Rican company

which was the central marketing instrumentality for money

laundering schemes to move the proceeds of illegal activity out of

the United States via entities such as offshore trusts and then to

repatriate such funds back to the United States so as to make the

proceeds appear to be from legitimate sources. The conspiracy

involved individuals spanning the continent from California to

Massachusetts and from Washington to Costa Rica.

In December of 1998, after months of investigations, the

Criminal Investigation Division of the IRS began a sting operation

targeted at Michael Gonet, a Massachusetts resident who had been

2
AAA's leader, Keith Anderson ("Anderson"), was also involved
in an organization called Global Prosperity and possibly another
organization called Investors International. The record is not
entirely clear as to what the relationships between the different
organizations were, but it appears that Anderson left Global
Prosperity at some point and founded AAA. Some of Castellini's
business dealings described later on in this case were with
coconspirators (notably Anderson and Roosevelt Drummer ("Drummer"))
when they were involved with Global Prosperity. The government and
Castellini, in their briefs, refer to AAA even when discussing
transactions involving Global Prosperity. For ease of reference,
therefore, AAA is used throughout this opinion to refer to both
Global Prosperity and AAA.

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promoting and marketing offshore trusts. Gonet did not work for

AAA but ended up leading the sting operation to the leaders of AAA.

Agent Dowling first contacted Gonet by telephone on

December 18, 1998. As "Jim Mitchell," Agent Dowling told Gonet a

cover story that he ran a company named Pyramid Financial and owned

three Burger King restaurants in the Phoenix, Arizona area. He

said he had been sued for sexual harassment and was at risk of

being forced into personal and corporate bankruptcy. As a result,

he said he wanted to conceal some of his assets, namely, $100,000

in cash in a safe deposit box and $300,000 in a corporate bank

account, from the bankruptcy court. Agent Dowling asked Gonet for

help in concealing the funds from the bankruptcy court.3 Gonet

responded affirmatively. Dowling then asked, as a way to move the

money, whether Gonet, who had a company in the Bahamas, could "send

[Dowling] invoices and [Dowling] could pay the invoices." Gonet

told Dowling that this was possible. In a second phone call on

December 30, 1998, Gonet and Agent Dowling discussed in some detail

how they might move the funds. Gonet told Dowling, "I have a

3
Virtually all of the conversations between Agent Dowling and
the targets of the sting operation, whether by telephone or in
person, were recorded. In total, over 400 conversations were
recorded. Approximately twenty-three of these recordings were
played for the jury during the trial, and five of those recordings
form the basis of a hearsay challenge that Castellini asserts here.
Castellini testified about his conversations with Gonet to which
Agent Dowling was not a party, but these were, for obvious reasons,
not recorded.

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[consulting] company that I can bill it through, you know, however

much you want me to bill it."

On January 22, 1999, Gonet and Agent Dowling met in

person for the first time. Agent Dowling gave Gonet $60,000 in

cash, which he told Gonet he wanted to conceal from the bankruptcy

court. Gonet moved the cash in installments to an offshore trust

account and then back to an undercover bank account designated by

Dowling at LaSalle Bank in Chicago in the name of Century

Marketing. Gonet kept $9,000 as his fee for assisting Dowling.

Castellini visibly entered the picture around March 11 or 12, 1999.

Castellini testified that he first met Gonet in 1997,

when Gonet tried to sell Castellini an offshore trust. Castellini

explained to Gonet that he already had the use of an offshore

structure through a complex business organization ("CBO") set up

for him by AAA. Castellini had been involved with AAA since 1996,

when he began to buy tapes and attend seminars offered by AAA

purporting to teach strategies for minimizing taxes. In 1997, as

a way to reduce taxes from his own business, Castellini paid

$28,000 to have the CBO set up for him by the head of AAA,

Anderson, and AAA's head accountant, Drummer, an unindicted

coconspirator who also became Castellini's accountant. In late

1997, in accordance with Drummer's advice, Castellini moved about

$175,000 of his own money, listed as a bogus "management fee,"

through the CBO in order to reduce his taxes. For this service,

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AAA charged him a 5% fee. These were the only times that

Castellini used the CBO prior to his involvement in the activities

in this case. Castellini also invested in various schemes offered

by AAA members, but he lost money on all of them.

Castellini testified that Gonet called him on either

March 11 or March 12, 1999, to ask him whether he still had his CBO

and whether a third party would be allowed to use it. Gonet also

explained Dowling's situation to Castellini. After Castellini

consulted Drummer, he called Gonet back on March 15, 1999, and told

Gonet that it was okay to use his CBO for somebody else's money.

Gonet and Agent Dowling spoke twice on March 16, 1999.

Gonet told Dowling that he did not have the ability to move the

money in the corporate bank account and he was concerned about the

paper trail. Gonet did suggest to Dowling a way that the funds

could be moved. He explained that he knew of a management company

that could generate an invoice for non-existent "management

consult[ing]" work. After Dowling paid the invoice with a check

drawn on his corporate bank account, "the management company

[would] take the funds, deposit them, and then move the funds

offshore, and then ultimately back to wherever [Dowling] want[s]

them." Gonet explained that the management company could move

anything over $175,000 and still raise no suspicion for the high

amount charged on the invoice because it did "this as a matter of

business on a daily basis." Gonet said that the management

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company, a "Nevada corporation . . . connected with a huge offshore

conglomerate," would charge a fee of 25% of the funds moved in this

way, and that Gonet's own fee would come out of that 25%. Gonet

also assured Dowling that there would be no problems if the

bankruptcy court questioned the management company because "they

deal with this everyday. It's not like they're coming up with a .

. . new defense . . . . They do it all the time."

Two days later, on March 18, 1999, Gonet and Dowling met

in Florida. During this meeting, which was videotaped, Dowling

gave Gonet another $40,000 in cash for Dowling to move offshore and

then back into the LaSalle Bank account as before. Gonet also

agreed to see if someone from the management company would speak

with Agent Dowling directly about moving the funds in his corporate

bank account.

On March 29, 1999, Gonet called Castellini, explained

Dowling's situation in more detail, and asked Castellini to help

Dowling move his money. Gonet in turn told Agent Dowling to expect

a call from someone in the management company which they had been

discussing.

The next day, Castellini called Agent Dowling and told

him that Gonet had explained his situation to him. Castellini said

that he could help Agent Dowling to retain control of and hide from

the bankruptcy court the $300,000 in the corporate bank account by

using Castellini's management company, RLC Management. RLC

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Management is a Nevada company which Castellini controlled as part

of his CBO. Castellini suggested that Agent Dowling give RLC

Management checks drawn on Pyramid Financial's corporate account;

RLC Management would then move the funds through its "majority

shareholder," a domestic trust, offshore into a foreign trust, and

thence through a series of offshore bank accounts under

Castellini's and Gonet's direction until the funds were deposited

back in the United States into a bank account controlled by Agent

Dowling. (Castellini later explained that RLC Management is

actually a Nevada partnership, and the domestic trust is a 99%

partner in the partnership.) Castellini told Dowling that this

whole structure was set up by "an attorney and a former IRS Agent"

as a way to use "the laws that are in place to the fullest extent."

Agent Dowling asked Castellini, "[H]ow do I get [the money

offshore] back then?" Castellini responded, "[T]here's different

vehicles for you to use [such as] . . . business corporations . .

. or . . . trusts." Castellini also said, "[A]s far as you getting

use of the funds afterwards, you . . . talk to Mike on [sic] that

regard."

Consistent with what Gonet had said earlier, Castellini

said he would invoice Pyramid Financial, Agent Dowling's company,

for bogus "management . . . consulting fee[s]" so that the check

would look like a "legitimate . . . business expense" even though

no consulting work would be done for Dowling. Agent Dowling asked

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Castellini, "[A]ll I do is just don't tell anyone about the

transaction then?" Castellini replied, "[A]s far as you know, you

hired us to do some consulting. . . . [A]s the rest of it goes,

you don't . . . know anything." Castellini told Dowling that he

should not "tell the attorney" about the transaction because then

Dowling would be told by the bankruptcy counsel to list the funds

on the bankruptcy petition. Castellini confirmed that he could

handle transactions between $175,000 and $200,000, and that the fee

would be 25%, with Castellini taking care of Gonet's share. Agent

Dowling consented to the "pretty steep" fee.

Castellini urged Dowling to delay the bankruptcy filing

as long as possible because the trustee looks "pretty heavily" at

transactions during the "last 90 days" and they did not want to

"raise a red flag." In order to lessen the likelihood that the

bogus transaction would be scrutinized, Castellini suggested that

the invoices be backdated to February and advised Dowling to

backdate the checks to RLC to be from the same time as the most

recent group of checks he had written subsequent to the invoice

date so that the false checks would not "stick out like a sore

thumb." Castellini also offered to generate some "paperwork," such

as a management report or proposal, as supporting documentation for

the false invoices.

When Agent Dowling said he was a little "nervous" about

the transactions because his attorney might, as he had in the past,

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"jump[] up and down about, you know, bankruptcy fraud," Castellini

told him, "[Y]ou're not committing . . . fraud if you hire a

company to come in and . . . provide a service." But Castellini

also acknowledged that no services would actually be provided.

Agent Dowling asked Castellini, "[T]he only one knows [sic] about

the 'service' will be you and me[?]" Castellini replied, "Right.

They don't know, they don't have to know what happened to it."

Agent Dowling asked Castellini, "[H]ave you ever done this before?"

Castellini replied, "I've never had anyone come back and ask. . .

. [I]t's never been questioned."

On April 8, 1999, Castellini called Dowling to initiate

their plan, or, in his words, "do that invoice thing." Castellini

told Dowling that he would make out an invoice in the amount of

$30,000 dated February 1, 1999, and instructed Dowling to write out

a check dated the same as the last time in February when Dowling

thought he wrote out other checks. This invoice was sent on April

20, 1999.

On April 29, 1999, Castellini and Agent Dowling met at a

restaurant in New Jersey, where Dowling gave Castellini a check for

$30,000, dated February 8, 1999, and made out to RLC Management, in

"payment" for the false consulting invoice Castellini had sent to

Agent Dowling. After a two-hour lunch, the two engaged in the

following conversation to justify the false invoice:

Agent Dowling: So, and on this thing here,
you've chosen 25 percent. Is there anything,

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 if something ever happens, you'll be on my
team, and that's what the 25 percent -- That's
kind of high.
Castellini: If something ever happens,
whatever happens, they call me. And I can
verify that we consulted. I mean, it's as
simple as that. I'm not hiding anything. Did
you and I just consult over business ventures
and strategies?
Agent Dowling: We've been talking [sic] hiding
my money.
Castellini: Did we discuss business
strategies?
Agent Dowling: Sure.
Castellini: Yes. We're not lying, are we?
Hiding your money is a business strategy,
isn't it?
Agent Dowling: You've got a point. That's a
great point.

Castellini deposited the $30,000 check into the RLC

Management account and then transferred the money to the account of

Sawtooth Enterprises, another AAA account available to Castellini.

From the Sawtooth account, the funds -- minus the 25% fee for

Castellini and Gonet -- moved through banks in Vienna, Austria,

Costa Rica, the Isle of Man, the Bahamas, and ultimately, back to

Agent Dowling's Century Market account in LaSalle Bank, Chicago.

Castellini and Gonet both took part in directing the money

transfers, and some of the accounts belonged to Gonet.

A few days later, during a telephone conversation on May

4, 1999, Castellini told Dowling that he had made up another false

invoice for $170,000 dated March 15, 1999, which he was going to

send out to Dowling. He asked Dowling to "trash the envelope" when

he got the invoice because "it will have a postmark [much later

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than the false date of the invoice] on it and stuff like that."

Agent Dowling did receive such an invoice. However, due to a

conversation that Dowling later had with Castellini's accountant,

Drummer, nothing further was done with this false invoice.

In September of 1999, Castellini sent Dowling another

invoice for "consulting services" backdated July 30, 1999, for

$30,000, and Agent Dowling made out a check in that amount,

backdated July 31, 1999, to RLC Management.4 The money went on the

same world-wide tour as the first $30,000. Ultimately, $22,500,

representing the balance after the 25% fee, was deposited in the

Century Market account.

Having himself successfully transferred $60,000 for

Dowling, Castellini referred Dowling to Richard Marks ("Marks"),

another coconspirator ultimately indicted along with Castellini,

for further money transfers. Marks controlled Sawtooth

Enterprises, which was one of the entities through which the

$60,000 Castellini helped Dowling hide had moved. During a

telephone conversation on October 18, 1999, Castellini told Dowling

that he would "give Richard [Marks] the whole overview of what your

situation is and, you know, what we've done so far." On November

4
As the result of a conversation between Agent Dowling and
Castellini's accountant, Drummer, who advised Agent Dowling to
increase the wages he paid himself from his company, this check was
drawn on Agent Dowling's personal account rather than the Pyramid
Financial corporate account.

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1, 1999, Castellini told Dowling that Marks had agreed to speak

with Dowling directly.

Thereafter, Marks helped Agent Dowling hide $150,000

before referring Agent Dowling to Wayne Anderson. Wayne Anderson

was the brother of Keith Anderson, and was himself also a leader in

AAA. Ultimately, Wayne Anderson helped Dowling hide $100,000.

In late 2000, Pyramid Financial, Agent Dowling's

fictitious company, filed its bankruptcy petition (the bankruptcy

court was informed ahead of time that the petition was fictitious

and the petition was ultimately dismissed). Agent Dowling and

another IRS agent posing as his fiancée met Castellini and his wife

in February 2001 to let Castellini know that bankruptcy had been

filed and "to thank him for his help." Eight days after this

dinner meeting, Castellini was arrested.

Castellini testified that he made no money from the

transactions he conducted for Dowling because, out of the 25% fee,

Gonet took 15% and left 5% each for AAA and Castellini, but AAA

refused to send Castellini his share.

II.

On March 29, 2001, a federal grand jury in the District

of Massachusetts indicted Richard Castellini and codefendants Keith

Anderson, Wayne Anderson, Karolyn Grosnickle, Richard Marks, and

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Michael Gonet.5 Count One of the indictment charged Castellini

with conspiracy to launder money in violation of 18 U.S.C. §

1956(h); Counts Five and Six charged Castellini with money

laundering in violation of 18 U.S.C. § 1956(a)(3) based on the two

separate $30,000 transactions. All of the charges were premised on

the fictional "specified unlawful activity" of bankruptcy fraud in

violation of 18 U.S.C. § 152.6 The relevant portion of the "money

laundering sting" statute, 18 U.S.C. § 1956(a)(3), provides that:

Whoever, with the intent --
(A) to promote the carrying on of
specified unlawful activity; [or]
(B) to conceal or disguise the nature,
location, source, ownership, or control of
property believed to be the proceeds of
specified unlawful activity;
. . .
conducts or attempts to conduct a financial
transaction involving property represented to
be the proceeds of specified unlawful activity
. . . shall be fined under this title or
imprisoned for not more than 20 years, or
both. For purposes of this paragraph . . . ,
the term "represented" means any
representation made by a law enforcement
officer or by another person at the direction
of, or with the approval of, a Federal

5
On May 24, 2001, all charges against the Andersons,
Grosnickle, and Marks were dismissed, on motion of the government,
in favor of prosecution in the Eastern District of California.
Gonet pled guilty to all charges against him in the District of
Massachusetts.
6
The statute imposes criminal liability on any person who "in
contemplation of a case under title 11 [the Bankruptcy Code] . . .
or with intent to defeat the provisions of title 11, knowingly and
fraudulently transfers or conceals any of his property." 18 U.S.C.
§ 152(7).

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 official authorized to investigate or
prosecute violations of this section.

Castellini's jury trial began on July 8, 2002. The government

elected to proceed only on Counts One, Five, and Six. The trial

lasted seven days.

During trial, the government played excerpts of twenty-

three recorded conversations between Agent Dowling and members of

the conspiracy. Of these, five conversations were with Gonet,

thirteen were with Castellini, four were with Marks, and the last

one was with Grosnickle. One of the conversations involving Gonet

was the March 18, 1999 meeting in a Florida hotel room between

Agent Dowling and Gonet, and the government played a videotape

recording of the meeting.

At the outset of the government's case, the district

court allowed the defense to lodge a continuing hearsay objection

to the admission of each of these recordings of conversations

between Agent Dowling and the alleged coconspirators. The defense

renewed this objection on the third day of the trial. The

objections were overruled by the trial court but preserved for

appeal. The defense also moved for a mistrial on the basis of the

admission of this evidence after the government rested, at the

close of all the evidence, and after the verdict. These motions

were denied.

On July 19, 2002, the jury found Castellini guilty on all

three counts. At his August 12, 2003 sentencing hearing,

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Castellini moved for a downward departure for "aberrant behavior"

under U.S. Sentencing Guidelines Manual § 5K2.20. Castellini

argued that the charged conduct was an "eight-month lapse in a 38-

year life of good citizenship." The district court denied the

motion, saying, "I think that this is a departure in terms of his

behavior. You know, that eight-month period . . . is like a black

hole in an otherwise reasonable life. But I don't believe that it

adds up to the downward departure that you are talking about." The

court sentenced Castellini to twenty-one months' imprisonment but

did not impose a fine and stayed Castellini's sentence pending

appeal.

Castellini timely filed his notice of appeal on August

19, 2003.

III.

We address in turn each of Castellini's claims on appeal.

A. Sufficiency of the evidence

On challenges to sufficiency of the evidence, we take all

the evidence and inferences in the light most favorable to the

verdict and ask whether a rational factfinder could find, beyond a

reasonable doubt, that the prosecution successfully proved the

essential elements of the crime. Jackson v. Virginia, 443 U.S.

307, 319 (1979); United States v. O'Brien, 14 F.3d 703, 706 (1st

Cir. 1994).

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 The essential elements of the money laundering sting

statute are:

Whoever, with the intent --
(A) to promote the carrying on of
specified unlawful activity; [or]
(B) to conceal or disguise the nature,
location, source, ownership, or control of
property believed to be the proceeds of
specified unlawful activity;
. . .
conducts or attempts to conduct a financial
transaction involving property represented to
be the proceeds of specified unlawful activity
. . . shall be fined under this title or
imprisoned for not more than 20 years, or
both.

18 U.S.C. § 1956(a)(3) (emphasis added). The statute further

defines the term "represented" as "any representation made by a law

enforcement officer or by another person at the direction of, or

with the approval of, a Federal official authorized to investigate

or prosecute violations of this section." Id.

A money laundering defendant must act with a certain type

of intent. One sort of requisite intent is the intent to "conceal

. . . the nature, location, source, ownership, or control of

property believed to be the proceeds of specified unlawful

activity." Id. (emphasis added). The intent requirement is

bolstered by the requirement that the financial transactions in

question must involve "property represented to be the proceeds of

specified unlawful activity." Id. (emphasis added).

On first read, it might seem odd to refer to money

laundering of "proceeds" from a bankruptcy fraud. After all,

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bankruptcy fraud involves hiding the debtor's own money from the

bankruptcy court, and unlike other types of fraud does not involve

wrongfully taking money ("proceeds") from others by deception.

Proceeds are usually defined as "[t]he value of land, goods, or

investments when converted into money" or "the amount of money

received from a sale." Black's Law Dictionary 1242 (8th ed. 2004).

Nonetheless, Congress expressly included bankruptcy fraud as one of

the predicate crimes producing "proceeds" which could be money

laundered. 18 U.S.C. § 1956(c)(7)(D). It is not difficult to

think of bankruptcy fraud in terms similar to the other types of

fraud -- money which is hidden from the bankruptcy court is, in a

sense, taken from the creditors. In any event, the case law as

well as the statute establishes that bankruptcy fraud can produce

"proceeds." See United States v. Richard, 234 F.3d 763, 770 (1st

Cir. 2000). The "sting" portion of the money laundering statute

means that the "proceeds" can be part of a fiction the government

creates.

Castellini argues that the agent never represented the

money to be the proceeds of unlawful activity, and so no rational

jury could conclude that element of the crime was proven. The

argument is based on the general rule that the money laundering

statute is meant to punish a separate offense from the underlying

"specified unlawful activity," and thus, it criminalizes separate

financial transactions involving the funds derived from such

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illegal activity. See United States v. Mankarious, 151 F.3d 694,

705 (7th Cir. 1998) ("Money laundering requires proceeds of a

discrete predicate crime. That predicate crime must have produced

proceeds in acts distinct from the conduct that constitutes money

laundering."); United States v. LeBlanc, 24 F.3d 340, 346 (1st Cir.

1994) (Money laundering is a "separate crime distinct from the

underlying offense that generated the money.").

In the analogous context of 18 U.S.C. § 1957, which

criminalizes money laundering of "criminally derived property of a

value greater than $10,000 and is derived from specified unlawful

activity,"7 § 1957(a), we have reversed convictions when the

government did not prove that the money involved in the alleged

laundering transactions was the proceeds of a separate specified

unlawful activity. See United States v. Carucci, 364 F.3d 339,

345-46 (1st Cir. 2004) (conviction under 18 U.S.C. § 1957 cannot be

upheld because government failed to introduce sufficient evidence

to allow a rational jury to conclude that defendant laundered money

7
Although 18 U.S.C. § 1957 uses the phrase "criminally derived
property" instead of the phrase "proceeds of specified unlawful
activity," which is used in 18 U.S.C. § 1956, courts have
interpreted the two to be equivalent and have read cases decided
under § 1957 as persuasive authority in the interpretation of cases
arising under § 1956. See Mankarious, 151 F.3d at 705 n.1; United
States v. Savage, 67 F.3d 1435, 1442 (9th Cir. 1995); see also 18
U.S.C. § 1957(f)(2) (defining "criminally derived property" to be
"any property constituting, or derived from, proceeds obtained from
a criminal offense") (emphasis added).

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which was "proceeds" from gambling, extortion, or drug trafficking,

the underlying specified unlawful activities).

The two issues of the agent's representation and the

nature of the proceeds are connected. We understand Castellini to

argue that if the representations had been nothing more than that

the agent wanted Castellini to take property and hide it from the

bankruptcy court, then that would not be a representation that

property was the "proceeds" of bankruptcy fraud. Castellini argues

that the representation then would be only about property, the

concealment of which constituted the bankruptcy fraud, but not

about property which was itself the proceeds of bankruptcy fraud.

Castellini supports his position with two types of

arguments. First, he argues that all of Agent Dowling's

representations were that the funds were from legitimate business

activities, and Castellini had no reason to infer otherwise. He

cites the rule that the government must at least prove "that an

enforcement officer or authorized person made the defendant aware

of circumstances from which a reasonable person would infer that

the property was [illegal] proceeds." United States v. Kaufmann,

985 F.2d 884, 893 (7th Cir. 1993). The government agent need not

expressly state that the funds are proceeds of illegal activity if

that is the natural inference to be drawn. See, e.g., United

States v. Puche, 350 F.3d 1137, 1143 (11th Cir. 2003); United

States v. Jensen, 69 F.3d 906, 911 (8th Cir. 1995); see also

-22-
Kaufmann, 985 F.2d at 893-94 (agent's representation to defendant

that the purchaser was a marijuana dealer, interested only in

paying cash for a car, and wanted the car to be registered in

another person's name was sufficient to satisfy the "represented"

and "proceeds" elements of money laundering even absent express

statements that the cash was drug proceeds); United States v.

Marbelt, 129 F. Supp. 2d 49, 54 (D. Mass. 2000) (representation

need only be specific enough to lead reasonable person in

defendant's position to infer funds derived from specified unlawful

activity).

Castellini has a second argument as well. He argues that

he could not have violated the bankruptcy fraud statute because the

statute criminalizes the act of (not merely the intention of)

transferring or concealing funds, and at the time Agent Dowling

gave Castellini money, there had been no specified unlawful

activity which produced the requisite proceeds of an illegal

activity for money laundering. In other words, Castellini argues,

his actions were nothing more than aiding and abetting the

commission of the underlying bankruptcy fraud; those actions could

not simultaneously have constituted money laundering.

We start with the representations argument. A

"representation" is "the manifestation to another that a fact . .

. exists." Black's Law Dictionary 1327 (8th ed. 2004). It is true

that the initial representation made was that Agent Dowling wanted

-23-
to hide from the bankruptcy court his legitimately earned money.

Specifically, that Castellini would receive the money in a

legitimate manner. Agent Dowling approached Castellini and said

that he had a successful business and wanted Castellini to help him

hide money from the bankruptcy court; and then gave the money to

Castellini to hide from the bankruptcy court, itself a fraud.

Agent Dowling's representations also went far beyond the

initial transfer of money to an agreement that there would be a

series of steps taken after Castellini received the funds. The

steps discussed in the conversations were classic money laundering.

In their conversations, Castellini described to Agent Dowling in

detail the steps that would be taken to siphon the funds offshore

and move them around before they would be made available again to

Agent Dowling. Dowling represented that this was acceptable.

Castellini explained the division of work between himself and Gonet

in the scheme, and the fee that he and Gonet would charge. Dowling

represented that he understood and agreed to the scheme and the

"pretty steep" fee.

Indeed, the evidence shows that Castellini did conclude,

from the representations, that he would be handling the proceeds of

an illegal activity. For example, Castellini acknowledged to Agent

Dowling, within their first conversation, that exchanging a check

for a false invoice while providing no actual consulting service

would be fraud. Castellini told Agent Dowling that the money

-24-
Dowling was going to give to Castellini would not have to be listed

in the bankruptcy petition because "[o]nce you give it to me, it's

no longer yours." Furthermore, in a later conversation on June 25,

1999, Castellini demonstrated his awareness that he was handling

"tainted money" by telling Agent Dowling, "[Y]ou're not going to

use the word 'laundering' are you? . . . It just makes it sound so

dirty. I mean, but what we do --."

Secondly, Castellini argues that even if he transferred

funds around the world, what he did was simply aiding and abetting

bankruptcy fraud and could not simultaneously be money laundering.

The argument has some attraction, particularly in light of the

doctrine, broadly stated, that money laundering requires there to

be proceeds of illegal activity and cannot be the same as the

illegal activity which produces the proceeds. The money laundering

statutes "interdict only the financial transactions . . . , not the

anterior criminal conduct that yielded the funds allegedly

laundered." United States v. Cabrales, 524 U.S. 1, 1 (1998); see

also Mankarious, 151 F.3d at 704 ("A money launderer must obtain

proceeds before laundering can take place.") (emphasis in

original). Castellini relies on the fact that the indictment's

allegations can be read to mean that Agent Dowling's delivery of

the two $30,000 checks to him initiated the money laundering, from

which Castellini argues that it is a logical necessity that the

-25-
same acts "cannot simultaneously have completed the underlying

bankruptcy fraud necessary for money laundering to have occurred."8

Castellini uses the concept of non-simultaneity. The

concept, though, hides a distinction, one which was pointed out in

Mankarious. The strict emphasis on time should not obscure the

real principle of these cases. It is not a requirement that the

underlying crime must be fully completed before any money

laundering can begin. It is simply that the non-simultaneity

principle means that "money laundering criminalizes a transaction

in proceeds, not the transaction that creates the proceeds."

Mankarious, 151 F.3d at 705. The cases cited by Castellini stand

for the rule "that the predicate offenses must produce proceeds

before anyone can launder those proceeds," but that does not

require the two crimes involved to be entirely separate in time.

Id.

"Proceeds" of an illegal activity may be created before

the completion of an underlying on-going crime. Id. Here,

"proceeds" of bankruptcy fraud were created as of the time

Castellini accepted the checks from the agent in order to hide them

from the bankruptcy court. There are variations on the theme.

Some types of fraud, like bank and wire fraud, usually create

8
Under the current (2004) Sentencing Guidelines, Castellini
faces a higher penalty for money laundering than for bankruptcy
fraud. The base offense level for money laundering is 8. U.S.
Sentencing Guidelines Manual § 2S1.1(a)(2). The base offense level
for bankruptcy fraud is 6. Id. at § 2B1.1(a)(2).

-26-
proceeds only on execution of the first scheme, while mail fraud

can create proceeds before a mailing takes place. Id. Similarly,

the first of multiple efforts to hide a series of assets from the

bankruptcy court may create proceeds of illegal activity. See

Richard, 234 F.3d at 770 (proceeds laundered in money laundering

may result from "a completed phase of an ongoing offense") (quoting

United States v. Conley, 37 F.3d 970, 980 (3d Cir. 1994)) (emphasis

in Richard); United States v. Butler, 211 F.3d 826, 830 (4th Cir.

2000) (bankruptcy fraud committed and funds became "criminally

derived property" when debtor gave check to innocent third party so

that funds would be held on debtor's behalf and concealed from the

bankruptcy court; money laundering occurred when funds were used to

purchase cashier's checks a year later, even if these acts were

also a further phase of bankruptcy fraud). From that point of

view, the fact that Castellini's additional actions after initially

receiving the funds (moving the funds around, and so forth) could

have been charged as either money laundering or aiding and abetting

an on-going bankruptcy fraud could be thought to be irrelevant.

Once the basic elements of the underlying crime are sufficiently

far along to create proceeds, the logic goes, the money becomes

proceeds of illegal activities and it can be laundered.

There may be a case in which the line between bankruptcy

fraud and money laundering is so close that the element of showing

that the funds are proceeds of an illegal activity or the element

-27-
of representation is not met. Arguably, a case where a defendant

merely received money to be hidden from the bankruptcy court in his

account and did nothing more with it might be such a situation.

That is not this case. Here the further activities Castellini

discussed and engaged in after initially receiving the money were

archetypal money laundering. While the "classic" money laundering

case involves a drug trafficker "acting with the complicity of a

banker or other person in a financial institution [and]

deposit[ing] the drug proceeds in a bank under the guise of

conducting a legitimate business transaction," United States v.

Johnson, 971 F.2d 562, 568 (10th Cir. 1992), the Money Laundering

Control Act of 1986, which enacted 18 U.S.C. § 1956, "prohibits a

much broader range of conduct than just the 'classic' example of

money laundering." Johnson, 971 F.2d at 569. The definitions and

language of the statute indicate that "Congress intended to

criminalize a broad array of transactions designed to facilitate

numerous federal crimes," LeBlanc, 24 F.3d at 346, including

bankruptcy fraud. See 18 U.S.C. § 1956(c)(7)(D). It is clear from

the legislative history that Congress's purpose in enacting § 1956

was to close "the gap in the criminal law with respect to the post-

crime hiding of the ill gotten gains." Johnson, 971 F.2d at 569

(quoting United States v. Edgmon, 952 F.2d 1206, 1213 (10th Cir.

1991)). Congress had reason to be concerned. The money laundering

of the proceeds of an underlying illegal activity may make the

-28-
underlying crime more difficult to detect or to prove. And

Congress wanted to curtail the separate market of criminal activity

which money laundering represents.

The transactions here were within "the full contemplation

of Congress when it enacted [§ 1956]." LeBlanc, 24 F.3d at 347.

Castellini asked Dowling to start out with a smaller check to avoid

arousing the suspicion of the bankruptcy court; he invoiced Dowling

for fictitious "management consulting" work; he received the

checks; and he then negotiated the checks obtained from the

bankruptcy fraud, sending the money, minus their fee, to tour the

world under his and Gonet's guidance. Cf. id. ("[Defendant] asked

gamblers to structure their checks in amounts less than $10,000; he

asked that the gamblers make the checks payable to fictitious

payees; he received the checks; and he then negotiated the

checks."). His conduct was at the heart of what Congress sought to

criminalize. At least on these facts, where a reasonable listener

could easily infer the proceeds were from a bankruptcy fraud, which

produced proceeds at the time, and the further activities

contemplated and actuated were typical of money laundering, a

reasonable jury could find the defendant guilty of money laundering

beyond a reasonable doubt.

Castellini points to United States v. Anderson, 371 F.3d

606 (9th Cir. 2004), which reversed the conviction of Wayne

Anderson, a coconspirator indicted and charged along with

-29-
Castellini in the same sting operation but tried separately in the

Eastern District of California. Anderson does not provide support

for Castellini. Anderson involved convictions on two counts: one

count of conspiracy to launder money premised on the underlying

unlawful activity of bankruptcy fraud (which was based on the same

cover story that Agent Dowling used on Castellini), and a second

count of money laundering premised on the underlying unlawful

activity of bank fraud in violation of 18 U.S.C. § 1344(2).

Anderson, 371 F.3d at 608-09. The Anderson court affirmed the

conviction for the conspiracy to commit money laundering count

based on bankruptcy fraud but reversed on the other money

laundering count based on bank fraud. Id. at 612. Anderson

supports the conclusion here; indeed, it affirmed the money

laundering conviction based on bankruptcy fraud. Id. at 610.

The reversal in Anderson of the money laundering

conviction based on bank fraud does not help Castellini. Unlike

bankruptcy fraud, bank fraud has as an element that the money be

attained from a federally chartered or insured financial

institution. Id. at 612. Anderson held that no such

representation had been made or could be inferred from the agent's

very different representation that the funds had been fraudulently

received from individual clients. Id. Noting that the government

could easily have structured the sting to make the needed

representation, the court held that the government had failed to

-30-
meet its burden of proof. Id. Here, the prosecution did not make

such a mistake.

B. Admission of coconspirator statements

Castellini also argues that a new trial is necessary

because the district court erred by admitting prejudicial

coconspirator statements made by Gonet in taped conversations.

More specifically, the claims are that the district court (1) never

made explicit findings regarding the existence of the conspiracy

and whether the statements were made in furtherance of the

conspiracy, and (2) admitted numerous statements by Gonet that were

not made during and in furtherance of the conspiracy. See United

States v. Petrozziello, 548 F.2d 20, 23 (1st Cir. 1977).

Federal Rule of Evidence 801(d)(2)(E) provides that "a

statement by a coconspirator of a party during the course and in

furtherance of the conspiracy" is not hearsay evidence and is

admissible for the truth of the matter asserted. In this Circuit,

coconspirator statements are only admissible under Rule

801(d)(2)(E) if the trial court finds it "more likely than not that

the declarant and the defendant were members of a conspiracy . . .

and that the statement was in furtherance of the conspiracy."

Petrozziello, 548 F.2d at 23.9

9
The ellipsis replaces the words "when the hearsay statement
was made." Petrozziello, 548 F.2d at 23. This restriction was
dicta in Petrozziello, and was withdrawn by United States v.
Baines, 812 F.2d 41, 42 (1st Cir. 1987) (affirming admission of
statements of coconspirators made before defendant joined the

-31-
 We will sustain a trial court's determination of

admissibility under Rule 801(d)(2)(E) unless the ruling is clearly

erroneous. United States v. Portela, 167 F.3d 687, 703 (1st Cir.

1999).

This deferential standard of review places a
heavy burden on a defendant seeking to
overturn a trial court's Petrozziello ruling:
A finding is clearly erroneous when although
there is evidence to support it, the reviewing
court on the entire evidence is left with the
definite and firm conviction that a mistake
has been committed.

United States v. Newton, 326 F.3d 253, 257 (1st Cir. 2003).

Castellini limits his challenge to those out-of-court

statements by Gonet which were made before March 30, 1999. His

challenge is thus confined to the following five conversations

between Gonet and Agent Dowling: 1) the December 18, 1998 telephone

call; 2) the December 30, 1998 telephone call; 3) the two telephone

calls on March 16, 1999; and 4) the videotaped meeting in Florida

on March 18, 1999.

We dispose of the procedural aspect of Castellini's

challenge quickly. The record shows that the district court did,

in fact, make Petrozziello rulings, though not as explicitly as

Castellini would like. In accordance with the procedures set out

in United States v. Ciampaglia, 628 F.2d 632, 638 (1st Cir. 1980),

conspiracy). See United States v. Portela, 167 F.3d 687, 703 n.13
(1st Cir. 1999) (recognizing modification of Petrozziello by
Baines).

-32-
at the start of the government's presentation of evidence,

Castellini requested and was allowed a continuing objection to the

admission of Gonet's out-of-court statements. Castellini renewed

his objection at the start of the next day of the trial, and the

district court replied, "That is on the record. I think there is

plenty to justify the conversations coming in . . . ." The

district court also reminded the defendant to renew the objection

at the close of the government's case. At the close of all

evidence, Castellini asked the district court to make the

Petrozziello findings. The district court responded, "I make those

findings for the record." Castellini did not ask the court to be

more specific. After the charge to the jury, Castellini again

asked the court to make the Petrozziello findings, and the district

court said, "I did. I told you at the end of the case, just

consider them made." Castellini's counsel said, "Okay," and made

no other comment, request, or objection.

The district court's Petrozziello findings, though not

explicitly separated out, necessarily entail that the district

court found by a preponderance of the evidence that there was an

existing conspiracy at the time Gonet made the statements, that

Castellini was involved in the conspiracy at some point, and that

the statements were made in furtherance of the conspiracy. See

Petrozziello, 548 F.2d at 23. This conclusion is also supported by

other rulings made by the district court. Castellini twice moved

-33-
for a mistrial on the ground that there was no conspiracy at all

until Castellini joined on March 30, 1999, and that thus Gonet's

out-of-court statements before that date were inadmissible hearsay

which was prejudicial to Castellini. The government countered that

the record indicated, by inference, that Castellini and Gonet had

been talking about Agent Dowling's situation before March 30, 1999,

and at the time the challenged statements were made, a conspiracy

involving Gonet and Castellini did exist.10 The trial judge

accepted the government's arguments and denied the motions.

The government's argument that there was a conspiracy

between Gonet and Castellini before March 30, 1999, is based on

several components. When Castellini first spoke to Dowling on

March 30, Castellini already knew what Dowling had told Gonet

earlier. That, by itself, does not establish a conspiracy between

Gonet and Castellini on each of the earlier dates. The government

also relies on the corroboration given to Gonet's pre-March 30

statements about the management company and the methods by which

10
The government did not argue at trial that there was a
conspiracy between Gonet and the other conspirators, and that
Castellini, even if he did not join the conspiracy until March 30,
became responsible for the earlier statements regardless of his
awareness of the earlier conduct. See Baines, 812 F.2d at 42.
There was also no evidence in the pre-March 30 conversations that
Gonet made the statements in furtherance of a much larger umbrella
conspiracy to which both Gonet and Castellini belonged. Cf.
United States v. Marino, 277 F.3d 11, 25-26 (1st Cir. 2002) (out-
of-court coconspirator statements admissible where declarant and
defendant were members of larger umbrella conspiracy even though
they belonged to rival factions).

-34-
the money would be laundered by Agent Dowling's later conversations

with Castellini about the transactions and the subsequent

transactions themselves.11 The entire false-invoice scheme was

carried out by Castellini essentially as Gonet had explained it to

Agent Dowling on March 16, 1999. Also on March 16, 1999, Gonet

mentioned a third party, a Nevada corporation, and the evidence

showed that RLC Management, Castellini's company, turned out to be

a Nevada partnership. Further, Castellini admitted that he had

told Gonet of his AAA-derived CBO in 1997, and Gonet asked

Castellini on March 11 or 12 of 1999 whether his CBO could be used

for a third party. Castellini counters that there is no evidence

that there was any agreement between Castellini and Gonet at the

time of these pre-March 30 conversations; Gonet might have come up

with the plan on his own and simply instructed Castellini later to

carry it out. Also, Castellini argues, there were material

differences in the transactions described by Gonet and those

carried out by Castellini.

11
The agreement between Agent Dowling and Gonet cannot be a
conspiracy because there can be no conspiracy as a matter of law
solely between a defendant and a government agent. United States
v. Giry, 818 F.2d 120, 126 (1st Cir. 1987) ("[I]n situations where
the conspiracy involves only [one] defendant and a government
[agent,] . . . there can be no conspiracy because it takes two to
conspire and the government [agent] is not a true conspirator.")
(quoting United States v. Martino, 648 F.2d 367, 405 (5th Cir. Unit
A June 1981) (internal quotation marks omitted) (second alteration
in Giry)). This is why the focus is on the existence of a
conspiracy involving Gonet and some other coconspirator, most
likely Castellini.

-35-
 Indeed, Castellini argues, in Gonet's December 18 and

December 30 conversations with Agent Dowling, Gonet said he owned

the company which might be used to produce the false invoices and

did not say a third party was involved. In the March 16

conversation, Gonet mentioned a Nevada corporation but also stated

he had not yet involved anyone from the corporation and hoped to

talk with someone that night. Further, on March 18, Gonet said

that he still had not obtained agreement from anyone at the

corporation.

The government's case is strongest as to the existence of

the conspiracy as of the March 16 and 18 conversations, but hardly

compelling even as to those. On this record, whether the district

court's ruling that there was a conspiracy on the dates before

March 16 constituted clear error is a close call. We need not

decide that question for several reasons.

First, some of the statements are admissible on grounds

other than the coconspirator exception under Rule 801(d)(2)(E).

For example, the December 18, 1998 conversation was admissible for

a purpose other than to prove the truth of the matter asserted

therein and thus would not be hearsay. This conversation simply

showed the initial contact between Gonet and Agent Dowling, and

provided background and context for understanding the subsequent

transactions and investigative steps targeted at Gonet and

Castellini. See United States v. Cintolo, 818 F.2d 980, 999 (1st

-36-
Cir. 1987) (out-of-court statements regarding conversation between

FBI agents and a witness were admissible to provide context and

background even though defendant did not ask for a limiting

instruction). The same applies to the conversation of December 30,

1998, during which Gonet said, "I have a company that I can bill it

through." This also provided context and background to understand

subsequent references to "the company you talked about" as the

laundering scheme was discussed in subsequent conversations.

Second, even if there were error in admitting some of the

later conversations, any error was harmless. "The essential

inquiry in harmless error review is whether the improperly admitted

evidence likely affected the outcome of trial." United States v.

Torres-Galindo, 206 F.3d 136, 141 (1st Cir. 2000). "[A]

harmlessness determination demands a panoramic, case-specific

inquiry considering, among other things, the centrality of the

tainted material, its uniqueness, its prejudicial impact, the uses

to which it was put during the trial, the relative strengths of the

parties' cases, and any telltales that furnish clues to the

likelihood that the error affected the factfinder's resolution of

a material issue." United States v. Sepulveda, 15 F.3d 1161, 1182

(1st Cir. 1993).

Castellini does argue he was prejudiced. For example,

Castellini contends that he was prejudiced by two references Gonet

made to money laundering during the March 18, 1999 meeting.

-37-
Gonet's first reference was to his own scheme for sending money via

UPS around the country as "documents" and has nothing to do with

Castellini. Second, Gonet said in the conversation that accepting

Agent Dowling's money and depositing it into an offshore account

could be considered money laundering. Against this is the fact

that the evidence of Castellini's own illicit transactions was

overwhelming. And the second reference is no more prejudicial to

Castellini than Castellini's own statement: "You're not going to

use the word 'laundering' are you? . . . . It just makes it sound

so dirty . . . ." At most, Gonet's earlier conversations were

"cumulative and the weight of the additional [non-hearsay] evidence

overwhelming." United States v. LiCausi, 167 F.3d 36, 50 (1st Cir.

1999).

Castellini next argues that he was prejudiced because the

content of some of Gonet's statements at the March 18, 1999 meeting

was "shocking" in comparison to the "gentler tone" of the other

testimony and gave rise to the negative impression that Castellini

was a hard core criminal. In order to assure Agent Dowling that

his funds would be safe with Castellini, Gonet told Agent Dowling

at the March 18 meeting that "these people" (who would be handling

Dowling's money at the management company) were more "hard core,"

more "hard line," and "a lot tougher" than Gonet, and that "these

people" could "stand the heat." The jury could evaluate Castellini

themselves: Castellini testified at length and told the jury that

-38-
he was very naive and gullible, and he elicited laughter for his

portrayal of himself as a "[c]abana boy" because everyone at work

asked him to do things.

Finally, Castellini argues that Gonet's statements only

inculpated Castellini, not other conspirators, so that Castellini

appeared to be more important to the conspiracy than he actually

was. The prosecution in this case is of Castellini, not other

conspirators, and the jury in this trial heard evidence about

others involved in the money laundering. There is no basis for a

new trial.12

IV.

A. Sentencing: Downward departure for "aberrant behavior"

Castellini also charges the district court with error in

sentencing him, asserting that the court ruled as a matter of law

that it had no discretion to grant Castellini's request for a

downward departure pursuant to U.S. Sentencing Guidelines Manual §

5K2.20. We reject this claim.

12
Castellini also argues that the recordings involving Gonet
and Agent Dowling took up most of the second day of trial and
"assume[d] a prominent role in the government's case." In
actuality, the second day of trial lasted only a half day, and
although Agent Dowling's testimony took up the whole time, the bulk
of the testimony was not focused on the recordings, none of which
was particularly long. These five relatively short recordings
cannot be said to have assumed a particularly prominent role in
light of the twenty-three recordings used in total and the other
evidence introduced by the government during the course of a seven-
day trial.

-39-
 When a district court exercises its discretion to refuse

to grant a downward departure, that decision is not reviewable.

United States v. Mejia, 309 F.3d 67, 70 (1st Cir. 2002). Appellate

review is available for refusal to depart if the district court

misunderstood the scope of its authority under the guidelines and

mistakenly believed that it lacked the discretion to depart.

United States v. Rivera-Rodriguez, 318 F.3d 268, 275 (1st Cir.

2003).

The departure was sought under the November, 2002 version

of § 5K2.20, which states, in relevant part, "A sentence below the

applicable guideline range may be warranted in an extraordinary

case if the defendant's criminal conduct constituted aberrant

behavior." The commentary to the guideline defines "aberrant

behavior" as "a single criminal occurrence or single criminal

transaction that (A) was committed without significant planning;

(B) was of limited duration; and (C) represents a marked deviation

by the defendant from an otherwise law-abiding life." U.S.

Sentencing Guidelines Manual § 5K2.20, cmt. n.1 (2002).

At the sentencing hearing, the district court made its

initial ruling on Castellini's "aberrant behavior" departure motion

by stating:

I don't think there is sufficient evidence for
me to give a downward departure for aberrant
behavior, although . . . I think that the
conduct involved was an extraordinary
departure from what had been this man's life.

-40-
 My concern is that . . . that is not
enough to permit me to find him having
committed something because of aberrant
behavior.

Castellini then argued that the court should grant the departure

because it had found Castellini's behavior "to be an extraordinary

departure." The district court responded:

What I said to you is that I think that
this is a departure in terms of his behavior.
You know, that eight-month period, you know,
is like a black hole in an otherwise
reasonable life. But I don't believe that it
adds up to the downward departure that you are
talking about.
. . . .
I don't think this really is a single
criminal offense. I think that it is an
episode.
. . . .
[H]ere we had, at least arguably, two
offenses . . . eight months apart, both for
$30,000. So it isn't one. It is not a
single.

From the quoted passages, it is clear that the district

court understood that it had the authority to depart, but decided

that departure was not warranted because there was insufficient

evidence to justify it. In particular, the district court denied

the departure because the multiple transactions in an elaborate

scheme involving a network of offshore entities over an eight-month

period put it outside the purview of the single

occurrence/transaction without advanced planning and of limited

-41-
duration contemplated by the guideline.13 See Rivera-Rodriguez, 318

F.3d at 275-76. That decision is not subject to review.

B. The Blakely challenge

Castellini finally argues, for the first time on appeal,

that his sentence should be vacated and the case remanded for

resentencing because the jury did not make a factual determination

regarding the amount of laundered funds attributable to him under

the sentencing guidelines, as he contends is required under Blakely

v. Washington, 124 S. Ct. 2531 (2004). Because Castellini did not

raise this argument before the district court, review is for plain

error. United States v. Morgan, 384 F.3d 1, 8 (1st Cir. 2004). To

establish plain error, Castellini must demonstrate "(1) that an

error occurred (2) which was clear or obvious and which not only

(3) affected [his] substantial rights, but also (4) seriously

impaired the fairness, integrity, or public reputation of judicial

proceedings." United States v. Duarte, 246 F.3d 56, 60 (1st Cir.

2001).

Under existing pre-Blakely First Circuit precedent, the

amount of laundered funds is a sentencing factor for determination

by the court. See United States v. Robinson, 241 F.3d 115, 121

(1st Cir. 2001) ("[S]entence-enhancing facts still may be found by

13
The November 2004 version of § 5K2.20 makes it clear that "a
fraud scheme generally would not meet [the] requirements [of §
5K2.20]" U.S. Sentencing Guidelines Manual § 5K2.20, cmt. n.2
(2004).

-42-
the judge under a preponderance-of-the-evidence standard as long as

those facts do not result in a sentence that exceeds the original

statutory maximum."). "Because the trial judge acted in accordance

with circuit precedent (not yet clearly established to be

erroneous), we cannot say plain error occurred, and we need not

proceed further." Morgan, 384 F.3d at 8.

V.

Castellini's convictions and sentence are affirmed.

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