United States Court of Appeals
For the First Circuit
No. 03-2425
UNITED STATES OF AMERICA,
Appellee,
v.
KEVIN R. HALL,
Defendant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MAINE
[Hon. D. Brock Hornby, U.S. District Judge]
Before
Boudin, Chief Judge,
Campbell, Senior Circuit Judge,
and Howard, Circuit Judge.
Edward S. MacColl, with whom Thompson, Bull, Furey, Bass &
MacColl, LLC, P.A. was on brief, for appellant.
Margaret D. McGaughey, Appellate Chief, with whom Paula D.
Silsby, United States Attorney, was on brief, for appellee.
January 12, 2006
HOWARD, Circuit Judge. A federal grand jury in Maine
returned an indictment against Kevin Hall charging him with one
count of conspiring to distribute marijuana, 21 U.S.C. §§
841(a)(1) & 846; 163 counts of money laundering, 18 U.S.C. §
1956(a)(1)(B)(i), for his use of the conspiracy proceeds; and four
counts of tax evasion, 26 U.S.C. § 7201, for failing to pay income
tax on the drug-related income. The government also brought two
forfeiture counts to obtain assets related to Hall's illegal
conduct, 21 U.S.C. § 853; 18 U.S.C. § 982. After a ten-day jury
trial, Hall was convicted on all counts. He was sentenced to 151
months of imprisonment on the conspiracy and money laundering
convictions, to be served concurrently with 60 months of
imprisonment on each of the tax evasion convictions. He also was
ordered to forfeit his illegally obtained assets. On appeal, Hall
claims that there was insufficient evidence of a drug conspiracy or
money laundering and alleges a host of trial and sentencing errors.
SUFFICIENCY OF THE EVIDENCE CLAIMS
We review Hall's sufficiency of the evidence claims de
novo, see United States v. Cruzado-Laureano, 404 F.3d 470, 480 (1st
Cir. 2005), and apply the following standard:
We must determine whether the evidence,
taken in the light most favorable to the
government--a perspective that requires us
to draw every reasonable inference and
resolve credibility conflicts in a manner
consistent with the verdict--would permit
a rational trier of fact to find each
element of the crime charged beyond a
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reasonable doubt. The government can meet
this burden by either direct or
circumstantial evidence, or by any
combination of the two. Moreover, the
government need not disprove every
hypothesis consistent with the defendant's
innocence; rather, it is enough that a
rational jury could look objectively at
the proof and supportably conclude beyond
a reasonable doubt that the defendant's
guilt has been established.
United States v. Patel, 370 F.3d 108, 111 (1st Cir. 2004).
A. Drug Conspiracy
Hall contends that there was insufficient evidence of his
participation in a drug trafficking conspiracy because the
government established only that he purchased marijuana from
another individual and resold it. According to Hall, proof of a
buyer/seller relationship is not sufficient to establish a drug
conspiracy.
This contention does not warrant extended discussion. It
is enough to say that Hall understates the strength of the
government’s evidence. There was proof that from 1995 to 1999 Hall
bought large amounts of marijuana from an individual named John
Redihan. Redihan testified that he was aware that Hall's purpose
was to resell the drugs for profit and that, on occasion, he
assisted Hall in these efforts. See United States v. Berrios, 132
F.3d 834, 841-42 (1st Cir. 1998) (concluding that there was
sufficient proof of a distribution conspiracy where seller knew
that buyer was purchasing drugs for the purpose of selling it to
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others and intended to facilitate the resales). Moreover, Hall
enlisted several other individuals to help him in the storage,
preparation, and selling of the drugs. For example, an individual
named William Lee sold marijuana for Hall, and a married couple,
George and Brenda Elliot, assisted Hall by letting him store drugs
in their home, helping him weigh the drugs, picking up marijuana
deliveries from Redihan, and participating in Hall's debt
collection efforts. This evidence sufficiently established Hall's
participation in a conspiracy to distribute marijuana.
B. Money Laundering
The government charged Hall with 163 counts of
concealment money laundering under 18 U.S.C. § 1956(a)(1)(B)(i) for
his use of the drug conspiracy proceeds. To sustain a conviction
under § 1956(a)(1)(B)(i), the government must prove: (1) that Hall
knowingly conducted a financial transaction, (2) that he knew that
the transaction involved funds that were proceeds of some form of
unlawful activity, (3) that the funds were proceeds of a specified
unlawful activity, and (4) that Hall engaged in the financial
transaction knowing that it was designed in whole or in part to
conceal or disguise the nature, location, source, ownership, or
control of the proceeds of such unlawful activity. See United
States v. Cornier-Ortiz, 361 F.3d 29, 37 (1st Cir. 2004). Hall's
sufficiency claims relate primarily to the government's proof on
the "conceal or disguise" element. He asserts that all of the
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financial transactions were conducted above board and were thus not
meant to conceal or disguise anything. In essence, Hall’s argument
is that the government proved only that he spent or invested drug
money and that this evidence is inadequate to sustain a conviction
under § 1956(a)(1)(B)(i).
It is true that the money laundering statute does not
criminalize the mere spending or investing of illegally obtained
assets. See United States v. Corchado-Peralta, 318 F.3d 255, 259
(1st Cir. 2003). Instead, at least one purpose for the expenditure
must be to conceal or disguise the assets. See id. Proof of this
element may be based on direct evidence, such as the defendant's
own statements; or circumstantial evidence, like the use of a
third-party to disguise the transaction; or unusual secrecy in
making the transaction. See Cruzado-Laureano, 404 F.3d at 483.
In this case the government charged a series of financial
transactions as separate counts. See United States v. Marshall,
248 F.3d 525, 540 (6th Cir. 2001). We must therefore examine the
government's proof on each count to determine its sufficiency. See
United States v. Shepard, 396 F.3d 1116, 1121 (10th Cir. 2005).
The 163 counts essentially involve loans to friends and colleagues
and related transactions, purchases of cars and other vehicles,
expenditures to renovate property, and establishing a construction
business.
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1. Loans and Related Transactions
i. Cosby/Brown Loans (Counts 2-97)
In 1995, Hall offered to loan $30,000 to Danny Cosby and
his girlfriend, Susan Brown, to buy a parcel of land. Cosby and
Brown accepted Hall's offer and, after executing a mortgage to
secure the loan, Hall gave them the loan proceeds in cash. In
1996, Cosby and Brown borrowed another $25,000, which Hall also
paid out in cash. Over the next several years, Hall negotiated 96
repayment checks from Cosby and Brown, including a $33,000 check to
pay off the remainder of the loans.
When Cosby and Brown asked Hall where he got the money
for the loans, he told them that he got most of it from an
inheritance from his father. But there was evidence that Hall's
father had intentionally omitted him from his will and that Hall
did not receive anything from his father's estate. There also was
testimony that, in regard to a loan to another person, Hall stated
that the reason he wanted to loan money was to "get some of his
money more legal."
The government charged each negotiation of a loan
repayment check as a separate money laundering count. Hall claims
that there "was nothing suspicious about the loan" repayments
because he made no attempt to conceal his identity when dealing
with Cosby and Brown in making the loans or negotiating the
repayments. This argument misconstrues the purpose of §
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1956(a)(1)(B)(i). The statute criminalizes conduct designed to
conceal or disguise the source of the drug proceeds even if the
defendant does not conceal his own identity in the process. See,
e.g., United States v. Norman, 143 F.3d 375, 377-78 (8th Cir.
1998); United States v. Starke, 62 F.3d 1374, 1384 (11th Cir.
1995); United States v. Kinzler, 55 F.3d 70, 73 (2d Cir. 1995);
United States v. Lovett, 964 F.2d 1029, 1034 n.3 (10th Cir. 1992).
While Hall arranged the loans himself and negotiated the
checks in his own name, there was evidence that one purpose for the
loans was to disguise the illegal origin of the loan funds. Hall
admitted as much when he claimed to another individual that he
wanted to loan money to "get some of his money more legal." Hall
made this comment regarding a different loan, but the jury could
infer that the same motivation applied to other similar loans which
Hall made while running his marijuana trafficking operation.
Additionally, Hall intentionally misled the borrowers about the
source of the proceeds by telling them that he obtained the money
from a family inheritance. Such a misstatement is probative of
concealment. See United States v. Tekle, 329 F.3d 1108, 1114 (9th
Cir. 2003) (affirming money laundering conviction based on evidence
that defendant lied about the origin of funds that he used to
purchase a home); United States v. Wilson, 77 F.3d 105, 109 (5th
Cir. 1996) (affirming money laundering conviction where defendant
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said that money was from an inheritance to "cover" for the cash
purchase). This evidence is sufficient to sustain the convictions.
ii. Moving Funds to an E*Trade Account
(Count 98)
As mentioned above, Cosby and Brown provided Hall with a
$33,000 check to pay off their debt. After receiving the check,
Hall placed these funds in his bank account for a few days before
moving them to an E*Trade investment account. The government
charged the moving of the funds as money laundering. Hall claims
that "there was absolutely nothing about the transaction that
suggested concealment or an intent to conceal."
We agree that there is nothing about the transfer of
money from Hall's bank account to his E*Trade account that,
standing alone, necessarily suggests an intent to conceal. But the
transfer cannot be viewed in isolation. It was part of the series
of transactions that began with the loans to Cosby and Brown. "A
design to conceal on a particular transaction may be imputed to a
subsequent transaction if the subsequent transaction, while
innocent on its face, is part of a larger money laundering scheme."
United States v. Burns, 162 F.3d 840, 848-49 (5th Cir. 1998)
(internal citation and quotation marks omitted). This is so
because a "launderer can never be sure that he has run the money
through enough laundering cycles to make it clean enough so that
the government can't find the stains." B. Williams & F. Whitney,
Federal Money Laundering: Crimes and Forfeitures § 5.1.6.4 (1999).
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Given the proof that the original loans to Cosby and Brown were
motivated by Hall's desire to conceal the source of the funds, the
jury could infer that Hall's continued shuffling of the money
through accounts was an attempt to further separate the money from
its illegal source. See Burns, 162 F.3d at 848-49 (affirming money
laundering conviction based on bank deposit which when viewed in
isolation was innocent, but when viewed in context was part of a
scheme to launder funds).1
iii. Recording a Mortgage (Count 161)
As security for a loan that Hall made to Felicity Hyde
(Count 160), Hall recorded a mortgage on property that Hyde owned.
The government charged the recording of the mortgage as a separate
count of money laundering. Hall contends that the recording of the
mortgage does not constitute money laundering because it is not a
"financial transaction" as defined under the money laundering
statute. See 18 U.S.C. § 1956 (3)(c)(4). This argument was not
raised below, and therefore our review is for plain error. See
United States v. Capozzi, 347 F.3d 327, 335 (1st Cir. 2003).
As a threshold for relief under the plain error standard,
Hall must show that the district court committed a clear and
1
Counts 119-121, 125-150, 155-157 and 160 also concern loan
repayments Hall received and Hall's subsequent distribution of the
loan proceeds. For each count, there was evidence similar to the
proof presented for counts 2-98. Hall has not provided additional
grounds for overturning these convictions. We therefore affirm
these convictions for substantially the same reasons that we affirm
the convictions for counts 2-98.
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obvious error by not dismissing this count on the ground that
recording the mortgage was not a financial transaction. See United
States v. Marino, 277 F.3d 11, 32 (1st Cir. 2002). The money
laundering statute defines a financial transaction as a transaction
which "in any way or degree affects interstate commerce" and, among
other things "involves the transfer of title to any real property."
This definition is construed broadly. Federal Money Laundering,
supra § 2.3 (citing S. Rep. 99-433 at 13 (1986)). A mortgage is
"a conveyance of title to property that is given as security for
the payment of a debt . . . that will become void upon payment . .
. according to the stipulated terms." Black's Law Dictionary 1031
(8th ed. 1999) (emphasis supplied). The recording of the mortgage
thus memorialized and made efficacious "transfer of title to any
real property," and would seem to constitute a "financial
transaction." In any event, we are aware of no caselaw to the
contrary, and therefore the district court's error, if any, was not
clear or obvious. See Patel, 370 F.3d at 118.
2. Vehicle Purchases
i. Pickup Truck (Count 99)
In April 1997, Hall purchased a used one-ton pickup
truck. Hall found an advertisement for the truck in a local
magazine and called the owner, Mark Stevens, to inquire about it.
After a few contacts, Hall and Stevens agreed on a $12,000 purchase
price. Hall asked that Stevens deliver the truck to his house.
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Although Stevens found that request peculiar, he complied and upon
delivering the truck received from Hall $12,000 in cash in the form
of wrapped packages of $20 bills. Hall contends that this evidence
does not suggest an effort by him to conceal the funds used for the
transaction.
"The conversion of cash into goods or services as a way
of concealing or disguising [a] wellspring of . . . cash is a
central concern of the money laundering statute." United States v.
Jackson, 935 F.2d 832, 841 (7th Cir. 1991). "Because cash is a
frequent by-product of many kinds of illegal activity, converting
. . . cash into useable funds is probative of money laundering.
Thus, spending large amounts of cash to buy cars . . . may suggest
an intent to conceal." Federal Money Laundering supra at §
5.16.11.
The jury heard evidence that Hall paid for the truck with
wrapped packages of small bills. Hall's use of small bills made it
more difficult for anyone to trace the truck payment. See United
States v. Misher, 99 F.3d 664, 668-69 (5th Cir. 1996) (concluding
that proof that drug dealer purchased pickup truck with $10 and $20
bills was sufficient for the jury to conclude that a purpose of the
purchase was to conceal the source of the funds); United States v.
Heater, 63 F.3d 311, 319 (4th Cir. 1995) (concluding that proof
that defendant made several large purchases using small bills which
exceeded his lawful income was sufficient to sustain money
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laundering conviction). Additionally, as we will discuss below,
the government introduced evidence of other vehicle purchases for
which there was additional proof that Hall made the purchases to
conceal his drug income. The jury could have relied on this
evidence to conclude that the pickup truck purchase was part of a
single pattern of concealment. Taken in total, this evidence
suffices to sustain the conviction on count 99.
ii. 1988 Ford Dump Truck (Counts 100-01)
In August 1997, Hall provided his sister, Andrea Read,
with $16,000 cash to purchase a money order in her name payable to
O'Connor GMC. Hall used the money order along with an additional
$500 in cash to purchase a dump truck. Hall's use of his sister's
name in purchasing the money order is evidence of his intent to
conceal because it indicates that he was attempting to disguise the
source of the proceeds by having it pass through another person's
control. See United States v. Willey, 57 F.3d 1374, 1385 (5th Cir.
1995) (stating that "using a third party, for example, . . . a
relative, to purchase goods on one's behalf . . . usually
constitutes sufficient proof of a design to conceal"). Moreover,
Redihan testified that Hall told him that he had set up a
fictitious "inheritance account" in which the money "was cleaned"
and used to purchase construction equipment such as a dump truck.
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Thus, the jury could have found that this purchase was part of the
money laundering scheme.2
iii. 1932 Ford Coupe (Count 102)
In August 1997, Hall purchased a restored 1932 Ford Coupe
from Terrence Blair for $24,000. When Blair delivered the car to
Hall, Hall gave him a paper bag filled with cash. At Hall's
request, Blair wrote the bill of sale for only $5,000. In addition
to the use of cash to make the purchase, Hall's request for a false
bill of sale suggests concealment because it permitted Hall to
include an additional $19,000 in the purchase price that could not
easily be traced. See Wilson, 77 F.3d at 109 (affirming money
laundering conviction where defendant asked seller of car to say
that he sold the car to him for half of the actual purchase
price).3
3. Renovations and Fire Island Construction
2
Redihan's testimony is also sufficient to affirm the
convictions on counts 103-118 and 122-124 which relate to Hall's
purchase of other pieces of construction equipment.
3
There was evidence that Hall requested false bills of sale
for his purchases of a 1970 Volkswagon (count 154) and a 1965
Corvette (count 158). We affirm these convictions on this basis.
We also affirm the conviction concerning Hall's purchase of a 1995
Volvo (count 151), as there was evidence that Hall attempted to
conceal certain loan repayment funds by purchasing this vehicle.
Additionally, we affirm the conviction concerning Hall's purchase
of an all-terrain vehicle (count 159) on the ground that the jury
could conclude that this purchase (made in cash) was part of the
same laundering scheme as the other vehicle purchases. Hall has
not challenged the convictions on counts 152 and 153 which relate
to his purchase of a 1992 Ford Explorer.
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i. Renovations to Hall's Real Estate
Holdings (Counts 162-163)
In 1997 and 1998, Hall paid almost $100,000 for supplies
and labor to renovate property that he owned in Camden and
Northport, Maine. Hall argues that he organized the work himself
and therefore there was no effort on his part to conceal or
disguise the drug funds.
But, as discussed above, the issue is not whether Hall
hid his identity in performing these renovations but rather whether
one purpose of the transaction was to conceal or disguise drug
proceeds. See supra at 6-7. The government presented evidence
that Hall paid for the labor and materials using mostly cash and
that he did not keep records of the labor costs. The evidence also
established that Hall spent far in excess of his declared income to
make these renovations. See United States v. Webster, 960 F.2d
1301, 1308 (5th Cir. 1992) (holding that "a differential between [a
drug dealer's] legitimate income and cash flow is sufficient for a
money laundering conviction"). A jury could conclude that Hall's
expenditures of large amounts of cash, far in excess of his
reported income, coupled with his non-existent bookkeeping
practices demonstrated that he renovated the properties as a way to
disguise illegally obtained cash by converting the money into
expensive real estate holdings.4
4
Hall also argues that these counts should have been dismissed
because the government did not charge each expenditure related to
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ii. Transferring Assets to Fire Island
Construction (Count 164)
The final count of money laundering charged Hall with
transferring over $80,000 in assets to a construction company that
he established called Fire Island Construction. Hall again claims
that the government failed to prove the concealment element of the
offense. Hall's objection to this count fails on the basis of his
statements to others. See Cruzado-Laureano, 404 F.3d at 483. There
was testimony that Hall said that he established Fire Island
Construction "to make him look legitimate" and that he transferred
construction equipment to Fire Island as part of a scheme to "clean
up some [of the] money." The jury could infer from this testimony
that Hall's creation of Fire Island Construction and the subsequent
transfer of property to the company was at least partially
motivated by his desire to disguise the source of his drug
proceeds.5
the renovations as a separate offense. He argues that each
renovation expenditure was a distinct transaction and therefore
should have been charged separately. This argument was first
raised on appeal, and we therefore limit ourselves to plain error
review. The term transaction "may comprehend a series of many
occurrences, depending not so much upon the immediateness of their
connection as upon their logical relationship." Moore v. N.Y.
Cotton Exchange, 270 U.S. 593, 610 (1926). It was not clearly
wrong for the district court to view Hall's numerous renovation
expenditures as one transaction even though it was comprised of
several "subtransactions." Federal Money Laundering supra at §
2.2.2.
5
Hall also challenges his money laundering convictions on the
ground that the government failed to establish a nexus between the
money laundering transactions and interstate commerce as required
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TRIAL-ERROR CLAIMS
A. Brady Violation
Hall claims that the government committed a Brady
violation by withholding information concerning the extent of
Redihan's prior criminal history. See Brady v. Maryland, 373 U.S.
83, 87 (1963) (holding that prosecution violates defendant's due
process rights by withholding evidence from defense that is
material to either guilt or punishment); Giglio v. United States,
405 U.S. 150, 154 (1972) (applying Brady to impeachment evidence).
Before trial, the government disclosed Redihan's prior convictions,
including a 1998 drug conviction in Rhode Island. As part of the
disclosure, the government told defense counsel that the Rhode
Island conviction involved the sale of Percodan and steroids, but
after trial, it was discovered, through the preparation of Hall's
presentence report, that the conviction also involved allegations
of marijuana distribution.
Hall asserts that this omission prejudiced his defense.
One of Hall's defenses was that, while he sold small amounts of
marijuana, he was not involved in the large-scale trafficking
by 18 U.S.C. § 1956(a)(3)(B). This argument was not raised below.
While Hall claims that "many of the transactions" fail the
interstate commerce requirement, he has provided us with only a
skeletal argument and has not cited any authority to support his
claim. This sort of underdeveloped argument is inadequate for Hall
to sustain his "heavy burden" of demonstrating plain error for this
unpreserved claim. United States v. Moran, 393 F.3d 1, 13 (1st Cir.
2004).
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charged in the indictment. Hall argues that evidence concerning
the nature of Redihan's Rhode Island conviction was important
because it would have shown that Redihan lied when he testified
that Hall was his major customer during the period of the charged
conspiracy. He posits that, if he could have shown that Redihan
was supplying drugs to many people, the jury would have been less
likely to believe that Redihan was selling him such large
quantities of marijuana. The government counters that there was no
Brady violation because it was unaware of the marijuana aspects of
the Rhode Island conviction until after the trial, and in any event
the unavailability of this information was not prejudicial to
Hall's defense.
Hall's Brady argument fails because there is no evidence
that, prior to the conclusion of the trial, the government had
information concerning the marijuana aspect of Redihan's Rhode
Island conviction. The information that Redihan's Rhode Island
conviction concerned marijuana trafficking came from a police
report which the government states that it learned about only after
the probation department discovered it during Hall's presentence
investigation.
The government's obligations under Brady only extend to
information in its possession, custody, or control. See United
States v. Josleyn, 206 F.3d 144, 153-54 (1st Cir. 2000).
Nevertheless, Hall contends that the government had a duty to learn
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and disclose the details of Redihan's Rhode Island convictions and
not just the fact of the conviction. While a prosecutor must
disclose information maintained by government agents even if the
prosecutor herself does not possess the information, see Strickler
v. Greene, 527 U.S. 263, 280 (1999), this duty does not extend to
information possessed by government agents not working with the
prosecution, see United States v. Bender, 304 F.3d 161, 164 (1st
Cir. 2002). The information concerning the details of Redihan's
conviction was maintained by the Rhode Island state courts, and
there is no evidence that the federal prosecutor or any agent
working on her behalf had this information prior to or during
trial. See id.
Moreover, even assuming the government had to disclose
the details of Redihan's Rhode Island conviction, Hall has not
shown sufficient prejudice to warrant relief. Brady prejudice
exists where "there is a reasonable probability that the suppressed
evidence would have produced a different verdict." Strickler, 527
U.S. at 281-82. Hall elicited from Redihan, on cross-examination,
that he was a convicted drug dealer and that he had distributed
drugs in Rhode Island. Additional detail about the Rhode Island
conviction would have been mostly cumulative. See Lavallee v.
Coplan, 374 F.3d 41, 46 (1st Cir. 2004). There also was
substantial evidence of Hall's participation in a drug conspiracy
aside from Redihan's testimony. Several other members of the
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conspiracy testified about Hall's criminal conduct. In sum, we are
persuaded the disputed information, if known to Hall, would not
have affected the trial's outcome. See United States v.
Schneiderman, 404 F.3d 73, 79 (1st Cir. 2005).
B. Redihan's Plea Agreement
Hall next challenges the admission of Redihan's plea
agreement for conspiring with Hall to distribute drugs. While
Hall's brief is not explicit, he appears to object to the admission
of the plea agreement because the agreement was conditioned on
Redihan's truthful testimony at Hall's trial. According to Hall,
admitting the agreement had the effect of bolstering Redihan's
credibility in the jury's eyes.
We have previously concluded that "informing the jury of
the contents of a plea agreement of, at least, normal stripe," is
permissible. See United States v. Martin, 815 F.2d 818, 821 (1st
Cir. 1987). Hall has not presented any claim that Redihan's plea
agreement was atypical or outside the rule stated in Martin.
Hall also claims that the district court did not provide
an appropriate cautionary instruction concerning the jury's
consideration of the plea agreement. We disagree. The court
instructed the jury that "[s]ome people [testifying pursuant to a
plea agreement] are entirely truthful when testifying. Still, you
should consider the testimony of these individuals with particular
caution. They may have had reason to make up stories or exaggerate
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what others did because they wanted to help themselves." Hall did
not object to this instruction or propose other language, and the
instruction was not clearly erroneous as given.
C. Money Laundering Jury Instruction
The next challenge concerns the jury instruction on the
concealment element of money laundering. The district court
instructed that the concealment element was satisfied if the jury
concluded that "Hall knew that the transaction in question was
designed in whole or in part to conceal or disguise the nature,
location, source, ownership, or control of the proceeds of the
marijuana trafficking." Hall objected to this instruction on the
ground that the instruction did not sufficiently convey that he had
to intend specifically to conceal the drug proceeds.
We review challenges to the wording of a jury instruction
for abuse of discretion. See United States v. Tom, 330 F.3d 83, 91
(1st Cir. 2003). The court's instruction closely tracked the
language of the statute, which is a strong indicator that the
charge passes muster. See, e.g., United States v. Rosa, 705 F.2d
1375, 1381 (1st Cir. 1983). In any event, the instruction clearly
conveyed that Hall had to intend the transactions to conceal drug
proceeds by requiring such a design on Hall's part. The
instructions were thus adequate.
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D. Agent Giguere's Testimony
Near the close of its case, the government called
Internal Revenue Service Agent Rodney Giguere to testify concerning
his investigation of Hall's finances. Relying on our recent
decisions in United States v. García-Morales, 382 F.3d 12, 16-17
(1st Cir. 2004) and United States v. Casas, 356 F.3d 119-120 (1st
Cir. 2004), Hall challenges Giguere's testimony as improper
overview testimony. He also suggests Giguere provided prejudicial
summary testimony. Evidentiary rulings are reviewed for abuse of
discretion. See United States v. Perez-Ruiz, 353 F.3d 1, 11 (1st
Cir. 2003).
Hall's reliance on García-Morales and Casas is misplaced.
In both cases, we were addressing the problem of the prosecution
beginning its case-in-chief by calling a government agent to
provide an overview of its case. We criticized that practice
because "such testimony raises the very real specter that the jury
verdict could be influenced by statements of fact or credibility
assessments in the overview but not in evidence." Casas, 356 F.3d
at 119.
Here, Giguere did not testify until near the end of the
government's case-in-chief. Most of his testimony concerned his
description of his investigation into Hall's activities. This
testimony was appropriate because it was based on Giguere's
personal knowledge. See García-Morales, 382 F.3d at 16. On a
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couple of occasions, Giguere testified to hearsay statements made
to him during the investigation. But Hall did not object to
Giguere's answers, and the testimony was hardly prejudicial.
To the extent that Giguere provided summary testimony, it
concerned the travel of Hall's funds in and out of various accounts
and was based on testimony and documents in evidence. This sort of
testimony is permissible to summarize complex aspects of a case
such as the financial dealings of a defendant. See Casas, 120 F.3d
at 120 n.4. Furthermore, the court cautioned the jury that it
should rely on its own memory of the facts and not the summary
provided by Giguere. We discern no abuse of discretion.
E. Prosecutorial Misconduct
Hall alleges that the government violated his Fifth and
Sixth Amendment rights by threatening certain witnesses with severe
consequences if they did not testify on the government's behalf.
Specifically, one witness, Andrea Read, testified that government
agents told her that she would face prosecution if she did not tell
them "what they wanted to hear," and a second witness, Steven
Hiscock, testified that a government agent told him that, if he did
not cooperate, the government "would take his home." Both
witnesses testified on behalf of the government and were examined
about the nature of the threats and the effect, if any, these
threats had on their testimony.
-22-
We have recognized that a due process violation can occur
where the government intimidates or harasses potential defense
witnesses to discourage them from testifying. See United States
v. Anguilo, 897 F.2d 1169, 1192 (1st Cir. 1990). Hall has cited a
series of cases in which appellate courts have overturned
convictions where the prosecution coerced a potential witness not
to testify on behalf of the defendant. See, e.g., United States
v. Morrison, 535 F.2d 223, 226 (3d Cir. 1976); United States v.
Smith, 478 F.3d 976, 978-79 (D.C. Cir. 1973). These case are
distinguishable because, here, the challenged conduct was intended
to encourage witnesses to testify. Anguilo and the cases cited by
Hall recognize a constitutional problem when the defendant is
precluded from putting on the defense of his choice because the
government threatens a person into not testifying. See also Webb
v. Texas, 409 U.S. 95, 98 (1972) (per curiam) (stating that
threatening comments by a judge that "effectively drove the witness
off the stand" violated the defendant's constitutional right to
present his defense).
Hall does not claim that he was deprived of testimony but
rather that Read and Hiscock may have testified falsely because of
the government's alleged threats. The problem is a complicated one
because in many cases the government has to press unwilling
witnesses, out of fear or friendship, are reluctant to give. There
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is no blanket rule against inducements by the government to
witnesses to produce truthful testimony.
We will assume that, in extreme circumstances, government
misconduct, could occur through improper efforts to shape testimony
to the government's liking. In this instance, however, there was
conflicting testimony as to whether the government actually
threatened Read or Hiscock and defense counsel was allowed to
cross-examine on the issue, leaving it to the jury to evaluate
witness credibility in light of the evidence concerning the alleged
threats. We do not find a constitutional violation.
Hall also asserts that his constitutional rights were
violated by the government convincing his wife, Jill Hall, to
invoke her Fifth Amendment privilege against self-incrimination and
to decline to testify on his behalf during sentencing. Before Ms.
Hall testified, the government informed the court that Ms. Hall was
a target of an investigation for conduct related to the crimes for
which her husband had been convicted. In response to the
government's representation, the court summoned Ms. Hall's lawyer
to discuss with her the possible consequences of her testimony.
After Ms. Hall and her lawyer consulted, she decided to invoke her
privilege not to testify, and the court upheld her invocation.
Under these facts, the government did not substantially
interfere with Hall's ability to call his wife as a witness. The
court found that Ms. Hall properly invoked her Fifth Amendment
-24-
privilege. There is no evidence that the government acted in bad
faith by notifying the court that Ms. Hall was the target of an
investigation. Moreover, the court handled the matter
appropriately by alerting Ms. Hall to the possible consequences of
testifying and assuring that an attorney was present to counsel Ms.
Hall on her decision of whether to invoke her Fifth Amendment
privilege. See United States v. Serrano, 406 F.3d 1208, 1216 (10th
Cir. 2005) (rejecting claim of government interference with witness
on similar facts).6
FORFEITURE AND SENTENCING ERROR CLAIMS
A. Forfeiture
After finding Hall guilty on all counts, the jury
returned forfeiture findings concerning Hall's drug trafficking and
money laundering activities. See 21 U.S.C. § 853 (forfeiture for
drug trafficking); 18 U.S.C. § 982 (forfeiture for money
laundering). After the jury returned these findings, the court
entered a forfeiture order pursuant to Fed. R. Crim. P. 32.2. In
regard to the drug trafficking forfeiture, the court imposed a
money judgment in the amount of $511,321.22 and ordered the
forfeiture of specific items of personal and real property which
6
Hall also claims that the trial was conducted in such a way
that it denied him due process of law. He offers a litany of
complaints to support the claim. We have reviewed the entire
transcript of Hall's trial and conclude that the district court
presided ably over this complex case, assuring that Hall's
procedural rights were protected at every turn.
-25-
the jury found were connected Hall's drug activities. The money
laundering forfeiture order commanded Hall to turn over specific
items of property (in accord with the jury's findings) but did not
impose an additional money judgment. Both orders permitted the
government to seize "substitute property" under certain
circumstances to satisfy the forfeiture amount.7
Hall's first challenge concerns the district court's
entry of a money judgment as part of the drug trafficking
forfeiture. A money judgment permits the government to collect on
the forfeiture order in the same way that a successful plaintiff
collects a money judgment from a civil defendant. Thus, even if a
defendant does not have sufficient funds to cover the forfeiture at
the time of the conviction, the government may seize future assets
to satisfy the order. Relying on United States v. Croce, 334 F.
Supp. 2d 781 (E.D. Pa. 2004), Hall argues that a court may not
issue a money judgment as part of a forfeiture order.
Croce is at odds with the law of this circuit. In
Candelaria-Silva, 166 F.3d at 42, we ruled that a "criminal
forfeiture may take several forms [including] an in personam
judgment against the defendant for the amount of money the
defendant obtained as proceeds of the offense." This position
7
Substitute property may be seized by the government to
satisfy a forfeiture order where, by an act or omission, the
defendant has prevented the government from tracing his illegally
obtained assets. See United States v. Candelaria-Silva, 166 F.3d
19, 42 (1st Cir. 1999).
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accords with the several appellate decisions that have addressed
the question. See United States v. Huber, 404 F.3d 1047, 1056 (8th
Cir. 2005); United States v. Baker, 227 F.3d 955, 970 (7th Cir.
2000); United States v. Lester, 85 F.3d 1409, 1413 (9th Cir. 1996);
United States v. Robilotto, 828 F.2d 940, 948-49 (2d Cir. 1987);
United States v. Ginsburg, 773 F.2d 798, 801-03 (7th Cir. 1985) (en
banc).
There are two primary reasons for permitting money
judgments as part of criminal forfeiture orders. First, criminal
forfeiture is a sanction against the individual defendant rather
than a judgment against the property itself. See United States v.
Nava, 404 F.3d 1119, 1124 (9th Cir. 2005); United States v. Cunan,
156 F.3d 110, 116 n.7 (1st Cir. 1998). Because the sanction
"follows the defendant as a part of the penalty," the government
need not prove that the defendant actually has the forfeited
proceeds in his possession at the time of conviction. Robilotto,
828 F.2d at 948-49. Second, permitting a money judgment, as part
of a forfeiture order, prevents a drug dealer from ridding himself
of his ill-gotten gains to avoid the forfeiture sanction. In
rejecting an argument against the use of money judgments pursuant
to the RICO forfeiture statute, the Seventh Circuit explained:
What the defendant's argument overlooks
is the fact that a racketeer who
dissipates profits or proceeds of his
racketeering activity on wine, women,
and song has profited from organized
crime to the same extent as if he had
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put the money in his bank account.
Every dollar that the racketeer derives
from illicit activities and then spends
on such items as food, entertainment,
college tuition, and charity, is a
dollar that should not have been
available for him to spend for those
purposes. In order to truly separate
the racketeer from his dishonest gains,
therefore, the statute requires him to
forfeit to the United States the total
amount of the proceeds of his
racketeering activity, regardless of
whether the specific dollars received
from that activity are still in his
possession.
Ginsburg, 773 F.2d at 802. The policy rationale for permitting a
money judgment as part of a forfeiture in a racketeering case
applies equally to a forfeiture in a drug case. See Nava, 404 F.3d
at 1124 n.1 (stating that RICO forfeiture cases are useful in
interpreting the drug forfeiture statute because the statutes are
"substantially identical"). The district court did not err in
entering a money judgment as part of the drug trafficking
forfeiture.8
Hall next contends that the forfeiture orders wrongly
permit the government to seize substitute property. He argues that
the power to forfeit substitute property rests exclusively with the
court.
8
Hall also contends that, even if the court could enter a
money judgment, it could not enter both a money judgment and a
forfeiture of specific assets as part of the same order. Hall has
cited no authority for this proposition, and there are several
cases in which such hybrid orders have been entered. See, e.g.,
Baker, 227 F.3d at 959; Candelaria-Silva, 166 F.3d at 42.
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Federal Rule of Criminal Procedure 32.2(e) provides the
procedure for the forfeiture of substitute property. It states:
"On the government's motion, the court may at anytime enter an
order of forfeiture or amend an existing order of forfeiture to
include property . . ." that is substitute property under an
applicable statute. Fed. R. Crim. P. 32.2(e)(1). The forfeiture
orders in this case state that the government may "forfeit"
substitute property. It is not clear whether this means that the
government may move for forfeiture or may seize the substitute
property without any action by the court.
The government acknowledges that only the court can order
the forfeiture of substitute property. In light of this
acknowledgment and the plain language of Fed. R. Crim. P. 32(e)(1),
we interpret the forfeiture orders in this case to permit the
government to move for substitute property but to reserve for the
court the authority to order the property forfeited.9
B. Sentencing
Hall raises several challenges to his sentence. He
9
Hall also asserts that the forfeiture of his real property
holdings was erroneous because there was insufficient evidence for
the jury to have found a nexus between his real estate holdings and
his drug trafficking and money laundering activities. We disagree.
The jury could have found that Hall renovated his property with
drug proceeds and that he used one of the properties to receive a
shipment of drugs. This evidence is sufficient to support the
jury's forfeiture finding. See United States v. Desmarais, 938
F.2d 347, 353 (1st Cir. 1991); United States v. Parcels of Land,
903 F.2d 36, 39 (1st Cir. 1990).
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claims that the district court clearly erred in its drug quantity
calculation and in its application of the obstruction of justice
enhancement. He also claims that the court should have awarded him
a downward adjustment for acceptance of responsibility. Finally,
he claims that he is entitled to re-sentencing because the district
court treated the Sentencing Guidelines as mandatory.
In deciding Hall's sentence, the district court applied
the grouping rules under the Sentencing Guidelines. See U.S.S.G.
3D1.2. The application of these rules led the court to determine
that Hall's period of incarceration would be based on his
conviction for the drug trafficking conspiracy because it resulted
in the highest offense level.
To calculate the offense level for the conspiracy
conviction, the court concluded that the conspiracy involved
between 700 and 1000 kilograms of marijuana, which led to an
offense level of 30. The court then increased the offense level
to 34 because of Hall's leadership role and his attempt to obstruct
justice by trying to convince Redihan not to testify against him.
When combined with a criminal history category of I, Hall's offense
level yielded a sentencing range of 151 to 188 months. The court
sentenced Hall to 151 months' imprisonment.
1. Drug Quantity
The government bears the burden of proving drug quantity
by a preponderance of the evidence. See United States v. Sklar,
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920 F.2d 107, 112 (1st Cir. 1990). In determining the drug quantity
involved in an offense, the district court "may choose between
plausible estimates of drug quantity but must err on the side of
caution." United States v. Marks, 365 F.3d 101, 105 (1st Cir.
2004). We review the district court's drug quantity calculation
for clear error. See id.
The court estimated the drug quantity involved in the
conspiracy by determining the total profit that Hall earned from
his drug activities and the profit that Hall made per pound. By
dividing the total profit by the profit per pound, the court
determined that the conspiracy involved between 700 and 1000
kilograms of marijuana. We have previously approved this method
for ascertaining drug quantity. See United States v. Gerante, 891
F.2d 364, 369 (1st Cir. 1989).
Nevertheless, Hall contends that the district court's
quantity estimation was clearly erroneous because the court relied
on unreliable evidence in determining Hall's drug profits. We
disagree. The court determined that Hall's overall drug profits
totaled $519,000, which was consistent with evidence showing that
Hall's unreported taxable income was $518,929. The court also
determined that Hall's profit per pound was approximately $300. It
based this determination, in part, on Hall's own statement during
the sentencing hearing that he earned between $200 and $400 profit
per pound of marijuana. This evidence provided a reasonable basis
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for the court to set the variables which it used to calculate the
drug quantity.
2. Obstruction of Justice Enhancement
Section 3C1.1 of the Guidelines mandates a two-level
enhancement where the defendant "willfully . . . attempted to
obstruct or impede the administration of justice during the course
of the . . . prosecution." One recognized way in which a defendant
can obstruct justice is by threatening, intimidating or coercing a
witness. See U.S.S.G. § 3C1.1 cmt. 4. The district court found
that Hall obstructed justice by trying to coerce Redihan not to
testify against him.
Hall contends that the district court erred in applying
the enhancement because it did not make a particularized finding as
to whether Hall had a specific intent to obstruct justice. We
recently declined to decide whether there must be a particularized
finding that the defendant had a specific intent to obstruct
justice to impose a § 3C1.1 enhancement. See United States v.
Fournier, 361 F.3d 42, 43 (1st Cir. 2004) (per curiam). We again
decline to decide this question because the evidence clearly
supports the district court's ultimate finding that Hall attempted
to obstruct justice. See id.
The record demonstrates that Hall told Redihan "not to
say anything, and that [Hall] would never say anything about
[Redihan]." The district court reasonably concluded that Hall was
-32-
trying to silence Redihan by promising him that he would not
disclose Redihan's criminal conduct if Redihan refused to testify
against him. Hall argues that he merely meant to advise Redihan of
his right to invoke his Fifth Amendment privilege against self-
incrimination. But, absent a showing of clear error, the meaning
of Hall's comment is for the district court to decide. See United
States v. Akitoye, 923 F.2d 221, 228 (1st Cir. 1991). The district
court's interpretation of Hall's conduct was not clearly erroneous
in these circumstances.10
3. Acceptance of Responsibility
Hall's challenge to the district court's denial of a
downward adjustment for acceptance of responsibility is entirely
without merit. See U.S.S.G. § 3E1.1. Under most circumstances, a
defendant who goes to trial is not entitled to acceptance of
responsibility credit. See United States v. Mikutowicz, 365 F.3d
65, 76 (1st Cir. 2004). Moreover, acceptance of responsibility is
not generally available to a defendant whose sentence has been
enhanced for obstructing justice. See Fournier, 361 F.3d at 44.
Hall went to trial and attempted to obstruct justice in the
process. On these facts, the district was not clearly wrong to
10
Hall also challenges the district court's measure of the
amount of funds laundered for purposes of calculating the offense
level for the money laundering counts. Because Hall does not
dispute that the drug conspiracy governs for purposes of
determining Hall's punishment under the Guidelines, this challenge
is moot. See United States v. Cruz, 156 F.3d 22, 29-30 (1st Cir.
1998).
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conclude that Hall failed to accept responsibility for his crimes.
4. Mandatory Guidelines
Finally, by way of supplemental briefing, Hall argues
that the district court erred by viewing the Guidelines as
mandatory in determining his sentence. See United States v.
Booker, 543 U.S. 220, 125 S. Ct. 738 (2005). He does not dispute
that he failed to raise this argument below, and we therefore apply
the plain error standard. See United States v. Antonakopoulos, 399
F.3d 68, 76-77 (1st Cir. 2005).
Under our post-Booker plain error cases, we will
ordinarily remand for resentencing if the defendant demonstrates
"either by [evidence] in the existing record or by plausible
proffer [that] there is a reasonable indication that the district
[court] might well have reached a different result under advisory
guidelines." United States v. Heldeman, 402 F.3d 220, 224 (1st
Cir. 2005). The record discloses the district court’s unease with
the degree of speculation involved in the drug quantity
calculation, as well as the court’s recognition of Hall’s difficult
childhood and later good works. Without forecasting whether these
considerations would justify a more favorable sentence, we are
persuaded by the record that the district court at least might be
inclined to impose such a sentence on remand.
CONCLUSION
For the reasons set forth, we affirm all counts of
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conviction and the forfeiture orders but vacate Hall's sentence and
remand for resentencing.
So ordered.
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