United States v. Heid

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________

No. 10-3230
___________

United States of America, *
*
Appellee, *
* Appeal from the United States
v. * District Court for the
* District of North Dakota.
Tamara Lynn Heid, *
*
Appellant. *
___________

Submitted: June 13, 2011
Filed: August 11, 2011
___________

Before LOKEN, BEAM, and GRUENDER, Circuit Judges.
___________

GRUENDER, Circuit Judge.

A federal grand jury returned a superseding indictment charging six defendants
with conspiracy to launder money, a violation of 18 U.S.C. § 1956(h). The
proceedings relating to three of the defendants, including Tamara Heid, were severed
from the remaining defendants, who also had been charged with conspiracy to possess
with intent to distribute and to distribute methamphetamine. Heid pled guilty to the
charge of conspiracy to launder money but later moved to withdraw her plea, arguing
that no factual basis supported her guilty plea. The district court denied her motion
to withdraw and sentenced her to 18 months’ imprisonment. Heid appeals.
I. BACKGROUND

On January 13, 2009, Donavan Slagg, Heid’s son and a methamphetamine
dealer, was arrested and charged with drug violations under North Dakota law. After
the state district court judge set his bail at $50,000 cash, Slagg contacted Heid to
request her help in getting him out of jail. At Heid’s plea hearing, the district court
found that “she did so using some proceeds that Mr. Slagg had . . . in her home and
then called in debts or debts were called in by [Slagg] through a series of phone calls.”
Heid ultimately assembled the necessary funds. Although a bail bondsman was not
necessary to post the bail, she retained two bondsmen to deliver the money to the
Burleigh County Courthouse and paid them $1,000. In its order denying her motion
to withdraw her plea, the district court found that Heid told the bondsmen that “the
funds were the life savings of [her] and her mother.” However, according to the
unobjected-to facts in Heid’s presentence investigation report, Robert Zacher, a cohort
of Slagg’s, admitted that he gave Heid approximately $9,000 for Slagg’s bail and that
at least some of this money derived from drug proceeds.

The bondsmen initially attempted to post the bail alone, but after they
discovered that the cash Heid provided them was $2,000 short they contacted Heid,
who soon joined them at the courthouse. After they located the errant funds, the court
clerk informed Heid and the bondsmen that one of them would have to sign the
requisite IRS currency transaction form. Both Heid and the bondsmen manifested
reluctance, stemming, the district court found, from “the mistaken belief that the
signature would somehow automatically expose them to income tax liability.” One
of the bondsmen eventually signed the document, however, at which point Heid
collected her son.

On September 24, 2009, a federal grand jury returned a superseding indictment
charging seven persons, including Slagg, with conspiracy to possess with intent to
distribute and to distribute methamphetamine, a violation of 21 U.S.C. §§ 841(a)(1)

-2-
and 846. The indictment also charged Heid, Slagg, the two bondsmen, and two
persons who contributed to the bail money with conspiracy to launder money, arising
out of their efforts to post Slagg’s bail. The proceedings relating to Heid and the two
bondsmen—the three defendants charged only with the money laundering
conspiracy—were severed from the remaining defendants, all of whom also were
charged with the drug conspiracy.

On April 2, 2010, Heid entered a guilty plea, without a plea agreement, to the
single count of conspiracy to launder money. At the plea hearing, the district court
found that the money used to post Slagg’s bail derived, in part, from money that Slagg
kept at his mother’s house and from contributions made by people who owed Slagg
money. In addition, when asked by the district court whether she knew that some of
the money was “dirty,” Heid responded that she “d[id not] want to know” the origin
of the bail money and admitted that she knew her son was a drug dealer and that she
“k[ept] records of his stuff when he sells things.” Heid also confirmed that her
“bottom line” reason for posting the bail was to “get [her] son out of jail.” The district
court then made the following statement:

[T]he Court will accept the plea of guilty to the money laundering charge
with a caveat, and that caveat is, I’m going to wait until I’m totally
familiar with the complete record in this matter before making a
determination that the intent of the entire process was to disguise,
conceal, etcetera . . . . So for the record today, I’m accepting the plea
and it’s going to be subject to the possibility of authorizing counsel to
challenge at a later date the factual basis; namely, the intent, after the
completion of the trial involving the remaining two defendants.1

1
Heid does not challenge the propriety of the district court’s deferring
determining the factual basis until after the plea hearing (indeed, she affirms that the
district court may “defer its inquiry until sentencing”).

-3-
 At this point, the prosecutor interjected, “On the issue of the factual basis,
Judge, I think the Court can establish the intent issue with some questions of Ms.
Heid.” The prosecutor then stated that a number of “guarded” recorded telephone
conversations between Heid and Slagg “are really pretty good evidence . . . of intent
to conceal.” Moreover, the prosecutor reiterated that Heid “kn[ew] full well that a
bondsman wasn’t needed” but retained the bondsmen to “make it look like this was
a legitimate transaction where a bondsman brings in money and posts it for an
individual.” The district court did not renew its colloquy with Heid but simply stated,
“Well, for the record -- and at this point I have accepted a guilty plea to Count 2 of the
Indictment, and I’m not -- as I’ve indicated, I’m not certain that that acceptance is
going to stick, but for right now it definitely is.”

The two bondsmen subsequently proceeded to trial. A jury returned verdicts
of guilty as to both defendants, but the district court entered judgments of acquittal,
concluding that the evidence was insufficient to support a reasonable finding either
that the bondsmen “knew that the money was dirty” or that they “agreed to take or
took any action for any purpose other than helping Ms. Heid get her son out of jail.”
United States v. Marchus, No. 09-cr-69, 2010 WL 1440984, at *4 (D.N.D. Apr. 9,
2010). Even “[i]f Slagg and his mother had additional motives,” the court maintained,
“there is no evidence the [bondsmen] were aware of them.” Id.

On April 30, 2010, Heid moved to withdraw her guilty plea, arguing that “what
[she] acknowledged at her change of plea hearing d[id] not constitute a crime” and
noting that the district court had “permitted Heid[] . . . the ability to challenge whether
. . . the transaction of posting bond was designed to or involved the actual intent to
conceal illicit proceeds.” The district court denied Heid’s motion, apparently
determining that Heid had not shown a fair and just reason for withdrawing her plea
based on what the court characterized as the Government’s position that “it is not
necessary to show an intent to launder money, only to show an intent to post the cash

-4-
as a bail bond.” United States v. Heid, No. 09-cr-69-06, 2010 WL 2403048, at *2
(D.N.D. June 9, 2010). Following entry of judgment, Heid appealed.

II. DISCUSSION

Heid renews her contention that an inadequate factual basis existed for her
guilty plea and, thus, that a fair and just reason exists for withdrawing the plea. “After
a guilty plea is accepted but before sentencing, a defendant may withdraw the plea if
he establishes ‘a fair and just reason for requesting the withdrawal.’” United States
v. Goodson, 569 F.3d 379, 382 (8th Cir. 2009) (quoting Fed. R. Crim. P. 11(d)(2)(B)).
“While the standard is liberal, the defendant has no automatic right to withdraw a
plea.” United States v. Ramirez-Hernandez, 449 F.3d 824, 826 (8th Cir. 2006).
“Even if such a fair and just reason exists, before granting the motion a court must
consider ‘whether the defendant asserts his innocence of the charge, the length of time
between the guilty plea and the motion to withdraw it, and whether the government
will be prejudiced if the court grants the motion.’” Id. (quoting United States v.
Nichols, 986 F.2d 1199, 1201 (8th Cir. 1993)). However, “[i]f the defendant fails to
establish a fair and just reason for withdrawing the guilty plea, the trial court need not
address the remaining considerations.” Nichols, 986 F.2d at 1201. We review the
district court’s decision not to allow the withdrawal of a guilty plea for an abuse of
discretion. United States v. Maxwell, 498 F.3d 799, 801 (8th Cir. 2007); United States
v. Wicker, 80 F.3d 263, 266 (8th Cir. 1996).

Rule 11(b)(3) of the Federal Rules of Criminal Procedure requires that “[b]efore
entering judgment on a guilty plea, the court must determine that there is a factual
basis for the plea.” The purpose of this rule is “to ‘protect a defendant who is in the
position of pleading voluntarily with an understanding of the nature of the charge but
without realizing that his conduct does not actually fall within the charge.’”
McCarthy v. United States, 394 U.S. 459, 467 (1969) (quoting Fed. R. Crim. P. 11
Advisory Comm. Notes (1966)). Rule 11 “does not specify that any particular type

-5-
of inquiry be made . . . . An inquiry might be made of the defendant, of the attorneys
for the government and the defense, of the presentence report when one is available,
or by whatever means is appropriate in a specific case.” Fed. R. Crim. P. 11 Advisory
Comm. Notes (1974); see also United States v. Brown, 331 F.3d 591, 595 (8th Cir.
2003). In addition, we observe that the district court’s order denying Heid’s motion
to withdraw her plea articulated a number of facts adduced at the bondsmen’s trial.
See United States v. Wetterlin, 583 F.2d 346, 353 (7th Cir. 1978) (“[I]f the district
judge finds it necessary to look to evidence other than the defendants’ statements to
establish the factual basis for the plea in any situation, these additional facts or
evidence must be specifically articulated on the record.”).2

Conspiring to launder money in violation of 18 U.S.C. § 1956(h) requires that
the defendant “agreed with another person to violate the substantive provisions of the
money-laundering statute.” United States v. Hynes, 467 F.3d 951, 964 (6th Cir.
2006); see also United States v. Pizano, 421 F.3d 707, 725 (8th Cir. 2005). “At base,
there must exist an agreement to achieve an illegal purpose.” Pizano, 421 F.3d at 725-

2
We decline Heid’s invitation to explore the entire record of the bondsmen’s
trial, as such an approach flatly contravenes the requirement that “the sentencing judge
must develop, on the record, the factual basis for the plea.” Santobello v. New York,
404 U.S. 257, 261 (1971); see also United States v. Keiswetter, 860 F.2d 992, 996
(10th Cir. 1988) (“[T]he trial judge’s exercise of his discretion can only be judged by
reference to the record.”); Sassoon v. United States, 561 F.2d 1154, 1159 (5th Cir.
1977) (“[T]he factual basis, whatever its source, must appear clearly on the record.”);
Fed. R. Crim. P. 11(g) (“If there is a guilty plea or a nolo contendere plea, the record
must include the inquiries . . . required under Rule 11(b).”). “General references by
the district judge to the fact that he heard evidence at another trial which related to this
charge and this defendant, but without specifying precisely what evidence he had in
mind, is not sufficient for this court to consider that entire trial as being part of this
record.” Wetterlin, 583 F.2d at 352 (emphasis added). Rather, as noted above, our
consideration of facts adduced at the bondsmen’s trial is limited to those facts—all
unchallenged by Heid—specifically articulated in the district court’s order rejecting
her challenge to the factual basis for her plea.

-6-
26 (quoting United States v. Evans, 272 F.3d 1069, 1082 (8th Cir. 2001)). The
charged object of the conspiracy in the present case was a violation of the transaction
provision of the money laundering statute, 18 U.S.C. § 1956(a)(1)(B)(i), and the
financial transaction identified in the indictment was “[t]he posting of $50,000 cash
at the Burleigh County Courthouse . . . for the bond of Donavan Michael Slagg.”
There are four elements to this offense:

(1) defendant conducted, or attempted to conduct a financial transaction
which in any way or degree affected interstate commerce or foreign
commerce; (2) the financial transaction involved proceeds of illegal
activity; (3) defendant knew the property represented proceeds of some
form of unlawful activity; and (4) defendant conducted or attempted to
conduct the financial transaction knowing the transaction was “designed
in whole or in part [] to conceal or disguise the nature, the location, the
source, the ownership or the control of the proceeds of specified
unlawful activity.”

United States v. Phythian, 529 F.3d 807, 813 (8th Cir. 2008) (quoting
§ 1956(a)(1)(B)(i)). Thus, § 1956(a)(1)(B)(i) requires the existence of two mental
states: (1) the defendant’s knowledge that the money represented the proceeds of some
form of unlawful activity, and (2) the defendant’s knowledge that the transaction was
“designed . . . to conceal or disguise” a specified attribute of the money. Interpreting
the analogous transportation provision of the money laundering statute, which
prohibits the transportation of certain criminal proceeds into or out of the United
States “knowing that such transportation . . . is designed in whole or in part . . . to
conceal or disguise the nature, the location, the source, the ownership, or the control”
of the funds, 18 U.S.C. § 1956(a)(2)(B)(i), the Supreme Court held in Cuellar v.
United States that the statute’s “design” element “requires proof that the purpose—not
merely effect—of the transportation was to conceal or disguise a listed attribute” of
the funds. 553 U.S. 550, 567 (2008); see also United States v. Williams, 605 F.3d
556, 564-65 (8th Cir. 2010) (finding Cuellar’s holding applicable to the transaction

-7-
provision of the money laundering statute).3 Thus, the Government must show that
concealment is an “intended aim” of the transaction, Cuellar, 553 U.S. at 563, whether
from direct evidence or circumstantial evidence, United States v. Cruzado-Laureano,
404 F.3d 470, 483 (1st Cir. 2005); see also United States v. Blackman, 904 F.2d 1250,
1257 (8th Cir. 1990).

We agree with Heid that an adequate factual basis does not appear in the record.
Even assuming Heid knew that a purpose of the transaction was the concealment or
disguise of the money’s listed attributes, the record contains no basis to reasonably
determine that she conspired with any other person to further that illegal purpose. The
superseding indictment alleged that Heid conspired with Slagg, the two bondsmen,
and two men who contributed to Slagg’s bail, Gregory Taylor and Robert Zacher, to
violate § 1956(a)(1)(B)(i). We consider the record as it pertains to each of these
alleged co-conspirators in turn.

The only mention in the record of Slagg’s involvement in the bail-posting
transaction is the district court’s finding at the plea hearing that Slagg requested Heid
to gather $50,000 to post his bail and the Government’s characterization of these
conversations as “guarded.” Although this characterization of the conversations may
well support a reasonable determination that Heid and Slagg agreed to post Slagg’s
bail with tainted drug money, it provides no basis for a determination that Slagg knew
that the transaction was “designed in whole or in part . . . to conceal or disguise” the
listed attributes of the money.4 The record likewise contains no facts upon which a

3
Of course, concealment need not be the sole purpose of the transaction; the
statute requires only that the transaction be designed “in whole or in part” to conceal.
§ 1956(a)(1)(B) (emphasis added); see also Cuellar, 553 U.S. at 566 n.7.
4
We note that in our companion opinion, United States v. Slagg, No. 10-
3269—which upholds the evidentiary sufficiency of Slagg’s conviction for conspiring
to launder money—we hold that the recorded telephone conversations are sufficient
to allow a reasonable jury to infer that Slagg knew that the bail-posting transaction

-8-
court reasonably could determine that the two bondsmen agreed with Heid to commit
money laundering, as there is no basis for determining that the bondsmen knew that
the money “represent[ed] the proceeds of some form of unlawful activity.”
§ 1956(a)(1). Indeed, in its order denying Heid’s motion to withdraw her guilty plea,
the district court found that Heid falsely told the bondsmen that the $50,000
comprised her and her mother’s life savings. Because there is no indication that the
bondsmen knew that the money was tainted, a court cannot reasonably determine that
they entered an agreement with Heid to launder the money. Finally, the record
contains skeletal evidence concerning the final alleged co-conspirators, Taylor and
Zacher. The presentence investigation report notes simply that the two “were among
those attempting to raise money for Mr. Slagg’s bail.” This conduct alone does not
permit an inference that they knew that a purpose of the bail-posting transaction was
to conceal or disguise the money’s attributes, as we repeatedly have held that “the
money laundering statute may not be so broadly construed that it becomes a ‘money
spending statute.’” United States v. Shoff, 151 F.3d 889, 892 (8th Cir. 1998) (quoting
United States v. Herron, 97 F.3d 234, 237 (8th Cir. 1996)); see also United States v.
Rockelman, 49 F.3d 418, 422 (8th Cir. 1995).

Absent proof of an agreement between two or more persons “to violate the
substantive provisions of the money-laundering statute,” Hynes, 467 F.3d at 964, there
is no factual basis for Heid’s plea to the charge of conspiracy to launder money.
Accordingly, we hold that Heid has shown a “fair and just reason” for withdrawing
her plea, particularly as the district court deferred a final determination of factual basis
until after the conclusion of her co-defendants’ trial and essentially invited Heid to

was designed, in part, to conceal or disguise listed attributes of the funds.
Unfortunately, the conversations are not part of the present record, see supra note 2,
and therefore our consideration is limited to the Government’s exiguous account of
them. We also observe, however, that the Government has no cause to complain in
light of its representation at oral argument that our review of the district court’s factual
basis determination is confined to the transcript of the plea hearing.

-9-
challenge the factual basis for her plea in a motion to withdraw, and the Government
does not meaningfully argue that Heid’s plea should stand in the absence of a factual
basis in the record.

III. CONCLUSION

For the foregoing reasons, we vacate Heid’s guilty plea and remand the case to
the district court for further proceedings not inconsistent with this opinion.
_____________________________

-10-