United States Court of Appeals
Fifth Circuit
F I L E D
In the February 22, 2006
United States Court of Appeals Charles R. Fulbruge III
for the Fifth Circuit Clerk
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m 05-10065
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UNITED STATES OF AMERICA,
Plaintiff-Appellee,
VERSUS
HUMBERTO FIDEL REGALADO CUELLAR,
Defendant-Appellant.
_________________________
Appeal from the United States District Court
for the Northern District of Texas
______________________________
Before DAVIS, SMITH, and DENNIS, the district court improperly admitted the gov-
Circuit Judges. ernment’s expert testimony. He also contends
that the court should have granted his post-
JERRY E. SMITH, Circuit Judge: trial motion for acquittal because the govern-
ment failed to present evidence sufficient to
Humberto Cuellar was arrested while trav- prove the required elements of the crime be-
eling toward Mexico with a large sum of cash yond a reasonable doubt. Because we agree
hidden in his car. He was convicted of inter- that the government’s evidence was insuffi-
national money laundering in violation of 18 cient to support a finding of guilt under the
U.S.C. § 1956(a)(2)(B)(i). Cuellar argues that specific statute of conviction, we reverse and
render a judgment of acquittal. traffickers in transporting drugs and money
across the border. He also indicated that cour-
I. iers of drug proceeds would almost certainly
The following facts were established by the know they were involved in illegal activity and
government at trial: On July 14, 2003, Cuellar were carrying money.
was traveling south toward Mexico on State
Highway 77. He was pulled over by Deputy Nuckles’ description of the typical drug
Kevin Herbert from the Schleicher County courier was consistent with the facts concern-
Sheriff’s office. Because Cuellar spoke no ing Cuellar. Nuckles did not testify regarding
English, Herbert called State Trooper Danny what customarily happens to the drug money
Nunez to assist him. in Mexico other than to say that it is returned
to those in charge of the drug trafficking
Nunez became suspicious of Cuellar be- operation.
cause he was avoiding eye contact and seemed
very nervous. Cuellar claimed he was on a The government’s case consisted solely of
three-day business trip despite the fact that he the testimony of the officers and Nuckles.
had no luggage or extra clothing. Nunez no- Cuellar took the stand and testified that he
ticed a bulge in Cuellar’s pocket, and when knew nothing about the money and was re-
asked about it, Cuellar pulled out a wad of turning the car to Acuna, Mexico, at the be-
cash that smelled like marihuana to the offi- hest of a shadowy character he identified only
cers. Nunez then asked and received permiss- as Mr. Morcia. After all the evidence was pre-
ion to search the car and requested that a drug sented, Cuellar moved for a judgment of ac-
search dog come to the scene. quittal, which was denied. The jury found him
guilty. After trial, he filed a motion for judg-
The dog alerted on the money in Cuellar’s ment of acquittal, alleging that the government
pocket and on the back floorboard area of the had failed to prove the required elements of
car. The officers found a hidden compartment the offense. The district court denied the
underneath the floorboard containing $83,000 motion and sentenced Cuellar.
wrapped in duct tape inside blue sacks and
marked with a Sharpie as to the amounts in II.
each bundle. The denial of a motion for judgment of ac-
quittal is reviewed de novo. United States v.
The foregoing facts were established Delgado, 256 F.3d 264, 273 (5th Cir. 2001).
through the testimony of Herbert, Nunez, and The verdict will be affirmed if a reasonable
Deputy Jason Chatham, who handled the drug trier of fact could conclude from the evidence
dog. The government also offered testimony that the elements of the offense were estab-
from Special Agent Richard Nuckles of U.S. lished beyond a reasonable doubt. Id. In as-
Immigration and Customs, an expert on drug sessing the sufficiency of the evidence, this
trafficking organizations, who testified that court does not evaluate the weight of the evi-
drug operations typically involve the flow of dence or the credibility of the witnesses but
drugs from Mexico into the United States and views the evidence in the light most favorable
the flow of cash proceeds of drug sales from to the verdict, drawing all reasonable infer-
the United States back into Mexico. He de- ences to support the verdict. Id. at 273-74.
scribed the usual methods employed by drug
2
Cuellar argues that Nuckles’s expert testi- the government to prove five distinct elements.
mony should not have been allowed because First, it must show that the transportation or
the government failed to provide the defense attempted transportation of funds was across
with a summary of his expected testimony af- U.S. borders. Second, the funds in question
ter the court ordered it to do so. Cuellar also had to be the proceeds of specified unlawful
contends that parts of Nuckles’s testimony activity. Third, Cuellar must have known that
constituted impermissible drug courier profil- the funds represented such proceeds. Fourth,
ing and should have been excluded on that his transportation of the funds must have been
basis. See United States v. Williams, 957 F.2d designed (in whole or in part) to conceal or
1238, 1241 (5th Cir. 1992). Because the gov- disguise the nature, location, source, or con-
ernment failed to present sufficient evidence to trol of the proceeds. Fifth, Cuellar had to
support a guilty verdict, we do not reach these know that such concealment was the design of
evidentiary issues. his enterprise.
Cuellar argues that we should exclude from On the first element (the international ele-
our sufficiency of the evidence analysis any ev- ment), the government offered sufficient evi-
idence that was improperly admitted. This dence that Cuellar was attempting to transport
argument is unavailing. In reviewing a verdict money into Mexico. He admitted as much
for sufficiency of the evidence, we ask whether when he told the officers he was headed for
a reasonable jury could have returned a guilty Acuna. Although he claimed he did not know
verdict based on the evidence presented to it.1 the money was in the car, the jury was free to
We do not ask at this stage whether that disbelieve this testimony, especially given the
evidence was properly admitted, so we review inconsistencies in his story.
the sufficiency of the government’s case in
light of all the evidence, including the disputed On the second and third elements, there
expert testimony.
III. 2
(...continued)
The plain language of the statute of convic- in the United States to or through a place out-
tion, 18 U.S.C. § 1956(a)(2)(B)(i), which out- side the United States or to a place in the United
laws international money laundering,2 requires States from or through a place outside the
United StatesSS
1 (B) knowing that the monetary instrument or
See United States v. Marshall, 762 F.2d 419,
423 (5th Cir. 1985) (holding defendant not entitled funds involved in the transportation, transmis-
to have court of appeals disregard inadmissible sion, or transfer represent the proceeds of some
evidence in conducting sufficiency of evidence form of unlawful activity and knowing that
review). such transportation, transmission, or transfer is
designed in whole or in partSS
2
That section provides:
(i) to conceal or disguise the nature, the loca-
“(a)(2) Whoever transports, transmits, or trans- tion, the source, the ownership, or the control of
fers, or attempts to transport, transmit, or trans- the proceeds of specified unlawful activity . . .
fer a monetary instrument or funds from a place
(continued...) shall be sentenced . . . .
3
was sufficient evidence to allow a reasonable ing statute in reversing the conviction of a de-
jury to infer that the money was proceeds of fendant who used fraudulently-acquired credit
drug trafficking and that Cuellar knew that. cards to purchase computers.4 We focused on
The circumstances surrounding the arrest were the underlying purpose or “design” of the al-
suspicious to say the least, and Cuellar’s prof- leged laundering transaction and considered
fered explanation for his activities was unim- the design of the transaction to be the acquisi-
pressive. The money smelled of marihuana tion of computers. The concealment of the
and was bundled in a way that is typical of true source of the money was just part of the
drug trafficking. The jury was able to infer means the defendant employed to achieve this
from the expert testimony regarding drug traf- design.
ficking operations that Cuellar’s conduct was
consistent with that of a typical drug money
courier who knows what he is carrying. Based
on this evidence, a reasonable trier of fact 4
The government argues that Oliniyi-Oke is in-
could have concluded that the money hidden in applicable because the court was interpreting
the car was proceeds of drug trafficking and § 1956(a)(1) rather than § 1956(a)(2)(B)(i). The
that Cuellar knew that. government attempts to distinguish the two sections
on the ground that § 1956(a)(1) requires a “finan-
On the fourth and fifth elements, we ask cial transaction” but § 1956(a)(2)(B)(i) proscribes
whether Cuellar’s transportation of the money certain transports, transmissions, and transfers of
was designed in whole or in part to conceal or funds and nowhere mentions “financial transac-
disguise its nature, location, source, ownership tions.” The government’s proffered distinction is
or control and whether Cuellar knew that.3 irrelevant.
Based on its statements at trial and in its appel-
late brief, the government apparently thought The statutory language focused on by the Olin-
it had proven this element merely by showing iyi-Oke court is found in the concealment prong of
that the money was hidden in Cuellar’s car. § 1956(a)(1). Section 1956(a)(1) and (2)(B)(i) use
identical language to require that the defendant’s
Throughout the trial, the government focused
activity be “designed in whole or in part to conceal
its attention on establishing that the money or disguise the nature, the location, the source, the
was most likely drug proceeds, essentially ownership, or the control of the proceeds of speci-
overlooking the equally important concealment fied unlawful activity.” Differing language else-
prong. where in the two sections has no bearing on the
meaning of their identical concealment prongs.
In United States v. Oliniyi-Oke, 199 F.3d
767, 771 (5th Cir. 1999), this court discussed Precedent directly interpreting the concealment
the concealment prong of the money launder- prong of § 1956(a)(1) is therefore binding on our
interpretation of the same language in § 1956(a)-
(2)(B)(i). See United States v. Beiganowski, 313
3
In other words, “the government must prove F.3d 264, 279 (5th Cir. 2002) (holding that an of-
that the defendant intended to conceal the nature, fense under § 1956(a)(2)(B)(i) is almost identical
location, source, ownership, or control of the pro- to an offense under § 1956(a)(1), with the lone
ceeds of the unlawful activity.” United States v. exception of the international element of § 1956-
Cihak, 137 F.3d 252, 261 (5th Cir. 1998) (emp- (a)(2)(B)(i)). The government’s concern with
hasis added) (citing United States v. Dobbs, 63 whether Cuellar was engaged in a financial trans-
F.3d 391, 397-98 (5th Cir.1995)). action is therefore misplaced.
4
We held that if the defendant’s purchases even likely, that the money was destined for
were “engaged in for present personal benefit, some kind of laundering once in Mexico, but
and not to create the appearance of legitimate the government provided no evidence to in-
wealth, they do not violate the concealment dicate such was the case.
prong of the money laundering statute.” Id.
(citing United States v. Garcia-Emanuel, 14 Even if such evidence had been presented,
F.3d 1469, 1474 (10th Cir. 1995) (emphasis the government would also have had to show
added). Concealment of the money facilitated that Cuellar knew his actions were designed to
the transaction but was not itself the design of help launder the money. There is no evidence,
defendant’s activity, so no money laundering nor was it alleged, that Cuellar would have had
occurred, and the statute was not violated. anything to do with any subsequent launder-
“[T]he requirement that the transaction be de- ing.
signed to conceal implies that more than this
trivial motivation to conceal must be proved.” In summary, under the government’s the-
Id. ory, hiding drug money in one’s car with the
intent to take it across the Mexican border is
The alleged laundering activity is Cuellar’s international money laundering. At trial, the
transportation of the cash across the border to government successfully proved the case it set
an unknown recipient. The underlying pur- out to establish. This court’s precedent indi-
pose of the enterprise, as the government pre- cates, however, that much more than that is
sented it to the jury, was to get the money to required to uphold a conviction under the par-
Mexico. Concealing the money in the hidden ticular statute that the government (for what-
compartment was the means employed to ever reason) elected to use, § 1956(a)(2)-
achieve this, but the concealment itself was not (B)(i).
the “design” of Cuellar’s activity, as the statute The government failed to provide sufficient
requires; the concealment was merely ancillary evidence to show that Cuellar’s activity was
to Cuellar’s design. designed “to conceal or disguise the nature,
the location, the source, the ownership, or the
Taking hidden cash to Mexico is not money control of the proceeds of specified unlawful
laundering unless some further design to con- activity.” Armed with a proper understanding
ceal can be proved. The statute would pro- of the statute, no rational trier of fact could
hibit taking drug money to Mexico for the pur- have found Cuellar guilty based on the evi-
pose of concealing the fact that it is drug dence presented at trial.5
money. The statute does not outlaw conceal-
ing drug money from the police for the pur-
5
pose of taking it to Mexico. This does not necessarily mean that Cuellar
will be free of prosecution. Under United States v.
Thus, the government failed to prove the Dixon, 509 U.S. 688, 696 (1993), he may be tried
necessary design to conceal. Cuellar was not for separate offenses arising from the same crimi-
trying to “create the appearance of legitimate nal transaction so long as “each offense contains an
element not contained in the other.” Thus the
wealth” by smuggling drug money across the
government may try Cuellar again, provided that
border. The financial channels through which
(1) the new charge contains an element not found in
the money might have flowed subsequent to § 1956(a)(2)(B)(i) and (2) § 1956(a)(2)(B)(i)
Cuellar’s venture are unknown. It is possible, (continued...)
5
The conviction is REVERSED and a judg-
ment of acquittal is RENDERED.
5
(...continued)
contains an element not found in the second of-
fense. Without passing judgment on the double
jeopardy implications of any future prosecution, we
note that the government may be able to make a
case against Cuellar for bulk cash smuggling under
31 U.S.C. § 5332(a).
6
DAVIS, Circuit Judge, dissenting:
Because I am persuaded that the government proved the concealment
prong of the money laundering offense in this case, I dissent from
majority opinion.
The issue boils down to whether the government produced suffi-
cient evidence to allow the jury to find that the defendant was
knowingly transporting the funds (drug proceeds) under a plan
designed at least in part “to conceal or disguise the nature, the
location, the source, the ownership, or the control of the proceeds
of specified unlawful activity.” 18 U.S.C. § 1956 (a)(2)(B)(i).
The majority opinion concludes, and I agree, that the government
offered sufficient evidence to establish that the money was
proceeds of drug trafficking and that Cuellar knew that. The
government also proved that the defendant knowingly concealed the
money in the vehicle and intended to deliver the funds to Mexico.
Based on the plain language of the statute, once the government
produced evidence that allowed the jury to find these facts, the
concealment element was established.
The jury could have found concealment on several levels. First,
there was an overall plan or design (in which Cuellar was an
integral part) to surreptitiously move cash proceeds of drug sales
from the United States to Mexico. The expert on drug trafficking
organizations testified that this was the standard modus operandi
of such organizations. On another level, this plan in which
Cuellar participated, effectively removed the funds from the
7
kingpin’s hands and concealed his ownership and control of the
funds. The removal of the funds and concealment of the owner of
the funds also served to remove incriminating evidence from the
possession of the kingpin and avoided possible government confisca-
tion of the cash. The surreptitious movement of these funds to
Mexico as part of the cycle of the drug trade was, of course,
necessary because unlike a legitimate businessman, the drug kingpin
could not go to the bank, deposit the funds and wire the money to
his supplier in Mexico. The concealed movement of the funds was an
integral part of the business of the drug enterprise. Also, and
at its most basic level, Cuellar’s method of carrying out his
mission described above included hiding or concealing the funds in
his vehicle and surrounding the money with animal hair to conceal
the fund’s location from drug dogs.
Other circuits have found on facts similar to ours that the
government established the concealment prong of the money launder-
ing statute. In United States v. Hurtado, 38 Fed. Appx. 661 (2d
Cir. 2002) (unpublished), Hurtado challenged the sufficiency of the
evidence to support her conviction for international money
laundering. The evidence showed that she, along with two other
adults and three children, were stopped as they crossed the border
from the U.S. to Canada. Upon a search of her minivan, agents
found several bags of luggage containing $540,000. Drug dogs
alerted to two of the bags which contained the largest sums of
money. The government presented testimony of customs agents
8
regarding methods used by drug cartels to exchange large quantities
of drugs for cash using couriers and how money was customarily
packaged. The funds in the minivan were packaged in a manner
consistent with their testimony. The record evidence also
reflected that Hurtado lied about her employment and had no
legitimate explanation for the source of the cash or its destina-
tion. Based on this record the court concluded that a rational
jury could find all the essential elements of the money laundering
offense.
In United States v. Carr, 25 F.3d 1194 (3d Cir. 1994), the
following evidence was found sufficient to satisfy the concealment
prong of the statute: before departing on a trip from Philadelphia
to Columbia, Carr received a blue carry-on bag from Gonzalez (the
kingpin of the conspiracy); when asked to declare any monetary
instruments in excess of $10,000, he stated that he had only $4,000
in cash; a search revealed $180,000 in cash hidden in containers in
the bag and $6,000 on Carr’s person; Carr told a highly suspicious,
“if not incredible,” story about the source and destination of the
funds. The facts of our case are not materially different from
those in Hurtado or Carr and in my view satisfy the concealment
element of the international money laundering statute.
U.S. v. Oliniyi-Oke, 199 F.3d 767 (5th Cir. 1999), the case
relied on by the majority, is not inconsistent with this result.
Oliniyi-Oke involved a transaction in which the defendant used a
fraudulently obtained credit card issued in the name of the victim
9
to purchase two computers. This court found that the transactions
were engaged in for present personal benefit and not to create the
appearance of legitimate wealth, so they did not satisfy the
concealment prong of the money laundering statute. In other words,
the straightforward use of a credit card to make a purchase does
not satisfy the concealment element of the offense.
We are not dealing with a defendant’s straightforward purchase of
goods with a stolen or fraudulently obtained credit card. The
government established in this case that the defendant purposefully
concealed drug proceeds and was transporting them to Mexico in a
manner consistent with drug trafficking patterns for the region.
Under these facts, it is clear to me that the jury could easily
find that the defendant knew “that such transportation, transmis-
sion, or transfer is 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” as is
required for conviction under 18 U.S.C. § 1956(a)(2)(B)(i). As set
forth above, the Second and Third Circuits dealing with factual
situations substantially similar to these have found this conceal-
ment element satisfied.
Based on the plain language of the statute and the decisions of
other circuits discussed above, I would affirm Cuellar’s convic-
tion. Accordingly, I respectfully dissent.
10
11