United States v. Cedeño-Pérez

United States Court of Appeals
For the First Circuit

No. 07-2126

UNITED STATES OF AMERICA,

Appellee,

v.

JUAN CEDEÑO-PÉREZ,

Defendant, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF PUERTO RICO

[Hon. Salvador E. Casellas, U.S. District Judge]

Before

Lynch, Chief Judge,
Leval,* and Lipez, Circuit Judges.

Juan J. Hernández López de Victoria for appellant.
Timothy R. Henwood, Assistant United States Attorney, with
whom Nelson Pérez-Sosa, Assistant United States Attorney, and Rosa
Emilia Rodriguez-Velez, United States Attorney, were on brief, for
appellee.

August 26, 2009

*
Of the Second Circuit, sitting by designation.
 LIPEZ, Circuit Judge. After delivering more than

$200,000 to an Immigrations and Customs Enforcement ("ICE") agent

posing as a money launderer, Juan Cedeño-Pérez ("Cedeño") was

charged with conspiracy to commit money laundering. At trial, the

government presented evidence from a confidential informant who ran

the money laundering operation, the ICE agent who accepted the

money from Cedeño, and others involved in the investigation.

Cedeño was convicted. He moved for a judgment of acquittal at all

appropriate times, arguing that the evidence was insufficient to

establish that he possessed the mental state required for

conspiracy to commit money laundering. The court denied the

motion, and Cedeño appealed. We affirm.

I.

A. Factual Background

In a sufficiency challenge, we state the facts in the

light most favorable to the verdict. United States v. Upton, 559

F.3d 3, 6 (1st Cir. 2009).

In 2003 and 2004, ICE investigated drug trafficking and

money laundering conducted by the Toloza family of Colombia.

Acting in conjunction with confidential informant Werner Romero,

ICE agents in Puerto Rico posed as money launderers for the

Tolozas, and accepted deliveries of large quantities of cash

resulting from payments for the Tolozas' drugs. ICE deposited the

money in bank accounts provided by the Tolozas, from which it was

-2-
withdrawn inside Colombia.1 Transfer through the accounts was

intended to remove the "taint" of drug trafficking. See United

States v. Torres-Velazquez, 480 F.3d 100, 102 (1st Cir. 2007)

(describing the Toloza money-laundering scheme).

Romero received money laundering "contracts" directly

from "Juanito" Toloza, a member of the Toloza family. Juanito

would call Romero, ask if he was willing to transfer money from

Puerto Rico to Colombia, and then provide a phone number for the

individual who would deliver the cash. Romero would then contact

the deliverer and use code words to communicate that he was the

intended recipient of the money. For example, Romero would

identify himself on the phone as "Ricardo, on behalf of Juanito."

In other cases, code numbers were used. Romero and the deliverer

would then agree on a meeting place to transfer the money,

sometimes also using code words. Meetings were usually in public

places, such as parking lots, to ensure safety.

On August 4, 2003, undercover ICE agent Luis Ortiz,

posing as a money launderer and an associate of Romero, contacted

Cedeño through a phone number provided to Romero by Juanito

1
Although the record does not explain why the government
was willing to have the illegal proceeds in its possession
ultimately withdrawn by the Toloza family from the bank accounts
into which they were deposited, we assume that the government
determined that this step was necessary to establish the
involvement of all the defendants in this large conspiracy,
including the Tolozas themselves. See infra section II.

-3-
Toloza.2 Ortiz identified himself as calling "on behalf of

Ricardo," which was, he testified, "the code [Cedeño] [wa]s waiting

for to know that [it wa]s the correct person calling him." Cedeño

responded that he had spoken with "Ricardo," and told Ortiz that

the "documents" were ready for delivery. As Ortiz described, "[w]e

don't talk about currency like that on the phone. . . . [A]lmost

everybody that deals with this kind of business knows the documents

are currency." Ortiz told Cedeño that he had to receive the

currency before 2 p.m., because "I can't stay through the night

with that." As Ortiz later explained, the money had to be

transferred early enough to be deposited in a bank the same day, or

he would have to "watch" the currency through the night. Cedeño

and Ortiz then agreed on a location to make the transfer. After

Cedeño suggested a particular location, Ortiz told him, "the area

there, the sun is a little hot over there," using coded language to

indicate a heightened police presence. Cedeño then agreed to

transfer the money at a different location, the Home Depot parking

lot in Plaza Escorial.

Sometime later that day, Ortiz learned from Romero that

Cedeño was trying to reach him. Ortiz then called Cedeño, who told

him that he would be delayed. Ortiz responded that he was "not

going to wait there long. You know how this is."

2
ICE recorded this phone call, as well as two others
between Ortiz and Cedeño, and the recordings were played at trial.

-4-
 Meanwhile, Puerto Rico police discovered an abandoned car

in the parking lot where Cedeño and Ortiz had agreed to meet.3

When Cedeño arrived, he became unsettled by the presence of the

police. He told Ortiz, "Let's get out of here. Let's get out of

here." Ortiz responded that Cedeño should "calm down," and pointed

out that the police were occupied by the car and would not notice

the money transfer. Still, Cedeño was uncertain about proceeding.

After walking around the mall parking lot, he returned and asked

Ortiz, "Are we going to do it here, or are we going to leave out of

here [sic]?" Ortiz again tried to reassure Cedeño that they could

make the transfer. Cedeño went to his car, and began taking a bag

out of his trunk. He appeared scared. He asked Ortiz, "Can I do

it now?" Ortiz said yes, and Cedeño brought the bag to Ortiz's

car. Ortiz asked him if he had "checked this," and Cedeño said

that he had. Inside the bag was $200,094, in twenty, ten, five,

and one-dollar denominations, bound together with rubber bands and

plastic straps. Ortiz left with the currency.

Sometime later, Ortiz and Cedeño spoke again on the

phone. Ortiz told Cedeño that "everything [wa]s fine," and that he

had "already arrived." Cedeño responded, "Okay, my brother," and

said, "I am going to call that man now. My man." As Ortiz

explained at trial, deliverers typically notify their "bosses" that

3
Puerto Rico police officers who discovered the car were
not working with ICE and apparently had no knowledge of the planned
meeting.

-5-
the delivery occurred and that they are no longer responsible for

the currency. Federal agents arrested Cedeño on October 15, 2004.

B. Proceedings in the District Court

On September 27, 2004, a federal grand jury returned a

sealed indictment charging twenty-four individuals with conspiracy

to commit money laundering, conspiracy to possess with intent to

distribute narcotics, and several forfeiture charges. Cedeño was

named in Count I, conspiracy to commit money laundering, and Count

III, a forfeiture charge. The indictment charged Cedeño with

conspiring to commit two "modalities" of money laundering,

"promotional" money laundering and "concealment" money laundering.

See United States v. Iacaboni, 363 F.3d 1, 4 n.7 (1st Cir. 2004).

A person commits "promotional" money laundering if,

(1) "knowing that the property involved in a financial transaction

represents the proceeds of some form of unlawful activity," he

(2) "conducts or attempts to conduct such a financial transaction

which in fact involves the proceeds of specified unlawful

activity," (3) "with the intent to promote the carrying on of

specified unlawful activity." 18 U.S.C. § 1956(a)(1)(A)(i). In

"concealment" money laundering, only element (3) differs: the

person conducts the financial transaction "knowing that the

transaction is designed in whole or in part . . . to conceal or

disguise the nature, the location, the source, the ownership, or

-6-
the control of the proceeds of specified unlawful activity." 18

U.S.C. § 1956 (a)(1)(B)(i).

During a three-day trial involving only Cedeño in

February 2007, the government presented four witnesses, including

Romero and Ortiz, and two other government agents. At the close of

the government's case, Cedeño moved for judgment of acquittal,

which the court denied. See Fed. R. Crim. P. 29(a). The defense

presented no witnesses and then renewed its motion for judgment of

acquittal, which was again denied. On the government's motion, the

court dismissed the forfeiture count. The jury was instructed on

conspiracy to commit money laundering, and was given a willful

blindness instruction. See United States v. Rivera-Rodríguez, 318

F.3d 268, 271 (1st Cir. 2003). It returned a verdict of guilty.

On February 23, 2007, Cedeño renewed his motion for

judgment of acquittal and, in the alternative, moved for a new

trial under Federal Rule of Criminal Procedure 33. He argued,

inter alia, that the evidence presented at trial was insufficient

to prove that he both (1) knew that the money involved in the

August 4, 2003 transaction was the "proceeds of some form of

unlawful activity," and (2) either (as required for "promotional"

money laundering) intended to promote the carrying on of that

activity, or (as required for "concealment" money laundering) knew

that the transaction was designed "to conceal or disguise the

-7-
nature, the location, the source, the ownership, or the control of

the proceeds."

The district court denied Cedeño's motion. It held that

a rational jury could have concluded that both required mental

states had been established beyond a reasonable doubt. First, in

light of the fact that the defendant "delivered a large amount of

cash, a bag full of approximately $200,000 in small denominations,

at a shopping mall parking [lot]," and used code words to establish

a time and place to hand over the money, a rational jury could

conclude beyond a reasonable doubt that Cedeño knew he was handling

money derived from an illegal activity. Second, in light of the

large amount of money, the small-denomination bills, the telephone

conversations about the time and place of delivery, and Cedeño's

anxiety about police activity at the delivery, a rational jury

could conclude, beyond a reasonable doubt, that Cedeño knew the

transaction was "meant to conceal the origin and nature of the

funds he delivered, and that his actions were intended to promote

unlawful activity."

Cedeño now appeals. His sole argument on appeal is again

that the evidence was insufficient to prove that he possessed the

mental states required for a conviction of conspiracy to commit

money laundering.

-8-
 II.

To determine whether the evidence is sufficient to

sustain a conviction, we ask "whether the evidence, viewed in the

light most favorable to the prosecution, would permit a rational

jury to find each essential element of the crime charged beyond a

reasonable doubt." United States v. Frigerio-Migiano, 254 F.3d 30,

33 (1st Cir. 2001) (quotation marks and citation omitted). We

consider the evidence as a whole, as well as "reasonable

inferences" that jurors "may draw . . . from the evidence based on

shared perceptions and understandings of the habits, practices, and

inclinations of human beings." United States v. Morillo, 158 F.3d

18, 22 (1st Cir. 1998) (quotation marks and citation omitted).

Here, to obtain a conviction for conspiracy to commit

money laundering, the government had to establish the existence of

two mental states: (A) Cedeño's knowledge that the money

transferred on August 4, 2003 "represent[ed] the proceeds of some

form of unlawful activity"; and (B) Cedeño's "intent to promote"

that unlawful activity, or his knowledge that the transaction was

"designed . . . to conceal or disguise the nature, the location,

the source, the ownership, or the control of the proceeds." See 18

U.S.C. § 1956(a)(1)(A)(i), (a)(1)(B)(i); see also Frigerio-Migiano,

-9-
254 F.3d at 33 (describing the "twofold" "knowledge requirement"

for money laundering).4

In the alternative, the government could have established

Cedeño's guilt by proving that he was willfully blind to the facts

constituting the offense. Although the district court instructed

the jury on willful blindness, we do not reach Cedeño's argument

that the evidence was insufficient to establish willful blindness,

because we conclude that a rational jury could find that Cedeño

knew that the money he transferred derived from unlawful activity.

A. Proceeds of an Unlawful Activity

In arguing that the evidence presented at trial did not

establish that he knew the unlawful origin of the money transferred

in the August 4, 2003 transaction, Cedeño points out that he did

not discuss the money's origin during any of the telephone calls

with Ortiz, and that the ICE investigation did not reveal the

origin of the money. Cedeño also argues that his connection with

the money laundering scheme was attenuated; Romero testified that

he was uncertain if he had spoken with Cedeño, and that the Toloza

family was unfamiliar with him.

4
Although Cedeño was charged with conspiracy to commit money
laundering under 18 U.S.C. § 1956(h), we have previously held that
to sustain a conviction for conspiracy to commit money laundering,
the evidence must show that the defendant possessed the mental
state required for the substantive offense. See United States v.
Corchado-Peralta, 318 F.3d 255, 257, 258 n.2 (1st Cir. 2003);
Frigerio-Migiano, 254 F.3d at 33.

-10-
 A conviction for money laundering does not require that

the defendant know the precise origin of the property transferred,

but only that it came "from some form, though not necessarily which

form, of activity that constitutes a felony under State, Federal,

or foreign law." 18 U.S.C. § 1956(c)(1) (defining the phrase

"knowing that the property involved in a financial transaction

represents the proceeds of some form of unlawful activity"); accord

Corchado-Peralta, 318 F.3d at 258. Here, as Ortiz described,

Cedeño recognized and used code words to identify the intended

recipients of the money, Romero and Ortiz. In particular, he used

the expression "documents" to conceal the fact that he was

delivering currency. Cedeño agreed to avoid a drop off location

that was "hot," or too close to police activity. During the drop

off Cedeño became "excited" and "kind of scared" by the presence of

the police in the parking lot. He told Ortiz that they should "get

out of here." When Ortiz finally convinced him to transfer the

money despite the police presence, Cedeño asked Ortiz, "Can I do it

now?," further reflecting his desire to avoid police detection.

Cedeño knew that the plastic bag he transferred contained $200,000

in mixed small-denomination bills. Romero testified at trial that

only "a trusted person," an "employee[], part of the chain," would

be assigned to deliver that much money, since others would steal

it. The jury heard a phone call in which Cedeño told Ortiz that he

had spoken with "Ricardo," Romero's money-laundering alias.

-11-
 From this evidence, a rational jury could have concluded,

beyond a reasonable doubt, that Cedeño knew that the money came

from some form of unlawful activity. The jury could have reasoned

that Cedeño's use of code words and his concern about police

detection reflected an awareness that the currency he was

transferring derived from unlawful activity. This inference would

have been strengthened by the large amount of currency, the small-

denomination bills, their storage in a plastic bag, and the

transfer in a parking lot, all of which the jury could have

reasonably regarded as suggesting unlawful activity. See Frigerio-

Migiano, 254 F.3d at 33-34 (noting evidence that defendant

witnessed deliveries of "large amounts of small-denomination cash"

and issued coded receipts for these deliveries). Lastly, from

Romero's testimony that only a "trusted person" would make such a

delivery, and Cedeño's statement that he had spoken to "Ricardo,"

the jury could have reasoned that it was likely that Cedeño knew

something about the unlawful nature of the Toloza family's

activities and that the transferred money was in payment for those

activities.

B. Promotion or Concealment

The district court held correctly that the government had

to prove the mental state for either "promotional" or "concealment"

money laundering to obtain a conviction on the indictment. See

United States v. Garcia-Torres, 341 F.3d 61, 66 (1st Cir. 2003)

-12-
("[W]here an indictment charges in the conjunctive several means of

violating a statute, a conviction may be obtained on proof of only

one of the means . . . ." (quotation marks and citation omitted)).

Therefore, the conviction must be affirmed if the government

presented evidence sufficient to prove that Cedeño possessed either

the mental state required for "promotional" money laundering or the

mental state required for "concealment" money laundering. Without

suggesting that the evidence was insufficient to prove

"promotional" money laundering, we focus on the charge of

"concealment" money laundering.

In support of his claim that the evidence was

insufficient to prove that he knew that the August 4, 2003

transaction was designed to conceal the nature, location, source,

ownership, or control of the money, Cedeño points out that he did

not instruct Ortiz to deposit the money in a bank account or to

purchase real estate -- methods associated with laundering money.

Nor did he "mention anything" to Ortiz about concealing the

transferred funds. Lastly, ICE encountered Cedeño only once during

the course of its investigation into the Tolozas, and, as discussed

above, Cedeño was not known to the Toloza family.

We disagree with this assessment of the evidence. The

jury's conclusion that Cedeño knew the transaction was

"designed . . . to conceal or disguise the nature, the location,

the source, the ownership, or the control" of the money is well

-13-
supported by the evidence. Our conclusion is guided by the Supreme

Court's recent interpretation of the same language in Cuellar v.

United States, 128 S. Ct. 1994 (2008), where the Court dealt with

the transportation provision of the money laundering statute.

Under the "transportation" provision, it is unlawful to transport

money outside the United States "knowing that [the money] involved

in the transportation . . . represent[s] the proceeds of some form

of unlawful activity" and that "such transportation . . . is

designed . . . to conceal or disguise the nature, the location, the

source, the ownership, or the control" of the money. 18 U.S.C. §

1956(a)(2)(B)(i) (emphasis added). In the context of the money

laundering statute, the Court said, "'design' means purpose or

plan; i.e., the intended aim of the transportation." Cuellar, 128

S. Ct. at 2003. Thus, to obtain a conviction, the evidence had to

show that the purpose of the transportation was to conceal the

funds, not simply that the funds had been concealed during

transportation.5 Id. at 2005-06.

Because the Court's reasoning turns on the plain meaning

of the statutory text, and because the text of the design element

5
The Court in Cuellar found the evidence insufficient to
convict the defendant of "transportation" money laundering because,
although the evidence showed that the defendant engaged in
secretive conduct to facilitate his transportation of money to
Mexico, the evidence did not show that "secrecy was the purpose of
the transportation." 128 S. Ct. at 2005. In short, "the
Government failed to introduce any evidence that the reason drug
smugglers move money to Mexico is to conceal or disguise a listed
attribute of the funds." Id.

-14-
of the transportation provision is identical to the text of the

design element of the transactional provision of the money

laundering statute at issue here, we apply that reasoning to the

facts of this case. Thus, to obtain a conviction for "concealment"

money laundering, the evidence must show that the purpose of the

financial transaction is to conceal the nature, location, source,

ownership, or control of the transacted proceeds.

The Court wrote in Cuellar that "where the consequences

of an action are commonly known, a trier of fact will often infer

that the person taking the action knew what the consequences would

be and acted with the purpose of bringing them about." Id. at 2005

n.8; see also 1 Wayne R. LaFave, Substantive Criminal Law § 5.2,

5.2(a) (2d ed. 2008) (describing this inference). Here, instead of

transportation, the underlying criminal conduct is a financial

transaction involving the proceeds of an unlawful activity. See 18

U.S.C. § 1956(a)(1). A rational jury could have concluded that

Cedeño, in agreeing to carry out a financial transaction with

Ortiz, engaged in conduct that was commonly known to conceal the

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

For example, Cedeño employed code words to identify

callers and to establish a meeting location free of police

presence. He packaged the money in a bag, kept the bag in his

trunk, and delivered it in a mall parking lot, which had the effect

of hiding the money and rendering the transaction relatively

-15-
inconspicious. A rational jury could have reasoned that, since it

is commonly known that engaging in such conduct would have the

effect of concealing the location, source, ownership or control of

the money being transferred, it was Cedeño's purpose in so acting

to conceal those traits of the proceeds. See also Corchado-

Peralta, 318 F.3d at 259 (holding the evidence was insufficient

where "nothing about [the defendant's conduct] points toward

concealment or disguise").

This conclusion is supported by other evidence as well,

including some of the same evidence that showed Cedeño's knowledge

of the unlawful source of the funds. First, during the transaction

with Ortiz, Cedeño repeatedly expressed concern that the money be

handed over without alerting the police. He was reluctant to take

the bag out of his car, and would not do so until Ortiz told him it

was safe. Second, Ortiz testified that he told Cedeño he needed to

receive the money before 2 p.m., because he did not want to "stay

through the night" with it.6 The jury could have concluded that

Cedeño knew that Ortiz was going to deposit the money in a bank.

In light of this, the jury could have further concluded that Cedeño

understood that the highly secretive transfer in the parking lot

was designed to conceal from the authorities the origin of the

money Ortiz was to deposit; otherwise, there would have been no

6
The parties did not discuss this testimony in their
briefs.

-16-
reason not to wire, or publicly deliver, the money to Ortiz. In

short, there was ample evidence to support the jury's verdict that

Cedeño knew the financial transaction with Ortiz 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." 18 U.S.C. § 1956(a)(1)(B)(i).

Affirmed.

-17-