The opinion of the court was delivered by: ROBRENO
Angela Nolan-Cooper stands before the Court for sentencing having pled guilty to: 1) one count of conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h) and 18 U.S.C. § 1956(a)(3)(B) (Count 3); 2) ten counts of money laundering to conceal or disguise the source or ownership of property represented to be proceeds of specified unlawful activity and aiding and abetting, in violation of 18 U.S.C. § 1956(a)(3)(B) and 18 U.S.C. § 2 (Counts 11, 13 to 18, 20, 27 and 28); 3) one count of conspiracy to structure or assist in structuring any transaction with one or more domestic financial institutions, in violation of 18 U.S.C. § 371 and 31 U.S.C. § 5324(a)(3) (Count 29); and 4) one count of criminal forfeiture pursuant to 18 U.S.C. § 982(a)(1) (Count 32).
Pursuant to a plea agreement, the government has moved to dismiss counts one, two, four, five, six, seven, eight, nine, ten, twenty-two and thirty-one of the superseding indictment. These counts include drug charges, as well as other charges of structuring, money laundering and criminal forfeiture.
Also in the plea agreement, the government and the defendant stipulated to a guideline range of 41 to 51 months of incarceration (this range is based on an offense level of 22). In the presentence investigation ("PSI") report, the probation officer calculates the offense level to be 26 which, based upon Ms. Nolan-Cooper's criminal history level of I, would subject the defendant to a sentence of 63 to 78 months.
The defendant has raised objections to the PSI report's recommendation for upward adjustments based on the defendant's use of her special skill as a lawyer and obstruction of justice. She also objects to the failure of the PSI report to recommend an additional one level downward adjustment for acceptance of responsibility.
Additionally, the defendant moves for a downward departure on the grounds of outrageous government conduct and sentencing factor manipulation. For the reasons discussed below, the defendant's objections are overruled and her motion for downward departure is denied.
II. FACTUAL BACKGROUND
The Internal Revenue Service ("IRS") received information from a confidential informant that Ms. Nolan-Cooper, a Philadelphia lawyer, was assisting others to launder funds received through the sale of drugs and other illegal activities. The IRS arranged for Ms. Nolan-Cooper to be introduced to IRS Special Agent Louis Oubre. Agent Oubre, acting in an undercover capacity, posed as "Louis A. Richard," a drug dealer from the New Orleans area, who had significant drug proceeds that he wished to make look legitimate. The introduction of Ms. Nolan-Cooper to Agent Oubre in his undercover capacity took place at a hotel near the Philadelphia Airport on February 7, 1994. This meeting was arranged and attended by one Oswald McBride, an acquaintance of Ms. Nolan-Cooper, who unbeknownst to Ms. Nolan-Cooper had turned Government informant.
Ms. Nolan-Cooper attended the meeting with the understanding that "Mr. Richard" (hereafter referred to as Agent Oubre in his undercover capacity), had some business dealings to discuss with her. She quickly learned that the business Agent Oubre wanted to discuss was how to make illegitimate money look legitimate. Tr. of Feb. 7, 1994 Meeting at 1-2. During that first meeting, Ms. Nolan-Cooper also learned that Agent Oubre was a drug dealer and that the money he was seeking to launder was the proceeds from illegal drug sales. Id. at 29, 32.
At the outset, Ms. Nolan-Cooper suggested that she could help Agent Oubre make his money look legitimate in two ways: 1) by setting up a sham business for him; and 2) by hiding his money in accounts in the Bahamas. Id. at 1-2.
She explained to the agent why he should, and how he could hide his money in the Bahamas, what procedures he would use, what precautions he would have to take, and how he could get his money back from the Bahamas. Id. at 2-9.
She then discussed the advantages of forming a corporation and running his money through a business to make it look legitimate by showing a source of income and filing tax returns. Id. at 9-12. After she told the agent about these options, Agent Oubre asked Ms. Nolan-Cooper, "So you could help me do all of these things?" Her answer was, "Um hmm." Id. at 12.
She further assured the agent that she was ready, willing and able to help him legitimize his purported ill-gotten gains, "trust me, I have plenty of clients . . . and it's the same situation you have. . . . And there's nothing on 'em for years." Id. at 13-14. At the end of the first meeting, she again assured Agent Oubre, "the way I do it, I'm . . . not gonna make any mistakes." Id. at 37. When the agent asked her, "Well, how soon . . . can we start," Ms. Nolan-Cooper replied, "Right away." Id. at 29.
Ms. Nolan-Cooper also suggested that, rather than start his own business, Agent Oubre could "invest in a business already established here" which, she said, is run by "someone who's in a very similar situation with you" who "has a recording studio . . . in Jersey." Id. at 19-20. While the business itself may not be profitable, "even in losing the money . . . it's helped [the person doing the money laundering] to legitimize everything else." Id. at 20. She also acknowledged that she helps this person hide his money in the Bahamas. "He's another person that I'm back and forth. I do the same thing with him." Id. The evidence bears out that the person to whom Ms. Nolan-Cooper was referring was codefendant Ester Carter, who also stands convicted of money laundering in connection with this case.
Ms. Nolan-Cooper touted the advantages of the music business because "you create your own records. . . . you can . . . show on paper . . . that you generated . . . eight hundred and fifty thousand dollars in five months. . . . In studio time. And nobody's ever been in the studio. . . . they can't ever check that. . . . So this is income. This is legitimate income." Id. at 21. She explains that this is possible because the agent could "make up" a rap group and say they spent several thousand dollars at the studio and there would be "no way that the IRS can trace those people." Id. at 22. As the first meeting was concluding, Ms. Nolan-Cooper offered to take the agent to look at the studio the following day. Id. at 36.
Agent Oubre and Ms. Nolan-Cooper met for a third time on March 11, 1994. At that meeting they agreed to set up a corporation entitled "LAR Productions, Inc." as a purported music production, promotion and recording company. Tr. of Mar. 11, 1994 Meeting at 2-4, 26-27. Agent Oubre gave Ms. Nolan-Cooper twelve thousand dollars to open the corporate bank account. Id. at 41. She then introduced Agent Oubre to Mr. Carter by phone so that Agent Oubre could rent office space for LAR Productions at Mr. Carter's music studio. Id. at 43-45. She told Agent Oubre that he should furnish the office with a phone, fax, computer, desk and pictures, and that she could help him do that. Id. at 29. She told him that he could prepare vouchers with names of fictitious aspiring recording artists to make it appear as though the money going into the business account was coming from legitimate musical production work, which would be untraceable. Id. at 31. She explained to Agent Oubre that he would have to pay taxes on the money he ran through the production company and that she "would set [him] up with an accountant." Id. at 38. At this meeting, Agent Oubre also paid Ms. Nolan-Cooper $ 5,000 as a retainer. Id. at 21. Subsequent to the meeting, Ms. Nolan-Cooper incorporated "LAR Productions, Inc.," opened a bank account and provided Agent Oubre with a corporate seal.
On May 10, 1994, Ms. Nolan-Cooper took Agent Oubre to Mr. Carter's recording studio in New Jersey. Agent Oubre expressly told Mr. Carter that his money came from drugs and that Ms. Nolan-Cooper was helping him make it look legitimate. Tr. of May 10, 1994 Meeting at 147. On September 29, 1994, Agent Oubre paid Mr. Carter $ 6,615 for six months rent and one month security deposit for an office at the recording studio. On December 19, 1994, a lease, backdated to July 1, 1994, was drafted by Ms. Nolan-Cooper. Mr. Carter and Agent Oubre both signed the backdated lease. On February 1, 1995, Agent Oubre paid Mr. Carter $ 955 for the January rent. The space rented by Agent Oubre remained unoccupied throughout the conspiracy.
Agent Oubre also gave Ms. Nolan-Cooper $ 42,000 in cash to launder through the LAR Productions account on May 10. She told him she could not do it all at once but would do it slowly. She subsequently made several deposits from her attorney escrow account into the account of LAR Productions ($ 5,000 on May 11, 1994, $ 5,000 on August 10, 1994, $ 22,500 on September 29, 1994, and $ 8,000 on December 20, 1994).
Also on May 10, 1994, Ms. Nolan-Cooper told Agent Oubre that she could get him an American Express credit card through her law firm, falsely listing him as an investigator employed by her firm. As promised, she sent Agent Oubre the American Express card on June 13, 1994. Agent Oubre used the card on numerous occasions and reimbursed Ms. Nolan-Cooper for the charges.
Although the actual transaction took place much later, May 10 was also the day that Ms. Nolan-Cooper told Agent Oubre that he could obtain a car from one of her clients, Benjamin Goff. Agent Oubre later spoke to Mr. Goff directly on several occasions, telling Mr. Goff that his money came from drugs and that he wanted the car titled in someone else's name, and giving him the specifications for the car including hidden compartments to transport drugs. On February 7, 1995, Ms. Nolan-Cooper arranged to have Agent Oubre deliver $ 34,000 to her for the purchase of the car from Mr. Goff. On February 15, 1995 Ms. Nolan-Cooper gave Mr. Goff a check from her attorney escrow account to pay for the car. Mr. Goff deposited the check into his own account. He then paid $ 28,128 for the car on February 17, 1995 using a treasurer's check and a cashier's check. The car was titled under the fictitious name "Darryl Young," and delivered to Agent Oubre. Mr. Goff and Ms. Nolan-Cooper divided the difference between the $ 34,000 Agent Oubre had paid for the car and the purchase price of $ 28,128.
On December 19, 1994, Agent Oubre gave Ms. Nolan-Cooper $ 85,000 to transfer into an account in the Cayman Islands. He told her he needed to get the money there to consummate a drug deal. Agent Oubre paid Ms. Nolan-Cooper $ 8,490 to perform the wire transfer. She enlisted codefendants Darnell Greene, Stephen Henderson and Warren Mikell to assist her in structuring this transaction to avoid detection.
She and the three others each deposited $ 21,250 (one fourth of Agent Oubre's $ 85,000) in accounts under their own names. On December 29, 1994 each wired $ 21,250 from their accounts to an account in the Cayman Islands.
On December 19, 1994, Ms. Nolan-Cooper brought Carl Ellis, an accountant and a former client of Ms. Nolan-Cooper, into the conspiracy. At the first meeting between Mr. Ellis and Agent Oubre, and in the presence of Ms. Nolan-Cooper, Agent Oubre told Mr. Ellis that he had a large amount of cash that came from drugs. Ms. Nolan-Cooper told Mr. Ellis that $ 50,000 dollars of drug proceeds had been deposited into LAR Production's bank account. Mr. Ellis agreed to prepare both a business plan and a corporate tax return which would falsely indicate that the money had come from a loan. That day, Agent Oubre gave Mr. Ellis a $ 500 retainer fee. Mr. Ellis met with Agent Oubre and Ms. NolanCooper again on February 1, 1995. He advised them of various ways to disguise the source of the cash deposited into LAR Production's account and discussed filing false tax returns and financial statements for the corporation. He received an additional $ 400 retainer at this time.
The total amount involved in the money laundering scheme to which Ms. Nolan-Cooper has pled guilty is $ 192,772. The evidence is overwhelming that Ms. Nolan-Cooper's criminal conduct in this case was pervasive and entirely voluntary. From the first meeting with Agent Oubre, Ms. Nolan-Cooper planned the scheme to launder the proceeds of drug activities, recruited coconspirators, counselled Agent Oubre as to how to execute the scheme, and then personally undertook to effectuate the objectives of the conspiracy.
Since the time of her arraignment in October 1995, and through oral arguments on the pretrial hearing in October 1996, Ms. Nolan-Cooper has contended that this prosecution should be dismissed because of three alleged sexual encounters between her and Agent Oubre. Ms. Nolan-Cooper asserts that the conduct of Agent Oubre in this case constitutes outrageous government conduct. After a six day hearing and oral argument, the Court found that the first two sexual encounters alleged had not occurred but that the third sexual encounter, near the end of the investigation and after Ms. Nolan-Cooper had committed her criminal conduct, had occurred. The Court concluded, however, that Agent Oubre's conduct under the circumstances of this case did not rise to the level of outrageousness constituting a due process violation.
See infra section III.B.1 (discussing the defendant's motion for downward departure based on the claim of alleged outrageous government conduct).
III. SENTENCING ISSUES
A. Guideline Calculations
1. Offense Level Calculations
According to the PSI report, the base offense level for a violation of 18 U.S.C. § 1956(h) is 20. U.S.S.G. § 2S1.1. All the offenses are grouped under the highest offense level, pursuant to U.S.S.G. § 3D1.2(d), because the offense level for all Ms. Nolan-Cooper's offenses is determined largely by the amount of harm or loss.
Under specific offense characteristics, three levels are added because the defendant knew or believed the funds to be the proceeds of drug sales. U.S.S.G. § 2S1.1(b)(1). The defendant raises no objection to these calculations.
In accordance with U.S.S.G. § 2S1.1(b)(2), the probation officer increased the offense level by one because the amount of money laundered was over 100,000 (in the plea agreement the government and the defendant stipulated that the range of money laundered was between $ 100,000 and $ 200,000). The defendant does not specifically object to this additional level but requested that the probation officer report: 1) the amount Ms. Nolan-Cooper actually received for the services she performed for the agent; 2) that the agent set the amount he paid her; 3) that the government set the amount stipulated to; and 4) that the agent told Ms. Nolan-Cooper that he wanted his money laundered so that he could retire from the drug business. PSI Objection 2. Furthermore, as discussed below, Ms. Nolan-Cooper is seeking a downward departure ...