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U.S. v. Navarro

May 20, 1998

UNITED STATES OF AMERICA, APPELLEE
v.
LUIS RICARDO NAVARRO, A.K.A "LUCHO", AND PORFIRIO NUNEZ-VASQUEZ, APPELLANTS



Before: Becker, Stapleton, Circuit Judges and Feikens, District Judge*

The opinion of the court was delivered by: Feikens, District Judge.

On Appeal From the United States District Court For the District of New Jersey (D.C. Cr. No. 93-588)

Argued: January 21, 1998

*Honorable John Feikens, United States District Judge for the Eastern District of Michigan, sitting by designation.

OPINION OF THE COURT

I. Introduction

In this appeal, the central issue is whether §1956(a)(1) of Title 18 ("Laundering of monetary instruments") sets forth three separate offenses, each of which could be a basis for criminal conviction, or three alternative mental states, any of which being posssessed by a defendant would violate the statute.

II. Background

Luis Ricardo Navarro ("Navarro") and Porfirio Nunez-Vasquez ("Nunez") were charged by indictment *fn1 with, inter alia, one count of conspiracy in violation of 18 U.S.C. §1956(g) (Section 1956(g) has since been renumbered as §1956(h)). The object of the charged conspiracy was money laundering in violation of 18 U.S.C. §1956(a)(1). Count 1 of the indictment charged defendants with knowing that the property involved in the financial transaction represented the proceeds of some form of unlawful activity, and (A) with the intent to promote the carrying on of the specified unlawful activity, that is, the distribution of narcotics, and (B) knowing that the transaction was designed in whole or in part to conceal or disguise the nature, location, source, ownership, and control of property believed to be the proceeds of specified unlawful activity, and (C) knowing that the transaction was designed in whole or in part to avoid a transaction reporting requirement under State or Federal law, did conspire and agree with one another to conduct and attempt to conduct a financial transaction which in fact involved the proceeds of specified unlawful activity, specifically the transfer, delivery, and other Disposition of United States currency in excess of $12,000,000 that was the proceeds of the distribution of narcotics, contary to Title 18, United States Code, section 1956(a)(1).

Count 3 of the indictment charged that defendant Nunez, and others, did

knowingly, willfully, and with the intent (A) to promote the carrying on of specified unlawful activity, that is, the distribution of narcotics, (B) to conceal or disguise the nature, location, source, ownership, and control of property believed to be the proceeds of specified unlawful activity, and (C) to avoid a transaction reporting requirement under State or Federal law, conspire and agree with one another to conduct and attempt to conduct a financial transaction, specifically the transfer, delivery, and other dispostion of United States currency represented by a law enforcement officer and by another person at the direction of and with the approval of a Federal official authorized to investigate and prosecute violations of Title 18, United States Code, Section 1956, to be the proceeds of specified unlawful activity, that is, the distribution of narcotics, contrary to Title 18, United States Code, Section 1956(a)(3).

In violation of Title 18, United States Code, Section 1956(g).

In 1992, the government began an investigation into a money-transmitting business known as "Latino Envios," located in Union City, New Jersey. It also operated under the name "Lacino Travel." Latino Envios apparently had a relationship with "Richard," L.N.U., a money launderer connected to the Colombian Cali drug cartel. Latino Envios was managed by Robert Foti, who had a relationship with Richard, and, at Richard's direction, he established a branch office in San Juan, Puerto Rico. At that location, Foti and his wife Rosario hired defendant Nunez to run the Puerto Rico office at a salary of $700 a week. Defendant Navarro is alleged to be the brother of Richard and acted as one of his representatives in dealing with the Foti organization. On several occasions, Navarro delivered money to Foti and Nunez in Puerto Rico and New York. These cash deliveries were large, $500,000 or more. The deliveries were typically made during early morning hours or at night. The money would be taken by couriers in cars and the deliveries were made in garages, motel rooms, or fast-food parking lots. Nunez admitted to U.S. Customs Agent Jose Pena that he concluded that the money he processed was derived from drugs.

After being counted by Nunez, Foti, or both, the money was then deposited in various banks, including Eurobank or Banco Bilbao, as well as other banks in the United States. Thereafter, the money was converted into checks, made out to a predetermined payee, or wire transferred to other banks, in accordance with instructions from Navarro or Richard. Between July 6, 1993 and December 10, 1993, fourteen monetary transactions, totaling $5,256,004, took place in Puerto Rico.

At trial, government investigator George Serrano testified that a confidential informant told Nunez that he would be dealing with narcotics proceeds. Moreover, Foti had told Nunez that all involved had to be careful. In the Puerto Rico office, Nunez had arranged for blankets to be hung on the walls so that conversations about the funds involved could not be heard by those in adjoining offices.

At trial, telephone conversations were introduced in which there were constant references to code words and slang, which Foti described as repeated efforts to conceal that the talk was about narcotics proceeds. He gave a detailed description of the money laundering scheme in which co-conspirators would write checks against accounts into which they had deposited cash drug proceeds and direct those checks to payees whose indentities did not matter as long as the payee was one of a group of payees selected by drug dealers. He testified that Navarro told him that Navarro was moving money for a family business, and that Navarro's father's position was that if people in the United States wanted to use drugs, the Navarro family was not responsible for their actions.

The indictment was handed down in December 1993. Foti pleaded guilty in May 1994. Nunez and Navarro went to trial in November 1994. Nunez was convicted of conspiracy to commit money laundering of drug proceeds in violation of Title 18, U.S.C., §1956(g) (now (h)), Count 1, and conspiracy to commit money laundering with funds represented by a law enforcement officer to be proceeds of narcotics distribution in violation of Title 18, U.S.C., §1956(g) (now (h)), Count 3.

Navarro was also found guilty on Count 1 of the indictment, Title 18, U.S.C., §1956(g) (now (h)).

III. Statement of the Issues Presented by this Appeal:

(1) whether the government's opening and closing statements, which focused on one of three possible intended objectives of the money laundering conspiracy, constructively amended the indictment;

(2) whether the district court correctly charged the jury on unanimity; and

(3) whether there was sufficient evidence viewed in the light most favorable to the government to support Nunez's conviction for conspiring to launder drug proceeds.

IV. Analysis

Title 18, U.S.C., §1956, entitled "Laundering of monetary instruments," states:

(a)(1) Whoever, knowing that the property involved in a financial transaction represents the proceeds of some form of unlawful activity, conducts or attempts to conduct such a financial transaction which in fact involves the proceeds of specified unlawful activity --

(A)(i) with the intent to promote the carrying on of specified unlawful activity, or

(ii) with intent to engage in conduct constituting a violation of section 7201 or 7206 of the Internal Revenue Code of 1986; or

(B) knowing that the transaction is designed in whole or in part --

(i) to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity; or

(ii) to avoid a transaction reporting requirement under State or Federal law, shall be sentenced to afine of not more than $500,000 or twice the value of the property involved in the transaction, whichever is greater, ...


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