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United States of America v. Mark Miller

June 21, 2012

UNITED STATES OF AMERICA
v.
MARK MILLER



The opinion of the court was delivered by: Padova, J.

MEMORANDUM

On March 14, 2012, Defendant Mark Miller was convicted by a jury of one count of conspiracy to distribute five kilograms or more of cocaine and 50 grams or more of cocaine base ("crack"), in violation of 21 U.S.C. § 846 (Count Five), and seven counts of laundering of monetary instruments in violation of 18 U.S.C. §§ 1956(a)(1)(A)(i) and 1956(a)(1)(B)(i) (Counts Twenty-One through Twenty-Seven). Miller has moved for judgment of acquittal pursuant to Federal Rule of Criminal Procedure 29 as to the money laundering counts. The Motion is denied for the following reasons.

I. LEGAL STANDARD

Federal Rule of Criminal Procedure 29 provides that "the court on the defendant's motion must enter a judgment of acquittal of any offense for which the evidence is insufficient to sustain a conviction." Fed. R. Crim. P. 29(a). In deciding a Rule 29 motion, we "'review the record in the light more favorable to the prosecution to determine whether any rational trier of fact could have found proof of guilt beyond a reasonable doubt based on the available evidence.'" United States v. Bobb, 471 F.3d 491, 494 (3d Cir. 2006) (quoting United States v. Smith, 294 F.3d 473, 476 (3d Cir. 2002)). "'[W]e must sustain the verdict if a rational trier of fact could have found [the] defendant guilty beyond a reasonable doubt, and the verdict is supported by substantial evidence.'" United States v. Davis, 458 F. App'x 152, 156 (3d Cir. 2012) (alterations in original) (quoting United States v. McKee, 506 F.3d 225, 232 (3d Cir. 2007)). In making our determination, we "draw all reasonable inferences in favor of the jury's verdict and will find that the evidence was insufficient only where the prosecution's failure of proof is clear." Id. (citing Smith, 294 F.3d at 476--77). Moreover, "we 'must be ever vigilant . . . not to usurp the role of the jury by weighing credibility and assigning weight to the evidence, or by substituting [our] judgment for that of the jury.'" Id. (alterations in original) (quoting United States v. Brodie, 403 F.3d 123, 133 (3d Cir. 2005)).

II. DISCUSSION

Second Superseding Indictment No. 663 charged Miller with money laundering in connection with the transfer of the property he owned at 2410 Vista Street, Philadelphia, Pennsylvania, in March 2007 (Counts 21 and 22) and in connection with a mortgage he obtained on the property he owned at 4829 Mulberry Street, Philadelphia, Pennsylvania, in March 2006 (Counts 23-27). The money laundering statute, 18 U.S.C. § 1956, provides that a person is guilty of money laundering if he

(1) knowing that the property involved in a financial transaction represents the proceeds of some form of unlawful activity, (2) conducts or attempts to conduct such a financial transaction involving the proceeds of unlawful activity, (3) with either (a) the intent to promote the carrying on of specified unlawful activity; 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 . . . United States v. Bansal, 663 F.3d 634, 645 (3d Cir. 2011) (citing 18 U.S.C. § 1956(a)(1)). Congress's use of the term "represents" means that the property used does not have to be directly derived from the specified unlawful activity. Rather, "the crime of money laundering by its very nature involves the change of criminal [proceeds] into other forms of currency or property." United States v. Carr, 25 F.3d 1194, 1205 (3d Cir. 1994). Consequently, if United States currency that is directly derived from drug trafficking is exchanged for fresh United States currency, the fresh currency "represent[s] the illegal drug money." Id. "The proceeds of unlawful activity may remain illegal proceeds even if they change form through a chain of transactions." United States v. Gotti, 457 F.Supp.2d 411, 422 (S.D.N.Y. 2006). Therefore, if money derived from drug trafficking is used to purchase real property, and that real property is used as collateral for a loan, the loan represents the proceeds of drug trafficking activity and using the loan to purchase additional property is a money laundering offense. See, e.g. United States v. Real Property Identified as Parcel 03179-005R, 311 F. Supp. 2d 126, 130 (D.D.C. 2004) ("[Dr. Howard's] St. Joe, Florida property had been obtained purely with illegally obtained funds. Thus, when Dr. Howard used the Florida property to obtain the funds secured by the second mortgage, he knew he was using property that had been purchased with proceeds of specified unlawful activity to acquire the funds. And, when he then used the funds he received from the second mortgage to obtain the release of the lien on the aircraft, he engaged in money laundering activity that involved the aircraft. This amounted to a violation of 18 U.S.C. § 1956.").

Miller asks that we enter a judgment of acquittal on his behalf on the money laundering counts because the Government failed to prove (1) that the financial transactions charged in those counts involved the proceeds of specified unlawful activity and (2) that he engaged in the financial transactions to conceal the nature and source of those proceeds.

A. Proceeds

Miller does not challenge the sufficiency of the Government's evidence that he purchased the 2410 Vista Street property in 1997 and the 4829 Mulberry Street property in 2004, using funds derived from drug trafficking activity. Indeed, he concedes that "[t]he Government's proof strongly suggests that the Defendant used drug proceeds to acquire" both properties. (Def.'s Mem. at 5.) Miller also does not dispute "that drug trafficking is a 'specified unlawful activity.' It clearly is." United States v. Richardson, 658 F.3d 333, 338 (3d Cir. 2011) (citing 18 U.S.C. § 1956(c)(7)(A)). He argues, instead, that a recent decision of the Supreme Court defined the term "proceeds" in the money laundering statute to mean "profits," and that the Government's evidence at trial was insufficient to sustain his conviction because the Government did not prove that the property involved in the charged financial transactions represented the profits from drug trafficking.

Miller relies on United States v. Santos, 553 U.S. 507 (2008), to support this argument. In Santos, a four-justice plurality determined that the term "proceeds" in the money laundering statute means profits, as opposed to gross receipts. Richardson, 658 F.3d at 338 (citing Santos, 553 U.S. at 514-15). Santos involved the use of the gross receipts of an illegal lottery, and the plurality's determination is not applied when the predicate offense involves drug trafficking. Instead, we look to Justice Stevens' concurring opinion and Justice Alito's dissent. Justice Stevens concurred in the judgment, but disagreed with the plurality's determination "that 'proceeds' should always be construed to mean profits." Id. at 339 (citing Santos, 553 U.S. at 525 (Stevens, J., concurring in judgment)). Justice Stevens analyzed the legislative history of the money laundering statute and concluded that Congress intended "proceeds" to mean gross receipts in some circumstances. He explained that "'the legislative history of [the money-laundering statute] makes it clear that Congress intended the term proceeds to include gross revenues from the sale of contraband and the operation of organized crime syndicates involving such sales.'" Id. (alteration in original) (quoting Santos, 553 U.S. at 525--26 & n.3). Justice Alito, writing for the four dissenting justices, agreed with Justice Stevens that "a receipts definition [is] appropriate in cases arising from 'the sale of contraband and the operation of organized crime syndicates involving such sales.'" Id. (quoting Santos, 553 U.S. at 531--32 (Alito, J., dissenting)). The United States Court of Appeals for the Third Circuit has consequently determined, in accordance with the "persuasive authority" of "the collective view of five justices" in Santos, that the term "proceeds" as it is used in the money laundering statute, "means gross receipts" when the specified unlawful activity is drug trafficking. Id. at 340; see also Lugo v. Zickefoose, 427 F. App'x 89, 92 (3d Cir. 2011) (stating that, for the purposes of the money laundering statute, the "term 'proceeds' includes gross revenues for drug sales.").

The Government therefore was not required to prove that Miller used the profits of drug trafficking to purchase the subject properties. Miller's argument that the evidence the Government presented at trial was insufficient to support his convictions for money laundering (Counts 21-27) because the Government did not present evidence that the funds used he to purchase the 2410 Vista Street and 4829 Mulberry Street properties were the profits, rather than the gross receipts, of drug trafficking, thus fails as a matter of law. Miller's Rule 29 Motion is, therefore, denied as to this argument.

B. Intentional Concealment

Miller also argues that the Government did not satisfy its burden of proof with respect to his money laundering convictions because the Government did not prove that the financial transactions charged in Counts 21-27 of Second Superseding Indictment No. 10-663 were designed to conceal the nature and source of the proceeds of the specified unlawful activity in accordance with Cuellar v. United States, 553 U.S. 550 (2008). In Cuellar, the Supreme Court made it clear that for purposes of the money laundering statute, "'design means purpose or plan, i.e., the intended aim of the' transactions." Richardson, 658 F.3d at 340 (quoting Cuellar, 553 U.S. at 563). Miller argues that the Government did not present sufficient evidence at trial to prove that he purposefully concealed the nature and source ...


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