### I N THE UNI TED STATES COURT OF APPEALS FOR THE FI F TH CI RCUI T

No. 11-41256

UNITED STATES OF AMERICA, Plaintiff - Appellee
v. RICHARD ALAN ARLEDGE; STEVE HAM, Defendants - Appellants

Appeals from the United States District Court for the Eastern District of Texas USDC No. 4:09-CR-89-1

Before REAVLEY, JOLLY, and SMITH, Circuit Judges. PER CURIAM: * This c ase arises from the defend a n t s ’ sale of luxury cars to numerous criminals, such as drug dealers and pimps. Defendant R ichard Arledge owned

a Suzuki dealership and managed a financing office, and D efendant S teve Ham

was h is right-hand man. The defendants, knowing the purchasers of the luxury

cars were c riminals, would a ccept large cash payments f rom customers, allowed these customers to list innocuous employment position s ( s u c h as “barber”) on their loan applications , p e r m itted the customers to sign “lease” agreements U n i t e d S t a te s C o u rt o f A p p e al s

F i f t h C i rc u i t 

### F I L E D April 18, 2013 Ly l e W . Cay ce Clerk

* Purs uant to 5 T H C I R

. R. 47. 5, the court has determ ined that this op inion s hould not be p ublis hed and is not p reced ent excep t und er the lim ited circum s tances s et forth in 5 T H C I R

. R. 47. 5. 4. Case: 11-41256 Document: 00512213548 Page: 1 Date Filed: 04/18/2013No. 11-41256

despite that they w ere actually purchasing t he cars, and often f a i l e d to report the c a sh payments they r eceived t o the IRS, even when these payments surpassed the $10,000 t h reshold, or reported t hem u sing straw buyers’ names. The government charged the defendants and four t een others with conspiracy to commit money laundering, 18 U.S.C. § 1956(h). The government additionally charged Arledge with laundering the proceeds of illegal activity, 18 U.S.C. § 1956(a)(3)(B), and Ham with la u ndering the p roceeds of drug trafficking, 18 U.S.C. § 1956(a)(1)(B)(i). Arledge was convicted of conspiracy to commit money laundering, while Ham was convicted of both conspiracy to commit and substantive money laundering. The defendants raise several issues

on ap p eal. We AFFIRM their convictions, finding they fail t o identify any reversible error. I. First, both d efendants contend th e g o v ernment presented insufficient evidence to c onvict t h e m of c onspiracy to c ommit money laundering because there was no evidence t hat the financial t r ansactions at issue were designed (1) “to conceal or d isguise the nature, the location, the source, the ownership, or the control of the p roceeds,” 18 U.S.C. § 1956(a)(1)(B)(i), or (2) “to avoid a t ransaction reporting requirement u nder State or Federal law,” 18 U.S.C. § 1956(a)(1)(B)(ii). This argument is inapposite. This Court h as “consistently held that a conspiracy charge need not include the elements o f the substantive offense the defendant
may have conspired to c ommit.” United States v
. Threadgill , 172 F.3d 357, 367 (5th Cir. 1999) (citing United States v. Fuller , 974 F.2d 1 474, 1479-80 (5th Cir. 1992), cert. denied , 510 U.S. 835 (1993); United States v. Graves , 669 F.2d 964, 968 (5th Cir. 1982)); see also United States v. Dong , 420 F

. App’x 309, 3 19 (5th Cir. 2011) (unpublished) (finding “the g overnment did not h ave t o prove concealment t o sustain [the defendant’s] cons p i r a c y c o nvi c t i o n u n d e r § 1 956(h)”).

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Accordingly, defendants’ arguments regarding con s p i r acy do not identify cognizable deficiencies in the government’s case. I I. Next, Ham argues the e vidence was insufficient to sustain his conviction for money laundering under 1 8 U.S.C. § 1956(a)(1)(B)(i). We review claims for insufficient evidence de novo when the d efendant properly moves for a Rule 29 judgment of a cquittal before t he district court. United States v. Harris , 666 F.3d 905, 907 (5th Cir. 2012) (citing United States v. Penaloza-Duarte , 473 F.3d 575, 579 (5th Cir. 2006)). “All evidence is reviewed in t he l ight most f avorable to the verdict to determine whether a rational trier of fact could have f ound that the evidence established [the defend a nt’s] guilt beyond a reasonable doubt.” I d. This review is “highly deferential to the verdict.” United States v. Elashyi , 554 F.3d 480, 492 (5th Cir. 2008) (internal quotations and citations omitted). Money laundering concealment requires the defendant t o know “that the transaction is designed in whole or in part

. . . to conceal or disguise the nature, the location, the s ource, the ownership, or t he control of the proceeds of s pecified unlawful activity[.]” 18 U.S.C. § 1956(a)(1)(B)(i). “ Several circuits, including this one, have r ecognized that the government need not ‘prove with regard to
any single transaction that the defendant removed all trace o f his involvement with the money or that the particular transaction ch a r g e d i s itself highly unusual.’” United States v. Tencer , 107 F .3d 1120, 1129 (5th Cir. 1997) (quoting United States v. Willey , 57 F.3d 1374, 1386 (5th Cir.), cert. denied , 516 U.S. 1029 (1995)). There is ample evidence to sustain Ham’s conviction for m oney laundering concealment. As in our recent Brown c ase, the purchases here were made in cash, rendering the m d i f f i cult to trace, and even payments above the $10,000
repor t i n g requirement were not reported t o the IRS or were reported in the

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name of straw buyers. 1 United S tates v. Brown , 553 F.3d 768, 786-87 (5th Cir. 2008). Moreover, and again similar to Brown , there is significant evidence that Ham and c ertain criminal-customers, i n c luding Stoney Kidd, moved the money in the way they d id for the purpose of c o ncealing their true actions from the government. See Cuellar v
. United S tates , 553 U.S. 550, 566 ( 1994) (“[H]ow one

moves the money is di s t i nct from why one moves t he money[.]”). The
go v e r n m e n t p r e s e n t e d e vi d e n c e , f o r example, that Kidd signed a “lease”—desp i t e that he was purchasing t he car—so that if law e nforcement later seized the car, the dealership could recover it. Additionally, Kidd a sserted in his lease that the money he used to pay for the car derived from his work as a barber—and Ham knew t h i s assertion was untrue. 2 See United States v. Wilson , 77 F.3d 105, 109 (5th Cir. 1996) (sufficient evidence of concealment when, i n t e r a lia , defendant a sserted money for his purchases derived from an inheritance and a j o b settlement). 3 These misrepresentations, combined with Kidd’s a dmission at trial that he in fact used
money from drug sales to p urchase the Maserati, and Ham’s knowledge as to the true source of the funds and true nature of the sale, are more t h a n sufficient evidence of concealment to sustain Ham’s money laundering conviction.

1 Several p aym ents w ere rep orted late. M o n e y laund ering m ay als o occur w hen the trans actions are des igned “to a v o i d a trans action rep orting requirem ent und er State or F e d e r a l l a w , ” 18 U

. S. C. § 1956( a) (1) ( B) ( ii) , but this is not the typ e of m oney laund ering th e governm ent alleged here. Ind eed , it s eem s m any of the p a y m ents were not s p ecif ically d es igned to avoid rep orting requirem ents , but, ins tead , the d ef end ants failed to abid e by thes e requirem ents

.

2 Am ong other evid ence is the cons p icuous f act that a “barber” had $21, 000 in cas h available to p urchas e a M as erati. Kid dals o later purchas ed an As ton M artin.

3 See a lso Tencer , 107 F. 3d at 1130 ( s uf f icient evid ence includ ed the d ef end ant’s f

als e s tatem e nts to bank of

f icials ) ; Wi lson , 77 F. 3d at 109 ( s uf f icient evid ence exis ted , includ ing that the d ef end ant told the s eller of the car to lie to the IRS) ; U ni ted Sta tes v
. G a l l o , 927 F. 2d 815, 822 ( 5th Cir. 1991) ( s uf f icient evid ence w hen, i nter a l ia , the d ef end ants mad e t w o f

als e exculp atory s tatem ents )

. 4 Case: 11-41256 Document: 00512213548 Page: 4 Date Filed: 04/18/2013No. 11-41256 III. The defendants n ext c ontend they are entitled to a new trial because the prosecutor c o mmitted serious misconduct during his closing a rgument. This argument is without merit. The burden of establishing that the prosecutor made

a n i m p roper remark warranting a new t rial is substantial. United States v. Mares , 4 02 F.3d 5 11, 5 15 (5th Cir. 2005). I n determining whether a defendant

can satisfy this burden, we ask “whether the prosecutor’s r emarks cast serious doubt on the correctness of the jury’s verdict.” United States v. Guidry , 456 F.3d 493, 505 (5th Cir. 2006) (quoting Mares , 402 F.3d at 515) (internal quotations omitted). We consider “(1) the magnitu d e o f t he prejudicial e ffect of the prosecutor’s remarks, (2) the efficacy of a ny cautionary i nstruction by t h e judge, and (3) the strength of the e v i d e n ce supporting the conviction.” I d. (quoting United States v. Palmer , 37 F.3d 1080, 1085 (5th C ir.199 4 ) )

. Each of these factors weighs against the defendants. First, the defendants point to only a couple of statements the prosecutor made in a lengthy c losing argument following a t h i r teen-day trial. But “[i]nappropriate prosec u t o r i a l comments, standing alone, would n ot justify a reviewing court to rev e r s e a c r iminal c o nviction obtained in an otherwise fair proceeding.” Guidry , 456 F .3d at 505 (quoting United States v. Young , 470 U.S. 1, 11 (1985)). Moreo v er, due to “the critical fact that these statements were ‘neither persistent nor pronounced when viewed within the context of the entire closing argument,’ Bradford v. Whitley , 953 F.2d 1008, 1013 ( 5th Cir.1992), it is unlikely that the jury was led astray.” United States v. H olmes , 406 F.3d 337, 356 (5th Cir. 2 0 0 5). Because t he evidence of p rejudice is minimal at best, because the district judge adequately informed the jury that la w y e r s ’ s tatements

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are not evidence, 4 a nd because of t he overwhelming e vidence of H am’s guilt, discussed above, the defendants are not entitled to a new trial. IV. Ar ledge further argues the district court erred in disqualifying his attorney. We review a district court’s disqualification of a defense attorney for abuse of discretion. United States v. Sanchez Guerrero , 546 F.3d 328, 332 (5th Cir. 2008). Arledge first selected Stephen Jones and Ryan Lurich to represent him. The d istrict c ourt disqualified Lurich because L urich was simultaneously attempting to r epresent both Arledge, who essentially orchestrated this scheme, and t w o other d efendants, who were lower level employees—and Arledge was paying Lurich to represent these two defendants. A c c o rdingly, there were compelling r easons, including the potential for s erious conflicts of interest, why t h e district court disqualified Lurich from representing Arledge, and it was certainly not an abuse of discretion f o r t he district court to d o so. See id. at 333-34. V. Final l y , Ar ledge c ontends the district court erred in applying three separate enhancements to his base offense level: a six-lev e l enhancement for knowingly laundering p roceeds from the d i stribution of controlled substances,

a four-level increase f

or being in the b usiness of l aundering m oney, and a fourlevel increase for being the organizer and leader of a criminal enterprise. Arledge’s base offense level was 22 before these enhancements, and 36 after.

4 See, e. g. , Uni ted Sta tes v
. H ol m es , 406 F

. 3d 3 3 7 , 3 5 6 ( 5 th Cir. 2005) (no revers ible error, “given the d is trict court’s cautionary ins truction to the jury to cons id er only the evid ence and that the attorneys ’ argum ents w ere not evid ence”) ; U ni t ed Sta tes v
. B e r n a r d , 2 9 9 F

. 3d 467, 488 ( 5th C ir. 2002) ( no revers ible error when “the court ins tructed the jury tw ice not to cons id er the s tatem ents , argum ents or ques tions by the attorneys as evid ence”) ; U ni t ed Sta tes v
. M orri s , 568 F. 2d396, 402 ( 5th C ir. 1978) (“The trial jud ge in this cas e ins tructed the jury im m ed iately af

ter the p ros ecutor’s s tatem ent that the attorneys ’ s tatem ents are not evid ence to be cons id ered by the jury. T he d ef end ant’s rights w ere s uf f iciently p rotected

. ”)

.

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Arledge argues the e n hancement regarding knowledge or belief that the proceeds derived from the distribution o f controlled substances w a s erroneous because there was no evidence supporting i t

. H o w ever, there was significant evidence that Arledge knew his customers d e alt drugs. Indeed, the district court referred to conversations in the record that Arledge h ad with two customers “which would c learly indicate that M r. Arledge knew that o ne or more customers

were in the b usiness of drug-dealing.” 5 Accordingly, the district court’s finding that Arledge knew some of his customers were drug dealers was not clear error, and the enhancement on this basis was valid. Next, Arledge argues t h at the evidence c learly indicates he w as not in the business of money laundering. The Sentencing Gui d e l i n es direct courts to consider “the totality of the circumstances” in cons i d e ri n g t h i s e nh a n c e m e n t , a n d they include a “non-exhaustive list of factors” to examine, i ncluding whether the defendant laundered funds regularly, for a n extended period of time, or from multiple sources, a nd whether h e generated a s ubstantial a mount of revenue from laundering f

unds. U.S.S.G. § 2S1.1(b)(2)(C) c mt. 4(A)-(B). In applying this enhancement to Arledge, the distr i c t c o u r t relied upon the facts that Arledge regular l y l a u n dered money f rom numerous customers over the course of two
years, and that he made a s ubstantial amount of m o n e y doing s o—earning $638,000 on gross sales of $2.6 million. The district c o urt’s factual findings were not clearly erroneous, and its application of this enhancement was correct. Arledge further contends that the enhancement b ased upon organizing or leading a criminal enterprise was i n a p p r o p riate. This enhancement may be applied “[i]f the defendant w as an organizer o r leader of a criminal activity that

5 For exam p le, Arled ge, in convers ations w ith a cu st o m e r n a m e d M arvin K eith, ref erred to a B entley on his lot as “a d rug d ealer’s car, ” and later, in ref erence to t h a t s a m e B entley ( w hich had now been m od if ied) , s tated , “The d rug d ealer trad ed up
. ” M ore o v e r , a d d i t ional evid ence s up p orts the d is trict jud ge’s conclus ion, includ ing th a t Ki d d tes tif ied that he and Arled ge d is cus s ed w hat w ould hap p en if Kid d ’s car w ere s eized w ith drugs ins id e it. 7 Case: 11-41256 Document: 00512213548 Page: 7 Date Filed: 04/18/2013No. 11-41256

involved five or more participants or was otherwise extensive[.]” U.S.S.G. 3B1.1(a). The Guidelines note that, “To qualify for an a d j u s tment u nder this section, the defendant must have been the organizer, leader, manager, or supervisor of one or m ore other participants.” 6 Id. a t cmt. 2 (emphasis added). Given the numerous employee and c riminal participants in t his scheme, and Arledge’s role a s the orchestrator, the district court c o rrectly applied a four-level enhancement to Arledge’s sentence on this basis. Fi n ally, Arledge argues that his 188-month sentence is procedurally unreasonable, a lleging that the district court failed to give any explanati o n or consideration of t h e § 3553(a) factors. This a llegation, though, i s s imply not true. The district court announced the 1 88-235 month range Arledge f aced, then allowed defense counsel to make his arguments as t o why this range was inappropriate (further allowing the defendant t o speak a nd witnesses to testify), before noting that other defendants received lower sentences based upon their substantial assistance t o the government (§ 5K1 motions), or t h e i r plea agreements. 7 The district court then recognized that the government asked for

a sentence at the high end of the s e n tencing range, while Arledge requested a downward departure. After further noting that Ar l edge had no criminal history, the court sentenced him at the low end of the applicable range. VI. For the forego i n g reasons, the defendants’ convictions a nd the district court’s judgments are A FFIR M E D

.

6 “A ‘p articip ant’ is a p e r s o n w ho is crim inally res p ons ible f or the com m is s ion of the of f ens e, but need not have been convicted

. A p ers on w ho is not crim inally res p ons ible f or the
com m is s ion of the of

f ens e (e. g. , an und ercover law enf orcem ent of

f icer) is not a p articip ant. ” U

. S. S. G

. § 3B1. 1 cm t. 1.

7 As the governm ent notes , the s entencing h e a ring w as very thorough and ap p roxim ately tw o- and

- one- half hours long. 8 Case: 11-41256 Document: 00512213548 Page: 8 Date Filed: 04/18/2013