# United Stat es Court of Appeals For the First C ircuit

No. 03-2252 UNITED STATES OF AMERICA, Appellee,

v. RICHARD CASTELLINI, Defendant, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS [Hon. Joseph L. Tauro, U.S. District Judge ]

Before Selya, Circuit Judge , Stahl, Senior Circuit Judge , and Lynch, Circuit Judge .

James C. Rehnquist , with whom Sarah Heaton Concannon and Goodwin Procter LLP were on brief, for appellant. Allison D. Burroughs , Assistant United States Attorney, with whom Michael J. Sullivan , United States Attorney, was on brief, for appellee.

December 15, 2004-2- LYNCH, Circuit Judge . Richard Castellini ("Castellini"),

a marriedman with three children and no prior criminal record, was convictedof the crime of money laundering the proceeds of a bankruptcyfraud and conspiracy to money launder. 18 U.S.C. §§ 1956(a)(3), (c)(7)(D), (h). In fact, the fraud was part of a sting operation by the government which en snared at least six people. All were associated with Anderson Ark and Associates ("AAA "), a Costa Rican company which moved money of fshore through trusts in several countries before returning the "cleansed" (but diminished) funds to investors.

At trial, Castellini testified and portrayed himself as

an innocent and naive dupe, not a criminal, who w as misled by RichardGonet ("Go net" ), the architect of the money laundering scheme and chief malefactor. In fact, Castellini testified that he hadbeen victimized by AAA and Gonet, who fleeced him of his own money. It was Gonet who introduced Castellini to his troubled friend"Jim Mitchell," and asked him to do two financial transactions for Mitchell. Unfortunately for Castellini, "Mitchell" was in fact James Dowling ("Dowling" or "Agent Dowling"), an undercover agent in a sting operation mounted by the Internal Revenue Service ("IRS") against Gonet.

The two financial transactions Castellini was asked to, and did in fact, engineer involved multiple offshore transfers of1 The government also cross-appealed Castellini's sentence in

No. 04-1339. On December 2, 2004, the cross-appeal was dismissed pursuant to Fed. R. App. P. 42(b) upon the government's motion. -3- Mitc hell's money; Mitchell told Castellini the monies were being hidden from the bankruptcy court.

Castellini was tried alone. Gonet pled guilty (but did not testify for the government). A properly instructed jury found that Castellini had engaged in money laundering by conducting financial transacti o ns involving property represented to be the proceeds of "specified unlawful activity," "with the intent . . . to conceal . . . the nature, location, source, ownership, or control of property believed to be the proceeds of s pec ified unlawful activity." 18 U.S.C. § 1956(a)(3).

On appeal, Castellini attacks his conviction and sentence. 1 First, he argues that the guilty verdicts on Counts One (for conspiracy to launder), Five, and Six (for the two instances of actual laundering) should be reversed for insufficiency of evidence. Second, he argues that he is entitled to a new trial for

errors in the admission of coconspirator statements not meeting the requirements of United States v. Petrozziello , 548 F.2d 20, 22-24 (1st Cir. 1977).

The insufficiency argument is premised on th e correct principle that the "proceeds" used for money launderin g m ust be "proceeds" from a different illegal activity than the illegal activity of moneylaundering itself. United States v. Mankarious ,-4-

151 F.3d694, 705 (7th Cir. 1998). The argument is that the agent didnot explicitly or implicitly "represent" that the money Castellini laundered was the proce eds of a specified "unlawful activity," but rather left Castellini with the sense that at most he was helping in the commission of a bankruptcy fraud, not that he

was laundering the money derived from an ongoing bankruptcy fraud. While skillfully presented, existing case law dooms the argument. The Petrozziello arguments are also far from frivolous; but they, too, do not prevail, because the statements were admissible on other grounds or their admission was harmless.

Castellini was sentenced to twenty-one months' imprisonment; he was not orderedto pay a fine. Castellini attacks this sentence. He argues that the district court wrongly concluded that it did not have authority to consider granting him a downward depart ure fo r aberrant conduct. The record reflects that the district court knew it had the authority but did not think Castellini qualified to receive the reduction given that more than

one transaction was involved. We have no jurisdiction to review that determination. Castellini also argues for the first time on appeal that his sentence violated Blakelyv. Washington , 124 S. Ct. 2531 (2004). We reject that challenge because there was no plain

error.2 AAA's leader, Keith Anderson ("Anderson"), was also involved

in an org anization called Global Prosperity and possibly another organization called Investors International. The record is not entirely clear as to what the relationships between the different organizations were, but it appears that Anderson l eft Global Prosperityat some point and founded AAA. Some of Castellini's business dealings described later on in this case were with coconspirators (notably Anderson and Roosevelt Drummer ("Drummer")) when they were involved with Global Prosperity. The government and Castellini, in their briefs, refer to AAA even when discussing transactions involving Global Prosperity. For ease of reference, therefore, AAA is used throughout this opinion to refer to both Global Prosperity and AAA. -5- I. We set out the facts in the light most favorable to the jury's verdict. Unit ed States v. Glaum , 356 F.3d 169, 172 (1st Cir. 2004).

This case involves one of two prosecutions of the leaders of and persons associated with AAA. 2 AAA is a Costa Rican company which was the cen tral marketing instrumentality for money laundering schemes to move the proceeds of illegal activity out of the United States via entities such as offshore trusts and then to repatriate such funds back to the United States so as to make the proceeds appear to be from legitimate sources. The conspiracy involvedindividuals spanning the continent from Cal iforn ia to Massachusetts and from Washington to Costa Rica.

In December of 1998, after months of investigations, the Criminal Investigation Division of the IRS began a sting operation targetedat Michael Gone t, a M assachusetts resident who had been3 Virtuallyall of the conversations between Agent Dowling and

the targets of the sting operation, whether by telephone or in person, were recorded. In total, over 400 conversa tions were rec orded . Approximately twenty-three of these recordings were playedfor the juryduring the trial, and five of those recordings formthe basis of a hearsay challenge that Castellini asserts here. Castelli ni t estified about his conversations with Gonet to which Agent Dowling was not a party, but these were, for obvious reasons, not recorded. -6- promoting and marketing offshore trusts. Gonet did not work for AAAbut ended up leading the sting operation to the leaders of AAA.

Agent Dowling first conta ct ed Gonet by telephone on December 18, 1998. As "Jim Mitchell," Agent Dowling told Gonet a

cover story that he ran a company named Pyramid Financial and owned three Burger King restaurants in the Phoenix, Arizona area. He saidhe had been sued for sexual harassment and was at risk of being forced into personal and corporate bankruptcy. As a result, he said he wanted to conceal some of his assets, namely, $100,000 in cash in a safe deposit box and $300,000 in a corporate bank account, from the bankruptcy court. Agent Dowling asked Gonet for help in concealing the funds from the bankr uptc y court. 3 Gonet respondedaffirmatively. Dowling then asked, as a way to move the money, whether Gonet, who had a company in the Bahamas, could "send [Dowling] invoices and [Dowling] could pay the invoi ces." Gonet toldDowling that this was possible. In a second phone call on December 30, 1998, Gonet and Agent Dowling discussed in some detail how they might move the funds. Gonet told Dowling, "I have a-7-

[consulting] company that I can bill it through, you know, however much you want me to bill it."

On January 22, 1999, Gone t and Agent Dowling met in person for the first time. Agen t Dowling gave Gonet $60,000 in cash, which he told Gonet he wanted to conceal from the bankruptcy court. Gonet moved the cash in installments to an offshore trust account and then back to an undercover bank account designated by Dowling at LaSalle Bank in Chicago in the name of Century Marketing. Gonet kept $9,000 as his fee for assisting Dowling. Castellini visibly entered the picture around March 11 or 12, 1999.

Castellini testified that he first met Gonet in 1997, when Gonet tried to sell Castellini an offshore trust. Castellini expla inedto G onet that he already had the use of an offshore structure through a complex bu sine ss organization ("CBO") set up for him by AAA. Castellini had been involved with AAA since 1996, when he began to buy tapes and attendseminars offered by AAA purporting to teach strategies for minimizing taxes. In 1997, as

a way to reduce taxes from his own business, Castellini paid $28,000 to have the CBO set up f or him by the head of AAA, Anderson, and AAA's head accountant, Dr ummer, an unindicted coconspirator who also became Castellini's accountant. In late 1997, in accordance with Drummer's advice, Castellini moved about $175,000 of his own money, listed as a bogus "management fee," through the CBO in order to reduce his taxes. For this service,-8-

AAAcharged him a 5% fee. These were the only times that Castellini used the CBO prior to his involvement in the activities in this case. Castellini also invested in various schemes offered by AAA members, but he lost money on all of them.

Cast ellin i testified that Gonet called him on either March 11 or March 12, 1999, to ask him whether he still hadhis CBO and whether a third party would be allowed to use it. Gonet also explainedDowling's situation to Castellini. Afte r Cas tellini consultedDrummer, he called Gonet back on March 15, 1999, andtold Gonet that it was okay to use his CBO for somebody else's money.

Gonet and Agent Do wling spoke twice on March 16, 1999. Gonet told Dowling that he did not have the ability to move the moneyin the corporate bank account and he was concernedabout the paper trail. Gonet did suggest to Dowling a way that the funds couldbe moved. He explained that he knew of a management company that c oul d generate an invoice for non-existent "management consult[ing]" work. After Dowling paid the invoice with a check dra wn on his corporate bank account, "the management compa n y [would] take the funds, deposit them, and then move the funds offshore, and then ultimately back to wherever [Dowling] want[s] them." Gonet explained that the management company could move anything over $175,000 and still raise no suspicion for the high amount charged on the invoice because it did "this as a matter of business on a daily basis." Gonet said that the management-9-

company, a "Nevada corporation . . . connected with a huge offshore conglomerate," would charge a fee of 25% of the funds moved in this way, and that Gonet's own fee would come out of that 25%. Gonet also assured Dowling that there would be no problems if the bankruptcycourt questio ned the management company because "they deal with this everyday. It's not like they're coming up with a . . . new defense . . . . They do it all the time."

Two days later, on March 18, 1999, Gonet and Dowling met in Florida. During this meetin g, which was videotaped, Dowling gave Gonet another $40,000 in cash for Dowling to move offshore and then back into the LaSalle Bank account as before. Gonet also agreedto see if someone from the management company would speak with Agent Dowling directly about moving the funds in his corporate bank account.

On March 29, 1999, Gonet called Cast e llini, explained Dowling's situat ion in more detail, and asked Castellini to help Dowling move his money. Gonet in turn told Agent Dowling to expect a call from someone in the management company which they had been discussing.

The next day, Castellini called Agent Dowling and told himthat Gonet had explainedhis situation to him. Castellini said that he could help Agent Dowling to retain control of and hide from the bankruptcy court the $300,000 in the corporate bank account by using C ast ellini's management company, RLC Management. RLC-10-

Management is a Nevada company which Castellini controlled as part of his CBO. Castellini suggested that Agent Dowling give RLC Management checks drawn on Pyramid Financial's corporate account; RLC Management would then move the funds through its "majority shareholder," a domestic trust, offshore into a foreign trust, and thence through a series of offshore bank accounts under Castellini's and Gonet's direction until the funds were deposited back in the United States into a bank account controlled by Agent Dowling. (Castellini later explained that RLC Manag emen t is actually a Nevada partnership, and the domestic trust is a 99% partner in the par tne rship.) Castellini told Dowling that this whole structure was set up by "an attorney and a former IRS Agent"

as a way to use "the laws that are in place to the fullest extent." Ag ent Do wling asked Castellini, "[H]ow do I get [the money offshore] back then?" Castellini responded, "[T]here's different vehicles for you to use [such as] . . . business corporations . .

. or . . . trusts." Castellini also said, "[A]s far as you getting use of the funds afterwards, you . . . talk to Mike on [sic] that regard." Consistent with what Gonet had said earlier, Castellini said he would invoice Pyramid Financial, Agent Dowling's company, for bogus "man ageme nt . . . consulting fee[s]" so that the check would look like a "legitimate . . . business expense" even though

no consulting work wouldbe done for Dowling. Agent Dowling asked-11-

Castellini, "[A]ll I do is just don't tell anyone about the transaction then?" Castellini replied, "[A]s far as you know, you hiredus to do some consulting. . . . [A]s the rest of it goes, you don't . . . know anything." Castellini told Dowling that he should not "tell the attorney" about the transaction because then Dowling would be told by the bankruptcy counsel to list the funds

on the bankruptcy petition. Castellini conf irm ed that he could handle transactions between $175,000 and $200,000, andthat the fee wouldbe 25%, with Castellini taking care of Gonet's share. Agent Dowling consented to the "pretty steep" fee.

Castellini urged Dowling to delay the bankruptcy filing as long as possible because the trustee looks "pretty heavily" at trans actions du ring the "last 90 days" and they did not want to "raise a red flag." In order to lessen the likelihood that the bogus transaction would be scrutinized, Castellini suggested that the invoices be backdated to February and advised Dow ling to backdate the checks to RLC to be from the sam e time as the most recent group of checks he had written subsequent to the invoice date so that the false checks would not "stick out like a sore thumb." Castellini also offered to generate some "paperwork," such

as a management report or proposal, as supporting documentation for the false invoices.

When Agent Dowling said he was a little "nervous" about the transactions because his attorney might, as he hadin the past,-12-

"jump[] up and down about, you know, bankruptcy fraud," Castellini toldhim, "[Y]ou're not committing . . . fraud if you hire a company to come in and . . . provide a servi ce." Bu t Castellini also acknowledged that no services would actually be provided. Agent Dowling asked Castellini, "[T]he only one knows [sic] about the 'service' will be you and me[?]" Castellini replied, "Right. They don't know, they don' t have to know what happened to it." Agent Dowling asked Castellini, "[H]ave you ever done this before?" Castellini replied, "I've never had anyone come back and ask. . . . [I]t's never been questioned."

On April 8, 1999, Castellini called Dowling to initiate their plan, or, in his words, "do that invoice thing." Castellini toldDowling that he would make out an invoice in the amount of $30,000 dated February 1, 1999, and instructed Dowling to write out

a check dated the same as the last time in February when Dowling thought he wrote out other checks. This invoice was sent on April 20, 1999. On April 29, 1999, Castellini and Agent Dowling met at a restaurant in New Jersey, where Dowling gave Castellini a check for $30,000, dated February 8, 1999, and made out to RLC Management, in "payment" for the false consulting invoice Castellini had sent to Agent Do wlin g. After a two-hour lunch, the two engaged in the following conversation to justify the false invoice:

Agen t Dowling: So, and on this thing her e , you've chosen 25 percent. Is there anything,-13- if something ever happens, you'l l be on my team, and that's what the 25 percent -- That's kind of high. Castellini: If something ever happens, wha tever happens, they call me. And I c a n verifythat we consul ted. I mean, it's as simple as that. I'm not hiding anything. Did you and I just consult over business ventures and strategies? Agent Dowling: We've been talking [sic] hiding my money. Castellini: Did we discuss business strategies? Agent Dowling: Sure. Castellini: Yes. We're not lying, are we? Hiding your money is a business strategy, isn't it? Age nt D owling: You've got a point. That's a great point. Cas te llini deposited the $30,000 check into the RLC Management account and then transferred the money to the account of Sawtooth Enterprises, another AAA account available to Castellini. Fromthe Sawtooth account, the funds -- minus the 25% fee for Castellini and Gonet -- moved through banks in Vienna, Aus tria, Costa Rica, the Isle of Man, the Bahamas, and ultimately, back to Agent Dowling's Century Market a ccou nt in LaSalle Bank, Chicago. Castellini and Gonet both took part in directi ng the money transfers, and some of the accounts belonged to Gonet.

Afew days later, during a telephone conversation on May 4, 1999, Castellini told Dowling that he had made up another false invoice for $1 70,00 0 dated March 15, 1999, which he was going to sendout to Dowling. He asked Dowling to "trash the envelope" when he got the invoice because " it will ha ve a postmark [much later4 As the result of a conversation between Agent Dowling and

Castellini's accountant, Drumme r, wh o advised Agent Dowling to increase the wages he paid himself from his company, this check was drawn on Agent Dowling's personal account rather than the Pyramid Financial corporate account. -14- than the false date of the invoice] on it and stuff like that." Agent Dowling did receive such an invoi ce. However, due to a conversation that Dowling later had with Castellini's accountant, Drummer, nothing further was done with this false invoice.

In September of 1 999, Castellini sent Dowling another invoice for "consulting services" backdated July 30, 199 9, f or $30,000, and Agent Dowling made out a check in that amount, backdatedJuly 31, 1999, to RLC Management. 4 The money went on the

same world-wide tour as the first $30,000. Ulti mately , $22,500, representing the balance after the 25% fee, was deposited in the Century Market account.

Having himself successfully transferred $60,000 for Dowling, Cas tellini referred Dowling to Richard Marks ("Marks"), another coconspirator ultimately indicted along with Castellini, for further money transfers. Marks contr olled Sawtooth Enterprises, which was one of the entities through wh ich the $60,000 Castellini helped Dowling hide had moved. During a telephone conversation on October 18, 1999, Castellini told Dowling that he would "give Richard [Marks] the whole overview of what your situation is and, you know, what we've done so far." On November-15-

1, 1999, Castellini told Dowling that Marks had agreed to speak with Dowling directly.

Thereafter, Marks helped Agent Dowling hide $150,000 before referring Agent Dowling to Wayne Anderson. Wayne Anderson

was the brother of Keith Anderson, and was himself also a leader in AAA. Ultimately, Wayne Anderson helped Dowling hide $100,000.

In late 2000, Pyramid Financial, Agent Dowling's fictitious company, filed its bankruptcy petition (the bankruptcy court was informed ahead of time that the petition was fictitious andthe petition was ultimately dismissed). Agent Dowling and another IRS agent posing as his fiancée met Castellini andhis wife in February 2001 to let Castellini know that bankruptcy had been filedand "to thank him for his help." Eight days after this dinner meeting, Castellini was arrested.

Castellini testified that he made no money from the transactions he conducted for Dowling because, out of the 25% fee, Gonet took 15% and left 5% each for AAA and Castellini, but AAA refused to send Castellini his share. II. On March 29, 2001, a federal grand jury in the District of Massachusetts indictedRichardCastellini and codefendants Keith Anderson, Wayne Anderson, Ka roly n Grosnickle, Richard Marks, and5 On May 24, 2001, all charges against the Andersons,

Grosnickle, andMarks were dismissed, on motion of the government, in favor of prosecution in the Eastern District of California. Gonet pled guiltyto all ch arges against him in the District of Massachusetts.

6 The statute imposes criminal liability on any person who "in contemplation of a case under title 11 [the Bankruptcy Code] . . . or with intent to defeat the provisions of title 11, knowingly and fraudulentlytransfers or conceals any of his property." 18 U.S.C. § 152(7). -16- Michael Gonet. 5 Count One of the indictment charged Castellini with conspiracy to launder money in violation of 18 U.S.C. § 1956(h); Counts Five and S ix c harged Castellini with money laundering in violation of 18 U.S.C. § 1956(a)(3) basedon the two separate $30,000 transactions. All of the charges were premised on the fictional "specifiedunlawful activity" of bankruptcy fraud in violation of 18 U.S.C. § 152. 6 The relevant portion of the "money laundering sting" statute, 18 U.S.C. § 1956(a)(3), provides that:

Whoever, with the intent --

(A) to promote the carrying on of specified unlawful activity; [or]

(B) to conceal or disguise the nature, location, source, ownership, or control of property believed to be the proceeds of specified unlawful activity;

. . . conducts or attempts to conduct a financial transaction involving property represented to be the proceeds of specified unlawful activity

. . . sha ll be fined under this title or imprisonedfor not more than 20 years, o r both. For purposes of this paragraph . . . , th e term "represented" means an y representation made by a law enforcement officer or by another person at the direction of, or with the approval of, a Federal-17- official authorized to investigate or prosecute violations of this section. Castellini's jury trial began on July 8, 2002. The government electedto proceed only on Counts One, Five, and Six. The trial lasted seven days.

During trial, the government played excerpts of twentythree recorded conversations between Agent Dowling and members of the conspiracy. Of these, five conversations were with Gonet, thirteen were with Castellini, four were with Marks, and the last

one was with Grosnickle. One of the conversations involving Gonet

was the March 18, 1999 meet ing in a Florida hotel room between Agent Dowling and Gonet, and the government played a videotape recording of the meeting.

At the outset of the government's case, the district court allowed the defense to lodge a continuing hearsay objection to the admission of each of these recordings of conv ersati ons between Agent Dowling and the alleged coconspirators. The defense renewedthis objection on the third day of the trial. Th e objections were overruled by the trial court but preserved for appeal. The defense also moved for a mistrial on the basis of the admission of this evidence after the government rested, at the close of all the evidence, and afte r the verdict. These motions were denied.

On July 19, 2002, the jury found Castellini guilty on all three counts. At his August 12, 2003 s ent encing hearing,-18-

Castellini moved for a downward departure for "aberrant behavior" under U.S. Sentencing Guidelines Manual § 5K2.20. Castellini arguedthat the chargedconduct was an "eight-month lapse in a 38- year life of good citizenship." The district court denied the motion, saying, "I think that this is a departure in terms of his behavior. You know, that eight-month period . . . is like a black hole in an otherwise reasonable life. But I don't believe that it adds up to the downward departure that you are talking about." The court sentenced Castellini to twenty-one months' imprisonment but didnot impose a fine andstayed Castellini's sentence pending appeal. Castellini timel y fi led his notice of appeal on August 19, 2003. III.

We address in turn each of Castellini's claims on appeal. A. Sufficiency of the evidence

On challenges to sufficiency of the evidence, we take all the evidence and inferences in the light most favorable to the verdict and ask whether a rational factfinder could find, beyond a reasonable doubt, that the p rosec ution successfully proved the essential elements of the crime. Jackson v. Virginia , 443 U.S. 307, 319 (1979); United Stat es v. O'Brien , 14 F.3d 703, 706 (1st Cir. 1994).-19- The essential elements of the mo ney l aundering sting statute are:

Whoever, with the intent --

(A) to promote the carrying on of specified unlawful activity ; [or]

(B) to conceal or disguise the nature, location, source, ownership, or control of property believed to be the proceeds of specified unlawful activity ;

. . . conducts or attempts to conduct a financial transaction involving property represented to be the proceeds of specified unlawful activity

. . . sh all be fined under this title or imprisonedfor not more t ha n 20 years, or both. 18 U.S.C. § 1956(a) (3) (e mphasis added). The statute further defines the term "represented" as "any representation made by a law enforcement officer or by another person at the direction of, or with the approval of, a Federal official authorized to investigate or prosecute violations of this section." Id.

Amoney laundering defendant must act with a certain type of intent. One sort of requisite intent is the intent to " conceal

. . . the nature, location, source, ownership, or control of property believed to be the proceeds of s pecified unlawful activity ." Id. (em pha sis added). The intent requirement is bolsteredby the requirement that the financial transactions in question must involve "property represented to be the proceeds of specified unlawful activity." Id. (emphasis added).

On first read, it might seem odd to refer to money laundering of "proceeds" f rom a bankruptcy fraud. After all,-20-

bankru ptcy fraud involves hiding the debtor's own money from the bankruptcycourt, and unlike other types of fraud does not involve wrongfullytaking money ("proceeds ") fr om others by deception. Proceeds are usually defined as "[t]he value of land, goods, or investments when converted into money" or "the amount of money receivedfrom a sale." Black's Law Dictionary1242 (8th ed. 2004). Nonetheless, Congress expressly included bankruptcy fraud as one of the predicate crimes producing "proceeds" which co uld be money laundered. 18 U .S.C . § 1956(c)(7)(D). It is not difficult to think of ba nkruptcy fraud in terms similar to the other types of fraud -- money which is hidden from the bankruptcy court is, in a sense, taken from the creditors. In any event, the case law as well as the statute establishes that bankruptcy fraud can produce "proceeds." See United States v. Richard , 234 F.3d 763, 770 (1st Cir. 2000). The "sting" portion of the money laundering statute means that the "proceeds" can be part of a fiction the government creates. Cast elli ni argues that the agent never representedthe money to be the proceeds of unlawful activity , and so no rational jury could con clud e that element of the crime was proven. The argument is based on the general rule that the money laundering statute is meant to punish a separate offense from the underlying "specified unlawful activity," and thus, it criminalizes separate financial transactions invol ving the funds derived from such7 Although 18 U.S.C. § 1957 uses the phrase "criminally derived

property" instead of the phrase "proceeds of specified unlawful activity," which is used in 18 U.S.C. § 1956, courts have interpretedthe two to be equivalent and have read cases decided under § 1957 as persuasive authority in the interpretation of cases arising under § 1956. See Mankarious , 151 F.3d at 705 n.1; United States v. Savage , 67 F.3d 1435, 1442 (9th Cir. 1995); see also 18 U.S.C. § 1957(f)(2) (defining "criminally derived property" to be "any property constituting, or derived from, proceeds obtained from a criminal offense") (emphasis added). -21- illegal activity. See United States v. Mankarious , 151 F.3d 694, 705 (7th Cir. 1998) ("Money la underi ng requires proceeds of a discrete predicate crime. That predicate crime must have produced proceeds in acts distinct from the conduct that constitutes money laundering."); United States v. LeBlanc , 24 F.3d 340, 346 (1st Cir. 1994) (Money laundering is a "separate crime distinct from the underlying offense that generated the money.").

In the analogous context of 18 U.S.C. § 1957, which criminalizes money laundering of "criminally derived property of a value greater than $10,000 and is derived from specified unlawful acti vity," 7 § 1957(a), we have reversed convictions when the government did not prove that the money involved in the alleged launderi ng t ransactions was the proceeds of a separate specified unlawful activity. See United States v. Carucci , 364 F.3d 339, 345-46 (1st Cir. 2004) (conviction under 18 U.S.C. § 1957 cannot be upheld because government failed to introduce sufficient evidence to allow a rational jury to conclude that defendant laundered money-22-

which was "proceeds" from gambling, extortion, or drug trafficking, the underlying specified unlawful activities).

The two issues of the agent's representation and the nature of the proceeds are connected. We understand Castellini to argue that if the representations had been nothing more than that the agent wanted Castellini to take property and hide it from the bankruptcycourt, then that would not be a representation that property was the "proceeds" of bankruptcy fraud. Castellini argues that the representation then would be only about property, the concealment of which constituted the bankrup tcy fraud, but not about property which was itself the proceeds of bankruptcy fraud.

Castellini supports his position w ith tw o types of arguments. First, he argues that all of Agent Dowling's representations were that the funds were from legitimate business activities, and Castellini had no reason to infer otherwise. He cites the rule th at the gov ernment must at least prove "that an enforcement officer or authorized person made the defendant aware of circumstances from which a reasonable person would infer that the property was [illegal] proceeds." United States v. Kaufmann , 985 F.2d 884, 893 (7th Cir. 1993). The government agent need not expresslystate that the funds are proceeds of illegal activity if that is the natural inference to be draw n. See, e.g. , United States v. Puche , 350 F.3d 1137, 1143 (11th Cir. 2003); United States v. Jensen , 69 F .3d906, 911 (8th Cir. 1995); see also-23-

Kaufmann , 985 F.2d at 893-94 (agent's representation to defendant that the purchaser was a marij uana d ealer, interested only in paying cash for a car, and wanted the car to be registered in another person's name was sufficient to satisfy the "represented" and"proceeds" elements of money laundering even absent express statements that the cash was dru g proc eeds); United States v. Marbelt , 129 F. Supp. 2d 49, 54 (D. Mass. 2000) (representation needonly be specific enough to lead reaso nab le person in defendant's position to infer funds derived from specified unlawful activity). Castellini has a second argument as well. He argues that he could not have violated the bankruptcy fraud statute because the statu te cri minalizes the act of (not merely the intention of) transferring or concealing fun ds, and at the time Agent Dowling gave Castellini money, there had been no specified unlawful activitywhich produced the requisite proceeds of an i llegal activity for money laundering. In other words, Castellini argues, his actions were nothing more than aiding and abetti ng the commission of the underlying bankruptcy fraud; those actions could not simultaneously have constituted money laundering.

We start with the representations argume n t. A "representation" is "the manifestation to another that a fact . .

. exists." Black's Law Dictionary 1327 (8th ed. 2004). It is true that the initial representation made was that Agent Dowling wanted-24-

to hid e from the bankruptcy court his legitimately earned money. Specifically, that Castellini would receive the money in a legitimate manner. Agent Dowling approachedCas tellini and said that he had a successful business and wantedCastellini to help him hide money from the bank ruptc y court; and then gave the money to Castellini to hide from the bankruptcy court, itself a fraud.

Agent Dowling's representations also went far beyondthe initia l transfer of money to an agreement that there would be a series of steps taken after Castellini received the funds. The steps discussed in the conversations were classic money laundering. In their conversations, Cast elli ni described to Agent Dowling in detail the steps that would be taken to siphon the funds offshore and move them around before they would be made available again to Agent Dowling. Dowling represented that this was acceptable. Castellini explainedthe division of work between himself and Gonet in the scheme, and the fee that he andGonet would charge. Dowling representedthat he understood and agreed to the scheme and the "pretty steep" fee.

Indeed, the evidence shows that Castellini did conclude, fromthe representations, that he would be handling the proceeds of

an illegal activity. For example, Castellini acknowledgedto Agent Dowling, within their first conversation, that exchanging a check for a false invoice while providing no act ual consulting service wouldbe fraud. Castellini told Agent Dowling that the money-25-

Dowling was going to give to Castellini would not have to be listed in the bankruptcy petition because "[o]nce you give it to me, it's

no longer yours." Furthermore, in a later conversation on June 25, 19 99, Castellini demonstrated his awareness that he was handling "taintedmoney" by telli ng Age nt Dowling, "[Y]ou're not going to

use the word'laundering' are you? . . . It just makes it sound so dirty. I mean, but what we do --."

Secondly, Castellini argues that even if he transferred funds around the world, what he did was simply aiding and abetting bankruptcyfraud andcould not simultaneously be money laundering. The argument has some attraction, particularly in light of the doctrine, broadly stated, that money laundering requires there to be pr oceeds of illegal activity and cannot be the same as the illegal activity which produces the proceeds. The money laundering statutes "interdict only the financial transactions . . . , not the anterior criminal conduct that yielded the funds allegedly laundered." United States v. Cabrales , 524 U.S. 1, 1 (1998); see also Mankarious , 151 F.3d at 704 ("A money launderer must obtain pr ocee ds before laundering can take place.") (emphasis in original). Castellini relies on the fact that the ind ict ment's allegations can be read to mean that Agent Dowling's delivery of the two $30,000 checks to him initiatedthe money laundering, from which Castellini argues that it is a logical necessity that the8 Under the current (2004) Sentencing Guidelines, Castellini

f aces a higher penalty for money laundering than for bankrup tc y fraud. The base offense level for money laundering is 8. U.S. Sentencing Guidelines Manual § 2S1.1(a)(2). The base offense level for bankruptcy fraud is 6. Id. at § 2B1.1(a)(2). -26- same acts "cannot simultaneously have co mplet edthe underlying bankruptcyfraud necessary for money laundering to have occurred." 8

Castellini u s es the concept of non-simultaneity. The concept, though, hides a distinction, one which was pointed out in Mankarious . The strict emphasis on time should not obscure the real principle of these cases. It is not a requirement that the underlying crime must be fully completed before any money laundering can begin. It is simp ly tha t the non-simultaneity principle means that "money laundering criminalizes a transaction in proceeds, not the trans acti on that creates the proceeds." Mankarious , 151 F.3d at 705. The cases cited by Castellini stand for the rule "that the predicate offenses m ust produce proceeds before a nyo ne can launder those proceeds," but that does not require the two crimes involved to be entirely separate in time. Id. "Proceeds" of an illegal activity may be created before the completion of an underlying on-going crime. Id. Here, "proceeds" of bankruptcy fraud were created as of th e time Castellini accepted the checks from the agent in order to hide them fromthe bankruptcy court. There are variations on the theme. Some types of fraud, like bank and wire fraud, usually create-27-

proceeds only on execution of the first scheme, while mail fraud

can create proceeds before a mailing takes place. Id. Similarly, the first of multiple efforts to hide a series of assets from the bankruptcycourt may create proceeds of illegal activity. See Richard , 234 F.3d at 770 (proc eeds laundered in money laundering mayresult from " a completed phase of an ongoing offense ") (quoting UnitedStates v. Conley , 37 F.3d 970, 980 (3d Cir. 1994)) (emphasis in Richard ); United States v. Butler , 211 F.3d 826, 830 (4th Cir. 2000) (bankruptc y fra ud committed and funds became "criminally derivedproperty" when debtor gave check to innocent third party so that funds would be heldon debtor's behalf and concealed fromthe bankruptcycourt; money laundering occurred when funds were used to purchase cashier's checks a year later, even if these acts were also a further phase of bankrupt cy f raud). From that point of view, the fact that Castellini's additional actions after initially receiving the funds (moving the funds around, and so forth) could have been charged as either money laundering or aiding and abetting

an o n-g oing bankruptcy fraud could be thought to be irrelevant. Once the bas ic ele ments of the underlying crime are sufficiently far along to create proceeds, the logic goes, the money becomes proceeds of illegal activities and it can be laundered.

There may be a case in which the line between bankruptcy fraudand money laundering is so close that the element of showing that the funds are proceeds of an illegal activity or the element-28-

of representation is not met. Arguably, a case where a defendant merelyreceived money to be hidden from the bankruptcycourt in his account and did n othing more with it might be such a situation. That is not this case. Here the further activities Castellini discussed and engaged in after initially receiving the money were archetypal money laundering. While the "classic" money laundering

case involves a drug trafficker "acting with the complicity of a banker or other person in a financial institution [and] deposit[ing] the drug proceeds in a bank under the guise of conducting a legitimate business transaction," United St a tes v. Johnson , 971 F.2d 562, 568 (10th Cir. 1992), the Money Laundering Control Act of 1986, which enacted 18 U.S.C. § 1956, "prohibits a much broader range of conduct than just the 'classic' example of moneylaundering." Johnson , 971 F.2d at 569. The definitions and language of the statute indicate that "Congress intended to criminaliz e a broad array of transactions designed to facilitate

numerous federal crimes, " Le Blanc , 24 F.3d at 346, including bankruptcyfraud. See 18 U.S.C. § 1956(c)(7)(D). It is clear from the legislative history that Congress's purpose in enacting § 1956

was to close "the gap in the criminal law with respect to the postcrime hiding of the ill gotten gains." Johnson , 971 F.2d at 569 (quoting United States v. Edgmon , 952 F.2d 1206, 1213 (10th Cir. 1991)). Congress hadreason to be concerned. The money laundering of the proceeds of an underlying illegal activity may make the-29-

underlying crime more difficult to detect or to prove. And Congress wanted to curtail the separate market of criminal activity which money laundering represents.

The transactions here were within "the full contemplation of Congress when it enacted [§ 1956]." LeBlanc , 24 F.3d at 347. Castellini asked Dowling to start out with a smaller check to avoid arousing the suspicion of the bankruptcy court; he invoicedDowling for fictitious "ma nageme nt consulting" work; he received the checks; and he then negotiated the checks obtained from the bankruptcy fraud, sending the money, minus their fee, to tour the worldunder his and Gonet's guidance. Cf. id. ("[Defendant] asked gamblers to structure their checks in amounts less than $10,000; he askedthat the gamblers make the checks payable to fictitious pa yees; he received the checks; and he then negotiated the checks."). His conduct was at the heart of what Congress sought to criminalize. At least on these facts, where a reasonable listener couldeasily infer the proceeds were from a bankruptcy fraud, which producedproceeds at the time, and the further activities contemplatedand actuated were typical of money laundering, a reasonable jury could findthe defendant guilty of money laundering beyond a reasonable doubt.

Castellini points to United States v. Anderson , 371 F.3d 606 (9th Cir. 2004), which reversed the conviction of Wayne Anderson, a coconspirator indicted and chargedalo ng with-30-

Castellini in the same sting operation but tried separately in the Eastern District of California. Anderson does not provide support for Castellini. Anderson involved convictions on two counts: one count of conspiracy to launder m one y premised on the underlying unlawful activity of bankruptcy fraud (which was based on the same

cover story that Agent Dowling used on Castellini), and a second count of money laundering premised on the underlying unlawful activityof bank fraud in violation of 18 U.S.C. § 1344(2). Anderson , 371 F.3d at 608-09. The Anderson court affirmed the conviction for the conspiracy to commit mone y la undering count bas edon bankruptcy fraud but reversed on the other money laundering count based on bank fra ud. Id. at 612. Anderson supports the conclusion here; indeed, it affirmed the money laundering conviction based on bankruptcy fraud. Id. at 610.

The reversal in Anderson of the money laundering conviction based on bank fraud does not help Castellini. Unlike bankruptcyfraud, bank fraud has as a n element that the money be attainedfrom a federally chartered or insured financial institution . Id. at 612. Anderson held that no such representation had been made or could be inferred from the agent's very different representation that the funds had been fraudulently receivedfrom individual clients. Id. Noting that the government

cou ld easily have structured the sting to make the needed

r epresentation, the court held that the government had fai led t o9 The ellipsis replaces the words "when the hearsay statement

was made ." Petrozziello , 548 F.2d at 23. This restriction wa s dicta in Petrozziello , and was w ith drawn by United States v. Baines , 812 F.2d 41, 42 (1st Cir. 1987) (affirming admission of statements of coconspi ra tors made before defendant joined the -31- meet its burden of proof. Id. Here, the prosecution did not make such a mistake. B. Admission of coconspirator statements

Cas tellini also argues that a new trial is necessa r y because the district court erre d by admitting prejudicial coconspirator statements made by Gonet in taped conversa tions . More specifically, the claims are that the district court (1) never made explicit findings reg ardi ng the existence of the conspiracy andwhether the statements were ma de in furtherance of the conspiracy, and (2) admitted numerous statements by Gonet that were not made during and in furtherance of the conspiracy. See United States v. Petrozziello , 548 F.2d 20, 23 (1st Cir. 1977).

Federal Rule o f Ev idence 801(d)(2)(E) provides that "a statement by a coconspirator o f a p arty during the course and in furthe rance of the conspiracy" is not hearsay evidence and is admissible for the truth of the matter asserted. In this Circuit, coconspirator statements are only admissible under Rule 801(d)(2)(E) if the trial court finds it "more likely than not that the declarant and the defendant were members of a conspiracy . . . andthat the statement was in furtheran ce of the conspiracy." Petrozziello , 548 F.2d at 23. 9conspiracy). See UnitedStates v. Portela , 167 F.3d687, 703 n.13

(1st Cir. 1999) (re cogniz ing modification of Petrozziello by Baines ). -32-

We will sustain a trial court's determination of admissibilityunder Rule 801(d)(2)(E) unless the ruling is clearly

erroneous. United States v. Portela , 167 F.3d 687, 703 (1st Cir. 1999). This def eren tial standard of review places a

heavyburden on a defendant see king to overturn a trial court's Petrozziello ruling: Afinding is clearly erro neous when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm convic tion that a mistake has been committed. United States v. Newton , 326 F.3d 253, 257 (1st Cir. 2003).

Castellini limits his challenge to those out-of-court statement s by Gonet which were made before March 30, 1999. Hi s challenge is thus con fine d to the following five conversations between Gonet and Agent Dowling: 1) the December 18, 1998 telephone call; 2) the December 30, 1998 telephone call; 3) the two telephone calls on March 16, 1999; and 4) the videotaped meeting in Florida on March 18, 1999.

We dispose of the p rocedural aspect of Castellini's challenge quickly. The record shows that the district court did, in fact, m ake Petrozziello rulings, though not as explicitly as Castellini would like. In accordance with the procedures set out in United States v. Ciampaglia , 628 F.2d 632, 638 (1st Cir. 1980),-33-

at t he s tart of the government's presentation of evidence, Castellini requested and was allowed a continuing objection to the admission of Gonet's out-of-court statements. Castellini renewed hi s object ion at the start of the next day of the trial, and the district court replied, "That is on the record. I think there is plentyto justify the conversations coming in . . . ." The district court also reminded the defendant to renew the objection at the close of the government's case. At the close of all evidence, Castellini asked the district court to make the Petrozziello findings. The district court responded, "I make those findings for the record." Castellini did not ask the court to be

more specific. After the charge to the jury, Castellini again askedthe court to make the Petrozziello findings, and the district court said, "I did. I told you at the endof th e case, just consider them made." Castellini's counsel said, "Okay," and made no other comment, request, or objection.

The district court's Petrozziello findings, though not explicitlyseparatedout, necessarily entail that the district court found by a preponderance of the evidence that there was an existing conspiracy at the time Gonet made the stateme nts , that Castellini was involved in the conspiracy at some point, and that the statements were made in furtherance of the conspiracy. See Petrozziello , 548 F.2d at 23. This conclusion is also supported by other rulings made by the district court. Castellini twice moved10 The government did not argue at tri al that there was a

conspiracybetween Gonet and the other conspirators, and that Castellini, even if he did not join the conspiracy until March 30, became responsible for the earlier statements regardless of his awareness of the earlier conduct. Se e Ba ines , 812 F.2d at 42. There was also no evidence in the pre-March 30 conversations that Gonet made the statements in furtherance of a much larger umbrella co nspiracyto which both Gonet and Castellini belonged. C f . United States v. Marino , 277 F.3d 11, 25-26 (1st Cir. 2002) (outof-court coconspirator statements admissible where declarant and defendant were members of larger umbrella conspirac y ev en though they belonged to rival factions). -34- for a mistrial on the ground that there was no conspiracy at all until Castellini joined on March 30, 1999, and that thus Gonet's out-of-court statements before that date were inadmissible hearsay which was prejudicial to Castellini. The government counteredthat the record indicated, by inference, that Castellini and Gonet had been talking about Agent Dowling's situation before March 30, 1999, and at the time the challenged statements were made, a conspiracy involving Gonet an d Cast ellini did exist. 10 The trial judge accepted the government's arguments and denied the motions.

The government's argument t hat there was a conspiracy between Gonet and Castellini before March 30, 1999, is based on several components. When Castellini first spoke to Dowling on March 30, C astellini already knew what Dowling had told Gonet earlier. That, by itself, does not establish a conspiracy between Gonet and Castellini on each of the earlier dates. The government also relies on the corroboration given to Gonet's pre-March 30 statements about the management compan y and the methods by which11 The agreement between Agent Dowling and Gonet cannot be a

conspiracybecause there can be no conspiracy as a ma tter of law solely between a defendant and a government agent. United States v. Giry , 818 F.2d 120, 126 (1st Cir. 1987) ("[I]n situations where the conspiracy involves only [one] defendant and a government [agent,] . . . there can be no conspiracy because it takes two to conspir e and the government [agent] is not a true conspirator.") (quoting United States v. Martino , 648 F.2d 367, 405 (5th Cir. Unit AJune 1981) (internal quotation marks omitted) (second alteration in G iry ) ). This is why the focus is on the existence of a conspiracyinvolving Gonet and some o th er coconspirator, most likely Castellini. -35- the money wouldbe laundered by Agent Dowling's later conversations with Castell ini about the transactions and the subsequent transactions themselves. 11 The entire false-invoice scheme was carriedout by Castellini essentially as Gonet had explained it to Agent Dowling on March 16, 1999. Also on March 16, 1999, Gonet mentioneda third p art y, a Nevada corporation, and the evidence showedthat RLC Management, Castellini's company, turned out to be

a Neva da partnership. Further, Castellini admitted that he had toldGonet of his AAA-derived CBO in 1997, and Gonet asked Castellini on March 11 or 12 of 1999 whether his CBO could be used for a third party. Castellini counters that there is no evidence that there was any agreement between Castellini and Gonet at the time of these pre-March 30 conversations; Gonet might have come up with the plan on his own and simply instructedCastellini later to carryit out. Also, Castellini argues, there were material differences in the transactions described by Gonet and those carried out by Castellini.-36- Indeed, C astellini argues, in Gonet's December 18 and December 30 conversations with Agent Dowling, Gonet said he owned the company which might be used to produce the false invoices and didnot say a third party was involved. In the March 16 conversation, Gonet mentioned a Nevada corporation but also stated he had not yet involved anyone from the corpor ation and hoped to talk with someone that night. Further, on M arch 18, G onet said that he still had not obtained agreement from anyone at the corporation.

The government's case is strongest as to the existence of the conspiracy as of the March 16 and 18 conversations, but hardly compelling even as to those. On this record, whether the district court's ruling that there was a conspiracy on the dates before March 16 constituted clear error is a close call. We need not decide that question for several reasons.

First, some of the statements are admissible on grounds other than the coconspirator exception und e r Rule 801(d)(2)(E). For example, the December 18, 1998 conversation was admissible for

a purpose other than to prove the truth of the m atte r asserted therein and thus would not be hearsay. This conversation simply showedthe initi al contact between Gonet and Agent Dowling, and providedbackg roun d and context for understanding the subsequent transactions and investigative steps targeted at Gonet and Castellini. See United States v. Cintolo , 818 F.2d 980, 999 (1st-37-

Cir. 1987) (out-of-court statements regarding conversation between FBI agents and a witness were admissible to provide context and backgroundeven though defendant did not ask for a limiting instruction). The same applies to the conversation of December 30, 1998, during which Gonet said, "I have a company that I can bill it through." This also provided context and backgroundto understand subsequent references to "the company you talked about" as the laundering scheme was discussed in subsequent conversations.

Second, even if there were error in admitting some of the later conversations, any e rror was harmless. "The essential inquiry in harmless error review is whether the improperly admitted evidence likely affected the outcome of trial." United States v. Torres-Galindo , 206 F.3d 136, 141 (1st Cir. 2000). "[A] harmlessness determination demands a panoramic, case-specific inq uiry considering, among other things, the centrality of t h e taintedmaterial, its uniqueness, its prejudicial impact, the uses to which it was put during the trial, the relative strengths of the parties' cases, and any telltales that furnish clues to the likelihood that the error affected the factfinder's resolution of

a material issue." United States v. Sepulveda , 15 F.3d 1161, 1182 (1st Cir. 1993).

C astellini does argue he was prejudiced. For exam ple , Castellini contends that he was prejudiced by two references Gonet made to money laundering during the March 18, 1999 meeting.-38-

Gonet's first reference was to his own scheme for sending money via UPS around the country as " documents" and has nothing to do with Castellini. Second, Gonet saidin the conversation that accepting Ag ent Do wling's money and depositing it into an offshore account couldbe considered money laundering. Against this is the fact that the evidence of Castellini's own illicit transactio ns w as overwhelming. And the second reference is no more prejudicial to Castellini than Castellini 's o wn statement: "You're not going to use the word 'laundering' are you? . . . . It just makes it sound

so dirty . . . ." At most, Gonet's earlier conversations were "cumulative and the weight of the additional [non-hearsay] evidence overwhelming." United States v. LiCausi , 167 F.3d 36, 50 (1st Cir. 1999). Castellini next argues that he was prejudiced because the content of some of Gonet's statements at the March 18, 1999 meeting

was "shocking" in comparison to the "gentler tone" of the other testimonyand gave rise to the negative impression that Castellini

was a hard core criminal. In order to assure Agent Dowling that his funds would be safe with Castellini, Gonet told Agent Dowling at the March 18 meeting that "these people" (who would be handling Dowling's money at the management company) were more "hard core," more "hard line," and "a lot tougher" than Gonet, and that "these people" could "stand the heat." The jury could evaluate Castellini themselves: Castellini testified at length and told the jury that12 Castellini als o argu es that the recordings involving Gonet

andAgent Dowling took up most of the second day of trial and "assum e[d] a prominent role in the government's case." In actuality, the second day of trial la sted only a half day, and although Agent Dowling's testimony took up the whole time, the bulk of the testimony was not focused on the recordings, none of which was particularly long. These five relatively sh ort recordings cannot be said to have assumed a particularly prominent role in light of the twenty-three recordings used in total and the other evidence introduced by the government during the course of a sevenday trial. -39- he wa s very naive and gullible, and he elicited laughter for his portrayal of himself as a "[c]abana boy" because everyone at work asked him to do things.

Finally, Castellini argues that Gonet's statements only inculpated Castellini, not other conspirators, so that Castellini appearedto be more important to the conspiracy than he actually

was. The prosecution in t his case is of Castellini, not other conspirators, and the jury in thi s tria l heard evidence about others involved in the money laundering. There is no basis for a new trial. 12 IV. A. Sentencing: Downward departure for "aberrant behavior"

Castellini also charges the district court with error in sentencing him, asserting that the court ruled as a matter of law that it had no discretion to grant Castellini's request for a downwarddeparture pursuant to U.S. Sentencing Guidelines Manual § 5K2.20. We reject this claim.-40- When a district court exercises its discretion to refuse to grant a downward departure, that decision is not reviewable. UnitedStates v. Mejia , 309 F.3d 67, 70 (1st Cir. 2002). Appellate review is available for refusal to depart if the district court misunderstood the scope of its authority under the guidelines and mistakenlybel ieved that it lacked the discretion to depart. UnitedStates v. Rivera-Rodriguez , 318 F.3d 268, 275 (1st Cir. 2003). The departure was sought under the November, 2002 version of § 5K2.20, which states, in relevant part, "A sentence below the applicable guideline range may be warranted in an extraordinary

case if the defendant's criminal co nd uct constituted aberrant behavior." The commentary to the guideline defines "aberrant behavior" as "a single criminal occurrence or single criminal transaction that (A) was committed without significa nt p lanning; (B) was of limited duration; and (C) represents a marked deviation by the defendant from an otherwise law-abiding life." U.S. Sentencing Guidelines Manual § 5K2.20, cmt. n.1 (2002).

At the sentencing hearing, the district court made its initial ruling on Castellini's "aberrant behavior" departure motion by stating:

I don't think there is sufficient evidence for me to give a down ward departure for aberrant behavior, although . . . I think that the conduct involved was an extraordinary departure from what had been this man's life.-41- Myconce rn is that . . . that is not enough to permit me to find him having committedsomething because of aberrant behavior. Castellini then argued that t he court should grant the departure because it had found Castellini's behavior "to be an extraordinary departure." The district court responded: What I said to you is that I think that this is a departure in terms of his behavior. You know, that eigh t-month period, you know, is like a black hole in an oth erwis e reasonable life. But I don't believe that it adds up to the downward departure that you are talking about.

. . . . I don't think this really is a single criminal offense. I think that it is an episode.

. . . . [H]ere we ha d, a t least arguably, two offenses . . . eigh t months apart, both for $30,000. So it isn't one. It is not a single. From the quoted passages, it is clear that the district court understood that it had the authority to depart, but decided that departure was not warranted because there was insufficient evidence to justify it. In particular, the district court denied the departure because the multiple transactions in an elaborate scheme involving a network of offshore entities over an eight-month periodput it outside the purview of the single occurrence/transaction without advanced planning and of limited13 The November 2004 version of § 5K2.20 makes it clear that "a

fraudscheme generally would not meet [the] requirements [of § 5K2.20]" U.S. Sentencing Guidelines Manual § 5K2.20, cmt. n.2 (2004). -42- duration contemplated by the guideline. 13 See Rivera-Rodriguez , 318 F.3d at 275-76. That decision is not subject to review. B. The Blakely challenge

Castellini finally argues, for the first time on appeal, that his sentence should be vacated and the case remanded for resentencing because the jury did not make a factual determination regarding the amount of laundered funds attributable to him under the sentencing guidelines, as he contends is required under Blakely

v. Washington , 124 S. Ct. 2531 (2004). Because Castellini did not raise this argument before the district court, review is for plain

error. United States v. Morgan , 384 F.3d 1, 8 (1st Cir. 2004). To establish plain error, Castellini must demonstrate "(1) that an

error oc curre d (2) which was clear or obvious and which not only (3) affected [his] substantial rights, but also (4) seriously impairedthe fairness, integrity, or public reputation of judicial proceedings." United States v. Duarte , 246 F.3d 56, 60 (1st Cir. 2001). Under existing pre- Blakely First Circuit precedent, the amount of launderedfunds is a sentencing factor for determination by the court. See United States v. Robinson , 241 F.3d 115, 121 (1st Cir. 2001) ("[S]entence-enhancing facts still may be found by-43-

the judge under a preponderance-of-the-evidence standard as long as those facts do not result in a sentence that exceeds the original statutorymaximum."). "Because the trial judge actedin accordance with circuit precedent (not yet clearly established to be erroneous), we cannot say plain error occurred, and we need not proceed further." Morgan , 384 F.3d at 8. V. Castellini's convictions and sentence are affirmed .