UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v. No. 97-4129

ARUNA MATAI,

Defendant-Appellant.

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

No. 97-4130

SANDEEP MATAI, a/k/a Nick Matai,

a/k/a Sondi Matai,

Defendant-Appellant.

Appeals from the United States District Court

for the Eastern District of North Carolina, at Raleigh.

James C. Fox, District Judge.

(CR-96-8-F)

Argued: April 10, 1998

Decided: February 10, 1999

Before MOTZ, Circuit Judge, STAMP, Chief United States District

Judge for the Northern District of West Virginia, sitting by

designation, and DOUMAR, Senior United States District Judge for

the Eastern District of Virginia, sitting by designation.

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Affirmed by unpublished per curiam opinion.

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COUNSEL

ARGUED: Joseph Blount Cheshire, V, CHESHIRE & PARKER,

Raleigh, North Carolina, for Appellants. Scott L. Wilkinson, Assistant

United States Attorney, Raleigh, North Carolina, for Appellee. ON

BRIEF: Janice McKenzie Cole, United States Attorney, Anne M.

Hayes, Assistant United States Attorney, Raleigh, North Carolina, for

Appellee.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See

Local Rule 36(c).

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OPINION

PER CURIAM:

Aruna Matai and Sandeep Matai appeal their convictions in the district court on charges of credit card fraud and money laundering. They

also appeal the district court's order directing forfeiture of the inventory of two stores owned by Aruna Matai. Finding no error, we

affirm.

I.

On October 28, 1996, Aruna Matai and Sandeep Matai were convicted of conspiracy to commit credit card fraud, credit card fraud,

and money laundering in violation of 18 U.S.C. §§ 371, 1029, and

1956. Included in that verdict was a special verdict of forfeiture of

$11,284.55 in currency and the inventories of Home Boys of New

York and Dan Hills Clothing store, the two Raleigh, North Carolina

clothing stores owned by Aruna Matai and operated by her and

Sandeep Matai, her son. On November 13, 1996, the district court

denied a motion for judgment notwithstanding the verdict filed by

Aruna Matai.

Evidence introduced at the trial showed that stolen credit cards

were presented and used at the clothing stores owned and operated by

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the appellants between July 1993 and July 1994. The resulting sales

amounted to $11,284.55. Evidence also established that Aruna Matai

deposited the transaction slips produced through the use of the stolen

credit cards into a merchant account at Wachovia Bank. The deposit

slips from the stolen credit cards were then commingled with the

deposits of other cash and checks received at the Matais' stores. Also,

the Matais drafted checks on the merchant account in an effort to disguise the illegal source of the funds obtained from use of the stolen

credit cards.

In January 1994, Steve Holloman, a branch manager at Wachovia

Bank, met with Aruna Matai to warn her about what he believed to

be unusually large transactions for the business typically done at

Home Boys of New York and Dan Hills. At that meeting, Holloman

reminded Aruna Matai that she should compare signatures on the

cards with the signatures made on the transaction slips.

Individuals who had stolen the credit cards used at the appellants'

stores testified that they presented the stolen cards to Sandeep Matai,

occasionally to Aruna Matai, or to both of them. After presentation

of the stolen cards, the Matais permitted the credit card thieves to

select and take clothing from either Home Boys of New York or Dan

Hills. This clothing was then charged to the stolen credit cards. The

amount charged to the stolen credit cards was generally higher than

the value of the clothing given to the credit card thieves as their "reward."

The credit card thieves also testified that they were assisted in their

use of the stolen credit cards by David Morgan and Gregory Woodard, employees of the Matais. The thieves testified that the Matais

rarely checked the signatures on the transaction slips, and that, when

they did, they checked only to ensure that the signatures were "similar

enough" to the signatures on the cards. Although several of the credit

card thieves testified that they dealt primarily with Sandeep Matai,

several of these witnesses also had significant contact with Aruna

Matai.

Witness Ronald Brice testified, for example, that after presenting

a stolen card at one of the Matais' stores, Aruna Matai told Brice that

he should bring stolen cards to the store after 5:00 p.m. when the

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employees would be gone. Witness Jay Mays testified that he dealt

both with Sandeep and Aruna Matai, but that Aruna Matai was more

likely to make him re-sign a signature on a transaction slip so that it

would more closely resemble the signature on the credit card. Additionally, the Matais' former employee, David Morgan, testified that

when stolen credit cards were brought into the store, either Sandeep

or Aruna Matai would run the credit card through the processing

machine to determine whether the card had been reported stolen. If

the card was still valid, charges would be made to the stolen card.

At the trial, there was no question that stolen credit cards were used

at the Matais' stores and that the use of those cards was unauthorized.

The Matais did not dispute that transaction slips from the stolen cards

were deposited into the merchant checking account of Home Boys of

New York and that withdrawals were made from that account. Furthermore, there was no dispute that the Matais compensated, with

merchandise, those persons who brought the stolen credit cards to the

stores. The only significant issue at trial was the knowledge of the

Matais.

The government alleged that, at the time the cards were presented

in the stores, the Matais knew that the cards had been stolen. They

claimed that they did not know of the unauthorized status of the credit

cards until after the transactions had been made and they were

informed by their bank that the cards had been stolen.

II.

Aruna and Sandeep Matai make three arguments on appeal. They

argue that they are entitled to a new trial because the district court (1)

wrongfully issued a willful blindness instruction to the jury, and (2)

failed to define reasonable doubt when it charged the jury. The Matais

also assert that there was insufficient evidence to support a finding

that their stores' inventory was subject to forfeiture.

At trial, Aruna Matai objected to the willful blindness instruction

and to the district court's decision not to define the term "reasonable

doubt." Sandeep Matai did not object on either ground, and he raises

those issues before this Court for the first time. Accordingly, the

"harmless error" standard governs review of Aruna Matai's claims on

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those arguments, Fed. R. Crim. P. 52(a), and review of Sandeep

Matai's claims is appropriate under the "plain error" standard, Fed. R.

Crim. P. 52(b).

The Matais first argue that the district court erred in instructing the

jury on the concept of willful blindness. A willful blindness instruction allows a "jury to impute the element of knowledge to [a] defendant if the evidence indicates that he purposely closed his eyes to

avoid knowing what was taking place around him." United States v.

Schnabel, 939 F.2d 197, 203 (4th Cir. 1991). A willful blindness

instruction is proper where the evidence presented supports both

actual knowledge and deliberate ignorance on the part of a defendant.

United States v. Abbas, 74 F.3d 506, 513 (4th Cir.), cert. denied, 517

U.S. 1229 (1996). A district court must ensure, however, that a jury

is not permitted to infer a defendant's guilty knowledge based upon

a showing of mere careless disregard or mistake. United States v.

Guay, 108 F.3d 545, 551 (4th Cir. 1997); United States v. Mancuso,

42 F.3d 836, 846 (4th Cir. 1994). In the money laundering context,

we have stated that the knowledge element of the crime may be satisfied by a showing that the defendant either knew, or was "wilfully

blind to the fact, that the transaction was designed for an illicit purpose." United States v. Campbell, 977 F.2d 854, 858 (4th Cir. 1992),

cert. denied, 507 U.S. 938 (1993).

Neither of the Matais contested the accuracy of the willful blindness instruction, but only whether, under the facts in this case, it was

appropriate to give the instruction. Aruna Matai contends that the

willful blindness instruction was erroneously given because there was

no evidence of deliberate ignorance, but instead, only of actual

knowledge on her part. As we stated in Abbas, however, "[a] willful

blindness instruction is appropriate when the defendant asserts a lack

of guilty knowledge but the evidence supports an inference of deliberate ignorance." Abbas, 74 F.3d at 513 (quoting United States v.

Gruenberg, 989 F.2d 971, 974 (8th Cir.), cert. denied, 510 U.S. 873

(1993)).

Aruna Matai asserted a lack of knowledge that the stolen credit

cards were being presented or used at her stores. The evidence indicates, however, that she was present at her stores on several occasions

when the stolen credit cards were used. Testimony also suggested that

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on at least several occasions she had a role in processing the cards.

Furthermore, Aruna Matai was responsible for the financial management of her stores, including the deposit of slips generated during the

use of credit cards at Home Boys of New York and Dan Hills. Many

of the illegal transactions involved purchases of substantially greater

amounts than the typical purchase from those stores. Moreover, her

failure to act following her conversation with Steve Holloman of

Wachovia Bank, who spoke with her on the issue of questionable

activity in her merchant's account, suggests a deliberate avoidance of

knowledge of the use of stolen credit cards.

The district court properly concluded that evidence existed both of

Aruna Matai's actual knowledge and of her deliberate ignorance of

the illegal activity that occurred at her stores. Thus, the district court's

inclusion of a willful blindness instruction was appropriate as to

Aruna Matai. See Abbas, 74 F.3d at 513. Also, based upon the convincing evidence of Sandeep Matai's participation in the credit card

fraud and, therefore, of his actual knowledge of that activity, we cannot say that the court committed "plain error" in instructing the jury

on willful blindness as to him. The evidence supports the jury's findings on the knowledge element of the crimes of which he was convicted.

The Matais' next assignment of error, comprised of two separate

but related arguments, focuses on the district court's refusal to define

reasonable doubt in its final jury instructions. The Matais contend that

the court erred by failing to include further instruction on reasonable

doubt after earlier in the trial stating that it would do so. The Matais

note that, in the district court's preliminary instructions to the jury,

the court stated that it would give "further instruction on [reasonable

doubt] later." During the parties' review of the proposed jury charge,

counsel for Aruna Matai noted that the court's charge did not include

a definition of "reasonable doubt." The court denied her request to

include such a definition.

The Matais also contend that, although this Court has expressed its

disapproval of the inclusion of an explanation as to reasonable doubt,

this Court has not prohibited such an explanation. According to the

Matais, a district court has some discretion to define reasonable

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doubt, and, in this case, the district court abused that discretion by

declining to do so.

The Matais correctly note that, as a rule, we caution district courts

against defining reasonable doubt. See, e.g., United States v. Oriakhi,

57 F.3d 1290, 1300 (4th Cir.), cert. denied, 516 U.S. 952 (1995);

United States v. Ricks, 852 F.2d 885, 894 (4th Cir. 1989), cert.

denied, 493 U.S. 1047 (1990). We do not agree, however, with the

Matais' argument as to the discretionary authority that district courts

possess to define reasonable doubt. Instead, simply because our cases

have not absolutely prohibited a district court from defining reasonable doubt, the district courts are not bound to instruct a jury on reasonable doubt simply because a party requests that instruction. See

United States v. Reives, 15 F.3d 42, 44 (4th Cir.), cert. denied, 512

U.S. 1207 (1994) ("We have never found a refusal of a party's request

for a clarifying instruction to be error."). Furthermore, the only exception that we have recognized to the general rule against defining reasonable doubt is in the context of responding to a jury's specific

request for a definition. Reives, 15 F.3d at 45-46.

In this case, the district court recognized, and adhered to, our

strong policy against a reasonable doubt instruction. The Matais had

no right to a jury instruction on reasonable doubt even if they believed

that the court planned to issue such an instruction. Accordingly, this

Court concludes that the district court did not err with respect to either

of the Matais on this issue.

Finally, the Matais argue that under 18 U.S.C. § 982(a)(1) there

was insufficient evidence to support the jury's special verdict on forfeiture of the inventory of Home Boys of New York and Dan Hills

Clothing. Section 982(a)(1) states that, "in imposing sentence on a

person convicted of an offense in violation of [18 U.S.C. § 1956] . . .

[a court] shall order that the person forfeit to the United States any

property, real or personal, involved in such offense, or any property

traceable to such property." 18 U.S.C. § 982(a)(1).

The Matais argue that no evidence showed that the store inventories were "involved in" the money laundering scheme. The Matais

also contend that the court's instruction that forfeiture could be

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ordered if the jury found that the inventories "facilitated" the money

laundering was improper under the meaning of § 982(a)(1).

In United States v. Schifferli, 895 F.2d 987 (4th Cir. 1990), this

Court held that, under the forfeiture provision at 21 U.S.C.

§ 881(a)(7), a dentist's office building was forfeitable following the

dentist's conviction for conspiracy to distribute and dispense illegally

certain prescription drugs. That section makes subject to forfeiture

"[a]ll real property . . . used . . . to facilitate the commission of" a violation of Title 21 of the United States Code that is punishable by more

than a year of imprisonment. 21 U.S.C. § 881(a)(7). The Court went

on to state that "facilitation" required that there be a "`substantial connection between the property and the underlying criminal activity.'"

Schifferli, 895 F.2d at 989 (quoting United States v. Santoro, 866 F.2d

1538, 1542 (4th Cir. 1989)). Furthermore, "`facilitate' implies that the

property need only make the prohibited conduct `less difficult or

"more or less free from obstruction or hindrance."'" Id. at 990 (quoting United States v. Premises Known as 3639-2nd St., N.E., Minneapolis, Minnesota, 869 F.2d 1093, 1096 (8th Cir. 1989)).

Other courts have borrowed Schifferli's construction of "facilitate"

in construing 18 U.S.C. § 981(a)(1), the civil forfeiture analog to

§ 982(a)(1). See, e.g., United States v. All Monies ($477,048.62) in

Account No. 90-3617-3, Israel Discount Bank, New York, New York,

754 F. Supp. 1467, 1473 (D. Haw. 1991); United States v. Certain

Funds on Deposit in Account No. 01-0-71417, Located at the Bank of

New York, 769 F. Supp. 80, 84 (E.D.N.Y. 1991). In All Monies, the

court found that, although § 981(a)(1) does not expressly include the

word "facilitate," it was reasonable to conclude that "property

involved in" included property that "facilitated" illegal money laundering. All Monies, 754 F. Supp. at 1473. As part of a further analytical development, several courts that have interpreted § 982 have

relied on § 981 case law. See United States v. Tencer, 107 F.3d 1120,

1134 n.5 (5th Cir. 1997) (citing United States v. Voigt, 89 F.3d 1050,

1087 (3d Cir.), cert. denied, ___ U.S. ___, 117 S. Ct. 623 (1996)).

In this case, we, also, look to the foundation set in Schifferli. The

reasoning in that case and in the other cases cited above is persuasive.

In fact, those cases justify our conclusion that, under § 982(a)(1),

"property involved in" criminal activity includes property that is sub-

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stantially connected to that activity, in that it furthered, facilitated, or

aided in the commission of the activity. As a result, property that is

substantially connected to the commission of a money laundering

offense, such that it assisted those convicted of the offense in committing the crime, is forfeitable under § 982(a)(1).

We believe that the evidence at trial proved a substantial connection between the inventories of Home Boys of New York and Dan

Hills Clothing and the money laundering offense. The Matais used the

inventories of these stores to reward their employees and the credit

card thieves for their respective roles in procuring the stolen credit

cards, which provided the mechanism for the money laundering

scheme. The fact that store employees and the credit card thieves

received store merchandise charged to the credit cards, but worth

much less than the amounts billed to the cards, permitted additional

funds to be laundered. Also, the use of the stores for the credit card

fraud and money laundering operation provided a facade of respectability and lawfulness to the conduct that occurred within.*

In summary, we believe that the government produced substantial

evidence to support a finding of forfeiture of the inventories of the

Matais' stores. The forfeited property need not have been "indispensable" to the commission of a crime as long as it played a significant

role in the prohibited activity. Schifferli, 895 F.2d at 990. Accordingly, we find that the district court's forfeiture order was proper.

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*After this appeal was filed, the Supreme Court decided United States

v. Bajakajian, 118 S. Ct. 2028 (1998). There, the Court held that a criminal forfeiture under § 982(a)(1) that was"grossly disproportional" to the

gravity of the harm violated the Excessive Fines Clause of the Constitution. Id. While the record does not reveal the exact value of the forfeited

inventory of clothing, it certainly does not exceed $500,000, the fine

available for violation of the money laundering statute. See 18 U.S.C.

§ 1956(a). The scheme continued for over a year and involved nine

stolen credit cards. Furthermore, while the amount of monetary harm

caused by the credit card fraud scheme until the time of arrest was only

approximately $11,000, there is little doubt that the defendants would

have continued the fraudulent scheme had they not been caught. We find,

therefore, that the value of the forfeited goods was not grossly disproportional to the gravity of the fraud.

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III.

For the reasons stated above, the district court did not err in

instructing the jury on willful blindness, nor did it err by refusing to

define reasonable doubt when charging the jury. Furthermore, the district court's forfeiture order regarding the inventories of the two stores

owned by Aruna Matai rests upon sufficient evidence.

AFFIRMED

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