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D ock e t 99-5332

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. e du/thir dc ir c uit_2000/201Filed September 18, 2000

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

NO. 99-5332

UNITED STATES OF AMERICA

v.

SANDRA WERT-RUIZ, a/k/a THE LADY Sandra Wert-Ruiz, Appellant

On Appeal From the United States District Court For the District of New Jersey (D.C. Crim. No. 96-00073-8) District Judge: Honorable Dickinson R. Debevoise

Argued: April 24, 2000

Before: BECKER, Chief Judge, WEIS and OAKES,* Circuit Judges.

(Filed: September 18, 2000)

EDNA B. AXELROD, ESQUIRE (ARGUED) 76 South Orange Avenue, Suite 305 South Orange, NJ 07079

Counsel for Appellant

___________________________________________________ ______________ * Honorable James L. Oakes, United States Circuit J udge for the Second Circuit, sitting by designation.ROBERT J. CLEARY, ESQUIRE

United States Attorney
GEORGE S. LEONE, ESQUIRE Assistant United States Attorney 970 Broad Street, Room 700 Newark, NJ 07102

NORMAN J. GROSS, ESQUIRE (ARGUED) Assistant United States Attorney United States Federal Building and
United States Courthouse 401 Market Street, Fourth Floor Camden, NJ 08101-2098

Counsel for Appellee

OPINION OF THE COURT

BECKER, Chief Judge.

Sandra Wert-Ruiz, the operator of a check cashing a nd money remitting agency, appeals her conviction for taking part in a conspiracy to launder drug money in viola tion of 18 U.S.C. S 1956(h). The District Court gave a will ful blindness charge--informing the jurors that they co uld convict Wert-Ruiz if they concluded that she had deliberately avoided learning that she was dealing with the proceeds of illegal activity and that the transacti ons were designed to conceal or disguise the nature or sourc e of those funds. Wert-Ruiz argues on appeal that: (1) t here was sufficient evidence to support a jury conclusion th at she had actual knowledge of the illegal source of the l aundered money, but not that she had willfully blinded herse lf to the funds' origin; and (2) the District Court therefore should not have given a willful blindness charge. We agree that there was sufficient evidence of actual knowledge, but note that the jury might have credited only portions of the government's evidence and concluded that willful bl indness
was afoot. Because there was sufficient evidence fr om which a jury could find willful blindness, we hold that the District Court properly charged the jury. We will t herefore
affirm Wert-Ruiz's conviction.

2In reaching our conclusion, we reject Wert-Ruiz's s ubtle

contention that so long as there is sufficient evid ence of actual knowledge, a willful blindness charge is at all events inappropriate. Rather, we follow our holding in Uni ted States v. Stewart, 185 F.3d 112, 126 (3d Cir. 1999) , that, assuming there to be sufficient evidence as to both theories, it is not inconsistent for a court to giv e a charge on both willful blindness and actual knowledge. Thi s is so because, if the jury does not find the existence of actual knowledge, it might still find that the facts suppo rt a finding of willful blindness. In view of our conclu sion, we need not reach the government's alternative content ion that an erroneous giving of a willful blindness instruct ion is per

se harmless error.1

I.

Sandra Wert-Ruiz earned a medical degree in the Dominican Republic. In 1986, she and her husband, Franklin Ruiz, moved to the United States. Wert-Rui z became a United States citizen in 1989. In 1991, We rt-Ruiz and her husband opened S&F Check Cashing and S&F
Associates. S&F 's main office was in West New York , New Jersey, and was managed by Wert-Ruiz, while Frankli n

___________________________________________________ ______________

1. Wert-Ruiz makes a number of additional arguments that we dispose of summarily. She asserts that the prosecutor made imp roper remarks during closing arguments on rebuttal. Because Wert- Ruiz's trial attorney failed to object to these statements, we review the m only for plain error and conclude that they fail to rise to that level. Wert-Ruiz also objects

to other statements made in the rebuttal that allegedl y implied that she and her counsel had colluded to produce false evide nce at trial. Having reviewed the statements, we do not find a clear imp lication of such conduct. At all events, Wert-Ruiz's attorney object ed, the District Court gave a cautionary instruction afterwards, and defen se counsel did not request a further remedy. Under the circumstances, we find no constitutional error. We also conclude, contrary to Wert-Ruiz's arguments, that she was not prejudiced by the gover nment's purported incorporation of evidence into leading questions an d that the government did not improperly vouch for Angel Rayo's credibili ty and bolster his testimony. Finally, in light of the preceding, we c onclude that there was not an accumulation of errors that combined to depr ive Wert-Ruiz of a
fair trial.

3Ruiz managed a branch in Guttenberg, New Jersey. S& F

Check Cashing only handled check cashing services, whereas S&F Associates provided additional services such as money orders, Western Union transmittals, bill payments, and phone card sales. Wert-Ruiz testified that the businesses were dealing with millions of dollar s annually, which included moving thirteen million do llars through Western Union money transmittals and over twenty-one million dollars through check cashing ac tivities
in 1994 alone.

In 1994, Wert-Ruiz's portion of the business became involved in laundering drug money. The conspiracy t ouched Wert-Ruiz through the business of money remitting, which is a legitimate financial service used to send fund s from one country to another. In a typical money remitting transaction an individual gives cash to a remitting agency in one country with direction that an individual in another country be paid. The remitter contacts a similar ag ency in the transferee country, provides the name of the fu nds' intended recipient, and transmits the funds. The re cipient then collects the money from the transferee agency. Because the funds entering the remitting system are in the currency of the transferor country while those paid out are in the currency of the transferee, the tangible mon eys received by the transferor remitting agency are not sent directly to the end recipient. Instead, they are so ld to parties who need that particular currency to conduc t their business (such as importers in foreign nations) in exchange for the currencies needed to pay out the remittance s.

Money remitting provides an avenue for placing curr ency into the banking system, making it a mechanism thro ugh which illegally obtained funds (like those acquired through drug trafficking) may be laundered. False receipts generated to record false remitting transactions create a pap er trail indicating that money sent abroad is "clean," when in fact the foreign agency gives the transferred funds to t he drug
traffickers. Transactions of this nature were at th e heart of the case against Wert-Ruiz. While there were no all egations that Wert-Ruiz was in any way involved with the act ual sale of illicit drugs, federal prosecutors contended tha t she was a participant in a conspiracy to use her business t o launder drug money.

4Wert-Ruiz's involvement with money launderers arose in

connection with an ongoing operation of Fabio Castr o and Angel Rayo, the owners of a money remitting service known
as International Services. In addition to conductin g legitimate transactions, International Services was laundering drug money. Because the volume of transf ers handled by International Services was potentially l arge enough to attract the attention of law enforcement, Rayo sought another agency to handle money transfers and asked Wert-Ruiz to become an agent of International Services. According to the government's evidence, W ert-Ruiz participated in the money laundering conspiracy by generating false receipts designed to conceal trans fers of money. Specifically, drug trafficking proceeds were delivered in cash form to Wert-Ruiz, who then prepared or dir ected the preparation of false remitting receipts. These efforts, in turn, created a paper trail that suggested that the money was entering the banking system through legitimate

channels.

After a time, Wert-Ruiz obtained her own license to function as a remitter, and began operating through a new corporation she formed named Latin American Service s ("LAS"). Wert-Ruiz continued to receive money acqui red through drug trafficking--often packed inside of gy m bags --and continued to prepare fraudulent receipts.

At the time of trial, Castro was a fugitive. Rayo t estified on behalf of the government under a plea agreement. WertRuiz did not dispute that money had been laundered through her business, but she denied knowing anythi ng about the other conspirators' intentions. The gover nment presented evidence that Wert-Ruiz and her employees handwrote thousands of fictitious receipts for cash delivered to LAS that was supposedly going to indiv iduals in the Dominican Republic. The government presented expert testimony that Wert-Ruiz attempted to disgui se her handwriting in preparing these receipts. Investigat ors testified that out of a sample of well over one hun dred receipts seized from Wert-Ruiz, they had been unabl e to find a single person identified on any of the recei pts, indicating that the receipts were false. At trial, Wert-Ruiz testified that she had prepared the forged receipts from

5actual receipts provided by International Services that

purportedly reflected real transactions. These latt er receipts were not produced at trial, and the government pres ented
evidence that Wert-Ruiz had never admitted to writi ng the forged LAS receipts during interviews with law enfo rcement
officials conducted after her arrest but before tri al.

Additional evidence established that the conspirato rs used codes in conducting phone conversations about aspects of the conspiracy. Though Wert-Ruiz was not privy to many of the codes, she knew that the conspirator s used the word "tarjetas" (Spanish for "cards") to mean m oney, and she was aware of their practice of dropping zer os when discussing sums of money, thus describing $10,000 a s $1,000.

A jury convicted Wert-Ruiz of violating 18 U.S.C. S 1956(h) (conspiracy to commit money laundering).2 She

___________________________________________________ ______________

2. The statute provides that "[a]ny person who cons pires to commit any offense defined in this section . . . shall be subj ect to the same penalties as those prescribed for the offense the commission of which was the object of the conspiracy." Id. The relevant portion of the money laundering statute implicated by this clause is 18 U.S.C. S 1956(a)(1), which provides for liability for:

Whoever, knowing that the property involved in afinancial transaction represents the proceeds of some form of unlawful activity, conducts or attempts to conduct su ch afinancial transaction which in fact involves the proce eds of specified

unlawful activity--

(A)(i) with the intent to promote the carryi ng on of specified unlawful activity; or

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

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

(i) to conceal or disguise the nature, the l ocation, the source,

the ownership, or the control of the proceeds of specified unlawful activity; or

(ii) to avoid a transaction reporting requir ement under State or Federal law[.]The statute provides a list of offenses that qualif y as "specified

unlawful activity," among them the sale or distribution of c ontrolled substances.

6received a six-year prison sentence and filed a tim ely notice

of appeal. The District Court had jurisdiction unde r 18 U.S.C. S 3231. We have appellate jurisdiction under 28

U.S.C. S 1291.

II.

At trial, the District Court instructed the jury on the
issue of willful blindness as follows:

When knowledge of the existence of a partic ular fact is an essential part of an offense, such kno wledge may
be established if a defendant is aware of a high probability of its existence, unless she act ually believes
that it does not exist.

So with respect to the issue of a defendant 's knowledge in this case, if you find from all the evidence beyond a reasonable doubt that the defendant deliberately and consciously tried to avoid learning that certain currency was the proceeds of some fo rm of illegal activity, and that the defendants de liberately and consciously tried to avoid learning that the transaction was designed in whole or in part to conceal or disguise the nature, location, source, ownership or c ontrol of the proceeds of the unlawful activity, you m ay treat such deliberate avoidance of positive knowle dge as the equivalent of knowledge.

I must emphasize, however, that the requisi te proof of knowledge on the part of a defendant cann ot be established by demonstrating she was neglige nt,
careless or foolish.

___________________________________________________ ______________

See id. S 1956(c)(7). Though knowledge that the fun ds have been obtained illegally is required, knowledge of what t he specified unlawful activity is is not, for the statute defines "knowin g that the property involved in a financial transaction represents the proceeds of some form of unlawful activity" as meaning that the person in volved "knew the property involved in the transaction represented pr oceeds from some form, though not necessarily which form, of activit y that constitutes a felony under State, Federal, or foreign law, regard less of whether or not such activity is specified in paragraph (7) [which defines the specified unlawful activities]." Id. S (c)(1)."

7Wert-Ruiz argues that the government adduced eviden ce

only of her actual knowledge of the conspiracy and its objects, and that there was insufficient evidence o f willful blindness to allow a jury to conclude that she had deliberately avoided learning about the illegal act ivities for
which her business was used. Because such evidence was absent, the argument continues, the instruction was unjustified, and had the effect of diluting the gov ernment's burden of proof by creating the risk of convicting Wert-Ruiz if the jury concluded that she merely should have k nown about the criminal activities. See United States v. Hilliard, 31 F.3d 1509, 1517 (10th Cir. 1994).

Our review of a challenge to the propriety of the w illful blindness instruction is plenary. See United States v. Stewart, 185 F.3d 112, 126 (3d Cir. 1999). In evalu ating the charge, we view the evidence and the inferences drawn therefrom in the light most favorable to the govern ment. See United States v. Sharpe, 193 F.3d 852, 871 (5th Cir. 1999).

A.

A willful blindness instruction is often described as sounding in "deliberate ignorance." See United Stat es v. One 1973 Rolls Royce, 43 F.3d 794, 807-08 (3d Cir. 1994 ). Such instructions must be tailored, as the District Cour t's was here, to avoid the implication that a defendant may be convicted simply because he or she should have kno wn of
facts of which he or she was unaware. Willful blind ness is not to be equated with negligence or a lack of due care, see id. at 809 n.13, for "willful blindness is a subjec tive state of mind that is deemed to satisfy a scienter requireme nt of knowledge," id. at 808. The instruction"must make c lear that the defendant himself was subjectively aware o f the high probability of the fact in question, and not m erely that

a reasonable man would have been aware of the probability." United States v. Caminos, 770 F.2d 36 1, 365 (3d Cir. 1985). If such a charge is supported by su fficient evidence, it is not inconsistent for a court to giv e a charge on both willful blindness and actual knowledge, for if the jury does not find the existence of actual knowledg e, it

8might still find willful blindness. See United Stat es v.

Stewart, 185 F.3d 112, 126 (3d Cir. 1999).

Wert-Ruiz does not challenge the legal adequacy of the instruction as it was worded, but rather the propri ety of giving it under the circumstances of her case.3 She urges that there was insufficient evidence of willful bli ndness to justify the instruction.

B.

Wert-Ruiz concedes that there was sufficient eviden ce to convict her of knowingly participating in the consp iracy. As noted above, however, she maintains that none of th e government's evidence supported a willful blindness instruction. Wert-Ruiz contends that each piece of the government's evidence can be interpreted in only on e of two ways: either she was a knowing participant in the conspiracy (if the government's evidence is believe d) or she was an unknowing innocent who became ensnared in it (if the government's evidence is not believed). Mindful that we must interpret each piece of evidence (and draw all supportable inferences) in favor of the government, and mindful that the jury was entitled to decide that o nly part of the government's evidence was credible, we concl ude that Wert-Ruiz's challenge must fail.

___________________________________________________ ______________

3. Wert-Ruiz does, however, make an additional lega l challenge to the instruction. She argues that the instruction was er ror under the circumstances because it is impossible to be willfu lly blind to participation in a conspiracy. Citing United States v. Scotti, 47 F.3d

1237 (2d Cir. 1995), she maintains that it is "logically impossible for a defendant to intend and agree to join a conspiracy if [s]he does not know
that it exists." Id. at 1243. This contention floun ders on our ruling to

the contrary in United States v. Anderskow, 88 F.3d 245 , 254 (3d Cir. 1996), which affirmed a conspiracy conviction where "the j ury had ample evidence with which to conclude that, at a minimum, [the defendant] had willfully blinded himself to the fact that" a c riminal conspiracy
existed.

91.

a.

Wert-Ruiz first points to the testimony of Angel Ra yo. At trial Rayo claimed to have recruited Wert-Ruiz to participate in illegal laundering activities. Rayo testified through an interpreter that he recruited Wert-Ruiz to pose as an agent of International Services by specifical ly asking her to engage in activities to support the "illegal aspects" of International Services' transactions, stating "I al so propose is that she do appear as an agent where transfers w ould be done that were not real in order to support the ill egal aspects of International Services." Rayo also testi fied that Wert-Ruiz subsequently generated false receipts for nonexistent money remitting transactions to create a paper trail that would make sending drug money abroad app ear legal.

Wert-Ruiz characterizes each of these portions of R ayo's testimony as evidence of actual knowledge, but not willful blindness. It is true that a jury could find from t his evidence that Wert-Ruiz knew she was participating in a conspiracy to launder funds that had been generated by illegal activities. It is essential, however, to re member the precise contours of the instruction. The District C ourt specifically focused the willful blindness instruct ion on the source of the laundered funds and the purpose of th e transactions in which she engaged. To be sure, the evidence recounted above, if believed by the jury, could
have been used to conclude that Wert-Ruiz knew the illegal source of the money and the precise purpose of her activities. The evidence is not, however, inconsist ent with the conduct of an individual who willfully blinded herself
from the source of the funds with which she dealt a nd the
nature of those activities.

"Illegal aspects" (the wording employed by Rayo in his testimony) is a vague term, encompassing a range of activities that may not have involved the launderin g of drug money. Wert-Ruiz could have knowingly generated the false receipts in exchange for the commissions she receiv ed while willfully blinding herself to the source of the cas h or the

10purpose of the transactions even if she knew her ac tivities

had "illegal aspects." Indeed, Rayo himself testifi ed that he had been willfully blind about the funds that he wa s laundering for quite some time. When asked what he understood about the source of the funds, he stated "I never asked the question. The truth is I did not wa nt to know." Similarly, Rayo testified that Wert-Ruiz nev er asked him about the source of the money that she would be transferring. A jury could have credited both Wert- Ruiz's denial of knowledge and the evidence of her partici pation in the concealment activities, concluding that the rea son that
Wert-Ruiz did not know of the source of the illicit funds was her deliberate ignorance of the circumstances surrounding her activities. Willful blindness instr uctions have previously been upheld under similar circumsta nces. See United States v. Gonzales, 90 F.3d 1363, 1371 ( 8th Cir. 1996) (upholding willful blindness instruction wher e the defendants, who were charged with laundering drug m oney, failed to inquire about the source of the money and used
incorrect names and addresses on documents when wir ing money).

In short, a jury could have credited Rayo's testimo ny as implying that Wert-Ruiz knew that she was being inv ited to engage in activities designed to conceal the source of certain moneys without being specifically told the source of
the funds. The fact that Wert-Ruiz did not ask the natural follow-up question to determine the source of those funds could be reasonably considered by a jury to be evid ence of willful blindness, especially when combined with th e additional evidence discussed below.

Finally, we must remember that the jury was entitle d to disbelieve all or part of Rayo's testimony. Thus, e ven if we were to agree with Wert-Ruiz that Rayo's testimony only supports a finding of actual knowledge, there was o ther evidence in the record on which a jury could have r elied to find that Wert-Ruiz had willfully blinded herself t o the illegal source of the funds she was transferring.

b.

Wert-Ruiz points also to the testimony of Yuri Acos ta, who testified that he delivered bags of money to We rt-Ruiz

11and claimed that Wert-Ruiz advised him that, if he were

ever caught with the funds, he should say that he w as bringing money from International Services or anoth er cashier. Wert-Ruiz claims that this is evidence of knowledge of illegality. Again, in our view, the evidence ind icates knowledge of concealment, but is not exclusively ev idence of knowledge of the illicit source of the money. In light of Wert-Ruiz's denial that she ever knew the illegal s ource of the funds, a jury could accept the denial and concl ude that her conduct evidenced willful blindness. Further, a s with Rayo's testimony, because the jury could selectivel y discredit some of the evidence in the prosecution's case, the existence of evidence that points to actual knowled ge does not preclude consideration of other evidence that p oints to a finding that Wert-Ruiz was wilfully blind to the source of the drug money.

c.

The ability of the jury to have discounted aspects of the government's case is important in light of the last piece of evidence that, according to Wert-Ruiz, demonstrates that her culpability was either knowing or innocent, but not deliberately ignorant. After Wert-Ruiz's arrest, sh e spoke to a customs agent who testified that Wert-Ruiz descri bed her activities and admitted that she received bags of m oney in such large volume that she herself was suspicious a bout it. The agent testified that after he asked her if she thought the money came from the sale of narcotics, "[Wert-R uiz] replied that she was an educated woman, and where e lse would money come from in that amount."

This statement, if credited by the jury, would inde ed suggest actual knowledge and not willful blindness. Still, in juxtaposition with Wert-Ruiz's claims at trial not to have known the source of the funds, it could arguably be viewed as an example of willful blindness--in other words, she never asked questions while participating in the co nspiracy,

but when the truth was revealed she was not at all surprised about what really had happened.

2.

Wert-Ruiz further claims that the government's summation confirms that the evidence previously rec ounted

12pertained only to actual knowledge. We do not agree . She

bases her argument on segments of the summation whe re the prosecution emphasized Rayo's testimony that he told Wert-Ruiz that she would be a pretend agent for
International Services and the evidence that Wert-R uiz created fake receipts for transactions that never t ook place. Again, we do not believe this evidence supports onl y an actual knowledge charge, as it could be taken to demonstrate either that Wert-Ruiz figured out that the funds with which she was dealing came from an illeg al source or that she willfully avoided drawing that i nference

and therefore never "knew" that to be the case. Mor eover, as Wert-Ruiz concedes, the government did indeed ar gue that even if the jury accepted some of the defendan t's arguments, the evidence indicated that she still"cl os[ed her] eyes to what was obviously illegal."

3.

Even if some of the evidence discussed above tends to be consistent only with a finding of actual knowledge, the government presented ample additional evidence from
which a reasonable inference of willful blindness c ould be drawn. The government points out that evidence was introduced demonstrating that Wert-Ruiz knew that i n many of the transactions the co-conspirators would refer to large dollar amounts by dropping digits, but still she did not raise questions as to this practice. Similarly, there is evidence that she and members of the conspiracy wou ld refer to money by the code word "tarjetas" (the Spa nish word for cards). A reasonable jury, having discount ed evidence of Wert-Ruiz's actual knowledge of the con spiracy or its objects, could rationally conclude that the practice of using code words for transactions and minimizing do llar amounts--not to mention her receipt of large amount s of cash in gym bags--must have alerted her to the poss ibility that her money transfer activities were actually in service of a money laundering operation, and that her failure to inquire further evinced willful blindness. This is not to say that Wert-Ruiz did not proffer alternative explanat ions, but the verdict indicates that the jury did not credit them. Because the evidence supports that verdict, we will not second guess that decision.

13III.

Failing to uphold the District Court's instruction under these facts could carry harmful results. There was little direct evidence that Wert-Ruiz specifically knew th at she was helping to launder the proceeds of illegal acti vity--most of the evidence in this regard was circumstantial. It would seem that a reasonable person could have drawn few other conclusions given the nature of the transactions, y et WertRuiz claimed not to have known that she was engagin g in money laundering activity. If Wert-Ruiz deliberatel y avoided learning the source of the funds, she could have ho nestly claimed to have lacked knowledge. In this light, a willful blindness instruction served the important purpose of preventing Wert-Ruiz from evading culpability if th e jury
concluded that due to a willful refusal to connect the dots, Wert-Ruiz actually did not know of the purposes of her money laundering activities. See United States v. S harma, 190 F.3d 220, 231 (3d Cir. 1999) (approving instruc tion when jury could have inferred the defendant's lack of knowledge, and the willful blindness instruction"en sured that a juror who believed that a defendant turned a blind eye toward his co-defendant's conduct would not vot e to acquit the willfully blind defendant"). Deliberate ignorance cannot become a safe harbor for culpable conduct.

In sum, we conclude that a reasonable jury could ha ve concluded that Wert-Ruiz deliberately avoided learn ing about the source of the enterprise's funds. Because we so hold, there is no need to address the government's contention that the giving of a willful blindness i nstruction
when there is insufficient evidence of the same is per se harmless error. The judgment of the District Court will be
affirmed.

A True Copy:

Teste:

Clerk of the United States Court of Appeals
for the Third Circuit

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