2001 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

8-7-2001

United States v. Omoruyi

Precedential or Non-Precedential:

Docket 00-4330

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Recommended Citation

"United States v. Omoruyi" (2001). 2001 Decisions. Paper 175.

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Filed August 7, 2001 

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

No. 00-4330 

UNITED STATES OF AMERICA 

v. 

AUSTIN O. OMORUYI, 

a/k/a 

Charles Oloro 

a/k/a 

Bobby Pierce 

 Austin O. Omoruyi, 

 Appellant 

On Appeal from the United States District Court 

for the Middle District of Pennsylvania 

(Criminal No. 00-00103-1) 

District Judge: Honorable Sylvia H. Rambo 

Argued July 11, 2001 

BEFORE: SLOVITER, ALITO, and GREENBERG, 

Circuit Judges 

(Filed: August 7, 2001) 

 James V. Wade 

 Federal Public Defender 

 Thomas A. Thornton (argued) 

 Assistant Federal Public Defender 

 100 Chestnut Street, Suite 306 

 Harrisburg, PA 17101 

 Attorneys for Appellant 
 David M. Barasch 

 United States Attorney 

 Kim Douglas Daniel 

 Assistant United States Attorney 

 Theodore B. Smith (argued) 

 Assistant United States Attorney 

 P.O. Box 11754 

 Harrisburg, PA 17108 

 Attorneys for Appellee 

OPINION OF THE COURT 

GREENBERG, Circuit Judge. 

This matter comes on before this court on Austin O.

Omoruyi's appeal from a final judgment of conviction and 

sentence entered on December 12, 2000, on a 14-count 

indictment charging him with mail fraud affecting a

financial institution and money laundering. Omoruyi pled 

guilty to the mail fraud counts and does not challenge his 

conviction or sentence on those counts. Rather, he limits 

his challenge to his conviction and sentence for money 

laundering, arguing that the evidence was insufficient to 

establish that he had committed that crime or, 

alternatively, that the district court erred by applying the 

money laundering rather than the fraud sentencing 

guidelines in calculating his sentence. Because we find that 

neither of Omoruyi's contentions has merit, we will affirm 

his conviction and sentence in all respects. 

I. BACKGROUND 

In February 1999, a person not known to the authorities 

stole seven blank "convenience checks" attached to the 

bottom of First USA credit card statements from the mail in 

Texas. Later, in April 1999, a similarly unknown person 

stole three blank American Express convenience checks 

from the mail in New York. 

In approximately March and April 1999, Omoruyi opened 

three savings accounts at banks in the Middle District of 

 2 
Pennsylvania in the names of "Charles Oloro" or "Robert 

Pierce." Thereafter, all ten of the stolen checks were made 

payable to Pierce or Oloro in amounts varying between 

$5,100 and $9,890, and deposited in the savings accounts, 

nine via the mail and the tenth at a teller's window.1 Later, 

on May 6, 1999, a counterfeit commercial check drawn 

against a law firm's account at a New York City bank was 

mailed to one of the banks for deposit, but the bank never 

credited the account for the proceeds of the check because 

it was suspicious of the transaction. 

After the banks credited the accounts with the deposits, 

Omoruyi began withdrawing funds from the accounts via 

automatic teller machine ("ATM") and teller window 

withdrawals.2 Most of the ATM withdrawals took place in 

New York and New Jersey, while most of the teller window 

withdrawals took place in Pennsylvania. 

Ultimately, postal inspectors determined that Omoruyi 

was "Robert Pierce" and "Charles Oloro." Accordingly, they 

established a surveillance on a Brooklyn mail drop Omoruyi 

had opened. When Omoruyi arrived at the mail drop on 

June 1, 1999, the inspectors arrested him. 

Following Omoruyi's arrest, the government first held him 

for prosecution in the United States District Court for the 

Southern District of New York on the charge of making his 

third illegal entry into the United States. On February 2, 

2000, based on a conviction predicated on his plea of 

guilty, that court sentenced him to 51 months 

incarceration. Meanwhile, on July 21, 1999, postal 

inspectors filed a complaint in the Middle District of 

Pennsylvania charging Omoruyi with mail fraud. On March 

29, 2000, a grand jury returned a 14-count indictment, 

charging Omoruyi with six counts of mail fraud affecting a 

financial institution and eight counts of money laundering. 

The six counts of mail fraud stemmed from the mailing of 

_________________________________________________________________ 

1. The Government states the deposits totaled $77,626, while Omoruyi 

states the total deposits were $80,424. The discrepancy is not material 

to our disposition of this case. 

2. Omoruyi admits he withdrew $33,900 from these accounts, while the 

Government contends he withdrew almost $70,000. The parties do not 

suggest that the discrepancy is material here. 

 3 
the counterfeit check as well as five of the ten checks to 

banks in the Harrisburg area. The money laundering 

counts were based on eight teller window withdrawals by 

Omoruyi, utilizing false identification, at Harrisburg-area 

banks. 

On June 8, 2000, Omoruyi pled guilty to the mail fraud 

counts and submitted to a bench trial on the money 

laundering counts. The trial was premised almost entirely 

upon stipulated testimony and exhibits establishing that 

Omoruyi "opened [three] savings accounts and withdrew 

funds using the false names under which the savings

accounts were established." Appellant's Br. at 6. After the 

court took the matter under advisement, on June 19, 2000, 

it found Omoruyi guilty on all eight money laundering 

counts. 

On December 11, 2000, the court sentenced Omoruyi to 

63 months incarceration on each mail fraud and money 

laundering count followed by three years of supervised 

release on each of these counts, and required him to pay 

$1,400 in special assessments and restitution in the 

amount of $31,209. The court ordered that the sentences 

run concurrently with each other as well as concurrently 

with Omoruyi's 51-month sentence imposed in the 

Southern District of New York. Thereafter, Omoruyi timely 

appealed to this court. 

II. DISCUSSION 

The district court had original jurisdiction over offenses 

against the United States pursuant to 18 U.S.C.S 3231. We 

have jurisdiction over an appeal of a final decision by a 

district court pursuant to 28 U.S.C. S 1291 and over an 

appeal of a final sentence in a criminal case pursuant to 18 

U.S.C. S 3742(a). 

A. Validity of the Money Laundering Conviction 

Omoruyi contends first that there was insufficient 

evidence to establish the elements of money laundering 

because he did not conduct a financial transaction with 

"proceeds" of the mail fraud. He argues that the mail fraud 

was not complete, and therefore did not yield "proceeds" 

 4 
until he took possession of the cash credited to the 

accounts. Thus, in his view, the cash withdrawals could not 

serve as the basis for the money laundering counts. On this 

point, to the extent that the appeal involves legal

determinations we exercise plenary review, but when the 

sufficiency of the evidence is challenged, we review the 

record to determine if there was substantial evidence to 

support the verdict. See United States v. Conley , 37 F.3d 

970, 975 (3d Cir. 1994); United States v. Pungitore, 910 

F.2d 1084, 1129 (3d Cir. 1990).3 

On this appeal, we are concerned with the construction 

of 18 U.S.C. S 1956(a)(1) which defines illegal money 

laundering as: 

 Whoever, knowing that the property involved in a 

 financial transaction represents the proceeds of some 

 form of unlawful activity, conducts or attempts to 

 conduct such a financial transaction which in fact 

 involves the proceeds of specified unlawful activity-- 

 (A)(i) with the intent to promote the carrying on of 

 specified unlawful activity; or 

 . . . 

 (B) knowing that the transaction is designed in whole 

 or in part -- 

 (i) to conceal or disguise the nature, the location, the 

 source, the ownership, or the control of the proceeds of 

 specified unlawful activity . . . . 

Accordingly, section 1956(a)(1) sets forth the four elements 

of a money laundering offense: (1) an actual or attempted 

financial transaction; (2) involving the proceeds of specified 

unlawful activity; (3) knowledge that the transaction 

involves the proceeds of some unlawful activity; and (4) 

either an intent to promote the carrying on of specified 

unlawful activity or knowledge that the transactions were 

designed in whole or in part to conceal the nature, location, 

source, ownership, or control of the proceeds of specified 

_________________________________________________________________ 

3. In fact, the principles applicable to the validity of the conviction 

are 

essentially legal in character. 

 5 
unlawful activity.4 See id. ; see also United States v. Morelli, 

169 F.3d 798, 803 (3d Cir.), cert. denied, 528 U.S. 820, 120 

S.Ct. 63 (1999). 

In Conley, 37 F.3d at 978, we considered whether the 

deposit of illegal gambling proceeds could support a 

conviction for the money laundering object of a conspiracy. 

There the defendant argued that the government failed to 

establish the essential elements of money laundering 

because the conduct upon which the government based the 

charge was essentially the same as that supporting the 

illegal gambling charges. See id. We explained the 

defendant's contention as follows: 

 McGrath contends before us that a wide variety of 

 transactions involving the money placed into the video 

 poker machines is necessarily part of the illegal 

 gambling business, including collecting and counting 

 money, dividing up money, transferring and 

 transporting money, depositing money into banks and 

 withdrawing money from banks. McGrath contends 

 that this same conduct cannot be properly alleged to 

 be money laundering. 

Id. We disagreed with the defendant's contentions. See id. 

at 978-79. In doing so, we acknowledged that "[o]bviously, 

whenever a defendant makes money from criminal activity 

he has something to do with it," and that "Congress did not 

enact money laundering statutes simply to add to the 

penalties for various crimes in which defendants make 

money." Id. at 979. But, we found that section 1956(a)(1) 

addressed this concern, and therefore delineated clearly 

between the underlying offense and the money laundering 

offense, by including an intent requirement. See id. We 

stated: 

 Section 1956(a)(1), quite clearly, does not prohibit all 

 financial transactions that are conducted with the 

 proceeds of specified unlawful activity. It only 

 proscribes those transactions that are conducted with 

 the intent to promote certain further illegal activity, 

 under subsection (A), or that are designed to conceal 

 under subsection (B). 

_________________________________________________________________ 

4. Omoruyi does not appear to contest the first and third elements. 

 6 
 These requirements would preclude the application of 

 section 1956 to non-money laundering acts such as a 

 defendant's depositing the proceeds of unlawful activity 

 in a bank account in his own name and using the 

 money for personal purposes. 

Id. (citing United States v. Jackson, 935 F.2d 832 (7th Cir. 

1991)). 

Furthermore, we indicated that for money to become 

"proceeds" it must be derived from a completed offense, or 

a completed phase of an ongoing offense. See id. at 980. 

That being said, the conduct constituting the underlying 

offense conduct may overlap with the conduct constituting 

money laundering. See id. To that end, we found that the 

money, once collected from the various video poker 

machines, became " `proceeds of specified unlawful 

activity' " within the meaning of the money laundering 

statute, even though there may have been some overlap in 

the acts alleged to constitute the conduct of an illegal 

gambling business and money laundering. Id. (quoting 18 

U.S.C. S 1956(a)(1)). 

Applying Conley here, it is clear that there was 

substantial evidence supporting Omoruyi's money 

laundering conviction. Omoruyi contends, in an argument 

similar to that of the defendant in Conley, that the conduct 

charged as money laundering was the same conduct 

constituting mail fraud. Nevertheless, inasmuch as the 

money was deposited in bank accounts under false names, 

and Omoruyi used false identification to withdraw it, he 

clearly conducted the transactions charged with the intent 

to conceal or disguise the nature, source, ownership and 

control of the proceeds of the mail fraud. As we noted in 

Conley, section 1956 would not apply to a defendant's 

depositing the proceeds of unlawful activity in a bank 

account "in his own name" and using the money for 

personal purposes, as neither the "promote" or"conceal" 

aspects of the money laundering statute would be met. Id. 

at 979 (emphasis added). Here, however, there is sufficient 

evidence of concealment, and of Omoruyi's intent to

conceal, to sustain his conviction. 

Moreover, Conley establishes that, at the very latest, the 

 7 
money acquired through the mail fraud became "proceeds" 

at the time the checks were honored by the various banks. 

As we found in Conley, proceeds are derived from an

already completed offense or a completed phase of an 

ongoing offense. See id. at 980. Here, the indictment 

charged six counts of mail fraud based on the mailing of 

fraudulently obtained checks to the various banks, while 

the money laundering counts were based upon eight 

subsequent teller window cash withdrawals. Therefore, the 

mail fraud offenses were complete as of the time the six 

checks were placed in the mail for delivery to the banks, 

and thus the money thereafter derived from the checks 

constituted the proceeds of the already completed offenses.5 

Notwithstanding Conley, Omoruyi also argues, citing

United States v. Johnson, 971 F.2d 562, 569-70 (10th Cir. 

1992), that money cannot be "proceeds" until the defendant 

has possession of it. Relying on the fact that the money was 

in bank accounts under false names, he contends that he 

was not in possession of it until he actually withdrew it and 

therefore the money could not be deemed proceeds until 

that time.6 He argues that "[t]he essential determination is 

when and how could possession of the funds be obtained," 

and because "the funds were never credited to an account 

_________________________________________________________________ 

5. The crime of mail fraud is defined as: 

 Whoever, having devised or intending to devise any scheme or 

 artifice to defraud, or for obtaining money or property by means of 

 false or fraudulent pretenses, representations, or promises, . . . 

for 

 the purpose of executing such scheme or artifice or attempting so 

to 

 do, places in any post office or authorized depository for mail 

 matter, any matter or thing whatever to be sent or delivered by the 

 Postal Service . . . . 

18 U.S.C. S 1341. In fact, even if the mail fraud was not completed until 

the banks collected the proceeds, our result would not be altered as the 

mail fraud would have been completed before the cash withdrawals. 

6. To this end, Omoruyi also relies on the court's statement in United 

States v. Edgmon, 952 F.2d 1206, 1209 (10th Cir. 1991), that "merely 

spending the proceeds of illegal activity does not violate the money 

laundering statute." As discussed previously, however, Omoruyi did not 

simply spend the proceeds of illegal activity. Rather, he engaged in a 

financial transaction designed to conceal the source, ownership and 

control of the proceeds. 

 8 
under the name Austin Omoruyi," he could not be deemed 

to have possession over them until he had the cash.

Appellant's Br. at 12. 

In Johnson, however, the court found the defendant had 

possession over the money so that it constituted"proceeds" 

once the wire transfers at issue were credited to his 

account. See Johnson, 971 F.2d at 569-70. We recognize 

that the account in Johnson was under the defendant's 

name, while the accounts here were under false names, but 

this factual distinction is not of legal consequence in the 

resolution of this case. Although deposited under false 

names, the money was credited to accounts over which 

Omoruyi had control, and therefore the money was in his 

possession. His utilization of fictitious names and

identification to access the accounts enhances, rather than 

detracts from the money laundering aspect of Omoruyi's 

conduct as he used these names and identification to 

conceal the source, ownership and control of the money. 

Accordingly, we find that there was substantial evidence 

supporting Omoruyi's convictions for money laundering 

which we thus affirm.7 

B. Applicability of the Money Laundering Sentencing

 Guideline 

Alternatively, Omoruyi contends that the district court 

erred in applying the money laundering sentencing 

guidelines, as opposed to the fraud guidelines, in 

calculating his sentence.8 This point is important because 

if everything else with respect to sentencing is equal, the 

money laundering guidelines will yield a higher sentencing 

range than the fraud guidelines. Resolution of this issue 

requires us to consider preliminarily whether we should 

apply amended money laundering guidelines, effective on 

November 1, 2000, to Omoruyi's sentence as the court 

_________________________________________________________________ 

7. Moreover, Omoruyi contends that the government's action in 

prosecuting him for money laundering was "piling on" in violation of its 

own prosecution policies. We see no basis for this contention but in any 

event the policy, even if violated, does not create substantive rights 

entitling him to relief on this appeal. See Pungitore, 910 F.2d at 1120. 

8. We review the district court's application of the sentencing guidelines 

de novo. See United States v. Bockius, 228 F.3d 305, 308 (3d Cir. 2000). 

 9 
sentenced him on December 11, 2000, or whether we 

instead should apply the guidelines in effect at the time of 

his offense. In light of our recent decision in United States 

v. Diaz, 245 F.3d 294 (3d Cir. 2001), we conclude that ex 

post facto principles preclude the application of the 

amended guidelines here. 

As a general rule, sentencing courts must apply the

guidelines in effect at the time of sentencing. See United 

States v. Menon, 24 F.3d 550, 566 (3d Cir. 1994). However, 

where application of the guidelines in effect at sentencing 

would result in a more severe penalty than application of 

those in effect at the time of the offense, the court, to avoid 

an ex post facto violation, must apply the guidelines in 

effect at the time of the offense. See, e.g., United States v. 

Brannan, 74 F.3d 448, 450 n.2 (3d Cir. 1996); United 

States v. Cherry, 10 F.3d 1003, 1014 (3d Cir. 1993). Here, 

the conduct forming the basis of Omoruyi's conviction 

occurred between March and June 1999, well prior to the 

effective date of the amended guidelines, while he was 

sentenced on December 11, 2000, approximately one and 

one-half months afterwards. While the district court did not 

discuss the effect of the amendments to the guidelines and 

thus did not note the ex post facto problem we have

identified, in fact it sentenced Omoruyi without applying 

the November 1, 2000 amendments.9 Nevertheless, unless 

the November 1, 2000 amendments made the penalty more 

severe we should apply them on this appeal and should 

take them into account when considering Omoruyi's appeal 

of his sentence. Therefore, we must consider in our

sentencing discussion whether Omoruyi would be subject 

to a more severe penalty under the amended guidelines 

than under the guidelines in effect at the time of his 

offense. 

_________________________________________________________________ 

9. The presentence report indicated that the"sentencing guidelines 

effective November 1, 1998, were used in [its] calculations." The court, 

in 

turn, indicated that it used the "factual findings and the guideline 

application in the presentence report" in imposing sentence with 

exceptions unrelated to the adoption of the November 1, 2000 

amendments. In fact, we are not even certain whether the court or the 

parties at the time of the sentencing were aware of the November 1, 2000 

amendments for, as Omoruyi points out, "[t]here was no discussion of 

the amendments at sentencing." Reply Br. at 7. 

 10 
In Diaz, we considered whether the November 1, 2000

amendments to the sentencing guidelines should apply 

retroactively to the defendant's sentence. See Diaz, 245 

F.3d at 296. Determination of this issue required us to 

consider whether the amended guidelines altered the law in 

effect at the time of the offense or merely clarified the law 

so that there was no substantive change between the dates 

of the offense and the sentencing. See id. at 301. After 

comparing the law prior to the amendments, namely our 

decision in United States v. Smith, 186 F.3d 290 (3d Cir. 

1999), superseded by rule as stated in Diaz, 245 F.3d at 

294, and the amended guidelines, we concluded that Smith, 

and its approach to applying the guidelines, is no longer 

"good law." See Diaz, 245 F.3d at 303. 10 In cases such as 

that here, in which several counts, including mail fraud 

and money laundering, have been grouped pursuant to

U.S.S.G. S 3D1.2(b), the amendments make it mandatory 

for the sentencing court to apply the guideline carrying the 

highest applicable offense level. See id. Under the

guidelines prior to the amendments, however, the 

sentencing court was to conduct a heartland analysis of the 

guidelines, determine whether the defendant's conduct is 

atypical of cases usually sentenced under that guideline 

and, if so, determine what guideline would be more 

appropriate under the circumstances. See id. at 301 (citing 

Smith, 186 F.3d at 297-98). 

While it is true that the process that Smith required 

constituted a legal determination, see Smith, 186 F.3d at 

297-98, still it introduced a degree of uncertainty into the 

selection of the applicable guidelines that the November 1, 

2000 amendments eliminate. Thus, it is understandable 

that in Diaz we found that the amendments substantively 

changed the sentencing guidelines as interpreted by Smith 

and its progeny, and that application of the amended 

guidelines to a sentence issued prior to their effective date 

was precluded by ex post facto considerations. See Diaz, 

245 F.3d at 305. Diaz clearly is controlling here.11 

_________________________________________________________________ 

10. Of course, we did not mean that Smith was not "good law" with 

respect to cases involving offenses committed prior to November 1, 2000. 

11. In theory in Diaz we could have held that if under Smith the preNovember 1, 2000 money laundering guidelines were applicable then 

application of the amendments would be appropriate as there would not 

be an ex post facto problem. We did not, however, use this circular 

reasoning. 

 11 
Accordingly, we will apply the pre-amendment guidelines, 

meaning the analysis established in Smith and its progeny, 

to this case and thus in this regard will use the same 

methodology in determining the applicable guidelines as the 

district court.12 

Pursuant to Smith, we conduct a heartland analysis of 

the money laundering guidelines to determine whether the 

conduct being punished is "atypical" of the conduct usually 

sentenced under the guidelines. See Smith, 186 F.3d at 

297. If so, then we are to determine what other guidelines 

would be more appropriate for sentencing. See id. 

In Smith, the defendants were convicted of conspiracy to 

defraud, interstate transportation of stolen property, 

causing unlawful interstate transportation with intent to 

distribute stolen property, and money laundering. See id. at 

296-97. The money laundering count was based on checks 

written by another defendant on the proceeds of kickbacks 

where the defendant ordered that many of these checks be 

written to his creditors, as opposed to directly to him. See 

id. The district court grouped the four offenses and applied 

the money laundering guideline. See id. at 292. On appeal, 

we vacated the defendants' sentences and remanded the 

case for resentencing under the fraud guideline. See id. at 

300. 

Applying the analysis described above, we found that the 

use of the money laundering guidelines was inappropriate. 

See id. We concluded that the defendants engaged in

conduct inconsistent with concealment, such as leaving a 

paper trail, that any efforts at concealment were 

disingenuous, and that when considered with the entire 

course of conduct, the money laundering was an incidental 

by-product of the fraud. See id. Inasmuch as we deemed 

this conduct to be outside of the heartland of conduct 

intended to be punished by the money laundering statute, 

the money laundering guidelines did not apply. See id. 

_________________________________________________________________ 

12. In Hameen v. Delaware, 212 F.3d 226, 237-38 (3d Cir. 2000), cert. 

denied, 121 S.Ct. 1365 (2001), we recognized the principle that if a 

discretionary sentence becomes mandatory after the offense is committed 

there is a ex post facto violation. This principle is similar to that 

applied 

in Diaz. 

 12 
Since then, we have decided several cases applying the 

Smith analysis, the most relevant of which are United States 

v. Mustafa, 238 F.3d 485 (3d Cir. 2001), and Diaz. In 

Mustafa we held that the district court did not commit 

plain error in sentencing the defendant under the money 

laundering guidelines. See id. at 496. There, the defendant, 

while operating a supermarket, deposited more than $1.5 

million worth of fraudulently obtained food stamps into his 

bank account. See id. at 487. In order for him to participate 

in the food stamp program, the government required the 

defendant to submit an application to the United States 

Department of Agriculture acknowledging that the bank 

account would be used to deposit food stamps obtained in 

accordance with governing law. See id. In addition, with 

each stamp deposit the defendant completed a required 

"redemption certificate" which purported to verify that the 

food stamps had been obtained legally. See id. Following 

the defendant's guilty plea to, among other things, 40 

counts of money laundering, the district court utilized the 

money laundering guidelines and sentenced him to 135 

months imprisonment. See id. at 488-89. 

On appeal, we rejected the defendant's argument that the 

sentencing court improperly applied the money laundering 

guidelines because his conduct did not fall within the 

heartland of the money laundering statute, namely conduct 

involving the proceeds of large-scale drug trafficking and 

organized crime. See id. at 496. In doing so we found that 

the food stamp deposits were separate and distinct from the 

criminal activity from which they derived, namely the 

purchase of food stamps from persons involved in their 

illegal trafficking. See id. at 495. Further, with each 

deposit, the defendant represented that he had received the 

food stamps legitimately. See id. at 495-96. Therefore, his 

conduct was intended to create an appearance that the 

illegally obtained proceeds were themselves legitimate. See 

id. at 496. That the defendant had to deposit the food 

stamps for them to have any cash value was not 

determinative because he still intended to and was 

concealing the original source of the funds. See id. 

Accordingly, we affirmed the district court's application of 

the money laundering guidelines. See id. 

 13 
We reached the opposite result, however, in Diaz . There, 

the defendant pled guilty to a four-count indictment 

charging her with, among other things, fraud and money 

laundering resulting from a scheme to obtain federal 

student financial assistance fraudulently on behalf of her 

cosmetology school. See Diaz, 245 F.3d at 296-98. The 

district court calculated her sentence based on the

guidelines applicable to money laundering, and the 

defendant appealed. See id. at 296. 

On appeal, we examined Smith and the cases applying its 

methodology. See id. at 305-08 (citing and discussing 

Mustafa, 238 F.3d at 488-96; United States v. Bockius, 228 

F.3d 305, 309-13 (3d Cir. 2000); United States v. Cefaratti, 

221 F.3d 502 (3d Cir. 2000); Smith, 186 F.3d at 297-300). 

We found these cases rejected a reading of Smith that 

would limit the use of the money laundering guidelines only 

to cases involving the proceeds of drug trafficking and 

organized crime. See id. at 309. Instead: 

 Mustafa, Bockius, Cefaratti, and Smith all are in accord 

 that the heartland of the money laundering guidelines 

 includes, in addition to drugs and organized crime, 

 cases involving typical money laundering, financial 

 transactions that are separate from the underlying 

 crime and that are designated either to make illegally 

 obtained funds appear legitimate, to conceal the source 

 of some funds, or to promote additional criminal 

 conduct by reinvesting the funds in additional criminal 

 conduct. 

Id. at 309-10. We distinguished these types of cases from 

"ordinary cases of routine fraud, . . . the simple receipt and 

deposit or use of illegally obtained funds, or . . . cases in 

which any money laundering is not separate from the

underlying fraud, but merely an `incidental by product' of 

that underlying fraud." Id. at 310. Therefore, "where the 

defendant has not made a serious, concerted effort to 

conceal or to legitimize the funds or to reinvest them in 

additional criminal activity, it is not appropriate to sentence 

that defendant under the money laundering guideline." Id. 

Applying these principles, we found that the district court 

improperly sentenced the defendant under the money 

 14 
laundering guidelines rather than the fraud guidelines. See 

id. at 311. The defendant, while having violated the money 

laundering statute by engaging in a monetary transaction 

in criminally derived property, neither used the proceeds of 

her fraudulent activities to promote additional criminal 

conduct, nor made any effort to disguise the source or 

nature of the funds.13 See id. We deemed the defendant's 

deposit of the student assistance funds to be inseparable 

from and an incidental by-product of the fraud and 

minimal in comparison to the totality of the unlawful 

conduct. See id. Therefore, we vacated the defendant's 

sentence and remanded the matter for resentencing under 

the fraud guidelines. See id. at 312. 

Omoruyi contends his sentence should have been 

calculated under the fraud guidelines because his money 

laundering conduct was minimal and incidental to the mail 

fraud. We reject that argument and hold that the court 

properly sentenced Omoruyi under the money laundering 

guidelines. First, the conduct charged in the indictment, 

eight teller window withdrawals, was separate from the 

underlying crime of obtaining fraudulently and mailing the 

convenience checks to the various banks. Further, this case 

is distinguishable from Diaz as there the money laundering 

count was predicated only on the defendant's deposit of the 

federal student assistance checks in the school's bank 

account. Arguably, had Omoruyi merely deposited the

checks, his conduct would not be deemed separate from the 

underlying crime, and this case would be more akin to 

Diaz. However, Omoruyi took the additional step of 

withdrawing the proceeds of his criminal conduct, an 

activity clearly not part of the underlying mail fraud. 

Second, Omoruyi's conduct involved a concerted effort to 

conceal or to legitimize the funds obtained through the mail 

fraud. In that regard, this case is quite similar to Mustafa. 

_________________________________________________________________ 

13. Diaz pled guilty to violating 18 U.S.C. S 1957(a) which makes it 

illegal 

to "knowingly engage[ ] . . . in a monetary transaction in criminally 

derived property . . . and is derived from specified unlawful activity. . 

. ." 

Therefore, unlike section 1956(a)(1), section 1957(a) contains neither a 

promote nor a conceal element. That Diaz was prosecuted under a 

different money laundering statute, however, does not affect our analysis 

under Smith. 

 15 
In conduct similar to that of the defendant in Mustafa, 

though on a lesser scale, Omoruyi deposited approximately 

$75,000 worth of fraudulently obtained convenience checks 

in various bank accounts. Also, as in Mustafa , the deposits 

were intended to conceal the source and nature of the 

proceeds and create an appearance of their legitimacy. 

Moreover, Omoruyi laundered the proceeds through 

accounts he opened using two different aliases, further 

compounding his attempts to conceal the funds and his 

control over them. 

Finally, in Mustafa we found that the fact that the

defendant had to deposit the food stamps for them to have 

value did not negate the fact that he engaged in money 

laundering. See Mustafa, 238 F.3d at 496. This conclusion 

renders unmeritorious Omoruyi's contention that the mail 

fraud was not complete until he received the funds from 

those offenses because before then the proceeds of the 

criminal conduct were of no use. Therefore, we find that 

under the version of the sentencing guidelines prior to their 

November 1, 2000 amendment, the district court 

appropriately sentenced Omoruyi under the guidelines 

applicable to money laundering. 

III. CONCLUSION 

For the foregoing reasons, we will affirm the judgment 

and sentence of the district court entered December 12, 

2000. 

A True Copy: 

Teste: 

 Clerk of the United States Court of Appeals 

 for the Third Circuit 

 16