Source: http://legaliq.com/Case/United_States_V_Richard_Cruz_Breque
Timestamp: 2018-01-19 23:18:23
Document Index: 759351484

Matched Legal Cases: ['§ 371', '§ 1956', '§ 5313', '§ 371', '§ 5313', '§ 1956', '§ 5313', '§ 103', '§ 5322', '§ 371', '§ 371', '§ 5313', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 1956', '§ 2', '§ 2', '§ 2', '§ 2', '§ 2', '§ 2', '§ 1956', '§ 2', '§ 2', '§ 2', '§ 2', '§ 2', '§ 103', '§ 2', '§ 2']

United States v. Richard Cruz Breque (964 F.2d 381)
United States v. Richard Cruz Breque
Case Name: United States v. Richard Cruz Breque
Citations: 964 F.2d 381
Docket #: 91-5625
964 F.2d 381
Richard Cruz BREQUE, Defendant-Appellant.
No. 91-5625.
Richard Cruz Breque appeals his conviction for conspiracy in violation of 18 U.S.C. § 371, 18 U.S.C. § 1956(a)(3), and 31 U.S.C. §§ 5313 and 5322(a). He also appeals his sentence. We affirm his conviction on all counts but vacate his sentence.
The meeting on June 20, 1990, took place at the Embassy Suites Hotel in San Antonio, and was recorded by a hidden video camera. Due to a misunderstanding between Breque and Rangel, and because Castiglioni could not supply the required pesos, no transaction occurred that day. During the meeting, Rangel made veiled references to drug dealing and the parties discussed illegal money laundering. Discussing various money laundering techniques, Rangel criticized the "old, worn out method" of taking money to a "friendly person." Breque agreed that the "friendly banker" method would no longer work because "[t]hey're all getting burned that way."2 The discussion progressed as follows:[Breque:] [L]ike I was ... telling Mike, one of the things that's really gotten this thing very bad is all your TV movies, Miami Vice and everything that's making everybody kinda jittery, things the way are going ...
Following a jury trial in the United States District Court for the Western District of Texas, Breque was convicted of conspiring with Castiglioni and Enriquez to fail to file CTRs in violation of 18 U.S.C. § 371 and 31 U.S.C. §§ 5313 and 5322(a).5 In addition, Breque was convicted of conspiring with Castiglioni to launder money represented by a law enforcement officer to be the proceeds of specified unlawful activity (narcotics sales), in violation of 18 U.S.C. § 1956(a)(3)(C).
Pursuant to 31 U.S.C. § 5313(a) and 31 C.F.R. § 103.22(a)(1), financial institutions must file CTRs with the IRS when they engage in individual currency transactions exceeding $10,000. A person who "willfully" violates the above provisions commits an offense under 31 U.S.C. § 5322(a). See, e.g., United States v. Gollott, 939 F.2d 255, 257 (5th Cir.1991). Though the primary responsibility for filing CTRs rests with the agents of the financial institution, "a customer's collusion with a financial institution to avoid filing CTRs ... constitutes an unlawful conspiracy in violation of 18 U.S.C. § 371." United States v. Cure, 804 F.2d 625, 628 (11th Cir.1986) (citations omitted).
Breque contends that the evidence is insufficient to convict him of conspiracy to fail to file CTRs in violation of 18 U.S.C. § 371 and 31 U.S.C. §§ 5313 and 5322(a). We note that the evidence against Breque was sufficient to convict him if "any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt." United States v. Contreras, 950 F.2d 232, 236 (5th Cir.1991) (citing United States v. Lemons, 941 F.2d 309, 314 (5th Cir.1991)), cert. denied, --- U.S. ----, 112 S.Ct. 2276, 119 L.Ed.2d 202 (1992). We review the evidence "in the light most favorable to the government, drawing all reasonable inferences in favor of the jury's verdict." Id.
We find that there is evidence showing that Breque willfully conspired with Castiglioni and Enriquez to fail to file the CTRs, because he knew of the reporting requirements and decided not to comply with them. See United States v. O'Banion, 943 F.2d 1422, 1429 (5th Cir.1991). On June 8, 1989, Breque met with Rangel and discussed exchanging her $15,000 for pesos. Breque apparently understood the $10,000 filing requirement because he recommended that he, Rangel, and Zuniga divide her $15,000 and exchange the portions individually. Breque subsequently introduced Rangel to Castiglioni who effected the exchange. Castiglioni did not file a CTR, and made no inquiries of Rangel so that he could have done so. While Breque contends that he merely stood idly by and watched Castiglioni make the exchange, it is undisputed that he introduced Rangel and Castiglioni for the purpose of exchanging currency.
Breque also contends that the evidence was insufficient to convict him of conspiring with Castiglioni to violate § 1956(a)(3)(C). 18 U.S.C. § 1956(a)(3) provides, in relevant part, as follows:
18 U.S.C. § 1956(a)(3)(C). Subsection (c)(7) defines "specified unlawful activity" to include a wide range of crimes, including violations of the narcotics laws. 18 U.S.C. § 1956(c)(7). To prove a violation of this section, the Government must prove (1) that the defendant conducted or attempted to conduct a financial transaction, (2) with the intent to avoid a transaction reporting requirement, and (3) that the property involved in the transaction was represented by a law enforcement officer to be the proceeds of specified unlawful activity. 18 U.S.C. § 1956(a)(3)(C).
We find that there is sufficient evidence from which a jury might conclude that Rangel represented to Breque that the funds were the proceeds of drug activities. A rational jury could have found Breque guilty of conspiracy to violate 18 U.S.C. § 1956(a)(3)(C).
Breque next contends that the district court erred when it instructed the jury as to "deliberate ignorance."6 The term "deliberate ignorance" "denotes a conscious effort to avoid positive knowledge of a fact which is an element of an offense charged, the defendant choosing to remain ignorant so he can plead lack of positive knowledge in the event he should be caught." See United States v. Chen, 913 F.2d 183, 191-92 (5th Cir.1990) (quoting United States v. Restrepo-Granda, 575 F.2d 524, 528 (5th Cir.), cert. denied, 439 U.S. 935, 99 S.Ct. 331, 58 L.Ed.2d 332 (1978)); see also United States v. Lara-Velasquez, 919 F.2d 946, 951 (1976).
Because Breque did not object to this instruction at trial, we review it for plain error.7 See Fed.R.Crim.P. 52(b). According to Rule 52(b), "[p]lain errors or defects affecting substantial rights may be noticed although they were not brought to the attention of the court." This court has defined "plain error" as "error which, when examined in the context of the entire case, is so obvious and substantial that failure to notice and correct it would affect the fairness, integrity or public reputation of judicial proceedings." United States v. Lopez, 923 F.2d 47, 50 (5th Cir.), cert. denied, --- U.S. ----, 111 S.Ct. 2032, 114 L.Ed.2d 117 (1991).
Breque also contends, in somewhat oblique fashion, that the instruction may have confused the jury into concluding that it could convict Breque of violating 18 U.S.C. § 1956(a)(3) if it found that he should have known the money to have been from specified unlawful activity, even absent proof by the Government that a representation was made by Rangel as to the source of her funds. This contention, too, has no merit. As we have noted above, for purposes of § 1956(a)(3), the Government put forth sufficient evidence that Rangel made representations to Breque that the money was proceeds of specified unlawful activity. The instruction in no way suggested that the Government need not have proven that Rangel made a representation. Indeed, the jury instruction which dealt specifically with 18 U.S.C. § 1956(a)(3) made clear to the jury that the Government had to prove that Rangel made a representation. Accordingly, there was no error in giving the deliberate ignorance instruction.
Over Breque's objections at sentencing, the district court raised Breque's base offense level by three levels pursuant to U.S.S.G. § 2S1.1(b)(1). At the time Breque was sentenced, that section provided as follows:
U.S.S.G. § 2S1.1(b)(1) (Nov.1990) (emphasis added). We review the district court's application of the Sentencing Guidelines de novo, see United States v. White, 945 F.2d 100, 101 (5th Cir.1991), but review the district court's factual findings only for clear error. United States v. Bachynsky, 949 F.2d 722, 734 (5th Cir.1991).
This is an issue of first impression in any circuit, inasmuch as the only decisions to have examined the 1990 version of § 2S1.1(b)(1) involved the laundering of actual proceeds of narcotics dealing. See United States v. Restrepo, 936 F.2d 661, 665 (2d Cir.1991); United States v. Atterson, 926 F.2d 649 (7th Cir.), cert. denied sub nom. Laurelez v. United States, --- U.S. ----, 111 S.Ct. 2909, 115 L.Ed.2d 1072 (1991). Fortunately, we need not now opine as to the meaning of "knowledge," because we have adequate guidance for our consideration of § 2S1.1(b)(1) from the amended section, effective November 1, 1991, which was not applicable to Breque. The new guideline reads:
U.S.S.G. § 2S1.1(b)(1) (Nov.1991) (emphasis added). Appendix C of the 1991 Amendments describes the purpose of the amendment to § 2S1.1(b)(1):
Section 2S1.1(b)(1) is amended by inserting "or believed" immediately following "knew"....
This amendment revises this guideline to reflect the enactment of subsection (a)(3) of 18 U.S.C. § 1956 that authorizes undercover "sting" operations in money laundering cases. Such cases differ from those prosecuted under subsection (a)(1) in that the money being laundered is not actually criminal proceeds, but is government "sting" money that an undercover officer represents to be criminal proceeds. In all other respects, subsections (a)(1) and (a)(3) are the same. The effective date of this amendment is November 1, 1991.
While recognizing that the "believed" standard does not apply here because it works a substantive change of the guideline, see United States v. Miller, 903 F.2d 341, 347-49 (5th Cir.1990), the Government argues that the amended section suggests the intention behind the earlier draft of § 2S1.1(b)(1). We disagree. Section 2S1.1(b)(1) was amended expressly to include defendants caught in Government sting operations. The addition of the term "believe" to effect this purpose suggests quite strongly that the word "know" in the version of § 2S1.1(b)(1) relevant here is insufficient, by itself, to encompass the state of mind of defendants caught laundering money that is not, in fact, the proceeds of drug activity. See United States v. Payne, 962 F.2d 1228 (6th Cir.1992) (finding that amendment of § 2S1.1(b)(1) encompasses individuals who "believe" that sting funds are proceeds of unlawful narcotics activity). As the amendment to the guidelines shows, for the specific purposes of § 2S1.1(b)(1), Breque only "believed" the money to be proceeds of narcotics activity, but could not "know" it to be so. Accordingly, the application of U.S.S.G. § 2S1.1(b)(1) to raise Breque's base offense level three levels was error.
A Currency Transaction Report must be filed with the IRS when the amount of the exchange exceeds $10,000. See 31 C.F.R. § 103.22(a)(1) (1991)
Breque notes that he objected to the "deliberate ignorance" instruction in his motion for a new trial. That objection was not contemporaneous, however, and therefore the plain error standard still applies. See United States v. Winn, 948 F.2d 145, 159 (5th Cir.1991) (objection to jury instruction after jury deliberates is not contemporaneous and is reviewed for plain error), cert. denied, --- U.S. ----, 112 S.Ct. 1599, 118 L.Ed.2d 313 (1992)
Breque also argues that § 2S1.3(b)(1) should apply rather than § 2S1.1(b)(1). This argument ignores the fact that the element distinguishing these two sections is that the funds laundered come from narcotics activity. Section 2S1.1(b)(1) speaks directly to the laundering of narcotics proceeds
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