Opinion ID: 707621
Heading Depth: 4
Heading Rank: 1

Heading: Count II--Lear Jet N127HC

Text: 18 AEI brokered the sale of this Lear Jet to Baltazar Diaz, an alleged drug trafficker from Mexico, in March and April 1988. Morales acquired the plane from Gates Lear Jet with six bank drafts from Banco del Atlantico Tijuana, totalling $1,815,000, and kept the jet in Scottsdale until December 1988 when he exported it to Mexico. While the plane was still at AEI, Diaz used it occasionally. For export, the plane was titled to Aeroservices Ejecutives Sindoneses, SA, a Mexican air-taxi service controlled by Diaz. 19 Four months after it left Scottsdale, the plane was back in Tucson for repairs. Brian Snyder, an AEI employee, testified that while the plane was in Tucson, Morales told him that it could be had for half its value because it had been used for drug smuggling and would be seized if returned to Mexico. Snyder further testified that Morales told him that Diaz was hiding out and wanted for drug smuggling in Mexico. Mark Hough, another AEI employee, also testified that Morales told him that Diaz was involved in drug smuggling. Finally, Snyder testified that after Morales' own Lear Jet, N369MJ, was seized, Morales told Snyder that the Diaz who was wanted in Mexico was not their client and that Snyder should not mention Diaz to law enforcement. 20 Morales challenges the sufficiency of the government's evidence supporting each of the three prongs of the offense: (1) that the transaction involved drug proceeds, (2) that Morales knew that the funds were drug proceeds, and (3) that the transaction was designed at least in part to conceal or disguise the nature, location, source, ownership or control of drug proceeds. Because the government was not able to trace the purchase funds to a laundered account, the evidence is less compelling than that supporting the other laundering counts, but was nonetheless sufficient to support the jury's verdict. 21 A reasonable jury could have believed Morales' statements to Snyder and Hough about Diaz's drug dealing and in particular his assertion that the plane itself was used for drug trafficking. From this the jury could have inferred that the source of Diaz's wealth--Hough testified that Morales told him that Diaz had 68 houses in Mexico--was drug trafficking and that drug proceeds had paid for the plane. Because all the evidence of Diaz's drug trafficking came from statements Morales made to his own employees, this evidence was in turn more than sufficient to establish Morales' knowledge that the funds were drug proceeds. 22 The chief evidence regarding the third prong is that Diaz titled the plane in the name of his air-taxi service. This served both to avoid tariffs by hiding the plane's private ownership and, relevant here, to conceal the source of the purchase proceeds. As the Tenth Circuit noted in U.S. v. Garcia-Emanuel, 14 F.3d 1469 (10th Cir.1994), when it reinstated a jury verdict for money laundering against a drug dealer who purchased land with a cashier's check listing his restaurant as the remitter, the use of a legitimate corporation as the nominal purchaser not only creates the false impression that the [legitimate business] was [the] source of wealth, but it creates documentary evidence in support of that deception that could mislead an investigator. Id. at 1476-1477. 23 In assessing Morales' knowledge and intent, the jury also could have considered more general evidence including Morales' statement to his friend and associate Kenneth Reed that he was doing business with his cocaine cronies. Morales' involvement with Golb and Franco in the 1986 cash purchase of the Piper Navajo, in which he professed the desire to clean up more money through similar deals in the future, further bolstered the government's theory. The evidence on all three prongs was thus sufficient to support the jury's verdict. 24