Opinion ID: 176295
Heading Depth: 2
Heading Rank: 3

Heading: Jury Instructions for Counts (3) and (4)Money Laundering Conspiracy and Money Laundering

Text: In instructing the jury on the money laundering counts, the district court did not define proceeds as profits, a failing which Webster now challenges for the first time. Because Webster did not raise a timely objection to the instructions, we review for plain error. United States v. Moreland, 622 F.3d 1147, 1165-66 (9th Cir. 2010). Webster contends our decision in Moreland compels the conclusion that the district court's failure to define proceeds as profits in the jury instructions constitutes plain error. See Moreland, 622 F.3d at 1166-67 (discussing and applying United States v. Santos, 553 U.S. 507, 128 S.Ct. 2020, 170 L.Ed.2d 912 (2008)). We disagree. In United States v. Santos , defendant Santos was convicted of gambling and money laundering crimes. 128 S.Ct. at 2023. The Court addressed the question whether proceeds, left undefined in the definition of money laundering in 18 U.S.C. § 1956, is defined as profits or receipts (also called gross receipts). [1] After concluding that no definition predominated, a plurality determined the rule of lenity required the narrower profits definition be adopted. Id. at 2024 (Scalia, J., joined by Souter, Thomas, & Ginsburg, J.J., and announcing the judgment of the Court). The plurality went on to note that if the receipts definition were adopted instead, a merger problem would arise, as nearly every violation of the illegal-lottery statute would also be a violation of the money-laundering statute, because paying a winning bettor is a transaction involving receipts that the defendant intends to promote the carrying on of the lottery. Id. at 2026. Compare id. at 2035-36 (Alito, J., dissenting, joined by Roberts, C.J., Kennedy & Breyer, J.J.) (determining that proceeds means `the total amount brought in,' the primary dictionary definition and relying on what the term `proceeds' customarily means in ... a money laundering statute); id. at 2032-33 (Stevens, J., concurring in the judgment) (considering both the merger problem and legislative history and concluding the Court need not pick a single definition of proceeds). In United States v. Van Alstyne, we observed that the desire to avoid a `merger problem' united the five [J]ustices who held that Santos' payments to winners ... did not constitute money laundering.... We therefore view the holding that commanded five votes in Santos as being that `proceeds' means `profits' where viewing `proceeds' as `receipts' would present a `merger' problem of the kind that troubled the plurality and concurrence in Santos.  584 F.3d 803, 809, 814 (9th Cir.2009). See also Moreland, 622 F.3d at 1166 (determining payments of commissions in a fraudulent pyramid scheme raise the same merger problem condemned in Santos and Van Alstyne, as commissions were central to carrying out the scheme's objective of encouraging further investment). In addition to the money laundering crimes, Webster was charged with conspiracy to possess with intent to distribute methamphetamine, 21 U.S.C. § 846, and possession with intent to distribute over 500 grams of methamphetamine, 21 U.S.C. § 841(a)(1); 18 U.S.C. § 2. These drug crimes do not merge with the money laundering crimes, because the drug crimes need not involve the exchange of money. See, e.g., United States v. Ramirez, 608 F.2d 1261, 1264 (9th Cir.1979) (affirming a conviction for distribution of cocaine under 21 U.S.C. § 841(a)(1) where the defendant shared the drug with others, but apparently no commercial scheme [wa]s involved). Because neither the conspiracy nor the drug possession count against Webster presents a merger problem, neither requires narrowly defining proceeds as profits for the money laundering counts. We recognize that four Justices in the Santos plurality stated that the merger problem might exist for certain payments among conspirators. See 128 S.Ct. at 2026-27 (Scalia, J., joined by Souter, Thomas, & Ginsburg, J.J.) (stating, any wealth-acquiring crime with multiple participants would become money laundering when the initial recipient of the wealth gives his confederates their shares). However, this minority view is not controlling. Moreover, five Justices in Santos expressly agreed that the legislative history of § 1956 makes it clear that Congress intended the term `proceeds' to include gross revenues from the sale of contraband and the operation of organized crime syndicates involving such sales. Id. at 2032 (Stevens, J., concurring in the judgment); see id. at 2035 & n. 1 (Alito, J., dissenting). We, therefore, read Santos as holding that where, as here, a money laundering count is based on transfers among coconspirators of money from the sale of drugs, proceeds includes all receipts from such sales. See Klamath Siskiyou Wildlands Ctr. v. U.S. Bureau of Land Mgmt., 589 F.3d 1027, 1034 (9th Cir.2009) (explaining that, when the Supreme Court issues no majority opinion and the plurality takes a legal position more far-reaching than the position of a concurring [J]ustice or [J]ustices[,] ... the narrowest view that commands a majority of [J]ustices is the law (citing Marks v. United States, 430 U.S. 188, 193, 97 S.Ct. 990, 51 L.Ed.2d 260 (1977))). Because the broad receipts definition of proceeds was permissible, the district court did not err in its jury instructions by failing to define proceeds narrowly to mean profits.