Opinion ID: 180347
Heading Depth: 3
Heading Rank: 3

Heading: The Absence of Merger in Bush's Conviction

Text: We next consider whether Bush's money-laundering convictions present the merger problems of Santos or Van Alstyne. Because the district court did not specifically instruct the jury that proceeds must include profits, if such a merger problem exists, then the jury instructions were erroneous. The eighteen monetary transactions at issue here occurred during a finite period of Bush's overall schemefrom December 29, 1999 to May 24, 2000. All involved transfers from Bank Crozier to bank accounts controlled by Bush in Washington state. The transactions occurred during the second phase of the overall Ponzi scheme when Bush and Grant operated under the Global Dominion name. The stage of the transactions in the context of the larger fraud is particularly important because the timing reveals their irrelevance to the overarching fraudulent scheme. The circumstances surrounding the securities, wire, and mail-fraud convictions were all distinct from the money laundering, thus alleviating any merger concerns. First, the securities fraud conviction (Count 1) related to a January 2002 attempted sale of an investment contract in Cabo San Quintina fraud that occurred more than 18 months after the last money-laundering transaction charged in the Indictment. Likewise, the mail-fraud convictions (Counts 15-17) have no connection to the transfersrather the mail fraud was based on Bush's promotional activities and the sending of false documents to clients. With respect to two of the wire-fraud charges (Counts 12 and 13), the transactions involved transfers from a bank in Oregon to Bush's accounts in Washington after the money laundering was completed. This leaves only six wire-fraud charges (Counts 2-7) which could present merger problems. Unlike the cases analyzed earlier, however, none of the transactions from Bank Crozier to Bush was central to carrying out the scheme's objective[s]. Moreland, 622 F.3d at 1166. The necessity of the transfers from Bank Crozier was limited to Bush's personal interest in veiling the sources of his income from public authorities. Unlike Moreland, the Government showed that Bush engaged in the transfers from Bank Crozier primarily as a means to benefit himself. This was evidenced by the fact that Bush operated his scheme for several years without making these international transfers from Bank Crozier. Notably, the overseas money transfers began after authorities began investigating Hulaman, Mintus, and Wilcoxson. Rather than risk investors sending money directly to his Hulaman account, Bush deflected attention by steering the investments overseas first. While this is not as detrimental to the Ponzi scheme as the defendant in Moreland refunding an investor's principal, it also did not directly assist Bush in generating new investments. Taking additional steps to hide completed criminal activity is not central to the solicitations necessary for a Ponzi scheme to continue operating. Further, we decline to endorse a merger rule that would reward criminals for increasing nefarious behavior by taking additional steps to avoid justice. Bush's argument that the government did not distinguish which of his transfers from Bank Crozier to the Washington accounts were costs and which were profits is a red herring. In a period of six months, Bush moved more than $2.48 million from overseas accounts to pay approximately $9,000 in weekly costs. These costs included business necessities like his home, personal bills, and suites at football and baseball gamesall outlays which benefitted Bush as much as they did his clients or associates. Bush's profligacy is not a basis for weaving money laundering into a Ponzi scheme. Finally, we note that in Kratt, the Sixth Circuit also considered whether the inclusion of the money-laundering charge under Section 1957 led to a radical increase in the statutory maximum sentence for the underlying offense. 579 F.3d at 562. Bush's money-laundering convictions, only some of which even present the possibility of merger, had the possibility of adding ten years to his overall sentence. 18 U.S.C. § 1957(b)(1). By contrast, his mail and wire-fraud convictions had thirty-year statutory maximums. 18 U.S.C. §§ 1341, 1343. This is quite distinct from Santos, where the operation of an illegal lottery carried only a five-year sentence while money-laundering under Section 1956 could have led to an additional twenty years of imprisonment. See 553 U.S. at 516, 128 S.Ct. 2020. In the end, Bush received five additional years for his money launderinghardly a radical disparity from the twenty-five-year sentence for his various frauds. Since Bush does not dispute that he executed the transactions in question and because those transactions did not merge with his predicate frauds, we hold that there was sufficient evidence to convict Bush of transactional money laundering under 18 U.S.C. § 1957.