Opinion ID: 747648
Heading Depth: 3
Heading Rank: 5

Heading: Grouping of Multiple Counts

Text: 24 In his final sentencing objection, Emerson complains that the district court incorrectly employed USSG § 3D1.4 to determine his combined offense level. The court refused to group the mail fraud and money laundering convictions as closely related counts under § 3D1.2, instead applying § 3D1.4, which resulted in a one-level enhancement. 25 Section 3D1.2 provides that [a]ll counts involving substantially the same harm shall be grouped together into a single Group. USSG § 3D1.2. This condition is met when 1) the counts involve the same victim and the same act or transaction; 2) the counts involve the same victim and two or more acts or transactions that constitute a common criminal objective, scheme, or plan; 3) one of the counts includes conduct accounted for as a specific offense characteristic or another adjustment to the guideline applicable to the other count; or 4) the base offense level is determined largely on the total amount of loss, quantity of substance involved, some other aggregate harm, or the offense behavior's continuing nature is otherwise considered in the offense guideline. See USSG § 3D1.2. 26 Emerson argues that our recent decision in United States v. Wilson, 98 F.3d 281 (7th Cir.1996), requires the grouping of his mail fraud and money laundering convictions as closely-related counts under § 3D1.2. The defendant in Wilson operated a Ponzi scheme and was subsequently convicted of mail fraud and money laundering. We held that the district court erred in refusing to group the mail fraud and money laundering charges as closely-related counts under § 3D1.2 noting that [w]ithout the fraud there would have been no funds to launder. Id. at 282-83 (quoting United States v. Mullens, 65 F.3d 1560, 1564 (11th Cir.1995), cert. denied, --- U.S. ----, 116 S.Ct. 1337, 134 L.Ed.2d 487 (1996)). More importantly, however, we found that the counts must be grouped under § 3D1.2 because the money laundering served the necessary purpose of concealing the fraud, keeping the scheme afloat, and perpetuating the scheme that produced the laundered funds. Id. at 283-84. We additionally reasoned that USSG § 3D1.2(d) provided that offenses governed by § 2F1.1 and § 2S1.1 are appropriate for grouping because the offense level is determined largely on the basis of the total amount of harm or loss, USSG § 3D1.2(d). Wilson, 98 F.3d at 283; see also United States v. Coscarelli, 105 F.3d 984, 989 (5th Cir.), reh'g en banc granted, 111 F.3d 376 (5th Cir.1997). 1 27 The Government argues that the mail fraud and money laundering convictions should not be grouped as closely-related counts because the mail fraud and money laundering involved different transactions and different victims. See USSG § 3D1.2(a); United States v. Kunzman, 54 F.3d 1522, 1531 (10th Cir.1995) (refusing to group mail fraud and money laundering as closely related counts because the mail fraud victimized the person defrauded and the money laundering victimized society at large); United States v. Johnson, 971 F.2d 562, 576 (10th Cir.1992) (same). According to the Government, the mail fraud involved Emerson's scheme to swindle money out of the Postal Service by awarding construction projects to selected contractors, letting those contractors submit fraudulent bills, and accepting kickbacks in return for giving the contractors the Postal Service work. The Government maintains that the money laundering, on the other hand, involved Emerson's maneuvers to hide his illegal proceeds, and thereby promoted his criminality, through the conversion of large sums of cash to personal and real property. The money laundering, moreover, commenced after the completion of the mail fraud, and Emerson's mail fraud schemes would have been successful even if the money laundering had never occurred. The Government thus argues that Wilson is distinguishable because the mail fraud and money laundering in Wilson were integral cogs in continuing the scheme, while Emerson's money laundering was not necessary to perpetuate the mail fraud. 28 While we see the point in much of the Government's argument, we cannot overlook the fact that Emerson was indicted and convicted under the promotion prong of the money laundering statute. See 18 U.S.C. § 1956(a)(1)(A)(i). See generally Jimmy Gurule, The Money Laundering Control Act of 1986: Creating a New Federal Offense or Merely Affording Federal Prosecutors an Alternative Means of Punishing Specified Unlawful Activity?, 32 Am.Crim.L.Rev. 823 (1995) (discussing the differences between the promotion and concealment prongs of 18 U.S.C. § 1956). In other words, the evidence at trial demonstrated that Emerson laundered the proceeds of his mail fraud scheme with the intent of promoting that illegal scheme. In Wilson, we found mail fraud and money laundering counts to be closely related where the defendant pled guilty to violating the concealment prong of the money laundering statute, see 18 U.S.C. § 1956(a)(1)(B)(i), 2 and merely concealing the proceeds of criminal activity evidences a lesser connection to the underlying criminality than actually promoting or plowing back the proceeds into that criminal scheme, see United States v. Jackson, 935 F.2d 832, 841-42 (7th Cir.1991). 3 29 Furthermore, in Wilson we rejected the notion that mail fraud and money laundering should not be grouped as closely related because those crimes harm different victims. Specifically, we stated that there is intuitive force to the argument that the victim of the fraud is also a victim of the transaction designed to hide or 'cleanse' the funds of which she was defrauded. Wilson, 98 F.3d at 283; see also United States v. Leonard, 61 F.3d 1181, 1185-86 (5th Cir.1995). 30 Although Emerson completed his mail fraud before he ever laundered the illegal proceeds, and even though the viability of Emerson's mail fraud scheme may not have relied upon the money laundering, Emerson embarked upon his money laundering scheme with the intent of promoting his mail fraud swindle. This factor brings Emerson's case clearly within the realm of Wilson, and therefore requires us to remand the case for resentencing.