Opinion ID: 701257
Heading Depth: 3
Heading Rank: 1

Heading: The Linea Pitti transactions

Text: 17 Wynn's challenge to the sufficiency of the Government's proof concerning the Linea Pitti clothing sales charges focuses on the statute's two scienter requirements. He contends that the Government presented no evidence that he knew Edmond and Lewis earned their income through drug distribution; and further, because the purchases were handled as ordinary commercial transactions, there is no evidence that he knew they were designed to conceal the nature of the funds. 18 By the terms of the statute, the Government must prove that Wynn knew Edmond and Lewis derived their money from some form of illegal activity, but it need not prove that Wynn knew the precise activity in which the two were engaged. 18 U.S.C. Sec. 1956(a)(1)(B)(i). Such evidence, however, cannot alone sustain a conviction because section 1956 prohibits the laundering of money, not merely the spending of money obtained illegally. See United States v. Sanders, 929 F.2d 1466, 1472-73 (10th Cir.1991) (finding purchasers of car did not violate Sec. 1956 by using drug trafficking proceeds when there was no effort to conceal). Thus, the Government must prove that Edmond and Lewis were motivated by a desire to conceal or disguise the source or the ownership of the money they spent at Linea Pitti and that Wynn knew of this design. As other circuits have observed, the language of the statute requires only that Edmond and Lewis--not Wynn--be motivated by a desire to conceal. United States v. Campbell, 977 F.2d 854, 857-58 (4th Cir.1992) (upholding Sec. 1956 conviction of real estate agent who sold a house to a drug dealer despite the fact that she was motivated only by the desire to earn a commission); accord United States v. Carr, 25 F.3d 1194, 1206 (3d Cir.1994); United States v. Awan, 966 F.2d 1415, 1424-25 (11th Cir.1992). 19 The concealment of illegal proceeds, however, need have been only one of Edmond's and Lewis's purposes in purchasing the clothing; it need not have been their sole purpose. Campbell, 977 F.2d at 859; Sanders, 929 F.2d at 1472. The conversion of cash into goods and services as a way of concealing or disguising the wellspring of the cash is a central concern of the money laundering statute. United States v. Jackson, 935 F.2d 832, 841 (7th Cir.1991). A requirement that concealment be the sole motivating factor of a transaction would make the enforcement of the statute to punish those who convert dirty money into goods and services nearly impossible as the owner of the illegal proceeds could always legitimately claim to be motivated in part by a desire to obtain the items purchased. 20 At Wynn's trial, Linea Pitti employees testified that they and their fellow employees assumed from Edmond's and Lewis's behavior and appearance that the two were drug dealers, that the two wore beepers which often went off in the store, and that they paid for merchandise with small bills. The store's bookkeeper testified that Wynn often failed to record Lewis's or Edmond's name on sales receipts after making a sale to them, contrary to the store's customary business practice. Read in the light most favorable to the Government, the evidence suggests that Wynn also told employees who waited on Edmond and Lewis in Wynn's absence not to record their names on sales receipts. The Government also presented evidence that Lewis loaned Linea Pitti $20,000 and that Wynn subsequently put Lewis on the store's payroll. Lewis was paid $9,200 by Linea Pitti in 1988, although store employees testified that they never saw him perform any work. 21 Events that occurred during the grand jury's investigation also suggest guilty knowledge on Wynn's part. In 1989, the grand jury issued a subpoena for Linea Pitti's business records, including daily sales reports maintained by the store's bookkeeper. One copy of these documents was maintained and submitted to the grand jury by Linea Pitti's accountant. In this copy, the daily sales reports were written in the handwriting of Linea Pitti's bookkeeper; and sales made to Edmond and Lewis were attributed to Tony Lewis and to Ray Ford, the name by which Linea Pitti's bookkeeper knew Edmond. Linea Pitti also responded to the subpoena by submitting photocopies of its original business records. In this set of records, sales actually made to Edmond or Lewis were attributed to John Brown or Reco Smith, and these obviously false entries were made in Wynn's handwriting. 22 The body of evidence, when considered as a whole, provided the jury with ample basis for convicting Wynn. The jury reasonably could have concluded that Wynn had attempted to hide the fact that Edmond and Lewis had spent hundreds of thousands of dollars in small bills at Linea Pitti. From this and the evidence that Edmond and Lewis were notorious drug dealers, the jury reasonably could have inferred that Wynn knew that their money was dirty and that he knew that the two were anxious to disguise their identity as the purchasers of the merchandise and the source of the cash used to pay for it. 23 In light of the abundant relevant trial testimony, Wynn's claim that there was no evidence of his knowledge is clearly misplaced. His true objection seems to be to the circumstantial nature of the Government's scienter evidence. This objection, however, goes to the weight of the evidence, not its sufficiency, and is more properly addressed to a jury than to us. There is, of course, no legal requirement that the Government present direct rather than circumstantial evidence of a defendant's guilt. Poston, 902 F.2d at 94 n. 4. 24 The cases on which Wynn relies for his insufficiency of the evidence claim are clearly distinguishable. In United States v. McDougald, 990 F.2d 259 (6th Cir.1993), the defendant was asked by a friend to take $10,000 in cash and use it to purchase a car for a third person whom the defendant had met only once and who turned out to be a drug dealer. Id. at 260. In reversing McDougald's money laundering conviction, the Sixth Circuit held that, not only was there insufficient evidence that the $10,000 constituted drug proceeds, there was insufficient evidence that McDougald knew its source. Id. at 261-62. In Sanders, the Tenth Circuit reversed the money laundering convictions of a drug distributor who used her illegal proceeds to purchase two cars, finding that the undisguised purchase, registration, and use of the vehicles by her and members of her family were inconsistent with a motivation to conceal the source or ownership of the illegal proceeds. 929 F.2d at 1472-73. In contrast to the facts of those cases, Wynn's ongoing relationship with Edmond and Lewis and his efforts to disguise their identity as customers suggests knowledge both of illegal activities and of a design to conceal.