Opinion ID: 2748472
Heading Depth: 1
Heading Rank: 4

Heading: Edgardo: Money Laundering Sentence

Text: The district court sentenced Edgardo to a sixty-month term of imprisonment on Counts One through Six -- the concealment charges -- and to a concurrent seventy-two month term for the Count Seven money laundering offense related to the sham sale of Málaga #1. Edgardo argues that the court improperly sentenced him on the money laundering count to a term beyond the five-year statutory maximum applicable to the underlying concealment offenses. He claims the court should have treated the money laundering as part of the concealment and, hence, not subject to greater punishment. -35- We see no basis for overturning the sentence imposed on Count Seven. Most importantly, the district court did not err in treating Edgardo's money laundering as distinct from his actions to conceal his ownership of Málaga #1. After orchestrating the transfer of the property to Santiago and Lebrón, Edgardo arranged the elaborate conversion of the three checks that comprised the sales proceeds into eight checks that contained false references to the payees' connections with IU. By disguising the proceeds of the sale with cashier's checks made out to recipients who would never receive the funds, Edgardo constructed a second level of concealment separate from the simple property transfer. Hence, he was properly subjected to punishment for the money laundering itself, and his sentence was therefore not limited to the five-year statutory maximum for the underlying bankruptcy fraud. See 18 U.S.C. § 1956(a)(1)(B) (specifying a statutory maximum of twenty years' imprisonment for money laundering); cf. United States v. Santos, 553 U.S. 507 (2008) (concluding that certain financial transactions may not be separately punishable as money laundering), superseded by statute, Fraud Enforcement and Recovery Act of 2009, Pub. L. No. 111-21 § 2, 123 Stat. 1617, as recognized in United States v. Lyons, 740 F.3d 702, 727 (1st Cir. 2014).24 24 We note that Edgardo does not argue that his conviction for money laundering is unlawful based on the merger of the charged money laundering acts with the underlying bankruptcy fraud. See generally United States v. Grasso, 724 F.3d 1077, 1090-96 (9th Cir. 2013) (discussing the Supreme Court's holding in Santos that -36- Neither of the two cases on which Edgardo relies supports a different result. In United States v. Woods, 159 F.3d 1132 (8th Cir. 1998), the court found no abuse of discretion in the district court's decision to depart downward from the money laundering guidelines where the underlying offense was bankruptcy fraud. See id. at 1136. That decision does not say, however, that a district court must reduce a sentence in such circumstances. In the other case, United States v. Smith, 186 F.3d 290 (3d Cir. 1999), involving fraud in the operation of a lottery, the court held that a sentence imposed under the money laundering guideline was disproportionately harsh. Id. at 300. Not only have basic guidelines principles changed since Smith, see United States v. Chilingirian, 280 F.3d 704, 713-14 (6th Cir. 2002),25 but that case also is distinguishable because the challenged money-laundering guideline there produced a much harsher sentence than otherwise would have applied, see Smith, 186 F.3d at 297 (noting the fourteen-level difference in base offense level). Here, the money- certain types of unlawful financial transactions may not properly be punished independently as money laundering); id. at 1097-1104 (Berzon, J., concurring in part and dissenting in part). In so noting, we do not suggest that Edgardo has a plausible argument under Santos. 25 The Sixth Circuit noted that the Smith approach is no longer relevant after an amendment to the Guidelines Manual removed the sentencing judge's discretion to pick 'the guideline section most applicable to the nature of the offense conduct.' Chilingirian, 280 F.3d at 714 (quoting U.S.S.G. app. A (1999)); see also U.S.S.G. app. A (2000); id. app. A (2012). -37- laundering guideline on which the district court relied prescribes only a two-level increase in the base offense level. See U.S.S.G. § 2S1.1(a)(1), (b)(2)(B). In sum, we find no error in the sentence imposed on the money-laundering count. VII. Edgardo: Procedural and Substantive Sentencing Error Edgardo claims that his seventy-two-month sentence was procedurally flawed because the district court failed to properly weigh mitigating factors, and he also challenges that term of imprisonment -- twice the length of his sister's -- as unjustifiably harsh. We employ the deferential abuse-of-discretion standard in evaluating both the court's balancing of the sentencing factors and the substantive reasonableness of the district court's sentencing judgment. United States v. Suárez-González, 760 F.3d 96, 101 (1st Cir. 2014).
Edgardo argues that the court erred by giving insufficient weight to the many reasons he offered for leniency, including his mother's poor health and her need for help, his eight employees' dependence on their salaries, and his ex-wife's and minor children's reliance on his support. He also cites the sixtyfive letters submitted on his behalf by friends, neighbors, family members, and clients describing him as generous, hard-working, and responsible. With respect to the criminal activity itself, he -38- protests that the court unfairly emphasized his initial actions concealing property and failed to credit his voluntary participation in the settlement of the adversary proceeding and his payments to creditors with non-estate funds. The district court has broad discretion to balance the pertinent sentencing factors, see 18 U.S.C. § 3553,26 and the court is not required to give every factor equal weight. See SuárezGonzález, 760 F.3d at 101. Edgardo does not argue that the district court overlooked or misapprehended relevant sentencing factors but, rather, [complains] that the court gave more weight to factors that [he] regarded as unimportant and less weight to factors that [he] regarded as salient. Id. at 102. However, making a judgment about the proper balance of factors is precisely the function that a sentencing court is expected to perform. Id. Indeed, the district court explained that its choice of sentence took into account the rationales Edgardo offered for a lenient sentence -- including his mother's and children's needs, the small impact of his fraud on creditors, and the letters of recommendation -- along with the countervailing need to convey the 26 Under § 3553(a), a sentencing court must impose a sentence sufficient, but not greater than necessary, to achieve the purposes of sentencing. 18 U.S.C. § 3553(a). The factors courts should consider in determining the appropriate sentence include the nature and circumstances of the offense, the defendant's history and characteristics, and the need for the sentence to promote respect for the law and provide just punishment for the crime. Id. § 3553(a)(1), (2). -39- message that the laws are to be obeyed. The court stated that, notwithstanding the mitigating factors, it cannot overlook the seriousness of the offense, the actions of this defendant, and the apparent absence of clear repentance or remorse for criminal conduct that Edgardo undertook knowingly and with deliberation. The court's moderate approach is reflected in its decision to impose a sentence below the bottom of the guideline range of 87 to 108 months.27 In sum, the district court met its obligation to weigh the competing sentencing considerations, and it did not commit procedural error when it rejected Edgardo's differing assessment of the balance. See Suárez-González, 760 F.3d at 101-02.
Edgardo also attacks his sentence as substantively unreasonable, arguing that his circumstances justify a downward departure to a sentence of probation with home confinement, yet the court imposed a term of imprisonment twice as long as his sister's. In so arguing, Edgardo depicts Astrid as the mastermind of the bankruptcy fraud, pointing to her legal experience and prior similar conduct in her own bankruptcy. 27 The government had requested a sentence of 108 months, describing that punishment as conservative given the egregiousness of this case, the way in which he laundered the funds, used the family members and appropriated identities for the purpose of defrauding the Federal Court. -40- As explained in the preceding section, however, the district court took a measured approach to the pertinent sentencing factors, and its choice of emphasis . . . is not a basis for a founded claim of sentencing error. United States v. Ramos, 763 F.3d 45, 58 (1st Cir. 2014) (omission in original) (internal quotation marks omitted). Significantly, the court sided with Astrid in assessing the siblings' efforts to lay primary blame on the other. Pointing to Astrid's testimony that Edgardo was the instigator [and] master mind, the court noted that she didn't benefit or receive extra money from this, but this was all done for [Edgardo's] financial gain. The court further observed that Edgardo was not only a widely known plastic surgeon, but he also had earned a JD and thus knew about the law. Moreover, Edgardo alone was found guilty of money-laundering, which accounted for part of the differential in the siblings' sentences. As we have noted on multiple occasions, [t]he linchpin of a reasonable sentence is a plausible sentencing rationale and a defensible result. Ramos, 763 F.3d at 58 (internal quotation marks omitted). The district court provided both here. We therefore reject Edgardo's claim that his sentence was substantively unreasonable. -41-