Opinion ID: 694116
Heading Depth: 4
Heading Rank: 4

Heading: Effect of United States v. Stein.

Text: 47 The final issue on the money-laundering counts is whether the general jury instruction defining knowingly negated an element of money laundering from the jury's consideration. Knapp cites to the recent decision, United States v. Stein, 37 F.3d 1407 (9th Cir.1994), cert. denied, 63 USLW 3628 (Feb. 21, 1995). 48 Whether a jury instruction misstates elements of a statutory crime is a question of law reviewed de novo. United States v. Johnson, 956 F.2d 197, 199 (9th Cir.1992). 49 The Stein court reversed convictions for money laundering because a general instruction defining knowingly conflicted with the money-laundering instruction. The court distinguished between the two types of knowledge in money laundering: [w]hile to sustain a conviction the defendant must have known that the primary predicate activity (in this case [Stein ] securities, mail and wire fraud) was unlawful, he need not have known that the secondary act of laundering the proceeds was unlawful. Stein, 37 F.3d at 1410 (citation omitted). 50 In Stein, the trial court instructed the jury the government must prove ... the defendant knew that the property represented the proceeds of securities fraud, mail fraud, or wire fraud. Id. The court then gave a general instruction on knowledge: [a]n act is done knowingly if the defendant is aware of the act and doesn't act through ignorance, mistake or accident. The Government is not required to prove that the defendant knew that his acts or omissions were unlawful. Id. This general instruction is Ninth Circuit Model Criminal Instruction No. 5.06 (which was given in Knapp's case). The Stein court held: 51 This general instruction conflicts with the district court's previous instruction on money laundering, because it purports to apply to all of the defendant's actions--his predicate acts of fraud as well as his secondary act of money laundering. 52 Where two instructions conflict, a reviewing court cannot presume that the jury followed the correct one. Here, by applying the later general instruction, a jury could convict Stein without finding that he knew his predicate acts of fraud were unlawful. Taken as a whole, the instructions omitted an element of the offense.... Such error cannot be harmless. 53 Id. 54 The instructions in Knapp's case were similar, but with two critical differences. Here, instruction No. 18 gave the elements of money laundering: 55 To establish the crime [of money laundering], the government must prove beyond a reasonable doubt the following four elements: 56
57 (2) The defendant must know that the transaction involved property which represented the proceeds of some form of unlawful activity. 58 (3) The transaction involved property which in fact was drug trafficking proceeds. 59 (4) The defendant engaged in the transaction with the intent to conceal or disguise the nature, location, source, ownership, or control of property which was drug trafficking proceeds. (emphasis added). 60 As in Stein, the money-laundering instruction was followed immediately by a general instruction defining knowingly: 61 An act is done knowingly if the defendant is aware of the act and does not act or fail to act through ignorance, mistake or accident. As to money laundering, the government is not required to prove that the defendant knew that his acts or omissions were unlawful. (emphasis added). 62 The emphasized phrase as to money laundering distinguishes the latter instruction from the one given in Stein. In Stein, the court reasoned that the knowingly instruction purported to apply to both the object of the conspiracy and to the money laundering act itself. The added phrase as to money laundering made sufficiently clear that the corresponding sentence applied only to the crime itself. 63 Moreover, the court gave the following additional instruction not given in Stein: 64 The term knowing that the property involved in a financial transaction represents the proceeds of some form of unlawful activity means that the defendant knew that the property involved in the transaction represented proceeds from some form, though not necessarily which form of activity that constitutes a felony under federal or state law. Drug trafficking is a felony under federal or state law. 65 Combined, these differences distinguish Stein. These differences directly address the possibility that the jury could have omitted the second element of money laundering and convicted without finding Knapp knew the money represented illegal drug proceeds.