Court Opinion

ID: 26456
Source: CourtListenerOpinion
Date Created: 2010-04-25 08:52:39+00
Date Added: 2024-06-11T14:55:32.100065
License: Public Domain

Revised January 22, 2002

                 UNITED STATES COURT OF APPEALS
                      For the Fifth Circuit

                             No. 00-41041
                             No. 00-41042

                      UNITED STATES OF AMERICA,

                                                       Plaintiff-Appellee,

                                  VERSUS

                       JUAN GARCIA RODRIGUEZ,

                                                       Defendant-Appellant.

          Appeals from the United States District Court
                for the Southern District of Texas

                           January 4, 2002
Before GARWOOD, DeMOSS, and DENNIS, Circuit Judges.

DeMOSS, Circuit Judge:

     Appellant Juan Garcia Rodriguez was charged in two separate

indictments for his role in the illegal transporting of aliens.

The indictments included charges of conspiracy, transportation of

aliens and money laundering. Rodriguez was ultimately sentenced to

eighteen months for an alien-transporting charge in the first

indictment.   After    a   jury   trial    for   the    second   indictment,
Rodriguez      was    found   guilty    on     three    counts      involving     money

laundering and was sentenced to 80 months’ imprisonment to run

concurrent to his 18-month sentence.                      Rodriguez now appeals,

asserting that the evidence was insufficient to convict him of the

money-laundering charges, that the district court failed to conduct

a proper inquiry into his waiver of conflict-free counsel and that

the total offense level in the pre-sentencing report (“PSR”) was

erroneously based on his income rather than on the actual amount of

money laundered.

                                     BACKGROUND

     Beginning in 1996, Juan Garcia Rodriguez (“Rodriguez”) was

engaged in an operation smuggling undocumented aliens from Mexico

to North Texas, primarily to Dallas or Garland, Texas.                      He would

charge   the    aliens     between     $1,000     and     $1,200    each   per   trip.

Rodriguez      also    recruited     his       brother,      Juan   Antonio      Garcia

(“Garcia”), to participate in his smuggling operation.

     In September 1999, Garcia and Rodriguez’s stepson, Juan Garcia

Rodriguez      (“Juan”),      were   apprehended        at    the   Sarita,      Texas,

checkpoint while transporting nine illegal aliens in the back of a

1999 Ford conversion van.            Garcia cooperated with the government

and identified Rodriguez as the leader of the smuggling operation.

As a result of Garcia’s cooperation, the government initiated an

                                           2
investigation of Rodriguez and established surveillance at his

residence.

     On January 21, 2000, Rodriguez was stopped at the United

States Border Checkpoint facility south of Falfurrias, Texas, and

was arrested.      He was accompanied by his 16-year-old daughter and

Garcia.    Rodriguez was driving a 1997 Chevrolet G-van conversion,

the vehicle subject to the charges contained in counts one, seven

and nine on appeal before this Court.           In the rear of the vehicle,

concealed beneath and behind clothing and other materials, were

seven undocumented aliens.

     Based upon the information supplied by Garcia and other

corroborating information, the government obtained a search warrant

for Rodriguez’s house and executed it on January 21, 2000.                     The

search revealed a number of financial documents and records that

formed the basis of the subsequent money laundering charges.                    The

search also revealed cash, multiple vehicles and many personal

luxury    items.     The    records   obtained      were    used    to   establish

Rodriguez’s    yearly      expenditures      from   1996-2000.       These     were

compared to Rodriguez’s recorded annual income.                      The records

revealed that Rodriguez earned a total of $93,103.22 between 1996

and 2000, but spent $368,787.07 for a documented differential of

$275,683.85.

     The    1997   Chevrolet    G-van       conversion     that    Rodriguez    was

arrested in, and which is the subject of the money laundering

                                        3
counts on appeal, was originally purchased in Garcia’s name by

Rodriguez.       Rodriguez   told   the    salesperson   that   he   had   just

recently gotten married and that is why the vehicle had to be in

Garcia’s name.     However, it appears that the vehicle was chosen by

Rodriguez and that it was Rodriguez who negotiated the price.

Furthermore, it was Rodriguez who picked up the car’s license

plates on October 16, 1997.         Rodriguez gave Garcia $18,000 to pay

for the van on October 16, 1997.           Garcia then paid the remaining

balance of the vehicle on November 10, 1997, which amounted to

$10,209.42; Garcia testified that he received this amount from

Rodriguez.      This all occurred during a period in which Rodriguez

was depositing and withdrawing large sums of money into and out of

his bank account, including an insurance settlement check for

$10,884.25.     About six months after November 10, 1997, Rodriguez

purchased the vehicle back from Garcia for approximately $5,000 to

$6,000.   The vehicle was in Rodriguez’s name as of his arrest on

January 21, 2000.

     Rodriguez was charged in an 11-count indictment (No. 00-41041

on appeal or “No. ‘41") involving conspiracy, the transportation of

aliens    and    money   laundering        in   violation   of       8   U.S.C.

§ 1324(a)(1)(A)(i)-(iii), (v)(I)-(II) and 18 U.S.C. § 1956(a)(1)

(A)(i).   Pursuant to a plea agreement, Rodriguez entered a plea of

guilty to one count of transporting aliens and the government

agreed to dismiss the conspiracy count but retained the money

                                       4
laundering counts.    The government later moved to also dismiss the

money laundering counts, but did so only to include the counts in

a subsequent nine-count indictment (No. 00-41042 on appeal or “No.

‘42") involving money laundering in violation of 18 U.S.C. §§ 2,

1956(a)(1)(A)(i),     1957(a).      Counts     one   through    four   of    this

subsequent indictment were the same as counts eight through eleven

in the previous indictment (No. 41).

      Rodriguez was ultimately sentenced in district court before

the   Honorable   Filemon   B.     Vela   to   18    months    for   the    alien

transporting charge in the first indictment (No. ‘41).                 After a

jury trial for the second indictment (No. ‘42), Rodriguez was found

guilty of counts one, seven and nine and sentenced by the Honorable

Hilda G. Tagle to 80 months’ imprisonment to run concurrent to his

18 month sentence.      Count one charged Rodriguez with aiding and

abetting the commission of money laundering by purchasing a 1997

Chevrolet G-van with proceeds from the specified unlawful activity

of transporting and harboring illegal aliens in violation of 18

U.S.C. §§ 2, 1956(a)(1)(A)(i).       Count seven charged Rodriguez with

engaging in financial transactions with proceeds from unlawful

activity under    8   U.S.C.   §   1324   involving     $10,209.42     for    the

purchase of the 1997 Chevy G-van in violation of 18 U.S.C. §§ 2,

1957(a).   Count nine charged him with money laundering by engaging

in a financial transaction from proceeds from specified unlawful

activity under 8 U.S.C. § 1324 with the intent to conceal the

                                      5
source of the $28,209.42 in proceeds involving the 1997 Chevy G-van

in violation of 18 U.S.C. §§ 2, 1956(a)(1)(B)(i).                 Rodriguez now

appeals his sentence in No.‘42, asserting that the evidence was

insufficient to convict him of the money laundering charges, that

the district court failed to conduct a proper inquiry into his

waiver of conflict-free counsel and that the total offense level in

the PSR was erroneously based on his income rather than on the

actual amount of money laundered.

                                   DISCUSSION

Rodriguez’s appeal as to the first indictment (No. 00-41041)

      The government asserts that the notice of appeal filed by

Rodriguez in No. ‘41 is untimely but concedes that his notice of

appeal as to No. ‘42 is timely.               Rodriguez’s judgment in No. ‘41

was pronounced on May 11, 2000 and formally entered on May 19,

2000.   Rodriguez’s notice of appeal to No. ‘41 was filed on August

31, 2000.      Under FED. R. APP. P. 4(b)(1):

            In a criminal case, a defendant’s notice of appeal
            must be filed in the district court within 10 days
            after the later of:

            (i) the entry of either the judgment of the order
            being appealed; or

            (ii) the      filing    of    the   government’s     notice   of
            appeal.

The   filing    of   a   notice    of    appeal   within   the   10-day    period

prescribed by this rule is mandatory and jurisdictional.                   United

                                          6
States v. Robinson, 361 U.S. 220, 224 (1960)(addressing Rule 4(b)’s

predecessor rule).      “A timely notice of appeal is necessary to the

exercise of appellate jurisdiction.”           United States v. Cooper, 135
F.3d 960, 961 (5th Cir.1998) (citing Robinson, 361 U.S. at 224).

“Simply put, if a notice of appeal is untimely, we cannot entertain

the merits of a case.”      United States v. Truesdale, 211 F.3d 898,

902 (5th Cir. 2000).

      Rodriguez does not address the issue of the timeliness of the

notice of appeal in No. ‘41 in his brief and has filed no reply

brief as to this issue.         Rodriguez also does not raise a single

issue from No. ‘41 on appeal.          All of his claims concern errors in

his money laundering case, No. ‘42.            As we are left without any

explanation as to why we should rule otherwise, Rodriguez’s appeal

as to No. ‘41 is dismissed for lack of jurisdiction due to the

untimeliness   of   the   notice       of   appeal   under   FED. R. APP. P.

4(b)(1)(i).

The sufficiency of the evidence

      When reviewing the sufficiency of the evidence in a criminal

case, this Court views the evidence, both circumstantial and

direct, in the light most favorable to the government with all

reasonable inferences to be made in support of the jury’s verdict.

United States v. Moser, 123 F.3d 813, 819 (5th Cir. 1997).                 In

reviewing the jury’s decision, this Court recognizes that the jury

is   free to   choose   among    all    reasonable    constructions   of   the

                                        7
evidence and this Court will accept all credibility choices that

tend to support the jury’s verdict.   United States v. Dean, 59 F.3d
1479, 1484 (5th Cir. 1995).   “Moreover, we determine only whether

the jury made a rational decision, not whether its verdict was

correct on the issue of innocence or guilt.”     Id. (citing United

States v. Jaramillo, 42 F.3d 920, 923 (5th Cir. 1995)).   “However,

we must reverse a conviction if the evidence construed in favor of

the verdict ‘gives equal or nearly equal circumstantial support to

a theory of guilt and a theory of innocence of the crime charged.’”

Jaramillo, 42 F.3d at 923 (quoting United States v. Menesses, 962
F.2d 420, 426 (5th Cir. 1992)).

     Rodriguez claims that the jury had insufficient evidence to

come to a guilty verdict on counts seven and nine.      Count seven

charged Rodriguez with engaging in a financial transaction with

proceeds from an unlawful activity under 8 U.S.C. § 1324 in

violation of 18 U.S.C. §§ 2, 1957(a).   To prove an offense under 18

U.S.C. § 1957(a), the government must prove that (1) property

valued at more than $10,000 was derived from a specified unlawful

activity (here transporting and harboring undocumented aliens); (2)

Rodriguez engaged in a financial transaction with the property (the

purchase of the van); and (3) Rodriguez knew that the property was

derived from unlawful activity.   United States v. Wilson, 249 F.3d
366, 379 (5th Cir. 2001).   Count nine charges Rodriguez with money

laundering by engaging in a financial transaction from proceeds

                                  8
from a specified unlawful activity under 8 U.S.C. § 1324 with the

intent   to   conceal     the   source   of    the    $28,209.42   in   proceeds

involving the 1997 Chevy G-van in violation of 18 U.S.C. §§ 2,

1956(a)(1)(B)(i).       To prove a violation of § 1956(a)(1)(B)(i), the

government must show that the defendant conducted a financial

transaction that he knew involved the proceeds of an unlawful

activity and that he did so knowing that the transaction was

intended to conceal or disguise the nature of the proceeds. United

States v. Powers, 168 F.3d 741, 747-48 (5th Cir. 1999) (stating

that the government “must show that the defendant desired to create

the appearance of legitimate wealth or otherwise to conceal the

nature of funds so that the money could enter the economy as

legitimate funds”).

     Rodriguez claims that the evidence was insufficient because it

did not prove beyond a reasonable doubt that the $10,209.42 that

was used to pay the remaining balance on the van on November 10,

1997, involved the proceeds of the specified unlawful activity of

transporting and harboring aliens.             Rodriguez specifically cites

the fact that he deposited a check for $10,884.25 into his bank

account on September 15, 1997.                He then withdrew $10,700 on

September 18, 1997 and he argues he could have used the money he

withdrew to purchase a cashier’s check for $10,209.42 in November

1997, which was then used to pay the remaining balance on the van.

Rodriguez     therefore    claims   that      there   is   no   proof   that   the

                                         9
cashier’s check was purchased with the proceeds from an unlawful

activity and that he cannot be found guilty under counts seven and

nine.

     Though Rodriguez offered an alternate legitimate source for

the funds used to purchase the van, Rodriguez ignores the fact that

the jury was free to discredit Rodriguez’s theory that the funds

used to acquire the Chevy van were from a legitimate source.

United States v. Restrepo, 994 F.2d 173, 182 (5th Cir. 1993) (“The

jury is the final arbiter of the weight of the evidence, and of the

credibility of witnesses”).    The jury heard evidence from both

sides as to where the money could have come from, including

evidence that Rodriguez commingled his funds.    Evidence that the

defendant commingled illegal proceeds with legitimate business

funds is sufficient to support a conviction under § 1956.   United

States v. Willey, 57 F.3d 1374, 1386 (5th Cir. 1995); United States

v. Jackson, 935 F.2d 832, 840 (7th Cir. 1991).       “[I]t is not

necessary to prove with regard to any single transaction that the

defendant removed all trace of his involvement with the money or

that the particular transaction charged is itself highly unusual.”

Willey, 57 F.3d at 1386.   The government is under no duty to trace

the individual funds and “it is not necessary that a transaction be

examined wholly in isolation if the evidence tends to show that it

is part of a larger scheme that is designed to conceal illegal

proceeds.”   Id.; Jackson, 935 F.2d at 840 (“We       do not read

                                 10
Congress’s use of the word ‘involve’ as imposing the requirement

that the government trace the origin of all funds deposited into a

bank account to determine exactly which funds were used for what

transaction.”).    In   short,    the   jury   was    free   to   discredit

Rodriguez’s explanation of the source of the funds and did so.

There was no error on the part of the jury and the evidence was

sufficient to support this finding.

Defense counsel’s potential conflict of interest

     Rodriguez also argues that the district court inadequately

inquired into a potential conflict of interest by Rodriguez’s trial

attorney Paul Hajjar.    Hajjar represented Juan Garcia Rodriguez

(Rodriguez’s stepson) in his alien transporting case.             Prior to

trial, Hajjar filed a “notice of potential conflict” with the

court, because apparently Garcia (not Juan Rodriguez) was listed as

a potential witness.    Hajjar did not allege, however, that he had

an actual conflict of interest.    At a hearing held on May 19, 2000,

the district court inquired whether either party had any intention

of calling Juan Rodriguez as a witness.              Both Hajjar and the

government indicated that they did not intend to call Juan and

they both agreed that no actual conflict existed at that time.

However, the government still sought a “waiver” from Rodriguez

concerning any “potential conflict.”       Hajjar then discussed the

issue with Rodriguez over a brief recess and when he returned,

Rodriguez swore under oath that he was aware of Hajjar’s prior

                                   11
representation of Juan Rodriguez, aware of the “potential conflict

of interest,” had discussed the matter with Hajjar and advised that

he did not want Hajjar to withdraw from the case.   The court agreed

that there was no conflict of interest in the case because Juan

Rodriguez was not even a potential witness.

     “We review the district court’s acceptance of defendant’s

waiver of conflict-free counsel for simple error.”    United States

v. Moore, 37 F.3d 169, 174 (5th Cir. 1994).    The Sixth Amendment

right to counsel includes the right to conflict-free counsel and a

conflict exists when the defense counsel places himself in a

position conducive to divided loyalties. Id.   In a situation where

the defendant objects to his representation on the basis of a

conflict and the trial judge fails to inquire into the merits of

the objection, the defendant is entitled to automatic reversal and

a new trial.   Holloway v. Arkansas, 435 U.S. 475, 488-90 (1978).

When there is no objection from the defendant but the judge knew or

reasonably should have known about an apparent conflict but fails

to make an inquiry, then the defendant is only required to show

that there was an actual conflict.    Wood v. Garcia, 450 U.S. 261,

272-74, n.21 (1981).   If there is no objection and the conflict is

not apparent to the judge, then the defendant must show that an

actual conflict existed and that this conflict adversely affected

his lawyer’s performance. Cuyler v. Sullivan, 446 U.S. 335, 347-48

(1980).   In most cases, it is the defense attorney in a criminal

                                 12
matter who is in the best position, professionally and ethically,

to determine when a conflict exists or will probably develop in the

course of the trial.      Holloway, 435 U.S. at 485.

     Though this Circuit has never held that a “notice of potential

conflict” is the functional equivalent of an objection, there is

some support for the argument that filing such a notice requires

the district court to conduct an inquiry into the matter.               Cf.

United States v. Wayman, 510 F.2d 1020, 1025-26 (5th Cir. 1975)

(holding that, in the event of a conflict of interest between co-

defendants, where there was neither objection, claim, nor notice to

the court of any alleged conflict, there is no need for the trial

court to advise the defendant of the right to separate counsel);

see also Cambell v. Rice, 265 F.3d 878, 885 (9th Cir. 2001) (citing

Wood, 450 U.S. at 272, as supporting that “[a] court must make an

inquiry   whenever   it   knows   or    reasonably   should   know   that   a

potential conflict of interest exists”); United States v. Pergler,

233 F.3d 1005, 1010 (7th Cir. 2000) (“If an attorney brought the

potential conflict of interest to the attention of the court, or

the court knew or reasonably should have known about the conflict,

we will assume prejudice when the judge fails to address the

conflict adequately.”).     In the present case, after the filing of

the “notice of potential conflict,” the district court made an

inquiry into the matter and even had Rodriguez himself take the

stand to testify before he waived his potential conflict claim.

                                       13
The district court, therefore, fulfilled any obligation it may have

had arising from the filing of the “notice of potential conflict,”

and resolved     the    matter    concluding          that    there   was   no    actual

conflict.       Rodriguez       never    objected        again     after    the   court

determined that no conflict existed.                  There is no evidence of any

actual conflict.       We hold that, under a “simple error” standard of

review, the district court’s acceptance of Rodriguez’s waiver of

potential conflict was not in error.

The district court’s reliance on the PSR’s recommendation
attributing $275,683.85 to relevant money-laundering conduct

     In his final argument on appeal, Rodriguez asserts that his

money-laundering sentence must be vacated because the total offense

level    was   erroneously       based    upon        the    amount   of    income   he

purportedly    had     earned    rather        than    on    the   amount    of   money

laundered.     A district court’s valuation of funds under U.S.S.G.

§ 2S1.1(b) is a determination of fact and is therefore reviewed for

clear error.     United States v. Hull, 160 F.3d 265, 268 (5th Cir.

1998).   Under U.S.S.G. § 2S1.1(b)(2)(C) (2000), a defendant’s base

level may be increased by 2 levels if the value of the funds

laundered exceeds $200,000.             Rodriguez asserts that it was error

for the PSR to take into account the amount of money he spent in

excess of his reported income, approximately $275,000, instead of

just the amount of money laundered by him.                   Rodriguez believes that

the court should be limited to considering the amount that he

laundered in the counts he was found guilty of committing.

                                          14
     Though it is true that § 2S1.1(b) takes into account the

amount laundered, the additional money might also be considered

under U.S.S.G. §1B1.3 as relevant conduct.1    See United States v.

Johnson, 971 F.2d 562, 576 n. 10 (10th Cir. 1992) (noting that

funds associated with uncharged instances of money laundering can

be added in to determine the offense level if they are within the

scope of relevant conduct under §1B1.3).    However, the application

notes to §1B1.3 state:

          A particular guideline (in the base offense level
          or in a specific offense characteristic) may
          expressly direct that a particular factor be
          applied only if the defendant was convicted of a
          particular statute.      For example, in §2S1.1
          (Laundering of Monetary Instruments), subsection
          (a)(1) applies if the defendant “is convicted under
          18 U.S.C. § 1956(a)(1)(A), (a)(2)(A), (a)(3)(A).”
          Unless such an express direction is included,
          conviction under the statute is not required.

U.S.S.G. § 1B1.3, application note 6 (1998) (emphasis added).    We

read this to mean that unless a defendant is convicted under the

money laundering statute, money laundering cannot be used against

him as relevant conduct to enhance his sentence.    However, monies

relating to a conviction under the money laundering statute may be

considered, and a greater amount of money than is charged in the

indictment or proven beyond a reasonable doubt could be considered

if it relates to the conviction.     In order for the greater amount

     1
          Though application of U.S.S.G. § 1B1.3 seems more suited
in the present case to instances involving an accomplice or a
conspiracy.

                                15
of   money   to   be   considered,   the   government   must   prove   by   a

preponderance of the evidence that the money was laundered.            Hull,
160 F.3d at 269.       In the present case, all the government has done

is show a discrepancy between the income Rodriguez earned and the

value of his total assets.      The government has failed to prove that

$275,683.85 was laundered or how it was laundered.         The government

has therefore fallen short of its burden of proof and it was

clearly erroneous for the district court to consider the entire

$275,683.85 without further proof that it was laundered.2

                                 CONCLUSION

      Therefore, having carefully reviewed the record of this case

and the parties’ respective briefing and for the reasons set forth

above, we hold that the jury had sufficient evidence on which to

convict Rodriguez, that the district court did not err in the

manner in which it inquired into the potential conflict of interest

between Hajjar and Rodriguez, but that the district court did err

in considering the additional $275,683.85 included in the PSR when

determining Rodriguez’s sentence. Therefore, the district court is

      2
          As an aside, it may be of interest to note (i) that the
2001 version of the Guidelines makes no distinction between amounts
involved in the offense and (ii) that under the current version,
Rodriguez would have received the two level increase anyway, even
if the lower amount of money was used.

                                     16
AFFIRMED in part, but the sentence of the district court is

VACATED, and the case is REMANDED for re-sentencing.

          AFFIRMED in part, and VACATED and REMANDED.

                               17