Court Opinion

ID: 3016808
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:16:08.217385+00
Date Added: 2024-06-11T11:47:01.733629
License: Public Domain

___________

                                   No. 95-3559
                                   ___________

United States of America,              *
                                       *
           Appellee,                   *
                                       *   Appeal from the United States
     v.                                *   District Court for the
                                       *   Western District of Missouri.
Paul William Cunningham,               *
                                       *
           Appellant.                  *

                                   ___________

                      Submitted:   February 13, 1996

                          Filed:   May 6, 1996
                                   ___________

Before BOWMAN, LOKEN, and MORRIS SHEPPARD ARNOLD, Circuit Judges.
                               ___________

BOWMAN, Circuit Judge.

     A jury convicted Paul William Cunningham of one count of conspiring
to transport money obtained by fraud in interstate commerce in violation
of 18 U.S.C. § 371 (1994) and one count of transporting money obtained by
fraud in interstate commerce in violation of 28 U.S.C. § 2314.             The
District Court1 sentenced Cunningham to two concurrent terms of twenty
months of imprisonment followed by two concurrent terms of three years of
supervised release.    The court also imposed a $100 assessment and ordered
Cunningham to make restitution to the victims of his crimes in the amount
of $155,832.37.   Cunningham timely appeals his convictions.     We affirm.

     1
     The Honorable Dean Whipple, United States District Judge for
the Western District of Missouri.
                                              I.

       Cunningham married Carol W. Jones in the early 1960s.                     By the mid-
1960s they were divorced.        Between 1965 and 1988, Cunningham and Jones did
not maintain contact with each other.              By 1988, Jones had become president
and chairman of the board of directors of Jackson County Escrow Services,
Inc.     She also owned twenty percent of the outstanding shares of Jackson
County    Escrow.        As   president      of   Jackson    County    Escrow,    Jones    was
responsible for the day-to-day operations of the corporation.                        In 1986
Jones began stealing large amounts of money from the corporation.                    She used
her    authority over the corporation's accounts, including its escrow
account, to transfer corporate and client funds to satisfy her personal
obligations.        As    a   result    of    a    probe    by   the   Federal    Bureau    of
Investigation, Jones pleaded guilty to mail fraud charges and cooperated
with the FBI in its investigation of Cunningham and others.                    As a part of
her plea agreement, Jones testified against Cunningham at his trial.

       Jones   testified       that    she   contacted      Cunningham    in     1988,   while
Cunningham was living in Oklahoma, and asked him to loan her $100,000 to
$150,000.    Jones needed the money to cover her current husband's gambling
debts and to make up a shortfall in the escrow account of Jackson County
Escrow.    Jones believed that Cunningham might have funds available because
she believed that he was a successful bookmaker.                 Cunningham was not able
to loan Jones any money.         Cunningham later asked if Jones could loan him
$20,000, and Jones agreed to loan him $20,000 at ten percent interest.                      As
the new relationship between Jones and Cunningham blossomed, Jones began
sending or wiring from Missouri large amounts of escrow funds to Cunningham
in Oklahoma.        In some instances Jones sent Cunningham checks, which
Cunningham endorsed, that were inscribed on their face as "Escrow Account"
checks.     In other instances, Jones would wire money.                  At the same time,
Cunningham and Jones were engaged in daily telephone conversations.
Cunningham, however, used the code

                                              -2-
name "Don" when he called Jones at her office.                  Additionally, Federal
Express packages sent from Jones to Cunningham were addressed to code names
for Cunningham such as Don Hawkins at a rented private mail box.

        When Cunningham received money from Jones, he generally sent back
some percentage of the money to Jones in Missouri.               The money Cunningham
returned was deposited in the personal bank account of Harold and Carol
Jones at a rural bank near the Lake of the Ozarks.                In all, Jones sent
Cunningham $155,832.37.       Cunningham sent $70,491.64 back to Jones, keeping
$85,340.73 for his own use.      According to Jones, she hoped that Cunningham
would    use   the   escrow   money   to   win   more   money   through   his   illegal
bookmaking.      Jones testified that toward the beginning of their joint
activities she told Cunningham that she was getting the money from the
escrow account of her business and that she would probably have to go to
jail if she did not pay back the money she had stolen.             She also testified
that it was Cunningham's idea to use false names when sending funds through
Federal Express and when calling Jones at her office.

        Cunningham testified at trial in his own defense.           He denied that he
knew about Jones's illegal activities.           He testified that he believed that
Jones was loaning him the money she was sending him.            He admitted, however,
that no documents existed that would show that the transfers were loans.
He also testified that he was unemployed during the relevant time period
and that his only source of income was from his illegal bookmaking
activities.     When asked on cross-examination why Jones required him to
remit a portion of the funds back to her, Cunningham testified that he
never asked Jones and that he "remained ignorant."               Trial Tr. at 258.

        Jones testified that after Jackson County Escrow failed she and
Cunningham had a number of conversations concerning the length of the
statute of limitations, Cunningham's belief that he would

                                           -3-
not have to return the money because the limitations period had expired,
and the "story" that Jones would give to investigators regarding the
transfers of funds to Cunningham.         When Jones suggested that she tell the
FBI that her husband was placing bets through Cunningham, Cunningham
demurred.    He said that he did not want the FBI to know that money had been
transferred across state lines.          At trial, Cunningham testified that he
knew it was illegal to transport across state lines money that had been
obtained through theft or fraud.

                                          II.

     Cunningham argues that the District Court abused its discretion by
instructing the jury, consistent with Eighth Circuit Model Criminal Jury
Instruction 7.04 (1994), that it could impute knowledge to Cunningham if
it found that he deliberately remained ignorant of the fact that the money
he received had been obtained through fraud or theft.            Cunningham also
argues that the District Court should have granted his motion for a
judgment of acquittal because the evidence is insufficient to support the
jury's verdict on either count.         We address each of these issues in turn.

A.   Deliberate Ignorance Instruction

     According to Cunningham, the only contested element of the offenses
charged     was   the   element   of   knowledge.   Cunningham   has   steadfastly
maintained that he had no knowledge of Jones's illegal activities.            With
respect to the proof required for the jury to find that the defendant acted
knowingly, the District Court instructed the jury in relevant part as
follows:

           You may find that the defendant acted knowingly if you
     find beyond a reasonable doubt that the defendant was aware of
     a high probability that the money sent to him by Carol Jones
     was stolen or had been obtained by fraud from Jackson County
     Escrow and that he deliberately avoided learning the truth.
     The element of knowledge may be

                                          -4-
     inferred if defendant deliberately closed his eyes to what
     would otherwise have been obvious to him.

           You may not find that the defendant acted knowingly,
     however, if you find that the defendant actually believed that
     the money sent to him was not stolen or obtained by fraud from
     Jackson County Escrow. A showing of negligence, mistake, or
     carelessness is not sufficient to support a finding of
     knowledge.

Instruction 22.    The District Court's instruction was patterned after
Eighth Circuit Model Criminal Jury Instruction 7.04, which is based upon
our decisions in United States v. Massa, 740 F.2d 629, 643 (8th Cir. 1984),
cert. denied, 471 U.S. 1115 (1985), United States v. Graham, 739 F.2d 351,
352 (8th Cir. 1984), and United States v. Kershman, 555 F.2d 198, 200 (8th
Cir.), cert. denied, 434 U.S. 892 (1977).                Cunningham argues that this
deliberate ignorance (or willful blindness) instruction should not have
been given because it is not supported by the evidence.              He contends that
the evidence proved either that he did or did not have actual knowledge of
Jones's illegal activities.        In Cunningham's view, no evidence tends to
show that he made a deliberate effort to avoid learning the truth.

     We will reverse a district court on an instructional issue only when
the court has abused its wide discretion to formulate jury instructions.
United States v. Darden, 70 F.3d 1507, 1541 (8th Cir. 1995), cert. denied,
No. 95-8295, 1996 WL 138047 (U.S. Apr. 15, 1996).                If the instructions,
viewed as a whole, fairly and adequately contain the law applicable to the
case, we will not disturb the jury's verdict.            Id.   A deliberate ignorance
instruction   should   not    be   given    in   every    case   because   there   is   a
possibility that the jury will use a "negligence standard and convict a
defendant on the impermissible ground that he should have known [an illegal
act] was taking place."      United States v. Barnhart, 979 F.2d 647, 651 (8th
Cir. 1992) (citations omitted).            In Barnhart, we stated that such an
instruction should not be given unless there is evidence from which a jury
reasonably could find

                                           -5-
"that the defendant was aware of a high probability of the existence of the
fact in question and purposely contrived to avoid learning all of the facts
in order to have a defense" to criminal charges.         Id. at 652 (citations
omitted).

     Cunningham argues that the instruction should not have been given
because, "[i]n reality, the case boils down to a credibility battle between
Mr. Cunningham and his ex-wife, Ms. Jones."          Appellant's Brief at 21.
Cunningham testified that he did not know that the money Jones was sending
him had been taken by theft or fraud from Jackson County Escrow.          Jones,
on the other hand, testified that Cunningham knew the source of the funds
because she had told him.

     If the only evidence of Cunningham's knowledge was the conflicting
testimony   of    Jones   and   Cunningham,   Cunningham's   argument   might    be
persuasive.      Cunningham, however, views the record too narrowly.      In the
course of deciding whether to give Instruction 22, the District Court
specifically found that there was evidence indicating that the defendant
was well aware that the source of Jones's funds was probably illegal.           The
evidence that the District Court relied on included the following:        (1) at
least one check made out to Cunningham was identified on its face as being
drawn on the escrow account of Jackson County Escrow; (2) Cunningham used
a false name when he called Jones's office; (3) wire transfers were made
in the names of two individuals rather than Cunningham alone; (4) Jones
eventually transferred $155,000 to Cunningham while the initial loan was
to be either $30,000 or $20,000; (5) despite the large amount of money
being "loaned" to Cunningham, Jones never asked him to sign promissory
notes and no other records were made of the transactions that would support
a finding that the transfers were legitimate loans; and (6) Cunningham was
returning to Jones almost half of the money that she transferred to him.
The evidence is sufficient to support a finding that Cunningham was
deliberately ignorant of the fact that

                                       -6-
the money Jones was sending him had been obtained by fraud or theft, and
we thus conclude that in the circumstances of this case the District Court
was   well     within     its   discretion    to   instruct   the   jury   on    deliberate
ignorance.

B.    Sufficiency of the Evidence

      When reviewing a district court's denial of a motion for acquittal,
our standard of review is quite narrow.             We must view the evidence in the
light most favorable to the jury's verdict, giving the government the
benefit of the reasonable inferences that may be drawn from the evidence.
Darden, 70 F.3d at 1517.            "We will reverse a conviction for insufficient
evidence and order the entry of a judgment of acquittal only if no
construction of the evidence exists to support the jury's verdict."                      Id.
In contrast, a motion for a judgment of acquittal should be denied when
"there    is    substantial       evidence     justifying     an    inference    of   guilt
irrespective of any countervailing testimony that may be introduced."
United States v. Armstrong, 16 F.3d 289, 292 (8th Cir. 1994).                   "The jury's
verdict must be upheld if there is an interpretation of the evidence that
would allow a reasonable-minded jury to find the defendant guilty beyond
a reasonable doubt."        United States v. White, No. 95-2949, 1996 WL 154228,
at *1 (8th Cir. Apr. 4, 1996).

      Cunningham argues that the government did not introduce sufficient
evidence of his knowledge that the transferred funds had been obtained
through      fraud   or    theft.      He    insists   that   "[t]he    only     clear   and
uncontradicted testimony" is Cunningham's testimony that he never had any
knowledge that the money involved in his transactions with Jones had been
obtained through theft and fraud.            Appellant's Brief at 18.       Cunningham's
argument misses the mark both factually and legally.                 First, Cunningham's
testimony is directly contradicted by Jones's testimony that she told him
that the money had been stolen from her company's escrow account.

                                             -7-
Second, the government is under no obligation to introduce "clear and
uncontradicted testimony."

       A reasonable jury could have credited Jones's testimony and found
that Cunningham knew the source of the money.           As Cunningham states in his
brief, the question of actual knowledge of Jones's illegal activities
"boils down to a credibility battle between Mr. Cunningham and his ex-wife,
Ms. Jones."     Appellant's Brief at 21.        This Court, however, is not in the
best position to judge the credibility of witnesses.                It is for the jury
to assess the credibility of witnesses and resolve conflicting testimony.
United States v. Anderson, 78 F.3d 420, 422-23 (8th Cir. 1996).                 In this
case, Jones's testimony is sufficient to establish that Cunningham knew
that    the   funds   he   was   transporting    and   conspiring    to   transport   in
interstate commerce had been obtained by fraud or theft.

       Additionally, we conclude that the jury properly could have convicted
Cunningham even if it did not credit Jones's testimony.                   As we decided
above, the evidence was sufficient to support the giving of an instruction
on deliberate ignorance.         As Cunningham testified, he remained ignorant of
Jones's reasons for requiring Cunningham to remit a portion of the money
she sent him from Jackson County Escrow's account to her personal bank
account.      It is not by any means a stretch of the imagination to conclude
that, even if he did not have actual knowledge, Cunningham "was aware of
a high probability that the money sent to him by Carol Jones was stolen or
had    been   obtained by fraud from Jackson County Escrow and that he
deliberately avoided learning the truth," Instruction 22.                   All of the
strange circumstances surrounding his dealings with Jones point strongly
to a conclusion that Cunningham could have avoided reaching only by
engaging in willful blindness or deliberate ignorance:               the funds he was
receiving from Jones were funds she had obtained from Jackson County Escrow
by fraud or theft.

                                          -8-
     The government introduced sufficient evidence for a reasonable jury
to find beyond a reasonable doubt either that Cunningham actually knew the
illegal nature of Jones's activities or that he at least possessed the
guilty knowledge defined by the deliberate ignorance instruction.   We thus
conclude that the District Court properly denied Cunningham's motion for
a judgment of acquittal.

                                   III.

     For the foregoing reasons, the judgment of the District Court is
affirmed.

     A true copy.

            Attest:

                 CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.

                                   -9-