Court Opinion

ID: 770863
Source: CourtListenerOpinion
Date Created: 2012-04-18 10:40:45+00
Date Added: 2024-06-11T17:55:53.547882
License: Public Domain

230 F.3d 311 (7th Cir. 2000)
United States of America, Plaintiff-Appellee,v.Larry Barnes, Defendant-Appellant.
No. 99-3583
In the  United States Court of Appeals  For the Seventh Circuit
Argued April 26, 2000Decided October 13, 2000

Appeal from the United States District Court for the Northern District of Illinois, Eastern Division.  No. 99 CR 109--Rebecca R. Pallmeyer, Judge.
Before Bauer, Rovner, and Diane P. Wood, Circuit  Judges.
Diane P. Wood, Circuit Judge.

1
Larry Barnes was a  real estate broker who strayed from the realm of  legitimate transactions into that of money  laundering. A grand jury returned an indictment  against him on February 17, 1999, for a single  count of attempted money laundering, in violation  of 18 U.S.C. sec. 1956(a)(3)(B), with respect to  a transaction that took place on February 18,  1994. He moved to dismiss the indictment on the  ground that the prosecutors waited too long to  bring their case, and thus that it was barred by  the five-year federal criminal statute of  limitations, 18 U.S.C. sec. 3282. The district  court found that the events of February 18, 1994,  were enough to support the case and thus rejected  his argument. After a one-day bench trial, the  court found Barnes guilty as charged; it later  sentenced him to 41 months in prison. On appeal,  he claims only that the indictment should have  been dismissed on timeliness grounds. We  disagree, and affirm the judgment of the district  court.

2
* Barnes worked as a broker for the Amaris  Mortgage Company in the Chicago area. On January  24, 1994, as part of a criminal investigation  being pursued by the Internal Revenue Service, a  confidential informant introduced Barnes to one  "A.J.," a purported drug dealer interested in  buying real estate with "unreported income." In  fact, A.J. was undercover IRS Special Agent  Anderson Jackson, who was wearing a recording  device. The informant frankly told Barnes that  A.J. wanted to use drug money and an assumed name  for his property purchase; Barnes indicated that  he understood and that he did not care about the  source of A.J.'s money.

3
Once the introductions were complete at the  January 24 meeting, Barnes offered A.J. an  apartment building for $79,000 and a single-  family home for $25,000. A.J. expressed interest,  whereupon the three went to view the properties.  En route, Barnes explained that, by purchasing  the properties, A.J. could "wash" his money so  that he could claim he had legitimate income from  the real estate, and that he could later invest  additional illegitimate funds with income from  the properties and claim that everything was  legitimate. When A.J. expressed fear about  getting caught laundering money, Barnes assured  him that everything was "covered." After viewing  both properties, A.J. agreed to buy them.

4
Barnes and A.J. next met at Amaris Mortgage on  February 4, 1994. There the two both discussed  the mechanics of money laundering further (both  generally and how Barnes planned to handle the  particular transaction) and they began preparing  the paperwork for A.J.'s two purchases. Later  that day, they met with an attorney in Barnes's  office. Barnes instructed the attorney to prepare  a "$29,000 transaction," to disregard the source  of the "front money," and to structure the deal  so that A.J. would pay in installments at an  interest rate of 8.5% with a five-year  amortization period. Uncomfortable that A.J. was  asking too many questions in front of the lawyer,  Barnes took him away from the lawyer's presence  and explained his plan further. He suggested that  A.J. put $1,000 down on one of the properties and  pay the balance in cash, even though the  paperwork would show that the balance was to be  paid in installments. A.J. then requested that  the title be put in the name of "Andrew Jackson,"  and on that basis Barnes ordered the title  commitment. Barnes then suggested that A.J. make  a $50,000 down payment at a meeting scheduled to  take place the following week. A.J. agreed,  noting that he first had to travel to Miami to  "square up something," but that he would return  in a few days with the money.

5
Notably, everything we have described up to  this point took place more than five years before  the indictment was returned. Only the events of  the last encounter between Barnes and A.J., which  occurred on February 18, 1994, came in under the  limitations wire. We therefore pay particularly  close attention to what happened on the 18th.

6
A.J. met with Barnes on the 18th, claiming to  have $100,000 in cash from a 75-kilogram cocaine  deal in Florida, and bragging that he had made  $1,500 per kilogram. Ever the accommodating  broker, Barnes replied that he could get rid of  the money "real quick . . . through his  business." Unfortunately, however, the attorney  with whom the two had met on February 4 was in  court. Barnes, unwilling to wait for the plum he  thought he was about to get, immediately called  another attorney to set up a real estate closing.  The second attorney was also unavailable, but  Barnes was able to leave a message with his  assistant indicating that Barnes needed to set up  an "emergency" closing that afternoon and asking  the attorney to prepare the necessary paperwork.  Barnes also told A.J. that he would adjust the  paperwork to show a purchase price of $30,000 and  that the remaining $70,000 would be a "payoff";  he suggested to A.J. that if the latter were ever  questioned about the low selling price, he could  say that the properties were causing a headache  to the seller and that the seller just wanted to  unload them. Barnes expected, however, the full  $100,000 as the true down payment. With these  matters settled, Barnes and A.J. adjourned to a  local restaurant for lunch while they waited for  the second attorney.

7
On the way to the restaurant, A.J. told Barnes  that his drug source was a "cocaine farm" and  that he had received the extra $50,000 "from a  Colombian." Over lunch, Barnes continued to tout  his ability to shift money around so that no one  could trace it. He described how he had set up a  series of different corporations and used their  tax identification numbers in lieu of his social  security number to open up four separate bank  accounts. These accounts, he thought, would be a  good place to store A.J.'s cash, using a series  of small deposits to avoid IRS reporting  requirements. He also suggested that he could  help A.J. launder future drug money by helping  him buy a business franchise, such as a gas  station or a car dealership. When they finished  their lunch, the two left the restaurant,  ostensibly heading for the lawyer's office. At  that point, federal agents performed a mock  arrest of A.J. to extract him from the operation.  The following day an IRS agent questioned Barnes,  but did not arrest him.

II

8
Four years and 364 days later, the grand jury  indicted Barnes for attempted money laundering.  Barnes, who had not had contact with the  government since the day after A.J.'s "arrest,"  moved to dismiss the indictment, claiming that  the prosecution was barred because the charged  conduct occurred on February 4, 1994. The  district court deferred ruling on the motion, and  then denied it after the bench trial, where the  government presented evidence of Barnes's  activities on each of the three critical days: January 24, February 4, and February 18, 1994.  The court found that Barnes had committed all of  the acts constituting elements of the attempted  money laundering offense charged in the  indictment on February 18, 1994; it accordingly  denied the motion to dismiss and, as noted  earlier, found Barnes guilty as charged.

9
Although we review de novo the question whether  the statute of limitations has run, see United  States v. Anderson, 188 F.3d 886, 888 (7th Cir.  1999), the question whether the district court  properly found that there was sufficient evidence  to show that Barnes committed the complete  offense of attempted money laundering on February  18, 1994, is one that receives the highly  deferential review reserved for evidentiary  challenges to criminal convictions, see United  States v. Richardson, 208 F.3d 626, 631 (7th Cir.  2000); United States v. Griffin, 150 F.3d 778,  784 (7th Cir. 1998).

10
Barnes sees the attempted money laundering for  which he was indicted as a continuous string of  actions that began on January 24 and was complete  no later than February 4. Since all elements of  the offense were in place by February 4, that is  the latest date from which the statute of  limitations could run in his view, no matter what  he may have done later on February 18. He also  argues that the February 18 transaction cannot be  seen as a separate, stand-alone instance of  attempted money laundering, because on that day  Barnes never took a substantial step toward  conducting a financial transaction. Last, he  urges us to reject the government's alternative  theory, which is that money laundering is a  continuing offense for which the statute of  limitations keeps running until the crime  expires. See, e.g., Toussie v. United States, 397  U.S. 112 (1970).

11
In our view, the district court's conclusion  that the February 18 events taken by themselves  established that Barnes attempted unlawfully to  launder money is supported by the evidence. We  thus have no need to consider the question  whether money laundering can fit within the  narrow confines of the "continuing offense"  doctrine recognized in Toussie. See also United  States v. Yashar, 166 F.3d 873 (7th Cir. 1999).  Nor is it material, in our view, that the  government might also have sought an indictment  that focused on his activities on February 4, if  it had acted with more dispatch than it showed  here. A defendant has no right to choose which  illegal conduct the government selects to  prosecute or how that conduct is charged. Cf.  United States v. Armstrong, 517 U.S. 456, 464  (1996) (as long as the prosecutor has probable  cause to believe that the accused committed an  offense, the decision whether or not to prosecute  and what charge to present to the grand jury  generally rests entirely within her discretion,  subject only to constitutional constraints).

12
To convict Barnes of attempted money laundering,  the government had to prove beyond a reasonable  doubt that he attempted, with the intent to  conceal or disguise the nature, location, source,  ownership, or control of property he believed to  be the proceeds of specified unlawful activity  such as dealing in narcotics or other dangerous  drugs, to conduct a financial transaction with  property represented to be the proceeds of  specified unlawful activity. See 18 U.S.C. sec.  1956(a)(3)(B). To prove the "attempt," the  government had to show that Barnes acted with the  specific intent to conduct the financial  transaction described in the substantive statute,  and that he took a substantial step toward  completion of the transaction. See United States  v. Cea, 914 F.2d 881, 887 (7th Cir. 1990); United  States v. Rovetuso, 768 F.2d 809, 821 (7th Cir.  1985).

13
Barnes does not contest the fact that he had  the specific intent to commit money laundering on  February 18, but, he urges, he did not take a  substantial step in furtherance of the crime on  that date. No paperwork for the closing was  prepared, no money actually changed hands, and no  meeting with the attorney ever took place.

14
Even if we agreed that those facts were not  established, however, we cannot conclude that the  steps Barnes did take were not substantial. A  substantial step is something more than mere  preparation, but less than the last act necessary  before the actual commission of the substantive  crime. Rovetuso, 768 F.2d at 821. In determining  whether a person took a substantial step in  furtherance of a crime, the court should focus on  the acts he took to complete the crime, not on  those still to be done. Id. at 821 n.12. The act  must be of such a nature that a reasonable  observer viewing it in context could conclude  beyond a reasonable doubt that it was undertaken  in accordance with a design to violate the  statute. Id. at 821.

15
In this case, Barnes took the following steps  on February 18: he placed a call to an attorney  for the purpose of setting up an immediate real  estate closing for the sale of the two properties  in exchange for money he believed to be the  proceeds of illegal narcotics sales; he  instructed the attorney's assistant to set up the  meeting for later that day and to see that the  paperwork would be ready; and he was on his way  to that meeting, with the purported buyer, at the  time of his arrest. A reasonable observer could  conclude that these steps were substantial and  that they were undertaken in accordance with a  design to violate the statute. Compare Cea, 914  F.2d at 888. It is no defense that, unbeknownst  to Barnes, completion of the illegal plan was  impossible. See United States v. Coffman, 94 F.3d  330, 333 (7th Cir. 1996). By placing the call to  the attorney, giving the instructions, and  heading for the attorney's office, Barnes  demonstrated that he was prepared to complete the  transaction that day and that he would have done  so but for A.J.'s "arrest." In that sense, this  case is like United States v. Mims, 812 F.2d  1068, 1078 (8th Cir. 1987), in which the Eighth  Circuit found that the evidence was sufficient to  find the defendant guilty of attempt where events  had moved beyond the preparation stage and would  have resulted in the completed crime but for the  government's intervention.

16
Although the district court looked at the  activities of January 24 and February 4 in coming  to its conclusion, this was not improper.  Relevant pre-limitations evidence is admissible  to show the existence of a scheme to complete an  illicit transaction. United States v. Wellman,  830 F.2d 1453, 1464 (7th Cir. 1987). Here,  Barnes's pre-limitations activity was relevant to  interpret the meaning of his call to the attorney  to set up the emergency meeting.

III

17
We therefore conclude that the evidence was  sufficient to prove that Barnes committed the  offense of attempted money laundering, as charged  in the indictment, on February 18, 1994. Because  the indictment was returned on February 17, 1999,  it was within the five-year limitations period  established by law. The judgment of the district  court is Affirmed.