Court Opinion

ID: 3029141
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:42:19.472481+00
Date Added: 2024-06-11T11:48:01.863683
License: Public Domain

United States Court of Appeals
                             FOR THE EIGHTH CIRCUIT
                                ________________

                          Nos. 01-2731/2732/3787/02-1422
                                ________________

United States of America,                 *
                                          *
             Appellee,                    *
                                          *       Appeal from the United States
      v.                                  *       District Court for the
                                          *       Eastern District of Arkansas.
Randy Lee Vanhorn,                        *
                                          *
             Appellant.                   *

                                ________________

                                Submitted: January 15, 2002
                                    Filed: July 16, 2002
                                ________________

Before WOLLMAN,1 Chief Judge, HANSEN, Circuit Judge, and OBERDORFER,2
      District Judge.
                          ________________

HANSEN, Circuit Judge.

       Randy Lee Vanhorn appeals the judgment and sentence entered following his
jury trial on charges of mail fraud and money laundering. Vanhorn also challenges

      1
       The Honorable Roger L. Wollman stepped down as Chief Judge of the United
States Court of Appeals for the Eighth Circuit at the close of business on January 31,
2002. He has been succeeded by the author of this opinion.
      2
       The Honorable Louis F. Oberdorfer, United States District Judge for the
District of Columbia, sitting by designation.
the district court’s order finding that it lacked jurisdiction to address his request for
modification of the restitution order. We affirm in part and reverse and remand in
part.

                                           I.

       The police in Jonesboro, Arkansas, began investigating Vanhorn’s activities
after receiving a complaint from Robert Harrell, an acquaintance of Vanhorn, who
suspected that Vanhorn was unlawfully using Harrell’s name and social security
number to obtain credit cards through the mail. The Jonesboro police notified the
United States Postal Service of Vanhorn’s allegedly fraudulent use of a post office
box. The Postal Service then also began an independent investigation of Vanhorn.

       On January 12, 2000, the police obtained a state search warrant to search a
motel room occupied by Vanhorn for evidence of credit card fraud relating to Mr.
Harrell. During this search, the police uncovered evidence relating to the Harrell
credit card fraud, along with evidence of other expansive and ongoing mail fraud
schemes. In particular, the police found that Vanhorn had obtained 171 credit card
numbers. They also found fraudulent unemployment documents and documents
indicating Vanhorn had made large deposits into an investment account with Morgan
Stanley Dean Witter.

       On January 13, 2000, the Postal Service obtained a federal search warrant for
the post office box. This search produced additional evidence of the Harrell credit
card fraud and indicated that Vanhorn was also using numerous other post office
boxes under various names. Ultimately, the Postal Service’s investigation revealed
that Vanhorn was using post office boxes in the names of several fictitious businesses
and nonexistent employees to obtain unemployment benefits through the mail. The
Postal Service obtained a federal seizure warrant to secure as evidence the proceeds
of the fraudulent schemes that Vanhorn had invested with Morgan Stanley Dean

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Witter. Federal investigators subsequently discovered evidence indicating that
Vanhorn had routed some of the unlawfully obtained employment benefit checks
through the bank accounts of the fictitious businesses, converted the money to cash
at a casino, and then deposited the proceeds into the Morgan Stanley Dean Witter
account.

       A federal grand jury charged Vanhorn in a 14-count superseding indictment
with 11 counts of mail fraud, in violation of 18 U.S.C. § 1341 (2000), and 3 counts
of money laundering, in violation of 18 U.S.C. § 1956(a)(1)(B)(i), all based on the
fraudulent unemployment benefits scheme. Vanhorn pleaded not guilty and filed a
motion to suppress the fruits of the search warrant executed by the state authorities
at his motel room. At the initial hearing on the motion to suppress, Vanhorn
challenged only the scope of the search. After an error on the face of the warrant
came to light, however, the court held a second hearing in which Vanhorn challenged
the validity of the warrant on the ground that it lacked any enumeration of the
particular items to be seized. The district court denied the motion to suppress, finding
good faith on the part of the officer.

       During trial, the government did not introduce any evidence that was seized
during the execution of the state search warrant at the motel room. Vanhorn filed
numerous motions for the return of the proceeds he had invested with Morgan Stanley
Dean Witter, asserting that this account held only his separate cash casino winnings.
Following the close of trial, Vanhorn moved to reopen the evidence to submit a
recently obtained copy of a casino statement showing his winnings at the casino. The
district court denied the motion, concluding that the proffered evidence was
cumulative. The jury convicted Vanhorn on all 14 counts of the superseding
indictment.

      The district court sentenced Vanhorn to a term of 71 months' imprisonment and
ordered restitution in the amount of $44,000. The court also held a revocation of

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supervised release proceeding because Vanhorn had committed the current offenses
while he was on supervised release for a 1996 conviction. Vanhorn admitted that he
violated the terms of his supervised release, and the district court imposed a 10-month
term of imprisonment to run consecutively to Vanhorn’s new sentence. Vanhorn
appeals, raising several arguments.

                                        II.
                                A. Motion to Suppress

        Vanhorn challenged the validity of the state search warrant on the ground that
it failed to particularly describe the items to be seized. The Fourth Amendment
requires a warrant to “particularly describ[e] the place to be searched, and the persons
or things to be seized.” U.S. Const. amend. IV. The judicially created remedy for a
Fourth Amendment violation is the exclusion of evidence from the prosecutor’s case
in chief. See United States v. Leon, 468 U.S. 897, 906-07 (1984). When considering
the denial of a motion to suppress evidence, we review the court’s factual findings for
clear error and review de novo the court’s legal conclusions based on those facts.
United States v. Pierson, 219 F.3d 803, 805 (8th Cir. 2000). We will affirm an order
denying a motion to suppress unless the decision is unsupported by substantial
evidence, is based on an erroneous view of the applicable law, or in light of the entire
record, we are left with a firm and definite conviction that a mistake has been made.
United States v. Roby, 122 F.3d 1120, 1123 (8th Cir. 1997).

       Vanhorn’s challenge to the denial of his motion to suppress necessarily fails
because he has not alleged that any evidence obtained through the state search was
used against him at trial. Vanhorn complains that “all evidence derived from” the
state search should have been suppressed as fruit of the poisonous tree (Appellant’s
Br. at 14), but he fails to specify any “evidence derived from” the search that was
used against him at trial and, in this counseled case, it is not our duty to sift through
the record to determine what evidence may have derived from this search. Miller v.

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Citizens Sec. Group, Inc., 116 F.3d 343, 346 n.4 (8th Cir. 1997) (declining to search
the record for error).

       To the extent Vanhorn claims that the indictment should not have issued
because it was based on evidence obtained through this search, Vanhorn fares no
better. Again, Vanhorn fails to specify what evidence from the state search was used.
In any event, there is no doubt the indictment would have issued independently of the
state search of the motel room given the Postal Service’s extensive investigation,
which was the basis of the indictment. See United States v. Conner, 127 F.3d 663,
667 (8th Cir. 1997) (stating the elements of the inevitable discovery exception to the
exclusionary rule). In this case, the defendant effectively received the benefit of the
exclusionary rule, and thus, he has no basis on which to argue error in the denial of
his motion to suppress.

                  B. Sufficiency of Money Laundering Evidence

       Vanhorn challenges the sufficiency of the evidence to support his convictions
of money laundering. There is sufficient evidence to support a verdict if "after
viewing the evidence in the light most favorable to the prosecution, any rational trier
of fact could have found the essential elements of the crime beyond a reasonable
doubt.” Jackson v. Virginia, 443 U.S. 307, 319 (1979). “We view the evidence in a
light most favorable to the verdict, giving the verdict the benefit of all reasonable
inferences, and we will reverse only if the jury must have had a reasonable doubt
concerning one of the essential elements of the crime." United States v. Dugan, 238
F.3d 1041, 1043 (8th Cir. 2001) (internal quotation and alteration omitted). The
essential elements of a § 1956(a)(1)(B)(i) money laundering violation are proof that
the defendant conducted a financial transaction involving the proceeds of unlawful
activity with knowledge that the funds were proceeds of an unlawful activity and with
the intent “to conceal or disguise the nature, the location, the source, the ownership,

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or the control of the proceeds of specified unlawful activity.”           18 U.S.C. §
1956(a)(1)(B)(i); see also Dugan, 238 F.3d at 1043.

       Vanhorn argues that no jury could have found proof beyond a reasonable doubt
that he concealed or disguised the funds or that his savings account included proceeds
of unlawful activity. He asserts that he used the money for his own purposes and in
his own name and that he deposited only his gambling winnings into his investment
account. From the evidence at trial, a jury could find that while Vanhorn was
working as a gas station attendant and on supervised release for a prior conviction,
he obtained approximately $44,000 in fraudulent unemployment benefit checks in the
names of numerous fictitious employees. Upon receiving the proceeds, he deposited
them into several bank accounts that he had opened in the names of fictitious
businesses and transferred these funds among the accounts. He then withdrew funds
totaling $12,000 from the bank accounts and redeposited them either by check,
cashier’s check, or as gambling winnings into his own investment account with
Morgan Stanley Dean Witter.

        “The purpose of the money laundering statute is to reach commercial
transactions intended (at least in part) to disguise” either the relationship between the
illegal proceeds and the defendant or the source and nature of the funds as proceeds
of illegal activity. United States v. Rounsavall, 115 F.3d 561, 565 (8th Cir.) (internal
quotations and alterations omitted), cert. denied, 522 U.S. 903 (1997). Even though
the funds remained traceable to Vanhorn, “[his] intent to conceal the nature or source
of the funds within the meaning of section 1956(a)(1)(B)(i) was evident.” United
States v. Nattier, 127 F.3d 655, 659 (8th Cir. 1997), cert. denied, 523 U.S. 1065
(1998). Vanhorn’s acts of placing the funds in the accounts of sham businesses,
withdrawing them through checks or cashier’s checks as seemingly legitimate
business funds, and then redepositing them into the investment account commingled
with gambling proceeds, provide sufficient evidence from which a jury could find
concealment within the meaning of the statute. See id.

                                           6
       We disagree with Vanhorn’s assertion that this was merely a case of money
spending. The facts are sufficient to demonstrate that “[t]his was not a case of a
person simply using illegally obtained funds to purchase personal items.” Id.
(internal quotations omitted). Nor was this a case where illegal proceeds were simply
deposited into the defendant’s bank account. See United States v. Jolivet, 224 F.3d
902, 909-11 (8th Cir. 2000) (reversing § 1956(a)(1)(A)(i) convictions where money
was deposited in defendant’s account and used solely for personal expenses). On the
record before us, a reasonable juror could find that the defendant routed the proceeds
through sham business accounts and subsequently reinvested the proceeds into his
own investment account. This evidence is sufficient to sustain the money laundering
convictions.

                           C. Request for Return of Funds

        Vanhorn argues that the district court improperly refused to return to him the
funds from the Morgan Stanley Dean Witter investment account that the government
froze pursuant to an evidentiary seizure warrant. The district court concluded that the
defendant was not entitled to lawful possession of the account and that he should not
be given access to the account because he still owes restitution. When considering
a district court’s denial of a motion to return property under Rule 41(e) of the Federal
Rules of Criminal Procedure, “[w]e review the district court’s legal conclusions de
novo and its findings of fact for clear error.” United States v. Felici, 208 F.3d 667,
669-70 (8th Cir. 2000), cert. denied, 531 U.S. 1201 (2001).

       The district court properly denied Vanhorn’s motion for return of property.
“Generally, a Rule 41(e) motion is properly denied if the defendant is not entitled to
lawful possession of the seized property, the property is contraband or subject to
forfeiture or the government's need for the property as evidence continues.” United
States v. Mills, 991 F.2d 609, 612 (9th Cir. 1993) (internal quotations omitted).
Although the government did not seek a final forfeiture order in this case, the funds

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at issue (totaling approximately $10,000) are contraband. The jury concluded that
Vanhorn is guilty of fraudulently obtaining approximately $44,000 in state
unemployment benefits and that he laundered $12,000 of the illegal proceeds into the
Morgan Stanley Dean Witter account. Accordingly, the district court did not err in
concluding that Vanhorn is not entitled to lawful possession of these funds.
Furthermore, there exists an outstanding restitution judgment of $9,450 from
Vanhorn’s 1996 conviction, and the district court ordered restitution in the amount
of $44,000 in the current case. On this record, there is no error in the district court’s
decision to deny Vanhorn’s motion for return of property.

                               D. Alleged Trial Errors

      After the close of trial, Vanhorn sought to reopen the evidentiary record to
submit a copy of a casino statement showing that he had gambling winnings.
Vanhorn asserts that the evidence is exculpatory because it demonstrates that he
deposited gambling winnings in the investment account rather than illegal proceeds.
The district court excluded the evidence as cumulative.

       Questions concerning whether “to reopen a case after resting are entrusted to
the trial court’s wide discretion.” United States v. Shurn, 849 F.2d 1090, 1094-95
(8th Cir. 1988). We find no abuse of discretion. The allegedly exculpatory evidence
was cumulative. Vanhorn had already presented evidence that he gambled, that he
received large winnings, and that he sought investment advice at Morgan Stanley
Dean Witter. This evidence was undisputed. The casino statement did not refute the
government’s allegation that Vanhorn gambled with the illegal proceeds and
commingled illegal proceeds with the gambling winnings. Nor did it refute the
allegation that Vanhorn circulated the original illegal proceeds through various sham
bank accounts in an attempt to conceal their illegal nature, location, or source. The
district court did not abuse its wide discretion in refusing to reopen the evidentiary
record.

                                           8
       Vanhorn also argues that the district court erred in fashioning the jury
instructions because the court rejected his request for a special interrogatory to
designate the amount of intended loss on each count. He cites Apprendi v. New
Jersey, 530 U.S. 466, 490 (2000), in which the Court held, “Other than the fact of a
prior conviction, any fact that increases the penalty for a crime beyond the prescribed
statutory maximum must be submitted to a jury, and proved beyond a reasonable
doubt.” We hold that Apprendi is not implicated in this case so there can be no
Apprendi error.

      The district court sentenced Vanhorn to a term of 60 months of imprisonment
on the mail fraud counts, which is the statutorily authorized maximum sentence
permitted under 18 U.S.C. § 1341, regardless of the amount of loss. On the money
laundering counts, the district court imposed a concurrent sentence of 71 months,
which is well within the 20-year maximum sentence authorized by 18 U.S.C. §
1956(a)(1)(B), without reference to the amount of loss. Where a defendant’s sentence
does not exceed the statutorily authorized maximum sentence for the crime, the case
does not implicate the principle announced in Apprendi. United States v. McIntosh,
236 F.3d 968, 976 (8th Cir.) (holding Apprendi is not implicated where sentence does
not exceed statutory maximum sentence authorized for the offense in its simplest
form), cert. denied, 532 U.S. 1022 (2001). “Until advised to the contrary by the
Supreme Court . . . we conclude a sentencing judge’s discretion to find facts relevant
to sentencing within the statutorily permissible range has not been replaced by a
requirement of jury fact-finding.” United States v. Kurkowski, 281 F.3d 699, 704
(8th Cir. 2002). On this basis, we deny all of Vanhorn’s claims of Apprendi error.

                     E. Revocation of Supervised Release and
                      Refusal to Appoint Substitute Counsel

      Vanhorn also appeals the revocation of his supervised release relating to his
1996 conviction and the district court's refusal to appoint substitute counsel in this

                                          9
case. We have reviewed the record and find both claims to be without merit.
Accordingly, we affirm on these issues for the reasons stated by the district court.
See 8th Cir. R. 47B.

                                     F. Restitution

       After Vanhorn filed his appeal in this case, he requested the district court to
clarify or modify its restitution order, asking the court to set a payment schedule. The
district court initially granted the request but later vacated that order, concluding it
had lacked jurisdiction to modify the restitution order due to Vanhorn’s pending
appeal. Vanhorn challenges the district court’s denial for lack of jurisdiction of his
motion to modify the restitution order. He asserts that the district court had
jurisdiction to modify the order and asks this court to stay the collection of restitution.

       Initially, we deny Vanhorn’s motion to stay the collection of restitution. His
assertion, however, that the district court had jurisdiction to adjudicate his motion to
modify the restitution order notwithstanding the pendency of his appeal and the
seven-day time limit of Fed. R. Crim. P. 35(c) has merit.

       The district court’s judgment of conviction and sentence in this case, dated
June 22, 2001, does not set a schedule of payments for restitution while Vanhorn is
incarcerated, and this is contrary to current law. 18 U.S.C. § 3664(f)(1)(B)(2)
(requiring the court to specify the schedule for payment); United States v.
McGlothlin, 249 F.3d 783, 784-85 (8th Cir. 2001) (holding the district court must
fashion a payment schedule designating a specific percentage of the prisoner’s
monthly earnings to go toward his restitution obligation). Seeking a specified
payment schedule, Vanhorn asked the district court to modify his restitution order,
and the government did not object. On October 3, 2001, the district court modified
the judgment, specifying a restitution payment schedule of $25 per quarter or 10% of
Vanhorn’s gross income.

                                            10
       Vanhorn filed a second request for modification, and this time the government
resisted, asserting that because Vanhorn had appealed the original judgment of
conviction and more than seven days had passed since the imposition of sentence, the
district court lacked jurisdiction to modify the order. See Fed. R. Cr. P. 35(c)
(permitting correction of sentence only within seven days after the imposition of the
sentence). The district court agreed and on November 20, 2001, vacated the
modification order of October 3, 2001, for lack of jurisdiction, leaving the original
nonspecific restitution order in effect. Vanhorn appeals the November 20, 2001,
order, arguing that a district court retains jurisdiction to modify a restitution order
even where a defendant is appealing other issues in the case.

       This case involves an order of mandatory restitution because the offense was
committed by fraud or deceit. 18 U.S.C. § 3663A(c)(1)(A)(ii). A mandatory order
of restitution is governed according to the terms of 18 U.S.C. § 3664. Id. § 3663A(d).
Section 3664 specifies that “this chapter [Miscellaneous Sentencing Provisions],
chapter 227 [Sentences], and Rule 32(c) of the Federal Rules of Criminal Procedure
[Sentence] shall be the only rules applicable to proceedings under this section.” 18
U.S.C. § 3664(c) (emphasis added). This explicit language indicates to us that Rule
35(c)’s seven-day limitation on the district court’s ability to correct a sentence does
not apply in this context. Additionally, § 3664 expressly permits the district court to
adjust the payment schedule “as the interests of justice require.” 18 U.S.C. § 3664(k).
We have previously held that the notice of appeal challenging a conviction “[does]
not divest the district court of jurisdiction to clarify its restitution order as additional
information [is] discovered.” United States v. Allen, 247 F.3d 741, 794 (8th Cir.
2001), petition for cert. filed, (U.S. Oct. 22, 2001) (No. 01-7310). We hold that the
district court in this case did not lack jurisdiction to modify the restitution order
despite the previously filed notice of appeal challenging Vanhorn’s convictions and
the passage of more than seven days since the imposition of sentence. Accordingly,
we reverse the district court’s order which found that it lacked jurisdiction, and we
remand for further consideration of the restitution order consistent with this opinion.

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                                         III.

       We deny Vanhorn’s motion for stay of collection of restitution. We reverse
and remand the district court’s order of November 20, 2001, in which the district
court concluded that it lacked jurisdiction to consider Vanhorn’s motion to modify
the restitution order, and we remand this issue for further proceedings consistent with
this opinion. In all other respects, we affirm the judgment of the district court.

      A true copy.

             Attest:

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

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