Court Opinion

ID: 165203
Source: CourtListenerOpinion
Date Created: 2010-08-14 08:46:23+00
Date Added: 2024-06-11T17:18:16.241944
License: Public Domain

F I L E D
                                                                  United States Court of Appeals
                                                                          Tenth Circuit
                      UNITED STATES COURT OF APPEALS
                                                                          NOV 9 2004
                                   TENTH CIRCUIT
                                                                     PATRICK FISHER
                                                                                 Clerk

 UNITED STATES OF AMERICA,

          Plaintiff - Appellee,
                                                       No. 03-3302
 v.
                                               (D.C. No. 02-CR-10030-JTM)
                                                       (D. Kansas)
 RICHARD SCOTT WOOD,

          Defendant - Appellant.

                             ORDER AND JUDGMENT *

Before EBEL and TYMKOVICH, Circuit Judges, and HEATON, ** District
Judge.

      Defendant Richard Wood was convicted of twenty-seven counts of bank

fraud in violation of 18 U.S.C. § 1344(2), one count of engaging in a prohibited

monetary transaction in criminally derived property (money laundering) in

violation of 18 U.S.C. § 1957, fifteen counts of wire fraud in violation of 18

      *
        This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. This court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
      **
         Honorable Joe Heaton, United States District Court Judge, Western
District of Oklahoma, sitting by designation.
U.S.C. § 1343, and three counts of interstate transportation of stolen money in

violation of 18 U.S.C. § 2314. He now challenges the validity of his bank fraud

and money laundering convictions. He also argues that he should not have

received a one-level sentence enhancement under USSG § 2S1.1(b)(2)(A) based

on his § 1957 conviction, and that he ought to have been given an offense level

reduction under USSG §3E1.1 for acceptance of responsibility. We AFFIRM.

                                 BACKGROUND

      Defendant provided financial advice and other financial services to

customers of Boeing Wichita Credit Union pursuant to an agreement with the

credit union. (Aplt. App. vol II at 286.) Although Defendant was an independent

contractor, not a credit union employee, several employees of the credit union

testified that they viewed him as an authority figure there. (Id. at 205, 233, 261.)

      In January 2001, after having made a string of bad personal investments,

Defendant began transferring money out of the accounts of credit union members

and into accounts that he controlled. (Id. at 295-99, Aplt. Br. at 4.) Needless to

say, these transactions had not been authorized by the account holders. In total,

Defendant took approximately $3.6 million from credit union members’ accounts

without permission in 2001. (Aplt. App. vol. II at 319-20.)

                                        -2-
      Defendant’s plan was essentially to invest the credit union members’ money

into high risk ventures without their knowledge, and to pocket the proceeds. (Id.

at 303.) Those investments did not pan out quite as Defendant might have hoped.

The record indicates that he ran up about $1.5 million in trading losses and

squandered an additional $250,000 to $300,000 in trading fees. (Id. at 130.) He

also used some of the credit union members’ money to purchase a car and

complete various home improvement projects. (Id. at 347.)

      Defendant’s method of obtaining access to the credit union members’ funds

was not elaborate. He simply gave credit union member service representatives

notes instructing them to transfer those funds into his account. Defendant has

acknowledged that he led the member service representatives to believe that those

transactions had been approved by the account holders. (Id. at 315, 351.)

Furthermore, member service representatives testified that Defendant expressly

misrepresented to them that the transactions had been requested by the customer. 1

      1
        Ronnie Finneran, a member service representative, testified that when
Defendant directed her to transfer the funds he would say “‘I need you to transfer
this money from the member’s account to this ... account. The member wants me
to invest it.’ Or, if it was an IRA, he said that ... [the] member wanted the money
transferred to another IRA and he was handling it.” (Aplt. App. vol. II at 205-
06.) Likewise, Marcy Hoffman, another member service representative, testified
that when Defendant directed her to transfer the funds “[s]ometimes he would just
say, ‘I met with the member. I talked to the member,’ something like that, and
said ‘[w]e’re going to put this in this account.’” (Id. at 263.)

                                        -3-
      Defendant’s activities finally came to light in December 2001, when a

credit union member called to complain that her balance statement did not appear

to be correct. (Id. at 121.) He was ultimately charged with numerous counts of

bank fraud, money laundering, wire fraud and interstate transportation of stolen

money, as listed above. He pled not guilty and was convicted on all counts.

      The district court sentenced Defendant under USSG § 2S1.1. (Aplt. App.

vol. III at 388.) His base offense level was twenty-two. He received a one-level

enhancement pursuant to USSG § 2S1.1(b)(2)(A) because he had been convicted

under 18 U.S.C. § 1957, and a two-level enhancement pursuant to USSG § 3B1.3

for abusing a position of trust, thus bringing his total offense level to twenty-five.

The court also refused to grant Defendant an offense level reduction for

acceptance of responsibility pursuant to USSG § 3E1.1. Defendant was sentenced

to fifty-seven months’ imprisonment and ordered to pay restitution.

                                   DISCUSSION

      Defendant raises four issues on appeal. He contends: (1) that his bank

fraud convictions under 18 U.S.C. § 1344(2) should be overturned because he

made no false representations; (2) that his money laundering conviction under 18

U.S.C. § 1957 should be overturned because he lacked an intent to conceal or,

alternatively, because he was not engaged in organized crime and/or large scale

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drug trafficking; (3) that the one-level enhancement under § 2S1.1(b)(2)(A) was

improper; and (4) that he should have received an offense level reduction for

acceptance of responsibility. We hold that all of these arguments are meritless.

      A. Bank Fraud Convictions (18 U.S.C. § 1344(2))

      The elements of bank fraud under 18 U.S.C. § 1344 are (1) that the

defendant knowingly executed or attempted to execute a scheme (i) to defraud or

(ii) to obtain property by means of false or fraudulent pretenses, representations

or promises; (2) that he or she did so with the intent to defraud a financial

institution; and (3) that the financial institution was then federally insured. See

United States v. Akers, 215 F.3d 1089, 1100 (10th Cir. 2000); see also United

States v. Swanson, 360 F.3d 1155, 1161 (10th Cir. 2004). “A person violates the

bank fraud statute when he knowingly executes a scheme to obtain money from a

financial institution by means of material, fraudulent representations.” Akers,

215 F.3d at 1101. 2

      2
        18 U.S.C. § 1344 prohibits “knowingly execut[ing], or attempt[ing] to
execute, a scheme or artifice – (1) to defraud a financial institution; or (2) to
obtain any of the moneys, funds, credits, assets, securities, or other property
owned by, or under the custody or control of, a financial institution, by means of
false or fraudulent pretenses, representations, or promises.” We have held that
§§ 1344(1) and 1344(2) are distinct, albeit related, offenses. See United States v.
Young, 952 F.2d 1252, 1256 (10th Cir. 1991).

                                         -5-
      Defendant challenges his bank fraud convictions solely based on his

contention that the evidence at trial did not show that he used any false pretenses,

representations, or promises in obtaining funds from the credit union members’

accounts. (Aplt. Br. at 12.) We review a challenge to the sufficiency of the

evidence de novo, presuming that the jury resolved all evidentiary conflicts and

drew all reasonable inferences in the light most favorable to the prosecution.

United States v. Roberts, 185 F.3d 1125, 1140 (10th Cir. 1999).

      Contrary to Defendant’s assertion, there is ample evidence in the record

demonstrating that Defendant made misrepresentations and used false pretenses to

obtain the funds in question. First, member service representatives testified that

Defendant expressly told credit union employees that account holders had

requested the transfers. Those statements were false. Further, Defendant acted in

his capacity as financial advisor for credit union members, thus putting on the

false pretense that he was acting on those members’ behalf. See United States v.

Briggs, 965 F.2d 10, 11-12 (5th Cir. 1992) (false pretenses can include falsely

holding oneself out to have authority to make monetary transfers, even in the

absence of overt false statements or promises).

      We AFFIRM Defendant’s convictions under 18 U.S.C. § 1344(2).

                                         -6-
      B. Money Laundering Conviction (18 U.S.C. § 1957)

      18 U.S.C. § 1957(a) prohibits “knowingly engag[ing] or attempt[ing] to

engage in a monetary transaction in criminally derived property of a value greater

than $10,000 and ... derived from specified unlawful activity.” 3 We have referred

to this statute and 18 U.S.C. § 1956 in tandem as “money laundering” statutes.

See, e.g., United States v. Bailey, 327 F.3d 1131, 1137 (10th Cir. 2003); United

States v. Pretty, 98 F.3d 1213, 1219 (10th Cir. 1996). 4

      Defendant admits that “his conduct falls within the wording of the statute.”

(Aplt. Br. at 10.) Nevertheless, he argues that two additional unwritten elements

of the statute were not satisfied. He contends that § 1957 requires (1) “an intent

to conceal, to hide or to somehow purposefully make stolen money appear to be

‘clean,’” or, in the alternative, (2) that the case involves “organized crime and/or

large scale drug trafficking.” (Id.) As is apparent from its plain language, § 1957

demands no such thing. 5

      3
        Bank fraud is a “specified unlawful activity” for purposes of this statute.
See 18 U.S.C. §§ 1956(c)(7)(A), 1957(f)(3), 1961(1); 31 U.S.C. § 5311 et seq.
      4
         Section 1956 prohibits transactions in the proceeds of specified unlawful
activity (1) with the intent to promote the carrying on of specified unlawful
activity or the intent to violate certain provisions of the Internal Revenue Code, or
(2) knowing that the transaction is designed (i) to conceal or disguise the nature,
location, source, ownership, or the control of the proceeds, or (ii) to avoid certain
reporting requirements. See 18 U.S.C. § 1956(a)(1).
      5
       After all the evidence was presented at trial, Defendant moved for a
judgment of acquittal, arguing that his bank fraud convictions were not supported

                                        -7-
       We have already explained that the “argument that section 1957 requires an

intent to conceal is ... without merit.” United States v. Allen, 129 F.3d 1159,

1165 (10th Cir. 1997). “Section 1957 ... prohibits engaging in monetary

transactions in property from specified unlawful activity, and contains no

requirement that the transaction be designed to conceal anything. A defendant

must know only that she is engaging in a transaction and that the subject of the

transaction is criminally derived property.” Id. at 1165; see also United States v.

Wynn, 61 F.3d 921, 926-27 (D.C. Cir. 1995).

       Defendant’s second argument fares no better. Nothing in the language of

§ 1957 limits the reach of that statute to drug offenses or organized crime. To the

contrary, that statute specifically states that it applies to a list of certain

“specified unlawful activit[ies],” many of which have nothing to do with drugs or

organized crime. See 18 U.S.C. §§ 1956(c)(7)(A), 1957(a)(1), 1957(f)(3),

1961(1). It is therefore clear that “money laundering is not limited only to

by evidence of a material misrepresentation. (Aplt. App. vol. II at 359-60.) He
did not raise the challenges to the money laundering charge that he now asserts on
appeal. When a motion for judgment of acquittal is made on specific grounds, all
grounds not specified are waived and may be reviewed only for plain error.
United States v. Kimler, 335 F.3d 1132, 1141 (10th Cir.), cert. denied, 125 S. Ct.
945 (2003).
       Accordingly, we may reverse Defendant’s money laundering conviction
only if (1) the district court committed error, (2) the error is plain, (3) the error
affected the defendant’s substantial rights, and (4) the error seriously affects the
fairness, integrity, or public reputation of judicial proceedings. See id. For the
reasons discussed below, we hold that the district court committed no error.

                                           -8-
proceeds of serious crimes like drug trafficking and organized crime.” United

States v. Thorn, 317 F.3d 107, 128 (2d Cir. 2003). Although the money

laundering statutes may have been largely designed to target drug-related

activities, they are certainly not limited to that context. See United States v.

Johnson, 971 F.2d 562, 568-69 (10th Cir. 1992) (noting that sections 1956 and

1957 “prohibit[] a much broader range of conduct than just the ‘classic’ example

of money laundering.”).

      We AFFIRM Defendant’s conviction under 18 U.S.C. § 1957.

      C. Section 2S1.1(b)(2)(A)’s Offense Level Enhancement

      The district court increased Defendant’s offense level by one level under

USSG § 2S1.1(b)(2)(A). That guideline reads, in full: “If the defendant was

convicted under 18 U.S.C. § 1957, increase by 1 level.” U.S. Sentencing

Guidelines Manual § 2S1.1(b)(2)(A) (2002). Defendant was undeniably convicted

under 18 U.S.C. § 1957, and, for the reasons discussed above, that conviction was

supported by the evidence at trial. The one-level enhancement was appropriate.

      D. Acceptance of Responsibility

      Finally, Defendant argues that he should have received an offense level

reduction for acceptance of responsibility under USSG § 3E1.1. The defendant

                                         -9-
has the burden of clearly demonstrating that he accepted responsibility for his

offenses, and this is a question of fact we review only for clear error. See U.S.

Sentencing Guidelines Manual § 3E1.1(a) (2002); Bailey, 327 F.3d at 1148;

United States v. Saffo, 227 F.3d 1260, 1271-72 (10th Cir. 2000). “‘The

sentencing judge is in a unique position to evaluate a defendant’s acceptance of

responsibility. For this reason the determination of the sentencing judge is

entitled to great deference on review.’” Saffo, 227 F.3d at 1271 (quoting U.S.

Sentencing Guidelines Manual § 3E1.1 cmt. n.5).

      The acceptance of responsibility adjustment “is not intended to apply to a

defendant who puts the government to its burden of proof at trial by denying the

essential factual elements of guilt.” U.S. Sentencing Guidelines Manual § 3E1.1

cmt. n.2 (2002). “[A]dmission of the factual elements of guilt is certainly

essential to a finding that a defendant accepted responsibility for his crime.”

United States v. Salazar-Samaniega, 361 F.3d 1271, 1280 (10th Cir.), cert. denied,

125 S. Ct. 180 (2004).

      At trial, Defendant contested the factual basis of his bank fraud claims,

contending that he never made any misrepresentations and never used false

pretenses to obtain credit union members’ funds. He continues to make that same

argument on appeal. See supra Part A. This is enough to defeat his argument that

the district court erred in refusing to reduce his offense level under § 3E1.1.

                                        - 10 -
      E. Conclusion

      For the foregoing reasons, we reject Defendant’s challenges to his

convictions and sentence. We AFFIRM in all respects.

                                      ENTERED FOR THE COURT

                                      David M. Ebel
                                      Circuit Judge

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