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Defendants Allegedly Stored Distribution Quantities of Fentanyl and Narcotics Packaging Equipment in the Daycare, Including a Kilogram of Fentanyl on Top of Playmats

A criminal complaint was unsealed in Manhattan federal court charging two defendants from the Bronx with narcotics possession with intent to distribute resulting in death and conspiracy to distribute narcotics resulting in death. This is in connection with an incident where four children under three years old were poisoned by fentanyl at a Bronx daycare facility, resulting in the death of one child. 

The complaint alleges that the defendants had been involved in distributing fentanyl since at least July 2023, storing large quantities at the daycare center, including atop children’s playmats. Tools and equipment used for the distribution and repackaging of narcotics were also found on the premises. On September 15, four children were believed to be poisoned due to exposure to fentanyl. Before medical assistance was called, evidence was removed from the site by the main defendant and an unnamed co-conspirator.

If convicted, defendants face severe penalties, with minimum sentencing starting at 20 years and a maximum possibility of life imprisonment.

A resident from Independence, Louisiana, has been sentenced to a 12-month and one-day prison term, followed by three years of supervised release. This release includes a unique stipulation that mandates 30 hours of community service. The sentencing was passed down by U.S. District Judge Jane Triche Milazzo of the Eastern District of Louisiana due to the defendant's participation in an animal fighting venture.

The defendant's involvement in this dogfighting operation came to light during an OCDETF probe into narcotics trafficking in Louisiana. This investigation, which employed authorized wiretaps, revealed that during the summer of 2017, the defendant organized at least two dogfighting events at his residence in Independence. According to the DOJ, these events were attended by both alleged drug dealers and fellow participants in the dogfighting circuit, all of whom engaged in gambling based on the outcome of these illegal fights.

DOJ reports that a subsequent search of the defendant's property in October 2017 led to the discovery of evidence indicative of dogfighting. This included seven pitbulls kept in harsh conditions, a dogfighting pit littered with drink containers, tools designed to pry apart the jaws of fighting dogs, and a variety of veterinary equipment. The dogs discovered on the premises were subsequently relocated to a North Carolina facility where they received medical attention and began the rehabilitation process.

It's noteworthy that, thus far, six other individuals have faced convictions due to their associations with this interstate dogfighting ring. Five among them have already received their sentences.

Four defendants were convicted by a federal jury in the Western District of Arkansas for orchestrating an investment fraud and money laundering scheme, defrauding victims of over $18 million. DOJ Press Release 


  • Conspiracy and Fraud Details: The four were charged with conspiring to use an entity called "The Brittingham Group" to promote their fraudulent investment offerings. Despite promising significant returns, the defendants were unable to deliver on these promises.

  • Money Laundering: The government charged the defendants abused their financial knowledge to launder the stolen money. They allegedly channeled the funds through a vast network of international bank accounts, making it harder to trace.

  • Statements by Officials:

    • Acting Assistant Attorney General Nicole M. Argentieri emphasized that those who exploit others for personal benefit will face consequences.

    • IRS Criminal Investigation (IRS-CI) Chief Jim Lee recognized the efforts of those who unraveled the intricate financial activities of the defendants, leading to their convictions.

    • Assistant Director Luis Quesada of the FBI's Criminal Investigative Division warned the public about the devastating effects of such scams and urged potential investors to conduct thorough research before investing.

  • Convictions and Potential Sentences:

    • All defendants were convicted of conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering. They face a potential maximum sentence of 20 years in prison for each charge.

    • The sentencing date is still to be scheduled, and a federal district court judge will make a final decision on the sentences after reviewing the U.S. Sentencing Guidelines and other relevant factors.

A dual U.K.-Nigerian national has been sentenced to 90 months in prison for his involvement in a transnational inheritance scam. This marks the conclusion of sentences for all three defendants extradited from the UK in relation to this fraud. DOJ Press Release 

The scheme involved the targeting of elderly individuals in the U.S., with letters claiming a multi-million-dollar inheritance awaited them from a deceased relative in Portugal. To receive this fictional inheritance, victims were instructed to send money for various fees and taxes. The scam included a convoluted system where earlier victims were tricked into receiving and forwarding money from newer victims.

The other two UK-extradited defendants were sentenced to 82 and 87 months in prison respectively. Two other members of this scheme, extradited from Spain, have pled guilty and await sentencing in the coming months.

The Justice Department, along with the U.K.'s National Crime Agency, Crown Prosecution Service, and National Trading Standards Scams Team, worked collaboratively on this case. Additionally, the U.S. Postal Inspection Service (USPIS), Homeland Security Investigations (HSI), and other agencies have emphasized their commitment to protect U.S. citizens from such frauds and pursue international criminals.


Key Points:

  1. Amendment 821: The Commission, by majority vote, has permitted the delayed retroactive application of Amendment 821 pertaining to criminal history. This could make certain incarcerated individuals eligible for reduced sentences, effective from February 1, 2024.

  2. Aims of the Amendment: The recently approved Amendment 821 introduces targeted, evidence-based modifications to some criminal history rules. Certain portions of the amendment decrease the sentencing range for future defendants. Consequently, there's a legal mandate to contemplate if these reductions can be extended to those previously sentenced.

  3. Delay in Implementation: The Commission has decided to delay the actual order of reduced sentences. This is to ensure that eligible individuals can partake in reentry programs and transitional services, enhancing their chances of successful reintegration into society.

  4. Remarks by U.S. District Judge Carlton W. Reeves: As Chair of the Commission, Judge Reeves highlighted that this decision could bring hope to thousands of incarcerated people and their families. He also emphasized the importance of reentry programs and transitional services in ensuring the public's safety.

  5. Projected Impact: An Impact Analysis in July 2023 estimated significant benefits for the incarcerated due to the amendment:

    • 11,495 will potentially have a 11.7% reduction in their sentences under Part A related to “Status Points”.
    • 7,272 individuals, or “Zero-Point Offenders”, could see a sentence reduction of 17.6% on average under Part B.
  6. Congress Review: This year's guideline amendments are currently with Congress for a 180-day review period, ending on November 1, 2023. If not disapproved, courts can begin to consider sentence reduction petitions, with reductions in prison terms potentially starting from February 1, 2024.

  7. Future Policy Priorities: On the 40th anniversary of the Sentencing Reform Act (SRA), the Commission plans to undertake projects to assess the effectiveness of current sentencing practices. This includes evaluating the Bureau of Prisons' practices, looking into court-sponsored programs, and addressing the treatment of acquitted conduct in the sentencing guidelines.

  8. Additional Areas of Focus: The Commission intends to further delve into career offender guidelines, explore alternative approaches to the “categorical approach”, and research issues like methamphetamine offenses and sentencing discrepancies between trials and pleas.

  9. Public Engagement: The Commission has expressed gratitude for the public's feedback on its tentative policy priorities and invites continuous involvement throughout the year.

  10. For More Information: Details about the amendment process and the approved changes can be found at

This recent move signifies a potential turning point in U.S. sentencing guidelines, emphasizing a more evidence-based and rehabilitative approach to criminal justice.

Reason for Amendment: The amendment is based on various Commission studies on federal offenders' criminal history. It aims to:

  1. Reduce the impact of extra criminal history points for offenders who committed a crime while already under a criminal justice sentence ("status points").
  2. Reduce recommended guideline ranges for offenders with no criminal history points ("zero-point offenders").
  3. Update policies related to simple possession of marijuana offenses.

The amendment balances data-driven sentencing with the duty to create penalties that align with the statutory purposes of sentencing.

Part A – Status Points:

  1. Re-designation of subsections for clarity.
  2. Previously, offenders who committed an offense while under any criminal justice sentence received two criminal history "status points". This amendment limits and reduces the impact of "status points":
    • Only offenders with seven or more criminal history points (excluding status points) will receive status points.
    • The number of status points awarded is reduced from two to one.
  3. Commentary and related sections have been modified accordingly.
  4. Commission studies found:
    • 37.5% of cases with criminal history points over the past five years included status points.
    • 61.5% of these offenders had a higher Criminal History Category due to these points.
    • The likelihood of recidivism strongly correlates with an offender’s criminal history, but status points have a minimal contribution to this predictive value.
  5. The Commission’s adjustment to the role of "status points" is based on recent research, showing that these points don't significantly predict recidivism as initially thought.
  6. However, "status points" are retained for offenders with higher criminal histories, recognizing the offender’s overall criminal history and the fact that they committed an offense while under another criminal sentence.

Part B – Zero-Point Offenders:

  1. This part focuses on offenders with zero criminal history points.
  2. Three main changes:
    • An adjustment is provided for certain zero-point offenders.
    • Revision of policies to align with a congressional directive.
    • Other necessary conforming changes.

This amendment proposes targeted changes that reflect a more nuanced understanding of criminal history and its relation to recidivism. It attempts to ensure fairness while still considering public safety.

The DOJ announced yesterday that it has returned an indictment charging the founders of Tornado Cash with money laundering and sanctions violations. DOJ Press Release Two individuals, Roman Storm and Roman Semenov, have been charged with operating Tornado Cash Service, a cryptocurrency mixer, which allegedly laundered more than $1 billion in criminal proceeds. The U.S. Department of Justice (DOJ) announced the unsealing of the indictment, detailing multiple charges against the defendants, including conspiracy to commit money laundering, sanctions violations, and operating an unlicensed money transmitting business.


  1. Charges and Arrest: Roman Storm was arrested in Washington and will be presented in the U.S. District Court for the Western District of Washington. Roman Semenov remains at large. 

  2. Operation of Tornado Cash Service: The defendants are accused of creating, operating, and promoting Tornado Cash, a cryptocurrency mixing service that helped facilitate more than $1 billion in money laundering transactions, including laundering funds for the Lazarus Group, a sanctioned North Korean cybercrime organization.

  3. Official Statements: Multiple government agency officials emphasized the severity of the charges and reaffirmed their commitment to enforcing the law against cryptocurrency-related crimes. They warned that the use of cryptocurrency does not provide anonymity or immunity from legal action, and praised the collaborative efforts of law enforcement agencies.

  4. The Allegations: According to the indictment, Storm and Semenov were two of the three founders of Tornado Cash who earned millions in profits. The government charges the service was used to launder criminal proceeds and the defendants allegedly knew about these activities but refused to implement required controls. The government also charges they helped the Lazarus Group (a sanctioned North Korean cybercrime organization) in transferring criminal proceeds from a cryptocurrency wallet, even after making a public announcement of compliance with sanctions.

  5. The Charges: Defendants are each charged with one count of conspiracy to commit money laundering and one count of conspiracy to violate the International Economic Emergency Powers Act, which each carry a maximum sentence of 20 years in prison. They are also each charged with conspiracy to operate an unlicensed money transmitting business, carrying a maximum sentence of five years in prison.

Breakdown of the Indictment:

COUNT ONE—Conspiracy to Commit Money Laundering: Between September 2020 and August 8, 2022, defendants and others conspired to commit money laundering. The government charges they knew the funds involved were from unlawful activities, specifically computer fraud and abuse, and wire fraud and they aimed to conceal and disguise the nature, source, ownership, and control of these funds.

COUNT TWO—Conspiracy to Operate an Unlicensed Money Transmitting Business: The government charges that between March 2022 and August 8, 2022, defendants , and others conspired to operate an unlicensed money transmitting business. They allege that they knowingly managed the "Tornado Cash" service, a business transferring funds without meeting Federal registration requirements for money transmitting businesses and that they knew these funds came from criminal offenses and were meant to support unlawful activity.

COUNT THREE—Conspiracy to Violate the International Emergency Economic Powers Act (IEEPA: The government changes that between April 14, 2022, and August 8, 2022, defendants, and others conspired to violate orders under the IEEPA, Executive Order 13722, and 31 C.F.R. § 510.201. They alleged defendants received funds and services from the Lazarus Group, a sanctioned entity, without OFAC's approval and they provided funds, services, and money laundering for the Lazarus Group, a sanctioned entity without obtaining required approvals. The government alleges they engaged in these transactions to evade and avoid U.S. laws regarding the provision and receipt of services and funds from the Lazarus Group without OFAC's approval.

Summary on Tornado Cash Service:

The government alleges that from 2019 until at least August 8, 2022, two individuals, ROMAN STORM and ROMAN SEMENOV, were actively involved in the creation, promotion, and operation of a cryptocurrency mixing service known as Tornado Cash. While the service was portrayed as a platform promoting financial privacy, the DOJ alleges that it was primarily used as a tool for large-scale money laundering and for evading sanctions. They charge the defendants were aware that a significant portion of the assets processed by Tornado Cash were illicit proceeds. Furthermore, they also alleged that defendants knowingly facilitated transactions for the Lazarus Group, a sanctioned North Korean cybercrime entity, handling cryptocurrency from an Ethereum wallet associated with this group.

Origins: Tornado Cash founders began developing the Tornado Cash service around 2019, launching it in August 2019. It was publicly advertised as a "mixer" for sending Ethereum anonymously using advanced, non-custodial cryptographic technology.

Service Description: The service allowed users to conduct anonymous and virtually untraceable financial transactions on the Ethereum blockchain. Customers deposited Ethereum (ETH) into Tornado Cash and could later withdraw it to a new Ethereum address, with no visible connection between the deposit and withdrawal on the public Ethereum blockchain. The service integrated a user-friendly interface, smart contracts on the Ethereum blockchain, and Tornado Cash pools containing mixed customer deposits. They also utilized a network of "relayers" who improved user anonymity for a fee.

Investments and Funding: In 2019 and 2020, the founders pitched to investors, eventually securing funding from a California-based venture capital fund ("Venture Capital Fund-1"). This fund transferred approximately $900,000 to a bank account associated with the Tornado Cash founders in 2020 to support the service's startup and operational costs.

User Interaction: Customers could deposit funds into the service through a user interface (UI) accessible via a standard internet browser or by directly engaging with the service's smart contracts. The latter option required more technical expertise. The UI enabled deposits, provided a unique "secret note" for each deposit, and facilitated withdrawals using that secret note.

Anonymization Process: The service used various methods to obscure the connection between customer deposits and withdrawals. Deposits made by customers were pooled together in the Tornado Cash pools and mixed with other deposits, making them indistinguishable. When a customer wished to withdraw, they used the "secret note" provided during deposit. The corresponding amount of ETH was then taken from the commingled pool for withdrawal, with no public link identifying the original deposit source.

Deposit Increments: The service only permitted deposits in 0.1, 1, 10, and 100 ETH increments, further obscuring transaction analysis on the public blockchain by creating a uniform stream of transactions.

Privacy Enhancement Recommendations: The government alleges the founders advised customers to wait for some time after depositing funds before making withdrawals to further increase anonymity. They also introduced an "anonymity set" metric on the UI to inform users of the number of deposits in each pool, enhancing user confidence in the system's privacy.

Service Infrastructure: The Tornado Cash founders contracted with a US-based service provider to manage the large volume of traffic between the UI and the Ethereum blockchain.

Relayers: To further enhance user anonymity, the government charges the founders introduced "relayers." These were intermediaries who facilitated transactions, paying the necessary transaction (or "gas") fees on the Ethereum network on behalf of users. This allowed users to make withdrawals to a new Ethereum address with no prior transaction history, increasing their anonymity.

The DAO: In December 2020, the founders launched a decentralized autonomous organization (DAO) called the Tornado Cash DAO to govern certain aspects of the service, while still holding power over other decisions, such as the User Interface's operation and design.

In connection with the DAO's establishment, the Tornado Cash founders introduced the TORN token on the Ethereum blockchain. They minted 10 million TORN tokens, distributing 30% among the founders and certain investors. Each founder received approximately 800,000 tokens. The remaining tokens were allocated to early Tornado Cash users, an "Anonymity Mining" fund, and the DAO's treasury. After a lock-up period, TORN tokens could be traded, incentivizing holders to boost their value.

The Tornado Cash DAO was created to make governance decisions, with TORN token owners being able to vote by staking their tokens in a governance contract. Subsequently, the founders and associates planned to profit from fees charged by relayers. In February 2022, they proposed an algorithm in the Tornado Cash UI to pick a relayer for each withdrawal, which the DAO approved. This relayer algorithm encouraged the purchase and staking of more TORN tokens by linking the chance of a relayer being picked to the number of TORN tokens they staked.

The Money Laundering Allegations:

Introduction to Money Laundering: Federal law mandates that all money transmitting businesses, inclusive of those transferring cryptocurrencies, need to register with the Financial Crimes Enforcement Network (FinCEN) under the U.S. Department of the Treasury. These businesses must also adhere to the Bank Secrecy Act, which requires reporting suspicious transactions and creating an effective anti-money-laundering (AML) program. The program should prevent the business from aiding in money laundering or financing of terrorism. An effective AML program should have policies and controls to verify customer identification (Know Your Customer or KYC), file required reports, maintain records, and cooperate with law enforcement.

Tornado Cash Service Allegations:

The government charges that Defendants, along with others, operated a money transferring service known as Tornado Cash Service. They charge neither Tornado Cash nor its founders were registered with FinCEN. The government further alleges Tornado Cash did not implement an effective AML program or any KYC efforts. As a result customers could allegedly transact without offering any identification except an Ethereum blockchain address.

The government charges the founders promoted Tornado Cash for its capacity to offer anonymous transactions. They allegedly provided tips and guides for customers on ensuring anonymity through the use of VPNs or the TOR browser. Although aware of the need and ways to integrate KYC/AML into their service, the government believes they deliberately chose not to.

The government maintains that the absence of AML or KYC mechanisms meant the Tornado Cash Service could be exploited by criminals to launder substantial sums of money. They charge that at least $1 billion in criminal funds were funneled through the Tornado Cash service between its inception and August 8, 2022.

According to the indictment, the founders were informed by September 2020 that their service was linked to specific cybercrimes and that they regularly received complaints from cybercrime victims about criminal proceeds being funneled into Tornado Cash. Notably, in September 2020, a cryptocurrency exchange was hacked, with millions in proceeds subsequently being deposited into the Tornado Cash service.

Overall, the indictment alleges that the founders of the Tornado Cash service knowingly and willfully disregarded federal laws regarding money transmitting, leading to their platform being used for significant money laundering activities.

The Sanctions Violations Charge: 

Background of Sanctions Law: The International Emergency Economic Powers Act (IEEPA) empowers the U.S. President to impose economic sanctions in response to threats to the country's national security and foreign policy, once a national emergency is declared. A person is prohibited from violating any regulations or prohibitions under this act.

On June 26, 2008, an Executive Order (13466) was issued under the IEEPA, declaring a national emergency due to threats from the proliferation of weapons on the Korean Peninsula. Later, on March 15, 2016, another Executive Order (13722) was issued in response to North Korea's nuclear and missile program activities. This order blocked all property and interests related to North Korea, its Workers' Party, and any entities that meet specific criteria.

Executive Order 13722 also detailed prohibitions, including:

1. Dealings with any blocked property or interests within the U.S.

2. Making or receiving any contributions, funds, goods, or services to/from such blocked entities.

3. Any transaction that evades or attempts to violate the order's prohibitions.

4. Conspiracies formed to violate the prohibitions.

To put Executive Order 13722 into effect, the North Korea Sanctions Regulations were amended on March 5, 2018. This order incorporated the restrictions and identified the blocked persons, who were then listed in the Federal Register and on the Specially Designated Nationals and Blocked Persons (SDN) List on OFAC's website.

Finally, on September 13, 2019, a hacking group tied to North Korea's intelligence bureau, known as the "Lazarus Group," was designated as an SDN. By April 14, 2022, OFAC pinpointed and blocked an ETH wallet address used by the Lazarus Group, linked to a hacking incident in the Ronin Network in March 2022.

The Ronin Network Hacking Incident Summary:

On March 29, 2022, the Ronin Network, which operates the Ronin Blockchain, announced a security breach. According to the Indictment, the Ronin Blockchain is used for online video games like Axie Infinity, an NFT-based video game. Hackers gained unauthorized access to five of the nine validator nodes used to execute transactions on the Ronin Network bridge. These nodes help move cryptocurrency between the Ronin Blockchain and other blockchains, such as Ethereum. As a result, about $620 million in ETH and another cryptocurrency was stolen.

Tornado Cash Involvement: The government changers the founders of Tornado Cash, a privacy-centric Ethereum mixer, were immediately aware of the incident. They suspected the hackers might use their platform to launder the stolen assets. Indeed, at least $455 million traceable to the hack was funneled through Tornado Cash between April 4 and May 19, 2022. 

The FBI linked the Ronin Network hack to the Lazarus Group on April 14, 2022. On the same day, the Office of Foreign Assets Control (OFAC) designated an address (0x098B716) holding most of the hack's proceeds as property of the Lazarus Group.

Response by Tornado Cash Founders: The government alleges that knowing the funds were being laundered through their platform and the potential legal implications, the Tornado Cash founders discussed blocking deposits directly from OFAC-designated addresses. However, they knew this measure would be superficial and easily bypassed. While publicly they showed compliance by blocking OFAC-listed addresses, in private, they recognized that their measures were easily avoidable.

It was observed that the Lazarus Group could still deposit their ETH into Tornado Cash by first moving the assets to a different Ethereum address not blocked by OFAC, then proceeding with the deposit. The government charges the founders did nothing to stop this evasion method, effectively enabling continued money laundering. The government notes that an analysis showed that 15% of all Tornado Cash deposits in the prior three months originated from the Ronin Network hack. More so, 90% of all identifiable deposits during that time were from criminal exploits.

The DOJ charges that despite knowing their platform's use in money laundering, the founders continued to operate and promote Tornado Cash. They profited from the ongoing activity until at least May 19, 2022.

Defendants' Alleged Profits from the Operation of the Tornado Cash Service:

The government charges that in December 2020, founders of Tornado Cash received approximately 800,000 TORN tokens each. These tokens were initially locked for a year, after which one-third became transferable, and the remaining two-thirds would become transferable linearly over the next two years. According to the indictment, in early 2022, TORN tokens had an average value of $30 each. However, this value increased significantly to about $47 after the implementation of the Relayer Registry on March 2, 2022, which required TORN tokens for certain functions. They charge the Tornado Cash founders then aimed to increase the Tornado Cash service's profitability and the TORN token's value to attract potential investors.

The government alleges that throughout 2022, ROMAN STORM sold TORN tokens belonging to him, SEMENOV, and another collaborator (CC-1). To keep these sales secret, STORM used an account on Binance, a cryptocurrency exchange, registered under a Russian national's name. He conducted transactions from this account, hiding their trading activities from the public.

The government alleges that after the Ronin Network hacking incident, STORM revealed that he traded TORN tokens for stablecoins pegged to the USD. He conducted these transactions using a Russian IP through VPN. On August 8, 2022, OFAC imposed sanctions on Tornado Cash for its failure to stop money laundering. Following this, STORM allegedly accessed the Binance account holding around $8 million worth of cryptocurrency. He then transferred about $7.8 million to three separate cryptocurrency wallets, each belonging to one of the Tornado Cash founders, and advised the other founders to move their funds to new wallets to avoid tracing.

The government charges that defendants manipulated their TORN tokens' value, sold them discreetly, and then moved large sums around to evade detection after sanctions were imposed on their service.

The allegations in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

In the case of United States v. Oliveira, No. 22-2102 (7th Cir. Mar. 20, 2023), the Seventh Circuit Court of Appeals affirmed the district court's sentence of Sinval De Oliveira to 60 months' imprisonment for one count of conspiracy to commit money laundering.

The case began in late 2020 when an unknown person convinced a manager at a Walmart store in Rib Mountain, Wisconsin, to remove $242,980 in cash to satisfy a fraudulent shipping invoice. The cash was delivered to brothers Mario and Moises Amezcua-Cardenas, who then brought the cash to De Oliveira at a hotel in Milwaukee. De Oliveira deposited the funds into a bank account through 42 separate ATM cash deposits across Wisconsin.

De Oliveira was arrested in Illinois in April 2021. At the time of his arrest, he had $70,000 in cash, a ledger, and numerous bank receipts from ten states showing cash deposits totaling $5.1 million made between December 2020 and April 2021. His ledger contained an accounting of the Wisconsin theft, including notes about a Milwaukee hotel stay. De Oliveira explained to police that he was involved with trading Bitcoin on behalf of a company.

In September 2021, the grand jury indicted De Oliveira for conspiracy to commit money laundering. He was arrested again in North Carolina, this time with $4,000 cash, more ATM receipts, and another ledger showing that he had deposited $7.9 million since his previous arrest. He again told the agents that he traveled the country as a "bitcoin broker," picking up and depositing money into bank accounts. He denied knowing where the cash came from, though he admitted the source was a "grey area" of operation and speculated it could be from Mexican politicians or drug cartels.

De Oliveira pleaded guilty to one count of conspiracy to commit money laundering of the proceeds of a wire fraud scheme. The presentence investigation report (PSR) calculated a guidelines range of 87 to 108 months' imprisonment, based on a total offense level of 28 and a criminal-history category of II. The base offense level was 7, and increased by 18 levels based on a loss of more than $5 million. This loss amount included the $5.1 million in deposits that was reflected in the ledger found during De Oliveira's first arrest. De Oliveira objected to the loss amount, arguing the court should only consider the proceeds of the Wisconsin theft because the government had not proved any other specific criminal act.

The court overruled his objections and concluded that the preponderance of the evidence showed that De Oliveira continued participating in the money laundering conspiracy after the Wisconsin theft by traveling to multiple states and depositing large amounts of cash. The court discussed the parties' aggravating and mitigating arguments and imposed a below-guidelines sentence of 60 months' imprisonment.

On appeal, De Oliveira challenged the loss amount calculation and the resulting 18-level increase to the offense level. The Seventh Circuit Court of Appeals affirmed the district court's decision, stating that the court did not commit clear error in its loss calculation. 

De Oliveira argues that the government did not meet its burden of proving that the $5.1 million was relevant conduct because it did not link those funds to any specific unlawful acts. But the law does not require this. Because De Oliveira pled guilty to a conspiracy to launder money, the guidelines attribute all reasonably foreseeable unlawful activity taken in furtherance of the conspiracy to his loss amount. U.S.S.G. § 1B1.3(a)(1). In a conspiracy case, the government is not required to trace each dollar to a specific instance of money laundering. Baker227 F.3d at 966see United States v. Gabel85 F.3d 1217, 1224 (7th Cir. 1996). In other words, while Oliveira's substantive charge of money laundering is limited to financial transactions tied to a "specified unlawful activity," 18 U.S.C. § 1956(a)(1), his loss amount at sentencing includes any unlawful activity that was reasonably foreseeable and taken in furtherance of the money laundering scheme, so long as it can be proven by a preponderance of the evidence. See Baker227 F.3d at 965 (money not linked to any particular transaction but used to facilitate and "bank roll" a money laundering scheme was properly included in the loss amount at sentencing).

United States v. Oliveira, No. 22-2102, at *3-4 (7th Cir. Mar. 20, 2023)

The court found that the $5.1 million in deposits was part of the same money laundering scheme or plan to conceal wire fraud as the losses created by the Walmart theft. Therefore, it was not clear error for the court to find that the $5.1 million reflected illegal activity related to De Oliveira's offense of conviction and include it in the loss amount calculation.


In United States v. Lucas, Francisco Lucas, Jr. pleaded guilty to unlawful possession of a firearm. At sentencing, the district court imposed a guideline enhancement pursuant to U.S.S.G. § 2K2.1(a)(4)(B) based on evidence that the offense involved a semiautomatic firearm capable of accepting a large capacity magazine. The term "large capacity magazine" is further defined in Application Note 2 to § 2K2.1 in terms of the ability to fire many rounds without reloading and the capability to accept more than 15 rounds of ammunition.The district court applied a heightened base offense level under U.S.S.G. § 2K2.1(a)(4)(B) based a finding that Lucas's magazine could accept more than 15 rounds. Tyler Criminal Defense Blog

During sentencing, the parties disputed whether Lucas's base offense level should be increased under U.S.S.G. § 2K2.1(a)(4)(B), which applies if the offense involved a "semiautomatic firearm that is capable of accepting a large capacity magazine." The government filed an expert report from a federal agent who reviewed the photographs and video of Lucas's contraband. The agent stated that Lucas's firearm looked like a Glock model 22, .40 caliber pistol and that Lucas's magazine looked like an extended-length magazine capable of accepting more than 15 rounds of ammunition. The agent acknowledged the commercial availability of extended magazines that have been modified with "blockers" to accept fewer than 15 rounds. Nonetheless, the agent observed that he had never personally encountered such a modified magazine in California. The agent concluded that without a physical inspection of the firearm and magazine, he could not conclusively determine whether Lucas's magazine was equipped with such a blocker or could have accepted more than 15 rounds at the time the photographs were taken.

The Ninth Circuit held that the government did not convincingly demonstrate that Lucas's magazine could accept more than 15 rounds. It criticized the district court's reliance on the government's expert agent, whose views were based on visual evidence from photos and videos and were, at best, equivocal.

Without physical evidence, the government largely relied on its expert agent, who was, at most, equivocal. The agent acknowledged that without physical inspection, he could not conclusively state whether the magazine could in fact accept more than 15 rounds or whether it was instead modified to accept fewer. Nor did the agent explain the prevalence of any type of magazine in the community; he only relayed his personal experience with modified magazines. On this record, the district court's finding that the government established the capacity of Lucas's magazine by clear and convincing evidence was clear error. See United States v. Graf610 F.3d 1148, 1157 (9th Cir. 2010) ("A finding is clearly erroneous if it is illogical, implausible, or without support in the record.").

The Ninth Circuit reversed and remanded for resentencing.


The question before the court in United States v. Sansbury was whether the application of a four-level sentencing enhancement for abduction under U.S.S.G. § 2B3.1(b)(4)(A) was justified. The district court found a 4-level increase was applicable because the court concluded that moving the cashier to the restroom did facilitate the commission of the robbery of the pharmacy. On appeal, the Fifth Circuit affirmed the district court's ruling that the 4-level sentencing enhancement was properly calculated in the PSR. 

The Incident and Procedural History

In June 2019, Sansbury, along with his co-defendant was involved in an armed robbery at a CVS pharmacy. The government alleged the duo restrained the cashier and pharmacist, using zip-ties, and proceeded to steal narcotics. Sansbury was later charged and pleaded guilty without a plea agreement to multiple offenses, including conspiracy to commit a robbery involving controlled substances, committing a robbery involving controlled substances, and discharging a firearm in furtherance of a crime of violence. Tyler Criminal Defense Lawyer Blog 

A significant part of Sansbury's sentencing stemmed from a four-level enhancement under U.S.S.G. § 2B3.1(b)(4)(A), which applies when a person has been physically abducted to facilitate the commission of the offense or escape. In this case, the enhancement was applied because Sansbury had forced the cashier into the restroom and zip-tied his hands together.

Sansbury appealed the sentencing enhancement, arguing that his actions did not constitute abduction, as the movement of the cashier did not enable him to commit the crime or facilitate his escape.

Court’s Analysis and Decision

The Fifth court analyzed the definition of "abduction" as per the guidelines, which states that a person is considered abducted if the victim is forced to accompany the offender to a different location. It also clarified that the term 'different location' should be interpreted flexibly, even within the same building.

Second, Sansbury challenges the district court's determination that the "different location" requirement of § 2B3.1(b)(4)(A) was satisfied when he moved the cashier to the bathroom. This circuit has repeatedly held that "the term 'different location' should be interpreted flexibly on a case by case basis." United States v. Johnson619 F.3d 469, 472 (5th Cir. 2010). Moreover, the abduction enhancement is proper "even though the victim remained within a single building." Id. at 474. Here, Sansbury forced the cashier from the cashier's area at the front of the store to the restroom. Accordingly, the different location requirement was also satisfied.

United States v. Sansbury, No. 22-30114, at *4 (5th Cir. May 1, 2023).

Addressing Sansbury's arguments, the court clarified that the 'forced accompaniment' requirement for abduction is not narrowly defined. Sansbury had pointed a gun at the cashier and moved him from the cashier area to the restroom, which was sufficient to satisfy this requirement. Furthermore, this move was within the CVS store, hence the 'different location' requirement was also met.

Sansbury forced the cashier to the restroom and then zip-tied him there so he would not interfere with the robbery or call the police. This incapacitation of the cashier prevented the cashier from interfering in or disrupting the robbery, thereby facilitating the commission of the offense. Accordingly, we conclude that the district court did not err in imposing the abduction enhancement.

United States v. Sansbury, No. 22-30114, at *4-5 (5th Cir. May 1, 2023).

This blog post was prepared with the assistance of ChatGPT-4 AI. Nothing in this post should be considered legal advice or the creation of an attorney-client relationship. This blog is strictly for informational purposes only.

In Ciminelli v. United States, No. 21-1170, Ciminelli was convicted of wire fraud for his role in a scheme to rig the bid process for obtaining state-funded development projects. 

In this case, we must decide whether the Second Circuit's longstanding "right to control" theory of fraud describes a valid basis for liability under the federal wire fraud statute, which criminalizes the use of interstate wires for "any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises."

Ciminelli v. United States, No. 21-1170, at *4 (May 11, 2023)

The Supreme Court held that the right-to-control theory, which focuses on depriving a victim of valuable economic information, does not constitute a valid basis for wire fraud liability under the federal fraud statutes. Tyler Criminal Defense Blog 

“Because "potentially valuable economic in- formation" "necessary to make discretionary economic decisions" is not a traditional property interest, we now hold that the right-to-control theory is not a valid basis for liability under §1343. Accordingly, we reverse the Second Circuit's judgment.” Ciminelli v. United States, No. 21-1170, at *4-5 (May 11, 2023)

The case centered around the Buffalo Billion initiative, a project aimed at investing $1 billion in development projects in upstate New York. Ciminelli, the head of a construction company, was allegedly involved in a scheme along with other individuals to manipulate the bid process to secure lucrative contracts under the initiative. The scheme alleged involved paying bribes and tailoring requests for proposal (RFPs) to favor Ciminelli's company.

Ciminelli and his co-conspirators were indicted on multiple charges, including wire fraud under 18 U.S.C. §1343 and conspiracy to commit wire fraud under §1349. The government relied on the Second Circuit's right-to-control theory, which posits that wire fraud can be established by depriving a victim of potentially valuable economic information necessary for discretionary economic decisions.

The Supreme Court examined the text and historical interpretation of the federal wire fraud statute and concluded that the right-to-control theory does not align with its requirements. The court emphasized that the wire fraud statute is limited in scope to the protection of property rights. While lower federal courts had interpreted the statute to include intangible interests, such as the right to control one's assets or access to honest services, the Supreme Court clarified that the fraud statutes protect only traditional property interests. 

The court traced the development of the right-to-control theory, noting that it emerged after a landmark Supreme Court decision, McNally v. United States, in 1987, which confined the fraud statutes to the protection of individual property rights. Congress responded to McNally by enacting §1346, which revived only the intangible right of honest services. “This Court halted that trend in McNally v. United States, 483 U.S. 350, which confined the statutes to the "protect[ion of] individual property rights." Id., at 359, n. 8.” Ciminelli v. United States, No. 21-1170, at *2 (May 11, 2023). Congress's silence regarding other intangible interests indicated that the wire fraud statute should not be expanded to cover the intangible right to control.

“Because the right to valuable economic information needed to make discretionary economic decisions is not a traditional property interest, the Second Circuit's right-to-control theory cannot form the basis for a conviction under the federal fraud statutes. Pp. 4-10.” Ciminelli v. United States, No. 21-1170, at *2 (May 11, 2023).

This blog post was prepared with the assistance of ChatGPT-4 AI. Nothing in this post should be considered legal advice or the creation of an attorney-client relationship. This blog is strictly for informational purposes only.

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