The Criminal Defense Blog

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. Baker, 227 F.3d at 966, see United States v. Gabel, 85 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 Baker, 227 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. Graf, 610 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.

Holding

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 

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.

In United States v. Henderson, No. 18-1894, at *2-3 (3d Cir. Mar. 29, 2023), Henderson was indicted for possession with intent to distribute 40 grams or more of fentanyl, a crime to which she pleaded guilty without a plea agreement. The District Court applied the career offender enhancement, raising the applicable Guideline range from 70 to 87 months' imprisonment to 188 to 235 months' imprisonment. This enhancement was based on two prior convictions: one for possession with intent to deliver heroin, and the other for conspiracy to commit robbery. The District Court deemed the latter as a "crime of violence," leading to Henderson's appeal against the application of the career offender enhancement. Tyler Criminal Defense Blog 

On appeal, the Third Circuit noted that he District Court deviated from the traditional understanding that conspiracy does not qualify as a "crime of violence." The Sentencing Guideline's commentary includes inchoate offenses like conspiracy, yet United States v. Abreu explicitly excluded such offenses from the definition of a "crime of violence."

Abreu objected on the ground that conspiracy to commit a crime of violence requires only an agreement to commit an offense that "has as an element the use, attempted use, or threatened use of physical force against the person of another," U.S.S.G. § 4B1.2(a)(1), and does not itself include that element. 

…

In short, the plain text, structure, and purpose of the Guidelines indicate that "there is only one reasonable construction" of "crime of violence" as used in § 2K2.1, Kisor, 139 S. Ct. at 2415, and, just as in § 4B1.2(a), that construction excludes conspiracy offenses. As a result, Abreu's prior conviction for conspiracy to commit second-degree aggravated assault does not qualify him for an enhancement under § 2K2.1(a)(4), and the District Court erred in applying that enhancement.

United States v. Abreu, 32 F.4th 271, 278 (3d Cir. 2022)

In United States v. Preston, the Court deviated from Abreu, suggesting that the elements of the target offense of a conspiracy could subsume the elements of the conspiracy itself, thus making a conspiracy to commit a crime of violence a crime of violence itself. However, this interpretation went against the Supreme Court's decision in United States v. Mathis, which highlighted that a crime's elements are those parts that must be proved beyond a reasonable doubt.

In coming to this conclusion, however, we explicitly noted that it went "beyond the general elements of criminal conspiracy"-an approach disallowed by the Supreme Court in United States v. Mathis. As the Mathis Court noted, a crime's elements are "the constituent parts of a crime's legal definition, which must be proved beyond a reasonable doubt."

United States v. Henderson, No. 18-1894, at *11 (3d Cir. Mar. 29, 2023).

The Third Circuit went on to hold that Henderson's case satisfied all four prongs of the plain error review standard—the error was clear and obvious, affecting substantial rights and impacting the outcome of the proceedings. Despite Henderson receiving a lower sentence than the guideline range, the sentence was above the range that would have otherwise applied without the career offender enhancement.

“Because the District Court plainly erred, we will vacate Henderson's sentence and remand for resentencing. In doing so, we also hold that Preston is overruled by the Supreme Court's decisions in Kisor and Mathis.” United States v. Henderson, No. 18-1894, at *17 (3d Cir. Mar. 29, 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.