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Date: 03-12-2019

Case Style:

United States of America v. Darren Gonzalez

Case Number: 18-8017

Judge: Murphy

Court: United States Court of Appeals for the Tenth Circuit on appeal from the District of Wyoming (Natrona County)

Plaintiff's Attorney: Eric J. Heimann, Mark A. Klaasse

Defendant's Attorney: William D. Lamm

Description:




Gonzales used his personal and business bank accounts to launder the proceeds of
his drug sales. After extensive investigations by state and federal law
enforcement, a federal grand jury charged Gonzales with committing a multitude
of drug and financial crimes. He eventually agreed to plead guilty to ten of the
fifty-four counts set out in the indictment, specifically including seven counts of
concealment money laundering. See 18 U.S.C. § 1956(a)(1)(B)(i); see also
United States v. Majors, 196 F.3d 1206, 1211 (11th Cir. 1999) (noting that
§ 1956(a)(1)(B)(i) is “referred to as the ‘concealment’ . . . provision of the money
laundering statute.”). On appeal, Gonzales asserts, for the first time, that the
guilty pleas underlying two of his money laundering convictions, Counts 50 and
52, are not supported by a sufficient factual basis. See Fed. R. Crim. P. 11(b)(3).
This court rejects Gonzales’s arguments at the first step of plain-error review.1
See United States v. Carillo, 860 F.3d 1293, 1300 (10th Cir. 2017) (holding that
1The parties on appeal vigorously contest whether Gonzales’s merits-based
appeal is subject to either one or both of two potential waivers of appellate rights.
Appeal waivers do not, however, affect this court’s “constitutional or statutory
jurisdiction.” United States v. Black, 773 F.3d 1113, 1115 n.2 (10th Cir. 2014).
Because Gonzales’s Rule 11(b)(3) claims plainly fail on the merits, “this court
exercises its discretion to bypass the relatively complex waiver issue[s] and
resolve [Gonzales’s] appeal on the merits. Id. Such a course of action is
appropriate here because the government did not raise the waiver issue until its
response brief, a brief that also addressed the merits of Gonzales’s appeal. Thus,
the decision to bypass resolution of the potential appellate waivers does not cause
the government any additional burden. United States v. Garcia-Ramirez, 778
F.3d 856, 857 (10th Cir. 2015). In undertaking this path, however, this court
again emphasizes it is only appropriate to bypass resolution of a waiver issue in a
particularly narrow set of circumstances. See id. (cataloging circumstances).
Gonzales’s appeal just happens to be such a case.
3
to satisfy the plain error standard, the appellant must, as the first step in a fourstep
journey, demonstrate the district court committed an error). That is, we
conclude the district court did not err in finding that Gonzales’s guilty pleas to
Counts 50 and 52 were supported by a sufficient factual basis. The conduct
Gonzales admitted as part of his plea agreement and at the plea colloquy establish
the existence of every element of a violation of § 1956(a)(1)(B)(i) as to both
relevant counts. Thus, exercising jurisdiction pursuant to 28 U.S.C. § 1291, this
court affirms the district court’s judgment of conviction as to Counts 50 and 52.
II. ANALYSIS
A. Standard of Review
Gonzales asserts his concealment money laundering convictions for Counts
50 and 52 are not, in violation of the dictates of Rule 11(b)(3), supported by a
sufficient factual basis. “This court reviews alleged violations of Rule 11(b) that
were not objected to in the district court under the exacting plain error standard.”
Carillo, 860 F.3d at 1300. To satisfy that exacting standard, Gonzales must show
“(1) an error; (2) the error is plain or obvious; (3) the error affects the appellant's
substantial rights (i.e., the error was prejudicial and affected the outcome of the
proceedings); and (4) the error seriously affects the fairness, integrity, or public
reputation of judicial proceedings.” Id. Gonzales’s appeal can be easily resolved
at the first step of plain error review because his guilty pleas are supported by an
adequate factual basis.
4
B. Discussion
“Before entering judgment on a guilty plea, the court must determine that
there is a factual basis for the plea.” Fed. R. Crim. P. 11(b)(3). “To determine
whether a factual basis exists for the defendant's plea, the district court must
compare the conduct admitted or conceded by the defendant with the elements of
the charged offense to ensure the admissions are factually sufficient to constitute
the charged crime.” Carillo, 860 F.3d at 1305. The statutory provision
criminalizing concealment money laundering provides, in relevant part, as
follows:
Whoever, knowing that the property involved in a financial
transaction represents the proceeds of some form of unlawful
activity, conducts or attempts to conduct such a financial transaction
which in fact involves the proceeds of specified unlawful activity . . .
knowing that the transaction is designed in whole or in part . . . to
conceal or disguise the nature, the location, the source, the
ownership, or the control of the proceeds of specified unlawful
activity . . . shall be sentenced to a fine of not more than $500,000 or
twice the value of the property involved in the transaction,
whichever is greater, or imprisonment for not more than twenty
years, or both.
18 U.S.C. § 1956(a)(1)(B)(i). Section 1956(a)(1)(B)(i) contains the following
four elements: (1) defendant “engaged in a financial transaction”; (2) defendant
knew “the property involved in that transaction represented the proceeds of his
unlawful activities”; (3) “the property involved was in fact the proceeds of that
criminal enterprise”; and (4) defendant knew “the transaction was designed in
whole or in part to conceal or disguise the nature, the location, the source, the
ownership or the control of the proceeds of the specified unlawful activities.”
5
United States v. Garcia-Emanuel, 14 F.3d 1469, 1473 (10th Cir. 1994) (quotation
and alteration omitted); see also Pattern Crim. Jury Instr. 10th Cir. 2.73.1 (2011
ed. updated Feb. 2018).
The question then becomes whether the “conduct admitted or conceded by”
Gonzales is sufficient to create a factual basis for each of these four elements as
to Count 50 and Count 52. Carillo, 860 F.3d at 1305. “In assessing factual
sufficiency under the plain error standard, this court may look beyond those facts
admitted by [Gonzales] during the plea colloquy and scan the entire record for
facts supporting his conviction.” Id.
1. Count 50
Count 50 charged Gonzales with wire transferring “$79,836 from Meridian
Trust Federal Credit Union account ending in 879 to Meridian Trust Federal
Credit Union account ending in 763.” The indictment noted the account ending
in 763 (i.e., the account into which the funds were transferred) was held in the
name of M.G.2 Finally, the indictment alleged Gonzales conducted this wire
transfer knowing (1) it affected interstate commerce; (2) it involved the proceeds
of the unlawful distribution of controlled substances, in violation of 21 U.S.C.
§ 841; (3) the proceeds did, in fact, flow from the illegal distribution of drugs;
2These initials refer to Gonzales’s daughter Michelle. The PSR notes that
Michelle, who is “learning disabled” is twenty-two years of age and lives with
Gonzales. Both parties in their briefs on appeal contend that the account into
which the money was transferred was in Michelle’s name.
6
and (4) the wire transfer was “designed at least in part to conceal and disguise the
nature, source, ownership, and control of the proceeds.” Paragraph 7.f. of the
plea agreement included the following factual basis for Count 50:
Count 50 - Money Laundering - On February 17, 2016, the
Defendant transferred $79,836 from one Meridian Trust Federal
Credit Union account he controlled to another Meridian Trust FCU
account he controlled. At the time, the Defendant knew that some of
the $79,836 involved in this financial transaction had been earned
from unlawful drug sales. And the Defendant conducted this
financial transaction at least in part to conceal the nature, source,
ownership and control of the proceeds of his unlawful drug sales.
Paragraph 7.j. of the plea agreement stipulated that “Meridian Trust Federal
Credit Union . . . [is a] financial institution[] engaged in, and whose activities
affect, interstate commerce.” See 18 U.S.C. § 1956(c)(4)(B) (providing that a
“‛financial transaction’ means,” inter alia, “a transaction involving the use of a
financial institution which is engaged in, or the activities of which affect,
interstate or foreign commerce in any way.”).3 At the change of plea hearing, the
district court read the charge as set out in the indictment and asked Gonzales how
he pleaded to the charge. After Gonzales stated he pleaded guilty, the district
court asked Gonzales if he adopted the factual basis set out in the plea agreement
3In advance of the change-of-plea hearing, the government also filed a
document titled “Prosecutor’s Statement and Elements of the Crime.” This
document reiterated the factual basis underlying each of the concealment money
laundering counts to which Gonzales was pleading guilty and specifically
delineated the elements necessary to obtain a conviction for that crime. Thus, to
be clear, Gonzales was provided with accurate and easily understood explanations
of the elements and key facts of each count of conviction well before the plea
colloquy.
7
as his own. Gonzales responded “I adopt the statement.” He further stipulated
during the hearing that Meridian Trust Federal Credit Union was a “financial
institution[] engaged in and whose activities affect interstate commerce.”
These admitted facts satisfy all the elements of concealment money
laundering. Gonzales admitted wire transferring $79,836 from one account to
another at the Meridian Trust Federal Credit Union, a credit union engaged in
interstate commerce. For purposes of § 1956, a “transaction” includes a transfer
and, “with respect to a financial institution,” a transaction includes a “transfer
between accounts.” 18 U.S.C. § 1956(c)(3). A “financial institution” includes
“any credit union.” Id. § 1956(c)(6) (providing that the term “financial
institution” includes those institutions defined in 31 U.S.C. § 5312(a)(2)); see
also 31 U.S.C. § 5312(a)(2)(E) (providing that “financial institution” means . . .
any credit union”). A “financial transaction” includes any “transaction involving
the use of a financial institution which is engaged in, or the activities of which
affect, interstate or foreign commerce in any way or degree.” 18 U.S.C.
§ 1956(c)(4). Based on these statutory definitions, Gonzales’s admission that he
transferred money from one account (in his name) to another account (in his
daughter’s name) undoubtedly qualifies as conducting a financial transaction for
purposes of § 1956(a)(1)(B)(i). Additionally, Gonzales admitted he knew the
transaction did, in fact, include money earned from drug sales, satisfying the
second and third elements of concealment money laundering. Finally, Gonzales
admitted he made the transfer at least in part to conceal the nature, source,
8
ownership, and control of the drug proceeds. This admission satisfies the final
element of § 1956(a)(1)(B)(i).4
Strangely enough, especially given his admission as to his criminal state of
mind in undertaking the financial transaction at issue in Count 50, Gonzales
objects to the existence of a sufficient factual basis by asserting the factual basis
could, hypothetically, describe a lawful transfer of money from one account to
another. In so arguing, Gonzales asserts “People transfer money from one bank
account to another every day for a variety of perfectly legitimate reasons.”
Appellant’s Opening Br. at 25. As set out above, however, Gonzales specifically
admitted the transferred money included drug proceeds and that he made the
transfer with intent to conceal its nature (drug proceeds), source (drug sales),
ownership (himself), and control (himself).5 Since all of the elements of the
4Although Gonzales’s admission as to his state of mind is fully sufficient to
support the existence of the fourth element of concealment money laundering, the
existence of the element is further supported by Gonzales’s admission that the
credit union account receiving this transfer was held in the name of his daughter
Michelle. That is, the fact Gonzales moved the money from an account in his
name to one not in his name, but in his control, fully supports Gonzales’s
admission that his intent in undertaking the transfer was to conceal the ownership
or control of the proceeds.
5This court recognizes that if a defendant goes to trial on a charge of
concealment money laundering, the government must present substantial evidence
of concealment to support a verdict in its favor. United States v. Garcia-
Emanuel, 14 F.3d 1469, 1473-76 (10th Cir. 1994). By pleading guilty, however,
Gonzales specifically “relieved the government of its burden of proving the
necessary factual predicate.” United States v. Roe, 913 F.3d 1285, 1294 (10th
Cir. 2019). To the extent Gonzales’s brief could be read as asserting that to
establish a factual basis for the concealment element the government must do
more than demonstrate Gonzales’s admission of intent, his argument is
9
crime were admitted, the district court did not err when it accepted Gonzales’s
plea to Count 50. See United States v. Roe, 913 F.3d 1285, 1294 (10th Cir. 2019)
(holding that “a knowing and voluntary guilty plea is an admission of all the
elements of a formal criminal charge” (quotation omitted)); see also United
States v. DeFusco, 949 F.2d 114, 120 (4th Cir. 1991) (holding that when a
defendant was repeatedly informed of the elements of the crime, specifically
including the intent element, and then admitted the existence of those elements,
factual basis for crime was established); United States v. Guichard, 779 F.2d
1139, 1146 (5th Cir. 1986) (same).6
inconsistent with the binding case law cited above. Indeed, rather than cite to
cases arising under Rule 11(b)(3), Gonzales’s opening brief relies on cases
addressing whether various jury verdicts are supported by sufficient evidence. As
noted above, however, by pleading guilty, Gonzales specifically relieved the
government of that burden. Id. In any event, even in the context of sufficiency
of the evidence, Gonzales’s admission that he acted with the intent to conceal
would be sufficient to support a guilty verdict. See Garcia-Emanuel, 14 F.3d at
1475 (noting such a guilty verdict can be supported by, inter alia, “statements by
a defendant probative of intent to conceal”).
6In holding that Gonzales’s challenge to the factual basis of his guilty plea
as to the fourth element (intent to conceal) is foreclosed by his guilty plea, this
court notes as follows: (1) the elements of Count 50 (as well as Count 52) were
set out specifically and explicitly in the plea agreement, to which Gonzales was a
signatory; (2) at the plea hearing, Gonzales stated he had an opportunity to
discuss the plea agreement with his attorney before signing it and stated he
understood its terms; (3) at no point in the plea hearing did Gonzales equivocate
as to the fact that he intended the financial transaction to conceal, at least in part,
the nature, source, ownership, and control of the proceeds of his illegal drug
distribution. In these circumstances, Gonzales’s admissions as to each element of
the charged count of concealment money laundering form a sufficient factual
basis for his guilty plea for purposes of Rule 11(b)(3). United States v. Covian-
Sandoval, 462 F.3d 1090, 1094 (9th Cir. 2006) (holding that defendant’s
admission as to his state of mind as he crossed the border satisfied the mens rea
10
2. Count 52
Count 52 charged Gonzales with knowingly accessing and using safety
deposit box 42N, located at Meridian Trust Federal Credit Union, to hold cash
earned from the unlawful distribution of controlled substances. The indictment
further alleged that he did so, at least in part, to conceal the nature, source, and
location of these drug proceeds. Finally, the indictment alleged the use of the
safety deposit box “affected interstate commerce.” Paragraph 7.h. of the plea
agreement contained the following factual basis for Count 52:
Count 52 - Money Laundering - On December 21, 2015, the
Defendant accessed safety deposit box 42N located at Meridian Trust
FCU in Cheyenne, Wyoming. At the time, the Defendant was
knowingly using the safety deposit box to hold cash earned from
unlawful drug sales. And the Defendant conducted this financial
transaction at least in part to conceal the nature, source, ownership
and control of the proceeds of his unlawful drug sales.
Paragraph 7.j. of the plea agreement further stated that “Meridian Trust Federal
Credit Union . . . [is a] financial institution[] engaged in, and whose activities
affect, interstate commerce.” At the change of plea hearing, the district court
read the charge as set out in the indictment and asked Gonzales how he pleaded to
the charge. After Gonzales stated he pleaded guilty, the district court asked
Gonzales if he adopted the factual basis set out in the plea agreement as his own.
requirement for the crime of illegal reentry); see also United States v. O’Hara,
960 F.2d 11, 13 (2d Cir. 1992) (“[A] reading of the indictment to the defendant
coupled with his admission of the acts described in it [provides] a sufficient
factual basis for a guilty plea, as long as the charge is uncomplicated, the
indictment detailed and specific, and the admission unequivocal.” (quotation
omitted)).
11
Gonzales responded “Yes, I do.” He further stipulated during the hearing that
Meridian Trust Federal Credit Union was a “financial institution[] engaged in and
whose activities affect interstate commerce.”
These admitted facts satisfy all elements of concealment money laundering.
Gonzales admitted to knowingly using safety deposit box 42N at the Meridian
Trust Federal Credit Union, a credit union engaged in interstate commerce, “to
hold cash earned from unlawful drug sales.” For purposes of § 1956, a
“transaction” is defined to include, “with respect to a financial institution . . . use
of a safe deposit box.” 18 U.S.C. § 1956(c)(3). Furthermore, as set out more
fully above, supra at 7, a financial institution includes any credit union. Id.
§ 1956(c)(6); 31 U.S.C. § 5312(a)(2)(E). Thus, Gonzales’s use of safety deposit
box 42 is a transaction for purposes of § 1956.7 Furthermore, as noted above, a
transaction amounts to a financial transaction as long as it involves “the use of a
financial institution which is engaged in, or the activities of which affect,
interstate or foreign commerce in any way or degree.” 18 U.S.C. § 1956(c)(4).
Gonzales specifically admitted Meridian Trust Federal Credit Union is such an
7In arguing for a contrary result, Gonzales improperly focuses on the
indictment’s allegation he accessed the safety deposit box on, or around,
December 21, 2015. He asserts that “accessing a safety deposit box does not
describe any financial transaction.” Appellant’s Opening Br. at 22. The fact that
he accessed the safety deposit box on that date, however, merely demonstrates
that he was “using” it on, or around, that date. As the statutory definitions set out
above demonstrate, it is the use of the box that constitutes a transaction for
purposes of § 1956 and the mere fact Gonzales did not deposit or withdraw funds
from the box on that day is irrelevant.
12
institution. For these reasons, Gonzales’s admissions clearly evidenced a
financial transaction for purposes of § 1956. Gonzales further admitted he knew
the safety deposit box did, in fact, contain the proceeds of unlawful drug sales.
This admission satisfies the second and third elements of concealment money
laundering. Finally, Gonzales admitted he accessed and used the safety deposit
box with intent to conceal the nature, source, ownership, and control of the drug
proceeds. This admission satisfies the intent-to-conceal element of § 1956. See
supra at 7-9 & accompanying notes (explaining why, under the facts of this case,
Gonzales’s knowing and voluntary guilty plea to the intent-to-conceal element is
sufficient to provide a factual basis for Gonzales’s guilty plea).
In attempting to overcome this conclusion, Gonzales raises two related
arguments. First, he claims the “facts suggest that [he] either had the safety
deposit box in his name or the name of a close family member. As a result, his
identity could be easily traced to the box.” Appellant’s Opening Br. at 22. This
argument fails because, to obtain a conviction for concealment money laundering,
there is no requirement that the financial transaction conceal anyone’s identity.
United States v. Lovett, 964 F.2d 1029, 1034 n.3 (10th Cir. 1992) (holding that
“the money laundering statute is not aimed solely at commercial transactions
intended to disguise the relationship of the item purchased with the person
providing the proceeds; the statute is aimed broadly at transactions designed in
whole or in part to conceal or disguise in any manner the nature, location, source,
ownership or control of the proceeds of unlawful activity”). Gonzales also
13
contends the factual basis failed “to describe how [he] did anything with the
illegally-obtained funds kept in the safety deposit box to convert them to some
form of legitimate wealth.” Appellant’s Opening Br. at 23. Gonzales is simply
wrong in asserting the government must prove such conduct (conversion to
legitimate wealth) to obtain a conviction for concealment money laundering. A
defendant is guilty of violating § 1956(a)(1)(B)(i) if he conducts a financial
transaction involving criminal proceeds with intent to conceal in any manner the
nature, source, location, ownership, or control of the criminal proceeds. Lovett,
964 F.2d at 1034 n.3; Garcia-Emanuel, 14 F.3d at 1473. It is not necessary that
the money laundering transaction make the criminal proceeds appear to be
legitimate; it is enough that the transaction is intended to conceal one of the
statutory attributes. Gonzales specifically admitted that he undertook the
transaction with just such an intent.

Outcome: For those reasons set out above, the judgment of conviction as to Counts 50
and 52 entered by the United States District Court for the District of Wyoming is
hereby AFFIRMED.

Plaintiff's Experts:

Defendant's Experts:

Comments:



 
 
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