245 F. Supp.2d 24 (2003) | Cited 0 times | District of Columbia | February 5, 2003


This matter is before the Court on the defendant's motion for judgmentof acquittal on two counts of the indictment and a new trial on theremaining counts of the indictment. After careful consideration of theparties' pleadings, the Court concludes, as conceded by the government,that judgments of acquittal must be entered on counts four and five ofthe indictment (the money laundering counts). However, despite thedefendant's claims of prejudice regarding the other three counts of theindictment, the Court finds all of these claims to be without merit andtherefore concludes that he is not entitled to a new trial on countsone, two, and three of the indictment.

I. Summary of Facts:1

The defendant in this matter, Dr. Kinley W. Howard, was accused offraudulently acquiring control over the assets of the estate of hisdeceased aunt, Mildred Powell, by defrauding the Probate Division ofthe Superior Court of the District of Columbia to get himself appointed as aco-personal representative of his aunt's estate. In a five countindictment, Dr. Howard was charged with two counts of mail fraud (countsone and two), 18 U.S.C. § 1341 (2000); one count of wire fraud (countthree), 18 U.S.C. § 1343 (2000); and two counts of engaging inmonetary transactions in property derived from unlawful activity ("moneylaundering") (counts four and five), 18 U.S.C. § 1957 (2000). Themail fraud counts were based upon letters the defendant wrote on February26, 1997, and March 26, 1997, respectively, to Riggs Bank and PaineWebber, Inc., closing the accounts of Mildred Powell at theseinstitutions. Indictment ¶ 30, at 7-8. The wire fraud count alleged thaton or about January 15, 1997, the defendant sent a letter from his officein Florida to Crestar Bank in Washington D.C., requesting the wiretransfer of some of Ms. Powell's funds to an account he had establishedat the Florida First Bank, which resulted in $61,572.02 being wired fromCrestar to the Florida First Bank on January 23, 1997. Id. ¶ 4, at 9. OnMarch 26, 1997, the defendant again sent a letter to Crestar requesting afurther transfer of Ms. Powell's account assets. Thereafter, on or aboutApril 9, 1997, the defendant caused a second wire transfer to be made inthe amount of $12,859.98 from Crestar Bank to the Florida First Bank.Id. ¶ 6, at 9.

Count Four, although incorporating the first twenty-eight Paragraphs ofthe indictment, specifically asserted that on or about April 9, 1997, thedefendant engaged in money laundering by causing the wire transfer of thesame funds ($12,859.98) that also constituted part of the predicateconduct for the wire fraud offense charged in count three of theindictment. Id. ¶ 2, at 10. Count Five, which again incorporates thefirst twenty-eight paragraphs of the indictment, specifically chargedthat on or about February 26, 1997, the defendant engaged in moneylaundering by causing the mail transfer of the same funds ($23,903.43)that also constituted the predicate conduct for count one of theindictment, wherein the defendant is charged with mail fraud. Id. ¶ 2, at10-11.

The parties appeared before the Court on August 20, 2002, for thecommencement of the trial. However, before jury selection began, for thefirst time the defendant challenged, orally, the sufficiency of the moneylaundering counts based upon the theory that there was no illegalactivity from which funds were acquired by the defendant and thenlaundered as alleged in the money laundering counts of the indictment,separate from the conduct the government also claimed constituted eithermail or wire fraud as charged in counts one and three of the indictment,respectively. Prior to the Court's formal ruling on the defendant'schallenge, the defendant filed a written motion to dismiss counts fourand five, alleging that he could not be lawfully convicted of moneylaundering in violation of 18 U.S.C. § 1957 "where there is no proofof an independent criminal transaction separate from the underlyingoffense[,]" and that the indictment was flawed in this regard. In aMemorandum Opinion dated August 28, 2002, the Court denied thedefendant's motion to dismiss. Although agreeing that a conviction formoney laundering could not be based upon the same events that constitutedeither the mail or wire fraud charges, the Court concluded that dismissalwas not required because the government had "alleged unlawful activity[other than the conduct charged in the mail and wire fraud counts] thatpreceded the activity that constituted the defendant's money laundering."United States v. Kinley W. Howard, No. 02-0079, slip op. at 21 (D.D.C.Aug. 28, 2002) (Walton, J.). TheCourt also concluded that "even if details about this underlyingunlawful conduct were not set forth in the indictment, this would not begrounds for dismissal of the indictment because whether the criminallyderived proceeds `existed before the laundering transaction is a questionof proof, not a question of the adequacy of the indictment.'" Id. at 24(quoting United States v. Seward, 272 F.3d 831, 837 (7th Cir. 2001)).Thus, the Court denied the defendant's motion to dismiss counts four andfive of the indictment with the caveat that the defendant could renew hismotion at the close of the government's case-in-chief "based upon achallenge to the sufficiency of the evidence presented in support of thegovernment's position that the laundered proceeds were derived fromillegal activity." Id. at 24 n. 13.

On September 5, 2002, the jury found the defendant guilty of all fivecounts of the indictment. As to counts four and five, the jury had beeninstructed by the Court that if it found the defendant guilty of thesecounts, it "must indicate the specified criminal activity from which [it]concluded the money used in the money transaction alleged in [these]count[s] of the indictment [was] derived." Verdict Form at 2. Regarding count four, the jury concluded that the specified unlawfulactivity from which the laundered funds were obtained were part of thesame funds that formed the basis for the wire fraud offense charged incount three of the indictment — the wire transfer of $12,859.98from Crestar Bank to Florida First Bank on April 9, 1997. Similarly, thejury concluded that the specified unlawful activity in count five fromwhich the laundered funds were acquired were the same funds that formedthe basis for one of the mail fraud counts of the indictment (count one)— the mailing by Riggs Bank of a cashier's check in the amount of$23,903.43 on February 26, 1997. Thus, after receipt of the jury'sverdict, the Court instructed counsel to file briefs addressing thelegality of the defendant's money laundering convictions in light of thejury's findings regarding what constituted the specified criminalactivity that formed the basis for the convictions of the moneylaundering charges.

On September 20, 2002, the defendant filed a Supplemental Memorandum inSupport of Judgment of Acquittal ("Def.'s Mem."). In this pleading, thedefendant argues that his convictions for money laundering can notsurvive because of the jury's inability to specify a predicate offense"which is separate from and prior in time to the alleged money launderingoffense . . ." Def.'s Mem. at 1. The defendant further argues that he wasprejudiced as a result of the introduction of evidence regarding the moneylaundering charges and the denial by the Court of his request tointroduce evidence that the government had denied him access to theproperty it had seized pending the resolution of a separate forfeitureproceeding the government had instituted, thus preventing him from makingfinancial distributions to the estate's heirs. Finally, the defendantargues that the Court should have instructed the jury on the good faithand advice of counsel defenses. The government filed its Memorandum inSupport of Dismissing the Two Money Laundering Counts ("Gov.'s Mem.")also on September 20, 2002, in which it agreed that based upon the jury'sfindings, the money laundering counts were not supported by specifiedunlawful activities separate from the acts that constituted thepredicates for one of the mail and the wire fraud charges. Thegovernment, however, disagrees that the defendant suffered any prejudiceregarding the mail and wire fraud charges. The Court will address each ofthe defendant's contentions below.

II. The Money Laundering Counts

In ruling on the defendant's motion for judgment of acquittal, theCourt must "view the evidence in the light most favorable to theGovernment giving full play to the right of the jury to determinecredibility, weigh the evidence and draw justifiable inferences of fact."United States v. Treadwell, 760 F.2d 327, 333 (D.C. Cir. 1985) (citationomitted). The Court may only take the case away from the jury "when thereis no evidence upon which a reasonable mind might fairly conclude guiltbeyond a reasonable doubt." Id. (citation and internal quotation marksomitted).

The jury found the defendant guilty of two separate counts of moneylaundering. The specified unlawful activity that the jury concluded wasthe source of the funds the defendant laundered were also the same fundsthat formed the basis for the commission of two of the other counts ofthe indictment (i.e., one of the mail fraud counts and the wire fraudcount). Although the Court denied the defendant's motion to dismiss themoney laundering counts prior to the start of the trial, it warned thegovernment at that time that it would have to prove at trial that thelaundered funds were acquired independent from the funds that were thesubject of the mail and wire fraud activity as charged in those counts ofthe indictment.

The government concedes that "the specified unlawful activities [,asfound by the jury,] are not distinct from the money-launderingtransactions[, and therefore,] . . . the verdict as returned by this juryis inconsistent with the Court's ruling in [its] Memorandum Opinion [ofAugust 28, 2002]." Gov.'s Mem. at 5. And, because the jury's findings didnot identify specified unlawful activities from which funds were acquiredby the defendant that are distinct from the alleged money launderingactivities, the convictions on those two counts cannot stand. SeeSeward, 272 F.3d at 836 ("The transaction or transactions that createdthe criminally-derived proceeds must be distinct from themoney-laundering transaction because the money laundering statutescriminalize `transaction[s] in proceeds, not the transaction[s] thatcreate [] the proceeds.'" (quoting United States v. Mankarious,151 F.3d 694, 705 (7th Cir. 1998)); United States v. McGahee, 257 F.3d 520,528 (6th Cir. 2001) (reversing defendant's money laundering convictionwhere the court found that "diverting the funds were part and parcel ofthe fraud and theft, and were not a separate act completed after thecrime, as required under the money laundering statute.") (citationsomitted); United States v. Butler, 211 F.3d 826, 830 (4th Cir. 2000)(holding that to establish a money laundering offense "the laundering offunds cannot occur in the same transaction through which those fundsfirst become tainted by crime."); United States v. Christo, 129 F.3d 578,579-80 (11th Cir. 1997) (holding that the allegations in support of themoney laundering activity must include a "monetary transaction that [is]separate from and in addition to the underlying criminal activity" andreversing defendant's conviction for money laundering where "thewithdrawal of funds charged as money laundering was one and the same asthe underlying criminal activity of bank fraud and misapplication of bankfunds."). Because the jury here did not identify specific unlawfulactivities from which laundered funds were acquired that were separateand distinct from the conduct charged as mail and wire fraud, the Courtmust vacate the defendant's two money laundering convictions and enterjudgments of acquittal on those two counts of the indictment.

III. Defendant's Motion for a New Trial on the Mail and Wire Fraud Counts

Defendant contends that he is entitled to a new trial on the remainingcounts of the indictment on the grounds that he was prejudiced: (1.) bythe confusion the jury allegedly had about whether it could acquit him ofthe mail and wire fraud charges if it convicted him of money laundering;(2.) by having evidence about the money laundering charges presented tothe jury; (3.) by the government's introduction of evidence that thedefendant failed to make financial distributions to the heirs of hisaunt's estate; (4.) by the Court's denial of his request to introduceevidence that the government had seized the property the government isseeking to forfeit, which he contends prevented him from makingdistributions to the heirs of his aunt's estate; and (5.) by the Court'sfailure to instruct the jury on the good faith belief and advice ofcounsel defenses.

Pursuant to Federal Rule of Criminal Procedure 33, "the [C]ourt maygrant a new trial to the defendant if the interests of justice sorequire." In order to grant a new trial,

the evidence must preponderate heavily against the verdict, such that it would be a miscarriage of justice to let the verdict stand. . . . This power should be exercised with caution, and is invoked only in those exceptional cases in which the evidence weighs heavily against the verdict. . . . The burden of proof that a new trial is justified rests with the party seeking the new trial.

United States v. Edmonds, 765 F. Supp. 1112, 1118 (D.D.C. 1991)(citations omitted). Unlike a motion for judgment of acquittal, whenruling on a motion for a new trial "the Court need not accept theevidence in the light most favorable to the government, and [it] mayweigh the testimony and may consider the credibility of the witnesses."Id. at 1118-19 (D.D.C. 1991) (citations omitted). A motion for a newtrial should only be granted "where the . . . government's case had beenmarked by uncertainties and discrepancies." Id. (citation omitted). Withthis standard in mind, the Court will now address the defendant'scontentions.

A. Introduction of Evidence Concerning the Money Laundering Counts of the Indictment

First, the defendant argues that he sustained prejudice that entitleshim to a new trial on the mail and wire fraud charges as a result of thegovernment's introduction of evidence pertaining to the now dismissedmoney laundering counts. This allegation is without merit.

The evidence pertaining to the money laundering counts of theindictment would have been admissible regarding the mail and wire fraudcounts even if the money laundering counts had not been charged in theindictment. This conclusion is really a no-brainer, since the identicalconduct was alleged in the indictment as the predicates for one of themail fraud charges and the wire fraud charge, as well as for the moneylaundering charges. And, even if that was not the case, all of the eventsconcerning the money laundering activity were admissible to demonstratethe defendant's intent to defraud, see, e.g.,Fed.R.Evid. 404(b); UnitedStates v. Cassell, 292 F.3d 788, 795 (D.C. Cir. 2002) (holding thatevidence of other crimes, wrongs, or acts is admissible to demonstrateintent and holding that admission of defendant's prior gun possession was"relevant to show his knowledge of and intent to possess the firearmsrecovered from his bedroom[]"), which is an element the government had toestablish for both the mail and wire fraud charges.United States v. Alston, 609 F.2d 531, 536 (D.C. Cir. 1979) ("Conviction for mail or wirefraud requires proof of only two elements: (1) a scheme to defraud, and(2) use of the mails or wires for the purpose of executing thescheme."). In any event, the evidence of the defendant's guilt was socompelling that even if the evidence pertaining to the money launderingoffenses had not been introduced, the other admitted evidence of the mailand wire fraud violations was overwhelming, and therefore the defendantcannot demonstrate that he suffered any prejudice due to the admission ofthe challenged evidence. See, e.g., United States v. Caballero,277 F.3d 1235, 1245-46 (10th Cir. 2002) (holding that prosecutor'squestions regarding defendant's conduct, which defendant argued wasimpermissible character evidence, did not amount to prosecutorialmisconduct or prejudice the defendant "in light of the overwhelmingevidence of guilt produced at trial . . ."); United States v. Green,258 F.3d 683, 693-94 (7th Cir. 2001) (holding that court's admission ofevidence regarding other convictions that resulted from informant'stestimony "was harmless because of the overwhelming evidence of Green'sguilt. . . . [,noting that the informant's identification of thedefendant] was confirmed not only [by another witness's] testimony, butby three . . . agents who testified that Green confessed to that incident— testimony that Green does not challenge on appeal."). In thiscase, there was ample evidence of the defendant's use of deception to gethimself appointed as the co-representative of his aunt's estate, hismailings to banks closing the accounts of Mildred Powell; the wiring ofthe funds at his request from the closed accounts to bank accounts thedefendant opened for the deposit of the funds; and his expenditure ofthese funds for his personal and business expenses. Thus, the Courtcannot find that the defendant was prejudiced by the admission of theevidence pertaining to the money laundering charges.

B. Prejudice and Confusion of the Jury

Next, the defendant argues that "[t]he jury forms are unmistakableevidence of prejudice." Def.'s Mem. at 8. In this regard, the defendantasserts that the jury's questions that were submitted to the Court whileit was deliberating, regarding whether or not it needed to specify aparticular transaction from which funds were acquired by the defendant andthen laundered, to convict the defendant of money laundering, and theCourt's reply that it did, caused the jury to believe "that in order toconvict the defendant of money laundering, it could not acquit him of themail fraud." Defs.' Mem. at 8.

During the jury's two days of deliberations, it asked the Court thefollowing two questions:2

[1] If we find the defendant guilty of count four and the specified criminal activity was wire fraud, are we required in addition to specify on the verdict form from what bank to what bank the money was wired and the dates thereof?

[2] If we find the defendant guilty of count five and the specified criminal activity was mail fraud, are we required in addition to specify on the verdict form from what bank to what bank the money was mailed and the dates thereof.

After reading the questions to counsel and obtaining their input, theCourt responded "Yes" to both questions. The defendant argues that theCourt's response to thePGsecond question "made it impossible for the juryto logically convict Dr. Howard on Count IV and acquit on Count II andsimilarly for Counts V and III." Def.'s Mem. at 10. He further contendsthat "Count I includes substantially the same allegations as Count II andtherefore it would be impossible to acquit on Count I as well." Id. TheCourt does not find merit in either of the defendant's contentions.

First, the Court concludes that the jury was properly told to identifythe specified unlawful activity from which funds were obtained by thedefendant and then laundered if they concluded that the defendant wasguilty of the money laundering charges. To convict the defendant of moneylaundering, "the government had to prove that [the defendant] had"derived property from a specified unlawful activity and that he engagedin a monetary transaction involving that property." Seward, 272 F.3d at836. However, as discussed above, the funds used to conduct the monetarytransaction had to be derived from separate and distinct specifiedunlawful activity. Id. Therefore, it was proper to have the jury specifythe unlawful activity from which the funds were obtained, to ensure thatthe money laundering transaction was distinct from the specified unlawfulactivity. See, e.g., United States v. Taylor, 239 F.3d 994, 999 (9thCir. 2001) (holding that defendant's challenge to district court's moneylaundering instructions on the basis that the directions "did notadequately specify that the money for the transactions had to come fromspecified unlawful activity[,]" was meritless. "The district court'sinstructions were . . . adequate because they did in fact explain thatthe money for the transactions in question had to be derived fromspecified unlawful activity . . .").

Although the Fifth Circuit in United States v. Loe, 248 F.3d 449 (5thCir. 2001), rejected a claim that a unanimity instruction is requiredwhere a money laundering offense may have been committed with fundsderived from several criminal acts that can constitute the specifiedcriminal activity, the court did not say it was error to given such aninstruction. Here, however, the unanimity instruction was essential. Asalready stated, the indictment in this case identified mail and wirefraud as the specified unlawful activities for the two money launderingcharges, events that were also designated as the predicate conduct forone of the mail fraud charges and the wire fraud charge. Thus, the needfor specificity was essential to ensure that if the jury convicted thedefendant of either of the money laundering charges, that the verdict wasbased upon the defendant having laundered funds that he acquired fromcriminal activity that was separate and distinct from the launderingactivity.3

The jury's first question, rather than reflecting confusion, wasnothing more than a request for clarification about how it shouldcomplete the jury verdict form. And the second question, which relatedsolely to count four, was merely a request for further clarification withgreater specificity concerning what they needed to indicate on theverdict form as to count four. As such, the Court does not find thatthese questions are evidence of confusion on the jury's part. See UnitedStates v. Fields,689 F.2d 122, 127 (7th Cir. 1982) (rejectingdefendant's contention that the jury's question regarding defendant'sentrapment defense was evidence of the jury's confusion. "[T]he courtfinds that at best, the questions indicated a desire for a clarifyinginstruction, and not juror confusion. The jury's notes simply do notestablish that the original instructions were `so vague or ambiguous asto reasonably permit misinterpretation of the entrapment instruction.'")(quoting United States v. Johnson, 605 F.2d 1025, 1029 (7th Cir. 1979)).

Second, to guard against what the defendant is now arguing occurred,the Court, in its final instructions, advised the jury that:

Each offense, and the evidence which applies to it, should be considered separately, and you should return separate verdicts as to each count. The fact that you may find the defendant guilty on any one count of the indictment shall not control or influence your verdict with respect to any other count or counts of the indictment.

This instruction provided guidance to the jury to prevent it from doingwhat the defendant alleges occurs — deciding that it had to convictthe defendant of the mail and wire fraud charges if it convicted him ofthe money laundering offenses.

As juries are presumed to adhere to the instructions given to them bythe Court, Richardson v. Marsh, 481 U.S. 200, 206 (1987); United Statesv. Burroughs, 935 F.2d 292, 295 (D.C. Cir. 1991) (citation omitted), theCourt does not find the defendant's claim that the jury believed that itcould not acquit on one count if it convicted on another meritorious.Moreover, the logic of the defendant's position on this point is notreadily apparent because the defendant fails to clearly articulate whyhis position has merit or offer any legal authority for it. Thesedeficiencies, in the Court's view, flow from the argument's total lack ofmerit. Nothing in the jury's questions even remotely supports thedefendant's theory, and the verdict form does not support it either.Rather, it is obvious that the jury was solely focusing on what findingsit had to make in reaching verdicts on the money laundering counts. Themanufacturing of the argument the defendant is advancing from whatactually occurred is a desperate stretch of reality. See, e.g., HowardD. Jury, Inc. v. R&G Sloane Mfg. Co., 666 F.2d 1348, 1352 (10th Cir.1981) (in negligence case, court rejected plaintiff's contentions thatthe jury was confused, thus warranting a new trial, stating that"plaintiff would have us presume or surmise confusion in the minds of thejury at the time the verdicts were rendered, without any objectiveevidence thereof. . . . Under these circumstances, where plaintiffoffered nothing in support of its motion except speculation, the trialcourt did not abuse his discretion in denying the motion for a newtrial."). In any event, the logic of the entire argument is meritless andtherefore is rejected.

The reality of what occurred as can best be logically gleaned from therecord in this case is that the jury had already concluded thedefendant's guilt on the mail and wire fraud charges at issue (counts oneand three) by the time the money laundering charges were beingconsidered. For one thing, the mail and wire fraud counts appeared on theverdict form before the money laundering counts and presumably the jurywould have logically considered the defendant's guilt on those chargesfirst. Even more concrete, however, and therefore less subject tosupposition, is the wording of the jury's questions themselves. In bothquestions, the jury was not raising questions about the defendant's guiltof the mail and wire charges,as the defendant seemingly suggests.

Rather, the wording of the questions indicates that the jury hadalready concluded that the defendant was guilty of the mail and wirefraud charges and was merely requesting clarification about the degree ofspecificity it had to indicate on the verdict form as to what constitutedthe specified criminal activity if it also found the defendant guilty ofthe money laundering charges. Accordingly, the Court rejects thedefendant's theory about how the jury's two questions should beconstrued.

C. The Government's Introduction of Evidence that Defendant Failed to Make Financial Distributions to the Heirs of the Estate

The defendant contends that he was prejudiced because the "jury wasinvited by the government to use Dr. Howard's purported failure to complywith [a duty to make financial distributions to the heirs of his aunt'sestate] as an element of, and proof of, the wire fraud and mail fraudcounts of the indictment." Def.'s Mem. at 8. As legal grounds for hisposition, defendant relies on United States v. Wolf, 820 F.2d 1499 (9thCir. 1987) for the proposition that his convictions for mail and wirefraud should be vacated. Def.s' Mem. at 8.

In Wolf, the Ninth Circuit concluded that evidence and argumentspresented by the government regarding the defendant's "possible violationsof [a] civil banking regulation impermissibly tainted his trial on . . ."criminal charges lodged against Wolf for misapplying bank funds and otherrelated offenses. Id. at 1504. Specifically, the court condemned thegovernment's use of expert testimony to "establish[] that Regulation O[, which required the majority of a board of directors to approve loansmade to bank officers or executives,] imposed a duty on Wolf to informthe bank's directors that he had an interest in the loans for which [hisfellow shareholders in a company that ultimately received the loan funds]. . . were applying." Id. at 1505. The court concluded that Regulation Owas improperly used by the government to "supply a crucial element of themisapplication and false entry charges." Id. This misuse of a purelycivil regulation, the court held, "created a serious risk that the jurywould find Wolf guilty of criminal [offenses] . . . because he failed tocomply with Regulation O." Id.

Defendant contends that this Court violated the proscription of Wolfagainst the government being permitted to use a civil obligation as thebasis for finding criminal liability by impermissibly permitting thegovernment to introduce evidence and argue his criminal culpability formail and wire fraud due to his failure to make distributions of theestate's assets to the heirs. Wolf, however, is distinguishable on thispoint.

To convict the defendant of mail and wire fraud, the government had tosubmit evidence to the jury that the defendant had the specific intent todefraud and utilized the mails or electronic means to accomplish thefraudulent objective. See Alston, 609 F.2d at 536. The defendantcorrectly notes that the Court permitted the government to introducetestimony that Dr. Howard never made any distributions of the estate'sfunds to the heirs. However, unlike Wolf, this evidence was not used bythe government to establish an essential element of its case. This isbecause by the time this evidence was introduced, the government hadalready established that Dr. Howard caused the mailings of the funds fromMs. Powell's accounts to his own accounts, and had those fundstransferred electronically to accounts he had established. It is alsonoteworthy that the defendant's initial petition to be appointed personalrepresentative of Ms. Powell's estate was rejected because he was not "adirect bloodrelative of his aunt." Indictment ¶ 5, at 2. He thereaftersuccessfully filed a second petition on December 30, 1996, with theProbate Division of the Superior Court of the District of Columbia, whichresulted in his appointment as co-personal representative of the estatealong with his mother, Lillian Powell Howard. Id. ¶ 8, at 2-3. Thegovernment established, through the defendant's own testimony, that hesigned his mother's signature on the second petition, misrepresented hishome address, and also falsely represented that his mother resided at aresidence in Florida that belonged to defendant, although she actuallyresided in Tennessee. See Transcript of Proceedings dated August 29,2002, at 129. Thus, the fact that Dr. Howard did not make a distributionto the heirs was just further evidence of the fact that he obtained theposition as co-personal representative of the estate with the intent todefraud Mildred Powell's heirs and the Probate Court. The failure to makedistributions therefore was not, as was the evidence and argument inWolf, utilized by the government to establish an essential element of themail and wire fraud charges.

This case is akin to United States v. Stefan, 784 F.2d 1093 (11th Cir.1986), cert. denied, 479 U.S. 855 (1986), which the court in Wolfanalyzed. In Stefan, the Eleventh Circuit, citing United States v.Christo, 614 F.2d 486 (5th Cir. 1980), upon which Wolf relied, held thatthe introduction in a criminal trial of evidence about civil bankingstatutory violations allegedly committed by a defendant is not forbiddenwhen the evidence is introduced for other legitimate purposes. Stefan,784 F.2d at 1098. Therefore, the Stefan court upheld the district court'sadmission of evidence regarding the defendant's civil banking violationsin his trial for misapplication of bank funds and other charges because"evidence of [the] civil violations [was] introduced for purposes otherthan to show criminal misapplication and the evidence [was] not presentedin such a way that the jury's attention [was] focused on the civilviolations rather than the criminal ones . . ." Id. at 1099. The Stefancourt noted that the "district court made it clear that the jury did nothave to infer criminal intent to misapply funds because of [the civilviolations]. . . . [In addition] the court instructed the jury that itcould consider this evidence as it would any other evidence indetermining whether the defendant had the required intent to misapplyfunds." Id. at 1100. In the present case, the evidence the governmentintroduced was legitimately relevant as corroborative evidence on thequestion of whether the defendant acted with intent to defraud when,through fraudulent means, he put himself in the position to acquirecontrol over the estate assets of Mildred Powell and then had the estateassets transferred to accounts he had opened. Therefore, the proscriptionof Christo and Wolf was not violated by the introduction of evidenceabout the defendant's failure to make distributions to the heirs of hisaunt's estate.

D. The Court's Refusal to Permit the Defendant to Introduce Evidence Regarding the Purported Reason He Could Not Make Distributions to the Heirs

The defendant also argues that the Court erred in not permitting him torebut the government's evidence that he did not make distributions to theheirs by showing that he was unable to do so because "the estate's fundswere tied up by the government itself[]" in forfeiture proceedings.Def.'s Mem. at 7. In denying the defendant's request to introduce thisevidence, the Court relied upon United States v. Ross, 206 F.3d 896, 899(9th Cir. 2000),where the Ninth Circuit upheld a district court's grantof the government's motion in limine "to exclude any evidence ofdefendant's intent to pay back proceeds embezzled from the UnitedStates." Id. at 898 (internal quotation marks omitted). In concludingthat "an intent to repay is not a defense to misappropriation of postalfunds . . ." the Ninth Circuit noted that "to date, [the court] hasrefused to extend the repayment defense beyond the unique realm ofcheck-kiting cases." Id. at 899. Defendant argues that Ross isdistinguishable because in that case

Ross's embezzlement was complete when she took the funds without recording the fact that she had issued them to herself . . . If Dr. Howard, on the other hand, had distributed the money in the Florida account to all of Mildred Powell's heirs on the day after it was received in Florida, then there would have been no criminal activity. That is, it was only the transfer without the subsequent intent to have a distribution that was unlawful.

Def.'s Mem. at 7.

Defendant's argument misses the mark completely. This is because it wasnot just his failure to distribute the estate's assets that establishedhis intent to defraud. Rather, the evidence demonstrated that his intentto defraud occurred from the moment he signed his mother's signature andmisrepresented her and his addresses to the Probate Division so that hewould be appointed as the co-personal representative of his aunt'sestate. He thereafter utilized the mails and wire facilities to havemonies that were in various estate accounts, which he had obtainedcontrol over through fraud, sent to bank accounts he had established inFlorida. Once the defendant fraudulently obtained control of the estatefunds, had the funds transferred and deposited in accounts from which hecould make withdrawals, and then started to withdraw the funds forpersonal and business purposes, the necessary elements of both mail andwire fraud were totally satisfied. See, e.g., Seward, 272 F.3d at 835-36(upholding defendant's conviction for mail fraud and money launderingwhere the indictment charged the defendant with a broad, fraudulentscheme that spanned almost two years and "covered both the efforts towithdraw money from [the decedent's] accounts and the effort to grab theentire estate by obtaining the probate court's acceptance of the forgedwill."). In other words, the wire and mail fraud offenses were "complete"when the transfer of the funds to the Florida account was accomplishedand the intent to defraud was clearly demonstrated by the defendant'sacts that were committed thereafter.

This situation is similar to the one the court faced in United Statesv. Scott, 701 F.2d 1340, 1342 (11th Cir. 1983). In Scott, the defendanthad been convicted of making false statements to banks and using themails in furtherance of his scheme to obtain money or property by meansof false representations. Id. The conduct for which Scott was convictedinvolved the submission of false credit applications to banks and otherlenders. During Scott's trial, "the court permitted the Government tointroduce extrinsic evidence of credit applications containing falseinformation submitted by the [defendant] to institutions other than thosecharged in the indictment[,]" id. at 1346, to establish the defendant'scriminal intent. The defendant sought to rebut this evidence anddemonstrate his lack of intent with evidence that for each account heopened, he had made payments to the account and the accounts were notdelinquent. Id. The trial court excluded evidence of the payments,although it permitted limited testimony regarding the fact that theaccountswere current. In upholding the trial court's exclusion of the repayment evidence, theEleventh Circuit held that the matter of repayment was irrelevant towhether the defendant

knowingly falsified the information on the credit applications. [Defendant] openly admits he falsified this information. It was his intentional falsification on the documents which established the requisite intent of the statute. Whether the accounts were current, or whether he repaid the accounts is immaterial as to whether he intentionally falsified the documents.

Id. at 1347 (emphasis in original and emphasis added).

In this case, the defendant's desire to sell the property he hadacquired with his aunt's estate funds so he could make distributions toher heirs would have demonstrated nothing more than a last minute,desperate attempt to extract his hand from a cookie jar whose treasureshe had already totally depleted and consumed before his fraudulent schemehad been detected. It was therefore irrelevant to the issue of whetherthe defendant intended to defraud the probate court and the heirs of theestate for defendant's personal benefit. See id. at 1348 ("If, however,evidence of repayment cannot shed light on the defendant's intent to dothe forbidden act . . . then evidence of repayment is irrelevant and itwill only mislead and confuse a jury."). Accordingly, the Court againconcludes that it was improper for the defendant to present evidence tothe jury of his after detection offer to make amends for his use of theestate funds as a defense to the mail and wire fraud charges.4

E. The Court's Failure to Instruct the Jury on the Defenses of Good Faith and Action on Advice of Counsel

Finally, the defendant argues that the "Court's failure to include thedefendant's proposed jury instructions NN and OO (the good faithdefense-explained; and action on advice of counsel-explained) deprivedthe defendant of the [right to have the jury instructed by] the Court[]. . . on these defenses as opposed to [merely] hearing defense counsel'sargument[s], especially when the jury had been instructed that whatdefense counsel said was notevidence." Def.'s Mem. at 10. Both argumentsare rejected by the Court.5

(1) Good Faith Instruction

"Good faith is a complete defense to mail [and wire] fraud." SouthAtlantic Ltd. Partnership v. Riese, 284 F.3d 518, 531 (4th Cir. 2002);United States v. Dockray, 943 F.2d 152 (1st Cir. 1991); United States v.Hopkins, 716 F.2d 739, 749 (10th Cir. 1982). Although the Court did notspecifically instruct the jury on the "good faith defense[,]" it didspecifically instruct the jury regarding the elements of the mail and wirefraud offenses and included a separate instruction that defined "intentto defraud." That instruction read:

To act with an `intent to defraud' means to act knowingly and with the intention or purpose to deceive or to cheat. An intent to defraud is accompanied by a desire to bring about some gain or benefit to oneself, or some other person, or by a desire or a purpose to cause some loss to some person.

As this instruction accurately recited the level of intent the governmenthad to prove to establish the mail and wire fraud charges, a separateinstruction regarding the "good faith defense" was unnecessary. UnitedStates v. Storm, 36 F.3d 1289, 1294-95 (5th Cir. 1994) (holding thattrial court did not abuse its discretion in refusing to submit the goodfaith defense instruction "because the defense of good faith wassubstantially covered by the charge given to the jury. The instructionson the terms `knowingly' and `willfully' follow those approved in thiscircuit."); Dockray, 943 F.2d at 155 (holding that defendant was notentitled to requested instruction on good faith defense where the courtproperly instructed the jury on the element of intent to defraud.

"Although good faith is an absolute defense to a charge of mail or wirefraud, the court need only convey the substance of the theory to thejury. . . . Thus, where the court properly instructs the jury on theelement of intent to defraud — essentially the opposite of goodfaith — a separate instruction on good faith is not required.")(citations omitted); United States v. McGuire, 744 F.2d 1197, 1201-02(6th Cir. 1984) (holding that trial court did not commit reversible errorby failing to give defendants' good faith instruction. "The instructionswith regard to specific intent adequately informed the jury of thedefendants' theory of the case, and properly placed the burden of proofof intent on the government."); Hopkins, 716 F.2d at 751-52 (holding thatdistrict court's instruction to jury on definition of acting with theintent to defraud but which did not specifically instruct jury on goodfaith defense did not warrant reversal of defendant's conviction becausethe jury was given the necessary legal concepts and . . . the chargeadequately advised the jury about defendant's theory of defense."). Butsee United States v. Casperson, 773 F.2d 216, 222 (8th Cir. 1985)(holding trial court's refusal to give good faith instruction wasreversible error where "on reviewing thecharge as a whole, [the court ofappeals could not] agree that the instructions directed the jury'sattention to the defense of good faith with sufficient specificity toavoid error. . . . The evidence of guilt was not overwhelming . . . [andin these] circumstances we cannot say that the trial court's failure todraw the jury's attention to the appellants' theory of defense washarmless beyond a reasonable doubt."); United States v. Goss,650 F.2d 1336, 1345 (5th Cir. 1981) (holding trial court committedreversible error in failing to instruct the jury on the good faithdefense. "Charging the jury that a finding of specific intent to defraudis required for conviction, while it may generally constitute thenegative instruction, i.e., that, if the defendants acted in good faith,they could not have had the specific intent to defraud required forconviction, does not direct the jury's attention to the defense of goodfaith with sufficient specificity to avoid reversible error.").6 Thus,assuming arguendo that the defendant was entitled to the good faithdefense instruction, see United States v. Scherer, 653 F.2d 334, 337 (8thCir. 1981), cert. denied, 454 U.S. 1034 (1981) (good faith instruction isonly required where defendant introduces evidence sufficient to warrantit), the Court's instruction on what the government had to prove toestablish the defendant's intent to defraud adequately "convey[ed] thesubstance of the [good faith] theory to the jury." Dockray, 943 F.2d at155.

(2) Advice of Counsel Instruction

The defendant also claims that the Court erred in failing to give anadvice of counsel instruction to the jury. "A defendant is entitled to anadvice-of-counsel instruction if he introduces evidence showing (1) hemade full disclosure of all material facts to his attorney beforereceiving the advice at issue; and (2) he relied in good faith on thecounsel's advice that his course of conduct was legal." United States v.Defries, 129 F.3d 1293, 1308 (D.C. Cir. 1997) (citation omitted). TheCourt "is required to give this instruction if there is any foundation inthe evidence sufficient to bring the issue into the case, even if thatevidence is weak, insufficient, inconsistent, or of doubtfulcredibility." Id. (citations and internal quotation marks omitted).

"A defendant in a criminal case is entitled to adequate jury instructions onhis theory of defense, provided that there is evidence to reasonablysupport such a theory." Hopkins, 716 F.2d at 749. A review of thedefendant's testimony in this case reveals that he was not entitled to anadvice of counsel instruction. Although the defendant testified that heconsulted attorneys regarding several issues concerning his aunt'sestate,7 at no time did he testifythat he informed his attorneysthat he signed his mother's signature on the petition he submitted to theprobate court to be appointed as a personal representative of the estateor that he misrepresented his mother's and his addresses on thepetition, facts that were material to whether the defendant properlyacquired legal control of the estate. See United States v. Condon,132 F.3d 653, 656-57 (11th Cir. 1998) (affirming district court's denialof defendant's request for an advice of counsel jury instruction becausehe failed to inform his attorney that he had never made the requisitedown payment for the small business loan he secured which "went to theheart of the misrepresentations [defendant] made to the [Small BusinessAdministration]."); United States v. Lindo, 18 F.3d 353, 357 (11th Cir.1994) (affirming district court's denial of defendant's request for agood faith reliance on counsel instruction where, "[a]t best, Lindo ha[d]shown only that he ha[d] in the past relied on [his counsel's] adviceconcerning stock sales. No evidence establishe[d], however, that Lindoprovided all of the pertinent facts regarding the stock sales at issue. . . to [his counsel] before [his counsel], according to Lindo, directedthe issuance of the opinion letters that serve[d] as the basis forLindo's advice of counsel theory."); United States v. Cheek, 3 F.3d 1057,1062 (7th Cir. 1993) (affirming district court's denial of defendant'srequest for a jury instruction on advice of counsel defense in taxevasion case where "[n]owhere [did] Mr. Cheek contend either that he madea full and accurate report as to his tax status to any attorney or thathe `acted strictly in accordance with the advice of his attorney.'")(citations omitted).8 Because thedefendant here did not providetestimony that would support an advice of counsel instruction, he was notentitled to such an instruction.

IV. Conclusion

For all of the reasons set forth above, the defendant's motion forjudgment of acquittal on the money laundering charges is granted and themotion for a new trial on the remaining counts of the indictment isdenied.

An Order consistent with the Court's ruling accompanies this MemorandumOpinion.



In accordance with the Memorandum Opinion that accompanies this Order,it is hereby

ORDERED that Defendant's Supplemental Memorandum for Judgment ofAcquittal is granted in part, and denied in part. It is further

ORDERED that judgments of acquittal shall be entered on counts four andfive of the indictment. It is further

ORDERED that defendant's request for a new trial of the remainingcounts of the indictment is denied.


1. The facts that are the subject of the indictment in this matterwere thoroughly discussed by the Court in its Memorandum Opinion datedAugust 28, 2002, in which it denied the defendant's motion to dismisscounts four and five of the indictment. Therefore, the Court will notreiterate in detail the facts that precipitated the trial of thismatter.

2. Both questions were submitted by the jury to the Court on September5, 2002. The time of the first question was 2:55 p.m. and the time of thesecond question was 2:56 p.m. The Court's recollection is that thequestions were submitted to the Court at the same time.

3. The money laundering offense charged in count five allegedly occurredon February 26, 1997. The indictment alleged and the government presentedproof during the trial of the defendant's illegal acquisition of funds fromhis aunt's estate prior to that date. See, e.g., Indictment ¶¶ 15, 21, 22,and 28. The same is true for the money laundering offense charged in countfour, which alleges that this offense was committed on April 9, 1997. See,e.g., Indictment ¶¶ 15, 21, 22, and 28.

4. The defendant also argues that the evidence relied upon by thegovernment here to establish that he "knowingly used the proceeds ofunlawful activity in a separate transaction[,]" to establish the moneylaundering charges, Def.'s Mem. at 6-7, — the opening of the estateaccounts in Florida, the wiring of the estate assets into those accountsand the failure to pay the heirs from the estate accounts — was"not sufficient to show [his] guilty knowledge that [the estate] proceedshad been previously obtained illegally." Id. Because these acts were not"per se criminal violations[,]" id. at 7, the defendant attempts todistinguish that part of the Wolf opinion that condoned the districtcourt's refusal to admit evidence about the ability of borrowers to repaybank loans Wolf arranged based upon misrepresentations he made about whothe borrowers were and the purpose of the loans. Wolf, 820 F.2d at 1503.When considered in a vacuum, the position seems to have merit. However,the defendant conveniently neglects to mention how he gained control overthe funds at issue — that is, by fraudulently forging his mother'ssignature, making false representations to the Probate Division of theSuperior Court, and ignoring an order of Superior Court Judge Cheryl M.Long that suspended his fiduciary duties regarding his aunt's estate,events that occurred before he sought to sell the property so that hecould pay the heirs. With these facts added to the mix, the defendant'sattempt to distinguish Wolf rings hollow. In any event, the Court hasgranted the defendant's motion to set aside the money launderingconvictions, and therefore his claim about the relevance of the evidenceconcerning his inability to sell the property he acquired with the estatefunds so he could pay the heirs as a defense against the money launderingcharges is now moot.

5. The Court notes that its practice is to require counsel to submitsupport for any instruction that he seeks to have presented to the jury.As counsel in this matter did not submit such support to the Court, theCourt must conclude that no argument regarding these instructions werespecifically made in Court. And therefore, the Court is doubtful thatcounsel's challenge at this point is sufficient. See United States v.Cheek, 3 F.3d 1057, 1061 (7th Cir. 1993) ("[A] defendant must object, onthe record, to the judge's refusal to tender the defendant'sinstructions, and must clearly state the reasons for his or herobjections. . . . Merely submitting alternative instructions is notsufficient.") (internal quotation marks and citations omitted).Nevertheless, the Court will address the merits of the defendant'schallenge to the Court's failure to submit the instructions to thejury.

6. Subsequent cases from the Fifth Circuit have abrogated the holdingof Goss. See, e.g., United States v.Rochester, 898 F.2d 971, 978 (5thCir. 1990) ("Goss, however, must be read in light of later cases whichindicate that the failure to instruct on good faith is not fatal when thejury is given a detailed instruction on specific intent and the defendanthas the opportunity to argue good faith to the jury.") (citationomitted); United States v. Rubio, 834 F.2d 442, 447 (5th Cir. 1987)(noting that Goss' "per se approach has been rejected by later cases,which have held that it is necessary to look beyond the four corners ofthe charge to determine if a defendant's ability to present a defense hasbeen impaired."); United States v. Hunt, 794 F.2d 1095, 1098 (5th Cir.1986) (holding that the defendant was not entitled to a specific goodfaith instruction where the trial court "gave a detailed instruction onthe prerequisite of specific intent" and noting that the defendant'sreliance on Goss and similar cases was "unavailing . . . because latercaselaw has effectively by-passed these decisions.").

7. For example, the defendant testified that he consulted an attorneyregarding saving bonds he recovered in the names of two other individualswho were designated as the payees, and was told that the bonds "belongedto the estate and not to the individuals whose name[s] w[ere] on thebonds[]" because they were in his deceased aunt's possession. Transcriptof Proceedings dated August 29, 2002, at 96. Similarly, the defendanttestified that he was advised by one of his attorneys that he could begiven gifts by his aunt, id. at 99; that he had the right to bereimbursed from the estate's funds for any bills he incurred as arepresentative of the estate, id. at 101; and that he did not have toattend a hearing when his removal as a personal representative of theestate would be addressed. Id. at 110. Noteworthy also, is the fact thatthe defendant testified that he did not remember making any "specificinquiries" of his attorney regarding what are the legal consequences whena person dies without a will. Id. at 120.

8. The Cheek court also noted that because the trial court'sinstruction regarding the tax offenses, which were specific intentcrimes, informed the jury that it had to find that the defendant actedknowingly and willfully, the jury was "fairly and accurately" instructedon the defendant's advice of counsel defense. 3 F.3d at 1063. In otherwords, the Cheek court concluded that the instructions provided to thejury on "willfulness encompassed the defendant's theory of good faithreliance on counsel's advice, thus obviating the need for an additionalinstruction." Id.

The same is true here. This is because the jury was told that one ofthe elements of the mail and wire fraud offenses is that the defendantacted with "the intent to defraud." The jury was also instructed that"intent to defraud" means to act "knowingly and with the intention orpurpose to deceive or cheat. An intent to defraud is accompanied by adesire to bring about some gain or benefit to oneself . . . or by adesire or a purpose to cause some loss to some person." Thus, had thejury accepted the defendant's explanation about why he did or did not docertain acts based upon advice he allegedly received from his attorneys,it could have concluded from the Court's instructions that proof of theelement of intent to defraud, which was necessary to convict thedefendant of both mail and wire fraud, was lacking. This is essentiallywhat the jury would have been told had the "[a]ction on the [a]dvice of[c]ounsel" instruction been submitted to the jury. See 1A Kevin F.O'Malley et al., Federal Jury Practice and Instructions, § 19.08 (5thed. 2000), which was the instruction requested by the defendant. Thus,the defendant received the functional equivalent of the advise of counselinstruction, even though he was not legally entitled to it.

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