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United States v. Flores

July 21, 2006


Appeal from the United States District Court for the District of New Jersey. (D.C. Criminal Action No. 04-cr-00021-1) District Judge: Honorable Ann E. Thompson.

The opinion of the court was delivered by: Ambro, Circuit Judge


Argued March 7, 2006

Before: RENDELL and AMBRO, Circuit Judges, SHAPIRO,*fn1 District Judge


Luis Flores was convicted by a jury of one count of conspiracy to commit money laundering in violation of 18 U.S.C. § 1956, three counts of money laundering in violation of 18 U.S.C. § 1957, and one count of conspiracy to structure currency transactions in violation of 18 U.S.C. § 371. The United States District Court for the District of New Jersey sentenced Flores to a 32-month term of imprisonment. He timely appeals and, for the reasons provided below, we affirm.*fn2

I. Factual and Procedural Background

Flores is an attorney who, after graduating from Fordham Law School, opened his own solo practice in the Queens Borough of New York City. In 1998, he was visited in his office by German Osvaldo Altamirano-Lean ("Altamirano"). Altamirano presented himself as an Ecuadorian businessman eager to establish his flower, fruit, and seafood import/export business in the United States. According to Flores, a naturalized American citizen and native of Chile, he was persuaded that Altamirano was who he purported to be. Flores had recently finished work on a matter for the Republic of Argentina, and was interested in developing a practice assisting South American businessmen.

Over the next several years, Flores opened several corporations for Altamirano, ultimately naming himself as the nominal president of those companies. He also established several business checking accounts for each of the corporations at different banks, signed myriad blank checks drawn on those accounts, and authorized numerous wire-transfers from the accounts to various foreign and domestic recipients. Ultimately, Altamirano, Flores and others were indicted for conspiracy to commit money laundering and other offenses. Altamirano cooperated with the Government and testified at Flores' trial. The Government's theory of the case was that Flores was "willfully blind" to Altamirano's unlawful activities. The defense, on the other hand, argued that Altamirano had deceived Flores into believing that he was a legitimate businessman and that Flores was Altamirano's unknowing victim and not his co-conspirator.

The following evidence was presented at trial. Flores assisted Altamirano in incorporating nine companies between December 1998 and June 1999, and opening bank accounts on behalf of those corporations. In January 1999, Flores attempted to obtain tax identification numbers for three corporations using first one and then another social security number provided by Altamirano, but in each instance Flores was informed that the numbers were false. He warned Altamirano about the unlawfulness of using invalid social security numbers, and offered to take steps to obtain valid numbers. Instead, Altimirano removed the corporate books from Flores and gave them to co-conspirator Victoria Hernandez. Altamirano paid Hernandez $2,000 per week to open corporations and manage his relationships with the banks. In April 1999, Altamirano learned that Hernandez had been stealing from him. Altamirano thus decided to return the books to Flores, who agreed to open and oversee bank accounts for the corporations in exchange for the $2,000 weekly salary that Hernandez had received. Flores was paid the $2,000 each week in cash.

In early May 1999, Flores arranged for the incorporation of three new companies and opened an account for each of them at four banks: Republic National Bank, European American Bank, Chase Manhattan Bank, and Citibank. As noted previously, Flores held himself out as the president of these corporations, and was the only person authorized to sign checks, transfer money, and act on behalf of the entities. For each checkbook, Flores signed about 25 to 30 blank checks; Altamirano retained two or three of these checks to make transfers from one account to another, and sent the remaining checks to Columbia. As soon as the accounts were opened, multiple cash deposits were made and money began to be wired in and out of the accounts and between accounts. Individual deposits were always less than $10,000, but on any given day the aggregate amount deposited in any account could exceed $10,000.

Just weeks after he had opened the new accounts, Flores received a letter from Republic National Bank (1) explaining what "structured" transactions are and why they are illegal, and (2) informing him that "when an account receives a large incoming wire [transfer of money] and immediately sends an outgoing wire or wires for approximately the same amount, without apparent commercial justification, it mirrors the activity of an account opened by money launderers." Flores and Altamirano were asked to attend an in-person meeting at Republic National Bank in late May 1999, at which they were expected to supply documentation of the source of the funds in the bank accounts. When they failed to do so, a bank employee requested they speak with the bank manager, Thomas Grippa. In response to Grippa's questions concerning the number of accounts and seemingly "structured" cash transactions, Altamirano stated that he maintained multiple accounts to create the appearance for his Ecuadorian suppliers that he had many profitable businesses and to get certain credits from the government of Ecuador. He also explained that he was paid in cash by a customer at the Hunts Point produce market and that he had lost a lot of money after a hurricane delayed his ship and a large shipment of food spoiled. Grippa testified that he did not accept any of these excuses. Ultimately, both Republic National Bank and European American Bank closed the accounts. Flores told Altamirano that he felt more comfortable working with Citibank and Chase, where he had personal contacts.

Flores' accountant, Israel Rivera, who was hired to perform work for Altamirano in April 1999 due to the increasing difficulty of balancing Altamirano's books, testified that he asked Flores for copies of invoices to document the source of funds in the accounts. He also reported that he had voiced concern to Flores about large payments to European companies that bore no apparent relationship to the import/export of fruit, flowers, and fish from Ecuador. According to Rivera, he received neither an explanation nor copies of invoices in response to his requests.

Flores remained the sole signor and receiver of the companies' multiple account statements for several additional months, during which approximately $1,288,085 passed through the companies' remaining bank accounts. It is undisputed that the cash was transferred via checks and wire transfers signed by Flores to recipients in Columbian-operated brokerage houses on the Black Market Peso Exchange. As a result of these activities, the Government charged Flores with conspiracy to launder money, money laundering, and conspiracy to structure currency transactions. A jury convicted Flores on all counts. Before the jury was discharged, the parties entered into a stipulation limiting the issues presented for the District Court's determination at sentencing. Moreover, Flores filed a motion for acquittal and/or a new trial, which was denied. In January 2005 the District Court sentenced Flores to a 32-month term of imprisonment. This appeal followed.

II. Merits

A. Was the evidence produced by the Government at trial sufficient to prove that Flores was willfully blind to the money laundering scheme?

We review the grant or denial of a motion for judgment of acquittal de novo, applying the same standard as the District Court. United States v. Brodie, 403 F.3d 123, 133 (3d Cir. 2005). We must "sustain the verdict if there is substantial evidence, viewed in the light most favorable to the government, to uphold the jury's decision." United States v. Gambone, 314 F.3d 163, 169-70 (3d Cir. 2003). As we have made clear, a court "must be ever vigilant in the context of Fed. R. Crim. P. 29 not to usurp the role of the jury by weighing credibility and assigning weight to the evidence, or by substituting its judgment for that of the jury." Brodie, 403 F.3d at 133; see also United States v. Jannotti, 673 F.2d 578, 581 (3d Cir. 1982) (en banc) (trial court usurped jury function by deciding contested issues of fact).

Flores argues that the Government failed to prove beyond a reasonable doubt that he knew or was willfully blind to the fact that the money laundered by Altamirano either "represent[ed] the proceeds of some form of illegal activity," 18 U.S.C. § 1956(a)(1), or was "criminally derived property," 18 U.S.C. § 1957(a). According to Flores, "[t]he only form of unlawful activity identified at trial was drug trafficking. Yet the evidence the Government presented was wholly insufficient to establish [his] knowledge of, or willful blindness to, the fact that the funds originated in drug trafficking or any other crime."

To prove conspiracy to commit money laundering, the Government was required to show, inter alia, that Flores consorted with others in a money laundering scheme, knowing that the property involved in a financial transaction represent[ed] the proceeds of some form of unlawful activity [and] conduct[ed] or attempt[ed] to conduct such a financial transaction which in fact involves the proceeds of specified unlawful activity.

18 U.S.C. § 1956(a)(1). It is undisputed that the financial transactions Flores conducted on behalf of Altamirano "in fact involve[d] the proceeds of specified unlawful activity," to wit, narcotics trafficking. Thus, the only question is whether the Government produced evidence that Flores knew of or was willfully blind to the fact that the funds originated in some form of unlawful activity,sufficient to obtain a conviction under § 1956(h). See 18 U.S.C. § 1956(c)(1) (stating that it is sufficient if "the person knew the property involved in the transaction represented proceeds from some form, though not necessarily which form, of activity that constitutes a felony under State, Federal, or foreign law") (emphasis added). ...

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