United States v. Omoruyi ( 2001 )

Opinions of the United
2001 Decisions States Court of Appeals
for the Third Circuit
8-7-2001
United States v. Omoruyi
Precedential or Non-Precedential:
Docket 00-4330
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Filed August 7, 2001
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 00-4330
UNITED STATES OF AMERICA
v.
AUSTIN O. OMORUYI,
a/k/a
Charles Oloro
a/k/a
Bobby Pierce
Austin O. Omoruyi,
Appellant
On Appeal from the United States District Court
for the Middle District of Pennsylvania
(Criminal No. 00-00103-1)
District Judge: Honorable Sylvia H. Rambo
Argued July 11, 2001
BEFORE: SLOVITER, ALITO, and GREENBERG,
Circuit Judges
(Filed: August 7, 2001)
James V. Wade
Federal Public Defender
Thomas A. Thornton (argued)
Assistant Federal Public Defender
100 Chestnut Street, Suite 306
Harrisburg, PA 17101
Attorneys for Appellant
David M. Barasch
United States Attorney
Kim Douglas Daniel
Assistant United States Attorney
Theodore B. Smith (argued)
Assistant United States Attorney
P.O. Box 11754
Harrisburg, PA 17108
Attorneys for Appellee
OPINION OF THE COURT
GREENBERG, Circuit Judge.
This matter comes on before this court on Austin O.
Omoruyi's appeal from a final judgment of conviction and
sentence entered on December 12, 2000, on a 14-count
indictment charging him with mail fraud affecting a
financial institution and money laundering. Omoruyi pled
guilty to the mail fraud counts and does not challenge his
conviction or sentence on those counts. Rather, he limits
his challenge to his conviction and sentence for money
laundering, arguing that the evidence was insufficient to
establish that he had committed that crime or,
alternatively, that the district court erred by applying the
money laundering rather than the fraud sentencing
guidelines in calculating his sentence. Because we find that
neither of Omoruyi's contentions has merit, we will affirm
his conviction and sentence in all respects.
I. BACKGROUND
In February 1999, a person not known to the authorities
stole seven blank "convenience checks" attached to the
bottom of First USA credit card statements from the mail in
Texas. Later, in April 1999, a similarly unknown person
stole three blank American Express convenience checks
from the mail in New York.
In approximately March and April 1999, Omoruyi opened
three savings accounts at banks in the Middle District of
2
Pennsylvania in the names of "Charles Oloro" or "Robert
Pierce." Thereafter, all ten of the stolen checks were made
payable to Pierce or Oloro in amounts varying between
$5,100 and $9,890, and deposited in the savings accounts,
nine via the mail and the tenth at a teller's window.1 Later,
on May 6, 1999, a counterfeit commercial check drawn
against a law firm's account at a New York City bank was
mailed to one of the banks for deposit, but the bank never
credited the account for the proceeds of the check because
it was suspicious of the transaction.
After the banks credited the accounts with the deposits,
Omoruyi began withdrawing funds from the accounts via
automatic teller machine ("ATM") and teller window
withdrawals.2 Most of the ATM withdrawals took place in
New York and New Jersey, while most of the teller window
withdrawals took place in Pennsylvania.
Ultimately, postal inspectors determined that Omoruyi
was "Robert Pierce" and "Charles Oloro." Accordingly, they
established a surveillance on a Brooklyn mail drop Omoruyi
had opened. When Omoruyi arrived at the mail drop on
June 1, 1999, the inspectors arrested him.
Following Omoruyi's arrest, the government first held him
for prosecution in the United States District Court for the
Southern District of New York on the charge of making his
third illegal entry into the United States. On February 2,
2000, based on a conviction predicated on his plea of
guilty, that court sentenced him to 51 months
incarceration. Meanwhile, on July 21, 1999, postal
inspectors filed a complaint in the Middle District of
Pennsylvania charging Omoruyi with mail fraud. On March
29, 2000, a grand jury returned a 14-count indictment,
charging Omoruyi with six counts of mail fraud affecting a
financial institution and eight counts of money laundering.
The six counts of mail fraud stemmed from the mailing of
_________________________________________________________________
1. The Government states the deposits totaled $77,626, while Omoruyi
states the total deposits were $80,424. The discrepancy is not material
to our disposition of this case.
2. Omoruyi admits he withdrew $33,900 from these accounts, while the
Government contends he withdrew almost $70,000. The parties do not
suggest that the discrepancy is material here.
3
the counterfeit check as well as five of the ten checks to
banks in the Harrisburg area. The money laundering
counts were based on eight teller window withdrawals by
Omoruyi, utilizing false identification, at Harrisburg-area
banks.
On June 8, 2000, Omoruyi pled guilty to the mail fraud
counts and submitted to a bench trial on the money
laundering counts. The trial was premised almost entirely
upon stipulated testimony and exhibits establishing that
Omoruyi "opened [three] savings accounts and withdrew
funds using the false names under which the savings
accounts were established." Appellant's Br. at 6. After the
court took the matter under advisement, on June 19, 2000,
it found Omoruyi guilty on all eight money laundering
counts.
On December 11, 2000, the court sentenced Omoruyi to
63 months incarceration on each mail fraud and money
laundering count followed by three years of supervised
release on each of these counts, and required him to pay
$1,400 in special assessments and restitution in the
amount of $31,209. The court ordered that the sentences
run concurrently with each other as well as concurrently
with Omoruyi's 51-month sentence imposed in the
Southern District of New York. Thereafter, Omoruyi timely
appealed to this court.
II. DISCUSSION
The district court had original jurisdiction over offenses
against the United States pursuant to 18 U.S.C.S 3231. We
have jurisdiction over an appeal of a final decision by a
district court pursuant to 28 U.S.C. S 1291 and over an
appeal of a final sentence in a criminal case pursuant to 18
U.S.C. S 3742(a).
A. Validity of the Money Laundering Conviction
Omoruyi contends first that there was insufficient
evidence to establish the elements of money laundering
because he did not conduct a financial transaction with
"proceeds" of the mail fraud. He argues that the mail fraud
was not complete, and therefore did not yield "proceeds"
4
until he took possession of the cash credited to the
accounts. Thus, in his view, the cash withdrawals could not
serve as the basis for the money laundering counts. On this
point, to the extent that the appeal involves legal
determinations we exercise plenary review, but when the
sufficiency of the evidence is challenged, we review the
record to determine if there was substantial evidence to
support the verdict. See United States v. Conley , 37 F.3d
970, 975 (3d Cir. 1994); United States v. Pungitore, 910
F.2d 1084, 1129 (3d Cir. 1990).3
On this appeal, we are concerned with the construction
of 18 U.S.C. S 1956(a)(1) which defines illegal money
laundering as:
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--
(A)(i) with the intent to promote the carrying on of
specified unlawful activity; or
. . .
(B) knowing that the transaction is designed in whole
or in part --
(i) to conceal or disguise the nature, the location, the
source, the ownership, or the control of the proceeds of
specified unlawful activity . . . .
Accordingly, section 1956(a)(1) sets forth the four elements
of a money laundering offense: (1) an actual or attempted
financial transaction; (2) involving the proceeds of specified
unlawful activity; (3) knowledge that the transaction
involves the proceeds of some unlawful activity; and (4)
either an intent to promote the carrying on of specified
unlawful activity or knowledge that the transactions were
designed in whole or in part to conceal the nature, location,
source, ownership, or control of the proceeds of specified
_________________________________________________________________
3. In fact, the principles applicable to the validity of the conviction
are
essentially legal in character.
5
unlawful activity.4 See id. ; see also United States v. Morelli,
169 F.3d 798, 803 (3d Cir.), cert. denied, 528 U.S. 820, 120
S. Ct. 63 (1999).
In Conley, 37 F.3d at 978, we considered whether the
deposit of illegal gambling proceeds could support a
conviction for the money laundering object of a conspiracy.
There the defendant argued that the government failed to
establish the essential elements of money laundering
because the conduct upon which the government based the
charge was essentially the same as that supporting the
illegal gambling charges. See id. We explained the
defendant's contention as follows:
McGrath contends before us that a wide variety of
transactions involving the money placed into the video
poker machines is necessarily part of the illegal
gambling business, including collecting and counting
money, dividing up money, transferring and
transporting money, depositing money into banks and
withdrawing money from banks. McGrath contends
that this same conduct cannot be properly alleged to
be money laundering.
Id. We disagreed with the defendant's contentions. See id.
at 978-79. In doing so, we acknowledged that "[o]bviously,
whenever a defendant makes money from criminal activity
he has something to do with it," and that "Congress did not
enact money laundering statutes simply to add to the
penalties for various crimes in which defendants make
money." Id. at 979. But, we found that section 1956(a)(1)
addressed this concern, and therefore delineated clearly
between the underlying offense and the money laundering
offense, by including an intent requirement. See id. We
stated:
Section 1956(a)(1), quite clearly, does not prohibit all
financial transactions that are conducted with the
proceeds of specified unlawful activity. It only
proscribes those transactions that are conducted with
the intent to promote certain further illegal activity,
under subsection (A), or that are designed to conceal
under subsection (B).
_________________________________________________________________
4. Omoruyi does not appear to contest the first and third elements.
6
These requirements would preclude the application of
section 1956 to non-money laundering acts such as a
defendant's depositing the proceeds of unlawful activity
in a bank account in his own name and using the
money for personal purposes.
Id. (citing United States v. Jackson, 935 F.2d 832 (7th Cir.
1991)).
Furthermore, we indicated that for money to become
"proceeds" it must be derived from a completed offense, or
a completed phase of an ongoing offense. See id. at 980.
That being said, the conduct constituting the underlying
offense conduct may overlap with the conduct constituting
money laundering. See id. To that end, we found that the
money, once collected from the various video poker
machines, became " ``proceeds of specified unlawful
activity' " within the meaning of the money laundering
statute, even though there may have been some overlap in
the acts alleged to constitute the conduct of an illegal
gambling business and money laundering. Id. (quoting 18
U.S.C. S 1956(a)(1)).
Applying Conley here, it is clear that there was
substantial evidence supporting Omoruyi's money
laundering conviction. Omoruyi contends, in an argument
similar to that of the defendant in Conley, that the conduct
charged as money laundering was the same conduct
constituting mail fraud. Nevertheless, inasmuch as the
money was deposited in bank accounts under false names,
and Omoruyi used false identification to withdraw it, he
clearly conducted the transactions charged with the intent
to conceal or disguise the nature, source, ownership and
control of the proceeds of the mail fraud. As we noted in
Conley, section 1956 would not apply to a defendant's
depositing the proceeds of unlawful activity in a bank
account "in his own name" and using the money for
personal purposes, as neither the "promote" or"conceal"
aspects of the money laundering statute would be met. Id.
at 979 (emphasis added). Here, however, there is sufficient
evidence of concealment, and of Omoruyi's intent to
conceal, to sustain his conviction.
Moreover, Conley establishes that, at the very latest, the
7
money acquired through the mail fraud became "proceeds"
at the time the checks were honored by the various banks.
As we found in Conley, proceeds are derived from an
already completed offense or a completed phase of an
ongoing offense. See id. at 980. Here, the indictment
charged six counts of mail fraud based on the mailing of
fraudulently obtained checks to the various banks, while
the money laundering counts were based upon eight
subsequent teller window cash withdrawals. Therefore, the
mail fraud offenses were complete as of the time the six
checks were placed in the mail for delivery to the banks,
and thus the money thereafter derived from the checks
constituted the proceeds of the already completed offenses.5
Notwithstanding Conley, Omoruyi also argues, citing
United States v. Johnson, 971 F.2d 562, 569-70 (10th Cir.
1992), that money cannot be "proceeds" until the defendant
has possession of it. Relying on the fact that the money was
in bank accounts under false names, he contends that he
was not in possession of it until he actually withdrew it and
therefore the money could not be deemed proceeds until
that time.6 He argues that "[t]he essential determination is
when and how could possession of the funds be obtained,"
and because "the funds were never credited to an account
_________________________________________________________________
5. The crime of mail fraud is defined as:
Whoever, having devised or intending to devise any scheme or
artifice to defraud, or for obtaining money or property by means of
false or fraudulent pretenses, representations, or promises, . . .
for
the purpose of executing such scheme or artifice or attempting so
to
do, places in any post office or authorized depository for mail
matter, any matter or thing whatever to be sent or delivered by the
Postal Service . . . .
18 U.S.C. S 1341. In fact, even if the mail fraud was not completed until
the banks collected the proceeds, our result would not be altered as the
mail fraud would have been completed before the cash withdrawals.
6. To this end, Omoruyi also relies on the court's statement in United
States v. Edgmon, 952 F.2d 1206, 1209 (10th Cir. 1991), that "merely
spending the proceeds of illegal activity does not violate the money
laundering statute." As discussed previously, however, Omoruyi did not
simply spend the proceeds of illegal activity. Rather, he engaged in a
financial transaction designed to conceal the source, ownership and
control of the proceeds.
8
under the name Austin Omoruyi," he could not be deemed
to have possession over them until he had the cash.
Appellant's Br. at 12.
In Johnson, however, the court found the defendant had
possession over the money so that it constituted"proceeds"
once the wire transfers at issue were credited to his
account. See Johnson, 971 F.2d at 569-70. We recognize
that the account in Johnson was under the defendant's
name, while the accounts here were under false names, but
this factual distinction is not of legal consequence in the
resolution of this case. Although deposited under false
names, the money was credited to accounts over which
Omoruyi had control, and therefore the money was in his
possession. His utilization of fictitious names and
identification to access the accounts enhances, rather than
detracts from the money laundering aspect of Omoruyi's
conduct as he used these names and identification to
conceal the source, ownership and control of the money.
Accordingly, we find that there was substantial evidence
supporting Omoruyi's convictions for money laundering
which we thus affirm.7
B. Applicability of the Money Laundering Sentencing
Guideline
Alternatively, Omoruyi contends that the district court
erred in applying the money laundering sentencing
guidelines, as opposed to the fraud guidelines, in
calculating his sentence.8 This point is important because
if everything else with respect to sentencing is equal, the
money laundering guidelines will yield a higher sentencing
range than the fraud guidelines. Resolution of this issue
requires us to consider preliminarily whether we should
apply amended money laundering guidelines, effective on
November 1, 2000, to Omoruyi's sentence as the court
_________________________________________________________________
7. Moreover, Omoruyi contends that the government's action in
prosecuting him for money laundering was "piling on" in violation of its
own prosecution policies. We see no basis for this contention but in any
event the policy, even if violated, does not create substantive rights
entitling him to relief on this appeal. See Pungitore, 910 F.2d at 1120.
8. We review the district court's application of the sentencing guidelines
de novo. See United States v. Bockius, 228 F.3d 305, 308 (3d Cir. 2000).
9
sentenced him on December 11, 2000, or whether we
instead should apply the guidelines in effect at the time of
his offense. In light of our recent decision in United States
v. Diaz, 245 F.3d 294 (3d Cir. 2001), we conclude that ex
post facto principles preclude the application of the
amended guidelines here.
As a general rule, sentencing courts must apply the
guidelines in effect at the time of sentencing. See United
States v. Menon, 24 F.3d 550, 566 (3d Cir. 1994). However,
where application of the guidelines in effect at sentencing
would result in a more severe penalty than application of
those in effect at the time of the offense, the court, to avoid
an ex post facto violation, must apply the guidelines in
effect at the time of the offense. See, e.g., United States v.
Brannan, 74 F.3d 448, 450 n.2 (3d Cir. 1996); United
States v. Cherry, 10 F.3d 1003, 1014 (3d Cir. 1993). Here,
the conduct forming the basis of Omoruyi's conviction
occurred between March and June 1999, well prior to the
effective date of the amended guidelines, while he was
sentenced on December 11, 2000, approximately one and
one-half months afterwards. While the district court did not
discuss the effect of the amendments to the guidelines and
thus did not note the ex post facto problem we have
identified, in fact it sentenced Omoruyi without applying
the November 1, 2000 amendments.9 Nevertheless, unless
the November 1, 2000 amendments made the penalty more
severe we should apply them on this appeal and should
take them into account when considering Omoruyi's appeal
of his sentence. Therefore, we must consider in our
sentencing discussion whether Omoruyi would be subject
to a more severe penalty under the amended guidelines
than under the guidelines in effect at the time of his
offense.
_________________________________________________________________
9. The presentence report indicated that the"sentencing guidelines
effective November 1, 1998, were used in [its] calculations." The court,
in
turn, indicated that it used the "factual findings and the guideline
application in the presentence report" in imposing sentence with
exceptions unrelated to the adoption of the November 1, 2000
amendments. In fact, we are not even certain whether the court or the
parties at the time of the sentencing were aware of the November 1, 2000
amendments for, as Omoruyi points out, "[t]here was no discussion of
the amendments at sentencing." Reply Br. at 7.
10
In Diaz, we considered whether the November 1, 2000
amendments to the sentencing guidelines should apply
retroactively to the defendant's sentence. See Diaz, 245
F.3d at 296. Determination of this issue required us to
consider whether the amended guidelines altered the law in
effect at the time of the offense or merely clarified the law
so that there was no substantive change between the dates
of the offense and the sentencing. See id. at 301. After
comparing the law prior to the amendments, namely our
decision in United States v. Smith, 186 F.3d 290 (3d Cir.
1999), superseded by rule as stated in Diaz, 245 F.3d at
294, and the amended guidelines, we concluded that Smith,
and its approach to applying the guidelines, is no longer
"good law." See Diaz, 245 F.3d at 303. 10 In cases such as
that here, in which several counts, including mail fraud
and money laundering, have been grouped pursuant to
U.S.S.G. S 3D1.2(b), the amendments make it mandatory
for the sentencing court to apply the guideline carrying the
highest applicable offense level. See id. Under the
guidelines prior to the amendments, however, the
sentencing court was to conduct a heartland analysis of the
guidelines, determine whether the defendant's conduct is
atypical of cases usually sentenced under that guideline
and, if so, determine what guideline would be more
appropriate under the circumstances. See id. at 301 (citing
Smith, 186 F.3d at 297-98).
While it is true that the process that Smith required
constituted a legal determination, see Smith, 186 F.3d at
297-98, still it introduced a degree of uncertainty into the
selection of the applicable guidelines that the November 1,
2000 amendments eliminate. Thus, it is understandable
that in Diaz we found that the amendments substantively
changed the sentencing guidelines as interpreted by Smith
and its progeny, and that application of the amended
guidelines to a sentence issued prior to their effective date
was precluded by ex post facto considerations. See Diaz,
245 F.3d at 305. Diaz clearly is controlling here.11
_________________________________________________________________
10. Of course, we did not mean that Smith was not "good law" with
respect to cases involving offenses committed prior to November 1, 2000.
11. In theory in Diaz we could have held that if under Smith the pre-
November 1, 2000 money laundering guidelines were applicable then
application of the amendments would be appropriate as there would not
be an ex post facto problem. We did not, however, use this circular
reasoning.
11
Accordingly, we will apply the pre-amendment guidelines,
meaning the analysis established in Smith and its progeny,
to this case and thus in this regard will use the same
methodology in determining the applicable guidelines as the
district court.12
Pursuant to Smith, we conduct a heartland analysis of
the money laundering guidelines to determine whether the
conduct being punished is "atypical" of the conduct usually
sentenced under the guidelines. See Smith, 186 F.3d at
297. If so, then we are to determine what other guidelines
would be more appropriate for sentencing. See id.
In Smith, the defendants were convicted of conspiracy to
defraud, interstate transportation of stolen property,
causing unlawful interstate transportation with intent to
distribute stolen property, and money laundering. See id. at
296-97. The money laundering count was based on checks
written by another defendant on the proceeds of kickbacks
where the defendant ordered that many of these checks be
written to his creditors, as opposed to directly to him. See
id. The district court grouped the four offenses and applied
the money laundering guideline. See id. at 292. On appeal,
we vacated the defendants' sentences and remanded the
case for resentencing under the fraud guideline. See id. at
300.
Applying the analysis described above, we found that the
use of the money laundering guidelines was inappropriate.
See id. We concluded that the defendants engaged in
conduct inconsistent with concealment, such as leaving a
paper trail, that any efforts at concealment were
disingenuous, and that when considered with the entire
course of conduct, the money laundering was an incidental
by-product of the fraud. See id. Inasmuch as we deemed
this conduct to be outside of the heartland of conduct
intended to be punished by the money laundering statute,
the money laundering guidelines did not apply. See id.
_________________________________________________________________
12. In Hameen v. Delaware, 212 F.3d 226, 237-38 (3d Cir. 2000), cert.
denied, 121 S. Ct. 1365 (2001), we recognized the principle that if a
discretionary sentence becomes mandatory after the offense is committed
there is a ex post facto violation. This principle is similar to that
applied
in Diaz.
12
Since then, we have decided several cases applying the
Smith analysis, the most relevant of which are United States
v. Mustafa, 238 F.3d 485 (3d Cir. 2001), and Diaz. In
Mustafa we held that the district court did not commit
plain error in sentencing the defendant under the money
laundering guidelines. See id. at 496. There, the defendant,
while operating a supermarket, deposited more than $1.5
million worth of fraudulently obtained food stamps into his
bank account. See id. at 487. In order for him to participate
in the food stamp program, the government required the
defendant to submit an application to the United States
Department of Agriculture acknowledging that the bank
account would be used to deposit food stamps obtained in
accordance with governing law. See id. In addition, with
each stamp deposit the defendant completed a required
"redemption certificate" which purported to verify that the
food stamps had been obtained legally. See id. Following
the defendant's guilty plea to, among other things, 40
counts of money laundering, the district court utilized the
money laundering guidelines and sentenced him to 135
months imprisonment. See id. at 488-89.
On appeal, we rejected the defendant's argument that the
sentencing court improperly applied the money laundering
guidelines because his conduct did not fall within the
heartland of the money laundering statute, namely conduct
involving the proceeds of large-scale drug trafficking and
organized crime. See id. at 496. In doing so we found that
the food stamp deposits were separate and distinct from the
criminal activity from which they derived, namely the
purchase of food stamps from persons involved in their
illegal trafficking. See id. at 495. Further, with each
deposit, the defendant represented that he had received the
food stamps legitimately. See id. at 495-96. Therefore, his
conduct was intended to create an appearance that the
illegally obtained proceeds were themselves legitimate. See
id. at 496. That the defendant had to deposit the food
stamps for them to have any cash value was not
determinative because he still intended to and was
concealing the original source of the funds. See id.
Accordingly, we affirmed the district court's application of
the money laundering guidelines. See id.
13
We reached the opposite result, however, in Diaz . There,
the defendant pled guilty to a four-count indictment
charging her with, among other things, fraud and money
laundering resulting from a scheme to obtain federal
student financial assistance fraudulently on behalf of her
cosmetology school. See Diaz, 245 F.3d at 296-98. The
district court calculated her sentence based on the
guidelines applicable to money laundering, and the
defendant appealed. See id. at 296.
On appeal, we examined Smith and the cases applying its
methodology. See id. at 305-08 (citing and discussing
Mustafa, 238 F.3d at 488-96; United States v. Bockius, 228
F.3d 305, 309-13 (3d Cir. 2000); United States v. Cefaratti,
221 F.3d 502 (3d Cir. 2000); Smith, 186 F.3d at 297-300).
We found these cases rejected a reading of Smith that
would limit the use of the money laundering guidelines only
to cases involving the proceeds of drug trafficking and
organized crime. See id. at 309. Instead:
Mustafa, Bockius, Cefaratti, and Smith all are in accord
that the heartland of the money laundering guidelines
includes, in addition to drugs and organized crime,
cases involving typical money laundering, financial
transactions that are separate from the underlying
crime and that are designated either to make illegally
obtained funds appear legitimate, to conceal the source
of some funds, or to promote additional criminal
conduct by reinvesting the funds in additional criminal
conduct.
Id. at 309-10. We distinguished these types of cases from
"ordinary cases of routine fraud, . . . the simple receipt and
deposit or use of illegally obtained funds, or . . . cases in
which any money laundering is not separate from the
underlying fraud, but merely an ``incidental by product' of
that underlying fraud." Id. at 310. Therefore, "where the
defendant has not made a serious, concerted effort to
conceal or to legitimize the funds or to reinvest them in
additional criminal activity, it is not appropriate to sentence
that defendant under the money laundering guideline." Id.
Applying these principles, we found that the district court
improperly sentenced the defendant under the money
14
laundering guidelines rather than the fraud guidelines. See
id. at 311. The defendant, while having violated the money
laundering statute by engaging in a monetary transaction
in criminally derived property, neither used the proceeds of
her fraudulent activities to promote additional criminal
conduct, nor made any effort to disguise the source or
nature of the funds.13 See id. We deemed the defendant's
deposit of the student assistance funds to be inseparable
from and an incidental by-product of the fraud and
minimal in comparison to the totality of the unlawful
conduct. See id. Therefore, we vacated the defendant's
sentence and remanded the matter for resentencing under
the fraud guidelines. See id. at 312.
Omoruyi contends his sentence should have been
calculated under the fraud guidelines because his money
laundering conduct was minimal and incidental to the mail
fraud. We reject that argument and hold that the court
properly sentenced Omoruyi under the money laundering
guidelines. First, the conduct charged in the indictment,
eight teller window withdrawals, was separate from the
underlying crime of obtaining fraudulently and mailing the
convenience checks to the various banks. Further, this case
is distinguishable from Diaz as there the money laundering
count was predicated only on the defendant's deposit of the
federal student assistance checks in the school's bank
account. Arguably, had Omoruyi merely deposited the
checks, his conduct would not be deemed separate from the
underlying crime, and this case would be more akin to
Diaz. However, Omoruyi took the additional step of
withdrawing the proceeds of his criminal conduct, an
activity clearly not part of the underlying mail fraud.
Second, Omoruyi's conduct involved a concerted effort to
conceal or to legitimize the funds obtained through the mail
fraud. In that regard, this case is quite similar to Mustafa.
_________________________________________________________________
13. Diaz pled guilty to violating 18 U.S.C. S 1957(a) which makes it
illegal
to "knowingly engage[ ] . . . in a monetary transaction in criminally
derived property . . . and is derived from specified unlawful activity. .
. ."
Therefore, unlike section 1956(a)(1), section 1957(a) contains neither a
promote nor a conceal element. That Diaz was prosecuted under a
different money laundering statute, however, does not affect our analysis
under Smith.
15
In conduct similar to that of the defendant in Mustafa,
though on a lesser scale, Omoruyi deposited approximately
$75,000 worth of fraudulently obtained convenience checks
in various bank accounts. Also, as in Mustafa , the deposits
were intended to conceal the source and nature of the
proceeds and create an appearance of their legitimacy.
Moreover, Omoruyi laundered the proceeds through
accounts he opened using two different aliases, further
compounding his attempts to conceal the funds and his
control over them.
Finally, in Mustafa we found that the fact that the
defendant had to deposit the food stamps for them to have
value did not negate the fact that he engaged in money
laundering. See Mustafa, 238 F.3d at 496. This conclusion
renders unmeritorious Omoruyi's contention that the mail
fraud was not complete until he received the funds from
those offenses because before then the proceeds of the
criminal conduct were of no use. Therefore, we find that
under the version of the sentencing guidelines prior to their
November 1, 2000 amendment, the district court
appropriately sentenced Omoruyi under the guidelines
applicable to money laundering.
III. CONCLUSION
For the foregoing reasons, we will affirm the judgment
and sentence of the district court entered December 12,
2000.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
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