United States v. Shango Allick ( 2013 )

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 11-4305
_____________
UNITED STATES OF AMERICA
v.
SHANGO ALLICK,
Appellant
___________
On Appeal from the District Court
of the Virgin Islands
(D.C. No. 1-07-cr-00042-003)
District Judge: Honorable Anne E. Thompson
___________
Submitted Under Third Circuit L.A.R. 34.1(a)
April 24, 2013
Before: McKEE, Chief Judge, SCIRICA, and VANASKIE, Circuit Judges.
(Filed: July 30, 2013 )
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OPINION
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VANASKIE, Circuit Judge.
Shango Allick appeals his conviction of one count of conspiracy to commit money
laundering, in violation of 18 U.S.C. § 1956(h), and thirteen counts of money laundering,
in violation of 18 U.S.C. § 1956(a)(1). Allick argues that because the money at issue in
the money laundering scheme—resulting from illegal drug sales—was gross receipts,
rather than profits, the money was not “proceeds” within the meaning of the money
laundering statute in effect at the time of his indictment. We disagree. Accordingly, we
will affirm the judgment of conviction.
I.
Since we write principally for the parties, we set forth only the facts essential to
our analysis. Around 2001, Myron Punter began selling cocaine and crack cocaine in
Alaska. He received the drugs via mail from the Virgin Islands, sent by one of Allick’s
codefendants, Isaiah Fawkes, who grew up with Punter in the Virgin Islands. Initially,
Punter would wire money or send money orders directly to Fawkes, but later, in an
attempt to avoid suspicion, Punter employed others to wire the money to other
individuals in the Virgin Islands identified by Fawkes. Two such people employed by
Punter were his wife, Shonderi Punter, and Tanisha Wade. A Government exhibit
summarizing wire transfers received by Allick indicates that he received money from
three individuals, including Shonderi Punter and Wade, totaling $20,499.
In June of 2007, a grand jury indicted Allick and seven other defendants on a
number of counts. Allick was charged with one count of conspiracy to commit money
laundering and thirteen counts of money laundering. After their indictment, Allick and
six other defendants proceeded to trial.1 The jury returned a guilty verdict on the one
1
Five of the other codefendants’ appeals were joined: United States v. Garcia, No.
11-1999; United States v. Maragh, No. 11-2036; United States v. Alfred, No. 11-4343;
United States v. Young, No. 11-4344; and United States v. Clouden, No. 11-4522. A
panel of this Court has already affirmed the judgment of conviction and sentence of
Fawkes. See United States v. Fawkes, 510 F. App’x 183 (3d Cir. 2013).
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count of conspiracy to commit money laundering and all thirteen counts of money
laundering. The District Court sentenced Allick to thirty months’ imprisonment, three
years of supervised release, and a special assessment.
II.
The District Court had jurisdiction under 48 U.S.C. § 1612(a) and 18 U.S.C. §
3231. We have appellate jurisdiction under 28 U.S.C. § 1291.
To prove a defendant engaged in money laundering under 18 U.S.C. §
1956(a)(1)(B)(i), the government must establish:
(1) an actual or attempted financial transaction; (2) involving
the proceeds of [a] specified unlawful activity; (3) knowledge
that the transaction involves the proceeds of some unlawful
activity; and (4) . . . knowledge that the transaction [was]
designed in whole or in part to conceal the nature, location,
source, ownership, or control of the proceeds of [a] specified
unlawful activity.
United States v. Richardson, 658 F.3d 333, 337-38 (3d Cir. 2011) (quoting United States
v. Omoruyi, 260 F.3d 291, 294-95 (3d Cir. 2001)). Relying on United States v. Santos,
553 U.S. 507 (2008), Allick’s sole argument on appeal is that, at the time of his
indictment, “proceeds” within the meaning of § 1956 meant net profits, rather than gross
receipts. He asserts that the money Punter sent Fawkes was not profits from his drug
sales, but, instead, was sent to cover the costs of the drugs Fawkes supplied Punter.
Therefore, according to Allick, the Government failed to establish that he was involved in
money laundering or conspiracy to commit money laundering because the money in
question was not profits of the drug sales and, therefore, was not “proceeds” of unlawful
activity under § 1956(a)(1)(B)(i).
3
In Santos, the Supreme Court reviewed the money laundering convictions of two
defendants for their role in operating an illegal lottery. Santos, 553 U.S. at 509-10(plurality opinion). At issue was whether “proceeds” under § 1956 applied only to profits
of unlawful activity, rather than receipts. Finding the statutorily-undefined term
ambiguous, a four-Justice plurality of the Court applied the rule of lenity, resulting in its
conclusion that “proceeds” should be defined as “profits.” Id. at 514. The plurality also
explained that interpreting “proceeds” to mean receipts would create a “merger problem”
because “nearly every violation of [an] illegal-lottery statute would also be a violation of
the money-laundering statute.” Id. at 515 (internal quotations omitted). The four
dissenting Justices reached the opposite conclusion, concluding that “proceeds” meant
“gross receipts,” not profits, in all circumstances. Id. at 546 (Alito, J., dissenting).
Concurring in the judgment, Justice Stevens agreed that receipts from an illegal gambling
business were not “proceeds” within the meaning of the money laundering statute and
agreed that such an interpretation would create a “merger” problem. Id. at 527-28
(Stevens, J., concurring in the judgment). But, Justice Stevens also concluded that, with
respect to other types of unlawful activity, “proceeds” may encompass receipts when the
legislative history so indicates, as in the case of the sale of contraband. Id. at 525-26,
528. Therefore, as Justice Alito noted, five Justices agreed that “proceeds” included
receipts (rather than profits) from the sale of contraband. 2 See id. at 531-32 & n.1 (Alito,
J., dissenting).
2
Section § 1956 now defines “proceeds” as “any property derived from or
obtained or retained, directly or indirectly, through some form of unlawful activity,
4
Interpreting the splintered opinions of the Court in Santos, we have previously
held that “‘proceeds’ mean[t] gross receipts in the circumstances” of a money laundering
charge stemming from a defendant’s use of drug trafficking money to purchase real
estate. See Richardson, 658 F.3d at 340. In that case, we perceived no merger problem,
and noted “the collective view of five justices” in Santos that “‘proceeds’ mean[t] gross
receipts in cases involving the sale of drugs and other contraband” as “persuasive
authority.” Id. Additionally, we observed that “our sister circuits uniformly agree that
‘proceeds’ means receipts in the drug trafficking context—at least where (as here) there
is no merger problem.” Id. (collecting cases).
Here, there is no merger problem. Allick was charged with money laundering and
conspiracy to commit money laundering for his role in receiving wire transfers as part of
a plan to conceal the fact that the source of the money was a drug trafficking scheme.
Therefore, based on Richardson, the Government was not required to prove that the
money Punter had sent to Allick was profits of the sale of drugs in order for the jury to
find him guilty of money laundering and conspiracy to commit money laundering.
III.
For the foregoing reasons, we will affirm the judgment of the District Court.
including the gross receipts of such activity.” 18 U.S.C. § 1956(c)(9) (emphasis added).
At the time Allick was indicted, however, the term “proceeds” was undefined. Congress
added the definition of “proceeds,” which became effective May 20, 2009, after the
Supreme Court’s decision in Santos. Of course, the statutory definition does not apply
here.
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