United States v. Nicholson , 176 F. App'x 386 ( 2006 )


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  •                             UNPUBLISHED
    UNITED STATES COURT OF APPEALS
    FOR THE FOURTH CIRCUIT
    No. 04-4794
    UNITED STATES OF AMERICA,
    Plaintiff - Appellee,
    versus
    MARSHALL NICHOLSON, SR.,
    Defendant - Appellant.
    ------------------------
    UNITED STATES BANK NATIONAL ASSOCIATION,
    Movant.
    No. 04-4941
    UNITED STATES OF AMERICA,
    Plaintiff - Appellee,
    versus
    MARSHALL NICHOLSON, JR., a/k/a King,
    Defendant - Appellant.
    -------------------------
    UNITED STATES BANK NATIONAL ASSOCIATION,
    Movant.
    No. 04-4980
    UNITED STATES OF AMERICA,
    Plaintiff - Appellee,
    versus
    ROBERT EDWARD TURNER,
    Defendant - Appellant.
    No. 05-4004
    UNITED STATES OF AMERICA,
    Plaintiff - Appellee,
    versus
    GLADYS PAYNE NICHOLSON, a/k/a Gladys Marie
    Nicholson,
    Defendant - Appellant.
    Appeals from the United States District Court for the District of
    Maryland, at Greenbelt. Alexander Williams, Jr., District Judge.
    (CR-03-268-AW)
    Argued:   February 3, 2006                 Decided:   April 18, 2006
    Before WILKINSON, LUTTIG, and MICHAEL, Circuit Judges.
    2
    Affirmed by unpublished per curiam opinion. Judge Michael wrote an
    opinion concurring in part and concurring in the judgment.
    ARGUED: Hughie Duvall Hunt, II, KEMET & HUNT, P.L.L.C., College
    Park, Maryland, for Appellants. Chan Park, Assistant United States
    Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Greenbelt,
    Maryland, for Appellee. ON BRIEF: Thomas J. Saunders, Baltimore,
    Maryland, for Appellant Marshall Nicholson, Sr.; Michael S.
    Blumenthal, Landover, Maryland, C. William Michaels, Baltimore,
    Maryland, for Appellant Marshall Nicholson, Jr.; Allen H. Orenberg,
    North Bethesda, Maryland, for Appellant Robert Edward Turner. Rod
    J. Rosenstein, United States Attorney, Deborah Johnston, Assistant
    United States Attorney, Patrick M. Pericak, Special Assistant
    United States Attorney, Greenbelt, Maryland, for Appellee.
    Unpublished opinions are not binding precedent in this circuit.
    See Local Rule 36(c).
    3
    PER CURIAM:
    Defendants in this case appeal their convictions and sentences
    arising out of a large operation to distribute drugs in Prince
    George’s County, Maryland.            We conclude that their claims lack
    merit, and affirm the judgment on all accounts.
    I.
    Defendants are Marshall Nicholson, Jr. (Nicholson, Jr.), his
    father, Marshall Nicholson, Sr. (Nicholson, Sr.), his mother,
    Gladys Payne Nicholson (Ms. Nicholson), and an associate, Robert
    Edward Turner.        A grand jury indicted defendants on fourteen
    counts, all of which stemmed from an investigation of a large-scale
    drug distribution ring in Prince George’s County, Maryland. A jury
    trial was held beginning on February 24, 2004, and it continued
    over twenty-four days.
    The government introduced extensive evidence at trial, and we
    merely    summarize     it    here.     The    evidence    demonstrated    that
    Nicholson, Jr. had distributed a large amount of drugs since the
    1980s, often from the home of his parents at 7533 Allendale Drive,
    Palmer   Park,   Maryland     (the    Palmer   Park    home).     The   evidence
    consisted of, inter alia, witness testimony, statements obtained
    from    wiretaps,     and    physical   evidence      recovered   in    numerous
    searches.    We will review each in turn.
    4
    Several witnesses testified as to Nicholson, Jr.’s drug-
    related   activities.       Kenneth       Pickens,    for      example,    regularly
    obtained a half-ounce to an ounce of crack from Nicholson, Jr.
    every week beginning in 1997, for about six months to a year.                      Some
    of these transactions took place at the Palmer Park home.                    As late
    as January 2003, cooperating with law enforcement, Pickens bought
    62 grams of crack from Nicholson, Jr. at the Palmer Park home.
    Patricia Tucker testified that she purchased 3.5 grams of
    crack from Nicholson, Jr. about once a week between 1996 and 2000,
    often at the Palmer Park home.          She and Alan Sarvis also testified
    that they traveled to Los Angeles with Nicholson, Jr. to purchase
    eight kilograms of powder cocaine in July 2001.                   Tucker took four
    kilograms of cocaine in her suitcase, and returned to the Palmer
    Park home, where the cocaine was unpacked.                     Sarvis and another
    individual   hid   the    other    four       kilograms   on     their    bodies   and
    returned to Maryland on July 29, 2001.               Law enforcement officers
    intercepted them at the Baltimore-Washington International Airport,
    and they were arrested.
    Jermaine Woodbury testified that he obtained 31 grams of crack
    from Nicholson, Jr. in March or April 2000.               He further noted that
    in March 2001, he had Nicholson, Jr. convert 125 grams of powder
    cocaine   into   crack.     A     few   days     later,     he   also    arranged     a
    transaction in which Nicholson, Jr. bought six kilograms of cocaine
    5
    from another individual.     Woodbury further testified that on July
    17, 2002, he purchased 62 grams of crack from Nicholson, Jr.
    Stephen Brown testified that he and Nicholson, Jr. often
    collaborated in buying cocaine.         Brown facilitated a purchase in
    1999 in which Nicholson, Jr. obtained a kilogram of cocaine.
    Additionally, between September 2002 and June 2003, they bought
    approximately 25 kilograms of cocaine from a source in California.
    Nicholson, Jr. would convert the powder cocaine into crack and they
    would then sell it.       Finally, Weldon Barnett testified that he
    often obtained up to a half-kilogram of crack from Nicholson, Jr.
    at the Palmer Park home beginning in 1998.             Several of these
    witnesses testified that Nicholson, Sr. and Ms. Nicholson were in
    the home when they obtained drugs from Nicholson, Jr.
    Ernest Cox, a longtime associate of Nicholson, Sr., testified
    that during a visit with Nicholson, Sr. in March 2003, Nicholson,
    Sr. asked him if he knew anyone who sold cocaine.            Cox asked how
    much Nicholson, Sr. needed, and he responded that he would have to
    ask his son.    Cox later located a potential source, and Nicholson,
    Sr. stayed in contact with Cox to help his son arrange the purchase
    of between five and ten kilograms of cocaine.               Nicholson, Jr.
    eventually traveled to Texas and Mexico to discuss the sale of this
    cocaine, but the transaction fell through.
    In addition to the multiple witnesses who testified, the
    government     also   introduced   at    trial   numerous    tape-recorded
    6
    conversations occurring between March and June 2003 that it had
    obtained through the use of wiretaps. Law enforcement officers had
    placed wiretaps on various phones, including several cell phones
    used by Nicholson, Jr. and the phone at the Palmer Park home.
    These wiretaps revealed that Nicholson, Jr. would call Nicholson,
    Sr. to discuss who had come by the home and who had left messages
    for him.   According to law enforcement officers, father and son
    talked in code about drug distribution.
    Physical evidence was also recovered as a result of several
    searches conducted on June 12, 2003, which marked the end of the
    investigation.      After obtaining search warrants, law enforcement
    officers searched several homes. At the Palmer Park home, officers
    recovered a handgun, ammunition, and $85,339 in cash.             They also
    searched defendant Turner’s residence, and found a handgun hidden
    in a sofa in the basement. Officers located Nicholson, Jr.’s Dodge
    pickup truck, and searched and seized it as well.               Among other
    contraband, they found an RF detector, which detects body wires.
    Finally, the government presented evidence to show that Ms.
    Nicholson had engaged in money laundering when she bought a home
    with her son’s money.      On September 9, 1999, Ms. Nicholson closed
    a deal with Raymond Procopio Builders to purchase a home located at
    3220 Dunbratton Court, Waldorf, Maryland (the Waldorf home).            From
    the financial records, it appears that the price of the home was
    about   $500,000,    and   that   the   down   payment   was   approximately
    7
    $23,000.    Nicholson, Jr. was present at the closing.          He later told
    associates that he in fact had purchased the home, that he had put
    down $100,000 on it, and that he had his mother place the home in
    her name.   When the builder was later called to make repairs on the
    home, he noted that Nicholson, Jr. was the only person present that
    he knew.
    Detective Dennis Hallinger of the Prince George’s County
    Police Department questioned Ms. Nicholson about her son and the
    Waldorf home during the search of her own home conducted on June
    12, 2003.       She said that she did not know what Nicholson, Jr. did
    for a living and that she owned no other property other than the
    Palmer Park home.       She refused to acknowledge that she had placed
    the Waldorf home in her name, but did indicate she had done so for
    her daughter-in-law’s home.           Ms. Nicholson had for several years
    deducted mortgage interest she allegedly paid on the Waldorf home
    from her taxable income on her tax returns.
    The jury returned its verdict on April 2, 2004.           It acquitted
    defendants on some counts, but convicted each defendant on at least
    one.   Nicholson, Jr. was convicted of numerous counts.              First, the
    jury convicted him of conspiracy to distribute, inter alia, five
    kilograms of cocaine and fifty grams of crack from 1999 to June 12,
    2003, in violation of 
    21 U.S.C. § 846
     (2000).                    He was also
    convicted of possessing with intent to distribute five kilograms of
    cocaine    on    July   29,   2001,   and   of   possessing   with   intent   to
    8
    distribute fifty grams of cocaine base on July 17, 2002 and January
    22, 2003, all in violation of 
    21 U.S.C. § 841
    .              Finally, he was
    convicted of using a communication facility to further a drug
    conspiracy, in violation of 
    21 U.S.C. § 843
    (b), and of a money
    laundering conspiracy, in violation of 
    18 U.S.C. § 1956
    (h) (2000).
    He was sentenced to a mandatory minimum of life imprisonment based
    on the drug convictions.        See 
    21 U.S.C. § 841
    (b)(1)(A).
    The jury also convicted Nicholson, Sr. of conspiracy to
    distribute drugs, and of using a communication facility to further
    that conspiracy.       See 
    21 U.S.C. §§ 843
    (b), 846.        In addition, it
    convicted him of making available his family home to store and
    distribute drugs, in violation of 
    21 U.S.C. § 856
    (a)(2).             He was
    sentenced   to   135   months   in   prison.   The   jury    convicted   Ms.
    Nicholson of money laundering for her role in the purchase of the
    Waldorf home, in violation of 
    18 U.S.C. § 1956
    (a)(1)(B)(I).              The
    district court sentenced her to twelve months and a day.           Finally,
    the jury convicted Turner of being a felon in possession of a
    firearm, in violation of 
    18 U.S.C. § 922
    (g)(1).         He was sentenced
    to 70 months.
    II.
    Defendants initially contend that various pieces of evidence
    should have been suppressed at trial, because they were obtained in
    9
    violation of either statutory or constitutional provisions.          We
    find no merit in these arguments.
    A.
    Nicholson, Sr. argues that the government failed to satisfy
    the statutory “exhaustion” requirement for obtaining wiretaps. See
    
    18 U.S.C. § 2518
    (1)(c), (3)(c).         “Prior to granting an order
    authorizing a wiretap, the issuing judge must find, in addition to
    probable cause, that ‘normal investigative procedures have been
    tried and have failed or reasonably appear to be unlikely to
    succeed if tried or to be too dangerous.’”            United States v.
    Oriakhi, 
    57 F.3d 1290
    , 1298 (4th Cir. 1995) (quoting 
    18 U.S.C. § 2518
    (3)(c)).   The government’s burden in making this showing “is
    not great,” and we owe “considerable deference to the district
    court’s   determination   that   exhaustion   has   been   shown.”   
    Id.
    (internal quotation marks omitted).
    The government’s affidavits in support of the wiretaps were
    drafted in some detail, and satisfied its burden under 
    18 U.S.C. § 2518
    .   The affidavits illustrated that law enforcement officers
    had utilized several traditional methods of investigation prior to
    requesting the wiretaps.    The officers had, for example, examined
    telephone records, employed several confidential informants and an
    undercover officer, and engaged in trash searches and physical
    surveillance.    Yet through all these investigative techniques, the
    10
    officers were not able to uncover the full scope of the drug
    conspiracy.      The affidavits detailed the limitations of each
    investigative technique attempted thus far.             As a result, the
    affiant claimed wiretaps were necessary. The issuing judge agreed,
    and we affirm.
    B.
    Nicholson, Sr. also asserts that the search of his Palmer Park
    home on June 12, 2003 violated the Fourth Amendment, because the
    search warrant was improperly based on information obtained from
    unlawful   wiretaps.    But   this    argument   is    foreclosed   by   our
    conclusion that the wiretaps were proper.         And even disregarding
    the evidence obtained through wiretaps, the affidavit in support of
    the search warrant still presented overwhelming evidence that drug
    distribution was taking place at the home.            See United States v.
    Wright, 
    991 F.2d 1182
    , 1186 (4th Cir. 1993) (“The inclusion of
    tainted evidence does not invalidate a search warrant if enough
    untainted evidence supports it.”).        Confidential informants had,
    for example, repeatedly visited the Palmer Park home to purchase
    drugs from Nicholson, Jr.     There is thus no basis to suppress the
    evidence gathered from the search.
    11
    C.
    Nicholson, Jr. contends that the contraband recovered from his
    Dodge pickup -- including the RF detector -- should have been
    suppressed, because the police did not have a warrant to search the
    truck.     We disagree.    A warrant is not required to search an
    automobile if it “is readily mobile and probable cause exists to
    believe it contains contraband.”         United States v. Brookins, 
    345 F.3d 231
    , 238 (4th Cir. 2003) (internal quotation marks omitted);
    see also Maryland v. Dyson, 
    527 U.S. 465
    , 466-67 (1999) (per
    curiam) (noting that there is “no separate exigency requirement”).
    These conditions are met here.     Nicholson, Jr.’s truck was mobile,
    and officers had repeatedly witnessed him taking the truck to meet
    with other coconspirators before they seized it.            The contraband
    obtained from the truck was, therefore, properly admitted at trial.
    D.
    Ms.    Nicholson   alleges   that   the   statements    she   made   to
    Detective Hallinger during the search of her Palmer Park home on
    June 12, 2003 should have been suppressed because she was not given
    Miranda warnings. Her contention is mistaken. A defendant’s Fifth
    Amendment Miranda right “relates only to custodial interrogation.”
    McNeil v. Wisconsin, 
    501 U.S. 171
    , 178 (1991).         “A person is ‘in
    custody’ for purposes of Miranda either if the person has been
    arrested or if his freedom of action has been curtailed to a degree
    12
    associated with arrest.”     United States v. Sullivan, 
    138 F.3d 126
    ,
    130 (4th Cir. 1998).    Whether someone is in custody is an objective
    determination based on the totality of the circumstances and on
    “how a reasonable man would have understood the suspect’s position
    at the time.”    United States v. Parker, 
    262 F.3d 415
    , 419 (4th Cir.
    2001).
    In this case, Ms. Nicholson was not restrained to a degree
    associated with arrest.      Detective Hallinger expressly stated to
    her that she was not under arrest and that she was not being
    charged with a crime.    She was questioned in her home, and was not
    handcuffed.     Indeed, she was allowed to go outside to smoke a
    cigarette     during   the   questioning.       Based   on   all   these
    circumstances, we cannot conclude that Ms. Nicholson was in custody
    when Hallinger spoke with her, and Miranda warnings were thus not
    required.     See Parker, 
    262 F.3d at 419
     (defendant not in custody
    when she was told she was not under arrest, was questioned in her
    home, was not handcuffed or otherwise restrained, and was never
    told she was not free to leave).         The district court, therefore,
    properly admitted her statements.
    III.
    Ms. Nicholson also alleges that the district court erred in
    not severing her trial from that of the other defendants.            We
    review a district court’s decision to deny a motion to sever for
    13
    abuse of discretion.       United States v. Rivera, 
    412 F.3d 562
    , 571
    (4th Cir. 2005).    “Generally, individuals indicted together should
    be tried together.”       
    Id.
     (internal quotation marks omitted).             To
    prove   a   district     court   abused     its   discretion,    therefore,   a
    defendant must show prejudice resulted from the refusal.                See 
    id.
    A   district   court’s    cautionary      instruction   can     help   alleviate
    potential prejudice, see United States v. Johnson, 
    219 F.3d 349
    ,
    357 (4th Cir. 2000), and “[c]onvictions should be sustained if it
    may be inferred from the verdicts that the jury meticulously sifted
    the evidence,” Rivera, 
    412 F.3d at 571
     (internal quotation marks
    omitted).
    In the instant case, the district court instructed the jury
    that the case against each defendant must be based on the evidence
    against that defendant, and that the jury’s verdict as to one
    defendant did not control as to the guilt or innocence of another
    defendant.     It is clear, moreover, that the jury carefully sifted
    the evidence, as it convicted Ms. Nicholson on one count, but
    acquitted her on two others on which one or more co-defendants were
    convicted.     It, for example, acquitted her on the count of making
    available her Palmer Park home for drug distribution, but convicted
    her husband.     We, therefore, find no basis to conclude that the
    district court abused its discretion here.
    14
    IV.
    Ms.    Nicholson    next   challenges   the    district   court’s    jury
    instructions. We review a district court’s decision whether or not
    to give a jury instruction for abuse of discretion.              See United
    States v. Abbas, 
    74 F.3d 506
    , 513 (4th Cir. 1996).              We conclude
    that the district court did not abuse its discretion in its jury
    instructions.
    A.
    Ms. Nicholson first suggests that the district court gave an
    inappropriate “willful blindness” jury instruction regarding the
    money laundering charge for her involvement in the purchase of the
    Waldorf home.    The district court instructed the jury that:
    You may infer that a defendant acted knowingly from
    circumstantial evidence or from proof that a defendant
    deliberately closed his eyes to what would otherwise have
    been obvious to him.
    Stated another way, a defendant’s knowledge of a
    fact may be inferred from willful blindness to the
    existence of that fact. Willful blindness exists when a
    defendant whose suspicion has been aroused deliberately
    fails to make further inquiries.     If you find that a
    defendant had a strong suspicion that someone withheld
    important facts, yet shut his eyes for fear of what he
    would learn, you may conclude that he acted knowingly.
    It also instructed the jury, in addition, that a person cannot act
    knowingly     “because     of    ignorance,        mistake,    accident    or
    carelessness.” As relevant here, to convict Ms. Nicholson of money
    laundering under 
    18 U.S.C. § 1956
    (a)(1)(B)(I), the government had
    to show that she had knowledge: “(1) that the funds involved in the
    15
    transaction were the proceeds of illegal activity; and (2) that the
    transaction was designed to conceal the nature of the proceeds.”
    United States v. Campbell, 
    977 F.2d 854
    , 857 (4th Cir. 1992).
    Although     we   have     indicated   that   a   willful   blindness
    instruction should be given sparingly, see United States v. Ruhe,
    
    191 F.3d 376
    , 385 (4th Cir. 1999), we have repeatedly upheld the
    use of such an instruction.        See United States v. Guay, 
    108 F.3d 545
    , 551 (4th Cir. 1997); United States v. Withers, 
    100 F.3d 1142
    ,
    1145 (4th Cir. 1996).         And we have done so specifically in the
    money laundering context.        See United States v. Collins, 
    372 F.3d 629
    , 634 (4th Cir. 2004) (citing Campbell, 
    977 F.2d at 857-59
    ).
    The “instruction is appropriate when the defendant asserts a lack
    of guilty knowledge but the evidence supports an inference of
    deliberate ignorance.”        Guay, 
    108 F.3d at 551
     (internal quotation
    marks omitted). In determining whether the instruction was proper,
    “we consider the evidence and any reasonable inferences in the
    light   most   favorable   to    the   government.”    United    States   v.
    Whittington, 
    26 F.3d 456
    , 463 n.6 (4th Cir. 1994).
    In this case, Ms. Nicholson’s defense to the money laundering
    charge was that she lacked the requisite knowledge.          We find that
    the evidence was sufficient to support an inference of deliberate
    ignorance.     A large portion of Nicholson, Jr.’s drug transactions,
    which dated back to the 1980s, took place in Ms. Nicholson’s Palmer
    Park home.     Testimony also showed that she was sometimes in the
    16
    house when individuals came to engage in drug transactions.              And
    law enforcement officers had conducted a search of her Palmer Park
    home in 1995 pursuant to a valid search warrant in which crack,
    PCP, marijuana, and a scale all were found.            In addition, she told
    Detective Hallinger that she did not even know whether her son was
    employed.   Yet Nicholson, Jr. was able to make a large payment on
    the   Waldorf   home,   and   had   expensive   cars    and   jewelry.   Ms.
    Nicholson also failed to mention the fact that she had signed the
    papers for the Waldorf home when Detective Hallinger questioned her
    about it.       She withheld this information even though she had
    benefited from the transaction, which allowed her to deduct the
    mortgage interest from her taxable income for several years.
    Although there may have been some evidence to the contrary,
    there was sufficient evidence from which the jury could reasonably
    infer that Ms. Nicholson was, to say the least, deliberately
    ignorant of the illegal nature of her son’s assets.           The jury could
    likewise infer that there would be little reason -- other than to
    obfuscate the source of the funding -- for her to act as the
    nominal purchaser of the Waldorf home.          Although the seller of the
    Waldorf home may have been aware that Nicholson, Jr. was behind the
    purchase, evidence supports the conclusion that Ms. Nicholson’s
    role was to keep this information from government authorities, and
    that she was deliberately ignorant of this fact.
    17
    The   district   court,   moreover,   gave   an   instruction   that
    knowledge cannot be based on mistake or accident. This instruction
    goes a long way to reducing the risk that the jury might find
    knowledge based only on Ms. Nicholson’s negligent failure to
    discover that drug money was the source of the home purchase.        See
    Withers, 
    100 F.3d at 1145
    .     For these reasons, the district court
    did not abuse its discretion in giving the willful blindness
    instruction.
    B.
    Ms. Nicholson also contends that the district court improperly
    failed to advise the jury that good faith was “an absolute defense”
    to the money laundering charge.        Her argument is mistaken.      The
    district court did not have to give this good faith instruction,
    because it properly informed the jury on the knowledge requirements
    of the money laundering offense.      See United States v. Fowler, 
    932 F.2d 306
    , 317 (4th Cir. 1991) (refusing to require separate good
    faith instruction if instruction on specific intent is adequate).
    V.
    Ms. Nicholson next asserts that the district court abused its
    discretion in refusing to grant her a new trial, because the
    government’s evidence at trial was much broader than the money
    laundering charge in the indictment.       Specifically, she contends
    18
    that   the    government    improperly       introduced     evidence    that   she
    committed mortgage and tax fraud.             We cannot agree.         It is true
    that the Fifth Amendment grand jury trial right is violated when a
    defendant is convicted of an offense that was beyond the charges in
    an indictment.        See United States v. Randall, 
    171 F.3d 195
    , 203
    (4th Cir. 1999).       But in this case the evidence that Ms. Nicholson
    might have lied on her loan application for the Waldorf home, and
    that she took mortgage interest deductions in her tax returns from
    this home was used to prove the knowledge element of the money
    laundering count, which was clearly charged in the indictment. The
    district court, therefore, did not abuse its discretion in refusing
    to grant a new trial.
    VI.
    All four defendants further claim that the district court
    erred in not granting their motions for judgment of acquittal,
    because      their    convictions    were    not   supported    by     sufficient
    evidence. “A defendant challenging the sufficiency of the evidence
    to support a conviction must overcome a heavy burden.”                     United
    States v. Hamlin, 
    319 F.3d 666
    , 672 (4th Cir. 2003) (internal
    quotation     marks    omitted).      “[V]iewing      the   evidence     and   the
    reasonable inferences to be drawn therefrom in the light most
    favorable to the Government,” we must sustain the conviction if
    “the   evidence       adduced   at   trial    could   support    any     rational
    19
    determination of guilty beyond a reasonable doubt.”    United States
    v. Burgos, 
    94 F.3d 849
    , 863 (4th Cir. 1996) (en banc) (internal
    quotation marks omitted). We have reviewed each of the defendants’
    claims with care, and find there to be sufficient evidence to
    support all the convictions.
    VII.
    Lastly, Nicholson, Jr. claims that sentencing him under the
    mandatory Sentencing Guidelines violated United States v. Booker,
    
    125 S. Ct. 738
     (2005).   His argument is misplaced, because his life
    term was based not on the Guidelines but instead on a statutory
    mandatory minimum.   See 
    21 U.S.C. § 841
    (b)(1)(A).       “Booker did
    nothing to alter the rule that judges cannot depart below a
    statutorily provided minimum sentence.” United States v. Robinson,
    
    404 F.3d 850
    , 862 (4th Cir. 2005).     While one of the prerequisites
    for the mandatory minimum was a finding that Nicholson, Jr. had
    committed two prior drug felonies, Booker does not preclude proper
    judicial determination of prior convictions.     See United States v.
    Cheek, 
    415 F.3d 349
    , 352-53 (4th Cir. 2005).      The district court
    thus did not err in applying the mandatory minimum sentence in
    § 841(b)(1)(A).
    20
    VIII.
    For the foregoing reasons, the convictions and sentences of
    all defendants are
    AFFIRMED.
    21
    MICHAEL, Circuit Judge, concurring in part and concurring in the
    judgment:
    Spending money is legal.    Laundering money by concealing
    is not.   The line between these two categories of commercial
    transactions is sometimes blurry.       That line can become even
    blurrier in a money laundering prosecution when the government
    obtains the (rarely used) willful blindness instruction.     A jury
    following the instruction may infer from circumstantial evidence
    the defendant’s deliberate ignorance of the transaction’s criminal
    aspect, which in turn allows the jury to infer guilty knowledge.
    The potentially slippery combination of the willful blindness
    instruction and a concealment money laundering charge cannot be
    permitted to eviscerate the defendant’s right to be convicted only
    upon proof beyond a reasonable doubt.     Thus, when the government
    considers requesting a willful blindness instruction, it (and the
    district court if the request is made) must be especially careful
    in examining   the evidence that might support such an instruction.
    While I believe that the government fell demonstrably
    short here in its duty to examine, I ultimately conclude that the
    record provided the bare minimum for allowing the willful blindness
    instruction in the concealment money laundering prosecution of
    Gladys Payne Nicholson.   I emphasize, however, that the evidence
    supporting the instruction was far weaker than the government would
    have us believe.   For these reasons, I am unable to join part IV.A
    22
    of the court’s opinion, although I concur in the judgment as to
    that part.   I otherwise concur.
    I.
    According to the trial evidence, defendant Ms. Nicholson
    resided at a modest home in Palmer Park, Maryland, with her
    husband, defendant Marshall Nicholson Sr.            Their son, defendant
    Marshall Nicholson Jr., often engaged in drug sales at the family
    home, and Nicholson Sr. facilitated or even conducted some of these
    sales.   In 1995 Ms. Nicholson posted bond for her son after he was
    arrested on state drug charges; the authorities later recovered
    receipts from that bond transaction in a search of the home.            Ms.
    Nicholson was never a party to any drug sales, and there was no
    evidence that she ever witnessed such sales.
    The   concealment   money    laundering    count   against   Ms.
    Nicholson stems from her role in the purchase of a house at 3220
    Dunbratton Court in Waldorf, Maryland.        Nicholson Jr. eventually
    lived in the house.    The transaction closed on September 9, 1999.
    Although the house had a price tag of $500,000 as reported on the
    mortgage documents, the seller, Raymond F. Procopio Builders, Inc.,
    actually accepted a lower price.        At closing Ms. Nicholson paid
    $23,669.     A lender, Equicredit Corporation of Maryland, paid
    $340,726, and it was Ms. Nicholson who borrowed this money from
    Equicredit by signing appropriate loan documents.             The builder
    23
    retained a deposit of $25,000.     It appears that the cash sum of
    $7,905 was used at the closing.        The origin of this cash is not
    clear; the seller’s representative, Raymond F. Procopio, testified
    that no cash changed hands at closing.     Nicholson Jr. later told an
    associate that he put down $100,000 toward the purchase of the
    house.
    Ms. Nicholson, who worked for the U.S. Department of
    Health and Human Services, earned as much as $62,000 a year in
    wages until her retirement in 2000; thereafter her income was about
    $45,000 a year.     (Nicholson Sr., who was wheelchair bound, had
    negligible income other than social security.)        Ms. Nicholson’s
    ordinary income after taxes was thus not enough to pay the monthly
    mortgage installments on the Dunbratton Court house. Nicholson Jr.
    must have paid the mortgage, but his only apparent source of
    legitimate income was a car washing and detailing service that he
    operated.
    On June 12, 2003, while law enforcement executed a search
    warrant at the family home, Prince George’s County Police Detective
    Dennis Hallinger asked Ms. Nicholson several questions about her
    ownership of property.      Asked whether she had her name on any
    property other than her home, Ms. Nicholson indicated that she was
    record owner of the house in which her daughter-in-law Cheryl
    Nicholson resided, but that Cheryl paid the mortgage on that house.
    Hallinger testified that he then asked Ms. Nicholson, “Do you own
    24
    any other property that you just put in your name for someone else
    like you did for Cheryl?.”     She said she did not.
    II.
    A.
    Count Twelve of the indictment (the sole count upon which
    the jury convicted Ms. Nicholson) charged that Ms. Nicholson
    violated   the   concealment   money    laundering   statute,   
    18 U.S.C. § 1956
    (a)(1)(B)(I), when she bought the Dunbratton Court house. To
    obtain a conviction under § 1956(a)(1)(B)(I) the government must
    prove that
    (1) the defendant conducted or attempted to conduct a
    financial transaction having at least a de minimis effect
    on interstate commerce . . .; (2) the property that was
    the subject of the transaction involved the proceeds of
    specified unlawful activity; (3) the defendant knew that
    the property involved represented the proceeds of some
    form of unlawful activity; and (4) the defendant knew
    that the transaction was designed in whole or part, to
    conceal or disguise the nature, the location, the source,
    the ownership, or the control of the proceeds of the
    unlawful activity.
    United States v. Wilkinson, 
    137 F.3d 214
    , 221 (4th Cir. 1998)
    (citation omitted). The first two elements are undisputed here but
    the second two are; each disputed element requires a knowing
    mindset.     The elements thus require that Ms. Nicholson knew (1)
    that buying the house involved proceeds from Nicholson Jr.’s drug
    distribution, and (2) that buying the house was a transaction that
    25
    at least partially was designed to conceal or disguise those
    proceeds.
    “[W]hen the defendant asserts a lack of guilty knowledge
    but the evidence supports an inference of deliberate ignorance,”
    the court may instruct the jury on willful blindness.                          United
    States v. Ruhe, 
    191 F.3d 376
    , 384 (4th Cir. 1999).                The instruction
    allows the defendant’s deliberate ignorance of a fact to be treated
    as   knowledge    of    that   fact,   and    the    government    may    establish
    deliberate ignorance by offering circumstantial evidence.                        “The
    record need not contain direct evidence . . . that the defendant
    deliberately avoided knowledge of wrongdoing; all that is necessary
    is evidence from which the jury could infer deliberate avoidance of
    knowledge.”      United States v. Whittington, 
    26 F.3d 456
    , 463 (4th
    Cir. 1994).      In evaluating the propriety of the willful blindness
    instruction,      “we    consider      the    evidence    and     any    reasonable
    inferences in the light most favorable to the government.”                     
    Id.
     at
    463 n.6.
    We have cautioned district courts, however, that “the
    deliberate     blindness       instruction      is     only     proper    in    rare
    circumstances.”        Ruhe, 
    191 F.3d at 385
    .        And although the majority
    correctly notes, ante at [16], that we have allowed juries in money
    laundering cases to receive the willful blindness instruction,
    United States v. Collins, 
    372 F.3d 629
    , 634 (4th Cir. 2004), United
    States v. Campbell, 
    977 F.2d 854
    , 858-59 (4th Cir. 1992), careful
    26
    examination shows that those cases are not easily squared with this
    one.
    B.
    In   Collins     one   of    the    defendants   helped    finance
    burglaries and regularly served as a “fence” who bought stolen
    goods with cash and checks; the other assisted with the burglaries
    and received part of his share of the ill-gotten gains through
    seemingly legitimate payments on his credit card debt.               Collins,
    
    372 F.3d at 631-32
    .    The defendants thus played important, direct
    roles in the illegal activity that generated the profits they then
    helped to conceal.    By contrast Ms. Nicholson was neither a direct
    participant in nor a direct observer of any drug sale.               She also
    did not derive any direct profit from any such sale.
    The defendant in Campbell was a licensed realtor who,
    after spending a good deal of time with the buyer (a drug dealer),
    relayed to the sellers the buyer’s proposal to pay $60,000 in cash
    under   the   table   and   lower      the    contract   price   accordingly.
    Campbell, 
    977 F.2d at 855-56
    .          By contrast Ms. Nicholson, a long-
    time federal government employee, was not in the business of buying
    and selling real estate.          As a result, although the government
    stressed that there were numerous irregularities in the documents
    Ms. Nicholson signed when she bought the Dunbratton Court house,
    and that the reported sales price of the house exceeded the price
    27
    actually paid, this evidence is of little force.                      Ms. Nicholson,
    who was not a realtor by trade, may well have been unaware of the
    significance of these irregularities.              In addition, while Campbell
    involved a huge cash payment that should have by itself been a red
    flag for the realtor that something was amiss, less than $8,000 in
    cash   was    tendered    at     the     closing    in     which      Ms.   Nicholson
    participated.        This amount was not so large that it should have
    aroused Ms. Nicholson’s suspicions as to the source of that cash.
    Finally, the defendant in Campbell did not challenge the
    propriety of the willful blindness instruction.                   See Campbell, 
    977 F.2d at 857
       (“Neither     party    disputes       the    adequacy    of   these
    instructions on willful blindness or their applicability to this
    case.”) (emphasis added).         That obviously limits Campbell’s value
    as a precedent because Ms. Nicholson disputes the use of the
    instruction in her case.
    III.
    Other    circuits    have     recognized          that   fact-intensive
    inquiry is particularly important in concealment money laundering
    cases, such as this one, which are quite different from the
    traditional example of money laundering.             “In [money laundering’s]
    classic form, the money launderer folds ill-gotten funds into the
    receipts of a legitimate business, such as a restaurant or a
    concert ticket service (two common destinations).                     The variations,
    28
    however,   are       endless,    and    it   can    be     difficult   to    categorize
    transactions that deviate from the paradigm.”                       United States v.
    Esterman, 
    324 F.3d 565
    , 570 (7th Cir. 2003).                    It is essential for
    us,    “even    if    difficult    at    times,      to    ensure   that     the    money
    laundering statute not turn into a ‘money spending statute.’”                         
    Id. at 573
     (quoting United States v. Sanders, 
    929 F.2d 1466
    , 1472 (10th
    Cir. 1991).       Where, as here, the willful blindness instruction is
    applied to the concealment money laundering statute’s requirement
    that there be knowledge with respect to two distinct elements of
    the crime, our evaluation of the asserted basis for the instruction
    must be especially thorough and exacting.
    A.
    This evaluation reveals that a good deal of evidence the
    government points to as supporting the money laundering count is
    less   pertinent      to   the    critical        mental    state   issues    than   the
    government asserts.          I begin with the evidence concerning drug
    deals that occurred years after Ms. Nicholson bought the Dunbratton
    Court house.         This evidence is of negligible value in drawing
    inferences about Ms. Nicholson’s awareness of any illegal activity
    by Nicholson Jr. before she bought the house.                       For example, the
    government emphasizes the conversation recorded in January 2003
    between    witness      Kenneth        Pickens      and    Nicholson    Jr.    at     Ms.
    Nicholson’s home.          Ms. Nicholson was present in the room when
    29
    Pickens and Nicholson Jr. were talking; the conversation led to a
    drug deal that day between the men.   Nevertheless, this evidence
    has little logical relevance to Ms. Nicholson’s knowledge of her
    son’s drug dealing when she bought the Dunbratton Court house in
    1999, because a criminal conviction requires a defendant to have
    the requisite guilty mind at the same instant the defendant is
    performing the bad act prohibited by statute.     “[I]t is a basic
    premise of Anglo-American criminal law that the physical conduct
    and the state of mind must concur.”   United States v. McDougald,
    
    990 F.2d 259
    , 263 (6th Cir. 1993) (quoting W. Lafave & A. Scott,
    Criminal Law § 3.11, at 268 (2d ed. 1986)).   Even if Ms. Nicholson
    realized in January 2003 that Nicholson Jr. was selling drugs and
    that he arranged to have her buy the house in her name to conceal
    his drug profits by making mortgage payments with them, she would
    not have been guilty of concealment money laundering because she
    would not have possessed the required mindset when she bought the
    house in September 1999.
    In addition, witness testimony that Nicholson Jr. sold
    drugs out of the parental home “since the early 1980s,” Appellee’s
    Br. at 52, does nothing to establish Ms. Nicholson’s deliberate
    ignorance of those drug sales absent some other evidence that Ms.
    Nicholson could have perceived the transactions as they were taking
    place.   Since she worked during the day, she simply may not have
    been home when the drug sales occurred.   That her husband and son
    30
    were drug dealers and that she lived in proximity to them cannot be
    enough to rationally impute knowledge of the dealing or even
    deliberate ignorance of the dealing to her.                  “[M]ere association
    with those implicated in an unlawful undertaking is not enough to
    prove knowing involvement.”           McDougald, 
    990 F.2d at 262
     (quoting
    United States v. Nusraty, 
    867 F.2d 759
    , 764 (2d Cir. 1989)).
    Finally, the government exaggerates the import of Ms.
    Nicholson’s answers to Detective Hallinger’s questions on June 12,
    2003.    Ms. Nicholson never told the detective, for example, that
    the house was held in Nicholson Jr.’s name rather than her name, or
    that she paid the mortgage even though Nicholson Jr. apparently
    did.           We      distinguish       such     affirmative          exculpatory
    misrepresentations from denials of guilt.               “While general denials
    of    guilt    later   contradicted      are    not    considered      exculpatory
    statements, any other exculpatory statement which is contradicted
    by evidence at trial” permits the jury to infer consciousness of
    guilt   from    the    demonstrably    false    alibi.        United    States   v.
    McDougald, 
    650 F.2d 532
    , 533 (4th Cir. 1981) (per curiam).                       Ms.
    Nicholson’s answers are properly classified as denials of guilt,
    not as false exculpatory statements.                  In addition, since the
    government’s theory of the concealment money laundering count is
    essentially that Nicholson Jr. used Ms. Nicholson as a straw buyer
    for    the    house,   Ms.   Nicholson    would       only   have   advanced     the
    transaction’s concealment purpose by holding herself out as the
    31
    true owner of the house.        By tending to deny such ownership, Ms.
    Nicholson reduced her effectiveness as a straw buyer.           Thus, Ms.
    Nicholson’s responses to the detective do not rationally support
    the government’s theory.
    B.
    I now turn to the evidence that rationally supports an
    inference that Ms. Nicholson deliberately ignored (1) the source of
    the money Nicholson Jr. contributed to the house purchase, and (2)
    the design of the purchase as a concealing transaction.          As to the
    first element, Ms. Nicholson posted bond for her son when state
    police arrested him on drug charges in 1995.             The jury could
    logically conclude that she knew of his drug dealing in 1995, and
    that when participating in the house deal in 1999 she deliberately
    ignored the illegal source of her son’s money (which he needed to
    pay off the $340,726 loan taken out to pay for the house).
    As to the second element, the government’s evidence
    established   a   significant    discrepancy   between   Ms.   Nicholson’s
    annual income as reported on her tax return in 1998 (in particular,
    $58,238 in wages plus $3,065 deferred into her retirement fund) on
    the one hand, and the amount of money ($340,726) borrowed from
    Equicredit to buy the house in 1999 on the other hand.           The jury
    was entitled to conclude from this discrepancy (and from the bond
    posting in 1995) that Ms. Nicholson knew in 1999 that she could not
    32
    have afforded to buy the house herself and that her son could not
    have afforded the house either -- unless he paid with illicit funds
    that he wanted to conceal.
    The only legal income Nicholson Jr. had was from a car
    detailing business, and the jury could have relied on common sense
    in concluding that the business simply would not have generated the
    amount of money Nicholson Jr. needed each month to pay off the
    mortgage.    Conversely, if the discrepancy between any legitimate
    income source and the value of the house had been very small, it
    would have been far more likely that Ms. Nicholson was simply
    negligent -- but not deliberately ignorant -- of the transaction’s
    concealment aspect.        The bond posting and the income-mortgage
    discrepancy are not strong pieces of evidence, but we must view
    them in the light most favorable to the government.        Whittington,
    
    26 F.3d at
    463 n.6.       In that light there was enough evidence that
    Ms. Nicholson was deliberately ignorant to allow the jury to
    receive   the   willful    blindness    instruction.   Accordingly,   the
    majority is correct in denying Ms. Nicholson a new trial and
    affirming her conviction.
    IV.
    This case is unusual in that it involves a concealment
    money laundering prosecution not of Nicholson Jr., the principal,
    but of Ms. Nicholson, the third party nominee in the Dunbratton
    33
    Court house purchase.       The willful blindness instruction allowed
    the jury to infer her guilty knowledge as to two distinct elements
    of the concealment money laundering statute.           The basis for the
    instruction was ultimately adequate, but I have explained why it
    was not nearly as substantial as the government’s brief indicates.
    I trust that the government will take care in the future to make a
    thorough   and   exacting    inquiry   before   it   requests   a   willful
    blindness instruction in any case, especially a money laundering
    case.   Any failure to do that would disrespect our warning that the
    instruction “is only proper in rare circumstances.” Ruhe, 
    191 F.3d at 385
    .
    34
    

Document Info

Docket Number: 04-4794, 04-4941, 04-4980, 05-4004

Citation Numbers: 176 F. App'x 386

Judges: Wilkinson, Luttig, Michael

Filed Date: 4/18/2006

Precedential Status: Non-Precedential

Modified Date: 11/5/2024

Authorities (25)

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United States v. Gary Esterman , 324 F.3d 565 ( 2003 )

United States v. Renee Withers, United States of America v. ... , 100 F.3d 1142 ( 1996 )

United States v. Mohammad Dawood Nusraty , 867 F.2d 759 ( 1989 )

United States v. Kymberli Parker , 262 F.3d 415 ( 2001 )

McNeil v. Wisconsin , 111 S. Ct. 2204 ( 1991 )

United States v. Shaheem Johnson, United States of America ... , 219 F.3d 349 ( 2000 )

United States v. Ellen Campbell, A/K/A Ellen Campbell Fremin , 977 F.2d 854 ( 1992 )

United States v. Claude Joseph Guay, United States of ... , 108 F.3d 545 ( 1997 )

United States v. Richard Lee Fowler , 932 F.2d 306 ( 1991 )

United States v. Thomas A. Wilkinson, Iii, United States of ... , 137 F.3d 214 ( 1998 )

United States v. Robert Ruhe , 191 F.3d 376 ( 1999 )

united-states-v-jim-whittington-united-states-of-america-v-daniel , 26 F.3d 456 ( 1994 )

United States v. Frank Kahled Burgos, United States of ... , 94 F.3d 849 ( 1996 )

United States v. Dion R. Hamlin, United States of America v.... , 319 F.3d 666 ( 2003 )

United States v. Renee Armstrong Sanders , 929 F.2d 1466 ( 1991 )

united-states-v-john-mark-collins-united-states-of-america-v-robert , 372 F.3d 629 ( 2004 )

United States v. Ronald Lee Brookins , 345 F.3d 231 ( 2003 )

United States v. Arlin Ernest Wright, Jr. , 991 F.2d 1182 ( 1993 )

United States v. Ray Anthony McDougald , 650 F.2d 532 ( 1981 )

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