United States v. Hemmingson ( 1998 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_______________
No. 97-30552
_______________
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
VERSUS
JOHN J. HEMMINGSON
and
ALVAREZ T. FERROUILLET, JR.,
Defendants-Appellants.
* * * * * * * * * * * * * * * * * * * * * * *
_______________
No. 97-30598
_______________
UNITED STATES OF AMERICA,
Plaintiff-Appellant,
VERSUS
JOHN J. HEMMINGSON
and
ALVAREZ T. FERROUILLET, JR.,
Defendants-Appellees.
_________________________
Appeals from the United States District Court
for the Eastern District of Louisiana
_________________________
September 30, 1998
Before JOLLY, SMITH, and BARKSDALE, Circuit Judges.
JERRY E. SMITH, Circuit Judge:
John Hemmingson and Alvarez Ferrouillet, Jr., challenge their
convictions of money-laundering; Ferrouillet also challenges his
sentence. The government, through the Office of the Independent
Counsel, appeals the sentences. We affirm.
I.
The origin of this case lies in the ashes of Henry Espy's
failed campaign for Congress. In the spring of 1993, Espy, the
Mayor of Clarksdale, Mississippi, and president of the National
Conference of Black Mayors (“NCBM”), was a defeated and indebted
candidate. He had sought the Mississippi congressional seat
vacated by his brother Michael when the latter became Secretary of
Agriculture, but he succeeded only in running up a large campaign
debt.
Ferrouillet is a New Orleans attorney who had met Henry Espy
the previous year and served as chairman of the Espy for Congress
campaign. In addition to his lawyerly work, Ferrouillet
moonlighted as an insurance broker, managing his own company,
Municipal Healthcare Cooperative. He also acted as the NCBM's
representative on health care issues and had helped broker deals
between municipalities and health insurance companies.
Ferrouillet offered to help Espy pay off his campaign debt and
worked with the unsuccessful candidate to obtain a $75,000 loan
2
from a Mississippi bank, then guaranteed the loan on behalf of his
law firm, Ferrouillet & Ferrouillet. The campaign proved unable to
repay the loan, nor could Ferrouillet come up with the money
himself. The loan came due on June 15, but Ferrouillet sought and
received an extension to September 30; the deadline was once again
pushed back, at his request, to December 31. As the new year
dawned and Ferrouillet failed to repay the loan, the bank referred
the matter to its attorneys for collection.
In March 1994, Henry Espy held a reception at a private club
in Washington, D.C., in hopes of retiring his debt. The event was
sparsely attended: Only about twelve potential contributors
showed. Present, however, was HemmingsonSSthe president and CEO of
Crop Growers, a holding company for several crop insurance firms.
At the time of the fundraiser, Congress had begun considering
proposals for crop insurance reform, and Crop Growers had openly
acknowledged, in its public disclosure forms, the government's
power over this heavily-regulated industry.
That evening, Espy asked Hemmingson and the other attendees to
raise $10,000 each; he later sent Hemmingson a thank-you letter
“for the immediate and much needed assistance you pledged in
helping me retire my congressional campaign debt. Friends who come
to the aide [sic] of friends are never forgotten.” The fundraiser
proved a failureSSit raised only $10,000, and Ferrouillet labeled
it an “absolute disaster”SSbut he was able to secure yet another
extension from the bank. Under the new agreement, Ferrouillet
would pay off the loan through four monthly post-dated checks
3
beginning in June.
Ferrouillet and Hemmingson met for the first time at Espy's
fundraiser. On June 30, they entered into a contract, prepared by
Ferrouillet, under which Ferrouillet would act as “Special
Corporate Counsel in connection with the development of a
comprehensive healthcare plan which [Crop Growers] might co-
sponsor, along with [Ferrouillet's business] Municipal Healthcare
Cooperative, Inc., for presentation to and implementation within
the membership of the National Conference of Black Mayors.”
Hemmingson then prepared a $20,000 check drawn on a Crop Growers
Insurance account and made payable to “Alvarez T. Ferrouillet, Jr.,
Attorney at Law.” He signed the check and mailed it to Ferrouillet
in Louisiana.
The contract provided that Ferrouillet would be given the
$20,000 as a “retainer” from which he would periodically draw
$1,000 as his monthly fee. In exchange, he would help develop Crop
Growers's nascent health insurance business by securing NCBM's
endorsement. The agreement, which is largely boilerplate and
hardly a model of artful drafting, further provided that “[t]he
details of our services and the amount of our fees will be provided
to you on computer generated statements monthly as our services are
rendered . . . . It is very important to maintain close
communications.”
At the end of July, Ferrouillet cashed the Crop Growers check
at Evergreen Supermarket, a neighborhood grocery store in
Louisiana. The store's owner, a personal friend of Ferrouillet's,
4
gave the lawyer $5,000 cash on the spot and, after depositing the
check, $15,000 in $100 bills a week later.
Ferrouillet promptly deposited $10,000 in $100 bills into an
Espy for Congress bank account that he had opened earlier that
year; two days later, he deposited $9,000, again in $100 bills. He
then wired $21,000 from the account to the Mississippi bank to be
applied against the loan.
In March 1995, FBI agents contacted Ferrouillet. They were
investigating the Washington fundraiser and asked the lawyer about
the source of his $10,000 deposit. He explained that the money
came from individual donors, then provided the agents with a list
of forty-six and the amounts each contributed. As the agents began
checking the names and realized the list was phony, Ferrouillet's
scheme collapsed.1
II.
After a jury trial, Hemmingson was convicted of interstate
transportation of stolen property (18 U.S.C. § 2314), money-
laundering (18 U.S.C. § 1956(a)(1)(B)(i)), and engaging in a
monetary transaction with criminally derived property (18 U.S.C.
1
An obvious question is why Ferrouillet chose to launder the $20,000
rather than simply deposit the money into his own account and write his own check
to the bank. His answer is that he received a call, at the end of May 1994, from
a Federal Election Commission monitor who had been reviewing Henry Espy's
campaign finance reports. She told him that, under federal election law, a loan
guarantee is the same as a contributionSSso Ferrouillet had violated the law when
he originally guaranteed the loan. Although testimony suggested that his paying
off the illegal loan would not have constituted an additional offense,
Ferrouillet apparently did not realize this. As he paints it, he was trapped:
either break the law again in paying off the loan himself, or default and allow
the bank to attach his personal assets.
5
§ 1957). He was acquitted of a separate § 1957 count. Ferrouillet
was convicted on all counts: interstate transportation of stolen
property (18 U.S.C. § 2314), five counts of money-laundering
(18 U.S.C. § 1956(a)(1)(B)(i) & (ii)), two counts of engaging in a
monetary transaction with criminally derived property (18 U.S.C.
§ 1957), and two counts of making false statements to a federal
agent (18 U.S.C. § 1001). He subsequently pleaded guilty in the
Northern District of Mississippi to one count of conspiracy to make
false statements and defraud the United States (18 U.S.C. § 371)
and five counts of making false statements to a financial
institution (18 U.S.C. § 1014). The Mississippi counts were
consolidated with the Louisiana counts for sentencing.2
The presentence report (“PSR”) stated that the base offense
level of each defendant was 22, resulting in a sentencing range of
41 to 51 months, as each had a criminal history category of 1. The
government objected to the PSR, asking the court to increase
Ferrouillet's offense level by two levels pursuant to U.S.S.G.
§ 3B1.3 for abusing a position of public trust and using a special
skill (his attorney skill) to commit his crimes. The district
court denied the request.
The defendants also objected to the PSR; both requested a
downward departure on the ground that their conduct did not fall
2
The grand jury indicted Hemmingson, Ferrouillet, Municipal Healthcare
Cooperative, Inc., Ferrouillet & Ferrouillet, and Henry Espy on a variety of
counts related to the money-laundering. On motion of Ferrouillet and Espy, the
court transferred some of the counts to the Northern District of Mississippi.
In the end, only Hemmingson and Ferrouillet remained as defendants in Louisiana.
Following his conviction in Louisiana, however, Ferrouillet pleaded guilty to the
transferred counts, which were then returned to Louisiana and consolidated for
sentencing.
6
within the “heartland” of the money-laundering guideline, U.S.S.G.
§ 2S1.1. The district court agreed, granted the downward
departure, and sentenced defendants to one year in a halfway house
pursuant to the more lenient fraud guideline, U.S.S.G. § 2F1.1.
III.
This is a consolidation of two appeals. Defendants argue that
the evidence was insufficient to support their convictions, that
the government's prosecution strategy violated their right to due
process, and that the method of jury selection violated federal law
and the Constitution. Ferrouillet challenges his sentence,
claiming an entitlement to a downward departure on the basis of his
“exceptional” history of charitable deeds and community service.
The government contends that the district court erred in
granting the defendants a downward departure under the “heartland”
theory. The government also says the court erred in refusing to
upwardly adjust Ferrouillet's sentence for abusing his position of
public trust and for his use of special skills in committing his
crimes.
IV.
In determining sufficiency of the evidence, we must decide
whether a rational trier of fact could have found that the evidence
established guilt beyond a reasonable doubt. United States v.
Dupre, 117 F.3d 810, 818 (5th Cir. 1997), cert. denied, 118 S. Ct.
857 (1998). We view all evidence, and any inferences that may be
7
drawn from it, in the light most favorable to the government.
United States v. Sylvester, 143 F.3d 923, 930 (5th Cir. 1998).3
A.
Defendants zero in on Hemmingson's intent and motive in
writing the check to Ferrouillet. Their argument runs as follows:
If Hemmingson did not intend the funds to reach Espy's campaign,
the government's case collapses, because the convictions rest on
the government's having proved that Hemmingson intended to defraud
Crop Growers when drafting the check. The defendants reason that
if Hemmingson acted honestlySSand was simply victimized by
FerrouilletSSneither defendant, as required under the statutes,
trafficked in “criminally derived property” or the “proceeds of
unlawful activity,” because the $20,000 would not have been taken
from Crop Growers through fraud.
The defendants' theory is that Hemmingson wrote the check to
Ferrouillet to secure the attorney's services in an honest, if
ultimately fruitless, business venture. While they concede that
Ferrouillet laundered the check, they argue that Hemmingson was
just an innocent businessman, blind to Ferrouillet's sinister
scheme and unaware of the check's “bizarre fate.” Hemmingson, they
claim, did not know that Ferrouillet had even guaranteed the loan,
let alone that he planned to launder the check to pay it off.
Defendants point to evidence that they say shows Hemmingson
3
The defendants challenge their convictions on each count, with one
exceptionSSFerrouillet does not challenge sufficiency as to his convictions of
making false statements.
8
believed he was engaging in a lawful business deal. They highlight
Ferrouillet's connections to the NCBM and his past success in
winning major insurance contracts for his clients. They also note
Hemmingson's determination to expand Crop Growers's business into
the health insurance market. Given Hemmingson's goals and
Ferrouillet's expertise as a deal maker, it is perfectly
understandable, the defendants say, that Hemmingson would hire
Ferrouillet as a consultant capable of developing new markets for
Crop Growers.
While the argument is plausible, it is undercut by
considerable evidence that Hemmingson intended the check as a
covert, illegal donation to the Espy campaign. The “consulting
contract” between Hemmingson and Ferrouillet appears to have been
a sham. No work was performed on the contract. Aside from the
contract itself, neither side introduced a single document relating
to the purported consultancy or to the health care plan that
Ferrouillet was to help develop and market. Nor could counsel at
oral argument identify any evidence that the consultancy was
legitimate, despite our repeated efforts to elicit a single
example. Evidently, the “close communication” promised in the
contract never materialized.
Moreover, Ferrouillet, an attorney who bills his time, never
entered on his time sheets any work for Crop Growers; his firm
simply had no record that Crop Growers was a client. He never told
his brother, the firm's managing partner, of the engagement.
Finally, despite Ferrouillet's failure to secure the NCBM's
9
endorsement or to produce any sort of work product, Hemmingson
never questioned the lawyer about the work he was ostensibly hired
to perform, nor monitored his performance in any way, nor asked for
his $20,000 backSSeven when Crop Growers's “Life and Health
Division” folded in 1995. In sum, other than the check and the
contract, the defendants introduced no documentary evidence that a
legitimate business relationship existed.
The defendants' counter arguments fall short under our
deferential standard of review. Hemmingson claims that he
regularly cut deals in hugger-mugger fashion and rarely supervised
the performance of outside consultants. He also says that the
unusual manner in which he recorded the payment in Crop Growers's
booksSSas a prepaid legal expense amortized over twenty monthsSSis
further evidence that he had no intent to camouflage the
transaction. These protestations, while plausible, are not enough
to render the verdict irrational.
The government introduced additional evidence which, while not
stemming from the instant transaction, casts light on Hemmingson's
proclivity to use Crop Growers as a vehicle for political
contributions. In early 1993, he solicited twenty-six people to
contribute (in their own or their spouse's names) to Espy's
campaign; these individuals were then reimbursed by Crop Growers.
The payments were disguised in Crop Growers's books as travel
advances, purchases of fixed assets, and the like.
Hemmingson argues that he did not realize this scheme was
illegal, as he was relying on the advice of his accountants. He
10
also insists that this incident cannot be treated as probative of
his intent to defraud Crop Growers, pointing out that a District of
Columbia jury acquitted him of criminal conspiracy charges
resulting from these contributions. But, at a minimum, this
evidence illustrates Hemmingson's desire to support Espy's
political fortunes and his willingness to employ Crop Growers as a
means to this end.
Finally, the government introduced persuasive evidence of
Hemmingson's repeated efforts to influence Michael Espy through his
brother. The jury considered a fax Hemmingson sent to Henry Espy,
asking him to pass along Hemmingson's “thoughts” on crop insurance
reform to his brother. Similarly, on several occasions, Henry Espy
was present when Hemmingson met with Michael Espy to discuss reform
efforts. And the government introduced evidence showing that,
after the earlier episode involving Hemmingson's orchestration of
illegal contributions to the Espy campaign, Hemmingson hired a
“consultant”SSthe immediate past director of the Federal Crop
Insurance CorporationSSto draft a letter to Michael Espy.
The proposed letter, which was ultimately rephrased,
concluded: “Perhaps, at some time in the future, we will be able
to arrange a Mississippi tour for you and Congressman Henry Espy if
our efforts on his behalf are successful (this part has to be
subtle).” This evidence further suggests that Hemmingson sought to
use Henry Espy as a conduit to the Secretary of Agriculture.
The defendants urge us to consider Hemmingson's legitimate,
business-related reasons for writing the check to Ferrouillet. But
11
our task in deciding sufficiency of the evidence is not to choose
between competing interpretations of events. It is simply to
determine whether a rational trier of fact, viewing the evidence in
the light most favorable to the government, could have convicted.
The evidence is easily sufficient.
B.
Hemmingson launches a series of separate challenges to the
sufficiency of the evidence underlying his convictions of money-
laundering (18 U.S.C. §§ 1956(a)(1)(B)(i) and 1957). He claims
that he did not aid and abet the money-laundering. He says he had
no knowledge of Ferrouillet's villainous plan for the check, nor
did he (as required for § 1956 liability) “conceal” or “disguise
the nature” of anything. Finally, he says that he did not engage
in money-laundering, because the check had not yet “attained the
status of proceeds” at the time it was transferred from Ferrouillet
to the grocery store.
Many of Hemmingson's arguments rehash the defendants' general
sufficiency challenge. The gist of his claim is that his
participation in the money-laundering scheme was so removed, and so
speculative, that he cannot be criminally liable.
In United States v. Willey, 57 F.3d 1374 (5th Cir. 1995), we
held that a defendant is liable for aiding and abetting money-
laundering under § 1956(a)(1)(B)(i) when he “associated himself
with the unlawful financial manipulations, [when] he participated
12
in them as something he wished to bring about, and [when] he
sought, by his actions, to make the effort succeed.” Id. at 1383
(quoting United States v. Termini, 992 F.2d 879, 881 (8th Cir.
1993)). Even if Hemmingson lacked knowledge of the nuts and bolts
of Ferrouillet's plan, he had sufficient knowledge of, and
association with, the unlawful conduct to support conviction; the
evidence supported a finding that Hemmingson knew Ferrouillet would
make sure that the Crop Growers money reached the Espy campaign in
such a way as to conceal its origin.
Hemmingson's other arguments are equally meritless. He says
that he never attempted to conceal the funds. The jury, however,
was entitled to conclude, based on his curious accounting
techniques, that he sought to camouflage the transaction. He also
claims, in challenging his § 1957 conviction, that the check never
amounted to “proceeds” as required by the statute. See 18 U.S.C.
§ 1957 (“the term 'criminally derived property' means any property
constituting, or derived from, proceeds obtained from a criminal
offense”). Hemmingson's argument is that the funds from the check,
not the check itself, constituted the “proceeds” of the crime.
If this were so, it would follow that at the time the check
was deposited, it was not yet “proceeds,” and therefore its deposit
could not constitute money-laundering. We rejected a similar
argument in United States v. Cavalier, 17 F.3d 90, 93 (5th Cir.
1994), where we treated a check issued as a result of the
defendant's fraud as “proceeds” of the crime. Moreover, the
statute, by referring to “any property . . . constituting proceeds”
13
(emphasis added), suggests that an as-yet-uncashed check may
constitute proceeds. Accordingly, we reject Hemmingson's
contention that no crime is committed until the funds are
disgorged.
V.
Hemmingson accuses the government of engaging in maneuvers
that deprived him of due process; he also raises, among other
things, venue and severance objections. While we review questions
of constitutional law de novo, see United States v. Osborne,
68 F.3d 94, 98 (5th Cir. 1995), venue and severance decisions are
reviewed for abuse of discretion. Peteet v. Dow Chem. Co.,
868 F.2d 1428, 1436 (5th Cir. 1989); United States v. Moser,
123 F.3d 813, 828 (5th Cir.), cert. denied, 118 S. Ct. 642 (1997).
A.
Hemmingson's due process claim is premised on the overlapping
evidence in his District of Columbia and Louisiana trials.4 He
notes that even the government appeared to concede a high degree of
overlap. But as the district court noted in denying his motion for
transfer, the two indictments were based on separate events and
separate crimes: The Washington indictment was premised on the
reimbursement scheme, whereas the Louisiana indictment concerned
the Ferrouillet episode. Although the evidence may have
4
Hemmingson (along with Crop Growers) was prosecuted in the District of
Columbia on charges relating to the reimbursement scheme. Crop Growers pleaded
no contest; Hemmingson was acquitted on all counts.
14
overlapped, the key point is that the crimes differed.
Accordingly, Hemmingson's due process rights were not violated.5
B.
Hemmingson avers that the government assumed inconsistent
litigating positions in the District of Columbia and Louisiana. He
says that in the District of Columbia, the government portrayed
Crop Growers as a defendant, whereas in Louisiana it portrayed Crop
Growers as a victim.
The argument fails. The government characterized the
shareholders of Crop Growers as the victim in each prosecution.
The company, in contrast, was charged in the District of Columbia
with vicarious liability for its officer's wrongful acts. Both the
Louisiana and District of Columbia district courts considered
Hemmingson's objection and approved the government's theory of the
case.
In any event, we see nothing inconsistent, let alone
prejudicial, regarding the government's drawing distinctions of
this nature in cases involving a corporate officer's defrauding his
corporation. As in shareholder derivative suits, the “corporation”
is not necessarily a monolithic entity.
C.
Hemmingson does not develop his forum-shopping argument;
5
The government also points out that it would not have had venue in the
District of Columbia to prosecute the Ferrouillet scheme, nor in Louisiana to
prosecute the reimbursement arrangement.
15
rather, he breezily avers that the government forum-shopped by
trying him first in Louisiana, even though he was first indicted in
the District of Columbia. Hemmingson offers not even a soupçon of
evidence in support of his theory. We see nothing that suggests
that the order of trial resulted from anything other than
happenstance and the district courts' respective schedules.
D.
Hemmingson claims that the Independent Counsel exceeded its
jurisdictional mandate. He says that the record does not show that
Michael Espy participated in, or was even aware of, the money-
laundering scheme.
It is irrelevant whether Hemmingson is right on this point,
for the instant prosecution falls well within the Independent
Counsel's broad mandate. He may investigate
whether [Michael Espy] has committed a violation of any
federal criminal law . . . relating in any way to the
acceptance of gifts by him from organizations or
individuals with business pending before the Department
of Agriculture . . . [and] other allegations or evidence
of violation of any federal criminal law . . . by any
organization or individual developed during the
Independent Counsel's investigation . . . and connected
with or arising out of that investigation.
In re Alphonso Michael (Mike) Espy, Div. 94-2, Order at 2 (D.C.
Cir. Sp. Div. Sept. 9, 1994). At risk of belaboring the obvious,
this prosecution's connection to Michael Espy is quite plain:
Hemmingson, as a crop insurer heavily dependent on the Department
of Agriculture, sought access to Michael Espy through Henry Espy,
who, other than his fraternal tie, had little to commend him as an
16
object of Crop Growers's beneficence. Accordingly, the Independent
Counsel acted within its jurisdictional mandate in prosecuting
these defendants.
E.
Hemmingson complains that the district court abused its
discretion in denying his motion to sever his trial from
Ferrouillet's. His specific protest is that the jury heard expert
testimony about Ferrouillet's nefarious deedsSSconcealment,
structuring and the likeSSall of which reflected badly on
Hemmingson, yet were tangential to the question of his guilt
because they occurred after he gave Ferrouillet the check. He also
contends that evidence of Ferrouillet's false statements to FBI
agents violated Bruton v. United States, 391 U.S. 123, 135-36
(1968), in that “powerfully incriminating extrajudicial statements
of a codefendant, who stands accused side-by-side with the
defendant, [were] deliberately spread before the jury in a joint
trial.” Hemmingson requested, but was denied, a limiting
instruction on Ferrouillet's statements.
We do not agree that the court abused its discretion in
refusing to sever or issue a limiting instruction. With regard to
the testimony of the money-laundering expert, the court did issue
a limiting instruction; Hemmingson's complaint is that it was
issued at the close of the evidence, a day after the testimony was
heard. Hemmingson does not cite any precedent establishing that
the failure to issue a contemporaneous limiting instruction
17
constitutes reversible error. In any event, we do not regard the
testimony as excessively prejudicial, and the limiting instruction
was adequate to dispel any prejudice.
F.
Hemmingson contends that the district court failed to issue a
limiting instruction as to testimony regarding Ferrouillet's false
statements. Although we agree that the court probably should have
issued a limiting instruction under these circumstances, we cannot
agree that its refusal to do so amounts to reversible error.
First, the testimony concerned charges that applied to
Ferrouillet only. Unlike the situation in Bruton, the testimony
could not be used directly against the silent defendant;
Hemmingson's complaint is that he was tarred by the general aura of
dishonesty surrounding Ferrouillet, rather than by any direct
evidence relevant to a charge against him. Also in contrast to
Bruton, the testimony can hardly be deemed “powerfully
incriminating.” It was far from a confession implicating
Hemmingson.
Second, the court issued an instruction that, while not
exactly a limiting instruction targeted to the false-statements
testimony, served the same purpose. The court explained to the
jury that it must consider the evidence of each count separately
and consider the evidence against each defendant separately. This
instruction, coupled with the likely harmlessness of the false-
statements testimony, undercuts any claim of prejudice. A
18
defendant faces a high hurdle in proving a court abused its
discretion in failing to offer a limiting instruction: He must
show that he received an unfair trial and suffered “compelling
prejudice.” United States v. Salomon, 609 F.2d 1172, 1175 (5th
Cir. 1980). Hemmingson has not carried that burden.
VI.
Ferrouillet argues that the method of jury selection violated
the Jury Selection and Service Act of 1968 (“Jury Act”), 28 U.S.C.
§§ 1861-1878, and the Constitution.6 The crux of his claim is that
he, a black man, was tried before an all-white jury.7 The weak
link in Ferrouillet's claim is that, as he concedes, the method of
jury selection was entirely colorblind; he does not allege any sort
of intentional race-based discrimination, but relies instead on the
outcome of the selection process.
We apply a bifurcated standard of review to claims brought
under the Jury Act. A decision to excuse an individual juror under
the Act is reviewed for abuse of discretion; but to the extent the
decision rests on the court's interpretation of the Act's language,
the standard of review is de novo. See United States v. Contreras,
108 F.3d 1255, 1265 (10th Cir.), cert. denied, 118 S. Ct. 116
6
His constitutional claim, which encompasses alleged violations of the
Sixth Amendment's fair-cross-section requirement, the Equal Protection Clause,
the Fifth Amendment's Due Process Clause, and the Sixth Amendment's right to
counsel, is tacked on to the end of the statutory argument in his brief. It
consists of a single paragraph and a footnote.
7
Hemmingson, who does not allege that he is black, adopts Ferrouillet's
argument.
19
(1997).
A.
The jury venire, drawn at random, included 109 people, of whom
24 were black. This mirrored the demographics of the forum
district, which, we are told, is 23% black. As the trial was
scheduled to last roughly two weeks (intruding on the Christmas
season), the court mailed each venireman a questionnaire. Both
sides consented to the one hundred questions included within. The
court, based on the answers to the questionnaire and accompanying
letters, excused 39 veniremen upon finding that their service would
pose an “undue hardship or extreme inconvenience.” Seventy
veniremen remained, ten of whom were black. The court then
randomly selected 32 veniremen for voir dire, two of whom were
black and were struck via the government's peremptory strikes.8
It is undisputed that the court did not excuse any venireman
for racial reasons. But Ferrouillet argues that instead of
summarily dismissing the 39 for hardship on the basis of their
questionnaires, the court should have summoned all of them to the
courtroom and ascertained their race before dismissing them. This,
says Ferrouillet, would have ensured that the resulting pool was
properly proportional.
The obvious flaw in this argument is that Ferrouillet cannot
satisfactorily explain how the result would have been different
8
Ferrouillet does not claim that these peremptory strikes were exercised
for anything other than a race-neutral reason.
20
even if the veniremen had personally appeared in the courtroom. He
does not venture to suggest that the district court should have
discriminated on the basis of race, even though this is the logical
consequence of his argument. Instead, he contends that a personal
examination would have shown that some of the proffered reasons for
hardship were not so compelling after all. He buttresses his claim
by comparing what he characterizes as the flimsy reasons of the 39
veniremen excused by mail to the purportedly persuasive reasons of
those subjected to voir dire and not excused.
B.
The vehicle for Ferrouillet's challenge is the Jury Act, which
provides that “all litigants in Federal courts entitled to trial by
jury shall have the right to . . . petit juries selected at random
from a fair cross section of the community in the district or
division where the court convenes.” 28 U.S.C. § 1861.
Importantly, the statute allows the court to excuse a venireman for
“any . . . factor which the court determines to constitute an undue
hardship or to create an extreme inconvenience to the juror.”
28 U.S.C. § 1869(j). These factors include a juror's distance from
the courthouse or a family emergency. Id. In order to win relief
under the Act, a defendant must prove a “substantial failure” to
comply with its provisions. 28 U.S.C. § 1867(a). A substantial
failure is one that destroys the “random nature or objectivity of
the selection process.” United States v. Kennedy, 548 F.2d 608,
612 (5th Cir. 1977).
21
Neither the Act nor the Constitution was violated here. The
court, upon reviewing the questionnaires, made reasonable,
colorblind judgments about which veniremen faced hardship or
inconvenience. As Ferrouillet concedes, race never entered the
picture. His challenge to the allegedly arbitrary application of
different standardsSSa lenient standard for excuse-by-mail; a more
rigorous one for in-court, voir dire excuseSSfalls flat.
The examples of so-called arbitrariness Ferrouillet identifies
do not even begin to support a finding that the jury was selected
in a non-random manner. We see no credible evidence of an abuse of
discretion in excusing jurors, let alone evidence of racial
discrimination. The happenstance of a disproportionately white
jury is simply not enough to prevail under the Act.
VII.
Ferrouillet challenges his sentence, arguing that the court
erred in refusing to grant him a downward departure on the basis of
his “exceptional” record of public service and his sundry
charitable good deeds. We lack jurisdiction to address this
issue.9
Even were we to reach the question, Ferrouillet faces an
uphill battle in the form of U.S.S.G. § 5H1.11, which provides that
“civic, charitable, or public service . . . and similar prior good
9
See United States v. DiMarco, 46 F.3d 476, 477 (5th Cir. 1995) (“Because
[the defendant's] challenge to his sentence involves only his dissatisfaction
with the district court's refusal to grant a downward departure and not a legal
error or misapplication of the guidelines . . . we lack jurisdiction over his
appeal.”).
22
works are not ordinarily relevant in determining whether a sentence
should be outside the applicable guideline range.” While the
guidelines do permit departures in “exceptional case[s],” see
U.S.S.G. ch. 5, pt. H, intro. comment, the court cannot be said to
have abused its discretion in refusing to deem Ferrouillet's work
“exceptional” and reduce his sentence.10
VIII.
The government's appeal focuses on what it considers the
excessively lenient sentences. It says the district court erred in
failing to adjust Ferrouillet's sentence upwardly for his abuse of
a position of public trust and use of special skills as an
attorney. The government also claims the court erred in departing
downward on the ground that the offenses fell outside the heartland
of the money-laundering guideline. In light of our deferential
standard of review, we disagree and affirm the sentences.11
A.
The government contends the court should have boosted
Ferrouillet's sentence pursuant to U.S.S.G. § 3B1.3, which provides
for an upward adjustment when the defendant abused a position of
public trust or employed a special skill “in a manner that
10
Cf. United States v. Peters, 978 F.2d 166, 171 (5th Cir. 1992) (in which
two Purple Hearts and a distinguished flying cross did not merit a downward
departure for exceptional public service).
11
The government's request to review the defendants' commitment
designations is denied as moot.
23
significantly facilitated the commission or concealment of the
offense.” To bolster its claim that Ferrouillet used his
attorney's skills, the government points to his drafting of the
sham consulting contract and his use of law firm letterhead in
correspondence with the Mississippi bank; the government contends
that Ferrouillet's position as an attorney lent his wheelings and
dealings an air of propriety. “The application of § 3B1.3 is a
sophisticated factual determination reviewed under the clearly
erroneous standard.” United States v. Fisher, 7 F.3d 69, 70 (5th
Cir. 1993).
While an attorney's skills qualify as “special skills” for
purposes of § 3B1.3,12 the court found that Ferrouillet did not
employ these skills in committing his crimes. Although he drafted
an engagement letter, he copied much of it from a standard form.
More importantly, he never performed legal services to facilitate
or conceal the crime. As the government emphasized in its case-in-
chief, Ferrouillet never performed even pretextual legal work for
HemmingsonSSindeed, this was the very reason the government
contended their agreement was a sham. The court did not clearly
err in making the factual determination that Ferrouillet's use of
his legal skills did not, as § 3B1.3 requires, “significantly
facilitate” the offense.
Nor did the court clearly err in determining that Ferrouillet
12
See U.S.S.G. § 3B1.3, application note 2: “'Special skill' refers to
a skill not possessed by members of the general public and usually requiring
substantial education, training or licensing. Examples would include . . .
lawyers.”
24
did not abuse his position of public trust in a manner that
significantly facilitated the crimes. Although attorneys by
definition occupy a position of public trust, see United States v.
Harrington, 114 F.3d 517, 519 (5th Cir.), cert. denied, 118 S. Ct.
320 (1997), automatically enhancing an attorney's sentence would
render the “significantly facilitate” language surplusage. If
Ferrouillet did not employ his attorney's skills, it is difficult
to see how his mere status as an attorney could have significantly
facilitated the crime.13 The court did not clearly err in rendering
this factual finding.
B.
The government's primary argument on appeal targets the
decision to depart downward on the basis that the defendants'
conduct fell outside the heartland of the money-laundering
guideline. Ferrouillet was convicted of sixteen felony counts,
Hemmingson of three. As recommended in the PSR, the guideline
range for each defendant was 41-51 months' imprisonment. The
court determined that the offenses did not fall within the
heartland of the money-laundering guideline, U.S.S.G. § 2S1.1, and
instead applied the fraud guideline, § 2F1.1, sentencing each
defendant to twelve months in a halfway house and work-release
program.
13
Cf. Harrington, 114 F.3d at 519 (“The record unambiguously establishes
that Harrington used and abused his position as a lawyer in his effort [to commit
the fraud].”).
25
1.
We review for abuse of discretion a decision to depart from
the guidelines. Koon v. United States, 518 U.S. 81, 96-100 (1996);
United States v. Walters, 87 F.3d 663, 672 n.10 (5th Cir. 1996).
A decision whether a particular factor is a permissible basis for
departure is also reviewed for abuse of discretion, although this
“is a question of law, and the court of appeals need not defer to
the district court's resolution of the point.” Koon, 116 S. Ct. at
2047. Should we determine that the court based its departure on a
mélange of permissible and impermissible factors, we must decide
“whether the district court would have imposed the same sentence
had it not relied upon the invalid factor or factors.” Williams v.
United States, 503 U.S. 193, 203 (1992). If we conclude that the
sentence would have differed, we must remand for resentencing. Id.
2.
The court made a “heartland” departure. A court may depart
from the applicable guideline range when it “finds that there
exists an aggravating or mitigating circumstance of a kind, or to
a degree, not adequately taken into consideration by the Sentencing
Commission in formulating the guidelines that should result in a
sentence different from that described.” 18 U.S.C. § 3553(b).
Unusual or atypical cases are not “adequately taken into
consideration,” hence the heartland departure. The guidelines
explain:
The Commission intends the sentencing courts to treat
each guideline as carving out a “heartland,” a set of
26
typical cases embodying the conduct that each guideline
describes. When a court finds an atypical case, one to
which a particular guideline linguistically applies but
where conduct significantly differs from the norm, the
court may consider whether a departure is warranted.
U.S.S.G. ch. 1, pt. A, intro. comment. 4(b). In this way, the
heartland departure enables courts to avoid rigid application of
the guidelines, provided they articulate reasons why they deem the
case atypical.
The difficulty lies in identifying which factors a court may
consider in evaluating atypicality. In Koon, the Court directed
sentencing courts to ask four questions:
1. What features of this case, potentially, take it
outside the Guidelines' “heartland” and make of it a
special, or unusual, case?
2. Has the Commission forbidden departures based on those
features?
3. If not, has the Commission encouraged departures based
on those features?
4. If not, has the Commission discouraged departures
based on those features?
518 U.S. at 95 (quoting United States v. Rivera, 994 F.2d 942, 949
(1st Cir. 1993)). If the factor is not mentioned in the
guidelines, the court must consider the “structure and theory of
both relevant individual guidelines and the Guidelines taken as a
whole” and decide whether the factor is sufficient to take the case
outside the heartland. See Koon, id. (quoting Rivera, 994 F.2d
at 949). The court must also bear in mind that departures based on
grounds not mentioned in the guidelines are “highly infrequent.”
Id. (quoting U.S.S.G. ch. 1, pt. A).
Koon teaches that discretion to depart is limited: A court
27
may not do so on the basis of forbidden factors, or of a factor
already taken into account by the guidelines, unless that factor is
present to an exceptional degree or in some other way makes the
case different from the ordinary case in which the factor is
present. Id.14 But Koon also stresses that courts of appeals owe
considerable deference in reviewing a decision to depart:
A district court's decision to depart from the Guidelines
. . . will in most cases be due substantial deference,
for it embodies the traditional exercise of discretion by
a sentencing court. Before a departure is permitted,
certain aspects of the case must be found unusual enough
for it to fall outside the heartland of cases in the
Guideline. To resolve this question, the district court
must make a refined assessment of the many facts bearing
on the outcome, informed by its vantage point and day-to-
day experience in criminal sentencing.
518 U.S. at 98 (internal citation omitted). For an appeals court
“[t]o ignore the district court's special competenceSSabout the
'ordinariness' or 'unusualness' of a particular caseSSwould risk
depriving the Sentencing Commission of an important source of
information, namely, the reactions of the trial judge to the fact-
specific circumstances of the case . . . .” Id. at 99 (quoting
Rivera, 994 F.2d at 951).
3.
Over the course of its twenty-five-page sentencing opinion,
the court offered a series of reasons why it considered this case
14
Factors such as the defendant's race, sex, and religion are expressly
prohibited. See U.S.S.G. ch. 1, pt. A, intro. comment. 4(b). In determining
whether the guidelines “take a factor into account,” courts are confined to the
guidelines and their policy statements and official commentary. See 18 U.S.C.
§ 3553(b).
28
atypical and therefore outside the heartland.15 First, the court
determined that the money-laundering guideline, U.S.S.G. § 2S1.1,
primarily targets large-scale money-laundering, which often
involves the proceeds of drug trafficking or other types of
organized crime. The commentary to the guideline notes that the
underlying statute, 18 U.S.C. § 1956, is part of the Anti-Drug
Abuse Act of 1986. Similarly, other district courts and even the
government (in a different case) have noted that the guideline
typically applies to drug-related offenses.16 The court
distinguished Hemmingson's and Ferrouillet's conduct from that
which ordinarily warrants sentencing under § 2S1.1SSnamely, large-
scale laundering of the fruits of organized crime.
The government argues that these factors are already taken
into account by the guideline, and therefore cannot serve as a
basis for departure. It points out that the guideline provides for
a three-level increase if the defendant knew or believed the funds
were proceeds of drug trafficking, which implies that the guideline
encompasses more than just drug-related offenses. See U.S.S.G.
§ 2S1.1(b)(1).
15
The length of the court's explanation reflects the time and energy both
sides invested in arguing sentencing issues. The government, in the midst of
this dispute, observed that “the sentencing guideline computations and arguments
related to downward departure may have become among the most briefed in history.”
16
In United States v. Caba, 911 F. Supp. 630, 635 (E.D.N.Y.), aff'd,
104 F.3d 354 (2d Cir. 1996) (unpublished), a case involving a food stamp-for-cash
scheme, the government conceded at oral argument that “the employment of the
statute has almost always been in drug cases.” The court then concluded: “The
money laundering computations are derived from the guideline's relationship to
drug crimes; it is that relationship which drives the high guideline level and
would in this case produce a custodial range that grossly exaggerates the
seriousness of the actual conduct.” Id. at 636.
29
The district court adopted the reasoning of United States v.
Caba, 911 F. Supp. 630 (E.D.N.Y.), aff'd, 104 F.3d 354 (2d Cir.
1996), where the court held that the enhancement provision merely
distinguishes between defendants who knowingly launder drug money,
and those who are ignorant of the source of the illicit funds.
This interpretation harmonizes with the elements of the money-
laundering statute, which does not require knowledge of the source.
More to the point, the government's argument that § 2S1.1 is not
limited solely to drug offenses fails to engage the district
court's observation that the statute targets both drug-related
money-laundering and money-laundering that stems, more generally,
from organized crime.
In any event, even if we agree that the guideline's heartland
covers more than just money-laundering involving drugs or organized
crime, we must decide whether the guideline's heartland encompasses
the facts of this case. The district court relied on a Department
of Justice manual, FEDERAL PROSECUTION OF ELECTION OFFENSES (6th ed.
1995), as evidence that it is highly unusual, given the facts of
this case, to prosecute under the money-laundering statutes. The
manual expressly states that “the use of conduits to conceal the
fact that corporate funds were infused into a political campaign”
should be prosecuted as a misdemeanor. Id. at 108. The manual
also says that more serious crimes, such as aggravated campaign
financing violations prosecuted as felonies, should be sentenced by
using the fraud or conspiracy-to-defraud guidelinesSSboth of which
provide more lenient sentences than does the money-laundering
30
guideline. Id. at 135.17
The government argues that relying on the Department of
Justice manual as evidence of typicality would transform the manual
into a font of substantive rights. Yet, looking to the manual as
evidence of how the department recommends matching the conduct to
the crime is a far cry from creating a new substantive right; it
simply illuminates what the department considers typical. Koon
instructs courts to employ their “vantage point and day-to-day
experience in criminal sentencing” to determine what is typical;
that a court might consider the vantage point of prosecutors who
routinely appear before the court is consistent with this general
mandate. Taking into account the collective wisdom and experience
of the Department of Justice seems an effective means of ensuring
regularity in sentencingSScertainly more so than would an exclusive
reliance on individual experience.
The government contends, however, that the portion of the
manual discussing Federal Election Campaign Act (“FECA”)
prosecutions is irrelevant, because the defendants were charged
with money-laundering, not FECA violations. Just because the
defendants' goal was to violate FECA, the government reasons, does
not absolve them of criminal liability for the other statutes they
violated in pursuance thereof. If a defendant commits murder in
order to steal a car, he is prosecuted for murder, not car theft.
The government's argument amounts to a claim that the money-
17
In fact, the court ultimately employed the fraud guideline, U.S.S.G.
§ 2F1.1, in fashioning the sentences.
31
laundering statute facially applies to the defendants' conductSSa
point no one contests. As such, the government's challenge fails
to engage the fundamental premise of the district court's
reasoning: that Hemmingson's and Ferrouillet's conduct, when viewed
alongside the conduct that is usually prosecuted under the money-
laundering statutes, was atypical.
Contrary to the government's inference, the court did not rule
that this was just an FECA caseSSand contrary to the defendants'
arguments, this is not an FECA case. It is a money-laundering
case, but an unusual one in that the goal was to conceal a
corporate contribution to a defunct political campaign. The key
question is whether the facts are sufficiently unusual to warrant
a heartland departure.
The two cases the government relies on to prove the typicality
of this prosecution reveal the weakness of its position. Both
United States v. Green, 964 F.2d 365 (5th Cir. 1992), and United
States v. Carpenter, 95 F.3d 773 (9th Cir. 1996), involved long-
running schemes far more elaborate than the isolated instance of
money-laundering that occurred here. In Green, the defendant was
the Commissioner of Insurance of Louisiana who accepted concealed
corporate contributions as bribes; in Carpenter, a state senator
and two accomplices hatched a detailed plan to convert political
contributions to private funds. While these cases support the
government's position that it is not unprecedented to prosecute
election-related wrongdoing under the money-laundering statutes,
the government's failure to identify more than two casesSSboth of
32
which differ factually in important respects from the instant
caseSScuts against its claim that this sort of conduct is
ordinarily prosecuted as money-laundering.18
4.
In concluding that the defendants' conduct was sufficiently
unusual to warrant departure, the district court followed United
States v. Winters, 105 F.3d 200, 208 (5th Cir. 1997), in which we
deemed it “incumbent on the district court to articulate relevant
facts and valid reasons why the circumstances of this case were of
a kind or degree not adequately considered by the Guidelines and
thus sufficient to take it outside the heartland of relevant
cases.” The court did exactly that here, noting that the
defendants were not seeking to legitimize a stream of illegal
18
Ferrouillet attaches to his brief a recent report to Congress by the
United States Sentencing Commission, Sentencing Policy for Money Laundering
Offenses, including Comments on Department of Justice Report (Sept. 18, 1997).
Although the district court did not rely on this report, which was issued after
sentencing, the Commission's conclusions tend to support the court's reasoning.
The Commission explained that its
long-term analysis of money laundering cases also demonstrated that
the intended relationship between the harm caused and the
measurement of the offense seriousness under the money laundering
sentencing guidelines has become distorted. Individuals who engaged
in essentially the same offense conduct received substantially
higher or lower sentences, depending on whether they were charged,
convicted, and sentenced under the underlying offense-related
statute, or the money laundering statute, or both.
...
[T]he Commission's analysis of money laundering sentences reflects
that disparate sentencing persists as a result of the structure of
the current money laundering guidelines. . . . The potential for
. . . disparate results between economic and drug trafficking
offenses in connection with money laundering is problematic, and
reinforces the need for fundamental revisions to the money
laundering sentencing guidelines.
Id. at 7-8.
33
income into the mainstream economy. The court further noted that
the source of the money was corporate funds rather than drug
proceeds, or proceeds from some other unlawful activity. In sum,
the court's conclusion, based on its vantage point and day-to-day
experience in criminal sentencing, reflects nothing more than a
determination that the particular facts of this caseSSmoney-
laundering for purposes of concealing a corporate contribution to
a defeated candidateSSwere atypical when compared to other
prosecutions under the money-laundering statutes.
The guidelines grant considerable discretion in identifying
facts and circumstances that warrant departureSSeither downward or
upward. As the Koon Court noted, “the Commission chose to prohibit
consideration of only a few factors, and not otherwise to limit, as
a categorical matter, the considerations which might bear upon the
decision to depart.” 518 U.S. at 94. The district court premised
its decision on the unusual facts of this case; it also considered
Department of Justice practice, the language and structure of the
guideline, and the absence of caselaw supporting the government's
claim to typicality. We cannot say that this constituted an abuse
of discretion under Koon.
5.
The district court stated one reason for departure that we
deem impermissible. The court observed that this prosecution was
brought by an Independent Counsel and therefore “did not follow the
traditional checks and procedures of a typical federal government
34
prosecution.”19 We see no relevance between the fact that the
United States is prosecuting through the Office of Independent
Counsel and the appropriateness of a downward departure.
Characterizing a prosecution by the Independent Counsel as
per se unusual would grant courts an automatic right to depart when
sentencing in such cases. We refuse to accept this reasoning. “It
is now established beyond dispute that . . . the Independent
Counsel stands in place of the Attorney General and represents the
United States in any proceeding within his or her jurisdiction.”
In re Sealed Case, 146 F.3d 1031, 1031 (D.C. Cir. 1998) (denial of
rehearing en banc) (Silberman, J., concurring).
An Independent Counsel prosecutes in the name of the United
States and enjoys “full power and independent authority to exercise
all investigative and prosecutorial functions and powers of the
Department of Justice.” 28 U.S.C. § 594(a); Morrison v. Olson,
487 U.S. 654, 662 (1988). There is no basis, in our precedent or
in practice, for deeming an Independent Counsel prosecution
inherently suspect. We do not believe, however, that the district
court would have sentenced differently absent reliance on this
impermissible factor. See United States v. McDowell, 109 F.3d 214,
219 (5th Cir. 1997) (upholding upward departure based on one
permissible and one impermissible reason). Accordingly, its
mistake in this regard is not reversible error.
19
The defendants, in their briefs, abandon insinuation and cast subtlety
to the wind. Hemmingson's brief opens with the plaintive cry: “WHAT WRATH HATH
INDEPENDENT COUNSEL WROUGHT.”
35
AFFIRMED.20
20
The motion to supplement the record is denied.
36