US v. DeMarco
Case Date: 08/25/1995
Court: United States Court of Appeals
Docket No: 93-1511
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August 25, 1995 UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT ____________________ No. 93-1511 No. 93-2206 No. 94-1508 UNITED STATES OF AMERICA, Appellee, v. VINCENT HURLEY, Defendant, Appellant. ____________________ No. 93-1560 UNITED STATES OF AMERICA, Appellee, v. CARLO DeMARCO, Defendant, Appellant. ____________________ No. 93-1561 UNITED STATES OF AMERICA, Appellee, v. JAMES SACCOCCIO, Defendant, Appellant. ____________________ No. 93-1562 UNITED STATES OF AMERICA, Appellee, v. STANLEY CIRELLA, Defendant, Appellant. ____________________ No. 93-1563 UNITED STATES OF AMERICA, Appellee, v. KENNETH SACCOCCIO, Defendant, Appellant. ____________________ No. 93-1616 UNITED STATES OF AMERICA, Appellee, v. STEPHEN PIZZO, Defendant, Appellant ____________________ No. 93-1617 No. 93-2207 No. 94-1507 UNITED STATES OF AMERICA, Appellee, v. DONNA SACCOCCIA, Defendant, Appellant. ____________________ No. 94-1388 UNITED STATES OF AMERICA, Appellee, v. ANTHONY DeMARCO, Defendant, Appellant. ____________________ ERRATA SHEET The opinion of the Court, issued on July 24, 1995, is amended as follows. On cover sheet, change government's counsel listing to read: "Kathleen A. Felton, Criminal Division, Appellate Section, Department __________________ of Justice and Michael P. Iannotti, Assistant United States Attorney, ___________________ with whom Sheldon Whitehouse, United States Attorney, James H. Leavey __________________ ________________ and Michael E. Davitt, Assistant United States Attorneys, and John P. _________________ _______ Elwood, Criminal Division, Department of Justice, were on joint brief ______ for the United States." UNITED STATES COURT OF APPEALS UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT FOR THE FIRST CIRCUIT ____________________ No. 93-1511 No. 93-2206 No. 94-1508 UNITED STATES OF AMERICA, Appellee, v. VINCENT HURLEY, Defendant, Appellant. ____________________ No. 93-1560 UNITED STATES OF AMERICA, Appellee, v. CARLO DeMARCO, Defendant, Appellant. ____________________ No. 93-1561 UNITED STATES OF AMERICA, Appellee, v. JAMES SACCOCCIO, Defendant, Appellant. ____________________ No. 93-1562 UNITED STATES OF AMERICA, Appellee, v. STANLEY CIRELLA, Defendant, Appellant. ____________________ No. 93-1563 UNITED STATES OF AMERICA, Appellee, v. KENNETH SACCOCCIO, Defendant, Appellant. ____________________ No. 93-1616 UNITED STATES OF AMERICA, Appellee, v. STEPHEN PIZZO, Defendant, Appellant ____________________ No. 93-1617 No. 93-2207 No. 94-1507 UNITED STATES OF AMERICA, Appellee, v. DONNA SACCOCCIA, Defendant, Appellant. ____________________ No. 94-1388 UNITED STATES OF AMERICA, Appellee, v. ANTHONY DeMARCO, Defendant, Appellant. ____________________ APPEALS FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF RHODE ISLAND [Hon. Ernest C. Torres, U.S. District Judge] ___________________ ____________________ Before Selya, Cyr and Boudin, Circuit Judges. ______________ ____________________ Terrance Reed and Edward C. Roy with whom Reed & Hostage, Roy & _____________ ______________ ______________ _____ Cook, James T. McCormick, McKenna & McCormick, Michael C. Andrews, ____ __________________ ____________________ ___________________ Mary June Ciresi, Vincent Indeglia, Indeglia & Associates, Richard _________________ _________________ _______________________ _______ Inglis, and Garguilo, Rudnick & Garguilo were on joint briefs for ______ ______________________________ appellants Donna Saccoccia, Stanley Cirella, Kenneth Saccoccio, Vincent Hurley, James Saccoccio, Carlo DeMarco and Stephen Pizzo. Robert D. Watt, Jr. for appellant Anthony DeMarco. ___________________ Kathleen A. Felton, Criminal Division, Appellate Section, _____________________ Department of Justice and Michael P. Iannotti, Assistant United States ___________________ Attorney, with whom Sheldon Whitehouse, United States Attorney, James __________________ _____ H. Leavey and Michael E. Davitt, Assistant United States Attorneys, _________ _________________ and John P. Elwood, Criminal Division, Department of Justice, were on ______________ joint brief for the United States. ____________________ July 24, 1995 ____________________ BOUDIN, Circuit Judge. The eight appellants challenge _____________ their convictions, sentences and forfeitures for their participation in an extensive money laundering operation organized by Stephen Saccoccia. His conviction and sentence were affirmed in United States v. Saccoccia, No. 93-1618, _____________ _________ slip. op. (1st Cir. June 28, 1995). In this case, we affirm the convictions of the eight appellants before us, their sentences, and the forfeiture orders entered against them. I. BACKGROUND I. BACKGROUND The eight appellants are Donna Saccoccia (wife of Stephen), her brother Vincent Hurley, James Saccoccio and his brother Kenneth Saccoccio, Carlo DeMarco and his brother Anthony DeMarco, Stanley Cirella and Stephen Pizzo. Along with Stephen Saccoccia and others, appellants were indicted on November 18, 1991, and were charged with conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. 1962(d). Certain of them were also charged with substantive counts of money laundering, 18 U.S.C. 1956-57, currency reporting offenses, 31 U.S.C. 5324, and interstate travel in aid of racketeering, 18 U.S.C. 1952. One conspirator originally charged, David Izzi, pled guilty before trial and testified for the government. Stephen Saccoccia was severed and tried separately due to the illness of his counsel. Alfred Gabriele, added as a -4- -4- conspirator in a superseding indictment, was also tried separately, and his appeal is still pending. United States _____________ v. Gabriele, No. 94-1215 (1st Cir.). The end result was that ________ the eight appellants in this case were tried together in the district court in Rhode Island. Trial began on November 6, 1992, and ended in a jury verdict on December 18, 1992. At trial, the government's evidence consisted primarily of the testimony of other participants in the money laundering activities, of Colombian nationals involved in the international drug trade, and of bank employees. The government also offered bank records of financial transactions and numerous court-ordered wiretap recordings. Viewed in the light most favorable to the verdicts, United ______ States v. Valerio, 48 F.3d 58, 63 (1st Cir. 1995), the ______ _______ evidence permitted a reasonable jury to find the following. Stephen Saccoccia owned and controlled a number of precious metals businesses, including Saccoccia Coin Company in Cranston, Rhode Island ("Saccoccia Coin"); Trend Precious Metals in Cranston and in New York, New York ("Trend"); and International Metal Marketing ("International Metal") and Clinton Import/Export in Los Angeles, California ("Clinton Import/Export"). In the late 1980s, after some indirect dealings, Stephen Saccoccia began laundering drug money for Duvan Arboleda, a Colombian narcotics dealer. The laundering operation, ultimately expanded to serve a second drug ring as -5- -5- well, took several forms but each began with Stephen Saccoccia receiving large amounts of cash in New York, generated from the sale of cocaine. Often, Saccoccia would send one of his employees, usually unindicted co-conspirator Richard Gizzarelli, to a prearranged location, such as a street corner, to meet a customer's courier. Gizzarelli would bring the cash to the Trend office in New York or to Saccoccia's apartment in New York to count it. The money then followed two different routes. Some of the cash would be used to purchase money orders or gold; the gold and some of the remaining cash would then be shipped to International Metal in Los Angeles. Much of the rest of the cash--up to $200,000 per day--would be sent to Trend and Saccoccia Coin in Rhode Island, either through armored car service or in the car of a Saccoccia employee. Once the cash reached Rhode Island, it was counted by Saccoccia employees and divided into a number of packets in amounts either greater than or less than $10,000. Most of the cash went to the Trend office in Cranston. Saccoccia employees, directed by Izzi, then drove to local banks where they purchased cashier's checks in amounts less than $10,000 payable to Trend, or cashier's checks in amounts greater than $10,000 payable to companies nominally owned by Hurley. The purpose of these maneuvers--called "smurfing" in law enforcement parlance--was to avoid or minimize the filing of -6- -6- accurate currency transaction reports, which are required by federal law for cash deposits in amounts of $10,000 or more. Ultimately the local Rhode Island checks would be deposited in, and money from the Hurley accounts wired to, the Trend account at Citizens Bank in Rhode Island. A smaller portion of the cash sent to Rhode Island went to Saccoccia Coin. That cash was used to buy gold without documentation; the gold was then resold to legitimate companies in exchange for checks recorded as payments for gold sales. Some of the cash was also used in the ordinary operations of the Saccoccia Coin Shop, a heavily cash-based enterprise. At the Los Angeles end, the gold sent to International Metal was sold, and the proceeds were wired back to the Trend account at Citizens Bank. Cash received by International Metal was used to purchase gold covertly, the gold was then sold, and the proceeds were also wired to the Trend account. Thus, the bulk of the cash that Saccoccia sent out of New York eventually ended up in the Trend account at Citizens. Citizens Bank closed the Trend account in April 1991. Thereafter, cash was still transported from New York and "smurf" employees in Rhode Island still obtained cashier's checks from various banks, but the checks were sent to International Metal and Clinton Import/Export in Los Angeles. -7- -7- Donna Saccoccia assisted her husband in most aspects of the operation, relayed his instructions to the others and wired funds abroad to Colombian banks. Hurley and Anthony DeMarco picked up cash from couriers in New York and transported it to Rhode Island. Hurley, Anthony and Carlo DeMarco, Kenneth and James Saccoccio, Cirella and Pizzo received the cash deliveries in Rhode Island, counted the money, and separated it into packets of smaller amounts for transport to local banks. Anthony DeMarco and James and Kenneth Saccoccio bought the bulk of the cashier's checks. A staggering amount of money moved through this laundering operation. Between March 1, 1990, and August 22, 1991, Stephen or Donna Saccoccia wired over $136 million to foreign bank accounts primarily in Colombia; more than $97 million of this amount was wired from the Trend account in Citizens Bank jointly controlled by Donna and Stephen. Apart from the $136 million, substantial sums were retained by the Saccoccias and their employees as compensation. All eight appellants were convicted of RICO conspiracy. All but Carlo DeMarco and Pizzo were convicted of substantive offenses. After post-trial motions, appellants were sentenced in May 1993, and forfeiture judgments against each appellant were entered pursuant to the RICO forfeiture statute, 18 U.S.C. 1963, and in some cases under the money laundering forfeiture statute. 18 U.S.C. 982. Appellants' -8- -8- substantive convictions (in addition to RICO conspiracy), their sentences,and their forfeiture amountsare listed below: Name Substantive Sentence Forfeiture conviction amount Donna 13 counts of money 14 yrs., 2 $136,344,231.86 Saccoccia laundering (18 yrs. U.S.C. 1956), supervised and 47 counts of release unlawful transactions ( 1957). Vincent 1 count 18 yrs., 3 $136,344,231.86 Hurley structuring (31 yrs. U.S.C. 5324(3)), supervised and 1 count of release interstate travel in aid of racketeering (18 U.S.C. 1952). James 15 counts of 10 yrs., 3 $37,456,100.79 Saccoccio structuring. yrs. supervised release Kenneth 14 counts of 12 yrs., 3 $37,456,100.79 Saccoccio structuring. yrs. supervised release Stanley 1 count of 9 yrs., 2 $37,456,100.79 Cirella structuring. yrs. supervised release Anthony 5 counts of filing 7 yrs., 3 $136,344,231.86 DeMarco false currency yrs. transaction supervised reports (31 U.S.C. release 5324(2)); 2 counts of structuring. Carlo No substantive 6.5 yrs., $3,927,357.55 DeMarco conviction. 2 yrs. supervised release -9- -9- Stephen No substantive 8.5 yrs., $37,456,100.79 Pizzo conviction. 3 yrs. supervised release These appeals followed. II. THE RICO ISSUES II. THE RICO ISSUES The RICO conspiracy offense charged in this case required the government to prove an agreement by appellants "to conduct or participate . . . in the conduct of [an] enterprise's affairs through a pattern of racketeering activity"; and the pattern alleged in this case required proof of two or more criminal acts by an appellant (e.g., ____ money laundering or structuring). See 18 U.S.C. 1961(1), ___ 1962(c), (d). Appellants here challenge the indictment, the instructions and the evidence relating to RICO. A. The RICO Indictment A. The RICO Indictment ___________________ The RICO conspiracy count alleged the formal requisites of the offense including the assertion that each appellant agreed to commit at least two racketeering acts; but it did not specify which predicate acts each appellant committed or agreed to commit. Hurley, Cirella, Pizzo and Carlo DeMarco argue that this lack of specificity is fatal to the indictment because a sufficient indictment must "fairly inform[ ] a defendant of the charge against which he must defend . . . ." Hamling v. United States, 418 U.S. 87, 117 _______ _____________ (1974). -10- -10- In count I, the indictment identified the enterprise, its precise method of operation, the role played by each appellant, and the nature of the predicate acts charged. In appended lists specifically referenced in count I, the indictment also set forth thousands of individual bank transactions and wire transfers. What was lacking was any identification of the particular transactions in which the four complaining appellants were involved, since they acted mainly as counters and subdividers of money deposited and transferred by others. But if a defendant were charged with conspiring to distribute drugs, it would surely be enough to show that he had acted as a packer in the drug-making "factory" during the period in which a series of identified shipments were made. The government might never know which particular shipments had been packed by the defendant; but his agreement to participate in distributing multiple shipments could fairly be inferred. The same principle applies in this case. There is, we note, no indication that appellants were misled or left in ignorance about what the government intended to prove. United States v. Winter, 663 F.2d 1120 (1st Cir. 1981), _____________ ______ cert. denied, 460 U.S. 1011 (1983), relied on by appellants, _____ ______ is not in point. In that case we held that the indictment of two defendants failed because "a RICO conspiracy count must -11- -11- charge as a minimum that each defendant agreed to commit two or more specified predicate crimes." Id. at 1136. In Winter ___ ______ the indictment did not charge even in the most general terms that certain defendants had agreed to commit two predicate acts. Here, the indictment did so charge, and Winter is not ______ in point. -12- -12- B. The RICO Instructions: "Conduct or Participate" B. The RICO Instructions: "Conduct or Participate" ______________________________________________ The gravamen of the underlying offense is "to conduct or participate, directly or indirectly, in the conduct of [an] enterprise's affairs" through a pattern of racketeering activity. 18 U.S.C. 1962(c). In Reves v. Ernst & Young, _____ ______________ 113 S. Ct. 1163, 1172 (1993), the Supreme Court interpreted the words "conduct or participate" and held that they require the defendant's "participat[ion] in the operation or management of the enterprise itself." Reves involved a civil _____ RICO suit against an outside accounting firm hired to audit the books of an allegedly corrupt enterprise. Construing Reves, we held in United States v. Oreto, 37 F.3d 739, 750 _____ ______________ _____ (1st Cir. 1994), cert. denied, 115 S. Ct. 1161 (1995), that _____ ______ insider employees who are "plainly integral to carrying out" the racketeering activities fit within section 1962(c). Here, appellants claim that the district court's instruction on the meaning of "conduct or participate" was erroneous in light of Reves. No objection to the instruction _____ was made at trial, so we review only for "plain error," Fed. R. Crim. P. 52(b), which requires appellants to show that an error was made, the error was clear or obvious, and the error resulted in prejudice--that is, it affected the defendant's substantial rights. United States v. Olano, 113 S. Ct. 1770, _____________ _____ 1777-78 (1993). Even then, an appeals court need not notice the error unless it caused "a miscarriage of justice" or -13- -13- undermined "the fairness, integrity or public reputation of judicial proceedings." Id. at 1778-79. ___ The instruction in this case was similar to the one we upheld in Oreto. 37 F.3d at 750. The difference--which _____ appellants deem crucial--is that the Oreto instruction _____ encompassed defendants who perform acts "necessary to or helpful in the operation of the enterprise," whereas the instruction in this case encompassed defendants who perform acts "related to the operation of the enterprise." Appellants argue that the court's language embraced precisely the view that Reves rejected: "that almost any involvement in _____ the affairs of an enterprise [satisfies] the 'conduct or participate' requirement." Reves, 113 S. Ct. at 1169. _____ In the abstract, the relatedness reference might pose a problem if a defendant were arguably an outsider, such as the independent auditor in Reves. But in this case the _____ government's version of the evidence placed appellants squarely in the role of employees of the enterprise. The jury's verdict shows that the jury accepted that version of events, making the alleged ambiguity in the instructions harmless. To the extent that appellants are challenging Oreto's reading of Reves, Oreto is the law of this circuit. _____ _____ _____ See United States v. De Jongh, 937 F.2d 1, 6 (1st Cir. 1991) ___ ______________ ________ (newly constituted panels bound by prior panel decisions in point). -14- -14- -15- -15- C. The RICO Instructions: Knowledge C. The RICO Instructions: Knowledge _________________________________ Appellants complain about two aspects of the district court's instructions on knowledge. First, they challenge the use of a general "willful blindness" instruction and the court's refusal to instruct the jury that willful blindness did not apply to the RICO conspiracy count. They say that one cannot simultaneously be willfully blind to a conspiracy and also intend and agree to join the conspiracy. The district judge first instructed the jury on the substantive counts. He then gave a detailed explanation of the RICO conspiracy count, including the requirement that the government prove both "an intent to agree" and "an intent to commit the substantive offenses that are the objects of the conspiracy." The judge told the jury that they could not infer knowledge of the conspiracy from negligence, mistake, or ignorance; instead, the defendant must act "voluntarily and intentionally." After lengthy instructions on the RICO count, the judge moved on to more general propositions. Only then did he give the "willful blindness" instruction: In deciding whether a Defendant acted knowingly, you may infer that the Defendant had knowledge of a fact if you find that the Defendant deliberately closed his eyes to a fact that would have been obvious to him. The willful blindness instruction appears to have been aimed at the "knowing" requirements of substantive counts. E.g., 18 U.S.C. 1956 (money laundering). Appellants have ____ -16- -16- given us no reason to think that it diluted the express "intent" requirement for the conspiracy count. Here the trial judge adequately guarded against that risk with cautionary instructions stressing that the defendants must have joined the conspiracy intentionally, see United States ___ ______________ v. Brandon, 17 F.3d 409, 451-54 (1st Cir.), cert. denied, 115 _______ _____ ______ S. Ct. 80 (1994), and we see no way that the jury could have convicted without finding deliberate agreement. Second, appellants object to the district court's refusal of their request for an instruction that each appellant had to know of the existence and general nature of the enterprise. When this request was made after the charge, it was entangled with other requests and the district court may not have focused on the request or may have thought it had in substance been given. Although nothing in the statute explicitly requires such knowledge, there is some precedent, including a comment from this court, suggesting it is appropriate. See, e.g., Brandon, 17 F.3d at 428; 2 L. Sand, ___ ____ _______ J. Siffert, W. Loughlin & S. Reiss, Modern Federal Jury ____________________ Instructions 52.04 at 52-39 & comment (1995). ____________ We think that in substance the jury was told, although somewhat indirectly, that appellants had to be aware of the enterprise and its general character in order to be guilty under the RICO conspiracy charge. The court instructed that the first element that the jury had to find was that a -17- -17- conspiracy existed "to conduct or participate in the affairs of an enterprise through a pattern of racketeering activity." The court subsequently told the jury that the government must also prove "that the defendant knew the conspiracy existed and knew of its unlawful purpose." Perhaps in theory one might imagine a defendant who knew of and joined in a conspiracy to conduct an enterprise but did not know the nature of the enterprise. In this case, however, the government's evidence showed that appellants knowingly engaged in structuring transactions on an ongoing basis within the framework of Stephen Saccoccia's business venture. Given the evidence accepted by the jury, there is no doubt that appellants knew what they were doing and knew they were doing it within the framework of the Saccoccia organization. If the instruction deviated from perfection, the deviation was assuredly harmless. D. The RICO Instructions: Single or Multiple Conspiracies D. The RICO Instructions: Single or Multiple Conspiracies ______________________________________________________ At trial, the government offered evidence of out-of- court statements by several persons whom it characterized as unindicted co-conspirators. The most important were two regional managers of rival drug cartels each of which supplied money to be laundered by Stephen Saccoccia's organization. The district court admitted the hearsay under the co-conspirator exception, Fed. R. Evid. 801(d)(2)(E), pursuant to United States v. Petrozziello, 548 F.2d 20 (1st _____________ ____________ -18- -18- Cir. 1977). The court found that the regional managers were, more probably than not, members of the Saccoccia conspiracy and rendered a final Petrozziello ruling at the close of ____________ evidence. Appellants say first that the two drug ring managers could not conceivably be members of the same conspiracy with each other because the rings were rivals. The government responds that the hearsay exception does not require that the conspiracy used to support the hearsay evidence be the same as that charged, see United States v. Dworken, 855 F.2d 12, ___ _____________ _______ 24 (1st Cir. 1988), and that at the very least that each drug dealer necessarily conspired with the members of the Saccoccia organization. Whether the government's premise of separate conspiracies is sound or squares with what the district court found is not evident from its brief. Nevertheless, appellants--who bear the burden on appeal of showing error in the Petrozziello finding--make no serious ____________ effort to show that the two drug dealers could not have been part of the same conspiracy; their alleged rivalry is hardly conclusive because it is not necessary that all co- conspirators know of each other's existence, Brandon, 17 F.3d _______ at 428. Whether a conspiracy's customers are also members of the conspiracy is a fact-based question, see United States v. ___ _____________ Moran, 984 F.2d 1299, 1303 (1st Cir. 1993), and once again _____ -19- -19- appellants make no effort to muster the evidence on this issue, or even to argue it. Alternatively, appellants argue that the court should at least have given a multiple conspiracy instruction, an argument reinforced--although perhaps only superficially--by the government's defense of the hearsay declarations. The government says that this issue was not raised in a timely fashion and that there was no factual basis for a multiple conspiracy instruction. In declining to give such a charge, the trial judge rested on both of these grounds and found, in addition, that the proposed multiple conspiracy instruction was itself deficient. The district court could be sustained on any one of these three grounds but we think that untimeliness is sufficient, United States v. Akers, 987 F.2d 507, 513 (8th ______________ _____ Cir. 1993); Yoffe v. United States, 153 F.2d 570, 576 (1st _____ ______________ Cir. 1946), and add two further points. First, the request for such an instruction was not made until after government counsel had completed his closing argument, making it impossible for him to address the jury on this point. Second, the core of the government's case tended to show an overarching conspiracy; and appellants make little effort in their brief to show that multiple conspiracies were a serious possibility. E. Sufficiency of the Evidence E. Sufficiency of the Evidence ___________________________ -20- -20- In reviewing sufficiency claims, we normally consider the evidence "in the light most favorable to the prosecution" and then ask whether the evidence "would allow a rational jury to determine beyond a reasonable doubt that the defendants were guilty as charged." United States v. Mena _____________ ____ Robles, 4 F.3d 1026, 1031 (1st Cir. 1993), cert. denied, 114 ______ _____ ______ S. Ct. 1550 (1994). Although appellants deny that any of them "directed" the enterprise, we rejected this legal premise in Oreto, holding that an employee can "conduct" or _____ "participate" in the conduct of an enterprise by playing an integral role in its operation. 37 F.3d at 750. By Oreto's _____ test, a rational jury could convict each appellant. Donna Saccoccia relayed her husband's instructions to other appellants on numerous occasions, helped count money, and personally authorized the wire transfer of more than $38 million from the Trend account to foreign bank accounts. Hurley and Anthony DeMarco received and counted the large cash deliveries in New York and helped transport the cash to Rhode Island. James and Kenneth Saccoccio and Anthony DeMarco did most of the legwork involved in money laundering, exchanging millions of dollars in cash for cashier's checks at various banks. Carlo DeMarco travelled to New York and Connecticut to transport the cash; Cirella and Stephen Pizzo received and counted money at the coin shop. -21- -21- Four appellants argue that apart from their low levels of responsibility, the evidence was insufficient to show knowledge on their part that the Saccoccia organization was engaged in money laundering or that the money being laundered was derived from narcotics. These claims are made by Cirella, Pizzo and James and Kenneth Saccoccio in order to defeat the showing of predicate acts available to the jury to underpin their RICO convictions. Each of the four says or implies that he was unaware of money laundering but working for what he understood to be a legitimate business. The jury was entitled to find that these four appellants knew that they were engaged in unlawful money laundering. Stephen Saccoccia discussed with Cirella and Pizzo, among others, how to avoid police detection; and Pizzo and Cirella discussed "washing . . . the money" and means of avoiding jail. James and Kenneth Saccoccio were involved in so many deposits and manipulative subdividings of funds that laundering was the only plausible explanation. Further, in one instance (July 10, 1990), discussing the division of $54,000 into packages of $9,000 for deposit, James and Kenneth Saccoccio conducted the following (recorded) conversation with Izzi: James: 54, I can't do that. He wants me to do $9,000 at every bank, that's stupid! (voices fade out) James: KENNY, you want me to do 9 at every bank? -22- -22- Kenneth: (unintelligible) $54,000 that's the way I been doing it. Use VOGUE, do VOGUE, (unintelligible). Izzi: Not all of it, do a couple of TRENDS if you could. As for the drug-based origins of the cash, the direct evidence of knowledge among the underlings is much thinner since none of the conspirators were directly involved with the narcotics sales. Kenneth Saccoccio is an exception since he was recorded, while counting cash at Trend, referring to it as "drug money"; and in one conversation with Pizzo, Cirella said something that the jury might have taken as referring to the drug origins of the proceeds. In the case of James Saccoccio, the imputation of knowledge of drugs rests on the vast sums involved in the laundering and James' close association with Kenneth. There are plenty of cash-generating businesses but among those that require the illicit laundering of funds, the drug business is notorious and preeminent. In this case, the evidence showed that narcotics were the source of the cash and that this fact was well known to Stephen Saccoccia and Kenneth Saccoccio, among others. We think that a rational jury could conclude that James too knew of the money's origins, either from the size and continuing nature of the deliveries, or from being told that the money came from drugs; and Cirella and Pizzo are a fortiori cases. _ ________ -23- -23- III. CURRENCY TRANSACTION REPORT ISSUES III. CURRENCY TRANSACTION REPORT ISSUES The Bank Secrecy Act requires domestic banks to report any transactions involving more than $10,000 in cash, 31 U.S.C. 5313; 31 C.F.R. 103. The statute also prohibits customers from providing false information for a bank's report. 31 U.S.C. 5324(2).1 Further, under the 1986 amendments, "[n]o person shall for the purpose of evading the reporting requirements of [the Act or its regulations] . . . (3) structure or assist in structuring . . . any transaction with one or more domestic financial institutions." Id. ___ 5324. The most common method of "structuring" is to divide sums of cash into amounts that are either under the $10,000 reporting threshold or into amounts that are larger but still less likely to attract attention. Structuring is a criminal act, 31 U.S.C. 5322(a), and a violator is subject to double the fine and sentence if he or she structures while violating another federal law or as part of a pattern of crime. Id. 5322(b). Appellants ___ Hurley, James and Kenneth Saccoccio, and Cirella were convicted of structuring under 31 U.S.C. 5324(3) and ____________________ 1In late 1992, Congress recodified sections 5324(1)-(3) as sections 5324(a)(1)-(3) without substantive change, Pub. L. 102-550, 525(a), 106 Stat. 3672, 4064 (Oct. 28, 1992). For simplicity, we refer to the earlier codification, under which appellants were indicted and convicted, unless otherwise noted. -24- -24- 5322(b), and now challenge their convictions on several grounds. A. Due Process and Self-Incrimination A. Due Process and Self-Incrimination __________________________________ Appellants first contend that the reporting requirement violates the Fifth Amendment by requiring them to provide incriminating information to the government about themselves. The Supreme Court has not directly decided this issue as to bank customers, see California Bankers Ass'n v. Shultz, 416 ___ ___________________________________ U.S. 21, 73 (1974), but every circuit to consider the claim has rejected it on one of several alternative grounds. E.g., ____ United States v. Camarena, 973 F.2d 427, 428 (5th Cir. 1992); _____________ ________ United States v. Mickens, 926 F.2d 1323, 1331 (2d Cir. 1991), _____________ _______ cert. denied, 502 U.S. 1060 (1992); United States v. Hoyland, _____ ______ _____________ _______ 914 F.2d 1125, 1130 (9th Cir. 1990). In our complex society, individuals are called upon to provide information to the government on countless occasions and under a great variety of circumstances. Where Congress has framed a disclosure requirement narrowly focused upon criminal conduct, the Supreme Court has on occasion struck down such statutes. Haynes v. United States, 390 U.S. 85 ______ _____________ (1968); Marchetti v. United States, 390 U.S. 39 (1968); _________ ______________ Albertson v. Subversive Activities Control Bd., 382 U.S. 70 _________ _________________________________ (1965). But where the conduct is not inherently criminal, the Court has upheld the statutes even where the reporting could in due course lead the government to uncover criminal -25- -25- conduct. California v. Byers, 402 U.S. 424 (1971); United __________ _____ ______ States v. Sullivan, 274 U.S. 259 (1927). ______ ________ Byers, the most recent of the cases on point, upheld a _____ California hit and run law that required motorists involved in an accident to halt and provide their names and addresses to authorities. Needless to say, a fair portion of those involved in such accidents may be identifying themselves in situations that could result in criminal jeopardy. But the Court found that the report required was not itself a confession of criminal conduct, and that the law was directed to all auto drivers in the state rather than a more limited group "inherently suspect of criminal activities." Byers, _____ 402 U.S. at 430 (quoting Albertson, 382 U.S. at 79). _________ Of course, a witness may invoke the Fifth Amendment based on fairly remote risks, see In re Kave, 760 F.2d 343, ___ ___________ 354 (1st Cir. 1985), but reporting statutes play a central role in the administration of government (e.g., taxes), and ____ the jurisprudence that governs them has followed a different course. And although the 1986 structuring amendments were aimed at money laundering, see Ratzlaf v. United States, 114 ___ _______ _____________ S. Ct. 655, 660-61 n.11 (1994), they reinforce a reporting statute--the Bank Secrecy Act--that has larger aims including tax and regulatory concerns. Many of the reports are filed by legitimate cash-oriented businesses and the report itself -26- -26- is not inherently more incriminating than the accident report upheld in Byers. _____ Anthony DeMarco makes a different constitutional attack on the statute. He was convicted of five counts of willfully "caus[ing] or attempt[ing] to cause" a bank to file a false report. 31 U.S.C. 5324(2). The bank report, based on information that the teller secures from the customer, asks "on whose behalf" the transaction is being conducted. Anthony DeMarco told bank tellers that the transactions were being conducted on his own behalf but the evidence showed that they were being conducted for Stephen Saccoccia. Anthony DeMarco claims that the "on whose behalf" language is unconstitutionally vague. Due process requires that criminal statutes define offenses with sufficient clarity that an ordinary person can understand what conduct is prohibited. Kolender v. Lawson, ________ ______ 461 U.S. 352, 357 (1983). The "on whose behalf" language is reasonably clear and, on the present facts, plainly pointed to Stephen Saccoccia. The cases DeMarco cites all involve prior versions of the reporting form, which used different language. E.g., United States v. Murphy, 809 F.2d 1427, 1430 ____ _____________ ______ (9th Cir. 1987) ("for whose account"). The current version of the form was promulgated to remedy this ambiguity. United ______ States v. Belcher, 927 F.2d 1182, 1186-88 (11th Cir.), cert. ______ _______ _____ |