Opinion
No. IP 00-0222-C-H/F, IP 98-36-CR-01 H/F
June 30, 2000.
ENTRY DENYING MOTION TO VACATE OR SET ASIDE CONVICTION AND DIRECTING ENTRY OF JUDGMENT
Petitioner Carlton McIntosh pled guilty to a felony charge of money laundering in violation of 18 U.S.C. § 1957(a). On appeal the United States Court of Appeals for the Seventh Circuit affirmed his sentence of 78 months imprisonment. United States v. McIntosh, 198 F.3d 995 (7th Cir. 2000).
McIntosh then filed a petition for relief under 28 U.S.C. § 2255. He alleges his conviction was unlawful because the indictment to which he pled guilty failed to identify sufficiently the "specified unlawful activity" to which a money laundering transaction must be tied under 18 U.S.C. § 1957(a). The United States has responded to the petition, McIntosh filed his reply, and the record has been expanded appropriately. As explained below, McIntosh is not entitled to the relief he seeks.
To obtain habeas corpus relief under 28 U.S.C. § 2255, McIntosh must show there has been "an error of law that is jurisdictional, constitutional, or that constitutes a `fundamental defect which inherently results in a complete miscarriage of justice.'" Borre v. United States, 940 F.2d 215, 217 (7th Cir. 1991), quoting Carreon v. United States, 578 F.2d 176, 179 (7th Cir. 1978).
McIntosh was convicted of money laundering in violation of 18 U.S.C. § 1957, which provides in relevant part:
(a) Whoever, in any of the circumstances set forth in subsection (d), knowingly engages or attempts to engage in a monetary transaction in criminally derived property that is of a value greater than $10,000 and is derived from specified unlawful activity, shall be punished as provided in subsection (b).
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(f) As used in this section —
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(3) the term "specified unlawful activity" has the meaning given that term in section 1956 of this title.
The reference to 18 U.S.C. § 1956 includes a long list of crimes that constitute "specified unlawful activity," which begins by including "any act or activity constituting an offense listed in" 18 U.S.C. § 1961 (1), with an exception not relevant here. In turn, § 1961(1), which defines "racketeering activity" for the Racketeer Influenced and Corrupt Organizations Act, includes violations of 18 U.S.C. § 1341 (mail fraud), § 1343 (wire fraud), and § 1344 (bank fraud).
McIntosh contends his indictment fails to allege a violation of § 1957(a) because the indictment does not sufficiently specify any "specified unlawful activity." He asserts this is a "jurisdictional" defect in the charging instrument. If it were a defect, and if the defect were in fact "jurisdictional," it could be asserted in this § 2255 proceeding despite McIntosh's plea of guilty and a decision in his direct appeal. See Kelly v. United States, 29 F.3d 1107, 1113 (7th Cir. 1994) ("Because a jurisdictional defect cannot be procedurally defaulted in the first place, it is therefore a non sequitur to suggest that a procedural default cannot be overcome because the defendant has not made an adequate showing of `cause.'"); accord, Borre v. United States, 940 F.2d at 217 (guilty plea waives all non-jurisdictional issues other than knowing and voluntary nature of the plea).
The court finds no defect, however, and even if this were a defect, it would not be "jurisdictional" in the sense that it could not be waived by McIntosh's plea of guilty. See Hugi v. United States, 164 F.3d 378, 380-81 (7th Cir. 1999) (explaining different uses of term "jurisdictional" in federal criminal law, but noting that subject-matter jurisdiction in every federal criminal prosecution comes from 18 U.S.C. § 3231), citing United States v. Martin, 147 F.3d 529, 532 (7th Cir. 1998) ("once a defendant pleads guilty in `[a] court which has jurisdiction of the subject matter and of the defendant, as did the court in the instant case,' the court's judgment cannot be assailed on grounds that the government has not met its burden of proving `so-called jurisdictional facts.'"). If failure to prove "so-called jurisdictional facts" does not support collateral relief after a guilty plea, as in Martin, then surely a failure merely to allege those same facts in the indictment (a factual basis was shown in this case in the plea colloquy) does not undermine the conviction.
An indictment is sufficient if it contains the elements of the charged offense and fairly informs the defendant of the charge that must be defended. See Hamling v. United States, 418 U.S. 87, 117 (1974). The indictment must also enable the defendant to plead a prior acquittal or conviction to preclude future prosecutions for the same offense. Id. The words of the indictment therefore must "themselves fully, directly, and expressly, without any uncertainty or ambiguity, set forth all the elements necessary to constitute the offense intended to be punished." Id., quoting United States v. Carll, 105 U.S. 611, 612 (1882).
The money laundering indictment against McIntosh easily satisfies this standard. The language of the indictment tracks the language of 18 U.S.C. § 1957(a) and identifies the transaction in question. The indictment alleges: "On or about the 16th day of April, 1997, within the Southern District of Indiana, and elsewhere," McIntosh "did knowingly engage in and attempt to engage in a monetary transaction with criminally derived property in an amount greater than $10,000; that is, by presenting cashier's check #516537297 issued by Bank One Wisconsin, to Dreyer Reinbold, Inc., Indianapolis, Indiana, in the amount of $28,900 to purchase a vehicle, which property was the proceeds of a specified unlawful activity; that is monies obtained by a scheme to defraud Bank One Corporation, Milwaukee, Wisconsin."
McIntosh would have no difficulty pleading the decision in this case as a bar to a future prosecution for money laundering in his purchase of the vehicle from Dreyer Reinbold on or about April 16, 1997, and the indictment gave him ample notice of the charge against him.
McIntosh contends, however, that the indictment is insufficient because it does not allege that the "specified unlawful activity" was a violation of the federal bank fraud statute ( 18 U.S.C. § 1344) and does not allege that Bank One of Wisconsin has its deposits insured by the F.D.I.C. The Seventh Circuit has thoroughly rejected similar arguments in money laundering cases. In United States v. Gabel, the court said:
The offense of money laundering is the act of designing a transaction to conceal or disguise the nature or other identifying features of the property. This Court has held that the government is not required to trace the proceeds to a particular sale. United States v. Jackson, 983 F.2d 757, 766 (7th Cir. 1993). Put differently, this offense focuses on the conversion of the fruits of the earlier crimes into other, presumably less detectable, forms. The particular nature or time of those earlier crimes is immaterial. Only when the effort to conduct the financial transaction described by the statute begins does the relevant conduct commence for money laundering itself. Before that, an individual has simply committed burglary, drug dealing, bank robbery, or any of the myriad illegal activities that might lead to ill-gotten wealth. Cf. United States v. Rodriguez, 53 F.3d 1439, 1447 (7th Cir. 1995) (prosecution must only show either actual or constructive knowledge of the tainted source of funds laundered to support a conviction under § 1956(a)(1)(B)(i)); United States v. Hardwell, 80 F.3d 1471 (10th Cir. 1996); Tenth Survey of White Collar Crime: Money Laundering, 32 Am. Crim. L. Rev. 499 (1995). While the statute requires that the money laundered be the fruit of an illegal act, there is no requirement that the government link the money laundered to a specific criminal act.85 F.3d 1217, 1224 (7th Cir. 1996) (emphasis added) (holding in prosecution under 18 U.S.C. § 1956 that the underlying criminal conduct that generated proceeds for money laundering transaction did not "commence" the charged offense and was not "relevant conduct" for purposes of determining defendant's criminal history under U.S.S.G. § 4A1.2(e)(1) and § 1B1.3); accord, United States v. Mankarious, 151 F.3d 694, 701-03 (7th Cir. 1998) (district court's dismissal of mail fraud counts did not mandate reversal of money laundering convictions under § 1956 because money laundering conviction does not require proof of a specific predicate offense); United States v. Jackson, 983 F.2d 757, 766 (7th Cir. 1993) (§ 1956 "does not require that the government trace the proceeds to a particular sale"), citing United States v. Blackman, 904 F.2d 1250, 1257 (8th Cir. 1990); see also United States v. Smith, 44 F.3d 1259, 1264 (4th Cir. 1995) (indictment alleging violation of § 1957(a) was sufficient in alleging only that money in "laundering" transaction was proceeds of otherwise unspecified wire fraud).
The indictment's reference to a scheme to defraud Bank One was sufficient here. Contrary to McIntosh's argument, the foregoing decisions by the Seventh Circuit show that the grand jury did not need to specify whether it believed the "specified unlawful activity" amounted to a violation of 18 U.S.C. § 1344 (bank fraud), or instead § 1341 (mail fraud), or instead § 1343 (wire fraud). In terms of ensuring that the indictment would enable the defendant to plead a prior acquittal or conviction to avoid future prosecutions for the same offense, the indictment charged only money laundering in the purchase of the vehicle from Dreyer Reinbold in Indianapolis with a specific instrument on or about April 16, 1997. The grand jury and the government did not need to tie the funds used in the transaction identified in the money laundering charge to "a specific predicate offense." United States v. Mankarious, 151 F.3d at 702, citing United States v. Jackson, 983 F.2d at 766.
McIntosh also contends the indictment's allegation of "specified unlawful activity" fails to invoke the court's jurisdiction because an earlier indictment for bank fraud had been dismissed on the United States' motion. The motion to dismiss the bank fraud indictment was based on a violation of the Speedy Trial Act that was recognized after lengthy plea negotiations had broken down.
The disposition of the bank fraud indictment is irrelevant here (and it would not be a "jurisdictional" defect even if it were a defect). Just as there is no requirement that the indictment for money laundering also have alleged each of the elements of the underlying "specified unlawful activity," there is similarly no authority for McIntosh's argument that the bank fraud charge was rendered ineligible as the predicate unlawful activity for the money laundering charge because it was dismissed.
A person (such as, say, a banker) can violate the money laundering statute without even having participated in the "specified unlawful activity" that supports the money laundering charge. Even where the government believes the same person committed both crimes, it is not required to prosecute the "specified unlawful activity" as a precondition of obtaining a conviction on the money laundering charge. The government can prove a money laundering charge under § 1957 if it proves only that the defendant knew the funds in the "laundering" transaction were "derived from specified unlawful activity." See 18 U.S.C. § 1957(a); United States v. Gabriele, 63 F.3d 61, 65 (1st Cir. 1995). Even where the government formally charges the money laundering defendant with a separate offense constituting the "specified unlawful activity," acquittal on the underlying charge does not necessarily defeat the money laundering charge. United States v. Mankarious, 151 F.3d at 703 ("Since a money laundering conviction does not require proof of a specific offense, we fail to see how the dismissal of the specific mail fraud charges had any effect on the money laundering counts."). Similarly here, the dismissal of the earlier bank fraud indictment had no effect on the validity of the later money laundering indictment, let alone the court's jurisdiction over that indictment.
In light of these precedents, it is not surprising that all members of the Court of Appeals panel that affirmed McIntosh's sentence recognized that his challenge to the money laundering indictment was doomed to failure. See United States v. McIntosh, 198 F.3d at 1002 (majority opinion) (challenge to indictment's failure to specify federal jurisdictional facts for underlying bank fraud was frivolous); id. at 1010 (Rovner, J., dissenting in part) (recognizing challenge would have been futile). The indictment to which McIntosh pled guilty did not suffer from any defect, jurisdictional or otherwise, that would justify relief.
Accordingly, McIntosh's petition for relief pursuant to 28 U.S.C. § 2255 is denied, and this action must be dismissed with prejudice. Judgment consistent with this Entry shall now issue.
So ordered.
FINAL JUDGMENT
The court, having this day made its Entry, it is hereby ORDERED, ADJUDGED, AND DECREED that petitioner Carlton McIntosh's petition for relief pursuant to 28 U.S.C. § 2255 is denied, and Cause No. IP 00-222-C is dismissed with prejudice.