Petition for Writ of Certiorari — Forand v. United States (No. 84-224)

Office- Supreme Court, U.S,

r tet D

AUG 6 [964

NO. |

| ALEXANDER L. STEVAS,

jj CLERK

in the

Supreme Court

of the

United States

October Term, 1984

PAUL MICHAEL FORAND

Petitioner

vs.

UNITED STATES OF AMERICA

Respondent

) PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

AMANDA MAXWELL PETER D. AIKEN

Suite 300 Counsel of Record

5901 SW 74th St. Suite 300

Miami, F1. 33143 1700 Los Olas Blvd.

(305) 667-1009 Ft. Lauderdale, F1. 33301

(305) 462-4600

Counsel for Petitioner

QUESTION PRESENTED FOR REVIEW

I.

WHETHER THE COURT HAS EXTRA-TERRITORIAL

JURISDICTION UNDER 21 U.S.C. §841(a\1) WHEN

NEITHER THE FACE OF THE STATUTE NOR

LEGISLATIVE HISTORY EVINCE ANY INTENT FOR

EXTRA-TERRITORIAL JURISDICTION AND WHEN

ANOTHER STATUTE, 21 U.S.C. §995a IS

SPECIFICALLY ENACTED TO COVER EXTRA-

TERRITORIAL JURISDICTION.

TABLE OF CONTENTS

Page

QUESTION PRESENTED FOR REVIEW ....... i

TABLE OF CONTENTS ........------+:eeeee:: ii

TABLE OF AUTHORITIES ...........-.------ iii

CITATION TO OPINION BELOW ............-. 1

Pi) 3s yy rote te rere ery 1

STATUTES INVOLVEDIN THECASE....... 1

STATEMENT OF THE CASE ...........------ 1

REASONS FOR GRANTING THE WRIT ....... 5

CES SIS | nics vk ceva serene ee eee 14

SPER... ee App. 1-33

TABLE OF AUTHORITIES

Cases Page

Blackmar v. United States,

re 7

Busic v. United States,

Ce 6, 11, 12

Foley Bros. v. Filardo,

336 U.S. 281 (1949) ........ Pre Pata e raat o.0 7

Ladner v. United States,

I 12

Preiser v. Rodriguez,

re 11

Simpson v. United States,

a 11,12

United States v. Baker,

609 F.2d 134 (5th Cir. 1980)................. 8

United States v. Eagan,

501 F. Supp. 1252 (S.D.N.Y.1980)............ 8

United States v. Hayes,

ee ee ane Ge. ADOL).... «we eee 8

United States v. Newball,

524 F. Supp. 715 (E.D.N.Y. 1981)............ 8

ili

TABLE OF AUTHORITIES (Continued)

Cases Page

United States v. Riker,

670 F.2d 987 (11th Cir. 1982)................ 8

Statutes

ema ne irae oh nce Men sagt ony: 6

Pe ree ee eee 6

ee ee yo eee 1, 3, 6, 9

ee ee EE G8 vies nek ee aa ae S, 7,

11, 12,13

Se I Foe cc oso Ue ek es waa ees 1

Re 5 eS 1, 6, 7,

8,11, 12

FI ren Pee a ied Ae Ge %,

9, 10

5 FA xg pV wr’ So whew bw Da SS i

OPINION BELOW

The Opinion of the Court of Appeals is reported at

732 F.2d 1076 (2d Cir. 1984) (A 1-28).'

JURISDICTION

The judgment of the Court of Appeals for the

Second Circuit was entered on April 12, 1984. (A. 1-28).

A timely petition for rehearing was denied on May 8,

1984. (A.29) An Order extending the time thirty days

for filing the petition was entered on June 27, 1984. (A.

30). The jurisdiction of this Court is invoked under 28

U.S.C. §1254(1).

STATUTES INVOLVED

The case sub judice involves 21 U.S.C. §841, 21

U.S.C. §846, 21 U.S.C. §955a, and 21 U.S.C. §959. (A.31-33).

STATEMENT OF THE CASE

Petitioner Paul M. Forand was arrested at his

home on February 14, 1983, and subsequently charged

in Count I of an eight Count Indictment with conspiracy

to possess with intent to distribute controlled substances,

and aiding and abetting such distribution, in violation

of 21 U.S.C. §846.

Also charged in Count I are co-defendants Mahlon

Clark, Eduardo Orozco-Prada and Humberto Orozco-

‘The symbol “A” refers to the appendix attached hereto.

Prada.’ Petitioner and co-defendant Clark are only charged

in Count I. The remaining co-defendants are charged

with various violations of the financial control laws in

the remaining seven counts. Judgments of conviction

were entered against all four defendants in the United

States District Court for the Southern District of New

York following a seven week jury trial.

The government’s theory of the case as presented

to the jury was that Eduardo Orozco and his company,

Cirex International (“Cirex”) moved currency generated

by the sale of controlled substances through the

international financial system. (T.25)* The government

presented evidence of numerous deposits into Cirex’s

accounts. At trial, however, the government presented

evidence of only one deposit which it asserted was

connected with a contraband transaction. The total of

that deposit was $270,000.

The government’s theory of the Petitioner’s

involvement with the conspiracy alleged in Count I

involves that $270,000 deposit.‘ The government alleges

that the $270,000 deposit was made by the

Petitioner on March 4, 1981.

*Petitioner was indicted along with eight co-defendants. Two

of those co-defendants were never arrested, one dropped out of

the trial soon after it commenced after negotiating a plea and the

fourth was acquitted. Those listed above completed the trial with

the Petitioner.

*The symbol “T” refers to the trial transcript.

‘Although it is alleged that Petitioner made other deposits at

Cirex, the other deposits were never connected with contraband

transactions nor were they related to the charges against Petitioner.

The government stated that on the following day,

Eduardo Orozco instructed that the $270,000, which

was deposited at Cirex, be transferred from Cirex’s

account to the account of Collier Shipbuilding Co. in

Bayou La Batre, Alabama, where it was used to purchase a

vessel named the Northern Edge. The owner of Collier

Shipbuilding testified at trial that he did sell a vessel

called the Northern Edge to Mahlon Clark in March of

1981. (T. 1974) The government introduced evidence

that the Northern Edge was subsequently taken to

Columbia where it was stopped by the Columbian

authorities on May 10, 1981, and found to have marijuana

aboard. (T. 3530) There was testimony that Clark and

three American crewman had been arrested on the

Northern Edge May 10, i981 in Columbian territorial

waters. The Northern Edge was heading away from

the Columbian coast when detained.

There was absolutely no way to discern the

destination of the Northern Edge. No evidence whatsoever

was introduced to indicate the country to which the

Northern Edge was travelling or where the cargo of

marijuana was intended to be delivered. Clark was

arrested in Seattle, Washington in January of 1983,

approximately two years after the Northern Edge was

detained in Columbia.

The defense offered a map of the world into evidence

to assist the jury.

The government contended that the actual or

intended possession or distribution of controlled

substances need not occur within the United States for

jurisdiction under 21 U.S.C. §841, but the trial court

failed to embrace this theory. The court did instruct

the jury that “if you find that a defendant possessed

with intent to distribute controlled substances, you

may not consider this as a factor in determining whether

the defendant is guilty of Count I unless the controlled

substances were intended to be distributed in the United

States.” (T. 3787)

The defendants argued at trial and on appeal that

there was no jurisdiction to prosecute this offense under

21 U.S.C. §841 in that §841 was not intended to be

applied extra-territorily. The defendants also argued

at both the trial and appellate level that even under

the Court’s interpretation of §841 there was a lack of

jurisdiction in that absolutely no evidence whatsoever

was offered to indicate that the marijuana was intended

to be possessed or distributed within the United States.

The defense submitted that although it was an American

vessel with an American crew, this offered no proof

whatsoever that the Northern Edge was headed for

the United States.

The Second Circuit Court of Appeals concluded

that there is jurisdiction under §841 if a distribution of

controlled substances is intended within the United

States. Although the appellant court stated “there was

sufficient evidence for the jury to conclude that appellants

conspired to aid and abet the distribution of drugs

within the United States”, they did not quote any evidence

to support that conclusion. (A.26) The conviction of the

Defendants as to Count I was affirmed.

REASONS FOR GRANTING THE WRIT

THIS PETITION FOR WRIT OF CERTIORARI

RAISES AN IMPORTANT ISSUE OF

STATUTORY CONSTRUCTION. THE

GRANTING OF THIS PETITION FOR WRIT

OF CERTIORARI IS NECESSARY TO

CLARIFY THE PROPER APPLICATION OF

THE STATUTES INVOLVING ARRESTS

OUTSIDE THE TERRITORIAL UNITED

STATES. THE APPLICATION OF THIS

STATUTE IS GF MAJOR IMPORTANCE IN

THAT IT APPLIES TO INDIVIDUALS OF

ALL NATIONALITIES ARRESTED ALL

OVER THE WORLD BY THE UNITED

STATES GOVERNMENT.

ARGUMENT

Title 21 U.S.C. §841(a)(1) was not intend zd to cover

nor does it cover extra-territorial jurisdiction. The clear

wording of the Statute evinces no indication of extra-

territorality nor did Congress express any invention to

reach acts committed outside the territorial jurisdiction

of the United States when drafting 21 U.S.C. §841(a\(1).

Clearly, 21 U.S.C. §955a is the statute intended to

cover extra-territorial jurisdiction.

Legislative intent is determined by the text of the

statute, its legislative history and applicable canons of

statutory construction. Busic v. United States, 446 U.S.

398 (1980).

Prior to 1970, Congress passed 21 U.S.C.§184(a).

In implementing 21 U.S.C. §184, Congress expressly

made it a crime to possess a controlled substance on

the high seas. However, when Congress enacted the

Comprehensive Drug Abuse Prevention and

Control Act of 1970, it repealed 21 U.S.C. §184(a)

and, in the new 1970 Act, failed to provide any provision

for prosecuting smugglers on the high seas. Clearly,

§841 did not fill the void.

An analysis of the pertinent provisions of Title 21

establishes the intention of Congress to limit the reach

of §841 to the territorial limits of the United States, a

conclusion also mandated by the legislative history.

Section 841 is part of Subchapter I (Control and

Enforcement) of the Comprehensive Drug Act of 1970.

It proscribes the manufacture, distribution, dispensation

and possession with intent to manufacture, distribute

or dispense a controlled substance. But, neither on its

face nor by implication, does it indicate any extra-

territorial pretensions. The canon of construction teaches

that legislation of Congress, unless a contrary intent

appears, is meant to apply only within the territorial]

United States. Fuley Bros v, Filardo, 336 U.S. 281, 285

(1949); Blackmar v. United States, 284 U.S. 421, 437

(1932).

When §841(a\(1) is contrasted with §959 of the

same Act, it is clear that Congress is specific when it

intends a section reach extra-territorially. Section 959

makes it unlawful for any person to manufacture or

distribute a controlled substarice intending or knowing

that such substance will be unlawfully imported into

the United States. Section 959 also contains the specific

statement, “This section is intended to reach acts of

manufacture or distribution committed outside the

territorial jurisdiction of the United States”. 21 U.S.C.

§959. By expressly declaring extra-territorial jurisdiction

as to §959, Congress indicated awareness of the issue

and the intention that only §959 reach extra-territorily.

The legislative history of 21 U.S.C. §955a establishes

that Congress did not intend 21 U.S.C. §841(a)(1) to

apply extra-territorially. In 1980 Congress enacted Section

955a of Title 21 of the United States Code. Pub. L. No.

96-350, §1, 94 Stat. 1159 (1980). Section 955a makes, it

unlawful for any person on board a vessel of the United

States, or on board a vessel subject to the jurisdiction

of the United States on the high seas, to knowingly, or

intentionally possess a controlled substance with intent

to distribute. Section 955a(b) makes it unlawful for a

citizen of the United States on board any vessel to

knowingly or intentionally possess a controlled substance

with intent to distribute.

Additionally, Section 955a(h) contains an express

statement of Congressional intention to reach acts of

possession committed outside the territorial jurisdiction

of the United States, as did §959. Extra-territoriality is

the very point of the 1980 amendment, and the matter

is reviewed at length. See, S. Rep. No. 855, 96th Cong.,

2nd Sess. reprinted in [1980] U. S. Code Cong. & Ad.

News 2785; H.R. Rep. No. 323, 96th Cong., 1st Sess.

(1979). The precipitating reason for the 1980 Amendment

was the inadvertent repeal by the 1970 Act of a pre-

existing high seas provision, §184(a), thereby creating

a statutory void. See, United States v. Riker, 670 F.2d

987 (11th Cir. 1982); United States v. Newball, 524

F.Supp. 715 (E.D.N.Y. 1981).°

The Senate Report states in part:

The Comprehensive Prevention and Control

Act of 1970... is the principal Federal

authority under which drug offenders are

prosecuted. That law inadvertently contained

a section repealing the criminal provision under

which drug smugglers apprehended on the

high seas were prosecuted without creating a

new provision to replace it.

S. Rep. No. 96-855, 96th Cong., 2d Sess., 1 (1980).

‘A small number of cases have inferred a Congressional intent

that 21 - S.C. §84lla")) apply extra-territorially when there is

proof of an intended distribution within the territorial United

States. (weted States u Baker, 609 F.2d 134, 138-139, (5th Cir.

1980) Uni States » Hayes, 653 F.2d 8, 11 (1st Cir. 1981); United

States « Eagan, #1 F Supp. 1252 (S.D.N.Y. 1980) But, these few

cases mostly predate the enactment of §955(a), after which there

is no need to infer Congressional intent.

According to the house report,

This oversight created a statutory void, resulting

in an anomaly in the criminal law where

possession of narcotics and dangerous drugs

on U.S. territory and within the territorial

seas is a Federal crime, while the same conduct

on the high seas is not prohibited under existing

law. The only prosecutable offense in many

cases was conspiracy to import, a very difficult

crime to prove.

H. R. Rep. No. 323, 96th Cong., 1st Sess. 4-5 (1979).

Necessarily, the void also extended to extra-

territorial dryland possession since the rule would be

no different on land. The acknowledgment of the gap,

along with the observation that the only prosecutable

offense in many cases was conspiracy to import (“a

very difficult crime to prove”) seems to seal the point

by the failure to nominate §841— with its less difficult

“possession” and “distribution” aspects —as an alternative.

The House report recommended the most

circumspect and judicious consideration before exercising

any sovereign right of unilateral action in the

accomplishment of national objective. Jd. at 7. The

Justice Department suggested specific revisions to the

language of the bills reflecting the extent of the United

States ability under international law to proscribe rules

of conduct beyond its borders. It recommended that

the legislation supplement §959 “by prohibiting the

extra-territorial possession of controlled substances with

the intent to manufacture or distribute them”. Jd. at

8. The recommendation would have been pointless if

§841’s simpler interdiction of possession and distribution

already did the job. The point of the Department’s

recommendation was jurisdictional concern, and it resulted

in the requirement of more than simple possession:

This subsection is based on the ability of

the United States to prohibit those acts, which

though taking place outside its geographic

jurisdiction will take effect within the United

States. It builds on the concept reflected in

the current section 1009 of the Comprehensive

Drug Abuse Control and Prevention Act of

1970 (21 U.S.C. 959). It differs from that section

in two particulars: (i) where that section applies

to controlled substances in schedules I and II

only, this provision applies to all controlled

substances; and (ii) in addition to the distribution

and manufacture prohibited by section 1009,

this provision proscribes possession with intent

to unlawfully import orknowledge of impending

unlawful importation into the United States.

Id. at 13.

Finally, it was the Justice Department’s position

that the addition of the provision covering extra-territorial

possession and distribution would extend the law’s

reach as far as permitted by international law:

we suggest that the Comprehensive Drug Abuse

Prevention and Control Act be modified to

give greater coverage of off-shore possession

of controlled substances. Under existing laws,

§1009 of the Act, 21 U.S.C. §959, prohibits any

person anywhere in the world from

10

manufacturing or distributing controlled

substances with the intent or knowledge that

they will be imported into the United States.

The statute, we believe, should be amended to

prohibit any person from possessing controlled

substances with intent or knowledge they will

be imported into the United States. In addition,

it should prohibit any person on any vessel

within the customs waters, any person on a U.

S. or stateless vessel on the high seas, or any

U. S. citizen on any vessel on the high seas

from manufacturing or distributing controlled

substances or possessing them with intent to

manufacture or distribute. Such legislation would

extend United States criminal jurisdiction as

far as permitted by international law... .

Id. at 18.

The Government reached beyond its authorized

jurisdiction under 21 U.S.C. §841(aX1), in Count I.

Congress intended 21 U.S.C. §955a, not 21 U.S.C.

§841(aX1), to apply to individuals stopped on the high

seas and charged with possession with intent to distribute

controlled substances since 21 U.S.C. §955a specifically

proscribes such conduct.

Whether a conspiracy is charged or a substantive

offense, it is a basic canon of statutory construction

that a more specific statute will be given precedence

over a more general one, regardless of their temporal

sequence. Busic v. United States, 446 U.S. 398, 406

(1980); Simpson v. United States, 435 U.S. 6, 15 (1978);

Preiser v. Rodriguez, 411 U.S. 475, 489-90 (1973). Any

11

ambiguity concerning the ambit of criminal statutes

should be resolved in favor of lenity. Busic u United

States, 446 U.S. 398, 406 (1980). Simpson 1 United

States, 435 U.S. 6, 14 (1978). “This policy of lenity

means that the Court will not interpret a federal criminal

statute so as to increase the penalty that it places on

an individual when such an interpretation can be based

on no more than a guess as to what Congress intended.

Simpson v. United States, 435 U.S. 6, 15 (1978). Ladner

v. United States, 358 U. S. 169, 177-178 (1958).

Clearly, §955a is more specific to the crime charged

here. Section 955a contains an express statement of

congressional intention to reach acts of possession

committed outside the territorial jurisdiction of the

United States while §841(aX1) contains no reference to

the extra-territorial jurisdiction in its text, its legislative

history or in the canons of statutory construction. Further,

even though Petitioner contends there is no jurisdiction

at all for extra-territorial possession under §841, the

Second Circuit failed to more than summarily address

Petitioner’s assertion that the record is totally devoid

of any evidence indicating an intent to distribute the

controlled substance in the United States which, even

under the Second Circuit’s interpretation of §841(a\1)

leaves an ommission of an essential element for jurisdiction

under §841. The fact that it was an American vessel

with four American crew members headed away from

the coast of Columbia, does not in any manner suggest

an intent to come to the United States. The vessel

could just have easily been headed to any other country.

12

In the present case the Petitioner is charged with

conspiracy to violate §841(aX1) based on alleged possession

occurring wholly outside the territorial limits of the

United States. The government reached beyond its

authorized jurisdiction under 21 U.S.C. §841(aX1) and

Count I should have been dismissed.

CONCLUSION

Petitioner respectfully urges this Court, for the

reasons set forth above, to grant a Writ of Certiorari

and to reverse the decision below.

Respectfully submitted,

PETER AIKEN

Counsel of Record

Suite 300

1700 Los Olas Blvd.

Ft. Lauderdale, F]. 33301

(305) 462-4600

AMANDA MAXWELL

Suite 300

5901 SW 74th St.

Miami, FI]. 33143

(305) 667-1009

Counsel for Petitioner

14

CERTIFICATE OF SERVICE

I hereby certify that on this ___ day of August,

1984, three copies of the Petition for Certiorari were

mailed, postage prepaid, to the Honorable Rex E. Lee,

Solicitor-General of the United States, United States

Department of Justice, 10th and Constitution Avenue,

N.W., Washington, D.C. 20530.

15

Appendix

APPENDIX INDEX

Page

Copy of Judgment of Court below......... App. 1-28

Order Denying Rehearing ............... App. 29

Order Granting Continuance............. App. 30

BE hae CAG AS KERNS AA Wanda App. 31-33

App. 1

UNITED STATES COURT OF APPEALS

For the Second Circuit

Nos. 667, 704, 668, 669— August Term, 1983

Argued January 18, 1984 Decided April 12, 1984

Docket Nos. 83-1264, 1265, 1272, 1332

United States of America,

Appellee,

ales

Eduardo Orozco-Prada, Humberto Orozco-Prada,

Paul Forand and Mahlon Clark,

Defendants-A ppellants.

Before:

Feinberg, Chief Judge,

Van Graafeiland and Kearse, Circuit Judges.

Appeal from judgments of conviction stemming

from money laundering operation and from capture of

vessel containing marijuana. Appellants Eduardo Orozco-

Prada, Paul Forand and Mahlon Clark argue primarily

App. 2

that there was insufficient evidence to sustain their drug

conspiracy conviction. Appellant Humberto Orozco-

Prada argues primarily that there was insufficient evi-

dence to sustain his conviction for conspiracy to defraud

the United States and to commit various offenses against

the United States.

Judgment withheld on Eduardo Orozco-Prada’s drug

conspiracy conviction. Affirmed on other convictions.

as

MICHAEL S. FELDBERG, New York, NY, Assis-

tant United States Attorney for the

Southern District of New York (Rudolph

W. Giuliani, United States Attorney for

the Southern District of New York,

Roanne L. Mann, Assistant United States

Attorney, of Counsel), for Appellee.

Peter H. Morrison, New York, NY (Morri-

son, Paul & Beiley, P.C., Kevin T. Rover,

of Counsel) for Defendant-Appellant

Eduardo Orozco-Prada.

RoBpert M. Simets, New York, NY, for

Defendant-Appellant Humberto Orozco-

Prada.

Rex RYLAND, Jr., South Miami, FL, for

Defendant-Appellant Paul Forand.

LAURENCE B. FINEGOLD, Seattle, WA (Jon R.

Zulauf, of Counsel), for Defendant-

Appellant Mahlon Clark.

App. 3

FEINBERG, Chief Judge:

Eduardo Orozco-Prada (Eduardo Orozco), Humberto

Orozco-Prada (Humberto Orozco), Paul Forand and

Mahlon Clark appeal from judgments of conviction en-

tered in the United States District Court for the Southern

District of New York, following a seven-week trial before

Gerard L. Goettel, J., and a jury.

Appellant Eduardo Orozco headed an organization

called Cirex International. Betwcen 1978 and 1982, this

organization laundered more than $150,000,000 in cash.

The government’s investigation, performed with the aid

of undercover agent Edward Guiilen who posed as a bank

Officer, established that the organization received large

amounts of cash from various cities within the United

States and from outside the country, and deposited the

cash into different bank accounts maintained by Eduardo

Orozco in his own name, in the names of other individ-

uals and in the names of several Panamanian corpora-

tions. This money was then rapidly transferred into other

accounts and ultimately outside the country. Cirex

charged a commission for the service. The government

argued at trial that a large percentage of the cash depos-

ited into Cirex accounts constituted the proceeds of do-

mestic drug transactions. Appellant Humberto Orozco,

Eduardo Orozco’s older brother, was a bookkeeper and

record-keeper at Cirex.

Appellant Forand deposited a total of over $1,000,000

in cash with Cirex between November 1980 and Septem-

ber 1981. In particular, on March 4, 1981, he deposited

$270,000 in cash. The next day, Eduardo Orozco in-

Structed that this money be transferred to the bank

account of a shipbuilding company in Alabama. The

money was then used to purchase a vessel called the

App. 4

Northern Edge. Appeliant Clark was the captain of this

vessel at the time it was captured in Colombian territorial

waters carrying a large amount of marijuana.

Following a two-year government investigation, appel-

lants—along with other individuals—were indictcd on

multiple counts. Count One charged all four appellants

with conspiring to distribute and to possess with intent to

distribute Schedule I and II controlled substances, and to

aid and abet such distribution and possession, in violation

of 21 U.S.C. § 846. Count Two charged Eduardo Orozco

and Humberto Orozco with conspiring to defraud the

United States and to commit currency and other offenses

against the United States, in violation of 18 U.S.C. § 371.

Counts Three and Four charged Eduardo Orozco and

Humberto Orozco with making false statements in a

matter within the jurisdiction of the Internal Revenue

Service, in violation of 18 U.S.C. § 1001. Count Five

charged Eduardo Orozco with violating the Travel Act, 18

U.S.C. § 1952. Count Six charged Eduardo Orozco and

Humberto Orozco with acting as a financial institution

without filing Currency Transaction Reports for deposits

exceeding $10,000, in violation of 31 U.S.C. §§ 1081,

1059. Count Seven charged Eduardo Orozco with import-

ing cash into the United States in amounts exceeding

$5,000, without filing Reports of International Transpor-

tation of Currency or Monetary Instruments in violation

of 31 U.S.C. §§ 1101, 1059.

The jury returned guilty verdicts against Eduardo

Orozco on Counts One, Two, Four, Five, Six and Seven;

against Humberto Orozco on Count Two; against Forand

on Count One and against Clark on Count One. Hum-

berto Orozco was found not guilty on Counts One, Four

and Six. Count Three was dismissed at the end of the

government’s case.

App. 5

Judge Goettel sentenced Eduardo Orozco to cight years

imprisonment on Count One and five years on cach of the

other counts, and made all sentences concurrent. He also

imposed on Eduardo Orozco a total committed fine of

$1,035,000 and levied the costs of prosecution against

him. Humberto Orozco was sentenced to 18 months

imprisonment and a $5,000 fine; Forand to six months in

a community treatment center, a three-vear probationary

term and a $25,000 fine: and Clark to six months impris

onment and three years probation

Appellants raise a great number of different argu

ments. In particular, all three appellants convicted on

Count One arguc that there was insulficient evidence to

sustain then drug conspiracy convictions. They contend

that the link between their activitics and actual drug

transactions in the United States was too tenuous to

support their conviction. Humberto Orozco, who was

acquitted on Count One, argues primarily that there was

insufficient evidence to support his conviction on Count

Two. He argues that his presence at Cirex, even if coupled

with knowledge of the ongoing activities, did not constt-

tute sufficient proof of participation in a conspiracy. For

reasons stated hereafter, we affirm the judgment of the

district court, except that we withhold judgment for 30

days on Eduardo Orozco's conviction on Count One to

allow the government to choose between resentencing or a

new trial, as more fully set forth below.

I. Eduardo Orozco

A. The Indictment

We first consider Eduardo Orozco’s argument that

Count One failed to charge a crime. Count One charged

that Eduardo Orozco and others conspired both to violate

App. 6

and to aid and abet the violation of 21 U.S.C. § 841,

which, among other things, makes ‘t a crime “to . .

distribute . . . or possess with intent to . . Geta

. a controlled substance.” The indictment alleges that

the means used by Eduardo Orozco and others to further

the conspiracy was to provide “a money laundering ser-

vice involving currency deposits and check and wire

transfers.” Eduardo Orozco argues that simply dealing in

the cash preceeds of transactions involving controlled

substances is not a violation of section 841 and that,

therefore, Count One fails to charge a conspiracy to

violate this provision.

We find that this argument, on this record, has no

merit. As we stated in United States v. Barnes, 604 F.2d

121, 154-55 (2d Cir. 1979), cert. denied, 446 U.S. 907

(1980),

Importers, wholesalers, purchasers of cutting mate-

rials, and persons who “wash” money are all as

necessary to the success of the venture as is the

retailer. They can all be held to have agreed with one

another in what has been called a “chain” con-

spiracy.

Similarly, in United States v. Perry, 643 F.2d 38, 44 (2d

Cir.), cert. denied, 454 U.S. 835 (1981), the majority heid

that defendants who “agreed to distribute diluents with

the intent that they be mixed with heroin and distributed

by one or more heroin networks” could be-convicted

“under 21 U.S.C. § 846 of couspiring to violate 21

U.S.C. § 841 by aiding and abetting the distribution of

heroin.” The court stated that “the knowing supply of a

raw material necessary for the commission of a crime by

another constitutes aiding and abetting that crime.” And,

in United States v. Rush, 666 F.2d 10, 11 (2d Cir. 1981)

App. 7

(per curiam), we held that an individual who “supplied

the cash which made the illegal venture possible” could be

convicted of conspiring to import marijuana mto the

United States with intent to distribute it. Read in conjunc

tion, these cases stand for the proposition that an agree

ment to engage in actions that are itieeral to the success

of a drug venture prohibited by 21 ULS.C. § 841 such as

laundering proceeds, or supplying cash or raw mate

rials—violates 21 U.S.C. § 846 as a conspiracy to aid and

abet the distribution of controlled substances

This case ts different from Bollenbach v. United States,

326 U.S. 607 (1946), and United States v. Freeman, 498

F.2d S69 (2d Cir. 1974), upon which appellant heavily

relies. In Bollenbach, the Court held that a defendant

who helped dispose of transported securities that had

been in interstate commerce could not properly have been

convicted “for having conspired to transport securities

across State lines merely on proof that he. . . helped to

dispose of the stolen securities affer the interstate trans

portation was concluded.” 326 U.S. at 611 (emphasis

added). Similarly, in /reeman, we held that “the mere

fact that a person ‘receives, relieves, comforts or assists’

one who has been a member of an aborted or completed

conspiracy docs not make him a participant in the con-

spiracy or liable for substantive crimes committed during

the pendency of the conspiracy.” 498 F.2d at $75.

Eduardo Orozco argues that these cases support his

contention that the mere handling of the procecds of drug

transactions is not punishable under section 841. In this

case, however, the indictment charges more than the mere

handling of proceeds. It charges a conspiracy to aid and

abet the distribution of controlled substances by means of

a money laundering organization and identifies one in-

stance (the Northern Edge incident) in which the organi-

App. 8

zation financed and assisted a specific drug transaction.

As noted above, a laundering service of this type furthers

the distribution of controlled substances by concealing

the unlawful provenance of the funds thus keeping in

business the purveyors of such substances.

To say that Count One charged a crime is not equiva-

lent, of course, to saying that Eduardo Orozco was

properly convicted of the crime. To sustain that convic-

tion, we must be satisfied that there was a sufficient link

between Eduardo Orozco's operations and the underlying

drug transactions. We must also be satisfied that Eduardo

Orozco was a member of a conspiracy to aid and abet the

distribution of controlled substances, and that he was not

merely aiding and abetting a conspiracy to distribute such

substances. As we noted in United States v. Perry, supra,

643 F.2d at 46-47, there is an important difference be-

tween “punishing an agreement to commit an act in-

tended to aid another crime (a ‘conspiracy to aid and

abet’) and imposing conspiratorial liability on one who,

without agreement, merely assists conspirators in achiev-

ing their object (an ‘aiding and abetting of a con-

spiracy’).” Only the former was charged in Count One of

this indictment. In the next section we discuss the suffi-

ciency of the evidence that Eduardo Orozco was a mem-

ber of a conspiracy whose object was to aid and abet the

distribution of controlled substances.

B. The Evidence on Count One

Eduardo Orozco also argues that there was insufficient

evidence against him on Count One to justify submitting

the count to the jury. Before evaluating this particular

insufficrency claim, we note that a defendant advancing it

bears “a very heavy burden.” United States v. Soto, 716

F.2d 989. 991 (2d Cir. 1983); United States v. Carson, 702

App. 9

F.2d 351, 361 (2d Cir.), cert. denied, 103 S.Ct. 2456, 2457

(1983). In evaluating the strength of the evidence to

determine whether the jury, drawing reasonable = in-

ferences, could have concluded that the defendant was

guilty beyond a reasonable doubt, see Jackson v. Vir

ginia, 443 U.S. 307, 317 (1979); United States v. Barnes,

supra, 604 F.2d at 157, we must view this evidence in the

light most favorable to the government, Glasser v. United

States, 315 U.S. 60, 80 (1942), und construe all inferences

in the government's favor, United States v. Dazzo, 672

F.2d 284, 288 (2d Cir.), cert. denied, 103 S.Ct. 81 (1982).

With this standard in mind, we proceed to examine the

jury instructions and the evidence itself. In his instruction

on Count One, Judge Goettel did not charge that the

mere handling of proceeds was enough to convict appel-

lant of participating in the conspiracy. He charged, in-

stead, that

you must find that the defendant provided the

money laundering services described above; that he

knew that some of the money was derived from the

distribution of controlled substances; and that he

acted with the intent to further the crime of distribut-

ing Or possessing with intent to distribute controlled

substances—in other words, that he sought by his

actions to make the crime succeed.

To convict a defendant you must also find that

some of the money was derived from controlled

substances that were distributed in the United States.

These instructions, which are not challenged by Eduardo

Orozco, are consistent with the holding of the majority in

United States v. Perry, supra, 643 F.2d at 45: The govern-

ment did not need to identify “any principal at all.” All it

had to show was that “the underlying crime was commit-

ted by someone.”

App. 10

Applying these standards, we conclude that Eduardo

Orozco’s insufficiency claim on Count One lacks merit.

First, Eduardo Orozco’s statement on October 15, 1981,

to Agent Guillen indicates that Orozco was aware that the

money deposited into Cirex accounts came, in large part,

from drug transactions. Eduardo Orozco told Guillen

that “60 to 70%” of the money handled at Cirex was

“coming from drugs.” It was certainly proper for the jury

to conclude from this conversation that Eduardo Orozco

was aware that at least some of the money that Cirex

laundered came from drug transactions.'

There was also sufficient proof for the jury to conclude

that at least some of the money came from domestic drug

dealings. Rogelio Cespedes, a former associate of

Eduardo Orozco, pleaded guilty prior to the trial and

testified as a government witness that he had traveled to

Boston to pick up large boxes of money, and that he had

brought these boxes to New York. Another former associ-

ate of Eduardo Orozco, Gonzalo Castillo, testified that

he had carried briefcases from Boston and Washington,

DC, to New York, and that he gave these briefcases to

Eduardo Orozco. Tanny Diaz, a secretary at Cirex, testi-

fied that Eduardo Orozco and his cousin Rodrigo Men-

doza made several trips to Miami to pick up suitcases of

cash. And Charles Avakian, a private investigator hired

by Eduardo Orozco, testified that he was asked to make

three to five trips a week from Miami to New York, each

time carrying $500,000 in cash.

Eduardo Orozco’s statement was taped by Agent Guillen. Both the

government and " duardo Orozco presented their own, differing tran-

sctimts of the conversation to the jury. For the purposes of this

insufficiency of the evidence claim, we can properly assume that the

yury relied on the government's version. Furthermore, we note that

Agent Guillen testified at trial that “Eduardo Orozco at one point had

stated that 60 10 70 percent came from, in one or other ways, from

drugs ~

App. 11

0 OO

It would be possible for a jury to conclude from this

evidence that the money that was being transported do-

mestically in fact came from abroad initially, and was the

proceeds of foreign drug transactions. But it seems much

more plausible to conclude that the money was the

product of domestic transactions. Indeed, it seems illogi-

cal to transport money from abroad into Boston, Wash-

ington, DC, and Miami, only to have it transported later

to New York. In any event, we need not decide which

inference is more logical. All that we need say—-and we

do so without hesitation—is that it was proper for the

jury to conclude that at least some of the money was the

product of domestic drug transactions.

Eduardo Orozco argues that even on the assumptions

that there was proof of underlying drug transactions, that

some of the money laundered by Cirex derived from

drugs and that some of these drugs were sold domesti-

cally, his conviction would still not be proper unless the

jury had also been presented with enough evidence to

conclude that “he associated himself with the venture,

participated in it as in something that he wished to bring

about, and soughi by his actions to make it succeed.” On

the record before us, we find that Eduardo Orozco had a

sufficient “stake in the venture” to support the con-

spiracy conviction. See Direct Sales Co. v. United States,

319 U.S. 703, 713 (1943); United States v. Falcone, 109

F.2d 579, 581 (2d Cir.), aff'd, 311 U.S. 205 (1940). While

the record does not show the commissions that Eduardo

Orozco charged for laundering money, it indicates that he

was willing to pay middlemen— including Agent Guil-

len—substantial commissions. It was thus proper for the

jury to conclude that his own commissions were also

substantial.

App. 12

In addition, Eduardo Orozco—together with appellants

Forand and Clark—argues that the capture of marijuana

aboard the Northern Edge off the coast of Colombia

could not properly be presented to the jury as further

evidence of the conspiracy because the drugs were not

intended for distribution in the United States. The jury,

however, was instructed that

if you find that a defendant possessed with intent to

distribute controlled substances or aided and abetted

such acts, you may not consider this as a factor in

determining whether the defendant is guilty of Count

| unless the controlled substances were intended to be

distributed in the United States.

In view of this instruction, and on the record before us,

we find that this argument of Eduardo Orozco lacks

merit. It was permissible for the jury to find, in light of

all the evidence presented, that the drugs were intended

for distribution in the United States.

In summary, the evidence supports the jury’s finding

that Eduardo Orozco was guilty on Count One.

C. The Sentence on Count One

Eduardo Orozco was sentenced to a prison term of

eight years and a $25,000 fine on Count One pursuant to

21 U.S.C. § 841(b)(1 (A), which applies to narcotic drugs

such as cocaine. At sentencing, Judge Goettel apparently

relied on this statute on the theory that the evidence

presented to the jury supported the inference that at least

some of the laundered money was the product of cocaine

sales.

Eduardo Orozco argues that he should not have re-

ceived a sentence higher than the maximum—five years

and $15,000—permitted under 2! U.S.C. § 841(b)(1)(B),

App. 13

which covers controlled substances, such as marijuana,

that are not narcotic drugs, because marijuana was the

only controlled substance for which proof of at least one

specific transaction was offered. We disagree with appel-

lant’s contention that proof of a specific transaction is

necessary. It is true that the Northern Edge incident

involved only marijuana, and that the government has

conceded that there was no similar direct proof of cocaine

transactions. However, as we have already stated, the

government need not identify specific drug transactions

to secure a conviction under 21 U.S.C. § 846. United

States v. Perry, supra, 643 F.2d at 45. We also note that

the record contains a statement from Eduardo Orozco to

Agent Guillen that may have led the jury to conclude that

the underlying drug transactions involved cocaine.

Nonetheless, we cannot conclude that the sentence was

proper. Count One of the indictment charged Eduardo

Orozco with a conspiracy punishable under both section

841(b)(1)(A) and section 841(b)(1)(B). The former sec-

tion, which covers cocaine, authorizes a sentence of up to

fifteen years; the latter, which covers marijuana, allows a

sentence of up to five years. Eduardo Orozco’s sentence

of eight years was higher than the penalty authorized by

section 841 (b)(1)(B). But in the absence of a special

verdict, there was no way for Judge Goettel to know

whether the jury intended to convict Eduardo Orozco for

a cocaine-related conspiracy, for a marijuana-related con-

spiracy, or for a conspiracy involving both drugs. See

United States v. Ruggiero, 726 F.2d 913, 921 (2d Cir.

1984). On this issue, this case is similar to United States v.

Quicksey, 525 F.2d 337 (4th Cir. 1975), cert. denied, 423

U.S. 1087 (1976). There, the defendants were charged in

one count of a general conspiracy, 18 U.S.C. § 371, anda

drug conspiracy, 21 U.S.C. § 846. The jury found the

App. 14

defendants guilty under that count without specifying

whether they were guilty of a general conspiracy or of a

drug conspiracy. The defendants received a sentence that

was higher than the maximum sentence permissible for

general conspiracy, but lower than the maximum drug

conspiracy sentence. On appeal, defendants argued that

they should have been sentenced under the general con-

spiracy statute, not the drug conspiracy statute. The

government argued that there was sufficient evidence to

justify conviction for a conspiracy to violate the drug

laws, and that consequently the sentence imposed was

proper. The Fourth Circuit held that “in the absence of a

special verdict, it is not possible to ascertain whether the

jury intended to find defendants guilty of conspiracy to

violate the Travel Act or the Drug Act, or both Acts.” 525

F.2d at 341. The court stated that if the government

agreed to resentencing under the genera! conspiracy stat-

ute, it would affirm the convictions and remand for

resentencing. If the government did not consent, it would

vacate the convictions and remand for a new trial. Id.

The D.C. Circuit reached the same result in Brown v.

United States, 299 F.2d 438 (D.C. Cir.), cert. denied, 370

U.S. 946 (1962), in an opinion written by then Circuit

Judge Burger. In that case, as in Quicksey, the court

found that the record contained evidence from which a

jury could have concluded that the statutes with the

higher penalty had been violated but nonetheless refused

to affirm the district court. See also United States v.

Noah, 475 F.2d 688, 693 & n.7 (9th Cir.), cert. denied, 414

U.S. 821, 1095 (1973). And, a district court in our circuit

has read Brown as requiring a sentencing judge faced with

a conviction on a count that charged the violation of

more than one statute to impose a sentence under the

App. 15

Statute providing the least severe punishment. United

States v. Amato, 367 F. Supp. 547, 549 (S.D.N.Y. 1973).

We realize, of course, that the cases we have just

discussed all involved counts charging the violation of

more than one statute. We have a case, instead, in which

the count charges the violation of a single conspiracy

Statute, but where the conspiracy has two objects. We

believe that this case raises the same problem of ascertain-

ing juror intent that is at issue in counts charging the

violation of multiple statutes. 8 Moore’s Federal Practice

q 8.03(2], at 9-10 (2d ed. 1983). Thus, we cannot uphold

Eduardo Orozco’s sentence on Count One. This case is

unlike United States v. Peters, 617 F.2d 503, 506 (7th Cir.

1980) (per curiam), where the Seventh Circuit upheld a

fifteen-year drug conspiracy sentence, even though

“several of the substantive offenses underlying the con-

spiracy charged [had] maximum sentences of less than 15

years.” In that case, defendant was also convicted of

substantive drug offenses carrying fifteen-year sentences.

The court stated that “since the jury convicted defendant

of the offenses . . . that were the objects of the alleged

conspiracy, it is reasonable to conclude that the jury

found defendant guilty of a conspiracy to commit [those]

substantive offenses.” The case is also different from

United States v. Gomez-Geraldo, 652 F.2d 452, 453 (Sth

Cir. 1981) (per curiam), where the jury found by special

verdict that both marijuana and cocaine were the objects

of the conspiracy.

We note that in Brown v. United States, supra, 299 F.2d

at 440 n.3, the D.C. Circuit suggested that if the govern-

ment chose to retry the case without amending the indict-

ment, it would be the government's responsibility to seek

special verdicts. While this circuit has indicated that

special verdicts are generally not favored in criminal

App. 16

cases, see United States v. Adcock, 447 F.2d 1337, 1339

| (2d Cir.) (per curiam), cert. denied, 404 U.S. 939 (1971);

| United States v. Ruggiero, supra, 726 F.2d at 925-28

(Newman, J., concurring in part and dissenting in part);

cf. United States v. Gallishaw, 428 F.2d 760, 764-66 (2d

Cir. 1970), we have upheld special verdicts when the

information sought is relevant to the sentence to be

imposed. E.g., United States v. Murray, 618 F.2d 892, 895

| n.3 (2d Cir. 1980); United States v. Stassi, 544 F.2d 579,

| 583-84 (2d Cir. 1976), cert. denied, 430 U.S. 907 (1977).

Following the procedure used in Quicksey and Brown,

we withhold our judgment on Eduardo Orozco’s convic-

tion on Count One for 30 days. If the government within

that time consents to a resentencing under 21 U.S.C.

§ 841(b)(1)(B), we will affirm the conviction on that

count and remand for resentencing. If, on the other hand,

the government does not consent, we will vacate Eduardo

Orozco’s conviction on Count One and remand for a new

trial.

D. The Costs of Prosecution

Prior to sentencing, the government submitted a mem-

orandum accompanied by an affidavit of the Comptroller

of the Banco Nacional de Panama. The affidavit stated

that two exhibits that Eduardo Orozco had unsuccessfully

attempted to introduce at trial were fraudulent. These

two exhibits were purported copies of currency reports

prepared by the Banco Nacional de Panama. The Com-

ptroller’s affidavit stated that those reports had not been

prepared by his bank.

Eduardo Orozco requested a presentencing hearing to

contest the government’s allegation that he had sought to

perpetrate a fraud on the court; for this reason, his

sentencing was adjourned for approximately one month.

App. 17

attain

At the hearing, Eduardo Orozco offered no testimony or

other evidence and his attorney declined repeatedly to

disclose the source of the documents. The court con-

cluded that the exhibits were fabrications, and that

Eduardo Orozco had some involvement in the use of

these false documents. For this reason, the judge

enhanced his sentence by levying the costs of prosecution

against him.

Eduardo Orozco contends that his sentence was

enhanced on the basis of an inadequate showing by the

government. He does not challenge the court's authority

to assess such costs, see 28 U.S.C. § 1918(b); United

States v. Burchinal, 657 F.2d 985, 997-98 (8th Cir.), cert.

denied, 454 U.S. 1086 (1981); United States v. Pom-

merening, 500 F.2d 92, 101-02 (10th Cir. 1974), cert.

denied, 419 U.S. 1088 (1975), but, rather, argues that the

court’s reliance on hearsay evidence on the issue of fraud

at sentencing violated the due process and confrontation

clauses. Appellant’s argument is without merit: there is

no question that hearsay evidence may be used at sentenc-

ing. See Williams v. New York, 337 U.S. 241, 250-52

(1949); United States v. Fatico, 579 F.2d 707, 711-13 (2d

Cir. 1978) (Fatico I). The evidence presented to the

district court was far more reliable than the anonymous

informant hearsay information allowed in United States

v. Fatico, 603 F.2d 1053, 1056-57 (2d Cir. 1979) (Fatico

IN), cert. denied, 444 U.S. 1073 (1980). Judge Goettel

correctly observed that “[w]jhen the information comes

from a known source who is not a person of bad charac-

ter, and. . . a bank official would fall in that category,

there is an adequate basis for accepting it even though

hearsay.” As we have often said, the conduct of sentenc-

ing proceedings rests within the sound discretion of the

district court. See, e.g., United States v. Robin, 545 F.2d

App. 18

775, 779 (2d Cir. 1976); United States v. Rosner, 485 F.2d

1213, 1230 (2d Cir. 1973), cert. denied, 417 U.S. 950

(1974). Because we find that Judge Goettel took “appro-

priate steps io ensure the fairness and accuracy of the

sentencing process,” United States v. Robin, supra, 545

F.2d at 779, we see no reason to upset his exercise of

discretion.

11. Humberto Orozco

Humberto Orozco argues that the evidence submitted

at trial was insufficient to permit the jury to convict him

on Count Two. He claims that all that the evidence

establishes is that he performed a series of errands for his

brother, Eduardo Orozco. In particular, he argues that the

evidence does not establish that he had knowledge of the

conspiracy or of the objectives of that conspiracy.

We find that there was sufficient evidence for the jury

to find Humberto Orozco guilty on Count Two. At trial,

the government introduced evidence showing that Hum-

berto Orozco was the principal bookkeeper for Cirex; and

that when cash was brought into Cirex, he was the person

who counted it, broke it down by denomination and

credited it to the account of the appropriate customer. He

also made numerous deposits into an account that Cirex

kept at the foreign exchange house of Deak-Perera.

Humberto C:_-:% also delivered a $5,000 payment to

Agent Guillen. The record shows that Humberto Orozco

became suspicious that Guillen was an FBI agent. Given

the many conspiratorial activities in which Humberto

Orozco participated, it was proper for the jury to con-

clude that he had knowledge of the conspiracy charged in

Count Two and of its objectives. See United States v.

DeFiore, 720 F.2d 757, 763-64 (2d Cir. 1983).

App. 19

This case is different from United States v. Soto, supra,

on which appellant relies. In that case, this court reversed

a conviction on the grounds that the defendant’s “mere

presence” in an apartment used as a drug processing mill

was not sufficient to establish her guilt. We stated that

“fa]bsent some showing of purposeful behavior tending

to connect defendant with the acquisition, concealment,

importation, use or sale of drugs or firearms, participa-

tion in the conspiracies cannot be proven by presence

alone.” 716 F.2d at 991-92. Humberto Orozco would have

been in the same position as the appellant in Soso if the

evidence had shown no participatory acts but only that he

occupied an office within Cirex’s premises. But that was

not so; Humberto Orozco participated in many of the

activities of the conspiracy. We do not suggest that the

evidence against Humberto Orozco was overwhelming. It

was not, which is undoubtedly why he was acquitted on

three of the four counts that went to the jury. But taken in

the light most favorable to the government, the evidence

on Count Two was sufficient. Humberto Orozco also

argues that the “prejudicial spiliover” from the other

counts requires a new trial; the jury’s careful verdicts,

however, show that it considered the evidence on each

count carefully.

lil. Forand

Appellant Forand also raises a sufficiency of the evi-

dence claim with respect to his conviction on Count One.

On this score, he argues primarily that the government

failed to prove his participation in the conspiracy. We do

not accept appellant’s contention. Cirex’s records show

Forand’s involvement with the Orozco organization. In

November 1980, he deposited over $1,000,000 in cash

App. 20

with Cirex, most of which was transferred a week later to

Forand’s bank account in the Cayman Islands. An at-

tempt was later made to conceal Forand’s connection

with the money. Forand also deposited additional large

amounts of cash with Cirex, and the record shows that at

least some of this was transferred quickly to a Forand

personal account in Massachusetts after a commission

was deducted.

Most significantly, Cirex’s records show that $270,000

in cash was brought to Cirex on March 4, 1981 and that a

person identified as “Phillips” was the source of this

cash.? Eduardo Orozco’s notebook contained two entries

for “Phillips,” one with two telephone numbers and the

other with an address. Independent evidence showed that

both phone numbers were listed to Paul Forand at the

address shown in Eduardo Orozco’s notebook. At the

time the cash in question was deposited at Cirex, Paul

Forand lived at that address. It was certainly reasonable

for the jury to conclude that the person identified as

Phillips in Eduardo Orozco’s notebook was Forand.

The record also shows that the $270,000 sum trans-

ferred into Cirex was used to purchase the Northern

Edge. Forand argues, however, that the jury could not

infer from this record his knowledge of the purpose of the

$270,000 transfer or that the Northern Edge would be

used for illicit purposes. We disagree; under the standards

used in assessing claims based on the insufficiency of the

evidence, we hold that it was proper for the jury to

convict Forand on Count One.

The name “Phillips” is spelled in various ways in the Cirex records.

App. 21

IV. Clark

A. Muluple Conspiracies

Appellant Clark argues that while the indictment

charged one conspiracy, the evidence established only

multiple conspiracies. He contends that his conviction ts

thus invalid under the rule laid down in Kotteakos v.

United States, 328 U.S. 750, 767-69 (1946). But in apply-

ing Aotteakos, we have consistently held that the question

whether one or multiple conspiracies are present is a

question of fact, to be resolved by a properly instructed

jury. See United States v. Bagaric, 706 F.2d 42, 63 1.18

(2d Cir. 1983); United States v. Carson, supra, 702 F.2d at

358 n.11; United States v. Alessi, 638 F.2d 466, 472 (2d

Cir. 1980).

The instruction in this case was proper:

I want to remind you that Count | of the indictment

charges all of the defendants except Danies with a

single conspiracy. Proof of several separate conspira-

cies is not proof of the single conspiracy charged in

the indictment, unless one of the several conspiracies

that is proved is the single conspiracy charged in the

indictment.

If you find that a particular defendant was a

member of another conspiracy, not the one charged

in the indictment, then you mus! acquit that defen-

dant of the conspiracy charged in Count 1.

Since the jury was properly charged, the issue that we

must consider is whether there was sufficient evidence to

support the jury’s finding of a single conspiracy. We

conclude that the evidence was sufficient. While Clark’s

App. 22

argument that there were two conspiracies, one centered

around Cirex, and the other centered around the

Northern Edge is plausible, it is not so compelling, under

the standards that we must apply on this appeal, to

persuade us that the jury had to accept it. Indeed, the

money used for the purchase of the Northern Edge was

laundered through Cirex. Furthermore, when stopped by

the Colombian Navy, Clark carried a slip of paper that

listed three Colombian telephone numbers; another slip

containing the same three numbers was found at the Cirex

office following Eduardo Orozco’s arrest. This evidence,

though circumstantial, allowed the jury to infer that there

was a single conspiracy and that Clark was a participant

in that conspiracy.

B. Extra-Territorial Jurisdiction

Clark also argues that Congress did not intend 21

U.S.C. § 841(a)(1) to apply to acts committed outside the

territorial jurisdiction of the United States. As a result, he

contends, his conviction on Count One should be dis-

missed because at the time the Northern Edge was inter-

cepted with a large amount of marijuana on board, he

and the vessel were in Colombian territorial waters, more

than one thousand miles from the mainland of the United

States. According to Clark, only 21 U.S.C. § 955a, and

not 21 U.S.C. § 841(a)(1), applies to the conduct with

which he was charged. He argues that section 955a,

enacted in 1980, was expressly designed to fill a void that

allegedly occurred because the Comprehensive Drug

Abuse Prevention and Control Act of 1970 “inadvertently

contained a section repealing the criminal provision under

which drug smugglers apprehended on the high seas were

prosecuted without creating a new provision to replace

App. 23

it.” S. Rep. No. 96-855, 96th Cong., 2d Sess. 1, reprinted

in 1980 U.S. Code Cong. & Ad. News 2785. Clark

contends that his conduct fell within this void and that it

was therefore inappropriate for Count One to charge him

with conspiring to violate section 841(a)(1).

Though interesting, Clark's analysis is incorrect. The

vacuum that Clark refers to did not include cases in which

an individual detained in extra-territorial waters intended

to distribute controlled substances in the United States.

As the Fifth Circuit clearly stated prior to the enactment

of section 9SSa:

In terms of § 841(a)(1), which proscribes the substan-

tive crime of possession with intent to distribute, we

hold that so long as it is clear that the intended

distribution would occur within the territorial United

States, as in this case, jurisdiction may be main-

tained, where defendants are apprehended outside

the territorial waters, and inside the contiguous zone.

United States v. Baker, 609 F.2d 134, 139 (Sth Cir. 1980).

It is true that defendants in Baker were apprehended

outside the three-mile territorial jurisdiction of the United

States but inside the twelve-mile “customs waters” or

contiguous zone. But the Fifth Circuit had previously

upheld a conviction for conspiracy to distribute mari-

juana in violation of 21 U.S.C. § 846, the same provision

under which Clark was convicted here, which makes

criminal an agreement to violate section 841. United

States v. Cadena, 585 F.2d 1252, 1257 (Sth Cir. 1978). In

that case, the vessel was seized about 200 miles off the

coast of Florida—and thus clearly outside the contiguous

zone.

Similarly, the First Circuit has held that section

841(aW1) does not apply to possession outside the territo-

App. 24

nt lt acne aly i PC LAE AL A Ee aN Os

rial seas unless the possessor intended to distribute the

contraband within the United States. United States v.

Hayes, 653 F.2d 8, 15 (Ist Cir. 1981). In discussing Baker

and Hayes, this circuit has stated that “the intent to

distribute within the United States supplies a jurisdic-

tional nexus that might otherwise be lacking. The intent

to cause effects within the United States also makes it

reasonable to apply to persons outside United States

territory a statute which is not expressly extraterritorial in

scope.” United States v. Muench, 694 F.2d 28, 33 (2d Cir.

1982), cert. denied, 103 S.Ct. 1881 (1983).

The vacuum that Congress was concerned about in-

volved cases in which it was not possible to show intent to

produce effects within the United States. See United

States v. Hayes, supra, 653 F.2d at 16. Section 955a,

enacted as we have said to fill part of that vacuum,

applies to United States vessels or vessels subject to the

jurisdiction of the United States on the high seas, 21

U.S.C. § 955a(a); United States citizens aboard any ves-

sels, id. § 955a(b); and any person aboard any vessel

within the customs waters of the United States, id.

§ 955a(c). We have held that stateless vessels are subject

to the jurisdiction of the United States for the purposes of

section 955a(a). See United States v. Henriquez, No.

83-1186, slip op. at 2419, 2424-25 (2d Cir. March 20,

1984); United States v. Pinto-Mejia, 720 F.2d 248, 260-61

(2d Cir. 1983).

In summary, because section 841(a)(1) properly applies

to schemes to distribute controlled substances within the

United States and because there was sufficient evidence

for the jury to find, under a proper instruction (see

discussion in section II B, supra), that to be the case here,

Clark’s conviction on Count One of conspiring to violate

section 841(a)(1) was proper.

App. 25

In any event, as we stated in the preceding section, it

was proper for the jury to conclude that the Northern

Edge incident was part of a larger conspiracy. Given that

many of the activities of the conspiracy took place within

the United States and that, as we have stated in section II

B, supra, there was sufficient evidence for the jury to

conclude that appellants conspired to aid and abet the

distribution of drugs within the United States, Clark

could have been charged under Count One even if his

statutory argument had merit. However, because his argu-

ment does not have merit and because the jury was

properly instructed as to the Northern Edge incident, we

need not deal with the question whether the Northern

Edge evidence could have otherwise been admitted.

V. Conclusion

Appellants raise a plethora of other issues.’ Were we to

discuss them all in detail, this already lengthy opinion

would be almost interminable. We have examined each of

those issues and find them without merit. In particular,

having reviewed in its entirety the transcript of the pro-

ceeding at which search and arrest warrants were issued,

we conclude that the warrants requested by the govern-

ment were adequately reviewed. Eduardo Orozco claims

that the remarks of the judge who issued the warrants

show that the judge abdicated his role as a “neutral and

detached magistrate.” It is true that the judge’s remark

that the government agents and the Assistant United

States Attorney handling the case “know proof,

know the significance of it and therefore the Court has to

3 We note that some of the arguments we have dealt with were raised

by more than one appellant and for convenience we have not always

identified the additional appellants raising a particular argument.

App. 26

i

accept and does accept their representations without ques-

tion” was unfortunate. However, the judge made this

remark after indicating that he had read the affidavit of

the two agents and had found it to be “among the most

powerful | have read.” Also, when the matter ultimately

came before another judge (Judge Goettel) on a motion

to suppress the evidence obtained in executing the war-

rants, he noted that “there is nothing before me to

indicate that the reviewing magistrate did not adequately

review the affidavit.” We note that substantial deference

is due to the determinations of the judges authorizing and

reviewing the searches, see United States v. Bagaric,

supra, 706 F.2d at 66, and we agree with Judge Goettel

that the record does not compel the conclusion that the

authorizing judge abdicated his role.

We also are unpersuaded by Eduardo Orozco’s argu-

ment that the district court should have held a hearing to

ascertain the veracity of the “probable cause” affidavits.

In Franks v. Delaware, 438 U.S. 154, 155-56 (1978), the

Supreme Court held that such a hearing should be held

only if the defendant made a “substantial preliminary

showing” that an affiant had knowingly and intentionally

made a false statement in his affidavit and if the allegedly

false statement was “necessary to the finding of probable

cause.” See also United States v. Barnes, supra, 604 F.2d

at 151-53. In this case, Eduardo Orozco made no offer of

proof and did not submit a sworn or otherwise reliable

statement of a witness. Moreover, Eduardo Orozco’s

argument that the affidavit was false was premised on his

interpretation of his conversation with Agent Guillen. As

we noted above, multiple interpretations of that conversa-

tion were submitted to the jury, and the jury seems to

have believed the government’s version.

App. 27

We also find that there was sufficient independent

non-hearsay evidence linking Eduardo Orozco, Forand

and Clark to the Count One conspiracy, and Eduardo

Orozco and Humberto Orozco to the Count Two con-

spiracy. Thus, the arguments that co-conspirator hearsay

was improperly admitted lack merit. See United States v.

Terry, 702 F.2d 299, 320 (2d Cir.), cert. denied, 103 S.Ct.

2095 and 104 S.Ct. 482 (1983).

in summary, judgment on Eduardo Orozco’s convic-

tion on Count One is withheld for 30 days. Eduardo

Orozco’s convictions on the other counts, and the convic-

tions of Humberto Orozco, Forand and Clark are af-

firmed.

App. 28

[FILED MAY 8 1984]

UNITED STATES COURT OF APPEALS

SECOND CIRCUIT

No. 83-1264, 83-1265,

83-1272, 83-1332

At a stated term of the United States Court of

Appeals, in and for the Second Circuit, held at the

United States Courthouse, in the City of New York, on

the 8th day of May one thousand nine hundred and

eighty-four.

UNITED STATES OF AMERICA,

Appellee,

Vv.

HUMBERTO OROZCO-PRADA, MAHLON CLARK and

PAUL FORAND, a/k/a “PAUL MICHAEL FORAND”,

a/k/a “PAUL PHILLIPS”, EDUARDO OROZCO-

PRADA, a/k/a “EDUARDO OROZCO”,

Defendants-A ppellants.

A petition for a rehearing having been filed herein

by counsel for the defendant-apellant, Paul Michael

Forand,

Upon consideration thereof, it is

Ordered that said petition be and it hereby is

DENIED.

/s|/ ELAINE B. GOLDSMITH

Elaine B. Goldsmith

Clerk

App. 29

Supreme Court of the United States

No. A-1050

PAUL MICHAEL FORAND,

Petitioner,

v.

UNITED STATES

ORDER EXTENDING TIME TO FILE PETITION

FOR WRIT OF CERTIORARI

Upon Consideration of the application of counsel

for petitioner(s),

It Is Ordered that the time for filing a petition for

writ of certiorari in the above-entitled cause be, and

the same is hereby extended to and including August

6, 1984.

/s/ Thurgood Marshall

Associate Justice of the Supreme

Court of the United States

Dated this 27th

day of June, 1984.

App. 30

iia aes)

STATUTES INVOLVED

21 U.S.C. §841 Unlawful acts

(a) Except as authorized by this subchapter, it

shall be unlawful for any person knowingly or

intentionaliy —

(1) to manufacture, distribute, or dispense,

or possess with intent to manufacture, distribute,

or dispense, a controlled substance; or

(2) to create, distribute, or dispense, or possess

with intent to distribute or dispense, a counterfeit

substance.

21 U.S.C. §846 Attempt and conspiracy

Any person who attempts or conspires to commit

any offense defined in this subchapter is punishable by

imprisonment or fine or both which may not exceed the

maximum punishment prescribed for the offense, the

commission of which was the object of the attempt or

conspiracy.

21 US.C. §955a. Manufacture, distribution, or possession

with intent to manufacture or distribute

controlled substances on board vessels

Vessels of United States or vessels subject to

jurisdiction of United States on high seas.

(a) It is unlawful for any person on board a vessel

of the United States, or on board a vessel subject to

the jurisdiction of the United States on the high seas,

App. 31

a ea

to knowingly or intentionally manufacture or distribute,

or to possess with intent to manufacture or distribute,

a controlled substance.

Citizens of United States

(b) It is unlawful for a citizen of the United States

on board any vessel to knowingly or intentionally

manufacture or distribute, or to possess with intent to

manufacture or distribute, a controlled substance.

Vessels within customs waters

of United States

(c) It is unlawful for any person on board any

vessel within the customs waters of the United States

to knowingly or intentionally manufacture or distribute,

or to possess with intent to manufacture or distribute,

a controlled substance.

Intent or knowledge of unlawful

importation into United States

(d) It is unlawful for any person to possess,

manufacture, or distribute a controlled substance —

(1) intending that it be unlawfully imported

into the United States; or

(2) knowing that it will be unlawfully imported

into the United States.

Extension beyond territorial

jurisdiction of United States

eS ee el

(h) This section is intended to reach acts of

possession, manufacture, or distribution committed outside

the territorial jurisdiction of the United States.

21 U.S.C. §959 Manufacture or distribution for purposes

of unlawful importation

It shall be unlawful for any person to manufacture

or distribute a controlled substance in schedule I or

II—

(1) intending that such substance will be unlawfully

imported into the United States; or

(2) knowing that such substance will be unlawfully

imported into the United States.

This section is intended to reach acts of manufacture

or distribution committed outside the territorial

jurisdiction of the United States. Any person who violates

this section shall be tried in the United States district

court at the point of entry where such person enters

the United States, or in the United States District

Court for the District of Columbia.

App. 33