Petition for Writ of Certiorari — Loehr v. United States

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7 SEP 9 1999

OFFICE OF THE CLERK

In The

Supreme Court of the United States

~~

October Term, 1992

ROBERT LOEHR,

Petitioner,

VS.

UNITED STATES OF AMERICA,

Respondent.

Petition for Writ of Certiorari to the United States Court of

Appeals for the Sixth Cicuit

PETITION FOR WRIT OF CERTIORARI

DAVID A. DODGE

Counsel of Record

DAVID A. DODGE, P.C.

Attorneys for Petitioner

200 N. Division Street

Grand Rapids, Michigan 49503

(616) 459-3850

2607

Ly lata (800) 3 APPEAL « (800) 5 APPEAL « (800) BRIEF 21

ervices, inc.

“

QUESTIONS PRESENTED FOR REVIEW

I. Whether the word “know” in the pre-November, 1991

Sentencing Guidelines included both knowledge and belief, and,

if not, whether the ex post facto clause of the Constitution was

violated when the court computed the petitioner’s Sentencing

Guidelines using a section which did not become effective until

after both the offense and sentencing?

II. Whether a guideline section, promulgated prior to the

enactment of the statute which criminalized petitioner’s

behavior, was correctly applied to petitioner, and whether the

district judge was correct in believing that he did not have the

authority to use a different and less harsh guideline section when

sentencing the petitioner?

III. Whether the Sentencing Guidelines conflict with the

enabling statutes and whether that conflict permits a district

judge to devise a sentence in an unusual case using the statutory

factors rather than the factors mandated by the guidelines?

IV. Whether 18 U.S.C. § 1956(a)(3) is impermissibly

vague and therefore unconstitutional?

V. Whether 18 U.S.C. § 1956(a)(3), as a matterof statutory

construction, authorized sting operations Only as to existing

criminal acts or whether Congress intended to authorize the

authorities to sting individuals whose acts were not previously

Criminal?

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TABLE OF CONTENTS

Page

Questions Presented for Review.................0es0u0. i

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Constitutional Provisions, Statutes and United States

Sentencing Guidelines Involved .................4.. l

Statement OF Whe CAGE cs 6cskeo ae ee eee 3

Reasons for Granting the Writ.............cccccccccns 7

A. Sentencing Guidelines: The Three Level Addition for

“ROWE on oc nukiewiasbaeeee ee eeenas 8

B. Sentencing Guidelines: The Applicability of U.S.S.G.

251 AGM «060 kee’ dcx eee 13

C. Sentencing Guidelines: The Conflict Between the

Guideline Sentencing Scheme and 18 U.S.C. § 3553 14

D. 18 U.S.C. § 1956(a)(3) Is Unconstitutional ...... 17

E. The Scope of the Money Laundering Sting Statute Is

Unclear, and Certiorari Would Be Appropriate to

Interpret This Important Statute................ 23

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Contents

Page

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TABLE OF CITATIONS

Cases Cited:

Bifulco v. United States, 447 U.S. 381 (1980)........... 25

Burns v. United States, 112 S. Ct. 2182 (1991).......... 16

Kolender v. Lawson, 461 U.S. 352 (1983) ............. 18, 19

Ladner v. United States, 358 U.S. 169 (1958)........... 25

Lewis v. City of New Orleans, 415 U.S. 130 (1974) ..... 19

Miller v. Florida, 482 U.S. 423 (1987) ................ 10, 12

Smith v. Goguen, 415 U.S. 566 (1974) ................. 19

United States v. Breque, 964 F.2d 381 (Sth Cir. 1992)

cyte ES 9, 10, 12, 20, 24

United States v. Davern, 937 F.2d 1041 (6th Cir. 1991)

ee. at ala pu Cewwle ans clave ems 6, 15, 16

Sf le Sere Terre eee e LET eee eR Lee eani 16, 17

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Contents

Page

United States v. Hardy, 762 F. Supp. 1403 (D. Hawaii

PE Pee Srey ee Te Te Ty CTT oT eT eT Tee Tees 15

United States v. Loehr, 966 F.2d 201 (6th Cir. 1992)

Spe ARE KALA RERREA URESETRRES © OES Cee 7

United States v. Payne, 962 F.2d 1228 (6th Cir. 1992)

eT Sree ay Pe ey pe ry 11, 12, 20, 24

United States v. Richardson, 925 F.2d 112 (Sth Cir. 1991)

rT rrr ee eer ee ree ere ee 20, 24

Statutes Cited:

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ge. oe e000: Per re eT ere a,

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BSR oe Ee ere ge rere ret 6, 14, 25

Contents

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United States Constitution Cited:

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Rules Cited:

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Other Authorities Cited:

Freed & Miller, 3 Fed. Sent. R. 237 (1991) ............. 15

United States Sentencing Guidelines:

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APPENDIX

Appendix A — Order Entered August 21, 1992......... la

Appendix B — Judgment Dated August 21, 1992 ....... 2a

Appendix C — Order and Decision Filed June 10, 1992

l

OPINIONS BELOW

On June 10, 1992, the United States Court of Appeals for the

Sixth Circuit affirmed prtitioner’s conviction for attempted money

laundering in violation of 18 U.S.C. § 1956(a)(3)(B) (6a). On

August 21, 1992, the United States Court of Appeals denied

Petitioner’s Motion for Reconsideration and Motion to Stay the

Mandate of the Case (la, 2a).

STATEMENT OF JURISDICTION

Petitioner, Robert Loehr, now moves this Honorable Court for

a writ of certiorari and review of the J udgment of the United States

Court of Appeals for the Sixth Circuit, entered in the above titled

cause on June 10, 1992 (6a). The jurisdiction of this Court is

invoked under 28 U.S.C. § 1254 (1 ).

CONSTITUTIONAL PROVISIONS, STATUTES AND

UNITED STATES SENTENCING GUIDELINES INVOLVED

Article 1, Section 9, clause 3 of the United States Constitution

provides in relevant part:

No bill of Attainder or ex post facto law shall

be passed.

The Fifth Amendment to the United States Constitution

provides in relevant part:

No person shall be...deprived of life, liberty,

or property without due process of law...

Title 18 U.S.C. § 1956(a)(3)(B) provides:

Whoever, with the intent...

(B) to conceal or disguise the nature, location,

source, ownership, or control of property

believed to be the proceeds of specified

unlawful activity...

conducts or attempts to conduct a financial

transaction involving property represented by

a law enforcement officer to be the proceeds of

specified unlawful activity, or property used to

conduct or facilitate unlawful activity shall be

fined under this title or imprisoned for not

more than 20 years, or both. For purposes of

this paragraph and paragraph (2), the term

“represented” means any representation made

by a law enforcement officer or by another

person at the direction of, or with the approval

of, a Federal official authorized to investigate

or prosecute violations of this section.

18 U.S.C. § 1956(a)(2) provides in relevant part as follows:

For the purpose of the offense described in

subparagraph (B), the defendant’s knowledge

may be established by proof that a law

enforcement officer represented the matter

specified in paragraph (B) as true, and the

defendant's subsequent statements or actions

indicate that the defendant believed such

representations to be true.

Section 2S1.1(a) of the United States Sentencing Guidelines

(U.S.S.G.) provides as follows:

(1) 23, if convicted under 18 U.S.C. 1956

(a)(1)(A) or (a) (2)(A);

(2) 20, otherwise.

Section 2S1.1(b)(1) Guidelines (U.S.S.G.) provides as

follows:

(1) If the defendant knew that the funds were

the proceeds of an unlawful activity involving

the manufacture, importation, or distribution

of narcotics or other controlled substances,

increase by 3 levels.

Section 5A of the United States Sentencing Guidelines

(U.S.S.G.) provides in relevant part for Criminal History Score II:

Level 18 30-37 Months

Level 21 41-51 Months

STATEMENT OF THE CASE

On October 26, 1990, Robert Loehr was indicted in a one

count indictment charging a violation of 18 U.S.C. § 1956

(a)(3)(B). The indictment alleged that on January 30, 1990, Loehr

attempted to conduct an unlawful transaction involving property

represented by a person acting at the direction of a law

enforcement officer to be the proceeds of drug trafficking.

The trial began On March 5, 1991.

The government’s evidence consisted of the following:

1. An incarcerated drug dealer told government agents that

some years ago, he had purchased automobiles from a Kalamazoo,

Michigan auto dealership using drug proceeds. Petitioner was

employed by that dealership at the time, and the drug dealer

ateen eee

4

claimed that the petitioner knew that the automobiles were

purchased using illegal money.

2. The agents determined that petitioner was currently

working as a car salesman at a different dealership than the one

where the previous sales had allegedly occurred. The petitioner did

not have any managerial authority at this new dealership, and his

sales activities were subject to the approval of the dealership’s

upper management.

3. The agents devised a sting operation to determine whether

the petitioner would participate in a sales transaction which was

allegedly financed with drug proceeds.

4. The drug dealer and his girl friend contacted the petitioner

and indicated that they wished to purchase a new vehicle. During

the discussions, statements were made which indicated that at least

some of the purchase price would be coming from drug sales.

These statements were false because the government was

financing and directing the sting operation. There was no

corroboration of the drug dealer's representations, and the

petitioner had no actual knowledge as to whether the

representations were true or false.

5. The purchase negotiations spanned several weeks. Among

other things, the girl friend asked that the purchase documents

contain the name of a third party. The petitioner agreed, and at least

some of the documents were prepared using that third party’s

name. The government contended that the petitioner intended to

participate in a scheme to conceal the actual purchaser’s identity.

6. In January of 1990, the petitioner submitted some

documents to his management relating to the sale of a car to the

drug dealer and his girl friend. There was conflicting testimony as

5

to how much more had to be done to complete the transaction. The

petitioner argued that the transaction was incomplete because it

had not been approved by management and because additional

forms were required. Several employees of the dealership testified

that the transaction was between 50% complete to almost totally

complete.

7. On January 30, 1990, the girl friend appeared at the

dealership and gave the petitioner $20,000 in cash. This money

was provided by government agents. The petitioner was arrested

while he was counting the money.

On March 8, 1991, a jury convicted the petitioner for the one

charged count.

The presentence investigator determined that the base offense

score was 20, pursuant to U.S.S.G. 2S 1.1 (a)(2). Three points were

added on the grounds that the petitioner “knew that the funds were

the proceeds of an unlawful activity involving the...distribution of

narcotics..." U.S.S.G. 2S1.1 (b)(1). Two points were subtracted for

~eptance of responsibility. U.S.S.G. 3El.1. The criminal history

ss" was II. U.S.S.G. 4A. These computations produced

sentencing guidelines of 41-51 months. U.S.S.G. 5A.

On May 20, 1991, petitioner was sentenced to 41 months in

custody, to be followed by a 2 year period of supervised release.

A timely appeal was taken to the United States Court of

Appeals for the Sixth Circuit. The Petitioner argued that his

conviction should be reversed or his sentence should be modified

for the following reasons:

A. There was insufficient evidence to support the conviction

for attempted money laundering. Specifically, petitioner argued

a

6

that he had not taken a sufficient overt step towards the completion

of the money laundering act and that, as a result, the government

had not proved its case.

B. Loehr argued that the money laundering sting statute was

unconstitutional because it did not sufficiently notify citizens that

previously non-criminal actions were now criminal, because the

statute did not define or limit the type of representations made by

law enforcement officers, and because the statute vested too much

discretionary authority in law enforcement officers to apply the

Statute according to their individual predilections rather than upon

some defined basis.

C. 18 U.S.C. § 1956 (a)(3), the money laundering sting statute,

was a newly enacted statute, and petitioner was apparently its first

target in the Western District of Michigan. Petitioner was not a

drug dealer, and he was receiving no compensation other than a

$50-$100 sales commission for the car sale. Petitioner argued that

Congress did not intend to include individuals such as himself

within the scope of the sting statute. Petitioner further argued that

the “representation” language in 18 U.S.C. § 1956 (a)(3) did not

include a situation where the representation was incredible and/or

where there was no evidence showing that the petitioner believed

the drug related representations made by the individual acting at

the government's behest.

D. Petitioner argued that there was a Jencks Act violation and

that evidence was admitted in violation of Fed. R. Evid. 404 (b).

E. Finally,petitioner raised a number of sentencing guideline

issues. Just prior to his sentencing, the Sixth Circuit had decided

United States v. Davern, 937 F.2d 1041 (6th Cir. 1991). In Davern,

a panel of the court ruled that the a portion of Sentencing

Guidelines were unconstitutional because they were in conflict

with 18 U.S.C. § 3553. Davern was vacated during the appeal

7

process and accepted for en banc review.

Petitioner also challenged the use of a base level of 20,

pursuant to U.S.S.G. 2S1.i ‘a), and the three levels that were added

pursuant to 2S1.1 (b), on the grounds that petitioner “knew” that

the money was drug related.

On June 10, 1992, the Sixth Circuit affirmed petitioner’s

conviction and sentence. (6a) This decision is reported as United

States v. Loehr, 966 F.2d 201 (6th Cir. 1992). The Court ruled that

Loehr’s acceptance of the $20,000 in cash and the completion of at

least some of the documents were substantial steps toward the

execution of the criminal act, justifying his conviction for attempt.

(10a). The Court further ruled that the statute was not vague

because it clearly applied to anyone who had the intent to engage in

the proscribed conduct. (lla). As to the Sentencing Guideline

issues, the Court concluded that the district court’s decision to use

U.S.S.G. 2S 1.1 to determine the base guidelines was not clear error.

(12a) The three level aggravator was appropriate because “the

evidence was sufficient to prove that the defendant had the

necessary knowledge or belief that the source of the funds for the

transaction was from drug proceeds.” (12a). The remainder of

petitioner’s claims were dismissed without specific consideration

(12a.).

Petitioner filed a timely petition for reconsideration and

suggestions for rehearing in banc. This petition was denied without

explanation on August 21, 1992 (la, 2a).

REASONS FOR GRANTING WRIT

There are five reasons for granting the writ. Three reasons

relate to the United States Sentencing Guidelines, one reason is a

significant question of statutory interpretation, and the fifth reason

addresses the constitutionality of the money laundering sting

8

statute, particularly as it is applies to individuals who are neither

professional drug dealers nor professional money launderers.

A. SENTENCING GUIDELINES: THE THREE LEVEL

ADDITION FOR “KNOWLEDGE”

There is a conflict between the Fifth and Sixth Circuits as to

whether the three level addition should apply to a case such as

petitioner’s. The issue involves both an interpretation of a specific

guideline section and a constitutional ex post facto question. This

conflict between Circuits about an important legal issue justifies

this Court’s attention and the granting of the writ.

U.S.S.G. 2S 1.1(b)(1) provides that three levels can be added to

a defendant’s base offense score under certain circumstances. In

January of 1990, when the offense was committed, the guideline

section read as follows:

(1) If the defendant knew that the funds were

the proceeds of an unlawful activity involving

the manufacture, importation, or distribution

of narcotics or other controlled substances,

increase by 3 levels.

In November of 1991, this section was amended by adding the

language “or believed”. The section then read “if the defendant

knew or believed that the funds...”. Amendment 378 to the United

States Sentencing Guidelines. The Sentencing Commission

explained the reason for the modification:

This amendment revises the guideline to

reflect the enactment of subsection (a)(3) of 18

U.S.C. 1956 that authorizes undercover

“sting” operations in money laundering cases.

Such cases differ from those prosecuted under

i eeeeeiineienniaeemmmamuaiieeia

|

9

subsection (a)(l) in that the money being

laundered is not actually criminal proceeds,

but is government “sting” money that an

undercover officer represents to be criminal

proceeds. In all other respects, subsection

(a)(1) and (a)(3) are the same. The effective

date of this amendment is November 1, 1991.

(emphasis in original).

Amendment 378 to the United States Sentencing Guidelines.

The Fifth Circuit addressed the meaning and applicability of

the amendment in United States v. Breque, 964 F.2d 381 (Sth Cir.

1992). The Breque case was decided five days after the Sixth

Circuit rendered its decision in the instant case.

In Breque, the Internal Revenue Service and the United States

Customs Service conducted a joint sting operation. An IRS agent

approached the defendant and represented that she was acting on

behalf of a Florida based organization which needed to exchange

money.

A number of transactions occurred between June of 1989 and

June of 1990 in which dollars were given to the defendant. The

defendant changed those dollars into pesos and charged a fee for

his services. The defendant was arrested after the last transaction.

Among other things, he was convicted of conspiring “to launder

money represented by a law enforcement officer to be the proceeds

of specified unlawful activity (narcotic sales), in violation of 18

U.S.C. 1956 (a)(3)(C).”

The defendant was sentenced to 55 months in prison, in

accordance with the procedures mandated by the United States

Sentencing Guidelines. One of the components of the guideline

computation was a three level increase, pursuant to U.S.S.G.

2S 1.1(b)(1).

10

Breque argued that the three level increase was inappropriate

because he did not “know” that the money was the proceeds of

unlawful activity. In fact, the money was not proceeds of such

activity, but legitimate government funds.

The government argued that the section only required a

“subjective certainty” on the defendant’s part and that accordingly,

the objective truth of the fact was irrelevant.

The Fifth Circuit held that the three level addition was in error

and vacated and remanded the sentence.

In reaching this decision, the Court noted the 1991

amendment to the guidelines, which allowed the adder if the

defendant “knew or believed” that the money laundered had an

illegal source. The Court first concluded that the 1991 amendment

made a substantive change in the guidelines. Accordingly, the

Court reasoned that it would be inappropriate to apply the new

section to a defendant whose crime pre-dated the guideline change.

Cf., Miller v. Florida, 482 U.S. 423 (1987).

The Court then further concluded that the word “believed”

was added because the word “know” was insufficient to cover sting

operations. Since the money was in fact legal money, the defendant

could never “know” that the money had an illegal source. At most,

a defendant could only “believe” that the source was illegal.

Accordingly, since the defendant could not “know” that the

source was illegal and since knowledge was the standard for the

three point aggravator, the three points could not be added when

computing the guideline sentence for a defendant whose sting

related offense pre-dated November 1, 1991.

If Breque were applied to petitioner, his sentence would have

1]

to be vacated and remanded for re-sentencing. This remand would

almost certainly result in a lower sentence because the petitioner’s

guidelines would change from 41-51 months (Level 21) to 30-37

months (Level 18). U.S.S.G. 5A. These guideline ranges do not

overlap one another. Moreover, the district judge originally

sentenced the petitioner at the bottom of the applicable guideline

range; if the district court used the same procedures with the

revised guidelines, the difference would be 11 months.

There is another substantive impact involved in this potential

sentence modification. 18 U.S.C. § 4046 authorizes a “shock

incarceration program.” This program allows an individual to

serve a prison sentence of between 12-30 months by participating

in a6 month, alternative, boot camp program. Petitioner probably

qualifies for the program, except that his sentence exceeds the

Statutory range. However, if the petitioner is correct and if the

sentence is modified to 30 months, he could qualify for this

specialized program and could satisfy his sentence much more

quickly than he can under current conditions. This rather unique

aspect to petitioner’s case further supports this Court’s

consideration.

The conflict between the Fifth and Sixth Circuits is illustrated

by considering two Sixth Circuit cases: the instant case and United

States v. Payne, 962 F.2d 1228 (6th Cir. 1992).

In Payne, a money laundering sting operation took place

between July of 1988 and April of 1989. The defendants were

convicted and sentenced in June of 1991 according to the

procedures mandated by the United States Sentencing Guidelines.

Three levels were added using U.S.S.G. 281.1 (b)(1). One of the

defendants challenged this aggravator on the grounds that the

money was not actually drug money. The Circuit Court affirmed,

but in doing so applied the guideline “knew or believed” language

even though that language did not take effect until five months

12

after the defendants were sentenced. Specifically, the Court held

that “the Guideline indicates that as long as the defendant believes

that the funds were the proceeds of unlawful activity, the Guideline

applies.” 962 F.2d at 1235.

The instant case continues the same approach in that the Court

upheld the aggravator using the same “knew or believed” language

(12a).

Neither Payne nor the instant case addressed the issue reached

by the Breque court of whether the November, 1991 guideline

amendment was substantive and whether there was an problem in

applying the change to an offense completed prior to the

amendment’s effective date.

In Miller v. Florida, 482 U.S. 423 (1987), this Court reversed a

decision of the Florida courts which applied a sentencing guideline

enacted after the crime which was more detrimental to the

defendant than the guideline which was in effect at the time the

crime was committed.

As the Fifth Circuit reasoned in Breque, the guideline change

at issue in the instant case substantively and detrimentally changed

the guideline rules. The “believe” language was specifically added

to deal with the statute which related to petitioner and specifically

made the three point aggravator applicable to petitioner. Prior to

the change, the aggravator would have been inappropriate.

Thus, the Sixth Circuit’s reasoning in Payne and the instant

case is not only contrary to the Fifth Circuit’s decision in Breque,

but contrary to a decision of this Court. Certiorari should be

granted to remedy this conflict.

13

B. SENTENCING GUIDELINES: THE APPLICABILITY OF

U.S.S.G. 281.1 (a)(2)

U.S.S.G. 2S1.1 was originally promulgated to apply to

individuals who were caught in the act of violating the money

laundering laws. The penalties are relatively harsh: a first offender

faces a base guideline offense level of 20, which translates to a

sentence between 33-41 months. U.S.S.G. 2S1.1 (a) and U.S.S.G.

5. This mandatory minimum penalty is a creature of the Sentencing

Commission and was not mandated by Congress.

The sting amendment potentially applies to an entirely

different group of defendants: individuals who were not violating

the money laundering statutes until offered an opportunity to do so

by government agents or those acting at the direction of those

agents.

The level of culpability of such individuals might be far

different from the individuals Congress had originally targeted.

The level of culpability of such individuals might be far different

from the issues which the Sentencing Commission considered

when it originally promulgated the guidelines.

In January of 1990 when the petitioner committed the offense

or in May of 1991 when he was sentenced, no change had been

made to the guidelines to consider the potential impact of the 1988

amendments to 18 U.S.C. § 1956.

Petitioner argued that the district judge was free to consider

other money laundering guideline sections in evaluating his

offense. The district judge did not believe that he had such

authority, and the Sixth Circuit dic not address the issue .

This is a problem which regularly arises when interpreting the

guidelines. The guidelines have been frequently amended since

their original passage, and numerous situations arise where the

14

offense conduct does not neatly fit within the guideline definitions.

Although the guidelines themselves provide some guidance, the

scope of a district judge’s authority is hardly clear.

For this reason, it would be appropriate for this Court to accept

this case and to establish rules which will govern and better define

numerous sentencing decisions that are being made daily by

district judges.

C. SENTENCING GUIDELINES: THE CONFLICT

BETWEEN THE GUIDELINE SENTENCING SCHEME

AND 18 U.S.C. § 3553

There is a substantial dispute among members of the Federal

Judiciary as to the scope of the guidelines and the ability of judges

to respond to unique situations which do not fit neatly within the

guidelines or the statutory scheme.

This case illustrates this dispute and disagreement, and, for

that reason, it would be appropriate to grant certiorari so that this

on going controversy can be resolved.

18 U.S.C. § 3553 (a) states that “the court shall impose a

sentence sufficient, but not greater than necessary, to comply with

the purposes set forth in paragraph (2) of this subsection.”

Paragraph (2) states that the court shall consider deterrence, public

protection, the needs of the defendant, the seriousness of the

offense, and appropriate punishment.

18 U.S.C. § 3553 (b) states that the court shall impose the

sentence mandated by the guidelines “unless the court finds that

there exists an aggravating or mitigating circumstance of a kind, or

to a degree, not adequately taken into consideration by the

Sentencing Commission...”

o-

15

The Sentencing Guidelines mandate a procedure whereby the

guideline sentence is computed and where the court thereafter

considers whether a departure of some kind is appropriate.

U.S.S.G. 1B1.1

On June 20, 1991, after petitioner’s sentencing but prior to the

filing of petitioner’s appeal, the United States Court of Appeals for

the Sixth Circuit decided the case of United States v. Davern, 937

F.2d 1041 (6th Cir. 1991). Davern addressed the question of

whether the guideline approach comported with the enabling

statute. In a 2-1 decision, the Davern panel held that the guideline

section was invalid because it reversed the emphasis mandated by

statute. The majority felt that a court should first determine

whether or not the case was in the heartland of cases addressed by

the Sentencing Commission. If not, the court should be allowed to

impose a sentence which comports with the factors mandated by 18

U.S.C. § 3553 (a). On the other hand, if the case was within the

heartland, then the Court could apply the guidelines as mandated

by statute. 937 F.2d 1043-1047. Chief Judge Merritt’s thoughtful

opinion examined the legislative history and scholarly articles

including an excellent overview by university professors and

editors Freed & Miller, published at 3 Fed. Sent. R. 237 (1991).

This type of concern has also been reflected by other federal

judges who have expressed concern with what they view as

guideline inflexibility and the failure of the guidelines to adhere to

the statutory mandate. See, e.g., United States v. Harrington, 947

F.2d 956, 966-968 (D.C. Cir. 1991); United States v. Kikumura,

918 F.2d 1084, 1119-1121 (3d Cir. 1990) (and the cases there

cited); United States v. Gutierrez, 908 F.2d 349, 353-355 (8th Cir.

1990).

The petitioner’s appeal argued that Davern controlled and was

correctly decided. The petitioner further argued that his case was

not in the heartland in that there was no legislative history to

16

indicate that someone like himself was the primary target of the

statutory amendment. Accordingly, petitioner sought re-

sentencing in a circumstance where the court would first look to

the uniqueness of his case and then, secondarily, to the guideline

rules.

On September 26, 1991, the Sixth Circuit vacated the Davern

decision and granted en banc review.

The en banc decision had not been reached when petitioner’s

appeal was decided, and the Sixth Circuit opinion did not address

the question.

On July 21, 1992, in a 10-4 decision, the court vacated the

Davern decision and upheld the guideline sentencing scheme.

United States v. Davern, 1992 WL 167526 (6th Cir. 7/21/92).

The majority held that the guidelines are “a sentencing

imperative” and that a court cannot deviate other than by making a

departure as authorized by 18 U.S.C. 3553 (b). In support, the

majority cited Burns v. United States, 112 S.Ct. 2182, 2184-2185

(1991) where, in a different context, this Court stated that “the only

circumstance in which the district court can disregard the

mechanical dictates of the Guidelines is when it finds that there

exists an aggravating or mitigating circumstance of a kind or to a

degree not adequately taken into consideration by the Sentencing

Commission in formulating the guidelines.”

The Sixth Circuit went on to reason that a sentencing judge

must follow the format outlined at U.S.S.G. 1B1.1 by first

determining the guideline sentence and then determining whether

the court should depart from such a sentence.

The dissent argued that the guideline drafters had exceeded

the authority granted them by the enabling statutes found in Title

17

18 and Title 28. This created a conflict between the guidelines and

the enabling statute, and, in such a situation, the enabling statute

should control. The dissent cited a long list of scholarly articles

which expressed the same views as the dissent. 1992 U.S. App.

Lexis 16564, *43, n. 11. The dissent concluded that the majority

erred and that the guideline structure was flawed because the

Sentencing Commission recognized some, but not all, of the

requirements mandated by Congress,

The Davern debate is a microcosm of a debate which has great

significance for the administration of justice.

This Court should use this case as a basis for addressing this

debate and for expressing its views on the relationship of the

various authorizing statutes to the guidelines and on the authority

of sentencing judges to deal with uncommon Situations or with

factors which have historically justified sentencing leniency.

This debate is too important to be i gnored.

D. 18 U.S.C. § 1956 (a)(3) IS UNCONSTITUTIONAL

18 U.S.C. § 1956 was amended, effective November 18, 1988,

to allow law enforcement agencies to carry Out money laundering

sting operations. 18 U.S.C. § 1956 (a)(3); 102 Stat. 4392, Pub. L.

100-690. The major differences between this new statutory section

and the previous version of the statute were the following:

1. Prior law required that the laundered property actually be

the proceeds of “specified unlawful activity”, as that term is

defined in 18 U.S.C. § 1956 (c)(7). The amended Statute allows a

conviction even though the allegedly laundered property has a

legal source.

2. The amended statute authorizes law enforcement officers to

18

directly or indirectly represent that property is either “the proceeds

of unlawful activity or property used to conduct or facilitate

specified unlawful activity.” 18 U.S.C. § 1956 (a)(3).

3. The statute does not provide the parameters of the sting, the

nature of the representation made by law enforcement officers or

third parties acting at their direction or the nature of the sting’s

targets.

The amended statute carries a 20 year penalty.

Petitioner challenges the constitutionality of the statute for the

following reasons:

1. The statute does not sufficiently notify citizens regarding

the potentially serious criminai implications of their acts.

2. The failure to define or limit the type of representations

made by law enforcement officers or their designees makes the

statute unconstitutionally vague.

3. The statute is unconstitutionally vague because it vests too

much discretionary authority in law enforcement officers to appiy

the money laundering statutes based upon their individual

predilections rather than upon some defined basis.

4. All of these flaws are particularly important because the

new statutory section criminalized behavior that was previously

non-criminal. The pre 1988 law required that the money actually

be the proceeds of illegal activity. The new law permits sting

operations where the money, in fact, comes from the government.

This Court addressed a similar problem in Kolender v.

Lawson, 461 U.S. 352 (1983). In Kolender, this Court examined a

California statute which required individuals who loiter or wander

19

the streets to provide “credible and reliable” information and

account for their presence when required to do so by a law

enforcement officer. Lawson had been arrested several times and

convicted once for violating the statute. He challenged the statute

and sought a declaratory judgment that the statute was

unconstitutional.

This Court agreed and held that the statute was indeed

unconstitutional. This Court stated that any penal statute must

meet two basic criteria:

1. It must define the offense with sufficient definiteness so

that ordinary people can understand what conduct is prohibited;

2. It must define the offense in a manner which does not

“encourage arbitrary and discriminatory enforcement.” 461 U.S. at

357 and the cases there cited.

This Court further noted that the primary concern is that the

legislature must establish “minimal guicelines to govern law

enforcement.” 461 U.S. at 358. See, also, Smith vy. Goguen, 415

U.S. 566, 574 (1974).

The California statute was flawed because it vested “virtually

complete discretion in the hands of the police to determine whether

the suspect has satisfied the statute and must be permitted to go his

way in the absence of probable cause to arrest. “ 461 U.S. at 358.

Accordingly, because the statute did not define what was intended

by the requirement that a suspect provide “credible and reliable”

information, the statute encouraged arbitrary and unpredictable

enforcement. The statute provided absolutely no restraint on the

police’s power to arrest and charge a person with a violation. Cr..

Lewis v. City of New Orleans ,415 U.S . 130, 135 (1974).

20

The statute is flawed in this case for a very similar reason. 18

U.S.C. 1956 (a) (3) legislatively authorizes law enforcement

agencies to conduct sting operations. The sting is carried out when

the law enforcement officer of a designee represents that property

is either the “proceeds of specified unlawful activity or property

used to conduct or facilitate specified unlawful activity.” 18 U.S.C.

§ 1956 (a)(3).

The statute is unconstitutional because the legislature did not

specify any minimal guidelines to govern law enforcement. A law

enforcement official has absolutely no guidance as to who should

be targeted, how the sting should be constructed, and what

safeguards, if any, should be instituted to protect an otherwise

unaware citizen from arbitrary or discriminatory enforcement.

The facts of this case clearly illustrate the due process

concern. The petitioner was not a mainstream defendant. He was

not a drug dealer; he was not a professional money launderer; he

was not separately compensated for participating in the allegedly

tainted transaction. Cf., cases such as United States v. Breque, 964

F.2d 381 (Sth Cir. 1992), United States v. Payne, 962 F.2d 1228 (6th

Cir. 1992), United States v. Richardson, 925 F.2d 112 (Sth Cir.

1991) and United States v. Hardy, 762 F.Supp. 1403 (D. Hawaii,

1991), which illustrate the application of the sting statute to

individuals who are laundering money on a regular basis.

There is no legislative history to the statute and no indication

as to whether Congress intended to target professional money

launderers by making it easier for law enforcement officials to

pursue individuals who were in the business or whether Congress

intended to include any individual selected by law enforcement,

even if that individual was not presently involved in money

laundering.

This lack of standards and direction points out the

21

constitutional problem. Since Congress did not establish any

standards for the legislatively authorized sting, it created a

vagueness which is violative of due process; the statute on its face

permits law enforcement officials full rein to “pursue their

individual predilections”.

A second constitutional problem is the vagueness of the

“representation” section of the statute. Petitioner’s complaint is

that Congress did not sufficiently define the type of representation

that exposes an individual to criminal liability. Specifically, the

question is whether a representation which is incredible,

unbelievable, or doubtful can form the basis of criminal liability.

The underlying statutory assumption is that the representation

is false: the government, by definition, is representing that legal

money is in fact illegal. If the defendant believes the government

and the defendant’s actions are based upon that belief, conviction

follows.

However, the flaw arises because Congress did not exculpate

or otherwise address defendants who do not believe the false

statements and/or whose actions are not based upon the

government's representation or who feel that they can act legally

because they believe that the representation is false and that ille gal

money is not really involved.

Petitioner’s case illustrates the point. Petitioner had ample

reason to doubt or disregard the representations made about the

source of the proceeds. The drug dealer had been in jail for several

years, and petitioner had no reason to believe that he had any drugs

or the proceeds of any drugs left over from the drug dealer’s

previous illegal dealings. Petitioner had no corroboration for the

statements that drugs were involved. For all petitioner knew, the

statements could be false.

22

Moreover, and most importantly, the government in this case

constructed the sting so that the petitioner might easily believe that

the representation was false. Petitioner was in a business where

puffing is common. It is commonplace for customers to lie about

the amount of money that is available to buy the car, in the hopes

that the lie will either induce the car dealer to lower the price or to

sweeten the deal. As a result, any experienced car salesman will

tend to discount these statements, particularly if the facts suggest

that the statements are being used as a negotiating ploy.

In this case, the government did not come to petitioner and

propose a simple and straightforward deal. In other words, no one

approached petitioner and said “here is $20,000; this money comes

from a drug deal; sell me acar”; no one approached petitioner and

offered him money to arrange the deal. Rather, the government

constructed the sting so that it extended over a number of weeks.

Petitioner’s only compensation was his regular commission from

the sale. Petitioner was told that the parties were trying to sell

narcotics but were having trouble making the sale. Efforts were

made to minimize the price of the car. In other words, the entire

sting could have been construed as just another ploy by a customer

to get a better deal.

This ambiguity was made possible by Congress’s failure to

live up to its mandate and to specify standards by which law

enforcement officers should act.

Finally, the statute did not put petitioner or others similarly

situated on notice that his actions violated federal criminal law.

The lack of notice was caused by the overly vague definition of the

word “representation” which permits criminal liability regardless

of whether the defendant believed the representation or whether

the allegedly criminal acts had anything to do with the

representation made. It is also caused by the failure to define the

parameters of the legislatively authorized sting.

23

Finally, the constitutionally significant lack of notice is

caused because money laundering is not an easily definable

concept, particularly to a lay citizen who is neither a drug dealer

nor a professional money launderer.

A drug dealer knows he is committing a crime. A person who

takes money to conceal the source of funds knows that his acts are

illegal. On the other hand, a car salesman who is told a questionable

story and who is not being separately compensated for his acts does

not have adequate notice. The vagueness thus makes it possible for

someone to break the law even if that person honestly believes that

the representation is false.

The Sixth Circuit did not really deal with this issue. The Court

merely held that the statutory prohibition is clear and that someone

like petitioner is guilty if he intentionally enters into the prohibited

transaction. (11a)

This Court should grant certiorari because this is an important

criminal statute which has yet to be authoritatively interpreted. If

petitioner is correct, his rights and the rights of many others

similarly situated have been or will be violated. The question is

sufficiently important to warrant this Court’s consideration.

E. THE SCOPE OF THE MONEY LAUNDERING STING

STATUTE IS UNCLEAR, AND CERTIORARI WOULD BE

APPROPRIATE TO INTERPRET THIS IMPORTANT

STATUTE

Prior to 1988, the money laundering statute exclusively

targeted individuals who were actually laundering illegal money.

These individuals included professional drug dealers, professicnal

money launderers, or other individuals or entities who received

compensation for assisting others to conceal illegal money.

Neither the pre-1988 statute nor the cases dealt with ordinary

24

citizens whom the government might be able to tempt if that

otherwise innocent citizen was targeted by agents.

There are two possible interpretations of the 1988

amendment. The first interpretation is that Congress only intended

to give law enforcement officials an additional tool to pursue the

types of offenders who had already been targeted by the statute. 18

U.S.C. § 1956 (a)(1) and (a)(2). The existing statutes required law

enforcement officials to catch the targets in the act; the amended

statute would allow law enforcement officers to aggressively

pursue these often elusive professionals by affirmative actions.

The reported cases indicate that this is indeed the more common

approach taken by law enforcement. See, e.g., United States v.

Breque, 964 F.2d 381 (Sth Cir. 1992), United States v. Payne, 962

F.2d 1228 (6th Cir. 1992), United States v. Richardson, 925 F.2d

112 (Sth Cir. 1991) and United States v. Hardy, 762 F.Supp. 1403

(D. Hawaii, 1991).

The second possible interpretation, which is at the heart of the

government’s prosecution in the instant case, is that Congress

expanded the scope of the statute and authorized the government to

operate stings against any citizen, regardless of whether that

citizen was engaging in the kinds of conduct that would expose that

citizen, if caught, to prosecution under the existing money

laundering provisions.

The language of the statute is not clear, and there is no

legislative history on the subject. The broad and expansive

interpretation of criminal liability sought by the government

should not be adopted without some direct indication from

Congress that the expansive interpretation is what Congress

intended. Such a position is consistent with previous decisions of

this Court which have held that when a criminal statute is vague

and the intent of Congress unclear, the Court should adopt the

interpretation which limits rather than expands the scope of

Ee

25

criminal liability. See, e.g., Bifulco v. United States, 447 U.S. 381

(1980) and Ladner v. United States, 358 U.S. 169 (1958).

A second statutory interpretation question is suggested by the

previous section on constitutionality. “Representation”, as that

word is used in Section § 1956 (a)(3), is defined very broadly and

does not address the issue of whether the defendant believed the

representation made by the law enforcement official.

Petitioner argued below that the government had to establish

that he believed the representation made by the drug dealer and that

the government's failure to do so flawed his conviction. In support

of his argument, he pointed to a 1990 amendment to 18 U.S.C. §

1956 (a)(2) which specifically conditioned criminal liability upon

a determination that the defendant’s subsequent words or actions

indicate that the defendant believed that the representations were

true.

The Sixth Circuit did not address this argument, but it is an

important issue worthy of this Court’s review.

CONCLUSION

WHEREFORE, Petitioner respectfully prays that this Court

grant certiorari and resolve the conflict between the Circuits on the

applicability of the amended language in the United States

Sentencing Guidelines, Sect. 2S1.1(b)(1) to a sting operation’s

target whose offense occurs prior to November 1, 1991. Petitioner

further prays that this Court grant certiorari to consider the

applicability of the minimum sentence required by the money

laundering guideline rules to a factual circumstance which was not

a crime at the time that the rules were enacted. Petitioner prays that

this Court grant certiorari to resolve a conflict among Circuit

judges as to the relationship between 18 U.S.C. § 3553 and the

United States Sentencing Guidelines. Petitioner also prays that this

Court grant certiorari to consider the important question of the

26

scope of the new federal money laundering sting statute and

whether it applies to citizens who are not actively involved either

in the drug tradeor with money laundering. Finally, Petitioner

prays that this Court grant certiorari to consider whether the money

laundering sting statute is unconstitutional because it provides

insufficient guidance to law enforcement officials.

Respectfully submitted,

DAVIDA. DODGE

Counsel of Record

DAVIDA. DODGE, P.C.

Attorneys for Petitioner

la

APPENDIX A — ORDER ENTERED AUGUST 21, 1992

No. 91-1655

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

ROBERT LOEHR,

Defendant-Appellant.

ORDER

The appellant moves to stay the issuance of the mandate

pending application for a writ of certiorari to the Supreme Court.

Upon consideration, it is ORDERED that the motion be, and it

hereby is, DENIED.

ENTERED BY ORDER OF THE COURT

Leonard Green, Clerk

2a

APPENDIX B — JUDGMENT DATED AUGUST 21, 1992

No. 91-1655

UNITED STATES COURT OFAPPEALS

FOR THESIXTH CIRCUIT

UNITED STATES OFAMERICA,

Plaintiff-Appellee,

ROBERT LOEHR,

Defendant-Appellant.

BEFORE: Nelson and Boggs, Circuit Judges; Keupansky, Senior

Circuit Judge

JUDGMENT

ON APPEAL from the United States District Court for the

Western District of Michigan at Grand Rapids.

THIS CAUSE was heard on the record from the district court

and was argued by counsel.

ON CONSIDERATION WHEREOF, it is ordered that the

judgmentof the district court is affirmed.

ENTERED BY ORDER OF THE COURT

Leonard Green, Clerk

Issued as Mandate: August 21, 1992

3a

Appendix B

COSTS: None

| LE $

PRM Srrcerdtaestgkcuae $

NE etnies: $

A True Copy.

Attest:

Sue Johnson

Deputy Clerk

4a

APPENDIX C — ORDER & DECISION FILED

JUNE 10, 1992

No. 91-1655

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

ROBERT LOEHR,

Defendant-Appellant.

ORDER

BEFORE: NELSON and BOGGS, Circuit Judges; and

KRUPANSKY, Senior Circuit Judge.

The Court having received a petition for rehearing en banc, and

the petition having been circulated not only to the original panel

members but also to all other active judges of this court, and no

judge of this court having requested a vote on the suggestion for

rehearing en banc, the petition for rehearing has been referred to the

original hearing panel.

The panel has further reviewed the petition for rehearing and

concludes that the issues raised in the petition were fully considered

upon the original submission and decision of the case. Accordingly,

the petition is denied.

Sa

Appendix C

ENTERED BY ORDER OF THECOURT

Leonard Green, Clerk

6a

Appendix C

No. 91-1655

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

ROBERT LOEHR,

Defendant-Appellant.

On Appeal from the United States District Court for the Western

District of Michigan

Decided and Filed June 10, 1992

Before: NELSON and BOGGS, Circuit Judges; and

KRUPANSKY, Senior Circuit Judge.

KRUPANSKY, Senior Circuit Judge. Appellant, Robert Loehr

(defendant), appealed the district court’s judgment convicting him

of attempted money laundering in violation of 18 U.S.C. §

1956(a)(3)(B) and the imposed sentence of 41 months

incarceration, two years of supervised release, and a mandatory

special assessment fee of $50.00 pursuant to the November 1990

United States Sentencing Guidelines (U.S.S.G.). The defendant

asserted several assignments of error on appeal.

‘i

7a

Appendix C

The defendant was acar salesman in Grand Rapids, Michigan.

Law enforcement personnel became aware of appellant from his

past relationship with a convicted drug trafficker, Credell “Petey”

Carpenter (Carpenter). Carpenter advised Special Agent Sanford

Simons (Simons) that the defendant had sold him and his girlfriend,

Chrystal Bell (Bell), vehicles in 1986 and 1987 knowing that they

were purchased with the proceeds from drug transactions. Further,

Carpenter revealed that Loehr knew him to be a drug dealer.

With the assistance of Carpenter and Bell, Simon initiated a

“sting” investigation to determine if Loehr was laundering money

through his employer’s car dealership. The sting required that

Carpenter and Bell attempt the purchase of an automobile after

clearly informing the defendant that the purchase price was to be

paid from drug proceeds. Further, the purchase required that Loehr

title the vehicle in the name of a fictitious third party.

After he was contacted by Bell and Carpenter and advised that

the vehicle would be purchased with drug money, the defendant

agreed to sell Carpenter a selected automobile for cash without

executing an IRS Form 8300 evidencing a cash sale in excess of

$10,000 and to title the vehicle in a fictitious name. The defendant

prepared the requisite paper work, i.e., apurchase agreement signed

by Bell in a fictitious name. He presented the sales agreement to

David Delaat, Jr. (Delaat, Jr.), the general manager of the

automobile dealership, who typed the information onto the proper

form and completed the other necessary purchase documentation,

such as the state registration application, the odometer statement,

and the temporary registration. Delaat, Jr. noted that the driver’s

license number and proof of insurance were missing.

On the day of the transaction, Bell arrived at the dealership

with an undercover agent and gave the defendant $20,000 in cash.

8a

Appendix C

Loehr accepted the money and told Bell she could take possession

of the car that day. Thereafter, Simon and another special agent

entered the dealership and found the defendant in a windowless

room where he was in the process of counting the money. Loehr was

later indicted and charged with attempted moneylaundering in

violation of 18 U.S.C. § 1956(a)(3)(B).

During the jury trial, three witnesses testified concerning the

paperwork required to complete an automobile transaction. Delaat,

Jr. testified that when the purchase agreement was presented to him

for typing, the transaction was completed. Craig Brockette, the

owner of the dealership, stated that the transaction in the instant

action was near completion. David Delaat, Sr., the business

manager, testified that the transaction in the instant action was over

50% completed.

In order to prove that the defendant knew Carpenter and Bell in

the past and that Carpenter was a drug dealer, the court permitted the

testimony of various witnesses who described Loehr’s past

interactions with Carpenter. Agent Simon testified that in 1986 and

1987 the defendant worked at his father’s car dealership where he

met Carpenter and Bell. Joshua Simpson, who had previously

worked with the defendant at his father’s car dealership, testified

that Loehr knew Carpenter was a drug trafficker and that the

defendant and Carpenter had met during acar transaction in 1986 or

1987. Finally, Carpenter testified that he was a drug dealer and had

met the defendant at his father’s car dealership where he told Loehr

that he was a drug dealer. The defendant objected to the foregoing

testimony charging that it was evidence of prejudicial “similar acts”

in violation of Rule 404(b) of the Federal Rules of Evidence. The

court overruled the defendant’s objections concluding that the

evidence was probative to prove Loehr’s intent to engage in the

money-laundering scheme and his knowledge of the IRS

9a

Appendix C

requirement to file a form whenever a money transaction over

$10,000 takes place.

The jury returned a verdict of guilty against the defendant. The

court sentenced him to 41 months incarceration, two years of

Supervised release, and a mandatory special assessment fee

pursuant to the November 1990 United States Sentencing

Guidelines. During the sentencing hearing, the defendant asserted

several objections to the presentence report, including the accuracy

of the offense level computation and urged the court to depart

downward from the guidelines. The court overruled his objections

and determined that the defendant had a base offense level of 20

pursuant to U.S.S.G. § 2S1.1(a)(2). Thereafter, the court increased

the offense level by three to account for specific offense

characteristics pursuant to 2S1.1(b)(1). After allowing defense

counsel time to present additional arguments, the court decided not

to depart downwards from the guideline’s sentence as requested by

the defendant.

In his first assignment of error, the defendant argued that the

evidence was not sufficient to prove that he performed one or more

Overt acts to constitute a substantial step toward the commission of

the attempted money-laundering offense. In order to prove that a

criminal offense was an attempt within the meaning of the statute

here in issue, the government must prove that the individual

charged intended to engage in the proscribed criminal activity and

that the accused performed an overt act in furtherance of the

criminal act proscribed by the statue. United States v. Pennyman,

889 F. 2d 104, 106 (6th Cir. 1989). The degree of a defendant’s

performance of a substantial act in furtherance of the illegal activity

is a factual issue to be resolved according to the circumstances of

each particular case. United States v. Joyce, 693 F. 2d 838 (8th Cir.

1982). The government:

10a

Appendix C

is under no obligation to wait until the sale was

actually completed before intervening. that is

of course true forif the sale has been completed

it is no longer a mere attempt. Something less

than a consummated sale suffices to prove an

attempt provided it is a substantial step toward

completion.

United States v. Cea, 914 F.2d 881, 888 (7th Cir. 1990).

The record disclosed that the defendant accepted over $20,000

in cash for the sale of an automobile and that Bell made it clear that

she intended to take the car with her that same day. Further, the

defendant prepared paperwork in the name of a fictitious buyer as

directed by Bellin an effort tocomplete the transaction at issue, and

he assured the purchaser that the IRS form required to disclose cash

transactions that exceeded $10,000 would not be filed. Although

three witnesses testified that the transaction was either completed,

near completion, or 50% completed, a reasonable juror could have

concluded that the defendant’s actions were a substantial step

toward the commission of the crime charged. The government was

not required to prove that the transaction was completed.

Accordingly, this assignment of error is without merit.

Loehr next contended that the statute, 18 U.S.C. §

1956(a)(3)(B), was void-forvagueness and not intended to apply to

an individual such as himself who was not actively engaged in

money-laundering or drug dealing before the initiation of the sting

operation, The rule of statutory construction begins with the plain

meaning of the words in the statute. United States v. Ransbottom,

914F. 2d 743, 745 (6th Cir.), cert. denied, 111S.Ct.439(1990). The

void-for-vagueness doctrine requires only that “ordinary” people

can understand what conduct is prohibited and in a manner that does

lla

Appendix C

not encourage arbitrary and discriminatory enforcement. Kolender

v. Lawson, 461 U.S. 352, 357, 103 S. Ct. 1855, 1858 (1983). The

vagueness of statutes that do not threaten first amendment interests

is examined in light of the case at hand. Maynard v. Cartwright, 486

U.S. 356, 361, 108 S. Ct. 1853, 1858 (1988).

An examination of 18 U.S.C. § 1956(a)(1)(B) indicates that in

order for an accused to be convicted under the above provision, the

government must prove that he had the specific intent to conceal or

disguise the nature, location, source, ownership, or control of

property believed to be the proceeds of specified unlawful activity.

Furthermore, representations must be made by law enforcement

officers, or by those acting under their direction, and must relate to

specified unlawful conduct enumerated in the statute pursuant to §

1956(c)(7). The provision is clear and applies to anyone who has the

requisite intent to engage in the conduct as defined in the statute.

See also United States v. Jackson, 935 F. 2d 832 (7th Cir. 1991)

(court concluded that § 1956(a)(1) was not unconstitutionally

vague). Accordingly, this assignment of error is without merit.

The defendant next argued that the court abused its discretion

when it admitted evidence of the defendant’s past associations with

Carpenter because such evidence violated Fed. R. Evid. 404(b).

Rule 404(b) generally prohibits the introduction of testimony that

relates to prejudicial similar acts unless that evidence bears upona

relevant issue in the case such as motive, opportunity or knowledge.

United States v. Zelinka, 862 F. 2d 92, 98 (6th Cir. 1988). The court

determined that the testimony of Agent Simons, Simpson, and

Carpenter was probative of the defendant’s intent and knowledge.

There was no mention in the admitted testimony that Carpenter had

purchased automobiles in the past from the defendant using drug

money. Accordingly, the trial court did not abuse its discretion when

it permitted this testimony to be admitted into evidence.

12a

Appendix C

Finally, the defendant charged that the court erred in its

application of the November 1990 Sentencing Guidelines. Loehr

noted that U.S.S.G. § 2S1.1 was drafted before the enactment of 18

U.S.C. § 1956(a)(3). Thus, he contended that it was designed to

punish aclass of defendants to which he did not belong. However,

““[t]his court will give due deference toa district court’s application

of the Guidelines to the factual situation found to exist and will

review such achoice forclear error.” United States v. Hamilton, 929

F. 2d 1126 (6th Cir. 1991). We do not believe that the district court

committed clear error in the choice it made. Further, the district

court correctly elevated the base level offense by three because the

evidence was sufficient to prove that the defendant had the

necessary knowledge or belief that the source of the funds for the

transaction was from drug proceeds. Finally, the defendant may not

appeal the failure of the district court to depart from the guidelines

when the sentence imposed is within the guidelines and otherwise

valid. United States v. Draper, 888 F. 2d 1100 (6th Cir. 1989). This

court concludes that the defendant’s remaining assignments of

error are equally without merit.

Accordingly, after a review of the record, the briefs and

arguments of counsel, the district court’s disposition is hereby

AFFIRMED.