# Appendix — Payne v. United States

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Appendix
- **Published:** January 1, 1992
- **Citation:** 506 U.S. 1033

## Text

; FIE RD
(92-517 Sep 21 9a
NO. LOPE OF ie era |
IN THE

Supreme Court of the United States
OCTOBER TERM, 1992

HUBERT PAYNE,

Petitioner,
VS.

UNITED STATES OF AMERICA,

Respondent.

APPENDIX TO
PETITION FOR WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF
APPEALS FOR THE SIXTH CIRCUIT

JAMES R. WILLIS, ESQ.
WILLIS, BLACKWELL & ROGERS
Suite 350, Courthouse Square Building
310 Lakeside Avenue N.W.
Cleveland, Ohio 44113

(216) 523-1100

Appendix "B"

TABLE OF CONTENTS

PAGE
Appendix "A" - Order of the Sixth Circuit
Court of Appeals Denying
Rehearing En Banc A-l
- Petition For Rehearing In Banc
and Suggestions For Rehearing In
Banc A-3

Appendix "C"

- Opinion of the Sixth Circuit

Court of Appeals in United States

of America v. Hubert Payne and Val

C. King A-26

APPENDIX "A"

Nos. 91-3417/3588/3624

UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT

UNITED STATES OF AMERICA,
Plaintiff-Appellee,
ORDER

Vv.

HUBERT PAYNE (91-3417/3624),
VAL C. KING, (91-3588),

i a

Defendants-Appellants.

BEFORE: NORRIS and SUHRHEINRICH, Circuit Judges;
and CONTIE, Senior United States Circuit Judge.

The court having received a petition for rehearing enbanc,
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

A-|l

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.

ENTERED BY ORDER OF THE COURT

Leonard Green, Clerk

APPENDIX "B"

IN THE UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT

NO. 91-3417 & 91-3624

UNITED STATES OF AMERICA,
Plaintiff-Appellee,
VS.
HUBERT PAYNE,

Defendant-Appellant.

ON APPEAL FROM
THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF OHIO

PETITION FOR REHEARING IN BANC AND
SUGGESTIONS FOR REHEARING IN BANC

REQUIRED STATEMENT FOR REHEARING EN BANC

I express a belief, based on a reasoned and studied

A-3

professional judgment, that the panel decision is contrary to the
decision of the United States Court of Appeals for the Sixth Circuit

in United States v. Guyon, 717 F.2d 1536 (6th Cir. 1983).

Further, the Opinion cannot be reconciled with that rendered by

the United States Supreme Court in Martin v. Ohio, 480 U.S. 228

(1987), upon which it purports to rely. Also, the position taken by
the panel conflicts with that adopted by the Court in the Sixth

Circuit’s Pattern Criminal Jury Instructions, Nos. 6.02, 6.03,

6.05 and 6.06.
Clear also is the fact that the panel’s decision on the
hearsay/confrontation issue, although asserted as being within the

ambit of Griffin v. United States, _ U.S. __, 112 S. Ct.

(1991), cannot be justified on that basis. In all this, we submit
there is a need for the entire Court to revisit the 801(d)(2)(E) issue
as postured herein. For it seems obvious enough from the panel’s
analysis that one can be made a conspirator, and thus vulnerable

to statements attributed to him before there is any satisfaction of

A-4

| a ee

the agreement element requirement for a title 18 conspiracy. The
reference here is to the panel’s statement that King’s statement to
the agent that Payne was willing to launder his money was
admissible against Payne because Payne came to a ae and the
matter was discussed. (Opinion, pp. 10-11.)

Simply put, the position taken by the panel on this point
cannot be justified by anything said by the Supreme Court in
Bourjaily v. United States, 483 U.S. 171, 107 S. Ct. 2775 (1987),
or in this Court’s Bourjaily decision. (781 F.2d 539 [6th Cir.

1986].)

JAMES R. WILLIS, ESQ.
Reg. No. 0032463

Attorney of record for:
HUBERT PAYNE -- APPELLANT

A-5

IN THE UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT

NO. 91-3417 & 91-3624

UNITED STATES OF AMERICA,

Plaintiff-Appellee,
VS.
HUBERT PAYNE,

Defendant-Appellant.

ON APPEAL FROM
THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF OHIO

PETITION FOR REHEARING IN BANC AND
SUGGESTIONS FOR REHEARING IN BANC

Hubert Payne, the appellant herein, petitions the Court

under favor of Rule 40, Federal Rules of Appellate Procedure, for

a Rehearing In Banc of his appeal. Further, the appellant makes
the clear and unequivocal Suggestion (as is permitted by Rule 35)
that this cause should be considered in banc by the entire Court.
In support of this Petition for Rehearing and the
Suggestion, the following specific contentions are made:
(1)
That as argued below, it is apparent from a reading of the panel’s

decision material facts, established by undisputed evidence in the

Record, have been overlooked, misapprehended and misapplied.
These include the following specific findings that only by the
exertion of an extreme torturing can be justified by anything in the
Record. Here our reference is to the following statements isolated
from the panel’s Opinion:

(a) “During the trial of defendants

Payne and King, those who pled

guilty, Coyle, Williams, and Jones

testified against defendants Payne

and King on the government’s

behalf" (Opinion, p. 4).

(b) “In regard to defendant Payne,

A-7

OO eee

he first argues that the statements
which co-conspirator King made
prior to March 20 and March 23,
1989 were statements made before
he entered into the conspiracy and
were improperly admitted as co-
conspirator statements against him."
(Id., p. 10.)

(c) "Defendant King told Monaghan
that ... Payne had agreed [past tense]
to launder the officer’s cash." (ld.,

p. 3).

(d) “Defendant Payne ... stated he
would give [future tense] the officer
certified checks if the officer wanted
them" (ibid). (Emphasis supplied.)

(e) “Defendant Payne told the
officer he [actually] had several ways
to launder the cash, but the best way
was through a business that could be
set up [future tense] to accept large
sums of cash. And, that although he
controlled [past tense] the business
the business could not [present tense]
be traced to him" (ibid).

(f) “Defendant Payne ... stated the
laundered cash would be returned
[future tense] to the officer in the
form of a check. Defendant Payne
gave the officer his business card ...

A-8

[ll ee_a_aQ°QN

and Defendant King’s home
telephone number[] in order that the
officer could contact them [in the
future] when he was ready to launder
his cash" (ibid).

(g) After King received the
$25,000 in cash from the officer he
"telephoned Defendant Payne
and .... drove immediately to the
residence of Defendant Payne" (id.,
p. 4). No evidence exists to show
King talked to Payne, or the
evidence only showed King drove to
the vicinity of Payne’s residence,
which was in a large apartment
building."

(h) "The jury also credited the
testimony of Defendant Coyle over
that of Defendant Payne that Payne
did not withdraw from __ the
conspiracy as he alleged" (id., 13).
(If nothing else the fact that Payne
was acquitted of the substantive
offense, simply cannot be translated
into anything other than a rejection
of Coyle’s testimony that Payne gave
him the $25,000 check Coyle
testified was delivered to him on
April 18, 1989.) On this point see
United States v. Guyon, 717 F.2d
1536 (6th Cir. 1983) (Jones, J.
dissenting opinion, id., at p. 1545,

A-9

EEO

4 REN |

fn.1). Our point here is that in
Guyon this Court did not hesitate to
interpret the verdict rendered therein
in spite of the presence of a serious
flaw in the jury instructions."

(i) "In regard to Defendant Payne,
acquittal of the substantive offense
does not constitute a determination
that no overt act was committed ...."
(id., 13). While this is certainly
true, it is also true that the acquittal
could only mean the jury concluded
that Payne withdrew at some point.

(2)
That clearly, as the panel’s decision shows there is a conflict, a
serious one at that, between the position asserted by this Court in

United States v. Lash, 937 F.2d 1077 (6th Cir. 1991), and in the

panel’s decision which adopts and endorses without analysis the
views expressed in the Fourth, Tenth, and Eighth circuits. (See
Opinion, p. 12.)

Specifically our reference here includes the panel’s
summary rejection of our burden of proof contentions that were

made in connection with its rejection of the withdrawal defense

A-10

7 a

raised by this appellant. Here it was stated:

Defendant Payne essentially is asking
this court to reverse the precedent of
this circuit in regard to this issue.
This court places the burden of proof
for withdrawal from a conspiracy on
the defendant as stated in United
States _v. Lash, 937 F.2d 1077,
1083 (6th Cir. 1991), cert. denied,
112 S. Ct. 397 (1991). We see no
reason for requesting an en banc
panel of this court to reconsider this
opinion, as defendant wishes,
because it is consistent with the
opinions of other circuits. See, e.g.,
United States vy. Cardall, 885 F.2d
656, 668 n. 22 (10th Cir. 1989);
United States v. Walker, 796 F.2d
43, 49 (4th Cir. 1986); United
States v. Boyd, 610 F.2d 521, 528
(8th Cir. 1979), cert. denied, 444
U.S. 1089 (1980).

Opinion, p. 12.

The point to be considered, and what it is that makes for
the open conflict which should have been given more than passing
consideration by the panel (and which should command the

attention of the entire Court), is that there are at least as many

A-11

circuits that have carefully considered and categorically rejected
the position expressed by this circuit in Lash and rotely adopted
herein as being dispositive. Our reference here is to United States
vy. Reed, 729 F.2d F.2d 1225 (7th Cir. 1981); United States v.
Piva, 870 F.2d 753, 756-757 (1st Cir. 1989) and United States
v. Jannotti, 729 F.2d 213 (3rd Cir. 1984).

Of no mean significance is the contention that was
specifically made to the panel, in our Reply Brief. There it was
argued that surely "the law cannot continue to be less than uniform
in the federal system" and for that reason this Court’s views on
this issue "should be more fully ventilated" (id., p. 12). Despite
this plea, the panel expressed an unwillingness to "request[] an en
banc panel of this Court to reconsider ... [this circuit’s position,
as expressed in Lash] because it is consistent with the opinions of
other circuits" (id., at 12). In our judgment, it would have made
at least as much, if not more, sense for the panel to have

recommended an en banc decision because of the open conflict in

A-12

circuits on this issue. For clearly the fact that other Courts have

as forcibly expressed a contrary view on such a critical issue
makes for the need, as we see it, for the approval by a majority of
the Judges on this Court of the views expressed for it -- if indeed
this Opinion is to be the law of this Circuit.

Here, as we see it, the conflict to which we have made
reference could not be more aptly postured than it is when the
views expressed by this Court, in Lash and by our panel in
reliance thereon (in which the views of the Tenth, Fourth and
Eighth Circuits were extolled), are compared with the categorical

position taken by the Seventh Circuit in United States v. Read,

658 F.2d 1225 (7th Cir. 1981). In Read, the Court in over-ruling

that Court’s prior case law, declared that the government must
disprove withdrawal when the issue is properly raised. Id., at
1233-1237.

Further, it should be noted, the point here being contended

for was specifically argued to the panel that originally heard this

A-13

case. This was done in the following precise language:

[That contrary to the position taken
by the Government in its Brief]
Payne never testified he withdrew
from any conspiracy. What his
evidence showed was that no
conspiracy including him was ever
formed. And, that to the extent it
can be said an agreement was
reached on March 31, 1989, he
withdrew from being a party to any
such agreement before the April 4,
1989 Overt Act that would have
reopened any possible agreement into
a conspiracy was committed.

_ Reply Brief, p. 11. (Emphasis supplied.) On this same point,
consider the fact that the Eleventh Circuit’s Pattern Instruction
clearly magnifies the conflict we contend needs to be addressed.
Simply put then, if its basic thesis, upon which we rely, is invalid
that rejection should have the imprimatur of the full court -- not
merely that of those on the panel that rendered the Opinion here
being challenged. Here the instruction relied on reads:

If a Defendant enters into a

conspiracy agreement but later
changes his mind and withdraws

A-14

aie incall ileal

from that agreement before anyone
has committed an “overt act," as
previously defined, then the crime
was not complete at that time and the
Defendant who withdrew cannot be
convicted -- he would be not guilty
of the alleged conspiracy offense.

Eleventh Circuit’s Pattern Instruction, No. 513. Also see Ninth
Circuit’s Pattern Instruction, No. 8.05 D. Still other cases that
have adopted a view contrary to the position taken in this Court

would include United States v. Jimenez, 622 F.2d 753, 755 (Sth

Cir. 1980) and United States v. Heathington, 545 F.2d 972 (Sth

Cir. 1977). Heathington makes the point, in language that is

especially apt here, that the withdrawal must occur prior to the
consummation or completion of the offense by the occurrence of
an overt act.

So postured, as we see it, a major flaw in the panel’s
opinion flows from its conclusion, premised as it is on the flawed
notion that “Defendant Payne testified that Defendant King brought

him into the money laundering conspiracy" (Opinion, p. 4). The

A-15

most that can be said for this indefensible assertion is that it
shows, in our judgment at least, the author of the panel’s opinion
has simply misread the Record. If not that, he has surely
misapprehended the position taken by the appellant. -

Aside from exposing the sheer patency of the gross defect
involved in the Court’s failure to credit the fact that to convict one
of a Title 18 conspiracy, the “overt act" that brings it into fruition
must be specifically charged in the indictment, the quoted
statement is indefensible for other equally cogent reasons. This
point was well made in our original Brief where it was argued that
“proof of an Overt Act [is what] demonstrates the conspiracy is
operative and it cannot be denied the overt acts alleged in the
indictment and proved at trial mark the duration (and inception) of
the conspiracy." Appellant’s Opening Brief, p. 37. Cited in
support of this cogent and unassailable thesis was United States v.

Davis, 553 F.2d 921 (5th Cir. 1976); United States v. Walls,

577 F. Supp. 772 (N.D. Ga. 1984); and Devitt & Blackmer,

A-16

Federal Jury Instruction, §27.07 (West 1977).

Hopefully the law in this Circuit is, as it is elsewhere, that
a Title 18 Conspiracy is only established on the basis of (1) the
allegation of and proof of, both an agreement and an "overt act"
in furtherance of such agreement. Obviously if the conspiratorial
agreement was reached at the March 31st meeting and Payne
withdrew (from this agreement) before an alleged overt act was
committed (i.e., April 4th), then as to him the charged conspiracy
was never formed.

So postured, telling us, as ie panel does, that Payne
testified he met with the undercover agent, and was told by him
that the source of his money was drugs,' and that Payne discussed
how such money could be laundered, at most could only satisfy the

agreement element required for a Title 18 Conspiracy. The point

being made inexorably leads to the next serious flaw in the

1 Granted, Payne did testify that he was told Drugs were the source of the
money involved. However, not unlike what the agent admitted he was doing,
he (Payne) simply kept the conversation going by feeding into it. This he did
so as to keep King’s options open if that was what King wanted to do.

A-17

ratiocinations relied on by the panel in its Opinion. The reference
here is to the author’s statement that "Payne testified he withdrew
from the conspiracy following the March 31, 1989 meeting"
(Opinion, pp. 4-5). (Emphasis supplied.)

Aside from the fact that any such testimony easily translates
into a confession, or at least a judicial admission of guilt of the
charge for which he was convicted; it also verifies the Court has
simply missed the point of Payne’s testimony and his defense. For
if it were otherwise the Court would have realized, assuming
Payne’s testimony showed he fully agreed to launder the agent’s
money in the future, an alleged “overt act" had to be proved for
a conspiracy to come into being.

This latter thesis is magnified by the panel’s further
position that can be read as endorsing our position that there was
no proof Payne joined, or even talked of joining, an existing
conspiracy (id., pp. 11-13). Indeed, it is really significant to note

the Court was willing to credit our contention that any prior

A-18

i

existing conspiracy as between King, Coyle, Williams and Jones
was not shown to have included Payne (Opinion, pp. 11-12).
What further emphasizes the flaw here being centralized is the fact

that Griffin v. United States, 112 S. Ct. 466 (1991), was cited in

the Opinion as support for the position taken. (Opinion, pp. 11-
12.) In our judgment, the reference to Griffin is really instructive.
For it magnifies the extent to which Payne has been victimized.
This follows because, as the Supreme Court recognized, Griffin
involved a conspiracy that alleged multiple purposes. In our case,
the conspiracy alleged only involved one purpose and that was to
launder the agent’s money.

This being so, once the panel agreed Payne had to be
separated from the King, Coyle, Williams and Jones venture, it
should have also recognized the critical need for a determination
as to when the agreement element occurred. And the panel should
have identified the “overt act" alleged in the indictment that

occurred before Payne withdrew. This follows because the jury

A-19

obviously agreed a withdrawal occurred. Indeed, if it were

otherwise they would have convicted Payne of the substantive
offense.
(3)

Next, it should not get past the Court that the panel’s
decision can be read as a categorical rejection of the position
expressed by this Court in countless cases -- i.e., that the
Government has the burden of rejecting affirmative defenses and
this by proof beyond a reasonable doubt. This being so, the
panel’s unequivocal statement that "the Sixth Circuit’s position of
placing the burden of proof for affirmative defense is consistent

with the Supreme Court’s decision in Martin v. Ohio, 480 U.S.

228 (1987)" (Opinion, p. 12) is hardly something that can be
written off as a mere dictum. Indeed, the statement itself even
conflicts with this Circuit’s Pattern Instruction Nos. 6.02. 6.03.

6.05 and 6.06. Also see United States v. Guyon, 717 F.2d 1536

(6th Cir. 1983).

Of significance here, both, Guyon and Martin yv. Qhio

(relied on by the panel) were homicide cases that had been
defended on the grounds of self-defense. In Martin the Supreme
Court approved the instruction, given in that case, that to prevail
on the issue of self-defense the accused must actually prove his (or
her) innocence. By way of contrast, in this Court’s Guyon
decision, the Court expressly approved the instruction (given in
that case), which required the Government to "prove beyond a
reasonable doubt that the defendant did not act in self-defense."
Guyon, 717 F.2d at 1541. Clearly then, the panel’s decision in
this case cannot be reconciled with, either the position taken in
Guyon, or the position articulated by the Supreme Court in
Martin.

On this cogent point, one need only note that in Martin the
Court’s opinion emphasized the fact that Ohio had by statute (R.C.
of Ohio, §2901.05[A]) regulated the use of affirmative defenses by

placing the burden on the accused who relies on self-defense. The

A-21

upshot of this is that there was a statute involved in Martin and it
was this statute that caused the Court to rule that due process was
not violated in spite of the fact that it allowed the jury to convict
one of murder when it was just as likely the killing occurred in
self-defense. (Martin, 480 U.S. at 233-244.) Congress, it should
suffice to say, did not enact any comparable legislation. This fact
alone makes our point.

All this makes for a very real need that this Court should
put to rest the confusion that will flow from the assailed
declaration made by the panel -- to which reference is made. For

if Martin v. Ohio is consistent with this Court’s “position of

placing the burden of proof for affirmative defenses on the
defendant" (Opinion, p. 12 [Emphasis supplied]), then clearly the

burden of proof issue addressed by this Court in Jsaac v. Engle,

646 F.2d 1129 (6th Cir. 1980), must be regarded as resolved

against the position taken by a majority of the members who

participated in that case.

Our position (that the panel’s reliance on Martin v. Ohio,

for its position on the burden of proof issue is flawed and portends

problems if not forthrightly rejected) is magnified by the concerns

seriously registered by Chief Judge Edwards, in Isaac v. Engle.
There he noted that "few cases in the history of this Court resulted
in as much soul searching, thought and debate [as the burden of

proof issue as postured by that case]" 646 F.2d 1129, 1136 (6th

Cir. 1980). Also see White v. Arn, 788 F.2d 338 (6th Cir. 1986);

Wilson v. McMacken, 786 F.2d 216 (1986); Neib v. Jago, 695

F.2d 288 (6th Cir. 1982); Hopper vy. Perini, 641 F.2d 445 (6th

Cir. 1981) and Carter v. Jago, 637 F.2d 449 (6th Cir. 1980).

(4)
Clearly the need for this Court to speak with a unified
voice could not be more apparent than it is in this case with
reference to the burden of proof issues discussed above. Also, it

seems equally clear that the panel’s reliance on Griffin v. United

States. U.S. __, 112 S. Ct. 466 (1991), is likewise sorely

A-23

misplaced. For clearly the Court has misconstrued its effect as

applying to a situation where only one conspiracy is charged which
distinguishes the -ituation here from the situation in Griffin.

The bottom line on this point is that the panel overlooked
this critical point and for that reason misapplied a principle that
was created in Griffin and which obviously was not the basis for
the trial Court’s position -- a position that clearly prejudiced this
appellant.

CONCLUSION

For the various reasons argued above this cause should be
given the benefit of a Rehearing. In our view the Rehearing
should be conducted by the full Court.

Respectfully submitted,

JAMES R. WILLIS, ESQ.

Reg. No. 0032463

Attorney for Appellant

Suite 350, Courthouse Square Bldg.
310 Lakeside Avenue, N.W.
Cleveland, Ohio 44113

(216) 523-1100

A-24

a

CERTIFICATE OF SERVICE

I hereby certify that two copies of the foregoing Petition
For Rehearing In Banc ... were mailed to the office of Ronald
Bakeman, Assistant United States Attorney, 1404 East Ninth
Street, Suite 500, Cleveland, Ohio 44114, this _—_— day of May,

1992.

JAMES R. WILLIS, ESQ.
Reg. No. 0032463
Attorney for Appellant

A-25

Appendix "C"

Nos. 91-3417/3588/3624

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

United States of America
Plaintiff-Appellees,

v. - ON APPEAL from the
: United States District
Court for the Northern
Hubert Payne (91-3417/3624), : District of Ohio
Val C. King (91-3588),
Defendants-Appellants.

Decided and Filed May 5, 1992

Before: NORRIS and SUHRHEINRICH, Circuit Judges; and
CONTIE, Senior Circuit Judge.

Defendant-appellant, Val C. King, appeals his conviction
and sentence for violation of 18 U.S.C. § 371 for conspiracy to

defraud the United States by laundering money and of 18 U.S.C.

A-26

§ 1956 for money laundering. Defendant-appellant, Hubert Payne,
appeals his conviction and sentence for violation of 18 U.S.C. §
371 for conspiracy to defraud the United States by laundering
money. For the following reasons, we affirm.

3

In spring 1988, the IRS received information from an FBI
informant that Frank Coyle, a Cleveland stockbroker and John
McCurley, a drug dealer, were involved in money laundering.
The IRS decided to initiate an undercover sting operation into the
money laundering activities of Frank Coyle.

An IRS undercover agent, Monaghan, contacted Coyle and
met him on July 12, 1988. During a recorded conversation, Coyle
identified defendant King as a friend who "could legitimize any
kind of money" for a fee of 25%. When the undercover agent
objected to the high fee, Coyle called defendant King and
discussed lowering the fee. Later that same day, Coyle again met

with the undercover officer and informed him in a recorded

conversation that defendant King was willing to launder his money

for a 15% fee.

Coyle told the undercover officer that defendant King’s plan
to launder his drug money called for the officer to give the cash to
two attorneys, Ralph Jones and Ferris Williams, who would
convert the cash to checks. Pursuant to the plan, the undercover
officer met with the attorneys on September 21, 1988, and gave
the attorneys $50,000 cash for the purpose of laundering. The
attorneys, however, had problems with laundering the cash, and it
took them approximately six months and several bounced checks
to accomplish the laundering of the cash previously received on
September 21, 1988.

During the course of the delays and bounced checks, Coyle
testified that defendant King discussed the problems and Coyle told
King that he ought to find someone else. Sometime shortly before
March 20, 1989, Coyle testified that defendant King called him

and informed him that defendant Payne was willing to launder the

A-28

undercover officer’s cash. On March 20, 1989, Coyle called the
undercover officer and informed him that defendant King had
found another person to launder his cash and a meeting between
defendant King and the undercover agent was arranged for March
23, 1989.

On March 23, 1989, the undercover officer met Coyle and,
for the first time, met defendant King. The meeting was recorded.
The undercover officer made it absolutely clear, at the very
beginning of the meeting, that his money came from the sale of
cocaine. During the conversation with the undercover officer,
defendant King indicated that he had arranged the original deal
with the attorneys and described the attorneys’ efforts to launder
Monaghan’s cash as a “disaster” and "embarrassing." Defendant
King told Monaghan that a friend of his, defendant Payne, had
agreed to launder the officer’s cash for a 20% fee and that it

would take defendant Payne only 10 to 14 days. Defendant King

assured Monaghan that the previous problems of bounced checks

with the attorneys would not reoccur.

On March 31, 1989, undercover officer Monaghan met
defendant Payne along with defendants King and Coyle. The
meeting was recorded and played for the jury during the trial.
Again, the undercover officer made it absolutely clear that his
money came from the sale of cocaine. Defendant Payne informed
the officer that defendant King had informed him of the prior
problems and that he, Payne, assured the officer that the officer
would have no problems with him and even stated that he would
give the officer certified checks if the officer wanted them.
Defendant Payne told the officer that he had several ways to
launder the cash, but the best way was through a business that
could be set up to accept large sums of cash. Defendant Payne
Stated that although he controlled the business, the business could
not be traced to him. Defendant Payne further stated that the
laundered cash would be returned to the officer in the form of a

check and that the check would not be signed by Payne and could

A-30

not be traced to him. Defendant Payne gave the officer his

business card with his and defendant King’s home telephone
numbers in order that the officer could contact them when he was
ready to launder his cash.

On April 12, 1989, defendant King met with the
undercover officer at a local hotel room and received $25,000 in
cash to be laundered. Defendant King telephoned defendant Payne
from the hotel room and after King left the meeting with the
officer, defendant King drove immediately to the residence of
defendant Payne.

On April 18, 1989, Coyle testified that defendant Payne
gave him a $25,000 check made payable to the undercover
officer’s fictitious account, the Putnam Investment account. The
check was drawn on a company called Investors Unlimited.
Leonard Trem had opened the Investors Unlimited account on

April 11, 1989, less than two weeks after defendants King and

Payne had met with the undercover officer. The money deposited

into the account was the result of a series of bank checks, all less
than $10,000. The bank checks, all from different banks located
within a short distance of each other, were purchased with cash.

On July 24, 1990, defendants-appellants Val King and
Hubert Payne along with co-defendants Frank Coyle, Ralph Jones,
Leonard Trem,’ and Ferris Williams were indicted by a federal
grand jury on a six-count indictment. Coyle, Williams, and Jones
pled guilty. During the trial of defendants Payne and King, those
who had pled guiity, Coyle, Williams, and Jones, testified against
defendants Payne and King on the government’s behalf. At the
trial, defendant King did not testify and did not present any
evidence.

Defendant Payne testified that defendant King brought him
into the money laundering enterprise. Defendant Payne conceded
that he met with the undercover officer on March 31, 1989, that

he knew that the undercover officer made his money from the sale

1. Leonard Trem was tried and acquitted

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of cocaine, and that he discussed with the officer ways in which he
could launder the officer’s money. He contended, however, that
he never meant to launder drug money. Defendant Payne testified
that he withdrew from the conspiracy following the March 31,
1989 meeting. Defendant Payne, on cross-examination regarding
the issue of withdrawal, admitted that he never contacted any law
enforcement agency about the money laundering activities of
Coyle, King, or the undercover officer and that all he told King
was that the laundering of the undercover officer’s money was
crazy and not in their best interest. Defendant Payne did nothing
to stop the money laundering activity.

Based on the foregoing evidence, on March 9, 1991,
defendant King was found guilty of conspiracy to launder money
and the substantive offense of money laundering and defendant
Payne was found guilty of conspiracy to launder money. Payne
was acquitted of the substantive offense of money laundering.

On June 21, 1991, King was sentenced to 50 months in

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prison and a $25,000 fine. Payne received a sentence of 46
months and a $25,000 fine.

Defendants timely filed an appeal.

Il.

We must first decide whether the government’s
investigation and undercover operation in regard to defendant King
shocks a universal sense of justice and fundamental sense of
fairness.

Defendant King argues that the government’s sting
operation was based on outrageous government conduct. This
defense was first articulated in United States v. Russell, 411 U.S.
423 (1973), which states that if the government conduct in an
undercover operation is so outrageous that it shocks the
conscience, the government would be barred from obtaining a
conviction. Jd. at 431-32. However, this defense does not
preclude the government from conducting undercover operations.

As the Supreme Court stated in Hampton v. United States, 425

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U.S. 484, 490 (1976), this defense only applies if the government |
activity in question violates some protected right of the defendant.
In United States v. Brown, 635 F.2d 1207, 1212-14 (6th Cir.
1980), this court articulated four factors to consider regarding
claims of outrageous government conduct. Defendant King
contends that there is no need for undercover investigations of
money laundering in which undercover agents pose as drug dealers
who are trying to launder money, because there is a less intrusive
means of investigating such activity. Defendant King argues that
the government should instead monitor all financial currency
transactions. This argument is ridiculous. The government has no
such authority.

The second factor to consider is whether the criminal
enterprise preexisted the undercover investigation. Defendant King
argues that the government only had suspicions of defendant
Coyle, the stockbroker, who had been implicated by the FBI

informant. Defendant King argues that before the undercover sting

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OO EEO

operation, the government had no suspicions that he was involved
in money laundering. This argument is to no avail. Before the
undercover officer ever met defendant King and discussed money
laundering with him, the government had a "reasonable suspicion"
that he was involved in money laundering because the undercover
agent had witnessed a telephone call in which Coyle called
defendant King and defendant King agreed to launder money for
a certain fee. Just because King was unknown when the
undercover operation commenced does not mean that his
constitutional due process rights were violated or that the
government’s conduct in his regard was outrageous. Once an
undercover operation has begun, new conspirators, who are at first
unknown to the government, may be uncovered curing the course

of the investigation.’

2 This case is distinguishable from Jacobson ». United States, No. 90-1124,
U.S.L.W., Vol. 60, No. 39 (April 6, 1992) recently decided by the Supreme
Court. Unlike Jacobson, the government in the present case did not make the
initial contact with defendant King or put pressure on King to join the money
laundering conspiracy. Defendant King was not the subject of the sting
operation, but became a willing participant after only one telephone call from

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The third factor to consider is whether the government
agent directed or controlled the enterprise. Defendant King claims
that the government was excessively involved in the money
laundering activity because one of its agents played the role of a
drug dealer who had money and put pressure on other people to
launder the money.

We do not agree that this involves excessive government
activity. The role playing and provision of money in the present
case merely gave the defendants the opportunity to commit the
crime of money laundering. The defendants, on the other hand,
supplied the fictitious account in which to deposit the laundered
money and accepted the cash and converted it into checks without
the filing of a currency transaction report, set up a fictitious

business called Investors Unlimited, and then issued checks back

defendant Coyle, providing evidence that King had engaged in prior
conversations with Coyle about money laundering. In contrast, the defendant
in Jacobson, who was the subject of the sting operation, was entrapped by the
government after extensive inducements to engage in illegal activity without
sufficient evidence that Jacobson was predisposed to violate the law.

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a,

to the fictitious account previously set up to accept the laundered
cash. In undercover drug deals it is not considered excessive for
the government to supply the funds to purchase the drugs or to
provide the drugs themselves to be purchased by the defendant.
See Hampton v. United States, 425 U.S. at 489-90. Similarly, in
the present case we do not believe it was excessive merely to
provide money to be laundered. It was the defendants who
devised the manner in which the cash was to be structured to avoid
detection.

The fourth factor to be considered is the impact of the law
enforcement activity on the commission of the crime. Defendant
King argues that the government’s impact was too great because
it continually put pressure on defendant Coyle to find other sources
for money laundering. This argument is to no avail for two
reasons. First, the Supreme Court has stated that the
government’s conduct must violate the defendant’s rights, not a

third-party’s right. /d. at 490, 96 S. Ct. at 1650. There is no

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evidence that the government coerced King. Second, defendant
Coyle denied that any pressure was placed on him by the
undercover officer to get other people involved in the money
laundering. Moreover, the facts indicate that upon the first
meeting between the undercover agent and Coyle, Coyle called
King, who immediately agreed to launder the money for a fee.
Finally, defendant King’s argument that the defense of
Outrageous government conduct is to be determined by the jury is
contrary to what has been stated by the Fifth Circuit. In United
States v. Stanley, 765 F.2d 1224, 1232 (Sth Cir. 1985), the court
stated that the defense of outrageous government conduct is an
issue to be determined by the court and not a jury. Also,
defendant King’s argument that 18 U.S.C. §1956(a)(3) is
unconstitutional because it has a provision for sting operations is
without merit. No court has ever stated that, as a matter of law,
it is impermissible for the government to engage in "undercover"

or "sting" operations. Instead, each operation must be examined

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based on the facts of each situation. In the present case, the facts,
which consist of role playing and providing money, do not indicate
that the government’s conduct was outrageous. Therefore, the
district court is affirmed on this issue.

Ill.

We must next decide whether the government violated
Batson v. Kentucky, 476 U.S. 79 (1986) by excluding two black
jurors who were active in civil rights causes.

Defendant King argues that the government peremptorily
challenged two jurors because of their race and excluded them
from the jury on the basis of race, violating Batson v. Kentucky.

The government argues that the reason it used two of its
peremptory challenges in order to exclude black activist groups,
NAACP and Black Caucus, was because defendant King was
trying to inject the issue of race discrimination into his trial.
Defendant King had sought to introduce evidence of a civil race

discrimination suit which he had filed against a former employer.

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The trial court reserved ruling on this motion until such time as the
defendant sought to introduce this evidence. It was against this
background that the prosecution sought to exclude the two jurors.
The government argues that it was not because of their race but
because of the advocacy groups to which they belonged that these
two individuals were excluded.

This court reviews a district court’s findings about the
credibility of the prosecutor’s asserted neutral explanations for
peremptory challenges under a clearly erroneous standard. United
States v. Peete, 919 F.2d 1168, 1179 (6th Cir. 1990). We do not
find that the distinction the government drew between the race of
the two individuals who were excused and the affiliations and
activities of those two individuals to be clearly erroneous.
Moreover, all black jurors were not excluded from the jury. In
these circumstances, we do not believe that the prosecutor's
explanation can be regarded as pretexual. Therefore, we affirm

the district court’s finding that the prosecutor offered a valid

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neutral explanation for the exclusions.
IV.

Both defendants King and Payne argue that hearsay
evidence was admitted in violation of Fed. Rule Evid., Rule
801(d)(2)(E), because it had not been shown by a preponderance
of the evidence that a conspiracy existed, or that the defendant
against whom the hearsay was offered was a member of the
conspiracy.

Specifically, defendant King argues that there-is insufficient
evidence to indicate that he was a member of the first money
laundering conspiracy which involved the laundering of the money
through the attorneys Ralph Jones and Ferris Williams should not
have been admitted against him because there is insufficient
evidence to link him to those two people of the first money
laundering transaction that occurred.

We disagree that there is insufficient evidence to link King

to Jones and Williams or to indicate that they were all members of

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’

the same conspiracy. First, Coyle testified that defendant King
gave him Jones’ and Williams’ telephone numbers and stated that
they were willing to "convert cash into checks for a fee." Second,
there was a recorded telephone severetion of defendant King in
which he apologizes for the disastrous and unprofessional conduct
of Jones and Williams. Third, there is a recorded telephone
conversation of defendant King, reaffirming King’s knowledge of
the problems incurred with Jones’ and Williams’ bounced checks.
For all of these reasons, the district court properly admitted the
statements of co-conspirators Jones and Williams against defendant
King. It was established by a preponderance of the evidence that
a conspiracy to launder money through attorneys Jones and
Williams existed and that defendant King, against whom the
hearsay testimony of Jones and Williams was offered, was a
member of the conspiracy.

In regard to defendant Payne, he first argues that the

statements which co-conspirator King made prior to March 20 and

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March 23, 1989 were statements made before he entered into the
conspiracy and were improperly admitted as co-conspirator
statements against him.

We disagree. Defendant Payne’s membership in the
conspiracy is evident from Payne’s own admissions made on
March 31, 1989. In other words, the statements of defendant
King, which Payne is contesting should not have been admitted
into evidence, merely affirm what Payne himself later admitted on
March 31, 1989. Although it is true that Payne did not meet and
speak with the undercover agent until March 31, 1989, King’s
statements about Payne’s prior activities were confirmed by the
conversation which Payne had with the undercover agent on March
31, 1989. In this conversation, Payne indicated that King had told
him about the problems the officer had had with the two attorneys
during the previous money laundering transaction and Payne

assured him that he would not have such problems with him.

Thus, it is not just the hearsay testimony of defendant King that

links Payne to the conspiracy, but his own overt act. Defendant
Payne’s own statements establish, by a preponderance of the
evidence, that he was a member of the conspiracy and that King’s
statements were in furtherance of the conspiracy. Therefore, they
were properly admitted under Fed. Rule Evid., Rule 801(d)(2)(E).

The second argument defendant Payne makes in regard to
co-conspirator statements is that there is no evidence that he was
a member of the first transaction of the money laundering
Cunspiracy which consisted of the money the undercover agent
gave to attorneys Jones and Williams on September 21, 1988,
which they then converted into cash.

Even if it is conceded that Payne was not a member of the
conspiracy involving the $50,000 cash given to attorneys Jones and
Williams, the admission of the testimony of Jones and Williams
was not prejudicial to Payne. The trial court, at defendant Payne’s
request, fully instructed the jury as to the law of multiple

conspiracies. Specifically, the trial Court instructed the jury that

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_ —

if they found Payne was not a member of the conspiracy involving
the first transaction with Jones and Williams, then the jury was not
to consider the evidence regarding the actions of Coyle, Jones, and
Williams in this regard in deciding the guilt of defendant Payne.
Moreover, the Supreme Court has recently held that the
insufficiency of the evidence as to one of multiple objectives of a
conspiracy charged’in a single count does not require setting aside
a general verdict of guilty on the charge. Griffin v. United States,
112 S. Ct. 466 (1991). Therefore, even if there were insufficient
evidence to tie Payne to the laundering of the $50,000 provided on
September 21, 1988, there was sufficient evidence to tie him to the
laundering of the $25,000 provided on April 12, 1989.
¥.

Defendant Payne also argues that the trial one improperly

placed the burden of proof regarding Payne’s alleged withdrawal

from the conspiracy on him and that the burden of proof should

have been placed on the government. Defendant Payne essentially

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is asking this court to reverse the precedent of this circuit in regard

to this issue. This court places the burden of proof of withdrawal
from a conspiracy on the defendant as stated in United States v.
Lash, 937 F.2d 1077, 1083 (6th Cir.), cert. denied, 112 S. Ct.
397 (1991). We see no reason for requesting an en banc panel of
this court to reconsider this opinion, as defendant wishes, because
it is consistent with the opinions of other circuits. See, e.g. United
States v. Cardall, 885 F.2d 656. 668 n.22 (10th Cir. 1989);
United States v. Walker, 796 F.2d 43, 49 (4th Cir. 1986); United
States v. Boys, 610 F.2d 521, 528 (8th Cir. 1979), cert. denied,
444 U.S. 1089 (1980). Moreover, the Sixth Circuit's position of
placing the burden of proof for affirmative defenses on the
defendant is consistent with the Supreme Court decision in Martin
v. Ohio, 480 U.S. 228 (1987). For these reasons, the district
court is affirmed on this issue.
VI.

Both defendants challenge their convictions based on

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insufficiency of the evidence. In essence, both defendants are
arguing that more credence should be placed on their testimony
than the testimony of defendant Coyle, who was cooperating with
the government and who was motivated to help try to convict
them. Defendant King argues that it is only Coyle’s testimony that
connects him to the money that was laundered in the second
transaction. What both defendants fail to realize is that under the
standard for the sufficiency of the evidence, the appellate court is
to construe all facts in favor of the government. Jackson v.
Virginia, 443 U.S. 307, 319 (1979).

It is clear that under this standard, there is sufficient
evidence to convict each defendant. Even though defendant Coyle
was testifying for the government, the jury had the right to credit
his testimony over that of the defenses asserted by defendants King
and Payne. In other words, the jury evidently believed defendant
Coyle rather than defendant King, whose attorney argued that there

was no evidence that King did anything with the $25,000 that the

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undercover agent had given to him on April 12, 1989,* or was
involved with the $50,000 given to the two attorneys. The jury
also credited the testimony of defendant Coyle over that of
defendant Payne that Payne did not withdraw from the conspiracy
as he alleged. Under the standard of construing all the evidence
in favor of the government, these facts as provided by Coyle must
be taken as true as the jury accorded them credibility. In regard
to defendant Payne, acquittal of the substantive offense does not
constitute a determination that no overt act was committed, nor
preclude a conviction on the conspiracy account. Boyd, 610 F.2d

at 528. Therefore, there is sufficient evidence to convict both

3 Defendant King argues that the specific currency that he received
from the undercover agent on April 12, 1989 cannot be traced and its
location remains unknown. This does not mean, however, that there is
insufficient evi-dence to indicate that after giving King $25,000 in cash,
the undercover agent received back a laundered check for $25,000 made
payable to his account in a fictitious name at Putnam Investment.
Defendant King’s argument that defendant Coyle, who had never been
given any money by the undercover agent, was alone responsible for the
laundered money is ridiculous. If defendant King just "sat on” the $25,000
as he alleges, why didn’t he return the money to Monaghan. King’s
argument that the government’s version of events is contrary to the
evidence is without merit.

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defendants King and Payne for conspiracy and sufficient evidence
to convict King on the substantive count of money laundering.
Vil.

Defendant King argues that he should not have been given
an enhancement under United States Sentencing Guideline § 2S1.1
because he believed the funds were the proceeds of an unlawful
activity. Defendant King argues that he was convicted in a "sting"
operation and the money was not actually drug money. Therefore,
he contends that the money is not the "proceeds of an unlawful
activity" as defined in the Guideline.

The plain meaning of Guideline § 2S1.1 states that the
enhancement applies if the defendant "knew or believed that the
funds were in proceeds of an unlawful activity." The Guideline
indicates that as long as the defendant believes that the funds were
the proceeds of an unlawful activity, the Guideline applies. The
district court is affirmed on this issue.

VIII.

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EES

Finally, we must decide whether defendant Payne should
receive the benefits of an acceptance of responsibility guideline
because he decided to testify in his behalf at trial and stated that he
withdrew from the conspiracy. We review a district court’s
determination of acceptance of responsibility under a clearly
erroneous standard. United States v. Williams, 940 F.2d 176, 182
(6th Cir.), cert. denied, 112 S. Ct. 66 (1991). The district court
made a finding that defendant Payne had not withdrawn from the
conspiracy as he testified. Because it found that Payne had
testified untruthfully, the court was warranted in refusing to give
him the acceptance of responsibility benefit of Guideline § 3E1.1.
It cannot be said that this finding was clearly erroneous.
Therefore, the district court is affirmed on this issue.

For the same reason, the district court is affirmed on its
finding that defendant Payne did not have a minimal role in the
offense. Even though defendant Payne was acquitted of the money

laundering charge in the indictment, he was convicted for

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ee

conspiracy to launder money. Therefore, the district court could
properly find that he did not have a minimal role in the conspiracy
even though he was not convicted for laundering money. This
finding was not clearly erroneous, because defendant Payne was
recorded talking to undercover agent Monaghan, telling Monaghan
that he could set up a transaction which would launder his money
for a 20% fee very quickly and that he would set up a fictitious
business to do so, and this role was not a minimal role in this
offense. For these reasons, the district court is affirmed on these
issues.
IX.

To conclude, the district court is hereby AFFIRMED.

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NO.

IN THE
Supreme Court of the United States
OCTOBER TERM, 1992

HUBERT PAYNE,

Petitioner,

VS.

UNITED STATES OF AMERICA,

Respondent.

APPENDIX TO
PETITION FOR WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF
APPEALS FOR THE SIXTH CIRCUIT

JAMES R. WILLIS, ESQ.
WILLIS, BLACKWELL & ROGERS
Suite 350, Courthouse Square Building
310 Lakeside Avenue N.W.
Cleveland, Ohio 44113

(216) 523-1100

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386011_1344%3A2. Public record. Not legal advice.