Petition for Writ of Certiorari — Sellers v. United States

(\ ) supreme Court, U8.

FILED -

00 4783 SEP 2 2.2000

OFFICE OF JHE CLERK

No. 00-

IN THE

Supreme Court of the United States

W. HAROLD SELLERS and ROBERT DUPRE,

Petitioners,

v.

UNITED STATES OF AMERICA,

Respondent.

On PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES CouRT OF APPEALS FOR THE FIFTH CIRCUIT

PETITION FOR A WRIT OF CERTIORARI

WILLIAM F. WESSEL E. ARMISTEAD EASTERBY*

WESSEL & ASSOCIATES Looper, REED & McGRAWw

Attorneys for Petitioner A PROFESSIONAL CORPORATION

Robert Dupre Attorneys for Petitioner

127 Camp Street : W. Harold Sellers

New Orleans, LA 70130 1300 Post Oak Boulevard

(504) 568-1112 Suite 2000

Houston, TX 77056

(713) 986-7000

* Counsel of Record

162256 @) Counsel Press LLC

(800) 274-3321 +* (800) 359-6859

A

7

eR eve ee NPR IRE Te EF HI LOE LIS LPT ILI CREPE ELIDA OOS EAP eS aN be 7 ee FO ot RO Oe REET TIE I ON eR = oe eH OR NR He iN - ns vy

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i

QUESTIONS PRESENTED

Whether venue for a 18 U.S.C. § 1957 money-laundering

offense is properly triable in the Eastern District of Louisiana

— even though Petitioners did not come into possession of

any criminally derived proceeds in that district — as would

be required by under United States v. Cabrales, 524 U.S. 1,

118 S. Ct. 1772 (1998), and decisions of the Second, Tenth,

and Eleventh Circuits.

Whether the retroactive application of United States v.

Wells, 519 U.S. 482, 117 S. Ct. 921, 137 L. Ed. 2d 107 (1997)

— and its finding that materiality is not an element of

18 U.S.C. § 1014 — violated the ex post facto clause of the

United States Constitution.

ll

TABLE OF CONTENTS

Page

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Table of Cited Authorities .......cccusctensces iV

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CPOE TOON oS 5s ie Fes eke ene eee 1

Grownds Gor FerieGetiee «os isd dan ewiecaenen ]

Constitutional and Statutory Provisions Involved ... 2

cemeniek ohtatibe ee reer 2

A. The Issue of Proper Venue for the Money-

LUNG COUNED.. «x oacccneeaseeereees 3

B. The Issue of Retroactive Application of the

bee ee 3

Reasons for Granting the Writ ................. 5

I. The Decision Of The Fifth Circuit As It

Relates To Venue Squarely Conflicts With

The Decisions Of The First, Second, Fourth,

Seventh, Tenth, And Eleventh Circuits. ... 5

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Contents

Il. The Decision Of The Fifth Circuit As It

Relates To Venue Conflicts With A Prior

Decision Of This Court, And Otherwise

Presents An Important Issue Of Federal

PSE EE PEE Lee ETC TOLLE TERESI

III. The Decision Of The Fifth Circuit As It

Relates To The Retroactive Application Of

The Wells Decision Conflicts With This

Court’s Prior Precedent Dealing With The

Constitutional Prohibition Against Ex Post

Facto Application Of Intervening Judicial

Decisions To Pending Cases. ............

SEE ee eee a eee ee ee

Page

12

15

21

iv

TABLE OF CITED AUTHORITIES

Page

Cases:

Barefoot v. Estelle, 463 U.S. 880 (1983) ......... 6

Bouie v. Columbia, 378 U.S. 347, 84 S. Ct. 1697

hg RS reap any tere Ph) eh 17, 19

Calter v. Bal, FUE. FOS Cree) hanks ciniesices 15

California Dept. of Corrections v. Morales, 514 U.S.

ee eB ei ee ye ee ee 16

Carmell v. Texas, 67 Crim. L. Reporter 166

FO here rat 16

Collins v. Youngblood, 497 U.S. 37, 110 S. Ct. 2715

CORED 65k eas bos baat ees Cee 1s, 17

Dobert v. Florida, 432 U.S. 282, 97 S. Ct. 2290

CUR ETE v0 kb cd esos aes ees 16

Lozada v. Deeds, 498 U.S. 430 (1991) .......... 6

Marks v. United States, 430 U.S. 188, 97 S. Ct. 990

COSTER 0 ks dkasee cee beden eee 17, 19, 20

Memoirs v. Massachusetts, 383 U.S. 413, 86 S. Ct.

WEF LEMOED c kbnes ve ceaknci eee ee 19, 20

Miller v. California, 413 U.S. 15, 93 S. Ct. 2607

CSPI Ee 5 kksi bbs bskkasbnwentktiee eee 19, 20

Cited Authorities

Page

Miller v. Florida, 482 U.S. 423, 107 S. Ct. 2446

eee RORORE Penis SPEDE Dore weer et 16, 17

Ransom v. Johnson, 126 F.3d 716 (Sth Cir. 1997),

cert. denied, 522 U.S. 944, 118 S. Ct. 361 (1997)

reer rrr rrr errr er. Veet ear, U, 12

United States v. Cabrales, 524 U.S. 1 (1998) .....

a eo heeek Wake RES Oe 3S. bi, tf. 22

I neh oh x daneanaeas tr oeees Reaeeiees 10

United States v. Dupre and Sellers, 117 F.3d 810

CRT, SOGFI kc ddceneackscevascntssweras 7,9

United States v. Edgmon, 952 F.2d 1206 (10th Cir.

1991), cert. denied, 505 U.S. 1223, 112 S. Ct.

DUST CUGGRD uv den cbs 5s ccawkns decease ivansi 10

United States v. Gaudin, 515 U.S. 506 (1995) ..4, 18, 20

United States v. Jobe, 101 F.3d 1046 (Sth Cir.

| Pee ets Pree roe rir re te 18

| eee Te rere se Te ere ry Lt 8, 9, 10

vi

Cited Authorities

United States v. Kennedy, 64 F.3d 1465 (10th Cir.

| PSPS eT Ter TTC e Ter rere re

SED: Kae Ne cakees Jeon b kas ewes eeee ee ees

7 | paar parr ery marry eur wrure ty gw corre

SEE idea ch ss vkntv kohehetscuaeeeaeeeees

United States v. Mankarious, 151 F.3d 694 (7th Cir.

1998), cert. denied, 525 U.S. 1056, 119 S. Ct. 621

re ee rere ree re ret ys ee

United States v. Mullens, 65 F.3d 1560 (11th Cir.

1995), cert. denied, 517 U.S. 1112, 116 S. Ct.

RBee LAD 6 6k dbCUK exesowineeeine eve wakes

United States v. Piervinanzi, 23 F.3d 670 (2nd Cir.

1994), cert. denied, 513 U.S. 900, 115 S. Ct. 259

CEE 5255 couse Ms Eola Re ea ek cone eee

United States v. Pomranz, 43 F.3d 156 (Sth Cir.

1995), cert. denied, 526 U.S. 275, 116 S. Ct.

8 BS... | Ree irape rarer nirincrty ss epee

vii

Cited Authorities

: Page

United States v. Rodriguez-Moreno, 526 U.S. 275,

ee ere. 6. Bee rer re re S. 13, 14

Wells v. United States, 519 U.S. 482, 117 S. Ct. 921,

E37 he, BE BE LOT CLG - cad oeaivnes i, 3, 4, 15, 18

Statutes:

Lair 1 okt & os rr ren ew re ery er re. t 2

IS CIES. CGR ES avn vic even een ey keene’ 13

ipl tem f | Meererrerrerrr : i, 2, 3, 17, 18, 19, 20

i Rie eo ee Peeere Tree Terre Ty cre 2, 3, 18

Bok Rome Ser eer i, 2, 5, 8, 9, 12

aid fam Boy | errr rrr errr rr or re 8

gtk Eo Fy lc. errs he ee 8

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yr 2ts te F . - . eeerr er er ee reer Te TT 4

Vill

Cited Authorities

Page

United States Constitution:

he ee De er err er ary rae eer Ee ms,

Pe tg a Ea Nas bh os oe 15

PERE TE kek cxewes EP POE TL ee ee Eres 6

ee NS oe na av eek eee esate ees + iy SO

Veh dea 55a 2, 6

Fourteenth Amten@memt ...... 0c ccecsccncceecss 17

Other Authority:

Ex Post Facto Clauses, 131 L. Ed. 2d 1043 at § 4(e) . 15

W. LA FAVE anp A. Scott, Substantive Criminal

EA, © OS CO 6 Khan aC ae en ew iees 18

ix

TABLE OF APPENDICES

Appendix A — Order Of The United States Court

Of Appeals For The Fifth Circuit Dated And Filed

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Appendix B — Order And Reasons And Judgment

Of The United States District Court For The

Eastern District Of Louisiana Dated And Filed

Se Pe os ba cd eek Co reek oc cat

Appendix C — Order And Reasons Of The United

States District Court For The Eastern District Of

Louisiana Dated And Filed September 24,

eet eS RoW e Benne wee o iar men ea

Appendix D — Order Of The United States Court

Of Appeals For The Fifth Circuit Denying Motion

For Reconsideration Dated And Filed August 8,

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1

Petitioners, W. Harold Sellers and Robert Dupre,

respectfully pray that a Writ of Certiorari issue to review

the decision of the United States Court of Appeals for the

Fifth Circuit (the “Fifth Circuit’’) in this case.

OPINIONS BELOW

The June 30, 2000, opinion of the Fifth Circuit is

unreported and is reproduced at Appendix (“‘App.”) A hereto

at la-3a. The July 7, 1999, underlying order of the district

court denying Petitioners’ motion for Certificate of

Appealability on two of the issues forming the basis of this

Petition is unreported and reproduced at Appendix B hereto

at 4a-19a. The September 24, 1999, underlying order of the

district court that denied Petitioners’ motion for

reconsideration of the July 7, 1999, Order is unreported and

reproduced at Appendix C at 20a-23a. The order of the Fifth

Circuit denying Petitioners’ motion for rehearing is

unreported and reproduced at Appendix D hereto at 24a-25a.

GROUNDS FOR JURISDICTION

The judgment of the Fifth Circuit was issued on

June 30, 2000. Petitioners filed a Motion for Rehearing

on July 13, 2000, which was denied on August 8,

2000. The jurisdiction of this Court is invoked under

28 U.S.C. § 1254(1).

2

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED

Article I, Section 9, Clause 3 of the United States

Constitution, provides in relevant part that “No Bill of

Attainder or ex post facto Law shall be passed.”

The Fifth Amendment of the United States Constitution,

which provides in relevant part that “no person shall . . . be

deprived of life, liberty, or property, without due process of

Pie.

The Sixth Amendment of the United States Constitution,

which provides in relevant party that, “[i]n all criminal

prosecutions, the accused shall enjoy the right to a speedy

and public trial, by an impartial jury of the State and district

wherein the crime shall have been committed; which district

shall have been previously ascertained by law... .”

Ss 18 U.S.C. §§ 1014 and 1957, which are reprinted in

Appendix E.

STATEMENT OF THE CASE

The Petitioners were indicted on August 13, 1995.

The indictment alleged sixteen counts of criminal

conduct, including two counts of bank fraud pursuant to

18 U.S.C. § 1344, three counts of false statement pursuant

to 18 U.S.C. § 1014, nine counts of money-laundering

pursuant to 18 U.S.C. § 1957, and conspiracy to commit bank

fraud pursuant to 18 U.S.C. § 371.

initiaited

3

A. The Issue of Proper Venue for the Money-laundering

Counts.

The money-laundering counts of the indictment specifically

alleged “. .. wire transfers in the foilowing amounts from a

domestic bank in Houston Texas to the following foreign and

domestic accounts, such property having been derived from a

specified unlawful activity, that is bank fraud as charged in

Count 2.”

The instructions from the district court to the petit jury

specifically required the jury to find that the transactions

involved in the money-laundering to have come from the bank

fraud proceeds as charged in Count 2.

The jury found petitioners guilty of the money-laundering

counts 7-15.

B. The Issue of Retroactive Application of the Wells

Decision.

At the time of petitioners’ three-week jury trial beginning

August 1, 1994, and at the time of the bank fraud, false

statement, and money-laundering offenses in December of | 988,

the law in the Fifth Circuit held materiality to be an element of

§§ 1014 and 1344. The government was required to prove

materiality. The Court instructed the jury that materiality was

for the Court to decide.

The United States Supreme Court decided the case of

Wells v. United States in 1997, after the indictment and trial of

petitioners. This decision removed materiality as an element

from § 1014. The Fifth Circuit applied the holding of Wells as

to materiality in their decision to affirm petitioners’ conviction

on direct appeal, 117 F.3d 810 (1997), cert. denied, 522 U.S.

1078, 118 S. Ct. 857.

4

Petitioners filed a Motion to Vacate and set aside their

convictions under 28 U.S.C. § 2255 and urged both of Issues

A and B herein. The district court denied their motion, and

refused to grant a certificate of appealability on these issues.

The district court held in its Order of July 8, 1999, that

money-laundering was a continuing offense and that venue

was proper where the underlying substantive offense

occurred. [App. B at 8a]. The district court also held that in

the light of Wells the failure to allow the jury to decide the

issue of materiality was not Gaudin error, and was not

prejudicial. [App. B at 14a].

The Petitioners separately sought a certificate of

appealability in the Fifth Circuit on several issues, including

the two forming the basis for this Petition. The Fifth Circuit

denied this Motion for Certificate of Appealability on June

30, 2000, and then denied Petitioners’ Motion for Rehearing

on August 8, 2000. [App. A; App. D].

Petitioners seek the issuance of a Writ of Certiorari

relating to the improper venue of the money-laundering

convictions, and the retroactive application of United States

v. Wells.

5

REASONS FOR GRANTING THE WRIT

I.

THE DECISION OF THE FIFTH CIRCUIT AS IT

RELATES TO VENUE SQUARELY CON FLICTS WITH

THE DECISIONS OF THE FIRST, SECOND, FOURTH,

SEVENTH, TENTH, AND ELEVENTH CIRCUITS.

The Petition should be granted because the Fifth Circuit

decision is in conflict with the decisions of several other Circuits.

The First, Second, Fourth, Seventh, Tenth, and Eleventh Circuits

hold that money-laundering is an after-the-fact offense and is

not a continuing offense. The Tenth Circuit interpreted the nature

of a § 1957 offense as suggesting that Congress viewed such a

violation as occurring only after the individual gained

Possession or disposal of the proceeds generated by the criminal

"activity; as did the Eleventh Circuit in agreeing that the

underlying criminal activity must be complete before money-

laundering can occur; the First and Fourth Circuits are in accord.

In contrast, the Fifth Circuit affirmed the district court’s holding

that money-laundering was a continuing offense.

The Petitions should also be granted because the decision

of the Court of Appeals is in conflict with this Court’s decisions

in United States y. Cabrales, 524 U.S. 1 (1998) and United

States v. Rodriguez-Moreno, 526 U.S. 275 (1999). These cases

hold that the existence of criminally generated proceeds was a

circumstance element of the offense but the proscribed conduct

— defendant’s money-laundering activity — occurred after the

fact. Even though these cases of this Court were urged to the

Fifth Circuit, that court affirmed the district court’s holding

declaring money-laundering to be a continuing offense.

6

The question presented by this issue is of constitutional

dimension. Article III of the Constitution requires that

“(t]he Trial of all Crimes. . . shall be held in the state where the

said crimes shall have been committed.” Its command is

reinforced by the Sixth Amendment’s requirement that

“ijn all criminal prosecutions, the accused shall enjoy the nght

to a speedy and public trial, by an impartial jury of the State

and district wherein the crime shall have been committed.” It is

a question worthy of this Court’s attention to finally put to rest

the erroneous contention that venue for money-laundering may

be proper anywhere the underlying offense continued to occur.

Petitioners would show that they have met the standard for

issuance of a certificate of appealability. They have

demonstrated that the questions raised on these two issues “are

debatable among jurists of reason; that a court could resolve

the issue [in a different manner] or that the questions are

adequate to deserve encouragement to proceed further.” Ransom

v. Johnson, 126 F.3d 716, 720 (Sth Cir. 1997), cert. denied,

522 U.S. 944, 118 S. Ct. 361 (quoting Barefoot v. Estelle, 463

U.S. 880, 893 (1983). In each issue Petitioners have made a

substantial showing of the denial of a federal nght. Barefoot at

893; Lozada v. Deeds, 498 U.S. 430, 432 (1991). A certificate

of appealability should have issued for both the venue and ex

post facto issues.

Petitioners were tried in Louisiana where Oak Tree Savings

Bank (OTSB) was headquartered. The loan transaction which

formed the basis for all the substantive counts occurred

exclusively in California. None of the funds came into

Petitioners’ hands until the funds arrived in Texas. The

indictment charged the funds were transferred “from a domestic

bank in Houston, Texas.” The district court posited that the

money-laundering counts were part of a continuing criminal

offense, and were properly before the court. [App. B at 8a].

7

Other circuits squarely disagree with the Fifth Circuit’s

analysis of this important issue of federal and constitutional

law:

But the statute does not make money laundering

a continuing offense. The statutory language and

legislative history indicate that each transaction

or transfer of money constitutes a separate

offense. See Senate Report No. 433, 99% Cong.

2nd Sess. 12-13 (1986); U.S. v. Conley, 826

F. Supp. 1536, 1543-44 (W.D. Pa. 1993)

(concluding that unit of prosecution is

“each individual financial transaction.”).

United States v. Kramer, 73 F.3d 1067, 1072 (11th Cir.

1996).

The Fifth Circuit has already determined the critical

portion of this issue in its opinion in this case on its original

appeal. United States v. Dupre and Sellers, 117 F.3d 810,

821- 22 (Sth Cir. 1997), wherein it wrote:

The bank fraud charged in Count 2 was complete

when Lomas and OTSB, through Chicago Land

Title Company, transferred the funds in question

to Sellers’ account in Houston, Texas. The crime

was complete and the funds became “criminally

derived property” when they come under Sellers’

control. Therefore, counts 7-15, which stemmed

from the subsequent wire transfers of funds to

appellants’ accounts in Cayman Island and

throughout the United States, properly charged

money laundering for purposes of §1957.

Id. (internal citations omitted) (emphasis added).

8

In its Order, the district court sought to harmonize this

case with Cabrales by positing that the money-laundering

counts were part of a continuing criminal offense. The Court

concluded that where the launderer acquires the funds in one

district and transferred them to another, venue can be proper

in either district. Accepting the Court’s rationale, the issue

would appear to be whether Petitioners transferred funds

from the Eastern District of Louisiana to another jurisdiction

within the meaning of the money-laundering statute.

United States v. Piervinanzi, 23 F.3d 670, 677 (2nd Cir.

1994), cert. denied, 513 U.S. 900, 115 S. Ct. 259, interpreted

the salient portions of 18 U.S.C. § 1957(a). In Piervinanzi,

the defendant contended his actions did not come within the

provisions of § 1957. The Second Circuit noted that the

starting point for interpreting a statute is the plain meaning

of the statute’s language. Jd. Unless otherwise defined,

statutory words will be interpreted as taking their ordinary

and common meaning. /d. At issue in Piervinanzi and in

this case is whether the alleged money-laundering offense

falls within the statutory language, or whether Petitioners

“obtained” the “criminally derived property” in the Eastern

District of Louisiana within the meaning of § 1957(a)(2).

As noted in Piervinanzi, “the ordinary meaning of the

word ‘obtained’ entails possession of a thing.” Jd. at 677.

Similarly, the word “property” implies ownership, or the

“exclusive right to possess, enjoy, and dispose of a thing.”

Id. The use of this language demonstrates that the proceeds

of a crime must actually be in the defendant’s possession

before he can attempt to launder them. /d.; see also United

States v. Johnson, 971 F.2d 562, 569 (10th Cir. 1992).

9

Both the plain language of § 1957 and the legislative

history behind it suggest that Congress targeted only those

transactions occurring after proceeds have been obtained

from the underlying unlawful activity. United States vy.

Lovett, 964 F.2d 1029, 1042 (10th Cir. 1992) (stating

“Congress intended [§ 1957] to separately punish a defendant

for monetary transactions that follow in time the underlying

specified unlawful activity that generated the criminally

derived property in the first place.”)

Clearly the money or “property” (as defined herein) was

not “obtained” (as defined herein) and was not “possessed,

enjoyed, or disposed of” by the Petitioners until they received

it in Houston Texas.

United States v. Mullens, 65 F.3d 1560, 1564-65 (11th

Cir. 1995), cert. denied, 517 U.S. 1112, 116 S. Ct. 1337,

held that “possession” is defined as deposited in the

defendant’s account, “[o]nce deposited, the funds met the

definition ‘of laundered funds’ under 18 U.S.C. 1956(a).”

The first deposit by Petitioners of any proceeds was in

Houston, Texas, as clearly stated in the indictment. Simply

put, Petitioners did not have “possession” of the money until

it was deposited into the Houston bank accounts

(as previously determined by the Fifth Circuit in United

States v. Dupre and Sellers, supra).

In United States v. Johnson, 971 F.2d 562, 569 (10th

Cir. 1992), the Tenth Circuit, in overturning the defendant’s

conviction for money-laundering, similarly interpreted the

nature of a 18 U.S.C. § 1957 offense as “suggest[ing]

Congress viewed a violation of § 1957 as occurring only

after the individual . . . gained possession or disposal of the

proceeds generated by the criminal activity.” Jd. at 568.

10

In each of these cases we concluded that Congress

intended to impose separate punishments for the

money-laundering transactions and for the ~-

underlying criminal activity.

* * *

Congress aimed the crime of money laundering

at conduct that follows in time the underlying

crime....

Id. at 569 (emphasis added); See also United States v.

Edgmon, 952 F.2d 1206, 1213 (10th Cir. 1991), cert. denied,

505 U.S. 1223, 112 S. Ct. 3037 (1992); United States v.

Lovett, 964 F.2d 1029 (10th Cir. 1992). Similarly the

Eleventh Circuit in United States v. Christo, 129 F.3d 578,

580-81 (11th Cir. 1997), agreed that “the underlying criminal

activity must be complete before money laundering can

occur.” (emphasis in original).

The main issue in a money-laundering charge, therefore,

is determining when the predicate crime [bank fraud]

becomes a “completed offense,” after which money-

laundering can occur. United States v. Kennedy, 64 F.3d

1465, 1477-78 (10th Cir. 1995). A bank fraud offense is not

complete until there is an “execution” of the scheme to

defraud. The execution is completed by the movement of

money from the financial institution. United States v.

Mancuso, 42 F.3d 836, 847 (4th Cir. 1994); United States v.

Lilly, 983 F.2d 300, 304-05 (1st Cir. 1992).

Oak Tree Savings Bank lost nothing through the bank

fraud until it paid the money to Chicago Title in California.

Chicago Title paid the money to Lomas Financial in Dallas,

11

Texas, and then Lomas paid the money to Sellers and Dupre

in Houston, Texas. Only then did the Petitioners gain control

of the money to wire transfer it to other accounts — the steps

necessary to constitute money-laundering.

United States v. Mankarious, 151 F.3d 694, 703-05

(7th Cir. 1998), cert. denied, 525 U.S. 1056, 119 S. Ct. 621,

confirmed the case holdings that stand for the rule that the

predicate offenses must produce proceeds before anyone can

launder these criminally derived proceeds. Cases use the

language of time to describe the relationship of

money-laundering and the predicate offense. These cases

state that the predicate offense must be “completed” or

“earlier” or “antecedent” to the money-laundering. Jd. at 703;

See, e.g., United States v. Cabrales, 524 U.S. 1, 118 S. Ct.

1772 (1998) (stating the money-laundering statutes “interdict

only the financial transactions . . . not the anterior criminal

conduct that yielded the funds actually laundered.”

Id. at 1776).

United States v. Brennan, 183 F.3d 139, 144 (2nd Cir.

1999) emphasized the right of the accused to be prosecuted

where the crime was committed:

As the Supreme Court has recently reiterated,

“(T]he locus delicto [of the charged offense] must

be determined from the nature of the crime alleged

and the location of the act or acts constituting it.”

United States v. Rodriguez-Moreno, 526 U.S. 275,

119 S. Ct. 1239, 1242, 143 L.Ed.2d 388 (1999),

quoting United States v. Cabrales, 524 U.S. 1, 6-

7,118 8S. Ct. 1772, 141 L.Ed.2d 1 (1998). In doing

so we look at the “key words which define the

criminal offense in the statute. . . .” Prosecution

under the mail fraud statutes is permissible only

12

al ai et ee ee

in those districts in which a prescribed act occurs,

i. e., in which the defendant “places,” “deposits,”

“causes to be deposited,” “takes,” or “receives”

mail.

eT oe

Id. at 147.

The money-laundering statute, § 1957, clearly permits

prosecution only where the acts occurred — where

Petitioners received the money and then laundered it by wire

transfer — Houston, Texas.

THE DECISION OF THE FIFTH CIRCUIT AS IT

RELATES TO VENUE CONFLICTS WITH A PRIOR

DECISION OF THIS COURT, AND OTHERWISE

PRESENTS AN IMPORTANT ISSUE OF FEDERAL LAW.

ee ee ee eee

The decision of the Fifth Circuit conflicts with a

controlling opinion of this Court. In United States v.

Cabrales, 524 U.S. 1, 118 S. Ct. 1772 (1998), a unanimous

court determined that the proper venue for a section 1957

money-laundering count was appropriate in the venue where

the money-laundering occurred; not where the underlying

crime occurred. Id. at 1775. Money-laundering is essentially

an “after the fact” crime.

In Cabrales, the laundered money derived from the

unlawful distribution of cocaine in Missouri, while the

laundering all occurred in Florida. Jd. at 1774. The Court |

succinctly stated, “[t]hat the money came from Missouri is

of no moment,” and affirmed the Eighth Circuit’s decision

13

to uphold the trial court’s dismissal of the indictment.

Id. at 1775. Prior to Cabrales, the Fourth, Seventh and Ninth

Circuits had held that venue was proper in the district where

the funds were unlawfully generated. Jd.

The Supreme Court decision in United States v.

Rodriguez-Moreno, 526 U.S. 275, 119 S. Ct. 1239, (1999)

is also instructive. This cased involved the question of venue

in a firearm/violent crime prosecution. In Rodriquez-Moreno,

The Supreme Court dealt with 18 U.S.C. § 924(c)(1), which

provides in relevant part:

Whoever, during and in relation to any crime of

violence . . . for which he may be prosecuted.in a

court of the United States, uses or carries a

firearm, shall, in addition to the punishments

provided for such crime of violence ... be

sentenced to imprisonment for five years.

The Petitioner in Rodriquez-Moreno was tried and

convicted in New Jersey under this statute. Petitioner argued

that because he used the firearm solely in Maryland, venue

for this crime was improper in New Jersey. The Third Circuit

accepted this argument, and reversed. The Supreme Court

granted certiorari to resolve an apparent conflict between

the Third Circuit and the Fifth Circuit in United States v.

Pomranz, 43 F.3d 156 (Sth Cir. 1995), cert. denied, 526 U.S.

275, 116 S. Ct. 513. 3

In reversing the Third Circuit, the Supreme Court

compared its 1998 decision in United States v. Cabrales to

Rodriguez-Moreno. The Supreme Court was careful to

distinguish the result in Rodriguez-Moreno:

14

By way of comparison, last term in United States v.

Cabrales, 524 U.S. 1, 118 S. Ct. 1772 (1998), we

considered whether venue for money laundering, in

violation of 18 U.S.C. §§ 1956(a)(1)(B)(1i) and 1957,

was proper in Missouri, where the laundered

proceeds were unlawfully generated, or rather, only

in Florida, where the prohibited laundered

transactions occurred. As we interpreted the

laundering statutes at issue, they did not proscribe

“the anterior criminal conduct that yielded the funds

allegedly laundered.” Cabrales, 524 U.S. at 7, 118

S. Ct. 1772. The existence of criminally generated

proceeds was a circumstance element of the offense

but the proscribed conduct — defendant’s money

laundering activity — occurred “ ‘after the fact’ of

an offense begun and completed by others.” Ibid.

Here, by contrast, given the “during and in relation

to” language, the underlying crime of violence is a

critical part of the § 924(c)(I) violation.

Rodriguez-Moreno, 526 U.S. at 280 n.4, 119 S. Ct.-1239.

(emphasis added). This further illustrates the separate nature

of the money-laundering offense, which, in this case,

occurred exclusively in Houston, Texas.

It is impossible to argue that the Petitioners ever received

possession any money in Louisiana, where they were tried.

Proper venue could only be had in Houston, Texas. Petitioner

respectfully requests the issuance of a Writ of Certiorari to

resolve this important issue of federal law.

15

IIl.

THE DECISION OF THE FIFTH CIRCUIT AS IT

RELATES TO THE RETROACTIVE APPLICATION

OF THE WELLS DECISION CONFLICTS WITH THIS ~

COURT’S PRIOR PRECEDENT DEALING WITH

THE CONSTITUTIONAL PROHIBITION AGAINST

EX POST FACTO APPLICATION OF INTERVENING

JUDICIAL DECISIONS TO PENDING CASES.

Even before the enactment of Federal Constitution’s

amendments known as the Bill of Rights, some specific

limitations on governmental power were incorporated into

the Constitution. One of those limitations, imposed by the

Constitution on the Federal government (in Art. I, § 9, cl. 3)

and on the states (in Art. I, § 10, cl. 1) consisted of prohibiting

the passage of what had been known as “ex post facto” laws

— literally, laws passed “after the fact.” Collins v.

Youngblood, 497 U.S. 37, 110 S. Ct. 2715 (1990).

Starting with the opinion of Justice Chase in the seminal

case of Calder v. Ball, 3 U.S. 386 (1798), the Supreme Court

has recognized four basic types of retrospective changes in

penal law which are prohibited by the ex post facto clauses

—— enactments which “. . . (4) alter the legal rules of evidence

so as to allow conviction upon less or different proof than

the law required at the time an offense was committed.”

For a detailed citation of such cases pertaining to (4)

see Annotation Ex Post Facto Clauses, 131 L. Ed. 2d 1043

at § 4(e), 1069-71.'

1. A law reducing the quantum of evidence required

to convict an offender is as grossly unfair as, say,

(Cont'd)

16

In Miller v. Florida, 482 U.S. 423, 107 S. Ct. 2446

(1987) the court held that in order for a statute to fall within

the Federal Constitution’s prohibitions against ex post facto

laws, the statute must disadvantage the offender affected by

it, must alter substantial personal rights, and must be more

onerous than the prior law. Similarly, the Supreme Court

held in California Dept. of Corrections v. Morales, 514 U.S.

499, 115 S: Ct. 1597 (1995) the focus of an inquiry under

the Constitution’s ex post facto clause is not on whether a

legislative change produces some ambiguous sort of

disadvantage, but on whether any such change alters the

definition of criminal conduct.

Legislative-enactments retrospectively eliminating a

defense to a criminal charge are invalid under the ex post

facto clause of the Federal Constitution. The criminal quality

attributable to an act, by the legal definition of the offense,

should not be altered after the fact to the disadvantage of the

accused. Dobert v. Florida, 432 U.S. 282, 97 S. Ct. 2290

(1977). Further, a law which alters the legal rules of evidence

SO as to require less or different proof than the iaw required

at the time of commission of an offense, in order to convict

(Cont'd)

retrospectively eliminating an element of the

offense, increasing the punishment for an existing

offense, or lowering the burden of proof. . . . In each

of these instances, the government subverts the

presumption of innocence by reducing the number

of elements it must prove to overcome that

presumption. . . . Reducing the quantum of evidence

necessary to meet the burden of proof is simply

another way of achieving the same end.

Carmell v. Texas, 67 Crim. L: Reporter 166 (Aug. 30, 2000).

17

the offender, is an ex post facto law. A legislature, by simply

labeling a law procedural, cannot immunize it from scrutiny

under the ex post facto clause. Collins v. Youngblood; Miller

v. Florida, supra.

Although the ex post facto clauses of the Federal

Constitution have been held to apply to legislation, there is

precedent that similar restrictions apply, as a matter of due

process, to judicial changes in the law. Bouie v. Columbia,

378 U.S. 347, 84 S. Ct. 1697 (1964). In Bouie, the Court

noted that (1) an unforeseeable judicial enlargement of a

criminal] statute, applied retrospectively, operated precisely

like an ex post fact law; and (2) if a state legislature was

barred from passing such a law, then it must follow that a

state court was barred by the due process clause of the

Constitution’s Fourteenth Amendment from achieving the

same result by judicial construction. Similarly, the court in

Marks v. United States, 430 U.S. 188, 97 S. Ct. 990 (1977),

in rejecting the retroactive application of a judicially created

obscenity standard, noted that the principle on which the ex

post facto clause is based — namely the notion that persons

have a right to fair warning of that conduct which will give

rise to criminal penalties — was fundamental to the concept

of constitutional liberty and, as such, was protected against

judicial action by the due process clause of the Constitution’s

Fifth Amendment.

In Petitioners’ case, the government conceded that

materiality was an element of the § 1014 counts at the time

of trial by including it as an element in the indictment. The

district court included this element in its jury instructions

although it told the jury it was for the court to decide.

18

Wells v. United States, 519 U.S. 482, 117 S. Ct. 921

(1997), was not decided until February, 1997, after the

indictment and trial of Petitioners. Although Wells removed

materiality as an element from § 1014, it is undisputed that

materiality was an element of § 1014 when Petitioners were

tried for the crime. After Gaudin and before Wells, in 1996,

the Fifth Circuit decided (on the second rehearing) in United

States v. Jobe, 101 F.3d 1046 (Sth Cir. 1996), that §§ 1014

and 1344 would require the government to prove and the

jury to find materiality. Id. at 1061 (stating “Count 1

conspiracy convictions required materiality findings insofer

as they rested on substantive § 1014 false statement and

§ 1344 bank fraud offenses, which have up to now clearly

incorporated a materiality element.”’)

Petitioners objected to the refusal of the district court to

submit the issue of materiality to the jury and in lieu thereof

Petitioners submitted proposed instructions for the court to

allow the jury to determine the issue of the materiality

element. Jobe underscores that Wells changed the elements

of § 1014 to omit materiality after Appellants’ trial had

concluded. Jobe, 101 F.3d at 1061. Prior to Wells, every

circuit court had included materiality as an element of § 1014.

It was not within the Fifth Circuit’s power to retroactively

apply the holdings in Wells to Petitioners.

One ought not to be punished if one reasonably relies

upon a judicial decision later held to have been erroneous.

The better view is that it is a defense that the defendants

acted in reasonable reliance upon a judicial decision later

held to be invalid or erroneous. W. La FAVE AND A. Scott,

Substantive Criminal Law, § 5.1 at 591 (1986).

Pa nah e4

{2S LOE SLO OSes ss A iene) Lara ny

19

Petitioners made materiality the cornerstone of their

defense, as was initially recognized by the district court.

[App. B. at 16a]. In preparing their defense, they relied heavily

on the fact that every Circuit Court of Appeals recognized

materiality as an element of § 1014 at the time of their indictment

and trial.

In Marks v. United States, 430 U.S. 188, 97 S. Ct. 990

(1977), the Supreme Court faced a similar problem of changing

law. In Marks, the defendants were charged with violating a

federal statute outlawing the transportation of obscene materials.

Id. at 991. At the time the conduct occurred, controlling case

law included a test that material was not pornographic unless it

is “utterly without redeeming social value.” /d. at 992

(citing Memoirs v. Massachusetts, 383 U.S. 413, 86 S. Ct. 975

(1966)). Prior to trial, the Supreme Court altered this test in

Miller v. California, 413 U.S. 15, 93 S. Ct. 2607 (1973), which

adopted a test inquiring into “whether the work, taken as a

whole, lacks serious literary, artistic, political, or scientific

value.” Jd. The defendants were tried on the more stringent

Miller test, and convicted. The Marks court held that trying the

defendants on the more stringent Miller test was

unconstitutional, and reversed for a new trial. Jd. at 995. Prior

to addressing the substantive issue of whether the new Miller

standard could be retroactively applied, the Supreme Court

crystallized that judicial action falls within the Ex Post Facto

Clause limitation. Marks, 430 U.S. at 191-92, 97 S. Ct. 992-93

(explaining that Fifth Amendment protections of due process

prohibit retroactive application of judicial decisions affecting

individual’s right of fair warning of criminal conduct). As Marks

explained, “[a]n unforeseeable judicial enlargement of criminal

statute, applied retroactively, operates precisely like an ex post

facto law, such as Art. I § 10 of the Constitution forbids.”

Id. (quoting Bouie v. City of Columbia, 378 U.S. 347, 353-54,

84 S. Ct. 1697, 1703).

20

In finding that the more stringent Miller test could not

be retroactively applied, the Supreme Court summarized its

reasons with:

We therefore hold . . . that the Due Process Clause

precludes the application to petitioners of the

standards announced in Miller v. California, to

the extent those standards may impose criminal

liability for conduct not punishable under

Memoirs. Specifically, since the petitioners were

indicted for conduct occurring prior to our

decision in Miller, they are entitled to jury

instructions requiring the jury to acquit unless it

finds that the materials involved are “utterly

without redeeming social value.”

Id. at 995.

Marks is indistinguishable. Petitioners were indicted at

a time when 18 U.S.C. § 1014 included materiality.

Materiality should have been submitted for the jury’s

consideration; the failure to do so was clear Gaudin error.

The fact that Wells changed the elements of § 1014 after

Appellants were tried and convicted should remain

fundamentally irrelevant to the analysis, as Marks teaches

that it cannot be retroactively applied. Doing otherwise would

result in a continuing infringement of Petitioners’ due process

rights, and a violation of the Constitution’s prohibition

against ex post facto laws.

21

CONCLUSION

For the foregoing reasons, Petitioners respectfully

request that the Petition for Writ of Certiorari be granted.

Respectfully submitted,

WILLIAM F. WESSEL E. ARMISTEAD EASTERBY*

WESSEL & ASSOCIATES Looper, REED & McGraw

Attorneys for Petitioner A PROFESSIONAL CORPORATION

Robert Dupre Attorneys for Petitioner

127 Camp Street W. Harold Sellers

New Orleans, LA 70130 1300 Post Oak Boulevard

(504) 568-1112 Suite 2000

Houston, TX 77056

(713) 986-7000

* Counsel of Record