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United States v. Berrio

February 29, 1996






Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 94 CR 806--George W. Lindberg, Judge.

Before POSNER, Chief Judge, and H. WOOD, JR. and EVANS, Circuit Judges.

EVANS, Circuit Judge.



Rodolfo Berrio, who called himself "Tito," received a telephone number for a pager on November 28, 1994. We don't know exactly how he received the number, but it must have come, directly or indirectly, from someone involved in the drug business in Colombia, South America. Berrio received the number because he previously agreed to assist individuals in transferring money to Colombia from Chicago.

Shortly after receiving the number, Berrio called the pager and eventually reached Louis Dominguez. Berrio said he had money to deliver to Dominguez, and they agreed to meet. They got together on December 1, and Berrio gave Dominguez $719,664. The cash was in singles, fins, sawbucks, and twenties. We asked the lawyers at oral argument to tell us what a stack this size looks like, but they didn't know.

Berrio and Dominguez met three more times, on December 9, 12, and 15. On the 9th Berrio turned over $408,000, on the 12th Dominguez received $531,000, and on the 15th the transfer totaled $355,000. But then the jig was up. Dominguez was a DEA agent working undercover in an investigation known as Operation Dinero. He arrested Berrio for money laundering, an apt charge considering that the cash was usually transferred in detergent boxes that had been emptied, filled with bills, and resealed.

The four Berrio/Dominguez meetings usually went down the same way. The two would meet at a prearranged location. The money would be packaged in laundry detergent boxes (one time it was wrapped like a Christmas gift) and left in the trunk of Berrio's car. Agent Dominguez would then take Berrio's car, ostensibly to deliver the money to someone else, and the two would meet later and switch cars. When Berrio was arrested on December 15 (the delivery to Agent Dominguez was earlier that day) his car was searched, and an additional $131,000 in cash was discovered inside emptied boxes of laundry detergent in the trunk.

Money laundering in violation of 18 U.S.C. sec. 1956(a)(1)(B)(i) is committed by a person who

(a)(1) . . . knowing that the property involved in a financial transaction represents the proceeds of some form of unlawful activity, conducts or attempts to conduct such a financial transaction which in fact involves the proceeds of specified unlawful activity . . . (B) knowing that the transaction is designed in whole or in part . . . (i) to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity.

Berrio pled guilty to the money laundering charge, reserving the right to challenge at sentencing the prosecution's contention that he knew or believed the funds he gave Agent Dominguez were drug proceeds. It is important here to note what Berrio did not contest. He did not challenge the government's assertion that the funds were in fact derived from the cocaine trade. The terms of his plea agreement expressly admitted that the government's evidence would prove that fact. The agreement, however, reserved the right to challenge the allegation that Berrio "knew or believed" the money was drugrelated. Berrio also reserved the right to challenge the inclusion of the $131,000 found in his trunk in the total amount he was responsible for laundering.

At sentencing, the district court included the $131,000, calculating the total amount of money laundered by Berrio at just over $2 million. This calculation resulted in a sixpoint increase in his base offense level. The court rejected Berrio's claim that he was unaware that the cash given to Dominguez was drug proceeds, and found that Berrio believed, correctly, that the money came from drugs. Accordingly, a three-level enhancement was applied to his offense level under sentencing guideline 2S1.1(b)(1). After all enhancements and reductions were taken into account, the guideline calculation for Berrio produced a sentencing range of 51 to 63 months. He received the lowest sentence in that range.

Berrio raises three issues on appeal. First, he argues that the district court erred in its interpretation of guideline 2S1.1(b)(1). The court found that the enhancement would apply if Berrio knew or believed the laundered money to be drug proceeds. Berrio argues that belief is a much broader requirement than knowledge, and that the enhancement should apply only if he in fact knew that the money came from illegal drug activity. Berrio also claims that the district court's determination that he knew or believed the money to be drug proceeds was not supported by the evidence. Last, he argues that the district court erred in finding that the additional $131,000 was part of the money laundering scheme.

United States Sentencing Guideline 2S1.1(b)(1) instructs the sentencing judge to increase a defendant's base offense level by three "[i]f the defendant knew or believed that the funds were the proceeds of an unlawful activity involving manufacture, importation, or distribution of narcotics or other controlled substances." The district court found that Berrio believed the laundered money came from drug-related activity and so the three-level escalator to Berrio's base offense level was ordered. Applying the plain language of the guideline, the district court did not address the issue raised by Berrio regarding the mental state required to trigger the enhancement. In doing so, the district court implicitly held that belief alone satisfies the guideline's mental state requirement. Berrio argues ...

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