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United States v. Laurenzana

May 5, 1997

UNITED STATES OF AMERICA,

PLAINTIFF-APPELLEE,

v.

JAMES LAURENZANA,

DEFENDANT-APPELLANT.



Appeal from the United States District Court for the Central District of Illinois, Springfield Division.

No. 95 CR 30071 Richard Mills, Judge.

Before POSNER, Chief Judge, and CUMMINGS and EVANS, Circuit Judges.

CUMMINGS, Circuit Judge.

ARGUED APRIL 9, 1997

DECIDED MAY 5, 1997

On November 15, 1995, a federal grand jury returned a two-count indictment charging defendant James Laurenzana with mail fraud and conspiracy to commit mail fraud, alleging that from about May 1993 to May 1995, Laurenzana conspired with others in the Central District of Illinois in a scheme to defraud merchants and businesses by passing worthless checks on Laurenzana's closed Springfield, Illinois, checking accounts, thereby obtaining money and goods without payment. On March 21, 1996, a second superseding indictment was filed against Laurenzana, which added a third count charging money laundering. The basis of the money laundering charge was the payment of his co-conspirator's cash bond with proceeds from the fraudulent check scheme. The government alleged that Laurenzana had therefore knowingly conducted a financial transaction affecting interstate commerce with the proceeds of and in order to promote the unlawful activity of mail fraud. On April 24, 1996, following a jury trial, Laurenzana was convicted of mail fraud, conspiracy to commit mail fraud and money laundering. He was sentenced to 60 months' imprisonment on Counts 1 and 2 and 77 months on Count 3, all to be served concurrently.

Defendant makes several challenges regarding the proceedings in the district court. First, he alleges that the payment of his co-conspirator Bryan Gilmore's cash bond had no effect on interstate commerce and was not a "financial transaction" as required by 18 U.S.C. sec. 1956(c), the money laundering statute. Second, defendant asserts that the evidence presented by the government at trial was not sufficient to support the mail fraud conviction. Third, he argues that the prosecutor's alleged misconduct during closing argument deprived him of his due process right to a fair trial. Next, defendant claims that his offense level for money laundering should not have been enhanced for obstruction of justice based on contact with government witness/co-conspirator Gilmore that occurred before defendant was charged with money laundering in the second superseding indictment. Finally, defendant contends that the district court erred in determining the amount of fraud loss for sentencing purposes, because he should not be held accountable for losses resulting from his co-conspirator's use of checks stolen from the defendant.

We affirm.

I.

Defendant had many closed Springfield, Illinois, checking accounts, most of which had been closed for being excessively overdrawn. At trial the government contended that Laurenzana had provided checks on his closed accounts to Bryan Gilmore and that Gilmore, Gilmore's girlfriend Sheryl Hardwick and others passed these bad checks at numerous businesses. Testifying for the government, Gilmore admitted that he had passed bad checks that were given to him by Laurenzana as well as checks Gilmore stole from Laurenzana, using the proceeds of the latter checks for his own benefit, including the purchase of crack cocaine. Gilmore estimated that he was involved in cashing over 400 checks during the scheme. FBI Agent Donald Berecz testified at trial that government investigators had not identified which checks had been given to Gilmore by Laurenzana and which checks Gilmore had stolen from Laurenzana.

In several instances, after receiving letters from businesses that had accepted bad checks drawn on his closed accounts, Laurenzana mailed a copy of a letter to the businesses (or their collection agencies) which stated that his checks had been stolen and that he was not responsible for those checks. The letter was a form letter from the Springfield, Illinois, Police Department and was used to advise people that the police have possession of abandoned, lost, stolen or otherwise illegally possessed property, and it concerned a check passed by an earlier member of the conspiracy to a grocery store; the letter was not related to any of the bad checks in question, despite Laurenzana's attempt to create that impression. He also included a note to the businesses that stated that the checks were stolen and that some people had been caught and prosecuted. In some cases, he also included an affidavit attesting that he did not sign, nor authorize anyone else to sign, the checks and further "that he/she received no benefit or value from the proceeds of said check, and no part thereof was applied to any use or purpose on his/her behalf." In at least two instances, Laurenzana sent through the mail to the Cass County and Bond County State's Attorneys in Illinois an affidavit similar to ones sent to the businesses after more Laurenzana checks were passed by Gilmore at local businesses.

At one point during the period in question, Gilmore was jailed for passing bad checks, and Laurenzana bailed him out, paying $250 as bond, which the Deputy Sheriff mistakenly accepted rather than the correct amount of $2,500. Gilmore was released, but after the mistake was discovered, Gilmore was again arrested and Laurenzana paid the additional $2,250 to bail him out. The money used to post bail on these two occasions was part of the proceeds of the bad check cashing scheme and was deposited by the Clerk's Office in a bank that was a part of the federal banking system.

Gilmore was arrested again in Decatur, Illinois, in May 1995. Laurenzana visited him in the Decatur, Illinois, jail and put money in his jail account. They discussed whether Gilmore was going to testify against Laurenzana. Following that discussion, Gilmore pled guilty to conspiracy to commit mail fraud, and in his plea agreement Gilmore agreed to provide information about Laurenzana's involvement. Laurenzana also visited Gilmore when he was at the Graham Correctional Center following his guilty plea and sent money to his prison account. He advised Gilmore during the visit that someone from the Public Defender's Office would be coming to interview him. Prior to the time these discussions took place, Laurenzana himself had been arrested and was released on a recognizance bond with a condition that he avoid all contact with government witnesses, including Gilmore. Apparently Gilmore assured Laurenzana repeatedly during the Graham visit that he was not going to testify against Laurenzana, and when a defense investigator for Laurenzana came to take Gilmore's statement, Gilmore told him that Laurenzana was an innocent man and that Gilmore had stolen a bunch of checks. Gilmore later testified that his statement to the defense investigator was not the truth.

II.

Laurenzana first argues that his payment of co-conspirator Gilmore's $2,500 cash bond had no effect on interstate commerce and was not a "financial transaction" as required by 18 U.S.C. sec. 1956(c)(4), the money laundering statute. Laurenzana maintains that his payment of Gilmore's bond resulted in three distinct transactions: (i) Laurenzana paid the cash to the Deputy Sheriffs; (ii) the Sheriff's Office turned over the money it collected to the Morgan County Circuit Clerk's Office; and (iii) the Clerk's Office deposited the money in a bank. He ...


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