Intrinsic SBA Loan Evidence and Circumstantial Knowledge in Money Laundering Prosecutions: A Commentary on United States v. Sims

Intrinsic SBA Loan Evidence and Circumstantial Knowledge in Money Laundering Prosecutions: A Commentary on United States v. Sherlyn Sims

I. Introduction

The Eleventh Circuit’s unpublished per curiam decision in United States v. Sherlyn Sims, No. 24‑13740 (11th Cir. Dec. 18, 2025), arises out of a modern money laundering scheme involving romance scams and business email compromise frauds. The case offers a detailed application of several recurring doctrinal themes in federal criminal practice:

  • How circumstantial evidence can establish knowledge in money laundering prosecutions under 18 U.S.C. §§ 1956(h) and 1957;
  • When a defendant’s Small Business Administration (“SBA”) loan application is “intrinsic evidence,” admissible without resort to Federal Rule of Evidence 404(b);
  • The proper (and harmless) use of “deliberate ignorance” jury instructions; and
  • The limits on defense closing argument regarding the government’s failure to call an “equally available” co‑conspirator as a witness.

The defendant, Sherlyn Sims (also known as Sherlyn Dzinzi), was convicted in the Northern District of Georgia of conspiracy to commit money laundering under 18 U.S.C. § 1956(h) and substantive money laundering under 18 U.S.C. § 1957. The government proved that she laundered more than $1.2 million of fraud proceeds through bank accounts opened in the name of her purported clothing business, Grace Trading, LLC—a sham entity used to receive and move criminal funds. She was sentenced to 46 months’ imprisonment and three years of supervised release.

On appeal, Sims challenged:

  1. The sufficiency of the evidence supporting her convictions;
  2. The admission of her SBA loan application;
  3. The district court’s use of a deliberate ignorance instruction; and
  4. Restrictions on her ability to highlight, in closing argument, the government’s decision not to call her co‑conspirator, Presley Ihimekpen (“Presley”), who was also the father of her child.

The Eleventh Circuit affirmed on all grounds. While the opinion is unpublished and therefore non‑precedential in the Eleventh Circuit, it is a significant illustration of how courts:

  • Infer “knowledge” in financial crimes from banking patterns, business behavior, and misrepresentations;
  • Classify related fraud (here, an SBA loan misrepresentation) as intrinsic to the charged offense; and
  • Polices the boundaries of closing argument and the missing‑witness inference.

II. Summary of the Opinion

The Eleventh Circuit resolved the four issues as follows:

  1. Sufficiency of the Evidence: The evidence was sufficient for a reasonable jury to find, beyond a reasonable doubt, that Sims knew—or at least deliberately ignored—that the funds moving through Grace Trading’s accounts were criminal proceeds. Circumstantial evidence, including her conduct with bank accounts, impersonation of a fraud victim, financial patterns, and false SBA loan representations, supported the verdict.
  2. Admission of SBA Loan Application: The district court did not abuse its discretion in admitting Sims’s SBA loan application. The application, in which she misrepresented Grace Trading’s income and operations, was properly treated as intrinsic evidence “inextricably intertwined” with the money‑laundering conspiracy, and its probative value was not substantially outweighed by unfair prejudice under Rule 403.
  3. Deliberate Ignorance Instruction: There was sufficient evidence to justify a deliberate ignorance instruction: Sims faced obvious red flags but took steps consistent with avoiding confirmation that funds were illegal. Even if the instruction were erroneous, the error would be harmless because the jury was also properly instructed on actual knowledge, and the evidence was more than sufficient to support a conviction on an actual‑knowledge theory alone.
  4. Restrictions on Closing Argument (Missing‑Witness Issue): The court acted within its discretion in prohibiting Sims from arguing in closing that the government’s failure to call Presley supported an inference in her favor, because Presley was equally available to both sides. The restriction was modest; Sims still presented her core defense that Presley manipulated her and that she lacked criminal knowledge.

Additionally, the panel applied clear Eleventh Circuit law on appellate procedure: because Sims did not attack the district court’s intrinsic‑evidence ruling on the SBA loan in her opening brief, that ground was abandoned under Sapuppo v. Allstate Floridian Insurance Co., and the court therefore affirmed without needing to address the alternative Rule 404(b) basis.

III. Factual and Procedural Background

A. The Money Laundering Scheme

The government’s evidence showed that Sims, through Grace Trading, LLC, laundered over $1.2 million of proceeds from:

  • Romance scams – fraudulent schemes in which victims are deceived into sending money based on fictitious romantic relationships; and
  • Business email compromise (“BEC”) schemes – frauds in which criminals compromise or spoof business email accounts to redirect legitimate payments to accounts they control.

Grace Trading was nominally a women’s and children’s clothing business, but the company’s bank activity was inconsistent with such a business:

  • Large amounts of money began flowing into its accounts just days after the accounts were opened.
  • The deposits and withdrawal patterns did not match normal retail or wholesale activity.
  • Sims used the accounts in part for personal expenses and did not report the funds as business income for tax purposes.

Law enforcement identified Sims when they searched the cellphone of her co‑conspirator, Presley, who had a romantic and parental relationship with her. The phone contained extensive communications showing:

  • Sims conducted numerous financial transactions at Presley’s direction;
  • They discussed profit “percentages” for themselves, significantly greater than typical commissions paid to legitimate money transmitters or “paymasters”; and
  • Sims was aware that Grace Trading accounts were being used to receive and move money originating from unlawful activity.

In one particularly incriminating incident, Sims impersonated a fraud victim in a phone call to a bank, in order to obtain information about where the victim’s stolen funds had gone.

B. District Court Proceedings

Following indictment, Sims proceeded to jury trial on:

  • Conspiracy to commit money laundering, 18 U.S.C. § 1956(h); and
  • Substantive monetary transactions in criminally derived property over $10,000, 18 U.S.C. § 1957.

Key trial evidence included:

  • Bank records showing more than $1.2 million passing through Grace Trading’s accounts in roughly a year;
  • Sims’s pattern of making multiple cash withdrawals just under $10,000 at different locations, consistent with an attempt to avoid bank reporting requirements;
  • Text messages between Sims and Presley concerning transfers and their profit shares;
  • Evidence that bank accounts for Grace Trading at Bank of America (BOA) and Chase were closed; Sims did not protest when BOA retained over $86,000 held in a closed account;
  • Sims’s SBA loan application for Grace Trading, in which she substantially overstated income and misrepresented the nature and operations of the business; and
  • False statements to investigators, including denial that she was working with Presley on the transactions.

The jury convicted Sims on all counts. She moved for judgment of acquittal, which the district court denied. On appeal, she attacked that denial and several trial rulings.

IV. Detailed Analysis of the Opinion

I. Sufficiency of the Evidence and the Knowledge Element in Money Laundering

A. Standards and Precedents Applied

The court reviewed the sufficiency of the evidence de novo but under a highly deferential standard to the jury:

  • United States v. Davis, 854 F.3d 1276, 1292 (11th Cir. 2017): on sufficiency review, the court views the evidence and reasonable inferences in the light most favorable to the government.
  • United States v. Rodriguez, 218 F.3d 1243, 1244 (11th Cir. 2000): the question is whether any reasonable jury could find guilt beyond a reasonable doubt.
  • United States v. Godwin, 765 F.3d 1306, 1320 (11th Cir. 2014): the evidence need not exclude every reasonable hypothesis of innocence; the jury may choose among reasonable constructions of the evidence.
  • United States v. Farley, 607 F.3d 1294, 1333 (11th Cir. 2010); United States v. Almanzar, 634 F.3d 1214, 1221 (11th Cir. 2011): a judgment of acquittal is appropriate only if no reasonable jury could find guilt.
  • United States v. Martin, 803 F.3d 581, 587 (11th Cir. 2015): the same test applies whether the evidence is direct or circumstantial.
  • United States v. Mapson, 96 F.4th 1323, 1336 (11th Cir. 2024): circumstantial evidence can establish both a defendant’s participation in a conspiracy and guilt on substantive charges.
  • United States v. Friske, 640 F.3d 1288, 1291 (11th Cir. 2011): circumstantial evidence must support reasonable inferences, not speculation.

For the substantive and conspiracy elements:

  • 18 U.S.C. § 1956(h) – Money Laundering Conspiracy
    Under United States v. Broughton, 689 F.3d 1260, 1280 (11th Cir. 2012), the government must prove:
    1. An agreement between two or more persons to commit a money laundering offense; and
    2. Knowing and voluntary participation in that agreement by the defendant.
    The panel also relied on United States v. Spila, 136 F.4th 1296, 1304 (11th Cir. 2025), for the important clarification that:
    Knowledge under § 1956 only requires a defendant to know that the money originated from an illegal source, not the specific nature of that source.
  • 18 U.S.C. § 1957 – Substantive Money Laundering
    Citing United States v. Iriele, 977 F.3d 1155, 1173 (11th Cir. 2020), the government had to show:
    1. A monetary transaction in criminally derived property of a value greater than $10,000;
    2. Through a financial institution; and
    3. That the defendant knew the property was derived from some form of unlawful activity.

B. Application to Sims: Knowledge and Intent

The central sufficiency question on appeal was whether Sims knew, or deliberately ignored, that the funds passing through Grace Trading’s accounts were criminally derived. The panel emphasized several strands of evidence:

  1. Structure and Activity of Grace Trading
    The business accounts:
    • Received large deposits almost immediately after being opened;
    • Displayed activity “atypical of a small clothing business”; and
    • Were used both for transfers to third parties and for Sims’s personal expenses.
    The court inferred that Sims created Grace Trading and its accounts for the specific purpose of laundering funds, not to run a legitimate clothing venture.
  2. Impersonation of a Fraud Victim
    Sims made a phone call to a bank in which she impersonated a fraud victim to discover the location of that victim’s money. While she argued she was innocently doing a favor for Presley without understanding the call’s purpose, the panel held it was reasonable for the jury to view this as:
    • Direct participation in the conspiracy; and
    • Evidence that she was aware the funds in question were related to fraud.
  3. Response to Bank Closures and Retained Funds
    Two Grace Trading accounts—at Bank of America and Chase—were closed by the banks. Importantly:
    • Bank of America kept $86,132.43 that was in the account upon closure.
    • Sims did not press the bank to return those funds or “escalate the matter.”
    The panel reasoned that a truly innocent business operator, owed over $86,000 in deposits, would aggressively seek return of the funds. Her failure to do so supported an inference that she knew the money was illegal and did not want to attract further scrutiny.
  4. Profit Percentages and Personal Benefit
    Text messages between Sims and Presley showed they discussed percentage cuts for themselves, “far larger than what a legitimate paymaster typically earns.” A government agent testified that the messages were consistent with those exchanged among other co‑conspirators engaged in money laundering.

    Combined with evidence that Sims used the Grace Trading accounts for personal expenses, the panel found it reasonable to conclude she was not acting as a neutral, unwitting intermediary but a knowing beneficiary of the scheme.

  5. SBA Loan Application and Tax Non‑Compliance
    Sims:
    • Did not pay taxes on funds flowing through Grace Trading’s accounts; and
    • Submitted an SBA loan application falsely overstating Grace Trading’s income and portraying it as a legitimate operating business.
    These misrepresentations reinforced that she knew Grace Trading was a sham and that the financial flows were not genuine business revenue.

The court explicitly rejected Sims’s “innocent explanations” for these facts as neither compelled nor exclusive. Under Godwin, the jury did not have to accept them and could reasonably choose a guilty inference where the evidence supported it.

Finally, Sims argued there was no evidence she provided false information to the banks that held Grace Trading’s accounts. The panel curtly dismissed this point: misrepresentations to banks are not elements of either § 1956(h) or § 1957. The government was required to prove knowledge that the funds were illegally obtained, not deception of the banks as such.

C. Significance

The court’s application of the sufficiency standard illustrates several important principles for future money laundering cases:

  • Circumstantial evidence of knowledge is often decisive. Patterns of account activity, business implausibility, and post‑closure behavior can be as probative as direct admissions.
  • Knowledge under § 1956 is broad. As Spila confirms, the government need not prove that the defendant knew the specific underlying crime (e.g., romance scam vs. BEC scam); knowledge that the funds stemmed from some unlawful activity suffices.
  • Failure to protect one’s own “rightful” funds can be probative. Not contesting the loss of $86,000 in deposits supported the inference that Sims, unlike an innocent merchant, understood those funds were tainted.

II. Admission of the SBA Loan Application: Intrinsic Evidence and Rule 403

A. The Intrinsic vs. Rule 404(b) Framework

Sims challenged the admission of her SBA loan application as irrelevant and unduly prejudicial. The district court had ruled that the loan application was:

  1. Intrinsic evidence “inextricably intertwined” with the money‑laundering offenses; and, in the alternative,
  2. Admissible under Rule 404(b) as other‑acts evidence demonstrating knowledge and intent.

The Eleventh Circuit’s analysis turns heavily on:

  • Federal Rule of Evidence 404(b): bars “other crimes, wrongs, or acts” when offered solely to prove propensity, but allows them for other purposes (knowledge, intent, etc.).
  • Federal Rule of Evidence 403: allows exclusion of relevant evidence if its probative value is substantially outweighed by dangers of unfair prejudice, confusion, or waste of time.

The court drew from several precedents:

  • United States v. Edouard, 485 F.3d 1324, 1344 (11th Cir. 2007): sets out the three‑part test for 404(b) admissibility—relevance to a non‑character issue, sufficient proof of commission, and probative value not substantially outweighed by Rule 403 concerns.
  • United States v. Horner, 853 F.3d 1201, 1213 (11th Cir. 2017): defines intrinsic evidence as prior acts “linked in time and circumstances with the crime charged” or forming an “integral and natural part” of the story of the crime.
  • United States v. Lopez, 649 F.3d 1222, 1247 (11th Cir. 2011): Rule 403 is an “extraordinary remedy” to be used sparingly; the balance is to be struck in favor of admissibility.
  • United States v. Smith, 459 F.3d 1276, 1295 (11th Cir. 2006): appellate courts assess disputed evidence in a light most favorable to admission, maximizing probative value and minimizing prejudicial impact.
  • United States v. Calderon, 127 F.3d 1314, 1332 (11th Cir. 1997): factors for Rule 403 analysis include prosecutorial need, similarity between extrinsic act and charged offense, and temporal proximity.
  • United States v. US Infrastructure, Inc., 576 F.3d 1195, 1211 (11th Cir. 2009): when acts are “inextricably intertwined,” even criminal acts, they are usually not excluded as unduly prejudicial; the test is whether they were “dragged in by the heels solely for prejudicial impact.”
  • United States v. Macrina, 109 F.4th 1341, 1350 (11th Cir. 2024); United States v. Hill, 643 F.3d 807, 829 (11th Cir. 2011): limiting instructions can mitigate potential prejudice; juries are presumed to follow them.

B. Abandonment and Scope of Review

Critically, in her opening brief Sims argued the SBA evidence was inadmissible under Rules 404(b) and 403, but she did not challenge the district court’s explicit finding that the evidence was intrinsic. She argued that intrinsic point only in her reply brief.

Under:

  • Lapaix v. U.S. Attorney General, 605 F.3d 1138, 1145 (11th Cir. 2010): arguments not raised in an opening brief are abandoned.
  • Sapuppo v. Allstate Floridian Insurance Co., 739 F.3d 678, 680, 683 (11th Cir. 2014): where a district court’s ruling rests on multiple independent grounds, failure to challenge one ground requires affirmance; arguments first raised in a reply brief are ignored.

The panel held that because Sims abandoned any challenge to the intrinsic‑evidence ruling, the district court’s admission of the SBA loan application had to be affirmed on that ground alone. Accordingly, the Eleventh Circuit explicitly declined to address the district court’s alternative 404(b) analysis.

C. Intrinsic Evidence and Rule 403 Balancing

Even focusing solely on Rule 403 (which still applies to intrinsic evidence), the panel concluded there was no abuse of discretion:

  • The SBA loan application was contemporaneous with Sims’s involvement in the laundering conspiracy.
  • Both the loan and the laundering involved misrepresentations about Grace Trading’s nature and operations.
  • The application was therefore “inextricably intertwined with the money laundering offenses” and “highly probative” of:
    • Sims’s knowledge that Grace Trading was not a real business; and
    • Her intent to use Grace Trading to facilitate criminal financial flows.
  • There was no indication the SBA evidence was “dragged in by the heels solely for prejudicial impact” (US Infrastructure).
  • The district court gave a limiting instruction after the evidence was introduced, further mitigating any risk of unfair prejudice (Macrina, Hill).

Viewing the evidence in the light most favorable to admission (Smith), the court held that Sims’s misrepresentations to the SBA were powerful proof that she knew Grace Trading was a sham entity organized to facilitate money laundering.

D. Significance

The opinion reinforces a permissive approach to admitting related fraud evidence in money laundering trials:

  • Misrepresentations to other institutions (e.g., SBA) about the same shell entity can be intrinsic evidence of knowledge and intent in a laundering prosecution. Prosecutors may cite this opinion to argue that ancillary financial‑fraud documents (loan applications, benefit forms, tax returns) are part of the “complete story” of the crime.
  • Defense counsel must directly attack any intrinsic‑evidence ruling in the opening brief. Failure to challenge the intrinsic characterization can be dispositive on appeal, as Sapuppo and this case demonstrate.
  • The Eleventh Circuit continues to apply a pro‑admissibility bias under Rule 403, especially where limiting instructions are given and evidence is temporally and factually linked to the charged conduct.

III. Deliberate Ignorance Jury Instruction

A. Legal Standard and Precedents

A deliberate ignorance (or “willful blindness”) instruction allows the jury to treat a defendant as “knowing” a fact if she consciously avoided confirming a highly probable truth. The Eleventh Circuit relies on several key cases:

  • United States v. Hristov, 466 F.3d 949, 952 (11th Cir. 2006): deliberate ignorance is an alternative to actual knowledge when a defendant suspects but does not inquire in order to remain ignorant.
  • United States v. Maitre, 898 F.3d 1151, 1157 (11th Cir. 2018): the instruction is appropriate where evidence suggests the defendant was aware of a high probability of a fact and purposely contrived to avoid learning the full truth.
  • United States v. Steed, 548 F.3d 961, 977 (11th Cir. 2008): it is error to give the instruction when evidence supports only actual knowledge, not deliberate avoidance.
  • United States v. Stone, 9 F.3d 934, 937–40 (11th Cir. 1993): even if improperly given, a deliberate ignorance instruction is harmless if:
    • The jury is also properly instructed on actual knowledge and the need to find guilt beyond a reasonable doubt; and
    • The evidence supports a conviction on actual knowledge alone.
  • United States v. Gibson, 708 F.3d 1256, 1275 (11th Cir. 2013); United States v. Isnadin, 742 F.3d 1278, 1296 (11th Cir. 2014): an instruction justifies reversal only when it leaves the court with a “substantial and ineradicable doubt” as to whether the jury was properly guided.

B. Evidence Supporting Deliberate Ignorance

The panel concluded that the instruction was justified because multiple facts suggested Sims was confronted with overwhelming red flags but chose not to inquire:

  • Impersonation of a fraud victim: calling the bank and pretending to be a victim to check on the victim’s funds is, at best, an extraordinary “favor.” Given her broader role, the jury could infer that she knew—or at least strongly suspected—fraud was afoot.
  • Bank account behavior:
    • Opening a third Grace Trading account after two previous accounts were closed;
    • Making multiple withdrawals under $10,000 at different locations, despite knowing (from an anti‑money‑laundering specialist’s testimony) that banks file reports on withdrawals over $10,000; and
    • Allowing BOA to keep $86,132.43 without protest when the account was closed.
    These patterns are inconsistent with ordinary, ignorant business use and consistent with a desire to avoid scrutiny.
  • Receipt of suspicious payments:
    • Sims received a $15,000 deposit into her personal account from co‑conspirator Bright Eigbedion labeled “materials payment.”
    • This amount matched the cost figure she claimed for Grace Trading on her SBA loan.
    • The match supported the inference that the costs were fabricated to legitimize criminal proceeds.
  • False statements to investigators: Sims denied working with Presley when interviewed by authorities, contradicting voluminous communications showing the opposite—behavior consistent with consciousness of wrongdoing.

From these facts, the panel held that a reasonable jury could find Sims either:

  • Actually knew she was laundering illegal funds; or
  • At minimum, deliberately avoided confirming what was overwhelmingly likely true, to preserve deniability.

C. Harmless-Error Backstop

Even assuming arguendo that giving the deliberate ignorance instruction were error, the panel held any such error was harmless under Stone because:

  1. The jury was correctly instructed that:
    • Knowledge is a required element; and
    • It could find knowledge either through proof that Sims actually knew the funds were proceeds of unlawful activity, or that she had “every reason to know but deliberately closed her eyes to that.”
    The jury was told it must find the chosen theory beyond a reasonable doubt.
  2. The trial evidence independently supported actual knowledge:
    • Grace Trading’s operations were incompatible with a legitimate clothing business.
    • Sims impersonated a fraud victim.
    • She conducted structured withdrawals and managed substantial cross‑country and international transfers.
    • She lied on the SBA application and to investigators.
    • Messages with Presley used language suggestive of a laundering arrangement with substantial profit percentages.

Because the jury was properly instructed and there was ample evidence of actual knowledge, the court assumed (consistent with Stone) that the jury would not have relied on deliberate ignorance unless convinced beyond a reasonable doubt that theory applied. On either theory, the conviction stands.

D. Significance

The opinion underscores that:

  • Deliberate ignorance remains a powerful tool for prosecutors in financial crime cases, especially where the defendant’s conduct reflects structured transactions and obvious red flags.
  • Appellate courts are reluctant to reverse based on a deliberate ignorance instruction when:
    • The instruction is correctly formulated; and
    • The evidence comfortably supports actual knowledge.
  • Defendants who both benefit financially and engage in evasive or deceptive behavior (false statements, structuring, sham corporate conduct) face a high hurdle to arguing that such an instruction confused the jury.

IV. Limits on Closing Argument and the Missing-Witness Inference

A. Discretion over Closing Arguments

The Eleventh Circuit grants trial courts “great latitude” to manage closing arguments:

  • United States v. Simmons, 122 F.4th 1256, 1262–63 (11th Cir. 2024): courts may restrict closing argument to prevent undue departure from the issues or threats to fair and orderly proceedings.
  • United States v. Harris, 916 F.3d 948, 954, 959 (11th Cir. 2019): a defendant’s right to present a complete defense is not violated if he can present the essence of his argument, even if the court imposes modest restrictions on the form or phrasing of closing argument.

B. The “Equally Available” Missing-Witness Rule

The panel applied long‑standing Fifth (and thus binding Eleventh) Circuit law:

  • United States v. Chapman, 435 F.2d 1245, 1247 (5th Cir. 1970): no adverse inference may be drawn from a party’s failure to call a witness who is “equally available” to both sides.
  • Luttrell v. United States, 320 F.2d 462, 465 (5th Cir. 1963): this principle applies in criminal cases; the defense cannot ask the jury to infer weakness in the government’s case from its failure to call an equally available witness.
  • Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc): pre‑October 1, 1981 Fifth Circuit decisions are binding in the Eleventh Circuit.

Here, Sims wanted to highlight the government’s failure to call Presley (her co‑conspirator) as a witness and to argue that his absence supported an inference that her version of events (that he manipulated her and she lacked knowledge) was correct.

But Sims conceded that Presley was available to both parties. Under Chapman and Luttrell, the district court correctly prohibited argument inviting the jury to draw an adverse inference against the government based on his absence.

C. Scope of the Restriction and Prejudice

The district court went somewhat further, also barring Sims from:

  • Arguing that Presley did not testify; and
  • Noting that there was no record of what he would have said had he testified.

While the latter remarks might not have been explicit invites to draw an adverse inference, the court had discretion under Simmons to prevent arguments “straying unduly from the mark.” The key question became whether Sims was prejudiced—whether she was prevented from presenting her core defense.

The opinion makes clear that she was not:

  • She did argue that:
    • Presley manipulated and misled her;
    • She lacked knowledge that the funds were criminally derived; and
    • There were “holes in the evidence” and the government had not met its burden.
  • Presley’s guilty plea and plea agreement were admitted into evidence, so the jury knew he existed and had not testified.
  • The restriction was, in the Eleventh Circuit’s terms, a “modest” limitation that left her constitutional right to present a defense intact (Harris).

D. Significance

The ruling underscores two recurring practical points:

  • Defense counsel must be cautious when referencing non‑testifying individuals in closing. If the witness was equally available to the defense, courts in the Eleventh Circuit may shut down any attempt to imply that the government’s choice not to call the witness reflects weakness in its case.
  • Strategic trade‑off: A defendant who affirmatively chooses not to subpoena a co‑conspirator (for reasons such as exposure to impeachment or cross‑examination) is generally barred from converting the co‑conspirator’s absence into an argumentative advantage.

V. Appellate Procedure and Preservation: The Role of Abandonment

Separate from the substantive issues, the opinion strongly illustrates Eleventh Circuit doctrine on issue preservation and abandonment on appeal:

  • Lapaix and Sapuppo are applied rigorously:
    • Arguments not raised in the opening brief are considered abandoned.
    • Arguments raised for the first time in a reply brief are disregarded.
    • When a district court’s ruling rests on multiple independent grounds, failure to challenge one of those grounds requires affirmance even if the challenged ground might have been vulnerable.
  • In Sims’s case, her failure to challenge the intrinsic character of the SBA evidence in the opening brief effectively ended the 404(b) debate. The Eleventh Circuit simply refused to reach it.

For appellate practitioners, the message is straightforward: every independent basis for a trial court’s ruling must be explicitly challenged in the opening brief, or it will be deemed conceded.

VI. Complex Concepts Simplified

The opinion touches on several doctrinal concepts that can be opaque. The following is a simplified explanation of the key ones.

1. Sufficiency of the Evidence

On appeal, a defendant can argue that no reasonable jury could have found her guilty. The appellate court does not re‑weigh the evidence or decide whom to believe. Instead, it:

  • Assumes the jury believed the prosecution witnesses and disbelieved conflicting defense evidence;
  • Views all evidence in the light most favorable to the government; and
  • Asks only: could any reasonable jury, on this record, find guilt beyond a reasonable doubt?

The evidence can be entirely circumstantial; there is no requirement for direct eyewitness testimony or explicit confessions.

2. Intrinsic Evidence vs. Rule 404(b) Evidence

  • Intrinsic evidence: Acts that are part of the “same story” as the charged crime—happening around the same time, involving the same players, and helping explain how the crime worked. Such evidence is not treated as “other acts” under Rule 404(b).
  • Rule 404(b) evidence: Other wrongs or acts separate from the charged crime. These cannot be used simply to show bad character or propensity (“she did bad things before, so she did this too”), but can be used to show things like motive, knowledge, or intent, subject to safeguards.

In Sims, the SBA loan application was treated as intrinsic because it helped explain how and why Grace Trading existed and how Sims represented it during the same period in which she laundered funds through it.

3. Rule 403 Balancing

Even relevant evidence can be excluded if its probative value (its usefulness in proving something important) is substantially outweighed by dangers like:

  • Unfair prejudice (inviting the jury to decide based on emotion rather than reason);
  • Confusing the issues or misleading the jury; or
  • Wasting time or needless repetition.

The Eleventh Circuit emphasizes that Rule 403 is a narrow exception: courts should favor admission unless the unfairness is very strong and clearly outweighs the relevance.

4. Deliberate Ignorance (Willful Blindness)

This doctrine addresses defendants who:

  • Strongly suspect a fact (for example, that money is dirty); but
  • Intentionally avoid confirming it (by refusing to ask obvious questions or ignoring glaring warning signs);
  • So that they can later say: “I didn’t actually know.”

The law treats such deliberate avoidance as equivalent to knowledge. A jury can find “knowledge” if:

  1. The defendant was aware of a high probability that the fact was true; and
  2. Deliberately avoided confirming it.

5. Missing-Witness Inference and “Equally Available” Witnesses

Sometimes lawyers ask juries to infer that if a party didn’t call a certain witness, it must be because that witness would not have helped that party. But this “missing‑witness” argument is generally barred when:

  • The witness was “equally available” to both sides (meaning the defense could have subpoenaed the witness just as easily as the prosecution could have); or
  • There is no special reason to think the witness naturally “belongs” to one side and not the other.

Because Sims could have called Presley herself, the court prevented her from arguing that the government’s failure to call him should be held against the prosecution.

VII. Broader Impact and Future Implications

A. Money Laundering Prosecutions in the Digital and Fraud Era

The factual pattern—use of a sham clothing company to launder romance‑scam and BEC proceeds—is emblematic of modern financial crime. Sims illustrates that:

  • Courts are comfortable inferring knowledge and intent from:
    • Abnormal banking behavior (rapid, large deposits immediately after account opening, frequent large transfers, structured cash withdrawals);
    • Failure to engage in ordinary business practices (tax filings, inventory, supplier payments); and
    • Misrepresentations to financial institutions and the government.
  • Defendants who front sham LLCs or bank accounts for romantic partners or acquaintances cannot easily escape liability by claiming ignorance when:
    • They are deeply involved in transactions; and
    • They personally benefit at levels inconsistent with innocent intermediaries.

B. Use of Loan and Benefit Fraud Evidence as Intrinsic

By treating Sims’s SBA loan application as intrinsic, the opinion suggests increased prosecutorial leeway to introduce:

  • Loan applications;
  • Grant or relief applications (e.g., PPP loans);
  • Tax returns; and
  • Other regulatory filings

as part of money laundering prosecutions, especially when these documents concern the very entity used in the laundering.

Defense counsel can expect the government to argue that such documents:

  • Show the entity was a sham;
  • Reinforce that the defendant knew legitimate business activities did not support the financial flows; and
  • Explain the defendant’s broader pattern of misrepresenting the entity’s operations to third parties.

C. Deliberate Ignorance Instructions as Standard in Laundering Cases

In many money laundering cases, defendants are not hands‑on fraudsters but “financial facilitators” who handle bank accounts and transfers. The court’s acceptance of the deliberate ignorance instruction here, along with its harmless error fallback, will likely:

  • Encourage district courts to give the instruction whenever the evidence includes obvious red flags and evasive behavior; and
  • Make it difficult for defendants to win reversals on this ground where the record supports actual knowledge regardless.

D. Limits on Strategic Use of Non-Called Co-Conspirators

The closing‑argument ruling serves as a caution:

  • If the defense chooses not to call a co‑conspirator who is available, it cannot simultaneously complain that the government’s failure to call that witness should count against the prosecution.
  • Courts in the Eleventh Circuit will strictly enforce the “equally available” rule from Chapman and Luttrell, especially where the missing witness is a known co‑conspirator with a plea agreement in evidence.

VIII. Conclusion

Though unpublished, United States v. Sims offers a rich, contemporary illustration of multiple important principles in federal criminal law:

  • Circumstantial proof of knowledge in money laundering: The case confirms that juries may infer knowledge from how a purported business operates (or fails to operate), how bank accounts are used, and how the defendant responds to bank scrutiny.
  • Intrinsic treatment of related fraud evidence: Misrepresentations in SBA loan applications tied to the same shell entity can be intrinsic evidence of knowledge and intent in a laundering scheme, subject only to Rule 403.
  • Deliberate ignorance and harmless error: When the evidence overwhelmingly supports actual knowledge, the inclusion of a willful blindness instruction—even if debatable—is unlikely to yield reversal.
  • Constraints on missing-witness arguments: Defendants cannot exploit the absence of an equally available co‑conspirator witness to imply prosecutorial weakness; modest limits on such arguments do not violate the right to present a defense.
  • Appellate discipline: The case underscores the importance of challenging all independent bases for trial rulings in the opening brief; failure to do so can be outcome‑determinative.

In the broader legal context, Sims demonstrates how courts adapt established evidentiary and mens rea doctrines to the realities of modern fraud and money laundering: shell entities, digital communications, and structured financial transactions. It affirms that those who knowingly, or deliberately blindly, rent their names and accounts to such schemes can expect convictions supported by circumstantial evidence and reinforced by their own misrepresentations to banks and government agencies.

Case Details

Year: 2025
Court: Court of Appeals for the Eleventh Circuit

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