Post-Sentence Exposure Preserves the Fifth Amendment Privilege, and Evidence of Both Knowledge and Willful Blindness Supports a Deliberate-Ignorance Instruction

Introduction

This appeal arose from a fraudulent Paycheck Protection Program scheme conducted during the COVID-19 pandemic. A jury convicted Teldrin Foster on 41 counts, including wire fraud, bank fraud, loan fraud, and concealment money laundering. Carla Jackson was convicted of concealment money laundering under 18 U.S.C. § 1956(a)(1)(B)(i).

Foster challenged the district court’s decision permitting Ricky Dixon, a convicted participant in the same scheme, to invoke the Fifth Amendment. Jackson challenged the sufficiency of the evidence, the admission of financial evidence involving Roadrunner Automotive, and the deliberate-ignorance jury instruction.

Summary of the Opinion

The Eleventh Circuit affirmed both defendants’ convictions. It concluded that:

1. Dixon had reasonable cause to invoke the Fifth Amendment because his answers could expose him to perjury liability and because his pending motion under 28 U.S.C. § 2255 could place him in renewed jeopardy if his conviction were vacated.
2. The evidence was sufficient to establish that Jackson knew the funds involved were criminal proceeds and knew that the transactions were designed, at least in part, to conceal their source, ownership, or control.
3. Transfers involving Roadrunner Automotive were relevant because they helped establish Jackson’s awareness of the fraudulent scheme and the unlawful source of the money.
4. The deliberate-ignorance instruction was supported by evidence from which the jury could find either actual knowledge or deliberate avoidance.

Analysis

1. Fifth Amendment Privilege After Conviction and Sentencing

Foster argued that Dixon could not validly invoke the Fifth Amendment because Dixon had already pleaded guilty and been sentenced for his participation in the PPP scheme. The court rejected that categorical position.

Applying abuse-of-discretion review, the court held that a witness need only have “reasonable cause” to fear self-incrimination, which is not a demanding standard. Invocation must generally be upheld unless it is perfectly clear that the testimony could not possibly tend to incriminate the witness.

Dixon faced two identifiable risks:

• Perjury exposure: If his trial testimony contradicted prior statements to the government, prosecutors could conclude that he had testified falsely and pursue charges under 18 U.S.C. § 1623(a).
• Renewed exposure following collateral relief: Dixon had a pending § 2255 motion. If successful, he might again face prosecution for conduct associated with the fraud scheme or its investigation.

The government had also declined to grant transactional immunity. The district court therefore acted within its discretion in finding a “very real, reasonable, and appreciable” risk of liability.

2. Sufficiency of the Concealment Money Laundering Evidence

Under 18 U.S.C. § 1956(a)(1)(B)(i), the government was required to prove that Jackson:

1. knowingly conducted a financial transaction;
2. knew that the transaction involved proceeds of some form of unlawful activity;
3. used funds that were in fact proceeds of specified unlawful activity; and
4. knew that the transaction was designed, at least in part, to conceal or disguise the proceeds’ nature, location, source, ownership, or control.

Jackson challenged only the second and fourth elements. Viewing the evidence in the light most favorable to the verdict, the court found ample circumstantial evidence of both knowledge and concealment.

Among the facts supporting the verdict were:

• Jackson’s company, Management Resource Services, received more than $335,000 from Gaines Reservation, which had fraudulently obtained an $806,710 PPP loan.
• Management Resource Services performed no corresponding services and conducted no legitimate business or payroll activity after receiving the funds.
• Jackson was the company account’s only authorized signer.
• She withdrew $9,700 in cash and purchased three $10,000 cashier’s checks.
• The cashier’s checks paid automobile loans and expenses associated with her former husband, John Gaines.
• Jackson knew that John was involved in applying for PPP loans.
• She falsely told the FBI that the funds were connected to payroll for a potential construction project and a proposal submitted to Gaines Reservation.
• No written proposal was produced in response to a grand jury subpoena.

A rational jury could infer from the unexplained transfers, lack of legitimate business activity, conversion of funds to cash and cashier’s checks, payment of personal expenses, and false explanation to investigators that Jackson knew both the illicit source and the concealment purpose of the transactions.

3. Relevance of the Roadrunner Automotive Transfers

Gaines Reservation transferred money to entities controlled by co-conspirator Darrell Thomas under the appearance of legitimate rent and payroll expenses. One of those entities then transferred $71,144.35 to Roadrunner Automotive, whose bank account initially had Jackson as its only authorized signer. Roadrunner subsequently made substantial cash withdrawals and payments referring to Jackson and John Gaines.

The court held that this evidence satisfied Federal Rule of Evidence 401’s low relevance threshold. The transfers made it more probable that Jackson understood the broader movement of fraud proceeds and knew that the money received by Management Resource Services came from unlawful activity.

Jackson’s Rule 403 objection was rejected as inadequately developed. She did not explain why the evidence’s probative value was substantially outweighed by unfair prejudice.

4. Deliberate Ignorance

A deliberate-ignorance instruction permits the jury to treat purposeful avoidance of a known likelihood as equivalent to knowledge. It is not appropriate where the evidence shows only negligence, carelessness, or actual knowledge alone.

Here, however, the evidence permitted two reasonable interpretations. The jury could find that Jackson actually knew the funds were fraud proceeds. Alternatively, it could find that she recognized a high probability of illegality but deliberately avoided asking questions so that she could later deny knowledge.

Relevant circumstances included the receipt of six-figure transfers without services, contracts, or a written proposal; the absence of genuine business activity; the use of business funds for personal expenses; and Jackson’s failure to ask John about the source of the money. Because the evidence supported both actual knowledge and deliberate ignorance, the instruction was proper.

Precedents Cited

Complex Concepts Simplified

Concealment money laundering

Using or moving criminal proceeds in a way intended to hide where the money came from, who owns it, where it is located, or who controls it.

Deliberate ignorance

Purposely avoiding confirmation of facts that one strongly suspects to be true. It requires more than carelessness or failure to investigate.

Transactional immunity

Broad protection against prosecution for conduct covered by the immunity grant. Dixon had not received such protection.

Plenary review

Independent appellate review without deference to the district court’s legal conclusion.

Abuse of discretion

A deferential standard under which reversal generally requires an unreasonable decision, an incorrect legal standard, or a clear error of judgment.

Specified unlawful activity

A qualifying underlying crime whose proceeds can support a federal money laundering charge, such as the fraud offenses involved here.

Impact

The opinion confirms that sentencing does not automatically extinguish a co-conspirator’s Fifth Amendment privilege. Courts must examine remaining risks, including perjury exposure, unresolved collateral proceedings, and the absence of immunity.

It also illustrates how concealment and knowledge may be established circumstantially. Transfers through nominal businesses, absence of legitimate services, cash withdrawals, payment of personal expenses, and false explanations can collectively support a money laundering conviction.

For future deliberate-ignorance cases, the decision reinforces an important limitation: the instruction requires evidence of purposeful avoidance, not mere negligence. But it remains permissible when the same record supports alternative findings of actual knowledge and conscious blindness.

Finally, the treatment of the Rule 403 argument underscores that appellate claims must be supported with legal analysis. Merely asserting unfair prejudice without explaining why it substantially outweighs probative value may result in abandonment.

Conclusion

United States v. Carla Jackson affirms a fact-sensitive approach to both self-incrimination and money laundering liability. A convicted and sentenced witness may retain the Fifth Amendment privilege when genuine criminal exposure remains. Meanwhile, financial irregularities, personal use of business funds, and false explanations may establish knowledge and concealment beyond a reasonable doubt. Where those facts support both actual awareness and purposeful avoidance, a deliberate-ignorance instruction is proper.