U.S. v. ORTIZ BARRERA

Citation Codes

Equivalent Citations

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Docket Number

No. 89-5288. Non-Argument Calendar.

Attorney(S)

Arthur Joel Levine, Ft. Lauderdale, Fla., for Barrera and Arana-Molta. Dexter Lehtinen, U.S. Atty., June Seraydar, Linda Collins Hertz, June Serayda, Anne Ruth Schultz, Asst. U.S. Attys., Miami, Fla., for U.S.

Judges

Phyllis A. Kravitch
Robert Lanier Anderson
James Larry Edmondson

Acts

Money And Finance — Money — Monetary Transactions — Records And Reports On Monetary Instruments Transactions — Reports On Exporting And Importing Monetary Instruments
Money And Finance — Money — Monetary Transactions — Records And Reports On Monetary Instruments Transactions — Criminal Penalties
Crimes And Criminal Procedure — General Provisions — Crimes — Principals

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Smart Summary

Factual and Procedural Background

Appellants Martha Lucia Ortiz Barrera and Gustavo Adolfo Arana-Molta pled guilty to failing to report the transport of $40,725 in currency out of the United States, in violation of 31 U.S.C. §§ 5316(a)(1)(A) and 5322(a), 31 C.F.R. § 103.23, and 18 U.S.C. § 2. Both appellants waived their rights and made written and oral statements acknowledging their involvement. Barrera stated that she transported the currency on behalf of an individual named Jacobo Macera and admitted it was logical to assume the money was drug-related. Molta admitted to involvement in money laundering and structuring deposits and acknowledged assuming the money was drug-related due to the nature of the business, although he denied being told so explicitly.

At sentencing, appellants agreed with a base offense level of thirteen under United States Sentencing Guidelines § 2S1.3(a)(1) but objected to a five-point upward adjustment under § 2S1.3(b)(1), arguing insufficient evidence that they knew the funds were criminally derived property. The district court rejected this argument, finding the government met its burden by a preponderance of the evidence, applied the five-point enhancement, subtracted two points for acceptance of responsibility, and sentenced each appellant to twenty-four months imprisonment, two years supervised release, and a $50 special assessment. This appeal followed.

Legal Issues Presented

Whether the district court erred in applying a five-point upward adjustment to appellants' base offense level under United States Sentencing Guidelines § 2S1.3(b)(1) based on knowledge or belief that the transported funds were criminally derived property.
Whether "reasonable belief" suffices for the enhancement under § 2S1.3(b)(1), or whether actual knowledge is required.

Arguments of the Parties

Appellants' Arguments

The appellants contended that the five-point enhancement under § 2S1.3(b)(1) requires actual knowledge that the funds were criminally derived property, not merely a reasonable belief.
They argued that although they had a reasonable belief the money was drug-related, this did not rise to the level of actual knowledge necessary for the enhancement.
Appellants relied on the pre-amendment commentary language emphasizing "knew" rather than "knew or believed" to support their position.

Government's Position

The government maintained that § 2S1.3(b)(1) applies when the defendant either knew or believed the funds were criminally derived, consistent with the plain language of the Guidelines.
It argued that the appellants' reasonable belief sufficed to warrant the five-point increase.
The government pointed to the 1990 amendment to the commentary, which clarified that "knew or believed" triggers the enhancement, supporting a broader interpretation of the guideline's language.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The court examined the language of United States Sentencing Guidelines § 2S1.3(b)(1), which provides for a five-point increase if the defendant "knew or believed" the funds were criminally derived property. Despite appellants’ argument relying on pre-amendment commentary emphasizing actual knowledge, the court held that the plain language of the guideline controls, rendering the commentary subordinate to the statutory text.

The court further considered the 1990 amendment to the commentary, which explicitly states that a defendant's belief alone suffices for the enhancement, indicating the original intent to include both knowledge and belief under subsection (b)(1). Although the amendment was not retroactive, it was relevant for interpreting the pre-amendment guideline.

The court emphasized that the Sentencing Guidelines focus on the defendant's state of mind and culpability, sanctioning culpable intent whether or not the funds were actually criminally derived. It recognized that appellants had a reasonable belief that the funds were drug-related, which satisfies the criteria for both the base offense level and the upward adjustment.

Reviewing the evidence, including appellants' admissions and conduct, the court found sufficient evidence to conclude appellants believed—and possibly knew—that the funds were connected to illegal drug activity. Therefore, the district court's enhancement under § 2S1.3(b)(1) was not clearly erroneous.

Holding and Implications

AFFIRMED.

The court upheld the district court's five-point upward adjustment of appellants' base offense level under United States Sentencing Guidelines § 2S1.3(b)(1), concluding that a defendant's belief that funds are criminally derived property justifies the enhancement. The decision confirms that the guideline's plain language governs over conflicting commentary and clarifies that reasonable belief—not just actual knowledge—can trigger sentencing enhancements under this provision. No new precedent was established beyond affirming the district court's application of the existing guideline to the facts of this case.

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UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE, v. MARTHA LUCIA ORTIZ BARRERA, GUSTAVO ADOLFO ARANA-MOLTA, DEFENDANTS-APPELLANTS.

PER CURIAM:

Appellants Martha Lucia Ortiz Barrera (Barrera) and Gustavo Adolfo Arana-Molta (Molta) were convicted of failing to report the transport of over $10,000 in currency out of the United States. In this appeal, appellants contest a five point increase of their base offense level under United States Sentencing Guidelines § 2S1.3(b)(1). Appellants allege insufficient evidence of their knowledge that the funds in transport were "criminally derived property." We hold that an upward adjustment in the base offense level under § 2S1.3(b)(1) is appropriate in this case.

I. FACTS

On January 13, 1989, Appellants Barrera and Molta pled guilty to violations of 31 U.S.C. § 5316(a)(1)(A) and 5322(a), 31 C.F.R. § 103.23, and 18 U.S.C. § 2 for failure to file a United States Custom Form 4790 in connection with their transportation of $40,725. Subsequent to the discovery of the currency, both appellants waived their rights and made written and oral statements.

We recognize that the written statements, signed by appellants, were translations and transcriptions from Spanish to English of appellants' oral statements. See Appellant's Brief at 5.

Barrera stated that an individual named Jacobo Macera had given her the currency to take to her sister in Colombia. She signed a written statement that she had deposited money from Macera into her account at Barnett Bank and would give him endorsed checks with which to make withdrawals. With respect to the $40,725 in transit, she admitted in her written statement that "it [was] logical to assume that the money was drug related and that was why I was afraid to report it to the Customs Agent."

In addition to signing a written statement admitting his guilt for illegal transport of currency, Molta conceded that he had been involved in money laundering activities over the past one and a half years. The government agents obtained evidence that Molta had engaged in a pattern of illegal activity known as "structuring" deposits, which Molta later confirmed. Molta stated that he and Barrera were to receive $250 each for the transportation of the $40,725, adding, "I have never been told the money is drug related but have assumed that it is [,] due to the nature of the business."

In district court, appellants agreed with the Probation Department's recommendation of a base offense level of thirteen under the United States Sentencing Guidelines § 2S1.3(a)(1), but they objected to the five point upward adjustment under § 2S1.3(b)(1). Appellants argued that the evidence did not support a finding that they knew that the funds in transport were criminally derived property as required by subsection (b)(1). The district court rejected appellants' argument and held that the government had met its burden of proof under subsection (b)(1) by a preponderance of the evidence. The court added five points to the base offense level of thirteen pursuant to subsection (b)(1) and subtracted two points for acceptance of responsibility, resulting in a final offense level of sixteen for each appellant. and Molta to twenty-four months' imprisonment. The court further sentenced each appellant to two years' supervised release and a $50 special assessment. Appellants are currently incarcerated.

Section 2S1.3(a)(1)(C) states:

Base offense level: 13, if the defendant: reasonably should have believed that the funds were criminally derived property.

II. DISCUSSION

Section 2S1.3(b)(1) of the Sentencing Guidelines provides for a five point increase in the base offense level of five points "[i]f the defendant knew or believed that the funds were criminally derived property." Appellants argue that although the language of § 2S1.3(b)(1) is "knew or believed," this section only increases the base offense level if the defendant actually knew that the funds were criminally derived. Prior to appellants' sentencing, the commentary to § 2S1.3(b) stated that "[t]he offense level is increased by 5 levels if the defendant knew that the funds were criminally derived" (emphasis added). From this language, appellants conclude that the government must prove actual knowledge under § 2S1.3(b)(1). Appellants admit that they had "reasonable belief" that the money they were transporting was related to drug activity, but they contend that "reasonable belief" does not rise to the level of actual knowledge.

This version of the commentary is relevant to appellants' case because it was in effect at the time of their sentencing. See infra Note 4 for a description of the subsequent amendment to the commentary.

An upward adjustment in base offense level is clearly appropriate in this case. Section 2S1.3(b)(1) literally encompasses "knowledge or belief" despite the language of the pre-amendment commentary. Where the terminology of a statute is clear, we do not need to rely on the commentary for its construction.

However, the 1990 amendment made two significant changes to the note and commentary following § 2S1.3 which support our interpretation of pre-amendment § 2S1.3(b)(1). First, the amendment added Application Note 2 which indicates that the defendant's belief alone is enough to warrant an offense level increase under subsection (b)(1):

Subsection (a)(1)(C) applies where a reasonable person would have believed from the circumstances that the funds were criminally derived property. Subsection (b)(1) applies if the defendant knew or believed the funds were criminally derived property. Subsection (b)(1) applies in addition to, and not in lieu of, subsection (a)(1)(C). Where subsection (b)(1) applies, subsection (a)(1)(C) also will apply. It is possible that a defendant "believed" or "reasonably should have believed" that the funds were criminally derived property even if, in fact, the funds were not so derived (e.g. in a "sting" operation where the defendant is told the funds were derived from the unlawful sale of controlled substances). (emphasis added)

Second, the 1990 amendment changed the language in the commentary from "[t]he offense level is increased by 5 levels if the defendant knew that the funds were criminally derived" to "[w]here the defendant actually knew or believed that the funds were criminally derived property, subsection (b)(1) provides for a 5 level increase in the offense level" (emphasis added).

While the 1990 amendment does not apply retroactively to appellants' pre-amendment sentencing, it is relevant to the interpretation of pre-amendment § 2S1.3(b)(1). Although Application Note 2 and the amended commentary both indicate that the defendant's belief that he transported criminally derived property warrants a five point increase under subsection (b)(1), the 1990 amendment did not alter the language of subsection (b)(1). This indicates to us that the Guidelines were amended to reflect an original intent that a defendant's belief alone can trigger subsection (b)(1).

Sections 2S1.3(a)(1)(C) and 2S1.3(b)(1) of the Sentencing Guidelines focus on a defendant's state of mind and sanction culpable intent, whether or not the defendant's belief that he was transporting criminally derived property is in fact true. The Sentencing Guidelines § 2S1.3, Application Note 2, provides that "[it] is possible that a defendant `believed' or `reasonably should have believed' that the funds were criminally derived property even if, in fact, the funds were not so derived. . . ." Therefore, appellants' belief that they were transporting criminally derived property requires both a base offense level of thirteen under § 2S1.3(a)(1)(C) and an adjustment upward of five levels under § 2S1.3(b)(1), even if criminal activity did not actually taint the funds at issue.

Upon review of the facts, we hold that the district court had sufficient evidence from which it could conclude that appellants believed that the funds they carried were related to illegal drug activity.

Furthermore, we find that the same evidence would support a conclusion that appellants also had knowledge of the drug activity.

Therefore, we hold that the district court was not clearly erroneous in enhancing appellants' sentences under § 2S1.3(b)(1).

AFFIRMED.