United States v. Diaz-Menera

United States v. Diaz-Menera, 60 F.4th 1289 (2023) Sentencing – Guidelines Calculation Money Laundering USSG § 2S1.1; appropriate base level i.e., underlying offense Short version: Conspiracy to traffic drugs can be underlying offense for laundering money USSG § 2S1.1(a)(1). More broadly, conspiracy can be the underlying offense for money laundering. Long version: “Authorities” were investigating Jose Manual Aveja for drug-trafficking. Mr. Aveja met a white van in a public parking lot; he took something from the van and put it in his car and puttered away. Some cops followed him, stopped him in Texas, and found four kilograms of meth. Other officers followed the white van to a house; they watched the house, observed two cars come, stay for a short while, and leave. Officers followed these cars and stopped them. The car our client drove happened to have $99,900 cash. The residence had “$400,000 (bundled in the same way as the $99,900), a gun, a drug ledger documenting over $1 million in drug sales over the prior five months, and a flattened cardboard box stained with methamphetamine residue.” at 1291. Mr. Diaz-Menera estimated he’d laundered around $1.5 million over the prior 7-8 months and he knew it came from illegal activities but declined to say what those illegal activities were. The Government charged him with conspiracy to distribute meth and conspiracy to launder money. He pled to the money laundering count, and the Government dismissed the drug conspiracy. The plea agreement also detailed that the Government agreed he got a 2-level reduction for acceptance of responsibility under USSG § 3E1.1(a) if he complied with the plea agreement, committed no further crimes, and did not “falsely deny or frivolously contest relevant conduct.” And if Mr. Diaz- Menera qualified for the additional one level drop under USSG § 3E1.1(b), the Government would ask for it. (Government has to ask for the decrease under § 3E1.1(b).) Probation figured that laundered money came from drug sales and looked to the guideline for drug conspiracy (§ 2D1.1). The figured he had 321 kg of meth (they totaled the estimated $1.5 million with the $99,900 from the car and the over $400,000 from the house and divided it by Oklahoma City’s per kg price of meth of approximately $6,250 (which they do not tell us how they came to – maybe they have an anonymous survey?)). This gave his a base level of 38 (under the drug conspiracy guideline as directed by §2S1.1(a)(1)(A)) Mr. Diaz-Menera objected on 3 grounds: 1) he didn’t personally possess or distribute drugs; 2) he wasn’t a member of the drug trafficking conspiracy; and 3) only the $99,900 could be tied to drug sales. The district court agreed that only $99,900 could be tied to drugs but concluded that conspiracy to traffic drugs could be the underlying offense. This dropped his base level by two. The Government felt that Mr. Diaz-Menera’s objections to the PSR were frivolous so did not ask for the one-level drop under § 3E1.1(b). The Government conceded on appeal that the agreement was that they would ask for the one-level drop if that subsection applied, the court applied the two-level drop, and he timely accepted the plea. The frivolous objections didn’t apply. (Though I sincerely wish the Tenth Circuit pointed out if the district court agreed with the objection, it’s not frivolous, they did not. Sigh.) After all is said and done, his guideline range ended up being 262-327 months but money laundering has a statutory maximum of 240 months. See 18 USC § 1956(a)(2). The district court granted a downward departure and he ended up with a sentence of 168 months (or 14 years). The money laundering guideline (§ 2S1.1) differentiates between “direct money launderers” (those personally involved in the underlying offense) and “third-party money launderers” (those who launder money without involvement in the underlying offense). The actual language of § 2S1.1(a) is: “1) The offense level for the underlying offense from which the laundered funds were derived, if (A) the defendant committed the underlying offense (or would be accountable for the underlying offense under subsection (a)(1)(A) of § 1B1.3 (Relevant Conduct)); and (B) the offense level for that offense can be determined; or 2) 8 plus the number of offense levels from the table in § 2B1.1 (Theft, Property Destruction, and Fraud) corresponding to the value of the laundered funds, otherwise.” So, we flip to § 1B1.3. Subsection (A) limits conduct to only the defendant’s own conduct; subsection (B) includes acts and omission of others. The majority tells to pay no mind this distinction because we don’t need to go to § 1B1.3(a)(1)(A) – and points us back to the money laundering guideline. He joined the conspiracy so he’s liable for the results of the conspiracy. The dissent (Ebel) points out that the actus reas of conspiracy is the agreement and the agreement by itself does not product any moo-lah. It is only the crime underlying the conspiracy (here the actual selling/trafficking) that generates the money. Ebel point out the majority’s reading of the money laundering guideline elides direct money launderers and third-party money launderers by making subsection (a)(2) superfluous. The distinction in relevant conduct supports the dissent’s reading – remember the majority said we didn’t need to bother our pretty little heads with relevant conduct so they don’t really account for it. The Tenth Circuit is the first to address head on if a drug conspiracy is properly the underlying offense.