Tuesday, February 24, 2009

Money Laundering and Relevant Conduct

In US v. Blackmon, No. 07-4237 (2/23/09), the 3rd Circuit addressed the interplay between the money laundering guideline, USSG 2S1.1(a), and relevant conduct, USSG 1B1.3. The Circuit accurately warned that the discussion of these issues is "abstruse."

The Circuit held (1) that the district court correctly applied the guidelines for "direct money laundering" under USSG 2S1.1(a)(1) because defendant was accountable for the underlying offense of drug distribution; and (2) that the district court properly counted as relevant conduct for the money laundering guidelines the cocaine conspiracy that defendant was involved in.

Blackmon pleaded guilty to conspiracy to distribute over 5 kilos of cocaine, and to money laundering. The conspiracy involved Blackmon shipping Fed Ex packages of cocaine from California to conspirators in Philadelphia, in exchange for packages of cash that the coconspirators sent back to Blackmon. The FBI arrested the coconspirators, who began cooperating. FBI then set up a sting in which one of the coconspirators sent $15,000 to Blackmon as payment for a shipment of 1 kilo of cocaine. This constituted money laundering because the coconspirator stated that the money itself was the proceeds of drug trafficking. The FBI arrested Blackmon after seeing him pick up the money.

The Circuit ruled that Blackmon was engaged in "direct money laundering" under USSG 2S1.1(a)(1) because he committed the underlying offense of drug trafficking by agreeing to send the coconspirator cocaine.

The Circuit next ruled that in calculating the guidelines range for the money laundering, the district court correctly included as relevant conduct all of the drug trafficking from the conspiracy count. The Court rejected the defense argument that the money laundering offense level should be based only on the 1 kilo of cocaine to be sent in exchange for the $15,000. The Court reasoned that the more than 150 kilos from the cocaine conspiracy should be included as relevant conduct for the money laundering because it was relevant conduct for the drug distribution that was the underlying crime.

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