Opinion
No. S2 03 Cr. 828 (PKL).
October 25, 2004
DAVID N. KELLY, ESQ., United States Attorney for the Southern District of New York New York, NY, Bret R. Williams, Esq., Lisa G. Horwitz, Esq., Attorneys for United States.
LAWRENCE F. RUGGIERO, ESQ., New York, NY, Attorney for Defendant.
OPINION AND ORDER
On July 27, 2004, following a two-week jury trial, defendant Roman Nektalov was convicted of one count of money laundering in violation of 18 U.S.C. § 1956(a)(3). Defendant now moves for judgment of acquittal pursuant to Rule 29 of the Federal Rules of Criminal Procedure, or for a new trial pursuant to Rule 33 of the Federal Rules of Criminal Procedure. For the reasons stated in this Opinion, the motion is denied.
BACKGROUND
At all relevant times, Nektalov, along with his son, Eduard, owned and operated Roman Jewelers, a jewelry business located in New York, New York. The indictment charged and the government adduced evidence at trial, through the use of an undercover agent and a cooperating witness, that Nektalov conspired to accept and, in fact, accepted cash payments in exchange for diamonds and gold for the purpose of laundering money for Colombian drug dealers. Based on the aforesaid evidence at trial, including witness testimony and undercover audiotape recordings, the jury found the defendant guilty of using his business to launder money with the intent to promote narcotics trafficking.
The original indictment included Eduard Nektalov as a defendant; however, he was killed on May 20, 2004 near Roman Jewelers. The original indictment also did not include the conspiracy count. That count was added in a superceding indictment, dated June 8, 2004, that dropped Eduard Nektalov as a defendant. The indictment was superceded once more on June 10, 2004 to correct a clerical error so that the operative indictment is now S2 03 Cr. 828.
DISCUSSION
Defendant makes three arguments in support of his motion, including (1) that the evidence was insufficient to support a conviction for promoting money laundering; (2) that the Court should not have instructed the jury on conscious avoidance; and (3) that the conscious avoidance instruction was incorrect. The Court finds no merit in any of defendant's contentions.
I. Standards for Rule 29 and Rule 33
A. Rule 29 Standard
When a defendant moves pursuant to Rule 29, the district court must determine, based on all of the relevant evidence, whether a rational juror "might fairly conclude guilt beyond a reasonable doubt." United States v. Mariani, 725 F.2d 862, 865 (2d Cir. 1984) (internal quotations omitted). The district court must draw all reasonable inferences in the favor of the government, see id., and must resolve all issues of credibility in favor of the jury's verdict. See United States v. Weiss, 930 F.2d 185, 191 (2d Cir. 1991); United States v. Roldan-Zapata, 916 F.2d 795, 802 (2d Cir. 1990). To succeed on the motion, a defendant must persuade the court that, "viewing the evidence in the light most favorable to the government, . . . no rational trier of fact could have found the essential elements of the crime charged beyond a reasonable doubt." United States v. Leslie, 103 F.3d 1093, 1100 (2d Cir. 1997) (McLaughlin, J.) (internal quotations omitted). A defendant challenging the sufficiency of the evidence "bears a very heavy burden." United States v. Scarpa, 913 F.2d 993, 1003 (2d Cir. 1990) (internal quotations omitted); see also United States v. Cervone, 907 F.2d 332, 343 (2d Cir. 1990); United States v. Tillem, 906 F.2d 814, 821 (2d Cir. 1990) (stating that motions challenging the sufficiency of the evidence for a conviction "rarely carry the day").
B. Rule 33 Standard
Rule 33 of the Federal Rules of Criminal Procedure provides that "[u]pon the defendant's motion, the court may vacate any judgment and grant a new trial if the interest of justice so requires." Fed.R.Crim.P. 33(a). It confers broad discretion upon a trial court to set aside a jury verdict and order a new trial in order to avert a perceived miscarriage of justice. See United States v. Sanchez, 969 F.2d 1409, 1413 (2d Cir. 1992). A defendant seeking a new trial bears the burden of demonstrating the "essential unfairness of the [original] trial." United States ex rel. Darcy v. Handy, 351 U.S. 454, 462 (1956). In adjudicating a Rule 33 motion, a court is entitled to weigh the evidence and, in so doing, to evaluate the credibility of witnesses. See Sanchez, 969 F.2d at 1413. A court, however, should exercise its discretion under Rule 33 sparingly, granting a new trial only in exceptional circumstances. See id. at 1414. Indeed, "motions for a new trial are disfavored in this Circuit." United States v. Gambino, 59 F.3d 353, 364 (2d Cir. 1995).
II. Defendant's Contentions
A. There Was Sufficient Evidence to Support a Conviction for Promoting Money Laundering
Defendant first contends that the evidence was insufficient to support defendant's conviction of money laundering with the intent to promote drug trafficking. Defense counsel asserts, "there was simply no evidence presented" to demonstrate that Roman Nektalov intended to promote narcotics trafficking through his financial transactions. (Defendant's Memorandum of Law ("Def.'s Mem.") at 2.) The Court disagrees and finds that the government presented sufficient evidence for the jury to conclude that defendant intended to promote narcotics trafficking.
As stated supra, a defendant challenging the sufficiency of the evidence "bears a very heavy burden." Scarpa, 913 F.2d at 1003 (internal quotations omitted). Here, defendant's conclusory argument that no evidence was presented to support promoting money laundering fails to fulfill that burden. Relying primarily on undercover audiotape recordings, the government proved to the jury's satisfaction that defendant intended to promote drug trafficking by using his jewelry store to launder the money of alleged Colombian drug dealers. The government's evidence of Nektalov's participation in the promotion of narcotics trafficking included (1) that Nektalov agreed to provide gold to the undercover agent ("UC") and cooperating witness ("CW") at their next meeting after being shown bundles of currency in small denominations and being told that they only deal in small denominations on "the street" (Trial Transcript ("Tr.") 613); (2) that at the next meeting, Nektalov discussed the sale of $500,000 worth of diamonds with the UC and CW and assisted in selecting and weighing the diamonds to be sold (id. at 678-79); and (3) that Nektalov understood that the UC and CW intended to send the gold and diamonds they purchased from Roman Jewelers to Colombia where the jewels would be resold for cash (id. at 603-04, 701). Drawing all reasonable inferences in the favor of the government, the Court is not persuaded that "no rational trier of fact could have found the essential elements of the crime charged beyond a reasonable doubt." Leslie, 103 F.3d at 1100. Therefore, defendant's motion for a judgment of acquittal is denied.
B. The Conscious Avoidance Instruction Was Appropriate
Defendant next argues that the Court should not have instructed the jury on the theory of conscious avoidance because it deprived defendant of a fair trial. The Court's instruction reads in part:
If you find beyond a reasonable doubt that the defendant was aware that there was a high probability that, for example, the money in which he was conducting financial transactions was the proceeds of narcotics trafficking, but deliberately and consciously avoided confirming this fact, then you may treat this deliberate avoidance of positive knowledge as the equivalent of knowledge, unless you find that the defendant actually believed that the money in which he was conducting a financial transaction was not the proceeds of drug trafficking.
Defendant previously challenged the propriety of the conscious avoidance instruction at the charging conference in this case. (Tr. 854-62.) There, defendant contended that the instruction was inappropriate because the money laundering statute at issue, 18 U.S.C. § 1956(a)(3), relies upon defendant's belief while the doctrine of conscious avoidance applies when defendant's knowledge is in dispute. Because the primary inquiry under the statute is whether defendant believed the funds were illicit, defense counsel maintained, defendant's knowledge was not at issue, and thus the instruction should not be given. The following day, the Court rejected defendant's argument citing "the clear weight of authority . . . [that] endorses the use of a conscious avoidance charge in money laundering sting operations where the defendant denies knowledge of the source of the sting funds or of the illegal purpose of the money laundering conspiracy." (Tr. 904.)
(Tr. 1034-35.) In essence, defendant maintains that the final clause of this portion of the instruction ("unless you find that the defendant actually believed that the money in which he was conducting a financial transaction was not the proceeds of drug trafficking") improperly shifted the burden of proof because it required defendant to prove that he did not believe the money was drug proceeds to avoid the application of the conscious avoidance instruction. (Def.'s Mem. at 3.) Therefore, defendant continues, the government was relieved of its obligation to prove an element of the crime of the conviction, namely that defendant believed that the transaction involved the proceeds of drug trafficking. The Court is not persuaded by defendant's argument as it ignores relevant case law and is logically inconsistent.
First, with respect to the law, "[a] conscious-avoidance charge is appropriate when (a) the element of knowledge is in dispute, and (b) the evidence would permit a rational juror to conclude beyond a reasonable doubt `that the defendant was aware of a high probability of the fact in dispute and consciously avoided confirming that fact.'" United States v. Hopkins, 53 F.3d 533, 542 (2d Cir. 1995) (Kearse, J.) (quoting United States v. Rodriguez, 983 F.2d 455, 458 (2d Cir. 1993)); see also United States v. Aina-Marshall, 336 F.3d 167, 170 (2d Cir. 2003) (Winter, J.); United States v. Ferrarini, 219 F.3d 145, 154 (2d Cir. 2000); United States v. Gabriel, 125 F.3d 98, 98 (2d Cir. 1997). The second prong of the test has two components, "there must be evidence that the defendant (1) was aware of a high probability of the disputed fact and (2) deliberately avoided confirming that fact." United States v. Svoboda, 347 F.3d 471, 480 (2d Cir. 2003). Further, the charge is "proper where the `surrounding circumstances were such that reasonable persons could have concluded that the circumstances alone should have apprised [the defendant] of the unlawful nature of [his] conduct.'" United States v. Civelli, 883 F.2d 191, 195 (2d Cir. 1989) (quoting United States v. Guzman, 754 F.2d 482 (2d Cir. 1985)).
As the Court concluded following the charging conference, throughout his case, defendant attempted to demonstrate his lack of knowledge regarding the illicit source of the funds represented by government agents in the charged money laundering transactions. (Tr. 905.) Thus, he placed the element of knowledge in dispute. See Hopkins, 53 F.3d at 542. Moreover, the government presented sufficient evidence for a reasonable jury to find beyond a reasonable doubt that defendant was aware of a high probability of the illicit nature of the funds and deliberately avoided confirming that fact. Id. Accordingly, the prevailing authority in this Circuit supports the use of a conscious avoidance instruction in this instance.
Without citing a single authority, defendant claims the Court's conscious avoidance instruction unfairly relieved the government of its obligation to prove beyond a reasonable doubt that defendant believed the charged financial transactions involved the proceeds of drug trafficking. Defendant's argument ignores the fact that a court is permitted to instruct the jury on conscious avoidance only when the government presents evidence sufficient to allow a rational juror to find beyond a reasonable doubt that a defendant was aware of a high probability of the fact in dispute and consciously avoided confirming that fact. Id. Moreover, the jury may apply the concept of conscious avoidance only after it has found beyond a reasonable doubt that defendant was aware of a high probability of the fact in dispute and consciously avoided confirming it. Therefore, in order for both the Court and the jury to consider the conscious avoidance instruction, the government must establish beyond a reasonable doubt that defendant purposefully avoided confirming the fact at issue. Thus, the government retains the burden of proof.
Further, the Court's instruction to the jury that defendant could not be found to have consciously avoided the requisite knowledge regarding the illicit nature of the funds if defendant actually believed the funds were not illicit did not shift the burden of proof to defendant. This portion of the instruction simply advised that defendant could not be found to have consciously avoided knowledge of criminal activity if the jury believed that he actually understood there was no criminal activity. As discussed above, the government was still required to prove defendant's knowledge of illegality; this portion of the instruction only clarified for the jury when the concept of conscious avoidance could not be applied. It did not require defendant to disprove that defendant believed the transaction involved the proceeds of drug trafficking. Accordingly, the Court's instruction was appropriate and did not deprive defendant of a fair trial.
C. The Conscious Avoidance Instruction Was Correct
Defendant's final argument is premised on the fact that the jury indicated on the verdict sheet that it convicted defendant "based on aiding and abetting." (Tr. 1112.) Defendant maintains that the conscious avoidance instruction was erroneous as it related to the aiding and abetting charge.
A defendant may be convicted for aiding and abetting an underlying crime only if the government proves that a person other than the defendant committed the underlying crime and that defendant acted purposefully to bring about the underlying crime.See United States v. Cruz, 363 F.3d 187, 197-98 (2d Cir. 2004) (internal citations omitted); United States v. Best, 219 F.3d 192, 199 (2d Cir. 2000). Thus, aiding and abetting requires the specific intent to further the underlying crime, not merely knowledge that the underlying crime would occur. See Cruz, 363 F.3d at 198; United States v. Friedman, 300 F.3d 111, 124 (2d Cir. 2002), cert. denied, 538 U.S. 981 (2003) ("Proof that the defendant knew that some crime would be committed is not enough.").
Moreover, the Second Circuit has made clear that a finding of conscious avoidance may satisfy the element of knowledge for counts charged under an aiding and abetting theory, but it cannot satisfy the element of intent. See United States v. Morgan, No. 02-1758, 2004 U.S. App. LEXIS 20778, at *26 (2d Cir. Sept. 28, 2004) ("`[C]onscious avoidance' does not alone suffice to prove criminal intent."); United States v. Reyes, 302 F.3d 48, 54-55 (2d Cir. 2002) (finding that the doctrine of conscious avoidance may be used to prove that defendant had knowledge of an unlawful conspiracy, but may not be used to prove intent to participate in the conspiracy); United States v. Samaria, 239 F.3d 228, 239-240 (2d Cir. 2001) (holding that conscious avoidance does not provide the requisite proof of intent for the underlying crimes in a conspiracy and aiding and abetting prosecution); United States v. Beech-Nut Nutrition Corp., 871 F.2d 1181, 1196 (2d Cir. 1989) (Kearse, J.) ("[T]he conscious-avoidance concept is pertinent to knowledge . . . but a finding of conscious avoidance could not alone provide the basis for finding purpose or for finding intent as a whole."). Defendant claims the conscious avoidance instruction was improper because it advised the jury that the knowledge and the specific intent required for aiding and abetting could be found on the basis of conscious avoidance. (Def.'s Mem. at 5.)
A criminal defendant challenging a jury instruction after a conviction must demonstrate that (1) he requested an instruction that correctly described applicable law and (2) the "instruction actually given was, viewed as a whole, prejudicial to his rights." United States v. Yousef, 327 F.3d 56, 130 (2d Cir. 2003); see also United States v. Pujana-Mena, 949 F.2d 24, 27 (2d Cir. 1991). The charge should be "viewed in its entirety and not on the basis of excerpts taken out of context, which might separately be open to serious question." United States v. Clark, 765 F.2d 297, 303 (2d Cir. 1985); see also Victor v. Nebraska, 511 U.S. 1, 16 (1994) (stating that an excerpt from a jury instruction "cannot be sequestered from its surroundings");Scarpa, 913 F.2d at 1018. Furthermore, a reviewing court should also consider the questioned jury instruction not only in light of the rest of the charge, but also "in the context of the entire trial." United States v. Dyer, 922 F.2d 105, 107 (2d Cir. 1990); see also United States v. Amuso, 21 F.3d 1251, 1261 (2d Cir. 1994); Scarpa, 913 F.2d at 1018.
The Court has reviewed the instruction on conscious avoidance in its entirety and finds it to be proper and correct as it relates to the aiding and abetting charge. To begin, it is noteworthy that defense counsel did not object to or seek clarification of the conscious avoidance instruction on these grounds at trial. He raised an issue concerning the application of conscious avoidance to the conspiracy charge, which the Court addressed, but not with respect to the aiding and abetting charge. (Tr. 862-63.)
Defendant focuses specifically on the following sentence within the instruction:
In determining whether the defendant acted knowingly and intentionally, you may consider whether the defendant deliberately closed his eyes to what otherwise would have been obvious.
(Tr. 1034.) He contends that this statement improperly permits the jury to conflate knowledge and intent when applying the theory of conscious avoidance to the aiding and abetting charge. (Def.'s Mem. at 5-6.) It is inconsistent with the prevailing law of this Circuit, and can often be misleading, to read a particular sentence from a jury instruction in isolation. See Clark, 765 F.2d at 303; Victor, 511 U.S. at 16. Indeed, a statement can convey a different and unintended meaning when removed from its proper context. As a result, an understanding of how this portion of the instruction relates to the instruction as a whole is necessary.
Immediately following the sentence cited by defendant, the Court explained to the jury, using a specific example, that conscious avoidance pertains only to a defendant's level of knowledge. Furthermore, the Court took the additional step of highlighting the distinction between knowledge and intent in the context of the conspiracy charge. Although the Court did not reiterate the distinction in the context of the aiding and abetting charge, it does not follow by "obvious implication" that the distinction did not apply to aiding and abetting. (Def.'s Mem. at 6.) To the contrary, the concepts of conspiracy and aiding and abetting are sufficiently analogous that it stands to reason the jury properly understood that the theory of conscious avoidance applied to each charge in a similar fashion. That is to say, it is likely the jury recognized that just as the requisite intent to join a conspiracy cannot be based solely upon the theory of conscious avoidance, the requisite intent to aid and abet an underlying crime may not be founded entirely upon conscious avoidance. Thus, when viewed as a whole and in proper context, the instruction was a correct statement of the law and was not prejudicial to the rights of the defendant. See Yousef, 327 F.3d at 130.
In relevant part, the Court explained:
I would like to point out that the necessary knowledge cannot be established by showing that the defendant was careless, negligent or foolish. One may not, however, willfully and intentionally remain ignorant of a fact material and important to his or her conduct in order to escape the consequences of criminal law. If you find beyond a reasonable doubt that the defendant was aware that there was a high probability that, for example, the money in which he was conducting financial transactions was the proceeds of narcotics trafficking, but deliberately and consciously avoided confirming this fact, then you may treat this deliberate avoidance of positive knowledge as the equivalent of knowledge, unless you find that the defendant actually believed that the money in which he was conducting a financial transaction was not the proceeds of drug trafficking.
(Tr. 1034-35.)
The Court cautioned:
I want to be very clear about what this means and does not mean with respect to the conspiracy charged in Count One. First, there is a difference between knowingly participating in the conspiracy and knowing the objects of the conspiracy. `Conscious avoidance,' as I have described it, can't be used as a substitute for a finding that the defendant knowingly joined the conspiracy. It is logically impossible for a defendant to join a conspiracy unless he knows the fact that the conspiracy exists. However, if you find beyond a reasonable doubt that the defendant chose to participate in the conspiracy, in considering whether the defendant knew that the objective of the conspiracy was money laundering, you may consider whether the defendant deliberately avoided confirming an otherwise obvious fact that one purpose of the partnership he joined was to launder the proceeds of some unlawful activity.
(Tr. 1035.)
CONCLUSION
Based on the foregoing, defendant's motion for a judgment of acquittal or a new trial pursuant to Rules 29 and 33 of the Federal Rules of Criminal Procedure is denied in all respects.
SO ORDERED