United States v. Hurley

• Court: Court of Appeals for the First Circuit
• Decided: April 22, 1992
• Docket: 92-1068
• Status: Published

Opinion

USCA1 Opinion

          April 22, 1992        [NOT FOR PUBLICATION]

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No. 92-1068

UNITED STATES,

                                      Appellee,

                                          v.

                               VINCENT "MICKEY" HURLEY,

                                Defendant, Appellant.

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                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                           FOR THE DISTRICT OF RHODE ISLAND

[Hon. Ernest C. Torres, U.S. District Judge]
                                             ___________________

                                 ___________________

                                        Before

                                 Breyer, Chief Judge,
                                         ___________
                           Campbell, Senior Circuit Judge,
                                     ____________________

and Selya, Circuit Judges.
                                           ______________

                                 ___________________

               Frederick G. Cass, on brief for appellant.
               _________________
               Lincoln C.  Almond, United States Attorney,  James H. Leavey
               __________________                           _______________
          and  Margaret E.  Curran, Assistant  United States  Attorneys, on
               ___________________
          brief for appellee.

__________________

                                 __________________ 

Per Curiam.  A 152-count indictment returned in November
                 __________

            1991  charges  thirteen  persons  with  various  offenses  in

            connection  with  an  alleged international  money-laundering

            scheme.  Vincent  Hurley, one of  the named defendants,  here

            appeals from a district court order under 18 U.S.C.   3142(e)

            directing  that he be detained  pending trial due  to risk of

            flight.  We find that the government has sustained its burden

            of  establishing by a  preponderance of the  evidence that no

            conditions  of   release  will  reasonably   assure  Hurley's

            appearance at trial.  We therefore affirm.

                 The  indictment, returned in Rhode Island federal court,

            charges Hurley with one count of RICO conspiracy, 18 U.S.C.  

            1962(d), four counts of  failure to file Currency Transaction

            Reports,  31 U.S.C.    5324(1),  three counts  of structuring

            violations,  id.    5324(3),  and two  counts  of Travel  Act
                         ___

            offenses, 18 U.S.C.    1952(a)(3).   On December  2, 1991,  a

            magistrate-judge  (magistrate) held  a detention  hearing and

            ordered that  Hurley be detained  because of risk  of flight.

            Three weeks later, the magistrate granted Hurley's motion for

            reconsideration  and  ordered  his  release  under  stringent

            conditions, including  full surety of $400,000  and a nightly

            curfew.   The  district court,  in turn,  reimposed detention

            following  a de novo hearing  on December 30,  1991, and this
                         _______

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appeal ensued.1   We undertake an  independent review of  the

            detention  order,  tempered  by  deference  to  the  district

            court's  determinations,  particularly its  factual findings.

            See, e.g., United States v. Patriarca, 948 F.2d 789, 791 (1st
            ___  ____  _____________    _________

            Cir. 1991);  United States v.  Tortora, 922 F.2d  880, 882-83
                         _____________     _______

            (1st Cir. 1990).

                 The evidence  below2 showed that Hurley  was involved in

            an  organization  which  laundered  hundreds of  millions  of

            dollars  of drug  proceeds for  Colombian drug cartels.   The

            organization,  which  was   headed  by  codefendant   Stephen

            Saccoccia,  functioned  on  a  commission basis;  it  had  no

            involvement  in the  underlying  drug activity  itself.   The

            scheme operated, in the  main, as follows.  Large  volumes of

            cash would be delivered  by courier to Saccoccia in  New York

            City. In accordance with faxed instructions, much of the cash

            would  then be shipped, by armored car or private vehicle, to

            either of two companies owned by Saccoccia in Cranston, Rhode

            Island:  Trend  Precious Metals  (Trend)  and Saccoccia  Coin

____________________

            1.  David  Izzi,   one  of  Hurley's  codefendants,  filed  a
            companion  appeal from  a similar  detention order  but later
            opted for voluntary dismissal.   Consideration of the instant
            appeal has been delayed in part by the fact that Hurley first
            requested  leave  to  file  a  supplemental  brief  and  then
            withdrew that request.  

            2.  No testimony  was heard; both sides  relied on affidavits
            and  oral  proffers.    The  affidavits  consisted  of  those
            submitted by government agents  in support of search warrants
            and orders  for electronic surveillance,  and those submitted
            by friends and relatives of Hurley.

                                         -3-

Company.    These  two  companies  together  constituted  the

            headquarters for the Rhode Island branch of the organization.

            In 1990 and early 1991,  such shipments occurred almost daily

            and would typically contain  hundreds of thousands of dollars

            in  small denominations.   Once  in Rhode  Island, the  money

            would be counted on an automatic counting machine and sorted.

            Pursuant to Saccoccia's instructions,  it would then be taken

            to area banks and used  to purchase cashier's or  treasurer's

            checks.   These transactions  were frequently "structured" so

            that the amounts were less than $10,000--a device designed to

            avoid  the filing of a Currency Transaction Report.  On other

            occasions,  when the  purchases  exceeded  that  amount,  the

            defendants  caused false reports (or no reports at all) to be

            filed.  The checks were made  payable to Trend or other dummy

            companies  controlled   by  Saccoccia--businesses  ostensibly

            engaged  in  such trades  as gold  or  jewelry that  would be

            expected to generate large quantities  of cash.3  The  checks

            would  be deposited  in  those companies'  accounts, and  the

            funds later  transferred to  a central account  maintained by

            Trend at a Providence bank.  The evidence shows that, between

            January 1990 and  April 1991, over $30  million was deposited

            into  this  clearinghouse account  in  such a  manner.   From

____________________

            3.  In March and  April 1990,  portions of the  cash used  to
            purchase checks were segregated  at random and dog-tested for
            controlled substances.  Each such test resulted in a positive
            alert.

                                         -4-

there,  the money would be wired to bank accounts in Colombia

            and elsewhere.4  

                 The indictment  charges, and the  district court  found,

            that  Hurley  helped to  supervise  the organization's  Rhode

            Island operations through his base at Saccoccia Coin Company-

            -communicating  frequently  with Saccoccia,  participating in

            the  receipt of  cash, and  overseeing its  deposit  into the

            various  bank  accounts.   In  addition,  there was  evidence

            showing  the following.    Hurley (who  is  described in  one

            affidavit  as  Saccoccia's  brother-in-law)  was  present  on

            several  occasions  with  him  in  New  York  when  cash  was

            delivered.  A  search of Hurley's residence  found $67,000 in

            cash,  numerous   ounces  of  gold,  and   several  firearms,

            including  a .44  magnum pistol.   Intercepted  conversations

            revealed that Hurley, along with  other defendants, routinely

            used code  words designed  to make  references to cash  sound

            like discussions  of  precious metals.5   He  and the  others

            repeatedly  spoke  of security  measures,  such as  obtaining

____________________

            4.  Saccoccia also  wired large sums  of money  to the  Trend
            account from Los  Angeles and  New York.   In total,  between
            January 1990  and April 1991, approximately  $137 million was
            laundered through this central account. On April 2, 1991, the
            Providence bank closed Trend's  account, and Saccoccia set up
            a new clearinghouse account in Los Angeles. 

            5.  For   example,  "ounces"  meant   thousands  of  dollars.
            "Karat"  referred  to  the  denomination  of currency:  e.g.,
                                                                    ____
            twenty karat  meant twenty dollars.   "High  grade" and  "low
            grade"  referred  to  high  and  low  denomination  currency,
            respectively.

                                         -5-

cellular  telephones  in  the  belief  that  they  were  less

            vulnerable to  wiretapping.   According  to the  government's

            proffers, Hurley was overheard  on November 26, 1990 agreeing

            to "fence" $132,000 in gold that had been stolen in  an armed

            robbery earlier that  day.   He was overheard  a month  later

            stating,  "We're not coin dealers; we're fences."  And he was

            overheard threatening  to "get"  an IRS  agent if that  agent

            bothered his mother or father.6

                 On   his  own  behalf,   Hurley  presented  evidence  of

            substantial ties to the community.   He is 34-year-old native

            and life-long  resident of  Rhode Island who  has resided  in

            Cranston  for the  past two  years.   He has  a four-year-old

            daughter, for  whom he pays monthly child  support, and lives

            with his  girlfriend, to  whom he is  contemplating marriage.

            His  parents also live in  Cranston; his father  is a double-

            amputee  Korean  War veteran.    In addition,  Hurley  has no

            criminal  record.    He claims  to  be  indigent.   While  he

            apparently owns no real  estate himself, his parents and  two

            sisters have all  agreed to  post their  houses as  security.

____________________

            6.  The district  court  downplayed the  seriousness of  this
            threat and did not base the detention order on the  ground of
            dangerousness.   The government  has not argued  in favor  of
            detaining Hurley on this basis, either below or on appeal.   

                                         -6-

And  he states  that,  if released  on  bail, he  could  find

            employment as a trailer salesperson or apprentice plumber.7  

                 We agree  with the district  court that, notwithstanding

            these  "admittedly significant"  factors, the  government has

            sustained its  burden of  proving by  a preponderance  of the

            evidence  that  no  conditions of  release  would  reasonably

            assure  Hurley's  appearance  at  trial.    Even  substantial

            community  ties  can be  outweighed by  strong countervailing

            evidence  of risk  of flight.   See,  e.g., United  States v.
                                            ___   ____  ______________

            Palmer-Contreras, 835  F.2d 15 (1st Cir.  1987) (per curiam).
            ________________

            We  think such evidence exists here.  Hurley concedes that he

            faces a  potential prison  term in  excess of  fifteen years.

            Based  on  the present  record,  the  evidence against  him--

            consisting largely of intercepted  oral communications--would

            appear  to be  strong.   Together,  these  factors provide  a

            considerable incentive to flee.   And from the nature  of the

            organization  and  Hurley's  role  in it,  the  inference  is

            compelling  that  he  likely  has  access  to  the  financial

            resources and international contacts  that would provide  him

            with the means to flee  and thereafter to absorb the cost  of

            any security that is forfeited by relatives or friends.  I  n

____________________

            7.  Hurley also  proffers (1) that  the weapons found  in his
            home (including  the .44 magnum)  were used for  hunting, (2)
            that he brought  the cash  and gold home  from the  Saccoccia
            Coin Company  because the  security system had  recently been
            tampered  with, and (3)  that the "we're  fences" comment was
            nothing more than sarcasm.

                                         -7-

addressing  this latter  consideration,  the  district  court

            deemed  relevant--at  least  by   analogy--the  congressional

            findings giving rise to  the rebuttable presumption of flight

            created by 18 U.S.C.    3142(e) as to major  drug offenders.8

            Hurley  on appeal claims that  such reliance was  error.  Yet

            the  district court did not purport  to apply the presumption

            itself (recognizing that Hurley had not been charged with any

            offense to which it  applies).  Rather, it simply  noted that

            the  same  policy  considerations  underlying  the  statutory

            presumption  were  applicable here.    As  another court  has

            explained:

                 "[M]oney  laundering" is  an integral  part  of the
                 narcotics business.  The same factors  which create
                 an  unusually  high  risk of  flight  in  narcotics
                 offenses and which form the basis for the statutory
                 presumption  are  present  here--the   business  is
                 extremely   lucrative   and  those   involved  have
                 established  substantial  ties  outside the  United
                 States.      Thus,   persons   involved   in  money
                 laundering,  just  as those  involved  in narcotics
                 trafficking,   have   the  resources   and  foreign
                 contacts  to escape  to  other countries  to  avoid
                 prosecution.

            United States v. Botero,  604 F. Supp. 1028, 1033  (S.D. Fla.
            _____________    ______

            1985), aff'd mem.  853 F.2d 928 (11th Cir. 1988).   Whether a
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____________________

            8.  See, e.g.,  United States  v. Jessup,  757 F.2d  378, 384
                ___  ____   _____________     ______
            (1st Cir. 1985) ("After  hearing evidence, Congress concluded
            that 'flight to avoid  prosecution is particularly high among
            persons  charged with  major drug  offenses.'  It  found that
            'drug  traffickers often  have established  ties  outside the
            United States ... [and]  have both the resources  and foreign
            contacts  to escape  to other  countries ....'")  (quoting S.
            Rep. No. 225, 98th  Cong., 1st Sess. 20 (1983),  reprinted in
            1984 U.S.C.C.A.N. 3203) (citation omitted).

                                         -8-

person accused of  money laundering can  be presumed, in  the

            absence of  any direct  evidence thereof, to  have access  to

            such "resources and  foreign contacts" is a  question we need

            not decide.  For that is not what occurred here.  Rather, the

            organization's close links to  Colombian drug cartels and the

            ready  availability   of  large   sums  of  cash   were  both

            established by direct evidence--evidence which Hurley has not

            attempted to dispute.    

                 Hurley also  contends that  the district court  erred in

            finding   that  he   played   a  supervisory   role  in   the

            organization's Cranston, Rhode  Island operations.   Based on

            the  evidence presented, we agree that he was not the ranking

            person in the local hierarchy; that role appears to have been

            filled  by  codefendant David  Izzi.   It  is also  true that

            Hurley appears not to  have conducted any of the  actual bank

            transactions himself.9  We are not persuaded, however, by his

            argument that his rank in the organization was no higher than

            that of other defendants who have been released on bail.   To

            the contrary, as the government argued and the district court

            implicitly  found, Hurley  appears  to  have been  second-in-

            command in Rhode  Island.  Among other  evidence, his nearly-

            daily  conversations  with  Saccoccia  (and   Izzi)  and  his

____________________

            9.  Exhibit  A  to the  indictment  lists  hundreds of  check
            purchases   and,  in  each   instance,  identifies  both  the
            individual  conducting  the   transaction  and  the  business
            designated  as  "payee."   Hurley's  name,  and  that of  the
            Saccoccia Coin Company, do not appear in this listing.  

                                         -9-

occasional  visits  with  Saccoccia  in New  York  warrant  a

            finding that  he  played a  supervisory  role--receiving  and

            implementing instructions  from Saccoccia and  overseeing the

            receipt  and  subsequent disposition  of  the drug  proceeds.

            Given the  organization's access to  large sums of  money and

            foreign  contacts,  a substantial  risk  of  flight might  be

            deemed  present even  with respect  to someone  lower  in the

            hierarchy.  Cf. United States v. Dillon, 938 F.2d 1412, 1416-
                        ___ _____________    ______

            17  (1st Cir.  1991)  (per curiam)  (applying presumption  to

            uphold  pretrial detention  of  individual with  strong local

            ties who  participated  only  marginally  in  attempted  drug

            purchase); Palmer-Contreras, 835 F.2d at 18 (same; defendants
                       ________________

            served as  "mules" in  drug  importation scheme).   Here,  in

            light of Hurley's supervisory  position and the other factors

            recited above, we  think the  district court's  determination

            was well warranted.

                 Finally, Hurley advances a pair of arguments challenging

            the  constitutionality of  his detention  on the  ground that

            pretrial proceedings are  likely to  be protracted.   We  are

            told  that Saccoccia and his  wife (who is  also a defendant)

            were arrested  in Switzerland  and are  fighting extradition;

            trial must await resolution of that matter.  Furthermore, the

            government's evidence  in this case includes  over 1600 hours

            of tape  recordings and over  5000 pages of  handwritten logs

            summarizing  the  contents  thereof,  all of  which  must  be

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scrutinized by the defendants.  Hurley  first argues that, in

            light  of  these  circumstances,  his  pretrial detention  is

            likely to be so extended as to violate due process, such that

            he should now be released.  We rejected an identical argument

            in Tortora: 
               _______

                 At  this   stage  of  the   proceedings,  Tortora's
                 pretrial  incarceration has not  been so protracted
                 as to  support a  due process  claim.  Because  the
                 duration   of   further    immurement   is    still
                 speculative,    consideration    of   whether    an
                 appreciably   longer  incarcerative   period  would
                 constitute   a   violation  of   constitutional  or
                 statutory  law  in  Tortora's  case   is  presently
                 unripe.  

            922  F.2d at 889  (citations and footnote  omitted).  Tortora

            had been held  "for more than half a year,"  id., at the time
                                                         ___

            of that decision--longer than  Hurley has been detained here.

            Hurley attempts  to distinguish  Tortora on the  ground that,
                                             _______

            whereas he  is being held due to  risk of flight, Tortora was

            held  because of dangerousness.  Yet he fails to explain, and

            we fail to see, how this distinction makes any difference for

            purposes of a due process analysis.

                 Hurley's second argument is that his continued detention

            will prevent him from  reviewing the tapes and logs  with his

            counsel, thereby violating  the Sixth Amendment.   As a basis

            for revoking the order of detention, this argument falls well

            short.   Hurley, however, has a  right to listen to the tapes

            and  review the  logs in the  company of his  attorney.  See,
                                                                     ___

            e.g.,  Dillon, 938 F.2d at 1417 (noting that appellant was to
            ____   ______

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be    afforded    "reasonable   opportunity"    for   private

            consultations  with his attorney).   If suitable arrangements

            cannot be made  at the institution where  Hurley is currently

            detained,  it may well be  desirable for the  parties and the

            district  court  to  work  together  to  fashion  some  other

            alternative.  See 18 U.S.C.   3142(i) ("The  judicial officer
                          ___

            may, by subsequent order, permit the temporary release of the

            person,  in the custody of a United States marshal or another

            appropriate person,  to the extent that  the judicial officer

            determines such  release to  be necessary for  preparation of

            the  person's defense or for another compelling reason.")  We

            need  not,  however,  address  the  matter  further  at  this

            juncture, as no particular issue in this regard is before us.

The order of detention is affirmed.
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