United States v. Victor Arditti, United States of America v. Guillermo Avila

955 F.2d 331
CourtCourt of Appeals for the Fifth Circuit
DecidedJune 2, 1992
Docket90-8646, 90-8721
StatusPublished
Cited by69 cases

This text of 955 F.2d 331 (United States v. Victor Arditti, United States of America v. Guillermo Avila) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Victor Arditti, United States of America v. Guillermo Avila, 955 F.2d 331 (5th Cir. 1992).

Opinions

JERRY E. SMITH, Circuit Judge:

Guillermo Avila and Victor Arditti were convicted of conspiracy to launder monetary instruments and of the substantive offense. Avila argues that his conduct did not violate the federal monetary instrument laundering statute, that the jury instructions at his trial were inadequate, and that the government entrapped him and engaged in outrageous conduct in the course of its undercover operation. Arditti also challenges the jury instructions and charges entrapment and outrageous conduct, and he claims that in quashing a trial subpoena the district court deprived him of due process. We affirm.

I.

These appeals arise from an Internal Revenue Service (“IRS”) undercover investigation of money-laundering. The defendants were tried separately, but their cases were consolidated on appeal. Because each defendant challenges the conduct of the IRS investigation, we present the facts of the two cases together. We then discuss Avila’s argument that his conduct did not violate the statute, each defendant’s challenges to the jury instructions, the issues of entrapment and outrageous government conduct as they apply to each, and the quashing of Arditti’s subpoena.

II.

In 1988, IRS Special Agent Gary Gall-man began investigating money laundering in El Paso, Texas, using the assumed name of “Gary W. Adams” and portraying himself as a cocaine dealer. Gallman started with information that Gabriel Yanez, who owned a money exchange business, laundered money by handling it to disguise its source. Gallman’s goal was to discover Yanez’s methods and cohorts.

Gallman first contacted Yanez in May 1988, explaining that he wanted Yanez to help him move large amounts of cash offshore, then bring the money back into the United States in usable form, intimating that he and his associates were involved in illegal activity. Gallman and Yanez invented the name “Ricardo Guerra-Battle” and established a Mexican bank account in that name. Yanez twice funneled $100,000 cash through Mexico, arranged for the money to [334]*334be wire-transferred to Gallman’s bank in Dallas, then collected a fee from Gallman.

Yanez next arranged for Gallman to open a Cayman Islands account in the “Adams” and “Guerra” names, using a letter of introduction from an El Paso attorney to a Cayman Islands attorney. Gall-man later asked Yanez to put him in touch with someone who could help him with business in El Paso. In September, Yanez introduced Gallman to Arditti, an El Paso criminal defense lawyer.

During the introductory meeting in September 1988, Gallman told Arditti that he must trust Arditti before he could reveal the nature of his business and explained that Yanez was helping him “get [his money] out and get it back” so that he could use it. Arditti reassured Gallman by mentioning the - attorney-client privilege, his previous work with clients involved in drugs, and his distrustful nature.

Arditti told Gallman that since he was “into that kind of business,” he should fund a war chest in preparation for the day he would need money to get out of jail on bond and hire a lawyer. Gallman explained that he couldn’t spend any of the money “the way it is right now and that he had “to get it out and get it back.” Although Arditti told Gallman that he could not advise him on how to launder any illegal funds, Arditti advised Gallman on structuring transactions to purchase real estate in El Paso without arousing suspicion and assured Gallman that the government would not discover any payments made by Gallman to Arditti.

In October, Yanez channeled another $100,000 of Gallman’s cash to Gallman’s Dallas account after tinkering with the Cayman Islands arrangements. In the meeting discussing the transfer, Gallman told Yanez directly that “he and his group were in the ‘coke business’ and his part was to handle the money they derived from the sales.” Yanez and Gallman seemed to agree that they should follow Arditti’s advice in investing in real estate and stocks by using Mexican cashier’s checks, using the “Guerra” false name, and making purchases in the name of the British Virgin Islands corporation they had opened to facilitate the offshore Cayman Islands account. Gallman asked Yanez to recommend stock or brokerage houses that the corporation could use to invest in the stock market.

In November,1 Yanez told Gallman about his friend Avila, a securities broker in San Antonio for the firm of Prudential-Bache Securities (“Pru-Bache”) who wouldn’t insist on meeting Gallman “or anything like that.” Yanez explained that he frequently referred business to Avila and that the two had a fee-sharing arrangement. When Gallman asked what Yanez had told Avila about him, Yanez said that he portrayed Gallman as a Mexican mining client seeking investments. When Gallman further questioned Yanez about Avila, Yanez said that “he has a lot of clients from Mexico in the same business you are, and he never asks questions.” During this discussion, Gallman signed the brokerage forms provided by Yanez as “Guerra.”

Yanez introduced Gallman and Avila in January 1989 at a hotel in San Antonio. Although Gallman used his undercover name, “Adams,” he signed the client agreement and certificate of foreign status (W-8) as “Guerra.” The W-8 eliminates brokerage house reporting requirements as to the accounts of foreign nationals and, thus, effectively would have prevented the government from knowing that Ricardo Guerra or Gary Adams was transacting business with Pru-Bache. Gallman told Avila that Gallman was both “Adams” and “Guerra” and that this was “untaxed money” from the Mexican mining operation. Additionally, according to the government, Avila knew that Gallman was not a Mexican citizen, yet told Gallman that he would “take whatever you tell me” when asked whether he felt comfortable about the Mexican mining investor story. Further, Avila told Gallman that because client “confiden[335]*335tiality is a must,” he staggered client appointments and entertained at home.

The three arranged for investment funds to come from Gallman through Yanez to Avila. Avila repeated that under law and Pru-Bache policy he could not take cash and that investments of under $10,000 did not need to be reported to the government. In February, Gallman executed new, backdated documents to change the brokerage account to the name of the British Virgin Islands corporation at Avila’s request. As with the first forms, Gallman signed the forms in blank, and Avila completed them.

A few days later in February, Gallman and Avila met again. Gallman plainly told Avila, “I am in the coke business. That’s what I do. Now, you will not ever be involved in that part of it.” Although Gall-man offered Avila the opportunity to back away from the deals because of the source of the funds, Avila responded that Yanez had told him that, as long as Gallman provided the investment funds in check form, there was “[n]o problem as to where that money comes f[rom] or how it was made,” because the corporation, not “Adams,” was Avila’s client. Avila asked Gallman whether he was a law enforcement officer, which Gallman denied.

Gallman purported to have recently collected $15,000, which, the government asserts, Avila admittedly understood were the proceeds from a cocaine deal. Avila, however, maintains that Gallman did not tell Avila that he wanted to violate the law or that he did not want to report the cash.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

United States v. Beaulieu
369 F. Supp. 3d 655 (E.D. Louisiana, 2019)
United States v. Blue
340 F. Supp. 3d 862 (U.S. District Court, 2018)
United States v. Cartagena-Albaladejo
299 F. Supp. 3d 378 (U.S. District Court, 2018)
Hathaway v. State
2017 WY 92 (Wyoming Supreme Court, 2017)
Milstead v. Johnson
2016 SD 56 (South Dakota Supreme Court, 2016)
State of Maine v. Elfido Marroquin-Aldana
2014 ME 47 (Supreme Judicial Court of Maine, 2014)
United States v. Avalos-Martinez
299 F.R.D. 539 (W.D. Texas, 2014)
United States v. Carriles
263 F.R.D. 400 (W.D. Texas, 2009)
Commonwealth v. House
295 S.W.3d 825 (Kentucky Supreme Court, 2009)
United States v. McWilliams
308 F. App'x 806 (Fifth Circuit, 2009)
United States v. Hoeffner
254 F.R.D. 302 (S.D. Texas, 2008)
Commonwealth v. Lam
827 N.E.2d 209 (Massachusetts Supreme Judicial Court, 2005)
United States v. Mauricio Javier Puche
350 F.3d 1137 (Eleventh Circuit, 2003)
United States v. Rodriguez
57 M.J. 765 (Navy-Marine Corps Court of Criminal Appeals, 2002)
United States v. Morris
287 F.3d 985 (Tenth Circuit, 2002)
United States v. Loe
255 F.3d 228 (Fifth Circuit, 2001)

Cite This Page — Counsel Stack

Bluebook (online)
955 F.2d 331, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-victor-arditti-united-states-of-america-v-guillermo-ca5-1992.