United States of America v. Raphael Farrington

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 00-3358
UNITED STATES OF AMERICA
v.
RAPHAEL FARRINGTON,
Appellant
ON APPEAL FROM THE DISTRICT COURT FOR
THE VIRGIN ISLANDS
(D.C. No. 98-cr-00158-2)
District Court Judge: Hon. Thomas K. Moore
Argued: November 14, 2002
Before: SCIRICA, ALITO, and RENDELL, Circuit Judges
(Filed February 4, 2003)
STEPHEN A. BRUSCH (argued)
Brusch Law Firm
International Plaza, Suite 2G
P.O. Box 988
St. Thomas, USVI 00804
Attorney for Appellant
KIM L. CHISHOLM (argued)
Assistant U.S. Attorney
5500 Veterans Drive, Suite 260
Federal Building & US Courthouse
St. Thomas, USVI 00802
Attorney for Appellee
OPINION OF THE COURT
PER CURIAM:
Appellant Raphael Farrington was convicted of bank fraud and money laundering.
On appeal he contends that the District Court misapplied the money-laundering statute,
improperly refused to sever Farrington’s trial from that of a co-defendant, issued faulty

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jury instructions, and erroneously excluded evidence. He also claims ineffective
assistance of counsel. We have considered each argument and see no basis for disturbing
Farrington’s convictions.
I.
Farrington co-owned Cartech, a Virgin Islands used-car dealership that frequently
transported purchased automobiles from the mainland for customers. Elvis David, the
owner of a towing company, approached Terrance Grosvenor, a loan official at Citibank,
purportedly seeking a loan for the purchase of a $21,000 tow truck. Grosvenor referred
David to Farrington. Farrington prepared a Cartech invoice representing the purchase
price of the truck as $45,000, with $17,000 paid. Grosvenor altered the invoice to reflect
$25,000 paid upon determining that Citibank would only approve a $20,000 loan.
Grosvenor thereafter informed David that the bank had approved a $17,000 loan and told
David to see Farrington to receive the funds. Farrington wrote a Chase check to David
for $17,000 and received from Grosvenor a Citibank check in the amount of $20,000
endorsed to Cartech. Farrington deposited the $20,000 check in Cartech’s account. The
Citibank check was dated February 7, 1997, was deposited by Farrington on February 10,
1997, and was credited to Cartech’s account on February 10, 1997. The Chase check was
dated February 10, 1997, and was debited from Cartech’s account on February 11, 1997.
Farrington alleges that when he wrote the Chase check the funds from the Citibank check
were not yet available for withdrawal. The scheme was exposed when Citibank sought to
repossess the truck and discovered that David had never purchased it. All three men were
charged.
On August 27, 1998, Farrington moved to sever his case from David’s and
Grosvenor’s. The court granted the motion. David eventually plea-bargained and
cooperated with the government. After Grosvenor’s trial ended in a mistrial, the court
rejoined his trial with Farrington’s despite another motion to sever. At the joint trial the
court denied Farrington’s motion to introduce evidence that Grosvenor committed
instances of bank fraud other than the one incident charged. The court also declined to
issue a jury instruction requested by Farrington stating that to convict for money
laundering, the jury must find that Farrington knew the check he wrote to David would be
paid by funds from the Citibank check. Farrington was convicted of bank fraud and
money laundering, in violation of 18 U.S.C. 1344 and 1957, on August 19, 1999.
Farrington filed a post-judgment motion for acquittal on the money-laundering charge
pursuant to Rule 29 of the Federal Rules of Criminal Procedure. The court denied the
motion and sentenced him to four months’ jail time, four months’ home detention, three
years of probation, $3,000 in restitution, and $200 in fines.
III.
Farrington claims that the District Court erred in four different respects and that
his trial lawyer provided ineffective assistance. We address each argument in turn.
A.
Our review of a District Court’s disposition of a Rule 29 motion is plenary to the
extent that the appellant raises issues of statutory interpretation, as Farrington does here.
See United States v. Thayer, 201 F.3d 214, 218 19 (3d Cir. 1999). We nevertheless view
the evidence "in the light most favorable to the prosecution" and "draw all reasonable
inferences in favor of the jury’s verdict." United States v. Smith, 294 F.3d 473, 476 (3d
Cir. 2002).
Farrington argues that the District Court erred in denying his motion for a
judgment of acquittal because the government failed to prove the elements of money
laundering as provided in 18 U.S.C. 1957. The statute prohibits "knowingly engag[ing]
or attempt[ing] to engage in a monetary transaction in criminally derived property that is
of a value greater than $10,000 and is derived from specified unlawful activity." 18
U.S.C. 1957(a). "[C]riminally derived property" is defined as "property constituting, or
derived from, proceeds obtained from a criminal offense." Id. 1957(f)(2). As
Farrington observes, this provision is substantially broader than 18 U.S.C. 1956, in that
it aims to criminalize the mere knowing possession of tainted funds and does not require,
for example, the intent to continue a criminal enterprise or to conceal the source of the
funds. Compare 18 U.S.C. 1957 with 18 U.S.C. 1956(a)(1)(A)(i), 1956(a)(1)(B)(i).
To convict a defendant of violating section 1957, the prosecution must prove that "(1) the
defendant engage[d] or attempt[ed] to engage (2) in a monetary transaction (3) in
criminally derived property that is of a value greater than $10,000 (4) knowing that the

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property is derived from unlawful activity, and (5) the property is, in fact, derived from
specified unlawful activity." United States v. Sokolow, 91 F.3d 396, 408 (3d Cir. 1996)
(quoting United States v. Johnson, 971 F.2d 562, 567 n.3 (10th Cir. 1992)).
Farrington first contends that "[u]nder 1957, the government mu[s]t prove that
Mr. Farrington knew that his legitimate Cartech check no. 1136 [$17,000 to David] would
be paid with tainted funds at the moment he wrote it." He claims that because the funds
from the tainted $20,000 check from Citibank to Cartech were not yet available for
withdrawal in the account, the source of the $17,000 was necessarily legitimate money
and therefore cannot serve as the basis for a violation of section 1957. Farrington argues
that the government was required to prove that he "knew that the tainted Citibank check
had been credited to Cartech’s account at the time he wr[o]te check no. 1136" and that he
"knew that there w[ere] not enough legitimate funds in Cartech’s account to cover check
no. 1136." Farrington also argues that section 1957 requires that the defendant already
have obtained the tainted money, and that one does not "obtain" tainted money until it is
credited to his account.
In Sokolow, this Court held that section 1957 does not require the government to
"trace the funds constituting criminal proceeds when they are commingled with funds
obtained from legitimate sources." 91 F.3d at 409; cf. United States v. Moore, 27 F.3d
969, 976 77 (4th Cir. 1994) ("Money is fungible, and when funds obtained from unlawful
activity have been combined with funds from lawful activity into a single asset, the
illicitly acquired funds and the legitimately acquired funds . . . cannot be distinguished
from each other. . . ."). Whether the account also contained $17,000 from legitimate
sources that could cover the check written to David is therefore immaterial. Any debits
from the account are presumed to be tainted up to the amount of $20,000, the value of the
tainted funds credited. See Moore, 27 F.3d at 977. Farrington’s argument that the
government was required to show that he knew that there were not enough legitimate
funds to cover the check is therefore unavailing.
Farrington next argues that the government was required to show that the tainted
Citibank check had been credited to Cartech’s account at the time he wrote the Chase
check. This argument supposes that a "monetary transaction" within the ambit of section
1957 necessarily ends once the check changes hands. This finds support in the statutory
language, which defines "monetary transaction" in part as the exchange of a monetary
instrument. See 18 U.S.C. 1957(f)(1). If, as Farrington alleges, the commingling did
not take place until after the monetary transaction, i.e., until after the exchange, then it
may be inaccurate to describe the funds as "proceeds obtained from a criminal offense,"
18 U.S.C. 1957(f)(2), because the proceeds had not yet been obtained. See Johnson,
971 F.2d at 568 (reviewing dictionary definitions of "obtain" and concluding that "a
violation of 1957 [can] occur[] only after the individual involved in the specified
criminal activity gained possession . . . of the proceeds generated by the criminal
activity").
Because the Court must "draw all reasonable inferences in favor of the jury’s
verdict," Smith, 294 F.3d at 476, however, we must infer that the account was
commingled from the fact that the Chase account was credited with tainted funds on the
same day that Farrington wrote the $17,000 Chase check. Even if Farrington’s
interpretation of section 1957 is accurate, an issue which we do not address, the high
standard of review compels a holding that the government met its burden.
B.
Farrington argues that the District Court was without authority to reconsolidate his
trial with Grosvenor’s sua sponte. He claims the reconsolidation prejudiced him because
(1) the admissibility of Grosvenor’s testimony compelled him to testify in his own
defense, and (2) evidence admissible at the joint trial would not have been admissible
were he tried alone. The District Court’s denial of the motion for severance may be
overturned only if Farrington "demonstrate[s] clear and substantial prejudice resulting in
a manifestly unfair trial." United States v. Thornton, 1 F.3d 149, 153 (3d Cir. 1993).
Farrington correctly argues that the mere fact that the government did not actually
introduce Grosvenor’s testimony implicating him does not bear on whether the possibility
that the government could introduce this testimony caused prejudice. See United States
v. Eufrasio, 935 F.2d 553, 568 (3d Cir. 1991) (holding that the determination of prejudice
is made on the basis of what trial developments were reasonably foreseeable at the
outset). But Farrington is incorrect to conclude that his consequent decision to testify in

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his own defense constitutes prejudice or a violation of the Fifth Amendment. Farrington
was not "compelled" to testify but made a strategic decision, reasoning that if
Grosvenor’s testimony was introduced, he wanted to contradict it on the record. He could
as easily have pursued the alternative approach of preparing to discredit Grosvenor’s
testimony with other evidence or attacks on Grosvenor’s credibility during closing
argument. Indeed, Farrington concedes that the jurors in the first trial disbelieved
Grosvenor’s testimony, and he could have chosen to count on the same impression
obtaining in the retrial. If the jury is able to "compartmentalize the allegedly prejudicial
evidence," no prejudice exists. Id. Consequently, the District Court’s reconsolidation
withstands appellate scrutiny.
C.
Farrington argues that the government was required to prove that he knew his
conduct was unlawful and that he acted willfully and that the District Court erroneously
failed to instruct the jury as such. We review jury instructions not objected to at trial for
plain error. See United States v. Wolfe, 245 F.3d 257, 260 61 (3d Cir. 2001). With
respect to section 1957, Farrington’s argument is foreclosed by Sokolow, which held that
section 1957 does not contain a willfulness requirement and does "not require proof of
knowledge of illegality." 91 F.3d at 408. "’[T]he statutory requirement that the
underlying acts be performed "knowingly" requires only that the act be voluntary and
intentional and not that a person knows that he is breaking the law.’" Id. (quoting United
States v. Zehrbach, 47 F.3d 1252, 1261 (3d Cir. 1995)). The District Court was only
required to instruct on willfulness on the aiding and abetting charge, and it did so,
instructing jurors that:
the defendant may [not] be found guilty as an aider and abettor to the crime
. . . unless you find beyond a reasonable doubt that the defendant was a
participant and not merely a knowing bystander or spectator. In other
words, you may not find the defendant guilty unless you find beyond a
reasonable doubt that [he] willfully participated in its commission.
Willfulness has no further applicability beyond the specific purpose for which the court
provided the instruction.
D.
Farrington contends that the District Court committed reversible error by declining
to admit "reverse 404(b)" evidence that he attempted to offer against Grosvenor. Rule
404(b) of the Federal Rules of Evidence provides, "Evidence of other crimes, wrongs, or
acts . . . may . . . be admissible for . . . purposes[] such as proof of motive, opportunity,
intent, preparation, plan, knowledge, identity, or absence of mistake or accident." Fed. R.
Evid. 404(b). Farrington sought to introduce evidence that Grosvenor had committed
similar frauds at Citibank to support a defense that David and Grosvenor operated without
Farrington’s help. (When a defendant offers exculpatory evidence under Rule 404(b), it
is characterized as "reverse 404(b)" evidence because the provision is more typically used
by prosecutors to implicate a defendant.) We review the District Court’s exclusion of
reverse 404(b) evidence for abuse of discretion. See Quinn v. Consol. Freightways Corp.
of Delaware, 283 F.3d 572, 576 (3d Cir. 2002); see also GE v. Joiner, 522 U.S. 136, 141
(1997).
The government counters that (1) Farrington never actually attempted to introduce
the reverse 404(b) evidence, and (2) the District Court would nevertheless have been
entitled to exclude it because it lacked probative value. If the former contention is true,
the latter point is certainly superfluous. The government claims the court conducted a
hearing in limine on the reverse 404(b) evidence and put off ruling on admissibility until
the evidence was introduced at trial, and Farrington simply neglected to attempt to
introduce it. Later on in the hearing, however, the court ruled, "I’m not going to allow
Counsel to argue in opening statement or bring in evidence . . . relating to other supposed
bad acts of Mr. Grosvenor that he whited out contracts, changed documents, and for other
loan transactions, because it’s not relevant." The court reasoned that "[i]t would require
the Court to get into all kinds of little, mini trials. We would have to then explain how
that was the same thing." Having received this unfavorable ruling Farrington need not
have revisited the issue by attempting to admit evidence the court had already ruled was
excluded, so the government’s first counterpoint lacks merit.
The District Court therefore held that introducing the reverse 404(b) evidence

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implicated the considerations of Rules 401 to 403. Rule 402 provides, "Evidence which
is not relevant is inadmissible," and Rule 401 defines relevant evidence as "all evidence
having a tendency to make the existence of any fact that is of consequence to the
determination of the action more probable or less probable than it would be without the
evidence." Fed. R. Evid. 401 402. Rule 403 permits the court to exclude relevant
evidence "if its probative value is substantially outweighed by the danger of . . . confusion
of the issues, or misleading the jury, or by considerations of undue delay [or] waste of
time." Fed. R. Evid. 403. The court’s concern about "all kinds of little, mini trials"
implicates Rule 403, and the court’s belief that Farrington could not prove that the reverse
404(b) frauds were "the same thing" as the crime charged (and therefore indicative of a
common plan) speaks to the relevance of the proposed evidence as well as its
compatibility with Rule 404(b).
Deference to the trial court is the "hallmark" of abuse-of-discretion review of
decisions bearing on the admissibility of evidence. Joiner, 522 U.S. at 143. Given that
standard of review, the trial court’s determination that the evidence lacked relevance and
would tend to yield confusion and waste time did not constitute an abuse of discretion.
Evidence that Grosvenor committed other frauds without Farrington’s help does not
render it less likely that he received Farrington’s cooperation here. Moreover, since the
general method of the other frauds differs somewhat from the fraud alleged in this case, it
fails to satisfy the common-plan requirement of Rule 404(b). Finally, evidence of other
frauds executed differently could needlessly confuse the jury’s understanding of the
crimes with which Farrington was charged. All of these determinations are reasonable, so
we cannot hold that the District Court abused its discretion.
E.
Farrington argues that his trial lawyer provided ineffective assistance of counsel by
failing to comply with the disclosure requirements regarding expert-witness testimony.
Rule 16 of the Federal Rules of Criminal Procedure requires the proponent of an expert
witness to provide an advance summary of the witness’s intended testimony.
Farrington’s counsel neglected to do so, and although the court gave counsel a second
chance to comply, she did not raise the issue again. We may find that Farrington’s trial
counsel provided ineffective assistance only upon a showing of prejudice and "a
reasonable probability that, but for counsel’s unprofessional errors," Farrington would
have prevailed. Strickland v. Washington, 466 U.S. 668, 687 (1984). The government
argues that because the court ruled the testimony irrelevant without regard to Rule 16, no
prejudice was manifest.
The proposed expert was another automobile dealer who would have testified that
Farrington’s preparation of the allegedly fraudulent invoice was standard practice among
car dealers in the Virgin Islands. After the Rule 16 irregularities precluded his testimony
as an expert, Farrington’s counsel sought to introduce his testimony as a lay witness. The
court ruled: "That’s irrelevant to this issue [of whether Farrington’s invoice
misrepresented information to the bank], so I will not allow him to testify." The court’s
determination of irrelevancy would have been the same had the testimony been offered by
an expert. Rule 402’s relevancy requirement applies no differently to expert testimony
than to lay witnesses. See Daubert v. Merrell Dow Pharms., 509 U.S. 579, 591 (1993);
United States v. Downing, 753 F.2d 1224, 1242 (3d Cir. 1985). The court’s ruling on
relevancy did not constitute an abuse of discretion. Because the trial would have
proceeded similarly even if counsel had followed Rule 16, failure to submit the witness as
an expert does not amount to ineffective assistance.
IV.
Because we find no error warranting reversal and no basis for an ineffective-
assistance-of-counsel claim, we affirm Farrington’s convictions.
TO THE CLERK OF THE COURT:
Kindly file the foregoing Not-Precedential Opinion.

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