United States of America v.  Karen Grey Villarini

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
 UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v. No. 99-4939 
KAREN GREY VILLARINI,
Defendant-Appellant. 
Appeal from the United States District Court
for the Western District of Virginia, at Roanoke.
James C. Turk, District Judge.
(CR-99-35)
Argued: December 4, 2000
Decided: February 1, 2001
Before WILKINS and KING, Circuit Judges, and
William L. GARWOOD, Senior Circuit Judge of the
United States Court of Appeals for the Fifth Circuit,
sitting by designation.
Affirmed in part, vacated in part, and remanded by published opinion.
Judge Wilkins wrote the opinion, in which Judge King and Senior
Judge Garwood joined.
COUNSEL
ARGUED: Paul Graham Beers, GLENN, FELDMAN, DARBY &
GOODLATTE, Roanoke, Virginia, for Appellant. Thomas Ernest
Booth, UNITED STATES DEPARTMENT OF JUSTICE, Washing-

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ton, D.C., for Appellee. ON BRIEF: Robert P. Crouch, Jr., United
States Attorney, Jennie L.M. Waering, Assistant United States Attor-
ney, UNITED STATES DEPARTMENT OF JUSTICE, Washington,
D.C., for Appellee.
OPINION
WILKINS, Circuit Judge:
Karen Grey Villarini appeals her convictions on one count of
embezzlement, see 18 U.S.C.A. § 656 (West 2000), and four counts
of money laundering, see 18 U.S.C.A. § 1956(a)(1)(B)(i) (West
2000), arguing with regard to the money laundering counts that the
evidence was insufficient and that venue was improper in the Western
District of Virginia. She also contends that certain questioning of wit-
nesses by the district court deprived her of a fair trial. Although the
evidence is sufficient to support the money laundering convictions,
we nevertheless vacate them for improper venue. However, because
we conclude that Villarini was not denied a fair trial on the embezzle-
ment charge, we affirm that conviction and remand for resentencing.
I.
The offenses at issue here arise from Villarini’s theft of money
from the Bank of Floyd in Roanoke, Virginia, where she was
employed as head teller. The Bank of Floyd monitored Villarini’s
cash flow by having her prepare a settlement sheet each day itemizing
all the cash she held, including any mutilated cash that she held as
part of her responsibilities as head teller. Bank employee Kit Edwards
also monitored Villarini’s cash flow on a random basis. Edwards
never noted a discrepancy between what Villarini reported as to the
amount of mutilated cash and the actual amount. However, Edwards
admitted that she did not actually count the mutilated cash to deter-
mine whether there was a discrepancy.
In January 1997, Villarini notified the bank that she would be
resigning at the end of February and moving to Florida to live near
her daughter. On her last day of work, Villarini prepared a ticket indi-
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cating that a cash payout of $83,000 had occurred. The next business
day, a bank auditor discovered that Villarini’s cash drawer was short
$83,000, and bank auditors found no justification for the apparent
$83,000 payout. The Government’s theory at trial was that no
$83,000 payout occurred that day, but rather that, over the years, Vil-
larini had embezzled the money and overstated the amount of muti-
lated cash she had under her control.
When Villarini arrived in Florida, she opened savings and checking
accounts at Republic Security Bank. Four transactions with that bank
allegedly involving some of the cash she had embezzled resulted in
the four money laundering counts: On or about March 3, 1997, she
purchased a cashier’s check from Republic Security in the amount of
$2,950 to pay the moving company that shipped her belongings; then,
on March 27, April 11, and April 25, 1997, Villarini deposited
$2,200, $1,000, and $2,000 into her checking account in order to
cover checks for her living expenses.
Prior to trial, Villarini moved to dismiss the money laundering
charges, contending that venue was improper in the Western District
of Virginia. The district court took that motion under advisement. Vil-
larini also moved for a judgment of acquittal on the money laundering
counts at the close of the Government’s case in chief on the basis of
insufficiency of the evidence and lack of venue. The district court
took this motion under advisement as well. Villarini renewed her
motion for judgment of acquittal after the close of all of the evidence,
at which time the court again took the motion under advisement. After
the jury returned verdicts of guilty on all counts, Villarini filed post-
trial motions on various grounds, including improper venue, judicial
bias, and insufficient evidence. The court overruled the motions.
II.
Villarini first contends that the Government’s evidence was insuffi-
cient to support her money laundering convictions. We review a
denial of a motion for a judgment of acquittal de novo. See United
States v. Romer, 148 F.3d 359, 364 (4th Cir. 1998). If the motion is
based on insufficiency of the evidence, the verdict "must be sustained
if there is substantial evidence, taking the view most favorable to the
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Government, to support it." Glasser v. United States, 315 U.S. 60, 80
(1942).
In order to sustain a conviction under 18 U.S.C.A.
§ 1956(a)(1)(B)(i), the Government must prove that:
(1) the defendant conducted or attempted to conduct a finan-
cial transaction having at least a de minimis effect on inter-
state commerce or involving the use of a financial institution
which is engaged in, or the activities of which have at least
a de minimis effect on, interstate commerce; (2) the property
that was the subject of the transaction involved the proceeds
of specified unlawful activity; (3) the defendant knew that
the property involved represented the proceeds of some
form of unlawful activity; and (4) the defendant knew that
the transaction was designed in whole or in part, to conceal
or disguise the nature, the location, the source, the owner-
ship, or the control of the proceeds of the unlawful activity.
United States v. Wilkinson, 137 F.3d 214, 221 (4th Cir. 1998) (citation
omitted). To establish the fourth element, the Government must prove
a specific intent to conceal. See United States v. Gilliam, 975 F.2d
1050, 1056 (4th Cir. 1992). Villarini argues that the Government’s
evidence was insufficient to prove such intent.
We conclude that the evidence here was sufficient to support the
money laundering convictions. Typically, a scheme to deposit a large
amount of cash in relatively small increments would be prosecuted
pursuant to 18 U.S.C.A. § 1956(a)(1)(B)(ii) (West 2000) as designed
to avoid a transaction reporting requirement. See United States v.
Garcia-Emanuel, 14 F.3d 1469, 1478 (10th Cir. 1994). Nevertheless,
the fact that Villarini did not deposit the entire $83,000 in a single
bank transaction, and instead made four transactions, each involving
less than $3,000, at two-to-four-week intervals, gives rise to a reason-
able inference that the transactions were designed to avoid suspicion
or to give the appearance that she had a legitimate cash income
stream. See id. (reversing judgment of acquittal on money laundering
count when defendant’s wife made purchase by depositing ill-gotten
cash in amounts of $7,000, $8,000, and $8,000 into her checking
account and then writing a $20,000 check).
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Villarini argues that if she had been concerned with arousing suspi-
cion, she would not have made any bank deposits and, further, that
the four deposits in controversy were sufficiently open, notorious, and
large to attract the attention of federal investigators. Although these
were appropriate jury arguments, they do not negate the existence of
substantial evidence supporting the verdicts of guilty on the money
laundering counts. We therefore affirm the denial of the motion for
judgment of acquittal.
III.
Villarini next maintains that venue for the money laundering
charges was improper in the Western District of Virginia. We agree.
Article III of the Constitution provides that "[t]he Trial of all
Crimes . . . shall be held in the State where the said Crimes shall have
been committed." U.S. Const. art. III, § 2, cl. 3. The Sixth Amend-
ment reinforces this command, stating that "[i]n all criminal prosecu-
tions, the accused shall enjoy the right to a speedy and public trial,
by an impartial jury of the State and district wherein the crime shall
have been committed." U.S. Const. amend. VI. Finally, Federal Rule
of Criminal Procedure 18 provides that "[e]xcept as otherwise permit-
ted by statute or by these rules, the prosecution shall be had in a dis-
trict in which the offense was committed."
When multiple counts are alleged in an indictment, venue must be
proper on each count. See United States v. Bowens, 224 F.3d 302, 308
(4th Cir. 2000). Venue on a count is proper only in a district in which
an essential conduct element of the offense took place. See id. at 309.
The burden is on the Government to prove venue by a preponderance
of the evidence. See United States v. Barsanti, 943 F.2d 428, 434 (4th
Cir. 1991).
Here, the conduct alleged in the money laundering counts consists
solely of four transactions conducted entirely in Florida. The indict-
ment does not allege that any act in furtherance of the money launder-
ing occurred outside of Florida.
The Government nevertheless contends that 18 U.S.C.A. § 3237(a)
(West 2000) dictates that venue was proper in the Western District of
Virginia. Section 3237(a) provides as follows:
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Except as otherwise expressly provided by enactment of
Congress, any offense against the United States begun in
one district and completed in another, or committed in more
than one district, may be inquired of and prosecuted in any
district in which such offense was begun, continued, or
completed.
Any offense involving the use of . . . transportation in
interstate or foreign commerce . . . is a continuing offense
and, except as otherwise expressly provided by enactment of
Congress, may be inquired of and prosecuted in any district
from, through, or into which such commerce . . . moves.
The Supreme Court construed § 3237(a) in relation to money laun-
dering prosecutions in United States v. Cabrales, 524 U.S. 1 (1998).
There, the defendant was charged in the Western District of Missouri
with laundering the proceeds of drug transactions that occurred in that
district, even though she was not charged with complicity in the drug
sales and all of the alleged laundering transactions occurred in Flor-
ida. See Cabrales, 524 U.S. at 3-4. The Court recognized that several
circuits had held that venue for money laundering offenses is proper
in the district in which the funds were unlawfully generated, even if
the financial transaction giving rise to the laundering charge occurred
wholly within another district. See id. at 5-6 (citing United States v.
Heaps, 39 F.3d 479, 482 (4th Cir. 1994), United States v. Beddow,
957 F.2d 1330, 1335-36 (6th Cir. 1992), United States v. Sax, 39 F.3d
1380, 1390-91 (7th Cir. 1994), and United States v. Angotti, 105 F.3d
539, 544-45 (9th Cir. 1997)). Nevertheless, the Court noted that the
money laundering statute prohibits only the financial transaction and
"not the anterior criminal conduct" that produced the funds that were
laundered. Id. at 7. Accordingly, the Court held that venue in Mis-
souri was improper. See id. at 8. The Court did not decide whether
a defendant who transported criminal proceeds from one district to
another in order to launder them in the latter district could be tried in
the district from which he transported the proceeds. See id.
The Government attempts to distinguish Cabrales by noting that
Villarini, unlike the defendant in Cabrales, was charged with the
crime that generated the laundered proceeds in the district in which
she was tried. The Government relies on Heaps, in which this court
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held that venue for money laundering of drug proceeds was proper in
the district in which the proceeds were criminally generated. See
Heaps, 39 F.3d at 482. Our holding in Heaps, however, was based on
the proposition that the generation of the criminal proceeds that were
eventually laundered is an "essential element[ ]" of the crime of
money laundering, Beddow, 957 F.2d at 1336; see Heaps, 39 F.3d at
482, a proposition that the Supreme Court rejected in Cabrales, cf.
Cabrales, 524 U.S. at 7 (explaining that 18 U.S.C.A.
§ 1956(a)(1)(B)(ii) prohibits only "financial transactions . . . , not the
anterior conduct that yielded the funds allegedly laundered"); United
States v. Williams, 155 F.3d 418, 421 (4th Cir. 1998) (holding that a
decision by this court does not constitute binding precedent when the
decision has been clearly undermined by a more recent Supreme
Court decision).
The abrogation of Heaps is further established by United States v.
Rodriguez-Moreno, 526 U.S. 275 (1999). There, the defendant was
charged with violating 18 U.S.C.A. § 924(c)(1) (West 2000), which
prohibits using or carrying a firearm "during and in relation to any
crime of violence." The defendant was charged with kidnaping an
individual in Texas and then moving him to New Jersey and then to
Maryland, where the defendant obtained a gun that he used to threaten
the victim. See Rodriguez-Moreno, 526 U.S. at 276-77. The Supreme
Court held that venue was proper in the District of New Jersey on the
§ 924(c)(1) charge because the underlying crime of violence was an
"essential conduct element[ ]" of the § 924(c)(1) offense. Id. at 280.
The Court distinguished Cabrales by observing that in Cabrales, the
"existence of criminally generated proceeds" was only a "circum-
stance element" of money laundering in that it was established by
proof of a crime that preceded the money laundering conduct. Id. at
280 n.4. Accordingly, both Cabrales and Rodriguez-Moreno clearly
establish that the mere fact that proceeds were criminally generated
in a particular district is not sufficient, standing alone, to establish
proper venue in that district for a charge of laundering the money.1
1The Government maintains that Heaps is still good law after Cabrales
because Heaps was based on more than a conclusion that procuring the
money illegally is an element of money laundering. Specifically, the
Government asserts that the panel in Heaps "emphasized that the defen-
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The Government next argues that Cabrales is not controlling here
because Villarini, again unlike the defendant in Cabrales, was
charged with transporting the criminally generated funds from the dis-
trict in which she was tried. Even assuming, however, that the indict-
ment may be read as implicitly alleging that Villarini transported the
money from Virginia to Florida,2 it certainly contains no allegation
that such transportation was part of a scheme to launder the money.
Accordingly, Cabrales cannot be distinguished on this basis either.
The Government also relies upon United States v. Solan, 792 F.
Supp. 99 (M.D. Fla. 1992), aff’d, 100 F.3d 969 (11th Cir. 1996)
(unpublished table decision), for the proposition that Villarini’s
money laundering offenses were continuing offenses under § 3237(a)
because they were "offense[s] involving . . . transportation in inter-
state . . . commerce." 18 U.S.C.A. § 3237(a). In Solan, the district
court ruled that the crime of delivery of a package containing firearms
to a contract carrier, see 18 U.S.C.A. § 922(e) (West 2000), involves
transportation in interstate commerce because transportation in inter-
state commerce is a "circumstance" of the offense: One element of the
offense is that the delivery was made for the purpose of transporting
the package in interstate or foreign commerce. Solan, 792 F. Supp. at
100. Even assuming that Solan was correctly decided, it is distin-
guishable because, unlike the crime charged in Solan, money launder-
ing does not include transportation in interstate commerce as a
dant was also charged with drug trafficking in the Eastern District of Vir-
ginia and that the laundered money came from drug proceeds." Brief for
the United States at 20 (citing Heaps, 39 F.3d at 482-83). Although the
Government is correct that this court emphasized those factors, the dis-
cussion of those factors was not related to the question of whether the
money laundering was a continuing offense. Rather, it concerned the dis-
tinct issue of whether the district court abused its discretion, especially
regarding some conspiracy counts, in not concluding that convenience
necessitated transferring the case to a different district pursuant to Fed-
eral Rule of Criminal Procedure 21(b). See Heaps, 39 F.3d at 483.
2The introductory section of the indictment, which is incorporated into
each count of the indictment, charges that Villarini moved from Virginia
to Florida. However, the indictment does not allege how the stolen
money was transported from Virginia to Florida or who transported it
there.
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"circumstance." Furthermore, as we noted previously, the indictment
contained no allegation that the funds that were laundered were trans-
ported from Virginia to Florida in furtherance of a money laundering
scheme.
For all of these reasons, we hold that Cabrales controls the result
here. By any measure, the Government did not charge Villarini with
money laundering offenses that began in Virginia or involved trans-
portation in interstate commerce. Accordingly, venue on the money
laundering counts was improper in the Western District of Virginia,
and we therefore vacate the money laundering convictions.
IV.
Villarini finally maintains that the district court asked improper
questions of Government witnesses, thereby depriving her of a fair
trial. We conclude that even if any of the challenged questions were
improper, any prejudice to Villarini was cured by the instructions of
the district court.
During Edwards’ testimony, after she admitted that she did not
count Villarini’s mutilated cash or even compare the thickness of the
stack of mutilated cash to the amount Villarini reported as being in
the stack, the district court asked of Edwards, "You just weren’t the
best auditor in the world, were you?" J.A. 125. Later during Edwards’
testimony, the court asked, "Would it be fair to say that you, you
know, you were a small group and everybody trusted everybody
else?" Id. at 142.
Additionally, Villarini’s counsel asked Wanda Gardner, an internal
auditor of the Bank of Floyd, if Edwards was dishonest by virtue of
her practice of signing off on Villarini’s statement sheet without actu-
ally counting the mutilated cash. Gardner answered affirmatively. The
district court then asked Gardner, "Do you agree, I mean, as far as
that statement is concerned, that neither one of them [Villarini and
Edwards] were honest?"3 Id. at 151. Gardner again responded affirma-
tively. Villarini’s objection that the question implied that she was dis-
honest was overruled by the district court.
3Villarini was to have observed Edwards’ audits.
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During the closing charge, the district court instructed the jury that
it "should not infer anything whatsoever from any questions that I
might have asked any of the witnesses in this case." Id. at 217. The
court further instructed the jury that it should not speculate concern-
ing the opinion of the court regarding any part of the case and
reminded the jury that it was the sole trier of fact.
Villarini claims that the district court by its questions endorsed the
Government’s theory of the case by implying that she was not honest
and that she took advantage of Edwards’ incomplete audits and the
trusting nature of the organization. Villarini further claims that the
questions cast a shadow on her defense that it was Edwards who
embezzled the money. According to Villarini, her strongest defense
against the charges was Edwards’ audits showing that what Villarini
reported on hand as mutilated cash was actually an accurate number.
Rule 614(b) of the Federal Rules of Evidence permits a district
court to interrogate witnesses. However, the court should not give the
appearance of partiality or undermine the legitimate efforts of any of
the parties to present a case. See United States v. Wilson, 118 F.3d
228, 237 (4th Cir. 1997). The conduct of a court in questioning wit-
nesses is reviewed for abuse of discretion. See United States v. See-
right, 978 F.2d 842, 847 (4th Cir. 1992). A new trial is required only
if the resulting prejudice was so great "that it denied any or all the
appellants a fair, as distinguished from a perfect, trial." United States
v. Parodi, 703 F.2d 768, 776 (4th Cir. 1983) (internal quotation marks
omitted).
We need not decide whether the questions at issue were improper
because, even if they were, any prejudice suffered by Villarini as a
result of the three questions over the course of the four-day trial was
insufficient to deny Villarini a fair trial. Cf. id. (holding that upon
review of the entire trial, two challenged comments made by the court
did not support an inference that the court was unfairly biased against
the defendant). Moreover, any prejudice was cured by the instruction
that the court was the sole trier of fact, and that the jury should neither
infer anything from the questions of the court nor consider whether
the court had an opinion about the case. See Bell v. Evatt, 72 F.3d
421, 434-35 (4th Cir. 1995); United States v. Billups, 692 F.2d 320,
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327 (4th Cir. 1982). Accordingly, the district court did not err in
denying Villarini’s new trial motion.
V.
In sum, we conclude that the Government’s evidence was sufficient
to support the money laundering convictions, but we nonetheless
vacate those convictions because venue was improper. We also affirm
Villarini’s embezzlement conviction, concluding that questioning by
the district court did not deprive her of a fair trial. Accordingly, we
remand for resentencing.
AFFIRMED IN PART, VACATED IN PART,
AND REMANDED
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