United States v. Cuellar

United States Court of Appeals
Fifth Circuit
F I L E D
February 22, 2006
Charles R. Fulbruge III
Clerk
In the
United States Court of Appeals
for the Fifth Circuit
_______________
m 05-10065
_______________
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
VERSUS
HUMBERTO FIDEL REGALADO CUELLAR,
Defendant-Appellant.
_________________________
Appeal from the United States District Court
for the Northern District of Texas
______________________________
Before DAVIS, SMITH, and DENNIS,
Circuit Judges.
JERRY E. SMITH, Circuit Judge:
Humberto Cuellar was arrested while trav-
eling toward Mexico with a large sum of cash
hidden in his car. He was convicted of inter-
national money laundering in violation of 18
U.S.C. § 1956(a)(2)(B)(i). Cuellar argues that
the district court improperly admitted the gov-
ernment’s expert testimony. He also contends
that the court should have granted his post-
trial motion for acquittal because the govern-
ment failed to present evidence sufficient to
prove the required elements of the crime be-
yond a reasonable doubt. Because we agree
that the government’s evidence was insuffi-
cient to support a finding of guilt under the
specific statute of conviction, we reverse and

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render a judgment of acquittal.
I.
The following facts were established by the
government at trial: On July 14, 2003, Cuellar
was traveling south toward Mexico on State
Highway 77. He was pulled over by Deputy
Kevin Herbert from the Schleicher County
Sheriff’s office. Because Cuellar spoke no
English, Herbert called State Trooper Danny
Nunez to assist him.
Nunez became suspicious of Cuellar be-
cause he was avoiding eye contact and seemed
very nervous. Cuellar claimed he was on a
three-day business trip despite the fact that he
had no luggage or extra clothing. Nunez no-
ticed a bulge in Cuellar’s pocket, and when
asked about it, Cuellar pulled out a wad of
cash that smelled like marihuana to the offi-
cers. Nunez then asked and received permiss-
ion to search the car and requested that a drug
search dog come to the scene.
The dog alerted on the money in Cuellar’s
pocket and on the back floorboard area of the
car. The officers found a hidden compartment
underneath the floorboard containing $83,000
wrapped in duct tape inside blue sacks and
marked with a Sharpie as to the amounts in
each bundle.
The foregoing facts were established
through the testimony of Herbert, Nunez, and
Deputy Jason Chatham, who handled the drug
dog. The government also offered testimony
from Special Agent Richard Nuckles of U.S.
Immigration and Customs, an expert on drug
trafficking organizations, who testified that
drug operations typically involve the flow of
drugs from Mexico into the United States and
the flow of cash proceeds of drug sales from
the United States back into Mexico. He de-
scribed the usual methods employed by drug
traffickers in transporting drugs and money
across the border. He also indicated that cour-
iers of drug proceeds would almost certainly
know they were involved in illegal activity and
were carrying money.
Nuckles’ description of the typical drug
courier was consistent with the facts concern-
ing Cuellar. Nuckles did not testify regarding
what customarily happens to the drug money
in Mexico other than to say that it is returned
to those in charge of the drug trafficking
operation.
The government’s case consisted solely of
the testimony of the officers and Nuckles.
Cuellar took the stand and testified that he
knew nothing about the money and was re-
turning the car to Acuna, Mexico, at the be-
hest of a shadowy character he identified only
as Mr. Morcia. After all the evidence was pre-
sented, Cuellar moved for a judgment of ac-
quittal, which was denied. The jury found him
guilty. After trial, he filed a motion for judg-
ment of acquittal, alleging that the government
had failed to prove the required elements of
the offense. The district court denied the
motion and sentenced Cuellar.
II.
The denial of a motion for judgment of ac-
quittal is reviewed de novo. United States v.
Delgado, 256 F.3d 264, 273 (5th Cir. 2001).
The verdict will be affirmed if a reasonable
trier of fact could conclude from the evidence
that the elements of the offense were estab-
lished beyond a reasonable doubt. Id. In as-
sessing the sufficiency of the evidence, this
court does not evaluate the weight of the evi-
dence or the credibility of the witnesses but
views the evidence in the light most favorable
to the verdict, drawing all reasonable infer-
ences to support the verdict. Id. at 273-74.

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Cuellar argues that Nuckles’s expert testi-
mony should not have been allowed because
the government failed to provide the defense
with a summary of his expected testimony af-
ter the court ordered it to do so. Cuellar also
contends that parts of Nuckles’s testimony
constituted impermissible drug courier profil-
ing and should have been excluded on that
basis. See United States v. Williams, 957 F.2d
1238, 1241 (5th Cir. 1992). Because the gov-
ernment failed to present sufficient evidence to
support a guilty verdict, we do not reach these
evidentiary issues.
Cuellar argues that we should exclude from
our sufficiency of the evidence analysis any ev-
idence that was improperly admitted. This
argument is unavailing. In reviewing a verdict
for sufficiency of the evidence, we ask whether
a reasonable jury could have returned a guilty
verdict based on the evidence presented to it.1
We do not ask at this stage whether that
evidence was properly admitted, so we review
the sufficiency of the government’s case in
light of all the evidence, including the disputed
expert testimony.
III.
The plain language of the statute of convic-
tion, 18 U.S.C. § 1956(a)(2)(B)(i), which out-
laws international money laundering,2 requires
the government to prove five distinct elements.
First, it must show that the transportation or
attempted transportation of funds was across
U.S. borders. Second, the funds in question
had to be the proceeds of specified unlawful
activity. Third, Cuellar must have known that
the funds represented such proceeds. Fourth,
his transportation of the funds must have been
designed (in whole or in part) to conceal or
disguise the nature, location, source, or con-
trol of the proceeds. Fifth, Cuellar had to
know that such concealment was the design of
his enterprise.
On the first element (the international ele-
ment), the government offered sufficient evi-
dence that Cuellar was attempting to transport
money into Mexico. He admitted as much
when he told the officers he was headed for
Acuna. Although he claimed he did not know
the money was in the car, the jury was free to
disbelieve this testimony, especially given the
inconsistencies in his story.
On the second and third elements, there
1 See United States v. Marshall, 762 F.2d 419,
423 (5th Cir. 1985) (holding defendant not entitled
to have court of appeals disregard inadmissible
evidence in conducting sufficiency of evidence
review).
2 That section provides:
“(a)(2) Whoever transports, transmits, or trans-
fers, or attempts to transport, transmit, or trans-
fer a monetary instrument or funds from a place
(continued...)
2(...continued)
in the United States to or through a place out-
side the United States or to a place in the United
States from or through a place outside the
United StatesSS
(B) knowing that the monetary instrument or
funds involved in the transportation, transmis-
sion, or transfer represent the proceeds of some
form of unlawful activity and knowing that
such transportation, transmission, or transfer is
designed in whole or in partSS
(i) to conceal or disguise the nature, the loca-
tion, the source, the ownership, or the control of
the proceeds of specified unlawful activity . . .
shall be sentenced . . . .

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was sufficient evidence to allow a reasonable
jury to infer that the money was proceeds of
drug trafficking and that Cuellar knew that.
The circumstances surrounding the arrest were
suspicious to say the least, and Cuellar’s prof-
fered explanation for his activities was unim-
pressive. The money smelled of marihuana
and was bundled in a way that is typical of
drug trafficking. The jury was able to infer
from the expert testimony regarding drug traf-
ficking operations that Cuellar’s conduct was
consistent with that of a typical drug money
courier who knows what he is carrying. Based
on this evidence, a reasonable trier of fact
could have concluded that the money hidden in
the car was proceeds of drug trafficking and
that Cuellar knew that.
On the fourth and fifth elements, we ask
whether Cuellar’s transportation of the money
was designed in whole or in part to conceal or
disguise its nature, location, source, ownership
or control and whether Cuellar knew that.3
Based on its statements at trial and in its appel-
late brief, the government apparently thought
it had proven this element merely by showing
that the money was hidden in Cuellar’s car.
Throughout the trial, the government focused
its attention on establishing that the money
was most likely drug proceeds, essentially
overlooking the equally important concealment
prong.
In United States v. Oliniyi-Oke, 199 F.3d
767, 771 (5th Cir. 1999), this court discussed
the concealment prong of the money launder-
ing statute in reversing the conviction of a de-
fendant who used fraudulently-acquired credit
cards to purchase computers.4 We focused on
the underlying purpose or “design” of the al-
leged laundering transaction and considered
the design of the transaction to be the acquisi-
tion of computers. The concealment of the
true source of the money was just part of the
means the defendant employed to achieve this
design.
3 In other words, “the government must prove
that the defendant intended to conceal the nature,
location, source, ownership, or control of the pro-
ceeds of the unlawful activity.” United States v.
Cihak, 137 F.3d 252, 261 (5th Cir. 1998) (emp-
hasis added) (citing United States v. Dobbs, 63
F.3d 391, 397-98 (5th Cir.1995)).
4 The government argues that Oliniyi-Oke is in-
applicable because the court was interpreting
§ 1956(a)(1) rather than § 1956(a)(2)(B)(i). The
government attempts to distinguish the two sections
on the ground that § 1956(a)(1) requires a “finan-
cial transaction” but § 1956(a)(2)(B)(i) proscribes
certain transports, transmissions, and transfers of
funds and nowhere mentions “financial transac-
tions.” The government’s proffered distinction is
irrelevant.
The statutory language focused on by the Olin-
iyi-Oke court is found in the concealment prong of
§ 1956(a)(1). Section 1956(a)(1) and (2)(B)(i) use
identical language to require that the defendant’s
activity be “designed in whole or in part to conceal
or disguise the nature, the location, the source, the
ownership, or the control of the proceeds of speci-
fied unlawful activity.” Differing language else-
where in the two sections has no bearing on the
meaning of their identical concealment prongs.
Precedent directly interpreting the concealment
prong of § 1956(a)(1) is therefore binding on our
interpretation of the same language in § 1956(a)-
(2)(B)(i). See United States v. Beiganowski, 313
F.3d 264, 279 (5th Cir. 2002) (holding that an of-
fense under § 1956(a)(2)(B)(i) is almost identical
to an offense under § 1956(a)(1), with the lone
exception of the international element of § 1956-
(a)(2)(B)(i)). The government’s concern with
whether Cuellar was engaged in a financial trans-
action is therefore misplaced.

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We held that if the defendant’s purchases
were “engaged in for present personal benefit,
and not to create the appearance of legitimate
wealth, they do not violate the concealment
prong of the money laundering statute.” Id.
(citing United States v. Garcia-Emanuel, 14
F.3d 1469, 1474 (10th Cir. 1995) (emphasis
added). Concealment of the money facilitated
the transaction but was not itself the design of
defendant’s activity, so no money laundering
occurred, and the statute was not violated.
“[T]he requirement that the transaction be de-
signed to conceal implies that more than this
trivial motivation to conceal must be proved.”
Id.
The alleged laundering activity is Cuellar’s
transportation of the cash across the border to
an unknown recipient. The underlying pur-
pose of the enterprise, as the government pre-
sented it to the jury, was to get the money to
Mexico. Concealing the money in the hidden
compartment was the means employed to
achieve this, but the concealment itself was not
the “design” of Cuellar’s activity, as the statute
requires; the concealment was merely ancillary
to Cuellar’s design.
Taking hidden cash to Mexico is not money
laundering unless some further design to con-
ceal can be proved. The statute would pro-
hibit taking drug money to Mexico for the pur-
pose of concealing the fact that it is drug
money. The statute does not outlaw conceal-
ing drug money from the police for the pur-
pose of taking it to Mexico.
Thus, the government failed to prove the
necessary design to conceal. Cuellar was not
trying to “create the appearance of legitimate
wealth” by smuggling drug money across the
border. The financial channels through which
the money might have flowed subsequent to
Cuellar’s venture are unknown. It is possible,
even likely, that the money was destined for
some kind of laundering once in Mexico, but
the government provided no evidence to in-
dicate such was the case.
Even if such evidence had been presented,
the government would also have had to show
that Cuellar knew his actions were designed to
help launder the money. There is no evidence,
nor was it alleged, that Cuellar would have had
anything to do with any subsequent launder-
ing.
In summary, under the government’s the-
ory, hiding drug money in one’s car with the
intent to take it across the Mexican border is
international money laundering. At trial, the
government successfully proved the case it set
out to establish. This court’s precedent indi-
cates, however, that much more than that is
required to uphold a conviction under the par-
ticular statute that the government (for what-
ever reason) elected to use, § 1956(a)(2)-
(B)(i).
The government failed to provide sufficient
evidence to show that Cuellar’s activity was
designed “to conceal or disguise the nature,
the location, the source, the ownership, or the
control of the proceeds of specified unlawful
activity.” Armed with a proper understanding
of the statute, no rational trier of fact could
have found Cuellar guilty based on the evi-
dence presented at trial.5
5 This does not necessarily mean that Cuellar
will be free of prosecution. Under United States v.
Dixon, 509 U.S. 688, 696 (1993), he may be tried
for separate offenses arising from the same crimi-
nal transaction so long as “each offense contains an
element not contained in the other.” Thus the
government may try Cuellar again, provided that
(1) the new charge contains an element not found in
§ 1956(a)(2)(B)(i) and (2) § 1956(a)(2)(B)(i)
(continued...)

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The conviction is REVERSED and a judg-
ment of acquittal is RENDERED.
5(...continued)
contains an element not found in the second of-
fense. Without passing judgment on the double
jeopardy implications of any future prosecution, we
note that the government may be able to make a
case against Cuellar for bulk cash smuggling under
31 U.S.C. § 5332(a).

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DAVIS, Circuit Judge, dissenting:
Because I am persuaded that the government proved the concealment
prong of the money laundering offense in this case, I dissent from
majority opinion.
The issue boils down to whether the government produced suffi-
cient evidence to allow the jury to find that the defendant was
knowingly transporting the funds (drug proceeds) under a plan
designed at least in part “to conceal or disguise the nature, the
location, the source, the ownership, or the control of the proceeds
of specified unlawful activity.” 18 U.S.C. § 1956 (a)(2)(B)(i).
The majority opinion concludes, and I agree, that the government
offered sufficient evidence to establish that the money was
proceeds of drug trafficking and that Cuellar knew that. The
government also proved that the defendant knowingly concealed the
money in the vehicle and intended to deliver the funds to Mexico.
Based on the plain language of the statute, once the government
produced evidence that allowed the jury to find these facts, the
concealment element was established.
The jury could have found concealment on several levels. First,
there was an overall plan or design (in which Cuellar was an
integral part) to surreptitiously move cash proceeds of drug sales
from the United States to Mexico. The expert on drug trafficking
organizations testified that this was the standard modus operandi
of such organizations. On another level, this plan in which
Cuellar participated, effectively removed the funds from the

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kingpin’s hands and concealed his ownership and control of the
funds. The removal of the funds and concealment of the owner of
the funds also served to remove incriminating evidence from the
possession of the kingpin and avoided possible government confisca-
tion of the cash. The surreptitious movement of these funds to
Mexico as part of the cycle of the drug trade was, of course,
necessary because unlike a legitimate businessman, the drug kingpin
could not go to the bank, deposit the funds and wire the money to
his supplier in Mexico. The concealed movement of the funds was an
integral part of the business of the drug enterprise. Also, and
at its most basic level, Cuellar’s method of carrying out his
mission described above included hiding or concealing the funds in
his vehicle and surrounding the money with animal hair to conceal
the fund’s location from drug dogs.
Other circuits have found on facts similar to ours that the
government established the concealment prong of the money launder-
ing statute. In United States v. Hurtado, 38 Fed. Appx. 661 (2d
Cir. 2002) (unpublished), Hurtado challenged the sufficiency of the
evidence to support her conviction for international money
laundering. The evidence showed that she, along with two other
adults and three children, were stopped as they crossed the border
from the U.S. to Canada. Upon a search of her minivan, agents
found several bags of luggage containing $540,000. Drug dogs
alerted to two of the bags which contained the largest sums of
money. The government presented testimony of customs agents

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regarding methods used by drug cartels to exchange large quantities
of drugs for cash using couriers and how money was customarily
packaged. The funds in the minivan were packaged in a manner
consistent with their testimony. The record evidence also
reflected that Hurtado lied about her employment and had no
legitimate explanation for the source of the cash or its destina-
tion. Based on this record the court concluded that a rational
jury could find all the essential elements of the money laundering
offense.
In United States v. Carr, 25 F.3d 1194 (3d Cir. 1994), the
following evidence was found sufficient to satisfy the concealment
prong of the statute: before departing on a trip from Philadelphia
to Columbia, Carr received a blue carry-on bag from Gonzalez (the
kingpin of the conspiracy); when asked to declare any monetary
instruments in excess of $10,000, he stated that he had only $4,000
in cash; a search revealed $180,000 in cash hidden in containers in
the bag and $6,000 on Carr’s person; Carr told a highly suspicious,
“if not incredible,” story about the source and destination of the
funds. The facts of our case are not materially different from
those in Hurtado or Carr and in my view satisfy the concealment
element of the international money laundering statute.
U.S. v. Oliniyi-Oke, 199 F.3d 767 (5th Cir. 1999), the case
relied on by the majority, is not inconsistent with this result.
Oliniyi-Oke involved a transaction in which the defendant used a
fraudulently obtained credit card issued in the name of the victim

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to purchase two computers. This court found that the transactions
were engaged in for present personal benefit and not to create the
appearance of legitimate wealth, so they did not satisfy the
concealment prong of the money laundering statute. In other words,
the straightforward use of a credit card to make a purchase does
not satisfy the concealment element of the offense.
We are not dealing with a defendant’s straightforward purchase of
goods with a stolen or fraudulently obtained credit card. The
government established in this case that the defendant purposefully
concealed drug proceeds and was transporting them to Mexico in a
manner consistent with drug trafficking patterns for the region.
Under these facts, it is clear to me that the jury could easily
find that the defendant knew “that such transportation, transmis-
sion, or transfer is designed in whole or in part . . . to conceal
or disguise the nature, the location, the source, the ownership, or
the control of the proceeds of specified unlawful activity” as is
required for conviction under 18 U.S.C. § 1956(a)(2)(B)(i). As set
forth above, the Second and Third Circuits dealing with factual
situations substantially similar to these have found this conceal-
ment element satisfied.
Based on the plain language of the statute and the decisions of
other circuits discussed above, I would affirm Cuellar’s convic-
tion. Accordingly, I respectfully dissent.

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