United States v. Ellen Campbell, A/K/A Ellen Campbell Fremin
1992 WL 247654, 977 F.2d 854, 1992 U.S. App. LEXIS 23805 (1992)
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Rule of Law:
To convict a defendant for money laundering, the government must prove the defendant knew the transaction was designed to conceal illicit funds, not that the defendant personally had the purpose of concealing the funds. This knowledge requirement can be satisfied by evidence of willful blindness, where a defendant deliberately ignores facts that would make the illegal nature of the transaction obvious.
Facts:
- Ellen Campbell, a licensed real estate agent, worked with a client named Mark Lawing to purchase a house.
- Lawing, secretly a drug dealer, presented himself as a legitimate business owner but displayed a lavish lifestyle, including driving Porsches and showing Campbell a briefcase containing $20,000 in cash.
- After agreeing on a price of $182,500, Lawing proposed paying the sellers $60,000 in cash 'under the table' and reducing the official contract price to $122,500.
- Campbell relayed this proposal to the sellers' agent, who secured the sellers' agreement.
- Lawing delivered the $60,000 cash payment in a brown paper grocery bag at the real estate office.
- Campbell provided information for the closing documents, including HUD-1 forms, which falsely reflected the sales price as $122,500.
Procedural Posture:
- Ellen Campbell was tried by a jury in the U.S. District Court for the Western District of North Carolina.
- The jury convicted Campbell on three counts: money laundering, engaging in a transaction in criminally derived property, and causing a false statement to be filed.
- Following the verdict, Campbell moved for a judgment of acquittal.
- The district court granted the motion for judgment of acquittal on the money laundering and criminally derived property counts.
- The district court also conditionally granted Campbell a new trial on those counts should the acquittal be reversed on appeal.
- The United States (appellant) appealed the district court's grant of the judgment of acquittal to the U.S. Court of Appeals for the Fourth Circuit, with Campbell as the appellee.
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Issue:
Does sufficient evidence exist for a rational jury to find a real estate agent guilty of money laundering, based on a theory of willful blindness, when she facilitates a real estate transaction involving a large, under-the-table cash payment and other suspicious circumstances?
Opinions:
Majority - Ervin, Chief Judge
Yes. A rational jury could find the defendant guilty of money laundering. The district court misstated the law by requiring the government to prove the defendant had a 'purpose of concealment.' The statute only requires proof that the defendant had knowledge that the transaction was designed to conceal the proceeds of illegal activity. This knowledge can be inferred from willful blindness. The evidence of Lawing's lifestyle, the highly irregular nature of the transaction involving a large under-the-table cash payment, and a colleague's testimony that Campbell stated the money 'may have been drug money' was sufficient for a jury to conclude Campbell deliberately closed her eyes to what would have been obvious: that the funds were from an illicit source and the transaction was designed to launder them.
Analysis:
This case clarifies the mens rea (mental state) requirement for third-party facilitators in money laundering prosecutions under 18 U.S.C. § 1956. It establishes that the defendant's personal motive, such as earning a commission, is irrelevant; the critical inquiry is their knowledge of the principal's illicit purpose. The court's holding strengthens the willful blindness doctrine in this context, signaling that professionals like real estate agents and lawyers cannot escape liability by consciously avoiding confirmation of suspicious facts. This decision makes it easier for prosecutors to secure convictions against intermediaries who enable financial crimes by looking the other way.
