Eleventh Circuit Court of Appeals - Published Opinions

Monday, June 15, 2009

Demarest: Yacht dealer money laundering conviction upheld

In U.S. v. Demarest, No. 08-12296 (June 10, 2009), the Court affirmed money-laundering convictions and sentences for a yacht dealer who agreed to sell a yacht for cash to undercover agents posing as narcotics traffickers.
The Court found that the jury reasonably rejected Demarest’s defense that he was intoxicated when he agreed to the deal. Demarest mental efforts "suggest that he was not so drunk that he did not know what was happening."
The Court also found that the jury reasonably rejected the entrapment defense. The evidence overwhelmingly established Demarest’s predisposition. "It is hard to imagine a more enthusiastic money launderer."
The Court rejected Demarest’s argument, based on the Supreme Court’s recent decision U.S. v. Santos, that he did not launder "proceeds" of illegal activity, because the moneys at issue were the "receipts" from the sale of a yacht, not profits. The Court held that because Santos was decided by a plurality of the Court, its narrow holding regarding receipts only applied to gambling operations, not drug trafficking. The Court also found Cuellar v. U.S. inapplicable, because that case involved a design to "conceal" the proceeds of unlawful activity, and Demarest was charged with the intent to "promote" unlawful activity.
Turning to sentencing, the Court rejected Demarest’s double-counting challenge to his sentence, noting that the Sentencing Guidelines provide for a separate enhancement for certain types of money-laundering violations. The Court also found that the six-level enhancement for knowing the funds were the proceeds of the distribution of controlled substances was supported by the record.