USA v. Gianco Sheridan
Filed Nonprecedential Disposition PER CURIAM. AFFIRMED. William J. Bauer, Circuit Judge; Frank H. Easterbrook, Circuit Judge and Michael S. Kanne, Circuit Judge. [6819517-1]  [16-2755]
To be cited only in accordance with Fed. R. App. P. 32.1
United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
Argued January 24, 2017
Decided February 16, 2017
WILLIAM J. BAUER, Circuit Judge
FRANK H. EASTERBROOK, Circuit Judge
MICHAEL S. KANNE, Circuit Judge
UNITED STATES OF AMERICA,
GIANCO F. SHERIDAN, a/k/a GEO
Appeal from the United States District
Court for the Central District of Illinois.
O R D E R
Gianco Sheridan was convicted after a jury trial of money laundering and
conspiring to commit that offense. His cousin was dealing marijuana and, at Sheridan’s
urging, had directed a repeat customer to make payments by depositing currency into
Sheridan’s bank accounts for the cousin’s benefit. Sheridan argues that the government
did not introduce sufficient evidence to prove that (1) he intended to conceal the
transactions, (2) the deposits represented drug proceeds, (3) he knew the deposits were
proceeds of unlawful activity, or (4) the conspiracy’s purpose was to launder money. To
the contrary, the evidence on these points is overwhelming.
Sheridan and his cousin, Quisontro Hart, lived in California. Hart supplied
marijuana to Joel McCalebb in Rock Island, Illinois. Hart would mail to McCalebb
packages of marijuana weighing 1 to 2 pounds, each costing $4,000 to $4,800. In turn
McCalebb would mail currency to Hart or deposit currency in designated bank accounts,
four of them Sheridan’s.
Sheridan was charged with 32 substantive counts of money laundering, each
corresponding to a deposit that McCalebb had made, see 18 U.S.C. § 1956(a)(1)(B)(i), and
conspiring to launder drug proceeds, id. § 1956(h). Hart, who pleaded guilty to
conspiracy to distribute marijuana, testified at Sheridan’s trial that initially McCalebb
was making payments into his Chase account or the Wells Fargo account of
Justin Gregle, Hart’s friend. Hart explained that he wanted McCalebb’s payments split
between two accounts “so no one account would look like it was overly used at a time.”
But Chase became suspicious anyway and closed Hart’s account in the summer of 2013,
and Hart never opened another. Soon after, Sheridan moved in with Hart’s mother, then
Hart, and finally with a friend of Hart (all three in Los Angeles). Hart also used that
friend’s apartment to package marijuana. Sheridan learned about Hart’s arrangement
with Gregle and mentioned that he also had a Wells Fargo account. In exchange for
allowing McCalebb to make deposits into Sheridan’s account, Hart paid Sheridan a
small percentage of each deposit and also gave him marijuana.
Hart and Sheridan reached a “mutual understanding” that Hart’s name could not
be associated with the bank accounts, and over the next year Sheridan opened several
more, beginning with a personal account at Bank of America. Sheridan also opened an
account at U.S. Bank in the name of a phony business, “Soles & Photos,” after McCalebb
told Sheridan and Hart how to get a business license. But after just a week the bank
closed that account for suspicious activity. Sheridan then opened another account at
Bank of America under “Soles & Photos.” Hart testified that Sheridan opened the
business accounts “because of what we were doing with the marijuana.”
Hart did not permit Sheridan to communicate with McCalebb; McCalebb would
text Hart from the Midwest after depositing currency into a branch of Wells Fargo, U.S.
Bank, or Bank of America, then Hart would text Sheridan to confirm his receipt of the
money in his account. After that Sheridan withdrew the money from branches in
California, retaining only his percentage.
Hart told the jury that after Chase had closed his account in 2013 he didn’t open
another bank account in his name to be used for McCalebb’s payments. “I didn’t want to
get in trouble,” he explained, “plus my name was kind of hot with the DEA” because of
a similar drug operation in Alaska. The plan, he said, was “for McCalebb and I to stay off
the radar as much as possible and, therefore, we’ll have longer success in shipping and
receiving marijuana.” Jon Johnson, a sheriff’s deputy with prior federal experience as an
agent with the DEA and IRS Criminal Investigation Division, testified that he had
reviewed records from Sheridan’s bank accounts and then identified each charged
deposit and corresponding withdrawal.
Sheridan moved for a judgment of acquittal at the close of evidence, arguing that
the government had not presented sufficient evidence to support a conviction on any
count. The district court denied his motion. Sheridan’s attorney conceded in closing that
the government had proved he conducted financial transactions “in abundance” but
contested the other elements of money laundering and the underlying conspiracy.
The jury found Sheridan guilty on all counts. He moved for a new trial, contesting
the sufficiency of the evidence, which the court denied. Sheridan was sentenced to
33 months’ imprisonment on each count, to run concurrently.
For all of the counts, Sheridan again concedes on appeal that the government
proved he conducted financial transactions but contests the remaining elements: that he
knew those transactions were designed “to conceal or disguise the nature, the location,
the source, the ownership, or the control of the proceeds of specified unlawful activity”;
that in fact the funds were proceeds of specified unlawful activity; and that he knew the
funds were proceeds of some form of unlawful activity, see 18 U.S.C. § 1956(a)(1)(B)(i);
United States v. Turner, 400 F.3d 491, 496 (7th Cir. 2005).
Sheridan’s main argument is that McCalebb’s deposits and his own withdrawals
did not violate § 1956(a)(1) because, Sheridan says, “the evidence presented by the
Government at trial demonstrated that Sheridan did not ‘conceal or disguise the nature,
the location, the source, the ownership, or the control of the proceeds’ where he
performed simple banking transactions under his own account number, openly and
notoriously.” Instead, Sheridan says, he “merely facilitated the transfer of funds between
McCalebb and Hart.” Sheridan argues that he openly banked under his own name, used
the money remaining in his account (his fee) only for personal transactions, and did not
“clean” the money before giving it to Hart.
But the “concealment” element, see 18 U.S.C. § 1956(a)(1)(B)(i), actually requires
that the defendant know the financial transaction was designed to conceal, not that it
succesfully conceal. Turner, 400 F.3d at 496; United States v. Esterman, 324 F.3d 565, 573
(7th Cir. 2003) (concluding that conviction under § 1956 requires proof of “intent to
disguise or conceal transactions”). Sheridan cites no authority for the proposition that a
poor design to conceal—which is essentially all that he asserts here—is a defense under
§ 1956. And in this case the government presented ample evidence for a rational jury to
infer that Sheridan had allowed his preexisting Wells Fargo account, and specifically
opened new accounts at two other banks, to be used to conceal the money’s relationship
to Hart and McCalebb.
Using a third party to disguise the real owner of funds is evidence of intent to
conceal. Esterman, 324 F.3d at 573. Sheridan’s argument that he banked under his own
name is not only misleading (two of the accounts were opened in the name of a phony
business) but also beside the point, since the money moving through Sheridan’s
accounts belonged to Hart, not Sheridan. Hart testified that the deposits were made to
Sheridan’s account because he and McCalebb wanted to “stay off the radar.” Given that
evidence, as well as the number of bank accounts that Sheridan opened and the fact that
he used them only for Hart’s benefit, it’s inescapable that the charged financial
transactions—the deposits of Hart’s money by McCalebb—were designed to conceal
Hart’s ownership and control of the money. See, e.g., United States v. Baldridge, 559 F.3d
1126, 1141 (10th Cir. 2009) (explaining that intent to conceal ownership of funds can be
inferred from use of third party, with whom defendant has close relationship, to transfer
funds); United States v. Shepard, 396 F.3d 1116, 1122 (10th Cir. 2005) (concluding that
intent to conceal could be inferred from defendant’s deposit of illicit proceeds into
daughter’s account); United States v. Bowman, 235 F.3d 1113, 1116 (8th Cir. 2000)
(depositing cash from robberies into girlfriend’s account showed intent to conceal).
Additionally, a rational jury could conclude that the transactions were designed to
conceal the fact that McCalebb was depositing drug proceeds in Sheridan’s accounts.
See United States v. Hall, 434 F.3d 42, 50–51 (1st Cir. 2006) (noting that § 1956 criminalizes
transactions that conceal the source of drug proceeds “even if the defendant does not
conceal his own identity in the process”).
Sheridan next argues that the government did not prove the currency deposited
into his accounts came from specified unlawful activity, i.e., illegal drug sales, because
only McCalebb could rule out the possibility that he deposited money from a legal
source—and he didn’t testify. But Johnson, the sheriff’s deputy who summarized the
financial transactions, testified that all of McCalebb’s deposits were currency. The jury
knew that McCalebb was selling marijuana; thus, it rationally could conclude that
McCalebb had generated currency from drug sales and was depositing that currency
into Sheridan’s accounts. McCalebb had no other reason to put money into Sheridan’s
accounts. See United States v. Smith, 223 F.3d 554, 577 (7th Cir. 2000) (explaining that jury
could infer that drug dealer’s cash payments had come from drug sales).
Sheridan then argues that the government did not prove he knew the money
came from unlawful activity, because Hart controlled all communication with
McCalebb. But the government presented enough evidence for a rational jury to infer
that Sheridan knew drug money was deposited in his account. See, e.g., United States v.
McBride, 724 F.3d 754, 757 (7th Cir. 2013) (concluding that judge at bench trial could find
that defendant’s girlfriend knew he was dealing drugs and thus that money she
deposited for him had come from drug sales rather than business which, she also knew,
generated insubstantial income). Hart testified that, when he introduced his operation to
Sheridan, he said that Gregle was “a guy who I use to get payment from McCalebb.”
Hart also testified that Sheridan purchased packing supplies, helped package and mail
drugs, and lived in the apartment where Hart prepared shipments. That was enough
information for a rational jury to infer that Sheridan knew Hart was mailing drugs to a
dealer in Illinois who would then deposit drug proceeds in Sheridan’s account.
Finally, Sheridan contests his conviction for conspiracy to launder drug proceeds,
arguing that the government did not prove that the purpose of the conspiracy was to
launder money. But Hart testified that Sheridan joined the conspiracy because he
wanted to make money by letting Hart use his Wells Fargo bank account. Sheridan gave
his account information to Hart based on a “mutual understanding” that Hart couldn’t
use a bank account in his own name because the DEA knew about Hart from a similar
drug enterprise in Alaska. And Hart explained that Sheridan had opened new accounts
“because of what we were doing with the marijuana.” Based on that evidence, a rational
jury readily could conclude that Sheridan joined McCalebb and Hart to “clean” their
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