United States v. Blair, No. 10-4478

Decided: Sept. 21, 2011

Walter Blair, an attorney in Maryland, laundered money for his client, Elizabeth Nicely Simpson, who had taken possession of substantial sums of drug proceeds originally belonging to dealer and distributor Anthony Rankine. Blair funneled the money through various real estate investments and legal fees for himself and other attorneys for Nicely and her associates. Blair also sought and received pro hac vice admission for the Eastern District of Virginia to defend one of Nicely’s associates by asserting he had no disciplinary actions or reprimands against him; this turned out to be untrue. He was convicted by the District of Maryland for money laundering, witness tampering, obstructing justice, making a false statement, and failure to file tax returns. He appealed his convictions for laundering and obstruction of justice, claiming insufficient evidence to sustain the convictions.

Blair’s conviction for money laundering under was affirmed. The charge requires a showing that “(1) the defendant conducted a financial transaction affecting interstate commerce; (2) ‘the transaction involved the proceeds of specified unlawful activity’; (3) the defendant knew that the property involved was derived from unlawful activity; and (4) ‘the defendant knew that the transaction was designed in whole or part, to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of the unlawful activity.’” The court found that Blair engaged in a financial transaction with the intent to conceal the true nature of the proceeds. Also, his convictions for aiding and abetting Nicely were affirmed because his assistance with the withdrawal and investment of laundered funds satisfied the statutory requirements of a “transaction.”

The obstruction claim was reversed, however, because the state did not show a nexus between Blair’s false statements to the Virginia bar and an impediment to justice in the trial of Nicely’s associate.

Blair also appealed the district court’s failure to sever his charges for failure to file tax returns and hold a separate trial for them. Blair failed to file returns for 2003 and 2002. The court found that there was a sufficient connection between the 2003 return and the money laundering charges (the acts of which occurred in 2003) and that, even if joining the 2002 claims with the trial was error, the error was harmless because the court provided a sufficient mitigating instruction to the jury, reminding it to evaluate each charge based on the evidence.

Finally, Blair appealed his conviction under 18 U.S.C. § 1957 for engaging in a monetary transaction with illegally derived property greater than $10,000. Blair argued that he should have fallen under an exception to the statute because the money was used to secure legal counsel for Nicely and her associates. The court rejected the argument and affirmed the conviction because the exception is tied to the Sixth Amendment, a personal right, which does not encapsulate spending someone else’s money—the drug money was forfeitable to the government—to provide counsel for someone else. The court did not want to invite the possibility of crime lords using criminal funds to provide counsel for their underlings.

Chief Judge Traxler dissented only as to Section IV of the opinion (the § 1957 conviction). The statute, Judge Traxler argued, protects the Sixth Amendment right to secure counsel; nowhere does it say that it must be for that person’s own counsel. Also, while the Supreme Court has held that criminally-obtained funds are subject to forfeiture, there is no reason to assume that it is in itself illegal to use those funds to obtain criminal defense counsel—such was the holding of the Eleventh Circuit when analyzing this same exception. In sum, the exception to “monetary transaction” under § 1957 that excludes “any transaction necessary to preserve a person’s right to representation as guaranteed by the sixth amendment to the Constitution,” centers on the constitutional right to representation, not constitutionally-protected transactions. The right to counsel, not the source of the money, is the key portion of the exception and therefore Blair did not violate the statute by using Nicely’s criminal proceeds to secure legal representation.

Full Opinion

-C. Alexander Cable

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