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United States v. Beltramea

United States Court of Appeals, Eighth Circuit

February 28, 2017

United States of America, Plaintiff- Appellee
v.
Randy Beltramea, Defendant-Appellant

          Submitted: September 20, 2016

         Appeal from United States District Court for the Northern District of Iowa - Cedar Rapids

          Before LOKEN, BEAM, and BENTON, Circuit Judges.

          BEAM, Circuit Judge.

         In 2013, Randy Beltramea pled guilty to eight counts of a sixteen-count indictment, including: Counts 1 and 2, wire fraud in violation of 18 U.S.C. § 1343; Count 3, aggravated identity theft in violation of 18 U.S.C. § 1028(A)(a)(1); Count 4, money laundering in violation of 18 U.S.C. § 1957; Count 7, money laundering in violation of 18 U.S.C. § 1956(a)(1)(A)(ii) and (a)(1)(B)(i); Counts 8 and 12, false statement to a financial institution in violation of 18 U.S.C. § 1014; and Count 16, tax evasion in violation of 26 U.S.C. § 7201. United States v. Beltramea (Beltramea I), 785 F.3d 287, 288 (8th Cir. 2015). The district court[1] sentenced Beltramea to a total term of imprisonment of 111 months and 5 years' supervised release, and additionally ordered the forfeiture of real property pursuant to 18 U.S.C. §§ 981(a)(1)(C) and 982(a)(1), and 28 U.S.C. § 2461(c). Id. at 288-289. Beltramea appealed his sentence and we affirmed the sentence but remanded the forfeiture order for further proceedings. Id. at 291. Upon rehearing, the district court ordered forfeiture of the entirety of Beltramea's Castlerock property (land comprising Parcels A and B of a proposed land development called "Castlerock Estates") pursuant to 18 U.S.C. § 982(a)(1). On appeal for the second time, Beltramea challenges the district court's order forfeiting the property in question. Because we hold that the evidence satisfies the requisite nexus between Beltramea's money-laundering convictions and the entirety of the property at issue, we affirm.

         I. BACKGROUND

         A full recitation of the facts underlying the instant convictions and forfeiture proceeding is set out in Beltramea I, 785 F.3d at 287-89. Relevant here, we highlight the basis for the money-laundering charges (Counts 4 and 7) and the Castlerock property at issue. In the Second Superseding Indictment "Forfeiture Allegations, " the government sought forfeiture of six properties, four of which comprise "Castlerock:" (1) the first tract was the developed portion of Parcel B, (2) the second tract was Outlot A of Parcel B, (3) the third tract was the undeveloped portion (26.33 acres) of Parcel B, and (4) the fourth tract was the undeveloped portion (40.620 acres) of Parcel A.

         In Beltramea I, this court remanded the district court's order forfeiting all of the property listed in the Second Superseding Indictment because the record lacked facts establishing a nexus between certain properties and the criminal offenses for which Beltramea was convicted. Id. at 291. Indeed, at the time of Beltramea I, there had been no fact-finding on the forfeiture issue because the parties had proceeded with the forfeiture based upon Beltramea's alleged consent to the preliminary forfeiture order. Id. In Beltramea I, Beltramea argued to this court that the government wholly failed to establish the required nexus between each listed property sought to be forfeited and a count of conviction and thus the forfeiture of all four tracts was improper. As to Counts 4 and 7, particularly, Beltramea argued that the very fact that the government originally identified two of the parcels in the forfeiture allegations as "undeveloped" necessarily meant that Abode Construction (the construction company that performed work at Castlerock) could not have done work on those parcels and thus, at the very least, there was no nexus between the laundered money and payment to the construction company for work at Castlerock as to those tracts. Beltramea further claimed that because there was no distinction by the government, in the pleadings or otherwise at that point, as to the work performed on the two developed parcels, it was unlikely that Beltramea paid Abode for work performed on Outlot A of Parcel B as well.[2] We reiterated that "[t]he district court had an independent duty to ensure that the required nexus exists" in these forfeiture actions. Because there was no record on the matter, we vacated and remanded the forfeiture order for further proceedings. Id.

         On remand, addressing the forfeiture issue in an evidentiary hearing for the first time, the government abandoned its quest to seek forfeiture of the three other properties originally identified in the forfeiture allegations. Accordingly, the "forfeiture of Castlerock as it relate[d] to the money laundering offenses in Counts 4 and 7 [was] the sole remaining issue." On that issue, the district court found that the "money laundering offenses underlying the government's forfeiture allegations [arose] from [Beltramea's] attempt to develop approximately eighty acres of land into a housing development called Castlerock." Aided by a factual record created upon remand the district court reviewed the evidence submitted by the government in support of forfeiture of the entirety of Castlerock-all four tracts-and held that the government established the requisite nexus between Beltramea's money-laundering convictions, Counts 4 and 7, and the entirety of Castlerock. Beltramea appeals.

         II. DISCUSSION

         "On appeal of a forfeiture order, we review the district court's factual findings for clear error. Whether those facts establish that forfeiture is proper is a mixed question of law and fact that we review de novo." United States v. Hull, 606 F.3d 524, 526-27 (8th Cir. 2010). Beltramea challenges the district court's forfeiture of Castlerock on myriad grounds, including claims that the court exceeded the scope of the Eighth Circuit's mandate, [3] that there is an insufficient connection between the offenses of conviction and the entirety of Castlerock, that the district court erred in forfeiting the entirety of the property because the exact amount of the fraud proceeds used to benefit portions of the property are readily available, as well as various evidentiary challenges.

         The property subject to forfeiture in this action and the forfeiture analysis itself are intertwined issues on these facts. Although the parties primarily focus on how much of Castlerock, or how many tracts or parcels that make up Castlerock, should be forfeited, the analysis under 18 U.S.C. § 982(a)(1), required to succeed in the forfeiture endeavor at the outset, is part and parcel of the query and drives our analysis today. According to § 982(a)(1), the court, in imposing a sentence on a person convicted of a federal money-laundering offense, "shall order that the person forfeit to the United States any property, real or personal, involved in such offense, or any property traceable to such property." 18 U.S.C. § 982(a)(1) (emphasis added). Pursuant to Federal Rule of Criminal Procedure 32.2(b)(1)(A), "[i]f the government seeks forfeiture of specific property, the court must determine whether the government has established the requisite nexus between the property and the offense." Id. (emphasis added). "The government must prove the elements of forfeiture under 18 U.S.C. § 982(a)(1) by a preponderance of the evidence." Beltramea I, 785 F.3d at 290.

         The district court held that the impetus for the fraud and money laundering at issue in the underlying charges was Beltramea's desire to develop Castlerock; that Beltramea specifically reached out to his former investment clients in 2005 seeking funds to use on the Castlerock development. This finding was not clearly erroneous based on the facts presented. It is clear that the deception took place, and the money was laundered, for one purpose-to develop Castlerock-and that Castlerock was central to the entirety of Beltramea's scheme. Beltramea fraudulently misrepresented to his former clients the purpose for which he intended to use their funds, telling the clients he would use the funds to purchase and operate a series of Subway restaurants.

         As more fully set out in Beltramea I, based on Beltramea's misrepresentations, two clients wrote checks in the amount of $50, 000 and $75, 000, respectively, both checks payable to "Angelwing Equity, " which was Beltramea's real estate investment company. These two payments formed the bases for the money-laundering Counts 4 and 7. According to testimony, Beltramea deposited the $50, 000 check in an Angelwing account and then "immediately wrote a $44, 831.10 check to Abode Construction" to pay an invoice for work that Abode performed at Castlerock, spanning both Parcels A and B. This payment provided the basis for the money-laundering charge in Count 4. Count 7 related to Beltramea's use of the $75, 000 check. According to the district court's findings, Beltramea deposited this money into an Angelwing account. Following that deposit, Beltramea made two cash withdrawals and then closed the Angelwing account and opened a bank account in his mother's name using the remaining funds ($65, 472.02 to be exact) from the $75, 000 "investment." Then, using ...


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