United States v. McNab

2001 WL 34611250 (11th Cir.)

United States Court of Appeals, Eleventh Circuit.

UNITED STATES OF AMERICA, Plaintiff-Appellee, v. David Henson MCNAB, Defendant-Appellant.

No. 01-15148.

November 28, 2001.

ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF ALABAMA NO. 00-00079(1)-RV

Brief of Defendant-Appellant David Henson Mcnab

Patrick H. Sims, Cabaniss, Johnston, Gardner, Dumas & O'Neal, P.O. Box 2906, Mobile, al 36652, Telephone: 251.433.6961, Facsmile: 251.415.7350, J.Patrick Courtney, III, P.O. Box 2205, Mobile, AL 36652-2205, Telephone: 251.694.1001, Facsimile: 251.433.3752

William M. Watts, Hudson & Watts, P.O. Box 989, Mobile, AL 36601, Telephone: 251.432.7200, Facsimile: 251.432.0073, Donald M. Briskman, Briskman & Binion, P.O.Box 43, Mobile, AL 36601, Telephone: 251.433.7600, Facsimile: 251.433.4485

FNAttorneys for Appellant

*v TABLE OF CONTENTS

TABLE OF AUTHORITIES ... vii

STATEMENT OF JURISDICTION ... x

A. Subject Matter Jurisdiction ... x

B. Appellate Jurisdiction ... x

STATEMENT REGARDING ORAL ARGUMENT ... x

STATEMENT REGARDING ADOPTION OF BRIEFS OF OTHER PARTIES ... x

CERTIFICATE OF TYPE SIZE AND STYLE ... xi

STATEMENT OF THE ISSUES ... 1

STATEMENT OF THE CASE ... 2

A. Course of Proceedings ... 2

B. Statement of the Facts ... 6

C. Standard of Review ... 10

SUMMARY OF THE ARGUMENT ... 12

LEGAL ARGUMENT ... 16

I. The Government Failed to Carry Its Burden That McNab Violated any Valid Laws of Honduras ... 16

A. Resolution 030-95 Is An Invalid Law of No Force or Effect ... 18

B. Regulation 0008-93 was Repealed and is not a Wildlife Protection Law ... 26

1. Regulation 008-93 was repealed in 1995 ... 26

2. Regulation 008-93 is not law regulating the taking, possessing, *vi transportation or sale of wildlife under the Lacey Act ... 30

3. The wrongful conviction under 008-93 substantially affects McNab's sentence ... 32

C. Article 70(3) of The Fishing Law of 1959 was Repealed ... 33

D. The Indictment was Constructively Amended to Charge a Violation of Article 30 of The Fishing Law of 1959 ... 37

E. The Evidence was Insufficient Regarding the "Reporting" Violation - Article 35 of The Fishing Law ... 40

II McNab's Constitutional Right to a Unanimous Verdict was Violated by the Failure to Charge the Jury That They Must Unanimously Agree on Which Honduran Law He Violated ... 41

III The Lacey Act Only Prohibits Conduct Violative of Foreign "Law" Not Foreign "Regulation" ... 44

IV The District Court Committed Prejudicial Error in Prohibiting McNab from Presenting Evidence to Show Lack of "Knowing" Violations of Law ... 50

V Convictions Under the Money Laundering Charges Are Due to be Reversed ... 52

A. The Court Failed to Charge the Jury on the Necessary Elements of a Section 1956 (a)(1)(A)(i) Violation ... 53

B. No 1956 (a)(1)(A)(i) Violation was proved ... 55

C. No valid Section 1957 charge was given ... 57

CONCLUSION ... 60

CERTIFICATE OF COMPLIANCE ... 60

ADDENDUM ... 61

*vii TABLE OF AUTHORITIES

CASES

Adams v. Murphy, 653 F.2d 224 (5th Cir. 1981), cert. denied, 455 U.S. 920 (1982) ... 17

Aerolineas Argentinas v. United States, 77 F.3d 1564, 1575 (Fed. Cir. 1996) ... 29

Alanis-Bustamante v. Reno, 201 F.3d 1303, 1311 (11th Cir. 2000) ... 49

Baggett v. First National Bank of Gainsville, 117 F.3d 1342, 1350 (11th Cir. 1997) ... 48

Bates v. United States, 522 U.S. 23, 30, 139 L.ed.2d 215, 222 (1997) ... 47

Bell v. State of Md., 378 U.S. 226, 230 (1964) ... 10

Circuit City Stores. Inc. v. Adams, 532 U.S. 105, 121 S. Ct. 1302, 1308 (2001) ... 48

Cleveland v. United States, 531 U.S. 12, 121 S.Ct. 365, 148 L.ed.2d 221, 233 (2000) ... 49

Crandon v. United States, 494 U.S. 152, 108 L:ed.2d 132 (1990) ... 49

Fiore v. White, 531 U.S. 225, 121 S.Ct. 712, 148 L.ed. 2d 629 (2001) ... 17

Griffin v. United States, 502 U.S. 46 (1991) ... 17

McBoyle v. United States, 283 U.S. 25, 27, 51 S. Ct. 340, 75 L.ed. 816 (1931) ... 44

McDermott International, Inc. v. Wilander, 498 U.S. 337, 342, 111 S.Ct. 807, 112 L.ed.2d 866, 874 (1991) ... 47

Morissette v. United States, 342 U.S. 246, 72 S.Ct. 240, 96 L.ed. 288 (1952) ... 47

Ratzlaf v. United States, 510 U.S. 135, 114, S.Ct. 655, 126 L.ed 2d 615 (1994) ... 47, 48

Richardson v. United States, 526 U.S. 813, 119 S. Ct. 1707, 143 L.ed.2d 985 (1999) ... 41, 43

*viii R. Mayer of Atlanta, Inc. v. City of Atlanta, 158 F.3d 538, 545 (11th Cir. 1998) ... 47

Seguros Del Estado, S.A. v. Scientific Games, Inc., 262 F.3d 1164, 1171 (11th Cir. 2001) ... 10

United States v. Adkinson, 135 F.3d 1363, 1377-78 (11th Cir. 1998) ... 41, 43

United States v. Behety, 32 F.3d 503 (11th Cir. 1994), cert. denied ... 39

United States v. Brown, 186 F.3d 661 (5th Cir. 1999) ... 55

United States v. Christo, 129 F.3d 578 (11th Cir. 1997) ... 58

United States v. Fortier, 342 U.S. 160, 72 S. Ct. 189, 96 L.ed. 179 (1951) ... 29

United States v. Gipson, 553 F.2d 453 (5th Cir. 1977) ... 42

United States v. Gregg, 179 F.3d 1312 (11th Cir. 1999) ... 59

United States v. Grigsby, 111 F.3d 806 (11th Cir. 1997) ... 52

United States v. Heaps, 39 F.3d 479 (4th Cir. 1994) ... 59

United States v. Hunerlach, 197 F.3d 1059 (11th Cir. 1999) ... 11

United States v. Johnson, 971 F.2d 562 (10th Cir. 1992) ... 59

United States v. Lee, 937 F.2d 1388 (9th Cir. 1991) ... 49

United States v. Miller, 22 F.3d 1075 (11th Cir. 1994) ... 53, 54, 55

United States v. Molt, 599 F.2d 1217 (3rd Cir.1979) ...

United States v. Molt, 452 F. Supp. 1200, 1202 (E.D. Pa. 1978) ... 48

*ixUnited States v. Nguyen, 255 F.3d 1335, 1346 (11th Cir. 2001) ... 10

United States v. Olaniyi-Oke, 199 F.3d 767 (5th Cir. 1999) ... 57

United States v. Richardson, 233 F.3d 1285, 1292 (11th Cir. 2000) ... 11

United States v. Shotts, 145 F.3d 1289 (11th Cir. 1998) ... 17

United States v. Sohappy, 770 F.2d 816, 823 (9th Cir. 1985), cert. denied, 477 U.S. 906, 106 S.Ct. 3278, 91L.Bd. 568 (1986) ... 17

United States v. Thomas, 242 F.3d 1028, 1031 (11th Cir. 2001), cert. denied ... 11

U.S. STATUTES

16 U.S.C. § 3371 (d), 3372(a)(2)(A), 3373 (a)(1), (d)(1) ... vii, 2, 44, 45

18 U.S.C. §§ 1956 (a)(1)(A)(i), (h) and 195 and 1957 ... 2, 4, 5, 15, 53, 54, 55, 56, 57

18 U.S.C. § 545 ... 2

18 U.S.C. § 3231 ... vii

19 U.S.C. § 1527 ... 48

28 U.S.C. § 1291 ... vii

Note: Table of Authorities page numbers missing in original document

*x STATEMENT OF JURISDICTION

A. Subject Matter Jurisdiction

The United States District Court had subject matter jurisdiction pursuant to 18 U.S.C. § 3231.

B. Appellate Jurisdiction.

Pursuant to 28 U.S.C. § 1291, this Court has jurisdiction to hear this appeal from the District Court's entry of final judgment.

TATEMENT REGARDING ORAL ARGUMENT

Appellant David Henson McNab submits that oral argument is warranted in this case due to the lack of Eleventh Circuit precedent as to the critical determinations of Honduran law and their applicability to Appellant under the Lacey Act, 16 U.S.C. § 3371 et seq. Accordingly, oral argument is merited in this case in order to resolve these fundamental issues of law.

STATEMENT REGARDING ADOPTION OF BRIEFS OF OTHER PARTIES

Appellant David Henson McNab, pursuant to FRAP 28 (i), adopts by reference the arguments and citations of authority in Appellants Huang's, S'choenwetter's and Blandford's briefs that relate to the District Court's interpretation and application of Honduran Law, the retroactive effect of the changes in Honduran law to Mr. McNab's convictions, and the sufficiency of the evidence to establish that certain Honduran resolutions relating *xi to the processing and packaging of lobster were violated by Appellant.

*1 STATEMENT OF THE ISSUES

A. Whether the district court erred in determining the law of Honduras.

B. Whether the district court unconstitutionally amended the indictment in charging the jury on the law of Honduras.

C. Whether the district court erred in deciding that the Lacey Act incorporates foreign non-statutory rules of conduct.

D. Whether violation of a foreign hygiene regulation, not associated with protection of wildlife, will support a Lacey Act conviction.

E. Whether the Court improperly excluded evidence from which the jury could conclude that McNab lacked the required mens rea.

F. Whether the district court erroneously denied defendant's motion for judgment of acquittal on the money laundering charges.

G. Whether the instructions and verdict forms denied defendant's constitutional right to a unanimous verdict.

*2 STATEMENT OF THE CASE

This is a criminal appeal. Defendant David Henson McNab was sentenced to eight years in custody because of his sale to United States buyers of lobsters caught by his fishing operation in Honduras. At the heart of the Government's case are alleged violations of the "law of Honduras." The claimed Honduran violations are predicate offenses for an alleged violation of the Lacey Act (16 U.S.C. § 3372). The Government then asserted that because the lobster were imported in violation of the Lacey Act, they were imported in violation of the Smuggling Act (18 U.S.C. § 545). McNab was paid for the lobster shipments by the American buyers. The Government charged that the payments into McNab's company's bank account in AmSouth Bank in Mobile, and the subsequent use of those funds, constituted money laundering (18 U.S.C. §§ 1956 and 1957).- The prosecution fails because the Court wrongly determined, and wrongly charged the jury regarding, the underlying Honduran law. Since those violations are the foundation of the entire charge tower, none of the charges withstand review.

A. Course of Proceedings. An Indictment was returned against McNab and three others in the Southern District of Alabama. (Rl-11). That Indictment was superseded. (Rl-121). The Government filed a motion for determination of foreign law *3 (Rl-46) and several supplements, and the Court held a three-day hearing on those issues. (R19, 20, 21).

While the foreign law hearing was underway, the Government filed a second superseding Indictment. (R3-183). All charges against McNab in the second superseding Indictment derive from his sale of lobsters and the receipt or use of the monies paid for the lobsters.

Count One charged a four-object conspiracy among all defendants. One of the claimed objects were

(a) to knowingly import lobsters contrary to the Lacey Act because the lobsters were taken and sold in violation of the laws and regulations of Honduras;

(b) to engage in domestic transactions involving the lobsters;

(d) to knowingly use the proceeds of the sale of the lobster with the intent to violate the Smuggling Act, in violation of the "promotion" provisions of the Money Laundering Act.

Counts 2 through 6 charge McNab with violating the Smuggling Act by bringing lobsters into the United States in violation of the Lacey Act. These allegations (R3-183-pg. 25) contain the details of most of the claimed Honduran law violations.

*4 Counts 7 through 12 allege similar violations of the Honduran law/Lacey Act/Smuggling Act sequence.

McNab is not charged in Counts 13 through 27.

Counts 28 to 39 relate to payments made into McNab's company's bank account at AmSouth in Mobile and allege that the transfers into the account violated one of the Money Laundering statutes, 18 U.S.C. § 1957.

Counts 40 through 42 allege further violations of the Smuggling/Section 1957 sequence by McNab's spending of some of the deposited funds for a boat and an automobile.

Count 43 alleges a continuing conspiracy by McNab and co-defendant Blandford to engage in monetary transactions in violation of § 1957, with the conspiracy said to violate 18 U.S.C. § 1956(h).

The Government filed a motion in limine seeking to limit substantially the evidence McNab could adduce (R3-204) which the Court granted in substantial part at oral argument. (R23-34 to 49). The Court's ruling, in effect, barred McNab from showing the many lobster shipments from Honduras to Bayou La Batre had been inspected by the Honduran fishing inspectors, had cleared Honduran customs after being reported as bagged frozen lobster for export, and that the Honduran officials had "no problem" with issues of compliance. The Court's ruling also prohibited McNab *5 from even suggesting that Honduran law was or was believed to be different from that determined by the District Court.

The jury was selected on October 2, 2000 and the trial occurred over ten days between October 16 and October 27, 2000. At the conclusion of the Government's evidence (R31-1301) and of all evidence, McNab made a motion for judgment of acquittal. (R32-1415).

The jury deliberated for three days and returned a verdict: against McNab on all counts.

After the trial and before sentencing, McNab filed a motion to dismiss all counts that derived from violations of Honduran "Regulations" or "Resolutions" because such violations are not predicate offenses under the Lacey Act. (R5- 300). This motion was denied. (R5-328).

Between trial and sentencing McNab filed three notices regarding developments in the law of Honduras (R5-324, 325, 326) and, based on those developments, a motion to dismiss. (R5-336). This was denied. (R6-398).

The sentence calculation used as the highest offense the conspiracy to violate 18 U.S.C. § 1956(a) (1) (A) (i). The Court also charged McNab with every dollar received for all of the lobster sent to Bayou La Batre (not just the alleged undersized lobster which were substantially less than 10 percent of the total), and sentenced.him to 97 months in prison. (R6-396).

*6 The District Court announced at several points that because of the complexity and uncertainty of the Court's Honduran law determinations, it would leave all defendants free pending appeal. (R23-16). The Court did so at sentencing. The United States filed an appeal of this Order as to McNab (but not as to the American co-defendants) and a motion panel of this Court reversed and ordered McNab incarcerated. (R6-392). He has been jailed since August 23, 2001.

McNab recently filed with this Court notice of additional developments regarding the Honduran law issues.

B. Statement of the Facts. David Henson McNab is a native of Roatan, Bay Islands, Honduras. His family has, throughout his life, been engaged in the fishing business there. The business has expanded over the years and at the time of trial operated approximately 28 lobster boats in Caribbean waters north and east of Honduras. (R32-1342). These boats and their crews of 13 men each remain at sea for the full fishing season, upwards of six to eight months (R32- 1341). The crew members decide whether to keep or release trapped lobsters. The lobsters kept are deheaded, cleaned, processed, and quick frozen in freezer bags on each boat (R32-1342), and a mother ship visits each boat from time to time to reprovision the boat and collect the frozen lobster. (R32-1339-42). The lobster are then taken to Roatan and unloaded into shore storage facilities, where they are available for inspection *7 by DIGEPESCA, the Honduran fishery department,(R32-1328, 1345-46, 1349).

For many years (long before lobster were sold to U. S. buyers), the McNab fishing business had bought boats, fuel and fishing equipment, as well as other cargo for shipment to Honduras, from vendors in the Bayou La Batre, Alabama area. The Caribbean Clipper would make voyages to Bayou La Batre and pick up fuel, engine parts, automobiles, etc. and return them to Honduras. (R32-1325, 1326).

In the 1990s McNab began shipping frozen lobster in bulk packages F.O.B. to Bayou La Batre, where they were sold to Seaamerica, Inc., operated by co-defendant Blandford. The distribution of the lobster to United States buyers, which included their sorting and packing, was handled by the buyers; McNab was not involved in- these activities.

Government's exhibit D-10, and computations of lobster weight to length conversions, reflect that approximately 8 percent of the imported lobsters had a tail length less than 5.5 inches. The.total value of these less than 5.5 inch tails approximated $350,000 put of a total sale value of the shipments covered by the indictment of approximately $4.25 million dollars.

These lobster shipments into Bayou La Batre were at all times cleared through Honduran Customs, reported to United States *8 Customs Service and were sometimes inspected by representatives of the United States Department of Agriculture. (R32-1364-67).

In February, 1999 a shipment aboard the Caribbean Clipper was seized by National Marine Fisheries Service (NMFS). According to the Government, approximately 3 percent of the lobster tails in this shipment were less than 5.5 inches and some 7 percent either contained lobster eggs or showed signs that the body parts on which eggs are found had been clipped off. (R32-308, 310-11).

Overview of Honduran Government

Honduras is a constitutional republic. Its legal system is organized generally under the continental or civil law system. (R.19-134). Pursuant to Section 315, the Constitution is the supreme law of the Republic. (R19-257). It addresses fairly specific details regarding the distribution of powers within and among the judicial, legislative, and executive branches.

The adoption of statutes (issued as "Decrees") is the exclusive prerogative of the National Congress. (R19-132). The Constitution vests in the executive branch the authority to issue certain other rules of conduct. Regulations (issued as "Accords" or "Agreements") are general rules of conduct applicable to all who may be affected by them. The Constitution provides that Regulations may be issued only by the President of the Republic with the co-signature of the chief Minister of pertinent *9 ministry. (R19-131). See Honduran Constitution Article 245(11), 248, and 321. Both statutes and regulations become formally effective only when they are published in La Gacets, which is the Honduran equivalent of the Federal Register.

A "Resolution" is an administrative or judicial decision that is designed to conclude a proceeding or dispute involving an interested party within the jurisdiction of that agency or court. (R19-130). See Article 120, General Law of Public Administration.

The Honduran judicial system includes the Court of First Instance in Administrative Law which adjudicates disputes relating to administrative matters. Among the procedures available in the Administrative Court is an action by a Honduran citizen, who claims to be adversely affected by some administrative rule, to seek a declaration that the rule is invalid. Decisions of the Court of First Instance may be appealed to the Court of Appeals of Administrative Matters. Decisions of that Court may be appealed to the Supreme Court of Honduras.

Akin to the common law of England and the United States, Honduran law recognizes a principle of retroactivity of changes in the law as they impact criminal matters. Article 96 of the Constitution of Honduras reads as follows:

Article 96 - The law does not have retroactive effect, except in penal matters when the new law favors the delinquent or person that is prosecuted.

*10 (R5-336-EX.1). Compare Bell v. Maryland. 378 U.S. 226, 230 (1964) (noting the "universal common-law rule" as follows: "[W]hen the legislature repeals a criminal statute or otherwise removes the State's condemnation from conduct that was formerly deemed criminal, this action requires the dismissal of a pending criminal proceeding charging such conduct.").

C. Standard of Review. The district court's determinations of controlling law - such as foreign law - are reviewed de novo. Seguros del Estado. S.A. v. Scientific Games, Inc., 262 F.3d 1164, 1171 (11th Cir. 2001).

Several of defendant's other arguments address erroneous rulings or jury instructions in the district court. Where there were contemporaneous objections, these trial court actions are reversible if they were erroneous and affected the substantial rights of defendant. Where the error was not brought to the attention of the district court, the errors are subject to "plain error" review under Rule 52 (b). Under that standard the district court ruling may be reversed if there was error, the error was plain, the error affected the substantial rights of defendant, and the error seriously impacted the fairness or integrity of the proceedings. United States v. Nauven, 255 F.3d 1335, 1346 (11th Cir. 2001).

When reviewing the sufficiency of the evidence (not foreign law), which is a question of law, this Court reviews it de novo, *11 with the evidence viewed in the light most favorable to the Government, with all reasonable inferences and credibility choices made in the Government's favor. United States v. Hunerlach, 197 F.3d 1059 (11th Cir. 1999).

The district court's exclusion of evidence preferred by defendant is reviewed for abuse of discretion. United States v. Thomas, 242 F.3d 1028, 1031 (11th Cir. 2001).

The content of jury instructions is reviewed de nova to determine whether they misstate the law or mislead the jury. United States v. Richardson. 233 F.3d 1285, 1292 (11th Cir. 2000).

*12 SUMMARY OF THE ARGUMENT

Defendant David Henson McNab, presently incarcerated, was sentenced to eight years as a result of convictions under the Lacey Act and derivative counts based on the Smuggling Act and the Money Laundering Act. None of these convictions can stand. All rest upon erroneous findings of Honduran law by the District Court. A necessary element in this Lacey Act case is a violation of a foreign law which regulates the taking, possession, importation, exportation, transportation, or sale of fish or wildlife. The Government bore the burden of proving the existence of such a valid law and failed in this burden. McNab presented overwhelming evidence to the District Court, and now to this Court, that each of the Honduran laws, regulations or "resolutions" had either been repealed, reformed or was otherwise invalid. The invalidity of the "resolution" which formed the centerpiece of the Government's prosecution - Resolution 030- 95 relating to the harvesting of "short" lobster tails - has been confirmed officially now by the decisions of a Honduran Administrative Court and Appellate Court, declaring the resolution null and void, not having been adopted pursuant to proper Honduran procedure at the time it was issued. Even more recently, on November 16, 2001, the highest Honduran official in the Ministry of Agriculture and Livestock has now issued a definitive Resolution, in response to a Report and Recommendation *13 filed by the National Human Rights Commission, in which the Secretariat of that ministry confirms that each of the Honduran "laws" and/or other regulations or resolutions upon which Mr. McNab was convicted were of no force and effect at the time of his conviction, either by virtue of their invalidity from inception or their repeal by the National Congress of Honduras. Defendant McNab's posture before this Court is unique from all other defendants because he was not charged with violation of Florida law but only Honduran law.

Because none of the Honduran laws or regulations with which McNab was charged were valid, or otherwise in force, the District Court decision must be reversed and remanded with instructions to enter a judgment of acquittal in McNab's favor. Assuming arguendo. however, that any of the Honduran laws or regulations charged were invalid or otherwise an improper basis for prosecution, the Court's erroneous charge to the jury on that law renders the entire conviction reversible and subject to a new trial. The jury returned a general verdict without any special findings as to which of the Honduran laws or regulations the jury determined Mr. McNab had violated. Consequently, it is impossible to know whether the jury returned a verdict on the basis of a valid or an invalid Honduran law.

One of the Honduran regulations, relied upon by the Government - Regulation 008-93 - was also an improper basis for *14 this Lacey Act prosecution because it is merely a compendium of industrial hygiene rules that have no "wildlife protection" purpose. It cannot serve as the basis for a Lacey Act conviction and on that ground alone, the judgment must be reversed.

The jury was also improperly charged with respect to a certain Honduran law violation, relating to the unloading of catch in port, which was never mentioned in the indictment and which the Government had stipulated was not a basis for its Lacey Act prosecution. This constructive amendment to the indictment expanded the possible bases of conviction beyond the scope of the indictment and violated McNab's right to face only charges made by the Grand Jury. On this ground alone, the judgment must be reversed.

McNab was also denied his constitutional right to a unanimous verdict by the failure of the District Court to instruct the jury that they had to unanimously agree on the violation of one or more of the Honduran law violations charged. This failure was plain error and warrants reversal of the judgment.

Mr. McNab was charged with violation of the Lacey Act based upon alleged violations of foreign "regulations" and/or vv resolutions" which were clearly not "laws" as defined under the Honduran Constitution. These regulations or resolutions were an improper basis for a Lacey Act prosecution. The Lacey Act *15 proscribes only conduct which is violative of foreign "law," not foreign "regulations." The judgment must be reversed and remanded for a new trial on these grounds alone.

The Court's admission and exclusion of evidence at trial was not undertaken in an evenhanded manner and resulted in the prejudicial exclusion of critical evidence that McNab proffered to show that he had not "knowingly" violated the law of Honduras. The Lacey Act is a specific intent crime. Such evidence was clearly admissible. Yet the Court repeatedly refused to allow McNab to put on evidence that his shipments passed inspections in Honduras, that they were released for export from Honduras, and that the Honduran inspectors felt the lobster violated no Honduran law, and otherwise refused to allow evidence from which the jury could infer that McNab did not knowingly violate the law. On the other hand, the Court allowed repeated references by the Government to the size of McNab's fishing operations on the grounds that from such evidence the jury could infer that McNab had the required mens rea. This treatment of evidence of knowledge and intent violated clear precedent in this circuit.

Finally, the three money laundering charges must fail as a matter of law. The charge that generated the eight year sentence was for conspiracy to violate 18 U.S.C. Section 1956 (a)(1)(A)(i), the "promotion" arm of Section 1956. First of all, the Court failed to instruct the jury on the necessary elements *16 of a violation of this statute. The risk of jury error in the conviction of Mr. McNab under this statute, based on its failure to understand the elements of this crime, was clearly exacerbated by the prosecution's comments during closing argument which effectively conflated the separate charges under Section 1956 and 1957, and could have only have led to further jury confusion regarding the necessary elements of the "promotion" arm of Section 1956. There was also a total failure of proof that McNab undertook any financial transactions with the intent to "promote" the unlawful activity charged, i.e., violations of the Smuggling Act. There is also insufficient evidence to support the Section 1957 charge because McNab did absolutely nothing in connection with the "Section 1957 transactions." As alleged and proved, those transactions were simply the transfer of funds into McNab's company's bank account to pay bills.

In summary, the District Court's judgment must be reversed and judgment rendered in favor of McNab. In the alternative, the case should be remanded for a new trial and/or for re-sentencing.

LEGAL ARGUMENT

THE GOVERNMENT FAILED TO CARRY ITS BURDEN THAT MCNAB VIOLATED ANY VALID TO PROVE LAWS OF HONDURAS

All charges against McNab are based on alleged violations of *17 Honduran law. The trial court wrongly determined that the Indictment validly charged Honduran violations. In fact three of the four alleged Honduran "laws" are invalid or nonexistent. Such was most recently confirmed by the Honduran Courts (final annulment decision), the Honduran Congress (a. deleting Article 70(3) from The Fishing Law, b. repealing Regulation 0008-93 in 1995, and c. confirming the automatic repeal of regulations upon the repeal of the enabling statute), and the Secretariat of Agriculture and Livestock (the ministry containing DIGESPCA, the fisheries department), who on November 16, 2001 reported to the National Human Rights Commission at least three (3) "errors of law" made by the Government's Honduran law witness, Lillian Paz, in this case.

The United States Constitution prohibits the imposition of criminal sanctions for conduct that is not a crime, Fiore v. White, 531 U.S. 225, 148 L.Ed.2d 629 (2001); Adams v. Murphy, 653 F.2d 224 (5th Cir. 1981). The Government bears the burden of proof with respect to the validity of the foreign laws charged to be violated. U.S. v. Sohappy, 770 F.2d 816, 823 (9th Cir. 1985), cert. denied, 477 U.S. 906 (1986). The Government did not and cannot carry that burden in this case.

If any of the District Court's determination of Honduran law were erroneous, this Court must reverse. Griffin v. United States, 502 U.S. 46 (1991); *18United States v. Shotts, 145 F.3d 1289, 1293, m.3 (11th Cir. 1998).

A. Resolution 030-95 Is An Invalid Law of No Force or Effect.

The principal charge against McNab (indeed the gravamen of the case) was that his crew kept lobsters with a tail length shorter than 5.5 inches. The Indictment as finally amended charged that keeping such lobsters violated Honduran Resolution 030-95. (Brief Addendum, Tab No. 2). McNab challenged the efficacy of this Resolution on the grounds, among others, that it purported to establish nation-wide rules of conduct which must be accomplished by regulations, and it was not issued with the formal steps required of a Regulation.

The original and first superceding Indictments identified Honduran Resolution 003-80 as the basis for the size-limit charge. At the hearing on foreign law, the government withdrew its reliance upon Resolution 003-80 given its patent defectiveness. The government switched to Resolution 030-95 which McNab contends suffers from the same defects as 003-80. However, Resolution 030-95 was determined by the District Court to establish a valid prohibition and the jury was so charged over McNab's opposition/objection that, among other deficiencies,

(a) Articles 5 and 45 of The Fishing Law requires enactment of a "regulation" to effectuate The Fishing Law and particularly size limits, and

*19 (b) in order to have legal effect in Honduras, a "regulation" must be signed by the President and the Minister of the Department involved, reviewed and approved by the Attorney General of Honduras and published in the La Gacets. Resolution 030-95 was not so enacted and was therefore "null, void and ineffective."

Prior to commencement of the foreign law hearing, McNab filed many affidavits, court orders and statements from Honduran officials and Honduran courts in support of his position. (Folder 4).

After being apprised of the complexity of the Honduran legal issues presented, Judge Vollmer inquired as to "why is it that Honduras does not prosecute their own citizens ... where a jurist would have some general knowledge of all of the Honduran law and could determine ... what is the law, what is not the law ...." (R19-24).

The Government's lone Honduran "law witness" was Liliana Paz, General Secretary of the Ministry of Agriculture and a Honduran lawyer. (R19-59). Liliana Paz had never worked with DIGEPESCA, the Department of Fisheries in Honduras, and had no experience with the lobster industry. (R19-101). Paz testified that Honduran resolutions "are not laws or regulations because they do not have the form that would be required for_ them to be such." (R19-95). However, she testified that resolutions are *20 "legally binding in Honduras." (R19-97).

Paz further testified that Articles 5 and 45 of The Fishing Law provide that implementation of prohibitions against taking under-sized lobster (there is no size-limit set in The Fishing Law) must be accomplished by the implementation of "regulations." not resolutions. (R19-107, 108). No regulations were issued.

Saul Litvinoff, an expert in Central America and Honduran law, was the next witness. He testified that under Honduran law Resolution 030-95 "lack[s] regulatory force because they are not regulations issued in the proper manner according to Honduran constitutional procedure and according to the Honduran law... of administrative procedure." (R19-130, 131). He testified that in order to be effective as constituting a valid legal prohibition against certain conduct a regulation "must be issued by the president, co-signed by the pertinent minister with notice to the attorney general of the republic, and finally, published in La. Gaceta." (R19-131). Dr. Litvinoff testified that the resolutions advanced by the Government, including Resolution 030-95, "do not meet those requirements" and are an "absolute nullity" in Honduras. (Id.) Dr. Litvinoff was asked whether the resolutions were "void or voidable"; he responded "they are void, that it's absolutely void." (R19-135). He agreed with Liliana Paz's testimony that "resolutions were not law and are not regulations." (R19-136, 137). Dr. Litvinoff finally testified *21 that there is "simply no binding legal requirement in Honduras concerning the legal size of lobster." (R19-143).

Dr. Efrain Moncada Silva is a professor of administrative law, constitutional law, administrative procedures, administrative legislation and advanced administrative law at the University of Honduras and a former Minister of Justice in the Republic of Honduras. He has been a practicing attorney in Honduras for 40 years. (R20-245, 246). Professor Silva testified that Resolution 030-95 did not constitute Honduran law. (R20-250). Professor Silva explained that in Honduras a valid regulation is required in order "to require a citizen to do or not do something." (R20-259). The Fishing Law provides that the executive branch may establish and announce size limits "through regulations," but the Honduran government has undisputedly not done so. (R20- 260). Professor Silva also agreed with Liliana Paz's testimony that resolutions do not constitute Honduran law and that resolutions do not constitute regulations. (R20-267). In conclusion, he testified that "the resolutions do not have legal effect there in Honduras... they are null." (R20-267, 268).

McNab also submitted the "Legal Opinion" of the Attorney-General of the Republic of Honduras. He testified that for Resolution 030-95 to have the effect of a law of general character it had to be issued by the President of the Republic as *22 opposed to the Secretary of the Natural Resources Department (Folder 4, Ex. 1-pg. 2, ¶B(2)). (Addendum, Tab No. 3). The Honduran Attorney General attested:

"In summary, the referred Resolution does not have a legal sense, because it does not represent any form of "Agreement" [Regulation], it was not published in the La Gaceta, neither was it issued by the President of the Republic, through the Minister of Natural Resources. The document has, besides absolute invalidity, absolute incompetence because an incompetent authority issued.it."

A Commission appointed by the Honduras Bar Association addressed Resolution 030-95 and declared that only the National Congress can create laws and that consequently the Resolution did "not have the character of'law."' The Commission concluded that the Constitution of Honduras reposes in the President of the Republic the authority to issue regulations and that, because Resolution 030-95 had not been signed by the President of the Republic, it did not constitute a valid regulation and that the resolution was "invalid." (Folder 4, Ex. 3).

McNab presented an Opinion from the Regional Prosecutor of the Special Prosecutor for Defense of the Constitution to similar effect. The prosecutor concluded: "Simply stated, these resolutions are null and void and compliance with them is not obligatory." (Folder 4, Ex. 4, ¶III).

Mr. McNab presented the declaration of Dionisio Matute, a practicing attorney from Tegucigalpa, who opined that Resolution *23 030-95 does not have the force and effect of law in Honduras. (Folder 4, Ex. 5-pgs. 4, 5).

Mr. McNab presented the Opinion of Dr. Ramiro Lozano, a professor of constitutional law and administrative procedure at the University of Honduras since 1978. (Folder 4, Ex. 6). Professor Lozano, after noting that the Constitution of Honduras vests in the President the sole power of issuing regulations (Id. at 1) concluded that Resolution 003-95 had "no legal validity." (Id. at 6).

As noted above Honduran law allows one who claims to be adversely impacted by an administrative action to seek the nullification of such action through an "annulment proceeding". Prior to the trial of this case defendant McNab sought a continuance to allow him to file such a proceeding in Honduras. (R23-13, 14). The Government objected, arguing that since this Court would review de novo the district court's rulings on foreign law, the annulment proceeding could be initiated after the trial and its results presented to this Court on appeal. (R23-21).

Immediately following the trial defendant McNab commenced an annulment proceeding in the Administrative Law Court in Tegucigalpa. The Government of Honduras was the respondent and resisted the action. On May 23, 2001, the Court of First Instance of Administrative Law issued its opinion, concluding, *24 among other things, that Resolution 030-95 was null and void because, among other defects, it had not been issued by the President of the Republic. (R5-324-Ex.B-pgs.4-5) (Addendum Tab No. 4).

By notice filed June 15, 2001, (R5-324) McNab presented that decision to the district court. The prosecution's response was that this was simply a trial court decision and that the Government of Honduras had undertaken an appeal, so the Decree had no final effect.

On October 11, 2001, the Court of Appeals of Administrative Matters issued its decision affirming the trial court's decision that Resolution 030-95 was null and void. (Addendum Tab No. 5). The Government of Honduras did not appeal that decision to the Supreme Court of Honduras. Accordingly, a final appellate decision from the appropriate court in Honduras has ruled that 030-95 is void, for precisely the same reasons that McNab has advanced throughout this case.

On November 16, 2001, the Secretary of Agriculture and Livestock (Lillian Paz's superior) issued the following Resolution relative to Resolution 030-95:

The Resolution which reads verbatim Secretariat of State in the Offices of Agriculture and Livestock... PREAMBLE: To act on the Special Report with Recommendation, issued by the National Human Rights Commissioner, on the eighth day of November of the year two thousand one.... WHEREAS the Legal Department of the *25 Secretariat of State, after reviewing the facts alleged in the related report, considering in addition the decisions of the Courts of Administrative Law related to the case and after having made the relevant consultation, is of the opinion that what is set forth by the National Human Rights Commissioner is his report and in his Recommendations, is totally correct.... WHEREAS there are grounds for issuing the corresponding Resolution to give the answer required by the Law to the Recommendations of the National Human Rights Commissioner and to take the corrective measures under Law. Therefore, she RESOLVES: ....SECOND: The official position of this Secretariat of State, as well as the correct sense and scope of the challenged rules, is that set forth below: 1) Resolution 030-95. According to a decision of the Court of Administrative Law dated May 23, 2001, Resolution 030-95 and other resolutions were totally rendered null and void, but only for the purposes of making them null and void and inapplicable in the future. However, the final and firm judgment of the Appeals Court of that same Court dated October 11, 2001, expands the ruling of determining that the challenged Resolutions are null and void and, therefore, do not produce legal effects because of having been issued by an authority without jurisdiction erroneously and beyond the powers that the law grants to the issuer thereof. This is owing to the fact that they contain regulations and, since they had not been issued by the President often [sic] Republic and authorized by the corresponding Secretary of State, they never had the force of law pursuant to what is set forth in the Constitution of the Republic, Articles 245, Number 11, and 248. The aforementioned decision of the Court of Administrative Law has a retroactive effect in criminal matters pursuant to the Constitution of the Republic in Article 96 thereof, since it does not require the legal rule to be criminal in order for it to be retroactive, since it is sufficient for it to favor the criminal or *26 defendant in order for it to be applied in any criminal matter, as in the case of Mr. McNab. (Addendum, Tab No. 10).

This Court must conclude that the foundation offense for the principal charge against McNab - selling undersized lobsters - did not exist under Honduran law, so that the Indictment fails to charge a crime against him in that regard.

B. Regulation 0008-93 was Repealed and is not a Wildlife Protection Law.

1. Regulation 008-93 was repealed in 1995.

Regulation 0008-93 was, as discussed below, a set of industrial hygiene regulations. (Addendum, Tab No. 6). McNab's alleged crime was packing the lobsters in plastic bags rather than in cardboard boxes. (Folder 1, Ex. 28-Art. 49h). These regulations were adopted under the authority of Decree No. 40 of May 16, 1973, the Law of Industrialization of Meat. The Government, pursuant to its motion under Criminal Rule 26.1, asserted that Regulation 0008-93 was effective during the time periods covered by the Indictment. Its witness, Liliana Paz, so testified.

After trial, and after an extensive hand search of Honduran Decrees, Honduran Accords, and La Gaceta, defendant McNab's lawyers discovered that in fact that Decree No. 40, the law authorizing this regulation, had'been repealed before the time period covered by the Indictment. (R5-341-Ex.3). Decree No. *27 157-94 (published in La, Gaceta January 13, 1995) is titled "The Phyto Zoo Sanitary Law." Article 42 of that Act provides that "the Law for the Industrialization of Meat (Decree Law No. 40, May 16, 1973)" and other specified laws "are repealed". (R5-325-Ex.C-pg.4). (Addendum, Tab No. 7). The next section of the Act, Article 43, provides that the Executive Power will issue new regulations implementing the Phyto Zoo Sanitary Law. These new regulations were needed because the repeal of the old Law created a regulatory vacuum. The Government's evidence was that those new regulations were not issued until December 12, 1999.

In support of his Motion for New Trial/Dismissal McNab presented to the Court the declaration of Ramiro Lozano, a professor of administrative law at the University of Honduras. (Tab 388). Professor Lozano explained that under the law of Honduras a statute and administrative regulations issued pursuant to the statute are analogous to a tree and its branches. When the tree (the statute) is cut down, the branches (the regulations) fall with it. (R6-388-pg.3).

McNab also presented the affidavit of Government "law witness" Liliana Paz dated July 30, 2001 wherein she recanted her testimony at the hearing that Regulation 0008-93 was "valid," by stating that the repeal of the Meat Law on January 13, 1995 "automatically repealed" Regulation 0008-93 "on that same date."(R6-388). McNab presented affidavits from other governmental *28 officials. One such affidavit (filed with Supplemental Filing in Support of Alternative Motions dated July 19, 2001), was the affidavit of Rafael Leonardo Callejas Romero, who testified:

"My name is Rafael Leonardo Callejas Romero. I was President of the Republic of Honduras from 1992 to 1994. I signed Decree 0008-93.... These Regulations were issued in application of the Meat Industrialization Law (Executive Decree No. 40 dated May 16, 1973). I signed Decree 0008-93 as President of the Republic, since, pursuant to the Constitution of the Republic (Article 245, No. 11, Article 248) my signature was required as President, so that it would have (as any other regulations) the force of law.

On January 13, 1995. Decree No. 157-94, which contains the Plant and Animal Health Law, went into effect by virtue of its publication in La Gaceta. This Decree repeals, as of January 13, 1995, the Meat Industrialization Law (Decree No. 40 of May 16, 1973) and, accordingly. Decree 0008-93 (of January 13, 1993)."

On November 1, 2001, the National Congress of Honduras issued a law (Decree 198-2001) that dispels any doubt regarding the invalidity of Regulations after the Laws under which authority the Regulation was issued is repealed. Decree 198-2001 states that "the express repeal... of a law leaves without legal value or effects the general regulations and the specific regulations in to. that the Executive Branch through the respective Secretariat of State, has issued to implement the provisions of the repealed law...." (Addendum, Tab No. 8). That Decree (statute) confirms the unanimous opinions of the *29 other expert witnesses that the repeal of The Law of Industrialization of Meat "automatically repealed" Regulation 0008-93.

This concept is, of course, precisely identical to the law of the United States:

When a statute has been repealed, the regulations based on that statute automatically lose their vitality. Regulations do not maintain an independent life, defeating the statutory change.

Airplanes Argentinas vs. United States, 77 F.3d 1564, 1575 (Fed. Cir. 1996); see United States v. Fortier, 342 U.S. 160, 96 L.ed. 179 (1951) (repealed statutory authority for regulations worked repeal of underlying regulations).

Thus the regulations which were the basis of the "not packed in cardboard boxes" crime charged against McNab was repealed in January of 1995 and no replacement regulation was adopted until December 12, 1999. All of the offenses charged in the Indictment occurred between those dates.

The Secretary of Agriculture and Livestock in his recent resolution on behalf of the Honduran Government declared:

2. Decision ["Acuerdo"] 0008-93: Pursuant to the Legal Principles of Law, confirmed by Decree No. 198-2001, recently issued by the National Congress, the express repeal of the law makes the regulations issued by the Executive Branch to enforce the repealed law without value or effect, unless there is an express provision in the repealing law. Therefore, Decision ["Acuerdo"] 0008-93, issued to enforce the Meat Industrialization *30 Law (Executive Decree No. 40 of May 16, 1973) was repealed in its entirety and rendered without any value or legal effect as of January 13, 1995, when the Plant and Animal Health Law went into effect (Decree 157-94), which repeals the aforesaid Meat Industrialization Law. (Addendum, Tab No. 10).

2. Regulation 008-93 is not a law regulating the taking, possessing, transportation or sale of wildlife under the Lacey Act.

Even if Regulation "008-93 were not repealed, the Lacey Act cannot be construed to incorporate this hygiene/packing regulation charged in the Indictment. In United States v. Molt, 599 F.2d 1217 (3d Cir. 1979), the Court held that the foreign laws incorporated by the Lacey Act are those "designed and intended for the protection of wildlife in those countries." Id. at 1218-19. Regulation 0008-93, which the Government says requires an 8-year sentence for McNab because he packed lobsters in plastic bags (labeled "Product of Honduras" and disclosed such on approved export/import forms) rather than cardboard boxes, was not (before its repeal) such a law. The Third Circuit's logic applies equally here:

The District Court also held (452 F. Supp. at 1204), and we agree, that the Fiji law is not a law for the protection of wildlife, but a revenue of law. The expert witness testified that at the relevant time period Fiji had no laws relating to prohibition of export of wildlife. The general prohibition of all exports, unless the customs formalities are complied with, is simply ancillary to the,collection of export duties. The Customs ordinance upon which the *31 Government relies is plainly merely a revenue law and does not trigger the applicability of the Lacey Act. Id. at 1219.

Regulation 0008-93 was 40 pages long and consisted of 125 articles. (Folder 1, Ex. 28). (Addendum, Tab No. 6). These regulated in minute detail the handling of fishery products aboard fishing boats. For example, the Regulation

- required that each vessel "have a good amount of long-handled brooms" [Article 44(1)(w)]

- required processing plant workers to wear white boots (Article 52m)

- required washing to remove dirtiness, mucosity and blood [Article 45(2)]

- required the temperature in the processing plants to be below 64.4 degrees Fahrenheit (Article 29d)

- required equipment to be perfectly cleaned after each cycle [Article 45 (2)]

- required processing plants to have one urinal for every ten employees (Article 34c)

- required the suspension of inspection personnel who did not pay their union dues (Article 15)

- required "no walking between or on the product, nor piling it up in large quantities on the deck" [Article 46(1)]

Chapter XIX of Regulation 0008-93 addresses "sanctions" and *32 denominates same as "light faults" (Article 117), "less serious faults" (Article 118) and "serious faults" (Article 119). Since the violations at issue were brought to McNab's attention "for the first time" he would fall under "light faults" (Article 117). The fine applied for infraction of a light fault is a "written warning" (Article 120). The Government in this case has, instead, extracted eight (8) years in jail for a "violation" of this hygiene regulation.

Nothing whatsoever in Regulation 0008-93 related to the protection of wildlife. The Regulation was, in its entirety, a commendable effort to protect the hygiene of seafood products. Would the Lacey Act be violated if lobsters imported from Honduras were processed, by a factory worker who wore blue Nikes instead of white boots? Or if the temperature in the processing plant edged up to 66 degrees? Would the importer of fish processed in Honduras be sentenced to eight years in prison if the plant at which the fish were processed had 20 workers but only one urinal?

Nothing in Regulation 0008-93 purported to "protect" fish or lobster, which were already caught and cleaned when they were frozen and put into plastic bags. Under Molt this regulation was beyond the coverage of the Lacey Act.

3. The wrongful conviction under 008-93 substantially affected McNab's sentence.

*33 The alleged violation of Regulation 0008-93 is the part of the case against McNab that led to his extreme sentence. Since all of his lobster were packed in plastic bags rather than cardboard boxes, every nickel McNab received for his lobster sales was, in the government's view, "dirty money", with a resulting 8-year sentence, for committing the "crime" of bagging instead of boxing the lobster sold directly to U. S. buyers.

We now know that at all times covered by the Indictment there was no valid "cardboard box" regulation and all charges based on this hygiene regulation are invalid.

C. Article 70(3) of The Fishing Law of 1959 was Repealed.

Though the indictment asserted that Honduran law prohibited the harvest of female lobsters in their egg-bearing stage, the Indictment, in violation of Criminal Rule 7(c)(1), never cited the statute, rule or regulation of Honduras upon which this charge arose. Nevertheless, the Court ultimately charged the jury (R33-1589) that Honduran law

prohibits one to harvest or destroy the eggs of any aquatic species, including spiny lobsters, for profit; this includes a prohibition against the tearing out or, in any other way of separating, the eggs from the female lobster for profit.

In neither its first, second, or third iteration did the Indictment identify the source of that prohibition. In fact, the charge fails to properly track the language of the law that the Government finally relied on.

*34 When the Government first moved the Court to make a finding that such a prohibition existed, it cited Resolution 003-80. (Rl-46-12). After McNab pointed out that it was invalid because, among other things, it was not signed by the President and never published in La Gaceta, the United States. It withdrew 003-80 and asserted, in a brief filed on the day the foreign law hearing commenced, which was one day before the second superseding indictment was filed and four days before the jury was selected, that this prohibition arose from Article 70(3) of Decree No. 154, the 1959 Fishing Law. (R3-182- pgs.5-6). That section provides criminal punishment for "(3) those who destroy or harvest the eggs, or the offspring of fish, chelonians [turtles] or other aquatic species for profit." (Addendum, Tab No. 1). None of the conduct addressed in the jury charge given appears in Article 70(3) of the Fishing Law. The charge language was taken from Resolution 003-80 which the Government abandoned.

The Government asserts that Article 70(3) of the Fishing Law means that it is a crime in Honduras to destroy or keep the eggs of lobsters for profit. This plainly cannot be the meaning of that section. Part of that same filing by the Government (R3-182) is a translation of the entire text of the 1959 Fishing Law. That translation includes Article 54 of the Law which reads as follows:

Article 54 - The transport and sale of species in closed season and the eggs of fish *35 and chelonians, crustaceans, and mollusks is permitted until the fifth day after the respective closed season has begun for the purpose of selling off existing quantities which were captured prior to the start of said closed seasons.

(R3-182-Ex.7-pg. 12) (emphasis added). (Addendum, Tab No. 1). Because Article 54 of the Fishing Law expressly permits the sale of lobster eggs, Article 70(3) cannot mean what the Government says it means. Regulation 008-93, in fact, contains precise specifications for Honduran canned fish eggs. (Folder 1, Ex. 28-Art. 76). (Addendum, Tab No. 6).

Even in the absence of these facially inconsistent articles, the Government's interpretation of Article 70(3) sweeps too broadly, effectively criminalizing anyone who catches for profit any aquatic species with eggs! As Professor Litvinoff opined, the statute then "would have the absurd effect of prohibiting all fishing in Honduran waters, since any time a caught female has eggs, the killing - by fishing - of the egg-bearing female would necessarily destroy the eggs."

There are no experts on the Honduran Fishing Law whose offices are within walking distance of the Mobile federal courthouse. The United States' delay, until after commencement of the foreign law hearings, in springing the Article 70(3) argument on the defendants, was extraordinarily prejudicial. It also violated the "reasonable notice" requirement of Criminal Rule 26.1.

*36 Finally, however, the exact meaning of Article 70(3) does not need to be resolved by this Court. By Notice filed June 19, 2001, McNab informed the Court that the Honduran National Congress, by Decree No. 245-2000, had amended Article 70 of the Fishing Law by deleting former Article 70(3). (R5-326). (Addendum, Tab No. 9). The new Article 70 continued to criminalize most conduct that had been proscribed in the original Article 70, but the new Article 70 contains no provision relating to the eggs of aquatic species.

Under Article 96 of the Constitution of Honduras provides the law has retroactive effect in criminal cases when the changed law benefits the accused", a proposition with which the Government took no issue before the District Court.

The fact of the repeal of Article 70(3) has now been definitely confirmed by the Honduran Government, who has spoken via Resolution of the Secretary of Agriculture and Livestock as follows:

3. Article 70 of the Fisheries Law: This article, as amended by a Decree of the National Congress No. 245-2000, rendered invalid and without legal effect the provisions originally contained in said article. Therefore, those provisions that were part of the original article and which were omitted in its amendment, ceased to have legal validity when Decree 245-2000 went into effect, among them, those contained in Items 3 and 7 of the original Article 70. Since those omissions benefit the defendant, their retroactive application in the criminal case brought against Mr. McNab is likewise *37 guaranteed by Article 96 of the Constitution, (Addendum, Tab No. 10).

D. The Indictment was Constructively Amended to Charge a Violation of Article 30 of The Fishing Law of 1959.

The Constitution allows a federal Indictment to be expanded only by the grand jury, not by the court or prosecutor. This rule was plainly violated in this case.

As found by the District Court, Article 30 of the Fishing Law of Honduras provides as follows:

30. Fishermen shall be required to dock their vessels and unload their catch in Honduran ports.

(R4-209 at 20-21). (Addendum, Tab No. 1). At the Government's instance, the Court included in its instructions on Honduran law the charge that Honduran law

(3) REQUIRES LOBSTER FISHERMEN TO DOCK THEIR VESSELS AND UNLOAD THEIR CATCH IN A HONDURAN PORT PRIOR TO EXPORTATION. THIS DUTY MAY BE FULFILLED BY THE FISHERMEN BY EITHER DOCKING THE VESSEL THAT CAUGHT THE LOBSTER OR TRANSFERRING THE CATCH TO A LICENSED SHIP THAT IN TURN DOCKS AND UNLOADS THE CATCH.

(R33-1589). The Court then instructed the jury that the defendants could be found guilty of the Smuggling Act violations if the Government proved "that the lobster tails were taken, possessed, transported, or sold in violation of and in a manner unlawful under Honduran law...." (R13-1590, 1591). The Court gave the instruction to the jury about "unloading" *38 notwithstanding that nothing in the Indictment alleged a violation of Article 30 of the Fishing Law, and notwithstanding that the Government had expressly disclaimed reliance on Article 30 as part of the crimes charged.

At the foreign law hearing conducted in this case, defendant McNab objected to the Court's undertaking to determine Honduran law regarding "unloading" because, among other reasons, there was no unloading offense charged in the Indictment. The Government responded in part as follows:

Your Honor, Article 30 is not charged in the Indictment. The Defense Counsel is correct about that... It is a relevant issue. It simply isn't charged as a crime. But we still need that law determined because there will be testimony about how these folks operated and whether they bring them in or whether they pick them up at sea and how the industry works. (R19-36, 37) (emphasis added).

Nothing contained in the jury instructions informed the jury that the discussion of an "unloading" requirement in the Judge's instructions on the law of Honduras was simply background information. The charge straightforwardly instructed the jury that they could find the defendants guilty if any of the five Honduran law provisions explained to them were violated.

This error was compounded by the prosecution's multiple references in closing argument to defendant McNab's alleged "unloading" violations (R) 33-1471, In. 21-25; 1472, In. 24-25; 1474, In. 5-6; 1475, In. 13-16).

Based on the Court's instructions and the prosecution's *39 arguments, the jury was authorized to convict defendant McNab if it determined that his boats' lobster catches were not unloaded at a Honduran port. There was no such charge in the indictment. Therefore the Court and prosecution constructively amended the Indictment to include, as a permissible basis for conviction, a Honduran law violation not alleged in the Indictment. The conviction is per se reversible on this ground.

In United States v. Behety, 32 F.3d 503 (11th Cir. 1994), this Court explained the constitutional error involved in judicial amendment of the Indictment:

As this court has explained "an amendment occurs when the essential elements of the offense contained in the indictment are altered to broaden the possible bases for conviction beyond what is contained in the indictment." Convictions based on a modification of an essential element not charged by the grand jury present reversible error. Such modifications may occur either by the actions of the court or actions of the prosecutor. A court's jury instruction that constructively amends an indictment constitutes reversible error per se because the instruction violates a defendant's Fifth Amendment right to be tried only on charges presented by a grand jury and creates the possibility that the defendant may have been convicted on grounds that the indictment did not allege.

Id. at 508 (citations omitted).

Whether this instruction is viewed as reversible error per se or is analyzed under the "plain error" rubric, the result is the same. The charge was erroneous, indisputable and plain. The *40 error undeniably affected the substantial rights of McNab because it authorized his conviction on a basis not charged by the grand jury, in violation of his Fifth Amendment rights.

E. The Evidence was Insufficient Regarding the "Reporting" Violation - Article 35 of The Fishing Law.

Article 35 of The Fishing Law generally requires that fishermen report their catch to Honduran authorities. (Addendum, Tab No. 1). As noted above, The Fishing Law also provides that its requirements shall be effectuated via "regulations". No "regulations" setting forth the specific requirements regarding the reporting of catch exist, as it is undisputed that no regulations were implemented pursuant to The Fishing Law. Despite this fact the District Court charged the jury regarding this alleged "violation" of Honduran "law". The Government's only witness on this alleged violation, Liliana Paz, who had never worked with or for DIGEPESCA, testified that McNab's company had not submitted necessary "reports" to DIGEPESCA for 1998 and 1999. Paz testified that as of a particular date the only reports submitted were those marked as Government Exhibit R-9 (R) 881). However, on cross-examination, Paz admitted that she had only collected reports through a date certain and that reports for 1999 had indeed been filed by McNab's company. (R) 889 - 891, McNab Exhibit 60). She further admitted that it was quite possible that the 1999 reports had been in the possession of the *41 DIGEPESCA Roatan office, rather than in the DIGEPESCA offices in Teguciagalpa. She did not check with the Roatan DIGEPESCA official, Francesco Resales, whose affidavit filed of record attested that "I have on site the production reports of the boats of Caribbean Fishery Company... corresponding to the fishing years 1998-1999."

As such, the Government's "evidence" regarding "reporting violations" were totally deficient, baseless and the jury should not have been charged regarding same.

II.

MCNAB'S CONSTITUTIONAL RIGHT TO A UNANIMOUS VERDICT WAS VIOLATED BY THE FAILURE TO CHARGE THE JURY THAT THEY MUST NANIMOUSLY AGREE ON WHICH HONDURAN LAWS HE VIOLATED.

The jury in this case was not required to unanimously agree on which alleged Honduran violation(s) McNab had committed. This violated his constitutional right to be found guilty only in a unanimous verdict. Richardson v. United States, 526 U.S. 813, 143 L.ed-2d 985 (1999). The failure to so charge the jury was plain error. U. S. v. Adkinson, 135 F. 3d 1363, 1377-78 (11th Cir. 1998).

In Richardson, the Supreme Court dealt with the conviction of a drug kingpin for a continuing criminal enterprise. The CCE statute required proof that the defendant was guilty of violations that constituted "a part of a continuing series of *42 violations of the federal drug laws." The evidence at trial included evidence of a number of such violations, but the district court failed to charge the jury that it must agree unanimously _on which violations occurred. The Supreme Court decided that such unanimity was required. The Court observed that absent such requirement the general verdict could conceal wide differences among the jurors about just what the defendant did. 526 U.S. at 819.

The Supreme Court's decision in Richardson, and its analysis, replicates a decision also controlling in this circuit. In United States v. Gipson, 553 F.2d 453 (5th Cir. 1977), the Court stated:

Like the "reasonable doubt" standard, which was found to be an indispensable element in all criminal trials.... the unanimous verdict requirement "impresses on the trier of fact the necessity of reaching a subjective state of certitude on the facts in issue." The unanimity rule thus requires jurors to be in substantial agreement as to just what a defendant did as a step preliminary to determining whether the defendant is guilty of the crime charged. Requiring the vote of twelve jurors to convict a defendant does little to insure that his right to a unanimous verdict is protected unless this prerequisite of jury consensus as to the defendant's course of action is also required.

Id. at 457-58 (citations omitted). In Gipson the defendant was convicted under the "receiving stolen property" statute, which authorized a conviction for engaging in various conduct with *43 respect to the stolen property. The Court concluded:

The district court's challenged instruction authorized the jury to return a guilty verdict despite the fact that some jurors may have believed that Gipson engaged in conduct only characterizable as receiving, concealing, or storing while other jurors were convinced that he committed acts only constituting bartering, selling or disposing. Thus, under the instruction, the Jury was permitted to convict Gipson even though there may have been sJignificant disagreement among the jurors as to what he did. The instruction was therefore violative of Gipson's right to a unanimous jury verdict.

Id. at 458-59.

In this case McNab was charged with importing lobster in violation of the law (or Regulations or Resolutions) of Honduras. After the closed season charges were dropped, the Indictment identified or referred to four possible violations of Honduran legal rules (shorts, packaging, reporting and egg-bearing), and the Court's jury instruction unconstitutionally added a fifth (unloading). Nothing in the jury charge required the jury to agree unanimously on which particular Honduran law violation(s) was proved beyond a reasonable doubt. In light of Richardson and Gipson, this failure to charge deprived McNab of his right to be convicted only through unanimous agreement of the jury on what he did illegally. In United States v. Adkinson, 135 F.3d 1363, 1377-78 (11th Cir. 1998) this Court determined that a district court's failure to instruct according to the Gipson principle was plain error.

*44 III.

THE LACEY ACT ONLY PROHIBITS CONDUCT VIOLATIVE OF FOREIGN "LAW" NOT FOREIGN "REGULATION" OR "RESOLUTION".

As applied to this case, the term "the Lacey Act" refers to the Lacey Act amendments of 1981, Public Law 97-79, 95 Stat. 1073 (Nov. 16, 1981). It is important to note that the Act as presently constituted is not a hodgepodge of non-contemporaneous enactments and amendments, but is instead a single, comprehensive legislative act adopted as a whole in 1981. Section 3 of the Act (codified in 16 U.S.C. § 3372) is captioned "PROHIBITED ACTS." Mr. McNab was charged with importing lobster in violation of Section 3 (a) (2) (A), which prohibits the import or sale of

(A) any fish or wildlife taken.... in violation of any law or regulation of any State or in violation of any foreign law, or....

(emphasis added). Applying any and all rules of statutory construction, including both those of general application and those particularly applicable to criminal proceedings, the Court must conclude that Congress meant what it said in distinguishing between a "violation of any law or regulation of any State" and a "violation of any foreign law." All of the Counts in the Indictment can legitimately be read to charge criminal activities only if that statutory language fairly and explicitly warns that *45 it proscribes conduct in "violation of any law or regulation of any State or in violation of any foreign law [or regulation or resolution]." McBovle v. United States. 283 U.S. 25, 27, 75 L.ed. 816 (1931).

Does the Lacey Act give "fair warning" that its proscription of wildlife transportation in violation of "any foreign law" also proscribes transportation of wildlife in violation of foreign regulation/resolution (such as packing or hygiene requirements), when the immediately preceding phrase in the statute proscribes transportation of wildlife "in violation of any law or regulation of any State"? It is self-evident that the Lacey Act does not do so, but application of a number of principles of statutory construction and the facts of the language's history further solidify that point. For reference the text of 16 U.S.C. §§ 3371 and 3372 are included in the Addenda.

Returning to the text of the 1981 Act, Section 2 of that Act is captioned "DEFINITIONS." Among other things, that section identifies, as separate concepts, "[t]he terms 'law,' 'treaty,' 'regulation,' and 'Indian tribal law'...." (16 U.S.C. § 3371(d)). Section 2(d) of the 1981 Act purports to "define" four terms. Those are "law," "treaty," "regulation," and "Indian tribal law." The specification of PROHIBITED ACTS in Section 3372(a)(2)(A) - the basic charge against Mr. McNab -incorporates the separately "defined" terms, uses two of the *46 terms in one clause, but limits the succeeding clause to one of the terms:

SEC. 3. PROHIBITED ACTS.

(a) OFFENSES OTHER THAN MARKING OFFENSES.-It is unlawful for any person-

(1) to import, export, transport, sell, receive, acquire, or purchase any fish or wildlife or plant taken or possessed in violation of any law, treaty, or regulation of the United States or in violation of any Indian tribal law;

(2) to import, export, transport, sell, receive, acquire, or purchase in interstate or foreign commerce-

(A) any fish or wildlife taken, possessed, transported, or sold in violation of any law or regulation of any State or in violation of any foreign law, or

(B) any plant taken, possessed, transported, or sold in violation of any law or regulation of any State;

(3) within the special maritime and territorial jurisdiction of the United States (as defined in section 7 of title 18, United States Code)-

(A) to possess any fish or wildlife taken, possessed, transported, or sold in violation of any law or regulation of any State or in violation of any foreign law or Indian tribal law, or

(B) to possess any plant taken, possessed, transported, or sold in violation of any law or regulation of any State;

*47 The Act prohibits five separate types of conduct, each of which is identified by a separate combination of the defined terms - law, treaty, regulation, and Indian tribal law. Taken together, those proscriptions address violations of

- any Indian tribal law

- any law, regulation or treaty of the United States

- any law or regulation of any State

- any foreign law,

but there is no mention_what_SQever of any "foreign regulation."

Several rules of statutory construction compel the holding that the omission of "foreign regulations" from the language under which Mr. McNab is charged precludes his prosecution for claimed violations of such Honduran regulations or resolutions.

First, it is presumed, when Congress uses a term in one section of an Act, but omits the term from another, that "Congress acts intentionally and purposefully in the disparate inclusion or exclusion." Bates v. United. States, 522 U.S. 23, 30, 139 L.ed.2d 215, 222 (1997); R. Maver of Atlanta, Inc. vs. Citv of Atlanta, 158 F.3d 538, 545 (11th Cir. 1998).

Second, it is presumed, even in the absence of a statutory definition, that if Congress uses a "term of art" it intended the term to have its established meaning. McDermott International, Inc. v. Wilander, 498 U.S. 337, 342, 112 L.ed.2d 866, 874 (1991), citing, e.g., *48Morrissette v. United States. 342 U.S. 246, 96 L.ed. 288 (1952). The terms "law" and "regulation" are distinguished by the DEFINITIONS section of the Act, and as terms of art they have distinct meanings.

Next, it is presumed that a term used in different sections of an Act has the same meaning in each such section. E.g. Ratzlaf v. United States, 510 U.S. 135, 126 L.ed.2d 615 (1994). Applying that principle to the Act, if "law" means "law or regulation" in one clause, it would be unnecessary for Congress to proscribe violation of "any law or regulation" in the immediately preceding clause. Such a construction would render "or regulation" surplusage wherever that phrase is used in the Act, contrary to the rule applied in Ratzlaf and numerous other cases. E.g., Baggett v. First National Bank of Gaijiesville, 117 F.3d 1342, 1350 (11th Cir. 1997). See Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 121 S.Ct. 1302, 1308 (2001) (restating the Court's "deep reluctance" to interpret one portion of a statute so as to render superfluous other language in the same Act).

Congress certainly knows how to specifically incorporate "foreign regulations" into wildlife protection statutes. See, e.g., 19 U.S.C. § 1527 (prohibiting import of mammals or birds ("[i]f the laws or regulations of any country, dependency, province, or other subdivision of government restrict the taking, killing...." of such wildlife). (Emphasis added).

*49 Indeed, before the 1981 Amendments, the Lacey Act itself expressly proscribed the transportation of wildlife "in violation of any law or regulation of any State or foreign country." See United States v. Molt, 452 F. Supp. 1200, 1202 (E.D. Pa. 1978) (quoting former text from 18 U.S.C. § 43(a)(2)).(Emp)asis added). In 1981 Congress reformulated the Act, leaving in as predicate acts the violation of a "regulation of any state" but deleting as predicate acts the violation of a "regulation of any... foreign country." See Alanis-Bustamonte v. Reno, supra, 201 F.3d at 1311.

Finally, there is the rule of lenity. In a criminal prosecution where construction of a criminal statute is required, if, after all other applicable rules of construction are applied, there remains doubt as to whether certain conduct is or is not proscribed by the statute, the doubt must be resolved in favor of the defendant. E.g., Crandon v. United States. 494 U.S. 152, 108 L.ed.2d 132 (1990). Lenity is particularly appropriate where, as here, the claimed Lacey Act violation is a predicate for harsher penalties under money laundering statutes and the Smuggling Act. Cleveland v. United States, 531 U.S.12, 148 L.Ed.2d 221, 233 (2000).

A holding that the Lacey Act does not criminalize dealings in wildlife taken in violation of foreign regulations would be contrary to a Ninth Circuit decision, *50United States v. Lee, 937 F.2d 1388 (9th Cir. 1991), which is the only post 1981 Act criminal case defendant has found that addresses the subject. The Lee decision is not binding in this Circuit and should be rejected, for the reasons discussed above.

IV.

THE DISTRICT COURT COMMITTED PREJUDICAL ERROR IN PROHIBITING MCNAB FROM PRESENTING EVIDENCE TO SHOW LACK OF "KNOWING" VIOLATIONS OF LAW.

The Lacey Act is a specific intent crime, making Mr. McNab's knowledge of Honduran law a critical element of proof. By its rulings in limine and its evidentiary rulings the trial court effectively directed a verdict of guilt on that issue.

Prior to trial defendant filed a motion to strike certain allegations in the Indictment. Included was a request to strike that part of paragraph 1 of the Indictment that alleged that "McNab operates one of the largest commercial lobster fishing enterprises in Honduras." In resisting that motion, the Government argued that that allegation "is indeed relevant to his knowledge and intent of how one goes about lobstering in Honduras and whether he's likely to know about a Honduran laws regarding that industry." (R23-25).

The Court instructed the jury, correctly, that an element of the Lacey Act and smuggling charges against defendant was: "THAT THE DEFENDANT ACTED KNOWINGLY - THAT IS, HE KNEW THE IMPORTATION *51 WAS CONTRARY TO LAW." (R33-1591). The Charge continued:

THE GOVERNMENT IS NOT REQUIRED TO PROVE THAT THE DEFENDANT KNEW EXACTLY WHAT LAW WAS VIOLATED WHEN THE LOBSTER TAILS WERE IMPORTED INTO THE UNITED STATES. RATHER, THE GOVERNMENT MUST PROVE BEYOND A REASONABLE DOUBT THAT THE DEFENDANT WAS AWARE THAT THE IMPORTATION WAS ILLEGAL IN ONE OR MORE OF THE WAYS CHARGED.

Id.

Through the course of the trial the Court allowed the Government to prove facts from which the jury might infer that defendant McNab knew the details of Honduran fishing laws and regulations, but prohibited the defendant from putting on evidence from which the jury could infer that defendant did not know such details. Such evidence included DIGEPESCA'S (the Honduran fishing authority) historic treatment of Mr. McNab1s processing and packing practices (excluded at R23-41, 42) and other evidence regarding Government(s)'s inspection and approval of the shipments (excluded at R23-48, 49). The Court allowed U.S. Government agents to testify that McNab's shipments violated the Lacey Act (R30-1241), but refused to allow evidence that Honduran fishing officials had "no problem" with these shipments after review export document reflecting bulk shipment in bags, after inspections of the lobster in Roatan, and even after the Government seized the February, 1999 shipment and it was returned for inspection to Honduras. (R32-1409, 1412 & Folder 4, Exs. 11, 13, 18).

*52 The district court clearly stated its position on this critical point:

The question is whether or not he knows the law. I'm saving what the law is. It's not what DIGEPESCA says the law is. He's not going to be able to offer in evidence that the police down there don't arrest me for taking lobster that are smaller than five inches.

(R23-43). Yet under the law of this circuit such evidence was plainly relevant to defendant McNab's "knowing" violation of the law by establishing that he was not fully knowledgeable of, or was ignorant of, the law as defined by the Court. See U.S. v._ Griqsby, Ill F.3d 806 (11th Cir. 1997). In a prosecution for a specific intent crime, such evidence plainly is admissible in support of a request by defendant that the jury infer that the defendant did not have the requisite mens rea.

CONVICTIONS UNDER THE MONEY LAUNDERING CHARGES ARE DUE TO BE REVERSED.

The money laundering counts allegedly derive from the smuggling counts. The smuggling counts allegedly derive from the Lacey Act counts. The Lacey Act counts allegedly derive from the Honduran violations. Because, as is demonstrated above, there were no Honduran violations, this tower collapses.

Assuming arguendo, however, that the convictions under the Lacey Act could be sustained, these money laundering counts should have been dismissed for independent reasons.

*53 A. The Court Failed to Charge the Jury on the Necessary Elements of a Section 1956(a)(1)(A)(i) Violation.

The charge against McNab which carried the greatest guideline offense level, and so was the basis of his sentence, was for a conspiracy to violate 18 U.S.C. § 1956(a)(1)(A)(i), "money laundering". Section 1956(a)(1)(A)(i) is the "promotion" aspect of § 1956(a)(1) and criminalizes financial transactions in the proceeds of specified unlawful activity when the transactions are made "with the intent to promote the carrying on of specified unlawful activity."

In the charge to the jury on the conspiracy the Court explained the alleged objects of the conspiracy in summary fashion. The District Court's "instruction" informed the jury that Count One of the Indictment alleged that the defendants conspired to violate, among other statutes, § 1956(a)(1) )A) (i), The Court gave no detailed instructions on the elements of the offense (R33-1600). That is, there was no instruction to the jury as to what were the elements of § 1956 that the Government was required to prove beyond a reasonable doubt. And, since there was no substantive § 1956(a)(1)(A)(i) count in the Indictment, the jury charge at no other place explained what the Government was required to show.

In U. S. v. Miller. 22 F. 3d 1075 (11th Cir. 1994), this Court explicitly held that it was plain error for the District *54 Court not to instruct the jury on the essential elements of a 1956 (a) (1) (A) (i) violation, where it was one of four offenses charged under a multi-object conspiracy count, where the jury did not specify which of the four offenses was the basis for its "guilty" verdict, and where the district court treated that statutory offense as the most serious offense for purposes of sentencing. Id. at 1080-81. The present case is on all fours with Miller. This error alone would warrant a remand for re-sentencing.

The risk of a jury verdict of guilty under Section 1956(a)(1)(A)(i), based on an incomplete or inaccurate understanding of the elements of that offense, was exacerbated by the prosecution's comments in closing argument. In the prosecution's initial argument, the prosecutor introduced her "money laundering" discussion with this statement: "You'll also hear then about money laundering charges. Now, it's really perhaps better categorized in this case as a money spending charge..." (R33-1499-1500).

The second critical misleading statement came in the Government's rebuttal. There the prosecutor stated: "The money laundering charge is simply that they spent money that they weren't entitled to have made because they made it from selling illegal products. Don't let them trick you by using those labels." (R33-1562). There was no mention of "promotion." Thus *55 in the two places in closing where the Government addressed the money laundering charge it informed the jury that all that was required was proof that the defendants spent money. Nowhere is there any mention of the "promotion" element of § 1956(a)(1)(A)(i).

The combination of the extraordinarily sketchy reference to "promotion" in the jury charge with the prosecution's distilling the money laundering charges to require only "spending" created an overwhelming risk that the jury convicted McNab for the § 1956(a)(1)(A)(1) conspiracy based solely on evidence that money from his bank account was spent, without regard to the critical "promotion" element. See United States v. Miller, 22 F.3d 1075 (11th Cir. 1994).

B. No 1956 (a)(1) (A) (i) violation was proved.

At trial there was no evidence regarding what happened to the monies paid to McNab for his lobsters after the money was deposited in his company's AmSouth account. McNab was prepared to show it was spent on fuel, equipment, etc. That subject was, however, covered by a stipulation that was announced to the jury and amounted, in its entirety, to the following: "McNab used funds from his Caribbean Dream bank account at AmSouth for both general business and personal expenses." (R31-1270-71). Nothing more.

In United States v. Brown. 186 F.3d 661 (5th Cir. 1999), the *56 defendant was the president of a car dealership ("SGC"). The Indictment alleged that the dealership had engaged in six varieties of fraud connected with its car sales and financing. In addition to the fraud charges, Brown was alleged to have violated § 1956(a)(1)(A)(i) when the money received from the fraudulent transactions was used to pay the expenses of the dealership. The Government justified its "promotion" charge this way:

The government insists that the expenditures did promote fraud. Its theory, which the district court accepted, is that the transactions charged in the indictment promoted the ongoing and future criminal activities at SGC, despite the fact that they were expenditures on the basic operations of the car dealership, because the operation of the dealership was one grand scheme to defraud. In other words, any legitimate operating expense that permitted SGC to stay in business and maintain or increase its customer base would also be an expenditure intended to promote fraud, because it would insure a steady supply of potential victims.

Id. at 669. The Fifth Circuit reversed:

In the case at hand, had the government produced evidence of, say, payments for postage for mailing fraudulent warranty claims, such payments might have provided evidence of an intent to promote fraud. Mere evidence of legitimate business expenditures that were necessary to support SGC's non-fraudulent operations, however, were not enough to establish an intent to promote fraud at SGC, even though the expenditures may in fact have promoted SGC's fraudulent activities by increasing the number of potential fraud victims.

*57 Id. at 670 (emphasis added). The Court observed that its analysis "helps ensure that the money laundering statute will not punish conduct that is really distinct from the underlying specified unlawful activity and will not simply provide overzealous prosecutors with a means of imposing additional criminal liability any time a defendant makes expenditures with funds derived from unlawful acts. Id. See also United States v. Olaniyi-Oke, 199 F.3d 767 (5th Cir. 1999) (computer purchases not shown to have been intended for anything but personal user-conviction under Section 1956(a)(1)(A)(i) reversed).

In the present case, the evidence is even more deficient than in these two Fifth Circuit cases. There was no detailed evidence regarding what happened to the monies after they were deposited in the Caribbean Dream AmSouth account. We know from the stipulation that some of the money went to "personal" uses. That plainly does not support the § 1956 conspiracy conviction. With respect to the stipulated "general business" portion (undefined), there is a total failure of proof that' there was any connection between monies withdrawn from the account and any intent to promote any specified unlawful smuggling activity. The Government wholly failed to prove this money laundering conspiracy.

C. No valid Section 1957 charge was given.

Counts 28 to 39 charged McNab with violation of *5818 U.S.C. § 1957, another money laundering statute. The factual bases for these counts were payments of the purchase price by the buyer of the lobsters into McNab's company's bank account. No other activity by McNab is charged in these counts. The allegation is simply that the person or entity to whom McNab's company sold the lobsters paid for the lobsters by funds transfers into the selling company's bank account.

In United States v. Christo, 129 F.3d 578 (11th Cir. 1997), this Court established that § 1957 is an offense "to be punished separately from an underlying criminal offense." Id. at 579. The main issue in a money laundering charge, therefore, is determining when the predicate crime became a "completed offense" after which money laundering can occur. Id. at 579-580.

Counts 28 to 39 do not charge any conduct whatsoever on the part of McNab. The charge is that his company's bank account received the payment for the sale of the lobsters. The counts also assert that McNab aided and abetted a § 1957 violation by defendant Blandford, but neither those counts nor the incorporated allegations of the Indictment describe any relevant action whatsoever taken by McNab. Section 1957 is phrased in the active voice: "Whoever... knowingly engages in or attempts to engage in a monetary transaction...." There is no allegation in counts 28 to 39 of, and there is no evidence in the record of, any active conduct by McNab in connection with those counts.

*59 As to McNab there were no "proceeds" of the claimed specified unlawful activity until the transfers alleged in these counts was complete. As noted by the Court in Christo, money laundering can occur only after a completed offense. See United States v. Heaps, 39 F.3d 479 (4th Cir. 1994); United States v. Johnson, 971 F.2d 562 (10th Cir. 1992). Thus in United States v. Gregg, 179 F.3d 1312 (11th Cir. 1999), this Court held that an underlying fraud transaction was completed when the monies were deposited into the defendant's account, so there was sufficient evidence to support the conviction for the separate money laundering crimes "when the money was withdrawn." Id. at 1316.

*60 CONCLUSION

In conclusion, defendant McNab submits that the judgment of the District Court must be reversed and the case remanded with instructions to acquit him of all charges because the Honduran laws or regulations upon which he was convicted were either invalid or repealed, were not charged in the indictment, or were unsupported by any evidence of violation. Alternatively, the judgment of the District Court must be reversed and remanded with instructions for a new triail because one or more of the charges to the jury on Honduran law were erroneous and the jury's general verdict makes it impossible to determine whether the jury found McNab guilty on the basis of a valid or invalid charge. Alternatively, a reversal and remand for new trial is necessary on the grounds that the Court committed prejudicial error in the exclusion of evidence relevant to McNab's "knowing" violation of the law. Finally, and alternatively, the case must be remanded for a re-sentencing due to the wrongful convictions under the Money Laundering statutes.

Appendix not available.