United States v. Alan Finkelstein
229 F.3d 90 · Court of Appeals for the Second Circuit · 2000
Facts
Alan Finkelstein, owner of Gold Standard Trading Corporation in the New York City diamond and jewelry district, conspired with other jewelry business owners, including Ahron Sharir, Luis Roges, and Barry Slomovits. Over a nine-year period starting in 1982, his co-conspirators received at least $500 million from narcotics trafficking. Finkelstein, through Gold Standard, laundered over $20 million of these narcotics proceeds and nearly $1.7 million from unlawful gambling and bookmaking activities. He engaged in financial transactions, such as returning checks or repurchasing gold, to disguise the source and ownership of these illegal funds. By 1989, Finkelstein knew the funds were from criminal activity and continued his laundering operations, eventually suspecting the source was narcotics because "people were being arrested right and left" and stating one would have to be "stupid" not to suspect it.
Procedural history
Defendant Alan Finkelstein pleaded guilty in the United States District Court for the Southern District of New York before Judge Deborah A. Batts to money laundering and conspiracy to launder money. He was sentenced principally to 36 months’ imprisonment and ordered to forfeit $300,000. Finkelstein appealed the length of his imprisonment, contending that the district court improperly used a conscious-avoidance theory to enhance his sentence.
Issue
The primary legal question is whether the conscious-avoidance doctrine can be applied to enhance a sentence under Sentencing Guidelines § 2S1.1(b)(1) for knowing that laundered funds were proceeds of narcotics activity, despite the guideline using the term "knew." A secondary issue is whether there was sufficient evidence to support the application of conscious avoidance in this specific case.
Holding
The court rejected Finkelstein's contentions, holding that the conscious-avoidance doctrine is applicable to sentencing enhancements under Guidelines § 2S1.1(b)(1) and that there was sufficient evidence to support its use in this case. The judgment of the district court was affirmed.
Rule
The conscious-avoidance doctrine establishes the knowledge element for an offense if the factfinder is persuaded that the defendant consciously avoided learning a fact while aware of a high probability of its existence, unless the defendant actually believed the contrary. The use of the simple word "knew" in a statute or guideline does not preclude resort to this concept, as "should-have-known" connotes negligence, and the doctrine has been applied to various "knowing" statutes. Sentencing courts are entitled to consider any relevant information, including evidence of conscious avoidance, in determining an appropriate sentence, even if such information would not be admissible at trial, provided the defendant has an opportunity to contest its accuracy.
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