Share on Facebook
Share on X
Share on LinkedIn

Effrain Santos v. USA, 04-4221 & 05-2316, This is an appeal by the government of proceedings under 28 U.S.C. § 2255, in which the district court vacated Santos’ money laundering conviction on the basis of 7th Circuit decision in United States v. Scialabba, 282 F.3d 475 (7th Cir. 2002), which defined “proceeds” to mean net income, as opposed to gross income.  The government appeals, asking the 7th Circuit to overturn Scialabba and interpret the pivotal term “proceeds” to mean gross income.

HELD:  Scialabba is the law of the 7th Circuit.  Thus, “proceeds” as used in 18 U.S.C. § 1956 “money laundering” statute is net income, not gross income.

The unlawful activity here was an illegal gambling business, specifically, the bolita (“lottery”).  The financial transactions at issue in Santos’s case were payments to the bolita’s collectors and winners.

Specifically, Scialabba held “that the word ‘proceeds’ in § 1956(a)(1) denotes net rather than gross income of an unlawful venture.”

In conclusion the 7th Circuit finds, the government has not presented a compelling reason to overturn Scialabba and its holding that the term “proceeds” in § 1956(a)(1) means net income. Accordingly, the district court’s respective judgments in favor of Santos are AFFIRMED.

USA v. Andre Bennett, 05-3709.  Andre Bennett was charged with being a felon in possession of a firearm, in violation of 18 U.S.C. § 922(g)(1).

At Bennett’s sentencing hearing, the government offered evidence in support of a four-level sentencing enhancement under U.S.S.G. § 2K2.1(b)(5) and called three witnesses to offer testimony regarding what occurred on November 26, 2004.

Based on the testimony, the district court concluded that Bennett pointed a gun at Adams and that under U.S.S.G. § 2K2.1(b)(5), if a defendant uses or possesses any firearm or ammunition in connection with another felony offense, the sentence can be increased by four levels.

Bennett contends that the testimony given at the sentencing hearing by the three witnesses was inconsistent and unreliable.

In the post-Booker era, the 7th Circuit continues to review the district court’s application of the Sentencing Guidelines de novo and its factual findings for clear error. United States v. Bothun, 424 F.3d 582, 586 (7th Cir. 2005). The factual findings of the district court will not be overturned unless the reviewing court is left with the definite and firm conviction that a mistake has been made. United States v. Corral, 324 F.3d 866, 870 (7th Cir. 2003).

The 7th Circuit holds that the district court’s credibility determinations are given great deference and they “cannot be challenged on appeal unless the court credited testimony that was essentially unbelievable as a matter of law.” United States v. Smith, 308 F.3d 726, 746 (7th Cir. 2002) . 

However, the district judge plainly erred in finding that aggravated assault supported a four-level sentencing enhancement under U.S.S.G. § 2K2.1(b)(5). Aggravated assault in Illinois is only a Class A misdemeanor with a possible term of imprisonment that is less than one year. 720 ILCS 5/12-2 (a)(1), (b) (West 2002); 730 ILCS 5/5-8-3 (a)(1) (West 2002).  Since the district judge did plainly err when he enhanced Bennett’s sentence based on misdemeanor conduct, the case is REMANDED for resentencing.

For more about attorney Michael J. Petro, visit