Unreported / Non-Citable
Background
Gustavo Aldana-Martinez was convicted on July 8, 2024, following a jury trial in the Central District of California for his involvement in a drug-trafficking money-laundering conspiracy under 18 U.S.C. § 1956(h). The government presented evidence that Aldana-Martinez, a horse-breeding hobbyist who reported only $8,100 in income over five years, was recruited by Mexican businessmen to run an electronics purchasing operation despite having no relevant experience. He opened bank accounts solely for this venture, through which over $15.5 million in whole-dollar amounts passed, earning him $86,000 in commissions. His company, Gamar Electronics, sent thousands of dollars to an entity with an abandoned storefront and a defective website.
Aldana-Martinez appealed his conviction to the Ninth Circuit, raising three principal challenges: (1) insufficient evidence to support his knowledge of the money-laundering conspiracy; (2) the district court's refusal to give a jury instruction on withdrawal from the conspiracy; and (3) the court's delivery of a modified Allen charge to a deadlocked jury after only a half-day of deliberations. The panel, consisting of Circuit Judges Bumatay, VanDyke, and Mendoza, Jr., determined the case was suitable for decision without oral argument.
The Court’s Holding
The Ninth Circuit affirmed the conviction on all grounds. First, applying de novo review to the sufficiency challenge, the court held that a rational juror could find Aldana-Martinez guilty beyond a reasonable doubt based on circumstantial evidence. The stark contrast between his reported income and the millions flowing through accounts he controlled, his lack of experience in electronics, the whole-dollar transactions, and the suspicious nature of the recipient business collectively supported an inference of knowledge that he was laundering illicit funds.
Second, the court held that the district court did not err in refusing a withdrawal instruction. Whether reviewed for abuse of discretion or de novo, the instruction was unsupported by the evidence. Withdrawal requires affirmative steps to disavow or defeat the conspiracy, but Aldana-Martinez's trial theory was that he never joined the conspiracy and lacked knowledge of it. His ambiguous testimony about the closure of the Gamar Electronics bank account—at times suggesting it closed automatically after a period—amounted at most to passive nonparticipation, which is insufficient for withdrawal. Additionally, the requested instruction erroneously referenced withdrawal "before the overt act," but a § 1956(h) conspiracy does not require proof of an overt act.
Third, the court held that the modified Allen charge did not constitute plain error. Because Aldana-Martinez did not object at trial, review was for plain error. Under the Freeman factors, the charge was not impermissibly coercive: its form was neutral, encouraging the jury to "keep trying" and "talk more about the evidence" while explicitly stating that failure to reach unanimity was "fine"; the speed of the verdict after the charge was not inherently coercive; and there were no other indicia of coercion.
Key Takeaways
- Circumstantial evidence—including unexplained wealth, lack of legitimate business experience, structured whole-dollar transactions, and dealings with shell entities—can suffice to prove knowledge in a money-laundering conspiracy.
- A withdrawal-from-conspiracy instruction requires evidence of affirmative steps to disavow or defeat the conspiracy; passive nonparticipation or ambiguous account closure does not meet this standard.
- A defendant cannot simultaneously maintain a "mere presence" or lack-of-knowledge defense and a withdrawal defense, as withdrawal presupposes prior knowing participation in the conspiracy.
- A money-laundering conspiracy under 18 U.S.C. § 1956(h) does not require proof of an overt act, so a withdrawal instruction premised on action "before the overt act" is legally flawed.
- A modified Allen charge that neutrally encourages continued deliberation, explicitly permits a non-unanimous outcome, and is given without other coercive factors does not constitute plain error.
Why It Matters
The decision reinforces the Ninth Circuit's approach to sufficiency review in money-laundering cases, emphasizing that juries may draw common-sense inferences from financial anomalies and implausible business narratives to establish knowledge. It clarifies the evidentiary threshold for withdrawal instructions, confirming that a defendant who denies any participation cannot later claim withdrawal, and that passive conduct is insufficient. The ruling also affirms trial courts' discretion in managing deadlocked juries, holding that a balanced, non-coercive Allen charge—even after brief deliberations—survives plain-error review. Together, these holdings provide practical guidance for prosecutors and defense counsel in structuring conspiracy cases and jury-instruction strategies.