## Facts

- Ubaldo Rivera Colón smuggled large quantities of cocaine into Puerto Rico, generated substantial profits, and laundered proceeds through investments and purchases.
- Elena Corchado-Peralta, Colón’s wife, had a business administration degree and some accounting training and worked part-time in her mother’s jewelry store.
- Corchado carried out financial transactions at Colón’s direction, including deposits and payments and writing and endorsing checks for expensive purchases (cars, boats, real estate, and personal services).
- She signed most of approximately 253 checks tied to purchases involving hundreds of thousands of dollars and made large credit card payments, including a single payment exceeding $18,000.
- She signed joint tax returns reporting modest legitimate income from Colón’s purported business (about $12,390), far below the spending reflected in the transactions she handled.
- Corchado, along with two others, was tried and convicted of conspiracy to launder money under 18 U.S.C. §§ 1956(a)(1)(B)(i) and (h); Corchado was also convicted of bank fraud under 18 U.S.C. § 1344.

## Issues

1. Whether sufficient evidence supported that Corchado knew the property involved in the charged financial transactions represented proceeds of unlawful activity under 18 U.S.C. § 1956(a)(1).
2. Whether sufficient evidence supported that Corchado knew the transactions were designed, at least in part, to conceal or disguise the nature, source, ownership, or control of unlawful proceeds under 18 U.S.C. § 1956(a)(1)(B)(i).
3. Whether sufficient evidence supported Corchado’s conviction for bank fraud under 18 U.S.C. § 1344.

## Decision

- The First Circuit affirmed in part and reversed in part.
- The court held a rational jury could infer Corchado knew or strongly suspected the funds were derived from unlawful activity, given the disparity between reported income and expenditures.
- The court held the evidence was insufficient to prove beyond a reasonable doubt that Corchado knew the transactions were designed to conceal or disguise unlawful proceeds; her money-laundering conspiracy conviction was vacated.
- The court upheld Corchado’s bank-fraud conviction, concluding the evidence was sufficient to support the jury’s verdict on that count.

## Legal Principles

- For a conviction under 18 U.S.C. § 1956(a)(1)(B)(i), the government must prove (1) knowledge that the property involved represents proceeds of unlawful activity and (2) knowledge that the transaction is designed, at least in part, to conceal or disguise the proceeds’ nature, source, ownership, or control.
- The “design to conceal” element requires proof that someone involved had an intent to conceal and that the defendant knew of (or shared) that intent; using or spending illicit proceeds alone does not satisfy § 1956(a)(1)(B)(i).
- Circumstantial evidence (such as an extreme mismatch between reported income and expenditures) can support an inference of knowledge that funds are illicit, but it does not necessarily establish knowledge of a concealment purpose absent evidence of concealment-oriented features (e.g., structuring, layering, or use of nominees known to the defendant).
- On sufficiency review, a conviction must be set aside if no rational jury could find the essential elements beyond a reasonable doubt, even viewing the evidence in the government’s favor.

## Conclusion

The court set aside Corchado’s money-laundering conspiracy conviction because the record supported, at most, that she handled and spent suspect funds, not that she knew the transactions were intended to hide the funds’ criminal origin, while separately sustaining her bank-fraud conviction on sufficient evidence of knowing participation in a scheme to defraud a financial institution.


United States v. Corchado-Peralta, 318 F.3d 255 (1st Cir. 2003)