United States of America v. Dwayne W. Sherman

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
____________
No. 23-2996
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UNITED STATES OF AMERICA
v.
DWAYNE W. SHERMAN,
Appellant
____________
On Appeal from the United States District Court
for the Middle District of Pennsylvania
(D.C. Criminal No. 1:20-cr-00157-001)
District Judge: Honorable Jennifer P. Wilson
____________
Submitted Under Third Circuit L.A.R. 34.1(a)
on October 31, 2024
Before: HARDIMAN, PHIPPS, and FREEMAN, Circuit
Judges
(Opinion filed: January 16, 2025)

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Michael A. Consiglio
Carlo D. Marchioli
Office of United States Attorney
Middle District of Pennsylvania
Sylvia H. Rambo United States Courthouse
1501 N 6th Street, 2nd Floor
P.O. Box 202
Harrisburg, PA 17102
Counsel for Appellee
Thomas A. Thornton
Frederick W. Ulrich
Office of Federal Public Defender
100 Chestnut Street
Suite 306
Harrisburg, PA 17101
Counsel for Appellant
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OPINION OF THE COURT
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FREEMAN, Circuit Judge.
A jury tried and convicted Dwayne Sherman of money
laundering, conspiracy to commit money laundering, and
conspiracy to distribute cocaine. He was sentenced to 262
months’ imprisonment. In this appeal, he argues that the
evidence was insufficient to sustain his convictions, the
government’s proof of the drug conspiracy at trial
impermissibly varied from the charge in the indictment, and

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the District Court erred at sentencing in finding that his drug
offense involved possession of a dangerous weapon. For the
following reasons, we will affirm the judgment.
I
A grand jury returned an indictment charging Sherman
with several offenses related to drug trafficking in Central
Pennsylvania. The operative indictment charged him with six
counts of money laundering, in violation of 18 U.S.C. §
1956(a)(2)(B); one count of conspiracy to possess with the
intent to distribute 500 grams or more of cocaine, in violation
of 21 U.S.C. § 846; and one count of conspiracy to launder
money, in violation of 18 U.S.C. § 1956(h). The drug-
conspiracy charge arose from events alleged to have occurred
in Pennsylvania, California, and elsewhere from on or about
2012 to May 2018.
At trial, the government presented evidence of
Sherman’s drug trafficking activities. Paul Alston, a drug
dealer in Lancaster, testified that he met Sherman in early 2013
and started buying his weekly supply of cocaine from him.
Sherman told Alston that he got his cocaine from California,
and he sold one or two kilograms of cocaine to Alston each
week starting in summer 2013. Sherman stopped selling to
Alston in March 2014 when Sherman found a tracking device
on his vehicle and feared that he was under investigation by
law enforcement.
The government also presented evidence that Sherman
dropped off large quantities of drug proceeds to individuals in
Harrisburg on three occasions between October 2015 and
January 2016. (The six money-laundering counts of the
indictment corresponded to these three drops—two counts per

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drop.) On each occasion, Sherman handed over cash
($277,000, $170,000, and $108,000, respectively) that was
destined for Mexico. Sherman and the informants used coded
language when discussing the money drops, and Sherman
drove evasively and used other countersurveillance techniques
when leaving the drops.
FBI informant Ruben Martin testified that he received
the cash from Sherman during the first and third money drops.1
Before each of those drops, Martin called Sherman and used
the code phrase “on behalf of your brother” to arrange the
meeting. App. 279, 452.
During the first drop, Sherman put two bags into the
backseat of Martin’s vehicle. Martin asked how many “titles”
were in the bags, and Sherman replied that there were 277,
which meant the bags contained $277,000. App. 314–15.
Martin used the term “titles” because his cover for drug
trafficking was a company that transported cars on car carriers.
After Martin received the cash from Sherman, he turned it over
to FBI agents, who counted and logged it before returning it to
Martin. Back in his role as a co-conspirator, Martin arranged
with contacts in Mexico to deliver the cash (minus a
commission) to a courier in San Diego. The FBI surveilled that
exchange and others as the money continued to change hands.
Ultimately, the FBI recovered much of the money from a
vehicle it stopped just before it crossed the border into Mexico.
Agents recovered nearly $208,000 in sealed bags floating in
the vehicle’s gas tank.
1 “Ruben Martin” is the pseudonym the witness was permitted
to use at trial due to safety concerns.

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The second and third money drops began in the same
way: An FBI informant called Sherman to arrange a meeting,
and FBI agents observed as the informant received bags of cash
from Sherman in Harrisburg. The FBI then shepherded the
cash and the informant to San Diego, where the informant
passed the cash to someone else who drove the cash toward the
Mexican border. Although the FBI surveilled the vehicles until
just before they crossed the border, agents did not intercept the
vehicles containing the cash from the second and third drops.
At trial, Martin testified that the drug proceeds from the
money drops belonged to a Mexican drug trafficker named
Carlos Beltran. In January 2016, after Sherman’s second
money drop, Martin traveled to Tijuana to meet with Beltran.
They met at a casa de cambio (a currency exchange business)
owned by a man who works as a broker for Beltran and other
members of Mexican drug cartels. Beltran asked Martin to
expand his role by carrying money and drugs to additional
regions of the United States. Beltran said he had millions of
dollars in New York and hundreds of thousands of dollars in
the Harrisburg area. Because the money from Sherman’s first
drop got seized, Beltran said he wanted Martin to transport
money in smaller quantities in the future to minimize the risk.
The two men met again at the same Tijuana casa de
cambio in early April 2016. During that meeting, Beltran
asked Martin to use his trucks to deliver 50 to 60 pounds of
methamphetamine or heroin to Sherman in Harrisburg. Beltran
explained that he could fly drugs from Mexico to Los Angeles
and then to New York. During this conversation, Beltran
referred to Sherman as his partner. He specified that Sherman
would pay Martin for the drugs at the time of delivery and that
Martin would keep a percentage of the money. This plan never
materialized.

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The jury also heard that Sherman was arrested for drug
offenses in California later in April 2016. Police in Los
Angeles County surveilled him as he purchased two kilograms
of cocaine and about 15,000 pills from a DEA informant. They
arrested him, and he admitted having the cocaine and pills in
his car. (He thought the pills were oxycontin, but most of them
turned out not to contain any controlled substance.) At trial in
the instant case, the government did not connect the drugs
Sherman bought in Los Angeles County to Beltran, but it
presented evidence that Sherman crossed the United States-
Mexico border four weeks before his Los Angeles County
arrest. That was one of Sherman’s fourteen United States-
Mexico border-crossings between 2012 and 2018.
Finally, an IRS criminal investigator testified that he
examined bank records for accounts held by Sherman and his
wife. Sherman’s account activity from 2014 through mid-2016
showed no indication of legitimate employment, such as
payroll or paycheck deposits. However, it showed frequent
cash deposits in amounts up to $6,500, totaling about $49,000
over that 28-month period. Sherman’s wife’s small business
account activity reflected very few business expenses but
numerous cash deposits of between $100 and $8,000. The cash
deposits to that account totaled roughly $160,000 over a three-
year period from 2014 to 2017.
The IRS investigator testified that banks are required to
report any cash withdrawal or deposit of more than $10,000 to
a Federal Crime Enforcement Network. Additionally, federal
law requires any individual who transfers, sends, or carries
more than $10,000 into or out of the United States to report that
activity to federal agencies, which use the reports for law
enforcement purposes. In the investigator’s experience, drug
traffickers know about those reporting requirements. When

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United States currency is exchanged or handed over to another
person at a casa de cambio in Mexico, those transactions are
not reported to United States law enforcement agencies. Thus,
those transactions are not subject to investigation.
After the government rested its case, Sherman testified
in his own defense. He admitted that he sold cocaine in
Lancaster between 2012 and 2014, and “maybe sometimes in
[20]15.” App. 439. He also admitted making the three money
drops in 2015 and 2016, though he claimed he did not know
the money was drug-related and made the drops at the request
of his brother, who lived in Mexico. He also claimed not to
know what his brother did for work. Sherman said he obtained
the money from his brother’s associate in Virginia, and he did
not ask where the money came from because “if you start
asking questions, then people start thinking you’re telling and
you’re trying to set somebody up.” App. 434. Nonetheless, he
acknowledged knowing it was “[m]ost likely” that the money
came from criminal activity, and when asked why he did not
openly state the amount of cash when he had phone calls about
the money drops, he explained that “the phones could be
tapped, traced, whatever, so you just don’t talk like that on the
phones.” App. 450.
Sherman admitted that on the date of his April 2016
arrest in California, he had purchased two kilograms of cocaine
to resell to others. He also admitted that he drove to Mexico
and California in his pickup truck, which was equipped with a
hidden trap. He had the trap installed by someone in Mexico
and used it to hide valuable items. Between January and May
2018, he crossed the United States-Mexico border an estimated
twelve times.

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Sherman testified that his wife kept a few handguns in
their house during the periods when he stored the cash for the
money drops in his home. The guns were locked in a safe but
accessible to him as a means of protecting his home. He
acknowledged that his wife and children could be in danger if
people knew he was storing hundreds of thousands of dollars
in the family’s home, and he testified that he would do anything
in his power to protect his family from danger.
The jury found Sherman guilty on all counts. He filed
a motion for a new trial, challenging the weight and the
sufficiency of the evidence. The District Court denied the
motion but vacated Sherman’s convictions for three of the
substantive money-laundering counts. It concluded that the
pairs of money-laundering counts charged for each money
drop were separate means of committing a single offense.
At sentencing, the District Court found that Sherman
possessed a firearm in connection with a drug offense. It relied
on Sherman’s trial testimony that handguns were present and
accessible to him in his house when he was also storing large
quantities of drug proceeds there. Accordingly, over
Sherman’s objection, the Court applied the Sentencing
Guidelines’ dangerous-weapon enhancement. U.S.S.G.
§ 2D1.1(b)(1). It then calculated a Guidelines range of 262 to
327 months’ imprisonment, and imposed a sentence of 262
months’ imprisonment. Sherman timely appealed.

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II2
Sherman challenges the sufficiency of the evidence
supporting each count of his conviction. Although we exercise
plenary review of the sufficiency of the evidence at trial, “that
plenary review is greatly tempered by giving substantial
deference to the jury’s finding of guilt.” United States v.
Lacerda, 958 F.3d 196, 225 (3d Cir. 2020) (citing Jackson v.
Virginia, 443 U.S. 307, 318–19 (1979)). Accordingly, “[w]e
review the record in the light most favorable to the prosecution
to determine whether any rational trier of fact could have found
proof of guilt beyond a reasonable doubt.” United States v.
Caraballo-Rodriguez, 726 F.3d 418, 430 (3d Cir. 2013) (en
banc) (cleaned up).
A
To convict Sherman of money laundering under 18
U.S.C. § 1956(a)(2)(B)(i), the government had to prove that he
“(1) attempted to transport funds from the United States to
Mexico, (2) knew that these funds represented the proceeds of
some form of unlawful activity, e.g., drug trafficking, and (3)
knew that such transportation was designed to conceal or
disguise the nature, the location, the source, the ownership, or
the control of the funds.” Regalado Cuellar v. United States,
553 U.S. 550, 561 (2008) (cleaned up); 18 U.S.C.
§ 1956(a)(2)(B)(i). The third element “requires proof that the
purpose—not merely effect—of the transportation was to
2 The District Court had subject-matter jurisdiction under 18
U.S.C. § 3231. We have jurisdiction under 28 U.S.C. § 1291
and 18 U.S.C. § 3742(a).

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conceal or disguise a listed attribute” of the money. Regalado
Cuellar, 553 U.S. at 567.
In Regalado Cuellar, the government obtained a
conviction under § 1956(a)(2)(B)(i) by presenting evidence
that the defendant hid drug-trafficking proceeds while
transporting them from the United States to Mexico. Id. at
553–54 (recounting that law enforcement found $81,000 in
cash in a secret compartment covered with animal hair under
the rear floorboard of the defendant’s vehicle, bundled in
plastic bags and duct tape). At trial, the government also
introduced testimony that transporting money secretly is
consistent with drug smuggling. Id. at 567. But it “failed to
introduce any evidence that that the reason drug smugglers
move money to Mexico is to conceal or disguise a listed
attribute of the funds.” Id. (emphasis added). Absent evidence
of purpose, the Supreme Court concluded that no reasonable
jury could have found concealment or disguise was the purpose
of the transportation. Id. at 568.
Sherman argues that his case is on all fours with
Regalado Cuellar and his convictions for money laundering
and the related conspiracy must be vacated. Not so. Sherman’s
trial record contains what was lacking at Regalado Cuellar’s
trial: evidence of purpose to conceal the nature or source of the
funds. In the light most favorable to the prosecution, the
evidence shows that Sherman was a long-time drug trafficker
in Central Pennsylvania. He sent over $500,000 of drug-
trafficking proceeds to Mexico for his partner Beltran.3 He did
3 Despite Sherman’s argument to the contrary, a reasonable
jury could infer from the trial evidence that he knew the funds

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so by making three money drops to people he did not know but
who identified themselves using code phrases. He also used
coded terms when discussing the money to thwart the law
enforcement agencies that had reason to tap his phone. And he
sought to evade law-enforcement surveillance when travelling
to make the money drops. Sherman, like other drug traffickers,
knew how to handle money without making a financial paper
trail that would tip off law enforcement to his illegal activity.
He was careful to make no bank transactions of more than
$10,000 cash, and he sent large quantities of cash across the
Mexican border secreted in traps or gas tanks. The cash was
delivered to Beltran and converted to Mexican currency at a
Mexican casa de cambio to further disguise the origin and
nature of the funds. Based on this evidence, a reasonable jury
could conclude that the purpose of transporting the money
from the United States to Mexico was to conceal its nature or
source.
Sherman also argues that the government did not prove
he knew the illicit purpose of transporting the money from the
United States to Mexico. He points to his trial testimony,
where he admitted suspecting the money came from criminal
activity but denied having actual knowledge of the money’s
criminal origins. But the District Court properly instructed the
jury that it could rely on circumstantial evidence to find that
Sherman had actual knowledge of the illicit purpose, or it could
find knowledge from Sherman’s willful blindness. See
Caraballo-Rodriguez, 726 F.3d at 425, 431, 433–34
from the money drops were bound for Mexico. Sherman
admitted making the money drops as a favor for his brother in
Mexico, and Martin testified that the cash belonged to
Sherman’s partner drug-trafficker who resides in Mexico.

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(permitting knowledge to be proven in a drug-conspiracy case
based on actual knowledge or willful blindness). Willful
blindness “is deemed to satisfy a scienter requirement of
knowledge” where “the defendant himself [was] subjectively
aware of the high probability of the fact in question[.]” Id. at
420 n.2 (quoting United States v. Wert-Ruiz, 228 F.3d 250, 255
(3d Cir. 2000)). Here, Sherman testified that he did not ask his
brother where the money-drop cash came from because that
would sound like a set-up, and he admitted thinking that the
cash was “[m]ost likely” from criminal activity, App. 450.
Based on that evidence, a reasonable jury could find that
Sherman was willfully blind to the illicit purpose of
transporting the cash.
B
The drug-conspiracy count of the indictment charged
Sherman with conspiring with unnamed individuals to
distribute and possess with intent to distribute at least 500
grams of cocaine from 2012 to May 2018 in the Eastern
District of Pennsylvania, the Middle District of Pennsylvania,
the Southern District of California, and elsewhere. The trial
evidence easily supported the conviction. Sherman admitted
selling cocaine in Lancaster (in the Eastern District of
Pennsylvania) from 2012 to 2014 and possibly 2015. Alston
testified that he bought up to two kilograms of cocaine from
Sherman each week during that period and that Sherman got
the cocaine from California. There was also considerable
evidence that Sherman conspired with Beltran, his brother, or
both to deliver drug proceeds from Harrisburg to Mexico in
2015 and 2016. During those deliveries, Sherman passed the
drug proceeds to individuals in Harrisburg (in the Middle
District of Pennsylvania), those individuals passed the money
to others in Los Angeles (in the Southern District of

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California), and then the money made its way to Mexico.
Additionally, Sherman admittedly bought cocaine in Los
Angeles County (in the Southern District of California) in
April 2016 with the intent of reselling it, and he frequently
drove his trap-equipped truck between Pennsylvania, Mexico,
and California during the relevant years. This is ample
evidence upon which a reasonable jury could infer that
Sherman and others “could not have carried out their activities
except as the result of a preconceived scheme or common
understanding.” United States v. Bailey, 840 F.3d 99, 108 (3d
Cir. 2016) (cleaned up).
III
Next, Sherman argues that the government’s evidence
of the drug conspiracy impermissibly varied from the charge
in the indictment. Instead of proving one conspiracy, Sherman
argues that the government presented only evidence of three
unrelated conspiracies: one with Alston from 2013 to 2014, a
second with Beltran from October 2015 to January 2016, and
a third with individuals in California in April 2016.
“A defendant alleging a variance between a single
conspiracy charged in an indictment and the proof presented at
trial must demonstrate, first, that there was such a variance and,
second, that the variance prejudiced one of his substantial
rights.” United States v. Perez, 280 F.3d 318, 345 (3d Cir.
2002) (quoting United States v. Quintero, 38 F.3d 1317, 1337
(3d Cir. 1994)). We need not address whether there was a
variance because, even if the conduct alleged varied from the
conduct proven, it did not prejudice Sherman’s substantial
rights.

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The rule against variances has at least three purposes.
United States v. Kemp, 500 F.3d 257, 291 (3d Cir. 2007). First,
it protects a defendant’s right “not to be tried en masse for the
conglomeration of distinct and separate offenses committed by
others.” Id. (quoting United States v. Schurr, 775 F.2d 549,
553 (3d Cir. 1985)). In that way, it seeks to prevent a jury from
“transfer[ring] guilt from one alleged co-schemer to another”
or permitting evidence of other defendants’ actions in a
separate conspiracy to spill over into its consideration of the
evidence against the defendant. Id. (cleaned up). Second, “the
rule ensures that a defendant has adequate notice of the charges
being brought against him.” Id. (citing Perez, 280 F.3d at 345).
Third, it “helps to minimize the danger that the defendant may
be prosecuted a second time for the same offense,” based on “a
principle akin to double jeopardy.” Id. (quoting Schurr, 775
F.2d at 554).
Sherman does not argue that he suffered prejudice
related to any of these three purposes. Instead, he argues that
the variance prejudiced his substantial rights by (1) permitting
the government to introduce prejudicial evidence of extra-
venue conduct that would otherwise have been inadmissible
under Fed. R. Evid. 404(b), and (2) putting him at risk of being
convicted by jurors who did not agree on the same conspiracy.
Neither argument is availing.
A
Sherman’s first prejudice argument relates to his pre-
trial motion to dismiss the drug-conspiracy count for lack of
venue. In that motion, he argued that the drug-conspiracy
count involved conduct with no connection to the Middle
District of Pennsylvania. But the government can generally
prosecute a conspiracy offense “in any district in which such

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offense was begun, continued, or completed,” 18 U.S.C. §
3237(a), or “wherever a co-conspirator has committed an act
in furtherance of the conspiracy,” United States v. Renteria,
903 F.3d 326, 329 (3d Cir. 2018) (quoting Perez, 280 F.3d at
329). Because the indictment alleged that at least part of the
conspiracy took place in the Middle District of Pennsylvania,
the District Court denied the motion.
On appeal, Sherman does not challenge the District
Court’s venue ruling directly. Instead, he argues that the
variance between the indictment and the trial evidence led to
the admission of prejudicial, extra-venue propensity
evidence—specifically, his 2016 drug arrest in Los Angeles
County (in the Southern District of California) and his dealings
with Alston in Lancaster (in the Eastern District of
Pennsylvania). In his view, his dealings with Beltran
constituted the only drug trafficking conspiracy properly
before the Middle District of Pennsylvania jury. And he argues
that evidence of extra-venue conduct was the only evidence
supporting that the conspiracy with Beltran involved cocaine
as opposed to some other controlled substance.
We disagree. First, the evidence he challenges was not
evidence of other crimes. See Fed. R. Evid. 404(b) (governing
the use of “[e]vidence of any other crime, wrong, or act”). It
was evidence of the crime charged in the indictment: a cocaine-
trafficking conspiracy that spanned six years and at least three
judicial districts. If believed, it directly proved that Sherman
acted with others to distribute or possess with intent to
distribute cocaine. Cf. United States v. Green, 617 F.3d 233,
248 (3d Cir. 2010) (holding that evidence of an uncharged
crime is intrinsic evidence of the charged offense—and need
not be analyzed under Rule 404(b)—“if it directly proves the
charged offense” (cleaned up)). Second, while Sherman is

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correct that no evidence specified that the money drops he
made between October 2015 and January 2016 involved
cocaine proceeds, the jury was free to infer the identity of the
drug from other evidence—including his cocaine sales to
Alston in 2012 and 2013 and his purchase of two kilograms of
cocaine in California in April 2016. Sherman points to no
authority (and we know of none) that the government only can
charge conspiracies that involve conduct in a single district.
Here, the government charged a cross-district conspiracy and
the District Court admitted evidence proving that conspiracy.
The admission of that evidence did not prejudice Sherman’s
substantial rights.
B
Sherman also contends that evidence of three
conspiracies prejudiced his right to a unanimous verdict. He
argues that the government put him “at risk of being convicted
where jurors based their finding of guilt on different potential
conspiracies.” Appellant’s Br. at 57.4
We discern no prejudice to Sherman’s right to a
unanimous jury. The District Court instructed the jury of its
duty to reach a unanimous verdict. It also correctly instructed
4 Sherman argues that the prejudice to his right to a unanimous
verdict was exacerbated by two aspects of trial: the
government’s closing argument about unanimity and the
District Court’s failure to give a specific unanimity instruction
sua sponte. He did not object to the closing argument or the
lack of a specific unanimity instruction during trial, and on
appeal he makes no independent claims of error based on these
aspects of trial.

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the jury that it could not convict Sherman of the drug-
trafficking conspiracy unless it found that he knowingly joined
an agreement with at least one other person who shared the
intent to distribute or possess with intent to distribute cocaine.
See United States v. Boria, 592 F.3d 476, 481 (3d Cir. 2010).5
After deliberating, the jury convicted Sherman of conspiracy
to distribute or possess with intent to distribute cocaine from
on or about 2012 to May 2018. It also unanimously agreed that
the object of the conspiracy was to distribute or possess with
intent to distribute 500 grams or more of cocaine. Given the
instructions, the verdict, and the evidence admitted at trial
(which included Sherman’s admitted cocaine sales, his
admitted money drops amounting to over $400,000 in cash,
and his arrest in possession of over two kilograms of cocaine),
we are unpersuaded that the jury was not unanimous as to
Sherman’s guilt of the charged conspiracy.
IV
Lastly, Sherman challenges the District Court’s finding
that he possessed a dangerous weapon in connection with a
drug offense. Based on that finding, the Court imposed the
dangerous-weapon sentencing enhancement. U.S.S.G.
5 To the extent that Sherman contends that the jury needed to
be unanimous about the identity of his co-conspirators, he is
incorrect. See United States v. Edmonds, 80 F.3d 810, 823 (3d
Cir. 1996) (“[T]he law of conspiracy . . . generally has not
required the jury to unanimously agree on the identity of the
defendant’s co-conspirators.”); Boria, 592 F.3d at 481 (stating
the elements of conspiracy, which do not include the identity
of the other conspirator(s)).

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§ 2D1.1(b)(1) (providing for a two-level increase to a
defendant’s base offense level “[i]f a dangerous weapon
(including a firearm) was possessed” in connection with
certain offenses involving drugs). We review the factual
finding for clear error. United States v. Denmark, 13 F.4th 315,
317–18 (3d Cir. 2021).
Relying on Sherman’s testimony that he had access to
handguns in his house when he stored drug proceeds there, the
Court found a sufficient connection between Sherman’s
constructive possession of the guns and the drug trafficking
conspiracy. The record supports this finding, so there is no
clear error. See Henderson v. United States, 575 U.S. 622, 626
(2015) (“Constructive possession is established when a person,
though lacking . . . physical custody, still has the power and
intent to exercise control over the object.”).
* * *
For the reasons set forth above, we will affirm the
District Court’s judgment.

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