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United States v. Robert Kenneth Decker, 17-15007 (2020)

Court: Court of Appeals for the Eleventh Circuit Number: 17-15007 Visitors: 8
Filed: Oct. 27, 2020
Latest Update: Oct. 27, 2020
Summary: USCA11 Case: 17-15007 Date Filed: 10/27/2020 Page: 1 of 20 [DO NOT PUBLISH] IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT _ No. 17-15007 _ D.C. Docket No. 1:16-cr-20769-DMM-1 UNITED STATES OF AMERICA, Plaintiff - Appellee, versus ROBERT KENNETH DECKER, a.k.a. DigitalPossi2014, Defendant - Appellant. _ Appeal from the United States District Court for the Southern District of Florida _ (October 27, 2020) Before JORDAN and JILL PRYOR, Circuit Judges, and COOGLER, * District Judge.
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           USCA11 Case: 17-15007          Date Filed: 10/27/2020       Page: 1 of 20



                                                                      [DO NOT PUBLISH]

                  IN THE UNITED STATES COURT OF APPEALS

                            FOR THE ELEVENTH CIRCUIT
                              ________________________

                                     No. 17-15007
                               ________________________

                        D.C. Docket No. 1:16-cr-20769-DMM-1

UNITED STATES OF AMERICA,

                                                                        Plaintiff - Appellee,

                                            versus

ROBERT KENNETH DECKER,
a.k.a. DigitalPossi2014,


                                                                      Defendant - Appellant.

                               ________________________

                      Appeal from the United States District Court
                          for the Southern District of Florida
                            ________________________

                                     (October 27, 2020)

Before JORDAN and JILL PRYOR, Circuit Judges, and COOGLER, ∗ District
Judge.

COOGLER, District Judge:



∗ Honorable L. Scott Coogler, United States District Judge for the Northern District of Alabama,
sitting by designation.
            USCA11 Case: 17-15007          Date Filed: 10/27/2020       Page: 2 of 20



       Robert Kenneth Decker (“Decker”) appeals his convictions, following a

guilty plea, for conspiracy to distribute a controlled substance, in violation of 21

U.S.C. §§ 841(a)(1), 846, and conspiracy to commit money laundering, in violation

of 18 U.S.C. § 1956(a)(1)(B)(i), (h). Decker argues for the first time on appeal that

the district court erred by failing to ensure that a factual basis existed for his guilty

plea as required by Federal Rule of Criminal Procedure 11(b)(3). 1

       After careful review and having had the benefit of oral argument, 2 we

conclude that Decker waived his right to appellate review of the factual sufficiency

of his plea by failing to object to the magistrate judge’s report and recommendation

that the district court accept his guilty plea. We nonetheless review Decker’s Rule

11(b)(3) claims for plain error under an exception to the waiver rule, but we

conclude that they fail under plain-error review. Accordingly, we affirm Decker’s

convictions and sentence.

I.     Background

       A.      Course of Proceedings Below

1
       Decker raised a second issue in his initial brief, arguing that the district court violated
Fed. R. Crim. P. 32 by failing to ensure that he had reviewed the presentence investigation report
(“PSI”) prior to sentencing. On June 12, 2018, this Court granted in part and denied in part the
United States’ motion to dismiss this appeal, holding specifically that this second issue was
barred by the appeal waiver in Decker’s plea agreement.
2
         On December 5, 2019, the Government notified the Court that the docket entry included
in the appellate index that was identified as the transcript of Decker’s sentencing hearing was not
in fact the correct transcript but was rather a transcript of an unrelated proceeding. The
Government moved to supplement the record with the correct sentencing hearing transcript. The
motion is GRANTED.
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      In October 2016, a grand jury in the Southern District of Florida returned an

indictment against Decker based upon allegations of unlawful behavior conducted

over a collection of encrypted digital networks known as the “dark web.” The

indictment charged Decker with conspiracy to distribute a controlled substance,

which was a mixture and substance containing a detectable amount of

hydromorphone, hydrocodone, and oxycodone, in violation of 21 U.S.C.

§§ 841(a)(1), 846 (Count 1), and conspiracy to launder the proceeds of his drug

offenses, in violation of 18 U.S.C. § 1956(a)(1)(B)(i), (h) (Count 2).

      On December 12, 2016, Decker pled guilty to both counts of the indictment

before a magistrate judge and pursuant to a written plea agreement. The magistrate

judge issued a report and recommendation recommending that the district court

accept Decker’s guilty plea as to both counts. The district court adopted the

magistrate judge’s report and recommendation on February 14, 2017.

      On February 16, 2017, the district court sentenced Decker to 140 months’

imprisonment, followed by a three-year supervised release term. Decker did not

file a timely notice of appeal, but he filed a motion pursuant to 28 U.S.C. § 2255

explaining that his counsel had failed to file a notice of appeal despite Decker’s

instructions that he do so. As a result, the district court entered a new judgment of

conviction, re-imposing the same sentence, which permitted Decker to file a timely

notice of appeal. Decker remains incarcerated.


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      B.     The Factual Proffer

      According to the agreed-to factual proffer presented at Decker’s change of

plea hearing, the federal charges against him arose from a Drug Enforcement

Administration (“DEA”) investigation into a narcotics vendor, known as

“DigitalPossi2014,” who had been illegally selling narcotics online using the

services of several dark web internet marketplaces. The factual proffer explained

that “[d]ark [w]eb marketplace[s] allow vend[o]rs, in conspiracy with the unknown

marketplace administrators, to distribute controlled substances anonymously online

and launder the proceeds through a series of complex bitcoin transaction[s]

designed to conceal the nature, source, and control of the funds.”

      The proffer explained that in order to investigate DigitalPossi2014, DEA

agents working undercover bought hydrocodone and hydromorphone pills from

DigitalPossi2014 online and received the purchased narcotics by U.S. Mail at

mailboxes in the Southern District of Florida. The drugs were purchased online

from Nucleus Market, Dream Market, and AlphaBay Market, all anonymous dark

web internet marketplaces, using bitcoin to pay for the drugs. In the factual proffer,

Decker admitted that DigitalPossi2014 had “conducted thousands of transactions

on numerous Dark Web marketplaces” selling prescription opiate pills. He further

admitted that DigitalPossi2014 had conducted 10,738 transactions on Alphabay

Market selling opiate pills including hydrocodone, oxycodone, OxyContin,


                                          4
         USCA11 Case: 17-15007       Date Filed: 10/27/2020   Page: 5 of 20



Percocet, hydromorphone, and morphine.

      Decker also admitted in the factual proffer that DigitalPossi2014 had placed

an advertisement in a medical marijuana marketplace and provided his cellphone

number. The advertisement stated, “I’m on the dark web and I sell a lot on there,”

noting “I have nothing but great reviews.” The DEA tracked the telephone number

listed in the advertisement to Decker’s address in Detroit, Michigan, and traced the

packages of controlled substances they had received from DigitalPossi2014 to a

post office box issued to Decker. Cars registered to Decker and his wife were in

the driveway at Decker’s Detroit address, and a review of Decker’s finances

revealed that Decker had spent over $15,000 on www.stamps.com and at the

United States Post Office since March 2014.

      Decker’s financial records also showed that Decker had a bitcoin account

with Coinbase, a bitcoin wallet host and exchanger, under the name

DigitalPossi2014. The factual proffer explained that “[a] preliminary analysis of

the bitcoin block chain revealed that the majority of Decker’s incoming bitcoin

transactions in his Coinbase account originated from dark net markets such as

Agora Marketplace, Nucleus Market, and Evolution Marketplace.” The

investigation also revealed that Decker used LocalBitcoins, a bitcoin exchange

often used by dark web members, to anonymously exchange his bitcoin drug

proceeds for fiat currency.


                                         5
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      The factual proffer further noted that Decker used the name “digitally

possible” on public social media, and his e-mail address was

“digitalpossi2014@yahoo.com.” A search warrant executed at Decker’s Detroit

residence revealed mail packing materials and shipping labels with the P.O. Box

number on the return label and handwritten notes containing drug quantities. The

agents also seized Decker’s computers and cell phones.

      C.     The Plea Colloquy

      Prior to accepting Decker’s guilty plea, the magistrate judge asked Decker a

series of questions to ensure that Decker understood the proceedings, was not

under the influence of any drugs, had received advice of counsel, and was

voluntarily agreeing to plead guilty. Decker confirmed that he was not under the

influence of any drugs, that he had received and read the indictment and had

discussed it with his attorney, and that he was fully satisfied with the legal

representation he had received. He also acknowledged that he had read and

reviewed the written plea agreement with his attorney before signing it and

understood the terms of the agreement.

      The magistrate judge further read the charges to Decker who confirmed that

he was guilty of the charges and had no questions about them. The magistrate

judge then asked that the factual proffer that the parties had agreed to be entered

into the record in lieu of Decker describing the charges, and both parties agreed. At


                                           6
         USCA11 Case: 17-15007        Date Filed: 10/27/2020   Page: 7 of 20



the conclusion of hearing, when asked whether he was guilty of the charges set out

in the indictment, Decker again confirmed that he was guilty. Thereafter, the

magistrate judge stated his finding that “the defendant is fully competent and

capable of entering an informed plea; that the defendant is aware of the nature of

the charges and the consequences of his pleas of guilty; and the pleas of guilty are

knowing and voluntary pleas supported by an independent basis in fact containing

all of the material elements of the offenses.”

      In the report and recommendation filed by the magistrate judge after the

change of plea hearing, the magistrate judge advised that he had conducted the plea

colloquy with Decker “in conformity with the requirements of Rule 11 of the

Federal Rules of Criminal Procedure.” Among other things, the report and

recommendation further stated that the factual proffer, made part of the record and

executed by the Government, Decker, and his counsel, included all the essential

elements of the offenses to which he was pleading guilty. The report and

recommendation noted that Decker had 14 days in which to file any written

objections to the report and recommendation with the district court and warned that

failure to file timely objections may bar Decker from attacking on appeal the

factual findings contained within the report and recommendation. Decker did not

file any objections.

II.   Legal Standards


                                          7
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      Decker argues for the first time on appeal that the district court failed to

comply with Rule 11(b)(3), which requires the district court, before accepting a

guilty plea, to determine that there is an independent factual basis for the plea.

Decker contends that, with regard to Count 1 of the indictment, which charged a

violation of 21 U.S.C. §§ 841(a)(1), 846, conspiracy to distribute controlled

substances, the factual proffer failed to identify a co-conspirator, an agreement, or

the “mixture” of narcotics that he agreed to distribute. He argues with regard to

Count 2, which charged conspiracy to commit money laundering in violation of 18

U.S.C. § 1956(a)(1)(B)(i), (h), that the proffer not only failed to identify a co-

conspirator, but that it also lacked support in fact for any of the elements of

substantive money laundering. Decker thus contends that his convictions must be

vacated, and his case remanded, to give him an opportunity to plead anew.

      Generally, where a defendant fails to raise Rule 11 violations in the district

court, this Court reviews the district court’s findings for plain error. See United

States v. Vonn, 
535 U.S. 55
, 58 (2002); United States v. Puentes-Hurtado, 
794 F.3d 1278
, 1285–86 (11th Cir. 2015). However, pursuant to Federal Rule of Criminal

Procedure 59(b)(2),3 a defendant who fails to make timely objections to a


3
      Rule 59(b)(2) states:

      Objections to Findings and Recommendations. Within 14 days after being served
      with a copy of the recommended disposition, or at some other time the court sets, a
      party may serve and file specific written objections to the proposed findings and


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           USCA11 Case: 17-15007           Date Filed: 10/27/2020       Page: 9 of 20



magistrate judge’s report and recommendation within 14 days of the issuance of

the report waives his right to appellate review, even for plain error. See also United

States v. Garcia-Sandobal, 
703 F.3d 1278
, 1283 (11th Cir. 2013) (holding that the

defendant waived his argument that the district court should not have accepted his

guilty plea by failing to file objections to the magistrate judge’s report and

recommendation that the district court accept his plea); United States v. Latchman,

512 F. App’x 908, 909 (11th Cir. 2013) (per curiam) (relying upon Rule 59(b)(2)

and Garcia-Sandobal to hold that the waiver applies to a defendant’s challenge to

the factual basis of her guilty plea pursuant to Rule 11(b)(3)). 4

       Eleventh Circuit Rule 3-1 echoes the warning contained in Rule 59(b)(2),

stating:

       A party failing to object to a magistrate judge’s findings or
       recommendations contained in a report and recommendation in
       accordance with the provisions of 28 U.S.C. § 636(b)(1) waives the
       right to challenge on appeal the district court’s order based on
       unobjected-to factual and legal conclusions if the party was informed
       of the time period for objecting and the consequences on appeal for
       failing to object.



       recommendations. Unless the district judge directs otherwise, the objecting party
       must promptly arrange for transcribing the record, or whatever portions of it the
       parties agree to or the magistrate judge considers sufficient. Failure to object in
       accordance with this rule waives a party’s right to review.
4
        Unpublished opinions are not considered binding precedent but may be cited as
persuasive authority insofar as their legal analysis warrants. Bonilla v. Baker Concrete Const.,
Inc., 
487 F.3d 1340
, 1345 n.7 (11th Cir. 2007) (citing United States v. Rodriguez-Lopez, 
363 F.3d 1134
, 1138 n.4 (11th Cir. 2004)).


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          USCA11 Case: 17-15007          Date Filed: 10/27/2020      Page: 10 of 20



11th Cir. R. 3-1. But even without a proper objection, Rule 3-1 provides that a

“court may review on appeal for plain error if necessary in the interests of justice.”
Id. See also Padgett
v. United States, 791 F. App’x 51, 53 n.1 (11th Cir. 2019) (per

curiam) (relying upon the waiver provision in Rule 3-1 to review unobjected-to

claims in a 28 U.S.C. § 2255 proceeding for plain error only).5

       Based on the foregoing authority, we conclude that Decker waived his right

to appellate review of the factual sufficiency of his plea by failing to file written

objections to the magistrate judge’s report and recommendation, which stated that

the factual proffer contained all essential elements of the offenses charged.

However, we believe that the instant case warrants application of the “interests of

justice” exception found in Rule 3-1, primarily because the Government did not

raise waiver pursuant to Rules 59(b)(2) or 3-1 in its initial brief, instead arguing

that plain-error review applied to Decker’s claims, and only attempted to raise the

waiver defense through the filing of a letter several days before oral argument. 6

Therefore, we will examine Decker’s Rule 11(b)(3) claims for plain error.

       Federal Rule of Criminal Procedure 52(b) provides that “[a] plain error that

affects substantial rights may be considered even though it was not brought to the




5
       See note 
4, supra
.
6
       New arguments are generally waived when not raised in a party’s initial brief. See KMS
Rest. Corp. v. Wendy’s Int’l, Inc., 
361 F.3d 1321
, 1328 n.4 (11th Cir. 2004).
                                              10
         USCA11 Case: 17-15007        Date Filed: 10/27/2020    Page: 11 of 20



[district] court’s attention.” Fed. R. Crim. P. 52(b). To prevail on plain error

review, a defendant must show: 1) “an error that has not been intentionally

relinquished or abandoned”; 2) that the error was “plain—that is to say, clear or

obvious”; and 3) that the error “affected the defendant’s substantial rights.”

Molina-Martinez v. United States, 
136 S. Ct. 1338
, 1343 (2016) (citing United

States v. Olano, 
507 U.S. 725
, 732–34 (1993)). Once these conditions are met, we

may “exercise [our] discretion to correct the forfeited error if the error ‘seriously

affects the fairness, integrity or public reputation of judicial proceedings.’” Id.

(quoting 
Olano, 507 U.S. at 736
). “Meeting all four prongs is difficult, ‘as it should

be.’” Puckett v. United States, 
556 U.S. 129
, 135 (2009) (quoting United States v.

Dominguez Benitez, 
542 U.S. 74
, 83 n.9 (2004)).

      For an error to be plain, it must be clear or obvious under current law, see

Olano, 507 U.S. at 734
, “rather than subject to reasonable dispute,” 
Puckett, 556 U.S. at 135
. “[T]here can be no plain error where there is no precedent from the

Supreme Court or this Court directly resolving it.” United States v. Lange, 
862 F.3d 1290
, 1296 (11th Cir. 2017) (quoting United States v. Lejarde-Rada, 
319 F.3d 1288
, 1291 (11th Cir. 2003) (per curiam)). If there is not a case squarely on point,

however, there may be plain error where a decision “appears to be particularly

egregious, and strikes at a core principle embodied in the violated law or rule.”

United States v. Dean, 
487 F.3d 840
, 847 (11th Cir. 2007).


                                           11
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       Whereas the standard for a plain error is high, the evidentiary threshold of

Rule 11(b)(3) is low. A district court’s finding of a factual basis for a guilty plea

under Rule 11(b)(3) does not require “uncontroverted evidence of guilt” but only

“evidence from which a court could reasonably find that the defendant was guilty.”

United States v. Rodriguez, 
751 F.3d 1244
, 1255 (11th Cir. 2014). See also 1A

Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure, § 180

(5th ed. 2020) (“The quantum of evidence needed to supply a factual basis [under

Rule 11(b)(3)] takes less evidence than would be needed to sustain a conviction at

trial; something closer to a rational basis is all that courts may require.”).

       As we explain below, Decker cannot show that the district court committed

plain, i.e., “clear” or “obvious,” error in concluding that there was an independent

factual basis for his guilty plea to Counts 1 and 2. See 
Olano, 507 U.S. at 734
.

Thus, we need not address the other prongs of the plain-error inquiry.

III.   Application

       A.      Count 1

       Decker first argues that that the factual proffer failed to establish a basis for

his guilty plea to Count 1, conspiracy to distribute a controlled substance in

violation of 21 U.S.C. §§ 841(a)(1), 846, because the proffer did not identify any

known conspirator or establish the existence of any unknown conspirator with

whom he agreed to sell drugs. To obtain a conspiracy conviction, the government


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must prove an agreement between two or more persons to commit a crime. See

United States v. Ndiaye, 
434 F.3d 1270
, 1294 (11th Cir. 2006). “While . . . ‘an

individual can be convicted of conspiracy with unknown persons referred to in the

indictment,’” a conspiracy conviction cannot be sustained when “the government

has not proven the existence of unknown persons.” United States v. Arbane, 
446 F.3d 1223
, 1228 n.8 (11th Cir. 2006) (emphasis added) (quoting United States v.

Figueroa, 
720 F.2d 1239
, 1244–45, 1245 n.8 (11th Cir. 1983)).

      We find no plain error in the district court’s conclusion that the factual

proffer sufficiently established that Decker conspired with unknown dark web

marketplace administrators to illegally distribute controlled substances. Decker

agreed in the proffer that the Government could prove beyond a reasonable doubt

that the user “DigitalPossi2014” repeatedly sold controlled substances on dark web

marketplaces, which “allow[ed] vend[o]rs, in conspiracy with the unknown

marketplace administrators, to distribute controlled substances anonymously online

and launder the proceeds through a series of complex bitcoin transaction[s]

designed to conceal the nature, source, and control of the funds.” He also admitted

that the Government could prove beyond a reasonable doubt facts that would

support a conclusion that he was the person operating the “DigitalPossi2014”

accounts on those dark web marketplaces.




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      While Decker now complains that the factual proffer did not identify any

specific acts of the dark web marketplace administrators or communications

between the administrators and Decker, such specificity is not required to establish

a conspiracy. “The existence of an agreement may be proven by circumstantial

evidence, including ‘inferences from the conduct of the alleged participants or

from circumstantial evidence of a scheme.’” United States v. Silvestri, 
409 F.3d 1311
, 1328 (11th Cir. 2005) (quoting United States v. Tamargo, 
672 F.2d 887
, 889

(11th Cir. 1982)). The Government may establish the defendant’s knowledge of an

illegal agreement by showing that the defendant knew the conspiracy’s essential

objectives. United States v. Russell, 
703 F.2d 1243
, 1250 (11th Cir. 1983).

      It was not irrational for the district court to have inferred from the factual

proffer that Decker knowingly and intentionally used dark web marketplaces that

were deliberately established by unknown administrators to promote and assist his

illegal narcotics sales, protect his identity, and conceal the source of the payments

he received. Like any other large-scale drug trafficker, Decker needed the

assistance of knowledgeable distributors to make sales. Without the knowing

assistance of the administrators of those websites named in the factual proffer,

Decker would not have admittedly sold more than 10,000 illegal pills and received

payment for those transactions while remaining anonymous. See United States v.

Reeves, 
742 F.3d 487
, 500 (11th Cir. 2014) (“[E]fforts to conceal a conspiracy may


                                          14
         USCA11 Case: 17-15007       Date Filed: 10/27/2020    Page: 15 of 20



support the inference that a defendant knew of the conspiracy and joined it while it

was in operation.”). The factual proffer provided sufficient facts from which the

district court could reasonably find that Decker conspired with unknown dark web

administrators to sell drugs.

      Decker also argues that because the indictment charged that he conspired to

sell “a mixture and substance containing a detectable amount of hydromorphone,

hydrocodone, and oxycodone,” but the factual proffer did not specifically refer to

any “mixture,” the factual proffer did not establish that Decker distributed the same

mixture of compounds charged in the indictment. We disagree.

      The factual proffer reflected Decker’s admission that he sold “prescription

opiate pills” including hydromorphone pills, hydrocodone pills, oxycodone pills,

and pills containing other specified chemical compounds online. It correctly

specified the quantities of hydromorphone, hydrocodone, oxycodone, and other

controlled substances that Decker sold. From the admission that Decker sold pills

containing these compounds, a district court could reasonably find that Decker

conspired to distribute mixtures containing these substances. And Decker offers no

authority or citation for the proposition that a factual proffer must specifically

describe a “mixture” of compounds, especially when the indictment also referred

to a “substance.” The absence of authority supporting Decker’s position prohibits

us from finding that a plain error occurred. See 
Lange, 862 F.3d at 1296
. Nor does


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Decker challenge the fact that he sold the drugs identified in the factual proffer.

Under these circumstances, the district court did not plainly err in accepting the

factual proffer’s detailed description of the controlled substances that Decker

conspired to and did sell.

      B.      Count 2

      Decker also argues that that the factual proffer failed to establish a basis for

his guilty plea to Count 2, conspiracy to commit money laundering in violation of

18 U.S.C. § 1956(a)(1)(B)(i), (h), because, as he argued with regard to Count 1, the

proffer did not identify any co-conspirator, either known or unknown, with whom

he agreed to launder the proceeds of his drug sales. To establish a conspiracy to

commit money laundering under 18 U.S.C. § 1956(h), the Government must show

“(1) agreement between two or more persons to commit a money-laundering

offense; and (2) knowing and voluntary participation in that agreement by the

defendant.” United States v. Broughton, 
689 F.3d 1260
, 1280 (11th Cir. 2012).

      We find no plain error in the district court’s conclusion that there was a

factual basis to support that Decker was guilty of conspiring with unknown dark

web marketplace administrators to launder drug proceeds. The factual proffer

stated that the dark web, which Decker admittedly utilized, “allow[s] vend[o]rs, in

conspiracy with the unknown marketplace administrators, to . . . launder the

proceeds [of drug sales] through a series of complex bitcoin transaction[s]


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         USCA11 Case: 17-15007       Date Filed: 10/27/2020    Page: 17 of 20



designed to conceal the nature, source, and control of the funds.” The proffer also

included an analysis of Decker’s financial records that showed that Decker had a

bitcoin account under the username DigitalPossi2014 with Coinbase, a bitcoin

wallet host and exchanger, and that most of his incoming bitcoin transactions

within Coinbase originated from dark web markets such as Agora Marketplace,

Nucleus Market, and Evolution Market. Decker also admitted that he then would

use LocalBitcoins, a bitcoin exchange that was frequently used by dark web

vendors, to exchange bitcoin for fiat currency. Although Decker complains that the

proffer did not identify any specific bitcoin transaction, it may rationally be

inferred that the administrators of these dark web marketplaces went to great

lengths to assist Decker and others in concealing the true source of their drug

proceeds by using bitcoin and making it impossible for law enforcement to discern

who Decker sold drugs to and how much he received on each sale. Taken together,

the dual efforts of Decker and the marketplace administrators to conceal the source

of drug sale proceeds allows the reasonable conclusion that Decker engaged in a

conspiracy with administrators to commit money laundering.

      Decker also contends that the factual proffer failed to establish any of the

four elements of the substantive money laundering offense. To be guilty of money

laundering, a defendant must have

      (1) knowingly conducted a “financial transaction,” (2) which he knew
      involved funds that were the proceeds of some form of unlawful
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      activity, (3) where the funds involved in the financial transaction in fact
      were the proceeds of a “specified unlawful activity,” and (4) that the
      defendant engaged in the financial transaction knowing that the
      transaction was designed in whole or in part to conceal or disguise the
      nature, location, source, ownership, or control of the proceeds of such
      unlawful activity.

United States v. Tarkoff, 
242 F.3d 991
, 994 (11th Cir. 2001) (citing United States

v. Majors, 
196 F.3d 1206
, 1212 (11th Cir. 1999)).

      With regard to the first three elements, the proffer established that Decker

used bitcoin, that most of his bitcoin transactions originated from dark web

marketplaces such as Agora Marketplace, Nucleus Market, and Evolution

Marketplace, and that his outgoing bitcoin transactions went to a peer-to-peer

exchange often utilized by vendors to anonymously exchange drug proceeds for

fiat currency. Further, the proffer established that DEA agents purchased

controlled substances from Decker on Nucleus Market and other dark web

marketplaces in exchange for bitcoin. The proffer thus connected Decker’s use of

the dark web to his sale of drugs for bitcoin. The district court could have

reasonably determined that Decker knew his bitcoin transactions on the dark web

involved drug proceeds.

      Decker also argues that the use of bitcoin does not suffice to demonstrate

concealment, the fourth element of money laundering. While one’s use of bitcoin

as a monetary instrument, alone, does not ipso facto mean that one engaged in a

financial transaction related to unlawful activities, the factual proffer here
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established not only that Decker used bitcoin but also that he used bitcoin to sell

drugs to undercover DEA agents, that he sold drugs on marketplaces that vendors

frequently use to launder drug proceeds, and that his outgoing bitcoin transactions

were sent to a peer-to-peer exchange frequently used to conceal the origin of the

bitcoin funds by trading anonymously for fiat currency.7

       Decker’s final argument is that the factual proffer failed to show any

financial transaction separate and apart from the underlying drug sales. See 
Majors, 196 F.3d at 1212
(“A violation of the concealment provision must ‘follow in time’

the completion of the underlying transaction as an activity designed to conceal or

disguise the origins of the proceeds.” (quoting United States v. Dimeck, 
24 F.3d 1239
, 1246 (10th Cir. 1994)). We disagree with Decker’s argument. The proffer

established distinct transactions to conceal illicit drug proceeds. The proffer

described how the dark web marketplaces not only help vendors distribute drugs

but also help them “launder the proceeds through a series of complex bitcoin

transaction[s] designed to conceal the nature, source, and control of the funds.”

The proffer further established that Decker sent outgoing bitcoin transactions to

LocalBitcoins, a “peer-to-peer exchange often utilized by dark web vend[o]rs to

anonymously exchange bitcoins drug proceeds for fiat currency.” Thus, the district


7
      Relatedly, Decker argues, almost in passing, that “the money laundering statute does not
encompass financial transactions in bitcoins.” As Decker admits, no court has adopted this
argument. So even assuming there was error, it was not plain.
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          USCA11 Case: 17-15007     Date Filed: 10/27/2020   Page: 20 of 20



court could have reasonably concluded that Decker engaged in a series of

transactions in which he first anonymously exchanged drugs for bitcoin, then

anonymously exchanged bitcoin for fiat currency to conceal the origin of the funds.

III.   Conclusion

       Because Decker failed to object to the magistrate judge’s report and

recommendation, he waived the ability to challenge the district court’s acceptance

of that recommendation, and there is no basis to find plain error for purposes of

Rule 3-1’s “interests of justice” exception. Accordingly, the judgment of the

district court is

       AFFIRMED.




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