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21-1711(L)

U.S. v. Aybar-Peguero

In the

United States Court of Appeals

For the Second Circuit

________

AUGUST TERM 2022

ARGUED: NOVEMBER 1, 2022

DECIDED: JULY 6, 2023

No. 21-1711(L), 21-1847(Con)

UNITED STATES OF AMERICA,

Appellee,

v.

FRANCIS JOSE AYBAR-PEGUERO, AKA GRENA,

Defendant-Appellant.

________

Appeal from the United States District Court

for the District of Connecticut.

________

Before: WALKER, LEE, and NATHAN, Circuit Judges. 

________
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Defendant-Appellant Francis Jose Aybar-Peguero pled guilty 

to drug trafficking in violation of 21 U.S.C. §§ 841 and 846 and 

concealment money laundering in violation of 18 U.S.C. 

§ 1956(a)(1)(B)(i). During his plea colloquy, speaking through a 

Spanish-English interpreter, Aybar-Peguero repeatedly failed to 

acknowledge that he had intended to conceal the proceeds of his drug 

trafficking, an element of concealment money laundering. On appeal, 

Aybar-Peguero contends that his conviction for concealment money 

laundering should be reversed because an insufficient factual basis 

existed for his guilty plea pursuant to Rule 11 of the Federal Rules of 

Criminal Procedure. We agree. 

For the reasons that follow, we VACATE Aybar-Peguero’s

§ 1956(a)(1)(B)(i) conviction and sentence, and REMAND for 

proceedings consistent with this opinion. 

________

ELIZABETH A. LATIF, West Hartford, CT, for

Defendant-Appellant Francis Jose Aybar-Peguero.

JOCELYN C. KAOUTZANIS (Marc H. Silverman, on 

the brief), Assistant United States Attorneys, for 

Leonard C. Boyle, United States Attorney for the 

District of Connecticut, New Haven, CT, for 

Appellee the United States of America.

________
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JOHN M. WALKER, JR., Circuit Judge:

Defendant-Appellant Francis Jose Aybar-Peguero pled guilty 

to drug trafficking in violation of 21 U.S.C. §§ 841 and 846 and 

concealment money laundering in violation of 18 U.S.C. 

§ 1956(a)(1)(B)(i). During his plea colloquy, speaking through a 

Spanish-English interpreter, Aybar-Peguero repeatedly failed to 

acknowledge that he had intended to conceal the proceeds of his drug 

trafficking, an element of concealment money laundering. On appeal, 

Aybar-Peguero contends that his conviction for concealment money 

laundering should be reversed because an insufficient factual basis 

existed for his guilty plea pursuant to Rule 11 of the Federal Rules of 

Criminal Procedure. We agree. 

For the reasons that follow, we VACATE Aybar-Peguero’s

§ 1956(a)(1)(B)(i) conviction and sentence, and REMAND for 

proceedings consistent with this opinion.

BACKGROUND

Between May 2019 and October 2019, Aybar-Peguero 

conspired with members of a drug trafficking organization to sell 

narcotics out of his convenience store, the Corner Mini Market in 

Waterbury, Connecticut. Following an extensive investigation, law 

enforcement agents arrested Aybar-Peguero and searched his store. 

They found large quantities of heroin and fentanyl, other evidence of 

drug trafficking such as digital scales and a concealed compartment,

and, in the store’s cash register, drugs packaged for distribution. 

Although the agents noted the absence of a point-of-sale system and 
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cash register receipts as well as outdated and dusty merchandise—

indicia that the store was a front for drug trafficking—they concluded 

that the store also did legitimate business as its shelves were stocked 

and it had heavy foot traffic. The parties later stipulated that AybarPeguero was responsible for trafficking approximately one kilogram 

of heroin and 400 grams of fentanyl. 

During the relevant period, Aybar-Peguero maintained three 

bank accounts, a business checking account, a personal checking 

account, and a personal savings account. Law enforcement financial 

analysts concluded that Aybar-Peguero concealed the proceeds of his 

drug trafficking by depositing them into these accounts along with 

his store’s legitimate earnings. 

Aybar-Peguero agreed to plead guilty to one count of 

conspiracy to distribute and to possess with intent to distribute heroin 

and fentanyl in violation of 21 U.S.C. §§ 841 and 846 and one count of 

concealment money laundering in violation of 18 U.S.C. 

§ 1956(a)(1)(B)(i).1 In his petition to change his plea from not guilty 

to guilty, Aybar-Peguero stated that he “knowingly conducted [and] 

was involved in a financial issue, and knew that [it] was from illegal 

acts.” App’x 59. 

1 The parties agree that the plea agreement’s appeal waiver does not 

bar an appeal that, as here, “challenges . . . the process leading to the plea.” 

United States v. Lloyd, 901 F.3d 111, 118 (2d Cir. 2018).
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On September 30, 2020, Aybar-Peguero appeared before 

Magistrate Judge Donna F. Martinez (the matter having been referred 

to her by District Judge Vanessa L. Bryant) to plead guilty to the two 

agreed-upon counts. At the plea proceeding, Aybar-Peguero, 

through a Spanish-English interpreter, first allocuted to drug 

trafficking, which is not at issue in this appeal. With respect to the 

concealment money laundering count, the prosecutor outlined the 

elements of that crime, including that the defendant conducted a 

financial transaction “with the intent to conceal the proceeds of the 

specified unlawful activity.” App’x 114. Aybar-Peguero began his 

allocution by stating that he “was involved in this financial 

transaction through illegal acts, and I know that I did this and that it’s 

illegal.” App’x 116. The magistrate judge then engaged 

Aybar-Peguero in a further colloquy:

THE COURT: I’m trying to understand what the conduct 

was underneath the money laundering count. Did you 

. . . get money from the drug dealing?

THE DEFENDANT: Yes, I did receive money.

THE COURT: And what did you do with it?

THE DEFENDANT: I put it in the bank.

THE COURT: And why did you do that? Why did you 

put it in the bank?

THE DEFENDANT: I don’t know. It was a way to save 

my money.
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THE COURT: Did you want to hide that it was from the 

drug dealing?

THE DEFENDANT: It wasn’t so much hiding it from 

drugs. I was also working. I wanted to put it with the 

money that I was making.

THE COURT: So you put it with money from legitimate 

sources. Is that what you’re saying?

THE DEFENDANT: What do you refer to with 

legitimate accounts?

THE COURT: Okay. So I don’t know what the 

Defendant is trying to tell me, Mr. DiLibero. Why don’t 

you take a moment with him so that he can tell me a little 

bit more about the money laundering, the concealment. 

App’x 117. After the break, the hearing continued:

THE COURT: All right. What do you want to tell me, 

Mr. Aybar?

THE DEFENDANT: I was putting money from my work 

and I was joining it with money from the drugs. 

App’x 118. 

The magistrate judge moved on, asking the government to 

summarize its evidence. With respect to money laundering, the

prosecutor stated that Aybar-Peguero had deposited cash linked to 
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drug trafficking in both his business and personal accounts “to 

conceal his illegally owned profits in that he was using the mini 

market as a front.” App’x 120. The government also pointed to the 

store’s lack of a point-of-sale system and the absence of cash register 

receipts as suggesting that “there appeared to be no legitimate 

business.” App’x 120. When asked whether he agreed with the 

government’s position, Aybar-Peguero answered:

THE DEFENDANT: I’m not too much in agreement 

because not all of that money came from drugs. There 

was some of it that came from my work. So both of them 

were there. 

App’x 121. The government then acknowledged that the store did 

some legitimate business.

Without any additional discussion or mention of the 

defendant’s intent in commingling drug and legitimate business 

proceeds, the magistrate judge recommended that the district court

accept Aybar-Peguero’s guilty plea. The district court later adopted 

the magistrate judge’s Findings and Recommendations, accepted the 

plea, and found Aybar-Peguero guilty of conspiracy to distribute and 

possession with intent to distribute controlled substances as well as 

concealment money laundering. The district court sentenced AybarPeguero to concurrent prison terms of 87 months for the two counts 

of conviction as well as a period of supervised release, a fine, and a 

special assessment.
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DISCUSSION

Rule 11 of the Federal Rules of Criminal Procedure sets forth 

the procedures by which guilty pleas may be entered and accepted. 

As we “have long emphasized, a guilty plea is no mere formality, but 

a grave and solemn act.” United States v. Lloyd, 901 F.3d 111, 118 (2d 

Cir. 2018) (internal quotation and alteration marks omitted). Because 

“[c]lose and regular adherence to the Rule’s demands bears heavily 

on the legitimacy of the plea-bargaining system as a whole,” id. at 119, 

we “examine critically even slight procedural deficiencies to ensure 

that the defendant’s guilty plea was a voluntary and intelligent 

choice, and that none of the defendant’s substantial rights ha[s] been 

compromised,” United States v. Livorsi, 180 F.3d 76, 78 (2d Cir. 1999)

(internal quotation marks omitted).

At issue here is Rule 11(b)(3), which requires the district court 

to “determine that there is a factual basis for the plea” “[b]efore 

entering judgment on a guilty plea.” This is not a difficult standard 

to meet—the court need not scrutinize the evidence or personally 

conclude that the defendant is guilty—but it is an essential one. See 

United States v. Maher, 108 F.3d 1513, 1524 (2d Cir. 1997). Specifically,

the court must “assure itself . . . that the conduct to which the 

defendant admits is in fact an offense under the statutory provision 

under which he is pleading guilty.” Id. The Rule also requires the 

district court to assess whether, based on the “facts at its disposal” 

including but not limited to “the defendant’s own admissions,” the 

offense conduct satisfies the elements of the statute under which the 

defendant seeks to plead guilty. Irizarry v. United States, 508 F.2d 960, 
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967 (2d Cir. 1974). As part of this process, it is critical that the 

defendant’s colloquy with the district court include an admission that 

covers the elements of the offense charged. See Brady v. United States, 

397 U.S. 742, 748 (1970) (“Central to the plea and the foundation for 

entering judgment against the defendant is the defendant’s admission 

in open court that he committed the acts charged in the indictment.”). 

Where, as here, “a defendant raises on appeal a claim of Rule 

11 error that he did not raise in the district court, that claim is 

reviewable only for plain error.” United States v. Torrellas, 455 F.3d 96, 

103 (2d Cir. 2006). To satisfy this “heavy burden,” an appellant “must 

demonstrate that (1) there was error, (2) the error was plain, and (3) 

the error prejudicially affected his substantial rights; if such error is 

demonstrated, we will reverse . . . only when (4) the error seriously 

affected the fairness, integrity or public reputation of judicial 

proceedings.” Lloyd, 901 F.3d at 119–20 (internal quotation marks 

omitted). To demonstrate prejudice under the third prong, “a 

defendant who seeks reversal of his conviction after a guilty plea, on 

the ground that the district court committed plain error under Rule 

11, must show a reasonable probability that, but for the error, he 

would not have entered the plea.” United States v. Dominguez Benitez, 

542 U.S. 74, 83 (2004).

Aybar-Peguero’s sole argument on appeal is that the district 

court erred by accepting his guilty plea for concealment money 

laundering without a factual basis for the plea. Specifically, he 

contends that there was no basis for the court to conclude that he had 
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the mens rea required by the statutory provision under which he was 

convicted. That provision, § 1956(a)(1)(B)(i), provides that: 

Whoever, knowing that the property involved in a 

financial transaction represents the proceeds of some 

form of unlawful activity, conducts or attempts to 

conduct such a financial transaction which in fact 

involves the proceeds of specified unlawful activity . . . 

knowing that the transaction is designed in whole or in part 

. . . to conceal or disguise the nature, the location, the 

source, the ownership, or the control of the proceeds of 

specified unlawful activity . . . shall be [guilty].

18 U.S.C. § 1956(a)(1)(B)(i) (emphasis added). The parties agree that 

this “concealment element of [the] statute requires that the purpose, 

not merely the effect, of the endeavor must be to conceal or disguise” 

the proceeds of illicit activity. Government’s Br. 24 (quoting United 

States v. Garcia, 587 F.3d 509, 512 (2d Cir. 2009).

According to Aybar-Peguero, “the record does not provide a 

sufficient factual basis to conclude that [he] knew the relevant 

transactions were intended to conceal the nature, source, or 

ownership of the laundered funds.” Appellant’s Br. 10. The 

government disagrees, arguing that the defendant’s statements at the 

plea hearing as well as the subsequently completed presentence 

report (PSR) provided the district court with an adequate basis for 

accepting the plea. 

After a careful examination of the entire record, we agree with

Aybar-Peguero that the evidence in the record at the time of the plea 
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hearing did not satisfy the mens rea requirement for concealment 

money laundering. Aybar-Peguero never acknowledged a 

concealment purpose, and there was not sufficient evidence 

elsewhere in the record to warrant accepting the plea. Thus, the 

district court lacked a sufficient basis to accept his guilty plea. 

In both his pre-plea petition and his initial oral statement to the 

magistrate judge, Aybar-Peguero stated only in the most general 

terms that he had engaged in illegal financial transactions; he did not 

speak to his intent in doing so. In the former, he wrote: “I was 

involved in a financial issue, and I knew that [it] was from illegal acts. 

I did this and it is illegal.” App’x 59. Similarly, at the hearing, when 

the magistrate judge asked him to describe his conduct, he said: “I 

was involved in this financial transaction through illegal acts, and I 

know that I did this and that it’s illegal.” App’x 116. But a 

defendant’s characterizing his conduct as “illegal” does not make it 

so. A defendant may characterize his conduct as illegal yet be 

unaware of the elements of the offense. As the advisory committee’s

note to the 1966 amendments to Rule 11 explains, the Rule’s factual 

basis requirement “protect[s] a defendant who is” pleading guilty but 

does not “realiz[e] that his conduct does not actually fall within the 

charge.” 

Aybar-Peguero’s subsequent colloquy with the magistrate 

judge undermines the government’s claim that he admitted to the 

necessary mens rea. In response to the court’s questioning, AybarPeguero stated that his purpose in depositing the drug trafficking

proceeds in the bank was “to save my money.” App’x 117. When the 
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court specifically queried whether his motivation had been “to hide 

that [the money] was from the drug dealing,” he replied in substance 

that it was not. Id. He said: “It wasn’t so much hiding it from drugs. 

I was working. I wanted to put it with the money that I was making.” 

Id.

The government argues that Aybar-Peguero’s opening phrase,

“[i]t wasn’t so much hiding it,” means that he had both the motive to 

hide the funds and the motive to save the funds. We disagree. Read 

in the context of the entire hearing, it is clear that Aybar-Peguero 

never agreed that he engaged in the transactions with the purpose of 

concealment. That the first six words of his response, which were 

filtered through an interpreter, were not an outright denial is not 

significant. In our view, the clear import of his response was that his

true intent was to save his money by putting it into a bank as he did 

with his legitimate income. 

Apart from the colloquy, the government argues that the record

at the plea hearing contained a sufficient factual basis because the 

intent element was included in the information and plea agreement. 

While it is true that “[w]e have accepted a reading of the indictment 

to the defendant coupled with [an] admission of the acts described in 

it as a sufficient factual basis for a guilty plea,” we require more “if 

the defendant denies an element of the offense or generally maintains 

his innocence.” Godwin v. United States, 687 F.2d 585, 590 (2d Cir. 

1982). Here, Aybar-Peguero’s non-acknowledgement of intent to 

conceal made it incumbent on the court to ensure that the record of 

the plea proceeding contained evidence that the motive, and not just 
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the effect, of Aybar-Peguero’s conduct was concealment. The 

magistrate judge did not do so. Moreover, “a reading of the 

indictment . . . coupled with . . . admission of the acts” is only 

sufficient if “the charge is uncomplicated, the indictment detailed and 

specific, and the admission unequivocal.” Id. In Garcia, we held that 

this “principle is inapplicable” to the concealment element of money 

laundering and rejected “[a]ny argument that the charge is 

uncomplicated and readily understandable by the average layman.” 

587 F.3d at 518. Thus, “[Aybar-Peguero’s] supposed understanding 

of the nature of the charge does not take the government far.” Id.

The government’s assertion that Aybar-Peguero’s 

intermingling of illicit and legitimate funds “reinforces the 

concealment purpose underlying the deposits” is likewise 

unconvincing. Government’s Br. 31 (emphasis added). AybarPeguero had not acknowledged any concealment purpose that this 

intermingling could reinforce. It is not enough that the financial 

transactions had the effect of concealing them; the defendant must 

have had the purpose of doing so. Here, the defendant’s purpose in 

doing so was not established by the colloquy in court and no other 

evidence supported it. 

The government argues in the alternative that the presentence 

report, which was developed after the hearing but before the district 

judge accepted the guilty plea, provided an adequate factual basis for 

the concealment money laundering charge under Rule 11.

At the outset, we do not think that facts adduced after a plea 

hearing may properly be considered by a district judge in accepting a 
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plea. See Garcia, 587 F.3d at 514, 519–20. Here, the PSR was not 

docketed until March 2021, many months after the plea hearing. In 

Irizarry, we expressly disallowed consideration of such “[p]ost hoc” 

evidence—that is, “material [that] was not made a part of the record 

of the proceedings at which the plea was entered”—because “to 

bifurcate the inquiry in this manner would be counterproductive and 

could lead to confusion.” 508 F.2d at 967–68 & n.7. As we have 

reiterated on several occasions, the facts on which the district court 

relies “must . . . be . . . on the record at the time of the giving of the 

plea.” United States v. Adams, 448 F.3d 492, 499 (2d Cir. 2006) 

(emphasis omitted); accord Garcia, 587 F.3d at 514, 519–20; Maher, 108 

F.3d at 1524–25; Irizarry, 508 F.2d at 967–68; see also McCarthy v. United 

States, 394 U.S. 459, 465 (1969) (“Rule [11] is intended to produce a

complete record at the time the plea is entered.” (emphasis added)). It is 

true that in Lloyd, the panel permitted consideration of the post-pleahearing PSR without addressing our precedents to the contrary. See 

901 F.3d at 123–24 & n.9. Thus, as we noted the following year in 

United States v. Murphy, Lloyd is in tension with our prior precedents. 

942 F.3d 73, 87 n.8 (2d Cir. 2019).

To be sure, Rule 11(b)(3) states simply, “[b]efore entering 

judgment on a guilty plea, the court must determine that there is a 

factual basis for the plea.” But this general statement does not speak 

to precisely how and when, before entering judgment on the plea, the 

factual basis should be determined. Those questions have been 

resolved, however, by the above precedents, which hold that the 

factual basis for the plea must be placed on the record at the plea 

hearing. Only in this way can the judge be assured that the defendant 
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is aware not only of the elements of the crime with which he is 

charged, but also that the specific conduct committed satisfies those 

elements. In Lloyd, where the panel permitted consideration of the 

post-plea-hearing PSR, it relied solely on the language of the rule

without regard to prior precedent and thus the analysis was 

incomplete. Accordingly, we conclude that materials not in the 

record at the time of the plea hearing cannot properly be considered

and Irizarry remains good law.

In any event, the record here bears no indication that the district 

court considered the PSR in determining whether there was a factual 

basis for the concealment money laundering plea. In its docket order 

accepting the plea, the district court noted that it had reviewed the 

plea agreement, magistrate judge’s recommendation, and several 

other documents, but it made no mention of the PSR. Rule 11 requires 

the district court to “develop, on the record, the factual basis for the 

plea.” Santobello v. New York, 404 U.S. 257, 261 (1971) (emphasis 

added). Thus, in assessing whether the district court complied with 

Rule 11’s strictures, we may not consider whether any facts that the 

court did not rely on could have furnished the necessary basis.2 

The district court’s error in accepting the plea to concealment 

money laundering does not end our inquiry. To secure vacatur of his

2 In any case, we are doubtful that, even considering the PSR, an 

adequate factual basis existed to accept the plea. Aside from the conclusory 

statement that Aybar-Peguero made the transactions “to conceal the income 

source,” PSR ¶ 30, the PSR is silent as to his mens rea.
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conviction under plain error review, Aybar-Peguero must also show 

that the district court’s error was “plain,” “prejudicially affected his 

substantial rights,” and “seriously affected the fairness, integrity or 

public reputation of judicial proceedings.” Lloyd, 901 F.3d at 119. We

are convinced that Aybar-Peguero meets this standard.

First, the district court’s error is “plain.” To be “plain,” an error 

must be “clear” or “obvious,” United States v. Olano, 507 U.S. 725, 734 

(1993), or “contrary to law that was clearly established,” United States 

v. Donziger, 38 F.4th 290, 303 (2d Cir. 2022) (internal quotation marks 

omitted). Rule 11(b)(3) unmistakably requires a district court to 

ascertain whether a factual basis for a plea exists before accepting a 

guilty plea. “Central to the plea and the foundation for entering 

judgment against the defendant is the defendant’s admission in open 

court that he committed the acts charged in the indictment.” Brady, 

397 U.S. at 748. In this case, Aybar-Peguero did not admit to a 

concealment purpose—an offense element—and the other evidence 

did not establish that intent either. Thus, it is clear and obvious that 

Rule 11(b)(3) was not satisfied.

Second, the district court’s error prejudicially affected 

Aybar-Peguero’s substantial rights. “In the context of a Rule 11 

error,” the prejudice standard “requires ‘a reasonable probability 

that, but for the error, the defendant would not have entered the 

plea.’” Garcia, 587 F.3d at 520 (alteration marks omitted) (quoting 

United States v. Vaval, 404 F.3d 144, 151 (2d Cir. 2005)). In making this 

assessment, we, unlike the district court, are not limited to the record 

evidence at the time of the plea. See Torrellas, 455 F.3d at 103 (“In 
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determining whether the defendant has” shown prejudice, “we 

consider . . . any record evidence . . . as well as the overall strength of 

the Government’s case.” (internal quotation marks omitted)). It 

appears likely that Aybar-Peguero would not have pled guilty to 

violating § 1956(a)(1)(B)(i) had he understood its mens rea requirement 

and been told that he needed to state a concealment purpose. 

Aybar-Peguero was consistent and persistent in maintaining that his 

purpose was otherwise.

Last, the plain and prejudicial error seriously harmed the 

legitimacy of the judicial proceeding. As we observed in Lloyd, a lack 

of close adherence to Rule 11’s requirements, as occurred here, “bears 

heavily on the legitimacy of . . . plea-bargaining.” 901 F.3d at 119. The 

district court’s acceptance of the guilty plea without Aybar-Peguero’s 

acknowledgement that he intended to conceal the source of his funds 

casts serious doubt upon the “fairness, integrity [and] public 

reputation of [the] judicial proceedings.” Id. (internal quotation 

marks omitted).

In sum, we hold that it was plain error for the district court to 

accept Aybar-Peguero’s guilty plea to concealment money laundering 

without a sufficient factual basis in the record at the time of the plea 

hearing.

CONCLUSION

For the foregoing reasons, we VACATE Aybar-Peguero’s 

conviction under § 1956(a)(1)(B)(i) and the sentences for both counts 
18

of conviction. 3 The case is REMANDED to the district court for 

proceedings consistent with this opinion.

3 The parties agree that vacating the § 1956(a)(1)(B)(i) conviction 

necessitates vacating the concurrent sentences imposed for both 

convictions. See United States v. Sperling, 506 F.2d 1323, 1343 (2d Cir. 1974).