2007 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

8-20-2007

USA v. Greenidge

Precedential or Non-Precedential: Precedential

Docket No. 05-4887

Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2007

This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova

University School of Law Digital Repository. It has been accepted for inclusion in 2007 Decisions by an authorized administrator of Villanova

University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu.

Recommended Citation

"USA v. Greenidge" (2007). 2007 Decisions. Paper 500.

http://digitalcommons.law.villanova.edu/thirdcircuit_2007/500
PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

 

No. 05-4887

 

UNITED STATES OF AMERICA

v.

CARLEEN GREENIDGE,

 Appellant

(D.N.J. Criminal No. 03-cr-00253-4)

 

No. 05-5083

 

UNITED STATES OF AMERICA

v.

MARIO PALLITTA,

Appellant

(D.N.J. Criminal No. 03-cr-00253-3)

 

No. 06-2506

 
2

UNITED STATES OF AMERICA

v.

JOSEPH DIGREGORIO,

Appellant

(D.N.J. Criminal No. 03-cr-00253-6)

 

Consolidated Appeal from the United States District Court

for the District of New Jersey

District Judge: Honorable Joseph A. Greenaway, Jr.

 

Submitted Under Third Circuit L.A.R. 34.1(a)

June 29, 2007

 

Before: BARRY, FUENTES, and GARTH, Circuit Judges

(Opinion Filed: July 17, 2007)

Rena Rothfeld, Esq.

19-21 West Mt. Pleasant Avenue

Livingston, NJ 07039

Counsel for Appellant Carleen Greenidge

Kevin F. Carlucci, Esq.

Office of Federal Public Defender

972 Broad Street

Newark, NJ 07102

Counsel for Appellant Mario Pallitta

Henry E. Klingeman, Esq.
3

Greenberg, Dauber, Epstein & Tucker

One Gateway Center

Suite 600

Newark, NJ 07102-5311

Counsel for Appellant Joseph DiGregorio

George S. Leone, Esq.

Sabrina G. Comizzoli, Esq.

Office of United States Attorney

970 Broad Street

Room 700

Newark, NJ 07102

Counsel for Appellee

 

OPINION

 

GARTH, Circuit Judge:

Appellants Joseph DiGregorio, Carleen Greenidge, and

Mario Pallitta appeal their convictions and DiGregorio appeals his

sentence. We have jurisdiction over the challenges to the

convictions pursuant to 28 U.S.C. § 1291, and over the challenge

to the sentence pursuant to 18 U.S.C. § 3742(a). We will affirm.

I.

In October 2001, the Federal Bureau of Investigation began

an investigation into the bank deposits of stolen and altered

corporate checks and the wire transfers of proceeds from those

checks. The investigation revealed a bank fraud and money

laundering conspiracy involving approximately 20 co-conspirators

and a theft of over $5 million.

The conspiracy involved essentially three tiers. At the top

was Melvyn Waldron, a/k/a “Rankin,” who, along with other co-
4

conspirators, obtained stolen checks from mail rooms and post

offices and arranged for those checks to be altered and deposited

into various accounts and for the proceeds to be withdrawn.

Rankin handed the checks off to Samuel Massaquoi, who served as

a liaison between Rankin and Emmanuel Deji, the co-conspirator

who altered the payee names on the checks in exchange for a fee.

In the middle tier of the conspiracy were the “recruiters.” These

recruiters solicited “depositors,” people on the bottom tier of the

conspiracy who were willing to use their personal or business bank

accounts to deposit the stolen and altered checks in order to make

them appear legitimate.

DiGregorio

DiGregorio was recruited into this conspiracy by his bookie,

John Elsis, who cooperated with the government and testified at

trial. DiGregorio told Elsis that the company for which he worked,

KnowYourStuff.com (“KYS”), was struggling financially. Elsis

suggested DiGregorio join this scheme in order to obtain cash for

the company, telling DiGregorio that “you can erase the name of

the company and put your company’s name on the check.” (Pallitta

App. 413.) Elsis told DiGregorio that if he recruited a depositor,

the depositor could keep 50% of the proceeds from the check.

DiGregorio recruited the CEO of KYS, William Nash, at a

November 2001 meeting also attended by Daniel McGowan, head

of sales for KYS. DiGregorio told Nash that he could keep a third

of the funds. Nash, who cooperated with the government, testified

that in order to keep KYS afloat, he would need approximately

$420,000, and so asked DiGregorio to obtain a check for

approximately $1.4 million. DiGregorio relayed this request to

Rankin, who agreed.

To explain to KYS’s employees and investors this large

infusion of cash, DiGregorio, McGowan, and Nash invented a

business deal with Samsung Electronics and a fictitious third

company, “B & D Systems.” They memorialized the deal in a fake

contract, and asked Rankin to set up a bank account for the phony

B & D Systems in order to make a future wire transfer to that

account seem legitimate. Rankin registered the fake business with

the state, and opened a bank account in the name of B & D
5

Systems.

On November 26, 2001, Rankin and Elsis picked up

DiGregorio and Nash and drove to a Merrill Lynch branch office

where KYS maintained a bank account. Rankin had a stolen check

in the amount of $1,401,647.28. The payee’s name had been

altered by Deji, and after examining the check, DiGregorio and

Nash commented that it looked “good.” Nash deposited the check.

During the ride back to KYS, Nash told Rankin, in DiGregorio’s

presence, that if Rankin gave him his account number, Nash would

wire a portion of the funds to the B & D Systems account.

DiGregorio informed Elsis when the check cleared. On

December 6, 2001, Nash wired $980,000 from the KYS account to

the B & D Systems account. Nash used $260,000 of the proceeds

for business expenses, including employee backpay. From this

$260,000, DiGregorio received $10,500 to represent his purported

“sales commission” from the phony Samsung/B & D Systems deal,

and another $8,000 in salary and backpay.

On December 21, 2001, Nash’s Merrill Lynch broker called

him to inform him that the check had been fraudulent. Merrill

Lynch froze the remaining $160,000 in the account. Nash informed

DiGregorio and McGowan, and they agreed to continue

representing that the source of the money was a legitimate business

deal between Samsung Electronics and B & D Systems. Nash

typed a script and gave DiGregorio and McGowan copies. When

interviewed by members of the United States Attorney’s Office,

DiGregorio told this story, which became the basis of an

obstruction of justice enhancement at sentencing.

Greenidge

Greenidge was recruited by Kenson Gilbert, who cooperated

with the government and testified at trial. In October 2001,

Greenidge met with Gilbert and co-conspirator George Nicholas.

At this meeting, Gilbert explained that Rankin would deposit a

stolen and altered check into the account of the moving and storage

company Greenidge owned and operated, Signature Van Lines.

Gilbert said that they would split the proceeds of the check, with

50% going to Greenidge and 50% to Rankin. Greenidge agreed to
6

the plan, and Gilbert told her that she would be instructed how and

when to withdraw the money from her business account in order to

avoid suspicion by the bank.

A few days later, Greenidge met with Gilbert, Nicholas, and

Rankin. Greenidge gave Rankin her business name, business

account number at HSBC Bank, and personal identification number

(“PIN”).

On November 17, 2001, Rankin deposited a stolen check for

$253,000.00 into the Signature Van Lines account. Deji had altered

the name of the payee on the check.

A week later, the check cleared. Greenidge met with Rankin

and Gilbert and gave Rankin an envelope containing several checks

from Signature Van Lines. Rankin gave Greenidge the account

number for B & D Systems and told Greenidge to transfer his

remaining share of the proceeds there. On November 30, 2001,

Greenidge wire transferred $68,047.21 from her business account

into the B & D Systems account.

Pallitta

Pallitta, like DiGregorio, was recruited into the conspiracy

by Elsis. Pallitta knew Elsis because Pallitta placed bets with Elsis

and Elsis’s bookmaking partner, Joe Bellero. In November 2001,

Elsis and Bellero recruited Pallitta to be a depositor on behalf of

Anthony Dunlock, a construction worker who had been performing

work on Elsis’s home. Dunlock asked Elsis if Elsis could help him

“get rid” of some stolen checks. (Pallitta App. 408.) Elsis

approached Bellero, who recruited Pallitta. They decided that

Pallitta would earn 50% of the check’s proceeds, while Rankin

would keep 40%, and Bellero and Elsis would each keep 5%.

Elsis discussed with Pallitta the specifics of the scheme,

telling him that the checks were stolen and that the names of the

payees were electronically altered so that the bank could not detect

the fraud, and, on Rankin’s instruction, asked Pallitta how much he

would be willing to deposit into his business account. Pallitta

responded that because his account was frequently overdrawn, he

did not want a large check which would arouse the bank’s
7

suspicion. Pallitta and Elsis agreed that Pallitta would deposit a

check for approximately $130,000.

On November 26, 2001, Rankin, Elsis, and Pallitta met at an

empty dry cleaning business next door to Amici’s Restaurant, the

pizzeria Pallitta owned. Rankin gave Pallitta a stolen check in the

amount of $138,494.30. Deji had altered the name of the check’s

payee. Pallitta examined the check and said that it looked “good.”

(Pallitta App. 410.)

Pallitta provided Rankin with a pre-printed deposit slip for

Amici’s Restaurant’s bank account, and Rankin deposited the check

in the bank across the street. When Rankin returned, Pallitta gave

him his business account number, PIN, and the bank’s telephone

number so that Rankin could call to find out when the check

cleared.

Later that day, Pallitta called the assistant bank manager to

ask when the funds would be available for withdrawal. The

assistant manager became suspicious because the deposit was so

large compared to the $11.30 account balance and the fact that the

account was frequently overdrawn. She examined the check and

noticed that the name of the payee was typed in a slightly larger and

darker font than the other print on the check. After showing the

check to the bank manager, the bank put a hold on the account.

None of the funds were withdrawn.

Arrests and Procedural History

The arrests began with Rankin, in January 2002. The arrests

continued in February (Gilbert and Massaquoi); August (Elsis);

and September (DiGregorio, Nash, Pallitta, and Bellero). In April

2003, Greenidge, Deji, and Dunlock were arrested.

On October 23, 2003, DiGregorio, Greenidge, and Pallitta

were charged in a nine-count superseding indictment with other

defendants including Deji and McGowan. Count One charged

Pallitta, Greenidge, and Deji with conspiracy to commit bank fraud,

contrary to 18 U.S.C. § 1344 and in violation of 18 U.S.C. § 371.

Count Six charged Pallitta with aiding and abetting the crime of

bank fraud, in violation of 18 U.S.C. § 1344 and 18 U.S.C. § 2.
1

Judge Greenaway also accepted the guilty pleas of, among

others, Rankin, Nash, Elsis, Gilbert, Bellero, Dunlock, and

Massaquoi. These defendants have either not yet been sentenced,

not filed notices of appeal of their sentences, or, in the case of

Bellero, died before sentencing.

2

The jury convicted Deji on Counts One through Four,

Eight, and Nine. This Court dismissed Deji’s appeal on August 29,

2006 because he is a fugitive.

3

Although Pallitta did not raise this issue in his opening

brief, pursuant to Rule 28(i) of the Federal Rules of Appellate

Procedure, in his reply brief he joined the argument made by

Greenidge and DiGregorio on this issue.

8

Count Seven charged Pallitta, Greenidge, DiGregorio, and

McGowan with conspiracy to engage in a monetary transaction

involving the proceeds of criminally derived property, contrary to

18 U.S.C. § 1957(a) and in violation of 18 U.S.C. § 1956(h).

Trial began on January 18, 2005 before the Honorable

Joseph A. Greenaway.1

 Co-conspirators Massaquoi, Gilbert, Elsis,

and Nash testified for the government at trial. On March 1, 20005,

the jury found DiGregorio, Pallitta, and Greenidge guilty on all

applicable counts,2

 but acquitted McGowan. DiGregorio was

sentenced to 41 months of imprisonment; Pallitta to 30 months;

and Greenidge to 33 months. All three defendants appeal their

convictions, and DiGregorio appeals his sentence as well.

II.

A. Variance between the Indictment and the Proof at Trial

Claiming a variance between the indictment and the proof at

trial, all three appellants challenge their convictions for conspiracy

to engage in a monetary transaction involving the proceeds of

criminally derived property (Count Seven), and Greenidge and

Pallitta also challenge their convictions for conspiracy to commit

bank fraud (Count One).3

 According to appellants, while the

indictment alleged a single conspiracy for each count, the evidence
4

A relevant portion of the proposed jury instruction read:

Even if the evidence in the case shows that Defendant _________ was

a member of some conspiracy, but that this conspiracy is not the single

conspiracy charged in the indictment, you must acquit Defendant

__________ of this charge.

2 Fed. Jury Prac. & Instr. (Crim.) § 31.09 (5th ed.).

9

at most demonstrated separate conspiracies—a conspiracy per

appellant per count. They contend that the District Court erred by

finding no variance between the proof and the indictment and by

refusing to give appellants’ proposed jury instruction on whether

the evidence established a single conspiracy or multiple

conspiracies.4

This Court will vacate a conviction “where a variance

between the indictment and proof at trial exists to the prejudice of

a defendant’s substantial rights.” United States v. Salmon, 944 F.2d

1106, 1116 (3d Cir. 1991) (citing United States v. Kelly, 892 F.2d

255, 258 (3d Cir. 1989)). The “variance doctrine is intended to

prevent a situation in which the jury might be unable to separate

offenders and offenses and easily could transfer the guilt from one

alleged co-scheme to another.” United States v. Barr, 963 F.2d

641, 648 (3d Cir. 1992) (internal citations and citations omitted).

We examine alleged variances “on a case-by-case basis.”

United States v. Perez, 280 F.3d 318, 346 (3d Cir. 2002). If,

viewing the evidence in the light most favorable to the government,

see Barr, 963 F.2d at 648, a rational trier of fact could have

concluded from the proof adduced at trial the existence of the single

conspiracy alleged in the indictment, there was no variance.

Furthermore, a district court can properly refuse a defendant’s

request for a jury instruction on single versus multiple conspiracies

if there is insufficient evidence to support such an instruction. See

Barr, 963 F.2d at 650.

In United States v. Kelly, 892 F.2d 255 (3d Cir. 1989), this

Court set forth a three-step test to aid in distinguishing between

single and multiple conspiracies.
10

First, we examine whether there was a common

goal among the conspirators. Second, we look at

the nature of the scheme to determine whether the

agreement contemplated bringing to pass a

continuous result that will not continue without the

continuous cooperation of the conspirators. Third,

we examine the extent to which the participants

overlap in the various dealings.

Id. at 259 (citations and internal quotations omitted). The absence

of one of these factors “does not necessarily defeat an inference of

the existence of a single conspiracy.” United States v. Padilla, 982

F.2d 110, 115 (3d Cir. 1992).

We now turn to the issue of whether, applying the Kelly

factors, the jury had a reasonable basis for finding the existence of

a single conspiracy to commit bank fraud (Count One). There was

certainly evidence of a common goal among these co-conspirators:

to make money by depositing stolen and altered corporate checks

into business accounts. As to the whether the “nature of the

scheme” indicates a single conspiracy, we look to whether there

was evidence that “the activities of one group . . . were ‘necessary

or advantageous to the success of another aspect of the scheme or

to the overall success of the venture.’” Kelly, 892 F.2d at 259

(quoting United States v. DeVarona, 872 F.2d 114, 118 (5th Cir.

1989)). There was evidence to support this factor as well: the

activities of Greenidge and Pallitta as depositors—including having

access to corporate bank accounts and providing Rankin with

account numbers, PINs, and deposit slips—were necessary to the

overall success of the venture. Without a constant supply of willing

depositors, the operation would necessarily have ceased. Finally,

there was a great degree of participant overlap in this plan. The

checks Greenidge and Pallitta deposited came from the same source

(Rankin), and they were altered by the same person (Deji) for the

same reason (to pass the scrutiny of the banks). They worked with

a network of recruiters, including Gilbert and Elsis, to find

depositors, such as Greenidge and Pallitta. Keeping in mind that

“the government need not prove that each defendant knew all the

details, goals, or other participants in order to find a single

conspiracy,” Kelly, 892 F.2d at 260 (internal citation omitted), we

find that here there was sufficient evidence to demonstrate a single
11

conspiracy.

The evidence also supported the jury’s finding of a single

conspiracy to engage in a monetary transaction involving the

proceeds of criminally derived property (Count Seven). The

common goal here was to share in the illegal proceeds resulting

from the deposit of the stolen and altered checks. The participants

in the deposit of $1.4 million to KYS agreed to a division of funds,

from which DiGregorio received $18,500; Rankin and Greenidge

agreed to split evenly the proceeds from the Signature Van Lines

deposit, with Gilbert’s commission coming from Rankin’s share;

and the participants in the Amici’s Restaurant deposit agreed that

Pallitta would receive half of the proceeds, whereas Rankin would

keep 40%, and Bellero and Elsis would each keep 5%.

Furthermore, the nature of the scheme indicates a single conspiracy.

For instance, DiGregorio assisted Nash in conceiving of the phony

“B & D Systems” company so that Nash could transfer the funds to

a dummy account Rankin could set up in that name; Greenidge wire

transferred $68,047.21 from the Signature Van Lines account into

Rankin’s B & D Systems account six days after the deposited stolen

check cleared; and Pallitta gave Rankin his business account

number, PIN, and the bank’s telephone number so that Rankin

could call to find out when the check cleared. Finally, there was a

great degree of participant overlap here as well. For example, all

three appellants intended to split the proceeds with Rankin, and

Elsis profited from the transactions involving both DiGregorio and

Pallitta.

Appellants contend that this case is analogous to Kotteakos

v. United States, 328 U.S. 750 (1946). That case involved a scheme

where one person, Simon Brown, sold his services in falsifying loan

applications on behalf of numerous unrelated applicants. Despite

no evidence of any connection between the loan applicants other

than the fact that they had used Brown to obtain their loans, id. at

755, the indictment charged that the applicants participated in only

a single conspiracy. The Court, analogizing this plan to a rimless

wheel, in which Brown was the hub and the other alleged coconspirators were unrelated spokes, id. at 755, found that the

variance “affect[ed] the substantial rights of the parties,” id. at 775,

and was reversible error.
5

No appellant claims any other type of prejudice, such as

unfair notice or the erroneous admission of co-conspirator

statements.

12

Contrary to appellants’ contention, however, the

circumstances here are readily distinguishable from those in

Kotteakos. We agree with the government that this scheme did not

resemble a wheel-hub-spoke conspiracy, but instead could be more

accurately depicted as a pyramidal corporate structure. At the base

of the pyramid were the depositors, such as Pallitta and Greenidge.

Above them were the recruiters, including DiGregorio, Elsis, and

Gilbert, who received a finder’s fee for every depositor they

recruited who successfully deposited a stolen and altered check.

And at the top, were Rankin, the source of the stolen checks, Deji,

the check alterer, and Massaquoi, their liason. Unlike in Kotteakos,

the depositors did not represent independent customers, but were an

integral part of this “corporate” structure. See Perez, 280 F.3d at

346 (“a finding of a master conspiracy with sub-schemes does not

constitute a finding of multiple, unrelated conspiracies and,

therefore, would not create an impermissible variance”) (citation

and internal quotations omitted).

We thus find that the evidence did not demonstrate the

existence of “separate independent networks,” but rather, as the

indictment charged, a single conspiracy, and thus the District

Court’s refusal to give a multiple conspiracies jury instruction was

proper. Barr, 963 F.2d at 650. Furthermore, “even if a multiple

conspiracies charge should have been given, reversal on appeal is

not automatic.” Id. (citation omitted). The convictions cannot be

vacated unless appellants show “both the likelihood of multiple

conspiracies having existed, and substantial prejudice resulting

from the failure to give the requested charge.” Id. (quotation and

citation omitted). Appellants have not demonstrated that there was

prejudice here from any “spillover” evidence.5

 First of all, the

government compartmentalized its presentation of evidence,

presenting evidence as to each defendant separately. Secondly, the

District Court properly charged the jury to consider the evidence
6

The District Court instructed:

Each count and the evidence pertaining to it should

be considered separately. Also, the case of each

defendant should be considered separately and

individually. The fact that you may find one

defendant guilty or not guilty of any of the

offenses charged should not control your verdict as

to any other offense charged or any other

defendant. And even though I will discuss related

charges together because they share common legal

and factual elements, you must consider each

count and each defendant separately.

(Pallitta App. 1612.)

13

against each defendant separately.6 Most importantly, the fact that

the jury acquitted McGowan is critical proof that the jury was “able

to separate the offenders and the offenses.” Id.

B. Evidentiary Rulings

1. The Admission of Pallitta’s Prior Conviction

Pallitta claims the District Court erred by admitting into

evidence a stipulation that Pallitta had been convicted of theft in

2001. We review for abuse of discretion. See United States v.

Saada, 212 F.3d 210, 220 (3d Cir. 2000).

The conviction at issue concerned Pallitta’s theft from his

employer. As a delivery person for a liquor distributor, Pallitta

made deliveries and accepted payment on behalf of his employer.

Instead of turning those payments over to his employer, however,

Pallitta kept them for himself. On January 2, 2001, he pled guilty

in New Jersey state court to theft for failure to make required

disposition of property, a third degree felony.

Before deciding whether to testify in his own defense,

Pallitta moved in limine to exclude this evidence so that it could not

be used to impeach him. He conceded that the theft conviction was
7

Rule 609(a)(1) states:

For the purpose of attacking the character for

truthfulness of a witness, evidence that a witness

other than an accused has been convicted of a

crime shall be admitted, subject to Rule 403, if the

crime was punishable by death or imprisonment

in excess of one year under the law under which

the witness was convicted, and evidence that an

accused has been convicted of such a crime shall

be admitted if the court determines that the

probative value of admitting this evidence

outweighs its prejudicial effect to the accused[.]

Fed. R. Evid. 609(a)(1).

14

probative of his credibility, but argued that its similarity to the

alleged bank fraud rendered it overly prejudicial, so that it should

be excluded under Rule 609(a)(1) of the Federal Rules of

Evidence.7

 The District Court disagreed that the offense of stealing

from one’s employer and committing a fraud on a bank were so

similar as to lead to a propensity inference, that is, an inference that

because “he stole once, he’ll steal again.” (Pallitta App. 624.) The

District Court ruled that the conviction was admissible under Rule

609(a)(1) for impeachment purposes if Pallitta chose to testify.

While Pallitta did not take the stand, he did subpoena

Anthony Dunlock to testify. Dunlock testified that when, after the

check had been deposited but he had not received his cut from the

proceeds, he went to see Pallitta to attempt to collect his share.

Pallitta’s counsel then attempted to elicit from Dunlock an out-ofcourt statement made by Pallitta to Dunlock. Over the

government’s objection that this statement was hearsay which did

not fall within any exception to the hearsay rule, the District Court

permitted Pallitta’s counsel to ask what Pallitta said in that

conversation:

Q: Mr. Dunlock, what was Mr. Pallitta’s response when you

attempted to collect money from him?
15

A: He had informed me that he didn’t know it was going to be

something like this. You know, that Joseph [Bellero] had lied

to him.

Q: When he said he didn’t know it was going to be like this, what

was your understanding?

***

A: [Pallitta] said he thought it was coming from overseas, or

something. And if he had known that, he wouldn’t use his

account, set up a dummy account, or something.

***

Q: By “had known this,” do you know what he was talking about?

A: I guess knowing that it was going to be like this, the way it was.

Q: What way was it?

A: The way the checks were deposited in his account.

Q: Was it that the checks were fraudulent or stolen?

A: I guess so, yes.

***

Q: So if he told you, if he knew it was like that, that is, the checks

were stolen or fraudulent, he would not have deposited it in his

own account. Correct?

A: Correct.

(Pallitta App. 630.)

As the District Court noted, through Dunlock Pallitta

succeeded in his “attempt to introduce exculpatory evidence.”

(Pallitta App. 821.) As the government points out, this statement,

offered for its truth, suggested that Pallitta did not act

“knowingly”—that he did not have a specific intent to defraud and

that he did not knowingly attempt to engage in a monetary

transaction in criminally derived property—and therefore supplied
8

In fact, in his closing argument Pallitta’s counsel invoked

Dunlock’s testimony, see Pallitta App. 1442 (“[Dunlock] said that

Mario Pallitta said he wouldn’t have done this had he known this

check was stolen.”), to argue that Pallitta did not act knowingly.

9

Pallitta argues that “the introduction of prior convictions

under Rule 609 is subject to Rule 403.” Pallitta Br. 24. This

contention is overbroad. The Rule 403 considerations apply to

“evidence that a witness other than an accused has been convicted

of a crime,” Fed. R. Evid. 609(a)(1) (emphasis added), while

“evidence that an accused has been convicted of such a crime” is

16

a complete defense to an essential element of both charged crimes.8

After Pallitta’s statements were admitted, the government

moved, per Rule 806 of the Federal Rules of Evidence, that

Pallita’s theft conviction be admitted to challenge the credibility of

the declarant (Pallitta), just as the conviction would have been

admitted, per the District Court’s earlier decision, if Pallitta had

testified himself. Rule 806 provides, in relevant part, that “[w]hen

a hearsay statement . . . has been admitted in evidence, the

credibility of the declarant may be attacked, and if attacked may be

supported, by any evidence which would be admissible for those

purposes if the declarant had testified as a witness.” Fed. R. Evid.

806. As the Advisory Committee Notes emphasize, “[t]he declarant

of a hearsay statement which is admitted in evidence is in effect a

witness. His credibility should in fairness be subject to

impeachment and support as though he had in fact testified.” Fed.

R. Evid. 806 Advisory Committee Notes. See also Saada, 212 F.3d

at 221 (noting that pursuant to Rule 806, “the credibility of the

hearsay declarant . . . may be impeached with . . . evidence of

criminal convictions under Rule 609").

The District Court, having already ruled the prior conviction

admissible under Rule 609 if Pallitta testified, admitted the

conviction under Rule 806. Pallitta claims this was an abuse of

discretion. We disagree.

In determining whether “the probative value of admitting

[the conviction] outweigh[ed] its prejudicial effect”9

 to Pallitta, Fed.
admissible if “the probative value of admitting this evidence

outweighs its prejudicial effect to the accused.” Id. (emphasis

added).

17

R. Evid. 609(a)(1), the District Court engaged in its analysis using

the four factors set forth in Gov’t of the Virgin Islands v. Bedford,

671 F.2d 758 (3d Cir. 1982), namely (1) the kind of crime involved,

(2) when the conviction occurred, (3) the importance of the

witness’ testimony to the case, and (4) the importance of the

credibility of the defendant. Bedford, 671 F.2d at 761 n.4. The

District Court noted that the prior conviction was not remote in

time from the instant offense, see Pallita App. 625, that the

importance of the witness/defendant’s credibility was

“overwhelming,” see Pallitta App. 624, and, with regard to the

kinds of crimes involved, stated that it was “not convinced that

these [crimes] are sufficiently similar . . . [that the jury] will come

to the same conclusion with regard to the instant charge based on

the introduction of the prior conviction.” (Pallitta App. 624.) In

addition, the District Court minimized any prejudice that may have

resulted from the conviction’s admission by having the fact of the

conviction admitted via a stipulation which simply read: “on or

about January 2nd of 2001, defendant Mario Pallitta entered a plea

of guilty to the offense of theft by failure to make required

disposition of property, received in New Jersey Superior Court in

Hudson County, New Jersey.” (Pallitta App. 1272.) The Court

also issued a limiting instruction accompanying the stipulation,

instructing the jury that it could only consider the prior conviction

in regard to Pallitta’s credibility and not as evidence that he is a

“bad person or has a propensity to commit crimes” or as evidence

that he committed the crimes charged in the indictment. (Pallitta

App. 1273.) Finally, the Court gave a second limiting instruction

to the same effect in its final instructions to the jury. See Pallitta

App. 1622.

There was no abuse of discretion here. Pallitta conceded

that his earlier conviction had probative value regarding his

credibility. Furthermore, due to the fact that the out-of-court

statements, if believed, provided a complete defense to the crimes,

both Pallitta’s credibility and the statements’ importance to the case

cannot be overstated. We also cannot conclude that the crime of
10We reject Pallitta’s policy argument that a court’s

evaluation, pursuant to Rule 609, of the probative value and

prejudicial effect of an accused’s conviction is somehow altered

when the conviction is to be used, pursuant to Rule 806, to impeach

a non-testifying defendant-declarant. Pallitta offers no case law in

support of his argument, and the one law review article he cites

makes the point that “where the defendant has chosen to tell his

story through his own hearsay statements rather than by taking the

witness stand . . . it is arguably more important to allow

impeachment [by conviction] in this context, because the defendant

has avoided the rigors of cross-examination by introducing his

hearsay statements rather than testifying.” Margaret Meriweather

Cordray, Evidence Rule 806 and the Problem of Impeaching the

Nontestifying Declarant, 56 Ohio St. L. J. 495, 504 (1997). We see

no basis for altering the Rule 609 balancing in the circumstances

of a non-testifying defendant-declarant.

18

stealing money from one’s employer is so similar to the crimes of

committing a fraud on a bank and money laundering that the

probative value of the conviction’s admission is outweighed by the

conviction’s prejudicial effect to Pallitta.10 The limiting

instructions were a proper countermeasure to any improper uses of

the evidence the jury may have been tempted to make. In sum,

Pallitta’s appeal on this ground must be rejected.

2. The Impeachment by Contradiction of Greenidge

Greenidge claims that the District Court erred by allowing

the government to cross-examine her about a consumer complaint

and a criminal complaint against her. We review this evidentiary

ruling for abuse of discretion. See Saada, 212 F.3d at 220.

During her direct testimony, Greenidge sought to portray

herself as an honest businessperson. She testified that at the time

of the alleged criminal activity, she was negotiating to acquire

various businesses and was seeking out funding for those

acquisitions. Greenidge explained that she was merely negotiating

a legitimate loan from Rankin, and knew nothing about Rankin’s

scheme or that the $253,000 check Rankin deposited into her

account had been stolen or altered. She emphasized her
19

professionalism, noting that she had been in the moving and storage

business for 15 years and telling the jury: “I’m not a thief. I do not

steal. I was raised with very strong convictions and I did business

honestly.” (Pallitta App. 764.) Greenidge also unequivocally

denied ever having had any criminal problems or receiving any

complaints about her honesty in business:

Q: Have you ever, in those 15 years, had any problems, any

criminal problems?

A: No.

Q: With respect to yourself, or this business, any business that you

were in?

A: Never.

Q: Have you ever had anybody complain about you to a company

and say, don’t deal with her, she’s not honest?

A: Never did.

(Pallitta App. 761.)

The government moved for permission to impeach

Greenidge’s statements with both a customer complaint from 2004

that Greenidge had refused to relinquish the customer’s furniture

until the customer paid $500 beyond what was owed, and a criminal

complaint charging Greenidge with theft. The criminal complaint

charged Greenidge with theft “by unlawfully taking or exercising

control over certain immovable property,” and arose when Budget

Rental reported to the Newton, New Jersey Police Department that

Greenidge had rented its trucks but failed to return them, accruing

a debt of approximately $4,000. Greenidge’s counsel told the Court

that the Newton Police Chief agreed that this dispute was a civil,

not a criminal, matter; that the Chief had agreed to hold the

complaint pending the parties’ negotiation of a payment schedule;

and that Greenidge had not been arrested on the complaint and that

the arrest warrant had been withdrawn.

The District Court decided that, due to Greenidge’s
20

“unequivocal statement” that there had never been any complaints

about the way she conducted business, the government’s proposed

cross-examination was “a fair area of inquiry.” (Pallitta App. 773.)

Nevertheless, the Court, seeking to find an “appropriate middle

ground” between the probative value of the questioning and the

prejudice to Greenidge, allowed Greenidge to be cross-examined on

the existence of the complaints but not on the arrest warrant, and

did not admit the documents into evidence. (Pallitta App. 770.)

“Where a defendant testifies on direct examination regarding

a specific fact, the prosecution may prove on cross-examination that

the defendant lied as to that fact.” United States v. Gambino, 951

F.2d 498, 503 (2d Cir. 1991) (citation and internal quotation

omitted). In this way, impeachment by contradiction is a means of

“arriving at the truth in criminal trials” by policing the “defendant’s

obligation to speak the truth in response to proper questions.”

United States v. Havens, 446 U.S. 620, 626 (1980).

Impeachment by contradiction is permitted by Rule 607 of

the Federal Rules of Evidence, which provides that “[t]he

credibility of a witness may be attacked by any party, including the

party calling the witness.” Fed. R. Evid. 607. The court, in

deciding whether to allow an instance of impeachment by

contradiction, engages in a Rule 403 analysis, see United States v.

Castillo, 181 F.3d 1129, 1133 (9th Cir. 1999) (noting that Rule 607

allows admission of extrinsic evidence to impeach by contradiction,

subject to Rule 403 considerations), whereby the offered evidence

can be excluded if “its probative value is substantially outweighed

by the danger of unfair prejudice, confusion of the issues, or

misleading the jury, or by considerations of undue delay, waste of

time, or needless presentation of cumulative evidence.” Fed. R.

Evid. 403.

The District Court did not abuse its discretion in allowing

the government to cross-examine Greenidge about the two

complaints. Greenidge concedes that her volunteered denials

“opened the door” to this area of inquiry. Greenidge Br. 21; see

also Castillo, 181 F.3d at 1133 (“Courts are more willing to permit,

and commentators more willing to endorse, impeachment by

contradiction where . . . testimony is volunteered on direct

examination.”). Furthermore, as the government argues,
11The statute defines a “monetary transaction” to be a

“deposit, withdrawal, transfer, or exchange, in or affecting

interstate or foreign commerce, of funds . . . by, through, or to a

21

Greenidge’s unqualified denial in her direct testimony rendered the

impeachment by contradiction more probative of her credibility. In

addition, the District Court sought to minimize any unfair prejudice

to Greenidge by not allowing the government to introduce the

complaints into evidence, nor to mention the existence of the arrest

warrant. Finally, Greenidge was given the opportunity to explain

her seemingly inconsistent answers to the jury. We cannot

conclude that this evidence was erroneously admitted.

C. Motion for Judgment of Acquittal

Pallitta and DiGregorio both appeal the District Court’s

denial of their motions, under Rule 29 of the Federal Rules of

Criminal Procedure, for a judgment of acquittal on the charge of

conspiracy to engage in a monetary transaction involving the

proceeds of criminally derived property (Court Seven). We review

the appellants’ claim that there was insufficient evidence to sustain

their conviction on this count using the same standard the District

Court applied, that is, viewing the evidence in the light most

favorable to the government, we “will sustain the verdict if any

rational trier of fact could have found the essential elements of the

crime beyond a reasonable doubt.” United States v. Dent, 149 F.3d

180, 187 (3d Cir. 1998) (internal citation omitted). This standard

“places a very heavy burden on an appellant.” Id. (citation

omitted).

The elements of a conspiracy under 18 U.S.C. § 1956(h) are:

(1) that an agreement was formed between two or more persons;

and (2) that the defendant knowingly became a member of the

conspiracy. 18 U.S.C. § 1956(h); see also Whitfield v. United

States, 543 U.S. 209, 214 (2005) (finding that the government need

not prove an overt act in order to obtain a conviction under 18

U.S.C. § 1956(h)). The elements of the substantive crime the

appellants were charged with conspiring to commit are: (1) the

defendant engaged or attempted to engage in a monetary

transaction;11 (2) involving criminally derived property of at least
financial institution.” 18 U.S.C. § 1957(f).

22

$10,000; (3) that the property was in fact derived from specified

unlawful activity; (4) that the defendant acted knowingly, that is,

with knowledge that the property was derived from the proceeds of

a criminal offense; and (5) that the transaction occurred in the

United States. 18 U.S.C. § 1957(a), (d).

Pallitta claims that there was insufficient evidence to convict

him of conspiracy to engage in money laundering (Count Seven)

because the financial transaction used to support the money

laundering charge was the same transaction as that used to support

the bank fraud charge (Count One). In other words, he argues that

Count Seven was indistinct from Count One, and because “[m]oney

laundering must be a crime distinct from the crime by which the

money is obtained,” United States v. Abuhouran, 162 F.3d 230, 233

(3d Cir. 1998) (citation omitted), his conviction on Count Seven

must be reversed.

We agree, of course, that in order to support a charge of

money laundering, there must have been a “discrete predicate

crime” which “produced proceeds in acts distinct from the conduct

that constitutes money laundering.” United States v. Mankarious,

151 F.3d 694, 705 (7th Cir. 1998). See also United States v.

Conley, 37 F.3d 970, 980 (3d Cir. 1994) (commenting that before

“proceeds” can be laundered, they must be “derived from an

already completed offense, or a completed phase of an ongoing

offense”). Drawing on this principle, Pallitta contends that the

bank fraud conspiracy produced no “proceeds” until the funds were

withdrawn, and thus there was only a single transaction, not the

completion of one followed by another which used the proceeds

from the first.

We disagree, and instead are persuaded by the government’s

argument that the conspiracy to commit bank fraud was complete

when the stolen and altered check was deposited. The bank fraud

statute involved here makes it a crime to “knowingly execute[], or

attempt[] to execute, a scheme or artifice to defraud a financial

institution.” 18 U.S.C. § 1344(1). When the check was deposited,

the “scheme . . . to defraud” the bank had been “execute[d].” As
12It is, of course, of no consequence that the bank recognized

the fraud and the proceeds were never actually withdrawn, because

the “illegality of the agreement does not depend on the

23

the Eleventh Circuit has stated:

Here [the defendant] was in the same position as

if he had robbed the bank and placed the proceeds

of the robbery into his own account with the

intent to use the money for his own purposes.

The crime was completed at that point, without

any actual withdrawal of the money.

United States v. Gregg, 179 F.3d 1312, 1315 (11th Cir. 1999). See

also United States v. Hord, 6 F.3d 276, 281 (5th Cir. 1993) (bank

fraud indictment that charged withdrawals as well as deposits not

multiplicitous because “[i]t is the deposits, not [the] withdrawal

attempts, that constitute executions of the scheme”). Because we

conclude that the conspiracy to commit bank fraud was “executed”

when the check was deposited, the proceeds from that completed

crime qualified as the “criminally derived property” used to support

the charge of conspiracy to engage in money laundering. In sum,

we find Counts One and Seven to be based on two distinct events.

Furthermore, there was sufficient evidence for the jury to

convict Pallitta of conspiracy to engage in a monetary transaction

involving the proceeds of criminally derived property. Elsis

testified that the co-conspirators agreed how to split the proceeds

from the altered check after the money was withdrawn. (Pallitta

App. 421.) Pallitta thus knew, when he joined the conspiracy, that

either he or a co-conspirator would withdraw proceeds of the stolen

check from the bank once the check cleared. In fact, there was

evidence that Pallitta, knowing the check was stolen, called the

bank several times on the day of the check’s deposit to determine

if it had cleared. (Pallitta App. 591.) Because there was evidence

that Pallitta, knowing the check had been stolen and altered, agreed

to help facilitate the withdrawal of the check’s illegal $134,494.30

proceeds, a jury could have found each element of the crime

beyond a reasonable doubt and so we will affirm the denial of his

Rule 29 motion on Count Seven.12
achievement of its ends.” United States v. Hsu, 155 F.3d 189, 203

(3d Cir. 1998) (citation omitted).

24

Next, DiGregorio contends that there was insufficient

evidence for the jury to convict him on Count Seven. He maintains

that though he was present when Nash deposited the altered check,

he had no later involvement in Rankin’s efforts to collect the funds,

and because, he argues, the bank fraud proceeds did not exist until

Rankin withdrew them, there was insufficient evidence that

DiGregorio participated in the conspiracy to engage in this

monetary transaction.

This argument is rejected. As we discussed above, the bank

fraud proceeds existed when the check was deposited. In addition,

there was evidence that in November 2001, DiGregorio agreed with

Elsis to propose the plan to Nash whereby a stolen and altered

check would be deposited into the KYS account, and that the

withdrawn illegal proceeds would be used both to keep KYS afloat

and to compensate the conspirators for their role in the scheme.

Indeed, in order to ensure that there were sufficient proceeds from

this illegal venture, there was evidence that DiGregorio asked Elsis

for a check for approximately $1.4 million. In this way, there was

evidence from which the jury could have found that DiGregorio

knowingly entered into an agreement to withdraw the proceeds

from a criminal offense, and so we will affirm the denial of his Rule

29 motion on Count Seven.

D. Reasonableness of Sentence

DiGregorio appeals his sentence as unreasonable, arguing

that the District Court, in its analysis of the 18 U.S.C. § 3553(a)

sentencing factors, both did not adequately consider his limited role

in the offense and overemphasized his obstruction of justice.

In reviewing a sentence for reasonableness, our inquiry

proceeds in three stages. See United States v. Cooper, 437 F.3d

324 (3d Cir. 2006). We first look to whether the District Court

correctly calculated the applicable advisory guidelines range. Id.

at 330. Next, we determine whether the record shows the District
13DiGregorio’s base offense level of eight was increased: by

16 levels for an intended loss of $1,401,647.28 pursuant to

U.S.S.G. § 2B1.1(b)(1)(I); by two levels for his conviction under

18 U.S.C. § 1956 pursuant to U.S.S.G. § 2S1.1(b)(2)(B); and by

two levels for obstruction of justice pursuant to U.S.S.G. § 3C1.1.

His total offense level of 28 combined with a Criminal History

Category of I to yield an advisory guidelines range of 78 to 97

months’ imprisonment.

14DiGregorio does not claim that he was entitled to a

mitigating role adjustment pursuant to U.S.S.G. § 3B1.2.

25

Court gave “meaningful consideration to the § 3553(a) factors,”

which includes the consideration of “any sentencing grounds

properly raised by the parties which have recognized legal merit

and factual support in the record.” Id. at 329, 332. Lastly, we

evaluate whether the District Court reasonably applied the §

3553(a) factors to the particular circumstances of the case. Id. at

330. In this final step, our review is, to a great degree, deferential,

because we recognize that “the trial court [is] in the best position to

determine the appropriate sentence.” Id.

DiGregorio does not challenge the calculation of his

advisory guidelines range.13 Instead, he argues that his 41-month

sentence, 37 months below the bottom of the advisory guidelines

range, is unreasonable. DiGregorio maintains that his role was

essentially limited to introducing Nash to Rankin and that he

received a relatively small payment for his role, most of which, he

claims, was for wages owed.14 He further claims that the District

Court afforded his obstruction of justice undue consideration in

fashioning a sentence; in this regard, DiGregorio seems to be

arguing that because the advisory guidelines range took his

obstruction of justice into account, the District Court was

prohibited from further considering that conduct when fixing a

sentence.

We find that DiGregorio’s sentence was not unreasonable.

The District Court heard DiGregorio’s argument regarding his

limited involvement, but reasonably rejected it. The Court noted

that even though DiGregorio’s financial gain from the plan was
26

relatively insubstantial, his role was nevertheless essential.

DiGregorio was responsible for introducing Nash to Rankin;

without him, this sub-scheme of the conspiracy would not have

occurred. Furthermore, as the Court discussed, despite

DiGregorio’s limited financial gain, he set in motion a sub-scheme

of the conspiracy which succeeded in withdrawing $ 1.24 million,

an amount far larger than the loss or intended loss attributed to

DiGregorio’s co-conspirators here (e.g., $253,000 for Greenidge

and $138,000 for Pallitta). Moreover, despite DiGregorio’s

contention that his role here was minimal, the Court heard evidence

that DiGregorio was the continuous liaison between Nash and

Rankin and Elsis, and was present during discussions of the

planned withdrawal, the splitting of the proceeds, and the

possibility of another transaction. DiGregorio also helped

formulate the cover story to explain to the company’s investors the

source of the cash infusion.

Contrary to DiGregorio’s contention, the District Court did

not overemphasize DiGregorio’s obstruction of justice. We

emphasize that a sentencing court is not prohibited from

considering the factual basis underlying a defendant’s sentence

enhancements, and indeed, should consider those facts in order to

tailor the sentence to the defendant’s individual circumstances.

Here, the Court, having heard evidence that DiGregorio both helped

to invent a fictitious company in order to make the transaction

appear legitimate, and then lied to the U.S. Attorney in a proffer

session, determined that the “deliberate thought” behind

DiGregorio’s obstructive conduct set him apart from his codefendants and warranted a more severe sentence. (DiGregorio

App. 48.)

In imposing sentence, the District Court articulated the §

3553(a) factors and reasonably applied them to this case. The

Court balanced the fact that DiGregorio had no criminal history

with his conduct here, including his obstruction of justice. The

Court also took into account the instruction to “avoid unwarranted

sentence disparities among defendants with similar records who

have been found guilty of similar conduct,” 18 U.S.C. § 3553(a)(6),

as reflected in the fact that DiGregorio, who had a higher offense

level than his co-defendants because of the amount of loss and his

obstruction of justice, received a longer sentence than they did.
27

Finally, the Court showed substantial leniency to DiGregorio by

sentencing him to 37 months below the bottom of the advisory

range, a sentence 47% less than the minimum advisory sentence.

In light of this record, we cannot say the District Court imposed an

unreasonable sentence here.

III.

For the above reasons, we will affirm all appellants’

convictions and DiGregorio’s sentence.