United States Court of Appeals

For the First Circuit

No. 08-2307

UNITED STATES OF AMERICA,

Appellee,

v.

CAROL ARANJO,

Defendant, Appellant.

No. 08-2341

UNITED STATES OF AMERICA,

Appellee,

v.

ALPHONSO SMITH,

Defendant, Appellant.

____________________

APPEALS FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Michael A. Ponsor, U.S. District Judge]

Before

Lynch, Chief Judge,

Boudin and Stahl, Circuit Judges.

Judith H. Mizner, Assistant Federal Public Defender, Federal

Defender Office, for appellant Carol Aranjo.

Jane Elizabeth Lee, by appointment of the court, for appellant

Alphonso Smith.
Daniel Steven Goodman, Criminal Division, Appellate Section,

Department of Justice, with whom Lanny A. Breuer, Assistant

Attorney General, Department of Justice, Gary G. Grindler, Deputy

Assistant Attorney General, Department of Justice, Michael K.

Loucks, Acting United States Attorney, and Karen L. Goodwin,

Assistant United States Attorney, were on brief for appellee.

May 3, 2010
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BOUDIN, Circuit Judge. Carol Aranjo was chief executive

officer, treasurer, and a director of the D. Edward Wells Federal

Credit Union ("Wells"), a federally chartered financial institution

in Springfield, Massachusetts. Wells was regulated by the National

Credit Union Administration ("NCUA"), an independent federal agency

that regularly examines credit unions for compliance with

regulatory requirements.

Between 1999 and 2002, two NCUA examiners discovered

problems with Wells' books, including an unusually high and underdocumented loan to a Wells-related entity, Friends of the Credit

Union ("Friends"), the treasurer of which was Aranjo's husband

Alphonso Smith. Aranjo resisted the examiners' investigation,

refusing to permit them to view the credit union's financial

information such as members' loan and deposit data and the Friends

loan documentation.

Partly because of the Friends loan, NCUA decided in late

2002 that it could no longer conclude that Wells was sound and, in

February 2003, NCUA placed Wells in conservatorship in order to

return it to solvency. During conservatorship, NCUA discovered

significant negative balances on several Wells accounts, including

Aranjo's and her husband's personal accounts, which showed negative

balances of $71,000 and $88,000, respectively, as well as large

suspicious transfers among Wells accounts that made negative

accounts appear positive.
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NCUA was forced to liquidate Wells, and Aranjo and Smith

were indicted and tried in federal district court on charges that

included conspiracy to embezzle and to make false entries in a

federal credit union's books, 18 U.S.C. § 371 (2006), embezzlement,

id. § 657, bank fraud, id. § 1344, and filing false tax returns, 26

U.S.C. § 7206(1) (2006). Some of the counts were directed at

Aranjo alone or Smith alone. Aranjo was additionally charged with

making false entries, 18 U.S.C. § 1006, and obstructing the

examination of a financial institution, id. § 1517.

A five-week trial ensued and the jury convicted both

Aranjo and Smith of conspiracy to embezzle and to make false

entries, as well as of four counts of embezzlement. Aranjo was

also convicted of separate counts charging substantive offenses

(embezzlement, filing false tax returns, bank fraud, fraudulent

false entries, and obstructing the examination of a financial

institution) and Smith of two other substantive offenses (four

counts of filing false tax returns and one count of bank fraud).

There were acquittals on a few other counts.

Aranjo was sentenced to 54 months in prison and Smith to

12 months and one day. Both were ordered to provide $400,000 in

restitution to NCUA, with Aranjo to provide an additional $1

million to a credit union insurer. Both now appeal and each argues

that the government's peremptory challenge of an African-American

juror violated their rights under Batson v. Kentucky, 476 U.S. 79
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(1986). Smith makes several other claims, but we begin with the

Batson challenge common to both appellants.

During jury selection, Aranjo's counsel (joined by

Smith's counsel) objected to one of the prosecutor's peremptory

challenges, noting that the prospective juror was "seemingly the

one African American woman on the jury panel . . . which implicates

both classes [race and gender]." Aranjo's counsel pointed out

that--contrary to the court's suggestion--a different, male juror

probably was not African-American, and that there were very few

women on the jury.

The court then asked the prosecutor to explain her

challenge. She replied that there were

two reasons, both relating to [the juror's]

employment with the Job Corps, which is a

federally funded organization that has some

government regulatory oversight. It also

serves a population of . . . juveniles who

have been in trouble with the law, and treats

them at a residential setting. So I am

concerned about her identification with

individuals who have been charged with crime,

as well there's going to be a lot of testimony

here with respect to dealing with federal

regulators and the federal government as part

of the defense in this case.

After some back and forth, the prosecutor explained that,

based on her prior experience with Job Corps cases, she knew that

Job Corps employees are not strictly speaking federal employees or

part of a federal agency but instead are "hire[d] . . . from the

outside" by the Department of Labor, such that their relationship
No juror had admitted a juvenile conviction, but one--whom 1

defense counsel ultimately struck--had admitted to being

"criminally charged with vandalism and work[ing] through that as a

kid" 26 years earlier. Another had been accused and acquitted of

arson at age 18.

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with federal supervisors can be "contentious." Aranjo's counsel

noted that the prosecutor had not struck a white male juror who had

admitted a juvenile conviction, and claimed that this showed the 1

prosecutor's proffered reasons were in this respect a pretext for

racial discrimination.

The court then allowed the government's peremptory

challenge, accepting that the prosecutor acted on the race-neutral

reason that the juror "is associated with an entity that is under

the eye of the federal government and . . . would be unduly

affected by that." After the court ruled, the prosecutor noted

that there would be testimony about Aranjo's work with the Youth

Credit Union, the mission of which included helping to "keep kids

out of trouble."

The format in the trial court for framing and deciding a

Batson challenge is as follows:

First, a defendant must make a prima facie

showing that a peremptory challenge has been

exercised on the basis of race. Second, if

that showing has been made, the prosecution

must offer a race-neutral basis for striking

the juror in question. Third, in light of the

parties' submissions, the trial court must

determine whether the defendant has shown

purposeful discrimination.
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Miller-El v. Cockrell, 537 U.S. 322, 328-29 (2003) (citations

omitted). The defendant ultimately bears the burden of persuasion

as to discriminatory purpose. Johnson v. California, 545 U.S. 162,

170-71 (2005). Where the trial judge has found that the burden has

not been carried, review of a preserved Batson claim is for clear

error. United States v. Girouard, 521 F.3d 110, 115 (1st Cir.

2008).

The parties dispute whether the defendants established a

prima facie case of discrimination and whether the district court

so found, but as the prosecutor offered an explanation and the

judge accepted it, we do not pursue the issue. Some case law

suggests that this sequence makes it unnecessary to decide the

prima facie issue. Hernandez v. New York, 500 U.S. 352, 359

(1991); United States v. Perez, 35 F.3d 632, 635 (1st Cir. 1994).

Certainly that is true where, as here, we uphold the trial judge's

finding that the explanation was adequate.

Aranjo and Smith argue that the prosecutor's concern

about the struck juror's Job Corps affiliation was pretextual,

pointing to two sets of white jurors that they claim were

"similarly situated" but were not struck: the two jurors who had

reported being accused of crimes in their youth, see note 1 above,

and two who had ties to the banking industry. True enough, "[i]n

considering Batson claims, courts may examine . . . whether

similarly situated jurors from outside the allegedly targeted group
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were permitted to serve." Aspen v. Bissonnette, 480 F.3d 571, 577

(1st Cir. 2007).

But the connections between two jurors and the banking

industry were more attenuated than the challenged juror's

connection to the Job Corps: one had a father-in-law on a savings

bank board and another had a daughter who worked for a bank; by

contrast, the challenged juror in this case worked directly for the

Job Corps. Several of the charges against Aranjo involved alleged

obstruction of supervisory officials, so a concern about an

antagonistic relationship between Job Corps employees and federal

managers could be legitimate.

The prosecutor gave no specifics beyond a general

reference to her own experience, but none were sought. Further,

a Batson challenge is a preliminary matter handled by the judge

with few formalities. Nor is the accuracy of the prosecutor's

assessment critical; it is enough if her explanation was raceneutral and reflected her true motive. Purkett v. Elem, 514 U.S.

765, 768-69 (1995) (per curiam); Mitleider v. Hall, 391 F.3d 1039,

1049 (9th Cir. 2004); United States v. Thomas, 320 F.3d 315, 320

(2d Cir. 2003). Peremptory challenges are regularly based on

counsel's prior experience with jurors.

As for the jurors criminally accused as youth, the

accusations were decades earlier for both, while the prosecutor

said she was concerned about a juror who did or had worked with an
Smith's motion for judgment of acquittal appears to have 2

aimed at all of these counts, but Smith's brief on appeal focuses

on the conspiracy. Nothing in his brief disputes the evidence for

his conviction on four counts of filing false tax returns and on

one count of bank fraud. The tax counts were for failing to report

the income that the government claimed he had embezzled; the bank

fraud concerned unrelated matters.

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organization that might identify with those charged with crime.

Further, the struck juror was the only one who fit both of the

prosecutor's negative concerns: possible identification with those

criminally accused and potential antagonism toward federal

regulators. In all, the district judge did not clearly err in

accepting the proffered reasons.

Smith alone makes a number of other claims of error. We

begin with Smith's claim that the evidence against him was

insufficient. With some basis, the government treats this as a

challenge only to Smith's conviction for conspiracy and not to the

substantive counts on which he was convicted; but Smith's brief is

imprecise and certain of his arguments, if successful, might

logically undermine his aiding and abetting convictions on the four

embezzlement counts. In any event, the facts that support them 2

are building blocks for the conspiracy count.

An attack on the sufficiency of the evidence is normally

an uphill struggle: although the jury must find the elements of the

offense beyond a reasonable doubt, the defendant's burden on appeal

is to show that, crediting the government's witnesses and drawing

all reasonable inferences in its favor, no reasonable jury could
For example, Smith used money from his negative balance Wells 3

account to pay for a sauna for his and Aranjo's home and wrote

checks for hundreds of thousands of dollars from the negative

balance D.A.T. Construction account, some made out to himself.

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have reached a guilty verdict. United States v. Marin, 523 F.3d

24, 27 (1st Cir. 2008). In this case the four substantive

embezzlement convictions are secure and their evidence bears on the

conspiracy charge as well.

Each count rested on one or more transactions through

which Smith or an entity he controlled improperly received money

from Wells. Three concerned Smith's expenditure of funds in excess

of amounts on deposit in his personal account or the account of one

of his companies. The fourth concerned a $225,000 transfer into 3

one of the company accounts, which constituted an undocumented

"loan" from Wells against which only one $10 payment was ever made

(as to this, an IRS agent with a corporate accounting background

offered testimony that it was "not a true loan").

Proof of these transactions and their impropriety was

coupled with evidence that Smith was regularly receiving cashier's

checks or making withdrawals unsupported by funds in his personal

account or others he controlled; that his wife was involved in

giving approval for such transactions; that some payments occurred

immediately after he had conferred with her at the bank; and that

the negative balances were sufficiently large that he had to know

that his withdrawals were misappropriating bank funds, particularly
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since he received and possessed information revealing those

negative balances.

Smith's theory is that at worst he was merely the

recipient of funds embezzled by his wife and not himself an

embezzler or a co-conspirator. One can be a knowing recipient of

stolen goods without necessarily being an aider and abettor of the

theft or a co-conspirator, see, e.g., Baker v. United States, 393

F.2d 604, 609 (9th Cir. 1968); but these four counts do not charge

wrongful transfers to or withdrawals by Aranjo subsequently passed

on to Smith; in each instance he or his company obtained money from

Wells with Aranjo's cooperation, directly aiding and abetting an

embezzling transaction that she facilitated.

Each of these transactions is also evidence of a

conspiracy to embezzle. Perhaps a jury could view them as separate

conspiracies; but their number, the common use of Wells' funds and

Aranjo's authority, the benefit that each defendant might receive

from the funds the other obtained from Wells, and the similarity in

methods permitted the jury to infer an arrangement between them to

fleece Wells for their mutual benefit. United States v. Rivera

Calderon, 578 F.3d 78, 89-91 (1st Cir. 2009); United States v.

Soto-Beniquez, 356 F.3d 1, 18-19 (1st Cir. 2004).

If the government's case is thin at all, it is solely

insofar as the government charged that the objects of the

conspiracy were both "to fraudulently obtain and convert to their
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own personal use and to the personal use of others, money from

Wells" and "to prevent detection of the fraud." While the former

was amply proved as to both defendants, little direct proof exists

of Smith's involvement with or even his direct knowledge of

Aranjo's falsifications and obstructions. But the primary purpose-

-to embezzle--is all that is needed to convict.

Probably the government charged the secondary objective

in order to ensure that the rich evidence of Aranjo's falsification

and obstruction reached the jury; but the evidence was admissible

against Aranjo even in a joint trial and even if preventing

detection were not charged as an objective of the conspiracy. It

may even be arguable--we need not decide the point--that the jury

could reasonably infer that Aranjo and Smith discussed Aranjo's

false book or record entries or that Smith had to know that they

would occur as part of the embezzlement.

Yet even if we assume that evidence was lacking as to a

common purpose to falsify books and obstruct detection, a

conspiracy based on a common purpose to embezzle was both charged

and proved. As a matter of common sense, the conspiracy conviction

had to rest on the evidence of this common purpose to embezzle--

which we have noted is ample--and not instead simply on a secondary

purpose as to which very little was proved against Smith. See

Griffin v. United States, 502 U.S. 46, 56-57 (1991); United States

v. Lanoue, 71 F.3d 966, 982-83 (1st Cir. 1995).
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Thus, the most Smith might have obtained--assuming that

the secondary purpose had been originally omitted from the

conspiracy charge against Smith or struck by the judge at the close

of the government's case--was an instruction not to consider

against him evidence of false entries and obstructive acts by

Aranjo that scarcely inculpated him at all. No such instruction

was sought and, given the thinness of the latter evidence as to

Smith, the lack of such an instruction could scarcely have

prejudiced Smith on the conspiracy charge or on any other.

Smith's remaining arguments all concern a statement in a

report that was made by a NCUA examiner--Michelle Thibault--who was

assigned to examine Wells in 1999; the report documented

discussions that occurred at a NCUA-Wells joint conference. At

issue is a single sentence in the report that reads, "[Aranjo] also

stated [at the joint conference] that she spoke with her husband

last night and that if the credit union does not sue NCUA, she may

pursue legal action on her own," which Thibault also read aloud in

her testimony at trial.

The context was efforts by Aranjo to halt or limit NCUA's

endeavors, and the government mentioned Aranjo's statement to the

jury in closing as one indication that Smith had knowledge of and

therefore conspired in efforts his wife was making to conceal the

embezzlements. The statement is weak proof either that Smith knew

his wife was aiming to conceal wrongdoing or that he joined in that
Seemingly the jury's attention had already been drawn to the 4

statement without objection during preliminary questions to

Thibault, and the report itself was admitted into evidence without

objection and was therefore available to the jury in any event.

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purpose; it does little more than say she might sue NCUA,

confirming that he and his wife talked about Wells and the

investigation.

But this, of course, is something that the jury could

reasonably infer from other evidence. A number of the diversions

of Wells' assets involved both of the defendants, and some of the

funds were spent for purchases from which they both benefitted.

And, as part of the investigation concerned entities in which Smith

was involved--Friends of the Credit Union, of which he was

treasurer, and D.A.T. Destiny and D.A.T. Construction, two

companies he controlled--he could not reasonably have been ignorant

of it.

In all events, when the government asked Thibault about

the sentence on direct examination, Smith objected without giving

any reason; the judge overruled the objection while offering

counsel the opportunity for a side bar conference if he wanted

further argument, but counsel did not take up the invitation.4

Smith now says that the admission of the statement was improper

hearsay that violated his Confrontation Clause rights under

Crawford v. Washington, 541 U.S. 36 (2004), and Bruton v. United

States, 391 U.S. 123 (1968).
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As to hearsay, Smith concedes that the report was

admissible as a business record, Fed. R. Evid. 803(6), but, as the

reported statement was made by Aranjo and yet used as well against

Smith, Smith complains that there was no finding by the judge that

the statement within the report was admissible against Smith as one

made by a co-conspirator during the conspiracy and in furtherance

of it. United States v. Petrozziello, 548 F.2d 20, 23 (1st Cir.

1977). But Smith never requested such a finding, either upon his

objection or at the close of all evidence, nor did he complain of

its absence in moving for judgment of acquittal.

Although we could remand for a finding if we thought it

necessary, United States v. Machor, 879 F.2d 945, 950-51 (1st Cir.

1989), the evidence of a conspiracy to embezzle by Aranjo and Smith

was very strong; the statement added little, save as it allowed the

government to suggest that Smith was aware of one specific step in

the cover-up. Indeed, as already explained, evidence of the coverup is almost beside the point as to Smith, while the adequacy of

the evidence against Aranjo is not even challenged on appeal.

Anyway the objection has been forfeited.

As for Smith's claim that the statement's admission

violated the Confrontation Clause as interpreted by Crawford and

Bruton, neither the concept nor either case was mentioned in

opposing the admission of the statement. Thus, we review this

claim only for plain error. United States v. Ziskind, 491 F.3d 10,
See United States v. Olano, 507 U.S. 725, 734-36 (1993); 5

United States v. Cotton, 535 U.S. 625, 632 (2002); Ziskind, 491

F.3d at 14.

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13-14 (1st Cir. 2007). Given the powerful evidence of a conspiracy

to embezzle, and the fact that the statement added almost nothing

beyond what a jury would infer, we think the supposed

constitutional error--if there was any--could not have changed the

outcome, let alone caused a miscarriage of justice.5

Affirmed.