### IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 97-40307

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

versus

RAYMOND CASTANEDA,

Defendant-Appellant.

Appeal from the United States District Court

for the Southern District of Texas

December 9, 1998

Before WISDOM, WIENER, and DENNIS, Circuit Judges.

WIENER, Circuit Judge:

In this direct criminal appeal, defendant-appellant Raymond

Castaneda ch allenges his conviction of RICO conspiracy under 18

U.S.C. § 1962(d), alleging errors at both the indictment and trial

s tages of his case. Concluding that the district court erred in

failing to dismiss Castaneda’s indictment on the basis of the

government’s unwarranted revocation of its transactional immunity

agreement, we reverse Castaneda’s conviction, vacate his sentence,

and remand for entry of a judgment of acquittal.1 According to the terms of this agr eement, Castaneda was granted

“use” but not “derivative use” immunity. In other words, the government

promised not to use any of the information or statements provided by

Castaneda d irectly against him in any criminal proceeding, but reserved its

right to pursue investigative leads derived from Castaneda’s statements and

use this “derivative” evidence against him.



### 2 I

FACTS AND PROCEEDINGS

Castaneda owned an auto repair shop and towing service in

Brownsville, Texas. From 1990 to 1994, William Weaver worked as an

investigator i n the Cameron County Attorney’s Office in

Brownsville. During these years, Castaneda and Weaver conspired to

solicit bribes from individuals accus ed of driving while

intoxicated (DWI) in exchange for getting the charges dismissed or

sentences reduced. Castaneda’s role in this conspiracy was that of

middleman, referring “clients” to Weaver, arranging meetings,

receiving payments, and suggesting strategies for accomplishing

fixes. Weaver’s role on the other hand was that of principal,

making the necessary arrangements within the County Attorney’s

Office to have the charges reduced or disappear.

Suspecting corruption, the FBI began an investigation of the

County Attorney’s Office. As part of this activity, Special Agent

Jose Louis Cisneros sought Castaneda’s cooperation. This, in turn,

led AUSA Mervyn Milton Mosbacker and Castaneda to enter into an

informal, written proffer agreement on January 24, 1995, pursuant

to which Castaneda was granted use immunity. 1 

### Sometime later, AUSA2 Although there is some question as to whether AUSA Mosbacker had the

authority to grant Castaneda transactional immunity, for the purposes of

this appeal, the government does not dispute the existence of a valid

agreement.

3 Pursuant to this ag reement, Castaneda also agreed to provide

information about the illegal activities of Alex Perez, the Sheriff of

Cameron County.

4 Castaneda told the government that , in addition to Reyes’s

in volvement in drug trafficking, he often paid large sums of cash to

Sheriff Perez (presumably as political contributions). On many of these

occasions, admitted Castaneda, he served as the conduit between Reyes and

Perez.

5 Castaneda told the government that he was approached by Julio

Gonzalez in 1992 for assistance in getting his DWI case reduced. Gonzalez

gave Castaneda $1,000 to pass on to Weaver as payment for the fix.

Castaneda acknowledged keeping approximately $100 for himself.

6 Castaneda advised the government that Gonzalez approached him on

another occasion for assistance in getting dismissed a DWI for Jeff Lewis.

Castaneda was unsure if Weaver had ultimately been successful in fixing the



### 3 Mosbacker and Castaneda entered into another agreement 2



### —— this one

oral

—— in which Castaneda was granted tr ansactional immunity in

exchange for his obligation to “tell everything he knew” about

Weaver’s criminal activity. 3



### On January 24, 1995 and again on November 17, 1995, Castaneda

was questioned by Agent Cisneros and AUSA Mosbacker. In those

interviews, Castaneda acknowledged that he had participated as

Weaver’s intermed iary in several acts of bribery and extortion

connected to the “fixing” of criminal prosecutions brought by the

County Attorney’s Office. Castaneda identified a number of

individuals who had knowledge of, or had been involved in, the

scheme. These included(1) Jose Luis Reyes, 4 

### (2) J ulio Gonzalez, 5



### (3) Jeff Lewis, 6 

### (4) Chuy Hinojosa, 7 

### (5) Guadalupe Bara jas, 8 

### (6)case.

7 Castaneda told the government that an individual known as “Chuy”

Hinojosa had approached Weaver and given him an unknown amount of money.

When Weaver was unable to fix the case, Hinojosa’s money was returned.

8 Castaneda told the government that Barajas

—— who was on probation

and afraid she would fail a urine test

—— paid Weaver $6,000 to have the

test fixed.

9 Castaneda told the investigators that Morales was arrested for DWI

and possession of a firearm and that he paid Weaver $1,000 to get the case

dismissed. Castaneda admitted that, although he did not receive any money

directly from this transaction, Weaver paid him $1,000 on a separate

occasion to “keep [him] happy.”

1 0 Castaneda told the government that Cano paid Weaver $15,000 to fix

a cocaine possession charge. When Weaver was unable to get the case

dismissed or reduced, the money was returned to Cano’s family.

1 1 Castaneda informed the agents that Meliton Garcia paid Weaver $500

to get an assault charge dismissed or reduced. Out of that money,

Castaneda admitted to having kept $50.

1 2 Count One alleged a pattern of r acketeering activity through

p redicate acts of bribery and extortion —— the taking of payments for

fixing DWI and marijuana possession prosecutions

—— in violation of 18

U.S.C. § 1962(c)(RICO). Count Two alleged a conspiracy to engage in the

same pattern of racketeering activ ity, in violation of 18 U.S.C. § 1962(d).



### 4 Federico Morales, 9 

### (7) Alejandro Cano, 1 0 

### and (8) Mario Meliton

Garcia. 11



### On October 22, 1996

—— almost one year after the November,

1995 interview with Castaneda, and at the end of the grand jury’s

deliberations —— the government wrote to Castaneda advising that,

because he had “failed to provide . . . relevant and material

information con cerning criminal activities of which he was well

aware,” he had violated the transacti onal immunity agreement, so

the government was revoking its promise not to prosecute. The very

next day, a grand jury returned a seven-count indictment 12 

### againstCounts Three through Six alleged spe cific acts of extortion involving both

defendants, in violation of 18 U.S.C. §§ 1951 and 1952 (Hobbs Act). Count

Seven concerned an act of extortion involving only Weaver



### .

1 3 Weaver pled guilty to the RICO substantive count, and his sentence

was reduced to approximately 17 months. The reduction of Weaver’s sentence

was contingent on his willingness to testify truthfully against Castaneda

at trial.

1 4 In his other motion, Castaneda sought to have the indictment

dismissed on the ground that the government had breached its proffer

agreement by using his immunized testimony in the grand jury proceeding.

The district court denied this motion but we do not reach it.

1 5 The jury acquitted Castaneda of the RICO substantive count and the

four Hobbs Act counts. The count on which Castaneda was convicted

identified as predicate acts five DWI cases that he and Weaver conspired

to fix. Named as the bribe-payors/extortion victims in these cases are

Julio Gonzalez (a participa nt in two transactions —— his own and that

involving Maurice Middleton), Meliton Garcia, Rafael Gonzalez and Sammy

Snodgrass (a participant in the transaction inv olving Jeff Lewis).

Predicate Act Six

—— referring to the dismissal of a marijuana charge for

Silverio Garza —— pertained only to Weaver.

1 6 On appeal, Castaneda asserts four distinct errors that allegedly

warrant the reversal of his co nviction. Because we conclude that the

government breached its transactional immunity agreement and that the



### 5 Castaneda and Weaver. 13



### Castaneda filed two motions to dismiss the indictment, in one

of which he argued that the government had breached its agreement

not to prose cute. 1 4 

### After an evidentiary hearing, the district

court denied Castaneda’s motion without reasons.

The reafter, Castaneda was convicted by a jury of RICO

conspiracy. 1 5 

### The district court entered judgment in accordance

with the jury’s verdict, and sentenced Castaneda to 33 months in

prison, to be followed by a three year period of supervised

release, and a fine of $7,500.00. Castaneda appeals his

conviction. 16district court erred in failing to dismiss Castaneda’s indictment on this

ground, we do not reach Castaneda’s other three assignments of error.

1 7 United States v. Moulder

, 141 F.3d 568, 571 (5th Cir. 1998); United

States v. Ballis

, 28 F.3d 1399, 1409 (5th Cir. 1994); United States v.

Fitch

, 964 F.2d 571, 574 (6th Cir. 1992); United States v. Brown

, 801 F.2d

352, 354 (8th Cir. 1986).

18 United States v. Tilley , 964 F.2d 66, 70 (1st Cir. 1992).

1 9 Ballis

, 28 F.2d at 1409; Tilley

, 964 F.2d at 70; United States v.

Crawford , 20 F.3d 933, 935 (8th Cir. 1994).

According to Castaneda, the government’s sole remedy for his alleged

breach would be prosecution for perjury, not rescission of the agreement.

Castaneda claims that the government is limited to the remedies stated in

the agreement. Because the oral agreement did not specifically contemplate



### 6 II

ANALYSIS

Castaneda argues that the district court should have granted

his motion to dismiss the indictment because the government

breached its oral agreement not to prosecute. Implicit in this

c laim is the charge that the government failed to show by a

prepond erance of the evidence that Castaneda materially breached

the immunity agreement, witho ut which the government could not

repudiate the contract and prosecute him. We agree.

Nonprosecution agreements, like plea bargains, are contractual

in nature, and are therefore interpreted in accordance with general

principles of contract law. 17 

### Under these principles, if a defendant

l ives up to his end of the bargain, the government is bound to

perform its pr omises. 1 8 

### If a defendant “materially breaches” his

commitments under the agreement, however, the government can be

r eleased from its reciprocal obligations. 1 9 

### When the governmentprosecution for im munized crimes in the event he failed to provide full and

truthful information, argues Castaneda, the government may not revoke its

g rant of transactional immunity. In support of this proposition, Castaneda

cites United States v. Fitch , 964 F.2d 571, 575 (6th Cir. 1992).

2 0 United States v. Verrusio

, 803 F.2d 885, 888 (7th Cir. 1986); United

States v. Tarrant , 730 F.Supp. 30, 32 (N.D. Tex. 1990).

2 1 United States v. Price

, 95 F.3d 364, 367 (5th Cir. 1996)(stating

that, in determining whether government’s actions have breached terms of

plea agreement, defendant bears burden of demonstrating underlying facts

that establish breach by preponderance of evidence); United States v.

Wittie

, 25 F.3d 250, 262 (5th Cir. 1994), a ff’d

, 515 U.S. 389 (1995)(same);

Tilley

, 964 F.2d at 71 (holding that before government may revoke

agreement, it must show by a preponderance of evidence that the defendant

has committed a substantial breach); United States v. Packwood

, 848 F.2d

1009, 1011 (9th Cir. 1988)(same).

We rec ognize, however, that not all courts have adopted this

standard. See, e.g.

, U nited States v. Gonzalez-Sanchez

, 825 F.2d 572, 578

(1st Cir. 1987)(holding that government bears the burden of demonstrating

by adequate evidence that there has been a su bstantial breach by

defendant); State v. Rivest 316 N.W.2d 395, 398-99 (Wis. 1982)(adopting a

beyond a reasonable doubt standard); U nited States v. Skalsky

, 616 F.Supp.

676, 681 (D.N.J. 1985)(requiring proof of material breach by clear and

convincing evidence).

22 See Packwood , 848 F.2d at 1011; Tarrant , 730 F.Supp. at 32.

2 3 Packwood

, 848 F.2d at 1011; United States v. Calabrese

, 645 F.2d

1379, 1390 (10th Cir. 1981).



### 7 believes that a defendant has breached the terms of a nonprosecution

agreement and wishes to be relieved of performing its part of the

bargain —— here, refraining from prosecuting the defendant —— due

process prevents the government from making this determination and

nullifying the agreemen t unilaterally. 2 0 

### Instead, the government

m ust prove to the court by a preponderance 21 

### of the evidence tha t

(1) the defendant breached the agreement, and (2) the breach is

sufficiently material to warrant rescission. 22 

### If the pleadings show

no factual dispute, however, the court may determine breach as a

matter of law. 23 

### Because the district court issued no factual2 4 Moulder

, 141 F.3d at 571; Price

, 95 F.3d at 367; United States v.

Laday

, 56 F.3d 24, 26 (5th Cir. 1995); Wittie

, 25 F.3d at 262; U nited

States v. Valencia , 985 F.2d 758, 760 (5th Cir. 1993).

The government argues that the appropriate standard of review is

clear error. S ee United States v. Gibson

, 48 F.3d 876, 878 (5th Cir.

1995); Ballis

, 28 F.3d at 1409. We agree that this is the appropriate

standard for reviewing a district court’s findings as to the underlying

facts that constitute breach. In the absence of such factual findings,

however, we must conduct a de novo review of every aspect of Castaneda’s

purported breach.

2 5 The government did not seek a judicial determination of breach until

after Castaneda had been indicted, and Castaneda does not contend that a

hearing had to have been held prior to this time. For the purposes of this

opinion, therefore, we do not pass on the issue of when, during the

progress of a criminal investigation, a judicial determination of breach

is required to comport with due process. S ee Verrusio

, 803 F.2d at 888-89

(discussing whether defendant’s indictment constituted a deprivation of his

inte rest in the enforcement of a plea agreement, and whether he was

entitled to a preindictment hearing to determine whether he had breached

his obligations under that agreement).

2 6 All of the evidence presented at the pretrial hearing pertained to

Castaneda’s omission of information about illegal activities involving

Weaver. It appears that the government introduced evidence in camera



### 8 findings in this case, we review Castaneda’s claim of breach of a

nonprosecution agreement de novo

. 24



### In the instant case, the government promised not to prosecute

Castaneda for his role in the bribery scheme in exchange for his

full and truthful disclosure of information implicating Weaver.

After dealing with Castaneda for more than a year, the government

rescinded this agreement at the eleventh hour, and Castaned a was

indicted by the grand jury one day later. At a pretrial hearing on

C astaneda’s motion to dismiss his indictment, 25 

### the governmen t

presented evidence purporting to show that Castaneda had breached

his end of the bargain by failing to reveal “relevant and material

information

. . . of which he was well aware.” 26 

### Because of theseregarding Castaneda’s alleg ed omissions about activities involving Sheriff

Alex Perez. It is not clear whether the court took this evidence into

account when determining Castaneda’s breach, and this evidence is not in

the record on appeal. Although the government maintains its position that

Castaneda breached the nonprosecution agreement with regards to both Weaver

and Perez, the governmen t has failed to cite any specific omissions

involving Perez and has failed to see to it that its in camera inculpatory

evidence is included in the record on appeal.

2 7 Castaneda’s lawyer

—— Ernesto Gamez, Jr.

—— wrote a letter to AUSA

Mosbacker, dated December 12, 1996, in which he argued that Castaneda’s

inadvertent omission of some names does not amount to a lie.

Forgetfulness, a rgued Gamez, is not the same as noncompliance.

Furthermore, Gamez contended, the government “either already possessed

[the omitted names] or acquired this addit ional information from

[Castaneda’s] statements.” In the letter, Gamez noted that he had spoken

with Agent Cisneros on severa l occasions, and that he had been led to

believe that the government was fully satisfi e d with the information

provided by Castaneda. Gamez also claimed that Agent Cisneros had agreed

to contact him in the event the government needed additional information.

28 For some of the circumstances in which courts have allowed the

government to rescind plea agreements , see B allis

, 28 F.3d at 1409

(withholding of information, untruthful testimony, and inducement of plea

agreement by fraud); Hentz v. Hargett

, 71 F.3d 1169, 1172-75 (5th Cir.

1996)(informing prosecutor of intent to change testimony is circumstance

amounting to anticipatory repudiation which justifies revo cation of

agreement); Tarrant

, 730 F.S upp. at 32-33(refusing to cooperate by failing

to meet with government representatives, failing to testify before grand

jury and fleeing jurisdiction to avoid cooperation); United States v.

Donahey

, 529 F.2d 831, 832 (5th Cir. 1976)(providing evasive, misleading

answers, answers which could not be verified, and refusi ng to answer



### 9 alleged o missions, contended the government, it was entitled to

rescind the agreement and be relieved of its obligation not to

prosecute. Castaneda countered that he gave the government

considerable, accurate, and incriminating information about Weaver,

and that any omissions Castaneda made were essentially inadvertent

or duplicative and thus did not amount to a material breach of the

agreement. 27 

### In so many words, he argued substantial performance.

There is no clear Fifth Circuit law o n the issue of what

constitutes a “material breach” of a nonprosecution agreement. 28questions).

2 9 Hanson Prod. Co. v. Americas Ins. Co

, 108 F.3d 627, 630 (5th Cir.

1997)(relying on Hernandez v. Gulf Group Lloyds

, 875 S.W.2d 691, 692-92

(Tex. 1994) in holding that, where an insurer is not prejudiced by a

breach, the breach is not material, the insurer has not been deprived of

the benefit of the bargain, and it should not be relieved of its obligation

to provide coverage).

The “benefit of the bargain” standard has been adopted, at least in

part, by the Eighth Circuit in determining breac h of an immunity agreement.

In United States v. Crawford

, 20 F.3d 933 (8th Cir. 1994), the court relied

on the following three factors

—— borrowed from th e Restatement of

Contracts

—— to guide their determination: (1) the extent to which the

injured party will be deprived of the benefit which he reasonably expected;

(2) the likelihood that the party failing to perform will cure his f ailure;

and (3) the extent to which the behavior of the party failing to perform

comports with standards of good faith and fair dealing. I d. at 935. The

other considerations listed in the Restatement as significant in

determining the materiality of a breach include (1) the extent to which the

injured party can be adequately compensated for the part of that benefit

of which he will be deprived; and (2) the extent to which the party failing

to perform or to offer to perform will suffer forfeiture. R estatement

(Second) of Contracts § 241 (1981).

In United States v. Fitch

, the Sixth Circuit adopted a somewhat more

rigorous standard, holding that the government must prove a “bad faith,

intentional, substantial omission” on the part of the defendant before it

can be released from its obligations. 964 F.2d at 574 (adopting the

standard set forth in United States v. Castelbuono

, 643 F.Supp. 965, 971

(E.D.N.Y. 1986)).

30 Hernandez v. Gulf Group Lloyds , 875 S.W.2d 691, 693 (Tex. 1994).

3 1 See White Hawk Ranch, Inc. v. Hopkins

, No. CIV.A.91-CV29-DD, 1998

WL 94830, at *3 (N.D.Miss. Feb. 12, 1998). S ee also 2 E. Allan Farnsworth,



### 10 In the context of general contract law, however, we have recognized

that a breach is not material unless the non-breaching party is

deprived of the benefit of the bargain. 2 9 

### The less the nonbreaching party is deprived of the expected benefits, the less

material the breach. 30



### Courts within this Circuit have clarified the concept of

material breach by comparing it with the converse concept of

substantial performance. 31 

### Using this approach, if a party’sFarnsworth on Cont racts § 8.16 at 442 (2d ed. 1990)(recognizing that

substantial performance is performance without a material breach, and a

material breach results in performance that is not substantial).

32 White Hawk Ranch , No. CIV.A.91-CV29-DD, 1998 WL 94830, at *3.

3 3 The government cites United States v. Gerant

, 995 F.2d 505, 509 (4th

Cir. 1993) in support of its ar gument that Castaneda’s breach of the

agreement should not b e overlooked simply because he furnished the

government with some useful information. In G erant

, however, the court

concluded that the defendant’s breach of the nonprosecution agreement had

“seri ously impaired ongoing drug investigations and prosecutions,” thereby

entitling the government to rescission of the agreement. I d. In other

words, the government had been prejudiced by the defe n dant’s breach.

Moreover, the court was careful to point out that there may be cases “where

the extent of information and cooperation provided by a defendant who has

trivially breached a nonprosecution agreement is so great that the court

is persuaded that the defendant substantially complied with the agreement.”

Id. at 509 n.4. Thus, while the Fourth Circuit rejected the defendant’s

substantial compliance argument under the particular facts of the case,

Gerant does not stand for a per se rejection of this argument.



### 11 “nonperformance . . . is innocent, does not thwart the purpose of

the bargain, and is wholly dwarfed by tha t party’s performance,”

the breaching party has substantially performed under the contract,

and the non-breaching party is not entitled to rescission. 3 2 

### We

think that this approach is equally applicable in determining the

materiality of a breach in the context of nonpros ecution

agreements. 33 

### Given the government’s burden of proof, our de novo

application o f this test demonstrates that the relatively

insignificant omissions by Castaneda did nothing to frustrate the

government’s prosecution of Weaver. Moreover, these omissions pale

by comparison to the plethora of information delivered by

Castaneda.

The government argues that Cas taneda committed a material

breach of the agreement by failing to reveal Weaver’s involvement3 4 Agent Cisneros testified at the pretrial hearing that the government

knew about the cases of Meliton Garcia, Maurice Midd leton and Rafael

Gonzalez before interviewing either Castaneda or Weaver. The government

conducted interviews with Weaver on February 27, 1995, March 22, 1995, May

31, 1995 and January 29, 1996.

3 5 The indictment listed, as RICO predicate acts, instances of bribery

and extortion involving Julio Gonzalez (Act One —— for dismissal of his own

DWI charge), Meliton Garcia (Act Two

—— albeit for the dismissal of his DWI

charge rather than his assault charge ), and Jeff Lewis (Act Five —— through

Sammy Snodgrass for dismissal of Lewis’s DWI). Illegal activities with

these same individuals formed the basis of Counts Three, Four, and Six

——

Hobbs Act violations.



### 12 in the dismissal of DWIs for Meliton Garcia, Maurice Middleton and

Rafael Gonzalez, as well as the dismissal of a gun charge for Jose

Galvan. 34 

### Although it is clear that Castaneda omitted some

information during his interviews with the government, it is

anything but clear that, when viewed in the context of what the

government already knew or learned derivatively from other sources,

these omissions rise to the level of a material breach, even

collectively.

Castaneda provided the government with substantial, detailed

accounts of bribery involving Weaver and seven other individuals

——

Julio Gonzalez, Jeff Lewis, Chuy Hinojosa, Guadalupe Barajas,

Federico Morales, Alejandro Cano, and Mel iton Garcia. Weaver’s

illegal activities w i th three of these individuals eventually

formed the basis for predicate racketeering acts and Hobbs Act

counts in the indictment. 35



### Even the government’s exa mples of omissions cut both ways.

With regard to Meliton Garcia, Castaneda did provide the government3 6 Maurice Middleton was named in predicate Act Three of the

indictment.

37 Rafael Gonzalez was named in predicate Act Four and Count Five.



### 13 with information about the di smissal of an assault charge; he

merely failed to mention the dismissal of a DWI char ge as well.

Thus, Castaneda led the government to the right source, even if his

tip was not complete.

Likewise, although Castaneda did not disclose information

about Weaver’s dismissal of Maurice Middleton’s DWI, 36 

### Castaneda did

provide accurat e information about his own involvement as a gobetween for Weaver and Julio Gonzalez

—— and, thereafter, Gonzalez

confessed to the government that he ha d contacted Castaneda for

help getting DWIs dismissed both for himself and Middleton, as well

as for Jeff Lewis. Thus, Castaneda did indirectly that about which

the government faults him for not doing directly.

Finally, with regard to Rafael Gonzalez 37 

### , Agent Cisneros and

AUSA Mosbacker were inconsistent about the extent of information

Castaneda provided. In the pretrial motion hearing, Agent Cisneros

repeatedly testified tha t Castaneda had discussed Rafael’s DWI,

only to recant this assertion on further questioning. AUSA

Mosbacker admitted that he thought Castaneda had discussed

illegalities in which Weaver and Rafael were involved , but

maintained that Castaneda did not mention the DWI. Even if

Castaneda failed to reveal any direct information about Rafael,

though, i t is undisputed that he did provide substantial3 8 In addition, it appears that Castaneda did not provide any

information about an alleged DWI dismissal for an individual named Perez

(first name unknown). When asked during the pretrial hearing to list the

omiss ions constituting Castaneda’s breach, however, AUSA Mosbacker did not

mention this transaction. Neither is the Perez omission mentioned in the

government’s brief to this Court.

We note that, in addition to dismissals of charges against Julio

Gonzalez, Meliton Garcia, Maurice Middleton, Rafael Gonzalez, and Jeff

Lewis, the indictment identified as a predicate act for the substantive

RICO count the dismissal of a marijuana charge for Silverio Garza (Act

Six). This same transaction formed the basis of Count Seven. Castaneda

was not named in Act Six or Count Seven, however, and the government does

not assert that he had any knowledge of this transaction.



### 14 information about Jose Reyes

—— a source intimately connected with

Rafael Gonzalez. Thus, it appears that the only Weaver-related

individual about whom Castaneda failed entirely to provide

information was Jose Galvan —— for dismissal of a gun charge that

did not serve as the basis for any count in the indictment. 38



### Hav ing reviewed the briefs of the parties, heard oral

argument, and thoroughly reviewed the record, we are now satisfied

that, despite Castaneda’s relatively insignificant omissions, the

government got the benefit of its bargain and has failed to carry

its burden of proving a material breach by Castaneda. The

government granted Castaneda transactional immunity with the

intention of receiving in return leads and information pertinent to

its investigation of Weaver and corruption in the Camer on County

A ttorney’s Office. Castaneda provided both direct and indirect

leads, and volumes of such information as well. In fact, Castaneda

gave the government significant quantities of detailed information

about Weaver’s involvement in at least seven illegal transactions3 9 Including dismissals for Julio Gonzalez, Jeff Lewis, Chuy Hinojosa,

Guadalupe Barajas, Federico Morales, Alejandro Cano, and Meliton Garcia.

The information that Castaneda provided regarding Jose Reyes was directly

pertinent to the illegal activities of Sheriff Perez but not Weaver.



### 15 conducted through t he County Attorney’s Office. 3 9 

### Although it

appears that Castaneda’s performance was not perfect

—— that he did

not literally “tell everything he knew,” as he was technically

required to do under the agreement

—— the government has failed to

show that these omissions were intentio nal or, more importantly,

that the government was prejudiced. Much of the relatively little

that Castaneda omitted was already known to the government before

interrogating Cas taneda, or was discovered from other sources.

When viewed in light of the overwhelming quantity of information he

furnished about numerous individuals and incidents involving

Weaver, much that Castaneda omitted must be classified either as

cumulative or surplusage. In the absence of proof of substantial

or intentional omissions by Castaneda constituting prejudice to the

government, the district court erred in permitting the government

to revoke the nonprosecution agreement with Castaneda and prosecute

him in this case.

III

CONCLUSION

It ill behooves government agents and prosecutors to enter

into agreemen ts of transactional immunity with mid-level coconspirators, milk them of substantial leads and information that

literally make the government’s case against the “big fish” while

### 16

coincidentally giving the government a lay-down winning hand

against the cooperating co-conspirator; then, at the last moment,

rely on som e technical or relatively minor deficiency in

performance to pull the rug from under the cooperating informant by

claiming a breach and proceed to prosecute him in a slam-dunk case

based largely on his own revelations. Yet, this is precisely what

we perceive to have happened here, and due process cannot abide

such behavior. For the reasons explained above, we conclude that

the district court erred in failing to grant Castaneda’s motion to

dismiss the indictment, which was obtained in violation of a

transactional immunity agreement, that the government failed to

prove w as materially breached. Castaneda’s conviction of RICO

conspiracy is reverse d, the sentence imposed in accordance with

that conviction is vacated, and the case is remanded to the

district court for entry of a judgment of acquittal.

REVERSED; sentence VACATED; and REMANDED with instructions.