Source: http://law.justia.com/cases/federal/appellate-courts/F3/404/470/589020/
Timestamp: 2013-05-25 01:45:44
Document Index: 493542638

Matched Legal Cases: ['§ 666', '§ 1951', '§ 1956', '§ 1512', '§ 1951', '§ 1951', '§ 1951', '§ 1956', '§ 666', '§ 666', '§ 666', '§ 1512', '§ 1512', '§ 1512', '§ 1', '§ 1', '§ 1', '§ 331', '§ 1', '§ 9', '§ 2']

404 F.3d 470: United States of America, Appellee, v. Juan M. Cruzado-laureano, Defendant, Appellant :: US Court of Appeals Cases :: Justia
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404 F.3d 470: United States of America, Appellee, v. Juan M. Cruzado-laureano, Defendant, Appellant
United States Court of Appeals, First Circuit. - 404 F.3d 470
Heard March 11, 2005
From 1996 to 2000, Cruzado ran a check-cashing business, El Cajero Expresso. In November 2000, Cruzado was elected mayor of Vega Alta &#x2014; his first try at running for public office &#x2014; as a member of the Popular Democratic Party and was duly sworn into office on January 8, 2001. Upon his election, Cruzado appears to have sold the check-cashing business to his oldest son, who took over day-to-day control. Cruzado, however, retained the last word in business affairs and kept control over the business's checking account.
Like city hall, Vega Alta's local health clinic, the Centro de Diagnóstico y Tratamiento (CDT), needed renovations. Located throughout Puerto Rico, CDTs provide basic health care to local populations.1 Shortly before the events of this case, Puerto Rico had privatized many CDTs. Vega Alta's CDT had been purchased by a partnership formed by two doctors: Luis González Bermúdez and Emilio Rivera Costas. The partnership was named Vega Alta Medical Hospital, Inc. The partners divided their responsibilities: Dr. González was the medical director, while Dr. Rivera was the administrator, handling tasks relating to maintenance, repair, and management. The partners had agreed with the municipality (although not in a written contract) that Vega Alta would provide two services &#x2014; ambulance service, crucial to the CDT's functioning, as well as groundskeeping. Vega Alta had also agreed to donate an old, unused mobile health vehicle, which the CDT could repair and then use to provide health care to rural and outlying areas. Dr. González testified that the municipality was in charge of maintaining and fixing the CDT's physical facilities, as directed by Dr. Rivera.
Mundo Construction, Inc., owned by Luis A. Vargas López, did business under the name Ferreteria Mundo as a construction company and hardware store. Like Colon, the owner of Ebanisteria Familia, Vargas knew Cruzado from using his check-cashing business. Vargas, too, helped with Cruzado's mayoral campaign, setting up platforms for political rallies without charge. In September 2001, Cruzado took Vargas to a neighborhood in Vega Alta, where they discussed a possible construction project involving sidewalks, curbs, and drainage. Cruzado asked for a price quote from Vargas. A few days later, after taking some measurements, Vargas delivered a written estimate of $39,500 to the clerk's office at city hall. Vargas then received a telephone call from the mayor, who asked him to add $2,000 to his quote. Vargas refused, explaining that he was reluctant to pass the $40,000 mark in his bid.4 Moreover, Vargas believed that Cruzado wanted the extra money for his private benefit. Consequently, Vargas refused to add $2,000 to his bid, and Cruzado then told him that the project would not be built because of a lack of funds. Cruzado was arrested shortly thereafter, and another contractor later completed most of the work that Cruzado and Vargas had discussed.
&#x2022; Count 1: embezzlement, 18 U.S.C. § 666(a)(1)(A)(i) and (a)(1)(A)(ii);
&#x2022; Counts 2, 4, 6, 12, 13, & 14: extortion, id. § 1951(a);
&#x2022; Counts 3, 5, 7, 8, 9 & 10: money laundering, id. § 1956(a)(1)(B)(i) and 1956(a)(1)(B)(ii);
&#x2022; Count 11: tampering with witnesses, id. § 1512(b)(1) and 1512(b)(2).
We review de novo a district court's denial of a motion for judgment of acquittal under Fed.R.Crim.P. 29.6 Our task is to decide "whether, after assaying all the evidence in the light most amiable to the government, and taking all reasonable inferences in its favor, a rational factfinder could find, beyond a reasonable doubt, that the prosecution successfully proved the essential elements of the crime." United States v. O'Brien, 14 F.3d 703, 706 (1st Cir.1994); see also United States v. Piper, 298 F.3d 47, 59 (1st Cir.2002). The government may satisfy its burden of proof "by either direct or circumstantial evidence, or by any combination thereof." United States v. Gifford, 17 F.3d 462, 467 (1st Cir.1994). Moreover, we must "resolve all credibility disputes in the verdict's favor." United States v. Taylor, 54 F.3d 967, 974 (1st Cir.1995). Ultimately, the court "need not believe that no verdict other than a guilty verdict could sensibly be reached, but must only satisfy itself that the guilty verdict finds support in a plausible rendition of the record." United States v. Gomez, 255 F.3d 31, 35 (1st Cir.2001) (citation and internal quotation marks omitted).
Those daunting hurdles apply to the counts that Cruzado contested below with a Rule 29 motion. He faces an even greater challenge on the counts that he did not so contest: counts 2, 3, 13, and 14. Cruzado's failure to move for judgment of acquittal on those counts means that he must show "clear and gross injustice" to prevail now.7 United States v. Hadfield, 918 F.2d 987, 996 (1st Cir.1990); see also United States v. Lopez, 380 F.3d 538, 547 (1st Cir.2004). With those principles in mind, we assess the sufficiency of the evidence, beginning with Cruzado's unpreserved challenges.
To establish a violation of the Hobbs Act, 18 U.S.C. § 1951, the government must prove three elements beyond a reasonable doubt: (i) that the defendant induced someone to part with property; (ii) that the defendant knowingly and willfully did so by extortionate means; and (iii) that the extortionate transaction affected interstate commerce. Id. § 1951(a).8 "The term `extortion' means the obtaining of property from another, with his consent, induced by wrongful use of actual or threatened force, violence, or fear, or under color of official right." Id. § 1951(b)(2).
Extortion by "fear" can mean fear of economic loss, including the possibility of lost business opportunities. United States v. Bucci, 839 F.2d 825, 827-28 (1st Cir.1988); see also United States v. Hathaway, 534 F.2d 386, 396 (1st Cir.1976). The government must "show that the victim believed that economic loss would result from his or her failure to comply with the alleged extortionist's terms, and that the circumstances ... rendered that fear reasonable." Bucci, 839 F.2d at 828; see also United States v. Rivera Rangel, 396 F.3d 476, 483 (1st Cir.2005). Alternatively, to prove extortion under color of official right, "the Government need only show that a public official has obtained a payment to which he was not entitled, knowing that the payment was made in return for official acts." Evans v. United States, 504 U.S. 255, 268, 112 S.Ct. 1881, 119 L.Ed.2d 57 (1992).
Cruzado's first two arguments reduce to a simple credibility dispute: Cuevas's account supports the conviction, while Cruzado's does not. Appellate courts, however, are wisely reluctant to "second-guess" a jury's credibility determination. United States v. Carroll, 105 F.3d 740, 743 (1st Cir.1997); see also United States v. Laboy-Delgado, 84 F.3d 22, 27 (1st Cir.1996). In the context of a sufficiency challenge, moreover, we are bound to "resolve all credibility disputes in the verdict's favor." Taylor, 54 F.3d at 974. A reasonable jury could have rejected Cruzado's self-serving testimony, finding instead that Cuevas was telling the truth.
Cruzado's third argument &#x2014; that the money was not legitimately Cuevas's to begin with &#x2014; also fails. The statute does not require that a victim of extortion part with his own property. Indeed, "a defendant's claim of right to the property is irrelevant. One may be found guilty of extortion even for obtaining one's own property." United States v. Sturman, 49 F.3d 1275, 1284 (7th Cir.1995). To be sure, the rightful owner of the $4,000 was the municipality, not Cuevas; it was paying for work that it had not received. Still, a reasonable jury could have found beyond a reasonable doubt that the mayor induced Cuevas to part with the money when Cuevas had actual possession over the property &#x2014; actual possession being "the state of immediate, hands-on physical possession." United States v. Zavala Maldonado, 23 F.3d 4, 6 (1st Cir.1994). Cuevas had deposited one of Vega Alta's checks into his bank account and had cashed the other; it was solely because of the mayor's actions that he relinquished control over that money.
To convict Cruzado of this offense, the government had to prove four elements beyond a reasonable doubt: (1) that Cruzado knowingly conducted a "financial transaction," (2) that he knew the transaction involved funds that were the proceeds of some form of unlawful activity, (3) that the funds involved were in fact the proceeds of a "specified unlawful activity," and (4) that Cruzado engaged in the financial transaction knowing that it was designed in whole or in part to conceal or disguise the nature, location, source, ownership, or control of the proceeds of such unlawful activity. See 18 U.S.C. § 1956(a)(1)(B)(i); United States v. Cornier-Ortiz, 361 F.3d 29, 37 (1st Cir.2004); United States v. Martinez-Medina, 279 F.3d 105, 115 (1st Cir.2002). A conviction requires evidence of intent to disguise or conceal the transaction, whether from direct evidence, like the defendant's own statements, or from circumstantial evidence, like the use of a third party to disguise the true owner, or unusual secrecy. See United States v. Castro-Lara, 970 F.2d 976, 981 (1st Cir.1992) ("[C]ircumstantial evidence, in and of itself, is often enough to ground a conviction."); see also Bourjaily v. United States, 483 U.S. 171, 179-80, 107 S.Ct. 2775, 97 L.Ed.2d 144 (1987) ("[I]ndividual pieces of evidence, insufficient in themselves to prove a point, may in cumulation prove it.").
To convict Cruzado on this count, the government had to prove three elements beyond a reasonable doubt: (i) that Cruzado was "an agent of an organization, or of a State, local, or Indian tribal government, or any agency thereof;" (ii) that Cruzado embezzled, stole, obtained by fraud, or converted or intentionally misapplied property " valued at $5,000 or more" from "such organization, government, or agency;" and (iii) that such "organization, government, or agency receives, in any one year period [federal funds] in excess of $10,000." 18 U.S.C. § 666(a) and (b). Theft can be committed in a variety of ways under § 666. "The first four prohibitions cover any possibility of taking money for one's own use or benefit. Intentional misapplication, in order to avoid redundancy, must mean intentional misapplication for otherwise legitimate purposes; if it were for illegitimate purposes, it would be covered by the prohibitions against embezzlement, stealing, obtaining by fraud, or conversion." United States v. Urlacher, 979 F.2d 935, 938 (2d Cir.1992) (quoted in United States v. Cornier-Ortiz, 361 F.3d 29, 36-37 (1st Cir.2004)). The total value of funds stolen can be aggregated to satisfy the $5,000 minimum that triggers criminal liability under § 666. United States v. Sanderson, 966 F.2d 184, 189 (6th Cir.1992).
Cruzado concedes on appeal that he was an agent of a local government &#x2014; namely, the mayor of Vega Alta &#x2014; which received $10,000 or more in federal funds within a one-year period. He maintains, however, that the government failed to present sufficient evidence to allow a reasonable jury to conclude that he embezzled or stole more than $5,000 from Vega Alta. Without explanation, Cruzado limits his possible wrongdoing to two transactions: (1) Centro Cultural's $4,165 check to Onaden, which Cruzado wrote while in New York at the Puerto Rico Day Parade; and (2) the $1,756 check made out to "cash," which he obtained from Ebanisteria Familia's owner, Colón, and which represented an overpayment from Vega Alta for work that Colón had not done.
a. Extortion of Sidney Travel (Count 4)
To convict Cruzado on this count, the government had to prove beyond a reasonable doubt that he: (i) knowingly (ii) used intimidation, threatened, corruptly persuaded another person, or attempted to do so, or engaged in misleading conduct toward another person (iii) with intent to influence testimony (iv) in an official proceeding. 18 U.S.C. § 1512(b)(1). Trying to persuade a witness to give false testimony counts as "corruptly persuading" under § 1512(b). United States v. Khatami, 280 F.3d 907, 912-13 (9th Cir.2002) (citing cases). However, "it is an affirmative defense, as to which the defendant has the burden of proof by a preponderance of the evidence, that the conduct consisted solely of lawful conduct and that the defendant's sole intention was to encourage, induce, or cause the other person to testify truthfully." 18 U.S.C. § 1512(e) (2005) (formerly subsection (d)).
Cruzado's argument is simple: all he did was urge witnesses to tell the truth, which is not a crime. According to the witnesses, Cruzado did ask that they tell the truth; however, his version of "the truth" that he urged upon them was anything but the truth. To Cuevas, Cruzado described the $4,000 as repayment of a loan extended to Cuevas before he became mayor. At first, Cuevas maintained that story in front of the FBI. He then changed his tune, admitting that the money was skimmed from the inflated bid he submitted to Vega Alta and the double payment he received in return. As for the doctors, the jury was entitled to reject Cruzado's characterization of the $5,000 payment as a political contribution, and instead find that the doctors' need for the mayor's good graces induced them to hand over the money. Even with respect to Dr. Rivera's testimony &#x2014; that he believed the money was for the air conditioner, as evidenced by the invoice he received (on Onaden letterhead) &#x2014; the jury could have found that Cruzado was trying to persuade a witness to testify to something other than his true beliefs. Finally, the jury could have found that Cruzado's repeated calls to Marrero and his continued interest in Marrero's business affairs, which culminated in Marrero's hiring a lawyer to send a cease-and-desist letter, constituted tampering.
As a threshold matter, a sentencing court must first decide which edition of the sentencing guidelines to use. A defendant should be sentenced according to the guidelines in effect on the date of sentencing, unless "the court determines that use of the Guidelines Manual in effect on the date that the defendant is sentenced would violate the ex post facto clause of the United States Constitution," in which case "the court shall use the Guidelines Manual in effect on the date that the offense of conviction was committed." USSG § 1B1.11(b)(1).10 Cruzado was sentenced on November 8, 2002, seven days after the November 1 effective date of the 2002 guidelines. Nevertheless, the PSR used a two-year-old edition of the guidelines, its only explanation being the flat assertion that the "2000 edition... has been used in this case to comply with the provisions of Guidelines § 1B1.11(b)(1)." The district court followed the PSR's lead and sentenced Cruzado under the 2000 edition of the guidelines.
The PSR and the district court made a mistake, however, because Cruzado's last offense of conviction occurred on December 10, 2001, thereby making the 2001 guidelines &#x2014; not 2000 &#x2014; the relevant comparison with the 2002 guidelines for ex post facto purposes. Even in a complex case like this one, involving conduct that occurred on dates implicating different versions of the manual, "it will not be necessary to compare more than two manuals to determine the applicable guideline range &#x2014; the manual in effect at the time the last offense of conviction was completed and the manual in effect at the time of sentencing." Id. § 1B1.11, cmt. background (emphasis added).
Count 11 charged Cruzado with, among other things, unlawful conduct on December 10, 2001 &#x2014; tampering with the owner of Premier Electrical. Cruzado was convicted of that offense. December 10, 2001, was more than a month after the effective date of the guidelines' 2001 edition. Therefore, the comparison for ex post facto purposes is between the 2002 edition and the 2001 edition. As it turns out, the relevant sentencing guidelines did not change between those two years. Therefore, Cruzado is right that he should have been sentenced under the 2002 guidelines, and the court, misled by the PSR, plainly erred in applying the 2000 guidelines.
First, between the 2000 and 2002 editions, the sentencing commission introduced a major change in the way that sentences for money laundering are calculated. The 2000 guidelines simply gave a fixed number as the base offense level for money laundering. The 2002 guidelines take a more complicated approach by incorporating the offense level of the underlying offense.11 Sentencing under that new regime might involve factual disputes or legal issues which the district court has not yet had an opportunity to address. If we were to explore this uncharted territory ourselves, we, in effect, would be doing the sentencing rather than the district court. That is not an appropriate allocation of functions. See Koon v. United States, 518 U.S. 81, 98, 116 S.Ct. 2035, 135 L.Ed.2d 392 (1996) ("District courts have an institutional advantage over appellate courts" in some sentencing matters.); United States v. Rivera, 994 F.2d 942, 950 (1st Cir.1993) (Breyer, C.J.) (referring to district courts'"institutional strength" as being able to "best understand the relation of the Guidelines to case-specific, detailed facts").
Second, after United States v. Booker, 543 U.S. ___, 125 S.Ct. 738, 160 L.Ed.2d 621 (2005), the sentencing guidelines are now advisory rather than mandatory. See also United States v. Antonakopoulos, 399 F.3d 68 (1st Cir.2005). That legal development injects even more uncertainty into an attempt by us to reconstruct a sentencing decision by the district court under the 2002 guidelines. Therefore, we conclude that the most prudent course is to vacate the sentence and remand for resentencing under the correct edition of the guidelines.
&amp; Theft              Extortion              Laundering12               Tampering
Count 1: 18 U.S.C.           Between Mar. 2001 &amp;
&sect; 666(a)(1)(A)(i)            Jan. 25, 2002: stole
and (a)(1)(A)(ii)            more than $5,000 from
Count 2: id. &sect; 1951(a)                                 April 5, 2001:
Count 3: id. 1956(a)(1)(B)(i)                                              April 6, 2001:
and (a)(1)(B)(ii)                                                       cashed one $2,000
check, deposited
Count 4: id. &sect; 1951(a)                                 May 25 &amp;
$13,991.54 in
refunds from
Count 5: id. &sect; 1956(a)(1)(B)(i)                                           May 30, 2001:
and (a)(1)(B)(ii)                                                                 deposited $5,816.74
check from Sidney
Count 6: id. &sect; 1951(a)                               May 25 &amp;
Count 7: id. &sect; 1956(a)(1)(B)(i)                                            July 3, 2001:
and (a)(1)(B)(ii)                                                    deposited $4,165
check from Centro
Count 8: id. &sect; 1956(a)(1)(B)(i)                                            July 9, 2001:
and (a)(1)(B)(ii)                                                    deposited $8,174.80
Count 9: id. &sect; 1956(a)(1)(B)(i)                                            July 11, 2001:
and (a)(1)(B)(ii)                                                     deposited $5,000
check from Vega
Count 10 (later dismissed): id.                                            Sept. 25, 2001:
&sect; 1956(a)(1)(B)(i)                                                   deposited $3,788.51
and (a)(1)(B)(ii)                                                    check from Centro
Cultural to "Cash"
in "El Cajero
Expresso" account
Count 11: id. &sect; 1512(b)(1) and                                                                        Between Aug.
(b)(2)                                                                                       2001 &amp; Dec.
2001, tampered
Cristaler&iacute;a,
&amp; Premier
(found not
guilty of tampering
&amp; Mundo
Count 12 (not guilty): id.                             June &amp; July
&sect; 1951(a)                                       3, 2001:
Count 13: id. &sect; 1951(a)                                Between
Count 14: id. &sect; 1951(a)                                Sept. &amp; Oct.
1 Puerto Rican law defines a CDT as "an independent facility or one operated in conjunction with a hospital which provides community services for the diagnosis and treatment of ambulatory patients under the professional supervision of persons licensed to practice medicine, surgery or dentistry in Puerto Rico." 24 P.R. Laws Ann. § 331a(A)(4)
2 The record does not disclose if the emergency room eventually got an air conditioner
3 We note that the CDT had already received one invoice from Martínez Air Conditioning. Apparently, the CDT had also received an invoice from the municipality for the same air conditioner. According to Dr. González, however, the municipality bore the ultimate responsibility for maintaining the CDT's physical facilities. Given the various invoices flying back and forth, the precise division of financial obligations between the CDT and the municipality for the cost of the air conditioner is unclear
4 For contracts worth more than $40,000, prospective contractors had to satisfy more formal bidding requirements imposed by Vega Alta. It appears that the price for the total project was already over $40,000, having been divided, somewhat artificially, into one bid for the sidewalks and curbs &#x2014; $39,500 &#x2014; and another bid for the drainage
5 The government told us at oral argument that the district court had not made any findings as to loss amounts. It apparently overlooked the district court's restitution order
6 Fed.R.Crim.P. 29(a) provides in part: "After the government closes its evidence or after the close of all the evidence, the court on the defendant's motion must enter a judgment of acquittal of any offense for which the evidence is insufficient to sustain a conviction."
7 Although Cruzado failed to move the court for judgment of acquittal on count 12, the jury ultimately acquitted him of that charge
8 In 1946, Congress passed the Hobbs Act to amend the 1934 Anti-Racketeering ActSee Act of July 3, 1946, ch. 537, § 1(c), 60 Stat. 420. Rep. Hobbs introduced the bill that became law.
9 Cruzado erroneously contends that the jury found him guilty of tampering with Lilia Alonso Alvarez (Sidney Travel's owner) in a telephone call on August 4, 2001; Milton Martínez Arroyo (owner of Martínez Air Conditioning) in late 2000 or early 2001; and Luis A. Vargas López (owner of Mundo Construction, Inc.) in a telephone call on December 9, 2001. The jury found him not guilty as to those incidents
10 The Constitutional prohibition against ex post facto laws, U.S. Const., art. I, § 9, cl. 3, requires that a defendant be sentenced under the guidelines in effect when he committed the offense, rather than those in effect at time of sentencing, where subsequent amendments would have increased his punishmentSee United States v. Colón-Muñoz, 318 F.3d 348, 361 (1st Cir.2003).
11 The laundering guideline says to use the "offense level for the underlying offense from which the laundered funds were derived, if (A) the defendant committed the underlying offense...; and (B) the offense level for that offense can be determined." USSG § 2S1.1(a)(1). Both conditions are true for Cruzado
12 Except where noted (i.e., count 10), all deposits were checks made payable to Onaden, Inc., and deposited into Cruzado's "Oficina Dental Las Colinas, Inc." account at Banco Popular, Vega Alta branch