Opinion ID: 9514
Heading Depth: 2
Heading Rank: 2

Heading: Verdict contrary to the evidence

Text: Giraldi moved for a new trial arguing that the verdict on all counts was contrary to the great weight of the evidence. Giraldi advances no additional arguments in this ground of error but asks the Court to perform the sufficiency review under this additional standard and reverse in the interest of justice. For the reasons stated above, we conclude that a rational jury could have found all of the elements of the crimes beyond a reasonable doubt. Therefore, the district court did not abuse its discretion in denying Giraldi's motion for new trial. C. Government misconduct during closing argument The motion for mistrial also complained of government misconduct during closing argument. Throughout the trial, the government emphasized the false statement, contained in the Benet memo, that Benet referred Aguirre to the bank. The defense's theory was that the referral came indirectly from Benet, through his co-employee Laura Machuca. During the rebuttal portion of final argument the government attorney said: Let's go back to this memorandum. Let's talk about Laura Machuca.... They asked why Laura Machuca is not here. You know why? Because the government alleges that this whole thing is false. Did you see a letter of referral from anyone in this case? We showed you every document. There is no letter of referral here. Do you think that there was a—there is a Laura Machuca? Do you think if Laura Machuca had anything to do with this that there would have been a letter of referral in that file? You're doggone right because that would have helped in terms of covering up who Mr. Aguirre is. But you didn't see a letter of referral, that's because this isn't true either. According to Giraldi, the government's argument amounted to a claim that Laura Machuca had nothing to do with referring Aguirre to Giraldi and that Machuca did not even exist. Such a claim, if made, was false and misleading. The government had taken Laura Machuca's deposition. In that deposition, Machuca testified that Benet gave Giraldi's telephone number to Machuca, who in turn gave it to Aguirre in response to Aguirre's request for information about foreign investments. This deposition testimony was not admitted into evidence, and Machuca, a Mexican citizen, was not available under the court's subpoena power. The government responds that 1) the prosecutor was not challenging the existence of Machuca, but was instead challenging the existence of a letter of referral from Machuca; 2) the prosecutor was responding to defense counsel's argument, taking the position that Machuca did not do the things attributed to her by the defense and, if she did, the defense would have presented documentary evidence in the form of a letter of referral; and 3) if the comment is construed as challenging the existence of Machuca, it was a rhetorical question suggesting that she could not testify to the facts the defense implied she would, rebutting the defense insinuation that the government had withheld her exculpatory evidence. The prosecutor's comment clearly implies that Machuca did not exist. However, there was no danger that the jury was misled concerning her existence, given Benet's extensive testimony about her. The prosecutor's other point, that Machuca did not provide a letter of referral for Aguirre, is a sound inference from the evidence. Giraldi's argument is based on the fact that Machuca provided Aguirre with Giraldi's name, bank name and business number. The let ter of referral which the prosecutor pointed out was missing was a statement that Machuca personally knew that Aguirre's wealth was legitimate. There is no evidence that Machuca had any personal knowledge of the source of Aguirre's wealth. Given the context within which the comment was made, the district court's denial of Giraldi's motion for new trial was not an abuse of discretion. ADMISSION OF EVIDENCE CONCERNING EXTRINSIC MATTERS We review questions concerning the admissibility of evidence for abuse of discretion. United States v. Hays, 872 F.2d 582 (5th Cir.1989). The district court admitted evidence regarding Giraldi's banking relationship with Jose Chucho Castellanos. Giraldi managed Castellanos's deposits at BT, which grew in 1988-89 from $750,000 to $8 million. When Giraldi moved from BT to AEBI, Castellanos eventually transferred his account to AEBI. Giraldi's successor at BT became suspicious of Castellanos because he could be reached only with pagers and codes. In 1991, when BT asked Castellanos for identification, such as a valid passport or driver's license, he closed out the remainder of his BT account. At AEBI, Castellanos's and Aguirre's accounts were cross collateralized. Shortly after the execution of search warrants for records pertaining to Aguirre's accounts, Giraldi took steps to remove the link between the two depositors. Also, there was a document that stated that Castellanos had been referred by a former Citibank client. The government argued that statement implied that Benet provided the referral, which he did not. Giraldi argues that there was no evidence that 1) Castellanos was a drug dealer or that his wealth was illegitimate; or 2) that Castellanos had any connection to the alleged conspiracy to launder drug proceeds with Aguirre. He asks this Court to conclude that there was no rational connection between Castellanos and the charged offense, and that the evidence should not have been admitted. Giraldi relies on United States v. Hays, 872 F.2d 582 (5th Cir.1989), where this Court reversed a conviction based on the admission of irrelevant, highly prejudicial evidence. He also argues that improper admission of evidence may constitute a violation of due process under the Fifth Amendment, citing Hills v. Henderson, 529 F.2d 397 (5th Cir.), cert. denied, 429 U.S. 850, 97 S.Ct. 139, 50 L.Ed.2d 124 (1976). The similarities in the histories of the two depositors, their cross collateralized accounts and Giraldi's reaction to the search warrant all support the trial court's conclusion that the Castellanos's evidence was admissible as part of the conspiracy. Because it was neither irrelevant nor improper, Giraldi's arguments are without merit. JURY INSTRUCTIONS Giraldi contends that the district court erred in refusing his requested jury instructions concerning: a) good faith defense; b) misapplication means more than maladministration; c) violation of civil statute or regulation does not necessarily constitute criminal offense; and d) loan approval for debtor who transfers loan proceeds to third party. The standard of review on appeal from the denial of a requested jury instruction is whether the district court abused its discretion. United States v. Pennington, 20 F.3d 593, 600 (5th Cir.1994). This court must view the evidence in the light most favorable to Giraldi in determining if there is sufficient evidentiary foundation for a requested instruction. United States v. Lewis, 592 F.2d 1282, 1286 (5th Cir.1979). The dist rict court abuses its discretion in denying a requested instruction if: 1) the requested instruction is substantively correct; (2) the requested instruction is not substantially covered in the charge given to the jury; and (3) the omission of the instruction would seriously impair the defendant's ability to present his defense. United States v. Storm, 36 F.3d 1289, 1294 (5th Cir.1994), cert. denied, --- U.S. ----, 115 S.Ct. 1798, 131 L.Ed.2d 725 (1995). A. Good faith defense Giraldi's requested instruction stated that good faith is a complete defense, inconsistent with knowingly and willfully committing the offenses alleged in the indictment. The district court stated that its charge would incorporate in a general sense everything that both sides had requested and would make each count subject to the requirement that the term knowingly' and willfully' be proven. The charge given defined the term knowingly as the act was done voluntarily and intentionally and not by accident or mistake. The term willfully was defined as the act was committed voluntarily and intentionally, that you did it because you wanted to do it and with a specific intent to do something that the law forbids. Also, the jury was instructed that to convict on the bank fraud and misapplication counts they had to find that Giraldi acted with intent to injure or defraud. Giraldi cites a Tenth Circuit case which held that the refusal to give the requested good faith instruction is reversible error if the evidence supported such an instruction. United States v. Haddock, 956 F.2d 1534, 1547 (10th Cir.), cert. denied, 506 U.S. 828, 113 S.Ct. 88, 121 L.Ed.2d 50 (1992). Clear precedent in the Tenth Circuit holds that instructions that do no more than define willfulness and intent to injure or defraud do not adequately convey a good faith defense to the jury. Id. The Fifth Circuit has taken a different road on this issue. Here, a district court may refuse to submit an instruction regarding good faith if the defense of good faith is substantially covered by the charge given and the defendant has had the opportunity to argue good faith to the jury. United States v. Storm, 36 F.3d at 1294. The charge given here, (omitting specific good faith instruction, but detailing specific intent, and defining willfully and knowingly) was not an abuse of discretion under Fifth Circuit law. See United States v. Rochester, 898 F.2d 971, 978-979 (5th Cir.1990). B. Misapplication means more than maladministration Giraldi requested the following instruction in connection with the misapplication counts. Willful misapplication ... means more than maladministration. The acts with which [Giraldi is] accused ... are prohibited misapplications if made in bad faith, not in the honest exercise of official discretion. When actions are performed in good faith and without fraud, for the actual or supposed advantage of the bank, there is no criminal responsibility on the part of the bank officer, although the transaction may be injudicious and unsafe, and even though the transaction results is a loss or damage to the bank. The statute does not punish mere acts of maladministration or negligent use of bank funds. The district court denied this request. The jury was instructed that, in order to convict on the misapplication counts, it had to find that Giraldi knowingly misapplied funds belonging to the institution and that he acted with the intent to injure or defraud the bank. The following definitions were then given: To willfully misapply a bank's money or property means an intentional conversion of such money or property to one's own use and benefit, or for the use and benefit of another, knowing that one had no right to do so. To act with the intent to defraud means to act with the intent to deceive or cheat someone, ordinarily for the purpose of causing some finance [sic] loss to another or bringing about some financial gain to oneself. Giraldi presented evidence and argument that the errors on Giraldi's paperwork were the result of carelessness that did not satisfy the mens rea necessary for a misapplication conviction. In United States v. Southers, 583 F.2d 1302, 1306-1307 (5th Cir.1978) this Court found that it was not error for the district court to refuse a requested instruction that specified that maladministration and bad judgment were not crimes, where the court's instruction on intent was comprehensive and a correct statement of the law. Here, as in Southers, the jury could not have found Giraldi guilty on the basis of the instructions given merely because he committed unintentional or negligent acts of maladministration. We find no abuse of discretion in the district court's denial of Giraldi's requested misapplication instruction. C. Violation of civil statute or regulation does not necessarily constitute criminal offense The district court denied the following jury instruction requested by Giraldi: You have heard testimony that there is a civil banking regulation requiring financial institutions to retain a record of each extension of credit in excess of $10,000 which identifies the nature or purpose of the extension of credit. A violation of a civil statute or regulation is not a criminal offense. Such a violation would merely subject an institution or, in some cases, an individual, to civil penalties which is not the same thing as a crime. You must not consider any evidence concerning civil recording regulations in deciding if the defendant committed the acts charged in the indictment. The only reason that this evidence was admitted is for the purpose of determining, if it does aid your determination, whether or not the defendants had the intent and purpose of violating the law, as charged in the indictment. Before you may consider such evidence, you must first be convinced beyond a reasonable doubt from other evidence in the case that the defendant violated the law as charged in the indictment. If you are so convinced, then this evidence may be considered by you, if you believe it helpful, in determining whether or not the defendant had a motive or intent to commit the crimes alleged in the indictment. Giraldi complains that the government constantly introduced evidence and argument concerning violation of civil regulations, and the requested instruction was an attempt to dispel prejudice created thereby. He also claims that the instruction is a proper statement of the law, based on United States v. Cordell, 912 F.2d 769, 776 (5th Cir.1990). The government points out that Giraldi did not object to the evidence or argument of which he now complains. United States v. Christo, 614 F.2d 486, 492 (5th Cir.1980), forbids introducing evidence of civil banking statute violations solely for the purpose of proving criminal misapplication; however, it does not hold that such evidence can never be introduced in a misapplication case. United States v. Stefan, 784 F.2d 1093, 1098 (11th Cir.) (cited with approval in United States v. Saks, 964 F.2d 1514, 1523 (5th Cir.1992)), cert. denied, 479 U.S. 1009, 107 S.Ct. 650, 93 L.Ed.2d 706 (1986). References to banking regulations are appropriate in a criminal trial to explain the role of federal regulators, the rules by which the bank is governed, and the stakes in a bank fraud case. While obviously, each case depends upon its own facts, if the regulations are given too much emphasis, the trial may be impermissibly infected. Saks, 964 F.2d at 1523. The governm ent also contends that the portion of the requested instructions that states that the jury may not consider the evidence in determining whether the charged acts occurred is not a correct statem ent of the law. Even if the requested instructions were correct, the government contends that the court did not abuse its discretion in denying the request because the evidence was properly admitted and used at trial, and this was not a case where over-emphasis required corrective instruction. We find that the denial of this requested instruction was not an abuse of discretion. D. Loan approval for debtor who transfers loan proceeds to third party The district court refused Giraldi's requested jury instruction that, You are instructed that you must acquit [Giraldi] of violation of 12 U.S.C. § 630, if the person who signed the note knew that he was expected to pay it and was able to do so. Giraldi argues that the requested instruction is a correct statement of the law under United States v. Gens, 493 F.2d 216 (1st Cir.1974). In United States v. Parekh, 926 F.2d 402, 407 n. 8 (5th Cir.1991), this Court explained that Gens stood for the proposition that [a] debtor's financial ability to repay the note is thus necessary but not sufficient to render a loan legitimate. Although the debtor's knowledge and ability to repay the loan are relevant to the issue of the required intent, they are not dispositive of the issue. Therefore the requested instruction is not a correct statement of the law and the district court did not abuse its discretion by denying the request. CUMULATIVE EFFECT OF ERRORS Giraldi contends that the cumulative effect of the errors requires reversal of his convictions. He presents no new information or argument to support this ground of error. Seeing no error to cumulate, we reject this argument. GOVERNMENT'S CROSS APPEAL: SENTENCING GUIDELINES The Government contends that the district court misapplied the sentencing guidelines by giving Giraldi a 4-level reduction for his role in the offense. The standard of review for a reduction for role in the offense is the clearly erroneous standard. See United States v. Watson, 988 F.2d 544, 550 (5th Cir.1993). U.S.S.G. § 3B1.2 states that a defendant may receive a downward adjustment of four levels if he was a minimal participant in the criminal activity. Giraldi's Presentence Report (PSR) did not recommend that he was entitled to these four points and Giraldi objected. The district court awarded him the four points, saying, It shouldn't be, but I will give it to him ... and I will tell you why it shouldn't be. Simply because of the nature of his role, but I can see the scheme of things. That is all right. I will give you those four points. A downward adjustment under § 3B1.2 is appropriate where a defendant was substantially less culpable than the average participant. United States v. Gadison, 8 F.3d 186, 197 (5th Cir.1993). The government contends that the district court's statements on the record amount to an acknowledgment that there was no evidentiary basis under the guidelines for the downward adjustments and that therefore the district court did not correctly apply the guideline. Further, the government contends that the record does not support a finding that Giraldi was entitled to a downward adjustment because he played an integral role in the money laundering conspiracy. Giraldi reads the district court's comments as finding that there was a basis for the downward adjustment and argues that the record supports that finding. Given that there was no evidence that Giraldi and co-defendant Reategui benefitted financially from the scheme except in the sense that they enhanced their careers at the bank by bringing in a large client, while the other co-defendants laundered large quantities of money and then withdrew it for their personal use, minimal participant status is supported by the record. RELEASE PENDING APPEAL The Government contends that the district court erred in ordering Giraldi's release pending appeal without finding that he had demonstrated a substantial question of law or fact likely to result in reversal or a reduced sentence. The government's position is that the district court did not make the requisite finding and that there was no basis on which the court could have made such a finding. Giraldi responds that the district court did make the requisite finding, quoting from the record: THE COURT: I don't find that [Giraldi] is a flight risk. ATTORNEY: Referring to the next section. The statue [sic] specifically says the Court must also find there are no issues that could possibly result in reversal of the trial. THE COURT: I don't find so. The issues raised by Giraldi on appeal are not frivolous so as to call into question that finding.