Court Opinion

ID: 9950978
Source: CourtListenerOpinion
Date Created: 2024-03-15 15:01:18.083924+00
Date Added: 2024-06-11T14:35:40.937605
License: Public Domain

22-2090
United States v. Jimenez
                               In the
          United States Court of Appeals
                     For the Second Circuit
                               ________

                           AUGUST TERM 2023

                     ARGUED: SEPTEMBER 21, 2023
                      DECIDED: MARCH 15, 2024

                              No. 22-2090

                     UNITED STATES OF AMERICA,
                              Appellee,

                                  v.

              ARIEL JIMENEZ, AKA SEALED DEFENDANT
                        Defendant-Appellant,

                                  v.

  IRELINE NUNEZ, ANA YESSENIA JIMENEZ, EVELIN JIMENEZ, LEYVI
 CASTILLO, CINTHIA FEDERO, GUILLERMO ARIAS MONCION, MARCOS
  DE JESUS PANTALEON, AKA JUNIOR, JOSE CASTILLO, AKA JAIRO,
                          Defendants.
                           ________

            Appeal from the United States District Court
              for the Southern District of New York.
                             ________

Before: WALKER, CHIN, AND NATHAN, Circuit Judges.
                           ________
                                                           No. 22-2090

      Defendant-Appellant Ariel Jimenez was convicted following a
jury trial of conspiracy to defraud the United States with respect to
tax-return claims, conspiracy to commit wire fraud, aggravated
identity theft, and money laundering. On appeal, Jimenez argues that
(1) the district court’s jury instruction regarding withdrawal from a
conspiracy was erroneous, and (2) the evidence supporting his
conspiracy convictions was insufficient. For the reasons explained
below, we AFFIRM the judgment of conviction.

                                 ________

                  CRAIG A. WENNER (John T. Zach, on the brief), Boies
                  Schiller Flexner LLP, New York, NY, for Defendant-
                  Appellant Ariel Jimenez.

                  DANIEL G. NESSIM (Ni Qian, Olga I. Zverovich, on
                  the brief), Assistant United States Attorneys, for
                  Damian Williams, United States Attorney for the
                  Southern District of New York, New York, NY, for
                  Appellee the United States of America.
                                 ________

JOHN M. WALKER, JR., Circuit Judge:

      Defendant-Appellant Ariel Jimenez was convicted following a
jury trial of conspiracy to defraud the United States with respect to
tax-return claims, conspiracy to commit wire fraud, aggravated
identity theft, and money laundering. On appeal, Jimenez argues that
(1) the district court’s jury instruction regarding withdrawal from a
conspiracy was erroneous, and (2) the evidence supporting his
conspiracy convictions was insufficient. For the reasons explained
below, we AFFIRM the judgment of conviction.

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                                                             No. 22-2090

                            BACKGROUND

      Defendant-Appellant Ariel Jimenez owned and operated a tax
preparation business in the Bronx, which assisted individuals with
filing tax returns.   The evidence at trial, taken in the light most
favorable to the government (as we must do on this appeal), revealed
that between 2009 and 2015, Jimenez spearheaded a large-scale tax
fraud and identity theft scheme.        Jimenez and his employees
purchased stolen identities of children and sold them to clients, who
claimed the children as false dependents on their tax returns to
receive valuable tax benefits. Through this scheme, Jimenez obtained
millions of dollars, some of which he laundered by structuring bank
deposits, investing in real estate properties, and then transferring the
properties to his parents and limited liability companies.

      On September 9, 2021, the government filed a superseding
indictment charging Jimenez with conspiracy to defraud the United
States by obtaining the payment of a false claim, in violation of 18
U.S.C. § 286 (Count One); conspiracy to commit wire fraud, in
violation of 18 U.S.C. § 1349 (Count Two); aggravated identity theft,
in violation of 18 U.S.C. § 1028A(a)(1)&(b) and (2) (Count Three); and
money laundering, in violation of 18 U.S.C. § 1956(a)(1)(B)(i) and (2)
(Count Four). For purposes of the statute of limitations, Counts One
through Three related back to the original indictment, which was filed
on December 12, 2018.

      At trial for the charges contained in the superseding
indictment, the government presented testimonial evidence from two
cooperating witnesses who participated in the conspiracy: Ireline
Nunez, Jimenez’s ex-wife and former manager of his tax business,
and Elvy Jimenez, an employee who worked for Jimenez between

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                                                                  No. 22-2090

2009 and 2013 before leaving to start a competing tax preparation
business, which also engaged in tax fraud and identity theft. 1 Clients
who paid for false dependents also testified at trial, as did several
victims of the identity theft.         The government offered various
documentary evidence that corroborated the testimony, including
lists of stolen identities used by Jimenez and his employees,
fraudulent tax returns they filed, inculpatory letters written by
Jimenez, and records showing how Jimenez spent and laundered
proceeds.

       At the conclusion of the government’s case, the defense moved
for a judgment of acquittal pursuant to Rule 29 of the Federal Rules
of Criminal Procedure, arguing that the applicable five-year statute of
limitations required acquittal because Jimenez withdrew from the
conspiracy more than five years before the original indictment was
filed. The district court denied the Rule 29 motion subject to renewal
after the jury’s verdict. The defense did not call any witnesses. In its
closing statement to the jury, the defense again argued, among other
things, that Jimenez withdrew from the conspiracy before the statute
of limitations began to run.

       In advance of the charge conference, Jimenez requested that the
district court instruct the jury on the defense of withdrawal from a
conspiracy, and the parties then litigated the language of the
instruction.    The government requested an instruction that to
effectively withdraw from a conspiracy, “the defendant must not take
any subsequent acts to promote the conspiracy or receive any
additional benefits from the conspiracy.” Supp. App’x 294 (citing

1Elvy Jimenez has no familial relation to Defendant-Appellant Ariel Jimenez.
Herein, we refer to Ariel Jimenez as either “Ariel Jimenez” or “Jimenez.” We
refer to Elvy Jimenez exclusively as “Elvy Jimenez.”

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                                                          No. 22-2090

United States v. Eppolito, 543 F.3d 25, 49 (2d Cir. 2008)). The defense
requested that the district court replace the word “or” with “and,” see
id. at 294–99, arguing that a showing of both continued acts in
furtherance of the conspiracy and continued benefits from the
conspiracy was necessary to render a defendant’s withdrawal
ineffective. App’x 118–19. The district court disagreed with the
defense and settled on the following formulation, which it instructed
to the jury: “[A defendant] must not take any subsequent steps to
promote the conspiracy, nor receive additional benefits from the
conspiracy in order to effectively withdraw from the conspiracy.”
Supp. App’x 356.

      In February 2022, the jury found Jimenez guilty on all counts.
Jimenez subsequently moved for a judgment of acquittal or for a new
trial under Rules 29 and 33 of the Federal Rules of Criminal
Procedure. Jimenez argued there was insufficient evidence (a) that he
continued to participate in the conspiracy after his claimed
withdrawal, (b) that he committed aggravated identity theft during
the limitations period, and (c) that he laundered money at any time.
The district court denied Jimenez’s post-trial motions, determining
that there was sufficient evidence to sustain his conviction on all
counts.

      In September 2022, the district court sentenced Jimenez to 144
months’ imprisonment and three years’ supervised release.          The
district court further ordered Jimenez to forfeit over $14 million and
his interest in three properties, and to pay over $44 million in
restitution and $400 as a mandatory special assessment. This appeal
followed.

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                                                            No. 22-2090

                             DISCUSSION

      On appeal, Jimenez argues that (1) the district court’s jury
instruction on withdrawal from a conspiracy was erroneous, and that
(2) the district court erred in denying his Rule 29 motion for acquittal
because the evidence supporting his conspiracy convictions was
insufficient.   For the reasons set forth below, we reject both
arguments.

I.    Jury Instruction

      Jimenez challenges the district court’s jury instruction that to
effectively withdraw from a conspiracy, “[a defendant] must not take
any subsequent steps to promote the conspiracy, nor receive
additional benefits from the conspiracy.” Supp. App’x 356. On
appeal, he argues that the district court erred in using the word “nor”
instead of “and,” which the defense had requested at trial, because
the resulting instruction misstated the law on withdrawal from a
conspiracy.

      We review preserved challenges to jury instructions de novo,
but “will reverse only if all of the instructions, taken as a whole,
caused a defendant prejudice.” United States v. Applins, 637 F.3d 59,
72 (2d Cir. 2011) (quoting United States v. Bok, 156 F.3d 157, 160 (2d
Cir. 1998)). “A ‘jury instruction is erroneous if it misleads the jury as
to the correct legal standard or does not adequately inform the jury
on the law.’” Id. (quoting Bok, 156 F.3d at 160). “The defendant bears
the burden of showing that [his] requested instruction accurately
represented the law in every respect and that, viewing as a whole the
charge actually given, he was prejudiced.” Id. (quoting United States
v. Nektalov, 461 F.3d 309, 313–14 (2d Cir. 2006) (alteration
incorporated)).

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                                                           No. 22-2090

      “Conspiracy is generally a continuing crime . . . not complete
until the purposes of the conspiracy have been accomplished or
abandoned.” United States v. Eppolito, 543 F.3d 25, 47 (2d Cir. 2008)
(internal quotation marks and citations omitted). If the government
establishes that a conspiracy continued into the statute of limitations
period, which for a conspiracy charge is five years, see 18 U.S.C.
§ 3282(a), a defendant can assert as an affirmative defense to the
charge that he withdrew from the conspiracy before the start of the
limitations period. See Eppolito, 543 F.3d at 48–49.

      In United States v. Berger, we held that “resignation from a
criminal enterprise, standing alone, does not constitute withdrawal as
a matter of law; more is required. Specifically, the defendant must
not take any subsequent acts to promote the conspiracy . . . and must
not receive any additional benefits from the conspiracy.” 224 F.3d
107, 118 (2d Cir. 2000) (citations omitted). In Eppolito, we reaffirmed
that “‘the defendant must not take any subsequent acts to promote
the conspiracy’ or ‘receive any additional benefits from the
conspiracy.’” 543 F.3d at 49 (quoting Berger, 224 F.3d at 118).

      Jimenez fails to meet his burden of establishing error because
the district court’s jury instruction regarding withdrawal from a
conspiracy was a correct statement of the law. Despite its slightly
different phrasing, the district court’s instruction—that to effectively
withdraw from a conspiracy, a defendant “must not take any
subsequent steps to promote the conspiracy, nor receive additional
benefits from the conspiracy,” Supp. App’x 356—is equivalent in
meaning to the rule stated in Berger and Eppolito.

      Jimenez argues that the district court should have used “and”
instead of “nor” in its jury instruction because Berger sets forth a

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                                                           No. 22-2090

conjunctive standard for defeating a defendant’s withdrawal defense.
In Jimenez’s view, a defendant’s withdrawal is ineffective only if the
defendant both “‘continues to do acts in furtherance of the
conspiracy’ AND ‘continues to receive benefits from the conspiracy’s
operations.’” App’x 118–19. However, the Berger standard is in the
disjunctive: a showing of either action is sufficient to defeat a
defendant’s alleged withdrawal. This conclusion follows from the
language of Berger. If a defendant “must not take any subsequent acts
to promote the conspiracy . . . and must not receive any additional
benefits from the conspiracy” to effectively withdraw from it, see
Berger, 224 F.3d at 118 (emphasis added), then a defendant who
carries out either action has not effectively withdrawn. Stated simply,
effective withdrawal requires both actions. The facts of Berger also
confirm this standard. In that case, we considered whether, assuming
that the defendant had resigned from a conspiracy, he had
nonetheless failed to fully withdraw from it.         In rejecting the
defendant’s withdrawal defense, we noted only that his post-
resignation lies to law enforcement agents about the conspiracy
helped to conceal it from investigators, without mentioning whether
he continued to receive additional benefits from the conspiracy after
his resignation. See Berger, 224 F.3d at 119.

      Jimenez further contends that Berger, Eppolito, and the district
court in this case all stated the law on withdrawal differently because
the conjunctions “and,” “or,” and “nor” convey different meanings.
This argument also misses the mark. In the context of conspiracy
withdrawal, stating that a defendant must not promote the
conspiracy “and” must not benefit from it, see Berger, 224 F.3d at 118,
is the same as stating that a defendant must not promote the
conspiracy “nor” benefit from it, as the district court here instructed,

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                                                                         No. 22-2090

see Supp. App’x 356. This principle is known as one of De Morgan’s
Laws, which explain as a matter of propositional logic that “not X and
not Y” is equivalent to “not (X or Y).” See, e.g., Schane v. Int’l Bhd. of
Teamsters Union Loc. No. 710 Pension Fund Pension Plan, 760 F.3d 585,
589 (7th Cir. 2014); DaVita Inc. v. Va. Mason Mem’l Hosp., 981 F.3d 679,
690 (9th Cir. 2020). This principle applies here. While Berger used the
word “and,” Eppolito used the word “or,” and the district court here
used the word “nor,” all three formulations plainly convey the same
rule: that withdrawal from a conspiracy is ineffective if a defendant
either continues to promote the conspiracy or continues to benefit
from it. That rule makes sense: if a defendant continues to promote a
conspiracy or if he continues to benefit from it, he has not genuinely
withdrawn.

          In sum, the district court accurately stated the law when it
instructed the jury that “[a defendant] must not take any subsequent
steps to promote the conspiracy, nor receive additional benefits from
the conspiracy in order to effectively withdraw from the conspiracy.”
Supp. App’x 356. Therefore, we reject Jimenez’s argument that the
district court’s jury instruction on withdrawal from a conspiracy was
erroneous.

II.       Sufficiency of the Evidence

          Apart from his challenge to the jury instruction, Jimenez
challenges the evidence supporting his conspiracy convictions on two
grounds: that the evidence was insufficient to establish the elements
of conspiracy, and that the evidence showed he ceased to participate
in the conspiracy more than five years before the initial indictment. 2

2   In a footnote, Jimenez argues that if we accept his claim that insufficient evidence

                                            9
                                                                    No. 22-2090

       We review preserved challenges to the sufficiency of the
evidence de novo and unpreserved challenges for plain error. See
United States v. Vernace, 811 F.3d 609, 615 (2d Cir. 2016) (preserved
challenge); United States v. Draper, 553 F.3d 174, 179 (2d Cir. 2009)
(unpreserved challenge). In assessing the sufficiency of the evidence,
we “view the evidence in the light most favorable to the government,
crediting every inference that could have been drawn in the
government’s favor, and deferring to the jury’s assessment of witness
credibility and its assessment of the weight of the evidence.” United
States v. Babilonia, 854 F.3d 163, 174 (2d Cir. 2017) (quoting United
States v. Rosemond, 841 F.3d 95, 113 (2d Cir. 2016)). “We must affirm
if ‘any rational trier of fact could have found the essential elements of
the crime beyond a reasonable doubt.’” Id. (quoting Rosemond, 841
F.3d at 113).

       A.       Evidence of the Conspiracy

       Jimenez first argues that the government’s evidence was
insufficient to establish the elements of conspiracy because it failed to
show an agreement between him and his employees to defraud the
United States or commit wire fraud.               Because Jimenez did not
challenge the sufficiency of the evidence on this basis in the district
court, the claim is reviewable only for plain error. Here, we find no
error, much less plain error.

       “To prove conspiracy, the government must show that two or
more persons entered into a joint enterprise for an unlawful purpose,

established his involvement in the conspiracy, then we “should necessarily acquit
[him] of the money laundering charges as well, since it was the purportedly illicit
proceeds of the conspiracy that [he] was accused of laundering.” Def. Br. 43 n.1.
We need not reach this argument because, as explained below, we reject his
challenges to the sufficiency of the evidence.

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                                                              No. 22-2090

with awareness of its general nature and extent,” and that those
persons “agreed to participate in what [they] knew to be a collective
venture directed toward a common goal.” United States v. Khalupsky,
5 F.4th 279, 288 (2d Cir. 2021) (internal quotation marks and citations
omitted). But the government need not prove “that the defendant
knew all of the details of the conspiracy” or “the identities of all of the
other conspirators.”     Id. (internal quotation marks and citation
omitted).

      Viewing the evidence presented at trial in the light most
favorable to the government, a rational trier of fact could have easily
found beyond a reasonable doubt that Jimenez conspired to commit
fraud. The government introduced copious evidence that Jimenez
agreed to participate in and indeed led the charged conspiracy. To
begin, Jimenez’s ex-wife Ireline Nunez and his ex-employee Elvy
Jimenez both gave accounts of Jimenez’s role as the leader and
organizer of the tax fraud and identity theft scheme. For example,
Nunez testified that Jimenez asked her to join the scheme and
instructed her how to add false dependents to tax returns, and that
Jimenez was responsible for purchasing the lists of stolen identities
that the business used to generate false dependents. Elvy Jimenez
testified that Jimenez was the boss and leader of the business, that
Jimenez and his employees prepared tax returns with false
dependents, and that Jimenez received most of the profit from the
illegal scheme.    One of the clients who served as a government
witness, Brigido Abreu, also spoke to his personal interactions with
Jimenez. Abreu testified that he paid Jimenez to prepare his 2011 and
2012 tax returns with false dependents. These first-hand accounts
were corroborated by documentary evidence, such as sign-in sheets
indicating that Jimenez met with clients, a list in Jimenez’s

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                                                             No. 22-2090

handwriting recording the number of false dependents purchased by
various clients, and financial records showing that Jimenez signed
checks to the business’s supplier of stolen identities.

      Jimenez argues that the majority of the government’s
witnesses—for example, the victims of identity theft and several law
enforcement officers whom the government called to summarize
records and present calculations—did not have first-hand knowledge
of Jimenez entering into any agreement with co-conspirators to
commit tax fraud.      Jimenez acknowledges, however, that other
evidence did directly implicate him in the conspiracy—for example,
the testimony of Ireline Nunez, Elvy Jimenez, and Brigido Abreu—
but he argues that this evidence “was discredited and should not be
given substantial weight.”      Def. Br. 55.     In particular, Jimenez
contends that these witnesses had motives to lie or exaggerate and
that they each gave testimony that was contradicted by other
evidence at trial.

      But Jimenez made these arguments to the jury, which rejected
them in reaching a guilty verdict. We must “defer to the jury’s
determination of the weight of the evidence and the credibility of the
witnesses, and to the jury’s choice of the competing inferences that
can be drawn from the evidence.” United States v. Landesman, 17 F.4th
298, 320 (2d Cir. 2021) (quoting United States v. Klein, 913 F.3d 73, 78
(2d Cir. 2019)). Moreover, “[t]his high degree of deference we afford
to a jury verdict is especially important when reviewing a conviction
of conspiracy . . . because a conspiracy by its very nature is a secretive
operation, and it is a rare case where all aspects of a conspiracy can
be laid bare in court with the precision of a surgeon’s scalpel.” Id.
(internal quotation marks and citations omitted).

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                                                           No. 22-2090

      In sum, because the government introduced substantial
evidence that Jimenez engineered the charged conspiracy and
directed his employees to participate in it, we reject his argument that
the evidence was insufficient to establish an agreement to defraud the
United States or commit wire fraud.

      B.     Withdrawal from the Conspiracy

      Jimenez additionally contends that the district court erred in
denying his Rule 29 motion because the evidence established that he
ceased to participate in the conspiracy more than five years before his
initial indictment, which in turn renders the government’s evidence
of conspiracy insufficient. This second challenge to the sufficiency of
the evidence, which we review de novo because Jimenez raised it in
the district court, fares no better than the first.

      “[W]ithdrawal from a conspiracy is an affirmative defense
which the defendant must prove by a preponderance of the
evidence.” United States v. Hamilton, 538 F.3d 162, 173 (2d Cir. 2008).
As described above, to effectively withdraw from a conspiracy, “the
defendant must not take any subsequent acts to promote the
conspiracy . . . and must not receive any additional benefits from the
conspiracy.” Berger, 224 F.3d at 118 (citations omitted). Here, the
initial indictment charging Jimenez with two counts of conspiracy
was filed on December 12, 2018. Therefore, to succeed on his statute
of limitations defense, Jimenez had the burden of proving that he
withdrew from the conspiracy prior to December 12, 2013.

      Jimenez argues that he met his burden of proving withdrawal
based on testimony given by Elvy Jimenez at trial. According to Elvy,
“around the summer of 2012,” Jimenez ordered his two sisters to burn
the lists of stolen identities. Supp. App’x 101. Then, at the beginning

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                                                           No. 22-2090

of the tax season in 2013, Jimenez told the employees of his tax
business not to work with the lists anymore.          Based on these
statements, the defense argued during and after trial that he should
be acquitted. The jury rejected the defense’s withdrawal argument in
reaching its verdict, as did the district court in denying Jimenez’s
post-trial motions. The district court reasoned that “there manifestly
was enough evidence presented at trial for a reasonable juror to find
Jimenez guilty beyond a reasonable doubt” because “[a]ny evidence
that Jimenez withdrew from the conspiracy is rebutted by evidence
that he did not, and there is strong evidence that he continued to
benefit from the conspiracy well into 2015.” Sp. App’x 4. Viewing
the evidence in the light most favorable to the government, we agree.

      As a threshold matter, the government presented sufficient
evidence that the tax fraud and identity theft scheme continued well
beyond 2012 and 2013, when Jimenez allegedly ordered the lists of
stolen identities to be burned and retired from use. For instance, Elvy
Jimenez testified that notwithstanding Jimenez’s statements in 2012
and 2013, “[n]othing changed,” and Jimenez’s tax business continued
using the lists to claim false dependents for their clients. Supp. App’x
101. The government also introduced evidence of fraudulent 2013 tax
returns prepared and filed by Jimenez’s tax business in 2014.
Moreover, the government presented evidence that Jimenez
personally continued to participate in the conspiracy after his claimed
withdrawal. To begin, Jimenez remained the owner and operator of
the tax business, where fraudulent tax returns continued to be filed.
And Ireline Nunez testified that in 2015, after the government
searched the business’s office, Jimenez left the country to live in the
Dominican Republic, where he continued to personally file clients’ tax
returns.   To be sure, the government’s evidence of Jimenez’s

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continued participation in the conspiracy was largely circumstantial;
however, “[b]oth the existence of a conspiracy and a given
defendant’s participation in it with the requisite knowledge and
criminal intent may be established through circumstantial evidence.”
United States v. Stewart, 485 F.3d 666, 671 (2d Cir. 2007).

      In any event, even if Jimenez had ceased participating in the
conspiracy by late 2013 (which was before the beginning of the
limitations period), as he claims, the government presented evidence
that Jimenez continued to “receive . . . additional benefits from the
conspiracy.” Berger, 224 F.3d at 118. For example, in 2014, Jimenez
opened new corporate bank accounts for his tax business, which
received hundreds of thousands of dollars in deposits, mostly
stemming from tax preparation fees.            According to Nunez’s
testimony, Jimenez’s business typically charged clients who
requested false dependents higher tax preparation fees than other
clients. The government also offered evidence that Jimenez continued
to use the proceeds from the tax business for his benefit, such as when
he withdrew $451,000 in April 2014 to purchase real estate. Based on
these records and various other evidence the government presented,
a reasonable juror could conclude that Jimenez continued using
proceeds from the tax fraud and identity theft scheme to his benefit,
and thus did not effectively withdraw from the conspiracy.

      Therefore, we reject Jimenez’s argument that the government’s
evidence of conspiracy is insufficient based on his alleged withdrawal
from the conspiracy.

                             CONCLUSION

      For the foregoing reasons, we AFFIRM the judgment of
conviction.

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