United States v. Melendez-Gonzalez , 892 F.3d 9 ( 2018 )

United States Court of Appeals
For the First Circuit
No. 17-1084
UNITED STATES OF AMERICA,
Appellee,
v.
CARLOS MELÉNDEZ-GONZÁLEZ,
Defendant, Appellant.
No. 17-1113
UNITED STATES OF AMERICA,
Appellee,
v.
ENRIQUE COSTAS-TORRES,
Defendant, Appellant.
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Aida M. Delgado-Colón, U.S. District Judge]
Before
Torruella, Selya, and Lynch,
Circuit Judges.
Edgar L. Sánchez-Mercado and ESM Law Office on brief for
appellant Carlos Meléndez-González.
Allan A. Rivera-Fernández, with whom Luis Rafael Rivera-
Rodríguez and Luis Rafael Rivera Rodríguez Law Offices were on
brief, for appellant Enrique Costas-Torres.
Steven L. Lane, Appellate Counsel, National Security
Division, U.S. Department of Justice, with whom Rosa E. Rodríguez-
Vélez, United States Attorney, was on brief, for appellee.
June 4, 2018
LYNCH, Circuit Judge. This case involves convictions in
December 2016 for fraudulent recruitment practices from March 2006
through June 2008 by members of the U.S. Army National Guard in
Puerto Rico. Defendant National Guard officers Carlos Meléndez-
González and Enrique Costas-Torres carried out a scheme to procure
recruitment bonuses to which they were not entitled. They were
convicted after a jury trial of wire fraud, embezzlement of public
money, and conspiracy. Their appeals from their convictions raise
multiple issues, including tolling under the Wartime Suspension of
Limitations Act, 18 U.S.C. § 3287; rulings by the district court
as to dress in the courtroom, meant to protect the jury from
prejudicial influence; sufficiency of the evidence of a conspiracy
to defraud the United States; and what constitutes impermissible
"overview" testimony. Finding no merit in any of defendants' many
claims of error, we affirm.
I.
We review the evidence "in the light most favorable to
the verdict." United States v. Van Horn, 277 F.3d 48, 50 (1st
Cir. 2002) (citing United States v. Escobar-de Jesus, 187 F.3d
148, 157 (1st Cir. 1999)).
In 2005, the Department of Defense instituted the
National Guard Recruiting Assistance Program ("G-RAP") to help
recruit soldiers during the ongoing conflicts in Iraq and
Afghanistan. G-RAP was intended to supplement the National Guard's
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traditional reliance on full-time recruiters. It enabled Guard
members who are not full-time recruiters to register as "Recruiting
Assistants," use their personal networks to identify and nominate
potential recruits and refer them to full-time recruiters, and
receive bonuses if their nominees ultimately enlist. Docupak, a
marketing company and contractor, administered G-RAP by hiring and
managing Recruiting Assistants and processing bonus payments.
To become a Recruiting Assistant, an applicant completed
an online application, verified his eligibility, created an online
profile, and completed a mandatory training. Importantly,
Recruiting Assistants were prohibited from sharing G-RAP bonuses
with full-time recruiters, and this limit was emphasized in the
original training module. The rules also specified, as set forth
in a revised training module, that Recruiting Assistants were
prohibited from receiving information about a nominee from a
recruiter without the nominee's consent, and from nominating an
individual they did not know.
Only upon successfully completing training (which
entailed reviewing the information in the training modules and
then passing a quiz) could a Recruiting Assistant begin identifying
potential recruits. After making a nomination, the Recruiting
Assistant would facilitate a meeting between the nominee and a
full-time recruiter. The full-time recruiter would assess the
nominee's qualifications, perform aptitude tests, and run a
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background check. The Recruiting Assistant was expected to
provide support and mentorship to the nominee throughout this
process. As compensation, the Recruiting Assistant would receive
a $1,000 payment if the nominee enlisted and an additional $1,000
payment if the nominee progressed to basic training.
Each Recruiting Assistant recorded his or her participation in the
online system administered by Docupak: first by creating a profile
for each nominee with the nominee's personal identifying
information, then by adding entries detailing each nominee's
progress.
Carlos Meléndez-González ("Meléndez"), a part-time
member of the Army National Guard, became a Recruiting Assistant
in 2006. Between 2006 and 2008, Meléndez received $21,000 in
recruitment bonuses for twelve new National Guard enlistees
recorded as his nominees on his G-RAP account.
After an Army Audit Agency review found "signs of
possible fraud" in G-RAP, the Army Criminal Investigations
Division ("CID") launched a nationwide investigation.
In an interview with investigators in 2013, Meléndez
admitted that he did not know most of his nominees. Nor did he
act as a Recruiting Assistant for any of them; the nominees were
all recruited by Enrique Costas-Torres ("Costas"), a full-time
recruiter who was not eligible for recruitment bonuses. Meléndez
knew Costas from a previous posting. The investigation also
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revealed that Meléndez's G-RAP account contained various false
statements, including claims that he had had meetings with nominees
that in fact never occurred. Meléndez also informed investigators
that he had provided his G-RAP account password to Costas.
The investigators concluded that Meléndez and Costas had
carried out a fraudulent scheme to obtain recruitment bonuses:
Costas enlisted new recruits and provided Meléndez with their
personal identifying information, and Meléndez pretended that the
recruits were his own leads in order to collect bonuses and then
to split the proceeds with Costas. On October 21, 2015, a grand
jury returned an indictment charging Costas and Meléndez with
conspiracy to defraud the United States, in violation of 18 U.S.C.
§ 371; conspiracy to commit wire fraud, in violation of 18 U.S.C.
§ 1349; wire fraud, in violation of 18 U.S.C. § 1343; and
aggravated identity theft, in violation of 18 U.S.C.
§ 1028A(a)(1). All charges pertained to conduct that occurred
between March 2006 and June 2008. On April 13, 2016, the grand
jury returned a superseding indictment charging the same offenses
plus one count of embezzling public money, in violation of
18 U.S.C. §§ 641-642, pertaining to the same conduct.
The two were tried jointly. Neither testified. At the
close of an eight-day trial by jury, Meléndez was convicted of one
count of conspiracy to defraud the United States, one count of
embezzling public money, one count of conspiracy to commit wire
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fraud, and thirteen counts of wire fraud. Costas was convicted of
three counts of wire fraud. The district court granted the
defendants' motion for acquittal on one count of wire fraud and
one count of aggravated identity theft. The jury found the
defendants not guilty on the remaining counts.
Costas was sentenced to one year in prison, three years
of supervised release, a $5,000 fine, and $3,000 in restitution.
Meléndez was sentenced to time served (approximately two months),
two years of supervised release, and $20,000 in restitution. The
court found that Costas had the "main role" in the scheme because
he was "a higher ranking officer and was the one with access to
the personal and identifying information for all the recruited
. . . persons for which payments were processed." The court
determined that Costas had not only provided his recruits' personal
information to Meléndez but had also himself accessed Meléndez's
G-RAP account and directly input information for certain recruits.
Costas appealed his conviction and sentence. Meléndez
appealed only his conviction. Their appeals were consolidated.1
1 While the appeals were pending, defendants filed with
the district court a motion for a new trial based on newly
discovered evidence. The district court promptly denied the
motion. Defendants now seek to challenge that denial in these
appeals. Their challenge is not properly before this court because
defendants did not file a timely notice of appeal from the denial
of their motion for a new trial. See Fed. R. App. P. 3; United
States v. Velez Carrero, 140 F.3d 327, 330 (1st Cir. 1998).
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II.
We address defendants' challenges to their convictions,
then dispose of Costas's challenges to his sentence. Costas's
brief repeats virtually verbatim the language in Meléndez's brief
and raises claims of his own. We treat the shared arguments
together.2
A. Statute of Limitations and Pre-Indictment Delay
Defendants first argue that the district court erred in
denying their pretrial motion to dismiss the indictment as
untimely. We review this issue de novo. United States v. Ngige,
780 F.3d 497, 502 (1st Cir. 2015).
Defendants were indicted in 2015 for conduct that took
place between March 2006 and June 2008. The district court held
that the general five-year statute of limitations that applies to
the criminal statutes under which defendants were charged, see
18 U.S.C. § 3282(a), was tolled by the Wartime Suspension of
Limitations Act, 18 U.S.C. § 3287 ("WSLA").
2 We summarily reject Costas's claim that the district
court erred in denying his motion to consolidate this case with
two other cases in which he was charged with conspiring to commit
fraud involving the G-RAP program. See Fed. R. Crim. P. 13. As
the district court noted, the three cases "allege distinct
conspiracies involving different co-defendants and overt acts."
Costas does not allege that his co-defendants in any one case acted
in concert with his co-defendants in either of the other cases.
Joinder would have created a risk that the jury would treat
evidence offered against one co-defendant as supporting unrelated
charges against other co-defendants. The district court did not
abuse its discretion in denying Costas's motion.
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As amended in October 2008,3 the WSLA tolls the statute
of limitations for any offense involving, inter alia, fraud against
the United States, "[w]hen the United States is at war or Congress
has enacted a specific authorization for the use of the Armed
Forces . . . until 5 years after the termination of hostilities as
proclaimed by a Presidential proclamation, with notice to
Congress, or by a concurrent resolution of Congress." Id. The
district court found that the 2001 Authorization for the Use of
Military Force, Pub. L. No. 107-40, 115 Stat. 224 (2001) ("AUMF"),
"triggered, and continues to trigger," the WSLA's tolling
provisions.
On appeal, defendants renew two arguments that the
district court considered and soundly rejected: (1) that the AUMF
constitutes an unconstitutional delegation of legislative
authority to the President in violation of separation of powers
principles, and (2) that the hostilities authorized by the AUMF
ended before defendants' alleged crimes occurred. We reject these
arguments for substantially the same reasons. Defendants' claim
is that the AUMF lacks a "sufficient statutory standard to guide
the President." But defendants do not deny that tolling of the
WSLA is triggered by the "enact[ment] of a specific authorization
3 The district court held that the WSLA amendments applied
because at the time the amendments were enacted, the statute of
limitations applicable to defendants' offenses had not expired.
Defendants do not challenge this ruling on appeal.
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for the use of the Armed Forces" and that the AUMF indisputably
qualifies as such.
The WSLA provides for tolling until the termination of
hostilities is formally announced "by a Presidential proclamation,
with notice to Congress, or by a concurrent resolution of
Congress." 18 U.S.C. § 3287. No such formal announcement has
occurred to date. The WSLA's tolling provisions remain active.
See United States v. Frediani, 790 F.3d 1196, 1200-01 (11th Cir.
2015); United States v. Pfluger, 685 F.3d 481, 485 (5th Cir. 2012).
Defendants approach the delay issue from another angle,
asserting that there was excessive pre-indictment delay. We review
the district court's denial of this claim for abuse of discretion.
See United States v. Bater, 594 F.3d 51, 53 (1st Cir. 2010).
A due process claim of excessive pre-indictment delay
requires showing "both that the 'delay caused substantial
prejudice to [the defendant's] right to a fair trial' and that
'the [g]overnment intentionally delayed indictment . . . to gain
a tactical advantage.'" Id. at 54 (alteration in original)
(quoting United States v. Picciandra, 788 F.2d 39, 42 (1st Cir.
1986)).4 Defendants have established neither. As to the second
4 We do not consider here whether the standard for a due
process claim alleging pre-indictment delay should be modified for
cases where statutes of limitations are tolled either for very
long periods of time or indefinitely and charges are brought, say,
decades after the relevant events became known to the government.
The facts of this case simply do not present such a circumstance.
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prong, they have not even argued that the prosecution intentionally
delayed indictment to gain a tactical advantage. As to prejudice,
they lament that it was impossible for them to retrieve relevant
evidence such as the "original rules" for the G-RAP program
"between 2005 and 2007" and the "Recruiters Assistants' digital
files where they acknowledged, agreed to and/or were quizzed on
particular updates on rules of the G-RAP program." Yet the
critical 2005 and 2007 G-RAP training modules (including the
portions thereof setting the "rules that create criminal
intention") and the contents of Meléndez's G-RAP digital account
were introduced and discussed extensively at trial. And Meléndez
himself admitted that he read the rules and took the training quiz
when he enrolled in G-RAP.
B. Court Rulings as to Military Dress in the Courtroom
Costas argues that the district court violated his Sixth
Amendment right to a public trial by partially, to use his words,
"closing" the courtroom. No such thing happened. We review this
claim de novo. United States v. Laureano-Pérez, 797 F.3d 45, 76
(1st Cir. 2015).
On the penultimate day of trial, just before closing
arguments, the prosecution brought to the district court's
attention that approximately fifteen National Guard members in the
courtroom were dressed in formal National Guard Gala uniforms.
The court recognized that while Guard members in fatigue uniforms
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had appeared "sporadically" throughout the trial, this large group
in formal garb constituted a conspicuous, "overwhelming presence"
in a portion of the courtroom. The judge described the scene:
"all you can see are the ribbons, the golden medals on the
shoulders, [and] the stripes that are with the gold ribbon as
well." The Guard members so dressed confirmed to the court that
they had "taken the day off" and were not (and could not be)
attending the proceedings in their official capacities. The court
found that the group had acted "in concert," that it was
"reasonable to infer" that its uniform display was "geared to
unduly influence the jury," and that "the presence of all the Gala
uniforms in this fashion pose[d] a strong likelihood of influencing
the jury."
In an effort to protect the jury from "undue pressure"
while preserving defendants' right to a public trial, the court
ruled that the Guard members could remain in the courtroom as long
as they did not wear full uniforms. The court adjourned the trial
until the afternoon to provide them time to change or remove their
jackets and ties. The court made clear that it was willing to
consider other suggestions as to how to accommodate the service
members, but defense counsel offered none.
The National Guard members complied with the order.
After the adjournment and closing arguments, the court described
for the record that "all 15 members of the National Guard are here
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in court and have been here in court throughout the entire
afternoon with . . . half of their uniforms, that is the trousers
or pants and . . . the white shirt without the jacket."
Costas's public-trial claim plainly fails and is
frivolous. The court did not close the courtroom at all. To the
contrary, the court stressed that "the Court remains open,"
adjourned the proceedings to avoid excluding anyone, and
ultimately verified that all Guard members had complied with its
directive and remained in the courtroom through closing arguments.
The court's order was thoughtfully crafted and an eminently
reasonable means of maintaining courtroom decorum and protecting
the jury from the risk of prejudicial influence.5 See United
States v. Rios Ruiz, 579 F.2d 670, 674-75 (1st Cir. 1978).
C. Sufficiency of the Evidence
Defendants contend that the evidence presented at trial
was insufficient to support their convictions for wire fraud and,
in Meléndez's case, conspiracy. The district court rejected these
claims when it denied defendants' motions for judgment of
acquittal. See Fed. R. Crim. P. 29. So do we.
5 Costas asserts that the district court based its order
on the prosecution's allegedly mistaken assertion that an Army
regulation prohibited off-duty servicemen from wearing uniforms
when engaging in civilian activity. The court never referenced
that point. Rather, the record makes clear that the court acted
out of legitimate concern that the "overwhelming presence" of the
Guard members' full Gala uniforms could unfairly prejudice the
jury.
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We review sufficiency of the evidence claims de novo.
See United States v. Wyatt, 561 F.3d 49, 54 (1st Cir. 2009).
"[W]e examine the evidence -- direct and circumstantial -- as well
as all plausible inferences drawn therefrom, in the light most
favorable to the verdict, and determine whether a rational fact
finder could conclude beyond a reasonable doubt that the defendant
committed the charged crime." Id.
The evidence presented at trial established that
Meléndez used the personal identifying information of a dozen new
National Guard enlistees to obtain recruitment bonuses; that he
did not help recruit his purported nominees and did not know most
of them; and that his G-RAP account entries reported fictitious
meetings between him and his purported nominees. It was Costas
who had recruited these enlistees, and Costas was the one, unlike
Meléndez, who had access to their private personal information.
Shortly after many of the $1,000 recruitment bonuses were wired to
Meléndez's account, Meléndez made $500 cash withdrawals. Finally,
Meléndez knew from his training (to the extent it was not self-
evident) that he was prohibited from nominating persons he did not
know. A jury could readily infer that Meléndez willfully entered
into a scheme to defraud the National Guard by feigning eligibility
for recruitment bonuses.
As to Costas, the evidence supported the conclusion that
he committed wire fraud by giving Meléndez the personal information
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of enlistees he had recruited, with the intent that Meléndez use
it to fraudulently apply for recruitment bonuses. Costas was
ineligible for such bonuses, he knew Meléndez, and at least three
of Meléndez's nominees had given their information only to Costas.
Costas emphasizes that the prosecution did not present any direct
evidence that he received kickbacks. Meléndez's frequent $500
cash withdrawals provide circumstantial evidence, though, that he
was splitting his bonuses with whomever was providing him with the
necessary information. Regardless, the prosecution did not need
to prove that Costas actually received any kickbacks. It was
sufficient to show that Costas, by giving Meléndez the personal
information of enlistees, purposefully caused him to use that
information fraudulently to procure unearned bonuses. See United
States v. Carrington, 96 F.3d 1, 7 (1st Cir. 1996) (holding that
"[t]he crime of wire fraud does not require that the defendant's
object be attained" and that the crime is "completed" upon
transmission of the requisite "wire communication").
Finally, Meléndez challenges his conspiracy conviction.
He argues that he could not possibly be found guilty because
Costas, the only co-conspirator named in the superseding
indictment, was acquitted of the conspiracy charges. The
prosecution suggests in response that the jury could have found
that Meléndez entered into a conspiracy with one of the "unknown"
co-conspirators described in the superseding indictment. The
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evidence -- that Meléndez did not have access to the private
personal information he submitted online and that he repeatedly
made cash withdrawals of exactly one half the amount of his
recruitment bonuses -- was sufficient to prove that Meléndez had
conspired with someone. "[S]o long as there is 'sufficient
evidence to sustain a rational verdict of guilt beyond a reasonable
doubt' for a conspiracy charge, 'an inconsistent verdict should
stand.'" United States v. Rios-Ortíz, 708 F.3d 310, 317 (1st Cir.
2013) (quoting United States v. Figueroa-Encarnación, 343 F.3d 23,
30 n.4 (1st Cir. 2003)). Meléndez's conviction stands.
D. Evidentiary Challenges
Defendants raise a variety of evidentiary challenges.
We address below only the one sufficiently substantial to warrant
discussion. The other arguments are "insufficiently developed,
patently meritless, or both." United States v. George, 841 F.3d
55, 61 (1st Cir. 2016).
1. Claim of Improper Overview Testimony from Agent De Jesús
Defendants argue that one of the prosecution's
witnesses, CID Agent André de Jesús, provided improper and
prejudicial overview testimony. Agent De Jesús conducted the
investigation that led to Costas's and Meléndez's indictment. As
the prosecution's sixth witness at trial, De Jesús testified
regarding the origins of the CID's investigation of the G-RAP
program; the procedure his office followed in conducting
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G-RAP-related investigations; and the steps he took when
investigating defendants, including interviewing Meléndez's
purported nominees. Costas (but not Meléndez) contemporaneously
objected that De Jesús was providing improper overview testimony
and "painting a picture of guilt for the defendants" by using words
like "fraud" and "investigation." He also objected on hearsay
grounds to De Jesús's reporting on statements Meléndez's nominees
made to him. The court overruled the objections.
We review Costas's claims for abuse of discretion.
United States v. Rodriguez, 525 F.3d 85, 95 (1st Cir. 2008).
Because Meléndez did not contemporaneously object, he bears the
burden of establishing plain error. Id.; see also United States
v. Leon-Delfis, 203 F.3d 103, 113 (1st Cir. 2000) (explaining that
this court "typically require[s] defendants in joint criminal
trials to raise their own objections at trial" and relaxes this
rule "only when the district court specifically states that an
objection from one defendant will be considered an objection for
all defendants").
The majority of De Jesús's testimony covered his
investigation of defendants, of which he had first-hand knowledge.
"Where an officer testifies exclusively about his or her role in
an investigation and speaks only to information about which he or
she has first-hand knowledge, the testimony is generally . . .
permissible." United States v. Rose, 802 F.3d 114, 121 (1st Cir.
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2015). Contrary to Costas's argument, De Jesús never expressed a
view as to defendants' guilt. De Jesús used the word "fraud" only
when explaining that the CID's nationwide investigation of the
G-RAP program began after an Army Audit Agency review found
"indications of possible fraud" in the program. De Jesús was
merely providing context for his own investigation.
As the prosecution has conceded on appeal, De Jesús did
delve into hearsay testimony when he testified about statements
Meléndez's purported recruits made to him in interviews.
Specifically, De Jesús reported that all of his interviewees denied
having received assistance from Meléndez during the enlistment
process and that six of them claimed not to know Meléndez.
However, we find the admission of this testimony harmless. The
interviewees later testified at trial consistent with De Jesús's
summary. There is no indication in the record that De Jesús
attempted to vouch for them. Nor was there any need for such
endorsement: none of the interviewees had credibility or bias
problems, and they provided only straightforward and unproblematic
testimony concerning their interactions (or the lack thereof) with
defendants during their recruitment. Defendants suffered no
prejudice.
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E. Costas's Sentencing
Costas challenges his sentence as procedurally and
substantively unreasonable. We find no abuse of discretion. See
United States v. Ayala-Vazquez, 751 F.3d 1, 29 (1st Cir. 2014).
On the procedural front, Costas argues that the district
court erred in applying a four-level enhancement based on a loss
amount of $20,000 under United States Sentencing Guidelines
§ 2B1.1, and a two-level enhancement for abuse of a position of
trust under § 3B1.3. The abuse-of-trust enhancement was plainly
appropriate. Costas abused the "professional or managerial
discretion" he possessed as a Sergeant Major and full-time
recruiter when he misused the personal information of his recruits.
See United States v. Sicher, 576 F.3d 64, 72-73 (1st Cir. 2009)
(quoting U.S.S.G. § 3B1.3 cmt. n.1).
As to the loss amount, Costas asserts that the court
should have considered only the $3,000 in bonus payments resulting
from the three wire-fraud counts of which Costas was convicted.
Instead, the court took into account all of the bonuses Meléndez
obtained, including those tied to wire-fraud counts of which Costas
was acquitted. A district court may rely on acquitted conduct in
sentencing "so long as that conduct ha[s] been proved by a
preponderance of the evidence." United States v. Martí-Lón, 524
F.3d 295, 302 (1st Cir. 2008). Here, the evidence showed that
Meléndez collected at least $20,000 in bonuses for nominating
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twelve recruits who were all in fact recruited by Costas; that
those recruits provided their personal information only to Costas;
and that that information was nevertheless somehow input into
Meléndez's G-RAP account. Additional evidence not admitted at
trial (but properly considered at sentencing) showed that Meléndez
provided his password to Costas and that Costas himself had
directly input information into Meléndez's account. The district
court had a sufficient basis to deem Costas responsible, by a
preponderance of the evidence, for all of Meléndez's fraudulently
procured bonuses.
Next, Costas asserts that his sentence was substantively
unreasonable because Meléndez, who was convicted on many more
counts, received a lesser sentence. Costas "is not entitled to a
lighter sentence merely because . . . his co-defendant[] received
[a] lighter sentence[]." United States v. Torres-Landrúa, 783
F.3d 58, 69 (1st Cir. 2015) (quoting United States v. Dávila-
González, 595 F.3d 42, 50 (1st Cir. 2010)). And we have no reason
to second-guess the district court's conclusion that Costas had
the "main role" in the scheme because he was "a higher ranking
officer and the one with access to the personal and identifying
information for all of the recruited . . . persons for which the
payments were processed." See Ayala-Vazquez, 751 F.3d at 33-34
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("Determinations as to the relative culpability amongst
codefendants are best made by the district judge . . . .").
For the first time on appeal, Costas attempts to
challenge as unfounded the district court's statement during
sentencing that Costas "tried to manipulate the jury by basically
causing . . . other members . . . of the military force to come
here dressed up in their Gala uniforms . . . ." The argument is
waived.
III.
We affirm each of defendants' convictions.
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