United States v. Juan Rene Caro , 454 F. App'x 817 ( 2012 )

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 09-13407 JAN 10, 2012
________________________ JOHN LEY
CLERK
D. C. Docket No. 08-20044-CR-JAL
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
JUAN RENE CARO,
MAYTEMAR CORPORATION,
d.b.a. La Bamba Check Cashing,
Defendants-Appellants.
________________________
Appeals from the United States District Court
for the Southern District of Florida
_________________________
(January 10, 2012)
Before BARKETT and HULL, Circuit Judges, and SCHLESINGER,* District
Judge.
SCHLESINGER, District Judge:
I. INTRODUCTION
During the building boom in South Florida in the early 2000s, many within
the construction industry played fast and loose with federal and state regulations to
maximize profits and minimize taxes. These companies were able to find willing
partners in this pursuit, and Juan Rene Caro (“Caro”) was accused of being one of
these partners. Caro’s scheme allegedly involved using fictitious or “shell”
construction corporations to avoid taxes and insurance costs.
Normally, employers withhold from employees’ paychecks monies paid into
the federal treasury; social security and payroll taxes. These legitimate
construction companies, however, were trying to avoid these “obstacles,” so that
they could employ illegal aliens. One cannot simply write a payroll check to an
illegal alien, as such employment is illegal. In addition, these illegal aliens could
not open legitimate bank accounts where they could either deposit or cash
paychecks.
If the alleged scheme worked properly, all of these “obstacles” would be
overcome. A legitimate construction company would be approached by Caro or an
*
Honorable Harvey E. Schlesinger, United States District Judge for the Middle District
of Florida, sitting by designation.
2
associate and offered an alternative to paying the taxes and insurance costs
associated with employees. Rather than pay employees by check, the legitimate
construction company would write a check to a shell corporation making it appear
that the shell company was a subcontractor and the employer of the legitimate
construction company’s employees.
The shell corporation would allegedly cash that check at Caro’s check
cashing store, or another check cashing store. A percentage of the face value of the
check was “charged” as a fee, with the remaining cash returned to the shell
corporation. The shell corporation, in turn, provided the cash to the legitimate
construction company. The cash, in its final voyage of the journey, was payed to
employees, including illegal aliens.
In addition to evading payroll taxes, the scheme allegedly allowed the
legitimate corporation to avoid the expense of workers’ compensation insurance.
This was accomplished when the shell company fraudulently procured workers
compensation insurance and permitted the legitimate company’s employees to
work under that insurance certificate.
The shell companies, on the other hand, were then left holding the bag.
They were responsible for the payroll taxes and insurance premiums but never paid
them. Instead, when all the unpaid taxes and premiums drew scrutiny, usually
within a year or eighteen months, the shell company simply dissolved leaving these
3
debts unpaid. Another shell company would quickly be incorporated and the cycle
would begin anew.
The flaw in Caro’s scheme was underestimating the Internal Revenue
Service (“IRS”). Financial institutions are required to complete and file with the
IRS a currency transaction report (“CTR”) for currency transactions involving
more than $10,000. Caro allegedly made material misrepresentations in the CTRs
for the transactions with these shell companies, which eventfully led to him being
investigated by the IRS and being charged in this case.
II. CHARGES
A thirty-three count Superceding Indictment was returned by a federal grand
jury based upon this alleged scheme.
A. Count One - Conspiracy
Count One charged a conspiracy between Caro, Alfredo Filomeno Gonzalez,
Jose Jorge Chaoui, Oscar Alberto Valle, Meylin Maria Morales, as well as
Maytemar Corporation, d/b/a La Bamba Check Cashing (“La Bamba”), and others;
in violation of 18 U.S.C. § 371. It was alleged that the conspiracy existed to
willfully violate currency transaction reporting requirements; in violation of 31
U.S.C. §§ 5313(a); 5324(a)(2), (d)(2). The purpose of the conspiracy allegedly
was to unlawfully enrich the co-conspirators by earning substantial commissions,
or “fees,” by cashing checks for these shell corporations.
4
In furtherance of the conspiracy, co-conspirators filed CTRs for transactions
with the shell companies that contained materially false statements and omissions
of material facts.
It was alleged from August 2005 until January 2008, that the co-
conspirators used various shell corporations and allowed customers to write checks
payable to those shell companies. The advantage of this was to make it appear that
the shell company was an actual subcontractor, engaged in construction work, for
the legitimate company. These checks were cashed for a “fee,” at La Bamba, or an
associated check cashing store, despite not being payable to the person conducting
the transaction.
Thereafter, Caro and other co-conspirators allegedly caused La Bamba to
file CTRs falsely stating that the parties involved in the check cashing transaction
were the shell companies and their nominee owners. This misrepresented the true
source of the money and the true identities of the individuals conducting the
transaction. From August 2005 until January 2008, the co-conspirators filed false
CTRs that reflected transactions totaling more that $132.7 million. In addition,
Caro payed a portion of the “fee” from the transaction to the co-conspirator as
payment for the use of the shell company.
The Superceding Indictment alleged twenty-one overt acts of the conspiracy.
These overt acts listed activities such as: Caro meeting with Miguel Obispo, the
5
owner of an associated check cashing store, and discussing cashing checks in
exchange for cash at an agreed fee; filing false CTRs for transactions involving
Fast Construction, Group, Inc. (“Fast”), Spirit Construction Group Corporation
(“Spirit”), SB Construction Group Corporation (“SB”), and PAW Construction
(“PAW”); co-conspirator Chaoui’s accepting checks on July 23, 2007, from
Obispo payable to the shell companies; and Caro giving Obispo a business card
from DJ Construction Group, Inc. (“DJ”) for the purpose of Obispo contacting
Valle and becoming a part of this conspiracy.
B. Counts Two - Seventeen
Counts Two through Seventeen charged Caro, Gonzalez, Chaoui, Valle,
Morales, and La Bamba with causing and attempting to cause a domestic financial
institution to file CTRs that contained materially false statements and omissions of
material facts; in violation of 31 U.S.C. §§ 5313(a); 5324(a)(2), (d)(2); and 18
U.S.C. § 2. Count Two alleged that Caro and Chaoui, on April 6, 2007, accepted
checks payable to Spirit totaling $79,965, and caused and attempted to cause the
filing of a false CTR from that transaction stating that Marvin Marroquin had
cashed the check.1
Count Six alleged that Caro and Chaoui accepted checks payable to Spirit,
1
We need not address Count Three as only Chaoui was charged in that count and the
jury could not reach a verdict on that count. Nor must we address Counts Four, Five or Seven
because Caro was not convicted of those charges.
6
on May 18, 2007, in the amount of $233,836, and caused and attempted to cause a
false CTR from that transaction to be filed stating that Marvin Marroquin had
cashed the check.2 Count Eight alleged that on July 12, 2007, Caro accepted
checks payable to PAW in the amount of $60,120, and caused and attempted to
cause a false CTR to be filed from that transaction stating that Carlos Martinez
cashed the check.3 Count Nine alleged that on July 31, 2007, Caro accepted checks
payable to PAW in the amount of $46,050, and caused and attempted to cause a
false CTR to be filed from that transaction stating that Carlos Martinez cashed the
check. Count Ten alleged that on August 15, 2006, Caro and Gonzalez accepted
checks payable to PAW in the amount of $56,233, and caused and attempted to
cause a false CTR to be filed from that transaction stating that Carlos Martinez
cashed the check. Count Eleven alleged that on August 16, 2007, Caro and
Gonzales accepted checks payable to PAW in the amount of $44,325, and caused
and attempted to cause a false CTR to be filed from that transaction stating that
Carlos Martinez cashed the check. Count Twelve alleged that on August 22, 2007,
Caro and Gonzales accepted checks payable to PAW in the amount of $56,042,
and caused and attempted to cause a false CTR to be filed from that transaction
stating that Carlos Martinez cashed the check. Count Thirteen alleged that on
2
Count Six is also Count One’s overt act six.
3
Count Eight is also Count One’s overt act nine.
7
August 23, 2007, Caro and Gonzales accepted checks payable to PAW in the
amount of $41,208, and caused and attempted to cause a false CTR to be filed from
that transaction stating that Carlos Martinez cashed the check. Count Fourteen
alleged that on September 5, 2007, Caro and Gonzales accepted checks payable to
PAW in the amount of $107,812, and caused and attempted to cause a false CTR to
be filed from that transaction stating that Carlos Martinez cashed the check.4
Count Fifteen alleged that on September 5, 2007, Caro, Valle, and Morales
accepted and cashed checks payable to DJ in the amount of $100,288, and caused
and attempted to cause the filing of a false CTR that stated that G.V. had cashed
the check. Count Sixteen alleged that on September 26, 2007, Caro, Gonzalez,
Valle, and Morales accepted and cashed checks payable to DJ in the amount of
$72,447, and caused and attempted to cause the filing of a false CTR that stated
that G.V. had cashed the check. Count Seventeen alleged that on September 26,
2007, Caro and Gonzales accepted checks payable to PAW in the amount of
$55,015, and filed a false CTR from that transaction stating that Carlos Martinez
cashed the check.
C. Counts Eighteen - Thirty-Three
Counts Eighteen through Thirty-Three charged La Bamba with filing false
CTRs; in violation of 31 U.S.C. §§ 5313(a); 5322(b); and 18 U.S.C. § 2. These
4
Count Fourteen is part of Count One’s overt act seventeen.
8
counts involve the same transactions alleged in Counts Two through Seventeen, in
which Caro was a Defendant but not La Bamba.
III. PROCEEDINGS
Caro, Gonzalez, Chaoui, and La Bamba were jointly tried during a lengthy
jury trial.5 Vior dire began on November 5, 2008, closing arguments were
concluded on January 23, 2009, and the jury returned verdicts on February 9, 2009.
The Government’s witness list included 38 witnesses, and its exhibit list contained
well over 600 exhibits.6 By their verdict, the jury found Caro guilty of Counts
One, Two, Six, and Eight through Seventeen. La Bamba was convicted of Counts
One, Eighteen, Nineteen, and Twenty-Two through Thirty-Three.7 The jury could
not reach verdicts as to Gonzalez and Chaoui, and the District Court declared a
mistrial as to them. They both subsequently plead guilty to other offenses. Caro
was sentenced to a 216-month total term of imprisonment, which was below the
applicable sentencing guideline range, and La Bamba was placed on five years
5
Valle and Morales did not appear for trial and were deemed fugitives.
6
However, some of these exhibits like Exhibit 3 contain as many as 200 different CTRs
which were bundled into a single exhibit. It appears that while over 600 exhibit numbers were
used, many of these contain multiple single page CTRs, like exhibit 12 which contains over 208
different single page CTRs. So for record purposes, what appears to be two exhibits combined
they contained in reality in excess of 400 separate transactions which were identified
individually by witnesses using a stamped number on each sheet.
7
The Government provided an overabundance of evidence involving repeated filings of
false CTRs, but for the purposes of this Opinion we need only address the Counts of which Caro
and La Bamba were convicted.
9
probation.
Appellants Caro and La Bamba challenge their convictions on the grounds
that the District Court committed multiple errors throughout the trial. Specifically,
appellants maintain: there was insufficient evidence to support the convictions;
that the District Court permitted the government’s expert witness to impermissibly
substitute his own ideal standard for one reflecting “real world” financial
operations; that the District Court erred by allowing cross-examination into
defense counsel’s violation of the rule of sequestration and the cross-examination
of Caro’s industry expert about a 27-year-old felony conviction; the District Court
improperly excluded the testimony as to the presence of OSHA inspectors at
construction sites; the District Court improperly struck a portion of Caro’s closing
argument; the District Court permitted a government witness to testify about
Caro’s right to remain silent; that the government committed numerous instances
of misconduct; the District Court erred by failing to sever the trial as to the co-
defendants; that jury deliberations were tainted and the District Court improperly
destroyed a partial verdict; and that the District Court improperly instructed the
jury.
Appellants also challenge their sentences contending that the District Court
erred in calculating the sentencing guidelines by characterizing Caro as an
organizer/leader of a fraudulent financial reporting conspiracy, in applying a
10
two-level obstruction-of-justice enhancement, and imposing a 216-month sentence
which was procedurally and substantively unreasonable.
We reject Appellants’ attacks on their convictions and sentences and
conclude that they should be affirmed.
IV. FACTUAL BACKGROUND
The following evidence was presented at trial in support of the charges.
A. Bank Secrecy Act
The Currency and Foreign Transactions Reporting Act (“Bank Secrecy
Act”) enacted in 1970, Pub.L. 91–508, Tit. II, 84 Stat. 1118, delegates to the
Secretary of the Treasury the authority to establish regulations for financial
institutions. One of those regulations directs that financial institutions must
complete and file with the IRS a CTR for currency transactions involving more
than $10,000. 31 U.S.C. § 5313; old 31 C.F.R. 103.22 (75 FR 65806-01). All
financial institutions, including check-cashing stores, are subject to Bank Secrecy
Act (“BSA”) regulations and reporting requirements.
The BSA imposes duties upon financial institutions to keep certain records,
obtain particular information, file reports, and establish an effective anti-money
laundering compliance program. A financial institution is required to have a
compliance officer, who is responsible for the institution’s following all BSA
requirements. Although the compliance officer is not required to personally
11
prepare every CTR, that officer is required to sign the CTR and oversee the
process. A financial institution’s officers and directors must ensure that the BSA’s
requirements are fulfilled. Although BSA duties may be delegated, financial
institutions retain ultimate responsibility for compliance and no agency
relationship may cancel that responsibility.
Financial institutions must generate a “paper trail” to identify potential
taxable income and to prevent financial crimes. The Code of Federal Regulations
sets forth the instructions for completing and filing CTRs and directions are
attached to the form. Within the IRS, the Detroit Computer Center maintains a
major database of all CTR information called the Currency Bank Retrieval System
(“CBRS”), which is available to law enforcement agencies with jurisdiction to
investigate financial crimes.
Peter D. Djinis, a government expert, explained to the jury that the BSA
required financial institutions to report currency transactions over $10,000 to the
government.8 He explained that a CTR must identify the date, transaction amount,
the person or entity on whose behalf the transaction took place, and the individual
who was physically present at the institution to conduct the transaction.9
8
It was stipulated that La Bamba was a “domestic financial institution” under the Bank
Secrecy Act and subject to its CTR-reporting requirements.
9
IRS agent William Rondon explained that a CTR may properly be filed within fifteen
days of the date of a transaction.
12
Each CTR consists of three parts. Part 1 is concerned with identities of
parties to a transaction; section A requires the financial institution to identify and
report the beneficiary of the transaction, meaning the party on whose behalf the
transaction is conducted, while section B requires the financial institution to
identify and report the actual conductor of the transaction, that is, the party who is
either depositing and/or receiving more than $10,000 in currency.
Part 2 requires the date, the amount of the transaction, and the form of the
transaction. If the aggregate amount of different transactions by the same entity
during the same day exceeds $10,000 in currency, then a CTR must be filed. This
prohibits the structuring of transactions of less than $10,000 to avoid reporting
what in actuality is a series of daily transactions that amount to $10,000 or more.
Part 3 requires the names of the financial institution where the transaction
occurred, the person completing the form, and the person approving the completion
and filing of the form. The form provides extra pages to list multiple names if
more than one entity is involved in the transaction or if multiple financial
institutions are involved.
Djinis, further, explained that a financial services institution is required to
know its customers. An institution must not simply identify its customers, but it
has an obligation to understand who the customers actually are and identify the
nature of their business and activity. Customers who engage in repeated
13
transactions involving large amounts of cash generate greater risk and exposure for
the financial institution and it is these customers who the institution must place
under greater scrutiny. Key indicators of risky transactions are amounts,
frequency, and volume of a customer’s transactions. Thus, for money services
businesses, like check-cashing stores, they must be cautious that they are doing
business with the persons who are complying with the CTR requirements rather
than trying to avoid them.
Finally, Djinis hypothesized that if La Bamba handled more than $600
million in transactions, as the government suggested, that volume was
“exceptionally high” for the services La Bamba offered to the public. That volume
of the checks should have prompted La Bamba to investigate the underlying facts
of the transactions and the parties involved.
B. IRS Investigation
In 2006, an IRS task force began investigating the activities of South Florida
check-cashing stores. Information obtained from the CBRS database revealed that
hundreds of CTRs for transactions exceeding $10 million had been filed for DNC
Construction (“DNC”), Fast, and Spirit. Despite the volume of transactions, these
entities did not appear to be engaged in any actual construction work. This
anomaly provided the IRS with a starting point for their investigation.
1. La Bamba
14
Initially, the investigation revealed that La Bamba, a money service business
that cashed checks, was a Florida corporation. The main store and corporate
offices were located in Miami. La Bamba maintained six branch stores and a fleet
of mobile vans that visited construction sites to cash checks.
Caro, the Owner and President of La Bamba, oversaw its daily operations.
Defendant Chaoui, with over 28 years experience as a bank officer, was La
Bamba’s compliance officer. Gonzalez, Caro’s brother-in-law and former licensed
contractor, was in charge of supervising the cashing of checks.
They were, however, not the only participants in the scheme. Oscar Valle
and his wife, Meylin Maria Morales, set up shell companies and functioned as
recruiters to bring new “clients” to Caro. Despite being the linchpin that held the
scheme together, Caro needed the help of all his co-conspirators because he could
not have carried on such a widespread and sophisticated scheme alone.
2. Spirit Construction
In December 2006, IRS Agent William Rondon interviewed Spirit’s
President, Marvin Marroquin. Marroquin cooperated with the government and
testified at trial. Marroquin testified that his brother-in-law, Alfredo Ortega, had
created Spirit with Marroquin’s driver’s license and social security number. Spirit
was created not for construction work, but for the sole purpose of cashing checks
to evade taxes. For this reason, Ortega explained to Marroquin that Spirit could
15
remain in existence for about a year and a half, but then Marroquin, as President,
should leave the country before the IRS discovered Spirit’s activity.
Ortega obtained a workers’ compensation insurance policy for Spirit and had
Marroquin sign approximately 40 blank checks for Spirit. At Ortega’s request,
Marroquin also obtained a rubber stamp with his signature so that Ortega could
cash checks without Marroquin’s signature, should Marroquin need to leave the
country. As Spirit’s President, Marroquin received a percentage of Spirit’s cashed
checks as compensation for his part in the scheme.
A form with Marroquin’s name and signature was found in a La Bamba file,
and La Bamba filed CTRs for transactions worth more than over $20.3 million on
Spirit’s behalf. Marroquin testified this was not accurate as he had never visited La
Bamba, he did not know Caro, Gonzalez, or Chaoui, nor did he authorize La
Bamba to cash checks for Spirit.
3. Cashflow Financing
Based upon information gleaned from the CBRS database, the IRS also
started investigating Cashflow Financing, Inc. (“Cashflow”), another check
cashing institution. In March 2007, Cashflow was searched and Miguel Obispo, its
owner, was detained and interviewed. In the end, Obispo agreed to cooperate with
the government in an undercover capacity. Based on that cooperation, the IRS
installed cameras and microphones in Cashflow, and Obispo was personally
16
equipped with a recording device.10
According to Obispo’s testimony, Cashflow had two types of corporate
clients – regular and irregular. The regular clients cashed $5,000 to $7,000 checks
every two weeks. The irregular clients cashed checks from $30,000 to $200,000
every week. The irregular clients included: DNC Construction; Fast; Spirit; SAN
Construction; WF Construction; Baba Construction; and Four-by-Four
Construction. Not surprisingly, these so-called construction clients were not
actually engaged in construction work, but were shell companies that could be used
as subcontractors for the purposes of cashing checks.
Over time, 90% of Cashflow’s business was derived from these irregular
companies. The only hindrance to Obispo’s growing business was limitations
imposed by his bank. The bank established an $180,000 ceiling on Cashflow’s
weekly check deposits. This ceiling forced Obispo to seek alternative sources of
funds, and he found willing partners in Caro and La Bamba.
4. La Bamba
In April 2005, one of Obispo’s friends introduced him to Caro. Caro agreed
to supply Obispo with $100,000 to $150,000 cash weekly, in order to allow
Cashflow to cash checks without his bank’s interference. Obispo borrowed the
10
These devices recorded over 100 undercover meetings between Obispo and La Bamba
staff, approximately 300 telephone conversations, and 380 DVDs that showed numerous
meetings between Obispo and Cashflow customers.
17
cash from La Bamba on Friday and repaid it, along with 1.5% interest, the
following Wednesday.
Despite Obispo’s cash borrowing arrangement, the bank’s deposit
restrictions, mentioned above, continued to curtail Cashflow’s activities. In
August 2005, Obispo and Caro further attempted to circumvent these restrictions.
No longer would Obispo pick up cash from La Bamba, now he would bring the
checks to Caro at La Bamba for deposit and receive cash in return.
These corporate checks Obispo delivered to La Bamba emanated from the
shell companies. While he never explicitly divulged this to Caro, Obispo believed
the two had an “understanding” based on the amount of currency changing hands.
Caro acknowledged the fictitious nature of the companies when he described to
Obispo that his companies were “miquimbin,” meaning phony or fictitious
companies.11
Now that Obispo was bringing checks written to the shell companies directly
to La Bamba, the CTRs for the transactions were prepared and filed by La Bamba.
Obispo understood that La Bamba would prepare the CTRs to remove him and
Cashflow from the paper trial. Instead, the CTRs would be in the name of the shell
corporation. Not yet cooperating with the IRS, Obispo was intent on actively
11
No source language was identified for this term. However, according to Obispo,
“Miquimbin” was a word in Caro’s vocabulary. He explained that “out in the street, in everyday
slang, it means things that come from bad origins or misbegotten things.”
18
deceiving the IRS and these false CTRs would facilitate that by indicating the
person to whom the check was written was actually withdrawing the money and
not Obispo.
Obispo was aware that the CTRs being filed based on his transactions with
Caro and La Bamba were inaccurate. To correctly record these transactions, two
CTRs should have been filed. One detailing the La Bamba to Cashflow
transaction. And a second from Cashflow providing the true identity of the person
who received the currency. Instead of following the proper procedure, Obispo
provided La Bamba with the information to generate and file a single, false CTR.12
This arrangement between Obispo, as a co-conspirator, and La Bamba lasted
from August 2005 to March 22, 2007, when the IRS intervened.13 But Obispo’s
dealings with Caro and La Bamba were far from over. From April through
November 2007, Obispo visited La Bamba in his customary manner; the difference
was he was now working for the IRS and wearing a recording device.
On April 5, 2007, Obispo paid his first visit to La Bamba as an informant,
and he brought with him fourteen checks totaling $129,544.58; including checks
12
The information consisted of: the tax or employer identification number for the
fictitious company; the corporate officer’s driver’s license; the company’s articles of
incorporation; and its workers’ compensation insurance certificate.
13
On March 22, 2007, a search warrant was executed by the IRS at Cashflow, and
Obispo agreed to become a government informant.
19
made payable to Spirit. On April 6, 2010, Obispo again visited La Bamba bringing
with him checks totaling $227,079.76.
Based on these transactions, La Bamba prepared and filed several CTRs.14
One particular CTR, the subject of Count Two of the Superseding Indictment, lists
a transaction dated April 6, 2007. This CTR covers the cashing of checks, payable
to Spirit, in the amount of $79,965.00. Yet the CTR falsely reflects that
Marroquin, Spirit’s President, conducted the transaction. Obispo is not identified
on the form and he actually conducted the transaction.
On May 3, 2007, Obispo returned to La Bamba with checks, including some
payable to SB. Obispo provided La Bamba the necessary paperwork to make the
false CTRs for SB, including a copy of SB’s articles of incorporation, a copy of the
driver’s license for Salvador Mata, SB’s corporate officer, and a copy of Mata’s
social security card. The CTR La Bamba filed in connection with these checks
falsely stated that Mata had conducted the transaction. Again Obispo was
eliminated from being identified as part of the transaction.
On Obispo’s May 16, 2007, visit to La Bamba, Caro changed the names of
the payor on four of Obispo’s checks to avoid bank suspicion. The checks had
originally been made payable to La Bamba from Cashflow to avoid bank
14
Government’s Exhibit 3 indicates that La Bamba filed seven CTRs for transactions
involving Spirit from April 5, 2007, until April 20, 2007.
20
suspicion. To prevent the need for future alterations, Caro directed Obispo to use
different names on the checks and to deliver them sporadically. Caro instructed
Obispo to mark his checks with the initials “M.H.” on the back; these initials stood
for Obispo’s friend who introduced him to Caro. In that way, Caro knew they
were Obispo’s checks. Caro, further, suggested to Obispo that he make the checks
payable to Spirit to make it appear that Cashflow had given Spirit cash and was
depositing the checks at La Bamba. This practice would discourage further bank
inquiry.
On May 18, 2007, Obispo returned to La Bamba, bringing $404,204.23 in
checks; including two from Cashflow to Spirit. Caro obtained from Obispo the
information for the CTRs, and directed Obispo to write the other checks from
Cashflow in his own handwriting. When Obispo asked Caro the name of the
payee, Caro told him that he could make out the check to “whichever one you
want.” Obispo interpreted this comment to mean any fictitious company he wanted
so Obispo chose Spirit.
At least one CTR was filed by La Bamba with a transaction date of May 18,
2007. That CTR falsely reflected that Marroquin, from Spirit, presented checks for
$233,836.00 to La Bamba that day, and is the subject of Count Six.
In June 2007, Obispo disclosed to Caro that he and a friend had formed
PAW Construction. Obispo explained that PAW was “just like Spirit,” a shell
21
company that could be used to evade taxes and the payment of workers’
compensation insurance. Obispo touted the virtues of PAW, and assured Caro that
PAW was insured. Unbeknownst to Caro, PAW was created by IRS agents to
further its investigation. PAW was registered under the fictional name “Carlos
Martinez;” which was an alias used by IRS Special Agent Charles Torres. Checks
would be written to PAW from other IRS “undercover” companies, also created for
the investigation. The bank accounts for these undercover companies were funded
to ensure that the checks made payable to PAW would clear the payors’ bank
accounts.
Not surprisingly Caro and La Bamba willingly accepted checks made
payable to PAW. On July 12, 2007, Obispo presented eight PAW checks to La
Bamba. Caro only accepted two of the checks because of his concern about his
bank becoming suspicious. For those two checks, however, CTRs were prepared
at La Bamba that falsely identified Carlos Martinez, PAW’s corporate officer, as
conducting the transaction when it actually was Obispo. The CTR identified the
correct amount of the transaction, $60,120, and was signed by Chaoui, and it is the
subject of Count Eight.
Obispo returned to La Bamba, on July 31, 2007, with two more PAW
checks. Again, the CTR prepared and recorded by La Bamba falsely stated the
transaction had been conducted by Carlos Martinez, not Obispo. This CTR is the
22
subject of Count Nine.
Obispo repeatedly visited La Bamba with PAW checks from June through
November 2007. For all the PAW checks, La Bamba prepared and filed CTRs that
falsely identified Carlos Martinez as having conducted the transactions, when in
reality it was Obispo.15
On one occasion, Obispo brought PAW checks to La Bamba that
intentionally had not been endorsed. In Gonzalez’s presence, Obispo signed them
Carlos Martinez. On Obispo’s last trip to La Bamba, on November 8, 2007, the
checks to PAW had again not been endorsed and Caro drew that to Obispo’s
attention. In Caro’s presence, Obispo signed the checks Carlos Martinez.
From June to November 2007, La Bamba filed 44 CTRs for PAW involving
transactions of $3.5 million. All the CTRs falsely stated that Carlos Martinez,
PAW’s corporate officer, conducted the transactions when it was Obispo who had
conducted them. These CTRs from this period are the subject of Count Ten,
Eleven, Twelve, Thirteen, Fourteen, and Seventeen.
During the fall of 2007, Caro offered to purchase Cashflow. While
discussing Cashflow’s worth, Caro questioned the profit Obispo realized from the
checks he cashed for legitimate companies. Caro estimated Cashflow cashed about
15
All of the CTRs filed by La Bamba on the PAW transactions stated that Elaine
Becerra was the preparer and Chaoui was the approving official.
23
$1 million a month in checks, without including the “strange people.” Caro stated
that one could not rely upon the “miquimbines,” because they are “here today and
gone tomorrow.” When Obispo suggested that the “strange people” possessed
some value and that Caro too had “strange people,” Caro retorted, “No, I no longer
have anything.”
Obispo was perplexed by this comment. Caro was apparently denying
having shell companies within his business, but Caro repeatedly accepted Obispo’s
checks to them. Caro explained that he had to be careful because his actions were
scrutinized under a “magnifying glass.”
Later, returning to the subject of the purchase of Cashflow, Caro told Obispo
that Obispo would continue delivering checks to Caro. La Bamba would continue
preparing the CTRs under the names of the fictitious companies. But in the event
of an audit, Obispo would be responsible for any documentation Caro might need.
During another conversation, Caro and Obispo discussed how La Bamba
prepared their CTRs. According to Caro, Chaoui had full responsibility for the
CTRs. Elaine Becerra, the person at La Bamba responsible for preparing all the
CTRs, may prepare them, but she was supervised by both Caro and Chaoui.
Obispo retorted that Caro did not know much about preparing and filing CTRs
because Becerra and Chaoui handled them. In response, Caro explained that he
had done the job before Chaoui’s arrival, and while Chaoui knew about banks
24
“from the inside,” Caro knew more “about banks.”
5. La Bamba’s Internal Operations
La Bamba was situated in a two-story building with a customer waiting area,
a teller window area, and four offices. Caro’s office was downstairs, while Elaine
Becerra and Chaoui’s offices were upstairs.
La Bamba had branch offices, but they were not authorized to cash checks in
large amounts. If someone presented a large check in one of those locations, the
cashier was required to call the main office for approval from Caro, Chaoui, or
Gonzalez. The same procedures applied when someone other than the registered
representative sought to cash a check at a branch store or a mobile van. No CTRs
were prepared at the branch stores or the mobile vans, even if they engaged in
transactions over $10,000. In such a case, the information was sent to La Bamba’s
main office where the CTR was prepared.
Before cashing checks, La Bamba’s tellers or cashiers verified that the check
was “okay” and that the person who was cashing the check was the proper person
to cash the check. This was verified consulting La Bamba’s database, which
contained the application that a company’s owner completed when first registering
with La Bamba. If anyone other than an authorized person wished to cash a check,
a supervisor, such as Caro or Gonzalez, was required to approve the transaction.
Regardless of the where the transaction occurred, from 2004-2008, Elaine
25
Becerra prepared all of La Bamba’s CTRs. An immigrant from Cuba, Becerra had
no background in finance or banking. But after receiving training from Teresita
Caro, Caro’s sister, on filling out the CTRs, they were Becerra’s responsibility.
Becerra was not solely responsible for the CTRs, however. Once they were
completed, Becerra submitted them to Chaoui for his approval and signature.
Chaoui also served as a resource if she had any questions about her work.
Becerra was never able to observe the actual cashing of checks from her
workstation. Instead she relied upon computer programs to assist her in the
preparation of the CTRs. When Becerra began working at La Bamba, in 2004, she
used a computer system, named Ideal, to create a database to record La Bamba’s
customers. In 2005, Ideal was replaced by Power Check, and in 2006 Archive was
added. Becerra used these tools simultaneously to retrieve the data that she needed
to fill out a CTR. The databases contained a company’s ID number, its address,
and the name of the person that cashed the check. Becerra trusted that if the check
was payable to a person or company, that was the person or company that actually
cashed the check.
Becerra also relied upon certain pieces of information from the check itself
to prepare the CTRs. The Archive computer program scanned the checks and
placed them into the system. She relied upon the amount from the check, the date,
and the name of the person who cashed the check. Becerra used the name of the
26
person or the company listed as the payee on the check to prepare a CTR, unless
she was instructed otherwise.
In gathering the information for the CTRs, Becerra also created her own
alphabetical list of check-payees for each day. With this list, Becerra created a
master list of the daily transactions. After she calculated the sum of the day’s
transactions for each payee, Becerra determined whether the aggregate daily
transactions exceeded $10,000, which triggered the reporting requirement.
Becerra prepared the CTRs on a weekly basis and submitted them to Chaoui.
Once signed, Becerra mailed them to the IRS. During her years at La Bamba, no
one ever told Becerra that she was not performing her job correctly.
The flaw in Becerra’s whole procedure was that she “trusted that the person
who was actually cashing the check [was] the person registered with Power
Check.” Consequently, the CTRs prepared by Becerra, approved by Chaoui, and
filed by La Bamba stated that particular individuals had cashed checks at La
Bamba on certain dates, although Becerra was unable to ascertain whether those
individuals had actually done so.
For example, Becerra’s log for June 29, 2006, reflected that Fast cashed
checks amounting to $156,755. The CTR filed by La Bamba stated that the
transaction was conducted by Jose Montenegro, Fast’s corporate officer, but
Becerra had not seen Montenegro nor could she verify whether he actually cashed
27
those checks.
Similarly, Becerra’s log for December 6, 2006, reflected that checks
amounting to $102,992 had been cashed for Spirit. The CTR filed by La Bamba
stated that Marroquin, Spirit’s corporate officer, had conducted the transaction,
although Becerra did not know whether Marroquin had been at La Bamba to cash
those checks. She simply assumed it was him.
During her employment with La Bamba, Becerra participated in training
meetings held twice yearly, which were run by Chaoui and Gonzalez. During
those meetings it was discussed how important it was to obtain the proper
information from people cashing checks to make Becerra’s job easier.
Furthermore, Becerra took periodic tests to ensure she understood CTR
preparation.
6. Oscar Valle
Delvin Ortega16 was employed by Oscar Valle. Ortega explained to the jury
his experience in Valle’s scheme. Oscar Valle created various shell companies,
including Trebol Construction (“Trebol”), Huber Construction (“Huber”), Mira
Construction (“Mira”), DJ, and SNF Construction (“SNF”), for the purpose of
obtaining workers’ compensation insurance policies and permitting other
companies to perform work under the insurance policies for Valle’s companies.
16
Ortega is also known as Tomas Garcia
28
Contractor employers wrote checks to Valle’s companies to pay their workers, and
these checks were cashed at La Bamba for a fee.
Like the other shell companies, Valle’s companies did not perform any
construction work and Valle’s friends and relatives functioned as their corporate
officers.17 As with the other shell companies, the addresses listed in state records
for Valle created companies were residential addresses that gave no indication that
construction business was transacted there.
Valle’s commissions were placed in an envelope for him at La Bamba. It
was Ortega’s responsibility to pick up the commissions for Huber and Mira. From
November 2006 until March 2007, Ortega waited at La Bamba, usually on Fridays
and sometimes on Saturdays, to pick up the envelopes containing Valle’s 4%
commissions. These commissions ranged from $13,000 to $16,000 weekly, but
Ortega recalled the largest was $23,000. Ortega received these commissions from
either a female employee, Caro or Gonzalez.
La Bamba filed CTRs for transactions totaling $60,949,702 for Valle’s five
shell companies. From March until November 2007, La Bamba filed 157 CTRs
for DJ transactions totaling $14.5 million. From September 2006 until November
17
The corporate representative for Trebol was Oscar Valle’s father; the corporate
representative for Huber was Valle’s mother Flora; the corporate representative for Mira was
Miguel Ramirez, Valle’s friend; the corporate representative for DJ was Valle’s aunt Gladys;
and the corporate representative for SNF was Francisco Ortega, another of Valle’s friends.
29
2007, La Bamba filed 243 CTRs for Huber transactions totaling $16 million. From
May 2006 to November 2007, La Bamba filed 211 CTRs for Mira transactions
totaling $18.9 million. From October to November 2007, La Bamba filed 13 CTRs
for SNF transactions totaling $557,000. From August 2005 until November 2007,
La Bamba filed 193 CTRs for Trebol transactions totaling $10.7 million.
In July 2007, Obispo confided to Caro that Spirit would be dissolving
because its insurance was expiring and it had no useful life without insurance.
Obispo asked Caro for a company where he could place some clients. Caro gave
Obispo a DJ business card, and told him to contact “Oscar” or “Tomas.”
In response to Obispo’s telephone call to DJ, Valle and Ortega met Obispo
at Cashflow. Valle explained he had spoken with Caro, and that he had three
companies with workers’ compensation insurance to offer Obispo. Obispo was
told he could write approximately $100,000 in checks to DJ weekly for a 3%
commission. The checks would be cashed at La Bamba, and Valle and La Bamba
would be responsible for preparing and filing the CTRs. They, further, agreed that
the CTRs would falsely list DJ’s corporate officer, Gladys Valle, as receiving the
cash from the check, instead of the person who actually received it. Valle assured
Obispo that he had been working with Caro for four years and had never
encountered a problem.
Valle gave Obispo the necessary paperwork for DJ, including a copy of the
30
articles of incorporation, a copy of Gladys Valle’s driver’s license and social
security number, and a certificate of workers’ compensation insurance. It was
agreed that DJ’s corporate officer would not be present when the checks were
cashed and that her signature would be forged.
Obispo delivered checks to La Bamba made payable to DJ Construction.
Caro deducted a 5% commission for Obispo’s checks written to DJ; 3% for Valle
and 2% for La Bamba.
From August until October 2007, Obispo brought checks to La Bamba made
payable to DJ from undercover IRS companies. Notably, in these transactions the
checks were left unendorsed. On one occasion, Caro asked Obispo to make the
amounts of the checks smaller. On another occasion, Caro reminded Obispo to
write his name on the back of the checks and to mark the checks with the initials
“M.H.” as was their custom.
7. Rodrigo Donadio
Caro and La Bamba cashed checks for more clients than simply Obispo and
Cashflow. One of those clients, Rodrigo Donadio, a subcontractor who owned the
companies, “Second to None” and “Bencomo Artemisa.”
Donadio had a pre-existing business relationship with Alfredo Ortega.
Ortega approached Donadio and asked how he was paying his workers, some of
whom were illegal aliens. Ortega explained a company was available that would
31
allow Donadio to write checks that could be used to pay his workers in cash. Other
companies were doing the same thing, according to Ortega.
After two weeks, Donadio asked Ortega about more details. Ortega
explained the scheme, including how Donadio’s workers would be covered by
workers’ compensation insurance. Donadio agreed and Ortega gave him the name
of DNC to write checks to. After another few weeks, Ortega directed Donadio to
write checks to Fast instead of DNC. Later, Donadio was directed to write checks
to Spirit. Regardless of to whom the checks were written, Donadio payed a 5% to
6% commission per check, and those checks were cashed at Cashflow. Donadio
testified that he knew the scheme was illegal, but he explained that the benefit of
using the shell companies was that he no longer had to pay payroll taxes or be
concerned with workers’ compensation insurance.
After some time, Donadio contacted Caro and asked if Caro could provide a
similar service, but at a reduced rate. Caro was willing to provide the identical
service for a 3.5% to 4% per check fee.
In early 2007, Caro gave Donadio the name Mira to write checks to. Caro
instructed Donadio to contact La Bamba for a copy of Mira’s insurance certificate.
Donadio wrote checks from Second to None to Mira in amounts ranging
from $10,000 to $80,000 every Thursday and sent them by facsimile to La Bamba.
Normally, several hours later Chaoui personally delivered the cash to Donadio.
32
However, on the few occasions when Donadio went to La Bamba to have his
checks cashed, this was done directly by Caro.
Specifically, Donadio testified about an April 4, 2007, check in the amount
of $29,204. Donadio explained that he signed the check to Mira and delivered it to
Chaoui. But Donadio could not explain the endorsement on the back of the check.
It was not his, nor did he know whose it was.
Donadio also began writing checks from his other company, Bencomo
Artesima, to Mira and cashing those checks at La Bamba. After seven to nine
months, Donadio was told by Chaoui to write his checks to another company, DJ.
Donadio again received an insurance certificate from La Bamba for DJ.
In March 2008, Donadio was approached by law enforcement officers.
Donadio cooperated in the investigation and obtained immunity for his statements
and was not charged in the conspiracy.
8. Adelino Agostinho
Caro also gave Contractor Adelino Agostinho, owner of Silva Builders, the
name of DJ to use to pay Silva’s payroll. Previously, Agostinho had employed a
similar system with subcontractors who had used the insurance certificates for
Valle’s shell companies, Trebol, Mira, Huber, and SNF. Those checks had been
cashed at La Bamba for a 6% commission.
Eventually, because the illegal aliens he employed had no taxpayer
33
identification numbers, Agostinho arranged with Caro to pay those workers by
writing checks to DJ that La Bamba would cash. Once he wrote a check to DJ,
Agostinho segregated the payment for those workers from the remainder of his
workforce and submitted, by facsimile transmission, an invoice under DJ
Construction’s name for the total amount of the check that he needed to pay those
workers, in addition to a 5% commission. Agostinho had an employee prepare the
DJ invoice so that it would appear to be legitimate in the event that it ever came
under scrutiny from the government.
The check was delivered to La Bamba, along with envelopes marked with
each worker’s name and amount that he was to receive. La Bamba cashed the
check from Silva Builders to DJ and filled each envelope with the appropriate
amount of cash for the workers to pick up at La Bamba on Friday afternoons.
In January 2008, Agostinho wrote three checks to DJ. These checks were
for different subcontractors who did work for Silva. Over a six-month period,
Agostinho wrote checks from Silva Builders to DJ for $2,687,668.44. Agostinho
was unaware whether La Bamba filed CTRs for those transactions.
9. Andres Martinez
Andres Martinez owned Design Builders. He and Mario Edgardo Varela
Rivera, who was in charge of personnel and payroll for Design Builders, met Caro
in February 2006. Rivera testified that Caro recommended that Design Builders use
34
Mira to pay its workers and avoid payroll taxes and workers’ compensation
insurance premiums.
Originally, La Bamba cashed checks for Design Builders’ employees every
Friday because most of its workers were illegal aliens. La Bamba loaned the
payroll money to Design Builders and permitted the money to be repaid one week
later. La Bamba charged Design Builders a commission of 2% for employees’
checks and 3% for its cash advances.
This continued until May 2006, when Caro suggested that Design Builders
simply make the checks payable to Mira. Caro explained to Rivera that Design
Builders would avoid payroll taxes, and workers’ compensation premiums by
making checks payable to Mira.
Eventually, Martinez, Rivera and Valle met at La Bamba, and Valle offered
Mira’s services for a 6% check fee. Valle subsequently provided Design Builders
with a copy of Mira’s insurance certificate. Design Builders wrote its first check to
Mira in May 2006, and for six or seven months thereafter. Design Builders wrote
checks to Mira until Valle instructed Rivera to make the checks payable to Huber,
Valle’s new company. Design Builders’ checks to Huber were cashed at La
Bamba for the same 6% commission.
The Huber arrangement continued for another seven or eight months until it
was replaced with DJ, yet another one of Valle’s companies. Design Builders’ first
35
check to DJ was written in March 2007.
Design Builders wrote checks for $575,188.20 to Huber; for $1,071,258.93
to Mira; and for $1,340,180.56 to DJ. No one at Design Builders ever worked for
Huber, Mira, or DJ. Design Builders never endorsed the checks made payable to
Valle’s companies.
10. Joseph Dieppa
Contractor Joseph Dieppa was the owner of Advanced Surface Restoration,
Inc. (“Advanced”). Dieppa obtained from Caro the names of shell companies to
write checks to so that he could pay his workers in cash, and avoid payroll taxes
and workers’ compensation insurance premiums.
In 2005, Dieppa’s company obtained a $60 million contract to construct a
condominium building on Fisher Island, a small island off Miami Beach. When
Dieppa encountered difficulties in retaining subcontractors, he contacted Caro,
who had a reputation for having a connection to subcontractors.
Dieppa’s labor shortfall continued prompting him to assemble his own team
of workers and to obtain from Caro the name of Morgan Construction (“Morgan”)
to write checks to in order to allow the payment of wages to those workers. By
writing checks to Morgan, Dieppa was able to pay his workers cash and avoid
payroll taxes. Dieppa also avoided the expense of premiums for workers’
compensation insurance because his workers used Morgan’s insurance certificate.
36
Still another benefit of Caro’s service, Dieppa hired illegal aliens who could be
paid with cash.
Caro charged Dieppa a 10% fee per check and gave him copies of Morgan’s
articles of incorporation and certificate of insurance. Every two weeks, Dieppa
wrote a check to Morgan for the workers’ salaries, adding a 10% commission for
Caro. After receiving the amount from Dieppa, Caro personally delivered the cash
to Dieppa, at his Fisher Island office. Caro also brought Dieppa invoices on
Morgan letterhead. The money Caro delivered to Dieppa was packaged in manila
envelopes and boxes. When Caro was not available to bring the cash to Dieppa,
Caro’s sister or Chaoui came in his place.
In 2006, Deippa assembled his own laborers for another project. Again he
used Caro’s services. This time, Caro gave him the name of Mira to write payroll
checks to. The Mira scheme operated in the same manner as with Morgan. Caro
furnished a copy of Mira’s insurance certificate and delivered Mira invoices to
Dieppa, along with cash.
In addition to Morgan and Mira, Dieppa wrote his payroll checks to the
following shell companies provided by Caro: Huber; SAS; Trebol; GQ; Petrillo
Construction; and Aly Trucking.
Caro also provided Deippa with false lien releases from the shell payee
companies to whom Deippa had written checks. A lien release indicates that a
37
contractor has been paid; the contractor releases the invoice. Without this signed
release, a subcontractor cannot be paid. Caro gave Dieppa releases from the
owners of Huber, Mira, and SNF. Dieppa’s business with Caro ended only when
Caro was arrested in January of 2008. By that time, Dieppa had written a total of
$3.9 million in checks to Caro provided companies.
11. Nevin Shapiro
Caro always sought opportunities to expand his client base. In early 2007,
when Caro met Nevin Kerry Shapiro at a Miami Heat basketball game, he offered
Shapiro a loan of $7,000 cash with no terms. Shapiro testified that Caro who had
the cash on his person, gave the money to Shapiro with only a handshake to seal
their agreement. Shapiro was to repay the money with a $500 fee. Shapiro repaid
the loan by writing a check for $7,523.23 from his real estate company to Huber, at
Caro’s direction.
Shapiro then borrowed $50,000 from Caro in October 2007 and repaid the
loan by writing a personal check for $52,500 to DNC. The $2,500 represented
interest on the loan and Shapiro did not endorse the check before personally
delivering it to Caro.
The loans from Caro and repayments from Shapiro continued for five more
transactions. Caro sent someone to Shapiro’s office to pick up Shapiro’s check or
Shapiro gave the check to Caro personally at a Heat game or by visiting La Bamba.
38
To repay the loans, Shapiro wrote checks to AFC Painting and Huber, entities who
had never performed any work for him, and finally, to La Bamba. Although Caro
insisted that the other companies Shapiro had written the checks to were “his,”
Shapiro was uncertain about the others. Caro agreed reluctantly to permit Shapiro
to write the final two checks, one for $50,000 and one for $52,000, directly to La
Bamba.
12. Caro and his bank
Caro frequently complained about scrutiny from his bank. Madeline
Jenkins, Peninsula Bank’s senior compliance officer, testified Caro’s complaints
were well founded because Peninsula Bank was constantly reviewing La Bamba’s
BSA compliance.
Jenkins explained that money service businesses, like La Bamba, are one of
the highest-risk accounts for a bank. Therefore, the bank monitors those accounts
more than the average. Jenkins explained that what made those accounts so risky
is a money service business (“MSB”) is responsible for its own due diligence on its
customers before processing a check, to maintain its business license. Jenkins
explained this as “Know Your Customer;” or knowing who they are an who they
claim to be. If the MSB is not conscientious in knowing its customer, however, the
bank can be placed at risk. This risk to the bank could result in closure or bank
members being prosecuted.
39
When Peninsula established accounts for La Bamba in 2004, it imposed the
conditions that separate accounts be maintained for depositing checks to
individuals and corporations. Peninsula also required La Bamba to maintain a
certificate of deposit on account as collateral for the other accounts.
Initially Peninsula limited La Bamba to a maximum of $30,000 an item and
$100,000 a company per day. This limitation was meant to prevent fraud. Caro
approached Peninsula about increasing these limits. Peninsula, agreed to the
increase provided that Caro establish a savings account and deposit $1 million to
be used as collateral when he wanted to draw against uncollected funds. This
arrangement worked for a few months until Caro requested cash in amounts that
exceeded the balances in all La Bamba accounts. Caro also requested to withdraw
cash from the $1 million savings account to fulfill his orders.
Jenkins wrote Caro seeking an explanation of the changes in La Bamba that
necessitated this amount of cash. According to Caro, La Bamba serviced
customers on the weekends, La Bamba’s mobile units were increasingly being
used, and La Bamba had six offices in South Florida. Interestingly, Caro failed to
mention La Bamba’s relationship with Cashflow or its increased business with
construction companies.
After an internal review of its policies, Peninsula began transactional
testing. Jenkins testified the bank began looking at the items La Bamba was
40
actually depositing and the pattern of dollars to individuals or corporations. Based
on this initiative, Peninsula discovered La Bamba permitted some corporations to
use a stamp to endorse checks, and that La Bamba’s exceeded the limits that had
been imposed on deposits.
Peninsula attempted to have a special software program installed at La
Bamba. This program, for all Peninsula’s MSB clients, looked for patterns in
activity. Only after being assured that Peninsula would not be able to remove data
from the system, was La Bamba willing to accept the software. Interestingly, when
Peninsula received the software’s data from La Bamba, it only included
information from La Bamba’s branch stores not the main office. Jenkins
questioned Caro about this, and he responded another software system existed at
the main store. However, that was never shared with Peninsula.
In an e-mail, dated May 30, 2007, Chaoui provided Peninsula with a list of
La Bamba’s mobile units and La Bamba’s quarterly report. This quarterly report
provided the number of checks cashed for the preceding three months, the fees
received from cashing checks, and the fees from other services. Absent from this
report was any reference to the millions of dollars in transactions it had monthly
with Cashflow.
Still wanting to strengthen its policies to MSBs, Peninsula retained an
attorney to create an agreement for Peninsula’s MSBs to sign and return. Jenkins
41
testified that this agreement required MSBs to: guarantee to the bank that they
were fulfilling their responsibilities for their licenses; provide information on their
transactions and corporate structure; and warranty use of its collateral. La Bamba
failed to return a signed copy of the form.
Later, Jenkins sought information on the identities of some of the companies
listed in La Bamba’s transactions. Chaoui replied that La Bamba had acquired two
vendors under La Bamba’s license, but Cashflow was again absent from this list.
Finally, at the end of October 2007, Peninsula conducted an on-site audit of
La Bamba to assess its BSA compliance. This audit concluded that La Bamba
needed improvement. A deficiency that was found, according to Jenkins, was La
Bamba’s apparent carelessness in filing its CTRs. Although the CTRs were timely
filed, about 10% of them, or 300 out of 3,250, were returned “because of errors or
legibility problems.” The audit recommended that the CTR personnel receive
additional training. Moreover, the audit noted that La Bamba was overdue for its
annual BSA training. The auditors, further, found La Bamba’s due diligence
deficient and recommended that its compliance officer and its staff receive more
training. The results of the audit were shared with Caro and La Bamba.
13. Government Agents
IRS Agent Rondon testified about his involvement in the investigation into
La Bamba, and detailed PAW checks that the IRS provided to Obispo, who in turn
42
delivered them to La Bamba. Rondon specifically testified regarding the
circumstances surrounding Counts Eight through Seventeen. Rondon detailed how
the IRS provided Obispo these checks, how Obispo took them to La Bamba, and
how La Bamba filed false CTRs for those transactions.
Rondon testified that he reviewed approximately 1,500 CTRs filed by La
Bamba in connection with this investigation. None of these CTRs were accurate,
according to Rondon, because they reported transactions involving shell companies
that were not engaged in construction.
IRS Agent Vincent Lozowicki explained that Peninsula provided the IRS
with monthly statements from La Bamba’s bank accounts. A review of those
accounts revealed that in 2006 and 2007, La Bamba deposited a total of over $600
million in checks each year for all sources. Over $400 million of that total were
from checks made payable to corporations and business entities. The remaining
$200 million were made payable to individuals. La Bamba averaged $50 to $60
million a month in check deposits in 2006 and 2007.
Lozowicki, further, explained that he reviewed some of the checks that La
Bamba had deposited for the shell corporations listed in the superseding
indictment. He observed that some of these checks had a stamped endorsement,
and he described this as unusual.
Isabel Fleitas, a senior investigative analyst with the IRS, was able to locate
43
all the CTRs filed by La Bamba for the shell companies named in the superseding
indictment. From August 2005 to January 18, 2008, La Bamba filed 1,559 CTRs
reflecting a total of $132,773,648.47 in transactions from only shell corporations.
Fleitas also explained that she determined that all of the companies who filed
CTRs filed them for more than $100,000 in a twelve month period.
14. Termination of Conspiracy
On January 18, 2008, agents executed a search warrant at La Bamba’s
headquarters and its warehouse. On the same day, agents arrested Caro, Chaoui,
and Gonzalez.
Among the items found in the La Bamba store were client files containing
forms and copies of driver’s licenses and articles of incorporation for companies,
including the documents for PAW and other fictitious companies; training manuals
on BSA compliance and forms showing that such training had been conducted at
La Bamba; boxes of business cards for DJ and SNF; and envelopes for
commissions for the recruiters of the shell companies, including one with Valle’s
name on it.
While out on bond following his arraignment, Caro met contractor Dieppa at
the Beach Club on Fisher Island. Caro asked Dieppa to “remove” the
subcontractors’ releases from his files. Dieppa interpreted this remark to mean,
“make them disappear.” In addition, Caro urged Dieppa to tell the investigators
44
that the work had been performed.
Based on this and other evidence, the jury found Caro guilty of Counts One,
Two, Six, and Eight through Seventeen. La Bamba was convicted of Counts One,
Eighteen, Nineteen, and Twenty-Two through Thirty-Three. The District Court
declared a mistrial as to Gonzalez and Chaoui. Both Chaoui and Gonzalez
subsequently pled guilty to corruptly endeavoring to obstruct and impede
administration of internal revenue laws, in violation of 26 U.S.C. § 7212(a), and
received three-year custodial sentences.
IV. STANDARDS OF REVIEW
More than one standard of review guides the analysis of this appeal. We
review de novo the following issues: the sufficiency of evidence, United States v.
Taylor, 480 F.3d 1025, 1026 (11th Cir. 2007); allegations of prosecutorial
misconduct, United States v. Eckhardt, 466 F.3d 938, 947 (11th Cir. 2006); a
possible double jeopardy violation, United States v. Thurston, 362 F.3d 1319, 1322
(11th Cir. 2004); and the correctness of jury instructions, United States v. Prather,
205 F.3d 1265, 1270 (11th Cir. 2000).
An abuse of discretion standard applies when we review: evidentiary
rulings, United States v. Novaton, 271 F.3d 968, 1005 (11th Cir. 2001); the failure
to give a requested jury instruction, United States v. Yeager, 331 F.3d 1216, 1222
45
(11th Cir. 2003); the denial of a motion for mistrial, United States v. Emmanuel,
565 F.3d 1324, 1334 (11th Cir. 2009); the denial of a severance motion, United
States v. Watchmaker, 761 F.2d 1459, 1476 (11th Cir. 1985); and a defendant’s
sentence, United States v. Bonilla, 579 F.3d 1233, 1239 (11th Cir. 2009).
V. TRIAL ISSUES
A. Sufficiency of Evidence
Caro maintains the evidence at trial was insufficient to convict him of the
CTR offenses.18 It is Caro’s contention that the government’s evidence adduced at
trial failed to establish the requisite mens rea to convict him of knowingly causing
false CTRs to be filed.
Caro was found guilty of Counts One, Two, Six, and Eight through
Seventeen of the Superseding Indictment, violations of 18 U.S.C. § 2,19 371;20 31
18
In a joint brief, Caro and La Bamba indicate that all appellate arguments therein also
apply to La Bamba. (Blue Brief at 2 & n. 1).
19
18 U.S.C. § 2 provides:
(a) Whoever commits an offense against the United States or aids, abets, counsels,
commands, induces or procures its commission, is punishable as a principal.
(b) Whoever willfully causes an act to be done which if directly performed by him
or another would be an offense against the United States, is punishable as a principal.
20
18 U.S.C. § 371 provides:
If two or more persons conspire either to commit any offense against the United
States, or to defraud the United States, or any agency thereof in any manner or for
any purpose, and one or more of such persons do any act to effect the object of the
46
U.S.C. § 5313(a);21 § 5324(a)(2),22 (d)(2).23
conspiracy, each shall be fined under this title or imprisoned not more than five
years, or both.
21
31 U.S.C. § 5313(a) provides:
When a domestic financial institution is involved in a transaction for the payment,
receipt, or transfer of United States coins or currency (or other monetary instruments
the Secretary of the Treasury prescribes), in an amount, denomination, or amount
and denomination, or under circumstances the Secretary prescribes by regulation, the
institution and any other participant in the transaction the Secretary may prescribe
shall file a report on the transaction at the time and in the way the Secretary
prescribes. A participant acting for another person shall make the report as the agent
or bailee of the person and identify the person for whom the transaction is being
made.
22
31 U.S.C. § 5324(a) provides:
(a) Domestic coin and currency transactions involving financial institutions.--No
person shall, for the purpose of evading the reporting requirements of section
5313(a) or 5325 or any regulation prescribed under any such section, the reporting
or recordkeeping requirements imposed by any order issued under section 5326, or
the recordkeeping requirements imposed by any regulation prescribed under section
21 of the Federal Deposit Insurance Act or section 123 of Public Law 91-508–
***
(2) cause or attempt to cause a domestic financial institution to file a report required
under section 5313(a) or 5325 or any regulation prescribed under any such section,
to file a report or to maintain a record required by any order issued under section
5326, or to maintain a record required pursuant to any regulation prescribed under
section 5326, or to maintain a record required pursuant to any regulation prescribed
under section 21 of the Federal Deposit Insurance Act or section 123 of Public Law
91-508, that contains a material omission or misstatement of fact;
23
31 U.S.C. § 5313(d)(2) provides:
Whoever violates this section while violating another law of the United States or as
part of a pattern of any illegal activity involving more than $100,000 in a 12-month
period shall be fined twice the amount provided in subsection (b)(3) or (c)(3) (as the
case may be) of section 3571 of title 18, United States Code, imprisoned for not
more than 10 years, or both.
47
We review de novo the sufficiency of evidence. Taylor, 480 F.3d at 1026.
In reviewing such a challenge, we view the “‘evidence in the light most favorable
to the Government, drawing all reasonable inferences and credibility choices in the
Government’s favor.’” United States v. Friske, 640 F.3d 1288, 1291 (11th Cir.
2011)(quoting United States v. Browne, 505 F.3d 1229, 1253 (11th Cir. 2007)).
The jury’s verdict “cannot be overturned if any reasonable construction of the
evidence would have allowed the jury to find the defendant guilty beyond a
reasonable doubt.” United States v. Herrera, 931 F.2d 761, 762 (11th Cir. 1991).
“‘The evidence need not exclude every reasonable hypothesis of innocence
or be wholly inconsistent with every conclusion except that of guilt, provided that
a reasonable trier of fact could find that the evidence established guilt beyond a
reasonable doubt.’” United States v. Schmitz, 634 F.3d 1247, 1259 (11th Cir.
2011) (quoting United States v. Robertson, 493 F.3d 1322, 1329 (11th Cir. 2007)).
A jury “is free to draw between reasonable interpretations of the evidence
presented at trial.” United States v. Flores, 572 F.3d 1254 (11th Cir. 2009).
“Credibility determinations are left to the jury and the jury’s verdict will not be
disturbed on appeal unless the testimony is ‘incredible as a matter of law.’” Id.(quoting United States v. Calderon, 127 F.3d 1314, 1325 (11th Cir. 1997)).
“The [BSA] and its accompanying regulations require banks and other
48
financial institutions to file a report with the government for any cash transactions
involving more than $10,000.” United States v. Vazquez, 53 F.3d 1216, 1218
(11th Cir. 1995); 31 U.S.C.A. § 5313(a); 31 C.F.R. § 103.22(b)(1) (2000). To
comply with the requirements, check-cashing stores, like La Bamba, must file a
CTR detailing these transactions with the IRS. 31 U.S.C. § 5313; 31 C.F.R. §
103.22 (2009).
It is illegal, according to § 5324(a)(2), for any person to “cause or attempt to
cause” a financial institution to file a report “that contains a material omission or
misstatement of fact.” “This anti-structuring law aims to prevent people from
either causing a bank to fail to file a required report or defeating the government’s
efforts to identify large cash transactions by splitting up a cash hoard in a manner
that avoids triggering a bank’s reporting requirements.” Vazquez, 53 F.3d at 1218(quotation and citation omitted).24
At trial, the District Court instructed the jury concerning what the evidence
24
The Supreme Court, in Ratzlaf v. United States, 510 U.S. 135, 114 S. Ct. 655, 126 L.
Ed. 2d 615 (1994), determined that the language of § 5324 on its own was not clear as to the
requisite level of knowledge required to violate the statute, therefore § 5322(a) also needed to be
consulted. The Court required that the government demonstrate proof of knowledge of illegality
before a defendant could be convicted. 510 U.S. at 137.
However, since Ratzlaf, Congress amended § 5324, and gave it “its own criminal penalty
provision so reliance on § 5322 is no longer necessary.” Vazquez, 53 F.3d at 1218 n. 2. “Thus,
the only mental state apparently required under the new penalty provision is a purpose to evade
the filing requirement.” Id.; see United States v. Zehrbach, 47 F.3d 1252, 1262 n.7 (3rd Cir.
1995) (stating “the only mental state that the Government must prove in prosecutions for
structuring is the purpose of having a financial institution not file a required report.”)
49
must have demonstrated, beyond a reasonable doubt, to convict Caro and the other
co-conspirators in Count One.
What the evidence in the case must show beyond a reasonable
doubt is:
First, that two or more persons in some way or manner came to
a mutual understanding to try to accomplish a common and unlawful
plan, as charged in the indictment;
Second, that the Defendant, knowing the unlawful purpose of
the plan, willfully joined in it;
Third, that one of the conspirators during the existence of the
conspiracy knowingly committed at least one of the methods or overt
acts described in the indictment;
And, fourth, that such overt act was knowingly committed at or
about the time alleged in an effort to carry out or accomplish some
object of the conspiracy.
An overt act is any transaction or event, even one which may be
entirely innocent when considered alone, but which is knowingly
committed by a conspirator in an effort to accomplish some object of
the conspiracy.
A person may become a member of a conspiracy without
knowing all of the details of the unlawful scheme and without
knowing who all of the other members are.
So if a defendant has a general understanding of the unlawful
purpose of the plan and knowingly and willfully joins in that plan on
one occasion, that is sufficient to convict that Defendant for
conspiracy, even though the Defendant did not participate before and
even though the Defendant played only a minor part.
(Dkt. 528, pgs 63-64). As to Counts Two through Seventeen the District Court
instructed the jury:
So the Defendants can be found guilty of the counts for which
they have been individually charged in Counts 2 through 17 of the
superseding indictment only if all of the following facts are proved
beyond a reasonable doubt with respect to each count:
First, that the Defendant had knowledge of the currency
50
transaction reporting requirements;
Second, that, with such knowledge, the Defendant knowingly
caused or attempted to cause a domestic financial institution to file a
currency transaction report that continued25 a material omission or a
misstatement of fact;
And, third, that the purpose of the false report was to evade the
transaction reporting requirements.
A statement is false when made if it is untrue and is then known
to be untrue by the person making it. It is not necessary to show,
however, that the Government agency was, in fact, deceived or
misled.
A material omission or a misstatement of fact is material if it
has natural tendency to affect or influence or is capable of affecting or
influencing the exercise of a Government function.
The test is whether the material omission or misstatement of
fact has the capacity to impair or pervert the functioning of a
governmental agency.
In other words, a material omission or a misstatement of fact is
material if it relates to an important fact as distinguished from some
unimportant or trivial detail.
Id. at 65-67. The District Court also gave the following instruction for Counts
Two through Seventeen.
So, in this case, with regard to Counts 2 through 17 of the
superseding indictment and insofar as the Defendants, Juan Rene
Caro, Alfredo Gonzalez and Jose Chaoui, are concerned, respectively,
if you have first found any of those Defendants guilty of the
conspiracy offense as charged in Count 1 of the superseding
indictment, you may also find that specific Defendant guilty of any of
the offenses charged in Counts 2 through 17, even though such
Defendant did not personally participate in such offense, if you find
beyond a reasonable doubt:
First, that the offense charged in such count was committed by
a conspirator during the existence of the conspiracy and in furtherance
25
The written instructions provided to the jury state “contained,” not “continued.” (Dkt.
397, pg. 17).
51
of its objects;
Second, that the Defendant under consideration was a knowing
and willful member of the conspiracy at the time of the commission of
such offense;
And, third, that the commission of such offense by a
co-conspirator was a reasonably foreseeable consequence of the
conspiracy.
Id. at 69.
As for Counts Eighteen through Thirty-Three, the District Court instructed
the jury in the following manner:
The same is true with regard to Counts 18 through 33 of the
superseding indictment insofar as Defendant Maytemar Corporation,
doing business as La Bamba Check Cashing, is concerned.
So La Bamba Check Cashing can be found guilty of Counts 18
through 33 only if all of the following facts are proved beyond a
reasonable doubt with respect to each count:
First, that La Bamba Check Cashing had knowledge of the
currency transaction reporting requirements;
Second, that, with such knowledge, La Bamba Check Cashing
willfully filed a currency transaction report that contains a material
omission or a misstatement of fact;
And, third, that the purpose of the false report was to evade the
transaction reporting requirements.
A statement is false when made if it is untrue and is then known
to be untrue by the person making it. It is not necessary to show,
however, that the Government agency was, in fact, deceived or
misled.
A material omission or a misstatement of fact is material if it
has a natural tendency to affect or influence or is capable of affecting
or influencing the exercise of a government function.
The test is whether the material omission or misstatement of
fact has the capacity to impair or pervert the functioning of a
governmental agency.
In other words, a material omission or a misstatement of fact is
material if it relates to an important fact as distinguished from some
52
unimportant or trivial detail.
Id. at 67-68.26
Caro maintains that La Bamba’s CTRs for Obispo were proper and
contained no omissions or misstatements in violation of the BSA because Obispo
acted as La Bamba’s agent. As for the remaining CTRs, Caro asserts that the
evidence failed to prove that he knew of the falsity of the CTRs.27
We reject Caro’s assertions, and conclude there was sufficient evidence for
his convictions. The government introduced evidence that Valle, a co-conspirator
and co-defendant, set up a number of shell companies through which he filed false
CTRs with La Bamba. There was also testimony that Caro referred individuals to
Valle to take advantage of his shell companies.
Other witnesses, including Dieppa and Agostinho, testified they used La
Bamba to cash checks through shell companies to avoid taxes. Marroquin, the
President of Spirit, testified that he never entered La Bamba, yet La Bamba filed
CTRs for millions of dollars that reported him as conducting the transactions.
Caro was far from an inactive participant in this scheme. In fact, testimony
26
Caro make no independent argument that these instructions incorrectly characterized
the elements of the offenses for which he was convicted.
27
Caro makes no claim that there was insufficient evidence for the jury to determine he
was not “violating another law” or took part in “a pattern of any illegal activity involving more
than $100,000 in a 12-month period,” as required by 31 U.S.C. § 5313(d)(2).
53
was presented that Caro promoted the scheme. Donadio testified he received the
name of the shell company, Mira, directly from Caro, and Caro specifically
instructed him to fax copies of checks payable to shell companies directly to La
Bamba, and that cash was then delivered to Donadio by Chaoui. Agostinho and
Rivera explained Caro instructed them to write checks to shell companies to avoid
paying taxes. Rivera testified to the same activity and identified Caro as one of the
individuals that cashed the checks. Dieppa testified that he agreed with Caro to
write checks to shell companies for a fee. Dieppa also testified that Caro prepared
and provided to him false invoices for shell companies to circumvent bank
scrutiny, and that Caro instructed Dieppa to switch from one shell company to
another.
In addition, the jury viewed undercover video footage of Caro engaged in a
variety of activities. For example, video footage captured Caro structuring
deposits to avoid bank detection, openly discussing with the confidential informant
whether companies that were cashing checks were fictitious, acknowledging that
the companies that were cashing checks were fictitious, and making comments
suggesting that he was seeking to evade law enforcement.
Furthermore, the jury had to look no further than to Caro’s own admission
that he knew of the illicit nature of the fictitious companies whose checks he
accepted from Obispo. Caro told Obispo he could not rely upon the
54
“miquimbines,” because they were not reliable.
Additionally, the jury could consider the material discovered at La Bamba.
Among the items found in La Bamba were client files containing forms and copies
of driver’s licenses and articles of incorporation for companies, including the
documents for PAW and other fictitious companies; training manuals on BSA
compliance and forms showing that such training had been conducted at La
Bamba; boxes of business cards for DJ and SNF; and envelopes for commissions
for recruiters, including one for Valle.
It was possible for the jury to view Caro’s lack of oversight of Becerra, in
her preparation of the CTRs, as his attempt to shield himself from an appearance of
impropriety as to La Bamba’s actions. Becerra was trained on the procedure for
filling out CTRs by Caro’s sister. Becerra was also sequestered away from
customers who were actually cashing checks. The jury could reasonably infer this
was done so Becerra could not correctly identify those taking part in the
transactions at La Bamba. While Chaoui was Becerra’s supervisor and signed all
of La Bamba’s CTRs, Caro’s statement to Obispo that he had done the job before
Chaoui’s arrival and knew more “about banks” than Chaoui contradicted this
contention.
Finally, Caro cannot avoid conviction by arguing someone else committed
the illegal acts rather than him. Regardless of whether Obispo acted as his agent,
55
the CTRs filed for these transactions by La Bamba contained material
misstatements for which Caro can be found guilty as an aider and abetter under 18
U.S.C. § 2, for causing someone to commit a criminal act on his behalf. Sufficient
evidence was adduced at trial that Caro actively participated in the filing, or
causing to be filed, false CTRs.
Contrary to Caro’s assertions, the evidence was more than sufficient to allow
a reasonable trier of fact to find that Caro purposely evaded the CTR filing
requirements by causing La Bamba to omit material information and causing La
Bamba to willfully file CTRs knowing that they contained material omissions or
misstatements of fact.
B. Infringement of Fifth and Sixth Amendment Rights
Caro contends the District Court erred in allowing certain evidence and
testimony at trial. The cumulative effect of all these errors, according to Caro,
resulted in him receiving an unfair trial.
1. Expert Testimony
Caro argues that the District Court impermissibly allowed government
expert witness Djinis to testify regarding a MSB and the BSA obligations. Caro
filed a Motion in Limine directed at this testimony and objected to it during trial.
After listening to the argument of counsel, the District Court allowed the testimony
to be admitted explaining that Fed. R. Evid. 704 permitted an expert witness to
56
testify about an ultimate issue in the case, but not that an action was intentional.
This testimony failed, according to Caro, to take into account the actual business
practices of check-cashers and led the jury to believe they had a higher burden of
compliance with the BSA than the law imposed.
We review rulings on the admissibility of expert testimony for abuse of
discretion. Allison v. McGhan Medical Corp., 184 F.3d 1300, 1306 (11th Cir.
1999)(citing General Elec. Co. v. Joiner, 522 U.S. 136, 142-43, 118 S.Ct. 512, 139
L.Ed.2d 508 (1997)). “This deferential standard is not relaxed even though a
ruling on the admissibility of expert evidence may be outcome-determinative.” Id.An expert may offer opinion testimony on an ultimate issue of fact, Fed. R. Evid.
704, although “[a]n expert may not, however, merely tell the jury what result to
reach.” Montgomery v. Aetna Cas. & Sur. Co., 898 F.2d 1537, 1541 (11th Cir.
1990).
There was no abuse of discretion in allowing this testimony. Djinis was the
former deputy director of FinCEN, the agency that collects CTRs, compiles them
for law enforcement, and provides advice to companies on how to comply with the
BSA requirements. Djinis testified as to the content and purposes of the BSA, and
the CTR obligations of domestic financial institutions. This was not, as Caro
suggests, a witness inappropriately instructing the jury on the law applicable to the
case.
57
Furthermore, the District Court specifically instructed the jury that they had
heard testimony from experts, including Djinis, and that simply because a witness
has given an opinion, the jury was not bound to accept that opinion. (Dkt. 528, pg.
56). It was up to the jury to decide whether to rely upon that testimony. Id. The
jury was, therefore, free to reject Djinis’ conclusions.
2. Cross-Examination of Defense Experts
Caro contends the District Court erred when it permitted the government to
question defense witness Tillman about his violation of the sequestration rule and
defense witness Diaz-Yabor about his prior felony conviction that was nearly
three-decades old.
a. Tillman Sequestration
Caro contends the District Court improperly instructed the jury that it could
consider that defense expert Tillman violated the rule of sequestration by
reviewing the government witnesses’ testimony; while other witnesses had been
barred from doing so.
Ralph Tillman, a former IRS agent, was called by Chaoui as an expert in the
area of the BSA. (Dkt. 518, pg. 220). After being certified as an expert, defense
counsel Garvin began questioning Tillman about his preparation for formulating an
opinion about the CTRs filed by La Bamba. Id. at 222. Tillman was asked if, in
this preparation, he had reviewed the trial testimony of Miguel Obispo, Elaine
58
Becerra, and Peter Djinis. Id. at 222-23.
Thereupon, the government asked for a side-bar where it was explained that
Tillman had reviewed transcripts from the trial. The government moved to strike
Tillman’s testimony, and disqualify him for a violation of the rule of
sequestration.28 After listening to argument of counsel, the District Court found a
violation of the sequestration rule, but one that was neither intentional nor in bad
faith. (Dkt. 519, pg. 21). Relying upon United States v. Diaz, 248 F.3d 1065,
1104 (11th Cir. 2001), the District Court denied the government’s motion, but
allowed the government to question Tillman regarding the “nature of the
violation.” (Dkt. 519, pg. 22). The District Court also indicated that the jury
might be instructed at the close of the trial that they could consider Tillman’s
review of the testimony in evaluating his testimony. Id. During cross-
examination, the government questioned Tillman about the violation of the
sequestration rule. (Dkt. 519, pgs. 67-68).
At the close of the trial, the District Court instructed the jury, “[y]ou also
heard testimony that Ralph Tillman reviewed transcripts of previous testimony
provided during this trial while other witnesses were instructed not to do so. In
evaluating Mr. Tillman’s testimony, you may consider the fact that he reviewed
28
The rule of sequestration, from Fed.R.Evid. 615, provides that at the request of a
party, the court must order witnesses who will be testifying excluded from the proceedings so
that they cannot hear the testimony of the other witnesses.
59
transcripts of previous testimony before testifying.” (Dkt. 528, pg. 56). Earlier
during the charging conference, the parties discussed this instruction with the
Court, (Dkt. 521, pgs. 27-28), and after the District Court read the final proposed
instruction there was no objection.
“‘[I]t is a cardinal rule of appellate review that a party may not challenge as
error a ruling or other trial proceeding invited by that party.’” United States v.
Silvestri, 409 F.3d 1311, 1327-1328 (11th Cir. 2005)(citing United States v. Ross,
131 F.3d 970, 988 (11th Cir.1997)). The invited error doctrine “‘is implicated
when a party induces or invites the District Court into making an error.’” Id. (citing
United States v. Stone, 139 F.3d 822, 838 (11th Cir.1998)). “Where invited error
exists, it precludes a court from invoking the plain error rule and reversing.” Id.(citing Ford ex rel. Estate of Ford v. Garcia, 289 F.3d 1283, 1294 (11th Cir.
2002)). Neither Caro, nor any other defendant, objected to the instruction.29
29
In the Reply Brief, Caro maintains that the defendants did, in fact, object to this jury
instruction. However, the record belies such an assertion. When the expert witness instruction
was addressed, during the charge conference, defense counsel Garvin stated,
Your Honor, our position is that, while we request strictly the pattern instruction
without the third paragraph [the one discussing the sequestration violation], if the
Court is so inclined to give a third paragraph, that the third paragraph in our
proposed instruction be given as opposed to the third paragraph in the Government’s.
(Dkt. 521, pg. 24). Thereupon the District Court presented possible language for the instruction.
Garvin once again expressed his concern,
Your Honor, while that is certainly better from Defendant Chaoui’s point of
view than what was proposed by the Government, the problem here is that, without
an expansion that it was unintentional, it makes it seem like Mr. Tillman was
60
Therefore, we need not review it. Moreover, even if we were to consider the
District Court’s jury instruction, such an instruction was not a misstatement of the
law and the District Court was completely within its discretion to craft the wording
employed. United States v. Jimenez, 780 F.2d 975, 981 (11th Cir.
1986)(concluding the district court “adequately responded to the possibility of
prejudice by specifically instructing the jury” that a violation of the sequestration
rule had occurred, and that violation could be used in evaluating the credibility of
the witness.). See also United States v. Campa, 529 F.3d 980, 992 (11th Cir.
2008)(stating that jury instructions are reviewed de novo as to whether they
misstate the law, but the District Court is given wide latitude in crafting the
language of the instruction).
b. Diaz-Yabor Conviction
Caro maintains the District Court improperly allowed the government to
purposely playing, for lack of a better term, fast and loose with the rules.
And on cross-examination, the Government did cross-examine him, I
thought, for a significant period of time on this issue.
(Dkt. 521, pg. 26). Defense Counsel Garvin then again requested the word
“unintentional” be placed in the instruction. Id.After more discussion, the District Court suggested this language: “You also heard
testimony that Ralph Tillman reviewed transcripts of previous testimony provided during this
trial while other witnesses were instructed not to do so. In evaluating Mr. Tillman’s testimony,
you may consider the fact that he reviewed transcripts of previous testimony before testifying.”
(Dkt. 521, pg. 27). Thereupon, defense counsel Garvin stated, “We have no objection to that;”
counsel for La Bamba stated, “No objection, your Honor;” and counsel for Caro stated, “No
objection, your Honor.” (Id. at 27-28).
61
question Martin Diaz-Yabor, Caro’s construction industry expert, about a 27-year-
old felony conviction. Caro insists that the government failed to give the requisite
notice as required by Federal Rule of Evidence 609(b) prior to utilizing the
conviction. Caro insists the impeachment of this expert was of critical importance
because Diaz-Yabor would be testifying concerning “the real world business and
regulatory environment.” (Blue Brief, pg. 68).
Diaz-Yabor was called as a witness by Caro. After introductory questions,
Diaz-Yabor was asked about his educational background. During questioning by
the government, however, Diaz-Yabor admitted to a felony conviction from when
he was eighteen or twenty years old.
Caro moved for a mistrial for the government’s improper impeachment of
the witness through the use of a conviction more than ten years old.30
30
In denying the motion, the District Court summarized the circumstances giving rise to
the motion:
On December 19, 2008, Defendant Juan Rene Caro called Martin Diaz-Yabor as
an expert witness on the ordinary and customary business practices within South
Florida’s construction industry . . . . In certifying Mr. Diaz-Yabor as an expert,
Defendant relied in part on Mr. Diaz-Yabor’s educational background. Mr.
Diaz-Yabor’s resume provided by Defendants did not list dates next to his college
degrees.
****
After Defendant tendered him as an expert witness, the government was allowed to
voir dire Mr. Diaz-Yabor. (Id. at 6.) The government prosecutor, Wilfredo
Fernandez, began his voir dire by asking Mr. Diaz-Yabor about his resume and the
undated educational background listed thereon. In response to the government’s
62
questioning, Mr. Diaz-Yabor stated that he received a bachelor’s degree in
accounting and finance from Troy State University in 1985. The following exchange
then occurred between the witness and Mr. Fernandez:
MR. FERNANDEZ: When did you attend -- when did you start at the University of
Miami?
THE WITNESS: 1976
MR. FERNANDEZ: And when did you get your degree from the University of
Miami?
THE WITNESS: 1981, ‘89, ‘92, I believe, in that order.
MR. FERNANDEZ: What did you do from 1981 to 1985?
THE WITNESS: What did I do?
MR. FERNANDEZ: Yes.
THE WITNESS: I -- let’s see. 1981 to 1980 --
MR. FERNANDEZ: No. That would be backwards. 1981 to 1985.
THE WITNESS: 1981, I was in -- I was up in Alabama.
MR. FERNANDEZ: In Alabama?
THE WITNESS: Yes.
MR. FERNANDEZ: I’m sorry. I’m not following you. When did you start at Troy
State?
THE WITNESS: Around 1982 or ‘83.
MR. FERNANDEZ: And when did you graduate from Troy State?
THE WITNESS: 1985.
MR. FERNANDEZ: Then when did you go to the University of Miami?
THE WITNESS: 1976 to ‘81.
MR. FERNANDEZ: So you were both attending the University of Miami and Troy
State?
THE WITNESS: No, sir. 1976 to 1981, I went to the University of Miami.
MR. FERNANDEZ: And --
THE WITNESS: Okay. 1976 to 1980, I was enrolled as a bachelor -- going for a
bachelor’s of fine arts in graphic and industrial design.
MR. FERNANDEZ: Okay.
THE WITNESS: After I did my bachelor’s in science in accounting and finance.
[sic] 1989, I came back. I had sufficient credits because I was a double major at the
University of Miami from 1988. I completed my bachelor’s in architecture and
continued into my master’s in architecture and graduated from the master’s in
architecture in 1992.
MR. FERNANDEZ: What did you do during the time period between finishing at
Troy State and finishing at the University of Miami?
THE WITNESS: I was studying for -- and out in the field studying and working in
the construction industry.
MR. FERNANDEZ: Where was that?
THE WITNESS: Here in Miami, in Florida.
63
Later, during cross-examination, Mr. Fernandez revisited the chronology of the
witness’s educational background:
MR. FERNANDEZ: You attended Troy State University in Montgomery, Alabama,
from what year to what year?
THE WITNESS: I believe it was ‘83 to ‘85.
MR. FERNANDEZ: And where did you live when you were attending Troy State?
THE WITNESS: I lived in --
MR. FERNANDEZ: You don’t have to give me the address.
THE WITNESS: -- in Montgomery
MR. FERNANDEZ: Did you live in a dorm with -- at the university?
THE WITNESS: Yes. Kind of.
MR. FERNANDEZ: What do you mean?
THE WITNESS: I was in Montgomery, Alabama, in the Air Force station there.
MR. FERNANDEZ: What were you doing in the Air Force station?
THE WITNESS: I was in a -- in a camp.
MR. FERNANDEZ: What kind of camp?
THE WITNESS: A federal camp.
MR. FERNANDEZ: What kind of federal camp?
THE WITNESS: A federal camp, a federal prison camp.
MR. FERNANDEZ: It was a prison camp, was it not?
THE WITNESS: Yes, sir.
MR. FERNANDEZ: Why were you in the prison camp?
THE WITNESS: I did a boo-boo when I was 18, 20 years old. I mean I -- something
stupid when you’re a kid.
MR. FERNANDEZ: And when you say “boo-boo,” do you mean conspiracy to
traffic in cocaine?
THE WITNESS: That’s correct.
MR. FERNANDEZ: And how many years were you sentenced to?
THE WITNESS: Ten.
MR. FERNANDEZ: And that’s when you went -- you were attending Troy State
while in prison. Correct?
THE WITNESS: That’s correct.
MR. FERNANDEZ: And you were arrested subsequent to that, were you not?
THE WITNESS: It was from the same case
MR. FERNANDEZ: Or --
THE WITNESS: From -- from being in Montgomery. I’m sorry.
MR. FERNANDEZ: Well, actually, you were arrested in Tallahassee for possession
of marijuana. Wasn’t that --
THE WITNESS: No. That was -- came from Montgomery when I was there. It was
-- the guy that was there and -- kind of did a setup. And that’s why I was -- the judge
actually excused me -- well, he didn’t give me a -- you know, a real harsh sentence
64
Ultimately, the District Court concluded that Rule 609(b) and its time
limitations on prior convictions did not apply. Id. at 9. Rather, this impeachment
evidence fell under Rules 402 and 403, and there are no time limitations applicable
here. Id.31 The District Court further concluded, “this evidence was highly
because he understood that. But what is this relevant to the case, this case?
MR. FERNANDEZ: I’m asking you about your background because you were -- I
found you evasive.
THE WITNESS: We all make mistakes. I mean, it’s nothing --
MR. FERNANDEZ: Absolutely. But among your areas of expertise, we can now
include conspiracy in that, would we not?
THE WITNESS: Wait a minute. I don’t think so, sir. I think that from that time on,
it’s very clear that I have gone into society, I have done what I have done. I got my
degrees, my license, I practiced with integrity and honesty. And you can check
everything else you want. And I don’t have anything to hide.
MR. FERNANDEZ: Okay. I was just concerned because there was no dates on the
resume. Is it fair to say --
THE WITNESS: No. There are dates in the resume.
MR. FERNANDEZ: Not regarding your education.
THE WITNESS: Yes, sir, they are.
MR. FERNANDEZ: Okay. Let me -- Can you put up the ELMO for me, Judge?
THE COURT: Yes. It’s on.
(Dkt. 356, pgs. 2-5).
31
The District Court explained the government’s justification for the use of the
conviction:
[T]he government denies that it knew ahead of time that Mr. Diaz-Yabor had a prior
criminal conviction. Instead, the government contends that it thought that the
criminal history report it had pulled up on Martin Augusto Diaz, a/k/a Martin Diaz,
a/ka [sic] Martin A. Diaz, a/ka [sic] Martin Diaz-Yaber was another person, and the
prosecutor was only alerted that this might be the same person as Mr. Diaz-Yabor
after he was evasive during questioning of his educational background. Further, the
government contends that Mr. Diaz-Yabor’s testimony is essentially irrelevant, that
the defense waived any objection to the government’s questioning of Mr. Diaz-
Yabor’s background by failing to object at the time, that the government’s
questioning of Mr. Diaz-Yabor regarding his criminal history was brief and was
limited to addressing his honesty and credibility, and that any harm to the defense
65
probative of Mr. Diaz-Yabor’s educational background and work experience, two
of the indicium forming the basis of his expert opinion. Further, any prejudicial
effect on Defendants was minor.” Id. at 12.
We review a district court’s decision “to admit evidence of prior convictions
pursuant to Rule 609” for an abuse of discretion. United States v. Pritchard, 973
F.2d 905, 908 (11th Cir. 1992). “‘[E]videntiary and other non-constitutional errors
do not constitute grounds for reversal unless there is a reasonable likelihood that
they affected the defendant’s substantial rights; where an error had no substantial
influence on the outcome, and sufficient evidence uninfected by error supports the
verdict, reversal is not warranted.’” United States v. Christopher, 923 F.2d 1545,
1550 (11th Cir. 1991) (quoting United States v. Hawkins, 905 F.2d 1489, 1493
(11th Cir.1990)).
Under Fed. R. Evid. 609, a witness, other than the defendant, may be
impeached with a prior conviction if the crime was punishable by more than one
year of imprisonment. Fed. R. Evid. 609(a)(1). Evidence of convictions more than
10 years ago, however, are not admissible unless the court determines that the
probative value of the conviction substantially outweighs its prejudicial effect and
through Mr. Diaz-Yabor’s impeachment is minor and can be cured by a limiting
instruction by the Court.
(Dkt. 356, pg. 8).
66
the “adverse party is given sufficient written notice of intent to use such evidence
to provide the adverse party with a fair opportunity to contest the use of such
evidence.” Fed. R. Evid. 609(b).
“This circuit has held that a presumption exists against the use of prior crime
impeachment evidence over ten years old and that such convictions ‘will be
admitted very rarely and only in exceptional circumstances.’” United States v.
Tisdale, 817 F.2d 1552, 1555 (11th Cir. 1987) (quoting United States v. Cathey,
591 F.2d 268, 275 (5th Cir.1979)). To determine whether exceptional
circumstances are present, the district court “must consider whether the witness has
already been impeached, and if so, the probative value of the prior conviction
decreases accordingly.” Id. (quotation and citation omitted).
We observe there was no timely contemporaneous objection by Caro to this
testimony.32 Accordingly, we conclude that Caro has waived this issue by failing
to raise an objection pursuant to Fed. R. Evid. 103. See United States v.
Blackshear, 568 F.2d 1120, 1121-22 (5th Cir. 1978) (finding lack of timely,
specific objection waived noncompliance with Rule 609).33
Nevertheless, even assuming, arguendo, this issue was not waived, it was
32
Diaz-Yabor testified on December 19, 2008. No objection to this testimony was filed
until Caro’s Motion for Mistrial filed on December 26, 2008. (Dkt. 356).
33
We have adopted as binding precedent the decisions of the Fifth Circuit rendered prior
to October 1, 1981. Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981)(en banc).
67
harmless. The weight of the evidence against Caro, which included his own
statements, the statements of his co-conspirators, was more than sufficient to
convict him. Moreover, Diaz-Yabor’s testimony which essentially argued that all
the other construction companies were doing this type of activity is no defense at
all to the charges. In fact, such testimony contradicted the other testimony about
Caro’s actions. The jury was free to disregard Diaz-Yabor’s testimony as they so
chose.
3. Exclusion of Testimony
The District Court, according to Caro, erroneously sustained a government
objection to questions posed during cross-examination of Marvin Marroquin, a
government witness. Marroquin, Spirit’s President, was asked whether he, Obispo,
and Alfred Ortega discussed the presence of OSHA inspectors at a construction site
under Spirit’s insurance certificate. (Dkt. 556, pgs. 85-86). This testimony,
according to Caro, would have supported the reasonable suggestion that the
companies he was dealing with were not merely shell corporations but actual
construction corporations, and should not have been excluded. The exclusion of
this testimony bolstered the government’s “otherwise unsupported deliberate
ignorance theory.”34
34
In his brief, Caro states that the “District Court also erred in admitting extraneous,
prejudicial evidence concerning the government informant’s criminal activities predating the
68
During cross-examination, Caro’s counsel repeatedly sought to ask
Marroquin about OSHA inspectors at job sites that Spirit was associated with.
During a sidebar, Caro’s counsel argued this testimony was admissible because the
government opened the door by asking Marroquin about Spirit’s fictitious nature.
(Dkt. 556, pg. 88). This testimony, according to counsel, would have tended to
show that Spirit was engaged in legitimate business activities. Id.When asked by the District Court why this testimony was not hearsay,
Caro’s counsel attempted to justify the questions multiple ways. Id. at 88. First,
counsel asserted it was not hearsay because it was part of a recorded conversation.
Id. Second, counsel suggested the entire conversation should be admitted under
Rule 801(d)(2)(E). Id. at 89. Finally, counsel argued the statements were not
being admitted for the truth of the matter asserted, id. at 90, but rather to show the
effect upon the listener, Marroquin. Id. at 92.
Ultimately, the District Court excluded the testimony and explained it was
“not relevant. Not probative of any defense concerning any of the Defendants.
There’s been no indication of any nexus of these conversations that would relate to
the Defendants’ knowledge or lack of knowledge as to what Spirit Construction
indictment period, other government investigations of La Bamba not involving the charges
against Caro, and unredacted, misleading corporate records concerning their active status.”
(Blue Brief, pg. 69). These “catch-all” objections lack specificity and are not plainly presented,
and accordingly, they will not be addressed. United States v. Jernigan, 341 F.3d 1273, 1284 n.8
(11th Cir. 2003).
69
did or did not. And it’s hearsay.” Id. at 94-95.
We review a District Court’s evidentiary ruling for an abuse of discretion.
United States v. Magluta, 418 F.3d 1166, 1177 (11th Cir. 2005). A district court’s
decision on evidentiary rulings will only be reversed if “the resulting error affected
the defendant’s substantial rights.” United States v. Dodds, 347 F.3d 893, 897
(11th Cir. 2003). The District Court held that Caro had not shown any connection
between the potential appearance of OSHA inspectors at Spirit’s job sites and
Caro’s knowledge or lack thereof. This ruling was not an abuse of discretion.
Interestingly, Caro does not now argue that this testimony was not hearsay.35
Instead, he maintains that this excluded evidence bolstered the government’s
unsupported deliberate ignorance theory. Such an assertion is belied by the
evidence against Caro, including Marroquin’s own testimony. Marroquin, Spirit’s
President, had previously testified that Spirit was created not for construction
work, but for the sole purpose of cashing checks to evade taxes.
The fact that OSHA inspectors may have come by does not alter the
testimony that Spirit was a shell company and not involved in actual construction.
Spirit was still a registered corporation in Florida but that does not mean that they
were in the actual construction business. The testimony shows that they were
35
Fed. R. Evid. 801(d)(2) provides that the statement being offered must be offered
against a party to qualify under 801(d)(2)(E).
70
supposed to appear as a legitimate construction company so OSHA inspectors
coming by would not change its character.
4. Defendant’s Closing Argument
Caro maintains that in striking certain portions of the defense closing
argument, the District Court “[f]ailed to accurately explain the extent of its ruling
and thus left it to the jury to determine how much of the defense closing it would
consider.” (Blue Brief, pg. 70). Caro, further, contends that the striking of this
argument was particularly harmful because this “evidence that was to be addressed
and explained away by defense counsel improperly appeared in the jury room and
played a role in deliberations.” Id.36
During closing argument, Caro’s counsel made the following argument:
Another red herring was the checks from Carlos Benitez. Again,
Mr. Obispo said that the checks from Carlos Benitez were Medicare
fraud checks. Well, let’s look at these checks. This is Exhibit 486
from the Government.
(Dkt. 527, pg. 38). The government objected claiming that it had been precluded
from presenting evidence of Caro’s other ongoing criminal investigations by the
District Court’s ruling on a Motion in Limine, the defense was arguing that
evidence in closing. Id. at 39.
The District Court sustained the objection and instructed the jury in the
36
This portion of the argument will be addressed infra.
71
following manner: “I have struck the last few portions of the statements made by
Mr. Black. He’s been instructed to go into another area. You are to disregard any
statements in this area.” Id. at 47. This instruction, according to Caro, lacks
specificity and created the risk that the jury disregarded more of the argument than
necessary.
A District Court “has broad discretion over the scope of closing argument.”
United States v. Gaines, 690 F.2d 849, 858 (11th Cir.1982). “Absent a showing of
an abuse of discretion the district court will not be reversed for limiting summation
as long as the defendant has the opportunity to make all legally tenable arguments
that are supported by the facts of the case.” Id.We must be clear. Caro is not arguing that he should have been permitted to
continue his argument or that the District Court erred in limiting his closing
argument. Instead, Caro’s contention is that the language of the limiting
instruction left the jury without sufficient guidance on the amount of the closing
argument to disregard.
Under the invited error doctrine, however, we will not consider an argument
on appeal when the party making the argument invited or induced the district court
into making the alleged error. United States v. Love, 449 F.3d 1154, 1157 (11th
Cir. 2006). Here, Caro committed the error by making an improper argument
72
during closing. Then, once the District Court acted to correct this error, Caro had
no objection to the curative instruction.
Moreover, the record reflects the sound exercise of discretion by the District
Court. Evidence of other criminal investigations into Caro had previously been
excluded from the trial, and it was not error to keep this from the jury. Finally,
there is no question that this isolated instruction from the District Court did not
render Caro’s trial unfair.
5. Comment on Silence
Caro asserts that the government elicited testimony from Obispo that
compromised his right to remain silent. The following exchange occurred during
the government’s direct examination of Obispo:
Q. And he goes on to say on Page 16, Line 8, “Not counting the
strange people.”
What did you understand the reference to the “strange people” to
mean?
A. Fictitious corporations.
Q. You asked Mr. Caro, “But you also have strange people, and that’s
worth something,” to which Mr. Caro responds, “No, Migue. I no
longer have anything.” And what did you understand that to mean?
A. Well, I tell you what I understand and what I do not understand. I
understand that he’s telling me that he doesn’t have these corporations
in his -- or within his business. But on the other hand, I understand
that he accepted the fictitious companies -- corporations I bring in to
him.
Q. And how so?
A. He knows that all the corporations we were cashing checks for are
fictitious corporations. About that, there’s no -- well, I mean, I don’t
73
have the least doubt about that. Well, if he claims that DJ is a legit
corporation -- that may be one that he may mention – I would say it’s
not a --
(Dkt. 552, pgs. 78-79).37
At sidebar, Caro’s counsel argued this was a comment on Caro’s right to
remain silent. Id. at 79.38 The government responded that Obispo was simply
commenting on the conversation on the tape recording. Id. at 80.
The District Court directed the government’s attorney to clear up any
ambiguity with the next question, id., and that was done. The next question and
answer given were:
Q. Mr. Obispo, referring you back to Page 17, what did you
understand Mr. Caro to mean when he told you, “I no” -- I’m on Line
12 -- “I no longer have anything”? What was he referring to in this
conversation?
A. He’s making reference to the fact that within his own corporation
no shell companies or corporations are in operation.
Id. at 81.
To determine if there has been an impermissible comment on a defendant’s
right not to testify at trial, “the district court must consider, whether the statement
was manifestly intended or was of such character that a jury would naturally and
37
This passage concerns a conversation between Caro and Obispo, where Obispo was
explaining Caro’s reference to “strange people” as a reference to the fictitious corporations and
that Caro’s statement, “I no longer have anything” was Caro’s attempt to disassociate himself
from these corporations.
38
Caro did not move for a mistrial based on the comment.
74
necessarily take it to be a comment on the failure of an accused to testify.” United
States v. Chastain, 198 F.3d 1338, 1351 (11th Cir. 1999). In determining the
appropriateness of the statement, “the court must consider the circumstances in
which the statement was made.” Id.This testimony by Obispo was not a comment on Defendant’s right to
remain silent, and the District Court cleared up any ambiguities by requiring the
government to ask Obispo a follow-up question.
6. Government Misconduct
Throughout the trial, according to Caro, the government engaged in conduct
that inappropriately focused the jury’s attention away from the facts of the case and
onto character assassination of defense counsel, Caro and Caro’s family. Caro
asserts that these “prosecutorial excesses” denied him a fair trial. (Blue Brief, pg.
72).
We review claims of prosecutorial misconduct de novo because they involve
mixed questions of law and fact. United States v. Noriega, 117 F.3d 1206, 1218
(11th Cir. 1997). “To establish prosecutorial misconduct, ‘(1) the remarks must be
improper, and (2) the remarks must prejudicially affect the substantial rights of the
defendant.’” Eckhardt, 466 F.3d at 947 (quoting United States v. Eyster, 948 F.2d
1196, 1206 (11th Cir.1991)). The substantial rights of a defendant are
75
“prejudicially affected when a reasonable probability arises that, but for the
remarks, the outcome of the trial would have been different.” Id. (citing United
States v. Wilson, 149 F.3d 1298, 1301 (11th Cir.1998)). Nevertheless, if the
record reveals “sufficient independent evidence of guilt,” the prosecutorial error
may be harmless. United States v. Adams, 74 F.3d 1093, 1097–98 (11th
Cir.1996).
While lengthy, we consider it necessary to review each of the alleged acts of
impropriety. Below are the comments Caro complains of from the record.39 Some
of these comments are made during argument and others during objections. Caro
also complains about other remarks made outside of the presence of the jury, but
we need not address these as they would not have impacted the jury’s verdict.
Below are the statements, which are delineated in “a through fff,” as reflected in
the initial and reply briefs:40
a. During the cross-examination of Gonzalez by Grimberg, the government
asks the following question:
Whether you physically prepared the CTRs or not, Mr.
Gonzalez, you told the agents that you knew that this is how it was
being done.
39
Caro points to allegedly improper comment in both the initial and reply briefs. We
address all the comments Caro mentions.
40
For reference in these quotes, Messrs. Fernandez and Grimberg represent the
government.
76
You told them that you knew that the individuals identified in
the CTRs were not the individuals coming in to cash those checks.
You told them that, didn’t you?
(Dkt. 343, pg. 258).
b. This exchange occurred outside the presence of the jury. (Dkt. 343, pg.
263).
c. The government asked Agostinho this question: “Now, when Yuri came
back after meeting with Mr. Caro, did he have a company that he now
miraculously worked for?” Defense counsel interposed an objection and the
question was withdrawn. (Dkt. 558, pgs. 173-74).
d. During the cross-examination of Diaz-Yabor, the District Court hearing
argument on an objection. The government stated, “That’s the real issue in the
case, Judge.” (Dkt. 564, pg. 71).
e. Caro cites to a portion of the record, (Dkt. 344, pgs. 122-23), that does
not exist. This transcript (Dkt. 344) only includes pages 1-24.
f. Caro cites to a portion of the record, (Dkt. 345, pg. 149), that does not
exist. This transcript (Dkt. 345) only includes pages 1-38.
g. During rebuttal argument to the jury, the government stated:
the day before that this was some sort of competitive event, that I was
here to win at all costs.
77
This isn’t a football game. I am not an attorney for hire. I am a
prosecutor who is presenting in a court of law the evidence that the
Judge admits and that is presented to the jury and the jury decides
whether someone’s guilty or not guilty.
And the suggestion that there’s going to be a big parade in my
honor when I win this is spurious, to be quite candid with you.
But having said that, I want to walk with you through some of
the statements that were made by the defense counsel in the last two
days and remind you of some of the evidence that contradicts those
statements.
The fact that I did a PowerPoint to present my evidence in an
organized and quick manner seemed to have aggravated some of the
attorneys. So I did another one.
(Dkt. 528, pg. 6).
h. Again during rebuttal argument the government stated:
To suggest somehow that I, you know, tampered with the
evidence in some way by preparing witnesses for testimony is
disingenuous. Everybody does it, and it’s correct. That’s what you’re
supposed to do.
Imagine coming in here -- this trial would have been six months
with me on all fours, looking through boxes, trying to find the
evidence, “And so what happened next?”, “And so you like working
at La Bamba?”
This would have gone on till February. So there’s nothing
wrong with meeting with witnesses.
And when I cross-examine my witnesses and prepare them for
cross-examination, I’m doing so so [sic] that they know what to
expect, what -- the questions that they think need to be responded to.
78
It’s what their memory is. It’s what they saw, observed, heard.
That’s what they can testify to, not what I want them to testify to, but
what they remember.
There’s been all sorts of sprinkled -- I don’t know where this
came up in this case, the suggestion that all the bad things happened
on Friday at La Bamba.
(Dkt. 528, pg. 47-48).
i. The following exchange occurred during the direct examination of
Becerra:
BY MR. FERNANDEZ:
Q. Ms. Becerra, is this the first time you’ve testified in a court?
A. Yes.
Q. I noticed that several members of the Defendants’ families are here
to listen to your testimony. Does that make you uncomfortable at all?
MR. HERNANDEZ: Judge, I object to this.
THE COURT: Sustained.
MR. HERNANDEZ: I ask to strike.
THE COURT: The jury is instructed to disregard the last question.
MR. FERNANDEZ: I was going to ask if she wanted permission to
clear the courtroom, Judge, if she’s uncomfortable.
MR. ALTER: I object to that, Judge.
THE COURT: Just go ahead.
MR. ALTER: The prosecutor knows better than these stunts.
THE COURT: Just ask your questions,
(Dkt. 559, pgs. 143-44).
j. This discussion occurred out of the presence of the jury when defense
counsel sought a mistrial. (Dkt. 559, pgs. 171-79).
k. During the cross examination of Becerra, the government repeatedly
objected to a question about what time Caro finished work at La Bamba at night.
79
After attempting to rephrase a question a number of different ways, the government
objected in the following manner:
MR. FERNANDEZ: Wow. Objection. It’s the exact same
question we asked five minutes ago.
THE COURT: Sustained.
MR. HERNANDEZ: Is the Court’s ruling that I’m not –that this
is irrelevant to the overall structure of the business? And then I will
go move on to another area.
(Dkt. 560, pgs. 71).
l. The following exchange occurred during the cross examination of
Jenkins:
Q. And you would agree that this is an example of at least an attempt
to be in compliance with the law. Is that correct?
MR. FERNANDEZ: Objection, Judge.
THE COURT: Sustained.
BY MR. HERNANDEZ:
Q. You would agree that that [sic] is a demonstration of La Bamba
wanting to be in compliance?
MR. FERNANDEZ: Good grief. Objection.
THE COURT: Sustained.
(Dkt. 562, pg 115).
m. Caro cites to a portion of the record, (Dkt. 347, pg. 107), that does not
exist. This transcript (Dkt. 347) only includes pages 1-101.
n. The cross examination of Chaoui began in the following manner:
BY MR. HERNANDEZ:
Q. Mr. Chaoui, good afternoon.
A. How are you?
Q. I’m good. Thank you.
You were hired in August of 2005. Right?
80
A. Yes. Yes.
Q. And you indicated on direct examination that
you’d spent 25 years in the banking industry?
A. Yes.
Q. I assume you’re proud of your work when you were
in the banking industry.
A. I would hope so.
Q. You learned a lot?
A. Possibly. Yes.
Q. Did you consider yourself a thoroughly trained
individual in the profession of banking after 25 years?
A. In certain fields more than others, yes.
Q. And did you share -- do you share the opinion of
all of those people who came in here and talked about
your work ethic? Do you consider yourself a
hardworking person?
(Dkt. 346, pg. 118).
o. This portion of the record contains nothing objectionable. (Dkt. 346, pg.
76).
p. Caro cites to a portion of the record, (Dkt. 344, pgs. 30-33), that does not
exist. This transcript (Dkt. 344) only includes pages 1-24.
q. The following questions and answers are from the government’s cross
examination of Chaoui:
Q. Okay. Now, you were arrested almost a year ago.
Correct?
A. Yes, sir.
Q. And you have had a year to sort of think about this case. Is that fair
to say?
A. Absolutely, sir.
81
Q. And you’ve reviewed the evidence in this case both with your
attorney and with your brother-in-law, who is an attorney. Correct?
A. Yes, sir.
Q. You’ve reviewed the undercover tapes that pertain to you?
A. Yes.
Q. You’ve reviewed other undercover tapes as well?
A. Yes. I believe there has been others, yes, where I believe my name
was mentioned or they stated that it was referenced.
Q. You’ve reviewed the index that has 493 undercover recordings, the
date they were recorded and the people talking on the tapes. Correct?
A. Yes, sir.
Q. And you’ve reviewed most, if not all, of the hundreds of boxes of
records seized in the search warrant.
(Dkt. 347, pg. 64).
r. The government objected to a Caro’s closing argument as follows: “MR.
FERNANDEZ: Objection, Judge. That completely assumes facts that were not in
evidence.” (Dkt. 526, pg. 212).
s. Caro cites to a portion of the record, (Dkt. 344, pgs. 123-24), that does
not exist. This transcript (Dkt. 344) only includes pages 1-24.
t. The government stated the following during closing argument to the jury:
They all had bank accounts. But the reason they’re coming to
La Bamba is to not pay the taxes on it. That’s the scheme. And that’s
what makes it worthwhile to pay 5 percent of the face value.
I work very hard for my money, as I’m sure you do. You’re
going to have to pry 5 percent out of my cold, dead fingers before I’m
willing to do that unless there’s some benefit to me.
The benefit is you don’t have to pay taxes on it. That’s going to
cost – the taxes that you’re going to have to pay – the – on payroll
taxes, on whatever income tax is assessed to you, the cost of workers’
comp, that’s much more expensive than 5 percent.
82
So it’s sort of a deal. If it wasn’t for, again, that pesky illegal
part, it would actually be a very good deal.
The checks that Donadio wrote to Mira and to DJ were
unendorsed when delivered. What does that mean? We kept hearing
about endorsed and unendorsed checks, the fact that La Bamba stamps
these checks without knowing who these people are, are these people
authorized to sign checks.
They have their own little rubber stamp and just flop it on the
check. So Peninsula Bank thinks . . . .
(Dkt. 526, pg. 45).
u. Again, during closing argument to the jury:
I want you to think about September 5th, 2007, when Mr.
Gonzalez tells Mr. Obispo to -- that they need to stagger the deposit of
the checks so as not to make a stir with the bank, that stir being the
bank’s efforts to comply with the Bank Secrecy Act.
And I want you to think about September 13th, 2007, and all of
the videos involving Mr. Caro where he whispers, where he gestures,
where he talks about strange people and Miquinbins and dead people
and people in jail.
These, ladies and gentlemen -- these are the faces of guilty men.
After you review all of the evidence and after you deliberate
and review the testimony, the documents, the videos, the transcripts,
we submit to you that there is only one conclusion that you can reach,
and that is that these Defendants are guilty beyond any reasonable
doubt.
(Dkt. 526, pg. 178).
v. The following occurred during questioning of a witness by the
government:
BY MR. GRIMBERG:
Q. Given that example, Mr. Gonzalez, do you see now why the filing
of CTRs would help combat against tax fraud?
MR. ALTER: Objection as to form.
83
THE COURT: Sustained.
Rephrase your question.
MR. GRIMBERG: I’ll move on.
(Dkt. 343, pg. 180).
w. The only government conduct here involved interposing two objections.
(Dkt. 347, pgs. 79-81).
x. Caro cites to a portion of the record, (Dkt. 345, pg. 119), that does not
exist. This transcript (Dkt. 345) only includes pages 1-38.
y. The following exchange occurred during the redirect of Donadio:
Q. And did you, in fact, retain an attorney after that meeting?
A. Yes, I did.
Q. And did you meet with the agents again after meeting with your
attorney?
A. Yes. After talking to my attorney, we did.
Q. And since retaining your attorney – Mr. Weisberg – have you been
completely truthful and open with the investigators?
A. Yes, I have.
Q. And have you been completely truthful in your testimony in this
trial today and yesterday?
A. Yes.
MR. GARVIN: Objection, your Honor.
THE COURT: Sustained.
BY MR. GRIMBERG:
Q. What is your understanding, Mr. Donadio, about the consequences
if you were to provide untruthful testimony during the trial?
MR. GARVIN: Objection.
THE COURT: Overruled.
THE WITNESS: What was the question?
BY MR. GRIMBERG:
Q. What is your understanding of the consequences if you were to
provide untruthful testimony during your testimony today?
84
A. I don’t know.
Q. Have you been truthful, to the best of your knowledge?
MR. GARVIN: Objection, your Honor.
THE COURT: Sustained.
THE WITNESS: Yes, I have.
THE COURT: Sir, if I sustain the objection, you can’t answer the
question.
THE WITNESS: Oh, okay. Sorry.
MR. GRIMBERG: No further questions, your Honor.
THE COURT: You may step down, sir.
(Witness excused.)
(Dkt. 558, pgs. 52-53).
z. The following exchange occurred during the redirect examination of
Dieppa:
. . . US Attorney’s Office during your second meeting?
MR. BLACK: Objection.
THE COURT: Sustained.
Rephrase your question.
BY MR. GRIMBERG:
Q. Did you tell the truth?
A. Yes, sir.
MR. BLACK: Objection.
THE COURT: Sustained.
MR. BLACK: Move to strike.
THE COURT: The motion to strike is granted. The jury is instructed
to disregard the
question and answer.
BY MR. GRIMBERG:
Q. Now, since you have been retained by an attorney, have you been
candid and honest with law enforcement regarding all of their
questions concerning this case?
MR. BLACK: Objection.
THE WITNESS: Yes, sir.
THE COURT: Grounds?
85
MR. BLACK: Conclusion of the witness.
THE COURT: Overruled.
MR. BLACK: And vouching.
THE COURT: I’m sorry?
MR. BLACK: And vouching.
THE COURT: Sustained as to vouching.
(Dkt. 561, pg. 207).
aa. The proceedings occurred outside the presence of the jury and could not
have affected the verdict. (Dkt. 343, pg. 263).
bb. The proceedings occurred outside the presence of the jury and could not
have affected the verdict. (Dkt. 548, pgs. 79-80).
cc. The following is a lengthy portion of the government’s closing
argument:
put in his father’s name; Huber Construction Company, which is in
the name of Flora Valle, Oscar Valle's mother -- what a coinkidink.
They all end in “Valle” -- Mira Construction Group, Inc., which he
put in the name of Miguel Ramirez; DJ Construction Group, where he
used his aunt and later tried to cheat her out of commissions; and SNF
Construction Group, which is in the name of Francisco Ortega.
So here’s a guy who’s sitting in the lobby and getting
commissions; for what, we’re not quite sure. “Oh, but that happens all
the time in the construction industry.” Does it? This is how you work
in construction? You have to create a fake company and then pay
someone a kickback in order to use the company? Hmm.
Between all five companies, La Bamba filed false CTRs
totaling $60 million. Now, you look at that guy. Does that look like a
guy who’s responsible for 60 million dollars’ worth of construction
work? “Well, you know, we really didn’t check. There was so many
checks coming in. We’re not really sure.” Hmm.
86
The recruiters also included Maria del Carmen Martinez, who
you heard from. She was responsible for a company called San
Construction. The company was set up by her husband, something
that my mother refers to as “marrying poorly.”
The company was set up by Nelson Flores to allow others to
cash checks in the name of San Construction with the purpose of
avoiding paying income taxes and workers’ compensation insurance.
Ms. del Carmen Martinez, if you’ll recall, was wearing a prison
uniform because she’s currently serving a prison sentence in
connection with her role for cashing checks at Cashflow on behalf of
her husband and this company.
She collected fees at Cashflow based on checks cashed for San
Construction which totaled $4 million. Again, great work if you can
get it. You get a commission on all these checks. You don't have to
actually do construction work. You just stop by your local
check-cashing store and get your commission.
You heard from Jose Arroliga, who is also getting ready to
surrender to serve his prison sentence -- 18 months, he told us -- for
the creation of Baba Construction and WF Construction.
The company was set up in the name of his buddy, Orlando
Cajinas, in order to allow others to cash checks and collect fees at
Cashflow.
Mr. Arroliga tells us, like the other recruiters, there’s no
construction work going on at . . . .
(Dkt. 526, pgs. 28-29).
dd. This is a repeat of X. (Dkt. 558, pgs. 52-53).
ee. This exchange occurred during the direct examination of Agostinho by
the government:
BY MR. GRIMBERG:
Q. So, Mr. Agostinho, when Mr. Balbuena came back from looking
for -- going to the address that was listed for Mira Construction, what
did he tell you?
A. Huber Construction.
87
Q. I’m sorry. Huber Construction. What did he tell you?
A. Well, he came back and says, “Hey, we have a problem here. I
went to this address. This is a little apartment in the middle of
nowhere. There’s no one that lives there that, you know, knows
anything about this company. They don’t know who this guy is. So
we got a problem on our hands.”
(Dkt. 558, pg. 72).
ff. The following are questions posed by the government during redirect of
Agostinho:
BY MR. GRIMBERG:
Q. Is that true?
A. That’s true.
Q. What did you understand that to mean?
A. That I can cash a check that I received from the contractors I
worked for, go there and cash it.
Q. Why would you need to run a check from outside your own
company?
A. Not to -- in my opinion, obviously, not to run it through my books.
Q. Well, did you understand that to be legal?
A. No.
Q. What was your understanding?
A. That’s not legal.
Q. And you knew that at the time?
A. Yes.
Q. And you know that now?
A. Yes.
Q. And was there any question in your mind about the legality of that?
A. No.
Q. And those are Mr. Caro’s words?
A. Yes.
Q. Now, when Yuri came back after meeting with Mr. Caro, did he
have a company that he now miraculously worked for?
A. Yes.
Q. What was the name of that company?
88
MR. BLACK: Objection. Move to strike the characterization, your
Honor.
MR. GRIMBERG: Withdrawn. It’s argumentative.
BY MR. GRIMBERG:
Q. What was the name of that company?
A. I can’t tell you, because I --
THE COURT: Are you rephrasing the question?
MR. GRIMBERG: Yes.
THE COURT: Okay.
BY MR. GRIMBERG:
Q. What was the name of the company?
A. I don’t remember. He came in with a business card with a
company. I can’t remember the name of it.
Q. Did he subsequently -- I believe you said that he subsequently used
a different company.
A. Correct.
Q. And that different company was also provided by his contacts from
Rene Caro. Correct?
A. That is correct.
Q. What was the name of that company?
A. Huber Construction.
(Dkt. 558, pgs. 173-174).
gg. This is a repeat of I. (Dkt. 559, pgs. 143-44).
hh. This is a repeat of BB. (Dkt. 548, pgs. 79-80).
In the reply brief, Caro further mentions other questionable comments by the
government. Those are included in this list.
ii. In the rebuttal argument, the government made the following comments:
They started suggesting in their questions that Mr. Donadio
wasn’t going to be prosecuted as a result of this cooperation
agreement that he had with the Government.
89
You also recall that, when we actually showed you the
cooperation agreement, it said no such thing, and that none of these
people have been promised that they’re not going to be prosecuted.
You notice that the questioning in that area dropped off after
the first letter because everybody got the same letter.
And, in fact, the evidence that you have is that Mr. -- that Agent
Rondon testified that there’s at least 15 pending investigations as a
result of this. This doesn’t end here.
So the idea that these people somehow came to testify -- when I
say “these people,” Joseph Dieppa, Rodrigo Donadio, Adelino
Agostinho, Mario Varela -- the people who have nothing to do with
Mr. Obispo, the people who dealt directly with La Bamba, somehow
are getting a pass on this and their testimony is not to be believed is
disingenuous.
(Dkt. 528, pg. 28).
jj. In the rebuttal argument, the government made the following comments:
The IRS doesn’t record, and neither does the FBI. They don’t
record interviews because, if the tape machine breaks, the batteries go,
you didn’t press the right button, you’ve got nothing.
And one of the many reasons you don’t do it in this particular
case is because they’re at the scene of a search warrant and the agents
are getting in and out of the car, back and forth.
And then what? Then we’d be here saying, “Well, every time
you turned off the tape recorder, you did so so [sic] that he could say
something else” or, “What he was really saying was....” We’d have
that whole series of things. That’s why the agents sit there and they
take notes.
And to suggest that there was something nefarious about that,
that this is the first criminal case in recorded history that somebody’s
confession wasn’t recorded, is disingenuous because he knows that
that’s not true.
Let’s talk about Mr. Chaoui’s defenses.
Mr. Chaoui’s lawyer says that Mr. Chaoui was not paid under
the table. And, you know, again, Mr. Chaoui’s not charged with
income tax evasion.
90
No one has suggested he got paid under the table or didn’t get
paid under the table.
(Dkt. 528, pg. 31).
kk. In the rebuttal argument, the government made the following comments:
We heard from Ralph Tillman. And let me just clarify a couple
of things.
The argument was that the Government was angry that Ralph
Tillman testified. And, yes, we were angry. We were angry that he
was shown the trial transcripts from other witnesses, including Peter
Djinis’s, in order to craft his testimony at trial.
You’re not allowed to do that, and that’s what pissed us off, that
you were allowed to read the other expert’s testimony and them come
in and figure out what you had to say the opposite of what the other
witness said. You don’t do that.
We were angry that he was still an IRS agent at the time we
were investigating La Bamba, and that’s not right. You compromise --
you have to think back and wonder, “Was our investigation
compromised in any way?”
We’re not angry at his testimony. He says what he’s going to
say. He’s not an attorney. He’s opining about legal issues on agency
and things that he’s just simply not qualified to opine on. He’s
qualified to opine about IRS matters because he worked there for 34
years.
(Dkt. 528, pgs. 39-40).
ll. In the rebuttal argument, the government made the following comments:
So, number one, if you thought that video showed something
different, you could have played it.
Number two, I don’t show videotapes. You’re absolutely right.
I do not show videotapes of what other people are saying to witnesses.
That’s improper. That’s what they did with Mr. Tillman. That’s not
what I do.
91
I’m not going to show Monica Ruiz a series of videotapes with
other people speaking on them and then have her -- influence her
testimony and say what I want her to say on the stand.
I prepare every single witness that comes in here. I try not to
waste your time and the Court’s time. I’m organized. I come in. I meet
with all my witnesses. We go through, “Here’s what we’re going to go
through.”
I went through with Mr. Obispo all of these tapes. I played the
ones that I thought were relevant, that showed illegal conduct.
But I meet with all of my witnesses. There’s nothing wrong
with that. And the defense met with their witnesses.
To suggest somehow that I, you know, tampered with the
evidence in some way by preparing witnesses for testimony is
disingenuous. Everybody does it, and it’s correct. That’s what you’re
supposed to do.
(Dkt. 528, pgs. 47-48).
mm. During closing argument, the government made the following
comments referring to Tillman:
He had been personally involved with La Bamba when he
worked for the IRS. He had examined La Bamba in 1999 and 2001.
Both were done under his supervision. Both times he found them to be
in violation of the Bank Secrecy Act.
He testified about his theory on agency, but he acknowledged
that it’s his own personal opinion. He acknowledged that there’s no
statute, there’s no case, there’s no regulation that he is relying on for
this theory.
In fact, he acknowledged that the agency who is in charge of
interpreting --
MR. HERNANDEZ: I’m going to object to that, your Honor. That
misrepresents the testimony.
THE COURT: Overruled.
MR. GRIMBERG: He acknowledged that the agency that is
responsible for interpreting the Bank Secrecy Act, for deciding what
is and is not appropriate is FinCen, FinCen.
92
Remember, Peters Djinis was the former director of FinCen.
And Mr. Tillman, of course, could not explain how La Bamba could
have been justified in the CTRs that . . . .
(Dkt. 526, pg. 149).
nn. During rebuttal argument, the government made the following
statements:
The defense says that Peter Djinis agreed with Obispo -- that
Obispo was an agent of La Bamba. They say that to suggest that
there’s a conflict among the experts.
First of all, it’s apples and oranges. You’ve got on the one hand
Peter Djinis, who’s an attorney and the former deputy director of
FinCEN, the agency that rules over all of this. That’s why he was
asked to come and give expert testimony: “Here’s what the law is in
this area.”
What Mr. Garvin did was, in a hypothetical, suggest that
Obispo was a truck driver, just like the La Bamba truck drivers. And
in that scenario, the question was, “Do you have to do a CTR -- when
La Bamba gives money to the people in the truck to go out and spend
money, do you need to do a CTR?”
(Dkt. 528, pgs. 41-42).
oo. During cross examination of defense witness Esther Crespo, the
government asked the following questions.
Q. Good morning, Ms. Crespo. Nice to see you.
A. Good morning. How are you?
Q. Ms. Crespo, you are a -- you’re a certified translator for both the
courts and for private hire.
Correct?
A. Yes, sir.
(Dkt. 518, pg. 18).
93
pp. During rebuttal argument, the government made the following
statements:
What about La Bamba’s defenses? “We only committed a little
bit of fraud,” the “needle in a haystack” argument.
The Government charges that 132 million of CTRs filed by La
Bamba were done so falsely and it was done so knowingly and
willfully, knowing these companies were fictitious, to assist those
people in avoiding paying income taxes. It’s limited to those 15
companies, and the total is 132 million.
That’s what -- that’s what La Bamba reported. That’s what the
bank records show. That’s what their logs show.
At no point did the Government suggest that it was $600
million. The indictment says that La Bamba filed $600 million in
CTRs in 2006 and 2007. It doesn’t say those were false. It says they
filed 600 million. The indictment says 132 million of those were false.
The defense has come back and presented a chart saying that,
“Well, you think that’s bad? We cashed $600 million in 2007 alone.”
But that’s not what’s charged in the indictment.
So why isn’t La Bamba -- and you’ll also note in the jury
instructions there’s no little bit of fraud exception. If you’ve got a
little bit of fraud and a lot of other cases, that somehow makes it
better. It’s like being a little pregnant. You either are or you aren’t.
So why isn’t La Bamba still in business? You heard six
different times during opening and closing statements by the attorneys
that 62 employees are out of work, the Government shut La Bamba
down.
But did you hear any evidence that the Government shut La
Bamba down? That’s because we didn't. That’s why La Bamba is
charged in this indictment.
(Dkt. 528, pgs. 18-19).
qq. During the cross examination of defense witness Ruben Pedron, the
government asked the following questions:
94
BY MR. FERNANDEZ:
Q. Good afternoon, Mr. Padron (verbatim).
A. Good afternoon. It’s “Pedron,” with an “E.”
Q. “Pedron.” “Pedron.”
If I could ask you just a couple of questions, I looked at --
looked you up on the Internet very briefly and I know that you have
been with SunTrust for approximately 25 years, 27 years. Is that
correct?
A. That’s correct.
Q. You’ve done a number of charitable and civic works within the
community?
A. Yes.
Q. I noticed that you hosted a real estate panel for the Miami Gay &
Lesbian conference about a year ago. Correct?
A. Yeah. That’s true. About 18 months ago, I think.
Q. So you’ve done a lot of work in the community. You’ve done
some civic activities.
You are comfortable with the prosecution for bank fraud and tax
evasion and that sort of thing? Do you understand where that’s
coming from?
A. I mean, I have some idea. Sure.
(Dkt. 518, pgs. 123-24).
rr. During the cross examination of Russell Weigel, the government asked
the following questions.
A. That’s a difficult question to answer, Mr. Fernandez.
I mean, there have been times when, in my opinion, I have not
allowed cases to go forward that were, in my opinion, not thoroughly
investigated.
There have been times when I have thought that -- I mean, cases
were authorized and things had come to light afterwards.
Unfortunately, in the investigative process, not everything is
brought to light. A lot of times things come out during the process of
litigation and sometimes, at that point, it’s too late to -- institutionally
to deauthorize a case.
95
Q. Most of your --
A. That has happened.
Q. I'm sorry.
Most of your experience is in the civil arena, though; is it not?
A. Most is. Yes.
Q. As a state attorney, when it was someone’s liberty that was at
stake, would you ever prosecute
someone who you didn’t think was guilty?
(Dkt. 519, pg. 149).
ss. During the cross examination of Russell Weigel, the government asked
the following questions.
BY MR. FERNANDEZ:
Q. Mr. Weigel, finally, the last questions we were talking about, what
kind of case was it that was nolle pros’ed?
A. A theft case.
Q. How many witnesses, if you remember?
A. I have no idea at this point. I just remember the events.
Q. Do you remember how long you investigated it?
A. In that particular case, I believe I was handed the file maybe 24 to
48 hours before trial.
MR. FERNANDEZ: I have no further questions,
Judge. Thank you.
(Dkt. 519, pg. 152).
tt. This portion of the transcript pertains to cross examination of a
government witness and contains no objectionable comments by the government.
(Dkt. 563, pgs. 166, 170).
uu. During opening arguments, the government made the following
comments.
96
Mr. Obispo will also tell you that the day that law enforcement
-- the day that Special Agents William Rondon and Alfonso Herrera
came knocking on his door with a search warrant, that he confessed.
He confessed to the scheme, he confessed to his role in the
scheme, and he confessed to what they already suspected, which is
that he was working together with the folks at La Bamba.
And Mr. Obispo decided to do the right thing. He decided to
help law enforcement –
(Dkt. 545, pg. 46).
vv. During rebuttal argument, the government made the following
statements:
Let’s talk about Miguel Obispo a little bit, who suddenly is this
smooth and savvy liar who came to -- who convinced the Government
in order to save himself.
First of all, the Government didn’t need any convincing. The
Government was convinced that La Bamba was committing fraud
before Mr. Obispo got there. Mr. Obispo confirmed the fact that the
fraud was being conducted at La Bamba through eight months of . . . .
(Dkt. 528, pg. 8).
ww. During rebuttal argument, the government made the following
statements:
You can evaluate their credibility, their testimony, what their
motivation is to lie. I will tell you that I think it takes a special type of
person to come into federal court and admit to conspiring and filing
millions of dollars in checks and not having paid taxes on them.
So you can take that as you will. What’s their motivation to lie
in contrast with the Defendants’ motivation to criticize them and make
a story?
The Government only gave you half of Monica Ruiz’s
statement from Alfredo Gonzalez. I gave --Monica Ruiz testified what
97
she remembered. She said that he told her when she asked about the
commission statements -- commission checks, “Better not to ask.”
I don’t know what Mr. Gonzalez is talking about, because he
testified that he doesn’t remember that conversation. So it’s not a
matter of whether it was half a conversation or a full conversation. It’s
simply he doesn't remember it. But that’s what Monica told us.
And I’ll talk more about Monica in a second.
Mr. Alter says that Gonzalez’s confession, now, wasn’t really a
confession. Yet, you had -- and you, of course, expect someone --
what else are you going to say when you’ve got a written confession
facing you? You’re going to say, “Well, that’s not really what I
meant.” I understand that.
But the facts are that two professional, experienced IRS agents
met with him the day of the arrest. They sat down in the car and they
conducted an interview.
Each agent took contemporaneous, detailed notes about what
was said, which both the notes and the memo that was prepared, based
on those notes, were turned over to defense counsel.
And now -- and defense counsel used those notes to
cross-examine some of the witnesses. But now, when Mr. Gonzalez
takes the stand, “Oh, I didn’t say any of that. That’s not really what I
said. I’ve been misinterpreted. That’s not really” -- and he claims he
never actually saw a CTR until after his arrest, but the day of his arrest
he admitted that he knew that the people conducting the transactions
weren’t the people that are being reported on the CTRs.
But now he’s had a memory lapse, and I understand that.
But the fact that he didn’t -- we didn’t record the interview --
Mr. Alter’s been doing this for 30 years and he knows better than that.
(Dkt. 528, pgs. 29-31). Additional portions of this argument are also contained in
JJ.
xx. During closing argument the government made the following statement:
“In this case, we submit to you that it’s a distinction with no difference. All of the
98
Defendants knew what they were doing was illegal. All of them.” (Dkt. 526, pgs.
161-62).
yy. These statements are contained in U.
zz. During redirect of Dieppa, the following exchange occurred:
A. The only time I ever saw the agent again was when I went to the
US Attorney’s Office.
Q. Okay. And when was that?
A. It was later that month.
Q. Did you tell the truth during that meeting?
A. Yes, sir.
Q. And did you explain the inconsistencies with what
you had told them during your initial meeting and what
you were telling them at that second meeting?
A. I did.
Q. Did you have a subsequent meeting with the agents
or the prosecutors in the case?
A. I believe we had a second meeting -- a third
meeting.
Q. Okay. Did you tell the truth during that
meeting?
A. Yes, sir.
Q. And was what you said during that meeting
consistent with what you had told the agents at theUS Attorney's
Office during your second meeting?
MR. BLACK: Objection.
THE COURT: Sustained.
Rephrase your question.
BY MR. GRIMBERG:
Q. Did you tell the truth?
A. Yes, sir.
MR. BLACK: Objection.
THE COURT: Sustained.
MR. BLACK: Move to strike.
THE COURT: The motion to strike is granted.
99
The jury is instructed to disregard the
question and answer.
BY MR. GRIMBERG:
Q. Now, since you have been retained by an attorney, have you been
candid and honest with law enforcement regarding all of their
questions concerning this case?
MR. BLACK: Objection.
THE WITNESS: Yes, sir.
THE COURT: Grounds?
MR. BLACK: Conclusion of the witness.
THE COURT: Overruled.
MR. BLACK: And vouching.
THE COURT: I’m sorry?
MR. BLACK: And vouching.
THE COURT: Sustained as to vouching.
MR. GRIMBERG: I’ll move on, your Honor.
BY MR. GRIMBERG:
Q. There was some discussion during the cross-examination about
Byron Garcia.
(Dkt. 558, pgs. 172-74).
aaa. Caro points to a portion of the record that does not support his
assertion. (Dkt. 346, pgs. 111-12).
bbb. Caro points to a portion of the record that does not support his
assertion. (Dkt. 343, pg. 237).
ccc. This claim is identical to that raised in XX.
ddd. During rebuttal argument, the government stated:
The 493 tapes were made available to the defense more than a year ago,
complete with a 60-page index of every single tape, the date they were recorded
and the people speaking on the tape.
100
If there’s another tape out there that says something different than what we
showed, they could have very easily played those tapes.
(Dkt. 528, pg. 7).
eee. During rebuttal argument, the government stated:
You heard a reference to a State audit that was done by the
State of Florida.
And then you heard in Mr. Black’s closing statements
references to Barbara Rodriguez. Barbara Rodriguez ran a company
called SAS Compliance.
Mr. Black suggested that Ms. Rodriguez would have said X, Y
and Z about the audit at La Bamba. But you didn’t hear from Barbara
Rodriguez. She didn’t testify in the case.
So that whole idea of what Barbara Rodriguez might have or
could have said is not before you.
But the audit that she did found deficiencies in what La Bamba
was doing. He said, overall, they had compliance manuals, they had a
compliance officer, they had the elements that they needed. But she
found certain deficiencies and gave them an overall satisfactory rating.
(Dkt. 528, pgs. 15-16).
fff. During cross examination of Chaoui, the following occurred:
Q. Now, let me see if I understand this correctly.
You read this ruling to suggest that you didn’t have to do a CTR on
Miguel Obispo because Miguel Obispo was an agent of La Bamba.
Correct?
A. Part of it -- with a what -- I’m sorry. I’m sorry. I read this ruling in
2006.
Q. Correct.
A. That wasn’t pertaining at that time to Mr. Obispo.
Q. Okay. So I don’t understand your testimony, then.
You said that the reason the CTRs were false is because you
thought, as a result of this letter ruling, you didn't have to file a CTR
on Miguel Obispo.
101
MR. GARVIN: Your Honor, I object to the --
THE COURT: Sustained.
Rephrase your question.
(Dkt. 522, pg. 64).
In the context of a trial that lasted from November 2, 2008, until February
10, 2009, there is no government misconduct here. Some of the comments may
have been unwise, but none of them constituted prosecutorial misconduct and
none, separately or combined, would have impacted the outcome of the trial.
7. Severance Motion
According to Caro, the District Court erred in denying his motion for
severance because this allowed prejudicial spillover from co-Defendant Gonzalez’s
post-arrest statement.
Caro and La Bamba filed a Motion to Sever that centered on statements
made by Gonzalez to IRS agents on January 18, 2008. In denying the motion (Dkt.
238), the District Court explained there was no Bruton issue because the
government “intend[ed] to introduce only those portions of Defendant Gonzalez’s
statements that incriminate him alone . . . .”41
41
A Bruton issue involves the admission of a non-testifying co-defendant’s confession
which directly implicates a defendant. Bruton v. United States, 391 U.S. 123, 88 S.Ct. 1620, 20
L.Ed.2d 476 (1968).
102
IRS Agent Alfonso Herrera testified about Gonzalez’s statement to the IRS.
Following that testimony, Caro’s counsel objected and asked for a severance of the
trial. Counsel contended that while Gonzalez’s statement did not directly implicate
Caro, it pointed to him indirectly. After a sidebar, the District Court gave the
following instruction to the jury: “[t]he evidence that you’ve just heard is evidence
that is being submitted in the case of the United States versus Alfredo Gonzalez. It
is not to be considered by you in any way against any other Defendant.” (Dkt. 563,
pg. 119).
“It is well settled that defendants who are indicted together are usually tried
together.” United States v. Browne, 505 F.3d 1229, 1268-1269 (11th Cir. 2007).
Therefore, we are “generally reluctant to second-guess the District Court’s decision
on severance.” Id. A District Court’s denial of a motion to sever is reviewed for an
abuse of discretion. Id. To “show such an abuse,” a moving party must discharge
the “‘heavy burden’ of demonstrating ‘compelling prejudice’ from the joinder.” Id.(citing United States v. Novaton, 271 F.3d 968, 989 (11th Cir.2001)(quoting
United States v. Pepe, 747 F.2d 632, 651 (11th Cir.1984))). The Browne Court,
further, explained:
[T]he Supreme Court set forth a two-step test to determine whether a
defendant is entitled to a new trial due to a district court’s refusal to
sever prior to trial or to grant a mistrial once trial has commenced. A
defendant must first demonstrate that the joint trial resulted in
103
prejudice to him; and second, must show that severance is the proper
remedy for that prejudice. Under this test, [t]here are only two
circumstances in which severance is the only permissible remedy:
where there is a serious risk that a joint trial (1) would compromise a
specific trial right of one of the defendants, or (2) would prevent the
jury from making a reliable judgment about guilt or innocence.
Browne, 505 F.3d at 1268-1269 (internal quotations and citations removed).
Caro has not met this heavy burden; especially considering the District Court
instructed the jury to consider the evidence against no other defendant but
Gonzalez.
8. Extrinsic Evidence and the Jury
Caro argues the District Court erred in failing to declare a mistrial where
jury deliberations were tainted by extrinsic evidence, consisting of unredacted
transcripts of conversations between Caro and Obispo that were not admitted
during the trial.
When the jury retired to deliberate, the parties agreed that all the evidence
admitted would be given to the jury for their use, with the exception of two CDs
for October 31, and November 14, 2007. The conversations on these two CDs had
been redacted for use before the jury, but the CDs contained the unredacted parts.
The accompanying transcripts for those CDs had been redacted, and those redacted
transcripts were given to the jury.
104
However, less than a week into its deliberations, the foreperson sent a note
to the District Court stating that “we are looking through all the evidence provided.
The original transcripts are in there with nothing blacked out. Is this right?” (Dkt.
533, pg. 3). After consultation with the parties, the District Court removed the
evidence from the jury room for inspection. (Dkt. 533, pg. 7). During this
inspection, it was discovered that two unredacted transcripts had been included in
the evidence provided to the jury, along with the two redacted transcripts to use as
trial aids. (Dkt. 533, pgs. 8-12).
The government compared the two versions and identified three matters
contained in the unredacted transcripts: (1) payment of “money under the table”
for Caro’s purchase of Cash Flow; (2) references to another investigation; and (3)
the fate of Pronto Cash and its owner who was having a “problem.”42 (Dkt. 533,
pgs. 15-17). The parties and the District Court agreed that the inclusion of the
unredacted transcripts was unintentional. (Dkt. 533, pgs. 18-21).
The District Court inquired whether the jurors had read the unredacted
transcripts. (Dkt. 533, pgs. 22, 29). The foreperson explained that Juror 12 had
read part of the November 14 unredacted transcript and “she realized what it was.”
(Dkt. 533, pg. 38). Juror 12 alerted the foreperson whereupon he wrote the note to
42
Pronto Check Cashing was also under investigation by the FBI.
105
the court. Id. at 39. After the note, the jury stopped deliberations and the
unredacted transcripts had not been used further as part of the deliberations. Id. at
40. The foreperson was clear that this was the first occasion that any juror
examined the box of transcripts. (Dkt. 533, pgs. 42-43).
Juror 12 was questioned by the District Court. While going through a box of
transcripts, she began reading the unredacted transcript. Id. at 44. She did not
recall all of the material she was reading from the trial, and noticed the transcript
contained no “blacked out” parts. Id. at 44. Juror 12 informed the foreperson of
her discovery. Id. Juror 12 recalled that Pronto Check Cashing was discussed in
the transcript. Id. at 45-46. She did not discuss what she had read with the other
jurors, id. at 46, and Juror 12 was clear that prior to her review of the transcript no
other juror had looked at it. Id. at 49.
The District Court granted Caro’s motion to strike Juror 12. Id. at 67. The
court and the parties then focused on how to proceed. Counsel for Gonzalez asked
what would be done with the verdicts the jury had reached on two of the
defendants. Id. at 68. The District Court explained, “whatever happens, whether
it’s 11 or whether it’s 12 [jurors], I’m taking the verdicts, destroying them and
going to reinstruct them and tell them to begin their deliberations anew . . . .” Id. at
69.
106
The District Court dismissed Juror 12. The remaining eleven jurors were
asked whether anyone else had looked at the unredacted transcripts. Id. at 83. The
District Court received no response. Id. At that time, the District Court also
confiscated the completed verdict forms from the jury, and indicated they would
not be read but shredded. Id. Thereupon the jury was excused for a long weekend.
Id. at 83-84.
Upon returning from the weekend, the foreperson provided the District
Court with the following note:
Judge Lenard: I originally believed that [Juror 12] was the only
juror who read parts of the original November 14th transcript.
I since became aware that two other jurors also read parts of
this transcript. When you called all the jurors into the courtroom and
asked if anyone else had read the transcript, I expected them to say
something.
I did not feel comfortable pointing them out in front of the
whole court.
I should have sent you a note when I first became aware. I
cannot, however, remain silent.
(Dkt. 534, pgs. 3-4). With the parties’ agreement, the District Court interviewed
the jurors individually and learned that Jurors 7 and 8 had known about the
transcript.43 (Dkt. 534, pgs. 10-20, 23-25).
43
Juror 1 indicated that, in addition to Juror 12, she observed “Aubrey” read the
unredacted transcripts. (Dkt. 534, pg. 10). Juror 2 indicated that, in addition to Juror 12, she
107
Juror 7 stated that she had not actually read the transcript, but glanced over
Juror 8’s shoulder while he was reading it. Id. at 20. Only the word “Pronto”
stood out to Juror 7, but she could not tell what it was regarding, nor did she
“actually read the transcript.” (Dkt. 534, pg. 20). Juror 8 had not read the
transcript, although he had “looked over at it” while Juror 12 was reading it. (Dkt.
534, pg. 21).
The District Court granted the request to strike Juror 8 and replaced him
with an alternate. (Dkt. 534, pgs. 26-27). The District Court noted that although
there was no request to strike Juror 7, what she had read was “de minimis” with
regard to “Pronto,” which, in any event, had not been included in the portion of the
Motion in Limine that had been granted. (Dkt. 534, pgs. 27-28, 51-52).
At this point, Caro requested a mistrial on the ground that heightened
attention to the unredacted transcript had created a “pollutive effect on the entire
jury.” (Dkt. 534, pg. 29). That motion was denied. (Dkt. 534, pg. 31).
After determining the two alternative jurors had not engaged in deliberations
with the other jurors, the District Court convened the ten remaining jurors,
saw “Aubrey” and “Kim” read the unredacted transcripts. Id. at 11. Juror 3 indicated that
Aubrey “glanced” at the unredacted transcripts. Id. at 12-13, 18-19. Juror 4, the foreperson,
believed that “Aubrey” and “Kim,” Jurors 7 and 8, read the transcript. Id. at 13. Juror 5
indicated that he saw “Aubrey” read the unredacted transcripts. Id. at 17. Juror 6 indicated that
Aubrey had seen the unredacted transcripts. Id. at 18. Jurors 9 did not see anyone else besides
Juror 12 reading the unredacted transcripts. Id. at 24. Jurors 10 and 11 did not read or discuss
the unredacted transcripts with anyone. Id. at 24-25.
108
explained that it had dismissed Juror 8, and directed them to begin deliberations
anew with the two alternates. (Dkt. 534, pgs. 43-46). The District Court
assembled the entire reconstituted jury and instructed them anew. (Dkt. 534, pgs.
53-85). Three days later, the jury returned its verdict. (Dkt. 538, pgs. 8-20).
A denial of a motion for mistrial is reviewed for an abuse of discretion.
Emmanuel, 565 F.3d at 1334. Moreover, we review “the denial of a motion for a
new trial based on the jury’s exposure to extrinsic evidence for abuse of
discretion.” United States v. Ronda, 455 F.3d 1273, n. 33 (11th Cir. 2006).
“A mistrial or new trial is required only if the extrinsic evidence known by
the jury posed a reasonable possibility of prejudice to the defendant.” Ronda, 455
F.3d at 1299 (11th Cir. 2006) (citing United States v. Perkins, 748 F.2d 1519, 1533
(11th Cir.1984)). “The defendant has the burden to show that the jury has been
exposed to extrinsic evidence or extrinsic contacts. Once the defendant establishes
that such exposure in fact occurred, prejudice is presumed and the burden shifts to
the government to rebut the presumption.” Id.“To rebut the presumption of prejudice, the government must show that the
jurors’ consideration of extrinsic evidence was harmless to the defendant.” Id. “To
evaluate whether the government has rebutted that presumption, we consider the
totality of the circumstances surrounding the introduction of the extrinsic evidence
109
to the jury.” Id. at 1299-1300. “The factors we consider include: (1) the nature of
the extrinsic evidence; (2) the manner in which the information reached the jury;
(3) the factual findings in the district court and the manner of the court’s inquiry
into the juror issues; and (4) the strength of the government’s case.” Id. at 1300.
The District Court’s conscientious investigation of the extrinsic evidence
and the jurors who saw it put that court in the best position to determine whether or
not any juror misconduct deprived Caro of his due process right to a fair trial. The
District Court individually questioned each member of the jury, and replaced the
two jurors who had seen the unredacted transcripts for more than a passing glance.
The reconstituted jury was then directed to start deliberations anew.44
The only juror who rendered a verdict who had any contact with the
unredacted transcript could not have been affected by her reading the word
“Pronto.” Therefore, the government met its burden of demonstrating that the
unredacted transcript evidence was harmless to Caro, and the District Court did not
abuse its discretion in denying the motion for new trial. We conclude the District
44
The action comports with the requirements of Fed. R. Crim. Proc. 24(c)(3) which
provides:
The court may retain alternate jurors after the jury retires to deliberate. The court
must ensure that a retained alternate does not discuss the case with anyone until
that alternate replaces a juror or is discharged. If an alternate replaces a juror after
deliberations have begun, the court must instruct the jury to begin its deliberations
anew.
110
Court properly exercised its discretion in finding that Caro’s jury was free of any
legitimate taint from the extrinsic evidence.
9. Destruction of Verdict
Caro makes one additional claim arising from this extrinsic evidence. Caro
claims that the District Court abridged his protection against double jeopardy by
disposing of the partial verdict from the original jury.
The District Court charged the jury and they began deliberations on Friday,
January 23, 2009. (Dkt. 528, pg. 106) On Wednesday, January 28, 2009, the
fourth day of deliberations, the jury provided the District Court with the following
note: “Judge Lenard, We have reached a verdict on two Defendants on all counts.
We have been unable to reach a verdict on the other two Defendants. We are at an
impasse. No unanimous decision on Count 1 or any of the substantive charges
related to these Defendants.” (Dkt. 531, pgs. 4-5).
The District Court sought the advice of counsel since Fed. R. Crim. Proc.
31(b)(1) permits a jury to return a partial verdict at anytime in a multiple defendant
case. (Dkt. 531, pg. 5). Caro’s counsel maintained, “We see no purpose to be
served by taking a verdict at this time as to the two Defendants that they have
decided on.” Id. at 7. Caro’s counsel explained, “The reason that we do not think
the verdicts should be taken at this time is the jury always has the right during
111
deliberations to revisit and, if they choose to revisit and they’ve given the verdict
over, it may not be -- it takes it away from them.” Id. at 7-8.
After considering the parties’ positions, the District Court concluded that “I
don’t find that it would be appropriate to fully return the verdict at this time, since
I’m going to be instructing them to continue to deliberate.” Id. at 8. The jury
would be instructed that to give verdict forms to the court and they would be
sealed. Id. at 9. There were no objections to this course of action. Id. at 9, 11.
Ultimately, the District Court instructed the jury that she was taking the
completed verdict forms and was “going to shred them.”45 (Dkt. 533, pg. 83).
There was no objection to this suggested course of action.
Under the invited error doctrine, however, we will not consider an argument
on appeal when the party making the argument invited or induced the District
Court into making the alleged error. Love, 449 F.3d at 1157 (declining to consider
an argument that a term of supervised release was excessive when the defendant
acknowledged in the plea agreement that the term was proper and argued for
supervised release at sentencing).
Caro’s counsel could have objected to the District Court’s proposed action
of shredding the verdict, but chose not to. This failure should not permit Caro to
45
The record is unclear as to when these verdict forms were actually destroyed.
112
now raise this issue. Moreover, though an initial result on two defendants was
delivered to the trial judge, it was not a final verdict published in open court with
no juror dissent. See United States v. Acevedo, 141 F.3d 1421, 1424 n.6 (11th Cir.
1998). As such, there was no event which terminated the original jeopardy and the
jury was free to continue deliberations with a substitute juror, pursuant to Federal
Rule of Criminal Procedure 24(c).
At the time the unredacted evidence issue arose, Caro’s counsel argued that
the District Court should not take a partial verdict. Counsel argued to the District
Court that the jurors could actually change the verdict during further deliberations,
and they wanted the jury to be able to do just that. So, Caro actually asked the
court not to accept the partial verdict and wait until the jury had completed all of its
deliberations, and take whatever verdict they had reached at that later time. The
destruction of the partial verdict by the District Court is exactly what Caro’s
counsel requested.
10. Instructions to the Jury
Caro argues that the District Court erroneously denied defense requests for
various jury instructions. The instructions that should have been given, according
to Caro, were: (1) an instruction on the law of agency; (2) a good faith theory of
defense, and reliance on a FinCen advisory opinion; (3) an instruction on specific
113
intent as an element of the substantive CTR filing offenses; and (4) an instruction
on “the relationship between prosecutorial discretion to reduce sentences and
potential partisanship or bias by cooperating witnesses” (Blue brief, pg. 77). Caro,
additionally, argues that the District Court should not have given a deliberate
ignorance instruction.46
We review de novo the correctness of jury instructions. Prather, 205 F.3d at
1270. A district court has “broad discretion in formulating a jury charge as long as
the charge as a whole is a correct statement of the law.” United States v. Perez-
Tosta, 36 F.3d 1552, 1565 (11th Cir. 1994). A conviction will not be reversed on
this ground “unless we find that issues of law were presented inaccurately or the
charge improperly guided the jury in such a substantial way as to violate due
process.” Id.However, a District Court’s refusal to give a requested instruction is
reviewed for an abuse of discretion. Yeager, 331 F.3d at 1222. A denial of a
requested jury instruction is reversible error only where the requested instruction:
“(1) was correct, (2) was not substantially covered by the charge actually given,
and (3) dealt with some point in the trial so important that failure to give the
46
The initial and reply brief are not the picture of clarity on these issues. Despite being
granted permission to file a brief of up to 19,000 words, Appellants have failed to use those
words with clarity, and we are left to decipher the claims alleged.
114
requested instruction seriously impaired the defendant’s ability to conduct his
defense.” Eckhardt, 466 F.3d at 947-48.
Nevertheless, a district court “is not bound to use the exact words and
phrasing requested by defense counsel in its jury charge.” United States v.
Gonzalez, 975 F.2d 1514, 1517 (11th Cir. 1992). When deciding if the difference
in the requested instruction and the one actually given is significant, we “need only
ascertain whether the charge, when viewed as a whole, fairly and correctly states
the issues and the law.” Id.a. Agency Instruction
Caro requested an instruction on an agency relationship.47 The District
Court denied the requested agency instruction because it was substantially covered
by the agency charge given.48 (Dkt. 524, pgs. 31-32).
47
The requested instruction was:
The law provides that an agency relationship is created by an agreement,
written or oral, express or implied, by which the persons agree that one of them is
to act for, or in the place of, the other. The person who agrees to act for an-other
is called the agent, and the other is called the principal.
The existence of an agency relationship can be proved by deductions or
inferences. It is not the law that an agency relationship can only be proven by the
minutes of its board of directors or by a contract in writing.
(Dkt. 337, pg. 4).
48
The instruction given by the District Court was:
115
Caro provided the District Court with no binding support for his contention
that such an instruction is permissible in a criminal proceeding; nor does he do so
now. Accordingly, we conclude the District Court did not abuse its discretion in
denying the requested instruction.
b. Good Faith Defense/Reliance on a FinCen Opinion
The law recognizes that, ordinarily, anything a person can do for one’s
self may also be accomplished through direction of another person as an agent or
by acting together with or under the direction of another person or persons in a
joint effort.
So if the acts or conduct of an agent, employee or other associate of the
defendant are willfully directed or authorized by the defendant or if the defendant
aids and abets another person by willfully joining together with that person in the
commission of a crime, then the law holds the defendant responsible for the
conduct of that other person just as though the defendant had personally engaged
in such conduct.
(Dkt. 528, pgs. 58-59).
116
Caro requested jury instructions on good faith. 49 This
49
Caro’s requested two instructions on good faith; one pertaining to the
substantive counts and one to the count of conspiracy. Caro’s general instruction
provided:
Good faith or reasonable reliance is a complete defense to the charge in
the indictment since good faith on the part of the Defendant is inconsistent with
the existence of the intent required to find the Defendant guilty of the charged
offenses. The burden of proof is not on the Defendant to prove good faith, of
course, since the Defendant has no burden to prove anything.
So, a Defendant would not be possess [sic] the intent to do wrong if,
before taking any action with regard to the alleged offense, the Defendant relied
in good faith on employees whom the Defendant considered competent to gather
information, prepare, and file Currency Transaction Reports on Treasury
Department, FINCEN Form 104, the employees possessed or had access to all
material facts that the Defendant had to comply with the currency transaction
reporting requirements, and the Defendant had no knowledge or reason to believe
that any material omission or misstatement of fact was contained in currency
transaction reports filed.
If you find that a Defendant acted in good faith or reasonably relied upon
a competent employee, you should find the Defendant not guilty.
(Dkt. 337, pg. 7). Whereas, the conspiracy instruction that was given to the jury provided:
The indictment charges the Defendants with conspiracy to willfully and
knowingly committing the following offenses against the United States:
(a) willfully violating the reporting requirements of Title 31, United States
Code, Section 5313(a), and Title 31, Code of Federal Regulations, Sections
103.22 and 103.28, as part of a pattern of any illegal activity involving more than
$100,000 in a 12-month period, by filing a report required by Title 31, United
States Code, Section 5313(a), specifically, a Currency Transaction Report on
Treasury Department, FINCEN Form 104, that contained a material omission and
misstatement of fact concerning, among other things, the true identity of the
parties involved in the financial transactions and the source of the funds involved,
in violation of Title 31, United States Code, Section 5322(b); and
(b) knowingly and for the purpose of evading the reporting requirements
of Title 31, United States Code, Section 5313(a), and regulations prescribed
thereunder, causing a domestic financial institution to file a report under Title 31,
United States Code, Section 5313(a), and regulations prescribed thereunder, that
117
instruction was premised upon Chaoui’s testimony that he consulted the FinCen
website where he located FinCen Ruling 2003-3. That ruling, according to Chaoui
explained that La Bamba was not required to file a CTR for a money transfer from
Western Union to La Bamba.
The District Court granted Caro’s request (Dkt. 524, pgs. 7-9) and charged
the jury on good-faith reliance, according to each defendant’s individual
is, a Currency Transaction Report on Treasury Department, FINCEN Form 104,
that contained a material omission and misstatement of fact concerning, among
other things, the true identity of the parties involved in the financial transactions
and the source of the funds involved, as part of a pattern of illegal activity
involving more than $100,000 in a 12 month period, in violation of Title 31,
United States Code, Sections 5324(a)(2) and (d)(2), and Title 31, Code of Federal
Regulations, Section 103.22 and 103.28.
Good faith is a complete defense to the charges in the indictment since
good faith on the part of the Defendant is inconsistent with the intent required to
prove the Defendants willfully and knowingly conspired to commit the above
offenses. The burden of proof is not on the Defendant to prove good faith, of
course, since the Defendant has no burden to prove anything. The Government
must establish beyond a reasonable doubt that the Defendant acted with specific
intent charged in Count I of the indictment.
One who expresses an honestly held opinion, or an honestly formed belief,
that currency transaction reports they filed or caused to be filed did not contain a
material omission or misstatement of fact concerning, among other things, the
true identity of the parties involved in the financial transactions, the source of the
funds involved or the location of the transaction, is not chargeable with under
Count I even though the opinion is erroneous or the belief is mistaken; and,
similarly, evidence which establishes only that a person made a mistake in
judgment, or was careless, does not establish that a Defendant knowingly or
willfully made material false or material omissions or misstatements of fact on
currency transaction reports for the purpose of evading the transaction reporting
requirements.
(Dkt. 337, pgs. 8-9).
118
circumstances. (Dkt. 528, pgs. 70-73). The District Court, however, did not rely
upon Caro’s proposed instruction, but gave a modified version of the pattern good-
faith defense jury instruction.50 A review of these two instructions demonstrates
that the District Court fairly and correctly stated the applicable law to the jury. The
50
The instruction given by the District Court explained:
Good faith is a complete defense to the charges in counts 1 and counts 18-33 in
the Superseding Indictment, since good faith on the part of a Defendant is
inconsistent with willfulness, which is an essential part of the charges in counts 1
and 18-33.
The burden of proof is not on a defendant to prove his good faith, of
course, since he has no burden to prove anything. The Government must establish
beyond a reasonable doubt that a defendant acted willfully as charged in the
Superseding Indictment in count 1 and counts 18 through 33.
One who expresses an honestly held opinion or an honestly formed belief
is not chargeable with willful intent, even though the opinion is erroneous or the
belief is mistaken. And similarly, evidence which establishes only that a person
made a mistake in judgment or an error in judgment or was careless does not
establish willful intent.
On the other hand, an honest belief on the part of a defendant that a
particular business practice was authorized and permitted by law would not in and
of itself constitute good faith as used in these instructions if in carrying out that
practice the defendant, as charged in Count 1, knowingly and willfully agreed
with other persons to:
1) willfully violate the reporting requirements of Title 31, 5313(a), or;
2) knowingly and for the purpose of evading the reporting requirements
filed CTRs containing material omissions or misstatements of fact or;
as charged in Counts 18 through 33, willfully violated the reporting requirements
of Title 31, Section 5313(a).
(Dkt. 397, pg. 23).
119
failure to give the exact instruction requested by Caro was not an abuse of
discretion.
Furthermore, the absence of an instruction on Caro’s good-faith-reliance on
the FinCen opinion was properly rejected because even Chaoui, the only defendant
who had raised the defense, had conceded that the FinCen ruling that he had relied
on was “limited to licensed money-transmitters and their--the transfer of money
between licensed money transmitter and their agents,” and was totally divorced
from the question how a CTR should be filed by La Bamba, thereby rendering the
requested instruction inapplicable to the case. (Dkt. 523, pg. 36).
The District Court determined that there was no justification for the charge
because Chaoui had testified that he had never consulted an attorney or accountant
about the regulations and that he made an independent decision about how to
prepare and file the CTRs for the cash that La Bamba advanced to Cash Flow
based upon the FinCen opinion. (Dkt. 523, pgs. 56-57).
c. Specific Intent Instruction
According to Caro, the District Court’s failure to give a specific intent
instruction prejudiced him. It is Caro’s view that he was charged under “complex
and ambiguous” regulations that required the District Court to instruct the jury of
his actual knowledge of the regulatory burden.
120
The District Court declined to give Caro’s requested instruction,51
concluding that it incorrectly stated the law. The District Court opted instead to
utilize the definition of purposefully from United States v. Bailey, 444 U.S. 394,
100 S. Ct. 624, 62 L. Ed. 2d. 575 (1980). (Dkt. 523, pgs. 10-11).52 Thereafter,
counsel for both Caro and La Bamba explained they had no objection to this
resolution. (Dkt. 523, pg. 11).
Under the invited error doctrine we will not consider this argument. Love,
449 F.3d at 1157. Even if we were to consider this claim, we reverse a conviction
51
Caro’s requested instruction was:
When these instructions require you to determine if [sic] act was done
“purposely” or for the purpose of evading a law, it means that you must determine
if the act was committed voluntarily and willfully, with the specific intent to do
something the law forbids; that is with bad purpose either to disobey or disregard
the law.
(Dkt. 327, pg. 5).
52
The instruction given to the jury explained:
The word “knowingly,” as that term is used in the Superseding Indictment or in
these instructions, means that the act was done voluntarily and intentionally and
not because of mistake or accident.
The word “willfully,” as that term is used in the Superseding Indictment or in
these instructions, means that the act was committed voluntarily and purposely,
with the specific intent to do something the law forbids; that is with bad purpose
either to disobey or disregard the law.
A person who causes a particular result is said to act “ purposefully” if he
consciously desires that result, whatever the likelihood of that result happening
from his conduct.
(Dkt. 397, pgs. 30-31)
121
on the basis of a jury instruction only if “we are left with a substantial and
eradicable doubt as to whether the jury was properly guided in its deliberations.”
United States v. Puche, 350 F.3d 1137, 1148 (11th Cir. 2003). The jury was
advised adequately of the requisite intent through the inclusion of the “willingness”
instruction. (Dkt. 528, pg. 76).
d. Prosecutorial Discretion
Caro requested that the District Court specifically instruct the jury regarding
prosecutorial discretion.53 The justification for this instruction was that it would
accurately describe for the jury the prosecutor’s discretion in seeking the reduction
of a cooperative witness’ testimony. The District Court declined to give this
instruction, opting instead to rely upon the standard instructions addressing
witness bias.54 A review of these instructions demonstrate that the District Court
53
Caro’s requested instruction provided:
The law provides that a prosecutor has broad discretion in deciding what, if any,
charge to bring or not to bring, against any individual that commits an offense
against the United States. The law further provides that a prosecutor has the sole
discretion to request reduction of a cooperating witness’s potential or existing
sentence.
(Dkt. 327, pg. 6).
54
The District Court gave the following instructions:
Now, in saying that you must consider all of the evidence, I do not mean that you
must accept all of the evidence as true or accurate. You should decide whether
you believe what each witness had to say, and how important that testimony was.
In making that decision you may believe or disbelieve any witness, in whole or in
122
part. Also, the number of witnesses testifying concerning any particular dispute
is not controlling.
In deciding whether you believe or do not believe any witness I suggest
that you ask yourself a few questions: Did the witness impress you as one who
was telling the truth? Did the witness have any particular reason not to tell the
truth? Did the witness have a personal interest in the outcome of the case? Did the
witness seem to have a good memory? Did the witness have the opportunity and
ability to observe accurately the things he or she testified about? Did the witness
appear to understand the questions clearly and answer them directly? Did the
witness’s testimony differ from other testimony or other evidence?
You should also ask yourself whether there was evidence tending to prove
that a witness testified falsely concerning some important fact; or, whether there
was evidence that at some other time a witness said or did something, or failed to
say or do something, which w as different from the testimony the witness gave
before you during the trial.
The fact that a witness has been convicted of a felony offense, or a crime
involving dishonesty or false statement, is another factor you may consider in
deciding whether you believe that witness.
You should keep in mind, of course, that a simple mistake by a witness
does not necessarily mean that the witness was not telling the truth as he or she
remembers it, because people naturally tend to forget some things or remember
other things inaccurately. So, if a witness has made a misstatement, you need to
consider whether it was simply an innocent lapse of memory or an intentional
falsehood; and the significance of that may depend on whether it has to do with
an important fact or with only an unimportant detail.
***
The testimony of some witnesses must be considered with more caution
than the testimony of other witnesses.
For example, a paid informer, or a witness who has been promised that he
or she will not be charged or prosecuted, or a witness who hopes to gain more
favorable treatment in his or her own case, may have a reason to make a false
statement because the witness wants to strike a good bargain with the
Government.
So, while a witness of that kind may be entirely truthful when testifying,
you should consider that testimony with more caution than the testimony of other
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fairly and correctly stated the applicable law to the jury. The failure to give the
exact instruction requested by Caro was not an abuse of discretion.
e. Deliberate Ignorance
Caro maintains the District Court erroneously gave a deliberate ignorance
instruction.
We have explained that for a deliberate ignorance instruction to be proper,
“‘it must be based upon facts which would point in the direction of deliberate
ignorance.’” United States v. Rivera, 944 F.2d 1563, 1571 (11th Cir. 1991)
(quoting United States v. Aleman, 728 F.2d 492 (11th Cir. 1984)). A deliberate
ignorance instruction “is appropriate when ‘the facts . . . support the inference that
the defendant was aware of a high probability of the existence of the fact in
question and purposely contrived to avoid learning all of the facts in order to have
a defense in the event of a subsequent prosecution.’” Id. (quoting United States v.
Alvarado, 838 F.2d 311, 314 (9th Cir. 1987)). This instruction should not be given
when the evidence points only to actual knowledge, id., but “‘the evidence
supports both actual knowledge and deliberate ignorance, the instruction is
witnesses.
(Dkt. 397, pgs. 5-7).
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properly given.’” United States v. Arias, 984 F.2d 1139, 1143 (11th Cir. 1993)
(quoting United States v. Ochoa-Fabian, 935 F.2d 1139, 1142 (10th Cir. 1991)).
In this case, the record is clear that the deliberate ignorance instruction was
properly given because there was clear evidence that supported actual knowledge
along with deliberate ignorance. A significant part of Caro’s defense was that he
relied upon Becerra and other lower-level employees to file the CTR’s for La
Bamba.
Whereas, others testified regarding Caro’s active role in the scheme. The
government introduced evidence that Valle, a co-conspirator and co-defendant, set
up a number of shell companies through which he filed false CTRs with La
Bamba. Other witnesses testified they used La Bamba to cash checks through
fictional companies for the purpose of avoiding taxes. Some of the corporate
officers of these fictitious companies, for example, Marvin Marroquin and Eduardo
Olivar, testified that they were never in La Bamba even though La Bamba filed
CTRs for millions of dollars that reported them as being present for the
transactions.
Witnesses also testified that they participated in the filing of false CTRs with
Caro personally. Rodrigo Donadio testified that he had received the name of his
shell company, Mira, directly from Caro, and received specific instructions from
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Caro to fax copies of checks payable to shell companies directly to La Bamba, and
that cash was then delivered to Donadio by Chaoui. Adhelino Agostinho testified
that he worked directly with Caro to write checks to shell companies to avoid
paying taxes and workers’ compensation. Mario Edgardo Varela Rivera testified
to the same and specifically identified Caro as one of the individuals that cashed
the checks. Dieppa testified that Caro prepared and provided to him false invoices
for shell companies to circumvent bank scrutiny, and that Caro instructed Dieppa
to switch from one shell company to another, because Dieppa had written “too
many checks” to a particular shell company. Therefore, the District Court properly
gave the deliberate ignorance instruction.
11. Cumulative Error
Predictably, Caro contends all the errors discussed above resulted in
cumulative error. No cumulative errors exist here. United States v. Waldon, 363
F.3d 1103, 1110 (11th Cir. 2004)(citing United States v. Allen, 269 F.3d 842, 847
(7th Cir. 2001)(“If there are no errors or a single error, there can be no cumulative
error.”)).
VI. SENTENCING ISSUES55
55
The sentencing arguments raised in Appellants’ briefs pertain only to Caro’s sentence,
not La Bamba’s. Accordingly, we need not consider La Bamba’s position in this respect. See
Jernigan, 341 F.3d at 1284 n.8.
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Caro raises three issues regarding his 216 months sentence. First, Caro
alleges the District Court erred in finding that he was an organizer or leader of the
conspiracy for which he was convicted, and applying a corresponding four-level
enhancement. Next, Caro argues that the District Court similarly erred in applying
a three-level enhancement for obstruction of justice for his attempt to have a co-
conspirator “remove” certain records from his files, asserting that the District Court
failed to (1) consider his motive; and (2) explicitly find that the records were
material to his prosecution. Finally, Caro argues that his total sentence was
procedurally and substantively unreasonable.
A. Leadership Enhancement
Generally, “[a] district court’s enhancement of a defendant’s offense level
based on his role as an organizer or leader is a finding of fact reviewed for clear
error.” United States v. Rendon, 354 F.3d 1320, 1331 (11th Cir. 2003). The
government bears the burden of proving applicability of an aggravating role
enhancement by a preponderance of the evidence. Yeager, 331 F.3d at 1226.
Where “the defendant was an organizer or leader of a criminal activity that
involved five or more participants or was otherwise extensive,” a four-level
enhancement applies. U.S.S.G. § 3B1.1(a). Thus, two elements must be met: (1)
the defendant must be an organizer or leader; and (2) the conspiracy must involve
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five or more people or be otherwise extensive. United States v. Martinez, 584 F.3d
1022, 1026 (11th Cir. 2009).
Regarding the first element, a § 3B1.1 enhancement is appropriate as long as
the defendant “asserted control or influence over at least one other participant in
the crime.” Campa, 529 F.3d at 1013 (internal quotation omitted). The
commentary to § 3B1.1 states that, in “distinguishing a leadership and
organizational role from one of mere management or supervision,” the court should
consider: (1) the exercise of decision making authority; (2) the nature of
participation in the commission of the offense; (3) the recruitment of accomplices;
(4) the claimed right to a larger share of the fruits of the crime; (5) the degree of
participation in planning or organizing the offense; (6) the nature and scope of the
illegal activity; and (7) the degree of control and authority exercised over others.
U.S.S.G. § 3B1.1, comment. (n.4).
Regarding the second element, a “‘participant’ is a person who is criminally
responsible for the commission of the offense, but need not have been convicted.”
U.S.S.G. § 3B1.1, comment. (n.1); see also United States v. Njau, 386 F.3d 1039,
1041 (11th Cir. 2004) (holding that the manner of certain individuals’ assistance in
distributing counterfeit social security cards evidenced their knowledge of the
scheme and made them “participants” for sentencing purposes). For a conspiracy
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to exist, “there is no requirement that each conspirator participated in every
transaction, knew the other conspirators, or knew the details of each venture
making up the conspiracy.” United States v. Taylor, 17 F.3d 333, 337 (11th Cir.
1994).
The trial record reflects that Caro was personally involved in establishing the
shell corporations that were the focus of the conspiracy, training other participants
how to fill out the CTRs that misrepresented the nature of the transactions, was
sought out by co-conspirators to make decisions, and actively recruited numerous
other co-conspirators. In addition, as reflected in the evidence, the conspiracy had
far above the requisite five or more participants needed for this enhancement.
Accordingly, we hold that the District Court did not clearly err in applying a four-
level leadership enhancement.
B. Obstruction-Of-Justice Enhancement
We review a District Court’s finding of fact regarding an obstruction-of-
justice enhancement for clear error, but review de novo the application of the
guidelines to those facts. United States v. Bradberry, 466 F.3d 1249, 1253 (11th
Cir. 2006).
A two-level obstruction-of-justice enhancement is appropriate if “the
defendant willfully obstructed . . . the administration of justice with respect to the
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investigation, prosecution, or sentencing of the instant offense of conviction.”
U.S.S.G. § 3C1.1. The guidelines list numerous forms of conduct that may merit
an obstruction enhancement, noting that the list is non-exhaustive. See id. comment
(n.4). One form of listed conduct is “destroying or concealing or directing
. . . another person to destroy or conceal evidence that is material to an official
investigation or judicial proceeding.” Id. comment. (n.4(d)). The guidelines add
that if conduct occurred contemporaneously with arrest, it shall not warrant
enhancement unless it materially hindered the criminal proceedings against the
offender. Id.
An obstruction enhancement is justified against a defendant who instructs
another to manipulate records if the evidence suggests that the ultimate goal was to
conceal criminal wrongdoing, regardless of whether the defendant uses words such
as “destroy” or “alter.” United States v. Tampas, 493 F.3d 1291, 1304 (11th Cir.
2007) (holding that defendant’s instructions to “reconcile” records in an attempt to
conceal his embezzlement warranted an obstruction enhancement as an attempt to
produce a false record). Nevertheless, District Courts “‘must not speculate
concerning the existence of a fact which would permit a more severe sentence
under the guidelines.’” United States v. Gupta, 572 F.3d 878, 888 (11th Cir.
2009)(quoting United States v. Sepulveda, 115F.3d 882, 890 (11th Cir. 1997)).
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Caro’s challenge to an obstruction enhancement is without merit. Even
assuming that his admitted attempt to have a co-conspirator “remove” certain
relevant records from his files was done for benign reasons, he cites no authority
supporting his proposition that the District Court was bound to find that his
motivation excused his obstructive conduct. Nor does he cite any authority to
support his argument that the District Court had to explicitly find that the records
were “material” to his prosecution. Accordingly, we hold that the District Court
did not err in applying a three-level obstruction enhancement.
C. Reasonableness
Where appropriate, we examine a defendant’s sentence for both procedural
and substantive reasonableness under an abuse of discretion standard, taking into
account the totality of the circumstances. Gall v. United States, 552 U.S. 38, 51,
128 S.Ct. 586, 597, 169 L. Ed. 2d 445 (2007).
“Specifically, the district court must impose a procedurally and substantively
reasonable sentence.” United States v. Gonzalez, 550 F.3d 1319, 1323 (11th Cir.
2008). A sentence is procedurally unreasonable if the district court fails to
calculate or improperly calculates the guidelines range, treats the guidelines as
mandatory, fails to consider the § 3553(a) factors, selects a sentence based on
clearly erroneous facts, or fails to explain adequately the chosen sentence,
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including an explanation for any deviation from the guideline range. United States
v. Livesay, 525 F.3d 1081, 1091 (11th Cir. 2008). A sentence is substantively
unreasonable “if it does not achieve the purposes of sentencing stated in §
3553(a).” United States v. Pugh, 515 F.3d 1179, 1191 (11th Cir. 2008) (internal
quotation omitted).
Pursuant to § 3553(a), the sentencing court shall impose a sentence
“sufficient, but not greater than necessary,” to comply with the purposes of
sentencing listed in § 3553(a)(2), namely, reflecting the seriousness of the offense;
promoting respect for the law; providing just punishment for the offense; deterring
criminal conduct; protecting the public from future criminal conduct by the
defendant; and providing the defendant with needed educational or vocational
training or medical care. 18 U.S.C. § 3553(a)(2). The sentencing court must also
consider the following factors in determining a particular sentence: the nature and
circumstances of the offense and the history and characteristics of the defendant;
the kinds of sentences available; the applicable guideline range; the pertinent
policy statements of the Sentencing Commission; the need to avoid unwanted
sentencing disparities; and the need to provide restitution to victims. See id. §
3553(a)(1), (3)-(7). We defer to the district court’s judgment regarding the weight
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given to each § 3553(a) factor, unless the district court has made “a clear error of
judgment” under the facts of a particular case. Gonzalez, 550 F.3d at 1324.
“[W]hen the district court imposes a sentence within the advisory Guidelines
range, we ordinarily will expect that choice to be a reasonable one.” United States
v. Talley, 431 F.3d 784, 788 (11th Cir. 2005). A sentencing court need only “set
forth enough to satisfy the appellate court that [it] . . . has a reasoned basis for
exercising [its] own legal decisionmaking authority.” Livesay, 525 F.3d at 1090(internal quotation omitted).
“[T]he language of the Sentencing Guidelines is to be given its plain and
ordinary meaning.” United States v. Garey, 546 F.3d 1359, 1361 (11th Cir.
2008)(internal quotations omitted)(holding that the defendant was subject to a 12-
level enhancement under the plain language of the applicable guideline and
accompanying commentary, despite his attempt to add an element). The guidelines
provide that people convicted of knowingly filing false CTRs, as well as other
offenses involving the evasion of reporting requirements, are subject to a base
offense level of 6, plus the number of offense levels from § 2B1.1’s table
pertaining to theft and fraud corresponding to the value of the funds. U.S.S.G.
§ 2S1.3(a)(2). “For purposes of this guideline, ‘value of the funds’ means the
amount of the funds involved in the . . . reporting conduct.” Id. comment. (n.1)
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(emphasis added). Per the table cross-referenced in § 2B1.1, if the amount is
greater than $100 million, but less than $200 million, 26 offense levels are added.
U.S.S.G. § 2B1.1(b)(1)(N).
Upon careful review of the record and the parties arguments, we affirm
Caro’s total sentence in this regard. Insofar as Caro alleged that his sentence was
procedurally unreasonable due to the application of U.S.S.G. § 2S1.3 and the
corresponding loss calculation, that guideline explicitly contemplated his offense
of conviction, and the District Court calculated the loss according to its plain
language.
Substantively, the record reflects that the District Court did not abuse its
discretion. Caro’s 216-month sentence was over 6 years shorter than the
applicable guideline minimum, and was far less than the potential 130 years he
could have received if the District Court chose to run all of the statutory
maximums consecutively. 56 See 18 U.S.C. § 371; 31 U.S.C. § 5324(d)(2).
Moreover, the District Court noted the need to impose a sentence of
consequence to send a message to the community that white collar crime of the
type Caro perpetrated caused real harm by forcing taxpayers to pay more and
56
The District Court calculated Caro’s offense level to be 40, with a criminal history
category I. The advisory guidelines range applicable to Caro was 292 to 365 months’ of
incarceration, followed by two to three years of supervised release. (Dkt. 565, pg. 66). Both
Caro and the government agreed with these calculations. Id.134
damaging competition in local markets, and could not be tolerated. (Dkt. 566 pgs.
56-57) see also 18 U.S.C. § 3553(a)(2). To the extent the District Court
emphasized these factors, Caro provides no reason why such emphasis represented
a clear error in judgment. Gonzalez, 550 F.3d at 1324.
Furthermore, Caro presented extensive arguments in mitigation and several
witnesses, which the district court acknowledged considering. (Dkt. 565, pgs. 68-
129; Dkt. 566, pgs. 4-28, 59-60). Its ultimate sentence reflected that the
seriousness of the offense and a need to make an impact was tempered in part by
Caro’s personal characteristics—namely, his lack of criminal history and
respectable work in the community—as well as the unique situation in which two
of his employees received three-year sentences after their mistrial and subsequent
guilty pleas. (Dkt. 566, pgs. 53-55, 58). Based on these considerations, the District
Court exercised a reasoned basis for its decision that a 216-month sentence was
sufficient, but not greater than necessary to comply with § 3553(a). See Livesay,
525 F.3d at 1090; Pugh, 515 F.3d at 1191. Accordingly, we hold that Caro’s 216-
month total sentence was reasonable.
VII. CONCLUSION
The convictions and sentences of Juan Rene Caro and Maytemar
Corporation, d/b/a La Bamba Check Cashing are AFFIRMED.
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