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USCA1 Opinion
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
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No. 92-2073
UNITED STATES,
Appellee,
v.
JOSEPH N. CASSIERE,
Defendant, Appellant.
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No. 92-2074
UNITED STATES,
Appellee,
v.
JANET M. PEZZULL0,
Defendant, Appellant.
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No. 92-2182
UNITED STATES,
Appellee,
v.
JANET DOLBER,
Defendant, Appellant.
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APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. William G. Young, U.S. District Judge]
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Before
Selya, Circuit Judge,
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Friedman,* Senior Circuit Judge,
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and Cyr, Circuit Judge.
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Robert B. Mann with whom Mann & Mitchell was on brief for
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appellant Joseph Cassiere.
John A. MacFadyen for appellant Janet M. Pezzullo.
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Kenneth J. Fishman with whom Peter Charles Horstmann, Susan J.
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Naughton and Bailey, Fishman & Leonard were on brief for appellant
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Janet Dolber.
Margaret R. Hinkle, Special Assistant United States Attorney,
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with whom A. John Pappalardo, United States Attorney, was on brief for
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appellee.
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September 16, 1993
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*Of the Federal Circuit, sitting by designation.
Friedman, Senior Circuit Judge.
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In these consolidated appeals the three defendants
challenge their convictions of wire fraud and conspiracy to
commit that offense on various grounds. The fraud involved an
intricate and sophisticated scheme involving a technique known as
a "land flip," under which real property is purchased for a low
price, immediately resold at a much higher price to a straw or
fictitious buyer, and the higher resale price is used as the
basis for obtaining a mortgage loan that finances the entire
transaction. One of the defendants also challenges her sentence.
We affirm.
I.
A jury in the United States District Court for the
District of Massachusetts convicted the defendants Cassiere and
Pezzullo of fifteen counts of wire fraud and aiding and abetting
wire fraud, and the defendant Dolber of thirteen counts of that
crime (it acquitted her on one count), in violation of 18 U.S.C.
1343 (1988), and all three defendants of one count of
conspiracy to commit wire fraud, in violation of 18 U.S.C. 371
(1988). The district court sentenced Cassiere to 46 months
imprisonment, followed by five years of supervised release,
Pezzullo to 24 months imprisonment, followed by three years of
supervised release, and Dolber to 39 months imprisonment,
followed by three years of supervised release. Each defendant
also was ordered to make restitution.
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The substantive crimes for which the three
defendants were convicted involved their participation in a
scheme to defraud six mortgage lenders through a series of
fifteen land flips, in all but one of which the two sales of the
property were closed on the same day, often the second
immediately following the first. Cassiere was the senior partner
of Pezzullo in a two-person law firm that handled all the
closings in the land flip transactions. Dolber was a real estate
appraiser, whose appraisals of the properties were relied on by
the mortgage lenders in making their loans.
Rate Line was a mortgage broker which, for a fee,
took loan applications and referred them to lenders. Thomas
DeNunzio owned Rate Line, and he and his employee loan broker,
Glenn Monteiro, controlled Rate Line. DeNunzio and Monteiro
planned and organized the fraudulent scheme, under which one of
three straw corporations they controlled (Half & Half, Inc., ZBA
Corp. and Chantel, Inc.) purchased foreclosed property for cash
and resold the property on the same day to straw buyers at a much
higher price. Mortgage loan funds received from the lending
institutions were used to pay the corporation controlled by Rate
Line and that corporation then paid for the first sale. The
balance then went to DeNunzio and Monteiro, channeled through
Rate Line.
DeNunzio and Monteiro pleaded guilty to another
indictment and they both testified for the government in the
present case. They described in detail how the scheme operated,
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the roles Cassiere, Pezzullo, and Dolber played in the scheme,
andDeNunzio's andMonteiro's relationshipwith thethree defendants.
An example of the operation of the scheme was as
follows:
On April 12, 1991, Half & Half Corporation closed
the purchase of property at 104 Menlo Street for $102,900.
Moments later Half & Half closed the sale of the property to Fred
Strangis, one of the dummy purchasers, for $228,000. Dolber
previously had appraised the property at $228,000. Based on this
appraisal and Strangis' certification that he would reside at 104
Menlo Street, Rate Line gave Strangis a mortgage loan of
$182,400, which was eighty percent of the final sale price. Rate
Line, in turn, sold Strangis' mortgage to CenTrust Mortgage
Corporation. Neither Half and Half nor Strangis brought a down
payment to the double closing. Instead, Monteiro provided a
cashier's check for the twenty percent down payment ($45,600) the
lender required the purchaser to make.
Cassiere and Pezzullo recorded both deeds and
disbursed the funds they had received from the lender. They paid
the original owner the $102,900 owed by Half & Half, they paid
the closing costs, including attorneys' fees due them, and gave
the balance to Monteiro and DeNunzio.
Cassiere, assisted by Pezzullo, was the closing
attorney in each of the double closings. They represented the
interests of the lending institution that was providing, through
Rate Line, the mortgage loan to the final buyer. The closing
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attorney serves as "the eyes and ears" of the lending institution
at the closing. The lenders expected the attorneys to alert them
to anything unusual. Neither Cassiere nor Pezzullo notified any
of the six lenders that their law firm was closing twice on the
same property on the same day at substantially different prices.
Dolber was the real estate appraiser in thirteen of the flips.
The lending institutions relied on her appraisals to determine
the value of the properties upon which they were making loans.
The appraisal alerts the lenders to the property's condition and
allows them to determine their ability to recoup their investment
should the borrower default on the mortgage.
The lenders generally made loans of the lesser of
eighty percent of the sale price or fair market value of the
property. The six lenders made mortgage loans totalling more
than $2.6 million on the properties that were the subject of the
land flips involved in this case.
Ten of the thirteen appraisals Dolber made of the
properties involved in the land flips were for an amount
identical to the final sale price, which ranged from $160,000 to
$231,000. (The original sale prices of those properties ranged
from $42,000 to $132,000.) Two of the three other appraisals
were for $1,000 higher than the second sale price; the third was
for $2,000 higher.
II. Sufficiency of the Evidence
Pezzullo and Dolber, but not Cassiere, challenge the
sufficiency of the evidence to support their convictions.
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In reviewing the record in such a challenge, we
"look[] to the evidence as a whole, including reasonable
inferences drawn from it, in the light most favorable to the
verdict, to determine whether a rational trier of fact could have
found the defendant guilty beyond a reasonable doubt." United
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States v. Plummer, 964 F.2d 1251, 1254 (1st Cir.), cert. denied,
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113 S. Ct. 350 (1992). "We do not weigh witness credibility, but
resolve all credibility issues in favor of the verdict. The
evidence may be entirely circumstantial and need not exclude
every reasonable hypothesis of innocence; that is, the factfinder
may decide among reasonable interpretations of the evidence."
United States v. Batista-Polanco, 927 F.2d 14, 17 (1st Cir. 1991)
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(citations omitted). Thus viewed, the record supports the
convictions.
A. The Wire Fraud Convictions
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To prove wire fraud the government must show: 1) a
scheme to defraud by means of false pretenses, 2) the defendant's
knowing and willful participation in the scheme with the intent
to defraud, and 3) the use of interstate wire communications in
furtherance of the scheme. United States v. Serrano, 870 F.2d 1,
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6 (1st Cir. 1989). To support convictions of aiding and abetting
wire fraud, the government must prove that the "defendant
associated [herself] with the underlying venture, participated in
it as something [she] wished to bring about, and sought by [her]
actions to make it succeed." United States v. Clifford, 979 F.2d
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896, 899 (1st Cir. 1992) (citing Nye & Nissen v. United States,
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336 U.S. 613, 619 (1949)).
Neither Pezzullo nor Dolber challenges the existence
of a scheme to defraud. The scheme is shown by DeNunzio's and
Monteiro's lengthy testimony about the details of their plan to
trick the lending institutions into making risky loans that were
warranted by neither the final purchaser's ability to repay the
loan nor the particular property's true market value. Pezzullo
and Dolber also do not challenge the use of interstate wire
communications to effectuate the plan, as demonstrated at trial
by testimonial and physical evidence of the use of fax machines
and telephone conversations throughout the scheme.
Pezzullo and Dolber, however, claim that they were
unaware of the scheme and therefore were not knowing and willful
participants in it. We hold, however, that the jury reasonably
could have concluded from the voluminous evidence at trial that
both Pezzullo and Dolber knowingly participated in the scheme
with intent to defraud, and also aided and abetted the fraud.
1. Pezzullo
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Pezzullo participated in all the double closings,
almost all of which took place at the office of the Cassiere &
Pezzullo law firm. Fred Strangis testified that Pezzullo's role
was to "prepare all the papers and as you're signing them, would
bring them to you, try to get you to read them, try to explain
them to you." Frank Andrews and Dennis Griffin, two other straw
final buyers, and Marlissa Pina, representing one of the
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controlled corporate purchasers, corroborated Strangis'
testimony.
Because the lending institutions give higher
mortgages to individuals who live in the property they buy,
Strangis signed Residential Loan Applications and Owner Occupancy
Affidavits, which Pezzullo gave him, stating that he intended to
occupy the property. Strangis was the final purchaser of four
properties, however, and at closings on December 12, 1990,
February 6, 1991, April 12, 1991, and April 15, 1991, he signed
forms stating that four different properties would be his primary
residence. Other straw final purchasers similarly signed
multiple owner-occupancy documents at the closings: Peter Pina
within one month and a half signed three such forms; Jeanette
Monteiro within a four-month period twice signed such documents;
Dennis Griffin in one month signed two such documents; and Frank
Andrews within three months signed two. Pezzullo witnessed the
signing of each of these documents.
All of the lenders required that the purchaser bring
a twenty percent down payment to the closing. Neither the straw
buyers making the second purchases nor the corporations making
the first purchases brought down payments with them. Instead,
Cassiere or Pezzullo notified Monteiro before the closing of the
amount of the down payment and he would bring a cashier's check
for that amount to the closing. Nonetheless, the HUD-1
Settlement Statements that Cassiere filled out at the closings
reported that the buyers had brought the money.
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The only function of the officers of the
corporations that DeNunzio and Monteiro controlled was to sign
legal documents designed to keep Monteiro's and DeNunzio's roles
hidden. Pezzullo, however, was aware that DeNunzio and Monteiro
controlled the corporations, since Half & Half used the Cassiere
and Pezzullo offices as its corporate address. At the double
closings where each property was first sold and then purchased,
neither Cassiere nor Pezzullo told the corporate officers what
the documents they were signing meant, or that they were buying
and selling real property.
Pezzullo handled the distribution of the proceeds
from the second half of the flip. The proceeds were "the
difference between the loan amount [from the lender] minus the
first sale price, minus any closing costs." After Cassiere and
Pezzullo had completed the deeds on the two sales following the
double closings, Pezzullo disbursed the funds that came from the
final purchaser's mortgage. Pezzullo gave Monteiro the amount
due to the original owner from the first half of the flip,
returned the down payments to Monteiro and DeNunzio, and
distributed the remaining proceeds to Monteiro and DeNunzio for
them to divide. In addition to distributing the mortgage funds,
Pezzullo prepared disbursement sheets noting the funds received
and the funds disbursed.
Paul Pires, as Half & Half's president, first bought
and then sold property in nine of the flips. At each closing, in
Pezzullo's presence, he signed a HUD-1 form and a statement
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certifying that he had received a copy of the HUD-1 form, yet
neither Cassiere nor Pezzullo ever gave him that document.
George Gundensen, president of CenTrust Corporation,
one of the lending institutions, testified that the closing
attorney is expected to fill in all blank spaces in loan
documents before having the mortgagor sign the documents. Some
of the final buyers signed forms at the closing, however, that
were completely blank. In fact, Cassiere and Pezzullo discussed
in Marlissa Pina's presence that they were asking her to sign a
blank document.
Had the lending institutions been informed that the
same law firm had closed twice on the same property on the same
day and with such wide price disparities, they would have either
"suspend[ed] the loan for further information or cancell[ed] the
loan." Because of the large difference between the two sale
prices, the lending institution would have believed that it
"would be making a loan on a piece of property, the value for
which wouldn't support the amount of the loan being made."
The foregoing evidence, together with additional
evidence in the record we have not discussed, justified the
jury's conclusion that Pezzullo both committed wire fraud and
aided and abetted its commission.
2. Dolber
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Although Dolber never participated in the closings,
she had a vital role in making the scheme work. Her appraisal
forms, which she submitted to Rate Line, supported the high
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second sale price and thus resulted in the higher mortgages. The
lenders relied heavily on the accuracy of Dolber's appraisals.
As noted, every appraisal she submitted on the thirteen land
flips for properties was identical to the second sale prices, or,
in three instances, slightly higher.
DeNunzio testified that he wanted to use Dolber as
the appraiser because he knew from talking to her that "she would
bring in property values as high as possible," and that she
"would use non-arm's length transactions for sales comparisons."
By non-arm's length transactions, DeNunzio meant "that the
comparable sales used were not a true sale with a wanting
borrower and a wanting seller." Instead, the comparable sales
she used often were previous flips that Rate Line had
established, and, therefore, did not reflect true market value.
Suburban Mortgage Company made a review appraisal of
one of the properties to evaluate Dolber's appraisal. Dolber had
appraised the property at $210,000 and described the neighborhood
as "a mixture of similar well maintained income properties and
medium well maintained single family homes. . . . The
neighborhood is stable at this time and shows that revitalization
has been completed and upgraded the area. . . . No adverse
market conditions from neighborhood."
The review appraiser concluded that the market value
of the property as of the date of Dolber's appraisal was $50,000.
In response to the question "Is the appraiser's overall
description of the neighborhood complete and accurate?," the
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review appraiser answered "No" and explained that "This area is
in the midst of a high crime drug area of the city. There are
boarded up buildings, fire damaged units and vacant apartments in
buildings. This is the least desirable area in the city within
which to live."
Monteiro accompanied Dolber in viewing some of the
appraised properties. He told her of the proposed sale price for
the second half of the flip. Usually, the appraised value was
very close to the intended sale price. Dolber "appraised at the
value needed, so we [Rate Line] continued to use her."
There was ample evidence upon which the jury could
conclude that Dolber frequently misstated the conditions of the
appraised properties, making them appear more valuable than they
were. Thus, in her appraisal of 69 Turner Street, Dolber wrote
that the property was in need of "cosmetic and minor roof
repair," the bathrooms were "fully functioning," the "[k]itchen
cabinets are adequate," "two units are rented at this time," and
the third unit "will be occupied by the owner." She rated the
property's functional utility as "average." Strangis, who was
the final purchaser and was present during Dolber's appraisal,
testified that the property was "[b]asically a shell of a house,"
and it was not occupied at the time of her inspection or any time
since.
It had a lot of broken windows . .
. . The porch was broken off, a couple
of the gutters were gone. The inside
had had no plumbing. Most of the wiring
was gone; whatever was still there was
hanging out of the ceiling. . . . [I]f
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there were any tubs and toilets were
left in they were turned upside down.
There were no stoves, no cabinets. . . .
It was nowhere near liveable. . . .
A lot of the places didn't have doors.
In her appraisal of 34 Harvard Street, Dolber wrote
that "[a]ll three units are rented at this time." Monteiro
testified that none of the units was rented at the time of the
appraisal. Dolber described the property as having "been
maintained in average to good condition," with "all mechanical
and electrical services [] fully functioning." Martin Pina, the
final purchaser of this property, testified that it was "in very
bad condition. There was no plumbing, no pipes, no copper at all
in the building, it had been stripped out. The building was
being used by drug users. There were syringes on the inside of
the building. . . . [T]here was a lot of structural damage on
the inside." Although Dolber certified in her appraisal that she
"personally inspected the subject property, both inside and out,"
Monteiro and DeNunzio testified that Dolber never entered the
premises during her appraisal, and Dolber admitted as much to
DeNunzio. Furthermore, Dolber wrote that the property was
divided into three units, but Pires testified that there were six
units. Dolber described 11 Lebanon Street as needing "only minor
cosmetic repair" and that it "appear[e]d to be in average
condition." Monteiro testified that all of the copper pipes were
removed from within the house and that both the interior and
exterior of the house were in poor condition. Dolber reported
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that there were no units vacant, but Monteiro testified that the
property was unoccupied at the time of appraisal. George
Strangis testified that there was "no plumbing in the basement,
it had been all ripped out," only one of the three hot water
heaters stood upright, and it was not connected, "the other two
were laying on their side," "[t]he bathroom ceiling on the first
floor . . . had been partially ripped down," and "[t]he heating
systems weren't operational."
Dolber made similar misstatements regarding the
condition and occupancy of other properties she appraised.
Although she stated that three units at 18 Winthrop Street were
rented at the time, Fred Strangis and Frank Andrews testified
that only one of the four units was then rented. Dolber
described 23 Temple Street as having "been maintained in average
to good condition" with "all mechanical and electrical services
[] fully functioning," and reported that "[a]ll three units are
rented at this time." Martin Pina, however, testified that at
the time of the appraisal the property was boarded up, had no
electricity, the plumbing had been "filled with some type of
Ethyl glycol or antifreeze to stop the pipes from bursting,"
there was no water, and nobody lived in the building. Dolber
also repeatedly appraised multiple properties for the same
purchaser, and each time reported that the particular property
would be owner-occupied. Thus, in her appraisals she certified
that Fred Strangis would occupy four properties, Griffin would
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occupy two, Andrews would occupy two, and Peter Pina would occupy
three.
The appraisal form required the appraiser to compare
the subject property with recent sale prices of similar
properties in the neighborhood, which are known as "comparable
sales." In her appraisals, Dolber relied on data from the
publication County Comps, which listed the sale prices for closed
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sales, as a source of information about comparable sales. Thus,
for example, in her appraisal of 79-81 Keith Street, Dolber used
three comparable sales and identified County Comps as her data
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source.
The County Comps she relied on, however, showed that
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each of the properties she used as comparable sales had been sold
twice within a short period for vastly different prices.
Similarly, in her appraisal of 85 Ford Street, Dolber relied on
County Comps for her comparable sales. County Comps showed one
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of those properties as involving two sales on the same day, with
the second price more than double the first price.
Dolber's actions in connection with her proposed
acquisition of 30-32 Water Street showed her awareness of how the
fraudulent scheme was operating and her willingness to
participate in it. She asked DeNunzio to handle a loan for her
on the property and proposed that her nephew, Adam Belanger, and
his wife, Karen, serve as straw buyers since Dolber had a bad
credit rating. After DeNunzio told Dolber that the Belangers
would not qualify for a loan because they did not earn enough
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money, Dolber told DeNunzio that she would give Karen a job, and
asked how much salary Karen needed to earn to qualify for the
loan.
Dolber sent DeNunzio a verification of employment
form for Karen from Whitinsville Water Company, a company
Dolber's father owned, which was "blank where the employment
numbers should have been filled in on the form." Dolber told
DeNunzio to fill in the blanks, but when he told her he could not
do that, she undertook to do so. Thereafter, DeNunzio received a
completed verification-of-employment form, a W-2 statement, and a
pay stub for Karen Belanger. Both Samuel Carpinetti,
Whitinsville Water Company's general manager, and Karen Belanger
testified that Karen never worked for the company.
Dolber argues that the government's proof failed
because it did not establish the appraised properties' fair
market value. She cites no precedent, however, and we know of
none, that requires the government to prove a precise fair market
value as an element of the crime of wire fraud. To the contrary,
she notes that "market value was not in and of itself an element
of the offenses with which Ms. Dolber was charged." Furthermore,
the evidence justified a jury conclusion that Dolber's appraisals
falsely represented the condition and thereby the value of the
properties.
Again, citing no case law to support her contention,
Dolber argues that "the jury was left to speculate as to what
conduct on the part of Ms. Dolber was inappropriate," because the
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government did not point to any code of professional ethics that
governed her behavior. Violation by the defendant of a code of
ethics is not an element of the crime of wire fraud.
Dolber presented a version of the facts which
portrayed her as an innocent victim of DeNunzio's scheme to
defraud the lenders. The foregoing evidence, and other evidence
we have not discussed, however, provided the jury with an ample
base for rejecting Dolber's claim, and concluding that she
committed wire fraud and aided and abetted its commission.
B. The Conspiracy Convictions
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To prove that a defendant is a member of a
conspiracy, the government must demonstrate beyond a reasonable
doubt that: 1) the defendant agreed to commit an unlawful act, 2)
the defendant voluntarily participated in the scheme, and 3) one
of the conspirators took an affirmative step toward achieving the
conspiracy's purpose. Braverman v. United States, 317 U.S. 49,
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53 (1942); United States v. Gomez-Pabon, 911 F.2d 847, 852 (1st
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Cir. 1990), cert. denied sub nom. Guzman v. United States, 498
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U.S. 1074 (1991). To prove that a defendant "belonged to and
participated in the conspiracy, the government [must] prove that
he intended to agree and that he intended to commit the
substantive offense." United States v. Nueva, 979 F.2d 880, 884
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(1st Cir. 1992), cert. denied, 113 S. Ct. 1615 (1993).
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"[C]onspiratorial agreement need not be express so
long as its existence can plausibly be inferred from the
defendants' words and actions and the interdependence of
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activities and persons involved." United States v. Boylan, 898
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F.2d 230, 241-42 (1st Cir. 1990), cert. denied, 498 U.S. 849
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(1990) (citations omitted). Evidence of participation in the
conspiracy may include "inferences from surrounding
circumstances, such as acts committed by the defendant that
furthered the conspiracy's purposes." Gomez-Pabon, 911 F.2d at
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853. Furthermore, the government is under no duty to prove that
the defendant knew each of the objectives of the conspiracy or
all the details. Id.
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Pezzullo and Dolber do not deny that there was a
conspiracy to commit wire fraud, and the record leaves no doubt
that one existed. They argue, however, that the government did
not prove that they joined the conspiracy. Evidence relating to
the substantive offenses discussed in Part II.A, also supports
the jury verdict of conspiracy. Moreover, once the evidence
establishes the existence of a conspiracy, lesser evidence may
suffice to show a defendant's connection with the overall
conspiracy. United States v. Smith, 726 F.2d 852, 866 (1st Cir.
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1984).
As shown above, Pezzullo was aware that the second
purchasers did not themselves provide the down payments on the
market price, although required to so do by the HUD-1 forms that
she and Cassiere had them sign. She also saw that the same
individuals repeatedly attended closings on properties they
certified would be owner-occupied. She was aware of the
significant differences in the prices of the two sales in the
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land flips. At the first flip Cassiere discussed with Pezzullo
prior sales of 59-61 Howard Street. Pezzullo had done the title
work for that closing, and Cassiere was interested in learning
what the earlier sale prices were to see if he could justify the
higher price to be paid in the double closing.
An inference could have been drawn that Dolber
followed Monteiro's wishes that her appraisals support the higher
sales prices in the second flips. She repeatedly misstated the
condition and occupancy of the properties she appraised, thereby
increasing the amounts the lenders would loan on the security of
the properties. Dolber's use of her nephew and his wife as
straws in an attempt to purchase 30-32 Water Street for her was
further evidence that she was aware of how DeNunzio and Monteiro
conducted illegal property sales.
Don Peters, of First Union Mortgage Corporation,
became suspicious about an appraisal that Dolber had conducted on
a mortgage First Union purchased from Rate Line. He asked Dolber
to explain the apparent increase in the value of the property
within one day which he noted from his review of Banker and
Tradesmen, a listing of property values and closing dates.
Dolber called DeNunzio, told him of her conversation with Peters,
and asked, "what's that all about?"
In a subsequent conversation, DeNunzio told Dolber
that he had checked out the situation, that there had been a
prior foreclosure sale, but that she would not have known about
it because that sale had not been recorded at the time she did
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the appraisal. When Dolber told him that Peters had requested a
written response, DeNunzio told her that he wanted to review the
letter before she sent it out. The letter Dolber wrote Peters
provided an explanation similar to the one DeNunzio had given
her: the low first sale price was due to the fact that the
property was purchased from foreclosure, and thus did not reflect
the true market value. At the time she conducted her appraisal,
none of her data sources mentioned that sale.
On another occasion Dolber called DeNunzio and asked
him to meet her outside a bar but refused to tell him why she
wanted to do so. He met her there and they had their
conversation inside her car. Dolber told him that she needed
photographs of four of the properties she had appraised since
Monteiro, and not she, had taken the photographs. She explained
that she needed the pictures in her records, which the United
States government had requested. He agreed to provide her with
the pictures.
The evidence supports the jury finding that Pezzullo
and Dolber were knowing and willing participants in a conspiracy
to defraud the lending institutions. The government is not
required to prove that each co-conspirator knew every detail of
the scheme; "[a]ll that is required is to show 'the essential
nature of the plan and their connections with it.'" United
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States v. Rivera-Santiago, 872 F.2d 1073, 1079 (1st Cir.)
___________________________
(quoting Blumenthal v. United States, 332 U.S. 539, 557 (1947)),
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cert. denied sub nom. Castro-Poupart v. United States, 492 U.S.
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910 (1989).
III. Questions Asked By the Jurors
At the beginning of the trial, before any of the
attorneys had made opening statements, the court told the jury
that it could ask the witnesses questions. The court explained
that the questions had to be written; that the written questions
would be submitted to the court, which would review them; and
that the court might not ask a jury question if the question
could not be put in a proper legal form or it "couldn't make any
legal difference at all." During the 24-day trial, the court
asked the witnesses eleven questions that the jurors had
submitted.
The defendants did not object to the court following
the practice thus to ask questions or, indeed, to any particular
question asked. "In the absence of a timely objection our review
is limited to examining the record for plain error, and we will
correct only particularly egregious errors . . . that seriously
affect the fairness, integrity or public reputation of judicial
proceedings." United States v. Munson, 819 F.2d 337, 340 (1st
________________________
Cir. 1987) (internal quotations omitted).
In United States v. Sutton, 970 F.2d 1001 (1st Cir.
_______________________
1992), decided after the trial in the present case, we upheld the
actions of the same district judge in employing this practice in
a mail and wire fraud prosecution, in which the court asked
witnesses seven questions submitted by the jurors. We held that
-22-
22
"especially in complex cases," "allowing juror-inspired questions
in a criminal case is not prejudicial per se, but is a matter
______
committed to the sound discretion of the trial court." Id. at
__
1005. We noted that other circuits similarly had so concluded.
Id.
__
We explained that "[a]llowing jurors to pose
questions during a criminal trial is a procedure fraught with
perils. In most cases, the game will not be worth the candle.
Nevertheless, we are fully committed to the principle that trial
judges should be given wide latitude to manage trials." Id.
__
Although we stated that "in most situations, the risks inherent
in the practice will outweigh its utility," we held that we would
review the propriety of the practice on a case-by-case basis
based on the totality of the circumstances. Id.
___
In Sutton, we held that for four reasons, the
______
court's asking of the juror questions was not reversible error.
First, Sutton "neither objected nor requested any additional
safeguards." Id. at 1006. Second, "[b]ecause [Sutton] was a
___ ______
factually complex case in which a greater-than-average risk of
jury confusion existed, the positive value of allowing juror-
inspired questioning was relatively high." Id. Third, the court
___
used appropriate procedural safeguards, such as requiring that
the questions be presented in writing to the court and explaining
to the jury that the court might not ask all juror questions.
Id. Fourth, "the questions themselves were few in number and
___
bland in character." Id. (footnote omitted).
___
-23-
23
The first three reasons unquestionably are equally
applicable here: the defendants did not object to the
questioning, the case was factually complex, and the court
adopted procedural safeguards nearly identical to those in
Sutton.
______
Sutton involved seven jury questions the court asked
______
during a 2 1/2 day trial. The present case involves eleven
questions asked during a 24-day trial. The issue, thus, is
whether this significantly larger number of questions so
seriously undermined the fairness of the trial as to constitute
plain error. We answer that question negatively.
The juror questions the court asked were relatively
"bland in character," id., and designed to clarify and explain
__
testimony already given. For example, one juror wanted Paul
Pires to identify the word that followed his signature on one of
the exhibits. The word was "Pres." Another juror wanted Nancy
Rullo to explain what the "preliminary title" that she referred
to in her testimony meant. One juror sought clarification of who
had done the appraisal the witness was discussing. Although the
defendants have objected to allowing juror questions and to the
number asked in this case, they have not now argued that any
specific question was improper. Other courts
of appeals have upheld convictions where the court asked varying
numbers of questions that the jurors proposed. In United States
_____________
v. Lewin, 900 F.2d 145 (8th Cir. 1990), the court, over
_________
objections made in the jury's presence, asked six questions. The
-24-
24
Fourth Circuit upheld a conviction in which the trial court asked
ninety-five juror questions during a three-week trial.
DeBenedetto v. Goodyear Tire & Rubber Co., 754 F.2d 512 (4th Cir.
_________________________________________
1985). The Fifth Circuit approved the asking of one juror
question. United States v. Callahan, 588 F.2d 1078 (5th Cir.),
__________________________
cert. denied, 444 U.S. 826 (1979).
____________
In each of these cases the court focused on the
effect of the questions on the trial, not the number of
questions, in and of itself. Thus, the Lewin court approved the
_____
asking of juror questions because they were factual in nature and
merely "sought clarification of previous testimony and did not
introduce new or unrelated subject matter." 900 F.2d at 148. In
DeBenedetto, despite the large number of questions, the court
___________
"examined carefully each of the questions propounded by the
jurors and [] perceive[d] no bias in any of the questions." 754
F.2d at 517. In Sutton, we noted that "juror-inspired
______
questioning becomes particularly troublesome when questions are
directed at the [criminal] defendant." 970 F.2d at 1006 n.6. In
Sutton, the court asked only one such question of the defendant.
______
Id.
___
In the present case, the court asked the defendant
Cassiere four juror questions during his testimony which spanned
three days. Here, as in Sutton, the "appellant did not object to
______
[the questions]; and he has not argued on appeal that th[ese
questions were] improper or harmful." Id. We cannot say that
__
the district court committed plain error in asking the defendant
-25-
25
Cassiere four relatively benign juror questions during Cassiere's
three days of testifying.
The defendants argue, however, that by asking the
jury questions during the testimony of the witnesses, the court
improperly interfered with their ability to conduct direct and
cross-examination of the witnesses. The district court, however,
has broad discretion to control trial proceedings. Id. at 1005
__
("we are fully committed to the principle that trial judges
should be given wide latitude to manage trials"); see also United
________ ______
States v. Slone, 833 F.2d 595, 597 (6th Cir. 1987) (The court
________________
"must see that the issues are not obscured and that the testimony
is not misunderstood."). While objections from opposing counsel
and sidebars may be similarly disruptive of counsel's
examination, they are interruptions that are also critical to the
fair and rational progression of the trial. We cannot say that
the court's asking of the jurors' questions so interfered with
counsels' questioning of the witnesses as to constitute a denial
of the defendants' right to a fair trial.
Although we uphold the district court's asking the
juror questions in this case, we reiterate what we said in Sutton
______
regarding the use of this practice. As we there indicated, the
practice should be reserved for exceptional situations, and
should not become the routine, even in complex cases. The
district court should inform counsel at the earliest possible
time of its intention to use this technique and allow counsel the
opportunity to object. The court should instruct the jurors that
-26-
26
they should limit their questions to important points, that at
times the rules of evidence will dictate that the court not ask a
question, and that the jurors should draw no implication from the
court's failure to pose a juror-proposed question to the jury.
The jurors should reduce their questions to writing and pass them
to the court. Before asking a question, the court should offer a
sidebar conference to give counsel the opportunity to object.
Finally, in its charge, the court should include a prophylactic
instruction, along the lines suggested in Sutton.
______
IV. Evidentiary Rulings
The "trial court's rulings on relevance and
admissibility will not be disturbed unless there is an abuse of
discretion." United States v. Drougas, 748 F.2d 8, 24 (1st Cir.
_________________________
1984).
A. Admission of the Publication County Comps
_________________________________________
Dolber challenges the court's admission of seven
reports from the publication County Comps.
____________
Federal Rule of Evidence 803(17) allows, as an
exception to the hearsay rule, the admission of "[m]arket
quotations, tabulations, lists, directories, or other published
compilations, generally used and relied upon by the public or by
persons in particular occupations."
County Comps publishes a monthly listing of
______________
properties sold, the sales prices, and the dates the sales were
closed. Real estate brokers, insurance agents, and appraisers
buy County Comps. The operating manager of County Comps
_____________ _____________
-27-
27
testified that the reports admitted were authentic. Dolber
referred to County Comps as her source of data for comparable
_____________
sales in her appraisals.
Dolber argues that "although the County Comps
listings at first blush appear to deal with compilations of
relatively straightforward facts, this evidence required a
subjective analysis of other facts." Individuals might differ in
the conclusions they draw from the data in County Comps. But
____________
that is not the test for admission of the publication. The
evidence shows that County Comps is a "published compilation[],
____________
generally used and relied upon by" appraisers. The court did not
abuse its discretion in admitting the evidence.
B. Questions Asked of Cassiere Regarding Professional
_____________________________________________________
Standards
_________
Cassiere argues that the government held him to a
higher standard of conduct because he is an attorney, based on
the following colloquy between the prosecutor and Cassiere:
Q. And in addition to being aware of
the responsibilities as a closing
attorney, sir, you as an attorney
have certain responsibilities in
conjunction with representing
anybody, right?
A. Yes.
Q. And those duties and
responsibilities are set forth in
such things as a canon of ethics,
are they not?
Cassiere objected and, after a sidebar conference,
the court overruled the objection and explained:
-28-
28
I'm going to be very express [in my
charge] that sloppy or careless work is
not criminal. It may be malpractice,
but it's not criminal. But I've decided
. . . that the failure to make a
disclosure of material fact when under a
duty to make a disclosure which duty is
known to the individual with a specific
intent to defraud by failing to make the
disclosure constitutes a violation of
the statute.
The questioning continued:
Q. You're aware of the canons of
ethics governing attorneys?
A. I am.
Q. And the disciplinary rules?
A. I am.
Q. And I gather you were also a former
prosecutor?
A. I was.
Q. You're aware of the criminal laws?
MR. O'BRIEN: Objection, your honor.
THE COURT: No. overruled.
A. I'm not aware of all the criminal
laws. I'm aware of the criminal
laws that I enforced.
Q. You're aware of, you were aware in
June of 1990 of these things as
well, I gather?
A. I don't know what you mean by these
things.
Q. The canons of ethics?
A. Yes.
Q, The disciplinary rules?
A. Yes.
-29-
29
Q. And you recognized that as an
attorney you were under certain
obligations?
A. Under certain obligations, yes.
Q. Those obligations included,
included a
responsibility to act truthfully?
A. Uh-huh.
Q. And honestly?
A. Correct.
Q. And disclose certain information?
A. I don't know what you mean by
disclose certain information.
The court then sustained an objection and the
prosecutor moved on.
To comprehend Cassiere's role in this scheme, it was
important for the jury to understand how Cassiere and others
viewed his duties as a closing attorney and whether he believed
he had violated those duties. These facts were important for the
jury in determining whether his participation in the scheme to
defraud his clients, the lending institutions, was intentional
and knowing. The district court has discretion to determine the
scope of cross-examination, United States v. Tracey, 675 F.2d
________________________
433, 437 (1st Cir. 1982), and did not abuse its discretion in
allowing the preceding colloquy.
C. Exclusion of Land Deeds
_______________________
Cassiere challenges the court's exclusion of three
land deeds "that the defendant said supported his view of why the
real estate values in question were reasonable." Cassiere
-30-
30
testified that he relied on the prior deeds for sales in 1986 and
1987 in making his title examination for properties that were the
subject of the indictment. Cassiere testified that he also
relied on those deeds, which listed past sale prices, as
indications of the value of the property at the time he conducted
the title searches.
The court excluded these deeds "on the ground of
relevance [because] they're [sic] conveyance is too remote in
time given, and I take judicial notice at the side bar of the . .
. marked decline in real estate values within the period of time
and material to this lawsuit." The court allowed Cassiere to
testify that these deeds formed the basis of his conclusion that
the second sale prices in the land flips were justified. Since
the deeds were for sales that occurred four to five years before
those at issue in the case, and since the evidence was cumulative
to Cassiere's testimony, the court did not abuse its discretion
in excluding the deeds.
D. Admission of Evidence Under Rule 404(b)
_______________________________________
Pezzullo challenges the court's admission under
Federal Rule of Evidence 404(b) of evidence concerning a real
estate transaction not charged in the indictment. Dolber argues
that the court erred in admitting under that rule evidence
concerning a similar transaction and a tape recorded conversation
between herself and DeNunzio.
1. The Two Land Transactions Not Charged in The
________________________________________________
Indictment
__________
-31-
31
Cassiere entered into negotiations with Hybernia
Savings bank to buy 23 Newark Street, which the bank recently had
foreclosed. Pezzullo signed a purchase and sales agreement with
the bank for $65,000. Cassiere offered to sell the property to
Robert Felicio and Richard Rego. His plan was to pay Felicio and
Rego to renovate the property and, thus, provide them with money
for their down payment. Before work was begun on the property,
Cassiere had Felicio and Rego inquire of Rate Line whether they
could qualify for a mortgage loan.
Cassiere told DeNunzio that he was structuring the
sale as a "no money down flip." After receiving loan information
from Felicio and Rego at the law firm, Monteiro told DeNunzio
that he was upset that Felicio and Rego "were sitting in the
office along with Joe Cassiere [and] were making jokes about
Glenn Monteiro looking the other way in regards to processing a
loan the way it should be."
Cassiere and Pezzullo decided that they would not
make enough profit on the resale so they told Felicio that the
deal was off. Cassiere later negotiated a second purchase
agreement with Hybernia for $35,000. DeNunzio asked Dolber to
appraise the property, which she valued at $157,000. The same
month, Pezzullo purchased the property for $35,000.
Dolber also sought to buy property on Water Street
using her nephew and his wife as straw buyers due to her own poor
credit rating. See II.A above. The loan fell through when the
___
lender refused to do any more business with DeNunzio.
-32-
32
2. The Tape Recording
__________________
Following inquiries by the lending institutions,
DeNunzio tape-recorded several telephone conversations. After an
evidentiary hearing, the court admitted a tape containing a phone
conversation between Dolber and DeNunzio. The conversation was
short, and according to DeNunzio was recorded by accident,
because the call from Dolber came in on his call waiting service
while he was conducting another conversation that he was taping.
Once DeNunzio finished with each conversation he turned the
recorder off and back on again to record his own statement of
when and with whom the conversation had taken place. After
recording this information, he clicked Dolber back in through
call waiting and recorded his conversation with her.
In that conversation, Dolber told DeNunzio that
although Karen Belanger did not work at Whitinsville Water
Company, they could fill in the appropriate employment
verification forms as though she did, and at whatever salary was
necessary. The recording was cut off abruptly at the end.
3. Admissibility of the Evidence
_____________________________
(a) Prior to reviewing the court's admission
of the foregoing evidence under Rule 404(b), we must determine
whether the making of the tape recording was legal, and if so,
whether the government adequately demonstrated the tape's
authenticity.
Title 18 of the United States Code, section
2511(2)(d) provides:
-33-
33
It shall not be unlawful under this
chapter for a person not acting under
color of law to intercept a wire, oral,
or electronic communication where such
person is a party to the communications
or where one of the parties to the
communication has given prior consent to
such interception unless such
communication is intercepted for the
purpose of committing any criminal or
tortious act in violation of the
Constitution or laws of the United
States or of any State.
18 U.S.C. 2511(2)(d) (1988).
A defendant seeking to suppress a tape recording
"bears the burden of proving by a preponderance of the evidence,"
United States v. Vest, 639 F. Supp. 899, 907 (D. Mass. 1986),
______________________
aff'd, 813 F.2d 477 (1st Cir. 1987), either "(1) that the primary
_____
motivation, or (2) that a determinative factor in the actor's
motivation for intercepting the conversation was to commit a
criminal, tortious, or other injurious act." Id. at 904.
___
After an evidentiary hearing, the district court
ruled that it was "not persuaded by a fair preponderance of the
evidence that Mr. DeNunzio made the recording of Ms. Dolber for a
criminal, tortious or injurious purpose; at most, the Court finds
that if anything Mr. DeNunzio made the tape recording of the
conversation in order to prevent future distortions by a
participant." The court concluded that DeNunzio did not make the
tape to blackmail Dolber or as part of a conspiracy. This
factual finding reflecting the court's familiarity with the
evidence and its evaluation of witness credibility, is not
clearly erroneous.
-34-
34
After the evidentiary hearing, the court found that
the government had established a proper foundation for the tape's
authenticity. Dolber challenges that conclusion because she
views DeNunzio's testimony as inconsistent, incredible, and
suspect. Credibility determinations are for the district court,
and Dolber does not show that the finding was clearly erroneous.
(b) Rule 404(b) provides:
Evidence of other crimes, wrongs, or
acts is not admissible to prove the
character of a person in order to show
action in conformity therewith. It may,
however, be admissible for other
purposes, such as proof of motive,
opportunity, intent, preparation, plan,
knowledge, identity, or absence of
mistake or accident . . . .
Fed.R.Evid. 404(b).
Rule 404(b) "is one of inclusion which allows the
introduction of evidence of other crimes, wrongs, or acts unless
the evidence tends to only prove criminal disposition." United
______
States v. Fields, 871 F.2d 188, 196 (1st Cir.), cert. denied, 493
________________ ____________
U.S. 955 (1989).
Determining the admissibility of evidence under Rule
404(b) requires a two-pronged inquiry. "The trial judge first
determines whether the evidence has some 'special' probative
value showing intent, preparation, knowledge or absence of
mistake." United States v. Garcia, 983 F.2d 1160, 1172 (1st Cir.
_______________________
1993). "Next, the judge balances the probative value of the
evidence against the danger of unfair prejudice, pursuant to
-35-
35
Fed.R.Evid. 403." Id. (footnote omitted). Rule 403 provides
___
that:
Although relevant, evidence may be
excluded if its probative value is
substantially outweighed by the danger
of unfair prejudice, confusion of the
issues, or misleading the jury, or by
considerations of undue delay, waste of
time, or needless presentation of
cumulative evidence.
Fed.R.Evid. 403.
On appeal, we review the Rule 404(b) determination
for abuse of discretion. Garcia, 983 F.2d at 1172.
______
Knowledge and intent were critical issues in this
case. The Water Street transaction was probative of Dolber's
knowledge and intent in two significant ways. Unlike the other
land flips, in which she served only as an appraiser, in this
instance Dolber was involved in an actual attempt to obtain a
mortgage loan. The evidence showed Dolber's submitting
fraudulent documents concerning Karen Belanger's employment.
The Newark Street transaction reflected Pezzullo's
functioning in a different role from that in the other land
flips. Here, Cassiere and Pezzullo, and not Rate Line,
masterminded the flip and intended to buy the property
themselves. This evidence was probative of Pezzullo's knowledge
of how a flip was arranged. The tape
recording was probative of Dolber's knowledge concerning how to
go about defrauding a lender.
-36-
36
All of this evidence thus satisfied the first prong
of the rule 404(b) test, since it had "some 'special' probative
value showingintent, preparation,knowledge or absenceof mistake."
Garcia, 983 F.2d at 1172.
______
On the second prong of the rule 404(b) test, "[w]e
afford 'considerable leeway' to a district court in its Rule 403
balancing, and we will reverse a district court's balancing only
in 'exceptional circumstances.'" Id. at 1173 (internal
__
quotations and citations omitted); see also United States v.
________ _________________
Zeuli, 725 F.2d 813, 816 (1st Cir. 1984) ("the test of
_____
admissibility is committed primarily to the trial court"). The
evidence of the two land transactions and the tape recording were
probative as to intent and knowledge, critical elements of the
crimes charged, and there were no "exceptional circumstances"
indicating an abuse of the court's discretion in admitting the
evidence.
V. The Jury Instructions
A. Challenged Jury Instructions
____________________________
The defendants challenge two of the trial court's
jury instructions. We review for abuse of discretion. United
______
States v. Picciandra, 788 F.2d 39, 46 (1st Cir.), cert. denied,
____________________ ____________
479 U.S. 847 (1986). We must look at the instructions in light
of the evidence and determine whether they "'fairly and
adequately submit[] the issues in the case to the jury.'" Id.
___
(quoting United States v. Fishbach & Moore, Inc., 750 F.2d 1183,
_______________________________________
1195 (3d Cir. 1984), cert. denied, 470 U.S. 1029 (1985)). The
_____________
-37-
37
trial court has "considerable latitude" in charging the jury.
Id.
___
1. Failure-to-Disclose Instruction
_______________________________
Cassiere and Pezzullo argue that the court's
failure-to-disclose instruction "impermissibly allowed the jury
to predicate a finding of guilt on a failure to disclose that was
rooted in the defendant's contractual or professional status or
relationship with other parties."
The court told the jury:
A failure to disclose a material
fact may also constitute a false or
fraudulent misrepresentation if, one,
the person was under a general
professional or a specific contractual
duty to make such a disclosure; and,
two, the person actually knew such
disclosure ought to be made; and three,
the person failed to make such
disclosure with the specific intent to
defraud.
The court continued:
The government has to prove as to each
count considered separately, that the
alleged misrepresentation as charged in
the indictment was made with the intent
to defraud, that is, to advance the
scheme or artifice to defraud. Such a
scheme in each case has to be reasonably
calculated to deceive a lender of
ordinary prudence, ordinary care and
comprehension.
The court also instructed:
[I]t is not a crime simply to be
careless or sloppy in discharging your
duties as an attorney or a[s] an
appraiser. That may be malpractice, but
it's not a crime.
-38-
38
"It is well settled that breach of a fiduciary duty,
standing alone, does not constitute mail fraud." United States
_____________
v. Greenleaf, 692 F.2d 182, 188 (1st Cir. 1982), cert. denied,
_____________ ____________
460 U.S. 1069 (1983). However, one of the "elements that
transform[s] a fiduciary breach into mail fraud . . . . is where
there is a recognizable scheme formed with specific intent to
defraud." Id. This is equally true for wire fraud. Cassiere
___
admits as much when he writes in his brief: "There may be
circumstances in which a violation of a non-criminal standard
such as the canons of ethics could conceivably be probative on
the issue of whether or not there was fraud."
Cassiere states both that the record is unclear as
to who his client was, and somewhat inconsistently that "[h]is
ostensible client was the bank writing the mortgage for each
piece of property." The latter statement is correct. Cassiere,
assisted by his law partner Pezzullo, was the closing attorney
and represented the lenders, which he acknowledged at trial. As
attorneys representing the lenders, Cassiere and Pezzullo had a
fiduciary duty toward them, which Cassiere also admitted at
trial. In United States v. Silvano, 812 F.2d 754, 759 (1st
_________________________
Cir. 1987), we held that "the affirmative duty to disclose
material information arises out of a government official's
fiduciary relationship to his or her employer." Id.
___
"Concealment of material information by an employee under a duty
to disclose to his or her employer 'under circumstances where the
non-disclosure could or does result in harm to [the employer] is
-39-
39
a violation of the [mail fraud] statute.'" Id. (quoting United
___ ______
States v. Bronston, 658 F.2d 920, 926 (2d Cir. 1981), cert.
____________________ _____
denied, 456 U.S. 915 (1982)).
______
That reasoning is equally applicable here, where the
lenders, the clients of the Cassiere & Pezzullo firm, viewed the
closing attorney as their "eyes and ears," and "expect[ed]
fundamental honesty" from them. In its written instructions to
the closing attorneys, one lender stated: "While we have tried to
cover our procedures in these closing transactions, we are
relying on your judgment and experience as a closing agent to
properly handle and complete our loan closing. However, when you
are in doubt of a situation, please confer with us prior to
closing."
The court's failure-to-disclose instruction
correctly stated the law as it applied to Cassiere and Pezzullo
in view of their fiduciary duty to the lenders.
2. Willful Blindness Instruction
_____________________________
The defendants challenge the court's willful
blindness instruction:
Now, the element of knowledge that
I just mentioned for Counts 1 through
15, that may be satisfied by an
inference, drawn from proof, that the
particular person accused deliberately
closed his or her eyes to what would
otherwise have been obvious to that
person. You may infer knowledge if you
find beyond a reasonable doubt that the
particular person accused refused to be
enlightened, refused to take notice, but
only where you find the individual is
aware of a high probability that the
fact exists and where the individual in
-40-
40
his or her own mind does not believe --
strike that, does not disbelieve the
fact where there's a high probability
that the fact that's being
misrepresented actually exists and where
the person in his or her own mind
doesn't disbelieve that fact.
Stated another way, a person's
knowledge may be inferred from a willful
blindness to the existence of the fact.
It's entirely up to you whether you find
any deliberate closing of the eyes, any
inference to be drawn from such
evidence. Remember, though, evidence
showing negligence or mistake is not
enough to support a finding of willful
blindness. The ultimate fact of
criminal intent may be established by
circumstantial evidence if you are
satisfied that it is proven beyond a
reasonable doubt.
Caution is necessary in giving a willful
blindness instruction "'because of the possibility that the jury
will be led to employ a negligence standard and convict a
defendant on the impermissible ground that he should have known
[an illegal act] was taking place.'" United States v.
__________________
Littlefield, 840 F.2d 143, 148 n.3 (1st Cir.) (quoting United
___________ ______
States v. White, 794 F.2d 367, 371 (8th Cir. 1986)), cert.
________________ _____
denied, 488 U.S. 860 (1988). A court properly gives such an
______
instruction when "a defendant claims a lack of knowledge, the
facts suggest a conscious course of deliberate ignorance, and the
instruction, taken as a whole, cannot be misunderstood as
mandating an inference of knowledge." Id. at 147.
___
The defendants did not deny the existence of the
scheme to defraud, but contended only that they were unaware of
it. Furthermore, the instruction made it clear to the jurors
-41-
41
that it was for them to determine whether the defendants had
closed their eyes to what should have been apparent to them. The
court three times used the word "may" and explained that "[i]t's
entirely up to you whether you find any deliberate closing of the
eyes." See Picciandra, 788 F.2d at 46 (approving an instruction
___ __________
that permitted but did not require the jury to draw an inference
of willful blindness).
Although the government's main contention at trial
was that all three defendants were knowing participants in the
scheme, the government presented evidence from which the jury
could have concluded that if they did not know what was going on,
it was only because they chose to turn a blind eye. "Guilty
knowledge may be inferred where instances of fraud are repeatedly
brought to a defendant's attention without prompting alteration
of his facilitative conduct." United States v. Nivica, 887 F.2d
_______________________
1110, 1114 (1st Cir. 1989), cert. denied, 494 U.S. 1005 (1990).
____________
Cassiere argues that, like the failure-to-
disclose instruction, this instruction suggests to the jury that
although "negligence or mistake is not enough to support a
finding of willful blindness, . . . [anything] more than
negligence is enough." Thus, the argument goes, the jury could
have concluded that the breach of canons of ethics alone could
constitute "more than negligence," and lead to conviction. The
instruction explained that "evidence showing negligence or
mistake is not enough." It also told the jury that it could
consider "any deliberate closing of the eyes." As with the
-42-
42
failure-to-disclose instruction, breach of a fiduciary duty,
alone, would not prove willful blindness, but the jury could
infer knowledge if it concluded that the defendants
"deliberately" closed their eyes to facts that they were duty-
bound to report to the lending institutions.
Cassiere further argues that the willful blindness
instruction was "logically inconsistent with the Court's charge
on failure to disclose a material fact," and that "[t]he
government cannot have it both ways." The willful blindness
instruction, however, related to the defendant's knowledge of
what occurred. The failure-to-disclose charge, on the other
hand, instructed the jury on determining whether the defendants
were involved in the scheme to defraud.
Finally, Dolber argues that the admission of the
rule 404(b) evidence to prove her knowledge of the scheme was
inconsistent with the government's contention that she remained
willfully blind to the scheme. We know of no authority, however,
that prohibits the government from proceeding on alternate
theories in a criminal case.
B. Refusal to Define Reasonable Doubt
__________________________________
Cassiere, Pezzullo, and Dolber challenge the court's
denial of Dolber's request for an instruction defining reasonable
doubt. In United States v. Olmstead, 832 F.2d 642 (1st Cir.
__________________________
1987), cert. denied, 486 U.S. 1009 (1988), we analyzed in detail
____________
the need for instructing the jury on the meaning of reasonable
doubt. We explained that "[m]ost efforts at clarification result
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in further obfuscation of the concept," id. at 645, and held that
___
"an instruction which uses the words reasonable doubt without
further definition adequately apprises the jury of the proper
burden of proof. This does not mean, of course, that the phrase
can be buried as an aside in the [jury charge]." Id. at 646. In
___
essence, we concluded that the district court was in the best
position to determine whether, and if so how, to define
reasonable doubt. See also Littlefield, 840 F.2d at 146; United
________ ___________ ______
States v. Rodriguez-Cardona, 924 F.2d 1148, 1160 (1st Cir.) ("We
___________________________
have emphasized in the past, and do so again here, that
reasonable doubt does not require definition."), cert. denied,
____________
112 S. Ct. 54 (1991).
There is no suggestion that the reference to
reasonable doubt was "buried as an aside" in the court's charge
to the jury. To the contrary, the court instructed the jury that
"should there be any reasonable doubt of any essential element
which the government has to prove as to any of these specific 16
charges, then the person or persons so charged must have the
benefit of that reasonable doubt and cannot be convicted on the
charge or charges." In its instructions, the court mentioned
"reasonable doubt" twenty-four more times.
The court did not abuse its discretion in refusing
to define reasonable doubt.
Relying upon Judge Torruella's concurring opinion in
Littlefield in which he stated that "I am of the opinion that the
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failure to grant an instruction explaining the term 'proof beyond
a reasonable doubt' is an error of constitutional dimension,
striking at the very heart of the presumption of innocence," 840
F.2d at 151, the defendants urge this court to reconsider the
issue en banc. In view of this court's settled precedent,
_______
however, this panel sees no occasion to suggest such
reconsideration by the full court.
C. Failure to Give a Maniego Instruction
_____________________________________
In United States v. Maniego, 710 F.2d 24, 28 (2d
_________________________
Cir. 1983), the Second Circuit approved the trial court's jury
instruction "that an attorney is not held to a higher standard of
conduct, or legal obligation, to verify independently the truth
of the information given by a client." In United States v.
_________________
Piccianana, 788 F.2d 39 (1st Cir. 1986), we held that the
__________
district court properly refused the defendant's request for a
Maniego instruction because "the government does not try to raise
_______
an inference that Lucid should be held to a higher standard than
normal, nor did its questions have the effect of raising such an
inference." Id. at 46. Lucid, an attorney, was convicted of
__
aiding and abetting Picciandra in evading income taxes. He
argued that a Maniego instruction was required because the
_______
government had suggested that Lucid was culpable in not going
beyond what his client had told him.
Cassiere and Pezzullo did not request a Maniego
_______
instruction at trial and claim on appeal that the court committed
plain error in not giving such an instruction. They apparently
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interpret the Maniego instruction as required whenever the
_______
government seeks to "raise an inference that the defendant should
be held to a standard higher than normal because of his status as
a lawyer and his position as a former prosecutor." The Maniego
_______
instruction, however, is more limited; it deals with the question
whether a lawyer is to be held to a higher standard of conduct
"to verify independently the truth of the information given by a
client." Maniego, 710 F.2d at 28.
_______
In the present case, the charges against Cassiere
and Pezzullo were not that they failed to check further on
information their clients (the lenders) had given them, but that
they defrauded their clients by failing to disclose the land
flips that inflated the sales prices of the mortgaged properties.
The district court cannot be faulted, and certainly did not
commit plain error, because, in a case involving a significantly
different issue from Maniego, it failed to give a Maniego
_______ _______
instruction that the defendants had not requested.
In any event, the record does not show that the
government sought to hold Cassiere or Pezzullo to higher
standards because of their status as attorneys. Rather, the
government introduced evidence of Cassiere's and Pezzullo's
services as attorneys representing the lending institutions and
the fiduciary duty they owed to those lenders because those facts
were central to understanding their roles in the scheme. See
___
United States v. Kaplan, 832 F.2d 676, 683 (1st Cir. 1987)
_________________________
(Maniego instruction not required where the "prosecutor did not
_______
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attempt to create the impression that [the attorney] should be
held to a higher standard of care" and where comments during
trial about the defendant's status as an attorney "were directed
towards [defendant's] role (as a lawyer) which was central to the
scheme"), cert. denied, 485 U.S. 907 (1988); Picciandra, 788 F.2d
____________ __________
at 46.
As noted, the court instructed the jury that "it is
not a crime simply to be careless or sloppy in discharging your
duties as an attorney or an appraiser. That may be malpractice,
but it's not a crime." There was no plain error in the district
court's failure to give a Maniego instruction.
_______
VI. The district court's refusal to give Dolber
a downward adjustment under the Sentencing Guidelines
United States Sentencing Guideline Section 3B1.2(b)
provides that if the defendant "was a minor participant in any
criminal activity," the offense level should be decreased by two
levels. Dolber contends that the district court improperly
refused to give her such a downward adjustment.
"We review the trial court's determination of role
in the offense only for clear error." United States v. Panet-
_______________________
Collazo, 960 F.2d 256, 261 (1st Cir.), cert. denied sub nom. Diaz
_______ _____________________ ____
v. United States, 113 S. Ct. 220 (1992). Since a ruling on a
________________
downward adjustment is highly fact specific, we give great
deference to the trial court's action. United States v. Ocasio,
_______________________
914 F.2d 330, 333 (1st Cir. 1990).
At the sentencing hearing, the district court
explained: "How do I justify calling her a minor participant when
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the evidence seems fairly clear that she knew what she was doing
and she knew she was acting inappropriately here repetitively? .
. . . She seems key to the successful operation of this
fraudulent scheme, just like an attorney is." The lenders relied
on her inflated appraisals in making their mortgage loans, and
without those appraisals the scheme might not have succeeded.
Although DeNunzio, Monteiro, and Cassiere were more culpable than
Dolber, the straw buyers who were Dolber's co-defendants were
relatively minor cogs in the scheme to defraud the lenders.
Thus, Dolber was not "less culpable than most other
participants." U.S.S.G. 3B1.2, comment. (n.3). The court's
denial of a downward adjustment was not clear error.
Affirmed.
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Document Info
Docket Number： 92-2073
Filed Date： 9/16/1993
Precedential Status： Precedential
Modified Date： 9/21/2015