United States v. Rivera-Izquierdo , 850 F.3d 38 ( 2017 )

United States Court of Appeals
For the First Circuit
No. 15-1620
UNITED STATES OF AMERICA,
Appellee,
v.
JORGE RIVERA-IZQUIERDO,
Defendant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Carmen Consuelo Cerezo, U.S. District Judge]
Before
Barron, Stahl, and Lipez,
Circuit Judges.
David Shaughnessy for appellant.
James I. Pearce, Attorney, Appellate Section, Criminal
Division, U.S. Department of Justice, with whom Leslie R. Caldwell,
Assistant Attorney General, Criminal Division, Sung-Hee Suh,
Deputy Assistant Attorney General, Criminal Division, Wifredo A.
Ferrer, United States Attorney, Southern District of Florida,
Charles R. Walsh, Trial Attorney, Criminal Division, and Luke Cass,
Trial Attorney, Criminal Division, were on brief, for appellee.
March 6, 2017
BARRON, Circuit Judge. In 2014, a jury convicted Jorge
Rivera-Izquierdo ("Rivera") of two counts of money laundering, in
violation of 18 U.S.C. §§ 1957 and 2. He now appeals. Finding no
reversible error, we affirm.
I.
18 U.S.C. § 1957 makes it a felony to "knowingly engage[]
or attempt[] to engage in a monetary transaction in criminally
derived property of a value greater than $10,000 and is derived
from specified unlawful activity." 18 U.S.C. § 1957(a) (emphasis
added). The statute goes on to define "criminally derived
property" as follows: "any property constituting, or derived from,
proceeds obtained from a criminal offense." Id. § 1957(f)(2).
In 2010, a federal indictment charged Rivera with
violating 18 U.S.C. § 1957 and 18 U.S.C. § 2, which punishes aiders
and abettors as though they were principals. According to the
indictment, Rivera and several co-defendants, "aiding and abetting
each other, did knowingly engage or attempt to engage in" two
transactions to purchase cars with "criminally derived property of
a value greater than $10,000 and is derived from specified unlawful
activity."
The indictment alleged that the two vehicle purchases
occurred in September 2008 and May 2009, respectively. The
"specified unlawful activity" was a fraudulent scheme perpetrated
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by Rosa Castrillon-Sanchez ("Castrillon"), the daughter of
Rivera's common-law wife.1
According to the indictment, in September 2008, Rivera
and Castrillon used "criminally derived" funds from Castrillon's
fraudulent scheme to make a down payment of $20,000 for a 2008
Toyota Sequoia sport utility vehicle. In addition, several months
later, Rivera again helped Castrillon purchase a sport utility
vehicle -- this time, a BMW -- by making a "[p]ayment toward" the
vehicle's purchase price of approximately $63,418 with funds in
excess of $10,000 that were "criminally derived" from Castrillon's
fraudulent scheme.
The indictment described Castrillon's fraudulent scheme
as follows. Castrillon would tell her victims, most of whom were
friends and family members, that a large sum of money -- for which
she was the ostensible beneficiary -- had been "frozen" in a local
bank. Castrillon would then request money to help "release" these
"frozen" funds. The victims could not afford the large sums of
money Castrillon requested. She thus would either complete
fraudulent loan applications on behalf of her victims or instruct
1
Subsection (f)(3) provides that the term "specified unlawful
activity" is to be given the meaning that term has in 18 U.S.C.
§ 1956(c)(7). The parties do not dispute that Castrillon's scheme
-- for which she was charged with violating 18 U.S.C. § 1028, the
federal identity fraud statute, 18 U.S.C. § 1343, the federal wire
fraud statute, and 18 U.S.C. § 1344, the federal bank fraud statute
-- qualifies as specified unlawful activity under § 1957. See 18
U.S.C. §§ 1957(f)(3), 1956(c)(7), 1961.
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them to take out loans themselves. Castrillon would then take the
cash from those loans. All told, Castrillon defrauded her victims
out of millions of dollars.
At trial, Rivera introduced evidence that Castrillon
gambled extensively and that she used money taken from her gambling
winnings -- rather than from the money that she had taken from the
fraud victims -- to supply the funds that Rivera then used to make
the car purchases. Rivera thus contended that, because the money
that he used in buying the cars came from the gambling winnings,
it was not "criminally derived property." Rivera also argued that
he did not know that the funds that he received from Castrillon
and that he then used in buying the cars constituted "criminally
derived property," even if those funds somehow were so derived.
Instead, he argued, he thought that the funds that Castrillon gave
him were just funds that she took from her gambling winnings.
In response, the government sought to show at trial that
the money from the gambling winnings actually did constitute
"criminally derived property." The government did so by putting
in evidence that Castrillon had used the money that she took from
her fraud victims to fund her gambling. The government also put
forward evidence to show that Rivera knew that Castrillon had done
so.
After a month-long trial, the jury convicted Rivera of
two counts of money laundering, in violation of 18 U.S.C. §§ 1957
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and 2. The jury acquitted him, however, of the two other counts
that he faced: conspiracy to commit bank and wire fraud in
violation of 18 U.S.C. § 1349, and wire fraud, in violation of 18
U.S.C. § 1343.
The District Court sentenced Rivera to 42 months of
imprisonment. On appeal, Rivera makes a number of challenges to
his convictions. We consider each one in turn.
II.
We start with the challenge that is the primary focus of
the parties: Rivera's contention that the District Court erred in
instructing the jury regarding one part of § 1957. We find that
this challenge has no merit.
A.
The District Court instructed the jury that, just as
§ 1957(f)(2) provides, the term "'criminally derived property'
means any property constituting, or derived from, proceeds
obtained from a criminal offense." Rivera does not challenge this
instruction. He instead challenges the instruction that
immediately followed, which purported to define the term
"proceeds" in the statute's definition of "criminally derived
property."
That instruction informed the jury that "proceeds" were:
"any property derived from or obtained or retained, directly or
indirectly, through some form of unlawful activity, including the
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gross receipts of such activity." Rivera points out that this
instruction tracked, word for word, the definition of "proceeds"
that Congress set forth in an amendment to § 1957, which became
law in 2009 as part of the Fraud Enforcement and Recovery Act of
2009 ("FERA"), Pub. L. 111-21, 123 Stat. 1617. Rivera contends
that, under the Ex Post Facto Clause, this definition of "proceeds"
could not lawfully have been applied to his case because the
"specified unlawful activity" -- Castrillon's fraudulent
scheme -- had begun years before FERA's passage.2
2 Among other things, FERA defined "proceeds" in the companion
money-laundering statute, 18 U.S.C. § 1956, to encompass "any
property derived from or obtained or retained, directly or
indirectly, through some form of unlawful activity, including the
gross receipts of such activity." 18 U.S.C. § 1956(c)(9) (as
amended). FERA then also expressly provided that the term
"proceeds" used in the definition of "criminally derived property"
in § 1957 "shall have the meaning given ['proceeds'] in section
1956." 18 U.S.C. § 1957(f)(3) (as amended). The definition of
"criminally derived property" in subsection (f)(2) of § 1957,
however, has not been modified since the statute's passage in 1986.
See Anti-Drug Abuse Act of 1986, Pub. L. 99-570, § 1352, 100 Stat.
3207.
We note that the simple insertion of the new, post-FERA,
definition of "proceeds" from § 1956(c)(9) into § 1957(f)(2)
appears to lead to a strange result: "The term 'criminally derived
property' means any property constituting, or derived from, any
property derived from or obtained or retained, directly or
indirectly, through some form of unlawful activity, including the
gross receipts of such activity, obtained from a criminal offense."
Thus, we think Congress likely intended for the definition of
"criminally derived property" in subsection (f)(2) to read
something like the following: "the term 'criminally derived
property' means any property constituting or derived from,
proceeds, obtained from a criminal offense, including the gross
receipts of such activity." See S. Rep. No. 111-10, at 8 (2009)
(explaining that because Santos "mistakenly limited the term
'proceeds' to the 'profits' of a crime," FERA was designed to
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Rivera goes on to argue that the instruction was more
"expansive and elastic" than the pre-FERA definition of "proceeds"
that the District Court should have used. To make this argument,
Rivera first directs our attention to the companion money-
laundering statute to § 1957, which is 18 U.S.C. § 1956.3
Prior to FERA's passage, Rivera notes, that statute --
like § 1957 -- did not define the word "proceeds." There was thus
no reason to conclude that "proceeds" in § 1956 meant anything
other than what that word meant in § 1957. This fact matters,
Rivera argues, because, in 2008, in United States v. Santos, 553
U.S. 507 (2008), the Supreme Court narrowly construed the word
"amend the criminal money laundering statutes . . . to make clear
that the proceeds of specified unlawful activity include the gross
receipts of the illegal activity, not just the profits from the
illegal activity"); see also 155 Cong. Rec. S4774-02 (daily ed.
Apr. 28, 2009) (statement of Sen. Levin) ("[R]ecent court decisions
have misdefined the term 'proceeds' from the money laundering
statute to mean only the net receipts from unlawful
activities . . . This act will fix these decisions and explicitly
define 'proceeds' to include not only net but gross receipts from
unlawful activities.").
3 Prior to 2009, § 1956 provided:
Whoever, knowing that the property involved in a
financial transaction represents the proceeds of some
form of unlawful activity, conducts or attempts to
conduct such a financial transaction which in fact
involves the proceeds of specified unlawful activity--
(A) with the intent to promote the carrying on of
specified unlawful activity . . . shall be sentenced to
. . . imprisonment for not more than twenty years.
Anti-Drug Abuse Act § 1352 (emphasis added).
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"proceeds" in § 1956 and thus, according to Rivera, necessarily
also set forth the same narrow construction of that word in § 1957.4
Specifically, according to Rivera, Santos made clear
that "proceeds" meant only the net receipts (or, put otherwise,
the profits) of specified unlawful activity and not the gross
receipts of that activity. Rivera also contends that Santos made
clear that, in any event, "proceeds" (whether gross or net) never
means "more than the receipts from the specified criminal
activity."5
4
In Santos, the Court considered whether the expenses of
operating the defendant's "illegal lottery" -- including "payments
to runners, winners, and collectors" -- constituted "proceeds"
under 8 U.S.C. § 1956. 553 U.S. at 510. A four-justice plurality
concluded that they did not. Because, on the plurality's view,
the meaning of the term "proceeds" was ambiguous, the plurality
applied the rule of lenity to hold that the term "proceeds" means
the "net profits" of criminal activity, and thus did not encompass
the illegal lottery's expenses. Id. at 514. Concurring in the
judgment, Justice Stevens declined to adopt a categorical
definition, instead suggesting that the "Court need not pick a
single definition of 'proceeds' applicable to every unlawful
activity." Id. at 525. Like the plurality, however, Justice
Stevens was concerned that applying a "gross receipts" definition
to the specific facts of Santos would lead to the so-called
"merger" problem," whereby the defendant would be convicted of the
substantive offense of "operating a gambling business," and then
convicted again, under § 1956, of money laundering for "the mere
payment of the expense of operating an illegal gambling business."
Id. at 527. This possibility, Justice Stevens noted, was "in
practical effect tantamount to double jeopardy." Id. Applying
the rule of Marks v. United States, 430 U.S. 188 (1977), we held
in United States v. Adorno-Molina, 774 F.3d 116, 123 (1st Cir.
2014), that "Justice Stevens's concurrence is the controlling
law."
5
Although Castrillon's fraud began several years before
Santos was decided, Rivera does not contend that the definition of
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From this premise, Rivera contends that the District
Court's instruction, by relying on FERA's later-enacted definition
of "proceeds," expanded the scope that Santos had given to that
term in § 1956 in two key respects. Unlike the definition of
"proceeds" set forth in Santos, Rivera points out, the instruction
-- tracking FERA -- expressly stated both that "proceeds" includes
"gross receipts" and that "proceeds" includes: "any property
derived from or obtained or retained, directly or indirectly,
through some form of unlawful activity." 18 U.S.C. § 1956(c)(9)
(as amended) (emphasis added).
In pressing this challenge, Rivera emphasizes that the
government first proposed this instruction as to the meaning of
"proceeds" only after Castrillon had testified for the defense
about her gambling activity. During that testimony, Rivera notes,
Castrillon stated that the money that she gave to Rivera to
purchase the cars came from her gambling winnings. Rivera contends
that the government proposed the FERA-based instruction defining
"proceeds" in order to argue to the jury that it was "simply
irrelevant whether the money" used to buy the cars was "gambling
winnings or fraud proceeds because Rivera was guilty either way."
As a result, he argues, the instructional error "went to the very
heart of the case." It impermissibly enabled the jury, Rivera
the term should be anything other than one that he contends that
Santos provided.
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contends, to find that Castrillon's gambling winnings constituted
the "proceeds" of "specified unlawful activity," even though those
winnings were not the actual funds taken from Castrillon's fraud
victims and thus were not (in Rivera's view) the "proceeds" of
that fraud under Santos.
B.
Rivera concedes that he did not object at trial to the
jury instruction that he now challenges on appeal. Our review,
therefore, is only for plain error.
Under this standard, Rivera "faces the 'heavy burden of
showing (1) that an error occurred; (2) that the error was clear
or obvious; (3) that the error affected his substantial rights;
and (4) that the error also seriously impaired the fairness,
integrity, or public reputation of judicial proceedings.'" United
States v. Prieto, 812 F.3d 6, 17 (1st Cir. 2016) (quoting United
States v. Riccio, 529 F.3d 40, 46 (1st Cir. 2008)). Assuming a
clear or obvious instructional error, Rivera need not, under the
third prong of the plain-error review standard, "prove by a
preponderance of the evidence that but for [the] error things would
have been different." United States v. Rodríguez, 735 F.3d 1, 11-
12 (1st Cir. 2013) (quoting United States v. Dominguez Benitez,
542 U.S. 74, 84 n.9 (2004) (insertion in original)). But, a
showing of "mere possibilities [is] not enough" to prove that an
instructional error affected a defendant's substantial rights.
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United States v. Procopio, 88 F.3d 21, 31 (1st Cir. 1996). Rivera
thus must show that the "outcome of the case would likely have
changed" had the erroneous instruction not been given. United
States v. Colon, 744 F.3d 752, 758 (1st Cir. 2014).
The government disputes whether Rivera is right that the
District Court erred in basing the "proceeds" instruction on the
definition of the term that FERA set forth, given when FERA became
law. The government also disputes whether he is right about how
narrowly Santos construed "proceeds." Cf. Santos, 553 U.S. at 525
(Stevens, J., concurring in judgment). But even if Rivera is right
on both counts, his challenge to the instruction still fails
because he cannot show that the instruction likely affected the
outcome of the case.
The record makes clear that the part of the instruction
that defined "proceeds" to include "gross receipts" did not likely
affect the outcome of the case. The record shows that Castrillon's
fraud entailed little in the way of expenses. The record also
shows that the gross receipts from the fraud were extremely large
-- totaling more than $2.5 million. The expenses of the fraud,
therefore, were simply too paltry for the instruction's definition
of "proceeds" to include "gross receipts" to have made any
difference. Nor does Rivera point to anything in the record to
suggest otherwise.
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The record similarly shows that the part of the
instruction that defined "proceeds" by using what Rivera calls
"expansive and elastic" words -- "any property derived from or
obtained or retained, directly or indirectly" -- did not likely
affect the outcome of the case. (emphasis added). As we have
noted, the instructions as a whole made clear that, consistent
with § 1957(f)(2), property "derived from" the "proceeds" of
specified unlawfully activity is itself "criminally derived
property." United States v. Brown, 669 F.3d 10, 29 (1st Cir. 2012)
("When applying the plain error standard in the context of jury
instructions, 'we look at the instructions as a whole to ascertain
the extent to which they adequately explain the law without
confusing or misleading the jury.'" (quoting United States v.
Troy, 618 F.3d 27, 33 (1st Cir. 2010))).
Thus, the government did not need to prove that
Castrillon's gambling winnings themselves constituted the
"proceeds" of her fraud. To make the case that Rivera, in using
money taken from those winnings to buy the cars, used "criminally
derived property," the government needed to prove only that the
money that he used from the gambling winnings constituted property
"derived from" the fraud's "proceeds."
This feature of the definition of "criminally derived
property" dooms Rivera's challenge to the instruction. As we
explain more fully in addressing Rivera's separate challenge to
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the sufficiency of the evidence, the record provides ample support
for a jury to find that Castrillon generated her gambling winnings
exclusively from the funds that she took from the fraud (or, put
otherwise, from the "proceeds" of it). The record also provides
ample support for a jury to find that the fraudulently obtained
funds that Castrillon used to generate the gambling winnings
totaled at least as much as the amount of money that Castrillon
then gave to Rivera to buy the cars. Given the strength of the
evidence that Castrillon's gambling winnings were "derived from"
the proceeds of Castrillon's fraud -- and thus that the proceeds
were "criminally derived" -- Rivera fails to show that the outcome
of the case would likely have changed had the challenged
instruction on "proceeds" not been given.6
6A number of sister circuits, pre-FERA, had construed the
"derived from" portion of the statute's definition of "criminally
derived property" expansively in analogous circumstances. And
they did so to account for the practical reality that "[m]oney is
fungible," and thus that "when funds obtained from unlawful
activity have been combined with funds from lawful activity into
a single asset, the illicitly-acquired funds and the legitimately-
acquired funds (or the respective portions of the property
purchased with each) cannot be distinguished from each other."
United States v. Moore, 27 F.3d 969, 976-77 (4th Cir. 1994); see
also id. (concluding that, where the defendant obtained the
"overwhelming bulk of the purchase money" for several condominiums
from his bank fraud, "the jury was entitled to conclude . . . that
when the condominiums were eventually sold, the net proceeds of
that sale were in their entirety property derived from . . . [the
defendant's] bank fraud" (emphasis added)); United States v.
Johnson, 971 F.2d 562, 570 (10th Cir. 1992) ("An examination of
the defendant's bank records gave no indication that the funds in
the defendant's account came from any source other than investors
in the alleged [fraud scheme]. Under the circumstances, the
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Rivera, moreover, makes no developed argument to the
contrary. He instead focuses solely on how the jury instruction's
"expansive and elastic" language defining "proceeds" permitted the
jury to find that the gambling winnings were "proceeds." But, as
we have just explained, that focus is too limited, given how § 1957
defines "criminally derived property." See United States v.
Zannino, 895 F.2d 1, 17 (1st Cir. 1990) ("[I]ssues adverted to in
a perfunctory manner, unaccompanied by some effort at developed
argumentation, are deemed waived.").7
evidence was sufficient for the jury to find that the funds
withdrawn were derived from the specified unlawful activity."
(emphasis added)); cf. United States v. Davis, 226 F.3d 346, 357
(5th Cir. 2000) ("[W]hen the aggregate amount withdrawn from an
account containing commingled funds exceeds the clean funds,
individual withdrawals may be said to be of tainted money, even if
a particular withdrawal was less than the amount of clean money in
the account.").
7 We thus have no need to address whether the instruction
would have been prejudicial if we were, like Rivera, to focus only
on the meaning of "proceeds." We do note that it is not at all
clear that it was. Rivera does contend that Santos makes clear
that the funds used to purchase cars, insofar as they are from
gambling winnings, would not qualify as "proceeds" even if they
would qualify under FERA's more expansive definition. But Santos
considered only whether the "proceeds" of the defendant's illegal
lottery referred to the "receipts" of that lottery, or its
"profits." 553 U.S. at 511 (Scalia, J., plurality opinion). Thus,
Santos did not address how tight the connection between a
transaction charged under § 1957 and some specified unlawful
activity must be in order for the funds used to make the
transaction to "constitute" the "proceeds" of that activity. See
18 U.S.C. § 1957(f)(2). Moreover, some courts, pre-FERA, indicated
that "proceeds" was even then an expansive term. See Moore, 27
F.3d at 976-77 ("[W]hen funds obtained from unlawful activity have
been combined with funds from lawful activity into a single asset
. . . it may be presumed . . . that the transacted funds, at least
up to the full amount originally derived from crime, were the
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Accordingly, we conclude that Rivera's challenge to the
jury instruction concerning the definition of the term "proceeds"
in § 1957 fails. For even if the instruction was given in error,
Rivera has not shown how that error affected his substantial
rights.
III.
We turn, then, to Rivera's contention that the evidence
was insufficient. Our review is de novo. United States v. Maymí-
Maysonet, 812 F.3d 233, 236 (1st Cir. 2016). In undertaking that
review, we consider "the evidence, both direct and circumstantial,
in the light most favorable to the prosecution and decide whether
that evidence, including all plausible inferences drawn therefrom,
would allow a rational factfinder to conclude beyond a reasonable
doubt that the defendant committed the charged crime." Id.
(quoting United States v. Cruz-Rodriguez, 541 F.3d 19, 26 (1st
Cir. 2008)). Applying these standards, we reject Rivera's
sufficiency challenge, which, as we will explain, has two distinct
aspects.
proceeds of the criminal activity or derived from that activity."
(emphasis added)); see also United States v. Sokolow, 91 F.3d 396,
409 (3d Cir. 1996) ("It is clear from the full context of the
district judge's explanation of the concept of proceeds that he is
addressing the absence of a legal requirement that the government
trace the funds constituting criminal proceeds when they are
commingled with funds obtained from legitimate sources. We find
no error in the district court's jury instructions in this regard."
(emphasis added) (internal citation omitted)).
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A.
First, Rivera argues that the government presented
insufficient evidence to prove beyond a reasonable doubt that the
money that he used to purchase the two vehicles was "criminally
derived property." But, we do not agree. See United States v.
Rodríguez-Durán, 507 F.3d 749, 758 (1st Cir. 2007) (explaining
that on sufficiency review the "government need not succeed in
eliminating every possibly theory consistent with the defendant's
innocence" (internal quotation marks and citation omitted)).
The government adduced a wealth of evidence that showed
that Castrillon generated the gambling winnings by using
fraudulent funds in an amount far greater than the amount that she
testified that she gave to Rivera to make each car purchase.
Specifically, Castrillon testified that she obtained more than
$2.5 million from the victims of her fraud, which began in 2005.
Moreover, Castrillon testified that she "began [her gambling]
addiction, it was for five years, 2006 [or] 2005"; that, as of
2007, her income from her prior employment had come to an end; and
that, over time, she suffered gambling losses of "much more" than
half a million dollars.
A jury could thus reasonably infer that the source of
the money that Castrillon used to generate the gambling winnings
was exclusively the money that Castrillon took from the "proceeds"
of the fraud. A jury could also reasonably infer that the amount
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of fraudulently obtained funds she used to fund her gambling
totaled at least as much as the amount of money that she gave to
Rivera to buy the cars. And, for the reasons that we have just
explained regarding the scope of the "derived from" prong of
§ 1957's definition of "criminally derived property," a jury that
could reasonably make those inferences also could reasonably find
the following. Insofar as Rivera used the gambling winnings to
make each car purchase that is at issue here, he each time used
"criminally derived property" in excess of $10,000 from "specified
unlawful activity" to do so.
To make the contrary case, Rivera advances a number of
arguments about the state of the record. But we do not find them
to be persuasive.
Rivera first contends that it is possible that
Castrillon made money from gambling before the fraud began in 2005.
He thus argues that a jury reasonably could have found that Rivera
made the car purchases with funds taken from these pre-fraud,
untainted gambling winnings. But, Rivera identifies no plausible
source -- nor do we find one in the record -- for Castrillon's
hypothetically untainted gambling winnings, let alone evidence
that such untainted winnings were of a size sufficient to supply
more than $10,000 towards a car purchase not once, but twice.
To the contrary, by her own testimony, Castrillon began
gambling "in 2006, [or] 2005," and she did not testify that the
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gambling preceded the fraud. Nor did she at any point testify
that her pre-fraud gambling luck (if any she had) generated amounts
of any significance. In fact, Castrillon made clear that she used
the fraudulently obtained funds to feed her casino gambling in the
down periods, which she also testified were frequent enough (or
unlucky enough) that Castrillon's gambling losses at a San Juan
hotel's casino well exceeded half a million dollars.
Rivera next notes that, at one point during her
testimony, Castrillon stated that the funds that Rivera used to
buy the BMW came from money that she made off of the "electronic
lottery." And, Rivera contends, a jury reasonably could find that
the lottery winnings were not tainted by the fraud.
Rivera never identifies evidence in the record, however,
that reveals an untainted source of the funds that Castrillon might
have tapped to play the electronic lottery. Nor did Castrillon
herself identify one. Rather, Castrillon, as we have just noted,
testified that she had no source of income from her prior
employment after 2007 and that she had casino gambling losses in
excess of $500,000. She also agreed during her testimony at trial
that the "money [she] would gamble with . . . was from" her fraud
victims, which funds totaled more than $2.5 million.8
8 The full colloquy surrounding that statement during
Castrillon's cross-examination by the government reads as follows:
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Finally, Rivera points to the gap in time between late
October 2008, when Castrillon received the last of the funds she
took directly from the fraudulent scheme, and May 2009, when the
second vehicle was purchased. But Rivera identifies no plausible
separate source of funds -- that is, funds that were not "derived
from" the "proceeds" of the fraud scheme -- with which Castrillon
might have gambled after the scheme ended and from which the funds
used to pay for the cars could have come. We thus do not see how
this gap helps Rivera's argument.
That leaves only the circuit precedents that Rivera
relies upon. But, given the evidence in the record, these cases
are readily distinguished.
A: Are you asking me, sir, if the money that I used to
pay for the [Toyota Sequoia], I never thought about
paying it back to other people?
Q: That's pretty obvious; isn't it?
A: The answer to that is no.
Q: And you testified that -- in direct, that that money
was from casino winnings?
A: Yes, there was evidence to that effect and I had to
present it. Not the casino, it was the electronic
lottery.
Q: The money you would gamble with, as you testified
before, was from the individuals who were loaning you
money?
A: And the money that I would also, at the same time,
win at the machines.
In answering the prosecutor's question, Castrillon clearly did not
distinguish between casino gambling and the electronic lottery,
thus suggesting she also used fraudulently derived funds to play
the lottery.
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The first precedent Rivera relies on is our decision in
United States v. Carucci, 364 F.3d 339 (1st Cir. 2004). There,
the government sought to prove that the defendant was guilty of
violating § 1957 because he had laundered funds derived from the
criminal activities of Stephen Flemmi, "the notorious leader of
Boston's 'Winter Hill Gang.'" Id. at 340. We explained that, in
light of the record, "[a]ccepting that Flemmi's income was
illegitimate, it could have been linked to any number of criminal
activities . . . [and thus] there [was] no . . . evidence that
Flemmi had engaged in the specified [unlawful activities charged
in the indictment] in the relevant time period." Id. at 347.
Rivera's case is very different. The record here does
not reveal plausible sources for the money that Rivera used to
help Castrillon buy the two cars other than the gambling winnings
that the record sufficiently shows were "derived from" the proceeds
of her fraud. Instead, the evidence offers no plausible untainted
source form which the gambling winnings were made.
Similarly off-point is United States v. Wright, 651 F.3d
764 (7th Cir. 2011). There, the Seventh Circuit held that the
government failed to prove a violation of § 1957 because the
defendant used only $8,000 in "drug proceeds" -- an amount below
the statute's $10,000 threshold for the amount that must be
involved in a transaction charged under § 1957 -- to purchase a
property that the defendant later sold for approximately $50,000.
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Id. at 771. In Rivera's case, however, the government did not
rely on the value of the assets purchased (the cars) to get over
the statutorily imposed $10,000-per-transaction threshold for
"criminally derived property." The government instead relied on
extensive evidence that showed the following. The gambling
winnings came exclusively from the funds that Castrillon took from
her fraud. And, the fraudulently obtained funds that she used to
gamble totaled well in excess of the amount of money that would
have been needed to cover the money that Rivera got from Castrillon
to buy the cars, which exceeded $10,000 per transaction.
For related reasons, United States v. Rutgard, 116 F.3d
1270 (9th Cir. 1997), is also no help to Rivera. There, the Ninth
Circuit held that money derived from funds that were not
"criminally derived property" and that were sufficient to pay for
a transaction in excess of $10,000 does not become "criminally
derived" just because the clean funds are commingled in an account
that also contains "criminally derived property." Id. at 1292;
see also Saccoccia v. United States, 42 Fed. Appx. 476, 481 (1st
Cir. 2002). But here, the record overwhelmingly indicates that
only funds that were, at the least, "derived from" the proceeds of
the fraud were used to give Rivera the funds that he used to buy
the cars. Thus, the circumstance Rutgard addressed is not
presented here.
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B.
The other aspect of Rivera's sufficiency challenge
concerns the evidence of his mens rea. He argues that the
government presented insufficient evidence to prove that he "knew
that more than $10,000 of criminal money was involved" in the
second vehicle purchase. (emphasis added). He bases this
contention on Castrillon's testimony that she told him that "the
money for the car was gambling winnings."
The record, however, reveals evidence of Rivera's close
ties to Castrillon -- including her testimony that it was "[a]s if
he was" her father. Rivera also concedes that the government
presented wide-ranging evidence of Rivera's participation in the
fraud scheme, including evidence that he recruited new victims,
pressured them to take out loans, assured them the frozen funds at
the heart of the scheme were real, and threatened victims who came
to complain to Castrillon's mother.
Thus, a jury could reasonably infer that Rivera knew
that Castrillon had no source of revenue for her gambling activity
other than the fraudulently obtained funds and that he knew that
the fraudulent scheme was extremely profitable -- generating, per
Castrillon's testimony, over $2.5 million. And a jury that could
reasonably make this inference could also reasonably infer that
Rivera knew that money obtained from that scheme funded
Castrillon's gambling and, consequently, that the funds she took
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from her gambling activity to give to him to make the two car
purchases was "criminally derived." This part of his sufficiency
challenge, therefore, fails as well. See United States v. Richard,
234 F.3d 763, 769 (1st Cir. 2000) ("[T]he government must
prove . . . that [the defendant] had general knowledge of the
subject property's criminal nature . . . .").
IV.
Having dispensed with Rivera's challenges to the jury
instructions and to the sufficiency of the evidence, we now address
the two remaining challenges that Rivera makes that concern the
tie between Castrillon's gambling winnings and her fraud. Neither
challenge has merit.
A.
Rivera contends first that his convictions must be
reversed because of statements that the prosecutor made in his
closing argument. In those statements, the prosecutor told the
jury that it could convict Rivera if the money used to buy the
vehicles "came from casino winnings and not directly from victims"
because that money was nevertheless "criminally derived property."
Rivera contends that these statements amounted to an erroneous
assertion that the jury was legally required to apply a
"presumption that all of Castrillon's money was dirty."
Rivera concedes that he did not object to the
prosecutor's statements at trial. Our review, therefore, is for
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plain error. United States v. González-Pérez, 778 F.3d 3, 20 (1st
Cir. 2015). We find none. As we read the record, the prosecutor
did not argue that a legal presumption of taint applied to all the
funds that were used to purchase the cars. The prosecutor merely
summarized his view of what had been revealed by the circumstantial
evidence presented at trial about the nature of the funds used to
make those transactions.9 Moreover, the District Court instructed
the jury that "the closing arguments are not evidence." For these
reasons, the prosecutor's statements supply no basis for
sustaining Rivera's challenge. United States v. Allen, 469 F.3d
11, 16 (1st Cir. 2006) (noting that even a mischaracterization of
the defendant's testimony, provided it was "unintentional and
isolated" and corrected by a cautionary instruction by the district
court, "did not prejudice the outcome of the case" and therefore
did not constitute plain error).
9 To the extent Rivera argues that the prosecutor "misstated
Castrillon's testimony," we reject that challenge as well. As
Rivera correctly notes, "Castrillon testified that her gambling
money came from either gambling winnings or loans." Thus, the
prosecutor did not err in suggesting to the jury that even if the
money Rivera used to obtain the two manager's checks used to
purchase the BMW "came from casino winnings and not directly from
victims," it was nevertheless "criminally derived property because
the money she was playing with was the victims' money."
Significantly, the government never stated that the funds in
question were "proceeds."
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B.
Rivera also argues that his convictions must be
overturned because the District Court did not permit his attorney
to adduce evidence quantifying Castrillon's gambling winnings.
Rivera did preserve this challenge, and so our review is for abuse
of discretion. United States v. DeCologero, 530 F.3d 36, 58 (1st
Cir. 2008).
The record does not show that the District Court barred
Rivera from presenting this evidence. Rather, after Rivera's
attorney, on re-direct, withdrew a question in which he sought to
quantify Castrillon's gambling winnings, the District Court
emphasized that Rivera's attorney could pursue this line of
questioning if he could "show the relevance and accuracy of that
information."
Moreover, the additional evidence at issue could not
have helped Rivera identify a plausible untainted source for the
funds used to buy the cars. Much evidence was adduced at trial
about the size of Castrillon's fraud and her lack of independent
sources of income. In fact, during his direct examination of
Castrillon, Rivera's attorney withdrew without objection his
question about "[h]ow much money [Castrillon] would win" while
gambling when the District Court told him that such testimony was
needlessly cumulative. Thus, there was no abuse of discretion by
the District Court.
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V.
We now take up Rivera's three remaining challenges. None
supports the reversal of his convictions.
A.
Rivera first contends that the prosecutor acted
improperly by asking Castrillon "whether four other trial
witnesses were lying." Because Rivera did not raise this challenge
below, our review is for plain error.
The government does not dispute that the prosecutor's
error in this regard was clear and obvious. See United States v.
Thiongo, 344 F.3d 55, 61 (1st Cir. 2003) (noting that "it is
improper for an attorney to ask a witness whether another witness
lied on the stand"). In order "to constitute plain error,"
however, the prosecutor's improper questions "must potentially
have affected the outcome of the district court proceedings."
United States v. Fernandez, 145 F.3d 59, 63 (1st Cir. 1998)
(quoting United States v. Olano, 507 U.S. 725, 734 (1993)). We
see no basis for concluding that they did.
Rivera first points to the government's question about
whether the "salesperson" who testified that Rivera was present
when the Toyota Sequoia was purchased "was lying." But the jury
heard testimony -- and was presented extensive accompanying
documentary evidence -- that Rivera purchased the Toyota Sequoia
on Castrillon's behalf. We thus do not see how the comment by the
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prosecutor that is at issue -- even if improper -- was sufficiently
prejudicial to warrant overturning the verdict. See id. at 65
("Given the strength of the government's case, it stretches
credulity to believe that the improper framing of these un-
objected-to questions affected the outcome of the trial.").
Rivera also fails to show the requisite prejudice from
the three other instances that he identifies in which the
prosecutor asked Castrillon whether other witnesses were lying.10
The government put forth considerable evidence of Rivera's
participation in the two vehicle purchases, his closeness to
Castrillon and, as Rivera himself concedes, his knowledge of and
participation in the fraud scheme itself. Thus, "[w]e see no way
that these few miscast questions could have so tainted the trial
as to affect its outcome." Id. at 64; see also United States v.
Pereira, __ F.3d __, 2017 WL 462104, at *12-*13 (1st Cir. Feb. 3,
2017) (noting a lack of prejudice to the defendant, and thus no
plain error, where the questions "were limited in number and scope,
and only pertained to tangential, corroborated testimony").
10Those three instances are the following. At one point
during the government's cross-examination of Castrillon, the
prosecutor took issue with statements suggesting Rivera was not
involved in alerting her to the apparent distress of two victims
of the fraud scheme, Fidel Lozada Gutierrez and Edgardo Vidal. At
another, the prosecutor disputed Castrillon's account of how
Rivera learned that a different victim of Castrillon's scheme,
William Sanchez, had loaned her money. At a third point, the
prosecutor challenged Castrillon's testimony concerning how much
money yet another victim, Roberto Ortiz, had loaned Castrillon.
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B.
Rivera next argues that the District Court erred in
granting the government's motion in limine to exclude evidence
that concerned the negligence or lack of due diligence of
Castrillon's victims. Rivera contends that the District Court's
ruling limited his ability "to demonstrate just how successful
Castrillon was in duping people, thereby making it more likely
that Rivera himself was duped." Our review is for abuse of
discretion. DeCologero, 530 F.3d at 58.
As the government correctly points out, the District
Court permitted Rivera to argue to the jury that he was a victim
of Castrillon's manipulation and to present evidence in support of
that argument. Thus, we do not see how the District Court erred.
It merely excluded evidence that would have been at best cumulative
(and, at worst inconsistent with) a side point that Rivera wished
to make but that was not even in dispute: that Castrillon was a
skilled fraudster. Thus, there was no abuse of discretion.
C.
Finally, we reject Rivera's claim of cumulative error.
The record contains strong evidence that the gambling winnings
Rivera used to buy the cars were, at the least, "derived from" the
"proceeds" of Castrillon's fraud. The errors that Rivera alleges,
however, are not responsible for the jury having heard that
evidence. We thus conclude that the errors Rivera points to, if
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any there were, "in the aggregate, do not come close to achieving
the critical mass necessary to cast a shadow upon the integrity of
the verdict." United States v. Sepulveda, 15 F.3d 1161, 1196 (1st
Cir. 1993).
VI.
For these reasons, we affirm Rivera's convictions.
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