United States v. Cesar Menendez ( 2008 )

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
Aug. 8, 2008
No. 07-10201 THOMAS K. KAHN
Non-Argument Calendar CLERK
________________________
D. C. Docket No. 05-60203-CR-JEM
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
CESAR MENENDEZ,
EDMOND GRIGORIAN,
Defendants-Appellants.
________________________
Appeal from the United States District Court
for the Southern District of Florida
_________________________
(August 8, 2008)
Before TJOFLAT, ANDERSON and BLACK, Circuit Judges.
PER CURIAM:
Edmond Grigorian and Cesar Menendez appeal their convictions for
conspiracy to commit mail and wire fraud, 18 U.S.C. § 1349, mail fraud, 18 U.S.C.
§ 1341, and wire fraud, 18 U.S.C. § 1343. Menendez also appeals his sentence.
The parties raise numerous issues that we will address in turn.
Evidentiary Issues
Grigorian and Menendez argue for the first time on appeal that the district
court abused its discretion and violated the Confrontation Clause by limiting
Grigorian’s impeachment of Thomas Kling. They contend that, under Fed.R.Evid.
806, Grigorian should have been permitted to cross-examine Kling using out-of-
court statements made by Grigorian to Kling after Kling had already testified
regarding other out-of-court statements made by Grigorian to Kling. Grigorian
also argues that this limitation on his cross-examination of Kling violated the
Confrontation Clause.
Generally, we review a district court’s evidentiary rulings only for an abuse
of discretion. United States v. Taylor, 17 F.3d 333, 340 (11th Cir. 1994). The
district court’s discretion in limiting the scope of cross-examination is also subject
to the requirements of the Sixth Amendment. Id. “[O]nce there is sufficient
cross-examination to satisfy the Sixth Amendment’s Confrontation Clause, further
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questioning is within the district court’s discretion.” Id. However, constitutional
objections that are raised for the first time on appeal are reviewed only for plain
error. United States v. Arbolaez, 450 F.3d 1283, 1291 (11th Cir. 2006). Likewise,
evidentiary objections raised for the first time on appeal are reviewed only for
plain error. United States v. Edouard, 485 F.3d 1324, 1343 (11th Cir. 2007).
Therefore, our review here is only for plain error.
The Confrontation Clause provides that “[i]n all criminal prosecutions, the
accused shall enjoy the right … to be confronted with the witnesses against him.”
U.S. Const. Amend. VI. It guarantees criminal defendants an opportunity to
impeach, through cross-examination, the testimony of witnesses for the
prosecution. United States v. Baptista-Rodriguez, 17 F.3d 1354, 1366 (11th Cir.
1994). The importance of full cross-examination increases where the witness is the
star government witness or participated in the crimes for which the defendant is
being prosecuted. Taylor, 17 F.3d at 340. “The test for the Confrontation Clause
is whether a reasonable jury would have received a significantly different
impression of the witness’ credibility had counsel pursued the proposed line of
cross-examination.” United States v. Garcia, 13 F.3d 1464, 1469 (11th Cir. 1994).
“‘Hearsay’ is a statement, other than one made by the declarant while
testifying at the trial or hearing, offered in evidence to prove the truth of the matter
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asserted.” Fed.R.Evid. 801(c). However, such a statement is not hearsay if it is
being offered against a party and is (A) the party’s own statement; (B) the party
has adopted the statement; (C) a statement by a person authorized by the party to
make the statement; (D) a statement by the party’s agent; or (E) a statement of a
coconspirator of the party that was made in furtherance of the conspiracy.
Fed.R.Evid. 801(d)(2).
“When a hearsay statement, or a statement defined in [Fed.R.Evid.]
801(d)(2)(C), (D), or (E), has been admitted in evidence, the credibility of the
declarant may be attacked, and if attacked may be supported, by any evidence
which would be admissible for those purposes if declarant had testified as a
witness.” Fed.R.Evid. 806.
The district court did not violate Rule 806 because it was not applicable.
Rule 806 is, by its own terms, only triggered when a hearsay statement, or a
statement admitted pursuant to Rule 801(d)(2)(C), (D), or (E), has been admitted
into evidence. Fed.R.Evid. 806; United States v. Price, 792 F.2d 994, 996-97 (11th
Cir. 1986). No such statement admitted under one of those provisions was
admitted here. Further, there was also no plain error regarding the Confrontation
Clause. Even if there had been error, Menendez’s substantial rights were not
affected because Grigorian testified about all of the topics that Kling was not
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permitted to testify about.
Menendez argues that the district court erred in excluding Erica Richard’s
testimony that James MacArthur had instructed Richard not to tell anyone that
Russell MacArthur was part of AED. Menendez contends that the statement was
in furtherance of a conspiracy and that Richard’s testimony was a present sense
impression.
As mentioned above, “‘Hearsay’ is a statement, other than one made by the
declarant while testifying at the trial or hearing, offered in evidence to prove the
truth of the matter asserted.” Fed.R.Evid. 801(c). However, such a statement is
not hearsay if it is being offered against a party and is, inter alia, the statement of a
co-conspirator of the party that was made in furtherance of the conspiracy.
Fed.R.Evid. 801(d)(2)(E). Generally, hearsay is not admissible. Fed.R.Evid. 802.
However, there are a variety of situations in which a hearsay statement is
admissible. See Fed.R.Evid. 805, 806. One of those exceptions is for a present
sense impression: “A statement describing or explaining an event or condition
made while the declarant was perceiving the event or condition, or immediately
thereafter.” Fed.R.Evid. 803(1).
The district court did not abuse its discretion in excluding Richard’s
testimony regarding James MacArthur’s statement. An out-of-court statement by a
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co-conspirator that goes to the truth of the matter asserted is only a non-hearsay
statement when it is being admitted against a party, not when it is being admitted
by a party. Fed.R.Evid. 801(d)(2)(E). In addition, James MacArthur’s statement is
not a “present sense impression” because it does not describe anything that James
MacArthur was perceiving at the time. See Fed.R.Evid. 803(1).
Menendez argues that the district court erred in admitting Mishkin’s
testimony and Menendez’s interview with him because it was hearsay, not in
furtherance of an alleged conspiracy, and highly prejudicial to Menendez because
it was obtained through trickery.
As to Menendez, Menendez’s statements to Mishkin were not hearsay
because they were statements by a party (Menendez) admitted by its opponent (the
government). See Fed.R.Evid. 801(d)(2)(A). It is irrelevant whether Menendez’s
statements were in furtherance of a conspiracy, because the exception regarding
statements of the party opponent need not be in furtherance of the conspiracy. See
Fed.R.Evid. 801(d)(2)(C). As to Menendez, Grigorian's statements to Mishkin
were appropriately accompanied by a limiting instruction from the district court
that they could only be considered against Grigorian.
Ordinarily, all of Mishkin's statements in the course of the interviews would
be admissible as non-hearsay to place Menendez's statements in context. See
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Price, 792 F.2d at 996. Here, the district court gave no such limiting instruction
regarding Mishkin's statements. However, this did not result in error because all of
Mishkin’s statements regarding the nature or character of AED's business were
always followed by a statement from Menendez affirming Mishkin's statement.
Therefore, any of the potentially problematic statements by Mishkin were
admissible as non-hearsay adoptive admissions by Menendez. See Fed.R.Evid.
801(d)(2)(B).
Menendez argues that the district court erred in permitting the government to
elicit Menendez to testify that he had previously testified in front of a jury
regarding the same or similar allegations to those raised in the instant case.
“The statements of a prosecutor will justify reversal of a conviction if they
undermined the fairness of the trial and contributed to a miscarriage of justice. We
review allegedly improper comments by the prosecutor on the particular facts of
the case and in the context of the entire record. Because statements and arguments
of counsel are not evidence, improper statements can be rectified by the district
court's instruction to the jury that only the evidence in the case be considered.”
United States v. Smith, 918 F.2d 1551, 1562 (11th Cir. 1990) (quotations and
citations omitted).
No reversal is warranted by the government's reference to the fact that
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Menendez's testimony under oath in a prior proceeding was before a jury. The
government gave no further indication that Menendez had been the defendant in a
jury trial. Further, the jury was specifically instructed not to speculate on the
nature of the prior proceeding, and this rectified any possible prejudice, see Smith,
918 F.2d at 1562.
Statements by the District Court
Next, Grigorian and Menendez argue that the district court plainly erred and
violated their due process rights and right to counsel by repeatedly criticizing
Grigorian’s counsel, as well as Menendez’s counsel. Further, they argue that it
was improper for the district court to limit their counsel to questions not already
asked by other counsel.
We review a district court’s limitation on cross-examination only for an
abuse of discretion. Taylor, 17 F.3d at 340. However, where, as here, no objection
is lodged below, we review only for plain error. See United States v. Rodriguez,
398 F.3d 1291, 1297 (11th Cir. 2005).
“A district court judge has wide discretion in managing the proceedings, he
may comment on the evidence, question witnesses, elicit facts not yet adduced or
clarify those previously presented, and maintain the pace of a trial by interrupting
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or cutting off counsel as a matter of discretion.” United States v. Day, 405 F.3d
1293, 1297 (11th Cir. 2005). Even direct commentary on the evidence can be
appropriate so long as the district court instructs the jury that they are the final
arbiters of the facts. See United States v. Jenkins, 901 F.2d 1075, 1082-83 (11th
Cir. 1990).
“A trial judge may not totally deny a defendant the opportunity to
cross-examine a witness against him, whatever the time constraints, number of
defendants being tried, or relationship between the defendants.” United States v.
Mills, 138 F.3d 928, 938 (11th Cir. 1998).
The district court did not plainly err, or abuse its discretion, in its
commentary providing explanations for its evidentiary ruling or taking counsel to
task for improper questions. Regardless, the district court instructed the jury to
disregard anything it might have said and instructed the jury that it was the
ultimate arbiter of the facts, eliminating any possible prejudice. See Jenkins, 901
F.2d at 1082-83. Further, the district court’s limitation on repetitive questioning
was not an abuse of discretion, much less plain error. See Day, 405 F.3d at 1297.
The district court did not violate our holding in Mills because it permitted
substantial cross-examination by defense counsel for both Menendez and
Grigorian. See Mills, 138 F.3d at 938.
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Sufficiency of the Evidence
Menendez argues that there was insufficient evidence to convict him because
the government did not prove beyond a reasonable doubt that he had knowledge of
the fraud while he was employed at AED.
This Court reviews de novo a defendant's claim that the evidence was
insufficient to convict him, “viewing the evidence in the light most favorable to the
government and drawing all reasonable inferences and credibility choices in favor
of the jury's verdict.” United States v. Fulford, 267 F.3d 1241, 1244 (11th Cir.
2001). “To uphold the lower court's denial of . . . judgment of acquittal and the
jury's guilty verdict, this court need only find that a reasonable factfinder could
conclude that the evidence establishes the defendant's guilt beyond a reasonable
doubt.” United States v. Keller, 916 F.2d 628, 632 (11th Cir. 1990).
Menendez testified that he was unaware of the fraudulent scheme being
perpetrated by AED until after he had left the company. The jury was entitled to
assess Menendez's testimony and demeanor, conclude that he was not credible, and
reject his statements “as a complete fabrication.” See United States v. Vazquez, 53
F.3d 1216, 1225 (11th Cir. 1995). Indeed, a jury may not only discount a
non-credible witness's testimony, but may “conclude the opposite of his testimony
is true.” Id. at 1225-26 (quotation omitted). This rule applies with particular force
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where the fact in question is “highly subjective,” such as “intent or knowledge.”
Id. at 1225 (quotation omitted). Here, there was sufficient evidence for the jury to
conclude beyond a reasonable doubt that Menendez had knowledge of the fraud.
Jury Instructions
Grigorian and Menendez argue1 that the district court erred in instructing the
jury that he could be convicted under a theory of deliberate ignorance. They assert
that a deliberate ignorance instruction is proper only where the sole mens re at
issue is knowledge, while the crimes with which he was charged required specific
intent or willfulness. They emphasize that it is not possible for someone to act
with deliberate ignorance of the existence of a conspiracy and at the same time
willfully intend to join it.
Deliberate ignorance is the equivalent of knowledge. United State v. Peddle,
821 F.2d 1521, 1524 (11th Cir. 1987). Jury instructions are to be considered in the
context of the entire charge. United States v. Johnson, 139 F.3d 1359, 1366 (11th
Cir. 1998). Where a party makes no objection to a jury instruction, we review only
1
Menendez adopted by motion the arguments raised in Grigorian’s brief. However, the
additional adoption attempted in Menendez’s initial brief is ineffective because Grigorian did not
make the arguments Menendez attempted to adopt. Additionally, we do not address the various
issues that Menendez abandoned by making only passing references to them in his initial brief,
rather than presenting arguments. See United States v. Gupta, 463 F.3d 1182, 1195 (11th Cir.
2006), cert. denied, 127 S. Ct. 2446, 167 L. Ed. 2d 1132 (2007)
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for plain error. United States v. Starke, 62 F.3d 1374, 1381 (11th Cir. 1995). We
may correct plain error if there is (1) error, (2) that is plain, and (3) that affects
substantial rights, but only if (4) the error seriously affects the fairness, integrity, or
public reputation of judicial proceedings. Arbolaez, 450 F.3d at 1291.
The district court did not plainly err. Its “deliberate ignorance” instruction
was explicitly limited to knowledge, not willfulness or specific intent. Further, the
district court repeatedly instructed the jury that the government was required to
prove beyond a reasonable doubt willfulness or the specific intent to deceive before
the jury could convict Grigorian or Menendez. “The instruction presented to the
jury, therefore, permitted the jury to substitute [deliberate ignorance] for
knowingly, but not willfully.” United States v. Schlei, 122 F.3d 944, 974 (11th
Cir. 1997)
Sentencing Issues
Menendez argues that the district court clearly erred in determining that
there were over 50 victims of his offenses and plainly erred in determining that the
loss amount was over $1,000,000 and, therefore erred in applying sentencing
enhancements under U.S.S.G. § 2B1.1 (b)(1)(I), (b)(2)(B). He contends that the
government failed to show that the 52 individuals to whom he made sales suffered
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pecuniary harm or that the amount of this harm was $2,130,650. Menendez asserts
that the government failed to prove loss amounts or that all of his customers were
victims because some individuals made money from their rental machines.
We review a sentencing court’s findings of fact, such as a loss
determination, for clear error. United States v. Massey, 443 F.3d 814, 818 (11th
Cir. 2006). However, where a party does not object to the district court’s finding
of fact, we review only for plain error. Id. Under the plain error standard, if (1)
there is error; (2) that is plain; and (3) that affected substantial rights; then (4) this
we may correct the error if it “seriously affects the fairness, integrity, or public
reputation of judicial proceedings.” Id.
Under U.S.S.G. § 2B1.1(b)(2), increasing sentencing enhancements are to be
applied where an offense involved increasing numbers of victims. U.S.S.G.
§ 2B1.1(b)(2). A 4-level enhancement is appropriate where there were 50 or more
victims, but less than 250 victims. U.S.S.G. § 2B1.1(b)(2)(B), (C). In relevant
part, a victim is “any person who sustained any part of the actual loss.” U.S.S.G.
§ 2B1.1, comment. (n.1).
Under U.S.S.G. § 2B1.1(b)(1), increasing enhancements are applied where a
crime resulted in increasing amounts of loss. U.S.S.G. § 2B1.1(1). A 16-level
enhancement is called for where the amount of loss is more than $1,000,000, but
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not more than $2,500,000. U.S.S.G. § 2B1.1(b)(1)(I), (J). The amount of loss is
the greater of the intended or actual loss. U.S.S.G. § 2B1.1, comment. (n.3(A)). In
this case, the actual loss is the applicable figure. Actual loss means the reasonably
foreseeable economic harm that resulted from the offense. U.S.S.G. § 2B1.1,
comment. (n.3(A)(i), (iii)). Loss amounts shall be reduced by “the fair market
value of the property returned and the services rendered, by the defendant . . . to
the victim before the offense was detected.” U.S.S.G. § 2B1.1, comment.
(n.3(E)(i))). In a fraudulent investment scheme such as this one, the loss amount
for a particular victim cannot be reduced by value transferred to that victim in
excess of the victim’s principal “(i.e., the gain to an individual investor in the
scheme shall not be used to offset the loss to another individual investor in the
scheme).” U.S.S.G. § 2B1.1(n.3(F)(v))). The district court “need only make a
reasonable estimate of the loss.” U.S.S.G. § 2B1.1, comment. (n.3(C)).
The government bears the burden of proving by a preponderance of the
evidence the loss amount when it is used to enhance a defendant’s offense level.
United States v. Sepulveda, 115 F.3d 882, 890 (11th Cir. 1997). “The district
court’s factual findings for purposes of sentencing may be based on, among other
things, evidence heard during trial, undisputed statements in the PSI, or evidence
presented during the sentencing hearing.” United States v. Polar, 369 F.3d 1248,
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1255 (11th Cir. 2004). “The sentencing guidelines recognize that often the amount
of loss caused by fraud is difficult to determine accurately. Thus, courts may
reasonably estimate that amount.” United States v. Miller, 188 F.3d 1312, 1317
(11th Cir. 1999). “While estimates are permissible, courts must not speculate
concerning the existence of a fact which would permit a more severe sentence
under the guidelines.” Sepulveda, 115 F.3d at 890.
The district court’s determination that all 52 of Menendez’s purchasers were
victims was not clearly erroneous. There was no evidence that any of the
purchasers—taking into account incidental expenses (such as equipment to operate
the machine, fees to location owners, and storage fees for unprofitable machines),
rental receipts, and eventual sale of the machine—was able to offset their damages
by enough to cover their initial outlay to AED. Therefore, all of the purchasers
were victims. See U.S.S.G. § 2B1.1, comment. (n.1). The district court did not
clearly err in determining that there were more than 50 victims and applying the
appropriate enhancement.
Further, the district court did not plainly err in determining that there was no
offset at all and that, therefore, the initial $2,130,650 in payments made to AED by
the victims was a reasonable estimate of the amount of loss. The average
incidental losses to the purchasers, above and beyond those initial payments,
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substantially exceeded the average value, if any, that they received.
After careful consideration of the briefs of the parties, and thorough review
of the record, we find no reversible error. Accordingly, Grigorian and Menendez’s
convictions and sentences are
AFFIRMED.
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