United States v. Joseph L. Pasquale

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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
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No. 16-11625
Non-Argument Calendar
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D.C. Docket No. 8:15-cr-00071-EAK-MAP-1
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
versus
JOSEPH L. PASQUALE,
Defendant - Appellant.
________________________
Appeal from the United States District Court
for the Middle District of Florida
________________________
(August 28, 2017)
Before MARTIN, JORDAN, and ANDERSON, Circuit Judges.
PER CURIAM:
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Joseph Pasquale appeals his convictions for conspiracy to commit bank
fraud, 18 U.S.C. § 1349, and substantive bank fraud, 18 U.S.C. § 1344. He argues
that the government presented insufficient evidence about his knowledge of the
bank fraud to sustain the jury’s guilty verdict. He also argues that during its closing
and rebuttal arguments, the government made improper assertions about his
credibility and that of his trial counsel. Upon review of the record and
consideration of the parties’ briefs, we affirm.
I
Because we write for the parties, we assume their familiarity with the
underlying record and recite only what is necessary to resolve this appeal.
Mr. Pasquale, a former real estate professional, was involved in a Florida
“condominium conversion” project at the Arbors, an apartment complex in Tampa,
Florida, that was selling units as individually-owned income properties. As part of
this project, Mr. Pasquale created his own company to “lend” buyers—for a fee—
the money they had to contribute to qualify for purchase-price mortgages on the
condominiums. He collected reimbursement of the loans immediately after closing
from a portion of the mortgages that were purportedly to be used to upgrade the
condominiums (a “Design Upgrade Package,” or “DUP”), but actually went to the
buyers as cash.
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This information was not disclosed to the banks that lent the buyers money
to purchase the condominiums. The buyers’ mortgage applications listed the
condominiums as “second residences” instead of investment properties, which
increased the available loan-to-value ratio for the units. Closing statements listed
the money that the mortgage brokers had lent the buyers for closing as “cash” that
the buyers were bringing to the table. The supporting documents for the DUP were
never provided to the banks that lent the money for the DUP-increased mortgages.
Richard Higgins, a contract fraud investigator and former FBI agent,
testified that he interviewed Mr. Pasquale (with his attorney present) as part of the
FBI’s investigation into the Arbors project. He testified that Mr. Pasquale admitted
that he knew that the buyers at the Arbors had no intention of using their units as
residences; that, to his understanding, the down payment loans from his company
were not disclosed to the lenders; that he knew that at no time is it appropriate for a
real estate agent to provide funding or loan money to clients; and that he “believed
that he conducted fraud.” D.E. 131 at 212.
Mr. Pasquale moved for judgment of acquittal at the close of the
government’s case-in-chief—at which time the district court reserved ruling—and
again at the end of the trial. The jury found Mr. Pasquale guilty on all counts, and
the district court denied Mr. Pasquale’s motion for judgment of acquittal.
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II
We review the sufficiency of the evidence de novo. See United States v.
Pacchioli, 718 F.3d 1294, 1299 (11th Cir. 2013). “On review, we must affirm if
the evidence and the inferences it supports, viewed in the light most favorable to
the government, would permit a reasonable trier of fact to establish guilt beyond a
reasonable doubt.” United States v. Harrell, 737 F.2d 971, 979 (11th Cir. 1984).
We consider the evidence “with all inferences and credibility choices drawn in the
government’s favor,” and we “are bound by the jury’s credibility choices, and by
its rejection of the inferences raised by the defendant.” United States v. Broughton,
689 F.3d 1260, 1276–77 (11th Cir. 2012) (citation omitted). Importantly, the
“evidence need not exclude every reasonable hypothesis of innocence or be wholly
inconsistent with every conclusion except that of guilt.” Harrell, 737 F.2d at 979.
Under Fed. R. Crim. P. 29(b), if a district court reserves ruling on a motion
for judgment of acquittal, the court must decide the motion on the basis of the
evidence at the time the ruling was reserved. See United States v. Moore, 504 F.3d
1345, 1346 (11th Cir. 2007). Where, as here, the district court reserved ruling on a
motion for a judgment of acquittal made after the government’s case-in-chief, our
review is limited to the evidence presented by the government. See id. at 1347.
To sustain a conviction for bank fraud conspiracy under 18 U.S.C. § 1349,
the government must prove beyond a reasonable doubt that (1) two or more
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persons agreed to a common and unlawful plan to commit bank fraud; (2) the
defendant knew of the unlawful plan; and (3) the defendant knowingly and
voluntarily joined in the plan. See United States v. Moran, 778 F.3d 942, 960 (11th
Cir. 2015). “To convict under § 1344(2), the government must prove [beyond a
reasonable doubt] (1) that a scheme existed to obtain moneys, funds, or credit in
the custody of a federally-insured bank by fraud; (2) that the defendant participated
in the scheme by means of material false pretenses, representations or promises;
and (3) that the defendant acted knowingly.” United States v. McCarrick, 294 F.3d
1286, 1290 (11th Cir. 2002).
Mr. Pasquale challenges only whether he acted “knowingly.” Specifically,
he argues that the government’s case-in-chief did not establish that he knew the
developer’s incentives had not been disclosed to the lenders when the loans
originated.
Viewing the evidence presented in the government’s case-in-chief in the
light most favorable to the verdict, the circumstances surrounding Mr. Pasquale’s
actions, his knowledge, experience, and familiarity with the mortgage process, and
the nature of the “incentives” program that he offered to his clients permitted a jury
to infer that Mr. Pasquale knowingly committed bank fraud. First, Mr. Pasquale’s
business partner, Brendan Bolger, testified that mortgage lenders would be
disinclined to lend money to purchasers who did not use their own cash for down
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payments, and Agent Higgins testified that Mr. Pasquale knew it was inappropriate
for brokers to lend clients money for down payments. Second, some of the buyers
testified that Mr. Pasquale made them aware of the Design Credit Agreement,
which was designed in a manner to obfuscate its true purpose. Third,
Agent Higgins testified that Mr. Pasquale admitted that he thought he committed
fraud, and that he was aware that the information about “hard money loans” and
the Design Credit Agreement was not provided to the mortgage lenders. Based on
this evidence, it was reasonable for the jury to infer that Mr. Pasquale had
knowledge that the incentives were not being disclosed to the mortgage lenders at
the times the loans were applied for and obtained. Accordingly, sufficient evidence
from the government’s case-in-chief supports the jury’s verdict.
III
“We review allegations of prosecutorial misconduct de novo because it is a
mixed question of law and fact.” United States v. Duran, 596 F.3d 1283, 1299
(11th Cir. 2010). But where, as here, a defendant fails to raise an objection before
the district court, we review only for plain error. To demonstrate plain error, an
appellant must show that there was “(1) an error (2) that is plain and (3) that has
affected the defendant’s substantial rights; and if the first three prongs are satisfied,
[we] may exercise [our] discretion to correct the error if (4) the error seriously
affects the fairness, integrity[,] or public reputation of judicial proceedings.”
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United States v. Madden, 733 F.3d 1314, 1320 (11th Cir. 2013) (internal alterations
and citation omitted).
Mr. Pasquale argues that the district court committed plain error in failing to
strike or declare a mistrial sua sponte when the prosecutor argued that (in
Mr. Pasquale’s words) Mr. Pasquale “was a liar” and “questioned his [trial]
counsel’s ethics.” See Br. of the Appellant at 26.
Prosecutorial misconduct may be shown where the prosecutor made
improper comments that prejudicially affected the substantial rights of the
defendant, meaning there is a reasonable probability that, but for the improper
remark, the outcome of the trial would have been different. See Duran, 596 F.3d at
1299. A prosecutor may make a fair response to the arguments and issues raised by
defense counsel. See United States v. Reeves, 742 F.3d 487, 505 (11th Cir. 2014).
To show that the prosecutor engaged in improper vouching, the defendant must
demonstrate that the prosecutor either “placed the prestige of the government
behind the witness” by making personal assurances of the witness’ credibility, or
“implicitly vouched for the witness’[ ] credibility by implying that evidence not
formally presented to the jury supports the witness’[ ] testimony.” United States v.
De La Cruz Suarez, 601 F.3d 1202, 1218 (11th Cir. 2010). But improper vouching
is not the same as arguing credibility, and a prosecutor is “permitted to comment
on the credibility of [his] own witnesses without personally vouching for the
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witness’[ ] credibility or bolstering the witness’[ ] credibility through the
government’s reputation.” United States v. Lopez, 590 F.3d 1238, 1257 (11th Cir.
2009). And a prosecutor may make a fair response when the issue of the credibility
of witnesses has been raised by defense counsel. See id. at 1258.
During closing arguments, the prosecutor stated:
First of all, I would like to just dispense with a quick issue. In the
defense’s opening you heard a number of things that the prosecution
was not going to tell you.
One of those was that Brendan Bolger owned the developments. I
believe you heard through testimony here that two corporations
owned the developments and Mr. Bolger did not. I believe you were
told Mr. Bolger made millions and millions of dollars. I think if you
go back, you can recall that Brendan Bolger stated he made $650,000.
The reason you didn’t hear any of this from us is because it didn’t
happen or it’s factually inaccurate. The lawyers have an obligation—
what we say is not evidence, but we have an obligation not to make
stuff up either.
D.E. 132 at 187.
Mr. Pasquale argues that this statement was a personal attack on defense
counsel by questioning his ethics. In context, however, this characterization is not
necessarily accurate. The comments could instead explain that the government
could not introduce evidence that does not exist. In other words, the prosecutor’s
statements are better read as a fair response to Mr. Pasquale’s counsel’s assertion
in his opening statement that Mr. Bolger made millions from the developments.
Although the argument may have had the ancillary effect of diminishing the
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credibility of Mr. Pasquale’s counsel, this was only because his counsel assumed
such a risk by discussing facts during his opening statement that were not
established. See United States v. Calderon, 127 F.3d 1314, 1336 (11th Cir. 1997)
(concluding that closing argument in which a prosecutor accused defense counsel
of misstating evidence, making a fictitious closing argument, and impugning the
integrity of government witnesses did not rise to the level of prosecutorial
misconduct).
During closing arguments, Mr. Pasquale’s attorney stated: “[Y]ou heard FBI
Agent Higgins come in here and disagree with what [Mr. Pasquale] had to say.
How do you—how do you rectify that?” D.E. 132 at 206. He further argued that
Agent Higgins was convinced that Mr. Pasquale was guilty and that “whether he
heard what he wanted to hear or whether he added to it, I’ll never know. None of
us will. But he said what he said here today. But does that make sense if
[Mr. Pasquale] knew he was part of this fraud to contact a lawyer to meet with the
FBI to confess? Does that make sense? No.” Id. at 206–07. During rebuttal
argument the prosecutor contrasted Agent Higgins’ and Mr. Pasquale’s incentives
to lie, stating that Agent Higgins had little incentive to manufacture his testimony,
while Mr. Pasquale “to save himself [had] every reason to lie.” Id. at 212–13.
Mr. Pasquale argues that, through these comments, the prosecutor called him
a liar and vouched for Agent Higgins. But Mr. Pasquale’s counsel put at issue the
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credibility of his client versus the credibility of the law enforcement agent during
his closing argument. The prosecutor made a proper argument in response as to the
reasons Mr. Pasquale might lie versus the reasons the agent might lie. Moreover,
the prosecutor did not vouch for the agent, but instead reviewed the available
evidence about both individuals’ circumstances and argued that the jury should
make a credibility determination in the government’s favor. See Lopez, 590 F.3d at1257–58. Because the prosecutor’s arguments were not clearly improper, we
cannot say they amounted to plain error.
IV
For the reasons stated above, the government presented sufficient evidence
to support the jury’s guilty verdict, and Mr. Pasquale has not demonstrated that the
district court plainly erred by failing to sua sponte declare a mistrial based on
comments made by the government during closing statements. Accordingly,
Mr. Pasquale’s convictions for conspiracy to commit bank fraud and substantive
bank fraud are affirmed.
AFFIRMED.
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