United States v. Juan Rene Caro

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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 13-13324
________________________
D.C. Docket No. 1:08-cr-20044-JAL-1
UNITED STATES OF AMERICA,
llllllllllllllllllllllllllllllllllllllllPlaintiff - Appellee,
versus
JUAN RENE CARO,
MAYTEMAR CORPORATION,
d.b.a. La Bamba Check Cashing,
llllllllllllllllllllllllllllllllllllllllDefendants - Appellants.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(October 29, 2014)
Before TJOFLAT, JULIE CARNES, and GILMAN, ∗ Circuit Judges.
∗
Honorable Ronald Lee Gilman, United States Circuit Judge for the Sixth Circuit, sitting
by designation.
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GILMAN, Circuit Judge:
In 2009, a jury convicted Juan Rene Caro and his company, La Bamba
Check Cashing (collectively, Caro) on multiple charges related to a money-
laundering scheme. Two years later, Caro found out that one of the witnesses
against him, Nevin Kerry Shapiro, was himself under investigation in New Jersey
for a similar fraud scheme at the time of Caro’s trial.
This discovery prompted Caro to move for a new trial in the district court on
two grounds: (1) that Shapiro’s conviction constitutes “new evidence” because
Shapiro’s plea colloquy reveals that he perjured himself in Caro’s trial, and (2) that
the government violated its Brady and Giglio obligations by failing to disclose the
investigation against Shapiro. Caro also moved to compel discovery as to what the
U.S. Attorney’s Office in Florida knew about the New Jersey investigation and
when it acquired such knowledge.
The district court denied both motions because it was already familiar with
the case and because it determined that Shapiro’s testimony was not material to the
conviction. Caro now appeals. For the reasons set forth below, we AFFIRM the
judgment of the district court.
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I. BACKGROUND
A. Trial and direct appeal
On direct appeal, this court set out the facts underlying Caro’s conviction as
follows:
During the building boom in South Florida in the early 2000s,
many within the construction industry played fast and loose with
federal and state regulations to maximize profits and minimize taxes.
These companies were able to find willing partners in this pursuit, and
Juan Rene Caro (“Caro”) was accused of being one of these partners.
Caro’s scheme allegedly involved using fictitious or “shell”
construction corporations to avoid taxes and insurance costs.
Normally, employers withhold from employees’ paychecks
monies paid into the federal treasury [for] social security and payroll
taxes. These legitimate construction companies, however, were trying
to avoid these “obstacles,” so that they could employ illegal aliens.
One cannot simply write a payroll check to an illegal alien, as such
employment is illegal. In addition, these illegal aliens could not open
legitimate bank accounts where they could either deposit or cash
paychecks.
If the alleged scheme worked properly, all of these “obstacles”
would be overcome. A legitimate construction company would be
approached by Caro or an associate and offered an alternative to
paying the taxes and insurance costs associated with employees.
Rather than pay employees by check, the legitimate construction
company would write a check to a shell corporation making it appear
that the shell company was a subcontractor and the employer of the
legitimate construction company’s employees.
The shell corporation would allegedly cash that check at Caro’s
check cashing store, or another check cashing store. A percentage of
the face value of the check was “charged” as a fee, with the remaining
cash returned to the shell corporation. The shell corporation, in turn,
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provided the cash to the legitimate construction company. The cash, in
its final voyage of the journey, was payed [sic] to employees,
including illegal aliens.
In addition to evading payroll taxes, the scheme allegedly
allowed the legitimate corporation to avoid the expense of workers’
compensation insurance. This was accomplished when the shell
company fraudulently procured workers’ compensation insurance and
permitted the legitimate company’s employees to work under that
insurance certificate.
The shell companies, on the other hand, were then left holding
the bag. They were responsible for the payroll taxes and insurance
premiums but never paid them. Instead, when all the unpaid taxes and
premiums drew scrutiny, usually within a year or eighteen months, the
shell company simply dissolved leaving these debts unpaid. Another
shell company would quickly be incorporated and the cycle would
begin anew.
The flaw in Caro’s scheme was underestimating the Internal
Revenue Service (“IRS”). Financial institutions are required to
complete and file with the IRS a currency transaction report (“CTR”)
for currency transactions involving more than $10,000. Caro allegedly
made material misrepresentations in the CTRs for the transactions
with these shell companies, which eventually led to him being
investigated by the IRS and being charged in this case.
United States v. Caro, 454 F. App’x 817, 819-20 (11th Cir. 2012), cert. denied,
133 S. Ct. 204 (2012).
A grand jury indicted Caro and four coconspirators for violating the
currency-transaction reporting requirements of 31 U.S.C. §§ 5313(a), 5324(a)(2),
and 5324(d)(2). The conspirators allegedly filed false CTRs totaling more than
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$132.7 million, and the indictment alleged twenty-one overt acts in furtherance of
the conspiracy, none of which involved Shapiro.
Following a lengthy trial that lasted from November 2008 until February
2009, the jury returned guilty verdicts against Caro on most of the charges. The
district court sentenced him to 216 months in prison. La Bamba was placed on
probation for five years. Caro appealed, arguing that that the district court
committed numerous reversible errors. This court disagreed, affirming both the
convictions and the sentences in 2012. It also extensively detailed the evidence
presented during the trial proceedings.
B. Motion for new trial
In January 2011, while his appeal was still pending, Caro filed a motion for
a new trial under Rule 33 of the Federal Rules of Criminal Procedure. He moved
six months later to compel discovery and for an evidentiary hearing in support of
the new-trial motion. These motions stemmed from allegations that the government
knew of a pending investigation against one of its witnesses at trial, Nevin Kerry
Shapiro, but had failed to disclose the investigation as potentially impeaching
information. This court summarized Shapiro’s testimony as follows:
In early 2007, when Caro met Nevin Kerry Shapiro at a Miami Heat
basketball game, he offered Shapiro a loan of $7,000 cash with no
terms. Shapiro testified that Caro[,] who had the cash on his person,
gave the money to Shapiro with only a handshake to seal their
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agreement. Shapiro was to repay the money with a $500 fee. Shapiro
repaid the loan by writing a check for $7,523.23 from his real estate
company to [a shell company], at Caro’s direction.
Shapiro then borrowed $50,000 from Caro in October 2007 and repaid
the loan by writing a personal check for $52,500 to [another shell
company]. The $2,500 represented interest on the loan and Shapiro
did not endorse the check before personally delivering it to Caro.
The loans from Caro and repayments from Shapiro continued for five
more transactions. Caro sent someone to Shapiro’s office to pick up
Shapiro’s check or Shapiro gave the check to Caro personally at a
Heat game or by visiting La Bamba. To repay the loans, Shapiro
wrote checks to AFC Painting and Huber, entities who had never
performed any work for him, and finally, to La Bamba. Although
Caro insisted that the other companies Shapiro had written the checks
to were “his,” Shapiro was uncertain about the others. Caro agreed
reluctantly to permit Shapiro to write the final two checks, one for
$50,000 and one for $52,000, directly to La Bamba.
Caro, 454 F. App’x at 835. This court’s opinion did not discuss Shapiro’s
testimony any further and did not reference it when analyzing the sufficiency of the
evidence supporting Caro’s convictions.
Shapiro initially became involved in the IRS investigation of La Bamba
when an IRS agent came across several high-dollar checks written by Shapiro to
one of the shell companies. (R. 627, Dist. Ct. Op. at 4) At the same time, one of
Shapiro’s companies, Capital Investments, Inc., was under investigation in New
Jersey by the Federal Bureau of Investigation (FBI). (Id. at 5) Shapiro was
running a Ponzi scheme at the time and using his ill-gotten gains to pay gambling
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debts and give lavish gifts to college athletes. (Id. at 5-6) He was using the funds
from new investors to make payments to previous investors. (Id. at 5) Shapiro
also incurred various gambling debts, which apparently supplied the motive for
Shapiro to borrow money from Caro and repay La Bamba. (Id. at 4) In September
2010, Shapiro pleaded guilty to fraud charges resulting from these activities. (Id.)
The thrust of Caro’s motions for an evidentiary hearing and a new trial was
that the government had an obligation to disclose the pending investigation of
Shapiro earlier and that, with all of the evidence surrounding Shapiro’s Ponzi
scheme at its disposal, Caro would have been able to obtain an acquittal by
effectively impeaching Shapiro. In particular, Caro argued that Shapiro’s
testimony provided “direct substantiation of the government’s theory” against Caro
and that Shapiro was “the sole, unimpeached witness.” (Id. at 7)
Caro therefore argued that, without Shapiro’s testimony, the government’s
case would have crumbled. He sought to further his claims by taking discovery
from the Securities and Exchange Commission (SEC), the FBI, the IRS, the United
States Attorney’s Offices in both the District of New Jersey and the Southern
District of Florida, Capital Investments’ bankruptcy trustee, and a journalist. (Id.
at 8)
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The district court rejected these arguments. It first concluded that
“Shapiro’s fraud conviction in the District of New Jersey and allegedly perjured
testimony at trial, if known, would not have been exculpatory as to Caro or La
Bamba. Instead, it would have been impeachment material.” (Id. at 12) The court
then analyzed the testimony to determine if it “could reasonably be taken to put the
whole case in such a different light as to undermine confidence in the verdict.” (Id.
at 15) (quoting United States v. Dickerson, 248 F.3d 1036, 1041-42 (11th Cir.
2009)).
Shapiro’s testimony failed to meet this standard for a couple of reasons. The
district court first pointed out that the only testimony that was clearly perjured
related to Shapiro’s occupation and business purpose. (Id. at 15) It also found that
the substance of Shapiro’s testimony went only to show that Caro “knowingly
provide names of fictitious shell companies.” (Id.) At least four other witnesses
testified to this same point. (Id. at 15-16) The court therefore denied Caro’s
motion for a new trial. It further determined that Caro was not entitled to an
evidentiary hearing because the purported new evidence, even if accepted, was not
material enough to overturn the jury verdict against him. (Id. at 17-18)
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Caro moved for reconsideration on fifteen grounds. The district court again
denied him discovery and a new trial. (R. 644, Dist. Ct. Op.) This timely appeal
followed.
II. ANALYSIS
A. Standard of review
We review the district court’s denial of both the motion for a new trial and
the motion to compel discovery under the abuse-of-discretion standard. See United
States v. Thompson, 335 F. App’x 876, 879, 882 (11th Cir. 2009) (citing United
States v. Vallejo, 297 F.3d 1154, 1163 (11th Cir. 2002)) (addressing both types of
motions).
B. Discussion
Because the district court would be entitled to consider any new discovery
before ruling on the motion for a new trial, we will assume without deciding that
the question of discovery should be considered first. We will thus begin our
analysis there.
1. Caro is not entitled to discovery or an evidentiary
hearing on his motion for a new trial because the trial
judge was well-qualified to rule on the motion without a
hearing
The district court has the discretion to deny a motion for post-trial discovery
or an evidentiary hearing on a motion for a new trial if “the acumen gained by a
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trial judge over the course of the proceedings [makes her] well qualified to rule on
the basis of affidavits without a hearing.” United States v. Schlei, 122 F.3d 944,
994 (11th Cir. 1997) (quoting United States v. Hamilton, 559 F.2d 1370, 1373-74
(5th Cir. 1977)). In fact, motions for a new trial can “ordinarily be decided upon
affidavits,” with evidentiary hearings ordered only when they are necessary
“because of certain unique situations typically involving allegations of jury
tampering, prosecutorial misconduct, or third party confession.” United States v.
Johnson, 305 F. App’x 524, 529 (11th Cir. 2008) (quoting Hamilton, 559 F.2d at
1373)).
No such situations are present here. As discussed in more detail below, the
key issue in Caro’s motion for a new trial is whether the new evidence would
likely have resulted in a different outcome. District Judge Joan Lenard, who ruled
upon Caro’s motion, also presided over his trial and was thus “already familiar
with the evidence and the demeanor of the witnesses.” See United States v.
Mitchell, No. 13-14893, 2014 WL 2853845, at *2 (11th Cir. June 24, 2014).
Under these circumstances, “it was not necessary for the court to conduct an
evidentiary hearing before ruling on [Caro’s] motion.” Id. See also United States
v. Marti, 317 F. App’x 948, 950 (11th Cir. 2009) (“The district court presided over
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Marti’s trial and was sufficiently familiar with the case to determine that Marti’s
new evidence was not material to his defense.”).
2. Caro is not entitled to a new trial because the newly
discovered evidence would not have altered the outcome
of the case
We turn next to the multi-faceted motion for a new trial. Although Caro’s
argument for a new trial stems from one new “fact”—the prosecutor’s failure to
disclose that a government witness was under investigation for fraud in another
district—it relies on three distinct legal theories: (1) that a new trial is warranted
under Rule 33(b)(1) of the Federal Rules of Criminal procedure based on newly
discovered evidence, (2) that a new trial is warranted because the government
violated its obligations under Brady v. Maryland, 373 U.S. 83 (1963), and (3) that
a new trial is warranted because the government violated its obligations under
Giglio v. United States, 405 U.S. 150 (1972). Each of these theories requires the
court to apply a distinct test.
To prevail on a garden-variety motion for a new trial under Rule 33, Caro
would have to meet a five-part test:
(1) the evidence must be discovered following trial; (2) the movant
must show due diligence to discover the evidence; (3) the evidence
must not be merely cumulative or impeaching; (4) the evidence must
be material to issues before the court; and (5) the evidence must be of
such a nature that a new trial would probably produce a new result.
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United States v. Hall, 854 F.2d 1269, 1271 (11th Cir. 1988).
To be granted a new trial based on the government’s violation of its Brady
obligations, Caro would have to meet a four-part test:
(1) the government possessed favorable evidence to the defendant; (2)
the defendant does not possess the evidence and could not obtain the
evidence with any reasonable diligence; (3) the prosecution
suppressed the favorable evidence; and (4) had the evidence been
disclosed to the defendant, there is a reasonable probability that the
outcome would have been different.
United States v. Vallejo, 297 F.3d 1154, 1164 (11th Cir. 2002).
Finally, to obtain a new trial under Giglio, Caro would need to meet a two-
part test: “(1) that the prosecution used or failed to correct testimony that [it] knew
or should have known was false and (2) materiality—that there is any reasonable
likelihood the false testimony could have affected the judgment.” Rodriguez v.
Sec'y, Fla. Dep’t of Corr., 756 F.3d 1277, 1302 (11th Cir. 2014). The undisclosed
impeaching evidence, in other words, must be sufficiently important as to “put the
whole case in such a different light as to undermine confidence in the verdict.”
United States v. Dickerson, 248 F.3d 1036, 1041 (11th Cir. 2001) (quoting
Strickler v. Greene, 527 U.S. 263, 290 (1999)).
Although the full requirements of each test are distinct, each requires that
there be a reasonable likelihood that the new information would have affected the
outcome of the case. Because each of the tests for a new trial requires Caro to
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meet every prong, his failure to prove this one element would be fatal to his claim
under all three theories.
The district court in the present case found that “[w]ith Shapiro’s testimony
relevant to such a slim portion of the charges against Defendants, no showing can
be made that ‘a new trial would probably produce a different result.’” (R. 627,
Dist. Ct. Op. at 16) (quoting United States v. Jernigan, 341 F.3d 1273, 1287 (11th
Cir. 2003)). When asked to reconsider its decision, the court once again recounted
the “overwhelming” evidence against Caro and reaffirmed that the new
information regarding Shapiro’s fraud investigation and related perjured testimony
“was not material.” (R. 644, Dist. Ct. Op. at 24-27).
We owe substantial deference to the district court’s conclusion. See United
States v. Horton, 622 F.2d 144, 147 (5th Cir. 1980) (highlighting the importance of
“deference to the trial judge, who has had the opportunity to observe the witnesses
and to consider the evidence in the context of a living trial rather than upon a cold
record”) (quoting Massey v. Gulf Oil. Corp., 508 F.2d 92, 95-95 (5th Cir. 1975)).
The district judge sat through the entire three-month trial. She heard every
witness, reviewed every exhibit, and had the benefit of hearing both opening and
closing arguments to put the evidence in perspective. She is therefore in a
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significantly better position than this court to determine the potential impact of
Shapiro’s impeachment.
Caro nevertheless spends almost ten pages of his brief rehashing his belief in
a “wholly probable” different result if he had been armed with information about
Shapiro’s investigation. (Appellant Br. at 33-43) He argues that the district court
“ignored how important witness credibility was,” “failed to recognize the invalidity
of the entire theory of the prosecution,” and did not properly account for “the
extent of Shapiro’s wrongdoing and the ongoing government investigation of him,
in light of its impact on both the testimony he provided and the integrity of the
proceedings.” (Id. at 39-41)
In support of his argument, Caro primarily relies on United States v.
Espinosa-Hernandez, 918 F.2d 911 (11th Cir. 1990). The newly discovered
evidence in that case consisted of the government’s lead agent being investigated
for “both his participation in the escape from federal custody of an incarcerated
confidential government informant and his alleged distribution of cocaine.” Id. at
913. Furthermore, the agent was indicted for making false statements regarding
his past use and sale of drugs. The district court denied the defendant’s motions
for a new trial and an evidentiary hearing because the evidence was deemed merely
impeaching and unlikely to result in a different outcome at trial.
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This court disagreed. It pointed out that the agent’s testimony in
Espinosa-Hernandez directly contradicted the defendant’s on a determinative
question of fact, untouched by other witnesses. Id. at 914. The court further
reasoned that if the jury sided with the agent on this critical point, the jury may
have been unwilling to believe other aspects of the defendant’s testimony. Id. It
also noted that the agent “was alone responsible for persuading the grand jury that
a single conspiracy existed,” and that a critical defense witness was deemed
unavailable based on the agent’s representations to the court. Id. Because so many
facets of the defendant’s conviction hinged on the agent’s credibility, this court
determined that “it [was] too soon to declare out of hand that the new evidence will
not require a new trial” and remanded the case for discovery and an evidentiary
hearing on the matter. Id.In subsequent cases, this court has often distinguished Espinosa-Hernandez
on its facts. The court in United States v. Johnson, 305 F. App’x 524 (11th Cir.
2008), for example, distinguished Espinosa-Hernandez based on the relative
insignificance of the evidence in question, the abundance of additional witness
testimony, and the fact that the defendant in Johnson was not deprived of his
ability to present witnesses due to the testimony of the questionable witness. Id. at
530-31. A similar distinction was drawn in United States v. Collins, 521 F. App’x
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855 (11th Cir. 2013), where the court concluded that the plethora of evidence
corroborating the now-dubious testimony supported the district court’s conclusion
that the new evidence was unlikely to alter the verdict. Id. at 862. Likewise, in
United States v. Thompson, 335 F. App’x 876 (11th Cir. 2009), the court affirmed
the trial court’s conclusion that new evidence relating to the investigating agent’s
credibility was unlikely to result in a different outcome at trial because of the
“substantial evidence” of the defendant’s guilt. Id. at 881.
The circumstances in the present case are much closer to Johnson, Collins,
and Thompson than to Espinosa-Hernandez. As the district court pointed out,
Shapiro’s testimony addressed only a “slim portion” of the case against Caro (R.
627, Dist. Ct. Op. at 16) and there was “overwhelming” evidence of Caro’s guilt
(R. 644, Dist. Ct. Op. at 24-27). Caro’s differing opinion about the weight of
Shapiro’s testimony does not justify reversal. The district court discussed
Shapiro’s testimony at length, placed it in context with the other evidence
presented, and concluded that the new information would cause no change in the
overall result.
We review that decision under the abuse-of-discretion standard, which
allows for a “range of possible conclusions . . . unless the district court has made a
clear error of judgment, or has applied the wrong legal standard.” United States v.
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Frazier, 387 F.3d 1244, 1259 (11th Cir. 2004) (en banc). No such error is present
here.
III. CONCLUSION
For all of the reasons set forth above, we AFFIRM the judgment of the
district court.
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