United States v. Cirilo Madrid

Case: 13-50414 Document: 00513091274 Page: 1 Date Filed: 06/24/2015
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 13-50414
United States Court of Appeals
Fifth Circuit
FILED
June 24, 2015
Lyle W. Cayce
UNITED STATES OF AMERICA, Clerk
Plaintiff - Appellee
v.
CIRILO CHILO LARA MADRID,
Defendant - Appellant
Appeal from the United States District Court
for the Western District of Texas
USDC No. 3:11-CR-3020
Before KING, DENNIS, and CLEMENT, Circuit Judges.
PER CURIAM:*
Cirilo “Chilo” Lara Madrid appeals his criminal conviction and sentence
after a jury found him guilty of conspiring to defraud the United States by
procuring federal program funds through false pretenses and bribing an agent
of a local government, in violation of 18 U.S.C. §§ 371, 666(a)(1)(A), (a)(2)
* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
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(Count 1); bribery of an agent of local government, in violation of 18 U.S.C. §
666(a)(2) (Count 2); and conspiracy to commit mail fraud in violation of 18
U.S.C. §§ 1341, 1346, 1349 (Count 3). Madrid was sentenced to 60 months in
prison on Count 1, 120 months on Count 2, and 180 months on Count 3, all to
run concurrently. The district court additionally ordered that Madrid pay
$514,000 of restitution and, after a forfeiture hearing, ordered forfeiture of the
proceeds of the conspiracy pursuant to 18 U.S.C. § 981(a)(1).
On appeal, Madrid contends that the district court erred in denying two
pretrial motions: (1) his motion to dismiss on speedy trial grounds; and (2) his
motion to compel production of the grand jury transcripts, which he alleges
would reveal prosecutorial misconduct that may warrant dismissal of the
indictment. Madrid also contends that the evidence was insufficient as to all
three counts of conviction, that Count 2 was time-barred, that the district court
made various erroneous rulings throughout trial regarding the admission or
exclusion of evidence, that the judge improperly instructed the jury on
conspiracy liability, and that the cumulative error doctrine requires reversal
of his conviction. With regard to his sentence, Madrid asserts that the district
court erroneously enhanced his criminal offense level under various provisions
of the United States Sentencing Guidelines (U.S.S.G.), that his sentence is
substantively unreasonable, and that the restitution and forfeiture orders
imposed were founded upon clearly erroneous findings of fact.
We AFFIRM Madrid’s convictions and sentences.
I.
A. Background
The criminal charges against Madrid all stem from his involvement in a
six-year, approximately nine-million-dollar federal contract granted to El Paso
County, Texas, to provide services to children with severe mental health
2
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problems and emotional disturbances. An El Paso collective entitled the
Border Children’s Mental Health Collaborative (“the Collaborative”) sought
and obtained a grant from the Substance Abuse and Mental Health Services
Administration (SAMHSA), a federal agency within the United States
Department of Health and Human Services, to implement and sustain a
system of services to provide comprehensive mental health treatment to
children within the local El Paso community. 1
The SAMHSA grant required El Paso County to make contributions to
help fund the Collaborative’s programming. The County’s contributions could
be cash donations or “in-kind” contributions. The option for the provision of an
in-kind contribution, such as, for example, the donation of office space or
services, encouraged the County to use its existing resources that had tangible
value to support the Collaborative and its goals. The provision of cash or in-
kind contributions allowed the County to “draw down” federal funds under a
“matching” system. In other words, initially, SAMHSA provided the County
with three dollars to “match” every one dollar of cash or one-dollar worth of in-
kind services the County contributed towards the program. As each year
passed, SAMHSA would gradually provide less funds per dollar contributed by
the County so that the County would gradually move towards financial
sustainability without federal funding.
County Judge Dolores Briones was appointed as the “Principal
Investigator” for the SAMHSA grant, which required her to oversee
management of the grant. Under Briones’s leadership, there was a
“governance team,” also referred to as the “policy advisory group,” which
functioned in a similar manner as a board of directors. The governance team
1 Previously, children with severe mental health issues were treated at facilities
outside El Paso County. The Collaborative sought to bring those children back to their
community and to locally provide services to these children and their families.
3
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was led by Judge Alfredo Chavez. Madrid, formerly the executive director of
Aliviane, Inc., a nonprofit substance-abuse program, was also a member of the
governance team.
In addition to the governance team, the Collaborative was contractually
required to have an “evaluation team” tasked with collecting data and
reporting on the children and families enrolled in the program to ensure that
the Collaborative was producing positive results for its target group. The
evaluation team was required to survey families and children about their
experiences and outcomes after receiving services through the Collaborative’s
program and to enter the collected data into a national database. A full-time
evaluator with a Ph.D. or equivalent was required to manage the evaluation
team. Further, SAMHSA required that the project have an “institutional
review board” (IRB) approve its evaluation protocol. 2
For the first three years of the Collaborative’s contract—between 2002
and 2005—an organization called TriWest contracted with the County to carry
out the evaluation team’s functions. Despite TriWest’s apparent success 3 in
creating and implementing evaluation systems for the collaborative, in 2005,
Judge Chavez expressed disappointment that TriWest had not created a
2 An IRB is required to ensure that the confidentiality of the participants and their
families is protected.
3 Peter Selby, the co-principal of TriWest, testified that TriWest had experience
successfully performing evaluation services for various grants conducted under SAMHSA in
several states throughout the country. Selby testified that during the initial years of the
Collaborative’s grant his team created, inter alia, a “logic model” which is a “schematic” as to
how the program would work, a “review matrix” for evaluating proposals from the care
management arm of the Collaborative, a fidelity monitoring system to track what occurred
during the provision of services, as well as a cultural competency tool. Selby also testified
that over 90% of the participants enrolled in the Collaborative’s program participated in
TriWest’s voluntary evaluation services.
4
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sustainability plan 4 and, thereafter, directed that Requests for Proposal
(RFPs) be issued to solicit bids for a new evaluation team contractor. 5
The County received only two responses to the RFP—one from TriWest
and one from LKG Enterpises, Inc. Ruben “Sonny” Garcia—Madrid’s
codefendant who ultimately pleaded guilty and testified against Madrid—was
the president and founder of LKG. Despite LGK’s limited experience working
hands-on with children with serious emotional disturbances, its higher
anticipated cost for provision of services as compared to TriWest’s, and the
potential interruption of evaluation services caused by a change in contractors,
LKG was awarded the contract. LKG’s contract provided that it would be paid
$50,000 per month for evaluation services and that LKG would submit
monthly in-kind contribution reports equal to the $50,000 cost of evaluation
services at no additional cost to the Collaborative. Briones, as the “Principal
Investigator” for the SAMHSA grant, signed the evaluation-service-provider
contract between the County and LKG on November 1, 2005.
When initially planning for the execution of LKG’s contract, Madrid
suggested that Garcia speak with Jose Soria, the owner and sole employee of
a corporation called Introspectives, Inc. 6 Garcia approached Soria about the
4The Collaborative was required to develop a sustainability plan to ensure that when
the federal funding would cease after six years, the County would have the systems and
finances in place to continue the program. The evidence adduced at trial established that
TriWest was not contractually obligated to create a sustainability plan and that, under the
SAMHSA grant, it was ultimately the County’s responsibility. However, the evidence also
suggested that LKG Enterprises, Inc., the evaluation team that took over the contract after
TriWest, signed a contract indicating that they would create a sustainability plan.
5Chavez’s directive to rebid for contractors circumvented the usual manner in which
these decisions were made—namely, Chavez did not consult with or bring the issue to the
attention of the governance team, nor were SAMHSA personnel timely notified that
TriWest’s contract was terminated.
6 Madrid, who Garcia had a long-standing professional relationship with, advised
Garcia regarding various aspects of LKG’s work with the Collaborative from the beginning
of this enterprise. For example, Garcia testified that he consulted with Madrid while he was
preparing LKG’s response to the Request for Proposal.
5
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contract and sustainability plan for the Collaborative, and, ultimately, on
December 6, 2005, Soria drafted a contract between Introspectives and LKG,
with an agreed upon monthly flat fee of $10,000. The contract required Soria
and his corporation, Introspectives, to conduct “quality insurance.” Soria was
to provide, for example, “monthly reports, evaluation analysis, statistical
comparative studies,” and conduct electronic research to determine “different
avenues for financial sustainability.” On December 14, 2005, eight days after
LKG and Soria executed their contract, Soria contracted with Madrid to assist
with Introspective’s sustainability work. The contract between Soria and
Madrid provided that Madrid would perform “strictly sustainability” work in
exchange for $150 an hour up to 100 hours a month, plus $500 per month for
expenses.
As discussed more fully below, the government’s evidence established
that LKG did not perform on the contract, yet fraudulently represented via
monthly invoices that it completed a total of $550,000 worth of work. As a
result of LKG’s failure to uphold its contractual obligations, SAMHSA mailed
Briones two letters in November 2006, informing her that the County had
“materially failed to comply” with the terms of the grant, expressed concern
about LKG’s high contract price, and warned that LKG must obtain and
maintain compliance with its contractual obligations in order for the County
to continue receiving SAMHSA funding. Ultimately, even after LKG proposed
to significantly lower its fee, LKG’s evaluation team contract was not renewed
the following year. The County instead awarded the contract to TriWest.
B. The Bribe to Judge Briones
In the three or four months after LKG secured the contract with the
County, Garcia and Madrid met with Briones at different local restaurants
approximately four times. Garcia testified that Madrid arranged for these
6
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meetings with Briones. During these meetings, Briones was “always asking”
both of them for money for a new apartment and to help with the significant
costs she was incurring to treat a serious health problem. Garcia testified that
it was “obvious” to him that in return for providing Briones with money, she
would support the renewal of LKG’s contract with the County.
After meeting with Briones several times, Madrid told Garcia that they
were going to meet with Jan Zavala, Briones’s longtime friend. Zavala met
with Garcia and Madrid twice, during which, according to her testimony, both
men talked but Madrid “did a lot of the talking.” As a result of these meetings,
Zavala signed a contract with LKG to complete “analytical work” for $3,000 a
month. Zavala agreed to provide $2,000 of each monthly payment to Briones
and keep the remaining $1,000 for herself. Garcia and Zavala both testified
that Zavala never actually provided any data analysis, yet accepted monthly
checks for $3,000, providing $2,000 per month to Briones. Garcia testified that
contracting with Zavala was “just a way to give money to Dolores Briones” in
exchange for Briones’s support of the LKG contract. Garcia mailed these
monthly checks, with one exception, 7 to Zavala.
To corroborate Garcia’s and Zavala’s testimony, the government
introduced evidence of phone logs demonstrating the telephone
communications between Madrid, Zavala, and Briones. The evidence indicated
that Madrid received and returned multiple phone calls from Briones before
and during the time LKG had the evaluation team contract with the County.
The evidence additionally demonstrated that Madrid initiated contact with
Zavala on December 19, 2005—around the time that Zavala agreed to accept
the $3,000 monthly payments in order to funnel money to Briones. 8
7 The final check, dated December 21, 2006, was hand-delivered to Zavala by Garcia.
8The contract between Garcia and Zavala is dated November 1, 2005, but both Garcia
and Zavala indicated that it was actually signed later than that. Precisely when Garcia and
7
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The government’s evidence additionally established the various efforts
Briones made to apparently uphold her end of the deal and support LKG’s
maintenance and renewal of the contract despite the company’s
noncompliance. For example, Briones made fraudulent statements to the El
Paso County Commissioners Court (“Commissioners Court”) regarding the
work that LKG was conducting and misrepresented SAMHSA’s level of
satisfaction with LKG’s provision of services. Specifically, the government
presented the jury with recordings of Commissioners Court sessions in which
Briones testified that the “Washington bunch was pleased” with LKG’s results
when in fact, SAMHSA officials were quite concerned about the lack of
evaluation activity. Similarly, Garcia testified that he and Madrid met with
Briones after SAMHSA conducted a site visit and expressed their concern
about LKG’s performance. Garcia testified that he, Madrid, and Briones
discussed how Briones could intervene and, subsequently, Garcia and Madrid
helped Briones prepare a responsive letter to SAMHSA that was meant to
paint LKG in a positive light, despite severe performance issues. Further,
when Donna Teague, the grant supervisor for the Collaborative, told Garcia
that she would not sign off on one of the monthly checks to LKG until he
provided documentation of their work, Garcia responded that he would talk to
Briones. Shortly thereafter, Briones called Teague and instructed her to sign
off on the check to LKG. Teague complied, believing that Briones had the
documentation to support the invoice. Garcia testified that Briones was
expected to intervene on LKG’s behalf because of the money he and Madrid
were providing her.
Madrid met and contracted with Zavala is unclear from the record, but the evidence suggests
it was sometime between November and December 2005 and was “around the holidays.”
8
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At the end of 2006, Briones decided not to run for reelection, and,
ultimately, Anthony Cobos was elected to take her place. Garcia testified that
around December 2006, Cobos told him that if Garcia wanted his support for
LKG’s renewal of the contract, he would have to provide financial incentives.
Thereafter, Madrid and Garcia, along with Soria and another individual, met
with Cobos at a local restaurant and handed him envelopes of cash. Garcia
testified that by paying Cobos this money, he expected to receive in return
what they had received from Briones—support for renewal of the LKG
contract. Madrid and Garcia subsequently met with Cobos at his private office
to discuss contract renewal issues and thereafter helped Cobos prepare for the
Commissioners Court session regarding LKG’s performance problems and
possible contract renewal.
C. Conspiracy to Defraud the United States
The government presented evidence that LKG was noncompliant with
various essential contractual obligations and effectively failed to complete any
valuable work, yet received $50,000 monthly payments from the County by
falsifying monthly invoices. The government’s evidence established that LKG
failed to hire and maintain a full-time Ph.D. on staff, as required by the
SAMHSA contract, and lacked access to an IRB from November 2005 until
March of 2006. Without an IRB’s approval of its evaluation protocol, LKG was
unable to submit data to the national database, as required under its contract.
Accordingly, while an IRB was unavailable, children were provided services
under the SAMHSA grant, but no corresponding data was collected or entered
into the national database. After obtaining an IRB’s approval, LKG submitted
evaluation reports indicating that it collected data on approximately 167
children; however, Peter Selby, the co-principal of TriWest, testified that when
TriWest returned as the evaluation team, as far as he and his team could see,
9
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no data had been entered by LKG. Likewise, in September of 2006, when
SAMHSA conducted a site visit, Lisa Tomaka, who had recently resigned as
the project director for the Collaborative, met with SAMHSA personnel to
express her concerns that money was being provided to LKG without receipt
of the agreed-upon services. Following the site visit, Michelle Herman of
SAMHSA drafted a report indicating that there was an absence of evaluation
activity data, writing that it appeared that “there was not much being done.”
At trial, Herman testified that as of November 21, 2006, there had been no
data collection since September 30, 2005.
In addition to the lack of evaluation activity, the government’s evidence
established that Madrid, who, through his contract with Introspectives, was
hired to conduct sustainability work under LKG’s contract, failed to create the
requisite “sustainability tool” and produced only a largely plagiarized
sustainability report. The sustainability report that Madrid ultimately
provided to LKG, and that LKG in turn submitted to the Collaborative, was in
large part copied from various publicly accessible Internet sources. Moreover,
the sustainability “plans” included in Madrid’s report were duplicative of
information already known to the Collaborative. Although Madrid failed to
demonstrate that he produced the work contracted for, he submitted nearly
identical invoices each month, representing without documentation that he
completed precisely 53.33 hours of work. 9 As a result, Madrid received
9 The government introduced Madrid’s work logs, which indicated that for nearly
every month, Madrid purported to work precisely 53.33 hours each month, which yielded a
$8,000 monthly fee. Madrid failed to provide any supporting documentation to verify the
work he completed. Soria would nonetheless write a check to Madrid for however many hours
he indicated he worked. Later, however, Soria tentatively testified that he “guess[ed]” he
received the value of the work paid for.
10
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payments totaling $99,600 10 through his contract with Introspectives—nearly
all of the $110,000 that LKG paid Introspectives.
The evidence further established that Madrid and Garcia consistently
made fraudulent representations regarding the in-kind contributions they
provided. Tomaka testified that, during her tenure as project director, she
reviewed LKG’s monthly invoices reporting that it completed $50,000 of in-
kind contributions a month, and found that the invoices were devoid of any
supporting documentation or verification of any in-kind services LKG alleged
it provided. 11 LKG’s monthly invoices were each nearly identical, providing
only that it furnished “professional services” and failed to establish that it
actually contributed the in-kind services reflected in the invoices. In total,
LKG represented that it provided in-kind services amounting to $550,000,
without supporting documentation or data to substantiate the work it allegedly
completed. The County relied upon LKG’s representations regarding its in-
kind contributions to “draw down” federal funds for the program. 12 Likewise,
Madrid’s in-kind logs, which Soria testified he never received, reflected that
Madrid reportedly contributed exactly fifty hours of in-kind services each
month, providing free work ten hours every Saturday of the month when there
were five Saturdays in the month. When there were only four Saturdays in
any given month, then Madrid’s logs indicated that he would work ten hours
each Saturday, and an additional ten hours the last Sunday of the month.
10 After taxes, Madrid was paid a net total of $77,471.20 from Introspetives.
11 When Tomaka asked for the information, it would sometimes be provided to her
verbally or via email. Tomaka testified that despite communication with LKG, she never
received enough information to substantiate the invoices.
In total, the County claimed $1 million of in-kind contributions. Accordingly, LKG’s
12
unsupported invoices provided for over half of the in-kind contributions reported to SAMHSA.
11
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Accordingly, each invoice reflected precisely $5,000 worth of volunteer in-kind
services a month, without corresponding documentation or verification.
In addition, the government established that Madrid made various
fraudulent representations in order to support the continuance of the LKG
contract. For example, in a session before the Commissioners Court, Madrid
falsely indicated that LKG had negotiated an offer for a substantial cash
donation from Dr. Rodolfo Arredondo, the then-chairman of the Texas
Department of State Health Services, who purportedly offered to donate
between $300,000 and $500,000 to the Collaborative. However, Dr.
Arrendondo testified at trial that he never offered, and was not authorized to
offer, payment to the Collaborative.
Despite pervasive performance problems, by misrepresenting the work
completed on monthly invoices, LKG received a total of $550,000 from the
County under its contract. Based on the fees paid to LKG and the amount of
LKG’s reported in-kind contributions that the County relied upon to draw
down federal dollars, the evidence established that the County lost a total of
$1,100,000 as a result of its contract with LKG.
D. Madrid’s Defense
After the close of the prosecution’s case, the defense unsuccessfully
moved for a judgment of acquittal on all counts based on insufficiency of the
evidence. The defense then called its only witness, FBI Special Agent Edward
Dominguez. Through Agent Dominguez, the defense admitted a recorded
conversation between Briones and Madrid that took place on June 25, 2010,
during which Briones was wearing a wiretap, unbeknownst to Madrid. Briones
informed Madrid that Zavala was contacted by the FBI, and, thereafter,
Madrid and Briones agreed to meet in El Paso. At this informal meeting, in
response to Briones’s questioning about Zavala, Madrid stated to Briones that
12
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he “didn’t realize what the relationship was going to be between [Briones] and
[Zavala]. . . . I was of the impression . . . that [Zavala] was crunching numbers.”
At trial and in his briefs on appeal, Madrid relied upon this recorded statement
to argue that there was insufficient proof that he was actually aware of the
bribery scheme.
After the conclusion of the eight-day jury trial, the jury convicted Madrid
of all three counts. Madrid raises eighteen issues on appeal, which we address
in turn.
II.
A. Pretrial Issues
1. Speedy Trial
Madrid contends that the district court erred by denying his motion to
dismiss based on a purported Speedy Trial Act violation and that we, therefore,
must vacate his conviction. We review the district court’s legal conclusions
regarding the Speedy Trial Act de novo, while its findings of fact are reviewed
for clear error. See United States v. Tannehill, 49 F.3d 1049, 1051 (5th Cir.
1995).
Under the Speedy Trial Act, the government must “commence” the trial
against a defendant who has entered a plea of not guilty within “seventy days
from the filing date (and making public) of the information or indictment, or
from the date the defendant has appeared before a judicial officer of the court
in which such charge is pending, whichever date last occurs.” 18 U.S.C.
§ 3161(c)(1). The Speedy Trial Act, however, accounts for the fact that some
cases may require more time to prepare for trial. See generally Bloate v. United
States, 559 U.S. 196, 203 (2010) (“[T]he Speedy Trial Act . . . excludes from the
70–day period days lost to certain types of delay.”). “[T]o provide the necessary
flexibility, the Act includes a long and detailed list of periods of delay that are
13
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excluded in computing the time within which trial must start. . . . Much of the
Act’s flexibility is furnished by § 3161(h)([7]), which governs ends-of-justice
continuances.” Zedner v. United States, 547 U.S. 489, 497-98 (2006). An
“ends-of-justice” continuance allows for the district court to toll the clock if it
finds that “such action [serves the ends of justice and] outweigh[s] the best
interest of the public and the defendant in a speedy trial.” 18 U.S.C.
§ 3161(h)(7)(A). When determining whether to grant an ends-of-justice
continuance, the district court must consider various factors, including
whether the case is “so unusual or complex, due to the number of defendants,
the nature of the prosecution, or the existence of novel questions of fact or law,
that it is unreasonable to expect adequate preparation for pretrial proceedings
or for the trial itself within the time limits established by [the Act].” 18 U.S.C.
§ 3161(h)(7)(B)(ii).
Here, the speedy trial clock began to run on January 1, 2012, 13 when the
last codefendant in this multi-defendant case entered his waiver of
appearance. See United States v. Franklin, 148 F.3d 451, 455 (5th Cir. 1998)
(“[T]he speedy trial clock does not begin to run in a multi-defendant
prosecution until the last codefendant makes his initial appearance in court.”).
Madrid acknowledges that, shortly thereafter, on January 10, 2012, the
government filed a motion to designate the case complex and toll the speedy
trial clock. The district court undisputedly granted the government’s motion
to designate the case as complex on January 31, 2012, via a “text-only order.”
13 The district court’s order denying Madrid’s motion to dismiss on Speedy Trial
grounds indicates that the January 1 date is undisputed; however, on appeal, Madrid
contends that the clock commenced on January 5, 2012, and that the government contends
it began on January 6, 2012. The disputed difference is immaterial here because we conclude,
for the reasons stated herein, that the district court indefinitely tolled the speedy trial clock
on January 31, 2012, at most thirty days after the clock commenced, and that, therefore,
there was no Speedy Trial Act violation.
14
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The district court’s order is reflected in a January 31, 2012 docket entry that
reads: “GRANTING 60 Motion to designate case complex.”
Madrid contends below and on appeal that this “text-only” order was
insufficient to actually toll the speedy trial clock because, pursuant to the
district court’s docket sheet, the order only indicates that it granted the
government’s motion to designate the case complex, and does not expressly
grant the motion to toll the speedy trial clock. As such, he contends that the
clock was never tolled and the district court’s order denying his motion to
dismiss on Speedy Trial grounds erroneously “retroactively tried to
characterize” the text order as an order that tolled the speedy trial clock.
The district court rejected Madrid’s argument as “contrary to the plain
language of the text order.” The district court explained that
[t]he text order does not indicate that the Motion [] has been
granted in part, or denied in part, but rather states that this is an
‘Order GRANTING 60.’ The number 60 is hyperlinked to the
‘Government’s Motion for Designation as Complex Case and
Tolling of Speedy Trial Provision,’ docketed at ECP No. 60.” . . .
The fact that the motion title is truncated [in the text-only order]
holds no significance. To enter a text order, the Courtroom
Deputy selects the relevant motion from the CM/ECF case docket,
and then clicks on a disposition option, . . . [and then the] system
automatically generates a text order entry, which includes
information identifying the motion at issue.
The district court thus found that the January 31 text-only order tolled the
speedy trial clock until September 7, 2012, 14 when the court ordered a new
14 Madrid alternatively contends that the government’s January 10 motion only
sought tolling of the speedy trial clock to the next “docket call,” which was scheduled for
February 3, 2012—just three days after the district court granted the government’s motion.
Madrid points to the government’s proposed order, submitted as an attachment to its motion,
which indicates that the speedy trial clock is tolled “between the filing of the Government’s
instant motion and the date set above for docket call is excludable.” The proposed order then
leaves a blank space, presumably for the court to fill in, to indicate when the speedy trial
clock would recommence. Thus, Madrid argues, even if the text-only order did grant the
government’s motion to toll the speedy trial clock, that order only tolled the clock until
15
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continuance and reset the trial date to allow Madrid additional time to review
newly received evidence before trial. 15 In light of the docket entry indicating
that the government’s order to designate the case complex and toll the speedy
trial clock was granted in full, we conclude that the district court’s finding that
it did actually toll the speedy trial clock by entry of the text-order is not clearly
erroneous and thus must be upheld. Because the Speedy Trial clock was
properly tolled from January 31, 2012, until the commencement of trial,
Madrid has not demonstrated that his Speedy Trial Act rights were violated.
2. Disclosure of Grand Jury Transcripts
On December 14, 2011, Madrid was indicted on an 11-count indictment
which included allegations that (1) all of the $3,000 checks LKG provided to
Zavala were mailed to her using the United States Postal Service (USPS),
including the check from LKG to Zavala dated December 21, 2006, and (2) the
February 3, 2012, the next docket call; therefore, he says, the Speedy Trial Act nonetheless
was violated because over 70 non-excludable days passed between when the clock began to
run again on February 3, 2012 and the commencement of trial on December 3, 2012. As the
government argues, however, at the time it filed its motion to toll the speedy trial clock, the
February 3 docket call date was already set and thus, had it meant to toll the clock only until
the date of the next docket call, the government could have inserted that date in its proposed
order. Madrid’s argument does not demonstrate that the district court’s finding that it tolled
the speedy trial clock via text order to a date not certain, which allowed for continuance until
September 7, 2012, was clearly erroneous.
15 “[T]he Supreme Court has held that ‘the Act is clear that the findings must be made,
if only in the judge’s mind, before granting the continuance,’ and failure to make any express
finding on the record cannot be harmless error.” United States v. Dignam, 716 F.3d 915, 921-
22 (5th Cir. 2013) (quoting Zedner, 547 U.S. at 506–07). “‘[T]hose findings must be put on the
record by the time a district court rules on a defendant’s motion to dismiss under
§ 3162(a)(2).’” Id. Here, in its order denying Madrid’s motion to dismiss based on speedy
trial grounds, the district court adequately articulated its reasons for its January 31 order.
The district court reasoned that it granted the continuance “due to the complexity of the case
and the large volume of discovery . . . [and because, therefore,] the interest of justice would
be served by granting the Motion to Continue, and that such ends of justice outweighed the
interests of the public and Madrid in a speedy trial.” “[B]ecause the district court ‘set forth
specific findings’ that were made in the judge’s mind before granting the continuance, its
reasoning . . . satisf[ies] the requirements of § 3161(h)(7)(A).” Id. (citing Zedner, 547 U.S. at
507; United States v. Hale, 685 F.3d 522, 535 (5th Cir. 2012); United States v. McNealy, 625
F.3d 858, 863 (5th Cir. 2010)).
16
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No. 13-50414
bribery of Briones was intended, in part, to assist LKG in fraudulently
“obtaining” the contract to provide evaluation services under the SAMHSA
grant. On July 27, 2012, after pretrial proceedings began, Madrid filed a
motion for disclosure of grand jury transcripts, pursuant to Federal Rule of
Criminal Procedure 6(e)(3)(E)(ii). In this motion, Madrid alleged (and
supported his claims with documentary evidence), 16 that the government had
reason to know before presenting its case to the grand jury that the December
21 check was not sent from LKG to Zavala via USPS but, rather, was hand-
delivered by Garcia, and that Briones was not bribed to help LKG “obtain” the
evaluation services contract, which was awarded on October 10, 2005, but
rather that she was bribed on later dates to help “maintain and renew” the
contract. Based on these facts, Madrid asserted that “someone in the
government made these representations to the Grand Jury through sworn
testimony.” On August 15, 2012, however, before the district court ruled on
the motion, the grand jury returned a 3-count superseding indictment. Counts
1 and 2 were substantively unchanged from the original indictment, but the
superseding indictment, inter alia, omitted the allegations that the check to
Zavala dated December 21, 2006, had been sent via USPS and, instead of
alleging that Briones had been bribed to help “obtain” the evaluative services
contract, averred that Madrid and Garcia had bribed Briones to “maintain the
evaluation services contract . . . , support defendant LKG’s participation in the
16 Madrid attached FBI reports indicating that Zavala met with the FBI on April 10,
2010, and again on November 21, 2011, and at both times indicated that the December 2006
check was hand-delivered to her by Garcia. Despite the government’s knowledge of this fact,
the indictment indicates in both the introduction, and under the description of the actions
that constitute Count 1, that Garcia mailed all checks to Zavala. Likewise, Madrid points to
the FBI’s reports regarding its interviews of Briones, which indicates that Briones “did not
accept the money from Garcia and LKG in exchange for her vote [to obtain the
contract]. . . . [She] accepted the money in exchange for helping LKG keep [the County’s]
evaluation contract.” Accordingly, Madrid says, the documents suggests that the government
knew that Madrid did not conspire to obtain the LKG contract.
17
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No. 13-50414
[Collaborative,] [and] defend LKG’s performance to SAMHSA.” On September
5, 2012, the district court denied Madrid’s motion to disclose the grand jury
transcripts, concluding that “because the Government has filed a superseding
indictment omitting the substantive mail fraud charges and the allegation that
[Briones] assisted defendants in obtaining the contract, the issues raised are
no longer relevant” and “[a]ccordingly,” the motion “is DENIED as MOOT.”
A district court’s ruling on a motion to disclose grand jury transcripts is
reviewed for abuse of discretion. United States v. Miramontez, 995 F.2d 56, 59
(5th Cir. 1993). “The proper functioning of the grand jury system depends upon
the secrecy of the grand jury proceedings.” Id. “The burden is on the party
seeking disclosure to show that ‘a particularized need’ exists for the materials
that outweighs the policy of secrecy.” Id. The party seeking disclosure “must
demonstrate that (1) the material he seeks is needed to avoid a possible
injustice in another judicial proceeding, (2) the need for disclosure is greater
than the need for continued secrecy, and (3) his request is structured to cover
only material so needed.” Id.
First, Madrid argues that without the incorrect allegation in the original
indictment that the December 21 check was sent via USPS, that Count 3,
charging him with conspiracy to commit mail fraud, would have been time-
barred. Madrid correctly argues that because the relevant statute of
limitations is five years, 17 he cannot be liable for criminal activity that was
completed more than five years before the original indictment was returned on
December 14, 2011. Consequently, he contends, because LKG’s check to
Zavala dated December 21, 2006, was hand-delivered and not mailed, and
because all of the other checks mentioned in the indictment were mailed to
Zavala before December 14, 2006, all of the mail fraud charges alleged in the
17 18 U.S.C. § 3282; see United States v. Edelkind, 525 F.3d 388, 393 (5th Cir. 2008).
18
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original indictment are barred by the statute of limitations. However, as
noted, the allegation as to the December 21 check to Zavala was deleted from
the superseding indictment. Count 3 of the superseding indictment alleges
three acts in furtherance of mail fraud crimes, all of which occurred after
December 14, 2006, and within the limitations period. Specifically, Count 3 of
the superseding indictment alleges that Madrid and his coconspirators caused
to be sent via USPS “checks, letters, reporting documents and other
correspondence as a result of and in support of the contract entered into
between LKG and the County of El Paso” on December 31, 2006, January 31,
2007, and March 29, 2007. 18 These allegations as to the mailings on December
31, 2006, January 31, 2007, and March 29, 2007, were included in the original
indictment and have been retained in the superseding indictment. Therefore,
Madrid’s assertion that, but for the inclusion of the erroneous allegation
18 As the Supreme Court has explained, to establish a violation of 18 U.S.C. § 1341,
“any ‘mailing that is incident to an essential part of the scheme satisfies the mailing element,’
even if the mailing itself ‘contain[s] no false information[.]’” Bridge v. Phoenix Bond & Indem.
Co., 553 U.S. 639, 647 (2008) (quoting Schmuck v. United States, 489 U.S. 705, 712, 715
(1989)). “In addition, the defendant need not personally effect the mailing.” United States v.
Traxler, 764 F.3d 486, 488 (5th Cir. 2014). “It is sufficient that the defendant ‘cause’ the
mailing, or ‘act with knowledge that the use of the mails will follow in the ordinary course of
business, or where such use can reasonably be foreseen, even though not actually intended.’”
Id. (quoting Pereira v. United States, 347 U.S. 1, 8-9 (1954)).
Here, Count 3 of the superseding indictment alleged that on December 31, 2006, the
County mailed to SAMHSA the Fourth Year Annual Report, which included the County’s
calculations of the payments provided to LKG in exchange for evaluation services as well as
the total in-kind contributions the County received. The report thus relied, in part, upon
LKG’s fraudulent representations regarding its in-kind contributions and services
performed. Count 3 also alleges that on January 31, 2007, a letter concerning LKG’s
performance was mailed to LKG, and that on March 29, 2007, a letter cancelling LKG’s
contract was mailed to LKG, each via the USPS. The Annual Report relying upon false
representations made by the coconspirators during the course of the conspiracy, as well as
the letters concerning LKG’s failure to perform under its contract and the eventual
termination of the contract, are “incidental to the essential part of the scheme” to
fraudulently obtain federal funds by false pretenses and thus suffice to establish the mailing
element of Count 3. See id.
19
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regarding the December 21 check to Zavala, all of the mail fraud charges
against Madrid would have been time-barred is mistaken and without merit.
Second, Madrid contends that the denial of his motion to disclose the
grand jury transcripts foreclosed him from moving to dismiss the indictment
in its entirety based on the government’s knowing presentation of perjured
testimony to the grand jury—a claim he cannot substantiate without access to
the grand jury transcripts. He argues that if the judge had examined the grand
jury testimony and discovered perjury, the entire indictment might have been
dismissed, possibly with prejudice, thereby barring Madrid’s prosecution.
However, the mere fact that the original indictment may have erroneously set
forth charges that the government would have been unable to prove—which
required the corrections made by the superseding indictment—does not
necessarily demonstrate perjury. Rather than a sign of knowingly false
testimony, the discrepancy may have been due to an unintentional drafting
error. Moreover, as a general rule, “[a]fter indictment, the judiciary’s role in
policing the credibility of witnesses before a grand jury is minimal.” United
States v. Strouse, 286 F.3d 767, 771 (5th Cir. 2002).
As the Supreme Court decisions make clear, “the supervisory power can
be used to dismiss an indictment because of misconduct before the grand jury,
at least where that misconduct amounts to a violation of one of those ‘few, clear
rules which were carefully drafted and approved by this Court and by Congress
to ensure the integrity of the grand jury’s functions.’” United States v.
Williams, 504 U.S. 36, 46 (1992) (quoting United States v. Mechanik, 475 U.S.
66, 74 (1986) (O’Connor, J., concurring in judgment)) (footnote omitted).
Because Madrid failed to allege or show a violation of any such clear rule in
the present case, we conclude that the district court did not abuse its discretion
in denying his motion.
20
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No. 13-50414
B. Trial and Conviction
1. Sufficiency of the Evidence
Madrid challenges the sufficiency of the evidence as to all three counts
of conviction. Because Madrid moved for a judgment of acquittal on all counts,
he preserved the issue for appeal, and, therefore, we review his claim de novo.
See United States v. Grant, 683 F.3d 639, 642 (5th Cir. 2012). On review of
sufficiency of the evidence claims, “the relevant question is whether, after
viewing the evidence in the light most favorable to the prosecution, any
rational trier of fact could have found the essential elements of the crime
beyond a reasonable doubt.” Jackson v. Virginia, 443 U.S. 307, 319 (1979);
Coleman v. Johnson, 132 S. Ct. 2060, 2062 (2012) (“A reviewing court may set
aside the jury’s verdict on the ground of insufficient evidence only if no rational
trier of fact could have agreed with the jury.”).
a. Count 1
The jury found Madrid guilty of Count 1, conspiring to defraud the
United States and bribe Briones, pursuant to 18 U.S.C. §§ 371 and
666(a)(1)(A), (a)(2). Madrid argues that there was insufficient evidence to
convict him of conspiracy because the government failed to prove either of its
two theories of guilt: (1) that there was a scheme to defraud the citizens of El
Paso of the honest services of Judge Briones through the bribe of Briones; and
(2) that Madrid conspired to obtain federal money and property by false
pretenses. Further, Madrid contends that there was insufficient evidence of
an express agreement between him and the other conspirators and that the
government failed to allege or prove that the United States was a target of the
conspiracy to defraud, as he contends is necessary under 18 U.S.C. § 371.
21
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i. Conspiracy to Bribe Judge Briones
Under 18 U.S.C. § 666(a)(2), it is unlawful to “corruptly give[], offer[], or
agree[] to give anything of value to any person, with intent to influence or
reward an agent of an organization or of a State, . . . or any agency thereof, in
connection with any business, transaction, or series of transactions of such
organization, government, or agency involving anything of value of $5,000 or
more.” Madrid contends that there was no evidence or testimony to support
his conviction for the conspiracy to bribe Briones in violation of § 666(a)(2),
because, he argues, there is no evidence that he and Garcia had an express
agreement to bribe Briones or that he knew about the payments to her. 19
To prove that Madrid was part of a conspiracy to bribe Briones, “the
government must show ‘(1) an agreement between two or more persons to
pursue an unlawful objective; (2) the defendant’s knowledge of the unlawful
objective and voluntary agreement to join the conspiracy; and (3) an overt act
by one or more of the members of the conspiracy in furtherance of the objective
of the conspiracy.’” United States v. Richard, 775 F.3d 287, 294 (5th Cir. 2014)
(quoting United States v. Coleman, 609 F.3d 699, 704 (5th Cir. 2010)). “To be
a conspiracy, an express, explicit agreement is not required; a tacit agreement
is enough.” United States v. Shoemaker, 746 F.3d 614, 623 (5th Cir. 2014)
(quoting United States v. Westbrook, 119 F.3d 1176, 1189 (5th Cir. 1997)); see
also United States v. Grant, 683 F.3d 639, 643 (5th Cir. 2012) (“The agreement
19 Madrid points to the fact that Garcia mailed or hand-delivered to Zavala all the
checks that were then used to pay Briones and that Garcia testified that he did not know
whether Madrid ever expressly discussed with Briones the plan for Zavala to receive money
from LKG that was intended for Briones. Madrid additionally relies on Zavala’s testimony
that she “do[es] [not] remember” or does not have any “personal recollection” of whether she
discussed paying Briones during the meetings that Madrid attended and, therefore, Madrid
says, Zavala “denied” that the plan to funnel money to Briones was ever discussed in front of
Madrid. Madrid also cites the evidence that he told Briones during a secretly recorded
conversation that he was “of the impression . . . that [Zavala] was crunching numbers.”
22
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No. 13-50414
between conspirators may be silent and need not be formal or spoken.”). “A
conspiracy may be proven with only circumstantial evidence or ‘inferred from
a concert of action.’” Shoemaker, 746 F.3d at 623 (quoting United States v.
Virgen–Moreno, 265 F.3d 276, 284–85 (5th Cir. 2001)).
Despite Madrid’s contentions to the contrary, the trial was not devoid of
evidence of an intentional, knowing agreement between him and Garcia to
bribe Briones. Rather, the jury was presented with strong circumstantial
evidence of Madrid’s concerted action with Garcia, Briones, and Zavala to
conclude that he knowingly agreed to bribe Briones in exchange for her support
of the LKG contract. Based on the evidence presented, the jury was entitled to
“infer the existence of a conspiracy from the presence, association, and
concerted action of the defendant with others.” United States v. Thomas, 690
F.3d 358, 366 (5th Cir. 2012) (internal quotation marks and citation omitted).
Garcia testified that he and Madrid met with Briones several times during
which she asked them for money and that it was “obvious” during those
meetings that if they provided it to her, she would support LKG’s contract. The
evidence further established that, following those meetings with Briones,
Madrid arranged the meeting between Zavala, himself, and Garcia—a meeting
which the jury may rationally infer was a necessary first step to provide
payment to Briones under the scheme. As a result of Madrid’s arrangements,
Zavala contracted with Garcia to perform data analysis for LKG, but never
actually performed any services for LKG. Instead, she provided $2,000 a
month to Briones from her $3,000 monthly checks from LKG. The jury
rationally credited Garcia and Zavala’s testimony—which was also
corroborated by, among other things, the phone logs introduced at trial—to
conclude that Madrid knowingly agreed with Garcia, Zavala, and Briones to
provide Briones money, totaling $24,000, in exchange for her support of the
23
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No. 13-50414
LKG contract. Madrid’s arguments that the evidence was insufficient to
establish a conspiracy to bribe Briones are without merit.
ii. Obtaining Federal Funds by False Pretenses
Madrid next contends that the government’s evidence was insufficient
for the jury to find that he was guilty of a conspiracy to obtain money and
property from the United States by false pretenses, in violation of 18 U.S.C
§ 666(a)(1)(A). Madrid argues that he had “nothing to do” with LKG’s invoices
or with the initial RFP application and, again, that there was no proof of an
express agreement to make false representations on LKG’s invoices. Madrid
additionally contends that the indictment failed to allege and the evidence
adduced at trial failed to establish that he is a government agent, which he
contends is required for a conviction under § 666(a)(1)(A).
Madrid’s contention that there is no direct evidence that he agreed with
Garcia, Soria, and Briones to submit false invoices to the County disregards
the ample circumstantial evidence from which a rational juror could infer that
he knowingly agreed to make false representations in order to continue
receiving substantial funds under the contract with the County. The
government introduced evidence from which the jury could rationally conclude
that LKG failed to perform on all aspects of their contractual obligations, yet
submitted fraudulent monthly invoices to receive $50,000 per month for the
work that they claimed was completed. The evidence established that LKG’s
work in general and Madrid’s work in particular was inadequate and did not
meet SAMHSA’s requirements, and that LKG’s invoices and Madrid’s work
logs were wholly unsubstantiated. From this and other evidence introduced at
trial, the jury may rationally infer that Garcia, Soria, Madrid, and Briones
agreed that LKG would submit invoices reflecting that they completed their
work regardless of whether they actually performed on the contract in order to
24
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No. 13-50414
collect $50,000 monthly. The false representations on their invoices allowed
Soria to procure $120,000 in total from his contract with LKG, $92,600 of which
was then provided to Madrid. The agreement likewise allowed Garcia and
Madrid to funnel $24,000 to Briones through LKG’s contract with Zavala. In
total, the government’s evidence demonstrated that LKG, with Madrid’s help,
obtained $550,000 from the County despite its failure to perform under the
contract.
Furthermore, “[a] conspiracy may exist even if a conspirator does not
agree to commit or facilitate each and every part of the substantive
offense. . . . If conspirators have a plan which calls for some conspirators to
perpetrate the crime and others to provide support, the supporters are as guilty
as the perpetrators.” United States v. Nieto, 721 F.3d 357, 368 (5th Cir. 2013)
(quoting Salinas v. United States, 522 U.S. 52, 63-63 (1997)). Accordingly,
Madrid’s argument that he was not directly involved in, for example, Garcia’s
submission of LKG’s invoices does not render the evidence insufficient for the
jury to conclude that he was a knowing member of the conspiracy to obtain
federal funds by false pretenses.
Next, Madrid argues that he is not a “government agent” and thus a
conviction for conspiracy to violate § 666(a)(1)(A) cannot be maintained against
him. Under the plain text of the statute, to be held criminally liable under 18
U.S.C. § 666(a)(1)(A), the defendant generally must be an “agent of an
organization, or of a State, local, or Indian tribal government, or any agency
thereof.” § 666(a)(1); see also United States v. Phillips, 219 F.3d 404, 411 (5th
Cir. 2000) (“Under § 666(a)(1) and (b), the defendant must be ‘an agent of an
organization, government or agency’ that receives in excess of $10,000 in a one-
year period.”). “Section 666 broadly defines ‘agent’ as ‘a person authorized to
act on behalf of another person or a government and, in the case of an
25
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No. 13-50414
organization or government, includes a servant or employee, and a partner,
director, officer, manager, and representative.’” United States v. Whitfield, 590
F.3d 325, 344 (5th Cir. 2009) (quoting 18 U.S.C. § 666(d)(1)). We have “held
that for an individual to be an ‘agent’ for the purposes of section 666, he must
be ‘authorized to act on behalf of [the organization] with respect to its funds.’”
Whitfield, 590 F.3d at 344 (quoting Phillips, 219 F.3d at 411).
Madrid is therefore incorrect to state that he must have “government
agent status” to be liable under § 666(a)(1)(A). Rather, he can be liable under
§ 666 if he is an agent of, inter alia, an “organization” that in any one-year
period receives “in excess of $10,000 under a Federal . . . grant.” § 666(a)(1),
(b). See also United States v. Brown, 727 F.3d 329, 334 (5th Cir. 2013) (“In
short, . . . there must be an individual who acts as an agent of an organization,
the individual must have unlawfully obtained funds from this organization,
and the organization must receive over $10,000 in federal funds in any one
year period.”). Madrid does not dispute that he was a member of the
Collaborative’s governance team and that the Collaborative received “in excess
of $10,000 a year under a Federal program involving a grant,” § 666(b). The
governance team functioned as a board of directors and collectively made
decisions regarding the allocation of the federal funds. As a member of the
governance team, Madrid was authorized to participate in the decision-making
process with respect to the expenditure of the Collaborative’s funds. We
therefore conclude that Madrid was an “agent” for purposes of § 666. Accord
Shoemaker, 746 F.3d at 621 (holding that the defendant who was “authorized
to act on behalf of [a hospital that received in excess of $10,000 a year from a
federal grant] with respect to its funds” was an agent for purposes of § 666).
26
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iii. Conspiracy to Defraud the United States
“By its terms, § 371 provides that the unlawful objective of the conspiracy
may be ‘to commit any offense against the United States,’ i.e. to commit a
federal crime, or ‘to defraud the United States.’” United States v. Mann, 161
F.3d 840, 847 (5th Cir. 1998) (emphasis added). Madrid argues that here the
“defraud” clause of § 371 applies and that, in such cases, the “government must
prove that the United States was the ultimate target of the conspiracy.” United
States v. Mendez, 528 F.3d 811, 815 (11th Cir. 2008). Madrid argues that the
indictment failed to allege, and that the evidence was insufficient to prove, that
the United States was a target of the conspiracy to defraud under 18 U.S.C. §
371 and thus we must vacate Count 1.
Madrid’s contention is factually imprecise. Count 1 does not only allege
a violation of § 371 under the “defraud clause.” Rather, the superseding
indictment alleges both that Madrid conspired to “defraud the United States
and any of its agencies” and that he conspired to violate laws of the United
States—namely, §§ 666(a)(1)(A), (a)(2). Accordingly, the jury was properly
instructed to find Madrid guilty of Count 1 if it found that the government
proved beyond a reasonable doubt any one of its three theories alleged under
Count 1—either that Madrid conspired to defraud the United States, that he
conspired to bribe an agent of a federally funded program in violation of
§ 666(a)(2), or that he conspired to obtain property from a federally funded
program by fraud in violation of § 666(a)(1)(A). In announcing its verdict, the
jury expressly found Madrid guilty of all three alternative theories of
convictions. For the reasons already discussed, the evidence was sufficient to
support the jury’s verdict that Madrid conspired to violate § 666(a)(1)(A) and
§ 666(a)(2). We therefore need not address Madrid’s argument that the
evidence was insufficient to demonstrate that he defrauded an agency of the
27
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United States to conclude that the evidence was sufficient to convict him under
Count 1. 20
b. Count 2
Madrid challenges the sufficiency of the evidence to support Count 2, the
substantive bribery charge under 18 U.S.C. § 666(a)(2). Madrid again argues
that there is no evidence tying him to Zavala’s payments to Briones, citing the
fact that it was Garcia who wrote and delivered the checks to Zavala and the
absence of any direct evidence that Madrid knew about the payments to
Briones. Madrid contends that the evidence proved only that Madrid
suggested Zavala be involved as a potential “numbers cruncher,” relying on the
recorded conversation with Briones that he introduced into evidence.
As we concluded within our discussion of the sufficiency of the evidence
as to Count 1, viewing the evidence in the light most favorable to the verdict,
we conclude that it was reasonable for the jury to find that Madrid agreed with
Garcia to give something of value to Briones with the intent of rewarding a
local government agent. Although Madrid introduced evidence that he
believed Zavala was simply a “numbers cruncher,” the jury may have
rationally credited the government’s evidence of the bribery scheme over
Madrid’s recorded statement. The jury may have rationally inferred, for
example, that when the recorded conversation occurred, Madrid already
suspected he was under investigation by the FBI and therefore decided not to
20 We nonetheless note that Madrid’s argument that the evidence did not demonstrate
that the United States or one of its agencies was a target of the conspiracy to defraud is belied
by the record. Assuming without deciding that our precedent, like the Eleventh Circuit,
requires that a conviction under the “defraud clause” requires proof that the “United States
was the ultimate target of the conspiracy,” Mendez, 528 F.3d at 815, the government here
introduced ample evidence from which the jury could reasonably infer that Madrid was a
participant in a conspiracy that intended to defraud a United States agency—SAMHSA. The
evidence demonstrated that Madrid falsely represented that he and LKG completed the work
necessary to continue receiving funding from the SAMHSA grant to procure federal funds by
false pretenses.
28
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No. 13-50414
make any incriminating statements that could have been overheard or
reported to the government. Indeed, the meeting with Briones and Madrid was
initiated because Briones notified him that Zavala had been contacted by the
FBI. The jury therefore reasonably may have chosen not to give substantial
weight to the statements Madrid made to Briones at a time when Madrid knew
that at least one person involved in the bribery scheme was being contacted by
the federal government. In sum, we hold that the evidence was sufficient to
sustain the conviction for Count 2.
c. Count 3
Count 3 charges Madrid with conspiracy to commit mail fraud, alleging
that he used the USPS in furtherance of the conspiracy to knowingly defraud
the County of money and property as well as the intangible right to honest
services of a public servant, in violation of 18 U.S.C. §§ 1341, 1346, 1349. 21 “To
prove mail fraud under 18 U.S.C. § 1341, the government must show: (1) a
scheme to defraud; (2) the use of the mails to execute the scheme; and (3) the
specific intent to defraud.” United States v. Traxler, 764 F.3d 486, 488 (5th
Cir. 2014). As we have explained, to uphold a conviction for mail fraud “[i]t is
sufficient that the defendant . . . ‘act with knowledge that the use of the mails
will follow in the ordinary course of business, or where such use can reasonably
be foreseen, even though not actually intended.’” Id. To prove Madrid
conspired to commit mail fraud pursuant to § 1349, the government must show
“(1) two or more persons made an agreement to commit an unlawful act; (2) the
21 Section 1346 provides that “the term ‘scheme or artifice to defraud’ includes a
scheme or artifice to deprive another of the intangible right of honest services.” 18 U.S.C.
§ 1346. Madrid was charged under this section based on his participation in the conspiracy
to bribe Briones, thereby depriving the citizens of El Paso of her honest services. Because we
have already rejected Madrid’s argument that the evidence was insufficient to convict him of
a conspiracy to bribe Briones, we need only address the sufficiency of the evidence to convict
Madrid for conspiring to commit mail fraud under §§ 1341, 1349.
29
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defendant knew the unlawful purpose of the agreement; and (3) the defendant
joined in the agreement willfully, with the intent to further the unlawful
purpose.” United States v. Simpson, 741 F.3d 539, 547 (5th Cir. 2014).
Madrid contends that the evidence was insufficient as to Count 3 based
on the challenges he raised with regard to Counts 1 and 2, which we have
already rejected and need not revisit. He additionally contends that the use of
the mail was not foreseeable because everything sent via USPS was within the
County and, presumably, could have been hand-delivered. Madrid also argues
that the mailings which were sent and received from outside the County were
not in furtherance of the scheme to defraud.
We conclude that the evidence was sufficient to support the jury’s finding
that the use of the mail was a reasonably foreseeable incident of the scheme to
bribe Briones and to defraud the United States by procuring federal program
funds by false pretenses. Specifically, the evidence demonstrated that all but
one of the checks provided to Zavala were mailed via USPS and that Briones
used USPS to uphold her end of the agreement by, for example, supporting
LKG’s maintenance and renewal of the evaluation team contract through
mailed correspondence with SAMHSA personnel. Likewise, for the reasons
explained supra, the evidence was sufficient for the jury to reasonably infer
that Madrid knowingly conspired to fraudulently obtain funds from a federally-
funded contract—a scheme that in the ordinary course of business would
foreseeably require use of the mail to execute the plan, regardless of whether
the local participants were located within the same county. 22
22 Madrid’s conclusory statement that none of the mailings that traveled beyond El
Paso County were in furtherance of the scheme to defraud is belied by the record. For
example, Garcia testified that he and Madrid provided Briones materials to help her prepare
a responsive letter to SAMHSA after their negative feedback following a site visit. Briones’s
letter was mailed via USPS. Garcia testified that Briones’s letter purposefully painted LKG
in a positive light in order to defend LKG and support the renewal of its contract—just as
Briones agreed to do in exchange for the $2,000 monthly payments from Garcia and Madrid.
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2. Additional Issues Regarding Count 2
a. Statute of Limitations
Madrid next contends that the district court erred in denying his motion
to dismiss Count 2 as time-barred. We review a district court’s legal
conclusions regarding the statute of limitations de novo. See United States v.
Irby, 703 F.3d 280, 282-83 (5th Cir. 2012).
Madrid argues that he cannot be liable for criminal activity that was
completed before December 14, 2006—five years before the original indictment
was returned. The district court denied Madrid’s motion to dismiss but limited
the allegations in Count 2—the substantive bribery charge, alleging a violation
of 18 U.S.C. § 666(a)(2)—to conduct that fell within the five years immediately
preceding the return of the original indictment. Accordingly, the acts allegedly
taken in violation of Count 2 were limited to the December 21, 2006, payment
from Garcia to Zavala and the December 23, 2006, payment from Zavala to
Briones. Madrid’s argument that he cannot be liable for these acts because
Garcia wrote and transmitted the checks to Zavala, is unavailing.
“Well settled is the principle that a party to a continuing conspiracy may
be responsible for a substantive offense committed by a coconspirator in
furtherance of the conspiracy, even though that party does not participate in
the substantive offense[.]” United States v. Michel, 588 F.2d 986, 999 (5th Cir.
1979) (citing Pinkerton v. United States, 328 U.S. 640, 647 (1946)). The jury
found Madrid guilty of conspiring with Garcia and others to bribe Briones
under Count 1. Garcia’s foreseeable act in furtherance of that conspiracy
which took place during the covered period—hand delivering Zavala a check in
Accordingly, Briones’s letter was a reasonably foreseeable consequence of the bribery and the
scheme to defraud the United States because it was mailed for the very purpose of
perpetuating the illusion that LKG was satisfactorily completing its duties under the
federally funded contract.
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order to funnel funds to Briones—renders Madrid liable for the substantive
criminal charge under § 666(a)(2) even if he did not himself participate in the
physical act of delivering Zavala the check. See, e.g., United States v. Tilton,
610 F.2d 302, 309 (5th Cir. 1980) (reasoning that the defendant “can be held
responsible for the substantive offenses committed by the co-conspirators if
acts were committed in furtherance of a conspiracy even though [the
defendant] neither participated in the act . . . nor actually knew about it.”). We
therefore conclude that the district court did not err in denying Madrid’s
motion to dismiss Count 2 as time-barred.
b. Pinkerton Jury Instruction
Madrid also challenges the district court’s jury charge regarding Count
2, contending that the judge failed to adequately inform the jury that, under
Pinkerton, he may only be convicted of crimes completed by his coconspirators
where those acts were “in furtherance and as a foreseeable consequence of that
conspiracy.” See Pattern Jury Instructions: Fifth Circuit, Criminal Cases,
§2.22 (2012) (emphasis added).
Madrid and the government dispute whether he preserved this issue for
review and, thus, debate whether our review should be for an abuse of
discretion or for plain error. Because we conclude that Madrid has not
demonstrated reversible error under either standard of review, we will assume
arguendo that Madrid adequately preserved the error and analyze the issue
under an abuse of discretion standard. See, e.g., United States v. Richardson,
676 F.3d 491, 506 (5th Cir. 2012).
Assuming arguendo that the district court’s Pinkerton instruction here
amounted to an abuse of discretion, any error in the jury charge was harmless
and, therefore, does not require that we vacate Madrid’s conviction on Count
2. See generally United States v. Nguyen, 493 F.3d 613, 622 (5th Cir. 2007)
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(“An error in a jury instruction is subject to harmless error review.”) (internal
quotation marks and citation omitted). As noted above, because of the five-
year statute of limitations, the district court limited the acts charged under
Count 2 to the payment from Garcia to Zavala on December 21, 2006, and the
payment from Zavala to Briones on December 23, 2006. With a proper
Pinkerton charge, the jury would have been instructed to convict Madrid of
Count 2, the substantive count charging Madrid with the bribery of Briones,
only if it found beyond a reasonable doubt that these two monetary
transactions were acts committed by Madrid’s coconspirators in furtherance of
the conspiracy. The evidence overwhelmingly established that Garcia’s
purpose in hand-delivering Zavala the $3,000 check on December 21, 2006, and
Zavala’s delivery of $2,000 to Briones on December 23, 2006, was to funnel
money to Briones to further the conspiracy to pay Briones in exchange for her
support in the maintenance and renewal of the LKG contract. Accordingly,
assuming error in the district court’s jury charge, based on our review of the
record, “we are convinced that the error could not have affected the outcome of
the case,” United States v. Montgomery, 747 F.3d 303, 309 (5th Cir. 2014), and,
therefore, any error in the Pinkerton charge is harmless.
3. Wyatt’s Testimony
Michael Wyatt, an Assistant El Paso County Attorney who was the lead
litigator in a civil lawsuit against Garcia and LKG for the very conduct
involved in this suit, testified for the government regarding, among other
things, what he uncovered about Madrid’s educational background during his
investigation of the conspiracy. On appeal, Madrid contends that (1) allowing
Wyatt’s testimony with regard to Madrid’s Ph.D. was improper under the
Federal Rules of Evidence, and (2) the district court violated Madrid’s Sixth
Amendment right to confront witnesses against him and abused its discretion
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when it limited counsel’s ability to cross-examine Wyatt as to his potential
bias.
a. Wyatt’s Testimony Regarding Madrid’s Ph.D.
Wyatt testified that Madrid obtained a Ph.D., “but it was actually a
degree from a degree mill.” Madrid’s counsel contemporaneously objected,
contending that there was no predicate laid for the testimony and that it was
merely Wyatt’s opinion. The district court sustained counsel’s objection, but
Wyatt continued to testify that he conducted research into the online
university where Madrid received his Ph.D., and that it is considered to be a
degree mill. The district court overruled Madrid’s further objections. Wyatt
continued, “[the university] was investigated. A number of articles were
written about it, that the individual who founded it wound up going to prison
for tax evasion, and it was basically just a guy operating out of a store front.”
Madrid contends that the admission of this evidence violated the Federal Rules
of Evidence and requires that we vacate his conviction.
“A district court’s admission of evidence, if objected to, is reviewed for
abuse of discretion.” United States v. Nelson, 732 F.3d 504, 516-17 (5th Cir.
2013). 23 Even when the district court abuses its discretion by admitting
inadmissible evidence, however, we must “view the error in relation to the
entire trial[,] . . . determine whether the inadmissible evidence contributed to
the jury’s verdict and reversal is warranted only if the evidence had a
23Here, Madrid objected at trial to Wyatt’s testimony as “hearsay” and argued that it
“lacked a foundation.” Despite the Government’s arguments to the contrary, we conclude
that this objection was sufficiently specific to properly preserve the issue. See generally
United States v. Neal, 578 F.3d 270, 272 (5th Cir. 2009) (“To preserve error, an objection must
be sufficiently specific to alert the district court to the nature of the alleged error and to
provide an opportunity for correction.” (citing United States v. Ocana, 204 F.3d 585, 589 (5th
Cir. 2000)). We will therefore conduct our review under the abuse of discretion standard. See
Nelson, 732 F.3d at 516-17.
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substantial impact on the verdict.” United States v. Wells, 262 F.3d 455, 463
(5th Cir. 2001) (citations omitted).
Generally, a witness may not testify to a matter unless the witness has
personal knowledge of it. Fed. R. Evid. 602. Here, Wyatt expressly conceded
that his testimony was not based on personal knowledge but, rather, was based
on information he learned by reading unspecified articles. Assuming without
deciding that the admission of this testimony amounts to an abuse of
discretion, we find no reversible error. The quality of Madrid’s Ph.D. was not
a substantial piece of evidence in the government’s case and had little
probative value as to the critical issues. Considering the record in its totality—
which included testimony of a coconspirator and ample circumstantial
evidence—we conclude that Wyatt’s testimony about Madrid’s Ph.D. did not
have a substantial impact on the verdict and, therefore, any error in the
admission of Wyatt’s testimony about Madrid’s Ph.D. was harmless. Accord
United States v. Gadison, 8 F.3d 186, 192 (5th Cir. 1993) (finding harmless
error where the improper admission of the defendant’s prior conviction “added
little to the government’s case” as compared with “the detailed testimony of the
two co-conspirators[] [and the] significant amount of strong circumstantial
evidence”).
b. Limiting Cross-Examination of Wyatt
During defense counsel’s cross-examination of Wyatt, Madrid’s counsel
elicited testimony that Wyatt was working on the civil suit against Garcia and
LKG. Thereafter, Madrid’s counsel questioned Wyatt about his assistance
with the criminal prosecution. The government objected to defense counsel’s
question as to whether Wyatt sat at the government’s counsel table during
Garcia’s guilty plea proceeding and the district court sustained the objection.
The court also sustained objections to defense counsel’s questions as to whether
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Wyatt supplied the FBI with information for the criminal investigation or
prosecution. Madrid’s counsel argued that this line of cross-examination goes
towards the credibility of the witness and contended that he is allowed to
impeach a witness with respect to bias. Madrid argued that if he were
permitted to present it, he had an email from Wyatt to the FBI, referring to
the FBI agents by first name saying, “Hey here are some materials. . . . Please
have Eddie look to see if he’s interested.” Counsel argued that this evidence
would allow the defense to argue that the prosecution was “borne by the county
attorney’s office.”
Madrid contends on appeal that the district court’s ruling that precluded
Madrid from fully cross-examining Wyatt as to his bias and interest in the
prosecution was an abuse of discretion and violated Madrid’s Sixth
Amendment rights under the confrontation clause. “A defendant’s right to
cross-examine witnesses against him is a constitutional right secured by the
Confrontation Clause of the Sixth Amendment.” United States v. Davis, 393
F.3d 540, 548 (5th Cir. 2004). “Alleged violations of the Confrontation Clause
are reviewed de novo, but are subject to a harmless error analysis.” United
States v. Bell, 367 F.3d 452, 465 (5th Cir. 2004). “The Confrontation Clause is
satisfied where defense counsel has been allowed to expose the jury to facts
from which the jury ‘could appropriately draw inferences relating to the
reliability of the witness.’” United States v. Heard, 709 F.3d 413, 432 (5th Cir.
2013), cert. denied, 134 S. Ct. 470. If we conclude that “there is no Sixth
Amendment violation, [we] [next] address[] whether the district court abused
its discretion by limiting cross-examination.” United States v. Jimenez, 464
F.3d 555, 558-59 (5th Cir. 2006). “We will not find an abuse of discretion
‘absent a showing that the limitations were clearly prejudicial.’” United States
v. Bernegger, 661 F.3d 232, 237 (5th Cir. 2011) (quoting United States v. Diaz,
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637 F.3d 592, 597 (5th Cir. 2011)). “Prejudice is shown only if ‘a reasonable
jury might have had a significantly different impression of the witness’s
credibility if defense counsel had been allowed to pursue the questioning.’” Id.
(quoting United States v. Davis, 393 F.3d 540, 548 (5th Cir. 2004)).
Assuming arguendo that the district court violated Madrid’s
Confrontation Clause rights by limiting his ability to cross-examine Wyatt
regarding his involvement and interest in the prosecution, we conclude that
any error was harmless beyond a reasonable doubt.
[A]ny violation of the confrontation right is subject to harmless
error review by analyzing the following factors: “the importance of
the witness’ testimony in the prosecution’s case, whether the
testimony was cumulative, the presence or absence of evidence
corroborating or contradicting the testimony of the witness on
material points, the extent of cross-examination otherwise
permitted, and, of course, the overall strength of the prosecution’s
case.”
United States v. Skelton, 514 F.3d 433, 440 (5th Cir. 2008) (quoting Delaware
v. Van Arsdall, 475 U.S. 673, 684 (1986)). Balancing these factors, particularly
the substantial weight of the evidence adduced against Madrid, outlined above,
and the fact that Madrid was permitted to cross-examine Wyatt as to his
involvement in the related civil litigation, 24 we conclude that any
Confrontation Clause error was harmless beyond a reasonable doubt. See, e.g.,
Skelton, 514 F.3d at 443 (reasoning that, even if there was a Confrontation
Clause violation, it would be harmless beyond a reasonable doubt because
defense counsel was permitted to “explore the issue of bias” on cross-
examination and the witness’s testimony, although key to the prosecution’s
24 During cross-examination, Madrid elicited the fact that Wyatt was the lead attorney
representing the County in the civil suit against Garcia and LKG and that the litigation was
filed five years ago but is still pending, in part because of the ongoing criminal prosecutions.
Additionally, in an effort to diminish Wyatt’s reliability, Madrid’s counsel elicited testimony
that some of the allegations in the civil indictment were inexplicably false. Accordingly, the
jury was aware of some facts from which they could reasonably infer Wyatt’s bias.
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case, was corroborated by two others); United States v. Pryor, 483 F.3d 309,
312-13 (5th Cir. 2007) (finding that, even if there were a Confrontation Clause
error, it would be harmless beyond a reasonable doubt where “[t]he
government’s evidence against [the defendant] was substantial”). We likewise
assume arguendo that the district court’s limitation on Madrid’s ability to
cross-examine Wyatt amounts to an abuse of discretion, but, for the reasons
discussed directly above, we cannot find that, had Madrid’s counsel been able
to pursue his line of cross-examination, the jury would have had a
“significantly different impression of the witness’s credibility,” and, therefore,
we conclude that any abuse of discretion was not prejudicial and does not
warrant reversal. Bernegger, 661 F.3d at 239.
4. Evidence Regarding the Judge Cobos Bribe
At trial, the government presented evidence that Garcia met with judge-
elect Anthony Cobos several times about the renewal of LKG’s contract with
the County; that Cobos solicited money in exchange for his support of the LKG
contract; and that Garcia and Madrid (and others) met with Cobos and
provided him envelopes that contained cash. Madrid contends that the
evidence regarding the bribe to Judge Cobos was improperly admitted under
Federal Rule of Evidence 404(b) and irrelevant under Rule 403 because Madrid
was “not on trial for any bribe of Anthony Cobos, and such a bribe is not
mentioned at all in the superseding indictment.” The government contends
that this evidence was “intrinsic” to the criminal charges here in that it was
“inextricably intertwined with the conspiracy,” and thus is admissible and
relevant. Alternatively, the government argues that, even if “extrinsic,” the
evidence was nonetheless admissible under Rule 404(b).
Rule 404(b) “generally prohibits the introduction of evidence of extrinsic
acts that might adversely reflect on the [defendant’s] character.” Huddleston
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v. United States, 485 U.S. 681, 685 (1988). However, evidence of other “crimes,
wrongs, or other acts,” can be admitted, not to prove character, but to prove
“motive, opportunity, intent, preparation, plan, knowledge, identity, absence
of mistake, or lack of accident,” Fed. R. Evid. 404(b). “The proper test to apply
in deciding the admissibility of ‘similar acts’ or ‘other acts’ evidence depends
upon whether the evidence in question is ‘intrinsic’ or ‘extrinsic’ evidence.”
United States v. Williams, 900 F.2d 823, 825 (5th Cir. 1990). Evidence is
“intrinsic” when the evidence of the other act and the evidence of the crime
charged are “inextricably intertwined,” if both acts are part of a “single
criminal episode,” or if the other acts were “necessary preliminaries” to the
crime charged. Id.; see also Turner, 674 F.3d at 431. “Intrinsic evidence is
admissible to ‘complete the story of the crime by proving the immediate context
of events in time and place,’ and to ‘evaluate all of the circumstances under
which the defendant acted[,]’” and thus does not implicate Fed. R. Evid. 404(b).
United States v. Carrillo, 660 F.3d 914, 927 (5th Cir. 2011) (citations omitted).
Comparatively, if the evidence is with regard to a “distinct and distinguishable
event,” then it is not intrinsic and we must then determine whether it was
nonetheless properly admitted under Rule 404(b). See, e.g., United States v.
Nguyen, 504 F.3d 561, 574 (5th Cir. 2007).
Here, we conclude that the evidence of Judge Cobos’s bribe was intrinsic
because it was “inextricably intertwined” with the conspiracy to defraud the
United States in that it “complete[d] the story of the crime by proving the
immediate context of events in time and place,” allowing the jury to assess “all
of the circumstances under which [Madrid and Garcia] acted.” Carrillo, 660
F.3d at 927. The government presented evidence that the bribe to Cobos was
undertaken for the very purpose of continuing one of the conspiratorial
objectives—fraudulently maintaining the LKG contract to obtain federal funds
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by false pretenses. The evidence at issue demonstrated that Madrid and
Garcia conspired to attempt to continue the conspiracy to unlawfully procure
federal funds under the SAMHSA grant by bribing Judge Cobos for his support
of the contract’s renewal. This evidence therefore further established for the
jury the “conspiratorial relationship” between Garcia and Madrid and, as
noted, provided relevant contextual evidence regarding the nature and extent
of the conspiracy. See United States v. Watkins, 591 F.3d 780, 784 (5th Cir.
2009); United States v. Powers, 168 F.3d 741, 749 (5th Cir. 1999) (holding that
where “non-plead . . . actions tend to show the conspiratorial relationship
between [the coconspirators], during the life of the conspiracy, . . . such ‘other
acts’ are intrinsic to the Government’s proof and not subject to Rule 404(b)”).
The district court therefore did not abuse its discretion in admitting this
intrinsic evidence.
5. Cumulative Error
In his last challenge to his conviction, Madrid contends that the
cumulative error doctrine requires reversal of his conviction because the
combination of the errors in his trial denied him his constitutional right to a
fair trial. See generally United States v. Delgado, 672 F.3d 320, 343-44 (5th
Cir. 2012) (en banc).
“‘Cumulative error’ justifies reversal only when errors ‘so fatally infect
the trial that they violated the trial’s fundamental fairness.’” Delgado, 672
F.3d at 344 (quoting United States v. Fields, 483 F.3d 313, 362 (5th Cir. 2007)
(footnote omitted)). “We have repeatedly emphasized that the cumulative
error doctrine necessitates reversal only in rare instances and have previously
stated en banc that ‘the possibility of cumulative error is often acknowledged
but practically never found persuasive.’” Id. (quoting Derden v. McNeel, 978
F.2d 1453, 1456 (5th Cir. 1992) (en banc) (footnote omitted)). Here, although
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we assumed arguendo that the district court erred with regard to the Pinkerton
instruction, the admission of Wyatt’s testimony regarding Madrid’s Ph.D., and
the limitation of defense counsel’s cross-examination of Wyatt, these errors are
not so pervasive that this court should conclude that the defendant received an
unfair trial. See, e.g., United States v. Munoz, 150 F.3d 401, 418 (5th Cir. 1998).
C. Sentencing
Madrid was sentenced to 180 months’ imprisonment and ordered to pay
$514,000 of restitution, jointly and severally with LKG and Garcia.
Additionally, Madrid was ordered to pay a fine of $100,000, an assessment of
$300, and, after a hearing, the court ordered forfeiture of the proceeds of the
offenses in the amount of $550,000. Madrid was also sentenced to a term of
three years’ supervised release as to each count. On appeal, Madrid contends
that the district court made various improper enhancements under the United
States Sentencing Guidelines (U.S.S.G.), that his sentence was substantively
unreasonable, and that the restitution and forfeiture orders were based on
clearly erroneous findings of fact.
1. Enhancements under United States Sentencing Guidelines
We review the district court’s findings of fact for clear error and its legal
interpretation or application of the U.S.S.G. de novo. See United States v.
Claiborne, 676 F.3d 434, 437 (5th Cir. 2012).
a. Loss over $400,000 Enhancement
The district court imposed a 14-level enhancement pursuant to U.S.S.G.
§ 2B1.1(b)(1)(H), for an intended loss in excess of $400,000. The district court
acknowledged that the fraudulent scheme involved $1,100,000—LKG’s
$550,000 contract fee plus the $550,000 of in-kind services LKG falsely
represented it contributed—but limited its calculation to actual pecuniary loss,
which it found was $550,000. Madrid argues on appeal that (1) to calculate
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loss, the court must make a finding as to the defendant’s subjective intent, and
the district court failed to do so here, and (2) the court erred in concluding that
the actual loss was $550,000 because there is evidence in the record that LKG
in fact provided some valuable services in return for the $550,000 contract fee.
“The application notes to § 2B1.1 state that for the purpose of this
calculation, ‘loss is the greater of actual loss or intended loss.’” Nelson, 732
F.3d at 520 (emphasis added). Here, the district court calculated loss under
§ 2B1.1 based on a determination of actual pecuniary loss to the County, and
thus did not need to consider Madrid’s subjective intent, which Madrid
contends was the lesser of the two measurements. Accord United States v.
Schaffer, 439 F. App’x 344, 346 (5th Cir. 2011) (unpublished) (explaining that
it is “immaterial whether the intended loss was less than the actual loss
because, in general, ‘loss is the greater of actual loss or intended loss’” (quoting
U.S.S.G. § 2B1.1)). Because the district court did not base the loss calculation
on intent, but rather on actual pecuniary harm, Madrid’s subjective intent is
irrelevant.
Next, with regard to the district court’s finding of fact that the actual
loss to the County was the entire $550,000 the County paid to LKG under its
contract fee, we conclude that this finding is not clearly erroneous and
therefore must be upheld. The district court rejected defense counsel’s
arguments that LKG provided some work under the contract and, therefore,
the actual pecuniary loss was not the full $550,000 provided to LKG, but,
rather, that amount minus the value of their work. The district court stated
on the record that it “spent a lot of time” reviewing its notes and the transcript
and “could not find anything of benefit the county received” from LKG’s
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contract. The district court also adopted the findings of fact contained in the
PSR, 25 which concluded, among other things, that
investigating agents in this case discovered no evidence of services
having been performed by LKG Enterprises for the county of El
Paso, Texas, per LKG’s contract. In addition, in a Victim Impact
Statement submitted by El Paso County Judge Veronica Escobar
on behalf of El Paso County, she indicated that El Paso County
received no benefits from LKG.
These findings are consistent with the evidence adduced at trial. 26
Although there is some evidence in the record that arguably suggests
LKG performed in part under the contract, that evidence does not make the
district court’s factual finding that the County received no valuable benefit
from the LKG contract clearly erroneous. For example, LKG’s evaluation
reports indicated that it collected data on over 100 children after its IRB was
obtained. However, the evidence established that the data which LKG
reportedly collected had not been entered into the national database and was
not accessible to the Collaborative after LKG’s contract was terminated.
Likewise, Madrid points to the evidence demonstrating that he worked to help
prepare a 1,000-page sustainability report for LKG. However, the evidence
also established that Madrid’s sustainability report was largely plagiarized
and duplicative of information already available to the Collaborative, and that
it did not meet the requirements of the SAMHSA grant. Moreover, Madrid
does not assign a value to the work purportedly completed under the contract
nor point us to any record evidence suggesting there was an actual pecuniary
25The district court properly adopted the PSR’s findings of fact, as Madrid did not
“present rebuttal evidence or otherwise demonstrate that the information is materially
unreliable.” United States v. Jackson, 596 F.3d 236, 243 (5th Cir. 2010).
26For example, Peter Selby testified that when he returned to his position as head of
the evaluation team, he discovered that LKG had failed to enter any data during its tenure.
Lisa Tomaka also testified that money was provided to LKG without any verification or
documentation that any work or services had been provided.
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value associated with this inadequate work completed under the contract.
Accordingly, the district court’s finding that $550,000 was the amount of the
actual pecuniary loss is not clearly erroneous because it is plausible in light of
the record as a whole. See generally United States v. Lambright, 320 F.3d 517,
518-19 (5th Cir. 2003). We therefore conclude that the district court did not
err in imposing the fourteen-level enhancement based on its finding that the
loss was in excess of $400,000.
b. “Organizer or Leader” Enhancement under § 3B1.1(a)
Section 3B1.1(a) provides for a four-level enhancement if “the defendant
was an organizer or a leader of a criminal activity that involved five or more
participants or was otherwise extensive.” The commentary to § 3B1.1 indicates
that a court may consider various factors in making this determination,
including “the exercise of decision making authority, the nature of
participation in the commission of the offense, the recruitment of
accomplices, . . . the degree of participation in planning or organizing the
offense, the nature and scope of the illegal activity, and the degree of control
and authority exercised over others.” U.S.S.G. § 3B1.1, cmt. n.4.
As noted supra, the government’s evidence established that it was
Madrid who arranged for the initial meeting between Garcia and Zavala and
that, at the meeting, Madrid did most of the talking regarding Zavala’s
contract with LKG. The phone log evidence also suggested that Madrid had
more frequent contact with Briones during the relevant time period than
Garcia. Further, Garcia answered affirmatively when asked whether Madrid
was “pulling the strings” and was the person who “put the team together” and
helped make critical decisions, despite Garcia’s title as the principal of LKG or
his status as the “front man.” The evidence therefore supports a conclusion
that Madrid “possessed some decisionmaking power, participated extensively
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in the crime, and exercised control and authority over his coconspirators.”
United States v. Lage, 183 F.3d 374, 384 (5th Cir. 1999). The district court’s
finding that Madrid recruited others for participation in the conspiracy and
that the enhancement was supported by the evidence is not clearly erroneous.
Therefore, the district court did not err by imposing the four-level
enhancement under § 3B1.1. Accord Brown, 727 F.3d at 340 (finding that
district court did not abuse its discretion in imposing an enhancement under
§ 3B1.1 where the defendants recruited others to join the conspiracy, even if
they did not “conceive[] of or principally orchestrate[] the scheme”).
c. “Position of Trust” Enhancement under § 3B1.3
Madrid challenges the two-level sentencing enhancement under § 3B1.3
based upon the district court’s finding that he abused a position of public trust.
Section 3B1.3 instructs that “[i]f the defendant abused a position of public or
private trust, or used a special skill, in a manner that significantly facilitated
the commission or concealment of the offense, increase by 2 levels.” To impose
an enhancement under this section, the district court must conduct a two-step
inquiry:
First, the court must determine whether the defendant occupied a
position of trust at all. If not, the inquiry ends and no
enhancement accrues. If, however, this initial query produces an
affirmative response, the court must proceed to ascertain the
extent to which the defendant used that position to facilitate or
conceal the offense.
United States v. Ollison, 555 F.3d 152, 165 (5th Cir. 2009). With regard to the
second prong, we have held that the person occupying the position of trust must
use that position to “significantly facilitate the commission or concealment of
the offense.” Id. (emphasis added); see also § 3B1.3 cmt. n.1 (explaining that
“the position of public . . . trust must have contributed in some significant way
to facilitating the commission or concealment of the offense”). In other words,
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where an individual occupies a position of trust which is essential or
“instrumental” to committing the offense, the enhancement applies. See
United States v. St. Junius, 739 F.3d 193, 209 (5th Cir. 2013).
First, the record supports a finding that Madrid occupied a position of
trust as the CEO of Aliviane and as a member of the Collaborative’s governance
team. See, e.g., United States v. Pruett, 681 F.3d 232, 249 (5th Cir. 2012)
(upholding enhancement under § 3B1.3 where defendant was the president
and CEO of a company charged with violating the Clean Water Act). Second,
as a result of Madrid’s positions, he had access to influential members of the
government and access to information regarding the inner workings of the
SAMHSA grant, without which it would have been “extraordinarily
difficult . . . to accomplish [the] criminal pursuits.” Id. The district court
therefore did not abuse its discretion by imposing this two-level enhancement.
d. “Sophisticated Means” Enhancement under § 2B1.1(b)(10)(C)
Madrid’s next argument with regard to the U.S.S.G. enhancements is
that the district court abused its discretion in imposing a two-level
enhancement for using “sophisticated means” pursuant to § 2B1.1(b)(10)(C).
The commentary to § 2B1.1 indicates that “‘sophisticated means’ means
especially complex or especially intricate offense conduct pertaining to the
execution or concealment of an offense.” U.S.S.G. § 2B1.1 cmt. n.9(B).
Here, the district court explained that the means were “clearly
sophisticated” because “there was a panoply of misrepresentations in this case
that [Madrid] directly and indirectly took part [in].” The district court stated
that, for example, the videos played for the jury regarding Madrid’s testimony
before the Commissioners Court reflects statements Madrid made to “cover[]
this up.” Additionally, the PSR, which the district court adopted, found that
the “criminal enterprise involved the complicated process of submitting
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proposals and bidding on a government contract, avoiding the risks associated
with bribing a public official by diverting funds through a third party, and
devising a plan to funnel payments to a . . . third party.”
Madrid contends that these findings are clearly erroneous because there
was no concealment of the funds used to funnel payments to Briones. Rather,
LKG contracted with Soria, and then Soria contracted with Madrid, and each
reported payments on tax forms submitted to the federal government.
However, the evidence adduced at trial established that, despite the facially
valid contracts between the parties, none of the coconspirators performed
under the contracts and each coconspirator submitted fraudulent invoices in
furtherance of the scheme to wrongfully procure federal program funds.
Likewise, as the district court noted, Madrid and Briones made fraudulent
statements in writing to SAMHSA and misrepresentations before the
Commissioners Court. Such complex methods support the district court’s
plausible finding of fact that the offense involved complex or intricate conduct.
See, e.g., United States v. Beacham, 774 F.3d 267, 277 (5th Cir. 2014)
(upholding a sophisticated means enhancement where the defendant was
convicted of wire fraud and bank fraud conspiracy based on, inter alia, the
“different levels of people engaged in the fraud, . . . [and] the use of false
[verification forms]”). We therefore conclude that the district court’s
imposition of the sophisticated means enhancement was not in error.
e. Multiple Bribes Enhancement under § 2C1.1(b)(1)
Madrid argues that the district court abused its discretion in imposing a
two-level enhancement under § 2C1.1(b)(1) based upon its finding that “the
offense involved more than one bribe or extortion” in light of the evidence
regarding the bribes to Briones and Cobos. “The ‘offense’ referred to in section
2C1.1(b)(1) includes ‘the offense of conviction and all relevant conduct under §
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1B1.3 (Relevant Conduct)’ . . . . Relevant conduct includes offenses that are
part of the same course of conduct or common scheme or plan as the offense of
conviction.” United States v. Roussel, 705 F.3d 184, 198 (5th Cir. 2013)
(citation and quotation marks omitted). Madrid contends that the evidence
regarding the bribery of Cobos is not “relevant conduct” and cannot form the
basis of the enhancement.
For the same reasons that we held that the evidence regarding Cobos
was intrinsic to the conspiracy to defraud a program receiving federal funds,
we conclude that the district court did not err by imposing the two-level
enhancement under § 2C1.1(b)(1). See United States v. Barraza, 655 F.3d 375,
385 (5th Cir. 2011) (holding that where “two briberies involved similar modus
operandi, a common purpose, and occurred in close temporal
proximity[,] . . . [the two] briberies were part of a common scheme or of the
same course of conduct [and therefore], the second uncharged bribe may be
used to increase the offense level for [the defendant’s bribery conviction”).
2. Substantive Reasonableness
Madrid argues that his 180-month prison term is substantively
unreasonable in light of: his age, and specifically, because he was 68 years old
at sentencing, the sentence amounts to life imprisonment; his lack of criminal
history; his service in the Army and to the community; and because the
sentence is disproportionately high in comparison to the other coconspirators’
sentences. Madrid raised these points at sentencing and the district court
considered his arguments. The district court noted the severity of the crime at
issue and that Madrid’s coconspirators’ sentences were less severe because
they cooperated with the government and pleaded guilty. The district court
then found that the U.S.S.G. recommended range of 235-240 months
imprisonment was “excessive,” and that sentence below the recommended
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range would suffice for deterrence purposes and the other sentencing goals of
18 U.S.C. § 3553(a). Madrid was then sentenced to 180-months in prison, 55
months less than the bottom of the recommended U.S.S.G. range.
“On appeal, the district court’s sentence is reviewed for reasonableness
under an abuse-of-discretion standard.” Peugh v. United States, 133 S. Ct.
2072, 2080 (2013). To demonstrate that the district court abused its discretion
in applying the § 3553(a) factors, Madrid must show “that the sentence does
not account for a factor that should receive significant weight, it gives
significant weight to an irrelevant or improper factor, or it represents a clear
error of judgment in balancing sentencing factors.” Heard, 709 F.3d at 424-25.
After consideration of the “totality of the circumstances, including the
extent of any variance from the Guidelines range[,]” United States v. Fraga,
704 F.3d 432, 439-40 (5th Cir. 2013) (internal citation and quotation marks
omitted), we conclude that Madrid has not demonstrated that the district
court’s below-Guidelines sentence constitutes an abuse of discretion. First,
with regard to Madrid’s argument that his sentence is unreasonable because
it is disproportionately high as compared to Garcia’s and Briones’s sentences,
we conclude that this contention is without merit. Madrid rightly notes that
his sentence is substantially longer than Garcia’s 48-month sentence and
Briones’s 30-month sentence. Pursuant to § 3553(a)(6), district courts shall
consider “the need to avoid unwarranted sentence disparities among
defendants with similar records who have been found guilty of similar
conduct.” Here, the district court expressly considered this sentencing factor
and found that there was a warranted, reasoned basis for the differences in
sentences among the coconspirators: Briones and Garcia cooperated with the
investigation and pleaded guilty to the charges. We cannot conclude that the
district court abused its discretion in finding that the disparity between
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Madrid’s and his coconspirators’ sentences was warranted here and, thus, the
disparity does not render his sentence substantively unreasonable. See, e.g.,
United States v. Garcia Mendoza, 587 F.3d 682, 688 (5th Cir. 2009) (finding
that the district court properly imposed a within-Guidelines sentence despite
disparities among the codefendants’ sentences because, inter alia, some
codefendants received reduction in sentences for their cooperation with the
government).
Next, with regard to Madrid’s argument that the district court failed to
give adequate weight to his age and background, the record reflects that the
district court considered these mitigating factors, as well as the need for
deterrence and the nature of the offense, and imposed a below-Guidelines
sentence, recognizing that the Guidelines range was “excessive” in this
particular case. There is no evidence on the record that the district court failed
to account for a relevant factor, gave significant weight to an improper factor,
or made a clear error in judgment. See Fraga, 704 F.3d at 439-40. “In essence,
[Madrid] is asking the court to reweigh the § 3553(a) sentencing factors. As
we have previously held, ‘[a]ppellate review is highly deferential as the
sentencing judge is in a superior position to find facts and judge their import
under § 3553(a) with respect to a particular defendant.’” Heard, 709 F.3d at
435 (quoting United States v. Campos–Maldonado, 531 F.3d 337, 339 (5th Cir.
2008)). Accordingly, we hold that the district court’s below-Guidelines
sentence is not substantively unreasonable.
3. Restitution
Madrid contends that the district court clearly erred in finding that the
County received no benefit from the LKG contract and thus erroneously
awarded restitution in the amount of $550,000 (which was thereafter amended
to $514,000 to account for the amount of restitution that Briones was required
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to pay). Madrid incorporated his arguments regarding the district court’s
finding of intended loss—i.e., that the evidence established that the County did
receive some benefit from LKG’s work under the contract and thus the evidence
does not support the district court’s finding that the entire contract price was
lost. Madrid cites United States v. Sharma, 703 F.3d 318, 322 (5th Cir. 2012),
for the proposition that “every dollar [of restitution] must be supported by the
record evidence,” and contends that the record does not support each dollar of
the restitution award here.
“We review ‘the legality of a restitution order de novo and the amount of
the restitution order for an abuse of discretion.’” United States v. Beacham,
774 F.3d 267, 278 (5th Cir. 2014) (footnote and internal citations omitted).
“The district court ‘abuses its discretion when its ruling is based on an
erroneous view of the law or a clearly erroneous assessment of the evidence.’”
Id. Although the district court is required to make findings of fact to support
each dollar amount of restitution, the district court’s findings of facts are
reviewed for clear error and thus not reversible on appeal unless the district
court’s finding is implausible in light of the record as a whole, or in other words,
the court is “left with the definite and firm conviction that a mistake has been
committed.” Sharma, 703 F.3d at 322.
For the reasons discussed above, although there is some evidence
suggesting LKG did some amount of work during its tenure as the evaluation
team, the evidence, as the district court found, nowhere establishes what
financial benefit, if any, the County actually received from any of LKG’s
sustainability or evaluation work. The district court’s finding of fact that the
actual pecuniary loss as a result of the scheme was the entire cost of the LKG
contract, $550,000, is not clearly erroneous and does not amount to an abuse
of discretion.
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Madrid additionally contends that the district court erred in finding that
restitution be paid to SAMHSA because restitution must only go to victims
directly and proximately harmed by the defendant’s offense. Madrid argues
that, at the time that the PSR was written, SAMHSA has not sought
reimbursement from the County because nothing needed to be returned to the
federal government and thus ordering restitution to be paid to SAMHSA was
in error. Here, the evidence demonstrated that SAMHSA provided the funds
for the costs of evaluation services under the County’s contract, and thus
SAMHSA is properly considered a victim for purposes of restitution. Accord
United States v. Caldwell, 302 F.3d 399, 419-20 (5th Cir. 2002) (concluding that
the state of Mississippi is a “victim” for purposes of restitution where the
evidence supported a finding in a mail fraud prosecution that the defendant
defrauded a corporation “created by state statute and funded by state bonds”).
4. Forfeiture
Madrid raises the same factual arguments regarding the forfeiture
order, contending that the district court clearly erred in ordering forfeiture in
an amount reflecting the entire proceeds jointly procured by the
coconspirators—$550,000. “This court reviews ‘the district court’s findings of
fact under the clearly erroneous standard, and the question of whether those
facts constitute legally proper forfeiture de novo.’” United States v. Juluke, 426
F.3d 323, 326 (5th Cir. 2005) (quoting United States v. Marmolejo, 89 F.3d
1185, 1197 (5th Cir. 1996)).
“Forfeiture[] . . . is punitive; it seeks to disgorge any profits that the
offender realized from his illegal activity.” United States v. Taylor, 582 F.3d
558, 566 (5th Cir. 2009) (quoting United States v. Webber, 536 F.3d 584, 602-
03 (7th Cir. 2008)); see also Read, 710 F.3d at 231 (“While restitution
represents a victim’s loss from the defendant’s offense, forfeiture represents
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the defendant’s gain from the offense.”) (citations omitted). Generally,
“[c]riminal forfeiture focuses on the disgorgement by a defendant of his ‘ill-
gotten gains[,]’” and thus a forfeiture order must reflect the profits procured by
the defendant. United States v. Contorinis, 692 F.3d 136, 146 (2d Cir. 2012).
However, “[t]his general rule is somewhat modified by the principle that a
court may order a defendant to forfeit proceeds received by others who
participated jointly in the crime, provided the actions generating those
proceeds were reasonably foreseeable to the defendant.” Id. at 147 (emphasis
added).
Here, after a forfeiture hearing, the district court found that LKG
provided no quantifiable service or benefit to the County under the terms of
the contract and, therefore, the proceeds of the offense were $550,000—the
entire LKG contract price. For the reasons already explained, the record
evidence supports the district court’s finding that the coconspirators jointly
profited the entire $550,000 received from the County, and that the receipt of
the $550,000 was a reasonably foreseeable result of the conspiracy.
Accordingly, the district court’s findings of fact supporting its forfeiture order
were not clearly erroneous and the district court did not err in imposing a
$550,000 forfeiture order.
CONCLUSION
For these reasons, we AFFIRM Madrid’s convictions and sentence and
AFFIRM the restitution and forfeiture orders.
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