United States v. Souza, 1st Cir. (2014)

7/26/2019 United States v. Souza, 1st Cir. (2014)

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United States Court of AppealsFor the First Circuit

No. 12- 1949

UNI TED STATES OF AMERI CA,

Appel l ee,

v.

RI CHARD SOUZA,

Def endant , Appel l ant .

APPEAL FROM THE UNI TED STATES DI STRI CT COURT

FOR THE DI STRI CT OF MASSACHUSETTS

[ Hon. Ri char d G. St ear ns, U. S. Di st r i ct J udge]

Bef or e

Howard, Ri ppl e, * and Thompson,Ci r cui t J udges.

Rebecca A. J acobst ei n, wi t h whomOf f i ce of Appel l at e Advocacywas on br i ef , f or appel l ant .

Randal l E. Kr omm, Assi st ant Uni t ed St ates At t orney, wi t h whomCar men M. Or t i z, Uni t ed St at es At t or ney was on br i ef , f or appel l ee.

Apr i l 18, 2014

* Of t he Sevent h Ci r cui t , si t t i ng by desi gnat i on.


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HOWARD, Circuit Judge. Ri char d Souza appeal s f r om hi s

convi ct i on and sent ence f or st r uct ur i ng f i nanci al t r ansact i ons t o

evade r eport i ng r equi r ement s. We af f i r m.

I. Background

I n 2004, Souza was hi r ed t o r epai r t he r oof of Lawr ence

Bur t chael l , an el der l y wi dower . The t wo devel oped a cl ose

r el at i onshi p and soon Souza was spendi ng several days a week at

Bur t chael l ' s home.

Dur i ng t hi s t i me per i od, Bur t chael l ' s acquai nt ances began

not i ci ng sympt oms of ment al decl i ne. Usual l y wel l dr essed,

Bur t chael l began l ooki ng di shevel ed. He al so had di f f i cul t y

r emember i ng nei ghbors' names, he woul d get l ost wal ki ng ar ound t he

nei ghborhood, and one t i me he f l ooded hi s house because he f orgot

t o t ur n of f t he bat h. Bur t chael l ' s di mi ni shi ng ment al capaci t y was

al so det ect ed by hi s i nvest ment advi sor , Mar k Fr i ese, who

r egi st er ed concer n wi t h hi s manager .

I n 2006, Souza per suaded Bur t chael l t o put up money t o

pur chase r eal est at e i n Mai ne. Souza t ol d Bur t chael l and Fr i ese

t hat Bur t chael l was a par t ner i n t he i nvest ment , but r eveal ed

nei t her t hat t he ot her par t ner s wer e Souza' s sons, nor t hat

Bur t chael l was pr ovi di ng al l of t he pur chase money. Though Souza

pr omi sed that i n a f ew weeks Bur t chael l woul d recoup hi s money wi t h

i nt er est , Bur t chael l never saw any ret ur n on t he i nvest ment .

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Af t er cl osi ng t he deal , Bur t chael l t ook out an $89, 000

l oan on t he pr oper t y and wi r ed al most al l of t he pr oceeds t o

Souza' s account wi t h Sover ei gn Bank. I n t he f ol l owi ng mont hs,

Souza wi t hdr ew al l of t hese f unds, al ways i n i ncr ement s of l ess

t han $10, 000. For i nst ance, on J une 15, 2006, wi t hi n a per i od of

an hour and a hal f , Souza wi t hdr ew $54, 000 i n si x separate

i nst al l ment s of $9000 at f i ve di f f er ent Sover ei gn br anches.

Banks ar e r equi r ed t o f i l e a r eport when an i ndi vi dual

wi t hdr aws $10, 000 or more. 31 U. S. C. 5313( a) ; 31 C. F. R.

1010. 311. For pur poses of r eport i ng, banks aggr egate an

i ndi vi dual ' s dai l y t r ansact i ons across al l br anches. 31 C. F. R.

1010. 313( b) . Thus, Sover ei gn t r eat ed Souza' s si x J une 15

wi t hdr awal s as one $54, 000 wi t hdr awal and f i l ed a report .

Souza was charged wi t h st r uct ur i ng hi s J une 15

t r ansact i ons f or t he pur pose of evadi ng t he r epor t i ng r equi r ement s,

i n vi ol at i on of 31 U. S. C. 5324( a) ( 3) . Souza cl ai med t hat he had

been f orced t o make mul t i pl e wi t hdr awal s of $9000 because each

Sover ei gn br anch r an out of money. To r ebut t hi s cl ai mand t o show

Souza' s i nt ent t o evade t he repor t i ng r equi r ement s, t he gover nment

pr esent ed evi dence of t he Mai ne t r ansact i on, ar gui ng t hat Souza

wi shed t o avoi d dr awi ng at t ent i on t o hi s wi t hdr awal s because t hey

wer e composed of i l l - got t en f unds. Souza was convi ct ed and

sent enced. He appeal s.

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II. Discussion

Souza cl ai ms vi ol at i ons of hi s r i ght s t o a speedy t r i al ,

t o ef f ect i ve assi st ance of counsel , and t o due pr ocess. He al so

ar gues t hat t he di st r i ct cour t made er r oneous evi dent i ar y r ul i ngs

and sent enci ng er r ors. None of t hese argument s i s per suasi ve.

A. Speedy Trial

Souza cont ends t hat he was deni ed hi s speedy t r i al r i ght .

That r i ght der i ves f r om t wo sources: t he Speedy Tr i al Act ( STA) ,

18 U. S. C. 3161- 74, and t he Si xt h Amendment .

1. STA

The STA pl aces t i me l i mi t s on t wo per i ods i n cr i mi nal

pr oceedi ngs: t he per i od bet ween arr est and i ndi ct ment , and t he

per i od bet ween i ndi ct ment and t r i al . I d. 3161( b) - ( c) . I n

comput i ng t he amount of t i me t hat has el apsed dur i ng t hese per i ods,

t he STA per mi t s cour t s t o excl ude cer t ai n i nt er val s. I d.

3161( h) .

Souza al l eges STA vi ol at i ons i n bot h per i ods. We r evi ew

STA chal l enges de novo as t o l egal r ul i ngs and f or cl ear er r or as

t o f act ual f i ndi ngs. Uni t ed St at es v. Val di vi a, 680 F. 3d 33, 38

( 1st Ci r . ) , cer t . deni ed, 133 S. Ct . 565 ( 2012) . Over al l , however ,

we r evi ew f or abuse of di scr et i on deci si ons t o excl ude i nt er val s of

t i me f r om t he STA count . Uni t ed St at es v. Gat es, 709 F. 3d 58, 64

( 1st Ci r . ) , cer t . deni ed, 134 S. Ct . 264 ( 2013) .

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a. Between Arrest and Indictment

The STA cal l s f or i ndi ct ment no l at er t han t hi r t y days

af t er ar r est . 18 U. S. C. 3161( b) . Souza was ar r est ed on August

12, 2010 and was i ndi ct ed on September 30. He argues t hat onl y

f our t een of t hese f or t y- ni ne days ar e excl udabl e, l eavi ng t hi r t y-

f i ve days - - f i ve mor e t han t he STA per mi t s. Al t hough "del ay

r esul t i ng f r om any pr et r i al mot i on" i s excl udabl e, i d.

3161( h) ( 1) ( D) , i ncl udi ng up t o t hi r t y days "dur i ng whi ch any

pr oceedi ng concer ni ng the def endant i s act ual l y under advi sement by

t he cour t , " i d. 3161( h) ( 1) ( H) , Souza cl ai ms t hat no excl udabl e

t i me r esul t ed f r om a j oi nt mot i on f i l ed by t he par t i es on August

20. He makes t hr ee poi nt s, none of whi ch i s avai l i ng.

Fi r st , Souza ar gues t hat t he j oi nt mot i on, whi ch sought

"enl ar gement of t i me" t o obt ai n an i ndi ct ment , r equest ed r el i ef

t hat t he cour t was i ncapabl e of gr ant i ng. Souza di d not make t hi s

ar gument t o t he di st r i ct cour t . Even i f he had, whi l e i t i s t r ue

t hat cour t s cannot "enl ar ge" t he t i me l i mi t s est abl i shed by t he

STA, cour t s can "excl ude" cer t ai n per i ods i n t he i nt er est of

j ust i ce, see i d. 3161( h) ( 7) ( A) , and t he j oi nt mot i on, was

f unct i onal l y equi val ent t o an ant i ci pat or y mot i on t o excl ude t i me.

Souza does not and coul d not cont end that t he pur el y semant i c

di f f er ence pr ej udi ced the pr oceedi ngs i n any way.

Second, Souza cont ends t hat t he excl usi on of t i me sought

by t he j oi nt mot i on was not i n t he i nt er est of j ust i ce. But i t i s

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i r r el evant whet her t he mot i on' s r easons f or seeki ng excl usi on had

mer i t : t i me was excl udabl e not because t he cour t gr ant ed t he j oi nt

mot i on, but because t he cour t had t he mot i on under advi sement .

Thi r d, Souza asser t s t hat t he t ol l t hat st ops t he cl ock

whi l e a cour t consi der s a pr et r i al mot i on shoul d not appl y when t he

mot i on seeks a cont i nuance. Ot her wi se, says Souza, a part y i nt ent

on excl udi ng t i me coul d obt ai n t hat r esul t si mpl y by f i l i ng a

mot i on. But i n Uni t ed St at es v. Ri char dson, we r ej ect ed t hi s

argument and hel d t hat a mot i on t o cont i nue can tol l t he speedy

t r i al cl ock. 421 F. 3d 17, 31 ( 1st Ci r . 2005) .

Of cour se, as we caut i oned i n Ri char dson, "nei t her

counsel nor di st r i ct cour t s may empl oy measur es f or excl udi ng t i me

f r omt he speedy t r i al cl ock t hat i mper mi ssi bl y f r ust r at e t he STA' s

pur pose of pr ot ect i ng t he shar ed i nt er est of cr i mi nal def endant s

and t he publ i c i n ' br i ngi ng cr i mi nal char ges t o t he bar of j ust i ce

as pr ompt l y as pr act i cabl e. ' " I d. at 29 ( quot i ng Uni t ed St at es v.

Hast i ngs, 847 F. 2d 920, 923 ( 1st Ci r . 1988) ) . As was t r ue of t he

mot i on to cont i nue i n Ri char dson, t he j oi nt mot i on her e "was not

f i l ed as a pr et ext t o avoi d t he consequences of an STA vi ol at i on,

but was f i l ed f or t he l egi t i mat e pur pose of seeki ng a cont i nuance

i n t he i nt er est of j ust i ce. " I d. Counsel f or bot h Souza and t he

gover nment sought t he cont i nuance to car r y on pr eexi st i ng pl ea

negot i at i ons and because each had a l ong- st andi ng vacat i on pl anned.

Si nce we have expr essl y l ef t open t he i ssue whet her per i ods of pl ea

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negot i at i on can pr oper l y be excl uded, Uni t ed St at es v.

Scant l eber r y- Frank, 158 F. 3d 612, 615 ( 1st Ci r . 1998) , a mot i on t o

cont i nue made on t hat basi s, whi l e not guarant eed t o succeed, wi l l

not be deemed pr et ext ual on t hat ground al one. Si mi l ar l y, because

we have hel d t hat " [ a] r easonabl e vacat i on const i t ut es a pl ausi bl e

basi s f or excl udi ng a r el at i vel y br i ef per i od of t i me, " Gat es, 709

F. 3d at 67, a mot i on t o cont i nue made on t hat basi s i s al so not

necessar i l y pr et ext ual .

Nor does t he f act t hat Souza obj ect ed t o t he j oi nt mot i on

r ender i t pr et ext ual . Af t er al l , "def ense counsel has t he power t o

seek an STA cont i nuance wi t hout f i r st i nf or mi ng hi s cl i ent or

obt ai ni ng hi s cl i ent ' s per sonal consent . " I d. at 66. Souza' s

obj ect i on i s mer el y "a dat um f or t he di st r i ct cour t t o consi der i n

i t s anal ysi s of t he ends of j ust i ce, " and must be measur ed i n l i ght

of bot h at t or neys' l egi t i mat e r easons f or r equest i ng a cont i nuance.

I d.

Because t he STA per mi t s a cour t t o excl ude up t o t hi r t y

days whi l e a mot i on i s under advi sement , 18 U. S. C. 3161( h) ( 1) ( D) ,

( H) , t he j oi nt mot i on t ol l ed t he speedy t r i al cl ock begi nni ng on

August 20 and cont i nui ng t hr ough Sept ember 19. Thi s excl usi on

r educes t he count ed number of days bet ween t he August 12 ar r est and

t he Sept ember 30 i ndi ct ment bel ow t hi r t y, and t her ef ore wi t hi n t he

l i mi t s of t he STA.

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b. Between Indictment and Trial

The STA cal l s f or t r i al no l at er t han sevent y days af t er

i ndi ct ment . 18 U. S. C. 3161( c) ( 1) . Souza was i ndi ct ed on

September 30, 2010 and hi s t r i al began on Febr uar y 27, 2012. He

argues t hat onl y 201 of t hese 515 days wer e excl udabl e, l eavi ng 314

days - - 244 more t han t he STA per mi t s.

"[ E] xcl usi ons of t i me not speci f i cal l y chal l enged i n a

mot i on t o di smi ss ar e deemed wai ved. " Gat es, 709 F. 3d at 68

( emphasi s added) . Souza di d not f i l e a mot i on t o di smi ss

chal l engi ng speci f i c i nt er val s i n t he pr et r i al per i od. I nst ead,

t hr ough pr o se f i l i ngs, he pr ot est ed gener al l y about del ay. On

appeal , he aver s t hat t hese gener al pr otest at i ons wer e meant t o

convey t hat t her e wer e no excl udabl e i nt er val s anywhere i n t he

pr et r i al per i od. Thi s mi schar acter i zes hi s f i l i ngs, whi ch

compr i sed vague compl ai nt s of del ay and accusat i ons agai nst t he

cour t , t he gover nment , and hi s at t or neys f or col l udi ng t o i mpai r

hi s speedy t r i al r i ght . Even when vi ewed as char i t abl y t o Souza as

possi bl e, hi s asser t i ons di d not i n any event chal l enge excl usi ons

of t i me dur i ng t he pr et r i al per i od, t hus wai vi ng such chal l enges on

appeal . 1

1 Because we concl ude t hat Souza' s pr o se f i l i ngs f ai l ed t opr eserve chal l enges t o speci f i c excl usi ons of t i me, we need notaddr ess whet her t he di st r i ct cour t aut hor i zed t he t ype of "hybr i dr epr esent at i on" t hat woul d per mi t Souza t o make a pr o se f i l i ngwhi l e repr esent ed by counsel .

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2. Sixth Amendment

Souza al so cont ends t hat t he del ay bet ween hi s ar r est and

t r i al vi ol at ed t he Si xt h Amendment ' s guar ant ee of a speedy t r i al .

We revi ew t he di st r i ct cour t ' s Si xth Amendment deci si on f or abuse

of di scret i on. Uni t ed St at es v. Sant i ago- Becer r i l , 130 F. 3d 11, 21

( 1st Ci r . 1997) . To det er mi ne whet her a Si xt h Amendment vi ol at i on

has occur r ed, a cour t bal ances f our f act or s: "( 1) t he l engt h of t he

del ay, ( 2) t he r easons f or t he del ay, ( 3) t he def endant ' s asser t i on

of hi s r i ght , and ( 4) pr ej udi ce t o t he def endant r esul t i ng f r omt he

del ay. " Uni t ed St at es v. Dowdel l , 595 F. 3d 50, 60 ( 1st Ci r . 2010)

( ci t i ng Bar ker v. Wi ngo, 407 U. S. 514, 530 ( 1972) ) .

a. Length of Delay

Lengt h of del ay, i n addi t i on t o f act or i ng i nt o t he

bal ance, serves as a t r i gger i ng mechani smf or r evi ew, si nce a cour t

wi l l conduct a Si xt h Amendment anal ysi s onl y af t er a def endant has

shown t hat t he per i od of t i me "has cr ossed t he t hr eshol d di vi di ng

or di nar y f r ompr esumpt i vel y pr ej udi ci al del ay. " Dogget t v. Uni t ed

St at es, 505 U. S. 647, 651- 52 ( 1992) ( i nt er nal quot at i on mar ks

omi t t ed) . Gener al l y, del ay becomes pr ej udi ci al ar ound t he one- year

mark. See i d. at 652 n. 1; Dowdel l , 595 F. 3d at 61.

Here, r oughl y ei ght een mont hs passed bet ween Souza' s

ar r est i n Oct ober 2010 and hi s t r i al i n Febr uar y 2012. For

pur poses of anal ysi s, we wi l l assume, wi t hout deci di ng, t hat t he

ei ght een- mont h del ay est abl i shes a pr esumpt i on of pr ej udi ce,

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t r i gger i ng f ur t her Si xt h Amendment r evi ew. See, e. g. , Sant i ago-

Becer r i l , 130 F. 3d at 21 ( assumi ng that f i f t een- mont h del ay was

pr esumpt i vel y pr ej udi ci al ) .

As f or i t s pl ace i n t he bal anci ng t est , a l engt hi er del ay

r ai ses t he l i kel i hood t hat t he def endant suf f er ed pr ej udi ce.

Dogget t , 505 U. S. at 652. Whi l e t he del ay i n Souza' s case was not

at t he ext r eme end of t he spect r um, see Barker , 407 U. S. at 534

( "I t i s cl ear t hat t he l engt h of del ay bet ween ar r est and t r i al - -

wel l over f i ve year s - - was ext r aor di nar y. ") ; but see Uni t ed St at es

v. Munoz- Franco, 487 F. 3d 25, 61 ( 1st Ci r . 2007) ( "The f i ve year s

t hat el apsed bet ween i ndi ct ment and t r i al i s a t r oubl esome l engt h

of t i me. Nonet hel ess, our i nqui r y has r eveal ed no const i t ut i onal

vi ol at i on. ") , we have hel d t hat a f i f t een- mont h del ay i s

"[ a] r guabl y . . . l ong enough t o t i p t he scal es sl i ght l y i n f avor

of [ t he def endant ' s speedy tr i al ] cl ai m, " Sant i ago- Becer r i l , 130

F. 3d at 22. We wi l l assume f or t he sake of argument t hat t he

ei ght een- mont h del ay i n Souza' s case wei ghs i n hi s f avor , but , as

we expl ai n bel ow, not heavi l y enough t o over come the count er vai l i ng

wei ght s of t he second and f our t h f act or s.

b. Reasons for Delay

Of t he f our f act or s i n t he anal ysi s, exami nat i on of t he

r easons f or del ay i s t he " f ocal i nqui r y. " Munoz- Franco, 487 F. 3d

at 60 ( i nt er nal quot at i on mar ks omi t t ed) . We must f i r st det er mi ne

i f t he del ays wer e at t r i but abl e t o Souza or t o t he gover nment .

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"[ D] el ays sought by [ def ense] counsel ar e or di nar i l y at t r i but abl e

t o t he def endant s they r epr esent . " Ver mont v. Br i l l on, 556 U. S.

81, 85 ( 2009) . For t hose del ays caused by t he gover nment , we must

eval uat e t he under l yi ng reasons:

A del i ber at e at t empt t o del ay t he t r i al i norder t o hamper t he def ense shoul d be wei ght edheavi l y agai nst t he government . A moreneut r al r eason such as negl i gence orovercr owded cour t s shoul d be wei ght ed l essheavi l y but never t hel ess shoul d be consi der edsi nce t he ul t i mat e r esponsi bi l i t y f or suchci r cumst ances must r est wi t h t he gover nmentr at her t han wi t h t he def endant . Fi nal l y, aval i d r eason, such as a mi ssi ng wi t ness,shoul d ser ve t o j ust i f y appr opr i at e del ay.

Bar ker , 407 U. S. at 531 ( f ootnot e omi t t ed) .

Thi s f act or wei ghs agai nst Souza. Much of t he del ay

r esul t ed f r om hi s act i ons or t hose of hi s counsel . Bet ween hi s

ar r est and t he appoi nt ment of hi s ul t i mat e t r i al counsel , Souza

t wi ce vi ol at ed t he t er ms of hi s r el ease, necessi t at i ng f ur t her

pr oceedi ngs, and t hr i ce obt ai ned new counsel , who sought

cont i nuances on sever al occasi ons. Addi t i onal l y, Souza f i l ed t wo

pr et r i al mot i ons, whi ch f ur t her del ayed t he pr oceedi ngs.

The del ays at t r i butabl e t o t he gover nment wer e not

mot i vat ed by a del i ber ate at t empt t o def er t he t r i al . Some wer e

t r aceabl e t o t he f act t hat r epl acement counsel f or t he gover nment

needed t i me t o gai n f ami l i ar i t y wi t h t he case af t er t he i ni t i al

counsel l ef t t he U. S. At t or ney' s Of f i ce. Ot her s r esul t ed f r om t he

medi cal l eave of an I RS agent who was needed t o pr oduce cer t ai n

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document s. These f al l i nt o t he cat egor y of val i d r easons t hat

j ust i f y an appr opr i at e del ay. Fur t her appr opr i at e del ay occur r ed

when t he case was t r ansf er r ed t o a new di st r i ct cour t j udge af t er

t he i ni t i al j udge r et i r ed.

Once t he t r i al dat e was set , i t was cont i nued t wi ce.

Fi r st , t he government moved f or a cont i nuance because counsel had

another t r i al and an appel l at e ar gument schedul ed dur i ng t he same

mont h as Souza' s t r i al . Ther eaf t er , Souza' s counsel moved t o

cont i nue because he had a conf l i ct wi t h t he new t r i al dat e. Al l i n

al l , t he gover nment , as compared t o Souza and hi s counsel , pl ayed

a mi ni mal r ol e i n del ayi ng t he t r i al .

c. Defendant's Assertion of the Right

From t he out set , Souza made i t cl ear t hat he wi shed t o

pr oceed t o t r i al as qui ckl y as possi bl e. Thi s f act or wei ghs i n hi s

f avor , but not enough to over come t he wei ght t hat t he second and

f our t h f act or s car r y agai nst hi m.

d. Prejudice Resulting from the Delay

Pr ej udi ce i s assessed i n l i ght of t he i nt er est s t hat t he

speedy t r i al r i ght was desi gned t o pr ot ect : "( i ) t o pr event

oppr essi ve pr et r i al i ncar cer at i on; ( i i ) t o mi ni mi ze anxi et y and

concer n of t he accused; and ( i i i ) t o l i mi t t he possi bi l i t y t hat t he

def ense wi l l be i mpai r ed. " Bar ker , 407 U. S. at 532.

The l ast of t hese i nt er est s i s t he most ser i ous, as i t

i mpl i cat es " t he f ai r ness of t he ent i r e syst em, " and we begi n wi t h

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i t her e. I d. Souza ar gues t hat evi dence and t est i mony of

wi t nesses was l ost or hamper ed as a resul t of t he del ay bet ween hi s

cr i mi nal conduct , whi ch occur r ed i n 2006, and hi s t r i al , whi ch

occur r ed i n 2012. But most of t hi s per i od i s i r r el evant f or speedy

t r i al pur poses. The speedy t r i al r i ght " at t aches upon ar r est or

i ndi ct ment , whi chever occur s f i r st , " Sant i ago- Becer r i l , 130 F. 3d at

21, and Souza was not arr est ed unt i l August 12, 2010. The del ay i n

obt ai ni ng t he ar r est f ol l owi ng hi s cri mi nal conduct i mpl i cat es

separate r i ght s, see Munoz- Fr anco, 487 F. 3d at 58, not i nvoked by

Souza on appeal . Though Souza specul at es about pr ej udi ce, he

poi nt s t o not hi ng i n the ei ght een- mont h per i od bet ween hi s ar r est

and t r i al t hat i mpai r ed hi s abi l i t y t o mount a def ense.

As t o pr et r i al i ncar cer at i on, we cannot say that t he

del ay bet ween Souza' s ar r est and t r i al caused hi mprej udi ce. Souza

was i ncar cer at ed whi l e awai t i ng t r i al onl y because he f ai l ed t o

abi de by t he condi t i ons of hi s rel ease. And, as t o anxi et y and

concer n, si nce "consi der abl e anxi et y nor mal l y at t ends t he

i ni t i at i on and pendency of cr i mi nal char ges[ , ] . . . onl y undue

pr essur es ar e consi dered. " Uni t ed St at es v. Henson, 945 F. 2d 430,

438 ( 1st Ci r . 1991) ( i nt er nal quot at i on mar ks omi t t ed) . The r ecor d

does not suggest t hat Souza was subj ect t o such undue pr essures.

Wei ghi ng al l f our f actors, i n l i ght of t he f acts t hat

Souza and hi s counsel wer e l ar gel y responsi bl e f or t he del ay and

t hat Souza di d not exper i ence pr ej udi ce as a resul t , we di scer n no

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r equi r ement s. We r evi ew such a chal l enge de novo. Uni t ed St at es

v. Hussei n, 351 F. 3d 9, 14 ( 1st Ci r . 2003) .

Souza' s argument mi sses t he poi nt . Sect i on 5324( a) ( 3)

makes i t a cr i me t o st r uct ur e t r ansact i ons " f or t he pur pose of

evadi ng t he r epor t i ng r equi r ement s. " 31 U. S. C. 5324( a) ( 3)

( emphasi s added) . The st at ut e f ocuses on an i ndi vi dual ' s i nt ent t o

evade t he r eport i ng requi r ement s, not on whet her he succeeds i n

doi ng so. Uni t ed St ates v. Sweeney, 611 F. 3d 459, 471 ( 8t h Ci r .

2010) ( "[ Sect i on] 5324 pr ohi bi t s per sons f r om conduct i ng

t r ansact i ons wi t h t he i nt ent t o evade t he r epor t i ng r equi r ement ,

r egardl ess of whet her a pl an t o evade the r eport i ng r equi r ement

succeeds ( by st ayi ng bel ow t he $10, 000 t hr eshol d) or f ai l s ( by

exceedi ng the $10, 000 t hr eshol d) . " ) ; Uni t ed St at es v. Van Al l en,

524 F. 3d 814, 825 ( 7t h Ci r . 2008) ( "Whet her or not Van Al l en

act ual l y f ool ed Ar cher Bank has no bear i ng on the subst ant i ve

vi ol at i on under 31 U. S. C. 5324( a) . ") . Consi st ent wi t h due

pr ocess, Souza coul d be convi ct ed of st r uct ur i ng hi s t r ansact i ons

i n a way t hat demonst r at es hi s i nt ent t o evade t he repor t i ng

r equi r ement s, even though he f ai l ed to act ual l y evade t hem.

D. Evidentiary Rulings

Accor di ng t o Souza, t he di st r i ct cour t er r ed i n admi t t i ng

evi dence r el at ed t o t he sour ce of t he f unds t hat wer e event ual l y

st r uct ur ed. Thi s i ncl uded evi dence of Bur t chael l ' s pur chase of t he

Mai ne pr oper t y, t he l oan he took out on t hat pr oper t y, and hi s

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t r ansf er of t he l oan pr oceeds t o Souza' s account . We r evi ew such

evi dent i ar y r ul i ngs f or abuse of di scret i on. Uni t ed St at es v.

Gr een, 698 F. 3d 48, 55 ( 1st Ci r . 2012) .

Souza f i r st cl ai ms t hat evi dence of f r audul ent act i vi t y

r el at ed t o t he Mai ne t r ansact i on was not i nt r i nsi c t o t he char ged

cr i me of st r uct ur i ng and, as ext r i nsi c evi dence, compr i sed pr i or

act s t hat wer e i nadmi ssi bl e under Feder al Rul e of Evi dence 404( b) .

I nt r i nsi c evi dence i ncl udes pr i or act s t hat ar e "par t of [ t he]

necessar y descr i pt i on of t he event s l eadi ng up t o t he cr i me[ ] " or

t hat go t o "an el ement of t he char ged of f ense. " Uni t ed St at es v.

Fazal - Ur - Raheman- Fazal , 355 F. 3d 40, 50 ( 1st Ci r . 2004) . Her e,

evi dence of t he f unds' sour ce was par t of t he necessar y descr i pt i on

of t he event s l eadi ng up t o t he st r uct ur i ng; t hat evi dence, as i t

suggest ed Souza knew he had obt ai ned t he f unds i n an i l l i ci t

manner , al so went t o the el ement of hi s i nt ent t o evade t he

r epor t i ng r equi r ement s. The di st r i ct cour t di d not abuse i t s

di scret i on i n t r eat i ng t hi s evi dence as i nt r i nsi c t o t he cri me

charged. 2

Souza al so argues t hat t he evi dence shoul d have been

excl uded under Rul e 403 as unf ai r l y pr ej udi ci al . We r ever se t he

2 Because we concl ude t hat t he evi dence was i nt r i nsi c t o t hechar ged cr i me and went t o t he i ssue of Souza' s i nt ent , we need notaddr ess hi s argument t hat t he evi dence was i nadmi ssi bl e under Rul e404( b) . See Uni t ed St at es v. Mar e, 668 F. 3d 35, 39 ( 1st Ci r . 2012)( ci t i ng Fazal - Ur - Raheman- Fazal f or t he pr oposi t i on t hat "i nt r i nsi cevi dence t hat woul d sat i sf y t he char ged cr i me' s speci f i c i nt entel ement i s not governed by Rul e 404( b) " ) .

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di st r i ct cour t ' s j udgment about t he pr ej udi ci al ef f ect of evi dence

"[ o] nl y rarel y - - and i n ext r aor di nar i l y compel l i ng ci r cumst ances. "

Fr eeman v. Package Mach. Co. , 865 F. 2d 1331, 1340 ( 1st Ci r . 1988) .

Souza aver s t hat evi dence of t he f unds' sour ce l acked pr obat i ve

val ue because t he government coul d have pr oven i t s case excl usi vel y

t hr ough t he st r uct ur e of t he t r ansact i ons. Of cour se, at t r i al t he

gover nment needed t o over come Souza' s asser t i on t hat he was f or ced

t o compl ete hi s wi t hdr awal s as he di d because none of t he bank

br anches had enough cash on hand. And whi l e t heoret i cal l y a j ur y

coul d have i nf er r ed Souza' s i nt ent t o evade t he r epor t i ng

r equi r ement s si mpl y f r om t he st r uct ur e of t he t r ansact i ons

t hemsel ves, evi dence of how Souza obtai ned t he f unds pr ovi ded

i mpor t ant addi t i onal i nf or mat i on wi t h whi ch t o eval uat e hi s i nt ent .

See Uni t ed St ates v. Davenport , 929 F. 2d 1169, 1174 (7t h Ci r . 1991)

( "The Davenpor t s say i t i s i r r el evant t o t hei r gui l t of t he cri me

of whi ch t hey were char ged where t hey got t he money. I t i s not

i r r el evant . The shadi er t he sour ce, t he gr eat er t he Davenpor t s'

mot i ve t o conceal t he money f r omt he aut hor i t i es by taki ng measur es

t o t hwar t t he r epor t i ng r equi r ement s. " ) ; see al so Ol d Chi ef v.

Uni t ed St ates, 519 U. S. 172, 188 ( 1997) ( " [ T] he pr osecut i on may

f ai r l y seek t o pl ace i t s evi dence bef or e t he j ur or s, as much t o

t el l a st or y of gui l t i ness as t o suppor t an i nf er ence of

gui l t . . . . " ) .

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We underst and Souza' s concern about t he pr ej udi ci al

ef f ect t hi s evi dence mi ght have had on t he j ur y. The pr osecut i on

devot ed consi der abl e t i me t o t he Mai ne t r ansact i on. And Souza, i n

t ur n, r easonabl y f el t compel l ed t o r espond t o al l egat i ons of f r aud

i n t hat t r ansact i on. Evi dence t hat Souza def r auded an el der l y,

vul ner abl e man r an t he r i sk of pr ej udi ci ng t he j ur y. See Uni t ed

St at es v. Gi l ber t , 229 F. 3d 15, 24 ( 1st Ci r . 2000) ( not i ng t he

pr ej udi ce t hat can at t end a "mi ni - t r i al " on unchar ged conduct ) .

But Rul e 403 excl udes evi dence onl y when i t s pr ej udi ci al ef f ect

subst ant i al l y out wei ghs i t s pr obat i ve val ue, and we cannot say t hat

t he di st r i ct cour t abused i t s di scr et i on i n r ef usi ng t o f i nd such

subst ant i al out wei ghi ng her e. Mor eover , t he di st r i ct cour t

i nst r uct ed t he j ur y t o f ocus on t he char ged conduct , as opposed t o

any pot ent i al unchar ged cr i me. See Uni t ed St at es v. Wi l l i ams, 717

F. 3d 35, 41- 42 ( 1st Ci r . 2013) ( not i ng t hat l i mi t i ng i nst r uct i on

can hel p pr event unf ai r pr ej udi ce i n t hese si t uat i ons) .

E. Sentencing

Souza ar gues t hat t he di st r i ct cour t ' s sent enci ng

gui del i nes cal cul at i on was er r oneous i n t hr ee r espect s. We r evi ew

t he sent enci ng cour t ' s f act f i ndi ng f or cl ear er r or and i t s

const r uct i on and appl i cat i on of t he gui del i nes de novo. Uni t ed

St at es v. I henacho, 716 F. 3d 266, 276 ( 1st Ci r . 2013) .

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1. Amount of Structured Funds

The di st r i ct cour t f ound t hat t he st r uct ured f unds

consi st ed of a J une 8, 2006 wi t hdr awal of $5000, a J une 12

wi t hdr awal of $5500, a J une 13 wi t hdr awal of $4976. 26, a J une 14

wi t hdr awal of $3700, and the si x J une 15 wi t hdr awal s of $9000 each,

al l t ot al i ng $73, 176. 26. Because t he st r uct ur ed f unds t ot al ed mor e

t han $70, 000, t he cour t appl i ed an ei ght - l evel i ncr ease t o Souza' s

of f ense l evel under U. S. S. G. 2B1. 1( b) ( 1) ( E) .

Souza ar gues t hat t he st r uct ur ed f unds consi st ed of onl y

t he $54, 000 wi t hdr awn i n si x i nst al l ment s on J une 15. Ther ef or e,

says Souza, t he cour t shoul d have appl i ed onl y t he si x- l evel

i ncr ease t hat cor r esponds t o st r uct ur ed f unds t ot al i ng bet ween

$30, 000 and $70, 000. See i d. 2B1. 1( b) ( 1) ( D) . Souza poi nt s out

t hat , whi l e a $9000 wi t hdr awal i s j ust under t he $10, 000 r epor t i ng

t hr eshol d, none of hi s ot her wi t hdr awal s came cl ose t o t he l i mi t .

He al so ar gues t hat t he J une 13 wi t hdr awal of $4976. 26 i s t oo

speci f i c t o show st r uct ur i ng, and l i kel y was used t o pay a bi l l .

We see no cl ear er r or i n t he di st r i ct cour t ' s cal cul at i on

of t he st r uct ur ed f unds. Ther e i s no r equi r ement t hat s t r uct ur i ng

i nvol ve whol e numbers or amount s j ust under $10, 000. Al t hough t he

wi t hdr awal s bet ween J une 8 and J une 14 wer e not i dent i cal t o t hose

of J une 15, t hey shar e enough si mi l ar i t i es t hat t he cour t coul d

have reasonabl y concl uded that al l of t he wi t hdr awal s wer e meant t o

evade t he r epor t i ng r equi r ement s. They al l occur r ed wi t hi n a shor t

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t i me per i od: no more t han one busi ness day el apsed bet ween any of

t he wi t hdr awal s. They al l i nvol ved sever al t housands of dol l ar s.

And t hey al l cl osel y f ol l owed t he deposi t of t he bul k of

Bur t chael l ' s l oan pr oceeds i nt o Souza' s account .

2. Proceeds of Unlawful Activity

The di st r i ct cour t f ound t hat Souza knew t he st r uct ured

f unds wer e t he pr oceeds of unl awf ul act i vi t y, and t hus appl i ed a

t wo- l evel i ncrease under U. S. S. G. 2S1. 3( b) ( 1) ( A) .

Souza argues t hat t here was no evi dence t hat he acqui r ed

t he f unds t hr ough unl awf ul act i vi t y. Accor di ng t o Souza,

Bur t chael l ' s consent t o t he Mai ne t r ansact i on was obt ai ned nei t her

t hr ough f r aud nor t hr ough mi sr epr esent at i on.

The r ecor d t el l s a di f f er ent st or y. Souza mi sr epresent ed

t he nat ur e of t he Mai ne t r ansact i on by f ai l i ng t o di scl ose t o

Bur t chael l and Fr i ese that t he ot her par t ner s wer e Souza' s sons or

t hat Bur t chael l was pr ovi di ng al l of t he pur chase money. Souza

al so pr omi sed i l l usory r et ur ns on t he i nvest ment , and t hen

convi nced Bur t chael l t o take out a l oan on t he pr oper t y and t o

t r ansf er t he bul k of t he l oan pr oceeds t o Souza' s account . Al l of

t hi s pr ovi des enough evi dence t o suppor t t he di st r i ct cour t ' s

f i ndi ng t hat Souza knew t he st r uct ur ed f unds der i ved f r omunl awf ul

act i vi t y.

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3. Vulnerable Victim

The di st r i ct cour t f ound t hat Souza knew or shoul d have

known t hat Bur t chael l was a vul ner abl e vi ct i m, and t hus appl i ed a

t wo- l evel i ncrease under U. S. S. G. 3A1. 1( b) ( 1) . The gui del i nes

def i ne a vul ner abl e vi ct i m as " a per son ( A) who i s a vi ct i m of t he

of f ense of convi ct i on and any conduct f or whi ch t he def endant i s

account abl e under 1B1. 3 ( Rel evant Conduct ) ; and ( B) who i s

unusual l y vul ner abl e due to age, physi cal or ment al condi t i on, or

who i s ot her wi se par t i cul ar l y suscept i bl e t o t he cr i mi nal conduct . "

I d. 3A1. 1 cmt . n. 2.

Souza chal l enges t he vul ner abl e vi ct i m i ncr ease on t wo

gr ounds. Fi r st , he says t hat even i f he def r auded Bur t chael l ,

Bur t chael l was not a vi ct i m of t he char ged cr i me of st r uct ur i ng.

Second, Souza says he di d not know of and had no r eason t o know of

Bur t chael l ' s vul ner abi l i t y.

a. "Victim"

To come wi t hi n t he gui del i nes' def i ni t i on, one need not

be a vi ct i m of t he char ged of f ense so l ong as one i s a vi ct i m of

t he def endant ' s ot her r el evant conduct . I d. Rel evant conduct

i ncl udes al l act s t hat occur r ed dur i ng t he pr epar at i on and

commi ssi on of t he of f ense. See i d. 1B1. 3( a) ( 1) . And f or an

of f ense l i ke st r uct ur i ng, r el evant conduct al so i ncl udes act s t hat

were "par t of t he same cour se of conduct or common scheme or pl an. "

See i d. 1B1. 3( a) ( 2) , 3D1. 2( d) . A common scheme or pl an i nvol ves

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act s connect ed "by at l east one common f act or , such as common

vi ct i ms, common accompl i ces, common purpose, or si mi l ar modus

oper andi . " I d. 1B1. 3 cmt . n. 9( A) .

Souza ar gues t hat any f r aud of whi ch Bur t chael l mi ght

have been a vi ct i m was not r el evant conduct wi t h r espect t o the

char ged of f ense of st r uct ur i ng. We di sagr ee. The f r aud and t he

st r uct ur i ng were par t of a common scheme: wi t hout t he f r aud, Souza

woul d not have acqui r ed t he f unds t hat he went on t o wi t hdr aw

t hr ough st r uct ur ed t r ansact i ons, and t he st r uct ur i ng was meant t o

ext r act wi t hout det ecti on hi s i l l - got t en gai ns. Thi s case i s

si mi l ar t o Uni t ed St at es v. J ohnson, i n whi ch f r aud per pet r at ed

agai nst t el emarket i ng vi ct i ms was deemed rel evant t o t he charged

of f ense of money l aunder i ng, because t he f r aud "pr ovi ded t he

i l l i ci t f unds necessar y t o f i nance addi t i onal cr i mi nal act i vi t y. "

297 F. 3d 845, 873 ( 9t h Ci r . 2002) ; see al so Uni t ed St at es v.

Fi r ment , 296 F. 3d 118, 120- 21 ( 2d Ci r . 2002) ( " [ W] e see no er r or i n

t he di st r i ct cour t ' s appl i cat i on of t he vul ner abl e vi cti m

enhancement t o Fi r ment on t he basi s of t he vul ner abi l i t y of t he

vi ct i ms of t he t el emarket i ng scheme t hat gener ated t he t axabl e

r evenues, despi t e t he f act t hat hi s of f ense of convi ct i on was a t ax

of f ense. ") . I n shor t , t he di str i ct cour t di d not er r i n

det er mi ni ng t hat Bur t chael l was a vi ct i m of conduct t hat was

r el evant t o t he char ged st r uct ur i ng.

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b. "Vulnerable"

The evi dence of Bur t chael l ' s di mi ni shed capaci t y was

consi der abl e, consi st i ng of t est i mony f r om hi s nei ghbor s t hat he

began t o l ook di shevel ed, t hat he had di f f i cul t y r emember i ng t hei r

names, t hat he woul d get l ost wal ki ng around t he nei ghborhood, and

t hat he once f l ooded hi s house by l eavi ng t he bath r unni ng, as wel l

as t est i mony that hi s f i nanci al advi sor had r epor t ed t o hi s manager

concer n about Bur t chael l ' s sl i ppi ng ment al f acul t i es. Coupl ed wi t h

evi dence that Souza spent subst ant i al t i me wi t h Bur t chael l dur i ng

t hi s per i od, we see no cl ear er r or i n t he di st r i ct cour t ' s

det er mi nat i on t hat Souza knew or had r eason t o know of Bur t chael l ' s

vul ner abi l i t y.

III. Conclusion

For t he f or egoi ng r easons, Souza' s convi ct i on and

sent ence are affirmed.

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Documents

United States v. Souza, 1st Cir. (2014)