U.S. v. Paguio, s. 95-50370
| Decision Date | 09 June 1997 |
| Docket Number | Nos. 95-50370,95-50375,s. 95-50370 |
| Citation | 114 F.3d 928 |
| Parties | 46 Fed. R. Evid. Serv. 1233, 97 Cal. Daily Op. Serv. 4324, 97 Daily Journal D.A.R. 7233 UNITED STATES of America, Plaintiff-Appellee, v. Gil Manuel PAGUIO, Jr., Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Angelica D. ACOSTA, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Michael Tanaka, Deputy Federal Public Defender, Los Angeles, California, for defendant-appellant Paguio, Jr.
Paul E. Potter, Potter, Cohen & Samulon, Pasadena, California, for defendant-appellant Acosta.
Steve A. Linick, Assistant United States Attorney, Los Angeles, California, for the plaintiff-appellee.
Appeals from the United States District Court for the Central District of California, William J. Rea, District Judge, Presiding. D.C. No. CR-94-00931-WJR.
Before HALL, O'SCANNLAIN and KLEINFELD, Circuit Judges.
This case turns on Federal Rule of Evidence 804(b)(3), the hearsay exception for inculpatory statements by unavailable witnesses.
Appellants Gil Manuel Paguio, Jr. and Angelica D. Acosta, husband and wife, were convicted of false statements to a bank to influence action on a loan application, under 18 U.S.C. §§ 2 & 1014. Paguio Jr.'s father, Gil Paguio, Sr., initiated the loan process. The father approached the institution's loan officer about a $204,000 loan so that his son, Paguio Jr., and Acosta, could buy property next to his house. The loan officer gave the father the application, and the father returned the handwritten loan application with what purported to be the son's and the fiancee's signatures.
The application was fraudulent. It showed that Paguio Jr. and Acosta made $1,900 and $1,300 a month in self-employment income from the father's insurance company. That was not true. As part of its routine for loan processing, the bank had to verify employment and income by examining W-2 Forms, or for self-employed people, copies of tax returns. As "verification" the father showed the bank fictitious 1988 and 1989 tax returns and 1099 forms for Paguio Jr. and Acosta. None of these forms had actually been filed with the IRS.
In truth, Paguio Jr. and Acosta were in no position to finance anything for $200,000 dollars. Acosta had been turned down for an $18,000 car loan. The bank manager had noted on the denial: Paguio Jr. had asked for forbearance on his $10,000 dollar student loan because of inability to make the payments. Nevertheless, both Paguio Jr. and Acosta signed the final loan application.
Paguio Jr. worked in the computer room of another bank. He was under investigation by the FBI, because the bank had processed a counterfeit computer tape, which caused a $70 million dollar funds transfer to a Swiss bank. Paguio Jr. was the last person to handle the tape, so the FBI suspected he probably knew something about the computer theft, but he did not provide any useful information. The FBI investigated Paguio Jr.'s financial situation. They discovered the $204,000 loan and other evidence that Paguio Jr. and his fiancee were not as financially secure as the loan application suggested. The United States Attorney ultimately indicted appellants Paguio Jr. and Acosta in order to pressure Paguio Jr. to tell what the government suspected he knew about the computer theft.
Paguio Jr. and Acosta went to trial on their indictment. The defense was in substance that the house loan was the father's deal, and the son and fiancee lacked mens rea. The jury hung, but the government got convictions when the case was retried.
Appellant Acosta moved to dismiss the indictment for vindictive prosecution, and appeals denial of her motion.
It is a nasty business to indict two people, in order to use the pressure to make one of them talk about an entirely different matter. But it is not what the precedents call "vindictive prosecution." Vindictive prosecution occurs when the government "penalize[s] a person merely because he has exercised a protected statutory or constitutional right." People of Territory of Guam v. Fegurgur, 800 F.2d 1470, 1472 (9th Cir.1986); see also Adamson v. Ricketts, 865 F.2d 1011, 1017 (9th Cir.1988). There is no constitutional right not to "snitch." See United States v. Gardner, 611 F.2d 770, 773 (9th Cir.1980).
Acosta showed that she was indicted to pressure her fiancee to talk. We can find no precedent for the proposition that prosecution is "vindictive" when used to pressure a spouse, so long as "the prosecutor has probable cause to believe a defendant committed a crime." See United States v. Duran, 41 F.3d 540, 544 (9th Cir.1994). The government may indict, even if its motive is to get cooperation in another case, United States v. Gardner, 611 F.2d 770, 773 (9th Cir.1980), where the government has probable cause. Here the government had Paguio Jr.'s and Acosta's signatures on a loan application which was plainly and demonstrably fraudulent, seeking to borrow $200,000 which their present circumstances would not enable them to repay. Indicting them for this crime was not vindictive, even though the prosecution had an ulterior motive.
Acosta argues that the district court abused its discretion in admitting evidence that she had applied and been turned down for an $18,000 car loan to buy a BMW. The government put on a witness and this document:
Excessive obligations for amount requested. Good credit history. Will reconsider in lesser amount. $10,000 and 20% down.
Her argument is that the evidence should have been kept out as other bad acts to prove character, under Federal Rule of Evidence 404(b), and even if not, that the danger of unfair prejudice substantially outweighed its probative value under Federal Rule of Evidence 403.
The evidence was admissible to show knowledge of the limited extent of her borrowing capacity, under the "knowledge" exception in the second sentence of Rule 404(b). As for unfair prejudice under Rule 403, there may have been none, because being turned down for a car loan did not invite the jury to find against Acosta on an inappropriate ground. There is nothing wrong with trying to borrow $18,000 to buy a car, with getting turned down, or with being approved up to $10,000, so there is no reason why a jury would deny such a loan applicant a fair evaluation of the other evidence.
The prosecutor might have been angling for an innuendo that Acosta must be an extravagant person to try to buy a BMW in her financial circumstances, but any such innuendo was weak, because $18,000 is not extravagant for a car. To the extent that any unfair prejudice might lie in the innuendo, the district judge was within his discretion under Rule 403 in deciding that the probative value of the evidence, to show knowledge, was not substantially outweighed by the danger of unfair prejudice.
Paguio Jr.'s lawyer had obtained a statement from Paguio Sr. that his son had "nothing to do with it." When the case was retried, Paguio Sr. was a fugitive, so the defense tried to get the statement into evidence by means of the absent witness hearsay exception for statements against penal interest, Federal Rule of Evidence 804(b)(3). The district court excluded it, and Paguio Jr. and Acosta appeal this evidentiary ruling.
Paguio Jr.'s lawyer and paralegal assistant interviewed Paguio Sr. Defense counsel advised Paguio Sr. that she was not his attorney, she represented his son, and what he told her was not privileged. He told her that the whole scheme was his, and his son (and by implication, his son's fiancee) had nothing to do with it. 1 The father had refused to testify about this, claiming his Fifth Amendment privilege at the first trial, and he became a fugitive prior to the retrial. The district court ruled that the portions of the evidence in which the father admitted his own criminal responsibility, but not those exonerating the son, could come into evidence.
Certain statements against penal interest have long been admissible as an exception to the hearsay rule, and the common law exception has been codified in the Federal Rules of Evidence:
Hearsay exceptions. The following are not excluded by the hearsay rule if the declarant is unavailable as a witness:
....
* * *
(3) Statement against interest. A statement which was at the time of its making so far contrary to the declarant's pecuniary or proprietary interest, or so far tended to subject the declarant to civil or criminal liability, or to render invalid a claim by the declarant against another, that a reasonable person in the declarant's position would not have made the statement unless believing it to be true. A statement tending to expose the declarant to criminal liability and offered to exculpate the accused is not admissible unless corroborating circumstances clearly indicate the trustworthiness of the statement.
Fed.R.Evid. 804(b) (emphasis added).
To get a statement against penal interest into evidence under 804(b)(3), the proponent must show that: (1) the declarant is unavailable as a witness; (2) the statement so far tended to subject the declarant to criminal liability that a reasonable person in the declarant's position would not have made the statement unless he believed it to be true; and (3) corroborating circumstances clearly indicate the trustworthiness of the statement. The government concedes the first requirement, that Paguio Sr. was unavailable.
As to the third element, corroboration of trustworthiness, the district court found in favor of appellants. The government challenges this determination. There were factors which cut both ways, and plenty to support the district court decision. The evidence showed that the father initiated the...
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