U.S. v. Pazos, 93-4864

• Decision Date: 15 June 1994
• Docket Number: No. 93-4864,93-4864
• Parties: UNITED STATES of America, Plaintiff-Appellee, Cross Appellant, v. Victor M. PAZOS, Defendant-Appellant, Cross Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 660

24 F.3d 660

UNITED STATES of America, Plaintiff-Appellee, Cross Appellant, v. Victor M. PAZOS, Defendant-Appellant, Cross Appellee.

No. 93-4864.

United States Court of Appeals Fifth Circuit.

June 15, 1994.

Rehearing Denied Sept. 30, 1994.

Charles D. Carver, Provost & Umphrey, Beaumont, TX, for appellant.

Bob Wortham, U.S. Atty., John B. Stevens, Jr., Asst. U.S. Atty., Beaumont, TX, for appellee.

Appeals from the United States District Court for the Eastern District of Texas.

Before REYNALDO G. GARZA and DeMOSS, Circuit Judges, and PARKER ^*, District Judge.

REYNALDO G. GARZA, Circuit Judge:

Victor M. Pazos appeals his conviction for arson and four counts of mail fraud. The Government cross-appeals the district court's application of the Sentencing Guidelines. Finding no error, we AFFIRM.

I. PROCEDURAL HISTORY

On March 5, 1993, Victor M. Pazos was convicted in the United States District Court for the Eastern District of Texas, Beaumont Division for Arson in violation of 18 U.S.C. Sec. 844(i) and four counts of Mail Fraud in violation of 18 U.S.C. Sec. 1341. At the sentence hearing Pazos had no objections to the pre-sentence report. The Government, however, objected because it wanted the district court to increase the base offense level from 20 to 24. The district court overruled the Government's objections and sentenced Pazos to imprisonment for a term of 36 months as to each of the five counts, with the sentences to run concurrently. Pazos timely appealed to this court with regard to sufficiency of the evidence on all five counts. The Government cross-appeals with regard to the district court's application of the Sentencing Guidelines.

II. FACTS

Victor Pazos and his wife Cheri Pazos, and her father, Leroy Bernard, formed a corporation to open Bernard's Cajun Restaurant. Leroy Bernard, acting on behalf of the restaurant, leased the premises for the restaurant from Jack Brookner. The terms of the lease called for the restaurant to pay $2,000 per month in lease payments, which were due on the first of each month and 4% of the previous months gross sales, which were due on the tenth of each month. Leroy Bernard purchased insurance for the restaurant and obtained content insurance of $55,000 and loss of earnings insurance of $30,000. In January of 1991, Victor Pazos increased the content insurance to $75,000 and the loss of earnings insurance to $60,000.

The Pazos and Leroy Bernard lived in a two-bedroom apartment located approximately 150 feet from the restaurant. Leroy Bernard would open up the restaurant in the mornings and the Pazos would close it each night. Leroy Bernard, Pazos and his wife, and Jack Brookner, each had a set of keys to the restaurant. An extra set of keys was kept in the restaurant's safe. The building that housed the restaurant was equipped with a security system and it was customary to set the alarm when closing the restaurant for the night. Each of the Pazos and Leroy Bernard knew the security code to the burglar alarm system.

The building that housed the restaurant had a door on the west side of the building that was used primarily as an emergency exit door. The west exit door was customarily kept unlocked during business hours and locked at night when the restaurant was closed. On one prior occasion, Leroy Bernard had found the west exit door unlocked when he opened the restaurant.

Bernard's Cajun Restaurant opened for business on November 12, 1990. The restaurant sustained a net loss for each of the three months it was open for business. In November of 1990 the restaurant sustained a net loss of $15,118, in December of 1990 it sustained a loss of $4,901, and in January of 1991 it sustained a loss of $4,865. Victor Pazos' bank accounts at the time of the fire reflected balances of less than $6,000. Payroll of almost $6,000 had accrued, and was to be issued a couple of days after the fire. Jack Brookner testified that the restaurant's lease payments and percentage of sales payments were constantly late. He also testified that utility bills were delinquent.

January 27, 1991 was Super Bowl Sunday and the Pazos went to the restaurant around 1:20 p.m. There was a beer promotion sale and Victor Pazos took the television set from the apartment to the restaurant to watch the Super Bowl Game. Leroy Bernard was also in the restaurant that afternoon. Sometime around 8:00 p.m., the Montondons, friends of the Pazos, appeared at the restaurant. The Montondons and the Pazos decided to go to dinner. Victor Pazos invited his father-in-law, but he declined.

After dinner with the Montondons, the Pazos returned to their apartment. After returning to their apartment at approximately 10:00 p.m., Victor Pazos went to the restaurant and shortly thereafter returned with the television set. Sometime around 11:10 p.m. Victor Pazos again left his apartment and went to Kroger's Food store to purchase some Alka-Seltzer for his upset stomach.

On January 28, 1991, at approximately 12:22 a.m., a fire at Bernard's Cajun Restaurant was reported to the Beaumont Fire Department. The fire officials discovered paper trails throughout the restaurant. The fire fighters noticed what appeared to be flammable liquid on the paper trails and on the carpet. They estimated that the fire had been burning 20 to 30 minutes prior to their arrival at the scene. The fire was most severe toward the back of the building. The fire alarm box had been opened and the battery removed so as to make the fire alarm inoperable. A wire from the alarm box was hanging as though someone may have tampered with it.

Bradley Pennisson, Captain with the Beaumont Fire Department, inspected the building and he too observed paper trails throughout the restaurant. He also observed that the stairway leading to the attic had been pulled down and a separate fire had been started in the attic. He determined that several separate fires had been set throughout the restaurant. Captain Pennisson further observed that the west exit door to the restaurant had a double cylinder dead bolt that was in an unlocked position. It was his opinion that the exit door was unlocked at the time of the fire. There were no other signs of entry into the building other than the west door being unlocked.

Captain Pennisson spoke with Victor Pazos at the scene of the fire and Pazos advised him that to his knowledge he was the last person in the building and that he had locked up the building. Captain Pennisson asked Pazos if he had any problems with anybody and Pazos responded that he had problems with two former employees. While speaking with Pazos, Captain Pennisson did not detect any odor of any gas or petroleum type products on Pazos.

Chief Fire Marshal Jack Maddox took a sworn statement from Victor Pazos immediately after the fire. Pazos stated that he had not noticed anything missing out of the restaurant. Later it was proven that Pazos was aware that $2,000 of the restaurant's proceeds were actually missing at the time he made the written statement. Pazos' statement also stated that he started the business with money given to him from his father. Later it was proven that Pazos actually opened the business with insurance money he received from previous insurance claims. The statement indicated that the restaurant was profitable, when in fact, it was losing money. The statement also indicated that after Pazos returned to his apartment at 10:00 p.m., he stayed there until the fire was discovered. It was later shown that Pazos left his apartment after 10:00 p.m. to purchase Alka-Seltzer from a nearby grocery store.

Leroy Bernard testified at trial. Bernard testified that he provided the expertise with his restaurant experience and that Victor Pazos provided all of the capital investment to start up the restaurant. He also testified that Pazos was unsuccessful at getting loans from banks. He further testified that it was Pazos' idea to increase the insurance on the restaurant.

Robert Davis also testified at trial. He owned the security service company which installed and monitored the burglar alarm at the restaurant. Computer records were introduced at trial that showed that during the week before the fire, the alarm was set each night and disarmed the following morning. However, on January 27, the night of the fire, the records showed that the alarm was never activated. According to Davis, there was no reason to believe the computer malfunctioned.

George Haynes, an insurance salesman, also testified. He testified that shortly after January first, Pazos called him and inquired about the status of the content and loss of earnings insurance on the restaurant. Pazos also wanted to know how the content and loss of earnings coverage would apply in the event of a fire. Thereafter, Pazos called the insurance company and requested an increase on the content and loss of earnings coverage.

Finally, Jack Morman testified. Morman was the fire insurance adjuster on the restaurant fire. Morman received mailed letters from a public adjuster hired by Pazos in Pazos' claim on damages from the fire. The form letters, which were introduced into evidence and made the basis for counts II through V of the indictment, dealt with matters concerning the adjusting of the insurance claim by Pazos. These letters directly affected the way Morman handled the adjusting of the claim.

III. DISCUSSION

Pazos claims that there is insufficient evidence to sustain his conviction for arson and for the four counts of mail fraud. The Government cross-appeals claiming the district court erred in applying a base offense level of 20, rather than 24 under section 2K1.4 of the Sentencing Guidelines.

A. Is there sufficient evidence to sustain the conviction for arson?

Pazos argues that there is insufficient evidence to sustain his conviction for arson. He claims that he was never shown to have had the opportunity to commit arson in this case. The evidence shows that Pazos went to the restaurant...