U.S.A. v. Sotomayor-Vazquez

• Citation: 249 F.3d 1
• Decision Date: 07 March 2001
• Docket Number: Nos. 00-1096,YAMIL,BOREL-BARREIR,ARMANDO,00-1279,SOTOMAYOR-VAZQUE,00-1097,s. 00-1096
• Parties: (1st Cir. 2001) UNITED STATES OF AMERICA, Plaintiff, Appellee, v. JEANNETTEKOUR -PEREZ, Defendants, Appellants. Heard
• Court: United States Courts of Appeals. United States Court of Appeals (1st Circuit)

Page 1

249 F.3d 1 (1st Cir. 2001)

UNITED STATES OF AMERICA, Plaintiff, Appellee, v. JEANNETTE SOTOMAYOR-VAZQUEZ, ARMANDO BOREL-BARREIRO, YAMIL KOUR -PEREZ, Defendants, Appellants.

Nos. 00-1096, 00-1097, 00-1279

United States Court of Appeals For the First Circuit

Heard March 7, 2001

Decided April 30, 2001

APPEALS FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO

[Hon. Jose Antonio Fuste, U.S. District Judge]

[Copyrighted Material Omitted]

[Copyrighted Material Omitted]

[Copyrighted Material Omitted] Francisco Rebollo-Casalduc, with whom Nachman, Guillemard & Rebollo, were on brief, for appellant Sotomayor.

Marlene Aponte-Cabrera, for appellant Borel.

Benjamin S. Waxman, with whom Alan S. Ross, Robbins, Tunkey, Ross, Amsel, Raben, Waxman & Eiglarsh, P.A., Rafael F. Castro-Lang, Castro & Castro and Fernando J. Carlo, were on brief, for appellant Kouri.

Richard A. Friedman, Appellate Section, Criminal Division, with whom Guillermo Gil, United States Attorney, Maria Dominguez and Edna C. Rosario, Assistant United States Attorneys, were on brief, for appellee.

Before Torruella, Chief Judge, Coffin, Senior Circuit Judge, and Selya, Circuit Judge.

TORRUELLA, Chief Judge.

After a 58-day jury trial, appellants Jeannette Sotomayor-Vazquez (Sotomayor), Armando Borel-Barreiro (Borel) and Yamil Kouri-Perez (Kouri) were convicted of various counts of conspiracy, embezzlement, money laundering and witness tampering.¹ Kouri was sentenced to 168 months imprisonment, fined $17,500, and ordered to pay $1,394,358 in restitution. Sotomayor was sentenced to 46 months imprisonment, fined $10,000, and ordered to pay $35,689 in restitution. Borel was sentenced to a year and a day of imprisonment and ordered to pay $18,777 in restitution. In these appeals, they raise numerous claims of trial error. For the reasons explained herein, we affirm the convictions in full.

BACKGROUND

We briefly summarize the relevant facts, which we develop in greater detail where necessary.

I. The Embezzlement Scheme

Advanced Community Health Services, Inc. (ACHS) treated persons with AIDS from 1987 to 1994 pursuant to a contract with the City of San Juan, Puerto Rico. From 1990 to 1994, ACHS was a non-profit organization eligible for federal funding, of which it received approximately $15,000,000.

Appellant Kouri was an employee of the Harvard Institute for International Development (HIID). Although Kouri was not officially an employee of ACHS, the Government introduced evidence as to his participation in the development of ACHS and its subsidiary, the AIDS Institute. The evidence showed that he was essentially the director, manager, and representative of those institutions. Appellant Sotomayor was employed as the Operations Manager of ACHS. Appellant Borel was employed by ACHS as a property custodian. He was also the incorporator and purchasing agent of Octagon Corporation (Octagon), one of the outside entities used to divert funds from ACHS.

The principal prosecution witness was co-conspirator Angel Corcino, who had served as the comptroller of ACHS. Corcino explained that Kouri and Sotomayor had diverted funds from ACHS by directing Corcino to make checks payable either to organizations controlled by Kouri² or to individuals associated with ACHS (who were never told that checks were made in their names).³ Kouri and Sotomayor would cash the checks for personal use or to make political contributions. Corcino also testified as to Borel's more limited involvement in the embezzlement.⁴

II. Recantation of a Key Defense Witness

Kouri's defense sought to establish that the payments to Fundacion Panamericana and Medservices had been made in exchange for bona fide services, and that the two companies were not shell organizations used to launder money. To this end, Kouri called Dr.Gloria Ornelas (the director of Fundacion Panamericana), who testified that Panamericana had engaged in legitimate research activity, and had been paid for that activity by ACHS.

The Government later called Ornelas as its first rebuttal witness, at which point she recanted her testimony in full. In rebuttal, she testified that Kouri had induced her to lie, and that the contract between ACHS and Fundacion Panamericana was a sham that had been altered and post-dated to make it appear legitimate. Although Ornelas originally implicated Kouri's lead counsel (Benny Frankie Cerezo) in the fabrication, she later testified that neither Cerezo nor co-counsel Charles Daniels was involved in soliciting false testimony. After both Sotomayor and Borel moved unsuccessfully for a mistrial, Ornelas also testified that neither co-defendant had played any part in the scheme to provide false testimony. The court provided both Sotomayor and Borel the opportunity to cross-examine Ornelas,⁵ and issued a limiting instruction to the jury.

DISCUSSION

We address the many issues raised in these appeals as follows: (1) the sufficiency of the evidence on which Borel and Kouri were convicted of violating 18 U.S.C. §666; (2) evidentiary challenges made by Sotomayor; (3) Kouri's Sixth Amendment claim of attorney conflict-of-interest; (4) the potential prejudicial effect of Ornelas's testimony on Sotomayor and Borel; (5) Kouri and Borel's challenge to the jury instructions; (6) Kouri's sentencing challenge; (7) the admissibility of evidence received by the FBI from the Comptroller General of Puerto Rico; and (8) the legal capacity of the interim U.S. Attorney for the District of Puerto Rico.

I. The Sufficiency of the Evidence as to Kouri and Borel

When a conviction is challenged on sufficiency grounds, we evaluate the evidence "'in the light most agreeable to the prosecution and decide whether that evidence, including all plausible inferences extractable therefrom, enables a rational fact-finder to conclude beyond a reasonable doubt that the defendant committed the charged crime.'" United States v. Ortiz de Jesus, 230 F.3d 1, 5 (1st Cir. 2000) (quoting United States v. Noah, 130 F.3d 490, 494 (1st Cir. 1997)).

A. Kouri

Kouri argues that insufficient evidence was introduced to prove that he was an "agent" of ACHS, one of the elements of an embezzlement conviction under 18 U.S.C. §666. Section 666(d)(1) defines the term "agent" as "a person authorized to act on behalf of another person... and in the case of an organization..., includ[ing] a servant or employee, and a partner, director, officer, manager, and representative." Kouri's basic argument is that, because he was merely an HIID-employed consultant providing advisory services to ACHS, and was not on the ACHS payroll, he cannot fall under the statutory definition of "agent." In other words, he argues that he was not "authorized to act on behalf of ACHS." He also argues that, as an outside consultant, he was not an "agent" of ACHS by virtue of being an ACHS employee, partner, director, officer, manager, or representative. See United States v. Ferber, 966 F. Supp. 90, 100 (D.Mass. 1997) (suggesting that a defendant may qualify as a §666(d)(1) "agent" if he is covered by either aspect of the statutory definition). We need not determine whether Kouri was authorized to act on behalf of ACHS, because we conclude that there was sufficient evidence to show that he was a "director," "manager," or "representative" of ACHS in accordance with the statutory definition.

In Salinas v. United States, 522 U.S. 52, 55-61 (1997), the Supreme Court held that §666 is extremely broad in scope. The Court noted the "expansive, unqualified language" of the statute, as well as the "broad definition of the 'circumstances' to which the statute applies." Id. at 56-57. Although Salinas only addressed which organizations receiving federal funds are covered by §666 generally, and not which persons are covered by §666(d)(1) in particular, we understand the Supreme Court's "expansive" approach to include persons who act as directors, managers, or representatives of covered organizations, even if those persons are not actually employed by the organizations from which they embezzled. As Judge Garza recognized in his dissent in United States v. Phillips, 219 F.3d 404 (5th Cir. 2000), such an expansive definition of "agent" is necessary to fulfill the purpose of §666, i.e., to protect the integrity of federal funds:

[T]he expansive statutory definition [in §666(d)(1)] recognizes that an individual can affect agency funds despite a lack of power to authorize their direct disbursement. Therefore, to broadly protect the integrity of federal funds given to an agency, § 666 applies to any individual who represents the agency in any way, as representing or acting on behalf of an agency can affect its funds even if the action does not directly involve financial disbursement.

Id. at 422 n.3 (Garza, J., dissenting). ⁶As the record in this case clearly shows, an outside consultant with significant managerial responsibility may pose as significant a threat to the integrity of federal funds as a manager actually employed by the agency in question. Furthermore, the inclusion of "employee" in the statutory language as a separate qualification suggests that the definition of agent includes "directors," "managers," and "representatives" who are not technically employees.

The only question remaining is whether the evidence showed that Kouri acted as a "director," "manager," or "representative" of ACHS. Corcino testified at length that all ACHS decisions would be approved by Kouri, that Kouri would meet with city officials on behalf of ACHS, and that Kouri made employee firing and hiring decisions. In short, although Kouri was officially a consultant to ACHS, the jury rationally could have found that he acted as its executive director. Kouri's claim that his opinions were merely advisory and could be ignored by ACHS officials is not supported by any evidence. There was thus sufficient evidence for a rational jury to find beyond a reasonable doubt that Kouri was an "age...