U.S. v. Cruzado-Laureano

• Decision Date: 05 April 2005
• Docket Number: No. 02-2658.,02-2658.
• Citation: 404 F.3d 470
• Parties: UNITED STATES of America, Appellee, v. Juan M. CRUZADO-LAUREANO, Defendant, Appellant.
• Court: U.S. Court of Appeals — First Circuit

404 F.3d 470

UNITED STATES of America, Appellee, v. Juan M. CRUZADO-LAUREANO, Defendant, Appellant.

No. 02-2658.

United States Court of Appeals, First Circuit.

Heard March 11, 2005.

Decided April 5, 2005.

COPYRIGHT MATERIAL OMITTED

Alexander Zeno for appellant.

Thomas Klumper, Assistant U.S. Attorney, with whom H.S. García, U.S. Attorney, and Nelson Pérez-Sosa, Assistant U.S. Attorney and Senior Appellate Attorney, were on brief, for appellee.

Before TORRUELLA, Circuit Judge, COFFIN, Senior Circuit Judge, and LIPEZ, Circuit Judge.

LIPEZ, Circuit Judge.

On January 8, 2001, Juan Manuel Cruzado Laureano, sometimes called "Manny" for short, took office as mayor of Vega Alta, one of Puerto Rico's municipalities. On January 25, 2002, a federal grand jury returned a superseding indictment that charged him with a number of crimes tied to abuse of his public office, including extortion, embezzlement, theft, money laundering, and witness tampering. After a fourteen-day trial, Cruzado was convicted of the following charges: one count of embezzlement from a program receiving federal funds, 18 U.S.C. § 666(a)(1)(A)(i) and (a)(1)(A)(ii); five counts of extortion, id. § 1951(a); five counts of money laundering, id. § 1956(a)(1)(B)(i) and (a)(1)(B)(ii); and one count of tampering with witnesses, id. § 1512(b)(1) and (b)(2). The district court sentenced Cruzado to 63 months' imprisonment on all counts except for the witness tampering, for which Cruzado received 12 months. The sentences were to run concurrently with each other. In this appeal, Cruzado challenges the sufficiency of the evidence supporting his counts of conviction. He also argues that his sentence was erroneously calculated. Although we affirm the convictions, we vacate the sentence and remand for resentencing.

I.

We first provide a brief overview of the case, taking our information from the record as viewed in the light most favorable to the jury's verdict. See United States v. Lara, 181 F.3d 183, 190 (1st Cir.1999). We reserve a fuller discussion of the facts for later sections to which they are particularly relevant.

After graduating from the University of Puerto Rico in 1969, Cruzado taught advanced mathematics at a local high school until 1976. At that point, he moved into the construction business. In 1992, he went into business with his then-wife, a pediatric dentist, who opened a medical practice, incorporated as Oficina Dental Las Colinas, Inc., often referred to by its acronym, Onaden, Inc. From 1992 to 1995, Cruzado handled routine administrative tasks for Onaden, including the opening of a bank account at a local branch of Banco Popular, which would later prove useful to his criminal endeavors. The account, in the name of Oficina Dental Las Colinas, Inc., with Cruzado as the only signatory, was used for such items as lease payments. When Cruzado became mayor, however, he did not disclose the account's existence as required by the Ethics Office for the Commonwealth of Puerto Rico.

From 1996 to 2000, Cruzado ran a check-cashing business, El Cajero Expresso. In November 2000, Cruzado was elected mayor of Vega Alta — his first try at running for public office — as a member of the Popular Democratic Party and was duly sworn into office on January 8, 2001. Upon his election, Cruzado appears to have sold the check-cashing business to his oldest son, who took over day-to-day control. Cruzado, however, retained the last word in business affairs and kept control over the business's checking account.

Within a scant few weeks of becoming mayor, Cruzado began using his official position to embezzle and extort thousands of dollars from the municipality and from contractors who were working for the municipality; he then laundered the money in the Onaden bank account. We now describe the particulars of his criminal activity. (See the chart, attached as an appendix, for a summary of the charges and parties involved.)

A. Cristalería Vega Alta, Inc.

Cristalería Vega Alta is a firm that installs and repairs glass and aluminum doors. Cristalería's owner, Juan Cuevas Rodríguez, first got to know Cruzado through Cristalería's glass work for Cruzado's construction business. Shortly after Cruzado took office in January 2001, he embarked on an extensive program to renovate Vega Alta's city hall, which was in poor shape. Cruzado requested that Cristalería perform some locksmithing and remodeling work on the building, and he asked Cuevas for a price estimate. Cuevas quoted a price of $5,814. Cruzado then told Cuevas to add $2,000 to his quote and give the extra money to him. Fearing that he might be cut off from future work if he disobeyed, Cuevas obliged.

Cristalería's contract provided that the company would be paid from a trust account of the municipality at Banco Santander, whose funds were reserved for making improvements to the city hall. For some reason, there was a delay in the disbursement of those funds. Cruzado spoke to Vega Alta's director of finance, Damien O. Colón Pabón, telling him that Cristalería was getting impatient about the delay and asking whether the municipality could expedite payment. Colón told Cruzado that the municipality's regular checking account might be faster, although disbursing funds from that account would require additional paperwork: price quotes, invoices, and various other papers. Also, when Banco Santander eventually made the disbursement from the trust account, that money would have to be put into the municipality's checking account.

Cruzado then informed Cuevas that, to be paid, he would need to procure some other, competing bids that were higher than Cristalería's. Cuevas complied: he approached two competing glass shops and told them to prepare fake bids that were higher than Cristalería's quote. They agreed to do so, even though they had no intention of submitting a formal bid for the work.

On April 4, 2001, the check from the trust account to pay Cristalería for its work was delivered to Cruzado's office. Colon requested that the mayor deposit the check into the municipality's checking account. The mayor responded that Cristalería would be working for the municipality in the future, and that the check would be used to pay for that work. Colon criticized that plan, reaffirming that the check should go into Vega Alta's checking account and that, if Cristalería needed to be paid for new work, then a new contract should be drawn up and the disbursements could be made on that basis. Cruzado assured Colon that those formalities were not necessary; he would be responsible for retaining the check and making payments to Cristalería.

Cristalería was then paid twice for its work, receiving checks from both of Vega Alta's bank accounts. Specifically, on March 23, 2001, Cuevas picked up a check from city hall, drawn on the municipality's regular checking account, for the inflated price of $8,549 (minus a certain sum that Cuevas owed the municipality in licensing fees). Cuevas deposited that check in Cristalería's bank account. Then, on April 4, 2001, Cuevas received a visit in his office from Cruzado, who came bearing another check, this one also for $8,549 (again, minus certain immaterial deductions) drawn from the trust account. Cruzado told Cuevas to take the check, explaining that Cristalería would earn the double payment by doing more jobs for Vega Alta in the future. The next day, April 5, 2001, Cuevas issued two checks drawn on Cristalería's account, each for $2,000: one made out to "cash," and one made out to "Onaden, Inc.," according to Cruzado's instructions. Cruzado's chauffeur cashed the first check at the check-cashing business of Cruzado's son and gave Cruzado the money, while Cruzado deposited the second check into the Onaden account at Banco Popular.

In early October 2001, Cruzado asked to meet with Cuevas, telling him he had something important to discuss. He claimed that he was being audited, and that he was nervous about the $2,000 check that Cuevas had issued to Onaden Inc. Cruzado told Cuevas that, if asked about the check, he should say that it was a repayment of a loan extended to him by Cruzado before becoming mayor.

B. Sidney Travel and Tours, Inc.

In 2001, Vega Alta was celebrating its 225th anniversary and, at Cruzado's request, the organizers of the annual Puerto Rico Day Parade in New York were going to dedicate that year's parade to the town. As mayor, Cruzado formed a committee, called the Puerto Rico Day Parade Committee, to raise money and arrange for Vega Alta's delegation to travel to New York for the June parade. The committee, which was composed of governmental employees and representatives from local cultural groups, opened a checking account under the name "Centro Cultural de Vega Alta," which had two signatories, neither of whom was Cruzado. The Committee chose a local travel agency, Sidney Travel and Tours, to arrange for airplane tickets, ground transportation, and hotels. Cruzado was the only member of the committee who was handling lodging and hotel accommodations. Sidney Travel's owner, Lilia Alonso Alvarez, had numerous contacts over the next few months with the committee while planning the trip to New York. Between April and June 2001, the committee raised about $160,000: $40,000 given by the municipality's assembly, the rest through private donations. Any money not needed for the trip was to be refunded to the municipality.

The committee put down an initial deposit with Sidney Travel to secure plane and hotel reservations. As the date of the parade neared and the travel arrangements assumed their final form, Alonso calculated that (1) the committee owed Sidney Travel $67,240.90; and (2) Sidney Travel owed the committee a refund of $14,816.74, which could be offset against the larger amount. Alonso informed the committee of her tally. On May 25, 2001, Cruzado arrived at Sidney Travel for a financial reckoning, bearing a blank check from Centro Cultural's account. He was...