U.S. v. Ayewoh, No. 09-1585

• Court: United States Courts of Appeals. United States Court of Appeals (1st Circuit)
• Writing for the Court: DYK
• Citation: 627 F.3d 914
• Parties: UNITED STATES of America, Appellee, v. Ohifuemeh Peter AYEWOH, Defendant-Appellant.
• Docket Number: No. 09-1585
• Decision Date: 13 December 2010

627 F.3d 914

UNITED STATES of America, Appellee,
v.
Ohifuemeh Peter AYEWOH, Defendant-Appellant.

No. 09-1585.

United States Court of Appeals,
First Circuit.

Heard July 28, 2010.
Decided Dec. 13, 2010.

627 F.3d 915

Victor J. Gonzalez-Bothwell, Assistant Federal Public Defender, with whom Joseph C. Laws, Jr., Federal Public Defender, Patricia A. Garrity, Assistant Federal Public Defender, and Thomas J. Trebilcock-Horan, Research and Writing Specialist, were on brief, for appellant.

Charles R. Walsh, Jr., Assistant United States Attorney, with whom Rosa Emilia Rodríguez-Vélez, United States Attorney, Nelson Pérez-Sosa, Assistant United States Attorney, and Luke Cass, Assistant United States Attorney, were on brief, for appellee.

Before THOMPSON, SELYA, and DYK,^* Circuit Judges.

DYK, Circuit Judge.

Appellant Ohifuemeh Peter Ayewoh ("Ayewoh") was convicted of bank fraud in the United States District Court for the District of Puerto Rico. On appeal Ayewoh contends that the government provided insufficient evidence that the defrauded bank, Banco Popular de Puerto Rico ("BPPR"), was insured by the Federal Deposit Insurance Corporation ("FDIC") at the time of the crimes; that Ayewoh knowingly defrauded BPPR; or that Ayewoh made misrepresentations to BPPR. Ayewoh further contends that the prosecutor violated his Fifth Amendment rights by referring to his decision not to testify. We reject these contentions and affirm Ayewoh's conviction and sentence.

I.

In 2005, Ayewoh established OIPA, Inc., as a for profit corporation in Puerto Rico to provide inspection services at public housing projects for the U.S. Department of Housing and Urban Development ("HUD"). Ayewoh was the President of the corporation, and his wife was the Secretary. In OIPA's name, Ayewoh acquired a credit card point-of-sale device ("POS device") and a merchant's account at BPPR. A POS device allows a merchant to accept credit card payments either electronically (by swiping a card's magnetic strip through the device) or manually (by entering a card's number with a keypad).¹ HUD's method of payment for

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OIPA's inspection services included providing Ayewoh with a credit card number and authorizing him to perform manual transactions. However, the government presented evidence at trial that Ayewoh used the POS device to execute numerous unauthorized manual transactions using other credit card numbers, many of which belonged to cards issued by foreign banks. The defense's theory was that Ayewoh innocently believed that the credit card charges made to the POS device were authorized by the cardholders as legitimate investments in a new real estate venture. In order to understand the respective theories, some understanding of industry practice and Ayewoh's own activities is required.

When a credit card transaction executed on a POS device is accepted by the bank that issued the card ("issuing bank"), the payment is deposited directly into the merchant's bank account (at the "acquiring bank"). In the event that a cardholder disputes a transaction, contractual agreements with credit card providers such as Visa and MasterCard permit the issuing bank to initiate a "chargeback" whereby the acquiring bank is liable to the issuing bank for the full amount of the disputed charge. The acquiring bank, in turn, looks to the merchant for reimbursement.

Ayewoh was the only person with access to OIPA's POS device. For several months, Ayewoh, using the POS device, processed relatively small charges, with monthly totals ranging from $1,045 in February 2006, to $9,135 in March 2006. However, in April 2006, OIPA's account received $113,070 in payments from at least sixteen different credit cards. BPPR's records showed numerous instances in which OIPA's POS device attempted to run a large transaction, which was declined, and then it immediately attempted several additional transactions with the same credit card for progressively smaller amounts. Upon detecting this suspicious activity, BPPR froze OIPA's account and sent investigators to question Ayewoh. When asked how he obtained the credit card numbers at issue, Ayewoh claimed he received a list of numbers from a "friend of a friend" in Europe who wanted to invest in a new housing development project Ayewoh had planned for OIPA. Though repeatedly asked, Ayewoh declined to provide information about the project and stated that he did not know the identity of the alleged investor.

Soon thereafter the banks that issued the credit cards in question began notifying BPPR that Ayewoh's March and April charges were unauthorized. BPPR subsequently returned $122,104 in chargebacks to the issuing banks. Of this $122,104, BPPR was only able to recover about $100,000 from Ayewoh, who had withdrawn large amounts before his account was frozen. BPPR suffered a net loss of $19,644.

Ayewoh was indicted by a grand jury in November 2007 on one count of bank fraud, charging a violation of 18 U.S.C. § 1344, and one forfeiture count, charging a violation of 18 U.S.C. §§ 981(a)(1)(C) and 982(a)(2). After a jury trial in October 2008, Ayewoh was convicted and sentenced to thirty months in prison to be followed by five years of supervised release. He was further ordered to pay restitution to BPPR in the amount of its losses. Ayewoh timely appealed.

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II.

Ayewoh does not dispute that the evidence established that he made unauthorized charges to the credit cards at issue. However, Ayewoh contends on appeal that the government failed to prove all of the essential elements of the bank fraud offense. See 18 U.S.C. § 1344. Specifically, he claims that the government failed to present sufficient evidence to permit a rational jury to find beyond a reasonable doubt (1) that BPPR was insured by the FDIC at the time of his crimes; (2) that Ayewoh had the requisite knowledge that he was defrauding BPPR (as opposed to the individual credit card owners); or (3) that he made misrepresentations to BPPR. We review sufficiency claims de novo, "affirm[ing] the conviction if, after assaying all the evidence in the light most amiable to the government, and taking all reasonable inferences in its favor, a rational factfinder could find, beyond a reasonable doubt, that the prosecution successfully proved the elements of the crime." United States v. Wilder, 526 F.3d 1, 7-8 (1st Cir.2008) (quoting United States v. Connolly, 341 F.3d 16, 22 (1st Cir.2003)). We address each claim in turn.

A.

Ayewoh first contends that the government failed to present sufficient evidence at trial to establish that BPPR was insured by the FDIC at the time of his crimes. The bank fraud statute at issue punishes the

knowing[ ] execut[ion] ... [of] a scheme or artifice-(1) to defraud a financial institution; or (2) to obtain any of the moneys ... owned by, or under the custody or control of, a financial institution, by means of false or fraudulent pretenses, representations, or promises.

18 U.S.C. § 1344. The term "financial institution" as used in Title 18 is defined in relevant part as "an insured depository institution (as defined in section 3(c)(2) of the Federal Deposit Insurance Act)." 18 U.S.C. § 20. Section 3(c)(2) in turn defines "insured depository institution" as "any bank or savings association the deposits of which are insured by the [FDIC] pursuant to [the Federal Deposit Insurance Act]." 12 U.S.C. § 1813(c)(2). Thus, under § 1344, the defrauded financial institution's federally-insured status is "a jurisdictional prerequisite as well as a substantive element of the crime," and as such must be proven by the prosecution beyond a reasonable doubt. United States v. Key, 76 F.3d 350, 353 (11th Cir.1996); see United States v. Brandon, 17 F.3d 409, 424 (1st Cir.1994).

The government presented two items of evidence at trial to establish BPPR's federally-insured status: (1) a certificate of FDIC insurance issued to BPPR on January 2, 1999; and (2) testimony by BPPR's record custodian regarding the certificate. The record custodian's testimony was as follows:

Q I would like to show you government's identification number 1.... Without discussing the substance, do you recognize that document?

A Yes, I do.

Q What do you recognize that to be?

A This is the Federal Deposit Insurance Corporation certificate issued to Banco Popular Puerto Rico on January 1999.

Q How do you know it is the same one at Banco Popular?

A My initials are on the back.

Appellant's App. 131-32 (emphasis added).

Ayewoh did not object to admission of the certificate or to the record custodian's testimony, and he did not cross examine the witness. Nonetheless, Ayewoh questioned

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in closing arguments whether the evidence was sufficient to establish that BPPR was federally insured during March and April of 2006, the time frame of his criminal acts, and he subsequently moved for dismissal on these grounds. The district court treated Ayewoh's argument as a motion for acquittal under Fed.R.Crim.P. 29 and denied the motion. The court concluded that, while an FDIC certificate issued in 1999 might by itself be insufficient to permit the jury to find that BPPR was federally insured in 2006, the addition of the record custodian's unobjected "present tense" testimony that the certificate "is" BPPR's FDIC certificate rendered the evidence sufficient. United States v. Ayewoh, 587 F.Supp.2d 378, 381 (D.P.R.2008). That is, the court interpreted the record custodian's statement as "oral testimony that the bank was insured at the time of trial," which, when coupled with an FDIC certificate that predated the offense, could permit a rational jury to infer that BPPR was insured at the time of Ayewoh's crimes. Id.

The FDIC certificate presented in this case, which predated Ayewoh's offenses by seven years, states: "[FDIC] Washington, D.C., Hereby certifies that the deposits of each depositor in Banco Popular de Puerto Rico ... are insured to the maximum amount provided by the Federal Deposit Insurance Act." It further includes the...