U.S. v. Dubon-Otero, 00-2029.

• Decision Date: 29 May 2002
• Docket Number: No. 00-2030.,No. 00-2029.,00-2029.,00-2030.
• Citation: 292 F.3d 1
• Parties: UNITED STATES, Appellee, v. Luis E. DUBÓN-OTERO, Defendant-Appellant. United States, Appellee, v. Jorge L. Garib-Bazain, Defendant-Appellant.
• Court: U.S. Court of Appeals — First Circuit

Page 1

292 F.3d 1

UNITED STATES, Appellee, v. Luis E. DUBÓN-OTERO, Defendant-Appellant.

United States, Appellee, v. Jorge L. Garib-Bazain, Defendant-Appellant.

No. 00-2029.

No. 00-2030.

United States Court of Appeals, First Circuit.

Heard July 31, 2001.

Decided May 29, 2002.

COPYRIGHT MATERIAL OMITTED

David W. Roman, with whom Brown & Ubarri, Frederick P. Hafetz, Susan R. Necheles, Elizabeth M. Johnson, and Goldman & Hafetz were on brief, for appellant Dubón.

Scott A. Srebnick, with whom Howard M. Srebnick and Black, Srebnick, & Kornspan were on brief, for appellant Garib.

Richard A. Friedman, United States Department of Justice, with whom Guillermo Gil, United States Attorney, and Maria Dominguez and Thomas F. Klumper, Assistant United States Attorneys, were on brief, for appellee.

Before SELYA, Circuit Judge, JOHN R. GIBSON,^* Senior Circuit Judge, and LIPEZ, Circuit Judge.

JOHN R. GIBSON, Senior Circuit Judge.

Luis Dubón-Otero and Jorge L. Garib-Bazain appeal from their convictions, after a joint trial, for conspiring to steal property worth more than $5,000 from an organization receiving more than $10,000 in federal benefits in any one-year period. See 18 U.S.C. §§ 371, 666(a)(1)(A) and (2) (1994). They argue that there was a constructive amendment of the indictment, that there was insufficient evidence to convict them, and that the jury instructions were defective. They also challenge the makeup of their jury and the appointment of the United States Attorney. Garib also appeals his conviction for making false declarations before a grand jury in violation of 18 U.S.C. § 1623 (1994). We affirm.

Advanced Community Health Services (Health Services) was incorporated in the Commonwealth of Puerto Rico in 1987 as a for-profit corporation.¹ Dubón, a lawyer, and Garib, a doctor, were shareholders and directors. Dubón served as legal advisor to Health Services and Garib as the Medical Director of Patient Services. Dr. Yamil Kourí-Perez was a consultant from the Harvard Institute for International Development who, together with Jeanette Sotomayor-Vazquez, the administrative director and Angel Luis Corcino-Mauras, the comptroller, conducted the day-to-day operations of Health Services.

Dubón and Garib were charged with conspiring to use Health Services funds to pay personal expenses and make political payoffs. The principal witness at trial was Corcino, whose testimony painted a picture of Kourí as the primary conspirator. Kourí and Sotomayor were indicted along with Dubón and Garib, but tried separately. They were convicted, and we affirmed in United States v. Sotomayor-Vazquez, 249 F.3d 1 (1st Cir.2001).

In January 1988, Health Services contracted with the Municipality of San Juan to provide services for AIDS patients. The initial contract provided that the Municipality would pay Health Services a flat fee of $3.2 million per year for these services. Because under the contract Health Services became "the exclusive source of AIDS counseling and professional services in San Juan," United States v. Dubón-Otero, No. 97-091, slip op. at 10 (D.P.R. March 3, 2000), federal monies began to find their way to Health Services.

The Government introduced evidence regarding the payment of these federal monies to Health Services, and the ways in which Dubón and Garib diverted these funds. This evidence will be discussed in greater detail below, as we discuss the various arguments made by Dubón and Garib on appeal.

I.

Dubón and Garib argue that the district court erred by allowing a constructive amendment of the indictment. Specifically, they complain the court admitted evidence that the funds the defendants had stolen were federal or public funds, which may have been entrusted to Health Services but never lost their federal or public character. Appellants argue admission of this evidence constituted a constructive amendment of the indictment. They construe the indictment as limiting the charge against them to conspiring to steal only Health Services funds.

A constructive amendment occurs when the charging terms of the indictment are altered, either literally or in effect, by prosecution or court after the grand jury has last passed upon them. An amendment of the indictment is considered prejudicial per se and grounds for reversal of a conviction whether it is brought about by a literal alteration of the words of the indictment, a jury instruction which modifies the offense charged in the indictment, or the admission of evidence of an offense not charged by the grand jury.

United States v. Dunn, 758 F.2d 30, 35 (1st Cir.1985) (internal quotation marks and citations omitted).²

The charging paragraph of the indictment alleged that Dubón and Garib, "as agents of an organization which received benefits in excess of $10,000.00 under a Federal program involving a grant, or other form of Federal assistance," conspired with others to "embezzle, steal, and obtain by fraud, and without authority knowingly convert to the use of a person not the rightful owner, and intentionally misapply property worth at least $5,000.00 owned by such organization, that is, monies in excess of $2,000,000.00 in program funds." (Emphasis added.) (Paragraph Thirty-Seven of the indictment read: "the defendants embezzled, stole and obtained by fraud, in excess of $2,000,000.00 of public funds." (Emphasis added.)) The indictment incorporated Counts Two through Thirty-Four as overt acts, which further described the funds in question as "owned by or under the care, custody, and control of [Health Services]." (Emphasis added.). Under Count I, the indictment charged Dubón and Garib generally with conspiracy to violate § 666. Section 666 seeks, among other things, to punish any agent of an organization receiving more than $10,000 in federal benefits in any one-year period, who "embezzles, steals, obtains by fraud, or otherwise without authority knowingly converts to the use of any person other than the rightful owner or intentionally misapplies property that — (i) is valued at $5,000 or more, and (ii) is owned by, or is under the care, custody, or control of such organization." 18 U.S.C. § 666(a)(1)(A) (emphasis added).³ While the elements of the charged crime have to "appear primarily from the language in the indictment ... common sense suggests that such a citation should not be entirely ignored where, as here, it so plainly reinforces what is implicit in the text." United States v. McLennan, 672 F.2d 239, 243-44 (1st Cir.1982).

Dubón and Garib cite United States v. Pheaster, 544 F.2d 353 (9th Cir.1976), for the proposition that overt acts cannot supply an element missing from the charging paragraph. See id. at 361 ("[A] conspiracy indictment's specification of overt acts cannot be used to supply the allegation of a critical element completely missing from the charging language."). However, Pheaster itself recognized that "reference to the overt acts is appropriate to confirm an otherwise commonsense interpretation of an allegation which is included in the charging language," id. at 362, and thus is of no help to Appellants.

A primary objective of the rule against constructive amendment of indictments is to ensure defendants have notice of the charges they must defend against. United States v. Kelly, 722 F.2d 873, 876 (1st Cir.1983); cf. United States v. Delano, 55 F.3d 720, 729 (2d Cir.1995) ("[W]e have consistently permitted significant flexibility in proof, provided that the defendant was given notice...."). The indictment here put Appellants on notice that they would have to defend against exactly the type of evidence of entrustment of which they now complain. If Dubón and Garib chose not to defend against that type of evidence, that choice does not make the district court's permitting the Government to go forward with such evidence a constructive amendment.

II.

The indictment in this case charged a conspiracy covering the years 1989 to 1994. Dubón and Garib argue the district court erred by refusing to acquit them following trial because the Government failed to prove Health Services received any federal benefits before 1991. They contend that amounts received in 1989 were commercial payments, not federal benefits, and thus their convictions could not be predicated on pre-1991 conduct.⁴ Since there would be no way of assuring the jury did not rely on pre-1991 conduct in reaching its conclusion, the conviction could then not stand. See Yates v. United States, 354 U.S. 298, 312, 77 S.Ct. 1064, 1 L.Ed.2d 1356 (1957) ("[W]e think the proper rule to be applied is that which requires a verdict to be set aside in cases where the verdict is supportable on one ground, but not another, and it is impossible to tell which ground the jury selected."). The Government, on the other hand, argues it proved Health Services received federal benefits beginning in January 1989. In the alternative, the Government argues the Supreme Court's decision in Neder v. United States, 527 U.S. 1, 119 S.Ct. 1827, 144 L.Ed.2d 35 (1999), modified Yates to allow harmless error review, and the error here was indeed harmless.⁵

We review a denial of a Rule 29 motion for acquittal de novo. United States v. Czubinski, 106 F.3d 1069, 1073 (1st Cir.1997). We also review de novo the question of what type of transactions constitute benefits under § 666. See United States v. Peery, 977 F.2d 1230, 1233 n. 2 (8th Cir.1992) ("[D]etermining whether section 666 applies to Peery's conduct is a question of law."). Finally, we review de novo the question of whether the Government presented sufficient evidence at trial to prove Health Services in fact received benefits under § 666, viewing the evidence in the light most favorable to the Government. See United States v. Otero-Mendez, 273 F.3d 46, 50 (1st Cir.2001); United States v. Fischer, 168 F.3d 1273, 1276 n. 7 (11th Cir.1999), aff'd Fischer v. United States, 529 U.S. 667, 120 S.Ct. 1780, 146 L.Ed.2d 707 (2000); United States v. Copeland...