U.S. v. Jimenez

Decision Date14 January 2008
Docket NumberNo. 05-4106.,No. 05-4098.,No. 05-4157.,No. 05-4107.,No. 05-4099.,05-4098.,05-4099.,05-4106.,05-4107.,05-4157.
Citation513 F.3d 62
CourtU.S. Court of Appeals — Third Circuit
PartiesUNITED STATES of America v. Fernando JIMENEZ, Appellant in Case No: 05-4098 United States of America v. Ana Martell, Appellant in Case No: 05-4099 United States of America v. Kathy Giunta, Appellant in Case No: 05-4106 United States of America v. Luis Nieves, Appellant in Case No: 05-4107 United States of America v. Rene Abreu, Appellant in Case No: 05-4157.

Christopher J. Christie; Esq., George S. Leone, Esq., Glenn J. Moramarco, Esq. (argued), United States Attorney Office, Newark, NJ, for Appellee.

Before: SMITH, NYGAARD, and HANSEN,* Circuit Judges.

OPINION

HANSEN, Circuit Judge.

At the conclusion of a three-and-a-half month jury trial, Fernando Jimenez, Ana Martell, Kathy Giunta, Luis Nieves, and Rene Abreu were each convicted of one or more counts of a 47-count superseding indictment stemming from eight related conspiracies involving inter alia mortgage fraud and bank fraud. The Appellants each appeal their convictions and sentences in this consolidated appeal. We will affirm.

I. Background

After a jury verdict, we review the facts in the light most favorable to the verdict. Rene Abreu owned and/or controlled several companies related to the real estate industry. Mortgage Pros, Inc. was a mortgage brokerage company that secured residential and commercial loans from financial institutions for clients attempting to buy a house or commercial property; Abreu Real Estate was a realty company; and RLA Homes, Inc. managed the development, construction, and sale of realty.

Fernando Jimenez and Kathy Giunta worked for Mortgage Pros as loan processors. Ana Martell was the bookkeeper for Mortgage Pros as well as for other of Abreu's companies. Many of Mortgage Pros' customers lacked sufficient income, assets, or employment history to qualify for a residential mortgage. When customers failed to qualify for a mortgage, Martell, at Abreu's direction, fabricated federal tax returns, inflated the income listed on existing W-2 forms, or provided false pay stubs for the customer. Martell, Jimenez, and Giunta each participated in completing false forms needed to qualify the customer for a mortgage, including Verification of Employment WOE) forms, HUD-1 settlement statements, and sales contracts. Mortgage Pros charged and received a fee, generally paid in cash, in exchange for providing the false documents. The creation of false documents was common knowledge among the Mortgage Pros employees, many of whom assisted on occasion in destroying records at Abreu's direction.

Some of Mortgage Pros' customers, who relied on the false documentation to obtain a mortgage they could not afford, eventually defaulted on their mortgages and lost their homes, resulting in losses to the lenders as well. The indictment charged Abreu, Martell, Jimenez, and Giunta with conspiring to commit, and committing, mail fraud for submitting via the mail false loan applications related to the residential mortgage loan fraud scheme, which occurred between November 1992 and July 1997. They each were convicted by the jury of the conspiracy charge. Various members of the conspiracy were charged with numerous substantive mail fraud counts based on particular loan files. The jury returned convictions on most, of the substantive counts, but acquitted on some of those counts.

The commercial mortgage fraud conspiracy operated in a manner similar to the residential mortgage fraud conspiracy and allegedly involved Abreu, Martell, Giunta, and Luis Nieves, who was a senior vicepresident in the commercial loan department at Hudson United Bank (HUB). Nieves managed Abreu's commercial accounts at HUB. Abreu, Martell, and Giunta submitted commercial loan applications containing false and forged information for Mortgage Pros' commercial customers as well as for Abreu's own companies. Nieves approved the commercial loan applications, allegedly acting with the knowledge that the documentation contained false information. The jury convicted Abreu, Martell, and Giunta of the conspiracy and the substantive mail fraud charges related to the commercial loan conspiracy but acquitted Nieves of those charges.

The bank fraud conspiracy charge stems from a check kiting scheme carried on by Abreu and his employees involving several accounts maintained by Abreu's companies with HUB. Abreu transferred large amounts of money between his 30 accounts at HUB by writing checks from one account to another. Nieves, as senior vicepresident of the commercial department at HUB, authorized HUB to cover Abreu's overdrafts, and routinely allowed Abreu to cover an overdraft in one account with `a check drawn on another HUB account that likewise lacked sufficient funds to cover the check. Nieves also approved overdrafts that exceeded the amount he was authorized to approve. During a one-year period, there were 280 days in which an overdraft existed in at least one of Abreu's accounts that exceeded $500,000; on 21 days during that time frame, the overdraft exceeded $1 million.

HUB's upper management reviewed reports generated by HUB's computer system that reported any individual account with a negative balance of at least $5,000 that remained overdrawn for more than five days. Martell carried out the check kiting scheme, writing the checks between accounts and ensuring the money moved between accounts in a timely manner so as to avoid detection on HUB's 5-day overdraft management report. HUB's executive vice-president learned of the overdrafts in June 2001, and he contacted Abreu about the $1.3 million overdraft that existed on June 15, 2001. It took Abreu until July 9, 2001, to repay the full overdraft amount, much of which came from HUB's actions of applying funds from Abreu-related accounts to the overdraft balance. The jury found Abreu, Martell, and Nieves each guilty of the bank fraud conspiracy charge, which lasted from April 1996 through June 2001.

Abreu, Martell, and Giunta were also charged with conspiring to structure cash transactions to avoid the bank's filing of currency transaction reports, required for transactions of $10,000 or more in cash. Over a five-year period, Abreu deposited over $2 million in cash in various accounts held at HUB, with no single deposit exceeding $10,000. Martell and Giunta also deposited cash into their personal accounts and wrote corresponding checks to Abreu. All three were convicted of the conspiracy charge and some of the substantive structuring charges.

Following the jury verdict, the defendants, filed a joint motion for a judgment of acquittal or, in the alternative, a new trial. The district court denied both motions.1

Abreu was convicted of 20 counts and was sentenced to 87 months of imprisonment. He raises the following issues on appeal: 1) the district court's refusal to remove a juror for cause; 2) whether bank fraud premised on check kiting requires the involvement of more than one bank; 3) jury instructions related to the check kiting count; 4) the district court's limitations on cross-examination; 5) whether documentary evidence introduced against him violated the Confrontation. Clause or the Federal Rules of Evidence; and 6) the reasonableness of his sentence.

Jimenez was charged in only two of the 47 counts in the superceding indictment and was convicted of both. He was sentenced to six months of imprisonment. On appeal, he challenges: 1) the district court's refusal to sever his trial from the other codefendants; 2) the sufficiency of the evidence to support the substantive mail fraud count; 3) evidentiary rulings; 4) alleged prosecutorial misconduct; and 5) he joins the arguments advanced by the other Appellants as applicable to him, particularly Abreu's juror challenge and the challenge to the documentary evidence.

Martell was convicted of eleven counts and was sentenced to 30 months of imprisonment. She joins each of the issues raised by Abreu and separately appeals the district court's calculation of her sentence.

Giunta was convicted of twelve counts. She was sentenced to 24 months of imprisonment and ordered to pay $499,563.27 in restitution to several banks. On appeal, she joins Abreu's arguments related to the district court's refusal to strike a juror for cause and the Confrontation Clause and evidentiary issues related to the documentary evidence. She also appeals her sentence.

Nieves was convicted of one count of conspiracy to commit bank fraud. He was sentenced to 40 months of imprisonment and fined $10,000. On appeal, he joins Abreu's arguments related to: the district court's refusal to strike a juror for cause; whether the conduct involved violated the bank fraud statute; the jury instructions related to the bank fraud count; Confrontation Clause and evidentiary rulings; and the limitations imposed on cross-examination. He also appeals his sentence as unreasonable.

II. Common Challenges on Appeal
A. Refusal to Strike a Juror for Cause

The Appellants each challenge the district court's refusal to strike a prospective juror for cause. On the fourth day of jury selection, Jimenez's attorney brought to the district court's attention an "incident" that had occurred earlier that morning in the women's restroom, in which Juror 14 exhibited what Jimenez's attorney believed to be an aggressive attitude toward her about who was next in line. During the subsequent voir dire of Juror 14, she...

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