United States v. Berroa, Nos. 12-1857

CourtUnited States Courts of Appeals. United States Court of Appeals (1st Circuit)
Writing for the CourtHOWARD, Chief Judge.
Citation856 F.3d 141
Decision Date05 May 2017
Docket Number12-1890,12-1865,12-2029,Nos. 12-1857,13-1385
Parties UNITED STATES of America, Appellee, v. Cesar BERROA; Julio Castro; Geraldo Castro; Raysa Pacheco-Medina; and Glenda Davila, Defendants, Appellants.

856 F.3d 141

UNITED STATES of America, Appellee,
v.
Cesar BERROA; Julio Castro; Geraldo Castro; Raysa Pacheco-Medina; and Glenda Davila, Defendants, Appellants.

Nos. 12-1857
12-1865
12-1890
12-2029
13-1385

United States Court of Appeals, First Circuit.

May 5, 2017


856 F.3d 147

Raymond L. Sanchez Maceira , San Juan, PR, for appellant Cesar Berroa.

Rosa I. Bonini-Laracuente , Bayamon, PR, for appellant Julio Castro.

Robert C. Andrews , with whom James M. Mason , Kathleen L. Taylor , and Robert C. Andrews Esquire P.C. were on brief, for appellant Geraldo Castro.

Raul S. Mariani Franco , San Juan, PR, for appellant Raysa Pacheco-Medina.

David Shaughnessy , Boston, MA, for appellant Glenda Davila.

Tiffany V. Monrose , Assistant United States Attorney, with whom Rosa Emilia Rodríguez-Vélez , United States Attorney, and Nelson Pérez-Sosa , Assistant United States Attorney, Chief, Appellate Division, were on brief, for appellee.

Before Howard, Chief Judge, Selya and Lipez, Circuit Judges.

HOWARD, Chief Judge.

These appeals arise out of a widespread corruption scandal at the Puerto Rico Board of Medical Examiners (the "Board"), the former licensing authority for doctors seeking to practice in Puerto Rico. Cesar Berroa, Julio Castro, Geraldo Castro, Raysa Pacheco-Medina, and Glenda Davila all sought medical licenses but failed to pass the required exams. Undeterred, they attempted to gain certification by obtaining falsified scores. A federal indictment and subsequent jury trial led to convictions on various charges against each defendant.

The appeals raise a litany of claims, and "[a]fter carefully considering each of the defendants' contentions and extensively reviewing the record," we address only those claims that are "worthy of discussion; the remainder lack arguable merit." United States v. Rose , 802 F.3d 114, 117 (1st Cir. 2015).1

We affirm the defendants' convictions for honest-services mail fraud conspiracy, but reverse the convictions for money or property mail fraud and aggravated identity theft, finding the government's theories of prosecution on those counts to be legally deficient.

I. Facts

All five defendants sought admission to practice medicine in Puerto Rico. The admissions process required applicants to pass a pair of gatekeeping tests: a basic exam and a clinical written exam. Applicants who achieved a minimum score of 700 on each of the two tests would then move on to a practical skills exam. Upon passage of the practical skills exam and completion of the remaining requirements, the Board would issue a regular medical license.

The government presented evidence that each of the defendants failed to achieve the required 700 score on at least one of the gatekeeping exams. As a result, they turned to Yolanda Rodríguez, an employee at the Board who had access to applicant files and the ability to create fraudulent score results. The process was decidedly low-tech: Rodríguez used a photocopier to superimpose passing scores of other applicants onto the failing students' exam sheets. She then placed the falsified exam sheets back into the applicants' files.

856 F.3d 148

The trial evidence supported a finding that each of the defendants' files contained a passing score sheet falsified by Rodríguez. Armed with passing scores, the previously unsuccessful applicants completed the remaining requirements and entered practice as medical doctors in Puerto Rico.

On April 20, 2010, a federal grand jury handed up an omnibus 138-count superseding indictment against the five defendants who have brought these appeals and a myriad of other applicants.2 All five defendants were indicted for conspiracy to commit honest-services mail fraud, money or property mail fraud, and aggravated identity theft. The government proceeded on consistent underlying theories for all of the defendants: (1) that they joined in a conspiracy to commit honest-services mail fraud in obtaining their medical licenses; (2) that they committed mail fraud by using the resulting licenses to practice medicine for financial gain; and (3) that they committed aggravated identity theft by issuing prescriptions to patients.

After trial, the jury convicted3 the defendants as follows:

Berroa: mail fraud, honest-services mail fraud conspiracy, and aggravated identity theft;

Julio Castro: mail fraud and honest-services mail fraud conspiracy;

Geraldo Castro: mail fraud and aggravated identity theft;

Pacheco: honest-services mail fraud conspiracy; and

Davila: honest-services mail fraud conspiracy.

II. Sufficiency of the Evidence

The defendants now attack the sufficiency of the evidence supporting their various convictions. These preserved challenges garner de novo review. United States v. Ridolfi , 768 F.3d 57, 61 (1st Cir. 2014). "Applying a familiar standard, we consider whether any rational factfinder could have found that the evidence presented at trial, together with all reasonable inferences, viewed in the light most favorable to the government, established each element of the particular offense beyond a reasonable doubt." Id. (citation omitted).

A. Money or Property Mail Fraud

Berroa, Julio Castro, and Geraldo Castro appeal their convictions for mail fraud in violation of 18 U.S.C. § 1341. This provision proscribes use of the mails in furtherance of "any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses." Because we find insufficient evidence to support the conclusion that the defendants obtained money or property "by means of" their alleged fraud, we reverse these convictions.

The Supreme Court has squarely held that the mail fraud statute is "limited in scope to the protection of property rights." McNally v. United States , 483 U.S. 350, 360, 107 S.Ct. 2875, 97 L.Ed.2d 292 (1987). Before this ruling, the statute had been used to prosecute "various forms of corruption that deprived victims of 'intangible rights' unrelated to money or property." Cleveland v. United States , 531 U.S. 12, 18, 121 S.Ct. 365, 148 L.Ed.2d 221 (2000). McNally expressly curtailed this use of § 1341. Congress later passed a new statute, 18 U.S.C. § 1346, designed to cover one of the intangible rights recognized in the pre-McNally caselaw, namely, "the intangible right of honest services." Cleveland , 531 U.S. at 19-20, 121 S.Ct. 365

856 F.3d 149

(quoting 18 U.S.C. § 1346 ). Here, the relevant counts of the indictment allege a scheme to deprive the victims of money or property. Accordingly, we restrict our inquiry to § 1341 for the time being.

The Supreme Court has broadly and unequivocally instructed that "[s]tate and municipal licenses" generally "do not rank as 'property,' " sufficient to support a conviction under § 1341. Id. at 15, 121 S.Ct. 365. In Cleveland , the defendants were alleged to have made false statements in applications for state gaming licenses. The Court began its analysis by explaining that any interest the state had in the licenses was "regulatory," as opposed to proprietary, in nature. Id. at 20, 121 S.Ct. 365. It noted the government's concession that many other state licenses, including "medical licenses," are "purely regulatory." Id. at 22, 121 S.Ct. 365. But the Court did not rest solely on the fact that the government's theory of prosecution "stray[ed] from traditional concepts of property." Id. at 24, 121 S.Ct. 365. Rather, it went on to note that the government's preferred reading of the statute would result in "a sweeping expansion of federal criminal jurisdiction in the absence of a clear statement by Congress." Id. Indeed, "[e]quating issuance of licenses ... with deprivation of property would subject to federal mail fraud prosecution a wide range of conduct traditionally regulated by state and local authorities."Id. In short, Cleveland squarely precluded the government from seeking mail fraud convictions on the theory that the defendants defrauded the Board out of some property interest in the medical licenses.

Presumably cognizant of this restriction, the government charged a scheme to "depriv[e] unsuspecting consumers of health care services, health care benefit programs and health care providers, of property and money through the defendant[s'] knowing[ ] use of [their] fraudulently obtained medical license[s]." More specifically, the defendants allegedly used their fraudulent licenses to obtain payment for medical services and issue prescriptions. They continued to write prescriptions at least until about two to three years after receiving their licenses.

In its effort to circumvent Cleveland , the government runs headlong into another Supreme Court precedent. Loughrin v. United States , ––– U.S. ––––, 134 S.Ct. 2384, 189 L.Ed.2d 411 (2014), involved a prosecution under the bank fraud statute, which prohibits schemes to obtain bank property "by means of false or fraudulent pretenses." 18 U.S.C. § 1344(2). The Court described the statute's "by means of" language, also present in § 1341, as a "textual limitation" on its scope. Loughrin , 134 S.Ct. at 2393. This limitation assuaged federalism concerns about infringing on state...

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63 practice notes
  • United States v. Cadden, Nos. 17-1694
    • United States
    • United States Courts of Appeals. United States Court of Appeals (1st Circuit)
    • July 9, 2020
    ...or [was] capable of influencing’ " its target's decision. Id. (quoting Appolon, 715 F.3d at 368 ); see also United States v. Berroa, 856 F.3d 141, 149-50 (1st Cir. 2017) (explaining that, under the mail fraud statute, the defendant's fraud must be "the mechanism naturally inducing" the vict......
  • United States v. Stepanets, No. 19-1471
    • United States
    • United States Courts of Appeals. United States Court of Appeals (1st Circuit)
    • February 26, 2021
    ...the evidence failed supportably to show that he "obtained money or property ‘by means of’ [the] alleged fraud," United States v. Berroa, 856 F.3d 141, 148 (1st Cir. 2017) (quoting 18 U.S.C. § 1341 ), and he contends that Berroa itself supports that contention. But, there is no merit to this......
  • United States v. Valdés-Ayala, No. 16-1002
    • United States
    • United States Courts of Appeals. United States Court of Appeals (1st Circuit)
    • August 15, 2018
    ...Id. at 499, 501.A few years later, we examined what it means to use the means of identification of another. United States v. Berroa, 856 F.3d 141, 155 (1st Cir. 2017). In that case, the defendants had obtained their medical licenses after falsifying exam result data and then wrote prescript......
  • United States v. Facteau, Criminal No. 15-cr-10076-ADB
    • United States
    • United States District Courts. 1st Circuit. United States District Courts. 1st Circuit. District of Massachusetts
    • September 14, 2020
    ...to Defendants' good faith defense to the fraud charges on which they were acquitted. [ECF No. 497 at 52]; United States v. Berroa, 856 F.3d 141, 160 (1st Cir. 2017) (finding no misconduct in refusing to immunize a witness where their testimony would have been of minimal value and where othe......
  • Request a trial to view additional results
63 cases
  • United States v. Cadden, Nos. 17-1694
    • United States
    • United States Courts of Appeals. United States Court of Appeals (1st Circuit)
    • July 9, 2020
    ...or [was] capable of influencing’ " its target's decision. Id. (quoting Appolon, 715 F.3d at 368 ); see also United States v. Berroa, 856 F.3d 141, 149-50 (1st Cir. 2017) (explaining that, under the mail fraud statute, the defendant's fraud must be "the mechanism naturally inducing" the vict......
  • United States v. Stepanets, No. 19-1471
    • United States
    • United States Courts of Appeals. United States Court of Appeals (1st Circuit)
    • February 26, 2021
    ...the evidence failed supportably to show that he "obtained money or property ‘by means of’ [the] alleged fraud," United States v. Berroa, 856 F.3d 141, 148 (1st Cir. 2017) (quoting 18 U.S.C. § 1341 ), and he contends that Berroa itself supports that contention. But, there is no merit to this......
  • United States v. Valdés-Ayala, No. 16-1002
    • United States
    • United States Courts of Appeals. United States Court of Appeals (1st Circuit)
    • August 15, 2018
    ...Id. at 499, 501.A few years later, we examined what it means to use the means of identification of another. United States v. Berroa, 856 F.3d 141, 155 (1st Cir. 2017). In that case, the defendants had obtained their medical licenses after falsifying exam result data and then wrote prescript......
  • United States v. Facteau, Criminal No. 15-cr-10076-ADB
    • United States
    • United States District Courts. 1st Circuit. United States District Courts. 1st Circuit. District of Massachusetts
    • September 14, 2020
    ...to Defendants' good faith defense to the fraud charges on which they were acquitted. [ECF No. 497 at 52]; United States v. Berroa, 856 F.3d 141, 160 (1st Cir. 2017) (finding no misconduct in refusing to immunize a witness where their testimony would have been of minimal value and where othe......
  • Request a trial to view additional results

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