United States v. Falcon-Nieves

• Docket Number: 20-2189,20-2190
• Decision Date: 23 August 2023
• Parties: UNITED STATES Appellee, v. IVONNE M. FALCON-NIEVES and MARIELIS FALCON-NIEVES, Appellants.
• Court: U.S. Court of Appeals — First Circuit

1

UNITED STATES Appellee,
v.
IVONNE M. FALCON-NIEVES and MARIELIS FALCON-NIEVES, Appellants.

Nos. 20-2189, 20-2190

United States Court of Appeals, First Circuit

August 23, 2023

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO [Hon. Pedro A. Delgado-Hernandez, U.S. District Judge]

Martin G. Weinberg, with whom Kimberly Homan was on brief, for appellant Ivonne M. Falcon-Nieves.

Kendys Pimentel-Soto, with whom Kendys Pimentel-Soto Law Office LLC, Francisco Adams-Quesada, and Francisco J. Adams-Quesada Law Office were on brief, for appellant Marielis Falcon-Nieves.

Timothy R. Henwood, Assistant United States Attorney, with whom W. Stephen Muldrow, United States Attorney, Mariana E. Bauza-Almonte, Assistant United States Attorney, Chief, Appellate Division, and Thomas F. Klumper, Assistant United States Attorney, were on brief, for appellee.

Before Barron, Chief Judge, Howard and Montecalvo, Circuit Judges.

2

BARRON, Chief Judge.

These consolidated appeals concern challenges by two sisters, Ivonne Falcon-Nieves ("Ivonne") and Marielis Falcon-Nieves ("Marielis"), to their convictions on various federal charges that relate to alleged public corruption in the Commonwealth of Puerto Rico. The sisters contend that the convictions are not supported by sufficient evidence and so must be reversed. They argue in the alternative that the convictions must be vacated because their motions for severance of their trials from that of one of their codefendants were wrongly denied. Ivonne also contends that one of her convictions for conspiracy must be vacated due to a prejudicial variance.

The government contends that the evidence suffices to support all of the sisters' convictions, such that none may be reversed. It also rejects Ivonne's contention regarding the prejudicial variance. But the government concedes that it was error to deny the sisters' severance motions and that, as a result, their convictions must be vacated.

We agree with the government that the evidence suffices to support Ivonne's conviction on one of the three counts of honest services wire fraud with which she was charged, her convictions for conspiracy to commit honest services wire fraud or federal program bribery, and Marielis's conviction for aiding and abetting extortion. But we reject the government's arguments that the evidence suffices to support Ivonne's conviction for federal

3

program bribery, her other two convictions for honest services wire fraud, and her conviction for aiding and abetting extortion. Accordingly, we reverse those convictions. We also agree with Ivonne that one of her conspiracy convictions must be vacated due to a prejudicial variance. Finally, we vacate the rest of the convictions because we do agree with the parties that it was error for the District Court to deny the sisters' severance motions.

I.

On December 2, 2015, a grand jury in Puerto Rico issued a twenty-five-count indictment against several government officials and their associates that alleged public corruption in Puerto Rico. Among those indicted were the appellants: Ivonne, the Vice President of Administration and Finance for the Puerto Rico Aqueduct and Sewer Authority ("AAA"),^[1] and her sister, Marielis.

The indictment charged Ivonne with seven counts that centered on her alleged use of her position at AAA to aid private parties seeking government contracts. The counts were for: conspiracy to commit honest services wire fraud or federal program bribery, in violation of 18 U.S.C. § 371 (Count One); conspiracy

4

to commit honest services wire fraud, in violation of 18 U.S.C. § 1349 (Count Six); honest services wire fraud, in violation of 18 U.S.C. §§ 1343 and 1346 (Counts Seven, Eight, and Nine); federal program bribery, in violation of "18 U.S.C. §§ 666(a)(1)(B) and 2" (Count Thirteen); and aiding and abetting in the commission of extortion, in violation of "18 [U.S.C.] Section 1951(a) and 2" (Count Seventeen).

The indictment charged Marielis with one count of aiding and abetting extortion, in violation of "18 [U.S.C.] Section 1951(a) and 2" (Count Seventeen). The charge concerned her alleged role in orchestrating payments for one of AAA's contractors.

Prior to, throughout, and after the trial, Ivonne and Marielis requested that their cases be severed under Federal Rule of Criminal Procedure 14 from the cases of several of their codefendants, including that of Glenn Rivera ("Rivera"), a former employee of the Puerto Rico House of Representatives ("House"). Ivonne and Marielis argued that severance was proper because the indictment charged a number of their codefendants, including Rivera, with participation in a fraud against the House in which, according to the indictment, neither Ivonne nor Marielis was implicated.^[2] See Fed. R. Crim. P. 14(a).

5

The District Court denied Ivonne and Marielis's requests for severance. A jury found Ivonne and Marielis guilty on all the counts with which they were charged. The sisters thereafter moved for judgments of acquittal -- as they had at the close of all the evidence and at the close of the government's case. The sisters did so in part on the ground that the evidence presented at trial was insufficient to support their convictions on any of the counts for which they had been charged.

The District Court denied Ivonne's and Marielis's motions for judgments of acquittal. Ivonne and Marielis timely appealed.

II.

Ivonne and Marielis each argue on appeal that their convictions must, at a minimum, be vacated because the District Court erroneously denied their requests for severance under Federal Rule of Criminal Procedure 14 from Rivera's trial. The government concedes as much based on our decision in United States v. Martinez, 994 F.3d 1, 11-17 (1st Cir. 2021), in which we vacated the convictions of one of Ivonne and Marielis's codefendants in the underlying action, former administrator of the Puerto Rico Workforce Development Administration ("ADL") Sally Lopez Martinez ("Lopez"). See id.

We vacated Lopez's convictions in Martinez on the ground that the District Court improperly denied Lopez's motions for

6

severance from being tried with Rivera. See id. We explained that denying Lopez's request for severance allowed the jury in her case to be "exposed to days of detailed evidence regarding" her codefendants' activities pertaining to corruption in the House, even though much, if not all, of that evidence would have been inadmissible at a separate trial of Lopez herself, given that she was not alleged to have been involved in the corruption related to the House. Id. at 14-15.

We agree with Ivonne, Marielis, and the government that the reasoning on which Martinez relied in vacating the convictions in that case applies equally to Ivonne's and Marielis's cases. Thus, Ivonne's and Marielis's convictions must be vacated due to the District Court's denial of the sisters' requests for severance. As a result, we need not reach many of the sisters' other arguments for vacating their convictions. Nor need we address their challenges to their sentences.

We do still need to address, however, their contentions that their convictions must be reversed -- rather than merely vacated -- because their convictions are not supported by sufficient evidence. And we also need to address Ivonne's related argument that she was prejudiced by a variance as to one of her conspiracy convictions. We next take up those arguments.

7

III.

In reviewing a sufficiency challenge, "the relevant question is whether, after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt." United States v. Woodward, 149 F.3d 46, 56 (1st Cir. 1998) (quoting Jackson v. Virginia, 443 U.S. 307, 319 (1979)). Our review of preserved sufficiency challenges is de novo, see United States v. Millan-Machuca, 991 F.3d 7, 17 (1st Cir. 2021), while we review sufficiency challenges raised for the first time on appeal for "clear and gross injustice," United States v. Ponzo, 853 F.3d 558, 580 (1st Cir. 2017) (quoting United States v. Foley, 783 F.3d 7, 12 (1st Cir. 2015)).

We will begin with the sufficiency challenges that Ivonne makes to her convictions on the substantive counts for federal program bribery and honest services wire fraud -- which are Counts Seven, Eight, Nine, and Thirteen. We will then address Ivonne's sufficiency challenges to her conspiracy convictions, which are Counts One and Six. Along the way, we will also address the prejudicial-variance-based challenge that she makes to her conviction on Count One. Finally, we will address the challenges that Marielis and Ivonne raise with respect to their convictions on Count Seventeen, which is for aiding and abetting extortion.

8

A.

We begin with Ivonne's sufficiency challenge to her conviction on Count Thirteen for federal program bribery under "§§ 666(a)(1)(B) and 2." This count alleges that businessman and political operator Anaudi Hernandez Perez ("Hernandez") "gave [Ivonne] things of value to influence and reward [Ivonne] for the use of her official position to assist [Hernandez] and his associates by providing favorable treatment for [Hernandez] and his associates in official matters before AAA."

Ivonne takes aim in part at the sufficiency of the evidence as to the "jurisdictional" element of § 666(a)(1)(B). Her focus is on the element that requires the government to prove beyond a reasonable doubt that the "agent" accused of a violation under this provision works for an "organization, government, or agency [that] receives, in any one year period, benefits in excess of $10,000 under a Federal program involving a grant, contract, subsidy, loan, guarantee, insurance, or other form of Federal assistance," § 666(b); see United States v. Bravo-Fernandez, 913 F.3d 244, 247 (1st...