United States v. Rivera-Izquierdo

• Decision Date: 06 March 2017
• Docket Number: No. 15-1620,15-1620
• Citation: 850 F.3d 38
• Parties: UNITED STATES of America, Appellee, v. Jorge RIVERA–IZQUIERDO, Defendant, Appellant.
• Court: U.S. Court of Appeals — First Circuit

850 F.3d 38

UNITED STATES of America, Appellee,
v.
Jorge RIVERA–IZQUIERDO, Defendant, Appellant.

No. 15-1620

United States Court of Appeals, First Circuit.

March 6, 2017

David Shaughnessy , Boston, MA, for appellant.

James I. Pearce , Attorney, Appellate Section, Criminal Division, U.S. Department of Justice, with whom Leslie R. Caldwell , Assistant Attorney General, Criminal Division, Sung–Hee Suh , Deputy Assistant Attorney General, Criminal Division, Wifredo A. Ferrer , United States Attorney, Southern District of Florida, Charles R. Walsh , Trial Attorney, Criminal Division, and Luke Cass , Trial Attorney, Criminal Division, were on brief, for appellee.

Before Barron, Stahl, and Lipez, Circuit Judges.

BARRON, Circuit Judge.

In 2014, a jury convicted Jorge Rivera–Izquierdo ("Rivera") of two counts of money laundering, in violation of 18 U.S.C. §§ 1957 and 2. He now appeals. Finding no reversible error, we affirm.

I.

18 U.S.C. § 1957 makes it a felony to "knowingly engage[ ] or attempt[ ] to engage in a monetary transaction in criminally derived property of a value greater than $10,000 and is derived from specified unlawful activity." 18 U.S.C. § 1957(a) (emphasis added). The statute goes on to define "criminally derived property" as follows: "any property constituting, or derived from, proceeds obtained from a criminal offense." Id. § 1957(f)(2).

In 2010, a federal indictment charged Rivera with violating 18 U.S.C. § 1957 and 18 U.S.C. § 2, which punishes aiders and abettors as though they were principals. According to the indictment, Rivera and several co-defendants, "aiding and abetting each other, did knowingly engage or attempt to engage in" two transactions to purchase cars with "criminally derived property of a value greater than $10,000 and is derived from specified unlawful activity."

The indictment alleged that the two vehicle purchases occurred in September 2008 and May 2009, respectively. The "specified unlawful activity" was a fraudulent scheme perpetrated by Rosa Castrillon–Sanchez ("Castrillon"), the daughter of Rivera's common-law wife.¹

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According to the indictment, in September 2008, Rivera and Castrillon used "criminally derived" funds from Castrillon's fraudulent scheme to make a down payment of $20,000 for a 2008 Toyota Sequoia sport utility vehicle. In addition, several months later, Rivera again helped Castrillon purchase a sport utility vehicle—this time, a BMW—by making a "[p]ayment toward" the vehicle's purchase price of approximately $63,418 with funds in excess of $10,000 that were "criminally derived" from Castrillon's fraudulent scheme.

The indictment described Castrillon's fraudulent scheme as follows. Castrillon would tell her victims, most of whom were friends and family members, that a large sum of money—for which she was the ostensible beneficiary—had been "frozen" in a local bank. Castrillon would then request money to help "release" these "frozen" funds. The victims could not afford the large sums of money Castrillon requested. She thus would either complete fraudulent loan applications on behalf of her victims or instruct them to take out loans themselves. Castrillon would then take the cash from those loans. All told, Castrillon defrauded her victims out of millions of dollars.

At trial, Rivera introduced evidence that Castrillon gambled extensively and that she used money taken from her gambling winnings—rather than from the money that she had taken from the fraud victims—to supply the funds that Rivera then used to make the car purchases. Rivera thus contended that, because the money that he used in buying the cars came from the gambling winnings, it was not "criminally derived property." Rivera also argued that he did not know that the funds that he received from Castrillon and that he then used in buying the cars constituted "criminally derived property," even if those funds somehow were so derived. Instead, he argued, he thought that the funds that Castrillon gave him were just funds that she took from her gambling winnings.

In response, the government sought to show at trial that the money from the gambling winnings actually did constitute "criminally derived property." The government did so by putting in evidence that Castrillon had used the money that she took from her fraud victims to fund her gambling. The government also put forward evidence to show that Rivera knew that Castrillon had done so.

After a month-long trial, the jury convicted Rivera of two counts of money laundering, in violation of 18 U.S.C. §§ 1957 and 2. The jury acquitted him, however, of the two other counts that he faced: conspiracy to commit bank and wire fraud in violation of 18 U.S.C. § 1349, and wire fraud, in violation of 18 U.S.C. § 1343.

The District Court sentenced Rivera to 42 months of imprisonment. On appeal, Rivera makes a number of challenges to his convictions. We consider each one in turn.

II.

We start with the challenge that is the primary focus of the parties: Rivera's contention that the District Court erred in instructing the jury regarding one part of § 1957. We find that this challenge has no merit.

A.

The District Court instructed the jury that, just as § 1957(f)(2) provides, the term " ‘criminally derived property’ means any property constituting, or derived from, proceeds obtained from a criminal offense." Rivera does not challenge this instruction. He instead challenges the instruction

850 F.3d 42

that immediately followed, which purported to define the term "proceeds" in the statute's definition of "criminally derived property."

That instruction informed the jury that "proceeds" were: "any property derived from or obtained or retained, directly or indirectly, through some form of unlawful activity, including the gross receipts of such activity." Rivera points out that this instruction tracked, word for word, the definition of "proceeds" that Congress set forth in an amendment to § 1957, which became law in 2009 as part of the Fraud Enforcement and Recovery Act of 2009 ("FERA"), Pub. L. 111–21, 123 Stat. 1617. Rivera contends that, under the Ex Post Facto Clause, this definition of "proceeds" could not lawfully have been applied to his case because the "specified unlawful activity"—Castrillon's fraudulent scheme—had begun years before FERA's passage.²

Rivera goes on to argue that the instruction was more "expansive and elastic" than the pre-FERA definition of "proceeds" that the District Court should have used. To make this argument, Rivera first directs our attention to the companion money-laundering statute to § 1957, which is 18 U.S.C. § 1956.³

Prior to FERA's passage, Rivera notes, that statute—like § 1957 —did not define the word "proceeds." There was thus no reason to conclude that "proceeds" in § 1956 meant anything other than what that word meant in § 1957. This fact matters,

850 F.3d 43

Rivera argues, because, in 2008, in United States v. Santos , 553 U.S. 507, 128 S.Ct. 2020, 170 L.Ed.2d 912 (2008), the Supreme Court narrowly construed the word "proceeds" in § 1956 and thus, according to Rivera, necessarily also set forth the same narrow construction of that word in § 1957.⁴

Specifically, according to Rivera, Santos made clear that "proceeds" meant only the net receipts (or, put otherwise, the profits) of specified unlawful activity and not the gross receipts of that activity. Rivera also contends that Santos made clear that, in any event, "proceeds" (whether gross or net) never means "more than the receipts from the specified criminal activity."⁵

From this premise, Rivera contends that the District Court's instruction, by relying on FERA's later-enacted definition of "proceeds," expanded the scope that Santos had given to that term in § 1956 in two key respects. Unlike the definition of "proceeds" set forth in Santos , Rivera points out, the instruction—tracking FERA—expressly stated both that "proceeds" includes "gross receipts" and that "proceeds" includes: "any property derived from or obtained or retained, directly or indirectly , through some form of unlawful activity." 18 U.S.C. § 1956(c)(9) (as amended) (emphasis added).

In pressing this challenge, Rivera emphasizes that the government first proposed this instruction as to the meaning of "proceeds" only after Castrillon had testified for the defense about her gambling activity. During that testimony, Rivera notes, Castrillon stated that the money that she gave to Rivera to purchase the cars came from her gambling winnings. Rivera contends that the government proposed the FERA-based instruction defining "proceeds" in order to argue to the jury that it was "simply irrelevant whether the money" used to buy the cars was "gambling winnings or fraud proceeds because Rivera was guilty either way." As a result, he argues, the instructional error "went to the very heart of the case." It impermissibly enabled the jury, Rivera contends, to find that Castrillon's gambling winnings constituted the "proceeds" of "specified unlawful activity," even though those winnings were not the actual funds

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