United States v. Cassiere

UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT

No. 92-2073

UNITED STATES,

Appellee,

v.

JOSEPH N. CASSIERE,

Defendant, Appellant.

No. 92-2074

UNITED STATES,

Appellee,

v.

JANET M. PEZZULL0,

Defendant, Appellant.

No. 92-2182

UNITED STATES,

Appellee,

v.

JANET DOLBER,

Defendant, Appellant.

APPEALS FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. William G. Young, U.S. District Judge]

Before

Selya, Circuit Judge,

Friedman,* Senior Circuit Judge,

and Cyr, Circuit Judge.

Robert B. Mann with whom Mann & Mitchell was on brief for

appellant Joseph Cassiere.
John A. MacFadyen for appellant Janet M. Pezzullo.

Kenneth J. Fishman with whom Peter Charles Horstmann, Susan J.

Naughton and Bailey, Fishman & Leonard were on brief for appellant

Janet Dolber.
Margaret R. Hinkle, Special Assistant United States Attorney,

with whom A. John Pappalardo, United States Attorney, was on brief for

appellee.

September 16, 1993

*Of the Federal Circuit, sitting by designation.

Friedman, Senior Circuit Judge.

In these consolidated appeals the three defendants

challenge their convictions of wire fraud and conspiracy to

commit that offense on various grounds. The fraud involved an

intricate and sophisticated scheme involving a technique known as

a "land flip," under which real property is purchased for a low

price, immediately resold at a much higher price to a straw or

fictitious buyer, and the higher resale price is used as the

basis for obtaining a mortgage loan that finances the entire

transaction. One of the defendants also challenges her sentence.

We affirm.

I.

A jury in the United States District Court for the

District of Massachusetts convicted the defendants Cassiere and

Pezzullo of fifteen counts of wire fraud and aiding and abetting

wire fraud, and the defendant Dolber of thirteen counts of that

crime (it acquitted her on one count), in violation of 18 U.S.C.

1343 (1988), and all three defendants of one count of

conspiracy to commit wire fraud, in violation of 18 U.S.C. 371

(1988). The district court sentenced Cassiere to 46 months

imprisonment, followed by five years of supervised release,

Pezzullo to 24 months imprisonment, followed by three years of

supervised release, and Dolber to 39 months imprisonment,

followed by three years of supervised release. Each defendant

also was ordered to make restitution.

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The substantive crimes for which the three

defendants were convicted involved their participation in a

scheme to defraud six mortgage lenders through a series of

fifteen land flips, in all but one of which the two sales of the

property were closed on the same day, often the second

immediately following the first. Cassiere was the senior partner

of Pezzullo in a two-person law firm that handled all the

closings in the land flip transactions. Dolber was a real estate

appraiser, whose appraisals of the properties were relied on by

the mortgage lenders in making their loans.

Rate Line was a mortgage broker which, for a fee,

took loan applications and referred them to lenders. Thomas

DeNunzio owned Rate Line, and he and his employee loan broker,

Glenn Monteiro, controlled Rate Line. DeNunzio and Monteiro

planned and organized the fraudulent scheme, under which one of

three straw corporations they controlled (Half & Half, Inc., ZBA

Corp. and Chantel, Inc.) purchased foreclosed property for cash

and resold the property on the same day to straw buyers at a much

higher price. Mortgage loan funds received from the lending

institutions were used to pay the corporation controlled by Rate

Line and that corporation then paid for the first sale. The

balance then went to DeNunzio and Monteiro, channeled through

Rate Line.

DeNunzio and Monteiro pleaded guilty to another

indictment and they both testified for the government in the

present case. They described in detail how the scheme operated,

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the roles Cassiere, Pezzullo, and Dolber played in the scheme,

andDeNunzio's andMonteiro's relationshipwith thethree defendants.

An example of the operation of the scheme was as

follows:

On April 12, 1991, Half & Half Corporation closed

the purchase of property at 104 Menlo Street for $102,900.

Moments later Half & Half closed the sale of the property to Fred

Strangis, one of the dummy purchasers, for $228,000. Dolber

previously had appraised the property at $228,000. Based on this

appraisal and Strangis' certification that he would reside at 104

Menlo Street, Rate Line gave Strangis a mortgage loan of

$182,400, which was eighty percent of the final sale price. Rate

Line, in turn, sold Strangis' mortgage to CenTrust Mortgage

Corporation. Neither Half and Half nor Strangis brought a down

payment to the double closing. Instead, Monteiro provided a

cashier's check for the twenty percent down payment ($45,600) the

lender required the purchaser to make.

Cassiere and Pezzullo recorded both deeds and

disbursed the funds they had received from the lender. They paid

the original owner the $102,900 owed by Half & Half, they paid

the closing costs, including attorneys' fees due them, and gave

the balance to Monteiro and DeNunzio.

Cassiere, assisted by Pezzullo, was the closing

attorney in each of the double closings. They represented the

interests of the lending institution that was providing, through

Rate Line, the mortgage loan to the final buyer. The closing

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attorney serves as "the eyes and ears" of the lending institution

at the closing. The lenders expected the attorneys to alert them

to anything unusual. Neither Cassiere nor Pezzullo notified any

of the six lenders that their law firm was closing twice on the

same property on the same day at substantially different prices.

Dolber was the real estate appraiser in thirteen of the flips.

The lending institutions relied on her appraisals to determine

the value of the properties upon which they were making loans.

The appraisal alerts the lenders to the property's condition and

allows them to determine their ability to recoup their investment

should the borrower default on the mortgage.

The lenders generally made loans of the lesser of

eighty percent of the sale price or fair market value of the

property. The six lenders made mortgage loans totalling more

than $2.6 million on the properties that were the subject of the

land flips involved in this case.

Ten of the thirteen appraisals Dolber made of the

properties involved in the land flips were for an amount

identical to the final sale price, which ranged from $160,000 to

$231,000. (The original sale prices of those properties ranged

from $42,000 to $132,000.) Two of the three other appraisals

were for $1,000 higher than the second sale price; the third was

for $2,000 higher.

II. Sufficiency of the Evidence

Pezzullo and Dolber, but not Cassiere, challenge the

sufficiency of the evidence to support their convictions.

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In reviewing the record in such a challenge, we

"look[] to the evidence as a whole, including reasonable

inferences drawn from it, in the light most favorable to the

verdict, to determine whether a rational trier of fact could have

found the defendant guilty beyond a reasonable doubt." United

States v. Plummer, 964 F.2d 1251, 1254 (1st Cir.), cert. denied,

113 S. Ct. 350 (1992). "We do not weigh witness credibility, but

resolve all credibility issues in favor of the verdict. The

evidence may be entirely circumstantial and need not exclude

every reasonable hypothesis of innocence; that is, the factfinder

may decide among reasonable interpretations of the evidence."

United States v. Batista-Polanco, 927 F.2d 14, 17 (1st Cir. 1991)

(citations omitted). Thus viewed, the record supports the

convictions.

A. The Wire Fraud Convictions

To prove wire fraud the government must show: 1) a

scheme to defraud by means of false pretenses, 2) the defendant's

knowing and willful participation in the scheme with the intent

to defraud, and 3) the use of interstate wire communications in

furtherance of the scheme. United States v. Serrano, 870 F.2d 1,

6 (1st Cir. 1989). To support convictions of aiding and abetting

wire fraud, the government must prove that the "defendant

associated [herself] with the underlying venture, participated in

it as something [she] wished to bring about, and sought by [her]

actions to make it succeed." United States v. Clifford, 979 F.2d

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896, 899 (1st Cir. 1992) (citing Nye & Nissen v. United States,

336 U.S. 613, 619 (1949)).

Neither Pezzullo nor Dolber challenges the existence

of a scheme to defraud. The scheme is shown by DeNunzio's and

Monteiro's lengthy testimony about the details of their plan to

trick the lending institutions into making risky loans that were

warranted by neither the final purchaser's ability to repay the

loan nor the particular property's true market value. Pezzullo

and Dolber also do not challenge the use of interstate wire

communications to effectuate the plan, as demonstrated at trial

by testimonial and physical evidence of the use of fax machines

and telephone conversations throughout the scheme.

Pezzullo and Dolber, however, claim that they were

unaware of the scheme and therefore were not knowing and willful

participants in it. We hold, however, that the jury reasonably

could have concluded from the voluminous evidence at trial that

both Pezzullo and Dolber knowingly participated in the scheme

with intent to defraud, and also aided and abetted the fraud.

1. Pezzullo

Pezzullo participated in all the double closings,

almost all of which took place at the office of the Cassiere &

Pezzullo law firm. Fred Strangis testified that Pezzullo's role

was to "prepare all the papers and as you're signing them, would

bring them to you, try to get you to read them, try to explain

them to you." Frank Andrews and Dennis Griffin, two other straw

final buyers, and Marlissa Pina, representing one of the

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controlled corporate purchasers, corroborated Strangis'

testimony.

Because the lending institutions give higher

mortgages to individuals who live in the property they buy,

Strangis signed Residential Loan Applications and Owner Occupancy

Affidavits, which Pezzullo gave him, stating that he intended to

occupy the property. Strangis was the final purchaser of four

properties, however, and at closings on December 12, 1990,

February 6, 1991, April 12, 1991, and April 15, 1991, he signed

forms stating that four different properties would be his primary

residence. Other straw final purchasers similarly signed

multiple owner-occupancy documents at the closings: Peter Pina

within one month and a half signed three such forms; Jeanette

Monteiro within a four-month period twice signed such documents;

Dennis Griffin in one month signed two such documents; and Frank

Andrews within three months signed two. Pezzullo witnessed the

signing of each of these documents.

All of the lenders required that the purchaser bring

a twenty percent down payment to the closing. Neither the straw

buyers making the second purchases nor the corporations making

the first purchases brought down payments with them. Instead,

Cassiere or Pezzullo notified Monteiro before the closing of the

amount of the down payment and he would bring a cashier's check

for that amount to the closing. Nonetheless, the HUD-1

Settlement Statements that Cassiere filled out at the closings

reported that the buyers had brought the money.

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The only function of the officers of the

corporations that DeNunzio and Monteiro controlled was to sign

legal documents designed to keep Monteiro's and DeNunzio's roles

hidden. Pezzullo, however, was aware that DeNunzio and Monteiro

controlled the corporations, since Half & Half used the Cassiere

and Pezzullo offices as its corporate address. At the double

closings where each property was first sold and then purchased,

neither Cassiere nor Pezzullo told the corporate officers what

the documents they were signing meant, or that they were buying

and selling real property.

Pezzullo handled the distribution of the proceeds

from the second half of the flip. The proceeds were "the

difference between the loan amount [from the lender] minus the

first sale price, minus any closing costs." After Cassiere and

Pezzullo had completed the deeds on the two sales following the

double closings, Pezzullo disbursed the funds that came from the

final purchaser's mortgage. Pezzullo gave Monteiro the amount

due to the original owner from the first half of the flip,

returned the down payments to Monteiro and DeNunzio, and

distributed the remaining proceeds to Monteiro and DeNunzio for

them to divide. In addition to distributing the mortgage funds,

Pezzullo prepared disbursement sheets noting the funds received

and the funds disbursed.

Paul Pires, as Half & Half's president, first bought

and then sold property in nine of the flips. At each closing, in

Pezzullo's presence, he signed a HUD-1 form and a statement

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certifying that he had received a copy of the HUD-1 form, yet

neither Cassiere nor Pezzullo ever gave him that document.

George Gundensen, president of CenTrust Corporation,

one of the lending institutions, testified that the closing

attorney is expected to fill in all blank spaces in loan

documents before having the mortgagor sign the documents. Some

of the final buyers signed forms at the closing, however, that

were completely blank. In fact, Cassiere and Pezzullo discussed

in Marlissa Pina's presence that they were asking her to sign a

blank document.

Had the lending institutions been informed that the

same law firm had closed twice on the same property on the same

day and with such wide price disparities, they would have either

"suspend[ed] the loan for further information or cancell[ed] the

loan." Because of the large difference between the two sale

prices, the lending institution would have believed that it

"would be making a loan on a piece of property, the value for

which wouldn't support the amount of the loan being made."

The foregoing evidence, together with additional

evidence in the record we have not discussed, justified the

jury's conclusion that Pezzullo both committed wire fraud and

aided and abetted its commission.

2. Dolber

Although Dolber never participated in the closings,

she had a vital role in making the scheme work. Her appraisal

forms, which she submitted to Rate Line, supported the high

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second sale price and thus resulted in the higher mortgages. The

lenders relied heavily on the accuracy of Dolber's appraisals.

As noted, every appraisal she submitted on the thirteen land

flips for properties was identical to the second sale prices, or,

in three instances, slightly higher.

DeNunzio testified that he wanted to use Dolber as

the appraiser because he knew from talking to her that "she would

bring in property values as high as possible," and that she

"would use non-arm's length transactions for sales comparisons."

By non-arm's length transactions, DeNunzio meant "that the

comparable sales used were not a true sale with a wanting

borrower and a wanting seller." Instead, the comparable sales

she used often were previous flips that Rate Line had

established, and, therefore, did not reflect true market value.

Suburban Mortgage Company made a review appraisal of

one of the properties to evaluate Dolber's appraisal. Dolber had

appraised the property at $210,000 and described the neighborhood

as "a mixture of similar well maintained income properties and

medium well maintained single family homes. . . . The

neighborhood is stable at this time and shows that revitalization

has been completed and upgraded the area. . . . No adverse

market conditions from neighborhood."

The review appraiser concluded that the market value

of the property as of the date of Dolber's appraisal was $50,000.

In response to the question "Is the appraiser's overall

description of the neighborhood complete and accurate?," the

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review appraiser answered "No" and explained that "This area is

in the midst of a high crime drug area of the city. There are

boarded up buildings, fire damaged units and vacant apartments in

buildings. This is the least desirable area in the city within

which to live."

Monteiro accompanied Dolber in viewing some of the

appraised properties. He told her of the proposed sale price for

the second half of the flip. Usually, the appraised value was

very close to the intended sale price. Dolber "appraised at the

value needed, so we [Rate Line] continued to use her."

There was ample evidence upon which the jury could

conclude that Dolber frequently misstated the conditions of the

appraised properties, making them appear more valuable than they

were. Thus, in her appraisal of 69 Turner Street, Dolber wrote

that the property was in need of "cosmetic and minor roof

repair," the bathrooms were "fully functioning," the "[k]itchen

cabinets are adequate," "two units are rented at this time," and

the third unit "will be occupied by the owner." She rated the

property's functional utility as "average." Strangis, who was

the final purchaser and was present during Dolber's appraisal,

testified that the property was "[b]asically a shell of a house,"

and it was not occupied at the time of her inspection or any time

since.

It had a lot of broken windows . .
. . The porch was broken off, a couple
of the gutters were gone. The inside
had had no plumbing. Most of the wiring
was gone; whatever was still there was
hanging out of the ceiling. . . . [I]f

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there were any tubs and toilets were
left in they were turned upside down.
There were no stoves, no cabinets. . . .

It was nowhere near liveable. . . .
A lot of the places didn't have doors.

In her appraisal of 34 Harvard Street, Dolber wrote

that "[a]ll three units are rented at this time." Monteiro

testified that none of the units was rented at the time of the

appraisal. Dolber described the property as having "been

maintained in average to good condition," with "all mechanical

and electrical services [] fully functioning." Martin Pina, the

final purchaser of this property, testified that it was "in very

bad condition. There was no plumbing, no pipes, no copper at all

in the building, it had been stripped out. The building was

being used by drug users. There were syringes on the inside of

the building. . . . [T]here was a lot of structural damage on

the inside." Although Dolber certified in her appraisal that she

"personally inspected the subject property, both inside and out,"

Monteiro and DeNunzio testified that Dolber never entered the

premises during her appraisal, and Dolber admitted as much to

DeNunzio. Furthermore, Dolber wrote that the property was

divided into three units, but Pires testified that there were six

units. Dolber described 11 Lebanon Street as needing "only minor

cosmetic repair" and that it "appear[e]d to be in average

condition." Monteiro testified that all of the copper pipes were

removed from within the house and that both the interior and

exterior of the house were in poor condition. Dolber reported

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that there were no units vacant, but Monteiro testified that the

property was unoccupied at the time of appraisal. George

Strangis testified that there was "no plumbing in the basement,

it had been all ripped out," only one of the three hot water

heaters stood upright, and it was not connected, "the other two

were laying on their side," "[t]he bathroom ceiling on the first

floor . . . had been partially ripped down," and "[t]he heating

systems weren't operational."

Dolber made similar misstatements regarding the

condition and occupancy of other properties she appraised.

Although she stated that three units at 18 Winthrop Street were

rented at the time, Fred Strangis and Frank Andrews testified

that only one of the four units was then rented. Dolber

described 23 Temple Street as having "been maintained in average

to good condition" with "all mechanical and electrical services

[] fully functioning," and reported that "[a]ll three units are

rented at this time." Martin Pina, however, testified that at

the time of the appraisal the property was boarded up, had no

electricity, the plumbing had been "filled with some type of

Ethyl glycol or antifreeze to stop the pipes from bursting,"

there was no water, and nobody lived in the building. Dolber

also repeatedly appraised multiple properties for the same

purchaser, and each time reported that the particular property

would be owner-occupied. Thus, in her appraisals she certified

that Fred Strangis would occupy four properties, Griffin would

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occupy two, Andrews would occupy two, and Peter Pina would occupy

three.

The appraisal form required the appraiser to compare

the subject property with recent sale prices of similar

properties in the neighborhood, which are known as "comparable

sales." In her appraisals, Dolber relied on data from the

publication County Comps, which listed the sale prices for closed

sales, as a source of information about comparable sales. Thus,

for example, in her appraisal of 79-81 Keith Street, Dolber used

three comparable sales and identified County Comps as her data

source.

The County Comps she relied on, however, showed that

each of the properties she used as comparable sales had been sold

twice within a short period for vastly different prices.

Similarly, in her appraisal of 85 Ford Street, Dolber relied on

County Comps for her comparable sales. County Comps showed one

of those properties as involving two sales on the same day, with

the second price more than double the first price.

Dolber's actions in connection with her proposed

acquisition of 30-32 Water Street showed her awareness of how the

fraudulent scheme was operating and her willingness to

participate in it. She asked DeNunzio to handle a loan for her

on the property and proposed that her nephew, Adam Belanger, and

his wife, Karen, serve as straw buyers since Dolber had a bad

credit rating. After DeNunzio told Dolber that the Belangers

would not qualify for a loan because they did not earn enough

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money, Dolber told DeNunzio that she would give Karen a job, and

asked how much salary Karen needed to earn to qualify for the

loan.

Dolber sent DeNunzio a verification of employment

form for Karen from Whitinsville Water Company, a company

Dolber's father owned, which was "blank where the employment

numbers should have been filled in on the form." Dolber told

DeNunzio to fill in the blanks, but when he told her he could not

do that, she undertook to do so. Thereafter, DeNunzio received a

completed verification-of-employment form, a W-2 statement, and a

pay stub for Karen Belanger. Both Samuel Carpinetti,

Whitinsville Water Company's general manager, and Karen Belanger

testified that Karen never worked for the company.

Dolber argues that the government's proof failed

because it did not establish the appraised properties' fair

market value. She cites no precedent, however, and we know of

none, that requires the government to prove a precise fair market

value as an element of the crime of wire fraud. To the contrary,

she notes that "market value was not in and of itself an element

of the offenses with which Ms. Dolber was charged." Furthermore,

the evidence justified a jury conclusion that Dolber's appraisals

falsely represented the condition and thereby the value of the

properties.

Again, citing no case law to support her contention,

Dolber argues that "the jury was left to speculate as to what

conduct on the part of Ms. Dolber was inappropriate," because the

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government did not point to any code of professional ethics that

governed her behavior. Violation by the defendant of a code of

ethics is not an element of the crime of wire fraud.

Dolber presented a version of the facts which

portrayed her as an innocent victim of DeNunzio's scheme to

defraud the lenders. The foregoing evidence, and other evidence

we have not discussed, however, provided the jury with an ample

base for rejecting Dolber's claim, and concluding that she

committed wire fraud and aided and abetted its commission.

B. The Conspiracy Convictions

To prove that a defendant is a member of a

conspiracy, the government must demonstrate beyond a reasonable

doubt that: 1) the defendant agreed to commit an unlawful act, 2)

the defendant voluntarily participated in the scheme, and 3) one

of the conspirators took an affirmative step toward achieving the

conspiracy's purpose. Braverman v. United States, 317 U.S. 49,

53 (1942); United States v. Gomez-Pabon, 911 F.2d 847, 852 (1st

Cir. 1990), cert. denied sub nom. Guzman v. United States, 498

U.S. 1074 (1991). To prove that a defendant "belonged to and

participated in the conspiracy, the government [must] prove that

he intended to agree and that he intended to commit the

substantive offense." United States v. Nueva, 979 F.2d 880, 884

(1st Cir. 1992), cert. denied, 113 S. Ct. 1615 (1993).

"[C]onspiratorial agreement need not be express so

long as its existence can plausibly be inferred from the

defendants' words and actions and the interdependence of

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activities and persons involved." United States v. Boylan, 898

F.2d 230, 241-42 (1st Cir. 1990), cert. denied, 498 U.S. 849

(1990) (citations omitted). Evidence of participation in the

conspiracy may include "inferences from surrounding

circumstances, such as acts committed by the defendant that

furthered the conspiracy's purposes." Gomez-Pabon, 911 F.2d at

853. Furthermore, the government is under no duty to prove that

the defendant knew each of the objectives of the conspiracy or

all the details. Id.

Pezzullo and Dolber do not deny that there was a

conspiracy to commit wire fraud, and the record leaves no doubt

that one existed. They argue, however, that the government did

not prove that they joined the conspiracy. Evidence relating to

the substantive offenses discussed in Part II.A, also supports

the jury verdict of conspiracy. Moreover, once the evidence

establishes the existence of a conspiracy, lesser evidence may

suffice to show a defendant's connection with the overall

conspiracy. United States v. Smith, 726 F.2d 852, 866 (1st Cir.

1984).

As shown above, Pezzullo was aware that the second

purchasers did not themselves provide the down payments on the

market price, although required to so do by the HUD-1 forms that

she and Cassiere had them sign. She also saw that the same

individuals repeatedly attended closings on properties they

certified would be owner-occupied. She was aware of the

significant differences in the prices of the two sales in the

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land flips. At the first flip Cassiere discussed with Pezzullo

prior sales of 59-61 Howard Street. Pezzullo had done the title

work for that closing, and Cassiere was interested in learning

what the earlier sale prices were to see if he could justify the

higher price to be paid in the double closing.

An inference could have been drawn that Dolber

followed Monteiro's wishes that her appraisals support the higher

sales prices in the second flips. She repeatedly misstated the

condition and occupancy of the properties she appraised, thereby

increasing the amounts the lenders would loan on the security of

the properties. Dolber's use of her nephew and his wife as

straws in an attempt to purchase 30-32 Water Street for her was

further evidence that she was aware of how DeNunzio and Monteiro

conducted illegal property sales.

Don Peters, of First Union Mortgage Corporation,

became suspicious about an appraisal that Dolber had conducted on

a mortgage First Union purchased from Rate Line. He asked Dolber

to explain the apparent increase in the value of the property

within one day which he noted from his review of Banker and

Tradesmen, a listing of property values and closing dates.

Dolber called DeNunzio, told him of her conversation with Peters,

and asked, "what's that all about?"

In a subsequent conversation, DeNunzio told Dolber

that he had checked out the situation, that there had been a

prior foreclosure sale, but that she would not have known about

it because that sale had not been recorded at the time she did

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the appraisal. When Dolber told him that Peters had requested a

written response, DeNunzio told her that he wanted to review the

letter before she sent it out. The letter Dolber wrote Peters

provided an explanation similar to the one DeNunzio had given

her: the low first sale price was due to the fact that the

property was purchased from foreclosure, and thus did not reflect

the true market value. At the time she conducted her appraisal,

none of her data sources mentioned that sale.

On another occasion Dolber called DeNunzio and asked

him to meet her outside a bar but refused to tell him why she

wanted to do so. He met her there and they had their

conversation inside her car. Dolber told him that she needed

photographs of four of the properties she had appraised since

Monteiro, and not she, had taken the photographs. She explained

that she needed the pictures in her records, which the United

States government had requested. He agreed to provide her with

the pictures.

The evidence supports the jury finding that Pezzullo

and Dolber were knowing and willing participants in a conspiracy

to defraud the lending institutions. The government is not

required to prove that each co-conspirator knew every detail of

the scheme; "[a]ll that is required is to show 'the essential

nature of the plan and their connections with it.'" United

States v. Rivera-Santiago, 872 F.2d 1073, 1079 (1st Cir.)

(quoting Blumenthal v. United States, 332 U.S. 539, 557 (1947)),

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cert. denied sub nom. Castro-Poupart v. United States, 492 U.S.

910 (1989).

III. Questions Asked By the Jurors

At the beginning of the trial, before any of the

attorneys had made opening statements, the court told the jury

that it could ask the witnesses questions. The court explained

that the questions had to be written; that the written questions

would be submitted to the court, which would review them; and

that the court might not ask a jury question if the question

could not be put in a proper legal form or it "couldn't make any

legal difference at all." During the 24-day trial, the court

asked the witnesses eleven questions that the jurors had

submitted.

The defendants did not object to the court following

the practice thus to ask questions or, indeed, to any particular

question asked. "In the absence of a timely objection our review

is limited to examining the record for plain error, and we will

correct only particularly egregious errors . . . that seriously

affect the fairness, integrity or public reputation of judicial

proceedings." United States v. Munson, 819 F.2d 337, 340 (1st

Cir. 1987) (internal quotations omitted).

In United States v. Sutton, 970 F.2d 1001 (1st Cir.

1992), decided after the trial in the present case, we upheld the

actions of the same district judge in employing this practice in

a mail and wire fraud prosecution, in which the court asked

witnesses seven questions submitted by the jurors. We held that

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"especially in complex cases," "allowing juror-inspired questions

in a criminal case is not prejudicial per se, but is a matter

committed to the sound discretion of the trial court." Id. at

1005. We noted that other circuits similarly had so concluded.

Id.

We explained that "[a]llowing jurors to pose

questions during a criminal trial is a procedure fraught with

perils. In most cases, the game will not be worth the candle.

Nevertheless, we are fully committed to the principle that trial

judges should be given wide latitude to manage trials." Id.

Although we stated that "in most situations, the risks inherent

in the practice will outweigh its utility," we held that we would

review the propriety of the practice on a case-by-case basis

based on the totality of the circumstances. Id.

In Sutton, we held that for four reasons, the

court's asking of the juror questions was not reversible error.

First, Sutton "neither objected nor requested any additional

safeguards." Id. at 1006. Second, "[b]ecause [Sutton] was a

factually complex case in which a greater-than-average risk of

jury confusion existed, the positive value of allowing juror-

inspired questioning was relatively high." Id. Third, the court

used appropriate procedural safeguards, such as requiring that

the questions be presented in writing to the court and explaining

to the jury that the court might not ask all juror questions.

Id. Fourth, "the questions themselves were few in number and

bland in character." Id. (footnote omitted).

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The first three reasons unquestionably are equally

applicable here: the defendants did not object to the

questioning, the case was factually complex, and the court

adopted procedural safeguards nearly identical to those in

Sutton.

Sutton involved seven jury questions the court asked

during a 2 1/2 day trial. The present case involves eleven

questions asked during a 24-day trial. The issue, thus, is

whether this significantly larger number of questions so

seriously undermined the fairness of the trial as to constitute

plain error. We answer that question negatively.

The juror questions the court asked were relatively

"bland in character," id., and designed to clarify and explain

testimony already given. For example, one juror wanted Paul

Pires to identify the word that followed his signature on one of

the exhibits. The word was "Pres." Another juror wanted Nancy

Rullo to explain what the "preliminary title" that she referred

to in her testimony meant. One juror sought clarification of who

had done the appraisal the witness was discussing. Although the

defendants have objected to allowing juror questions and to the

number asked in this case, they have not now argued that any

specific question was improper. Other courts

of appeals have upheld convictions where the court asked varying

numbers of questions that the jurors proposed. In United States

v. Lewin, 900 F.2d 145 (8th Cir. 1990), the court, over

objections made in the jury's presence, asked six questions. The

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24

Fourth Circuit upheld a conviction in which the trial court asked

ninety-five juror questions during a three-week trial.

DeBenedetto v. Goodyear Tire & Rubber Co., 754 F.2d 512 (4th Cir.

1985). The Fifth Circuit approved the asking of one juror

question. United States v. Callahan, 588 F.2d 1078 (5th Cir.),

cert. denied, 444 U.S. 826 (1979).

In each of these cases the court focused on the

effect of the questions on the trial, not the number of

questions, in and of itself. Thus, the Lewin court approved the

asking of juror questions because they were factual in nature and

merely "sought clarification of previous testimony and did not

introduce new or unrelated subject matter." 900 F.2d at 148. In

DeBenedetto, despite the large number of questions, the court

"examined carefully each of the questions propounded by the

jurors and [] perceive[d] no bias in any of the questions." 754

F.2d at 517. In Sutton, we noted that "juror-inspired

questioning becomes particularly troublesome when questions are

directed at the [criminal] defendant." 970 F.2d at 1006 n.6. In

Sutton, the court asked only one such question of the defendant.

Id.

In the present case, the court asked the defendant

Cassiere four juror questions during his testimony which spanned

three days. Here, as in Sutton, the "appellant did not object to

[the questions]; and he has not argued on appeal that th[ese

questions were] improper or harmful." Id. We cannot say that

the district court committed plain error in asking the defendant

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Cassiere four relatively benign juror questions during Cassiere's

three days of testifying.

The defendants argue, however, that by asking the

jury questions during the testimony of the witnesses, the court

improperly interfered with their ability to conduct direct and

cross-examination of the witnesses. The district court, however,

has broad discretion to control trial proceedings. Id. at 1005

("we are fully committed to the principle that trial judges

should be given wide latitude to manage trials"); see also United

States v. Slone, 833 F.2d 595, 597 (6th Cir. 1987) (The court

"must see that the issues are not obscured and that the testimony

is not misunderstood."). While objections from opposing counsel

and sidebars may be similarly disruptive of counsel's

examination, they are interruptions that are also critical to the

fair and rational progression of the trial. We cannot say that

the court's asking of the jurors' questions so interfered with

counsels' questioning of the witnesses as to constitute a denial

of the defendants' right to a fair trial.

Although we uphold the district court's asking the

juror questions in this case, we reiterate what we said in Sutton

regarding the use of this practice. As we there indicated, the

practice should be reserved for exceptional situations, and

should not become the routine, even in complex cases. The

district court should inform counsel at the earliest possible

time of its intention to use this technique and allow counsel the

opportunity to object. The court should instruct the jurors that

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they should limit their questions to important points, that at

times the rules of evidence will dictate that the court not ask a

question, and that the jurors should draw no implication from the

court's failure to pose a juror-proposed question to the jury.

The jurors should reduce their questions to writing and pass them

to the court. Before asking a question, the court should offer a

sidebar conference to give counsel the opportunity to object.

Finally, in its charge, the court should include a prophylactic

instruction, along the lines suggested in Sutton.

IV. Evidentiary Rulings

The "trial court's rulings on relevance and

admissibility will not be disturbed unless there is an abuse of

discretion." United States v. Drougas, 748 F.2d 8, 24 (1st Cir.

1984).

A. Admission of the Publication County Comps

Dolber challenges the court's admission of seven

reports from the publication County Comps.

Federal Rule of Evidence 803(17) allows, as an

exception to the hearsay rule, the admission of "[m]arket

quotations, tabulations, lists, directories, or other published

compilations, generally used and relied upon by the public or by

persons in particular occupations."

County Comps publishes a monthly listing of

properties sold, the sales prices, and the dates the sales were

closed. Real estate brokers, insurance agents, and appraisers

buy County Comps. The operating manager of County Comps

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testified that the reports admitted were authentic. Dolber

referred to County Comps as her source of data for comparable

sales in her appraisals.

Dolber argues that "although the County Comps

listings at first blush appear to deal with compilations of

relatively straightforward facts, this evidence required a

subjective analysis of other facts." Individuals might differ in

the conclusions they draw from the data in County Comps. But

that is not the test for admission of the publication. The

evidence shows that County Comps is a "published compilation[],

generally used and relied upon by" appraisers. The court did not

abuse its discretion in admitting the evidence.

B. Questions Asked of Cassiere Regarding Professional

Standards

Cassiere argues that the government held him to a

higher standard of conduct because he is an attorney, based on

the following colloquy between the prosecutor and Cassiere:

Q. And in addition to being aware of
the responsibilities as a closing
attorney, sir, you as an attorney
have certain responsibilities in
conjunction with representing
anybody, right?

A. Yes.

Q. And those duties and
responsibilities are set forth in
such things as a canon of ethics,
are they not?

Cassiere objected and, after a sidebar conference,

the court overruled the objection and explained:

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I'm going to be very express [in my
charge] that sloppy or careless work is
not criminal. It may be malpractice,
but it's not criminal. But I've decided
. . . that the failure to make a
disclosure of material fact when under a
duty to make a disclosure which duty is
known to the individual with a specific
intent to defraud by failing to make the
disclosure constitutes a violation of
the statute.

The questioning continued:

Q. You're aware of the canons of
ethics governing attorneys?

A. I am.

Q. And the disciplinary rules?

A. I am.

Q. And I gather you were also a former
prosecutor?

A. I was.

Q. You're aware of the criminal laws?

MR. O'BRIEN: Objection, your honor.

THE COURT: No. overruled.

A. I'm not aware of all the criminal
laws. I'm aware of the criminal
laws that I enforced.

Q. You're aware of, you were aware in
June of 1990 of these things as
well, I gather?

A. I don't know what you mean by these
things.

Q. The canons of ethics?

A. Yes.

Q, The disciplinary rules?

A. Yes.

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Q. And you recognized that as an
attorney you were under certain
obligations?

A. Under certain obligations, yes.

Q. Those obligations included,
included a
responsibility to act truthfully?

A. Uh-huh.

Q. And honestly?

A. Correct.

Q. And disclose certain information?

A. I don't know what you mean by
disclose certain information.

The court then sustained an objection and the

prosecutor moved on.

To comprehend Cassiere's role in this scheme, it was

important for the jury to understand how Cassiere and others

viewed his duties as a closing attorney and whether he believed

he had violated those duties. These facts were important for the

jury in determining whether his participation in the scheme to

defraud his clients, the lending institutions, was intentional

and knowing. The district court has discretion to determine the

scope of cross-examination, United States v. Tracey, 675 F.2d

433, 437 (1st Cir. 1982), and did not abuse its discretion in

allowing the preceding colloquy.

C. Exclusion of Land Deeds

Cassiere challenges the court's exclusion of three

land deeds "that the defendant said supported his view of why the

real estate values in question were reasonable." Cassiere

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testified that he relied on the prior deeds for sales in 1986 and

1987 in making his title examination for properties that were the

subject of the indictment. Cassiere testified that he also

relied on those deeds, which listed past sale prices, as

indications of the value of the property at the time he conducted

the title searches.

The court excluded these deeds "on the ground of

relevance [because] they're [sic] conveyance is too remote in

time given, and I take judicial notice at the side bar of the . .

. marked decline in real estate values within the period of time

and material to this lawsuit." The court allowed Cassiere to

testify that these deeds formed the basis of his conclusion that

the second sale prices in the land flips were justified. Since

the deeds were for sales that occurred four to five years before

those at issue in the case, and since the evidence was cumulative

to Cassiere's testimony, the court did not abuse its discretion

in excluding the deeds.

D. Admission of Evidence Under Rule 404(b)

Pezzullo challenges the court's admission under

Federal Rule of Evidence 404(b) of evidence concerning a real

estate transaction not charged in the indictment. Dolber argues

that the court erred in admitting under that rule evidence

concerning a similar transaction and a tape recorded conversation

between herself and DeNunzio.

1. The Two Land Transactions Not Charged in The

Indictment

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Cassiere entered into negotiations with Hybernia

Savings bank to buy 23 Newark Street, which the bank recently had

foreclosed. Pezzullo signed a purchase and sales agreement with

the bank for $65,000. Cassiere offered to sell the property to

Robert Felicio and Richard Rego. His plan was to pay Felicio and

Rego to renovate the property and, thus, provide them with money

for their down payment. Before work was begun on the property,

Cassiere had Felicio and Rego inquire of Rate Line whether they

could qualify for a mortgage loan.

Cassiere told DeNunzio that he was structuring the

sale as a "no money down flip." After receiving loan information

from Felicio and Rego at the law firm, Monteiro told DeNunzio

that he was upset that Felicio and Rego "were sitting in the

office along with Joe Cassiere [and] were making jokes about

Glenn Monteiro looking the other way in regards to processing a

loan the way it should be."

Cassiere and Pezzullo decided that they would not

make enough profit on the resale so they told Felicio that the

deal was off. Cassiere later negotiated a second purchase

agreement with Hybernia for $35,000. DeNunzio asked Dolber to

appraise the property, which she valued at $157,000. The same

month, Pezzullo purchased the property for $35,000.

Dolber also sought to buy property on Water Street

using her nephew and his wife as straw buyers due to her own poor

credit rating. See II.A above. The loan fell through when the

lender refused to do any more business with DeNunzio.

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2. The Tape Recording

Following inquiries by the lending institutions,

DeNunzio tape-recorded several telephone conversations. After an

evidentiary hearing, the court admitted a tape containing a phone

conversation between Dolber and DeNunzio. The conversation was

short, and according to DeNunzio was recorded by accident,

because the call from Dolber came in on his call waiting service

while he was conducting another conversation that he was taping.

Once DeNunzio finished with each conversation he turned the

recorder off and back on again to record his own statement of

when and with whom the conversation had taken place. After

recording this information, he clicked Dolber back in through

call waiting and recorded his conversation with her.

In that conversation, Dolber told DeNunzio that

although Karen Belanger did not work at Whitinsville Water

Company, they could fill in the appropriate employment

verification forms as though she did, and at whatever salary was

necessary. The recording was cut off abruptly at the end.

3. Admissibility of the Evidence

(a) Prior to reviewing the court's admission

of the foregoing evidence under Rule 404(b), we must determine

whether the making of the tape recording was legal, and if so,

whether the government adequately demonstrated the tape's

authenticity.

Title 18 of the United States Code, section

2511(2)(d) provides:

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It shall not be unlawful under this
chapter for a person not acting under
color of law to intercept a wire, oral,
or electronic communication where such
person is a party to the communications
or where one of the parties to the
communication has given prior consent to
such interception unless such
communication is intercepted for the
purpose of committing any criminal or
tortious act in violation of the
Constitution or laws of the United
States or of any State.

18 U.S.C. 2511(2)(d) (1988).

A defendant seeking to suppress a tape recording

"bears the burden of proving by a preponderance of the evidence,"

United States v. Vest, 639 F. Supp. 899, 907 (D. Mass. 1986),

aff'd, 813 F.2d 477 (1st Cir. 1987), either "(1) that the primary

motivation, or (2) that a determinative factor in the actor's

motivation for intercepting the conversation was to commit a

criminal, tortious, or other injurious act." Id. at 904.

After an evidentiary hearing, the district court

ruled that it was "not persuaded by a fair preponderance of the

evidence that Mr. DeNunzio made the recording of Ms. Dolber for a

criminal, tortious or injurious purpose; at most, the Court finds

that if anything Mr. DeNunzio made the tape recording of the

conversation in order to prevent future distortions by a

participant." The court concluded that DeNunzio did not make the

tape to blackmail Dolber or as part of a conspiracy. This

factual finding reflecting the court's familiarity with the

evidence and its evaluation of witness credibility, is not

clearly erroneous.

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After the evidentiary hearing, the court found that

the government had established a proper foundation for the tape's

authenticity. Dolber challenges that conclusion because she

views DeNunzio's testimony as inconsistent, incredible, and

suspect. Credibility determinations are for the district court,

and Dolber does not show that the finding was clearly erroneous.

(b) Rule 404(b) provides:

Evidence of other crimes, wrongs, or
acts is not admissible to prove the
character of a person in order to show
action in conformity therewith. It may,
however, be admissible for other
purposes, such as proof of motive,
opportunity, intent, preparation, plan,
knowledge, identity, or absence of
mistake or accident . . . .

Fed.R.Evid. 404(b).

Rule 404(b) "is one of inclusion which allows the

introduction of evidence of other crimes, wrongs, or acts unless

the evidence tends to only prove criminal disposition." United

States v. Fields, 871 F.2d 188, 196 (1st Cir.), cert. denied, 493

U.S. 955 (1989).

Determining the admissibility of evidence under Rule

404(b) requires a two-pronged inquiry. "The trial judge first

determines whether the evidence has some 'special' probative

value showing intent, preparation, knowledge or absence of

mistake." United States v. Garcia, 983 F.2d 1160, 1172 (1st Cir.

1993). "Next, the judge balances the probative value of the

evidence against the danger of unfair prejudice, pursuant to

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35

Fed.R.Evid. 403." Id. (footnote omitted). Rule 403 provides

that:

Although relevant, evidence may be
excluded if its probative value is
substantially outweighed by the danger
of unfair prejudice, confusion of the
issues, or misleading the jury, or by
considerations of undue delay, waste of
time, or needless presentation of
cumulative evidence.

Fed.R.Evid. 403.

On appeal, we review the Rule 404(b) determination

for abuse of discretion. Garcia, 983 F.2d at 1172.

Knowledge and intent were critical issues in this

case. The Water Street transaction was probative of Dolber's

knowledge and intent in two significant ways. Unlike the other

land flips, in which she served only as an appraiser, in this

instance Dolber was involved in an actual attempt to obtain a

mortgage loan. The evidence showed Dolber's submitting

fraudulent documents concerning Karen Belanger's employment.

The Newark Street transaction reflected Pezzullo's

functioning in a different role from that in the other land

flips. Here, Cassiere and Pezzullo, and not Rate Line,

masterminded the flip and intended to buy the property

themselves. This evidence was probative of Pezzullo's knowledge

of how a flip was arranged. The tape

recording was probative of Dolber's knowledge concerning how to

go about defrauding a lender.

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36

All of this evidence thus satisfied the first prong

of the rule 404(b) test, since it had "some 'special' probative

value showingintent, preparation,knowledge or absenceof mistake."

Garcia, 983 F.2d at 1172.

On the second prong of the rule 404(b) test, "[w]e

afford 'considerable leeway' to a district court in its Rule 403

balancing, and we will reverse a district court's balancing only

in 'exceptional circumstances.'" Id. at 1173 (internal

quotations and citations omitted); see also United States v.

Zeuli, 725 F.2d 813, 816 (1st Cir. 1984) ("the test of

admissibility is committed primarily to the trial court"). The

evidence of the two land transactions and the tape recording were

probative as to intent and knowledge, critical elements of the

crimes charged, and there were no "exceptional circumstances"

indicating an abuse of the court's discretion in admitting the

evidence.

V. The Jury Instructions

A. Challenged Jury Instructions

The defendants challenge two of the trial court's

jury instructions. We review for abuse of discretion. United

States v. Picciandra, 788 F.2d 39, 46 (1st Cir.), cert. denied,

479 U.S. 847 (1986). We must look at the instructions in light

of the evidence and determine whether they "'fairly and

adequately submit[] the issues in the case to the jury.'" Id.

(quoting United States v. Fishbach & Moore, Inc., 750 F.2d 1183,

1195 (3d Cir. 1984), cert. denied, 470 U.S. 1029 (1985)). The

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37

trial court has "considerable latitude" in charging the jury.

Id.

1. Failure-to-Disclose Instruction

Cassiere and Pezzullo argue that the court's

failure-to-disclose instruction "impermissibly allowed the jury

to predicate a finding of guilt on a failure to disclose that was

rooted in the defendant's contractual or professional status or

relationship with other parties."

The court told the jury:

A failure to disclose a material
fact may also constitute a false or
fraudulent misrepresentation if, one,
the person was under a general
professional or a specific contractual
duty to make such a disclosure; and,
two, the person actually knew such
disclosure ought to be made; and three,
the person failed to make such
disclosure with the specific intent to
defraud.

The court continued:

The government has to prove as to each
count considered separately, that the
alleged misrepresentation as charged in
the indictment was made with the intent
to defraud, that is, to advance the
scheme or artifice to defraud. Such a
scheme in each case has to be reasonably
calculated to deceive a lender of
ordinary prudence, ordinary care and
comprehension.

The court also instructed:

[I]t is not a crime simply to be
careless or sloppy in discharging your
duties as an attorney or a[s] an
appraiser. That may be malpractice, but
it's not a crime.

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38

"It is well settled that breach of a fiduciary duty,

standing alone, does not constitute mail fraud." United States

v. Greenleaf, 692 F.2d 182, 188 (1st Cir. 1982), cert. denied,

460 U.S. 1069 (1983). However, one of the "elements that

transform[s] a fiduciary breach into mail fraud . . . . is where

there is a recognizable scheme formed with specific intent to

defraud." Id. This is equally true for wire fraud. Cassiere

admits as much when he writes in his brief: "There may be

circumstances in which a violation of a non-criminal standard

such as the canons of ethics could conceivably be probative on

the issue of whether or not there was fraud."

Cassiere states both that the record is unclear as

to who his client was, and somewhat inconsistently that "[h]is

ostensible client was the bank writing the mortgage for each

piece of property." The latter statement is correct. Cassiere,

assisted by his law partner Pezzullo, was the closing attorney

and represented the lenders, which he acknowledged at trial. As

attorneys representing the lenders, Cassiere and Pezzullo had a

fiduciary duty toward them, which Cassiere also admitted at

trial. In United States v. Silvano, 812 F.2d 754, 759 (1st

Cir. 1987), we held that "the affirmative duty to disclose

material information arises out of a government official's

fiduciary relationship to his or her employer." Id.

"Concealment of material information by an employee under a duty

to disclose to his or her employer 'under circumstances where the

non-disclosure could or does result in harm to [the employer] is

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39

a violation of the [mail fraud] statute.'" Id. (quoting United

States v. Bronston, 658 F.2d 920, 926 (2d Cir. 1981), cert.

denied, 456 U.S. 915 (1982)).

That reasoning is equally applicable here, where the

lenders, the clients of the Cassiere & Pezzullo firm, viewed the

closing attorney as their "eyes and ears," and "expect[ed]

fundamental honesty" from them. In its written instructions to

the closing attorneys, one lender stated: "While we have tried to

cover our procedures in these closing transactions, we are

relying on your judgment and experience as a closing agent to

properly handle and complete our loan closing. However, when you

are in doubt of a situation, please confer with us prior to

closing."

The court's failure-to-disclose instruction

correctly stated the law as it applied to Cassiere and Pezzullo

in view of their fiduciary duty to the lenders.

2. Willful Blindness Instruction

The defendants challenge the court's willful

blindness instruction:

Now, the element of knowledge that
I just mentioned for Counts 1 through
15, that may be satisfied by an
inference, drawn from proof, that the
particular person accused deliberately
closed his or her eyes to what would
otherwise have been obvious to that
person. You may infer knowledge if you
find beyond a reasonable doubt that the
particular person accused refused to be
enlightened, refused to take notice, but
only where you find the individual is
aware of a high probability that the
fact exists and where the individual in

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his or her own mind does not believe --
strike that, does not disbelieve the
fact where there's a high probability
that the fact that's being
misrepresented actually exists and where
the person in his or her own mind
doesn't disbelieve that fact.

Stated another way, a person's
knowledge may be inferred from a willful
blindness to the existence of the fact.
It's entirely up to you whether you find
any deliberate closing of the eyes, any
inference to be drawn from such
evidence. Remember, though, evidence
showing negligence or mistake is not
enough to support a finding of willful
blindness. The ultimate fact of
criminal intent may be established by
circumstantial evidence if you are
satisfied that it is proven beyond a
reasonable doubt.

Caution is necessary in giving a willful

blindness instruction "'because of the possibility that the jury

will be led to employ a negligence standard and convict a

defendant on the impermissible ground that he should have known

[an illegal act] was taking place.'" United States v.

Littlefield, 840 F.2d 143, 148 n.3 (1st Cir.) (quoting United

States v. White, 794 F.2d 367, 371 (8th Cir. 1986)), cert.

denied, 488 U.S. 860 (1988). A court properly gives such an

instruction when "a defendant claims a lack of knowledge, the

facts suggest a conscious course of deliberate ignorance, and the

instruction, taken as a whole, cannot be misunderstood as

mandating an inference of knowledge." Id. at 147.

The defendants did not deny the existence of the

scheme to defraud, but contended only that they were unaware of

it. Furthermore, the instruction made it clear to the jurors

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41

that it was for them to determine whether the defendants had

closed their eyes to what should have been apparent to them. The

court three times used the word "may" and explained that "[i]t's

entirely up to you whether you find any deliberate closing of the

eyes." See Picciandra, 788 F.2d at 46 (approving an instruction

that permitted but did not require the jury to draw an inference

of willful blindness).

Although the government's main contention at trial

was that all three defendants were knowing participants in the

scheme, the government presented evidence from which the jury

could have concluded that if they did not know what was going on,

it was only because they chose to turn a blind eye. "Guilty

knowledge may be inferred where instances of fraud are repeatedly

brought to a defendant's attention without prompting alteration

of his facilitative conduct." United States v. Nivica, 887 F.2d

1110, 1114 (1st Cir. 1989), cert. denied, 494 U.S. 1005 (1990).

Cassiere argues that, like the failure-to-

disclose instruction, this instruction suggests to the jury that

although "negligence or mistake is not enough to support a

finding of willful blindness, . . . [anything] more than

negligence is enough." Thus, the argument goes, the jury could

have concluded that the breach of canons of ethics alone could

constitute "more than negligence," and lead to conviction. The

instruction explained that "evidence showing negligence or

mistake is not enough." It also told the jury that it could

consider "any deliberate closing of the eyes." As with the

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42

failure-to-disclose instruction, breach of a fiduciary duty,

alone, would not prove willful blindness, but the jury could

infer knowledge if it concluded that the defendants

"deliberately" closed their eyes to facts that they were duty-

bound to report to the lending institutions.

Cassiere further argues that the willful blindness

instruction was "logically inconsistent with the Court's charge

on failure to disclose a material fact," and that "[t]he

government cannot have it both ways." The willful blindness

instruction, however, related to the defendant's knowledge of

what occurred. The failure-to-disclose charge, on the other

hand, instructed the jury on determining whether the defendants

were involved in the scheme to defraud.

Finally, Dolber argues that the admission of the

rule 404(b) evidence to prove her knowledge of the scheme was

inconsistent with the government's contention that she remained

willfully blind to the scheme. We know of no authority, however,

that prohibits the government from proceeding on alternate

theories in a criminal case.

B. Refusal to Define Reasonable Doubt

Cassiere, Pezzullo, and Dolber challenge the court's

denial of Dolber's request for an instruction defining reasonable

doubt. In United States v. Olmstead, 832 F.2d 642 (1st Cir.

1987), cert. denied, 486 U.S. 1009 (1988), we analyzed in detail

the need for instructing the jury on the meaning of reasonable

doubt. We explained that "[m]ost efforts at clarification result

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in further obfuscation of the concept," id. at 645, and held that

"an instruction which uses the words reasonable doubt without

further definition adequately apprises the jury of the proper

burden of proof. This does not mean, of course, that the phrase

can be buried as an aside in the [jury charge]." Id. at 646. In

essence, we concluded that the district court was in the best

position to determine whether, and if so how, to define

reasonable doubt. See also Littlefield, 840 F.2d at 146; United

States v. Rodriguez-Cardona, 924 F.2d 1148, 1160 (1st Cir.) ("We

have emphasized in the past, and do so again here, that

reasonable doubt does not require definition."), cert. denied,

112 S. Ct. 54 (1991).

There is no suggestion that the reference to

reasonable doubt was "buried as an aside" in the court's charge

to the jury. To the contrary, the court instructed the jury that

"should there be any reasonable doubt of any essential element

which the government has to prove as to any of these specific 16

charges, then the person or persons so charged must have the

benefit of that reasonable doubt and cannot be convicted on the

charge or charges." In its instructions, the court mentioned

"reasonable doubt" twenty-four more times.

The court did not abuse its discretion in refusing

to define reasonable doubt.

Relying upon Judge Torruella's concurring opinion in

Littlefield in which he stated that "I am of the opinion that the

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failure to grant an instruction explaining the term 'proof beyond

a reasonable doubt' is an error of constitutional dimension,

striking at the very heart of the presumption of innocence," 840

F.2d at 151, the defendants urge this court to reconsider the

issue en banc. In view of this court's settled precedent,

however, this panel sees no occasion to suggest such

reconsideration by the full court.

C. Failure to Give a Maniego Instruction

In United States v. Maniego, 710 F.2d 24, 28 (2d

Cir. 1983), the Second Circuit approved the trial court's jury

instruction "that an attorney is not held to a higher standard of

conduct, or legal obligation, to verify independently the truth

of the information given by a client." In United States v.

Piccianana, 788 F.2d 39 (1st Cir. 1986), we held that the

district court properly refused the defendant's request for a

Maniego instruction because "the government does not try to raise

an inference that Lucid should be held to a higher standard than

normal, nor did its questions have the effect of raising such an

inference." Id. at 46. Lucid, an attorney, was convicted of

aiding and abetting Picciandra in evading income taxes. He

argued that a Maniego instruction was required because the

government had suggested that Lucid was culpable in not going

beyond what his client had told him.

Cassiere and Pezzullo did not request a Maniego

instruction at trial and claim on appeal that the court committed

plain error in not giving such an instruction. They apparently

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interpret the Maniego instruction as required whenever the

government seeks to "raise an inference that the defendant should

be held to a standard higher than normal because of his status as

a lawyer and his position as a former prosecutor." The Maniego

instruction, however, is more limited; it deals with the question

whether a lawyer is to be held to a higher standard of conduct

"to verify independently the truth of the information given by a

client." Maniego, 710 F.2d at 28.

In the present case, the charges against Cassiere

and Pezzullo were not that they failed to check further on

information their clients (the lenders) had given them, but that

they defrauded their clients by failing to disclose the land

flips that inflated the sales prices of the mortgaged properties.

The district court cannot be faulted, and certainly did not

commit plain error, because, in a case involving a significantly

different issue from Maniego, it failed to give a Maniego

instruction that the defendants had not requested.

In any event, the record does not show that the

government sought to hold Cassiere or Pezzullo to higher

standards because of their status as attorneys. Rather, the

government introduced evidence of Cassiere's and Pezzullo's

services as attorneys representing the lending institutions and

the fiduciary duty they owed to those lenders because those facts

were central to understanding their roles in the scheme. See

United States v. Kaplan, 832 F.2d 676, 683 (1st Cir. 1987)

(Maniego instruction not required where the "prosecutor did not

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attempt to create the impression that [the attorney] should be

held to a higher standard of care" and where comments during

trial about the defendant's status as an attorney "were directed

towards [defendant's] role (as a lawyer) which was central to the

scheme"), cert. denied, 485 U.S. 907 (1988); Picciandra, 788 F.2d

at 46.

As noted, the court instructed the jury that "it is

not a crime simply to be careless or sloppy in discharging your

duties as an attorney or an appraiser. That may be malpractice,

but it's not a crime." There was no plain error in the district

court's failure to give a Maniego instruction.

VI. The district court's refusal to give Dolber
a downward adjustment under the Sentencing Guidelines

United States Sentencing Guideline Section 3B1.2(b)

provides that if the defendant "was a minor participant in any

criminal activity," the offense level should be decreased by two

levels. Dolber contends that the district court improperly

refused to give her such a downward adjustment.

"We review the trial court's determination of role

in the offense only for clear error." United States v. Panet-

Collazo, 960 F.2d 256, 261 (1st Cir.), cert. denied sub nom. Diaz

v. United States, 113 S. Ct. 220 (1992). Since a ruling on a

downward adjustment is highly fact specific, we give great

deference to the trial court's action. United States v. Ocasio,

914 F.2d 330, 333 (1st Cir. 1990).

At the sentencing hearing, the district court

explained: "How do I justify calling her a minor participant when

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the evidence seems fairly clear that she knew what she was doing

and she knew she was acting inappropriately here repetitively? .

. . . She seems key to the successful operation of this

fraudulent scheme, just like an attorney is." The lenders relied

on her inflated appraisals in making their mortgage loans, and

without those appraisals the scheme might not have succeeded.

Although DeNunzio, Monteiro, and Cassiere were more culpable than

Dolber, the straw buyers who were Dolber's co-defendants were

relatively minor cogs in the scheme to defraud the lenders.

Thus, Dolber was not "less culpable than most other

participants." U.S.S.G. 3B1.2, comment. (n.3). The court's

denial of a downward adjustment was not clear error.

Affirmed.

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