United States Court of Appeals
For the First Circuit
No. 04-1003
UNITED STATES OF AMERICA,
Appellee,
v.
LARRY SILVEIRA,
Defendant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Nancy Gertner, U.S. District Judge]
Before
Torruella, Dyk,* and Howard, Circuit Judges,
John H. LaChance for appellant.
Mark T. Quinlivan, Assistant United States Attorney with
whom Michael J. Sullivan, United States Attorney, was on brief,
for appellee.
October 21, 2005
*
Of the United States Court of Appeals for the Federal Circuit,
sitting by designation.
HOWARD, Circuit Judge. Larry Silveira was one of three
defendants charged in a twenty-count indictment alleging a
fraudulent telemarketing scheme. Silveira, whose alleged role was
peripheral, was charged with conspiracy, see 18 U.S.C. § 371, and
with knowingly making a false declaration before a federal grand
jury, see 18 U.S.C. § 1623(a). Following a jury trial, Silveira
was convicted only of making a false declaration.
The indictment was the product of a FBI investigation
into the activities of George Campbell, the owner and operator of
a telemarketing fundraising operation. The investigation uncovered
evidence that, between October 1995 and December 1997, Campbell's
telemarketing operation solicited funds ostensibly on behalf of
various charities. Although Campbell's operation collected
substantial sums of money, little, if any, made it to a legitimate
charitable organization.
Campbell's telemarketing operation involved the use of
telemarketing solicitation rooms, or "boiler rooms," and mail drops
at various locations throughout the Northeast and in Florida. At
each boiler room, a number of telephone solicitors would contact
prospective donors and deliver allegedly deceptive pitches designed
to induce charitable donations. The donations were then collected
through the mail or by couriers.
William Twohig, who managed the day-to-day operations at
some of Campbell's boiler rooms, testified that Campbell's scheme
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involved identifying charities on whose behalf they could purport
to solicit funds, devising a pitch for the solicitation, setting up
a boiler room, and hiring and training telemarketers to deliver the
pitch. Campbell's sister, Gail Costello, was the bookkeeper for
the operation. She received the solicited funds, deposited the
money into various bank accounts, arranged to have checks cashed,
and moved or wire-transferred funds from one bank account to
another using nominees or "straws." The operation was profitable.
Twohig testified that one Massachusetts boiler room collected as
much as $40,000 per week.
After one of Campbell's corporations was notified that
the Massachusetts Attorney General was suing it in connection with
improper fundraising tactics, Campbell sought to conceal his
participation by using "shell" corporations headed by "straw"
owners. A corporation would be created and run by the Campbell
operation, and a straw owner would be paid for the use of his name
as the president of the corporation. The straw owners were
compensated in one of two ways: by a flat rate payment of $500 per
week, or by a percentage of the proceeds from a given boiler room.
Silveira had been involved in charity work years before
he met Campbell. He was the Executive Director of California for
Veterans, a charity that provided homeless veterans with food and
shelter. He also established the Veterans Wish Foundation to grant
wishes to dying veterans. Although several "wishes" were granted
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in the early 1990s, the charity dissolved after its "master
fundraiser"1 was investigated by California authorities.2
In 1994, with his charities in California failing,
Silveira enlisted Campbell's services as a master fundraiser.
Promising to revive Silveira's charities, Campbell and Twohig took
over Silveira's California shelter, evicting the remaining veterans
housed there in order to set up boiler rooms. In 1995, Silveira
founded the American Veterans Wish Foundation (AVWF), a successor
to the Veterans Wish Foundation, "to fulfill the last requests of
terminally-ill veterans." At Campbell's direction, Silveira also
formed two corporations for the purpose of soliciting funds for the
AVWF.
In May 1998, Silveira was summoned before a federal grand
jury. Although he was told that he was not a target of the
investigation, he was informed that he could refuse to answer any
questions he felt would incriminate him, and that he could request
counsel at any time during the proceedings. Silveira answered
every question, providing a good deal of testimony implicating
Campbell, the other conspirators, and even himself. He described
his role in setting up corporations for Campbell, opening bank
1
According to Silveira, a "master fundraiser" brokers
contracts with individual fundraisers and oversees all of the
fundraising activities for an organization.
2
There was no evidence that Silveira was implicated in that
investigation.
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accounts for those corporations, and effectively surrendering
control of those accounts to Campbell. Specifically, Silveira had
incorporated Everready Enterprises and Ranick Enterprises,
authorized Costello to open bank accounts for the AVWF and
Everready Enterprises under his name, and permitted Costello to use
a rubber stamp bearing his signature for the purpose of signing
checks. Thus, although only Silveira's name appeared on the
accounts, Campbell and Costello effectively controlled them.
In response to questions before the grand jury regarding
how he was compensated for his role as the director of the AVWF,
Silveira stated that he never received any compensation because the
charity never got off the ground. He also testified that he never
received any payments from Campbell for the use of his name in
connection with any solicitation in Massachusetts. Silveira was
then shown a series of checks, payable to him, that were drawn on
the accounts of Everready Enterprises and Ranick Enterprises in
amounts ranging from $193.74 to $619.48. He was also shown several
checks from another corporation which, with one exception, were all
made payable to Silveira in the amount of $500. Silveira told the
grand jury that these payments, totaling approximately $77,000 over
two years, were personal loans from Campbell, not payments for
services rendered. He stated that the loans were intended to fund
the AVWF as well as to help him with his personal expenses.
According to Silveira, the money was intended as an advance to
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launch the AVWF and he planned to repay Campbell out of the
proceeds of Campbell's fundraising for the AVWF. Silveira admitted
that once the failure of the AVWF was apparent, he used all the
money for personal expenses.
At trial, Silveira repeated his grand jury testimony that
the monies he had received from Campbell were loans to help jump-
start the charity and to support Silveira and his family. The
government, however, presented evidence that, for his services as
a straw owner, Silveira was initially paid a regular weekly payment
of $500, and was later paid a percentage of the funds collected
through the solicitations. Special agents for the IRS and the FBI
testified that, in an interview after the grand jury hearing,
Silveira admitted that Campbell had paid him for his services as a
straw owner. Another government witness, a cousin of Campbell who
had worked as a telemarketer in one of the boiler rooms, testified
that he had overheard a conversation between Campbell and Silveira
in which Silveira agreed to be paid $500 per week for the use of
his name. The government presented the checks Silveira had
received, some of which bore notations indicating that they were
"salary." Silveira did not produce any documentary evidence to
support his contention that the payments were loans, such as a
promissory note or a record of the loaned amounts, and he
acknowledged that there was no defined repayment schedule and that
the purported loans were interest-free and unsecured.
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The government argued at trial that Silveira was a
willing co-conspirator who knowingly participated in the
concealment of Campbell's fraudulent telemarketing scheme by acting
as a straw owner. It also alleged that Silveira had lied to the
grand jury when he testified that the payments from Campbell were
loans rather than salary for services rendered. Silveira moved for
a judgment of acquittal at the close of the government's evidence,
and again at the close of all the evidence. See Fed. R. Crim. P.
29. The court denied the motions and submitted the case to the
jury. The jury acquitted Silveira of conspiracy, but found him
guilty of making a false declaration to the grand jury.
At sentencing, the district court held that Silveira's
misstatements fell outside the "heartland" of perjury convictions
and therefore granted him a downward departure. See United States
v. Silveira, 297 F. Supp. 2d 349, 351 (D. Mass. 2003). The court
determined that the departure was appropriate because "the
overwhelming majority of his testimony was accurate, helpful to the
government, and arguably incriminating to him," whereas the only
untruthful statement was "at the margins of materiality" and "did
not undermine the government's case against Campbell." Id.
Silveira was sentenced to three years' probation, ten months'
community confinement, four months' home detention, and ordered to
pay a $2,000 fine and a $100 special assessment. Silveira appeals
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from the district court's denial of his motion for judgment of
acquittal.
Our review is de novo, see United States v. Singh, 222
F.3d 6, 9 (1st Cir. 2000), and we will affirm the court if "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." United States v.
Campbell, 268 F.3d 1, 6 (1st Cir. 2001).
Under the false declaration statute, the government bore
the burden of proving, beyond a reasonable doubt, that Silveira
"knowingly [made a] false material declaration" while under oath in
a proceeding before a federal grand jury. 18 U.S.C. § 1623(a). "A
statement of a witness to a grand jury is material if the statement
is capable of influencing the grand jury as to any proper matter
pertaining to its inquiry or which might have influenced the grand
jury or impeded its inquiry." United States v. Doherty, 906 F.2d
41, 44 (1st Cir. 1990); see also United States v. Gaudin, 515 U.S.
506, 509 (1995). To be material, the statement "need not directly
concern an element of the crime" being investigated, "nor need it
actually influence the jury." Doherty, 906 F.2d at 44. Because
materiality is a mixed question of fact and law for the jury,
Gaudin, 515 U.S. at 512-15, a court may only decide the issue, as
a matter of law, when no reasonable juror could find materiality on
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the evidence presented, cf. In re Stone & Webster, Inc., Sec.
Litig., 414 F.3d 187, 209 (1st Cir. 2005) (holding, in a securities
fraud action, that a court may only find the lack of materiality
where a jury could not reasonably find materiality).
On appeal, Silveira contends that the government failed
to adduce sufficient evidence to submit the perjury count to the
jury. He does not challenge the adequacy of the evidence
establishing the knowing falsity of his statements, but rather
argues that his misstatements to the grand jury were so minor in
the context of his entire testimony, and were so insignificant to
the subject matter of the grand jury's investigation, that the
court should have ruled them immaterial as a matter of law.
Silveira contends that his false statements were elicited
from questions that were aimed at discovering whether Campbell was
the source of the money that flowed to Silveira and whether the
money was used for a charitable purpose. Silveira's answers --
that Campbell was the source of the money and that Silveira used
some of it to fund the AVWF but most of it for personal expenses --
were truthful. Thus, according to Silveira, his characterization
of the payments as loans, though false, did not obscure the grand
jury's line of inquiry. Relatedly, Silveira argues that his single
untruth was de minimis in the context of the wealth of helpful
information that he gave to the grand jury. Silveira points out
that even the district court acknowledged at sentencing that he had
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provided significant truthful testimony, and that the false
statements were only "marginally material" to the grand jury's
investigation. Silveira, 297 F. Supp. 2d at 356.
Silveira also argues that his statements that the
payments from Campbell were loans were actually more incriminating
than the truth. He contends that the loan scheme he testified to
depicted him as being more deeply invested in the telemarketing
scheme because the money that he would have owed Campbell would
have come from the money raised by Campbell for Silveira's charity.
Thus, Silveira argues, his testimony tended to heighten his
connection to the conspiracy, not diminish it.
Because "the test for materiality is a broad one," United
States v. Scivola, 766 F.2d 37, 44 (1st Cir. 1985), Silveira's
arguments fall short. We note the government's argument that,
contrary to Silveira's contention, his misstatements had the effect
of minimizing his role in the fraudulent scheme because they
concealed his role as a straw owner. Indeed, had Silveira
testified truthfully that the monies he had received were payments
for the use of his name, the grand jury could have inferred that he
was an integrated member of the conspiracy and was not simply a
temporary or unwitting participant. See Silveira, 297 F. Supp. 2d
at 357. But we need not belabor this point because his appeal
fails even if we assume arguendo that Silveira's false statements
were more incriminating than exculpating.
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Silveira's attempt to circumscribe the scope of the grand
jury's inquiry does not comport with the law. Silveira argues that
the grand jury was only interested in the source of the money and
how it was ultimately spent. But, regardless of what the grand
jury was actually focused on, given "the wide-ranging investigative
function reserved to grand juries, [we] must indulge comparable
breadth in construing the materiality of the panel's inquiries."
United States v. Nazzaro, 889 F.2d 1158, 1165 (1st Cir. 1989);
Doherty, 906 F.2d at 44 ("The Government need only establish a
nexus between the false statements and the scope of the grand
jury's investigation.") (internal quotation omitted). It was
within the province of the grand jury's investigation to learn how
the fraudulent scheme worked. See Nazzaro, 889 F.2d at 1165
(finding testimony material because it "had the potential of
providing valuable leads as to how [the conspiracy] worked").
Silveira's false statements had the potential effect of confusing
the grand jury regarding a critical aspect of the scheme -- i.e.,
Campbell's use of and compensation of straw owners. Had Silveira
testified truthfully, he would have corroborated the testimony of
other witnesses establishing that Campbell concealed his
participation in the fraudulent fundraising scheme by paying others
to act as straw owners. See id. ("[T]estimony which merely
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affords leads or corroborative evidence" is material to a grand
jury investigation).3
Silveira's characterization of the payments as loans also
misrepresented the conduct of Campbell, the alleged ring leader of
the scheme and the primary target of the investigation. See id.
(finding testimony material because it bore on the activities of
the "kingfish" of the alleged conspiracy). By testifying falsely,
Silveira misled the grand jury not only as to his own role in the
scheme, but also as to Campbell's activities and his intent in
making payments to Silveira for the use of his name.
For similar reasons, we reject Silveira's contention that
his misstatements were so de minimis in the context of his entire
testimony as to be immaterial as a matter of law. Although
Silveira did provide a good deal of truthful testimony that helped
advance the investigation, the cover-up of his role as a straw
3
We also reject Silveira's suggestion that we limit our
inquiry temporally -- that the materiality of the statement must be
measured at the time that the statement is given. By its very
nature, a grand jury investigation is an ongoing process. The
veracity or materiality of certain information is often not
appreciated until later in the investigation. See United States v.
Goguen, 723 F.2d 1012, 1019 (1st Cir. 1983) (holding that
defendant's false statement was material even though the grand jury
was not certain that the defendant had lied until several weeks
later, when three witnesses testified contrary to the defendant);
United States v. Stone, 429 F.2d 138, 140 (2d Cir. 1970) (stating
that materiality is more readily found in statements made to a
grand jury than in "similar evidence offered on an issue in civil
or criminal litigation, since the purpose of the investigation is
to get at facts which will enable the grand jury to determine
whether formal charges should be made against someone rather than
prove matters directly at issue").
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owner in Campbell's telemarketing scheme "had a natural tendency to
obstruct and obfuscate" the grand jury's understanding of the
scheme. Id. The district court's statements at sentencing in no
way expressed second thoughts about the correctness of its denial
of the motion for a judgment of acquittal. The court's downward
departure merely acknowledged that this was an atypical case in
which Silveira's material false statements were of lesser
significance than his material truthful statements. See Silveira,
297 F. Supp. 2d at 356-58.
The judgment of the district court is affirmed.
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