United States v. Munoz-Franco

United States Court of Appeals
For the First Circuit

Nos. 04-1532, 04-1533, 04-1534, 04-1535

UNITED STATES OF AMERICA,
Appellee,

v.

LORENZO MUÑOZ-FRANCO, FRANCISCO SÁNCHEZ-ARÁN,
ARIEL GUTIÉRREZ-RODRÍGUEZ, and WILFREDO UMPIERRE-HERNÁNDEZ,
Defendants, Appellants.

APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Daniel R. Domínguez, U.S. District Judge]

Before
Boudin, Chief Judge,
Cyr, Senior Circuit Judge,
and Lipez, Circuit Judge.

Mark J. Rochon, with whom Duncan N. Stevens and Miller &
Chevalier were on brief, for appellant Sánchez-Arán.
Francisco M. Dolz-Sánchez for appellant Umpierre-Hernández.
R. Jack Cinquegrana, with whom Jennifer T. Connor, Jennifer E.
Tracy, and Choate, Hall & Stewart were on brief, for appellant
Muñoz-Franco.
Michael S. Pasano, with whom Zuckerman Spaeder LLP was on
brief, for appellant Gutiérrez-Rodríguez.
Elizabeth A. Olson, Criminal Division, Appellate Section, U.S.
Department of Justice, with whom Rosa E. Rodriguez-Velez, U.S.
Attorney, and Maria A. Dominguez, Assistant U.S. Attorney, were on
brief, for appellees.

May 22, 2007
 LIPEZ, Circuit Judge. Appellants Lorenzo Muñoz-Franco,

Francisco Sánchez-Arán, Ariel Gutiérrez-Rodríguez, and Wilfredo

Umpierre-Hernández appeal their convictions for bank fraud,

conspiracy, and misapplication of bank funds, stemming from conduct

that persisted for nearly a decade. Muñoz-Franco and Sánchez-Arán

appeal their convictions for bank fraud and conspiracy for a

similar but separate series of transactions also involving the

improper use of bank funds. Appellants challenge the sufficiency

of the evidence and raise many other substantive and procedural

claims relating to their fifteen-month trial. After careful review

of this immense record, we affirm.

I.

A. Factual Overview

We provide here an overview of the relevant conduct drawn

from the record, saving additional details for our sufficiency

analysis. Throughout the opinion, we consider the evidence "in the

light most favorable to the prosecution." See Jackson v. Virginia,

443 U.S. 307, 319 (1979).

1. The Gutiérrez Loans

During the relevant time period charged in the Third

Superseding Indictment, Muñoz-Franco was President and Chief

Executive Officer of Caguas Central Federal Savings Bank of Puerto

Rico ("Caguas"), a federally chartered savings and loan

association. Sánchez-Arán was Executive Vice President and Chief

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Lending Officer of Caguas. Gutiérrez was a land developer who

owned several companies that received loans from Caguas. Umpierre-

Hernández was an officer of several companies belonging to

Gutiérrez.

For nearly a decade, Muñoz-Franco and Sánchez-Arán

supervised a scheme to use proceeds from various loans for purposes

not authorized by Caguas' Board of Directors ("Board").1 The loans

were granted for land development projects involving companies that

Gutiérrez owned and Umpierre-Hernández helped to operate, including

Transglobe, Modules, and Transhore. In many instances the

appellants used proceeds from loans to Gutiérrez-owned companies to

make payments on prior loans to Gutiérrez-owned companies without

Board approval. In other instances Muñoz-Franco and Sánchez-Arán

submitted loans to Gutiérrez-owned companies to the Board for

approval without disclosing the Gutiérrez-owned companies' failure

to complete work on previous projects. On many occasions Gutiérrez

and Umpierre-Hernández submitted certifications for construction

work that had not yet been completed, and Muñoz-Franco and Sánchez-

Arán accepted the certifications and ordered disbursement of funds

for the projects. The Board also was not informed of this

1
The Board was a body of ten to fifteen members responsible
for establishing policy for the operation of Caguas and overseeing
the general operation of the bank. The Board oversaw the Executive
Committee (which reviewed and approved commercial and real estate
construction loans in excess of $500,000) and the Loan Committee
(which reviewed and approved commercial and real estate loans under
$500,000).

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practice. In January 1988, Muñoz-Franco drafted and obtained Board

approval to send a letter to Richard Denby, the Federal Home Loan

Bank Board auditor supervising Caguas, which responded to Denby's

concerns regarding Caguas' lending practices ("Denby letter"). The

letter contained many misrepresentations regarding the status of

Gutiérrez-related projects and loans.

As the government explained in its opening statement,

this scheme contributed to the appearance that Caguas remained a

financially viable institution under the leadership of Muñoz-Franco

and Sánchez-Arán. If the problems with the bank became known and

Muñoz-Franco and Sánchez-Arán were removed from their positions,

"not only would that have deprived them of a very lucrative job,

but it also would have made it very difficult for them to obtain

new employment in the banking industry." The scheme also

maintained the appearance of solvency for the Gutiérrez companies,

thus protecting the livelihood and professional reputation of

Gutiérrez and Umpierre-Hernández.

The projects for which Gutiérrez-owned companies received

loans included La Marina, Los Mameyes, Cerrovista, and Jardines de

Villa Alba. We provide a brief overview of these projects here.2

2
Similar conduct also occurred on other Gutiérrez projects,
including Levittown, Country Club, Los Caciques, Quintas de
Humacao, and Quintas de Fajardo.

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 a. La Marina

In June 1980, Muñoz-Franco and Sánchez-Arán caused Caguas

to grant a $1,450,000 loan to Transglobe to finance the

construction of seventy-five units of residential housing, with

construction to begin within one month and to be completed within

one year. As of September 1981, the loan limit had been increased

four times, adding a total of $1.8 million, yet not a single house

had been built. Funds were disbursed from the loan for the project

based on certifications submitted by Gutiérrez and Umpierre-

Hernández and approved by Sánchez-Arán, and approximately $2

million was used to pay unrelated Gutiérrez debts with a different

bank. In October 1984, Muñoz-Franco and Sánchez-Arán caused Caguas

to finance the sale of the La Marina project to DO.W Group. The

agreement for this sale provided that Transglobe would remain the

contractor for the project despite its failure to build a single

house in the preceding four years. In approving the loan, the

Board was not informed of Transglobe's prior poor performance.

After this sale, appellants continued to apply funds from the La

Marina loan to other projects and to disburse funds for work not

completed. Not a single house was ever built on the project, and,

in 1989, Caguas entered into a settlement agreement with DO.W

releasing DO.W's debt on the project, which totaled over $2

million.

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 b. Los Mameyes

In late 1985, Muñoz-Franco and Sánchez-Arán caused the

Board to grant Modules a commercial line of credit to build two

hundred housing units. Between December 1985 and March 1986,

Gutiérrez and Umpierre-Hernández submitted a series of

certifications stating that a total of two hundred housing units

had been built. Even though Caguas' inspector reported that only

fifty-five units had been completed, Sánchez-Arán approved

disbursements totaling about $800,000. In March 1986 Gutiérrez and

Umpierre-Hernández submitted a certification requesting $69,000 for

"payment of subcontractors," but attached a list of interest

payments due on the Jardines de Villa Alba, Levittown, Country

Club, La Marina, and Los Caciques projects totalling exactly

$69,000. Sánchez-Arán approved the certification and Caguas

disbursed the funds.

c. Cerrovista

In the spring of 1986, John Burns, a developer, applied

to Caguas for a loan to build residential housing on land he owned

but his application was denied. After meeting with Umpierre-

Hernández and agreeing to use Modules as a contractor, Caguas

approved Burns' application for a loan to build twenty-three units

of housing in what became known as the Cerrovista project. Burns'

loan was approved on the condition that he sign a $2 million note

as a down payment to Modules. Burns signed the note. Shortly

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thereafter, however, Umpierre-Hernández told Burns that the project

needed a new "sponsor" because Burns had been "gossiping."

Umpierre-Hernández then began to negotiate the sale of Cerrovista

to Iantho, a company owned by Walter Frambes. In August or

September 1986, Burns read newspaper articles indicating that the

Cerrovista project might be affected by the Puerto Rico Department

of Transportation's plans to build a hospital and an expressway.

He inquired with the Department and received confirmation that the

development of four lots would be "frozen." When Burns brought

this information to Umpierre-Hernández, Umpierre-Hernández told him

to "hide it, boy."

On September 10, 1986, Sánchez-Arán received Board

approval to offer Iantho an $8.9 million loan, specifying that

$1,412,177 would be used to purchase land for the Cerrovista

project. The sale was then finalized on September 28. However,

the actual land cost was only $480,000, and the remaining $932,000

was used to make principal and interest payments on other loans to

Gutiérrez-owned companies. Over the next few months Gutiérrez and

Umpierre-Hernández submitted certifications showing approximately

$908,000 for "premanufacture" of housing units, and Sánchez-Arán

authorized disbursement of these funds. As of May 1988, however,

not a single unit had been built on the project.

d. Jardines de Villa Alba

In 1985, a developer named Emilio Montilla sought

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financing to build housing units on land he owned, and Caguas

repeatedly denied his requests. Montilla then met with Umpierre-

Hernández, who told him that if he used Modules as a contractor his

request would be approved. In July 1985, the Board considered a

proposed loan to Montilla with Modules as contractor. Although by

this time Modules had failed to perform on the La Marina project

for several years, the Board was not informed of this information

when it considered the Jardines de Villa Alba project. Moreover,

over $231,000 was disbursed before the Jardines de Villa Alba loan

agreement was signed. Although the Board eventually approved the

loan, this prior disbursement took place without Board knowledge or

approval. Only one unit was ever completed on the Jardines de

Villa Alba project. However, the Board was not informed of this

fact. The Denby letter, which was drafted by Muñoz-Franco in

January 1988 and signed by the Board members, refers to the "units"

completed on this project.

2. The Mirandes Loans

As will be described in more detail in our sufficiency

discussion, Muñoz-Franco and Sánchez-Arán supervised a similar

scheme to use loan proceeds for purposes not authorized by the

Board with respect to companies owned by Francisco Mirandes.3

Mirandes received construction loans from Caguas for at least

3
The Third Superseding Indictment did not charge Gutiérrez
and Umpierre-Hernández with involvement in this scheme.

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fourteen different projects. In December 1989, the Mirandes

corporations collapsed due to insolvency, owing Caguas a total of

$23 million. In 1997, Mirandes pled guilty to charges of

participating in a conspiracy to defraud Caguas, the Board, and the

regulatory institution, and to misapplication of bank funds. As

part of his plea agreement, he testified for the government at

appellants' trial.

B. Procedural History

On November 22, 1995, the government filed an indictment

charging appellants with conspiracy, bank fraud, misapplication of

bank funds, and making false entries. Three superseding

indictments subsequently were filed on March 5, 1997; May 13, 1997;

and March 6, 1998.4 The third superseding indictment charged

Muñoz-Franco, Sánchez-Arán, Gutiérrez, Umpierre-Hernández, Enrique

Gutiérrez (Ariel Gutiérrez's brother, who was also involved in

running the Gutiérrez corporations), and Rafael Domínguez Wolff

(who purchased several projects from the Gutiérrez brothers)5 with

bank fraud, in violation of 18 U.S.C. § 1344; conspiracy to commit

bank fraud, misapply bank funds, and make false entries, in

violation of 18 U.S.C. § 371; and misapplication of bank funds, in

4
Appellants protest the delay both preceding and resulting
from this series of superseding indictments on Fifth and Sixth
Amendment grounds. We will discuss the events surrounding this
series of indictments in more detail in Section IV.C, infra.
5
Wolff died prior to trial.

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violation of 18 U.S.C. § 657. The indictment also charged Muñoz-

Franco and Sánchez-Arán with bank fraud under 18 U.S.C. § 1344 and

conspiracy under § 18 U.S.C. § 371 with respect to the Mirandes

loans.

The trial began in federal district court in Puerto Rico

in January 2001 and the presentation of evidence concluded in April

2002. On May 16, 2002, the jury convicted Muñoz-Franco, Sánchez-

Arán, Ariel Gutiérrez, and Umpierre-Hernández on all charged

counts, but acquitted Enrique Gutiérrez. Following the verdict,

appellants filed motions for a judgment of acquittal pursuant to

Federal Rule of Criminal Procedure 29, raising numerous grounds,

including the sufficiency of the evidence. In a thoughtful

seventy-seven page opinion, the district court denied all of the

motions.6

Sentencing proceedings began on December 15, 2003. On

February 12, 2004, the district court sentenced Muñoz-Franco and

Sánchez-Arán to a term of forty-six months on the conspiracy and

bank fraud counts and a concurrent term of sixty months on the

misapplication count. It also imposed a fine of $50,000 on each

defendant. The court sentenced Gutiérrez to a term of thirty-seven

months on the conspiracy and bank fraud counts, and imposed a

6
In addition to the sufficiency of the evidence, the district
court considered and rejected claims of prosecutorial misconduct,
improper jury instructions, inconsistent verdicts, and violation of
the right to a speedy trial, as well as challenges to the admission
of certain evidence and testimony.

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concurrent term of sixty months on the misapplication count. It

also imposed a $60,000 fine. Finally, it sentenced Umpierre-

Hernández to a term of twenty-four months on all counts.

C. Issues on Appeal

Appellants raise thirteen major issues for our

consideration on appeal. Three of these claims — concerning the

statute of limitations, the Ex Post Facto Clause, and the pre-

indictment and pre-trial delay — implicate what might be termed the

validity of the entire proceedings. Although courts often begin by

addressing such issues, we find, in light of the exceptionally

large record, that we must review the sufficiency of the evidence

in order to assess the viability of any of appellants' other

claims. Thus, we will first resolve two evidentiary issues to

determine the content of the record properly before us. We will

then employ that record in conducting our analysis of the

sufficiency of the evidence. Informed by a full understanding of

the record, we will then turn to the host of other issues raised by

appellants.

II.

We begin with two evidentiary issues: whether the

district court allowed witnesses to testify beyond their personal

knowledge, and whether the minutes from the Board meetings were

improperly admitted.

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A. Personal Knowledge

Appellants argue that the district court improperly

permitted prosecution witnesses to testify beyond their personal

knowledge, in violation of Federal Rule of Evidence 602. Rule 602

states, in pertinent part: "A witness may not testify to a matter

unless evidence is introduced sufficient to support a finding that

the witness has personal knowledge of the matter." Fed. R. Evid.

602. Interpretation of the Federal Rules of Evidence is a question

of law subject to de novo review, but the application of a rule is

reviewed for abuse of discretion. United States v. Sposito, 106

F.3d 1042, 1046 (1st Cir. 1997).

1. Arturo Somohano

Appellants argue that Arturo Somohano (the vice president

of Caguas' commercial loan department until 1988, at which time he

became Caguas' chief lending officer) testified beyond his personal

knowledge on three occasions: (1) in claiming that the bank's

outside auditors were replaced for improper reasons; (2) in stating

that Caguas' loan classifications for the loans to Modules were

improper; and (3) in questioning the propriety of certain

construction loans. The district court excluded the first of these

statements after appellants objected, and we therefore do not

consider it further.7

7
With respect to the replacement of the bank's outside
auditors, appellants object to Somohano's testimony that he knew
why Caguas' outside auditors were replaced because "someone told

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 With respect to Somohano's testimony that Caguas' loan

classifications for Modules were improper, appellants objected on

the ground that Somohano had previously stated that he was unaware

of the bank's classifications for those loans. Somohano

acknowledged that he did not remember seeing the loan

classifications for Modules while at Caguas, but his testimony did

not rely on such knowledge of Modules' status. Instead, Somohano

explained that loans at Caguas were classified from one (best) to

ten (worst) based on the amount of risk involved in the loan, and

that the bank would attach greater reserves to riskier loans.

While still on the witness stand, Somohano then reviewed financial

statements indicating that Modules had a negative net worth of $7.6

million at the end of 1986, and that Caguas' reserves would not

cover the loans to Modules because the reserves equalled only ten

or fifteen percent of the loans Modules was sustaining. Based

strictly on the amount of reserves, Somohano would expect the

Modules loan to have received a favorable classification of either

two or three; however, he testified that, based on Modules'

"insolvent" financial status, such classification would have been

me." This characterization is incomplete. Upon further
questioning, Somohano stated that he also knew this information
based on "[m]y own personal observations," specifically, the fact
that "the reserves were totally inadequate to guarantee that the
bank would not shake if a loss could occur." After the government
asked how Somohano's observation related to the auditors' removal,
however, appellants objected, and, after a lengthy sidebar and
research, the court excluded the testimony altogether.

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improper.

According to Federal Rule of Evidence 701, a lay witness

may offer opinions that are "(a) rationally based on the perception

of the witness, (b) helpful to a clear understanding of the

witness' testimony or the determination of a fact in issue, and (c)

not based on scientific, technical, or other specialized knowledge

within the scope of Rule 702." Fed. R. Evid. 701. Under Rule 701,

courts have allowed lay witnesses to express opinions about a

business "based on the witness's own perceptions and 'knowledge and

participation in the day-to-day affairs of [the] business.'"

United States v. Polishan, 336 F.3d 234, 242 (3d Cir.

2003)(alternation in original)(quoting Lightning Lube, Inc. v.

Witco Corp., 4 F.3d 1153, 1175 (3d Cir. 1993)); see also Medforms,

Inc. v. Healthcare Mgmt. Solutions, Inc., 290 F.3d 98, 110-11 (2d

Cir. 2002)(allowing a computer programmer to testify about the

meaning of terms used in the copyright registrations for programs

he had helped design); Williams Enters., Inc. v. Sherman R. Smoot

Co., 938 F.2d 230, 233-34 (D.C. Cir. 1991)(allowing an insurance

broker who had personal knowledge of an insured's business to offer

lay opinion testimony on the cause of an increase in the insured's

premiums). Here, Somohano's testimony was based on knowledge of

Caguas' banking practices that he acquired during his employment

there, and thus the opinions he expressed were properly within the

scope of Federal Rule of Evidence 701.

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 Finally, appellants protest, without providing specific

examples, that Somohano "was permitted to testify about the

propriety of certain construction loans even though he was not part

of the construction loan department and has no firsthand knowledge

of those loans." We find this generalized objection unfounded.

Somohano's opinions about the loans were based on his firsthand

observations of Caguas' practices with respect to these loans. He

testified that, when the Modules loan was restructured, he did not

think Caguas ever would be repaid, and he provided other examples

of Gutiérrez loans receiving special treatment. Given Somohano's

banking experience and his particular knowledge about the Gutiérrez

loans, his testimony about these loans also was properly admissible

as a lay opinion within the scope of Rule 701. Consequently, we

find no abuse of discretion in the district court's handling of

Somohano's testimony.

2. Anabel Enriquez

Appellants also argue that Anabel Enriquez (the senior

vice president of Caguas' mortgage department from 1980-87, who

reported directly to Sánchez-Arán) testified beyond her personal

knowledge when she stated, based on her review of the minutes of

Board and Executive Committee meetings, that certain information

was not discussed at the meetings that should have been discussed.

This objection is unfounded. At trial, Enriquez read the Board

meeting minutes into evidence, including minutes for meetings at

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which she was not present. Appellants objected, and, after

considerable debate, the district court ruled "that [Enriquez] may

literally read what each paragraph [of the minutes] says. If the

United States then wants an explanation as to the paragraph she

must then have an independent source of knowledge." Thus, Enriquez

did not testify whether certain events actually happened at a Board

meeting unless she was present; for meetings she did not attend,

she testified only "whether the minutes reflect" that certain

information was discussed. The district court enforced this

limitation, and required the prosecutor to rephrase questions on

more than one occasion.8 Similarly, Enriquez's testimony that the

Board "should have been told" certain information was a lay opinion

properly admitted under Rule 701. Her position as a senior vice

president of Caguas' mortgage department and her regular attendance

at Board meetings established her familiarity with Caguas' business

operations and made it appropriate for her testify about

information the Board needed to make its decisions. Again, the

district court did not abuse its discretion in allowing such

testimony.

8
For example, when the prosecutor asked whether the Board was
told certain information about Modules, the court interrupted: "You
don't know what the board was told unless you're there. The most
you can state is whether or not the minutes reflect that
information." The prosecutor rephrased the question, and Enriquez
then responded that "from what I remember of having reviewed the
minutes, there is no mention anywhere of that fact."

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 3. Victor Lugo

As part of its case, the government sought to prove that

Muñoz-Franco and Sánchez-Arán concealed material information

relating to the Gutiérrez loans from the Board. Victor Lugo, the

Board president, offered testimony that he was not told or was not

aware of significant information. Appellants claim that Lugo's

testimony showed that he had no independent recollection of the

events in question, some of which occurred nearly twenty years

before trial. However, appellants misconstrue Lugo's testimony

about his own memory. For example, when asked whether he was

informed of Modules' performance history when the Board was making

decisions on the company's loans in July 1985, he stated: "I don't

recall that it was discussed. I believe that if it was discussed

I would remember and it is not reflected in the minutes."

Similarly, when asked whether the number of houses built on Modules

projects was discussed when the Board was again making decisions on

the loans in September 1986, he stated definitively: "No . . . that

was not discussed." These statements show that Lugo had sufficient

recall to testify from his personal knowledge about the information

given to the Board.

Appellants also complain that the government improperly

suggested the truth of hypothetical scenarios presented in certain

questions to Lugo. The purpose of these questions was to probe

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whether the Board would have considered Gutiérrez companies' past

performance in deciding to approve later loans. For example, the

prosecutor asked Lugo: "[I]f the Gutiérrez company, out of these 96

[housing] units only built 22, would that have been information

. . . which you would have been interested in knowing for purposes

of voting on the approval of this loan?" The court explained at

sidebar that it would only allow such hypotheticals when the

government had already introduced evidence that was the basis for

the hypothetical — specifically, when "there is a document from the

bank that clearly establishes a certain fact." It also instructed

the jurors that they should not take the facts that were the basis

for the hypotheticals as true:

Okay. The fact that the Court has authorized
that question, ladies and gentlemen of the
jury, does not mean . . . that the Court is
concluding it is a foregoing fact that you
should take those facts as true. Those facts
are subject to your analysis and your
credibility.
In other words, you have to decide in
your deliberations whether or not this project
called for 96 houses and you have to decide
whether or not actually 22 were built or
whatever number was built, that is subject to
your credibility.
The fact that the Court is authorizing
that this question be expressed in these terms
does not at all mean that the Court has
already determined that it is a fact at all.
You have to decide. That's one of the issues
that you're going to have to decide in this
case.

The court reiterated this instruction several times. This detailed

instruction was sufficient to advise the jury that it should not

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accept the facts set forth in the hypotheticals as true. Thus,

Lugo's response to these questions did not have the effect of

allowing him to testify beyond his personal knowledge to the

factual correctness of the hypothetical. The district court did

not abuse its discretion in allowing such testimony.

4. Victor Kareh

Finally, appellants assert that Victor Kareh (the

assistant vice president of the construction loan department from

1980 to 1990) "was permitted . . . to opine about what the project

documents and ledger cards indicated, without any clear memory of

the events and mixing summary testimony with what was improper

expert testimony." To support this proposition, appellants cite to

three thirty-page sections of the trial transcript, without

specifying the testimony to which they object or the grounds for

their objections. Although Kareh did not author all of the

documents about which he testified, this in itself is not a basis

for excluding his testimony about the documents. Without developed

argumentation on this issue, we cannot conclude that the district

court abused its discretion in allowing Kareh's testimony. United

States v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990)("[I]ssues

adverted to in a perfunctory manner, unaccompanied by some effort

at developed argumentation, are deemed waived.").

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B. Admission of Minutes from Board Meetings

At trial, the prosecution introduced the Board and

Executive Committee meeting minutes under Federal Rule of Evidence

803(6), which states that business records are not excluded by the

rule against hearsay "if kept in the course of a regularly

conducted business activity, and if it was the regular practice of

that business activity to make the . . . record . . . unless the

source of information or the method or circumstances of preparation

indicate lack of trustworthiness." Appellants do not claim that

the minutes themselves were improperly admitted, but rather protest

the prosecution's reliance on the absence of certain information

from the minutes to prove that the Board was not informed about

such matters. Appellants argue that this use violated their rights

under the Confrontation Clause and the rule against hearsay. We

examine these claims in turn. We review alleged violations of the

Sixth Amendment's Confrontation Clause de novo. United States v.

Rondeau, 430 F.3d 44, 47 (1st Cir. 2005). As discussed above,

interpretation of the Federal Rules of Evidence is subject to de

novo review, but application of a rule is reviewed for abuse of

discretion. Sposito, 106 F.3d at 1046.

1. Confrontation Clause

The Confrontation Clause of the Sixth Amendment

guarantees defendants the right to confront adverse witnesses. The

Supreme Court has explained that only "testimonial" statements

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"cause the declarant to be a 'witness' within the meaning of the

Confrontation Clause." Davis v. Washington, 126 S. Ct. 2266, 2273

(2006)(citing Crawford v. Washington, 541 U.S. 36, 51 (2004)).9

Thus, "[i]t is the testimonial character of the statement that

separates it from other hearsay that, while subject to traditional

limitations upon hearsay evidence, is not subject to the

Confrontation Clause." Id. Although the Court has yet to

articulate a precise definition of "testimonial,"10 it is beyond

debate that the Board minutes are nontestimonial in character and,

consequently, outside the class of statements prohibited by the

Confrontation Clause. The Court in Crawford plainly characterized

business records as "statements that by their nature [are] not

testimonial." 541 U.S. at 56. If business records are

nontestimonial, it follows that the absence of information from

those records also must be nontestimonial. Thus, the Confrontation

Clause presents no bar to reliance on the absence of certain

9
Appellants filed their briefs before the Court's decision in
Davis, and thus do not discuss its significance.
10
The Court has held that the term "testimonial" includes "at
a minimum . . . prior testimony at a preliminary hearing, before a
grand jury, or at a former trial; and . . . police interrogations."
Crawford, 541 U.S. at 68. In the context of police interrogations,
the Court indicated that a key factor is whether "the primary
purpose of the interrogation is to establish or prove past events
potentially relevant to later criminal prosecution." Davis, 126 S.
Ct. at 2274. In United States v. Hansen, 434 F.3d 92, 100 (1st
Cir. 2006), we also found that statements that "the declarant would
not reasonably expect to be available for use at a later trial"
were nontestimonial in character.

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information from the Board meeting minutes to prove that the Board

was not given that information.

2. Hearsay

Appellants also complain that, once the minutes were

admitted, the prosecution used the absence of certain information

from the minutes to demonstrate that Muñoz-Franco and Sánchez-Arán

failed to inform the Board of these matters in violation of the

rule against hearsay. Appellants argue that the minutes were

intended to be a summary, rather than an exhaustive record, of the

events that took place at Board meetings, and that, consequently,

the minutes do not indicate whether such information was disclosed

to the Board.

Federal Rule of Evidence 803(7) states that the rule

against hearsay does not exclude

[e]vidence that a matter is not included in
the . . . records . . . kept in accordance
with the provisions of [Fed. R. Evid. 803(6)],
to prove the nonoccurrence or nonexistence of
the matter, if the matter was of a kind of
which a . . . record . . . was regularly made
and preserved, unless the sources of
information or other circumstances indicate
lack of trustworthiness.

Fed. R. Evid. 803(7). The Advisory Committee Note to Rule 803(7)

also states that the "[f]ailure of a record to mention a matter

which would ordinarily be mentioned is satisfactory evidence of its

-22-
nonexistence."11 Thus, the absence of certain information in

minutes admissible under Rule 803(6) would be admissible to show

that the Board was not given that information unless the

circumstances indicated some reason that these omissions from the

record were untrustworthy.

We note that Rule 803(6) excludes business records if

"the source of information or the method or circumstances of

preparation indicate lack of trustworthiness," Fed. R. Evid.

803(6), while Rule 803(7) excludes records otherwise admissible

under Rule 803(6) if "the sources of information or other

circumstances indicate lack of trustworthiness," Id. 803(7). We

think this repetition indicates that even if a business record is

deemed sufficiently trustworthy to be admissible for its contents

under Rule 803(6), other circumstances might render omissions in

that record untrustworthy to show that the events omitted did not

occur. Thus, appellants' concession that the records are

admissible under Rule 803(6) does not necessarily preclude them

11
The Advisory Committee Notes leave open the possibility that
the absence of evidence from a record is not hearsay at all. Fed.
R. Evid. 803(7) advisory committee notes ("While probably not
hearsay as defined in Rule 801, decisions may be found which class
the evidence not only as hearsay but also as not within any
exception. In order to set the question at rest in favor of
admissibility, it is specifically treated here."). Moreover, at
least one court recently has noted the possibility that "evidence
that a record does not exist arguably is not hearsay at all."
United States v. Cervantes-Flores, 421 F.3d 825, 832 n.4 (9th Cir.
2005). For present purposes we assume that such evidence is
hearsay, but admissible under Rule 803(7).

-23-
from arguing that omissions from the records are not admissible

under Rule 803(7).

The government introduced testimony from Enriquez, the

vice-president who reported directly to Sánchez-Arán, explaining

that the minutes were prepared by one of the executive vice

presidents before 1982, by Luis Pastor (an administrative assistant

to Muñoz-Franco) from 1982 to 1986, and by Enriquez after that

time. Enriquez stated that the records prior to 1982 "were

prepared and reviewed by the board, they were set forth in a record

book and the secretary of the board and the president would sign

them." The government submitted an affidavit from Pastor, dated

March 21, 2001, verifying that the documents it introduced were, in

fact, the minutes from 1982 to 1986 and explaining that the minutes

"consist of transcriptions made from notes taken by someone who was

present at each meeting" and that the minutes "were kept in the

regular course of business of Caguas . . . . [I]t was the regular

business practice of Caguas to compile and prepare [the minutes]

and to maintain them in its files."

Finally, Enriquez explained that, after 1986, "[w]hen I

was present I would take notes, subject to the agenda and what was

approved." When Enriquez was not present, Eliza Balina, the

executive secretary for Muñoz-Franco, would take notes at the

meetings, and Enriquez would then "review the files that were

prepared for use by the directors. And upon that review, if there

-24-
was something I did not understand then I could ask the president."

Enriquez noted that the minutes "were always ratified at the

following board meeting," and that, after ratification, the minutes

would be stored either in the president's office or in the bank

vault.

Appellants emphasize that Lugo (the president of the

Board) acknowledged on cross-examination that the minutes were only

a summary of the meetings and did not "word for word report

discussions." However, a review of the Board and Executive

Committee minutes reveals that, while not word for word renditions

of the meetings, the minutes capture more than a skeletal outline

of each meeting and include descriptions of the considerations

relevant to each loan rather than simply the fact that the loan was

discussed and approved.12

After considering this evidence, we conclude that the

district court did not abuse its discretion in allowing the use of

the minutes to demonstrate that the Board did not receive material

information about many of the transactions it considered.

12
In a typical example involving a loan to a developer on a
project that did not involve any of the appellants, the Executive
Committee Minutes report: "Mr. Kareh explained that as a result of
discrepancies between the developer and the builder, this project
was par[y]lized for many months. The developer requested that he
be allowed to substitute builders in order to finish the project.
Original builder was Las Américas Construction and the new builder
would be a local small contractor known as D.C. Inc. with ample
experience in this field. Mr. Kareh also explained that further
delay in the conclusion of the project would probably affect the
final outcome of the project."

-25-
Enriquez's testimony and Pastor's affidavit demonstrate that the

business records were prepared regularly after every meeting,

reviewed and ratified by the Board, and stored securely following

ratification. These circumstances do not indicate lack of

trustworthiness. Indeed, they permit a finding of trustworthiness.

Moreover, given the minutes' thorough description of information

discussed at the meetings, we conclude that the missing information

relating to the loan transactions was a "matter . . . of a kind of

which a memorandum, report, record, or data compilation was

regularly made and preserved." Fed. R. Evid. 803(7).13

III.

We proceed to the sufficiency of the evidence, including

in our analysis the previously-discussed witness testimony and the

absence of certain information from the Board minutes.

In considering the sufficiency of the evidence to support

a guilty verdict, "'the relevant question is whether, after viewing

the evidence in the light most favorable to the prosecution, any

rational trier of fact could have found the essential elements of

the crime beyond a reasonable doubt.'" United States v. Woodward,

149 F.3d 46, 56 (1st Cir. 1998)(quoting Jackson v. Virginia, 443

U.S. 307, 319 (1979)). In performing this inquiry, we "neither

13
Appellants wisely do not attempt to argue that it was
unnecessary for them to present such information to the Board. As
we will discuss more thoroughly in Section III, infra, this
information was highly material to the Board's decisions regarding
the loans.

-26-
weigh[] the credibility of the witnesses nor attempt[] to assess

whether the prosecution succeeded in eliminating every possible

theory consistent with the defendant's innocence." United States

v. Noah, 130 F.3d 490, 494 (1st Cir. 1997). Similarly, we

"review[] a district court's denial of a defendant's motion for a

judgment of acquittal 'using the identical standard employed to

measure the sufficiency of evidence supporting a guilty verdict.'"

United States v. Loder, 23 F.3d 586, 590 (1st Cir. 1994)(quoting

United States v. Sanchez, 943 F.2d 110, 114 (1st Cir. 1991)).

A. Bank Fraud with Respect to the Gutiérrez Loans

The jury found all four appellants guilty of bank fraud

with respect to the Gutiérrez loans. To prove bank fraud under 18

U.S.C. § 1344, the government must show that the appellants

knowingly engaged in a scheme or artifice to defraud or obtain

money from a federally insured financial institution by means of

materially false statements or misrepresentations. See United

States v. Kenrick, 221 F.3d 19, 30 (1st Cir. 2000).14 We first

consider the evidence against bank officers Muñoz-Franco and

14
In full, 18 U.S.C. § 1344 provides: "Whoever knowingly
executes, or attempts to execute, a scheme or artifice (1) to
defraud a financial institution; or (2) to obtain any of the
moneys, funds, credits, assets, securities, or other property owned
by, or under the custody or control of, a financial institution, by
means of false or fraudulent pretenses, representations, or
promises; shall be fined not more than $1,000,000 or imprisoned not
more than 30 years, or both."

-27-
Sánchez-Arán, and then the evidence against Gutiérrez and Umpierre-Hernández.

1. Muñoz-Franco and Sánchez-Arán

In their positions as President and Executive Vice

President, respectively, Muñoz-Franco and Sánchez-Arán were

responsible for keeping the Board informed of information relevant

to current and prospective loans. Moreover, Sánchez-Arán was the

primary supervisor of the construction and commercial loans to

Modules, a Gutiérrez-owned company involved in many of the

fraudulent transactions. Muñoz-Franco supported Sánchez-Arán's

recommendations on these projects. At trial, Lugo, the president

of the Board of Directors, explained that he and the other Board

members relied on the reports prepared by Muñoz-Franco and Sánchez-

Arán in making decisions regarding loans. Lugo explained that it

was not his job to "verify the accuracy of information that was

being given" to him by the management of the bank, and added that

he "trusted fully that the information that was being provided me

was whole and true."

Despite their responsibility to keep the Board fully

apprised, Muñoz-Franco and Sánchez-Arán concealed important

information on many occasions. For example, in July 1985 Caguas

considered the Jardines de Villa Alba project, for which Modules

would be the contractor. As of October 29, 1984, Modules had

completed none of the 212 units planned for the La Marina project,

even though the original loan agreement from June 25, 1980 called

-28-
for construction to begin in thirty days and for seventy-five units

to be completed within twelve months. Despite the lack of

progress, the loan amount had been increased four times between

August 7, 1980 and September 17, 1981. Lugo testified that this

poor performance history was not discussed during the loan

presentation for the Jardines de Villa Alba project. Lugo stated

unequivocally that he would have wanted to know Modules'

performance history in evaluating the Jardines de Villa Alba loan,

demonstrating the materiality of such information.

Lugo further testified that, after the original loan

presentation, Muñoz-Franco and Sánchez-Arán continued to withhold

information from the Board regarding the Jardines de Villa Alba

loan. Although the record shows $231,000 was paid to Modules

before the Jardines de Villa Alba loan agreement was signed, even

at trial Lugo expressed surprise that this had happened and stated

that "it would have been difficult for me to believe that" this

occurred. More than a year after the Jardines de Villa Alba loan

was approved, in September 1986, Lugo did not know that only one

house had been built on the project. Lugo also testified that as

of September 1986 the performance history of Modules "as to

construction of homes that were to be constructed versus the ones

that were constructed . . . was not discussed." Finally, on

January 10, 1988, Lugo signed the Denby letter, which was prepared

by Muñoz-Franco and which referred to the "units" built on Jardines

-29-
de Villa Alba, without realizing that only one house had been built

on the project.

Lugo also testified that Muñoz-Franco and Sánchez-Arán

did not inform him and the Board of other material information

relating to Modules. For example, he did not know that Modules

remained the contractor after the La Marina, Country Club, and

Levittown projects were sold from Transglobe to DO.W in October

1984. He also did not know that, between 1984 and 1986, Modules

did not make any principal or interest payment on any loan to

Caguas with funds generated from its own business as opposed to

proceeds from other loans. Likewise, he was not informed, when the

Board approved the sale of Modules to Camero on September 10, 1986,

in conjunction with a restructuring of its loans, that

approximately seventy percent of Modules' debt was with Caguas and

that over seventy-one percent of Modules' assets were intangibles.15

Finally, Lugo testified that when the board approved a

loan of $1,412,077 for land acquisition for the Cerrovista project,

for which Modules also was the contractor, Muñoz-Franco and

Sánchez-Arán did not advise him or the Board that the cost of the

land was actually only $480,000 — in other words, that $932,177

would be used to make principal and interest payments on other

Modules loans.

15
The high percentage of assets that were intangible might
raise concerns about the ability of Modules to pay off its debts.
Such information would be relevant to the Board's decision process.

-30-
 Lugo's testimony is corroborated by the absence of this

and other material information from the Board minutes. Although

the government did not rely heavily on the absence of such

information, we have found these omissions properly admissible

under Federal Rule of Evidence 803(7) and note that they lend

support to the prosecution's case.

There was substantial evidence that Muñoz-Franco and

Sánchez-Arán withheld all of this information from the Board with

full knowledge of the problems with Modules and other Gutiérrez

companies. Anabel Enriquez, who reported directly to Sánchez-Arán,

explained that the handling of Gutiérrez certifications at Caguas

concerned her "[b]ecause practically monthly, each time they

invoiced[,] the certifications would be ahead of the construction."

She discussed her concerns with Muñoz-Franco at least by the time

La Marina was going to be sold to DO.W in 1984, and with Sánchez-

Arán around the same time. She also discussed her concern with

Muñoz-Franco that, following the sale, Modules would remain a

contractor for La Marina, Levittown, and Country Club. However,

Muñoz-Franco and Sánchez-Arán took no action in response to

Enriquez's concerns.

Finally, Muñoz-Franco and Sánchez-Arán took steps to

conceal their misrepresentations from both internal and external

auditors. Juan Hernández, Caguas' internal auditor, testified

that, in 1981, Kareh (the assistant vice president of the

-31-
construction loan department) initially provided information in

connection with an audit of the construction loan department, but,

after a short meeting with Sánchez-Arán, Kareh stopped providing

the information Hernández requested. Hernández further testified

that, although he requested the auditing committee "several times"

between 1980 and 1990 to allow him to audit the construction loan

department, Muñoz-Franco and Sánchez-Arán did not allow the audit

to take place. In a letter dated January 22, 1985, an external

auditing firm, Stephen P. Bradics and Company, recommended "that

the scope of internal auditing be expanded to include . . .

construction loans." After Caguas received this letter, Hernández

again recommended to the audit committee on several occasions that

he should be allowed to audit the construction department, but he

still was not allowed to do so. The audit committee minutes

reflect his recommendation at several meetings at which Muñoz-

Franco and Sánchez-Arán were present. At one meeting, on January

28, 1988, Muñoz-Franco responded by telling Hernández that

"construction loans was the area most audited by senior

management."16 Sánchez-Arán heard and agreed with Muñoz-Franco's

response, and Sánchez-Arán had also made similar statements to

Hernández in the past. However, Hernández was never provided with

any internal audit conducted by either Muñoz-Franco or Sánchez-

16
Hernández testified that "senior management" consisted of
Muñoz-Franco and Sánchez-Arán.

-32-
Arán.

Muñoz-Franco and Sánchez-Arán also concealed information

regarding Caguas' lending practices from external authorities.

Critically, Muñoz-Franco drafted and obtained Board approval to

send the Denby letter, which states: "This Board of Directors

wishes to state in no unclear and uncertain terms that it has never

considered and much less approved any policy or practice of

permitting borrowers to use construction loan proceeds to satisfy

or make interest payment[s] on other unrelated loans."17 At the

time of the letter, however, Muñoz-Franco and Sánchez-Arán had, as

discussed above, approved loans for such purposes on many

occasions.

Taken in the light most favorable to the government, the

evidence demonstrates that Muñoz-Franco and Sánchez-Arán repeatedly

concealed material information regarding the status of the

Gutiérrez loans from the Board, approved disbursements for work

that was not completed, and prevented audits. Such conduct caused

Caguas to continue lending money to Gutiérrez-owned companies

despite the companies' financial instability, which demonstrates

appellants' knowing scheme to defraud Caguas by means of material

misrepresentations within the meaning of 18 U.S.C. § 1344.

Consequently, we affirm the district court's finding that a

17
At trial, Joseph Gonzalez (an examiner for the Federal Home
Loan Bank) testified that "[a] loan that has a different borrower,
different property to me would be an unrelated loan."

-33-
rational jury could have found Muñoz-Franco and Sánchez-Arán guilty

of bank fraud.

2. Gutiérrez and Umpierre-Hernández

The record also contained considerable evidence from

which a reasonable jury could have found beyond a reasonable doubt

that Gutiérrez and Umpierre-Hernández knowingly engaged in a scheme

to defraud Caguas by misrepresenting material information. The

certifications they submitted and signed contained many

misrepresentations. For example, on the Los Mameyes project,

between December 9, 1985 and January 10, 1986, Gutiérrez and

Umpierre-Hernández submitted nine certifications attesting to the

manufacture of 74 housing units and requesting payments totaling

$380,000, even though the inspector's report stated that only 19

houses had been built. Between January 16 and February 21, 1986,

Gutiérrez and Umpierre-Hernández submitted 10 more certifications

attesting to the manufacture of 90 additional housing units and

requesting payment of approximately $500,000, at which point

payment had been disbursed for at least 164 housing units even

though only 40 units had been manufactured. As of February 25,

1986, Gutiérrez and Umpierre-Hernández had certified the completion

of 200 units, but an inspection report dated March 23, 1986,

indicated that only 55 units had been built. On March 31, 1986,

Gutiérrez and Umpierre-Hernández submitted a certification

requesting $69,000 for "payment of subcontractors" along with a

-34-
list of interest payments they had made on other projects,

including Jardines de Villa Alba, Levittown, Country Club, La

Marina, and Los Caciques, which equalled exactly $69,000. Finally,

on June 26, 1986, Gutiérrez and Umpierre-Hernández submitted a

"special certification" of $85,000 with no justification for work

allegedly completed; Kareh testified that such a certification was

not a usual practice. Sánchez-Arán authorized the disbursements

based on these certifications.

Gutiérrez and Umpierre-Hernández submitted similar

certifications for work not completed on other projects. For

example, on the Jardines de Villa Alba project, Modules had

installed only one unit as of the time of the Denby letter on

January 10, 1988; however, on October 22, 1985 Gutiérrez and

Umpierre-Hernández certified that twenty-two units had been

completed, causing $626,000 to be disbursed to Modules.

Gutiérrez and Umpierre-Hernández perpetuated their scheme

by recruiting other developers to obtain loans from Caguas on the

condition that they use Modules as the contractor. This conduct

allowed Gutiérrez and Umpierre-Hernández to obtain new funding for

Modules, which they would then use to pay down prior loans and keep

Modules from collapsing. Developer Burns, the original owner of

the Cerrovista project, was a typical example. After

unsuccessfully applying to Caguas for a loan to build residential

housing on land he owned, Burns met with Umpierre-Hernández, who

-35-
told him that if he used Modules as his contractor and signed a $2

million note he would be approved for a loan. A week later Burns

received financing for the Cerrovista project. He testified that

the approval was "[d]efinitely[] because of the use of Modules."

Burns met with Umpierre-Hernández on "many other occasions," and,

after problems arose with the Cerrovista project, with Umpierre-

Hernández and Sánchez-Arán in Sánchez-Arán's office. Subsequently,

Umpierre-Hernández told Burns that the project would be sold to

Iantho, and explained that "this project was going to contribute to

paying off some interest for some of the projects that were in

default," which caused Burns to understand "that was the

reason . . . I was rejected as sponsor."18

On September 10, 1986, Sánchez-Arán presented, and the

Board approved, a loan of $8.9 million to Iantho Corporation to

take over the Cerrovista project; the loan agreement specified that

Modules would be the contractor for the project's two hundred

units. Burns testified that, around the time the project was being

sold, he received confirmation that the Department of

Transportation's plans to build a hospital and expressway would

cause the development of four lots of the project to be "frozen."

When told the news, Umpierre-Hernández responded, "hide it, boy."

18
Gutiérrez and Umpierre-Hernández implemented similar schemes
involving developer Montilla on the Jardines de Villa Alba project
and developer Santiago on the Caciques project. The contours of
these schemes are similar to that involving Burns, and thus we need
not recount them in detail here.

-36-
On September 28, 1986, Cerrovista was sold to Iantho with no

mention of the impending development.

Taken in the light most favorable to the government, the

evidence shows that Gutiérrez and Umpierre-Hernández knowingly

concealed information relevant to the viability of the Cerrovista

project and submitted many certifications for work that was not

completed. To sustain their schemes, they recruited other

developers and helped them receive funding from Caguas on the

condition that these developers use Modules as a contractor. These

activities caused Caguas to continue lending money to Gutiérrez-

owned companies despite the companies' financial instability,

providing an ample basis for a jury to find that appellants

knowingly schemed to defraud Caguas by means of material

misrepresentations within the meaning of 18 U.S.C. § 1344.

Consequently, we conclude that a reasonable jury could have found

beyond a reasonable doubt that both Gutiérrez and Umpierre-

Hernández were guilty of bank fraud.

B. Conspiracy with Respect to the Gutiérrez Loans

The four appellants were charged with conspiring, in

violation of 18 U.S.C. § 371, to commit bank fraud (18 U.S.C. §

1344), misapply bank funds (18 U.S.C. § 657), and make false

entries in the books and records of the bank (18 U.S.C. § 1006).

To establish a conspiracy, the government must prove beyond a

reasonable doubt that (1) a conspiracy existed; (2) the defendant

-37-
knew of and voluntarily participated in the conspiracy; and (3)

there was an overt act in furtherance of the conspiracy. United

States v. Blasini-Lluberas, 169 F.3d 57, 67 (1st Cir. 1999).19 The

government must prove both intent to agree and intent to commit the

substantive offense. United States v. Rivera-Santiago, 872 F.2d

1073, 1079 (1st Cir. 1989). A formal agreement is not required,

Am. Tobacco Co. v. United States, 328 U.S. 781, 809 (1946); rather,

"[t]he agreement may be shown by a concert of action, all the

parties working together understandingly, with a single design for

the accomplishment of a common purpose." Am. Tobacco Co. v. United

States, 147 F.2d 93, 107 (6th Cir. 1944); see also Adver. Special

Nat'l Ass'n v. FTC, 238 F.2d 108, 115 (1st Cir. 1956). Where, as

here, the indictment alleges a conspiracy to commit multiple

offenses, the charge may be sustained by sufficient evidence of

conspiracy to commit any one of the offenses. See Griffin v.

United States, 502 U.S. 46, 56-57 (1991); see also United States v.

Wedelstedt, 589 F.2d 339, 341-42 (8th Cir. 1978)("[P]roof that

[defendant] agreed to commit one of the multiple illegal objectives

of the conspiracy sufficed to sustain the conviction on that

count.").

19
In pertinent part, 18 U.S.C. § 371 states: "If two or more
persons conspire either to commit any offense against the United
States, or to defraud the United States, . . . and one or more of
such persons do any act to effect the object of the conspiracy,
each shall be fined under this title or imprisoned not more than
five years, or both."

-38-
 On the verdict form, the jury found Muñoz-Franco,

Sánchez-Arán, Gutiérrez, and Umpierre-Hernández guilty of

conspiracy "as charged in the indictment." Docket Nos. 1291, 1292,

1294, 1295. In considering appellants' motion for judgment of

acquittal, the district court found that there was more than enough

evidence with respect to bank fraud to sustain the conspiracy

conviction, and thus did not review the evidence concerning the

misapplication and false entry crimes.

We agree with the district court's assessment. First,

there was substantial evidence of an agreement among the four men

to defraud the bank. Sánchez-Arán directly supervised the

Gutiérrez loans and worked closely with Muñoz-Franco on the loans.

Enriquez testified that Muñoz-Franco and Sánchez-Arán always

reached an agreement regarding the treatment of these loans.

Gutiérrez and Umpierre-Hernández submitted many certifications for

work not yet completed, and Sánchez-Arán then repeatedly approved

disbursements for this work. Sánchez-Arán also facilitated

Gutiérrez's efforts to secure new borrowers by ensuring that a loan

would be approved if Modules was used as a contractor. Sánchez-

Arán and Umpierre-Hernández met frequently regarding the status of

the Gutiérrez companies. Burns testified, for example, that he met

with Umpierre-Hernández many times in Sánchez-Arán's office

regarding the Cerrovista project. Finally, Muñoz-Franco and

Sánchez-Arán failed to disclose material information to the Board

-39-
on many occasions, and this joint failure further demonstrates

their collaboration in defrauding the bank.

Given the many instances of concealing the Gutiérrez

companies' performance from the Board of Directors, submitting

certifications for work not completed, authorizing disbursements

for such work and preventing audits, a reasonable jury could easily

find the other two elements of conspiracy: that appellants knew of

and participated voluntarily in the conspiracy, and that each

committed overt acts in furtherance of the conspiracy. Viewed as

a whole, this synchronized pattern of conduct demonstrates

appellants' agreement to maintain the appearance of financial

viability of the Gutiérrez corporations by securing new loans to

make payments on outstanding loans. Thus, we find that a

reasonable jury could have found each element of conspiracy beyond

a reasonable doubt with respect to each of the four appellants.

C. Misapplication of Bank Funds

The jury found all four appellants guilty of

misapplication of bank funds under 18 U.S.C. § 657 for a single

transaction related to the Cerrovista project. The crime of

misapplication eludes easy definition.20 As we have previously

20
In pertinent part, 18 U.S.C. § 657 provides: "Whoever, being
an officer, agent or employee of or connected in any capacity with
the Federal Deposit Insurance Corporation . . . or savings and loan
corporation or association authorized or acting under the laws of
the United States . . . embezzles, abstracts, purloins or willfully
misapplies any moneys, funds, credits, securities or other things
of value belonging to such institution . . . [is guilty of

-40-
noted, "[t]he problem that has confronted and perplexed the courts

is that there is no statutory definition or common law heritage

that gives content to the phrase 'willfully misapplies.'" United

States v. Wester, 90 F.3d 592, 595 (1st Cir. 1996). However, we

have held that misapplication has two key elements: (1) wrongful

use of bank funds; and (2) intent to injure or defraud a bank.

Blasini-Lluberas, 169 F.3d at 63. We have also explained that “the

same facts can easily be the basis for deeming the conduct to be

wrongful and the intent fraudulent; both misapplication and

scienter are required.” Wester, 90 F.3d at 595. Finally, the

misapplication statute applies only to officers, agents, and

employees of a bank. Thus, appellants who do not hold one of these

positions — here Gutiérrez and Umpierre-Hernández — may not be

convicted as principals for misapplication, but may be convicted as

aiders and abettors. See Giragosian v. United States, 349 F.2d

166, 167 (1st Cir. 1965)("Since [defendant] was not an officer,

director, agent or employee of the bank, he could not be guilty as

a principal . . . for misapplication of the bank's funds, but only

as an aider and abettor.").21

misapplication of bank funds]."
21
Giragosian construed 18 U.S.C. § 656, which deals with banks
rather than savings and loan associations. However, "[i]n the
absence of legislative history to suggest that there is any
substantive difference in meaning, we find the reasoning in cases
construing § 656 equally applicable to our reasoning" in cases
involving § 657. Blasini-Lluberas, 169 F.3d at 63 n.8.

-41-
 A reasonable jury could have concluded that appellants'

handling of the Cerrovista loan constituted misapplication. The

original loan offering, which was prepared according to Sánchez-

Arán's instructions, designated $1,412,177 for land costs and

$855,323 for "partial assumption of other loans."22 This document

did not disclose the purpose for which the funds were actually

used. Of the $1,412,177 designated for land, only $480,000 was

used to purchase land for the project. The remaining $932,177 was

disbursed to the Gutiérrez-owned Quintas de Humacao company and

immediately applied to other Gutiérrez projects: principal and

interest on the Quintas de Fajardo loan, interest on the Las

Gaviotas loan, and interest on a Modules commercial loan.

The documents associated with the Cerrovista loan

demonstrate appellants' intent to defraud Caguas by redirecting

these funds. Although the settlement statement23 for the Cerrovista

loan, dated September 29, 1986, lists a disbursement of $932,177

for "repayment of other loan" and lists the payee as "Quintas de

Humacao Inc. & Caguas Federal Savings," these disclosures appear in

22
The loan offering was a document prepared by bank management
(often Sánchez-Arán) that proposed the terms of a loan to be
offered to a borrower and was then submitted to the Board for
approval.
23
Kareh testified that the settlement statement "sums up the
conditions for the loan, the amount of the money, the payouts that
have been made for the loan and whatever pending balances may
remain for the loan in process" and was "created and maintained in
the regular course of business of the construction loan
department."

-42-
a markedly different type, as does the total loan amount. Kareh

testified that this different type indicates that "the entry was

made later or at another place," allowing an inference that the

document was amended to make it appear that the Board had approved

the use of loan proceeds to make payments on other loans. This

inference is bolstered by the fact that the loan settlement

statement was not prepared until after the Board had approved a

loan. Kareh also testified that, although the $855,323 amount

designated for "partial assumption of other loans" was listed on

the loan offering and disbursed on the date of closing, the

$855,323 amount was omitted from the settlement statement at

Sánchez-Arán's instruction.24 This omission concealed the fact that

two separate disbursements, in the amounts of $932,177 and

$855,323, were used to pay down other loans.

Each appellant was sufficiently involved in concealing

the use of funds to allow an inference of intent to defraud.

Sánchez-Arán drafted the original loan offering, which did not

disclose that the $932,177 difference between the amount allocated

for land purchase and the amount spent on land would be used to pay

principal and interest on other loans. Moreover, according to

Kareh, Sánchez-Arán explicitly instructed him to omit the $855,323

24
The district court's discussion of this issue suggests that
$932,177 was disbursed instead of $855,323, when in fact both
amounts were disbursed but the $855,323 was not disclosed on the
settlement statement.

-43-
amount from the loan settlement document. A jury could infer that

Muñoz-Franco helped to conceal this wrongful use of funds, thereby

intentionally defrauding Caguas, based on his supervisory role on

the Gutiérrez loans and his regular responsibility of conveying

information to the Board. Gutiérrez and Umpierre-Hernández were

also involved in the wrongful use of funds: they endorsed the

checks, accepted the funds, and immediately applied these funds to

pay down their other loans with the bank. Although appellants

assert that the loan settlement documents demonstrate that the

transaction was disclosed to the Board, the record indicates that

the loan settlement statement was prepared after the loan had

already been approved.

Appellants attempt to counter the charge by segregating

the activities relating to the Cerrovista loan into two separate

transactions: the disbursement of the $932,177 land purchase

differential to Quintas de Humacao, and the use of those funds to

pay down other Gutiérrez loans. They argue that, at the time the

funds were disbursed to the Gutiérrez-owned Quintas de Humacao,

they ceased to be "bank funds" under 18 U.S.C. § 657 and thus

cannot support a misapplication violation.

We do not find this technicality pertinent. The

disbursement of funds from the Cerrovista loan to Gutiérrez-owned

companies, and the subsequent use of these loans to pay down other

Gutiérrez loans, was a single unified transaction. The district

-44-
court explained:

The funds did not cease to be controlled by
the express purpose for which they were
disbursed. The fact the $932,177 check was
endorsed does not change the express purpose
for which said funds were to be used. The
second transfer, the Gutiérrez's endorsement
back to Caguas Central for the repayment of
four separate loans, is still the use of bank
funds and subject to misapplication.

By expressly designating these funds for "repayment of other

loan[s]," Muñoz-Franco and Sánchez-Arán retained control over the

funds even if the funds nominally changed hands. Moreover, Muñoz-

Franco and Sánchez-Arán supervised the entire transaction, as

demonstrated by four entries in Caguas' ledgers showing the

transfer of funds to the Gutiérrez accounts.

Critically, appellants also ignore the separate

concealment of the $855,323, which, although it was listed on the

original loan application, was left off of the loan settlement

statement of September 29, 1986 at Sánchez-Arán's explicit

instruction. Although the disbursement of the $855,323 was

disclosed to the Board, the fact that this disbursement was left

off the loan settlement statement indicates the bank officials'

efforts to conceal the fact that two separate disbursements, in the

amounts of $855,323 and $932,177, were used to pay down other

loans. In short, there was more than sufficient evidence for a

reasonable jury to conclude that appellants engaged in wrongful use

of bank funds with the intent to defraud the bank.

-45-
D. Bank Fraud with Respect to Mirandes Loans

The jury also found appellants Muñoz-Franco and Sánchez-

Arán guilty of bank fraud in violation of 18 U.S.C. § 1344 with

respect to the Mirandes loans. The Mirandes scheme involved many

of the same elements as the Gutiérrez loans. In September 1981,

Muñoz-Franco asked Mirandes to take over ownership of a project

called Reparto Valenciano, and Mirandes, then the contractor for

the project, agreed. At the time the project was in debt to Caguas

for $2.2 million, and delays and other problems continued after

Mirandes assumed ownership. On an ongoing basis, Muñoz-Franco and

Sánchez-Arán supervised the transfer of funds from other projects

to pay down the debt on the Reparto Valenciano project. For

example, on September 30, 1986, approximately $2.2 million was

applied to the Reparto Valenciano project from other Mirandes

projects.25 Muñoz-Franco and Sánchez-Arán did not disclose these

transfers of money among various Mirandes projects to the Board.

After the Reparto Valenciano debt increased to $3.2 million,

Mirandes received five contracts from the Puerto Rico Housing

Department to build basic housing. Although Caguas initially

denied Mirandes' application for funding for these projects, it

subsequently agreed to finance the Villas de Gurabo project if

Mirandes would agree to apply the profits of that project to the

25
These transfers occurred on the last day of the bank's
fiscal year, thus improving the appearance of Caguas' finances to
anyone reviewing the bank's records.

-46-
debt and interest of the Reparto Valenciano project. These

transfers temporarily sustained the Mirandes projects, but the

decreased funds available to successive projects ultimately made it

impossible for those projects to be completed or to yield profits.

Both Muñoz-Franco and Sánchez-Arán were intimately

involved with the administration of the Mirandes loans. Sánchez-

Arán met with Mirandes on many occasions, including, during one

seven or eight month period, meetings every fifteen days. Sánchez-

Arán was involved in most of the disbursements for the Mirandes

projects, whereas for other loans he was typically involved only if

a problem arose. Muñoz-Franco was also involved in the Mirandes

loans: he originally met with Mirandes to get him to take over the

loans, met with Mirandes several times thereafter, was regularly

informed of the loans' progress, and reported on the loans' status

to the Board.

Beginning thirty days after the Reparto Valenciano loan

agreement was signed, Sánchez-Arán authorized many certifications

for completed work. With two exceptions, no work on the project

had been completed at the time of the authorizations. On several

occasions, a transfer of funds from one loan to another or an

increase in the amount of a loan was authorized without the

approval of the loan committee or the Board. Mirandes also

testified that the disbursement schedule for loans "normally . . .

wasn't complied with because money was taken out to pay interest."

-47-
Thus, the disbursement schedule that the Board approved was not the

schedule that Muñoz-Franco and Sánchez-Arán subsequently followed.

Enriquez testified such practices were not standard at

Caguas; along with the Gutiérrez loans, the Mirandes loans were the

only ones for which disbursements were authorized for work that was

not completed. According to Enriquez, the Mirandes projects

commonly received "special" certifications, which meant that

"[w]hen one project didn't have a line [of credit] it would be

taken from another project." When regular certifications were

submitted, they would have an itemization of expenses attached;

special certifications would not include such an itemization and

thus would not disclose the destination of the funds.

Sánchez-Arán also caused Caguas to finance the sale of

land from one Mirandes company to another in order to pay interest

on the Reparto Valenciano loan. On September 11, 1984, Mirandes'

company Deproco purchased property for $60,000, and, three months

later, sold the property to Bubao, another Mirandes company, for

$94,000. The proceeds from the sale were used to pay interest on

the Reparto Valenciano loan. The sale occurred despite the fact

that, according to Mirandes, the land was not worth the purchase

price and no improvements to the land were made in the interim.

The minutes did not reflect that the Board was informed of the

transaction.

-48-
 After Mirandes was unable to improve the finances of the

Reparto Valenciano project, he was awarded five projects from the

Housing Department, including Villas de Gurabo, but was denied

funding from Caguas. At that point, Mirandes met with Muñoz-Franco

and Sánchez-Arán and asked to be released from the debt on the

Reparto Valenciano project because he "felt that the debt was not

my problem" and "needed to seek financing for the project from

another bank." Muñoz-Franco and Sánchez-Arán refused to release

Mirandes from the debt. Subsequently, however, Kareh informed

Mirandes that Caguas would give him financing on Villas de Gurabo,

but that the proceeds from that loan would have to be used to pay

off the debt on the Reparto Valenciano project. Mirandes

reluctantly agreed, and this plan was implemented. Again, the

minutes did not reflect that the Board was informed of this

transaction.

The Denby letter provides further support for the jury's

finding of fraud. Drafted and signed by Muñoz-Franco, it

explicitly denies that Caguas' Board approved the practice of

borrowers using construction loan proceeds to pay interest on

unrelated loans. At the time of the letter, however, Muñoz-Franco

and Sánchez-Arán had on many occasions authorized the payment of

debts on the Reparto Valenciano project with funds from other

Mirandes loans. The fact that the Denby letter was signed by all

the members of the Board would allow a reasonable jury to conclude

-49-
beyond a reasonable doubt that Muñoz-Franco misrepresented the

practices associated with the Mirandes loans to the Board.

This circumstantial evidence of the requisite intent was

bolstered by more explicit evidence of appellants' knowledge.

Mirandes was concerned that, on the Reparto Valenciano project,

"some projects were being emptied out in order to deal with others"

and worried that "it was going to become paralyzed." Mirandes

testified that he and Sánchez-Arán "spoke constantly" about his

concerns, and that he also expressed his concerns to Muñoz-Franco.

Despite Mirandes' repeated statements of concern, Sánchez-Arán

explicitly told Mirandes that the practices had to continue. In

many cases, the bank authorized the disbursements directly rather

than seeking authorization from Mirandes, and Mirandes testified

that, although he knew of these disbursements, he was not in

agreement with them. The evidence that appellants continued with

their scheme even over Mirandes' objections demonstrated that they

acted deliberately to defraud the bank.

Taken in the light most favorable to the government, the

evidence shows that Muñoz-Franco and Sánchez-Arán repeatedly

authorized disbursements for work that was not completed and

concealed relevant information from the Board. As a result of

these activities, Caguas continued lending money to Mirandes-owned

companies despite their financial instability. This course of

conduct constitutes a knowing scheme to defraud Caguas by means of

-50-
material misrepresentations within the meaning of 18 U.S.C. § 1344.

Consequently, we conclude that a reasonable jury could have found

beyond a reasonable doubt that Muñoz-Franco and Sánchez-Arán were

guilty of bank fraud with respect to the Mirandes loans.

E. Conspiracy with Respect to Mirandes Loans

The jury also found Muñoz-Franco and Sánchez-Arán guilty

of conspiracy with respect to the Mirandes loans. Although there

was no formal agreement among Muñoz-Franco, Sánchez-Arán and

Mirandes, the three acted in concert to defraud the bank. As

described above, Muñoz-Franco originally approached Mirandes to

assume the Reparto Valenciano loans, and Mirandes agreed. After

this initial agreement, Mirandes met frequently with Sánchez-Arán

and on several occasions with Muñoz-Franco.

The appellants participated voluntarily in the conspiracy

and took overt actions in its furtherance. When the Reparto

Valenciano project was unable to pay its debts, Muñoz-Franco and

Sánchez-Arán always attempted to find solutions to sustain the

project, frequently by transferring funds from one project to

another. Such transfers, as well as their approval of

certifications for work not completed, constituted overt acts in

furtherance of the conspiracy. Thus, we find sufficient evidence

to sustain the jury's verdict on charges of conspiracy to commit

bank fraud in violation of 18 U.S.C. § 1344 with respect to the

Mirandes loans.

-51-
 The district court held that the evidence of conspiracy

to commit bank fraud was sufficient in itself to sustain the

conspiracy charges, but also noted that there was sufficient

evidence that appellants conspired to misapply bank funds in

violation of 18 U.S.C. § 657 and make false entries in violation of

18 U.S.C. § 1006. However, because we agree with that court's

assessment of the bank fraud conspiracy, we need not discuss the

other two bases for the conspiracy conviction.

IV.

Having found sufficient evidence to support the

convictions, we must now address three of appellants' claims that

challenge the validity of the proceedings. First, appellants claim

that the charges filed against them were barred by the statute of

limitations. Second, they argue that their convictions violated

the Ex Post Facto Clause. Finally, they contend that their

convictions were invalid because of pre-indictment and pre-trial

delay.

A. Statute of Limitations

Under 18 U.S.C. § 3293, an individual may not be charged

with bank fraud or conspiracy to commit bank fraud unless the

indictment is returned within ten years after the commission of the

offense.26 Appellants raise three arguments regarding this statute

26
Appellants do not contend that the misapplication charges
against them were outside the statute of limitations.

-52-
of limitations. First, they argue that the original indictment was

untimely. Next, they argue that the First, Second, and Third

Superseding Indictments substantially amended the original

indictment, do not relate back, and consequently were untimely.

Finally, they argue that the district court erred in failing to

instruct the jury on the statute of limitations.

1. Timeliness of Original Indictment

We review de novo a district court’s decision not to

dismiss on statute of limitations grounds. López-Gonzáles v. Mun.

of Comerío, 404 F.3d 548, 551 (1st Cir. 2005). Here, the original

indictment was returned on November 22, 1995. Appellants contend

that the Board was fully informed of the practices at issue in two

of the alleged violations — bank fraud and conspiracy on the

Gutiérrez loans — by a regulator report dated August 31, 1985.

Consequently, they argue, any deception in the scheme ended more

than ten years prior to the original indictment, making the

indictment untimely for those charges.

In light of the activities discussed in Section III,

supra, most of which took place after November 22, 1985,

appellants' argument overstates the significance of the regulator

report in question. The report describes several Modules loans and

expresses general concern about Modules' financial state. The

report notes that the loans "are considered to be substandard loans

subject to special comment since the future viability of the main

-53-
borrower, Modules, could be impaired by uncertainties involving the

collectibility of an accounts receivable due from an affiliated

party." These general statements do nothing to inform the Board of

such practices as the use of proceeds from one loan to make

payments on another loan or the ongoing certification of and

payment for work that was not completed. Moreover, the report

itself contains certain misleading statements by Sánchez-Arán. For

example, despite his knowledge of Modules' uncertain financial

status and poor performance on several projects, he defended the

loans to Modules by explaining that "the borrower should have

sufficient funds to satisfy the loans in a timely manner." Thus,

the district court did not err in ruling that the original

indictment was timely.

2. Relation Back of Superseding Indictments

Appellants next argue that each of the three superseding

indictments materially broadened and substantially amended the

charges against them and, consequently, do not relate back to the

date of the original indictment. As a result, they argue that

these indictments are untimely because they allege conduct that

concluded more than ten years previously.

In United States v. O'Bryant, 998 F.2d 21, 23 (1st Cir.

1993), we held that "a superseding indictment which supplants a

timely-filed indictment . . . is itself to be regarded as timely

. . . so long as it neither materially broadens nor substantially

-54-
amends the charges against the defendant." Consequently, "the

superseding indictment relates back to the filing date of the

original indictment so long as a strong chain of continuity links

the earlier and later charges." Id. at 24. We emphasized that

"notice-related concerns . . . comprise the touchstone for

determining when a superseding indictment materially broadens or

substantially amends earlier charges," explaining that a timely

indictment serves notice by apprising defendants "'that they will

be called to account for their activities and should prepare a

defense.'" Id. (quoting United States v. Grady, 544 F.2d 598, 601

(2d Cir. 1976)).

In this case, the original indictment charged the four

appellants with bank fraud and conspiracy, alleging fifty-eight

overt acts spanning nearly a decade and involving unlawful

disbursement of bank funds by Muñoz-Franco and Sánchez-Arán,

unlawful receipt of the funds by Gutiérrez, Umpierre-Hernández, and

Mirandes, and concealment of these activities from Caguas' Board of

directors and regulatory agencies. The First Superseding

Indictment, returned on March 5, 1997, added allegations concerning

five additional loan projects and forty-four overt acts and added

two additional defendants.27 It also changed the alleged starting

date of the conspiracy from December 1981 to June 1980, lengthening

27
Defendant Enrique Gutiérrez was acquitted by the jury, and
defendant Rafael Dominguez Wolff died before trial.

-55-
the duration of the conspiracy from eight years and five months to

nine years and eleven months. The Second Superseding Indictment,

returned on May 13, 1997, added allegations about two more loan

projects and ten overt acts. Finally, the Third Superseding

Indictment, returned on March 6, 1998, separated the allegations

relating to the Gutiérrez and Mirandes loans, which the previous

indictments had presented as a single unitary conspiracy, into two

separate conspiracies set forth in separate counts.

We conclude that these revisions do not materially

broaden or substantially amend the original indictment. The

government "is not limited in its proof at trial to those overt

acts alleged in the indictment." United States v. Adamo, 534 F.2d

31, 38 (3d Cir. 1976). Therefore, allegations of additional loan

projects and overt acts in the superseding indictments do not

broaden the original indictment; they simply provide more specific

examples to substantiate the original fraud and conspiracy charges.

Similarly, the addition of eighteen months to the

beginning of a conspiracy spanning nearly a decade does not

materially broaden the scope of the indictment. Virtually none of

the conduct supporting appellants' convictions occurred between

June 1980 and December 1981, and the dates were expanded primarily

to allow factual completeness by including the dates of the

original loans Caguas extended to various companies. Thus,

-56-
appellants had adequate notice of the charges against them despite

the expanded time frame.28

Finally, we find that the separation of the original

unitary bank fraud and conspiracy scheme into two separate schemes,

one alleging bank fraud and conspiracy with respect to the

Gutiérrez loans and one alleging bank fraud and conspiracy with

respect to the Mirandes loans, did not materially broaden or

substantially amend the indictment. Muñoz-Franco and Sánchez-Arán

still had to explain the same set of actions. With respect to

Gutiérrez and Umpierre-Hernández, the division also provided

adequate notice. The only difference was that they no longer had

to contend with the allegations that related only to the Mirandes

loans. Thus, we conclude that the Third Superseding Indictment

relates back to November 22, 1995, the date of the original

indictment, and find no error in the district court's refusal to

dismiss the indictment for untimeliness.29

28
Courts have recognized an expanded time span as a
substantial amendment only when the expansion was far more
significant than the one here, and then only in conjunction with
numerous other factors. See, e.g., United States v. Ratcliff, 245
F.3d 1246, 1253-54 (11th Cir. 2001)(finding that a superseding
indictment materially broadened or substantially amended the
original indictment when it increased the length of time of the
conspiracy from six or seven months to thirteen years, increased
the number of conspirators from five to fifteen, and increased the
amount of marijuana imported from 1,500 pounds to 6,800 pounds).
29
Appellants present various arguments that the alleged
conduct concluded more than ten years prior to the dates of the
First, Second, and Third Superseding Indictments. However, because
we find that the superseding indictments did not materially broaden

-57-
 3. Jury Instruction on Statute of Limitations

Appellants also argue that the district court erred in

failing to instruct the jury on the statute of limitations on the

ground that the jury could have relied on conduct outside the

limitations period in finding defendants guilty. At trial,

however, Gutiérrez's attorney explicitly declined to seek a statute

of limitations instruction, and the other appellants made no

request for such an instruction.

We addressed a similar situation in United States v.

Walsh, 928 F.2d 7, 11-12 (1st Cir. 1991). There, we rejected the

defendant's claim that the district court should have issued an

instruction on the statute of limitations, explaining that the

defendant "failed to identify any point in the record where such an

instruction was requested. Absent such a request, the point was

waived." Id. at 12. This holding is logical because "[a] statute

of limitations claim presents ‘an affirmative defense’ that is ‘not

cognizable on appeal unless properly raised below.’" United States

v. Spero, 331 F.3d 57, 60 n.2 (2d Cir. 2003)(quoting United States

v. Walsh, 700 F.2d 846, 855-56 (2d Cir. 1983)). The situation here

is identical. We hold that because appellants failed to request an

instruction, the district court had no obligation to instruct sua

or substantially amend the charges, we need not address these
arguments.

-58-
sponte on the limitations issue.30

B. Ex Post Facto

Appellants claim that their convictions for bank fraud

and conspiracy violated the Ex Post Facto Clause, U.S. Const. art.

I, § 9, cl. 3, because the bank fraud statute, 18 U.S.C. § 1344,

was not enacted until October 12, 1984, and the jury could have

convicted them entirely on the basis of conduct that occurred prior

to that date.31

The Ex Post Facto Clause "'forbids the application of any

law or rule that increases punishment for pre-existing conduct.'"

United States v. Regan, 989 F.2d 44, 48 (1st Cir. 1993)(quoting

United States v. Havener, 905 F.2d 3, 5 (1st Cir. 1990)). For

"continuing offenses" such as the bank fraud and conspiracy charges

30
We also note that there was more than sufficient evidence
to allow a reasonable jury to conclude that the alleged offenses
were completed within the limitations period, see supra Section
III, and thus our holding that appellants waived their right to
request an instruction on the statute of limitations in no way
risks a miscarriage of justice.
31
With respect to the Gutiérrez loans, the indictment alleged
a conspiracy to commit bank fraud among all four appellants from
approximately June 25, 1980 through May 25, 1990. It also charged
those appellants with bank fraud with respect to those loans "on or
about the dates listed below" and listed a series of fifty-eight
overt acts, of which the earliest took place on March 24, 1977, and
the latest took place on December 19, 1989. With respect to the
Mirandes loans, the indictment alleged a conspiracy to commit bank
fraud between Muñoz-Franco and Sánchez-Arán from approximately
December 1981 through May 25, 1990. It also charged Muñoz-Franco
and Sánchez-Arán with bank fraud with respect to the Mirandes loans
"on or about the dates listed below" and listed a series of forty-
seven overt acts, of which the earliest took place in December 1981
and the latest took place on December 7, 1989.

-59-
at issue here, however, the critical question is when the conduct

ended.32 As we have explained, "[w]here a ‘continuing offense’

straddles the old and new law . . . applying the new is recognized

as constitutionally sound." Id. In other words, "[a] conviction

for a continuing offense straddling enactment of a statute will not

run afoul of the Ex Post Facto clause unless it was possible for

the jury, following the court's instructions, to convict

'exclusively' on pre-enactment conduct." United States v. Monaco,

194 F.3d 381, 386 (2d Cir. 1999)(citation omitted). As suggested,

"the question of whether the violation extended beyond the

effective date of [the statute is] one that ha[s] to be resolved by

the jury." United States v. Tykarsky, 446 F.3d 458, 480 (3d Cir.

2006).

Appellants contend that the district court should have

issued instructions informing the jury that it must find beyond a

reasonable doubt that the bank fraud and the conspiracy to commit

such fraud continued past October 12, 1984. In the absence of such

32
We have held that conspiracy is "often a continuing
offense," United States v. Welch, 15 F.3d 1202, 1207 (1st Cir.
1993), and, in the context of determining venue, we have
acknowledged that "[b]ank fraud is also a continuing offense,"
United States v. Scott, 270 F.3d 30, 36 (1st Cir. 2001). The other
circuits that have considered the issue generally have agreed that
both conspiracy and bank fraud are continuing offenses. See, e.g.,
United States v. Lemmon, 372 F.3d 535, 541 n.8 (3d Cir.
2004)(conspiracy); United States v. Nash, 115 F.3d 1431, 1440-41
(9th Cir. 1997)(bank fraud); United States v. Duncan, 42 F.3d 97,
104 (2d Cir. 1994)(bank fraud and conspiracy). Under the
circumstances present here, there is no question that the
conspiracy and bank fraud charges reflect continuing offenses.

-60-
an instruction, they argue, the jury's verdict was ambiguous

because it could have been premised exclusively on conduct that

occurred prior to the date of enactment. Under such circumstances,

a conviction either for bank fraud or conspiracy to commit bank

fraud would violate the Ex Post Facto Clause.

Appellants failed to raise the possibility of an ex post

facto violation at any time prior to or during trial, including in

their proposed jury instructions. They also failed to raise the

issue in their post-trial Rule 29 motions. In their pre-sentencing

briefs, they argued for the first time that their convictions

should be vacated on ex post facto grounds. The district court

rejected the claim.33

An unpreserved ex post facto claim is subject to plain

error review. See, e.g., Tykarsky, 446 F.3d at 479; United States

v. Julian, 427 F.3d 471, 481 (7th Cir. 2005). Under such review,

an appellant must show: "(1) that an error occurred (2) which was

clear or obvious and which not only (3) affected the defendant's

substantial rights, but also (4) seriously impaired the fairness,

integrity, or public reputation of judicial proceedings." United

States v. Duarte, 246 F.3d 56, 60 (1st Cir. 2001).

33
The court applied plain error review, finding that: (1) the
overwhelming weight of the evidence established bank fraud
continuing beyond the date § 1344 was enacted; (2) the conspiracy
statute, § 371, was valid prior to any of the conduct alleged; and
(3) the jury's conviction on the misapplication counts occurring in
1986 substantiated a finding of culpable conduct continuing beyond
the date § 1344 was enacted.

-61-
 In its brief, the government agrees that the district

court should have issued an instruction that the jury must find

that the conduct continued past the enactment date of the bank

fraud statute. Its position is consistent with recent circuit

court decisions holding that the failure to issue such an

instruction satisfies the first two prongs of the plain error

analysis by establishing that an error occurred that was obvious.

See Tykarsky, 446 F.3d at 479-80 ("[B]ecause the communications

spanned two different versions of the statute with different

minimum penalties, the question of whether the violation extended

beyond the effective date of the amended version was one that had

to be resolved by the jury . . . . We also conclude that the error

in not requiring a special jury finding was 'plain' in that it was

an obvious mistake in retrospect."); Julian, 427 F.3d at 482 ("This

was a plain error in the sense of being an obvious mistake in

retrospect."). Thus, our task is to determine whether this error

affected appellants' substantial rights, and, if so, whether the

fairness, integrity or public reputation of the judicial

proceedings was impaired.

The other circuits have taken varying approaches to

applying these prongs of the plain error test in assessing a

claimed ex post facto violation. In United States v. Calabrese,

825 F.2d 1342, 1346 (9th Cir. 1987), the Ninth Circuit held that

the "jury's verdict represents a finding that a crime was committed

-62-
as alleged in the indictment." Because the indictment alleged an

offense that continued past the date of enactment, the court

concluded that there was no plain error in the court's failure to

issue an instruction. Id.

The Fifth Circuit has examined the record to see whether

the bulk of the evidence occurred after the enactment of the

statute. In United States v. Todd, 735 F.2d 146 (5th Cir. 1984),

that court held that where "[m]ost of the evidence focused on

events that occurred within the effective date of the amendments,"

and "the record . . . clearly establishes violations of the amended

act by the appellants during the relevant time period," the failure

to give the jury instruction did not "result in the likelihood of

a grave miscarriage of justice or circumstances that seriously

affect the fairness, integrity, or public reputation of judicial

proceedings." Id. at 150.

The Second and Third Circuits have adopted an approach in

which prejudice is established if there was a reasonable

possibility that the jury convicted appellant on the basis of pre-

enactment conduct. In Tykarsky, for example, the Third Circuit

explained that a district court's failure to issue an instruction

means that a defendant "has been prejudiced if there is a

reasonable possibility that a jury, properly instructed on this

point, might have found [the defendant] guilty based exclusively on

acts that occurred before the increased penalty took effect." 446

-63-
F.3d at 480. The court noted that "[t]he most that can be said

here is that it is improbable, rather than impossible, as a factual

matter, that the jury convicted Tykarsky exclusively on the basis

of" pre-enactment conduct, which was "insufficient to persuade us

that [the defendant's] substantial rights were not affected." Id.

at 482.34 The court concluded that this prejudice "tainted the

integrity and reputation of the judicial process" and consequently

vacated the defendant's sentence and remanded to the district

court. Id. at 483.

Finally, in Julian, the Seventh Circuit considered an

alleged conspiracy and found, on the third prong of the plain error

analysis, that a court's failure to issue an ex post facto

instruction "affected [the defendant's] substantial rights in the

sense that it exposed him to a longer sentence." 427 F.3d at 482.

It then focused on the fourth prong, explaining that "[i]f a jury,

34
The Third Circuit's holding is similar to that of the Second
Circuit. See United States v. Harris, 79 F.3d 223, 229 (2d Cir.
1996)("Because the [ ] statute is a continuing crime statute, we
must determine whether it was possible for the jury, following the
district court's instructions, to convict [the defendant]
exclusively on pre-[ ]enactment conduct. After examining the jury
instructions, we think that such a scenario was impossible.").
Appellants also refer to United States v. Torres, 901 F.2d 205 (2d
Cir. 1990). However, that case is distinguishable because
appellants did raise a general ex post facto challenge before the
district court. Id. at 228. On appeal, the Second Circuit
discussed plain error review but did not explicitly apply such
review. Id. It concluded only that "it is inappropriate to impose
a mandatory life sentence upon [the defendants] where there was an
ex post facto violation in the instruction actually given, and the
defendants brought the general ex post facto question to the
attention of the district court." Id. at 229.

-64-
properly instructed on this point, might have found that the

conspiracy had come to an end before the increased penalty took

effect or that [defendant] had withdrawn from the conspiracy before

that date, then the error is one that implicates the fairness,

integrity, or public reputation of the judicial process." Id. It

concluded that a reasonable jury could not have found that the

conspiracy at issue ended prior to the enactment date of the

statute. Id. at 483.

Ultimately, we need not settle on a rule here. The plain

error analysis used by the Second and Third Circuits is most

favorable to defendants because it requires a finding of prejudice

if there was a "reasonable possibility" that the jury convicted

appellants solely on the basis of pre-enactment conduct. Here,

even under that test, appellants cannot demonstrate an ex post

facto violation because no reasonable jury would have convicted

appellants based exclusively on conduct that occurred prior to the

enactment date. Moreover, even if we were to apply the

"miscarriage of justice" approach of the Seventh Circuit, we would

conclude there was no miscarriage of justice here because the

government presented so much evidence of the involvement of the

defendants in the ongoing conspiracy and bank fraud following the

enactment of the bank fraud statute in 1984.

As the district court correctly noted, the government

presented overwhelming evidence of appellants' conduct, the

-65-
majority of which occurred after October 12, 1984. Relatively few

of the overt acts for any of the charges alleged in the indictment

occurred prior to October 12, 1984: only twelve of fifty-eight

overt acts on the charges of conspiracy and bank fraud with respect

to the Gutiérrez loans, and only ten of forty-seven acts on the

charges of conspiracy and bank fraud with respect to the Mirandes

loans. The government presented considerable evidence of

activities occurring after October 12, 1984, including all of the

transactions involving the Los Mameyes project, all of the

transactions involving the Jardines de Villa Alba project, and many

of the transactions involving the Reparto Valenciano project. The

Denby letter, which contained several material misrepresentations,

was not signed until 1987. Indeed, the bulk of our sufficiency

analysis details conduct occurring after the enactment date. See

Section III, supra.

Moreover, we find nothing to differentiate appellants'

pre-enactment conduct from subsequent conduct. The government's

key witnesses — Lugo, Mirandes, Enriquez, Somohano and Kareh —

testified to conduct that occurred both before and after the

enactment date. Given that the testimony of these witnesses

spanned the enactment date, we find it implausible that the jury

would find such testimony compelling only for events that occurred

prior to October 12, 1984. Similarly, no transformative event

occurred prior to October 12, 1984 that would alter a reasonable

-66-
jury's perception of the nature of any appellant's involvement.

Although appellant Gutiérrez protests that he sold his construction

loans with Caguas on October 29, 1984, and sold Modules on December

31, 1985, it is uncontested that he and Umpierre-Hernández remained

employed by the company, and the record contains evidence that

their culpable conduct (such as submitting certifications for

incomplete work) continued uninterrupted after the sale of the

company.

Because we see no reason to differentiate the conduct

occurring prior to the enactment date, we find that a reasonable

jury would not have convicted the appellants based solely on pre-

enactment conduct. Thus, appellants were not prejudiced, nor did

their convictions implicate the fairness or integrity of the

judicial process. We conclude that there is no plain error from

the absence of a limiting instruction on the ex post facto issue.

C. Pre-Indictment and Pre-Trial Delay

Appellants argue that the district court erred in

refusing to dismiss on the grounds that (1) the five-year pre-

indictment delay violated their Fifth Amendment right to due

process, and (2) the five-year pre-trial delay violated their Sixth

Amendment right to a speedy trial. We review both claims for abuse

of discretion. United States v. Picciandra, 788 F.2d 39, 43 (1st

Cir. 1986)("[T]he district court did not abuse its discretion in

holding that the pre-indictment delays did not violate the

-67-
defendants' fifth amendment rights of due process."); United States

v. Salimonu, 182 F.3d 63, 69 (1st Cir. 1997)("This circuit reviews

a district court's ruling on a Sixth Amendment speedy trial claim

for abuse of discretion.").

1. Pre-Indictment Delay

In United States v. Lovasco, 431 U.S. 783 (1977), the

Supreme Court noted that "statutes of limitations, which provide

predictable, legislatively enacted limits on prosecutorial delay,

provide the primary guarantee[] against bringing overly stale

criminal charges." Id. at 789 (citations and internal quotation

marks omitted). However, the Court also acknowledged that "the Due

Process Clause has a limited role to play in protecting against

oppressive delay." Id. A prosecutor is not obliged to file

charges as soon as probable cause exists, id. at 791, and has "wide

discretion" in delaying indictment "limited only by the requirement

that it not violate those 'fundamental conceptions of justice which

lie at the base of our civil and political institutions,'" United

States v. Ciampaglia, 628 F.2d 632, 639 (1st Cir. 1980)(quoting

Lovasco, 431 U.S. at 790). To show a violation of "those

'fundamental conceptions of justice' a defendant must prove that

(1) pre-indictment delay caused substantial prejudice to his right

to a fair trial and, (2) the Government intentionally delayed

indictment in order to gain a tactical advantage over the accused."

Picciandra, 788 F.2d at 42 (citation omitted). With respect to

-68-
prejudice, a defendant must do more than allege that witnesses'

memories had faded or that evidence had been lost that might have

been helpful to him. United States v. Lieberman, 608 F.2d 889, 902

(1st Cir. 1979).

Appellants have failed to meet that burden here. They

assert that they suffered prejudice from the unavailability of

nineteen potential defense witnesses.35 However, we find that the

unavailability of these nineteen individuals did not impair

appellants' defense, either because appellants could have, but did

not, obtain testimony from similarly situated individuals who were

available to testify; or because appellants failed to demonstrate

that the testimony of these individuals would have included

exculpatory evidence.

Of the nineteen unavailable witnesses, appellants contend

that the deaths of two individuals — Phillip Saffold and Luis Dorta

— prevented cross-examination relating to reports these witnesses

prepared. Saffold was an investigator who authored reports that

appellants claim would have allowed them to impeach Roman Cruz, a

plant manager who testified that buildings were not built at the

Modules plant; however, Cruz's testimony was a minor part of the

government's case against appellants and appellants' inability to

impeach Cruz did not significantly prejudice them. Similarly,

35
Of these nineteen unavailable witnesses, fifteen had died,
three were seriously ill, and one could not be located.

-69-
Dorta inspected the Transglobe and Modules sites and prepared

reports that were admitted at trial; appellants emphasize that his

death prevented them from cross-examining him, but do not specify

how this opportunity would have helped their case.

Appellants claim that nine other unavailable witnesses

(Gilberto Pol Segarra, Luis Acevedo Gonzalez, Jaime Sitiriche, Juan

Hernández, Celestino Seneriz, Pedro Bull Nater, Francisco Susoni

Lens, Jose Feliciano, and Rafael Toro Nazario) were members of the

Board who "could have testified to the extent of the disclosures

made to the Board, in response to Lugo[]'s imprecise testimony."

However, appellants offer no reason to believe that these Board

members would have offered testimony contradictory to Lugo's.

Moreover, appellants do not explain why they did not call as

witnesses other Board members who were available to testify

throughout the trial.

Finally, appellants contend that the remaining eight

unavailable witnesses (Gilberto Mayo Aguayo, Nelson Soto Velasquez,

Stephen P. Radics, Emil de Pentima, Troy Chapman, Stanley

Orenstein, Hugo Lopez, and Fernando Rivera) "could have testified"

or "could have confirmed" information relating to financial

practices at Caguas, without offering any evidence that these

individuals would, in fact, have been able to provide such

testimony.

-70-
 Similarly, appellants protest the unavailability of three

sets of documents: inspection reports, commercial loan files, and

miscellaneous Modules documents. With respect to the first two

sets of documents, however, appellants make no attempt to establish

that the reports disappeared after indictment but prior to trial.

With respect to the third, appellants claim only that "the

unavailability of the Modules documents made it impossible to

fairly cross examine [Transhore and Modules accountant Jorge]

Fabrigas" and that, generally, the evidence might have allowed them

to refresh witness recollection and corroborate their defense.

However, Fabrigas' testimony was a minor part of the trial, and

these generalized objections do not establish prejudice resulting

from an impaired defense.

Even if appellants had demonstrated some degree of

prejudice from the delay, they have made no concomitant showing

that the government intentionally delayed indictment to gain

tactical advantage. Thus, we conclude that the district court did

not abuse its discretion in denying their motion to dismiss for

pre-indictment delay.

2. Pre-Trial Delay

The Sixth Amendment right to a speedy and public trial

attaches upon arrest or indictment, whichever occurs first. United

States v. MacDonald, 456 U.S. 1, 6-7 (1982). Thus, the time frame

relevant to appellants' claim extends from the date of indictment,

-71-
November 22, 1995, until the date of trial, January 29, 2001 — a

span of over five years. We note that appellants do not raise a

claim under the Speedy Trial Act, 18 U.S.C. § 3161, and thus their

claim is based exclusively on constitutional rather than statutory

grounds.

In Barker v. Wingo, 407 U.S. 514 (1972), the Supreme

Court established a four-part balancing test to determine whether

a defendant's Sixth Amendment right to a speedy trial has been

violated. Under Barker, a court should consider: (1) the length of

the delay; (2) the reasons for the delay; (3) the defendant's

assertion of his speedy trial right; and (4) the prejudice to the

defendant caused by the delay. Id. at 530. However, the Court

identified the first factor, the length of the delay, as "to some

extent a triggering mechanism. Until there is some delay which is

presumptively prejudicial, there is no necessity for inquiry into

the other factors that go into the balance." Id. The Court also

has indicated that post-accusation delay approaching one year is

presumptively prejudicial. Doggett v. United States, 505 U.S. 647,

652 n.1 (1992). Consequently, the five-and-a-half year delay in

this case creates a presumption of prejudice.

Under Barker, we must then consider the remaining three

factors. We have described the second factor, the reasons for the

delay, as "'the focal inquiry.'" See, e.g., United States v.

Santiago-Becerril, 130 F.3d 11, 22 (1st Cir. 1997)(citation

-72-
omitted). Here, there are two main reasons for the pre-trial

delay. First, the appellants filed numerous requests for

continuances, some of which the district court granted, as well as

many motions requiring time and consideration by the district

court.36 Second, two days before the trial was originally scheduled

to begin on May 26, 1998, the government filed a motion to

disqualify the trial judge assigned to the case on the ground that

she had a banking relationship with Caguas that might prejudice her

in the trial of the case. The district court originally denied the

motion to disqualify and the government sought mandamus from this

court. We denied mandamus, but noted that "the judge would have

been well-advised either to bow out of the case or to ask that the

recusal motion be assigned to a different judge for hearing" and

that "the government hardly can be faulted for bringing" the

motion. In re United States, 158 F.3d 26, 33-34 (1st Cir. 1998).37

36
For example, on August 27, 1997, Muñoz-Franco filed
seventeen separate motions, including one entitled "Motion
Requesting Order Concerning Additional Motions." Similarly, on
March 24, 1998, Gutiérrez filed what the district court termed a
"deluge" of "ten separate and distinct motions of varying
complexity."
37
Appellants imply that the government acted in bad faith by
waiting to file the recusal motion until immediately prior to
trial. However, the government explains that it did not learn
about the banking relationship until one year prior to trial, and
was delayed in learning the details of the relationship due to
resistance to the subpoenas it filed. In fact, the government
still had not been able to obtain some of the documents it
requested by the time it filed the recusal motion. In light of
this explanation, and the fact that appellants produced no evidence
of bad faith on the part of the government below, we still have no

-73-
The trial judge assigned to the case then recused herself

voluntarily, resulting in a delay in the proceedings of

approximately one year. In sum, the pre-trial delay arose largely

from the complexity of the case and the events related to the

recusal.

The third Barker factor weighs in favor of appellants.

They raised their speedy trial objection three times during the

proceedings below, and now renew that objection.

The Supreme Court has held that the final Barker factor

— prejudice to appellants — "should be assessed in the light of the

interests of defendants which the speedy trial right was designed

to protect." Barker, 407 U.S. at 532. The Court identified three

such interests: "(i) to protect oppressive pretrial incarceration;

(ii) to minimize anxiety and concern of the accused; and (iii) to

limit the possibility that the defense will be impaired." Id. The

first of these interests has no bearing here because appellants

remained free prior to trial. With respect to the second interest,

"considerable anxiety normally attends the initiation and pendency

of criminal charges; hence only 'undue pressures' are considered."

Santiago-Becerril, 130 F.3d at 23 (citations omitted). Appellants

allege no such "undue pressure," and therefore we assign negligible

weight to this interest. Finally, in our discussion of pre-

indictment delay, we have already analyzed appellants' arguments

basis for questioning the government's explanation.

-74-
that their defense was impaired. These arguments are equally

applicable to the pre-trial time frame, and we find no material

prejudice resulting from the delay.38

The five years that elapsed between indictment and trial

is a troublesome length of time. Nonetheless, our inquiry has

revealed no constitutional violation. Thus, after considering the

factors listed in Barker, we conclude that the district court did

not abuse its discretion in denying appellants' motion to dismiss

for pre-trial delay.

V.

Appellants also raise several challenges to evidence they

contend was improperly admitted. We address these claims in turn.

A. Evidence Regarding Loss

Appellants challenge three aspects of the admission and

treatment of evidence regarding financial loss to Caguas. First,

they protest that such evidence was irrelevant and prejudicial in

violation of Federal Rule of Evidence 403. Second, they argue more

specifically that the government's Exhibit 40, aspects of which

were later shown to be inaccurate, was erroneously admitted.

38
We note that, of the nineteen unavailable witnesses that
appellants name in their brief, five of these witnesses (Hugo
Lopez, Celestino Seneriz, Pedro Bull Nater, Francisco Susoni Lens,
and Jose Feliciano) died prior to indictment and, consequently,
their unavailability does not implicate the Sixth Amendment
analysis under Barker. See MacDonald, 456 U.S. at 7 ("[N]o Sixth
Amendment right to a speedy trial arises until charges are
pending.").

-75-
Finally, they argue that, even if evidence of loss and Exhibit 40

were properly admitted, the district court erred in refusing to

guide the jury with an instruction about the enactment of the

Financial Institutions Reform, Recovery, and Enforcement Act of

1989 ("FIRREA"), Pub. L. No. 101-73, 103 Stat. 183 (codified in

scattered sections of 12 U.S.C.).

1. General Evidence of Loss

We review evidentiary rulings on relevance and unfair

prejudice for abuse of discretion. United States v. Richardson,

421 F.3d 17, 37-38 (1st Cir. 2005). Loss is not an element of bank

fraud. United States v. Blasini-Lluberas, 169 F.3d 57, 65 (1st

Cir. 1999). However, courts have held repeatedly that loss is

relevant in fraud cases to demonstrate a defendant's knowledge or

intent to commit fraud. See, e.g., United States v. Heimann, 705

F.2d 662, 669 (2d Cir. 1983)("While technically the success or

failure of a scheme to defraud is irrelevant in a mail fraud case,

realistically, when the contested issue is intent, whether or not

victims lost money can be a substantial factor in a jury's

determination of guilt or innocence." (citation omitted)). Thus,

while "an ultimate purpose of either causing some financial loss to

another or bringing about some financial gain to oneself is not the

essence of fraudulent intent," United States v. Kenrick, 221 F.3d

19, 29 (1st Cir. 2000)(citation and internal quotation marks

-76-
omitted), the knowledge that one's actions are, in fact, bringing

about such losses may demonstrate one's intent to commit fraud.

In this case, the government referred to loss throughout

the trial to demonstrate appellants' knowledge of the consequences

of their ongoing practices of using loan proceeds to make principal

and interest payments on unrelated loans, authorizing disbursements

for work not completed, and using funds for purposes not authorized

by the Board. For example, during its opening statement and

closing argument, the government noted that federal regulators

closed Caguas in 1990 due to the bank's lack of funds. On a few

occasions, the government also questioned witnesses about the

amount of loss that certain projects sustained and whether those

losses would have caused concern. However, these references did

not dominate the evidence because the government also presented

considerable other evidence of defendants' conduct, as we have

discussed at length in Section III, supra. Moreover, the district

court carefully managed the effect of evidence relating to loss on

the jury by preventing both parties from addressing loss in their

closing arguments and instructing the jury that loss was not an

element of the offenses charged. Finally, the court permitted

appellants to cross-examine vigorously the government witnesses who

discussed loss.

In sum, the general references to loss were relevant as

a means of demonstrating appellants' intent to defraud Caguas, and,

-77-
given the carefully limited presentation of this evidence to the

jury, were not unduly prejudicial. The district court did not

abuse its discretion in admitting this evidence.

2. Exhibit 40

Following Caguas' closure in 1990, Banco Santander

acquired many of its assets, and prepared a document — government

Exhibit 40 — listing hundreds of Caguas' loans, the outstanding

balances on those loans, Banco Santander's valuation of the loans,

and the resulting discount (the difference between the outstanding

balance of the loan and the loan's value). At trial, Banco

Santander's comptroller attested that the bank had acquired all of

the loans summarized in Exhibit 40, and the exhibit served as part

of the basis for expert testimony regarding accounting practices by

Kathy McKinless, a partner at an accounting firm. By the time of

sentencing, however, the government discovered that the Resolution

Trust Company ("RTC"), a government-owned asset management company,

had retained many of the loans. Thus, the exhibit could not

actually have reflected valuations of the loans made by Banco

Santander upon purchase, and was not a reliable means of

establishing the magnitude of the loss experienced by Caguas.

Appellants now contend that Exhibit 40 was both

testimonial, in violation of the Confrontation Clause, and that the

exhibit was improperly admitted under the Federal Rules of

Evidence. The government's acknowledgment that Exhibit 40

-78-
contained inaccurate information indicates that the exhibit should

have been excluded on that basis alone. However, we agree with the

district court that any error in its admission was harmless. Under

Fahy v. Connecticut, 375 U.S. 85, 86-87 (1963), the critical

question in assessing harmless error is "whether there is a

reasonable possibility that the evidence complained of might have

contributed to the conviction."

Several circumstances indicate that there is no

reasonable possibility that Exhibit 40 contributed to the

convictions here. First, the exhibit was relevant only to prove

appellants' fraudulent intent, and the government presented

considerable evidence of this intent from other sources. Second,

the court explicitly instructed the jury that loss was not an

element of bank fraud. Third, the exhibit was the subject of

direct examination for less than one-half of one day of a trial

spanning fifteen months. Fourth, defense counsel subjected

McKinless to searching cross-examination regarding the exhibit,

revealing several typographical errors and inaccuracies and

eliciting McKinless' acknowledgment that she could not confirm the

document's completeness. Finally, even if the loss calculations in

Exhibit 40 were not entirely accurate, other evidence at trial

demonstrated that Caguas suffered large losses on many of the loans

at issue. To some extent, the Exhibit 40 calculations replicated

evidence already in the record. Taking into account all of these

-79-
circumstances, there is no reasonable possibility that the isolated

use of Exhibit 40 could have contributed to appellants'

convictions, and thus any error in its admission was harmless.

3. Jury Instruction on Loss

Appellants also challenge the district court's refusal to

give an instruction explaining that, when FIRREA was enacted in

1989, "many institutions immediately fell out of compliance with

regulatory capital requirements, making them subject to seizure by

thrift regulators." United States v. Winstar Corp., 518 U.S. 839,

857-58 (1996). Appellants contend that, given the admission of

evidence relating to financial loss, the jury should have been

instructed that bank failures were common in the aftermath of

FIRREA's enactment. In other words, the jury should have been told

that banks commonly lost money in the absence of fraud.

A district court's refusal to issue a jury instruction

"'constitutes reversible error only if the requested instruction

was (1) correct as a matter of substantive law, (2) not

substantially incorporated into the charge as rendered, and (3)

integral to an important point in the case.'" White v. N.H. Dep't

of Corrs., 221 F.3d 254, 263-64 (1st Cir. 2000)(citation omitted).

No such error occurred here. The FIRREA instruction was not

integral to an important point in the case because loss is not an

element of bank fraud. Moreover, the jury was instructed that the

-80-
government need not prove loss. Thus, we find no reversible error

in the distrct court's decision.

B. Forgery and Check-Kiting Evidence

Appellants assert that the admission of evidence

regarding forged signatures on checks and evidence of a check-

kiting scheme constructively amended the indictment. A

constructive amendment occurs “‘when the charging terms of the

indictment are altered’ at trial so that they are different from

those handed up by the grand jury.” United States v. Rodriguez,

215 F.3d 110, 118 (1st Cir. 2000)(quoting United States v. Portela,

167 F.3d 687, 701 (1st Cir. 1999)). Appellants also argue that

this evidence constituted an improper variance from the indictment.

A variance occurs when the proof differs from the indictment's

allegations, and "is material and reversible only if it has

affected the defendant's 'substantial rights': to be informed of

the charges; and to prevent a second prosecution for the same

offense." United States v. Vavlitis, 9 F.3d 206, 210 (1st Cir.

1993)(citation omitted).

At trial, the government introduced evidence that

numerous checks issued by Caguas and made payable jointly to

Gutiérrez companies and third party contractors were deposited in

the accounts of the Gutiérrez companies after the contractor's

-81-
endorsement was fraudulently added to the checks.39 The government

elicited this testimony as evidence of appellants' intent to

defraud the bank.

The district court addressed the forgery evidence in an

order denying appellants' motion to exclude it. The court found

that such evidence caused neither a constructive amendment nor a

variance, explaining that, "[s]ince some of the checks issued by

Caguas [that were ultimately used to make payments on failing

loans] were jointly issued to innocent third party payees, these

payees' endorsement would have been required before the checks

could actually be cashed or deposited in the bank." Since

"disbursement of the funds could not be completed until the checks

were cashed . . . in some cases forged endorsements would

necessarily be required." The court concluded that, rather than

constructively amending or varying the indictment, the forged

endorsements were direct evidence of one component of appellants'

scheme. Finally, to foreclose any possibility that the jury would

convict appellants based on the forgery evidence, the court issued

thorough instructions regarding the elements of bank fraud and

39
For example, the government elicited testimony from Luis
Garate, the former vice president of Bermudez and Longo, Inc., a
construction contractor in electrical and building mechanics.
Bermudez and Longo worked with the Gutiérrez company Transglobe on
the Modules project. Garate testified that he did not recognize
the endorsements on fifteen checks, totalling over $67,000, that
were issued by Caguas and made payable jointly to Transglobe and
Bermudez and Longo.

-82-
conspiracy as well as an instruction specifically tailored to the

evidence of forgery: "You have heard evidence about checks with

allegedly forged endorsements. The crime of forgery is not charged

. . . . The fact that endorsements may be forged may only be used

to assist you, as you may find useful, in your evaluation of all

the evidence in the case . . . ."40

The district court's order accurately assesses the value

of the forgery evidence, and the admission of such evidence did not

constructively amend the indictment or result in a variance. We

further conclude that its instruction was more than sufficient to

inform the jury of the proper role of that evidence.

We view the check-kiting evidence similarly. The

disputed evidence consisted of testimony from Somohano (the vice

president of Caguas' commercial loan department) that in 1983 he

detected a check-kiting scheme involving two Gutiérrez

corporations' accounts at Caguas and Banco de Ponce. When he

informed Muñoz-Franco and Sánchez-Arán, Muñoz-Franco scolded

Somohano and denied that check-kiting was occurring. Somohano

further testified that Sánchez-Arán continued to honor the checks

sent to Caguas even after Banco de Ponce stopped honoring checks

40
Appellants did not object to the instruction, and
consequently the objections to the instruction that they raise on
appeal are reviewable only for plain error. See Fed. R. Crim. P.
30(d)("A party who objects to any portion of the instructions or to
a failure to give a requested instruction must inform the court .
. . before the jury retires to deliberate."). We see no such error
in the clear instruction issued here.

-83-
deposited with them. The check-kiting continued, resulting in

overdrafts of more than $900,000 on the Gutiérrez-owned companies'

accounts at Caguas. This overdraft ultimately was converted into

a loan.

The district court did not err in admitting this

evidence. The reactions of Muñoz-Franco and Sánchez-Arán when

Somohano told them about the check-kiting scheme demonstrate both

their goal of preserving the Gutiérrez-owned companies' financial

status and the preferential treatment that these companies

received. This evidence was directly relevant to the charges of

bank fraud and conspiracy, and was not outside the scope of the

original indictment. Thus, we conclude that no constructive

amendment or improper variance occurred.

C. Evidence of Civil and Regulatory Violations

Appellants also protest that the district court

improperly admitted evidence of civil and regulatory banking

violations. Again, we review this evidentiary ruling for abuse of

discretion. Richardson, 421 F.3d at 37-38.

Evidence of civil or regulatory violations is admissible

so long as "the evidence is not presented in such a way that the

jury's attention is focused on the civil violations rather than the

criminal ones." United States v. Stefan, 784 F.2d 1093, 1098 (11th

Cir. 1986). The concern is that such evidence could create an

"alternative standard of guilt." United States v. Christo, 614

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F.2d 486, 491 (5th Cir. 1980)(prohibiting the introduction of civil

banking statutory violations solely for the purpose of proving

criminal misapplication).

Courts have allowed the introduction of evidence of civil

and regulatory violations in a variety of situations. In United

States v. Devin, 918 F.2d 280, 287 (1st Cir. 1990), we found no

abuse of discretion in a district court's decision to allow

evidence of violations of police department regulations to

demonstrate the knowledge and intent of a police officer charged

with RICO violations and attempted extortion. We explained that

"[s]uch evidence was unquestionably helpful to the jury in

determining whether . . . [the officer] was willing to disregard

his sworn obligations and accept things of value which influenced

his performance of official duties." Id. Similarly, in Stefan,

the district court permitted the government to introduce testimony

regarding violations of a civil regulatory banking statute and

charts illustrating how certain loans at issue contravened the

statute. It also allowed the government to refer to the statutory

violations in its opening statement and closing argument, and even

"focused the jury's attention" on the statute in the instructions.

784 F.2d at 1097. On appeal, the Eleventh Circuit found that the

defendant's scheme included efforts to avoid this statute, and that

the district court therefore did not abuse its discretion in

admitting such evidence to help the jury understand the scheme. In

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both of these cases, the courts placed emphasis on a jury

instruction which made clear that civil or regulatory violations

did not equate to criminal conduct. See Devin, 918 F.2d at 288

n.9; Stefan, 784 F.2d at 1099.41

Here, the court allowed the government to introduce

evidence that defendants violated certain regulations of the

Federal Home Loan Bank to provide context for their actions and to

establish their knowledge of the impropriety of their activities.

Although such evidence was discussed from time to time, it was not

central to the government's case, as our lengthy discussion of the

sufficiency of the evidence demonstrates, see Section III, supra.

Moreover, the district court issued a limiting

instruction on the use of evidence of civil and regulatory

violations:

You have heard testimony and evidence
that certain civil rules and/or regulations
which govern the conduct of banks may not have
been followed at times at Caguas.
You are hereby instructed that a
violation of any of these rules and
regulations is not a crime in and of itself,
and is not determinative of a defendant's
guilt or innocence.
The fact that certain civil rules and
regulations may have been violated at Caguas

41
For example, the instruction in Devin stated: "[R]ules and
regulations of the Boston Police Department were admitted into
evidence in this case. And while they may be relevant in order to
show a guideline or a code of conduct to a particular job, the
defendant is not here because he violated a rule or regulation. He
is charged here with violations of certain specific laws, not rules
or regulations." 918 F.2d at 288.

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 may only be used by you to assist you, as you
may find useful, in determining a particular
defendant's motive or intent as to the crimes
charged in the third superseding indictment.

This instruction clearly conveys that civil and regulatory

violations do not establish criminal culpability. Appellants

protest that the instruction exacerbated the problem because the

reference to "the fact that certain rules and regulations may have

been violated" improperly suggested that such rules and regulations

had been violated. However, we see no such suggestion because the

phrase "may have been violated" makes clear to the jury that, if it

found that such violations had occurred, it could use those

violations as one piece of evidence in determining the ultimate

question of criminal guilt or innocence. Given this appropriate

limiting instruction, we find that the district court did not abuse

its discretion by admitting evidence of regulatory violations to

provide context and to demonstrate appellants' knowledge of their

criminal conduct.

VI.

Appellants challenge other aspects of the proceedings

against them, including the length of the trial, allegedly

disparaging and misleading statements by the prosecutor, the jury

instruction on misapplication, and alleged error in sentencing. We

now turn to these remaining issues.

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A. Length of Trial

Appellants argue that the sheer length of the trial and

the repetitive nature of the government's evidence denied them due

process. In denying appellants' motions for judgment of acquittal

on these grounds, the district court devoted more than ten pages of

its seventy-seven page opinion to a thorough examination of this

issue. We largely agree with its analysis. Thus, we merely

summarize its conclusions here and note only a few additional

points.

The trial lasted for fifteen months and the prosecution's

case lasted far longer than appellants' case. However, appellants

bore much of the responsibility for the length of the trial. They

either requested or agreed to several continuances after the trial

began.42 In response to the jury's request that the trial occur

five days per week, they requested that trial occur only four days

per week. Moreover, much of the time devoted to the government's

case consisted of the vigorous and lengthy cross-examination to

which the defense subjected government witnesses. Finally, nearly

all of the witnesses testified in Spanish and required the use of

42
In July 2001, the trial judge notified the parties that he
had a vacation scheduled for two weeks in September but stated that
he was "willing to forego, if there is absolutely any objection
from anyone," emphasizing that "if [there] is any problem
whatsoever, be it a due process claim or some sort of mistrial, I
want to know now." Defense counsel responded that there was "[n]o
objection whatsoever."

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interpreters, which contributed significantly to the length of the

trial.43

The government's presentation was not repetitive. For

example, although Enriquez (the senior vice president of the

mortgage department) and Kareh (the assistant vice president of the

construction loan department) both testified at length about the

same projects, Kareh offered more detailed information about the

loans themselves, while Enriquez provided insight into appellants'

knowledge about the loans and whether appellants provided certain

information to the Board. Although appellants can point to

instances in which the same story was told more than once, such

repetition often encompassed new and relevant details, and was not

unduly frequent given the complexity of the violations alleged and

the length of the trial.

Finally, there is no indication that the length of the

trial and the arguably cumulative nature of the evidence affected

the outcome of the trial in any way. In fact, the jury convicted

the four appellants while acquitting Enrique Gutiérrez on all

counts, which suggests that the jury was able to carefully weigh

the evidence against each defendant. See United States v. LiCausi,

43
Although procedures vary from trial to trial, questions from
attorneys are usually translated into Spanish upon completion.
With respect to witness testimony, the interpreter typically
instructs the witness to pause every few sentences to allow
translation of the testimony into English, and will stop the
witness if the witness does not remember to pause in giving a
longer answer.

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167 F.3d 36, 49 (1st Cir. 1999)(explaining that a jury's acquittal

of one defendant on two counts indicates that it "was not prevented

from making reliable judgments about guilt or innocence"). Given

appellants' failure to demonstrate any prejudice resulting from the

length of the trial, we find no due process violation under these

circumstances.

B. Prosecutorial Misconduct

Appellants claim that, throughout the trial, the

prosecutor made disparaging and misleading comments that prejudiced

the jury against them and require us to vacate their convictions.

The district court denied motions for a mistrial on such grounds on

at least six occasions.

We must first resolve the threshold question of whether

these comments were improper. Darden v. Wainwright, 477 U.S. 168,

180-81 (1986). If we answer that question in the affirmative, we

must determine whether the impropriety warrants vacating the

convictions. The issue is not whether "'the prosecutors' remarks

were undesirable or even universally condemned'"; rather, "[t]he

relevant question is whether the prosecutors' comments 'so infected

the trial with unfairness as to make the resulting conviction a

denial of due process.'" Id. at 181 (citations omitted). We have

held that the relevant factors include: "(1) whether the

prosecutor's misconduct was isolated and/or deliberate; (2) whether

the trial court gave a strong and explicit cautionary instruction;

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and (3) whether any prejudice surviving the court's instruction

likely could have affected the outcome of the case." United States

v. Auch, 187 F.3d 125, 129 (1st Cir. 1999). We may overturn the

convictions only if "the prosecutor's misguided tactic . . . could

have affected the outcome of the trial." Id. at 130.

1. Disparagement

Appellants first object to comments, made in the presence

of the jury, that they term “disparagement.” For example, the

prosecutor, on one occasion, stated that defense counsel “just lied

to the court” and referred to his statement as a

“misrepresentation.” On another occasion, the prosecutor asked the

court to “please direct [defense counsel] to refrain from his

offensive odious comment that [has] characterized [ ] this trial,”

concluding, “I don’t think that I need to endure this sort of

treatment from him.” On several occasions, the prosecutor

interrupted defense counsel’s objections with such comments as “say

something new,” and “Improper question. First year law school.

Improper question.”

Such comments are unfortunate and unprofessional.

However, the trial was highly contentious, and the record reveals

that appellants' trial counsel made a number of similar comments.

Although such exchanges between the prosecution and defense

occurred intermittently, their impact was diluted by the length of

the trial. Immediately following such exchanges, the court usually

-91-
commented on their inappropriateness. For example, the court on

one occasion ordered “all counsel to measure their words, measure

their conduct, and measure their civility towards each other,”

noting, “I have observed both sides step over the line.” On

another occasion the court admonished counsel for improper comments

and stated: “And by counsel I included both sides. This is not an

admonition to one side or the other, both sides are included.”

Such statements from the court adequately informed the jury that

such conduct was inappropriate and assigned blame equally to both

sides. Finally, any prejudice that resulted from the prosecutor’s

role in these exchanges and survived the court’s instruction could

not have influenced the outcome in this case because, as we

explained in Section III, supra, the evidence of appellants’ guilt

was overwhelming. Thus, the prosecutor’s occasional remarks in

this long and contentious trial, although unfortunate, did not

infect the trial with such unfairness as to make the resulting

convictions a denial of due process. Darden, 477 U.S. at 181.

2. Misleading Statements

Appellants also assert that the prosecutors made

misleading statements and referred to information outside the

record. Many of appellants’ characterizations of the prosecution’s

presentation are simply inaccurate. For example, appellants claim

that the prosecutor falsely stated that Lugo (the Board president)

had testified that the Board was not told of Modules’ performance

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history, when Lugo had at most said he could not remember those

statements. This claim is unsupported by the record. Lugo in fact

testified: “I don’t recall that it was discussed. I believe that

if it was discussed I would remember and it is not reflected in the

minutes. . . . The best of my recollection is that it was not

discussed.” In another instance, appellants protest that the

prosecutor improperly suggested to Joseph Gonzalez (an examiner for

the Federal Home Loan Bank) that bank management, rather than the

Board, was responsible for Caguas' lending practices, when in fact

the prosecutor only elicited testimony that the Board relied on

Muñoz-Franco and Sánchez-Arán to provide information relevant to

its decisions, and often accepted Muñoz-Franco's recommendations

regarding these decisions. Such comments were not improper, let

alone prejudicial.

In other instances, even if we found the challenged

statements improper, any resulting prejudice was negated either by

appellants' own cross-examination or by a curative instruction from

the district court. For example, appellants assert that the

prosecution elicited testimony from Montilla (the developer on the

Jardines de Villa Alba project) that Caguas sued him but then

dismissed its claim, when in fact the bank settled with Montilla

and obtained title to all but one of the Jardines de Villa Alba

-93-
lots.44 However, appellants then elicited the terms of the

settlement on cross-examination, remedying any prejudice. On

another occasion, the court addressed defense counsel’s allegations

that the prosecution's closing argument mentioned loans not charged

in the indictment and mischaracterized Victor Kareh's testimony

with a detailed curative instruction.45

In sum, any impact resulting from these alleged

misleading statements must be evaluated in light of the

overwhelming evidence presented at this fifteen-month trial. Under

such circumstances, we again conclude that the prosecutor's

comments could not have caused unfairness that resulted in a denial

of due process.

C. Jury Instruction on Misapplication

Appellants argue that the jury instructions improperly

permitted the jury to convict them on the misapplication charge if

it found them merely reckless. We review de novo a claim that the

44
Appellants did not object to this testimony at trial, and
thus we review their claim only for plain error. See United States
v. Duarte, 246 F.3d 56, 60 (1st Cir. 2001).
45
The complete instruction spanned several pages of trial
transcript, but a representative paragraph will demonstrate the
level of detail: "You heard reference to the Coamo loan during the
government's closing argument and entries on the Coamo ledger card.
Because the Coamo loan is not part of the charges in this case I
instruct you to disregard the prosecutor's comment about the Coamo
ledger card as they refer specifically to the Coamo loan. You may
consider, in evaluating all the evidence, whether any payments from
other loans were used or not used to make any payment in the Coamo
loan."

-94-
district court erred in instructing the jury on the intent

necessary to support a conviction. United States v. Woodward, 149

F.3d 46, 68-69 (1st Cir. 1998).

The contested instruction stated that the government must

prove beyond a reasonable doubt

that the defendants acted with the intent to
injure, defraud or deceive the bank. You may
also consider whether defendants acted
recklessly, that is, in reckless disregard of
the interests of the bank. If you find that
defendants acted recklessly, with respect to
the alleged misapplications, you may find that
the defendants acted with intent to injure,
defraud or deceive the bank.

Relying on a Fifth Circuit case, United States v. Adamson, 700 F.2d

953, 965 (5th Cir. 1983), appellants contend that, contrary to this

instruction, reckless behavior is insufficient to establish

misapplication under 18 U.S.C. § 657.46 Contrary to the Fifth

Circuit, however, we have specifically held that "'the sine qua non

of charges of willful misapplication of bank funds is action taken

with the knowledge of harm to, intent to harm, or reckless

disregard for, the financial health of the bank.'" United States

v. Brennan, 994 F.2d 918, 923 (1st Cir. 1993)(emphasis

46
In Adamson, the trial court instructed the jury: "A reckless
disregard of the interest of the bank is the equivalent of intent
to injure or defraud the bank." 700 F.2d at 965. In reversing the
misapplication conviction, the court held that, "[i]n order to
convict a defendant for willfully misapplying funds with intent to
injure or defraud a bank, the government must prove that the
defendant knowingly participated in a deceptive or fraudulent
transaction." Id.

-95-
added)(quoting United States v. Fusaro, 708 F.2d 17, 21 (1st Cir.

1983)); see also United States v. London, 66 F.3d 1227, 1241 (1st

Cir. 1995)("[T]he cases applying § 656 [the misapplication statute

that deals with banks rather than savings and loans institutions]

. . . have generally held reckless disregard to establish the

requisite intent to defraud."); United States v. Rodriguez-

Alvarado, 952 F.2d 586, 590 (1st Cir. 1991)("A reckless disregard

by a bank officer of his bank's interest . . . is sufficient to

establish the requisite intent to defraud . . . ."). In light of

these binding decisions, appellants' arguments are futile. We find

no error in the district court's instruction on the misapplication

charge.

D. Booker Error

Appellants were sentenced pursuant to a mandatory

sentencing scheme that has since been deemed unconstitutional,

United States v. Booker, 543 U.S. 220, 245 (2005), but they did not

preserve their claims that they were improperly sentenced. We have

held that such unpreserved claims are reviewed only for plain

error. United States v. Antonakopoulos, 399 F.3d 68, 76 (1st Cir.

2005). Appellants challenge their sentences on the ground that

"the Antonakopoulos plain error analysis does not comport with the

Supreme Court's decisions in [United States v. Olano, 507 U.S. 725,

734-36 (1993)] and Booker because it imposes on defendants the

burden of proving that error materially affected the proceedings

-96-
below." Absent en banc or Supreme Court review, however, we are

bound to follow the Antonakopoulos framework, and thus we

acknowledge only that appellants have preserved this issue for

later review.

VII.

After concluding our review of the immense record in this

complicated case, we agree with the district court that

overwhelming evidence supported the jury verdicts. Also,

appellants have raised no other grounds that would justify vacating

their convictions.

We have been greatly aided in our review by the district

court's sensible management of this lengthy trial, as well as its

careful and thorough analysis of the issues that arose throughout

the proceedings. Its handling of this burdensome case was

exemplary.

We affirm the convictions and sentences of the appellants

on all counts.

So ordered.

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