United States v. Valdes-Ayala

United States Court of Appeals
For the First Circuit

No. 16-1002

UNITED STATES,

Appellee,

v.

VALENTÍN VALDÉS-AYALA,

Defendant, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO

[Hon. Aida M. Delgado-Colón, U.S. District Judge]

Before

Howard, Chief Judge,
Thompson and Barron, Circuit Judges.

Linda A. Backiel for appellant.
Mariana E. Bauzá-Almonte, Assistant United States Attorney,
Chief, Appellate Division, with whom Rosa Emilia Rodríguez-Vélez,
United States Attorney, and Mainon A. Schwartz, Assistant United
States Attorney, were on brief, for appellee.

August 15, 2018
 THOMPSON, Circuit Judge. For at least eight years

Defendant Valentín Valdés-Ayala (Valdés) exploited the desperation

of individuals who were behind on their court-ordered child support

payments. He did so by illusorily promising professional legal

assistance in exchange for approximately $1,575 and then filing

incomplete petitions in bankruptcy court to secure a stay on the

Commonwealth of Puerto Rico's collection efforts. Eventually

Valdés's scheme attracted the attention of federal law enforcement

officials which led to his trial and conviction on several fraud-

related offenses. On appeal he makes several claims of trial and

sentencing error. For the reasons discussed herein, we affirm his

convictions and the order of restitution imposed, but vacate his

sentence of incarceration and remand to the district court for

resentencing.

I. BACKGROUND

A. Setting the Scene

To understand how Valdés exploited the bankruptcy and

child support administration systems, it will help to understand

the ways in which these systems have been designed to work. We

use the testimony the jury heard at trial to paint the backdrop

against which Valdés operated his businesses. The jury trial

included testimony from a varied cast of 34 witnesses culminating

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with Valdés, himself, taking the stand.1 So a heads up to the

reader: There's a lot of factual detail to lay out before we can

get to our discussion of Valdés's arguments on appeal.

1. Child Support Collection in Puerto Rico

In Puerto Rico, the Administracion para el Sustento de

Menores ("ASUME") governs child support determinations,

modifications, collections, and distributions. When the

Commonwealth's trial court orders a non-custodial parent to pay

child support, ASUME is responsible for collecting the payment and

sending it on to the custodial parent. ASUME has several

collection tools at its disposal when a non-custodial parent misses

a scheduled payment, including retention of income tax refunds,

withholding of income, suspension of sport or professional

driver's licenses, and referrals to credit agencies. One

additional collection mechanism available to ASUME--the filing of

a contempt motion in the Commonwealth trial court--can result in

up to six months imprisonment for the delinquent parent.

For a parent in arrears wanting to put ASUME's collection

efforts on hold (thereby freezing past-due obligations), filing a

petition for Chapter 13 bankruptcy in the bankruptcy court does

the trick, at least temporarily. The reason: the filing generates

1 Because Valdés challenges the sufficiency of the evidence
to support some of his convictions, we will relay the facts of the
case in the light most compatible with the jury's verdict. See
United States v. Serunjogi, 767 F.3d 132, 139 (1st Cir. 2014).

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an immediate stay. It also kicks out an automatic notification to

ASUME, giving it the status of a creditor needing to file a proof

of claim. But notwithstanding the stay, the parent has a

continuing obligation throughout the bankruptcy proceeding to pay

the ongoing support obligations as they are due (i.e., payments

that become due after filing the bankruptcy petition). If the

parent fails to meet the recurring payment deadlines, then ASUME

can seek dismissal of the bankruptcy petitioner's case. If

dismissed, the entire child support arrears is immediately owed to

ASUME.

2. Chapter 13 Bankruptcy

A Chapter 13 petition may be filed by individuals who

have a regular source of income but need some breathing room to

reorganize and repay their debts. The bankruptcy process generates

a plan for debt reorganization and repayment. Two major benefits

favor filing: (1) the automatic stay, or freeze, on every

creditor's attempt to collect a debt owed by the debtor, and (2)

a discharge, or forgiveness, of some types of debts at the end of

the case, meaning the debtor never has to repay these debts. But

a child support debt is not one that can be forgiven (or, put in

legal lingo, is "nondischargeable") and, in fact, has priority

over the payment of other debts. So the debtor's obligation to

pay past-due child support never disappears. For a non-custodial

parent delinquent in child support payments, the automatic stay is

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oft times the primary benefit of a Chapter 13 filing. And the

power of this benefit is not to be underestimated; if the debtor

is imprisoned for contempt for failure to pay court-ordered child

support, the stay generates a get-out-of-jail-for-free order

during the pendency of the proceeding. It also triggers a hands-

off order of the debtor's earnings, thereby shielding it from

creditor reach.

A Chapter 13 petition can be prepared and filed by an

attorney, by a petition preparer,2 or directly by the debtor, and

it is supposed to include several documents. The three page

petition itself covers general information about the debtor, an

estimated number of creditors, an estimated sum of the debtor's

assets and liabilities, the identity of the actual petition

preparer, and whether the debtor has filed for bankruptcy within

the last 8 years.3 Moreover, a petition preparer (if any) must

file a certification disclosing how much the debtor paid for the

preparer's assistance.

2 A bankruptcy petition preparer is "a person, other than an
attorney for the debtor or an employee of such attorney under the
direct supervision of such attorney, who prepares for compensation
. . . a petition or any other document prepared for filing by a
debtor in a United States bankruptcy court . . . ." 11 U.S.C.
§ 110(a).
3 In addition, there are other separate forms, disclosures,
and certifications which must be completed, depending upon the
type of financial obligation involved.

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 Also required at Chapter 13 filing time is a debtor's

certificate of course completion from a credit counseling service.

11 U.S.C. §§ 109(h), 521(b). A nonprofit called Credit Advisors

Foundation ("CAF") administers such a course in Puerto Rico, even

though it does not have a physical presence there. The course,

which can be done online or by phone, mandates the debtor take an

initial quiz, learn about budgeting and options for managing one's

financial affairs, create a budget using the debtor's own financial

situation, and complete a second set of quizzes. At the end of

that process, a budget report and analysis as well as a certificate

of course completion gets emailed to the debtor and the debtor's

attorney (if one is listed in the debtor's account with CAF) for

filing with the bankruptcy petition.

Attorneys can file Chapter 13 petitions and the

accompanying documents electronically, but non-attorneys in Puerto

Rico must file in person at the bankruptcy court located either in

San Juan or Ponce. This includes pro se litigants, petition

preparers, and friends or family members who file a document on

the debtor's behalf. The clerk's office must accept a bankruptcy

filing unless a court order is in place barring the individual

from doing so.

While there are several documents that make up a complete

Chapter 13 package, the automatic stay is nonetheless achieved by

submitting a "skeleton filing," consisting of the petition, the

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certificate of completion for the credit counseling course, and a

few other certifications and declarations. Once docketed, the

debtor has 14 days to turn in the remaining required documents and

schedules. If all of the other paperwork is not filed within that

time period, the bankruptcy trustee can move to dismiss the

petition. The debtor may request additional time to submit the

documents, but if the case reaches 45 days old and all of the

required documents are not filed, then the case is automatically

dismissed. Once dismissed, the protective stay thwarting all

creditors' collection efforts goes away.

As for petition preparers assisting a debtor, there are

strict rules about what the helper may and may not do. 11 U.S.C.

§ 110. The big no-no's: (1) Based only upon information provided

by the debtor can the assister fill in the blanks on the petition;

(2) no recommendation is to be given about the propriety of filing

for bankruptcy or about which code chapter should be utilized, or

about what the consequences of a bankruptcy filing might be; and,

unsurprisingly, (3) the preparer cannot take the required credit

counseling course on the debtor's behalf. The really big yes-yes:

the petition preparer must sign several parts of the petition,

attesting that he or she has adhered to the various and

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comprehensive statutory parameters for acting as a bankruptcy

petition preparer.4

After the petition is filed, the bankruptcy court sends

a summons to the debtor with a time and date for a so-called "341

meeting." Mandated by 11 U.S.C. § 341, the debtor is required to

attend this meeting to discuss the petition. Also in attendance

is the bankruptcy trustee assigned to the case, as well as any

creditors who wish to show.

Getting at holistic system concerns, bankruptcy analysts

employed by the U.S. Trustee's office supervise all case filings

in an effort to ferret out fraud in the system. The job entails

combing through bankruptcy filings, homing in on any red flags

suggesting a case should not move forward with regular case

processing. In petitions prepared and/or filed by Valdés, giant

red flags fluttered high.

3. Enter Valdés

Valdés, as we glean from his testimony, is a self-

described musician, comedian, script writer, and salesman who has,

at one time or another, studied conflict mediation, criminology,

and chaplaincy, and, most relevant here, has had personal

4The curious reader is encouraged to check out In re Briones-
Coroy, 481 B.R. 685, 692-95 (Bankr. D. Colo. 2012), for a history
and unintended consequences of 11 U.S.C. § 110, the statute
regulating the practice of non-attorney bankruptcy petition
preparers.

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experience with Puerto Rico's child support collection system,

incarceration institutions, and the bankruptcy court system. In

2006, he started the Fundacion Lucha Pro Padres Convictos Por

Pension ("the nonprofit") for the purpose "of defending the

principles and dignity of every father convicted for failure to

pay child support and release, defend, paternal feelings and

relations and promote the right to freedom of every convict." In

2009, he was incarcerated for failing to pay his own court-ordered

child support but was released after filing a pro se petition for

bankruptcy. Three years later he founded a for-profit corporation

called Tears in Prison, Inc. for the purpose of preparing

bankruptcy petitions.

According to Valdés, around 20 people per month hired

him to help them either get out of jail or avoid going to jail at

all by preparing bankruptcy petitions in exchange for around $1,575

per petition. He admitted knowing that a bankruptcy petition

preparer was not allowed to charge more than $500, so he knew not

to list his true fee on the petitions. When he received the $1,575

payment, he says he referred the case to one of seventeen attorneys5

throughout Puerto Rico who he told clients would prepare the

5 Valdés doesn't give us any information about these attorneys
and other witnesses at trial only identified two of these attorneys
by name.

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petition.6 To facilitate his bankruptcy petition preparation when

dealing with the imprisoned, Valdés obtained his clients' personal

information from family members, then brought hard copies of the

relevant documents to the jailhouse to get the incarcerated

clients' necessary signatures.

According to Valdés, after getting those signatures, he

would go to the closest Office Max store and tap into an email

account he had set up, which tied his nonprofit, the Fundacion

Lucha Pro Padres Convictos Por Pension, with CAF. The purpose of

the email hook-up was to pay for credit counseling courses for

clients and to receive each client's certificate of completion for

each course. After printing out the certificate, Valdés would

proceed directly to the courthouse to file the petition.7 His

lofty "mission," he testified, was to get non-custodial fathers

out of jail. No one could stop him; he "ha[d] an order -- my

ministry comes from another force. It is a ministry sent to me

based on what I suffered through, I have the gift of God to be the

chosen one."

6 Psychological and job placement assistance were also on his
nonprofit's service menu, but no one ever asked for psychological
intervention.
7 While the credit counseling material was available in
English and Spanish, the bankruptcy petition paperwork was only
available in English and it "wasn't his job" to translate it for
his clients (who, as we'll recount in a moment, mostly spoke and
read only Spanish).

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 Twelve of Valdés's clients testified at trial about

their experiences with him; eight of whom also had a family member

tell of their respective contact with him to coordinate the

services he'd advertised on television (yes, he advertised). All

of these clients had been behind on their court-ordered child

support payments and most were in jail at the time they reached

out to Valdés. This evidence revealed a common M.O.; we highlight

three of his clients' experiences as representative of all twelve

clients who testified.

Ever Colon Figueroa ("Colon"), imprisoned for the first

time for failing to meet his child support obligations, became a

Valdés client after hearing about the nonprofit from another

inmate. Colon passed along the prison chatter to family members

and they looked Valdés up. Colon's mother contacted and met with

Valdés on behalf of her son and, based upon his promise to spring

her son from prison, coughed up $1,775 for his services. After

the meeting, Colon says he had a 20-minute visit with a female

lawyer who was there, she said, on Valdés's behalf and he signed

some papers "related to a bankruptcy," but did not take a credit

counseling course. He was released from jail the next day, and

went to the bankruptcy court on the day assigned on his summons.

The attorney Valdés had promised to send was a no-show, so Colon

was reincarcerated. Turning again to Valdés for help, Colon's

mother paid Valdés yet more money, $1,200, to spring her son from

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lock-up. After getting paid, Valdés made a visit to the jailhouse

where he huddled with Colon and two other inmates8 for about a half

an hour. Colon signed more bankruptcy paperwork and completed a

quiz by selecting answers to the multiple choice questions which

Valdés told him to choose. Valdés did not translate the papers

for Colon, who did not speak or read English. Upon Colon's second

release Valdés promised to accompany him to his bankruptcy hearing,

but Valdés never arrived. During his testimony, when asked about

the signature on the first bankruptcy petition Colon said it was

not his. Colon also pointed out that, on the second bankruptcy

petition filed in his name, in the space where the petitioner is

supposed to disclose all prior bankruptcy petitions filed in the

previous eight years, the word "none" incorrectly appears. Other

than the two releases from jail, Colon received no other services

from Valdés or the nonprofit.

Another client, Luis Serrano Aponte ("Serrano"),

contacted Valdés by phone after he saw a TV commercial for the

nonprofit, and the two arranged to meet at a Pizza Hut to discuss

how Valdés could help keep him out of jail. He understood from

their conversation that Valdés was going to lower his child support

payments by starting a Chapter 13 bankruptcy case and that a lawyer

would help him with the case, though none ever did. Serrano

8 The record is not clear whether these inmates were existing
clients or potential clients.

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testified that he did not speak or read English, and while he did

sign some papers, he did not take a credit counseling course or

any quizzes and he did not actually authorize Valdés to start a

bankruptcy case for him. Serrano eventually learned that a

bankruptcy case had been filed in his name when he received a

letter from the court through the mail, but he testified that the

signatures on the bankruptcy petition were not his. Even though

Valdés was paid in full he would not answer Serrano's calls, and

Serrano never spoke with him again.

A third client, Confesor Rohena Vila ("Rohena"), called

Valdés after his girlfriend saw the nonprofit's TV ad (advertising

works!). His experience followed the same, well-worn path as

Valdés's other clients from the initial meeting to the two-time

jailing and release. When Rohena's girlfriend reached Valdés on

the phone following Rohena's second arrest, Valdés admitted he

could have trouble with the court if he filed a third bankruptcy

petition in Rohena's name and so told her there was nothing more

he could do for them.

Eventually, the bankruptcy court noticed some common

patterns with the petitions which listed Valdés as the non-attorney

preparer. The Chapter 13s he filed were of the skeleton variety,

with only one of the required schedules attached; the one for

listing the debtor's "creditors holding unsecured property

claims." Only the "domestic support obligation" category would be

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checked off on this schedule, and only one creditor, ASUME, would

be listed. No assets or other debt would be disclosed in these

petitions.

Alejandro Oliveras Rivera, Assistant U.S. Trustee, who

testified at Valdés's trial, presided over the 341 meetings for

debtors whose petitions listed Valdés as the preparer. Some of

these debtors were no-shows at their scheduled 341 meetings, while

a few showed up with an attorney. Because none of the petitioners

submitted all of the required documents within the allowed time,

Oliveras often filed motions to dismiss. Eventually, Oliveras

sought an injunction from the bankruptcy court to prohibit Valdés

from acting as a petition preparer. Such an order preliminarily

entered on September 14, 2012 and a second order entered December

5, 2012 after the bankruptcy court found that Valdés, despite the

injunction, had continued to prepare and file bankruptcy

petitions.

Prior to the permanent injunction hearing, the

bankruptcy court compiled some data which reflected Valdés's

filing activity. Between March 6, 2012 and July 16, 2012, Valdés

prepared and filed 72 Chapter 13 petitions. By mid-September 2012,

61 of the 72 petitions had been dismissed; 8 more had pending

motions to dismiss. 66 of the 72 did not have the required

paperwork and debt reorganization plan filed, and, in 53 of the 72

cases, the debtor failed to appear at the 341 meeting.

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 On January 18, 2013, Valdés was permanently enjoined

from acting as a bankruptcy petition preparer. Thereafter,

bankruptcy counter staff refused to accept any petitions Valdés

attempted to file. But Valdés wouldn't give up his heavenly

mission--at least one staff member saw Valdés escort debtors or

their family members to the counter to file a Chapter 13 petition.

He also filed petitions through an assistant and he, himself,

attempted to make filings at the bankruptcy court located in Ponce

rather than San Juan. But as luck would have it, Valdés showed up

in Ponce on a day when a San Juan staffer was working there and

recognized him.

Also after issuance of the injunction, staff analysts

continued to monitor Chapter 13 filings. According to their

testimony, what they observed was an increase in the number of

monthly pro se filings from 1 to 6-8.9 They believed the injunction

had not deterred Valdés.10

9
A bankruptcy court staff member also testified that the
total number of pro se bankruptcy petitions filed per year
increased after Valdés was enjoined. The data collected by the
court reflected that 99 pro se bankruptcy petitions were filed in
2009; 102 in 2010; 111 in 2011; 226 in 2012; 194 in 2013; and 66
in 2014. While this data reflected the total number of pro se
petitions filed and so may include a few genuine pro se
petitioners, the staff member testified that pro se voluntary
bankruptcy petition litigants were "not common," so he could infer
that the increase was due to Valdés's activities.
10
Post injunction, a Commonwealth family law judge instructed
Valdés to appear before her after a father delinquent in his child
support payments told her that Valdés had prepared and filed a
bankruptcy petition on his behalf. Under oath at this hearing

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 4. Court Proceedings

In November 2013, a grand jury indicted Valdés on a

variety of offenses, including bankruptcy fraud; wire fraud;

aggravated identity theft; destruction, alteration, or

falsification of records in federal investigations and bankruptcy;

and contempt of court.11 A jury trial ensued in April 2015. At

the end of the government's case in chief, Valdés, through counsel,

moved for judgment of acquittal (making very broad arguments) and

moved again (in the same summary fashion) at the conclusion of all

of the evidence. The district court denied both motions.

Following deliberations, the jury convicted Valdés on all counts.12

At his November 2015 sentencing hearing, the district

court imposed a 134-month term of incarceration, a $402,077.22

money judgment, and a $513,200 restitution order payable to the

District of Puerto Rico Clerk of Court. Although the details of

Valdés admitted he had prepared a bankruptcy petition on behalf of
the incarcerated father despite the injunction in place against
him, but had not signed the petition as the preparer because of
the injunction.
11
When Valdés was arrested, he proclaimed to the officer that
he had been helping parents who hadn't paid their child support
get out of jail for the past eight years. If Valdés spent half a
century in prison and was released with only ten days to live, he
would continue to help these parents and hoped to provide his
services worldwide.
12
Two counts in the indictment (one for bankruptcy fraud, one
for wire fraud) were dropped before trial because this individual
passed away before trial.

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the sentencing process and hearing are important, we will hold off

on engaging in a substantive discussion of what happened until

they become relevant to our analysis.

II. DISCUSSION

The scene now set, it's time to dive into the several

claims of error Valdés raises on appeal.

 The trial evidence against him for bankruptcy fraud,

wire fraud, and aggravated identity theft was

insufficient.13

 The government effected a constructive amendment or

prejudicial variance of the bankruptcy fraud indictment

by the evidence it chose to present and by its arguments

at the end of the trial.

 The jury instructions for bankruptcy fraud and

aggravated identity theft were either wrong or

deficient.

 His sentencing went wrong in two ways: (1) his guidelines

sentencing range was calculated using the wrong version

of the Guidelines Manual, and (2) the $513,200

restitution order was improperly imposed.

We will take each argument in turn.

13Valdés does not raise any challenges to his convictions for
either destruction, alteration or falsification of records in
bankruptcy or for contempt of court.

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 A. Sufficiency of Evidence

1. Bankruptcy Fraud Convictions

After the government rested and again at the close of

trial, Valdés argued--broadly and briefly--that there was

insufficient evidence to convict him of bankruptcy fraud because

his clients filed their bankruptcy petitions "according to law."

Before us, he spins his insufficiency claim in a different

direction. According to Valdés, in order to prove he devised a

scheme to defraud either child support beneficiaries or ASUME, the

government needed to present testimony from beneficiaries affected

by the scheme and also needed to submit records to show loss or

delay in payments to ASUME. Because his argument here differs

from the extremely broad and brief argument he made before the

district court, we would ordinarily find his arguments forfeited

and proceed on plain error review. The government's brief,

however, does not challenge the preservation of this sufficiency

claim, and assumes we will proceed on de novo review. Thus, we

give Valdés the benefit of the doubt and deploy the legal

principles reserved for preserved evidentiary challenges, as his

argument fails even on de novo review.

We view "all [the] evidence, credibility determinations,

and reasonable inferences therefrom in the light most favorable to

the verdict[] in order to determine whether the jury rationally

could have found that the government established each element of

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the charged offense beyond a reasonable doubt." Serunjogi, 767

F.3d at 139 (quoting United States v. Portalla, 496 F.3d 23, 26

(1st Cir. 2007)). Our review does not extend, however, to

"weigh[ing] the evidence or mak[ing] credibility judgments; these

tasks are solely within the jury's province." Id. (quoting United

States v. Hernandez, 218 F.3d 58, 64 (1st Cir. 2000)).

As we stated above, Valdés's evidentiary sufficiency

challenge to his 18 U.S.C. § 157 bankruptcy fraud convictions is

focused on the absence of evidence presented at trial to prove he

devised a scheme to defraud either ASUME or child support

beneficiaries (as specified in his indictment). Valdés points out

that the ASUME administrator's testimony showed that payments

pursuant to a court order for child support were still due on a

continuing basis despite an active bankruptcy case and that the

amount past due to ASUME was nondischargeable. Therefore, he

schemed to deprive no one of anything. Continuing on, Valdés says

the evidence demonstrated that his actual intent was to get fathers

out of jail so that they could find work and pay their child

support obligations. Countering this assertion, the government

responds that its stated trial objective was to prove that Valdés's

fraudulent misuse of the bankruptcy system delayed ASUME's efforts

to collect the child support arrears due recipients, and that "[i]t

was enough to prove that the fraudulent bankruptcy petitions

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intentionally undermined ASUME's ability to collect payments on

behalf of child support beneficiaries."

Our Circuit has yet to interpret § 157 bankruptcy fraud,

so we turn to our sister circuits, many of which have addressed

sufficiency-of-the-evidence challenges to convictions under this

statute. Codified as part of the Bankruptcy Reform Act of 1994,

Pub. L. No. 103-394, § 157 provides up to five years in prison, a

fine, or both, for those who:

[H]aving devised or intending to devise a scheme or
artifice to defraud and for the purpose of executing or
concealing such a scheme or artifice or attempting to do
so --

(1) files a petition under title 11, including a
fraudulent involuntary petition under section 303 of
such title;

(2) files a document in a proceeding under title 11; or

(3) makes a false or fraudulent representation, claim,
or promise concerning or in relation to a proceeding
under title 11, at any time before or after the filing
of the petition, or in relation to a proceeding falsely
asserted to be pending under such title[.]

This type of bankruptcy fraud targets those who use the bankruptcy

system as a way of executing or concealing a scheme originally

devised outside of the bankruptcy context instead of targeting

schemes executed within the bankruptcy system (which are covered

by § 152). United States v. Milwitt, 475 F.3d 1150, 1155 (9th

Cir. 2007).

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 Our sister circuits have generally broken out the

elements required to prove bankruptcy fraud pursuant to this

statute as follows: "(1) devising a scheme to defraud, and (2)

filing a document in a bankruptcy proceeding or making [a] false

or fraudulent statement in relation to the bankruptcy proceeding

for the purpose of executing or concealing the fraudulent scheme."

United States v. Free, 839 F.3d 308, 319 (3d Cir. 2016) (quoting

United States v. Knight, 800 F.3d 491, 505 (8th Cir. 2015))

(alteration in original); see also United States v. Kurlemann, 736

F.3d 439, 452 (6th Cir. 2013); United States v. White, 737 F.3d

1121, 1131 (7th Cir. 2013). Some circuits add "specific intent to

defraud" as a third element. See United States v. Spurlin, 664

F.3d 954, 964 (5th Cir. 2011); Milwitt, 475 F.3d at 1156.

"[B]ecause direct evidence of a defendant's fraudulent intent is

typically not available, specific intent to defraud may be

established by circumstantial evidence and by inferences drawn

from examining the scheme itself . . . ." United States v.

Persfull, 660 F.3d 286, 294 (7th Cir. 2011) (quoting United States

v. Howard, 619 F.3d 723, 727 (7th Cir. 2010)). We join our sister

circuits in their approach finding the crime of bankruptcy fraud

pursuant to § 157 has been committed when (1) a defendant has the

specific intent to devise a scheme to defraud and (2) takes one of

the actions enumerated in § 157(1)-(3) "for the purpose of

executing or concealing such a scheme or artifice or attempt[s] to

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do so." 18 U.S.C. § 157. Further, like the Sixth and Seventh

Circuits, we conclude "the government need not prove that any

creditors were actually defrauded in order to establish the

elements of bankruptcy fraud . . . 'because the [f]iling itself is

the forbidden act . . . [so] [s]uccess of the scheme is not an

element of the crime.'" White, 737 F.3d at 1131-32 (quoting United

States v. DeSantis, 237 F.3d 607, 613 (6th Cir. 2001)) (some

alterations in original).

Valdés urges us to see the evidence admitted in his trial

through the same lens as that worn by the Ninth Circuit in Milwitt

when it first interpreted § 157. In that case, the defendant held

himself out as an attorney who could help individuals defend

against unlawful detainer actions filed by their landlords. 475

F.3d at 1152. He was not admitted to any bar to practice law, but

several individuals hired him, believing he was an attorney. Id.

He filed papers in court on their behalf without their knowledge

and consent, including bankruptcy petitions, listing his clients

as pro se, but using his own general post office box as the address

on the filings. Id. at 1152-53. He advised his clients that they

could withhold rent from their landlords, refuse to move out after

receiving an eviction notice, and ignore any default judgments

entered against them in court. Id. at 1152, 1153.

In a split decision, the Milwitt majority reversed,

concluding there was insufficient evidence to support the

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defendant's conviction for § 157 bankruptcy fraud. Id. at 1156-

59. The majority found that the government's indictment

specifically charged the defendant with intending to defraud the

landlords, not the tenants. And because, during the trial, the

government's evidence only proved that the defendant had intended

to defraud the tenants who had retained Milwitt to defend them

against the detainer actions, it was insufficient. Valdés attempts

to analogize his case to Milwitt to emphasize a difference he

perceives between the victims he contends are alleged in the

charging indictment here and the victims he says were emphasized

in the government's case at his trial. Valdés argues his case

tracks Milwitt's because, as in Milwitt, the government didn't

present any evidence about a scheme to defraud victims identified

in the indictment, i.e., creditors (landlords/ASUME), rather it

only put on evidence of non-identified debtors (tenants/Valdés's

clients). See id. at 1158. We disagree with Valdés's assertion

that he and Milwitt are in the exact same boat.

Here's what was brought out at trial. Valdés devised a

strategy to charge, on average, $1,575 to individuals in exchange

for either getting the individual out of jail or preventing the

individual from being incarcerated for failure to pay court-

ordered child support. Valdés established both a nonprofit and a

for profit corporation as corporate fronts for advertising and

executing his scheme. He promised his clients legal representation

- 23 -
at the bankruptcy court, but most clients testified that they never

met with an attorney and often could not get in touch with Valdés

again after he got hold of their money and filed the bankruptcy

petitions. The evidence at trial also established that Valdés

filed hundreds of skeleton petitions in execution of his scheme.

The petitions in evidence show Valdés listed only $300 as his

petition-preparing fee when other evidence showed his clients

generally paid $1,575 for his services.

Moreover, the indictment (which we'll discuss in more

detail in Section B) placed Valdés on notice that there were

several categories of victims of his scheme and the government put

on evidence demonstrating how he took advantage of them all.

Between the government's witnesses and Valdés's own trial

testimony admitting to the various components of his scheme, a

rational jury could have concluded Valdés intended to defraud a

variety of groups: (1) his clients, by taking money and not

delivering all of the services promised; (2) ASUME, by filing

skeletal bankruptcy petitions which listed ASUME as the only

creditor for each debtor, knowing the petitions would trigger an

automatic stay on ASUME's efforts to collect; (3) child support

beneficiaries, by weakening ASUME's power to enforce court-ordered

child support; and (4) the bankruptcy court, by taking advantage

of this government resource to quickly fulfill the most important

service Valdés promised: release from jail. A rational jury could

- 24 -
also conclude Valdés had the specific intent to defraud because he

intended all of these actions as well as intended the results by

filing the barest possible petition to get his clients out of jail

using the automatic stay generated by filing a bankruptcy petition.

There is, therefore, ample evidence to support Valdés's

convictions for bankruptcy fraud.

2. Wire Fraud Convictions

Valdés's challenge to the sufficiency of evidence to

support his wire fraud convictions presents the same issue-

preservation situation as with his challenge to his bankruptcy

fraud convictions. Before the district court, Valdés argued

broadly that the jury couldn't convict him of wire fraud, in part

because his use of the internet to complete the credit counseling

course was authorized by his individual clients. Before us, Valdés

placed all of his chips on his bet that we would find insufficient

evidence of bankruptcy fraud, and so only argues that without

sufficient evidence to sustain his convictions for bankruptcy

fraud, there is insufficient evidence to support his convictions

for wire fraud.14 Again, the government presumes de novo review,

14 Minimally, Valdés does say in his summary of arguments
section of his brief that his "conviction must be vacated on the
wire fraud counts for failure to prove the transmission was
material to a fraud" but the argument does not get fleshed out at
all in the argument section. It's well-settled that we waive
arguments that are simply mentioned but not developed in any
meaningful way. See Echevarría v. AstraZeneca Pharmaceutical LP,

- 25 -
and again we give Valdés the benefit of the doubt and proceed to

evaluate the evidence from which a rational jury could conclude he

was guilty of wire fraud.

We can be brief with this discussion. A conviction for

wire fraud pursuant to 18 U.S.C. § 1343 is dependent on three

elements: "[1] [A] 'scheme to defraud,' [2] the accused's 'knowing

and willful participation in the scheme with the intent to

defraud,' and [3] the use of interstate or foreign 'wire

communications' to further that scheme." United States v. DiRosa,

761 F.3d 144, 150–51 (1st Cir. 2014) (quoting United States v.

Denson, 689 F.3d 21, 24 (1st Cir. 2012)). The evidence supporting

the existence of a scheme to defraud and Valdés's knowing

participation in that scheme has been laid out above. The evidence

also readily supports Valdés's use of interstate wire

communications in furtherance of his scheme. Testimony from a

representative of CAF revealed that Valdés's account included a

hotmail email address to which his clients' certificates of

completion for the required credit counseling course would be

emailed.15 The testimony revealed CAF has offices in Omaha,

Nebraska and Scottsdale, Arizona, but not in Puerto Rico.

856 F.3d 119, 139 (1st Cir. 2017); United States v. Zannino, 895
F.2d 1, 17 (1st Cir. 1990)).
15
An email address has long counted as a wire communication.
See United States v. Martin, 228 F.3d 1, 18-19 (1st Cir. 2000).

- 26 -
Moreover, none of the company's credit counselors are located in

Puerto Rico. In addition, a custodian of records for Microsoft

Corporation testified that none of the email services operated by

Microsoft (including hotmail) have servers located in Puerto Rico.

So, if someone in Puerto Rico sent an email to someone else in

Puerto Rico, then the email would have to cross state lines during

its transmission.

There is sufficient evidence from which a rational jury

could conclude Valdés used interstate wire communications to

further his scheme and therefore to support his convictions for

wire fraud. Soldiering on, we next address Valdés's effort to

vacate his convictions for aggravated identity theft on the basis

that there was insufficient evidence to support his two counts of

conviction for this crime.

3. Aggravated Identity Theft Convictions

With these convictions, we agree with the parties'

assumption that Valdés's sufficiency-of-the-evidence challenge is

properly preserved for our de novo review. Valdés's convictions

are linked specifically to two of his clients we mentioned before:

Serrano and Colon. Aggravated identity theft is committed when,

"during and in relation to" the commission of one of several

enumerated felonies (including wire fraud), one "knowingly

transfers, possesses, or uses, without lawful authority, a means

of identification of another person." 18 U.S.C. § 1028A(a)(1),

- 27 -
(c)(5). A "means of identification" includes "any name or number

that may be used, alone or in conjunction with any other

information, to identify a specific individual," including "name,

social security number, date of birth," etc. § 1028(d)(7).

Valdés argues there was insufficient evidence to convict

him of aggravated identity theft because Serrano and Colon gave

him their personal information willingly to use for the agreed-

upon purpose of filing a petition with the bankruptcy court.

According to him, he didn't attempt to impersonate either Serrano

or Colon when he used their personal information, and his use of

their information as their agent was for their benefit. Valdés

also claims the crime of identity theft is limited to situations

in which another person's identity is used for the purpose of

deceiving a third party. Because CAF knew Valdés was an

intermediary for the individuals who were registered as customers

of the credit counseling course, he asserts that he did nothing

wrong.

For its part, the government argues that whether

Valdés's clients willingly gave their personal information to him

to use is irrelevant because his use of their information to obtain

credit counseling certificates was unlawful. The government

asserts our case law requires a defendant to purport to take action

on another's behalf and that this requirement is satisfied here

- 28 -
because Valdés used his client's names and addresses in relation

to the wire fraud crimes.

In United States v. Ozuna-Cabrera, we examined whether

a means of identification obtained with the consent of the

identification's subject could still be used "without lawful

authority" in violation of § 1028A. 663 F.3d 496, 498 (1st Cir.

2011) (defendant had purchased an expired passport and social

security card from the owner and used it in his application for a

new passport). We held that, regardless of the way in which the

means of identification had been obtained--whether by theft or

with permission--if the means of identification is subsequently

used during the commission of one of several enumerated felonies

and in a way that is against the law, then the use is "without

lawful authority" and is in violation of § 1028A. Id. at 499,

501.

A few years later, we examined what it means to use the

means of identification of another. United States v. Berroa, 856

F.3d 141, 155 (1st Cir. 2017). In that case, the defendants had

obtained their medical licenses after falsifying exam result data

and then wrote prescriptions for patients. Id. at 147, 155. We

reversed their convictions for aggravated identity theft because

their use of patients' names and addresses on prescriptions was

not "use without lawful authority of the identification of another

person." Id. at 155-56. We held that to "use" the identification

- 29 -
of another person means to "attempt to pass him or herself off as

another person or purport to take some other action on another

person's behalf." Id. at 156. The defendants had neither passed

themselves off as their patients nor taken any actions on their

patients' behalf.

Reading these two cases together then, "regardless of

how the means of identification [are] actually obtained, if its

subsequent use [i.e. 'attempt[ing] to pass him or herself off as

another person or purport to take some other action on another

person's behalf,' Berroa, 856 F.3d at 156] breaks the law . . . it

is violative of § 1028A(a)(1)." Ozuna-Cabrera, 663 F.3d at 499

(emphasis added); see also United States v. Morel, 885 F.3d 17, 23

(1st Cir. 2018) (holding there was sufficient evidence from which

jury could conclude one of the defendants had used the means of

identification of another without lawful authority because

government had proved that she deposited a check from the U.S.

Treasury showing the name and forged endorsement signature of

another person).

Valdés took several actions on behalf of Serrano and

Colon. Serrano testified the signature on the main bankruptcy

petition was his, but he had not understood at the time that Valdés

would be starting a bankruptcy case for him.16 Serrano also

16 Recall Serrano also testified he does not read English.

- 30 -
testified the other six debtor signatures on the exhibits,

declarations, and certifications attached to the petition were not

his, and the signature on CAF's course paperwork was not his. In

addition, Serrano did not recall taking a credit counseling course

or completing any of the quizzes or other components of the course.

Colon testified he does not read or speak English. He testified

he did not take a credit counseling course either of the two times

he was incarcerated for failure to pay child support, but that

when he was in jail for the second time he had filled in answers

to a quiz that was part of a stack of papers Valdés brought to him

in jail, with Valdés telling him which answers to choose.

Viewing the evidence in the light most favorable to the

verdict as we must, and drawing reasonable inferences therefrom,

Serunjogi, 767 F.3d at 139, a rational jury could infer Valdés

forged Serrano's signature on the various declarations,

disclosures, and certifications that are required parts of the

bankruptcy petition as well as on the credit counseling course

paperwork. A rational jury could also infer Valdés completed all

of the requirements of the credit counseling course on behalf of

Colon for the first bankruptcy petition filed and simply instructed

Colon how to answer each of the quiz questions on the second round

of the bankruptcy petition preparation. A jury could therefore

conclude Valdés used Serrano's and Colon's names and social

security numbers to complete the credit counseling courses on their

- 31 -
behalf, a step that was integral to the perpetration of Valdés's

scheme because completing the credit counseling course was a

requirement for filing their bankruptcy petitions. Coupled with

Valdés's affirmed convictions for wire fraud (one of the enumerated

felonies in § 1028A(c)), we hold there is sufficient evidence to

support Valdés's convictions for aggravated identity theft in

violation of § 1028A(a)(1). See Berroa, 856 F.3d at 156; Ozuna-

Cabrera, 663 F.3d at 501.

B. Indictment

Valdés argues (for the first time in this appeal and

echoing themes of his sufficiency challenge) that the bankruptcy

fraud theory the government argued in its closing constituted a

constructive amendment to his indictment because, at trial, the

government emphasized Valdés's perpetration of a scheme to defraud

his clients by promising legal services not rendered instead of a

scheme to defraud child support beneficiaries and ASUME, as alleged

in the indictment. Alternatively, Valdés argues that the shift in

the government's focus represents a prejudicial variance because

the government expanded its basis for conviction. He contends

that all of this resulted in the nullification of his planned

defense that his actions weren't intended to or capable of hurting

- 32 -
the child support recipients or ASUME and deprived him of the

notice of charges to which he was entitled.

The government, for its part, argues that the

prosecution offered sufficient evidence to prove that Valdés's

scheme delayed ASUME's collection efforts (and the child support

beneficiaries' ultimate receipt of the support), so there was

neither a constructive amendment of the indictment nor a

prejudicial variance and Valdés had sufficient notice of the

bankruptcy fraud charge against him.

Valdés concedes our review of his arguments related to

the indictment is for plain error. Plain error review "entails

four showings: (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.

George, 841 F.3d 55, 64 (1st Cir. 2016) (quoting United States v.

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

One of the principles embodied in the Sixth Amendment is

a "guarantee of the right of an accused 'to be informed of the

nature and cause of the accusation . . . .'" United States v.

Tomasetta, 429 F.2d 978, 979 (1st Cir. 1970). Our court views the

indictment as a whole to determine whether a defendant has had

adequate notice of the charges against him. Id. (advising that

one of the considerations when determining the adequacy of a charge

- 33 -
in an indictment is "whether the indictment as a whole conveys

sufficient information to properly identify the conduct relied

upon by the grand jury in preferring [sic] the charge"). "Without

sufficient information to identify th[e] conduct which the grand

jury has deemed adequate to support an indictment, an accused is

at a material disadvantage in meeting the charge against him."

Id.

"[A] constructive amendment occurs when the charging

terms of an indictment are altered, either literally or in effect,

by prosecution or court after the grand jury has last passed upon

them." United States v. Taylor, 848 F.3d 476, 495 (1st Cir.),

cert. denied, 137 S. Ct. 2255 (2017) (quoting United States v.

McIvery, 806 F.3d 645, 652 (1st Cir. 2015)) (alteration in

original). "The rule against constructive amendments exists 'to

preserve the defendant's Fifth Amendment right to indictment by

grand jury, to prevent re-prosecution for the same offense in

violation of the Sixth Amendment, and to protect the defendant's

Sixth Amendment right to be informed of the charges against him.'"

Taylor, 848 F.3d at 495 (quoting United States v. Vizcarrondo–

Casanova, 763 F.3d 89, 99 (1st Cir. 2014)). "As we have previously

said, '[a] primary objective of the rule against constructive

amendment of indictments is to ensure defendants have notice of

the charges they must defend against.'" United States v.

- 34 -
Hernandez, 490 F.3d 81, 84 (1st Cir. 2007) (quoting United States

v. Dubón–Otero, 292 F.3d 1, 5 (1st Cir. 2002)).

"A variance arises when the proof at trial depicts a

scenario that differs materially from the scenario limned in the

indictment." United States v. Bucci, 525 F.3d 116, 131 (1st Cir.

2008) (quoting United States v. Cianci, 378 F.3d 71, 94 (1st Cir.

2004)). However, "when a change le[aves] the substance of the

charge unaffected, the switch d[oes] not usurp the prerogative of

the grand jury." United States v. Godfrey, 787 F.3d 72, 79 (1st

Cir. 2015) (quoting United States v. Dowdell, 595 F.3d 50, 67–68

(1st Cir. 2010)) (alterations in original). "A variance is grounds

for reversal 'if it affected the defendant's substantial rights—

i.e., the rights to have sufficient knowledge of the charge against

him in order to prepare an effective defense and avoid surprise at

trial, and to prevent a second prosecution for the same offense.'"

Godfrey, 787 F.3d at 79 (quoting United States v. Fisher, 3 F.3d

456, 463 (1st Cir. 1993)) (internal quotation marks omitted).

The bankruptcy-fraud-specific section of Valdés's

indictment alleges Valdés intended to defraud ASUME and child

support beneficiaries. The indictment's general allegations,

however, which were all incorporated by reference in the

bankruptcy-fraud-specific section of the indictment, clearly

include an allegation that Valdés defrauded his clients using the

bankruptcy court. There can be no doubt then that Valdés's

- 35 -
indictment placed him on notice that his charges were related to

his bankruptcy court scheme. See Hernandez, 490 F.3d at 84. The

indictment also clearly put Valdés on notice that the government

was focused on a few different victims: ASUME, child support

beneficiaries, his clients, and the bankruptcy court. But

importantly, as we have already said, to establish the elements of

bankruptcy fraud, the government does not need to prove that any

creditors were actually defrauded, just that Valdés committed the

forbidden act in relation to the bankruptcy petition in execution

of, or in furtherance of, his scheme. See White, 737 F.3d at 1131-

32; Free, 839 F.3d at 319; DeSantis, 237 F.3d at 613.

Consistent with the indictment allegations, there was a

lot of testimony at trial from Valdés's clients. But the

government also presented testimony from the ASUME administrator

that the bankruptcy petitions effectively froze all of their

avenues for enforcing court-ordered child support and collecting

the amounts past due. The government's closing argument summarized

all the testimony at trial, including the delay ASUME and child

support beneficiaries experienced as a result of Valdés's scheme.

The evidence at trial did not, therefore, substantively alter the

charges against Valdés in the indictment and it did not show a

materially different sequence of events than that depicted in the

indictment. As a result, there is no hint of either a constructive

- 36 -
amendment or prejudicial variance here, never mind plain error.

See Taylor, 848 F.3d at 495; Godfrey, 787 F.3d at 79. We move on.

C. Jury Instructions

Also for the first time on appeal, Valdés accuses the

trial judge of improperly instructing the jury about both

bankruptcy fraud and aggravated identity theft. The government

submitted proposed jury instructions; Valdés submitted none. With

respect to bankruptcy fraud, the government adapted its proposed

instruction from the Eighth Circuit's and Ninth Circuit's model

jury instructions. The two Circuits use almost identical

instructions defining three elements, but the Ninth Circuit adds

a fourth element which requires the defendant's action to be

material, (meaning the action "had a natural tendency to influence,

or was capable of influencing the acts of an identifiable person,

entity, or group" à la Milwitt, see 475 F.3d at 1156), whereas the

Eighth Circuit only attaches materiality to one of the many

forbidden-act options in the statute. Compare 9th Cir. Manual of

Model Criminal Jury Instructions § 8.11 with 8th Cir. Model Jury

Instructions § 6.18.157. As we'll discuss in a moment, the

district court did not use the government's proposed instruction

verbatim, and did not include materiality as an element. With

respect to aggravated identity theft, the government proposed, and

the district court used, our Circuit's pattern jury instruction

for this offense. The district court added a definition for

- 37 -
"without lawful authority," in part quoting straight from Ozuna-

Cabrera.

Valdés freely admits that trial counsel did not object

to any part of the jury instructions at any point during trial, so

he has forfeited any level of review before us other than for plain

error.17 "When applying the plain error standard in the context

of jury instructions, [this court] look[s] at the instructions as

a whole to ascertain the extent to which they adequately explain

the law without confusing or misleading the jury." United States

v. Bauzó-Santiago, 867 F.3d 13, 23 (1st Cir. 2017) (quoting United

17Federal Rule of Civil Procedure 51 requires the court
to give parties the opportunity to object to its proposed
jury instructions before closing arguments and the
instructions are delivered. Fed. R. Civ. P. 51(b)(2).
For an objection to be timely (except in circumstances
not relevant here), it must be made at this point. Fed.
R. Civ. P. 51(c)(2)(A). Failure to do so means the
objection is forfeited and reviewed for plain error
only, the idea being that the trial judge should be
afforded the opportunity to cure the alleged error and
litigants stopped "from ensuring a new trial in the event
of an adverse verdict by covertly relying on the error."

Rosa-Rivera v. Dorado Health, Inc., 787 F.3d 614, 618 (1st Cir.
2015) (quoting Booker v. Mass. Dep't of Pub. Health, 612 F.3d 34,
41, 43 (1st Cir. 2010)). As we have already said, "[r]eversal
under the plain error standard requires: (1) that an error
occurred; (2) that the error was obvious; (3) that it affected the
defendant's substantial rights; and (4) that it threatens the
fairness, integrity or public reputation of the proceedings."
United States v. Rivera-Ruperto, 852 F.3d 1, 10–11 (1st Cir. 2017)
(quoting United States v. Delgado-Marrero, 744 F.3d 167, 184 (1st
Cir. 2014)).

- 38 -
States v. Candelario-Santana, 834 F.3d 8, 27 (1st Cir. 2016))

(alterations in original) (emphasis omitted).

1. Bankruptcy Fraud

During trial, the district judge instructed the jury

that, in order to convict Valdés on the bankruptcy fraud charges,

they had to find him guilty beyond a reasonable doubt on three

elements: he had "intentionally devised or intended to devise the

scheme or plan to defraud described in the indictment," he "acted

with intent to defraud," and he "filed a petition in a Title 11

bankruptcy proceeding for the purpose of executing or attempting

to execute the scheme." The district judge also provided

definitions for "scheme," "defraud," and "intent to defraud."

Nevertheless, according to Valdés, a few pages of the jury

instructions were left out of the printed version that went into

the deliberation room with the jurors. Indeed, the version of the

jury instructions filed on the docket reflects only one of the

elements of bankruptcy fraud the trial judge recited in open court

(the intent to devise the scheme or plan to defraud element). The

rest seem to be missing. But Valdés doesn't show that the jury

was definitely missing a page while they deliberated; all we know

for sure is the docketed version of the instructions are missing

the page or pages which accurately capture the complete bankruptcy

fraud instruction.

- 39 -
 Nonetheless, Valdés tries to make much of this clerical

snafu and argues the jury would have felt compelled to decide he

was guilty of each count of bankruptcy fraud based on the

instructions purportedly sent into the deliberation room only

showing one of the bankruptcy fraud elements. But the instructions

given in open court recited all of the statutory elements for

bankruptcy fraud and the verdict form had all of the same elements

for each count of bankruptcy fraud. So the jury both heard all of

the elements recited in open court and had all of the elements in

front of them as they completed the verdict form. Valdés's

argument is, therefore, a non-starter, especially because he

doesn't even attempt to show us how this clerical error amounts to

plain error.

Valdés also argues that the oral instructions were

"deficient" because the district court did not provide a definition

of "specific intent" as part of the bankruptcy fraud instruction

and omitted materiality as an element. As the government points

out, however, the district court did define the "intent to defraud"

element ("means to act willfully and deliberately with the specific

intent to deceive or cheat for the purposes of either causing some

financial loss to another or bringing about some financial gain to

one self") and this instruction clearly includes an explanation of

specific intent as well. Valdés also tries one more time to get

us to adopt the Milwitt approach we discussed earlier, asserting

- 40 -
error in the oral instruction for not instructing the jury that

the specific intent required was to defraud an identifiable victim

or class of victims of the identified fraudulent scheme. We have

already explained why he is mistaken, so Valdés certainly hasn't

shown us that the district court's omission of this element in the

instruction for bankruptcy fraud was in error.

Valdés also finds fault in the district court's omission

of materiality as an element in the charge for bankruptcy fraud,

but he doesn't tell us why or develop any argument on this point.

As a result, he hasn't shown us--as he must--how the omission of

this element was a clear error. So this contention goes nowhere

fast. In all, Valdés has not exposed any clear or obvious error

in the instructions for bankruptcy fraud. As a whole, the jury

instructions adequately explained the bankruptcy fraud charge

without confusing or misleading the jury. See Bauzó-Santiago, 867

F.3d at 23.

We move on to the instructions for aggravated identity

theft.

2. Aggravated Identity Theft

To find Valdés guilty of aggravated identity theft, the

district judge instructed the jury they had to find the government

had proven, beyond a reasonable doubt, that: (1) Valdés committed

wire fraud; (2) Valdés knowingly possessed and used, without lawful

authority, the names and social security numbers for clients

- 41 -
Serrano and Colon; (3) these names and social security numbers

actually belonged to an individual other than Valdés; and (4)

Valdés knew the names and social security numbers belonged to other

people. The district judge also provided a definition of "without

lawful authority":

The term "without lawful authority" does not require
that the means of identification be stolen or taken
without the owner's permission. Instead, 18 U.S.C.
§ 1028A reasonably proscribes the transfer, possession,
or use of another person's means of identification,
absent the right or permission to act on that person's
behalf in a way that is not contrary to the law. In
other words, regardless of how the means of
identification is actually obtained, if its subsequent
use breaks the law--specifically, during and in relation
to the commission of the crime of wire fraud--it is
violative of 18 U.S.C. § 1028A.

Valdés argues the jury was misinstructed on aggravated

identity theft because the definition of "without lawful

authority" was wrong. He seems to be arguing that because (in his

view) he served as a bona fide agent for his clients, both

obtaining and using their personal identifying information with

their permission, he actually acted with lawful authority, but the

district court's definition of "without lawful authority"

prevented the jury from seeing things his way. We disagree.

Valdés focuses too much on the way in which he obtained the

information and ignores how he subsequently used it.

Contrary to Valdés's interpretation of our discussion of

the § 1028A elements in Ozuna-Cabrera, the district judge's

- 42 -
instruction tracked the elements of the offense as defined in our

Pattern Criminal Jury Instructions for the District Courts of the

First Circuit and then provided our exact interpretation of the

phrase "without lawful authority" from our holding in Ozuna-

Cabrera. See 663 F.3d at 499. As with the instruction for

bankruptcy fraud, the instruction for aggravated identity theft as

a whole adequately explained the law and was neither confusing nor

misleading to the jury. See Bauzó-Santiago, 867 F.3d at 23. We

therefore see no error--obvious or otherwise.

D. Sentencing Issues

As promised, we will now set out the details that are

relevant to the sentencing issues Valdés raises for our

consideration. The Presentence Report ("PSR") prepared by

probation suggested the appropriate guidelines sentencing range

("GSR") pursuant to the November 1, 2014 Guidelines Manual. His

sentencing hearing was first scheduled for August 6, 2015. The

PSR set out the sentencing guidelines calculations for the

bankruptcy fraud convictions (the most serious offense in the

counts grouped together) as follows: A base offense level of 6

pursuant to U.S.S.G. § 2B1.1, with a 14-level enhancement pursuant

to U.S.S.G. § 2B1.1(b)(1)(H) for the amount of loss greater than

$400K, a 2-level enhancement pursuant to U.S.S.G. § 2B1.1(b)(10)

for the offense's use of sophisticated means, a 6-level enhancement

pursuant to U.S.S.G. § 2B1.1(b)(2)(C) for the number of victims

- 43 -
exceeding 250 and/or involving mass marketing, and a 2-level

enhancement pursuant to U.S.S.G. § 2B1.1(b)(9) for the offense

involving a misrepresentation or other fraudulent action during

the course of a bankruptcy proceeding. This resulted in a total

offense level of 30.

The PSR also requested restitution in the amount of

$513,200 to the bankruptcy court, citing both 18 U.S.C. §§ 3663

and 3663A. This amount reflected the sum of the penalties as of

June 30, 2015 imposed by two bankruptcy court judges in Chapter 13

proceedings for Valdés's failure to respond to several orders to

show cause why he should not be sanctioned pursuant to 11 U.S.C.

§ 110 for violating the rules within which petition preparers must

operate as well as for violating a bankruptcy court order

prohibiting him from preparing petitions for bankruptcy court

litigants.18 While the initial penalties were imposed at a rate

of $500 per case fraudulently filed, the order was subject to late

fees at the rate of $500 per day that the total fine was not paid.

$500 per day over the course of the two-and-a-half years which

18 11 U.S.C. § 110 sets out detailed rules for bankruptcy
petition preparers as well as the multi-faceted consequences for
breaking these rules that may be imposed by the bankruptcy court.

- 44 -
elapsed between the initial imposition of the fines and the day

the PSR was filed added up to $513,200.

In Valdés's first set of objections to the PSR, he

objected to the 6-level enhancement for the number of victims

because he contends a lower enhancement was warranted because there

was only evidence of 11 victims at trial. His total offense level,

he says, should have been 26 instead of 30. He also objected to

the proposed restitution by vaguely mentioning the imposition of

an additional fine would be excessive. After the first objection

to the PSR was filed Valdés changed attorneys, and his new counsel

filed additional objections two weeks before his actual sentencing

hearing. These objections basically mirror those originally filed

by trial counsel. Regarding restitution, he argued:

[R]estitution should be employed to compensate the so-
called victims and not to enforce penalties or sanctions
or debts. As a consequence, the defendant believes that
it is unfair for him to be forced to pay what is clearly
a debt in another forum and litigated elsewhere for an
amount of $513,200 set as penalties by the Bankruptcy
Court.

At the sentencing hearing, held on November 30, 2015,

the district court grouped the bankruptcy fraud and wire fraud

counts together, tracked the PSR's exact calculations, found the

PSR "adequately applied the guideline computations," and concluded

the resulting guidelines range was from 97 to 121 months. After

adding the 24-month mandatory minimum for the aggravated identity

theft convictions and considering the applicable sentences for the

- 45 -
destruction, alteration, or falsification of records in bankruptcy

counts and the contempt of court count, the district court imposed

a 134-month term of imprisonment for all of the counts of

conviction. The district court also imposed an order of

restitution in the amount of $513,200 to the Clerk of Court for

the District of Puerto Rico.

1. Guidelines Sentencing Range

Valdés now asserts the district judge used the wrong

version of the United States Sentencing Commission's Guidelines

Manual, resulting in a total offense level that was six points

higher than it should have been. Because the sentencing hearing

occurred after the 2015 Guidelines Manual took effect (on November

1, 2015), he asserts the district judge should have sentenced

Valdés under the amended guidelines. While the district judge

claimed to use the November 1, 2015 Guidelines Manual to calculate

the applicable offense level, it decidedly did not and the

government concedes the error. Unquestionably, the number of

levels added to the base offense level for the amount of loss

pursuant § 2B1.1(b) decreased between the 2014 and 2015 Guidelines

Manuals, and the district judge clearly used the loss table in the

2014 Guidelines Manual.

Valdés says two errors occurred as a result of applying

the wrong Guidelines Manual to the calculation of the GSR: first,

he was assigned two additional levels pursuant to the loss amount

- 46 -
under § 2B1.1(b)(1) and second, he was assigned four additional

levels pursuant to the number of victims under § 2B1.1(b)(2). He

argues that because the 2015 Guidelines Manual introduced a

substantial financial hardship consideration under § 2B1.1(b)(2),19

the Government hasn't yet borne its burden for this new

consideration. Valdés argues all four prongs of plain error are

met and that we should remand for re-sentencing to correct the

error. For its part, the Government argues there is a reasonable

likelihood of the same sentence being imposed if we remand because

it believes the district court will enhance the base offense level

by the same number of levels even under the revised versions of

the Guidelines Manual.

19 The 2015 Guidelines Manual, § 2B1.1(b)(2) provided:
(2) (Apply the greatest) If the offense—
(A) (i) involved 10 or more victims; (ii) was committed
through massmarketing; or (iii) resulted in substantial
financial hardship to one or more victims, increase by
2 levels;
(B) resulted in substantial financial hardship to five
or more victims, increase by 4 levels; or
(C) resulted in substantial financial hardship to 25 or
more victims, increase by 6 levels.

The 2014 Guidelines Manual, § 2B1.1(b)(2) provided:

(2) (Apply the greatest) If the offense—
(A) (i) involved 10 or more victims; or (ii) was
committed through massmarketing, increase by 2 levels;
(B) involved 50 or more victims, increase by 4 levels;
or
(C) involved 250 or more victims, increase by 6 levels.

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 While Valdés did object to the initial PSR's suggestion

of adding 6 levels to the number of victims pursuant to U.S.S.G.

§ 2B1.1(b)(2)(A)(i) and argues again to us that only 2 levels

should be added for 10+ victims, the discussion in his brief

concedes plain error review applies to his sentencing arguments.20

The Guidelines Manual instructs district courts to apply

the version in effect at the time of sentencing unless doing so

would raise ex post facto concerns. United States v. Rodriguez,

630 F.3d 39, 42 (1st Cir. 2010); see also 18 U.S.C.

§ 3553(a)(4)(A); U.S.S.G. § 1B1.11 (policy statement). The trial

court therefore erred when it used the 2014 Guidelines Manual

instead of the 2015 Guidelines Manual which contained amendments

to two of the sections in play for Valdés's sentencing. The error

was obvious because the new Guidelines Manual went into effect on

November 1, 2015, and the sentencing hearing occurred on November

30, 2015. "[G]iven an error that is plain (although admittedly

not called to the district judge's attention), we must ask whether

there is reasonable likelihood of a different result if we remanded

and whether there is also a threat of injustice if we affirm."

Rodriguez, 630 F.3d at 42-43.

20
Please excuse our redundancy, but we put in a quick reminder
that, under the exacting plain error standard, Valdés "must show
an error that was obvious and that not only likely affected the
result in the lower court but also threatens a miscarriage of
justice if not corrected." United States v. Rodriguez, 630 F.3d
39, 41 (1st Cir. 2010).

- 48 -
 Here, the trial judge's clear error affected Valdés's

substantial rights because it affected both the calculation of the

applicable GSR and the ultimate imposition of the sentence of

incarceration. See United States v. Figueroa-Ocasio, 805 F.3d

360, 373 (1st Cir. 2015). The trial judge calculated a total

offense level of 30. When this is combined with a criminal history

category of I, the guidelines range is 97-121 months.

In 2015, the Guidelines Manual changed the loss amount

ranges in § 2B1.1(b) and incorporated a "substantial financial

hardship" consideration to the determination of the number of

victims for the specific offense characteristics under

§ 2B1.1(b)(2). The trial judge added 14 levels pursuant to

§ 2B1.1(b)(1) for a loss amount greater than $400,000 but less

than $1,000,000. Under the amendments to this section effective

November 1, 2015, only 12 levels should have been added for a loss

amount greater than $250,000 but less than $550,000. In addition,

because the substantial financial hardship was a new element in

the calculation of the GSR, the trial judge did not consider it

and we will not consider it in the first instance. Without a

finding of substantial financial hardship, only 2 levels would be

added pursuant to either § 2B1.1(b)(2)(A)(i) or (ii) for 10+

victims or if the offense was committed through mass-marketing.

These two amendments to the Guidelines Manual in 2015

could therefore have resulted in a drop of 6 levels to the total

- 49 -
offense level. A total offense level of 24 with a criminal history

category of I yields a range of 51-63 months. There was no

indication in the sentencing hearing that the trial judge intended

to impose an above-guidelines sentence, so even if the trial judge

imposed the top of the range, Valdés's total sentence of

incarceration would have been 87 months (when the 24-month

mandatory minimum for aggravated identity theft is added). This

represents a difference of 47 months or almost four years of

incarceration. Because "but for the error, there is a reasonable

likelihood that the sentence would have been shorter," the

sentencing error affected Valdés's substantial rights. Figueroa-

Ocasio, 805 F.3d at 373 (citing United States v. Ortiz, 741 F.3d

288, 293-94 (1st Cir. 2014)).

That leaves the fourth prong of plain error review--

whether the error "seriously affect[s] the fairness, integrity, or

public reputation of judicial proceedings." Figueroa-Ocasio, 805

F.3d at 367-68 (quoting United States v. Borrero-Acevedo, 533 F.3d

11, 15 (1st Cir. 2008)) (alteration in original). The Supreme

Court has recently made this an easy decision for us. In Rosales-

Mireles v. United States, 138 S. Ct. 1897, 1911 (2018), the Court

held that, "[i]n the ordinary case, . . . the failure to correct

a plain [g]uidelines error that affects a defendant's substantial

rights will seriously affect the fairness, integrity, and public

reputation of judicial proceedings." According to the Court's

- 50 -
discussion in Rosales-Mireles, Valdés has met his burden to

persuade us that the district court's error "seriously affect[ed]

the fairness, integrity or public reputation of judicial

proceedings" by proving a clear error that affected his substantial

rights. See id. at 1909 n.4. Even without the Court's recent

discussion and holding, we have tended to take the approach of

remanding for resentencing when the correction of an obvious error

in guidelines calculations would lead to a lower sentence. See

Figueroa-Ocasio, 805 F.3d at 373-74. We therefore vacate Valdés's

sentence and remand to the district court with instructions to re-

sentence Valdés using § 2B1.1(b) in effect at the time of

sentencing.

2. Restitution

Valdés also argues for the first time before us that the

bankruptcy court is neither a proper recipient of restitution nor

a victim pursuant to either 18 U.S.C. §§ 3663 or 3663A.21 He also

renews his argument that restitution is a duplicative collection

effort for the fines imposed by the bankruptcy court, asserting

that the district court committed clear legal error by ordering

payment of these fines in the form of restitution. In addition,

he vaguely mentions the restitution ordered resulted in an

21 Valdés does not challenge the amount of restitution
imposed.

- 51 -
excessive fine in violation of both the Eighth Amendment and of

due process principles.22

The government responds that the bankruptcy court was

properly identified as a recipient of restitution because Valdés

has not yet paid the fines levied by the bankruptcy court. And

because the bankruptcy cases underlying the fines imposed by the

bankruptcy court are closed, the only existing avenue for

collecting on the outstanding fines is to enforce the district

court's order of restitution.

While Valdés filed written objections to the PSR

challenging the probation office's restitution recommendation as

an impermissible and duplicative collection effort, he did not

voice any such objections during the sentencing hearing. The

district court imposed restitution at the end of the hearing after

the government reminded the court that restitution had been

proposed in the PSR. Valdés remained completely silent through

this part of the hearing even when the government asserted that

Valdés had no objection to the restitution and when the district

judge asked if there was anything else from the parties prior to

adjourning the hearing.

22To the extent that Valdés suggests a violation of his
constitutional rights, these arguments are waived for failure to
develop them. After mentioning the excessive fines and due process
clauses, he doesn't develop any meaningful argument with respect
to either. See Echevarría, 856 F.3d at 139; Zannino, 895 F.2d at
17.

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 Valdés arguably withdrew his objection to the use of

restitution to enforce his unpaid fines in bankruptcy court by

remaining silent during the sentencing hearing instead of pressing

the objection he had included in his written response to the PSR.

See United States v. Alphas, 785 F.3d 775, 784 (1st Cir. 2015)

("In the sentencing context, an appellant may waive an issue when

he initially raises it as an objection to the [PSR] Report but

later explicitly withdraws the objection. . . . Once an issue is

waived, there is nothing for an appellate court to review.").

However, because we review claims of error in the sentencing

process for plain error when a defendant does not lodge an

objection during sentencing, United States v. Vázquez-Larrauri,

778 F.3d 276, 291 (1st Cir. 2015), as well as when we forgive

waiver because "justice so requires," United States v. Torres-

Rosario, 658 F.3d 110, 116 (1st Cir. 2011), we will simply deem

all of Valdés's arguments against the restitution order to be

forfeited. We'll therefore proceed with a plain error analysis.

When the district court ordered restitution, it did not

specify whether the order was made pursuant to the Mandatory

Victims Restitution Act ("MVRA"), 18 U.S.C. § 3663A, or the

discretionary restitution statute authorized by § 3663. The PSR

makes reference to both statutes: one section states the MVRA

applies to Valdés's fraud offenses before summarizing the

Assistant U.S. Trustee's victim impact statement. Another section

- 53 -
says that the discretionary statute authorizes restitution in this

case.

"Restitution serves as a mechanism for making a victim

whole by restoring the monetary equivalent of losses suffered in

consequence of the defendant's criminal activity." United States

v. Salas-Fernández, 620 F.3d 45, 48 (1st Cir. 2010) (citing United

States v. Innarelli, 524 F.3d 286, 294 (1st Cir. 2008)). The MVRA

mandates restitution to the victim or victims of several different

types of offenses, including "offense[s] against property under

[title 18] . . . including any offense committed by fraud or

deceit." 18 U.S.C. § 3663A(a)(1), (c)(1)(A)(ii). While we don't

know whether the district court intended to impose mandatory or

discretionary restitution, there is no doubt that at least one of

Valdés's offenses of conviction--wire fraud--falls within the

MVRA. See United States v. Stoupis, 530 F.3d 82, 84 n.4 (1st Cir.

2008) ("The MVRA requires courts to order restitution in connection

with certain specific types of crimes, including offenses against

property under title 18[, including] convictions under . . .

§ 1343."); see also United States v. Cutter, 313 F.3d 1, 6 (1st

Cir. 2002) ("For fraud offenses, such as [concealing assets in

bankruptcy proceeding in violation of 18 U.S.C. § 152(a) and one

count of making a false oath in bankruptcy in violation of 18

U.S.C. § 152(2)], the [MVRA] governs restitution."). Even if

Valdés is correct that restitution would not have been proper under

- 54 -
the discretionary statute, the restitution was proper pursuant to

the MVRA.

Valdés's argument that the bankruptcy court cannot be a

recipient of restitution has no merit. We have said that the

federal government can be a victim for purposes of restitution.

United States v. Mei Juan Zhang, 789 F.3d 214, 217 (1st Cir. 2015)

("We join our sister circuits in holding that the United States

may be a 'victim' for purposes of the MVRA. The district court

did not err in ordering restitution to the IRS."); see also United

States v. Gibbens, 25 F.3d 28, 32 (1st Cir. 1994). The bankruptcy

court is obviously a part of the federal government. Valdés relies

on cases that are inapposite because they are based on situations

in which a bankruptcy trustee has or has not been deemed the proper

recipient of restitution upon a conviction for bankruptcy fraud.

The subject of the restitution order here is the court,23 not the

bankruptcy trustee or the U.S. Trustee.

Valdés's argument that the bankruptcy court is not a

victim for restitution as defined in both the MVRA and in the

23We note that while the government requested restitution for
the bankruptcy court, the judgment lists the clerk of court for
the district court as the recipient of the restitution. Neither
party brings this factual discrepancy to our attention and, even
if they had, this detail makes no difference because the bankruptcy
court is a part of the district court and the district court has
jurisdiction over all cases under title 11. See 28 U.S.C. § 1334.

- 55 -
discretionary statute fares no better. For purposes of

restitution, "victim" is defined as follows:

[A] person directly and proximately harmed as a result
of the commission of an offense for which restitution
may be ordered including, in the case of an offense that
involves as an element a scheme, conspiracy, or pattern
of criminal activity, any person directly harmed by the
defendant's criminal conduct in the course of the
scheme, conspiracy, or pattern.

18 U.S.C. §§ 3663(a)(2), 3663A(a)(2). The Assistant U.S. Trustee's

victim impact statement, as summarized in the PSR, details the

ways in which the bankruptcy court was directly and proximately

harmed by Valdés's fraudulent use of the bankruptcy system to

perpetrate his scheme. The harm stems from the waste of the

court's already scarce resources to process the skeletal petitions

filed for the sole purpose of taking advantage of the automatic

freeze on ASUME's collection efforts that he knew the petitions

would generate. The harm also resulted from the time and resources

used by the court in its attempts to stop Valdés, including

drafting motions, investigating complaints by his clients, and

gathering data to show how many fraudulent, skeletal petitions had

been filed. Certainly then, on plain error review, it is fair to

treat the restitution order, the amount incidentally mirroring the

bankruptcy court fine, as having been imposed as a rough estimate

of the amount of the losses incurred from the costs imposed on the

bankruptcy court while it dealt with the added administrative

burden resulting from the fraudulent filings rather than simply as

- 56 -
a penalty. It's also fair to conclude on plain error review that

these added burdens could be losses subject to restitution given

that resources were fraudulently diverted from the regular

administration of the bankruptcy court. Therefore, this case is

distinguishable from Gibbens, relied upon by Valdés, because the

bankruptcy court incurred losses in the ordinary course of managing

its operations and not, as Valdés contends, during a discrete

investigation into his misuse of the bankruptcy system. See 25

F.3d at 33 (government agency may not recoup money lost as a

consequence of a crime via a restitution order pursuant to Victim

and Witness Protection Act when losses incurred by an undercover

investigation provoked the commission of the crime at issue).

Finally, Valdés's claim that affirming the order of

restitution will allow the court to collect twice on his fines is

completely without merit. First, there is no suggestion that the

government has attempted to enforce the collection of the fines

through the bankruptcy court cases. Second, once Valdés pays his

restitution, he may move to reopen any of the bankruptcy cases in

which a fine has been imposed and request that the court enter an

order stating the fines have been satisfied. See 11 U.S.C. § 350

("A case may be reopened in the court in which such case was closed

to administer assets, to accord relief to the debtor, or for other

cause."). To that end, the government's contention that, because

the underlying bankruptcy cases are closed, the only way it will

- 57 -
be able to collect the unpaid fines is through enforcement of the

restitution order is also not accurate. But be that as it may,

the order will not result in double dipping.

Valdés has therefore not shown that the district court

committed any errors, never mind a clear or obvious one, when it

ordered restitution to the clerk of court for the district court.

III. CONCLUSION

To sum everything up, we affirm Valdés's convictions and

the order of restitution but vacate his term of incarceration and

remand for resentencing using the proper version of the Guidelines

Manual.

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