United States v. Tkhilaishvili

United States Court of Appeals
For the First Circuit

No. 18-1027

UNITED STATES OF AMERICA,

Appellee,

v.

JAMBULAT TKHILAISHVILI,

Defendant, Appellant.

No. 18-1098

UNITED STATES OF AMERICA,

Appellee,

v.

DAVID TKHILAISHVILI,

Defendant, Appellant.

APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Douglas P. Woodlock, U.S. District Judge]

Before

Howard, Chief Judge,
Torruella and Selya, Circuit Judges.

Michael Tumposky, with whom Hedges & Tumposky, LLP was on
brief, for appellant Jambulat Tkhilaishvili.
 William W. Fick, with whom Fick & Marx LLP was on brief, for
appellant David Tkhilaishvili.
Alexia R. De Vincentis, Assistant United States Attorney,
with whom Andrew E. Lelling, United States Attorney, was on brief,
for appellee.

June 5, 2019
 SELYA, Circuit Judge. Victor Torosyan, together with

defendants-appellants Jambulat Tkhilaishvili and David

Tkhilaishvili, planned to open a suboxone clinic (the Clinic) for

the treatment of opioid addiction. The defendants had represented

to Torosyan that they would provide the know-how as long as he

furnished the bulk of the necessary financing. But while Torosyan

was depleting his resources in order to get the Clinic up and

running, the Tkhilaishvili brothers attempted to relieve him of

some portion of his share in the business through extortionate

means. Torosyan blew the whistle and, after a week-long trial, a

jury convicted the defendants of conspiring to commit Hobbs Act

extortion and other crimes. The defendants appeal. After careful

consideration, we reverse the judgment of conviction on an

embezzlement count brought against David; otherwise, we find the

defendants' manifold claims of error either lacking in merit or

waived (or in some instances both) and, therefore, affirm the

remaining judgments of conviction. Finally, we remand to the

district court for further consideration of David's sentence and

the concomitant restitution order in light of the reversed

conviction.

I. BACKGROUND

We start by rehearsing the relevant facts, taking them

in the light most hospitable to the verdict, consistent with record

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support. See United States v. DiDonna, 866 F.3d 40, 43 (1st Cir.

2017). We then recount the travel of the case.

In 2014, David approached Torosyan about opening a

suboxone clinic in Quincy, Massachusetts. David boasted that he

and his brother Jambulat had experience running a suboxone clinic

but needed a significant capital infusion to get the project off

the ground. Torosyan, who had known David socially, agreed to

invest $500,000 in the project.

In December of 2014, the parties entered into a letter

agreement establishing the structure of the business and the

membership interests of each principal. Under the letter

agreement, the venture consisted of two Massachusetts limited

liability companies: Allied Health Clinic (AHC) and Health

Management Group (HMG). Torosyan received a 41% Class A share in

both AHC and HMG; David received a 40% Class A share in HMG and a

4% Class B share in AHC; and Jambulat received a 45% Class A share

in AHC and a 5% Class B share in HMG. The remaining Class B

interests in AHC and HMG were reserved for other anticipated

employees of the proposed suboxone clinic, all of whom were

relatives or former associates of the defendants.

Given Torosyan's role as the primary (indeed, the sole)

investor, the letter agreement granted him a special consent

authority, which entitled him to decide any contested matters

involving the Clinic until his capital investment had been fully

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recouped. It also granted him a secured guarantee of 50% of his

investment, collateralized by the Tkhilaishvilis' pizza parlor.

With the letter agreement in place, the trio moved

forward with their plans to open the Clinic. From Torosyan's

perspective, things did not go smoothly. In the Spring of 2015,

he learned that the defendants had hoodwinked him about the

progress of construction. He also learned of prior violent

behavior by the defendants. It was not until August 6, 2015 —

months later than anticipated — that the Clinic finally received

a certificate of occupancy from the City of Quincy. By then,

Torosyan had infused approximately $400,000 of his personal

savings into the Clinic.

Matters went downhill from there. On August 22, the

defendants asked Torosyan to release his security interest in the

pizza parlor so that they could sell that business and focus on

the Clinic. Torosyan agreed, but as soon as he had signed the

release, the defendants started to threaten him. They demanded

that he surrender his special consent authority and relinquish a

portion of his ownership interest. They warned that if he refused

to comply, they would "burn down the Clinic" and that he and his

family were "going to be hurt."

The next day, Torosyan suggested to David that they

mediate the dispute in accordance with the letter agreement. David

replied that he would "put a bullet in [the mediator's] head" and

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said that his brother "shot . . . people in the head." Torosyan

was "very, very scared."

Although shaken by this dramatic shift in the

defendants' attitude, Torosyan nonetheless decided to move forward

with the Clinic. In September, lawyers for Torosyan and the

defendants negotiated and drafted formal operating agreements.

Except for minor adjustments to the distribution of membership

interests, the operating agreements retained most features of the

letter agreement (including Torosyan's special consent authority).

In addition, the operating agreements included new "duty of

loyalty" provisions, which had the potential to trigger forfeiture

of any breaching member's ownership interest.

Torosyan and those persons holding minor membership

interests signed the operating agreements on September 11.

Jambulat signed the following day, after declaring that "contracts

mean[t] nothing" to him. He also demanded that Torosyan

immediately give 5% of Torosyan's ownership interest to a creditor

of the defendants and agree to give 40% of the Clinic's profits to

David when the Clinic began receiving reimbursements from

insurance companies. Torosyan deflected these demands, saying

that he would speak to his lawyer. David, who was traveling,

signed the operating agreements sometime within the next few days.

The Clinic opened in October of 2015, after receiving a

license from state public health authorities. Around that time,

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Torosyan loaned David $3,000, with the understanding that the money

would serve as David's salary for November unless repaid within

one week. David never repaid the loan but nonetheless withdrew

salary payments for November totaling $3,500.

On November 9, David requested that Torosyan meet him at

the Clinic. When Torosyan arrived, the defendants asked to speak

privately with him in an exam room. Once inside, they locked the

door and demanded that he turn over 40% of available Clinic funds

to them and cede 5% of his ownership interest to their friend. In

Torosyan's presence, David suggested to Jambulat that they needed

to "get rid of" him. The threats continued as Torosyan retreated

to the parking lot, where Torosyan saw Jambulat withdraw a knife

from the glove compartment of David's car.

By then, Torosyan had sunk roughly $580,000 into the

Clinic. He reported the threats to his attorneys and thereafter

met with agents of the Federal Bureau of Investigation (FBI). At

the FBI's behest, he agreed to wear a wire and surreptitiously

record conversations with the defendants. In recordings made on

November 25 and 30, David made several incriminating statements,

reiterating earlier threats, referring to previous violent acts

undertaken by both defendants, and suggesting that he had

connections with members of Russian organized crime.

On January 6, 2016, Torosyan sought to exorcise the

defendants: he invoked the "duty of loyalty" provision to remove

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them from Clinic membership. Shortly thereafter, a federal grand

jury sitting in the District of Massachusetts charged both

defendants with conspiring and attempting to commit Hobbs Act

extortion (counts 1 and 2). See 18 U.S.C. § 1951. In addition,

David was charged with embezzlement from a health care benefit

program (counts 3 and 4). See id. § 669.

Both defendants maintained their innocence and, in

advance of trial, moved to exclude evidence of prior violent acts.

See Fed. R. Evid. 404(b). At a pretrial hearing, the district

court ruled such evidence admissible "to the degree that the

witness has expressed a concern or is aware of prior acts of

violence by the defendants." A week-long jury trial ensued, and

the defendants timely moved for judgment of acquittal. See Fed.

R. Crim. P. 29(a). The district court reserved decision, see Fed.

R. Crim. P. 29(b), and sent the case to the jury, which found the

defendants guilty on all counts.

A consolidated sentencing proceeding was conducted on

two separate days. During that hearing, the district court denied

the defendants' motions for judgment of acquittal (including a

supplemental motion filed by David over the government's objection

on the eve of the first day). The court proceeded to sentence

David to four concurrent 36-month terms of immurement followed by

a three-year term of supervised release; ordered him to pay a

special assessment of $400 ($100 per count), see 18 U.S.C. § 3013;

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and decreed that he make restitution in the amount of $3,500. The

court sentenced Jambulat to two consecutive nine-month terms of

immurement followed by a three-year term of supervised release,

and ordered him to pay a special assessment of $200. These timely

appeals ensued.

II. HOBBS ACT EXTORTION
The defendants challenge on three fronts their

convictions for conspiring and attempting to commit Hobbs Act

extortion (counts 1 and 2). We deal sequentially with these

challenges.

A. Sufficiency of the Evidence.

The defendants' principal challenge is to the

sufficiency of the evidence. To the extent that they preserved

this challenge, we review the district court's denial of their

Rule 29 motions de novo. See United States v. Iwuala, 789 F.3d 1,

8 (1st Cir. 2015). In that process, we evaluate "whether, after

assaying all the evidence in the light most amiable to the

government, and taking all reasonable inferences in its favor, a

rational factfinder could find, beyond a reasonable doubt, that

the prosecution successfully proved the essential elements of the

crime." United States v. Chiaradio, 684 F.3d 265, 281 (1st Cir.

2012) (quoting United States v. O'Brien, 14 F.3d 703, 706 (1st

Cir. 1994)).

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 The Hobbs Act forbids conduct that "in any way or degree

obstructs, delays, or affects commerce or the movement of any

article or commodity in commerce, by robbery or extortion or

attempts or conspires so to do." 18 U.S.C. § 1951(a). Here, the

government was required to prove beyond a reasonable doubt both

that the defendants conspired and attempted to commit extortion

and that their actions affected interstate or international

commerce. See United States v. Cruz-Arroyo, 461 F.3d 69, 73 (1st

Cir. 2006).

At the outset, the defendants contend that the evidence

presented was insufficient to establish that they either conspired

or attempted to commit extortion. Extortion is defined under the

Hobbs Act as "the obtaining of property from another, with his

consent, induced by wrongful use of actual or threatened force,

violence, or fear, or under color of official right." 18 U.S.C.

§ 1951(b)(2). Against this statutory backdrop, the defendants

focus on the specific conduct referenced in counts 1 and 2: their

attempt to obtain a percentage of Torosyan's ownership interest

for their friend. They theorize that the requisite "obtaining" of

property cannot be satisfied by a showing that a third party

(rather than the defendants themselves) stood to garner the fruits

of the extortion. In their view, the government had to show that

the defendants sought to take possession of the extorted property

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for themselves or, at the very least, that they somehow sought to

benefit from the extortionate transfer.

This contention is simply wrong. As we recently

explained, a defendant may "obtain" property within the meaning of

the Hobbs Act by bringing about its transfer to a third party,

regardless of whether the defendant received a personal benefit

from the transfer. See United States v. Brissette, 919 F.3d 670,

680, 685-86 (1st Cir. 2019) (holding that threatening to withhold

event permits if victim did not hire workers from a specific union

could constitute "obtaining" for purposes of Hobbs Act). It

follows that the government was not required to show that the

defendants stood to benefit personally from the extortionate

transfer of Torosyan's property to a third party. We therefore

hold that the government presented sufficient evidence for a

reasonable factfinder to conclude that the defendants conspired

and attempted to "obtain" Torosyan's property in violation of the

Hobbs Act.1

The defendants mount a second challenge to the

sufficiency of the evidence: they say that because the Clinic was

not profitable at the time of the attempted extortion, an ownership

1 The government argues in the alternative that it presented
evidence sufficient to support a finding that the defendants
personally sought to obtain property from Torosyan. Because we
conclude that the transfer of property to a third party may satisfy
the "obtaining" element, we need not reach this argument.

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interest in the Clinic was not "property" within the meaning of

the Hobbs Act. But there is a rub: "[a] party who identifies an

issue, and then explicitly withdraws it, has waived the issue."

United States v. Rodriguez, 311 F.3d 435, 437 (1st Cir. 2002). So

it is here. The defendants advanced this argument in their motions

for judgment of acquittal and then abandoned it when, arguing

before the district court that the transfer of property to a third

party could not comprise extortion, they conceded that property

was involved and agreed with the court's statement that "we don't

have a property problem." Once waived, a claim typically is "dead

and buried; it cannot thereafter be resurrected on appeal." United

States v. Eisom, 585 F.3d 552, 556 (1st Cir. 2009).

The defendants advance yet a third challenge to the

sufficiency of the evidence of Hobbs Act extortion. Their

challenge trumpets that the government failed to prove that their

conduct "obstructed, delayed, or affected interstate or

international commerce." Cruz-Arroyo, 461 F.3d at 75 (citing 18

U.S.C. § 1951(a)). This ipse dixit does not withstand scrutiny.

"The scope of the Hobbs Act extends as far as Congress's

power to regulate conduct under the Commerce Clause." United

States v. Rodríguez-Casiano, 425 F.3d 12, 14 (1st Cir. 2005). To

affect commerce for purposes of the Hobbs Act, it is not necessary

that the charged crime be soaked in the stream of commerce. To

the contrary, "[w]e have regularly held that commerce is 'affected'

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for the purposes of the Hobbs Act if there is a 'realistic

probability of a de minimis effect on interstate commerce.'"

United States v. Capozzi, 486 F.3d 711, 725-26 (1st Cir. 2007)

(quoting United States v. McKenna, 889 F.2d 1168, 1171-72 (1st

Cir. 1989)). "Even potential future effects may be the basis for

interstate commerce jurisdiction under the Hobbs Act." Id. at

726.

Struggling to place themselves beyond the reach of these

precedents, the defendants posit that, when the victim of a Hobbs

Act crime is an individual rather than a business, the de minimis

standard no longer pertains. They instead insist that a

"heightened showing" of an effect on interstate commerce is

required. Building on this porous foundation, they charge that

the government failed to satisfy this enhanced requirement.

The defendants' argument appears to rest on a misreading

of our case law. They stake their claim principally on our

decision in United States v. McCormack, 371 F.3d 22 (1st Cir.

2004), vacated on other grounds, 543 U.S. 1098 (2005). While it

is true that we referred there to a "heightened standard" to be

applied to Hobbs Act crimes directed at an individual, id. at 28,

we clarified in United States v. Nascimento that this language

"relates to the degree of scrutiny, not the quantum of proof,"

491 F.3d 25, 37 n.3 (1st Cir. 2007). The defendants' insistance

that we have endorsed an alternative to the de minimis standard

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for individual victims of Hobbs Act crimes is therefore nothing

more than wishful thinking. See id. (rejecting argument that

government is required to show "a heightened effect on commerce to

sustain a Hobbs Act conviction when the victim . . . [i]s not a

business"); see also United States v. Shavers, 693 F.3d 363, 375-

76 (3d Cir. 2012) (rejecting request to adopt "a heightened

interstate commerce requirement when the victim of the alleged

crime is an individual rather than a business"); cf. Rodríguez-

Casiano, 425 F.3d at 15 (rejecting argument that robbery directed

at individual cannot engender sufficient effect on interstate

commerce to satisfy de minimis standard).

To be sure, a court must engage in a "multifaceted and

case-specific inquiry" when determining whether the de minimis

standard has been satisfied. McCormack, 371 F.3d at 28. Moreover,

a court must be "more cautious" in applying the standard to

criminal acts directed at individuals as such acts "often have a

less obvious effect on interstate commerce" than acts directed at

businesses. Rodríguez-Casiano, 425 F.3d at 15; cf. United States

v. Jiménez-Torres, 435 F.3d 3, 7-8 (1st Cir. 2006) ("Where . . .

the crime concerns the robbery of a home rather than of a business,

we approach the task of applying the de minimis standard with some

caution, lest every robbery (which by definition has some economic

component) become a federal crime."). Thus, in McCormack we

rejected the government's argument that an "extortionate demand of

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$100,000, standing alone, [wa]s sufficient to satisfy" the de

minimis standard with respect to an individual victim. 371 F.3d

at 28. Despite the fact that the government asserted that "any

reasonable factfinder would conclude that, in order to satisfy

such an exorbitant demand, the victim would need to liquidate

assets in a manner affecting interstate commerce," we concluded

that more was necessary to trace the connection between the

individual victim's assets and interstate commerce. Id. at 28-

29.

Our rejection of the government's proposed rule

notwithstanding, we found that the government had shown the

requisite de minimis impact on interstate commerce through a tried

and true method: demonstrating that the defendant's criminal

activity "cause[s] or create[s] the likelihood that the individual

will deplete the assets of an entity engaged in interstate

commerce." Id. at 29 (alteration in original) (quoting United

States v. Collins, 40 F.3d 95, 100 (5th Cir. 1994)); see Cruz-

Arroyo, 461 F.3d at 75. Here, as in McCormack, the government

embraced this theory — a particularly suitable approach given that

the distinction between Torosyan's funds and the Clinic's funds as

the target of the crime was "one of form, not of substance." Cruz-

Arroyo, 461 F.3d at 75; see United States v. Devin, 918 F.2d 280,

286, 293 (1st Cir. 1990) (finding de minimis standard satisfied

where individual was president and proprietor of business

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operating in interstate commerce). The government offered

evidence to show that the defendants targeted Torosyan because he

was the sole investor in the Clinic and that the primary "asset"

sought by them was an ownership interest in the business. The

government also adduced evidence showing that the Clinic engaged

in interstate commerce and that the defendants' attempted

extortion had the potential to deplete the Clinic's assets. Taken

in cumulation, this evidence was more than enough to ground a

finding that the effect on the Clinic's business could be

considered in determining whether the government had satisfied the

"interstate commerce" element of the Hobbs Act counts. See Cruz-

Arroyo, 461 F.3d at 75; United States v. Diaz, 248 F.3d 1065, 1089

(11th Cir. 2001).

The defendants half-heartedly argue that the Clinic — "a

Massachusetts limited liability company with no funds held out of

state" — was not an "entity engaged in interstate commerce." But

this is thin gruel: as the defendants conceded below, the Clinic

purchased substantial quantities of drugs and supplies from out-

of-state vendors. Activities of this kind are sufficient to

warrant a finding that a nexus with interstate commerce exists.

See, e.g., Jiménez-Torres, 435 F.3d at 8 (finding Puerto Rican gas

station participated in interstate commerce when government showed

gas station purchased products from U.S. Virgin Islands);

Rodríguez-Casiano, 425 F.3d at 14 (finding Puerto Rican firms that

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purchased products from mainland United States were engaged in

interstate commerce). And in all events, the Clinic contracted to

receive payments from Medicare, a federal program, with a nunc pro

tunc effective date of July 1, 2015. That an entity receives

regular Medicare payments from the federal government, without

more, is enough to establish a nexus with interstate commerce.

See Diaz, 248 F.3d at 1090.

In a feat of legal legerdemain, the defendants attempt

to switch the focus of their claims to the second component of the

depletion-of-assets theory. They argue that the government failed

to demonstrate that their attempted extortion had the potential to

deplete the Clinic's assets. Because "the completed extortion

would merely have transferred [Torosyan's] interest in the Clinic

to other individuals," their thesis runs, "[t]he Clinic would not

have lost a penny."

This simplistic characterization does not square with

the multifaceted and case-specific inquiry required in connection

with the de minimis standard. The government adduced evidence

that the defendants repeatedly threatened Torosyan (the sole

investor in the Clinic) during a period in which the Clinic still

depended upon his financial support. The government also showed

that the defendants purposed to give a portion of Torosyan's

ownership interest to one of their creditors — a person who had no

involvement either in constructing or operating the Clinic. The

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defendants' attempt to distinguish the ownership interest sought

here from the financial resources more commonly targeted in Hobbs

Act extortion cases, see, e.g., Devin, 918 F.2d at 286, 293, does

not dull the force of this showing.

We summarize succinctly. Based on all the evidence of

record, a jury reasonably could find that the defendants'

extortionate acts had the potential to chill Torosyan's ardor and

reduce the inflow of cash from him to the Clinic without

substituting any new source of financial support. The likely

result would be that the Clinic would no longer be able to operate

in interstate commerce (or, indeed, at all). Given this

hypothesis, we think that a jury reasonably could find that the

criminal activity had the potential to impact the Clinic's

operations in a manner that would deplete its assets and, thus,

affect interstate commerce. Cf. United States v. Vega Molina, 407

F.3d 511, 527 (1st Cir. 2005) ("The commission of a violent crime

in the workplace inevitably will constitute a wrenching, if

unquantifiable, blow to morale and productivity.").

That ends this aspect of the matter. We conclude,

without serious question, that the evidence was sufficient to show

both that the defendants conspired and attempted to extort property

from Torosyan and that their acts had at least a de minimis effect

on interstate commerce. Consequently, the district court did not

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err in denying the defendants' Rule 29 motions vis-á-vis the

extortion counts.

B. Jury Instructions.

The frailty of the defendants' sufficiency-of-the-

evidence claims makes short work of their corresponding claims of

instructional error. We take a two-tiered approach to an

assignment of instructional error: "we afford de novo review to

questions about 'whether the instructions conveyed the essence of

the applicable law,' while affording review for abuse of discretion

to questions about 'whether the court's choice of language was

unfairly prejudicial.'" United States v. Sabean, 885 F.3d 27, 44

(1st Cir. 2018) (quoting United States v. Sasso, 695 F.3d 25, 29

(1st Cir. 2012)).

The defendants' challenges to the jury instructions

mirror their challenges to the sufficiency of the evidence. See

supra Part II(A). The "obtaining" property and "effect on

interstate commerce" claims of instructional error therefore fail

for the reasons elucidated above. Because the transfer of property

to a third party may comprise "obtaining" property for the purpose

of Hobbs Act extortion, the district court did not err in

instructing the jury that a defendant could have "obtained the

property of another" by means of a transfer of legal right to that

property from the victim to "a person that the defendant

designates." And because the instruction regarding the interstate

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commerce element was substantially correct — the district court

told the jury that the government only had to show "any effect at

all on interstate commerce," even a "minimal" or "potential" one

— the defendants' second claim of instructional error fails.

The defendants' third challenge to the jury instructions

echoes their waived sufficiency argument that an ownership

interest in the Clinic could not comprise "property" within the

meaning of the Hobbs Act because the Clinic was not generating a

profit (and, therefore, in Jambulat's words, was "worthless") at

the time the crime was committed. The defendants find fault with

the definition of "property" set out in the jury instructions:

"an economic interest which is capable of being transferred from

one person to another." They assert that "there must be some proof

that the item has value in order for it to be considered property."

This assertion lacks force. In applying the Hobbs Act,

the caselaw consistently has read "property" more broadly than the

defendants urge. We agree with the Eleventh Circuit that "the

Hobbs Act applies to extortion of property in general." Diaz, 248

F.3d at 1090. As there is no valuation requirement for such

property, we find no error in the challenged instruction.2

2David attempts to advance an additional challenge concerning
the wording of the jury instructions. Because that challenge was
not raised below and because there is no plausible basis for a
claim of plain error, we reject it out of hand.

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 C. Rule 404(b).

The defendants' last complaint concerning the Hobbs Act

counts centers on the notion that the district court abused its

discretion when it admitted evidence of the defendants' prior

violent acts. This disputed evidence consisted of testimony by

Torosyan and Olga Dorofyeyeva (Jambulat's former girlfriend and a

Clinic employee) about conversations in which Dorofyeyeva told

Torosyan that David flipped over a table in anger at a prior

business; that David once knocked down his girlfriend, also at a

prior business; that Jambulat used force against Dorofyeyeva when

they were dating; and that Dorofyeyeva had heard that Jambulat

stabbed someone in Boston.3 The district court concluded that

evidence of the defendants' prior violent acts was admissible both

to show the defendants' intent to threaten Torosyan and to show

Torosyan's state of mind upon hearing those threats. We review a

district court's rulings admitting or excluding evidence for abuse

of discretion. See Sabean, 885 F.3d at 55.

3 We need not linger long over the defendants' argument that
the district court abused its discretion in admitting
Dorofyeyeva's testimony on redirect examination that Jambulat
threatened to cut her if she crossed him. In support, they point
out that Torosyan was unaware of this threat. What the defendants
overlook, however, is that Jambulat's counsel paved the way for
this testimony when he asked Dorofyeyeva during cross-examination
whether she had ever heard Jambulat threaten anyone. Where, as
here, the defendant opens the door wide, the district court acts
well within the compass of its discretion in permitting the
government to go through the door. See United States v.
Balthazard, 360 F.3d 309, 317 (1st Cir. 2004).

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 Our lodestar is Federal Rule of Evidence 404(b).

Although the rule provides that "[e]vidence of a crime, wrong, or

other act is not admissible to prove a person's character in order

to show that on a particular occasion the person acted in

accordance with the character," it goes on to provide that such

evidence "may be admissible for another purpose, such as proving

motive, opportunity, intent, preparation, plan, knowledge,

identity, absence of mistake, or lack of accident." Fed. R. Evid.

404(b). To determine whether other-acts evidence should be

admitted under Rule 404(b), a trial court must engage in a two-

step analysis. See United States v. Lopez-Cotto, 884 F.3d 1, 13

(1st Cir.), cert. denied, 139 S. Ct. 124 (2018); Devin, 918 F.2d

at 286. First, it "must ascertain whether the evidence has a

'special relevance' in that it is offered not to show a defendant's

evil inclination but rather to establish some material fact."

Veranda Beach Club Ltd. P'ship v. W. Sur. Co., 936 F.2d 1364, 1373

(1st Cir. 1991) (quoting United States v. Hadfield, 918 F.2d 987,

994 (1st Cir. 1990)). "If the trial court finds sufficient

relevance, the next step requires that it gauge probative weight

against prejudicial effect[.]" Id. This balancing is to be

conducted in pursuance of Federal Rule of Evidence 403. See id.

With respect to the first step, we detect no abuse of

discretion. As the court below concluded, the evidence of prior

violent acts was specially relevant to the defendants' intent to

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threaten Torosyan. After all, "whether a defendant has attempted

to induce fear in a victim depends only in part on what the

defendant has said or done to the victim. It also depends on what

the defendant thinks or reasonably should think the victim

independently believes about the context in which both are

operating." United States v. Goodoak, 836 F.2d 708, 714 (1st Cir.

1988). Where, as here, the defendants had reason to believe that

Torosyan would have learned of their prior violent acts,4 they

could rely on him "to put two and two together and to feel afraid."

Id. Thus, the disputed evidence was relevant to a determination

concerning what the defendants likely thought Torosyan believed

about the context in which all three operated. It follows that

the district court did not abuse its discretion in concluding that

evidence of the defendants' prior violent acts was specially

relevant to the jury's assessment of the defendants' intent.

If more were needed — and we doubt that it is — evidence

that Torosyan had been told about the defendants' prior violent

acts was also specially relevant to show Torosyan's state of mind,

including his reasonable belief in the defendants' threats of

4For instance, the defendants were well aware that Torosyan
worked closely with their former coworkers and girlfriends. In
addition, Torosyan testified that he had communicated with David
concerning at least some of the acts that Dorofyeyeva had described
to him. On this record, a jury reasonably could conclude that the
defendants premised their threats on an understanding that
Torosyan was aware of at least some of their prior violent acts.

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violence. See Iwuala, 789 F.3d at 6. Where the question is

whether the defendants' "words and acts amounted to an attempt to

induce fear, the jury is surely entitled to know whether those

words and acts did in fact induce fear." Goodoak, 836 F.2d at

712. Similarly, evidence concerning the victim's reasonable

beliefs about the context in which he and his putative extorter

are operating is relevant to show the victim's state of mind. See

id. at 713.

To be sure, Torosyan did not testify in so many words

that what he knew of the defendants' prior violent acts made him

more fearful. However, Torosyan did testify that, upon learning

of those prior violent acts, he "felt terrible" and "didn't know

what to do." Everything depends on context; and given this

description and the setting in which it occurred, a jury reasonably

could conclude that Torosyan felt fear. In the last analysis,

there are no magic words that a victim must utter in order to

render a putative extorter's prior violent acts relevant to prove

state of mind.

This brings us to the second step of the two-step

analysis: the district court's balancing under Rule 403. "The

balance of probative value and unfairly prejudicial effect is,

within wide limits, one for the trial court to strike." United

States v. Walker, 665 F.3d 212, 229 (1st Cir. 2011). "Only rarely

— and in extraordinarily compelling circumstances — will we, from

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the vista of a cold appellate record, reverse a district court's

on-the-spot judgment concerning the relative weighting of

probative value and unfair effect." Freeman v. Package Mach. Co.,

865 F.2d 1331, 1340 (1st Cir. 1988).

We descry no such compelling circumstances here. The

defendants' threats were central to the Hobbs Act extortion counts,

and — as we have said — evidence that Torosyan knew of the

defendants' prior violent acts was probative as to both the

defendants' intent to threaten and to Torosyan's perception that

he was being threatened. We do not gainsay that evidence of the

defendants' prior violent acts, by its very nature, was

prejudicial. Cf. United States v. Rodriguez-Estrada, 877 F.2d

153, 156 (1st Cir. 1989) ("By design, all evidence is meant to be

prejudicial."). But that evidence was also significantly

probative, and the Rule 403 balance does not insulate a party from

any and all evidence that is harmful to his cause. Rather, it

"bars only unfair prejudice." Iwuala, 789 F.3d at 8 (emphasis in

original).

The defendants argue that because the probative value of

the violent acts evidence was minimal and what it was admitted to

prove was not in dispute, the admission of such prejudicial

evidence was unfair. See United States v. Varoudakis, 233 F.3d

113, 123 (1st Cir. 2000). This argument rests on a faulty premise.

Throughout the trial, the defendants continued to asseverate that

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the government had failed to show that the intent element was met,

asserting that their alleged threats to Torosyan were not made or

perceived as preludes to actual violence. The evidence of the

defendants' prior violent acts presents a sharp contrast to this

characterization and, therefore, conveys significant probative

value as to at least one necessary element of the crime that was

very much in dispute.

In the end, we think that the able district court

performed its balancing function well, and we discern no unfair

prejudice here. What is more, any risk of unfair prejudice was

palliated by carefully crafted limiting instructions given both

before and after Torosyan's testimony and reiterated as part of

the court's end-of-case jury instructions. See United States v.

Pelletier, 666 F.3d 1, 6 (1st Cir. 2011). We hold, therefore,

that the district court did not abuse its discretion in admitting

the disputed evidence.

III. EMBEZZLEMENT

Although the jury convicted David on two counts of

embezzlement (counts 3 and 4), the government conceded during the

pendency of these appeals that his conviction on count 3 cannot be

sustained. Without belaboring the government's reasons for this

concession, we limit our analysis to David's conviction on count

4, which charged him with embezzling $2,000 from a "health care

benefit program," as defined in 18 U.S.C. § 24(b).

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 18 U.S.C. § 669(a) prohibits, inter alia, the knowing

and willful embezzlement of "moneys, funds, securities, premiums,

credits, property, or other assets of a health care benefit

program." Congress has defined the term "health care benefit

program" to include "any individual or entity who is providing a

medical benefit, item, or service for which payment may be made

under [a public or private] plan or contract." 18 U.S.C. § 24(b).

David's attack on his conviction under count 4 is three-

pronged. First, he asserts that AHC was not a health care benefit

program at the time of the alleged embezzlement.5 Second, he

asserts that the embezzlement described in count 4 involved funds

that came from HMG, a management company distinct from AHC (and

not itself a health care benefit program). Third, he asserts that

he was authorized to withdraw the disputed sum under the letter

agreement.

At bottom, all three of these claims of error constitute

challenges to the sufficiency of the evidence. Thus, they engender

de novo review. See Iwuala, 789 F.3d at 8.

David's first two assertions need not detain us. In his

post-trial Rule 29 motion, David averred that the government did

5 Specifically, David tries to argue that because the relevant
reimbursement contracts were executed in 2016 and only became
effective retroactively for the period that included the date on
which the alleged embezzlement occurred, AHC was not a health care
benefit program when the charged crime was committed.

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not satisfy its burden of proof on count 4 because it had "failed

to present evidence that at the time of the alleged embezzlement

. . . , [AHC] was a 'health care benefit program' as that term is

defined in 18 U.S.C. § 24(b)." Specifically, he argued that the

government was obliged to adduce evidence that "there was actually

reimbursement" for the medical services rendered. The government

rejoined that the parties had stipulated that AHC was a health

care benefit program at and after November 1, 2015.

David did not challenge the government's evidence of the

stipulation but, rather, changed his tune and debuted his other

two sufficiency challenges in a supplemental Rule 29 motion.6

There, he acknowledged that the government "did present at trial

. . . documentation indicating that [AHC] was a health care benefit

program and the defendant agreed to stipulate to that fact."

Instead, he argued that the government had presented no such

evidence for HMG and that, in all events, he was authorized to

withdraw the allegedly embezzled sum.

6 On the second day of the sentencing hearing, David's counsel
expressed some buyer's remorse regarding the stipulation. He
stated that it had become apparent during the trial that "there
was [a] lack of evidence . . . regarding treatments being actually
made to patients during the relevant time period and requests for
reimbursement from these insurance carriers." He nevertheless
conceded that any argument as to whether AHC was a health care
benefit program was "precluded to the extent there was a
stipulation."

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 Stipulations are an important tool in the orderly

administration of justice. Once made, they cannot be disregarded

as lightly as a tarantula sheds its skin. See Cabán Hernández v.

Philip Morris USA, Inc., 486 F.3d 1, 6 (1st Cir. 2007). Having

stipulated that AHC was a health care benefit program,

"affirmatively agree[ing] to not put the government to its proof

of an element of a crime," David "relinquished all other defenses,

factual and legal, pertaining to the stipulated element." United

States v. Meade, 175 F.3d 215, 223 (1st Cir. 1999).

David seems to suggest that equitable considerations

counsel in favor of relieving him of the burden of the stipulation.

This suggestion is unpersuasive. For one thing, David never asked

the district court to vacate the stipulation, and we are reluctant

to entertain a request for relief that could have been made in the

district court, but was not. See Shervin v. Partners Healthcare

Sys., Inc., 804 F.3d 23, 41 (1st Cir. 2015) ("As a general rule,

a party is not entitled to relief on appeal that she did not seek

below."); Beaulieu v. IRS, 865 F.2d 1351, 1352 (1st Cir. 1989)

("[I]t is black letter law that it is a party's first obligation

to seek any relief that might fairly have been thought available

in the district court before seeking it on appeal."). For another

thing, David entered into the stipulation despite having access to

the same facts regarding contractual approval dates, see supra

note 5, that he now argues preclude such a finding. We therefore

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discern no hint of inequity in holding David to the stipulation

into which he freely entered.

David mounts one last argument concerning the

stipulation. He points out that the stipulation was neither

entered into evidence nor read to the jury. While it certainly

would have been correct practice for the government to have asked

the district court to communicate the gist of the stipulation to

the jury, David never suggested such a course of action below.

Nor did he mention this oversight to the district court at the

close of the government's case. Thus, the claim of error that he

now advances is nothing but an unpreserved challenge to the

sufficiency of the evidence — and we review such challenges only

for clear and gross injustice. See United States v. Pratt, 568

F.3d 11, 18 (1st Cir. 2009). We detect nothing resembling an

injustice here because David had conceded the facts set out in the

stipulation. It follows that the failure to apprise the jury of

the stipulation constituted, at most, a technical error. See id.

(reaching this conclusion where stipulation was not communicated

to jury prior to jury instructions). In the circumstances of this

case, that technical error is harmless.

This brings us to David's argument, raised for the first

time in his supplemental Rule 29 motion, that the allegedly

embezzled sum was withdrawn from an entity (HMG) that the

government never established was a health care benefit program.

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But David waived this argument: throughout the trial, all of the

parties (including David) treated AHC and HMG as a unit. In his

summation, for instance, David's trial counsel repeatedly accepted

the government's framework that the two entities comprised a single

business — "Allied Health" — which he variously referred to as

"the business" and "the company." Having treated the Clinic as a

single entity comprising both AHC and HMG, David waived any

subsequent argument that there was a meaningful distinction

between the two entities for purposes of count 4. Cf. United

States v. Orsini, 907 F.3d 115, 119-20 (1st Cir. 2018) (holding

that defendant who explicitly affirmed fact before district court,

had waived issue and could not "resurrect it on appeal").

Of course, courts have discretion to relieve a party of

the effects of a waiver in the interests of justice. See United

States v. Torres-Rosario, 658 F.3d 110, 116 (1st Cir. 2011). The

district court heard arguments bearing on this possibility in

connection with David's supplemental Rule 29 motion. The

government proffered evidence proving that the funds David

withdrew from HMG had been transferred directly from AHC to HMG

that same day. David did not contest the veracity of this

evidence, and the district court declined to excuse David's waiver.

We think that this ruling was a sound exercise of the district

court's discretion.

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 David's last assignment of error focuses on whether the

evidence was sufficient to show embezzlement under 18 U.S.C. § 669.

Some background is helpful. An individual who "knowingly and

willfully embezzles, steals, or otherwise without authority

converts" moneys or assets of a health care benefit program

violates Section 669. "The crime of embezzlement has long had a

clear meaning[:] . . . 'the fraudulent conversion of the property

of another by one who is already in lawful possession of it.'"

United States v. Young, 955 F.2d 99, 102 (1st Cir. 1992) (quoting

2 Wayne R. LaFave & Austin W. Scott, Jr., Substantive Criminal Law

§ 8.6, at 368 (1986)). An individual engages in fraudulent

conversion when, for instance, he "us[es] money entrusted to him

by another person for his own purposes or benefit and in a way

that he knows the 'entruster' did not intend or authorize." Id.

Here, the government posited that David embezzled funds

from AHC when he withdrew $2,000 toward his salary for the month

of November despite having agreed that a $3,000 loan from Torosyan

would comprise his salary for that month, if not repaid.7 In

support, the government presented Torosyan's testimony about the

loan and the lack of any repayment. It also introduced evidence

7 Earlier in the month, David also withdrew $1,500 toward his
November salary. This withdrawal of funds was the centerpiece of
count 3 — a count that the government has now disavowed.

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of Torosyan's check for $3,000 bearing a notation that it was

"borrowed."

David's argument in opposition is that he acted with

authority when he withdrew the funds because the letter agreement

entitled him to "an incremental additional amount of salary" once

the Clinic was operational. The district court rejected this

argument and so do we. Merely pointing to abstract authority that

may entitle an individual to withdraw funds does not establish as

a matter of law that a particular withdrawal was authorized. See

United States v. García-Pastrana, 584 F.3d 351, 375-76 (1st Cir.

2009). Based on the evidence of record, a jury reasonably could

conclude — as this jury did — that the $2,000 withdrawal was not

authorized because David took that sum in violation of his

agreement with Torosyan. Consequently, the district court did not

err in refusing to order judgment of acquittal on count 4.

IV. INEFFECTIVE ASSISTANCE OF COUNSEL

David has one last shot in his sling. Represented by

new counsel on appeal, he alleges for the first time that his trial

counsel provided him with constitutionally ineffective assistance,

in derogation of the Sixth Amendment. See U.S. Const. amend VI;

see also Strickland v. Washington, 466 U.S. 668, 687 (1984). "We

have held with a regularity bordering on the monotonous that fact-

specific claims of ineffective assistance of counsel cannot make

their debut on direct review of criminal convictions, but, rather,

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must originally be presented to, and acted upon by, the trial

court." United States v. Mala, 7 F.3d 1058, 1063 (1st Cir. 1993).

This prudential rule rests on sound reasoning. As we explained in

Mala, ineffective assistance claims "typically require the

resolution of factual issues that cannot efficaciously be

addressed in the first instance by an appellate tribunal." Id.

"[T]he trial judge, by reason of his familiarity with the case, is

usually in the best position to assess both the quality of the

legal representation afforded to the defendant in the district

court and the impact of any shortfall in that representation."

Id.

There is, of course, an isthmian exception to the Mala

rule. When "the critical facts are not genuinely in dispute and

the record is sufficiently developed to allow reasoned

consideration" of an ineffective assistance of counsel claim, we

may, as a matter of discretion, adjudicate the claim ab initio.

United States v. Natanel, 938 F.2d 302, 309 (1st Cir. 1991).

Elsewise, the proponent of a previously unexplored ineffective

assistance of counsel claim must raise it in a collateral

proceeding brought under 28 U.S.C. § 2255. See, e.g., United

States v. Santana-Dones, 920 F.3d 70, 82-83 (1st Cir. 2019); United

States v. Miller, 911 F.3d 638, 640 (1st Cir. 2018).

The Mala rule fits this case like a glove. The record

before us is rife with ambiguities that prevent us from determining

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whether or not David's representation satisfied the Sixth

Amendment standard. Of critical importance, there is little in

the record to illuminate "why [David's] lawyer[] did what [he]

did." United States v. Moran, 393 F.3d 1, 10 (1st Cir. 2004).

Without this information, it is virtually impossible to assess

what reasoning, if any, guided counsel's actions. United States

v. Ladd, 885 F.2d 954, 961 (1st Cir. 1989) ("[R]obes and gavels

are the tools of a jurist's trade — not tea leaves or crystal

balls."). Here, as in Moran, "[f]actfinding will be required to

make th[ose] determination[s], which means that the district court

should hear the claim in the first instance." 393 F.3d at 11. We

therefore dismiss this claim of error; without prejudice, however,

to David's right, if he so elects, to raise it through a petition

for post-conviction relief under 28 U.S.C. § 2255.

V. CONCLUSION

We need go no further. For the reasons elucidated above,

we reverse David's conviction on count 3 and otherwise affirm the

convictions of both defendants; without prejudice, however, to

David's right, if he so elects, to prosecute his ineffective

assistance of counsel claim through a petition for post-conviction

relief under 28 U.S.C. § 2255. We remand with instructions to the

district court to consider whether and to what extent (if at all)

a modification of David's sentences on counts 1, 2, and 4 may be

in order. See United States v. García-Ortiz, 657 F.3d 25, 31 (1st

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Cir. 2011) ("When a defendant successfully challenges one of

several interdependent [counts], the proper course often is to

remand for resentencing on the other (non-vacated) counts.");

United States v. Genao-Sánchez, 525 F.3d 67, 71 (1st Cir. 2008)

(holding remand appropriate where dropped counts may "alter the

dimensions of the sentencing 'package'"); see also United States

v. Pimienta-Redondo, 874 F.2d 9, 14 (1st Cir. 1989) (en banc)

("[W]hen a defendant is found guilty on a multicount indictment

. . . [, and] the conviction on one or more of the component counts

is vacated, common sense dictates that the judge should be free to

review the efficacy of what remains in light of the original

[sentencing] plan, and to reconstruct the sentencing architecture

upon remand."). The district court should, at the same time,

revise the special assessments and the restitution order in David's

case to reflect the reversal of his conviction on count 3.

So Ordered.

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