United States v. Santiago Gonzalez

UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT

No. 94-1246

UNITED STATES,

Appellee,

v.

JUAN SANTIAGO-GONZALEZ,

Defendant - Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF PUERTO RICO

[Hon. Carmen Consuelo Cerezo, U.S. District Judge]

Before

Cyr, Circuit Judge,

Bownes, Senior Circuit Judge,

and McAuliffe,* District Judge.

Luis F. Abreu-El as on brief for appellant.

Guillermo Gil, United States Attorney, Jos A. Quiles-

Espinosa, Senior Litigation Counsel and Miguel A. Pereira,

Assistant United States Attorney, on brief for appellee.

September 25, 1995

* Of the District of New Hampshire, sitting by designation.

McAULIFFE, District Judge. Juan Santiago-Gonz lez
McAULIFFE, District Judge.

("defendant") appeals from the district court's refusal to

enforce a term of his written plea agreement ("Agreement") which

ostensibly required the government to file a motion for downward

departure under 5K1.1 of the United States Sentencing

Guidelines. He also questions the district court's calculation

of his base offense level under the Guidelines. For the reasons

set forth below, we affirm.

I. BACKGROUND
I. BACKGROUND

On July 2, 1992, defendant and three others were

indicted on four counts of defrauding the Corporaci n Insular de

Seguros ("CIS") of $1,401,000.00. CIS, a privately held

insurance company chartered in the Commonwealth of Puerto Rico,

was controlled by the defendant and two of three co-defendants.

Defendant was employed as CIS's vice president for claims. Two

of his co-defendants served as CIS's president and vice president

for finance and operations, respectively, and the third, an

attorney, was engaged in private practice. The three corporate

officers were effectively able to manage the company's assets and

authorize payment of claims made against its policies.

From October of 1991 until May of 1992, defendant and

his colleagues jointly ran a false insurance claim scheme.

Defendant, as vice president for claims, reopened previously

closed claim files so fictitious claims could be made against

those accounts. The vice president for finance established and

assigned cash reserves to those reopened accounts. The attorney

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then submitted fictitious claims on behalf of non-existent

clients, which were paid by CIS and charged against the reserves

assigned to the reopened accounts. The false claims were paid by

checks drawn on CIS's bank account and made payable to the

attorney, as counsel for the fictitious claimants. The attorney

cashed the checks, kept part of the proceeds for himself, and

distributed the remainder among the three CIS officers, usually

in equal shares.

Defendant's collaborators pled guilty soon after they

were charged, but defendant entered a not guilty plea and stood

trial. Two days into his trial, defendant reconsidered and

accepted a plea bargain. In exchange for defendant's plea of

guilty, the government agreed to exercise its discretion to file

a motion for downward departure under U.S.S.G. 5K1.1,

contingent on defendant's anticipated "completely truthful,

forthright, and honest assistance and information."

Additionally, the plea agreement required defendant to submit to

a polygraph examination "should the United States deem it

appropriate." After executing the Agreement, defendant dutifully

entered pleas of guilty to mail fraud and aiding and abetting.

18 U.S.C. 1341; 18 U.S.C. 2.

In late April 1993, the government deemed it

appropriate for defendant to submit to a polygraph examination in

order to resolve some doubt about whether he was being entirely

truthful and cooperative in the ongoing investigation. Defendant

submitted to the polygraph and, in the opinion of the examiner,

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the test results indicated deception. Accordingly, at sentencing

the government refused to move for a downward departure under

U.S.S.G. 5K1.1.

In addition, the district court, relying on the

testimony of his accomplices, found that defendant was not a

minor participant in the scheme, as he claimed. Instead of

adjusting his offense level downward as defendant had hoped, the

trial judge upwardly adjusted his base offense level, relying on

U.S.S.G. 2F1.1(2) (more than minimal planning) and U.S.S.G.

3B1.3 (abuse of position of trust).

II. DISCUSSION
II. DISCUSSION

On appeal, defendant raises two issues. First, he

challenges the district court's refusal to enforce the

government's obligation to move for downward departure under

5K1.1. Next, he questions the district court's calculation of

his base offense level under the Guidelines.

A. Denial of Specific Performance of the Plea
A. Denial of Specific Performance of the Plea
Agreement
Agreement

Defendant says that by meeting with the prosecution,

providing truthful information, and submitting to the requested

polygraph examination, he substantially performed his obligations

under the Agreement, thereby earning the departure motion. He

argues that the government's obligation to file a 5K1.1 motion

was contingent only upon his providing "truthful information,"

which, in substance, he did.

The Agreement provides that "if in the opinion of the

[polygraph] examiner your answers indicate deception you will be

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in breach of this agreement." Defendant concedes that the

polygraph examiner was of the opinion that his answers indicated

deception, and he does not seriously dispute that in fact he did

not answer all questions truthfully. But, he says, successfully

passing a polygraph examination was not a condition precedent to

the government's obligation to move for downward departure; it

was simply an additional undertaking intended to provide the

government with some means of gauging the extent of his "truthful

cooperation" (which was the condition precedent). His failure to

answer every question truthfully during the polygraph examination

may have frustrated the government's desire for "corroboration,"

and the absence of corroboration may have devalued his "truthful

cooperation" by some degree, he argues, but he nevertheless

substantially "truthfully cooperated." He reasons that he at

least earned the departure motion, and says that it is the extent

of the departure that should reflect his less than perfect

performance.

We have held that plea agreements "must be attended by

safeguards to insure the defendant what is reasonably due in the

circumstances." United States v. Baldacchino, 762 F.2d 170, 179

(1st Cir. 1985) (citing Santobello v. New York, 404 U.S. 257

(1971)). We have also recognized that principles of contract law

often provide useful references when construing plea agreements.

See United States v. Anderson, 921 F.2d 335, 337 (1st Cir. 1990)

("It is black letter law that plea agreements, 'though part and

parcel of criminal jurisprudence, are subject to contract-law

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standards in certain respects.'") (quoting United States v.

Hogan, 862 F.2d 386, 388 (1st Cir. 1988)); see also United States

v. Papaleo, 853 F.2d 16, 19 (1st Cir. 1988) ("A contractual

approach to plea agreements ensures not only that constitutional

rights are respected, but also that the integrity of the criminal

process is upheld."); United States v. Gonz lez-S nchez, 825 F.2d

572, 578 (1st Cir. 1987) ("Contractual principles apply insofar

as they are relevant to determining what the government owes the

defendant.").

Applying contract-law principles in this case, we first

turn to the specific language of the Agreement. See Anderson,

921 F.2d at 338. That language is unambiguous:

You will submit, if you are requested to
do so, when requested to do so, to
polygraphic examination (lie detector
test) should the United States deem it
appropriate. If you fail to submit or if
in the opinion of the examiner your
your
answers indicate deception you will be in
answers indicate deception you will be in
breach of this agreement. (emphasis in
breach of this agreement.
original)

This obligation was thoroughly discussed during the

plea colloquy between defendant and the trial judge. Indeed,

defendant's own comments leave little doubt that he fully

understood that the government's obligation to file a 5K1.1

motion was conditioned on his submitting to a polygraph

examination if asked, and passing that examination "in the

opinion of the examiner":

THE COURT: . . . And if in the opinion
of the examiner your answers indicate
deception, you will be in breach of the

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agreement. Have you understood what that
means?

THE DEFENDANT: Yes your Honor.

THE COURT: That means that if you don't
pass the lie detector test it will be
understood that you are not providing
truthful and honest assistance and
information that is expected of you.

THE DEFENDANT: I understand, your Honor.

The only plausible interpretation of the Agreement,

given its unambiguous language and defendant's acknowledged

understanding, is that it means exactly what it says. See United

States v. Atwood 963 F.2d 476, 479 (1st Cir. 1992) (Court

interpreted plea agreement to mean precisely what it said where

defendant signed and agreed to it in the presence of judge).

Defendant does not claim that the examiner's opinion was rooted

in bad faith or was based on anything but his own objective

interpretation of the examination results. Rather, he argues

that because a polygraph examination is an inherently unreliable

means of determining truth, and such results are not generally

admissible in courts of law, that part of the Agreement requiring

him to submit to and pass the test should be deemed void.

But defendant was not "required" to accept those terms

of the Agreement. In this case both defendant and the government

agreed to the polygraph's use as the standard by which

defendant's performance of his obligation to be completely

truthful would be measured by the government. Both parties

presumably had sufficient confidence in its reliability for that

purpose. Having agreed to the test, whatever its scientific

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weaknesses might be,1 defendant cannot now be heard to say that

his own promise was illusory or that he was somehow misled. Nor

can he credibly argue that the government's discretionary

decision not to file the departure motion was made in bad faith

or without rational basis. Defendant's integrity as a possible

witness in other matters was certainly undermined by his failure

to answer questions truthfully. See, e.g., United States v.

Catalucci, 36 F.3d 151 (1st Cir. 1994). Besides, defendant does

not seriously contest the fact that he did not answer all

questions truthfully.

Because the defendant was in breach of his obligation

to be "completely truthful," the government was entitled to

exercise its discretion not to file a downward departure motion

under Guideline 5K1.1.

B. District Court's Calculation of Defendant's Total
B. District Court's Calculation of Defendant's Total
Offense Level
Offense Level

The district court set defendant's total offense level

under the Guidelines at 15, in part by upwardly adjusting his

base offense level pursuant to both U.S.S.G. 2F1.1(2) (more

than minimal planning) and U.S.S.G. 3B1.3 (abuse of a position

of trust). At the same time, the district court refused a

downward adjustment under U.S.S.G 3B1.2 (minor or minimal

1 We agree with the conclusion of the Court of Appeals for the
Third Circuit in United States v. Swinehart, 614 F.2d 853 n.2 (3d

Cir.), cert. denied, 449 U.S. 827 (1980): "Although the

infallibility of polygraphs is arguable, we decline to hold that
the Government cannot rely on the tests where the parties agree
to such reliance in a plea bargain."

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participant in offense). Defendant argues that the calculation

was clearly erroneous. Again, we disagree.

"Once the court of appeals has defined the guideline's

meaning and scope, it reviews the sentencing court's fact finding

only for clear error." United States v. St. Cyr, 977 F.2d 698,

701 (1st Cir. 1992) (citing United States v. Tardiff, 969 F.2d

1283, 1289 (1st Cir. 1992)); United States v. Connell, 960 F.2d

191, 197 (1st Cir. 1992); see also United States v. Rosado-

Sierra, 938 F.2d 1-2 (1st Cir. 1991) ("[D]efendant . . . can

prevail on appeal only by demonstrating that the district court's

determination as to his role in the offense was clearly

erroneous.") (per curiam); United States v. Garc a, 954 F.2d 12,

18 (1st Cir. 1992) ("Absent a mistake of law, we review a

sentencing court's role-in-the-offense determination only for

clear error.") (citing United States v. Dietz, 950 F.2d 50, 52

(1st Cir. 1991)); United States v. Akitoye, 923 F.2d 221, 227

(1st Cir. 1991)). Additionally, "where there is more than one

plausible view of the circumstances, the sentencing court's

choice among supportable alternatives cannot be clearly

erroneous." United States v. Ruiz, 905 F.2d 499, 508 (1st Cir.

1990); see also Rosado-Sierra, 938 F.2d at 2.

The district court's determination in this case is

supported by the record, and a two-level upward adjustment for

more than minimal planning under 2F1.1(b)(2)(A) was not clearly

erroneous. The distinction between "minimal" and "more than

minimal planning" as those terms are used in the Guidelines is

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illustrated by the example given in the accompanying comment: "a

single taking accomplished by a false book entry would constitute

only minimal planning . . . [while] several instances of taking

money, each accompanied by false entries [would constitute more

than minimal planning]." 1B1.1(f), comment. Here, the record

reveals a number of instances of taking money by false entries as

part of an overall scheme to defraud. More than minimal planning

was obviously required to carry out this sophisticated false

claims scheme. See United States v. Brandon, 17 F.3d 409, 459

(1st Cir. 1994) ("[W]e are not inclined to reverse a finding of

more than minimal planning unless the evidence compels the

conclusion that the defendant's actions were purely opportune or

'spur of the moment.'") (citing United States v. Gregorio, 956

F.2d 341, 343 (1st Cir. 1989)); cf. also United States v. Fox,

889 F.2d 357, 361 (1st Cir. 1989) ("[W]e cannot conceive of how

even obtaining one fraudulent loan would not require more than

minimal planning."). The trial judge properly concluded from the

undisputed facts that defendant's participation in at least seven

separate "false entries" for the purpose of defrauding CIS of

approximately $1.4 million, required more than minimal planning,

and we will not disturb that finding on appeal.

Defendant also asserts that the district court erred by

increasing his offense level by two based on his alleged abuse of

a position of trust, pursuant to U.S.S.G. 3B1.3. That

guideline calls for an upward adjustment where:

[T]he defendant abused a position of
public or private trust, or used a

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special skill, in a manner that
significantly facilitated the commission
or concealment of the offense.

U.S.S.G. 3B1.3.

When reviewing a district court's upward adjustment

under 3B1.3, we first determine the legal meaning of terms such

as "position of private trust," then we ask "whether the

defendant actually used the position to facilitate or conceal the

offense . . . and if so, whether the position contributed to the

misconduct in a significant way." United States v. Tardiff, 969

F.2d 1283, 1289 (1st Cir. 1992). The district court's

determination on each point is of course afforded due deference

and is reviewed only for clear error. Id.

Defendant unquestionably held a position of private

trust. As we have stated before, "'the primary trait that

distinguishes a person in a position of trust from one who is not

is the extent to which the position provides the freedom to

commit a difficult-to-detect wrong.'" Id. (citing United States

v. Hill, 915 F.2d 502, 505 (9th Cir. 1990)). Defendant, an

officer of the corporation, occupied a high level position that

not only enabled him to exercise broad discretionary authority

over the payment of claims made against CIS's policies, but, at

the same time, allowed him to "commit difficult to detect

wrongs," id., such as the fraudulent scheme charged in this case.

The record establishes that defendant actually used his

position to facilitate or conceal the crime, and so, the position

contributed to the misconduct. Defendant conceded, after all,

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that as vice president for claims he reopened previously closed

cases and approved payment of known false claims filed in those

cases. Furthermore, it is self-evident that defendant's position

within the company enabled him to facilitate both the execution

and attempted concealment of that scheme. The district court's

finding that defendant abused his position of private trust,

warranting an upward adjustment under 3B1.3, was fully

supported by the record.

The district court's decision not to downwardly adjust

under 3B1.2 (minor or minimal participant in the offense) is

also fully justified by the record. U.S.S.G. 3B1.2 provides

for a downward adjustment where defendant's role "in committing

the offense . . . makes him substantially less culpable than the

average participant." The scheme involved here required each

participant to perform a significant and necessary role; the

contribution of one participant was no less significant than that

of another in effecting the scheme. Accordingly, the district

court correctly determined that defendant was not substantially

less culpable than his associates and was not entitled to a

downward adjustment.

III. CONCLUSION
III. CONCLUSION

For the reasons stated above, we affirm the district

court in all respects.

AFFIRMED.

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