United States Court of Appeals
For the First Circuit
No. 00-2029
UNITED STATES,
Appellee,
v.
LUIS E. DUBÓN-OTERO,
Defendant - Appellant.
No. 00-2030
UNITED STATES,
Appellee,
v.
JORGE L. GARIB-BAZAIN,
Defendant - Appellant.
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. José Antonio Fusté, U.S. District Judge]
Before
Selya, Circuit Judge,
John R. Gibson,* Senior Circuit Judge,
* Of the Eighth Circuit, sitting by designation.
and Lipez, Circuit Judge.
David W. Roman, with whom Brown & Ubarri, Frederick P. Hafetz,
Susan R. Necheles, Elizabeth M. Johnson, and Goldman & Hafetz were on
brief, for appellant Dubón.
Scott A. Srebnick, with whom Howard M. Srebnick and Black,
Srebnick, & Kornspan were on brief, for appellant Garib.
Richard A. Friedman, United States Department of Justice, with
whom Guillermo Gil, United States Attorney, and Maria Dominguez and
Thomas F. Klumper, Assistant United States Attorneys, were on brief,
for appellee.
May 29, 2002
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JOHN R. GIBSON, Senior Circuit Judge. Luis Dubón-Otero and
Jorge L. Garib-Bazain appeal from their convictions, after a joint
trial, for conspiring to steal property worth more than $5,000 from an
organization receiving more than $10,000 in federal benefits in any
one-year period. See 18 U.S.C. §§ 371, 666(a)(1)(A) and (2) (1994).
They argue that there was a constructive amendment of the indictment,
that there was insufficient evidence to convict them, and that the jury
instructions were defective. They also challenge the makeup of their
jury and the appointment of the United States Attorney. Garib also
appeals his conviction for making false declarations before a grand
jury in violation of 18 U.S.C. § 1623 (1994). We affirm.
Advanced Community Health Services (Health Services) was
incorporated in the Commonwealth of Puerto Rico in 1987 as a for-profit
corporation.1 Dubón, a lawyer, and Garib, a doctor, were shareholders
and directors. Dubón served as legal advisor to Health Services and
Garib as the Medical Director of Patient Services. Dr. Yamil Kourí-
Perez was a consultant from the Harvard Institute for International
1 Health Services later became a non-profit corporation.
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Development who, together with Jeanette Sotomayor-Vazquez, the
administrative director, and Angel Luis Corcino-Mauras, the
comptroller, conducted the day-to-day operations of Health Services.
Dubón and Garib were charged with conspiring to use Health
Services funds to pay personal expenses and make political payoffs.
The principal witness at trial was Corcino, whose testimony painted a
picture of Kourí as the primary conspirator. Kourí and Sotomayor were
indicted along with Dubón and Garib, but tried separately. They were
convicted, and we affirmed in United States v. Sotomayor-Vazquez, 249
F.3d 1 (1st Cir. 2001).
In January 1988, Health Services contracted with the
Municipality of San Juan to provide services for AIDS patients. The
initial contract provided that the Municipality would pay Health
Services a flat fee of $3.2 million per year for these services.
Because under the contract Health Services became "the exclusive source
of AIDS counseling and professional services in San Juan," United
States v. Dubón-Otero, No. 97-091, slip op. at 10 (D. P.R. March 3,
2000), federal monies began to find their way to Health Services.
The Government introduced evidence regarding the payment of
these federal monies to Health Services, and the ways in which Dubón
and Garib diverted these funds. This evidence will be discussed in
greater detail below, as we discuss the various arguments made by Dubón
and Garib on appeal.
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I.
Dubón and Garib argue that the district court erred by
allowing a constructive amendment of the indictment. Specifically,
they complain the court admitted evidence that the funds the defendants
had stolen were federal or public funds, which may have been entrusted
to Health Services but never lost their federal or public character.
Appellants argue admission of this evidence constituted a constructive
amendment of the indictment. They construe the indictment as limiting
the charge against them to conspiring to steal only Health Services
funds.
A constructive amendment occurs when the charging terms of
the indictment are altered, either literally or in effect,
by prosecution or court after the grand jury has last passed
upon them. An amendment of the indictment is considered
prejudicial per se and grounds for reversal of a conviction
whether it is brought about by a literal alteration of the
words of the indictment, a jury instruction which modifies
the offense charged in the indictment, or the admission of
evidence of an offense not charged by the grand jury.
United States v. Dunn, 758 F.2d 30, 35 (1st Cir. 1985) (internal
quotation marks and citations omitted).2
The charging paragraph of the indictment alleged that Dubón
and Garib, "as agents of an organization which received benefits in
2 Because our ultimate conclusion is that there was no
constructive amendment in this case, we need not address the
Government's argument that the rule of per se reversal of cases
where there has been a constructive amendment has been modified
by the Supreme Court's recent decision in Neder v. United
States, 527 U.S. 1 (1999) (holding that failure to instruct jury
on element of crime is subject to harmless error review).
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excess of $10,000.00 under a Federal program involving a grant, or
other form of Federal assistance," conspired with others to "embezzle,
steal, and obtain by fraud, and without authority knowingly convert to
the use of a person not the rightful owner, and intentionally misapply
property worth at least $5,000.00 owned by such organization, that is,
monies in excess of $2,000,000.00 in program funds." (Emphasis added.)
(Paragraph Thirty-Seven of the indictment read: "the defendants
embezzled, stole and obtained by fraud, in excess of $2,000,000.00 of
public funds." (Emphasis added.)) The indictment incorporated Counts
Two through Thirty-Four as overt acts, which further described the
funds in question as "owned by or under the care, custody, and control
of [Health Services]." (Emphasis added.). Under Count I, the
indictment charged Dubón and Garib generally with conspiracy to violate
§ 666. Section 666 seeks, among other things, to punish any agent of
an organization receiving more than $10,000 in federal benefits in any
one-year period, who "embezzles, steals, obtains by fraud, or otherwise
without authority knowingly converts to the use of any person other
than the rightful owner or intentionally misapplies property that--(i)
is valued at $5,000 or more, and (ii) is owned by, or is under the
care, custody, or control of such organization." 18 U.S.C. §
666(a)(1)(A) (emphasis added).3 While the elements of the charged crime
3 The statute provides in relevant part:
(a) Whoever, if the circumstances described in subsection (b) of
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have to "appear primarily from the language in the indictment . . .
common sense suggests that such a citation should not be entirely
ignored where, as here, it so plainly reinforces what is implicit in
the text." United States v. McLennan, 672 F.2d 239, 243-44 (1st Cir.
1982).
Dubón and Garib cite United States v. Pheaster, 544 F.2d 353
this section exists--
(1) being an agent of an organization, or of a State, local,
or Indian tribal government, or agency thereof--
(A) embezzles, steals, obtains by fraud, or otherwise
without authority knowingly converts to the use of any
person other than the rightful owner or intentionally
misapplies, property that--
(i) is valued at $5,000 or more, and
(ii) is owned by, or is under the care, custody,
or control of such organization, government, or
agency;
. . .
shall be fined under this title, imprisoned not more than 10
years, or both.
(b) The circumstance referred to in subsection (a) of this
section is that the organization, government, or agency
receives, in any one year period, benefits in excess of $10,000
under a Federal program involving a grant, contract, subsidy,
loan, guarantee, insurance, or other form of Federal assistance.
(c) This section does not apply to bona fide salary, wages,
fees, or other compensation paid, or expenses paid or
reimbursed, in the usual course of business.
(d) As used in this section--
. . .
(5) the term "in any one-year period" means a continuous
period that commences no earlier than twelve months before
the commission of the offense or that ends no later than
twelve months after the commission of the offense. Such
period may include time both before and after the commission
of the offense.
18 U.S.C. § 666.
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(9th Cir. 1976), for the proposition that overt acts cannot supply an
element missing from the charging paragraph. See id. at 361 ("[A]
conspiracy indictment's specification of overt acts cannot be used to
supply the allegation of a critical element completely missing from the
charging language."). However, Pheaster itself recognized that
"reference to the overt acts is appropriate to confirm an otherwise
commonsense interpretation of an allegation which is included in the
charging language," id. at 362, and thus is of no help to Appellants.
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. Kelly, 722 F.2d
873, 876 (1st Cir. 1983); cf. United States v. Delano, 55 F.3d 720, 729
(2d Cir. 1995) ("[W]e have consistently permitted significant
flexibility in proof, provided that the defendant was given notice . .
. ."). The indictment here put Appellants on notice that they would
have to defend against exactly the type of evidence of entrustment of
which they now complain. If Dubón and Garib chose not to defend
against that type of evidence, that choice does not make the district
court's permitting the Government to go forward with such evidence a
constructive amendment.
II.
The indictment in this case charged a conspiracy covering the
years 1989 to 1994. Dubón and Garib argue the district court erred by
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refusing to acquit them following trial because the Government failed
to prove Health Services received any federal benefits before 1991.
They contend that amounts received in 1989 were commercial payments,
not federal benefits, and thus their convictions could not be
predicated on pre-1991 conduct.4 Since there would be no way of
assuring the jury did not rely on pre-1991 conduct in reaching its
conclusion, the conviction could then not stand. See Yates v. United
States, 354 U.S. 298, 312 (1957) ("[W]e think the proper rule to be
applied is that which requires a verdict to be set aside in cases where
the verdict is supportable on one ground, but not another, and it is
impossible to tell which ground the jury selected."). The Government,
on the other hand, argues it proved Health Services received federal
benefits beginning in January 1989. In the alternative, the Government
argues the Supreme Court's decision in Neder v. United States, 527
U.S. 1 (1999), modified Yates to allow harmless error review,
and the error here was indeed harmless.5
We review a denial of a Rule 29 motion for acquittal de novo.
United States v. Czubinski, 106 F.3d 1069, 1073 (1st Cir. 1997). We
also review de novo the question of what type of transactions
4 As we explain below, federal monies are not synonymous
with federal benefits for purposes of a conviction under § 666.
5As in Part I above, our ultimate conclusion here precludes
our having to address the Government's alternative Neder
argument.
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constitute benefits under § 666. See United States v. Peery, 977 F.2d
1230, 1233 n.2 (8th Cir. 1992) ("[D]etermining whether section 666
applies to Peery's conduct is a question of law."). Finally, we review
de novo the question of whether the Government presented sufficient
evidence at trial to prove Health Services in fact received benefits
under § 666, viewing the evidence in the light most favorable to the
Government. See United States v. Otero-Mendez, 273 F.3d 46, 50 (1st
Cir. 2001); United States v. Fischer, 168 F.3d 1273, 1276 n.7 (11th
Cir. 1999), aff'd Fischer v. United States, 529 U.S. 667 (2000); United
States v. Copeland, 143 F.3d 1439, 1442 (11th Cir. 1998).
Appellants concede Health Services received federal benefits
beginning in 1991. The question we must answer is whether Health
Services' receipt of federal monies between 1989 and 1991 constituted
receipt of federal benefits. Three distinct transactions are at issue.
First, on January 13, 1989, Health Services deposited two checks
totaling $11,862.14 from the Centers for Disease Control, a federal
agency. The Centers for Disease Control had contracted with the
Municipality to test members of the public for AIDS, and the
Municipality subcontracted the work to Health Services. Health
Services was paid directly by the Centers for Disease Control. There
was evidence Health Services received another $11,124.03 from the
Centers for Disease Control in August 1989 for similar work. Second,
Health Services received $70,680 in 1989, and $99,729 in 1990, to
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operate an assessment and intervention center for drug addicts. This
money came from the Municipality. The Municipality in turn had
received it from the Commonwealth, which had received it as a grant
from the National Institute on Drug Abuse (the Institute), a federal
agency. Third, on January 10, 1989, Health Services received $100,000
for work on a mass-media education project on AIDS. Although this
money was paid by the Municipality, there was testimony from a
municipal official that this payment had its source in federal funds,
which passed through the Puerto Rico Department of Health to the
Municipality.
The Supreme Court recently addressed the issue of what
constitutes receipt of benefits under § 666 in Fischer v. United
States, 529 U.S. 667 (2000).6 In that case, the Court concluded that
§ 666 "covers fraud perpetrated on organizations participating in the
Medicare program." Id. at 669. The Court reached this conclusion
because the "nature and purposes of the Medicare program," id. at 671,
indicated payments were made "for significant and substantial reasons
in addition to compensation or reimbursement," such as assisting "the
hospital in making available and maintaining a certain level and
6 Fischer was decided after the convictions in this case.
Nonetheless, it applies on direct appeal. See United States v.
Ochs, 842 F.2d 515, 519 (1st Cir. 1988) ("[I]n our direct review
of the convictions entered below, we are bound by McNally[ v.
United States, 483 U.S. 350 (1987)], even though it was decided
after the completion of proceedings in the district court.").
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quality of medical care, all in the interest of both the hospital and
the greater community," id. at 679-80. The Court stated that the term
"benefits" is used in the statute in its ordinary sense, id. at 677,
and since the hospitals themselves derive significant advantage from
participating in Medicare, they could be said to be deriving benefits
within the meaning of § 666, "a statute we have described as
'expansive,' 'both as to the [conduct] forbidden and the activities
covered,'" id. at 678 (quoting Salinas v. United States, 522 U.S. 52,
56 (1997)). The Court saw this conclusion as consistent with the
language of the statute, which "indicates that Congress viewed many
federal assistance programs as providing benefits to participating
organizations," as well as "Congress' expansive, unambiguous intent to
ensure the integrity of organizations participating in federal
assistance programs." Id. at 678. The Court set out the following
test:
To determine whether an organization participating in a
federal assistance program receives "benefits," an
examination must be undertaken of the program's structure,
operation, and purpose. The inquiry should examine the
conditions under which the organization receives the federal
payments. The answer could depend, as it does here, on
whether the recipient's own operations are one of the
reasons for maintaining the program.
Id. at 681.
The Court rejected the notion that Medicare payments made to
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the hospitals were compensation of the type excluded by § 666(c).7 In
addition to the fact that monies paid included sums to enhance the
hospitals themselves, Medicare placed conditions on recipient
hospitals, "unlike the case of a contractor whom the Government does
not regulate or assist for long-term objectives or for significant
purposes beyond performance of an immediate transaction." Id. at 680.8
The Court also rejected the contention that since the primary
beneficiary of Medicare was the individual patient, the hospitals could
not also be said to have received a benefit under the program. Id. at
7 Subsection (c) states: "This section does not apply to
bona fide salary, wages, fees, or other compensation paid, or
expenses paid or reimbursed, in the usual course of business."
8 A number of cases from other circuits, which preceded
Fischer, also support the proposition that, while purely
commercial payments made by the government "as a commercial
entity, such as payments for supplies or equipment," do not
constitute benefits under § 666, the mere presence of quid pro quo
does not preclude a finding of federal benefits. United States v.
Rooney, 986 F.2d 31, 33-34 (2d Cir. 1993) (holding that loan proceeds
received from the Farmers Home Administration constituted benefits);
see United States v. Copeland, 143 F.3d 1439, 1441 (11th Cir. 1998)
(holding that money paid to Lockheed Aeronautical Systems Company as
the prime contractor for the Department of Defense did not constitute
benefits under § 666); United States v. Marmolejo, 89 F.3d 1185, 1189-
91 (5th Cir. 1996) (holding that funds provided to a county jail, in
exchange for the jail housing federal prisoners, constituted benefits),
aff'd sub nom. Salinas v. United States, 522 U.S. 52 (1997). Those
cases distinguish purely commercial transactions from "monies
distributed through 'Federal programs,' for which there is 'a specific
statutory scheme authorizing the Federal assistance in order to promote
or achieve certain policy objectives.'" Rooney, 986 F.2d at 35
(quoting S. Rep. No. 98-225, at 369 (1984), reprinted in 1984
U.S.C.C.A.N. 3182, 3510); see Copeland, 143 F.3d at 1441-42; Marmolejo,
89 F.3d at 1190.
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677. Finally, the Court refused to endorse the notion that all that
was required for funds to constitute benefits under § 666 was to
establish that they came from a federal program. Id.
When we apply Fischer to this case, we conclude, and the jury
supportably could have so found, that the Institute payments that
Health Services received constituted benefits.9 The Institute10 monies
in this case were originally disbursed under a grant to the Puerto Rico
Department of Anti-Addiction Services. Anti-Addiction Services in turn
made a grant of a portion of these funds to the Municipality, which
then paid Health Services. Dubón acknowledges this money was "clearly
a grant intended to assist AIDS patients in Puerto Rico," and "may also
have been intended to assist the Commonwealth or the Municipality in
that it enabled these government entities to assist citizens with drug
addictions." Dubón questions, however, "whether the program under
which this money was paid was intended to aid or promote the well being
of [Health Services]." We point out that the Supreme Court in Fischer
only said that "[t]he answer [to the question of whether there are
9We thus need not decide the character of the Centers for Disease
Control or mass-media education project payments.
10The National Institute on Drug Abuse "supports over 85 percent
of the world's research on the health aspects of drug abuse and
addiction." National Institute on Drug Abuse, Welcome to the NIDA
Website, at http://www.drugabuse.gov/NIDAWelcome.html (last visited May
17, 2002). Part of its mission "is to ensure the rapid and effective
dissemination and use of the results of that research to significantly
improve drug abuse and addiction prevention, treatment, and policy."
Id. Distribution of funds is authorized under 21 U.S.C. § 1177 (1994).
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federal benefits under § 666] could depend . . . on whether the
recipient's own operations are one of the reasons for maintaining the
program. . . . Other cases may present questions requiring further
examination and elaboration of the term 'benefits.'" 529 U.S. at 681-
82 (emphasis added).
One of the Institute's goals in making grants is to "insure
care of good quality, in general community facilities." 21 U.S.C. §
1177(f).11 Under its contract with the Municipality, Health Services
was "the exclusive source of AIDS counseling and professional services
in San Juan . . . supplying AIDS services under a federally financed
11Congress has authorized the Secretary of Health and Human
Services, "acting through the National Institute on Drug Abuse,"
to make grants and "enter into contracts with individuals and
public and private nonprofit entities" in order to provide
"educational programs, technical assistance for the development,
demonstration, and evaluation of drug abuse prevention,
treatment, and rehabilitation programs," and in so doing to
"accord a high priority to applications for grants or contracts
for primary prevention programs." 21 U.S.C. § 1177(a). The
Secretary is to "require coordination of all applications for
programs." § 1177(c). Projects and programs for prevention and
treatment services are subject to specific requirements. They
should, "whenever possible, be community based, insure care of
good quality in general community care facilities . . . and be
integrated with, and provide for the active participation of, a
wide range of public and nongovernmental agencies,
organizations, institutions, and individuals." § 1177(f).
"[W]here a substantial number of the individuals in the
population served by the project or program are of limited
English-speaking ability[, they should] . . . utilize . . .
outreach workers fluent in the language spoken," and "identify
an individual who is fluent both in that language and English"
to provide guidance to individuals of limited English-speaking
ability. Id.
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program." Dubón-Otero, No. 97-091, slip op. at 10.12 Therefore, the
Institute would naturally intend its monies to assist Health Services
in providing AIDS care, much as Medicare monies assist hospitals in
providing patient care.
It makes no difference that Health Services received this
money indirectly. It is now well established that benefits under
§ 666 are not limited solely to primary target recipients or
beneficiaries. See Fischer, 168 F.3d at 1278 ("[T]he plain language of
§ 666(b) does not distinguish between an organization . . . that
receives 'benefits' directly under a federal program and an
organization . . . that receives 'benefits' as an assignee under a
federal program."); cf. Fischer, 529 U.S. at 677-78 ("Medicare operates
12The contract with the Municipality provides in pertinent
part that:
The Municipality must hire the services of a company
with personnel that has the experience and
professional knowledge necessary to design, establish,
direct and manage the AIDS program of San Juan . . .
. [Health Services] will utilize the equipment located
at the facilities provided by the Municipality . . .
. Epidemiological services will be provided in order
to establish a state of alertness of the disease as
well as counseling and treatment to the patients. The
epidemiological activities shall be coordinated with
the respective state and federal authorities. . . .
[Health Services] will establish an educational
program for the community in order to create public
conscience especially to high risk groups. . . . The
population at large will be educated regarding
prevention of AIDS and the different methods of
transmission.
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with a purpose and design above and beyond point-of-sale patient
care."). Health Services' contract with the Municipality contemplated
a relationship between Health Services and the United States
Government, and those operating federal assistance programs like the
Institute are well aware that recipients of program funds use subgrants
and subcontracts to further effectuate the program's goals. Lawrence
Poole, a grants manager for the United States Department of
Health and Human Services,13 testified that "a grant award [that]
is issued by an agency could and does in fact translate into
subcontracts or subgrantee relationships with other
organizations." Poole further testified that Health Services
received federal funding as a subgrantee for the years of 1988
and 1989, and that "the requirements for each subgrantee or
subcontract relationship are subject to the same requirements
for accountability of federal funds and terms of the award as
the actual grantee recipient of federal funds." We conclude that
if the payments in Fischer were "made not simply to reimburse," 529
U.S. at 679, then neither were the payments here.
13The Department of Health and Human Services encompasses
the National Institute on Drug Abuse. Mr. Poole described his
duties as administering individual discretionary grant programs
geared primarily toward provision of health care in United
States territories. He had been with Health and Human Services
approximately thirty years and was very familiar with their
federal grant programs.
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III.
Dubón and Garib argue that the district court erred in
denying their motions for acquittal for insufficient evidence.
Pointing to the fact that the indictment charged them with conspiring
to steal from Health Services, they assert the Government did not prove
the crucial element of lack of consent of the corporation. They cite
United States v. Burbank for the proposition that there can be no theft
where "[n]o evidence [is] presented by the government to show that the
transactions were not authorized by the corporation." 848 F.2d 453,
454 (4th Cir. 1988).14 They contend Health Services' shareholders and
board of directors consented to the transactions at issue and therefore
there was no theft.
In reviewing a challenge to the sufficiency of the evidence,
"[t]he verdict of a jury must be sustained if there is substantial
evidence, taking the view most favorable to the Government, to support
it." Glasser v. United States, 315 U.S. 60, 80 (1942); see United
14Because we ultimately conclude that there was sufficient
evidence for the jury to find a lack of valid authorization,
Appellants' Burbank argument need not detain us. We have
serious concerns about some of the broad language in Burbank,
but it suffices to say that while it is one thing to decide that
the consent of sole or co-owners can preclude conviction for
interstate transport of stolen money (as was the case in Burbank
under 18 U.S.C. § 2314 (2000)), it would be quite another to
extend that holding to this case involving a conspiracy to
embezzle or steal funds from an organization receiving funds
from the federal government, especially given the attendant
complexities of 18 U.S.C. § 666.
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States v. Mena-Robles, 4 F.3d 1026, 1031 (1st Cir. 1993) (stating that
the issue in a sufficiency challenge is "whether the evidence and
reasonable inferences therefrom, taken as a whole and in the light most
favorable to the prosecution, would allow a rational jury to determine
beyond a reasonable doubt that the defendants were guilty as charged").
The Government presented evidence that between 1987 and May
1991 Dubón received $10,000 per month from Health Services as a legal
retainer, although Health Services' board of directors had authorized
a retainer of only $5,000. Someone had tampered with the original
board minutes to show authorization for a monthly retainer of $10,000,
allowing Dubón to funnel the additional $5,000 per month to Kourí.
Specifically, the director of the word processing center where the
minutes were transcribed testified that the original page of the
minutes setting forth the retainer as $5,000 was replaced in another
set of minutes with a page showing the retainer as $10,000. The page
showing the retainer as $10,000 was a different consistency than the
rest of the minutes and was not produced at the same word processing
center. Corcino testified the additional $5,000 was going to Kourí to
pay Kourí's home rent and credit card bills. Corcino further testified
that Kourí could not be on Health Services' payroll because Kourí was
under contract with the Harvard Institute for International
Development, which in turn had a contract directly with the
Municipality of San Juan.
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The Government also presented evidence that Garib employed
a personal housekeeper, as well as a secretary for his private
practice, using Health Services' money. Corcino, Health Services'
comptroller, testified that for a long time he was not aware that
Health Services was paying for a private secretary and personal
housekeeper for Garib, and that in his opinion such payments
constituted an unauthorized diversion of Health Services funds for
personal use. The housekeeper testified that the signature on the
timesheets bearing her name was not hers. The secretary testified that
while she was paid by Health Services, ninety-nine percent of her time
was spent on tasks related to Garib's private practice.
Finally, there was evidence at trial that Appellants also
used Health Services assets to purchase political support, which Health
Services was dependent upon for its funding. Before the San Juan
mayoral election of 1988, Garib allegedly loaned a $19,000 video camera
to one of the candidates, Jose Granados-Navedo. The camera had been
purchased with a Health Services check. Garib and Kourí later met with
Granados to discuss Health Services providing other financial support
for his campaign.
To generate more cash, Garib, Sotomayor, and Corcino then met
with Antonio Fernandez, the owner of IMA Productions, and presented him
a Health Services check made out to IMA in the amount of $60,000 and
signed by Garib and Sotomayor. Only some of this money was intended to
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pay for services performed by IMA. Garib asked Fernandez to endorse
the check and cash it--or else write separate IMA checks payable to
other persons who had not rendered services--so Garib could recover the
excess in cash. Garib explained Health Services had an urgent need of
cash to make certain payments that it could not make by company check.
When Fernandez refused to participate, Garib stated that he had solved
the problem in another way. Garib later met with Granados and gave him
a box containing more than $100,000 in cash.
Granados lost the election. After the new administration
assumed office, payments on the AIDS contract were delayed. Kourí
later told Corcino that he had taken care of the problem by arranging
for $5,000 a month to be paid to the candidate who had won the
election, Mayor Hector Luis Acevedo, and $5,000 to the Director of the
Health Department of the Municipality, Dr. Freddie Borras. Regular
payments by the Municipality on the AIDS contract then resumed. The
$10,000 monthly payments were raised by cashing Health Services checks
issued to persons who had performed no services. Several of these
checks were signed by Garib and Dubón. Dubón's law firm was also
involved in cashing a series of these Health Services checks at Dubón's
direction, with at least one of the checks being issued to Dubón's son,
who had performed no services. Toward the end of 1990 Dubón told
Corcino, "I am not going to sign for that [expletive] any longer." He
did not, however, object to the continued diversion of the funds.
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Viewing this evidence in the light most favorable to the
Government, as we must, we conclude that a rational jury could find
beyond a reasonable doubt that Dubón and Garib were participants in a
conspiracy to use Health Services funds to pay personal expenses and
make political payoffs as charged in the indictment. The evidence of
informal alterations of the board minutes as a means to funnel funds to
Kourí, of the apparent use of a forged signature to divert Health
Services' funds to pay for Garib's personal housekeeper, of the use of
a Health Services' employee to do work almost exclusively for Garib's
private practice, and of the clandestine efforts to turn Health
Services checks into cash are all evidence from which a jury could find
that defendants "without valid authority" embezzled, stole, or obtained
by fraud money or property.
IV.
Dubón and Garib challenge a number of the district court's
decisions regarding jury instructions. We address each in turn,
recognizing that when alleged errors involve particular instructions'
adequacy in explaining the law, as they do here, "[w]e must look at the
entire charge, in light of the evidence, and determine whether, taken
as whole, the court's instructions fairly and adequately submitted the
issues in the case to the jury." United States v. Woodward, 149 F.3d
46, 69 (1st Cir. 1998).
A.
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The district court denied defendants' requested jury
instructions, including instructions which required the Government to
prove that the actions of defendants were designed to "cheat Health
Services," that Health Services was the "victim," and that
authorization by Health Services was thus a defense.15 Instead, the
district court instructed the jury that it was sufficient to find that
the funds at issue were "something of value in excess of $5,000 in
connection with federal funding" and "under the care, custody or
control" of Health Services.
We conclude the district court did not err in its
instructions to the jury. The district court instructed that theft
involved taking property without authority and that embezzlement
15One of the requested instructions said that "to act with
intent to defraud means to act knowingly with the intent or the
purpose to obtain, deceive, or cheat [Health Services] out of
money or property." There was also a request to instruct the
jury that
The government must prove beyond a reasonable doubt
that [Health Services] did not authorize the
expenditure. One of the ways by which a corporation
can authorize a payment is by the board of directors.
If the board of directors of Advanced Community Health
Services authorized an expenditure, then this
expenditure was not theft or embezzlement.
Other instructions were requested, but since they all embody
variations of the same theme as the ones above, we need not set
them all out.
-23-
involved taking property under one's control belonging to another.16
Its further instructions that there was a crime if the money or
property stolen "was owned by or was under the care, custody, or
control of [Health Services]," was proper in light of our discussion
above in Part I. The instructions taken as a whole fairly and
adequately informed the jury of the applicable law.
B.
Dubón and Garib argue the district court erred by refusing
to instruct the jury on the requested definition of federal benefits.
We have already set out the applicable law as to what constitutes
federal benefits under § 666 in Part II above.
Dubón and Garib requested the following instructions: (1) Not
every payment by the federal government to an organization constitutes
16 The district court instructed:
Embezzlement is the fraudulent appropriation of
property with [sic] one properly entrusted with its
possession.
It is to willfully convert to one's own use,
without authority, another's money and property, of
which the wrongdoer acquired possession validly, of
[sic] some office, employment or position of trust.
Theft, also known as larceny, is the act of
stealing or taking of property without the owner's
consent. It is the fraudulent taking of personal
property for [sic] money belonging to another from his
possession or from the possession of some person
holding the same for him without his consent, with an
intent to deprive the owner of the value of the same
and to appropriate it to the use or benefit of the
person taking it.
-24-
federal "benefits" as required by the statute; (2) Federal money paid
to a private corporation as payment of fees for services already
rendered by the corporation does not qualify as federal benefits; (3)
Payments made by the federal government to a private corporation as
part of an ordinary commercial transaction do not qualify as federal
benefits; (4) Money paid to a corporation is a federal benefit if the
corporation was required to "administer" the money under an agreement
with the government or to "disburse" the money to others. The district
court, meanwhile, tracked the statutory language in instructing the
jury.17 Cf. United States v. Paradies, 98 F.3d 1266, 1289 (11th Cir.
1996) (concluding there was no plain error in district court's failure
to instruct on an element of § 666, where the instructions "tracked the
statutory requirements" and the evidence at trial was sufficient for a
jury to find the element in question satisfied).18
17The district court instructed the jury that in order for
them to return a guilty verdict, Health Services must have
received
in any one-year period benefits in excess of $10,000
under a federal program involving a grant, a contract,
a subsidy, a loan, a guarantee, insurance or other
form of federal assistance. This section [666] does
not apply to bona fide salary, wages, fees, or other
compensation paid, or expenses paid or reimbursed in
the usual course of business.
The district court reiterated this element of § 666 later.
18Dubón and Garib cite Marmolejo, 89 F.3d at 1189, for the
proposition that "[t]he plain language of § 666 is ambiguous in
defining 'Federal Program' and 'Federal Assistance,'" and
-25-
We conclude the first three of the requested instructions
were adequately covered by the district court when it instructed the
jury that "legitimate, valid, bona fide salary, wages, fees, or
other compensation paid or expenses paid or reimbursed in the
ordinary course of business" did not constitute benefits. As to
the fourth requested instruction, Dubón and Garib direct us to no
authority supporting such a definition of federal benefits under § 666,
nor do we believe that such is a complete statement of the law in this
respect.19 We cannot conclude that there is error in refusing an
offered instruction where we are left to speculate as to an appellant's
legal underpinning for the proposed instruction. One may argue that
United States v. Rooney, 986 F.2d 31 (2d Cir. 1993), provides some
support. In that case the Second Circuit stated that "[i]n each of the
therefore more was required than mere recitation of the
statutory language. However, there can be little doubt that the
National Institute on Drug Abuse (which we have concluded is the
source of the federal benefits at issue here) is a federal
assistance program. Thus, even if we were to find error in the
district court's failure to define "federal program" and
"federal assistance" in its instructions, such error would be
harmless. See Bastien v. Goddard, 279 F.3d 10, 16 (1st Cir.
2002) (instructional error "entitles appellant to a new trial on
his claim only if it had a prejudicial effect").
19 Garib acknowledges the requested instructions were
written "so that the jury could differentiate between the
payments Health Services received in 1989 (which were not
'benefits'), and the federal grants it received after February
1991 (which were 'benefits')." Since we have already concluded
that Health Services did receive benefits in 1989, the requested
instructions buckle under their own weight.
-26-
cases [enumerated by the Senate Report to illustrate situations § 666
is intended to include], the organization . . . provided the Federal
government with a service by administering a government program." Id.
at 35 But that discussion of legislative history was dictum, since the
court there had already concluded that benefits were present on the
basis of § 666's statutory language. Id. at 34. More importantly, a
court's refusal to instruct in the language of an appellate opinion
does not justify reversal. See Kent v. Smith, 404 F.2d 241, 244 (2d
Cir. 1968) ("[I]t is generally not helpful to take quotations from the
opinions of appellate courts, that were never intended to be used as
instructions to juries, and submit these in the form of requests to
charge.").
We are aware that the Supreme Court in Fischer stated that
"[t]o determine whether an organization participating in a federal
assistance program receives 'benefits,' an examination must be
undertaken of the program's structure, operation, and purpose." 529
U.S. at 681. The record before us demonstrates that evidence was
before the jury relevant to these issues, and the district court, in
ruling on the motion for acquittal, expressly analyzed these issues.20
20 The district court stated:
Defendants' requests are premised upon their enduring
contention that federal money paid to a private
corporation which performs a service for the
government can not constitute federal benefits.
We have disagreed, and continue to disagree,
-27-
The district court did not err in instructing the jury in this respect.
C.
Dubón and Garib argue that the district court erred by
refusing to instruct the jury that it could only return a verdict of
guilty on the basis of conduct occurring after Health Services first
received federal benefits. The requested instruction stated:
An expenditure that occurred before [Health Services] ever
received any federal benefits is not a violation of 18
U.S.C. section 666. The government must prove that the
defendant agreed to an unauthorized expenditure or
expenditures that occurred after [Health Services] received
federal benefits. Therefore, if the defendant agreed only
to an expenditure or expenditures occurring before Health
Services received any federal benefits, you must find the
defendant not guilty of count 1.
with such a contention. To summarize, we find that
[Health Services] was not in a purely commercial
relationship with the federal government. First, the
contract between the Municipality of San Juan and
[Health Services] provided that [Health Services] was
to be the exclusive source of AIDS counseling and
professional services in San Juan and that the
Municipality maintained administrative and supervisory
roles over [Health Services]. This fact alone clearly
indicates more than a commercial relationship.
Moreover, we find that the contractual relationship
itself is a form of a federal assistance, supplying
AIDS services under a federally financed program. See
United States v. Copeland, 143 F.3d 1439, 1441 (11th
Cir. 1998) ("[O]rganizations engaged in contractual
relationships with the federal government would fall
within the scope of [section 666], if those
'contractual relationships constitut[ed] some form of
Federal assistance.'") (internal citations omitted).
We instructed the jury accordingly.
Dubón-Otero, No. 97-091, slip op. at 10-11.
-28-
The district court denied this request.
The relevant statutory language states: "[T]he circumstance
[that must exist for there to be a federal crime] is that the
organization . . . receives, in any one year period, benefits in excess
of $10,000 under a Federal program involving a grant, contract,
subsidy, loan, guarantee, insurance, or other form of Federal
assistance." § 666(b). The statute further defines one-year period as
"a continuous period that commences no earlier than twelve months
before the commission of the offense or that ends no later than twelve
months after the commission of the offense. Such period may include
time both before and after the commission of the offense." §
666(b)(5).
Garib now argues the instruction given by the district court
allowed the jury to return a guilty verdict on the basis of conduct
occurring before Health Services received any federal money at all,
much less federal benefits.21 For instance, the jury could have found
Garib guilty on the basis of conduct occurring only in 1988 (before
Health Services received any federal monies), added twelve months to
get into 1989 (when Health Services received over $10,000 in federal
funds), and thus satisfied the instruction. Garib argues federally
21Because Dubón's conduct all involved 1989, and because we
have already concluded that there was indeed sufficient evidence
for the jury to find that Health Services had received federal
benefits in 1989, we only need to consider this argument as it
pertains to Garib.
-29-
criminalizing his 1988 conduct in that way would exceed the
government's authority under the Spending Clause of the United States
Constitution, U.S. Const. art. I, § 8, cl. 1. See Fischer, 529 U.S.
at 689 (Thomas, J., dissenting) ("We have held that the spending power
requires, at least, that the exercise of federal power be related 'to
the federal interest in particular national projects or programs.'")
(quoting South Dakota v. Dole, 483 U.S. 203, 207 (1987)); United States
v. Zwick, 199 F.3d 672, 687 (3d Cir. 1999) ("Applying § 666 to offense
conduct, absent evidence of any federal interest, would appear to be an
unconstitutional exercise of power under the Spending Clause.").
In support of his contention that the jury could have found
him guilty based solely on 1988 conduct, Garib points to the
Government's argument to the jury in summation:
And you will recall that Mr. Poole testified that on January
10 of 1989, federal funds were received through that grant.
And you will recall that that grant was in excess of
$10,000. And why is that date important? Because, as the
judge will instruct you on what the law is for federal
program fraud, the government has to prove that $10,000 were
received in any one calender [sic] year period either before
or after the commission of the offense. And if you take the
date of January 10th of 1989 and go back one year, it takes
you to January 10th of 1988, close to the date on which
[Health Services] was created.
Garib and Dubón requested a special verdict that would have required
the jury to identify what conduct it was basing its verdict on, but the
Government objected, and the district court did not submit a special
verdict form.
-30-
The Government responds that the indictment charged a
conspiracy beginning in 1989 and that the jury was instructed
accordingly. It argues the 1988 conduct was only presented to show the
existence of a conspiracy. It further argues that even if 1988 conduct
was a basis for the jury's verdict, there in fact was federal interest
in the form of pending contracts. Finally, the Government argues any
error was harmless because the jury found that a conspiracy existed,
that Dubón's conduct occurred in 1989, and that Garib, as a co-
conspirator, was responsible for that conduct.
We conclude there was no error. To begin with, the
instruction requested by Dubón and Garib was not a correct statement of
the law, because what the Government had to prove was that the
defendants agreed to join a conspiracy to steal from Health Services
and that an overt act in furtherance of that conspiracy occurred after
§ 666 became applicable. The requested language was simply too narrow.
Most importantly, however, the district court's instructions as to the
scope of the indictment properly limited the jury:
So let's now talk about conspiracy. For you to find a
defendant guilty of conspiracy, you must be convinced that
the government has proved each of the following elements
beyond a reasonable doubt.
First, that between in or about January of 1989
up to and including February of 1994, the agreement
specified in the indictment and not some other agreement or
agreements existed between at least two of the defendants
charged in the indictment; and second, that the defendants
Luis Dubon and Jorge Garib each willfully joined in that
agreement; and third that at least one of the conspirators
committed at least one overt act in the an [sic] effort to
-31-
further the purpose of the conspiracy.
(Emphasis added.)
As for the Government's argument to the jury in summation,
it was not the subject of a timely objection and we will not say it was
plain error to permit it.22 See Chute v. Sears Roebuck and Co., 143
F.3d 629, 630 (1st Cir. 1998) ("[T]he court of appeals will consider a
forfeited objection only if an error was committed, if the error was
'plain' (i.e. clear under current law), if the error was prejudicial,
and if review is needed to prevent a miscarriage of justice.") (citing
United States v. Olano, 507 U.S. 725, 733-37 (1993)).
V.
Garib challenges his perjury conviction. See 18 U.S.C. §
1623 (imposing punishment on anyone who, under oath in any proceeding
before any grand jury, knowingly makes any false material declaration).
Garib's perjury charge stems from testimony he gave before the grand
jury. As part of that testimony he denied giving political
22Garib also points to the district court's reimbursement order
following the conviction as evidence of the district court's alleged
confusion on this issue. In that order, the district court required
Garib to repay the federal government for losses it incurred as a
result of Garib's conduct in 1988. Even if we were to agree that the
reimbursement order suggests a misunderstanding of the law on the part
of the judge, it does not invalidate the judge's instructions. The
judge need not be correct in his reasoning, so long as he was correct
in his decision being challenged on appeal. See Helvering v. Gowran,
302 U.S. 238, 245 (1937) ("In the review of judicial proceedings the
rule is settled that if the decision below is correct, it must be
affirmed, although the lower court relied upon a wrong ground or gave
a wrong reason.").
-32-
contributions, or loaning a video camera, to Granados. He also denied
asking Fernandez to sign a $60,000 check so Garib could generate cash.
Garib now argues he was denied a fair trial on his perjury charge for
two reasons. First, he argues that by improperly instructing the jury
as to § 666's "one-year-period" and Health Services' authorization
defense, the court effectively directed a verdict as to materiality.
Because we have concluded above that the district court's instructions
on these matters were not improper, Garib's argument on this first
point must fail. Second, Garib argues the district court's
instructions as to perjury removed the Government's burden of proving
the falsity of the statements at issue. The district court instructed
the jury that:
In order to sustain its burden of proof for the purpose of
making a false declaration before the federal grand jury as
charged in Count Thirty-five of the indictment, the
government must prove the following four essential elements
beyond a reasonable doubt. One, that the defendant Jorge
Garib gave testimony under oath before a federal grand jury;
number two, that the defendant Jorge Garib made the false
material statement as detailed in the indictment during that
testimony; three, the defendant Jorge Garib knew that the
statements were false when he gave the testimony; and four,
that the statement or representation was material, meaning
that it had a natural tendency to influence or was capable
of influencing a decision or an action, whether or not it
actually influenced or deceived anyone. I also instruct you
that truth is a defense to perjury.
(Emphasis added.) We see no error in the district court's instructions
because they adequately covered the Government's burden of proof. See
United States v. Watson, 623 F.2d 1198, 1204 (7th Cir. 1980) (upholding
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similar instruction).23
VI.
Finally, Dubón and Garib challenge the makeup of their jury
and the appointment of the interim United States Attorney.
A.
Dubón and Garib argue that their right, as criminal
defendants, to a petit jury selected from a fair cross-section of the
community, see Taylor v. Louisiana, 419 U.S. 522, 528 (1975) ("the
selection of a petit jury from a representative cross section of the
community is an essential component of the Sixth Amendment right to a
jury trial") (citing also 28 U.S.C. § 1861), is denied in Puerto Rico
by the exclusion of potential jurors who are not proficient in English-
-an exclusion which they allege systematically excludes the poor. We
previously held a similar challenge to be unavailing in United States
v. Benmuhar, 658 F.2d 14 (1st Cir. 1981). Dubón and Garib seek to
distinguish Benmuhar as having been decided in part upon the absence of
any viable alternative, while here they suggested simultaneous
translation. However, we stated in United States v. Flores-Rivera,
23Garib raises three other arguments, which we conclude are
without merit. As phrased in his brief, they are: "The District
Court's Flawed Instructions On § 666 Propelled The Prosecutor To
Argue That Dr. Garib Had A Motive To Lie To The Grand Jury";
"The District Court's Endorsement Of The Flawed Theory Of
Prosecution Invited The Prosecutor To Assail Dr. Garib's
Character And Prejudice His Right To A Fair Trial"; "The
Cumulative Effect Of The District Court's Errors Deprived Dr.
Garib Of A Fair Trial."
-34-
that it is "the overwhelming national interest served by the use of
English in a United States court," which "justifies conducting
proceedings in the District of Puerto Rico in English and requiring
jurors to be proficient in that language." 56 F.3d 319, 326 (1st Cir.
1995) (quoting United States v. Aponte-Suarez, 905 F.2d 483, 492 (1st
Cir. 1990)). This justification is independent of the presence or lack
of any viable alternatives. Accordingly, we reject Appellants'
contention.
B.
Dubón and Garib challenge the appointment of interim United
States Attorney Guillermo Gil as statutorily and constitutionally
defective. As Appellants themselves recognize, this issue has been
definitively resolved in the Government's favor. United States v.
Hilario, 218 F.3d 19, 22 (1st Cir. 2000).
VII.
Accordingly, we affirm.
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