USCA1 Opinion

UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT
____________________

No. 94-2277

UNITED STATES OF AMERICA,

Appellee,

v.

FRANKLIN DELANO LOPEZ,

Defendant, Appellant.

____________________

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF PUERTO RICO

[Hon. Jose Antonio Fuste, U.S. District Judge]

___________________

____________________

Before

Selya and Boudin, Circuit Judges,

______________

and Lisi,* District Judge.

______________

____________________

Nathan Z. Dershowitz with

_____________________

whom Amy Adelson, Alan M. Dershow

____________ ________________

and Dershowitz & Eiger, P.C. were on briefs for defendant.

__________________ ____
William C.
Brown,
___________________
Department

of

Justice,

Appellate
with

whom

Section,

Criminal

Guillermo Gil,
______________

Attorney, was on brief for the United States.

Divisi

United

Sta

____________________
December 14, 1995
____________________

____________________

*Of the District of Rhode Island, sitting by designation.

BOUDIN,

Circuit Judge.
______________

Franklin

Delano

Lopez

was

convicted

on seven

criminal offenses

counsel

counts

charging him

under federal law.

with white

In this

collar

appeal, able

on both sides have briefed a host of issues, several

of which pose difficult and important questions.

by affirming on two counts and vacating

case is remanded

We conclude

on five others.

The

for resentencing on the two affirmed counts

and for retrial on

the five vacated counts, if sought by the

government.

I.

Lopez was tried under a

on February 18, 1994.

making false

U.S.C.

BACKGROUND

superseding indictment returned

Counts 1

through 5 charged him

representations to federally

1014,

to

influence

loans

to

with

insured banks, 18

Lopez

and

his

businesses,

Television,

Four

Inc.

fraud, 18 U.S.C.

$300,000

from

Winds

Counts 6

Rental,

and 7

Inc.,

and

Multi-Media

charged Lopez

with wire

1343, based on Lopez' withdrawal

the

reserve

accounts

of

certain

of over

limited

partnerships managed by Lopez through Four Winds Rental, Inc.

The jury trial began on June 6, 1994.

The government's evidence on the first five counts aimed

to show that Lopez

documents to obtain

occasions.

First Federal

Three

made false statements or submitted

loans, or extensions

involved substantial

Savings Bank;

of loans, on

five

sums borrowed

from

another, a loan

-2-2-

false

extension from

Chase Manhattan; and the last, a loan from Banco Central.

each instance the alleged misinformation concerned

or

In

the value

existence of collateral to secure the loan, and the facts

differed in each instance.

No description of the

events is

necessary to our disposition of these false statement counts.

The two wire fraud charges, reflected in counts 6 and 7,

related to

a different matter, namely,

Lopez' withdrawal of

over

$300,000

partnerships

housing

from

that

reserve

owned

accounts

multi-unit,

projects in Puerto Rico.

very small

balance being

ownership

interest in

Capital Management Strategies,

The

certain

federally

limited

subsidized

Four Winds managed and had

held by other limited

real estate syndicator.

of

each partnership,

the

partners represented by

Inc., a Rockville,

Maryland,

properties were financed by the

Farmers' Home Administration, which restricted the use of the

funds in the accounts to specific purposes, primarily repairs

and improvements.

The

gist of

the government's

Lopez had withdrawn the sums in

without

the

invoices

on

required

of

in 1988

question from these accounts

permission

the letterhead

charge was that

and

had

created

false

construction company

to

account for the withdrawals.

that Lopez had

withdrawals,

The government offered evidence

created the invoices in

that no

performed, and that

amounts matching the

such construction

the invoices were

work had

ever been

nevertheless supplied

-3-3-

to auditors to

explain the

withdrawals.

The wire

element

related

to two

faxes, allegedly

sent

by Lopez

to Capital

Management Strategies in late 1990 and early 1991, responding

to its

inquiry as to the purpose

existence

of

the

required

of the withdrawals and the

approvals

by

Farmers'

Home

Administration.

About two weeks into

22,

the trial, on the evening

of June

1994, Lopez was rushed to a hospital emergency room with

serious

testimony

symptoms.

from the

Within

emergency

day,

the

trial

room internist

judge

and,

shortly

thereafter, heard from a court-appointed cardiologist.

tests revealed that Lopez was

or

took

Later

suffering a small brain lesion

tumor which was serious but, if properly treated, was not

likely to be life

threatening.

The doctors agreed

that the

tumor had to

be removed but

not on an emergency

basis, and

surgery was scheduled for August.

These events caused a

until July 6, at

recess of the trial from

which time a

hearing was held to

June 22

consider

motions by Lopez' counsel for a mistrial based on the lack of

competency or

The

thrust

for a

of

prescribed for

continuance for purposes

Lopez'

was

him caused side effects

his ability to proceed.

court-designated

objections

that

-4-4-

medications

that interfered with

Relying partly on the

neurologist, Dr.

of treatment.

advice of the

Charles Payne,

the court

denied the motions,

and Dr. Payne

was ultimately placed

in

charge of prescribing medications.

The

same

objections

times

but denied.

Payne

and

There were

testimony by

understand the

were thereafter

him

several

further examinations

that

charges and assist

being compromised

renewed

Lopez was

alert,

his lawyers, and

by the prescribed medications.

by Dr.

could

was not

From July

11

July

through July 13, Lopez testified in

18,

the

jury convicted

Thereafter, the

on

all

district court rejected

directed to competency.

investigation

Lopez

his own defense.

seven counts.

a post-trial motion

It had earlier refused to

into alleged

On

order an

prosecutorial misconduct

in the

initiating of the prosection.

Following

underwent

the

trial,

Lopez

remained

on

surgery for the removal of the tumor.

bail

and

On November

17, 1994, Lopez

was sentenced to a prison term of 63 months,

based primarily

on loss calculations that

Lopez on

appeal.

Motions

appeal were denied by

See
___

18 U.S.C.

his sentence.

are challenged by

for continuation of

the district court and by

3143(b)(1)(B).

Lopez

bail pending

this court.

is currently serving

II.

MEDICAL ISSUES

On this appeal, Lopez' first and

most dramatic claim is

that he was forced to continue his trial while afflicted with

a life-threatening

brain tumor

-5-5-

and while requiring

a whole

battery of medications to cope with

medications,

remember,

Lopez suggests, interfered

concentrate

and

present

undermined his trial testimony.

trial

judge

effectively

attempting to

These

with his ability to

himself

credibly,

and

He further asserts that

the

compelled

medications and, without basis,

or

various symptoms.

him

to

accept

such

charged him with malingering

over-medicate

in order

to frustrate

the

factual allegations,

the

trial.

Although these

are

legal claim presented has

_____

claim

that he

ordinary

the core

an unusual twist.

was "incompetent"

to

Lopez

stand trial

does not

under the

rubric, see Godinez v. Moran, 113 S. Ct. 2680, 2685

___ _______
_____

(1993), or that his health

would be so damaged by

the trial

that

it would

primarily on

says

that

intrusive

Lopez

be inhumane

to continue.

Riggins v. Nevada,
_______
______

the trial

court

could

have

504 U.S. 127

"instead

alternative--a halt

in

of

choosing

Lopez'

relying

(1992), Lopez

the proceedings

surgery--violated

rights by imposing a `regime' of

Lopez'

Instead,

less

so

that

constitutional

medication that so impaired

abilities that he was unable to testify coherently on

his own behalf."

Riggins, which
_______

the government says was

in the district court, contains language

to this

case, but involved a

Riggins was tried

not relied upon

colorably pertinent

fundamentally different issue.

for murder and,

as eight Justices

viewed

-6-6-

the

facts,

taking a

the trial

powerful

thioridazine.

court

required

antipsychotic drug

Riggins to

continue

generically known

as

Riggins' claim to the Supreme Court, after his

conviction and death sentence, was that he had been compelled

unconstitutionally to take this

concealed his

true mental state

medication and that the drug

from the jury

and impaired

his ability to present his insanity defense.

The Supreme

interest

under

Amendment

in

Court held

the Due

said

that

(e.g., to
____

Process

"avoiding

antipsychotic drugs

For

possibility"

or

involuntary

medication could

protect the

findings.

Clause

. . . ." Id. at 134.

___

forced

from danger), the

that Riggins had

this

conviction.

given

probability"

defense had been impaired, id. at 137-38,

___

of

Although the Court

sometimes

and

Fourteenth

administration

in Riggins had
_______

reason,

"substantial

to require a showing

of the

defendant's health or

trial judge

a substantial

be justified

protect others

made no

the

that

such

"strong

Riggins'

the Court declined

of actual prejudice and overturned

the

The

concern in

present in this

court's

doctor

nothing

did

case.

threat to

could

Riggins with
_______

Although Lopez points

revoke bail

supervise

his

to do with forcing

not want.

The

forced medication

and imprison

medication,

on Lopez any

trial court

-7-7-

is not

to the

him so

trial

that a

the incident

had

medication that he

thought that

some of

the

symptoms of which

had been induced

of doctors

showed

complaining (e.g.,
____

grogginess)

by over-medication; at the outset

were prescribing different

that

problems.

Lopez was

over-medication

The record shows

might

drugs, and

be the

cause

a number

testimony

of

such

that Lopez himself wanted proper

medicationandwascontent tohaveDr.Payneprescribe andsupervise.

This does

claim.

in

the

that Lopez

That claim, made below and

course

medications,

Lopez'

not mean

of

the

Riggins
_______

necessary even

is without a

potential

adequately presented here

argument,

if voluntarily

ability to present his defense.

is

that

the

taken, impaired

Even assuming Lopez'

"competency,"

that

Godinez,
_______

S.

113

permitted a request

the district

being a

Ct.

at

fairly

2685,

the

test to

threat

for a continuance.

court had a reasonable

have been adopted,

easy

satisfy,

of impairment

Here, Lopez argues,

alternative that should

namely, to postpone

the trial until

the

operation had occurred and removed or diminished the need for

drugs.

defendant,

especially

one proposing

to

testify at

trial about complex financial transactions, is entitled to be

concerned about his fitness.

was

taking

number

producing

side effects

The drugs

were designed

of

For good medical reasons, Lopez

medications,

that could

some

capable

impair clarity

to prevent seizures,

of

of mind.

control blood

pressure,

relieve pain,

induce sleep, reduce

agitation and

-8-8-

prevent

Dilantin,

depression;

Vasotec,

and

they

included

Valium, Esgic

Plus

Darvocet,

and

ProSom,

Sinequan.

various times

Lopez reported

that he had

was unable to

sleep, and was

suffering from memory

At

severe headaches,

lapses.

His lawyers protested that

Lopez had problems

communicating

with them.

Lopez'

trial

health obviously

judge.

deferred trial

Far from

for

experts one after

warranted

an

inquiry by

ignoring the issue,

the

the trial court

a substantial

period, summoned

medical

another, took an

active role in

securing

diagnoses for Lopez, had him re-examined repeatedly, and took

testimony

detailed

and

made

findings

post-trial order

and reasons for

in

abundance,

summarizing the

proceeding with trial.

including

court's findings

There is

no need to

describe the procedural steps in detail because Lopez himself

does not seriously suggest

that the investigation was flawed

or inadequate.

The substantive issue is

more difficult.

The testimony

of

the various doctors confirms

Lopez took have the

grogginess that

present

potential to cause side effects

Yet the

fairly read,

proper prescription

threats.

of the drugs

could interfere with defendant's

his case.

testimony,

that a number

main

was that

thrust of

the doctors

and careful monitoring

Such a monitoring

regime was in

-9-9-

such as

ability to

the

doctors'

thought that

would meet these

place when Lopez

testified.

The doctors

doubts did

so

prescribing

at the

drugs

who gave testimony raising

outset

for

(while several

Lopez,

apparently

the most

doctors

were

without

much

coordination).

Lopez' main trial counsel did

protest at times that his

client was not able to cooperate fully; but

of

Lopez'

outweighed,

conduct

during

by

district

well

balanced,

court's findings

and

was

if

that

cooperating

not

Lopez

to

counsel.

In all events, a reputable expert unaffiliated with

prosecution or

oriented

are

appeared

the

be

the

trial

these complaints

defense--Dr. Payne--gave

with

firm testimony

that Lopez

was fit to

examinations

his medicine.

testify.

His testimony

was based on

of Lopez close in time and on the monitoring of

Even

on a cold record, Dr.

Payne's testimony

carries conviction.

As for

because

Lopez' own

of

inconclusive.

testimony

evidentiary

we

his

testimony, which he

medical

It is not

condition,

the

the most organized

have

ever read;

but

rulings

that

limited

information that he

claims suffered

Lopez

him

and his counsel thought

trial

judge thought

irrelevant (e.g.,
____

banks

had sustained actual losses).

evidence

is

and responsive

was confined

in

by

presenting

helpful but the

such as

whether the

Much of the disarray in

his testimony appears to be caused by such

struggles between

Lopez and the court.

-10-10-

We

have no doubt that Lopez in addition was under great

stress.

surely

This

it

instances

is true

was augmented

for

many criminal

here

by

the

defendants,

tumor.

In

but

few

Lopez' initial medication caused some adverse side

effects while it

was being adjusted.

trial had already progressed

On the other hand, the

for several weeks before Lopez'

emergency room visit, and much of the medication was directed

to

medical

pressure,

the

symptoms--difficulty

in

sleeping,

anxiety--that could easily

trial had

been

medical advice itself

delayed and

high

blood

have continued even if

the

tumor removed.

largely supported the

The

course followed

by the district court.

This is

a classic instance in which

had to exercise

long as

its informed

judgment.

sound procedures are followed,

judgment is

reviewed under an abuse

United States v. Zannino, 895

______________
_______

the district court

In

such cases,

so

the court's ultimate

of discretion standard.

F.2d 1, 13

(1st Cir.), cert.

_____

denied,
______

trial

494 U.S. 1082 (1990).

or await

question.

the

Whether to

operation may

But on appeal,

well

proceed with the

have been

hard

we think it easy to conclude

that

the trial judge acted within his discretion in deciding, with

expert medical support

and after

careful investigation,

to

proceed.

We

hostile

reject the

suggestion that

to the defendant.

the district

Most judges are

-11-11-

court was

suspicious of a

mid-trial

request for

record confirms

continuance or

that Lopez'

mistrial, and

initial symptoms may

the

have been

caused in part by over-medication, even if inadvertent or the

product

of too many doctors.

Paragons may exist among trial

judges who can maintain perfect discipline with perfect tact;

but

for most, a certain

sternness in manner

and an abiding

skepticism about delay are a necessary part of the arsenal.

III.

Counts 1-5.
__________

The

THE MERITS

first five

counts of

the indictment

charged

Lopez

under

statute that

punishes

anyone

who

"knowingly makes any false statement"

to influence federally

insured financial

U.S.C.

indictment

institutions.

charged, and

materiality

was

the

an element

commonly done in most

18

district court

of the

offense,

the jury.

that

But,

circuits at the time, the

as was

trial judge

and did not submit it

Lopez' conviction, the

United States v. Gaudin, 115 S.

_____________
______

held

assumed,

The defense objected to this procedure.

Following

Court

The

offense.

resolved the materiality issue himself

to the jury.

1014.

that where

it must under

The

Supreme Court decided

Ct. 2310 (1995).

materiality

is

an

the Sixth Amendment

There, the

element

of

an

be submitted to

government's main response to Gaudin

______

is that

materiality

is

Alternatively,

not

the

an

element

government

says

under

that

section

any

1014.

error

was

-12-12-

harmless

because

the

evidence

overwhelmingly

proved

materiality and no rational jury could have found otherwise.

This court

has already held that

section 1014 requires

"that the

false statement concern[] a

States v. Concemi, 957 F.2d 942,

______
_______

material fact. United

______

951 (1st Cir. 1992).

This

view is consistent with that of several other circuits.

United States v.
_____________

Wells, 63
_____

F.3d 745, 750

United States v. Staniforth,

______________
__________

1992).

Although

(8th Cir.

971 F.2d 1355,

the statute

E.g.
____

1995);

1358 (7th Cir.

does not contain

an explicit

materiality requirement and the

Second Circuit has held that

no such

inferred, United States

______________

requirement

Cleary, 565 F.2d

______

is to

43, 46

U.S. 915 (1978), we are

be

(2d Cir. 1977),

cert. denied,
_____ ______

not disposed to regard the

an open one in this circuit.

v.

435

issue as

The government's alternative position is

that occurred in

harmless.

subject

113

sense

same.

failing to submit the issue to the jury was

Most errors, including

to harmless

S. Ct.

constitutional ones,

error analysis, Sullivan

________

2078, 2081

to retry a

that any error

(1993), simply

case if the

v. Louisiana,
_________

because it

result will

are

makes no

assuredly be the

But for various reasons, some errors are deemed fatal

without proof of prejudice.

it was harmless error--no

of guilt--if

No one, for example, would think

matter how conclusive the evidence

the defendant were tried by a jury of five year

olds or in a courtroom dominated by a lynch-mob.

-13-13-

The Supreme Court has

cases, holding

doubt

(for

gone somewhat beyond such extreme

example) that

instruction objected

error. Id. at
___

2082-83.

to at

defective

trial cannot

The precedents make

could not be harmless error for

reasonable

be harmless

clear that

the trial judge to direct

it

verdict on the case as a whole, United States v. Martin Linen

_____________
____________

Supply, Co., 430 U.S.

___________

564, 572-73 (1977); and we

think that

the Court would apply the same analysis to a directed verdict

on a single element of the

570, 581 n.

Court,
_____

offense.

8 (1986); Hoover
______

802 F.2d 168,

Rose v. Clark, 478 U.S.

____
_____

v. Garfield Heights Municipal

___________________________

177-78 (6th Cir.

1986), cert. denied,

_____ ______

480 U.S. 949 (1987).

We

stress that it is

of crucial importance

to us that

Lopez made a timely objection at trial to the judge's refusal

to submit this

issue to the

jury.

This

court has

already

indicated that where there is no timely objection, the "plain

error"

doctrine (see United States v. Olano, 13 S. Ct. 1770,

___ _____________
_____

1777-78 (1993)),

governs

submit an element

to the

in

deciding

jury calls for

whether

failure

reversal.

to

United
______

States v. Romero, 32 F.3d 641, 652 (1st Cir. 1994).

______
______

Gaudin,
______

115 S.

The mix

of considerations is very different

judge

has not

element

may

Ct. at

2322 (Rehnquist,

been alerted

be one

by an

that the

contest.

-14-14-

C.J., concurring).

where the trial

objection.

defendant

See also
________

Indeed, the

has chosen

not to

Even where a timely

own case,

to the

harmless

objection has been made, as

one might ask why the failure to submit an element

jury should

error

automatically be

doctrine

can

in

misinstruction

as to an element, Pope
____

497, 502 (1987), or

But

"structural,"

surrogates for

kindred

be

successfully)

579-80.

in our

cases,

fatal, given

invoked

say,

that the

(not

to

always

remedy

v. Illinois, 481 U.S.

________

a faulty presumption, Rose, 478

____

labels like

Sullivan,
________

"fundamental,"

113

S. Ct.

matters of degree and

at

id. at
___

2083,

U.S. at

577,

tend

and

to be

for multiple concerns.

In all events, our best guess is that the Supreme Court would

regard an

were

omitted element reversible

a timely

error" if

objection--although not

error per se
______

if there

automatically "plain

no objection occurred--and this

conclusion almost

disposes of the government's fallback position.

We say "almost" because

the government could argue that

the jury, although instructed not to, actually did decide the

materiality issue

when it

found that

Lopez

influence the bank loans by false statements.

did intend

to

In theory, the

question of purpose (the defendant's specific intent) differs

from the question of materiality (whether an objective lender

would

be likely to be influenced by the statement).

could exist without materiality, and vice versa.

cases no

independent proof exists of

Purpose

But in most

a defendant's specific

-15-15-

intent; rather, the

jury infers such

purpose from the

fact

that the statement would so influence an ordinary lender.

The government hints

at this argument in

makes no effort to show that in this case the

its brief but

jury must have

so reasoned, a

that the

conclusion that might require

evidence of

materiality was overwhelming

other evidence of purpose was thin or absent.

showing were made, we

satisfy the Supreme

a showing both

If an adequate

would have to decide whether

Court.

There is some

it would

reason to

that it might, see Sullivan, 113 S. Ct. at 2082,

___ ________

be time enough to consider this

and that

think

but it will

question in a case where the

factual predicate is adequately developed.

Counts 6 and 7.
________________

convictions remain to

Lopez'

attacks

be considered.

In

on the

wire

fraud

his opening brief,

Lopez challenged the wire fraud convictions on three grounds:

that the evidence

use of the

did not show a scheme to defraud; that the

wires was not

in furtherance

of such a

scheme;

that

in

any

event

there

responsible for any such

was

no

proof

that

use of the wires.

Lopez

was

We address

the

points in the same order.

First, Lopez says

that the evidence does

there was a scheme to defraud.

did not show

were

linked

not show that

He argues that the government

that the withdrawals from

the reserve accounts

diverted to his personal use or that they were directly

to

the

false

invoices;

-16-16-

and

he

says

that

the

partnerships owed

and

him money in excess

that as a general

funds.

partner he had

These arguments peel

of anything withdrawn

authority to withdraw

apart into distinct factual and

legal issues.

Starting with the facts,

not prove at

the government apparently

trial where the withdrawn

money went.

did

But

it

did show that Lopez'

withdrawals matched false construction-

company invoices

the same

in

prepared

the invoices,

accounts

purporting

to

amounts

together

pay

and that

with false

the invoices.

Lopez

had

checks on

the

Absent

other

evidence, the

jury

was entitled

to

infer that

Lopez

had

employed the false documents

to disguise the withdrawals and

divert them to

This is enough

his own use.

defraud without proof

or how

as to where he

he spent the money. Cf.

___

for a scheme to

concealed the proceeds

United States v. Yefsky, 994

_____________
______

F.2d 885, 892 (1st Cir. 1993).

As for

could

the legal defenses, Lopez

withdraw

funds

for

as manager apparently

proper purposes,

reasonably concluded that the purpose here

is it

pertinent that

The

accounts in

repairs

and

other narrow

question here

uses;

records Lopez created gave the

and,

the

jury

was illicit.

the partnerships may

money.

but

have owed

Nor

Lopez

were restricted

more important,

to

the

impression that the money had

been used for repairs.

The scheme, if successful, would have

-17-17-

enriched

Lopez

without
_______

reducing

the

ventures'

apparent

obligations to Lopez.

Second, Lopez says

that the evidence did

not show that

the wires--the basis

for federal jurisdiction--were

furtherance

scheme.

withdrawn

of

the

in 1988;

and the

about the withdrawals,

The

money,

he

faxes, responding

used in

notes,

was

to inquiries

occurred in late 1990 and early 1991.

Lopez concludes that if any fraud occurred,

long before the faxes were ever

sent.

it was completed

No other use of wires

was alleged.

The case law requires that the

"incident to

an essential

United States 347

______________

stretched

attempts

security,

that

"`to

U.S.

concept

lull

postpone

part of

1, 8

to

the

their

use of the wires must be

the scheme,"

(1954),

but the

include use

of

victims

into

ultimate

the

sense

complaint

Pereira v.
_______

cases

have

wires

of

to

in

false

the

authorities,

and

defendants less

therefore

likely.'"

make

the

apprehension

United States v. Lane,

______________
____

438, 451-52 (1986) (quoting an earlier decision).

to

see why the

jury could not

find that the

of the

474 U.S.

It is hard

faxes in this

case do not fit that description.

Lopez says that the faxes do not explicitly refer to the

withdrawals and that they

could not justify the

in response to

refer to events after 1988

withdrawals.

inquiries that did

___

-18-18-

But the faxes

refer to the

and so

were sent

withdrawals

and it

not

is not a complete

directly

responsive

answer to say that

to

the inquiries.

the faxes were

Rather,

the

responses could be read as attempts to talk around the issue,

to

confuse

detection.

matters,

This

and

ultimately

permissible inference

to

delay

or

avoid

satisfies

the Lane
____

the government failed

to prove

criterion.

Third, Lopez

that he

sent the

says that

December 1990

fax (count

6) or that

the

January 1991 document (count 7) was transmitted by wire.

former was sent from

Rental and an

as a

the accounting firm used by

Four Winds

accountant testified that he faxed

the letter

"courtesy for .

. . Mr.

Lopez" because "either

he or

someone from his office was in--in our office that day."

letter

is

The

not

signed

but the

accompanying

cover

The

sheet,

prepared by the accounting firm, says that the letter is from

Lopez.

Quite

apart from the

cover sheet,

the content

of the

letter reveals that it is a response to the earlier letter of

inquiry to Lopez.

the

The wording of the letter is substantially

same as the subsequent letter of January 14, 1991, which

was signed by Lopez.

also

composed the

It

was a fair inference that Lopez had

earlier

letter and

either directed

the

accountant to

All that

fax it or sent someone in his employ to do so.

is required is that

Lopez caused the

letter to be

faxed and the jury could find that he did.

-19-19-

As

for

the January

1991 letter,

Lopez does

not deny

authorship

The

but questions the

letter was

found

in the

Strategies together with a

Communication"

and "Fax

proof that it

files

had been faxed.

of Capital

page bearing the phrases "Telefax

Cover Sheet"

as well

Winds

logo; and the page

describes Lopez as

bears

the same

the

circumstantial

serves to

382 (2d

that a

date

as

evidence

Management

that

letter.

the

as the

the sender and

This

is

document was

adequate

faxed

distinguish United States v. Srulowitz,

______________
_________

Cir. 1986), where no

letter found in

a file

Four

and

785 F.2d

circumstantial evidence showed

had been mailed

to a

third

the

Gaudin
______

party.

Lopez

contends

decision also

in

his

reply brief

requires reversal of his

that

convictions for wire

fraud.

The government charged that Lopez had used interstate

wires in furtherance

of a scheme to obtain money by means of

false representations,

Lopez says

thereby violating 18

that such false representations

U.S.C.

1343.

must be material

and that it was error not to so instruct the jury and require

it

was

to find materiality.

The government says that this issue

not preserved, but Gaudin

______

is a recent

and not entirely

predictable decision.

On the

difficulty.

merits,

Lopez' argument

confronts

an

In United States v. Faulhaber, 929 F.2d

______________
_________

(1st Cir. 1991), this

initial

16, 18

court found no materiality requirement

-20-20-

in the substantially identical federal mail fraud statute, 18

U.S.C.

1341, stating that the jury was not required to find

that the

scheme would have

defrauded a person

of "ordinary

prudence and comprehension."

Faulhaber's position is at odds

_________

with some circuits and with

both of the standard instruction

treatises. E.g.,
____

(7th

United States v.
_____________

Cir. 1992); 1A

L. Sand, J.

Dunn, 961
____

F.2d 648,

Siffert, W. Loughlin

651

& S.

Reiss, Modern Federal Jury Instructions

________________________________

whether

44.01

Faulhaber warrants re-examination

_________

is a

(1995).

But

subject for

another occasion.

In

our case, the

that a "scheme to

district court did

___

instruct the jury

defraud" required that the "plan

[be one]

reasonably calculated to deceive persons of ordinary prudence

and comprehension by means

of false or fraudulent pretenses,

representations, or promises."

materiality standard.

This

The only

under counts 6 and 7 involved false

so

it hardly

"ordinary

matters that

prudence"

language embodies

deceptive conduct

charged

or fraudulent documents,

the "reasonably

language

the

referred to

calculated" and

the

word "plan"

rather

than the false

materiality

is

statements.

an element

in

wire

In

short, assuming that

fraud, the

effectively submitted to the jury in this case.

IV.

GOVERNMENT MISCONDUCT

-21-21-

issue

was

Before trial, Lopez

misconduct and

at least

filed a motion alleging

seeking to have the

to obtain

government

indictment dismissed, or

additional discovery and

an evidentiary

hearing.

He claimed that he was

a victim of vindictive and

selective

prosecution

the

tainted by a

and

that

conflict of interest

indictment

on the

had

part of a

been

former

Assistant United States

Attorney who had played a minor role

in the investigation of

Lopez and later served for

as Lopez'

defense counsel prior to indictment.

court denied this

motion.

United States v.
_____________

a period

The district

Lopez, 854
_____

F.

Supp. 41 (D.P.R. 1994).

We start with the claim

of improper prosecution.

Lopez

told the

district court that he had

he refused to

use his

reappointment

of a

Further,

he

political influence in

former

claimed that

normally pursued

civilly on

prosecution

selective

evidence

was

on the

U.S. Attorney

defendants

in

favor of

for Puerto

as

well

as

was thin;

the district

vindictive.

the

Rico.

his position

false statement claims,

first point

government offered

been prosecuted because

are

so the

His

on the

second, the

court evidence

that Lopez'

case did fall within its guidelines for criminal prosecutions

because of the amounts involved.

On appeal, Lopez has condensed his argument on the claim

of improper prosecution to

of

footnotes.

a couple of sentences and

a pair

The arguments are used primarily to add color

-22-22-

to his other claim of government

_____

dual role of

government

the lawyer who allegedly represented

and then Lopez in the same matter.

seriously developed

at 17, and

misconduct, relating to the

on appeal are waived,

first the

Arguments not

Zannino, 895 F.2d

_______

in this instance we also think that a deliberate,

and reasonable, strategy choice was made.

Nevertheless,

those charges of selective and vindictive

prosecution indirectly concern the integrity

process.

filings in

of the judicial

We have therefore reviewed with care the pertinent

the district court, the

district court's lengthy

discussion of the subject, what little Lopez has to say about

the

matter on

rebuttal.

appeal, and

the government's

more extensive

Although the waiver relieves us of the need to set

out the facts in detail, we comment briefly on each branch of

Lopez' claim.

The district court did not ignore the serious charges of

blackmail made against certain members of the U.S. Attorney's

office, but

analyzed the proffered evidence with care.

evidence consisted primarily of

hearsay and conjecture,

This

and

the district

court after

scrutiny found it

require an evidentiary hearing.

46.

on

insufficient to

Lopez, 854 F. Supp.

_____

The district court's judgment call was not

its

face,

especially

where

as

here

unreasonable

the

vindictive

prosecution claim falls outside the narrow area where

claim traditionally has

been recognized, e.g.

____

-23-23-

at 45-

such a

United States
_____________

v. Garza-Juarez, 992
____________

denied,
______

114 S.

F.2d 896,

Ct. 724

905 (9th

(1994),

Cir. 1992),

and where

cert.
_____

the prosecution

itself was conducted by a new U.S. Attorney not implicated by

Lopez' allegations.

As for selective prosecution,

the government for information

The government

Lopez

supplied the

had not made

treatment.

government would

asked

about its prosecution policy.

data and

out a colorable

Id. at 44.
___

the district court

Nor is it

the court ruled

that

claim of discriminatory

surprising to us that the

prosecute criminally a

charge of

false loan applications totalling a considerable sum.

multiple

The government-misconduct claim that Lopez does argue at

length on appeal concerns Luis Plaza Lopez.

allegations,

Plaza, while

serving

States Attorney, began the

in February

inquiry

Plaza

1992, and

before

then

leaving

of

took a small

the

representing Lopez

after

a new

prior role

number of steps

government

began representing

Plaza's

an Assistant

United

grand jury investigation of Lopez

government's investigation.

know

as

According to the

Lopez

Lopez

in

in

November 1992.

dealing with

asserts that he

his

a year later, before

United States

in

in the

case.

Plaza

the

did not

ceased

Lopez was indicted,

Attorney raised

questions about

Plaza's dual role.

If

after leaving

the

government Plaza

worked on

the

other side of the same matter, this would normally constitute

-24-24-

a violation

of federal

ordinarily the

here the

law.

injured party

government, which

See
___

18 U.S.C.

would be the

would be

207.

But

original client,

entitled to

fear that

confidential information might now be used against it by

its

own former lawyer.

declining to

The

district court made

this point

convene an evidentiary hearing

in

on this matter.

Lopez, 854 F. Supp. at 49.

_____

Lopez responds by saying

because Plaza must have

that he was himself prejudiced

carried into his new employment

prosecutor's judgment that Lopez was guilty.

to

case

law holding

cannot sit

on a matter

United States
_____________

1994).

is

The

just

37

Lopez cites us

this reason,

on which he worked

v. Arnpriester,
___________

connection

be

impartial, is

with

impartiality suspect.

one

side

An attorney

a judge

as a prosecutor.

F.3d 466,

analogy is not very persuasive.

supposed to

prior

that, for

his

467 (9th

Cir.

The judge, who

disqualified because

renders

his

is expected to be

his

present

loyal,

not impartial, and after switching sides has ample inducement

to act in the interest of the attorney's new client.

___

But--Lopez

as

Lopez'

counters--in this case

____

attorney,

told

Lopez

Plaza, while serving

that

the

government

prosecutors might drop charges if Lopez supported one of them

for the then open post of U.S. Attorney.

that

Plaza was

depriving

working

Lopez of

as an

agent for

The implication is

prosecutors, thus

his constitutional right

-25-25-

to independent

counsel.

Assuming that Plaza ever conveyed such a message to

Lopez, Plaza's role was that of a go-between and was apparent

to Lopez.

The suggestion

that Plaza therefore

had divided

loyalties or was a government agent is rhetoric.

Lopez'

most

straightforward

they

complaint

prosecutors,

when

discovered

appearing on

Lopez' side, should have

that

is

that

the

Plaza

was

now

immediately disclosed

to Lopez Plaza's prior involvement as prosecutor

case.

Lopez cites

us to cases where

in the same

the government has by

its silence improperly reaped an advantage from disloyal acts

of

private

defense

government.

counsel

cooperation

E.g., United States v.

____ ______________

1507 (N.D. Cal. 1991).

government

in

gained any

with

the

Marshank, 777
________

F. Supp.

But there is no indication

that the

advantage

from

delay in

disclosing

Plaza's former affiliation, if undue delay there was.

The main job of the trial judge in a criminal case is to

try the defendant,

defense seeks

and there

is always a

tension when

the

to shift the focus to charges of improprieties

or wrongdoing by the

government.

Where there

are plausible

claims of government misconduct prejudicing the rights of the

defendant, the district court cannot ignore them; but how far

to

pursue

them,

circumstances, and

and

in

the judge

what

manner,

on the scene

depends

upon

has considerable

latitude.

United States v. Ortiz-Arrigiotia,

_____________
________________

996 F.2d 436,

442-43 (1st Cir. 1993), cert. denied, 114 S. Ct. 1368 (1994).
_____ ______

-26-26-

Here,

the trial judge looked

and let the red herrings go.

about for big

fish, saw none,

V.

Lopez was

edition

of

sentenced pursuant

the

references are

conviction

SENTENCING

Sentencing

to

were

that

to the November

Guidelines

edition).

grouped,

(all

The

U.S.S.G.

seven

3D1.2,

1, 1990,

subsequent

counts

and

of

Lopez'

sentence was calculated under section 2F1.1, which prescribes

a base offense

level of

6 for offenses

involving fraud

or

deceit.

The

"loss"

main variable under section

inflicted

or

intended,

2F1.1 is the amount of

and

the

district

court

calculated the total loss for the seven counts as $6,689,051,

requiring

an

2F1.1(b)(1)(O).

increase

The

of

14

levels.

district court

added

U.S.S.G.

six additional

levels, representing

planning, id.
___

id.
___

two levels

each for more

2F1.1(b)(2), abuse of

3B1.3,

and

obstruction of

perjury during trial, id.

___

than minimal

a position of

justice

for

trust,

committing

3C1.1.

The resulting total base offense level was 26 (6 plus 14

plus

6).

criminal

Lopez had

history category

corresponds

imprisonment.

sentence

no

to

prior

of

guideline

The

by imposing

court

convictions

I, his

range

chose to

offense

of

63

level of

26

to

78

construct the

concurrent sentences

-27-27-

and, given

of 24

months'

63-month

months on

count 1 (the conduct

earlier version of

for

underlying this count occurred

section 1014 was in effect

when an

that provided

a two-year maximum sentence), 63 months each on counts 2

through 5, and 60 months each on counts 6 and

7 (there being

a 60-month statutory maximum on those last two counts).

Lopez

six-level

has not challenged the base

adjustment

obstruction.

He

does

for

planning,

challenge the

offense level or the

abuse

of

trust

or

loss calculations

on

counts

1 through

5,

and

on

government suggests a remand.

those false statement

the claims

concern

is

of

his

to sentences on

to

claims

the

Having reversed convictions on

counts, we have no reason

of error as

limited

certain

Lopez'

to consider

those counts.

separate

attacks

Our

on

the

calculations as to counts 6 and 7.

The broader of the

two challenges made by Lopez

sentence on counts 6 and 7

to his

is that the government failed

to

show either an actual or an intended loss to the partnerships

because

Lopez was

charged with having

$308,481 from the partnerships'

improperly withdrawn

reserve accounts in 1988 and

the same year the partnerships allegedly owed Lopez $741,000.

Lopez' brief reasons that the "withdrawal of monies that were

owed to him . . . did not cause the partnerships any `actual'

economic loss,"

nor can

there have

been any

intended loss

because "here, the alleged crime was complete yet there still

was no loss."

The argument is clever but unpersuasive.

-28-28-

If a

defendant had picked

the pocket of a

victim in a

crowded elevator, gaining $10 in the process, it would not be

defense when

the $10

defendant at sentencing

loss figure

to say that

was attributed

to the

the victim happened

owe the defendant an even larger sum.

As long as

to

a theft or

diversion is concealed or disguised, the victim has no reason

to

think that its debt has been

reduced.

In this sense the

loss caused by Lopez was both actual and intended.

Lopez' second

more

substance.

withdrawn

was

and,

Lopez has

is

less ambiguous but

common

ground

from the partnerships'

that

the

may have

amount

reserve accounts

This was the amount charged in the indictment

interestingly,

district court

that

It

by Lopez

$308,481.

argument is

it

is

the

figure

in its order requiring

not

challenged.

Yet

specified

by

the

restitution, an order

in reliance

on

the

probation report, the district court found a loss of $436,176

attributable

to the wire fraud

counts; and as

we shall see

the difference between the two figures may matter.

The probation

officer originally calculated the loss on

counts 6 and 7 as $308,481 but thereafter a letter containing

victim

impact

Management

probation

statement

Strategies

was

claiming a

officer deducted various

received

loss

of

from

Capital

$632,917.

The

amounts from this larger

figure concluding that they did not reflect losses imposed by

Lopez.

The amount

left was

$436,276, which the

-29-29-

probation

officer

and

attributable

was not

for

the

district

court

to counts 6 and 7.

attached to the

the claimed

total

adopted

as

the

The victim impact statement

pre-sentencing report so

loss

loss

of

$632,917 is

the basis

difficult

to

discern.

At sentencing, the discrepancy

between the original and

adjusted figures for the loss on counts 6 and 7

large, since

both

figures were

dwarfed

by the

did not loom

losses

on

counts 1

through 5; whether the

$308,481 or $436,176, the

loss of counts 6

total loss on all

and 7 was

counts appeared

to be within the $5 to $10 million range for which a 14-level

increase was required.

Nevertheless, at sentencing

defense

counsel took a swipe at the victim impact statement,

calling

it "a letter

report.

that has

No live

been alluded to

body,

in the

no documentation.

pre-sentence

. and

to

indicate that there are $436,376 in the losses as a result of

that, I believe, is -- is improper."

On appeal,

not

Lopez says that

the letter in

question was

disclosed to him, despite a request, and argues that the

trial

judge "failed

to

exercise

relied

mechanically

on

independent judgment

non-disclosed

hearsay

but

document

referred to very generally

."

The government

hearsay can be used

by

in the pre-sentence report .

responds that

in this

. .

circuit reliable

at sentencing, including hearsay adopted

a pre-sentence report.

See United States v. Tardiff, 969

___ _____________
_______

-30-30-

F.2d 1283,

1287 (1st Cir.

1992).

Lopez then

says that the

victim

impact statement

had

no indicia

of reliability,

point difficult to resolve since it is not before us.

It

is not

abstract

necessary

to

decide

these issues

in

the

because the case must in all events be remanded for

resentencing.

The bulk of the losses, and thus a significant

part of Lopez'

sentence on counts 6 and

attributed

to

the

government

has not

counts

that

given us

we

7, rests on amounts

have

any reason

reversed.

to think

The

that the

losses for counts 1 through 5 can be attributed to Lopez in a

resentencing on counts 6 and 7.

The possibility that it may

retry Lopez on counts 1 through 5 is irrelevant at present.

The base offense level for

level increase

have not

counts 6 and 7 and

been challenged

on appeal,

the six-

so the

only

question is the amount of loss.

The difference between

the two alternative figures here is significant; the $308,481

figure

and a

would seemingly produce

sentencing range

a total offense

of 33-41

months,

level of 20

while the

larger

$436,276 figure would produce a total offense level of 21 and

range of

37-46 months.

technical argument

(e.g.,
____

because

to defend

Lopez

did

Although

the use

not

one might

of the

counter

the

construct a

larger figure

report

with

evidence), we think that simple justice suggests that this is

the wrong course to

follow, especially since resentencing is

required in any event.

-31-31-

If

of the

made

on remand the government wants to rely on the larger

two figures,

available

Whether

to

Lopez'

the government

with any other kind

seek

the victim impact

counsel

wants to

statement should

prior

be

to resentencing.

support the

larger figure

of evidence, and whether Lopez

wants to

an evidentiary hearing at which the maker of the victim

impact statement

can be cross-examined, are

matters for the

future.

What we will not do is uphold on this record the use

of the

larger figure where a procedural flaw arguably exists

and we ourselves cannot discern the basis for the figure.

The

vacated;
_______

counts or

convictions and sentences on counts 1 through 5 are

the government

may

not, as it chooses.

retry the

defendant on

The convictions

those

on counts 6

and

7 are affirmed but the sentences imposed on those counts

________

are

vacated and the case remanded

_______
________

counts of conviction.

It is so ordered.
_________________

for resentencing on those

-32-32-