United States v. Colon-Ledee

2014 | Cited 0 times | First Circuit | November 5, 2014

United States Court of Appeals For the First Circuit

No. 13-1067 UNITED STATES OF AMERICA, Appellee,


ASTRID COLÓN LEDÉE, Defendant, Appellant.

No. 13-1078 UNITED STATES OF AMERICA, Appellee,


EDGARDO COLÓN LEDÉE, Defendant, Appellant.


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


Lynch, Chief Judge, Torruella and Lipez, Circuit Judges.

Víctor M. Agrait-Defilló for appellant Astrid Colón Ledée. Rafael F. Castro-Lang, with whom Nicolás Nogueras Cartagena was on brief, for appellant Edgardo Colón Ledée. Charles Robert Walsh, Jr., Assistant United States Attorney, with whom Rosa Emilia Rodríguez-Vélez, United States Attorney, Nelson Pérez-Sosa, Assistant United States Attorney, Chief, Appellate Division, and John A. Mathews II, Assistant United States Attorney, were on brief, for appellee.

November 5, 2014

LIPEZ, Circuit Judge. Appellants in this consolidated

appeal are a brother and sister who were found guilty of multiple

bankruptcy-related crimes designed to conceal the brother's assets

and thereby avoid his obligations to creditors. The pair assert a

host of trial and sentencing errors, none of which we find

meritorious. Accordingly, we affirm both siblings' convictions and


I. Factual Background

We present the facts as the jury could have found them,

reserving additional detail for our analyses of appellants' claims.

In August 2002, Edgardo Colón Ledée, a plastic surgeon,

and his sister, Astrid Colón Ledée, a bankruptcy attorney,

collaborated on the transfer of Edgardo's oceanfront residence and

office to Investments Unlimited ("IU"), a corporation wholly owned

and controlled by Edgardo. Astrid drafted the deed and represented

IU in the transaction as its president. The property, known as

Málaga #1, had an outstanding mortgage of about $720,000, and the

deed states that Edgardo sold it to IU to extinguish a $40,000

debt. Edgardo reported in his later filings in bankruptcy court

that he leased the property from the corporation after the

transfer, but the mortgage remained in his name and he continued to

take the mortgage interest deduction on his personal tax return.

In May 2003, approximately nine months after the transfer

of Málaga #1, Edgardo filed a voluntary petition for Chapter 7


bankruptcy, with Astrid serving as his attorney. At that time, he

reported a debt of $100,000 to the Puerto Rico Treasury Department

and faced about twenty malpractice suits. In the Statement of

Financial Affairs ("SOFA") filed with his bankruptcy petition,

Edgardo did not disclose his ownership of IU and Málaga #1 or that

he had transferred the property to IU less than a year earlier.1

In October 2003, Edgardo filed an amended petition whose supporting

documents disclosed some additional properties, but he again failed

to report the Málaga #1 transaction or his ownership of IU. The

newly disclosed properties were heavily encumbered, and therefore

did not add to the funds available for creditors. Astrid also

signed the amended petition as Edgardo's legal representative in

the bankruptcy. In both the original and amended petitions,

Edgardo reported that he rented Málaga #1 from IU.

In November 2003, Edgardo lied under oath at a meeting of

his creditors convened by the bankruptcy trustee, testifying that

IU's stockholders lived in Chicago and were not related to him. He

also reported that his only relationship with IU was an agreement

to rent Málaga #1. Astrid, who attended the meeting as Edgardo's

1 A Statement of Financial Affairs "is to be completed by every debtor." B 7 (Official Form 7) (04/13). The currently required information includes a list of property transfers, other than for business, "transferred either absolutely or as security within two years immediately preceding the commencement of this case." Id. (emphasis in original); see 11 U.S.C. § 521(a)(1)(B)(iii); Fed. R. Bankr. P. 1007(b)(1)(d). At the time Edgardo filed his Chapter 7 petition, the transfer period was one year preceding commencement of the case.


attorney, subsequently gave the trustee copies of commercial and

residential leases that purported to show that Edgardo was renting

Málaga #1 from IU. Based on Edgardo's filings and his

representations at the creditors' meeting, the trustee found that

there were no assets that could be liquidated to obtain funds to

pay creditors and, on December 28, 2004, the trustee filed a Report

of No Distribution.

In July and August 2006, during the pendency of the

bankruptcy case and without notice to the trustee or bankruptcy

court, Edgardo arranged for IU to purchase three pieces of

property: a penthouse condominium known as Laguna Gardens V PHP

(for $195,000), a building known as El Convento (for $490,000), and

an adjacent lot next to El Convento identified as Antonsanti (for

$68,000). Edgardo deposited cash into IU's bank account to fund

the purchases, and Astrid paid the amounts due at the closings with

manager's checks drawn on IU's account.2 Astrid represented IU as

its president for each of the three transactions, executing the

deeds at each closing.

The deception began to unravel in late 2006 when a

creditor's objection to the Report of No Distribution led the

2 A "manager's check," also known as a "cashier's check" or "official check," is a check written by a bank on its own funds. See http://www.businessdictionary.com/definition/cashier-s- check.html. Such checks frequently are purchased by individuals for use in transactions requiring a secure method of payment. See http://www.robinsonsbank.com.ph/branchbanking.do?item_id=13545.


bankruptcy trustee to look more closely at the Málaga #1 property.

A realtor hired by the trustee discovered a "for sale" sign on the

property and, upon inquiring, learned that the seller was Edgardo.

The trustee's ensuing investigation revealed Edgardo's prior sale

of the property to IU and Astrid's role in the transaction,

prompting the filing of an adversary complaint in the bankruptcy

case on December 14. The trustee alleged in the complaint that

Edgardo had transferred the property to IU "with an actual intent

to hinder, delay or defraud" creditors, and he demanded that the

transfer be set aside and the property declared part of Edgardo's

bankruptcy estate. The trustee also sought sanctions against

Astrid, including damages and attorney's fees in favor of the

bankruptcy estate, and filed a notice in the real property registry

alerting third parties to the title claim against Málaga #1. Later

in the month, Astrid, as IU's president, signed annual reports for

the company for the years 2001 to 2005.3

Developments on two fronts quickly followed the filing of

the adversary proceeding. On January 5, 2007, Astrid withdrew from

the bankruptcy case and informed the bankruptcy court that she had

resigned her position as IU's president. Meanwhile, Edgardo

arranged a hurried sale of Málaga #1 to his girlfriend's parents,

with the closing taking place on January 6, Three Kings Day, a

3 Astrid is listed as both president and treasurer in the reports. Angela Ledée, Astrid and Edgardo's mother, is listed as secretary.


significant holiday in Puerto Rico and an unusual day for such a

transaction. Representing IU at the closing was Myrna Cintrón

Estrada ("Cintrón"), Edgardo's cousin who served as his housekeeper

and who had been newly installed as IU's president to replace

Astrid. The sales price was $1.1 million, with $410,000 due from

the buyers, Luis Santiago Aponte ("Santiago") and Yolanda Lebrón

Matos ("Lebrón"), the latter figure being roughly the amount in

excess of the outstanding mortgage on the property.

On January 8 and 12, manager's checks totaling $410,000

and made out to Investments Unlimited were deposited into IU's bank

account, one in the amount of $205,000 on the earlier date and two

for $102,500 on the later date. The larger check and one of the

two smaller ones was obtained in Santiago's name, and the third

check was obtained in Lebrón's name. On each of the two days the

deposits were made, or shortly thereafter, Edgardo wrote four

checks on IU's account for $51,250 each -- a total of eight checks4

-- to the following individuals: Cintrón, Rafael Vaquer, Maria

Bonilla Hernández, and Reynaldo Cordero Cintrón.5 Each of the

4 The FBI agent who testified to these transactions, as depicted in a summary chart, stated that he could not tell from a review of the documents who was authorized to sign checks on IU's account. However, abundant evidence indicated that Edgardo controlled IU and its funds. 5 A slight variation occurred in one of the names. The first batch included a check made out to Rafael Vaquer, who testified that his wife is Edgardo's cousin. The second batch included one made out to Rafael Vaquer Camacho. Cordero, Cintrón's son, testified that his first name was spelled incorrectly on the


eight IU checks was used to purchase a manager's check in the same

amount made out to the same individuals. Although the manager's

checks contained endorsement signatures on the back, all four

payees -- all family members of Edgardo -- denied receiving or

endorsing the checks. All of the checks apparently were returned

to the accounts of Santiago and Lebrón.

The adversary proceeding in Edgardo's bankruptcy case was

resolved in March 2008. Edgardo and Astrid both accepted a Partial

Settlement Agreement finding that Málaga #1 was property of the

bankruptcy estate and requiring Edgardo to rescind the sale to

Santiago and Lebrón. Edgardo further agreed that, if the proceeds

from the trustee's sale of Málaga #1 did not suffice to pay all

claims and costs,6 the trustee could reactivate the adversary

proceeding and seek the shortfall from sale of the properties

Edgardo purchased in 2006 -- the Laguna Gardens V PHP, El Convento,

and Antonsanti.7 Edgardo subsequently filed amended schedules with

checks, and that it should have been spelled with an "i" (i.e., "Reinaldo") rather than a "y." 6 The record indicates that all claims were paid in full. The trustee sold Málaga #1 in July 2008 for $1.45 million, with the bankruptcy estate receiving the sum over the then-current $700,000 mortgage. Edgardo personally paid some creditors with funds that were outside the bankruptcy estate. 7 The agreement provided alternatively that, if the sale of Málaga #1 was insufficient to pay all creditors in full, Edgardo could choose to pay the deficiency with personal funds within thirty days to avoid sale of the three properties.


the bankruptcy court that reported, inter alia, his 100 percent

ownership of IU.8

A year later, in April 2009, Edgardo and Astrid were

charged in an eight-count indictment with various bankruptcy-

related crimes, including conspiracy to conceal property belonging

to Edgardo's bankruptcy estate and to fraudulently conceal and

transfer his and IU's property with the intent to defeat the

bankruptcy laws, as well as a substantive offense alleging that

they concealed the property. See 18 U.S.C. §§ 371, 152(1) & (7).

The first five counts cited the siblings' concealment of Edgardo's

ownership interests in IU and Málaga #1 and the transfer of funds

through IU to purchase the three properties in 2006. Count Six

charged Edgardo alone with the fraudulent transfer of Málaga #1 in

January 2007, in violation of 18 U.S.C. § 152(7). Count Seven

charged him with laundering the proceeds of the Málaga #1 "sale" in

January 2007 by converting the two $205,000 payments into eight

cashier's checks payable to four individuals who "had no financial

interest in the transaction or Investments Unlimited," in violation

of 18 U.S.C. § 1956. Count Eight was based on conduct unrelated to

the activities at issue in this appeal.9

8 The bankruptcy case was closed in November 2013 after the trustee filed a final report, but it was reopened a few days later at Edgardo's request so that he could pursue a pending motion for a release of liens. 9 Count Eight alleged that Edgardo had fraudulently transferred and concealed $75,000 in March 2002, before the


After a seventeen-day trial in January and February 2012,

a jury found Edgardo guilty on Counts One through Seven and Astrid

guilty on all five counts against her. Edgardo was acquitted of

the fraudulent transfer alleged in Count Eight. The district court

sentenced Edgardo to sixty months' imprisonment on each of Counts

One through Six and seventy-two months' imprisonment on Count

Seven, the money-laundering crime, all to be served concurrently.

The court sentenced Astrid to a term of thirty-six months. The

district court granted Astrid's request for release on bail pending

appeal so that she could care for her ailing mother, conditioned on

her mother's continuing need for help. Edgardo began serving his

term in May 2013.

On appeal, appellants challenge both their convictions

and sentences, each asserting multiple claims of error. They

insist that the evidence was insufficient to support their

convictions on some or all counts, and their common claims also

include an objection to the district court's sixteen-level increase

in their base offense levels under the sentencing guidelines.

Edgardo includes among his claims a contention that the Partial

Settlement Agreement, which brought Málaga #1 into his bankruptcy

estate, constituted a waiver by the government of all charges based

on conduct that was cured by his corrective actions. Astrid

transfer of Málaga #1 in August 2002 and the bankruptcy filing in May 2003.


includes among her claims a contention that the district court

abused its discretion by denying her motion in limine to exclude

prejudicial evidence relating to her own bankruptcy proceedings in


We address these arguments in turn, identifying in each

instance whether the challenge is brought by Edgardo, Astrid, or

both siblings.

II. Edgardo: Government Waiver

Edgardo asserts that the Partial Settlement Agreement in

his bankruptcy case effected a waiver by the government of the

fraud, concealment, and money laundering charges lodged against him

and, hence, entitled him to a judgment of acquittal on all counts.

He frames this argument in terms of estoppel: the government is

estopped from charging him criminally for concealing his ownership

of Málaga #1 and IU and failing to disclose the transactions

associated with them, because the trustee and bankruptcy court

accepted the amended bankruptcy schedules that remedied any

illegality in his prior conduct. In advancing this argument,

Edgardo invokes both equitable estoppel and judicial estoppel.

A. Equitable Estoppel

In general, courts apply equitable estoppel "to prevent

injustice when an individual detrimentally and predictably relies

on the misrepresentation of another." Nagle v. Acton-Boxborough

Reg'l Sch. Dist., 576 F.3d 1 , 3 (1st Cir. 2009). The doctrine is


used sparingly against the government, id., and a party seeking to

equitably estop the government must show "at least . . . 'an

affirmative misrepresentation or affirmative concealment of a

material fact by the government,'" Shafmaster v. United States, 707

F.3d 130 , 136 (1st Cir. 2013) (quoting Ramírez-Carlo v. United

States, 496 F.3d 41 , 49 (1st Cir. 2007)). See also Heckler v.

Cmty. Health Servs. of Crawford Cnty., Inc., 467 U.S. 51 , 60 (1984)

(noting that "it is well settled that the Government may not be

estopped on the same terms as any other litigant"). Here, Edgardo

cites no affirmative statement by the trustee or bankruptcy court

that the Settlement Agreement, and Edgardo's filing of amended

schedules, would cleanse his prior unlawful conduct and protect him

from criminal prosecution.

Edgardo suggests that the misrepresentation requirement

is met through the bankruptcy court's allowance of his amendments,

which he equates with a statement by the court that his conduct had

become acceptable and, consequently, immune from criminal

liability. Edgardo, however, reads far too much into the bare fact

that the bankruptcy court approved his amendments. Under the

Federal Rules of Bankruptcy Procedure, a debtor is permitted to

amend a schedule "as a matter of course at any time before the case

is closed." Fed. R. Bankr. P. 1009(a); see also In re Hannigan,

409 F.3d 480 , 481 (1st Cir. 2005). Although a bankruptcy judge has

the discretion to deny an amendment based on the debtor's bad


faith, see, e.g., Malley v. Agin, 693 F.3d 28 , 30-31 (1st Cir.

2012),10 the court's acceptance of amendments does not necessarily

mean that the court has found no misconduct. Where, as here, the

offered amendments plainly benefitted creditors, the decision to

accept the amendments could not possibly reflect any forgiveness by

the court of the underlying conduct that required the amendments.

Hence, there was no misrepresentation to give rise to equitable


B. Judicial Estoppel

To establish judicial estoppel, a litigant must show that

an opposing party is pressing a litigation position inconsistent

with a position the party successfully asserted previously, and the

new position would unfairly advantage that party if the court

accepted it. See Knowlton v. Shaw, 704 F.3d 1 , 10 (1st Cir. 2013);

Perry v. Blum, 629 F.3d 1 , 9 (1st Cir. 2010). Edgardo argues that

the government's filing of criminal charges was inconsistent with

10 We note that the Supreme Court has recently held that bankruptcy courts do not have "a general, equitable power . . . to deny exemptions based on a debtor's bad-faith conduct." See Law v. Siegel, 134 S. Ct. 1188 , 1196 (2014) (emphasis added). In Malley and the case it cites for the bad-faith principle, In re Hannigan, 409 F.3d 480 (1st Cir. 2005), we affirmed bankruptcy court orders that had relied on the debtors' bad faith to limit exemptions. See Malley, 693 F.3d at 30 (affirming surcharge against exempt property to offset fraudulent concealment of non-exempt property); In re Hannigan, 409 F.3d at 484 (affirming denial of amendment to homestead exemption as a sanction for bad faith). Although Law appears to overrule Malley and Hannigan to the extent they limited exemptions based on bad-faith conduct, the Supreme Court's ruling does not restrict the bankruptcy court's discretion concerning amendments unrelated to exemptions -- as was the situation here.


the bankruptcy court's prior judgment to accept the Partial

Settlement Agreement. He asserts that the settlement "benefited

the Trustee and the creditors beyond what they would have obtained

in an adversary proceeding." Hence, he argues that it is unfair to

allow the government to prosecute him for fraud and concealment

when, "by the time the indictment was filed[,] the schedules were

correct and the estate complete, all with the blessing of the

Bankruptcy Court."

Edgardo offers no case support, however, for his

contention that the decision of a bankruptcy trustee or bankruptcy

court to settle claims of misconduct in a bankruptcy case -- here,

the concealment set forth in the adversary proceeding that was

resolved with the Partial Settlement Agreement -- can estop the

United States Attorney from subsequently filing criminal charges.

The government emphasizes the requirement that the same party

assert contradictory positions, and it insists that the Chapter 7

trustee and the United States Attorney are not interchangeable.

See United States v. Modanlo, 954 F. Supp. 2d 384 , 388 (D. Md.

2013) (stating that the United States Attorney "is not the same

party as nor is it in privity with the U.S. Trustee," as the two

officials "operate pursuant to completely different statutory

purposes, powers, and interests," with distinct agendas). Indeed,

courts have recognized in the preclusion context the folly of

treating the government as a single entity in which representation


by one government agent is necessarily representation for all

segments of the government. See United States v. Alky Enters.,

Inc., 969 F.2d 1309 , 1314-15 (1st Cir. 1992) (holding that the

Interstate Commerce Commission was not in privity with the U.S.

Attorney General, and rejecting applicability of res judicata

because the ICC "did not have statutory authority to represent the

United States' interest" in the earlier proceeding); see also

United States v. Hickey, 367 F.3d 888 , 893 (9th Cir. 2004) (holding

that the Securities and Exchange Commission and the United States

Attorney were "not the same party" for purposes of collateral

estoppel because, inter alia, the SEC "was not acting as the

federal sovereign vindicating the criminal law of the United

States" (internal quotation marks omitted)).11 Likewise, in the

context of judicial estoppel, the government in all its guises

cannot inevitably be viewed as a single party.

We need not compare the roles of the government parties

in the proceedings at issue here, however, because, as explained

above, there simply were no inconsistent positions taken. In

11 We have recognized that there are occasions when privity exists "'between officers of the same government so that a judgment in a suit between a party and a representative of the United States is res judicata in relitigation of the same issue between that party and another officer of the government.'" Alky Enters., 969 F.2d at 1312 (quoting Sunshine Anthracite Coal Co. v. Adkins, 310 U.S. 381 , 402-03 (1940)). However, "[t]he crucial point is whether or not in the earlier litigation the representative of the United States had authority to represent its interests in a final adjudication of the issue in controversy." Sunshine Anthracite Coal Co., 310 U.S. at 403.


bankruptcy court, Edgardo secured a stay of the adversary

proceeding and, assuming his compliance with the Partial Settlement

Agreement, he gained protection from the possibility of sanctions

under bankruptcy law. See, e.g., Law v. Siegel, 134 S. Ct. 1188 ,

1198 (2014) (noting that bankruptcy courts have "authority to

respond to debtor misconduct with meaningful sanctions," including

denying the debtor a discharge and ordering payment of attorney's

fees and other expenses (internal quotation marks omitted) (citing

Fed. R. Bankr. P. 9011(c)(2)). There was no reference in the

agreement to the possibility of criminal charges. While Edgardo

may have hoped his belated full disclosure would protect him from

prosecution for fraud and unlawful concealment, "the government" --

whether in the persona of the bankruptcy trustee or the United

States Attorney -- made no such commitment. Cf. United States v.

Penn. Indus. Chem. Corp., 411 U.S. 655 , 674 (1973) (holding that

criminal prosecution may be barred if government misled defendant

on whether charged conduct was criminal).

The sole settlement case on which Edgardo relies, Hoseman

v. Weinschneider, 322 F.3d 468 (7th Cir. 2003), is inapposite.

There, a trustee's declaratory judgment action was filed in

bankruptcy court against a debtor who had failed to disclose his

interest in a business during negotiations to settle an adversary

proceeding. Id. at 471. The Seventh Circuit ruled that the

trustee must adhere to the terms of a release and covenant not to


sue that had been executed as part of the settlement, rejecting the

trustee's post-settlement attempt to secure the business interest

for the debtor's bankruptcy estate. Id. at 473-74.

The court's enforcement of the settlement in Hoseman is

nothing like Edgardo's proposed bar of a criminal prosecution based

on his bankruptcy settlement. Not only did the agreement in

Hoseman cover "all claims, known or unknown" and expressly protect

the debtor from "any suit or action, at law or in equity," id. at

473 (internal quotation marks omitted) -- the very type of

proceeding later filed by the trustee -- but it was the trustee who

both signed the agreement and sought to escape from its

limitations. In addition, both the settlement and the court action

in Hoseman were part of the bankruptcy proceedings. Here, by

contrast, the settlement agreement did not promise Edgardo immunity

from prosecution in exchange for his surrender of Málaga #1, and

two different arms of the federal government are implicated.

Finally, to the extent Edgardo's briefing can be

construed to raise the doctrine of collateral estoppel, that effort

too is unavailing.12 The bankruptcy court issued no ruling on the

legality of Edgardo's conduct that could possibly implicate

collateral estoppel, which bars relitigation of previously decided

issues that were "essential to the [earlier] judgment," Ríos-

12 The district court expressly rejected collateral estoppel based on the settlement agreement as a bar to the criminal prosecution. See Dkt. 302 (Order of Feb. 6, 2012).


Piñeiro v. United States, 713 F.3d 688 , 692 (1st Cir. 2013). See,

e.g., United States v. Tatum, 943 F.2d 370 , 382 (4th Cir. 1991)

(rejecting application of collateral estoppel in a criminal case

based on bankruptcy discharge where "[t]he only adjudication

necessary to the discharge . . . was approval of the settlement

agreement as an acceptable compromise in the interests of the

estate and its creditors"); cf. United States v. Modanlo, 493 B.R.

469 , 475 (D. Md. 2013) (noting parties' acknowledgment that

"collateral estoppel may bar the Government from litigating, in a

criminal case, an issue previously litigated and decided in a civil

bankruptcy proceeding").13 The bankruptcy judge did not address the

criminality of Edgardo's conduct, and whether Edgardo committed

crimes was not "essential" to the decision approving the Partial

Settlement Agreement.

In sum, Edgardo's settlement of the adversary proceeding

provided no basis for a judgment of acquittal on the criminal

charges subsequently filed against him.

III. Edgardo and Astrid: Sufficiency of the Evidence

Both appellants argue that the evidence adduced by the

government was insufficient to support their conspiracy convictions

13 As noted above, in a separate decision in a related proceeding, the judge in Modanlo rejected the defendant's contention that the government was collaterally estopped from criminally prosecuting him on the ground that the U.S. Attorney and the U.S. Trustee were neither the same party nor in privity with each other. See 954 F. Supp. at 388.


under Count One and the fraudulent transfer convictions under

Counts Three through Five based on IU's acquisition in 2006 of

Laguna Gardens V PHP, El Convento and Antonsanti. Edgardo

additionally challenges the adequacy of the record to support his

conviction for money laundering.

We apply de novo review to evidentiary sufficiency

claims, examining whether "'a rational factfinder could find,

beyond a reasonable doubt, that the prosecution successfully proved

the essential elements of the crime.'" United States v. DiRosa,

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

434 F.3d 1 , 4 (1st Cir. 2006)). We review the evidence, and all

reasonable inferences drawn from it, in the light most favorable to

the government. Id.

A. The Conspiracy Count

Both appellants claim that the evidence presented by the

government at trial fell short of establishing a conspiracy between

them to conceal and fraudulently transfer Edgardo's assets in

violation of the bankruptcy laws. See 18 U.S.C. § 152(1), (7).14

Astrid attempts to distance herself from Edgardo's conduct,

14 Section 152(1) imposes criminal liability on any person involved in a bankruptcy case who "knowingly and fraudulently conceals . . . from creditors or the United States Trustee, any property belonging to the estate of a debtor." Section 152(7) imposes criminal liability on any person who "in contemplation of a case under title 11 [the Bankruptcy Code] . . . or with intent to defeat the provisions of title 11, knowingly and fraudulently transfers or conceals any of his property."


claiming that she had nothing to do with his actions before the

transfer of the Málaga #1 property to IU and, hence, no conspiracy

could have been in place at the time of that transaction. She also

minimizes the significance of her role as president of IU, pointing

to evidence that other individuals who held that position were

uninvolved in the business and citing Edgardo's admission that IU

was his alter ego. For his part, Edgardo complains that the

government relied on improper hearsay evidence, and he asserts that

the jury necessarily drew impermissible inferences from appellants'

brother-sister relationship.

We find none of appellants' arguments persuasive. To

sustain a conspiracy conviction, the government must show that the

defendant knowingly agreed with at least one other person to commit

a crime, intending that the underlying offense be completed. See

United States v. Rodríguez-Adorno, 695 F.3d 32 , 41 (1st Cir. 2012);

United States v. García-Pastrana, 584 F.3d 351 , 377 (1st Cir.

2009). The indictment charges a conspiracy that extended from

about August 17, 2002 -- the date Málaga #1 was transferred from

Edgardo to IU -- through mid-January 2007 -- following the Three

Kings Day sale of Málaga #1, and after Astrid withdrew from the

bankruptcy case and relinquished the presidency of IU. The record

shows continuous collaboration by the siblings throughout that

period. Both were involved in the 2002 transfer: Edgardo was the

seller and, in effect, the buyer as well, and Astrid drafted the


deed and formally represented IU in the transaction as its

president. When Edgardo filed for bankruptcy about ten months

later without disclosing the sale of Málaga #1 or his ownership

interest in IU, Astrid signed the bankruptcy petition as his

attorney. Both attended the creditors' meeting in November 2003,

when Edgardo falsely stated that IU was owned by Chicago investors.

At that time, Astrid was still acting as IU's president (as well as

Edgardo's attorney). Both also signed the amended bankruptcy

schedules that continued to omit Málaga #1, and Astrid acted as

IU's president in the multiple real estate deals that Edgardo

initiated for IU in 2006. Later in 2006, Astrid signed five years'

worth of IU's late annual reports.

This evidence of the siblings' activities is sufficient

to permit a reasonable jury to conclude that the pair worked

jointly throughout the period charged in the indictment to

unlawfully conceal and transfer property belonging to Edgardo's

bankruptcy estate. Appellants attempt to discount the import of

their obvious collaboration by claiming a lack of proof that their

actions were taken pursuant to a conspiratorial agreement. The

government, however, need not produce "evidence of an explicit

agreement to ground a conspiracy conviction." United States v.

Pesaturo, 476 F.3d 60 , 72 (1st Cir. 2007). Rather, "[a]n agreement

to join a conspiracy 'may be express or tacit . . . and may be

proved by direct or circumstantial evidence.'" United States v.


Liriano, 761 F.3d 131 , 135 (1st Cir. 2014) (omission in original)

(quoting United States v. Rivera Calderón, 578 F.3d 78 , 88 (1st

Cir. 2009)).

Based on the evidence described above, a jury reasonably

could infer that the siblings had agreed to mislead the bankruptcy

court about Edgardo's assets, including his ownership of IU, and

took numerous steps designed to protect his resources, beginning

with the transfer of Málaga #1 in anticipation of the bankruptcy

filing.15 See Rodríguez-Adorno, 695 F.3d at 41-42 (noting that

findings of knowledge and intent may rest on inferences drawn from

the defendant's commission of acts furthering the conspiracy's

purposes). Accordingly, "there is no question that the government

presented sufficient evidence to support appellant[s']

convictions." Id. at 43.16

B. The Property Purchases in 2006

Both appellants claim that judgments of acquittal should

have been entered on the three counts charging them with the

fraudulent transfers of Laguna Gardens V PHP (Count Three), El

Convento (Count Four), and Antonsanti (Count Five), in violation of

15 Hence, contrary to Astrid's assertions, the jury could properly find that the transfer of Málaga #1 was an overt act -- indeed, the first of many -- in furtherance of the conspiracy. 16 Edgardo fails to develop his argument that the government relied on inadmissible hearsay evidence to support his conviction, and we therefore deem it waived. See United States v. Zannino, 895 F.2d 1 , 17 (1st Cir. 1990).


18 U.S.C. § 152(7). Section 152(7) provides, in relevant part,

that it is unlawful for a person, "with intent to defeat the

provisions of [the Bankruptcy Code], knowingly and fraudulently

[to] transfer[] or conceal[] any of his property." Appellants

argue that the government failed to prove that the properties were

purchased with funds belonging to the bankruptcy estate and, hence,

the jury could not properly find that they acted with the intent to

defeat the provisions of the Bankruptcy Code. Although the

government acknowledges that, "[d]ue to Appellants' actions," the

bankruptcy trustee could not exclude the possibility that the

properties were purchased with post-petition earnings,17 it asserts

that § 152(7) does not demand that the fraudulent transfers at

issue involve property of the bankruptcy estate.

We agree with the government, whose position is supported

by the plain language of the statute. Unlike § 152(1), which

addresses the concealment of "any property belonging to the estate

of a debtor," 18 U.S.C. § 152(1) (emphasis added), § 152(7) covers

the transfer or concealment of "any of [a debtor's] property or the

property of [any] other person or corporation," id.

§ 152(7)(emphasis added); see also United States v. Moody, 923 F.2d

341 , 346-47 (5th Cir. 1991) (noting the different language).

Hence, although the transfer or concealment prohibited by § 152(7)

17 Earnings "from services performed by an individual debtor after the commencement of the [bankruptcy] case" are not property of the estate. 11 U.S.C. § 541(a)(6).


must relate to a bankruptcy case -- i.e., it must be intended to

defeat the provisions of the Bankruptcy Code -- the statute reaches

beyond the bankruptcy estate itself. See United States v. Messner,

107 F.3d 1448 , 1452 (10th Cir. 1997) (finding that "culpability

will attach to a concealment of a person's own property if done for

the purpose of defeating bankruptcy"); United States v. West, 22

F.3d 586 , 590 (5th Cir. 1994) (holding that transfer of property

outside the bankruptcy estate may provide basis for violation so

long as it was "made knowingly, fraudulently, and in contemplation

of a case under title 11 or with intent to defeat the provisions of

title 11"); Moody, 923 F.2d at 347 (holding that "it is not

necessary for the property to be an asset of the bankruptcy estate"

so long as the defendant "has the intent at the time of the

concealment or transfer to defeat the bankruptcy law" (internal

quotation marks omitted)); see also 1 Collier on Bankruptcy

¶ 7.02[7][a][v] (16th ed. 2014) (noting that § 152(7) "covers the

debtor's postpetition transfers or concealments, if taken with the

requisite mental state, due to the level of interference with the

administration of the debtor's bankruptcy estate that might arise

from unregulated transfers").

The facts here illustrate why the fraud provisions of the

Bankruptcy Code reach post-petition earnings. The jury reasonably

could have found that Edgardo used post-petition earnings to fund

IU's account -- a bankruptcy estate asset that should have been


disclosed initially -- and then used that IU account to acquire the

three properties. It is inconceivable that such a blatant scheme

to manipulate an estate asset could be insulated from criminal

consequences simply because the funds at issue derived from post-

petition earnings. Indeed, because IU should have been included in

the bankruptcy estate, appellants presumably were obliged to bring

to the trustee's attention any funds moving through the company.

See 11 U.S.C. § 541(a)(7) (stating that property of the estate

includes "[a]ny interest in property that the estate acquires after

the commencement of the case").

Ultimately, however, appellants' challenge to their

convictions under Counts Three through Five does not depend on the

source of the funds used to purchase the three properties.

Regardless of how the acquisitions were financed, the jury could

have found that the transactions were deliberately structured to

conceal assets from the trustee and, hence, were done "with intent

to defeat the provisions of [the Bankruptcy Code]." 18 U.S.C.

§ 152(7). Appellants were therefore not entitled to judgments of

acquittal on Counts Three through Five.

C. Money Laundering

Count Seven of the indictment charged Edgardo with money

laundering, in violation of 18 U.S.C. § 1956(a)(1)(B)(i),18 alleging

18 To prove a violation of § 1956(a)(1)(B)(i), the government must establish:


that he knowingly transformed the proceeds of a property transfer

that was unlawful under bankruptcy law, see 18 U.S.C. § 152(7),

with the intention "to conceal and disguise[] the nature, location,

source, ownership, and control" of the funds. Edgardo cursorily

asserts that the government's evidence failed to show two necessary

elements of the money laundering charge: that the money at issue

was derived from unlawful activity and that he intended to

unlawfully use or conceal the money.19

This claim warrants little discussion. The government

sought to show that Edgardo committed money laundering when he

converted the proceeds of the Málaga #1 "sale" in January 2007 into

eight manager's checks payable to four of his relatives.20 By that

time, the trustee's investigation into the ownership of Málaga #1

(1) that [the defendant] knowingly conducted a financial transaction, (2) that he knew that the transaction involved funds that were proceeds of some form of unlawful activity, (3) that the funds were proceeds of a specified unlawful activity, and (4) that [the defendant] engaged in the financial transaction knowing that it was designed in whole or in part to conceal or disguise the nature, location, source, ownership, or control of the proceeds of such unlawful activity.

United States v. Hall, 434 F.3d 42 , 50 (1st Cir. 2006). 19 Edgardo makes a fleeting reference to the inadequacy of the government's proof that the charged financial transactions affected interstate commerce, see 18 U.S.C. § 1956(c)(4), but he fails to make a meaningful challenge to the sufficiency of the evidence on that element. We therefore do not consider the issue. 20 As noted above, the government presented evidence that the funds eventually were returned to the accounts of the purported buyers, the parents of Edgardo's girlfriend.


was underway and the adversary proceeding had been filed. The

circumstances of the closing itself bespoke a suspicious

foundation: the unusual scheduling on Three Kings Day to finalize

the sale, indicating urgency to get the deal done, with Edgardo's

cousin/housekeeper serving as IU's president following Astrid's

resignation. Notations on the eight IU checks that funded the

manager's checks suggested that the four payees were connected to

the company, but each denied any such relationship or receiving the

funds. This evidence, taken in the light most favorable to the

government, supports a finding that Edgardo initiated the sham sale

of Málaga #1, and arranged the convoluted handling of the proceeds,

to further his earlier fraudulent transfer and concealment of the


The evidence was thus sufficient for the jury to find

Edgardo guilty of unlawful money laundering.

IV. Astrid: Rule 404(b) Evidence

Astrid claims that the district court erred in allowing

the jury to hear evidence that she had failed to disclose that she

owned the apartment in which she lived when she filed for personal

bankruptcy in 2000. The government maintains that this evidence

21 The government suggests that Edgardo may have structured the transaction in this way to provide the appearance that IU had outside investors, consistent with his false testimony at the creditors' meeting in November 2003. A reasonable jury also could have concluded that Edgardo was seeking to hide that the sale was a sham by using official checks to "pay" supposedly IU-related individuals for services performed.


was admissible to show the defendant's knowledge and intent with

respect to the conduct alleged in the indictment, and thereby to

rebut any suggestion that her involvement in the charged crimes was

the product of neglect, mistake or accident.

Under Federal Rule of Evidence 404(b), evidence of prior

bad acts "is not admissible to prove a person's character in order

to show that on a particular occasion the person acted in

accordance with the character," Fed. R. Evid. 404(b)(1), but such

evidence may be introduced if it has "special relevance" and is not

unfairly prejudicial, DiRosa, 761 F.3d at 153; Fed. R. Evid. 403.22

We have explained that "special relevance" means the evidence "is

relevant for any purpose apart from showing propensity to commit a

crime." United States v. Doe, 741 F.3d 217 , 229 (1st Cir. 2013).

Among the permitted uses of prior acts evidence is to prove a

defendant's intent or knowledge. Fed. R. Evid. 404(b)(2); DiRosa,

761 F.3d at 152. Even specially relevant evidence should be

excluded, however, if there is "danger that it [would] sway[] the

jury toward a conviction on an emotional basis" or would pose an

undue risk of "an improper criminal propensity inference." United

States v. Varoudakis, 233 F.3d 113 , 122 (1st Cir. 2000).

To review the admission of prior bad acts evidence we

ordinarily follow a two-step inquiry. We first determine whether

22 Federal Rule of Evidence 403 provides, inter alia, that a court "may exclude relevant evidence if its probative value is substantially outweighed by a danger of . . . unfair prejudice."


the disputed evidence is specially relevant under Rule 404(b) and,

if so, we consider whether the evidence should nonetheless be

excluded, pursuant to Rule 403, because of the risk of unfair

prejudice. DiRosa, 761 F.3d at 153. We review the district

court's rulings on this inquiry for abuse of discretion. United

States v. Appolon, 715 F.3d 362 , 373 (1st Cir. 2013).

Astrid argues that the government may not justify

admission of the challenged evidence based on its need to prove her

state of mind because she advised the court that she would not rely

on any defense related to unfamiliarity with bankruptcy law. She

further asserts that the evidence was substantially more

prejudicial than probative.

Although Astrid predictably disclaimed reliance on

ignorance of the Bankruptcy Code as a defense -- given her

experience as a bankruptcy attorney -- that disclaimer does not

account for a possible defense that she was an unknowing

collaborator in her brother's scheme to defraud the bankruptcy

court. See, e.g., United States v. Landry, 631 F.3d 597 , 602 (1st

Cir. 2011) (finding prior acts relevant to show intent or knowledge

"because the evidence rebuts an innocent involvement defense").

Indeed, her briefing on appeal suggests such a strategy. She

emphasizes her limited role in, and knowledge of, IU's business,

points to Edgardo's admission that IU was his alter ego, and notes


that her response to the complaint in the adversary proceeding

reported reliance on information provided by the debtor.

We have observed that "[e]vidence of uncharged fraud

activity that is substantially similar to the activity underlying

a charged fraud scheme often is admitted to show knowledge or

intent to defraud with respect to the charged fraud scheme."

United States v. Sebaggala, 256 F.3d 59 , 68 (1st Cir. 2001). Here,

the district court supportably concluded that the disputed evidence

"relating to [Astrid's] own bankruptcy is substantially similar to

the charged concealment of assets in the instant case." Order

Adopting Report and Recommendation, at 7 (May 12, 2011)

("Order"). Hence, we agree with the court's finding that Astrid's

decision not to pursue a defense based on unfamiliarity with the

law "does not negate the probative nature of the proffered evidence

as to [her] knowledge, intent and lack of mistake or accident."

Id. at 6. The evidence thus easily survives the first step of our

two-part inquiry.

The second step, requiring us to review the court's

balancing of probative value against the risk of "unfair prejudice,

confusing the issues, [or] misleading the jury," Fed. R. Evid. 403,

only rarely leads to reversal of the district court's "on-the-spot

judgment." Doe, 741 F.3d at 229 (internal quotation marks

omitted). "[T]he balancing act called for by Rule 403 is a

quintessentially fact-sensitive enterprise, and the trial judge is


in the best position to make such factbound assessments." United

States v. Vizcarrondo-Casanova, 763 F.3d 89 , 94 (1st Cir. 2014)

(internal quotation marks omitted).

Here, the district court concluded that the "predominant

effect" of the challenged evidence "would be to demonstrate

knowledge or intent," and it found "little risk that the proffered

evidence would be likely to elicit a strong emotional response from

jurors and cause them to act irrationally based upon it." Order at

7. The court further noted that the evidence "might only

incidentally indicate a propensity to commit wrongs," and it

observed that any prejudice stemming from introduction of the

evidence "may be mediated with a jury instruction." Id.

The court was correct to conclude that the evidence of an

earlier bankruptcy violation would not engage the jurors' emotions

in an unsettling way. However, given the substantial similarity

between Astrid's prior conduct and the charged concealment, the

district court may have understated the risk of a propensity

inference linking the two bankruptcy cases. Yet, we have

recognized that "all prior bad act evidence involves some potential

for an improper propensity inference," Varoudakis, 233 F.3d at 122,

and we frequently have observed that, "[b]y design, all evidence is

meant to be prejudicial," DiRosa, 761 F.3d at 153 (alteration in

original) (internal quotation marks omitted). Admissibility thus

turns not on whether the evidence will harm the defendant, but on


whether it would provoke "an undue tendency to suggest decision on

an improper basis." Fed. R. Evid. 403 advisory committee's note

(emphasis added).

The evidence in this case unmistakably showed that Astrid

was a key player in Edgardo's bankruptcy proceedings and in most of

the allegedly fraudulent transactions charged in the indictment.

Hence, in all likelihood, the pivotal question for the jury in

deciding Astrid's guilt was whether she was an informed and willing

participant in Edgardo's endeavors. The evidence of Astrid's

conduct in her own bankruptcy was highly probative on that

question, reinforcing the circumstantial evidence of knowledge that

could be inferred from her conduct. In concluding that the

evidence was properly admissible, the district court did not

neglect the potential for unfair prejudice to Astrid. It took the

risk into account and was prepared to give a limiting instruction

to guard against the possibility of unfair prejudice.23

In these circumstances, we are satisfied that the

district court acted within its broad discretion when it concluded

that the probative value of the challenged evidence was not

"substantially outweighed by a danger of . . . unfair prejudice."

Fed. R. Evid. 403.

23 Astrid's counsel ultimately decided not to request such an instruction.


V. Edgardo and Astrid: The Guideline Loss Calculation

Both appellants argue that the district court erred in

finding them responsible for losses exceeding $1 million and, based

on that figure, imposing a sixteen-level enhancement in their base

offense levels. See U.S.S.G. § 2B1.1(b)(1)(I). Guideline section

2B1.1 provides for varying increases in the base offense level for

certain crimes, including fraud, depending on the amount of loss

caused by the offense. See id.; United States v. Appolon, 695 F.3d

44 , 66 (1st Cir. 2012). The appropriate amount ordinarily is "the

greater of actual loss or intended loss," U.S.S.G. § 2B1.1 cmt.

n.3(A), and the parties agree that in this instance "intended loss"

is the appropriate measure. We have described "'intended loss' in

these circumstances [a]s a term of art meaning the loss the

defendant reasonably expected to occur at the time he perpetrated

the fraud." United States v. Innarelli, 524 F.3d 286 , 290 (1st

Cir. 2008); see also Appolon, 695 F.3d at 67.

In calculating the intended loss, the district court

combined the $1.4 million sale price of Málaga #1 in 2008 -- minus

its outstanding mortgage (roughly $750,000) -- with the

approximately $750,000 in cash payments for the three properties

Edgardo purchased through IU in 2006 (Laguna Gardens V PHP, El

Convento, and Antonsanti). The sum, $1.4 million, fell within the

guidelines range for a sixteen-level enhancement (more than $1

million, but less than $2.5 million). We review de novo the method


chosen by the court to calculate loss, but we review only for clear

error "[t]he mathematical application of this methodology."

Appolon, 695 F.3d at 66.

Astrid's only argument, unsupported by any citations to

authority, is that she cannot be held responsible for the amounts

involved in the property transfers because she neither received nor

intended to receive any pecuniary gain from those transactions.

She relies solely on cases in which the enhancement was applied to

defendants who did in fact realize some economic benefit, but those

cases do not establish that a benefit is a required condition for

the enhancement. Indeed, the guidelines provision also applies to

crimes involving property damage or destruction, see U.S.S.G.

§ 2B1.1, where the defendant presumably would not benefit at all.

Moreover, an application note to the guideline directs the court to

"use the gain that resulted from the offense as an alternative

measure of loss only if there is a loss but it reasonably cannot be

determined." Id. § 2B1.1 cmt. n.3(B). Hence, there is no

requirement of personal gain as a condition of an enhancement under

§ 2B1.1(b)(1).

Edgardo argues that the district court used the wrong

value for Málaga #1, and he claims the correct amount of loss for

that property was the approximately $175,000 equity he held at the

time he sought bankruptcy protection in 2003. In addition, he

asserts that the cost of the three properties acquired in 2006


should not be part of the loss calculation, effectively reiterating

his contention that those purchases are irrelevant to this case

because they were funded with post-petition resources. Based on

his preferred calculation -- i.e., a total of $175,000 -- the loss

figure would trigger a ten-level increase in the base offense

level. See U.S.S.G. § 2B1.1(b)(1)(F) (more than $120,000, but less

than $200,000).

We can reject summarily Edgardo's assertion that the 2006

purchases should be excluded from the loss calculation, having

already rejected Edgardo's attempt to insulate those purchases from

criminal consequences based on his claim that they were purchased

with post-petition earnings. As we have found that concealing the

purchase of the three properties was properly charged as bankruptcy

fraud, it necessarily follows that the purchase prices may properly

be tallied for sentencing.

We also find no error in either the district court's

decision to set the loss amount as the combined values of the

concealed properties or its selection of the specific amount

attributable to Málaga #1. The approach itself, focusing on the

properties hidden from the bankruptcy estate, is a sensible way to

appraise the harm attributable to Edgardo's unlawful concealment.

Málaga #1 should have been in the bankruptcy estate from the

outset, with its value available to pay creditors, and the use of

IU to acquire the other properties provides a basis for also


treating their values as amounts Edgardo intended to deny

creditors. In settling on the $1.4 million sale price for Málaga

#1 (less the mortgage), the court chose the middle of three

possible valuations; in addition to Edgardo's proposed $175,000,

the court noted that Edgardo had listed the property at $1.8

million in the amended schedules he filed pursuant to the

settlement agreement. The court's choice was both pragmatic and

fair. The price at which the trustee sold the property provided

objective evidence of value, and the court reasonably could presume

that, when Edgardo concealed the property in 2003, he expected the

oceanfront property to appreciate in value. See generally Appolon,

695 F.3d at 68-69 (noting that district court, in calculating loss,

could properly rely on defendants' anticipation of changing real

estate prices). There was no clear error in the court's judgment.

VI. Edgardo: Money Laundering Sentence

The district court sentenced Edgardo to a sixty-month

term of imprisonment on Counts One through Six -- the concealment

charges -- and to a concurrent seventy-two month term for the Count

Seven money laundering offense related to the sham sale of Málaga

#1. Edgardo argues that the court improperly sentenced him on the

money laundering count to a term beyond the five-year statutory

maximum applicable to the underlying concealment offenses. He

claims the court should have treated the money laundering as part

of the concealment and, hence, not subject to greater punishment.


We see no basis for overturning the sentence imposed on

Count Seven. Most importantly, the district court did not err in

treating Edgardo's money laundering as distinct from his actions to

conceal his ownership of Málaga #1. After orchestrating the

transfer of the property to Santiago and Lebrón, Edgardo arranged

the elaborate conversion of the three checks that comprised the

sales proceeds into eight checks that contained false references to

the payees' connections with IU. By disguising the proceeds of the

sale with cashier's checks made out to recipients who would never

receive the funds, Edgardo constructed a second level of

concealment separate from the simple property transfer. Hence, he

was properly subjected to punishment for the money laundering

itself, and his sentence was therefore not limited to the five-year

statutory maximum for the underlying bankruptcy fraud. See 18

U.S.C. § 1956(a)(1)(B) (specifying a statutory maximum of twenty

years' imprisonment for money laundering); cf. United States v.

Santos, 553 U.S. 507 (2008) (concluding that certain financial

transactions may not be separately punishable as money laundering),

superseded by statute, Fraud Enforcement and Recovery Act of 2009,

Pub. L. No. 111-21 § 2, 123 Stat. 1617, as recognized in United

States v. Lyons, 740 F.3d 702 , 727 (1st Cir. 2014).24

24 We note that Edgardo does not argue that his conviction for money laundering is unlawful based on the merger of the charged money laundering acts with the underlying bankruptcy fraud. See generally United States v. Grasso, 724 F.3d 1077 , 1090-96 (9th Cir. 2013) (discussing the Supreme Court's holding in Santos that


Neither of the two cases on which Edgardo relies supports

a different result. In United States v. Woods, 159 F.3d 1132 (8th

Cir. 1998), the court found no abuse of discretion in the district

court's decision to depart downward from the money laundering

guidelines where the underlying offense was bankruptcy fraud. See

id. at 1136. That decision does not say, however, that a district

court must reduce a sentence in such circumstances. In the other

case, United States v. Smith, 186 F.3d 290 (3d Cir. 1999),

involving fraud in the operation of a lottery, the court held that

a sentence imposed under the money laundering guideline was

disproportionately harsh. Id. at 300. Not only have basic

guidelines principles changed since Smith, see United States v.

Chilingirian, 280 F.3d 704 , 713-14 (6th Cir. 2002),25 but that case

also is distinguishable because the challenged money-laundering

guideline there produced a much harsher sentence than otherwise

would have applied, see Smith, 186 F.3d at 297 (noting the

fourteen-level difference in base offense level). Here, the money-

certain types of unlawful financial transactions may not properly be punished independently as money laundering); id. at 1097-1104 (Berzon, J., concurring in part and dissenting in part). In so noting, we do not suggest that Edgardo has a plausible argument under Santos. 25 The Sixth Circuit noted that "the Smith approach is no longer relevant" after an amendment to the Guidelines Manual removed the sentencing judge's discretion to pick "'the guideline section most applicable to the nature of the offense conduct.'" Chilingirian, 280 F.3d at 714 (quoting U.S.S.G. app. A (1999)); see also U.S.S.G. app. A (2000); id. app. A (2012).


laundering guideline on which the district court relied prescribes

only a two-level increase in the base offense level. See U.S.S.G.

§ 2S1.1(a)(1), (b)(2)(B).

In sum, we find no error in the sentence imposed on the

money-laundering count.

VII. Edgardo: Procedural and Substantive Sentencing Error

Edgardo claims that his seventy-two-month sentence was

procedurally flawed because the district court failed to properly

weigh mitigating factors, and he also challenges that term of

imprisonment -- twice the length of his sister's -- as

unjustifiably harsh. We employ the deferential abuse-of-discretion

standard in evaluating both the court's balancing of the sentencing

factors and the substantive reasonableness of the district court's

sentencing judgment. United States v. Suárez-González, 760 F.3d

96 , 101 (1st Cir. 2014).

A. Procedural Error

Edgardo argues that the court erred by giving

insufficient weight to the many reasons he offered for leniency,

including his mother's poor health and her need for help, his eight

employees' dependence on their salaries, and his ex-wife's and

minor children's reliance on his support. He also cites the sixty-

five letters submitted on his behalf by friends, neighbors, family

members, and clients describing him as generous, hard-working, and

responsible. With respect to the criminal activity itself, he


protests that the court unfairly emphasized his initial actions

concealing property and failed to credit his voluntary

participation in the settlement of the adversary proceeding and his

payments to creditors with non-estate funds.

The district court has broad discretion to balance the

pertinent sentencing factors, see 18 U.S.C. § 3553,26 and the court

is not required to give every factor equal weight. See Suárez-

González, 760 F.3d at 101. Edgardo does not argue that the

district court "overlooked or misapprehended relevant sentencing

factors but, rather, [complains] that the court gave more weight to

factors that [he] regarded as unimportant and less weight to

factors that [he] regarded as salient." Id. at 102. However,

making a judgment about the proper balance of factors "is precisely

the function that a sentencing court is expected to perform." Id.

Indeed, the district court explained that its choice of

sentence took into account the rationales Edgardo offered for a

lenient sentence -- including his mother's and children's needs,

the small impact of his fraud on creditors, and the letters of

recommendation -- along with the countervailing need to "convey the

26 Under § 3553(a), a sentencing court must "impose a sentence sufficient, but not greater than necessary," to achieve the purposes of sentencing. 18 U.S.C. § 3553(a). The factors courts should consider in determining the appropriate sentence include the nature and circumstances of the offense, the defendant's history and characteristics, and the need for the sentence to promote respect for the law and provide just punishment for the crime. Id. § 3553(a)(1), (2).


message that the laws are to be obeyed." The court stated that,

notwithstanding the mitigating factors, it "cannot overlook the

seriousness of the offense, the actions of this defendant," and the

apparent absence of "clear repentance or remorse" for criminal

conduct that Edgardo undertook knowingly and with deliberation.

The court's moderate approach is reflected in its decision to

impose a sentence below the bottom of the guideline range of 87 to

108 months.27

In sum, the district court met its obligation to weigh

the competing sentencing considerations, and it did not commit

procedural error when it rejected Edgardo's differing assessment of

the balance. See Suárez-González, 760 F.3d at 101-02.

B. Substantive Error

Edgardo also attacks his sentence as substantively

unreasonable, arguing that his circumstances justify a downward

departure to a sentence of probation with home confinement, yet the

court imposed a term of imprisonment twice as long as his sister's.

In so arguing, Edgardo depicts Astrid as the "mastermind" of the

bankruptcy fraud, pointing to her legal experience and prior

similar conduct in her own bankruptcy.

27 The government had requested a sentence of 108 months, describing that punishment as "conservative given the egregiousness of this case, the way in which he laundered the funds, used the family members and appropriated identities for the purpose of defrauding the Federal Court."


As explained in the preceding section, however, the

district court took a measured approach to the pertinent sentencing

factors, and its "choice of emphasis . . . is not a basis for a

founded claim of sentencing error." United States v. Ramos, 763

F.3d 45 , 58 (1st Cir. 2014) (omission in original) (internal

quotation marks omitted). Significantly, the court sided with

Astrid in assessing the siblings' efforts to lay primary blame on

the other. Pointing to Astrid's testimony that Edgardo was "the

instigator [and] master mind," the court noted that she "didn't

benefit or receive extra money from this, but this was all done for

[Edgardo's] financial gain." The court further observed that

Edgardo was not only a widely known plastic surgeon, but he also

had earned a JD and thus "knew about the law." Moreover, Edgardo

alone was found guilty of money-laundering, which accounted for

part of the differential in the siblings' sentences.

As we have noted on multiple occasions, "[t]he linchpin

of a reasonable sentence is a plausible sentencing rationale and a

defensible result." Ramos, 763 F.3d at 58 (internal quotation

marks omitted). The district court provided both here. We

therefore reject Edgardo's claim that his sentence was

substantively unreasonable.



For the reasons that we have explained, each of

appellants' claims is unavailing. We therefore affirm their

convictions and sentences.

So ordered.


Back to top