United States Court of Appeals For the First Circuit Nos. 13-2343 13-2344 13-2350
UNITED STATES OF AMERICA,
CARMEN SOTO; PEDRO SOTO; and STEVEN SOTO,
APPEALS FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS [Hon. Mark L. Wolf, U.S. District Judge]
Before Torruella, Thompson, and Kayatta, Circuit Judges.
Matthew A. Kamholtz, with whom Feinberg & Kamholtz, was on brief, for appellant Carmen Soto. Steven A. Feldman, with whom Feldman and Feldman, was on brief, for appellant Pedro Soto. Benjamin L. Falkner, with whom Krasnoo*Klehm LLP, was on brief, for appellant Steven Soto. John M. Pellettieri, Attorney, Appellate Section, Criminal Division, United States Department of Justice, with whom Leslie R. Caldwell, Assistant Attorney General, Sung-Hee Suh, Deputy Assistant Attorney General, Carmen M. Ortiz, United States Attorney, John A. Capin, Assistant United States Attorney, and Brian A. Pérez-Daple, Assistant United States Attorney, were on brief, for appellee.
August 25, 2015
TORRUELLA, Circuit Judge. The Soto family -- Steven and
his parents Carmen and Pedro1 -- operated a real estate business in
Lynn, Massachusetts, which they used to orchestrate several
fraudulent real estate transactions in late 2006 and early 2007.
As a result of these transactions, the Sotos were each convicted of
multiple counts of mail fraud; Steven and Pedro were also convicted
of multiple counts of aggravated identity theft. Defendants now
appeal their convictions, alleging a host of errors before the
district court. In addition, Carmen challenges the portion of her
sentence requiring her to pay almost $800,000 in restitution. For
the reasons detailed below, we reject these challenges and affirm.
A. The Fraudulent Transactions
The Sotos used Paradise Real Estate, the real estate
brokerage firm they legitimately owned and operated, to conduct a
number of fraudulent real estate transactions. Four separate
transactions underlie the charges in the indictment, but they share
a common theme. In each transaction, at least one member of the
Soto Family used the identity of a third-party individual to
consummate the "sale" of real estate. To finance the transaction,
a loan would be obtained based on an application containing
1 Because Steven, Carmen, and Pedro Soto all have the same last name, we will refer to them individually by their first name only. When referring to them collectively, we will use either "the Sotos," "the Soto Family," or "Defendants."
knowingly false information. Not surprisingly, the loans were
often not repaid, resulting in the properties entering foreclosure
soon after the transaction closed.
In addition to the Sotos, three individuals played
important roles in the scheme -- some without their knowledge.
First was Gregory Bradley. Bradley, who was a friend of Steven's,
often played the role of buyer despite his being in prison from
August 2006 through September 2008. To overcome this obstacle,
Steven approached the second repeat player, Kim Litwin. Litwin is
Bradley's aunt, and, after consulting with Bradley, she agreed to
help Steven use Bradley's identity. Finally, we have Milagros
Espinal, a notary public. Without Espinal's knowledge, Steven
obtained a duplicate notary kit in her name and used the kit to
make documents appear notarized, and thus legitimate.
With the key players identified, we can now describe the
four real estate transactions at issue.
1. 242 Main Street
The first relevant transaction took place in Fall 2006
and involved 242 Main Street in Springfield, Massachusetts -- a
property owned by Pedro. Steven arranged for Bradley, through
Litwin, to purchase the property from Pedro for $182,000. Someone
posing as Bradley -- the record is unclear as to who -- spoke to a
mortgage loan officer by phone and told the loan officer that
Bradley was a store manager at Drestars barbershop -- a barbershop
opened by Steven in Lynn, Massachusetts. This, of course, was not
true as Bradley was incarcerated at the time. The loan officer was
also told that Bradley possessed $14,191 in liquid assets. This,
too, was false. The $14,191 was actually the amount in Litwin's
bank account; on Steven's instructions, she had recently added
Bradley to the account to make it appear as though he had
In November 2006, Steven and Litwin attended the closing
for the property. Litwin produced a forged document drafted by
Steven and "notarized" with the false Espinal notary kit to claim
power of attorney to conduct the transaction on behalf of Bradley.
Using the power of attorney, Litwin signed documents confirming the
false information about Bradley's employment, assets, and intent to
live in the property as his primary residence.
2. 55 Lawrence Street
The next transaction involved 55 Lawrence Street, a
three-family home in Salem, Massachusetts. In the fall of 2006,
Beatrice Jimma Shea, the owner of the property, asked Pedro -- who
had previously been successful in helping Shea rent a unit in the
home -- to help her either find a tenant for one of the units or
sell the property. Pedro arranged for Shea to enter into an
agreement with Bradley whereby Bradley would lease 55 Lawrence
Street and have the option of purchasing the property and
converting it into condominiums. Shortly thereafter, Steven,
posing as Bradley, attempted to convince Shea to sell the property
to him so he could turn around and sell the units as condominiums.
When Shea refused, Steven forged her signature on numerous
documents, thus giving Bradley power of attorney to conduct the
transactions. To make the documents appear legitimate, Steven used
the fake Espinal notary kit.
Using these forged documents, the Sotos "sold" each of
the three units of 55 Lawrence Street to straw buyers. Pedro sold
Unit 1 to Pamela Landess in January 2007 after agreeing to pay her
$8,000 for her participation. At closing, Steven -- still posing
as Bradley -- used the forged power of attorney to sign Bradley's
name as attorney in fact for Shea, the seller.
Carmen, meanwhile, paid Medelin de la Cruz $10,000 for
her assistance in purchasing Units 2 and 3 for $225,000 and
$230,000, respectively. In preparation for the sales, Carmen and
Steven submitted de la Cruz's loan applications which substantially
overstated de la Cruz's salary, failed to disclose de la Cruz's
prior mortgages, and falsely represented that de la Cruz intended
to make each unit her primary residence. The loans were approved,
and the closings took place in January and February of 2007. Like
with Unit 1, Steven attended the Unit 2 closing as Bradley and used
the forged power of attorney to sign Bradley's name as attorney in
fact for Shea, the seller. As for Unit 3, a different approach was
taken. Prior to closing, Steven used the fake Espinal notary kit
to transfer title from Shea to Bradley. Thus, Litwin was able to
attend the closing for Unit 3 as attorney in fact for Bradley, the
3. 399 Orange Street
In January 2007, Steven and Pedro arranged for Bradley to
purchase 399 Orange Street in Springfield, Massachusetts. On the
loan application, Pedro provided his phone number as the contact
number for Bradley. When the loan officer -- somewhat skeptical of
the application -- called the number two days before the closing,
someone purporting to be Bradley answered the phone and verified
false information. At the closing itself, Steven signed Bradley's
name on the loan documents containing the same false information
that had been verified two days earlier. This included, for
example, that Bradley earned $11,500 each month from his employment
at Steven's barbershop and from his ownership of Aggressive
Construction -- a fake company formed by Steven in Bradley's name.
Steven also verified the accuracy of the loan application's
liability section, which omitted any mention of Bradley's mortgage
for 242 Main Street.
4. 21 Dudley Street
Finally, in December 2006/January 2007, Karen and
Christopher Faison, the owners of 21 Dudley Street in Haverhill,
Massachusetts, agreed to allow the Sotos to convert their property
into three condominiums, to sell the units, and to keep any
proceeds above the $365,000 they originally paid for the property.
The sale of these units began as legitimate sales: Carmen's cousin
and her husband were to purchase the first unit and Ángel
Rodríguez, Carmen's longtime family friend, intended to purchase
the other two units as investments. Prior to the closings in May
2007, however, Rodríguez changed his mind when he realized that the
mortgage payments would exceed the rent rolls.
Rodríguez thus informed Carmen that he did not want to go
through with the purchases, but Carmen proceeded anyway. She
enlisted Yéssica Amaro -- Rodríguez's stepsister and Steven's
girlfriend -- to execute a forged power of attorney and to attend
the closings on Rodríguez's behalf.2 With the power of attorney in
hand, Amaro completed the transactions. As a result, absent his
knowledge and despite his intentions to the contrary, Rodríguez
purchased both units and obtained two loans to do so.
B. The Trial Proceedings
In connection with these four fraudulent real estate
transactions, the Sotos were charged in a thirteen-count indictment
on September 8, 2011. Steven was charged with seven counts of mail
fraud (Counts One, Four, Six, Seven, Ten, Twelve, and Thirteen) and
six counts of aggravated identity theft (Counts Two, Three, Five,
Eight, Nine, and Eleven); Pedro was charged with five counts of
2 Unlike the other transactions, the fake Espinal notary kit was not used to notarize Amaro's power of attorney. Instead, Carmen had her cousin, Yaimet Vallejo, notarize the document.
mail fraud (Counts One, Four, Six, Seven, Ten) and three counts of
aggravated identity theft (Counts Three, Five, and Eleven); and
Carmen was charged with four counts of mail fraud (Counts Six,
Seven, Twelve, and Thirteen).
After a fourteen-day trial -- the relevant details of
which are addressed below -- Pedro and Carmen were convicted on all
counts, while Steven was convicted on every count except the two
mail fraud counts related to 21 Dudley Street (Counts Twelve and
Thirteen). The district court sentenced Steven to sixty-five
months of imprisonment followed by four years of supervised release
and ordered him to pay $1,055,474 in restitution. Pedro,
meanwhile, was sentenced to forty-eight months of imprisonment,
three years of supervised release, and ordered to pay $1,055,474 in
restitution. Finally, the district court sentenced Carmen to one
year and one day of imprisonment (six months of which were served
in home confinement), three years of supervised release, and an
order to pay $792,559 in restitution. All three Sotos timely
A. Motion to Suppress
1. Relevant Background
While law enforcement did not become aware of the
fraudulent real estate transactions until 2007, Steven was on their
radar much earlier in relation to a number of unrelated fraudulent
schemes. First, on March 16, 2006, Eastern Bank issued a fraud
alert after Steven and his brother, Pedro, Jr., negotiated
Then, a couple weeks later, on April 3, 2006, Motorcycles
of Manchester reported to New Hampshire authorities that they had
sold two motorcycles to a male and female using a fraudulent
cashier's check issued by St. Jean's Credit Union. An
investigation revealed that Steven had recently opened an account
at the credit union and purchased three official bank checks with
information similar to the counterfeit check. When authorities
showed a Motorcycles of Manchester employee a photo array, she
stated that two people "looked familiar": Steven and Amaro.
A similar incident occurred at North Reading Motor Sports
Inc. On April 12, 2006, the company alerted authorities that on or
about April 6, 2006, St. Jean's Credit Union had issued a check to
Steven in the amount of $5.00. However, the check had been altered
to read $20,350.00 and had been used to purchase two motorcycles
from North Reading Motor Sports. In connection with the purchase,
Steven had submitted a credit application listing Paradise Real
Estate as his employer. A third incident with comparable details
occurred at Kelly Motor Sports in Danvers, Massachusetts, as well.
On April 28, 2006, after learning that Steven was the
affiant on documents submitted to the Massachusetts Registry of
Motor Vehicles, Massachusetts State Police obtained a warrant to
arrest Steven, who lived with his parents at 56 Lawrence Road in
Lynn, Massachusetts ("56 Lawrence Road" or the "Soto Family
Residence"). When law enforcement went to arrest Steven, they were
unable to locate him. However, one of the officers executing the
warrant entered a fenced-in area of the property, used a flashlight
to look into a garage window, and observed a motorcycle with a
license plate matching one of the motorcycles that had been
purchased fraudulently and reported stolen. Based primarily on
this discovery, the police obtained a search warrant for 56
Lawrence Road. The search of the house and a desktop computer
found inside the house uncovered three stolen motorcycles and a
significant number of documents, many related to the use of
counterfeit checks to purchase the motorcycles. For reasons
unclear from the record, the authorities never arrested Steven,
instead continuing their investigation.
Almost one year later, on February 2, 2007, Steven
returned to Eastern Bank, this time pretending to be Bradley. He
withdrew $9,500 from an account he had opened in December 2006
under Bradley's name without incident, but due to his odd behavior,
the bank teller became suspicious and alerted Eastern Bank's fraud
investigator. The investigator, recognizing Steven's picture from
the March 2006 alert, issued another security alert. Later that
same day, Steven returned to Eastern Bank and, using a driver's
license and credit card issued in Bradley's name, tried to cash a
check paid to Bradley. The bank quickly notified the police.
When the officers arrived and questioned Steven, he told
them that Bradley was his friend and business partner and that
because Bradley was in jail, Bradley had given Steven power of
attorney. In support of this claim, Steven showed the officers
documentation notarized by Espinal. The bank teller, however,
informed the police that Steven never claimed power of attorney but
rather passed himself off as Bradley. Given this information, the
officers arrested Steven.
As they escorted Steven from the bank, the police saw
Steven gesture to a female sitting inside a grey Chrysler. A short
while later, at the police station, the officers overheard Steven's
phone call where he told the listener "[d]on't show up at the
police station with the Chrysler" and "[c]all Jeff, he'll know what
to do with the cars." Despite this warning, Amaro and Litwin soon
arrived at the police station in the grey Chrysler. The officers,
suspicious of both the gesture in the bank parking lot and Steven's
subsequent phone call, checked the registration for the Chrysler.
They discovered that it had been purchased just a few days earlier
-- on January 29, 2007 -- and was registered to Bradley. Given
that Bradley was incarcerated at the time and that Steven had just
attempted to pass himself off as Bradley at Eastern Bank, the
officers suspected that this registration was also fraudulent, so
when Amaro and Litwin confirmed that the Chrysler belonged to
Bradley, the police seized it.
An inventory search of the Chrysler uncovered documents
related to three vehicles purchased in Bradley's name in December
2006 and January 2007, a Gateway laptop computer, and a document
seeming to give Steven power of attorney for Bradley. Subsequent
investigation by the police discovered that the power of attorney
was forged and that Steven had claimed to be Bradley when the
Chrysler was purchased at the dealership.
On March 30, 2007, United States Secret Service Special
Agent Trent Everett applied for a search warrant for the Gateway
laptop. The affidavit in support of the warrant discussed the
investigation of Steven prior to the 2006 search of the Soto Family
Residence, the information obtained in connection with that search,
the events surrounding Steven's February 2007 arrest, the
investigation following the arrest, and the inventory search of the
Chrysler. As to the 2006 search of the Soto Family Residence, the
affidavit stated as follows:
6. Later on April 28, 2006, I accompanied local and State Police officers to execute the arrest warrants for Steven and Pedro Soto[, Jr.]. Upon arrival at 56 Lawrence Road, an officer saw a motorcycle bearing Massachusetts license plate number SZ6659 through a garage window. Officers immediately learned that the motorcycle had been reported stolen on April 1, 2006 in Danvers, Massachusetts. After observing that nobody appeared to be present at 56 Lawrence Road, officers set up a surveillance of the
residence. Officers also obtained, from the Lynn District Court, a warrant to search 56 Lawrence Road.
7. Also on April 28, 2006, I participated, along with officers of the Lyn[n] Police Department, North Reading Police Department, and Massachusetts State Police, in executing the search warrant at 56 Lawrence Road in Lynn, Massachusetts. Among the items seized during the search warrant were three stolen motorcycles, a Dell desk top computer, official bank checks, Massachusetts driver's licenses in various names, fraudulent documents purporting to have been issued by the Massachusetts Registry of Motor Vehicles ("RMV"), and counterfeit bank documents. Also seized was [a] handwritten document, which appeared to [be] Steven Soto's first-person account of his participation in various criminal activities.
8. On May 24, 2006, the Lynn District Court issued a warrant to search the desk top computer seized during the search of 56 Lawrence Road. A forensics examination of that computer revealed images of checks, driver's licenses, a typed version of the first-person account of Steven Soto's participation in various criminal activities . . . , Massachusetts RMV documents, and fraudulent lien releases for vehicles. . . .
9. The names on the driver's licenses found scanned into the computer seized at 56 Lawrence Road were Christine Escribano . . . , Pedro Soto . . . , Pedro M. Soto . . . and Geovany Anthony Jiménez . . . .
10. It is apparent that the computer seized at 56 Lawrence Road was used to generate documents used in fraudulent transactions such as the one described above. Images of bank checks located on that computer match bank checks found during the search [of] 56 Lawrence Road. They also match counterfeit checks that have been used to purchase cars and motorcycles. Other document[s] apparently
generated by using that computer include fictitious employment pay stubs, fraudulent lien releases, fraudulent driver's licenses, and fraudulent titles of ownership.
Based on this information and the evidence gathered after Steven's
February 2007 arrest, the warrant was issued, and the search of the
laptop uncovered W-2 forms for Carmen and Bradley, pay stubs
showing payments from Paradise Real Estate to Bradley, and a cable
bill in Bradley's name.
On May 16, 2007, Agent Everett applied for a warrant to
search the Soto Family Residence at 56 Lawrence Road. The
affidavit in support of this warrant included the same information
as the warrant for the Gateway laptop but also contained
information that law enforcement had subsequently discovered. This
consisted of: (1) the contents of the Gateway laptop; (2) a website
advertising an unauthorized raffle for 56 Lawrence Road "mortgage
free"; (3) that Steven and Pedro had used Bradley's identity to buy
real estate such as 55 Lawrence Street and 399 Orange Street; and
(4) recorded phone conversations in February and March 2007 between
Steven (while incarcerated) and his parents at 56 Lawrence Road
which discussed criminal activity. The magistrate judge authorized
the search warrant for the Soto Family Residence, and the
subsequent search uncovered additional incriminating pieces of
evidence for all three members of the Soto Family.3
3 The parties do not detail what exactly was discovered, but Steven alleges that forty-nine of the exhibits introduced at trial
Prior to trial, Defendants filed a motion to suppress the
evidence seized from the Gateway laptop and from the 2007 search of
56 Lawrence Road. They argued that in a separate proceeding
charging Steven with fraud and identity theft in connection with
the above-described motorcycles and automobiles, the district court
had suppressed the evidence obtained during the April 2006 search
of the Soto Family Residence because it concluded that the officer
violated Steven's Fourth Amendment rights when he entered the
curtilage and observed the motorcycle in the garage, and without
that knowledge, there was no probable cause to search the
residence. According to the Sotos, this suppression ruling was
entitled to collateral estoppel in the present case as well.
Therefore, the inclusion of the fruits of that search in the
affidavits supporting the warrants for the subsequent searches of
the laptop and Soto Family Residence unconstitutionally tainted
them, requiring suppression of that evidence as well.
The district court held an evidentiary hearing on the
motion on January 11, 2013, during which Agent Everett, the
affiant, testified. Agent Everett conceded that the April 2006
search "g[a]ve us a lot of information that we went forward on,"
but also testified that even without that information, given the
wealth of other evidence and information the officers had, they
were seized during the search.
still would have obtained search warrants for the laptop and
On January 14, 2013, the court orally announced its
ruling. Though it agreed that the Sotos were entitled to
collateral estoppel as to the suppression of the April 2006 search,
the court denied the motion to suppress, finding it "not
meritorious" due to the independent source doctrine. As to the
laptop, the court explained that
[t]he law enforcement officers were not prompted to seek a warrant because of the information derived from the unlawful search of Lawrence Street in 2006[;] rather they would have seized the Chrysler and obtained a warrant for the search of the computer without that information.
Law enforcement had substantial reason to believe that Steven Soto was involved in fraud before April 28, 2006. Much of that information is in the April 28, 2006 search warrant . . . . Amaro was described in the affidavit in support of that warrant as a person in whose name fraudulently-obtained vehicles were put. . . .
In addition, without Paragraphs 6 to 10, which include suppressed information derived from the 2006 search, um, the affidavit for the laptop, viewed objectively, contains ample information to establish probable cause to search the computer. A reasonable magistrate would have issued the warrant even if it did not contain any of the unlawfully-obtained information that was included in the affidavit.
Its explanation as to the 2007 search of 56 Lawrence Road was
Once again I find the government has proven that law enforcement was not prompted to get the 2007 warrant for Lawrence Road by the fruits of the unlawful 2006 search. It would have sought that warrant without information derived from the 2006 search. Among other things, law enforcement knew that the three defendants lived at that residence. The First Circuit has recognized that criminals often keep incriminating items in their residences. . . . However, there was far more than that expert knowledge on the part of Everett in this case.
For example, as recited in his affidavit, 56 Lawrence Road had been offered as a prize in an unlawful raffle . . . . In addition, Steven Soto's tape-recorded telephone calls from the Essex County jail reflected that he was discussing criminal activity with his parents while they were at Lawrence Road, indicating that they knew of his criminal activity and that that would be a safe haven or a safer haven for keeping evidence of it. In addition, without the information derived from the unlawful search in 2006, there was ample evidence establishing probable cause to search Lawrence Street.
2. The Motion Was Properly Denied
Steven argues that the district court misapplied the
independent source doctrine and thus erroneously denied the Sotos'
joint motion to suppress the evidence seized from the 2007 searches
of the grey Chrysler and Soto Family residence. We disagree.
In Murray v. United States, the Supreme Court explained
that the Fourth Amendment's "exclusionary rule . . . prohibits the
introduction of derivative evidence . . . that is the product of
the primary evidence, or that is otherwise acquired as an indirect
result of the unlawful search, up to the point at which the
connection with the unlawful search becomes so attentuated [sic] as
to dissipate the taint." 487 U.S. 533 , 536-37 (1988) (internal
quotation marks omitted). However, the point of the rule is "in
deterring unlawful police conduct" and "putting the police in the
same, not a worse, position that they would have been in if no
police error or misconduct had occurred." Id. at 537 (emphasis in
original) (quoting Nix v. Williams, 467 U.S. 431 , 443 (1984)). The
exclusionary rule is not meant to be a windfall for a defendant.
Accordingly, "information which is received through an illegal
source is considered to be cleanly obtained when it arrives through
an independent source." Id. at 538-39 (quoting United States v.
Silvestri, 787 F.2d 736 , 739 (1st Cir. 1986)); see also
Silverthorne Lumber Co. v. United States, 251 U.S. 385 , 392 (1920)
("Of course this does not mean that the facts thus [illegally]
obtained become sacred and inaccessible. If knowledge of them is
gained from an independent source they may be proved like any
others . . . .").
This independent source doctrine applies to both the
"rediscovery of intangible evidence already discovered" and the
"reseizure of tangible evidence already seized." Murray, 487 U.S.
at 542; see also id. ("So long as a later, lawful seizure is
genuinely independent of an earlier, tainted one . . . there is no
reason why the independent source doctrine should not apply."). In
the case of a search warrant premised on an application containing
illegally obtained evidence -- the issue before the Murray Court
and before us today -- the fruits of that search would be
admissible through the independent source doctrine unless (1) "the
agents' decision to seek the warrant was prompted by what they had
seen during" the initial illegal search or (2) "information
obtained during that [illegal search] was presented to the
Magistrate and affected his decision to issue the warrant." Id.
We had the opportunity to interpret Murray in United
States v. Dessesaure, 429 F.3d 359 , 365 (1st Cir. 2005). After
detailing Murray and examining its place in Supreme Court Fourth
Amendment jurisprudence, we looked at the two situations laid out
in Murray as not justifying the use of the independent source
doctrine and concluded that they formed a two-prong test. As to
the first prong -- that "the agents' decision to seek the warrant
was [not] prompted by what they had seen during their initial
entry" -- we explained that this was a subjective analysis: "would
these particular police officers have sought the warrant even if
they had not known, as a result of the illegal search," that
relevant evidence was present in the apartment. Dessesaure, 429
F.3d at 369. We cautioned, however, that "it should not be proven
by purely subjective means." Id. To the contrary, "[i]n making
the factual determination as to the police officers' intent, the
district court is not bound by after-the-fact assurances of their
intent, but instead must assess the totality of the attendant
circumstances to ascertain whether those assurances appear
As to the second prong -- whether such information
"affected [the Magistrate's] decision to issue the warrant" -- we
acknowledged a seeming tension with Franks v. Delaware, 438 U.S.
154 (1978), but ultimately held that
the Court in Murray did not intend to add anything to the pre-existing Franks approach to evaluating warrant applications containing tainted information . . . . Thus, when faced with a warrant containing information obtained pursuant to an illegal search, a reviewing court must excise the offending information and evaluate whether what remains is sufficient to establish probable cause.
Dessesaure, 429 F.3d at 367.
Steven contends that our determination in Dessesaure that
the second Murray factor is synonymous with a Franks analysis
directly contradicts Murray's plain language, and thus cannot
stand. This argument is easily dispensed with. "We have held,
time and again, that in a multi-panel circuit, prior panel
decisions are binding upon newly constituted panels in the absence
of supervening authority [such as a new Supreme Court opinion or an
en banc decision] sufficient to warrant disregard of established
precedent." Muskat v. United States, 554 F.3d 183 , 189 (1st Cir.
2009) (quoting United States v. Wogan, 938 F.2d 1446 , 1449 (1st
Cir. 1991)). Steven points to no recent Supreme Court case or en
banc opinion questioning Dessesaure, and thus it is binding.4
Steven also argues that, even if Dessesaure is correct,
the district court misapplied it. Our review of the district
court's decision is bifurcated: its determination on prong one --
whether the agents' decision to seek the warrant was prompted by
the initial illegal search -- is a factual finding subject to clear
error review while its prong two determination -- whether the
information obtained during the illegal search affected the
magistrate's decision -- is a legal conclusion reviewed de novo.
United States v. Siciliano, 578 F.3d 61 , 69 (1st Cir. 2009);
Dessesaure, 429 F.3d at 365; United States v. Weidul, 325 F.3d 50 ,
51 (1st Cir. 2003).
Turning to prong one, we find no clear error with the
district court's conclusions. Before the illegal April 2006
4 We note, however, that even if we were able to revisit Dessesaure, such a revisiting would begin with the observation that the Second, Third, Fourth, Fifth, Sixth, Seventh, Eighth, and Eleventh Circuits have all interpreted Murray the same way, and for what it's worth, the Supreme Court has denied petitions for certiorari in many of those cases. See United States v. Swope, 542 F.3d 609 , 614 (8th Cir. 2008), cert. denied, 555 U.S. 1145 (2009); United States v. Jenkins, 396 F.3d 751 , 760 (6th Cir. 2005), cert. denied, 546 U.S. 813 ; United States v. Davis, 313 F.3d 1300 , 1304 (11th Cir. 2002), cert. denied, 540 U.S. 827 (2003); United States v. Markling, 7 F.3d 1309 , 1316 (7th Cir. 1993); United States v. Johnson, 994 F.2d 980 , 987 (2d Cir. 1993), cert. denied, 510 U.S. 959 ; United States v. Restrepo, 966 F.2d 964 , 968-70 (5th Cir. 1992), cert. denied sub nom Pulido v. United States, 506 U.S. 1049 (1993); United States v. Herrold, 962 F.2d 1131 , 1141 (3d Cir. 1992), cert denied, 506 U.S. 958 ; United States v. Gillenwaters, 890 F.2d 679 , 681-82 (4th Cir. 1989).
search, law enforcement officials were already investigating Steven
for fraud and identity theft. After being alerted by Eastern Bank
in 2007 that Steven was once again trying to pass counterfeit
checks, they arrested Steven and escorted him off the premises.
While doing so, they observed Steven signal to a woman in a grey
Chrysler and then later overheard Steven on the phone telling the
listener not to bring the Chrysler to the police station. Thus, it
is not at all surprising that when the Chrysler nevertheless showed
up at the police station, the officers wanted to see what was
inside. After validly seizing the Chrysler and conducting an
inventory search, the officers found a power of attorney later
determined to be forged, documentation that the vehicles were
registered in Bradley's name (also later determined to be
fraudulent), and the Gateway laptop. With these forged documents
located in close proximity to the laptop, and contained in a
vehicle Steven did not want brought to the station, there is little
doubt that any reasonable officer would have believed the laptop
was involved in the fraud and would have wanted to search it. We
thus agree with the district court's conclusion that Everett's
decision to obtain the search warrant was not prompted by the 2006
search, and therefore there is no clear error.
We reach the same conclusion regarding the 2007 search of
56 Lawrence Road. The district court believed Agent Everett's
testimony that he would have wanted to search the residence even
without the information learned in the 2006 search: (1) because
there was ample evidence that Steven was engaged in fraud and
identity theft; (2) because of his belief that those engaging in
fraud often keep evidence of the fraudulent activity in their home;
(3) because of the unauthorized "raffle" offering the Soto Family
Residence as a "mortgage free" prize; and (4) because of the jail-
house call between Steven and his parents openly discussing the
fraud and thus suggesting that they, too, were either involved in
or aware of the fraud and would thus likely provide a safe haven
for evidence. Though this rationale is not as convincing as the
rationale for obtaining a warrant for the laptop, it was not
clearly erroneous for the district court to conclude as it did that
Agent Everett would have still sought the search warrant for 56
Lawrence Road without the evidence seized during the 2006 search.
Steven counters that the district court failed to take
into account all of the new leads and suspects uncovered during the
2006 search, which he claims "catapulted the investigation . . .
light years ahead." But even ignoring everything that happened
prior to Steven's attempt to pass fake checks at Eastern Bank in
2007, "the totality of the attendant circumstances" from February
2007 onward support Agent Everett's assurances. See Dessesaure,
429 F.3d at 369. Similarly, Agent Everett's candid acknowledgment
that the 2006 evidence was a factor in his initial decision to seek
the warrants does not undermine our conclusion. The question is
not whether the evidence did influence the officer's decision --
how could it not?5 -- but whether the same decision would have been
made if the evidence had not been known. The district court
concluded that it would have, and we are not "left with a definite
and firm conviction" that this was a mistake. See United States v.
Brake, 666 F.3d 800 , 804 (1st Cir. 2011) ("[C]lear error exists
only if, after considering all the evidence, we are left with a
definite and firm conviction that a mistake has been made."
(internal quotation marks omitted)). Accordingly, prong one of the
Murray/Dessesaure test is satisfied for both searches.
As for prong two, the district court correctly concluded
that with the paragraphs containing the illegal evidence excised,
there was still enough information to establish probable cause that
both "(1) a crime has been committed (the 'commission' element),
and (2) enumerated evidence of the offense will be found at the
place to be searched (the 'nexus' element)." United States v.
Strother, 318 F.3d 64 , 67 (1st Cir. 2003). Steven only contests
the nexus element, however, so that is where we focus our
discussion. For probable cause to exist, "the facts presented to
the magistrate need only 'warrant a man of reasonable caution' to
believe that evidence of a crime will be found." United States v.
5 Indeed, given the evidence discovered during the 2006 search and the facts presented at the hearing, we would be highly skeptical if Agent Everett had testified that the 2006 search had had no impact on his decision to seek the 2007 warrants.
Feliz, 182 F.3d 82 , 86 (1st Cir. 1999) (quoting Texas v. Brown, 460
U.S. 730 , 742 (1983) (plurality opinion)). They do not "demand
showing that such a belief be correct or more likely true than
false." Id. (internal quotation marks omitted).
Regarding the search of the laptop, we have little doubt
that a nexus was established. As discussed above, the laptop
accompanied Steven on his trip to commit fraud on Eastern Bank and
was discovered in a vehicle fraudulently registered to Bradley and
which Steven had instructed Amaro not to bring to the police
station. Located inside this vehicle was not only the laptop, but
also a forged power of attorney and fraudulent registration
records. Given the laptop's proximity to the forged documents and
its location in a fraudulently registered vehicle, it was
reasonable to believe that the laptop might also be an instrument
of Steven's criminal activity and thus might contain additional
evidence. See United States v. Scott, 270 F.3d 30 , 59 (1st Cir.
2001) (adopting the rationale of United States v. Scott, 83 F.
Supp. 2d 187, 197 (D. Mass. 2000), that "it is equally reasonable
to suppose that someone allegedly engaged in bank fraud and
producing false securities on his computer would have records of
the bank fraud and false securities on that computer"). Indeed,
Agent Everett stated as much in his affidavit. This is sufficient
to establish the nexus element. See Feliz, 182 F.3d at 86.
There was also probable cause to believe that evidence of
the fraudulent schemes would be found at 56 Lawrence Road. Agent
Everett's affidavit stated that in his "experience and in the
experience of other [Secret Service] agents, individuals engaged in
fraud and identity theft keep at their residences records related
to and used in their criminal activities." Not only have we time
and again "endorsed the concept that a law enforcement officer's
training and experience may yield insights that support a probable
cause determination," United States v. Floyd, 740 F.3d 22 , 35 (1st
Cir. 2014) (citing cases), but the additional untainted information
contained in the affidavit supported this finding. The affidavit
noted that the search of the Gateway laptop found in the Chrysler
uncovered pay stubs from Paradise Realty to Bradley, thus linking
Paradise Realty -- which was owned and operated by Steven, Carmen,
and Pedro -- to the fraudulent schemes. Given that Steven and his
parents openly discussed criminal activity during Steven's jail-
house phone call, it was unlikely that Steven was using Paradise
Realty for his fraud without his parents knowledge, and more likely
that Carmen and Pedro were involved in these schemes.6 And because
all three lived at 56 Lawrence Road, it is a "practical,
commonsense" conclusion that they might keep evidence of their
fraud and identity theft -- such as additional computers, scanners,
6 In fact, the affidavit also alleged that Pedro was involved in a real estate transaction which fraudulently used Bradley's name.
bank records, and identification documents -- there. Feliz, 182
F.3d at 86; see also Floyd, 740 F.3d at 35; Scott, 270 F.3d at 59
(adopting the rationale of Scott, 83 F. Supp. 2d at 197).
Therefore, there is a sufficient nexus to both the Gateway laptop
and the Soto Family Residence, and thus prong two of the
Murray/Dessesaure test is satisfied.7
Finding no clear error with the district court's
conclusion that Agent Everett's decision to seek the 2007 warrants
was not prompted by the illegal April 2006 search and concluding
that there was a sufficient nexus to both the laptop and the Soto
Family Residence, we hold that there was an independent source for
the 2007 searches, and thus the evidence seized from the searches
was admissible. Accordingly, the district court properly denied
the Sotos' motion to suppress.
B. Double Jeopardy
1. Relevant Background
During the third week of trial, Steven filed a pro se
motion8 to dismiss all of the charges against him. According to
7 The government and district court also relied on the fact that 56 Lawrence Road was featured "as first prize for an unauthorized raffle." However, the raffle instructed purchasers to mail payments to the address for Paradise Real Estate, and not the Soto Family Residence, so it is unclear to us how this factor supports a nexus between the illegal schemes and 56 Lawrence Road. 8 Steven's counsel declined to sign the motion as counsel of record but agreed to present it to the district court on Steven's behalf.
Steven, the indictment violated the Fifth Amendment's Double
Jeopardy Clause because the current charges all stemmed from the
illegal use of the same identities -- Bradley and Espinal -- that
formed the basis of the prior motorcycle and automobile charges
(discussed above) he was ultimately convicted of. See generally
United States v. Soto, 720 F.3d 51 (1st Cir. 2013) (reviewing his
prior convictions). In essence, Steven argued that each count of
identity theft and fraud was not an isolated event, but rather an
ongoing conspiracy, and thus he was being twice prosecuted for the
same crimes in violation of the Fifth Amendment.
The district court in its discretion opted not to
officially consider Steven's pro se motion,9 noting that pro se
pleadings by represented defendants are disruptive and that the
time for motions to dismiss had long since passed. Still, the
district court explained that even if it were to consider Steven's
pro se motion, the motion would fail for a number of reasons: (1)
there was no good cause to excuse the requirement that double
jeopardy motions be filed pretrial; (2) the motion lacked merit
because the earlier case involved different defendants, different
victims, and different evidence (though there was some evidentiary
9 In United States v. Tracey, 989 F.2d 1279 , 1285 (1st Cir. 1993), we explained that because a district court "enjoys wide latitude in managing its docket and can require represented parties to present motions through counsel," the district court did not abuse its discretion in refusing to consider the defendant's pro se motions.
overlap); and (3) there was no prejudice to Steven by his counsel's
refusal to file the motion.
2. Steven Was Not Subject to Double Jeopardy
On appeal, Steven raises the same double jeopardy
argument -- once again through a pro se filing. This claim lacks
merit.10 The Double Jeopardy Clause of the Fifth Amendment states
that no person can "be subject for the same offence to be twice put
in jeopardy of life or limb." U.S. Const. amend. V; see also
United States v. Feliz, 503 U.S. 378 , 385 (1992) ("At its root, the
Double Jeopardy Clause forbids the duplicative prosecution of a
defendant for the 'same offence.'"). In deciding whether multiple
prosecutions under the same statute violate the Due Process Clause,
we look at whether the crimes were different in place and time,
whether there was common conduct linking the alleged offenses,
10 The government argues that this claim is waived because he did not raise his double jeopardy argument prior to trial. However, the government relies on a version of Rule 12 of the Federal Rules of Criminal Procedure (as well as caselaw interpreting that Rule) that has since been amended. The amended Rule 12 eliminated any reference to waiver, instead explaining that
[i]f a party does not meet the deadline for making a Rule 12(b)(3) motion, the motion is untimely. But a court may consider the defense, objection, or request if the party shows good cause.
Fed. R. Crim. P. 12(c)(3). Indeed, the Advisory Committee Notes to the 2014 Amendments specifically state that "the Committee decided not to employ the term 'waiver'" because the initial rule was never intended to "require any determination that a party who failed to make a timely motion intended to relinquish a defense, objection, or request that was not raised in a timely fashion." Rule 12 adv. comm. notes to 2014 amend.
whether the individuals involved in each offense were different,
and whether the evidence used to prove the offenses differed. Id.;
United States v. DeCologero, 530 F.3d 36 , 71 (1st Cir. 2008);
United States v. Chagra, 653 F.2d 26 , 29 (1st Cir. 1981).
Here, there is little question that Steven's multiple
fraud counts do not implicate double jeopardy. Though he was
charged with multiple counts of fraud under the same section, each
count involved a different location -- 242 Main Street, 55 Lawrence
Street, 399 Orange Street, and 21 Dudley Street in the current case
and Motorcycles of Manchester, North Reading Motor Sports Inc.,
Kelly Motor Sports, and other car dealerships in his prior case.
Moreover, each event occurred during a different time -- the frauds
at issue in the present case occurred on different days between the
fall of 2006 and the spring of 2007 while the motorcycle and
automobile fraud began in March 2006. Each fraudulent scheme also
involved different participants -- the properties were owned by
different individuals, the motorcycles and automobiles were owned
by different vendors, and the mortgages were obtained from
different lenders. And while there was some overlap in evidence
amongst the different fraudulent transactions, the evidence for
each was far from identical. See Felix, 503 U.S. at 386 ("[O]ur
precedents hold that a mere overlap in proof between two
prosecutions does not establish a double jeopardy violation.");
Chagra, 653 F.2d at 29 (finding no double jeopardy violation where
the charged offenses occurred during different times, the
participants were different, the places differed, and the evidence
used to prove the offenses differed).
The same is true regarding each count of aggravated
identity theft. Though Steven was charged with multiple counts of
unlawfully using Bradley's and Espinal's identity, each count was
tied to a different and distinct underlying felony -- the fraud
related to the motorcycles and automobiles in the prior case and
the mail fraud related to each property in the present case. As
the Seventh Circuit explained in the context of an 18 U.S.C.
§ 924(c) gun possession case,
[b]ecause the statute ties the gun possession charge to the underlying drug transaction, the unit of prosecution is each predicate offense in which a firearm is carried, used, or possessed with the intent to further the drug crime, as long as there is some meaningful difference in the conduct that led to each predicate offense. So in a case involving two drug offenses based on separate and distinct conduct, a defendant's carrying of a gun during each of them constitute[s] two violations of section 924(c).
United States v. Cejas, 761 F.3d 717 , 731 (7th Cir. 2014)
(alteration in original) (internal citations and quotation marks
omitted). The same logic applies here. The aggravated identity
theft statute makes it unlawful to "knowingly transfer,
possess, or use, without lawful authority, a means of
identification of another person" "during and in relation to any
enumerated felony violation enumerated in subsection (c)." 18
U.S.C. § 1028A(a)(1) (emphasis added). Mail, bank, and wire fraud
are all enumerated felonies. See id. § 1028A(c)(5). Because each
use of Bradley's and Espinal's identity was distinct and in
furtherance of a different fraudulent scheme,11 each use constitutes
its own violation of § 1028A. Steven's convictions therefore do
not stem from the same criminal conduct, and thus there is no
double jeopardy concern.
C. Shea's Comments
1. Relevant Testimony
One of the government witnesses was Shea, the owner of 55
Lawrence Street. She testified that Steven, pretending to be
Bradley, attempted to obtain her signature on documents which would
have allowed him to sell her property as three separate
condominiums. Shea refused to sign the documents and also secretly
recorded the conversation. This recording was played at trial,
during which Steven was heard telling Shea that her refusal to sign
could likely result in a federal investigation. Shea then
responded to Steven that "[t]hey will find out the truth." When
the prosecutor asked Shea to explain her comment, Shea testified
11 Steven also seems to argue that these were not independent schemes, but rather one overarching conspiracy. Even if this were true -- something we need not decide -- his argument would still fail. "A substantive crime and a conspiracy to commit that crime are not the 'same offence' for double jeopardy purposes." Felix, 503 U.S. at 389; see also DeCologero, 530 F.3d at 71-72 (finding no double jeopardy violation in successive RICO prosecutions where the enterprise was the same but the pattern of racketeering activity was not); see also Cejas, 761 F.3d at 730-31.
that she felt Pedro and Steven "were tricking" her and that she had
put her "trust in Pedro to sell [her] house" but that "they were
trying to steal [her] house from [her] and sell it and keep the
money for themselves."
During cross-examination, Steven's counsel asked whether
Shea had spoken with John Briggs, an attorney, about the lease-
with-option-to-purchase agreement with "Bradley." She avoided
answering the question, instead testifying that Briggs had told her
that Pedro was "not an honest person" and that it was because of
this statement that she "refused to sign the paper." Steven's
counsel asked Shea to listen to his specific question, but Shea
again refused to respond, instead stating that she "do[es]n't trust
him." The district court then instructed Shea to "[l]isten to the
question. Say what is necessary to answer that question. Don't
say anything else."
2. Standard of Review
Pedro argues that this testimony contained inadmissible
character evidence, hearsay, and lay opinions, in violation of
Rules 404, 801, 802, and 701 of the Federal Rules of Evidence,
respectively. He also contends that it was unduly prejudicial
under Rule 403 of the Federal Rules of Evidence. Because Pedro
never objected at trial, our review would ordinarily be for plain
error. See United States v. Rodríguez-Adorno, 695 F.3d 32 , 38 (1st
Cir. 2012). However, Pedro claims that the objection was
nevertheless preserved -- and thus subject to abuse-of-discretion
review -- because the district court sua sponte interjected,
essentially objecting for Pedro. This argument lacks merit.
Assuming without deciding that a party need not repeat an
objection already noted and acted upon by a trial judge sua sponte,
here nothing the trial judge said obviated the need to raise and
preserve the different points Pedro now wishes to raise for the
first time on appeal. See Fed. R. Evid. 103(a); United States v.
Wallace, 461 F.3d 15 , 35 n.11 (1st Cir. 2006) ("Because that
objection was on different grounds, however, we deem the
defendant's present argument of error, raised for the first time on
appeal, as unpreserved."). Pedro alleges that the challenged
statements were inadmissible because they contained character
evidence, hearsay testimony, lay opinion testimony, and were unduly
prejudicial. The district court's interjection, however, had
nothing to do with these claims of error. Shea was refusing to
answer Steven's counsel's question and was instead opting to opine
on topics beyond the question's scope. By instructing Shea to
listen to what was being asked and only answer that question, the
district court was simply attempting to keep Shea on topic; it was
taking no views on whether Shea's beyond-the-scope comments would
be inadmissible if relevant to the question asked.
Accordingly, our review is for plain error. Rodríguez-
Adorno, 695 F.3d at 38. Under this review, we will only reverse if
"(1) an error occurred (2) which was clear or obvious and which not
only (3) affected  substantial rights, but also (4) seriously
impaired the fairness, integrity, or public reputation of judicial
proceedings." Id. (alteration in original) (internal quotation
3. There Was No Plain Error
Pedro has failed to show that Shea's comments amount to
plain error. First, Shea's comments were not improper character
evidence prohibited by Rule 404. While the Rule does prohibit
"[e]vidence of a person's character or character trait . . . to
prove that on a particular occasion the person acted in accordance
with the character or trait," evidence of bad acts may be
admissible for other purposes, such as to prove "motive,
opportunity, intent, preparation, plan, [or] knowledge." Fed. R.
Evid. 404(a),(b); see also United States v. Joubert, 778 F.3d 247 ,
254 (1st Cir. 2015) ("The rule prohibits the prosecution from
introducing evidence that is extrinsic to the crime charged solely
for the purpose of showing villainous propensity." (internal
quotation marks omitted)); United States v. George, 761 F.3d 42 , 58
(1st Cir. 2014) (finding a recording discussing other bad acts
admissible because it painted a picture of the witness's and
defendant's relationship). Shea's comments were not made to
establish that Pedro was a dishonest trickster trying to steal her
house, but rather were made to explain her reasons for telling
Steven "[t]hey will find out the truth" and for refusing to sign
the documents to convert her property into condominiums. Thus, the
statements served an important non-propensity purpose -- namely
Shea's explanation and motivations for acting the way she did --
and were not improper character evidence.
For similar reasons, Shea's statement that Briggs told
her Pedro was "not an honest person," is not improper hearsay
testimony. For evidence to be hearsay, and thus inadmissible under
Rule 802 of the Federal Rules of Evidence, the evidence must be "a
statement, other than one made by the declarant while testifying at
the trial or hearing, offered in evidence to prove the truth of the
matter asserted." United States v. Cruz-Díaz, 550 F.3d 169 , 176
(1st Cir. 2008) (internal quotation marks omitted); see also Fed.
R. Evid. 801(c). While Briggs's comment was an out-of-court
statement, it was offered to explain Shea's rationale for refusing
to sign the documents presented by Steven -- and not to prove
Pedro's dishonesty. Accordingly, it was not hearsay. See Cruz-
Díaz, 550 F.3d at 176 ("Out-of-court statements offered not to
prove the truth of the matter asserted but merely to show context
-- such as a statement offered for the limited purpose of showing
what effect the statement had on the listener -- are not
We also disagree with Pedro's contention that Shea's
comments that Pedro was "tricking" her and "trying to steal" her
house and "keep the money for themselves" was improper opinion
testimony. A lay witness may testify as to her opinion if it is
"(a) rationally based on the witness's perception; (b) helpful to
clearly understanding the witness's testimony or to determining a
fact in issue; and (c) not based on scientific, technical, or other
specialized knowledge . . . ." Fed. R. Evid. 701. Shea's testimony
stemmed from her perception of what the Sotos were doing, it was
helpful to explain why the Sotos might be trying to split and sell
the property as three condominiums without Shea's involvement or
consent, and it involved no special or technical knowledge. We
therefore think that this testimony is on the acceptable side of
what is admissible, but even if it did cross the line, it did so
ever-so-slightly, and thus is in no way a "clear" or "obvious"
error establishing plain error. See Rodríguez-Adorno, 695 F.3d at
Not to be deterred, Pedro argues that regardless of its
admissibility, the evidence should still have been excluded under
Rule 403, which allows a district court to exclude otherwise
admissible evidence "if its probative value is substantially
outweighed by 'the danger of unfair prejudice.'" United States v.
Varoudakis, 233 F.3d 113 , 121 (1st Cir. 2000) (quoting Fed. R.
Evid. 403). "Unfair prejudice," however, is reserved for "evidence
that invites the jury to render a verdict on an improper emotional
basis" or for evidence that is "shocking or heinous" and "likely to
inflame the jury." Id. at 122 (internal quotation marks and
citations omitted). Nothing that Shea testified to rises to this
Accordingly, the admission of Shea's testimony was not
D. The GAO Report
1. Relevant Background
Carmen and Steven pursued a "condonation" -- or good
faith -- defense, arguing that they lacked the intent to defraud
because the mortgage lenders were aware of and tacitly approved of
the Sotos' conduct.12 According to the Sotos, because mortgage
lenders were so focused on making as many loans as possible which
they could then turn around and resell into securitizations,
underwriting standards were lax and the lenders were not interested
in what information the borrower provided or even if the loan would
default. Carmen and Steven made this argument mostly through
cross-examination of government witnesses, though the Sotos also
tried to introduce a report from the Government Accountability
Office ("GAO") which concluded that
[t]he role of nonbank mortgage lenders in the recent financial collapse provides an example of a gap in our financial regulatory system resulting from activities of institutions that were generally subject to little or no direct oversight by federal regulators. The
12 Pedro's defense, meanwhile, contended that all of the closings were legitimate.
significant participation by these nonbank lenders in the subprime market -- which targeted products with riskier features to borrowers with limited or poor credit history -- contributed to a dramatic loosening in underwriting standards leading up to the crisis.
(footnote omitted). According to the Sotos, the GAO Report
"encapsulate[d] the entire defense" and was probative "on the issue
of what the climate was during this period of time." The district
court disagreed, excluding the report under Rule 403 of the Federal
Rules of Evidence. According to the district court,
The GAO report says nothing about the particular lenders in this case, it only, in the proffered excerpt, mentions a "dramatic loosening of underwriting standards." That's a general observation. The report, as I said yesterday, as a whole focuses on the need for better federal regulation.
Assuming without finding that the GAO report is a public record admissible under Rule 803, I find that Rule 403 operates to exclude it. It has little, if any, probative value with regard to the particular lenders involved in this case. The defendants have evidence that one lender knew that Landess was not moving into the property at issue. So it's my present intention to give a [condonation] instruction. And the excerpt wouldn't be sufficient to get the instruction if the evidence were otherwise insufficient.
I find that any probative value of the GAO report is substantially outweighed by the risk of confusion of the issues and the risk that its admission would cause the jury not to understand or follow the proper [condonation] instruction I intend to give and would therefore be unfairly prejudicial. I also find that it has no probative value with regard to materiality, which is an objective
test, and the analysis is essentially the same.
2. The District Court Did Not Abuse Its Discretion
The Sotos all claim that this report was improperly
excluded under Rule 403. We disagree. As discussed above, Rule
403 of the Federal Rules of Evidence allows a court to "exclude
relevant evidence if its probative value is substantially
outweighed by a danger of one or more of the following: unfair
prejudice, confusing the issues, misleading the jury, undue delay,
wasting time, or needlessly presenting cumulative evidence." Fed.
R. Evid. 403. This "balancing act . . . is a quintessentially
fact-sensitive enterprise" which the district court is in the best
position to make. Joubert, 778 F.3d at 255. Accordingly, we
review for abuse of discretion,13 keeping in mind that "[o]nly
rarely and in extraordinary compelling circumstances will we, from
the vista of a cold appellate record, reverse a district court's
on-the-spot judgment concerning the relative weighing of probative
value and unfair effect." United States v. Vizcarrondo-Casanova,
763 F.3d 89 , 94 (1st Cir. 2014) (alteration in original) (internal
quotation marks omitted); see also United States v. Cruz-Feliciano,
786 F.3d 78 , 88 (1st Cir. 2015).
13 While Carmen objected to the exclusion of the GAO report at trial -- thus entitling her to abuse-of-discretion review -- Pedro and Steven failed to join Carmen's objection. We need not decide whether Carmen's objection preserved the issue for Pedro and Steven, however, because the argument fails regardless of the standard of review.
Here, the Sotos wanted to introduce a nine-page excerpt
from a GAO report that discussed, very broadly, the need for
tighter federal regulation of mortgage lenders. As part of this
analysis, the report noted the trend of loosening underwriting
standards in an attempt for lenders to issue, and in turn sell and
securitize, more mortgages. But as the district court correctly
noted, the fact that lenders were loosening their standards and
issuing riskier mortgages is a far cry from saying that the lenders
did not care about a borrower's risk profile or that they condoned
(and actually encouraged) loan applicants to lie on applications.
The GAO report does not make this leap, and even if it had, the
report only speaks broadly about national trends; nothing in the
report connects these trends to the specific lenders defrauded
here. Thus, we agree with the district court that the probative
value of the report was minimal. See United States v. Tetioukhine,
725 F.3d 1 , 8 (1st Cir. 2013) (upholding the district court's
exclusion of expert testimony on Russian culture under Rule 403
because Russian culture is a broad topic and the intended testimony
that the citizens of the Soviet Union perceived America as "a free
country" would be both vague and unhelpful); Banco Popular de P.R.
v. ACEMLA, 678 F.3d 102 , 112 (1st Cir. 2012) (affirming the
district court's exclusion of a series of judgments because none of
the judgments concerned the four songs that were at issue in the
copyright infringement case); United States v. Josleyn, 206 F.3d
144 , 148 (1st Cir. 2000).
On the flip side, the district court concluded that the
risk of prejudice was high because the GAO report could confuse the
jury when the district court instructed it on condonation. Given
that the condonation defense requires condonation by the specific
party aggrieved and the GAO report only speaks in broad, national
terms, it was entirely reasonable for the district court to worry
that the admission of the GAO report would improperly influence the
jury's understanding of the lending practices of the actual lenders
defrauded by the Sotos. See Banco Popular, 678 F.3d at 112
(affirming the exclusion of judgments because "mentioning these
rulings by name and in detail could give the jury a misimpression
of the evidence before it").
The district court found that the GAO report had minimal
probative value while at the same time created a high risk that the
jury could confuse or misunderstand the condonation defense. We
see nothing "extraordinarily compelling" with this case which would
require us to second-guess the district court's conclusions and re-
balance each consideration. The district court did not abuse its
discretion, and thus we affirm the exclusion of the GAO report.
E. The Sufficiency of the Evidence
Steven argues through his supplemental pro se brief that
the district court erred in denying the Sotos' joint Rule 29 motion
for judgment of acquittal. According to Steven, the government
failed to provide sufficient evidence proving the "mailing element"
of the mail fraud charges. We review this claim de novo, United
States v. Marston, 694 F.3d 131 , 134 (1st Cir. 2012), and reject
The crime of mail fraud includes three elements: "(1) a
scheme to defraud based on false pretenses; (2) the defendant's
knowing and willing participation in the scheme with the intent to
defraud; and (3) the use of interstate mail . . . communications in
furtherance of that scheme." United States v. Hebshie, 549 F.3d
30 , 35 (1st Cir. 2008) (alteration in original) (internal quotation
This last element, known as the "mailing element," has
two parts. First, the defendant must "cause the use of the mails,
which includes reasonably foreseeable mailings." Id. at 36
(emphasis in original). "It is not necessary to prove that the
defendant personally executed the mailings, but merely that the
defendant 'caused the mailing by doing some act from which it is
reasonably foreseeable that the mails will be used.'" United
States v. Pimental, 380 F.3d 575 , 584 (1st Cir. 2004) (quoting
United States v. Bruckman, 874 F.2d 57 , 60 (1st Cir. 1989)). This
includes knowing (or at least reasonably foreseeing) that the mail
is often used in the ordinary course of business. Id.
Second, the defendant must "use the mails for the
purpose, or in furtherance, of executing the scheme to defraud."
Hebshie, 549 F.3d at 36 (emphasis in original). This requirement
"is to be broadly read and applied." Id.; see also United States
v. Pacheco-Ortiz, 889 F.2d 301 , 305 (1st Cir. 1989) (explaining
that this language "has been given a 'liberal construction' by this
court and others"). "To further [a defendant's] fraudulent scheme,
the mailings need not be an essential element of the scheme. They
simply must be sufficiently closely related to the scheme such that
they are incident to an essential part of the scheme or a step in
the plot." Hebshie, 549 F.3d at 36 (alteration, internal
citations, and internal quotation marks omitted). So long as there
is a "connection or relationship" between the mailing and the
fraudulent scheme and the mailing was "part of the execution of the
scheme as conceived by the perpetrator at the time," the "in
furtherance" prong is satisfied. Id.
In reviewing Steven's claim that the evidence was
insufficient to establish the "mailing element," we look to see
"whether, after assaying all the evidence in the light most amiable
to the government, and taking all reasonable inferences in its
favor, a rational factfinder could find, beyond a reasonable doubt,
that the prosecution successfully proved the essential elements of
the crime." Id. at 35 (internal quotation marks omitted); see also
United States v. Royal, 100 F.3d 1019 , 1028 (1st Cir. 1996). We
have undertaken this process and conclude that the government
clearly provided sufficient evidence to satisfy the mailing
The Sotos' scheme essentially consisted of sham real
estate transactions conducted in order to procure fraudulent loans
which would then default. For each of the four properties at
issue, the government presented witnesses who testified that the
closing documents (which were also introduced into evidence)
instructed the lenders' attorney to send the executed closing
documents to the lenders' physical address. The witnesses also
testified that, as instructed, they mailed those documents --
either through FedEx, UPS, or the United States Postal Service14 --
to the lender per their usual course of business. Though none of
the Sotos personally mailed anything, they arranged for all the
transactions to occur and signed all the necessary documents.
Given the documents' instructions to mail the closing documents,
the witnesses' testimony that they did in fact mail the documents,
and the Sotos' participation in the real estate market (both
through these schemes and their legitimate real estate brokerage
firm Paradise Real Estate) whereby closing documents are mailed as
part of the ordinary course of business, there is little question
14 It makes no difference whether the lender used the United States Postal Service or a private carrier. The mail fraud statute applies to items "sent or delivered by the Postal Service, or . . . sent or delivered by any private or commercial interstate carrier." 18 U.S.C. § 1341.
that the jury could conclude that the Sotos knew -- or at the very
least foresaw -- that a mailing that would not otherwise have
occurred would occur precisely because of the manner in which the
Sotos sought to complete their fraud. See Pimental, 380 F.3d at
584; Royal, 100 F.3d at 1019 (finding that it was reasonable for
jury to conclude that it was foreseeable that mails would be
utilized where "in the ordinary course of business, admissions and
federal student financial aid applications . . . would be sent
. . . . through the mails"); United States v. Contenti, 735 F.2d
628 , 631 (1st Cir. 1984). Contrary to Steven's suggestion, it was
not necessary for the government to have submitted records from
FedEx, UPS, and the United States Postal Service confirming the
mailings. While this is certainly one way the government could
have proven the point, its decision to instead call the witnesses
who participated in the closings and mailings is just as effective.
Thus, the first prong of the mailing element -- that the Sotos
caused the use of the mails -- was satisfied.
The same is true for the "in furtherance" prong. Given
the broad interpretation of "in furtherance," the mailings were
clearly a "step in the plot" necessary to execute the scheme.
Hebshie, 549 F.3d at 36. The closings could not be completed --
and thus the fraudulent loans could not be processed and disbursed
-- until the lender received the executed documents. We have held
on numerous occasions that the transmission of executed documents
is sufficient to satisfy the "in furtherance" requirement of mail
fraud, and this is just another such example. See, e.g., id.
("Courts have generally held that mailings sent in connection with
insurance claims further an insurance fraud scheme."); Royal, 100
F.3d at 1029-30 (holding that mail fraud was established where
documents containing misstated or fraudulent information for
student loans were sent via mail); Contenti, 735 F.2d at 632
(finding that proof of loss sent to insurance broker furthered the
scheme); United States v. Martin, 694 F.2d 885 , 890 (1st Cir. 1982)
(holding that the mailing of falsified insurance applications "were
an integral part of appellant's ongoing scheme to defraud" and thus
satisfy the "in furtherance" requirement).
Accordingly, both requirements of the mail fraud
statute's "mailing element" were satisfied, and thus there was
sufficient evidence to sustain the convictions. The Sotos' joint
Rule 29 motion was properly denied.
F. Jury Instructions
1. Relevant Background
In support of their condonation defense, Steven and
Carmen requested that the district court instruct the jury on both
good faith and condonation. After concluding that they had
presented sufficient evidence by which a jury could accept this
theory, the district court agreed to provide the instructions. At
the charge conference held on June 19, 2013 -- the day before
closing arguments -- the district court previewed its instructions.
With regard to good faith and condonation, the instruction read as
To act with intent to defraud means to act with intent to deceive someone in order to obtain money or property. Since an essential element of the crime charged is intent to defraud, it follows that good faith on the part of the defendant is a complete defense to a charge of mail fraud.
. . . .
A defendant, however, has no burden to establish his or her good faith . . . . Rather, the burden is on the government to prove fraudulent intent and consequent lack of good faith beyond a reasonable doubt. . . .
In considering whether or not a defendant acted in good faith, you are instructed that any belief by a defendant that ultimately everything would work out so that no one would lose any money does not require a finding by you that he or she acted in good faith. No amount of honest belief on the part of the defendant that the alleged scheme would ultimately benefit the people and/or institutions involved will excuse fraudulent actions or false representations and material -- false representations by a defendant to obtain money.
In this case the defendants argue that the mortgage lenders each knew and condone, that is, gave tacit approval to the conduct in which defendants are alleged to have engaged. The mortgage lenders' knowledge or tacit approval of the commission of an offense does not by itself constitute a defense or an excuse for the crime of mail fraud. However, any evidence that a mortgage lender knew of the allegedly fraudulent scheme or of an alleged material false statement and nevertheless granted a requested loan, may be
considered by you on the issue of whether the government has proven that a defendant had the intent to defraud necessary to have committed the alleged mail fraud at issue. Each defendant contends that each of the mortgage lenders involved in this case knew of and condoned the activities in question and therefore that he or she did not possess the required intent to commit the crimes of mail fraud with which he or she is charged. The defendant has no duty to prove to you that this contention is correct, rather the burden is always on the government to prove each element of each offense charged beyond a reasonable doubt, including the element of intent.
After previewing the instruction, the district court
asked the parties if "there [was] any reaction to that
instruction?" Carmen's counsel stated "[n]ot from me," while
Steven's and Pedro's counsels remained silent. The court
acknowledged that the instruction was not word-for-word what the
Sotos had requested but still felt it was "essentially what [they
were] looking for." The district court then gave the parties one
last opportunity to object, and when nobody did, the district court
The following day, the district court instructed the jury
in line with these instructions. It also gave a lengthy
instruction on reasonable doubt:
As you've heard me say repeatedly, the burden is on the government to prove beyond a reasonable doubt a defendant is guilty of the charge made against him or made against her. The burden of proof has nothing to do with who called witnesses or the number of exhibits, one side or the other, introduced[;] it has to
do with the quality of the evidence. Proof beyond a reasonable doubt is a strict and heavy burden, but it does not mean that a defendant's guilt must be proved beyond all possible doubt. It does require that the evidence exclude any reasonable doubt concerning a defendant's guilt.
A reasonable doubt may arise not only from the evidence produced, but also from the lack of evidence produced by the government. Reasonable doubt exists when, after weighing and considering all the evidence, using reason and common sense, jurors cannot say that they have a settled conviction of the truth of the charge.
Of course a defendant is never to be convicted on suspicion or guesswork. If, for example, you view the evidence in the case as reasonably permitting either of two conclusions, one that a defendant is guilty as charged, the other that the defendant was not guilty, you will find the defendant not guilty. It is not sufficient for the government to establish a probability, though a strong one, that an element of an offense charged, a fact necessary to prove an offense charged, is more likely to be true than not true. That is not enough to meet the burden of proof beyond a reasonable doubt. On the other hand, there are very few things in this world that we know with absolute certainty and in criminal cases the law does not require proof that overcomes every possible doubt.
So concluding my instructions on the burden then, I instruct you that what the government must do to meet its heavy burden is to establish the truth of each part of each offense charged by proof that convinces you and leaves you with no reasonable doubt and therefore satisfies you that you can, consistent with your oath as jurors, base your verdict upon it. If you find that a particular charge against a defendant has been proven beyond a reasonable doubt, you will return a verdict of guilty on that charge. If
on the other hand you think there is a reasonable doubt about whether a defendant is guilty of a particular offense, you must give the defendant the benefit of that doubt and find the defendant not guilty of that offense.
None of the Sotos objected to these instructions. In fact, Steven
and Carmen both referred to the district court's good faith and
condonation instruction during their closing arguments.
2. The Sotos Waived any Challenge to the Good Faith/Condonation Instruction
Each member of the Soto Family alleges that the district
court's good faith/condonation instruction was flawed.
Specifically, Steven and Carmen claim that the no ultimate harm
instruction -- that an honest belief that "ultimately everything
would work out" or that "no one would lose money" does not on its
own excuse fraudulent behavior and material false representations
-- mischaracterized the law and allowed the jury to convict even if
it concluded the Sotos acted in good faith. Pedro, meanwhile,
argues that because he did not pursue a condonation defense, the
district court should have emphasized that those instructions did
not apply to him.
We do not reach the merits of these arguments because, as
the government correctly points out, the Sotos have waived any
claim of error. Though a party's failure to object usually results
in a forfeiture subject to plain-error review, when the "subject
matter [is] unmistakably on the table, and the defense's silence is
reasonably understood only as signifying agreement that there was
nothing objectionable," the issue is waived on appeal. United
States v. Christi, 682 F.3d 138 , 142 (1st Cir. 2012); see also
United States v. Medina, 427 F.3d 88 , 91 (1st Cir. 2005) ("A
party's considered decision not to avail itself of a procedural
right, evidenced here by counsel's persistent and reasoned refusal
of the judge's suggestions [to object or request a cautionary
instruction], waives that right.").
Here, the district court informed the Sotos exactly how
it was planning to instruct the jury on good faith and condonation
-- instructions Carmen and Steven had explicitly requested -- and
sought their feedback, twice asking if they were okay with those
specific instructions. Carmen's counsel affirmatively stated there
was no objection, while Steven's and Pedro's counsels remained
silent. Given the judge's invitation to speak up with any
disagreement, these reactions can only be interpreted as signifying
approval with the instructions as previewed (and ultimately relayed
to the jury). Accordingly, the Sotos' current claims of the
instructions' inadequacy are waived.
3. The Reasonable Doubt Instruction Was Not Erroneous
Pedro also challenges the district court's reasonable
doubt instruction, arguing that the "two inference" portion of the
instruction is disfavored both in this circuit and nationwide. Our
review is for plain error since Pedro never objected at trial,15
but under any standard of review his argument fails. See United
States v. LaPlante, 714 F.3d 641 , 643 (1st Cir. 2013). In United
States v. Cleveland, we approved of a reasonable doubt instruction
substantively identical to the one given by the district court
here, explaining that the instruction "correctly conveyed the
concept of reasonable doubt to the jury." 106 F.3d 1056 , 1062-63
(1st Cir. 1997), abrogated on different grounds by Brache v. United
States, 165 F.3d 99 (1st Cir. 1999). We agree with that conclusion
and see no reason to find differently here. Like the instruction
given in Cleveland, "there was no 'reasonable likelihood' that the
jury misunderstood the government's burden." United States v.
Ranney, 298 F.3d 74 , 80 (1st Cir. 2002); see also Víctor v.
15 Unlike with the good faith/condonation instruction, there is no evidence in the record that the district court discussed this instruction with the parties and Pedro remained silent when given the opportunity to comment on it. Thus, there is no waiver issue. Cf. Rojo-Álvarez, 944 F.2d at 971.
Nebraska, 511 U.S. 1 , 6 (1994).16 The instruction, therefore, was
We also reject Pedro's argument that the reasonable doubt
instruction increased the prejudice attendant to the no ultimate
harm instruction. Pedro provides no argument as to how or why the
instruction increased prejudice, and we fail to see it either.
Thus, even if the intersection of these two instructions did
somehow prejudice Pedro, any error would not have been "clear" or
"obvious" as needed to satisfy plain-error review. See LaPlante,
714 F.3d at 643 ("To establish plain error, a defendant must show
that . . . the error was obvious . . . .").
G. Carmen's Restitution
Finally, Carmen challenges the portion of her sentence
requiring her to pay $792,559 in restitution. According to Carmen,
because the losses stemmed not only from her conduct but also from
the lenders' own greed and market practices at the time, her
16 Pedro is correct that we have cautioned against the isolated use of the "two inference" instruction without more. However, this concern stemmed from the comparison between "guilt" and "innocence." See United States v. Andújar, 49 F.3d 16 , 24 (1st Cir. 1995) ("We have previously warned district courts against using a 'guilt or innocence' comparison" because it suggests that the jury "should find the defendant guilty if they think he is not innocent -- regardless of how convincing the government's proof has been."). When the comparison is between "guilty" and "not guilty," like it is here, we have found the instruction to be "less troublesome." Ranney, 298 F.3d at 79; see also United States v. O'Shea, 426 F.3d 475 , 483 (1st Cir. 2005). And in any event, the "two inference" language was not given in a vacuum, but rather in a lengthy, detailed, and proper explanation of reasonable doubt.
actions did not proximately cause the entire loss, and thus the
restitution order is too high. "[W]e review an order of
restitution for abuse of discretion, and findings of fact
subsidiary to the order for clear error."17 United States v.
Innarelli, 524 F.3d 286 , 293 (1st Cir. 2008). Legal conclusions
related to the order, meanwhile, are reviewed de novo. Id.
The Mandatory Victims Restitution Act of 1996 ("MVRA")
mandates that a district court order a defendant convicted of fraud
to "make restitution to the victim of the offense." 18 U.S.C.
§ 3663A(a)(1), (c)(1)(A)(ii). When, like here, the "return of the
property lost by the victim is 'impossible, impracticable, or
inadequate,' the offender must pay the victim 'an amount equal to
. . . the value of the property' less 'the value (as of the date
the property is returned) of any part of the property that is
returned.'" Robers v. United States, 134 S. Ct. 1854 , 1856 (2014)
17 The government contends that Carmen never interposed a specific objection and thus our review should be for plain error. At sentencing, Carmen's counsel asked to be heard on the restitution issue and then stated that
these restitution orders are substantial and they're for the full amount of the loss, but in imposing your sentence you were essentially giving the defendant some credit in terms of time for the market, for what I think you referred to as the "market practice at the time."
He then proceeded to add that he was "concerned by that apparent--" but was unable to finish because the district court cut him off in order to explain why it believed the restitution order was correct. We need not resolve whether this was sufficient to preserve the issue for appeal because Carmen's argument falls short under any standard of review.
(quoting 18 U.S.C. § 3663A(b)(1)(B)). The term "any part of the
property" refers to "the money lent." Id.
Carmen does not dispute that the district court properly
calculated the loss value for the five fraudulent loans (the two
units at 55 Lawrence Street and the three at 21 Dudley Street) at
$792,559.18 Instead, she contends that the district court erred in
finding her responsible for the entirety of that loss due to the
MVRA's proximate cause requirement. See 18 U.S.C. § 3663A(a)(2);
Robers, 134 S. Ct. at 1859. Though Carmen is correct that the MVRA
has a proximate cause requirement, she misunderstands its meaning
and application. Proximate cause asks "whether the harm alleged
has a sufficiently close connection to the conduct at issue."
Robers, 134 S. Ct. at 1859 (internal quotation marks omitted). In
other words, was the harm foreseeable? See Paroline v. United
States, 134 S. Ct. 1710 , 1719 (2014) ("Proximate cause is often
explicated in terms of foresseability or the scope of the risk
created by the predicate conduct.").
There is no requirement that there only be one proximate
cause. To the contrary, "it is common for injuries to have
multiple proximate causes." Staub v. Proctor Hosp., 562 U.S. 411 ,
420 (2011); see also United States v. Kearney, 672 F.3d 81 , 98 (1st
Cir. 2012) ("Proximate cause exists where the tortious conduct of
18 The loans totaled $995,000 but the lenders recouped $202,441 after foreclosure sales.
multiple actors has combined to bring about harm, even if the harm
suffered by the [victim] might be the same if one of the numerous
tortfeasors had not committed the tort."). That the lenders' own
greed and market practices at the time may have contributed to the
loss has nothing to do with whether the entire loss amount was
foreseeable to Carmen. And given Carmen's in-depth knowledge of
the real estate market and these market practices (which Carmen
admitted to taking advantage of), the district court's factual
determination that the entire loss was foreseeable to her was not
clearly erroneous. See Robers, 134 S. Ct. at 1859 ("Fluctuations
in property values are common. Their existence (though not
direction or amount) is foreseeable. And losses in part incurred
through a decline in the value of collateral sold are directly
related to an offender's having obtained collateralized property
Similarly, it is irrelevant to the restitution order that
the district court opted to vary Carmen's sentence downward in part
due to the lenders' greed and the current market conditions. The
purpose of Carmen's prison sentence is to punish Carmen for her
actions, while the purpose of restitution is to make the victim
whole. See Innarelli, 524 F.3d at 293 ("Unlike the calculation of
loss amount in sentencing, the purpose of restitution is not to
punish the defendant, but to make the victim whole again by
restoring to it the value of the losses it suffered as a result of
the defendant's crime."). Moreover, the district court's decision
that the lenders' actions facilitated Carmen's crimes, and
therefore Carmen deserved to spend less time incarcerated than the
Guidelines recommended, is a discretionary determination based on
the circumstances. The amount needed to make the lenders whole,
meanwhile, is a set calculation mandated by statute. Compare
United States v. Gallardo-Ortiz, 666 F.3d 808 , 811 (1st Cir. 2012)
(explaining that a sentencing court has wide discretion in imposing
a variant sentence), with 18 U.S.C. § 3663A(a)(1) ("[T]he court
shall order . . . that the defendant make restitution to the victim
of the offense . . . .").
The district court, therefore, did not abuse its
discretion in ordering Carmen to pay $792,559 in restitution.
For the foregoing reasons, the convictions of Steven,
Carmen, and Pedro Soto all stand, as does the restitution order