United States v. Castaldi

547 F.3d 699, 185 L.R.R.M. (BNA) 2321, 2008 U.S. App. LEXIS 22303, 2008 WL 4694916
CourtCourt of Appeals for the Seventh Circuit
DecidedOctober 27, 2008
Docket07-3452
StatusPublished
Cited by36 cases

This text of 547 F.3d 699 (United States v. Castaldi) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Castaldi, 547 F.3d 699, 185 L.R.R.M. (BNA) 2321, 2008 U.S. App. LEXIS 22303, 2008 WL 4694916 (7th Cir. 2008).

Opinion

FLAUM, Circuit Judge.

Kenneth Castaldi appeals his conviction on thirteen counts of mail fraud and embezzlement from an employee benefits plan. The convictions stemmed from a grant that the Northwest Indiana District Council of Carpenters (the Union) obtained for the purpose of having the Northwest Indiana Joint Apprenticeship Committee (the JAC) teach certain classes to Union members. Castaldi, the director of the Joint Apprenticeship Committee, was convicted of stealing some of this grant money. Castaldi now raises a number of challenges to his conviction on appeal. He claims that (1) his indictment was legally insufficient; (2) the prosecution improperly presented a mug shot to the jury; (3) the district court improperly excluded testimony as hearsay; (4) the government’s evidence on the mail fraud charge was insufficient to support a conviction; (5) the district court failed to properly consider the sentencing factors con- *702 tamed in 18 U.S.C. § 3553(a); and (6) the government did not present sufficient evidence of his intent to embezzle. For the reasons explained below, we affirm the judgment of the district court.

I. Background

The government’s case against Castaldi was essentially that he, along with his co-defendant Paul Hernandez, controlled the account where grant funds were deposited, and then paid themselves (or their credit card companies) sums totaling more than $100,000 from the account.

The State of Indiana awarded the grant to the Union so that it could provide various vocational education programs for Union members; the Union enlisted the JAC to teach classes in the proper use of scaffolding equipment. The terms of the state’s grant covered thirty-one percent of the costs of the educational program, up to a maximum of $200,000; the Union would thus need to spend about $645,000 in order to receive the full amount of the grant. The state also required that the Union incur all program-related expenses by March 3, 2000 in order to qualify for reimbursement.

The defendant, in his briefs to this court, emphasized that Hernandez took much of the initiative in obtaining the grant. Hernandez was, at the time the state awarded the grant, in charge of special projects for the Union. He sought out the grant, served as the liaison to state officials, and worked out the logistics of the grant. Hernandez received the grant funds from the state and deposited them in the Northwest Indiana Carpenters District Grant Fund, a checking account opened at the Indiana Carpenters Federal Credit Union. Hernandez, Castaldi, and Gary Nannenga, the head of the Union, were the signatories on this account.

The JAC’s role was to provide scaffolding training for Union members, and the state grant funds would be used, in part, to pay for that training. The JAC listed the grant fund checking account on its books and provided the state with W-9 paperwork, signed by Castaldi, as part of the grant. Castaldi, as the head of the JAC, was thus connected to the administration of the grant funds.

The government alleges that the illegal conduct in this case stems from what Hernandez and Castaldi chose to do with the grant funds. Castaldi and Hernandez were signatories to the account in which the grant funds were kept. Drawing on the grant account, Castaldi and Hernandez made out checks to themselves, to a credit card company with which Hernandez had an account, and to a secretary and bookkeeper for the JAC, paying out over half of the grant’s proceeds, with most of the payments occurring after the March 3, 2000 deadline for reimbursement.

Castaldi and Hernandez both claimed that the payments were wages that the two were entitled to because of their work on the scaffolding training. The government pointed out that both are salaried employees, and that the terms of their employment do not include overtime wages. Indeed, Ronald Simko, who replaced Castaldi as director of the JAC in 2001, was offered money from the grant fund in addition to his salary but apparently refused to take it.

Castaldi and Hernandez’s payments to themselves violated a number of other JAC by-laws, including the requirement that all checks be signed by a Union trustee and an employer trustee, and a prohibition on Union officials writing their own payroll checks or opening up accounts. Hernandez and Castaldi, both trustees of the JAC, were aware of these require *703 ments and, as far as anyone can tell, never suggested that the JAC modify them.

On May 19, 2005, a federal grand jury indicted Hernandez and Castaldi on twenty-one separate counts. Castaldi was named in count one, charging him with mail fraud, and counts three through fourteen, charging him with theft or embezzlement of an employee benefit plan’s assets. A federal jury convicted Castaldi on all counts on November 21, 2006. The district court then rejected Castaldi’s motions for an acquittal and a new trial, and ultimately sentenced him to thirty months in prison. This appeal followed.

II. Discussion

A. The legal sufficiency of the indictment.

Castaldi first challenges the legal sufficiency of the indictment. When a defendant challenges an indictment before the district court, the district court’s decision is usually reviewed de novo. United States v. Smith, 230 F.3d 300, 305 (7th Cir.2000). However, because in this case Castaldi did not object to the indictment before the district court, we review under a more deferential standard. The indictment “must be upheld unless it is so defective that it does not, by any reasonable construction, charge any offense for which the defendant is convicted.” Id. at 305-06 n. 3.

In order for an indictment to be sufficient, it must accomplish three things. First, it must state each element of the crimes charged; second, it must provide the defendant with adequate notice of the nature of the charges so that the accused may prepare a defense; and third, it must allow the defendant to raise the judgment as a bar to future prosecutions for the same offense. United States v. Fassnacht, 332 F.3d 440, 444-45 (7th Cir.2003). We have emphasized that we read indictments practically and as a whole, rather than in a “hypertechnical manner.” Id. Moreover, the defendant must demonstrate prejudice from the alleged deficiency in the indictment. United States v. Webster, 125 F.3d 1024, 1029 (7th Cir.1997).

Castaldi focuses on counts three through fourteen of his indictment, which stated that defendants “did embezzle, steal, and unlawfully and willfully abstract and convert to their own use ... the moneys ... and other assets of the Northwest Indiana Joint Apprenticeship Committee [JAC]” (emphasis added). According to Castaldi, the record is clear that it was the Union, not the JAC, that was issued the grant and that the Union held the grant proceeds.

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Bluebook (online)
547 F.3d 699, 185 L.R.R.M. (BNA) 2321, 2008 U.S. App. LEXIS 22303, 2008 WL 4694916, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-castaldi-ca7-2008.