United States Court of Appeals, Fifth Circuit.
No. 94-60602.
UNITED STATES of America, Plaintiff-Appellee, Appellant-Cross-Appellant,
v.
Antonio GIRALDI, Defendant-Appellant, Appellee-Cross-Appellee.
June 19, 1996.
Appeals from the United States District Court for the Southern District of Texas.
Before BARKSDALE, DEMOSS and PARKER, Circuit Judges.
ROBERT M. PARKER, Circuit Judge:
Defendant-Appellant Antonio Giraldi ("Giraldi") was found guilty after a month long jury trial
of 18 counts of money laundering, bank fraud, misapplication of funds and conspiracy. He was
sentenced to 120 months in prison, $850 special assessment and released on a $700,000 bond pending
appeal. Giraldi's co-defendant, Maria Lourdes Reategui, was convicted during the same trial,
appealed, but dismissed her appeal after briefing.1 We affirm.
FACTS
In 1989, Giraldi was an international private banker in the Mexico market with approximately
two years of experience who worked for Bankers Trust Co. ("BT") in New York as a "relationship
manager." His job was to recruit and service the bank accounts of wealthy Mexican individuals. He
was also responsible for screening potential clients to determine if their wealth was legitimate.
Giraldi recruited a $2 million deposit from a new client named Aguirre in June 1989, that grew
over the next several months to $21 million. There is no dispute that Aguirre was laundering drug
money. The central question at trial and on appeal is whether Giraldi knew it was drug money.
Giraldi accepted Aguirre as a client without meeting him. A relationship manager could
accept a client that he did not know and had not met if the potential client had a very strong
1 Giraldi adopted the issues and arguments contained in Reategui's brief. However, that brief adds nothing of significance to Giraldi's appeal and we will not separately address the issues raised by Reategui. recommendation from a known, reputable source. Giraldi circulated an interoffice memorandum
("the Benet memo") at BT that stated that Aguirre had been referred by Alberto Benet, whose family
had been "Tier I clients" of Citibank for over 20 years.2 Giraldi was acquainted with Alberto Benet,
a wealthy Mexican businessman and general director of ABSA, a Mexican financial services company,
by virtue of having handled the Benet accounts at Citibank, Giraldi's former employer. In order to
generate business, Giraldi had given Benet BT promotional literature and his (Giraldi's) business card.
Benet testified that he had not, in fact, referred Aguirre to BT. There was evidence that the referral
may have come from another ABSA employee, Laura Machuca, who had received Giraldi's literature
2 The body of the Benet memo reads:
FOR YOUR INFORMATION WE ARE ESTABLISHING A NEW RELATIONSHIP WITH MR. RICARDO AGUIRRE FROM MONTERREY.
MR. AGUIRRE WAS REFERRED TO ME BY ALBERTO BENET, DIRECTOR OF ABSA DIVISAS CASA DE CAMBIO AND ACCIONES BURSATILES CASA DE BOLSA. I HAVE KNOWN ALBERTO FOR MANY YEARS AS HE AND HIS FAMILY HAVE BEEN TIER 1 CLIENTS OF CITIBANK FOR OVER 20 YEARS.
MR. AGUIRRE IS A RANCHER/FARMER, OWNS SEVERAL BUSINESSES SUCH AS TWO FORD DEALERSHIPS (VERA CRUZ/OAXACA) AND SEVERAL GAS STATIONS. ALBERTO BENET HAD TOLD HIM ABOUT US AND SPECIFICALLY, BTAG. THEREFORE, MR. AGUIRRE HAS DECIDED TO ESTABLISH A $2,000,000 U.S.$ ACCOUNT WITH US.
I ASKED MR. AGUIRRE TO COME AND MEET LOUIS AND ME NEXT WEEK IN THE D.F. TO DISCUSS INVESTMENT STRATEGY AND SET UP A DINNER FOR TUES. EVENING AT 8:30 P.M. HE ALSO SAID THAT HE WOULD LIKE TO REFER OTHER POTENTIAL CLIENTS TO US.
I SPOKE TO HIM ABOUT A TRUST/COMPANY AND HE SAID HE WAS VERY INTERESTED AND WE WOULD DISCUSS IT FURTHER NEXT WEEK.
INSTRUCTIONS TO TRANSFER THE $2MM WERE GIVEN TODAY AND WE SHOULD BE RECEIVING THE FUNDS BY THE END OF THE DAY. LAURA MACHUCA FROM ABSA DIVISAS HAS RECEIVED ALL THE DOCUMENTATION WHICH IS BEING SIGNED THIS WEEK. WE HAVE ALREADY RECEIVED A FAX OF THE SIG. CARDS AND I HAVE ALSO REQUESTED A LETTER OF REFERRAL FROM ABSA DIVISAS.
I WILL KEEP YOU POSTED ON ANY DEVELOPMENTS WITH THIS NEW CLIENT.
REGARDS, TONY from Benet. Further, the statement in the Benet Memo that Benet and his family had been Tier I
clients (that is a client who had at least $10 million deposited with the bank) at Citibank for over 20
years was false. The Benet family had an account with Citibank from 1983 that was worth $3 million,
and was never designated a Tier I client during 1983-1987. Because Giraldi handled Benet's Citibank
account, he would have known that the information in his memo was false.
The signature card signed by the three account holders on Aguirre's account and Giraldi was
dated 6-27-89 in New York. Giraldi's records showed that he was in Mexico City that day and could
not have witnessed the signatures of the account holders.
Eight months after Aguirre opened his BT accounts, Giraldi was asked to resign from BT.
He went to work for American Express Bank International (AEBI) and Aguirre moved his accounts
to AEBI shortly thereafter.
The government also introduced evidence that Aguirre had no legitimate source of wealth,
which Giraldi would have discovered had he investigated his background. Aguirre worked as a gas
station manager in Mexico, was unsophisticated about financial matters, and had no banking
references that showed wealth prior to 1989. Giraldi put on the bank forms that Aguirre's wealth was
derived from the sale of Mexican ranch land, as well as interest in a car dealership, ranching, and a
gas station. Later Aguirre purchased and ran a meat packing plant with part of the money from the
accounts at issue in this case. The government introduced information from training seminars
attended by Giraldi that described typical money laundering schemes that paralleled the techniques
used to manage Aguirre's accounts, although these techniques were not per se illegal.
Other evidence showed that Giraldi and a myriad of other employees from both banks met
with Aguirre over a two year period, and no one ever questioned his legitimacy. Aguirre was
reported dead following a car wreck in March 1992. The Government implies that he did not die but
went into hiding to avoid the legal consequences of his drug business.
SUFFICIENCY OF THE EVIDENCE
A. Standard of review
Giraldi challenges the sufficiency of evidence to sustain the convictions on all counts. This Court must view the evidence in the light most favorable to the jury verdict and affirm if a rational
trier of fact could find that the government proved all essential elements beyond a reasonable doubt.
United States v. Mackay, 33 F.3d 489 (5th Cir.1994). If the evidence viewed in the light most
favorable to the prosecution gives equal or nearly equal circumstantial support to a theory of guilt
and a theory of innocence, the conviction should be reversed. Id. at 493. In reviewing for sufficiency
of the evidence, we consider the countervailing evidence as well as the evidence that supports the
verdict. United States v. Wright, 24 F.3d 732 (5th Cir.1994).
B. Proof of Giraldi's knowledge of illegal nature of funds
Each count of conviction required the government to prove that Giraldi knew that Aguirre's
funds were the proceeds of some form of unlawful activity. The money laundering conspiracy alleged
in Count 1 and the substantive money laundering offenses in Counts 2 through 11, under 18 U.S.C.
§ 1956, require proof that,
Whoever, knowing that the property involved in a financial transaction represents the proceeds of some form of unlawful activity ...
Section 1956 also requires proof that the defendant knew the transaction was designed in
whole or in part to conceal or disguise the nature, the location, the source, the ownership, or the
control of the proceeds of specified unlawful activity. Absent sufficient proof of these elements, the
convictions on Counts 1 through 11 are invalid.
The bank fraud allegations charged in Counts 13 and 14 require proof that Giraldi:
... knowingly executed or attempted to execute a scheme or artifice
1) to defraud a financial institution; or
2) to obtain any of the monies, funds, credits, assets, securities or other property owned by, or under the custody or control of, a financial institution, by means of false or fraudulent pretenses, representations or promises ...
The "scheme or artifice" alleged in the bank fraud counts of the indictment describes the introduction
of drug proceeds into the banking system in a manner designed to provide drug dealers access to
loans, which is the same illegal activity alleged in each of the money laundering counts. Therefore,
in order to sustain the bank fraud convictions, there must be sufficient evidence that Giraldi
knowingly and willfully introduced the drug proceeds into the banks. Counts 15 through 18 alleged violation of 12 U.S.C. § 630, by misapplying bank funds
knowingly and willfully, with the intent to injure and defraud the bank, based on false and fraudulent
pretenses and representations. The bank's money was allegedly misapplied by loaning it to the drug
dealers, who used their drug proceeds on deposit as collateral for the loans. The alleged false and
fraudulent pretenses and representations were Giraldi's statements concerning the source of Aguirre's
wealth. It is well established that the government must prove that Giraldi knowingly participated in
the deceptive or fraudulent transaction. See United States v. Shaid, 916 F.2d 984 (5th Cir.1990) cert.
denied, 502 U.S. 1076, 112 S.Ct. 978, 117 L.Ed.2d 141 (1992).
Giraldi contends that the evidence was insufficient to establish that he knew Aguirre's funds
were t he proceeds of unlawful activity. There is no direct evidence of Giraldi's knowledge that
Aguirre's funds were derived from illegal drug sales. Giraldi contends that he made a mistake by not
discovering the illegal source of Aguirre's funds, and t hat the government's proof that he was
negligent or that he "should have known" is not sufficient for conviction.
The government answers that the circumstantial evidence was sufficient for the jury to
conclude that Giraldi did in fact know or was willfully blind to the source of Aguirre's funds. This
argument is supported by the evidence that Giraldi was specifically charged with investigating and
knowing his client, was dishonest about the fact that he had not followed the prescribed procedures
prior to taking the initial deposit, failed to properly "paper" various transactions during his
relationship with Aguirre and took several actions to control the damage once the authorities began
to investigate Aguirre's holdings.
After a careful review of the record, we have concluded that the evidence is sufficient to
sustain Giraldi's conviction.
In addition to the falsehoods contained in the "Benet memo," Giraldi either personally made
or approved false statements in banking records concerning the source of funds coming into and the
use of funds flowing out of the Aguirre account. The evidence revealed that Giraldi stated that
Aguirre was "invested 100 percent in deposits with Texas banks" prior to opening his BT accounts.
The evidence of wire transfers that tracked the source of the money Aguirre deposited showed that it came from cash deposits into and temporary placement with currency exchange houses rather than
deposits with Texas banks. Likewise, the statements concerning the use to which funds from
Aguirre's loans and letters of credit were put were false.
In addition to the false statements in the bank records, Giraldi made false statements to a
government agent named Iglio who was investigating irregularities in one of Aguirre's accounts
shortly after Aguirre's reported death. At that time, the government had seized Green Mountain, an
AEBI account for which Giraldi served as account representative, pursuant to a criminal investigation
of Rogelio Rodriguez. Aguirre, Aguirre's wife and daughter each owned an interest in Green
Mountain and Rodriguez was listed as the fourth owner. This conversation was recorded without
Giraldi's knowledge and the recording and transcript were admitted into evidence at trial. During that
conversation, Iglio asked Giraldi how he got hooked up with Aguirre. Giraldi lied to Iglio, saying
that Aguirre was a client of Banker's Trust where he worked earlier, and had been referred by
Banker's Trust. Iglio also asked Giraldi about the relationship between Rogelio Rodriguez and
Aguirre. Giraldi claimed that Aguirre had only recently met Rodriguez, who had "never had anything
to do with Green Mountain," except that Aguirre had guaranteed a $1.5 million letter of credit for
him with Green Mountain's assets, because Aguirre was a generous, naive person. In fact, Giraldi's
records, admitted into evidence at trial, showed that Aguirre and Rodriguez were partners in various
enterprises and that overlapping ownership by Green Mountain, Aguirre, Rodriguez and seven other
trust accounts and businesses formed a complex web of financial relationships that Giraldi's taped
statements omitted or denied.
In addition to the false statements in bank records and on the Iglio tape, evidence was
introduced concerning Giraldi's extensive background and experience in international banking. He
had attended banker training seminars that outlined typical money laundering schemes that were very
similar to the banking practices that Giraldi used on behalf of Aguirre. He had been trained and even
served as a trainer in know-your-client practices that, had they been employed, would have exposed
Aguirre's wealth as illegitimate.
Further evidence showed that the wife of the drug lord Abrego was named on the original Aguirre Swiss bank account without proper documentation. When proper documentation was
requested, she withdrew from ownership rather than provide it. The government offered t his as
circumstantial evidence that Giraldi knew that the money in the Aguirre accounts was not legitimate.
Although there is no requirement that the Government provide a motive for the charged
offense, there was evidence that the motive for Giraldi's crime was the pressure on international
bankers to recruit new clients and the concomitant professional and monetary success that comes to
those who are able to produce.
Giraldi offers alternate explanations for the evidence at trial. He claims that the Benet memo
was partly true, in that the referral came through Benet's colleague Laura Machuca, and that there
was no proof that Giraldi believed anything in the memo was false when he made out the memo. The
problem with this explanation is that even if the jury were willing to assume Giraldi made a mistake
about the original referral, he did not correct it once he talked to Benet and discovered the mistake
and even repeated the information in subsequent banking documents. Further, inaccurate information
about the size of Benet's deposits and the length of his relationship with Citibank was clearly within
Giraldi's knowledge at the time the memo was written and was never corrected.
Giraldi variously describes away the evidence as memory lapses, misstatements, sloppiness,
carelessness, failure of Giraldi to be aware of the falsity of statements, both oral and written, and that
certain practices, such as vague purpose statements on loan applications, were "standard procedure"
in international banking.
This is a close case. However, it is not especially remarkable given that mental state is almost
always proved by circumstantial evidence from which the jury must infer guilt beyond a reasonable
doubt. Viewed in the light most favorable t o the prosecution, the evidence is sufficient to sustain
Giraldi's convictions. A rational jury could have found it incredible that carelessness and honest
mistakes could account for the complexity of financial gerrymandering required to give Aguirre's
transactions the appearance of legitimacy.
Giraldi's additional challenges to the sufficiency of the evidence on the bank fraud and
misapplication counts are without merit. GIRALDI'S MOTION FOR NEW TRIAL
The standard of review for the denial of a new trial is abuse of discretion. United States v.
Baytank (Houston), Inc., 934 F.2d 599 (5th Cir.1991). This Court must affirm the conviction if a
rational jury could have found the elements of the crimes beyond a reasonable doubt. United States
v. Dula, 989 F.2d 772, 778 (5th Cir.), cert. denied, --- U.S. ----, 114 S.Ct. 172, 126 L.Ed.2d 131
(1993). Review does not encompass weighing the evidence or judging the credibility of witnesses.
Id.
B. Verdict contrary to the evidence
Giraldi moved for a new trial arguing that the verdict on all counts was contrary to the great
weight of the evidence. Giraldi advances no additional arguments in this ground of error but asks the
Court to perform the sufficiency review under this additional standard and reverse "in the interest of
justice." For the reasons stated above, we conclude that a rational jury could have found all of the
elements of the crimes beyond a reasonable doubt. Therefore, the district court did not abuse its
discretion in denying Giraldi's motion for new trial.
C. Government misconduct during closing argument
The motion for mistrial also complained of government misconduct during closing argument.
Throughout the trial, the government emphasized the false statement, contained in the Benet
memo, that Benet referred Aguirre to the bank. The defense's theory was that the referral came
indirectly from Benet, through his co-employee Laura Machuca. During the rebuttal portion of final
argument the government attorney said:
Let's go back to this memorandum. Let's talk about Laura Machuca.... They asked why Laura Machuca is not here. You know why? Because the government alleges that this whole thing is false.
Did you see a letter of referral from anyone in this case? We showed you every document. There is no letter of referral here. Do you think that there was a—there is a Laura Machuca? Do you think if Laura Machuca had anything to do with this that there would have been a letter of referral in that file? You're doggone right because that would have helped in terms of covering up who Mr. Aguirre is. But you didn't see a letter of referral, that's because this isn't true either.
According to Giraldi, the government's argument amounted to a claim that Laura Machuca had nothing to do with referring Aguirre to Giraldi and that Machuca did not even exist. Such a
claim, if made, was false and misleading. The government had taken Laura Machuca's deposition.
In that deposition, Machuca testified that Benet gave Giraldi's telephone number to Machuca, who
in turn gave it to Aguirre in response to Aguirre's request for information about foreign investments.
This deposition testimony was not admitted into evidence, and Machuca, a Mexican citizen, was not
available under the court's subpoena power.
The government responds that 1) the prosecutor was not challenging the existence of
Machuca, but was instead challenging the existence of a letter of referral from Machuca; 2) the
prosecutor was responding to defense counsel's argument, taking the position that Machuca did not
do the things attributed to her by the defense and, if she did, the defense would have presented
documentary evidence in the form of a letter of referral; and 3) if the comment is construed as
challenging the existence of Machuca, it was a rhetorical question suggesting that she could not
testify to the facts the defense implied she would, rebutting the defense insinuation that the
government had withheld her exculpatory evidence.
The prosecutor's comment clearly implies that Machuca did not exist. However, there was
no danger that the jury was misled concerning her existence, given Benet's extensive testimony about
her. The prosecutor's other point, that Machuca did not provide a letter of referral for Aguirre, is a
sound inference from the evidence. Giraldi's argument is based on the fact that Machuca provided
Aguirre with Giraldi's name, bank name and business number. The "let ter of referral" which the
prosecutor pointed out was missing was a statement that Machuca personally knew that Aguirre's
wealth was legitimate. There is no evidence that Machuca had any personal knowledge of the source
of Aguirre's wealth.
Given the context within which the comment was made, the district court's denial of Giraldi's
motion for new trial was not an abuse of discretion.
ADMISSION OF EVIDENCE CONCERNING EXTRINSIC MATTERS
We review questions concerning the admissibility of evidence for abuse of discretion. United
States v. Hays, 872 F.2d 582 (5th Cir.1989). The district court admitted evidence regarding Giraldi's banking relationship with Jose
"Chucho" Castellanos. Giraldi managed Castellanos's deposits at BT, which grew in 1988-89 from
$750,000 to $8 million. When Giraldi moved from BT to AEBI, Castellanos eventually transferred
his account to AEBI. Giraldi's successor at BT became suspicious of Castellanos because he could
be reached only with pagers and codes. In 1991, when BT asked Castellanos for identification, such
as a valid passport or driver's license, he closed out the remainder of his BT account. At AEBI,
Castellanos's and Aguirre's accounts were cross collateralized. Shortly after the execution of search
warrants for records pertaining to Aguirre's accounts, Giraldi took steps to remove the link between
the two depositors. Also, there was a document that stated that Castellanos had been referred by a
"former Citibank client." The government argued that statement implied that Benet provided the
referral, which he did not.
Giraldi argues that there was no evidence that 1) Castellanos was a drug dealer or that his
wealth was illegitimate; or 2) that Castellanos had any connection to the alleged conspiracy to
launder drug proceeds with Aguirre. He asks this Court to conclude that there was no rational
connection between Castellanos and the charged offense, and that the evidence should not have been
admitted. Giraldi relies on United States v. Hays, 872 F.2d 582 (5th Cir.1989), where this Court
reversed a conviction based on the admission of irrelevant, highly prejudicial evidence. He also
argues that improper admission of evidence may constitute a violation of due process under the Fifth
Amendment, citing Hills v. Henderson, 529 F.2d 397 (5th Cir.), cert. denied, 429 U.S. 850, 97 S.Ct.
139, 50 L.Ed.2d 124 (1976).
The similarities in the histories of the two depositors, their cross collateralized accounts and
Giraldi's reaction to the search warrant all support the trial court's conclusion that the Castellanos's
evidence was admissible as part of the conspiracy. Because it was neither irrelevant nor improper,
Giraldi's arguments are without merit.
JURY INSTRUCTIONS
Giraldi contends that the district court erred in refusing his requested jury instructions
concerning: a) good faith defense; b) "misapplication" means more than maladministration; c) violation of civil statute or regulation does not necessarily constitute criminal offense; and d) loan
approval for debtor who transfers loan proceeds to third party.
The standard of review on appeal from the denial of a requested jury instruction is whether
the district court abused its discretion. United States v. Pennington, 20 F.3d 593, 600 (5th Cir.1994).
This court must view the evidence in the light most favorable to Giraldi in determining if there is
sufficient evidentiary foundation for a requested instruction. United States v. Lewis, 592 F.2d 1282,
1286 (5th Cir.1979). The dist rict court abuses its discretion in denying a requested instruction if:
1) the requested instruction is substantively correct; (2) the requested instruction is not substantially
covered in the charge given to the jury; and (3) the omission of the instruction would seriously impair
the defendant's ability to present his defense. United States v. Storm, 36 F.3d 1289, 1294 (5th
Cir.1994), cert. denied, --- U.S. ----, 115 S.Ct. 1798, 131 L.Ed.2d 725 (1995).
A. Good faith defense
Giraldi's requested instruction stated that good faith is a complete defense, inconsistent with
knowingly and willfully committing the offenses alleged in the indictment. The district court stated
that its charge would incorporate in a general sense everything that both sides had requested and
would "make each count subject to the requirement that the term "knowingly' and "willfully' be
proven." The charge given defined the term "knowingly" as "the act was done voluntarily and
intentionally" and "not by accident or mistake." The term "willfully" was defined as "the act was
committed voluntarily and intentionally, that you did it because you wanted to do it and with a
specific intent to do something that the law forbids." Also, the jury was instructed that to convict on
the bank fraud and misapplication counts they had to find that Giraldi acted with intent to injure or
defraud.
Giraldi cites a Tenth Circuit case which held that the refusal to give the requested good faith
instruction is reversible error if the evidence supported such an instruction. United States v.
Haddock, 956 F.2d 1534, 1547 (10th Cir.), cert. denied, 506 U.S. 828, 113 S.Ct. 88, 121 L.Ed.2d
50 (1992). Clear precedent in the Tenth Circuit holds that instructions that do no more than define
"willfulness" and "intent to injure or defraud" do not adequately convey a good faith defense to the jury. Id.
The Fifth Circuit has taken a different road on this issue. Here, a district court may refuse
to submit an instruction regarding good faith if the defense of good faith is substantially covered by
the charge given and the defendant has had the opportunity to argue good faith to the jury. United
States v. Storm, 36 F.3d at 1294. The charge given here, (omitting specific good faith instruction,
but detailing specific intent, and defining "willfully" and "knowingly") was not an abuse of discretion
under Fifth Circuit law. See United States v. Rochester, 898 F.2d 971, 978-979 (5th Cir.1990).
B. "Misapplication" means more than maladministration
Giraldi requested the following instruction in connection with the misapplication counts.
Willful misapplication ... means more than maladministration. The acts with which [Giraldi is] accused ... are prohibited misapplications if made in bad faith, not in the honest exercise of official discretion. When actions are performed in good faith and without fraud, for the actual or supposed advantage of the bank, there is no criminal responsibility on the part of the bank officer, although the transaction may be injudicious and unsafe, and even though the transaction results is a loss or damage to the bank. The statute does not punish mere acts of maladministration or negligent use of bank funds.
The district court denied this request. The jury was instructed that, in order to convict on the
misapplication counts, it had to find that Giraldi knowingly misapplied funds belonging to the
institution and that he acted with the intent to injure or defraud the bank. The following definitions
were then given:
To willfully misapply a bank's money or property means an intentional conversion of such money or property to one's own use and benefit, or for the use and benefit of another, knowing that one had no right to do so.
To act with the intent to defraud means to act with the intent to deceive or cheat someone, ordinarily for the purpose of causing some finance [sic] loss to another or bringing about some financial gain to oneself.
Giraldi presented evidence and argument that the errors on Giraldi's paperwork were the
result of carelessness that did not satisfy the mens rea necessary for a misapplication conviction.
In United States v. Southers, 583 F.2d 1302, 1306-1307 (5th Cir.1978) this Court found that
it was not error for the district court to refuse a requested instruction that specified that
maladministration and bad judgment were not crimes, where the court's instruction on intent was
comprehensive and a correct statement of the law. Here, as in Southers, the jury could not have found Giraldi guilty on the basis of the instructions given merely because he committed unintentional
or negligent acts of maladministration. We find no abuse of discretion in the district court's denial
of Giraldi's requested misapplication instruction.
C. Violation of civil statute or regulation does not necessarily constitute criminal offense
The district court denied the following jury instruction requested by Giraldi:
You have heard testimony that there is a civil banking regulation requiring financial institutions to retain a record of each extension of credit in excess of $10,000 which identifies the nature or purpose of the extension of credit. A violation of a civil statute or regulation is not a criminal offense. Such a violation would merely subject an institution or, in some cases, an individual, to civil penalties which is not the same thing as a crime.
You must not consider any evidence concerning civil recording regulations in deciding if the defendant committed the acts charged in the indictment. The only reason that this evidence was admitted is for the purpose of determining, if it does aid your determination, whether or not the defendants had the intent and purpose of violating the law, as charged in the indictment. Before you may consider such evidence, you must first be convinced beyond a reasonable doubt from other evidence in the case that the defendant violated the law as charged in the indictment. If you are so convinced, then this evidence may be considered by you, if you believe it helpful, in determining whether or not the defendant had a motive or intent to commit the crimes alleged in the indictment.
Giraldi complains that the government "constantly" introduced evidence and argument
concerning violation of civil regulations, and the requested instruction was an attempt to dispel
prejudice created thereby. He also claims that the instruction is a proper statement of the law, based
on United States v. Cordell, 912 F.2d 769, 776 (5th Cir.1990).
The government points out that Giraldi did not object to the evidence or argument of which
he now complains. United States v. Christo, 614 F.2d 486, 492 (5th Cir.1980), forbids introducing
evidence of civil banking statute violations solely for the purpose of proving criminal misapplication;
however, it does not hold that such evidence can never be introduced in a misapplication case.
United States v. Stefan, 784 F.2d 1093, 1098 (11th Cir.) (cited with approval in United States v.
Saks, 964 F.2d 1514, 1523 (5th Cir.1992)), cert. denied, 479 U.S. 1009, 107 S.Ct. 650, 93 L.Ed.2d
706 (1986). References to banking regulations are appropriate in a criminal trial to explain the role
of federal regulators, the rules by which the bank is governed, and the stakes in a bank fraud case.
While obviously, each case depends upon its own facts, if the regulations are given too much
emphasis, the trial may be impermissibly infected. Saks, 964 F.2d at 1523. The governm ent also contends that the portion of the requested instructions that states that the jury "may not consider" the
evidence in determining whether the charged acts occurred is not a correct statem ent of the law.
Even if the requested instructions were correct, the government contends that the court did not abuse
its discretion in denying the request because the evidence was properly admitted and used at trial, and
this was not a case where over-emphasis required corrective instruction. We find that the denial of
this requested instruction was not an abuse of discretion.
D. Loan approval for debtor who transfers loan proceeds to third party
The district court refused Giraldi's requested jury instruction that, "You are instructed that
you must acquit [Giraldi] of violation of 12 U.S.C. § 630, if the person who signed the note knew
that he was expected to pay it and was able to do so." Giraldi argues that the requested instruction
is a correct statement of the law under United States v. Gens, 493 F.2d 216 (1st Cir.1974).
In United States v. Parekh, 926 F.2d 402, 407 n. 8 (5th Cir.1991), this Court explained that
Gens stood for the proposition that "[a] debtor's financial ability to repay the note is thus necessary
but not sufficient to render a loan legitimate." Although the debtor's knowledge and ability to repay
the loan are relevant to the issue of the required intent, they are not dispositive of the issue.
Therefore the requested instruction is not a correct statement of the law and the district court did not
abuse its discretion by denying the request.
CUMULATIVE EFFECT OF ERRORS
Giraldi contends that the cumulative effect of the errors requires reversal of his convictions.
He presents no new information or argument to support this ground of error. Seeing no error to
cumulate, we reject this argument.
GOVERNMENT'S CROSS APPEAL: SENTENCING GUIDELINES
The Government contends that the district court misapplied the sentencing guidelines by
giving Giraldi a 4-level reduction for his role in the offense.
The standard of review for a reduction for role in the offense is the clearly erroneous
standard. See United States v. Watson, 988 F.2d 544, 550 (5th Cir.1993).
U.S.S.G. § 3B1.2 states that a defendant may receive a downward adjustment of four levels if he was a minimal participant in the criminal activity. Giraldi's Presentence Report (PSR) did not
recommend that he was entitled to these four points and Giraldi objected. The district court awarded
him the four points, saying, "It shouldn't be, but I will give it to him ... and I will tell you why it
shouldn't be. Simply because of the nature of his role, but I can see the scheme of things. That is all
right. I will give you those four points."
A downward adjustment under § 3B1.2 is appropriate where a defendant was substantially
less culpable than the average participant. United States v. Gadison, 8 F.3d 186, 197 (5th Cir.1993).
The government contends that the district court's statements on the record amount to an
acknowledgment that there was no evidentiary basis under the guidelines for the downward
adjustments and that therefore the district court did not correctly apply the guideline. Further, the
government contends that the record does not support a finding that Giraldi was entitled to a
downward adjustment because he played an integral role in the money laundering conspiracy.
Giraldi reads the district court's comments as finding that there was a basis for the downward
adjustment and argues that the record supports that finding. Given that there was no evidence that
Giraldi and co-defendant Reategui benefitted financially from the scheme except in the sense that they
enhanced their careers at the bank by bringing in a large client, while the other co-defendants
laundered large quantities of money and then withdrew it for their personal use, minimal participant
status is supported by the record.
RELEASE PENDING APPEAL
The Government contends that the district court erred in ordering Giraldi's release pending
appeal without finding that he had demonstrated a substantial question of law or fact likely to result
in reversal or a reduced sentence.
The government's position is that the district court did not make the requisite finding and that
there was no basis on which the court could have made such a finding.
Giraldi responds that the district court did make the requisite finding, quoting from the record:
THE COURT: I don't find that [Giraldi] is a flight risk.
ATTORNEY: Referring to the next section. The statue [sic] specifically says the Court must also find there are no issues that could possibly result in reversal of the trial. THE COURT: I don't find so.
The issues raised by Giraldi on appeal are not frivolous so as to call into question that finding.
CONCLUSION
For the foregoing reasons, we affirm Giraldi's conviction and sentence, as well as the order
for his release pending appeal. AFFIRMED.