United States v. Javier Estepa

998 F.3d 898

• Court: Court of Appeals for the Eleventh Circuit
• Decided: May 25, 2021
• Docket: 19-12272
• Status: Published

Opinion

USCA11 Case: 19-12272 Date Filed: 05/25/2021 Page: 1 of 30

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT ________________________

No. 19-12272 ________________________

D.C. Docket No. 1:18-cr-20530-UU-1

UNITED STATES OF AMERICA,

Plaintiff - Appellee,

versus

JAVIER ESTEPA, DIEGO ALEJANDRO ESTEPA VASQUEZ,

Defendants - Appellants.

________________________

Appeals from the United States District Court for the Southern District of Florida ________________________

(May 25, 2021)

Before LAGOA, ANDERSON, and MARCUS, Circuit Judges.

LAGOA, Circuit Judge: USCA11 Case: 19-12272 Date Filed: 05/25/2021 Page: 2 of 30

Javier Estepa and his brother, Diego Estepa-Vasquez, appeal their convictions

and sentences for conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349;

and wire fraud, in violation of 18 U.S.C. § 1343. Specifically, the brothers argue

that the evidence at trial was not legally sufficient to warrant those convictions

because (1) the conduct the government alleged, even if true, did not constitute a

fraudulent scheme; and (2) the government did not prove that the brothers had the

requisite mens rea. For the reasons discussed below, we affirm.

I. FACTUAL AND PROCEDURAL BACKGROUND

Javier1 owns Aaron Construction Group, Inc. (“Aaron Construction”), which

he operates with Diego. Aaron Construction’s business included contracting with

Miami-Dade County (the “County”) to perform repair work in public housing units

that were partially funded by the federal government.

The essential facts, viewed in light most favorable to the government, are as

follows. Aaron Construction successfully won its bids on the three Requests for

Price Quotes (“RPQ”) specified in the second superseding indictment. In 2014,

Aaron Construction won its bid on RPQ #152574. In 2015, Aaron Construction won

its bid on RPQ #158639. And, in 2016, it won its bid on RPQ #171090. The County

1 For ease of reference, we refer to the defendants by their first names, Javier and Diego.

2 USCA11 Case: 19-12272 Date Filed: 05/25/2021 Page: 3 of 30

paid Aaron Construction a total of $3,977,438.47 from January 2014 through

September 2016 for these bids.

To obtain a contract for a project that involves more than $2,000 in federal

funds, the contractor must agree to comply with the Davis-Bacon Act (the “Act” or

“Davis-Bacon”), which requires contractors and subcontractors to pay mechanics

and laborers the prevailing local wage for their work, as determined by the United

States Secretary of Labor.2 40 U.S.C. § 3142(a)–(b). The Act and its implementing

regulations include several mechanisms to encourage and monitor compliance. For

example, contractors must, on a weekly basis, create and preserve a certified payroll

document that lists all employees, their hours worked, and their pay rate. See 40

U.S.C. § 3145(a); 29 C.F.R. § 3.4(b). Knowingly and willfully submitting a

materially false certified payroll statement is a felony. See 40 U.S.C. § 3145(b); 18

U.S.C. § 1001. If the contractor pays covered employees at a rate lower than the

prevailing local wage, the contracting agency may withhold from the contractor the

amount that should have been paid to the employees. See 40 U.S.C. § 3142(c)(3).

The contracting agency may also terminate the contract for non-compliance with the

2 By its terms, the Act applies only to contracts to which the federal government or the District of Columbia is a party. 40 U.S.C. § 3142(a). Related provisions, however, extend the Act’s wage requirements to federally-funded housing projects. See 29 C.F.R. pt. 1, app. A; id. § 5.1. In any event, the bid requests involved in this case expressly refer to “Davis-Bacon” compliance. 3 USCA11 Case: 19-12272 Date Filed: 05/25/2021 Page: 4 of 30

Act. See id. 40 U.S.C. § 3143. All of these requirements for contractors equally

apply to subcontractors.

Aaron Construction regularly bid for, and sometimes obtained, federally-

funded contracts with the County’s Public Housing and Community Development

(“PHCD”)—a public housing agency managing over 9,200 units of public and mixed

income housing in family and elderly housing developments—to repair vacant

housing units and perform other miscellaneous work. The bids were in response to

the County issuing RPQs and invitations for bids seeking bids for new projects for

the renovation and repair of public housing units. Each RPQ contains a target price

that takes into account the requirement for contractors to pay Davis-Bacon compliant

wages. After receiving bids, the County awards the contract to the lowest bidder,

provided that the bid conforms to the material terms and conditions of the County’s

invitation to bid associated with the RPQ.

As noted above, Aaron Construction won three RPQs from the County. Aaron

Construction’s bids for all three RPQs acknowledged the Act’s wage requirements

and represented that Aaron Construction did not expect to use subcontractors. Yet

when federal agents executed a search warrant on Aaron Construction’s primary

office after opening an investigation into the company, they discovered

subcontractor agreements in effect during each RPQ, including more than fifty

subcontractor agreements for 2016 alone. These agreements indicated that Aaron

4 USCA11 Case: 19-12272 Date Filed: 05/25/2021 Page: 5 of 30

Construction would pay the subcontractors a flat rate regardless of hours expended.

Indeed, at trial, several subcontractors testified that the Estepas did not ask them

about the amount of hours the subcontractors and their workers worked and, instead,

they paid them a per-unit flat fee, regardless of whether they worked overtime.

Despite not inquiring into the actual hours the subcontractors worked, the

Estepas signed several certified payroll documents as accurately representing which

employees were present at job sites and the hours those employees worked. For

example, Javier signed certified payroll documents for the pay periods ending

September 7 and 14, 2014, that listed Pedro Guzman as working in Miami.

However, U.S. Department of Homeland Security records revealed that Guzman was

in fact out of the country during those periods. Rather, Rony Sandoval was the

person performing the work attributed to Guzman. Sandoval used Guzman’s name

and social security number because Sandoval was not legally authorized to work in

the United States, and Aaron Construction would write checks made out to Guzman,

who, in turn, would pay Sandoval. In another example, Javier and Diego both

certified that Nicolas Segura worked certain hours for the week ending April 12,

2015. Segura, however, testified that he was paid a flat fee, never submitted his

hours to Aaron Construction, and was at all times a subcontractor rather than an

employee of Aaron Construction.

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Occasionally, a contractor needs to hire a subcontractor after beginning work

to address an unanticipated problem even though the contractor’s bid did not indicate

it would utilize subcontractors. Should that occur, the contractor is required to notify

the County within ten business days of the subcontractors it plans to use.

Additionally, the information about the new subcontractor should be included in the

final estimate for payment packet for a project, which contractors must submit to the

County before the County issues the payment. Despite Aaron Construction using

subcontractors for the three bids, the final estimate for payment packets for those

projects indicated that Aaron Construction did not use subcontractors.

On June 21, 2018, a grand jury indicted Javier and Diego in connection with

the three public housing repair contracts that Aaron Construction procured following

successful bids to the County. The grand jury subsequently returned two

superseding indictments. The second superseding indictment alleged that the

brothers agreed to, and did in fact, scheme to “unlawfully enrich themselves by

securing PHCD bid awards and causing [the County] to make payments on those

contracts by making materially false and fraudulent representations,” and by

concealing or omitting “material facts concerning, among other things, their

utilization of subcontractors, the number of workers employed on the construction

projects, and the status of those workers as full-time employees of Aaron

Construction.” Count 1 of the second superseding indictment charged the brothers

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with conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349. Counts 2

through 4 charged the brothers with substantive wire fraud, in violation of 18 U.S.C.

§ 1343. Counts 5 through 7, which applied to Javier, and Count 8, which applied to

Diego, charged the brothers with making false statements to the County’s PHCD,

which was acting as an agent in implementing a program funded by the federal

government, in violation of 18 U.S.C. § 1001(a)(2). Count 9 charged Javier with

tampering with a witness, in violation of 18 U.S.C. § 1512(b)(3).

Following pretrial motions, the case proceeded to jury trial at which Javier

and Diego were jointly tried. At trial, the government argued that the testimony and

evidence demonstrated that the Estepas engaged in a scheme to underpay workers in

violation of the Act and to conceal that underpayment from the County, e.g., by

hiring and illegally paying subcontractors at flat pay rates, by not reporting the use

of those subcontractors to the County, and by classifying some of those

subcontractors as employees of Aaron Construction. And, as a result of this scheme,

Aaron Construction was able to artificially lower its costs and submit—and win—

bids that competitors who paid the requisite wages may not have been able to afford,

and the County paid Aaron Construction nearly $4 million between January 2014

7 USCA11 Case: 19-12272 Date Filed: 05/25/2021 Page: 8 of 30

and September 2016 in connection with those bids.3 This testimony and evidence

are summarized as follows.

First, Indira Rajkumar-Futch, a procurement manager for the County’s PHCD

who oversees construction contracts at various public housing units located within

the County, testified. Rajkumar-Futch testified that she reviewed the specific bids

and contracts related to Aaron Construction at issue in the case and explained the

bidding and award process for projects that the County advertises to potential

contractors, including how PHCD establishes the initial amount for the potential

contract and the RPQ system. She noted that the majority of funds PHCD received

for its projects were from the federal government and that a contractor, once being

awarded a bid, must comply with the Act’s requirements as to worker wage rates,

including as to its subcontractors. She also explained that a contractor is required to

report whether it intends to use subcontractors and that, if it initially does not intend

to use subcontractors but later decides to do so, the contractor must inform the

County within ten business days of the subcontractors it intends to use.

The government, through Rajkumar-Futch, introduced into evidence

documents related to the 2014, 2015, and 2016 RPQs on which Aaron Construction

successfully bid. Rajkumar-Futch testified that Aaron Construction’s formal bids

3 The Estepas stipulated at trial that these payments from the County were interstate wire payments. 8 USCA11 Case: 19-12272 Date Filed: 05/25/2021 Page: 9 of 30

for those projects indicated that it would not use subcontractors and that it would

comply with the Davis-Bacon requirements. She also testified that she met with

both Javier and Diego, and neither ever informed her that they planned to use

subcontractors as to the three RPQs. And she stated that if she knew a bidder was

providing false information on the forms submitted with the bid, she would not

accept the bid. On cross-examination, Rajkumar-Futch agreed that Aaron

Construction had a good reputation with the public housing community and that the

County approved of the work that Aaron Construction had done for the three RPQs.

However, she noted that good work did not excuse lack of compliance with the Act.

She also stated that Aaron Construction had not been fined by the County for Davis-

Bacon wage violations.

Agent Matthew Broadhurst, an Assistant Special Agent working in the Office

of the Inspector General for the U.S. Department of Labor, testified for the

government. Broadhurst explained that the Department of Labor opened an

investigation into Aaron Construction and that he was the evidence custodian for the

search warrant executed on the company’s office. Broadhurst testified that the

investigators found subcontractor agreements for 2013, 2014, 2015, and 2016, as

well as waivers and releases of lien, invoices, checks, and payment reports related

to subcontractors and the RPQs at issue. Broadhurst also testified that, during the

course of the investigation, he saw Guzman was listed as an employee of Aaron

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Construction and that Guzman was not in the country during most of September

2014 based on travel records. Aaron Construction’s certified payroll documents,

which were signed by either Javier or Diego, and payroll checks, however, showed

Guzman working on days when he was not in the United States. As to the certified

payroll documents, Broadhurst testified that the forms required the signer to attest

to the accuracy of the reported data—employees’ hours and wages—and to confirm

compliance with Davis-Bacon determinations, and further provided that the willful

falsification of any of the statements contained within the form could subject a

contractor or subcontractor to criminal prosecution.

Yanith Barrera, an owner of a roofing company who did subcontracting work

for Aaron Construction, also testified. Barrera stated that his first subcontractor

agreement with Aaron Construction was in early 2017 on the 2016 RPQ that Aaron

Construction was awarded. Barrera stated that he was paid for this project via

payroll checks and checks to his company, but that Javier never told him he was an

employee of Aaron Construction. Barrera stated that the Department of Labor had

interviewed him in April and October 2018.

Next, Mauricio Jimenez testified, explaining that he owned a construction

company and entered into a subcontractor agreement with Aaron Construction for

public housing work. Jimenez testified that he was paid a fixed price for each unit

he worked on as a subcontractor, that no one at Aaron Construction ever asked him

10 USCA11 Case: 19-12272 Date Filed: 05/25/2021 Page: 11 of 30

the amount of hours he or his workers worked, and that, in his invoices to Aaron

Construction, he never listed the amount of hours his workers worked. He stated

that he and his workers worked at least sixty hours per week and were never paid

overtime. He also testified that neither he nor his workers were ever employees of

Aaron Construction and that Javier and Diego told him that they needed the names

and social security numbers of three of his employees for payroll, even though

Jimenez was employing seven workers at the time. Jimenez was paid with a payroll

check and another check for his company, which he would use to pay his other

workers. Jimenez also testified that Diego and Javier never told him not to bring

undocumented workers to complete the work. Jimenez stated that he was

interviewed by someone from the County while at the construction site. Jimenez

also testified he never saw or filled out Aaron Construction’s certified payroll

document that stated he was an employee of Aaron Construction and listed the

alleged amount of hours he worked during the week. On cross-examination, Jimenez

stated he never filed a complaint about not being paid a proper wage and that Aaron

Construction paid him the full amount of money pursuant to the subcontractor

agreement.

Franciso Trujillo, a construction manager with the County’s PHCD, also

testified as a government witness. Trujillo provided testimony similar to Rajkumar-

Futch’s testimony on the RPQ and bidding processes, including the fact that

11 USCA11 Case: 19-12272 Date Filed: 05/25/2021 Page: 12 of 30

successful bidders were required to inform the County about the subcontractors they

were using by the end of the project. He also testified that the County relied upon

the contractors being truthful when submitting their bids. He agreed that

subcontractor employees should not appear on a contractor’s certified payroll.

Trujillo stated that, while Aaron Construction did “good work” and had a “good

reputation,” his opinion would have changed if he knew the documents that Aaron

Construction had submitted, which were signed by either of the Estepas, were not

correct or if the employees were not being paid an hourly wage or overtime. Trujillo

also confirmed that contractors such as Aaron Construction were not supposed to

have partially filled out HUD interview forms, which are used to determine if Davis-

Bacon wage rates are being used by a contractor. On cross-examination, Trujillo

agreed that he had conducted five performance evaluations on projects Aaron

Construction had worked, grading them to have “superior performance.” He could

not recall if he had received any complaints that Aaron Construction failed to pay

one of its employees or subcontractors. But, on redirect, he testified that, even if the

work is done well, it was not acceptable to the County that Aaron Construction did

not comply with the Davis-Bacon requirements.

Anna Holder, the vice president of client services for FrankCrum, a company

providing payroll and worker’s compensation services to Aaron Construction,

testified as a government witness. Holder testified that Javier had signed a contract

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with FrankCrum specifying the services to be provided, which stated that eighty

percent of Aaron Construction’s work was subcontracted and that FrankCrum did

not process hours for subcontractor employees.

Nicolas Segura also testified as a government witness. Segura, who was

operating a company providing maintenance and electrical services, had a

subcontracting relationship with Aaron Construction. Segura did not consider

himself to be an employee of Aaron Construction. He testified that Aaron

Construction paid him lump sums for the subcontracting work he and his company

did and that the amount of pay did not differ based on the amount of hours actually

worked. He stated that he would send weekly invoices and was paid by Aaron

Construction via two checks—one made out to him and one made out to his

company. Segura stated that he had other workers, including his brother, help with

the subcontracting work for Aaron Construction—whom he paid using the checks

he received from Aaron Construction—and that he did not report his or any of the

other workers’ hours to anyone at Aaron Construction. He also was never asked by

the Estepas for the hours he worked. Segura was shown certified payroll documents

from Aaron Construction indicating that he and his brother worked thirty-two hours

at a rate of $10 per hour for several pay periods, but Segura indicated he never told

Aaron Construction that either of them had worked that amount. On cross-

13 USCA11 Case: 19-12272 Date Filed: 05/25/2021 Page: 14 of 30

examination, Segura stated that he was interviewed twice by government agents and

that no one from Aaron Construction ever told him to hide the method of payment.

Rony Sandoval also testified for the government. Sandoval, who does not

have legal immigration status, stated that he met with Javier, discussed doing

remodeling work with him, and became an “employee” of Aaron Construction.

Sandoval stated that the amount he was paid to remodel units was not based on the

amount of hours he worked, but instead was a flat rate, and that he was not paid extra

if the work took longer than anticipated. He also testified that he used Guzman’s

company and its license in order to do work for Aaron Construction and that both

Estepas knew he was doing so and had no problem with the arrangement. Sandoval

also used Guzman’s social security number in order to receive payment. Sandoval

was shown Aaron Construction’s payroll documents that listed Guzman as working

hours instead of him, and Sandoval testified that Guzman did not work with him on

the projects.

Sandoval also brought other people to aid him in doing the renovation work,

and they would work between eight to ten hours a day. Sandoval, however, never

reported the hours he or the other workers worked to Javier and only discussed the

“percentage of work that was done during the week” with Diego. And the Estepas

never asked him to keep track of the hours worked on each project. He testified that,

when it was time for payment, he received a separate check made out to Guzman’s

14 USCA11 Case: 19-12272 Date Filed: 05/25/2021 Page: 15 of 30

company from Aaron Construction that he would use to pay the other workers.

Sandoval further testified that he had a discussion with the Estepas about “what to

say if an inspector showed up” to a project site. Sandoval was told to say that he

and his workers worked for Aaron Construction and that they were painters,

although the remodeling work done was not limited to painting. On cross-

examination, Sandoval stated he was interviewed by federal agents but denied being

promised any benefit from his cooperation with the investigation.

Guzman also testified as a government witness. Guzman stated that he

allowed Sandoval to use his company so Sandoval could work. He testified that he

did not know either of the Estepas and had never worked for them. Guzman knew

of the agreement that Sandoval had reached with Aaron Construction but did not

work on any of the projects or report any hours to the Estepas. He testified that he

allowed Sandoval to use his personal information—his driver’s license and social

security number—in connection with the Aaron Construction projects. He also

testified that his company would keep part of the money to cover administrative

expenses and payments the company had made in connection with the projects.

Guzman also stated he was out of the country on days that Aaron Construction had

listed him as working on its payroll documents. On cross-examination, Guzman

stated that he told federal investigators that Sandoval gave his company money for

operation costs.

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Orlando Blanco, the government’s last witness, testified that his company

entered into subcontractor agreements with Aaron Construction for remodeling

work. Blanco was paid a fixed amount of money per unit and did not get more

money if a project took more hours than anticipated. Blanco never reported the

hours that he worked to the Estepas. After being shown Aaron Construction’s

certified payroll documents listing Blanco and his cousin as employees of Aaron

Construction, Blanco testified that neither of them were Aaron Construction’s

employees and that they had not reported the hours on the payroll documents.

Following the conclusion of the government’s case, the Estepas sought to

present testimony to show that, to the extent that the Estepas had made any

misrepresentations, the misrepresentations were immaterial. Additionally, the

Estepas focused on presenting testimony demonstrating that the County was satisfied

with Aaron Construction’s work on the RPQs at issue in the case.

Jose Arnaez, a project manager for the County’s PHCD, testified that he had

supervised Aaron Construction’s work “[o]n and off, for about 11 years,” and that

its work was excellent. However, during the government’s cross-examination,

Arnaez stated that, if he knew Aaron Construction was not paying Davis-Bacon

wages, was not collecting hours, and not paying overtime, his opinion about the

company would change. He also stated that there was no reason why Aaron

Construction should have had half-filled-out interview forms in its office. Giselle

16 USCA11 Case: 19-12272 Date Filed: 05/25/2021 Page: 17 of 30

Castillo, a construction manager for the County’s PHCD, testified that she

“probably” sent Diego a Davis-Bacon wage interview form. She testified that Aaron

Construction always completed its jobs for the County “on time and well.” On cross-

examination, however, Castillo testified that her opinion on Aaron Construction

would be affected if she knew its workers were not being paid Davis-Bacon wages

or if the company was not paying the workers for all the hours they worked. She

also stated that Aaron Construction had indicated in its bids that it was not planning

to use subcontractors and that, if she knew she had received false documents from

Aaron Construction concerning subcontractor payments and supply lists, then she

would not have processed the documents. She noted that the documentation

associated with RPQs could be complicated. But she testified that she did not

remember if the Estepas had ever told her they did not understand the forms or had

asked her for copies of the forms in Spanish.

Lisette Martinez, an architect for the County and former chief of facilities for

PHCD, also testified. Martinez testified that she had evaluated the quality of Aaron

Construction’s work and generally graded its work as “superior,” “outstanding,” and

“exemplary.” Similar to Arnaez and Castillo, Martinez testified on cross-

examination that her opinion of Aaron Construction would be affected if she knew

it was not paying its workers hourly or the Davis-Bacon wage. And Marcos Caines,

a construction project manager for the County, testified that he supervised Aaron

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Construction and that its overall performance was good and that the County was

satisfied with its work. But, as the other County employees similarly testified, his

opinion of Aaron Construction would be affected if he knew they were not paying

their workers Davis-Bacon wages or by the hour.

Diego also testified on his own behalf. Diego testified that Aaron

Construction had informed the County it planned to use temporary workers for the

2014 RPQ and that he never tried to hide that from the County. He explained that it

was more expensive for his company to list workers as temporary employees than

subcontractors, as Aaron Construction paid for their worker’s compensation and

taxes and fees on the workers’ paychecks. Diego testified that Aaron Construction

paid its subcontractors as temporary employees to ensure the subcontractor’s

workers would receive Davis-Bacon compliant wages and worker’s compensation,

as well as to ensure that all the workers were legally authorized to work in the United

States. As to the interview forms, he testified he received them from Castillo via

email.

Diego additionally testified that Marian Restrepo Sanchez was the Aaron

Construction employee responsible for obtaining the information for the projects and

filling out the paperwork, including the hours worked on each project. He stated

that he and Javier sometimes personally did labor work on the projects they were

awarded by the County. He denied having any knowledge about Sandoval using

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Guzman’s personal information. He testified he relied on Restrepo Sanchez’s and

the contractors’ representations when he signed the certified payroll documents and

assumed that all the information was correct. He claimed he did not know that any

of the information was false and that he did not intend to defraud the government

and did not intentionally falsify documents to receive funds from the County. And

he contended that the separate check payments to the workers and contractors were

so that the temporary workers would get payroll and the subcontracting company

would be paid for the use of their crew. On cross-examination, Diego could not

recall which projects he or Javier performed labor work on. He admitted he never

told any of the County’s employees that he did not understand the documents Aaron

Construction was required to fill out for the RPQs. The government showed Diego

documents from bids Aaron Construction made prior to 2014 in which Aaron

Construction did not report it was using subcontractors, even though subcontractor

agreements were found by the government during its investigation. He also admitted

that he never disclosed the subcontractor agreements to the County but stated he

“had no need to do it because [he] was paying them the payroll . . . [and] the taxes”

and “was taking out the deductions, because at the end of the year [he] did a W-2 for

them.” He claimed he had discussed Davis-Bacon wages with all the subcontractors,

although the agreements did not mention the Act. Diego also claimed that he had

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time sheets recorded for all the certified payroll documents, although the Estepas

had not presented them as evidence.

Upon the conclusion of the trial, the jury acquitted Javier on the witness

tampering count but found Javier and Diego guilty on all the remaining counts. The

district court sentenced Javier to 51-months’ imprisonment and a three-year term of

supervised release, and it sentenced Diego to 41-months’ imprisonment and a three-

year term of supervised release. 4 This timely appeal followed.

II. STANDARD OF REVIEW

Sufficiency of the evidence is a legal question that we review de novo. United

States v. Capers, 708 F.3d 1286, 1296 (11th Cir. 2013). When addressing a

challenge to the sufficiency of the evidence, we must draw all reasonable inferences

in favor of the government’s case and must “assume that the jury made all credibility

choices in support of the verdict.” United States v. Maxwell, 579 F.3d 1282, 1299

(11th Cir. 2009). We may not overturn the jury’s verdict “if any reasonable

construction of the evidence would have allowed the jury to find the defendant guilty

beyond a reasonable doubt.” Capers, 708 F.3d at 1297 (quoting United States v.

Herrera, 931 F.2d 761, 762 (11th Cir. 1991)); accord Maxwell, 579 F.3d at 1299.

4 Following the start of the COVID-19 pandemic, Diego moved for the district court to redesignate the remainder of his sentence to home confinement in light of the pandemic. The district court granted Diego’s motion. Additionally, Javier moved for the district court to redesignate the remainder of his sentence to home confinement and for compassionate release. The district court granted both motions and reduced Javier’s sentence to time served effective the date of the order—August 10, 2020. 20 USCA11 Case: 19-12272 Date Filed: 05/25/2021 Page: 21 of 30

To support a conviction, “[t]he evidence need not be inconsistent with every

reasonable hypothesis except guilt, and the jury is free to choose between or among

the reasonable conclusions to be drawn from the evidence presented at trial.”

Capers, 708 F.3d at 1297 (quoting United States v. Poole, 878 F.2d 1389, 1391 (11th

Cir. 1989)). The government may introduce circumstantial evidence, but

“reasonable inferences, not mere speculation, must support the conviction.” Id.

(quoting United States v. Mendez, 528 F.3d 811, 814 (11th Cir. 2008)).

III. ANALYSIS

On appeal, the Estepas contend that the government’s evidence was

insufficient to sustain their wire fraud and conspiracy convictions for two reasons.5

First, they assert that there was insufficient evidence of a scheme to defraud because

the County did not suffer a financial loss. Second, the Estepas contend that the

government presented insufficient evidence of the requisite mens rea for the crimes

for which they were convicted.

The Estepas were convicted and sentenced on counts of conspiracy to commit

wire fraud, in violation of 18 U.S.C. § 1349; and wire fraud, in violation of 18 U.S.C.

§ 1343. The elements of wire fraud are “(1) intentional participation in a scheme to

defraud, and, (2) the use of the interstate . . . wires in furtherance of that scheme,”

5 Prior to oral argument, the Estepas separately moved to withdraw all the arguments they raised in their initial briefs except their arguments related to sufficiency of the evidence. We granted these motions and thus only address those sufficiency-of-the-evidence arguments. 21 USCA11 Case: 19-12272 Date Filed: 05/25/2021 Page: 22 of 30

and the government must prove both elements to sustain a defendant’s conviction

for wire fraud. Maxwell, 579 F.3d at 1299. “A scheme to defraud requires proof of

a material misrepresentation, or the omission or concealment of a material fact

calculated to deceive another out of money or property.” Id. “A misrepresentation

is material if it has ‘a natural tendency to influence, or [is] capable of influencing,

the decision maker to whom it is addressed.’” Id. (alteration in original) (quoting

United States v. Hasson, 333 F.3d 1264, 1271 (11th Cir. 2003)). And, to prevail on

the conspiracy charge, the government must additionally prove three things: “(1)

agreement between two or more persons to achieve an unlawful objective; (2)

knowing and voluntary participation in that agreement by the defendant; and (3) an

overt act in furtherance of the agreement.” United States v. Broughton, 689 F.3d

1260, 1277 (11th Cir. 2012); see also Maxwell, 579 F.3d at 1299.

As stated above, we must view the evidence in the light most favorable to the

government. Maxwell, 579 F.3d at 1299. And based on the record evidence, which

we have extensively detailed above, we hold a reasonable jury could find beyond a

reasonable doubt that: (1) the Estepas engaged in a scheme to defraud by

intentionally making material misrepresentations to the County that it intended to

comply with the Davis-Bacon requirements and to not use subcontractors on the

RPQs in order to receive federal funds associated with the RPQs from the County;

and (2) the Estepas knowingly and voluntarily agreed to commit the scheme to

22 USCA11 Case: 19-12272 Date Filed: 05/25/2021 Page: 23 of 30

defraud and pursued overt acts in furtherance of that agreement. The Estepas won

RPQ bids for Aaron Construction from the County in 2014, 2015, and 2016. When

the Estepas bid on those three RPQs, they knowingly and materially misrepresented

their intent to pay wages required by the Act, as well as their intention to use

subcontractors on the paperwork they submitted. Despite the Estepas’

representations that Aaron Construction would not use subcontractors, federal agents

found a large number of subcontractor agreements at the Aaron Construction office

during their execution of the search warrant. Additionally, after winning the bids

from the County and performing work, the Estepas submitted payment packets to

the County, in which the Estepas again represented that Aaron Construction was not

using subcontractors. The payment packets included false certified payroll

documents, which listed employees who either did not work on the specified jobs or

were mislabeled as Aaron Construction employees when they were in fact

subcontractors. Indeed, Guzman, who was listed on several of Aaron Construction’s

payroll documents, had never worked for Aaron Construction and was in fact out of

the country during several of the pay periods at issue. Rather, Sandoval, using

Guzman’s personal information, was performing subcontracting work for Aaron

Construction, and Sandoval testified that the Estepas were aware of this

arrangement. And several of the individuals who did subcontracting work for Aaron

Construction and were listed as “employees”—e.g., Jimenez, Segura, and Blanco—

23 USCA11 Case: 19-12272 Date Filed: 05/25/2021 Page: 24 of 30

testified at trial that they were not employees of Aaron Construction and had never

seen the payroll documents that listed them as such.

Additionally, the evidence, viewed in the light most favorable to the

government, shows that the Estepas signed the certified payroll statements listing

the hours of its “temporary employees” despite never asking the “temporary

employees” what hours they worked or paying them an hourly wage. The

subcontractors consistently testified that they were paid flat rates, as opposed to an

hourly wage, by Aaron Construction, that they were not paid overtime wages, that

they never reported the amount of hours worked to the Estepas, and that the Estepas

never inquired about their hours worked. Moreover, several subcontractors testified

that they used other workers for the projects they took on for Aaron Construction;

the Estepas, however, would only report some of those workers as employees. For

example, Jimenez employed seven workers while doing subcontracting work for

Aaron Construction, but the Estepas only asked for the information of three of

Jimenez’s employees.

The Estepas, however, contend that there was insufficient evidence of a

scheme to defraud because the County did not suffer a financial loss from their

conduct. Specifically, they assert that their misrepresentations did not affect the

nature of the bargain because the County’s interest was in obtaining high-quality,

low-cost work, which is exactly what Aaron Construction provided. Thus, according

24 USCA11 Case: 19-12272 Date Filed: 05/25/2021 Page: 25 of 30

to the Estepas, any misrepresentations about whether Aaron Construction used

subcontractors were not material, and the jury’s convictions cannot be sustained.

This argument is without merit, and our precedent in United States v. Maxwell

is instructive. In Maxwell, the defendant, a vice president of Fisk Electrical

Corporation—a large, Texas-based electrical contracting corporation—obtained

contracts from Miami-Dade County for which Fisk was not eligible because the

work was meant to be performed by qualifying small, local businesses. 579 F.3d at

1288. The defendant obtained the contracts and funds on behalf of Fisk by

misrepresenting that a qualifying business was subcontracted to complete the work

and receive the program’s payments when, in fact, Fisk was doing the work and

receiving the payments. See id. at 1289–92. A grand jury indicted the defendant on

numerous counts of mail and wire fraud, money laundering, and related conspiracies,

and the paneled jury convicted the defendant. See id. at 1287–88.

On appeal, this Court affirmed the defendant’s conviction and sentence. Id.

at 1307. In doing so, this Court explained that the evidence demonstrated that the

defendant made numerous misrepresentations to Miami-Dade County and took

actions in support of those misrepresentations. See id. at 1290, 1300. This Court

found that the misrepresentations were material—even though Fisk had completed

the contracts’ work—because without those misrepresentations, Fisk and its

subcontractor would not have been awarded the contracts from the County. See id.

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at 1288–89, 1300. This Court rejected the defendant’s argument that there was no

scheme to defraud because the actions he took “did not deprive the County or the

United States of money or property, because, in the end, the County and the United

States received the electrical work they sought.” Id. at 1302. This Court explained

that “financial loss is not at the core of these mail and wire frauds,” but “[i]nstead,

the penal statutes also seek to punish the intent to obtain money or property from a

victim by means of fraud and deceit.” Id. Thus, “[r]egardless of the quality or cost

of the work completed,” the funds used to pay out the contracts were meant only for

qualifying small, local businesses, and Fisk did not qualify as such a business. See

id. at 1302–03. And this Court noted that “[t]he County and the United States were

free to prescribe the rules of this contracting process, and the defendant was not free

to dishonestly circumvent the worthy purpose of the set-aside program.” Id. at 1303.

The Estepas attempt to distinguish Maxwell by claiming that it involved

“preferential hiring, in which an actual purpose of the contract and the funding is to

provide otherwise disadvantaged people opportunities for hiring to correct prior

discrimination,” while asserting that the Davis-Bacon requirements in this case only

relate to a “policing objective” of the government, not the actual act of “defrauding

the payor as to the identity of the person hired or the quality or extent of the work.”

We find this argument wholly without merit. Under federal law, the County could

not have lawfully granted Aaron Construction the contracts at issue had the Estepas

26 USCA11 Case: 19-12272 Date Filed: 05/25/2021 Page: 27 of 30

not certified that they would comply with the Act. See 40 U.S.C. § 3142(a); 29

C.F.R. pt. 1, app. A. And Rajkumar-Futch, the procurement manager for the

County’s PHCD, confirmed the materiality of the Estepas’ misrepresentations when

she testified that had the County known about the Estepas’ intent to pay workers a

flat rate and their failure to disclose the subcontractors, the County would not have

awarded the contract. Thus, as a result of the Estepas’ misrepresentations, the

County paid Aaron Construction money that it otherwise would not have. While

several County officials said that they were pleased with the work Aaron

Construction performed, those officials also uniformly testified that their opinion of

Aaron Construction would be affected if they had known about the

misrepresentations. Therefore, a reasonable jury had ample evidence from which it

could conclude that the Estepas’ misrepresentations were material—and constituted

a scheme to defraud—beyond a reasonable doubt.

The Estepas also contend that the government presented insufficient evidence

of the requisite mens rea for the crimes on which they were convicted—i.e., that

they had fraudulent intent, as required for the substantive wire fraud counts, and that

they knowingly conspired to defraud, as required for the conspiracy count.

Specifically, they argue that their misstatements that certain subcontractors were

temporary employees arose from a reasonable and good faith interpretation of a

27 USCA11 Case: 19-12272 Date Filed: 05/25/2021 Page: 28 of 30

complex regulatory regime and cannot form the basis of a criminal conviction. We

disagree.

As explained above, to sustain a wire fraud conviction, the government must

prove that a defendant intended to defraud, meaning he intended to make a material

misrepresentation aimed at obtaining the property of another. Maxwell, 579 F.3d at

1299, 1302. And, for a conspiracy to commit wire fraud conviction, knowing and

voluntary participation in an agreement to achieve an unlawful objective is the

relevant intent. Broughton, 689 F.3d at 1277.

Viewed in the light most favorable to the government, see Maxwell, 579 F.3d

at 1299, the record evidence demonstrates that the Estepas’ misrepresentations were

not isolated mistakes based on their misunderstanding of the paperwork associated

with the RPQs. Rather, the Estepas engaged in a pervasive pattern of deceit before,

during, and after bidding on the three RPQs enumerated in the indictment. While

the Estepas reported to the County that Aaron Construction did not intend to use

subcontractors and would comply with the Act and accurately report workers’ wages

and hours, the Estepas in fact personally negotiated with various subcontractors to

work on the RPQs at issue, asking them for personal information such as driver’s

licenses and social security numbers and agreeing to pay them flat rates for the

projects contrary to Davis-Bacon wage requirements. The Estepas’ deceit continued

with each falsely certified payroll document and the final payment packets from

28 USCA11 Case: 19-12272 Date Filed: 05/25/2021 Page: 29 of 30

Aaron Construction that they submitted to the County. Although none of the

subcontractors who testified in this case reported their hours to the Estepas for the

projects they worked, the Estepas, in Aaron Construction’s certified payroll

documents, represented that the subcontractors were employees of Aaron

Construction and falsely recorded their hours worked and hourly wage. And, while

the charged conduct in this case began with the 2014 RPQ, the government

introduced evidence that the Estepas submitted documents with misrepresentations

about subcontractors even prior to 2014.

Diego testified that he lacked knowledge of the inaccuracies in the payroll

documents and assumed the information contained in them was correct, but the jury

was free to disregard this testimony and instead credit the contrary evidence the

government presented through its witnesses, i.e., that the Estepas knew they were

misrepresenting to the County that Aaron Construction was not using subcontractors

and they knew they were not complying with the Act. See id. at 1301. And, although

Diego testified that he and Javier acted in good faith—and did not intend to make

the misrepresentations at issue—and that it cost Aaron Construction more money to

list the subcontractors as temporary employees, the jury was again free to consider

and reject this evidence in light of the overwhelming amount of evidence

concerning: (1) the Estepas’ intent to make material misrepresentations to procure

29 USCA11 Case: 19-12272 Date Filed: 05/25/2021 Page: 30 of 30

the RPQs, and (2) their intent in knowingly and voluntarily agreeing to commit wire

fraud and in carrying out actions in furtherance of the agreement.

Based on the record evidence, a reasonable jury could conclude beyond a

reasonable doubt that the Estepas had the requisite intents for their convictions. We

therefore conclude that the government’s evidence was sufficient to demonstrate the

requisite mens rea elements of the Estepas’ wire fraud and conspiracy to commit

wire fraud convictions.

IV. CONCLUSION

For the foregoing reasons, we hold that the government presented sufficient

evidence to demonstrate that the Estepas: (1) intentionally participated in a scheme

to defraud to constitute wire fraud and, (2) knowingly and voluntarily engaged in a

conspiracy to commit wire fraud. We therefore affirm the Estepas’ convictions and

sentences for wire fraud and conspiracy to commit wire fraud.

AFFIRMED.