UNITED STATES OF AMERICA, Plaintiff - Appellee, versus WILLIAM ALLEN BROUGHTON, a.k.a. W. Allen Broughton, a.k.a. Allen Broughton, Defendant - Appellant.
No. 10-15527
United States Court of Appeals, Eleventh Circuit
August 10, 2012
D.C. Docket No. 8:06-cr-00026-RAL-TBM-4
UNITED STATES OF AMERICA, Plaintiff - Appellee, versus RICHARD WILLIAM PETERSON, a.k.a. Richard Snyder, a.k.a. Dick Snyder, a.k.a. Bob James, Defendant - Appellant.
No. 10-15536
United States Court of Appeals, Eleventh Circuit
August 10, 2012
D.C. Docket No. 8:06-cr-00026-RAL-TBM-9
[PUBLISH]
(August 10, 2012)
Before JORDAN, and FAY, Circuit Judges, and HOOD, District Judge.*
FAY, Circuit Judge:
This criminal case involves sophisticated financial structuring through the interplay of related corporate subsidiaries in the context of the insurance business. While such financial structuring is not inherently improper, here the two Appellants, William Allen Broughton (“Broughton“) and Richard William Peterson (“Peterson“), were convicted of conducting a modern-day financial shell game in which they falsified financial statements, exchanged paper ownership over non-extant fraudulent assets, and collected insurance premiums
Collectively, they state two bases for reversal: (1) Broughton contends that the Government‘s purported failure to file charges within the relevant statutes of limitations demands reversal; and (2) both Appellants claim that the district court erred in denying their motions for judgment of acquittal due to an insufficiency of evidence. Finding no error, we affirm Appellants’ convictions.
I.
A Middle District of Florida grand jury returned the controlling indictment on January 17, 2006. The 27-page indictment contained two counts against ten defendants: Count I charged a conspiracy to commit (i) mail fraud, in violation of
The only pre-trial motions relevant to the appeal before us involved motions to dismiss the indictment filed by Broughton and other defendants in which they claimed the indictment was untimely. They argued that the relevant statute of limitations had expired prior to January 17, 2006, because the district court had improperly granted a motion to suspend the statute of limitations pending the receipt of evidence located in foreign jurisdictions.2 The district
Trial began on April 13, 2010. At the close of the Government‘s case, Broughton and Peterson moved for a judgment of acquittal on both counts of the indictment. The district court denied those motions, as well as the subsequent renewed motions. The trial finished on May 18, 2010, when the jury returned guilty verdicts as to Broughton and Peterson on both counts after 21 days of trial.
II.
As we must, we consider the factual background in the light most favorable to the Government. See United States v. Glen-Archila, 677 F.2d 809, 818 (11th Cir. 1982). At trial, the Government provided evidence of the following.
For a little over two years beginning in 1996, the Internal Revenue Service conducted an undercover investigation into insurance fraud in the United States and overseas. In particular, the investigation was directed at individuals and corporations who marketed themselves as insurance providers on the basis of rented assets.3 Such companies sought to collect insurance premiums while never
However, the facts relevant to the appeal now before us extend beyond the confines of the undercover investigation. Therefore, we divide our discussion of the evidence at trial into two parts. First, we focus on the relationship between Appellants and the other co-conspirators leading up to and subsequent to the undercover investigation. Then, we turn to the fruits of the undercover operation itself.
A.
At the center of the conspiracy to bilk innocent investors and would-be insureds were three people: Michael Ernest Zapetis, Sr. (“Zapetis“); his wife, Karen Carazo Zapetis (“Carazo“); and an individual named Richard Joseph Solomon (“Solomon“). In fact, Appellants’ own actions and those of their four other indicted co-conspirators emanated like ripples in a pond from the fraud of
Whether through purposeful direction or fortuitous criminality, the genesis of the fraud at issue was rooted in the overseas creation of fraudulent assets. Solomon, a self-employed business consultant, traveled to Panama in the early 1990s. There, he met with individuals operating a Panamanian cooperative acting as a credit union, Cooperative de Ahorro y Credito Gatun (“Gatun“). Solomon became a member of Gatun by depositing a small sum of money. Subsequently, he and those individuals, purportedly operating in an International Trust Division of Gatun, caused Gatun to issue hundreds of millions of dollars in CDs allegedly secured by billions of dollars of gold dore,5 even though Solomon never confirmed the existence of that gold dore. No such gold dore in fact demonstrably existed. Even if it had existed, under Panama law issuance of such CDs would have still been illegal.
Soon after, Gatun was ordered in 1994 by the overseeing Panamanian agency to cease and desist issuing such CDs. Gatun, at Solomon‘s urging, did
Meanwhile, the next step in the parties’ business dealings involved the creation of companies to claim those fraudulent assets on their own balance sheets. Longtime residents of Miami, Zapetis and Carazo began acquiring off-shore companies in the early 1990s, naming those companies in a manner to suggest that they were involved in the insurance business. For example, Zapetis and Carazo formed and operated companies under names like American Indemnity Company, Ltd. (“American Indemnity“), Star Insurance Company (“Star Insurance“), and Global Insurance Company (“Global Insurance“), which were incorporated in St. Christopher and Nevis in the West Indies. They also formed certain Costa Rican subsidiary companies, like Capitales Uno de America, S.A. (“Cap Uno“).6 To manage those companies, Zapetis and Carazo had another offshore company, Consorcio de Seguros Polaris, S.A.
To make it appear that their companies were capitalized, Zapetis and Carazo rented the Gatun CDs from Solomon. They paid Solomon rental fees for the use of the purported Gatun CDs, which they then listed on their own companies’ financial statements, claiming ownership when in fact no such ownership existed. To conceal their fraud, Zapetis and Carazo obtained an audited financial statement of at least one company, American Indemnity, on the strength of the Gatun CDs. Even though that original audit opinion, dated December 15, 1995, was later withdrawn in May 1996 when the auditor learned that the Gatun CDs may have been in fact illiquid or nonexistent, Zapetis and Carazo nonetheless continued to market American Indemnity. Indeed, it was on this foundation of fraudulent capitalization that Zapetis and Carazo marketed their own companies to others for sale.
Zapetis and Carazo began selling some of those companies, as well as renting out the very same assets–the Gatun CDs–that they had rented from
Appellant Peterson was one such purchaser of a fraudulent insurance subsidiary. He owned a cooperative known as the California Restaurant Specialty Cooperative (“CRSC“), located in San Francisco, California.8 In the late fall of 1996 or early 1997, Peterson hired a man named James Stanley Connally —who later pled guilty to tax evasion and conspiring to commit wire,
Soon afterwards, Peterson decided to purchase an insurance company that CRSC could itself own and operate. Connally, who had met Zapetis and Carazo previously,10 believed that Zapetis and Carazo could provide a suitable offshore company for Peterson. When Connally contacted them, Zapetis and Carazo were indeed interested in selling such a company. On April 25, 1997, they provided Connally with an offer to sell Peterson Star Insurance for $225,000. Star Insurance purported to be a licensed insurance carrier in St. Kitts. Separate from the purchase price of $225,000 was also a $10,000 charge for an audit, which was to be conducted by “either Price, Waterhouse or Pannell, Kerr, & Forester in Antigua.” Supporting the valuation of Star Insurance were its internal financial
After some negotiations involving Peterson, Connally, Zapetis, and Carazo, Peterson purchased on May 2, 1997, a 45-day option on Star Insurance and Cap Tres for $10,000, as well as an audit of the same for an additional $10,000. Because Peterson wanted his role to be private, though, it was Connally rather than Peterson that signed the agreement with Zapetis and Carazo. To pay for the purchase, Peterson gave Connally a briefcase full of approximately $95,000 in cash so that there would be no paper trail leading back to Peterson. As to the remaining proceeds that were not used for the purchase of Star Insurance, some were used for Connally‘s salary, some for the marketing expenses of CRSC and Star Insurance, and some were to be deposited, on Peterson‘s instructions, in an CRSC account held at Charles Schwaab in $2,500 increments, so as not to “arouse any suspicion.” Additionally, Connally flew to the Cayman Islands to secret approximately $10,000 of the cash for Peterson in a bedroom mattress located in a condo owned by Peterson. When doing as he was
Meanwhile, Zapetis and his employees were seeking to purvey an audit of Star Insurance. After months of delay, the company that was to provide the audit, Peat Marwick, found that it could not verify the assets claimed by Star Insurance or Cap Tres. Indeed, as a result of their inability to verify those assets, Peat Marwick never provided an audit of Star Insurance.
Nonetheless, Peterson and Connally were not deterred in marketing Star Insurance as an insurance provider, notwithstanding that both Peterson and Connally knew Star Insurance possessed no assets, as it was required to do when participating in the insurance business. Instead, they marketed Star Insurance on the basis of the financial statement originally provided by Zapetis and Carazo, successfully marketing Star Insurance to a London insurance broker. Moreover, Star Insurance succeeded in underwriting reinsurance for such business concerns as marine insurance in Turkey and aviation concerns operating from Europe to North Africa. In fact, Peterson, using the alias “R. Snyder,” corresponded concerning, approved, and signed many of the policies underwritten by Star Insurance. He used an alias because “he didn‘t want to show the Richard Peterson name anywhere based on his history.”
Meanwhile, Appellant Broughton also had ties to Zapetis and Carazo‘s
Financial Capital purported to operate by guaranteeing that clients it represented would repay loans, return capital, and pay interest due to investors
Nonetheless, Broughton and Synergy Capital entered into agreements with corporations to “support credit enhancement opportunities.” Among other transactions between Broughton, Zapetis, and Carazo, in or around June 1997, Synergy Capital entered into an agreement with one of Zapetis and Carazo‘s Costa Rican companies, Inversiones Solidaris Americanis (“Inversiones“). Under that agreement, Inversiones provided Synergy Capital‘s subsidiary, Financial
Similarly, Synergy Capital entered into an agreement with Eagle Telephony and Telecommunications (“ET&T“) on or about December 9, 1997, in which ET&T agreed to assign $100 million in Treasury notes to Financial Capital, in exchange for 20% of all fees and profits of Financial Capital. ET&T was to lodge an assignment of the Treasury notes and other “documentation” in a bank outside of the United States. Under the terms of the agreement, the $100 million in Treasury notes was simply to be shown on Financial Capital‘s balance sheets without being “directly hypothecated.” To accomplish the transfer of the $100 million in Treasury notes, ET&T‘s owner signed an “Irrevocable Stock or Bond Power” and a United States Treasury Form PD 1832, both of which purportedly assigned the Treasury notes to Financial Capital. However, in truth, the executed assignment and treasury forms were fraudulent, made to resemble a
Notwithstanding such deficiencies, Broughton obtained an unqualified audit opinion of Financial Capital‘s financial statements. The audit was performed by one of the co-defendants in this action, a certified public accountant named William Clancy. Clancy, in completing his audit, included the $250 million Factor Mex CD and the purported $100 million in Treasury notes from ET&T as assets on Financial Capital‘s financial statements. Broughton subsequently marketed Financial Capital and Synergy Capital, in part, on the basis of Clancy‘s fraudulent audit.
In fact, Broughton marketed both Financial Capital and Synergy Capital as being uniquely situated to assist businesses with “credit enhancement,” claiming that Financial Capital and Synergy Capital would assist those companies by providing financial guarantees and “creative structur[es]” for their commercial ventures. Synergy Capital‘s sales brochure, for instance, trumpeted that Financial Capital had over $350 million in capital and that it was partnered with participating businesses that possessed over $1.4 billion in assets. Likewise, the
Nonetheless, through at least March 2001, Zapetis, Carazo, and the other conspirators continued to market those guarantees for their own economic benefit. In one such instance, they guaranteed the actions of a company controlled by two individuals, Daniel DelPiano and Daniel Stetson, Premier Holidays International, Inc. (“Premier“). Premier claimed to be in the vacation time-share business and solicited investor loans. Utilizing the fraudulent guarantees provided by Financial Capital and Synergy Capital in December 1997, as well as others, Premier promised high rates of return in order to obtain private investment. In reliance on such guarantees and promises, investors invested money with Premier. For instance, one family invested $200,000; another $218,000; another $500,000; and another $1.5 million. Within each set of loan documents provided to its investors, Premier included a “Certificate of
Premier was, in fact, a Ponzi scheme. Eventually, in or around September 2000, Premier ceased interest payments to its investors, who subsequently sought to collect on Financial Capital‘s guarantees. As required by the loan documents that they had received from Premier and in reliance on the Certificate of Tender provided by Financial Capital, Premier‘s investors sent claims to Financial Capital and Synergy Capital. In response, from August 2000 through March 2001, Synergy Capital and Broughton sent those investors letters informing them that Financial Capital was working towards a resolution. For example, in a letter dated October 23, 2000, Broughton informed the Premier investors that Financial Capital—and Synergy Capital as the parent company of Financial
B.
As noted above, the IRS began undercover operations late in 1996, with several undercover agents posing as owners of an offshore insurance company known as Continental Indemnity, Ltd., which they wanted to capitalize with rented assets. The IRS‘s investigation resulted in recorded conversations and meetings with both Appellants, as well as with many of Appellants’ co-conspirators like Connally, Zapetis, and Carazo. The undercover agents’ point of entry into the conspiracy was Connally.
Soon before Connally began working with Financial Capital in early 1998, he was telephoned by a man referred to him by a Lloyds of London contact. The
Soon afterwards, when Connally began working with Broughton and Financial Capital, Connally introduced Scoville to Broughton at the offices of Synergy Capital in Atlanta. On behalf of Broughton and his companies, Connally shared with the IRS agents Synergy Capital‘s marketing information, which included Clancy‘s unqualified audit opinion for Financial Capital. Connally told Scoville and one of Scoville‘s associates, identified as Mr. Scott Manning, that Broughton could provide different types of rented assets through his companies, Synergy Capital and Financial Capital. Particularly, he told them that both companies could provide both CDs and treasury notes as rented assets but that Treasury notes would cost more because they were more “credible.” Also, Broughton explained the way in which transactions for rented assets could be
During recorded conversations between the undercover agents, Zapetis, Carazo, and an attorney named John E.S. Kramar (“Kramar“), who had been recommended to the agents by Connally, offered certain assets for rent from the Zapetis/Carazo companies. They offered to sell Cap Seis to the undercover agents, as well as to rent $10 million in assets with which it could be capitalized. They also proposed the way in which such a transaction could be completed with Continental Indemnity. Eventually, notwithstanding the urging of Kramar, Connally, and Clancy that there was a more effective way to conceal that the proposed assets were rented than that proposed by Zapetis and Carazo,15 the undercover agents entered into contracts with Zapetis and Carazo for Continental Indemnity to rent the assets of some of his companies. By the terms of those
During the course of their communications with the undercover agents, Zapetis and others discussed Appellants’ own involvement with similar financial transactions. For instance, during one recorded telephone conversation, Zapetis told the undercover agents all about his relationship with Broughton. Claiming that they had done many deals together, where Broughton would lose money but would simply construct another deal, Zapetis described the way in which Broughton would structure his businesses, “get[ting] this huge overhead [] [where] he builds these pyramids and doesn‘t put the cement blocks in the right place all the time and the whole thing starts crumbling.” Zapetis also informed an IRS undercover agent in early 1999 that Broughton was at it again, this time providing financial guarantees to builders.
In a similar vein and at a later time, Connally referred the undercover agents to “Richard Snyder,” the alias being used by Peterson, for administration of Continental Indemnity. Connally told the agents that Peterson would keep all their business dealings confidential in exchange for a monthly fee for his
III.
Now, we have before us two bases for reversal. First, Appellant Broughton, in an argument in which Appellant Peterson does not join, contends that the January 17, 2006 indictment is barred by the applicable statute of limitations and that the district court erred in denying his motion to dismiss on that basis. Specifically, Broughton argues 1) that the statute of limitations was improperly suspended under
“Denials of motions to dismiss the indictment are reviewed for abuse of discretion, but underlying legal errors . . . are reviewed de novo.” United States v. Robison, 505 F.3d 1208, 1225 n.24 (11th Cir. 2007) (citations omitted).
A.
As a threshold matter, we first address whether the district court properly suspended the running of the statute of limitations. We have previously noted that “[w]here there is a question of statutory interpretation, ‘we begin by examining the text of the statute to determine whether its meaning is clear.‘” United States v. Trainor, 376 F.3d 1325, 1330 (11th Cir. 2004) (quoting Harry v. Marchant, 291 F.3d 767, 770 (11th Cir. 2002) (en banc)). “Indeed, ‘[i]n construing a statute we must begin, and often should end as well, with the language of the statute itself.‘” Id. (quoting United States v. Steele, 147 F.3d 1316, 1318 (11th Cir. 1998) (en banc)).
Upon application of the United States, filed before return of an indictment, indicating that evidence of an offense is in a foreign country, the district court before which a grand jury is impaneled to investigate the offense shall suspend the running of the statute of limitations for the offense if the court finds by a preponderance of the evidence that an official request has been made for such evidence and that it reasonably appears, or reasonably appeared at the time the request was made, that such evidence is, or was, in such foreign country.
Id. at
Broughton contends that the Government did not satisfy these requirements, since
- the commission and completion of both alleged conspiracies were fully known to the Government before it made the application to the trial court pursuant to
18 U.S.C. § 3292 , - both conspiracies had terminated, or the final acts in furtherance of the conspiracy had occurred, prior to the Government‘s
application to the trial court, and - none of the evidence requested or obtained by the Government from any foreign country as included in the Government‘s application was necessary and sufficient or relevant.
App. Broughton Br. at 19-20.
We find no support, either in our case law or in the facts of the case, for any of Broughton‘s stated contentions. Our case law demonstrates that
In Trainor, the government had sent an official request to the Ministry of Justice in Switzerland, requesting certain information related to an ongoing SEC investigation into the defendant‘s actions. Trainor, 376 F.3d at 1328. Six months later, the government filed a motion in the district court to suspend the pertinent statute of limitations pending Switzerland‘s final action. Id. at 1329. The government filed with its motion no evidentiary support that could demonstrate that “it reasonably appears, or reasonably appeared at the time the request was made, that such evidence is, or was, in such foreign country.”
We disagreed, holding that a motion to suspend a statute of limitations must be accompanied by “something with evidentiary value–that is, testimony, documents, proffers, and other submissions bearing some indicia of reliability–tending to prove that it is reasonably likely that evidence of the charged offense is in a foreign country.” Id. at 1332. In that case, the government had failed to provide anything “of evidentiary value for the district court to
Implicit in our holding in Trainor was our realization that the district court must assess and weigh both the evidence sought in the foreign jurisdiction and the information proffered by the government in pursuit of that foreign evidence. See id. at 1331-32. The district court makes this determination as part of its consideration of whether the government has met the requirements of
First, as to the requirement that “an official request has been made for such evidence,”
Moreover, the district court also properly found that the second requirement of
Simply put, Broughton‘s perceived shortcomings regarding the suspension of the statute of limitations here are not only nowhere to be found in
Accordingly, having found that both factors of
B.
We now turn to whether, even with that suspension of the statute of limitations, the action filed against Broughton was timely. He urges us to find that a five-year statute of limitations, rather than a ten-year statute of limitations as argued by the Government, controlled the relevant criminal actions, and that any conspiracy had reached fruition in 1999, meaning that the January 17, 2006, indictment was necessarily untimely if applying a five-year limitations period.
Although Broughton contends that his criminal conduct was “largely completed” as of February 24, 1999, when the Government seized his records, a plain reading of the placatory language employed by Broughton in letters to Premier‘s investors demonstrates otherwise. As the district court initially concluded, Broughton‘s letters under Synergy Capital‘s letterhead were
intended to assuage the concerns of victim-investors by persuading them that Synergy was expending every effort to compensate the victim-investors for their losses, encourage the victim-investors to contact Synergy, and exercise continued patience with Synergy – in other words, lull them into a false sense of security and discourage them from contacting law enforcement or other authorities.
Order, Mar. 11, 2010, ECF No. 504 at 5. He wrote and signed those letters as the Managing Director of Synergy Capital, the parent company of Financial Capital, and it is reasonable that the jury would have found those letters to be a continuing execution of a conspiracy to defraud. Accord United States v. Evans, 473 F.3d 1115, 1121 (11th Cir. 2006) (finding lulling doctrine applicable where letter sent after fruits of fraud received by defendant constituted continuation of original scheme to defraud); see also United States v. Georgalis, 631 F.2d 1199, 1204 (5th Cir. 1980) (” [P]recedent is clear that letters designed to conceal a fraud, by lulling a victim into inaction, constitute a continuation of the original scheme to defraud.“).19 This would mean that the conspiracy did not reach fruition until March 13, 2001, when he sent his final letter.
Regardless, even if Broughton was correct and the conspiracy could have been said to have ended when the Government seized his records on February 24, 1999, the Government would have had at least five years from that time to bring its charges. Therefore, any charges would have been needed to be brought before February 24, 2004. However, as noted above, supra, the statute of limitations was suspended from the time of the first official request under
On the evidence before us, we therefore see no reason to disturb the district court‘s ruling. No matter how you cut it, the January 17, 2006 indictment was timely under a correct application of
IV.
We now turn to the error alleged by both Appellants. They contend that the district court erred in denying their respective motions for acquittal as to both counts of the indictment because of insufficient evidence to support the charges.
We review de novo the denial of a motion for judgment of acquittal, and in reviewing the sufficiency of the evidence underlying a conviction, we consider the evidence “in the light most favorable to the government, with all inferences and credibility choices drawn in the government‘s favor.” United States v. DuBose, 598 F.3d 726, 729 (11th Cir. 2010) (quoting United States v. LeCroy, 441 F.3d 914, 924 (11th Cir. 2006)). Therefore, our review for sufficiency of the evidence inquires only whether a reasonable trier of fact could find that the evidence established guilt beyond a reasonable doubt. United States v. Godinez, 922 F.2d 752, 755 (11th Cir. 1991). “The question is whether reasonable minds could have found guilt beyond a reasonable doubt, not whether reasonable minds must have found guilt beyond a reasonable doubt.” United States v. Bacon, 598 F.3d 772, 775 (11th Cir. 2010) (quoting United States v. Ellisor, 522 F.3d 1255, 1271 (11th Cir. 2008)) (emphasis in original omitted). Accordingly,
[i]t is not necessary for the evidence to exclude every reasonable hypothesis of innocence or be wholly inconsistent with every conclusion except that of guilt . . . . The jury is free to choose between or among the reasonable conclusions to be drawn from the evidence presented at trial, and the court must accept all reasonable inferences and credibility determinations made by the jury.
United States v. Garcia, 447 F.3d 1327, 1334 (11th Cir. 2006) (internal quotations and citations omitted). We are “bound by the jury‘s credibility choices, and by its rejection of the inferences raised by the defendant.” United States v. Peters, 403 F.3d 1263, 1268 (11th Cir. 2005) (citing United States v. Glinton, 154 F.3d 1245, 1258 (11th Cir. 1998)). In accordance with these collective limitations and upon review of the record, there is no doubt that sufficient evidence supported the jury‘s findings as to both Appellants. As such, the district court properly denied their motions for acquittal.
A.
Count I of the indictment charges Appellants with conspiracy to commit
[t]o prove a conspiracy to commit wire fraud, the government need not demonstrate an agreement specifically to use the interstate wires to further the scheme to defraud; it is enough to prove that the defendant knowingly and voluntarily agreed to participate in a scheme to defraud and that the use of the interstate wires in furtherance of the scheme was reasonably foreseeable.
We will address each Appellant‘s arguments individually.
1.
As to Count I‘s charge of conspiracy to commit mail, wire, and insurance fraud in violation of
Furthermore, arguing the Government‘s theory was that Broughton “had issued fraudulent financial guarantees and . . . offered bogus assets for rent to enhance capitalization for certain companies,” Broughton counters that the Government provided no evidence of such allegations. Instead, he claims that the Government failed to provide evidence that “he [had] rented bogus assets to capitalize his own two companies,” or that those companies were improperly capitalized by the ET&T Treasury notes or the Factor Mex CDs. Similarly, Broughton claims that Financial Capital‘s guarantees were not provided to Premier‘s investors to demonstrate Financial Capital‘s own assets, but instead the insurance provided by Roelofs Insurance. As such, Broughton‘s claim rests upon his argument that mere issuance of financial guarantees by Financial Capital and Synergy Capital under his signature cannot demonstrate knowing participation in a scheme to defraud Premier‘s investors. Broughton‘s contentions, however, are undermined by the nature of Financial Capital‘s guarantees, his communication with Premier‘s investors, and his communications with his co-conspirators.
The evidence at trial demonstrated the purpose and reach of Financial
Indeed, it is fair to say that Financial Capital was set up to take money in, but not to pay any out. Proof of this can be seen even in agreements entered into between Broughton and Zapetis. For example, when entering into its agreement with Inversiones, Financial Capital mandated numerous steps that had to be taken in the event an individual demanded payment on the Financial Capital
If there were any doubts about Broughton‘s state of mind and his knowledge of Financial Capital‘s fraud, they would quickly be dispelled upon consideration of the IRS‘s undercover investigation. In recorded conversations that were provided to the jury, Broughton explained the way in which financial statements could be manipulated to make it appear that purported insurance companies possessed far more assets than they in fact did. Such conversations were intended by Broughton to convince the undercover agents that their purported company, Continental Indemnity, could function similarly to his own companies, Financial Capital and Synergy Capital. Those conversations could have reasonably been relied upon by the jury in determining Broughton‘s own
As a final matter, because Broughton elected to testify in his own defense, the jury was entitled to make its own credibility determinations regarding Broughton‘s testimony and demeanor. United States v. Brown, 53 F.3d 312, 314 (11th Cir. 1995). Broughton testified that he never paid “Michael Zapetis, Karen Carazo Zapetis, or any of their companies or employees any money in exchange for the use of CDs or other capital assets.” He testified that he never knew Richard Peterson nor Richard Solomon. He also testified regarding the assets claimed by Financial Capital, the participating companies in Financial Capital‘s guarantees, and that, when assets were assigned to Financial Capital and Synergy, “they would be an asset of the company, and according to the formula of a call . . . [Financial Capital and Synergy Capital] could hypothecate them to borrow money.” Moreover, he disavowed any knowledge of fraud or fraudulent intent, speaking specifically to the letters he sent out to Premier‘s investors. He testified that those letters were not intended “to lull [Premier‘s] investors to take no action about their investments.” Such was his right.
However, in finding Broughton guilty, the jury necessarily found Broughton to be not credible and, presumably, discounted or disbelieved his testimony. Such was its right, Brown, 53 F.3d at 314, especially in light of the
Accordingly, given the entirety of the evidence put forth before the jury, we have no difficulty in affirming the district court‘s denial of Broughton‘s motion for acquittal on Count I.
2.
Like Broughton, Peterson argued that his motion to acquit should have been granted due to the insufficiency of evidence relating to Count I. His primary contention is that the insurance cooperative was legitimate and that there was insufficient evidence that he had knowledge of fraud.
Consideration of the underlying evidence in conjunction with the required elements that had to be proven at trial compels us to deny Peterson‘s argument. There is simply no dispute that Peterson, with the help of Connally, purchased an offshore corporation, Star Insurance, from Zapetis, as well as its subsidiary, Cap Tres. Nor is there any dispute that he funded those corporations with assets rented from Zapetis and Carazo, namely the Gatun CDs. In fact, once it was up and running with its fraudulently capitalized assets reflected on its balance sheet, Star Insurance underwrote insurance coverage and collected premiums, never having the assets necessary to satisfy any claims that might have been filed.
Moreover, there was ample circumstantial evidence from which the trier of
Moreover, Peterson sought to cover his tracks. Whether it was through his purchase of the initial option on Star Insurance by handing Connally a briefcase full of hundred dollar bills; his appointment of Connally to be the nominal head of the company because of the difficulties Peterson had previously had with California regulators; or his underwriting of insurance policies for Star Insurance under the alias of “Richard Snyder,” these actions can be understood as circumstantial evidence that he knowingly participated in the conspiracy to defraud and was aware of the illegitimate nature of, at least, Star Insurance. See United States v. Gold, 743 F.2d 800, 825 (11th Cir. 1984) (quoting United States v. Freeman, 498 F.2d 569, 576 (2d Cir. 1974) (holding efforts to conceal a conspiracy may support the inference that defendant knew of the conspiracy and joined while it was in operation).
Even more compellingly, Peterson‘s interactions with the undercover agents demonstrate Peterson‘s knowledge of the fraud in which he was involved. After being put in touch with the undercover agents by Connally, Peterson told
Such evidence is sufficient to demonstrate that CRSC and Star Insurance were illegitimate, and that Peterson, as their real owner, knowingly directed those companies’ fraudulent actions. Accordingly, we deny Peterson‘s appeal as to Count I.
B.
Finally, we turn to Appellants’ contentions regarding Count II. Unlike the statute upon which conspiracy charge in Count I is based, which required an overt act be committed during the course of the conspiracy, Count II has no such requirement. Instead, under
. . . transport[ing], transmit[ting], and transfer[ring], and attempt[ing] to transport, transmit, and transfer funds from a place in the United States to and through a place outside the United States and to a place in the United States from or through a place outside the United States, knowing that the funds involved in the transportation, transmission, and transfer represented the proceeds of some form of unlawful activity, and knowing that such transportation, transmission, and transfer was designed, in whole and in part, to conceal and disguise the nature, the location, the source, the ownership, and the control of the proceeds of specified unlawful activity . . .
The specified unlawful activity was identified as mail and wire fraud, committed in violation of
As with our discussion of Count I, we will address each Appellant‘s contentions regarding Count II individually.
Broughton‘s primary contention regarding the sufficiency of evidence in support of Count II is that the Government did not introduce evidence that any of the payments made by Broughton were made with funds illegally obtained or were made to carry out mail and wire fraud. Instead, Broughton argues that there was an insufficient showing “that the $5,000 check sent by Mr. Broughton from the United States to Consorcio was for any reason other than preparing 14 participation agreements . . . . [or that] the $50,000 payment to [ET&T] as part of the agreement for the United States treasury notes was a monetary transaction with a financial institution or that the $50,000 was derived from a specified criminal activity.”
We disagree. Having already noted the extensive evidence supporting Broughton‘s involvement in a conspiracy to commit mail fraud, wire fraud, and insurance fraud, we find further evidence of Broughton‘s involvement in a conspiracy to launder the proceeds of the fraudulent transactions in which Broughton engaged. Broughton derived income from the fraudulent activities of Financial Capital and Synergy Capital, and reinvested at least a portion of that income in the ongoing conspiracy of which he was but one part. Evidence at trial showed, for example, some of the fees Financial Capital generated from its
This cumulative evidence was certainly sufficient to support a conviction for the offense of conspiring to commit money laundering. Therefore, a jury was certainly entitled to find that both elements for this type of conspiracy were satisfied by the Government‘s proof. Our case law requires nothing further, notwithstanding Broughton‘s contentions to the contrary.
2.
Finally, we now turn to Peterson‘s argument regarding Count II. He claims both that he lacked specific intent to have committed a money laundering offense under Count II, and that the driving force of any such actions were taken not by
As a threshold matter, we interpret Peterson‘s argument as conceding that a conspiracy to launder money took place but disputing whether he himself possessed the specific intent to have participated as required by
Ample evidence of that specific intent exists. Connally, on Peterson‘s behalf, transported cash to the Cayman Islands, deposited small sums of cash in American banks to avoid detection, and generally sought to transport cash away from the domain of the United States. Connally testified that Peterson directed him to take these actions, and that when he did, he found that, as in the case of the cash stuffed under the mattress in the Cayman Islands, he was not the first to have taken such actions.
Equally meritless is Peterson‘s contention that he was an unwitting pawn in Connally‘s game. While the evidence certainly supports the contention that Connally was involved in the fraudulent actions at issue, it was Peterson who assumed an alias to underwrite insurance contracts; it was Peterson who agreed
We reject Peterson‘s reliance on cases like United States v. Seher, 562 F.3d 1344 (11th Cir. 2009). There, in the context of a drug conspiracy, we upheld the sufficiency of the evidence at trial to affirm a conviction for money laundering. Id. at 1364-65. Peterson now claims that the evidence relevant to his own knowledge of the money laundering conspiracy at issue in this case is significantly less convincing than in Seher. Without passing on the merit of that contention, we note that Peterson does not argue that there is no evidence; he only says that “[c]omparing the instant case to the Seher case, it is clear that any evidence that can be adduced against Peterson is minimal.” App. Peterson Br. at 40. However “minimal” Peterson considers the above evidence to be, we have no doubt that it is nonetheless sufficient for a jury to have found Peterson guilty of Count II. Accordingly, the district court properly denied his motion to acquit because of an insufficiency of evidence.
V.
Having exhaustively reviewed the record and entertained oral argument, we deny Appellants’ alleged errors and AFFIRM their convictions.