Petition for Writ of Certiorari — Garib Bazain v. United States

$ e)8 g Woks

upre

FILED

Q2 616 OCT 18 2002

ORGICE OE THE CLERK

No. 02-

IN THE

Supreme Court of the Gnited States

JORGE L. GARIB BAZAIN,

Petitioner,

V.

UNITED STATES,

Respondent.

Petition for a Writ of Certiorari to the

United States Court of Appeals

for the First Circuit

PETITION FOR A WRIT OF CERTIORARI

HOWARD M. SREBNICK JOHN G. ROBERTS, JR.*

BLACK, SREBNICK CHRISTOPHER T. HANDMAN

& KORNSPAN, P.A. HOGAN & HARTSON L.L.P.

201 South Biscayne Boulevard 555 Thirteenth Street, N.W.

Suite 1300 Washington, D.C. 20004

Miami, Florida 33131 (202) 637-5810

(305) 371-6421

SCOTT A. SREBNICK

2400 South Dixie Highway

Suite 200

Miami, Florida 33133

(305) 285-9019

*Counsel of Record Counsel for Petitioner

WILSON-EPES PRINTING CO., INC. — (202) 789-0096 - WASHINGTON, D. C. 20001 ma

QUESTIONS PRESENTED

1. Section 666 of Title 18 of the United States Code

makes it a federal offense to steal or embezzle from an

organization that “receives” more than $10,000 a year in

federal “benefits.” In this case, Dr. Jorge L. Garib Bazain

was convicted of conspiracy to violate Section 666 for

paying personal expenses with funds belonging to a corpora-

tion that, although it did not itself receive federal benefits,

was paid by a municipal government that did.

The first question presented by the petition is: Whether the

First Circuit correctly held—in conflict with this Court’s

decisions and its sister circuits—that a private organization

that does not itself receive benefits under a federal program is

nonetheless covered by Section 666 because it receives

payments from an entity that does?

2. In Taylor v. Louisiana, 419 U.S. 522, 528 (1975), this

Court held that “the selection of a petit jury from a represen-

tative cross section of the community is an essential compo-

nent of the Sixth Amendment right to a jury trial.” The

District Court below, sitting in Puerto Rico, ‘systematically

excluded from the jury otherwise qualified jurors simply

because they were not proficient in English.

The second question presented by the petition is: Whether,

in Puerto Rico, Systematically excluding individuals from a

criminal jury due solely to a lack of proficiency in English

violates the Sixth Amendment, when the technology to

conduct simultaneous translation is readily available and is

used in trials throughout the country?

(i)

ee ee ea en eT ee et ee

il

PARTIES TO THE PROCEEDINGS

Petitioner Jorge L. Garib Bazain was a defendant and an

appellant below. Luis Dubén Otero, represented by separate

counsel, was also a defendant and an appellant below. We

have been advised that Mr. Dubén Otero will file a separate

petition for certiorari seeking review of the decision below.

TABLE OF CONTENTS

Page

IUESTIONS PRESENTED ......:.....:.ccscscovssesesssssvsseoees i

PARTIES TO THE PROCEEDINGS ...........cccccccsceees. il

BRR OE PITRE eS os sscesesesesessesencesersssssesecees vi

Sa NE BRET eccscsschnssvastsysctvvesisseTasesvecnescsrseness l

a tes Silk innveidessapanatbdevieesvesccasseuns l

STATUTORY AND CONSTITUTIONAL

PROVISIONS INVOLVED............ccccccscssseseecesees 2

oP Ph UUIEM scesesessusesinsnsusixsessoseinsesesesevsovesenseassors 3

STATEMENT OF THE CASE...........c.cccccccscsessssssseeees 4

REASONS FOR GRANTING THE WRIT..............-. 10

I. THE COURT SHOULD GRANT THE

PETITION TO CLARIFY THAT AN

ORGANIZATION THAT DOES NOT

ITSELF RECEIVE FEDERAL BENEFITS,

BUT IS PAID BY AN ENTITY THAT

DOES, IS BEYOND THE SCOPE OF

A M1

A. The Decision Below Conflicts With

This Court’s Precedents Establishing

When An Organization “Receives”

POG, TOOTNOTIIT ocsssssccscsesesscssovsseeeessesonss 1]

B. The Federal Courts Of Appeals Are Di-

vided Over The Extent To Which § 666

May Federalize Otherwise Local

Crimes Of Theft And Embezzlement........ 19

(iii)

iv

TABLE OF CONTENTS—Continued

Page

C. The Question Presented Is Important

And Recurring And Should Be Decided

By This Couitt ..........crcccorscsersisrrsevresscesesseres 25

II. THE COURT SHOULD GRANT THE

PETITION TO DECIDE WHETHER, IN

PUERTO RICO, SYSTEMATICALLY EX-

CLUDING POTENTIAL JURORS BASED

ON THEIR LACK OF ENGLISH PRO-

FICIENCY VIOLATES THE SIXTH

AMENDMENT. . ...:00sscsoscsssccescsocssocessesecssenconesnecs 27

CONC LIISIOIN oncesceccsnonevscossonsrisssonessnesosesosnnsosenesecnapens 30

Vv

TABLE OF CONTENTS—Continued

Page

APPENDICES

APPENDIX A:

Opinion of the Court of Appeals, dated

Ne Bi tedennnseciicessnsnsaeceebblanistenniies la

APPENDIX B:

Opinion and Order Denying Judgment of

Acquittal or New Trial, dated March 3,

iin hiaclinasiccsshaintisensisedeinhtaigeinceaataeeaa tuasaihditiaisidi 28a

APPENDIX C:

Order of the Court of Appeals Denying Re-

hearing, dated July 23, 2002............0...0000. 43a

ee ee ee ete ee eee

TABLE OF AUTHORITIES

Page

Cases:

Braxton v. United States, 500 U.S. 344

(1991) ...csccccscssssrersscessscssosossersnseresessesrerssensecnesnssosessesees 19

DeLong v. Brumbaugh, 703 F. Supp. 399

(W.D. Pa. 1989).........sssscrssssscsseressesesssssssssesssssessesees 29

Duren v. Missouri, 439 U.S. 357 (1979).....cccceeeereees 27,29

Fischer v. United States, 529 U.S. 667

(20 0) cts passim

Gallagher v. Croghan Colonial Bank, 89

F.3d 275 (6th Cir. 1996)...........ccssosssscssscsrvescssverseseees 21

Galloway v. Superior Court of the District

of Columbia, 816 F. Supp. 12 (D.D.C.

EDDS)...ccrccrivnsecveevavcncsenseesssncesonennpsonssanssnenneensnssenssenenes 29

Grove City College v. Bell, 465 U.S. 555

(1984) ...scsrererssresersssvescveszesecvessconsenssseessnesnossesseeseesoneenes 16

Grzan v. Charter Hosp., 104 F.3d 116 (7th

Che. 1997). .c.vececcssevererercasevescsssseccnenscnsvesosvesesseassasoebeeeeten 21

Igartua de la Rosa v. United States, 107 F.

Supp. 2d 140 (D.P.R. 2000) ........cscssseseseeeesenersenenenses 28

National Collegiate Athletic Ass'n Vv.

Smith, 525 U.S. 459 (1999) .......cccrcsovsssrrevesesessees passim

Salinas v. United States, 522 U.S. 52

(1997) ....corscsssssesseveceseeresonsoosvononeonsonensnsseessneessmusensnssnaees 22 1

Screws v. United States, 325 US. 91

C1DES) .....0yscernsarvssescnenecsensnsnestorensussnesensnesonensesnessonnsansens 25

South Dakota v. Dole, 483 U.S. 203 (1987)... 22

Taylor v. Louisiana, 419 U.S. 522 (1975)... passim

United States Dep't of Transp. v. Para-

lyzed Veterans of Am., 477 U.S. 597

(19BG) ..crscossocsreyersecscssvessonssccsensessnsssvessenesesesensgenes passim

Vii

TABLE OF AUTHORITIES—Continued

Cases:

United States v. Copeland, 143 F.3d 1439

ee IT: TIE ithcinlihiinteiaienasapecninepeiairnseetseniniti

United States v. Dempsey, 830 F.2d 1084

SE nes ITT inckancnshnsnsainiteheciansanoteseneteionntoien

United States v. Enmons, 410 U.S. 396

Pe iiekniiansdicantaniscetmainetiaien

United States v. Fernanc'2z, 282 F.3d 500

(7th Cir. 2002), pet. for cert. filed, 71

U.S.L.W. 3138 (Aug. 2, 2002) (No. 02-

United States v. Flores-Rivera, 56 F.3d

ee ee Me iicenisieieniils datisiteciiniinnieibinidenadvesnis

United States v. Grossi, 143 F.3d 348 (7th

Cir. 1998, cert. denied, 525 U.S. 879

A NT Aa RS OR

United States v. Lipscomb, 299 F.3d 303

Soe rans UTNE saicseihciacsdesbnessiaciatckanmsialisaensaemnicn

United States v. Lopez, 514 U.S. 549

1” SCARE RRS A I

United States v. Phillips, 219 F.3d 404 (Sth

United States v. Reyes, 239 F.3d 722 (Sth

Cir.), cert. denied, 122 S. Ct. 156 (2001)........

United States v. Rooney, 986 F.2d 31 (2d

as TTI ieeiccieiichnshaicbpiniehcnalas iasaitenstiioaenibniccni

United States v. Santopietro, 166 F.3d 88

ea

United States v. Suarez, 263 F.3d 468 (6th

Cir. 2001), cert. denied, 122 S. Ct. 1547

STEED sisiaaetiahdinieraneaiienrennnsiitnibbntensnainutinabassnevines

Page

Viii

TABLE OF AUTHORITIES—Continued

Page

Cases:

United States v. Wyncoop, 11 F.3d 119 (9th

Cir. 1993)......cscscssssssesescssssesesssesesenensnenenssnsseeeesesenennenanes 20

United States v. Zwick, 199 F.3d 672 (3d

Cir. 1999)......cccsscsssscssssssenessersesscnsnensssssessenseneneneenes 22,24

Constitution:

U.S. Const. art. I, § 8, C]. 1 oo... eeeecseeseeeeenereereneneeenees passim

U.S. Const. amend. VI.........00cccrccccccsssssseeeees 3,9,10,27,28

Statutes: a

18 U.S.C. § 666 ......cccscccseereessessenseeeseesnnrsesnsesnnennenees passim

18 U.S.C. § 666(b)......cccccsceseeseeneseenesteseeneenensenenens passim

18 U.S.C. § 1623 ......ssccssssssesesesessseeensessnessnssnesnenennsnenenenenes 5

20 U.S.C. § 1681(a)......sccccseccsseseseeneeensenseenseneeesneneenes 15,17

21 U.S.C. § 1177(a)....c.sccceseseresesesenenenensnenennsneeensenennnarsenes 16

21 U.S.C. § 1177(f) ...sceseseeceseresessseneesensnennssstnenennenenenns 9,13

2B U.S.C. § 1254(1).....ccccccsereseseseneneensnsnensenseensesenenanannanes 2

2B U.S.C. § 1827 ....scsccseseseseseeesseeeesnsssnensnenensenenensssenenenens 30

28 U.S.C. § 1865(b)(2).....-eccccssesesereeenenesnereeseeneneenenenes 7,27

28 U.S.C. § 1865(b)(3).....-ccccccsesenereeseeererereeeeneneennenes 7,27

29 U.S.C. § 794 ..cccsccccsssssssesesserenenesssensssasnsneneeneens 14,15,17

42 U.S.C. § 12101 ...ececeeseseeseseseeeesneneenennsnsnnsnsenenennenenens 29

Rules:

S. Ct. Rule 10(8)........ccccscccccccceeees seavscosceseoonesonovesensssvecsooees 19

S. Ct. Rule 10(C).........sscscsssssssesreescsnssrssessnesssssessensennennsnns 11

FED. R. CIV. P. 43(f).......ccscccessssvssrseeeersessnsssssssceseneseesenenes 30

iX

TABLE OF AUTHORITIES—Continued

Page

Rules:

SR Bite a, Fs SI teisenicisnensienhnishcecsndineeilepnicicsentndenaetiabiionscin 30

ey eee Ma HU Wid dciinaibtidinieasihcnicatsddbiiieilabaiepabncababeianenbiesian 30

Legislative Material:

Fe & os, 5 eee 12,20,26

Other Authorities:

George D. Brown, Stealth Statute—

Corruption, the Spending Power, and

the Rise of 18 U.S.C. § 666, 73 NOTRE

ae Bs SF COTE cictusioncesercsnntincsrisneststexess 10,26

Webster’s Third New International Dic-

Sr i decaiscdacenccavctaveasticialantintsilvenieincsensceniccineivans 13

IN THE

Supreme Court of the Anited States

No. 02-

~

JORGE L. GARIB BAZAIN,

Petitioner,

V. '

UNITED STATES,

Respondent.

Petition for a Writ of Certiorari to the

United States Court of Appeals

for the First Circuit

PETITION FOR A WRIT OF CERTIORARI

Jorge L. Garib Bazain respectfully petitions for a writ of

certiorari to review the judgment of the United States Court

of Appeals for the First Circuit in this case.

OPINIONS BELOW

The opinion of the First Circuit affirming the District

Court’s judgment of conviction and sentence is reported at

292 F.3d 1 and reprinted in the appendix hereto (“App.”’) at

la. The opinion of the District Court denying Dr. Garib’s

motion for acquittal or new trial is unreported and is re-

printed at App. 34a.

JURISDICTION

The judgment of the Court of Appeals was entered on May

29, 2002. App. la. A timely petition for rehearing and

2

rehearing en banc was denied on July 23, 2002. App. 49a.

The jurisdiction of this Court rests on 28 U.S.C. § 1254(1).

STATUTORY AND CONSTITUTIONAL

PROVISIONS INVOLVED

Section 666 of Title 18 of the United States Code provides

in pertinent part:

(a) Whoever, if the circumstance described in subsection

(b) of this section exists—

(1) being an agent of an organization, or of a State, lo-

cal, or Indian tribal government, or any agency

thereof—

(A) embezzles, steals, obtains by fraud, or otherwise

without authority knowingly converts to the use of

any person other than the rightful owner or intention-

ally misapplies, property that—

(i) is valued at $5,000 or more, and

(ii) is owned by, or is under the care, custody or

control of such organization, government, or

agency

* * *

shall be fined under this title, imprisoned not more than 10

years, or both.

(b) The circumstance referred to in subsection (a) of this

section is that the organization, government, or agency

receives, in any one year period, benefits in excess of

$10,000 under a Federal program involving a grant, contract,

subsidy, loan, guarantee, insurance, or other form of Federal

assistance.

3

The Spending Clause of the United States Constitution

provides: “The Congress shall have Power to lay and collect

Taxes, Duties, Imposts and Excises, to pay the Debts and

provide for the common Defence and general Welfare of the

United States.” eo

The Sixth Amendment to the United States Constitution

provides in pertinent part: “In all criminal prosecutions, the

accused shall enjoy the right to a speedy and public trial, by

an impartial jury of the State and district wherein the crime

shall have been committed * * *.”

INTRODUCTION

This case concerns the reach of federal criminal jurisdiction

under the Spending Clause. Although theft and embezzle-

ment are not, as a rule, federal offenses, Section 666 of Title

18 of the United States Code converts them into federal

crimes where the target is an organization that “receives”

more than $10,000 in federal “benefits.” Federal jurisdiction

thus hinges on identifying a proper recipient of federal

benefits.

Petitioner Jorge L. Garib Bazain was convicted of conspir-

acy to violate § 666 for having embezzled from a private

corporation that did not itself receive federal benefits but was

paid for services by an entity that had received a subgrant

from yet another entity that had received a federal grant. A

panel of the First Circuit held that an organization “receives”

federal “benefits” whenever it is simply reimbursed with

money that can ultimately be traced to a federal grant, so

long as the organization provides a service that in some way

promotes the goals of the federal grant program. That ruling

directly conflicts with this Court’s decision in Fischer v.

United States, 529 U.S. 667 (2000), as well as this Court’s

precedents limiting the reach of other statutes enacted

pursuant to the Spending Clause that use analogous federal-

funding triggers. By employing a “broad, almost limitless

use of the term” recipient of federal benefits, the rule adopted

4

by the court below “would turn almost every act of fraud

*** into a federal offense, upsetting the proper federal

balance.” Jd. at 681. Moreover, the decision exacerbates an

already entrenched circuit split over just how much of a

federal interest the Spending Clause requires to justify

prosecutions of what would otherwise be purely local crimes

under § 666. This Court should grant certiorari to resolve the

multiple conflicts on the important question presented.

This case also raises an important Sixth Amendment issue:

whether systematically excluding non-English speakers from

federal juries in criminal trials in Puerto Rico—a jurisdiction

in which a majority of the population does not speak Eng-

lish——violates a defendant’s right to be tried by a jury se-

lected “from a representative cross section of the commu-

nity.” Taylor v. Louisiana, 419 U.S. 522, 528 (1975). That

exclusion cannot be reconciled with this Court’s precedents.

STATEMENT OF THE CASE

1. Doctor Jorge L. Garib Bazain is an infectologist,

noted for his work with HIV and AIDS, who established a

successful medical practice in San Juan, Puerto Rico. From

1988 until 1990—the timeframe at issue in this case—Dr.

Garib was a principal shareholder and director of Advanced

Community Health Services (“ACHS”), a closely held, for-

profit corporation incorporated in Puerto Rico.! During Dr.

Garib’s tenure with ACHS, the corporation generated mil-

lions of dollars in revenue, with roughly $3.2 million a year

coming from a contract with the Municipality of San Juan to

provide AIDS counseling and professional services to

residents of the Municipality.

2. In 1997, a federal grand jury handed down a multi-

count indictment against a number of individuals for stealing

| Dr. Garib had a 20% stake in ACHS, while his codefendant

below, Luis Dubén Otero, and another doctor, Salomon Asmar,

each held 40% of the corporation’s stock.

ieee

5

and embezzling from ACHS. Dr. Garib was not named in

that indictment, nor in the two superseding indictments that

followed, but was ultimately charged in a third superseding

indictment (along with Dub6n) with conspiracy to violate 18

U.S.C. § 666.2 The extent of Dr. Garib’s participation in the

conspiracy was limited to allegations that he converted some

of ACHS’s revenues for his own personal use, including:

contributing to candidates running for local Puerto Rican

office, lending a video camera purchased by ACHS to a San

Juan mayoral candidate, and adding a housekeeper hired to

clean his residence to the ACHS payroll.

But because theft and embezzlement are not, generally

speaking, federal crimes, the government had to charge—and

prove—more than garden-variety misappropriation. Rather,

to establish federal jurisdiction over Dr. Garib’s otherwise

parochial offenses under § 666, the government had to

demonstrate that ACHS—the organization from which Dr.

Garib allegedly stole—had “receive[d] *** benefits in

excess of $10,000 under a Federal program involving a grant,

contract, subsidy, loan, guarantee, insurance, or other form of

Federal assistance.” 18 U.S.C. § 666(b).

To carry its burden, the government pointed to two related

payments—one for $70,680 in 1989 and the other for

$99,279 the next year—that ACHS received to operate an

assessment and intervention center for drug addicts in San

Juan. The problem was that both of these payments came to

ACHS not from the federal government, but from the Mu-

nicipality of San Juan.’

2 Dr. Garib was also charged with and convicted of perjury for

testimony he gave to the grand jury, in violation of 18 U.S.C.

§ 1623.

3 These payments were in addition to the annual $3.2 million

contract between ACHS and the Municipality for general AIDS

counseling.

6

Despite this purely local transaction, the government al-

leged that federal jurisdiction was nonetheless proper under

§ 666 because the money ACHS received from the Munici-

pality could eventually be traced back to a federal source.

According to the government, the fact that ACHS was

ultimately paid from funds that were at one time disbursed

under a federal grant, and which then went through a series

of nonfederal intermediaries, transformed ACHS into an

organization that “receive[d] *** benefits in excess of

$10,000 under a Federal program.” 18 U.S.C. § 666(b).

The government’s trickledown explanation for why ACHS

was a recipient of federal benefits began with a $3,795,172

grant from the National Institute on Drug Abuse (“NIDA”).

NIDA, a federal agency under the auspices of the Secretary

of Health and Human Services, awarded the grant to the

Department of Anti-Addiction Services, an agency of the

Commonwealth of -Puerto Rico. The Commonwealth, in

turn, passed along a small portion of the grant money to the

Municipality of San Juan, with which the Municipality was

to provide laboratory, intervention, and community-outreach

services to residents of San Juan. The Municipality then in

turn entered into a subcontract with ACHS, under which

ACHS did nothing more than make some of its employees

available to assist the Municipality in providing those ser-

vices. Purely as compensation for this arrangement, ACHS

received from the Municipality the two payments for $70,680

and $99,729 that the indictment characterized as the receipt

of federal benefits—a characterization that transformed the

allegations of local self-dealing against Dr. Garib into a

federal case.*

4 The government also alleged that two other transactions led

ACHS to receive federal benefits. In one, the Centers for Disease

Control had contracted with the Municipality of San Juan to test

members of the public for AIDS. The Municipality then subcon-

tracted that work to ACHS, which received $11,862.14 for its

services. In the other transaction, ACHS was paid $100,000 by the

7

3. The case proceeded to trial on January 10, 2000. Both

before trial and at the close of the government’s case, Dr.

Garib moved for dismissal or acquittal on the § 666 charge,

arguing that the money ACHS received from the Municipal-

ity plainly did not constitute the receipt of federal benefits.

Moreover, Dr. Garib argued that, to convert those Municipal

payments into federal benefits simply because a portion of

those funds may have come from a distant federal grant

would impermissibly transform every act of theft and embez-

zlement into a federal offense, a result Congress never

intended.

Dr. Garib also argued that the District Court unconstitu-

tionally deprived him of a petit jury selected from a fair

cross-section of the community. Specifically, Dr. Garib

maintained that, as applied to trials conducted in Puerto Rico,

the general rule prohibiting individuals from serving on

federal juries if they are not proficient in English, see 28

U.S.C. § 1865(b)(2)-(3), systematically excludes a substantial

number of otherwise qualified citizens—particularly the

poor.

The jury returned a guilty verdict. On March 3, 2000, the

District Court rejected Dr. Garib’s timely post-trial filings, in

which he renewed his arguments for acquittal and sought, in

the alternative, a new trial. App. 28a.

Municipality for work relating to a mass-media education project

on AIDS. The government maintained that this payment consti-

tuted receipt of federal benefits based solely on “testimony from a

municipal official that this payment had its source in federal funds,

which passed through the Puerto Rico Department of Health to the

Municipality.” App. 8a. Because the Court of Appeals limited its

analysis to the NIDA grant, neither of these other transactions is at

issue here. Jd. 10a n.9 (“We thus need not decide the character of

the Centers for Disease Control or mass-media education project

payments.”). In any event, these transactions fail to satisfy the

jurisdictional prerequisite under § 666 for the same reasons the

payments on which the Court of Appeals rested its holding do.

8

4. On appeal a panel of the First Circuit affirmed. Rec-

ognizing that this Court’s decision in Fischer v. United

States, supra, had, under one set of facts, “addressed the

issue of what constitutes receipt of benefits under § 666,”

App. 8a, the Court of Appeals devoted most of its analysis to

summarizing that decision. After stating F’ ischer’s holding—

“that § 666 ‘covers fraud perpetrated on organizations

participating in the Medicare program,’” id.—the panel

recited the test this Court established there:

To determine whether an organization participating in

a federal assistance program receives “benefits,” an

examination must be undertaken of the program’s

structure, operation, and purpose. The inquiry should

examine the conditions under which the organization

receives the federal payments. The answer could de-

pend, as it does here, on whether the recipient’s own

operations are one of the reasons for maintaining the

program. [Jd. 9a (quoting Fischer, 529 U.S. at 681).]

The Court of Appeals went on to note that, under this ru-

bric, hospitals were deemed recipients of federal benefits in

Fischer because “monies paid included sums to enhance the

hospitals themselves,” and because the Medicare regime

“placed conditions on recipient hospitals, ‘unlike the case of

a contractor whom the Government does not regulate or

assist for long-term objectives or for significant purposes

beyond performance of an immediate transaction.”” Id.

(quoting Fischer, 529 U.S. at 680).

Despite its otherwise lengthy exposition of Fischer, the

First Circuit mentioned only in passing the fundamental

limitation established by that decision. As the panel ob-

served, this Court in Fischer “refused to endorse the notion

that all that was required for funds to constitute benefits

under § 666 was to establish that they came from a federal

program.” Jd. 10a.

9

Although accurately reciting this key principle, the Court of

Appeals paid no heed to it once it began evaluating whether

the money paid to ACHS by the Municipality of San Juan

constituted receipt of federal benefits. Instead, the panel

thought it enough that the payments received by ACHS

boasted a federal pedigree. According to the Court of

Appeals, “[o]ne of [NIDA]’s goals in making grants is to

‘insure care of good quality, in general community facili-

ties.” Jd. 1la (quoting 21 U.S.C. § 1177(f)). From that

unremarkable premise the court drew a startling conclusion:

that NIDA therefore “would naturally intend its monies to

assist [ACHS] in providing AIDS care,” thereby rendering

ACHS—and any subcontractor for that matter—a recipient of

federal benefits just for being reimbursed for providing

services to a nonfederal entity. /d. at 12a. Moreover, based

on the testimony of a civil servant with the Department of

Health and Human Services, who opined that federal grants

implicitly establish a relationship between the federal gov-

ernment and every subgrantee and subcontractor who comes

in contact with the federal money, the First Circuit claimed to

find further-support for its ruling that ACHS received federal

benefits. Jd. at 13a. In short, the court reasoned that “‘if the

payments in Fischer were ‘made not simply to reimburse,’

then neither were the payments here.” Jd. (quoting Fischer,

529 U.S. at 679).

The panel also rejected Dr. Garib’s challenge to the policy

of excluding non-English speakers from the jury. /d. 26a.

Although acknowledging that “ ‘the selection of a petit jury

from a representative cross section of the community is an

essential component of the Sixth Amendment right to a jury

trial,’ ” id. (quoting Taylor v. Louisiana, 419 U.S. at 528),

the court relied on its earlier precedents holding that “ ‘the

overwhelming national interest served by the use of English

in a United States court * * * justifie[d] conducting proceed-

ings in the District of Puerto Rico in English and requiring

jurors to be proficient in that language.’” Jd. (quoting

10

United States v. Flores-Rivera, 56 F.3d 319, 326 (Ist Cir.

1995)).

Dr. Garib filed a timely petition for rehearing and rehearing

en banc, which was denied on July 23, 2002. Id. 43a.

REASONS FOR GRANTING THE WRIT

The First Circuit’s decision in this case conflicts with the

precedents of this Court on an important issue that federal

courts regularly—and, given the radical expansion of prose-

cutions under § 666,° increasingly—face: whether it is a

federal crime to steal or embezzle from a local business that

does not itself “receive[]” financial “benefits” under a federal

program, but is paid for services by an entity that does. The

Court of Appeals resolved that question affirmatively, and in

doing so, departed from not only Fischer but also decisions

of this Court delineating what it means to be a recipient of

federal assistance under analogous civil statutes enacted—

like § 666—pursuant to Congress’s Spending Clause power.

See National Collegiate Athletic Ass’n v. Smith, 525 U.S.

459, 468-470 (1999); United States Dep't of Transp. Vv.

Paralyzed Veterans of Am., 477 U.S. 597, 610 (1986). And

by ignoring this Court’s precedents, the First Circuit not

surprisingly adopted a rule that conflicts with decisions from

the other courts of appeals.

In addition, the First Circuit fundamentally misapplied this

Court’s precedents in holding, contrary to Taylor v. Louisi-

ana, 419 U.S. at 528, and its progeny, that a federal court

sitting in Puerto Rico may, consistent with the Sixth

Amendment’s guarantee of a petit jury selected from a fair

5 See George D. Brown, Stealth Statute—Corruption, the Spend-

ing Power, and the Rise of 18 U.S.C. § 666, 73 NOTRE DAME L.

REV. 247, 248-249 (1998) (noting the “extraordinary recent

development” in prosecutions under § 666 and the corresponding

rise in prosecutions of traditionally “local” corruption through

§ 666).

11

cross-section of the community, exclude from the jury

individuals not proficient in English.

I. The Court Should Grant The Petition To Clarify

That An Organization That Does Not Itself Re-

ceive Federal Benefits, But Is Paid By An Entity

That Does, Is Beyond The Scope Of § 666.

A. The Decision Below Conflicts With This

Court’s Precedents Establishing When An

Organization “Receives” Federal- “Bene-

fits.”

A principal consideration governing the exercise of this

Court’s certiorari jurisdiction is whether a court of appeals

“has decided an important question in a way that conflicts

with relevant decisions of this Court.” S. Ct. Rule 10(c).

The First Circuit decision in this case conflicts with this

Court’s decisions in Fischer, NCAA, and Paralyzed Veterans.

The Court should grant the petition to resolve this conflict.

1. The question presented in Fischer was whether hospi-

tals participating in the Medicare program “receiv[e}” federal

“benefits.” 529 U.S. at 669. To resolve that inquiry, this

Court examined Medicare’s “structure, operation, and

purpose.” /d. at 681. Distinguishing situations in which an

organization is simply reimbursed for providing services to

the government, this Court observed that “Medicare operates

with a purpose and design above and beyond point-of-sale

patient care,” id. at 677-678, and that “[b]y reimbursing

participating providers for a wide range of costs and ex-

penses, * * * ensure[s] that providers possess the capacity to

render, on an ongoing basis, medical care to the program’s

qualifying patients.” Jd. at 680. Moreover, the Court noted

that, unlike typical commercial transactions between gov-

ernment and business, the Medicare program subjects par-

ticipating hospitals to pervasive regulation and oversight. /d.

at 680. Because these factors combined to “reveal a compre-

hensive federal assistance enterprise aimed at ensuring the

12

availability of quality health care for the broader commu-

nity,” id., the Court concluded that “[t]he funds health care

organizations receive for participating in the Medicare

program constitute ‘benefits’ within the meaning of 18

U.S.C. § 666(b).” Jd. at 681.

In reaching this narrow holding, however, the Court nota-

bly rejected “the Government’s broader position.” Jd. at 677.

Advocating the same rule that the First Circuit effectively

adopted below, the Solicitor General in Fischer had argued

that “whether an organization receives ‘benefits’ within the

meaning of § 666(b) turns on whether the Federal Govern-

ment was the source of the payment.” Jd. at 676-677 (em-

phasis added). In other words, under the government’s

proposed test, “the ‘federal-program source of the funds’ ”

would be enough on its own to “satisfy[y] the benefits

definition.” Jd. at 677 (quoting U.S. Br., Fischer v. United

States, No. 99-116, at 11).

This Court flatly rejected the government’s expansive view

because Congress never intended that “federal funds dis-

bursed under an assistance program w[ould] result in cover-

age of all recipient fraud under § 666(b).” Jd. at 681 (empha-

sis added). See also S. REP. NO. 98-225, at 370 (1983)

(“{[N]ot every Federal contract or disbursement of funds

would be covered [under § 666]. For example, if a govern-

ment agency lawfully purchases more than $10,000 in

equipment from a supplier, it is not the intent of this section

to make a theft of $5,000 or more from the supplier a Federal

crime.”). As this Court recognized, bedause “{a}ny receipt of

federal funds can, at some level of generality, be character-

ized as a benefit,” Fischer, 529 U.S. at 681, it takes more

than simply identifying a federal source of funding to vest the

federal judiciary with jurisdiction over inherently local

offenses. Were it otherwise, § 666 “would turn almost every

act of fraud or bribery into a federal offense, upsetting the

proper federal balance.” Jd.

13

The First Circuit’s decision is plainly at odds with the

principles established in Fischer. The Court of Appeals

considered ACHS a recipient of federal benefits simply

because the federal source for the money ACHS received—

the NIDA grant that went first to the Commonwealth, then to

the Municipality, and finally on to ACHS—was intended to

“insure care of good quality[] in general community facili-

ties.” App. lla (quoting 21 U.S.C. § 1177(f)). And since

ACHS was providing the Municipality with AIDS services,

the federal government “would naturally intend its monies to

assist [ACHS] in providing AIDS care.” Jd. 12a. But that

syllogistic view of how § 666 operates is really no different

from what the government advocated—and this Court

rejected—in Fischer: that recipient status turns solely on

whether the federal government was the source of the pay-

ment. That is because every federal agency that issues a

grant surely intends that the money it disburses will be used

to promote the program’s specific goals, and, by extension,

assist the various entities called upon to accomplish those

objectives. Yet to say that those entities therefore “receive”

federal “benefits” simply because they are paid with funds

that can be traced to some federal source—no matter how

remote—is to reduce the jurisdictional inquiry under § 666 to

a “level of generality” this Court eschewed in Fischer. 529

USS. at 681.

The First Circuit’s analytic abstraction thus blurs the dis-

tinction Fischer drew between entities that receive “benefits”

and those that simply get paid. As this Court held there,

“(t]he noun ‘benefit’ means ‘something that guards, aids, or

promotes well-being.’” Jd. at 677-678 (quoting Webster’s

Third New International Dictionary 204 (1971)). Hospitals

participating in the Medicare program receive “benefits”

because the money they get represents more than just “point-

of-sale patient care,” id. at 678, for it covers not only “medi-

cal treatment costs,” but also “overhead costs[] and education

costs” so that “providers possess the capacity to render, on an

14

ongoing basis, medical care to the program’s qualifying

patients.” Jd. at 680. The Medicare program thus “aids”

participating hospitals by extending funds that go above and

beyond the basic costs of the services they provide. See id. at

681 (“Medicare funds *** provide benefits extending

beyond isolated, point-of-sale treatment transactions.”).

Not so with entities that enter into garden-variety service

contracts with state and local governments. The First Cir-

cuit’s rule—that an organization receives “federal benefits”

whenever it is reimbursed with federal-source funds for

services that in some way promote the federal program’s

goals—cannot be reconciled with the narrow definition of

“benefits” this Court adopted in Fischer. Under Fischer, it is

not enough to simply ask whether the federal government

hoped that its grant money would be used to hire subcontrac-

tors that would advance the program’s mission. The proper

question, instead, is whether the federal government backed

up that aspiration by providing the organization with addi-

tional “aid.” A typical subcontractor—like ACHS in this

case and unlike the hospitals in Fischer—teceives no addi-

tional payment above and beyond the market value of its

services. That is to say, it gets paid, not aid. Indeed, from

the contractor’s perspective, it makes no difference—

financially or otherwise—that the money with which it is

reimbursed originated with Uncle Sam or someone’s Aunt

Sally; in either situation, the contractor receives no extra

“benefit.”

2. The First Circuit’s boundless construction of the

phrase “recipient” of federal “benefits * * * under a Federal

program involving * * * [a] form of Federal assistance” also

conflicts with this Court’s decisions in Paralyzed Veterans,

477 U.S. at 603-612, and NCAA v. Smith, 525 U.S. at 465-

469. The question in Paralyzed Veterans was whether

Section 504 of the Rehabilitation Act—which prohibits

discrimination against handicapped persons in any program

or activity “receiving Federal financial assistance,” 29 U.S.C.

15

§ 794—applies to commercial airlines. Although airlines do

not receive federal aid, airport operators do. /d. at 604-605.

In arguing that Section 504 covers airlines, the plaintiffs in

Paralyzed Veterans reasoned that “airlines are ‘indirect

recipients’ of the aid to airports,” because “airport operators

convert the [aid] into runways and give the federal assis-

tance—now in the form of a runway—to the airlines.” Jd. at

606. This Court disagreed, holding that Section 504 “draws

the line of federal regulatory coverage between the recipient

and the beneficiary,” id. at 610, and that therefore a statue

directed toward organizations “receiving Federal financial

assistance,” 29 U.S.C. § 794, is necessarily limited to “those

who receive the aid, but does not extend as far as” entities

that merely derive some economic advantage from it.

Paralyzed Veterans, 477 U.S. at 607 (emphasis added).

The Court reaffirmed this rule in NCAA. There the ques-

tion was whether Title [IXxX—which prohibits discrimination

on the basis of sex by any educational institution “receiving

Federal financial assistance,” 20 U.S.C. § 1681(a)—covered

the National Collegiate Athletic Association. Although the

NCAA is a private association that does not itself receive

federal financial assistance, the lower court held that the

association was covered because it receives dues from its

member institutions, which do receive federal assistance.

This Court reversed. To apply Title [X to all who realized

some gain from federal assistance, this Court held, would—

as Paralyzed Veterans recognized—“yield almost ‘limitless

coverage.’”” NCAA, 525 U.S. at 467 (quoting Paralyzed

Veterans, 477 U.S. at 608). Because Congress never in-

tended such a result, this Court reiterated that “[e]ntities that

receive federal assistance * ** are recipients within the

meaning of Title [X; entities that only benefit economically

from federal assistance are not.” Jd. at 468.

The “proposition that federal coverage follows the aid past

the recipient” to organizations that merely derive economic

advantage from it, Paralyzed Veterans, 477 U.S. at 607—

16

flatly rejected by this Court in Paralyzed Veterans and again

in NCAA—is precisely the principle the First Circuit adopted

and applied in this case to extend § 666 to ACHS. Like the

NCAA in its case and the airlines in Paralyzed Veterans,

ACHS did not itself receive federal monies, and—at most—

profited only indirectly by the NIDA grant. To be sure, the

subcontract ACHS received from the Municipality might

never have come into existence had the federal government

not disbursed money to the Commonwealth, and had the

Commonwealth not passed some of that money on to the ~

Municipality. But the money ACHS received as a result of

that arrangement does not make it a recipient of federal

benefits; at most, ACHS is simply an indirect beneficiary of

federal largesse, wholly beyond the scope of § 666(b).

Indeed, this Court has “recognized that most federal assis-

tance has ‘economic ripple effects,’ ” but has emphatically

“rejected the argument that those indirect economic benefits

can trigger statutory coverage.” Paralyzed Veterans, 477

U.S. at 607 (quoting Grove City College v. Bell, 465 US.

555, 572 (1984)).

The First Circuit’s unprecedented assumption that every

entity paid with money originating in a federal grant is

necessarily a recipient of federal benefits also conflicts with

the rule in Paralyzed Veterans that, to determine recipient

status, the court must “look to the terms of the underlying

grant statute.” 477 U.S. at 604. See also Grove City College,

465 U.S. at 565. Here, the relevant statute plainly does not

permit the Secretary of Health and Human Services to make

NIDA grants to for-profit entities, like ACHS. See 21 U.S.C.

§ 1177(a). Rather, all the Secretary is empowered to do is

“make grants to * * * individuals and public and private

nonprofit entities.” Id. (emphasis added). Thus, as a matter

of federal law, ACHS could not have even been a direct

recipient of the NIDA grant benefits. By relying on its own

generalized assumption about what federal agencies “would

naturally” intend their grant monies to do, instead of looking

17

to the scope of the grant statute, the First Circuit fundamen-

tally departed from Paralyzed Veterans. Its departure all but

ensures that “[t]he statutory ‘limitation’ on § [666]’s cover-

age would virtually disappear, a result Congress surely did

not intend.” Paralyzed Veterans, 477 U.S. at 609.

3. Paralyzed Veterans and NCAA involved civil antidis-

crimination statutes, not § 666, but the question of the reach

of federal jurisdiction is analytically the same. Both Section

504 in Paralyzed Veterans and Title IX in NCAA were

enacted pursuant to Congress’s Spending Clause power.

U.S. Const. art. I, § 8, cl. 1. So, too, was § 666. See Fischer,

529 U.S. at 689 n.3 (Thomas, J., dissenting). And all three

statutes employ nearly identical language in establishing their

respective federal-funding triggers. Compare 18 U.S.C.

§ 666(b) (applying to an organization that “receives * * *

benefits in excess of $10,000 under a Federal program

involving a grant, contract, subsidy, loan, guarantee, insur-

ance, or other form of Federal assistance’’), with 20 U.S.C.

§ 1681(a) (covering institutions “receiving Federal financial

assistance”), and 29 U.S.C. § 794 (same). See also United

States v. Rooney, 986 F.2d 31, 34 (2d Cir. 1993) (Section

666 “expressly equates ‘benefits’ with ‘Federal assis-

tance’ ”’). It therefore comes as no surprise that this Court

has used remarkably similar language in cautioning against

expansive interpretations of all three statutes. See Fischer,

529 U.S. at 681 (rejecting the government’s proffered

interpretation of the phrase “recipient of federal benefits”

because “(t]he statute does not employ this broad, almost

limitless use of the term’’); Paralyzed Veterans, 477 U.S. at

608 (rejecting plaintiffs’ proposed interpretation of the

phrase “receiving Federal financial assistance” because it

would lead to “almost limitless coverage’”’).

This interpretive symmetry makes sense. Indeed, it is

difficult to fathom why Congress, having used virtually

identical federal-funding triggers in the two statutory re-

gimes, would intend the criminal prohibitions it established

18

against theft and embezzlement in § 666 to have a dramati-

cally broader scope than the civil antidiscrimination statutes

at issue in Paralyzed Veterans and NCAA. That is particu-

larly true given the fact that—as we explain in greater detail

below—a “ ‘change in the sensitive relation between federal

and state criminal jurisdiction’ ” invariably occurs “[w]hen

Congress criminalizes conduct already denounced as criminal

by the States.” United States v. Lopez, 514 U.S. 549, 561 n.3

(1995) (quoting United States v. Enmons, 410 US. 396, 411-

412 (1973)). Under the First Circuit’s rule, ACHS is a

recipient of federal benefits for purposes of § 666. But under

Paralyzed Veterans, ACHS is most certainly not a recipient

of federal assistance for purposes of the Rehabilitation Act.

That discrepancy precipitates an irrational anomaly: a thief

who loots ACHS of $5,000 may be prosecuted in federal

court, but a disabled patient claiming discrimination would

have no federal forum. Congress surely never intended such

disparate results from statutory provisions with such similar

jurisdictional reach.

4. The result of the First Circuit’s unwarranted departure

from Fischer, Paralyzed Veterans, and NCAA is thus the very

vice this Court sought to avoid in those decisions: endowing

the statutory program with “broad, almost limitless” cover-

age. Fischer, 529 U.S. at 681; accord Paralyzed Veterans,

477 USS. at 608. On its face, the First Circuit’s logic would

extend § 666’s criminal reach to practically any organization

that receives payments from another entity that, in turn,

receives federal grant money or other assistance. If a

subcontractor like ACHS is deemed a recipient of federal

benefits simply because it is assumed that the federal gov-

ernment, in making its grant, “would naturally intend its

monies to assist”—and thus “benefit”—all those who end up

providing such services, then surely the vendors on whom

the subcontractor relies in providing those services would be

considered recipients of federal benefits, as well. That is

because “insur[ing] care of good quality[] in general commu-

19

nity facilities” necessarily requires that those who perform

the services use quality equipment. Thus if, for example, the

subcontract in this case had obligated ACHS to conduct HIV

blood tests, the syringe manufacturer paid by ACHS—from

funds it had received from the NIDA-Commonwealth-

Municipality disbursement chain—should be deemed a

recipient of federal benefits, since the federal government

surely would not want ACHS using defective syringes. And

if the syringe manufacturer then paid its plastics supplier

with the funds it received from ACHS, then that entity, too,

would fall within the scope of § 666. And so on and so on.

Under the First Circuit’s “for want of a nail” reasoning, every

act of theft, embezzlement, or fraud involving any of these

“recipients” would become a federal criminal offense, even

though Congress plainly never intended such a result.

B. The Federal Courts Of Appeals Are Di-

vided Over The Extent To Which § 666

May Federalize Otherwise Local Crimes Of

Theft And Embezzlement.

Not surprisingly, by misapplying this Court’s precedents,

the court below placed itself in conflict with its sister circuits

on the question presented. Moreover, by construing § 666 to

reach virtually any entity that receives payment from funds

originating in federal grant money, the First Circuit’s broad

ruling exacerbates an already entrenched circuit-split on the

broader question of the extent to which § 666 requires proof

of a jurisdictional nexus between the federal interest underly-

ing a disbursement of federal funds and the alleged acts of

theft. These conflicts provide an additional basis for granting

the petition. See S. Ct. Rule 10(a); Braxton v. United States,

500 U.S. 344, 347 (1991) (a “principal purpose for which we

use our certiorari jurisdiction * * * is to resolve conflicts

among the United States courts of appeals”).

1. The decision below directly conflicts with the Elev-

enth Circuit’s decision in United States v. Copeland, 143

20

F.3d 1439 (11th Cir. 1998). There, the court rejected the

government’s argument that a defense contractor is an

organization that receives federal benefits. Examining the

plain language of the statute, the Eleventh Circuit concluded

that “(t]he scope of § 666 * * * is not limitless; the statute

clearly indicates that only those contractual relationships

constituting some form of ‘Federal assistance’ fall within the

scope of the statute.” Jd. at 1441. The court confirmed this

circumscribed view of § 666 by resorting to the legislative

history:

[T]he concept [of receiving federal benefits] is not

unlimited. The term “Federal program” means that

there must exist a specific statutory scheme authoriz-

ing the Federal assistance in order to promote or

achieve certain policy objectives. Thus, not every

Federal contract or disbursement of funds would be

covered. [/d. at 1441-42 (quoting S. REP. No. 98-

225, at 370).]

The Eleventh Circuit therefore ruled, in direct conflict with

the First Circuit’s decision below, that “organizations en-

gaged in purely commercial transactions with the federal

government are not subject to § 666.” Jd. at 1441.

The First Circuit’s decision also conflicts with United

States v. Wyncoop, 11 F.3d 119 (9th Cir. 1993). The defen-

dant in Wyncoop was convicted under § 666 of embezzling

from a university that did not itself receive federal money but

nonetheless “benefit[ed] indirectly from the added pool of

students who otherwise would not be able to afford the

education,” but for federal assistance the students received in

the form of grants and guaranteed loans. Jd. at 121. The

Ninth Circuit reversed, ruling that the university was not a

recipient of federal benefits, since “Congress did not intend

*** to make misappropriations of money from every

organization that receives indirect benefits from a federal

program a federal crime.” Jd. (emphasis in original). Con-

_

21

trary to the pervasive role the court below envisioned for

federal prosecutors, the Ninth Circuit found “no indication in

the history of section 666 that Congress intended federal law

enforcement agencies to police the financial affairs of private

entities that do not administer federal funds.” /d. at 122.

It also comes as no surprise that the expansive view of

recipient status adopted by the First Circuit conflicts with

decisions of other federal appeals courts that have faithfully

applied Paralyzed Veterans. See, e.g., Grzan v. Charter

Hosp., 104 F.3d 116, 119-120 (7th Cir. 1997); Gallagher v.

Croghan Colonial Bank, 89 F.3d 275, 277-278 (6th Cir.

1996). In Gallagher, the Sixth Circuit held that a bank was

not covered by Section 504 of the Rehabilitation Act simply

because it made student loans that were subsidized and

guaranteed by the federal government. Articulating a rule

directly at odds with the approach taken by the court below,

the Sixth Circuit explained that federal jurisdiction “does not

follow federal aid past the intended recipient to those who

merely derive a benefit from the aid or receive compensation

for services rendered pursuant to a contractual arrange-

ment.” Id. at 278 (emphasis added) (quotation omitted).

Likewise, the Seventh Circuit in Grzan held that Section

504 of the Rehabilitation Act does not cover employees of a

recipient of federal aid, even though they receive payments—

in the form of wages—from a federal funding recipient.

Based on Paralyzed Veterans, the court concluded that

simply “benefiting from a federally financed program, even

where the benefits are financial, does not necessarily consti-

tute the receipt of federal funding.” 104 F.3d at 120.

2. By dramatically expanding the types of organizations

covered by § 666, the First Circuit’s decision opens the door

to countless federal prosecutions—based on the most attenu-

ated of federal connections—for what have traditionally been

local crimes of theft, embezzlement, and fraud. That sprawl-

ing view of federal criminal jurisdiction contributes to an

22

ever-widening division among the federal courts of appeals

on the broader question whether § 666 prosecutions violate

the Spending Clause in the absence of a sufficient nexus

between the allegedly corrupt transaction and the federal

interest underlying the expenditure of funds.°®

The Second and Third Circuits have held that such a nexus

is a jurisdictional prerequisite under the Spending Clause,

lest the general police power of the States be displaced by

federal criminal law. See United States v. Santopietro, 166

F.3d 88, 93 (2d Cir..1999); United States v. Zwick, 199 F.3d

672, 687 (3d Cir. 1999).7 In Santopietro, the Second Circuit

held that § 666 “requires at least some connection between

the [fraudulent conduct] and a risk to the integrity of the

federal funded program.” 166 F.3d at 93. Thus, the court

explained, § 666 could not be used to prosecute a “bribe paid

to a city’s meat inspector in connection with a substantial

transaction just because the city’s parks department had

received a federal grant of $10,000.” Jd. The Third Circuit

adopted the same view as the Second, reasoning that “(t]he

goal [of § 666] was to overcome impediments to reaching

actions in which there was a federal interest, not to federalize

crimes in which a federal interest was lacking.” Zwick, 199

F.3d at 684.

6 The confusion is due in part to the question this Court left open

in Salinas v. United States, 522 U.S. 52, 59 (1997), in which it

noted that “[w]e need not consider whether the statute requires

some other kind of connection between a bribe and the expenditure

of federal funds, for in this case * * * t(he] relationship is close

enough to satisfy whatever connection the statute might require.”

7 Justices Scalia and Thomas have indicated that, for § 666

prosecutions, such a nexus, “or some similar jurisdictional provi-

sion, is constitutionally required” because, under the Spending

Clause, “the exercise of federal power [must] be related ‘to the

federal interest in particular national projects or programs.

Fischer, 529 U.S. at 689 n.3 (Thomas, J., dissenting) (quoting

South Dakota v. Dole, 483 U.S. 203, 207 (1987)).

23

The Sixth and Seventh Circuits, on the other hand, have

read § 666 to impose no obligation on the government to

demonstrate a federal interest in the charged conduct. See

United States v. Fernandez, 282 F.3d 500 (7th Cir. 2002),

pet. for cert. filed, 71 U.S.L.W. 3138 (Aug. 2, 2002) (No. 02-

209); United States v. Suarez, 263 F.3d 468 (6th Cir. 2001),

cert. denied, 122 S. Ct. 1547 (2002). In Fernandez, the

Seventh Circuit reaffirmed its rule that no nexus is needed,

since “money is fungible and its effect transcends program

boundaries.” 282 F.3d at 511 (quoting United States v.

Grossi, 143 F.3d 348, 350 (7th Cir.), cert. denied, 525 U.S.

879 (1998)). So long as the defrauded organization received

more than $10,000 in federal benefits, the government is

under no duty to “further establish a link between the defen-

dants’ fraud and a federal interest.” Jd. And in Suarez, a

divided panel of the Sixth Circuit reached the same conclu-

sion, 263 F.3d at 489-490, rejecting Judge Boggs’s objection

in dissent that, after this Court’s decision in Fischer, “‘it is no

longer tenable to hold to the proposition that no connection

whatsoever need exist between the federally punished

criminal conduct and the federal interest in the programs

supported by the funds used to satisfy § 666(b).” Jd. at 486-

487 (Boggs, J., dissenting).®

8 Underscoring the confusion and conflict over § 666’s scope,

inconsistent decisions from the Fifth Circuit have generated an

apparent intra-circuit split. Compare United States v. Reyes, 239

F.3d 722, 735 (Sth Cir.) (rejecting argument that § 666 requires the

government to “tie the federal monies to the specific project

involved in the illegal activity”), cert. denied, 122 S. Ct. 156

(2001), with United States v. Phillips, 219 F.3d 404, 413-414 (Sth

Cir. 2000) (“there must be some nexus between the criminal

conduct and the agency receiving federal assistance”) (quotation

omitted). Most recently, a panel of the Fifth Circuit issued three

separate opinions on the issue, none of which commanded a

majority. See United States v. Lipscomb, 299 F.3d 303, 305 (Sth

Cir. 2002). Judge Smith argued that a federal nexus is constitu-

tionally essential, id. at 374-377, Judge Wiener argued it is not, id.

24

The decision below exacerbates this split in the circuits.

Like the Sixth and Seventh Circuits, the First Circuit’s rule

legitimates countless federal prosecutions with only the

slightest—if any—showing of an actual federal interest in the

charged conduct. In this case, the NIDA grant was awarded

to address problems of drug addiction, not to police the

relationship between closely-held corporations and their

shareholder-directors. That grant, moreover, wound its way

through several different intermediaries before a fraction of it

was finally paid to ACHS as reimbursement for subcontract

services rendered. Certainly there is a federal interest in

ensuring that the federal funds are used for the purposes

intended, but that interest cannot meaningfully be said to

carry beyond a grant recipient (or, here, sub-recipient) to

what happens to money after it has been paid to a contractor

for services rendered. There is no more of a federal interest

in prosecuting Dr. Garib for adding his housekeeper to the

ACHS payroll than there is in punishing someone for

“brib[ing] * * * a city’s meat inspector * * * just because the

city’s parks department had received a federal grant of

$10,000.” Santopietro, 166 F.3d at 93.

The First Circuit’s rule thus does exactly what the Third

Circuit in Zwick criticized as the most “troubling” conse-

quence of interpreting § 666 not to require a federal connec-

tion to the charged conduct: “it broadens the range of

activity criminalized by the statute and alters the existing

balance of federal and state powers by encompassing acts

already addressed under state law in which the federal

government may have little interest.” 199 F.3d at 682-683.

Certiorari is warranted to resolve this conflict over the limits

of the federal government’s authority to criminalize conduct

pursuant to the Spending Clause.

at 311-316, and Judge Duhe refused to reach the issue on proce-

dural grounds, id. at 349-360.

25

c. The Question Presented Is Important And

Recurring And Should Be Decided By This

Court.

The multiple conflicts presented by this petition provide a

compelling basis for plenary review, but the need for certio-

rari is heightened still further by the important and recurring

nature of question presented: whether a private organization

that does not itself receive benefits under a federal program is

nonetheless covered by § 666 because it receives payments

from an entity that does. That question is exceptionally

important because, as this Court recognized in Fischer,

promiscuous application of § 666 would “turn almost every

act of fraud or bribery into a federal offense, [thereby]

upsetting the proper federal balance.” 529 U.S. at 681. And

that balance is never more delicate than when federal law

threatens to displace state criminal law:

Under our federal system, the States possess primary

authority for defining and enforcing the criminal law.

*** When Congress criminalizes conduct already

denounced as criminal by the States, it effects a change

in the sensitive relation between federal and state

criminal jurisdiction. [United States v. Lopez, 514 U.S.

at 561 n.3 (quotations omitted). ]

See also Screws v. United States, 325 U.S. 91, 109 (1945)

(plurality opinion) (“Our national government is one of

delegated powers alone. Under our federal~system the

administration of criminal justice rests with the States except

as Congress, acting within the scope of those delegated

powers, has created offenses against the United States.”’).

The First Circuit’s boundless interpretation of § 666’s

recipient-of-federal-benefits “limitation” improperly skews

that balance. Congress never intended § 666 to operate as a

general anti-corruption statute encompassing every act of

theft against every entity paid with funds originating in a

federal disbursement. To the contrary, Congress enacted

26

§ 666 in 1984 to shore up then-existing federal statutes aimed

at protecting federal funds. See generally Brown, supra, at

247-249. Before then, the federal government could not

prosecute the theft of money disbursed under federal grants if

title to the funds had either passed to another entity or had

become so commingled with other assets that the “Federal

character” of the funds could not be shown. S. REP. No. 98-

225, at 369-370. Thus § 666 was enacted to fill gaps in the

prosecution of “significant acts of theft, fraud, and bribery

involving Federal monies.” Id. at 369 (emphasis added).

The First Circuit’s interpretation of § 666, however, legiti-

mates an entire species of prosecutions that goes well beyond

anything Congress envisioned. The court's decision easily

converts into federal crimes countless cases of relatively

petty theft from organizations boasting only the most attenu-

ated connection to the federal government. By ruling that an

organization becomes a “recipient” of federal “benefits”

anytime it contracts to provide a service that relates in some

way to a distant federal grant—and is then paid with funds

originating somewhere down a chain of connections in that

grant—the Court of Appeals threatens to extend the reach of

§ 666 beyond any logical stopping point.

That is particularly worrisome because, even before the

First Circuit’s decision in this case, prosecutions under § 666

had been growing exponentially. From its enactment in 1984

to 1990, the statute generated only 16 reported cases. See

Brown, supra, at 249 & n.11. But from 1991 to 1996,

reported prosecutions—which represent just a handful of

actual prosecutions—leaped to more than 60. Id. And there

is little reason to believe the federal government has shied

away from § 666 prosecutions. Indeed, the significant

volume of federal appellate decisions during the last few

years addressing the statute’s troubling scope is compelling

evidence of the recurring and important nature of the ques-

tion presented by this case.

27

If. The Court Should Grant The Petition To Decide

Whether, In Puerto Rico, Systematically Exclud-

ing Potential Jurors Based On Their Lack Of Eng-

lish Proficiency Violates The Sixth Amendment.

In Taylor v. Louisiana, 419 U.S. at 528, this Court held

that “the selection of a petit jury from a representative cross

section of the community is an essential component of the

Sixth Amendment right to a jury trial.” In the federal courts

of Puerto Rico, however, that constitutional guarantee is

illusory. That is because federal law provides that a person

otherwise qualified to sit on a petit jury nonetheless “shall”

be excluded if he or she “is unable to read, write, and under-

stand the English language with a degree of proficiency

sufficient to fill out satisfactorily the juror qualification

form.” 28 U.S.C. § 1865(b)(2); see id. § 1865(b)(3) (juror

must be excluded if “unable to speak the English language”).

Whatever its merits elsewhere, in Puerto Rico this policy

systematically excludes, as the evidence before the District

Court demonstrated, a majority of the jury-eligible popula-

tion—and an even greater percentage of the poor.

The English-proficiency exclusion, as applied to criminal

trials in Puerto Rico, cannot be reconciled with this Court’s

decisions. Under the regime invalidated in ZJaylor, women

could not serve on junes unless they filed declarations

indicating their willingness to do so. As a result, although

53% of the eligible jury pool were women, less then 1% of

those called to serve were. Striking down that system on

Sixth Amendment grounds, this Court held that “jury wheels,

pools of names, panels, or venires from which juries are

drawn must not systematically exclude distinctive groups in

the community and thereby fail to be reasonably representa-

tive thereof.” Taylor, 419 U.S. at 538.

In Duren v. Missouri, 439 U.S. 357 (1979), this Court

reaffirmed Taylor and, in doing so, articulated a three-prong

28

test for determining whether a given policy unconstitution-

ally deprives a criminal defendant of a representative jury:

(1) that the group alleged to be excluded is a “distinc-

tive” group in the community; (2) that the representa-

tion of this group in venires from which juries are se-

lected is not fair and reasonable in relation to the

number of such persons in the community; and (3)

that this underrepresentation is due to systematic ex-

clusion of the group in the jury-selection process. (Td.

at 364.]

The First Circuit’s decision upholding the federal English-

proficiency exclusion clearly conflicts with this formula.

As for the first prong, it is beyond dispute that, in Puerto

Rico, Spanish speakers “are sufficiently numerous and

distinct from” English speakers so that “if they are systemati-

cally eliminated from jury panels, the Sixth Amendment’s

fair-cross-section requirement cannot be satisfied.” Td.

(quoting Taylor, 419 U.S. at 531). As the evidence presented

below indicated, exclusively Spanish speakers constitute a

majority of the Puerto Rican population. And there is no

doubt that they are sufficiently “distinct” from their English-

speaking counterparts.

Nor can there be any question that the current levels of

representation of exclusive Spanish speakers “in venires from

which juries are selected is not fair and reasonable in relation

to the number of such persons in the community.” After all,

they have no representation. This despite the fact that

Spanish is, along with English, an official language of the

Commonwealth. See Igartua de la Rosa v. United States,

107 F. Supp. 2d 140, 146 (D.P.R. 2000). To exclude whole-

sale a majority of the Puerto Rican population from criminal

juries is anything but fair and reasonable.

Finally, the English-proficiency policy clearly establishes a

systematic exclusion. The systems this Court struck down in

29

Taylor and Duren at least made it possible for the excluded

constituency to opt in and be selected for a jury. Those who

lack English proficiency in Puerto Rico do not have even

that. The policy is absolute and the exclusion is necessarily

systematic.

In upholding the exclusionary policy below, the First Cir-

cuit relied on its prior precedents finding “that it is ‘the

overwhelming national interest served by the use of English

in a United States court,’ which ‘justifies conducting pro-

ceedings in the District of Puerto Rico in English and requir-

ing jurors to be proficient in that language.’” App. 26a

(quoting United States v. Flores-Rivera, 56 F.3d at 326).

Whatever vague “national interest” the English-proficiency

policy furthers, it cannot outweigh a defendant’s constitu-

tional right to be tried by a jury representing a fair cross-

section of the community. In addition, whatever pragmatic

considerations might be advanced in favor of the exclusion,

experiences involving deaf jurors in the federal courts reveal

that simultaneous-translation capabilities render those

concerns more imagined than real.

Since the enactment of the Rehabilitation Act and the

Americans with Disabilities Act, 42 U.S.C. § 12101, courts

have increasingly permitted deaf persons to serve on juries.

See, e.g., Galloway v. Superior Court of the District of

Columbia, 816 F. Supp. 12, 20 (D.D.C. 1993); DeLong v.

Brumbaugh, 703 F. Supp. 399, 401-402 (W.D. Pa. 1989).

Other federal courts, independent of these antidiscrimination

statutes, have as well. See, e.g., United States v. Dempsey,

830 F.2d 1084, 1090 (10th Cir. 1987). And despite claims

that doing so would be impractical, the courts have dis-

agreed. As the Tenth Circuit explained, “the use of an

interpreter at trial was an acceptable means to accommodate

[the juror’s] hearing loss,” since “[t]he propriety of using

interpreters for both deaf defendants and deaf witnesses is

well settled.” Jd. at 1088. Indeed, the Federal Rules of

Criminal and Civil Procedure, the Federal Rules of Evidence,

30

and the Judicial Code all recognize the propriety—and

usefulness—of providing interpreters for the hearing im-

paired. See FED. R. CRIM. P. 28; FED. R. CIV. P. 43(f); FED.

R. Evip. 604; 28 U.S.C. § 1827. Given the success and

experience courts have had with providing interpreters for

deaf jurors, there is no reasonable objection to providing

English-language interpreters for the vast majority of Puerto

Ricans who cannot speak the language.?

CONCLUSION

For the foregoing reasons, the petition for a writ of certio-

rari should be granted.

Respectfully submitted,

HOWARD M. SREBNICK JOHN G. ROBERTS, JR.*

BLACK, SREBNICK CHRISTOPHER T. HANDMAN

& KORNSPAN, P.A. HOGAN & HARTSON L.L.P.

201 South Biscayne Boulevard 555 Thirteenth Street, N.W.

Suite 1300 Washington, D.C. 20004

Miami, Florida 33131 (202) 637-5810

(305) 371-6421

SCOTT A. SREBNICK

2400 South Dixie Highway

Suite 200

Miami, Florida 33133

(305) 285-9019

*Counsel of Record Counsel for Petitioner

9 Dr. Garib also adopts the arguments made in the petition for

certiorari filed by his codefendant below, Luis Dubon Otero.

APPENDICES

at itt aS Sh ace 9 Orit bat ey SNMP

la

APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT

Nos. 00-2029, 00-2030

UNITED STATES,

Appellee,

V.

Luis E. DUBON-OTERO,

Defendant-Appellant.

UNITED STATES,

Appellee,

Vv.

JORGE L. GARIB-BAZAIN,

Defendant-Appellant.

Heard July 31, 2001

Decided May 29, 2002

Before SELYA, Circuit Judge, JOHN R. GIBSON,”* Senior

Circuit Judge, and LIPEZ, Circuit Judge.

* Of the Eighth Circuit, sitting by designation.

2a

OPINION

JOHN R. GIBSON, Senior Circuit Judge.

Luis Dub6n-Otero and Jorge L. Garib-Bazain appeal from

their convictions, after a joint trial, for conspiring to steal

property worth more than $5,000 from an organization

receiving more than $10,000 in federal benefits in any one-

year period. See 18 U.S.C. §§ 371, 666(a)(1)(A) and

(2) (1994). They argue that there was a constructive amend-

ment of the indictment, that there was insufficient evidence

to convict them, and that the jury instructions were defective.

They also challenge the makeup of their jury and the ap-

pointment of the United States Attorney. Garib also appeals

his conviction for making false declarations before a grand

jury in violation of 18 U.S.C. § 1623 (1994). We affirm.

Advanced Community Health Services (Health Services)

was incorporated in the Commonwealth of Puerto Rico in

1987 as a for-profit corporation.! Dubdn, a lawyer, and

Garib, a doctor, were shareholders and directors. Dubon

served as legal advisor to Health Services and Garib as the

Medical Director of Patient Services. Dr. Yamil Kouri-Perez

was a consultant from the Harvard Institute for International

Development who, together with Jeanette Sotomayor-

Vazquez, the administrative director, and Angel Luis Cor-

cino-Mauras, the comptroller, conducted the day-to-day

operations of Health Services.

Dubon and Garib were charged with conspiring to use

Health Services funds to pay personal expenses and make

political payoffs. The principal witness at trial was Corcino,

whose testimony painted a picture of Kouri as the primary

conspirator. -Kouri and Sotomayor were indicted along with

Dubén and Garib, but tried separately. They were convicted,

and we affirmed in United States v. Sotomayor-Vazquez, 249

F.3d 1 (1st Cir.2001).

In January 1988, Health Services contracted with the Mu-

nicipality of San Juan to provide services for AIDS patients.

! Health Services later became a non-profit corporation.

s

*

=

;

t.

3a

The initial contract provided that the Municipality would pay

Health Services a flat fee of $3.2 million per year for these

services. Because under the contract Health Services became

“the exclusive source of AIDS counseling and professional

services in San Juan,” United States v. Dubon-Otero, No. 97-

091, slip op. at 10 (D.P.R. March 3, 2000), federal monies

began to find their way to Health Services.

The Government introduced evidence regarding the pay-

ment of these federal monies to Health Services, and the

ways in which Dub6n and Garib diverted these funds. This

evidence will be discussed in greater detail below, as we

discuss the various arguments made by Dubén and Garib on

appeal.

I.

Dubon and Garib argue that the district court erred by

allowing a constructive amendment of the indictment.

Specifically, they complain the court admitted evidence that

the funds the defendants had stolen were federal or public

funds, which may have been entrusted to Health Services but

never lost their federal or public character. Appellants argue

admission of this evidence constituted a constructive

amendment of the indictment. They construe the indictment

as limiting the charge against them to conspiring to steal only

Health Services funds.

A constructive amendment occurs when the charging

terms of the indictment are altered, either literally or in

effect, by prosecution or court after the grand jury has

last passed upon them. An amendment of the indictment

is considered prejudicial per se and grounds for reversal

of a conviction whether it is brought about by a literal

alteration of the words of the indictment, a jury instruc-

tion which modifies the offense charged in the indict-

ment, or the admission of evidence of an offense not

charged by the grand jury.

4a

United States v. Dunn, 758 F.2d 30, 35 (Ist Cir. 1985)

(internal quotation marks and citations omitted).?

The charging paragraph of the indictment alleged that

Dubén and Garib, “as agents of an organization which

received benefits in excess of $10,000.00 under a Federal

program involving a grant, or other form of Federal assis-

tance,” conspired with others to “embezzle, steal, and obtain

by fraud, and without authority knowingly convert to the use

of a person not the rightful owner, and intentionally misapply

property worth at least $5,000.00 owned by such organiza-

tion, that is, monies in excess of $2,000,000.00 in program

funds.”” (Emphasis added.) (Paragraph Thirty-Seven of the

indictment read: “the defendants embezzled, stole and

obtained by fraud, in excess of $2,000,000.00 of public

funds.” (Emphasis added.)) The indictment incorporated

Counts Two through Thirty-Four as overt acts, which further

described the funds in question as “owned by or under the

care, custody, and control of [Health Services}.” (Emphasis

added.). Under Count I, the indictment charged Dubon and

Garib generally with conspiracy to violate § 666. Sec-

tion 666 seeks, among other things, to punish any agent of an

organization receiving more than $10,000 in federal benefits

in any one-year period, who “embezzles, steals, obtains by

fraud, or otherwise without authority knowingly converts to

the use of any person other than the rightful owner or inten-

tionally misapplies property that—{i) is valued at $5,000 or

more, and (ii) is owned by, or is under the care, custody, or

control of such organization.” 18 U.S.C. § 666(a)(1)(A)

(emphasis added).3 While the elements of the charged crime

2 Because our ultimate conclusion is that there was no construc-

tive amendment in this case, we need not address the Govern-

ment’s argument that the rule of per se reversal of cases where

there has been a constructive amendment has been modified by the

Supreme Court’s recent decision in Neder v. United States, 527

U.S. 1 (1999) (holding that failure to instruct jury on element of

crime is subject to harmless error review).

3 The statute provides in relevant part:

(a) Whoever, if the circumstances described in subsection (b) of

this section exists—

Sa

have to “appear primarily from the language in the indict-

ment . . . common sense suggests that such a citation should

not be entirely ignored where, as here, it so plainly reinforces

what is implicit in the text.” United States v. McLennan,

672 F.2d 239, 243-44 (1st Cir. 1982).

Dubon and Garib cite United States v. Pheaster, 544 F.2d

353 (9th Cir. 1976), for the proposition that overt acts cannot

supply an element missing from the charging paragraph. See

(1) being an agent of an organization, or of a State, local, or

Indian tribal government, or agency thereof—

(A) embezzles, steals, obtains by fraud, or otherwise without

authority knowingly converts to the use of any person other than

the rightful owner or intentionally misapplies, property that—

(i) is valued at $5,000 or more, and

(ii) is owned by, or is under the care, custody, or control of such

organization, government, or agency;

~

shall be fined under this title, imprisoned not more than 10 years,

or both.

(b) The circumstance referred to in subsection (a) of this section

is that the organization, government, or agency receives, in any

one year period, benefits in excess of $10,000 under a Federal

program involving a grant, contract, subsidy, loan, guarantee,

insurance, or other form of Federal assistance.

(c) This section does not apply to bona fide salary, wages, fees,

or other compensation paid, or expenses paid or reimbursed, in the

usual course of business.

(d) As used in this section—

(5) the term “in any one-year period” means a continuous period

that commences no earlier than twelve months before the commis-

sion of the offense or that ends no later than twelve months after

the commission of the offense. Such period may include time both

before and after the commission of the offense.

18 U.S.C. § 666.

6a

id. at 361 (“[A] conspiracy indictment’s specification of

overt acts cannot be used to supply the allegation of a critical

element completely missing from the charging language.”).

However, Pheaster itself recognized that “reference to the

overt acts is appropriate to confirm an otherwise common-

sense interpretation of an allegation which is included in the

charging language,” id. at 362, and thus is of no help to

Appellants.

A primary objective of the rule against constructive

amendment of indictments is to ensure defendants have

notice of the charges they must defend against. United States

v. Kelly, 722 F.2d 873, 876 (1st Cir. 1983); cf. United-States

vy. Delano, 55 F.3d 720, 729 (2d Cir. 1995) (“[W]e have

consistently permitted significant flexibility in proof, pro-

vided that the defendant was given notice....”). The

indictment here put Appellants on notice that they would

have to defend against exactly the type of evidence of

entrustment of which they now complain. If Dubén and

Garib chose not to defend against that type of evidence, that

choice does not make the district court’s permitting the

Government to go forward with such evidence a constructive

amendment.

Il.

The indictment in this case charged a conspiracy covering

the years 1989 to 1994. Dubén and Garib argue the district

court erred by refusing to acquit them following trial because

the Government failed to prove Health Services received any

federal benefits before 1991. They contend that amounts

received in 1989 were commercial payments, not federal

benefits, and thus their convictions could not be predicated

on pre-1991 conduct.4 Since there would be no way of

assuring the jury did not rely on pre-1991 conduct in reach-

ing its conclusion, the conviction could then not stand. See

Yates v. United States, 354 U.S. 298, 312 (1957) (“[Wle

think the proper rule to be applied is that which requires a

4 As we explain below, federal monies are not synonymous with

federal benefits for purposes of a conviction under § 666.

7a

verdict to be set aside in cases where the verdict is support-

able on one ground, but not another, and it is impossible to

tell which ground the jury selected.”). The Government, on

the other hand, argues it proved Health Services received

federal benefits beginning in January 1989. In the alterna-

tive, the Government argues the Supreme Court’s decision in

Neder v. United States, 527 U.S. 1 (1999), modified Yates to

allow harmless error review, and the error here was indeed

harmless.°®

We review a denial of a Rule 29 motion for acquittal de

novo. United States v. Czubinski, 106 F.3d 1069, 1073 (Ist

Cir. 1997). We also review de novo the question of what

type of transactions constitute benefits under § 666. See

United States v. Peery, 977 F.2d 1230, 1233 n. 2 (8th Cir.

1992) (“[D]etermining whether section 666 applies to

Peery’s conduct is a question of law.”). Finally, we review

de novo the question of whether the Government presented

sufficient evidence at trial to prove Health Services in fact

received benefits under § 666, viewing the evidence in the

light most favorable to the Government. See United States v.

Otero-Mendez, 273 F.3d 46, 50 (1st Cir. 2001); United States

v. Fischer, 168 F.3d 1273, 1276 n. 7 (11th Cir. 1999), aff'd

Fischer v. United States, 529 U.S. 667 (2000); United States

v. Copeland, 143 F.3d 1439, 1442 (11th Cir. 1998).

Appellants concede Health Services received federal bene-

fits beginning in 1991. The question we must answer is

whether Health Services’ receipt of federal monies between

1989 and 1991 constituted receipt of federal benefits. Three

distinct transactions are at issue. First, on January 13, 1989,

Health Services deposited two checks totaling $11,862.14

from the Centers for Disease Control, a federal agency. The

Centers for Disease Control had contracted with the Munici-

pality to test members of the public for AIDS, and the

Municipality subcontracted the work to Health Services.

Health Services was paid directly by the Centers for Disease

Control. There was evidence Health Services received

5 As in Part I above, our ultimate conclusion here precludes our

having to address the Government’s alternative Neder argument.

8a

another $11,124.03 from the Centers for Disease Control in

August 1989 for similar work. Second, Health Services

received $70,680 in 1989, and $99,729 in 1990, to operate an

assessment and intervention center for drug addicts. This

money came from the Municipality. The Municipality in

turn had received it from the Commonwealth, which had

received it as a grant from the National Institute on Drug

Abuse (the Institute), a federal agency. Third, on January 10,

1989, Health Services received $100,000 for work on a mass-

media education project on AIDS. Although this money was

paid by the Municipality, there was testimony from a mu-

nicipal official that this payment had its source in federal

funds, which passed through the Puerto Rico Department of

Health to the Municipality.

The Supreme Court recently addressed the issue of what

constitutes receipt of benefits under § 666 in Fischer v.

United States, 529 U.S. 667 (2000).° In that case, the Court

concluded that § 666 “covers fraud perpetrated on organiza-

tions participating in the Medicare program.” Jd. at 669. The

Court reached this conclusion because the “nature and

purposes of the Medicare program,” id. at 671, indicated

payments were made “for significant and substantial

reasons in addition to compensation or reimbursement,”

such as assisting “the hospital in making available and

maintaining a certain level and quality of medical care, all

in the interest of both the hospital and the greater commu-

nity,” id. at 679-80. The Court stated that the term “bene-

fits” is used in the statute in its ordinary sense, id. at 677,

and since the hospitals themselves derive significant

advantage from participating in Medicare, they could be

said to be deriving benefits within the meaning of § 666,

“a statute we have described as ‘expansive,’ ‘both as to the

[conduct] forbidden and the activities covered,’ ” id. at 678

6 Fischer was decided after the convictions in this case. None-

theless, it applies on direct appeal. See United States v. Ochs, 842

F.2d 515, 519 (Ist Cir. 1988) (“[I]n our direct review of the

convictions entered below, we are bound by McNally [v. United

States, 483 U.S. 350 (1987)], even though it was decided after

the completion of proceedings in the district court.”).

9a

(quoting Salinas v. United States, 522 U.S. 52, 56 (1997)).

The Court saw this conclusion as consistent with the

language of the statute, which “indicates that Congress

viewed many federal assistance programs as providing

benefits to participating organizations,” as_well as “Con-

gress’ expansive, unambiguous intent to ensure the integ-

rity of organizations participating in federal assistance

programs.” Jd. at 678. The Court set out the following

test:

To determine whether an organization participating in a

federal assistance program receives “benefits,” an exami-

nation must be undertaken of the program’s structure,

operation, and purpose. The inquiry should examine the

conditions under which the organization receives the fed-

eral payments. The answer could depend, as it does here,

on whether the recipient’s own operations are one of the

reasons for maintaining the program.

Id. at 681.

The Court rejected the notion that Medicare payments

made to the hospitals were compensation of the type

excluded by § 666(c).’ In addition to the fact that monies

paid included sums to enhance the hospitals themselves,

Medicare placed conditions on recipient hospitals, “unlike

the case of a contractor whom the Government does not

regulate or assist for long-term objectives or for significant

purposes beyond performance of an immediate transac-

tion.” Jd. at 680.8 The Court also rejected the contention

7 Subsection (c) states: “This section does not apply to bona

fide salary, wages, fees, or other compensation paid, or ex-

penses paid or reimbursed, in the usual course of business.”

8 A number of cases from other circuits, which preceded

Fischer, also support the proposition that, while purely commer-

cial payments made by the government “as a commercial entity,

such as payments for supplies or equipment,” do not constitute

benefits under § 666, the mere presence of quid pro quo does

not preclude a finding of federal benefits. United States v.

Rooney, 986 F.2d 31, 33-34 (2d Cir. 1993) (holding that loan

proceeds received from the Farmers Home Administration

constituted benefits); see United States v. Copeland, 143 F.3d

10a

that since the primary beneficiary of Medicare was the

individual patient, the hospitals could not also be said to

have received a benefit under the program. /d. at 677.

Finally, the Court refused to endorse the notion that all

that was required for funds to constitute benefits under

§ 666 was to establish that they came from a federal

program. /d.

When we apply Fischer to this case, we conclude, and

the jury supportably could have so found, that the Institute

payments that Health Services received constituted bene-

fits.° The Institute! monies in this case were originally

disbursed under a grant to the Puerto Rico Department of

Anti-Addiction Services. Anti-Addiction Services in turn

made a grant of a portion of these funds to the Municipality,

which then paid Health Services. Dubén acknowledges this

1439, 1441 (11th Cir. 1998) (holding that money paid to

Lockheed Aeronautical Systems Company as the prime contrac-

tor for the Department of Defense did not constitute benefits

under § 666); United States v. Marmolejo, 89 F .3d 1185, 1189-91

(Sth Cir. 1996) (holding that funds provided to a county jail, in

exchange for the jail housing federal prisoners, constituted

benefits), aff'd sub nom. Salinas v. United States, §22 U.S. 52

(1997). Those cases distinguish purely commercial transactions

from “monies distributed through ‘Federal programs,’ for which

there is ‘a specific statutory scheme authorizing the Federal

assistance in order to promote or achieve certain policy objec-

tives.” ” Rooney, 986 F.2d at 35 (quoting S. Rep. No. 98-225, at

369 (1984), reprinted in 1984 U.S.C.C.A.N. 3182, 3510); see

Copeland, 143 F.3d at 1441-42; Marmolejo, 89 F.3d at 1190.

9 We thus need not decide the character of the Centers for

Disease Control or mass-media education project payments.

10 The National Institute on Drug Abuse “supports over 85

percent of the world’s research on the health aspects of drug abuse

and addiction.” National Institute on Drug Abuse, Welcome to the

NIDA Website, at http: //www.drugabuse.gov/NIDA Welcome. html

(last visited May 17, 2002). Part of its mission “is to ensure the

rapid and effective dissemination and use of the results of that

research to significantly improve drug abuse and addiction

prevention, treatment, and policy.” /d. Distribution of funds is

authorized under 21 U.S.C. § 1177 (1994).

lla

money was “clearly a grant intended to assist AIDS patients

in Puerto Rico,” and “may also have been intended to assist

the Commonwealth or the Municipality in that it enabled

these government entities to assist citizens with drug

addictions.” Dubén questions, however, “whether the

program under which this money was paid was intended to

aid or promote the well being of [Health Services].” We

point out that the Supreme Court in Fischer only said that

“(t]he answer [to the question of whether there are federal

benefits under § 666] could depend... on whether the

recipient’s own operations are one of the reasons for main-

taining the program .... Other cases may present questions

requiring further examination and elaboration of the term

‘benefits.’ ”’ 529 U.S. at 681-82 (emphasis added).

One of the Institute’s goals in making grants is to “insure

care of good quality, in general community facilities.” 21

U.S.C. § 1177(f).!! Under its contract with the Municipal-

'! Congress has authorized the Secretary of Health and Human

Services, “acting through the National Institute on Drug Abuse,”

to make grants and “enter into contracts with individuals and

public and private nonprofit entities” in order to provide “educa-

tional programs, technical assistance for the development,

demonstration, and evaluation of drug abuse prevention, treat-

ment, and rehabilitation programs,” and in so doing to “accord a

high priority to applications for grants or contracts for primary

prevention programs.” 21 U.S.C. § 1177(a). The Secretary is to

“require coordination of all applications for programs.”

§ 1177(c). Projects and programs for prevention and treatment

services are subject to specific requirements. _They should,

“whenever possible, be community based, insure care of good

quality in general community care facilities . .. and be integrated

with, and provide for the active participation of, a wide range of

public and nongovernmental agencies, organizations, institutions,

and individuals.” § 1177(f). “[{W]here a substantial number of

the individuals in the population served by the project or program

are of limited English-speaking ability[, they should]... utilize

... Outreach workers fluent in the language spoken,” and “iden-

tify an individual who is fluent both in that language and Eng-

lish” to provide guidance to individuals of limited English-

speaking ability. /d.

12a

ity, Health Services was “the exclusive source of AIDS

counseling and professional services in San Juan...

supplying AIDS services under a federally financed pro-

gram.” Dubén-Otero, No. 97-091, slip op. at 10.'2. There-

fore, the Institute would naturally intend its monies to assist

Health Services in providing AIDS care, much as Medicare

monies assist hospitals in providing patient care.

It makes no difference that Health Services received this

money indirectly. It is now well established that benefits

under § 666 are not limited solely to primary target recipi-

ents or beneficiaries. See Fischer, 168 F.3d at 1278 (“[T]he

plain language of § 666(b) does not distinguish between an

organization... that receives ‘benefits’ directly under a

federal program and an organization . .. that receives “bene-

fits’ as an assignee under a federal program.”); cf. Fischer,

529 U.S. at 677-78 (“Medicare operates with a purpose and

design above and beyond point-of-sale patient care.”).

Health Services’ contract with the Municipality contemplated

a relationship between Health Services and the United States

Government, and those operating federal assistance programs

like the Institute are well aware that recipients of program

funds use subgrants and subcontracts to further effectuate the

12 The contract with the Municipality provides in pertinent part

that:

The Municipality must hire the services of a company

with personnel that has the experience and professional

knowledge necessary to design, establish, direct and manage

the AIDS program of San Juan.... [Health Services] will

utilize the equipment located at the facilities provided by the

Municipality .... Epidemiological services will be pro-

vided in order to establish a state of alertness of the disease

as well as counseling and treatment to the patients. The epi-

demiological activities shall be coordinated with the respec-

tive state and federal authorities .... [Health Services] will

establish an educational program for the community in order

to create public conscience especially to high risk

groups.... The population at large will be educated re-

garding prevention of AIDS and the different methods of

transmission.

13a

program’s goals. Lawrence Poole, a grants manager for the

United States Department of Health and Human Services,!3

testified that “a grant award [that] is issued by an agency

could and does in fact translate into subcontracts or subgran-

tee relationships with other organizations.” Poole further

testified that Health Services received federal funding as a

subgrantee for the years of 1988 and 1989, and that “the

requirements for each subgrantee or subcontract relationship

are subject to the same requirements for accountability of

federal funds and terms of the award as the actual grantee

recipient of federal funds.” We conclude that if the payments

in Fischer were “made not simply to reimburse,” 529 U.S. at

679, then neither were the payments here.

III.

Dub6n and Garib argue that the district court erred in deny-

ing their motions for acquittal for insufficient evidence.

Pointing to the fact that the indictment charged them with

conspiring to steal from Health Services, they assert the

Government did not prove the crucial element of lack of

consent of the corporation. They cite United States v.

Burbank for the proposition that there can be no theft where

“{njo evidence [is] presented by the government to show that

the transactions were not authorized by the corporation.” 848

F.2d 453, 454 (4th Cir. 1988).'4 They contend Health

13 The Department of Health and Human Services encompasses

the National Institute on Drug Abuse. Mr. Poole described his

duties as administering individual discretionary grant programs

geared primarily toward provision of health care in United States

territories. He had been with Health and Human Services ap-

proximately thirty years and was very familiar with their federal

grant programs.

14 Because we ultimately conclude that there was sufficient

evidence for the jury to find a lack of valid authorization, Appel-

lants’ Burbank argument need not detain us. We have serious

concerns about some of the broad language in Burbank, but it

suffices to say that while it is one thing to decide that the consent

of sole or co-owners can preclude conviction for interstate trans-

port of stolen money (as was the case in Burbank under 18 U.S.C.

§ 2314 (2000)), it would be quite another to extend that holding to

14a

Services’ shareholders and board of directors consented to

the transactions at issue and therefore there was no theft.

In reviewing a challenge to the sufficiency of the evidence,

[t]he verdict of a jury must be sustained if there is substan-

tial evidence, taking the view most favorable to the Govern-

ment, to support it.”” Glasser v. United States, 315 U.S. 60,

80 (1942); see United States v. Mena-Robles, 4 F.3d 1026,

1031 (1st Cir. 1993) (stating that the issue in a sufficiency

challenge is “whether the evidence and reasonable inferences

therefrom, taken as a whole and in the light most favorable to

the prosecution, would allow a rational jury to determine

beyond a reasonable doubt that the defendants were guilty as

charged”’).

The Government presented evidence that between 1987

and May 1991 Dubon received $10,000 per month from

Health Services as a legal retainer, although Health Services’

board of directors had authorized a retainer of only $5,000.

Someone had tampered with the original board minutes to

show authorization for a monthly retainer of $10,000,

allowing Dubon to funnel the additional $5,000 per month to

Kouri. Specifically, the director of the word processing

center where the minutes were transcribed testified that the

original page of the minutes setting forth the retainer as

$5,000 was replaced in another set of minutes with a page

showing the retainer as $10,000. The page showing the

retainer as $10,000 was a different consistency than the rest

of the minutes and was not produced at the same word

processing center. Corcino testified the additional $5,000

was going to Kouri to pay Kouri’s home rent and credit card

bills. Corcino further testified that Kouri could not be on

Health Services’ payroll because Kouri was under contract

with the Harvard Institute for International Development,

which in turn had a contract directly with the Municipality of

San Juan.

this case involving a conspiracy to embezzle or steal funds from an

organization receiving funds from the federal government, espe-

cially given the attendant complexities of 18 U.S.C. § 666.

15a

The Government also presented evidence that Garib em-

ployed a personal housekeeper, as well as a secretary for his

private practice, using Health Services’ money. Corcino,

Health Services’ comptroller, testified that for a long time he

was not aware that Health Services was paying for a private

secretary and personal housekeeper for Garib, and that in his

opinion such payments constituted an unauthorized diversion

of Health Services funds for personal use. The housekeeper

testified that the signature on the timesheets bearing her

name was not hers. The secretary testified that while she was

paid by Health Services, ninety-nine percent of her time was

spent on tasks related to Garib’s private practice.

Finally, there was evidence at trial that Appellants also

used Health Services assets to purchase political support,

which Health Services was dependent upon for its funding.

Before the San Juan mayoral election of 1988, Garib alleg-

edly loaned a $19,000 video camera to one of the candidates,

Jose Granados-Navedo. The camera had been purchased

with a Health Services check. Garib and Kouri later met with

Granados to discuss Health Services providing other finan-

cial support for his campaign.

To generate more cash, Garib, Sotomayor, and Corcino

then met with Antonio Fernandez, the owner of IMA Produc-

tions, and presented him a Health Services check made out to

IMA in the amount of $60,000 and signed by Garib and

Sotomayor. Oniy some of this money was intended to pay

for services performed by IMA. Garib asked Fernandez to

endorse the check and cash it—for else write separate IMA

checks payable to other persons who had not rendered

services—so Garib could recover the excess in cash. Garib

explained Health Services had an urgent need of cash to

make certain payments that it could not make by company

check. When Fernandez refused to participate, Garib stated

that he had solved the problem in another way. Garib later

met with Granados and gave him a box containing more than

$100,000 in cash.

Granados lost the election. After the new administration

assumed office, payments on the AIDS contract were de-

layed. Koun later told Corcino that he had taken care of the

16a

problem by arranging for $5,000 a month to be paid to the

candidate who had won the election, Mayor Hector Luis

Acevedo, and $5,000 to the Director of the Health Depart-

ment of the Municipality, Dr. Freddie Borras. Regular

payments by the Municipality on the AIDS contract then

resumed. The $10,000 monthly payments were raised by

cashing Health Services checks issued to persons who had

performed no services. Several of these checks were signed

by Garib and Dubén. Dubon’s law firm was also involved in

cashing a series of these Health Services checks at Dubén’s

direction, with at least one of the checks being issued to

Dubon’s son, who had performed no services. Toward the

end of 1990 Dubén told Corcino, “I am not going to sign for

that [expletive] any longer.” He did not, however, object to

the continued diversion of the funds.

Viewing this evidence in the light most favorable to the

Government, as we must, we conclude that a rational jury

could find beyond a reasonable doubt that Dubén and Garib

were participants in a conspiracy to use Health Services

funds to pay personal expenses and make political payoffs as

charged in the indictment. The evidence of informal altera-

tions of the board minutes as a means to funnel funds to

Kouri, of the apparent use of a forged signature to divert

Health Services’ funds to pay for Garib’s personal house-

keeper, of the use of a Health Services’ employee to do work

almost exclusively for Garib’s private practice, and of the

clandestine efforts to turn Health Services checks into cash

are all evidence from which a jury could find that defendants

“without valid authority” embezzled, stole, or obtained by

fraud money or property.

IV.

Dubon and Garib challenge a number of the district court’s

decisions regarding jury instructions. We address each in

turn, recognizing that when alleged errors involve particular

instructions’ adequacy in explaining the law, as they do here,

“w]e must look at the entire charge, in light of the evidence,

and determine whether, taken as whole, the court’s instruc-

tions fairly and adequately submitted the issues in the case to

17a

the jury.” United States v. Woodward, 149 F.3d 46, 69 (Ist

Cir. 1998).

A.

The district court denied defendants’ requested jury

instructions, including instructions which required the

Government to prove that the actions of defendants were

designed to “cheat Health Services,” that Health Services

was the “victim,” and that authorization by Health Services

was thus a defense.'5 Instead, the district court instructed the

jury that it was sufficient to find that the funds at issue were

“something of value in excess of $5,000 in connection with

federal funding” and “under the care, custody or control” of

Health Services.

We conclude the district court did not err in its instruc-

tions to the jury. The district court instructed that theft

involved taking property without authority and that embez-

zlement involved taking property under one’s control

belonging to another.'© Its further instructions that there

15 One of the requested instructions said that “to act with intent

to defraud means to act knowingly with the intent or the purpose to

obtain, deceive, or cheat [Health Services] out of money or

property.” There was also a request to instruct the jury that

The government must prove beyond a reasonable doubt

that [Health Services] did not authorize the expenditure.

One of the ways by which a corporation can authorize a

payment is by the board of directors. If the board of direc-

tors of Advanced Community Health Services authorized an

expenditure, then this expenditure was not theft or embez-

zlement.

Other instructions were requested, but since they all embody

variations of the same theme as the ones above, we need not set

them all out.

16 The district court instructed:

Embezzlement is the fraudulent appropriation of property

with [sic] one properly entrusted with its possession.

It is to willfully convert to one’s own use, without author-

ity, another’s money and property, of which the wrongdoer

18a

was a crime if the money or property stolen “was owned by

or was under the care, custody, or control of [Health Ser-

vices],” was proper in light of our discussion above in

Part I. The instructions taken as a whole fairly and ade-

quately informed the jury of the applicable law.

B.

Dubén and Garib argue the district court erred by refusing

to instruct the jury on the requested definition of federal

benefits. We have already set out the applicable law as to

what constitutes federal benefits under § 666 in Part Il

above.

Dubén and Garib requested the following instructions:

(1) Not every payment by the federal government to an

organization constitutes federal “benefits” as required by

the statute; (2) Federal money paid to a private corporation

as payment of fees for services already rendered by the

corporation does not qualify as federal benefits; (3) Pay-

ments made by the federal government to a private corpora-

tion as part of an ordinary commercial transaction do not

qualify as federal benefits; (4) Money paid to a corporation

is a federal benefit if the corporation was required to

“administer” the money under an agreement with the

government or to “disburse” the money to others. The

district court, meanwhile, tracked the statutory language in

instructing the jury.'? Cf. United States v. Paradies, 98 F.3d

acquired possession validly, of [sic] some office, employ-

ment or position of trust.

Theft, also known as larceny, is the act of stealing or tak-

ing of property without the owner’s consent. It is the

fraudulent taking of personal property for [sic] money be-

longing to another from his possession or from the posses-

sion of some person holding the same for him without his

consent, with an intent to deprive the owner of the value of

the same and to appropriate it to the use or benefit of the

person taking it.

17 The district court instructed the jury that in order for them to

return a guilty verdict, Health Services must have received

'

‘

:

>

:

;

19a

1266, 1289 (11th Cir. 1996) (concluding there was no plain

error in district court’s failure to instruct on an element of §

666, where the instructions “tracked the statutory require-

ments” and the evidence at trial was sufficient for a jury to

find the element in question satisfied).'®

We conclude the first three of the requested instructions

were adequately covered by the district court when it in-

structed the jury that “legitimate, valid, bona fide salary,

wages, fees, or other compensation paid or expenses paid or

reimbursed in the ordinary course of business” did not

constitute benefits. As to the fourth requested instruction,

Dubén and Garib direct us to no authority supporting such a

definition of federal benefits under § 666, nor do we believe

that such is a complete statement of the law in this respect.'?

in any one-year period benefits in excess of $10,000 under a

federal program involving a grant, a contract, a subsidy, a

loan, a guarantee, insurance or other form of federal assis-

tance. This section [666] does not apply to bona fide salary,

wages, fees, or other compensation paid, or expenses paid or

reimbursed in the usual course of business.

The district court reiterated this element of § 666 later.

18 Dubén and Garib cite Marmolejo, 89 F.3d at 1189, for the

proposition that “(t]he plain language of § 666 is ambiguous in

defining ‘Federal Program’ and ‘Federal Assistance,’” and

therefore more was required than mere recitation of the statutory

language. However, there can be little doubt that the National

Institute on Drug Abuse (which we have concluded is the source

of the federal benefits at issue here) is a federal assistance

program. Thus, even if we were to find error in the district

court’s failure to define “federal program” and “federal assis-

tance” in its instructions, such error would be harmless. See

Bastien v. Goddard, 279 F.3d 10, 16 (1st Cir. 2002) (instructional

error “entitles appellant to a new trial on his claim only if it had a

prejudicial effect”).

19 Garib acknowledges the requested instructions were written

“so that the jury could differentiate between the payments Health

Services received in 1989 (which were not ‘benefits’), and the

federal grants it received after February 1991 (which were ‘bene-

fits’).” Since we have already concluded that Health Services did

20a

We cannot conclude that there is error in refusing an offered

instruction where we are left to speculate as to an appellant’s

legal underpinning for the proposed instruction. One may

argue that United States v. Rooney, 986 F.2d 31 (2d Cir.

1993), provides some support. In that case the Second

Circuit stated that “[iJn each of the cases [enumerated by the

Senate Report to illustrate situations § 666 is intended to

include], the organization... provided the Federal govern-

ment with a service by administering a government pro-

gram.” /d. at 35. But that discussion of legislative history

was dictum, since the court there had already concluded that

benefits were present on the basis of § 666’s statutory

language. /d. at 34. More importantly, a court’s refusal to

instruct in the language of an appellate opinion does not

justify reversal. See Kent v. Smith, 404 F.2d 241, 244 (2d

Cir. 1968) (“{I]t is generally not helpful to take quotations

from the opinions of appellate courts, that were never in-

tended to be used as instructions to juries, and submit these

in the form of requests to charge.”).

We are aware that the Supreme Court in Fischer stated that

“[t]o determine whether an organization participating in a

federal assistance program receives ‘benefits,’ an examina-

tion must be undertaken of the program’s structure, opera-

tion, and purpose.” 529 U.S. at 681. The record before us

demonstrates that evidence was before the jury relevant to

these issues, and the district court, in ruling on the motion for

acquittal, expressly analyzed these issues.2? The district

court did not err in instructing the jury in this respect.

receive benefits in 1989, the requested instructions buckle under

their own weight.

20 The district court stated:

Defendants’ requests are premised upon their enduring con-

tention that federal money paid to a private corporation which

performs a service for the government can not constitute fed-

eral benefits.

We have disagreed, and continue to disagree, with such a

contention. To summarize, we find that [Health Services]

was not in a purely commercial relationship with the federal

ln eee ha Ai ae

2la

C.

Dubén and Garib argue that the district court erred by

refusing to instruct the jury that it could only return a verdict

of guilty on the basis of conduct occurring after Health

Services first received federal benefits. The requested

instruction stated:

An expenditure that occurred before [Health Services]

ever received any federal benefits is not a violation of

18 U.S.C. section 666. The government must prove that

the defendant agreed to an unauthorized expenditure or

expenditures that occurred after [Health Services] re-

ceived federal benefits. Therefore, if the defendant

agreed only to an expenditure or expenditures occurring

before Health Services received any federal benefits, you

must find the defendant not guilty of count 1.

The district court denied this request.

The relevant statutory language states: “(T]he circum-

stance [that must exist for there to be a federal crime] is that

the organization . . . receives, in any one year period, benefits

in excess of $10,000 under a Federal program involving a

grant, contract, subsidy, loan, guarantee, insurance, or other

_ form of Federal assistance.” § 666(b). The statute further

government. First, the contract between the Municipality of

San Juan and [Health Services] provided that [Health Ser-

vices] was to be the exclusive source of AIDS counseling and

professional services in San Juan and that the Municipality

maintained administrative and supervisory roles over [Health

Services]. This fact alone clearly indicates more than a com-

mercial relationship. Moreover, we find that the contractual

relationship itself is a form of a federal assistance, supplying

AIDS services under a federally financed program. See

United States v. Copeland, 143 F.3d 1439, 1441 (11th Cir.

1998) (“{O]rganizations engaged in contractual relationships

with the federal government would fall within the scope of

[section 666], if those ‘contractual relationships constitut[ed]

some form of Federal assistance.’ ”’) (internal citations omit-

ted). We instructed the jury accordingly.

Dubon-Otero, No. 97-091, slip op. at 10-11.

22a

defines one-year period as “a continuous period that com-

mences no earlier than twelve months before the commission

of the offense or that ends no later than twelve months after

the commission of the offense. Such period may include

time both before and after the commission of the offense.”

§ 666(b)(5).

Garib now argues the instruction given by the district court

allowed the jury to return a guilty verdict on the basis of

conduct occurring before Health Services received any

federal money at all, much less federal benefits.2' For

instance, the jury could have found Garib guilty on the basis

of conduct occurring only in 1988 (before Health Services

received any federal monies), added twelve months to get

into 1989 (when Health Services received over $10,000 in

federal funds), and thus satisfied the instruction. Garib

argues federally criminalizing his 1988 conduct in that way

would exceed the government’s authority under the Spending

Clause of the United States Constitution, U.S. Const. art. I,

§ 8, cl. 1. See Fischer, 529 U.S. at 689 (Thomas, J., dissent-

ing) (“We have held that the spending power requires, at

least, that the exercise of federal power be related ‘to the

federal interest in particular national projects or programs.’ ”’)

(quoting South Dakota v. Dole, 483 U.S. 203, 207 (1987));

United States v. Zwick, 199 F.3d 672, 687 (3d Cir. 1999)

(“Applying § 666 to offense conduct, absent evidence of any

federal interest, would appear to be an unconstitutional

exercise of power under the Spending Clause.”).

In support of his contention that the jury could have found

him guilty based solely on 1988 conduct, Garib points to the

Government’s argument to the jury in summation:

And you will recall that Mr. Poole testified that on Janu-

ary 10 of 1989, federal funds were received through that

grant. And you will recall that that grant was in excess of

21 Because Dubén’s conduct all involved 1989, and because we

have already concluded that there was indeed sufficient evidence

for the jury to find that Health Services had received federal

benefits in 1989, we only need to consider this argument as it

pertains to Garib.

23a

$10,000. And why is that date important? Because, as

the judge will instruct you on what the law is for federal

program fraud, the government has to prove that $10,000

were received in any one calender [sic] year period either

before or after the commission of the offense. And if you

take the date of January 10th of 1989 and go back one

year, it takes you to January 10th of 1988, close to the

date on which [Health Services| was created.

Garib and Dubén requested a special verdict that would

have required the jury to identify what conduct it was basing

its verdict on, but the Government objected, and the district

court did not submit a special verdict form.

The Government responds that the indictment charged a

conspirecy beginning in 1989 and that the jury was instructed

accordingly. It argues the 1988 conduct was only presented

to show the existence of a conspiracy. It further argues that

even if 1988 conduct was a basis for the jury’s verdict, there

in fact was federal interest in the form of pending contracts.

Finally, the Government argues any error was harmless

because the jury found that a conspiracy existed, that

Dub6on’s conduct occurred in 1989, and that Garib, as a co-

conspirator, was responsible for that conduct.

We conclude there was no error. To begin with, the in-

struction requested by Duboén and Garib was not a correct

statement of the law, because what the Government had to

prove was that the defendants agreed to join a conspiracy to

steal from Health Services and that an overt act in further-

ance of that conspiracy occurred after § 666 became applica-

ble. The requested language was simply too narrow. Most

importantly, however, the district court’s instructions as to

the scope of the indictment properly limited the jury:

So let’s now talk about conspiracy. For you to find a de-

fendant guilty of conspiracy, you must be convinced that

the government has proved each of the following ele-

ments beyond a reasonable doubt. First, that between in

or about January of 1989 up to and including February of

1994, the agreement specified in the indictment and not

some other agreement or agreements existed between at

24a

least two of the defendants charged in the indictment; and

second, that the defendants Luis Dubén and Jorge Garib

each willfully joined in that agreement; and third that at

least one of the conspirators committed at least one overt

act in the an [sic] effort to further the purpose of the con-

spiracy.

(Emphasis added.)

As for the Government’s argument to the jury in summa-

tion, it was not the subject of a timely objection and we will

not say it was plain error to permit it.2? See Chute v. Sears

Roebuck and Co., 143 F.3d 629, 630 (Ist Cir. 1998) (“[T]he

court of appeals will consider a forfeited objection only if_an

error was committed, if the error was ‘plain’ (i.e. clear under

current law), if the error was prejudicial, and if review is

needed to prevent a miscarriage of justice.”) (citing United

States v. Olano, 507 U.S. 725, 733-37 (1993)).

V.

Garib challenges his perjury conviction. See 18 U.S.C.

§ 1623 (imposing punishment on anyone who, under oath in

any proceeding before any grand jury, knowingly makes any

false material declaration). Garib’s perjury charge stems

from testimony he gave before the grand jury. As part of that

testimony he denied giving political contributions, or loaning

a video camera, to Granados. He also denied asking Fernan-

dez to sign a $60,000 check so Garib could generate cash.

22 Garib also points to the district court’s reimbursement order

following the conviction as evidence of the district court’s alleged

confusion on this issue. In that order, the district court required

Garib to repay the federal government for losses it incurred as a

result of Garib’s conduct in 1988. Even if we were to agree that

the reimbursement order suggests a misunderstanding of the law

on the part of the judge, it does not invalidate the judge’s instruc-

tions. The judge need not be correct in his reasoning, so long as he

was correct in his decision being challenged on appeal. See

Helvering v. Gowran, 302 U.S. 238, 245 (1937) (“In the review of

judicial proceedings the rule is settled that if the decision below is

correct, it must be affirmed, although the lower court relied upon a

wrong ground or gave a wrong reason.”).

25a

Garib now argues he was denied a fair trial on his perjury

charge for two reasons. First, he argues that by improperly

instructing the jury as to § 666’s “one-year-period” and

Health Services’ authorization defense, the court effectively

directed a verdict as to materiality. Because we have con-

cluded above that the district court’s instructions on these

matters were not improper, Garib’s argument on this first

point must fail. Second, Garib argues the district court’s

instructions as to perjury removed the Government’s burden

of proving the falsity of the statements at issue. The district

court instructed the jury that:

In order to sustain its burden of proof for the purpose of

making a false declaration before the federal grand jury

as charged in Count Thirty-five of the indictment, the

government must prove the following four essential ele-

ments beyond a reasonable doubt. One, that the defen-

dant Jorge Garib gave testimony under oath before a fed-

eral grand jury; number two, that the defendant Jorge

Garib made the false material statement as detailed in

the indictment during that testimony; three, the defendant

Jorge Garib knew that the statements were false when he

gave the testimony; and four, that the statement or repre-

sentation was material, meaning that it had a natural ten-

dency to influence or was capable of influencing a deci-

sion or an action, whether or not it actually influenced or

deceived anyone. I also instruct you that truth is a de-

fense to perjury.

(Emphasis added.) We see no error in the district court’s

instructions because they adequately covered the Govern-

ment’s burden of proof. See United States v. Watson, 623

F.2d E198, 1204 (7th Cir. 1980) (upholding similar instruc-

tion).23

23 Garib raises three other arguments, which we conclude are

without merit. As phrased in his brief, they are: “The District

Court’s Flawed Instructions On § 666 Propelled The Prosecutor To

Argue That Dr. Garib Had A Motive To Lie To The Grand Jury”;

“The District Court’s Endorsement Of The Flawed Theory Of

Prosecution Invited The Prosecutor To Assail Dr. Garib’s Charac-

ter And Prejudice His Right.To A Fair Trial”; “The Cumulative

26a

VI.

Finally, Dubén and Garib challenge the makeup of their

jury and the appointment of the interim United States Attor-

ney.

A.

Dubén and Garib argue that their right, as criminal defen-

dants, to a petit jury selected from a fair cross-section of the

community, see Taylor v. Louisiana, 419 U.S. 522, 528

(1975) (‘the selection of a petit jury from a representative

cross section of the community is an essential component of

the Sixth Amendment right to a jury trial”) (citing also 28

U.S.C. § 1861), is denied in Puerto Rico by the exclusion of

potential jurors who are not proficient in English—an

exclusion which they allege systematically excludes the poor.

We previously held a similar challenge to be unavailing in

United States v. Benmuhar, 658 F.2d 14 (1st Cir. 1981).

Dubén and Garib seek to distinguish Benmuhar as having

been decided in part upon the absence of any viable alterna-

tive, while here they suggested simultaneous translation.

However, we stated in United States v. Flores-Rivera, that it

is “the overwhelming national interest served by the use of

English in a United States court,” which “justifies conducting

~ proceedings in the District of Puerto Rico in English and a

requiring jurors to be proficient in that language.” 56 F.3d

319, 326 (1st Cir. 1995) (quoting United States v. Aponte-

Suarez, 905 F.2d 483, 492 (ist Cir. 1990)). This justification

is independent of the presence or lack of any viable alterna-

tives. Accordingly, we reject Appellants’ contention.

B.

Dubén and Garib challenge the appointment of interim

United States Attorney Guillermo Gil as statutorily and

constitutionally defective. As Appellants themselves recog-

nize, this issue has been definitively resolved in the Govern-

Effect Of The District Court’s Errors Deprived Dr. Garib Of A

Fair Trial.”

27a

ment’s favor. United States v. Hilario, 218 F.3d 19, 22 (lst

Cir. 2000).

VIL.

Accordingly, we affirm.

hilaat = Oe

28a

APPENDIX B

[Filed March 3, 2000]

UNITED STATES DISTRICT COURT

DISTRICT OF PUERTO RICO

Criminal No. 97-091 (JAF)

UNITED STATES OF AMERICA,

- Plaintiff,

V.

Luis E. DUBON-OTERO (10) and JORGE L.

GARIB-BAZAIN (11),

Defendants.

OPINION AND ORDER

On February 11, 2000, a jury convicted Defendants Jorge

Garib-Bazain (“Garib”’) and Luis Dub6én-Otero (““Dub6n’”) for

their participation in a conspiracy to embezzle federal

program funds through Advanced Community Health

Services (““ACHS”) pursuant to 18 U.S.C. § 666 (1994).

Defendant Garib was also convicted of perjury pursuant to

18 U.S.C. § 1623(a) (1994).

Defendant Garib moves for a judgment of acquittal, arrest

of judgment, or a new trial pursuant to Fed. R. Crim. P. 29,

33, and 34. Specifically, Defendant Garib alleges that:

(1) we instructed the jury erroneously; (2) we lacked subject

matter jurisdiction over the conspiracy charge in the indict-

ment; (3) the indictment failed to state a federal offense;

(4) we erroneously admitted evidence in the form of alleg-

edly-altered ACHS Board of Directors’ Minutes; (5) we erred

in not granting Defendant’s pretrial motion for a change of

29a

venue and, thus, the prejudicial publicity prior to and

throughout the trial violated his Sixth Amendment rights to

an impartial adjudication, U.S. CONST. amend VI; and (6) we

should have dismissed his indictment because interim Uniied

States Attorney Guillermo Gil’s appointment is unconstitu-

tional.

Defendant Dub6én moves for a new trial pursuant to Fed. R.

Crim. P. 33, due to: (1) our erroneous denial of his motion

for change of venue; and (2) overwhelming pretrial publicity.

Defendants join the relevant portions of each other’s mo-

tions.

I.

Legal Standards

A. Federal Rule of Criminal Procedure 29

A motion pursuant to Rule 29 tests the legal sufficiency of

the evidence against a defendant. See Jackson v. Virginia,

443 U.S. 307, 317 n.10 (1979). A court must direct acquittal

“if the evidence is insufficient to sustain a conviction.” FED.

R. CRIM. P. 29(a). In ruling on a Rule 29 motion, the court

“must take the evidence in the light most favorable to the

government” and must deny the motion if “taking the facts

and the reasonable inferences therefrom, a rational jury could

have found the defendant guilty beyond a reasonable doubt.”

United States v. Lema, 909 F.2d 561, 569 (1st Cir. 1990);

United States v. Rivera-Santiago, 872 F.2d 1073, 1078-79

(1st Cir. 1989); United States v. Paone, 758 F.2d 774,

775 (ist Cir. 1985) (finding that same standard applied to

circumstantial evidence cases). A judgment of acquittal

terminates the prosecution, and double jeopardy attaches

which bars further proceedings against the defendant for the

same offense. See Fong Foo v. United States, 369 U.S. 662,

671 (1962).

B. Federal Rule of Criminal Procedure 33

A motion for a new trial pursuant to Rule 33 may be

granted, upon motion by the defendant, if the trial court finds

a new trial is “required in the interests of justice.” FED. R.

30a

Crim. P. 33. Trial courts exercise wide discretion in ruling

on Rule 33 motions. See United States v. Leach, 427 F.2d

1107, 1111 (1st Cir. 1970). They, however, should consider

the harmless error standards of FED. R. CRIM. P. 52 and deny

the motion unless the substantial rights of a defendant were

impaired. See Chapman v. California, 386 U.S. 18, 24

(1967) (finding that if the error involved denial of a constitu-

tional right, a new trial is required unless the error was

harmless beyond a reasonable doubt).

Prejudicial publicity which is harmful to a defendant is a

ground for a new trial pursuant to Rule 30, see, eg.,

Sheppard v. Maxwell, 384 U.S. 333 (1966); Estes v. Texas,

381 U.S. 532 (1965), but the mere existence of publicity does

not, in itself, require a new trial. See Patton v. Yount, 467

U.S. 1025, 1035 (1984). The real issue is whether the

defendant was prejudiced by the publicity. See United States

v. Anguilo, 897 F.2d 1169, 1180 (1st Cir. 1990). In making

such a determination, the trial court has substantial discre-

tion. See United States v. Drougas, 748 F.2d 8, 29 (1st Cir.

1984).

C. Federal Rule of Criminal Procedure 34

Pursuant to Rule 34, a court may arrest judgment in two

circumstances: (1) when the indictment fails to charge an

offense; or (2) when the court lacks jurisdiction over the

offense charged. See FED. R. CRIM. P. 34. In determining a

motion for arrest of judgment, a court may only consider the

record, which includes the indictment, the plea, the verdict,

and the sentence. See United States v. Sisson, 399 U.S. 267,

281-82 (1970).

Il.

Analysis

For efficiency’s sake, we shall combine and discuss Defen-

dants’ contentions in the context of the three legal standards

we have outlined above.

3la

A. Rule 29 Contention

Defendant Garib alleges that we incorrectly admitted evi-

dence that constituted unreliable hearsay of a codefendant.

Defendant Garib maintains that admission of the ACHS

Board of Directors’ Minutes (“Minutes”) violated his con-

frontation rights and impermissibly prejudiced him by falsely

implicating his participation in fraudulent contracts.

We disagree with Defendant’s contention because we find

that the Minutes are business records of a corporation.' The

Board of Directors’ Minutes of a corporation constitute the

records of regularly-conducted business activity, thereby

qualifying as a hearsay exception. See FED. R. EviD. 803(6).

We find that the Minutes constitute a business record because

they documented what transpired at the Board meetings; they

were transcribed by Dubén’s secretary close in time to the

actual meetings; Dubén’s secretary testified at trial; they

were transmitted by codefendant Dubdén, a person with

knowledge; and they were regularly kept in the normal

course of operations at ACHS. The fact that some minutes

may have been doctored while in the control of Dubén does

not make them less admissible in the context of this trial.

B. Rule 33 Contentions

Defendant Garib contends that we erroneously instructed

the jury on a number of matters, and both Defendants main-

tain that we erroneously denied their motions for a pretrial

' A business record is a

[m]Jemorandum, report, record, or data compilation, in any

form, of acts, events, conditions, opinions, or diagnoses,

made at or near the time by, or from information transmitted

by, a person with knowledge, if kept in the course of a regu-

larly conducted business activity, and if it was the regular

practice of that business activity to make the memorandum,

report, record, or data compilation, all as shown by the tes-

timony of the custodian or other qualified witness.

Fed. R. Evid. 803(6).

32a

change of venue which resulted in overwhelming prejudice

that infected the impartiality of the trial.

Specifically, Defendant Garib alleges that we erroneously

instructed the jury on: (1) jurisdiction with regards to receipt

of federal funds under 18 U.S.C. § 666; (2) the definition of

federal benefits under section 666; (3) the definition of

authorized transaction by a private, for-profit corporation; (4)

the statute of limitations’ defense to section 666; and (5) the

burden of proof in a perjury prosecution.

We begin by looking to the source of Defendant Garib’s

allegations. Prior to the conclusion of trial, both Defendants

and the Prosecution submitted proposed jury instructions.

After consideration of the proposals, we held three confer-

ences with the attorneys in this case to discuss the jury

instructions. All of the issues Defendant Garib is now raising

were addressed and dealt with during those conferences.

Defendant’s main contention seems to be the fact that we

did not accept, verbatim, his proffered jury instructions. We

are not obligated to do so. While it may constitute reversible

error for a court to refuse to instruct the jury on a defendant’s

properly presented and accurate theory of the case, see

United States v. Leach, 427 F.2d 1107, 1112 (1st Cir. 1970),

“a court is under no compulsion to accept faulty instruc-

tions.” Jd. at 1113. Nor must a court adopt a defendant’s

proffered instruction in the precise language suggested, see

United States v. Coast of Maine Lobster Co., 557 F.2d 905

(Ist Cir. 1977), even if it is a correct statement of the law.

See United States v. Grisson, 645 F.2d 461 (5th Cir. 1981);

United States v. Linn, 438 F.2d 456 (10th Cir. 1971). The

crucial issue surrounding jury instructions is whether,

“[t]aken as a whole, the charge was fair and impartial.”

Leach, 427 F.2d at 1112; see also United States v. Barham,

595 F.2d 231 (Sth Cir. 1979) (finding no error in trial court’s

refusal to submit defendant’s requested theory of defense

instruction where actual instructions given impartially

presented defendant’s theory of the case). In this context, we

address Defendant’s allegations in turn.

a Aitviseaae sania te eta ee >

33a

1. Jurisdiction Pursuant to Section 666

Defendant Garib alleges that based upon the guilty verdict

as to the perjury charge, the jury must have made factual

findings that he participated in events which occurred in

1988, a time in which ACHS had not received federal funds.

Therefore, Defendant maintains that we failed to instruct the

jury on the proper jurisdictional parameters of section 666.

During at least one of our jury instruction conferences with

counsel, we discussed the jurisdictional parameters of section

666, in particular the definition of the one-year period

pursuant to the statute. At that time, we explained to Defense

counsel that we interpreted the statute to proscribe the one-

year period as a time which acknowledges the first receipt of

federal funds by an organization and then requires the

factfinder to count either forward or backward for as long as

a twelve-month period. Our reading of section 666 accords

with the plain language of the statute:

[T]he term “in any one-year period” means a continuous

period that commences no earlier than twelve months be-

fore the commission of the offense or that ends no later

than twelve months after the commission of the offense.

Such period may include time both before and after the

commission of the offense.

18 U.S.C. § 666(d)(5) (1994). We believe this to be the

proper determination.

Since the Prosecution alleged receipt of federal program

funds in 1989, the Center for Disease Control grant for which

work was performed in 1988, we instructed the jury accord-

ingly. We find no error in our instruction.”

2 The jury instruction at issue provided:

The one-year period must begin no more than twelve

months before the defendants committed these acts and must

end no more than twelve months afterwards.

Docket Document No. 1226.

34a

2. Definition of Federal Benefits Pursuant to Sec-

tion 666

Defendants allege ‘that since ACHS was a private, for-profit

corporation, the federal funds received were the property of

the owners of ACHS, a group that included Defendants. As

such, Defendants maintain that the monies ACHS received

did not constitute a federal benefit under section 666, and no

federal offense could have occurred because the owners of

the corporation were disbursing their own money. Further-

more, Defendants contend that they were operating under a

fee-for-services agreement with the government, which

precludes a finding of federal benefits.

This is not new ground. We have been dealing with these

issues since Defendant Garib moved to dismiss his indict-

ment and both Defendants moved to preclude the Prosecution

from introducing evidence on similar grounds. Additionally,

we spent a large portion of time during the jury instructions

conferences addressing these issues. Nevertheless, we will

briefly summarize our determinations in an effort to preserve

the record fully.

Defendants’ proposed jury instructions regarding federal

benefits provided:

Not every payment by the federal government to an or-

ganization constitutes federal “benefits” as required by

the statute. Federal money paid to a private corporation

as payment or fees for services already rendered by the

corporation do not qualify as federal benefits. Similarly,

payments made by the federal government to a private

corporation as part of an ordinary commercial transaction

do not qualify as federal benefits. Money paid to a cor-

poration is a federal benefit if the corporation was re-

quired to “administer” the money under an agreement

with the government or to “disburse” the money to oth-

ers.

See Docket Documents Nos. 1209 and 1225. Defendants’

requests are premised upon their enduring contention that

federal money paid to a private corporation which performs a

35a

service for the government can not constitute federal bene-

fits.

We have disagreed, and continue to disagree, with such a

contention. See Docket Document No. 1066. To summarize,

we find that ACHS was not in a purely commercial relation-

ship with the federal government. First, the contract between

the Municipality of San Juan and ACHS provided that ACHS

was to be the exclusive source of AIDS counseling and

professional services in San Juan and that the Municipality

maintained administrative and supervisory roles over ACHS.

This fact alone clearly indicates more than a commercial

relationship. Moreover, we find that the contractual relation-

ship itself is a form of a federal assistance, supplying AIDS

services under a federally financed program. See United

States v. Copeland, 143 F.3d 1439, 1441 (11th Cir. 1998)

(“[O}rganizations engaged in contractual relationships with

the federal government would fall within the scope of

[section 666], if those ‘contractual relationships constitut[ed]

some form of Federal assistance.’ °) (internal citations

omitted). We instructed the jury accordingly.

Finally, we find Defendants’ proposed jury instructions to

be incorrect as a matter of law in this case. The second

sentence (“Federal money paid to a private corporation as

payment or fees for services already rendered by the corpora-

tion do not qualify as federal benefits”) is legally flawed as

applied to the facts of this case. Cf, United States v. Nichols,

3 The jury instruction provided:

To prove fraudulent embezzlement and theft, the govern-

ment must prove the following elements beyond a reason-

abie doubt:

Fifth, that the San Juan AIDS Institute and/or Advanced

Community Health Serves, in a one-year period, received

benefits of more than $10,000 under any Federal organiza-

tion involving a grant, contract subsidy, loan guarantee, in-

surance or other assistance.

Docket Document No. 1226.

36a

40 F.3d 999 (9th Cir. 1994) (finding federal statute included

theft from organizations that provide government with some

form of quid pro quo).

3. Definition of Authorized Transactions by_a Pri-

vate, For-Profit Corporation

This issue was the most hotly debated topic of our jury

instruction conferences. Defendants maintain that since

ACHS was a private, for-profit corporation during the

relevant times for the indictment, the Board could authorize

any expenditure and it would be legal.

Once again, we disagree. The relevant inquiry under sec-

tion 666 is not who holds the authority, but rather whether

the authority that is exercised is valid. Defendants refuse to

acknowledge this self-evident fact, but that does not make it

any less meaningful.

Congress enacted section 666 to “protect the integrity of

the vast sums of money distributed through Federal programs

from theft, fraud, and undue influence by bribery.” S. REP.

No. 98-225, at 370 (1984), reprinted in 1984 U.S.C.C.A.N.

3812, 3511; see also United States v. Foley, 73 F.3d 484, 489

(2d Cir. 1996) (“By enacting section 666, Congress plainly

decided to protect federal funds by preserving the integrity of

the entities that receive the federal funds rather than requiring

the tracing of federal funds to a particular illegal transac-

tion.”). To assert that if an entity was a private, for-profit

corporation, as long as the Board, or whomever is the proper

person, authorizes a particular expenditure it is necessarily

legal, completely thwarts the purpose for which Congress

enacted the statute.

Put another way, if the entire Board was corrupt, Defen-

dants’ argument would find that any action taken by it, even

if contrary to the statutory purpose of section 666, is legal.

We do not ascribe to such a view. Cf. United States v.

Salinas, 654 F.2d 319, 328 (Sth Cir. 1981) (“[W)hile valid

consent by a bank’s board of directors may be a defense to a

charge of misapplication, no such board can vitiate a fraud on

the bank. Thus, if the [defendants] . . . had an intent to

37a

defraud, ‘approval of the board of directors is no longer

material to whether there was a misapplication of bank

funds.’ ”). Rather, we agree with the Fifth Circuit’s assess-

ment in a similar situation:

Patently an entire bank board, acting unanimously, could

not without violating the statute invest bank funds to pur-

chase a boatload of marijuana or make a loan secured

only by a chattel mortgage on a kilogram of cocaine.

Approval by the bank is a factor, indeed an important

one, to be considered in deciding whether the making of

the loan itself constituted a misapplication and whether a

defendant had the intent to injure or defraud the bank re-

quired to sustain a conviction . . . [bJut it is not a com-

plete defense.

Id. at 1354. Therefore, while Board authorization may go to

Defendants’ intent, it does not insulate the Defendants from

all blame.

Simply stated, if a den of thieves authorizes an illicit ac-

tion, the action does not gain legitimacy by the fact that the

authorization was performed by the proper persons. Rather,

the proper inquiry is whether the authorization was valid or

legitimate, i.e., not contrary to the purposes of section 666

and, therefore, not illegal. This is necessarily so because a

person or body, even by the most formal procedure possible,

cannot authorize theft or embezzlement without violating the

law. See United States v. Stout, No. 89-317-1-2-3, 1990 WL

136341, at *25 (E.D. Pa. Sept. 18, 1990) (citing United

States v. Cauble, 706 F.2d 1322, 1353 (Sth Cir. 1983)).

Accordingly, we instructed the jury that the government had

to prove beyond a reasonable doubt that “defendants, know-

ingly and without valid authority, embezzled, stole or ob-

tained by fraud, some money or property.” Docket Docu-

ment No. 1226."

4 Defendant Garib’s proposed jury instructions erroneously

asserted, in relevant part: ~

To prove theft under 18 U.S.C. section 666, the government

must prove that the expenditure was made without the con-

38a

4. Statute of Limitations Defense to Section 666

Defendant Garib contends that our failure to instruct the

jury that “a defendant’s declaration of innocence when

questioned by law enforcement, by itself, is not evidence of a

defendant’s continued participation in the conspiracy,”

constitutes grounds for a new trial. We did not give this

instruction in the manner proposed by Defendant Garib

because we fully covered the withdrawal defense in our

instructions.” Defendant Garib was seeking to have us

sent of those who had the authority to approve the expendi-

ture.

Docket Document Nos. 1209 and 1225; and Defendant Dubén’s

proposed jury instruction also incorrectly stated, in relevant part:

If the Board of Directors of Advanced Community Health

Services authorized an expenditure, then this expenditure

was not theft or embezzlement.

Docket Document No. 1224.

5 The relevant instruction provided:

It is a defense to the charge of conspiracy to comit theft

concerning programs receiving federal funds in Count One

of the indictment that defendant Jorge L. Garib-Bazain with-

drew from the conspiracy before February 18, 1994.

In order to withdraw from the conspiracy defendant Garib

must take some definite, decisive, and affirmative action to

disavow himself from the conspiracy or to defeat the goal or

purpose of the conspiracy.

Merely stopping activities or cooperation or merely being

inactive for a period of time is not sufficient to constitute the

defense of withdrawal.

In deciding if defendant Garib took a step to disavow or,

defeat the conspiracy, you may consider several factors in-

cluding whether the defendant intentionally alerted law en-

forcement to the conspiracy, whether the defendant told oth-

ers in the conspiracy that his participation had ended,

whether the defendant took steps to correct prior assistance

to the group, and whether the defendant attempted to rem-

39a

expand upon the withdrawal instruction. We declined to do

so, and now find that there was no error in our decision. See

Maine Lobster Co., 557 F.2d at 905; Grissom, 645 F.2d at

461; Linn, 438 F.2d at 456.

5. Burden of Proof in a Perjury Prosecution

Defendant Garib correctly notes that we instructed the jury

that they needed to determine whether Defendant had “‘made

the false material statements as detailed in the indictment,”

see id., and, further, that truth is a defense to perjury. How-

ever, Defendant is incorrect in alleging that we did not

instruct the jury that the Prosecution had the burden of

proving the falsity of the statements. While Defendant Garib

is correct concerning the allocation of the burden, we did not

err in our instruction. In relevant portion, we instructed:

[T]he government must prove the following four essential

elements beyond a reasonable doubt:

One: The defendant, Jorge L. Garib-Bazain, gave

testimony under oath before a federal grand jury;

Two: The defendant, Jorge L. Garib-Bazain, made

the false material statements as detailed in the indictment

during that testimony;

Three: Defendant, Jorge L. Garib-Bazain, knew that

the statements were false when he gave the testimony;

and

Four: The statement or representation was material,

meaning that it had a natural tendency to influence or was

capable of influencing a decision or an action, whether or

not it actually influenced or deceived anyone.

Docket Document No 1226. We find this to instruct the jury

adequately as to 18 U.S.C. § 1623(a). See United States v.

Watson, 623 F.2d 1198, 1204-05 (7th Cir. 1980) (finding

similar charge adequately covered burden of proof issue). .

edy any past act, or attempted to prevent any further pro-

gress of the conspiracy.

Docket Document No. 1226.

40a

6. Prejudicial Publicity

Defendants allege, pursuant to Rule 33, that we erred in

denying their motion for a change of venue due to adverse

prejudicial publicity prior to and throughout their trial. We

have thoroughly examined the adverse publicity issues in our

previous Opinion and Order, see Docket Document No. 1019,

and discussed, at length, different aspects of this issue with

counsel prior to and throughout the trial. We steadfastly

stand behind our previous determinations and merely touch

upon any issue not already addressed.

First, we unequivocally find that Defendants were not

prejudiced by the publicity in this case. We conducted an

individualized voir dire of the venire, asking each of them

extensive questions concerning their exposure to pretrial

publicity and allowing participation by counsel in the proc-

ess. At the point of impanelment, counsel appeared to be

satisfied with the jury selected. We also instructed the jury

clearly and emphatically that they were not to listen to the

radio, watch television programs, or read articles concerning

this case. We repeated these instructions daily until the close

of trial. Redacted newspapers were provided to the jury

every day at court expense.

During the course of the proceedings, Defense counsel

became concerned about a daily radio show, Ojeda Sin

Limite, which had broadcast a show concerning the jury and

the trial. In response to their concerns, we called the jury

into an in-chambers conference and questioned whether any

of them had heard the allegedly objectionable broadcast. All

jurors resoundingly responded in the negative, and we noted

that they looked either shocked or disgusted by our mention

of the show.° Finally, during jury deliberations, Defense

counsel again brought a questionable broadcast of the same

show to our attention. We noted that it would have been

impossible for the jurors to have heard the live broadcast as

© We note that this was the only avenue for us to explore as we

perceive any attempt at preemptively silencing the media as a

restraint which unconstitutionally chills free speech in violation of

the First Amendment. U.S. CONST. amend. I.

4la

they were still involved in trial matters at the time it was

aired, and again counseled that we were without power to

control what the media aired.

The above situations constitute the only two instances of

publicity, other than daily newspaper reports covering factual

issues of the trial, which occurred during this trial. The jury

was insulated from the media throughout the course of this

trial, including during the airing of the two objectionable

Ojeda Sin Limite broadcasts. Consequently, we do not find

that Defendants were prejudiced in any way by this publicity.

C. Rule 34 Motions

Defendant Garib maintains that we lacked subject matter

jurisdiction over the conspiracy charge alleged in Count 1 of

the indictment, and both Defendants allege that the indict-

ment failed to state a federal offense. We deal with these

issues in turn.

Defendant Garib contends that the jury erroneously made

factual findings that he had participated in events which

occurred prior to ACHS’ receipt of federal money and,

therefore, no federal jurisdiction exists over the conspiracy

count. This is not new ground as this issue really goes to the

definition of a one-year period under section 666, which we

have previously explored at length. See supra II(B)(1).

Finally, Defendants allege that the indictment fails to state

a federal offense because any monies paid, during the rele-

vant periods of the indictment, to ACHS were fees paid to a

private corporation in return for services rendered. We also

have explored this argument fully. See supra II(B)(2).

Accordingly, Defendants’ Rule 33 motions are denied.

D. Challenge to the Authority of the Interim United

States Attorney

Defendant Garib renews his challenge to the authority of

interim United States Attorney Guillermo Gil, in light of the

recent opinion issued from another court in this district. See

United States v. Fermin Hilario, Crim. No. 96-0016 (CCC)

(D.P.R. Feb. 11, 2000). We deny Defendant’s motion and

42a

refer to our full explication in United States v. Luciano del

Rosario, Crim. No. 99-097 (JAF) (D.P.R. Feb. 25, 2000).

Ill.

Conclusion

In accordance with the foregoing, we DENY Defendants’

motions for judgment of acquittal, arrest of judgment and/or

a new trial pursuant to Fed. R. Crim. P. 29, 33, and 44. This

Opinion and Order disposes of Docket Documents Nos. 1238

and 1241.

IT IS SO ORDERED.

San Juan, Puerto Rico, this 3rd_ day of March, 2000.

— JOSE ANTONIO FUSTE

USS. District Judge

43a

APPENDIX C

UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT

No. 00-2029

UNITED STATES,

Appellee,

V.

Luts E. DUBON-OTERO,

Defendant-Appellant.

No. 00-2030

UNITED STATES,

Appellee,

¥.

JORGE L. GARIB-BAZAIN,

Defendant-Appellant.

Entered July 23, 2002

Before BOUDIN, Chief Judge, *GIBSON, Senior Circuit

Judge, **TORRUELLA, SELYA, LYNCH, LIPEZ and

HOWARD, Circuit Judges.

ORDER OF COURT

We construe appellants’ petitions for rehearing en banc as

petitions for panel rehearing and for rehearing en banc. The

44a

petitions for rehearing having been denied by the panel of

judges who decided the case and the petition for rehearing en

banc having been submitted to the active judges of this court

and a majority of the judges not having voted that the case be

heard en banc, it is ordered that the petitions for rehearing

and petitions for rehearing en banc be denied.

By the Court:

Richard Cushing Donovan, Clerk

By:JANICE M. O’NEIL

Chief Deputy Clerk

*Of the Eighth Circuit, sitting by designation.

** Judge Torruella is recused from these matters.

cc: Messrs. Srebnick, Roman, Hafetz, Friedman,

Klumper, Vega-Pacheco