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United States v. Cessa

United States Court of Appeals, Fifth Circuit

June 9, 2017

UNITED STATES OF AMERICA, Plaintiff - Appellee
FRANCISCO ANTONIO COLORADO CESSA, also known as Pancho, also known as Francisco Antonio Colorado-Cessa, Defendant-Appellant

         Appeal from the United States District Court for the Western District of Texas

          Before PRADO, HIGGINSON, and COSTA, Circuit Judges.

          STEPHEN A. HIGGINSON, Circuit Judge.

         Defendant-Appellant Francisco Colorado Cessa ("Colorado") appeals his conviction for conspiracy to commit money laundering under 18 U.S.C. § 1956(h). Colorado was convicted of participating in a scheme to launder drug proceeds for Los Zetas, a Mexican drug cartel. On appeal, Colorado raises six issues: (1) whether the district court erred when it declined to order disclosure of certain Brady and Giglio material; (2) whether the district court erred by instructing the jury that it could infer intent to conceal funds from commingling legitimate and unlawful assets; (3) whether the prosecutor's closing statement on the commingling inference requires a new trial; (4) whether the district court erred in finding that double jeopardy principles did not bar Colorado's retrial; (5) whether the district court erred when it declined to dismiss the indictment based on alleged prosecutorial misconduct before the grand jury; and (6) whether the district court erred in ordering the forfeiture of some of Colorado's property or in entering a money judgment against him. We remand for further findings on the Brady and Giglio claim. In light of our remand on the Brady claim, we do not reach Colorado's challenge to the forfeiture order. We otherwise reject Colorado's arguments.


         Colorado is a businessman from Mexico who owns an oil-services business called ADT Petro Services ("ADT"). Around 2004, Colorado became associated with the Zetas. The Zetas import drugs from Colombia and export them to the United States. Colorado's association with the Zetas arose out of his close friendship with Efrain Torres, a leader in the organization, who was also known as "Zeta 14" (the 14th member of the Zetas) or "La Chispa." Colorado's association continued, however, after Torres was murdered at the direction of Miguel Trevino (also known as "Zeta 40") in 2007.

         The Zetas engaged in a money-laundering operation that involved purchasing quarter horses-a type of racehorse-in the United States. The scheme was designed to conceal illegal drug money by repeatedly buying and reselling horses to "straw purchasers and shell companies"-a process that generated "clean" money, the origin of which was difficult to trace.

         Colorado and others were first indicted in 2012. Colorado was charged with one count of conspiring to launder drug proceeds in violation of 18 U.S.C. § 1956(h). The indictment alleged that the conspiracy began "in or about 2008" and that its objective was "to launder U.S. currency gained from the sale of illegal controlled substances by Los Zetas to purchase, breed, train, and race quarter horses in the United States and Mexico." Colorado and other conspirators were convicted in 2013, but this Court reversed Colorado's conviction due to an improper jury instruction. See United States v. Cessa, 785 F.3d 165, 187 (5th Cir. 2015) ("Cessa I").

         On August 4, 2015, a grand jury returned a second superseding indictment, which again charged Colorado with violating § 1956(h) by conspiring to commit money laundering with the Zetas. The second superseding indictment mirrored the first indictment in almost every respect. However, the new indictment expanded the dates of the alleged conspiracy, this time alleging that the conspiracy began "in or about 2004."

         A jury found Colorado guilty after a nine-day trial. The district court sentenced Colorado to 200 months in prison, followed by three years of supervised release. The district court also ordered forfeiture of Colorado's personal property and a $60 million money judgment. Colorado timely appealed.


         Colorado first argues that the district court erred under Brady and Giglio by failing to order the Government to turn over certain interview memoranda related to Carlos Nayen, a cooperating Government witness who testified at the second trial. Government agents interviewed Nayen at least nine times before trial. The agents generated FBI Forms 302 (official interview memoranda) for each of the nine interviews, the last occurring on December 18, 2013, almost two years before trial began. Before Nayen testified, Colorado, citing Brady and Giglio, moved for the Government to produce "all FBI-302s, DEA-6s, and similar interview memoranda" related to Nayen to the court for in-camera review.[1] The next day, the district court granted the motion. Following Nayen's direct testimony, Colorado's counsel asked the court to review the produced 302s with a "careful eye" in light of Nayen's direct testimony. The court responded by stating that nothing in the 302s was "helpful" to the defense, and accordingly, denied Colorado access to the interview memoranda. On appeal, we granted, over the Government's objections, Colorado's motion to view the 302s. Colorado now argues that the 302s contain material, exculpatory and impeachment evidence requiring that we vacate his conviction under Brady.

         "We generally review whether the government violated Brady de novo, although even when reviewing a Brady claim de novo, we must proceed with deference to the factual findings underlying the district court's decision[.]" United States v. Brown, 650 F.3d 581, 589 (5th Cir. 2011) (internal quotation marks and citations omitted). "But we have an exception to our general rule of de novo review: Where . . . 'a district court has reviewed potential Brady material in camera and ruled that the material was not discoverable, we review [that] decision only for clear error.'" Id. (alteration in original) (quoting United States v. Skilling, 554 F.3d 529, 578 (5th Cir. 2009), vacated in part on other grounds by Skilling v. United States, 510 U.S. 358 (2010)). "The district court's finding is clearly erroneous if, on the entire evidence, [the Court is] left with a 'definite and firm conviction' that a mistake has been committed." Id. (quoting United States v. U.S. Gypsum Co., 333 U.S. 364, 395 (1948)).

         Under Brady v. Maryland, a defendant's due process rights are violated when the prosecution suppresses evidence that is exculpatory. 373 U.S. 83, 87 (1963). The principle also applies to evidence that could be used to impeach prosecution witnesses. Giglio v. United States, 405 U.S. 150, 152-54 (1972). "To establish a Brady violation, a defendant must show: (1) the evidence at issue was favorable to the accused, either because it was exculpatory or impeaching; (2) the evidence was suppressed by the prosecution; and (3) the evidence was material." United States v. Dvorin, 817 F.3d 438, 450 (5th Cir. 2016). "Evidence is material if there is a reasonable probability that, had the evidence been disclosed to the defense, the result of the proceeding would have been different." Id. at 451 (internal quotation marks and citation omitted).

         Although the Government claimed at oral argument that the district court considered all three prongs of the Brady analysis, the record does not support that proposition. The district court denied Colorado's request for the 302s, saying: "I've read everything with the idea of how could any of that help you, and I couldn't find anything that would help you. Found a lot that could hurt you but not much that could help you. Nothing that could help you." On the face of the district court's statement it considered only favorability. This is not a case where the district court reviewed all potential Brady material in-camera and denied discoverability without giving reasons or with reasons that could reasonably be read to reach all three Brady prongs. In that type of case, we might (in the absence of contrary evidence) presume that the district court did a full Brady analysis. Here, however, the district court gave reasons for denying discovery and couched its holding in terms of favorability only.

         In addition, the timing of the district court's decision indicates that the court did not assess materiality. The district court determined that the 302s were not discoverable immediately following Nayen's direct examination. But much of what we focus on in assessing materiality is how the suppressed evidence relates to cross-examination. For example, we have asked whether the suppressed impeachment evidence is the "only avenue of impeachment" and whether the suppressed evidence impeaches an already impeached witness. United States v. Sipe, 388 F.3d 471, 483 (5th Cir 2004); accord United States v. Hughes, 230 F.3d 815, 819-22 (5th Cir. 2000). Further, even when our materiality jurisprudence extends beyond the scope of cross-examination, it asks questions that often depend on a full review of the trial evidence. For example, we ask whether the suppressed evidence impeaches a witness at the "heart of the government's case, " whether the case is close on any element of the crime, and whether the testimony that could be attacked with the suppressed evidence is strongly corroborated. Sipe, 388 F.3d at 490, 492; United States v. Alexander, No. 16-30737, 2017 WL 1031281, at *6 (5th Cir. 2017) (unpublished). These questions implicate the totality of the evidence presented at trial. Indeed, we have made clear that "[t]he materiality of Brady material depends almost entirely on the value of the evidence relative to the other evidence mustered by the state." Banks v. Thaler, 583 F.3d 295, 321 (5th Cir. 2009) (quoting Smith v. Black, 904 F.2d 950, 967 (5th Cir. 1990), vacated on other grounds 503 U.S. 930 (1992)). Accordingly, based both on its own words and the context of the trial, we conclude that the district court assessed the undisclosed interview memoranda for only favorability.

         The district court clearly erred in finding that the 302s were not favorable to the defense. As noted, evidence is favorable under Brady if it is either exculpatory or impeaching. Sipe, 388 F.3d at 477 (citing Strickler v. Greene, 527 U.S. 263, 281-82 (1999)); see also United States v. Dillman, 15 F.3d 384, 390 (5th Cir. 1994) ("Although exculpatory and impeachment evidence fall within the purview of Brady, neutral evidence does not.").

         Some of Nayen's statements in the 302s were exculpatory. At trial, Colorado's defense theory was that he bought horses for the Zetas using his own (or his company's) money. He explained that he spent millions of dollars on horses for the Zetas because he feared them. Nayen's statements in the 302s supported both points. For example, one 302 reports that "Nayen claimed that Colorado only gave horses to Trevino and Lazcano [another Zeta leader] as a gift. Nayen said that when Trevino and Lazcano would inquire as to the price of a horse, Colorado would give it to them and say it is a gift." This statement corroborates Colorado's defense theory that he did not buy horses using Zeta money. The 302s also suggest that Colorado feared the Zetas, reporting that "Nayen described Colorado as being in a constant state of anxiety after meeting with Trevino." This statement supports Colorado's theory that he gave horses to the Zetas-not to aid in the money laundering conspiracy-but out of fear. Because the 302s lent support to Colorado's trial theory, we find that they were favorable.

         The Government, however, argues the 302s are not truly exculpatory because nothing in the 302s goes to the heart of Colorado's guilt. On the Government's theory, Colorado's fear of the Zetas or the Zetas' coercion of Colorado could be relevant only if Colorado requested a jury instruction on the affirmative defense of duress. Because Colorado disclaimed a duress instruction, the Government reasons that evidence of fear and coercion cannot be relevant and, therefore, cannot be exculpatory.

         This argument misunderstands Colorado's defense theory. Colorado did not concede that he joined the conspiracy but only under duress. Instead, Colorado argued that he did not join the conspiracy at all, claiming that he gave the Zetas gifts using his own money because he feared them. This argument is directed at elements of the money laundering conspiracy charge- namely the allegations that Colorado joined the conspiracy and did so with specific intent. See United States v. Threadgill, 172 F.3d 357, 366 (5th Cir. 1999) (noting that to prove a money laundering conspiracy, the government must show "(1) that there was an agreement between two or more persons to commit money laundering; and (2) that the defendant joined the agreement knowing its purpose and with the intent to further the illegal purpose").

         Defendants charged with participating in a conspiracy to launder money may argue that they did not "join[] the conspiracy[.]" Cessa I, 785 F.3d at 175; see also United States v. Blessing, 727 F.2d 353, 356 (5th Cir. 1984) (reversing conspiracy conviction when the government failed to prove that the defendant joined the conspiracy). In Cessa I, we held that evidence indicating that a defendant trained horses for the Zetas, was paid with Zeta drug money, and knew that he was paid with Zeta drug money, was insufficient to support a money laundering conspiracy charge. 785 F.3d at 175-80. In doing so, we made clear that involvement with the Zetas, even involvement with Zeta drug money, was insufficient to support a money laundering conviction because it did not show that the defendant knowingly joined the Zetas' laundering conspiracy. Id. Colorado pursued a similar argument in this case. He argued that although he knew the Zetas engaged in drug trafficking, he did not join the money laundering conspiracy. Instead, Colorado claimed that his only transactions with the Zetas were not money laundering transactions, but gifts. And he explained the gifts by saying that he gave millions to the Zetas out of fear. If the jury believed Colorado, it could have acquitted on that theory. See id.; cf., e.g., United States v. Espinoza-Seanez, 862 F.2d 526, 538 (5th Cir. 1988) ("It is not enough that the defendant merely associated with someone who was knowingly participating in a conspiracy . . . ."); Panci v. United States, 256 F.2d 308, 312 (5th Cir. 1958) (reversing conspiracy conviction when evidence "amount[ed] to no more than that [defendant] was seen associating with characters of low repute").[2]

         Moreover, even if the Government were correct that evidence of fear and coercion was not relevant absent a duress instruction, we would still find that evidence supporting duress was favorable to the defense at Brady step one. A defendant's decision to pursue or disclaim an affirmative defense instruction is not made in a vacuum; defendants must evaluate the evidence available to them and determine whether seeking the instruction is likely to help or harm their cause. Denying defendants access to evidence they are entitled to under Brady can significantly change this risk calculus. For this reason, courts routinely find that evidence supporting an affirmative defense is exculpatory and, therefore, favorable under Brady. See, e.g., Mahler v. Kaylo, 537 F.3d 494, 504 (5th Cir. 2008) (finding Brady error when the prosecution withheld evidence that supported self-defense). Accordingly, evidence may be favorable under Brady if it would have supported an affirmative defense-even if the defendant, acting without the Brady evidence, later disclaims the defense.[3]And that is exactly what happened here: the district court denied the defense access to the alleged Brady material before ruling on whether to give a duress instruction. We therefore hold that the evidence contained in the 302s is exculpatory and thus is favorable under Brady.

         Furthermore, because Nayen testified inconsistently with the 302s, the 302s could have impeached Nayen's testimony. "It is a well-established principle of evidence that prior inconsistent statements of a witness are admissible to impeach that witness." United States v. Palacios, 556 F.2d 1359, 1363 (5th Cir. 1977). At trial, Nayen testified inconsistently with the 302s in two respects.

         First, Nayen testified that on three occasions the Zetas delivered millions of dollars to Colorado, which Colorado used, in part, for horse payments. The 302s tell a somewhat different story. In the first 302, Nayen contradicts his trial testimony by saying that Colorado bought horses for the Zetas as gifts-implying that Colorado used his own money, not Zeta money, to buy the horses.

         Second, Nayen testified that Colorado was "friends" with Zeta 40 (also called Trevino), and accordingly, Zeta 40 would not have threatened or coerced Colorado. Again, the 302s tell a different story. There, Nayen states that Zeta 40 said that he "was not [Colorado's] friend" and that Zeta 40 "always wanted to kill [Colorado]." Nayen further states that Colorado was "in a constant state of anxiety after meeting with [Zeta 40]."

         The Government questions the impeachment value of the 302s, arguing that "in its proper evidentiary context, the 'suppressed' evidence of Nayen's statements about Miguel Trevino [Zeta ...

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