USA v. Francisco Colorado Cessa

Filing

PUBLISHED OPINION FILED. [16-50328 Affirmed] Judge: ECP, Judge: SAH, Judge: GJC. Mandate pull date is 10/16/2017 for Appellant Francisco Antonio Colorado Cessa [16-50328]

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IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit

No. 16-50328

FILED
September 25, 2017

UNITED STATES OF AMERICA,

Lyle W. Cayce
Clerk

Plaintiff - Appellee
v.
FRANCISCO ANTONIO COLORADO CESSA, also known as Pancho, also
known as Francisco Antonio Colorado-Cessa,
Defendant - Appellant

Appeals from the United States District Court
for the Western District of Texas
Before PRADO, HIGGINSON, and COSTA, Circuit Judges.
STEPHEN A. HIGGINSON, Circuit Judge:
We previously remanded this case to the district court to determine
whether the Government suppressed certain favorable evidence and whether
any of the suppressed evidence was material. United States v. Cessa, 861 F.3d
121, 143 (5th Cir. 2017) (“Cessa II”). On August 8, 2017, the district court
concluded that none of the suppressed evidence was material. Because we
cannot say that the district court’s materiality determination was clear error,
reversal is not required. We therefore affirm.

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I
“The Zetas import drugs from Colombia and export them to the United
States.” Cessa II, 861 F.3d at 127. “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.” Id. Colorado was indicted as part of the scheme in 2012. Id.
Colorado’s first trial began in April 2013. In the Government’s opening
argument, it told the jury that it would hear evidence that Colorado funneled
money from the Zetas through his company, ADT Petro Services, and then back
to the Zetas through racehorses. But even at that time, the Government
possessed evidence that may have undercut its trial theory. Carlos Nayen,
whom the Government described as the “money man” and “the man
responsible for coordinating the purchase of horses” in the first trial, had been
interviewed nine times as part of the investigation.

At times, Nayen’s

statements indicated that Colorado may not have participated in the scheme.
For example, Nayen told the Government that Colorado “only gave horses” to
the Zetas “as a gift.” The prosecutor’s notes from the meeting indicate that
Nayen said that Colorado gave the horses “out of fear.” But the Government
did not disclose Nayen’s statements to the defense.
Nayen was not called to testify at the first trial. And the Government
severely limited written documentation of Nayen’s statements. The Assistant
United States Attorneys prosecuting Colorado were present at seven of the
nine interviews—all occurring between November 27, 2012 and February 12,
2013. At those seven interviews, only the prosecutors took notes. And three
times, no one took notes at all.

The Government did not create official

interview memoranda, FBI Form 302s, until after Colorado was convicted in
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his first trial. And within a month of Colorado’s Rule 33 motion being denied,
and nearly eight months after the first interview, FBI Agent Lawson began to
create official interview memoranda for each of the meetings. Presumably
working from prosecutor notes—and where there were no notes, from distant
memory—Lawson generated 41 pages detailing Nayen’s statements at the
meetings that had occurred half a year earlier. This was not normal; the same
agent, working on the same case, and dealing with the same witness quickly
generated interview memoranda for the two meetings not attended by the
prosecutors.

Likewise, interviews of other witnesses throughout the

investigation, including interviews by Lawson, were quickly memorialized into
302s. And for his interviews with other witnesses, Lawson noted his presence
in the 302s, but for Nayen’s interviews, Lawson failed to note that he was
present.
After his first conviction, Colorado still did not get access to Nayen’s
statements. At his first sentencing hearing, however, the Government called
Lawson to testify. During his testimony, Lawson referred to statements made
by Nayen in the investigation—attributing them to a confidential informant.
In response, Colorado asked to view the interview memoranda. But, when it
appeared that the court might give the documents to the defense, the
Government disclaimed any reliance on Nayen’s testimony and asked that the
documents not be turned over.
At that point it appeared that Nayen’s statements would never be
disclosed. But we reversed Colorado’s first conviction because of an
instructional error. United States v. Cessa, 785 F.3d 165, 170 (5th Cir. 2015)
(“Cessa I”). And when the Government retried Colorado it decided to call
Nayen to testify. Nonetheless, the Government did not disclose any of the 41
pages of Nayen’s statements to the defense, disclosing instead, only the formal
interview memoranda—and not the underlying notes—in camera, to the
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district court. Following Nayen’s direct examination, the district court ruled
that nothing contained in the 302s was favorable to the defense.

As we

explained in Cessa II, the district court should have ordered disclosure because
the 302s contained favorable exculpatory evidence. See Cessa II, 861 F.3d at
129. The Government compounded the error by saying nothing as Nayen
testified inconsistently with the 302s during cross examination. Id. at 131–34.
The jury convicted Colorado at his second trial.
Even after the second conviction, the Government opposed Colorado’s
effort to view the favorable statements in Nayen’s 302s. On appeal, Colorado
argued that by failing to turn over the 302s, the Government violated its Brady
obligations. To make the argument, Colorado requested the 302s, although the
defense recognized that a protective order or redactions may have been
necessary to protect the Government’s interests in the 302s.

Without

explanation and without request for a protective order, the Government
opposed. We granted Colorado permission to view the 302s.
Finally with the benefit of the 302s, Colorado argued that the district
court erred in finding that the documents were not favorable to him. We
agreed, and remanded to the district court to determine whether the
information contained in the 302s was suppressed and material. Cessa II, 861
F.3d at 143. At the district court, the Government augmented its in-camera
disclosure by providing the district court with the prosecutor notes
corresponding to the 302s, as well as prosecutor notes from meetings with
Nayen after the first trial (for which no 302s were made). With respect to the
prosecutor notes for which no 302s were made, the district court held that the
notes constituted “non-discoverable, attorney work-product” under the Jencks

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Act and declined to consider them. 1

For the notes the district court did

consider, it held that Nayen’s statements in his interviews were not material
under Brady, and therefore, Colorado’s conviction could stand.
II
“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.’” United States v. Brown, 650 F.3d 581, 588 (5th Cir. 2011)
(quoting United States v. Bagley, 473 U.S. 667, 682 (1985)). ‘“A reasonable
probability of a different result’ is one in which the suppressed evidence
‘undermines confidence in the outcome of the trial.’” Turner v. United States,
137 S. Ct. 1885, 1893 (2017) (quoting Kyles v. Whitley, 514 U.S. 419, 434
(1995)). “Consequently, the issue before us here is legally simple but factually
complex.” Id. “We must examine the trial record, ‘evaluat[e]’ the withheld
evidence ‘in the context of the entire record,’ and determine in light of that
examination whether ‘there is a reasonable probability that, had the evidence
been disclosed, the result of the proceeding would have been different.’” Id.
(quoting United States v. Agurs, 427 U.S. 97, 112 (1976); Cone v. Bell, 556 U.S.
449, 470 (2009)).
Because the district court reviewed the alleged Brady material in camera
and determined that it was not discoverable, we review for clear error. Brown,
We nonetheless have reviewed the prosecutor notes for which no 302s were made,
and we find no error in the Government’s failure to disclose them to the defense. We likewise
have reviewed the additional notes found belatedly by the Government and given to defense
counsel and the district court on September 6, 2017. For these notes, too, we find no error in
the Government’s failure to disclose them earlier to the defense.
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650 F.3d at 589. “The district court’s finding is clearly erroneous if, on the
entire evidence, we are 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)).
III
As we explained in Cessa II, “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.” Cessa II, 861 F.3d at 129. Put differently, “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.” Id. at 130. Colorado argues that the
Brady material contains three categories of evidence that would have
materially advanced his defense theory, or at least impeached Nayen’s
testimony: (1) statements that Colorado feared the Zetas, (2) Nayen not
disclosing payments flowing from the Zetas to Colorado and back to the Zetas
until his seventh interview, and (3) a statement that Colorado gave horses to
the Zetas as a gift. We hold that the district court did not clearly err when it
found that none of the favorable statements were material.
First, the district court did not clearly err in concluding that Nayen’s
statements indicating that Colorado feared the Zetas were immaterial. In the
interviews, Nayen describes a meeting between Colorado and Zeta 40 (the
leader of the Zetas in Veracruz) in 2007. Some background is useful. In March
2007, Zeta 40 killed Zeta 14 (then the leader of the Zetas in Veracruz). After
Zeta 14’s death, Zeta 40 was put in charge of the Zeta’s Veracruz operation.
Soon thereafter, Zeta 40 called Colorado, Nayen, and Tavo—all friends of Zeta
14—to meet with him in Tampico. In the interviews, Nayen described the
Tampico meeting. At the meeting, Colorado greeted Zeta 40, saying “hey
friend.”

Zeta 40 responded that Colorado “was not his friend.”
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Nayen

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explained that after the meeting, Colorado was “in a constant state of anxiety”
and that Zeta 40 “always wanted to kill” Colorado. Colorado now claims that
he could have used Nayen’s statements to (1) directly show that he gave horses
to the Zetas out of fear and (2) impeach Nayen’s testimony that Colorado was
friends with the Zetas. The district court did not clearly err in rejecting the
argument.
Nayen’s trial testimony amply explained that Colorado feared Zeta 40 at
the time of the Tampico meeting. See Rocha v. Thaler, 619 F.3d 387, 396 (5th
Cir. 2010) (cumulative Brady evidence is not material). Nayen explained that
he and Colorado fled from Mexico to the United States after Zeta 14 was killed.
However, Nayen testified that they were called back to meet with Zeta 40, and
that they felt that they could not “say no” to the meeting. Nayen explained
that at the meeting, Colorado’s business partner Tavo was killed, and that
Nayen would have been killed had he attended because Zeta 40 did not trust
Zeta 14’s friends. Finally, Nayen explained that prior to the Tampico meeting
Zeta 40 was killing all of Zeta 14’s friends.

Because Nayen extensively

explained Colorado’s reason to fear Zeta 40 at trial, the additional statements
from the interviews were not material. See Spence v. Johnson, 80 F.3d 989,
995 (5th Cir. 1996) (“[W]hen the undisclosed evidence is merely cumulative of
other evidence, no Brady violation occurs.”). Moreover, even if the statements
had minimal substantive value, the Government put forward overwhelming
evidence at trial that Colorado became friends with Zeta 40 sometime after the
Tampico meeting. See id. (“[W]hen the testimony of a witness who might have
been impeached is strongly corroborated by additional evidence supporting a
guilty verdict, the undisclosed evidence is generally not found to be material.”
(quoting Wilson v. Whitley, 28 F.3d 433, 439 (5th Cir. 1994)). For example,
Nayen testified that Zeta 40 and Colorado shared the head of the table at an
event in 2008, Zeta 40 began giving Colorado money in 2009, and Zeta 40 gifted
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Colorado a symbolic gun in 2011. Numerous other witnesses corroborated that
Colorado and Zeta 40 appeared friendly after the Tampico meeting.
Consequently, even accepting that the statements from the interviews would
have allowed Colorado to show that he feared Zeta 40 in 2007, overwhelming
evidence demonstrated that his fear subsequently dissipated as he and Zeta 40
became friends after 2007. And because Zeta 40 began giving Colorado money
in 2009, the nature of their relationship after 2007 was far more important
than the nature of their relationship as described in the favorable statements
from the interviews.
Second, confronting Nayen with his failure to raise the cash deliveries
until his seventh interview would not have been material because Colorado
actually confronted Nayen about his failure to disclose the cash deliveries in
his early interviews. See United States v. Bernard, 762 F.3d 467, 480 (5th Cir.
2014) (impeachment evidence not material where the witness was already
impeached on the same issue). During cross examination Nayen admitted that
he did not raise the cash deliveries during his first two interviews with the
Government. And in closing, defense counsel impeached Nayen by noting that
he failed to initially disclose the cash deliveries. Because Nayen was already
forced to explain to the jury his failure to raise the cash deliveries early in his
proffer, there would have been little, if any, additional value in showing that
Nayen failed to raise the cash deliveries until his seventh interview especially
because the Government put forward significant evidence that Colorado had
received Zeta money and used that money to purchase horses for the Zetas.
Third, we see no clear error in the district court’s finding that Nayen’s
statement that Colorado “only gave horses” to the Zetas “as a gift” was
immaterial. The Government presented overwhelming evidence that Colorado
bought horses for the Zetas using Zeta money. The gift comment, at best,
ambiguously refutes the Government’s allegation that Colorado used Zeta
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money to purchase horses for the Zetas. In context, what Nayen said in the
interviews is that Colorado would give horses to the Zetas and “say it is a gift.”
Nayen’s statement explains how Colorado described the horses he gave to the
Zetas, but it does not explain the provenance of the funds Colorado used to
purchase the horses. And without that explanation, the gift statement would
not been useful in refuting the Government’s significant evidence that
Colorado used Zeta money to buy horses. In any event, proving that Colorado
used his own money to buy horses for the Zetas was not a significant issue at
trial because Colorado could have been convicted of joining the money
laundering conspiracy even if he used his own money. Cessa I, 785 F.3d at 182;
see also United States v. Sipe, 388 F.3d 471, 490 (5th Cir 2004) (evidence more
likely to be material if it goes to the “heart of the government’s case”). Instead,
the Government could prove that Colorado gave horses to the Zetas knowing
that the purpose of doing so was to conceal the source or nature of illegal drug
proceeds. Cessa I, 785 F.3d at 182. And the Government presented significant
evidence that Colorado knew that the Zetas used his horse purchases to hide
drug money; for example, the Government demonstrated that Colorado closely
associated with the Zetas, knew the source of the Zetas’ money, accepted money
from members of the Zetas to care for horses held in Colorado’s name, and paid
for his horses in a surreptitious and suspicious manner.
Of course, we cannot examine the alleged Brady evidence in isolation;
instead, “the question we must address is whether the ‘cumulative effect of all
such evidence suppressed by the government . . . raises a reasonable
probability that its disclosure would have produced a different result.’” Sipe,
388 F.3d at 491 (quoting Kyles, 514 U.S. at 421–22). But even viewing the
evidence cumulatively, we cannot say that the district court clearly erred in
concluding that the suppressed evidence was not material. Accordingly, we
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conclude that Colorado has failed to show a Brady violation, and we affirm his
conviction.
IV
In Cessa II, we also declined to address Colorado’s argument that there
was insufficient evidence supporting the district court’s forfeiture order and
money judgment because both depended on a valid conviction. We now affirm
both.
An individual convicted of money laundering under § 1956 must “forfeit
to the United States any property, real or personal, involved in such offense,
or any property traceable to such property.” 18 U.S.C. § 982(a)(1).

A

“statutorily-prescribed forfeiture is warranted upon a showing of a
preponderance of the evidence.” United States v. Gasanova, 332 F.3d 297, 301
(5th Cir. 2003). Property “involved in” an offense “includes the money or other
property being laundered (the corpus), any commissions or fees paid to the
launderer, and any property used to facilitate the laundering offense.” United
States v. Tencer, 107 F.3d 1120, 1134 (5th Cir. 1997). “Facilitation occurs when
the property makes the prohibited conduct ‘less difficult or more or less free
from obstruction or hindrance.’” Id. (quoting United States v. Schifferli, 895
F.2d 987, 990 (4th Cir. 1990)).
The forfeiture order was supported by sufficient evidence. First, the
Government demonstrated that the forfeited bank accounts were used to
facilitate money laundering. The Government introduced extensive evidence
demonstrating that Colorado comingled Zeta drug money in his otherwise
legitimate accounts. And the Government demonstrated that the purpose of
the comingling was to facilitate the money laundering offense. Second, the
Government demonstrated that both the King Air aircraft and the Hawker
aircraft were used to facilitate the money laundering scheme. Likewise, the
money judgment was supported by sufficient evidence. The district court held
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that Colorado was jointly and severally liable for the $60 million money
judgment imposed on his co-conspirators after the first trial. We agree that
sufficient evidence supported the money judgment. Accordingly, we affirm the
forfeiture order and money judgment.
V
We have expressed concerns about the Government’s handling of the
Brady material in this case. The “better course is to take care to disclose any
evidence favorable to the defendant.” Turner, 137 S. Ct. at 1893 (quoting
Agurs, 427 U.S. at 108). When the Government fails to take this “better
course,” it risks that its convictions will be overturned. Berger v. United States,
295 U.S. 78, 88–89 (1935). And the damage is greater than any individual
outcome because the Government is privileged to be “the representative not of
an ordinary party to a controversy, but of a sovereignty whose obligation to
govern impartially is as compelling as its obligation to govern at all; and whose
interest, therefore, in a criminal prosecution is not that it shall win a case, but
that justice shall be done.” Id. at 88. The appearance of fairness is critical to
a working justice system. “Justice must not only be done; it must be seen to be
done. The interest of justice requires more than a proceeding that reaches an
objectively accurate result; trial by ordeal might by sheer chance accomplish
that. It requires a proceeding that, by its obvious fairness, helps to justify
itself.” United States v. McDaniels, 379 F. Supp. 1243, 1249 (E.D. La. 1974)
(Rubin, J.).
We affirm.

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