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United States v. Baptiste

United States Court of Appeals, Eleventh Circuit

August 28, 2019

UNITED STATES OF AMERICA, Plaintiff - Appellee,
v.
JUNIOR JEAN BAPTISTE, Defendant-Appellant.

          Appeals from the United States District Court for the Southern District of Florida D.C. Docket No. 1:15-cr-20777-JEM-1

          Before WILLIAM PRYOR, NEWSOM, and BRANCH, Circuit Judges.

          NEWSOM, CIRCUIT JUDGE.

         Jean Junior Baptiste was a businessman. In addition to a portfolio of media and entertainment companies, Baptiste owned and operated Surveillance Master CCTV. Surveillance Master installed security cameras, repaired computers, and- one of these things is not like the others-cashed checks. In 2016, a jury found that Baptiste had taken part in an $11 million scheme that involved cashing tax-refund checks that he had fraudulently obtained in the names of inmates, minors, dead people, and other insentient or otherwise unsuspecting "clients." Baptiste now appeals his conviction and 212-month sentence.

         Although Baptiste raises a number of issues on appeal, we focus primarily on two questions related to the hearsay testimony of a government witness. The abridged version of the story: Francesse Chery was one of Baptiste's key witnesses. The government countered with her brother, Anael Chery, who testified (among other things) that Francesse had told him that, in exchange for her (false) testimony supporting Baptiste's narrative, Baptiste would give her a Mercedes. Baptiste argues that Anael's testimony was inadmissible hearsay and that the district court's error in allowing the jury to hear it tainted both his conviction and his sentence.

         Baptiste's challenge presents two questions. First, was Anael's testimony indeed inadmissible hearsay? The district court admitted the testimony pursuant to the statement-against-interest exception to the general prohibition on hearsay evidence, and on appeal the government has offered a smattering of additional theories of admissibility. We conclude that we needn't decide whether Anael's testimony was inadmissible hearsay because even if the district court did err in allowing it, the error was harmless. There was more than enough compelling-and undoubtedly admissible-evidence to support Baptiste's conviction.

         Second, and (sort of) relatedly, did the district court err in relying on Anael's testimony when it imposed a sentencing enhancement for obstructing justice? If you're saying, "Didn't they just say they weren't going to decide whether the testimony was admissible?"-we hear you. As it turns out, though, thanks to a doctrine called (somewhat oxymoronically) "reliable hearsay" we can answer the second question without deciding the first. Under the reliable-hearsay doctrine, so long as certain preconditions are met, a sentencing court can rely on evidence that would be off-limits in the guilt phase. For Baptiste, this means that even if Anael's description of his sister's supposed deal was inadmissible hearsay (and we aren't saying either way) the district court might not have erred in relying on that testimony for the obstruction enhancement-again, so long as the preconditions are met.

         So, what are they? Well, our case law has arguably sent mixed signals about that. There is, though, a synthesis. We hold (and clarify) today that the Sentencing Guidelines permit use of hearsay testimony so long as the overall record provides "sufficient indicia of reliability"-and we conclude that the indicia of reliability here are sufficient.

         Accordingly-and because we find that none of Baptiste's other arguments has merit-we affirm Baptiste's conviction and, with one asterisk, his sentence. The asterisk? Pursuant to the parties' joint request, we remand the case to the district court for the limited purpose of allowing Baptiste to allocute, a right that he was denied at sentencing.

         I

         During Baptiste's trial, two cooperating witnesses, Andy Louissaint and Karl Moltimer, described the tax-refund scheme. Baptiste would first provide tax preparers such as Louissaint and Moltimer with a list of individuals-many of them young, incarcerated, dead, or otherwise unlikely to discover the use of their identities-along with accompanying personal information such as birthdates and social security numbers. The tax preparers used that information to (fraudulently) obtain refund checks from the IRS, which they then brought to Baptiste's Surveillance Master for cashing.

         Baptiste contracted with a third party to process the checks. He would fabricate the necessary documents-work permits, passports, green cards, driver's licenses-to avoid raising red flags. Baptiste and the tax preparers would divide the proceeds, with Baptiste often taking a cut of between 25% and 50%. Not bad, given that typical check-cashing fees range from 1.5% to 3%.

         When the IRS reviewed Surveillance Master's records in conjunction with a routine inspection, an agent noticed that several refund checks were for identical (or nearly identical) amounts. During a subsequent investigation, the IRS obtained copies of identification documents, Treasury checks, and lists containing personal information for both the quick and the dead. Customs and Immigration Services conducted an evaluation of approximately 630 permanent-resident and employment-authorization cards that Baptiste had used to verify the checks; all but one-belonging to Baptiste's wife-were fraudulent.

         The ensuing indictment charged Baptiste with money laundering, conspiracy to commit money laundering, possession of false identification documents with unlawful intent, theft of government money, and aggravated identity theft. At trial, Baptiste's story was that he was an unwitting participant in a broader scheme concocted by a now-dead business partner, Marvin Pagnon. Pagnon's ex-girlfriend, the aforementioned Francesse Chery, echoed Baptiste's account in her testimony and explained how Pagnon operated. In particular, she explained that because Pagnon had poor credit, he would ask would-be associates such as Baptiste to partner with him. Pagnon, she said, laid out a collaboration that was straightforward and above board: Pagnon would obtain (real) refund checks from tax preparers; Baptiste would cash whatever Pagnon handed him. Baptiste signed up, and he seems to have been well compensated for his efforts. During the scheme, Baptiste purchased a Mercedes Benz CL 63, a Mercedes Benz E Class, a Range Rover, and-again, one of these things is not like the others-a $345, 000 share in a 200-foot long cargo ship.

         The government painted a different picture. Moltimer and Louissaint both testified, for instance, that Pagnon played no role in Baptiste's check-cashing operation. Louissaint added that when Baptiste first became aware that an indictment could be coming down the pike, he had told Louissaint that he planned to "basically blame everything on Marvin [Pagnon]." The government also offered testimony from Francesse Chery's brother, Anael. Anael first opined, as a general matter, that his sister just wasn't a very truthful person. He went on to testify, much more specifically, that Francesse had told him that Baptiste was going to give her a Mercedes CLA 45 so long as she "h[e]ld up her end of the bargain" by backing Baptiste's it-was-all-Pagnon's-idea narrative. Baptiste objected that Anael's testimony-relaying what his sister had allegedly told him-was inadmissible hearsay. The district court ultimately admitted Anael's statement, citing the statement-against-interest exception to the general prohibition on hearsay evidence. See Fed. R. Evid. 804(b)(3).

         The jury convicted Baptiste on all counts. At sentencing, the district court applied enhancements for the amount of money that Baptiste had fraudulently obtained from the government (exceeding $11 million), for the number of victims (perhaps hundreds), for the victims' vulnerable status (many incapacitated in some form or fashion), and for obstructing justice (for the perjury-for-a-Mercedes deal with Francesse). The district court sentenced Baptiste to 212 months' imprisonment and restitution of more than $11 million.[1] This is Baptiste's appeal.

         II

         As already noted, our focus here will be the related contentions that the district court (1) abused its discretion by admitting Anael's hearsay testimony as evidence against Baptiste and (2) violated the Sentencing Guidelines by imposing an obstruction-based enhancement that relied on the same. Before getting there, though, we'll address a few other guilt-phase matters-namely, whether the district court erroneously refused to admit Rule 404(b) evidence, whether the government failed to reveal (alleged) deals with its witnesses, and whether the prosecutor made improper statements to the jury during his closing argument. Then, after dealing with the Anael-related issues, which span the trial and sentencing phases, we'll conclude with a few additional, sentencing-specific arguments-namely, that the district court erred in increasing Baptiste's sentence due to the amount of money that the government lost as well as the number and vulnerability of the scheme's victims, as well as in declining to permit Baptiste to allocute personally.

         A

         1

         During the trial, the district court refused to allow Baptiste to put on evidence that Marvin Pagnon had duped others into participating in similar schemes. On appeal, Baptiste contends that, in so doing, the district court misapplied Federal Rule of Evidence 404(b), which states, in relevant part-

(1) Prohibited Uses. Evidence of a crime, wrong, or other act is not admissible to prove a person's character in order to show that on a particular occasion the person acted in accordance with the character.
(2) Permitted Uses; Notice in a Criminal Case. This evidence may be admissible for another purpose, such as proving motive, opportunity, intent, preparation, plan, knowledge, identity, absence of mistake, or lack of accident.

Fed. R. Evid. 404(b). In particular, Baptiste argues that his evidence would have demonstrated only Pagnon's capacity to implement his scheme-he had done so before, and so could do so again-rather than Pagnon's character or propensity more generally, and was therefore admissible as "reverse" 404(b) evidence-i.e., bad-acts evidence that "tends to negate the defendant's guilt of the crime charged against him." United States v. Seals, 419 F.3d 600, 606 (7th Cir. 2005); see also, e.g., United States v. Cohen, 888 F.2d 770, 776 (11th Cir. 1989) (admitting ...


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