The opinion of the court was delivered by: Judge Joan B. Gottschall
MEMORANDUM OPINION & ORDER
During trial, the government introduced evidence of Hector Uriarte's ("Uriarte's") expenditures as evidence of his participation in a drug and racketeering conspiracy which spanned 1996-2009. The court admitted the evidence over Uriarte's objection based on the government's representations that it would present tax returns to show that Uriarte's wealth was not derived from legitimate means. (Tr. 3784-85, 3852-53.) However, the government never presented the tax returns.
Uriarte was found guilty by a jury of counts 1, 4, 5, 7, 8, 10, 11, 12 and 13 of the Third Superseding Indictment. He moved for a judgment of acquittal or a new trial on numerous grounds. The court denied Uriarte's motions, reserving ruling on the issue of unexplained wealth and ordering supplemental briefing. (Minute Entry as to Hector Uriarte entered October 26, 2012 at 2, ECF No. 1061.) Uriarte objects to both the admission of the evidence and the government's discussion of that evidence in closing statements. Now having received briefing on the issue of unexplained wealth, the court denies Uriarte's motions.
The government presented considerable evidence of Uriarte's
expenditures during the period of the conspiracy. By way of example,
the government presented evidence that Uriarte loaned Gary and David
Martin at least $150,000 in March 2007, of which at least $50,000 was
cash. (Tr. 4061, 4076, 4083-84, 4087.) Uriarte purchased three new
luxury cars in 2007. In August 2007, he purchased a $100,000 2008
Mercedes Benz CL Class, by putting $9,000 down, trading in a 2007
Mercedes Benz S55, and obtaining financing of just over $60,000. (Tr.
3975-76.) In December 2007, he purchased a $62,777 2008 Cadillac
Escalade, putting $11,000 down and obtaining financing of just over
$50,000. (Tr. 3979.) Also in 2007, Uriarte had Roberto Cortez buy a
$65,915 Land Rover in Cortez's name, but Uriarte provided the $20,000
cash down payment, and Cortez understood that Uriarte was going to pay
the $1,030.14 monthly payments. (Tr. 4045-49.) Around 2004, Uriarte
also invested $100,000 in Platinum Motors. (Tr. 2833-34.)*fn1
Andres Flores, when asked why Uriarte invested in Platinum
Motors, testified that around 2006 Uriarte told him "[h]e wanted a
legit business where he could be able to use -- as a way to purchase
and tell people he had a job, a legitimate one." (Tr. 2091-92.) There
was uncontroverted evidence that Uriarte did not work at Platinum
Motors, at least through late 2005. (Tr. 2833-37, 2842, 2848-49.)
Uriarte made the monthly payments on at least two of the above cars. The record reflects that he made timely $1,245.39 payments on the Mercedes in 2007 and 2008 until May 2008, when he paid off the balance. (Tr. 3976-78.) In 2008, he also made payments on the Cadillac, generally over $1,000 each. (Tr. 3981.) The record is silent as to whether he was also making timely payments on the Land Rover. (Tr. 3975-80.)
In opening statement, Uriarte's counsel stated that the evidence would show that Uriarte worked as a roofer and started a landscape business. (Tr. 63, 65.) There was never any proof of either of these jobs, or indeed of any other lawful employment. Instead, the government proved that Uriarte had repeatedly fabricated evidence of legitimate employment.
From 2005-2007, Uriarte applied for a mortgage, a refinancing of that mortgage, and two car loans. These documents contain inconsistent and false information about Uriarte's income. In the first mortgage application in April 2005, Uriarte claimed to be an owner of Platinum Motors, earning $15,000 per month. (Tr. 4054.) In the March 2006 refinancing documents, he claimed to have been a manager of Platinum Motors for three years. (Tr. 4056-57). To check his employment, the bank made a phone call to Jose Martinez and received a verbal verification that Uriarte had worked for Platinum Motors for five years. (Tr. 4057-58). In the August 2007 application to finance the Mercedes, Uriarte stated that he had been employed at Platinum Motors for five years, earning a gross salary of $10,416 a month. (Tr. 3977.) In the December 2007 application to finance the Cadillac, he listed himself as being employed as a broker by Tripp Lynns Investments for the past two years, with an income of $120,000 (whether this is monthly or yearly is not clear from the transcript). (Tr. 3979-80.) There is no other evidence that Uriarte worked at Tripp Lynns Investments.
During the time period following upon Uriarte's investment in Platinum Motors, Roy Corral, the owner of Platinum Motors, paid Uriarte by check. (Tr. 2837, 2849.) The checks included a percentage on the cars sold and a minimal amount per pay period that Corral and Uriarte agreed upon. Id. Eventually Uriarte convinced Corral to pay him with payroll checks, despite the fact that Corral testified that Uriarte did not work at Platinum Motors. (Tr. 2833-4.) The payroll checks started by 2004 and continued at least into mid-2005. (Tr. 2836-37.) The precise dates and amounts paid over that time are not clear from the transcript; however, the jury had copies of the payroll checks because they were admitted as an exhibit. Id.
The Seventh Circuit has laid out a test for whether evidence of unexplained wealth is probative and admissible in drug cases, requiring that each of these elements be met:
(1) the evidence presented creates an inference that the defendant was involved in drug trafficking; (2) the unexplained wealth was acquired during the period in which the drug crime allegedly occurred; and (3) the government presents other evidence to support the charge, including evidence that the income was not obtained through legitimate means.
United States v. Carrera, 259 F.3d 818, 829 (7th Cir. 2001) citing United States v. Penny, 60 F.3d 1257, 1263 (7th Cir. 1995). With respect to the third part of the test, Carrera requires only that the government present "some evidence that the unexplained wealth was not ...