USA v. Francisco Aletto, Sr.

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
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No. 15-10309
Non-Argument Calendar
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D.C. Docket No. 9:14-cr-80014-RLR-5
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
FRANCISCO ALETTO, SR.,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(March 11, 2016)
Before HULL, MARCUS, and ROSENBAUM, Circuit Judges.
PER CURIAM:
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After a jury trial, Francisco Aletto was convicted of one count of making an
extortionate extension of credit, in violation of 18 U.S.C. § 892(a), and one count
of using extortionate means to collect and attempt to collect extensions of credit, in
violation of 18 U.S.C. § 894(a). Aletto challenges his convictions on two main
grounds. First, Aletto contends that the evidence was insufficient to show that he
made extensions of credits or that he used extortionate means. Second, he argues
that the district court violated his right to conflict-free counsel by allowing him to
waive the conflict of interest without informing him that he could obtain the advice
of independent counsel. After careful review, we find that sufficient evidence
supports Aletto’s convictions and that he knowingly and intelligently waived his
right to conflict-free counsel. Therefore, we affirm.
I.
In a superseding indictment, a federal grand jury charged Aletto with one
count of knowingly and intentionally making an extortionate extension of credit on
or about August 7, 2010, in violation of 18 U.S.C. § 892(a) (“Count 1”), and one
count of knowingly and intentionally participating, along with several
codefendants, in the use of extortionate means to collect and attempt to collect
extensions of credit, in violation of 18 U.S.C. § 894(a)(1) (“Count 3”). Aletto pled
not guilty and proceeded to trial. Most of his codefendants pled guilty.
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At trial, the government’s evidence consisted primarily of testimony from
the victim, Eduardo Virguetti, and his daughter. This evidence, in the light most
favorable to the government, showed that Virguetti, a Bolivian national living in
the United States without authorization, and his daughter, a legal resident, owned a
gas station in Boca Raton, Florida.1 Virguetti needed money to buy inventory for
his store. Unable to obtain a loan from a bank, Virguetti went to a pawn shop
owned by Aletto to try to pawn a necklace.
At the pawn shop, Virguetti met Aletto, who, after hearing Virguetti’s story,
offered to give him $10,000 in cash with no collateral at an interest rate of 15% per
month. Virguetti accepted and agreed to make weekly interest payments of $375
each Saturday at the pawn shop. Shortly thereafter, Aletto proposed entering into a
partnership with Virguetti. Virguetti declined the partnership offer, prompting
Aletto to demand collateral for the $10,000.
Over time, Aletto introduced Virguetti to three associates, named as
codefendants in the superseding indictment, from whom Virguetti borrowed a total
of $30,000 on the same terms as his original agreement with Aletto (weekly
interest payments of $375 per $10,000). It was often confusing to Virguetti, and
even the creditors, to whom he owed money, as Aletto generally collected the
weekly payments, and the creditors would transfer Virguetti’s debts to each other.
1 In reviewing a sufficiency challenge, we construe the facts in the light most favorable to
the conviction. See United States v. Howard, 742 F.3d 1334, 1338 (11th Cir. 2014).
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When Virguetti needed money on a short-term basis, he borrowed smaller
amounts from Aletto, typically between $1,000 and $3,000, for a fee. Virguetti
would borrow the money in the morning, and Aletto expected to be paid back by
the end of the business day. One day in July 2010, Virguetti was unable to repay
Aletto the same day and told him so. Aletto angrily demanded his money from
Virguetti. When Virguetti asked what would happen if he did not repay the
money, Aletto responded that he would kill Virguetti.
On or about August 7, 2010, Aletto personally loaned Virguetti another
$10,000 in cash at a weekly interest rate of 2% (the offense conduct charged in
Count 1).2 This transaction was memorialized in a promissory note, signed by
Virguetti, which stated that the money was to be repaid in 60 days.
Eventually, Virguetti began to have trouble making interest payments on
time. This, in turn, caused Aletto and his codefendants to make veiled or explicit
threats to Virguetti and his daughter. For example, Virguetti’s daughter testified
that, on one occasion, Aletto came to the gas station looking for Virguetti, who was
not there, and he demanded that Virguetti pay back the principal he owed.
Virguetti’s daughter argued that they had paid Aletto enough. Aletto then
mimicked a gun with his hand and pointed it at his head while stating that he
2 It appears that the money was actually given on July 31, 2010, and the promissory note
was signed later. Regardless, both parties generally refer to this transaction as occurring on
August 7, 2010, so for the sake of consistency we do as well.
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would shoot Virguetti in the head if they did not repay Aletto. Another time, one
of the codefendants showed Virguetti a gun when attempting to collect a debt.
At some point late in 2010, the Federal Bureau of Investigation (“FBI”)
began an investigation into whether Virguetti was being extorted. When
questioned by FBI agents, Aletto described the original $10,000 he gave to
Virguetti as a “bad loan.” In the context of the interview, the FBI agent understood
Aletto to mean it was a loan-shark loan.
The jury returned a verdict finding Aletto guilty of both Counts 1 and 3.
The district court sentenced Aletto to a total term of 24 months in prison. Aletto
now appeals.
II.
We review de novo the sufficiency of the evidence to support a conviction.
United States v. Howard, 742 F.3d 1334, 1341 (11th Cir. 2014). We view the
evidence presented at trial, and draw all reasonable inferences therefrom, in the
light most favorable to the verdict. United States v. Sterling, 738 F.3d 228, 234
(11th Cir. 2013). We will not disturb a guilty verdict unless no reasonable trier of
fact could have found that the evidence establishes the defendant’s guilt beyond a
reasonable doubt. Howard, 742 F.3d at 1341. “We do not second guess the jury’s
determination of credibility issues. Nor will we reverse a conviction simply
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because the defendant put forth a reasonable hypothesis of innocence at trial.” Id.
at 1342 (citations and internal quotation marks omitted).
A.
Section 892(a) of Title 18 of the United States Code prohibits making “any
extortionate extension of credit.” 18 U.S.C. § 892(a). An “extension of credit” is
broadly defined as a loan or “any agreement, tacit or express, to defer the
repayment or satisfaction of any debt or claim.” United States v. Cassano, 132
F.3d 646, 649-50 (11th Cir. 1998); see 18 U.S.C. § 891(1) (“[T]o extend credit
means to make or renew any loan, or to enter into any agreement, tacit or express,
whereby the repayment or satisfaction of any debt or claim, whether acknowledged
or disputed, valid or invalid, and however arising, may or will be deferred.”).
An extension of credit is “extortionate” where “both the creditor and the
debtor understand that default or delinquency in making payments ‘could result in
the use of violence or other criminal means to cause harm to the person, reputation
or property of any person.’” United States v. Nakaladski, 481 F.2d 289, 297 (5th
Cir. 1973) (quoting 18 U.S.C. § 891(6)).3 “The states of mind of the defendant and
the debtor are, therefore, both essential elements of the crime of making
extortionate extensions of credit under § 892.” United States v. Lombardozzi, 491
F.3d 61, 68 (2d Cir. 2007). With respect to the debtor’s state of mind, the
3 This Court adopted as binding precedent all Fifth Circuit decisions prior to October 1,
1981. Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc).
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government must prove that the debtor “actually had such an awareness of the
possible harm that could arise from default or delinquency in repaying the loans.”
Nakaladski, 481 F.2d at 297.
Sufficient evidence supports Aletto’s conviction under § 892(a). First, a
reasonable jury could find that Aletto made an “extension of credit” to Virguetti on
or about August 7, 2010, as charged in Count 1 of the superseding indictment. The
evidence shows that, on or around that date, Aletto loaned Virguetti $10,000 in
cash at 2% weekly interest rate. In a promissory note, Virguetti agreed to repay
Aletto in 60 days. Clearly, this evidence was sufficient to show that this
transaction was either a “loan” or an agreement to defer repayment of Virguetti’s
debt to Aletto. See 18 U.S.C. § 891(1); Cassano, 132 F.3d at 649.
The evidence does not support Aletto’s position that the $10,000 was an
“investment” by a business partner, nor would that characterization be dispositive
in any case. See Cassano, 132 F.3d at 649-50 (recognizing that an “extension of
credit” may arise from deferment of payments on legitimate investments and joint
ventures, in addition to various other debts). Virguetti declined Aletto’s
partnership offer early on. The evidence of their interactions from that point,
including the weekly interest payments, Aletto’s requiring of collateral to secure
repayment of the principal amounts, and Aletto’s own statements that he made a
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“bad loan” to Virguetti, fully supports the inference that Aletto and Virguetti’s
relationship was that of a creditor and debtor.
Second, a reasonable jury could conclude beyond a reasonable doubt that the
August 2010 extension of credit was “extortionate” based on the circumstances
surrounding its making.4 While the government need not necessarily present
evidence of an explicit threat to the debtor, the government did so in this case. See
Lombardozzi, 491 F.3d at 69 (stating that “the victim borrower’s state of mind can
be inferred” and “does not necessarily depend on evidence of explicit threats made
by the creditor”); see also 18 U.S.C. § 891(7) (“extortionate means” include the
“express or implicit threat” of the use of violence or other criminal means).
Less than a month before Aletto made the August 2010 extension of credit,
he explicitly threatened Virguetti with violence when Virguetti was late repaying a
short-term loan. On that date in July 2010, Virguetti met with Aletto to tell him he
could not repay by the end of the day the $2,000 he borrowed that morning. Aletto
became very angry, placed himself inches from Virguetti’s face, and told him,
“You need to pay me my money, now.” Virguetti responded, “If I don’t pay . . .
4 Aletto incorrectly states that a conviction under § 892(a) requires evidence that “the
debtor believed, at the time the credit was extended, that the defendant previously used
extortionate means to collect a debt or had a reputation for doing so.” Aletto’s Initial Br. at 43-
44. That element is part of § 892(b), which provides a specific way for the government to show
that an extension of credit was extortionate, but subsection (b) “is nonexclusive and in no way
limits the effect or applicability of subsection (a).” 18 U.S.C. § 892(b). Likewise, the fact that
the promissory note may have been legally enforceable, as Aletto asserts, is not dispositive of
whether the extension of credit was extortionate. Enforceability is an element of the
nonexclusive showing under § 892(b). See 18 U.S.C. § 892(b)(1).
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you kill me?” Aletto replied, “Yes, I do.” Virguetti testified that he took this
threat seriously and that he was scared of Aletto.
Crediting this testimony, a reasonable jury could conclude that, when Aletto
made the August 2010 extension of credit, which was five times the amount of the
loan that prompted Aletto to threaten Virguetti, the defendant and the debtor both
understood that harmful consequences could result from delinquency or delay in
repaying the loan. See Nakaladski, 481 F.2d at 297-98. The extortionate nature of
the loan is also supported by evidence that Aletto made high-interest, predatory
loans to someone he knew was desperate for money and unlikely to inform
authorities due to his immigration status, that he demanded excessive collateral for
those loans, and that he recruited others to make money from Virguetti and his
family. Aletto essentially contends that Virguetti’s testimony regarding Aletto’s
threat and whether Virguetti took it seriously is not worthy of credence, but we will
not second-guess the jury’s credibility determinations. See Howard, 742 F.3d at
1342. Nor will we reverse Aletto’s conviction simply because he put forth a
reasonable hypothesis of innocence at trial. See id. In short, sufficient evidence
supports Aletto’s § 892(a) conviction.
B.
Section 894(a)(1) prohibits using “any extortionate means” “to collect or
attempt to collect any extension of credit.” 18 U.S.C. § 894(a)(1). Section 891
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defines “extortionate means” as “any means which involves the use, or an express
or implicit threat of use, of violence or other criminal means to cause harm to the
person, reputation, or property of any person.” 18 U.S.C. § 891(7).
Here, the evidence presented was sufficient for a jury to find that Aletto
participated in using threats of violence to collect or attempt to collect an extension
of credit. Aletto contends that the only threats came from his codefendants and
that he is not culpable for their conduct. But even if we limited our inquiry solely
to Aletto, the evidence was more than sufficient to show that Aletto personally
threatened Virguetti and his family with violence in attempting to collect
extensions of credit. First, as mentioned above with respect to Count 1, Aletto
threatened Virguetti when he was late repaying a short-term loan. Second,
Virguetti’s daughter testified that Aletto came to the gas station to collect on
Virguetti’s debt and threatened to shoot Virguetti in the head if the debt was not
repaid. The jury was free to fully credit this testimony and conclude that Aletto
knowingly used means involving the threat of violence to attempt to collect
extensions of credit. 18 U.S.C. §§ 891(7), 894(a); see Howard, 742 F.3d at 1341-
42. Accordingly, we affirm Aletto’s § 894(a) conviction.
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III.
Aletto next argues that the district court erred in not declaring a mistrial
based upon a conflict of interest between Aletto and his trial counsel, Michael J.
Silver.5 Aletto is represented by different counsel on appeal.
During trial, and outside the presence of the jury, Virguetti’s daughter
recognized Silver. The district court questioned Virguetti’s daughter, who stated
that Silver came to the gas station, represented that he was Aletto’s lawyer, and
threatened to “call immigration” on the Virguetti family if the debt to Aletto was
not paid. The government moved for a mistrial because Virguetti’s daughter’s
testimony could make Silver a witness in the case. The district court questioned
Aletto under oath about his rights and the potential conflict, and Aletto stated that
he understood the conflict and wished to proceed with Silver. Ultimately, the
district court denied the government’s motion for a mistrial and prohibited the
government from eliciting any testimony from Virguetti’s daughter about her
belief that Aletto’s attorney threatened her.
The question of whether a defendant waived his counsel’s conflict of interest
is a mixed question of fact and law that we review de novo. See Hamilton v. Ford,
5 We note that Aletto opposed the government’s motion for a mistrial and therefore
arguably invited any error, as the government contends. But given the allegations against
Aletto’s counsel, the possibility counsel may have had conflicting motivations in arguing against
a mistrial, and the fact that we nevertheless conclude that the district court properly found that
Aletto waived the conflict, we do not consider whether Aletto invited error in this case.
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969 F.2d 1006, 1010 (11th Cir. 1992) (analyzing conflict-of-interest claims under
28 U.S.C. § 2254).
An actual conflict of interest that adversely affects a defendant deprives him
of his Sixth Amendment right to effective assistance of counsel. United States v.
Rodriguez, 982 F.2d 474, 477 (11th Cir. 1993). In general, however, a defendant
may waive his right to conflict-free counsel and choose to proceed with conflicted
counsel. Id.; see United States v. Garcia, 517 F.2d 272, 276 (5th Cir. 1972)). An
effective waiver of a constitutional right must be voluntary, knowing, and
intelligent, and it must be “established by clear, unequivocal, and unambiguous
language.” Garcia, 517 F.2d at 276-78 (internal quotation marks omitted). “The
record should show, in some way, that the defendant was aware of the conflict of
interest; realized the conflict could affect the defense; and knew of the right to
obtain other counsel.” Rodriguez, 982 F.2d at 477.
Here, Aletto waived his right to conflict-free counsel. The district court
inquired of Aletto under oath in a manner similar to that used in a plea colloquy.
See Garcia, 517 F.2d at 278 (describing the procedure to obtain a valid waiver).
Aletto’s responses show that he understood the potential conflict and the
consequences of proceeding with Silver—that Silver could not deny that he had
acted improperly. Further, the court informed Aletto that he had the right to
conflict-free counsel and the right to consult with another lawyer before deciding
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whether to proceed with Silver. Following the court’s inquiry, Aletto
unambiguously stated that he voluntarily waived his right to conflict-free counsel
and wished to proceed with Silver. On this record, it is clear that Aletto knowingly
and intelligently waived his right to conflict-free counsel. See Rodriguez, 98 F.2d
at 477.
Nor has Aletto shown that the potential conflict of interest affected him
adversely in any way because the district court prohibited the government from
eliciting testimony about Silver’s actions in allegedly threatening Virguetti’s
daughter. See id.
IV.
For the reasons stated, we affirm Aletto’s convictions.
AFFIRMED.
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