                                                                                                                           Opinions of the United
2007 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


7-17-2007

USA v. Greenidge
Precedential or Non-Precedential: Non-Precedential

Docket No. 05-4887




Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2007

Recommended Citation
"USA v. Greenidge" (2007). 2007 Decisions. Paper 757.
http://digitalcommons.law.villanova.edu/thirdcircuit_2007/757


This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova
University School of Law Digital Repository. It has been accepted for inclusion in 2007 Decisions by an authorized administrator of Villanova
University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu.
                                   NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS
     FOR THE THIRD CIRCUIT



             No. 05-4887



  UNITED STATES OF AMERICA

                  v.

      CARLEEN GREENIDGE,
                     Appellant

  (D.N.J. Criminal No. 03-cr-00253-4)



             No. 05-5083



  UNITED STATES OF AMERICA

                  v.

         MARIO PALLITTA,
                       Appellant

  (D.N.J. Criminal No. 03-cr-00253-3)



             No. 06-2506




                  1
                           UNITED STATES OF AMERICA

                                           v.

                               JOSEPH DIGREGORIO,
                                               Appellant

                          (D.N.J. Criminal No. 03-cr-00253-6)


               Consolidated Appeal from the United States District Court
                             for the District of New Jersey
                 District Judge: Honorable Joseph A. Greenaway, Jr.



                     Submitted Under Third Circuit L.A.R. 34.1(a)
                                   June 29, 2007


               Before: BARRY, FUENTES, and GARTH, Circuit Judges

                             (Opinion Filed: July 17, 2007)



                                       OPINION



GARTH, Circuit Judge:

      Appellants Joseph DiGregorio, Carleen Greenidge, and Mario Pallitta appeal their

convictions and DiGregorio appeals his sentence. We have jurisdiction over the challenges

to the convictions pursuant to 28 U.S.C. § 1291, and over the challenge to the sentence

pursuant to 18 U.S.C. § 3742(a). We will affirm.



                                           2
                                                I.1

       In October 2001, the Federal Bureau of Investigation began an investigation into the

bank deposits of stolen and altered corporate checks and the wire transfers of proceeds from

those checks. The investigation revealed a bank fraud and money laundering conspiracy

involving approximately 20 co-conspirators and a theft of over $5 million.

       The conspiracy involved essentially three tiers. At the top was Melvyn Waldron, a/k/a

“Rankin,” who, along with other co-conspirators, obtained stolen checks from mail rooms

and post offices and arranged for those checks to be altered and deposited into various

accounts and for the proceeds to be withdrawn. Rankin handed the checks off to Samuel

Massaquoi, who served as a liaison between Rankin and Emmanuel Deji, the co-conspirator

who altered the payee names on the checks in exchange for a fee. In the middle tier of the

conspiracy were the “recruiters.” These recruiters solicited “depositors,” people on the

bottom tier of the conspiracy who were willing to use their personal or business bank

accounts to deposit the stolen and altered checks in order to make them appear legitimate.


DiGregorio

       DiGregorio was recruited into this conspiracy by his bookie, John Elsis, who

cooperated with the government and testified at trial. DiGregorio told Elsis that the company

for which he worked, KnowYourStuff.com (“KYS”), was struggling financially. Elsis



       1
        Because we write solely for the parties, who are familiar with the facts of this case, we
recount here only those facts necessary to our analysis.

                                                 3
suggested DiGregorio join this scheme in order to obtain cash for the company, telling

DiGregorio that “you can erase the name of the company and put your company’s name on

the check.” (Pallitta App. 413.) Elsis told DiGregorio that if he recruited a depositor, the

depositor could keep 50% of the proceeds from the check.

       DiGregorio recruited the CEO of KYS, William Nash, at a November 2001 meeting

also attended by Daniel McGowan, head of sales for KYS. DiGregorio told Nash that he

could keep a third of the funds. Nash, who cooperated with the government, testified that

in order to keep KYS afloat, he would need approximately $420,000, and so asked

DiGregorio to obtain a check for approximately $1.4 million. DiGregorio relayed this

request to Rankin, who agreed.

       To explain to KYS’s employees and investors this large infusion of cash, DiGregorio,

McGowan, and Nash invented a business deal with Samsung Electronics and a fictitious third

company, “B & D Systems.” They memorialized the deal in a fake contract, and asked

Rankin to set up a bank account for the phony B & D Systems in order to make a future wire

transfer to that account seem legitimate. Rankin registered the fake business with the state,

and opened a bank account in the name of B & D Systems.

       On November 26, 2001, Rankin and Elsis picked up DiGregorio and Nash and drove

to a Merrill Lynch branch office where KYS maintained a bank account. Rankin had a stolen

check in the amount of $1,401,647.28. The payee’s name had been altered by Deji, and after

examining the check, DiGregorio and Nash commented that it looked “good.” Nash

deposited the check. During the ride back to KYS, Nash told Rankin, in DiGregorio’s

                                             4
presence, that if Rankin gave him his account number, Nash would wire a portion of the

funds to the B & D Systems account.

      DiGregorio informed Elsis when the check cleared. On December 6, 2001, Nash

wired $980,000 from the KYS account to the B & D Systems account. Nash used $260,000

of the proceeds for business expenses, including employee backpay. From this $260,000,

DiGregorio received $10,500 to represent his purported “sales commission” from the phony

Samsung/B & D Systems deal, and another $8,000 in salary and backpay.

      On December 21, 2001, Nash’s Merrill Lynch broker called him to inform him that

the check had been fraudulent. Merrill Lynch froze the remaining $160,000 in the account.

Nash informed DiGregorio and McGowan, and they agreed to continue representing that the

source of the money was a legitimate business deal between Samsung Electronics and B &

D Systems. Nash typed a script and gave DiGregorio and McGowan copies. When

interviewed by members of the United States Attorney’s Office, DiGregorio told this story,

which became the basis of an obstruction of justice enhancement at sentencing.


Greenidge

      Greenidge was recruited by Kenson Gilbert, who cooperated with the government and

testified at trial. In October 2001, Greenidge met with Gilbert and co-conspirator George

Nicholas. At this meeting, Gilbert explained that Rankin would deposit a stolen and altered

check into the account of the moving and storage company Greenidge owned and operated,

Signature Van Lines. Gilbert said that they would split the proceeds of the check, with 50%


                                            5
going to Greenidge and 50% to Rankin. Greenidge agreed to the plan, and Gilbert told her

that she would be instructed how and when to withdraw the money from her business account

in order to avoid suspicion by the bank.

       A few days later, Greenidge met with Gilbert, Nicholas, and Rankin. Greenidge gave

Rankin her business name, business account number at HSBC Bank, and personal

identification number (“PIN”).

       On November 17, 2001, Rankin deposited a stolen check for $253,000.00 into the

Signature Van Lines account. Deji had altered the name of the payee on the check.

       A week later, the check cleared. Greenidge met with Rankin and Gilbert and gave

Rankin an envelope containing several checks from Signature Van Lines. Rankin gave

Greenidge the account number for B & D Systems and told Greenidge to transfer his

remaining share of the proceeds there. On November 30, 2001, Greenidge wire transferred

$68,047.21 from her business account into the B & D Systems account.


Pallitta

       Pallitta, like DiGregorio, was recruited into the conspiracy by Elsis. Pallitta knew

Elsis because Pallitta placed bets with Elsis and Elsis’s bookmaking partner, Joe Bellero. In

November 2001, Elsis and Bellero recruited Pallitta to be a depositor on behalf of Anthony

Dunlock, a construction worker who had been performing work on Elsis’s home. Dunlock

asked Elsis if Elsis could help him “get rid” of some stolen checks. (Pallitta App. 408.)

Elsis approached Bellero, who recruited Pallitta. They decided that Pallitta would earn 50%


                                             6
of the check’s proceeds, while Rankin would keep 40%, and Bellero and Elsis would each

keep 5%.

       Elsis discussed with Pallitta the specifics of the scheme, telling him that the checks

were stolen and that the names of the payees were electronically altered so that the bank

could not detect the fraud, and, on Rankin’s instruction, asked Pallitta how much he would

be willing to deposit into his business account. Pallitta responded that because his account

was frequently overdrawn, he did not want a large check which would arouse the bank’s

suspicion. Pallitta and Elsis agreed that Pallitta would deposit a check for approximately

$130,000.

       On November 26, 2001, Rankin, Elsis, and Pallitta met at an empty dry cleaning

business next door to Amici’s Restaurant, the pizzeria Pallitta owned. Rankin gave Pallitta

a stolen check in the amount of $138,494.30. Deji had altered the name of the check’s payee.

Pallitta examined the check and said that it looked “good.” (Pallitta App. 410.)

       Pallitta provided Rankin with a pre-printed deposit slip for Amici’s Restaurant’s bank

account, and Rankin deposited the check in the bank across the street. When Rankin

returned, Pallitta gave him his business account number, PIN, and the bank’s telephone

number so that Rankin could call to find out when the check cleared.

       Later that day, Pallitta called the assistant bank manager to ask when the funds would

be available for withdrawal. The assistant manager became suspicious because the deposit

was so large compared to the $11.30 account balance and the fact that the account was

frequently overdrawn. She examined the check and noticed that the name of the payee was

                                             7
typed in a slightly larger and darker font than the other print on the check. After showing the

check to the bank manager, the bank put a hold on the account. None of the funds were

withdrawn.


Arrests and Procedural History

       The arrests began with Rankin, in January 2002. The arrests continued in February

(Gilbert and Massaquoi); August (Elsis); and September (DiGregorio, Nash, Pallitta, and

Bellero). In April 2003, Greenidge, Deji, and Dunlock were arrested.

       On October 23, 2003, DiGregorio, Greenidge, and Pallitta were charged in a nine-

count superseding indictment with other defendants including Deji and McGowan. Count

One charged Pallitta, Greenidge, and Deji with conspiracy to commit bank fraud, contrary

to 18 U.S.C. § 1344 and in violation of 18 U.S.C. § 371. Count Six charged Pallitta with

aiding and abetting the crime of bank fraud, in violation of 18 U.S.C. § 1344 and 18 U.S.C.

§ 2. Count Seven charged Pallitta, Greenidge, DiGregorio, and McGowan with conspiracy

to engage in a monetary transaction involving the proceeds of criminally derived property,

contrary to 18 U.S.C. § 1957(a) and in violation of 18 U.S.C. § 1956(h).

       Trial began on January 18, 2005 before the Honorable Joseph A. Greenaway.2 Co-

conspirators Massaquoi, Gilbert, Elsis, and Nash testified for the government at trial. On

March 1, 20005, the jury found DiGregorio, Pallitta, and Greenidge guilty on all applicable


       2
         Judge Greenaway also accepted the guilty pleas of, among others, Rankin, Nash, Elsis,
Gilbert, Bellero, Dunlock, and Massaquoi. These defendants have either not yet been sentenced,
not filed notices of appeal of their sentences, or, in the case of Bellero, died before sentencing.

                                                 8
counts,3 but acquitted McGowan. DiGregorio was sentenced to 41 months of imprisonment;

Pallitta to 30 months; and Greenidge to 33 months. All three defendants appeal their

convictions, and DiGregorio appeals his sentence as well.



                                                 II.

                 A. Variance between the Indictment and the Proof at Trial

       Claiming a variance between the indictment and the proof at trial, all three appellants

challenge their convictions for conspiracy to engage in a monetary transaction involving the

proceeds of criminally derived property (Count Seven), and Greenidge and Pallitta also

challenge their convictions for conspiracy to commit bank fraud (Count One).4 According

to appellants, while the indictment alleged a single conspiracy for each count, the evidence

at most demonstrated separate conspiracies—a conspiracy per appellant per count. They

contend that the District Court erred by finding no variance between the proof and the

indictment and by refusing to give appellants’ proposed jury instruction on whether the

evidence established a single conspiracy or multiple conspiracies.5


       3
        The jury convicted Deji on Counts One through Four, Eight, and Nine. This Court
dismissed Deji’s appeal on August 29, 2006 because he is a fugitive.
       4
        Although Pallitta did not raise this issue in his opening brief, pursuant to Rule 28(i) of
the Federal Rules of Appellate Procedure, in his reply brief he joined the argument made by
Greenidge and DiGregorio on this issue.
       5
        A relevant portion of the proposed jury instruction read:

       Even if the evidence in the case shows that Defendant _________ was a member
       of some conspiracy, but that this conspiracy is not the single conspiracy charged

                                                 9
       This Court will vacate a conviction “where a variance between the indictment and

proof at trial exists to the prejudice of a defendant’s substantial rights.” United States v.

Salmon, 944 F.2d 1106, 1116 (3d Cir. 1991) (citing United States v. Kelly, 892 F.2d 255, 258

(3d Cir. 1989)). The “variance doctrine is intended to prevent a situation in which the jury

might be unable to separate offenders and offenses and easily could transfer the guilt from

one alleged co-scheme to another.” United States v. Barr, 963 F.2d 641, 648 (3d Cir. 1992)

(internal citations and citations omitted).

       We examine alleged variances “on a case-by-case basis.” United States v. Perez, 280

F.3d 318, 346 (3d Cir. 2002). If, viewing the evidence in the light most favorable to the

government, see Barr, 963 F.2d at 648, a rational trier of fact could have concluded from the

proof adduced at trial the existence of the single conspiracy alleged in the indictment, there

was no variance. Furthermore, a district court can properly refuse a defendant’s request for

a jury instruction on single versus multiple conspiracies if there is insufficient evidence to

support such an instruction. See Barr, 963 F.2d at 650.

       In United States v. Kelly, 892 F.2d 255 (3d Cir. 1989), this Court set forth a three-step

test to aid in distinguishing between single and multiple conspiracies.


       First, we examine whether there was a common goal among the conspirators.
       Second, we look at the nature of the scheme to determine whether the
       agreement contemplated bringing to pass a continuous result that will not



       in the indictment, you must acquit Defendant __________ of this charge.

2 Fed. Jury Prac. & Instr. (Crim.) § 31.09 (5th ed.).

                                                 10
       continue without the continuous cooperation of the conspirators. Third, we
       examine the extent to which the participants overlap in the various dealings.

Id. at 259 (citations and internal quotations omitted). The absence of one of these factors

“does not necessarily defeat an inference of the existence of a single conspiracy.” United

States v. Padilla, 982 F.2d 110, 115 (3d Cir. 1992).

       We now turn to the issue of whether, applying the Kelly factors, the jury had a

reasonable basis for finding the existence of a single conspiracy to commit bank fraud (Count

One). There was certainly evidence of a common goal among these co-conspirators: to make

money by depositing stolen and altered corporate checks into business accounts. As to the

whether the “nature of the scheme” indicates a single conspiracy, we look to whether there

was evidence that “the activities of one group . . . were ‘necessary or advantageous to the

success of another aspect of the scheme or to the overall success of the venture.’” Kelly, 892

F.2d at 259 (quoting United States v. DeVarona, 872 F.2d 114, 118 (5th Cir. 1989)). There

was evidence to support this factor as well: the activities of Greenidge and Pallitta as

depositors—including having access to corporate bank accounts and providing Rankin with

account numbers, PINs, and deposit slips—were necessary to the overall success of the

venture. Without a constant supply of willing depositors, the operation would necessarily

have ceased. Finally, there was a great degree of participant overlap in this plan. The checks

Greenidge and Pallitta deposited came from the same source (Rankin), and they were altered

by the same person (Deji) for the same reason (to pass the scrutiny of the banks). They

worked with a network of recruiters, including Gilbert and Elsis, to find depositors, such as


                                             11
Greenidge and Pallitta. Keeping in mind that “the government need not prove that each

defendant knew all the details, goals, or other participants in order to find a single

conspiracy,” Kelly, 892 F.2d at 260 (internal citation omitted), we find that here there was

sufficient evidence to demonstrate a single conspiracy.

       The evidence also supported the jury’s finding of a single conspiracy to engage in a

monetary transaction involving the proceeds of criminally derived property (Count Seven).

The common goal here was to share in the illegal proceeds resulting from the deposit of the

stolen and altered checks. The participants in the deposit of $1.4 million to KYS agreed to

a division of funds, from which DiGregorio received $18,500; Rankin and Greenidge agreed

to split evenly the proceeds from the Signature Van Lines deposit, with Gilbert’s commission

coming from Rankin’s share; and the participants in the Amici’s Restaurant deposit agreed

that Pallitta would receive half of the proceeds, whereas Rankin would keep 40%, and

Bellero and Elsis would each keep 5%. Furthermore, the nature of the scheme indicates a

single conspiracy. For instance, DiGregorio assisted Nash in conceiving of the phony “B &

D Systems” company so that Nash could transfer the funds to a dummy account Rankin

could set up in that name; Greenidge wire transferred $68,047.21 from the Signature Van

Lines account into Rankin’s B & D Systems account six days after the deposited stolen check

cleared; and Pallitta gave Rankin his business account number, PIN, and the bank’s telephone

number so that Rankin could call to find out when the check cleared. Finally, there was a

great degree of participant overlap here as well. For example, all three appellants intended

to split the proceeds with Rankin, and Elsis profited from the transactions involving both

                                            12
DiGregorio and Pallitta.

       Appellants contend that this case is analogous to Kotteakos v. United States, 328 U.S.

750 (1946). That case involved a scheme where one person, Simon Brown, sold his services

in falsifying loan applications on behalf of numerous unrelated applicants. Despite no

evidence of any connection between the loan applicants other than the fact that they had used

Brown to obtain their loans, id. at 755, the indictment charged that the applicants participated

in only a single conspiracy. The Court, analogizing this plan to a rimless wheel, in which

Brown was the hub and the other alleged co-conspirators were unrelated spokes, id. at 755,

found that the variance “affect[ed] the substantial rights of the parties,” id. at 775, and was

reversible error.

       Contrary to appellants’ contention, however, the circumstances here are readily

distinguishable from those in Kotteakos. We agree with the government that this scheme did

not resemble a wheel-hub-spoke conspiracy, but instead could be more accurately depicted

as a pyramidal corporate structure. At the base of the pyramid were the depositors, such as

Pallitta and Greenidge. Above them were the recruiters, including DiGregorio, Elsis, and

Gilbert, who received a finder’s fee for every depositor they recruited who successfully

deposited a stolen and altered check. And at the top, were Rankin, the source of the stolen

checks, Deji, the check alterer, and Massaquoi, their liason. Unlike in Kotteakos, the

depositors did not represent independent customers, but were an integral part of this

“corporate” structure. See Perez, 280 F.3d at 346 (“a finding of a master conspiracy with

sub-schemes does not constitute a finding of multiple, unrelated conspiracies and, therefore,

                                              13
would not create an impermissible variance”) (citation and internal quotations omitted).

       We thus find that the evidence did not demonstrate the existence of “separate

independent networks,” but rather, as the indictment charged, a single conspiracy, and thus

the District Court’s refusal to give a multiple conspiracies jury instruction was proper. Barr,

963 F.2d at 650. Furthermore, “even if a multiple conspiracies charge should have been

given, reversal on appeal is not automatic.” Id. (citation omitted). The convictions cannot

be vacated unless appellants show “both the likelihood of multiple conspiracies having

existed, and substantial prejudice resulting from the failure to give the requested charge.”

Id. (quotation and citation omitted). Appellants have not demonstrated that there was

prejudice here from any “spillover” evidence.6               First of all, the government

compartmentalized its presentation of evidence, presenting evidence as to each defendant

separately. Secondly, the District Court properly charged the jury to consider the evidence

against each defendant separately.7 Most importantly, the fact that the jury acquitted

McGowan is critical proof that the jury was “able to separate the offenders and the offenses.”


       6
       No appellant claims any other type of prejudice, such as unfair notice or the erroneous
admission of co-conspirator statements.
       7
        The District Court instructed:
       Each count and the evidence pertaining to it should be considered separately.
       Also, the case of each defendant should be considered separately and
       individually. The fact that you may find one defendant guilty or not guilty of any
       of the offenses charged should not control your verdict as to any other offense
       charged or any other defendant. And even though I will discuss related charges
       together because they share common legal and factual elements, you must
       consider each count and each defendant separately.

(Pallitta App. 1612.)

                                               14
Id.


                                   B. Evidentiary Rulings

1. The Admission of Pallitta’s Prior Conviction

       Pallitta claims the District Court erred by admitting into evidence a stipulation that

Pallitta had been convicted of theft in 2001. We review for abuse of discretion. See United

States v. Saada, 212 F.3d 210, 220 (3d Cir. 2000).

       The conviction at issue concerned Pallitta’s theft from his employer. As a delivery

person for a liquor distributor, Pallitta made deliveries and accepted payment on behalf of

his employer. Instead of turning those payments over to his employer, however, Pallitta kept

them for himself. On January 2, 2001, he pled guilty in New Jersey state court to theft for

failure to make required disposition of property, a third degree felony.

       Before deciding whether to testify in his own defense, Pallitta moved in limine to

exclude this evidence so that it could not be used to impeach him. He conceded that the theft

conviction was probative of his credibility, but argued that its similarity to the alleged bank

fraud rendered it overly prejudicial, so that it should be excluded under Rule 609(a)(1) of the

Federal Rules of Evidence.8 The District Court disagreed that the offense of stealing from

       8
        Rule 609(a)(1) states:
       For the purpose of attacking the character for truthfulness of a witness, evidence
       that a witness other than an accused has been convicted of a crime shall be
       admitted, subject to Rule 403, if the crime was punishable by death or
       imprisonment in excess of one year under the law under which the witness was
       convicted, and evidence that an accused has been convicted of such a crime shall
       be admitted if the court determines that the probative value of admitting this
       evidence outweighs its prejudicial effect to the accused[.]

                                               15
one’s employer and committing a fraud on a bank were so similar as to lead to a propensity

inference, that is, an inference that because “he stole once, he’ll steal again.” (Pallitta App.

624.) The District Court ruled that the conviction was admissible under Rule 609(a)(1) for

impeachment purposes if Pallitta chose to testify.

       While Pallitta did not take the stand, he did subpoena Anthony Dunlock to testify.

Dunlock testified that when, after the check had been deposited but he had not received his

cut from the proceeds, he went to see Pallitta to attempt to collect his share. Pallitta’s

counsel then attempted to elicit from Dunlock an out-of-court statement made by Pallitta to

Dunlock. Over the government’s objection that this statement was hearsay which did not fall

within any exception to the hearsay rule, the District Court permitted Pallitta’s counsel to ask

what Pallitta said in that conversation:


       Q:      Mr. Dunlock, what was Mr. Pallitta’s response when you attempted to
               collect money from him?
       A:      He had informed me that he didn’t know it was going to be something
               like this. You know, that Joseph [Bellero] had lied to him.
       Q:      When he said he didn’t know it was going to be like this, what was
               your understanding?
                                              ***
       A:      [Pallitta] said he thought it was coming from overseas, or something.
               And if he had known that, he wouldn’t use his account, set up a dummy
               account, or something.
                                              ***
       Q:      By “had known this,” do you know what he was talking about?
       A:      I guess knowing that it was going to be like this, the way it was.
       Q:      What way was it?
       A:      The way the checks were deposited in his account.


Fed. R. Evid. 609(a)(1).

                                              16
       Q:     Was it that the checks were fraudulent or stolen?
       A:     I guess so, yes.
                                            ***
       Q:     So if he told you, if he knew it was like that, that is, the checks were
              stolen or fraudulent, he would not have deposited it in his own account.
              Correct?
       A:     Correct.

(Pallitta App. 630.)

       As the District Court noted, through Dunlock Pallitta succeeded in his “attempt to

introduce exculpatory evidence.” (Pallitta App. 821.) As the government points out, this

statement, offered for its truth, suggested that Pallitta did not act “knowingly”—that he did

not have a specific intent to defraud and that he did not knowingly attempt to engage in a

monetary transaction in criminally derived property—and therefore supplied a complete

defense to an essential element of both charged crimes.9

       After Pallitta’s statements were admitted, the government moved, per Rule 806 of the

Federal Rules of Evidence, that Pallita’s theft conviction be admitted to challenge the

credibility of the declarant (Pallitta), just as the conviction would have been admitted, per the

District Court’s earlier decision, if Pallitta had testified himself. Rule 806 provides, in

relevant part, that “[w]hen a hearsay statement . . . has been admitted in evidence, the

credibility of the declarant may be attacked, and if attacked may be supported, by any

evidence which would be admissible for those purposes if the declarant had testified as a



       9
         In fact, in his closing argument Pallitta’s counsel invoked Dunlock’s testimony, see
Pallitta App. 1442 (“[Dunlock] said that Mario Pallitta said he wouldn’t have done this had he
known this check was stolen.”), to argue that Pallitta did not act knowingly.

                                               17
witness.” Fed. R. Evid. 806. As the Advisory Committee Notes emphasize, “[t]he declarant

of a hearsay statement which is admitted in evidence is in effect a witness. His credibility

should in fairness be subject to impeachment and support as though he had in fact testified.”

Fed. R. Evid. 806 Advisory Committee Notes. See also Saada, 212 F.3d at 221 (noting that

pursuant to Rule 806, “the credibility of the hearsay declarant . . . may be impeached with

. . . evidence of criminal convictions under Rule 609").

       The District Court, having already ruled the prior conviction admissible under Rule

609 if Pallitta testified, admitted the conviction under Rule 806. Pallitta claims this was an

abuse of discretion. We disagree.

       In determining whether “the probative value of admitting [the conviction]

outweigh[ed] its prejudicial effect”10 to Pallitta, Fed. R. Evid. 609(a)(1), the District Court

engaged in its analysis using the four factors set forth in Gov’t of the Virgin Islands v.

Bedford, 671 F.2d 758 (3d Cir. 1982), namely (1) the kind of crime involved, (2) when the

conviction occurred, (3) the importance of the witness’ testimony to the case, and (4) the

importance of the credibility of the defendant. Bedford, 671 F.2d at 761 n.4. The District

Court noted that the prior conviction was not remote in time from the instant offense, see

Pallita App. 625, that the importance of the witness/defendant’s credibility was


       10
          Pallitta argues that “the introduction of prior convictions under Rule 609 is subject to
Rule 403.” Pallitta Br. 24. This contention is overbroad. The Rule 403 considerations apply to
“evidence that a witness other than an accused has been convicted of a crime,” Fed. R. Evid.
609(a)(1) (emphasis added), while “evidence that an accused has been convicted of such a
crime” is admissible if “the probative value of admitting this evidence outweighs its prejudicial
effect to the accused.” Id. (emphasis added).

                                                18
“overwhelming,” see Pallitta App. 624, and, with regard to the kinds of crimes involved,

stated that it was “not convinced that these [crimes] are sufficiently similar . . . [that the jury]

will come to the same conclusion with regard to the instant charge based on the introduction

of the prior conviction.” (Pallitta App. 624.) In addition, the District Court minimized any

prejudice that may have resulted from the conviction’s admission by having the fact of the

conviction admitted via a stipulation which simply read: “on or about January 2nd of 2001,

defendant Mario Pallitta entered a plea of guilty to the offense of theft by failure to make

required disposition of property, received in New Jersey Superior Court in Hudson County,

New Jersey.”      (Pallitta App. 1272.)       The Court also issued a limiting instruction

accompanying the stipulation, instructing the jury that it could only consider the prior

conviction in regard to Pallitta’s credibility and not as evidence that he is a “bad person or

has a propensity to commit crimes” or as evidence that he committed the crimes charged in

the indictment. (Pallitta App. 1273.) Finally, the Court gave a second limiting instruction

to the same effect in its final instructions to the jury. See Pallitta App. 1622.

       There was no abuse of discretion here. Pallitta conceded that his earlier conviction

had probative value regarding his credibility. Furthermore, due to the fact that the out-of-

court statements, if believed, provided a complete defense to the crimes, both Pallitta’s

credibility and the statements’ importance to the case cannot be overstated. We also cannot

conclude that the crime of stealing money from one’s employer is so similar to the crimes of

committing a fraud on a bank and money laundering that the probative value of the



                                                19
conviction’s admission is outweighed by the conviction’s prejudicial effect to Pallitta.11 The

limiting instructions were a proper countermeasure to any improper uses of the evidence the

jury may have been tempted to make. In sum, Pallitta’s appeal on this ground must be

rejected.


2. The Impeachment by Contradiction of Greenidge

       Greenidge claims that the District Court erred by allowing the government to cross-

examine her about a consumer complaint and a criminal complaint against her. We review

this evidentiary ruling for abuse of discretion. See Saada, 212 F.3d at 220.

       During her direct testimony, Greenidge sought to portray herself as an honest

businessperson. She testified that at the time of the alleged criminal activity, she was

negotiating to acquire various businesses and was seeking out funding for those acquisitions.

Greenidge explained that she was merely negotiating a legitimate loan from Rankin, and

knew nothing about Rankin’s scheme or that the $253,000 check Rankin deposited into her

account had been stolen or altered. She emphasized her professionalism, noting that she had



       11
         We reject Pallitta’s policy argument that a court’s evaluation, pursuant to Rule 609, of
the probative value and prejudicial effect of an accused’s conviction is somehow altered when
the conviction is to be used, pursuant to Rule 806, to impeach a non-testifying defendant-
declarant. Pallitta offers no case law in support of his argument, and the one law review article
he cites makes the point that “where the defendant has chosen to tell his story through his own
hearsay statements rather than by taking the witness stand . . . it is arguably more important to
allow impeachment [by conviction] in this context, because the defendant has avoided the rigors
of cross-examination by introducing his hearsay statements rather than testifying.” Margaret
Meriweather Cordray, Evidence Rule 806 and the Problem of Impeaching the Nontestifying
Declarant, 56 Ohio St. L. J. 495, 504 (1997). We see no basis for altering the Rule 609
balancing in the circumstances of a non-testifying defendant-declarant.

                                               20
been in the moving and storage business for 15 years and telling the jury: “I’m not a thief.

I do not steal. I was raised with very strong convictions and I did business honestly.”

(Pallitta App. 764.) Greenidge also unequivocally denied ever having had any criminal

problems or receiving any complaints about her honesty in business:


       Q:     Have you ever, in those 15 years, had any problems, any criminal
              problems?
       A:     No.
       Q:     With respect to yourself, or this business, any business that you were
              in?
       A:     Never.
       Q:     Have you ever had anybody complain about you to a company and say,
              don’t deal with her, she’s not honest?
       A:     Never did.

(Pallitta App. 761.)

       The government moved for permission to impeach Greenidge’s statements with both

a customer complaint from 2004 that Greenidge had refused to relinquish the customer’s

furniture until the customer paid $500 beyond what was owed, and a criminal complaint

charging Greenidge with theft. The criminal complaint charged Greenidge with theft “by

unlawfully taking or exercising control over certain immovable property,” and arose when

Budget Rental reported to the Newton, New Jersey Police Department that Greenidge had

rented its trucks but failed to return them, accruing a debt of approximately $4,000.

Greenidge’s counsel told the Court that the Newton Police Chief agreed that this dispute was

a civil, not a criminal, matter; that the Chief had agreed to hold the complaint pending the

parties’ negotiation of a payment schedule; and that Greenidge had not been arrested on the


                                            21
complaint and that the arrest warrant had been withdrawn.

       The District Court decided that, due to Greenidge’s “unequivocal statement” that there

had never been any complaints about the way she conducted business, the government’s

proposed cross-examination was “a fair area of inquiry.” (Pallitta App. 773.) Nevertheless,

the Court, seeking to find an “appropriate middle ground” between the probative value of the

questioning and the prejudice to Greenidge, allowed Greenidge to be cross-examined on the

existence of the complaints but not on the arrest warrant, and did not admit the documents

into evidence. (Pallitta App. 770.)

       “Where a defendant testifies on direct examination regarding a specific fact, the

prosecution may prove on cross-examination that the defendant lied as to that fact.” United

States v. Gambino, 951 F.2d 498, 503 (2d Cir. 1991) (citation and internal quotation

omitted). In this way, impeachment by contradiction is a means of “arriving at the truth in

criminal trials” by policing the “defendant’s obligation to speak the truth in response to

proper questions.” United States v. Havens, 446 U.S. 620, 626 (1980).

       Impeachment by contradiction is permitted by Rule 607 of the Federal Rules of

Evidence, which provides that “[t]he credibility of a witness may be attacked by any party,

including the party calling the witness.” Fed. R. Evid. 607. The court, in deciding whether

to allow an instance of impeachment by contradiction, engages in a Rule 403 analysis, see

United States v. Castillo, 181 F.3d 1129, 1133 (9th Cir. 1999) (noting that Rule 607 allows

admission of extrinsic evidence to impeach by contradiction, subject to Rule 403

considerations), whereby the offered evidence can be excluded if “its probative value is

                                             22
substantially outweighed by the danger of unfair prejudice, confusion of the issues, or

misleading the jury, or by considerations of undue delay, waste of time, or needless

presentation of cumulative evidence.” Fed. R. Evid. 403.

       The District Court did not abuse its discretion in allowing the government to cross-

examine Greenidge about the two complaints. Greenidge concedes that her volunteered

denials “opened the door” to this area of inquiry. Greenidge Br. 21; see also Castillo, 181

F.3d at 1133 (“Courts are more willing to permit, and commentators more willing to endorse,

impeachment by contradiction where . . . testimony is volunteered on direct examination.”).

Furthermore, as the government argues, Greenidge’s unqualified denial in her direct

testimony rendered the impeachment by contradiction more probative of her credibility. In

addition, the District Court sought to minimize any unfair prejudice to Greenidge by not

allowing the government to introduce the complaints into evidence, nor to mention the

existence of the arrest warrant. Finally, Greenidge was given the opportunity to explain her

seemingly inconsistent answers to the jury. We cannot conclude that this evidence was

erroneously admitted.


                           C. Motion for Judgment of Acquittal

       Pallitta and DiGregorio both appeal the District Court’s denial of their motions, under

Rule 29 of the Federal Rules of Criminal Procedure, for a judgment of acquittal on the charge

of conspiracy to engage in a monetary transaction involving the proceeds of criminally

derived property (Court Seven). We review the appellants’ claim that there was insufficient


                                             23
evidence to sustain their conviction on this count using the same standard the District Court

applied, that is, viewing the evidence in the light most favorable to the government, we “will

sustain the verdict if any rational trier of fact could have found the essential elements of the

crime beyond a reasonable doubt.” United States v. Dent, 149 F.3d 180, 187 (3d Cir. 1998)

(internal citation omitted). This standard “places a very heavy burden on an appellant.” Id.

(citation omitted).

       The elements of a conspiracy under 18 U.S.C. § 1956(h) are: (1) that an agreement

was formed between two or more persons; and (2) that the defendant knowingly became a

member of the conspiracy. 18 U.S.C. § 1956(h); see also Whitfield v. United States, 543 U.S.

209, 214 (2005) (finding that the government need not prove an overt act in order to obtain

a conviction under 18 U.S.C. § 1956(h)). The elements of the substantive crime the

appellants were charged with conspiring to commit are: (1) the defendant engaged or

attempted to engage in a monetary transaction;12 (2) involving criminally derived property

of at least $10,000; (3) that the property was in fact derived from specified unlawful activity;

(4) that the defendant acted knowingly, that is, with knowledge that the property was derived

from the proceeds of a criminal offense; and (5) that the transaction occurred in the United

States. 18 U.S.C. § 1957(a), (d).

       Pallitta claims that there was insufficient evidence to convict him of conspiracy to



       12
         The statute defines a “monetary transaction” to be a “deposit, withdrawal, transfer, or
exchange, in or affecting interstate or foreign commerce, of funds . . . by, through, or to a
financial institution.” 18 U.S.C. § 1957(f).

                                                24
engage in money laundering (Count Seven) because the financial transaction used to support

the money laundering charge was the same transaction as that used to support the bank fraud

charge (Count One). In other words, he argues that Count Seven was indistinct from Count

One, and because “[m]oney laundering must be a crime distinct from the crime by which the

money is obtained,” United States v. Abuhouran, 162 F.3d 230, 233 (3d Cir. 1998) (citation

omitted), his conviction on Count Seven must be reversed.

       We agree, of course, that in order to support a charge of money laundering, there must

have been a “discrete predicate crime” which “produced proceeds in acts distinct from the

conduct that constitutes money laundering.” United States v. Mankarious, 151 F.3d 694, 705

(7th Cir. 1998). See also United States v. Conley, 37 F.3d 970, 980 (3d Cir. 1994)

(commenting that before “proceeds” can be laundered, they must be “derived from an already

completed offense, or a completed phase of an ongoing offense”). Drawing on this principle,

Pallitta contends that the bank fraud conspiracy produced no “proceeds” until the funds were

withdrawn, and thus there was only a single transaction, not the completion of one followed

by another which used the proceeds from the first.

       We disagree, and instead are persuaded by the government’s argument that the

conspiracy to commit bank fraud was complete when the stolen and altered check was

deposited. The bank fraud statute involved here makes it a crime to “knowingly execute[],

or attempt[] to execute, a scheme or artifice to defraud a financial institution.” 18 U.S.C. §

1344(1). When the check was deposited, the “scheme . . . to defraud” the bank had been

“execute[d].” As the Eleventh Circuit has stated:

                                             25
       Here [the defendant] was in the same position as if he had robbed the bank and
       placed the proceeds of the robbery into his own account with the intent to use
       the money for his own purposes. The crime was completed at that point,
       without any actual withdrawal of the money.

United States v. Gregg, 179 F.3d 1312, 1315 (11th Cir. 1999). See also United States v.

Hord, 6 F.3d 276, 281 (5th Cir. 1993) (bank fraud indictment that charged withdrawals as

well as deposits not multiplicitous because “[i]t is the deposits, not [the] withdrawal attempts,

that constitute executions of the scheme”). Because we conclude that the conspiracy to

commit bank fraud was “executed” when the check was deposited, the proceeds from that

completed crime qualified as the “criminally derived property” used to support the charge

of conspiracy to engage in money laundering. In sum, we find Counts One and Seven to be

based on two distinct events.

       Furthermore, there was sufficient evidence for the jury to convict Pallitta of

conspiracy to engage in a monetary transaction involving the proceeds of criminally derived

property. Elsis testified that the co-conspirators agreed how to split the proceeds from the

altered check after the money was withdrawn. (Pallitta App. 421.) Pallitta thus knew, when

he joined the conspiracy, that either he or a co-conspirator would withdraw proceeds of the

stolen check from the bank once the check cleared. In fact, there was evidence that Pallitta,

knowing the check was stolen, called the bank several times on the day of the check’s deposit

to determine if it had cleared. (Pallitta App. 591.) Because there was evidence that Pallitta,

knowing the check had been stolen and altered, agreed to help facilitate the withdrawal of

the check’s illegal $134,494.30 proceeds, a jury could have found each element of the crime


                                               26
beyond a reasonable doubt and so we will affirm the denial of his Rule 29 motion on Count

Seven.13

       Next, DiGregorio contends that there was insufficient evidence for the jury to convict

him on Count Seven. He maintains that though he was present when Nash deposited the

altered check, he had no later involvement in Rankin’s efforts to collect the funds, and

because, he argues, the bank fraud proceeds did not exist until Rankin withdrew them, there

was insufficient evidence that DiGregorio participated in the conspiracy to engage in this

monetary transaction.

       This argument is rejected. As we discussed above, the bank fraud proceeds existed

when the check was deposited. In addition, there was evidence that in November 2001,

DiGregorio agreed with Elsis to propose the plan to Nash whereby a stolen and altered check

would be deposited into the KYS account, and that the withdrawn illegal proceeds would be

used both to keep KYS afloat and to compensate the conspirators for their role in the scheme.

Indeed, in order to ensure that there were sufficient proceeds from this illegal venture, there

was evidence that DiGregorio asked Elsis for a check for approximately $1.4 million. In this

way, there was evidence from which the jury could have found that DiGregorio knowingly

entered into an agreement to withdraw the proceeds from a criminal offense, and so we will

affirm the denial of his Rule 29 motion on Count Seven.


       13
         It is, of course, of no consequence that the bank recognized the fraud and the proceeds
were never actually withdrawn, because the “illegality of the agreement does not depend on the
achievement of its ends.” United States v. Hsu, 155 F.3d 189, 203 (3d Cir. 1998) (citation
omitted).

                                               27
                               D. Reasonableness of Sentence

       DiGregorio appeals his sentence as unreasonable, arguing that the District Court, in

its analysis of the 18 U.S.C. § 3553(a) sentencing factors, both did not adequately consider

his limited role in the offense and overemphasized his obstruction of justice.

       In reviewing a sentence for reasonableness, our inquiry proceeds in three stages. See

United States v. Cooper, 437 F.3d 324 (3d Cir. 2006). We first look to whether the District

Court correctly calculated the applicable advisory guidelines range. Id. at 330. Next, we

determine whether the record shows the District Court gave “meaningful consideration to the

§ 3553(a) factors,” which includes the consideration of “any sentencing grounds properly

raised by the parties which have recognized legal merit and factual support in the record.”

Id. at 329, 332. Lastly, we evaluate whether the District Court reasonably applied the §

3553(a) factors to the particular circumstances of the case. Id. at 330. In this final step, our

review is, to a great degree, deferential, because we recognize that “the trial court [is] in the

best position to determine the appropriate sentence.” Id.

       DiGregorio does not challenge the calculation of his advisory guidelines range.14

Instead, he argues that his 41-month sentence, 37 months below the bottom of the advisory

guidelines range, is unreasonable. DiGregorio maintains that his role was essentially limited

       14
          DiGregorio’s base offense level of eight was increased: by 16 levels for an intended
loss of $1,401,647.28 pursuant to U.S.S.G. § 2B1.1(b)(1)(I); by two levels for his conviction
under 18 U.S.C. § 1956 pursuant to U.S.S.G. § 2S1.1(b)(2)(B); and by two levels for obstruction
of justice pursuant to U.S.S.G. § 3C1.1. His total offense level of 28 combined with a Criminal
History Category of I to yield an advisory guidelines range of 78 to 97 months’ imprisonment.

                                               28
to introducing Nash to Rankin and that he received a relatively small payment for his role,

most of which, he claims, was for wages owed.15 He further claims that the District Court

afforded his obstruction of justice undue consideration in fashioning a sentence; in this

regard, DiGregorio seems to be arguing that because the advisory guidelines range took his

obstruction of justice into account, the District Court was prohibited from further considering

that conduct when fixing a sentence.

       We find that DiGregorio’s sentence was not unreasonable. The District Court heard

DiGregorio’s argument regarding his limited involvement, but reasonably rejected it. The

Court noted that even though DiGregorio’s financial gain from the plan was relatively

insubstantial, his role was nevertheless essential. DiGregorio was responsible for introducing

Nash to Rankin; without him, this sub-scheme of the conspiracy would not have occurred.

Furthermore, as the Court discussed, despite DiGregorio’s limited financial gain, he set in

motion a sub-scheme of the conspiracy which succeeded in withdrawing $ 1.24 million, an

amount far larger than the loss or intended loss attributed to DiGregorio’s co-conspirators

here (e.g., $253,000 for Greenidge and $138,000 for Pallitta).              Moreover, despite

DiGregorio’s contention that his role here was minimal, the Court heard evidence that

DiGregorio was the continuous liaison between Nash and Rankin and Elsis, and was present

during discussions of the planned withdrawal, the splitting of the proceeds, and the

possibility of another transaction. DiGregorio also helped formulate the cover story to


       15
         DiGregorio does not claim that he was entitled to a mitigating role adjustment pursuant
to U.S.S.G. § 3B1.2.

                                               29
explain to the company’s investors the source of the cash infusion.

       Contrary to DiGregorio’s contention, the District Court did not overemphasize

DiGregorio’s obstruction of justice. We emphasize that a sentencing court is not prohibited

from considering the factual basis underlying a defendant’s sentence enhancements, and

indeed, should consider those facts in order to tailor the sentence to the defendant’s

individual circumstances. Here, the Court, having heard evidence that DiGregorio both

helped to invent a fictitious company in order to make the transaction appear legitimate, and

then lied to the U.S. Attorney in a proffer session, determined that the “deliberate thought”

behind DiGregorio’s obstructive conduct set him apart from his co-defendants and warranted

a more severe sentence. (DiGregorio App. 48.)

       In imposing sentence, the District Court articulated the § 3553(a) factors and

reasonably applied them to this case. The Court balanced the fact that DiGregorio had no

criminal history with his conduct here, including his obstruction of justice. The Court also

took into account the instruction to “avoid unwarranted sentence disparities among

defendants with similar records who have been found guilty of similar conduct,” 18 U.S.C.

§ 3553(a)(6), as reflected in the fact that DiGregorio, who had a higher offense level than his

co-defendants because of the amount of loss and his obstruction of justice, received a longer

sentence than they did. Finally, the Court showed substantial leniency to DiGregorio by

sentencing him to 37 months below the bottom of the advisory range, a sentence 47% less

than the minimum advisory sentence. In light of this record, we cannot say the District Court

imposed an unreasonable sentence here.

                                              30
                                          III.

      For the above reasons, we will affirm all appellants’ convictions and DiGregorio’s

sentence.




                                          31
