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United States v. Pacheco-Martinez

United States Court of Appeals, First Circuit

June 15, 2015


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[Copyrighted Material Omitted]

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Robert Herrick for appellant.

Susan Z. Jorgensen, Assistant United States Attorney, with whom Rosa Emilia Rodríguez-Vélez, United States Attorney, and Nelson Pérez-Sosa, Assistant United States Attorney, Chief, Appellate Division, were on brief, for appellee.

Before Howard, Chief Judge, Selya and Lynch, Circuit Judges.


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Lynch, Circuit Judge.

Defendant Alfredo Pacheco-Martinez was convicted of various offenses arising from his multi-year effort to swindle scores of unsuspecting victims out of over a million dollars and to manipulate the U.S. Bankruptcy Code in order to shield his ill-gotten gains from creditors. He now appeals from one of the counts of conviction, arguing that there was insufficient evidence to support the jury's guilty verdict. He also attacks his sentence, arguing that the district court improperly calculated the applicable Sentencing Guidelines range and imposed a procedurally and substantively unreasonable sentence. We find no merit in any of these contentions and affirm Pacheco's conviction and sentence.


Because Pacheco challenges the sufficiency of the evidence supporting his conviction on one count, we recite the facts relevant to that claim in the light most favorable to the jury verdict. See United States v. Burgos-Montes, 786 F.3d 92, 2015 WL 2223304, at *1 (1st Cir. May 13, 2015). In discussing facts relevant to Pacheco's claims of sentencing error, we rely in part on unchallenged portions of the Presentence Investigation Report (PSR). See United States v. Vázquez-Larrauri, 778 F.3d 276, 291 (1st Cir. 2015). We confine our discussion here to the background necessary to frame the issues raised on appeal.

In 2003,[1] Pacheco formed a limited liability company, International Business Group and Affiliates (IBGANV), in Nevada through a registered agent service, Corporate Services of America (CSA). CSA offered a " virtual headquarters program" that gave entities which were not physically in Nevada a legal presence in the state. Pacheco was listed as the sole manager of IBGANV.

Also in 2003, Pacheco formed a corporation in Puerto Rico called International Business Group and Affiliates (which we will call simply IBGA), for which he was the president and registered agent. Pacheco's daughter Leyda was listed as the vice president of IBGA, and his other daughter Mayra was listed as the treasurer. IBGA was not registered to make investments in Puerto Rico.

Finally, in July 2005, Pacheco formed a third entity, Liberty Dollars of Puerto Rico, Inc. (LDPR). Pacheco was listed as LDPR's registered agent and its only director and officer. The corporation's physical address was a P.O. Box in Yauco, Puerto Rico.

Pacheco used these entities to engage in two fraudulent schemes: the " Liberty Dollar program" and the " Debt Elimination program." Under the first program, Pacheco sold medallions with a small silver content to individuals as a " substitute form of coinage." He obtained the Liberty Dollars from NORFED, a " national organization dedicated to the repeal of the Federal Reserve Act and the Internal Revenue [C]ode." Pacheco marketed the Liberty Dollars as protection against inflation, telling potential buyers that the Liberty Dollars, unlike U.S. currency, could not lose value based on the actions of the Federal Reserve. Pacheco also marketed a variant on the Liberty Dollar called the " Boricua

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Dollar" that specifically targeted Puerto Rico.

The evidence at trial demonstrated that the Liberty Dollars and Boricua Dollars operated much like a pyramid scheme: IBGA " would sell them through distribution channels, with each subsequent buyer paying a higher amount until the [dollars] reached a final user." Pacheco told prospective buyers that they could either market the Liberty Dollars or use them as currency at certain businesses. The marketing materials Pacheco issued in connection with the Liberty Dollars predicted that the annual returns for buyers would range from 6 percent to over 25 percent.

In 2006, the U.S. Mint notified Pacheco that the introduction of Liberty Dollars into circulation was illegal, but he nevertheless continued to market and sell the coins. Pacheco's companies ultimately received $59,512 from the sale of the Liberty Dollars and Boricua Dollars to the public.

Under the Debt Elimination program, IBGA marketed and sold, for a fee of $3,000-$3,500, a program which purported to allow buyers to pay off their debts in a short amount of time. IBGA obtained the program from a company called Mortgage Alternatives. Between 2004 and 2005, some 225 people bought the debt elimination ...

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