United States v. Muñoz Franco (356 F. Supp. 2d 20, 2005)

OPINION AN ORDER AS TO BAIL PENDING APPEAL

DOMINGUEZ, District Judge.

Pending before the Court is a plethora of motions filed by all four co-defendants seeking bail pending appeal under 18 U.S.C. 3143(b).

I. FACTUAL AND PROCEDURAL BACKGROUND

In this case, two bank officers of Caguas Central Federal Savings and Loan, a federal guaranteed savings and loan association, Lorenzo Munoz-Franco and Francisco Sanchez-Aran, and three commercial customers, Ariel Gutierrez, Wilfredo Um-pierre Hernandez and Enrique Gutierrez-Rodriguez, were charged with bank fraud, misapplying bank funds, making false entries in banking records and participating in conspiracies to perpetuate those offenses. See 18 U.S.C. §§ 371, 657,1006 & 1344 (1994).

The court received a plethora of motions relating .to bail on appeal after sentencing in the middle of February 2004. Some of the motions were filed as late as August/September 2004 as to the impact of Blakely v. Washington, 542 U.S. -, 124 S.Ct. 2531, 159 L.Ed.2d 403 (2004) and Apprendi v. New Jersey, 530 U.S. 466, 120 S.Ct. at 2348, 147 L.Ed.2d 435 (2000). The Blakely v. Washington controversy became clearer in the First Circuit after the case of United States v. Savarese, 385 F.3d 15 (1st Cir.2004) decided late in September 2004 and United States v. Stearns, 387 F.3d 104, 106 (1st Cir.2004) decided in November 2004. In both of these eases the Court of Appeals determined that if defendants failed to request the jury to decide the sentencing enhancement the matter is potentially waived subject to plain error analysis. This determination is based in the holding of United States v. Cotton, 535 U.S. 625, 631, 122 S.Ct. 1781, 1785, 152 L.Ed.2d 860 (2002) (Apprendi errors are subject to plain error analysis). The doctrine was recently reiterated by the opinion of the court written by Justice Breyer in the most recent case of United States v. Booker, United States v. Fanfan, 543 U.S. -, 125 S.Ct. 738, — L.Ed.2d — (2005). The court has waited patiently for the legal issues as to Appren-di/Blakely/Booker/Fanfan to be finally determined; that occurred on January 12, 2005. The Supreme Court in the last paragraph of the opinion of United States v. Fanfan, Id., Justice Breyer writing for the court, stated that the holding applied to all cases pending on appeal but subject to “prudential doctrines” of “plain error.” The court is, hence, ready to rule on all pending bail on appeal issues.

II. THE INDICTMENT

The Indictment charges in Count One that co-defendants Lorenzo Muñoz-Fran-co, Francisco Sánchez-Aran, acting as Executive Officers of a federally chartered loan association or bank, and Ariel Gutierrez and Wilfredo Umpierre (outsiders/clients) with conspiring in violation of 18 U.S.C. 1344, misapplication of bank funds (18 U.S.C. 657) and/or false entries into -the books of the bank, (18 U.S.C. 1006). (Third Superseding Indictment, D. 1275.) All relating to loans granted to construction entities in which Ariel Gutierrez was the President of the bank and/or a principal executive officer and Wilfredo Umpierre was the Vice-president. Those same four defendants were charged with bank fraud under 18 U.S.C. 1344 in Count Three (Muñoz-Franco and Sánchez^-Aran as bank executives and/or insiders as aiders and abettors.)

In count two Muñoz-Franco and Sán-chez-Aran are charged with a conspiracy to commit bank fraud under 18 U.S.C. 1344, misapplication of bank funds under 18 U.S.C. 657, and false entries in book reports and statements etc. under 18 U.S.C. 1006, as to corporations owned by Francisco Mirandes Rogue. The latter plead guilty in 1997 to conspiring to defraud the bank and to defraud Caguas Central and for misapplication of bank funds and was sentenced to thirty-seven months in jail and two years probation by the undersigned judge. Count four is a substantive charge against Muñoz-Franco and Sánchez Aran as to bank fraud under 18 U.S.C. 1344 and false entries on bank records under 18 U.S.C. 1006.

Counts Five to Eight, allege á misapplication of bank funds under 18 U.S.C. § 657 against co-defendants Muñoz-Franco, Sán-chez-Aran, Ariel Gutierrez and Francisco Umpierre. (A non guideline count, pre November 1,1987.)

Four co-defendants were found guilty of all counts as to which they were indicted. Another co-defendant Enrique Gutierrez was found innocent by the jury as to all the counts wherein his brother Ariel Gutierrez was found innocent.

After nearly one and a half contentious years of tidal, the jury 'in this case returned guilty verdicts on May 2002 with respect to all counts against Defendants Lorenzo Munoz-Franco (Counts 1-8), Francisco Sanchez-Aran (Counts 1-8), Ariel Gutierrez-Rodriguez (Counts 1, 3, 5 — 8)j and Wilfredo Umpierre-Hernandez (Counts 1, 3, 5-8). Numerous Rule 29 motions followed after the verdict was rendered which were ultimately decided by the court on February 6, 2003, (Docket No. 1339). The defendants then filed Motions for New Trial which the court also denied in various ordérs discussed herein. The guilty defendants have all appealed. The only remaining issue is Bail on Appeal which is the object of this order. At this time, the court considers the Bail on Appeal motions with respect to the four guilty Defendants.

III. THE FACTS PROVEN AT TRIAL

The First Circuit has ruled that in bank fraud cases, only “intent to deceive is necessary, not intent to harm the bank.” U.S. v. Kenrick, 221 F.3d 19, 26-29 (1st Cir.2000) (en banc) cert. denied 531 U.S. 961, 121 S.Ct. 387,148 L.Ed.2d 299 (2000) cert. denied Ober v. U.S., 531 U.S. 1042, 121 S.Ct. 639, 148 L.Ed.2d 545 (2000). (“[T]he intent necessary for a bank fraud conviction is an intent to deceive the bank in order to obtain from it money or other property. ‘Intent to harm’ is not required.”)

A. FACTS RELATED TO THE BORROWER

The court rendered an Opinion and Order on February 11, 2004, (D. 1502 amended at D. 1517), providing a detailed amount of loss per construction project per. defendant. The incriminating evidence per defendant per count was set forth prior thereto by the court at the Opinion and Order denying Rule 29 request, (D.1339). The court now highlights these facts as they affect the pending bail on appeal matter.

Bank loans by Caguas were granted,to corporations Transglobe Manufacturing and Modules Manufacturing wherein co-defendants Enrique Gutierrez and Ariel Gutierrez were executives, (hereinafter referred to as Modules or Transglobe). Some of the loans were granted prior to the enactment of the criminal law on October 12, 1984. Refinancing of these partie-ular pre October 12, 1984 loans followed after the enactment of the criminal law. As to these refinanced loans moneys were deviated from then without Board approval to other prior non related loans, and/or moneys were deviated to said loans from other later loans granted after the enactment of the criminal law also without Board approval. (La Marina Project; Levittown Plaza; Quintas de Country Club. Refinancing occurred after enactment of the law.) A series of other construction loans were also granted to said corporations, hereinafter related as “Modules,” post enactment of the law on October 12, 1984: Villa Alba Project, Los Ca-ciques Project, Los Mameyes Project, Cerrovista Project. See Docket 1502, Ex. I(a)-(g).

(1) The module houses pre and post October 12, 1984 were not being timely built by the contractor but were paid by the Bank. (Docket 1339, Rule 29, Opinion and Order.) (2) Modules was paid for work not completed. In many projects dozens of houses were fully not constructed yet payment was made by the bank. In some of the last construction projects, payments were made covering entire urbanization projects (dozens of houses) but not a single house was built, (Docket 1339, Docket 1502-Ex. I, Ex. II description of incomplete constructions).

(3) Monies destined for a particular building project were used to pay unrelated prior noncomplying loans of Modules/Transglobe all owed to the Caguas Bank and/or used for building expenses of other construction loans of Module also owed to Caguas Bank and even used to pay for land of future construction loans, (Docket 1339; Docket 1502). The result of all monies deviated from one construction loan to another unrelated loan was that the new loans were severely weakened and the construction was destined for inevitable noncompliance. The bank documents of each loan do not contain any reference authorizing the use of moneys for other prior bank loans; nor was there any language of “work out loans” in the loans object of the indictment. Further, the bank through the allowance of this procedure hid non compliance loans and took improper credit for the payment of interest as to noncomplying loans thereby creating a fictitious financial situation for the bank.

(4) The Dow phase of the Marina Project, refinanced by the bank post October 1984, after a failed loan to Modules, could not since the inception be timely started because the manufacturing plant of the Modules Corporation was located at the construction site. (Docket 1339, p. 6.)

10. The Board of Directors was not informed that the building contractor, a Gutierrez’ company, that had failed in the timely construction of the Modules houses, remained as the builder of the houses, when the failed project was refinanced to an apparent third-party general contractor. (Docket 1339, p. 6.) This misinformation occurred in various Gutierrez refinanced projects.

11. Loaned amounts of money were increased in substantial amounts (mid six figures) in several loans without Board approval. (Docket 1339, p. 6. See also Ex. 1502, Ex. I and Ex. II.)

12. Loans were cash disbursed ahead of Board approval of the loan as corroborated by a comparison of the Board approval date and the prior disbursement of the loan proceeds. (Docket 1339, p. 6.)

13. Loans were granted and/or refinanced without proper information as to the economic status of the new general contractor debtor and without advising of the failure and retention of the housing construction company (Modules Corporation) in prior non complying loans. (Docket 1339, p. 6.)

14. Despite the utter reiterated failure of a debtor Modules Construction Company, the bank insisted in obligating the new general contractor debtor to use the failed Modules housing company, (Docket 1339, p. 6). The new debtor (substituting the Gutierrez corporations) then suffered that payments were substantially deducted from the refinanced contract and paid directly to the bank to satisfy prior loans of the Modules Company (new general contractors Santiago, Montilla, Burns, and Dominguezr-Wolf). The construction of the refinanced project predictably suffered further noncomplianee due to lack of budgeted cash.

15. Housing units were not being delivered pursuant to schedule affecting the payment of principal and interest by the debtor. (Docket 1339, p. 6.)

16. Nominee loans were established to camouflage loans to the Transglobe/Mo-dules (Docket 1339, p. 6). The loans were not figured in the books of Caguas as loans to the Gutierrez’ corporations.

17. The internal auditor J. Hernández attempted to audit the construction Loan Department. He was impeded and instructed not to audit said department by both co-defendants Muñoz-Franco and Sánchez-Aran. The internal audit request was duly supported by the external auditors of the bank. (Docket 1339, p, 8.)

18. At the Quintas de Country Club Project — loan increases were approved by Board of Directors without advising the Board of the delayed status of the construction. (Docket 1339, p. 25.)

19. At the refinancing of the Levittown Plaza loan, the loan committee was not advised of the prior failure of Modules to develop the project as required by the loan agreement and addendums. (Docket 1339, p. 25-Docket 932, p. 58.)

20. In the Los Caciques loan — a $60,000 disbursement was made prior to the Board of Director’s approval of the loan. (Docket 1339, p. 25-Docket 932 p. 67-70.)

21. The Mameyes Project was never submitted to the Board’s approval despite requirements of Board’s approval. (Docket 1339, p. 25-Docket 932, p. 145, T. A Enriquez).

22. In general Sánchez-Aran and Mu-ñoz-Franco concealed important information from the Board of Directors and internal auditors regarding the Gutierrez Co.’s loans.

Question: “... could you please tell the members of this jury, whether the loan committee was advised of the Modules’ failure to develop the project as required by the loan agreement and the addendums that you were able to review?”

Enriquez: “No, they were not told.”

Question: “And was this something that they should have been told?”

Enriquez: “Yes.”

Question: “Why. is that?”

Enriquez: “So, that they would be aware of how the project was going and so that they could make a decision as to whether these increases should be approved or not approved.” (Docket 1339 p. 28; Docket 932, p. 15-16, 44, 58, Amabel Enriquez.)

B. THE EVIDENCE AS TO SANCHEZ ARAN

(1) Co-defendant Sánchez-Aran was the primary executive supervisor of the Construction Loan Department of the Caguas Bank (Docket 1339). He was also the primary supervisor of the construction loans of the Modular company and the Mirandes’ companies.

(2) Sánchez-Aran was the Bank official who authorized nominee loans to camouflage loans to the failing Modular Construction Company of Gutierrez. (Docket 1339, p. 6.) Loans to Roberto Ponce, ACA-NA and/or P.F. Advertising were granted but they were loans in reality to Modules — Docket 1339, p. 27, (testimony A. Somohano 6/6/00, p. 77-79, Docket No. 96).

(3) Sánchez-Aran was the Bank Executive that approved all of the false construction certificates disbursing the construction money ahead of the actual construction. The certificates were prepared by Gutierrez and Umpierre. All certificates were presented in evidence. (Docket 1339, p. 25; testified by A. En-riquez 5/7/01, Docket 943, p. 44-45; Victor Kareh 2/01/02, p. 66, Docket 1045; F.H. Román 5/22/01, p. 37, Docket 957).

(4) The internal auditor requested Sán-chezr-Aran to audit the Construction Loan Department a request supported by the external auditor. Sánchez-Aran instructed that said department was not to be audited allegedly because the department was sufficiently supervised by other resources. (Docket 1339, p. 27-29, 31.)

Question: “Mr. Hernández, who had given you those instructions not to audit the construction loan department?”

Hernández: “Senior management.”

Question: “Who is senior management?”

Hernández: “Mr. Lorenzo Muñoz-Fran-eo and Mr. Sánchez-Aran.”

(D.1108, p. 47, J. Hernández)

Hernández: “Mr. Lorenzo Muñoz-Fran-co indicated to me that, that area ... of construction loans was the most audited by senior management.” (Id. P. 58)

Question: “And Mr. Hernández, in the years between 1980 and 1990, in your functions as internal auditor of Caguas were you ever provided with any internal audit conducted by either Lorenzo Muñoz-Franeo or Francisco Sánchez-Aran of the construction department?” Hernández. “No.” (Id. P. 59-81-84.)

C. THE EVIDENCE AS TO MUÑOZ-FRANCO

Muñoz-Franeo supported the questionable decisions of Sánchez-Aran in granting advanced payments for not completed construction to the Modular houses construction company even though other high echelon top executives questioned the decision. (Docket 1339, p. 7, testified by Executives Somohano and Anabel Enriquez.)

Anabel Enriquez met regularly for ten years with Muñoz-Franeo and advised him, as President of the Bank, the status of the Modular Loans to the corporations of co-defendant Gutierrez and Mirandes. Enriquez knew the status of the noncompliance with the construction schedule and that payments to loans in principal and interest were not being made. (Docket 1339, p. 7.)

Anabel Enriquez advised Muñoz-Franeo that certification payments were being made for work not having been completed (homes paid without being built) (Docket 1339, p. 7). He also advised Muñoz-Fran-co that the Modular Company remained as the subcontractor despite the fact that the company reiteratedly failed in prior contracts. (Docket No. 1339, p. 7). (This critical fact was not advised to the Board when refinancing of the loans occurred by the Bank to a new general contractor substituting the Gutierrez’s contractor but retaining the Gutierrez corporation as the builder of Modular houses.)

(3) Muñoz-Franeo and Sánchez-Aran refused to authorize the internal auditor to audit the Construction Loan Department notwithstanding support from the external auditor. (Docket 1339, p. 8.)

Anabel Enriquez discussed with Sán-chez-Aran and Muñoz-Franeo her concern that certifications were being paid for houses not actively built, that loans would not be repaid and that Modules remained as the housing contractor despite their repeated inability to perform as required under past loans. (Docket 1339, p. 26.)

Question: “... did the manner in which the Gutierrez certifications were handled at the bank, cause you any concern?”

Enriquez: “Yes.”

Question: “Why was that?”

Enriquez: “Because practically monthly, each time they invoiced the certification would be ahead of construction. The projects weren’t being delivered. Thus, the interest would be spent out on the project.”

Question: “And did you discuss these concerns with anyone.”

Enriquez: ‘Tes.”

Question: “At the bank?”

Enriquez: “Yes.” ...

Question: “Okay. And with whom did you discuss these concerns at the bank?”

Enriquez: “As much with Doctor Sán-chez-Aran as with Counsel Muñoz-Franeo.”

(Muñoz-Franeo was the President of the bank and a lawyer by procession.)

(Docket 943, A. Enriquez 5/7/01, p. 45-46.)

Question: “What concerns, if any, did you express to Francisco Muñoz-Franco with respect to Modules loans?”

Enriquez: “In the case involving Engineer Dominguez [Wolff] [new general contractor], he had some concerns about whether the homes would be delivered ,to him on time. Since he was assuming a loan which carried interest and this concerned him” ...

Question: “... tell us what you recall having said to Lorenzo Muñoz-Franco with respect to the concerns that you had on the Modules loans?”

Enriquez: “Well, subject to the reports on loans to one borrower that were prepared for his review the outstanding balance of the debt ... and based on the experience that we had lived through, my concern was whether they would be able to comply and deliver the homes on time.”

Question: “Who?”

Enriquez: “Modules.”

(Docket 943, p. 66-69, Anabel Enri-quez.) (Referring to Dow Phase of construction refinanced post October 12, 1984.)

Enriquez: “My concerns were about the delivery of the units, that they were not delivered according, to the contract ... Therefore, [they] could not repay the loans.” [no money was being generated because the non constructed homes could not be sold to the public].

Question: “And did you discuss those concerns with Lorenzo Muñoz-Franco?” Enriquez: “Yes. I submitted them ... That is, before I discussed them with Attorney Muñoz-Franco I discussed them with Doctor Sánchez.”

Question: “... Did you discuss with Lorenzo Muñoz the manner in which the modules loans were being handled?”

Enriquez: “I told Attorney Lorenzo Mu-ñoz my concerns about the manner in which the loans were being handled?” Question: “... did you agree with the manner' in which those loans continued to be handled after you had those discussions with Lorenzo Muñoz?”

Enriquez: “I was not in agreement because the same disbursements, more or less, were made.”

(Docket No. 943, p. 90-92, Anabel En-riquez.)

The presentation and discussion of the Denby letter (misrepresentation to the federal auditors) to the Board of Directors was made by Lorenzo Muñoz-Franco and Sánchez-Aran. (See Denby letter details infra at 17-19.)

Question to Director Lugo

Question: “... Do you have a recollection as to whom you discussed the letter [the Denby (sic) letter]?”

Answer: Yes, that was specifically discussed with Mr. Muñoz-Franco and Doctor Sánchez-Aran.

(Docket 1142, p. 58, Tr. Roberto Lugo.)

D. THE EVIDENCE AS TO ARIEL GUTIERREZ/WILFREDO' EMPIERRE

Ariel Gutierrez Rodriguez was the President of Transglobe Manufacturing and Modules Manufacturing Co., Wilfredo Um-pierre was the Vice-President. Both Gutierrez and Umpierre signed and delivered dozens of false construction certificates on behalf of these two corporations. The net result was that the bank was paying knowingly for incomplete certificates (certificates openly ahead the actual construction). Lower level executives refused to pay the certificates. The certificates were ordered to be paid by co-defendant Sán-ehez-Aran with the knowledge of co-defendant Muñoz-Franco.

Question: “... did the manner in which the Gutierrez certifications were handled at the bank, cause you any concern?” Enriquez: “Yes.”

Question: “Why was that?”

Enriquez: “Because practically monthly, each time they invoiced the certification would be ahead of construction. The projects weren’t being delivered. Thus, the interest would be spent out on the project.”

Question: “And did you discuss these concerns with anyone?”

Enriquez: ‘Yes.”

Question: “At the bank?”

Enriquez: ‘Yes.”

Question: “Okay. And with whom did you discuss these concerns at the bank?” Enriquez: “As much with Doctor Sán-chez-Aran as with Counsel Muñoz Franco.”(the two bank co-defendants.); [Mu-ñoz-Franco was also a lawyer].

Docket No. 943, 5/7/01, p. 45-46, T. Anabel Enriquez.

Question: Ms. Enriquez, you testified that you had discussions with Lorenzo Muñoz Franco regarding concerns that you had, not only during the year 1984, but also during 1984, but also during 1985 and 1986 regarding the Modules project. Do you recall that? (Emphasis ours.)

Answer: Yes.

Question: Now, I’ve asked you questions regarding pre 1984, which you testified before the loan — before the projects of Levittown and Country Club were sold to Dominguez Wolff. Do you recall that?

Answer: Yes.

Question: And that would have been before 1984?

Answer: Yes.

Question: Now, regarding those concerns, before — the concerns you had about Modules being produced before those two projects were sold to Dominguez Wolff, [Dominguez Wolf] appeared post October 12, 1984 what discussions, if any, did you have with Lorenzo Muñoz Franco?

Answer: My concerns were about the delivery of the units, that they were not delivered according to the contract.

Question: • Go ahead. I’m sorry.

Answer: Therefore, we could not repay loans.

Question: And did you discuss those concerns with Lorenzo Muñoz Franco? Answer: Yes, I submitted them. I submitted it.

Question: Okay. And did you have — did you also discuss those concerns with Francisco Sánchez Aran?

Answer: That is, before I discussed them with Attorney Muñoz, I discussed them with Doctor Sánchez.'

Question: And Ms. Enriquez, you testified you had discussions with Lorenzo Muñoz Franco as well as Francisco Sán-chez Aran regarding the manner in which the Modules loans were being handled.

Did you agree with the manner in which these loans continued to be handled after you had those discussions with them?

- The record in the instant case is replete with certifications of constructions signed by co-defendant Ariel Gutierrez for work not performed but paid by the Caguas Central Bank; millions of dollars paid for houses not constructed (1.2 million dollars paid to Modules at Los Caciques in construction certifications for work not undertaken (Ex. 1(e), D. 1502); loans not authorized by the Board benefitting the Modules Plant, Los Caciques $603,000 loan authorized without Board of Director’s approval (Ex. 1(e), D. 1502); moneys disbursed from construction loans to pay other Gutierrez’s loans (Los Caciques $65,000, Cerro Vista Project $932,177) (Ex. 1(g), D. 1502); pre manufacturing expenses allegedly incurred by the Modules Plant but not a single unit was manufactured, $751,500.00 and $157,500.00 at the Cerro Vista, (Ex. 1(g), D. 1502); payments for foundation work not poured or set at the construction site, $66,000.00 Jardines de Villa Alba, (Ex. 1(d), D. 1502); moneys disbursed prior to construction; the signing of the construction loan agreement, $231,000.00 Jardines de Villa Alba (Ex. 1(d), D. 1502); moneys paid by third parties to Modules to be applied to loans but Modules retained the money and fails to pay the bank loans, (Los Mameyes Project, Ex. 1(f), D. 1502); $1.2 million paid by P.R. Housing Authority to Modules — Modules retained the money and failed to pay for the advanced money provided by the Bank). The moneys received were not mere book keeping entries and/or signed notes. See generally Ex. I(a)-I(g) of Opinion and Order of February 11, 2004, Docket No. 1502. Ariel Gutierrez benefited from the payments, loans were paid and/or partially paid, guarantees must have logically been released upon payment. (No proof has been received in evidence that Ariel Gutierrez col-laterals were executed by the bank on Modules’ loans that failed.) Because the court only calculated loans up to $5,000,000 pursuant to the November 1, 1987 Guidelines, § 2F 1.1(b)(1)(E), notwithstanding that unearned direct disbursement money far exceeded of $5 million, the court declined to downward depart as to Ariel Gutierrez, Docket 1520, p. 16.

Interestingly when a new general contractor developer/borrower substituted Transglobe Manufacturing (Gutierrez’s corporation) as the general contractor, the bank permitted the Modular Company to remain as the manufacturer of the houses notwithstanding its utter failure in performance records. The new developers were sought by Ariel Gutierrez and Wilfredo Umpierre and accepted by the Bank.

For example, developer Montilla was rejected prior thereto three times by the Caguas Bank but was accepted, contingent on the use of modules houses manufactured by Gutierrez.' (Docket 1118, p. 3-5, Tr. Montilla.) Montilla was found as a developer/new borrower by co-defendant Wilfredo Umpierre. He received funding in one month of $1,000,000.00 for Jardines de Villa Alba. In relation to this loan, Modules received direct payment of $230,000.00 from the loan proceeds without approval or knowledge of Montilla. (Docket 1118, p. 13, Tr. Montilla.) The loan settlement was faulty, in'reality instead of budgeted $747,500 available to Montilla to develop the project only $485,000.00 was available. (Docket 1339, p. 14.) Montilla further testified that several checks appeared endorsed by him when in fact he did not endorse them. The result was that Modules (Gutierrez company) received disbursements directly from Caguas Central without approval from Montilla. . Hence, the conspiracy continued, the misrepresentations to the Board continued, the scheme continued but this time using new developers, who also lost moneys to the benefit of Modules.

A 'similar scenario occurred with new general contractor Mr. Enrique Santiago, who was also accepted as a new general contractor contingent on the use.of Modules houses for the refinancing of the loan.

“Ariel Gutierrez offered to obtain financing from Caguas Central for Mr. Santiago if he used modules for his project. T.T. E. Santiago, 7/3/01, p. 14 (Docket No. 998). Ariel Gutierrez obtained financing for Mr. Santiago from Caguas Central in approximately four weeks. Id. Mr. Santiago testified that he never received any of the $750,000 disbursed by Caguas Central. Id. p. 33. Further testimony established that Mr. Santiago never knew he had obtained financing, some checks were made to the order directly from Caguas Central to Modules, other checks seemingly endorsed by Mr. Santiago were not endorsed by him at all, and one check was even used to pay a Module commercial loan with Caguas without Mr. Santiago’s knowledge. Id. See also Exhibit 15(gg).” Docket 1339, p. 15.

New developer John Burns also experienced similar preferential treatment by the Caguas Bank if Modular units were used.

“John Burns, another housing developer testified that his request for financing of a two hundred (200) conventional unit housing development had been repeatedly denied by Caguas Central. Defendant Umpierre made Mr. Burns an offer similar in nature to that received and accepted by Mr. Santiago and Mr. Mon-tilla. Umpierre would obtain the financing if Mr. Burns used modules instead of conventional housing units. Mr. Burns accepted the deal. After one week, Cag-uas Central approved an $8.9 million dollar loan for the Cerrovista project. T.T. J. Burns, 8/17/01, p. 16, 24 (Docket No. 1073).

When Sanchez-Aran made the pitch for the Cerrovista loan to the Caguas Federal Board of Directors, a $1.4 million dollar request was made for land costs. The actual land cost was $480,000. The difference was ultimately utilized to repay prior outstanding debt owed by Modules to Caguas on other loans and bring the Gutierrez loans to current status. Exhibits 24(a), 59,. 10(a), 116(a), 2(d). The jury could have easily concluded that Ariel Gutierrez and Um-pierre were basically finding developers without the ability to obtain financing, and using the developers as fronts to obtain funds directly from Caguas Federal. The disbursements were then made to keep loans current and consequently prevented any Gutierrez companies from falling into bankruptcy.” Docket 1339, p. 15-16.

This evidence was presented in addition to the Gutierrez connection with Munoz-Franco arid Sanchez-Aran in regard to not properly presenting all loan information to the Board of Directors as to Modules corporations, disbursing funds prior to loan approval, allowing over nine hundred thousand in overdrafts to Modules corporations, establishing nominee loans disguising Modules loans, and using false certifications at .the request of Defendant Ariel Gutierrez and/or Defendant Wilfredo Umpierre (certificates ahead of the actual construction). Without the critical aid of Ariel Gutierrez and Umpierre, the activities of the senior officials at Caguas Central would have been impossible and fruitless. While the acts of Ariel Gutierrez and Umpierre are sufficient to establish Count 3, their involvement and assistance with the actions of Munoz-Franco and Sanchez-Aran is also sufficient to establish them as aiders and abetters to bank fraud.

As to the required intent to defraud Caguas Central, the evidence and testimony presented regarding the misrepresentations and fraudulent pretenses surrounding the various loans and disbursements to Modules more than substantiate the fact that Ariel Gutierrez and Umpierre intentionally acted to defraud Caguas Federal and obtain funds through their illegal actions. Offers to obtain funding, acceptance of disbursements to other unrelated loans payments of submitted false construction certifications, misstatements to presentations to the Board of Directors would not have taken place but for the intent on the part of Defendants to defraud Caguas Central and of illegally' obtaining the necessary funds for the Bank to stay afloat and repay prior debts of noncomplying loans.

E. EVIDENCE AS TO MISAPPLICATION COUNTS AS TO MODULE LOANS

The evidence as to, misapplication of Counts V-VII was indeed clearly incriminating. Relating to the Cerrovista loan, a written representation was made to the Board of Directors that the money needed from loan proceeds for land cost was to be $1.4 million and was to be applied for this purpose. The actual land cost was $480,000.00. Only the $480,000.00 was actually used for the purchase of land despite the more lucrative but false representation to the Board and subsequent disbursement of land cost. (Docket 932, p. 117, T.A. Enriquez). (See also Docket 1339, p: 19). The Board was advised that the loan settlement agreement showed that $855,323 would be used for the repayment of Quintas de Humacao Project. Little did the Board know that not only was more money to be disbursed, $932,177, but also that the moneys were not to be used to pay principal and interest in the Quintas de Fajardo loan, but also for interest due the Gaviotas Loans, and interest on a Modular commercial loan (Ex. 24(a), 59, 10(a), 116a, 2d. T.A. Enriquez, 4/26/01, p. 140, D. 932).

“This is a clear unambiguous exámple of a disbursement from one loan being used to the repayment of another loan totally ignored but disguised to the Board of Directors. Further, at no point were the funds authorized by the Board of Directors paid to Quintas de Humacao as specified by the Board of Directors rather the monies were used for the repayment of four unauthorized and undisclosed prior construction and commercial loans of Gutierrez corporations.” The excess of land cost monies were used to repay other construction loans. (D.1339, p. 19)

The Board was not only deceived as to the extent of the partial assumption of loans, but was also deceived as to who was ultimately to receive the bank funds. Further, the $855,323 was increased to $932,177.00, and were not used for infusion of moneys into the Humacao Project, but were instead also used for repayment of various other debts owed by Gutierrez to Caguas Central. This particular use of funds was never approved or envisioned by the Board of Directors.

Defendant Sánehez-Aran has challenged the misapplication counts alleging that the $932,177 were not bank funds. The court strongly disagrees. First, there was an unauthorized increase from $855,323 to $932,177 (that is $76,854.00). Second:

“... Defendant Sanchez-Aran argues that since Caguas Central issued a check to the Gutierrez for the ‘purchase’ of Quintas de Humacáo, the funds belonged to the Gutierrez, and any action taken from that point cannot be misapplication since the funds no longer belong to Caguas Central. Defendant Sanchez-Aran then concludes that only the first transfer from Caguas Central to the Gutierrez could be a misapplication since that was the only transfer of ‘bank’ funds. Defendant’s argument is faulty.”

The funds did not cease to be controlled by the express purpose for which they were disbursed. The. Board of Caguas Central authorized the disbursement of funds to Quintas de Humacao for the repayment of the Quintas de Humacao loan. This was the purpose for which the funds were disbursed and any other use of Caguas Central’s funds would be misapplication. The fact that the $932,177 check was endorsed does not change the express purpose for which said funds were to be used. The second transfer, the Gutierrez’ endorsement back to Caguas Central for the repayment of four separate loans, ,is still the use of bank funds and subject to misapplication. At no point could the disbursement by Caguas Central be characterized as anything but funds of Caguas Central subject to the conditions set by the bank itself.

In this case, the misapplication occurred when Defendants used Caguas Central funds without approval from the bank itself as to the amount of funds to be disbursed, how the funds were to be used, or who was to use the funds. This was accomplished by withholding information from the Board of Directors when the loan was presented, making decisions regarding Modules without approval from the Board of Directors, and by failing to notify the Board of Directors that loans were being used to make principal and interest payments on other unrelated Gutierrez loans. Because of the actions of Munoz-Franco, Sanchez-Aran, Ariel Gutierrez, and Umpierre, the Board of Directors of Caguas Central Federal Savings and Loan Association of Puerto Rico was unable to make properly informed decisions regarding how the bank funds were to be utilized.” ■ (Emphasis ours) See Docket 1339, p. 20-21.

F. DENBY LETTER

The Denby letter, dated January 10, 1988, Ex. 186, is a response to an auditor from the Federal Home Loan Bank directed to the government bank auditors. It is a letter prepared by co-defendants Muñoz-Franco and Sánchez-Arán for the Board of Directors to consider. The Board of Directors depended on the representations made by Muñoz-Franco and Sánchez-Arán. (The discussion of the Denby letter- was an object of two Opinions of the court at Dockets 1502, p. 4-6, and Docket 1526.)

Question: “And who prepared the response to the Bank examiners?”

Answer: The President [Muñoz-Franco] and the Executive Vice-President [Sán-chez-Arán]. (Docket 1339, p. 9 § 3.)

The Denby letter contains various misrepresentations. The letter contains misrepresentations as to various operational issues which are matters not known by Board members. The document also contains other critical material misrepresentations.

“This Board of Directors wishes to state in no unclear terms and uncertain terms that it has never considered and much less approved any policy or practice of permitting borrowers to use construction loan proceeds to satisfy or make payments on other unrelated loans.”

Mr. Kareh, the Manager of the Construction Loan Department, spent thirty-two days on the stand at trial explaining, on a loan to loan basis of the Modular Construction loans of Mr. Gutierrez and on the loans of Mr. Mirandes, how millions of dollars were moved to repay principal and/or interests of other prior noncomplying loans and how the moneys were diverted to other construction expenses of other construction project financed by the Cag-uas Bank. The testimony was not opinion testimony but testimony based on the issuance of checks and the tracing of their movement. The moneys of newly granted loans were used to satisfy principal and/or interest in past noncomplying loans, all corroborated through the ledger cards of all the loans stated in the indictment and the ledger cards of the construction projects where the moneys entered. The result was inevitable, the newly granted construction project, suffering the loss of funds, was doomed to fail. (All the Gutierrez construction projects, object of the indictment, failed.) Further, an illusion of economic well being was being fictitiously created to Directors and regulators as the impression was being created that principal and interests were being properly paid. (Docket 1339, p. 10, no. 5.) During 1984-1986 not a single penny was paid by the Modular' Construction Company of principal and interest that was not derived from loans provided by the Caguas Bank. (Docket 1339, p. 10, no. 5) (testimony of Mr. Fabregas 6/7/01, Docket 966, p. 48-63). The bank was fictitiously creating economic gains from interest paid and was, hence, not forced to carry the losses of the loans not properly being reported to government auditors. The bottom line was a fictitious financial report to the Board of Directors. Muñoz-Franco and Sánchez-Arán received considerable pay increases and bonuses during the periods of time that the described loans kiting procedure occurred. (See Docket 1520, p. 2-4; describing bonuses and increases received by Muñoz-Franco and SáncheznArán during said period of time.)

The Denby letter response also created the impression that the Board had full knowledge of the banking relationship with Modules which they clearly did not. (The Board had no knowledge that Modules remained as house manufacturers in refinanced construction projects wherein they had previously failed ks debtors, general contractors, arid manufacturers of houses. (Docket 1339,-p. 11.) (Testimony of Board Director Lugo and Executive Anabel Enri-quez) (compare to the statement at Docket 1339, p. 11, N. 6'.)

Further, the Denby letter totally misrepresented facts relating to the Villa Alba Project. The housing project had already been totally paid to Modules including certifications for foundations. The letter stated that there would be no loss because with the houses built at the project were sufficient equity for the bank. The problem was that there was only, one house built and erected at the project of the twenty-three houses fully paid. (Docket 1339, p. 13-14.)

G. MISREPRESENTATION AND/OR MATERIAL OMISSIONS TO THE AUDITORS BY SANCHEZ-ARAN AND MUÑOZ-FRANCO

(1) Substantial moneys were distributed to Modules not only ahead of schedule under false certifications but without informing the auditors that the sales of the houses were minimal. (Docket 1339, p. 12.)

(2) Sánchez-Arán had the duty to disclose that he was approving construction certificates for work not performed. (Docket 1339, p. 13.) This fact affected adversely the condition of the loan.

(3) Muñoz-Franco and Sánchez-Arán failed to timely disclose that new unrelated construction housing loans were being used to repay noncompliance principal and interests of prior loans. (Muñoz-Franco and Sánchez-Arán finally later admitted this fact to the auditor Joseph González).

(4) The Caguas Bank should not have been reporting as income the money transfer from new construction loans to repayment of past construction loans.

(5) The construction loans for Modules and Mirandes showed the recognition of income on its books despite the fact that it was an inappropriate and a fictitious income.

(6) Loans receiving substantial moneys in principal and interests from other unrelated loans should have been reported.

(7) Loans were increased and/or provided without Board approval (see discussion infra).

The net result of the scheme created by co-defendants Muñoz-Franco and Sán-chez-Arán included payments of false construction certificates, payment of overdrafts in excess of $950,000.00, nominee loans in excess of $100,000.00, check kiting schemes, the issuances of new construction loans to cover up failed construction loans, and continuance of the scheme through the refinanced loans. The scheme constituted a sophisticated kiting scheme made not through checks but by using construction projects involving Modules houses manufactured by corporations directed by co-defendant Ariel Gutierrez. The described scheme created a fictitiously framed bottom economic line benefitting the Caguas Bank similar to the facts set forth in United States v. Stedman, 69 F.3d 737, 738-741 (5th Cir.) cert. denied 517 U.S. 1250, 116 S.Ct. 2512, 135 L.Ed.2d 201, rehearing denied 519 U.S. 912, 117 S.Ct. 280, 136 L.Ed.2d 200 (1996), where the Appellate Court determined as improper the withholding, by corporate executives, of similar pertinent information from regulators causing that “intended loss” to be assessed as to the entire resulting loss of the loan.

H. THE MIRANDES CONSPIRACY

Much of the conduct outlined above regarding the Gutierrez’s loans as to Modules corporations involving Muñoz-Fran-co and Sánchez-Arán was also taking place simultaneously as to the Mirandes’ loans. Loans were disbursed without Board’s Directors full knowledge or approval and loans were used to repay interest on other Mirandes' loans (the loan documents did not reflect that they constituted “work out loans” nor was the Board of Directors advised that the loans constituted work out loans). Construction certificates were authorized for work not performed and/or incomplete, notwithstanding certified as in compliance of work performed. Further, funds of loans were deviated for construction expenses of other unrelated projects. See generally, Sentencing Opinion and Order, February 11, 2004, Docket 1502, Ex. 4 II(a)-(m).; Valle Bello Project (Ex. I(i)-(e), D. 1502, $200,000.00.); Villa Santa Juanita (Ex. II(k), Docket 1502, $162,000.00); Paseo Santa Juanita Project, Ex. II(j), Docket 1502, $93,000.00; Valle Piedras Project (Ex. II(I), Docket 1502, $185,000.00. All of these loans were post October 12, 1984, that is after the enactment of the criminal statute. -Mirandes further protested the use of new loans to repay past existing loans, but Sánchez-Arán insisted that the plan had to be followed. (Docket 1092, p. 125.) Further, the Caguas Bank made direct transfers of funds from Mirandes’ loans to Caguas Bank for repayment of other loans without Mirandes’ authorization. (Docket 1092, p. 73). Although the Bank official that was primarily involved in the supervision of the Mirandes’ loans was Sánehez-Arán, Mu-ñoz-Franco had direct contact with Mi-randes concerning these loans, reviewed' Board óf Directors minutes and was kept well-informed. (T. Enriquez, Docket 929, p. 40, 45, 46, Docket 929; Docket 930, p. 83, 95; Tr. Mirandes 8/21/01, Docket 1092, p. 26, 83-85.) Examples of construction loans of Mirandes wherein loan proceeds were used to repay prior loans are, amongst others, the following: (1) Villas del Gurabo II — $100,000 used to pay other loans, Ex. II(s), Docket No. 1502 (November 1985-August 1987); (2) Jardines de Bubao. Project, a loan executed on December 1984, after enactment of the criminal statute, wherein $25,000.00 were used to pay Reparto Valenciano Project, and $500,000.00 to pay other construction loans. (Docket No. 1502, Ex. II D; (3)Jar-dines de Bubao II Project, a loan executed on April 2, 1985, wherein $478,000.00 was disbursed to pay other Mirandes’ Project, Docket No. 1502, Ex. 11(e). There were also other instances wherein the loans were considerably augmented without no-, tice nor approval from the Board of Directors. (Valle Bello Project, August 1989, Docket No. 1502 Ex. II(m), a $525,662.00 loan increase was disbursed as an unauthorized loan increase).

The Court grants and concedes that evidence as to loans pre October 12, 1984 was presented before the jury. Only two loans are pre October 12,. 1984, Villa Gurabo and Reparto Valenciano. Thirteen projects were disbursed post October 12, 1984. The evidence was admitted as background evidence to: (1) demonstrate a pattern of special treatment received by Mirandes, who was Muhoz-Franco’s neighbor. As to these loans, the following occurred: (a) Loans amounts were disbursed ahead of Board authorization, ($400,000.00 Reparto Valenciano) and; (b) increases in loans were not authorized ($1.8 million Reparto Valenciano, (Ex. 11(a), Docket 1502). This particular evidence demonstrates that the policy of payments from one loan to another dated since at least 1983 (Villa Gurabo II Project, Ex. 11(b), Docket No. 1502.); further, and most critical, (2) to demonstrate that payments from subsequent loans granted after October 12, 1984 were used precisely to repay these first two loans or other prior loans of Mirandes Roque.

As in the case of the Gutierrez’s loans, payments of construction certificates were made ahead of schedule by specific authority of Sánchez-Aran and with the knowledge and approval of Muhoz-Franco.

Question: “Ms Enriquez, these certifications, the Caciques certifications [post October 12, 1984], we just reviewed and the ones that we just reviewed for Ma-meyes, which have your in initials to the certification, were the approvals for the disbursements or those monies based solely on your decision?”

Enriquez; “No.”

Question: Under whose authorization were those disbursements made?

Enriquez: “My immediate superior Doctor Sánchez.

Question: “Okay. Now, Ms. Enriquez, was this usual for Doctor Sánchez Aran as chief lending officer of the bank to become involved in the payment of construction certifications?”

Enriquez: “Any time we needed to discuss certifications with him we would do so.”

Question: “But my question was, was it usual for him to become involved in the payment of these certifications?”

Enriquez: “In those loans involving Modules or Mirandes, yes.”

Docket 943, p. 44-45, Tr. A. Enriquez. Question: “... did the manner in which the Gutierrez certifications were handled at the bank, cause you any concern?”

Enriquez “Yes.”

Question: “Why was that?”

Enriquez: “Because practically monthly, each time they invoiced the certification would be ahead of construction. The projects weren’t being delivered. Thus, the interest would be spent out on the project.”

Question: “And did you discuss these concerns with anyone.”

Enriquez: ‘Yes.”

Question: “At the bank?”

Enriquez: ‘Yes.”

Question: “Okay. And with whom did you discuss these concerns at the bank?” Enriquez: “As much with Doctor Sán-chez-Aran as with Counsel Muñoz Franco.” Docket No. 943, p. 46, Tr. A. Enri-quez.

Of all the construction loans of the Caguas Bank, only the Gutierrez’s and Mirandes’ loans received preferential treatment in the form of authorization by Sánchez-Arán of construction certificates for work not performed. (Tr. A. Enri-quez 5/8/01, p. 39, Docket No. 944). The final economic result of the Mirandes’ loans granted by the Caguas Bank was that when the Mirandes’ companies ceased .to exist due to insolvency, they owed the Caguas Bank $23 million, (Docket No. 1339, p. 41; Docket No. 1092, p. 133). The Gutierrez’s loans produced a loss to. the bank in excess of $10 million (Sentencing Opinion and Order, Feb. 11, 2004, Docket No. 1502).

As to both, the Gutierrez’s loans and the Mirandes’ loans a well-developed and carefully thought out fraudulent scheme was executed by co-defendants to postpone the financial collapse of the institution creating a fictitious financial scenario of performing loans, of income derived from past loans when in reality they were non performing loans which mandated reserves causing losses. The plan disguised the true financial reality of the bank. The facts are remarkably similar to the financial disguise to the Board of Directors found in the case of United States v. Stedman, 69 F.3d at 739. In Siedmcm, the Court stated that as a result of the scheme of the two officers of the bank, the bank “avoided unwelcome decreases in capital because the regulators did not require it to increase its loan losses reserves, which would have been the likely result had [the regulator^]] not been denied access to the negative borrower information. By this scheme [the bank’s] assets were fraudulently-made to look better than they were.”

Finally, contrary to the seemingly attractive argument made by co-defendants Muñoz-Franco and Sánchez-Arán, the defendants enjoyed a personal gain by the scheme. They retained employment and were granted generous increases and bonuses by not revealing to regulators and/or the bank directors the true financial status of the Gutierrez’s and Mirandes’ loans.

“... they both received considerable increases in salary and bonuses during the period of time of the conspiracy. The increases and/or the bonuses were directly related to the economic performance of the Cáguas Federal. Co-defendant Muñoz-Franco received in 1984 an $80,000.00 bonus based on an extraordinary economic performance of the Cag-uas Federal Bank for the year 1983, Sánchez-Aran received' a bonus of $45,000.00, (Ex. 68B, Board of Director’s Compensation Committee Minute of January 12, 1984). Muñoz-Franco further received a bonus of .004684% of a 11.1 million-dollar profit of the bank ($52,000.00) effective November 1, 1984 and Sánchez-Aran a bonus of .00375% of a 11.1 million profit ($41,600.00) effective November 1, 1984. (Ex. 62-C Board of Director’s Compensation Committee Minute of Jan. 10, 1985). (See Ex. A and B to this Order.) Further, during the years of the conspiracy the defenr dants received considerable increases in salary based upon “excellent performance during last year’s operations [of the Bank]. A net income of 12.3 million and a substantial production of productive assets was realized this year [1984].” (Ex. 70b, Minute of Board of Director’s Compensation Committee of November 27, 1985.) (Ex. “C” to this Order.) An examination of the salary of co-defendant Muñoz-Franco reveals that he received an increase in salary from a total compensation of $163,167.00'in 1983 to $263,000.00 in 1984 to $276,784.00 in 1987. Co-defendant Sánchezr-Aran received an increase from $91,500.00 in 1983 to $150,300.00 in 1984. (Ex. ZZ1 and ZZ, Ex. D and E of this Order.) Both continued receiving excellent salary benefits; co-defendant Muñoz-Franco raising- to $276,784,00 in 1987 and co-defendant Sánchez-Aran to $291,400.00 in 1988 (see Ex. ZZ-1, Ex. D of this order).

All the increases and bonuses to co-defendants Muñoz-Franco and Sánchez-Aran were granted by the Board of Directors based on the “excellent performance” of the bank. However, that performance is tarnished by the conduct of defendants of creating “a well developed scheme to disguise the true economic state of Modules and Mirandes’s loans. The conduct was a sophisticated kiting like scheme using construction loans instead of checks,” (Sentencing Opinion and Order of February 11, 2004, Docket No. 1502, p. 6). Through this scheme construction certifications were paid notwithstanding that they were not earned; moneys from construction loans were used to pay interest and principal of other past due construction loans; moneys were advances for houses not constructed and/or moneys were advanced to start up the Modules factory (pre manufacturing expenses) for a housing project and not a single house was constructed. See Ex. 1(g) at Docket 1502. The net result is that the bottom profit line was considerably enhanced because interests of payments were being recognized as income when the payments were made from other construction loans; further non performing loans were disguised by making them current and performing loans through the granting of subsequent loans for other construction projects. The reserve properly made would have further lowered the economic bottom line. Hence the “kiting like scheme” set forth in the instant case, as in the case of United States v. Stedman, 69 F.3d at 739, was designed to “make loans appear healthier to the regulators” and hence appear to the Board of Directors as a healthier bank institution.” Docket 1520, p. 2-4, Order as to Downward Departure Request, March 1, 2004.

IV. THE STANDARD FOR BAIL ON APPEAL, 18 U.S.C. 1343

Release or detention pending appeal by the defendant:

(1) ... [t]he judicial officer shall order that a person who has been found guilty of an offense and sentenced to a term of imprisonment, and who has filed an appeal ... be detained, unless the judicial officer finds:

(A) by clear and convincing evidence that the person is not likely to flee or pose a danger to the safety of any other person or the community if released ...; and

(B) that the appeal is not for the purpose of delay and raises a substantial question of law or fact likely to result in-

(i) reversal,

(ii) an order for a new trial,

(iii) a sentence that does not include a term of imprisonment, or

As to bail on appeal, the defendants have the burden of proof in their requests. United States v. Bayko, 774 F.2d 516, 520 (1st Cir.1985). Further, the statute has a strong language that a convicted felon “shall [be] order[ed][to] ... be detained unless the person meets the two required criteria.” The first criteria is that the person is not “likely to flee” or “pose a danger to the safety of any other person ... or to the community if released.” The Court harbors no doubt that all defendants

convicted will not flee and that, by the nature of the crime involved, bank fraud, they do not pose a danger to the community. The Court is also aware that as to the second criteria applicable, the jurisprudence of the First Circuit Court does not envision that the “substantial question-of law presented” requires a “result [of] reversal” but merely that the issue presented be a “close question” or “one that very well could be decided the other way,” United States v. Bayko, 774 F.2d at 522-523 citing United States v. Giancola, 754 F.2d 898, 901 (11th Cir.1985). The Court shall therefore use this standard. See also United States v. Colón Berríos, 791 F.2d 211 (1st.Cir.1986), dissenting opinion Torruella C.J. (citing the Bayko standard).

There are, however, noteworthy otherwise applicable ground rules: a party may not raise arguments, not raised below, at the bail request or on appeal. United States v. Bayko, 774 F.2d at 517-518 citing Tarrant v. Ponte, 751 F.2d 459, 461 n. 5 (1st Cir.1985) the matter is subject “to plain error” exception under Fed. R.Crim.P. 52(a). The “plain error” doctrine includes even ex post facto arguments as specifically determined in United States v. Bayko, 774 F.2d at 518. (Citations omitted.)

A. DR. FRANCISCO SANCHEZ-ARAN

Having developed the factual scenario landscape and having set forth standard for bail in the First Circuit domain, the Court shall entertain the bail on appeal matter per individual co-defendant. The Court selects Dr. Francisco Sánchez-Arán first. Co-defendant, Dr. Francisco Sán-chez-Arán, hereinafter referred to as Sán-chez-Arán, originally filed his motion for release on bond on February 11, 2004, (Docket No. 1501), followed by a motion entitled Dr. Francisco Sánchez-Aran’s Reply in Support of Motion for Release Pending Appeal dated June 6, 2004, (Docket No. 1570), and later filed Motion Requesting Leave to File Nunc Pro Tunc the aforementioned Reply dated June 24, 2004, (Docket No. 1595). Further, on July 15, 2004, co-defendant Sánchez-Aran filed a motion to reopen sentencing with respect to Counts I-IV or, in the alternative, Motion for Leave to Supplement Reply in Support of Motion for Release Pending Appeal, (Docket No. 1606). This last motion is based on Blakely v. Washington, 542 U.S. -, 124 S.Ct. 2531, 159 L.Ed.2d 403 (2004), decided by the Supreme Court on June 24,' 2004 and under the predecessor Apprendi v. New Jersey, 530 U.S. 466, 120 S.Ct. 2348, 147 L.Ed.2d 435 (2000). Co-defendant Sánehez-Arán has also filed a Motion to Extend Self Reporting Date filed on July 14, 2004, (Docket No. 1605), which is moot since the Court had extended the date of self reporting first until October 30, 2004, (Docket No. 1620) then until November 29, 2004, (Docket ,1633) and finally until thirty days after resolution of the instant matter. The Court’s delay was caused by the assignment to the undersigned of the Puerto Rico electoral cases and the court preferring to prudently wait for the outcome of the decision in United States v. Booker and United States v. Fanfan, 543 U.S. -, 125 S.Ct. 738, — L.Ed.2d — (2005). Furthermore, Sánehez-Arán has filed a Motion entitled Emergency Motion for Rulings for Release Pending Appeal, to Reopen Sentencing, etc., (Docket No. 1609), which is partially moot because the Court had extended the reporting date and because in this Opinion and Order the Court resolves all pending issues as to the Bail on Appeal and as to the request of Re-sentencing or Stay Pending Appeal under Fed.R.Crim.P. 38, (Docket No. 1609). The Court acknowledges yet another motion filed by all co-defendants to extend the reporting dates thirty days after the court rules, should the ruling be adversed to co-defendants (Docket No. 1635). Finally, co-defendant Sánehez-Arán filed a motion entitled Leave to File Reply to Government’s Response ... Posing Blakely Issues filed on August 24, 2004, (Docket No. 1614).

The Court first addresses the various requests by counsel to authorize Leave to File a Reply, (Docket Nos. 1595 and 1600). The Court grants the leave and hence the Reply filed at Docket No. 1591 and tendered at Docket No. 1595 and 1600 are hereby authorized. The granting of the Reply as to co-defendant Sánchez-Aran is reciprocal to the Court’s authorizing the late Replies by the Government since the A.U.S.A. attending the instant eighteen-month trial had been serving as counsel at the Embassy in Colombia and, hence, all government replies had an inherent logistical problem. Further, all other A.U.S.A. then handling the trial were transferred from the local U.S. Attorney’s Office in Puerto Rico.

2. THE BLAKELY V. WASHINGTON ISSUE

On July 15, 2004, co-defendant Sánchez-Aran filed a Motion to Reopen Sentencing based on Blakely v. Washington, 542 U.S. -, 124 S.Ct. 2531, 159 L.Ed.2d 403 (2004). (Docket No. 1606). The co-defendant had filed previously a motion based on Apprendi v. New Jersey, 530 U.S. 466, 120 S.Ct. 2348, 147 L.Ed.2d 435 (2000) but as to another clearly distinct issue: The fact that the statutory maximum under .the statute 18 U.S.C. 1344 had changed from five (5) years to twenty (20) years on August 9, 1989, to thirty (30) years on November 29, 1990, all during the conspiracy and the jury had not made a finding of fact as to specific years of liability under the conspiracy. Co-defendant Sánchez-Aran m