Unreported / Non-Citable
Background
Eric Reed Marascio participated in a scheme to defraud the Paycheck Protection Program orchestrated by Andrew Moran. In June 2020, after learning from co-conspirator Michael Hill about “forgivable loans” requiring minimal information, Marascio provided his personal information to Moran, who submitted a fraudulent PPP application on Marascio’s behalf claiming his business, the Hazelnut Café, employed nine workers with monthly payroll exceeding $90,000. In reality, Marascio was the sole employee.
Marascio received a $225,745 PPP loan. Following the scheme’s template, he paid Moran a 10% fee, invested $150,000 with a purported foreign exchange trader promising returns sufficient to repay the loan with profit, and spent $30,000 on a pickup truck. Subsequently, Marascio sought compensation from Moran to recruit additional conspirators and successfully brought in Hector Reyes, earning $5,000 for his efforts.
A grand jury indicted Marascio and 17 others. While most co-conspirators pleaded guilty, Marascio and Cord Newman proceeded to trial. The jury returned guilty verdicts for both on conspiracy to commit wire fraud and conspiracy to commit money laundering after deliberating less than ninety minutes.
The Court’s Holding
The Fifth Circuit affirmed Marascio’s convictions on both the sufficiency of evidence claim and the prosecutorial misconduct allegation. On sufficiency, the court held that circumstantial evidence amply supported Marascio’s knowledge of and specific intent to commit wire fraud. His active participation—seeking the fraudulent loan through Moran’s pay-to-play model, spending none of the funds on legitimate payroll, investing the proceeds for personal gain, purchasing luxury items, and later recruiting others for compensation—demonstrated he understood the scheme’s illegality. Co-conspirator Hill’s testimony revealed the group’s shared understanding: obtain PPP money through fraud, invest for personal profit, and repay the loans from ill-gotten gains.
Regarding the prosecutor’s closing argument—specifically the rhetorical question “Why did they plead guilty, each of them?”—the court found no impropriety or harmless error. Four factors governed admissibility of co-conspirator guilty pleas: the court provided a limiting instruction; the Government had a proper evidentiary purpose (rebutting the defense’s claim that only Moran knew the scheme was illegal); the reference appeared only once and was not emphasized; and the defense did not invite the reference by mentioning pleas first. Even assuming arguendo the statement was improper, Marascio failed to show it substantially impaired his rights. The single question was unlikely to sway the jury when the Government’s case primarily relied on co-conspirators’ testimony regarding Marascio’s active involvement, not their guilty pleas.
Key Takeaways
- Circumstantial evidence—including participation in the fraudulent scheme, failure to use loan funds legitimately, personal profit-taking, and recruitment of others—suffices to prove specific intent in wire fraud conspiracy cases.
- A single mention of co-conspirators’ guilty pleas during closing argument does not constitute reversible error when accompanied by a limiting jury instruction and lacks emphasis.
- To preserve a prosecutorial misconduct argument, defendants must formally object and request a ruling from the trial court; a defense counsel’s informal complaint at a bench conference may not suffice.
Why It Matters
This decision reinforces Fifth Circuit precedent that prosecutors enjoy substantial latitude in addressing defense theories during closing argument, even when referencing co-conspirators’ guilty pleas. For defendants challenging such statements, the opinion underscores the critical importance of formal preservation—silence or informal objections will not preserve appellate review and may trigger plain error analysis instead.
The holding is significant for ongoing PPP fraud prosecutions, clarifying that guilt can be established through defendants’ conscious participation in and knowledge of fraudulent schemes, rather than requiring direct admissions. The court’s evidentiary analysis—permitting inference of fraudulent intent from conduct patterns like luxury purchases funded by loan proceeds—provides prosecutors a roadmap for circumstantial evidence at trial.