Justia U.S. 2nd Circuit Court of Appeals Opinion Summaries

Defendants Dey and Finazzo were involved in a conspiracy to use South Bay as a supplier of Aeropostale apparel in exchange for secret payments. Finazzo was a former merchandising executive for Aeropostale, and Dey controlled South Bay, a clothing vendor. Dey plead guilty to conspiracy, and a jury convicted Finazzo of one count of conspiracy to commit mail and wire fraud and to violate the Travel Act, 18 U.S.C. 371, fourteen counts of mail fraud, and one count of wire fraud. The court affirmed the district court's jury instructions regarding the "right to control" property under the mail and wire fraud statutes; concluded that there was sufficient evidence to support the challenged portions of the jury verdict; but, vacated and remanded the district court's restitution order as to Finazzo and Dey. In a simultaneously issued summary order, the court affirmed the remaining issues on appeal. View "United States v. Finazzo" on Justia Law

Defendant was convicted of wire fraud and conspiracy to commit wire fraud. The district court sentenced defendant to 120 months in prison, entered an order of forfeiture in the amount of $2.4 million, and ordered restitution in the amount of $2.4 million. The court concluded that the district court erred in applying the two sentencing enhancements for receiving gross receipts in excess of $1 million from a financial institution pursuant to U.S.S.G. 2B1.1(b)(16)(A) and for abuse of a position of trust pursuant to U.S.S.G. 3B1.3. In a summary order published contemporaneously with this opinion, the court affirmed the district court’s judgments on the indictment and sentencing enhancement for a loss figure of $8.1 million, and declined to resolve defendant's ineffective assistance of counsel claim. View "United States v. Huggins" on Justia Law

Defendants Ahmed A. Algahaim and Mofaddal M. Murshed appealed their convictions for offenses concerning the misuse of benefits under the Supplemental Nutrition Assistance Program (SNAP, formerly food stamps). The court affirmed the convictions and sentence. The court remanded to permit the sentencing judge to consider non-Guidelines sentences in view of the significant effect of the loss enhancement in relation to the low base offense level. View "United States v. Murshed (Algahaim)" on Justia Law

Defendant, the owner and operator of a freight service that couriered items to and from the United States and Canada, was found guilty of nine counts of tax-related offenses. Defendant was charged with violating 26 U.S.C. 7212(a), which imposes criminal liability on one who ʺcorruptly or by force or threats of force . . . endeavors to intimidate or impede any officer or employee of the United States acting in an official capacity under this title.” Another portion of the statute, often referred to as the ʺomnibus clause,ʺ imposes criminal liability on one who ʺin any other way corruptly . . . obstructs or impedes, or endeavors to obstruct or impede, the due administration of this title.ʺ On appeal, defendant argued that the court, like the Sixth Circuit, should construe the phrase ʺthe due administration of this titleʺ in the omnibus clause to include only a pending IRS action of which a defendant was aware. The court rejected defendant's argument and joined three of its sister circuits in concluding that section 7212(a)ʹs omnibus clause criminalizes corrupt interference with an official effort to administer the tax code, and not merely a known IRS investigation. The court also concluded that an omission may be a means by which a defendant corruptly obstructs or impedes the due administration of the Internal Revenue Code under section 7212(a). Finally, the court concluded that the district court did not commit procedural error by using the manner of calculating the tax loss and restitution amounts that it did, or by deciding not to apply a two‐level reduction to defendant's base offense level for acceptance of responsibility. Accordingly, the court affirmed the judgment. View "United States v. Marinello" on Justia Law

Defendant appealed his conviction for one count of conspiracy to defraud the IRS, four counts of client tax evasion, one count of IRS obstruction, and one count of mail fraud. The court concluded that the evidence was sufficient to support the convictions; the indictment was not constructively amended; the indictment was not duplicitous; defendant's due process right to a fair trial was not violated; the district court did not commit prejudicial error in giving a supplemental instruction about the Annual Accounting Rule; defendant's sentence was procedurally and substantively reasonable; and the court rejected defendant's claims of error as to the forfeiture order. Accordingly, the court affirmed the judgment. View "United States v. Daugerdas" on Justia Law

Defendant appealed his conviction of wire fraud, access device fraud, aggravated identity theft, and money laundering in connection with a scheme to make unauthorized credit card charges to the credit cards of customers of defendant's digital retail company. The court concluded that the district court did not err in denying defendant's motion to dismiss the Superseding Indictment for spoliation of evidence where, pursuant to Arizona v. Youngblood, there is no evidence of the government's bad faith. The court joined its sister circuits and held that wire fraud does not require convergence between the parties intended to be deceived and those whose property is sought in a fraudulent scheme. Therefore, the district court did not err in denying defendant's motion to dismiss the wire fraud counts in the Superseding Indictment for failure to plead a legally cognizable scheme. That the Superseding Indictment alleges that defendant's misrepresentations were directed at acquiring banks and others, but that the credit card holders were the intended victims of the scheme, is irrelevant. Accordingly, the court affirmed the judgment. View "United States v. Greenberg" on Justia Law

Defendants Russell and Lange were found guilty of conspiracy to commit wire fraud and securities fraud (Count Two) and substantive securities fraud (Count Three). The jury also found Russell guilty of conspiracy to commit wire fraud in connection with a separate but related scheme (Count One). On appeal, the Government challenges the district court's order vacating Lange's conviction on Count Three. Both defendants challenged their convictions on several grounds. The court affirmed defendants' convictions and concluded, inter alia, that there was sufficient evidence to support the charges. The court reversed the district court's order acquitting Lange on Count Three because the district court erred by concluding that the Government was required to present evidence that Lange aided and abetted the specific acts carried out by other BSMI employees in the district of venue. The court remanded with instructions for the district court to reinstate Lange's conviction on Count Three and to resentence him accordingly. Defendants raised a number of additional arguments which the court considered and rejected. View "United States v. Lange" on Justia Law

Seven years after her term of probation ended, petitioner moved to have her conviction for health care fraud expunged because her conviction prevented her from getting or keeping a job as a home health aide. At issue is whether the district court has ancillary jurisdiction to expunge all records of a valid conviction. The district court relied on States v. Schnitzer and Kokkonen v. Guardian Life Insurance Company of Americas and held that it had ancillary jurisdiction to consider and grant petitioner's motion. However, the court held that Schnitzer only applies to arrest records after an order of dismissal. Therefore, the district court lacked jurisdiction to consider petitioner's motion to expunge records of a valid conviction. The court vacated and remanded with instructions. View "Doe v. United States" on Justia Law

Years after Steven Greenfield was implicated in tax evasion as a result of a document leak, the Government issued a summons for Greenfield’s records, including documents relating to all of Greenfield’s financial accounts and documents pertaining to the ownership and management of offshore entities controlled by Greenfield. Greenfield opposed production and moved to quash the summons based on his Fifth Amendment right against self-incrimination. The district court granted enforcement as to a subset of the records demanded by the summons. The court found that, for all but a small subset of the documents covered by the order, the Government has not demonstrated that it is a foregone conclusion that the documents existed, were in Greenfield’s control, and were authentic even in 2001. Second, the court found that the Government has failed to present any evidence that it was a foregone conclusion that any of the documents subject to the summons remained in Greenfield’s control through 2013, when the summons was issued. Accordingly, the court vacated the district court's order and remanded, because the Government has not made the showing that is necessary to render Greenfield’s production of the documents non-testimonial and, hence, exempt from Fifth Amendment challenge. View "United States v. Greenfield" on Justia Law

Defendant, a licensed physician, appealed convictions stemming from her participation in a broad scheme involving a number of medical services professional corporations (PCs) to defraud insurance companies in connection with claims submitted under New York’s No Fault Comprehensive Motor Vehicle Insurance Reparation Act, N.Y. Ins. Law 5102 et seq. Defendant held herself out as the owner of a PC and represented herself as such on claims. The jury found that, while defendant was the owner on paper, the true owners of the clinic were coconspirator nonphysicians. Defendant principally contends that the jury should have been instructed, in determining the question of ownership, to consider only the formal indicia of ownership, and not the economic realities. The court concluded, however, that New York law is clear that ownership for purposes of New York insurance law is based on actual economic ownership. The court held that, as in the civil context, a factfinder in a criminal case may properly consider factors beyond formal indicia of ownership in determining ownership under New York’s no‐fault insurance laws. The court rejected all of defendant's arguments and affirmed the judgment. View "United States v. Gabinskaya" on Justia Law