Articles Posted in U.S. 2nd Circuit Court of Appeals

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Defendant was convicted of conspiring to commit honest-services wire fraud and securities fraud, in violation of 18 U.S.C. 1343, 1346, 1348, and 1349, as well as making a false statement in violation of 18 U.S.C. 1001(a)(2). On appeal, defendant principally argued that the evidence presented at trial was insufficient to support his conviction of conspiracy to commit wire fraud in light of Skilling v. United States and that he was therefore entitled to a judgment of acquittal on the conspiracy count, or that he was entitled to a new trial on that count because the district court's instructions to the jury erroneously permitted conviction on an impermissible theory of honest-services fraud. The court concluded that the district court properly denied defendant's motion for judgment of acquittal where the evidence was sufficient to permit the jury to find that he conspired to commit honest-services wire fraud by means of having intermediary firms pay kickbacks to his father and brother in connection with Morgan Stanley's stock-loan transactions for which his father and brother performed little or no work. The district court's failure to anticipate the ruling in Skilling and instruct that the government was required to prove a scheme involving bribery or kickbacks was harmless beyond a reasonable doubt and did not affect the verdict. The court considered all of defendant's arguments on appeal and found them to be without merit. Accordingly, the court affirmed the judgment of the district court. View "United States v. DeMizio" on Justia Law

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Defendant was convicted under the Economic Espionage Act (EEA), 18 U.S.C. 1832, and the National Stolen Property Act (NSPA), 18 U.S.C. 2314, after he replicated his former employer's (the Bank) confidential computer code to give to a competitor in exchange for money. On appeal, defendant challenged the legal sufficiency of the charges in light of United States v. Aleynikov. The court concluded that, on plain-error review of defendant's defaulted legal sufficiency challenge to his EEA conviction, defendant failed to show that purported error in the pleading of the law's jurisdictional element affected his substantial rights or the fairness, integrity, or public reputation of judicial proceedings; on plain-error review of defendant's defaulted legal insufficiency challenge to his NSPA conviction, defendant failed to show that the theft of the computer code did not satisfy the law's goods, wares, or merchandise requirement; and defendant's remaining claims failed. Accordingly, the court affirmed the conviction. View "United States v. Agrawal" on Justia Law

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Defendants were convicted of conspiracy to commit mail fraud and wire fraud in violation of 18 U.S.C. 1341, 1343, and 1349. Defendants' convictions stemmed from their involvement in a conspiracy to defraud a non-existent investor of three billion dollars. The court concluded that there was sufficient evidence for a reasonable jury to conclude that any misrepresentations defendants made were material. The court concluded, however, that defendants' sentences were procedurally unsound where the court was uncertain whether the district court weighed the factors listed in 18 U.S.C. 3553(a). Accordingly, the court affirmed the convictions but vacated the sentences, remanding for resentencing. View "United States v. Juncal" on Justia Law

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Defendants appealed their securities fraud and conspiracy convictions stemming from their involvement in a double-blind, high-volume insider trading network that led the participants to acquire over $10 million in profits. The court held that wiretap evidence was lawfully obtained and therefore properly admitted; the jury had sufficient evidence to convict Defendant Kimelman of securities fraud; the conscious avoidance jury instructions were proper; evidence of Kimelman's rejection of a plea bargain was properly excluded; and defendants' sentences were reasonable. Accordingly, the court affirmed the convictions and sentences. View "United States v. Goffer" on Justia Law

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Defendants, former executives of the retail drugstore chain Duane Reede, appealed their convictions for securities fraud. Defendants had executed a number of schemes to inflate the company's earnings in quarterly and annual financial statements filed with the SEC. The court concluded that the district court did not abuse its discretion in admitting the testimony of non-expert witnesses. The court also concluded that Defendant Tennant's claims that his conviction should be overturned for insufficient evidence to prove his knowledge of the fraud and that it was error for the district court to give a conscious avoidance jury instruction were without merit. Accordingly, the court affirmed the judgment. View "United States v. Cuti" on Justia Law

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Defendant appealed his securities fraud conviction for insider trading. The court held that the district court properly analyzed the misstatements and omissions in the government's Title III wiretap application under the analytical framework prescribed in Franks v. Delaware; the alleged misstatements and omissions in the wiretap application did not require suppression; and the district court's jury instructions on the use of inside information satisfied the "knowing possession" standard. Accordingly, the court affirmed the judgment. View "United States v. Rajaratnam" on Justia Law

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Defendant, the former CEO of Medisys, was convicted of honest services mail and wire fraud and honest services fraud conspiracy, as well as conspiracy to commit bribery and violate the Travel Act, 18 U.S.C. 371. Defendant's convictions stemmed from bribing three legislators in exchange for their commitment to perform official acts "as specific opportunities arose" within the New York State legislature and State agencies. The court rejected defendant's argument that the federal bribery and honest services fraud statutes under which he was convicted were unconstitutionally vague as applied to his conduct; there was sufficient evidence to prove the existence of the requisite quid pro quo arrangements and to support defendant's convictions beyond a reasonable doubt; and the district court did not err in denying defendant's motion to compel the government to provide defense witness immunity to a partner at MediSys's outside general counsel. View "United States v. Rosen" on Justia Law

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Plaintiff appealed from the district court's judgment dismissing her claims against her ex-husband and his brother for failure to state a claim and untimeliness. Plaintiff alleged that, in representing a certain investment as worthless and concealing the $5.5 million received on its account, defendants conspired in violation of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1962(d), committed common law fraud, and breached fiduciary duties, and that her ex-husband was unjustly enriched. The court held that the district court's reasons for dismissing the fraud-based claims were erroneous and that the district court erred in ruling on the existing record that the RICO, common law fraud, and breach of fiduciary duty claims were time-barred. The court sustained the dismissal of the unjust enrichment claim as untimely. Accordingly, the court affirmed in part and vacated and remanded in part. View "Cohen v. Cohen" on Justia Law

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In these two civil enforcement actions for securities fraud, various entities that were defrauded by defendants appealed from the district court's order approving initial pro rata distributions recovered from defendants and associated entities by the Receiver in accordance with the Plan proposed by the Receiver. Interested parties, 3M Group, contended principally that the district court should have rejected the proposed pro rata distributions because under the Plan, fraud victims who chose allegedly safer investments fare no better than victims whose investments were riskier. Interested party, KCERA, contended that the district court should have rejected the proposed Plan because it did not provide an adjustment for inflation to compensate for longer-term investors. The court considered all of the contentions of the 3M Group and KCERA in support of their respective appeals and found them to be without merit. Accordingly, the court affirmed the order. View "CFTC v. 3M Employee Welfare Benefit Assoc. Trust I, et al." on Justia Law

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Defendants Michael Nouri, Eric Nouri, and Anthony Martin appealed convictions stemming from their involvement with a market manipulation scheme with Smart Online, Inc. stock. On appeal, defendants contended that the district court erred in instructing the jury on fraud by deprivation of honest services, especially in the context of securities fraud, and that there was insufficient evidence to sustain convictions for securities fraud. Martin also contended that there was insufficient evidence to convict him of honest-services wire fraud, that the district court erroneously limited his examination of a witness, and that his sentence was unreasonable. The court affirmed the judgment, finding no merit in defendants' arguments. View "United States v. Nouri" on Justia Law