Circuit Affirms Convictions of Madoff Co-Conspirators

The Circuit issued no published criminal decisions today. But it did issue three summary orders, including a 30-page decision (does that still qualify as a “summary” order?) affirming the fraud-related convictions of five former employees of Bernie Madoff’s investment company.

1. United States v. Bonventre, No. 14-4714-cr(L) (2d Cir. Apr. 20, 2016) (Walker, Raggi, and Droney)

Five former employee of Bernard L. Madoff Investment Securities were convicted after trial of multiple counts of conspiratorial and substantive securities fraud, bank fraud, and related charges for their participation in a massive scheme to defraud thousands of investors of tens of billions of dollars. On appeal, the defendants challenged various trial court rulings, the sufficiency of the evidence, the government’s trial conduct, and the judgments of forfeiture. The Court rejected all of their claims.

Bill of Particulars

First, the Court held that the district court did not err by denying a request for a bill of particulars specifying which records one of the defendants allegedly falsified, how the records were false, and why they were false. The Court noted that particulars are necessary only where the charges in the indictment are “so general that they do not advise the defendant of the specific acts of which he is accused.” That was not the case here, the Court said.

Joinder of Charges and Defendants

The Court also rejected the defendants’ argument that certain tax fraud charges should have been severed as insufficiently related to the securities fraud perpetrated at the Madoff firm. And the Court found no abuse of discretion in the district court’s decision denying a motion to sever certain defendants.

Sufficiency of the Evidence

The Court also had little difficulty upholding the sufficiency of the evidence. The Court held that the evidence of criminal intent was not “in equipoise,” as two of the defendants had argued, but “tilted decidedly in favor of a finding of culpable mens rea.” The evidence showed, for example, that the defendants designed computer programs that created books and records with randomly generated numbers to deceive regulators and clients, and later deleted incriminating evidence.

Government Misconduct

The Court also rejected the claims that a new trial was required because of prosecutorial misconduct in addressing the jury. Noting that the government’s use of certain analogies in rebuttal summation was “not a model of advocacy,” and that other comments (such as a reference to Judge Constance Baker Motley), were “peculiar” or “needlessly grandiose,” the Court nevertheless found no reversible error in light of the government’s “meticulous presentation” of incriminating evidence, the totality of the arguments made, and contemporaneous curative instructions.

Forfeiture

Finally, the Court upheld a forfeiture order in excess of $19 billion. The order did not violate the Eighth Amendment, the Court held, because the forfeiture amount, “while monumental,” was not “grossly disportional” to the gravity of the offenses.

2. United States v. Brome, No. 13-4008 (2d Cir. Apr. 20, 2016) (Pooler, Livingston, and Lohier)

Brome appealed from an order denying his petition for the return of property (over $21,000 in cash that had been seized by the police) under Fed. R. Crim. P. 41(g). The district court denied the petition because the funds had been administratively forfeited by the DEA. But the Circuit held that a remand was required because it was not clear that Brome ever received adequate notice of the forfeiture.

3. United States v. Yaroshenko, No. 15-1844 (2d Cir. Apr. 20, 2016) (Leval, Droney, and Koeltl).

The defendant was convicted after trial of conspiracy to distribute more than five kilograms of cocaine with knowledge that it would be imported into the United States. On a prior appeal, the Circuit affirmed his conviction and held that no error existed that warranted dismissal of the indictment. The defendant then moved unsuccessfully in the district court, under Fed. R. Crim. P. 33, for dismissal of the indictment or for a new trial based on newly discovered evidence. The defendant proffered three categories of supposed newly discovered evidence: (i) evidence allegedly showing that the defendant had been beaten by DEA agents when he was abducted from his hotel in Liberia in violation of United States and Liberian law, (ii) evidence purportedly showing that Ukraine did not authorize a DEA investigation, and (iii) affidavits from a co-defendant stating that he did not conspire with Yaroshenko and that the government failed to disclose that a confidential informant made a video recording.

In this summary order, the Court affirmed, holding that the denial of the Rule 33 motion was not an abuse of discretion. Some of the claimed “newly discovered evidence” merely supported the same allegations of physical abuse by the DEA that the Court had previously rejected as a basis for dismissing the indictment. The other “newly discovered evidence” either was not really “newly discovered” or did not warrant relief.