United States v. Carlo ( 2007 )

06-2420-cr
United States v. Carlo
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
August Term, 2007
Argued: October 16, 2007 Decided: November 19, 2007
Docket No. 06-2420-cr
_________________________________
UNITED STATES OF AMERICA,
Appellee,
–v.–
PETER R. CARLO,
Defendant-Appellant.
____________________________________
Before:
KEARSE and KATZMANN,
Circuit Judges,
RAKOFF,
District Judge.*
Appeal from the May 10, 2006 judgment of the United States District Court for the
Southern District of New York (Patterson, J.) of conviction after jury trial. Affirmed.
____________________________________
SETH C. FARBER, (James P. Smith III, Mathew L.
DiRisio, of counsel), Dewey & LeBeouf LLP, New
York, New York, for Defendant-Appellant
DANIEL W. LEVY (Katherine Polk Failla, Michael
A. Levy, Assistant United States Attorneys, of
counsel) for Michael J. Garcia, United States
Attorney for the Southern District of New York,
*
The Honorable Jed S. Rakoff, of the United States District Court for the Southern
District of New York, sitting by designation.
New York, New York, for Appellee.
__________________________________
PER CURIAM :
The defendant Peter Carlo appeals from a judgment of conviction entered May 10, 2006,
following a jury trial on one count of wire fraud in violation of 18 U.S.C. § 1343 and one count
of conspiracy to commit wire fraud in violation of 18 U.S.C. § 371. He challenges the
sufficiency of the evidence to support that conviction and certain instructions given to the jury.
The government’s proof at trial included evidence of Carlo’s participation in a scheme
whereby he, along with others, defrauded real estate developers by making misrepresentations to
the developers as to the status of Carlo’s attempts to secure funding for their development
projects. Carlo, hoping to, inter alia, collect a fee from closing such financing deals, sought to
persuade the developers to continue to seek their funding through Carlo. His plan for obtaining
the desired financing included attempting to arrange for one institution, Seattle-Northwest
Securities Corporation, to sell bonds backed by the developers’ projects and attempting to
arrange for another institution, Allianz AG, to provide “credit enhancement,” i.e., guarantee of
the payments on the bonds. Seattle-Northwest informed Carlo that it would evaluate his funding
requests on a project-by-project basis only after completing due diligence and after Carlo
obtained credit enhancement. A number of developers sought assurances that loans would soon
be forthcoming, stating that they were experiencing negative financial effects from the delay in
receiving, or learning that they would not receive, the needed funding. Despite the fact that no
due diligence was completed, that no funding approval from Seattle-Northwest was forthcoming,
that no credit enhancement commitment was made by Allianz, and that he indeed never dealt
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with Allianz directly, Carlo represented to several developers that their financing proposals had
been approved and that loans would shortly be forthcoming.
On an appeal challenging the sufficiency of the evidence to support a conviction, we view
the evidence in the light most favorable to the government, drawing all reasonable inferences in
its favor, and reverse only if no rational factfinder could have found guilt beyond a reasonable
doubt. United States v. Gaskin, 364 F.3d 438, 459-60 (2d Cir. 2004). To sustain a conviction for
wire fraud under 18 U.S.C. § 1343 (except as modified by § 1346) and conspiracy to commit
such wire fraud, the government must prove that the defendant acted with specific intent to
obtain money or property by means of a fraudulent scheme that contemplated harm to the
property interests of the victim. See United States v. Walker, 191 F.3d 326, 334-35 (2d Cir.
1999).1 See generally McNally v. United States, 483 U.S. 350 (1987). While the interests
protected by the mail and wire fraud statutes do not generally extend to intangible rights (except
as modified by 18 U.S.C. § 1346), they do extend to all kinds of property interests, both tangible
and intangible. Carpenter v. United States, 484 U.S. 19, 25 (1987). Since a defining feature of
most property is the right to control the asset in question, we have recognized that the property
interests protected by the statutes include the interest of a victim in controlling his or her own
assets. See Walker, 191 F.3d at 335; United States v. Rossomando, 144 F.3d 197, 201 n.5 (2d
Cir. 1998) (“[T]he concrete harm [to the victim’s property interest] contemplated by the
defendant is to deny the victim the right to control its assets by depriving it of information
necessary to make discretionary economic decisions.”).
1
Walker deals with mail fraud, but the analysis of mail fraud and wire fraud is, in all
respects material to this case, identical. See United States v. Autuori, 212 F.3d 105, 115 (2d Cir.
2000).
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We find that the government introduced sufficient evidence for a reasonable jury to
conclude that Carlo knowingly gave false and misleading information to real estate developers
about the status of funding he was trying to arrange for them in the hope that they would continue
their projects, at great risk and expense, while he pursued an ever-dwindling chance of actually
securing funding. The jury could find that Carlo intended that the developers rely on his
misstatements to decide to continue their projects, thus preserving Carlo’s only chance to earn his
fee. By causing the developers to make economic decisions about the viability of their real estate
projects based on misleading information, Carlo harmed the developers’ property interests. See
United States v. DiNome, 86 F.3d 277, 284 (2d Cir. 1996). That Carlo wanted the funding
transactions to close (because that was the only way for him to earn his fee) does not negate his
intent to inflict a genuine harm on the victims by depriving them of material information
necessary to determine for themselves whether to continue their development projects, thereby
continuing or increasing their exposure to the risk of the projects’ failure. See id.; see also
Rossomando, 144 F.3d at 201.
When an objection to a jury charge is adequately preserved below, we review a claim of
error in the charge de novo. See United States v. Tropeano, 252 F.3d 653, 657-58 (2d Cir. 2001).
Even assuming that Carlo’s objection was adequate, we find that the trial court properly
instructed the jury on the right-to-control theory of wire fraud. The court properly described the
harm to the victims’ property interests as the deprivation of information necessary to make
discretionary economic decisions. See Rossomando, 144 F.3d at 201 & n.5. There was no
danger in this case that the jury might have found that the misinformation—false statements that
the funding had been approved and was imminent—could have misled the victims in any
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immaterial, non-pecuniary way. See DiNome, 86 F.3d at 284; cf. United States v. Mittelstaedt, 31
F.3d 1208, 1216-17 (2d Cir. 1994).
Carlo’s objection to the conscious avoidance instruction is similarly without merit. There
was nothing inappropriate or inconsistent in the government arguing that Carlo had actual
knowledge that his statements were false or, in the alternative, that he was aware of a high
probability that they were false, but consciously avoided confirming that suspicion. See United
States v. Svoboda, 347 F.3d 471, 480 (2d Cir. 2003); United States v. Mang Sun Wong, 884 F.2d
1537, 1542 (2d Cir. 1989). The conscious avoidance charge was appropriate because Carlo
asserted that he did not know that his statements were false and the government presented an
adequate factual predicate for the charge. See United States v. Ferrarini, 219 F.3d 145, 154 (2d
Cir. 2000). We find that the government introduced evidence that Carlo was aware of a high
probability that the information about credit enhancement that he received from his contacts in
Europe (which he then repeated to the developers) was false, and if he did not actually know that
the information was false, it was only because he deliberately avoided confirming his suspicion.
We have considered all of Carlo’s other arguments and find them to be without merit.
Accordingly, for the foregoing reasons, the judgment of the district court is hereby AFFIRMED.
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