United States v. Sehgal ( 2012 )

10-5006-cr (L)
United States v. Sehgal
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY
FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN
CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE
EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION
“SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY
PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit, held
at the Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, in the City of
New York, on the 3rd day of May, two thousand twelve.
PRESENT: GUIDO CALABRESI,
REENA RAGGI,
DENNY CHIN,
Circuit Judges.
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UNITED STATES OF AMERICA,
Appellee,
v. Nos. 10-5006-cr (L);
11-3468-cr (Con)
SHASHIBALA SEHGAL, a.k.a. Shashi Sehgal, a.k.a.
Shashibala Jaitley, ARTI A. JAITLY, a.k.a. Angela Jaitly,
Defendants-Appellants,
SUNIL C. JAITLY, RUPAL JAITLY,
Defendants.*
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APPEARING FOR APPELLANTS: JOHN S. WALLENSTEIN, Esq., Garden City,
New York, for Shashibala Sehgal.
Kevin T. Mulhearn, Esq., Orangeburg, New
York, for Arti A. Jaitly.
*
The Clerk of Court is directed to amend the official caption as shown above.
APPEARING FOR APPELLEE: CHRISTOPHER A. OTT (David C. James, on the
brief), Assistant United States Attorneys, for
Loretta E. Lynch, United States Attorney for the
Eastern District of New York, Central Islip, New
York.
Consolidated appeals from judgments of the United States District Court for the
Eastern District of New York (Sandra J. Feuerstein, Judge).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND
DECREED that the judgments of conviction entered on December 3, 2010, and July 27,
2011, are AFFIRMED.
Co-defendants Shashibala Sehgal and Arti A. Jaitly challenge their convictions for
tax crimes committed pursuant to a scheme to conceal millions of dollars of income from the
Internal Revenue Service. Sehgal was convicted after trial of conspiracy to commit tax
fraud, see 18 U.S.C. § 371, and sentenced to 51 months’ imprisonment, three years’
supervised release, $1,587,882 restitution, and a $100 special assessment. Jaitly was
convicted on a guilty plea of failing to file a tax return, see 26 U.S.C. § 7203, and sentenced
to two months’ incarceration (which she has now served), one year of supervised release,
$4,999 restitution, and a $25 special assessment. Sehgal argues for reversal on the grounds
that she was (1) denied a fair trial by various trial management decisions; (2) denied effective
assistance of counsel as guaranteed by the Sixth Amendment; and (3) convicted on the basis
of insufficient evidence in violation of due process. Jaitly argues for resentencing on the
grounds that the government’s submissions and arguments at sentencing (1) breached her
plea agreement, and (2) biased the district judge. We assume the parties’ familiarity with the
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facts and record of prior proceedings, which we reference only as necessary to explain our
decision to affirm both convictions.
1. Sehgal
a. Trial Management Challenges
(1) Continuance
Sehgal argues that the district court’s refusal to grant her a continuance to retain new
counsel deprived her of a fair trial. The argument is without merit.
Trial courts enjoy “largely unfettered” discretion in granting or denying trial
continuances. Sanusi v. Gonzales, 445 F.3d 193, 199 (2d Cir. 2006) (citing Morris v. Slappy,
461 U.S. 1, 11 (1983)). While we are generally disinclined to second-guess the exercise of
such discretion, we are particularly reluctant to do so when a continuance is sought on the
eve of trial purportedly to secure new counsel. See, e.g., United States v. Schmidt, 105 F.3d
82, 89 (2d Cir. 1997); United States v. Llanes, 374 F.2d 712, 717 (2d Cir. 1967). Here,
Sehgal failed to show the “unusual circumstances” required to warrant such a last-minute
continuance. United States v. Schmidt, 105 F.3d at 89.
Sehgal’s contention that she sought a continuance on November 3, 2008, two days
before trial, is belied by the record, which shows her asking only for Michael Kushner, the
attorney who had handled her case but who was recently terminated from the firm that was
counsel of record, to continue to represent her. The district court not only agreed to
Kushner’s continued representation of Sehgal, but also resolved various disputes, including
financial ones, that might have impeded such representation. Insofar as Sehgal sought a
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continuance on November 5, 2008, the first day of trial, to allow a newly retained attorney
to replace Kushner, we identify no abuse of discretion in the district court’s denial,
particularly in light of the fact that new counsel was not then present in court and Kushner
twice stated on the record that he was ready to proceed with trial.
(2) Scheduling Witnesses
Equally meritless is Sehgal’s claim that the district court denied her a fair trial by
rushing the proceedings, specifically, by requiring cooperating confederate Rupal Jaitly to
testify on the afternoon of the second day of trial rather than adjourning early so that this
witness would begin to testify the following day. A district court enjoys broad discretion in
managing a trial by controlling “the mode and order of examining witnesses and presenting
evidence.” Fed. R. Evid. 611(a). It does not abuse that discretion by requiring parties to
present evidence throughout the full trial day in order not to waste jury time. Further, Sehgal
cannot demonstrate that this basic trial management decision prejudiced her because the
district court allowed defense counsel’s cross-examination of Rupal Jaitly to extend into the
following day.
b. Sixth Amendment Claims
Sehgal contends that counsel’s inexperience and lack of preparation prevented him
from providing her with the effective assistance guaranteed by the Sixth Amendment.
Further, she contends that her own mid-trial remand interfered with her right to consult with
counsel, particularly as to whether she should testify in her own defense. We decline to
review the first claim on direct appeal, leaving Sehgal to pursue it through the preferable
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course of a motion under 28 U.S.C. § 2255. See Massaro v. United States, 538 U.S. 500,
504–05 (2003); accord United States v. Cain, 671 F.3d 271, 298–99 (2d Cir. 2012).
As for her second claim, we deem it forfeited, and thus, reviewable only for plain
error, in light of the fact that defense counsel sought and received additional time to consult
with Sehgal after her remand without objecting that the time afforded was insufficient
effectively to advise defendant as to her options. See United States v. Garcia, 587 F.3d 509,
515 n.2 (2d Cir. 2009) (noting that errors forfeited because of defendant’s failure timely to
assert rights are subject to review for plain error).
We identify no error, much less plain error, in the district court’s detention order
because Sehgal cannot show that her right to consult was impaired by the detention order.
Although the Supreme Court and this court have cautioned that trial judges generally should
not restrict a defendant’s ability to communicate with counsel during trial “absent an
important need to protect a countervailing interest,” Morgan v. Bennett, 204 F.3d 360, 367
(2d Cir. 2000) (relying on, inter alia, Geders v. United States, 425 U.S. 80 (1976)), Morgan
and Geders, on which Sehgal relies, are inapposite. Both cases concerned challenges to a
trial judge’s order specifically precluding a defendant from consulting with defense counsel,
in Geders as to any issue, see Geders v. United States, 425 U.S. at 82, and in Morgan, as to
the possibility that a prosecution witness would testify, see Morgan v. Bennett, 204 F.3d
at 363. Here, the district court imposed no such limitation on Sehgal and, in fact, granted her
request for additional time to consult with counsel regarding her decision to testify.
Accordingly, Sehgal’s claim fails on the merits.
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In urging otherwise, Sehgal relies on Bitter v. United States, 389 U.S. 15 (1967).
There, the Supreme Court held that the mid-trial remand of a defendant, after “a single, brief
incident of tardiness” to a “jail 40 miles distant from the courtroom” and “without hearing
or statement of reasons, had the appearance and effect of punishment rather than of an order
designed solely to facilitate the trial,” and constituted an “unwarranted burden upon
defendant and his counsel in the conduct of the case.” Id. at 17.
That is not this case. The district court remanded Sehgal only after receiving evidence
cumulatively demonstrating her total disregard for the district court’s authority. That
evidence included two occasions on which Sehgal arrived late for trial, the second time an
hour after she was due to arrive and only a day after the district court had warned her that she
must arrive on time; cooperating witness Rupal Jaitly’s testimony that, even after being
charged in this case, Sehgal was continuing to conceal her income from authorities; Sehgal’s
admission that she had taken no steps to end the charged concealment scheme; Sehgal’s
admission that she had yet to file any income tax returns three years after having been
indicted, in part, for her failure to do so; and, finally, Sehgal’s concoction of an elaborate lie
in response to the district court’s inquiry as to her acquisition of a cell phone. As the district
court correctly observed, this record of continuing criminal conduct and pervasive deceit cast
doubt on the likelihood that Sehgal would abide by the conditions of her release. See United
States v. LaFontaine, 210 F.3d 125, 135 n.6 (2d Cir. 2000) (observing that revocation of
release may be justified where defendant perjures himself, thus indicating that defendant is
unlikely to abide by court imposed conditions of release). Accordingly, the district court’s
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decision to remand Sehgal in order to ensure her presence at trial was not punitive in either
appearance or effect. Any question regarding whether Sehgal’s detention during trial satisfied
the statutory requirements of 18 U.S.C. §§ 3142 and 3148 is rendered moot by the fact that,
as a consequence of her conviction and sentence, all pre-judgment incarceration will be
credited against her 51-month prison term.1
c. Sufficiency of the Evidence
Sehgal argues that the trial evidence was sufficient only to prove that she entrusted
her charged confederates with the revenue from her medical practice, not that she knew that
they would fail to file income tax returns on her behalf. We review de novo the sufficiency
of the evidence to support conviction, but in doing so, we must consider the evidence in the
light most favorable to the prosecution and uphold the conviction so long as any reasonable
jury could have returned the challenged verdict on that evidence. See United States v.
O’Connor, 650 F.3d 839, 855 (2d Cir. 2011); United States v. Abu-Jihaad, 630 F.3d 102, 134
(2d Cir. 2010). Applying those principles here, we reject Sehgal’s sufficiency challenge as
meritless.
The charged conspiracy did not require the government to prove Sehgal’s knowledge
that her confederates would fail to file tax returns. Rather, it required proof that she had
agreed with co-conspirators to conceal revenue from the Internal Revenue Service. The trial
1
Any question regarding whether Sehgal’s detention during trial satisfied the statutory
requirements of 18 U.S.C. §§ 3142 and 3148 is rendered moot by the fact that, as a
consequence of her conviction and sentence, all pre-judgment incarceration will be credited
against her 51-month prison term.
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evidence easily permitted a rational jury to find that Sehgal knowingly entered into such a
scheme intending it to succeed. Documentary and testimonial evidence showed that Sehgal
arranged for millions of dollars in revenue from her medical practice to be paid not to her but
into bank accounts held by shell corporations controlled by her co-conspirators. Those shell
companies then paid Sehgal’s business and personal expenses and provided Sehgal with a
weekly cash allowance of thousands of dollars. These machinations were sufficient, by
themselves, to permit a rational jury to find that Sehgal was a knowing participant in a
scheme to conceal her income. The conclusion was only reinforced by evidence that on
various credit applications filed during the conspiracy, Sehgal acknowledged an annual
income of at least $500,000, and yet, neither she nor her co-conspirators ever filed any tax
returns during the conspiracy’s 15-year existence, much less paid any taxes on the concealed
revenue. Indeed, Sehgal’s awareness that no tax returns were being filed with respect to the
revenue she had thus managed to conceal finds support in the testimony of tax preparer
Henry Umujane, whom Sehgal consulted in 1996, i.e., during the conspiracy, about her need
to have a tax return prepared as soon as possible for use in a family court proceeding in
which she was then involved. In fact, even that return was never filed.
In sum, the record evidence is sufficient to support Sehgal’s conviction.
2. Jaitly
a. Plea Agreement
Jaitly argues that the government breached the parties’ plea agreement by “ascribing
to [Jaitly] complicity and participation in the overarching alleged . . . conspiracy from 2001
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to 2005,” and by “taking a position as to where within the Guidelines range” the district court
should sentence her. Jaitly Br. at 21. The district court itself rejected this argument both at
sentencing and again in denying Jaitly’s motion for bail pending appeal. On appeal, we are
nevertheless obliged to construe the plea agreement de novo, applying contract law principles
and looking to “the reasonable understanding of the parties as to the terms of the agreement.”
United States v. Riera, 298 F.3d 128, 133 (2d Cir. 2002) (internal quotation marks omitted).
Insofar as Jaitly faults the government for advising the district court that, in making
a sentencing decision, it could consider defendant’s failure to report income obtained from
the fraud conspiracy underlying the failure to file crime of conviction, the argument fails
because the plea agreement specifically states that the government would “advise the Court
and the Probation Department of information relevant to sentencing, including criminal
activity engaged in by the defendant.” Plea Agreement at 2, United States v. Jaitly, No. 05-
cr-00688 (SJF) (E.D.N.Y. Oct. 30, 2008).2
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The same plea agreement provision compels us to reject Jaitly’s unpreserved claim,
argued in an entirely separate section of her brief, that the government breached the plea
agreement at sentencing by advocating for a calculation of tax loss that attributed to her the
loss caused by her participation in the broader tax fraud scheme underlying her failure-to-file
crime. See Puckett v. United States, 556 U.S. 129, 143 (2009) (holding that plain error
review applies to breach of plea agreement not objected to in district court). This claim, in
fact, fails for another reason: it is factually inaccurate. At sentencing, the government cited
the Probation Department’s higher tax-loss figure not to advocate for it, but in response to
the district court’s request for an explanation as to the PSR’s recommended Guidelines
calculation. As at the Fatico hearing, the government provided evidence underlying the
Probation Department’s calculation without advocating that the district court adopt it.
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Nor are we persuaded that the government breached the plea agreement in stating that
a sentence of “no penalty and restitution” would be insufficient to achieve the sentencing
goal of deterrence. Jaitly Sentencing Tr. at 14:11–12. Jaitly maintains that the government’s
reference to the need for a “penalty” constituted advocacy for a term of incarceration, which
violated its plea agreement promise to “take no position where within the Guidelines range
determined by the Court”—in this case, zero to six months—“the sentence should fall.” Plea
Agreement at 4. For the same reasons as the district court, we reject this argument.
The record makes plain that the government’s comments were in response to Jaitly’s
request for a non-Guidelines sentence of restitution without more. Although Jaitly’s
argument for a sentence without a term of imprisonment, probation, or supervised release
was consistent with her Guidelines range, see U.S.S.G. §§ 2T4.1(B), Ch. 5 Pt. A (Sentencing
Table), her request for a sentence of restitution without more was inconsistent with the
Guidelines’ fine recommendation, see id. § 5E1.2. While the plea agreement precluded the
government from advocating for any particular sentence within or above the Guidelines
range, no term in the agreement prevented the government from advocating for a Guidelines
sentence generally, as opposed to one below the Guidelines. Thus, Jaitly’s reliance on
United States v. Corsentino, 685 F.2d 48 (2d Cir. 1982), is misplaced, because there the plea
agreement obligated the government to “take no position” whatsoever at sentencing, id. at
52. The government having been under no such limitation here, we identify no merit in
Jaitly’s breach claim.
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b. Judicial Bias
Jaitly contends that the government’s “baseless” efforts to prove that she had engaged
in post-guilty plea misconduct and was responsible for a significantly higher tax loss
“poisoned” the district court’s “ability to render an appropriate sentence . . . in a fair and
impartial manner.” Jaitly Br. at 14. The district court rejected this argument in denying
Jaitly’s motion for recusal, noting that it had, in fact, ruled for Jaitly on the matters in dispute.
We review the denial of a motion for recusal only for abuse of discretion, and we identify
none here. See United States v. Giordano, 442 F.3d 30, 48 (2d Cir. 2006).
Jaitly’s argument that the government’s submissions required recusal under 28 U.S.C.
§ 455(b)(1) fails because “knowledge acquired by the judge while he performs judicial duties
does not constitute” the personal knowledge referenced in § 455(b)(1). United States v.
Carlton, 534 F.3d 97, 101 (2d Cir. 2008) (internal quotation marks and brackets omitted).
Nor do the district court’s “comments and rulings in the context of the record as a whole”
indicate any basis for questioning the district court’s impartiality. United States v. English,
629 F.3d 311, 321 (2d Cir. 2011); see 28 U.S.C. § 455(a). In urging otherwise, Jaitly points
to the district court’s statements, at the start of the Fatico hearing, that it intended to sentence
Jaitly to some term of imprisonment. But the district court went on to explain that this was
its preliminary view of facts relevant to sentencing not dependent on the outcome of the
Fatico hearing. It nevertheless indicated that it would be receptive to any argument Jaitly
advanced for a non-incarceratory sentence. Accordingly, we identify no appearance of
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partiality in the district court’s comments or rulings and, therefore, no error in its denial of
Jaitly’s recusal motion.
c. Other Issues
Insofar as Jaitly also challenges the district court’s order denying her release pending
appeal, the matter has already been decided against her. See Order, United States v. Jaitly,
No. 11-3468-cr (2d Cir. Sept. 20, 2011), ECF No. 42. Further, Jaitly’s request that we assign
the case to a different district judge on remand is moot, as we identify no error requiring
remand.
3. Conclusion
We have considered Sehgal’s and Jaitly’s remaining arguments on appeal and
conclude that they are without merit. Accordingly, the judgment pertaining to each
defendant is AFFIRMED.
FOR THE COURT:
CATHERINE O’HAGAN WOLFE, Clerk of Court
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