United States v. Tucker ( 2020 )

18-181(L)
United States v. Tucker
1 UNITED STATES COURT OF APPEALS
2 FOR THE SECOND CIRCUIT
3
4 August Term, 2018
5
6 (Argued: June 12, 2019 Decided: June 2, 2020)
7
8 Docket No. 18-181(L), 18-184(CON), 18-1802
9
10
11 _____________________________________
12
13 UNITED STATES OF AMERICA,
14
15 Appellee,
16
17 v.
18
19 CRYSTAL GROTE, AKA CRYSTAL CRAM, AKA CRYSTAL CRAM-GROTE,
20 AKA CRYSTAL STUBBS,
21
22 Defendant,
23
24 and
25
26 TIMOTHY MUIR, SCOTT TUCKER,
27
28 Defendants-Appellants.
29
30 _____________________________________
31
32 Before:
33
34 LEVAL, POOLER, and PARKER, Circuit Judges.
35
36 Timothy Muir and Scott Tucker appeal from a judgment of conviction
37 entered after a jury trial in the United States District Court for the Southern
38 District of New York (P. Kevin Castel, J.) on fourteen counts including
1 collection of unlawful usurious debt, and conspiracy to do so, wire fraud, and
2 money laundering, arising out of Defendants’ operation of a payday lending
3 business. The defense was primarily that the lending business was not subject
4 to state usury laws because it was conducted by Native American tribes and
5 was therefore protected by tribal sovereign immunity. Defendants’ primary
6 contention on appeal is that the district court erred in instructing the jury that
7 willfulness—which the parties agreed was the required state of mind for a
8 charge of lending at unlawful usurious rates—can be satisfied merely by the
9 defendants’ knowledge of the interest rates charged, even if they believed the
10 lending was lawful. Because defendants made no objection following the
11 charge as generally required by Fed. R. Crim. P. 30, and there was no basis to
12 conclude that objection would have been futile, the plain error standard of
13 Fed. R Crim. P. 52 applies. We conclude the error, if any, was not plain error.
14 We also find no abuse of discretion in the district court’s denial of Tucker’s
15 application for a stay of the forfeiture order against him. AFFIRMED.
16
17 THOMAS J. BATH, JR., Bath & Edmonds,
18 P.A., Overland Park, KS, for
19 Defendant-Appellant Timothy Muir. 1
20
21 BEVERLY VAN NESS, Law Firm of Beverly
22 Van Ness, New York, NY, for
23 Defendant-Appellant Scott Tucker.
24
25 KARL METZNER (Hagan Scotten, Sagar
26 K. Ravi, on the brief), Assistant United
27 States Attorney, for Geoffrey S. Berman,
28 United States Attorney for the Southern
29 District of New York, New York, NY, for
30 Appellee.
31
32
33
34
35
36
1 Defendant Muir terminated Mr. Bath as counsel on September 20, 2018, and
later submitted a supplemental brief pro se.
2
1 LEVAL, Circuit Judge:
2 Defendants Scott Tucker and Timothy Muir appeal their criminal
3 convictions after a five-week jury trial in the U.S. District Court for the
4 Southern District of New York (P. Kevin Castel, J.) on fourteen counts of
5 racketeering, conspiracy, and fraud offenses arising out of the Defendants’
6 operation of an illegal payday lending scheme. The evidence showed that
7 from about 1997 to 2013, the Defendants lent money at interest rates far in
8 excess of those permitted under the laws of New York and other states in
9 which their borrowers resided, and deceived borrowers as to the terms of the
10 loans.
11 The indictment included three counts of conducting an enterprise’s
12 affairs through the collection of unlawful usurious debt, in violation of the
13 Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C.
14 § 1962(c) (Counts 2-4); one count of conspiracy to do the same, in violation of
15 18 U.S.C. § 1962(d) (Count 1); one count of wire fraud and one count of wire
16 fraud conspiracy, in violation of 18 U.S.C. §§ 1343, 1349 (Counts 5-6); three
17 counts of money laundering and conspiracy to launder money, in violation of
18 18 U.S.C. § 1956(a)(1)(A)(i), -(a)(1)(B)(i), -(h) (Counts 7-9); and five counts of
3
1 making false statements in disclosures required by the Truth in Lending Act
2 (TILA), in violation of 15 U.S.C. § 1611 (Counts 10-14). The Defendants were
3 convicted on all counts.
4 At trial, the parties agreed—as they do now—that the requisite mental
5 state for the RICO counts was willfulness. The Defendants defended
6 primarily on the ground that, because the lending business was operated by
7 Native American tribes (the “Tribes”), the loans were not subject to state
8 usury laws, and that even if the loans were unlawful, Defendants had a good
9 faith belief that they were lawful by virtue of the tribal involvement, so that
10 their conduct was not “willful.”
11 The Defendants’ principal claim on appeal is that the district court
12 erred in instructing the jury that the Government could satisfy the required
13 state-of-mind element of collection of unlawful debt by proving that the
14 Defendants acted deliberately, “with knowledge of the actual interest rate
15 charged on the loan[s],” App’x at 264-65, notwithstanding any good faith
16 belief that their conduct was lawful. Defendants contend that they could not
17 be properly convicted on the charges of unlawful usurious lending unless
18 they acted willfully, with knowledge that they were acting unlawfully.
4
1 We reject this challenge to the Defendants’ convictions. Because the
2 Defendants did not preserve their objection in the manner specified by Rule
3 30 of the Federal Rules of Criminal Procedure, the “plain error” standard of
4 Rule 52 applies. Even assuming that the charge with respect to Counts 2-4
5 was erroneous, the error did not affect the verdict, and thus Defendants have
6 not satisfied the requirements of “plain error.” The jury necessarily found in
7 rendering a guilty verdict on Count 1, for which an undisputedly correct
8 willfulness instruction was given as to the “conspiracy” element, that the
9 Defendants were aware of the unlawfulness of their making loans with
10 interest rates that exceeded the limits permitted by the usury laws.
11 Furthermore, the evidence of the Defendants’ willfulness was overwhelming.
12 We therefore find that the standard for a finding of plain error is not satisfied.
13 Concluding also that the Defendants’ other contentions are without
14 merit, we affirm the judgments of conviction on all fourteen counts.
15 Additionally, we find that the district court did not abuse its discretion in
16 denying Tucker’s application to stay the execution of the forfeiture order
17 entered against him following his conviction.
5
1 BACKGROUND
2 Payday loans are small loans typically to be repaid on the borrower’s
3 next payday. Such loans frequently carry high interest rates. Many states,
4 including New York, have usury laws capping the permissible annual interest
5 rate on such loans, with the highest lawful interest rate varying by state.
6 From approximately 1997 through 2013, Defendant Tucker owned and
7 operated a payday lending business based in Overland Park, Kansas. Initially,
8 the business offered loans primarily via fax and telephone. In about 2000 it
9 began to solicit payday borrowers over the internet, operating through
10 several different websites which were held out to the public as separate
11 entities, but which were administered from the same building and by the
12 same employees, and were referred to internally as different “portfolios.”
13 Muir joined Tucker’s business as an in-house attorney in 2005 or 2006. At its
14 peak, the business had over 1,500 employees and 4.5 million customers, and
15 generated more than a billion dollars in yearly revenue.
16 Tucker’s loans were structured in the following manner. On each of the
17 borrower’s paydays following the loan disbursement (until the loan was
18 repaid), the borrower’s bank account was automatically debited a $30
6
1 “service charge” for each $100 remaining on the loan principal. On each of the
2 first four paydays following disbursement, the loans would “automatically
3 renew,” meaning that the service charge would be assessed and no payment
4 would be taken to reduce the outstanding principal balance. On the
5 borrower’s fifth payday and on each subsequent payday until the principal
6 was repaid, in addition to the service charge, a “principal payment” of $50
7 would be taken from the borrower’s bank account and applied to reduce the
8 loan principal. According to a chart Tucker used to train his employees, based
9 on this payment structure, a borrower would ultimately pay $975 to repay a
10 $300 loan. Considering the service charges as interest, the resulting
11 annualized interest rate (which varied depending on the frequency of a
12 borrower’s paydays) often exceeded 600%.
13 Borrowers were entitled under the terms of the loans to opt out of the
14 “automatic renewal” process and instead pay the full amount of the principal
15 (in addition to the service charge) on their first payday. To opt out of
16 automatic renewal, borrowers were required to notify the lender in writing. A
17 borrower of $300 who elected to opt out would pay a service charge of $90.
18 The interest rates charged on the loans exceeded what was permitted in some
7
1 states, including New York, even when the loan was repaid on the first
2 payday. And under the default automatic renewal process, the interest rates
3 far exceeded those allowed by the applicable state usury laws. The written
4 terms of the loans were materially misleading as to how the automatic
5 renewal process worked and the borrowers’ entitlement to opt out from it. A
6 major source of borrowers’ confusion regarding the automatic renewal
7 process was the information in the “TILA Box” displayed in the loan
8 documents. TILA—the Truth in Lending Act—requires lenders to make
9 certain disclosures in a prominently displayed chart or “box" regarding the
10 cost of prospective loans, including the loan amount, finance charge,
11 annualized interest rate, and total amount of expected payments (including
12 the principal). See generally 15 U.S.C. § 1638(a). The information listed in the
13 TILA Box on Tucker’s loan documents reflected what those costs would be
14 without the “automatic renewal” process—that is, what a borrower would pay
15 if she opted out of the automatic renewal process and paid off her entire loan
16 on the first payday. Thus, for a loan of $300, the TILA box listed that the
17 finance charge would be $90 and the total amount of payments (including
18 principal repayment) would be $390. The disclosure was correct for
8
1 borrowers who opted out of automatic renewal. It did not reveal, however,
2 that under the default payment schedule, the total finance charge on a loan of
3 $300 would be $675 and the total payment would be $975. Nor did it
4 adequately reveal (although setting it forth in small print and hyper-technical
5 language outside the TILA box) that borrowers could decline the option of
6 automatic renewal.
7 The indictment alleged that Tucker’s enterprise charged interest rates
8 well in excess of the maximum rates allowed for payday loans in at least 25
9 states and Washington, D.C., and that Tucker and Muir willfully conducted
10 the affairs of the enterprise through the collection of unlawful debt. The
11 indictment included four RICO counts: three for participating in the conduct
12 of an enterprise’s affairs through the collection of unlawful debt (Counts 2-4),
13 and one for conspiracy to do so (Count 1). Each of the three substantive RICO
14 counts (Counts 2-4) listed five customers, located in various states, as to
15 whom the Defendants were charged with collecting unlawful debts. The
16 district court instructed the jury that, to convict Defendants on Counts 2-4, the
17 jury had to find that Defendants engaged in collecting at least one of the five
18 unlawful debts listed in that count.
9
1 The Government’s evidence showed that Tucker and Muir used three
2 different “fronts,” including the Tribes, to avoid detection of their usurious
3 lending practices or to give those practices the appearance of legality. The
4 first of these alleged fronts was Tucker’s business relationship, from 1998 to
5 2004, with County Bank of Rehoboth Beach, Delaware (“County Bank”). As a
6 nationally chartered bank, County Bank could lawfully lend anywhere in the
7 United States at interest rates that complied with the law of the state in which
8 it was headquartered. County Bank was headquartered in Delaware, which
9 does not set a limit on consumer interest rates. Tucker thus endeavored to
10 give his loans the appearance of legality by making it seem that County Bank
11 was the “lender” and his business was merely the “servicer,” while, in fact, he
12 continued to own and operate the loans. He continued to provide the capital
13 for the loans and to administer them through his Kansas office and through
14 websites that he owned and controlled. Tucker’s business continued to
15 control loan approval, while County Bank set up a fake “approval process” to
16 give the false impression that it was involved in decision-making. In exchange
17 for what another County Bank “servicer,” Adrian Rubin, described as
18 “renting [County Bank’s] name,” the bank received 5% of the loan interest
10
1 regardless of whether the loans were actually repaid, and Tucker bore the
2 entire loss when they were not.
3 As a second “front” strategy, during and subsequent to the County
4 Bank scheme, Tucker attempted to hide his identity as lender by paying
5 intermediaries to register a number of Nevada shell corporations, for which
6 his loan portfolios served as the “doing business as” aliases. Rubin testified
7 that Tucker used these aliases on certain documentation to make it harder for
8 regulators to identify him as the lender. Tucker also used the Nevada
9 addresses of the shell companies on loan documents to conceal the identity
10 and location of his Kansas business from borrowers. This created problems
11 when borrowers noticed that Tucker’s employees called from a phone
12 number with a Kansas area code of 913, which did not match with the
13 company’s purported address in Nevada, and asked the employees about the
14 discrepancy. In response, Tucker told his employees to tell borrowers that the
15 business was located in Nevada but that its phone calls were routed through
16 an internet server located in Kansas; he later began to use a “1-800” phone
17 number to avoid this issue.
11
1 Starting around 2003, Tucker formed relationships with a number of
2 Native American tribes in order to create the appearance that Tucker’s
3 lending portfolios were owned and operated by the Tribes. Under the
4 arrangement, the Tribe would claim to own one or more of the loan portfolios
5 in exchange for one percent of the portfolios’ revenues. As with his County
6 Bank arrangement, Tucker continued to provide all the capital for the loans
7 and bear the risk of default, as well as advertise, extend, administer, and
8 collect on the loans from his offices in Overland Park, Kansas. He set up bank
9 accounts in the Tribes’ names and routed portfolio revenues to those
10 accounts, but maintained control over the accounts and used them to fund
11 both business expenses and personal expenses including race cars, a private
12 jet, and a mansion in Aspen, Colorado. Tucker also used these accounts to
13 pay the Tribes’ one percent share of revenue, which went to other accounts
14 that were in fact owned and controlled by the Tribes. While the Tribes
15 claimed to “own” portfolios, Tucker maintained the ability to transfer
16 “ownership” of a portfolio to a different nominal owner if he found the
17 current nominal owner difficult to work with.
12
1 Tucker and Muir engaged in a variety of deceptive strategies to give the
2 false appearance that the Tribes owned and operated the lending business. As
3 with the Nevada shell corporations, the portfolios listed tribal mailing
4 addresses rather than the business’s actual location in Overland Park, Kansas.
5 When the Tribes received mail for the lending business, they forwarded it to
6 the Kansas office unopened. To keep up the appearance that the business was
7 located on tribal land, Tucker’s employees were instructed that they should
8 never, on pain of termination, reveal the Kansas location to borrowers, and at
9 least two employees were fired for doing so. This deception was taken to
10 theatrical lengths: employees in the Kansas office regularly received weather
11 reports for locations of the tribal reservations, so that they could make
12 accurate small talk with borrowers about the weather in Oklahoma or
13 Nebraska.
14 Meanwhile, on actual tribal land, Tucker and Muir built and staffed
15 sham business office facilities, designed to make it appear that the Tribes
16 were performing work to administer the loans, while in reality all the loan
17 processing took place in Kansas. The Tribes were given iPads from which
18 tribal officials were to access a website once a day to “approve” large swaths
13
1 of loans. However, the loans had already been approved by Tucker’s
2 employees in the Kansas office, the website did not allow the tribal officials to
3 access the loan applications being “considered,” and there was no mechanism
4 for the officials to deny the loans. In addition, the Tribes formed sham
5 corporate boards to run the portfolios, but the boards rarely met, had little
6 understanding of the lending business in Kansas, and exerted no control over
7 it. Tucker and Muir had the tribal officials perform these actions to give the
8 false impression that they were involved in the approval and administration
9 of the loans, while all such meaningful loan administration activity continued
10 to occur at Tucker’s business in Overland Park.
11 Tucker and Muir also arranged a sham transaction in which one of the
12 Tribes purportedly purchased Tucker’s loan processing company, CLK
13 Management (“CLK”), which then changed its name to AMG Services
14 (“AMG”). For the purchase of CLK, which made hundreds of millions of
15 dollars in annual revenue, the Tribe ostensibly paid Tucker just over $135,000.
16 However, the money in fact came from an account controlled by Tucker,
17 meaning that Tucker paid himself in order to make it appear that the
18 company had been purchased by the Tribe.
14
1 These charades were spectacularly successful, for a time. Tucker’s loans
2 attracted scores of complaints from borrowers and several investigations by
3 state authorities. By invoking the Tribes’ sovereign immunity, however,
4 Tucker and Muir were able to successfully quash subpoenas from and secure
5 dismissal of state regulatory enforcement actions. In doing so, Tucker’s
6 attorneys submitted false affidavits that materially misrepresented the role of
7 the Tribes in the lending business. In addition, when a borrower complained
8 that the loans were unenforceable under the law of her state, Tucker’s
9 employees responded that the loans were enforceable, and the borrower was
10 obligated to pay, because the loan was owned by a Native American tribe.
11 While at trial Tucker and Muir disputed any intention to deceive, they
12 did not meaningfully dispute that the above described actions took place.
13 Prior to trial, they filed a motion to dismiss the unlawful debt counts,
14 contending in relevant part that the loans did not constitute “unlawful debt”
15 under 18 U.S.C. § 1961(6) because the loans were authorized under tribal law
16 and were therefore not prohibited by state usury laws. The district court
17 denied the motion, reasoning that, if the allegations in the indictment were
18 true, because the loans were not issued by tribal entities but by businesses
15
1 controlled entirely by Tucker, and because the Tribes had no meaningful role
2 in the business, principles of tribal sovereign immunity did not apply. At
3 trial, Tucker and Muir argued that even if the loans were unlawful, their
4 conduct was not “willful” because they had a good faith belief, based on
5 advice of counsel regarding principles of tribal sovereign immunity, that their
6 conduct was lawful.
7 As noted, after a lengthy trial, a jury convicted Tucker and Muir on all
8 fourteen counts. The verdict sheet also posed a special interrogatory, to be
9 answered subsequent to the jury’s determination of guilt: “Has the
10 government proven beyond a reasonable doubt that, at the time of collection
11 of any of the loans you found as the basis of a guilty verdict on Counts Two
12 through Four, the lender, in fact, was defendant Scott Tucker or an entity
13 owned or controlled by him?” The jury answered, “Yes.”
14 Additionally, following the Defendants’ convictions, the court entered a
15 preliminary forfeiture order against Tucker, including a money judgment in
16 the amount of $3.5 billion and the forfeiture of certain specific property.
17 Tucker moved for a stay of the forfeiture order pending appeal of his
18 conviction, which the district court denied.
16
1 The Defendants appeal their convictions, and Tucker appeals from the
2 district court’s denial of the stay of forfeiture.
3 DISCUSSION
4 On this appeal seeking to set aside their convictions, Defendants’
5 principal contention is that the court gave an erroneous and prejudicial jury
6 instruction as to the mental state element of the usury-based charges. In the
7 court’s instruction to the jury on element six of Count 1 (which charged a
8 RICO conspiracy to lend at rates that were usurious under various state laws),
9 and by extension on Counts 2-4 (which charged substantive RICO offenses
10 based on unlawful usurious lending), the court told the jury that the
11 Government could show Defendants “willfully” participated in the conduct
12 of Tucker’s enterprise through the collection of unlawful debt if it proved that
13 they “acted deliberately, with knowledge of the actual interest rate charged
14 on the loan[s].” App’x at 264-65.
15 Defendants contend that this instruction was inconsistent with how
16 willfulness is generally understood in the criminal context, which requires
17
1 that a defendant be aware of the unlawful nature of the conduct. 2 Moreover,
2 Defendants conceded at trial that they were aware of the interest rates
3 charged on the loans, but argued that they believed in good faith that their
4 conduct was lawful. They contend that the erroneous charge in effect directed
5 a verdict of guilty on Counts 1-4. The Government agrees that it was required
6 to prove willfulness, but it contends that the instruction was correct.
7 We reject Defendants’ challenge. Because Defendants failed to preserve
8 their objection to the instruction in the manner prescribed by Federal Rule of
9 Criminal Procedure 30, we review for plain error. Even assuming that the
10 instruction was in error—a question we do not resolve—we find that the error
11 does not satisfy the plain error standard. Taken together with other
12 instructions given by the court to the jury, the instruction now challenged did
13 not affect Defendants’ substantial rights, did not “seriously affect[] the
14 fairness, integrity, or public reputation of judicial proceedings,” Johnson v.
15 United States, 520 U.S. 461, 467 (1997), and did not cause a “miscarriage of
2 See Bryan v. United States, 524 U.S. 184, 191-92 (1998) (“As a general matter,
when used in the criminal context, a ‘willful’ act is one undertaken with a
‘bad purpose,’” such that “in order to establish a ‘willful’ violation of a
statute, ‘the Government must prove that the defendant acted with
knowledge that his conduct was unlawful.’” (quoting Ratzlaf v. United States,
510 U.S. 135, 137 (1994))).
18
1 justice,” United States v. Frady, 456 U.S. 152, 163 (1982). Indeed we conclude,
2 based on the jury’s findings under other instructions, that the instruction
3 alleged to have been error had no effect whatsoever on the verdict.
4 Accordingly, reversal is not warranted under the plain error standard. We
5 also reject Defendants’ other arguments as without merit.
6 I. Willfulness Charge
7
8 a. Plain Error Review Applies
9
10 Where a claim of error in the court’s instruction to the jury is properly
11 preserved, we review that claim de novo, reversing if, “viewing the charge as a
12 whole, there was a prejudicial error.” United States v. Quattrone, 441 F.3d 153,
13 177 (2d Cir. 2006). In order to be preserved, an objection to the jury
14 instructions must be made by “inform[ing] the court of the specific objection
15 and the grounds for the objection before the jury retires to deliberate.” See
16 Fed. R. Crim. P. 30(d). This objection generally must occur after the
17 instruction is given to the jury, that being the court’s clearest opportunity to
18 fix a mistake that might otherwise require retrial. See Fogarty v. Near North Ins.
19 Brokerage, Inc., 162 F.3d 74, 79 (2d Cir. 1998). Failure to object in the manner
20 prescribed by the rule, so as to give the court a clearly framed opportunity to
19
1 correct an error in the charge, results in forfeiture of de novo review of the
2 error. Where the claim of error in the charge is not properly preserved, it is
3 reviewed instead under the far more exacting standard of plain error, as
4 specified in Rule 52(b). Fed. R. Crim. P. 30(d). (“Failure to object in accordance
5 with [Rule 30(d)] precludes appellate review, except as permitted under Rule
6 52(b).”).
7 The preclusion of de novo appellate review, however, is not absolute. If
8 the party that failed to object following the jury charge had previously
9 objected, making its position clear, and it was evident in the circumstances
10 that renewal of the objection would be futile because the court had clearly
11 manifested its intention to reject the objection, the failure to renew the
12 objection as specified in Rule 30(d) does not forfeit de novo review. See United
13 States v. Rosemond, 841 F.3d 95, 106-07 (2d Cir. 2016) (a defendant’s failure to
14 renew an objection will not forfeit de novo review if “taking further exception
15 under the circumstances would have been futile”); see also United States v.
16 Freeman, 357 F.2d 606, 613 (2d Cir. 1966) (“Since it is apparent that both Court
17 and counsel were fully cognizant of the issues being raised— and since any
18 further showing would have been an exercise in futility— it is entirely proper
20
1 that we consider the [issue raised] on appeal.”); cf. Thornley v. Penton Publ’g,
2 Inc., 104 F.3d 26, 30 (2d Cir. 1997) (holding, in the civil context, in which a
3 similar principle applies, that the futility standard was met where an
4 appellant had “argued its position to the district judge, who rejected it, [and]
5 a further exception after delivery of the charge would have been a mere
6 formality, with no reasonable likelihood of convincing the court to change its
7 mind on the issue”).
8 Although the Defendants had argued their position at a mid-trial
9 charge conference, neither raised an objection to the instruction following the
10 jury charge. App’x at 300. Accordingly, their objection to the willfulness
11 charge is subject to plain error review unless “taking further exception under
12 the circumstances would have been futile.” See Rosemond, 841 F.3d at 107.
13 We see no basis for concluding that it would have been futile for
14 Defendants to renew their objection. When the issue was earlier discussed at
15 the charge conference, the court expressed uncertainty as to how to charge on
16 state of mind. App’x at 210-17. The next day, counsel for Muir raised the issue
17 again, arguing that the statement in the proposed charge that the Government
18 could show willfulness by proving that the Defendants “acted deliberately
21
1 with knowledge of the actual interest rate” was inconsistent with the
2 definition of willfulness and should be removed. Id. at 228. After listening to
3 argument on the question, the court thanked counsel and ended the session
4 without giving a conclusive response. Id. at 230. Indeed, as Tucker
5 acknowledged in his appellate brief, “The court thanked counsel for her
6 comments but did not rule on the objections.” Tucker Br. at 38 (emphasis added).
7 On that record, it cannot be said that the district court had rejected the
8 Defendants’ position, making clear that a further objection after delivery of
9 the charge “would have been a mere formality, with no reasonable likelihood
10 of convincing the court to change its mind on the issue.” Thornley, 104 F.3d at
11 30. Had the Defendants reasserted their argument after the charge, it is
12 entirely possible that the court would have accepted the argument and given
13 a new instruction on the required state of mind, conserving judicial resources
14 by obviating the need for appeal and potential retrial. Accordingly, we review
15 for plain error.
16 b. The Error, If Any, Does Not Satisfy the Requirements
17 of “Plain Error”
18
19 When the plain error standard of review applies, the Court of Appeals
20 may vacate a conviction on account of a challenged jury instruction if the
22
1 instruction contains “(1) error, (2) that is plain, and (3) that affect[s]
2 substantial rights.” United States v. Botti, 711 F.3d 299, 308 (2d Cir. 2013)
3 (quoting Johnson v. United States, 520 U.S. 461, 467 (1997)). In addition, the
4 error must “seriously affect[] the fairness, integrity, or public reputation of
5 judicial proceedings.” Johnson, 520 U.S. at 467 (quoting United States v. Olano,
6 507 U.S. 725, 732 (1993)). In most cases, to “affect substantial rights” the error
7 “must have been prejudicial: It must have affected the outcome of the district
8 court proceedings.” Olano, 507 U.S. at 734. The Supreme Court has cautioned
9 that Rule 52(b) authorizes the Courts of Appeals to correct “particularly
10 egregious errors,” and is to be “used sparingly, solely in those circumstances
11 in which a miscarriage of justice would otherwise result.” Frady, 456 U.S. at
12 163 & n.14; accord United States v. Young, 470 U.S. 1, 15 (1985). The burden is
13 on the defendant to demonstrate that these criteria for relief are met. United
14 States v. Boyland, 862 F.3d 279, 289 (2d Cir. 2017). 3
3 In United States v. Viola, 35 F.3d 37, 41-42 (2d Cir. 1994), abrogated on other
grounds by Salinas v. United States, 522 U.S. 52 (1997), this circuit held that
where an error results from a supervening decision that alters the applicable
law, the burden is on the government with respect to the third element of plain
error analysis to show that the error was not prejudicial. We have repeatedly
expressed doubt whether this “modified” version of plain error review
survived the Supreme Court’s decision in Johnson v. United States, 520 U.S. 461
23
1 We conclude that, even if the challenged instruction was erroneous, the
2 error did not satisfy the requirements of the plain error standard. In
3 instructing the jury as to willfulness in regard to the conspiracy element of
4 Count 1 (the RICO conspiracy count), the court barred the jury from
5 rendering a guilty verdict on that count unless it found beyond a reasonable
6 doubt that the Defendants were aware of the unlawfulness of their lending
7 scheme. The guilty verdict on Count 1 thus demonstrates that the jury was
8 satisfied beyond a reasonable doubt that the Defendants acted with the
9 mental state that Defendants argue was required for Counts 2-4.
10 In its charge on Count 1, the court instructed the jury on willfulness
11 twice: (1) in the context of element two, that the Defendants “knowingly and
12 willfully joined the conspiracy;” and (2) in the context of element six, that the
13 Defendants “willfully and knowingly agreed to participate . . . in the affairs of
14 the Tucker payday organization through collection of an unlawful debt.” The
15 portion of the instruction Defendants now challenge applied only to element
(1997). See Boyland, 862 F.3d at 289. We have no occasion to decide that issue
here, because the error did not result from a supervening decision, and so,
even assuming that Viola remains good law, its “modified plain-error”
standard would not apply.
24
1 six (and was incorporated by reference into the instructions for the
2 substantive RICO counts, Counts 2-4).
3 As to element two (knowingly and willfully joining the conspiracy), the
4 court instructed the jury that “[w]illfully means to act deliberately and with a
5 purpose to do something that the law forbids,” and that to be convicted under
6 Count 1 the Defendants “must have been aware of the generally unlawful
7 nature of [their] act[s].” App’x at 258-59. The jury found the Defendants guilty
8 under Count 1. Therefore, the jury necessarily found that they knew the
9 unlawful nature of the lending they conspired to engage in—the same
10 lending that formed the basis of element six and that was charged as a
11 substantive offense in Counts 2-4. Because the jury found in connection with
12 the conspiracy element that the Defendants were aware of the unlawful
13 nature of their conduct, there is no risk that the jury could have found them
14 guilty on the “collection of an unlawful debt” element of Counts 1-4,
15 involving the loans that were the object of the conspiracy charged in Count 1,
16 without being satisfied beyond a reasonable doubt that the Defendants were
17 aware of the unlawful nature of their conduct.
25
1 Furthermore, the Government presented overwhelming evidence that
2 Defendants were aware of the unlawful nature of the loans, in the form of
3 Defendants’ extensive efforts to conceal their lending activities and to create a
4 sham illusion that the lending was done by Native American tribes, precisely
5 so that state usury laws would not seem to apply. See United States v. Atkins,
6 869 F.2d 135, 139 (2d Cir. 1989) (finding “specious” defendants’ claim that
7 they were unaware that their actions were illegal, in light of the strength of
8 evidence of lies and concealment); see also Bryan, 524 U.S. at 189 & n.8
9 (concluding that willfulness in illegal firearms sales was satisfied by showing
10 that defendant used “straw purchasers” and shaved off gun serial numbers).
11 Uncontradicted evidence showed that the Defendants: (1) prohibited
12 employees from revealing the business’s Kansas location, and instructed them
13 to falsely claim that they were located on tribal land; (2) caused mail related
14 to the lending business to be sent to the Tribes and then forwarded unopened
15 to the Kansas office, giving a false impression that lending activity occurred
16 on tribal lands; (3) required tribal officials to perform fake loan approvals on
17 designated iPads in order to give the appearance that they were involved in
18 the loan approval process; (4) set up a sham transaction in which AMG, a
26
1 company controlled by Tucker, “purchased” CLK (using money controlled by
2 Tucker) in order to give the appearance of tribal ownership; and (5) caused
3 attorneys to submit affidavits in state court actions that contained inaccurate
4 descriptions of a purported tribal role in administering the loans. In light of
5 this evidence, we have no doubt that, if the willfulness instruction challenged
6 by Defendants was erroneous, the error did not affect the verdict.
7 The court’s charge did not adversely “affect[] substantial rights,” Botti,
8 711 F.3d at 308, “seriously affect[] the fairness, integrity, or public reputation
9 of judicial proceedings,” Johnson, 520 U.S. at 467, or cause a “miscarriage of
10 justice” in these circumstances, Frady, 456 U.S. at 163. Defendants’ argument
11 is that the jury should not have been allowed to convict on the substantive
12 unlawful debt counts unless it found that the Defendants were aware of the
13 unlawful nature of their conduct. Taking into account the charge as a whole,
14 the jury did find (based on overwhelming evidence of that fact) that the
15 Defendants were aware of the unlawful nature of the lending scheme.
16 In reaching this conclusion, we express no view on whether willfulness
17 or awareness of unlawfulness was required for conviction under Counts 2-4.
18 We note, however, that were it not for the fact that the Defendants failed to
27
1 satisfy the plain error standard, we would face confusing and arguably
2 incompatible precedents regarding the required mental state for a RICO
3 offense involving unlawful debt. One source of the difficulty is that a RICO
4 unlawful debt offense can be predicated on a violation of a state’s civil usury
5 statute, and that many such civil statutes impose no state of mind
6 requirement at all. Certain applications of RICO in this context are thus in
7 tension with the Supreme Court’s recent reaffirmation of a “presumption in
8 favor of a scienter requirement” applicable to “each of the statutory elements
9 that criminalize otherwise innocent conduct.” Elonis v. United States, 135 S. Ct.
10 2001, 2011 (2015) (quoting United States v. X-Citement Video, Inc., 513 U.S. 64,
11 72 (1994)). Although we need not, and do not, resolve these issues here, we
12 discuss them briefly in the hope of exposing some of the potential problems.
13 For starters, our 1986 opinion in United States v. Biasucci, 786 F.2d 504
14 (2d Cir. 1986), written in the early days of RICO adjudications, ostensibly
15 adopted two incompatible state-of-mind standards. The case, like this one,
16 involved a RICO prosecution for collection of debts that were unlawful under
17 state law. On the one hand, our opinion declared that RICO requires “that the
18 defendant acted knowingly, willfully and unlawfully,” Biasucci, 786 F.2d at
28
 1 513—the statement Defendants here rely on for their argument that the
2 Government was required to prove willfulness. At the same time, the Biasucci
3 opinion upheld the RICO convictions on the ground that RICO imposes no
4 mental state requirement beyond that required by the predicate state statute.
5 Biasucci, 786 F.3d at 512. The issue raised on the appeal was the defendants’
6 contention that the government was required to prove their knowledge of the
7 specific interest rates being charged on the loans they were collecting. We
8 affirmed the convictions on the ground that there was no such requirement
9 under the predicate state statute and therefore no such requirement imposed
10 by RICO. The prosecution was predicated on the defendants’ violation of
11 New York Penal Law § 190.40. That statute required proof that the defendant
12 knowingly took or received interest at a rate exceeding 25% per annum. It did
13 not, however, require that the defendant know either the precise rate being
14 charged, or that the rate was illegal.4 Accordingly, after stating in dictum that
4The statute’s phrase “knowingly charges . . . any money or other property as
interest . . . at a rate exceeding twenty-five per centum per annum,” N.Y.
Penal Law § 190.40 (McKinney Supp. 1986), might conceivably be read to
require knowledge that 25% was the maximum lawful rate—which,
combined with the knowledge that the rate charged exceeded 25%, would
constitute knowledge of unlawfulness. However, the Court of Appeals had
previously made clear in Freitas v. Geddes Savings & Loan Ass’n, 63 N.Y.2d 254
29
1 RICO requires proof that the defendant acted willfully, the court upheld the
2 convictions based on a standard that did not require a showing of willfulness
3 or of awareness of the unlawful nature of the conduct.
4 Apart from its internal inconsistency, the Biasucci holding that no proof
5 of state of mind is required beyond what is required by the state statute can
6 be difficult to reconcile with the Supreme Court’s later insistence in X-
7 Citement Video and Elonis on a “presumption [in the interpretation of criminal
8 statutes] in favor of a scienter requirement,” applicable to “each of the
9 statutory elements that criminalize otherwise innocent conduct.” Elonis, 135 S.
10 Ct. at 2011. The Biasucci formulation would, under certain circumstances,
(1984), that § 190.40 does not require knowledge of the unlawfulness of the
act. Although Freitas involved a civil usury statute and not § 190.40, the
majority characterized the dissent’s test—under which “knowingly” requires
“knowledge that the facts exist which constitute the offense, not knowledge of
the unlawfulness of the act”—as being “akin to the standard utilized by [§
190.40].” Freitas, 63 N.Y.2d at 264; id. at 267 (Simons, J., dissenting). Similarly,
as to the civil statute at issue, the Freitas majority noted that “[i]f the note or
bond shows a rate of interest higher than the statutory lawful rate, it would
be immaterial whether the lender actually intended to violate the law.” Id. at
262. Thus, while “knowingly” in § 190.40 might on its face be read to require
awareness of unlawfulness, precedent made clear that “knowingly” was
satisfied by knowledge that the interest rate exceeded 25%, regardless of
whether the defendant was aware that such rate was unlawful.
30
1 authorize conviction under RICO of a defendant who neither knew the rate of
2 interest charged nor that the rate charged was illegal.
3 That difficulty is exacerbated if the principle espoused in Biasucci (and
4 other cases)—that RICO imposes no knowledge requirement beyond what is
5 imposed by the predicate state law—applies even when the unlawfulness
6 under state law is predicated on a state civil statute.
7 RICO offenses may be predicated on a single instance of collection of
8 unlawful debt, as well as on a pattern of racketeering activity. See 18 U.S.C. §
9 1962; United States v. Giovanelli, 945 F.2d 479, 490 (2d Cir. 1991). While
10 “racketeering activity” is generally understood to encompass only criminal
11 offenses, see Durante Bros. & Sons, Inc. v. Flushing Nat’l Bank, 755 F.2d 239, 247
12 (2d Cir. 1985), the RICO statute defines “unlawful debt” to include any debt
13 “which is unenforceable under State or Federal law . . . because of the laws
14 relating to usury” and “which was incurred in connection with . . . the
15 business of lending money or a thing of value at a rate usurious under State
16 or Federal law, where the usurious rate is at least twice the enforceable rate.”
17 18 U.S.C. § 1961(6) (emphasis added). This definition “includes debts that
18 would be usurious under the laws of several states, and hence unenforceable,
31
1 but that would not violate [any state] criminal usury laws.” Durante Bros., 755
2 F.2d at 247 (emphasis in original). Thus, the criminal RICO offense of
3 participating in the conduct of an enterprise’s affairs through collection of
4 unlawful debt may arguably be predicated on a violation of only civil usury
5 laws.
6 Some such state civil statutes render debt unlawful and unenforceable
7 solely by reason of the rate of interest charged, without regard to the mental
8 state of the lender or collector. Such statutes provide simply that loans
9 carrying an interest rate above a specified threshold are void and
10 unenforceable. A debt charging interest that exceeds the threshold rate and is
11 incurred in connection with the business of lending money at twice the
12 enforceable rate would thus appear to fit within the definition of “unlawful
13 debt” under 18 U.S.C. § 1961(6), and could thus arguably serve as the
14 predicate for a RICO offense, regardless of what the lender knew or intended.
15 Indeed, several of the state usury statutes underlying the RICO charges
16 in this case are of precisely this nature. For instance, the payday loan statute
17 in New Hampshire, which was the location of one of the customers named in
18 Count 2, provides: “The annual percentage rate for payday loans shall not
32
1 exceed 36 percent,” N.H. Rev. Stat. § 399-A:17(I), and makes payday loans in
2 excess of 36 percent unenforceable, regardless of mental state, see id. § 399-
3 A:23(VIII) (“If charges in excess of those permitted by this chapter shall be
4 charged . . . the contract of loan shall be void and the lender shall have no
5 right to collect or receive any charges, interest, or recompense whatsoever.”).
6 Similarly, New York’s civil usury statute, which was specifically listed in the
7 indictment, and which applies to loans listed in all three substantive RICO
8 counts, provides that the maximum interest rate “shall be sixteen per centum
9 per annum.” N.Y. Banking Law § 14-a(1); N.Y. Gen. Oblig. Law § 5-501. The
10 New York law also provides that “[a]ll bonds, bills, notes, assurances,
11 conveyances, all other contracts or securities whatsoever . . . whereupon or
12 whereby there shall be reserved or taken . . . any greater sum, or greater
13 value, for the loan or forbearance of any money, . . . than is prescribed in
14 section 5-501, shall be void.” N.Y. Gen. Oblig. Law § 5-511. Thus, loan
15 contracts with an interest rate exceeding 16% are unenforceable under New
16 York’s civil usury law, regardless of the mental state of the lender.
17 It is unclear whether the Biasucci court would have intended its
18 holding, that “RICO imposes no additional mens rea requirement beyond that
33
1 found in the predicate crimes,” Biasucci, 786 F.2d at 512, to apply also to
2 criminal RICO charges predicated on civil usury statutes such as these.
3 Biasucci itself involved a RICO offense that was based solely on New York’s
4 criminal usury statute. And Biasucci consistently refers to the predicate crimes,
5 perhaps suggesting that the court did not contemplate that the same rule
6 would apply to RICO offenses based on loans that were unenforceable under
7 state civil usury statutes. Moreover, the cases that Biasucci relied upon for that
8 rule involved racketeering-based RICO charges predicated on criminal
9 violations of the Taft-Hartley Act. See United States v. Boylan, 620 F.2d 359 (2d
10 Cir. 1980); United States v. Scotto, 641 F.2d 47 (2d Cir. 1980). None involved
11 RICO charges based on civil statutes. If, however, a defendant may be
12 convicted under RICO for participation in the making or collecting of a loan
13 merely because a state civil statute renders the loan unenforceable by reason
14 of the interest rate, without any requirement whatsoever as to the defendant’s
15 state of mind, in some circumstances this would authorize racketeering
16 convictions where the defendant had not only committed no state law
17 offense, but had done nothing that would offend social mores.
34
1 As noted above, a RICO prosecution can be predicated on a single
2 instance of collection of unlawful debt. And what the RICO statute calls an
3 “enterprise” can be “any individual, partnership, corporation, association, or
4 other legal entity,” 18 U.S.C. § 1961(4)—so long as it is “engaged in, [or its
5 activities] affect, interstate commerce,” id. § 1962(c). And high interest rates
6 can result from application of reasonable service fees to small debit balances
7 in circumstances that do not partake of the predatory lending practices
8 exhibited in this case (or those seen in Biasucci). Consider a store that sells
9 goods coming from different states, which allows customers charge accounts
10 and follows a policy for accounts that remain unpaid after four months to
11 impose a modest one-time $15 service fee (considered interest under usury
12 laws) and begin charging interest at an unobjectionable rate. An employee
13 who “participates in the conduct” of the business’s affairs by overseeing the
14 billing process,5 say, the credit manager, might face federal criminal liability
5The statutory requirement that the defendant “conduct or participate . . . in
the conduct” of the enterprise’s affairs, 18 U.S.C. § 1962(c), likely shields the
lowest rung of employees from RICO liability. See Reves v. Ernst & Young, 507
U.S. 170, 179 (1993) (requiring that the defendant have “some part in directing
the enterprise’s affairs” to be liable under § 1962(c) (emphasis in original));
United States v. Viola, 35 F.3d 37, 41 (2d Cir. 1994) (finding erroneous under
Reves a jury instruction that permitted conviction as long as the defendants
35
1 as a racketeer, although having committed no offense under state law or even
2 acted unreasonably, for mailing a monthly bill that charged the $15 fee where
3 the customer’s unpaid balance was sufficiently small. If RICO liability
4 requires no proof of state of mind other than what is required to show that
5 the loan is unenforceable under the predicate state statute and this rule
6 applies where unenforceability under state law depends on only the interest
7 rate (without regard to state of mind) or even where, as in Biasucci, criminal
8 liability under the state’s law does not require awareness of the illegality of
9 the rate, this can produce criminal liability for racketeering for
10 unexceptionable conduct. We have serious doubts that such a rule
performed duties that were “necessary and helpful” to the operation of the
RICO enterprise). But the Supreme Court in Reves clarified that § 1962(c)
could extend to “lower rung” participants who participate in the operation of
the enterprise, and it declined to decide “how far § 1962(c) extends down the
ladder of operation.” Reves, 507 U.S. at 184 & n.9. We know of no case setting
a precise lower bound for the position within the ladder required for § 1962(c)
liability, but it is clear that some degree of discretionary authority is sufficient.
See United States v. Diaz, 176 F.3d 52, 92-93 (2d Cir. 1999) (holding that
evidence was sufficient to meet the Reves standard because defendants were
“on the ladder [of operation], rather than under it” and exercised
“discretionary authority” in carrying out instructions). Thus, many “lower
rung” employees remain potentially subject to RICO charges for their
activities relating to a RICO enterprise.
36
1 appropriately “separate[s] wrongful conduct from otherwise innocent
2 conduct.” Elonis, 135 S. Ct. at 2010 (internal quotation marks omitted).
3 Because, as explained above, the jury necessarily found that the
4 Defendants acted willfully in rendering a guilty verdict on Count 1, and
5 because the evidence of willfulness was overwhelming in any event, the
6 Defendants have not met their burden of showing plain error. While the
7 issues we have discussed will pose troublesome questions in future cases, we
8 have no occasion to resolve those difficulties in this case, and do not purport
9 to do so.
10 II. Defendants’ Other Arguments Are Without Merit
11 Defendants also argue (1) the district court erred by excluding the
12 testimony of Defendants’ expert witness, attorney Gavin Clarkson, on the
13 topic of tribal sovereign immunity; (2) there was insufficient evidence that
14 Defendants engaged in wire fraud by misleading borrowers to believe that
15 Native American tribes were the true lenders, because Defendants had a good
16 faith belief that the Tribes were in fact the lender; and (3) the loans here did
17 not constitute “unlawful debt” as defined under RICO because, due to
37
1 principles of tribal sovereign immunity, state usury laws are not
2 “enforceable” against tribal loans. These contentions are without merit.
3 We reject Defendants’ contention that the district court erred by
4 excluding Clarkson’s testimony. A district court’s decision to exclude expert
5 testimony is reviewed for abuse of discretion. Zaremba v. Gen. Motors Corp.,
6 360 F.3d 355, 357 (2d Cir. 2004). Regardless of whether Clarkson’s testimony
7 was being offered to show that Defendants had an innocent state of mind
8 regarding the legality of their loans, or to show that their lending practices
9 were in fact not illegal, the court committed neither error nor abuse of
10 discretion in excluding it. As to the former issue, Clarkson did not advise the
11 Defendants, and so his proposed testimony would not have been probative of
12 what they understood. As for the legal issue of the lawfulness of the loans,
13 “[w]e have consistently held . . . that expert testimony that usurps . . . the role
14 of the trial judge in instructing the jury as to the applicable law . . . by
15 definition does not aid the jury in making a decision,” and is therefore
16 inadmissible under Federal Rule of Evidence 702. Nimely v. City of New York,
17 414 F.3d 381, 397 (2d Cir. 2005) (internal quotation marks and citation
18 omitted).
38
1 We also reject Defendants’ contention that there was insufficient
2 evidence of wire fraud consisting of misrepresenting the identity of the
3 lender. On a defendant’s challenge to his conviction based on the sufficiency
4 of evidence, “we view the evidence in the light most favorable to the
5 government, drawing all inferences in the government’s favor.” United States
6 v. Hawkins, 547 F.3d 66, 70 (2d Cir. 2008) (internal quotation marks omitted).
7 There was extensive evidence that Defendants were aware that the Tribes
8 were not the true lender, and that they falsely represented this was the case in
9 order to evade state regulators and to convince borrowers to make payments
10 on the unlawful terms they offered. Testimony of multiple witnesses
11 established that the Tribes had no meaningful influence or control over the
12 lending business, but rather served merely as a cover. Defendants made
13 extensive and sometimes extraordinary efforts, described above, to create a
14 false impression that the Tribes were involved in the lending. The evidence
15 was more than sufficient for the jury to conclude that Tucker and Muir knew
16 that the Tribes were not the lender, but falsely represented that they were.
17 We reject Defendants’ argument that the loans were not “unlawful
18 debt” as defined by RICO because, due to principles of tribal sovereign
39
1 immunity, state usury laws are not enforceable against tribal loans. The
2 district court correctly concluded (in its opinion denying Defendants’ motion
3 to dismiss the indictment) based on the facts alleged in the indictment—and
4 subsequently demonstrated at trial—that the Tribes’ involvement in the
5 lending business was a sham, so that principles of tribal sovereign immunity
6 had no application to Tucker’s non-tribal business. We reject the Defendants’
7 further contentions as frivolous.
8 III. The District Court Did Not Abuse Its Discretion In
9 Denying Tucker’s Application For a Stay of the
10 Forfeiture Order
11
12 Tucker also argues that the district court erred in denying his
13 application to stay execution of the forfeiture order against him pending his
14 appeal of the underlying convictions. Following Tucker’s conviction, in April
15 2018 the district court entered a preliminary forfeiture order against him,
16 including a money judgment in the amount of $3.5 billion and the forfeiture
17 of certain specific property, including ten cars, two residences, and jewelry.
18 Tucker moved for a stay of the forfeiture order in the district court, arguing
19 he was likely to succeed on the merits of his appeal, that the property at issue
20 would likely increase in value and had intrinsic value to him, and that the
40
1 government could offset the cost of maintaining the property pending the
2 outcome of his appeal by renting the real property. The district court rejected
3 Tucker’s motion, finding that under the factors set out in United States v.
4 Silver, 203 F. Supp. 3d 370, 385 (S.D.N.Y. 2016), Tucker’s likelihood of success
5 on appeal was low, and the cost to the government of maintaining the assets
6 would be high. The district court did, however, impose a stay as to the sale of
7 the family residence. Tucker then appealed from the denial of the stay of the
8 forfeiture order.
9 A district court may stay a forfeiture order pending appeal “on terms
10 appropriate to ensure that the property remains available pending appellate
11 review.” Fed. R. Crim. P. 32.2(d). While neither the Federal Rules nor this
12 Court’s precedent set out factors that pertain explicitly to stays of forfeiture
13 orders, we have expressed standards generally governing applications to stay
14 district court orders or proceedings pending appeal as follows: “(1) whether
15 the stay applicant has made a strong showing that he is likely to succeed on
16 the merits; (2) whether the applicant will be irreparably injured absent a stay;
17 (3) whether issuance of the stay will substantially injure the other parties
18 interested in the proceeding; and (4) where the public interest lies.” In re
41
1 World Trade Ctr. Disaster Site Litig., 503 F.3d 167, 170 (2d Cir. 2007) (internal
2 quotation marks and footnote omitted); see also United States v. Gelb, 826 F.2d
3 1175, 1177 (2d Cir. 1987) (applying traditional stay factors in deciding an
4 interlocutory appeal of a pretrial restraining order enjoining the transfer of
5 assets subject to criminal forfeiture). We review the denial of a stay for abuse
6 of discretion. See Pravin Banker Assocs., Ltd. v. Banco Popular Del Peru, 109 F.3d
7 850, 856 (2d Cir. 1997).
8 The district court, like others in our circuit facing similar fact patterns,
9 applied the slightly modified version of the traditional stay factors articulated
10 by the district court in Silver: “1) the likelihood of success on appeal; 2)
11 whether the forfeited asset is likely to depreciate over time; 3) the forfeited
12 asset’s intrinsic value to defendant (i.e., the availability of substitutes); and 4)
13 the expense of maintaining the forfeited property.” Silver, 203 F. Supp. 3d at
14 385; see also United States v. Ngari, 559 F. App’x 259, 272 (5th Cir. 2014)
15 (analyzing denial of stay by considering “(1) the likelihood of success on
16 appeal; (2) whether the forfeited assets will depreciate over time; (3) the
17 forfeited assets’ intrinsic value to the defendant; and (4) the expense of
18 maintaining the forfeited property”).
42
1 Under any such test, we hold that the district court did not abuse its
2 discretion in denying Tucker a stay of the forfeiture order. Tucker was indeed
3 unlikely to succeed on the merits of his appeal. Nothing in the record
4 contradicts the district court’s finding that the cost of maintaining the assets
5 was high, and that the property had no intrinsic value for Tucker; nor did the
6 record show that the property was more likely to increase, than decrease, in
7 value.
8 CONCLUSION
9 For the foregoing reasons, the judgment of the district court is
10 AFFIRMED.
43