United States v. Napout Et. Ano ( 2020 )

18-2750 (L)
United States of America v. Napout et. ano
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
August Term, 2019
(Argued: November 7, 2019 Decided: June 22, 2020)
Docket Nos. 18-2750 (L), 18-2820 (Con)
UNITED STATES OF AMERICA,
Appellee,
v.
JUAN ÁNGEL NAPOUT, JOSÉ MARIA MARIN,
Defendants-Appellants. 1
Before: SACK, HALL, AND BIANCO, Circuit Judges.
Defendants-appellants Juan Ángel Napout and José Maria Marin, former
officials of the global soccer organization Fédération Internationale de Football
Association ("FIFA"), were each convicted of, inter alia, multiple counts of
conspiracy to commit honest services wire fraud after a trial in the United States
District Court for the Eastern District of New York (Pamela K. Chen, Judge). On
appeal from the judgments of conviction, Napout and Marin argue principally that
their convictions rest upon impermissible extraterritorial applications of the
1 The Clerk of Court is respectfully directed to amend the official caption as listed above.
1
honest services wire fraud statute, 18 U.S.C. § 1346. They argue also that § 1346 is
unconstitutionally vague as applied to them. We conclude that the appellants'
convictions involve domestic applications of § 1346 that are sufficiently clear
under the circumstances. Accordingly, the judgments of the district court are
AFFIRMED.
JUDGE HALL filed a concurring opinion.
WILLIAM R. STEIN (Marc A. Weinstein,
Nicolas Swerdloff, Hughes Hubbard &
Reed LLP, on the brief), New York, NY, for
Defendant-Appellant Juan Ángel Napout;
CHARLES A. STILLMAN (James A. Mitchell,
Bradley R. Gershel, Ballard Spahr LLP, on
the brief), New York, NY, for Defendant-
Appellant José Maria Marin;
SAMUEL P. NITZE, Assistant United States
Attorney (Kevin M. Trowel, M. Kristin
Mace, Keith D. Edelman, Kaitlin T. Farrell,
on the brief), for Richard P. Donoghue,
United States Attorney for the Eastern
District of New York.
SACK, Circuit Judge:
INTRODUCTION
Defendants-appellants Juan Ángel Napout and José Maria Marin, former
officials of the global soccer organization Fédération Internationale de Football
2
Association, or "FIFA" (pronounced fee-fa), were each convicted of, inter alia,
multiple counts of conspiracy to commit honest services wire fraud after a trial in
the United States District Court for the Eastern District of New York (Pamela K.
Chen, Judge). On appeal from the judgments of conviction, Napout and Marin
argue principally that their convictions rest upon impermissible extraterritorial
applications of the honest services wire fraud statute, 18 U.S.C. § 1346. They argue
also that § 1346 is unconstitutionally vague as applied to them.
Because appellants Marin and Napout appeal their convictions following a
jury trial, we recount the facts viewing the evidence adduced in the district court
in "'the light most favorable to the government, crediting any inferences that the
jury might have drawn in its favor.'" United States v. Rosemond, 841 F.3d 95, 99–100
(2d Cir. 2016) (quotation and citation omitted). But we note that in the
introduction to his brief on this appeal, appellant Napout 2 declares:
2 In addition to adopting Napout's brief to the extent it is applicable to him, Marin
Br. at 3, n.2, Marin objects on appeal to: (1) the district court's use of an anonymous
and partially sequestered jury; (2) its ruling in limine, later reversed, as to the
admissibility of foreign law; and (3) the admissibility of certain expert testimony.
Conversely, Napout adopts Marin’s brief to the extent applicable to him as well.
Napout Br. at 19, n.8. For this reason, we consider the arguments made by the two
appellants as having been made by both, even when not adopted explicitly in their
individual briefs.
3
This case raises one overarching question: by what authority does the
United States purport to police the relationship between a
Paraguayan employee and his Paraguayan employer, and an alleged
scheme involving South Americans that took place almost entirely in
South America. The answer: there is no such authority.
Napout Br. at 1. Thus Napout makes clear the central theme of the appellants'
argument on appeal: Even if they did as the government alleged, and the jury so
found, as a matter of American statutory and constitutional law, they were not
guilty of the crimes for which they were charged.
***
Most Americans (and some others) refer to what we understand to be
"association football" as "soccer." In most of the rest of the world, of course, it is
called simply "football" (spelled "fútbol" in Spanish). 3 By any name, it is the
3The "word 'soccer' comes from the use of the term 'association football' in Britain
and goes back 200 years. . . . One variant of the game [that was played with one's
hands] became 'rugby football.' Another variant [which was played with one's
feet] came to be known as 'association football' after the Football Association
formed to promote the game in 1863, 15 years after the rules were made at
Cambridge. 'Rugby football' became ruggle' for short. 'Association football'
became 'soccer.'" Tony Manfred, The Real Reason We Call It 'Soccer' Is All England's
Fault, BUSINESS INSIDER AUSTRALIA (June 14, 2014, 9:15 AM),
https://www.businessinsider.com.au/why-americans-call-it-soccer-2014-6. It may be
worth noting, in the context of this appeal, that the term "association football" is
included in the name of one of the two continent-wide associations involved in
this prosecution, CONCACAF: the "North American Confederation of North,
Central American and Caribbean Association Football."
4
world's most popular sport. 4 Known in some quarters as the "Beautiful Game," 5
much of the activity surrounding organized soccer, including in particular efforts
to profit from the game's largest tournaments, has created widespread
opportunities for corruption. The major, largely successful criminal prosecutions
that included those in the case here on appeal reflect the fact that those
opportunities are sometimes taken advantage of by people associated with the
sport.
These allegations of corruption have been associated with the operation of
soccer's Zurich, Switzerland-based international governing body, FIFA, and some
of its regional affiliates in North, Central, and South America, particularly la
Confederación Sudamericana de Fútbol ("CONMEBOL"), and the Confederation
4 "[S]occer [] is the most popular sport in the world. It is estimated that more than
half of the world's population consider themselves to be association football
(soccer) fans. The sport enjoys an estimated 4.0 billion person following."
Benjamin Elisha Sawe, The Most Popular Sports in the World, WORLDATLAS,
https://www.worldatlas.com/articles/what-are-the-most-popular-sports-in-the-
world.html (last updated Apr. 5, 2018).
5See Edson Arantes do Nascimento ("Pelé"), My Life and the Beautiful Game (1977).
"Pelé, byname of Edson Arantes do Nascimento, (born October 23, 1940, Três
Corações, Brazil), [a] Brazilian football (soccer) player, in his time [was] probably
the most famous and possibly the best-paid athlete in the world." Pelé,
ENCYCLOPEDIA BRITANNICA (Feb. 6, 2020), https://www.britannica.com/
biography/Pele-Brazilian-athlete.
5
of North, Central America and Caribbean Association Football ("CONCACAF").
Specifically at issue in this case are the bribes and kickbacks paid in connection
with the process by which FIFA and its regional associates sell broadcasting and
marketing rights to their more popular tournaments. Beginning at least as early
as the 1980s, FIFA officials, including leaders of CONMEBOL, CONCACAF, and
other such continental and national associations, accepted many millions of
dollars in bribes from sports media and marketing companies in return for their
granting those companies broadcasting and marketing rights to tournaments
under the leaders' control.
In May 2015, after nearly five years of investigation by, inter alia, the United
States Internal Revenue Service (the "IRS"), the United States Federal Bureau of
Investigation (the "FBI"), and the United States Attorneys' Office for the Eastern
District of New York, the latter secured indictments against nine FIFA officials and
five executives from sports marketing and media companies, for, among other
things, racketeering conspiracy, wire fraud and wire fraud conspiracy, and money
laundering and money laundering conspiracy, arising out of alleged bribery
schemes connected to FIFA's tournaments. United States v. Webb et al., No. 15-cr-
6
00252 (E.D.N.Y. May 20, 2015), ECF No. 1, App. at 42. 6 Some six months later, in
November 2015, the government filed a superseding indictment charging all but
three of the original defendants, along with sixteen additional FIFA officials, with
similar crimes arising out of the same schemes. United States v. Webb et al., No. 15-
cr-00252 (E.D.N.Y. Nov. 20, 2015), ECF No. 102, App. at 48–49. 7
In June 2017, after most of the charged defendants had pleaded guilty, some
of them having cooperated with prosecutors and investigators, the government
filed a second superseding indictment including as named defendants just three
officials of South American regional and national organizations: Manuel Burga,
the former president of Peru's national soccer federation; Juan Ángel Napout, the
former president of Paraguay's national soccer federation; and José Maria Marin,
6 The entry refers to the indictments of Jeffrey Webb, Eduardo Li, Julio Rocha,
Costas Takkas, Jack Warner, Eugenio Figueredo, Rafael Esquivel, José Maria
Marin, Nicolas Leoz, Alejandro Burzaco, Aaron Davidson, Hugo Jinkis, Mariano
Jinkis, and José Margulies.
7The entry refers to the indictments of Eduardo Li, Julio Rocha, Costas Takkas,
Eugenio Figueredo, Rafael Esquivel, José Maria Marin, Nicolas Leoz, Aaron
Davidson, Hugo Jinkis, Mariano Jinkis, Alfredo Hawit, Ariel Alvarado, Rafael
Callejas, Brayan Jimenez, Rafael Salguero, Hector Trujillo, Reynaldo Vasquez,
Juan Ángel Napout, Manuel Burga, Carlos Chavez, Luis Chiriboga, Marco Polo
Del Nero, Eduardo Deluca, José Luis Meiszner, Romer Osuna, and Ricardo
Teixeira. (Appellants' names in bold type).
7
a former head of the Brazilian national soccer federation. The second superseding
indictment alleged one count of racketeering conspiracy against Burga; one count
of racketeering conspiracy, two counts of wire fraud conspiracy, and two counts
of money laundering conspiracy against Napout; and one count of racketeering
conspiracy, three counts of wire fraud conspiracy, and three counts of money
laundering conspiracy against Marin.
Burga, Napout, and Marin all proceeded to trial in the district court
beginning on November 6, 2017. On December 22, 2017, after six weeks of trial
and five days of jury deliberations, the jury returned its verdicts. Burga was
acquitted of the one count against him; Napout was convicted of the racketeering
conspiracy and wire fraud conspiracy counts but acquitted on the money
laundering conspiracy counts; and Marin was convicted on all counts but one, a
money laundering conspiracy count on which he was acquitted.
On August 22, 2018, the district court sentenced Marin to 48 months'
imprisonment and two years' supervised release. A week later, the court
sentenced Napout to 108 months' imprisonment and two years' supervised
release.
8
On appeal, Marin and Napout challenge their convictions for honest
services wire fraud conspiracy on two principal grounds. First, they contend that
the honest services wire fraud statute criminalizes only fraudulent conduct that
occurs on U.S. — not foreign — soil and therefore cannot support convictions
based on conduct, such as theirs, that occurred overseas. Second, they argue that
it is unclear whether the honest services wire fraud statute criminalizes a breach
of the fiduciary duty that a foreign employee owes to his foreign employer, and
therefore that the lack of clarity leaves the statute unconstitutionally vague as
applied to them.
For the reasons set forth below, we conclude that these and the appellants'
other arguments on appeal are without merit. We therefore affirm the judgments
of the district court.
BACKGROUND
I. World Soccer/Football: General Background
The Fédération Internationale de Football Association (popularly known
and hereinafter referred to as "FIFA") is a Zurich, Switzerland-based entity
responsible for governing the sport of what Americans call "soccer." Test. of
Stephanie Maennl, Trial Tr. at 106. Two hundred eleven associations world-wide,
9
each governing some part of the game in a particular region, country, or territory,
are members of FIFA. Id.
FIFA's member associations are grouped into six continental confederations
covering, inter alia, all continents except (of course) Antarctica. Id. at 110. "The
Confederation of North, Central American and Caribbean Association Football,"
or "CONCACAF," referred to above, consists of 35 national associations; the South
American confederation, also referred to above, including an association from
every country on that continent save for Suriname and Guyana, is known as "la
Confederación Sudamericana de Fútbol," or "CONMEBOL." Id. at 110–13.
FIFA and its members are governed by sets of rules called codes of ethics.
Id. at 138. As relevant here, FIFA's lengthy and detailed code of ethics provides
that the organization's officials "have a fiduciary duty to FIFA, the [continental]
confederations, [and the national] associations." FIFA Code of Ethics (2012 ed.),
Art. 15. In a section entitled "[b]ribery and corruption," the code provides that
FIFA officials "must not offer, promise, give or accept any personal or undue
pecuniary or other advantage . . . for the execution or omission of an act that is
related to their official activities and is contrary to their duties or falls within their
discretion." Id., Art. 21.
10
CONMEBOL's code of ethics is modeled on FIFA's and also requires the
confederation's officials to act with "absolute loyalty, particularly to CONMEBOL
[and] FIFA[.]" CONMEBOL Code of Ethics (2013 ed.), Art. 15. The code also
provides that CONMEBOL officials "may not offer or promise or give or accept
any improper personal or economic benefit or any other type of benefit, in order
to obtain or maintain a transaction or any other dishonest benefit with respect to
any CONMEBOL person or person outside CONMEBOL." Id., Art. 21.
One of FIFA and the confederations' principal functions is to promote soccer
by organizing international competitions. The most prominent is the World Cup,
a quadrennial tournament among the leading national teams of the six continental
confederations. Since its inception in 1930, with the World War II exceptions of
1942 and 1946, it has taken place in various locations around the globe. 8
CONMEBOL also holds tournaments the first of which preceded the first
World Cup. Since 1916, 9 the confederation has organized the Copa América, a
8 See Sean Braswell, How Brazil Saved The World Cup In The Aftermath Of World War
II, NPR (June 11, 2014, 7:07 AM),
https://www.npr.org/sections/parallels/2014/06/11/320727176/how-brazil-saved-the-
world-cup-in-the-aftermath-of-world-war-ii.
9"To celebrate the centenary of its independence on 9 July 1816 . . . , Argentina
organized a tournament of 2 to 17 July 1916 with Chile, Uruguay and Brazil. This
Campeonato Sudamericano of Selecciones (South American Championship of
11
quadrennial event now held in non-World Cup years in which national teams
from each of CONMEBOL's ten countries, in addition to two national teams
invited from outside the region, compete to be crowned champion of South
America. Test. of Stefan Szymanski, Trial Tr. at 168, 183–84.
CONMEBOL also hosts an annual tournament called the Copa Libertadores
among the most successful local club teams in South America. Club teams qualify
for the Copa Libertadores either by finishing above a specified level in the
standings of their country's premier league or by winning their country's annual
club tournament. In Brazil, for example, five clubs secure bids to the Copa
Libertadores each year: the top four finishers in the country's premier league, the
Campeonato Brasileiro Série A; and the winner of the annual Copa do Brasil
tournament, organized by Brazil's national soccer organization, the Confederação
Brasileira de Futebol ("CBF").
These tournaments are immensely popular. For example, according to
FIFA, approximately 3.57 billion people — more than half of the world's
population over the age of four — watched some part of the 2018 World Cup. More
Nations) is the first edition of what is now known as the 'Copa América.'" History
of the Birth to the Creation of the Football Copa America, FOOTBALL-
EN.FOOTFOREVER.COM, http://football-
en.footforever.com/CA/Divers_CA/historique_div_ca.php (last visited May 18, 2020).
12
Than Half the World Watched Record-Breaking 2018 World Cup, FIFA.com (Dec. 21,
2018), www.fifa.com/worldcup/news/more-than-half-the-world-watched-record-breaking-
2018-world-cup. This popularity creates fertile ground for business.
Between 2011 and 2014, FIFA generated approximately $5.718 billion in
revenue, largely from sums paid by television broadcasting companies for the
right to broadcast the organization's tournaments. Test. of Stephanie Maennl, Trial
Tr. at 133–34. In 2014 alone, for example, FIFA generated nearly $743 million in
revenue from the sale of television broadcasting rights. Id.
FIFA also generates hundreds of millions of dollars in annual revenue by
selling "marketing" rights connected with its tournaments. They include, among
other things, the right to advertise on stadium billboards and team jerseys; the
right to sponsor tournaments; and the right to license images, names, and other
forms of intellectual property related to tournaments.
To facilitate the sale of both broadcasting and marketing rights, FIFA and
the confederations frequently hire sports media and marketing companies to serve
as intermediaries between them and the various entities that wish to purchase the
rights in order to exercise them. Test. of Stefan Szymanksi, Trial Tr. at 184–85. The
companies, which specialize in selling rights connected to soccer tournaments, are
13
able to obtain higher prices for the rights than would FIFA or the confederations
acting on their own. Id. at 185–86.
To select among competing sports media and marketing companies, FIFA
and the confederations typically rely on a tender process whereby companies
submit bids to the soccer organizations arguing why they would be best suited to
serve as an intermediary in a particular circumstance. Id. at 187.
II. Alleged Corrupt Practices.
A. The Parties.
Beginning at least as early as the 1980s and continuing through the mid-
2010s, the process for selling both broadcasting and marketing rights to many of
FIFA's tournaments became rife with corruption, as reflected in part by the
successful prosecutions in the district court of persons associated with the
organization. Officials of FIFA, CONCACAF, and CONMEBOL, including the
leaders of many of the related national associations, accepted millions of dollars in
bribes from sports media and marketing companies in return for arranging for
those companies to receive broadcasting and marketing rights in connection with
tournaments under the leaders' control.
14
In particular, according to the indictments in the case at bar, three South
American companies routinely undertook schemes to bribe CONMEBOL officials
in return for the officials awarding them exclusive broadcasting and marketing
rights to CONMEBOL tournaments. The indictment identifies the companies as
Torneos y Competencias S.A. ("Torneos"), an Argentinian media business that
operates television stations throughout Latin America, United States v. Webb et al.,
No.15-cr-00252 (E.D.N.Y. Nov. 20, 2015), Second Superseding Indictment (the
"S.S.I."), ECF No. 604 at 13, ¶ 33; Traffic Group ("Traffic"), a multi-national sports
marketing company headquartered in São Paulo, Brazil, id. at 14, ¶ 37; and Full
Play Group S.A. ("Full Play"), a sports marketing company headquartered in
Buenos Aires, Argentina, id. at 17-18, ¶ 47.
B. The Schemes
1. The Copa América Scheme. The largest corrupt scheme was related
to the Copa América tournaments. Between 1987 and 2010, Traffic had an
agreement with CONMEBOL for the exclusive broadcasting and marketing rights
to the Copa América. Id. at 33–34, ¶ 90. In order to secure that agreement, and to
maintain its relationship with CONMEBOL thereafter, Traffic paid bribes to
15
various CONMEBOL officials, including the confederation's president, Nicolas
Leoz. Id.
In 2010, CONMEBOL ended its relationship with Traffic. Id. at 34, ¶ 91.
Sometime that year, Full Play, led by its controlling principals, father-and-son
Hugo and Mariano Jinkis, began negotiating with CONMEBOL to take over as the
exclusive rights holder for the Copa América tournament. Test. of Luis Bedoya,
Trial Tr. at 1581. As part of the negotiations, Mariano Jinkis offered bribes of $1
million to the presidents of the smaller national associations of Bolivia, Colombia,
Ecuador, Paraguay, Peru, and Venezuela, who had formed a coalition — known
as the "Group of Six" — to attempt to wrest power within CONMEBOL from the
historically dominant nations of Argentina, Brazil, and Uruguay. S.S.I. at 13, ¶ 33,
App. at 204. At that time, appellant Juan Ángel Napout was the president of the
Paraguayan national association, the Asociación Paraguaya de Fútbol ("APF"), and
the later-acquitted Manuel Burga was the president of the Peruvian national
association, the Federación Peruana de Fútbol ("FPF"). Id. at 33–34, ¶ 90, App. at
203–04.
Apparently as a result of Jinkis's offer of bribes, in June 2010, CONMEBOL
entered into an agreement to provide Full Play with the exclusive broadcasting
16
and marketing rights to the 2015, 2019, and 2023 editions of the Copa América. Id.
at 34, ¶ 91; Text of Translation of Agency Agreement Between CONMEBOL and
Full Play Group, S.A. (June 8, 2010), App. at 809–19.
In the following year, 2011, Traffic filed a lawsuit in Florida state court
against CONMEBOL and Full Play alleging that their 2010 agreement had violated
CONMEBOL's contract with Traffic. S.S.I. at 34, ¶ 92. To resolve the suit, Traffic
and Full Play agreed to form, with Torneos, a joint-venture named Datisa
Incorporated, of which each company would own a one third interest. Test. of
Alejandro Burzaco, Trial Tr. at 416, App. at 441.
CONMEBOL and Full Play then terminated their contract, and in May 2013,
CONMEBOL, Datisa, and Full Play reached an agreement providing Datisa with
the exclusive rights to the 2015, 2019, and 2023 editions of the Copa América.
Purchase Contract Among CONMEBOL, Datista and Full Play (May 25, 2013),
App. at 860. The agreement also gave Datisa exclusive rights to a special
centennial edition of the Copa América scheduled to be played in 2016 in stadiums
across the United States. Id. In exchange for the rights, Datisa agreed to pay
CONMEBOL $80 million for each edition of the tournament. Id. Datisa also
agreed to pay bribes ranging from $1–$3 million for each edition of the
17
tournament, in addition to a bonus payment of $1–$3 million, to the presidents of
each of CONMEBOL's national associations except for Uruguay, an expansion
from Traffic's practice of bribing only the presidents in the Group of Six. Test. of
Alejandro Burzaco, Trial Tr. at 418–20, Gov't App. at 149. The bribes Datisa gave
to the leadership of the Brazilian association, the CBF, were complicated by the
fact that the association's former president, Ricardo Teixeira, had resigned from
his position in the spring of 2012 after learning he was under criminal investigation
for corruption in Switzerland and Brazil. Following Teixeira's resignation, Datisa
began splitting their bribes to the CBF between appellant Marin, a former
politician from São Paulo who had replaced Teixeira as CBF president, and Marco
Polo Del Nero, who had replaced Teixeira on a FIFA leadership committee. 10 Test.
of Alejandro Burzaco, Trial Tr. at 352–53, 419; see also Test. of Eladio Rodrigues,
Trial Tr. at 2363.
Like other CONMEBOL officials, Marin worked with Full Play, Traffic, and
Torneos to keep his bribe payments secret. The money destined for him would
frequently be deposited in a Swiss bank account of a Torneos-controlled shell
company. Test. of IRS Special Agent Berryman, Trial Tr. 3430–40, App. at 594–95;
10 Upon Teixeira's resignation, Marin and Del Nero arranged for Del Nero to
succeed Marin as CBF president in 2015.
18
Transcript of Recorded Conversation Among José Hawilla, Hugo Jinkis, Mariano
Jinkis, and Marin at 21–22, (April 30, 2014), Gov't App. at 534–35. The money
would be sent from the Swiss bank to an Andorran bank account controlled by
Marin's associate, Wagner Abrahao. Id. Abrahao would then send installments
from another of his Andorran bank accounts to a Morgan Stanley bank account in
New York that Marin had opened in 2012 under the name "Firelli International
Limited," a shell company he owned and controlled for his own benefit. Id.
2. The Copa Libertadores Scheme. CONMEBOL's Copa Libertadores
tournament was similarly subjected to bribery. Starting at least as early as 2006,
Torneos paid annual bribes to CONMEBOL officials in exchange for the officials
providing a Torneos affiliate, T&T Sports Marketing Ltd., with exclusive rights to
broadcast Copa Libertadores matches on television. Test. of Alejandro Burzaco,
Trial Tr. at 252, 295. In the scheme's earliest years, according to Torneos's Chief
Executive Officer Alejandro Burzaco, annual bribes of $600,000 were paid to Leoz
and five other CONMEBOL officials, including Teixeira. Id. In March 2008,
CONMEBOL extended T&T's contract and sold to the company broadcasting
rights to the 2014 through 2018 editions of the tournament. Id. at 310–11. Burzaco
continued to pay bribes of between $500,000 and $1 million to the same six
19
CONMEBOL officials. Id. at 313–14. In 2010, Burzaco began paying annual bribes
to, in addition to the six officials, the Group of Six presidents. Id. at 339. 11 Two
years later in December 2012, after a vote by the organization's leadership,
CONMEBOL extended T&T's contract through 2022. Agreement Between
CONMEBOL and Torneos (Dec. 20, 2012), App. at 771–78. Burzaco continued to
pay CONMEBOL officials, including the appellants Napout, and Marin, annual
bribes of between $300,000 and $1.2 million. Test. of Alejandro Burzaco, Trial Tr.
at 329–30, 339, 574.
3. The Copa do Brasil Scheme
There were also bribes paid in connection with CONMEBOL's domestic
soccer tournaments. For example, between 1990 and 2009, Traffic, through its
owner José Hawilla, paid yearly bribes to Teixeira to obtain a series of contracts
for the broadcasting and marketing rights for the Copa do Brasil. S.S.I. at 43, ¶ 116.
The last of these, executed in 2009, provided Traffic with those rights to the 2009
through 2014 editions of the Copa do Brasil. Id. at 43–44, ¶ 117.
In 2011, Klefer Produções e Promoções Ltda. ("Klefer"), a sports-marketing
company, made payments to Teixeira to induce him to enter into an agreement
Burzaco began splitting Teixeira's bribe payment between Marin and Del Nero
11
when Teixeira resigned in 2012, as Datisa had for the Copa América. Id. at 353.
20
with Klefer on behalf of CBF. Under the agreement, CBF provided Klefer with the
rights for the 2015 through 2022 editions of CBF's Copa do Brasil. Id. at 45, ¶ 118;
see also Test. of Jose Schettino, Trial Tr. at 2573–77.
In 2012, Traffic and Klefer agreed to pool the marketing rights for the 2013
through 2022 editions of the Copa do Brasil; they also agreed to share the cost of
the bribe payments to be made to CBF officials. S.S.I. at 45, ¶ 118. When Teixeira
resigned from the CBF in 2012, Traffic and Klefer began paying annual bribes of
500,000 Brazilian Reais (approximately $211,864) to both Marin and Del Nero, like
Datisa and Torneos had done in connection with the international tournaments.
Trans. of Conversation Among José Hawilla, Kleber Fonseca de Souza Leite, and
Maria Regina (April 2, 2014) at 4–6, Gov't App. at 559–61.
4. The Paraguayan World Cup Qualifying Scheme
CONMEBOL officials also solicited and received bribes in return for
broadcasting and marketing rights for the "qualifying" matches to be played by
various CONMEBOL national teams in the run up to the 2014 and 2018 World
Cups. In Paraguay, for example, during October 2011, the APF agreed to sell the
rights to its national team's 2014 and 2018 qualifying matches to Ciffart Sports S.A.
21
("Ciffart"), an intermediary for Full Play. Test. of Santiago Peña, 12 Trial Tr. at 1167–
71, Gov't App. at 123–27. In order to obtain these rights, Full Play agreed to pay
Napout, then-president of the APF, bribes of $1 million for the matches related to
the 2014 tournament and $1.5 million for those related to the 2018 tournament. Id.
at 1172–73, Gov't App. at 128–29, 400 (the "Peña Ledger").
Like Marin, Napout arranged to receive payments discreetly, or — as he
referred to it— in a "safe way." Test. of Luis Bedoya, Trial Tr. at 1584. To keep
Napout's involvement in the schemes from public view, Full Play would typically
wire money from a United States bank account held in the name of a Seychelles
company to an unrelated third party selected by a "cambista" (money changer);
the third party would then deliver American cash to a "safety box" in Full Play's
office, and Mariano Jinkis would then personally deliver the cash to Napout in
Buenos Aires, usually meeting him in the Hilton hotel there. Test. of Santiago
Peña, Trial Tr. at 1160–64, Gov't App. at 116–20. On occasion, Full Play also bribed
Napout with concert tickets and a luxury vacation apartment in Punta del Este,
12Santiago Peña, a cooperating witness described by Marin as a co-conspirator,
Marin Br. at 12, had been an employee of Full Play, Test. of Santiago Peña, Trial
Tr. at 1047. As explained by the government in its brief, "At trial, the government
introduced a secret ledger of bribes paid to various soccer officials that was
maintained by Full Play’s financial manager, Santiago Peña." Gov't. Br. at 10.
22
Uruguay, portions of which were also paid for by money wired from a United
States bank. Id. at 1158–59, Gov't App. at 114–15.
C. Indictments and Arrests
In May 2015, a grand jury in the United States District Court for the Eastern
District of New York handed down an indictment charging nine CONCACAF and
CONMEBOL officials, including Marin, and five executives from sports marketing
and media companies, with, among other things, racketeering conspiracy, wire
fraud and wire fraud conspiracy, and money laundering and money laundering
conspiracy. United States v. Webb et al., No.15-cr-00252 (E.D.N.Y. May 20, 2015),
ECF No. 1, App. at 42. The charges in the 47-count indictment arose out of the
bribery schemes connected to the tournaments in violation of various laws of the
United States. On May 27, 2015, Marin was arrested by Swiss authorities while he
was in Zurich for FIFA-related meetings. United States v. Webb et al., No.15-cr-
00252 (E.D.N.Y. Aug. 6, 2018), Letter in Support of CONMEBOL's Request for
Restitution, ECF No. 968 at 6, App. at 1541. By the time of his arrest, Marin had
23
received more than $3 million in payments in connection with the Copa América,
Copa Libertadores, and Copa do Brasil schemes.13
Napout, who by that time had begun serving as CONMEBOL's president,
was not named in the original, May 2015, indictment. In the weeks following the
filing of that indictment, he undertook efforts to hide the evidence of his
involvement. United States v. Webb et al., No.15-cr-00252 (E.D.N.Y. Oct. 17, 2017),
Sealed Memo. & Order Granting Gov't Mot. for Partially Anonymous and Semi-
Sequestered Jury, ECF No. 717. He hired an attorney to represent him in his
personal capacity and instructed the attorney to hire another attorney — whom
Napout had selected — to represent CONMEBOL. Id. at 3. Soon thereafter,
Napout learned that he was a target of the U.S. government's ongoing
investigation and instructed his personal attorney to enter into a common-interest
agreement with CONMEBOL's attorney in an effort to shield Napout from
criminal liability by controlling the material that CONMEBOL would turn over to
the government. Id. at 7–8.
13 See, e.g., United States v. Webb et al., No.15-cr-00252 (E.D.N.Y. Sept. 11, 2018),
Judgment, ECF No. 1015 at 8, Gov't Special App. at 16 (ordering forfeiture in the
amount of $3,335,593).
24
On November 3, 2015, after five months of incarceration in Switzerland,
Marin was extradited to the United States and released here on bond. On
November 25, the government filed a superseding indictment charging all but
three of the original defendants, along with sixteen additional officials of
CONCACAF and CONMEBOL, including Burga and Napout, with participating
in the racketeering, money laundering and wire fraud conspiracies. United States
v. Webb et al., No.15-cr-00252 (E.D.N.Y. Nov. 25, 2015), Sealed Indictment of, inter
alia, José Maria Marin, Juan Ángel Napout, and Manuel Burga, ECF No. 102, App.
at 48–49.
On December 3, 2015, Napout was arrested also while in Zurich for FIFA-
related meetings. By that time, Napout had, like Marin, received more than $3
million in bribes in connection with the Copa América, Copa Libertadores, and
Paraguayan World Cup qualifying matches. 14 Later that day, the CONMEBOL
attorney who had been hired by Napout after the first group of officials were
arrested in May, entered Napout's CONMEBOL office, and, acting pursuant to
Napout's instructions, removed a computer that Napout knew contained material
14 See, e.g., United States v. Webb et al., No.15-cr-00252 (E.D.N.Y. Sept. 4, 2018),
Judgment, ECF No. 1008 at 8, Gov't Special App. at 8 (ordering forfeiture in the
amount of $3,347,025.88); see also Gov't App. at 400 (Peña Ledger listing payments
made to Napout).
25
relevant to the government's investigation, including evidence of Napout's
relationship with defendants charged in the original indictment and evidence that
he had accepted bribes. United States v. Webb et al., No.15-cr-00252 (E.D.N.Y. June
22, 2018), Memorandum & Order Regarding Post-Trial Motions, ECF No. 952 at
28–29, Special App. at 88–92. Several weeks after his arrest, Napout was
extradited to the United States by Swiss authorities and, upon arrival, released on
bond.
A year and a half later, on June 14, 2017, after most of the defendants
charged in the superseding indictment pleaded guilty to the charges, some of them
having cooperated with prosecutors and investigators, the government filed a
second superseding indictment naming only three defendants: Burga, Marin, and
Napout. S.S.I., App. at 170–227. This second superseding indictment contained
seven counts:
1. Count One charged Burga, Marin, and Napout with
racketeering conspiracy in violation of 18 U.S.C.
§ 1961(1) and (5).
2. Count Two charged Marin and Napout with
honest services wire fraud conspiracy arising out of the
Copa Libertadores tournament, in violation of
18 U.S.C. § 1349.
3. Count Three charged Marin and Napout with money
26
laundering conspiracy arising out of the Copa Libertadores
tournament, in violation of 18 U.S.C. § 1956(h).
4. Count Four charged Marin with honest services
wire fraud conspiracy arising out of the Copa do
Brasil tournament, in violation of 18 U.S.C. § 1349.
5. Count Five charged Marin with money laundering
conspiracy arising out of the Copa do Brasil tournament,
in violation of 18 U.S.C. § 1956(h).
6. Count Six charged Marin and Napout with honest services
wire fraud conspiracy arising out of the Copa América
tournament, in violation of 18 U.S.C. § 1349.
7. Count Seven charged Marin and Napout with money
laundering conspiracy arising out of the Copa América
tournament, in violation of 18 U.S.C. § 1956(h).
D. Trial
Napout, Marin, and Burga proceeded to trial before a partially anonymous
and sequestered jury 15 beginning on November 6, 2017. After six weeks of trial
and five days of deliberations, on December 22, 2017, the jury returned its verdict.
Burga was acquitted of the only count against him; Napout was convicted on the
racketeering conspiracy and wire fraud conspiracy counts but acquitted of the
15The jurors' names were made available to the parties and their attorneys but
were concealed from the public. The jurors were sequestered insofar as they were
escorted into and out of the courthouse by U.S. Marshals and were transported
from the courthouse to a central location each day before returning home. They
were also sequestered during breaks in the trial, including lunchtime.
27
money laundering conspiracy counts; and Marin was convicted on all counts
except for one count of money laundering conspiracy.
On August 22, 2018, the court sentenced Marin to 48 months' imprisonment
and two years' supervised release, and ordered him to pay a fine of $1.2 million
and approximately $3.34 million in forfeiture. On August 29, the court sentenced
Napout to 108 months' imprisonment and two years' supervised release; the court
also ordered Napout to pay a fine of $1 million and approximately $3.35 million
in forfeiture. Both Marin and Napout appeal.
DISCUSSION
A. Extraterritoriality
On appeal, the appellants principally contend that their convictions for
conspiracy to commit honest services wire fraud were based upon impermissible
extraterritorial applications of the wire fraud conspiracy statute. We review such
questions of statutory interpretation de novo. See, e.g., United States v. Epskamp, 832
F.3d 154, 160–62 (2d Cir. 2016).
As a general matter, statutes are presumed to "have only domestic
application." RJR Nabisco, Inc. v. European Cmty, 136 S. Ct. 2090, 2100 (2016) (citing
Morrison v. Nat'l Australia Bank Ltd., 561 U.S. 247, 255 (2010)). But a presumption
28
is no more than that. To analyze issues of extraterritoriality in light of this
presumption, we must apply a "two-step framework." Id. at 2101.
At step one, we ask "whether the presumption . . . has been rebutted" by the
statute in question, i.e., "whether the statute gives a clear, affirmative indication
that it applies extraterritorially." Id. With respect to the case at bar, we neither
have been pointed to, nor have we ourselves found, any such clear, affirmative
statutory indication of extraterritoriality with respect to the statute at issue here.
We therefore turn to step two of the inquiry to "determine whether the case
involves a domestic application of the statute." Id. We begin this process by
"looking to the statute's 'focus.'" Id. "The focus of a statute is 'the object of its
solicitude,' which can include the conduct it 'seeks to regulate,' as well as the
parties and interests it 'seeks to protect' or vindicate." WesternGeco LLC v. ION
Geophysical Corp., 138 S. Ct. 2129, 2137 (2018) (brackets omitted) (quoting Morrison,
561 U.S. at 267). "'If the conduct [at issue] relevant to the statute's focus occurred
in the United States, then the case involves a permissible domestic application' of
the statute, 'even if other conduct occurred abroad.' . . . But if the relevant conduct
occurred in another country, 'then the case involves an impermissible
29
extraterritorial application regardless of any other conduct that occurred in U.S.
territory.'" Id. (internal citation omitted) (quoting RJR Nabisco, 136 S. Ct. at 2101).
Appellants were convicted of conspiracy to commit honest services wire
fraud, not the substantive offense of wire fraud itself. A conviction for honest
services wire fraud conspiracy arises from the interaction of three statutes: wire
fraud, under 18 U.S.C. § 1343, augmented by the honest services fraud statute, 18
U.S.C. § 1346, and the wire fraud conspiracy statute, 18 U.S.C. § 1349. The relevant
portions of those statutes provide in full:
Whoever, having devised or intending to devise any scheme or
artifice to defraud, or for obtaining money or property by means of
false or fraudulent pretenses, representations, or promises, transmits
or causes to be transmitted by means of wire, radio, or television
communication in interstate or foreign commerce, any writings, signs,
signals, pictures, or sounds for the purpose of executing such scheme or
artifice, shall be fined under this title or imprisoned not more than 20
years, or both.
18 U.S.C. § 1343 (emphases added).
For the purposes of this chapter [in particular, for present purposes,
§ 1343], the term “scheme or artifice to defraud” includes a scheme or
artifice to deprive another of the intangible right of honest services.
18 U.S.C. § 1346.
Any person who attempts or conspires to commit any offense under
this chapter shall be subject to the same penalties as those prescribed
30
for the offense, the commission of which was the object of the attempt
or conspiracy.
18 U.S.C. § 1349.
"'[G]enerally, the extraterritorial reach of an ancillary offense [such as] . . .
conspiracy is coterminous with that of the underlying criminal statute.'" United
States v. Hoskins, 902 F.3d 69, 96 (2d Cir. 2018) (quoting United States v. Ali, 718 F.3d
929, 939 (D.C. Cir. 2013)). Neither the appellants nor the government dispute that
the statute underlying the appellants' honest services wire fraud conspiracy
convictions is the wire fraud statute, 18 U.S.C. § 1343. For the step-two analysis,
therefore, we must determine the focus of § 1343.
It is here that the parties join issue. In simplest terms, the appellants contend
that § 1343's focus is a "scheme . . . to defraud" and that their scheme was
principally foreign, while the government contends that the statute's focus is the
"use of the wires" within, from, or to the United States "in furtherance of a scheme
to defraud."
After briefing in this case was complete, we answered this question, albeit
in the context of civil RICO rather than criminal wire fraud. In Bascuñán v. Elsaca,
927 F.3d 108 (2d Cir. 2019), we made clear that the conduct regulated by § 1343 –
that is, the statute's "focus" – was "not merely a 'scheme to defraud,' but more
31
precisely the use of the . . . wires in furtherance of a scheme to defraud." Id. at 122
(emphasis in original). We also explained, however, that in order for incidental
domestic wire transmissions not to haul essentially foreign allegedly fraudulent
behavior into American courts, "the use of the . . . wires must be essential, rather
than merely incidental, to the scheme to defraud." Id. This ensures that the
domestic tail not wag, as it were, the foreign dog.
After this Court decided Bascuñán, the appellants filed a Rule 28(j) 16 letter
seeking to distinguish that case from this one. They contended that whatever the
general rule might be, in cases such as this one involving convictions for honest
services wire fraud, "the statute's focus for [the] extraterritoriality analysis" is not
the use of the wires but rather the "bad-faith breach of a fiduciary duty owed to
the scheme's victim." Appellants' Rule 28(j) Letter, October 18, 2019, at 1.
We disagree. The argument mischaracterizes the nature of honest services
wire fraud. It is not something different from wire fraud; it is a type of wire fraud
that is explicitly prohibited by that statute. The statute includes a provision
specific to honest services wire fraud not because it is in some essential aspect
16 Fed. R. Civ. P. 28(j) provides in relevant part: "If pertinent and significant
authorities come to a party's attention after the party's brief has been filed—or after
oral argument but before decision—a party may promptly [so] advise the circuit
clerk by letter, with a copy to all other parties, setting forth the citations."
32
different from other wire fraud, but to clarify the application of the law of wire
fraud to honest services fraud.
Federal courts began to recognize this theory of fraud based on private
employer-employee relationships in the 1940s. See Skilling v. United States, 561 U.S.
358, 400 (2010). "In perhaps the earliest application of the theory," id. at 401, a
district court in Massachusetts explained:
When one tampers with th[e] [employer-employee relationship] for the
purpose of causing the employee to breach his duty [to his employer]
he in effect is defrauding the employer of a lawful right. The actual
deception that is practised [sic] is in the continued representation of the
employee to the employer that he is honest and loyal to the employer's
interests.
United States v. Procter & Gamble Co., 47 F. Supp. 676, 678 (D. Mass. 1942).
Thereafter, "'an increasing number of courts' recognized that 'a recreant
employee' . . . . 'could be prosecuted . . . if he breached his allegiance to his
employer by accepting bribes or kickbacks in the course of his employment.'"
Skilling, 561 U.S. at 401 (brackets omitted) (quoting United States v. McNeive, 536
F.2d 1245, 1249 (8th Cir. 1976)). "[B]y 1982, all Courts of Appeals had embraced
the honest services theory of fraud. . . . " Id.
But then, "[i]n 1987," the Supreme Court "stopped the development of the
intangible-rights doctrine in its tracks" with its decision in McNally v. United States,
33
483 U.S. 350 (1987). Id. In McNally, the Court read the mail fraud statute (generally
parallel to the wire fraud statute for present purposes) "as limited in scope to the
protection of property rights." McNally, 483 U.S. at 360. "If Congress desires to go
further," the Court said, "it must speak more clearly." Id.
Congress did as it was bade; the following year, it enacted 18 U.S.C. § 1346,
a new "honest services statute" that provided: "For the purposes of th[e] chapter
[of the United States Code that prohibits, inter alia, mail fraud, § 1341, and wire
fraud, § 1343], the term 'scheme or artifice to defraud' includes a scheme or artifice
to deprive another of the intangible right of honest services.'" Skilling, 460 U.S. at
402 (brackets in original; emphasis added) (quoting 18 U.S.C. § 1346).
On this point, therefore, the law is clear: Honest services wire fraud is
"include[d]" as a type of wire fraud prohibited under § 1343. 18 U.S.C. § 1346. The
fact that the appellants were convicted of honest services wire fraud thus has no
bearing on our extraterritoriality analysis; it is § 1343, not § 1346, whose "focus" we
must "look to" in step two of the analysis. And for our answer we need look no
further than Bascuñán and the words of the statute itself: The focus of § 1343 is "the
use of the . . . wires in furtherance of a scheme to defraud." Bascuñán, 927 F.3d at 122
(emphasis in original).
34
We therefore must do here as RJR Nabisco requires: determine whether "the
conduct relevant to the statute's focus" – that is, the use of the wires in furtherance
of the schemes to defraud – "occurred in the United States." RJR Nabisco, 136 S. Ct.
at 2101. To affirm, we must also conclude that the "use of the . . . wires" was
"essential, rather than merely incidental, to [the appellants'] scheme to defraud."
Bascuñán, 927 F.3d at 122.
As to the first question, at trial, the government presented ample evidence
that the appellants had used American wire facilities and financial institutions to
carry out their fraudulent schemes. The government established, inter alia, that
Marin frequently received bribe payments from the sports media and marketing
companies in his "Firelli International Limited" account with Morgan Stanley bank
in New York. Marin also used a debit card connected with the "Firelli" account to
make purchases of, among other things, $50,000 of jewelry, and $10,000 of clothing
at stores in the United States. The government similarly established that Napout
was often bribed with American banknotes from U.S. bank accounts that had been
wired to a cambista (money changer) in Argentina, delivered to Full Play's safety
deposit box, and then given to Napout by hand. Napout was also bribed with
luxury items including, for example, concert tickets and the use of a vacation
35
house, which, wherever located, were paid for with money wired from a U.S. bank
account. These connections between the events in the United States and the wire
transactions at issue are roughly parallel to those alleged in the Bascuñán civil
complaint that survived a motion to dismiss. See Bascuñán, 927 F.3d at 112–15.
The same evidence provides the answer to the question as to the centrality
of the domestic use of wire transfers to the alleged foreign scheme. At the time of
their arrests in 2015, the appellants had each received approximately $3.3 million
in bribes; at least $2.4 million of Marin's payments had been sent to his New York
bank account, Test. of IRS Agent Berryman Trial Tr. at 3483–86, App. at 596–601,
while $2.5 million of Napout's $3.3 million had been paid in cash in U.S. dollars
generated by wire transfers originating in the United States, Peña Ledger, Gov't
App. at 400. The use of wires in the United States therefore was integral to the
transmission of the bribes in issue to the appellants. It was in return for the bribes
that Marin and Napout (and their co-conspirators) gave the sports media and
marketing companies exclusive rights to various CONMEBOL tournaments under
their control. The transmission, then, was central to the alleged schemes. And
U.S. wires provided a — or the — key means of paying those bribes. In other
36
words, in the relatively straightforward quid pro quo transactions underlying these
schemes, the quid was provided through the use of U.S. wires.
B. Vagueness
The appellants next contend that § 1346 is unconstitutionally vague as
applied to them.
"The void-for-vagueness doctrine requires that a penal statute define the
criminal offense with sufficient definiteness that ordinary people can understand
what conduct is prohibited and in a manner that does not encourage arbitrary and
discriminatory enforcement." United States v. Halloran, 821 F.3d 321, 337–38 (2d
Cir. 2016) (quoting United States v. Rosen, 716 F.3d 691, 699 (2d Cir. 2013) (internal
quotation marks omitted)). "The doctrine addresses concerns about (1) fair notice
and (2) arbitrary and discriminatory prosecutions." Id. at 338 (quoting Rosen, 716
F.3d at 699 (internal quotation marks omitted)). "Under the 'fair notice' prong, a
court must determine 'whether the statute, either standing alone or as construed,
made it reasonably clear at the relevant time that the defendant's conduct was
criminal.’" Id. (quoting Rosen, 716 F.3d at 699 (internal quotation marks omitted)).
Recognizing that a "violation of a fiduciary duty," is an "element of honest
services fraud," Id. at 337, the appellants contend, in essence, that § 1346 did not
37
provide them with "fair notice" that the fiduciary duty they, as foreign employees,
owed to their foreign employers, FIFA and CONMEBOL, could qualify as a "source
of the fiduciary obligation," Skilling, 561 U.S. at 417 (Scalia, J., concurring in the
judgment), whose breach, if committed by a fraudulent scheme using American
wires, would constitute honest services wire fraud.
Before reaching the merits of the appellants' argument, we must consider
what standard of review to apply. The parties dispute this point. The appellants
allege that Napout twice raised this vagueness challenge to the district court, and
thus urge us to review their argument de novo. The government asserts to the
contrary that Napout did not raise his vagueness challenge in the district court,
and contends that we must review the argument for plain error. We agree with
the government. 17
Napout alleges that he first raised the vagueness argument in the
memorandum of law he filed in support of his pretrial "motion to dismiss all
charges for lack of extraterritorial jurisdiction." App. at 158–69. In the relevant
portion of that memorandum, Napout argued that "the allegations against [him]
fall squarely within the presumption against extraterritoriality and thus, fail to
17The parties appear to agree that Marin did not raise the vagueness issue before
the district court.
38
satisfy the first step in the RJR Nabisco analysis." App. at 160. This argument was
not a vagueness challenge; it was an argument against the extraterritorial
application of the wire fraud statute.
Second, Napout asserts that he raised a vagueness challenge in the
memorandum he filed in support of his motion for acquittal pursuant to Federal
Rule of Criminal Procedure 29(a). It is true, that in that memorandum, Napout
quoted several judicial opinions, including Justice Scalia's concurrence in Skilling,
that discuss the issue of vagueness as it pertains to the source of the fiduciary
obligation under § 1346. For example, the memorandum notes that in United States
v. Smith, 985 F. Supp. 2d 547 (S.D.N.Y. 2014), a judge of the Southern District of
New York remarked on the "difficulty" that "inheres in any attempt to describe in
the abstract the 'fiduciary duty' the violation of which all honest services-wire-
fraud prosecutions might require." Id. at 592. Yet, the memorandum raised
nothing that can be understood as a vagueness challenge to Napout's conviction.
Instead, it made only one argument: that because the bribes Napout received were
"euphemistically" considered to be a permissible form of "personal payments" in
the South American countries in which he lived and worked, his acceptance of
such bribes did not "result[] in any identifiable harm to FIFA," and thus did not
39
"deprive FIFA of [Napout's] honest services." App. at 651–52. In other words, as
the memorandum states in a footnote, the district court should have "allow[ed]
[Napout] to prove to the jury that commercial bribery is not a crime in either
Argentina or Paraguay, such that a reasonable person in [his] position would not
believe that a technical violation of [FIFA's] codes constituted a breach of any duty
owed to the organization." App. at 652 n.1. And while, in another footnote, the
memorandum points out that “due process concerns may well arise if, for example
‘a situation arose in which a defendant was charged with honest-services wire
fraud, and the fiduciary duty that the defendant allegedly breached existed under
federal law, but not under state law, or vice versa,’” App. at 656 n.6 (quoting Smith,
985 F. Supp. 2d at 598), the memorandum does not argue that such concerns exist
in this case.
Thus, while these statements may use language similar to what might have
been employed in a vagueness challenge — that is, language concerning what a
"reasonable person" would have "believed" about the statute — they can only be
understood, we think, as part of the memorandum's sole argument that Napout's
acquittal was mandated by the government's failure to show that his receiving
bribes breached his fiduciary duty to FIFA. Because this argument is not a
40
vagueness challenge, and because it is the only argument Napout made in
connection with his Rule 29(a) motion, we conclude that Napout did not raise his
vagueness challenge in his Rule 29(a) motion, that he therefore did not raise the
challenge before the district court, and that we therefore must review his argument
on appeal for plain error. 18
Under plain error review, an appellant must demonstrate that "(1) there is
an error; (2) the error is clear or obvious, rather than subject to reasonable dispute;
(3) the error affected the appellant's substantial rights, which in the ordinary case
means it affected the outcome of the district court proceedings; and (4) the error
seriously affects the fairness, integrity or public reputation of judicial
proceedings." United States v. Marcus, 560 U.S. 258, 262 (2010) (brackets and
internal quotation marks omitted). "[R]eversal for plain error should 'be used
sparingly, solely in those circumstances in which a miscarriage of justice would
18To be sure, as the appellants remind us, "appeals courts may entertain additional
support that a party provides for a proposition presented below.” Eastman Kodak
Co. v. STWB, Inc., 452 F.3d 215, 221 (2d Cir. 2006) (citing Yee v. City of Escondido,
503 U.S. 519, 534 (1992) ('Once a federal claim is properly presented, a party can
make any argument in support of that claim; parties are not limited to the precise
arguments they made below.')). That is not, however, what they attempt to do
here.
41
otherwise result.'" United States v. Villafuerte, 502 F.3d 204, 209 (2d Cir. 2007)
(quoting United States v. Frady, 456 U.S. 152, 163 n.14 (1982)).
Our decision here is determined by application of plain error's second
requirement: that "[f]or an error to be plain, it must, at a minimum, be clear under
current law," which means that "[w]e typically will not find such error where the
operative legal question is unsettled, including where there is no binding
precedent from the Supreme Court or this Court." United States v. Whab, 355 F.3d
155, 158 (2d Cir. 2004) (internal quotation marks omitted).
There are undoubtedly "lingering ambiguities in § 1346," Halloran, 821 F.3d
at 337 (discussing Skilling, 561 U.S. at 417 (Scalia, J., concurring in the judgment)),
including questions as to what may serve as "the source of the fiduciary obligation"
that can sustain a conviction under the statute. Skilling, 561 U.S. at 417 (Scalia, J.,
concurring in the judgment) (emphasis in original). As we have noted, the statute
"provides no textual guidance about the duties whose violation will amount to a
deprivation of 'honest services,'" United States v. Coppola, 671 F.3d 220, 235 (2d Cir.
2012), an issue that caused Justice Scalia in Skilling — and courts since — to wonder
whether, to be actionable under § 1346, a fiduciary duty "must" arise from "positive
state or federal law," or whether "merely general principles, such as the obligations
42
of loyalty and fidelity that inhere in the employment relationship" can suffice,
Skilling, 561 U.S. at 417 (Scalia, J., concurring in the judgment). Taking those
concerns and running with them, the appellants argue that even assuming that
they owed a fiduciary duty to FIFA and CONMEBOL under the organizations'
codes of ethics, any such duty – that is, a fiduciary duty a foreign employee owes
to his foreign employer through the nature of their private employment
relationship rather than a duty arising from specific law – cannot form the basis of
an honest services conviction.
Although not necessarily dispositive of the appellants' argument, our
decision in United States v. Rybicki, 354 F.3d 124 (2d Cir. 2003) (en banc), provides
possible guidance. There, three attorneys who had been convicted of honest
services wire fraud raised an as-applied vagueness challenge to § 1346 that focused
on the limits of the conduct the statute may penalize; they alleged that the statute
did not clearly prohibit their having "arranged for secret gratuities to be paid to
claims adjusters employed by insurance companies against whom [their] clients
asserted claims." Id. at 127. Although we focused primarily on the issue of what
conduct falls within the scope of § 1346, we also addressed the question of from
what source a fiduciary duty underlying guilt under § 1346 may arise. We
43
concluded that the theory of honest services wire fraud applies to "an officer or
employee of a private entity" or "a person in a relationship that gives rise to a duty
of loyalty comparable to that owed by employees to employers. . . ." Id. at 141-42;
see also id. at 142, n.17.
Other courts have gone further. In United States v. Milovanovic, 678 F.3d 713
(9th Cir. 2012) (en banc), a case closer to the one at bar than Rybicki, an en banc
Ninth Circuit, citing Rybicki, held "that a fiduciary duty for the purposes of the
Mail Fraud Statute [again parallel for present purposes to § 1346 applicable to wire
fraud] is not limited to a formal 'fiduciary' relationship well-known in the law, but
also extends to a trusting relationship in which one party acts for the benefit of
another and induces the trusting party to relax the care and vigilance which it
would ordinarily exercise." Id. at 724.
The appellants have pointed us to no authority directly supporting their
position, nor have we found any ourselves, other than two pre-Skilling district
court cases which they acknowledge are "not . . . directly analogous to this case,"
Napout Br. at 42, that suggests that the duty they owed to FIFA and CONMEBOL
falls beyond the scope of § 1346. Rather, whether a foreign employee's duty to his
foreign employer qualifies as an actionable element under § 1346 is a question that
44
remains unsettled, at best. Thus, because it is not "clear under current law," Whab,
355 F.3d at 158, that § 1346 is unconstitutionally vague as applied to the appellants,
the district court did not commit plain error in concluding that it is not. 19
C. Sufficiency of the Evidence
Next, the appellants raise an argument similar to the one made by Napout
in his Rule 29(a) motion in the district court: They challenge the sufficiency of the
evidence against them by alleging that the government "failed to adduce any
evidence that" they owed a fiduciary duty to their employer (both CONMEBOL
and FIFA) under the laws of Paraguay, the country where CONMEBOL is
headquartered. Napout Br. at 5.
Although we review a challenge to the sufficiency of the evidence de novo,
United States v. Khalil, 857 F.3d 137, 139 (2d Cir. 2017), the challenger "bears a heavy
burden," United States v. Coplan, 703 F.3d 46, 62 (2d Cir. 2012) (quoting United States
v. Heras, 609 F.3d 101, 105 (2d Cir. 2010)), and our review is "exceedingly
deferential," id (quoting United States v. Hassan, 578 F.3d 108, 126 (2d Cir. 2008)).
19The filing of the concurrence should not be construed as disagreement by the
other panel members with the analysis contained therein, but rather reflects their
view that the issue need not be addressed under the plain error review in which
we engage.
45
The appellants' sufficiency argument miscasts the fiduciary duty they were
convicted of breaching. The appellants were not prosecuted for breaching a
fiduciary duty created by Paraguayan law— or Brazilian, Swiss or U.S. law, for
that matter. The government alleged, and the jury found, that the appellants'
conduct of accepting bribes had violated the fiduciary duty they owed to FIFA and
CONMEBOL under the organizations' codes of ethics. In other words, the
"fiduciary duty" — the legal obligation to provide "honest services" — that the
appellants owed to their employer, the breach of which, accomplished by wire
fraud, was the crime for which they were convicted, arose from their acceding to
FIFA and CONMEBOL's rules, not the provision of the law of any state or country.
And the government's evidence was easily sufficient to prove that FIFA and
CONMEBOL's respective codes of ethics expressly provided that persons bound
by those codes, including, inter alia, that "all" soccer "officials," such as Marin and
Napout, had "a fiduciary duty to FIFA [and] the confederations [such as
CONMEBOL]," and were required to "act with absolute loyalty" to them. App. at
1056, 1105. Accordingly, "the 'existence of a fiduciary relationship' between [the]
employee[s] and [their] employer [was] 'beyond dispute.'" United States v. Nouri,
711 F.3d 129, 137 n.1 (2d Cir. 2013) (quoting Skilling, 561 U.S. at 406–07 n.41).
46
D. Evidentiary Decisions
1. Foreign Law Evidence
The appellants next take issue with two of the district court's evidentiary
decisions concerning foreign law.
First, they contend that the court violated Federal Rule of Evidence 403 by
precluding them from introducing evidence or questioning witnesses about
whether commercial bribery is lawful in Brazil and Paraguay.
"[S]o long as the district court has conscientiously balanced the proffered
evidence's probative value with the risk for prejudice, its conclusion [to preclude
evidence pursuant to Federal Rule of Evidence 403] will be disturbed only if it is
arbitrary or irrational." United States v. Awadallah, 436 F.3d 125, 131 (2d Cir. 2006).
Thus, even if erroneous, a court's decision to preclude evidence under Rule 403
warrants reversal only if it "had a substantial and injurious effect or influence on
the jury's verdict." United States v. Spoor, 904 F.3d 141, 153 (2d Cir. 2018) (internal
quotation marks omitted).
In particular, the appellants argue — as they did to the district court — that
they should have been permitted to introduce evidence that commercial bribery
was legal in their home countries because that fact, in their view, reveals that they
47
lacked the fraudulent intent (or bad faith) necessary to have committed honest
services wire fraud.
The district court considered this evidence and conducted the
"conscientious balancing" called for by Awadallah. At the outset of its analysis, the
court noted that whether the appellants had acted in bad faith turned not on
whether they had acted with the intent to violate the laws of their home countries,
but whether they had understood that their accepting bribes violated their duties
to FIFA and CONMEBOL under the organizations' codes of ethics. Thus, evidence
that commercial bribery was permitted under the laws of Brazil or Paraguay
would be relevant to the question of the appellants' intent only if the jury could
infer that: (1) the laws of the appellants' home countries permitted commercial
bribery and the appellants "knew or believed" that to be so; and (2) the appellants
"believed that their duties to FIFA and [CONMEBOL] were identical to their
obligations under th[ose] foreign law[s]." United States v. Webb et al., No.15-cr-
00252 (E.D.N.Y. Dec. 12, 2017), Mem. & Order Regarding Motion in Limine, ECF
No. 853 at 24, Special App. at 57. Because the appellants had not "articulated any
reason to believe, let alone proffered any evidence, that they construed their duties
to FIFA or [CONMEBOL] based on their understanding of their own countries'
48
criminal laws," the court determined that the second necessary inference was "so
attenuated that it border[ed] on speculation" and thus that the evidence of foreign
law proffered by the appellants carried "extremely low probative value." Id. at 25,
Special App. at 58.
The district court concluded, moreover, that introduction of the foreign law
evidence by the defendants presented "an obvious risk of jury nullification" in light
of the "substantial risk that the jury would improperly acquit [the appellants] if it
believed that commercial bribery did not violate the laws of [their] home
countries." Id. In other words, allowing the jury to focus on the legality of the
appellants' conduct in Brazil or Paraguay would risk the jury's ignoring the
question it needed to answer to determine their guilt or innocence: whether their
accepting bribes had violated FIFA and CONMEBOL's codes of ethics, and thus
had deprived those organizations of their honest services in violation of U.S. law.
In sum, the district court decided, "the risk of prejudice and juror confusion
substantially outweigh[ed] any probative value there may be to" allowing the
appellants to introduce this foreign law evidence. Id. at 26, Special App. at 59.
The district court's conclusion in this regard was hardly "arbitrary or
irrational." Awadallah, 436 F.3d at 131. Indeed, particularly in light of the at-
49
best-tangential nature of the relationship between the law of commercial bribery
in Brazil and Paraguay and the U.S. law of conspiracy to commit wire fraud for
the alleged violation of which the appellants were on trial, we do not think that
the district court erred.
The appellants offer two other arguments that this conclusion was "arbitrary
or irrational." First, they attempt to draw a parallel between their proffered foreign
law evidence and the testimony of Stephanie Maennl, a government witness and
FIFA lawyer whom the district court allowed to testify about FIFA's code of ethics.
Marin Br. at 14–16. They argue that the relevance of Maennl's testimony, like the
relevance of their foreign law evidence, required the jury to make a series of
unwarranted inferential leaps. Not so: Maennl's testimony required the jury to
draw only a single – and indeed modest –inference, that the appellants were aware
of their obligations under the code of ethics she was describing, instead of the two
inferences that were required to make the appellants' evidence probative. The
appellants point to United States v. Brandt, 196 F.2d 653 (2d Cir. 1952), for the
proposition that in a prosecution for wire fraud, "since [good faith, or the lack
thereof] may be only inferentially proven, . . . no events or actions which bear even
remotely on its probability should be withdrawn from the jury unless the
50
tangential and confusing elements interjected by such evidence clearly outweigh
any relevancy it might have." Id. at 657. That instruction, however, calls for
precisely the analysis that the district court performed here: As the court in
substance concluded, whatever minor probative value the appellants' foreign law
evidence may have had, it was "substantially outweigh[ed]" by the risk that its
introduction would cause the jury to be confused or inclined to vote not guilty
simply because the appellants' conduct was not illegal in their home countries.
United States v. Webb et al., No. 15-cr-00252 (E.D.N.Y. Dec. 12, 2017), Mem. & Order
Regarding Motion in Limine, ECF No. 853 at 26, Special App. at 59.
For their second argument, Marin Br. at 26–29, the appellants attack what
the district court described as a "caveat" to its ruling. Id. The court acknowledged
that its justification for excluding the foreign-law evidence — i.e., that it would
require the jury to make two significant inferential steps — did not justify
preventing the appellants from testifying that they themselves "relied on [their]
belief or understanding of [their] own country's laws to determine [their]
obligations to FIFA or [CONMEBOL]." Id. That testimony, the court concluded,
would "bridge the gap between the [appellants'] belief[s] about foreign law . . . and
[their] belief[s] about [their] duties to FIFA or [CONMEBOL]" and thus "would not
51
suffer from the same infirmity of attenuation . . . that render[ed] the other
proffered evidence . . . inadmissible." Id. at 26–27, Special App. at 59–60.
The appellants insist that this ruling forced them "to choose, without good
reason, between [their] Fifth Amendment right not to testify and [their] Sixth
Amendment right to present a complete defense." Napout Br. at 56.
"The criminal process," however, "is replete with situations requiring the
making of difficult judgments as to which course to follow." Corbitt v. New Jersey,
439 U.S. 212, 218 n.8 (1978) (internal quotation marks omitted). Therefore, even
when a defendant has a "right . . . of constitutional dimension . . . to follow
whichever course he chooses, the Constitution does not by that token always
forbid requiring him to choose." Id. (internal quotation marks omitted). Under
these circumstances, because the foreign law evidence was probative only as it
pertained to the appellants' understanding of their obligations to FIFA and
CONMEBOL, and because only the appellants themselves could testify as to that
understanding, the district court's ruling, although it forced the appellants to make
a potentially difficult choice, did not run afoul of the Constitution.
2. Expert Testimony
52
The appellants also argue that the district court erred by allowing the
government's expert witness, Professor Stefan Szymanski, to testify about the
economic impact that officials accepting bribes would have on soccer
organizations such as FIFA and CONMEBOL. This testimony, they contend, was
unreliable and inadmissible because Szymanski had not performed "any . . .
empirical study of the evidence in this case." Marin Br. at 42.
"The admissibility of expert testimony in the federal courts is governed
principally by Rule 702 of the Federal Rules of Evidence." Nimely v. City of New
York, 414 F.3d 381, 395 (2d Cir. 2005). We review a district court's decision to admit
expert testimony under Federal Rule of Evidence 702 for abuse of discretion. Id.
at 393.
Rule 702 allows a witness to testify as an expert if his or her "specialized
knowledge will help the trier of fact to understand the evidence or to determine a
fact in issue"; the "testimony is based on sufficient facts or data" and "is the product
of reliable principles and methods"; and the witness "has reliably applied the
principles and methods to the facts of the case." Fed. R. Evid. 702. "It is a well-
accepted principle that Rule 702 embodies a liberal standard of admissibility for
expert opinions[.]" Nimely, 414 F.3d at 395. In considering whether to admit expert
53
testimony under Rule 702, a district court serves a "gatekeeping role" by "ensuring
that an expert's testimony both rests on a reliable foundation and is relevant to the
task at hand." Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 597 (1993).
Szymanski, a professor of sports management at the University of Michigan,
conducts research on the economics and business of sports. Before trial, the
appellants moved to preclude Szymanski from testifying on the grounds that he
had not performed "empirical analysis of actual data relating to FIFA." App. at
328. In denying the motion, the district court determined that any empirical basis,
or lack thereof, would go to the weight of Szymanksi's testimony, not its
admissibility.
On cross-examination, defense counsel asked Syzmanski to confirm that he
had not "actually review[ed] any empirical data . . . of the actual prices or revenues
that were generated by the media or marketing contracts involved in this case."
App. at 393–400. Syzmanski agreed, stating that he had not analyzed the "specific
financial information . . . of CONMEBOL regarding the sale of contracts" because
it "was not available" and he "did not have access to it." Id. at 395.
On appeal, the appellants essentially raise the same argument they made to
the district court: that Szymanski's testimony, which was "not based on any actual
54
data or empirical analysis," was so unreliable as to be inadmissible. Marin Br. at
44. Moreover, they allege that allowing Syzmanski to testify ran afoul of United
States v. Tin Yat Chin, 371 F.3d 31, 40–41 (2d Cir. 2004), where we upheld a district
court's decision to exclude expert testimony it viewed as insufficiently supported
by data or facts. Tin Yat Chin, however, does not stand for the principle that a
court must always exclude expert testimony that is less than perfectly supported
by data. See id. at 41 (declining to impose a standard that requires exclusion of
certain expert testimony). It serves only to confirm that a district court has "broad
discretion" to decide "how to determine reliability" of proposed expert testimony
and to reach an "ultimate conclusion" with respect to admissibility. Restivo v.
Hessemann, 846 F.3d 547, 575 (2d Cir. 2017) (quoting Amorgianos v. Nat'l R.R.
Passenger Corp., 303 F.3d 256, 265 (2d Cir. 2002)).
We have recently observed along these lines that while a "trial judge should
exclude expert testimony if it is speculative or conjectural or based on assumptions
that are so unrealistic and contradictory as to suggest bad faith or to be in essence
an apples and oranges comparison . . . other contentions that [an expert's]
assumptions are unfounded go to the weight, not the admissibility, of the
testimony." Restivo, 846 F.3d at 577 (internal quotation marks and citation
55
omitted). In the circumstances of this case, therefore, we cannot conclude that the
district court abused its discretion by deciding that Szymanski's lack of familiarity
with the facts underlying this case went to the weight and not the admissibility of
his testimony.
E. Partial Sequestration of Jury
Finally, the appellants argue that the district court deprived them of their
Fifth and Sixth Amendment rights to a fair and impartial jury by granting the
government's motion for a partially anonymous and semi-sequestered jury.
"If a district court has taken reasonable precautions to protect a defendant's
fundamental rights, we review its decision to empanel an anonymous jury for
abuse of discretion." United States v. Kadir, 718 F.3d 115, 120 (2d Cir. 2013) (citing
United States v. Thai, 29 F.3d 785, 801 (2d Cir. 1994)). A district court minimizes
the prejudicial effects of an anonymous jury on the defendant by "giving the jurors
'a plausible and nonprejudicial reason for not disclosing their identities'" and by
conducting a "voir dire designed to uncover bias." Id. (quoting Thai, 29 F.3d at 801).
"[W]hen genuinely called for and when properly used, anonymous juries do not
infringe a defendant's constitutional rights." United States v. Pica, 692 F.3d 79, 88
(2d Cir. 2012) (quoting Thai, 29 F.3d at 800). After "taking reasonable precautions
56
to minimize any prejudicial effects on the defendant and to ensure that his
fundamental rights are protected," "[a] district court may order the empaneling of
an anonymous jury 'upon . . . concluding that there is strong reason to believe the
jury needs protection.'" Kadir, 718 F.3d at 120 (quoting Pica, 692 F.3d at 88).
Most importantly, the district court protected the appellants’ fundamental
rights by ensuring that the jury was not anonymous with respect to any of the
parties. While the jurors' identities were kept from the public, the appellants and
their counsel (and the government, too) were provided with the names of the
prospective jurors during jury selection and were free to investigate any of them
for potential bias. Moreover, the court employed a jury questionnaire and
permitted all parties to review the prospective jurors' answers and move to strike
jurors for cause. Similarly, the court allowed the parties to conduct extensive voir
dire before submitting their peremptory challenges. And the court instructed the
empaneled jurors that the measures of partial sequestration (being transported to
and from the courthouse by U.S. Marshals and being required to remain in the jury
room or behind the courtroom during breaks) were "not unusual" and were "being
taken to ensure [their] privacy and impartiality in light of the media and public
attention this trial is likely to receive." App. at 378–79.
57
The district court's conclusion that there was strong reason for the jury to be
kept anonymous and sequestered from the public fell well within its discretion.
For one thing, as the appellants acknowledge, this case prompted a significant
amount of media attention across the world, including reporting that revealed
personal information about potential witnesses. In a sealed filing, the government
also proffered evidence suggesting a possibility that jurors might face safety
concerns if their names were revealed to the public, including evidence that
potential witnesses in the case had already been subjected to severely intimidating
behavior.
The appellants do not challenge any of the evidence cited by the district
court in this regard. Instead, they rely on two opinions from the Southern District
of New York to argue that the district court's conclusion was incorrect as a matter
of law.
First, the appellants assert that a court's concern about media attention,
"without more," is "insufficient to justify the impact on a defendant's trial that
empaneling an anonymous jury may have." United States v. Mostafa, 7 F. Supp. 3d
334, 336 (S.D.N.Y. 2014) (citing United States v. Vario, 943 F.2d 236, 241 (2d Cir.
1991)). Even were Mostafa precedential for these purposes, however, it is
58
inapposite. The district court's decision here relied on legitimate considerations of
juror safety in addition to its concerns about media attention that did not exist in
that case.
Second, the appellants argue that the government could not make a
"satisfactory showing of a reasonable likelihood of juror intimidation," because
"[t]here [was] no evidence that [the appellants] either participated in or directed
efforts to . . . intimidate witnesses." United States v. Gambino, 818 F. Supp. 536, 540
(S.D.N.Y. 1993). Our caselaw does not, however, require a court to find that a
defendant personally intimidated or attempted to intimidate witnesses or others
associated with the trial in order to empanel an anonymous jury. In United States
v. Aulicino, 44 F.3d 1102 (2d. Cir. 1995), for example, we concluded that the district
court did not err in empaneling an anonymous jury based on "evidence of
potential jury tampering by [the defendant's] coconspirators . . . even in the
absence of evidence that [the defendant] in particular had sought to obstruct
justice." Id. at 1117. In a more recent summary order, we affirmed the empaneling
of an anonymous jury based on "threats made to cooperating witnesses by other
participants in the" defendant's conspiracy. United States v. Vendetta, 83 F. App'x
394, 400 (2d Cir. 2003) (summary order), vacated on other grounds by Vondette v.
59
United States, 543 U.S. 1108 (2005)). The court's finding, therefore, that the "threats
and violence" faced by the potential witnesses "ha[d] a clear connection and [were]
directed to preventing the investigation and/or prosecution of one of the crimes
for which the defendants [were] on trial" adequately justified its decision to
partially anonymize and sequester the jury. Sealed App. at 20.
CONCLUSION
For the reasons set forth above, we conclude that the appellants' convictions
rest upon permissible domestic applications of the wire fraud statute, 18 U.S.C. §
1343. In addition, we cannot conclude in light of case law binding on us that the
district court committed plain error with respect to the issue of whether the honest
services wire fraud statute, 18 U.S.C. § 1346, is unconstitutionally vague as applied
to the appellants. We also conclude that the evidence presented at trial was
sufficient to affirm the district court's judgment of conviction; and that the
challenged evidentiary rulings of the district court were not error. We have
considered the remainder of the appellants' arguments on appeal and conclude
that they are without merit. We therefore AFFIRM the judgments of the district
court.
60
HALL, Circuit Judge, concurring:
I fully concur with Judge Sack’s opinion. I write separately to
add that even if the Defendants-Appellants had argued below that
honest services wire-fraud is unconstitutionally vague because the
statute, 18 U.S.C. § 1346, does not define the scope of the fiduciary duty
required to prove the element of “honest services,” see Slip Op. at 38-
45, I would affirm their convictions.
As the opinion notes, “perhaps the earliest application” of an
honest services fraud theory in a criminal case occurred in 1940, in
United States v. Procter & Gamble Co., 47 F. Supp. 676 (D. Mass. 1942).
Slip Op. at 33 (quoting Skilling v. United States, 561 U.S. 358, 401 (2010)).
In Procter & Gamble, the district court observed that “[t]he normal
relationship of employer and employee implies that the employee will
be loyal and honest in all his actions with or on behalf of his employer,
and that he will not wrongfully divulge to others the confidential
information, trade secrets, etc., belonging to his employer.”
47 F. Supp. at 678. Although McNally v. United States, 483 U.S. 350
(1987), limited the government’s ability to pursue honest services
fraud cases, see Slip Op. at 34, the near immediate adoption of § 1346
after that decision has led this court to look back at pre-McNally case
law to determine the scope of that section. See, e.g., United States v.
Rybicki, 354 F.3d 124, 144-45 (2d Cir. 2003) (en banc). Prior to McNally,
courts considered the combination of two factors—(a) the fiduciary
duty inherent in an employer-employee relationship and (b) the
acceptance of bribes or kickbacks in breach of that duty—to be
sufficient to convict an individual of mail fraud. See Skilling, 561 U.S.
at 401 (citing United States v. McNeive, 536 F.2d 1245, 1249 (8th Cir.
1976)). Thus, were we deciding the issue here, I would hold that § 1346
encompasses the duty that existed between the Defendants-
Appellants and their employers, FIFA and CONMEBOL.
Although there has been some discussion of whether the source
of the fiduciary duty required to be proven in an honest services
2
wire-fraud prosecution must arise from “positive state or federal law,”
Slip Op. at 43 (quoting Skilling, 561 U.S. at 417 (Scalia, J., concurring)),
there was no such requirement in our pre-McNally understanding of
the mail fraud statute. In United States v. Von Barta, 635 F.2d 999 (2d
Cir. 1980), affirming a conviction of mail fraud and discussing the
development of honest services fraud, we noted explicitly:
Our discussion is not to be construed as holding that an
employee’s duty to disclose material information to his
employer must be imposed by state or federal statute.
Indeed, the employment relationship, by itself, may
oblige an employee not to conceal, and in fact to reveal,
information he has reason to believe is material to the
conduct of his employer’s business.
Von Barta, 635 F.2d at 1007; see also United States v. Bronston, 658 F.2d
920, 926 (2d Cir. 1981). This understanding of the fiduciary duty
requirement, moreover, was not limited to our Circuit. See United
States v. Bush, 522 F.2d 641, 651-52 (7th Cir. 1975) (holding that a
defendant’s “duty to disclose need not be based upon the existence of
some statute prescribing such a duty”); United States v. Brown, 540 F.2d
3
364, 374-75 (8th Cir. 1976) (same); see also United States v. Bohonus, 628
F.2d 1167, 1172 (9th Cir. 1980) (concluding “that depriving an
employer of one’s honest services and of its right to have its business
conducted honestly can constitute a ‘scheme to defraud’”). In sum,
when the government proves that a defendant-employee has
concealed information that is material to the conduct of his employer’s
business, it has proven the defendant has breached a fiduciary duty to
his employer and has thus deprived the employer of his honest
services. See also Rybicki, 354 F.3d at 141-42, 142 n.17; United States v.
Milovanovic, 678 F.3d 713, 724 (9th Cir. 2012) (en banc); United States v.
Bryza, 522 F.2d 414, 422 (7th Cir. 1975).
Defendants-Appellants’ argument that the statute does not
apply to foreign employment relationships fares no better under our
more recent precedent. “At the heart of the fiduciary relationship lies
reliance, and de facto control and dominance.” United States v.
Halloran, 821 F.3d 321, 338 (2d Cir. 2016) (alternation, quotation, and
4
citation omitted). These characteristics are obviously inherent in
employer-employee relationships—including the relationships in this
case. Had the argument been properly raised below, I would hold that
a cognizable fiduciary duty exists here.
Defendants-Appellants, by virtue of their relationship with
FIFA and CONMEBOL, had a fiduciary duty not to accept bribes or
kickbacks, a duty that was explicitly laid out by the two associations’
respective codes of conduct. Because, in my view, the element of
honest services in § 1346 encompasses “the obligations of loyalty and
fidelity that inhere in the employment relationship,” Skilling, 561 U.S.
at 417 (Scalia, J., concurring), it follows that the statute is not
unconstitutionally vague as applied to Defendants-Appellants.
5