United States v. Kaufman

21-2589
United States v. Kaufman
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT.
CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS
PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE
32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER
IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE
FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION
“SUMMARY ORDER”). A PARTY CITING TO A SUMMARY ORDER MUST SERVE A
COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit,
held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the
City of New York, on the 10th day of February, two thousand twenty-three.
PRESENT:
RICHARD J. SULLIVAN,
JOSEPH F. BIANCO,
MYRNA PÉREZ,
Circuit Judges.
_____________________________________
UNITED STATES OF AMERICA,
Appellee,
v. No. 21-2589
ALAN KAUFMAN,
Defendant-Appellant. *
_____________________________________
* The Clerk of Court is respectfully directed to amend the official case caption as set forth above.
For Defendant-Appellant: NELSON A. BOXER (Christina Karam,
Paul-Gabriel D. Morales, on the brief),
Petrillo Klein & Boxer LLP, New York,
NY.
For Appellee: DINA MCLEOD (Nicholas W.
Chiuchiolo, Michael C. McGinnis,
David Abramowicz, on the brief),
Assistant United States Attorneys, for
Damian Williams, United States
Attorney for the Southern District of
New York, New York, NY.
Appeal from a judgment of the United States District Court for the Southern
District of New York (Lewis A. Kaplan, Judge).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,
ADJUDGED, AND DECREED that the judgment of the district court is
AFFIRMED.
Alan Kaufman appeals following a jury trial in which he was found guilty
of two counts of corruptly accepting gratuities as an officer of a financial
institution, in violation of 18 U.S.C. § 215 (Counts Two and Four). The district
court thereafter sentenced Kaufman to a term of forty-six months’ imprisonment,
to be followed by two years’ supervised release. The district court also ordered
Kaufman to forfeit specific property and to pay $2 million in restitution, a $30,000
2
fine, and a $200 mandatory special assessment. On appeal, Kaufman raises a litany
of challenges to his conviction, sentence, and fine, and to the forfeiture and
restitution orders, which we address in turn. We assume the parties’ familiarity
with the underlying facts, procedural history, and issues on appeal.
I. Count Two
With respect to Count Two of the indictment, Kaufman attacks his
conviction on three grounds, each of which we reject.
A. Venue
First, Kaufman argues that the trial evidence was insufficient to establish
venue, by a preponderance of the evidence, in the Southern District of New York.
We review sufficiency-of-the-evidence challenges as to venue de novo. United
States v. Geibel, 369 F.3d 682, 695–96 (2d Cir. 2004). A defendant challenging the
sufficiency of the evidence nonetheless “bears a heavy burden, because the
reviewing court is required to draw all permissible inferences in favor of the
government and resolve all issues of credibility in favor of the jury verdict.” United
States v. Kozeny, 667 F.3d 122, 139 (2d Cir. 2011). Although 18 U.S.C. § 215 does not
expressly specify where venue lies, we have held that “[w]hen a federal statute
defining an offense does not [so] specify,” venue is proper in the district “where
3
the acts constituting the offense – the crime’s ‘essential conduct elements’ – took
place.” United States v. Tzolov, 642 F.3d 314, 318 (2d Cir. 2011) (quoting United
States v. Rodriguez-Moreno, 526 U.S. 275, 280 (1999)). For an offense committed in
more than one district, venue is proper “in any district in which such offense was
begun, continued, or completed.” 18 U.S.C. § 3237(a); see also United States v.
Stephenson, 895 F.2d 867, 874–75 (2d Cir. 1990). 1
Count Two alleged that Kaufman accepted benefits from Tony Georgiton as
a reward for favorable treatment by the Melrose Credit Union (“Melrose”), where
Kaufman was the chief executive officer and treasurer. In particular, the
indictment alleged that Georgiton purchased a house (the “Jericho Residence,” or
the “Residence”), in which he permitted Kaufman to live rent-free for more than
two years before providing Kaufman with an unsecured loan of $240,000 to help
him purchase the property outright. For his part, Kaufman arranged for Melrose
to (1) approve certain loans to Georgiton’s company and (2) pay for the naming-
rights of a venue partially owned by Georgiton (the “Melrose Ballroom”).
1We assume for purposes of this opinion that an offense under 18 U.S.C. § 215 is a continuing
offense, a premise that both Kaufman and the government embraced in their appellate briefing.
4
With respect to venue, the evidence at trial demonstrated that Kaufman
engaged a real-estate broker – the chairman of Melrose’s supervisory
committee – to help him locate a house for Georgiton to purchase with the
understanding that Kaufman would live in it. And after Kaufman selected the
Jericho Residence, he personally attended the closing – along with Georgiton, the
real-estate broker, and a Melrose attorney who had agreed to represent Georgiton
at Kaufman’s request – at a law firm in Manhattan. Indeed, it was only after the
closing in Manhattan that Kaufman received the keys to the Residence. Based on
that evidence, a rational juror could have inferred that the closing constituted an
act of acceptance of at least the free-rent gratuities and thus was a “crucial
component[] of, not merely preparatory to,” the gratuity scheme charged in Count
Two. Stephenson, 895 F.2d at 874–75; see also United States v. Svoboda, 347 F.3d 471,
483 (2d Cir. 2003) (“[V]enue is proper in any district where (1) the defendant
intentionally or knowingly causes an act in furtherance of the changed offence to
occur in the district of venue or (2) it is foreseeable that such an act would occur in
the district of venue.”). That Kaufman may have agreed to the scheme prior to the
closing does not mean that the scheme ended then; section 215 criminalizes not
just agreeing to accept gratuities but also actually accepting gratuities, and as
5
explained above, a jury could find that the closing was tantamount to Kaufman’s
acceptance of Georgiton’s gratuities. See 18 U.S.C. § 215(a)(2) (imposing criminal
liability for “corruptly accept[ing] or agree[ing] to accept[] anything of value”
(emphasis added)).
B. Constructive Amendment and Prejudicial Variance
Second, Kaufman contends that a new trial is warranted because the
government’s evidence at trial constructively amended, and prejudicially varied
from, the indictment. More specifically, Kaufman argues that, while the
indictment alleged that Kaufman caused Melrose to approve loans with favorable
interest rates to Georgiton’s company, the evidence at trial showed only that the
loans were not compliant with Melrose’s policies for loans – and specifically not
compliant with Melrose’s typical requirements concerning loan-to-value ratios,
balloon terms, and cash-flow coverage. 2 We review claims of constructive
amendment and prejudicial variance de novo. See United States v. Dove, 884 F.3d
138, 146, 149 (2d Cir. 2018).
2A balloon term is the time period in which the borrower is required to pay all outstanding
principal or else refinance the loan.
6
Contrary to Kaufman’s assertions, the indictment did allege that the loans
were not in compliance with Melrose’s lending policies. And subsequent pretrial
disclosures provided Kaufman with the very documents the government would
introduce to show that the loans were out-of-policy. As a result, there was no
constructive amendment because the charge in Count Two of the indictment fairly
notified Kaufman of the “core of criminality,” or the “essence . . . in general terms,”
of the crime for which he was ultimately tried. United States v. D’Amelio, 683 F.3d
412, 418 (2d Cir. 2012). Similarly, there was no variance because the facts in Count
Two of the indictment were not “materially different” from the evidence presented
at trial. United States v. Salmonese, 352 F.3d 608, 621 (2d Cir. 2003) (citation omitted).
And even if it could be argued that there was a variance between the charging
language and the evidence at trial, Kaufman would not have been prejudiced,
given the notice he received through pretrial disclosures. See United States v.
Khalupsky, 5 F.4th 279, 294 (2d Cir. 2021).
C. Expert-Witness Exclusions
Third, Kaufman asserts that a new trial is warranted because the district
court erred in excluding the testimony of two expert witnesses whom he wished
to call. We cannot say, however, that the district court abused its discretion in
7
excluding the testimony of either. See United States v. Gatto, 986 F.3d 104, 117 (2d
Cir. 2021); United States v. Jones, 965 F.3d 149, 162 (2d Cir. 2020).
As to Ilan Guedj’s proffered testimony, the district court reasonably
concluded that expert testimony about interest rates was irrelevant and/or unduly
confusing, as the government’s trial theory did not turn on the existence of
favorable interest rates. Similarly, Guedj’s proffered non-opinion testimony about
amortization periods on Melrose loans to Georgiton before and after the alleged
gratuities would have been an improper subject for expert testimony since it
would have constituted a simple narration of the loan data that was not
particularly complicated or beyond the grasp of the jury; it would also have been
needlessly cumulative, given that the loans were already in evidence and given
the minimal probative value of tracking amortization periods when gratuities can
be both forward- and backward-looking. See United States v. Sun-Diamond Growers
of Cal., 526 U.S. 398, 405 (1999). Finally, Guedj’s proffered testimony about the
profitability of Melrose’s relationship with Georgiton would have had little
relevance to Kaufman’s intent on the gratuity charge, which did not turn on
whether Kaufman believed his actions to be “desirable or beneficial to Melrose”
or whether he “would have taken the same action without a . . . reward.” J. App’x
8
at 2548 3; cf. United States v. Silver, 948 F.3d 538, 562 n.14 (2d Cir. 2020); United States
v. Biaggi, 909 F.2d 662, 683 (2d Cir. 1990); United States v. Denny, 939 F.2d 1449, 1452
(10th Cir. 1991). Indeed, the district court was justifiably concerned that inclusion
of such testimony would have inappropriately implied to the jury that Kaufman
could not have had the requisite intent if Melrose was not actually harmed by the
loans.
Similarly, as to Neil Zoltowski’s proffered testimony, the district court
reasonably concluded that testimony about the meaning of intellectual-property
terms in the Melrose Ballroom naming-rights agreement would have been an
improper subject for expert testimony because nothing in that agreement was
beyond the ken of the average juror. In addition, as with Guedj’s proffered
testimony on profitability, Zoltowski’s proffered testimony about the benefits and
value of the naming-rights agreement would have had little relevance to the
gratuity charge, which did not turn on whether Kaufman believed the naming-
rights agreement to be “desirable or beneficial to Melrose” or whether he “would
have taken the same action without a . . . reward.” J. App’x at 2548. And again,
the district court was understandably concerned that Zoltowski’s testimony
3 Kaufman does not challenge on appeal these aspects of the jury charge.
9
would have inappropriately implied to the jury that Kaufman could not have had
the requisite intent if Melrose was not actually harmed by the agreement.
II. Count Four
Kaufman mounts two challenges to his Count Four conviction. Again, we
are not persuaded.
A. Safe-Harbor Provision
First, Kaufman argues that the trial evidence was insufficient to show that
the lavish vacations he solicited and accepted from Melrose’s vendor, CBS Radio,
fell outside section 215’s safe-harbor provision, which provides that the statute
“shall not apply to bona fide salary, wages, fees, or other compensation paid, or
expenses paid or reimbursed, in the usual course of business.” 18 U.S.C. § 215(c)
(emphasis added); cf. United States v. Rooney, 37 F.3d 847, 854 (2d Cir. 1994)
(discussing identically worded safe-harbor provision in 18 U.S.C. § 666). We
disagree. Viewed in isolation, CBS Radio’s awarding of vacations could be
construed as an incentive offered in the ordinary course of its sales program. But
as Kaufman conceded at oral argument, the jury was not required to view CBS
Radio’s program in isolation; instead, the jury was also free to consider that
Melrose had a written policy that expressly prohibited employees from accepting
10
anything worth over $100 from a vendor. Given Kaufman’s concession and
Melrose’s policy, we conclude that a juror could reasonably infer that the vacations
did not constitute “bona fide . . . expenses paid or reimbursed[] in the usual course
of business.” 18 U.S.C. § 215(c).
B. Jury Instruction
Second, Kaufman asserts that a new trial is warranted because the district
court improperly responded to a jury note. 4 A district court’s response to a jury
note “is erroneous if it misleads the jury as to the correct legal standard or does
not adequately inform the jury on the law.” United States v. Moran-Toala, 726 F.3d
334, 342 (2d Cir. 2013) (citation omitted). We review preserved claims of error in
supplemental jury instructions de novo, “reversing only where, viewing the
charge as a whole, there was a prejudicial error.” United States v. Aina-Marshall,
336 F.3d 167, 170 (2d Cir. 2003). But where such a claim is unpreserved, we review
solely for plain error. See United States v. Miller, 954 F.3d 551, 557–58 (2d Cir. 2020);
Fed. R. Crim. P. 52(b).
4 Kaufman briefly alludes to error in the original jury instructions – specifically that the district
did not properly instruct the jury on the applicable burden of proof for the safe-harbor defense.
Because Kaufman has presented no developed argument on this alleged error, we find the issue
forfeited and decline to consider it. See United States v. Botti, 711 F.3d 299, 313 (2d Cir. 2013).
11
Here, the jury submitted a question referencing the district court’s prior
instruction on the prima facie elements of a section-215(a)(2) violation and asking
whether “the mere acceptance of a trip with value over $1,000 from a vendor [is]
by itself a violation of the law.” J. App’x at 2586. Kaufman requested that the
district court simply answer “no.” Id. at 1234. But the district court, over
Kaufman’s objection, gave a more fulsome answer. On appeal, Kaufman alleges
two errors, one preserved and one not.
Kaufman’s preserved objection – that the supplemental instruction was
non-responsive to the question of whether “mere acceptance [of a trip,] by itself”
satisfied section 215(a)(2)’s intent element, id. at 1234–35 – is unavailing because
the district court did not mistakenly instruct the jury on intent. To the contrary,
the district court properly explained that the government “must prove each of the
four elements” of section 215(a)(2) and redirected the jury to the relevant prior
instructions, which included a lengthy description of the intent element, to which
Kaufman makes no objection on appeal. Id. at 1236; see also id. at 2543–50.
Moreover, the district court reiterated that “[i]n the event . . . that the government
proves that the defendant solicited or accepted a trip valued at more than a
thousand dollars and fails to prove beyond a reasonable doubt any one, two, or
12
three of the other elements of the offense” – which, again, the district court had
just made clear included the intent element – “then you must acquit.” Id. at 1236.
On this record, we see no basis to conclude that the district court made any error,
let alone prejudicial error.
Similarly, Kaufman’s non-preserved objection – that the response was
inadequate in that it directed the jury to convict if the government proved all four
elements of section 215(a)(2), without reminding the jury of the safe-harbor
defense under section 215(c) – was not plain error. The jury asked a targeted
question about the elements of section 215(a)(2), and the district court gave a
targeted answer; it is neither clear nor obvious that the district court was also
required to renew its previous warning about the separate safe-harbor defense.
See United States v. Gengo, 808 F.2d 1, 4 (2d Cir. 1986) (“[T]he legal sufficiency of
the supplemental charge must be assessed in the context of the instructions as a
whole.” (citation omitted)). 5
5Contrary to Kaufman’s assertions, this case is not materially similar to United States v. Velez,
where we found prejudicial (not plain) error when the district court omitted an essential element
of the alleged offense when responding to a jury’s general request for “[c]larification on all the
counts.” 652 F.2d 258, 261–62 & n.3 (2d Cir. 1981).
13
III. Sentence
As to his sentence, Kaufman contends primarily that the district court’s
imposition of a forty-six-month term of imprisonment – to run concurrently on
both counts – was procedurally unreasonable, as the district court erred in
applying an enhancement pursuant to section 2B4.1(b)(1) of the United States
Sentencing Guidelines. Assuming (without deciding) that the district court did
err in applying the enhancement, we find that any such error was harmless: the
district court repeatedly stated that, even if the enhancement did not apply and
the appropriate Guidelines range was six to twelve months, it would “impose
exactly the same sentence.” J. App’x at 626, 670–71; see United States v. Jass, 569
F.3d 47, 68 (2d Cir. 2009) (“Where we identify procedural error in a sentence, but
the record indicates clearly that the district court would have imposed the same
sentence in any event, the error may be deemed harmless, avoiding the need to
vacate the sentence and to remand the case for resentencing.” (internal quotation
marks omitted)).6
6We also see no error in the district court’s imposition of a $30,000 fine, as there is no support in
the record for Kaufman’s claim that the fine was based on the offense level calculated in the
Presentence Report. Indeed, we note that even if the section 2B4.1(b)(1) enhancement did not
apply and Kaufman received his desired offense level, the fine imposed fell within the Guidelines
range. See U.S.S.G. § 5E1.2.
14
We likewise reject Kaufman’s contention that the district court’s sentence
was substantively unreasonable. As we have explained, we only find sentences
substantively unreasonable if they are “so shockingly high, shockingly low, or
otherwise unsupportable as a matter of law that allowing them to stand would
damage the administration of justice.” United States v. Broxmeyer, 699 F.3d 265, 289
(2d Cir. 2012) (internal quotation marks omitted). In light of the significant value
of the gratuities received by Kaufman, we cannot say that Kaufman’s
forty-six-month sentence is unreasonable.
That Georgiton received a comparatively light sentence is of no moment. As
we have made clear, while “[18 U.S.C. §] 3553(a)(6) requires a district court to
consider nationwide sentence disparities,” it “does not require a district court to
consider disparities between co-defendants.” United States v. Ghailani, 733 F.3d 29,
55 (2d Cir. 2013) (citation omitted). In any event, Kaufman’s conduct readily
distinguishes him from Georgiton, who owed no fiduciary duties to Melrose and
who took responsibility by pleading guilty before trial.
IV. Restitution and Forfeiture Orders
Additionally, Kaufman challenges the district court’s orders (1) requiring
him to pay restitution to Melrose’s insurer for the fees he caused Melrose to pay
15
for the naming rights to the Melrose Ballroom, and (2) directing him to forfeit the
Jericho Residence. We see no error in either order.
A. Restitution Order
We review the district court’s order of restitution for abuse of discretion. See
United States v. Boccagna, 450 F.3d 107, 113 (2d Cir. 2006). Under the Mandatory
Victims Restitution Act, a sentencing court must order a defendant convicted
under 18 U.S.C. § 215 to “make restitution to the victim of the offense,” where “an
identifiable victim or victims has suffered a physical injury or pecuniary loss.” 18
U.S.C. § 3663A(a)(1), (c)(1)(A)(ii), (c)(1)(B). The victim must be “a person directly
and proximately harmed as a result of the commission of [the] offense,” id. at
§ 3663A(a)(2), and “only a victim’s actual loss is compensable, not losses that are
hypothetical or speculative,” United States v. Maynard, 743 F.3d 374, 378 (2d Cir.
2014) (internal quotation marks omitted). Applying these standards, the district
court reasonably determined that the Melrose Ballroom naming-rights agreement
had no value to Melrose and that the insurer’s actual loss amount was therefore
$2 million. Furthermore, the district court reasonably determined that Kaufman
proximately caused the loss. Kaufman’s contention that he could not have done
so since one of the alleged gratuities post-dated the signing of the naming-rights
16
agreement is unpersuasive, ignoring that there were multiple gratuities at issue and
that gratuities can be forward- or backward-looking. See Sun-Diamond, 526 U.S. at 405.
B. Forfeiture Order
Regarding the forfeiture order, we review the district court’s legal
conclusions de novo and its factual findings for clear error. See United States v.
Sabhanani, 599 F.3d 215, 261 (2d Cir. 2010). As an initial matter, we reject the
contention that Kaufman was entitled to a jury determination on the forfeiture
counts of the indictment. The Federal Rules of Criminal Procedure require that “if
the indictment or information states that the government is seeking forfeiture, the
court must determine before the jury begins deliberating whether either party
requests that the jury be retained to determine the forfeitability of specific property
if it returns a guilty verdict.” Fed. R. Crim. P. 32.2(b)(5)(A). The district court
complied with that requirement, specifically asking Kaufman before deliberations
whether he wanted to submit the forfeiture issue to the jury, to which Kaufman
requested that the issue be deferred until after the verdict. Once the verdict was
in, the district court asked whether there was any reason not to dismiss the jury,
and defense counsel responded that the jury could be dismissed. As a result,
Kaufman waived his right to seek a jury determination on forfeiture.
17
We also reject Kaufman’s contention that vacatur of the forfeiture order is
warranted because the district court violated Rule 32.2(b)(2)(B) by issuing the
preliminary order of forfeiture during, rather than “in advance of,” sentencing.
Fed. R. Crim. P. 32.2(b)(2)(B). The untimeliness of the district court’s entry of a
preliminary forfeiture order, however, does not render the forfeiture invalid. See
United States v. McIntosh, No. 14-1908, 2023 WL 408588, at *2–4 (2d Cir. Jan. 25,
2023). Equally unavailing is Kaufman’s argument that he was improperly denied
a hearing under Rule 32.2(b)(1)(B). Kaufman points to no place in the record
where he actually requested a hearing, as required by that rule. See Fed. R. Crim.
P. 32.2(b)(1)(B). To the contrary, Kaufman made legal arguments regarding
forfeiture in his sentencing submission – arguments which he then amplified at
the sentencing hearing – but never made a request for a separate forfeiture
hearing. On these facts, we see no error, let alone reversible error, with respect to
the lack of a forfeiture hearing. See, e.g., United States v. Giles, 518 F. App’x 181, 188
(4th Cir. 2013).
Finally, we agree with the district court’s substantive determination that the
Jericho Residence was forfeitable. When the government seeks forfeiture, “the
[sentencing] court must determine whether the government has established the
18
requisite nexus between the property and the offense” by a preponderance of the
evidence. Fed. R. Crim. P. 32.2(b)(1)(A); see United States v. Roberts, 660 F.3d 149,
165 (2d Cir. 2011). Here, 18 U.S.C. § 982(a)(2) supplies the meaning of “requisite
nexus” when it makes forfeitable “property constituting, or derived from,
proceeds the [defendant] obtained directly or indirectly, as a result of” the criminal
violation. 18 U.S.C. § 982(a)(2).
Again, the evidence at trial showed that Georgiton had Kaufman select the
Jericho Residence before Georgiton purchased it; Kaufman then lived there rent-
free for over two years; and when Kaufman ultimately gained title to the Jericho
Residence, the transaction was financed in part through an unsecured $240,000
loan from Georgiton and a $200,000 loan from Melrose co-signed by Georgiton.
As a result, we see no error in the district court’s determination that the Jericho
Residence itself – even if later purchased by Kaufman in part with legitimate
funds – could be viewed as a gratuity and thus “property constituting . . . proceeds
[Kaufman] obtained directly or indirectly, as a result of” the criminal violation. 18
U.S.C. § 982(a)(2); cf. United States v. Peters, 732 F.3d 93, 99–102 (2d Cir. 2013)
19
(holding that the term “proceeds” in 18 U.S.C. § 982(a)(2) refers to “gross receipts,”
not only “profits,” and emphasizing the punitive aspect of criminal forfeiture). 7
* * *
We have considered Kaufman’s remaining arguments and find them to be
without merit. Accordingly, we AFFIRM the judgment of the district court.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk of Court
7 After surveying all potentially relevant factors, we also reject Kaufman’s contention that
forfeiture of the Jericho Residence would violate the Eighth Amendment. See United States v.
Bajakajian, 524 U.S. 321, 337–40 (1998); United States v. Viloski, 814 F.3d 104, 110–13 (2d Cir. 2016).
20