United States v. Salemo

11-4631-cr
United States v. Salemo
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY
FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN
CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE
EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION
“SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY
PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit, held at
the Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, in the City of New
York, on the 10th day of October, two thousand twelve.
PRESENT: REENA RAGGI,
DENNY CHIN,
SUSAN L. CARNEY,
Circuit Judges.
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UNITED STATES OF AMERICA,
Appellee,
v. No. 11-4631-cr
GEORGE SALEMO,
Defendant-Appellant.
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APPEARING FOR APPELLANT: JEFFREY A. WILLIAMS (Michael S. Schachter,
Robin A. Van Der Meulen, Alicia D. Kelman,
Elizabeth C. Roache, on the brief), Willkie Farr &
Gallagher, New York, New York.
APPEARING FOR APPELLEE: BRENT S. WIBLE (Adam Fee, on the brief),
Assistant United States Attorneys, for Preet
Bharara, United States Attorney for the Southern
District of New York, New York, New York.
Appeal from a judgment of the United States District Court for the Southern District
of New York (Jed S. Rakoff, Judge).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND
DECREED that the judgment of conviction entered on October 27, 2011, is AFFIRMED.
George Salemo stands convicted after jury trial of two counts of wire fraud in
connection with his attempts (1) between March and May 2009, to secure financing for a sea
cucumber farming project in the Marshall Islands (Count One), and (2) between August and
November 2010, to acquire six parcels of distressed commercial real estate in the Bronx
(Count Two). See 18 U.S.C. § 1343. Salemo appeals his conviction on Count Two only,
challenging (1) the sufficiency of the evidence proving fraudulent intent, (2) the denial of his
pre-trial severance motion, (3) the exclusion from evidence of two emails between Salemo
and his attorney, (4) the district court’s response to a jury note, and (5) his 162-month
sentence. We assume the parties’ familiarity with the facts and record of prior proceedings,
which we reference only as necessary to explain our decision to affirm.
1. Sufficiency of Evidence
We review Salemo’s sufficiency challenge de novo. See United States v. Abu-Jihaad,
630 F.3d 102, 134–35 (2d Cir. 2010), cert. denied, 131 S. Ct. 3062 (2011). We are obliged
to uphold the conviction if the evidence, viewed in the light most favorable to the
government, would permit any rational jury to find guilt proved beyond a reasonable doubt.
See id. Salemo argues that the evidence was insufficient to permit a rational jury to find that
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he intended to deprive Milbank Real Estate (“Milbank”) of the six parcels of real estate at
issue without paying the $22 million sale price. He contends that the evidence shows, at
most, that he misrepresented his identity and presented falsified bank statements and checks
to Milbank in order to stall for time to secure the required financing, and that these
misrepresentations cannot support a wire fraud conviction. See United States v. Starr, 816
F.2d 94, 98 (2d Cir. 1987) (“[T]he harm contemplated must affect the very nature of the
bargain itself.”).
Salemo’s intent in making numerous false representations to Milbank was a question
of fact for the jury. See United States v. Coppola, 671 F.3d 220, 239 (2d Cir. 2012) (“[T]he
task of choosing among permissible competing inferences is for the jury, not a reviewing
court.” (internal quotation marks omitted)). While Salemo was free to urge a non-fraudulent
explanation for his misrepresentations, the jury was by no means required to find the
argument persuasive. Although we review only a cold record, we reach the same conclusion
as the trial court: “common sense” would permit a rational jury to find, based on the lengths
to which Salemo went in misrepresenting himself and his means to Milbank, “that one
wouldn’t be undertaking this kind of scheme unless one intended to obtain those buildings
through false and fraudulent means.” Trial Tr. 637, J.A. 219.
In urging a contrary conclusion, Salemo cites to email evidence that, he contends,
demonstrates his intent to secure a mortgage on the properties prior to closing to pay Milbank
the $22 million owed under the contract. On sufficiency review, however, we must assume
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that the jury did not find the emails to be credible evidence of such intent. Indeed, as the
government observes, a rational jury could still conclude that Salemo intended to trick
Milbank into turning over the properties without payment, and that the email evidence, at
best, indicated that Salemo might at some time thereafter repay Milbank for what he had
managed to procure by fraud.
Salemo further maintains that the improbability of tricking a real estate company into
surrendering $22 million worth of property without payment supports his sufficiency
challenge. That argument fails because the law punishes a fraudulent scheme without regard
to its likely success. “[T]he government is not required to show that the intended victim was
actually defrauded, but need only show that the defendants contemplated some actual harm
or injury.” United States v. Zagari, 111 F.3d 307, 327 (2d Cir. 1997) (internal quotation
marks and alterations omitted); see United States v. Trapilo, 130 F.3d 547, 552 (2d Cir.
1997) (calling success of scheme “irrelevant” to wire fraud offense); United States v. Church,
888 F.2d 20, 24 (5th Cir. 1989) (rejecting sufficiency challenge to bank fraud
notwithstanding scheme’s “implausibility”).
In sum, a rational jury could find that the scheme of misrepresentations was intended
not merely to keep the deal alive, but to deprive Milbank of property without payment,
however unlikely the prospect of Salemo’s achieving that criminal goal. In reaching this
conclusion, we are mindful that “a jury may bring to its analysis of intent . . . all the
circumstantial evidence it has received on the scheme and the purpose of the scheme in
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which the defendant allegedly participated.” United States v. Guadagna, 183 F.3d 122, 130
(2d Cir. 1999). That includes evidence of all of Salemo’s misrepresentations pertaining to
the alleged real estate scheme, as well as his earlier use of forged government documents to
acquire unrelated financing, which, as we explain infra, was properly admitted to prove not
only Count One but Salemo’s fraudulent intent on Count Two. It also includes the probative
and undisputed fact that Salemo had attempted through deception to bypass the escrow
deposit condition, from which fact the jury could rightly infer that Salemo intended, through
comparable trickery, to bypass the condition of paying the full $22 million contract price on
closing.1
Accordingly, we reject Salemo’s sufficiency challenge as without merit.
2. Joinder and Motion To Sever
Salemo contends that the trial court erred in refusing to sever Counts One and Two
of the indictment. See Fed. R. Crim. P. 14(a). We review a lower court’s rulings under Rule
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In any event, we note that Salemo’s theory of insufficiency—i.e., that his lies were
intended merely to keep negotiations alive, to the exclusion of other bidders—is foreclosed
by United States v. Carlo, 507 F.3d 799 (2d Cir. 2007) (per curiam), in which we held that
causing others “to make economic decisions about the viability of their real estate projects
based on misleading information” deprives those persons of property rights under § 1343.
Id. at 802 (upholding conviction based on evidence that defendant deceived developer clients
“in the hope that they would continue their projects, at great risk and expense, while he
pursued an ever-dwindling chance of actually securing funding”). We held in Carlo that the
defendant’s desire to see the transactions close on legitimate terms, as Salemo maintains is
the case here, did “not negate his intent to inflict a genuine harm on the victims.” Id. Such
a theory of conviction comports with the government’s argument on summation that Salemo
made misrepresentations “to persuade Milbank to keep going with the deal, to make Milbank
think that defendant actually had money to buy these buildings.” Trial Tr. 679, J.A. 221.
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14 for abuse of discretion, see United States v. O’Connor, 650 F.3d 839, 859 (2d Cir. 2011);
United States v. Sampson, 385 F.3d 183, 190 (2d Cir. 2004), and conclude there was no
abuse of discretion here. To the extent Salemo bases his argument on the misjoinder
provision of Rule 8(a), we review the district court’s ruling de novo, see United States v.
Shellef, 507 F.3d 82, 96 (2d Cir. 2007), and conclude that Salemo fails to show either
misjoinder or prejudice, see United States v. Rivera, 546 F.3d 245, 253 (2d Cir. 2008).
The offenses charged in the two counts, each consisting of Salemo’s use of forged
documents to acquire money or property via entities he controlled, although occurring
approximately one year apart, display enough of a general likeness to warrant joinder. See
Fed. R. Crim. P. 8(a); United States v. Rivera, 546 F.3d at 253; United States v. Ruiz, 894
F.2d 501, 505 (2d Cir. 1990); United States v. Werner, 620 F.2d 922, 926 (2d Cir. 1980).
Further, because the fraud charged in Count One would have been admissible in any event
on the disputed question of Salemo’s fraudulent intent on Count Two, see United States v.
Caputo, 808 F.2d 963, 968 (2d Cir. 1987), Salemo cannot demonstrate prejudice from the
joinder, see United States v. Halper, 590 F.2d 422, 431 (2d Cir. 1978) (noting “element of
prejudice” from misjoinder “is largely absent in situations where evidence of the separate
crimes would be admissible anyway”). Indeed, the district court carefully weighed the
potential prejudice from the evidence against its probative value and the similarity of the
offenses before concluding that severance was unwarranted. We concur in that assessment.
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3. Exclusion of Evidence
Salemo faults the exclusion from evidence of a pair of emails between himself and his
attorney, Seymour Hurwitz, that Salemo argues show his lack of intent to defraud. We
review the district court’s evidentiary ruling for abuse of discretion, and we will vacate a
conviction only for manifest and prejudicial error, which are not present here. See United
States v. Miller, 626 F.3d 682, 688 (2d Cir. 2010), cert. denied, 132 S. Ct. 379 (2011).
As an initial matter, the district court did not exclude the emails from evidence
outright; rather, it conditioned admission of these hearsay statements on Salemo or his
counsel testifying to their relevance. Salemo’s counsel responded by implying that Hurwitz,
already under subpoena, would testify. In fact, he was not called as a witness.
In the first email, Hurwitz instructed Salemo to forward a copy of a check to Milbank
to confirm the parties’ deal. In the second email, Hurwitz added, “when we sign the contract
we are going to make the actual deposit to Royal Abstract.” J.A. 118. The district court
acted well within its discretion in finding that, without further explanation, the emails by
Hurwitz were more confusing than probative on the issue of Salemo’s state of mind and,
therefore, his intent. See Fed. R. Evid. 403; United States v. Salameh, 152 F.3d 88, 110 (2d
Cir. 1998) (holding that appellate court will not second-guess trial court’s Rule 403
assessment unless arbitrary or irrational). Indeed, as the government observes, Salemo
presented no advice-of-counsel defense; nor is it apparent how the excluded emails, which
say nothing about sending fraudulent checks to Milbank, would have bolstered Salemo’s
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defense or negated a finding of fraudulent intent.
Accordingly, Salemo’s evidentiary challenge fails on the merits.
4. Response to Jury Note
In the course of its deliberations, the jury sent a note to the district court asking if
“stalling for time by use of fraudulent or deceitful methods to buy or obtain property
constitute[s] a scheme [to defraud].” Trial Tr. 786, J.A. 235. Salemo argues that the district
court’s response allowed the jury to convict him simply for stalling, without finding intent
to defraud Milbank of property. The record is to the contrary. The district court’s careful
and detailed answer made clear that a defendant could only be convicted on proof of the
elements of wire fraud.2 Thus, the jury needed to consider not simply whether Salemo was
stalling for time, but whether he did so “as part of a scheme to obtain money or property, by
means of deceit.” Id. at 806, J.A. 240. In short, the jury was instructed to consider whether
stalling was “one of the deceitful means that was being used to obtain money or property or
to try to obtain money or property,” and whether that was “being done by the defendant with
an intent to defraud and to harm, or not. ” Id.
2
To the extent Salemo argues in his reply brief that the district court’s response was
impermissible in light of the jury’s question about stalling taken together with its inquiry
whether the word “obtain” as used within § 1343 includes “buy,” he waived this argument
by not raising it in his opening brief. See Connecticut Bar Ass’n v. United States, 620 F.3d
81, 91 n.13 (2d Cir. 2010) (“Issues raised for the first time in a reply brief are generally
deemed waived.”).
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Not only do these excerpts accurately state the law, the full response,3 reviewed in
context and in light of the total charge, see Lowenfield v. Phelps, 484 U.S. 231, 237 (1988);
United States v. Mitchell, 328 F.3d 77, 82 (2d Cir. 2003), correctly instructed the jury on the
government’s burden to prove the requisite criminal intent for wire fraud, and did not present
the jury with a legally unsound theory of conviction, see generally United States v.
Desnoyers, 637 F.3d 105, 110 (2d Cir. 2011) (distinguishing between factual and legal
insufficiency of conviction).
5. Sentence
Finally, Salemo contends that the district court committed procedural error in applying
3
The district court instructed the jury as follows:
The answer to that one really where I was hung up is sometimes it
could and sometimes it couldn’t. It all depends on the whole situation.
Stalling for time is not necessarily a scheme to defraud. One can think
of lots of situations where it would not be a scheme to defraud, but
sometimes it is a scheme to defraud. How do you know the difference?
You know the difference by looking at all those other elements. Was
it being used as part of a scheme to obtain money or property, by means
of deceit? Was it one of the deceitful means that was being used to
obtain money or property or to try to obtain money or property, and
was that being done by the defendant with an intent to defraud and to
harm, or not? That puts the context and puts the way in which you can
decide whether it’s a stalling that is not wire fraud or a stalling that is
wire fraud. So it’s really when you put it in the context of all the other
elements and all the other aspects that you know the answer to your
question. And that’s why we can’t just answer it in the abstract.
Sometimes it could be, sometimes it couldn’t be. You have to look at
the whole thing and then you’ll know the answer.
Trial Tr. 806, J.A. 240.
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a 22-level enhancement to his Guidelines base offense level, upon finding $22.5 million in
total intended loss on the two counts of conviction. See U.S.S.G. § 2B1.1(b)(1). He asserts
that only a 14-level enhancement was warranted based on the $500,000 loss calculation for
Count One. We review “the factual determinations underlying a district court’s loss
calculation at sentencing for clear error,” United States v. Canova, 412 F.3d 331, 351 (2d Cir.
2005), and we identify none here.
Salemo argued to the court, as he did to the jury, that he intended to cause Milbank
no loss on Count Two because he planned to pay for the properties out of mortgage proceeds.
See generally United States v. Confredo, 528 F.3d 143, 152 (2d Cir. 2008) (recognizing
defendant’s right to persuade court that intended loss was less than value of property
involved). Just as the jury was entitled to find beyond a reasonable doubt that Salemo
intended to defraud Milbank out of $22 million worth of property, the district court was
entitled to find that same intent by a preponderance of the evidence. See United States v.
Vaughn, 430 F.3d 518, 525 (2d Cir. 2005); U.S.S.G. § 2B1.1, cmt. n.3(A) (defining “loss”
to include even “intended pecuniary harm that would have been impossible or unlikely to
occur”).
We have considered defendant’s other arguments on appeal and we conclude that they
are without merit. Accordingly, the judgment of conviction is AFFIRMED.
FOR THE COURT:
CATHERINE O’HAGAN WOLFE, Clerk of Court
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