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United States v. Kaufman

United States District Court, S.D. New York

May 19, 2014



JESSE M. FURMAN, District Judge.

On December 11, 2013, following a six-day jury trial, Carolyn Kaufman was convicted of all three counts with which she was charged: (1) conspiring to obstruct justice, in violation of Title 18, United States Code, Section 371; (2) obstruction of justice, in violation of Title 18, United States Code, Section 1503(a); and (3) perjury, in violation Title 18, United States Code, Section 1623. Kaufman now moves for judgment of acquittal, pursuant to Rule 29 of the Federal Rules of Criminal Procedure, and for a new trial, pursuant to Rule 33 of the Federal Rules of Criminal Procedure. For the reasons stated below, her motions are DENIED.


The following brief background is drawn from the trial transcript ("Tr.") and from the Government's exhibits at trial ("GX"). The charges in this case grew out of an investigation by the United States Department of Labor ("DOL") regarding possible criminal activity at the National Basketball Players Association ("NBPA"), the union of players in the National Basketball Association. As part of that investigation, the DOL examined the relationship between the NBPA and Prim Capital Corporation ("Prim"), a company located in Ohio that provided services to the NBPA and managed the NBPA's investments and finances. In May 2012, the DOL served a federal grand jury subpoena on Prim, calling for the production of, among other things, any and all contracts or agreements between Prim and the NBPA. (GX 100). In response to the subpoena, Prim produced various records, including a 2005 contract between Prim and the NBPA. (GX 200). No other contract was produced at that time.

Around the same time, the NBPA hired the law firm of Paul, Weiss, Rifkind, Wharton & Garrison LLP ("Paul Weiss") to conduct an internal investigation of the union. On or about January 15, 2013, shortly before Paul Weiss was to publicly issue a report critical of management at the NBPA, Prim produced to the DOL and Paul Weiss a copy of an alleged contract between Prim and the NBPA dated March 2011. (GX 401). Although the purported 2011 contract was similar in some respects to the 2005 contract, it included terms more favorable to Prim, including a provision stating that the agreement could not "be cancelled or revoked while in effect for any reason by the NBPA." ( Id. at 3). The purported 2011 contract appeared to have been signed in March 2011 by Gary Hall, the NBPA's former General Counsel; Purvis Short, the NBPA's Director of Player Programs; and Joseph Lombardo, the founder and principal of Prim. Paul Weiss's report, which was issued on January 17, 2013, questioned the validity of the purported contract, calling it "highly suspicious." (Tr. 342-43).

On January 24, 2013, Lombardo was served with a federal grand jury subpoena requiring him to testify and produce certain materials regarding the purported 2011 contract to a grand jury in the Southern District of New York. (GX 1000). On February 5, 2013, Lombardo appeared before the grand jury and falsely testified that the purported 2011 contract was genuine and had been executed in or about March 2011. (GX 1003, at 16-29). In truth, Lombardo had created the purported 2011 contract in December 2011 - several months after the death of Gary Hall with the assistance of a Prim employee named Douglas Creighton. At that time, Creighton, acting at the direction of Lombardo, created a signature stamp of Hall's signature to be affixed to the purported 2011 contract and backdated to March 2011. In his February 5, 2013 grand jury appearance, Lombardo acknowledged that he knew the May 2012 DOL subpoena had called for all contracts, but claimed that he had directed Prim employees not to produce the purported 2011 contract because it could harm the then-head of the NBPA. ( Id. at 31-32).

After Lombardo's testimony, Kaufman - Prim's Chief Compliance Officer and effectively the firm's second-in-command after Lombardo - and Creighton were served with grand jury subpoenas calling for them to appear before the grand jury on February 21, 2013. (GX 1001-02). In the period between February 5, 2013, and February 21, 2013, Lombardo engaged in several conversations with employees at Prim who had been involved in one way or another in creation of the sham contract or responding to the DOL subpoena regarding the purported 2011 contract and the expectation that others would be called to testify. (GX 1101-03). In those conversations, some of which were recorded, Lombardo made efforts to ensure that if the other employees were called to testify they would corroborate his false testimony about the timing and nature of the purported 2011 contract. On February 19, 2013, two days before Kaufman and Creighton were scheduled to appear before the grand jury, Lombardo spoke with the two of them. (GX 1104). During that meeting, which Creighton surreptitiously recorded, Lombardo discussed with Kaufman some of the topics that she might be asked about in the grand jury, and appeared to coach her about some aspects of her testimony, including the date of the contract, Prim's fee structure under the contract, and a letter that Kaufman wrote that was hard to square with the existence of a new contract in 2011. (GX 1104-T at 2-3). During the conversation, Lombardo told Kaufman and Creighton that his "life" was "in [their] hands, " to which Kaufman responded: "That's heavy." (GX 1104-T at 2-3).

Two days later, Kaufman appeared before the grand jury in Manhattan. To the extent relevant here, she testified that the purported 2011 contract was a real contract, that she had learned of its existence in March 2011, and that it had not been produced to DOL along with the first set of production because, as an email attachment, it was too large. (GX 1004-T at 12-13, 21-23). Kaufman claimed that the 2011 contract was produced in January 2013, "right before Paul Weiss' Report was completed, " after they "[went] through to make sure everything was done before [they] had filed everything away in one of the storage boxes and decided to take another look just to be sure." ( Id. at 22). When asked whether she had "talked[ed] with anyone about [her] coming to testify" that afternoon, "other than her lawyer, " Kaufman responded: "Mr. Lombardo said he had been here and focusing on the contract, but not discussion with him about it. And I did talk to my lawyer." ( Id. at 23). Two days after Kaufman testified in the grand jury, a lawyer who had accompanied her there contacted one of the Assistant United States Attorneys involved in the matter to advise that Kaufman had incorrectly identified an employee of Prim as a lawyer. (DX 323; Tr. 1108-09). He did not correct any other portions of her testimony.

On April 22, 2013, Kaufman was charged in a criminal complaint with obstruction of justice. Two days later, Kaufman was arrested. In a post-arrest statement, Kaufman claimed falsely that she had not spoken to Lombardo about her grand jury testimony prior to her appearance before the grand jury and that she had not seen the purported 2011 contract "until 2013 when she was looking through boxes at Prim's office." (Tr. 1006-07). Just over one month later, the grand jury returned an indictment charging Lombardo and Kaufman together with conspiracy to obstruct justice and obstruction of justice and Lombardo alone with fraud offenses. (Docket No. 16). On October 31, 2013, after Lombardo had pleaded guilty, the grand jury returned a superseding indictment charging Kaufman with conspiracy to obstruct justice (Count One), obstruction of justice (Count Two), and perjury (Count Three). (Docket No. 80). The perjury count specified two sets of alleged false statements: (1) her testimony, in answer to the question of when she had "learn[ed] that a new contract had, in fact, been executed, " that she had learned "[s]ometime in March... 2011"; and (2) her testimony, in answer to the question of whether she had "talk[ed] with anyone about [her] coming to testify this afternoon, other than [her] lawyer, before [she] came here, " that "Mr. Lombardo said he had been here and focusing on the contract, but no discussion with him about it." (Docket No. 80).


Rule 29(a) requires the court to "enter a judgment of acquittal of any offense for which the evidence is insufficient to sustain a conviction." A defendant challenging the sufficiency of the evidence under Rule 29 bears a "heavy burden, " United States v. Gaskin, 364 F.3d 438, 459 (2d Cir. 2004), as the standard of review is "exceedingly deferential, " United States v. Hassan, 578 F.3d 108, 126 (2d Cir. 2008). A court "must view the evidence in the light most favorable to the government, crediting every inference that could have been drawn in the government's favor, and deferring to the jury's assessment of witness credibility and its assessment of the weight of the evidence, " United States v. Chavez, 549 F.3d 119, 124 (2d Cir. 2008) (alterations, citations, and internal quotation marks omitted), and it must affirm the conviction if " any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt, " Jackson v. Virginia, 443 U.S. 307, 319 (1979); see also United States v. Guadagna, 183 F.3d 122, 130 (2d Cir. 1999) (stating that a court may overturn a jury's verdict only if the evidence supporting the verdict is "nonexistent or so meager that no reasonable jury could find guilt beyond a reasonable doubt" (internal quotation marks omitted)). Moreover, in reviewing the record, the evidence must be analyzed "not in isolation but in conjunction." United States v. Diaz, 176 F.3d 52, 89 (2d Cir. 1999).

A defendant's knowledge of a crime and his participation in it with criminal intent may, like any element of a crime, be established through circumstantial evidence. See, e.g., United States v. Gordon, 987 F.2d 902, 906-07 (2d Cir. 1993); see also, e.g., United States v. Santos, 553 U.S. 507, 521 (2008) (plurality opinion) (observing that "knowledge must almost always be proved... by circumstantial evidence"); United States v. Rodriguez, 392 F.3d 539, 544 (2d Cir. 2004) (stating that "the government is entitled to prove its case solely through circumstantial evidence"). Additionally, a "conviction may be sustained on the basis of the testimony of a single accomplice, so long as that testimony is not incredible on its face and is capable of establishing guilt beyond a reasonable doubt." Diaz, 176 F.3d at 92 (internal quotation marks omitted). "Any lack of corroboration of an accomplice's or co-conspirator's testimony goes merely to the weight of the evidence, not to its sufficiency, and a challenge to the weight is a matter for argument to the jury, not a ground for reversal...." Id. (alterations and internal quotation marks omitted).

Where, as here, a defendant challenges a conspiracy conviction, "deference to the jury's findings is especially important... because a conspiracy by its very nature is a secretive operation, and it is a rare case where all aspects of a conspiracy can be laid bare in court with the precision of a surgeon's scalpel." United States v. Santos, 541 F.3d 63, 70 (2d Cir. 2008) (internal quotation marks omitted). Moreover, the evidence necessary to link a defendant to a conspiracy "may be circumstantial in nature." In re Terrorist Bombings of US. Embassies in E. Africa, 552 F.3d 93, 113 (2d Cir. 2008) (internal quotation marks omitted). In fact, the Second Circuit has observed that "a defendant's knowing agreement to join a conspiracy must, more often than not, be proven through circumstantial evidence." United States v. Lorenzo, 534 F.3d 153, 161 (2d Cir. 2008) (emphasis added) (internal quotation marks omitted). Thus, for example, a defendant's "knowing and willing participation in a conspiracy may be inferred from, " among other things, her "presence at critical stages of the conspiracy that could not be explained by happenstance, or a lack of surprise when discussing the conspiracy with others." In re Terrorist Bombings, 552 F.3d at 113 (internal quotation marks omitted). It "may also be established by evidence that the defendant participated in conversations directly related to the substance of the conspiracy [or] possessed items important to the conspiracy." Id. (internal quotation marks omitted).

Applying these standards here, Kaufman's challenge to the sufficiency of the evidence is meritless. Significantly, there is - and can be - no real dispute that some of Kaufman's testimony before the grand jury was false. The undisputed and overwhelming evidence showed that the purported 2011 contract was a fraud, that it did not even exist until December 2011, and that it was purposefully withheld by Lombardo in response to the initial DOL subpoena. ( See, e.g., GX 501, 502, 503, 904, 906, 907, 923, 1204). It follows, for example, that Kaufman could not have learned about the contract in March 2011, as she testified. ( See GX 1004-T at 12-13). Nor could a letter that she wrote in December 2011 requesting increased compensation for Prim have referenced the purported 2011 contract, as she told the grand jury. ( Compare GX 606, with GX 1004-T at 19-20). And it is not the case that the purported 2011 contract was produced only in January 2013 because Prim discovered it at that time, as she claimed. ( Compare GX GX 1004-T at 21-22, with Tr. 899-900). Kaufman's principal argument is rather that the evidence was insufficient to support a finding that she knew her statements were false. (Carolyn Kaufman's Renewed Mot. J. Acquittal (Docket No. 149) ("Rule 29 Mem.") 4-16; see also Reply to United States' Opp'n Carolyn Kaufman's Mot. J. Acquittal and New Trial (Docket No. 152) ("Reply Mem.") 1, 5 (distinguishing between "factual falsity" and "knowledge of falsity")). She argues, as she did at trial, that she was deliberately misled by Lombardo and Creighton about the propriety and production of the purported 2011 contract, and that her testimony - while false was not knowingly false or in bad faith. (Rule 29 Mem. 10-13).[1]

Upon review of the entire record, the evidence in this case was plainly sufficient for the jury to reject these arguments, and to support its finding beyond a reasonable doubt that Kaufman knew (or was willfully blind to the fact that) the purported 2011 contract was a fake and, by extension, that she committed the crimes charged in the superseding indictment. In fact, the jury could infer as much from the recording of the February 19, 2013 conversation with Lombardo alone. (GX 1104; see also GX 1104-T). During that conversation, which took place only one day before Kaufman traveled to New York to testify before the grand jury, Kaufman and Lombardo discussed "the new contract, " a clear reference to the sham 2011 contract. (GX 1104-T at 2). Drawing all inferences in favor of the Government, Lombardo coached Kaufman on what she would likely be asked about in the grand jury and what she should say. ( Id. at 1-3). For example, Lombardo told Kaufman: "[I]f they ask you about" the agreement between Prim and the NBPA, "our whole thing was we were gonna consolidate it, we were gonna just take a flat fee... this is the only other thing that uh, you should know about, that they may ask you about." (GX 1104-T at 2). Kaufman replied, "Hight" "ok." ( Id. at 2). Significantly, Lombardo twice told Kaufman that his "life" was in her hands, to which Kaufman responded, "[t]hat's heavy." (Id.). As if to summarize the object of their conspiracy, Lombardo stated to Creighton and Kaufman: "I told my wife my life is in your hands and Carolyn's hands, okay? That, the dates on the contract and you saw the names on the contract, uh, after this, they're not going to call us anymore." ( Id. at 3). Drawing all permissible inferences in the Government's favor, as ...

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