United States District Court, S.D. New York
Attorney for United States of America Robert Lee Boone Carrie
Heather Cohen Kan.Min Nawaday United States Attorney's
Office Southern District of New York One St. Andrew's
Attorney for Defendant Larry Davis Sanford N. Talkin Talkin,
Muccigrosso & Roberts.
Attorneys for Defendant DCM Erectors, Inc. Kevin Ronald
Puvalowski Sarah Elizabeth Aberg Sheppard Mullin Richter
& Hampton, LLP.
OPINION & ORDER
LORETTA A. PRESKA Senior United States District Judge.
Authority MWBE Program................................5
Solera / DCM Joint
WTC contracts with Port Authority.....................10
29 Motion for Acquittal.............................20
Standard Of Review....................................23
Fraud and Conspiracy to Commit Wire Fraud-Elements .
Sufficiency of the Evidence...........................25
Defendants' misrepresentations did not go to an .....
essential element of the contract.....................42
Port Authority received the full benefit of its bargain with
MWBE sections were not essential elements of the
breach of the MWBE sections of the contracts were not
violations of law......................45
MWBE sections of the contracts were merely
Defendants' misrepresentations did not expose the Port
Authority to potential or actual economic harm ...... 49
of the Government's evidence was legally
29(d) Conditional Determination of New Trial (Rule 33)
Sufficiency of the Indictment, Constructive Amendment and
Sufficiency of the Indictment ..........................75
Constructive Amendment/Prejudicial Variance ............ 79
Court entered a judgment of conviction as to Defendants Larry
Davis ("Davis") and DCM Erectors, Inc.
("DCM") (collectively, the "Defendants")
on August 10, 2016 following a jury trial. Both Defendants
were found guilty of one count of Wire Fraud in violation of
Title 18, United States Code, Section 1343 and one count of
Conspiracy to Commit Wire Fraud in violation of Title 18,
United States Code, Section 1349. 18 U.S.C. § 1343
(2012); 18 U.S.C. §1349 (2012).
move, pursuant to Rules 29 and 33 of the Federal Rules of
Criminal Procedure, for a judgment of acquittal or a new
trial. The Defendants also seek to dismiss the indictment, S3
13 Cr. 123 (LAP), and to vacate the convictions on the
grounds of constructive amendment and prejudicial variance.
reasons set forth below, the Court:
1. grants the motion for acquittal;
2. conditionally grants the motion for a new trial;
3. denies the motion to dismiss the indictment; and
4. grants the motion to vacate the convictions on the grounds
of constructive amendment and prejudicial variance.
Larry Davis is the owner and President of DCM. (See
Trial Transcript ("Tr.") at 157.) DCM is a firm
with an expertise in erecting the structural steel for office
buildings. In its construction jobs, DCM typically furnishes
and erects the steel. (See id.)
the steel decking contract for Tower 1 ("One-WTC")
("Tower 1") of the World Trade Center
("WTC"). (See Tr. 157; see also Government
Exhibit 1 ("GX-1")). On July 25, 2007, DCM executed
the Structural Steel and Metal Deck Contract ("Tower 1
Contract") with Tishman Construction Corporation, the
construction manager for the project hired by the
Port-Authority-owned company, 1-WTC, LLC. (See
GX-1.) The contract amount was $256 million. (See
GX-1 at 32.)
DCM also became involved in the construction of the
neighboring World Trade Center PATH Transportation Hub
("Hub"). (See Tr. 170-71.) On May 12,
2009, Larry Davis signed a subcontract ("Hub
subcontract") on behalf of DCM with the general
contractor, Phoenix, LLC, for the metal decking of the
This contract was priced at $330 million. (See GX-2
Authority MWBE Program
large construction projects worth over a million dollars, the
Port Authority has participation goals for minority-owned and
woman-owned business enterprises ("MWBEs").
(See Tr. 71.) The "overall goal" of the
Port Authority is for MBEs to have 12 percent participation
and for WBEs to get five percent participation in large
contracts. (See Tr. 71:11-16.) To help fulfill the
Port Authority's goal, when the Port Authority signs a
contract for a large job with a prime contractor (typically a
non-minority owned business), the contract will customarily
include a provision related to subcontracts with MWBEs.
(See Tr. 71:17-21.)
Port Authority certifies MWBEs as being in fact
minority-owned or woman-owned and publishes an online
directory of these firms that includes the companies'
names and a specific trade for which they are certified.
(See Tr. 73:20-74:12.) As a practice, the Port
Authority refers prime contractors to this directory of MWBEs
in all of its contracts. (See Tr. 74:8-12.) To begin
the certification process, a prospective MWBE fills out an
application with a series of questions regarding ownership
and control of the business and submits supporting
documentation. (See Tr. 75:9-15.) The Port Authority will
only certify a MWBE if the business is 51 percent
minority-owned or woman-owned and the minority or woman
business owner operates, controls, and manages the operation.
(See Tr. 75:9-20.) To aid the certification
analysts' review of MWBE certification applications, the
Port Authority maintains an internal guidelines document that
outlines the approval criteria. (See GX-20; see
also Tr. 76:3-11.) Once the Port Authority makes the
certification decision, the owner is notified by letter. (See
Tr. 76:1-2.) If certified, the business is then listed by the
Port Authority in the MWBE online directory-(See Tr.
the Port Authority encourages prime contractors to form joint
ventures ("JVs") or otherwise subcontract with
MWBES, the Port Authority does not certify JVs as MWBEs.
(See Tr. 79:4-7.) Instead, a related but separate
process governs the participation of JVs in Port Authority
projects where one of the joint venturers is an
MWBE. (See Tr. 79:13-19.) In such an
instance, a prospective JV submits an application to the Port
Authority describing the work to be performed and the role of
the MWBE in the project. (See Tr. 81:2-14; see
also GX-24.) The application also calls for a copy
of the JV agreement. (See GX-24; Tr. 81:15-21.) The
Port Authority maintains a separate internal guidance
document designed "to assist Port Authority staff in
providing direction and oversight to [MWBE JVs] which are
operative on PA construction sites." (See GX-23
at 1; see also Tr. 84:7-8.)
Authority tabulates its progress towards its
"aspirational" goal, (see Tr. 129:17-19),
of ensuring the involvement of MWBEs through a system of MWBE
"credit, " (see Tr. 129). After reviewing
MWBE involvement in a particular job, the Port Authority
assigns a numerical figure in dollars to reflect the
involvement of MWBEs according to its own internal standards.
Because of the idiosyncrasies of the Port Authority's
process, the credit figure does not necessarily correspond to
the monies actually received by MWBEs on Port Authority
projects. For example, if a MWBE is paid $100, 000 for
supplying material to a building, unless the MWBE also
installed the material, the Port Authority will determine the
credit figure to be $60, 000. (See GX-1 at 8; see
also Tr. 131.)
despite the financial connotation of the word "credit,
" as the word is used in this specialized context,
credit has a non-pecuniary meaning. Credit does not connote
any actual pecuniary exchange between the Port Authority and
a contractor but is rather an evaluative figure assigned by
the Port Authority to characterize the participation of MWBE
firms in Port Authority projects. (See Tr. 82-83,
101.) This credit figure has at least two relevant
applications. First, the credit figure calculated by the Port
Authority is used by the Port Authority in its annual reports
to its Board of Directors and the public. (See Tr. 129.)
Second, that same figure is "credited" to the
contractors and is used as a way for the Port Authority to
monitor the contractors' performance towards the Port
Authority MWBE goals under their contracts. (See
trial, the parties stipulated that the Port Authority
policies and guidelines as contained in the MWBE
certification guidelines, (see GX-20), and MWBE JV
guidelines, (see GX-23), and reflected in the JV
application, (see GX-24), were to be considered by the jury
only for the limited purpose of explaining the Port
Authority's certification process for MWBEs.
(See Tr. 85:19-86:4.) The stipulation further
provided that the guidelines and the policies of the Port
Authority "are not criminal laws" and that
"[v]iolation of those polices and guidelines is not a
crime, and whether the defendants complied with those
requirements is not determinative of the innocence or guilt
of any defendant in this case." (See
Solera/DCM Joint Venture
point, DCM formed a JV with Solera Construction, Inc.
("Solera"), forming Solera Construction, Inc./DCM
Erectors, Inc. JV ("Solera/DCM"). (See GX-31; see
also Tr. 262:23-263:8.) The Port Authority certified
Solera Construction as a minority-owned business
("MBE"). (See Tr. 90.) The President and one
hundred percent owner of Solera Construction is Johnny
Garcia, (see Tr. 90), a Hispanic man born and raised
in Ecuador. (See Tr. 216-17.)
was evidence at trial that Solera/DCM began as early as 2001,
(see GX-30; see also 267:11-13}; in 2004, Solera and
DCM executed a detailed general JV Agreement that was not
specific to any one project. (See GX 31; Tr.
262:23-263:8.) In 2006, the two companies executed a
substantially similar version of the 2004 JV Agreement, but
this time, the JV was formed for the express purpose of
partnering on the construction for One-WTC. A few years
later, in February 2009, DCM and Solera signed another JV
agreement, this time coming together to perform the
subcontracting work of metal decking for the Hub. (See GX 33;
see also Tr. 263.)
Tower 1 project, DCM subcontracted with GLS Enterprises, Inc.
("GLS"), a woman-owned business that was certified
by the Port Authority as a WBE for payroll services.
(See Tr. 704:11.) Gale D'Aloia, the founder,
owner and manager of GLS, (see Tr. 759: 2-7), started the
payroll management company in 2001, (see Tr. 676). In 2006,
GLS received certification as a WBE for payroll management
services. (See Tr. 759 at 12-14.) GLS handled all of
the DCM payroll for both the Tower 1 and the Hub. (See Tr.
732:16-18; 761: 13-15.)
around 2009, GLS took on further subcontractual work at both
the Tower 1 and the Hub, this time for surveying.
(See Tr. 704-05; 707:6-9; 747:8-10.) GLS billed DCM
for the payroll management and surveying that it provided.
(See Tr. 690:3-4; 714:14-15.)
WTC contracts with Port Authority
$256 million contract that DCM signed for the metal decking
for One-WTC contained a section (Section 8) titled
"Minority and Women's Business Enterprises
Program." (See GX-1 at 6.) The section provides
definitions of a MBE and a WBE. A MBE, according to the
contract, is "a business entity which is at least
fifty-one percent (51%) owned by one or more members of one
or more minority groups . . . and whose management and daily
business operations are controlled by one or more such
individuals who are citizens or permanent resident
aliens." (See GX- 1 at 6.) The contract defined
a WBE in the substantially similar terms. (See id.)
contract directed bidders to submit a MWBE participation plan
that contained the names of the MWBE contractors, the
description of the work to be performed by each MWBE
contractor as well as the dollar value of the work.
(See GX-480, 481A, 481B, 481C (participation plans
submitted by Defendants}.) The contract specified that the
MWBE participation plan "should meet or exceed" the
Port Authority's goals of twelve and five percent
participation for minority and woman-owned enterprises
respectively. (See GX-1 at 7.) "If such goals are not
met, Contractor shall be responsible for demonstrating its
'good faith' efforts to achieve the goals." (See
id.) The contract provided that a monthly statement
of payments reports "reflecting the actual payments to
MBE/WBE contractors must be submitted throughout the duration
of the performance of the Contract." (See id.
contract required that DCM "use and document every good
faith effort to comply with its MWBE Participation Plan and
to permit its MWBE Subcontractors to Perform." (See
id. at 7.) The contract defined the following activity,
inter alia, as "good faith efforts:"
attendance at pre-bid meetings; utilization of the
Authority's online Directory of certified MBE/WBEs;
active and affirmative solicitation of bids for subcontracts
from MBEs/WBEs; dividing the work to be subcontracted into
smaller portions or encouraging the formation of JVs or
similar arrangements among subcontractors in order to
increase the likelihood of achieving the MBE/WBE goals.
contract noted the consequences of a contractor's lack of
performance of the MWBE aspects of the agreement. (See
id at 8.) If before the award of the contract, and after
the Port Authority's and Tishman Construction's
review of the participation plan submitted by the bidder,
Tishman Construction determined that DCM had "not made a
good faith effort to meet the MBE/WBE participation goals and
that the contractor had not demonstrated that a full or
partial waiver of such goals is appropriate, [Tishman]
may advise the bidder that it is not responsible and
may reject the bidder's Proposal." (See Id.
at 8 (emphasis added).) If DCM "fail[ed] to demonstrate
good faith in carrying out its MBE/WBE participation plan and
in permitting its MBE/WBE Subcontractors to perform and the
Contractor has not demonstrated that a full or partial waiver
of the above referred MBE/WBE participation goals is
appropriate, then, upon receipt of a future Proposal or
Proposals from [DCM], [Tishman] may advise the Contractor
that is it not a responsible bidder and may reject
such proposal." (See id. (emphasis added}.) The
contract additionally gave the ability to DCM to
"request a full or partial waiver of the above described
MBE/WBE participation goals by providing a reasonable
demonstration to [Tishman] that its good faith efforts will
not result in compliance with the [MWBE] goals."
$330 million contract that DCM signed for the metal decking
on the Hub, in all relevant respects, contained the same
requirements for the MWBE component of the Hub project as
were included in the One-WTC contract. (See GX-2D.)
This contract was between the contractor, Phoenix
Constructors JV, and DCM, the subcontractor responsible for
furnishing, fabricating and erecting the structural steel and
the metal decking of the Hub. (See GX-2 at 1.)
March 23, 2016, Defendants were charged in a two-count
indictment. (See Indictment S3 13 Cr. 923
("Indictment"), dated Mar. 23, 2016 [dkt. no. 38].)
The indictment charged each Defendant with one count of wire
fraud in violation of 18 U.S.C. § 1343 and one count of
conspiracy to commit wire fraud in violation of 18 U.S.C.
to the Indictment, in relation to the Solera/DCM work, the
Defendants misrepresented: a) that Solera/DCM workers
performed the metal decking at One WTC and the Hub when in
fact the workers were employed by a different, non-minority
contractor; b) Solera/DCM performed steel procurement work
when DCM procured the steel. In relation to the GLS work, the
Indictment alleged that the Defendants misrepresented that
GLS performed surveying work at the World Trade Center site
when in fact DCM performed the surveying work.
respect to harm to the Port Authority, the Indictment stated
that Defendants defrauded the Port Authority when they a)
"fraudulently claimed MBE credit for One WTC and the WTC
Hub in excess of $70 million based on the value of work
Solera/DCM purportedly performed" on the World Trade
Center project; and b) "fraudulently claimed WBE credit
for $6.3 million of surveying and payroll management work GLS
purportedly was performing as a subcontractor to DCM on One
WTC and the WTC Hub. ..." (See Indictment
¶ 12, 12a, 15, 15a.) In language largely tracking the
wire fraud statute, the Indictment also provided:
From in or about 2008 through in or about September 2012, in
the Southern District of New York and elsewhere, [the
Defendants] willfully and knowingly, having devised and
intending to devise a scheme and artifice to defraud, and for
obtaining money and property by means of false and fraudulent
pretenses, representations, and promises, did transmit and
cause to be transmitted by means of wire. . . writings,
signs, signals, pictures, and sounds for the purpose of
executing such a scheme and artifice, to wit, Davis and DCM
engaged in a scheme to commit M/WBE fraud in connection with
the World Trade Center Project and in furtherance of such
scheme facsimiles and wire transfers were caused to be sent,
including, but not limited to, fraudulent invoices, e-mails
related to fraudulent invoices, and payments of money.
(See Indictment ¶ 16.)
began on August 1, 2016. The Government called ten witnesses.
The Government's case relied heavily on the testimony of
two cooperating witnesses, Garcia and D'Aloia, owners and
operators Solera and GLS, respectively, with whom Defendants
allegedly conspired to defraud the Port Authority.
Government's most important witness was Johnny Garcia,
the President of Solera. In self-contradictory testimony, Mr.
Garcia testified that he did "basically nothing" on
the WTC project as part of the Solera/DCM JV, (see
Tr. 286), but also testified to doing work on the project,
including, inter alia, interviewing, firing and
managing Solera and Solera/DCM employees, as well as
traveling to Spain (three times) and China to oversee steel
and glass procurement respectively for the One-WTC Tower and
Hub. (See Tr. 433, 531.) Additionally, Mr. Garcia
testified to the genesis of the relationship with Defendants,
prior MBE work he had done on the Goldman Sachs'
building, and his intent throughout the alleged fraudulent
scheme. Garcia testified that he had no intent of
"actually do metal deck erection" and instead
developed his company to be a "pass-through" for
non-minority companies. (See Tr. 220.)
D'Aloia, the President and manager of GLS, testified in a
similarly conclusory manner that she "committed
fraud." (See Tr. 656.) D'Aloia explained
the process that led to her role as the payroll subcontractor
for DCM at the WTC project, (see 676, 679-80,
703-04) as well as the role GLS had in the WTC surveying
work, (see Tr. 704-05, 743-44). She also explained
the complex payroll operation she performed. (See
Government called three Port Authority witnesses: Ida Perich,
the general manager of the Office of Business Diversity and
Civil Rights at the Port Authority; Alan Reiss, executive
manager at the Port Authority and Director of World Trade
Center construction; and Francis Pescetto, a Port Authority
Perich provided an overview of the Port Authority's MWBE
goals. She described the application process for
certification as an MWBE, a process her office
executes, the MWBE monitoring effort in general, and how it
specifically functioned with respect to the One-WTC project.
(See Tr. 75.)
Reiss described the construction process in general on Port
Authority projects, (see Tr. 147), and on the WTC
projects in particular, (see Tr at. 155). Reiss
testified that the WTC projects were completed by Defendants.
(See Tr. 167, 174-75, 184-85, 188-89 ("DCM was
building [One-WTC] satisfactorily. They had a skilled
crew"}, 210.) Mr. Reiss also testified to extra work
that DCM was hired to do on the WTC projects and the
increased costs of the projects over the original $330
million (Hub) and $256 million (One-WTC) lump-sum contracts.
(See Tr. 176). The Port Authority agreed to pay an
additional $153 million on the One-WTC job, bringing the
total price tag to $409 million. (See Tr. 167.) For
the $330 million Hub, the Port Authority agreed to pay $210
million in extra work, bringing the total price tag to $540
million. (See Tr. 174-75.) On direct, Mr. Reiss
seemed to imply that DCM miscalculated the cost of steel and
labor leading to an increase in the price of finishing the
job. (See Tr. 165-66.) Later on cross-examination
and redirect examination, Mr. Reiss clarified this testimony,
however, and explained that the extra money was for
"certain changes to the building that were requested [by
Port Authority] on the way up;" "delays in
construction;" and "bad weather and storms, "
including some "incredible snowstorms some
winters." (See Tr. 210.)
Pescetto, who worked on the WTC Hub project as an office
engineer, described his receiving and reviewing monthly
requisition packages from DCM for the Hub project, which
included DCM's statements of payments to the
subcontractors, Solera/DCM and GLS. (See Tr. 900.)
construction workers who specialize in metal decking
testified for the Government. Thomas Gavaghen, a member of
Ironworkers Local 40 and decking foreman on the One-WTC job,
testified to the metal decking construction process on both
the Tower and the Hub. (See Tr. 599.) Keith Brown, a
seventeen-year employee of DCM Erectors, Local 4 0 member,
and the "walking boss on the WTC site, described the
chain of command on the construction site and explained that
as walking boss he supervised Gavaghen and reported to a DCM
employee, Kevin Murphy, who was the "super" on the
job. He testified on cross that DCM Erectors was definitely
the company employing him at Tower 1. (See Tr. 633.)
Government called two employees of Tishman, the construction
manager on the One-WTC job. Robyn Odita, Tishman
Construction's Affirmative Action Manager explained her
role in supervising the MWBE process for the Goldman Sachs
building in the early 2000s, (see Tr. 641-48), a
project for which Solera/DCM fulfilled its MWBE goals under
its contract with Tishman, (see Tr. 653). Flora
Ramos, the second Tishman employee to testify, is the
Director of Community Relations at Tishman Construction,
(see Tr. 829}, and served as a compliance officer
and affirmative action officer overseeing progress towards
the MWBE goals at the One-WTC site, (see Tr. 830).
Ramos explained the various documents DCM submitted to
Tishman to report its performance towards the Port
Authority's MWBE goals, including certified payrolls,
monthly employment utilization reports, statement of payments
to subcontractors, and a participation plan at the beginning
of the project. (See Tr. 837.)
Kossuth, a surveyor and member of Operating Engineers Local
15 D, was a "party chief" and lead surveyor on the
WTC site. He was employed by GLS during the WTC project. He
explained the surveying process as well as the chain of
command for the surveying work. (See Tr. 869.)
defense called one witness, Jacintha Bobb, a payroll
administrator for DCM from 2001 until 2014. (See Tr.
954.) Ms. Bobb also handled payroll for Solera/DCM. She
testified that a number of people who had roles in the WTC
project were on Solera/DCM's payroll. (See Tr.
August 10, 2016, the jury returned verdicts of guilty against
both Defendants on both the wire fraud and conspiracy to
commit wire fraud charges. (See Verdict Sheet, dated
Aug. 10, 2016 [dkt. no. 69]).
close of the Government's case, the Defendants moved for
acquittal under Fed. R. Crim. P. 29(a). (See Tr.
924; see also Defs.' Ltr., dated Aug. 8, 2016
[dkt. no. 67], at 5.) Defendants submitted a Memorandum of
Law on October 7, 2016 supplementing its pending Rule 29
motion for acquittal and, in the alternative, moving for a
new trial under Fed. R. Crim. P. 33. (See Defs.'
Mem. of Law in Supp. of Post-Trial Mots. ("Mot."),
dated Oct. 7, 2016 [dkt. no. 94].) The Government submitted
its opposition on December 5, 2016. (See Gov't
Mem. Of Law in Opp. To Defs.' Post-Trial Mot.
("Opp."), dated Dec. 5, 2016 [dkt. no. 95].) The
Defendants replied on January 23, 2017. (See
Defs.' Reply Mem. of Law in Supp. of Post-Trial Mots.
("Reply Br."), dated Jan. 23, 2017 [dkt. no. 102].)
Oral argument on the post-trial motions was held on April 26,
2017. (See Oral Argument Transcript ("OA
Tr."), dated Apr. 26, 2017 [dkt. no. 109].) Following
oral argument, the Government submitted a short supplemental
letter-brief. (See Gov't Supp. to Mem. of Law
("Gov't Supp. Br."), dated May 5, 2017 [dkt.
no. 111].) The Defendants replied with a letter-brief of
their own. (See Defs.' Ltr., dated May 9, 2017
[dkt. no. 113].)
29 Motion for Acquittal
Standard of Review
judgment of acquittal pursuant to Federal Rule of Criminal
Procedure 29 must be entered if no "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); United States v.
Guadagna, 183 F.3d 122, 129 (2d Cir. 1999) (citing
United States v. Mariani, 725 F.2d 862, 865 (2d Cir.
1984)). A defendant challenging the sufficiency of the
evidence supporting a conviction faces "a heavy burden,
as the standard of review is exceedingly deferential."
United States v. Binday, 804 F.3d 558, 572 (2d Cir.
2015) (internal quotation marks and citation omitted). The
district 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. Brock, 789 F.3d 60, 63 (2d Cir.
2015) (citing United States v. Coplan, 703 F.3d 46,
62 (2d Cir. 2012)(internal quotation marks omitted)).
inconsistencies. . . revealed on cross-examination" are
for the jury to resolve. United States v.
O'Connor, 650 F.3d839, 855 (2d Cir. 2011)
(internal quotation marks and citation omitted).
"'It is the province of the jury and not of the
court' to determine whether a witness who may have been
'inaccurate, contradictory and even untruthful in some
respects' was nonetheless 'entirely credible in the
essentials of his testimony.'" Id. (quoting
United States v. Tropiano, 418 F.2d 1069,
1074 (2d Cir. 1969), cert, denied, 397 U.S. 1021
(1970)). While the Court will credit all inferences that
could be drawn from the evidence in the favor of the verdict,
specious inferences should not be credited. A jury's
inference must arise from "a logical and convincing
connection between the facts established and the conclusion
inferred." United States v. Gore, 154 F.3d 34,
41 (2d Cir. 1998) (quoting United States v. Salmon,
944 F.2d 1106, 1114 (3d Cir. 1991)(internal quotation marks
district court looks at ""the evidence in its
totality, " and the Government "need not negate
every theory of innocence." United States v.
Autuori, 212 F.3d 105, 114 (2d Cir. 2000); see
also United States v. Glenn, 312 F.3d 58, 63 (2d
Cir. 2002). The court may enter a judgment of acquittal only
if the evidence that the defendant committed the crime
alleged is "nonexistent or so meager that no reasonable
jury could find guilt beyond a reasonable doubt."
Guadagna, 183 F.3d at 130 (internal quotation marks
and citation omitted). "If the evidence viewed in the
light most favorable to the prosecution gives 'equal or
nearly equal circumstantial support to a theory of guilt and
a theory of innocence, ' then *a reasonable jury must
necessarily entertain a reasonable doubt.'"
Glenn, 312 F.3d at 70 (quoting United States v.
Lopez, 74 F.3d 575, 577 (5th Cir. 1996), cert.
denied, 517 U.S. 1228 (1996)).
Fraud and Conspiracy to Commit Wire Fraud-Elements
'essential elements of both [mail and wire fraud]
offenses are '(1) a scheme to defraud, (2) money or
property as the object of the scheme, and (3) use of the
mails or wires to further the scheme.''"
Binday, 804 F.3d at 569 (quoting Fountain v.
United States, 357 F.3d 250, 255 (2d Cir. 2004)).
"To prove conspiracy [to commit wire fraud], the
Government must show that the defendant agreed with another
to commit [wire fraud]; that he 'knowingly' engaged
in the conspiracy with the 'specific intent to commit the
offenses that were the objects of the conspiracy'; and
that an overt act in furtherance of the conspiracy was
committed." United States v. Monaco, 194 F.3d
381, 386 (2d Cir. 1999)(internal quotation marks and
citations omitted)(brackets added).
"scheme to defraud" is the first element of wire
fraud. See United States v. Dinome, 86 F.3d 277, 283
(2d Cir. 1996). Proof of fraudulent intent, or the specific
intent to harm or defraud the victims of the scheme, is an
essential component of the "scheme to defraud"
element. See id.; see also United States v.
Starr, 816 F.2d 94, 98 (2d Cir. 1987). Proof of deceit,
without more, is not sufficient to find a scheme to defraud.
See United States v. Regent Office Supply
Co., 421 F.2d 1174, 1180- 81 (2d Cir. 1970). "It is
not required that the victims of the scheme in fact suffered
harm, but 'the Government must, at a minimum, prove that
defendants contemplated some actual harm or injury to their
victims.'" Binday, 804 F.3d at 569 (quoting
United States v. Novak, 443 F.3d 150, 156 (2d Cir.
Court of Appeals has explained that "a cognizable
harm" sufficient to support a scheme to defraud
"occurs where the defendant's scheme Menies the
victim the right to control its assets by depriving it of
information necessary to make discretionary economic
decisions.'" Binday, 804 F.3d at 570
(quoting United States v. Rossomando, 144 F.3d 197,
201 n.5 (2d Cir. 1998)). However, merely showing that a
victim would not have entered into a discretionary economic
transaction but for the defendant's misrepresentations is
not enough to prove deprivation of the right to control
one's assets, i.e., harm. Id. at 570. The Court
of Appeals in Binday elaborated on the required
standard of proof of economic harm under this "right to
control" theory this way:
The "right to control one's assets" does not
render every transaction induced by deceit actionable under
the mail and wire fraud statutes. Rather, the deceit must
deprive the victim "of potentially valuable economic
information." United States v. Wallach, 935
F.2d 445, 463 (2d Cir.1991). "Our cases have drawn a
fine line between schemes that do no more than cause their
victims to enter into transactions they would otherwise
avoid-which do not violate the mail or wire fraud
statutes-and schemes that depend for their
completion on a misrepresentation of an
essential element of the bargain-which do violate the
mail and wire fraud statutes." United States v.
Shellef, 507 F.3d 82, 108 (2d Cir. 2007).
Thus, we have repeatedly rejected application of the mail
and wire fraud statutes where the purported
victim received the full economic benefit of its bargain.
But we have upheld convictions for mail and wire fraud where
the deceit affected the victim's economic calculus
or the benefits and burdens of the agreement. The
requisite harm is also shown where defendants'
misrepresentations pertained to the quality of services
bargained for, such as where defendant attorneys
"consistently misrepresented to their clients the nature
and quality of the legal services they were providing. . .
for a hefty fee." United States v. Walker, 191
F.3d 326, 335-36 (2d Cir. 1999); accord United States v.
Paccione, 949 F.2d 1183, 1196 (2d Cir. 1991)("Use
of the mails in furtherance of a scheme to offer services in
exchange for a fee, with the intent not to perform those
services, is within the reach of [18 U.S.C.] §
1341.") Lastly, we have repeatedly upheld convictions
where defendants' misrepresentations in a loan or
insurance application or claim exposed the lender or insurer
to unexpected economic risk. See e.g., United
States v. Chandler, 98 F.3d 711, 716 (2d Cir. 1996);
United States v. Dinome, 86 F.3d 277, 284-85 (2d
Cir. 1996); United States v. Rodolitz, 786 F.2d 77,
80-81 (2d Cir. 1986).
Id. at 570-71 (emphasis added).
where "the purported victim received the full economic
benefit of its bargain, " an essential
element of the bargain is not implicated, and thus