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United States v. Davis

United States District Court, S.D. New York

August 3, 2017

UNITED STATES OF AMERICA,
v.
LARRY DAVIS and DCM ERECTORS, INC. Defendants.

          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 Plaza.

          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.

         TABLE OF CONTENTS

         I. BACKGROUND..................................................4

         A. The Defendants.............................................4

         B. Port Authority MWBE Program................................5

         C. Solera / DCM Joint Venture...................................9

         D. GLS Subcontract...........................................10

         E. The WTC contracts with Port Authority.....................10

         F. The Indictment............................................13

         G. Trial.....................................................15

         H. The Post-Trial Motions....................................19

         II. DISCUSSION.................................................20

         A. Rule 29 Motion for Acquittal.............................20

         1. Standard Of Review....................................23

         2. Wire Fraud and Conspiracy to Commit Wire Fraud-Elements . .............................................23

         3. Sufficiency of the Evidence...........................25

         a. Defendants' misrepresentations did not go to an ..... essential element of the contract.....................42

         i. The Port Authority received the full benefit of its bargain with Defendants....................... 42

         ii. The MWBE sections were not essential elements of the contracts.....................................45

         (a) A breach of the MWBE sections of the contracts were not violations of law......................45

         (b) The MWBE sections of the contracts were merely "aspirational".................................. 46

         b. Defendants' misrepresentations did not expose the Port Authority to potential or actual economic harm ...... 49

         c. Much of the Government's evidence was legally irrelevant...............................................63

         B. Rule 29(d) Conditional Determination of New Trial (Rule 33) ...................................................68

         C. Sufficiency of the Indictment, Constructive Amendment and Variance.................................................... 75

         1. Sufficiency of the Indictment ..........................75

         2. Constructive Amendment/Prejudicial Variance ............ 79

         III. CONCLUSIONS.............................................100

         The 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).

         Defendants 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.

         For the 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.

         I. BACKGROUND

         A. The Defendants

         Defendant Larry Davis is the owner and President of DCM. (See Trial Transcript[1] ("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.)

         DCM won 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.)

         Subsequently, 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 Hub.[2] This contract was priced at $330 million. (See GX-2 at 1.)

         B. Port Authority MWBE Program

         In 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.)

         The 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. 75:21-25.)

         While 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.[3] (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.)

         Port 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.)

         Thus, 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 127-28.)

         At 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 id.)

         C. Solera/DCM Joint Venture

         At some 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").[4] (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.)

         There 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.)

         D. GLS subcontract

         On the 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.)

         In 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.)

         E. The WTC contracts with Port Authority

         The $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.)

         The 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. at 8.)

         The 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. (See id.)

         The 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." (See id.)

         The $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.)

         F. The Indictment

         On 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. § 1349.

         According 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.

         With 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.)

         G. Trial

         Trial 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.

         The 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.)

         Gale 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 Tr. 761-62.)

         The 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 engineer.

         Ms. 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.)

         Mr. 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.)

         Mr. 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.)

         Two 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.)

         The 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.)

         Michael 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.)

         The 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. 956.)

         On 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]).

         H. The Post-Trial Motions

         At the 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].)

         II. DISCUSSION

         A. Rule 29 Motion for Acquittal

         1. Standard of Review

         A 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)).

         "[T]estimonial 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 omitted)).

         The 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)).

         2. Wire Fraud and Conspiracy to Commit Wire Fraud-Elements

         "The '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).

         A "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. 2006)).

         The 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).

         In sum, where "the purported victim received the full economic benefit of its bargain, " an essential element[5] of the bargain is not implicated, and thus the ...


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