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United States v. Napout

United States District Court, E.D. New York

June 22, 2018

UNITED STATES OF AMERICA,
v.
JUAN ANGEL NAPOUT, et al., Defendants.

          MEMORANDUM & ORDER REGARDING POST-TRIAL MOTIONS (DKTS. 887, 888, 889)

          PAMELA K. CHEN, UNITED STATES DISTRICT JUDGE

         Defendants Juan Angel Napout, Jose Maria Marin, and Manuel Burga (“Defendants”) are among numerous individuals charged with racketeering conspiracy and other offenses allegedly undertaken to enrich themselves by leveraging their various positions in the Federation Internationale de Football Association (“FIFA”); its continental, regional, and national affiliates; and certain sports marketing companies. In the operative indictment (Dkt. 604): (1) Napout was charged with one count of racketeering conspiracy, two counts of wire fraud conspiracy, and two counts of money laundering conspiracy; (2) Marin was charged with one count of racketeering conspiracy, three counts of wire fraud conspiracy, and three counts of money laundering conspiracy; and (3) Burga was charged with one count of racketeering conspiracy. After a six-week trial: (1) Napout was convicted of three counts and acquitted of two counts; (2) Marin was convicted of six counts and acquitted of one count; and (3) Burga was acquitted of the sole count against him.

         Napout and Marin now move under Federal Rule of Criminal Procedure 29 for judgments of acquittal, or, alternatively, for a new trial pursuant to Federal Rule of Criminal Procedure 33. For the reasons stated herein, Napout's and Marin's motions are denied in their entirety.

         BACKGROUND

         A. The Indictments

         On May 20, 2015, a grand jury in the Eastern District of New York returned a 47-count indictment charging 14 individuals, including Marin, with racketeering conspiracy, wire fraud, and money laundering offenses, among other crimes, in connection with alleged bribe payments made to FIFA officials in exchange for valuable broadcasting and marketing contracts. (Dkt. 1.) On November 25, 2015, the grand jury returned a 92-count superseding indictment (“S-1 indictment”) charging sixteen additional defendants, including Napout and Burga, with the same racketeering conspiracy, among other crimes. (Dkt. 102.) On June 14, 2017, the grand jury returned a Second Superseding Indictment (“S-2 indictment”) against Napout, Burga, and Marin, which was the operative indictment for their trial. (Dkt. 604.) The S-2 indictment contained seven counts.

         Count 1 charged Napout, Marin, and Burga with conspiracy to engage in racketeering, in violation of 18 U.S.C. § 1962(c)&(d). The alleged enterprise consisted of FIFA, its six constituent continental confederations, affiliated regional federations, national member associations, and sports marketing companies. As predicate acts, the S-2 indictment alleged wire fraud in violation of 18 U.S.C. § 1343, money laundering and money laundering conspiracy in violation of 18 U.S.C. §§ 1956-57, interstate and foreign travel in aid of racketeering in violation of 18 U.S.C. § 1952, and obstruction of justice and conspiracy to obstruct justice in violation of 18 U.S.C. § 1512. (Dkt. 604 ¶ 123.)

         Counts 2 and 3 charged Napout and Marin with wire fraud conspiracy (Count 2) and money laundering conspiracy (Count 3) in connection with the Copa Libertadores soccer tournament, an annual club soccer tournament organized by FIFA's continental confederation for South America, the Confederacion Sudamerica de Futbol (“CONMEBOL”), of which Defendants were officers.

         Counts 4 and 5 charged Marin with wire fraud conspiracy (Count 4) and money laundering conspiracy (Count 5) in connection with the Copa do Brasil soccer tournament, an annual soccer tournament organized by Brazil's soccer confederation, the Confederacao Brasileira de Futbol (“CBF”), of which Marin was the president between March 2012 and April 2015.

         Counts 6 and 7 charged Napout and Marin with wire fraud conspiracy (Count 6) and money laundering conspiracy (Count 7) in connection with the Copa America soccer tournament, an annual international soccer tournament organized by CONMEBOL.

         B. Pre-Trial Rulings

         The Court made several pre-trial rulings that bear on the present motions. By order dated February 17, 2017, the Court denied Napout's motion to dismiss the S-1 indictment as an impermissible extraterritorial application of the federal racketeering statute, the federal wire fraud statute, and the federal money laundering statute. See United States v. Hawit, No. 15-cr-252, 2017 WL 663542 (E.D.N.Y. Feb. 17, 2017). In denying Napout's motion, the Court held, inter alia, that the S-1 indictment alleged permissible domestic applications of the wire fraud statute and extraterritorial applications of the money laundering statute. See Id. at *4-8. By extension, the Court also held that the S-1 indictment adequately alleged a RICO conspiracy based on domestic wire fraud predicate acts and extraterritorial money laundering predicate acts. See Id. at *9-10. The Court advised the parties, however, that Second Circuit caselaw-most notably, European Community v. RJR Nabisco, Inc., 764 F.3d 129 (2d Cir. 2014), rev'd on other grounds, RJR Nabisco, Inc. v. European Community, 136 S.Ct. 2090 (2016), and Petroleos Mexicanos v. SK Eng'g & Constr. Co., 572 Fed.Appx. 60, 61 (2014) (summary order)-has left undetermined the “domestic” reach of the wire fraud statute, thus putting all parties on notice of the importance of evidence concerning the “domestic” nature of the wire fraud charges against Defendants. See Hawit, 2017 WL 663542 at *5.

         By order dated October 17, 2017, the Court ruled that the government, subject to specific objections at trial, would be permitted to present evidence that Napout and alleged co-conspirators engaged in obstruction of justice to conceal their criminal conduct. See United States v. Napout, No. 15-cr-252, 2017 WL 4685089 at *3-7 (E.D.N.Y. Oct. 17, 2017) (“Napout I”). Among other things, the Court ruled that the government could seek to introduce evidence concerning “the removal of electronic devices from Napout's CONMEBOL office, at Napout's direction, on the morning of Napout's December 3, 2015 arrest in Zurich, Switzerland and the subsequent recovery and search of those devices by U.S. law enforcement.” Id. at *2-7. The Court ruled that evidence in this category was generally admissible, both as evidence of the existence of a RICO conspiracy, as well as evidence of Napout's “consciousness of guilt, ” except that, to the extent the government sought to introduce this evidence to prove the existence of a RICO conspiracy, the government would also need to submit evidence that at least one person involved in the obstruction, other than Napout, was a member of the charged conspiracy prior to the alleged obstruction. Id. at *5-7 & n.7. The Court also ruled that evidence in this category was not unduly prejudicial, because the “acts of obstruction are really no different than Defendants' alleged acts of bribery, wire fraud, and money laundering: they all involve non-violent acts of dishonesty, deceit, and concealment.” Id. at *7.

         Jury selection in Defendants' trial began on November 6, 2017. On November 8, 2017, before the end of jury selection, the Court ruled from the bench on an omnibus motion in limine by the government (Dkt. 718). Among other things, the Court ruled, over Defendants' objections, that certain covertly-recorded audiotapes proffered by the government would be admissible at trial, so long as the government laid the proper evidentiary foundation. (Hr'g Tr. 55-127, Nov. 8, 2017.) The Court also ruled that evidence and argument about foreign law, i.e., whether commercial bribery was illegal in Defendants' home countries, would be categorically excluded from the trial, holding that the evidence would generally not be relevant in this case under Federal Rule of Evidence (“FRE”) 401, except for the following narrow purpose: for purposes of a charge of honest services wire fraud, a defendant could potentially “defend on [the element of] the intent to violate [his] fiduciary duty based on saying [he] never saw the [FIFA] rules, . . . no one told [him] about the [FIFA] rules, and . . . [he] assumed that [the FIFA rules] were somehow consistent with what [his] country allow[s] or doesn't allow and, therefore, [he] didn't have the intent or belief that [he] was violating [his] fiduciary duty as defined by the FIFA code[.]” (Id. at 90.) However, the Court further held that evidence of foreign law would be inadmissible at trial even for this limited purpose because, under FRE 403, the risk of confusing the jury and the risk of jury nullification substantially outweighed the probative value of any evidence of foreign law. (Id. at 90-91.)

         On November 11, 2017, before the presentation of opening statements, the Court issued a written order addressing several remaining evidentiary matters. (Dkt. 796.) In relevant part, the order denied Marin's motion in limine to preclude a government expert, Dr. Stefan Szymanski, from offering any opinion testimony concerning the economic effects of corruption (Dkt. 732), and denied Napout's motion in limine to preclude the government from introducing at trial certain WhatsApp text messages between Napout and co-conspirator Alejandro Burzaco, as to which Napout's counsel had asserted work product protection (Dkt. 786; see also Dkt. 816 (Hr'g Tr., Nov. 9, 2017)). With respect to Dr. Szymanski, the Court ruled that Dr. Szymanski's proffered testimony satisfied the requirements of FRE 702 and Daubert, and held that Defendants would suffer no prejudice from allowing Dr. Szymanski's testimony in any event. (Dkt. 786 at 4-5.) With respect to Napout's WhatsApp text messages with Burzaco, the Court ruled that the requirements of work product protection were not satisfied because the text messages themselves were written by two non-lawyers and not in anticipation of litigation or trial.[1] (Id. at 5-9.)

         C. Rulings During Trial

         During the government's case in chief, [2] the Court made additional rulings that Napout and Marin now contest in their post-trial motions. With respect to the admission of evidence concerning foreign law, on December 1, 2017, the Court sua sponte advised the parties that it would reconsider its prior order excluding all evidence of foreign law, and invited Defendants to make proffers about the specific evidence of foreign law they sought to introduce. (Trial Tr. (“Tr.”) 2620-2622.) On December 8, 2017-still during the government's case in chief-the Court held a hearing to discuss the evidence proffered by Defendants. At the hearing, the Court ruled that the specific foreign-law evidence proffered by Defendants was inadmissible under FRE 401 and FRE 403. (Tr. 3460-3617.) The Court also noted, however, that if any of the three Defendants chose to testify at trial, he would not be precluded from testifying as to his own beliefs about foreign law and how those beliefs informed his understanding of the duties he owed to FIFA or another relevant soccer organization.[3] (Id. at 3603-3604, 3616.) No. Defendant testified at trial, and none of the Defendants proffered any additional evidence of foreign law beyond the forms of evidence deemed inadmissible during the December 8, 2017 hearing.

         During its case in chief, the government moved for the admission of certain documents seized by Brazilian law enforcement from a safe in the offices of a Brazilian sports media company, Klefer Producoes E Promocoes Ltda. (“Klefer”). (Dkt. 826.) Among the documents seized were notes allegedly handwritten by one of Marin's co-conspirators, documenting bribe payments made to Marin and another co-conspirator (Marco Polo Del Nero) in exchange for valuable media contracts related to the Copa America tournament and the Copa do Brasil tournament. (Govt. Exhibit (“GX”) 307.) Marin objected to the admission of the handwritten Klefer documents (GX 307, GX 308) on the ground that the government had failed to properly authenticate them. (Dkt. 825.) The Court ruled, under FRE 901(a), that the government had authenticated the documents by a preponderance of the evidence, and that the evidentiary weight, if any, to be given to the documents was for the jury to decide. (Tr. 2652-2653.)

         At the end of the government's case in chief, Special Agent Steven Berryman of the Internal Revenue Service (“IRS”) gave testimony concerning the government's investigation of corruption within FIFA generally and Defendants' corrupt conduct specifically. During cross-examination, Marin's counsel sought to question Berryman about his understanding of the role of then-CBF president Marco Polo Del Nero, i.e., whether Del Nero was still president. (Tr. 3760-3765.) Marin sought to elicit from Berryman the fact that, despite allegations and evidence (introduced at Defendants' trial) that Del Nero had received bribe payments by virtue of his position as the president of the CBF, FIFA had neither removed Del Nero from his position nor instituted disciplinary proceedings against him. (Tr. 3764, 3778-3779.) After hearing argument at sidebar, the Court sustained the government's objection to that line of questioning, both on the ground that the questions called for hearsay (Tr. 3766, 3775-3776), and because, under FRE 403, the prejudicial effect of any such testimony would substantially outweigh its minimal probative value (Tr. 3771-3772, 3777).

         D. The Verdict

         On December 22, 2017, after five days of deliberation, the jury returned a verdict as to Napout and Marin.[4] The jury convicted Napout of RICO conspiracy (Count One), conspiracy to commit wire fraud in connection with the Copa Libertadores soccer tournament (Count Two), and conspiracy to commit wire fraud in connection with the Copa America soccer tournament (Count Six). The jury acquitted Napout of conspiracy to commit money laundering in connection with the Copa Libertadores soccer tournament (Count Three), and conspiracy to commit money laundering in connection with the Copa America soccer tournament (Count Seven). The jury convicted Marin of RICO conspiracy (Count One), conspiracy to commit wire fraud in connection with the Copa Libertadores soccer tournament (Count Two), conspiracy to commit money laundering in connection with the Copa Libertadores soccer tournament (Count Three), conspiracy to commit wire fraud in connection with the Copa do Brasil soccer tournament (Count Four), conspiracy to commit wire fraud in connection with the Copa America soccer tournament (Count Six), and conspiracy to commit money laundering in connection with the Copa America soccer tournament (Count Seven). The jury acquitted Marin of conspiracy to commit money laundering in connection with the Copa do Brasil tournament (Count Five). On December 26, 2017, the jury returned its verdict as to Burga, finding him not guilty of the sole count for which he was on trial. (Dkt. 874.)

         E. Napout's and Marin's Post-Trial Motions

         On January 22, 2018, Marin and Napout moved separately for judgments of acquittal pursuant to Federal Rule of Criminal Procedure 29, or, alternatively, for a new trial pursuant to Federal Rule of Criminal Procedure 33. (Dkts. 887 (“Marin Br.”) (omnibus brief), 888 (“Napout R29 Br.”), 889 (“Napout R33 Br.”).) The government filed an omnibus memorandum in opposition on February 21, 2018. (Dkt. 898 (“Govt. Br.”).) Marin and Napout filed reply briefs on March 24, 2018. (Dkts. 909 (“Marin Reply Br.”), 910 (“Napout R29 Reply Br.”), 911 (“Napout R33 Reply Br.”).)

         LEGAL STANDARDS

         A. Federal Rule of Criminal Procedure 29

         Under Rule 29, “the court[, ] on the defendant's motion[, ] must enter a judgment of acquittal of any offense for which the evidence is insufficient to sustain a conviction.” Fed. R. Crim. P. 29(a). “The test for sufficiency . . . is whether a rational jury could conclude beyond a reasonable doubt that a defendant is guilty of the crime charged.” United States v. Eppolito, 543 F.3d 25, 45 (2d Cir. 2008) (quotation omitted). The Court must make this determination with “the evidence against a particular defendant . . . viewed in a light that is most favorable to the government . . . and with all reasonable inferences . . . resolved in favor of the government.” Id. (quotation omitted). In other words, a court should deny a defendant's motion for acquittal if, “after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.” United States v. Espaillet, 380 F.3d 713, 718 (2d Cir. 2004) (quoting Jackson v. Virginia, 443 U.S. 307, 319 (1979)) (emphasis in Jackson). To view the evidence in “the light most favorable to the government, ” the court must “credit[] every inference that the jury might have drawn in favor of the government, ” United States v. Temple, 447 F.3d 130, 136-37 (2d Cir. 2006), and “resolve all issues of credibility in the government's favor, ” United States v. Canady, 126 F.3d 352, 356 (2d Cir. 1997). To be sure, the court “must also be satisfied that the inferences are sufficiently supported to permit a rational juror to find that [each] element . . . is established beyond a reasonable doubt.” United States v. Triumph Capital Grp., Inc., 544 F.3d 149, 159 (2d Cir. 2008). However, “it is the task of the jury, not the court, to choose among competing inferences that can be drawn from the evidence.” United States v. Jackson, 335 F.3d 170, 180 (2d Cir. 2003). Furthermore, “[t]his ‘traditional deference accorded to a jury's verdict is especially important when reviewing a conviction for conspiracy . . . 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.'” Eppolito, 543 F.3d at 46 (quoting Jackson, 335 F.3d at 180).

         B. Federal Rule of Criminal Procedure 33

         Under Rule 33, “[u]pon the defendant's motion, the court may vacate any judgment and grant a new trial if the interest of justice so requires.” Fed. R. Crim. P. 33(a). In general, “a motion for a new trial ‘should not be granted unless the trial court is convinced that the jury has reached a seriously erroneous result or that the verdict is a miscarriage of justice.'” Smith v. Carpenter, 316 F.3d 178, 183 (2d Cir. 2003) (quoting Atkins v. New York City, 143 F.3d 100, 102 (2d Cir. 1998)). In making this determination, the court “is not required to view the evidence in the light most favorable to the government, ” United States v. Lopac, 411 F.Supp.2d 350, 359 (S.D.N.Y. 2006), but instead must “examine the entire case, take into account all facts and circumstances, and make an objective evaluation[, ]” United States v. Ferguson, 246 F.3d 129, 134 (2d Cir. 2001). The court may “weigh the evidence” for itself, “and in so doing evaluate for itself the credibility of the witnesses, ” United States v. Sanchez, 969 F.2d 1409, 1413 (2d Cir. 1992), but the court “must strike a balance between weighing the evidence and credibility of witnesses and not ‘wholly usurping' the role of the jury, ” Ferguson, 246 F.3d at 133 (quoting United States v. Autuori, 212 F.3d 105, 120 (2d Cir. 2000)). Ultimately, the court should order a new trial under Rule 33 if “it would be a manifest injustice to let the guilty verdict stand.” Sanchez, 969 F.2d at 1414.

         DISCUSSION

         Napout and Marin move separately for judgments of acquittal under Rule 29 or, alternatively, for a new trial pursuant to Rule 33. In their motions for acquittal, Napout and Marin both argue that the government failed to prove certain elements of the crime of conspiracy to commit honest services fraud. Accordingly, the Court begins with a recitation of the elements of that crime.

         A. Conspiracy to Commit Honest Services Fraud

         As the Second Circuit recently explained, “[a] person commits wire fraud when, ‘having devised or intending to devise any scheme or artifice to defraud,' he uses interstate wires ‘for the purpose of executing such scheme or artifice.'” United States v. Halloran, 821 F.3d 321, 337 (2d Cir. 2016) (quoting 18 U.S.C. § 1343). Further, the honest-services fraud statute, 18 U.S.C. § 1346, defines the term “scheme or artifice to defraud” to include “a scheme or artifice to deprive another of the intangible right of honest services, ” 18 U.S.C. § 1346, “which the Supreme Court in turn has held to encompass ‘only bribery and kickback schemes.'” Halloran, 821 F.3d at 337 (quoting Skilling v. United States, 561 U.S. 358, 368 (2010)).

         In the post-Skilling era, to prove a crime of honest services fraud, the government must prove that a defendant (i) owed a fiduciary duty to not accept bribes or kickbacks in exchange for an official act, (ii) knowingly breached that duty by accepting a bribe or kickback in exchange for an official act, (iii) knowingly made a material misrepresentation or omission to the person or entity to whom the duty was owed in furtherance of his receipt of the bribe or kickback, and (iv) made use of the wires in furtherance of his receipt of the bribe or kickback. See Halloran, 821 F.3d at 337 (confirming that “a violation of a fiduciary duty” is an element of honest-services fraud (citing Skilling, 561 U.S. at 368)); United States v. Rybicki, 354 F.3d 124, 146-47 (2d Cir. 2003) (holding that a “material” misrepresentation or omission is an element of honest-services fraud)[5]; see also Tr. 4600-4611 (Jury Instructions).

         In the case of a conspiracy to commit honest services fraud, the government must prove that two or more persons entered into an unlawful agreement, the aims of which included the crime of honest services fraud (as defined above), and that the defendant knowingly and intentionally joined and participated in the conspiracy. United States v. Valle, 807 F.3d 508, 515-16 (2d Cir. 2015).

         B. Napout's Motion for Acquittal

         Napout argues that he should be acquitted of all counts of which he was convicted- including his conviction for conspiracy to commit racketeering[6]-on two grounds. First, Napout argues that “the government failed to establish that Mr. Napout's receipt of any [personal] payments . . . resulted (or would have resulted) in any identifiable harm to FIFA or any confederation within the FIFA umbrella.”[7] (Napout R29 Br. at 1.) Second, Napout argues that “the government failed to present sufficient evidence to support [an] extraterritorial application” of the wire fraud statute or the racketeering statute. (Id. at 2.)

         1. Napout's “Absence of Identifiable Harm” Argument

         For purposes of his motion for acquittal, Napout does not challenge the sufficiency of the evidence on most of the elements of the crime of honest services fraud. Napout assumes that the government presented sufficient evidence to prove that Napout accepted or agreed to accept personal payments in exchange for official acts-namely, the awarding of valuable contract rights-in his position as a FIFA official. (Id. at 1, 12.) Napout further assumes that his acceptance or agreement to accept such personal payments was a violation of his fiduciary duty to FIFA, as embodied in the FIFA code of ethics. (Id. at 12.)[8] Napout argues, however, that he is nonetheless entitled to an acquittal because the evidence failed to establish that “the payment of alleged ‘bribes' would have injured FIFA or CONMEBOL by depriving those organizations of monies that would otherwise have been paid in exchange for contract rights.” (Id. at 12.) Thus, Napout contends, the government failed to establish an element of honest services fraud, which defeats both of Napout's honest services fraud convictions (Counts Two and Six).

         The flaw in Napout's argument, however, is that the crime of honest services fraud does not require a showing of pecuniary harm to the victim. Indeed, as the Second Circuit stated in Rybicki, “actual or intended economic or pecuniary harm to the victim need not be established” to prove a crime of honest services fraud. Rybicki, 354 F.3d at 145. Rather, the crime of honest services fraud must involve, among other things, a misrepresentation or omission that is “material” to the person who is defrauded of an intangible right of honest services-that is, a misrepresentation or omission that would “naturally lead to or is capable of leading a reasonable employer to change its conduct.” Id.[9] Accordingly, Napout's motion for a judgment of acquittal based on the government's failure to prove actual or intended pecuniary “harm” to FIFA is without merit.

         Moreover, even if the government were required to prove that FIFA and its confederations suffered pecuniary harm as a result of Napout's and other FIFA officials' receipt of bribe payments, the Court would find that the government's evidence was sufficient. At trial, the government's expert, Dr. Szymanski, was qualified under FRE 702 and Daubert to testify as an expert in the business of sports with an emphasis on the sport of soccer. (Tr. 159-164, 195.)[10] Among other things, Dr. Szymanski testified about the sale of “broadcast rights” for international soccer competitions, including the Copa America and Copa Libertadores. (Tr. 172-177.) Based on his examination of the market for broadcasting rights in international soccer, Dr. Szymanski testified that, in recent years, broadcasting rights have become “by far the most important” asset that an international soccer organization owns. (Tr. 175.) Dr. Szymanski identified “two immediate effects” of personal payments made to officials who have authority over the sale of broadcasting rights on behalf of international soccer organizations. (Tr. 191, 198.) First, because sports marketing companies typically have a specified amount they are willing to spend on broadcasting rights, “if some of that budget is going in the form of bribes to officials and executives, then that's less money for the soccer organization.” (Tr. 191.) When a sports media company pays a bribe to a soccer official in exchange for the award of broadcasting rights, the amount paid to the soccer official is “lost [by the soccer organization] . . . directly from the bribe.” (Tr. 192.) Second, when a market for broadcasting rights is influenced by secret bribe payments, competitors in the market are “not likely to enter into competition to win the [media] right[s], so that the total amount paid is going to be less than you would get in a competitive environment.” (Tr. 191.)

         Napout argues that Dr. Szymanski's testimony concerning the effects of bribe payments on media right contracts was insufficient to establish materiality because his testimony was “not about any of the facts of this case.” (Dkt. 910 at 6.) While Napout is correct that Dr. Szymanski did not review any of the specific media-rights contracts at issue in this case, or CONMEBOL's historical financial data, to prepare, for example, a statistical analysis isolating the financial impact of the specific bribe payments at issue in this case on CONMEBOL (Tr. 197-204), that does not render his testimony insufficient to establish harm to the organization. The economic principles that Dr. Szymanski explained based on his examination of the market for sports media rights-in particular, the principle that bribe payments made to a soccer official in exchange for the awarding of a valuable contract right directly translates into “less money for the soccer organization”- provided the jury with a sufficient basis on which to conclude that the specific bribe payments in this case resulted in lower contract prices for the relevant soccer organizations. Indeed, although Napout claims that a jury finding on that basis would be “mere speculation” (Dkt. 910 at 6-7), the jury was within its discretion to find materiality in this case based on the specific contracts presented and the economic principles set forth by Dr. Szymanski.

         Accordingly, Napout is not entitled to acquittal on the basis of the government's alleged failure to prove “harm” or materiality.[11]

         2. Napout's Extraterritoriality Argument

         Napout moves for a judgment of acquittal on the ground that his convictions for wire fraud conspiracy (Counts Two and Six) and racketeering conspiracy (Count One) are invalid because they were based on an improper extraterritorial application of the relevant statutes. In large part, Napout's motion for acquittal on this ground reiterates the same arguments he made in connection with his motion to dismiss the indictment, which the Court denied by order dated February 7, 2017. See Hawit, 2017 WL 663542, at *4-5. Napout now argues, however, that even if the government adequately alleged a domestic application of the relevant statutes, the government did not present evidence sufficient to establish such a domestic application.

         a. Wire Fraud Conspiracy

         As the Court explained in its February 7, 2017 order, the federal wire fraud statute, 18 U.S.C. § 1343, does not have extraterritorial application. Id. at *4 (citing RJR Nabisco, 764 F.3d at 140-41). Rather, the wire fraud statute applies “domestically” to schemes to defraud that have a sufficient connection to the United States, although the scheme may also involve foreign conduct. Id. (citing RJR Nabisco, 764 F.3d at 141-43, and Petroleos Mexicanos, 572 Fed.Appx. at 61).

         Neither the Supreme Court nor the Second Circuit has established a definitive test for the domestic reach of the federal wire fraud statute. Indeed, both courts have passed on the opportunity to propound such a test. See RJR Nabisco, 764 F.3d at 141 (“We need not now decide precisely how to draw the line between domestic and extraterritorial applications of the wire fraud statute . . . .”); RJR Nabisco, 136 S.Ct. at 2105 (reversing and remanding without providing guidance on the domestic reach of the wire fraud statute). Therefore, to determine the domestic reach of the wire fraud statute in the absence of a specific test, the Court must “look[] to the statute's focus, ” and “[i]f the conduct relevant to the statute's focus occurred in the United States, then the case involves a permissible domestic application even if other conduct occurred abroad; but if the conduct relevant to the focus occurred in a foreign country, then the case involves an impermissible extraterritorial application regardless of any other conduct that occurred in U.S. territory.” RJR Nabisco, 136 S.Ct. at 2101.

         In the February 7, 2017 order, the Court observed that the Supreme Court's decision in RJR Nabisco, and the Second Circuit's decision in Petroleos Mexicanos, provide guideposts in determining the domestic reach of the wire fraud statute. Relying on the Supreme Court's decision in RJR Nabisco, the Court rejected Napout's argument that the wire fraud statute can be applied “domestically” only if the relevant fraud scheme has its focus in the United States. Hawit, 2017 WL 663542, at *5. At the same time, relying on the Second Circuit's decision in Petroleos Mexicanos, which held that “three minimal contacts” with the United States were insufficient to establish a domestic application of the wire fraud statute, 572 Fed.Appx. at 61, the Court expressed skepticism of the government's position that “nothing more” than a single transmission across U.S. wires is sufficient to establish a domestic application of the wire fraud statute. Hawit, 2017 WL 663542, at *5. Ultimately, without propounding a general test for the domestic reach of the wire fraud statute, the Court held that the government had adequately alleged domestic wire fraud as to Napout, “regardless of whether the correct test is the bright-line test proposed by the Government or the more holistic analysis implied by Petroleos Mexicanos.” Id.

         During the trial, the government presented extensive evidence of the domestic conduct involved in the wire fraud conspiracies alleged in the S-2 indictment. As summarized in the government's brief, the government presented evidence that Napout and/or his co-conspirators met in the United States in furtherance of the charged conspiracies, maintained bank accounts in the United States to pay and receive bribes in connection with the Copa Libertadores and the Copa America tournaments in particular, [12] maintained businesses in the United States that were used to further the charged conspiracies, and used the United States' financial system to clear U.S. dollar transactions involved in the charged conspiracies. (See Govt. Br. at 14-16.) In addition, with respect to the Copa Libertadores scheme (Count Two), the government presented evidence that Napout and his co-conspirators aimed to generate profits from the sale of broadcasting and other commercial rights in the United States specifically. (Tr. 180-183, 373-374, 481-483.) Further, with respect to the Copa America scheme (Count Six), the government presented evidence that Napout and his co-conspirators conspired to make and receive bribe payments in connection with a soccer tournament that would be played and broadcasted in the United States. (Tr. 2522-2525, 2539-40.)

         Toward the end of the government's case in chief, the Court distributed to the parties proposed jury instructions. In describing the elements of wire fraud, the draft instructions addressed the extraterritoriality issue as follows:

It is not necessary that all or most of the wire communications involved in the alleged scheme to defraud were sent to, from, or within the United States. However, for the wire-use element to be satisfied, the scheme to defraud must make substantial use of wire communications that pass between two or more states or it must pass between the United States and a foreign country.

(Dkt. 847 at 45.) Thereafter, in a charge conference, the Court revised this section of the proposed charges by replacing the phrase “substantial use” with the phrase “more than minimal use.” (Tr. 4177.) Thus, the final instructions to the jury stated, in relevant part:

It is not necessary that all or most of the wire communications involved in the alleged scheme to defraud were sent to, from, or within the United States. However, for the wire-use element to be satisfied, the scheme to defraud must make more than minimal use of wire communications that pass between two or more states or between the United States and a foreign country.

(Tr. 4611.)

         At no time did Napout object to the Court's proposed instructions concerning the domestic contacts required to prove a domestic wire fraud conspiracy. (See, e.g., Tr. 4177-4179.) Nor does Napout argue now that the evidence at trial failed to meet the domestic nexus requirement described in the instructions given to the jury. Instead, in his motion for a judgment of acquittal, Napout argues that a different legal standard than the one charged to the jury should be applied to determine whether the evidence was sufficient to sustain a domestic application of the wire fraud statute. Specifically, Napout asks, for the first time, that the Court apply the test for domestic wire fraud adopted by the Honorable Nicolas G. Garaufis in United States v. Gasperini, No. 16-cr-441 (NGG), 2017 WL 2399693 (E.D.N.Y. June 1, 2017).[13] There, the court followed two district courts in holding that a “domestic” application of the wire fraud statute has three requirements: “(1) a defendant or coconspirator commits a substantial amount of conduct in the United States, (2) the conduct is integral to the commission of the scheme to defraud, and (3) at least some of the conduct involves the use of U.S. wires in furtherance of the scheme to defraud.” Id. at *8 (citing United States v. All Assets Held at Bank Julius, No. 04-cv-798 (PLF), 2017 WL 1508608 (D.D.C. Apr. 17, 2017), and United States v. Prevezon Holdings, Inc., 122 F.Supp.3d 57, 71-72 (S.D.N.Y. 2015)). Napout argues that, under this test for the domestic scope of the wire fraud statute, the evidence introduced at trial was insufficient to support his wire fraud convictions.

         The Court finds that Napout's arguments under Gasperini are without merit for two reasons. First, Napout's claim that the evidence at trial was insufficient to sustain a domestic application of the wire fraud statute is based on a legal standard that was neither articulated to the jury, nor asserted by Napout before or during his trial. Had Napout wanted to instruct the jury to apply the three-part Gasperini test for domestic wire fraud, he was required to object to the Court's instruction before the jury was charged and to notify the Court of the Gasperini decision-neither of which Napout did.[14] Napout cannot now launch a backdoor attack on the Court's jury instructions in the form of a Rule 29 motion challenging the sufficiency of evidence. Second, as the government demonstrated in its opposition brief, the evidence presented at trial was more than sufficient to satisfy the three-part test set forth in Gasperini. As summarized above and in the government's brief (Govt. Br. at 14-18), in furtherance of the Copa Libertadores and Copa America schemes, Napout and his co-conspirators met in the United States, maintained bank accounts in the United States, maintained businesses in the United States, transmitted and received bribe payments through the United States, and targeted broadcasting audiences in the United States. Under the three-part test in Gasperini, these domestic contacts constituted (1) a substantial amount of conduct in the United States, which was (2) integral to the commission of the bribe conspiracies in question, and (3) involved more than a de minimis use of the U.S. wires. 2017 WL 2399693, at *8.

         Accordingly, the Court rejects Napout's contention that the evidence was insufficient ...


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