United States v. Finazzo, 850 F.3d 94

Finazzo, a former Aéropostale merchandising executive, and Dey controlled South Bay Apparel and related entities that supplied Aéropostale under a scheme.
Finazzo caused Aéropostale to pay South Bay over $350 million between 1996 and 2006, with kickbacks routed to Finazzo through C&D and related entities.
The government charged 1 conspiracy count to violate the Travel Act and 14 counts of mail fraud plus 1 count of wire fraud; Dey pleaded guilty to Travel Act conspiracy.
The district court sentenced Finazzo to 8 years on substantive counts and 5 years on the conspiracy count, with a joint restitution order of about $18.7 million, later adjusted.
The jury found Finazzo guilty on all counts, but with the conspiracy tied to intent to deprive the company of money and/or the right to control its assets; Finazzo challenges only the mail and wire fraud verdicts.
The court affirmed the right-to-control instructions and the sufficiency of the evidence, but vacated and remanded the restitution order for Finazzo and Dey.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether 'right to control' is valid property for mail/wire fraud	Finazzo: no obtainability; right to control not property	Finazzo: obtainability required by Sekhar to sustain conviction	Right to control constitutes valid property; obtainability not required
Sufficiency of evidence for depriving of right to control assets	Evidence shows Finazzo controlled pricing/vendor selection harming Aéropostale	Challenge insufficient to prove tangible harm from right-to-control theory	Sufficient evidence of tangible economic harm and intent to defraud
Restitution under MVRA: use of defendant's gains vs victim's loss	Direct correlation between kickbacks and loss supports restitution amount	Gain not necessarily equal to loss; methodology flawed	Remanded to reassess direct correlation and calculation of loss
Whether the district court erred in applying MVRA to counts	MVRA applies to conspiracy to defraud and related wire/mail fraud	Potentially improper application for right-to-control counts	Court affirmed applicability but remanded restitution calculations

Scheidler v. National Organization for Women, Inc., 537 U.S. 393 (U.S. 2003) (requires obtainability in Hobbs Act extortion; distinguishes mail/wire fraud)
Porcelli v. United States, 404 F.3d 157 (2d Cir. 2005) (mail/wire fraud does not require obtainability)
Sekhar v. United States, 133 S. Ct. 2720 (2013) (obtainability required for Hobbs Act extortion; not extended to mail/wire fraud)
Wallach v. United States, 935 F.2d 445 (2d Cir. 1991) (right to control theory premised on deprivation of valuable information)
Mittelstaedt v. United States, 31 F.3d 1208 (2d Cir. 1994) (tangible-harm requirement for right-to-control theory)
Dinome v. United States, 86 F.3d 277 (2d Cir. 1996) (instruction on right to control evaluated for potential prejudice)
Viloski v. United States, 557 F. App’x 28 (2d Cir. 2014) (upheld right-to-control instruction emphasizing economic information)
Binday v. United States, 804 F.3d 558 (2d Cir. 2015) (right-to-control required cognizable economic harm)
Zangari v. United States, 677 F.3d 86 (2d Cir. 2012) (direct correlation whether gain equals victim loss for restitution)
Berardini v. United States, 112 F.3d 606 (2d Cir. 1997) (direct correlation between defendant's gain and victim's loss recognized)
Starr v. United States, 816 F.2d 94 (2d Cir. 1987) (intent to harm required beyond receipt of value for service)
Gamma Tech Indus., Inc. v. United States, 265 F.3d 917 (9th Cir. 2001) (kickbacks may inflate charges to maintain scheme profitability)