United States v. Greenberg
835 F.3d 295
2d Cir.2016Background
- Daniel Greenberg, owner of Classic Closeouts, was convicted after a jury trial of wire fraud, access device fraud, aggravated identity theft, and money laundering for a scheme charging customers’ cards ("Frequent Shopper Club") without authorization, resulting in ~77,000 charges (~$5M).
- FTC filed a civil action in 2009; a receiver attempted to image CCL computers but could not complete imaging; originals remained at premises and were later removed; some forensic data remained in FTC custody.
- Criminal investigation began in 2010; defense counsel told prosecutors in 2012 that Greenberg had backup copies and would provide data; prosecutors obtained FTC images but investigators never recovered complete original server images.
- Greenberg moved to dismiss the superseding indictment (May 2013) for spoliation of evidence (lost/unimaged computer data) and argued inability to establish chain of custody for exculpatory material; district court denied the motion for lack of government bad faith and declined an evidentiary hearing.
- Greenberg also moved to dismiss wire fraud counts claiming a “convergence” defect — the parties deceived (acquiring banks/processors) differed from those injured (cardholders). District court denied that motion; Second Circuit affirmed both rulings.
Issues
| Issue | Plaintiff's Argument (Gov't) | Defendant's Argument (Greenberg) | Held |
|---|---|---|---|
| Whether indictment should be dismissed for spoliation of computer evidence | Government: FTC’s failed imaging was not government bad faith; FBI/DOJ didn’t act in bad faith; available images sufficed | Greenberg: Missing original/imaged data was potentially or materially exculpatory; government acted carelessly or worse; dismissal or hearing required | Denied — dismissal not warranted; defendant failed to show government bad faith under Youngblood/Trombetta; no abuse of discretion in refusing evidentiary hearing |
| Whether wire fraud requires convergence between deceived party and party harmed | Government: Wire fraud targets a scheme to obtain money/property via deception; statute does not require deceived person be same as injured party | Greenberg: Must be convergence — cannot convict where misrepresentations were made to banks/processors while harm fell on cardholders | Held — No convergence requirement; wire fraud convictions may rest on deception of intermediaries that causes loss to others; indictment adequate |
Key Cases Cited
- Arizona v. Youngblood, 488 U.S. 51 (1988) (failure to preserve potentially useful evidence violates due process only upon showing of bad faith)
- California v. Trombetta, 467 U.S. 479 (1984) (two‑prong test for lost evidence: apparent exculpatory value and inability to obtain comparable evidence)
- Illinois v. Fisher, 540 U.S. 544 (2004) (Brady vs. Youngblood distinction; bad faith required for failure to preserve potentially useful evidence)
- United States v. Binday, 804 F.3d 558 (2d Cir. 2015) (standard and review for mail/wire fraud elements and district court discretion)
- United States v. Rastelli, 870 F.2d 822 (2d Cir. 1989) (spoliation relief requires showing government bad faith)
- United States v. Christopher, 142 F.3d 46 (1st Cir. 1998) (wire/mail fraud does not require that deceived party be same as defrauded party)
- United States v. Seidling, 737 F.3d 1155 (7th Cir. 2013) (rejecting convergence requirement for mail fraud)