19 F.4th 66
2d Cir.2021Background
- Jabar and Bowers, officers of nonprofit Opportunities for Kids International (OKI), obtained a UNIFEM grant for a radio project (Voice of Women) and executed a Cooperation Agreement with detailed spending and reporting requirements.
- OKI received an initial $350,000 disbursement; bank records show defendants diverted over $65,000 from the OKI account to repay personal debts and pay personal expenses shortly after the funds were received.
- OKI submitted a quarterly financial report that omitted these personal expenditures; UNIFEM audited and withheld the remaining $150,000.
- IRS and FBI investigations followed; both defendants initially lied to agents about the use of funds and later admitted personal use when confronted with records.
- A jury convicted on wire fraud (Count 4), conspiracy to commit wire fraud (Count 1), and false-statement counts (18 U.S.C. § 1001). The district court granted a Rule 29 judgment of acquittal on the wire-fraud counts but denied acquittal/new-trial relief on the § 1001 counts.
- The Second Circuit reversed the acquittal on the wire-fraud and conspiracy counts, affirmed the § 1001 convictions, and remanded for the district court to consider the defendants’ motion for a new trial on the fraud counts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Sufficiency of evidence for wire fraud and conspiracy (intent to defraud UN) | Evidence (bank records, repayments to creditors, admissions, false reporting) supports an inference defendants intended to deprive UN of proper use/control of funds. | Even if some project work occurred, defendants argue funds were fungible and any personal use didn’t prove intent to harm UN or deprive it of the bargain. | Reversed acquittal: evidence sufficient for a reasonable jury to find fraudulent intent and convict on wire fraud and conspiracy. |
| District court’s failure to issue conditional Rule 29(d) new-trial ruling | Gov’t: district court should have made conditional ruling so appellate court can review both acquittal and new-trial issues. | Defendants did not challenge the absence on appeal; district court treated new-trial motion as moot. | Remanded: district court must consider defendants’ Rule 33 motion for a new trial in the first instance. |
| Sufficiency of evidence for false-statement convictions (§ 1001) | Agent’s investigation could be influenced by defendants’ false representations; statements had tendency to influence inquiry. | Defendants contend statements were immaterial or innocent mistakes/cooperative recantations. | Affirmed: statements were material and jury could find intent to deceive; convictions stand. |
| Suppression/Miranda challenge to Jabar’s interview | Gov’t: interview was non-custodial (voluntary, no restraints, told he could break/leave). | Jabar: interview conducted at secure facility, argued custody triggered Miranda. | Affirmed denial of suppression: no custodial interrogation; statements admissible. |
Key Cases Cited
- United States v. Starr, 816 F.2d 94 (2d Cir. 1987) (distinguishes deceptive inducements that do not alter the bargain’s essential element from fraud that does)
- United States v. Schwartz, 924 F.2d 410 (2d Cir. 1991) (misrepresentations that defeat an essential term of the bargain support fraudulent-intent finding)
- United States v. D’Amato, 39 F.3d 1249 (2d Cir. 1994) (fraudulent intent and contemplated harm explained)
- United States v. Dinome, 86 F.3d 277 (2d Cir. 1996) (scheme need not succeed; contemplated harm suffices for wire fraud)
- United States v. Peroco, 13 F.4th 158 (2d Cir. 2021) (collecting authorities on contemplated harm/right-to-control theories in fraud cases)