United States v. Lebedev
932 F.3d 40
2d Cir.2019Background
- Coin.mx operated an online Bitcoin exchange but concealed its nature from banks and processors by routing transactions through front entities (e.g., the Collectables Club) and falsified merchant descriptions.
- Yuri Lebedev managed Coin.mx IT and set IP addresses and other measures to disguise Coin.mx transactions; he was convicted of wire fraud, bank fraud, and related conspiracy counts.
- Trevon Gross was chairman of HOPE Federal Credit Union (HOPE FCU); he agreed to appoint Collectables Club nominees to the board in exchange for donations and other payments; evidence showed Gross used some donations for personal expenses.
- Kapcharge, a third‑party payment processor tied to Coin.mx associates, wired substantial funds to Hope Cathedral and used HOPE FCU to process large ACH volumes; HOPE FCU was undercapitalized for that business.
- The NCUA examined HOPE FCU; Gross made material omissions/misrepresentations to the examiner; HOPE FCU entered conservatorship and later liquidation with losses the NCUA sought to recover.
- After a joint jury trial, Lebedev and Gross were convicted; Gross received 60 months’ imprisonment and restitution; both appealed raising sufficiency, evidentiary, indictment‑notice, and sentencing arguments.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Sufficiency of evidence for Lebedev's wire/bank fraud and conspiracy convictions | Govt: Misrepresentations deprived banks of the right to control assets and induced banks/processors to handle risky transactions; wires used to further the scheme | Lebedev: His role (IT/disguise) did not harm or risk harm to financial institutions; customers voluntarily bought Bitcoin | Affirmed — viewed in gov't favor, jury reasonably found deprivation of right‑to‑control and intent to obtain funds under banks' custody; elements of §1343 and §1344(2) met |
| Admissibility of accountant Rollins’s testimony (Rule 16 / expert vs summary) | Govt: Rollins was a summary witness applying FIFO to account records, not offering expert opinion requiring disclosure | Gross: Rollins offered expert opinion on accounting methodology without Rule 16 notice | Affirmed — court properly treated Rollins as summary witness, jury instructed he was not an expert; no Rule 16 violation |
| Admissibility of co‑conspirator hearsay after Gross’s falling out (Rule 801(d)(2)(E)) | Govt: Statements were during and in furtherance of the conspiracy; Gross had not withdrawn | Gross: He had withdrawn; later statements therefore inadmissible | Affirmed — factual finding that Gross had not withdrawn was not clearly erroneous; statements admissible |
| Limitation on defense examination of Agent Beyer | Defense: Excluding questioning about an FBI report prevented impeachment of cooperating witness Freundt and violated confrontation rights | Govt: Beyer’s trial testimony did not contradict her report; limited scope sufficient for impeachment | Affirmed — court did not abuse discretion; jury had sufficient facts to assess credibility |
| 404(b) / prior‑act testimony re: insider loans and church bookkeeping | Govt: Testimony was intrinsic and necessary to complete the story that funds were diverted to Gross; not extrinsic 404(b) evidence | Gross: Govt failed to give Rule 404(b) notice for prior‑act evidence; evidence used improperly | Affirmed — evidence was inextricably intertwined with charged offenses and not subject to 404(b) notice rule |
| Constructive amendment / prejudicial variance by introduction of Kapcharge evidence | Gross: Trial proof focused on Kapcharge ACH processing not charged in indictment, altering the charged scheme | Govt: Indictment alleged bribery, obstruction, and conspiracy to transfer control; Kapcharge evidence explained how bribery occurred | Affirmed — no constructive amendment; Kapcharge proof fit within core criminality and did not cause unfair prejudice |
| Witness intimidation / denial of defense witnesses | Gross: Government intimidated HOPE FCU witnesses (e.g., Larkins) through threats and by insisting on independent counsel, depriving him of exculpatory testimony | Govt: Concern about conflicts and potential exposure warranted independent counsel; no bad faith or suppression | Affirmed — Gross failed to show material deprivation, bad faith, or fundamental unfairness |
| Sentencing enhancements & restitution for Gross (leadership, safety/soundness, abuse of trust, restitution causation) | Govt: Enhancements and restitution warranted because Gross led/abetted control transfer, allowed risky ACH processing that jeopardized HOPE FCU, abused trust, and losses flowed from bribery/obstruction | Gross: Challenge to factual basis for leadership role, jeopardy to safety/soundness, abuse‑of‑trust enhancement, and that restitution covered post‑conspiracy conduct | Affirmed — district court’s factual findings not clearly erroneous; restitution and enhancements within discretion |
Key Cases Cited
- United States v. Corbett, 750 F.3d 245 (2d Cir.) (standard for sufficiency review)
- United States v. Coplan, 703 F.3d 46 (2d Cir.) (deference to jury credibility findings)
- Jackson v. Virginia, 443 U.S. 307 (Sup. Ct.) (reasonable‑doubt sufficiency standard)
- United States v. Binday, 804 F.3d 558 (2d Cir.) (wire fraud right‑to‑control theory)
- United States v. Finazzo, 850 F.3d 94 (2d Cir.) (withholding/inaccurate reporting as deprivation of economic information)
- Loughrin v. United States, 573 U.S. 351 (Sup. Ct.) (bank fraud intent under §1344)
- United States v. Carboni, 204 F.3d 39 (2d Cir.) (intrinsic evidence / ‘‘complete the story’’ doctrine)
- United States v. Dove, 884 F.3d 138 (2d Cir.) (constructive amendment and variance standards)