United States v. Romano
794 F.3d 317
| 2d Cir. | 2015Background
- Defendants Michael Romano (owner) and William Kearney (sales manager/part owner) ran three coin-selling businesses that sold coins by telephone from ~1990–2008; customers allege widespread misrepresentation of coin grades/values and other deceptive sales practices.
- Government prosecuted both for conspiracy to commit mail and wire fraud (18 U.S.C. § 1349) and conspiracy to commit money laundering (18 U.S.C. §§ 1956(a)(1)(A)(i), 1956(h)); jury convicted both after trial.
- Key evidence: testimony from former salesmen, suppliers, customers; industry expert Scott Schechter (NGC) explaining grading practice; NGC regrades showing many coins the Romano Companies sold were graded lower by NGC than Romano represented; two government numismatic experts (Montgomery and Swiatek) testified on grading and valuation.
- Defendants moved pretrial to exclude expert testimony under Fed. R. Evid. 702 (arguing grading/valuation are too subjective); motion denied after a Daubert hearing. They later moved for a new trial; denied.
- Sentences: Romano sentenced to 240 months (principal); Kearney to 156 months (principal); joint restitution ordered for ~$9.14M and forfeiture ~$32.22M. The government conceded a remand is needed for de novo consideration of magistrate judge reports on restitution and forfeiture.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Admissibility of numismatic expert testimony (Rule 702/Daubert) | Experts assist jury understanding; grading/valuation have accepted industry standards | Grading/valuation are inherently subjective, unreliable, methods not sufficiently replicable | Court affirmed admission; trial court did not abuse discretion—criticisms go to weight, not admissibility |
| Confrontation Clause re: GX 109 (NGC spreadsheet of grades) | Admission permissible; defendants waived Confrontation Clause objection | Admission violated right because individual NGC graders did not testify | Waiver: defendants declined to object at trial; Confrontation claim forfeited |
| Sufficiency of evidence for Kearney's knowing participation in conspiracy | Government: circumstantial and direct evidence (training salesmen, making sales, directing false pitches) supports knowing participation | Kearney: no evidence he knew Romano misgraded coins | Evidence sufficient; jury could infer Kearney knew and actively participated |
| Sentencing: use of gain, multiple-victim enhancement, and magistrate reports (restitution/forfeiture) | Government/PSR used defendants' gain as proxy for loss and applied victim-count enhancement; magistrate recommended restitution/forfeiture | Defendants argued gain cannot substitute for actual loss for victim-count; district court failed to do de novo review of magistrate reports | Court upheld use of gain where actual loss existed but could not reasonably be determined; sentenced within discretion. Remanded for de novo review of magistrate judge recommendations on restitution and forfeiture (including challenge to partial-funds ownership of property). |
Key Cases Cited
- Daubert v. Merrell Dow Pharm., 509 U.S. 579 (reliability gatekeeping for expert testimony)
- Kumho Tire Co. v. Carmichael, 526 U.S. 137 (trial court has broad discretion in assessing expert reliability)
- General Elec. Co. v. Joiner, 522 U.S. 136 (abuse-of-discretion review of expert-admissibility rulings)
- Melendez-Diaz v. Massachusetts, 557 U.S. 305 (Confrontation Clause on forensic reports)
- Jackson v. Virginia, 443 U.S. 307 (standard for sufficiency of evidence review)
- United States v. Skys, 637 F.3d 146 (2d Cir. discussion of victim-count and loss determinations)
- United States v. Kayne, 90 F.3d 7 (1st Cir. recognizing need for expert help in valuing rare coins)