United States v. Tzolov
642 F.3d 314
| 2d Cir. | 2011Background
- Butler appeals his conviction in the EDNY on securities fraud, conspiracy to commit securities fraud, and conspiracy to commit wire fraud.
- The district court denied Butler’s venue challenge; Tzolov pled guilty and testified for the government.
- The ARS market failed; the government proved misstatements and falsified confirmations affecting investors.
- Butler and Tzolov operated from Credit Suisse’s Manhattan offices; meetings occurred with investors, some travel began at JFK.
- The government’s venue theory for Counts One and Three rested on conspiratorial overt acts during travel; Count Two relied on acts in the EDNY.
- The court vacates Butler’s Count Two conviction but affirms Counts One and Three and remands for resentencing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether venue was proper for Count Two (securities fraud). | Butler | Butler | Venue improper for Count Two. |
| Whether venue was proper for Counts One and Three (conspiracies). | Butler argued venue improper | Government | Venue proper for Counts One and Three. |
| Whether overt acts in furtherance of a conspiracy can establish venue. | Butler | Government | Overt acts via travel were sufficient to establish venue. |
| Whether preparatory acts (e.g., flights) can establish venue for securities fraud. | Butler | Government | Preparatory acts alone do not establish venue for Count Two. |
| Applicability of Svoboda and Reed to venue analysis. | Butler | Government | Svoboda not controlling for Count Two; Reed factors support venue for conspiracies. |
Key Cases Cited
- United States v. Cabrales, 524 U.S. 1 (1998) (locus delicti based on nature of crime and location of acts constituting it)
- United States v. Rodriguez-Moreno, 526 U.S. 275 (1999) (venue proper where acts constituting offense took place)
- United States v. Beech-Nut Nutrition Corp., 871 F.2d 1181 (2d Cir.1989) (gov't bears burden of proving venue; not an element of crime)
- United States v. Svoboda, 347 F.3d 471 (2d Cir.2003) (preparatory acts generally insufficient; Svoboda not controlling here)
- United States v. Duque, 123 Fed. Appx. 447 (2d Cir.2005) (venue for conspiracy may lie where overt acts occurred (summary order))