993 F.3d 104
2d Cir.2021Background
- Darcy Wedd was COO/then CEO of Mobile Messenger, an aggregator that routed premium SMS (PSMS) billing and received a share of revenue.
- From ~2011–2013 Wedd allegedly participated in two auto-subscribing schemes (with Tatto Media and companies tied to Eugeni Tsvetnenko) that enrolled consumers in paid text services without consent, producing recurring charges on phone bills.
- Superseding indictment charged Wedd with conspiracy and substantive wire fraud, two counts of aggravated identity theft under 18 U.S.C. § 1028A, and money‑laundering conspiracy; two earlier trials ended in mistrials; Wedd was convicted at the third trial.
- Key government witnesses (cooperating insiders) testified that Wedd knew of auto‑subscribing, discussed splits and concealment, received payments, and took steps that could insulate him from direct acknowledgment of the fraud; Wedd denied knowing participation.
- The district judge denied Wedd’s request to reassign the retrial judge, gave a conscious‑avoidance instruction over objection, and denied motions to dismiss the §1028A counts and for acquittal; Wedd appealed.
Issues
| Issue | Plaintiff's Argument (Gov't) | Defendant's Argument (Wedd) | Held |
|---|---|---|---|
| Recusal under 28 U.S.C. § 455(a) | No appearance of partiality; judge’s comments were routine and based on proceedings | Judge’s comments about relative culpability, post‑mistrial jury contact, sentencing remarks, and evidentiary rulings created an appearance of bias — reassignment warranted | No error (plain‑error standard). Judge’s remarks arose from case proceedings and did not show deep‑seated bias; denial of reassignment affirmed |
| Jury instruction on conscious avoidance | Instruction was proper because Wedd denied knowledge and trial evidence supported awareness of a high probability of fraud and steps to avoid confirmation | No factual predicate; charge should not have been given | Proper. Evidence permitted a rational juror to find conscious avoidance; even if erroneous, any error was harmless given overwhelming evidence of actual knowledge |
| Indictment pleading of aggravated identity theft (§ 1028A) | Indictment tracked statutory language and gave approximate time/place—sufficient | Indictment failed because auto‑subscribing did not constitute a “use” of a means of identification | Proper. Indictment adequate; court should not resolve factual sufficiency at pleading stage |
| Sufficiency of evidence on § 1028A ("use" of means of identification) | "Use" has its ordinary, expansive meaning — to employ or avail oneself of a means of identification to facilitate fraud; phone numbers were used to effect subscriptions | "Use" requires impersonation or acting in another’s name; merely charging legitimately obtained numbers cannot trigger §1028A | Affirmed. Court adopted ordinary meaning of "use" (employ/avail oneself); evidence showed phone numbers were used during and in relation to the fraud, so sufficiency and §1028A convictions stand; vagueness claim rejected as inapplicable to conduct here |
Key Cases Cited
- Liteky v. United States, 510 U.S. 540 (1994) (appearance‑of‑bias standard; opinions formed during proceedings generally not disqualifying)
- Liljeberg v. Health Servs. Acquisition Corp., 486 U.S. 847 (1988) (avoid even the appearance of partiality)
- LoCascio v. United States, 473 F.3d 493 (2d Cir. 2007) (abuse‑of‑discretion review of recusal decisions)
- United States v. Bayless, 201 F.3d 116 (2d Cir. 2000) (failure to recuse might constitute plain error in some circumstances)
- United States v. Carlton, 534 F.3d 97 (2d Cir. 2008) (critical or adverse rulings/comments alone rarely require recusal)
- United States v. Goffer, 721 F.3d 113 (2d Cir. 2013) (two‑part test for conscious‑avoidance instruction)
- United States v. Kozeny, 667 F.3d 122 (2d Cir. 2011) (conscious avoidance may be established by deliberately failing to investigate overwhelming suspicious circumstances)
- United States v. Aina‑Marshall, 336 F.3d 167 (2d Cir. 2003) (unwarranted conscious‑avoidance charge is harmless if overwhelming evidence of actual knowledge exists)
- Jackson v. Virginia, 443 U.S. 307 (1979) (standard for reviewing sufficiency of the evidence)
- Smith v. United States, 508 U.S. 223 (1993) (statutory terms construed by ordinary meaning)
- United States v. Michael, 882 F.3d 624 (6th Cir. 2018) ("use" = employ/convert to one’s service for §1028A purposes)
- United States v. Greenberg, 835 F.3d 295 (2d Cir. 2016) (application of §1028A to related billing/charging schemes)