Case Information
*1 UNITED STATES DISTRICT COURT 8/26/2025 SOUTHERN DISTRICT OF NEW YORK UNITED STATES OF AMERICA,
1:23-cr-110 (MKV) -against-
OPINION AND ORDER JUAN HERNANDEZ, GRANTING MOTION FOR RECUSAL Defendant.
MARY KAY VYSKOCIL, United States District Judge:
Before the Court is a motion for recusal made by Defendant Hernandez in response to a judicial disclosure made by the Court. [ECF No. 522]. No other interested party has moved for recusal. For the reasons set forth below, the motion is GRANTED.
BACKGROUND
This Court has been impartially presiding over this eleven-defendant criminal matter since its filing in March 2023. As of the date of this Order, all defendants have plead guilty and all but one defendant has been sentenced. During the sentencing phase of this action, Gilead Sciences, Inc., Gilead Sciences Ireland UC, and Gilead Science Ireland UC, (collectively, “Gilead”) appeared as an interested party and sought and was awarded restitution against certain defendants. [ECF Nos. 443, 444, 445, 446, 468]. Defendant Hernandez filed an appeal with respect to the final judgment and in particular challenging the restitution award in favor of Gilead. [ECF No. 470]. Shortly thereafter, on May 6, 2025, Defendant Hernandez obtained new counsel and filed a motion for reconsideration with respect to the Additional Order of Restitution. [ECF No. 489]. The Court, on May 16, 2025, denied the motion for reconsideration filed by Defendant Hernandez because of the pending appeal. [ECF No. 492]. On June 11, 2025, the Second Circuit issued a limited remand, pursuant to Federal Rule of Appellate Procedure 12.1, allowing this Court to consider the motion for reconsideration from Defendant Hernandez. [ECF No. 504].
On June 12, 2025, I received in the mail a written confirmation of a trade that had been made by my financial advisor on June 4, 2025 in a managed brokerage account, of which I had no advanced knowledge or personal control, for the purchase of 3.442 shares of Gilead Science [CUSIP: GILD]. Upon receipt of the trade confirmation, I immediately contacted my financial advisor and instructed him to void the trade. That same afternoon, I received verbal confirmation that the trade would be voided. Thereafter, on June 13, 2025, I received written confirmation of the cancellation of the trade for 3.442 shares and two additional trades for 0.507 and 5.287 shares of Gilead Science that apparently also had been made in my managed account by my financial advisor on June 11 and June 12 respectively. [ECF Nos. 517, 523]. Thus, by June 13, 2025, I received written confirmation that I was completely divested of any shares of Gilead Science. Thereafter, pursuant to the Second Circuit’s limited remand order I issued a scheduling Order to allow Defendant Hernandez and the other parties to fully set forth their arguments for the contemplated motion to reconsider by Defendant Hernandez. [ECF No. 506].
In the interests of full transparency and in advance of the upcoming sentencing hearing for Defendant Irina Polvanova and any substantive decision on the motion for reconsideration, on July 22, 2025 the Court made a judicial disclosure with respect to the three cancelled trades of Gilead Science even though the trades had been voided. In that Disclosure Order, I directed any party who had questions or wished to file any motion with respect to this disclosure to do so on or before July 28, 2025. In response, on July 28, 2025, Defendant Hernandez, through counsel newly retained post-sentencing, filed a motion for recusal that stated I had owned 8,729.507 shares of GILD which were worth between $940,000 and $960,000. [ECF No. 522]. No other party filed a motion or otherwise had questions with respect to the judicial disclosure. Based upon the Hernandez motion, it became apparent that there were certain material typographical errors in the *3 Court’s July 22 disclosure [ECF No. 517] and the Court promptly issued a subsequent Judicial Disclosure Order to correct those typographical errors and inaccuracies in the record. [ECF No. 523]. In particular, the Court clarified that the three trades made by my financial advisor in my managed brokerage account were for: 3.442 shares of GILD at $109.30 for a total settlement amount of $376.21; 0.507 shares of GILD at $110.8116 for a total settlement amount of $56.18; and 5.287 shares of GILD at $109.9816 for a total settlement amount of $581.47. [ECF No. 523]. In response, Defendant Hernandez filed a letter indicating that despite the corrected Judicial Disclosure Order, which shows that the amount and value of involved Gilead shares is dramatically lower than the initial inaccurate disclosure stated, “to avoid the appearance of impropriety, recusal is appropriate.” [ECF No. 527]. As of the date of this Order, no other interested party has made a motion in response to the Court’s judicial disclosures.
LEGAL STANDARD
A judge is required to recuse herself from “any proceeding in which [her] impartiality
might reasonably be questioned.” 28 U.S.C. § 455(a);
see In re Basciano
,
“[T]he decision whether to grant a recusal motion is left to the discretion of the judicial
officer.”
United States v. Buff
, No. 19-cv-5549,
DISCUSSION
Defendant Hernandez argues that recusal is required here pursuant to both subsections (b)(4) and (a) of 28 United States Code Section 455.
I. Recusal Pursuant to 455(b)(4)
Pursuant to Title 28 United States Code Section 455(b)(4), a Judge shall disqualify herself when she knows that she “individually . . . has a financial interest in the subject matter in controversy or in a party to the proceeding, or any other interest that could be substantially affected by the outcome of the proceeding.” 28 U.S.C. § 455(b)(4). However, there is an exception to this mandatory disqualification under subsection (f) which states that “if any judge would be disqualified “after substantial judicial time has been devoted to the matter, because of the appearance or discovery, after the matter was assigned to [] her, that [] she individually . . . has a financial interest in a party . . . disqualification is not required if the . . . judge . . . divests . . . herself of the interest that provides the grounds for the disqualification.” 28 U.S.C. § 455(f).
I have been presiding over this case for over two years, have accepted pleas from all
defendants, and sentenced all but one of those defendants. After substantial judicial time had
already been devoted to the matter, I learned on June 12, 2025, when I was reviewing trade
*5
confirmations made by my financial advisor in my managed brokerage account to fulfill my
obligations under Section 455(c),
see
28 U.S.C. § 455(c) (“A judge should inform [herself] about
[her] personal and fiduciary financial interests . . . .”), that without my knowledge or authorization
a trade was made by my financial advisor in a managed brokerage account on June 4, 2025 for
Gilead Science. As Gilead Science is an interested party in this action and has sought and received
restitution, I immediately contacted my financial advisor to void the trade. On June 13, 2025,
which was within one day of learning of the trade, I received written confirmation that the trade
made on June 4, 2025, and two other trades that unbeknownst to me at the time had been made on
June 11, 2025 and June 12, 2025, were cancelled. Thus, it is exceptionally clear that I took the
sanctioned course of action pursuant to Section 455(f) and within one day of learning of the
disqualifying event divested myself of those shares.
See Litovich v. Bank of Am. Corp.
, 106 F.4th
218, 225 (2d Cir. 2024) (explaining that recusal pursuant to § 455(b)(4) “is not always grounds for
automatic disqualification, as a judge may avoid disqualification if [she] discloses and divests the
financial interest.”) (internal quotations omitted);
see also In re Initial Pub. Offering Sec. Litig.
,
174 F. Supp. 2d 70, 90 (S.D.N.Y. 2001) (“Likewise, if the conflict arises in the middle of the
litigation, courts do not need to recuse themselves as long as they act promptly to rectify the
situation.”). No substantive decisions were made during the nine-day period between when my
financial advisor unbeknownst to me had initially purchased the shares and when they were voided.
Furthermore, no substantive decisions were made during the one-day period I had actual
knowledge of this trade and when it (and the two other unknown trades) were voided. The only
action this Court took between June 4, 2025 and June 13, 2025 was to endorse a letter to adjourn
the sentencing hearing of Defendant Irina Polvanova at the request of the parties due to a
scheduling conflict of the Government. [ECF No. 500]. After I received written confirmation that
*6
the shares had been voided and I was fully divested of any disqualifying interest, I issued a
scheduling order with respect to the motion for reconsideration contemplated by Defendant
Hernandez, [ECF No. 506], and thereafter, I issued my initial judicial disclosure. The Court’s
immediate divestiture and forthright disclosure eliminated the need for any disqualification under
Sections 455(b)(4) and (f).
See Kidder, Peabody & Co. v. Maxus Energy Corp.
,
Therefore, the Court is confident that recusal pursuant to Section 455(b)(4) is not warranted.
II. Recusal Pursuant to 455(a)
Defendant Hernandez also argues that recusal is required pursuant to 28 United States Code
Section 455(a). This section states that “[a]ny justice, judge, or magistrate judge of the United
States shall disqualify [herself] in any proceeding in which [her] impartiality might reasonably be
questioned.” 28 U.S.C. § 455(a). “Section 455(a) has been described as a ‘catchall recusal
provision,’ that ‘governs circumstances that constitute an appearance of partiality, even though
actual partiality has not been shown.’ ”
Chase Manhattan Bank v. Affiliated FM Ins. Co.
, 343 F.3d
120, 127 (2d Cir. 2003) (internal citations omitted). “Unlike section 455(b), which enumerates
specific circumstances constituting actual conflicts of interest, the purpose of section 455(a) is ‘to
*7
promote confidence in the judiciary by avoiding even the
appearance
of impropriety whenever
possible.’ ”
Hardy v. United States
, 878 F.2d 94, 96 (2d Cir. 1989) (emphasis in original)
(quoting
Liljeberg v. Health Servs. Acquisition Corp.
,
After the Court issued the corrected Judicial Disclosure Order, Defendant Hernandez renewed his demand that I recuse myself and stated that he “maintains his concerns about the Court’s decision making and belief that to avoid the appearance of impropriety, recusal is appropriate.” [ECF No. 527]. Defendant Hernandez argues that recusal is appropriate here to avoid the appearance of impartiality. Defendant Hernandez focuses part of his argument on the delay between the discovery of the shares being purchased and the disclosure made by the Court. Hernandez points to this lag in time to argue that an objective reasonable person would find his concerns of impartiality reasonable. [ECF No. 527]. Briefly in response, there is no nefarious reason behind the Court’s slight delay in issuing the Judicial Disclosure Order. In reality, the delay was simply because I waited a brief period after receiving confirmation from my financial advisor that the trades had been voided to confirm myself that they had in fact been voided. Thereafter, I consulted, reviewed, and confirmed my ongoing judicial and ethical obligations to ensure compliance. Additionally, I was originally attempting to find a time to have all the parties in for *8 a conference to make an oral disclosure, but between the normal press of business and managing the over 300 cases on my docket, I was unable to find an available time to schedule an in-person conference. As a result, I decided that it was prudent to issue a written disclosure prior to the upcoming sentencing hearing and in advance of any substantive decisions in this case.
The Court is firmly of the view that my impartiality cannot be questioned. Through a routine review of my personal financial interests in accordance with 28 U.S.C. § 455(c), I learned of the trades and immediately followed the sanctioned course of action, directing my financial advisor to void the trades, made no substantive decisions during that period, and promptly issued a fulsome judicial disclosure detailing exactly when and how I discovered this trade and my prompt and complete divestiture of the shares in question. The most compelling evidence that there is no appearance of partiality is the fact that no other party to this multi-defendant case—not the Government and no other defendant (including one awaiting sentencing)—has sought my disqualification.
Nonetheless, the Court is cognizant that Section 455(a) is not about the reality, but any
possible appearance of impartiality and is mindful that, in other circumstances, the Second Circuit
has concluded that recusal under Section 455(a) is appropriate even when an interest is divested
prior to a judge issuing any substantive decision.
See, e.g., Litovich
,
This case is distinguishable from
Litovich
in that, here, I undertook a proactive review of
my personal financial interests pursuant to Section 455(c), promptly divested of the shares
pursuant to the protocol laid out in Section 455(f), and issued a fulsome disclosure, whereas in
Litovich
the Court notified the parties of the conflicting stock ownership four months after the
Complaint was dismissed after an inquiry from The Wall Street Journal.
See Litovich
, 106 F.4th
at 223–24. However, I am concerned that the confidence in the fair administration of justice not
be undermined. Therefore, even though I have followed the sanctioned protocol outlined in
Section 455(f) and I have been presiding over this matter impartiality and believe I can continue
to do so, given the fact that this is a criminal matter, Defendant Hernandez has sought recusal
based on Section 455(a), his motion for reconsideration involving restitution previously awarded
to Gilead, is currently pending before the Court and was being briefed by the parties during the
course of these judicial disclosures being issued, and the overall purpose of Section 455(a) is “to
promote confidence in the judiciary by avoiding even the
appearance
of impropriety whenever
possible,”
Liljeberg
,
CONCLUSION
Accordingly, the motion for recusal is GRANTED. The Clerk of Court is respectfully requested to terminate docket entry 522 and to reassign this case for further proceedings. SO ORDERED.
_________________________________ Date: August 26, 2025 MARY KAY VYSKOCIL
New York, NY United States District Judge