UNITED STATES of America, Plaintiff-Appellee, v. Laurence ISAACSON, Defendant-Appellant. United States of America, Plaintiff-Appellee, v. Laurence Isaacson, Defendant-Appellant.
Nos. 11-14287, 12-14703.
United States Court of Appeals, Eleventh Circuit.
May 22, 2014.
752 F.3d 1291
Anne Ruth Schultz, Wifredo A. Ferrer, Christopher J. Hunter, Assistant U.S. Attorney, Kathleen Mary Salyer, Harold E. Schimkat, U.S. Attorney‘s Office, Miami, FL, Jack B. Patrick, Washington, DC, for Plaintiff-Appellee.
Sheryl Joyce Lowenthal, Attorney at Law, Miami, FL, for Defendant-Appellant.
Before MARTIN, FAY, and SENTELLE,* Circuit Judges.
MARTIN, Circuit Judge:
* Honorable David Bryan Sentelle, United States Circuit Judge for the District of Columbia, sitting by designation.
I. Background
A. The Criminal Conspiracy
This case arises out of a complex scheme designed to defraud investors through a group of hedge funds we will call the Lancer Fund. At the core of the criminal enterprise were Michael Lauer, Martin Garvey, and Eric Hauser, all of whom had ownership interests in the Lancer Fund. Also central to the scheme was Bruce Cowen, who served as the Lancer Fund‘s managing director.
The fraud charged in this case began in earnest in late 1999, when the Lancer Fund began investing in publicly traded shell companies, or companies that typically had no real assets or business operations. Once the Lancer Fund controlled the shell companies, it drove up the share prices by buying stock in the companies at artificially inflated prices. This caused the shell companies to appear much more valuable than they really were. By the conspiracy‘s end, these worthless and overpriced shell companies made up the majority of the Lancer Fund‘s investment portfolio. Among the shell companies the Lancer Fund invested in were ServiceMax of America (SMX), Augment Systems (AUG), and Nu-D-Zine, each of which Mr. Isaacson helped the Lancer Fund acquire and manage.
Investors had no way to know what the Lancer Fund was doing because it did not disclose the companies in which it invested. This policy prevented investors from verifying for themselves the value and performance of the Lancer Fund. Instead, investors generally depended on evalua-
Mr. Isaacson‘s criminal involvement with the conspiracy began when the Lancer Fund‘s auditors became suspicious about the value of the shell companies in the investment portfolio and sought support for their assigned market value. In an effort to placate the auditors, Mr. Cowen sought valuations in early 2002 from consultants corroborating the market value of the companies. One of the consultants was Milton Barbarosh, who shared an office with Mr. Isaacson in Florida.
At first, Mr. Barbarosh was not sure how he would fulfill Mr. Cowen‘s request, because “there was no basis to show that the value of the companies were worth anywhere near the value of the public market.” Eventually, Mr. Barbarosh decided that he could evaluate the shell companies by producing hypothetical valuations based on future business plans that were not intended to be implemented. Mr. Barbarosh shared this fraudulent plan with Mr. Isaacson, who reported that he had already suggested the idea to Mr. Cowen, and Mr. Cowen had said that it “would be fine if [Mr. Barbarosh did] the reports on that basis.” Mr. Barbarosh testified that he told Mr. Isaacson that the purpose of the valuations was to support the market price of the companies, and that he “probably” summarized the rest of the conversation with Mr. Cowen for Mr. Isaacson.
With a plan in place, Mr. Barbarosh began work on the valuation reports for SMX and Nu-D-Zine. To do that, he needed some model business plans that he could say were being implemented at the companies. Mr. Isaacson agreed to help and found two plans with figures that would allow Mr. Barbarosh to come close to the market value. Neither of these plans was ever actually going to be implemented at either SMX or Nu-D-Zine.1
Mr. Barbarosh completed the valuations consistent with Mr. Cowen‘s request and sent him the final reports, which were dated May 23 and June 7, 2002. After Mr. Barbarosh sent the last of the reports, Mr. Isaacson spoke with Mr. Cowen and passed the message along to Mr. Barbarosh that “the reports were great, and that the auditors had accepted them.” The record does not indicate when exactly the Lancer Fund sent the reports to the auditors.
Messrs. Isaacson and Barbarosh were also involved in similar efforts to produce inflated valuations in 2003. Investors eventually became suspicious, however, in part because the auditors had not issued a report about the Lancer Fund‘s 2001 performance by 2003. In an effort to stave off investors’ attempts to withdraw their money—which the Lancer Fund did not have—the Lancer Fund continued to misrepresent its performance to investors and encourage them to accept redemption in the form of Lancer Fund securities as opposed to cash.
Mr. Isaacson was indicted, along with Messrs. Lauer, Garvey, Hauser, and Barbarosh, on January 29, 2008. The indictment charged the co-conspirators with conspiracy to commit wire, mail, and securities fraud, in violation of
B. The Prosecution
Due in large part to three continuances, which were granted at various defendants’ requests, Mr. Isaacson was not brought to trial until spring of 2010. In March 2010, the District Court began jury selection based on prospective jurors’ responses to written questionnaires, which the parties had helped to prepare. The delay between indictment and Mr. Isaacson‘s trial prompted him to file a Speedy Trial Act motion to dismiss on April 19, 2010, which the District Court denied.
After a lengthy trial, Mr. Isaacson was convicted of conspiracy to commit securities fraud, as charged in Count One. The District Court dismissed Count Seven before submitting the case to the jury; the jury acquitted Mr. Isaacson of Counts Two, Three, and Four; and did not reach a verdict on Counts Five and Six. Ultimately, Messrs. Hauser, Cowen, and Barbarosh pleaded guilty based on their involvement in the scheme. Messrs. Lauer and Garvey were, however, acquitted after a jury trial.
C. Sentencing
Mr. Isaacson‘s presentence investigation report (PSR) noted that his offense corresponded to a base offense level of 6, and also recommended that the Court impose the following enhancements: a 20-level loss amount enhancement, pursuant to
Mr. Isaacson objected to the loss amount enhancement, the number of victims enhancement, and the sophisticated means enhancement, and also objected to the lack of a 2-level minor role reduction pursuant to
The PSR attributed a loss of $15 million to Mr. Isaacson based on an investment Morgan Stanley made on June 28, 2002. The District Court eventually agreed with the attribution, after much deliberation. In sentencing Mr. Isaacson, the District Court defined his agreement to participate in the conspiracy narrowly, as a conspiracy to defraud the auditors. Despite this narrow definition, the District Court concluded that by defrauding the auditors, Mr. Isaacson participated in the broader conspiracy that caused Morgan Stanley to make its investment.
This loss amount enhancement brought Mr. Isaacson‘s guideline range above the maximum sentence permitted by his statute of conviction, and so the Court declined to rule on the remainder of Mr. Isaacson‘s objections. The Court ultimately sentenced Mr. Isaacson to 36-months imprisonment, a downward variance from his 60-month guideline range. Cf.
D. The Rule 33 Motion
About two years after Mr. Isaacson‘s conviction, he filed a motion pursuant to
The government filed a response, which included an affidavit from the prosecutor‘s wife. The prosecutor‘s wife explained that although she was once a shareholder with the firm, at the time of Messrs. Barbarosh and Isaacson‘s prosecution she was not. Rather, she was employed as a part-time contract attorney at that time, and was paid an hourly wage. She explained that she was not a member of Mr. Barbarosh‘s defense team and did not have any contact with the lead counsel assigned to Mr. Barbarosh‘s case. The government‘s response also noted that the prosecutor had disclosed his wife‘s employment to his supervisors, who concluded there was no need for recusal because there was no actual conflict or an appearance of one. Given the lack of any appearance of conflict, the government maintained that recusal was not required and that information about the conflict was not subject to disclosure.
The District Court denied Mr. Isaacson‘s request for an evidentiary hearing and a new trial, finding “no conflict of interest or Brady[ v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963),] violation warranting a new trial.” To the conflict of interest issue, the District Court emphasized that the wife was not actually a shareholder at the firm at the time of the representation. On the Brady issue, the Court found the wife‘s employment gave no additional incentive for Mr. Barbarosh to lie on the stand beyond that already explored during cross examination. The Court thus concluded that the information had no material impact on the outcome of Mr. Isaacson‘s prosecution.
E. This Appeal
This is a consolidated appeal, including Mr. Isaacson‘s direct appeal from his conviction and sentence as well as his appeal from the denial of his Rule 33 motion based on his charge of prosecutorial conflict. Mr. Isaacson makes the following arguments on appeal: (1) his conduct lies outside the scope of conduct punishable under
II. The Scope of 18 U.S.C. § 371
We first address Mr. Isaacson‘s argument that
To begin, it has never been established in this Circuit that Morrison limits the scope of criminal liability for violations of the Securities Exchange Act to the same extent it limits the scope of civil liability.2 We need not explore that question in this appeal. That is because, even if we assume here that it does, Mr. Isaacson‘s conviction is still due to be affirmed.
In Morrison, the Supreme Court applied the presumption against extraterritoriality, a tool of statutory construction limiting a statute‘s applicability to domestic conditions unless the statute gives a “clear indication of an extraterritorial application.” 561 U.S. at 255, 130 S.Ct. at 2877-78. The Supreme Court held that the scope of civil liability based on the Securities Exchange Act is limited to cases in which the defendant committed a fraud “in connection with the purchase or sale of a security listed on an American stock exchange,” or in connection with the purchase or sale of any other security that took place in the United States. Id. at 273, 130 S.Ct. at 2888. If the conduct underlying the claim does not meet at least one of these requirements, then under Morrison, there can be no civil liability. Id.
We have no trouble concluding that Mr. Isaacson‘s conduct meets Morrison‘s requirements for a U.S. nexus. The government‘s expert witness analyzed the SMX,3 AUG, and Nu-D-Zine securities and testified that they all “traded on the Over-the-Counter Bulletin Board or the Pink Sheets.” The expert explained that these exchanges are “similar to” the NYSE and the NASDAQ, which are both American markets. Beyond that, there was evidence that the Lancer Fund was “run out of New York City” and that Mr. Isaacson‘s office was located in Florida, which supports the inference that the Lancer Fund purchased the securities in the United States. This evidence is enough to satisfy Morrison‘s conditions.
III. The Speedy Trial Act Motion
We next address Mr. Isaacson‘s argument that the District Court should
The Speedy Trial Act generally requires a federal criminal trial to “commence within seventy days” of the defendant‘s indictment or initial appearance, whichever is later.
The remedy for a violation of the seventy-day provision is mandatory dismissal upon the defendant‘s motion.
Mr. Isaacson argues that the Speedy Trial clock began to run on March 6, 2008, when Mr. Garvey made his initial appearance. See
After careful consideration, we conclude that Mr. Isaacson‘s motion to dismiss was properly denied because it was filed after his trial had already begun. In
Mr. Isaacson may well be right when he posits that the common understanding of voir dire is jurors being examined under oath in the courtroom where the judge, the defendant, and the government can decide who should be placed on the jury based on the content of the jurors’ answers as well as their demeanor. See Reynolds v. United States, 98 U.S. 145, 156-57, 25 L.Ed. 244 (1878) (“[T]he manner of the juror while testifying is oftentimes more indicative of the real character of his opinion than his words. That is seen below, but cannot always be spread upon the record.“). But this limited definition of voir dire cannot withstand a broader consideration of the discretion vested in District Courts for developing procedures for jury selection.
We have long recognized that District Courts have considerable discretion in deciding how best to pick a jury. This includes deciding who should ask questions of the prospective jurors; what the questions should be; and most important here, how they should be asked. See, e.g., United States v. Tegzes, 715 F.2d 505, 507 (11th Cir.1983). The only limit on this discretion this Court has articulated is that the District Court‘s chosen methods must create a “reasonable assurance that prejudice would be discovered if present,” id. (quotation mark omitted). Of course, the selection process must also comply with
Written questionnaires are now a common complement to oral examination when selecting an effective and impartial jury. As the Second Circuit observed not too long ago, courts “routinely employ questionnaires to facilitate voir dire in a number of circumstances.” United States v. Quinones, 511 F.3d 289, 299 (2d Cir.2007) (italics omitted) (finding that written questionnaires can be used as part of the voir dire process, although outside the Speedy Trial Act context). With this in mind, the Second Circuit recognized that, “[a]lthough voir dire ordinarily contemplates seeing the jurors and hearing them speak, any court-supervised examination of prospective jurors is reasonably understood to be part of voir dire.” Id. (italics, citation, and footnote omitted).
As a practical matter, written questionnaires pose questions commonly asked, and materially indistinguishable from, what we expect to see during oral examination in the courtroom. Beyond that, the expectation that jurors will tell the truth is the same whether their answers are spoken or written. The written questionnaire in Mr. Isaacson‘s case informed jurors that they were “sworn to give true and complete answers,” and warned that jurors might be subject to prosecution for perjury if they did not uphold that oath. This tracks the oath the jurors took once they were called into Court in this case.
Because written questionnaires facilitate jury selection in ways not unlike traditional oral examination, we cannot agree with Mr. Isaacson‘s suggestion that jury selection based on written questionnaires can never constitute part of voir dire for purposes of the Speedy Trial Act. Where, as here, the District Court relies on written questionnaires to aid in jury selection, voir dire and thus the trial begins when the Court starts to rule on opposed juror challenges based on those written questionnaires. In this case, that date was March 23, several weeks before Mr. Isaacson‘s Speedy Trial Act motion.6 Mr. Isaacson‘s April 19 motion was therefore untimely, and he was not entitled to dismissal.
We caution that District Courts should not take our decision today “as a license to evade the Act‘s spirit,” Gonzalez, 671 F.2d at 444, by starting to eliminate jurors based on written questionnaires long before beginning oral examination. As we said in Gonzalez, “[w]e will not hesitate to find that a trial has not actually ‘commenced’ ... if we perceive an intent to merely pay the Act lip service.” Id. Thus, there may be cases where a deviation from the general rule about written examinations we set forth today would be warranted, where the record reveals some purposeful manipulation of the Speedy Trial Act‘s technical requirements.
The particular procedural background of this case, even with the rather prolonged delay of trial, gives us comfort that this voir dire was not commenced in order to avoid the requirements of the Speedy Trial Act. When the District Court first ruled on the written questionnaires, it had already granted a continuance, at two defendants’ request, to April 26. Also, the Court still had a motion before it which challenged certain evidence against Mr. Isaacson and his co-defendants, for which it held an evidentiary hearing in the first week of April. Given this context, we do not see the District Court‘s decision to begin jury selection in March based on the written questionnaires as an intentional effort to manipulate the Speedy Trial Act.
IV. The Statute of Limitations
Next, Mr. Isaacson argues that his conviction should be vacated because the government failed to prove an overt act within the statute of limitations. In a conspiracy prosecution brought under
The grand jury returned Mr. Isaacson‘s indictment on January 29, 2008, meaning that the government had to prove an overt act in furtherance of the conspiracy occurring on or after January 29, 2003. See
This argument misunderstands the nature of conspiracy liability. “[A]n individual conspirator need not participate in the overt act in furtherance of the conspiracy. Once a conspiracy is established, and an individual is linked to that conspiracy, an overt act committed by any conspirator is sufficient.” United States v. Thomas, 8 F.3d 1552, 1560 n. 21 (11th Cir.1993); see also United States v. Arias, 431 F.3d 1327, 1340 (11th Cir.2005) (“An accused conspirator‘s participation is presumed to have continued ... until the last overt act has been committed by any of the conspirators.“).8 Mr. Isaacson‘s statute of limitations argument is therefore without merit.
V. The Sufficiency of the Evidence
Mr. Isaacson also challenges the sufficiency of the evidence supporting his conviction. He argues that several government witnesses, and one government agent who did not testify at trial, were not credible, and that two of the government‘s witnesses testified that they did not know Mr. Isaacson. In Mr. Isaacson‘s view, the case against him was weak, as evidenced by the government‘s failure to secure a conviction on six of the seven counts charged. Also, he points to shortcomings in the government‘s case he surmises could have led to his acquittal.
We review de novo the sufficiency of the evidence supporting a conviction, viewing the evidence and drawing all inferences in favor of the verdict. United States v. Benbow, 539 F.3d 1327, 1331 (11th Cir.2008). We must affirm Mr. Isaacson‘s conviction “unless there is no reasonable construction of the evidence
Applying these well-established principles, we find the evidence against Mr. Isaacson sufficient to support his conviction. He primarily argues that Messrs. Cowen and Barbarosh were not credible because the witnesses had incentives to lie. But Mr. Isaacson has not pointed to any circumstances that would render their testimony incredible as a matter of law, and instead points to circumstances which were thoroughly explored during the examinations of both witnesses. Mr. Isaacson also notes that more evidence has come out since his conviction suggesting that Mr. Barbarosh lied about his own culpability and about whether Mr. Isaacson was really the source of the business plans upon which the fraudulent valuations were based. But, at least on direct review from the conviction, we consider only the evidence that was actually presented to the jury at the time it reached its verdict. See United States v. Lopez-Ramirez, 68 F.3d 438, 441 & n. 3 (11th Cir.1995).9
By contrast, the government presented significant evidence implicating Mr. Isaacson. Mr. Barbarosh testified that Mr. Isaacson gave him the business plans, knowing they would be used in valuations provided to auditors, and knowing that the plans had nothing to do with the businesses being valued. Beyond that, the shell companies Mr. Barbarosh was valuing were actually managed by Mr. Isaacson (suggesting that he knew their true value, or rather lack thereof), and had been purchased by the Lancer Fund with Mr. Isaacson‘s help. Finally, Mr. Isaacson testified on his own behalf, and the jury was “permitted to reject that testimony, as we must assume it did, and consider that testimony as substantive evidence of the defendant‘s guilt.” United States v. Jimenez, 564 F.3d 1280, 1285 (11th Cir.2009) (quotation marks and emphasis omitted). This evidence supports the inference that Mr. Isaacson was guilty, and his evidence arguably suggesting otherwise does not undermine it to the extent necessary for us to upset the jury‘s verdict.
VI. The Sentence
We next consider Mr. Isaacson‘s argument that the government did not carry its burden to attribute Morgan Stanley‘s losses to him for purposes of the loss amount enhancement and the restitution order. Based upon the findings of the District
In his objections to the PSR and at sentencing, Mr. Isaacson asserted that the government could not adequately attribute Morgan Stanley‘s $15.625 million investment to him. “When the government seeks to apply an enhancement under the Sentencing Guidelines over a defendant‘s factual objection, it has the burden of introducing sufficient and reliable evidence to prove the necessary facts by a preponderance of the evidence.” United States v. Washington, 714 F.3d 1358, 1361 (11th Cir.2013) (quotation marks omitted). “We review de novo the application of the sentencing guidelines and findings of fact for clear error.” United States v. Louis, 559 F.3d 1220, 1224 (11th Cir.2009).
The District Court “may hold participants in a conspiracy responsible for the losses resulting from the reasonably foreseeable acts of co-conspirators in furtherance of the conspiracy.” United States v. Hunter, 323 F.3d 1314, 1319 (11th Cir.2003). But “[t]he limits of sentencing accountability are not coextensive with the scope of criminal liability.” Id. For sentencing purposes, a defendant is responsible for the conduct of his co-conspirators only if that conduct was “in furtherance of the jointly undertaken criminal activity” and “reasonably foreseeable in connection with that criminal activity.”
Once the District Court determines the precise scope of the defendant‘s agreement, the Court must then consider whether the conduct of his co-conspirators was “in furtherance of, and reasonably foreseeable in connection with, the criminal activity jointly undertaken by the defendant.”
Here, the government has not established that Morgan Stanley‘s losses were the result of either Mr. Isaacson‘s or his co-conspirators’ conduct in furtherance of the part of the conspiracy in which he agreed to participate. The District Court‘s “finding with regards to the scope of criminal activity that was jointly undertaken by Mr. Isaacson” was this: “Mr. Isaacson knowingly participated in a scheme to produce or create inflated valuations for what I will call the shell companies which Lancer had in its portfolio.... The purpose of this aspect of the conspiracy was to help Lancer deal with questions being asked by auditors and administrators of the Lancer Funds....” Specifically, then, the District Court concluded that Mr. Isaacson agreed to jointly undertake the criminal activity of defrauding the auditors, not the investors.
As a result, to attribute Morgan Stanley‘s losses to Mr. Isaacson, the government was required to show that its investment was the result of acts by Mr. Isaacson or his co-conspirators taken to defraud the auditors. In assessing the link between the actions taken to further that subset of the criminal enterprise and Morgan Stanley‘s investment, we “must not speculate concerning the existence of a fact which would permit a more severe sentence under the guidelines.” United States v. Sepulveda, 115 F.3d 882, 890 (11th Cir.1997) (quotation marks omitted). A close look at the conspiracy to defraud the auditors and Morgan Stanley‘s investment reveals that far too much speculation is necessary to attribute that investment loss to the conspiracy to defraud the auditors.
Morgan Stanley never saw the valuations Mr. Isaacson helped Mr. Barbarosh to prepare. And, as the District Court noted, Morgan Stanley knew the auditors had not signed off on the Lancer Fund‘s financial statements for 2001, the year for which the fraudulent valuations were provided. But Morgan Stanley invested anyway. That Morgan Stanley invested knowing that the audit reports were delayed, suggesting there might be a problem, strongly supports the inference that Morgan Stanley made its investment decision entirely independent of any audit reports that would or should have been completed after Mr. Isaacson agreed to join the conspiracy. This inference is further supported by the fact that Morgan Stanley‘s June 28, 2002 investment was the last in a series of several investments Morgan Stanley made, dating back to October 2001, after doing its own due diligence. These facts preclude the government from showing that Morgan Stanley‘s investment “resulted from,”
To be sure, the conspiracy to defraud the auditors delayed and possibly prevented the auditors’ discovery of the fraud. In this way, the government argues, the conspiracy to defraud the auditors caused the investment because “Morgan Stanley almost certainly would have learned of Lancer‘s fraud if that fraud had been discovered and publicly reported by Lancer‘s auditors.” But this hypothetical causal
The record does not support an affirmative answer to this last question. The fraudulent valuation reports Mr. Barbarosh produced were dated May 3, May 23, and June 7, 2002, and Morgan Stanley made its investment on June 28, 2002. The government acknowledged at Mr. Isaacson‘s sentencing that there was no evidence about the precise date on which the valuation reports were provided to the auditors. Given that the final valuation report is dated June 7 and Morgan Stanley invested on June 28, we reject the government‘s argument that we should infer, without more information, that without those reports, the auditors would have discovered the fraud in time to save Morgan Stanley from making this bad investment decision.
To the contrary, the evidence strongly suggests that Morgan Stanley was set on making the June 2002 investment, and does not support the inference that absent the specific conspiracy Mr. Isaacson joined, the auditors would have discovered the fraud before Morgan Stanley invested. To say that Morgan Stanley‘s investment resulted from the conspiracy to defraud the auditors would require a number of inferential leaps and assumptions not supported by the record. See Sepulveda, 115 F.3d at 890-91. Therefore, we conclude that the link between the conspiracy to defraud the auditors and Morgan Stanley‘s investment is too speculative to say the latter “resulted from” the former, as the Guidelines require.
The same problem plagues the District Court‘s restitution order. This Court reviews the legality of a restitution order de novo, and factual findings regarding the specific amount of restitution for clear error. United States v. Huff, 609 F.3d 1240, 1247 (11th Cir.2010). The Mandatory Victims Restitution Act requires a District Court to order restitution for any person who is “directly and proximately harmed as a result of” a defendant‘s participation in a conspiracy. See
Mr. Isaacson‘s sentence is vacated and we remand this case for his resentencing without the loss amount enhancement or the $8 million restitution order. When the District Court resentences Mr. Isaacson, it should resolve all of his remaining sentencing objections not already addressed. Be-
VII. The Rule 33 Motion
Mr. Isaacson‘s second appeal challenges the District Court‘s denial of his
We review a District Court‘s denial of a Rule 33 motion for a new trial and an evidentiary hearing for abuse of discretion. United States v. Thompson, 422 F.3d 1285, 1294-95 (11th Cir.2005); United States v. Schlei, 122 F.3d 944, 990 (11th Cir.1997). Mr. Isaacson presents two reasons the District Court should have granted the motion: (1) because the prosecutor‘s recusal was required by statute, see
Both of these claims miss the mark. First, the prosecutor was not required to recuse himself under
To the extent Mr. Isaacson raises a Brady claim that disclosure of the conflict was required even if recusal was not, the challenge is still without merit. While there may be some cases where an arguable prosecutorial conflict must be disclosed even if recusal is not statutorily required, this is not one of them. To prevail on a Rule 33 motion based on an alleged Brady violation, a defendant must show that there is a reasonable probability the outcome would have been different had the evidence been disclosed. See United States v. Vallejo, 297 F.3d 1154, 1164 (11th Cir.2002) (noting that defendants must prove four things, including prejudice, before a Rule 33 motion based on a Brady violation will be granted).
Mr. Isaacson has shown no reasonable probability that the outcome would have been different if his attorney had been able to cross examine Mr. Barbarosh about the prosecutor‘s alleged conflict of interest. There is substantial evidence implicating Mr. Isaacson in the conspiracy, and his attorney examined Mr. Barbarosh about his plea agreement with the government and his incentive to testify against Mr. Isaacson. We agree with the District Court‘s finding that this purported prosecutorial conflict would not have given Mr. Barbarosh any additional incentive to lie on the stand. There is therefore no reasonable probability that the outcome would have been different had the alleged conflict been disclosed.
VIII. Conclusion
We affirm Mr. Isaacson‘s conviction as well as the denial of his Rule 33 motion. However, we find that the District Court erred when it enhanced Mr. Isaacson‘s sentence and ordered restitution based on the losses from Morgan Stanley‘s investment. We therefore vacate the sentence and remand for resentencing based on the record from the first sentencing.
AFFIRMED IN PART; VACATED AND REMANDED IN PART.