Case Information
*1 17 ‐ 3691 ‐ cr(L)
United States v. Lebedev et al.
In the
United States Court of Appeals
For the Second Circuit August Term, 2018
Nos. 17 ‐ 3691 ‐ cr(L), 17 ‐ 3758 ‐ cr(Con), 17 ‐ 3808 ‐ cr(Con) U NITED S TATES OF A MERICA ,
Appellee , Y URI L EBEDEV T REVON G ROSS , Defendants ‐ Appellants,
A NTHONY R. M URGIO , also known as Sealed Defendant 1, M ICHAEL J. M URGIO , J OSE M. F REUNDT , R ICARDO H ILL , also known as Rico, Defendants. [*]
Appeal District Court Southern District New York. Nos. cr ‐ 769 ‐ 1, 15 ‐ cr ‐ 769 ‐ 2, 15 ‐ cr ‐ 769 ‐ 3 ― Alison J. Nathan, Judge . A RGUED : D ECEMBER
D ECIDED : J ULY Before: C ABRANES P OOLER , D RONEY , Circuit Judges .
*2 Appeal from the November November judgments of the United States District Court for the Southern District of New York (Alison J. Nathan, Judge ), convicting the Defendants ‐ Appellants, after a jury trial, multiple counts arising out their roles the operation illegal Bitcoin exchange scheme use federal union for illegal purposes. They argue, among other things, that court made various evidentiary errors, including improperly limiting examination witness called impeach key government witness. Defendant Lebedev further argues insufficient evidence presented at trial sustain his convictions, while defendant argues presented trial so differed allegations superseding indictment impermissibly constructively amended indictment. Defendant also challenges ‐ month prison sentence order restitution, arguing misapplied certain sentencing enhancements calculating Guidelines range, abused discretion determining restitution. We AFFIRM.
T ILLMAN J. B RECKENRIDGE , Pierce Bainbridge Beck Price & Hecht LLP, Washington, DC, (Eric M. Creizman, Melissa Madrigal, Creizman PLLC, New York, NY on brief ) for Defendant ‐ Appellant Lebedev.
K RISTEN M. S ANTILLO , Gelber & Santillo PLLC, New York, NY, for Defendant Appellant Gross.
D ANIEL S. N OBLE Assistant United States Attorney, (Won S. Shin, Eun Young Choi, Sarah K. Eddy, Assistant United States Attorneys, brief ) Geoffrey S. Berman, Attorney Southern District New York, New York, NY. *3 D RONEY Circuit Judge :
This a consolidated appeal of two defendants convicted in a joint jury trial of offenses arising out of their roles in an illegal Bitcoin exchange and a scheme use federal union illegal purposes. [1] Yuri Lebedev convicted of wire fraud in violation of 18 U.S.C. § 1343, bank fraud in violation of 18 U.S.C. § 1344, conspiracy commit wire and bank fraud in violation of 18 U.S.C. § 1349, and making corrupt payments with intent influence an officer of financial institution in violation of 18 U.S.C. § 215(a)(1). Trevon Gross convicted of receiving corrupt payments officer of financial institution violation of U.S.C. § 215(a)(2). Both Lebedev also convicted conspiracy violation U.S.C. §
Lebedev appeal their judgments conviction, raising various constitutional evidentiary challenges. also appeals court’s application several provisions Sentencing Guidelines imposing his sentence his order restitution.
I. BACKGROUND presented trial concerned activities internet ‐ based Bitcoin exchange service located in Florida, known as
“Coin.mx.” Coin.mx’s customers used exchange purchase Bitcoins, digital currency, with traditional currency. Although purpose Coin.mx allow purchase and sale Bitcoins, Coin.mx concealed fact banks credit card companies processing its transactions. [2] Coin.mx opened bank accounts in name “the Collectables Club,” which falsely purported private members’ association dedicated collecting exchanging memorabilia. Coin.mx also processed card transactions listing Collectables Club as merchant. Neither Coin.mx nor Collectables Club registered with federal regulators money transmitting entity obtained state licensure for purpose.
*5 Coin.mx employed Lebedev to manage information technology operations. One of Lebedev’s responsibilities set up various Internet Protocol (“IP”) addresses make appear banks payment processors Coin.mx’s transactions legitimate Collectables Club transactions.
Eventually, Coin.mx sought control of credit union process its transactions. In April Coin.mx representatives contacted Gross discuss possibility taking control of the Helping Other People Excel Federal Credit Union (“HOPE FCU” “credit union”). then chairman HOPE FCU, well as head pastor nearby Hope Cathedral Jackson, New Jersey.
Negotiations ensued between HOPE FCU, represented by Gross, Coin.mx’s front company, Collectables Club, represented primarily by Anthony Murgio. promised HOPE FCU would appoint board directors six members selected by Collectables Club, giving Collectables Club majority board seats. In return, required three donations made Hope Cathedral: two for $15,000 each a third for $120,000. Evidence at trial demonstrated frequently used those “donations” for personal expenses.
One Coin.mx’s other front companies, Currency Enthusiasts, made first two $15,000 donations Hope Cathedral. HOPE FCU’s executive board nominated six Collectables Club board members, promised board members they were replacing would resign at annual meeting. Lebedev was one six new members nominated. At annual meeting June nominees elected, although former board members remained board few additional months help HOPE FCU avoid scrutiny its regulator, National Credit Union Administration (“NCUA”). third donation made company known “Kapcharge.” Kapcharge third party payment processing company processed electronic payments clients through its own accounts financial institutions. Murgio affiliated with Kapcharge. Murgio approached *7 in June about allowing Kapcharge to process third ‐ party transactions, known automated clearing house transactions (“ACH transactions”), through an account HOPE FCU. Kapcharge, which Canadian company, became member HOPE FCU, even though HOPE FCU’s membership limited to persons organizations within local community. HOPE FCU substantially undercapitalized process high volume transactions Kapcharge used process. Shortly after becoming member, Kapcharge wired $120,000 Hope Cathedral.
In addition “donations” used by Gross personal expenses, Kapcharge co conspirators paid Gross $12,000 so ‐ called “consulting fees.”
Ultimately, Gross had falling out Murgio, Lebedev, other Coin.mx representatives, which resulted expelling them credit union terminating their relationship. [5] Thereafter, refused *8 communicate transact the Coin.mx agents, directed them to stop wiring funds into the credit union, locked them out computer access their accounts, and informed them that they members the credit union and thus lacked standing call board meeting. However, Gross continued allow Kapcharge process transactions through account after Coin.mx no longer involved in credit union. In Kapcharge wired an additional $80,000 into credit union accounts that Gross controlled.
HOPE FCU eventually came under regulatory scrutiny NCUA. During NCUA’s examination credit union, failed disclose number transactions, including “donations” that Currency Enthusiasts and Kapcharge paid Hope Cathedral, HOPE FCU had opened branch in Florida, Kapcharge paying salary credit union’s new CEO legal fees credit union. further misrepresented Kapcharge had office New Jersey qualified membership credit union, failed disclose Coin.mx agents’ email accounts after NCUA requested all union’s email accounts. NCUA placed HOPE FCU into conservatorship October
A superseding indictment filed on December 22, 2016, District Court Southern District New York. Following four ‐ week jury trial, Murgio, Lebedev, and Gross were convicted all counts on March 17, 2017. Following denial post trial motions, Lebedev sentenced 16 months’ imprisonment, supervised release, and forfeiture. sentenced 60 months’ imprisonment and three years’ supervised release. Lebedev and ordered pay $126,771.82 restitution jointly and severally their convicted codefendants.
Lebedev appealed their judgments conviction. Gross, but Lebedev, also challenges his sentence on appeal.
II. ANALYSIS
We consider Lebedev’s claims on appeal turn.
A. Lebedev’s Claims Appeal
1. Sufficiency Evidence
Lebedev challenges sufficiency underlying convictions wire fraud under U.S.C. § bank fraud under U.S.C. § conspiracy commit wire bank fraud under U.S.C. §
We review de novo challenge the sufficiency of the evidence underlying criminal conviction. United States v. Corbett , 750 F.3d 245, 250 (2d Cir. 2014). We “view the evidence the light most favorable the government, crediting every inference could have been drawn government’s favor, deferring jury’s assessment of witness credibility assessment of weight of evidence.” v. Coplan , 62 (2d Cir. 2012) (internal quotation marks omitted). “[W]e will uphold judgments conviction if ‘ any rational trier fact could found essential elements crime beyond reasonable doubt.’” Id. (quoting Jackson Virginia U.S. (1979)).
a. Wire Fraud
Lebedev argues there insufficient committed wire fraud because role Coin.mx’s scheme—deceiving financial institutions concerning nature Coin.mx’s business—did harm or risk harming those financial institutions. elements wire fraud are “(1) scheme defraud, (2) money
property object scheme, (3) use . . . wires further *11 scheme.” United States v. Binday , 804 F.3d 558, 569 (2d Cir. 2015) (internal quotation marks omitted). “Since a defining feature most property right control asset in question, we recognized property interests protected . . . wire fraud statute[] include interest victim controlling or her own assets.” Id. at 570 (alteration omitted) (quoting United States v. Carlo, F.3d 802 (2d Cir. 2007)). For this reason, wire fraud charge under right ‐ control theory can predicated on showing defendant, through “withholding or inaccurate reporting information could impact on economic decisions,” deprived “some person entity . . . potentially valuable economic information.” Finazzo (2d Cir. 2017) (internal quotation marks omitted). At trial, presented testimony witnesses establish significance Coin.mx’s misrepresentations about nature business, including Erika Heinrich, who worked fraud investigations group Chase Bank USA (“Chase”). Heinrich testified Chase decides whether process pending card transactions based part information receives about merchant. Chase evaluates regulatory risk, including potential fines doing *12 business that illegal, as well as economic risk posed by fraudulent transactions, considers transactions money services or money transmitting businesses carry higher risk fraud.
The evidence trial demonstrated that Coin.mx money service business that both unlawful carried higher risk fraudulent transactions. also showed Lebedev’s role Coin.mx’s scheme disguise Coin.mx’s Bitcoin transactions through front entities such Collectables Club, so institutions processing those transactions would more likely process approve them. On this basis, reasonable jury could conclude Lebedev deprived financial institutions right control their assets misrepresenting potentially valuable economic information.
b. Bank Fraud
Lebedev also argues failed prove he committed bank fraud because did not intend defraud either bank customers who purchased Bitcoin. He argues because Coin.mx’s customers willingly purchased Bitcoin, banks deprived any property interest customers’ accounts.
Bank fraud defined relevant part “a scheme or artifice—(1) to defraud a financial institution; or (2) obtain any moneys, funds, credits, assets, securities, or other property owned by, or under custody or control of, financial institution, by means false or fraudulent pretenses, representations, or promises.” U.S.C. § Lebedev indicted convicted under § 1344(2). Subsection (2) requires that defendant intend obtain financial institution’s property, that “envisioned result . . . occur by means false fraudulent pretenses, representations, or promises,” but does require “a defendant specific intent deceive bank.” Loughrin U.S. 356–57 (2014) (internal quotation marks omitted).
As discussed above, there sufficient showing Lebedev caused false information sent financial institutions disguise fact their customers transacting business with unregistered Bitcoin exchange. Moreover, did so intent obtain funds under those institutions’ custody control; namely, funds customers’ accounts. In addition, approving card transactions, banks advanced Coin.mx their own funds *14 would later paid back by customers. On these bases, reasonable jury could conclude Lebedev violated U.S.C. § 1344(2).
* * *
Accordingly, sufficient supported Lebedev’s convictions wire fraud, bank fraud, conspiracy commit wire bank fraud.
B. Claims Appeal
1. District Court’s Evidentiary Rulings challenges several evidentiary rulings district court made trial. Lebedev joins one such challenge, noted below. We review evidentiary rulings district abuse discretion. Litvak (2d Cir. 2015).
a. Testimony John Rollins
First, challenges court’s decision admit testimony John Rollins, which contends expert testimony did comply with prior notice requirement Federal Rule Criminal Procedure
Rollins accountant litigation consultant whom retained connection investigation into Coin.mx HOPE FCU. *15 Rollins was identified before trial as an expert witness, and no expert report provided the defense pursuant Federal Rule Criminal Procedure 16(a)(1)(G). Rather, he identified by the government as witness who would summarize various financial records.
At trial, Rollins testified about deposits made by the Collectables Club Kapcharge into Hope Cathedral’s bank account withdrawals made from same account pay for personal expenses. Rollins testified that funds withdrew same funds Collectables Club Kapcharge had deposited. In effect, he testified used some purported donations church from Collectables Club Kapcharge his own expenses.
Rollins based testimony an accounting methodology referred “first ‐ first ‐ out” “FIFO.” FIFO methodology assumes first funds deposited into account are funds used pay first withdrawals account. Rollins testified FIFO only one several methods could used, but instructed him use it. He also testified *16 that “intuitively, [FIFO] makes sense” light “how most people handle their finances.” App’x
After Rollins testified that method “makes sense,” defense counsel objected that was giving an expert opinion, district court expressed concern that Rollins had improperly opined that FIFO correct accounting method analyzing payments expenses. The court allowed Rollins testify using FIFO methodology after Rollins clarified that had specifically directed him use it. also later instructed jury Rollins expert witness they should not rely testimony establish using FIFO proper.
Under Federal Rule Evidence expert witnesses provide opinions when “the expert’s scientific, technical, or other specialized knowledge will help trier fact understand or determine fact issue.” Fed. R. Evid. 702(a). By contrast, summary witnesses may testify using “a summary, chart, calculation prove content voluminous writings, recordings, or photographs cannot conveniently examined court.” Fed. R. Evid. 1006; see also Fagiola Nat’l Gypsum Co. AC & S, Inc. (2d. Cir. 1990) *17 (explaining summary witness’s role providing “foundation testimony connecting [a summary] with underlying summarized”).
The district court did not abuse its discretion by admitting Rollins’s testimony. Once court clarified jury that Rollins was not endorsing FIFO methodology, within its discretion conclude Rollins’s application method not expert opinion but rather merely summary relevant financial records. The jury could applied assumption inherent FIFO methodology financial records without Rollins’s testimony. district court thus within discretion determine Rollins’s testimony did constitute expert testimony did not violate Rule 16’s notice requirement.
b. Co conspirator Hearsay Testimony
Next, challenges admission hearsay statements Coin.mx agents under Federal Rule Evidence 801(d)(2)(E) he contends made after he had withdrawn conspiracy. Specifically, contends erroneously admitted inculpatory messages sent between Coin.mx’s agents after had falling out them.
Under co ‐ conspirator exception hearsay rule, may offer hearsay statements “made by [defendant’s] co ‐ conspirator during furtherance conspiracy.” Fed. R. Evid. 801(d)(2)(E). However, “[o]nce a party withdraws from a conspiracy subsequent statements by a co ‐ conspirator do not fall within this exemption.” United States v. Nerlinger , 862 F.2d 967, 974 (2d Cir. 1988). Withdrawal “requires affirmative action . . . disavow or defeat purpose conspiracy.” Id. (internal quotation marks omitted). “That members a conspiracy had a disagreement a falling out is not, however, sufficient establish withdrawal from conspiracy.” United States v. James , F.3d 106 (2d Cir. 2013); see also United States v. Berger , 224 F.3d 107, 118 (2d Cir. 2000) (“[R]esignation a criminal enterprise, standing alone, does constitute withdrawal matter law . . . .”). “[A]bsent withdrawal, conspirator’s participation conspiracy presumed continue until last overt act any conspirators.” Salmonese (2d Cir. 2003) (internal quotation marks omitted). Because factual nature inquiry, “we will reverse decision admit co conspirator statements only *19 if it clearly erroneous.” James (internal quotation marks omitted). district court ruled there not sufficient had
withdrawn the conspiracy when the challenged co ‐ conspirator statements made preclude admission messages. Despite Gross’s dispute with Coin.mx’s agents, court did not clearly err concluding conspiracy still ongoing on November 2014, based on Gross’s continued involvement with Kapcharge continued efforts obstruct NCUA’s examination union. Therefore, error admit statements.
c. Limitation Examination Agent Beyer Next, both Lebedev contend improperly restricted their examination defense witness, Special Agent Emily Beyer Secret Service.
At trial, called Jose Freundt, employee Coin.mx, cooperating witness. On cross examination, Freundt testified about July meeting Agent Beyer concerning government’s investigation into *20 Coin.mx. He testified that, at this meeting, Agent Beyer had told him Coin.mx was going to shut down. When Freundt stated that Coin.mx still owed him compensation, Agent Beyer, according to Freundt, stated that he should “withdraw [his] salary [from a Coin.mx account] actually give [him]self a nice little bonus.” App’x 1913.
The defense sought to impeach Freundt’s credibility attacking truthfulness this testimony. After Freundt testified, Agent Beyer told FBI that she would not have instructed Freundt take any money Coin.mx. Her statement was memorialized FBI report that was produced defense counsel. then allowed call Agent Beyer witness
question her “in very tailored narrow way” help jury determine “whether key cooperating witness testified falsely.” App’x Agent Beyer testified that, while she did not recall conversation, she would never told Freundt take salary bonus which he not entitled. However, she also stated she told Freundt Coin.mx being shut down point permitted continue operating business.
Defense counsel sought to ask Agent Beyer about her prior statement to FBI, arguing contradicted her testimony, use FBI report refresh her recollection about whether Coin.mx being shut down. The district court disallowed questioning, finding no contradiction between Agent Beyer’s testimony her prior statement concluding such questions would irrelevant whether Freundt had lied testimony.
We review a district court’s limitation scope examination witnesses abuse discretion. In re Peters , F.3d 389 (2d Cir. 2011) (per curiam). “As long defendant’s right confront witnesses against him is not violated” district court’s decision limit examination is not grounds reversal. Roldan Zapata (2d Cir. 1990). In particular, questioning not “improperly curtailed if jury is possession facts sufficient make discriminating appraisal particular witness’s credibility.” Id. (internal quotation marks omitted).
The did abuse discretion restricting defense counsel’s questioning Agent Beyer. Freundt testified Agent Beyer instructed him pay himself salary bonus Coin.mx’s account. purpose calling *22 Agent Beyer was to impeach Freundt’s testimony, Agent Beyer unequivocally testified that she would not instructed him to do this. Agent Beyer’s statement to FBI that she had not told Freundt to take money from Coin.mx’s account does not contradict her testimony, court reasonably concluded that it not necessary jury learn this statement evaluate either Freundt’s Agent Beyer’s credibility. We also agree with district court necessary clarify whether Coin.mx being shut down jury determine whether Freundt had testified truthfully about Agent Beyer’s suggestion take money Coin.mx account.
d. Testimony about Insider Loans next contends offered prior act evidence under Federal Rule Evidence 404(b) without providing required notice. Specifically, points testimony by two NCUA examiners insider loans taken out Hope Cathedral, Gross, board member cover negative share balances church’s account HOPE FCU. overruled objection, finding testimony provided direct crimes which had been charged.
Rule 404(b) allows evidence a “crime, wrong, or other act” admitted if relevant, so long as it is not used as evidence character trait that person acted conformity with that trait on particular occasion. Fed. R. Evid. 404(b). The must give “reasonable notice” defendant it offering prior act evidence under this Rule. Fed. R. Evid. 404(b)(2)(A). However, Rule 404(b) does encompass acts “arose out same transaction or series transactions as charged offense,” are “inextricably intertwined with regarding charged offense,” are “necessary complete story crime trial.” Carboni (2d Cir. 2000) (internal quotation marks omitted).
Here, charged conspiring accept bribes as officer union disguising those bribes “donations” Hope Cathedral account. The government’s theory used money from Hope Cathedral account his personal expenses, theory contested trial. jury free consider challenged testimony establish both deposited own money into account received money personally. *24 Thus, this evidence was “necessary complete the story the crime[s] trial.” See id. (internal quotation marks omitted).
Accordingly, the court did not abuse its discretion concluding that this was Rule 404(b) evidence that the government was therefore not subject Rule’s notice requirement. [6] Constructive Amendment or Variance Indictment
Gross next contends that evidence at trial so differed conduct for which was indicted it constructively amended indictment. Specifically, points indictment’s omission any mention Kapcharge ACH transaction processing through HOPE FCU.
We review de novo properly preserved claim an indictment was constructively amended prejudicially varied. Dove (2d Cir. 2018). *25 “A constructive amendment occurs when the charge upon which the defendant is tried differs significantly the charge upon which the grand jury voted.” Id. at 146. To succeed such claim, defendant must demonstrate “the proof at trial the trial court’s jury instructions so altered an essential element of charge that, upon review, uncertain whether defendant was convicted of conduct subject of grand jury’s indictment.” Id. (internal quotation marks omitted). We “consistently permitted significant flexibility in proof, provided defendant given notice of core of criminality be proven trial.” D’Amelio 683 417 (2d Cir. 2012) (internal quotation marks omitted). charged with receiving corrupt payments as officer
financial institution with intent influenced in violation U.S.C. § 215(a)(2), well as conspiracy violate § 215(a), make false statements executive branch in violation U.S.C. § obstruct examination financial institution violation U.S.C. § conduct set forth indictment consists agreement Murgio, Lebedev, other Coin.mx agents transfer control union exchange over *26 $150,000, including the $120,000 payment the later proved came from Kapcharge. The indictment further details Gross’s efforts to mislead the NCUA about transfer of power and about the credit union’s financial health.
At the end of the trial, the instructed the jury as follows: Count One charges Yuri Lebedev Trevon Gross with conspiring with others, in or about April to in or about to achieve four unlawful objectives in an effort to further the operations Coin.mx or the Collectables Club: Number one, to make corrupt payments to Trevon with the intent to influence Trevon in connection with the business HOPE FCU; number two, to Trevon receive agree receive corrupt payments with the intent influenced in connection with the business HOPE FCU; number three, obstruct examination HOPE FCU NCUA; number four, make false statements NCUA in connection with NCUA’s examinations HOPE FCU.
App’x
No constructive amendment occurred. The jury instructions described conspiracy substantially same one charged indictment. Moreover, evidence trial directly addressed core criminality charged indictment: conspiracy Coin.mx transfer control union exchange bribes evade NCUA’s scrutiny thereafter. testimony about Kapcharge merely elaborated how *27 bribery conspiracy was accomplished; namely, Murgio enlisted Kapcharge pay the bulk the bribes in exchange access a financial institution through which could process ACH transactions. [7] contends, in the alternative, the evidence about Kapcharge
constituted a prejudicial variance from the conduct charged in the indictment. “A variance occurs when the charging terms the indictment are left unaltered, but evidence at trial proves facts materially different those alleged indictment.” Dove at (internal quotation marks omitted). “[R]eversal only warranted variance if defendant shows both: (1) existence variance, (2) substantial prejudice occurred trial as result.” Id. (internal quotation marks omitted). contends prejudiced introduction evidence about
Coin.mx’s conspiracy operate illegal Bitcoin exchange. But this evidence does constitute variance because Coin.mx’s illegal Bitcoin exchange charged indictment. also argues about Kapcharge *28 prejudiced him due to “unfair surprise” trial because involved alleged regulatory violations not identified government’s bill of particulars. But this was not unfairly and substantially prejudicial. The government disclosed exhibits concerning Kapcharge four weeks prior to trial, and much this proof subject motions limine. Witness Intimidation next contends violated right present witnesses intimidating other HOPE FCU employees prevent them testifying him.
A group former HOPE FCU board members employees retained single attorney represent them matters relating this case. On March counsel discussed which former board members wished call witnesses. purpose discussion determine whether any those individuals on government’s list board members potential criminal exposure, thus would need independent representation ensure counsel did conflicts. counsel asked if person named Loretta Larkins list. Although counsel *29 government initially indicated she was, counsel almost immediately corrected this, saying, “[s]orry, I’m getting confused. Bernard Larkins. Loretta Larkins a board member.” App’x
The same day, court ordered hearing for March 3, 2017, requiring former board members who were potential witnesses appear court consult appointed counsel, and, if necessary, participate hearing resolve whether their counsel had conflicts representation. Despite court’s order, none former board members attended March hearing indicated they willing testify.
On March indicated intended call Loretta Larkins witness because, as bookkeeper Hope Cathedral, she could testify about separation between Gross’s personal expenses church expenses. government recommended Larkins would need independent counsel because she may criminal liability, explaining if Larkins testified about church’s payments personal expenses, would cross ‐ examine her whether she reported these payments on tax returns she prepared Gross. The appointed independent counsel for Loretta Larkins. Ultimately, she did not testify.
To demonstrate due process violation based on government’s intimidation witnesses, defendant must show three elements: (1) “that deprived material exculpatory that could not be reasonably obtained by other means,” (2) “bad faith on part government,” (3) “the absence fundamental fairness infected trial.” United States v. Williams , F.3d 29 (2d Cir. 2000) (internal quotation marks omitted). The standard review such decision appeal is clear error. Pinto (2d Cir. 1988). due process claim meritless. First, failed show
Larkins unable testify because government “intimidation,” thus depriving him material exculpatory evidence. The government’s only concern she properly represented unconflicted counsel. That legitimate concern did prevent calling Larkins testify. Nor does show acted bad faith. government’s concern about former HOPE FCU board members’ employees’ potential *31 criminal exposure arose the context determining whether the attorney Hope FCU could represent them all without conflict interest, order notifying them March hearing addressed this concern. Although Gross contends that government implicitly held threat prosecution over former board members Larkins dissuade them from testifying, there no that government’s concern about their potential criminal exposure designed prevent calling witnesses defense. contends government acted bad faith when it apparently changed position about Larkins’s criminal exposure between March March record does not support any such suggestion. On March 1, government represented Larkins not on list board members potential criminal exposure based on their knowledge payments Hope Cathedral, because Larkins not board member. On March represented Larkins may criminal exposure on different basis—namely, her anticipated testimony about Hope Cathedral’s payments could expose her criminal liability if did match tax forms she had prepared behalf.
* * *
Because we find no error district court’s evidentiary constitutional rulings, we also reject Gross’s contention cumulative effect court’s errors deprive him of fair trial. We affirm both Gross’s Lebedev’s convictions. Sentence
Finally, challenges several aspects sentence. On November 16, sentenced principally 60 months’ imprisonment three years supervised release. a. Appropriateness Sentencing Enhancements “We review district court’s interpretations Sentencing Guidelines de novo related findings fact clear error.” Cain (2d Cir. 2012). first argues erred applying level leadership enhancement under U.S.S.G. § 3B1.1 “an organizer or leader criminal activity involved five more participants or otherwise extensive.” U.S.S.G. § 3B1.1(a). guidelines “only require defendant *33 be an organizer or leader one or more those participants the section 3B1.1(a) enhancement appropriate.” Si Lu Tian (2d Cir. 2003). Gross contends that the failed show that he an organizer leader.
At sentencing, the district court concluded that Gross supervised at least one other individual who processed ACH transactions, that he remained the chairman the credit union even after the Coin.mx board members elected, that he never relinquished influence over the credit union, that able expel Coin.mx agents credit union. Moreover, the court noted that met repeatedly NCUA throughout course conspiracy.
These factual findings district court are clearly erroneous. As discussed above, trial demonstrated essential conspiracy transfer control union Coin.mx mislead NCUA about transfer power.
Next, contends erred applying enhancement under U.S.S.G. § 2B4.1 commercial bribery “substantially jeopardized safety soundness financial institution.” U.S.S.G. *34 § 2B4.1(b)(2)(B). A financial institution is considered “substantially jeopardized,” if “became insolvent” or “was placed substantial jeopardy” of becoming insolvent. U.S.S.G. § 2B4.1 cmt. n.5.
district court concluded at sentencing Kapcharge’s ACH transactions created a substantial risk of insolvency because, among other reasons, HOPE FCU severely undercapitalized support these transactions. This conclusion by district also clearly erroneous. Indeed, trial demonstrated himself believed HOPE FCU had insufficient capitalization support volume of transactions Kapcharge processing.
Next, challenges court’s imposition a two ‐ level enhancement under U.S.S.G. § 3B1.3 abuse position trust by use special skill “in manner significantly facilitated commission or concealment offense.” U.S.S.G. § 3B1.3. A position trust “is held by one who accorded discretion victim abused position fiduciary quasi fiduciary status.” Huggins (2d Cir. 2016).
*35 At sentencing, district court determined that, among other things, abused position of trust toward members of his credit union allowing bribery payments influence him make decisions jeopardized credit union’s financial health. This finding clearly erroneous. As discussed above, decision allow Kapcharge continue processing high volumes of ACH transactions put union significant risk of insolvency, which could negatively affected members.
b. Restitution Order
Finally, challenges district court’s order restitution requiring him pay $126,771.82 NCUA losses incurred following liquidation HOPE FCU. We review orders restitution abuse discretion. United States v. Boccagna 450 F.3d 113 (2d Cir. 2006). “To identify such abuse, we must conclude challenged ruling ‘rests error law, clearly erroneous finding fact, otherwise cannot located within range permissible decisions.’” Id. (quoting Gonzalez, 420 (2d Cir. 2005)). ordered restitution pursuant U.S.C. § *36 and § 3663A. sole argument the NCUA’s losses were caused large part conduct postdating the conspiracy for which convicted— namely, credit union’s continued processing ACH transactions for Kapcharge.
At sentencing, imposing restitution for NCUA’s total losses, district court found that,
but bribery, which involved KapCharge, and pursuant which Mr. Murgio and Collectables Club facilitated unsafe volumes ACH transactions union, credit union would not ultimately have adopted business model relying fees from ACH transactions, would not have partnered KapCharge and implemented unsafe ACH processes, would not have ended up state where all its directors ethically compromised, and would not have adopted model incurring high and unsustainable operating costs. Additionally, I find that, but obstruction false statement objects, bribery would have been discovered, which would have both ended unsafe practices earlier prevented continuation KapCharge’s relationship, such discovery could prevented losses NCUA ultimately sustained.
App’x These findings are clearly erroneous. well within discretion conclude HOPE FCU’s financial difficulties proximately flowed Coin.mx’s bribery related processing Kapcharge transactions. *37 III. Conclusion
1 2 For foregoing reasons, we AFFIRM judgments court.
[*] Clerk Court directed adopt caption set forth above.
[1] This appeal consolidated third defendant, Anthony R. Murgio. On May Court granted Murgio’s motion voluntarily dismiss appeal.
[2] Bitcoin offers users increased anonymity compared with many other virtual traditional currencies, “mak[ing] more difficult law enforcement quickly efficiently obtain information users . . . engaged criminal activity.” Kevin V. Tu, Michael W. Meredith, Rethinking Virtual Currency Regulation Bitcoin Age W ASH . L. R EV . (2015). Because susceptibility use illegal transactions, many banks refuse transact businesses dealing Bitcoins.
[3] By taking control credit union, Coin.mx no longer risked being shut down banks uncovered true nature Bitcoin transactions. Customers could open accounts union use their accounts buy Bitcoins Coin.mx.
[4] While Kapcharge did seek work union process risky Bitcoin transactions, did seek process large volume transactions—in tens millions dollars.
[5] On November demanded additional $50,000 donation church exchange resignation remaining board members who predated Coin.mx’s takeover union. Although remaining board members resigned, Coin.mx failed make $50,000 payment deadline.
[6] To extent argues this evidence used substantively for impermissible “propensity” purpose, we reject this argument. To support contention, notes referred these loans additional deceitful conduct for consider at sentencing. But purpose which used at sentencing irrelevant purpose which admitted trial.
[7] There also no constructive amendment misrepresentations NCUA. misrepresentations presented jury well within allegations obstruction indictment.
[8] Bernard Larkins member Board.