Opinion
02 cr. 122 (JGK)
October 2, 2003
OPINION AND ORDER
The defendants Thomas M. Rittweger, Douglas C. Brandon, Robert S. DeHaven, and Victor M. Wexler were charged in a thirteen-count superceding indictment described at length in this Court's prior opinion, familiarity with which is assumed. See United States v. Rittweaer, 259 F. Supp.2d 275 (S.D.N.Y. 2003). Following a trial that began on May 5, 2003, on June 26, 2003, the jury found all the defendants guilty of all charges, except that the jury did not reach a verdict with respect to whether Brandon was guilty of securities fraud with respect to the victim Stephen Joffe as charged in Count Two, and whether Rittweger, DeHaven, and Wexler conspired to commit the object of securities fraud-in addition to the objects of wire fraud and violating the Travel Act, for which the jury found them guilty-as charged in Count Nine.
Defendants Brandon and Wexler have now moved for a judgment of acquittal pursuant to Rule 29 of the Federal Rules of Criminal Procedure based on the alleged insufficiency of the evidence at trial. Defendant Brandon also moves for a new trial pursuant to Rule 33 of the Federal Rules of Criminal Procedure based on the claim that the verdict is against the weight of the evidence. He further asserts that he should be granted a new trial because the Court allegedly improperly denied his pre-trial motion for severance. Defendants Rittweger and DeHaven join the motions to the extent that they may be applicable to them but have not raised any independent arguments. The motions are denied.
I. A.
A defendant challenging the sufficiency of the evidence under Rule 29 bears a "heavy burden." United States v. Glenn, 312 F.3d 58, 63 (2d Cir. 2002) (quoting United States v. Matthews, 20 F.3d 538, 548 (2d Cir. 1994)); United States v. Autuori, 212 F.3d 105, 114 (2d Cir. 2000) (same). The defendant must demonstrate that "no rational trier of fact could have found the essential elements of the crime charged beyond a reasonable doubt." United States v. McDermott, 245 F.3d 1-33, 137 (2d Cir. 2001) (internal quotation omitted). "This standard derives from Jackson v. Virginia, in which the Supreme Court instructed that the relevant question is whether . . . any rational trier could have found the essential elements of the crime beyond a reasonable doubt.'" Glenn, 312 F.3d at 63 (citation omitted) (quoting Jackson v. Virginia, 433 U.S. 307, 319 (1979)).
In making this determination, "all reasonable inferences are to be resolved in favor of the prosecution and the trial court is required to view the evidence in the light most favorable to the Government with respect to each element of the offense." United States v. Thorn, 317 F.3d 107, 132 (2d Cir. 2003) (quoting United States v. Artuso, 618 F.2d 192, 195 (2d Cir. 198O)). Moreover, in reviewing the sufficiency of the evidence, the Court must "defer to the jury's assessment of witness credibility and the jury's resolution of conflicting testimony." United States v. Bala, 236 F.3d 87, 93-94 (2d Cir. 2000). Additionally, each piece of evidence, direct and circumstantial, must be viewed "in conjunction, not in isolation."United States v. Abelis, 146 F.3d 73, 80 (2d Cir. 1998) (quoting United States v. Podloa, 35 F.3d 699, 705 (2d Cir. 1994)). While the defendant's conviction may be based solely on reasonable inferences drawn from circumstantial evidence, it cannot rest on mere speculation or conjecture. See United States v. Pincknev, 85 F.3d 4, 7 (2d Cir. 1996); United States v. Strauss, 999 F.2d 692, 696 ( 2d Cir. 1993).
The evidence was more than ample for a reasonable jury to conclude beyond a reasonable doubt that each of the defendants was guilty of the crimes for which he was found guilty.
B.
Brandon argues primarily that there was insufficient evidence upon which a rational jury could have concluded that Brandon had the specific intent to knowingly and willfully join the conspiracy to commit securities fraud and wire fraud as charged in Count One, and to commit securities fraud and wire fraud as charged in Counts Three through Eight. During the trial, Virginia Allen, an alleged co-conspirator, died before she was able to testify, and various prior statements by Allen were read to the jury. Brandon relies substantially on prior grand jury testimony from Allen that, by the time Dr. Joffe entrusted more than $8 million of securities in the fraudulent scheme in September 1997, Allen had asked Brandon to return signature cards so that he could be added as a signatory to the bank accounts; but Blech told Allen that he had not added Brandon as a signatory to the accounts because Blech did not want Brandon to be a signatory. (Tr. 2485.) Allen also testified that at the time Brandon signed the Trust Engagement letter with Dr. Joffe in September 1997 (Gov't Ex. 420 C.) and represented that Dr. Joffe's securities were to be "held by me in the irisure3'ccount for which I am the sole signatory," "I [Allen] believe he [Brandon] did not know that it [the representation] was false." (Tr. 2488.) The jury could not reach agreement on whether the evidence established beyond a reasonable doubt that Brandon was guilty of securities fraud in connection with the investment by Dr. Joffe that occurred in September 1997.There was evidence from which the jury could have found that Brandon knew that he was not the sole signatory on the Credit Bancorp Limited ("CBL") accounts even as early as the Joffe transaction in which Joffe entrusted over $8 million of securities pursuant to a Credit Facility Agreement and the Trust Engagement letter with Brandon. For example, the initial letter from Blech engaging Brandon as the Insured Trustee asked Brandon to send copies of his passport and three guaranteed signatures so that "we can add your signature to our bank accounts." (Brandon Ex. 101.) There is no suggestion in the engagement letter that Brandon was to be the sole signatory on any accounts. Moreover, Blech testified, and the jury was entitled to believe, that he told Brandon that he had to come to Europe to be added as a signatory to the CBL accounts and that Brandon never came. (Tr. 421-24; Gov't Ex. O.) Faced with some conflicting evidence, the jury could not agree on Brandon's guilt on Count Two, which charged securities fraud in connection with the Joffe Transaction in September 1997.
In any event, the evidence powerfully established that Brandon knew without doubt that his representations were false but he continued to make false representations to investors, and he joined with his co-conspirators in the conspiracy. In the face of that knowledge, he chose to continue to make the representations and to participate in the conspiracy.
A central part of the conspiracy charged in Count One and the securities and wire fraud charges in Counts Three through Eight was the false representation to investors that Brandon would act as a trustee for their stock, including: that he would be the sole signatory for such accounts; that the stock would not be sold or otherwise disposed of except as provided in the agreements; and that any assets would be returned upon the customer's request, so long as any debt obligations of the customer were satisfied. In the Trust Engagement Letter that Brandon signed on or about September 2, 1997, Brandon specifically represented to Dr. Joffe that Brandon was the "signing officer for all Credit Bancorp Limited insured trustee accounts," and that Dr. Joffe's securities were held by Brandon "in an insured account for which I am the sole signatory." (Gov't Ex. 420 C.) When Joffe requested a return of his shares in October 1997, it was clear that Brandon did not have control over those shares and could not effectuate their return, all of which was inconsistent with the representations' that Brandon had made to Dr. Joffe. (See, e.g., Gov't Ex. 430.) Rather than returning to Dr. Joffe the shares, which the jury could have found he had no power to return, in December 1997, Brandon recommended to his co-conspirators, Rittweger and Allen, that Joffe be paid for the shares that had not been returned to him: "This would not only, at least temporarily, satisfy Dr. Joffe and delay any potential litigation he may initiate but would also strengthen our legal position should he accept such a payment and later decide to initiate litigation." (Id.) It became clear that Brandon did not know where the shares were held and that it was Blech, not Brandon, who was in control of having the shares returned. (See Gov't Exs. 453, 461.) The matter was not resolved until April 1998.
Despite the fact that it was clear that Brandon was not the sole signatory on the CBL accounts in which relevant shares were held-and indeed not a signatory at all in fact for those accounts (Tr. 146-47) and despite the fact that Brandon clearly did not have control over the accounts to assure that the shares entrusted by investors would be kept for them and returned as requested pursuant to the applicable agreements, Brandon continued to make false representations to investors. In February 1998, Brandon signed a Trust Engagement letter with William St. Laurent on behalf of Wolf Partners pursuant to which Wolf Partners entrusted over $26 million worth of stock in a CBL Insured Credit Facility. In that engagement letter, Brandon represented: "As the signing officer for all Credit Bancorp Limited trustee accounts, I represent on behalf of Credit Bancorp Limited and myself that the securities, as held by me in the insured account are not an asset of Credit Bancorp Limited. . . ." (Gov't Ex. 175 B.) He also represented that the securities "may not be sold, transferred, pledged, hypothecated, or otherwise disposed of except as provided for in the [Insured Credit Facility Agreement]." (Id.) In view of his experience with the shares from Dr. Joffe, the jury could have reasonably concluded that Brandon could not have believed that these representations were true, and the jury could have reasonably concluded that the representations were false. Indeed, when St. Laurent requested the return of most of the shares in August 1998 (Gov't Ex. 515), the shares were not returned, and Brandon engaged in delaying tactics, explaining to St. Laurent that calculations had to be made about the amount of shares that could be released. (Gov't Ex. 516.) Brandon showed no ability to effectuate the return of the shares he had represented he would control, and it was Rittweger and ultimately Blech in August, 1999, who were responsible for the return of the shares. (Tr. 1828-37; Gov't Ex. 527.)
Meanwhile, while the jury could reasonably have concluded that Brandon knew he was not a signatory on the" CBL" accounts and had no control over stock placed in them as a result of his experiences with the Joffe stock and St. Laurent's stock, Brandon made similar false representations to Charles Stephenson of Stephenson Equity Co. ("SECO") in connection with SECO's decision to place over $90 million of Vintage Petroleum, Inc. stock allegedly into accounts controlled by Brandon. In the Credit Facility Agreement, which Brandon signed on June 15, 1999, it was falsely represented that "CBL will engage [Brandon] . . . to act as Trustee, to hold the Assets for the life of the credit facility in a CBL account for the benefit of SECO and CBL." (Gov't Ex. 171 A.) The jury reasonably could have concluded that it was not in fact Brandon who was holding the stock in any sense. Brandon also agreed that the "Trustee shall subordinate any fiduciary or other duty he may have toward CBL or its affiliates in favor of Trustee's fiduciary duty toward SECO, which fiduciary duty is hereby acknowledged and confirmed." (Id.) The jury could reasonably have concluded that Brandon did not exercise fiduciary duties in favor of SECO. In the Trust Engagement letter dated June 15, 1999, Brandon falsely represented that: "I am the signing attorney-in-fact for all CBL trustee accounts. These securities are to be held by me in a CBL account and may not be sold, pledged, assigned, margined, liened, hypothecated, or otherwise disposed of except as provided in the [Credit Facility Agreement]." (Gov't Ex. 171 B.) Mr. Stephenson testified that having a Trustee was one of the most important aspects that he needed to enter into the agreement with respect to the stock: "Well, I'm talking abouty having a trustee, and this may not be the final agreement that we had with Brandon, but having a trustee who was to look after my stock and my security and place those interests ahead of CBL's interests. . . . Well, it was important that someone who had an agreement with me would have full control of that stock." (Tr. 2177.)
The jury could well have found, based on the evidence that Brandon had no control over the accounts in which the stock of the investors was held and that Brandon knew that from his experience in being unable to retrieve stock. Moreover, Brandon did not receive the account statements or know in what particular places stock was held, yet Brandon continued to enter into trust engagement letters. (See, e.g., Tr. 146-47, 2904-12, 2920.) Moreover, Brandon received substantial compensation for his activities (Tr. 275), and he had a powerful motive to continue to participate in the conspiracy to obtain the investors' funds based on the false representations.
Brandon, a lawyer, demonstrated that he actually had an acute awareness of the falsity of the representations that were being made to investors. In a March 9, 1998 memo to Blech, Allen, Rittweger, and another CBL associate, Brandon wrote:
Recently, in my contacts with" custody depository banks for certain ICF transactions (double Eagle and Joffe) I have been specifically told by Credit Lyonnais and the Bank of New York that the letter of engagement and trust agreement and ICF agreement do not provide this office with sufficient authority as trustee to direct the return of client assets as specified in the letter of engagement, trust agreement and ICF Although I strenuously disagree with the banks' position, and, I believe I would prevail in any court with regard to that authority, it remains a matter of grave concern that the banks have universally refused to recognize the trustee's authority.
I am particularly concerned as this matter constitutes a material fact which should be disclosed to the client, preferably in writing as a part of the trust agreement or preliminary to entering in the ICF agreement, to be in compliance with Rule 10b of the 1933 Securities Act. Failure to make such a disclosure could be the grounds for a securities fraud case against Credit Bancorp Ltd., and, possibly individuals who are involved in the transaction, including this office.
(Gov't Ex. 709.) The jury reasonably could have perceived this memo as reflecting Brandon's knowledge that he lacked control over the accounts, as confirmed by the banks that held the stock, The jury could reasonably have discounted Brandon's self-serving statements that he would prevail in Court, and the jury could have reasonably read this letter as demonstrating that Brandon knew that the false representations could be grounds for a securities fraud case against CBL and others, including Brandon. Despite this awareness, Brandon continued to engage in the same transactions and make the same representations for veil over a year. This and other evidence established overwhelmingly that Brandon knew full well that the representations that he and others were making to investors were false, yet he decided to continue to agree with others, including Blech and Rittweger, to serve as a trustee so as to effectuate the objectives of the conspiracy. There was ample evidence that Brandon had the specific intent to participate in the conspiracy and to commit the substantive offenses of which the jury found him guilty.
C.
The evidence amply supported the jury's verdict that Wexler conspired with others, particularly Rittweger and DeHaven, to commit, and that he did commit, wire fraud and commercial bribery in violation of the Travel Act. Wexler does not question that there was powerful evidence, reflected in actual tape recordings, that DeHaven, a vice president of Mitsui Trust Company ("Mitsui") who was responsible for securities lending, misrepresented to numerous potential investors that Mitsui had made a substantial investment in CBL-in some cases, a representation that the investment was at least $50 million and potentially more. (Tr. 1724; Gov't Exs. 651T, 655T, 656T, 674T.) These representations were blatantly false. Mitsui made no such investment. Wexler argues, however, that there is insufficient evidence from which the jury could have concluded that he had any knowledge that DeHaven was acting as a bogus reference for CBL and being paid to act as such a reference for CBL, and thereby breach DeHaven's fiduciary duties to Mitsui, and receive a commercial bribe. The evidence, however, was more than sufficient to establish Wexler's specific knowledge and intent.
DeHaven was a neighbor and friend of Wexler. (Tr. 1272-73.) Wexler and DeHaven worked together to attempt to get Mitsui as a potential investor in CBL. Wexler, who knew DeHaven, was the person responsible for introducing Mitsui to CBL as a potential investor. (Tr. 653.) DeHaven, in turn, attempted to interest Mitsui in investing in CBL as a potential borrower for stock held by Mitsui. (Gov't Exs. 608-10.) Wexler and Rittweger made the initial presentation, on behalf of CBL, to DeHaven and Yuji Ogino, the Senior Vice President of Mitsui in October 1997. (Tr. 665, 1730; Gov't Ex. 610.) Mitsui did not, however, invest with CBL. (Tr.671, 1730-31.) If Mitsui had invested in CBL, Rittweger told Blech that both DeHaven and Wexler were to be paid a fee; Wexler was to be paid a fee for bringing Mitsui to the table. (Tr. 674.) Even though the Mitsui deal never closed, Rittweger told Blech that DeHaven was to be paid a fee for acting as a reference for CBL. (Tr. 676.) The jury could well have found that this was payment for being a false reference because the evidence is clear that Mitsui never closed a deal with CBL and thus there was no basis for DeHaven providing a reference for CBL. The evidence from the tapes is also clear that Wexler was attempting to keep track of the potential contacts made by DeHaven and that Wexler was to share in any fees that were made by DeHaven from CBL. (Gov't Exs. 653T, 654T, 656T, 658T.) Given the fact that no deal with Mitsui had closed, and Wexler knew that no deal had closed, and there was no basis for DeHaven to receive payments from CBL for being a reference other than acting as a false reference, the jury could conclude that Wexler knew he was being paid a share of the payments for the false references. (Tr. 1273.)
In addition, there was direct evidence on the tapes that Wexler knew that DeHaven was making blatantly false pitches to potential investors in CBL. On March 11, 1999, DeHaven made a false pitch to representatives of Allegheny Teledyne explaining how Mitsui came to invest with CBL. The telephone call was recorded on Mitsui's taping system and the tape was received in evidence and played for the jury with the transcript as an aid to the jury. (Gov't Ex. 655T.) DeHaven explained how Mitsui relied for its investment on the Lloyds insurance policy issued through Marsh McLennan-that was the real credit. He explained that Mitsui had a program of $50 million with CBL, which was to be increased to $100 million after the end of the year; with the authority to go up to $300 million. All of this was false. The same afternoon, DeHaven called Wexler in a telephone conversation that was also recorded and played for the jury. x (Gov't Ex? 656T.) DeHaven described to Wexler the pitch that had been made to Allegheny Teledyne. The pitch described unmistakably indicated that Mitsui had invested in CBL, although DeHaven did not describe the exact amount of the fictitious investment that he had misrepresented to Allegheny:
DeHaven: I talked to Allegheny Teledyne.
Wexler: Uh-huh.
DeHaven: Two (2) guys, uh, Mike Stabar and Mike Brian.
Wexler: You wrote their names down.
DeHaven: Yeah, I got them.
Wexler: Yeah.
DeHaven: And uh, they said as long as . . . You know we talked about how we did it and I said we structured it like a securities loan and the guy is familiar with securities lending so he said, if he can structure it like securities loan, he's in. That's . . . that's a quote. Uh, I said, well, you talk to Tom about that.
Wexler: Okay.
DeHaven: And uh, also he said, did you talk to anybody about uh, you know references. I said, yeah, we spoke to some executives, but you know their situation didn't apply to us. They have legends on their stock and all that other crap and . . . I said, uh . . . you know, we got uh, a letter from Citicorp overseas, that said they dealt with them, so you know that was enough for us. I said, really the credit is in Marsh McLennan.
Wexler: And Lloyds London.
DeHaven Yeah, and that's what was looked at. And uh, so he basically left going away saying I'm in.
(Gov't Ex. 656T.) Wexler and DeHaven then discussed the money that they would make if Allegheny Teledyne invested in CBL:
Wexler: Take . . . eighty million (80,000,000) times a quarter of a point.
DeHaven: He's not gonna give you a quarter.
Wexler: He said he would.
DeHaven: No, he won't.
Wexler: What's one point of eighty million (80,000,000). Eight hundred thousand (800,000). So a quarter is two hundred grand.
DeHaven: Yeah.
Wexler: One deal, and we made back a hundred a sixty (160) plus. Ahh!
DeHaven: You did.
Wexler: (Laughs)
DeHaven: (Laughs)
Wexler: Yeah, I did.
(Id.) The import of this conversation is plain, and a rational jury could certainly conclude that DeHaven described the false pitch he had made to Allegheny Teledyne that explained how Mitsui came to invest in CBL, a completely false description, and that DeHaven and Wexler gleefully discussed sharing a substantial commission if this deal, based on the false representation by DeHaven, which was known to Wexler, in fact closed.
On March 22, 1999, DeHaven and Rittweger had a conversation that was also recorded. (Gov't Ex. 64OT.) In that conversation Rittweger described how he was pursuing Allegheny Teledyne and DeHaven urged: "So let's get Allegheny under the, uh . . . under our belt." DeHaven also added, "Once we get Allegheny everything will be fine." (Id.) Rittweger then says that he just sent Wexler a check for $4800. The jury could reasonably have concluded that this check was a payment to Wexler for DeHaven's fraudulent efforts because there was no other reasonable reason for Rittweger to explain this payment to DeHaven.
The evidence of Wexler's knowledge was reinforced by the false exculpatory statements that he made to FBI agents on June 13, 2001. Wexler said that he had not heard of a company called Allegheny Teledyne, which the tapes showed was a false exculpatory statement. (Tr. 1272.) Wexler also falsely denied that he had any arrangement with DeHaven concerning CBL, and that his only arrangement was that he would get a referral commission for anyone that Wexler brought to CBL. (Tr. 1273.) Wexler also falsely stated that he had no knowledge of DeHaven speaking with potential clients, and he "certainly had no knowledge of DeHaven telling these clients that Mitsui had closed a deal." (Tr. 1273.) The jury could well have found that all of these statements were false exculpatory statements and indicates Wexler's consciousness of guilt.
Wexler's motion has concentrated on his knowledge. He has not disputed, for purposes of this motion, that the other elements of the conspiracy charged in Count Nine and the substantive Travel Act violations charged in Counts Ten through Thirteen were satisfied. There was more than sufficient evidence for a rational jury to find that all of the elements of each of the offenses was proved beyond a reasonable doubt including Wexler's requisite knowledge.
II.
Brandon moves for a new trial pursuant to Rule 33 of the Federal Rules of Criminal Procedure on the grounds that the interests of justice support such a determination and that the Court allegedly should have granted Brandon a severance from trial with Rittweger, DeHaven, and Wexler.
A.
Rule 33(a) of the Federal Rules of Criminal Procedure states that the court may grant a defendant's motion for a new trial "if the interest of justice so requires." Fed.R.Crim.P. 33(a); United States v. Mittal, No. 98 Cr. 1302, 2000 WL 1610799, at *2 (S.D.N.Y. Oct. 27, 2000), aff'd, 36 Fed. Appx. 20, 2002 WL 1275105 (2d Cir. 2002). The rule by its terms gives the trial court "broad discretion . . . to set aside a jury verdict and order a new trial to avert a perceived miscarriage of jusice." United States v. Sanchez, 969 F.2d 1409, 1413 (2d Cir. 1992). Because the courts generally must defer to the jury's resolution of conflicting evidence and assessment of witness credibility, "[i]t is only where exceptional circumstances can be demonstrated that the trial judge may intrude upon the jury function of credibility assessment." Sanchez, 969 F.2d at 1414. "An example of exceptional circumstances is where testimony is `patently incredible or defies physical realities,' although the district court's rejection of trial testimony by itself does not automatically permit Rule 33 relief."United States v. Ferguson, 246 F.3d 129, 134 (2d Cir. 2001) (quoting Sanchez. 969 F.2d at 1414).
In order to grant a motion for a new trial under Rule 33, "[t]here must be a real concern that an innocent person may have been convicted."Sanchez, 969 F.2d at 1414. "Generally, the trial court has broader discretion to grant a new trial under Rule 33 than to grant a motion for acquittal under Rule 29, but it nonetheless must exercise the Rule 33 authority `sparingly' and in `the most extraordinary circumstances.'" Ferguson, 246 F.3d at 134 (quotingSanchez, 969 F.2d at 1414).
B.
Brandon argues that he is in fact an innocent man and relies on his arguments with respect to his alleged lack of knowledge of the false representations that were being made to investors in CBL. However, the evidence against Brandon was very powerful, for the reasons only briefly summarized above. The evidence amply satisfies the Court that this is not a case where the jury's verdict has resulted in a miscarriage of justice or the conviction of an innocent person. The evidence was more than sufficient to support the jury's verdict against Brandon.
In his reply brief, the defendant does concentrate on the admission of Government Exhibit 303 O, a March 6, 1997 letter allegedly sent by Blech to Brandon in which Blech advised Brandon to come to Europe to be added as a signatory on CBL's bank accounts, which Brandon did not do. Blech testified that he sent the document to Brandon and that he subsequently faxed the document to his father from whom it was obtained in the course of the trial. (Tr. 419-21.) Brandon argues that the document was fabricated by Blech, although Brandon does not allege that the Government is responsible for any wrongdoing in connection with the document. However, the Court heard extensive arguments at trial out of the presence of the jury in connection with the admissibility of the document. The Court allowed a voir dire of Blech out of the presence of the jury in order to allow counsel for Brandon to support his arguments that the document should not be admitted. (Tr. 396-404.) Neither that examination nor the arguments of counsel established a basis for excluding the document. Brandon does not argue now that the admission of the document was contrary to the Rules of Evidence but rather that the Court should disbelieve Blech's sworn testimony as to the authenticity of the document. There is no basis to do so. Brandon had every opportunity to cross-examine Blech before the jury to show that the document was fabricated, and he argued at length to the jury that the document was fabricated. (Tr. 1059-60, 3321-29.) It was for the jury to assess Blech's credibility with respect to the document and the Court cannot conclude on the basis of the testimony and the record that admissibility of the document was in any way erroneous.
Moreover, Brandon exaggerates the importance of the document. It is plain to the Court that admission of the document did not prejudice Brandon. The jury was very careful in its deliberations. It was unable to reach a verdict with respect to Count Two, the securities fraud count relating to the Joffe transaction in September 1997, six months after the document was allegedly sent to Brandon. The evidence of Brandon's knowledge of the fraudulent representations accumulated over time as explained above and therefore the jury found beyond a reasonable doubt that by the time of the Wolf Partners transaction charged in Count Three in April 1998, Brandon had the requisite knowledge and intent. The result would have been the same even without the document, which, in any event, was properly admitted.
The motion for a new trial based on the alleged insufficiency of the evidence is denied.
C.
Brandon also urges that a new trial should be granted because the Court allegedly erred in denying his motion for a severance, which would have resulted in his trial being severed from that of the remaining three defendants. For the reasons already explained in the court's pretrial decision, the motion was properly denied. See Rittweaer, 259 F. Supp.2d at 283-86.
Brandon argues that there was prejudicial spillover from the admission of the evidence with respect to Counts Nine through Thirteen. However, much of the background with respect to those counts would have been admissible against Brandon in any event because the scheme that was being marketed by DeHaven was in fact the scheme whereby investors would invest their funds with Brandon as insured trustee. In any event, when the Mitsui transactions were discussed, the Court repeatedly gave limiting instructions that evidence was not be considered against Brandon.
Similarly, Brandon argues that the evidence was powerful against Rittweger, including the lavish gifts that he received. However, there is no indication of any prejudice against Brandon from this evidence. Brandon himself received compensation of $10,000 a month, and Brandon does not explain why the jury would have had any difficulty distinguishing between the stake that each of the defendants had in the transactions at issue.
The jury deliberated at length in the case and considered the evidence carefully. The Court instructed the jury that it was required to consider separately each Count and each defendant's involvement in those Counts, and that the jury must return a separate verdict on each defendant on each Count. (Tr. 3533.) The Court also instructed the jury that guilt was personal and that its verdict "must be based solely upon the evidence or lack of evidence about each defendant. The case against each defendant, on each Count, stands or falls upon the proof or lack of proof against that defendant alone, and your verdict as to any defendant on any count should not control your decision as to any other defendant on any other count." (Tr. 3533-34.) It is plain that Brandon was not harmed by any prejudicial spillover. The jury was specifically unable to reach a verdict with respect to Count Two relating to Brandon. See United States v. Hamilton, 334 F.3d 170, 183 (2d Cir. 2003) ("[W] here the record indicates that the jury was able to distinguish between counts or between defendants, and to assess separately the evidence pertinent to each, we have found no basis for concluding that a new trial was warranted for prejudicial spillover.")
Brandon also argues that his joint trial with Rittweger prevented him from introducing evidence that Allen said that Rittweger, as well as Blech and Allen, was part of an understanding not to tell Brandon anything. (Gov't Ex. 3507 F, at 5.) This evidence would have made no difference at the trial. There is a substantial question whether this alleged statement from Allen to the Government could have been admitted at a separate trial of Brandon. Allen's statements were admissible at trial because she was unavailable and the statements were against her pecuniary or penal interest. See Fed.R. Ev. 804(b)(3). The Court allowed statements by Allen about the way in which she and Blech may not have told various things to Brandon, because that was at least against her interest when made. However, it is difficult to see why her statements allegedly implicating Rittweger would fall under the same exception to the rule against admitting the hearsay statements of Allen.
In any event, it is clear that the statements would not have made a difference at the trial. Allen's statements about what she and Blech agreed not to tell Brandon were admitted before the jury. Whether Rittweger also agreed not to tell Brandon the same things was irrelevant. In addition, as explained at length above, whatever Brandon was not told initially, it was clear that over time Brandon was well aware of the falsity of the representations. There is nothing in the hearsay statement by Allen about Rittweger that affected that evidence in any way.
The motion for a new trial is therefore denied.
IV.
Rittweger and DeHaven have joined the motions to the extent that the motions relate to them. They have not attempted to point to any particular issues where the evidence was deficient with respect to them, nor have they attempted to argue that no rational jury could have found them guilty beyond a reasonable doubt of the offenses with which they were charged. The evidence was more than sufficient against Rittweger and DeHaven and there is no basis to overturn the jury's verdict with respect to them. To the extent that they have relied on alleged defects in the evidence against Brandon and Wexler, for the reasons explained above, the evidence on all of those issues was more than sufficient.
Conclusion
For the reasons explained above, the motions pursuant to Federal Rules of Criminal Procedure 29 and 33 are denied.
SO ORDERED.