Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca2-14-01859/USCOURTS-ca2-14-01859-0/pdf.json

Parties Involved:
Peter Ghavami

Gary Heinz
Appellant
United States of America
Appellee USA
Michael Welty

Document Text:

13-3119(L) 

United States v. Heinz 

1 UNITED STATES COURT OF APPEALS

2 FOR THE SECOND CIRCUIT

3 

4 August Term, 2014

5 

6 (Argued: May 15, 2015     Decided: June 4, 2015)

7 

8 Docket Nos. 13‐3119‐cr(L), 13‐3121‐cr(CON), 13‐3296‐cr(CON), 

9 14‐1845‐cr(CON), 14‐1857‐cr(CON), 14‐1859‐cr(CON)

10 

11 _____________________________________ 

12 

13 UNITED STATES OF AMERICA,

14 

15 Appellee,

16 

17 v.

18 

19 GARY HEINZ, MICHAEL WELTY, PETER GHAVAMI,

20 

21 Defendants‐Appellants.

22 

23 _____________________________________ 

24 

25 Before:   

26 

27 WINTER, LOHIER, and CARNEY, Circuit Judges.

28 

29 Defendants‐appellants Gary Heinz, Michael Welty, and Peter Ghavami

30 appeal from judgments of conviction entered by the United States District

31 Court for the Southern District of New York (Wood, J.), following a jury trial

32 where the Defendants were convicted of conspiracy to commit wire fraud in

33 violation of 18 U.S.C. §§ 371 and 1349 and, as to Heinz and Ghavami, wire

34 fraud in violation of 18 U.S.C. § 1343.  On appeal, the Defendants argue that

35 the District Court erred by denying their motion to dismiss the superseding

36 indictment as time barred.   We AFFIRM.  

37 

38 MARC L. MUKASEY (Philip J. Bezanson, on the brief),

39 Bracewell & Giuliani LLP, New York, NY, for

40 Defendant‐Appellant Gary Heinz.

41 

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2

1 GREGORY L. POE (Preston Burton, Rachel S. Li Wai

2 Suen, on the brief), Poe & Burton PLLC, Washington,

3 DC, for Defendant‐Appellant Michael Welty.

4 

5 NATHANIEL Z. MARMUR, Law Offices of Nathaniel Z.

6 Marmur, PLLC, New York, NY (Charles A. Stillman,

7 James A. Mitchell, Mary Margulis‐Ohnuma, Ballard

8 Spahr Stillman & Friedman, LLP, New York, NY, on

9 the brief), for Defendant‐Appellant Peter Ghavami.

10 

11 DANIEL E. HAAR, Attorney (Brent Snyder, Deputy

12 Assistant Attorney General, James J. Fredricks,

13 Finnuala K. Tessier, Kalina Tulley, Jennifer Dixton,

14 Attorneys, on the brief), U.S. Department of Justice,

15 Antitrust Division, Washington, DC, for Appellee.

16   

17 PER CURIAM:

18 Defendants‐appellants Gary Heinz, Michael Welty, and Peter Ghavami

19 appeal from judgments of conviction entered by the United States District

20 Court for the Southern District of New York (Wood, J.), following a jury trial

21 where the Defendants were convicted of conspiracy to commit wire fraud in

22 violation of 18 U.S.C. §§ 371 and 1349 and, as to Heinz and Ghavami, wire

23 fraud in violation of 18 U.S.C. § 1343.  On appeal, the Defendants argue that

24 the District Court erred by denying their motion to dismiss the superseding

indictment as time barred.1 25   We AFFIRM.

 

1 We address the Defendants’ remaining arguments in a separate summary

order filed simultaneously with this opinion.

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1 BACKGROUND

2 Heinz, Welty, and Ghavami were convicted in connection with schemes

3 to defraud municipalities, the Department of the Treasury, and the Internal

4 Revenue Service by manipulating the bidding process for municipal bond

5 reinvestment agreements and other municipal finance contracts while

6 employed at UBS Financial Services, Inc. (“UBS”).

7 Before trial, the Defendants moved to dismiss the superseding

8 indictment as untimely, arguing that the District Court should apply the five‐ 

9 or six‐year statute of limitations for wire fraud and wire fraud conspiracies,

10 see 18 U.S.C. § 3282(a); 26 U.S.C. § 6531(1), and that each fraudulent

11 transaction identified in the indictment was completed more than six years

12 before that indictment was filed.  In denying the motion, the District Court

13 concluded that the evidence the Government intended to submit at trial was

14 enough to permit a jury to find that the Defendants’ conduct “affect[ed] a

15 financial institution” within the meaning of 18 U.S.C. § 3293(2), and thereby

16 extend the statute of limitations to ten years under § 3293(2).  The

17 Government’s proffered evidence comprised non‐prosecution agreements

18 and settlement agreements (the “Bank Agreements”) that UBS and two other

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1 co‐conspirator banks entered into with the Department of Justice, other

2 federal regulatory agencies, and various state attorneys general; testimony

3 from representatives of these banks that the Bank Agreements resulted from

4 the conduct charged in the superseding indictment; and documents reflecting

5 that some of the Bank Agreements discuss the particular transactions

6 referenced in the indictment.  In the Bank Agreements, the three financial

7 institutions admitted wrongdoing, accepted responsibility for the illegal

8 conduct of certain former employees, and agreed to pay more than $500

9 million in fines and restitution to federal agencies and municipalities.  The

10 banks also incurred attorney’s fees arising from the investigations that

11 resulted in the Bank Agreements.  

12 Following the District Court’s denial of the Defendants’ motion to

13 dismiss, the parties stipulated that “each offense charged in the above‐

14 captioned matter, if proven beyond a reasonable doubt to have occurred,

15 affected a financial institution for purposes of 18 U.S.C. § 3293(2) and 18

16 U.S.C. § 1343.”  App’x 1911.   

17 The jury convicted Heinz, Welty, and Ghavami of conspiracy to commit

18 wire fraud, and convicted Heinz and Ghavami of substantive wire fraud.  

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1 DISCUSSION

2 The Defendants orally preserved their right to appeal their legal

3 arguments regarding the statute of limitations issue, and the District Court

4 confirmed the Defendants’ understanding that they had preserved those

5 arguments.  Accordingly, we address the merits.   

6 18 U.S.C. § 3293(2) extends to ten years the statute of limitations for

7 wire fraud offenses (including conspiracy to commit wire fraud) “if the

8 offense affects a financial institution.”  18 U.S.C. § 3293(2).  “[T]he verb ‘to

9 affect’ expresses a broad and open‐ended range of influences.”  United States

10 v. SKW Metals & Alloys, Inc., 195 F.3d 83, 90 (2d Cir. 1999).  The plain

11 language of § 3293(2) makes clear that “Congress chose to extend the statute

12 of limitations to a broader class of crimes” than those in which “the financial

13 institution is the object of fraud.”  United States v. Bouyea, 152 F.3d 192, 195

14 (2d Cir. 1998) (quotation marks omitted).  And so § 3293(2) “broadly applies

15 to any act of wire fraud that affects a financial institution,” provided the effect

16 of the fraud is “sufficiently direct.”  Id. (quotation marks omitted).   

17 We conclude that the Defendants’ wire fraud offenses “affected” the

18 three banks in this case within the meaning of § 3293(2).  It is undisputed that

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1 the banks executed the Bank Agreements prompted in part by the fraudulent

2 conduct of the Defendants and their co‐conspirators.  As a result, the banks

3 incurred significant payments and related fees, which were foreseeable to the

4 Defendants at the time of their fraudulent activity.  The role of the banks as

5 co‐conspirators in the criminal conduct does not break the necessary link

6 between the underlying fraud and the financial loss suffered.   

7 Since the relevant charges in the superseding indictment were well

8 within the applicable ten‐year statute of limitations, the District Court

9 properly denied the motion to dismiss.

10 CONCLUSION

11 We have considered the Defendants’ remaining arguments and

12 conclude that they are without merit.  For the reasons stated herein and in the

13 separate summary order accompanying this opinion, the judgments of the

14 District Court are AFFIRMED.

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