16‐2583‐cr

United States v. Katsman

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

August Term 2018

(Argued:  September 20, 2018                Decided: October 10, 2018)

Docket No. 16‐2583‐cr

      

UNITED STATES OF AMERICA,

         Appellee,

‐ against ‐ 

IGOR KATSMAN,

Defendant‐Appellant.

      

ON APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF NEW YORK

Before:

    CHIN and LOHIER, Circuit Judges, and KEENAN, District Judge.*

    Appeal from an order of the United States District Court for the

Eastern District of New York (Johnson, J.), denying the governmentʹs motion

pursuant to Rule 35 of the Federal Rules of Criminal Procedure for a reduction of

 

*   Judge John F. Keenan, of the United States District Court for the Southern

District of New York, sitting by designation.
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sentence.  Defendant‐appellant contends that, in denying the motion, the district

court erred by applying an incorrect legal standard and improperly considering

sentencing factors under 18 U.S.C. § 3553(a).    

    AFFIRMED.

      

MICHAEL H. WARREN, Assistant United States Attorney

(Emily Berger, Assistant United States Attorney,

on the brief), for Richard P. Donoghue, United

States Attorney for the Eastern District of New

York, Brooklyn, New York, for Appellee.

DONNA ALDEA (Alexander Klein, on the brief), Barket

Marion Epstein & Kearon LLP, Garden City, New

York, for Defendant‐Appellant.

      

PER CURIAM:

Defendant‐appellant Igor Katsman appeals from an order of the

district court entered July 12, 2016, denying, without explanation, the

governmentʹs motion pursuant to Rule 35(b) of the Federal Rules of Criminal

Procedure for a reduction of sentence.  By order entered July 18, 2017, we

remanded the case to permit the district court to explain its decision.  The district

court did so, issuing a seven‐page order on August 11, 2017.  This appeal was
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thereafter reinstated.  We assume the partiesʹ familiarity with the underlying

facts, procedural history, and issues on appeal.

BACKGROUND

On November 17, 2010, Katsman pleaded guilty in the Eastern

District of New York (ʺEDNYʺ), pursuant to a plea agreement with the United

States Attorneyʹs Office for the Eastern District of New York (ʺUSAO‐EDNYʺ), to

charges related to his role in a fraudulent check‐cashing scheme.  Katsman was

sentenced principally (Block, J.) to 84 monthsʹ imprisonment.  

He thereafter moved to withdraw his guilty plea or, alternatively,

for resentencing before a different judge.  The district court denied the motion to

withdraw the guilty plea but granted the request for resentencing before a

different judge.  The case was reassigned (Johnson, J.).  Katsman was resentenced

on November 30, 2012, to a total of 120 monthsʹ imprisonment.  Katsman

appealed, and by summary order entered January 13, 2014, this Court affirmed

his sentence.  United States v. Katsman, 551 F. Appʹx 601 (2d Cir. 2014).

In 2013, the Federal Bureau of Investigation and United States

Attorneyʹs Office for the Southern District of New York (ʺUSAO‐SDNYʺ)

approached Katsman about cooperating in a separate case pending in the
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Southern District of New York (ʺSDNYʺ) related to a no‐fault insurance fraud

scheme and various investment frauds.  See United States v. Zemlyansky, 945 F.

Supp. 2d 438 (S.D.N.Y 2013).  Katsman proffered on several occasions in 2013

and mid‐2014, and again in January 2015.  

On February 11, 2015, the government entered into a joint EDNY‐

SDNY cooperation agreement with Katsman, pursuant to which the government

agreed to make a Rule 35 motion in the EDNY to reduce Katsmanʹs sentence if

Katsman provided substantial assistance in ongoing matters.  In connection with

that agreement, Katsman was required to plead guilty to uncharged criminal

conduct in the SDNY.  Katsman pleaded guilty to a nine‐count information in the

SDNY on February 11, 2015.     

On January 29, 2016, the USAO‐EDNY filed a letter motion pursuant

to Rule 35(b) in the EDNY, requesting that Katsman be resentenced based on his

substantial assistance in the prosecutions in the SDNY.   

On January 29, 2016, the parties also appeared before the district

court in the EDNY for a hearing on the Rule 35 motion.  The parties informed the

court that Katsman had pleaded guilty in the SDNY, and that the charges in the

SDNY were based entirely on information that Katsman had voluntarily
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provided during proffer sessions.  The matter before the EDNY was then

adjourned pending Katsmanʹs sentencing in the SDNY.

On June 7, 2016, the USAO‐EDNY alerted the district court in the

EDNY that Katsman had been sentenced in the SDNY (Batts, J.).  Although he

had faced a sentence of up to 125 yearsʹ imprisonment, due to his substantial

cooperation, which included testifying in two trials, Katsman received a sentence

of time served.   

On June 7, 2016, the USAO‐EDNY renewed its Rule 35(b) motion to

reduce Katsmanʹs sentence in the EDNY.  On July 12, 2016, the district court

issued its order consisting of a minute entry summarily denying the motion.  As

noted, following Katsmanʹs appeal and a remand from this Court, see United

States v. Katsman, No. 16‐2583 (2d Cir.  July 18, 2017) (order granting motion to

remand), the district court issued its decision, which it sealed (ʺOp.ʺ), along with

a summary of its reasoning on the publicly available docket:

The decision to reduce a sentence pursuant to a

Rule 35(b) motion is discretionary.  In light of Mr.

Katsman having already received the benefit of his

cooperation [in the SDNY], his lies to this Court, his

continued commission of the same criminal conduct

while on pre‐sentencing release, his personal

involvement in the Zemlyansky‐Danilovich

conspiracy, the nature of the instant underlying
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crimes, and the undersignedʹs consideration of the

3553(a) factors, this Court denies the Governmentʹs

motion.  A 120‐month sentence, the middle of the

guidelines range, remains sufficient but not greater

than necessary to comply with the purposes of

Section 3553(a).  As such, the Governmentʹs . . .

Motion for Reconsideration as to Igor Katsman . . . is

denied and Mr. Katsmanʹs original sentence stands.

D. Ct. Dkt. No. 103.  This appeal was reinstated, and the parties submitted

supplemental briefing.

DISCUSSION

  In seeking reversal of the district courtʹs denial of the governmentʹs

Rule 35 motion, Katsman argues that (1) ʺRule 35(b) motions require a two‐step

analysis ‐‐ but the District Court conflated these discrete steps into one,ʺ and (2)

the district court should not have considered the § 3553(a) factors in determining

whether to reduce Katsmanʹs sentence.  Def.‐Appellantʹs Supp. Br. at 7‐8.  We are

not persuaded as to either argument.   

Rule 35(b)(2)(B) provides that on ʺthe governmentʹs motion made

more than one year after sentencing, the court may reduce a sentence if the

defendantʹs substantial assistance involved . . . information provided by the

defendant to the government within one year of sentencing, but which did not
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become useful to the government until more than one year after sentencing.ʺ  Fed

R. Crim. P. 35(b)(2)(B) (emphasis added).   

We agree with Katsman that, in deciding a Rule 35(b) motion, a

district court makes two inquiries.  First, it must determine whether the

defendant in fact provided substantial assistance.  Second, if so, it must then

determine what, if any, reduction in sentence is warranted.  United States v. Tadio,

663 F.3d 1042, 1047‐48 (9th Cir. 2011); United States v. Park, 533 F. Supp. 2d 474,

476 (S.D.N.Y. 2008).

As to Katsmanʹs first challenge, we are not persuaded that the

district court improperly conflated the two steps.  In fact, the district court

disposed of the first inquiry, as it concluded that ʺKatsman clearly provided

substantial assistance.ʺ  Op. at 5.  The court then proceeded to the second

inquiry, explaining that, in light of the circumstances of this case, including, inter

alia, that Katsman had already received the benefit of his cooperation in the

SDNY, he continued to engage in criminal activity while on presentence release,

and he lied to the court with respect to his substantial additional criminal

conduct, ʺ[a] 120‐month sentence, the middle of the guidelines range, remains

sufficient but not greater than necessary to comply with the purposes of Section
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3553(a).ʺ  D. Ct. Dkt. No. 103; see also Op. at 7 (same).  Katsmanʹs claim that the

district court ʺmerged Step One with Step Twoʺ in denying the motion to reduce

his sentence is therefore unavailing; the district court properly recognized that

Katsman had provided the government with substantial assistance, and only

then proceeded to consider whether to reduce his sentence, declining to do so in

the circumstances of this case.  

As to Katsmanʹs second challenge, this Court has not yet addressed

whether a court may consider the 18 U.S.C. § 3553(a) factors in determining the

extent, if any, of a sentence reduction pursuant to a Rule 35(b) motion.  Nothing

in the text of the rule, however, precludes the court from considering factors in

addition to a defendantʹs substantial assistance in deciding whether to reduce a

sentence, and, if so, to what extent.  See Fed. R. Crim. P. 35(b)(1) (ʺ[T]he court may

reduce a sentence if the defendant . . . provided substantial assistance.ʺ).  The

only limit to the courtʹs discretion under Rule 35(b) is the requirement that the

defendant provide ʺsubstantial assistanceʺ if he is to receive any benefit for his

cooperation.  Id. (emphasis added).

Furthermore, we are not persuaded by Katsmanʹs claim that any

determination as to the extent of a reduction, if any, should be based solely on
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the fact that the defendant provided the government with substantial assistance.  

The use of ʺmayʺ in Rule 35 implies discretion, and discretion can best be

exercised by considering the various sentencing factors.  Moreover, Section

3553(a) requires that courts ʺimpose a sentence sufficient, but not greater than

necessary,ʺ and that they consider the statutory factors ʺin determining the

particular sentence to be imposed.ʺ  18 U.S.C. § 3553(a).  Section 3553(a) does not

limit the consideration of those factors to the original sentencing decision, nor

does it prohibit courts from considering them during a resentencing proceeding.  

See Park, 533 F. Supp. 2d at 477.   

Indeed, to read Rule 35(b) as requiring the court to resentence a

defendant, considering only substantial assistance in isolation from other factors,

ʺleaves too little discretion for the court to exerciseʺ in determining whether a

reduced sentence is warranted or prudent under the circumstances.  United States

v. Manella, 86 F.3d 201, 204‐05 (11th Cir. 1996).  A defendantʹs circumstances may

change post‐sentencing in such a way as to have a bearing on the

appropriateness of his sentence.  A deterioration in a defendantʹs health, for

example, may weigh in favor of a greater reduction, see, e.g., Park, 533 F. Supp. 2d

at 476‐77, while additional criminal behavior, for example, would weigh in favor
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of a smaller reduction.  We are therefore not persuaded that the district court

erred in considering the § 3553(a) factors in step two in deciding whether to

reduce Katsmanʹs sentence in light of his cooperation.   

    Accordingly, we agree that the district court applied the proper two‐

step test in evaluating the Rule 35(b) motion and did not err in considering the

§ 3553(a) factors in concluding that Katsmanʹs original sentence should stand.

We have considered Katsmanʹs remaining arguments and find them

to be without merit.  Accordingly, we AFFIRM the district courtʹs order.