Opinion ID: 1085611
Heading Depth: 3
Heading Rank: 4

Heading: sufficiency of the evidence

Text: Defendants claim that trial evidence was insufficient to satisfy the fraudulent intent element of each count of conviction. See United States v. Novak, 443 F.3d 150, 156 (2d Cir. 2006) (stating that mail fraud requires proof that defendant had fraudulent intent and “contemplated” or “intended” some harm to victims (internal quotation marks omitted)); United States v. Guadagna, 183 F.3d 122, 129 (2d Cir. 1999) (same for wire fraud); SEC v. First Jersey Sec., Inc., 101 F.3d 1450, 1467 (2d Cir. 1996) (stating that “[s]cienter, as used in connection with the securities fraud statutes, means intent to deceive, manipulate, or defraud”). A defendant raising a sufficiency challenge “bears a heavy burden because a reviewing court must consider the evidence ‘in the light most favorable to the prosecution’ 6 We do not, however, foreclose defendants from pursuing an ineffective assistance of counsel challenge on a more developed record pursuant to 28 U.S.C. § 2255. See Massaro v. United States, 538 U.S. 500, 504 (2003); United States v. Plitman, 194 F.3d at 64. At the same time, however, we express no view as to the merits of any such claim. 15 and uphold the conviction if ‘any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.’” United States v. Aguilar, 585 F.3d 652, 656 (2d Cir. 2009) (quoting Jackson v. Virginia, 443 U.S. 307, 319 (1979) (emphasis in original)). Defendants have failed to carry this burden.
Trial evidence showed, inter alia, that Shapiro (1) hid from investors his role as a founder, 40% shareholder, and top executive at Cobalt by failing to disclose it in the December 2003 and July 2004 PPMs and by misrepresenting it in the December 2004 PPM; (2) failed to disclose his criminal convictions to investors; (3) reviewed and approved marketing materials containing material misrepresentations about Cobalt’s experience in the real estate industry, such as brochures (a) asserting that Cobalt was founded in 1980 when, in fact, it was established in 2003; (b) containing a line graph falsely depicting Cobalt’s successful investment returns from 1997 to 2003; and (c) identifying prominent investment professionals as associated with Cobalt even though they had no relationship with the company; (4) misrepresented his educational background in the December 2004 PPM; (5) falsely informed investors that Cobalt owned and had developed certain properties, such as the Mercury and Simone Hotels; and (6) misappropriated investor funds for personal use. From this evidence, we easily conclude that a rational jury could have found Shapiro’s fraudulent intent established beyond a reasonable doubt. In urging to the contrary, Shapiro argues that the evidence did not show his intent to harm Cobalt’s investors, as required to prove mail and wire fraud, but rather showed that he 16 sought to make a profit for investors through Cobalt. We are not persuaded. The evidence was sufficient to prove that Shapiro intended fraudulently to induce investors to entrust him with their money. Shapiro’s intent to cause that immediate loss to his victims is sufficient to sustain his mail and wire fraud convictions, regardless of whether he intended ultimately to generate a return on their investments. See United States v. Ferguson, 676 F.3d 260, 280 (2d Cir. 2011) (“Where some immediate loss to the victim is contemplated by a defendant, the fact that the defendant believes (rightly or wrongly) that he will ultimately be able to work things out so that the victim suffers no loss is no excuse for the real and immediate loss contemplated to result from defendant’s fraudulent conduct.” (alteration and internal quotation marks omitted)).
Trial evidence showed, inter alia, that Stitsky (1) was a founding member of Cobalt along with Shapiro and held a 40% equity share of the company; (2) reviewed misleading marketing materials, such as a PowerPoint presentation to Cobalt salespeople and investors falsely stating that Cobalt (a) was founded in 1983; (b) made investments that had outperformed other benchmark indexes from 1997 to 2003; and (c) began renovating the Mercury Hotel in 1998 and completed it in 2000; (3) asked a Cobalt consultant to misrepresent his role with the company to an investor; (4) asked his son to create a résumé misrepresenting his length of experience in the mortgage business; (5) admitted to a Cobalt employee that his name was not listed in the PPMs due to his criminal history; (6) instructed a Cobalt employee not to tell the FBI he was a partner at Cobalt; (7) falsely told the FBI that 17 he was only a consultant for Cobalt and did not have direct contact with investors; and (8) lied to investors about Cobalt’s ownership interest in certain properties. From this evidence, a rational jury could have concluded that Stitsky acted with the requisite intent. Although Stitsky argues that the evidence supports inferences that he did not, in fact, have a leadership role at Cobalt; was not aware of the material misrepresentations in the marketing materials; encouraged “favorable spin but did not flat-out tell others to lie,” Stitsky Reply Br. 4; and concealed his role at Cobalt from investors with the approval of counsel, the jury was free to reject Stitsky’s view of the evidence, see United States v. Hasan, 586 F.3d 161, 166 (2d Cir. 2009). The evidence amply supports the contrary inferences urged by the government, which we must credit in reviewing the sufficiency of the evidence. See United States v. Aguilar, 585 F.3d at 656. Insofar as Stitsky argues that he did not intend to cause harm to Cobalt’s investors, we reject this claim for reasons already stated in rejecting Shapiro’s analogous argument. See United States v. Ferguson, 676 F.3d at 280.