Court Opinion

ID: 2657590
Source: CourtListenerOpinion
Date Created: 2014-03-21 16:37:17.454023+00
Date Added: 2024-06-11T09:12:46.052744
License: Public Domain

NOT PRECEDENTIAL

                        UNITED STATES COURT OF APPEALS
                             FOR THE THIRD CIRCUIT
                                  _____________

                                       No. 12-4404
                                      _____________

                            UNITED STATES OF AMERICA

                                              v.

                               CHARLES M. NASELSKY,
                                                  Appellant
                              __________________________

                     On Appeal from the United States District Court
                        for the Eastern District of Pennsylvania
                        (D.C. Criminal No. 2-10-cr-00577-001)
                       District Judge: Honorable Paul S. Diamond
                             __________________________

                       Submitted Under Third Circuit L.A.R. 34.1(a)
                                  December 20, 2013

           Before: JORDAN, VANASKIE, and GREENBERG, Circuit Judges

                                  (Filed: March 21, 2014)
                                      _____________

                                OPINION OF THE COURT
                                    _____________

VANASKIE, Circuit Judge.

       In 2012, defendant Charles Naselsky was convicted after trial of tax evasion, filing

a false tax return, wire fraud, and attempt to obstruct justice, as well as aiding and

abetting those last two offenses. The United States District Court for the Eastern District

of Pennsylvania sentenced him to 70 months’ imprisonment, a three-year term of
supervised release, restitution of $423,345, and a special assessment of $900. Naselsky

now challenges his convictions for wire fraud and certain aspects of his sentence. For the

reasons that follow, we will affirm the conviction and sentence.

                                              I.

       We write primarily for the parties to the action. Accordingly, we set forth only

those facts necessary to our analysis.

       In 2002, Naselsky, an experienced real-estate transactional lawyer, joined the

Philadelphia-based law firm of Cozen O’Connor as a “senior member,” a position

considered by the firm’s management to be “equivalent of what you would have today as

a shareholder or as a partner or senior partner . . . in a partnership kind of law firm.”

(App. 70.) Naselsky was paid an annual base salary with the opportunity for cash

bonuses. At the time of hiring, the firm provided Naselsky with a manual of employment

policies, and he signed a form agreeing to read the manual. Included in that manual was

a provision (“the 2001 Cozen policy”) entitled “Professional Fees for Outside Activities,”

which, as of May 2001, stated as follows:

               [U]nless approval is secured from the Executive Committee
               in advance, all professional fees including legal fees of any
               kind, special counsel or solicitor fees, prosecutor salaries,
               executor fees, trustee fees, director fees, consulting fees and
               teaching salaries or stipends . . . which are generated directly
               or indirectly by lawyers employed by the firm shall be
               considered to be income to and the property of the firm.

(App. 663.)1

       1
         At trial, the jury also saw a somewhat revised version of the Cozen policy which
is said to date from November 20, 2010. The parties agree that the exact date of the
                                               2
       Among Naselsky’s longstanding clients and social acquaintances were Ravinder

and Hardeep Chawla, brothers who, through their companies, Sant Properties and World

Acquisitions Partners, purchased and re-sold real estate in the Philadelphia market. In

2005, Naselsky contacted David Grasso, a real-estate developer, to see if he was

interested in selling a valuable property located at 1500 Walnut Street in Philadelphia to

the Chawlas. Grasso offered to sell the building for $35 million, which the Chawlas

accepted. Naselsky represented Grasso throughout the transaction. The Chawlas,

however, also regarded Naselsky as having “facilitate[d]” the transaction on their behalf,

(App. 193), insofar as Naselsky was able to broker a crucial pre-closing extension from

Grasso in return for a $600,000 investment by the Chawlas in Grasso’s film production

business, Tycoon Entertainment, a company in which Naselsky himself also had an

equitable interest.

       Shortly thereafter, Naselsky approached Grasso to see if he would also sell a

second property to the Chawlas. Grasso agreed to sell the building, located at 1401 Arch

Street, for $22.5 million. Naselsky again represented Grasso during negotiation of the

revisions, and therefore the verbatim text of the provision in Naselsky’s particular
manual, is unascertainable. The revised version of the Cozen policy reads as follows:

              Unless approval is secured from the CEO of the firm, or
              his/her designee, in advance, all professional fees of any kind
              including legal fees of any kind, special counsel or solicitor
              fees, prosecutor salaries, executor fees, trustee fees, director
              fees, consulting fees and teaching salaries or stipends . . .
              which are generated directly or indirectly by lawyers
              employed by the firm, shall be considered to be income to
              and the property of the firm.

(App. 663.)
                                             3
sale agreement and at the closing. For each of these two transactions, Grasso received a

bill for services from Cozen O’Connor and paid the law firm directly.

       Thereafter, Naselsky met with Grasso and asked for $100,000 in cash to “take care

of [him]” for going “above and beyond the call of duty.” (App. 134.) Grasso initially

responded that Naselsky had already been paid for his legal work. After considering the

issue further, however, Grasso inquired whether Naselsky “had gotten this approved

through his law firm,” to which Naselsky “indicated that he had and . . . not to worry

about it, that he had taken care of that.” (App. 135.) Grasso ultimately agreed to pay

Naselsky the additional funds, but requested an invoice for tax purposes. Naselsky sent

him an invoice for $100,000 bearing the caption “Consulting services.” (App. 139.)

Grasso then wrote a check in that amount to Naselsky, dated January 19, 2006, which

Naselsky deposited in his personal bank account.

       Naselsky also received compensation from the Chawlas stemming from these

transactions. In late 2005, the Chawlas wrote checks of $150,000 and $40,000 to

Naselsky for his involvement in the sale of 1500 Walnut Street. Naselsky assured

Hardeep Chawla that Cozen O’Connor “allows [him] to do that,” meaning that it

permitted him to receive such payments directly. (App. 186–87.) In July 2006, Naselsky

left Cozen O’Connor and joined the law firm of Blank Rome. At that time the Chawlas,

through Sant Properties, owed approximately $469,000 to Cozen O’Connor in unpaid

                                             4
legal bills stemming from work for which Naselsky had been the billing attorney. (App.

79–80.)2

       In early 2009, Naselsky learned that he was under investigation by federal

authorities for failure to report on his tax returns the $190,000 he received from the

Chawlas and the $100,000 he received from Grasso.3 Through a series of email ruses,

Naselsky unsuccessfully attempted to convince both the management at Blank Rome,

where he remained employed, and the United States Attorney’s Office that the $190,000

he had received from the Chawlas in 2005 was in fact a personal loan from a business

acquaintance rather than unreported income.

       On September 7, 2010, Naselsky was indicted by a federal grand jury for tax

evasion, in violation of 26 U.S.C. § 7201 (Counts One and Two); filing a false tax return,

in violation of 26 U.S.C. § 7206(l) (Counts Three and Four); wire fraud, and aiding and

abetting wire fraud, in violation of 18 U.S.C. §§ 1343 and 2 (Counts Five, Six, and

Seven); and attempting to obstruct justice, and aiding and abetting an attempt to obstruct

justice, in violation of 18 U.S.C. §§ 1505 and 2 (Counts Eight and Nine).

       At trial, the founder and chairperson of Cozen O’Connor, Stephen Cozen, testified

that Naselsky had not sought prior approval from the firm regarding his personal

       2
         The Government also offered evidence that between September 2006 and
January 2007, after Naselsky had left Cozen O’Connor, he received six checks for
$15,000 each from the Chawlas for his involvement in a 2005 purchase of property which
did not involve Grasso. Because those payments are not central to any of Naselsky’s
claims on appeal, we will not address them.
       3
        An agent for the Internal Revenue Service testified at trial that based on these
unreported transactions and others, Naselsky had incurred an unpaid tax bill of roughly
$115,000.
                                             5
acceptance of funds from Grasso or the Chawlas, nor did he disclose those sums to the

firm after receiving them. Cozen stated that he and the firm “[a]bsolutely” would have

considered the payments received by Naselsky to be property of the firm. (App. 84.) He

further opined that any senior member of the firm, or in fact any “average intelligent

human being” would have understood that “finder’s fees” and “commissions” were

among the types of payments covered by the 2001 Cozen Policy. (App. 90–91.)

      At the conclusion of the presentation of the evidence, Naselsky moved for a

judgment of acquittal under Federal Rule of Criminal Procedure 29 on Counts Five, Six,

and Seven of the indictment on the theory that the evidence was insufficient to support a

finding of intent to commit wire fraud. The District Court denied the motion. On

September 24, 2012, a jury found Naselsky guilty on all counts.

      At sentencing on November 20, 2012, the parties agreed that Naselsky’s base

offense level was 21 and his criminal history category was I. Over Naselsky’s objections,

the District Court imposed a two-level enhancement for use of a special skill under

U.S.S.G. § 3B1.3, and a two-level enhancement for abuse of trust under the same section,

resulting in a Guideline range of 57 to 71 months. The Court then sentenced Naselsky to

70 months of incarceration, near the top of the Guideline range. Naselsky filed a timely

notice of appeal on November 30, 2012.

                                            II.

      The District Court had jurisdiction over this case pursuant to 18 U.S.C. § 3231.

We have jurisdiction pursuant to 28 U.S.C. § 1291 and 18 U.S.C. § 3742(a).

                                            6
       We exercise plenary review over a defendant’s sufficiency-of-the-evidence claims.

See United States v. Miller, 527 F.3d 54, 60 (3d Cir. 1999). We also give plenary review

to legal questions regarding the applicability of the Sentencing Guidelines, including with

respect to whether a defendant occupied a position of trust. See United States v. DeMuro,

677 F.3d 550, 567 (3d Cir. 2012) (citing United States v. Hart, 273 F.3d 363, 376 (3d Cir.

2001)). Factual findings, such as whether the defendant abused that position of trust to

commit the offense, are reviewed for clear error. Id.

                                            III.

       Naselsky argues that the Government failed to establish specific intent to defraud

with respect to Counts Five, Six, and Seven of the indictment, which charged wire fraud.

A defendant challenging the sufficiency of the evidence on appeal “bears a heavy

burden.” United States v. Casper, 956 F.2d 416, 421 (3d Cir. 1992). Sitting en banc, we

have recently described that standard as follows:

              We “review the record in the light most favorable to the
              prosecution to determine whether any rational trier of fact
              could have found proof of guilt[ ] beyond a reasonable
              doubt.” [United States v. Brodie, 403 F.3d 123, 133 (3d Cir.
              2005)]. Under this particularly deferential standard, we
              “must be ever vigilant . . . not to usurp the role of the jury by
              weighing credibility and assigning weight to the evidence, or
              by substituting [our] judgment for that of the jury.” Id.
              Furthermore, “we review the evidence as a whole, not in
              isolation, and ask whether it is strong enough for a rational
              trier of fact to find guilt beyond a reasonable doubt.” [United
              States v. Boria, 592 F.3d 476, 480 (3d Cir. 2010)]. We must
              sustain the jury’s verdict “if there is substantial evidence,
              viewed in the light most favorable to the government, to
              uphold the jury's decision.” United States v. Gambone, 314
F.3d 163, 170 (3d Cir. 2003).

                                             7
United States v. Caraballo-Rodriguez, 726 F.3d 418, 430 (3d Cir. 2013) (en banc). We

also recognized the Supreme Court’s admonition that “the verdict must be upheld as long

as it does not ‘fall below the threshold of bare rationality.’” Id. (quoting Coleman v.

Johnson, --- U.S. ---, 132 S. Ct. 2060, 2065 (2012)).

       To prove wire fraud, the Government must establish the following three elements:

“(1) the defendant's knowing and willful participation in a scheme or artifice to defraud,

(2) with the specific intent to defraud, and (3) the use of . . . interstate wire

communications in furtherance of the scheme.” United States v. Antico, 275 F.3d 245,

261 (3d Cir. 2001), abrogated on other grounds by Skilling v. United States, 561 U.S.
358 (2010). The Government may prove intent to defraud by way of circumstantial

evidence. See United States v. Riley, 621 F.3d 312, 333 (3d Cir. 2010). The scheme at

issue may involve an “affirmative misrepresentation,” but can also be predicated upon

“omissions reasonably calculated to deceive persons of ordinary prudence and

comprehension.” Kehr Packages, Inc. v. Fidelcor, Inc., 926 F.2d 1406, 1415 (3d Cir.

1991) (quoting United States v. Pearlstein, 576 F.2d 531, 535 (3d Cir. 1978)).

       The only element at issue here is whether the Government proved that Naselsky

had a specific intent to defraud Cozen O’Connor.4 Naselsky submits that he could not

       4
        The District Court’s instruction on that element, which is not challenged by
Naselsky, is as follows:

               The second element that the government must prove beyond a
               reasonable doubt is that Charles Naselsky acted with specific
               intent to defraud. To act with specific intent to defraud
               means to act knowingly and with the intention or the purpose
               to deceive or to cheat.
                                                8
have committed fraud by withholding the funds at issue because the 2001 Cozen policy

“was at best ambiguous” regarding the types of income accruing to the firm rather than

the employee. Appellant’s Br. at 25. Stated differently, Naselsky urges that “no rational

fact finder could have found that [he] intended to violate a policy that did not apply to

him on its face.” Id. at 17. This position depends on Naselsky’s characterization of the

sums he received from Grasso and the Chawlas as “finder’s fees” which were purely “a

reward” for his limited role in introducing those parties to one another. Id. at 16. He

suggests that because this act of introduction “was completed in a virtual instant,”

Appellant’s Reply Br. at 11, he did not draw upon the time or resources of Cozen

O’Connor such that the firm would be entitled to the proceeds.

       Assuming that Naselsky’s position is a plausible view of the facts presented at

trial, it does not follow that the evidence was insufficient to support the view apparently

adopted by the jury, i.e., that the funds were due to Cozen O’Connor under the 2001

Cozen policy because they stemmed from deal-making inseparable from Naselsky’s

operations as a practiced real-estate attorney. Stated otherwise, the jury finding of intent

to defraud Cozen O’Connor does not “fall below the threshold of bare rationality.”

Coleman, 132 S. Ct. at 2065. On this record, the jury was capable of finding that

Naselsky, using precisely the same relationships and legal expertise for which he was

paid by Cozen O’Connor, brokered two substantial real-estate transactions and then

obtained additional compensation for his professional work in those very matters. Even

(App. 431.)

                                              9
without relying on the interpretation of the 2001 Cozen policy supplied by the firm’s

chairperson, we conclude that a rational trier of fact could find that the payments

obtained by Naselsky from Grasso and the Chawlas constituted “professional fees” due to

Cozen O’Connor, (App. 666), and that Naselsky possessed a specific intent to defraud the

firm with respect to those fees.

       Naselsky also claims that a scheme to defraud cannot be predicated upon mere

omissions where the duty to disclose stems solely from a contract. See Appellant’s Reply

Br. at 5–7 (citing United States v. Steffen, 687 F.3d 1104, 1116 (8th Cir. 2012); United

States v. Colton, 231 F.3d 890, 899–901 (4th Cir. 2000)). In other words, because he was

under no fiduciary or other legal obligation in addition to his contractual duty to report

the payments at issue to his law firm, Naselsky suggests he cannot be held liable in fraud

for passively failing to comply with a contractual condition of employment. At most, he

contends, this would amount to a breach of contract.

       The cases cited by Naselsky clarify, however, that conduct involving affirmative

concealment, such as “deceptive acts or contrivances intended to hide information,

mislead, avoid suspicion, or prevent further inquiry into a material matter” is, like an

affirmative misrepresentation, sufficient to establish fraud. Steffen, 687 F.3d at 1115

(quoting Colton, 231 F.3d at 899). Here, viewing the evidence in the light most favorable

to the Government, the record shows that Naselsky assured both Grasso and the Chawlas

that Cozen O’Connor permitted him to accept the payments at issue. These

representations not only induced the remittances, but also reduced the likelihood that

Grasso and the Chawlas might attempt to confirm the propriety of Naselsky’s request

                                             10
with other lawyers at Cozen O’Connor. Later, Naselsky crafted a string of misleading

emails to create the perception that the payments from the Chawlas were personal loans

rather than income that might be due, in part or in whole, to Cozen O’Connor or Blank

Rome. Because these actions had the effect of minimizing the defrauded party’s

likelihood of discovering the wrong, we conclude that the Government’s proof was

sufficient to sustain the verdict. Accordingly, we will affirm the District Court’s

judgment of conviction on the wire fraud counts.

                                            IV.

       Naselsky also challenges the District Court’s application of sentencing

enhancements to his wire fraud convictions for use of a special skill and abuse of trust.

Both enhancements arise under § 3B1.3 of the Sentencing Guidelines, which directs a

two-level increase where “the defendant abused a position of public or private trust, or

used a special skill, in a manner that significantly facilitated the commission or

concealment of the offense[.]” U.S.S.G. § 3B1.3.

       A position of “public or private trust” is “characterized by professional or

managerial discretion (i.e., substantial discretionary judgment that is ordinarily given

considerable deference).” Id. at cmt. n.1. We apply a three-part test to determine

whether someone occupies a position of trust: “(1) whether the position allows the

defendant to commit a difficult-to-detect wrong; (2) the degree of authority which the

position vests in defendant vis-a-vis the object of the wrongful act; and (3) whether there

has been a reliance on the integrity of the person occupying the position.” United States

                                             11
v. Hart, 273 F.3d 364, 376 (3d Cir. 2001) (quoting United States v. Pardo, 25 F.3d 1187,

1192 (3d Cir. 1994)).

       Here, the theory of the Government’s case was that Naselsky abused his trusted

position as a senior member of Cozen O’Connor to deprive the firm of professional fees

derived from his practice of law. The Government adduced evidence that Naselsky alone

was in an authoritative position to seek the additional payments at issue from his clients

and business partners, and to convince them that he had permission from the firm to do

so. Further, Naselsky concedes that the firm did not monitor his tax filings, which in any

event would not have disclosed the challenged payments, and instead relied on his

integrity to self-report payments possibly implicating the 2001 Cozen policy. On these

facts, we conclude that (1) Naselsky was in a position of trust for purposes of the

sentencing enhancement, and (2) the District Court’s factual finding that Naselsky abused

his position of trust to commit the offense of wire fraud against his employer was not

error. The two-level enhancement for abuse of trust was thus properly applied.

       Next, we consider the District Court’s application of an enhancement for use of a

special skill. “Special skill” is defined as “a skill not possessed by members of the

general public and usually requiring substantial education, training or licensing.”

U.S.S.G. § 3B1.1, cmt. n.4; United States v. Maurello, 76 F.3d 1304, 1314 (3d Cir.

1996). Naselsky does not dispute that as an attorney he possessed special professional

skills. Instead, in accord with his argument that the fees at issue would have been paid to

any person who brought Grasso and the Chawlas together for business, he contends that

his actions here amounted to little more than introducing two acquaintances and

                                            12
depositing checks into his personal bank account, neither of which requires special skill.

As explained by the District Court, however, the Government introduced evidence that

Naselsky “used his skill to set up [the transactions between Grasso and the Chawlas] so

that he was in a position to ask for these commission finder’s fees, and that did require

special skill.” (App. 456.) Indeed, the record reveals that the wrongdoing at issue was

enabled predominantly, if not exclusively, by Naselsky’s application of his abilities as an

experienced real-estate lawyer. Accordingly, we conclude that the District Court did not

commit plain error in applying the “special skill” enhancement on these facts.

                                             V.

       In sum, we reject Naselsky’s challenge to the sufficiency of the evidence as to his

convictions on Counts Five, Six, and Seven of the indictment, and conclude that the

District Court committed no error in applying sentencing enhancements for abuse of trust

and use of a special skill. We will affirm the conviction and sentence.

                                            13