Court Opinion

ID: 2959954
Source: CourtListenerOpinion
Date Created: 2015-09-17 17:37:53.140065+00
Date Added: 2024-06-11T11:36:16.265809
License: Public Domain

06-2420-cr
United States v. Carlo

                           UNITED STATES COURT OF APPEALS
                               FOR THE SECOND CIRCUIT

                                       August Term, 2007
Argued: October 16, 2007                                           Decided: November 19, 2007

                                    Docket No. 06-2420-cr
                            _________________________________

                              UNITED STATES OF AMERICA,

                                                             Appellee,

                                              –v.–

                                      PETER R. CARLO,

                                                            Defendant-Appellant.

                           ____________________________________

                                          Before:
                                  KEARSE and KATZMANN,
                                      Circuit Judges,
                                        RAKOFF,
                                      District Judge.*

       Appeal from the May 10, 2006 judgment of the United States District Court for the
Southern District of New York (Patterson, J.) of conviction after jury trial. Affirmed.
                         ____________________________________

                                             SETH C. FARBER, (James P. Smith III, Mathew L.
                                             DiRisio, of counsel), Dewey & LeBeouf LLP, New
                                             York, New York, for Defendant-Appellant

                                             DANIEL W. LEVY (Katherine Polk Failla, Michael
                                             A. Levy, Assistant United States Attorneys, of
                                             counsel) for Michael J. Garcia, United States
                                             Attorney for the Southern District of New York,

       *
          The Honorable Jed S. Rakoff, of the United States District Court for the Southern
District of New York, sitting by designation.
                                          New York, New York, for Appellee.
                            __________________________________

PER CURIAM :

       The defendant Peter Carlo appeals from a judgment of conviction entered May 10, 2006,

following a jury trial on one count of wire fraud in violation of 18 U.S.C. § 1343 and one count

of conspiracy to commit wire fraud in violation of 18 U.S.C. § 371. He challenges the

sufficiency of the evidence to support that conviction and certain instructions given to the jury.

       The government’s proof at trial included evidence of Carlo’s participation in a scheme

whereby he, along with others, defrauded real estate developers by making misrepresentations to

the developers as to the status of Carlo’s attempts to secure funding for their development

projects. Carlo, hoping to, inter alia, collect a fee from closing such financing deals, sought to

persuade the developers to continue to seek their funding through Carlo. His plan for obtaining

the desired financing included attempting to arrange for one institution, Seattle-Northwest

Securities Corporation, to sell bonds backed by the developers’ projects and attempting to

arrange for another institution, Allianz AG, to provide “credit enhancement,” i.e., guarantee of

the payments on the bonds. Seattle-Northwest informed Carlo that it would evaluate his funding

requests on a project-by-project basis only after completing due diligence and after Carlo

obtained credit enhancement. A number of developers sought assurances that loans would soon

be forthcoming, stating that they were experiencing negative financial effects from the delay in

receiving, or learning that they would not receive, the needed funding. Despite the fact that no

due diligence was completed, that no funding approval from Seattle-Northwest was forthcoming,

that no credit enhancement commitment was made by Allianz, and that he indeed never dealt

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with Allianz directly, Carlo represented to several developers that their financing proposals had

been approved and that loans would shortly be forthcoming.

       On an appeal challenging the sufficiency of the evidence to support a conviction, we view

the evidence in the light most favorable to the government, drawing all reasonable inferences in

its favor, and reverse only if no rational factfinder could have found guilt beyond a reasonable

doubt. United States v. Gaskin, 364 F.3d 438, 459-60 (2d Cir. 2004). To sustain a conviction for

wire fraud under 18 U.S.C. § 1343 (except as modified by § 1346) and conspiracy to commit

such wire fraud, the government must prove that the defendant acted with specific intent to

obtain money or property by means of a fraudulent scheme that contemplated harm to the

property interests of the victim. See United States v. Walker, 191 F.3d 326, 334-35 (2d Cir.

1999).1 See generally McNally v. United States, 483 U.S. 350 (1987). While the interests

protected by the mail and wire fraud statutes do not generally extend to intangible rights (except

as modified by 18 U.S.C. § 1346), they do extend to all kinds of property interests, both tangible

and intangible. Carpenter v. United States, 484 U.S. 19, 25 (1987). Since a defining feature of

most property is the right to control the asset in question, we have recognized that the property

interests protected by the statutes include the interest of a victim in controlling his or her own

assets. See Walker, 191 F.3d at 335; United States v. Rossomando, 144 F.3d 197, 201 n.5 (2d

Cir. 1998) (“[T]he concrete harm [to the victim’s property interest] contemplated by the

defendant is to deny the victim the right to control its assets by depriving it of information

necessary to make discretionary economic decisions.”).

       1
        Walker deals with mail fraud, but the analysis of mail fraud and wire fraud is, in all
respects material to this case, identical. See United States v. Autuori, 212 F.3d 105, 115 (2d Cir.
2000).

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       We find that the government introduced sufficient evidence for a reasonable jury to

conclude that Carlo knowingly gave false and misleading information to real estate developers

about the status of funding he was trying to arrange for them in the hope that they would continue

their projects, at great risk and expense, while he pursued an ever-dwindling chance of actually

securing funding. The jury could find that Carlo intended that the developers rely on his

misstatements to decide to continue their projects, thus preserving Carlo’s only chance to earn his

fee. By causing the developers to make economic decisions about the viability of their real estate

projects based on misleading information, Carlo harmed the developers’ property interests. See

United States v. DiNome, 86 F.3d 277, 284 (2d Cir. 1996). That Carlo wanted the funding

transactions to close (because that was the only way for him to earn his fee) does not negate his

intent to inflict a genuine harm on the victims by depriving them of material information

necessary to determine for themselves whether to continue their development projects, thereby

continuing or increasing their exposure to the risk of the projects’ failure. See id.; see also

Rossomando, 144 F.3d at 201.

       When an objection to a jury charge is adequately preserved below, we review a claim of

error in the charge de novo. See United States v. Tropeano, 252 F.3d 653, 657-58 (2d Cir. 2001).

Even assuming that Carlo’s objection was adequate, we find that the trial court properly

instructed the jury on the right-to-control theory of wire fraud. The court properly described the

harm to the victims’ property interests as the deprivation of information necessary to make

discretionary economic decisions. See Rossomando, 144 F.3d at 201 & n.5. There was no

danger in this case that the jury might have found that the misinformation—false statements that

the funding had been approved and was imminent—could have misled the victims in any

                                                 -4-
immaterial, non-pecuniary way. See DiNome, 86 F.3d at 284; cf. United States v. Mittelstaedt, 31

F.3d 1208, 1216-17 (2d Cir. 1994).

       Carlo’s objection to the conscious avoidance instruction is similarly without merit. There

was nothing inappropriate or inconsistent in the government arguing that Carlo had actual

knowledge that his statements were false or, in the alternative, that he was aware of a high

probability that they were false, but consciously avoided confirming that suspicion. See United

States v. Svoboda, 347 F.3d 471, 480 (2d Cir. 2003); United States v. Mang Sun Wong, 884 F.2d

1537, 1542 (2d Cir. 1989). The conscious avoidance charge was appropriate because Carlo

asserted that he did not know that his statements were false and the government presented an

adequate factual predicate for the charge. See United States v. Ferrarini, 219 F.3d 145, 154 (2d

Cir. 2000). We find that the government introduced evidence that Carlo was aware of a high

probability that the information about credit enhancement that he received from his contacts in

Europe (which he then repeated to the developers) was false, and if he did not actually know that

the information was false, it was only because he deliberately avoided confirming his suspicion.

       We have considered all of Carlo’s other arguments and find them to be without merit.

Accordingly, for the foregoing reasons, the judgment of the district court is hereby AFFIRMED.

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