Court Opinion

ID: 9481370
Source: CourtListenerOpinion
Date Created: 2023-08-05 08:17:08.943076+00
Date Added: 2024-06-11T17:48:16.565883
License: Public Domain

LUMBARD, Circuit Judge
(concurring):
I concur in the affirmance of the judgment of conviction, substantially for the reasons set forth in Judge Cardamone’s opinion.
Bilzerian was not denied a fair trial because the district court precluded him from denying criminal intent without waiving the attorney-client privilege. The court had ruled preliminarily that if Bilzerian testified regarding his good faith belief in the legality of certain conduct1 he would subject himself to cross-examination as to the basis of that claim, including questions regarding communications that otherwise would be protected by the attorney-client privilege. As a result, Bilzerian took the stand but chose not to assert his good faith belief.
*1303Because Bilzerian decided not to testify on these matters, his claims are not properly preserved for appeal. See United States v. Ortiz, 857 F.2d 900, 906 (2d Cir.1988), cert. denied, 489 U.S. 1070, 109 S.Ct. 1352, 103 L.Ed.2d 820 (1989). Nevertheless, there was no error in Judge Ward’s rulings. If Bilzerian had asserted good faith on direct examination, he could not use the attorney-client privilege to avoid cross-examination regarding the basis of that claim. See United States v. Miller, 600 F.2d 498, 501 (5th Cir.), cert. denied, 444 U.S. 955, 100 S.Ct. 434, 62 L.Ed.2d 327 (1979).
Bilzerian’s contention that the district court erroneously admitted testimony by the government’s expert while it excluded similar expert testimony by the defense has no merit. At trial, Judge Ward allowed the government witness, Professor John C. Coffee, to provide background information regarding the securities laws and the filing requirements of Schedule 13D. The district court permitted Bilzerian’s expert, Lee B. Spencer, Jr., to do the same, but prohibited him from opining on the propriety of describing unsecured loans as “personal funds,” in a Schedule 13D.
Much of Professor Coffee’s testimony, which Bilzerian now contends was improperly admitted, was not objected to at trial. As a consequence, it cannot now be assigned as error. See Fed.R.Evid. 103(a)(1); United States v. Heinemann, 801 F.2d 86, 96 (2d Cir.1986), cert. denied, 479 U.S. 1094, 107 S.Ct. 1308, 94 L.Ed.2d 163 (1987). In any event, Coffee’s testimony was proper factual background information, rather than legal conclusions. See United States v. Scop, 846 F.2d 135 (2d Cir.), modified on rehearing, 856 F.2d 5 (1988); Marx & Co. v. Diners’ Club, Inc., 550 F.2d 505 (2d Cir.), cert. denied, 434 U.S. 861, 98 S.Ct. 188, 54 L.Ed.2d 134 (1977). Moreover, Judge Ward subsequently instructed the jury as to the limited purpose of the testimony.
There was no error in excluding Spencer’s testimony regarding the meaning of the phrase “personal funds” in a Schedule 13D, as it was an impermissible instruction on governing law.
Third, Bilzerian’s contention that the district court erred in admitting evidence of an error in Bilzerian’s 1986 personal tax return is not persuasive. Brian Murphy, an accountant who prepared tax returns for a partnership in which Bilzerian participated, testified that Bilzerian told him that part of Bilzerian’s capital contribution was personal funds. On cross-examination, Bilzerian sought to establish that the source of the funds had no effect on the partnership tax return. Bilzerian also elicited testimony regarding the accuracy of the partnership tax return. On redirect, over defense objection, the government inquired into the accuracy of Bilzerian’s personal tax return, and elicited testimony that Bilzerian had understated his income by $4 million. Judge Ward denied Bilzeri-an’s motion for a mistrial. He found that Bilzerian’s cross-examination had created the impression that Bilzerian accurately reported the income on all tax returns, and this had opened the door to the government’s redirect. Judge Ward acted within his discretion in admitting this evidence on redirect, to rebut the possible misimpression, arising from cross-examination, that Bilzerian accurately reported on all of his 1986 tax returns. See United States v. Mang Sun Wong, 884 F.2d 1537, 1544 (2d Cir.1989), cert. denied, — U.S. -, 110 S.Ct. 1140, 107 L.Ed.2d 1045 (1990).
Bilzerian next argues that it was improper for the government to prosecute him under the federal false statements statute, 18 U.S.C. § 1001 (1988) (“Section 1001”), for alleged mistatements and omissions in informational reports required by the Securities Exchange Act of 1934 because the government could prosecute him under Section 32(a) of the Exchange Act, 15 U.S.C. § 78ff (1988) (“Section 32(a)”).
It is well-settled that when two statutory provisions overlap, the government may decide under which section to proceed, unless it is clear that Congress intended one section to preempt the other. Congress has not expressed any such intent regarding these provisions.
*1304Fifth, Bilzerian asserts that even if his conduct constituted offenses under Section 1001, constitutional venue was proper only in Washington, D.C., where the reports containing the alleged misstatements and omissions were filed with the SEC. Venue in the Southern District of New York was proper, as this was where the documents were prepared and signed. See United States v. Mendel, 746 F.2d 155, 165 (2d Cir.1984), cert. denied, 469 U.S. 1213, 105 S.Ct. 1184, 84 L.Ed.2d 331 (1985).
Sixth, there is no merit to Bilzerian’s claim that the government failed to prove an offense under Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b) (1988) (“Section 10(b)”) or Rule 10b-5, which prohibit fraudulent practices in connection with the purchase or sale of a security, because it failed to prove a “fraud” within the meaning of the provisions. He contends there was no fraud because his misstatements and omissions were not material, and that no rational jury could have found materiality. The determination of materiality generally is a jury issue. In accordance with the teachings of TSC Industries, Inc. v. Northway, Inc., 426 U.S. 438, 96 S.Ct. 2126, 48 L.Ed.2d 757 (1976), and Basic Inc. v. Levinson, 485 U.S. 224, 231-32, 108 S.Ct. 978, 983, 99 L.Ed.2d 194 (1988), the district court instructed the jury that a material fact “is one that would have been significant to a reasonable investor’s investment decision.” The jury’s verdict was supported by ample evidence.
Finally, Bilzerian argues that his convictions for conspiracy in violation of 18 U.S.C. § 371 (1988) should be reversed because the same conduct cannot constitute both a conspiracy to defraud the United States and a conspiracy to commit substantive offenses. We rejected this argument in United States v. Nersesian, 824 F.2d 1294, 1313 (2d Cir.), cert. denied, 484 U.S. 958, 108 S.Ct. 357, 98 L.Ed.2d 382 (1987) and in United States v. Williams, 705 F.2d 603, 623-24 (2d Cir.), cert. denied, 464 U.S. 1007, 104 S.Ct. 524, 78 L.Ed.2d 708 (1983). There was ample evidence to support Bilze-rian’s convictions on both conspiracy counts.

. Bilzerian sought to testify that he acted in good faith in making certain statements in documents filed with the SEC, and in changing the structure of certain financing arrangements. In cross-examination regarding alleged prior inconsistent testimony before the SEC, Bilzerian similarly sought to assert that he believed his conduct was legal.