In United States v. Huberfeld, 2nd Cir. No. 19-436(L), the Second Circuit Court of Appeals vacated a 30-month prison sentence and a $19 million order of restitution in a case of wire fraud conspiracy. The appeals court found that the trial judge improperly relied on criminal conduct that was not identified in the charging document and, as a result, applied an incorrect Sentencing Guideline. The case was remanded for resentencing.
Defendant Murray Huberfeld solicited investments for Platinum Partners, a Manhattan-based hedge fund. Co-conspirator Jona Recchnitz suggested that he contact Norman Seabrook, the president of the Corrections Officers Benevolent Association (“COBA”), to ask if the union would invest with Platinum.
Huberfeld, Recchnitz, and Seabrook eventually agreed that COBA would invest $20 million with Platinum. Huberfeld agreed to pay Seabrook $60,000 for his efforts in securing the investment.
To cover up the bribe, Rechnitz gave Seabrook $60,000 in cash, then invoiced Platinum for the same amount, purportedly for the purchase of courtside seats to 8 New York Knicks games. Platinum then paid Rechnitz $60,000 via check.
Platinum eventually went bankrupt, and COBA lost $19 million of its $20 million investment.
Seabrook and Huberfeld were indicted and charged with wire fraud conspiracy based on Seabrook’s role in inducing COBA to invest in Platinum, and for Huberfeld’s role in bringing him in. Recchnitz was also indicted but cooperated with the Government and pled guilty to a single criminal charge.
Huberfeld agreed to plead guilty to a single charge of conspiracy to commit wire fraud. Critically, the indictment only charged Huberfeld with conspiring to present the $60,000 invoice to Seabrook, not the entire bribery scheme. The plea agreement focused on the $60,000 fraud scheme, stipulating that fraud guideline §2B1.1 applied, that the loss was $60,000, and that the sentencing range was 6 to 12 months.
At sentencing, the court did not apply guideline §2B1.1. Instead, believing that the true offense was commercial bribery, the court applied guideline §2B4.1. Under this guideline, the sentence range was 30 to 37 months. The court sentenced Huberfeld to 30 months in prison and ordered him to pay $19 million in restitution.
On appeal the court vacated the sentence and restitution order, finding that the trial court incorrectly applied the commercial bribery guideline. The court found that “cross referencing” is only permissible when the conduct described in the charging document constitutes an offense covered by another guideline. In Huberfeld’s case, while the charging document referenced the broader bribery scheme, it did not sufficiently allege that Huberfeld engaged in commercial bribery. As a result, the appellate court found that the trial judge could not cross reference to apply the commercial bribery guideline when the charging document alleged only wire fraud.
The Second Circuit did not address the question of whether the trial court could have considered the greater losses as “relevant conduct” under U.S.S.G. 1B1.3, in this case, because it found the trial court’s application of the commercial bribery guidelines to be improper
Federal sentencing guidelines were established to ensure uniform criminal sentencing across the country. The guidelines provide minimum and maximum sentence ranges. But if the federal sentencing guidelines are to work properly, the trial court must apply the correct guideline.
If you have been charged with a federal crime, it is critical that you work with a federal criminal defense attorney who understands the nuances and intricacies of federal criminal sentencing, and will fight to ensure that the correct guideline is being applied. In many cases, an experienced federal criminal defense attorney can even argue for a downward departure from the recommended sentence.
New York City federal criminal defense attorney Hope Lefeber regularly works with psychological, psychiatric, and forensic experts to educate judges before and during sentencing. To help her clients avoid the harsh sentences that can result from strict application of federal sentencing guidelines, Ms. Lefeber encourages judges to vary from federal sentencing guidelines and order less severe punishments.
Federal conspiracy charges allow the government to claim that one person is responsible for the actions of another. Defending someone against a federal conspiracy charge is challenging, and you need an experienced federal criminal defense attorney on your side.
Conspiracy charges are particularly common in cases of wire fraud. A person can be charged with conspiracy to commit wire fraud even if they had a relatively minor role in the crime.
Federal prosecutors often use charges of wire fraud as a “catch all” to cover many different kinds of criminal activities. Anytime a defendant uses the U.S. Mail or another delivery service, or uses email, text messages, fax, or even the telephone to share information about a criminal activity, the federal government can prosecute someone for wire fraud.
If you are facing federal conspiracy or wire fraud charges, it is critical that you work with a federal criminal defense attorney who has experience defending people against these kinds of allegations.
New York City federal criminal defense attorney Hope Lefeber has been defending people accused of conspiracy, wire fraud, and other federal crimes for more than 30 years. She has successfully represented high-profile clients, has lectured on federal criminal law topics, and has appeared on TV as a legal expert.
If you have been charged with a federal crime, Hope Lefeber should be your first call. Contact Hope Lefeber today to schedule a free, confidential consultation to discuss your case.