United States v. Cuti , 528 F. App'x 84 ( 2013 )

11-3756 (L)
United States v. Cuti
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED
ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE
PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A
DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST
SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
1 At a stated term of the United States Court of Appeals
2 for the Second Circuit, held at the Thurgood Marshall United
3 States Courthouse, 40 Foley Square, in the City of New York,
4 on the 26th day of June, two thousand thirteen.
5
6 PRESENT: DENNIS JACOBS,
7 Chief Judge,
8 JOHN M. WALKER, JR.,
9 Circuit Judge,
10 SANDRA DAY O’CONNOR,
11 Associate Justice (retired).*
12
13 - - - - - - - - - - - - - - - - - - - -X
14 UNITED STATES OF AMERICA,
15 Appellee,
16
17 -v.- 11-3756-cr(LEAD)
18 11-3831-cr(CON)
19 ANTHONY CUTI, WILLIAM TENNANT,
20 Defendants-Appellants.
21 - - - - - - - - - - - - - - - - - - - -X
22
*
The Honorable Sandra Day O’Connor, Associate Justice
(retired), of the United States Supreme Court, sitting by
designation.
1
1 FOR APPELLANTS: BRIAN C. BROOK, Clinton Brook & Peed
2 (Matthew J. Peed, Clinton Brook &
3 Peed, on the brief; Brian D. Waller,
4 Simon & Partners, LLP, on the
5 brief), New York, New York, for
6 Defendant-Appellant Anthony Cuti.
7
8 JOHN J. KENNEY (Laura B. Hoguet,
9 Tai-Heng Cheng, Caitlin N. Bush,
10 Damian R. Cavaleri, on the brief),
11 Hoguet Newman Regal & Kenney, LLP,
12 New York, New York, for Defendant-
13 Appellant William Tennant.
14
15 FOR APPELLEE: SARAH E. MCCALLUM (Rebecca Monck
16 Ricigliano, Katherine Polk Failla,
17 on the brief), Assistant United
18 States Attorneys, for Preet Bharara,
19 United States Attorney for the
20 Southern District of New York, New
21 York, New York.
22
23 Appeal from judgments of the United States District
24 Court for the Southern District of New York (Batts, J.).
25
26 UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED
27 AND DECREED that the judgments of the district court are
28 AFFIRMED.
29
30 Anthony Cuti and William Tennant, two former senior
31 executives of the New York drugstore chain, Duane Reade,
32 appeal from the judgments of conviction of the United States
33 District Court for the Southern District of New York (Batts,
34 J.). Cuti, the former CEO of Duane Reade, was convicted of
35 conspiracy to commit securities fraud, securities fraud, and
36 making false statements to the SEC, among other things, and
37 sentenced to three years’ imprisonment, three years’
38 supervised release, a $500 special assessment, and a $5
39 million fine. Tennant, the former CFO, was convicted of
40 securities fraud and sentenced to time served, followed by
41 three years’ supervised release, as well as a $100 special
42 assessment and a $10,000 fine.
43
44 Cuti and Tennant raise numerous issues on appeal. We
45 assume the parties’ familiarity with the underlying facts,
46 the procedural history, and the issues presented for review.
47 Cuti’s challenge to the admission of lay opinion testimony
2
1 and Tennant’s claims as to the sufficiency of evidence and
2 the conscious avoidance charge are addressed in a separate
3 opinion issued concurrently with this order.
4
5 [1] Cuti argues that the district court erred by denying
6 Cuti’s request for a Rule 17(c) subpoena to Duane Reade and
7 Jeff Winick. We review the denial of a pretrial Rule 17(c)
8 subpoena for abuse of discretion. United States v. Nixon,
9 418 U.S. 683, 702 (1974); see also United States v. Green,
10 No. 07-3517, 2008 WL 4104220, at *1 (2d Cir. Aug. 27, 2008)
11 (citing Nixon). Under Nixon, a party moving for a pretrial
12 Rule 17(c) subpoena, “must clear three hurdles: (1)
13 relevancy; (2) admissibility; (3) specificity.” 418 U.S. at
14 700; see also United States v. Stein, 488 F. Supp. 2d 350,
15 364-65 (S.D.N.Y. 2007). The district court did not abuse
16 its discretion in concluding that Cuti’s request for a Rule
17 17(c) subpoena did not meet this standard.
18
19 [2] Cuti also claims that the district erred by limiting
20 the cross-examination of John Henry and Jerry Ray. We
21 review a district court’s decision to limit the scope of
22 cross-examination for abuse of discretion. United States v.
23 Cedeño, 644 F.3d 79, 81 (2d Cir. 2011).
24
25 The Confrontation Clause protects “an opportunity for
26 effective cross-examination, not cross-examination that is
27 effective in whatever way, and to whatever extent, the
28 defense might wish.” United States v. Owens, 484 U.S. 554,
29 559 (1988) (internal quotation marks omitted; emphasis in
30 original). “[T]rial judges retain wide latitude insofar as
31 the Confrontation Clause is concerned to impose reasonable
32 limits on such cross-examination based on concerns about,
33 among other things, harassment, prejudice, confusion of the
34 issues, the witness’ safety, or interrogation that is
35 repetitive or only marginally relevant.” Delaware v. Van
36 Arsdall, 475 U.S. 673, 679 (1986). In determining whether
37 the district court abused its discretion in limiting
38 cross-examination, we must ask whether “the jury [was] in
39 possession of facts sufficient to make a discriminating
40 appraisal of the particular witness’s credibility.” United
41 States v. Laljie, 184 F.3d 180, 192 (2d Cir. 1999) (internal
42 quotation marks omitted).
43
44 To the extent that the district court actually limited
45 Cuti’s cross-examination of Henry and Ray, the court did so
46 based on recognized grounds (e.g., jury confusion, marginal
47 relevance, etc.). See Van Arsdall, 475 U.S. at 679. We
3
1 cannot conclude that the district court abused its
2 discretion by imposing these limitations.
3
4 [3] Cuti argues that the district court erred by admitting
5 the hearsay testimony of Cory Zelnik (allegedly recounting
6 statements made by Winick) pursuant to Rule 801(d)(2)(E)’s
7 coconspirator exclusion to the hearsay prohibition. We
8 review a district court’s admission of purported hearsay
9 evidence under Rule 801(d)(2)(E) for clear error. United
10 States v. Coppola, 671 F.3d 220, 246 (2d Cir. 2012).
11
12 To admit hearsay evidence of the statement of a
13 coconspirator, a district court must find by a preponderance
14 of the evidence that a conspiracy existed, that the members
15 included the declarant and the party against whom the
16 evidence is offered, and that the statement was made during
17 and in furtherance of the conspiracy. Id. As an initial
18 matter, it is not clear that Zelnik actually introduced any
19 out-of-court statements made by Winick. A review of the
20 record reflects that Zelnik was typically referring to his
21 own views, or was speaking on behalf of the business
22 entities Winick Realty Group, Danielle Equity, or Store Ops.
23 None of Zelnik’s testimony involved him introducing out-of-
24 court statements made by Winick. In any event, even if
25 Zelnik’s testimony introduced hearsay, Cuti has not
26 established that the district court clearly erred in finding
27 that Cuti, Zelnik, and Winick were co-conspirators and that
28 Winick’s “statements” were made during and in furtherance of
29 the conspiracy.
30
31 [4] Cuti contends that the government improperly introduced
32 a new theory of the case during rebuttal summation. When,
33 as here, a defendant has objected at trial, we review a
34 claim of improper argument to the jury for prejudicial
35 error, considering the severity of the misconduct, the
36 curative measures adopted, and the certainty of conviction
37 absent the misconduct. United States v. Helmsley, 941 F.2d
38 71, 96 (2d Cir. 1991).
39
40 Here, the statements made by the government during
41 rebuttal summation were by way of response to statements
42 made in closing by Cuti’s counsel, and were based entirely
43 on evidence introduced by the government at trial. Such
44 rebuttal summation is proper. United States v. Rubinson,
45 543 F.2d 951, 966 (2d Cir. 1976). Even if rebuttal
46 summation was improper in the limited respect raised by
47 Cuti, he has not shown that it deprived him of a fair trial,
4
1 warranting reversal. See United States v. Pena, 793 F.2d
2 486, 490 (2d Cir. 1986).
3
4 [5] Finally, Cuti argues that the district court erred in
5 imposing a $5 million fine before fixing the amount of
6 restitution. When, as here, no objection is made below, we
7 review the district court’s imposition of a criminal fine
8 for plain error. United States v. Pfaff, 619 F.3d 172, 174
9 (2d Cir. 2010). Because the district court did consider
10 restitution before imposing the fine, as required by 18
11 U.S.C. § 3572(a), the district court did not err, plainly or
12 otherwise.
13
14 [6] Tennant claims that he suffered prejudice when the
15 government argued during opening and closing statements that
16 Tennant profited from his participation in the fraud and
17 that Oak Hill suffered some loss. We review a claim of
18 improper argument before the jury--where no objection was
19 made at trial--for plain error, meaning that the error
20 affected substantial rights and affected the outcome of the
21 proceedings. United States v. Williams, 690 F.3d 70, 77 (2d
22 Cir. 2012). We must reject Tennant’s challenge unless the
23 error “seriously affect[ed] the fairness, integrity, or
24 public reputation of [the] judicial proceedings.” United
25 States v. Carr, 424 F.3d 213, 227 (2d Cir. 2005) (internal
26 quotation marks omitted).
27
28 Tennant has failed to make such a showing. As to
29 profit, Tennant points to statements by the government that
30 Tennant sold his stock options for $2.9 million after
31 participating in several of the real estate concession
32 transactions. These statements are supported in the record
33 and appear accurate, despite Tennant’s characterization
34 otherwise. And even if the statements were erroneous,
35 Tennant does not remotely approach the steep showing of
36 prejudice necessary under plain error review.
37
38 As to loss, Tennant points to the government’s
39 suggestion that Oak Hill relied on Duane Reade’s manipulated
40 financials in deciding whether to buy the company. These
41 statements bear upon the issue of materiality and are
42 adequately supported in the record. In any event, even if
43 the government argued loss without factual support, Tennant
44 has not established plain error.
45
46 [7] Finally, Tennant claims that the district court erred
47 in denying his motion to sever his trial. A district
5
1 court’s decision to grant or deny severance “is virtually
2 unreviewable on appeal,” and the defendant bears a very
3 “heavy burden” to establish a “miscarriage of justice.”
4 United States v. Locascio, 6 F.3d 924, 947 (2d Cir. 1993).
5 “[T]he burden on a defendant to establish that severance was
6 improperly denied is not an easy one to carry,” because the
7 defendant must show “prejudice so great as to deny him a
8 fair trial.” United States v. Cardascia, 951 F.2d 474, 482
9 (2d Cir. 1991). Tennant has not shown that the district
10 court’s refusal to sever the trial brought about a
11 miscarriage of justice.
12
13 Finding no merit in Cuti and Tennant’s remaining
14 arguments, we hereby AFFIRM the judgments of the District
15 Court.
16
17 FOR THE COURT:
18 CATHERINE O’HAGAN WOLFE, CLERK
19
6