372 F.3d 113 (2nd Cir. 2004), 03-1340, United States v. Chusid

Docket Nº:03-1340.
Citation:372 F.3d 113
Party Name:UNITED STATES of America, Appellee, v. Eugene CHUSID, Defendant-Appellant.
Case Date:June 15, 2004
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit

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372 F.3d 113 (2nd Cir. 2004)

UNITED STATES of America, Appellee,


Eugene CHUSID, Defendant-Appellant.

No. 03-1340.

United States Court of Appeals, Second Circuit

June 15, 2004

Argued: Feb. 2, 2004.

Page 114

Henry J. Steinglass, New York, N.Y. for Defendant-Appellant.

Marc A. Weinstein, Assistant U.S. Attorney, New York, N.Y. (James B, Comey, U.S. Attorney, and Celeste L. Koeleveld, Assistant U.S. Attorney, on the brief) for Appellee.

Before: POOLER, SOTOMAYOR, WESLEY, Circuit Judges.


Defendant-appellant Eugene Chusid appeals from two decisions issued by the United States District Court for the Southern District of New York (Kaplan, J.): (1) an order, dated June 14, 2003, finding him in contempt for his failure to satisfy the district court's prior order, dated July 17, 2001, imposing restitution and fines ("the Contempt Order") and (2) an amended judgment in a criminal case, dated May 28, 2003, resentencing him pursuant to 18 U.S.C. § 3614 ("the Resentencing Order").


On March 1, 2001 Eugene Chusid appeared before Judge Kaplan to plead guilty to: (1) wire fraud in connection with a scheme to induce an individual to transfer funds to an entity called the Carribean Bank of Commerce ("CBC"); (2) interstate transfer of two stolen checks in the amount of $1.6 million; and (3) fraudulently receiving deposits on behalf of CBC. In sum, as Judge Kaplan stated in the contempt hearing that is the subject of this appeal, Chusid was involved in a scheme that "included portraying himself as an officer of a bank, persuading people to make deposits to the bank and then diverting the proceeds."

On July 17, 2001 Judge Kaplan sentenced Chusid to a term of thirty-seven

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months imprisonment and three years of supervised release. He also ordered Chusid to pay restitution in the amount of $360,000 and imposed a fine of $250,000. Chusid was obliged to pay these funds by December 1, 2001. It is undisputed that this obligation has not been met.

On December 12, 2002 the Government moved for an order to show cause as to why Chusid should not be held in contempt, or be found in criminal default, because of his delinquency, pursuant to 18 U.S.C. § 3572(i), in paying restitution and fines. The Government also requested that Chusid be resentenced pursuant to 18 U.S.C. § 3614 because of his failure to meet these obligations. Chusid opposed the order to show cause and cross-moved for, inter alia, an order setting aside the fine because he "was misinformed at sentencing regarding his right to appeal the fine."

Judge Kaplan issued an oral ruling on the order to show cause on May 27, 2003. He first noted that Chusid is a defendant in two federal civil actions arising out of the fraudulent scheme involving CBC. First, Chusid was sued by one of the victims of the CBC fraud in the District of New Jersey in 1999, shortly before he was indicted in the Southern District of New York. The court in that action immediately issued an order freezing certain of Chusid's assets, an order that remains in effect. Chusid's father is also a defendant in that action and, according to Chusid's present counsel, he is currently a fugitive from a court order directing him to be jailed for his failure to comply with prior orders to repatriate assets.

In 2000 the Securities and Exchange Commission filed an action against Chusid and several other defendants in the Northern District of Texas. On September 26, 2000 that court issued an order appointing a receiver, who was charged with attaching such assets of the defendants as could be located. The court stated in that order that the appointment of a receiver "is both necessary and appropriate in order to prevent waste and dissipation of assets" by the defendants.

The action of the Texas court was apparently undertaken in response to a financial transaction undertaken by Chusid some weeks earlier. Chusid was--and perhaps still is--the sole shareholder of an entity called World U.S. Financial Services, Inc. ("World US"). On September 1, 2000 Chusid made a "wire transfer request" to a bank in Luxembourg, asking it to transfer $2.76 million from a World account to an entity called Planar S.A. ("Planar"), which is incorporated in Luxembourg. The request is signed by "Eugenij Husid."

Interestingly, it appears that Planar did not exist at the time the transfer request was made. According to its incorporation papers, which are dated September 5, 2000, Planar is an entity formed to "acquire" securities, patents and licenses in order "to manage and develop them." Planar's board of directors is to be comprised of "at least three members, divided into Class A directors and Class B directors." The directors are identified as "Eugenij Husid," Grigoriy Chusid, and an individual named "Nikolay Mateev Nikolov," who is said to reside in Bulgaria. Chusid's father is named as the "day-to-day business manager of the corporation." Finally, the incorporation papers state that Planar "will be bound by the joint signature of a Class A director and a Class B director, or by the single signature of the day-to-day business manager into the limits of the daily...

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