United States v. Feldman

• Decision Date: 30 July 2019
• Docket Number: No. 17-13443,17-13443
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Isaac FELDMAN, Defendant-Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

931 F.3d 1245

UNITED STATES of America, Plaintiff-Appellee,

v.Isaac FELDMAN, Defendant-Appellant.

No. 17-13443

United States Court of Appeals, Eleventh Circuit.

July 30, 2019

John C. Shipley, Assistant U.S. Attorney, Andrea G. Hoffman, Lisa Tobin Rubio, Emily M. Smachetti, Michael Eric Thakur, U.S. Attorney Service-Southern District of Florida, Miami, FL, for Plaintiff-Appellee.

Richard Kevin Houlihan, Houlihan Law Office, Richard Carroll Klugh, Jr., Law Office of Richard C. Klugh, Jacqueline Shapiro, Jacqueline E. Shapiro, Esq., MIAMI, FL, for Defendant-Appellant.

Barry Jay Glickman, Law Office of Avrom R. Vann, New York, NY, for Toronto Dominion Bank (THE).

Before WILLIAM PRYOR, NEWSOM, and BRANCH, Circuit Judges.

WILLIAM PRYOR, Circuit Judge:

This appeal requires us to decide several issues—including an issue of first impression in this Circuit about the Double Jeopardy Clause of the Fifth Amendment—arising from Isaac Feldman’s convictions and sentence for conspiracy to commit wire fraud and conspiracy to commit money laundering. Feldman invested in two Miami Beach nightclubs that hired foreign women to pose as tourists, attract patrons, and persuade them to buy drinks without paying attention to the clubs’ exorbitant prices. A grand jury returned an indictment against Feldman and alleged co-conspirators alleging that the nightclubs’ activities included regular acts of wire fraud. After a jury convicted the defendants of some counts but acquitted them of others, we reversed their convictions. See United States v. Takhalov , 827 F.3d 1307 (11th Cir.), modified on denial of reh’g , 838 F.3d 1168 (11th Cir. 2016). After a retrial, a second jury found Feldman guilty of conspiracy to commit wire fraud and conspiracy to commit money laundering. The district court sentenced him to 100 months of imprisonment. Feldman contends that his retrial on an alternate theory of the money-laundering-conspiracy charge—for which the first jury verdict was silent—violated his double-jeopardy rights, that the evidence is insufficient to support his convictions, that the indictment’s wire-fraud-conspiracy charge was constructively amended, that literary allusions by prosecutors deprived him of a fair trial, and that his sentence is procedurally and substantively unreasonable. We disagree on each point, and we affirm his convictions and sentence.

I. BACKGROUND

A grand jury indicted Isaac Feldman and several alleged co-conspirators for one count of conspiracy to commit wire fraud, 18 U.S.C. §§ 1343, 1349 ; one count of conspiracy to commit money laundering, id. § 1956(h), both by means of financial transactions to conceal the nature and source of illegal proceeds, id. § 1956(a)(1)(B)(i), and by the international transmission of funds to promote unlawful activity, id. § 1956(a)(2)(A); and several counts of wire fraud, id. § 1343. The charges stemmed from the defendants’ involvement in a ring of Miami Beach nightclubs at which customers were parted from their money. The ringleader of the alleged conspiracy was Russian businessman and con artist Alec Simchuk, who became a cooperating witness for the government. Feldman, a Miami Beach–area resident and Russian-speaking naturalized citizen, invested in two clubs with Simchuk, Stars Lounge and VIP Diamond Club.

The clubs operated on a business model that Simchuk had developed in Eastern Europe. The basic hustle was for so-called "B-girls," young women from Eastern Europe who worked for the clubs, to pose as partygoing tourists, trawl Miami Beach for eligible patrons—the ideal targets were well-dressed single men using high-value credit cards—and lure them back to the clubs, where they would be led to spend exorbitant sums on drinks for themselves and the B-girls. The indictment charged a panoply of deceptive or underhanded tactics that the B-girls and bartenders used to increase the customers’ bills and to keep them unaware of the charges they were incurring: for example, hiding menus, ordering drinks without the customers’ knowledge, ignoring customers’ inquiries about prices, lying about prices, hiding the amount on a receipt when requesting a customer’s signature, forging customers’ signatures, encouraging customers to drink themselves into a stupor, and serving the B-girls shot glasses filled with water when the customers thought they were ordering vodka shots.

Feldman and several alleged co-conspirators pleaded not guilty, and after a joint trial, a jury found Feldman guilty of conspiracy to commit wire fraud. But the jury found Feldman not guilty of the individual counts of wire fraud with which he was charged. The jury also found Feldman guilty of conspiracy to commit money laundering by the international transmission of funds to promote unlawful activity, 18 U.S.C. § 1956(a)(2)(A), but it expressed no finding about conspiracy to commit money laundering by financial transactions to conceal the nature and source of illegal proceeds, id. § 1956(a)(1)(B)(i).

The verdict form provided the jury three options with regard to the money-laundering-conspiracy count: "Guilty (Concealment of Payments)," "Guilty (Transmitting & Receiving Funds Internationally)," and "Not Guilty," arranged as follows:

The district court instructed the jury that it could find Feldman guilty under either or both theories, but it had to agree unanimously about any theory it selected. The jury found Feldman guilty of conspiracy to commit money laundering by international transactions and made no other mark, as the image above reflects.

The district court sentenced Feldman to 100 months of imprisonment, which exceeded Feldman’s advisory guideline range. The district court determined that an upward variance was warranted based in large part on its finding that Feldman had committed perjury when he testified in his defense.

We reversed Feldman’s convictions on the ground that the district court erred when it failed to give a jury instruction requested by the defendants. See Takhalov , 827 F.3d at 1312–24. The requested instruction would have informed the jury that the B-girls’ concealment of their employment relationship with the clubs was not sufficient to establish fraud. See id. at 1311. We held that the district court should have given the requested instruction because it correctly stated the law, dealt with an important matter raised at the trial, and was not substantially covered by the other instructions. See id. at 1315–20. And we held that its denial was not harmless beyond a reasonable doubt because the government had argued that the B-girls’ dissembling their employment status was in and of itself an act of fraud, and the jury reasonably could have found that the defendants lacked any other fraudulent intent. See id. at 1322–25.

The government redacted the indictment to charge Feldman individually with the wire-fraud and money-laundering conspiracy counts of which the first jury had found him guilty. Feldman again pleaded not guilty, and he proceeded to an individual trial.

At the second trial, the gist of the government’s case was that Feldman was an involved investor with significant managerial authority over the clubs’ activities and finances. Simchuk, the most important government witness, testified about the clubs’ business model, the manner in which the B-girls and bartenders fleeced customers out of their money, and Feldman’s knowing participation in the scheme. Several B-girls testified about incidents in the clubs and the extent of their interactions with Feldman. And the government presented evidence that Feldman helped manage the clubs’ finances through his sister, Alex Burrlader, and his accountant, Kim Marks. Burrlader, who worked as Feldman’s bookkeeper, was a signatory of the Stars Lounge bank account and kept records of the clubs’ finances in her office at Feldman’s realty company, including records of "chargebacks," or payments that credit-card companies rescinded after their customers complained that the nightclubs had billed them for unauthorized charges. Marks testified that he had set up a limited-liability company, Ieva Marketing LLC, in the name of B-girl Ieva Koncilo at either Feldman’s or Burrlader’s request; Simchuk testified that Feldman had managed the creation of the company and that its purpose was to funnel cash payments to the B-girls without having to pay taxes on their earnings.

Feldman did not testify in his own defense as he had at the first trial. He presented a short character-based defense by calling two business associates and his rabbi to testify that he was a naïve and trusting person who would not willingly have joined a fraudulent scheme. Apart from their testimony, Feldman’s defense strategy was to try to establish on cross-examination of the government’s witnesses that Feldman had no knowledge of any fraud that took place in the nightclubs and that Simchuk’s testimony to the contrary was unreliable.

On two occasions, prosecutors made references to the Charles Dickens novel Oliver Twist and, in particular, the character Fagin, a street criminal who inducted the title character into his band of juvenile pickpockets. During jury selection, the government used Fagin and the children as an example when it asked prospective jurors whether they understood that the ringleader of a conspiracy is guilty of a crime even if he does not personally steal from the targets and whether they would be unwilling to credit a co-conspirator’s testimony because he was also a criminal. The government returned to the image of Fagin during its rebuttal closing argument:

I will end with the story of where we began with my colleague .... He talked about the story of Oliver Twist and how the older man, Fag[i]n, would send out his little orphans onto the street to pick people’s pockets. Those guys—Fag[i]n wasn’t there on the streets picking their pockets. Oleg Simchuk, Isaac Feldman, weren’t there when these credit cards were being processed. But did they know it? Did they benefit from it? Absolutel

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