United States v. Porat
| Docket Number | 22-1560 |
| Decision Date | 07 August 2023 |
| Citation | 76 F.4th 213 |
| Parties | UNITED STATES of America v. Moshe PORAT, Appellant |
| Court | U.S. Court of Appeals — Third Circuit |
76 F.4th 213
UNITED STATES of America
v.
Moshe PORAT, Appellant
No. 22-1560
United States Court of Appeals, Third Circuit
Argued May 18, 2023
Filed: August 7, 2023
Appeal from the United States District Court for the Eastern District of Pennsylvania (D.C. No. 2-21-cr-00170-001), District Judge: Honorable Gerald J. Pappert
Mark B. Dubnoff [ARGUED], Nancy E. Potts, Mary Teresa Soltis, Office of the United States Attorney, 615 Chestnut Street, Suite 1250, Philadelphia, PA 19106, Counsel for Appellee
Avery D. Medjuck, Theodore D. Sampsell-Jones, Alexandra A.E. Shapiro [ARGUED], Shapiro Arato Bach, 1140 Avenue of the Americas, 17th Floor, New York, NY 10036, Counsel for Appellant
Tai H. Park, 1140 Avenue of the Americas, 17th Floor, New York, NY 10036, Counsel for Amicus Appellants Professor Stephen F. Smith and Notre Dame Law School
Michael D. Pepson, Americans for Prosperity Foundation, 1310 N Courthouse Road, Suite 700, Arlington, VA 22201,
Counsel for Amicus Appellant Americans for Prosperity Foundation
Before: KRAUSE, PHIPPS, and CHUNG, Circuit Judges.
OPINION OF THE COURT
CHUNG, Circuit Judge.
Moshe Porat, the former Dean of the Fox School of Business at Temple University ("Fox"), appeals his convictions for conspiracy to commit wire fraud, in violation of 18 U.S.C. § 371, and wire fraud, in violation of 18 U.S.C. § 1343.
On appeal, Porat argues that the government did not plead or prove by sufficient evidence (1) that he sought to deprive his victims of money, (2) that he sought to personally obtain money, or (3) that the party he deceived was the same party he defrauded of money (i.e., "convergence"). With regard to the second issue, Porat also argues that the District Court erred in refusing to provide the jury with the instructions he sought. Because the evidence was sufficient for a rational jury to convict him, and because the government need not prove either that the scheme was intended to personally benefit Porat or "convergence," we will affirm.
I. BACKGROUND
A. Factual Background
Porat was convicted for his scheme to raise Fox's "rankings" in U.S. News and World Report ("U.S. News"), a publication that rates colleges and graduate schools, including business schools.1 The government offered evidence that, while some have criticized these rankings as poor measures of a school's quality, many people rely on them to compare business schools. These include applicants, students, alumni, donors, employers, faculty, and the schools themselves.
Porat was Fox's Dean from 1996 to 2018. During his time at Fox, he was "almost obsessed with rankings." Suppl. App. ("SA") 399. Sometime in the early 2000s, Porat created a committee that met regularly to consider the data that Fox would provide for use by U.S. News in formulating rankings. It also studied the rankings and strategized ways by which Fox could improve its rankings. Over time, Porat came to work most closely on rankings with two Fox employees, Isaac Gottlieb and Marjorie O'Neill. Porat eventually eliminated the committee and consolidated responsibility for Fox's survey submissions in O'Neill, who reported directly to him. After that, Porat continued to confer with both Gottlieb and O'Neill on rankings strategy.
At some point, Porat's efforts to raise Fox's rankings crossed the line from strategy to falsification. Evidence at trial showed that Fox may have submitted false data to rankings publications as early as 2010. By 2014, having reverse-engineered the methodology behind the U.S. News rankings, Porat, Gottlieb, and O'Neill used falsifications to manipulate Fox's rankings—in particular, the rankings for its Online MBA ("OMBA") and Part-Time MBA ("PMBA") programs. To better Fox's OMBA ranking, they falsely stated that 100 percent of Fox's OMBA students had taken the Graduate Management Admission Test ("GMAT"), when the actual number was much lower. They also misreported
data on offers of admission, student debt, and average undergraduate grade point average. To better Fox's PMBA ranking, they combined data for Fox's PMBA program with data for its OMBA and Executive MBA ("EMBA") programs to overstate the PMBA students' average work experience and the percentage of Fox's MBA students who were PMBA students. As with the OMBA program, they also falsely reported that 100 percent of Fox's PMBA students had taken the GMAT.
Partly because of these deceptions, Fox's OMBA program rose from its U.S. News rank of Number Nine in 2014 to Number One in 2015—a position that it held for four straight years. Fox's PMBA ranking climbed steadily over three years from Number Fifty-Three in 2014 to Number Seven in 2017.
Porat viewed Fox's high rankings as a key way to market Fox to students and to thus generate more tuition money.2 One Fox administrator testified that Porat believed Fox needed "good rankings and to publicize good rankings for enrollment." SA475. In a book manuscript, Porat boasted about Fox's OMBA ranking as Number One and wrote that "enhancing the school's image" is "the single most important factor in assuring continuous demand from the students, the parents, and employees." Id. at 299. And with Porat's knowledge and involvement, Fox aggressively marketed its false high rankings. Fox advertised its deceptively obtained rankings on its website, on social media, and on billboards and signs. Porat also sent or approved emails touting Fox's false rankings to students, student recruiters, and donors. Porat also represented to students that Fox's high rankings would bring them continuing—and even increasing—benefits. In a 2017 speech, Porat told graduating Fox students, "I often say that your diploma is like a share of stock in an enterprise . . . in which you remain shareholder long after you have graduated." Gov't Ex. 148. He further said that "many leading publications"—including "U.S. News"—"rank our programs among the best in the world and they agree that our stock indeed has been appreciating in value." Id. During a 2017 "champagne toast" held to celebrate the rankings, Porat posed for a photo with students in front of a banner that read "YOUR STOCK IS SOARING." SA733-35. Fox printed the banner and arranged the photo to use it for "PR." Id. at 734.
The advertising worked. At trial, former students testified that they chose Fox because of its rankings. One former student testified that he "decid[ed] to go with Temple University because of [its] Number 1 ranking." Id. at 502. He further explained that he chose Fox because he knew that "people look at [rankings]," and that "once [he] graduat[ed]," he wanted to have "been a part of" a program that "was ranked Number 1." Id. at 503. After learning that Fox's rankings were inflated, he regretted not choosing a school that would have given him the "same piece of paper" at a much lower cost. Id. at 507. Another former student testified that he believed employers hire students from schools with the best "brand" and that Fox's highly ranked brand would help him "compete in the
marketplace." A172. Ultimately, Fox's Number One ranking "was the only factor in [his] decision making" in choosing Fox over another school. SA133. Enrollment numbers corroborate that Fox's falsely inflated ranking influenced students' enrollment decisions. Between the 2014-2015 and 2017-2018 academic years, enrollment in Fox's OMBA and PMBA programs spiked from 133 students to 336 students and 88 students to 194 students, respectively. The increased enrollment was tremendously lucrative. The government estimated that Fox gained nearly $40 million in tuition from the additional students who enrolled during this period (2014-2018).
As the money poured in, Porat's team discussed how to keep the rankings high and make even more money. In a January 2015 email to Porat, Gottlieb emphasized Fox's need to maintain its high rankings, cautioning that just as "being number one can potentially add over 1-200 students a year" and bring corresponding "financial value" to Fox, so could "moving down" in the rankings "result in financial losses associated with a reduction of the 100+ students." SA749. Porat responded, "Good stuff." Id. In September 2015, Gottlieb copied Porat on an email about rankings for another Fox program, its Global MBA ("GMBA"). Gottlieb noted that Fox's "OMBA and PMBA doubled in intake numbers when we had a striking increase in ranking," and estimated that increasing Fox's GMBA ranking would produce "a profit of over $700,000 a year." Id. at 756.
Then, in early 2018, Porat's scheme was exposed. On January 9, 2018, an article discussing Fox's repeated Number One ranking highlighted Fox's self-reported 100-percent GMAT figure. That figure raised an "enormous red flag" among other Fox administrators who knew that it was false. Id. at 189. Nonetheless, and despite warnings from administrators that they should not proceed, Porat pushed ahead with a celebratory toast, saying "we're going." Id. at 336. At the toast, Porat lauded Fox's OMBA ranking. The next day, Fox administrators decided to disclose the false GMAT data to U.S. News. Yet even then, Porat continued to publicize the rankings. On January 22, 2018, he sent an email to his "Porat 100," a VIP list that included Fox donors and potential donors, with the subject line "#1 Online MBA and #2 Online BBA in the nation AGAIN!" Id. at 810. Two days later, on January 24, 2018, U.S. News announced that Fox's "misreported data resulted in the school's numerical rank being higher than it otherwise would have been," and that "[b]ecause of the discrepancies," it would move Fox's OMBA program to the "Unranked" category. A528-29. Fox then withdrew its other programs, including its PMBA program, from consideration in U.S. News' rankings for that year.
The exposure was a disaster for Fox's rankings. When U.S. News resumed ranking Fox, it placed both Fox's OMBA and PMBA programs in forty-first place. And as Fox's rankings fell, its enrollment did as...
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