United States v. Tuzman
| Decision Date | 03 May 2021 |
| Docket Number | 15 Cr. 536 (PGG) |
| Parties | UNITED STATES OF AMERICA v. KALEIL ISAZA TUZMAN and OMAR AMANAT, Defendants. |
| Court | U.S. District Court — Southern District of New York |
Tuzman and Amanat proceeded to trial on October 23, 2017. (Oct. 23, 2017 minute entry) In its case-in-chief, the Government introduced more than 400 exhibits and called seventeen witnesses, including three cooperating witnesses: former KIT Digital chief financial officer Robin Smyth; former KIT Digital president Gavin Campion; and Maiden, the manager of Maiden Capital. In its rebuttal case, the Government called three witnesses, including FBI Special Agent Joel DeCapua, who offered testimony indicating that Amanat had introduced fabricated emails at trial.
On the defense case, Tuzman called former KIT Digital chief technology officer Andrew Steward; a summary witness who analyzed certain travel and phone records; and Harvard Law School professor Allen Ferrell, who offered expert testimony concerning Maiden's trading activities in KIT Digital. Amanat called no witnesses, but introduced several dozen exhibits. In response to the Government's rebuttal case alleging that Amanat had fabricated evidence, Amanat called Emma Rosen, a paralegal employed by defense counsel.
On December 26, 2017, the jury returned a verdict finding both Defendants guilty on all counts. (Verdict (Dkt. No. 627); Trial Transcript ("Tr.") 7280-82)1
Tuzman and Amanat have moved for a judgment of acquittal or a new trial under Rules 29 and 33 of the Federal Rules of Criminal Procedure. (Amanat Br. (Dkt. No. 735); Tuzman Br. (Dkt. No. 738)) Amanat argues that (1) the evidence against him is insufficient as to all counts (Counts One through Four) and insufficient to establish venue as to Counts Onethrough Three (Amanat Br. (Dkt. No. 735) at 11-35)2; (2) the Court erred in permitting Agent DeCapua to offer expert testimony concerning Amanat's alleged fabrication of email evidence (id. at 35-48); (3) Amanat was deprived of an impartial jury because a juror did not disclose her ties to law enforcement (id. at 48-52); and (4) the Government made improper arguments in summation. (Id. at 53-59)
Tuzman argues that (1) the evidence is insufficient as to the market-manipulation conspiracy charged in Count Four, because no overt acts occurred within the statutory period (Tuzman Br. (Dkt. No. 738) at 11-34); (2) the wire fraud conspiracy charged in Count Five is legally deficient (id. at 34-42); (3) the Government engaged in pervasive misconduct at trial (id. at 42-68); (4) evidence that Amanat fabricated emails unfairly prejudiced Tuzman (id. at 68-73); and (5) "other errors" warrant a new trial. (Id. at 73-74) In a supplemental brief, Tuzman argues that his conviction on Count Six must be vacated because the Government withheld information in violation of Brady v. Maryland, 373 U.S. 83 (1963) and United States v. Giglio, 405 U.S. 150 (1972). (Tuzman Supp. Br. (Dkt. No. 999)) Tuzman also contends that newly discovered evidence regarding Maiden's past drug use warrants a new trial on all counts. (Id. at 27-28, 34) For the reasons discussed below, Defendants' motions will be denied in their entirety.
I. EVIDENCE AT TRIAL
Stephen Maiden managed Maiden Capital, a small hedge fund located in Charlotte, North Carolina. In June 2008, Amanat asked Maiden to make an investment in Enable Invest ("Enable"), a Dubai-based asset management firm operated by Amanat's brother, Irfan Amanat. (Tr. 576-77, 790) Amanat told Maiden that the investment was "essentially 'riskless'" and "[v]ery liquid." (Tr. 576-77) Maiden at first declined the invitation (Tr. 582), but in August 2008, he invested $1 million in Enable on behalf of Maiden Capital. (Tr. 544, 583-84, 676, 790) Before making that investment, Maiden confirmed with Amanat that Enable "would provide monthly statements" regarding the investment. (Tr. 584) Maiden asked about monthly statements because he "needed to know how those returns did each month so [that he] could reflect them in the returns [he] sent out to . . . Maiden Capital investors." (Id.)
After Maiden made the investment, he was sent monthly Enable statements, which generally came from Irfan Amanat. (Tr. 585-86, 588-89) The first such statement - issued on October 1, 2008 - showed that Maiden Capital's $1 million investment had grown to $1,025,666.67. (Tr. 589-90; GX 1507 (Oct. 1, 2008 Enable statement)) When Maiden received his monthly Enable balance, he "would send that exact dollar amount to SS&C, [his] fund administrator." (Tr. 590) SS&C "use[d] that number to come up with a combined return number to send out" to individual Maiden Capital investors. (Tr. 796)
In October 2008, Maiden discussed the status of his Enable investment with the Amanat brothers, and they assured him that it was "doing well." (Tr. 592) Maiden, in turn, reported to one of his investors that he was "making good profits." (Tr. 591-92)
In November 2008, Amanat asked Maiden to make an additional $2 million investment in Enable, explaining that Enable needed a one-week short-term loan. (Tr. 624-25) Amanat told Maiden that, if he made the loan, Amanat would cause other entities to invest $5 million in Maiden Capital. (Id.)
Amanat set forth the terms of the proposed short-term loan in a November 8, 2008 email to Maiden. (Tr. 623-24; GX 1509). That email - which includes the subject line "Term Sheet Binding Agreement" - reads as follows:
(GX 1509 (Nov. 8, 2008 Amanat email to Maiden); Tr. 624)
Given that Maiden Capital had assets of $8 to $10 million during this period, the proposed $2 million loan to Enable represented a significant percentage of the hedge fund's total assets. (Tr. 626) Maiden "couldn't afford to just not get [the $2 million] back because [he] needed to trade, possibly make redemptions [to his investors]." (Id.) Having those funds "gone" for only the agreed-upon "one week was critical" to Maiden. (Id.) Maiden expressed theseconcerns to Amanat. (Id.; see also GX 1510 at 3) In the end, Maiden decided to make the loan, sending $2 million to Enable in three separate wire transfers in November 2008. (Tr. 625, 635) Based on his discussions with Amanat, Maiden's understanding was that Enable would not invest the funds "anywhere," and would instead maintain them in Enable's "bank account, to be wired right back." (Tr. 631) Amanat told Maiden that he intended to use the $2 million as "show money" to induce a much larger investment from Russell Deleon, another investor. (Tr. 634)
At about this same time - early November 2008 - the Amanat brothers were discussing how Enable could satisfy a more than $1 million redemption request that Tuzman had made on behalf of KIT Digital. (Tr. 621-23; GX 3051) KIT Digital was a software technology company that provided "on-demand video management on the internet," and Tuzman served as the company's chief executive officer and chairman of the board.3 (Tr. 203, 205, 297, 315) KIT Digital had previously invested in Enable, but in a November 5, 2008 email to Irfan Amanat, Tuzman requested that that investment be redeemed in light of "unacceptable delays in receiving cash upon request." (GX 3051) Irfan Amanat forwarded Tuzman's email to his brother, and asked for help in formulating a response:
Omar Amanat responded to Irfan as follows:
To continue reading
Request your trial