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The Second Circuit Affirms the Convictions of the “Madoff Five” in a 29-page Summary Order

In United States v. Bonventre, 14-4714-cr (April. 20, 2016) (JMW, RR, CFD), the Court affirmed by summary order the convictions of five former employees of Bernard L. Madoff Investment Securities (the “Appellants”) convicted in the Southern District of New York (Swain, J.)  for multiple counts of conspiratorial and substantive securities fraud, bank fraud, and records falsification; making false SEC and IRS filings; obstructing enforcement of tax laws; and tax evasion.  This is the appeal from the lengthy criminal trial of several of Madoff’s former employees.  Madoff pleaded guilty soon after his confession to the authorities; his top lieutenant, Frank DiPascali, pleaded guilty as a cooperator and has since died.  As a result, this trial was the most detailed look at Madoff’s operations offered in any criminal proceeding.  Although the roles of several of these defendants seemed minor given the scale and duplicity of Madoff’s fraud, the trial nonetheless received a considerable amount of press coverage given the headline-making nature of Madoff’s fraud.  Despite the publicity, the Court seemed to think that the legal issues raised on appeal were non-precedential.  The Court’s 29-page summary order (which is long for a summary order), issued roughly three weeks after oral argument and rejected all of Appellants’ arguments, including claims of government misconduct in summation relating to an alleged appeal to racial bias.  The Court’s conclusion was that despite the variety of issues raised, the defendants received a fair trial and their convictions will stand.

Oral argument on appeal focused on prosecutorial comments during rebuttal summation.  During rebuttal, the prosecutor noted that the jury assembly room in the courthouse was named after Constance Baker Motley, a civil rights activist and the first black woman federal judge, and he urged jurors to approach their deliberations with the same “courageous” attitude displayed by Judge Motley.   U.S. District Judge Laura Taylor Swain, who oversaw the trial, chided the prosecutor for the comments noting, "many of the remarks made in the rebuttal summation were ill-conceived and unworthy of the institutional stature of the United States Attorney's Office."   She held, however, that the comments were not prejudicial and that the government’s “ lapses in judgment did not, in the context of the entire trial . . . deprive the Defendants collectively, or individually, of a fair trial.” 

On appeal, Appellant’s attorneys argued that that prosecutor crossed the line, invoking an “unspoken but unmistakable subtext . . . that the jury -- composed of six African-Americans and one Latino -- should not permit the well-paid, white defendants to escape the equal rule of law that Judge Motley fought hard to bring to fruition.”  With the trial prosecutor who made this remark having moved to private practice, another prosecutor argued the case for the United States on appeal.  She defended the prosecutor’s comments as a fair response, arguing that the prosecutor’s invocation of Motley was an appropriate counterargument to a historical analogy the defense made to John Adams, who won the acquittals of British soldiers on trial over the Boston Massacre.   The case made Adams famous for the principle of ensuring a fair trial for even the most despised defendants.

The Second Circuit rejected Appellants’ argument, affirming the rulings of the “able trial judge.”  Slip. Op. at 20.  It found that, “[w]hile the prosecutor’s choice of subject was peculiar, and his rhetoric needlessly grandiose, it did not constitute severe misconduct.”  Id.  at 24.  The opinion is a reminder that prosecutors have wide latitude in how they speak to juries and, even if even if judges are critical of prosecutorial language, proving that misconduct is so severe and significant as to deny a fair trial is a high hurdle to surmount.  One hopes that the decision, which is critical of the challenged remarks, is not taken as license to make arguments that are close to the line.  This is particularly important on issues relating to race:  we do not want any lawyers, least of all prosecutors, to make appeals to racial prejudice in criminal trials because they are inconsistent with fairness and also the appearance of fairness.  It may well be that future rebuttal arguments like this one will be met with reversals if the Court believes that its disapproving message here is not taken to heart.

The Court also rejected Appellants’ many other arguments in short order:  the motion for a bill of particulars was correctly denied; the joinder of counts and defendants was within the district court’s discretion; the Brady/Giglio claims that were raised in a Rule 33 motion were correctly rejected; the evidence was sufficient on all challenged counts; the conscious avoidance instruction was correctly given; other alleged government misconduct, such as repeated claims that the defense’s claims were “absurd” and "ridiculous," caused no prejudice; and the “monumental” forfeiture was not “grossly disproportional” in violation of the Eighth Amendment.

-By Helen P. O'Reilly and Harry Sandick