A remarkable effort by some of the best of California's defense bar.
Unfortunately for Mr. Lazarenko (left, leaving the SF federal building) even with an additional six counts knocked by the Ninth, the remaining eight counts of conviction make his nine year sentence a step closer.
Players: SF Giants Dennis Riordan, Doron Weinberg, and Donald Horgan for Mr. Lazarenko. Opinion by Judge McKeown, joined by Judges Tashima and Gould.
Facts: Lazaranko was the former prime minister of Ukraine. Id. at *1. His “involvement” in businesses was actually extortion, alleged the US government. Id. Because the money hit US accounts, Lazaranko was charged in SF with a 53-count indictment alleging conspiracy, money laundering, wire fraud, and interstate transportation of stolen property. Id. He was convicted after trial of fourteen counts, and appealed. Id.
Issue(s): (One among many): “Lazarenko also appeals the denial of his Rule 33 motion for a new trial. He argues that the government indicted him on [one specific set of] charges, knowing that the charges could not be proven, and then, after the directed verdict of acquittal, used the evidence from [this alleged] scheme against him in its closing argument, in violation of the doctrine of retroactive misjoinder. He asserts that he was denied the opportunity to respond in his own closing argument to the government's misleading statements.” Id. at 14 (footnote omitted).
Held: “[W]e reject the government’s contention that we have limited the doctrine of retroactive misjoinder only to cases where there is more than one defendant.” Id. at *15. “[T]he doctrine of prejudicial spillover or retroactive misjoinder may apply to a case where there is only one defendant.” Id.
“Invoking the three-factor test that the Second Circuit developed in Vebeliunas, the district court concluded that Lazarenko was not prejudiced by the now-dismissed charges. Under the Vebeliunas test, the court considers:
(1) whether the evidence was so inflammatory that it would tend to cause the jury to convict on the remaining counts;
(2) the degree of overlap and similarity between the dismissed and remaining counts; and
(3) a general assessment of the strength of the government's case on the remaining counts . . .
These factors reasonably address concerns about prejudicial spillover. We adopt these factors and add to them the factors we identified in Cuozzo - whether the trial court diligently instructed the jury and whether there is evidence, such as the jury's rendering of selective verdicts, to indicate that the jury compartmentalized the evidence.” Id. at *16.
“The district court did not abuse its discretion in denying Lazarenko a new trial based on prejudicial misjoinder.” Id.
Of Note: What is “retroactive misjoinder?” “ ‘Retroactive misjoinder’ arises where joinder of multiple counts was proper initially, but later developments- such as a district court's dismissal of some counts for lack of evidence or an appellate court's reversal of less than all convictions-render the initial joinder improper. In this Circuit, ‘[t]o invoke retroactive misjoinder,’ a defendant ‘must show compelling prejudice.’ Prejudicial spillover from evidence used to obtain a conviction subsequently reversed on appeal may constitute compelling prejudice.” Id. at *14.
How to Use: Lazarenko provides new rules for retroactive misjoinder:
1. the principle can apply to single defendants, and
2. there is a new multi-factor test for prejudicial spillover. It will be the lead decision on the concept.
The opinion has many other important holdings as well, however. This decision discusses “constructive amendments” – and calls out the government’s “shift in theory.” Id. at *6. It finds too great a temporal break to uphold wire fraud allegations, when funds were wired years after the fraud. Id. at *8. And, unfortunately, it refuses to demand a particularity requirement for the specific foreign statutes violated, when those foreign crimes were the bases of money laundering, wire fraud, and transportation of stolen money counts. Id. at *6.
An important read for white-collar defense.
For Further Reading: Павло Івáнович Лазарéнко, Pavlo Ivanovych Lazarenko, has lead a colorful life that has sparked a great deal of litigation. See wikipedia entry here. In the present case, he was sentenced to nine years, with a $10 million fine. See New York Times article here.
Long before this appeal of the convictions hit the Ninth, a different panel (including Justice O’Connor) issued a pretty controversial ruling on the criminal forfeiture aspects of the case. See blog on United States, Liquidators v. Lazarenko here.
Photo of Mr. Lazarenko leaving the San Francisco federal building from http://blog.kievukraine.info/4129.jpg
Steven Kalar, Senior Litigator, N.D. Cal. FPD. Website at www.ndcalfpd.org