United States v. Goffer, No. 11-3591 (2d Cir. 2013)
Annotate this Case
Justia Opinion Summary
Want to stay in the know about new opinions from the Second Circuit US Court of Appeals?
Sign up for free summaries delivered directly to your inbox. Learn More ›
You already receive new opinion summaries from Second Circuit US Court of Appeals. Did you know we offer summary newsletters for even more practice areas and jurisdictions? Explore them here.
Defendants appealed their securities fraud and conspiracy convictions stemming from their involvement in a double-blind, high-volume insider trading network that led the participants to acquire over $10 million in profits. The court held that wiretap evidence was lawfully obtained and therefore properly admitted; the jury had sufficient evidence to convict Defendant Kimelman of securities fraud; the conscious avoidance jury instructions were proper; evidence of Kimelman's rejection of a plea bargain was properly excluded; and defendants' sentences were reasonable. Accordingly, the court affirmed the convictions and sentences.
The court issued a subsequent related opinion or order on July 25, 2013.
Download PDF
11-3591-cr(L) United States v. Goffer 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT August Term, 2012 (Argued: March 11, 2013 Decided: July 1, 2013) Docket No. 11-3591-cr(L) UNITED STATES OF AMERICA, Appellee, -v.ZVI GOFFER, CRAIG DRIMAL, MICHAEL KIMELMAN, Defendants-Appellants, JASON GOLDFARB, ARTHUR CUTILLO, EMANUEL GOFFER, DAVID PLATE, Defendants.* Before: WALKER, SACK, AND WESLEY, Circuit Judges. Defendants Zvi Goffer, Michael Kimelman, and Craig Drimal appeal from convictions of conspiracy to commit securities fraud in violation of 18 U.S.C. § 371 and securities fraud in violation of 15 U.S.C. §§ 78j(b) and 78ff and sentences entered in the Southern District of New York (Richard J. Sullivan, Judge). Defendants allege that (1) wiretap * The Clerk of the Court is directed to amend the caption in the case to conform with the above. 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 evidence is inadmissible in prosecutions of securities fraud; (2) the jury lacked sufficient evidence to prove Defendants knowledge of the insider source; (3) the jury instructions on conscious avoidance were improper after the Supreme Court s decision in Global-Tech Appliances, Inc. v. SEB S.A., -- U.S. --, 131 S.Ct. 2060 (2011); (4) the district court improperly excluded a rejected plea bargain; and (5) the sentences were higher than other white-collar defendants receive for comparable thefts. We hold that (1) wiretap evidence is admissible where the wiretap was lawfully obtained, and wire fraud remains a predicate offense to obtain a wiretap; (2) there was sufficient evidence from which a jury could reasonably infer Defendants mens rea; (3) conscious avoidance law was not altered by Global-Tech; (4) the district court properly excluded evidence of a rejected plea bargain; and (5) Defendants sentences were reasonable in light of the magnitude of their theft and the 18 U.S.C. § 3553(a) factors. The judgment of the district court is accordingly AFFIRMED. ALEXANDER MARTIN DUDELSON, Law Office of Alexander M. Dudelson, Brooklyn, NY, for Appellant Zvi Goffer. MICHAEL S. SOMMER (Morris J. Fodeman, Scott D. Tenley, on the brief), Wilson Sonsini Goodrich & Rosati, P.C., New York, NY, for Appellant Michael Kimelman. ARLENE VILLAMIA-DRIMAL, Weston, CT, for Appellant Craig Drimal. ANDREW L. FISH, Assistant United States Attorney (Richard C. Tarlowe, Assistant United States Attorney, on the brief), for Preet Bharara, United States Attorney for the Southern District of New York, New York, NY, for Appellee United States of America. 2 1 2 WESLEY, Circuit Judge: Defendants Zvi Goffer, Michael Kimelman, and Craig 3 Drimal were convicted in the United States District Court 4 for the Southern District of New York (Richard J. Sullivan, 5 Judge) of conspiracy to commit securities fraud in violation 6 of 18 U.S.C. § 371 and securities fraud in violation of 15 7 U.S.C. §§ 78j(b) and 78ff, 17 C.F.R. §§ 240.10b-5 and 8 240.10b-5-2, and 18 U.S.C. § 2.1 9 convicted after a 13-day jury trial; Drimal pled guilty. Goffer and Kimelman were 10 Goffer was convicted of two counts of conspiracy to commit 11 securities fraud and twelve counts of securities fraud; 12 Kimelman was convicted of conspiracy to commit securities 13 fraud and two counts of securities fraud; and Drimal pled 14 guilty to conspiracy to commit securities fraud and five 15 counts of securities fraud. 16 sentences and Kimelman and Drimal challenge their 17 convictions based on evidentiary rulings, jury instructions, 18 and sufficiency of the evidence.2 Drimal and Goffer appeal their 1 Jason Goldfarb also filed a notice of appeal but no brief; his appeal was dismissed by an order of this court dated March 16, 2012. 2 We address Defendants additional arguments in a related order. United States v. Goffer, 2013 WL --(2d Cir. 2013) (summary order). 3 1 2 Background Goffer, Kimelman, and Drimal, along with non-party 3 defendants, conducted a double-blind, high-volume insider 4 trading network that led the participants to acquire over 5 $10 million in profits. 6 trader3 at the Schottenfeld Group, LLC ( Schottenfeld ), 7 spearheaded the conspiracy. 8 9 Goffer, who worked as a proprietary In 2007, Drimal traded from the offices of the Galleon Group ( Galleon ), a firm led by Raj Rajaratnam. Kimelman, 10 previously an attorney at a New York law firm, traded for 11 Quad Capital ( Quad ), a proprietary trading firm. 12 2007, Kimelman, Goffer, and Goffer s brother Emanuel 13 established a new trading firm, Incremental Capital 14 ( Incremental ), though they retained their other positions. 15 In late In early 2008, Kimelman left Quad to trade with Emanuel, 16 and Goffer began trading at Galleon. Kimelman and Goffer 17 spoke often and shared information that led them to trade in 18 the same stocks. 19 traded 151 stocks within five days of each other, including 20 88 stocks that they both traded on the same day. In 2007 and 2008, Kimelman and Goffer 3 Proprietary traders use the firm s capital to make trades and retain half of the profits that they earn. 4 1 I. The Conspiracy 2 In the summer of 2007, Arthur Cutillo and Brian 3 Santarlas, attorneys at Ropes & Gray LLP, met with Jason 4 Goldfarb, a workers compensation attorney who had attended 5 law school with Cutillo. 6 Gray attorneys that he had a friend who traded stocks and 7 would pay for information about corporate acquisitions. 8 Government showed at trial that Goffer was this friend. 9 What followed was a series of tips in which Cutillo and/or Goldfarb indicated to the Ropes & The 10 Santarlas would obtain material non-public information and 11 pass it to Goldfarb, who, in turn, would pass it to Goffer. 12 Goffer distributed these tips, which frequently related to 13 impending takeovers, to friends and partners. 14 these tips, Goffer and his co-conspirators would acquire 15 positions in the targeted companies and profit from the 16 takeover s effect on the share price. Based on 17 Goffer s network used prepaid cellular telephones to 18 avoid detection; these phones used by the attorneys and 19 the traders were destroyed after each successful tip. 20 See, e.g., Tr. 429-31, 436-37; Gov t Ex. 114, 127. 21 Throughout the relevant time period, Goffer spoke with co- 22 conspirators, especially Kimelman, guardedly when on the 5 1 phone. For instance, he described the P.F. Chang s tip as a 2 good thing but nothing I m going to talk about on the 3 telephone. Gov t Ex. 145. 4 meet in person or in the street when conveying sensitive 5 information. 6 to avoid detection, suspecting that high-volume trades in 7 little-traded companies immediately prior to their 8 acquisition could raise regulatory eyebrows. Goffer relied 9 on Kimelman to provide him with insights into the meaning of 10 legal documents associated with the acquisitions, including 11 revised merger agreements, settlement agreements, signature 12 pages, and limited guarantees, inter alia. 13 II. The 3Com Tip 14 Goffer often asked Kimelman to They also discussed countermeasures and ways The first tip presented at trial related to Bain 15 Capital s bid to acquire 3Com. When Cutillo and Santarlas 16 learned about the progress of the deal for example, by 17 finding documents entitled closing agenda or signature 18 papers on Ropes & Gray s document management system or on a 19 communal printer - they reported this progress to Goldfarb, 20 who passed it on to Goffer. 21 relating to the takeover bid with some of his co- 22 conspirators. Goffer shared information Goffer frequently convened a group of co- 6 1 conspirator traders (typically including Emanuel, Kimelman, 2 and David Plate, another Schottenfeld trader) at a bar where 3 the group would discuss the progress of the takeover bid and 4 any new information that Goffer had received regarding the 5 plans. 6 On August 7, 2007, Goffer, Drimal, Emanuel, and Plate 7 began acquiring 3Com stock based on the material nonpublic 8 information that Goffer received from Goldfarb. 9 10. Gov t Ex. That evening, Goffer had a 25-minute phone conversation 10 with Kimelman.4 11 shares of 3Com stock. 12 more 3Com stock by Quad s risk management team, Kimelman 13 sent an otherwise wordless email to Goffer into which he had 14 pasted an instant message conversation with Quad s risk 15 management expert. 16 The next day, Kimelman purchased 94,200 That week, forbidden from purchasing Goffer also provided details about the acquisition and 17 the sources of his information to Drimal; Drimal passed both 18 on to David Slaine, a cooperating witness. 19 that the information came from an attorney from Ropeson 20 who risked his whole . . . career and maybe going to jail 21 by sharing these tips. Drimal explained Gov t Ex. 206, 208. 4 This conversation predated, and therefore was not recorded by, the wiretaps employed by Government investigators in this case. 7 1 On September 27, 2007, Goffer told Plate and other co- 2 conspirators that the acquisition of 3Com would happen the 3 next day. 4 prepared and he confirmed with Kimelman, who verified, based 5 on his background as an attorney, that signature papers 6 were what they sounded like; they were something that took 7 place at the end of a deal. 8 was either present or was consulted over the phone. 9 announced its acquisition of 3Com the next day; the co- Goffer had learned that the signature papers were Tr. 831-32, 1067. Kimelman Bain 10 conspirators all profited.5 11 needed to pay his source, and identified those who were 12 contributing (including Drimal); the co-conspirators paid 13 Santarlas, Cutillo, and Goldfarb $25,000 each. 14 III. Other Tips 15 Goffer told Plate that he In November 2007, Santarlas overheard other Ropes & 16 Gray associates discussing a client s upcoming acquisition 17 of Axcan. 18 acquisitions, accessed at least four documents on the Ropes 19 & Gray document management system relating to the 20 acquisition; he and Cutillo shared the tip with Goldfarb. Santarlas, who did not work on mergers and 5 Goffer earned $378,608; Kimelman earned $243,716 in his Quad account and $16,687 in another account; and Drimal earned $4,535,000. Gov t Ex. 10. 8 1 Goldfarb passed the attorneys information to Goffer, who 2 disseminated it (at a minimum) to Drimal and Slaine. 3 shared the information with Michael Cardillo, a Galleon 4 trader, though he again attributed the tip to Ropeson 5 attorneys. 6 stock and benefitted from the Axcan acquisition announced on 7 November 29, 2007; Drimal gained $1,984,867. 8 trade Axcan because it was a small, rarely-traded stock and 9 he did not want to attract regulatory attention. 10 11 Tr. 1106. Drimal Drimal and Plate purchased Axcan Goffer did not Tr. 657- 58. In February 2008, Santarlas learned about a possible 12 takeover of P.F. Chang s China Bistro, Inc. ( P.F. Chang s ) 13 from a colleague; he conveyed this information to Goldfarb, 14 who shared it with Goffer. Tr. 131-34, Gov t Ex. 2. 15 days later Goffer called Kimelman to seek his advice, but 16 noted that it was nothing I m going to talk about on the 17 telephone. 18 Manhattan to figure out our plan of attack. 19 Emanuel, and Kimelman decided to purchase P.F. Chang s stock 20 as part of an acquisition of a broad restaurant portfolio to 21 disguise their use of the inside information. 22 Goffer instructed the group that everything s got to be Gov t Ex. 145. A few Kimelman agreed to come into 9 Id. Goffer, Tr. 849-50. 1 printed out to help them go about . . . justifying a 2 trade. 3 announced in 2008. 4 Gov t Ex. 149. No P.F. Chang s acquisition was In March 2008, Cutillo and Santarlas observed that deal 5 documents for Bain Capital s acquisition of Clear Channel 6 Communications, Inc. ( Clear Channel ) were laid out in a 7 closing room at the law firm, apparently ready for 8 execution, and reported that closing was imminent. 9 Unbeknownst to these tippers, neither of whom worked on the 10 deal, the Clear Channel acquisition was staged so that the 11 lenders could be sued for specific performance. 12 deal did not close as anticipated, Goffer, Kimelman, and 13 Drimal all suffered losses on their Clear Channel 14 investments. 15 When the In May, there was more Clear Channel activity at the 16 Ropes & Gray offices. Cutillo passed the information to 17 Goldfarb, who told Goffer. 18 Goffer summoned Kimelman for an urgent meeting; 19 immediately afterwards, he called another trader and told 20 him to purchase Clear Channel call options for everybody. 21 Gov t Ex. 199, 201. 22 Channel publicly announced that it was in settlement talks Tr. 494-95, Gov t Ex. 198. Over the next two business days, Clear 10 1 with the lenders and that an amended merger agreement had 2 been reached. 3 Goffer earned over $1 million in profits in his Galleon 4 account trading on this tip. 5 The market reacted favorably to this news and Schottenfeld trader Gautham Shankar provided several 6 tips to Goffer, including acquisitions of Kronos, Inc. and 7 Hilton Hotels Corp. ( Hilton ). 8 Kimelman, Drimal, and Emanuel benefitted from trading on 9 this inside information. Tr. 650-51. Goffer, Profits from these illegal trades 10 were included in calculating the loss amount for sentencing 11 purposes, but the trades were not charged at trial. 12 IV. Recruitment of David Slaine 13 In the fall of 2007, Goffer and Kimelman recruited 14 David Slaine to join Incremental Capital. The co- 15 conspirators hoped that Slaine, who unbeknownst to them was 16 working as a cooperating witness after his own arrest for 17 insider trading, would provide them with the financial 18 backing to get their insider trading-fueled business off the 19 ground. 20 get great information by investing with Incremental. 21 Gov t Ex. 114A. 22 about certain acquisitions before they happened, including Kimelman urged Goffer to tell Slaine that he would Goffer mentioned that he had received tips 11 1 3Com, Axcan, and Hilton. 2 told Slaine that the information came from a construction 3 worker, but when pushed he elaborated you [are] probably 4 better off not knowing where they were coming from...[Y]ou 5 don t want to know where it s coming from obviously. 6 Ex. 222. 7 that [g]uy fixing that pothole down there. 8 V. 9 Gov t Ex. 212. Goffer jokingly Gov t Kimelman chimed in, asserting that the source was Id. Trial and Sentencing The Government s evidence at trial included testimony 10 from Slaine, Santarlas, Plate, Cardillo, and a Ropes & Gray 11 partner. 12 conversations with Goffer, Kimelman, Drimal, and Emanuel; 13 wiretap recordings of Goffer s conversations with Kimelman, 14 Drimal, Emanuel, and others; instant messages and e-mails 15 sent between the co-conspirators; telephone records; and 16 trading records. 17 It also included recordings of Slaine s Defendants were convicted on all counts. The district 18 court sentenced Drimal (who pled guilty) to 66 months 19 imprisonment, Goffer to 120 months imprisonment, and 20 Kimelman to 30 months imprisonment. 21 also entered forfeiture orders of $11 million, $10,022,931, 22 and $289,079 against Drimal, Goffer, and Kimelman, 23 respectively. 12 The district court 1 Discussion 2 Defendants challenge (1) the admission of wiretap 3 evidence in support of their securities-fraud convictions; 4 (2) the sufficiency of the evidence to support Kimelman s 5 conviction on the substantive counts of insider trading; (3) 6 the district court s jury instructions on conscious 7 avoidance;6 (4) the district court s exclusion of evidence 8 that Kimelman rejected a plea bargain; and (5) the sentences 9 they were issued. Other arguments raised by Defendants are 10 addressed in a related summary order. Goffer, 2013 WL --. 11 12 13 14 I. 15 permitting the Government to introduce evidence obtained 16 through wiretaps because securities fraud is not a predicate 17 offense under Title III of the Omnibus Crime Control and 18 Safe Streets Act of 1968, 18 U.S.C. § 2510 et seq. ( Title 19 III ), and because the evidence was not intercepted 20 incidentally to an otherwise lawful wiretap. 21 §§ 2516(1), 2517(5). Lawfully-Obtained Wiretap Evidence Is Admissible in a Securities Fraud Prosecution Defendants contend that the district court erred in See 18 U.S.C. Concurring with the analysis of a 6 The Supreme Court appears to now prefer the appellation willful blindness. United States v. Ferguson, 676 F.3d 260, 278 n.16 (2d Cir. 2011). However, [b]ecause the parties used the term conscious avoidance below, we continue to use that term for purposes of this case. United States v. Coplan, 703 F.3d 46, 89 n.39 (2d Cir. 2012). 13 1 recent and related case in the Southern District of New 2 York, we hold that the evidence was lawfully obtained and 3 therefore properly admitted. 4 Rajaratnam, No. 09-cr-1184(RJH), 2010 WL 4867402, at *1-6 5 (S.D.N.Y. Nov. 24, 2010), aff d, No. 11-4416-cr, -- F.3d -, 6 2013 WL 3155848 (2d Cir. June 24, 2013). 7 See United States v. Defendants assert two flaws with the wiretap evidence 8 that the Government adduced at trial.7 9 that the wiretap evidence should be excluded because First, they allege 10 securities fraud is not a predicate offense under Title III. 11 Second, they allege that the intercepts are not admissible 12 in a securities fraud prosecution unless interception of 13 information relating to securities fraud is inadvertent. 14 Neither argument is persuasive. 15 16 Title III contains an exclusionary rule prohibiting the use at trial of unlawfully intercepted communications. 7 18 Drimal also contends that the wiretap intercepts were predicated on dishonest manipulation by the government and (we presume) that they should therefore have been excluded. A defendant who pleads guilty unconditionally . . . waives all challenges to prosecution except those going to the court s jurisdiction. United States v. Lasaga, 328 F.3d 61, 63 (2d Cir. 2003). Drimal, who entered an unconditional guilty plea, waived this meritless argument. Moreover, the wiretap applications specify the nature of Goffer s scheme and explicitly note that securities fraud (a) will be uncovered and (b) is not a predicate offense for Title III. 14 1 U.S.C. §§ 2 exclusionary rule, Defendants have to establish that the 3 wiretaps were illegal. 4 2518(10)(a)(i), 2515. To benefit from the Section 2517(5) of Title III governs the use of 5 evidence obtained on a wiretap relating to offenses other 6 than those specified in the order of authorization or 7 approval. 8 § 2517(5) . . . is to prevent subterfuge searches, in 9 which the government uses a warrant authorizing seizure of 10 one type of evidence as a license to collect evidence of an 11 offense not covered by the authorization. 12 Smith, 726 F.2d 852, 865 (1st Cir. 1984). 13 offenses under Section 2517(5) may include offenses, federal 14 as well as state, not listed in Section 2516 so long as 15 there is no indication of bad faith or subterfuge by the 16 federal officials. . . . 17 on Doe, 889 F.2d 384, 387 (2d Cir. 1989). 18 18 U.S.C. § 2517(5). [T]he purpose of United States v. [O]ther In re Grand Jury Subpoena Served When an authorized wiretap intercepts communications 19 relating to offenses other than those specified in the order 20 of authorization, 18 U.S.C. § 2517(5), disclosure or use 21 of those communications is permissible provided a 22 subsequent application . . . made to a judge of competent 15 1 jurisdiction [demonstrates] the good faith of the original 2 application. 3 (2d Cir. 1976). 4 a showing that the original order was lawfully obtained, 5 that it was sought in good faith and not as a subterfuge 6 search, and that the communication was in fact incidentally 7 intercepted during the course of a lawfully executed order. 8 Id. (quoting S. Rep. No. 90-1097, at 2189 (1968)). 9 perceive no reason why the principle undergirding this rule United States v. Marion, 535 F.2d 697, 700 Such subsequent application would include We 10 - that disclosure or use of communications intercepted 11 incidentally to an otherwise lawful, good faith wiretap 12 application does not violate Title III - should not apply 13 when the Government forthrightly discloses the probability 14 of intercepting communications relating to other offenses 15 ex ante, at the time it makes its initial wiretap 16 application. 17 insulated from evidence of one of his illegal activities 18 gathered during the course of a bona fide investigation of 19 another of his illegal activities merely because law 20 enforcement agents are aware of his diversified criminal 21 portfolio. 22 Cir. 1983). Congress did not intend that a suspect be United States v. McKinnon, 721 F.2d 19, 23 (1st 16 1 In this case, Government investigators indicated in the 2 wiretap applications that, in addition to wire fraud, they 3 expected to uncover evidence of securities fraud (which, 4 they expressly noted, is not a predicate offense under 18 5 U.S.C. § 2516 ). 6 wiretaps were not obtained as a subterfuge or to 7 surreptitiously investigate crimes other than those about 8 which they informed the court.8 9 This representation ensured that the [W]hen the government investigates insider trading for 10 the bona fide purpose of prosecuting wire fraud, it can 11 thereby collect evidence of securities fraud, despite the 12 fact that securities fraud is not itself a Title III 13 predicate offense. 14 The ten judges reviewing wiretap applications in this case 15 found that the Government proved that it had a good-faith 16 investigation of wire fraud and/or money laundering. 17 fact that the Government also informed the approving courts 18 that Defendants were involved in a conspiracy to commit 19 securities fraud did not immunize Defendants from otherwise Rajaratnam, 2010 WL 4867402, at *6. 8 The Kimelman argues that not every case of insider trading will involve wire fraud. We do not reach the question of whether insider trading not involving wire fraud might permit a court to approve a wiretap; we instead focus on the case at hand in which Defendants conduct constituted both. 17 1 lawful interception of communications related to their wire 2 fraud. 3 properly admitted. 4 5 6 7 II. The Jury Had Sufficient Evidence to Convict Kimelman of Securities Fraud 8 supporting his substantive securities fraud conviction for 9 his purchase of 15,000 shares of 3Com stock on August 10, 10 2007 and 5,000 shares of 3Com stock on September 25, 2007. 11 Specifically, he contends that the Government did not prove 12 that Goffer had tipped him about 3Com or that he knew or 13 consciously avoided knowing that Goffer had material 14 nonpublic information about 3Com that was disclosed in 15 violation of a fiduciary duty.9 16 argues that the Government s main evidence, an unrecorded 17 phone call he had with Goffer on August 7 and an email he 18 wrote to Goffer on August 15, does not indicate that he 19 received a tip from Goffer or knew that any such tip was 20 based on illegally-disclosed information. 21 that a discussion he had with the other co-conspirators on The wiretap evidence was lawfully obtained and Kimelman challenges the sufficiency of the evidence 9 More specifically, he He also insists Kimelman does not challenge, and we therefore do not discuss, any elements of insider trading aside from the knowing use of material nonpublic information obtained in violation of a fiduciary duty. 18 1 September 27, on the eve of the deal s announcement, cannot 2 count as proof of his awareness of the earlier fraud. 3 [A] liable tippee must know that the tipped 4 information is material and non-public . . . and the tippee 5 knows or should know that there has been a breach of 6 fiduciary duty. 7 2012) (emphasis retained) (quoting Dirks v. SEC, 463 U.S. 8 646, 660 (1983)). 9 Kimelman knew the identity or nature of the source if he SEC v. Obus, 693 F.3d 276, 287 (2d Cir. The Government did not need to prove that 10 knew that the information was illegally obtained. 11 denying Kimelman s Rule 29 motion, the district court 12 described this as a verdict that could go either way and 13 certainly a close case, but decided that the jury s 14 verdict [was not] unreasonable such that it should be 15 overturned. 16 inference that the jury may have drawn in the government s 17 favor, we agree. 18 122 (2d Cir. 2008) (quoting United States v. Finley, 245 19 F.3d 199, 202 (2d Cir. 2001)). 20 Id. In Reviewing de novo and crediting every United States v. Hassan, 578 F.3d 108, A court examines each piece of evidence and considers 21 its probative value before determining whether it is 22 unreasonable to find the evidence in its totality, not in 19 1 isolation, sufficient to support guilt beyond a reasonable 2 doubt. United States v. Autuori, 212 F.3d 105, 114 (2d Cir. 3 2000). This requirement is particularly critical where, as 4 here, some evidence derives its probative force from other 5 evidence. 6 circumstantial evidence. 7 F.3d 63, 70 (2d Cir. 2008)(quoting United States v. 8 Martinez, 54 F.3d 1040, 1043 (2d Cir. 1995)). 9 need not find that every reasonable jury would have [T]he jury s verdict may be based entirely on United States v. Santos, 541 Moreover, we 10 convicted Kimelman; we affirm if we find that any rational 11 trier of fact could have found the essential elements of the 12 crime beyond a reasonable doubt. 13 590 F.3d 93, 109 (2d Cir. 2009) (internal quotation marks 14 omitted, emphasis in original). United States v. Stewart, 15 Kimelman argues that we should exclude from our 16 analysis evidence related to activity after the trades at 17 issue. 18 the illicit nature of Goffer s source after the trades is 19 still probative (though not in itself sufficient to 20 establish his knowledge before the trades). 21 22 We reject this argument. Kimelman s knowledge of Evidence indicating a defendant s knowing participation in a later stock manipulation scheme is relevant to the 20 1 earlier scheme where, for example, it shows that a defendant 2 was conversant in the language of stock manipulation. 3 United States v. Rutkoske, 506 F.3d 170, 177 (2d Cir. 2007). 4 This analysis applies equally in the context of insider 5 trading. 6 chronology; whether the similar act evidence occurred prior 7 or subsequent to the crime in question is not necessarily 8 determinative to its admissibility[ and therefore its 9 probative value]. 10 569 (2d Cir. 1990). 11 probative as to intent. 12 Germosen, 139 F.3d 120, 127-28 (2d Cir. 1998). 13 Kimelman s participation in Goffer s ongoing scheme led to 14 later transactions that so closely paralleled the charged 15 conduct that it was probative regardless of the temporal 16 difference. 17 Cir. 2011). 18 Relevancy cannot be reduced to [a] mere United States v. Ramirez, 894 F.2d 565, Subsequent acts are frequently See, e.g., United States v. Here, United States v. Curley, 639 F.3d 50, 61 (2d If we focus on the evidence in the record from prior to 19 the public announcement of Bain s bid for 3Com on September 20 28, 2007, and credit every inference that the jury could 21 have drawn in the Government s favor, we find ample support 22 for the jury to conclude that Kimelman was tipped by Goffer 21 1 and knew or consciously avoided knowing that Goffer s tip 2 about 3Com was based on nonpublic information illegally 3 disclosed in breach of a fiduciary duty. 4 The Kimelman-Goffer telephone call of August 7, though 5 unrecorded, marked a change in Kimelman s 3Com stock trading 6 behavior. 7 in smaller quantities of 1,000, 2,000 and 5,000 shares, 8 including on August 5, just two days before the call. 9 Kimelman did not maintain those positions but sold them Prior to August 7, Kimelman day-traded 3Com stock 10 before the end of each trading day. 11 after the evening phone call, however, Kimelman bought 12 94,200 shares of 3Com, easily his largest single-day 13 purchase, which he did not sell. 14 weeks, he continued to add to that position - buying another 15 24,000 shares on August 9 and 15,000 more shares on August 16 10. 17 3Com merger bid was announced; when the share price shot up, 18 he sold the position and profited. 19 On August 8, the day In the subsequent days and He maintained the accumulated position until after the Kimelman was so aggressive in acquiring 3Com that his 20 employer at Quad restrained him from making further 21 purchases of 3Com stock. 22 Kimelman managed to buy 5,000 more shares of 3Com on Despite the warning from Quad, 22 1 September 25. 2 changed from being very cautious about 3Com to suddenly 3 becoming very confident. 4 defendant s stock trading pattern, which cannot be readily 5 explained by other reasons, could be probative of trading on 6 insider information. 7 1051, 1069 (9th Cir. 1998)(recognizing situations in which 8 unique trading patterns or unusually large trading 9 quantities suggest that an investor had used inside 10 11 From August 7 to 8, Kimelman's behavior Such a sudden change in a See United States v. Smith, 155 F.3d information ). His e-mail to Goffer on August 15, with news of Quad s 12 restraint indicates at the very least, that the two were 13 actively discussing the trading in 3Com shares. 14 new 3Com trading behavior matched that of Goffer and of the 15 other co-conspirators who were tipped by Goffer on August 7. 16 And like the others, Kimelman cashed out of his 3Com 17 positions shortly after Bain s bid was announced. 18 trading patterns among co-conspirators can be another 19 indicator of insider trading. See, e.g., SEC v. Warde, 151 20 F.3d 42, 47-48 (2d Cir. 1998). In this case, the manner in 21 which Kimelman sold the stock is at least suggestive of the 22 motive he had for buying it, which was not for long term 23 investment value, but in anticipation of a particular event. 23 Kimelman s Parallel 1 Also revealing is the discussion Kimelman had with 2 Goffer on the eve of the 3Com deal s announcement on 3 September 27. 4 signature pages in a pending transaction, and Kimelman 5 explained that the preparation of the signature pages meant 6 that a deal signing was imminent. 7 a leading corporate law firm, Kimelman had to know that 8 Goffer, in asking such a question, was privy to the inner 9 workings of a pending transaction to be aware of the status Goffer asked about the significance of As a former associate at 10 of signature pages. 11 access to such information, Kimelman must therefore have 12 known or was aware of a high probability that this insider 13 information was made available to Goffer in breach of a 14 fiduciary duty. 15 Plate, who testified about the conversation, became 16 convinced that Goffer s tip was illegally obtained. 17 Since Goffer had no legal basis to have Indeed, it was from this exchange that Kimelman also argues that much of the Government s 18 evidence applied equally convincingly to Plate, who claimed 19 at trial that he did not know of Goffer s inside source 20 until the signature pages conversation. 21 rational juror could readily infer from the trust that 22 Goffer showed in Kimelman by asking him about the signature 23 pages and the matter-of-fact manner in which Kimelman 24 However, a 1 answered - without astonishment as to Goffer s knowledge or 2 expression of concern about the sensitivity of such 3 information - that Kimelman shared a relationship of trust 4 with Goffer that Plate did not. 5 support an inference that Kimelman had some degree of prior 6 awareness of Goffer s illegal source of information, even if 7 the jury also concluded that Plate had no such awareness. 8 Moreover, the jury was free not to credit Plate s 9 self-serving testimony that he did not know about the source This, in turn, would 10 of the inside information. 11 assessments with respect to credibility [as long as they 12 are] reasonably based on evidence presented at trial. 13 United States v. Torres, 604 F.3d 58, 67 (2d Cir. 2010) 14 (quoting United States v. Ceballos, 340 F.3d 115, 125 (2d 15 Cir. 2003)). 16 [W]e defer to a jury s After September 2007, evidence of his knowledge of the 17 fraud becomes overwhelming and Kimelman does not deny the 18 sufficiency of the showing in support of his conspiracy 19 conviction. 20 members of his inner circle or tight circle. 21 juror could find that this circle came together well before 22 those statements were made and prior to the beginning of the 23 3Com trades. Goffer later described Kimelman and Emanuel as A rational The government produced evidence from July 25 1 2007 showing that the trio bought and profited from shares 2 of Hilton Hotels shortly after Goffer received an insider 3 tip. 4 the inner circle, bought shares of 3Com on August 7. 5 Kimelman s habit of feigning indifference to the source of 6 Goffer s information in the presence of co-conspirators not 7 within the inner circle also continued in the subsequent 8 months. 9 Goffer and Emanuel, along with co-conspirators outside Viewed in its totality, the Government s proof provides 10 enough evidence for a reasonable jury to conclude that 11 Kimelman was guilty beyond a reasonable doubt of insider 12 trading in 3Com. 13 sufficient evidence and is not unreasonable; we affirm 14 Kimelman s conviction. 15 III. The Conscious Avoidance Jury Instructions Were Proper 16 17 The jury s verdict is supported by Over Kimelman s objections,10 the district court instructed the jury on the theory of conscious avoidance, 10 The Government urges plain error review, maintaining that Kimelman did not specifically object to the conscious avoidance instruction as to each charge or request that the district court limit the instructions to the conspiracy charge. However, Defendants went to lengths to ensure that their objections to all conscious avoidance instructions were preserved, and the district court acknowledged that [e]verybody s preserving their objections [to the conscious avoidance instructions]. We therefore engage in de novo review. United States v. Kozeny, 667 F.3d 122, 130 (2d Cir. 2011). 26 1 which permits a jury to convict a defendant for 2 deliberately clos[ing] his eyes to what would otherwise 3 have been obvious to him. 4 F.3d 85, 94 (2d Cir. 2011). 5 and the substance of jury instructions on conscious 6 avoidance as to the illicit origins of Goffer s tips. 7 Finding no flaw in either, we affirm. United States v. Gansman, 657 Kimelman appeals the issuance 8 A. There Was a Factual Predicate for the Instruction 9 A conscious avoidance instruction may only be given 10 if (1) the defendant asserts the lack of some specific 11 aspect of knowledge required for conviction [] and (2) the 12 appropriate factual predicate for the charge exists, i.e. 13 the evidence is such that a rational juror may reach the 14 conclusion beyond a reasonable doubt that the defendant was 15 aware of a high probability of the fact in dispute and 16 consciously avoided confirming that fact. 17 v. Svoboda, 347 F.3d 471, 480 (2d Cir. 2003) (quoting United 18 States v. Ferrarini, 219 F.3d 145, 154 (2d Cir. 2000)) 19 (internal alterations and some quotation marks omitted). 20 this case, the first prong is met; Kimelman claimed 21 ignorance at trial as to the source of the 3Com tip. 22 However, Kimelman contends that there was insufficient 23 evidence (1) for a juror to conclude that he was aware of a 27 United States In 1 high probability that the 3Com tip came from an insider and 2 chose to avoid confirming that fact, and (2) for a juror to 3 conclude that he ever knew about the illicit nature of 4 Goffer s information. 5 We disagree. For substantially the same reasons discussed above, 6 there was ample evidence supporting the inference that if 7 Kimelman did not know about those facts, that he had to have 8 consciously avoided becoming aware of them. 9 the 25-minute telephone conversation he had with Goffer on First, given 10 the evening of August 7, the abrupt and pronounced change in 11 his trading pattern of 3Com stock immediately thereafter, 12 his subsequent outreach to Goffer about 3Com trading on 13 August 15, and the fact that Goffer had shared the tip with 14 other co-conspirators whom Kimelman knew, a rational juror 15 was entitled to conclude that Kimelman was aware of a high 16 probability that Goffer had insider information about 3Com. 17 Second, the fact that Goffer asked about signature pages on 18 the eve of the 3Com deal announcement and the routine manner 19 in which Kimelman answered the question, again provides the 20 basis for a juror to conclude that he was aware of a high 21 probability that the source of Goffer's information was 22 illegal. 28 1 With respect to Kimelman s conscious avoidance of 2 knowledge of Goffer s sources throughout the conspiracy, 3 Kimelman s challenge lacks any merit. 4 were recruiting Slaine for Incremental, Goffer told Slaine 5 that he was better off not knowing where [his tips] were 6 coming from. 7 if someone from the government ever ask[ed] you where did 8 [that tip] come from. 9 know where it came from. Gov t Ex. 222. While he and Kimelman That way, Goffer continued, You [would] be like, I don t freakin Building on Goffer s (facetious) 10 assertion that his source was a construction worker, 11 Kimelman added that it was a [g]uy fixing that pothole down 12 there. 13 for plausible deniability underscore Kimelman s conscious 14 avoidance of knowledge as to Goffer s source. 15 entitled to hear the conscious avoidance instruction. 16 His additions to this conversation about the need The jury was Kimelman s argument that the Government s evidence 17 sought to prove actual knowledge rather than conscious 18 avoidance is both unsupported and irrelevant. 19 about the legitimacy of a transaction can be used to show 20 both actual knowledge and conscious avoidance. 21 States v. Ferguson, 676 F.3d 260, 278 (2d Cir. 2011) (citing 22 United States v. Nektalov, 461 F.3d 309, 316-17 (2d Cir. 23 2006)). 29 Red flags United 1 B. The Content of the Instructions Was Proper 2 Kimelman alleges that the district court erred in 3 declining to amend its jury instructions to accord with the 4 Supreme Court s ruling in Global-Tech Appliances, Inc. v. 5 SEB S.A., -- U.S. --, 131 S. Ct. 2060 (2011). 6 Kimelman contends that the Global-Tech decision required 7 that jury charges indicate that the mental state of 8 recklessness is insufficient for a finding of conscious 9 avoidance. Specifically, Because Global-Tech did not alter the conscious 10 avoidance standard, we hold that the district court s 11 refusal to amend the jury instructions to accord with 12 Global-Tech was not error. 13 In Global-Tech, the Supreme Court synthesized conscious 14 avoidance holdings from eleven circuit courts in order to 15 import the doctrine from criminal law to patent law. 16 Ct. at 2070 n.9 and 2068-72. 17 clarify the doctrine, but instead identified the common 18 ground among the Courts of Appeals: 19 20 21 22 23 24 25 26 27 28 131 S. The Court did not alter or [A]ll [Courts of Appeals] appear to agree on two basic requirements: (1) the defendant must subjectively believe that there is a high probability that a fact exists and (2) the defendant must take deliberate actions to avoid learning of that fact. We think these requirements give willful blindness an appropriately limited scope that surpasses recklessness and negligence. Id. at 2070 (emphasis added). 30 1 Kimelman urges us to believe that this language, built 2 upon, inter alia, Second Circuit precedent in Svoboda, 347 3 F.3d at 477-78, was designed to alter the substantive law. 4 Global-Tech simply describes existing case law. 5 holding, we follow other decisions in this Circuit since 6 Global-Tech that have applied the traditional conscious 7 avoidance doctrine. 8 F.3d 46, 90 (2d Cir. 2012); Ferguson, 676 F.3d at 278-79. 9 In so See, e.g., United States v. Coplan, 703 The district court s instructions in this case properly 10 imposed the two requirements discussed by the Global-Tech 11 decision.11 11 Kimelman requested that the district court The district court instructed that: [A] defendant s knowledge may be established by proof that the defendant you are considering deliberately closed his eyes to what otherwise would have been obvious to him. If you find beyond a reasonable doubt that the defendant s ignorance was solely and entirely the result of a conscious purpose to avoid learning the truth, then this element may be satisfied. However, guilty knowledge may not be established by demonstrating that the defendant was merely negligent, foolish or mistaken. If, for example, you find beyond a reasonable doubt that the defendant you are considering was aware that there was a high probability that he obtained information that had been disclosed in violation of a duty of trust and confidential [sic] but deliberately and consciously avoided confirming this fact, then you may find that the defendant acted knowingly. However, if you find that the defendant actually believed that the information he obtained was not disclosed in violation of a duty of trust and confidence, he may not be convicted. It is entirely up to you whether you find that the defendant you are considering deliberately closed his eyes and any inferences to be drawn from the evidence on this issue. Tr. 2019-20 (emphasis added). 31 1 insert the word reckless into a list of mental states that 2 were insufficient. 3 instructions (such as those in this case) that require a 4 defendant to take deliberate actions to avoid confirming a 5 high probability of wrongdoing are inherently inconsistent 6 with a reckless defendant . . . who merely knows of a 7 substantial and unjustified risk of such wrongdoing. 8 S. Ct. at 2070-71. 9 consistent with Global-Tech; we therefore affirm Kimelman s However, Global-Tech makes clear that 131 The district court s instructions were 10 conviction. 11 12 13 14 IV. Evidence of Kimelman s Rejection of a Plea Bargain Was Properly Excluded 15 excluding his rejection of a plea bargain. 16 court s . . . assessment that the probative value of 17 relevant evidence is [] substantially outweighed by the 18 danger of unfair prejudice [is] reviewed only for an abuse 19 of discretion. 20 (2d Cir. 2000) (internal quotation marks omitted). 21 argues by analogy to United States v. Biaggi, 909 F.2d 662, 22 690-93 (2d Cir. 1990), in which we held that the defendant s 23 decision to forgo immunity out of an insistence that he was 24 innocent was probative of his consciousness of innocence. 25 Id. at 690. Kimelman contends that the district court erred in The trial United States v. Khalil, 214 F.3d 111, 122 32 Kimelman 1 The defendant in Biaggi was offered complete immunity. 2 Id. 3 plead guilty to reduced charges, we held that a defendant s 4 decision to reject an offer of immunity was probative. 5 at 690-91. 6 entitled to have admitted a rejected plea bargain. 7 691. 8 9 Relying on the difference between this and an offer to Id. We did not decide whether a defendant is Id. at This case differs from Biaggi because the excluded evidence here lacked any probative value. Kimelman has 10 detailed the devastating collateral consequences flowing 11 from the entry of a criminal conviction against him.12 12 Although the parties disagree as to the terms of the 13 rejected plea offer, both parties concede that it would have 14 entailed a conviction. 12 This was not a case where the Kimelman wrote that: The effects of [his] arrest, trial and conviction have been devastating to him, personally, emotionally, professionally and financially. [He] will never again work in the securities industry, and will be stripped of his trading licenses. He will no longer hold his credential as a Chartered Financial Analyst. In addition, [he] will no longer be entitled to the privilege of practicing law. Upon the conclusion of his sentence, [he] will be left with the daunting task of finding a career without the ability to return to any of the professions he has known for the past fourteen years. His finances are in shambles . . . with several hundred thousand dollars of debt outstanding. And he has suffered the personal embarrassment and shame that accompanies a high profile arrest, trial and conviction. Kimelman Sentencing Memorandum at 14. 33 1 defendant was permitted to walk away scot free and declined 2 to do so out of a strong belief of his innocence. 3 this offer was, in this case, an indication that the 4 defendant prefer[red] to take his chances on an acquittal by 5 the jury, rather than accept the certainty of punishment 6 after a guilty plea. 7 Rejecting Id. The district court briefly discussed the prejudicial 8 effects of admitting this evidence, including the likelihood 9 of jury confusion. Admission would require the collateral 10 consequences of a conviction to be discussed at length, 11 requiring an already complex trial to gain additional and 12 unnecessary dimensions. 13 within its latitude in excluding Kimelman s rejection of a 14 plea agreement under Federal Rule of Evidence 403. 15 Holmes v. South Carolina, 547 U.S. 319, 324-25 (2006). 16 V. 17 We find that the trial court was See Defendants Sentences Were Reasonable Goffer and Drimal challenge the substantive and 18 procedural reasonableness of their sentences. 19 appellate courts in sentencing is important but limited. 20 We review the work of district courts under a deferential 21 abuse-of-discretion standard. 22 550 F.3d 180, 189 (2d Cir. 2008) (en banc) (quoting Gall v. 23 United States, 552 U.S. 38, 41 (2007)). 34 The role of United States v. Cavera, 1 A. Defendants Sentences Were Procedurally Reasonable 2 Defendants contend that the district court committed 3 procedural error in sentencing them. 4 sentencing for procedural errors, we first look for error 5 in the district court s calculation of the [United States 6 Sentencing] Guidelines range. 7 argues that the district court erred in its loss 8 calculations and Goffer contends that the district court 9 failed to consider disparities between co-defendants. 10 11 1. In reviewing Id. at 194. Here, Drimal The Loss Calculation Was Proper In calculating the loss attributable to Drimal s 12 trading, the district court took account of the Probation 13 Office s Presentence Investigation Report as well as 14 submissions from the parties. 15 the Government s assertion that Drimal realized gains of 16 between $7 and $20 million, resulting in a Guidelines 17 enhancement of 20 points. 18 2B1.1(b)(1)(K). 19 $2.5 and $7 million, for an enhancement of 18 points. 20 U.S.S.G. § 2B1.1(b)(1)(J). 21 calculation of the loss amount. The district court accepted See U.S.S.G. §§ 2B1.4(b)(1), Drimal asserted that his gains were between Drimal alleges two errors in the 22 35 1 First, Drimal contends that the district court 2 committed procedural error by failing to deduct losses 3 resulting from trades that emanated from the same insider 4 sources as provided the tips that gave him $11 million in 5 profits. 6 Clear Channel trades Drimal made based on the attorneys 7 misunderstanding of inside information. 8 precedent indicating that additional illegal trades made on 9 material nonpublic information that result in losses should We interpret this argument as relating to the We find no 10 mitigate the sentences of insider traders. 11 2B1.1 n.3. 12 Defendant A engaged in one more insider trade than Defendant 13 B, there is no case in which Defendant A deserves a lesser 14 punishment than Defendant B. 15 criminal activity backfired does not affect that calculus. 16 The district court did not err in excluding these losses 17 from its calculation. 18 Cf. U.S.S.G. § If two defendants are identical save that That Defendant A s additional Drimal also contends the district court erred in 19 considering the Hilton trades for the calculation of the 20 loss amount. 21 that he did not know that the Hilton trades were based on 22 inside information until two months later (when he was This contention relies on Drimal s assertion 36 1 recorded making statements that clearly demonstrate his 2 awareness that his profits from the Hilton trade were 3 illegally-obtained profits of insider trading). 4 the district court s fact-finding at sentencing, we find no 5 error in the court s extensive and well-reasoned analysis. 6 7 8 9 2. Reviewing The District Court Considered Disparities Between Defendants Goffer asserts that the district court did not account 10 for sentencing disparities between similarly-situated 11 defendants. 12 substantive challenge. 13 that the district court did not consider the sentences of 14 similarly-situated defendants, his claim lacks merit.13 15 district court weighed the need to avoid unwarranted 16 sentencing disparity between Mr. Goffer and similarly 17 situated defendants. 18 between Goffer and his co-defendants and also described 19 Goffer s role as a leader[] of a fraudulent enterprise who 20 recruited people and poisoned other traders. Sentencing 21 Tr. 228. This argument contains both a procedural and To the extent that Goffer asserts The The district court distinguished The district court demonstrated that it weighed 13 To the extent that it is an assertion that Goffer, as a white collar defendant, should benefit from the leniency of other courts towards other white collar defendants, we address this argument as part of the substantive reasonableness inquiry. 37 1 the need for similar sentences among similarly-situated 2 defendants; however, the court rejected Goffer s contentions 3 as to who was situated similarly. 4 B. Defendants Sentences Were Substantively Reasonable 5 Goffer and Drimal challenge their sentences as 6 substantively unreasonable, contending that their (120-month 7 and 66-month, respectively) sentences are disproportionate 8 to sentences meted out to other white collar criminals.14 9 Believing that the district court s well-reasoned analysis 10 11 was appropriate, we affirm. In reviewing a sentence for substantive reasonableness, 12 we do not substitute our own judgment for the district 13 court s on the question of what is sufficient to meet the 14 [18 U.S.C.] § 3553(a) considerations in any particular 15 case. 16 Fernandez, 443 F.3d 19, 27 (2d Cir. 2006)). 17 instead set aside a district court s substantive 18 determination only in exceptional cases where the trial 19 court s decision cannot be located within the range of Cavera, 550 F.3d at 189 (citing United States v. 14 We will Although defendants challenges to their sentences also sound of Eighth Amendment jurisprudence, so construed they are devoid of merit. See United States v. DiTommaso, 817 F.2d 201, 217 (2d Cir. 1987). We therefore assume the challenges focus on the substantive reasonableness of the sentences. 38 1 permissible decisions. Id. (quoting United States v. 2 Rigas, 490 F.3d 208, 238 (2d Cir. 2007)). 3 [A] district court may vary from the Guidelines range 4 based solely on a policy disagreement with the Guidelines, 5 even where that disagreement applies to a wide class of 6 offenders or offenses. 7 United States, 552 U.S. 85, 107-08 (2007)). 8 this case assert that several district court judges have 9 chosen to exercise this ability to issue below-Guidelines Id. at 191 (citing Kimbrough v. Defendants in 10 sentences to white collar criminals. 11 raise broad questions as to how harsh federal courts are, 12 and how harsh they should be, in sentencing white collar 13 defendants. 14 Goffer and Drimal We need not answer either question. Assuming arguendo that some judges have chosen as a 15 policy matter not to sentence white collar criminals to the 16 harshest permissible punishments, this does not entitle 17 other white collar criminals to lighter punishments than are 18 reasonable under the Guidelines, 18 U.S.C. § 3553(a), and 19 the totality of the circumstances of their individual case. 20 See, e.g., United States v. Rigas, 583 F.3d 108, 121-24 (2d 21 Cir. 2009); United States v. Bonilla, 618 F.3d 102, 110 (2d 22 Cir. 2010). 39 1 2 1. Goffer s Sentence Was Substantively Reasonable Goffer faced a maximum of 20 years imprisonment for 3 each of 12 counts of securities fraud. Goffer had an 4 offense level of 32 and a criminal history category of I, 5 yielding a Guidelines range of 121 to 151 months 6 imprisonment. 7 sentenced to 121 months imprisonment. The Probation Office recommended that he be 8 In reaching its determination, the district court 9 considered Goffer s entire life from the circumstances of 10 his birth, his upbringing, educational background and 11 opportunities, work history, family relationships . . . 12 [and] the facts and circumstances of these crimes. 13 Sentencing Tr. 12. 14 avoid unwarranted sentencing disparity between Mr. Goffer 15 and similarly situated defendants. The court also considered [t]he need to Id. at 13. 16 The totality of the circumstances in this case included 17 reasons to believe that Goffer had played a positive role in 18 the lives of his family and friends, but also that Goffer 19 orchestrated and ran a large-scale cash-for-tips scheme to 20 fuel an insider trading conspiracy. 21 disguise his wrongdoings by distributing disposable cell 22 phones, using fake research to cover his illegal trades, and 23 refusing to speak about sensitive topics on the telephone. 40 Goffer took steps to 1 Goffer s corrosive influence on the integrity of the 2 financial markets and on the expectation of trust and 3 confidence between attorney and client required a 4 significant punishment. 5 Guidelines sentence of 120 months imprisonment was 6 unreasonable or disproportionate to the severity of his 7 crimes. 8 9 2. We do not find that his below- Drimal s Sentence Was Substantively Reasonable Drimal contends that his sentence of 66 months 10 imprisonment was substantively unreasonable in light of his 11 community service and his commitment to his family. 12 faced a maximum of 20 years imprisonment on five counts of 13 securities fraud. 14 History Category of I led to a Guidelines range of 57 to 71 15 months imprisonment. 16 57-month sentence. 17 Drimal His offense level of 25 and Criminal The Probation Office recommended a Drimal, who traded more heavily based on insider 18 information than any other defendant in the conspiracy, 19 asserts that his community service and commitment to his 20 family should mitigate his wrongdoing. 21 took note of his positive activities in sentencing Drimal. 22 The district court also noted that Drimal, who earned 23 approximately $11,497,888 from trading on insider 41 The district court 1 information, did not have the same compelling social 2 disadvantages that frequently lead to and help explain 3 criminal behavior.15 4 In light of the magnitude of his insider trading, which 5 had major deleterious effects on the market, Drimal was no 6 small-time criminal. 7 of respect for the law and his deliberate decision, weighing 8 the risks, that insider trading was a game worth playing. 9 Sentencing Tr. 48. The district court noted Drimal s lack The district court s assertion that 10 insider trading requires high sentences to alter that 11 calculus is a Congressionally-approved example of giving 12 meaning to the 18 U.S.C. § 3553(a) factors. 13 court s well-reasoned sentencing took account of the 14 totality of circumstances, including Drimal s motivations, 15 his positive role in his family and the community, his 16 knowledge that what he was doing was wrong, and the severity 17 of his crimes. The district We affirm. 18 19 15 Contrary to Drimal s assertions on appeal, the district court did not reveal a vendetta against the rich when it noted that Drimal did not have compelling reasons to warp the financial markets. Instead, Judge Sullivan recognized the same moral principles that make Jean Valjean more sympathetic than Gordon Gekko. 42 1 2 Conclusion For the foregoing reasons, the judgments of conviction 3 and the sentencing orders of the district court are AFFIRMED. 4 Defendants additional arguments are addressed in the 5 corresponding summary order. See Goffer, 2013 WL --. 43
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
