Securities fraud and money laundering

Federal District Court Opinions

U.S. v. BROWN, (E.D.N.Y. 2006) UNITED STATES OF AMERICA, v.
WILLIAM BROWN and VLAD GOLDENBERG, Defendants. No.
04-CR-159 (NGG). United States District Court, E.D. New
York. April 4, 2006

MEMORANDUM & ORDER

NICHOLAS GARAUFIS, District Judge

Defendants William Brown (“Brown”) and Vlad Goldenberg
(“Goldenberg”) were convicted on October 14, 2005, following
a three-week jury trial before this court, of five
substantive counts of securities fraud and of conspiracy to
commit securities fraud. In addition, Brown was found
guilty of conspiracy to commit money laundering and of nine
substantive counts of money laundering. On October 17,
2005, the jury rendered a verdict in the concomitant
forfeiture proceeding, requiring Brown and Goldenberg to
forfeit $1,231,438.20 generated as proceeds of the
securities fraud scheme. The jury also rendered a
forfeiture verdict against Brown in connection with the
money laundering convictions requiring him to forfeit
$1.231 million and the real property located at 100 St.
Mary’s Avenue, Staten Island, New York. (“100 St. Mary’s
property”)[fn1] in connection with the money laundering
conspiracy conviction and $152,500.00 in connection with
the substantive money laundering counts. Page 2

Both defendants now seek post-trial relief. Defendant Brown
has brought a motion pursuant to Rule 33 of the Federal
Rules of Criminal Procedure (“Rule 33”) seeking a new trial
on various grounds. Brown also challenges the forfeiture
judgment entered against him pursuant to Fed.R.Crim.P.
32.2(a) (“Rule 32.2(a)”). (See generally Motion of William
Brown dated November 28, 2005 (“Brown Mot.”)). Defendant
Goldenberg also moves the court, pursuant to Rule 33, for
an order setting aside the guilty verdicts and for a new
trial. (See generally Motion of Vlad Goldenberg dated
November 23, 2005 (“Goldenberg Mot.”)).

For the reasons stated below, the Defendants’ motions are
DENIED.

I. The Trial

At trial, the Government presented evidence of a “boiler
room” securities fraud scheme, which operated from October
2000 through January 2003, out of the Staten Island branch
office of Delta Asset Management (“Delta”), a brokerage
firm. Brown was one of Delta’s managers and Goldenberg was
a stock broker employed there. Pursuant to the fraudulent
scheme, brokers at Delta convinced Delta customers to
purchase stock in certain “house stocks” at artificially
inflated prices. The stock promoters who sold the house
stocks, in turn, paid Brown, Goldenberg and other Delta
employees kickbacks, which constituted as much 50% of the
stock price paid by the brokerage customers —
unbeknownst to them — totaling millions of dollars.

The Government’s evidence was presented through three
general categories of witnesses. One group of witnesses
consisted of law enforcement and other regulatory
officials, and included the following: (1) testimony of an
agent of the Federal Bureau of Investigation (“FBI”) who
investigated the activity at Delta; (2) testimony of two
staff members of the Securities and Exchange Commission
(“SEC”), which was involved in investigating securities
violations Page 3 committed by Delta in a related civil
matter; and (3) testimony of an attorney of the National
Association of Securities Dealers (“NASD”).

The second category of testimony was the cooperating
witnesses. These witnesses were former co-defendants of
Brown and Goldenberg who pleaded guilty to various charges
and agreed to cooperate with the Government in the trial
against Brown and Goldenberg. The cooperating witnesses who
testified at trial included: (1) Nick Pirgousis, the stock
promoter who brought the majority of the house stock deals
to Delta; (2) Mario Rodriguez (a.k.a. Mario Casias), who
worked as a licensed stock broker at Delta’s Staten Island
branch during the relevant time period; (3) Mark Shreyberg,
another employee at Delta’s Staten Island office who was an
unlicensed stock broker; and (4) Roman Pasinkovsky, who was
at one time a manager of Delta’s Staten Island branch
office. All of the cooperating witnesses implicated Brown
and Goldenberg in the fraudulent scheme and corroborated
the Government’s theory of the case.

Finally, the third group of witnesses who testified at
trial were certain victims of the stock fraud scheme. These
witnesses included Scott Frane, who received a call from
“Mario Casias” in 2001 and subsequently purchased
approximately $50,000 worth of the so-called house stocks
without being informed of the 50% commission that Casias
was receiving on the sale. Kelly McCrann, another
victimized investor, took the stand and testified
concerning the several hundreds of thousands of dollars he
invested through “Mario Casias” at Delta. Finally, Henry
Whitfield and Wilbur Krusell both testified regarding their
victimization concerning stock purchased through Delta,
stating that they would not have invested had they known of
the scheme in place at Delta.

The evidence adduced at trial established that Brown,
along with his business partner Page 4 Gary Todd, ran the
Staten Island branch of Delta Asset Management, and that
Brown and Goldenberg, along with others, participated in a
large scale stock fraud scheme perpetuated by Delta, its
managers and employees. As I presided over the trial, I see
no reason to painstakingly summarize the over 1600-page
trial transcript. Rather, I will address portions of the
evidence in the context of specific arguments raised by the
defendants in the instant post-trial motions. Suffice it to
say that I have no reservations concluding that based on
the evidence presented, the jury could have reasonably
concluded that both Brown and Goldenberg were guilty of the
crimes charged.

II. Discussion: Defendants’ Rule 33 motions

Rule 33 provides that, “upon the defendant’s motion the
court may vacate any judgment and grant a new trial if the
interest of justice so requires.” Fed.R.Crim.P. 33. “The
ultimate test on a Rule 33 motion is whether letting a
guilty verdict stand would be a manifest injustice.” United
States v. Ferguson, 246 F.3d 129, 134 (2d Cir. 1997). The
Second Circuit has stated that a district court should
exercise its authority to grant a Rule 33 motion only “in
the most extraordinary circumstances.” United States v.
Locascio, 6 F.3d 924, 949 (2d Cir. 1993). “It is only where
exceptional circumstances can be demonstrated that the
trial judge may intrude upon the jury function of
credibility assessment.” United States v. Sanchez, 969 F.2d
1409, 1414 (2d Cir. 1992). In the typical case, the trial
judge “must defer to the jury’s resolution of the weight of
the evidence and the credibility of the witnesses.” United
States v. LeRoy, 687 F.2d 610, 616 (2d Cir. 1982).
Moreover, even where the trial judge rejects some portion
or all of the testimony of a witness or witnesses, the
defendant is “not automatically entitle[d]” to a new trial.
Sanchez, 969 F.2d at 1414. Page 5

Both Defendants argue that they should be afforded a new
trial pursuant to Rule 33 on the grounds that there was
insufficient evidence adduced at trial to support their
convictions. As a general matter, I conclude that there was
sufficient evidence presented at trial to support the
guilty verdicts rendered against both defendants, and their
Rule 33 motions are accordingly denied. I will nonetheless
briefly address the Defendants’ specific arguments in turn
below.

1. The Supreme Court case of Dura Pharmaceuticals does not
hold that the Government must prove causation in a criminal
securities fraud case

Brown and Goldenberg each argue that the Government failed
to meet its burden of proving guilt beyond a reasonable
doubt inasmuch as it was not proven at trial that the
fraudulent conduct of the Defendants proximately caused
investors to lose money. Defendant Brown argues that there
was “never any evidence establishing a nexus between the
fraudulent acts and the loss to the `victims.'” (Brown Mot.
¶ 18). Defendant Goldenberg urges that there was “no
credible proof of any fraudulent representation by
Goldenberg of a present or past fact which, as a direct
consequence, proximately caused investor loss.” (Goldenberg
Mot. at 16).

Both Defendants’ base their positions on the recent
Supreme Court case of Dura Pharmaceuticals v. Broudo, 544
U.S. 336, 125 S.Ct. 1627 (2005). In Dura, the Court held
that a “private plaintiff who claims securities fraud must
prove that the defendant’s fraud caused an economic loss.”
Dura, 125 S.Ct. at 1629. Brown and Goldenberg assert that
Dura applies in the criminal context and accordingly
requires that the Government also prove a causal connection
between the fraudulent conduct and the victims’ economic
loss. Notwithstanding the Defendants’s arguments to the
contrary, Dura was not held to apply in the criminal
context and the Defendants reliance on the case is
misplaced. Dura explicitly addressed the loss causation
Page 6 requirement in a civil suit brought by a private
plaintiff pursuant to the Private Securities Litigation
Reform Act of 1995. See id. at 1631; 15 U.S.C. §
78u-4(b)(4). Its holding does not extend to the criminal
context, and Dura therefore does not provide a basis for
finding that there was insufficient evidence to support the
Defendants’ securities fraud convictions.

2. Brown’s motion to vacate the money laundering
convictions due to insufficient evidence is without merit

Defendant Brown asserts that there was insufficient
testimony and physical evidence presented at trial to prove
that he was guilty of conspiracy to commit money laundering
and money laundering. This court disagrees. At trial, the
testimony of numerous witnesses and supporting documentary
evidence established that Brown and Gary Todd created B&G
Consulting, which the Government proved was used by both
Brown and Todd to launder money and funnel kickback
payments. There was also evidence presented that showed
that Brown was involved in money laundering through certain
jewelry stores and that Brown personally participated in
providing cash payments to Delta employees.

Brown’s convictions for money laundering and for conspiring
to launder money are supported by sufficient evidence and
will not be vacated.

3. Defendants’ motions to vacate the securities fraud
convictions based on insufficient evidence are without merit

Brown and Goldenberg have both moved for vacatur of the
substantive securities fraud convictions and the conspiracy
to commit securities fraud conviction rendered against them
based on insufficient evidence grounds. (See Goldenberg
Mot. at 18; Brown Mot. ¶¶ 13-18). As I have
noted above, I find that there is no basis to grant
Defendants’ Rule 33 motions on the grounds of insufficient
evidence. As I find there was ample evidence to support
these Page 7 convictions, there certainly will be no
“manifest injustice” in allowing the convictions to stand.
See Ferguson, 246 F.3d at 134 (2d Cir. 1997). Rather, I
defer to “the jury’s resolution of the weight of the
evidence and the credibility of the witnesses,” LeRoy, 687
F.2d at 616, and accordingly deny both Brown’s and
Goldenberg’s motion on these grounds.

4. Brown’s motion to vacate the forfeiture judgments is
without merit

Once the guilt phase of the trial concluded and the jury
found the Defendants guilty on all counts, the jury
considered the Government’s forfeiture charge, which sought
forfeiture of assets in excess of $2.6 million as well as
the 100 St. Mary’s Avenue property. The jury returned a
verdict in the forfeiture matter in the amount of $1.231
million, both for the securities fraud counts and the money
laundering counts, and for forfeiture of the St. Mary’s
Avenue Property. With respect to the securities fraud
forfeiture, Brown and Goldenberg were held jointly and
severally liable; Brown is individually liable for the
money laundering forfeiture in the same amount because he
alone was convicted of the money laundering crimes. The two
judgments, however, in effect are concurrent judgments.
Brown objects to this verdict on several counts.

First, Brown argues that the forfeiture judgment is
“inconsistent with the evidence presented” in that the jury
did not agree with the Government’s proposed forfeiture
amount, but rather came up with a number of its own which
Brown maintains “could not be calculated by the defendant,
counsel, or even the prosecution.” (Brown Mot. ¶
20). That the parties, their counsel, or even this court
cannot discern the exact basis for the jury’s calculation
of the forfeiture amount does not render the verdict
invalid. See United States v. Powell, 469 U.S. 57, 67
(1984) (“But with few exceptions, once the jury has heard
the evidence and the case has been submitted, the litigants
must accept the jury’s collective judgment. Courts have
always resisted inquiring into a Page 8 jury’s thought
processes; through this deference the jury brings to the
criminal process, in addition to the collective judgment of
the community, an element of needed finality.”) (internal
citations omitted).

Brown further claims that the forfeiture judgments are
inconsistent and therefore must be vacated because “the
`securities judgment’ is `joint and several’ between both
this defendant and the co-defendant, Vlad Goldenberg, but
the money laundering conspiracy judgment is against this
defendant alone.” (Brown Mot. ¶ 21). Brown argues
that because the Defendants were found liable together for
the securities fraud forfeiture, but Brown was found liable
individually for the money-laundering forfeiture, both
forfeiture verdicts must be dismissed. The argument is
without merit. The “inconsistency” that Brown points out is
simply reflective of the fact that Brown and Goldenberg
were both found guilty of the securities fraud crimes, but
only Brown was charged and convicted of the money
laundering counts. The forfeiture judgments are not
inconsistent and will not be vacated on these grounds.

Brown also moves to set aside the forfeiture of the 100
St. Mary’s Avenue property arguing (1) that he was never
the owner of this property and thus has no right to forfeit
it; and (2) that he was not provided adequate notice of the
Government’s intention to seek forfeiture of this asset
pursuant to Fed.R.Crim.P. 32.2(a). (See Brown Mot.
¶¶ 37-40).

With respect to Brown’s ownership of the 100 St. Mary’s
Avenue property, he claims that 100 St. Mary’s Avenue
Corporation is the owner of the property and that prior to
the indictments in the instant matter, ownership of the
corporation was transferred to Brown’s wife, who assumed
all of the property’s liabilities including the mortgage.
(Id. ¶ 38). Brown argues that these facts render the
forfeiture of the property improper. The Government
responds that Page 9 Brown’s argument misinterprets the
law and procedure governing forfeiture judgments. (See
Memorandum of Law in Opposition to Defendants’ Post-Trial
Motions (“Govt. Mem. Opp’n”), at 44-45).

The Government is correct. The verdict in the forfeiture
proceeding required Brown to forfeit only his interest in
the 100 St. Mary’s Avenue property. To the extent that his
wife has a legitimate interest in the property, she is
entitled to bring that to the court’s attention in a
separate proceeding pursuant to 21 U.S.C. § 853. But
“no party claiming an interest in property subject to
forfeiture . . . may intervene in a trial or appeal of a
criminal case involving the forfeiture of such property.”
21 U.S.C. § 853(k). The proper course of action for
a third party to raise his/her interest in a forfeited
asset is to “petition the court for a hearing to adjudicate
the validity of his alleged interest in the property”
pursuant to 21 U.S.C. § 853(n) and Fed.R.Crim.P.
32.2(c). See, e.g., Borich v. United States, No. CR.
03-166, 2005 WL 1668411, at *2 (D. Minn. July 18, 2005);
United States v. Weidner, No. 02-CR-40140, 2004 WL 432251,
at *1 (D. Kan. Mar. 4, 2004).

Moreover, it is well established that there can be
criminal forfeiture of property that is held in a third
party’s name if the Government believes that the third
party is just a nominee. See, 32 Am. J. Crim. L. 55, Stefan
D. Cassella, Criminal Forfeiture Procedure: An Analysis of
Developments in the Law Regarding the Inclusion of a
Forfeiture Judgment in the Sentence Imposed in a Criminal
Case, at *84 (Fall 2004). Thus, there is no reason to
vacate the forfeiture order regarding the 100 St. Mary’s
Avenue property due to Brown’s alleged lack of ownership
over the property.

Brown also urges dismissal of the portion of the
forfeiture verdict concerning the 100 St. Page 10 Mary’s
Avenue property on the grounds that he was never provided
adequate notice of the Government’s intent to seek the
forfeiture. (See Brown Mot. ¶ 40). Rule 32.2(a)
provides that “[a] court must not enter a judgment of
forfeiture in a criminal proceeding unless the indictment
or information contains notice to the defendant that the
government will seek the forfeiture of property as part of
any sentence in accordance with the applicable statute.”
Fed.R.Crim.P. 32.2(a). The Advisory Committee’s Notes to
this provision explain further: “As courts have held,
subdivision (a) is not intended to require that an itemized
list of the property to be forfeited appear in the
indictment or information itself.” Fed.R.Crim.P. 32.2(a)
advisory committee’s note (2000). Rather, the government is
required to “give the defendant notice that it will be
seeking forfeiture in accordance with the applicable
statute.” Id. The superseding indictment in this matter,
filed with the court on January 25, 2005, explicitly
included criminal forfeiture allegations which track the
applicable statutes. (See Superseding Indictment
¶¶ 31, 34). This alone is adequate Rule
32.2(a) notice, see United States v. Grammatikos, 633 F.2d
1013, 1023-24 (2d. Cir. 1980), and Brown’s motion to dismiss
the forfeiture verdict regarding 100 St. Mary’s Avenue on
the grounds of insufficient notice is denied.

5. No Credible evidence has been offered to show that
cooperating witness Mark Shreyberg perjured himself at trial

Brown next argues that it is necessary to vacate his
guilty verdicts and grant a new trial because there is
“newly discovered evidence” that a cooperating witness who
testified at trial for the Government, Mark Shreyberg,
perjured himself on the stand. (Brown Mot. ¶¶ 22-23).
Mark Shreyberg is the son-in-law of Gary Todd, a former
co-defendant of Brown’s, Brown’s former business partner in
B&G Consulting, and former co-manager of Delta’s Staten
Island office. At Page 11 trial, Shreyberg was asked if
one of the reasons he had decided to cooperate with the
government was so that his father-in-law Gary Todd might
receive some leniency in his sentencing. (See Trial
Transcript (“Tr.”) at 464). Specifically, on
cross-examination, Shreyberg was asked: “Was part of your
plea agreement and your cooperation to also give [your
father-in-law] a break in his sentencing,” to which
Shreyberg answered, “no.” (Id.).

Brown’s so-called “newly discovered evidence” of
Shreyberg’s perjury is allegedly found in a letter
submitted by Shreyberg’s attorney to the court in
connection with Gary Todd’s sentencing, and in the
Sentencing Memorandum of Gary Todd submitted by Todd’s
attorney in advance of his sentencing. (See Docket Entries
# 290, 291). In both of these documents, the respective
attorneys indicate that Todd was instrumental in
encouraging his son-in-law Shreyberg to cooperate with the
Government in the instant matter. While this may be true,
it in no way proves that Shreyberg perjured himself on the
stand. That Todd may have encouraged Shreyberg to become a
cooperator does not suggest that it was part of Shreyberg’s
plea agreement to decrease Todd’s sentence. Indeed,
Shreyberg’s Cooperation Agreement, attached to the
Government’s Opposition Brief, states no such thing. Rather,
it explicitly states that “no promises, agreements or
conditions have been entered into other than those set
forth in this agreement.” (Govt. Mem. Opp’n, Ex. A, at
¶ 12). As there is no new evidence suggesting that
Shreyberg committed perjury, this will not serve as grounds
to vacate Brown’s convictions. The Defendant’s motion is
denied.

6. Goldenberg’s motion for a new trial based on the jury
instructions concerning Goldenberg’s efforts to obstruct
justice is without merit

Goldenberg moves for a new trial on the grounds that the
court improperly instructed the Page 12 jury as to the
evidence concerning Goldenberg’s alleged involvement in
“coaching” Mario Rodriguez to lie before the SEC. (See
Goldenberg Mot. at 18). The full instruction given stated:

You have also heard testimony that the defendant Vlad
Goldenberg coached Mario Rodriguez, and that the defendant
William Brown coached Mario Rodriguez, Roman Pasinkovsky
and Nick Pirgousis, in substance, to lie in their
testimonies before the SEC and NASD.

The defendants are not on trial for attempting to
influence the statements of co-conspirators and you may
not consider the evidence as a substitute for proof of
guilt in this case.

However, if you find beyond a reasonable doubt that the
defendant you are considering did attempt to influence the
statements of a co-conspirator, you may — but are
not required to — infer that the defendant believed
that he was guilty of the crimes for which he is here
charged.

Whether or not evidence of the defendants’ attempted
influence of a co-conspirator[‘]s [statement] shows that
the defendant believed that he was guilty of the crime for
which he is now charged, and the significance, if any, to
be given such evidence, is for you, the jury, to decide.

(Tr. at 1584-85).

There is nothing improper about this “consciousness of
guilt” instruction. See United States v. Malpiedi, 62 F.3d
465, 467 (2d Cir. 1995) (“This testimony was direct
evidence of [defendant’s] obstruction of justice and of his
consciousness of guilt of the other charges.”); United
States v. Robinson, 635 F.2d 981, 986 (2d Cir. 1980)
(finding evidence of obstruction of justice properly
admissible as evidence of consciousness of guilt). It
comports with the evidence presented at trial and provides
no basis for granting Goldenberg’s Rule 33 motion.

7. There were no errors committed by this court before or
during trial that warrant vacating Defendants’ convictions
or granting a new trial

Brown raises several additional alleged errors by the
court that he believes provide a basis for a new trial
pursuant to Rule 33. These will each briefly be addressed
in turn.

(a) Discovery Page 13

Brown argues that “the discovery process was clearly
mishandled,” in that given the extremely large number of
documents disclosed in the discovery phase of this matter,
the Government did not timely turn over materials nor do so
in a sufficiently workable manner. (Brown Mot. ¶
26). Although all parties and this court concede that the
discovery in this trial was voluminous, there has been no
violation of the Defendants’ rights as a result of the
timing or manner in which discovery was turned over.
Approximately 16 months before trial, the majority of
documents were turned over to defendants for inspection
with an index of the documents provided. (Govt. Mem. Opp’n,
at 35). The remaining documents were also turned over in a
timely fashion, and the Government even electronically
scanned a portion of the discovery materials. Moreover, the
Government’s trial exhibit list and Rule 3500 material was
all turned over in accordance with prevailing precedent and
the time-lines set by this court. See 18 U.S.C. §
3500; Dolney, 2005 WL 1076269, at *6-8. The discovery
schedule and disclosure process does not provide grounds
for Brown’s sought post-trial relief.

(b) Goldenberg’s proffer statements

Brown argues that he was prejudiced by the court’s decision
not to sever his trial from Goldenberg’s, specifically
based on the fact that the court permitted the Government
to re-open its case after summation by Goldenberg’s
attorney. Brown argues that this “appearance of
irregularity lead [sic] to a quick verdict against Mr.
Goldenberg, and consequently this `taint’ certainly
affected the deliberations against Mr. Brown.” (Brown Mot.
¶ 27). Goldenberg similarly challenges the court’s
decision to allow the Government to reopen its case and to
admit proffer statements of Goldenberg’s. (Goldenberg Mot.
at 18-19).

Some background is necessary to understand the motion on
this point. Co-defendant Page 14 Goldenberg, prior to
trial, participated in several proffer sessions with the
Government. Although Rule 410 of the Federal Rules of
Evidence provides that, in general, statements made in the
course of plea discussions that do not ultimately lead to a
guilty plea are inadmissible at trial, see Fed.R.Evid. 410,
a defendant may waive the protections of Rule 410 by
entering into a voluntary agreement with the Government.
United States v. Velez, 354 F.3d 190, 195-97 (2d Cir.
2004). Goldenberg executed such a Proffer Agreement with
the Government, attached to the Government’s brief as
Exhibit C, which explicitly states that the Government may
use Goldenberg’s statements “as substantive evidence to
rebut, directly or indirectly, any evidence offered or
elicited, or factual assertions made, by or on behalf of
[Goldenberg] at any stage of a criminal prosecution.” (See
Govt. Mem. Opp’n, Ex. C). The validity of Goldenberg’s
waiver is not at issue; rather the Defendants allege that
the waiver was not triggered by the remarks of Goldenberg’s
attorney during summation.

Following summation, the Government moved to re-examine a
witness who had testified previously to introduce
Goldenberg’s proffer statements concerning the fact that he
had used Mario Rodriguez’s name when speaking to certain
clients to solicit their purchase of stocks. The Government
argued that the waiver had been triggered because
Goldenberg’s counsel, in his summation, stated to the jury
facts in contravention to Goldenberg’s proffer statements.
(See Tr. 1516-1519). The court granted the Government’s
motion and adheres to that ruling, i.e. I find that the
waiver was triggered, and as a result the Government was
correctly permitted to admit Goldenberg’s statements. See
United States v. Barrow, 400 F.3d 109, 116 (2d Cir. 2005).
The statements admitted were also properly redacted so as
to protect Brown’s rights and to comply with Bruton v.
United States, 391 U.S. 123 (1968). In an M&O dated
September 23, 2005 Page 15 (Docket Entry # 272), I ruled
that these statements were properly redacted in accordance
with Bruton, and I denied Brown’s motion to sever his trial
from Goldenberg’s. These rulings will not be disturbed on
the instant post-trial motions; the Defendants’ Rule 33
motions on this basis are denied.

(c) The Delta branch office agreement

Brown requests a new trial based on the court’s admission
into evidence of the “Delta Asset Management Branch Office
Agreement” (marked as GX 503), arguing that the admission
of this document as well as statements he made to the SEC
violated his Fifth and Sixth Amendment rights to counsel.
(Brown Mot. ¶ 28). Both of these issues were
addressed in advance of or during the trial, and my
decisions will stand. With respect to the SEC testimony, I
determined that admission of this testimony would not
violate Brown’s constitutional rights, and I adhere to that
ruling. (See Transcript of Status Conference dated Sept.
21, 2005). With respect to GX 503, the Delta branch office
agreement, I found and continue to hold that the Government
laid a proper foundation for authenticating the document
pursuant to Fed.R.Evid. 901, and for admitting it into
evidence. Any issues regarding whether or not Brown was
familiar with the entire document properly were addressed
on cross examination, as they go to the weight of the
evidence, and not its admissibility. United States v. Tin
Yat Chin, 371 F.3d 31, 38 (2d Cir. 2004) (“Rule 901’s
requirements are satisfied if sufficient proof has been
introduced so that a reasonable juror could find in favor
of authenticity or identification. Once Rule 901’s
requirements are satisfied, the evidence’s persuasive force
is left to the jury.”) (internal quotations and citations
omitted); see also SCS Communications, Inc. v. Herrick Co.,
Inc., 360 F.3d 329, 344-45 (2d Cir. 2004) (challenges to
the reliability of evidence go to its weight, not its Page
16 admissibility). As I find that admission of the Delta
branch agreement and of Brown’s SEC testimony was proper,
this admission provides no basis for a new trial or vacatur
of the defendant’s convictions.

(d) 404(b) “bad acts” evidence

Brown and Goldenberg also both ground their Rule 33 motions
on the admission at trial of certain “bad acts” evidence
pursuant to Fed.R.Evid. 404(b). (See Brown Mot.
¶¶ 29-31; Goldenberg Mot. at 17). At the
pre-trial, motion in limine stage I ruled that certain
evidence of prior uncharged criminal conduct would be
admissible as 404(b) evidence. See United States v. Dolney,
04-CR-159, 2005 WL 2129169, at *3 (E.D.N.Y. Sept. 1, 2005).
The Defendants challenge specifically evidence concerning
similar conduct which occurred at Russo Securities prior to
the charged conduct in the instant indictment that occurred
at Delta. The trial record does not support the argument
that evidence was admitted in violation of my 404(b)
ruling. Moreover, the record reflects that proper 404(b)
limiting instructions were given to the jury regarding the
purposes for which this evidence could be considered. (See
Tr. at 1582-84). The Defendants’ motions for a new trial on
these grounds are denied.

(e) Summation errors

Brown and Goldenberg raise two objections to the
Government’s summation comments. First, Brown argues that
“[d]uring summation, the government was permitted to argue,
over defense counsel’s objection, that the jury could find
that the stock purchases were illegitimate because the
`cooperating witnesses’ had plead [sic] guilty.” (Brown
Mot. ¶ 32). Goldenberg similarly argues that “the
Government was permitted to argue that the jury could find
stock purchases were illegitimate because of co-conspirator
pleas.” (Goldenberg Mot. at 16). The Page 17 specific
portion of the summation to which Defendants object is as
follows:

[GOVT:] Now, ladies and gentlemen, I submit to you that
there is no reasonable dispute in this case that there was
a conspiracy to commit securities fraud and actual
securities fraud involving the five chop stocks charged in
the indictment.

Mr. Zuntag [Brown’s attorney] tried to suggest to you in
his opening that these were actually legitimate stock
deals, but that is absurd. Do you think Nick Pirgousis,
Roman Pasinkovsky, Mark Shreyberg, and Mario Rodriguez
would have pleaded guilty to crimes with an aggregate
possible —

MR. LASHLEY:[fn2] Objection.

THE COURT: Overruled.

[GOVT:] — with an aggregate possible sentence ever
[sic] a hundred years imprisonment if these were really
good deals and there was no stock fraud? Of course not.

(Tr. at 1400).

In response to Defendants’ motions, the Government draws
the court’s attention to the rule in this circuit that
“when a jury has been informed that a co-defendant has
pleaded guilty to a crime, the trial judge should instruct
the jury that they may not consider that guilty plea as
evidence of the defendant’s guilt.” United States v.
Ramirez, 973 F.2d 102, 105 (2d Cir. 1992). In the present
case, proper jury instructions were given:

You have heard testimony from cooperating witnesses,
Mario Rodriguez, Mark Shreyberg, Roman Pasinkovsky, and
Nick Pirgousis, all of whom admitted to you their own
involvement in criminal conduct, including some of the
conduct charged in the indictment. These cooperating
witnesses have all pleaded guilty to charges arising from
the same facts as this case. You are to draw no inferences
of any kind about the guilt of the defendants on trial
from the fact that prosecution witnesses pled guilty to
similar or related charges.

(Tr. at 1587). To the extent that the Government may have
improperly suggested to the jury that Page 18 it infer
from the co-defendants’ guilty pleas the guilt of Brown and
Goldenberg,[fn3] this error was cured by the jury
instruction given, and moreover, did not compromise the
integrity of Defendants’ trial given the entire argument
before the jury. See United States v. Cruz, 797 F.2d 90, 93
n. 1 (2d Cir. 1986) (finding prosecutor’s summation comment
“indefensible” but nonetheless to have not deprived the
defendant of a fair trial when “viewed against the entire
argument before the jury”); United States. v. Wilkinson,
754 F.2d 1427, 1435 (2d Cir. 1985) (in determining whether
to grant a new trial based on improper summation comments,
“[t]he test is whether the statements, viewed against the
entire argument before the jury deprived the defendant of a
fair trial”) (internal quotation marks and citation
omitted).

Brown and Goldenberg both offer a second impropriety
during summation as grounds for a new trial, namely that
the Government “argued in its summation that the jury could
find that the defendants had knowledge of this criminal
activity because they were paid in cash.” (Brown Mot.
¶ 34; Goldenberg Mot. at 17). The Government
properly responds that this argument is without merit.
(Govt. Mem. Opp’n at 29). The Government suggested in its
summation that it could be inferred from the Defendants’
cash payments to one another that they were involved in
illegal activity. To do so was perfectly within the bounds
of the law as “[a] prosecutor is properly given wide
latitude in summation, and is entitled to comment upon
evidence presented at trial and to urge the jury to draw
reasonable inferences from that evidence.” Moore v.
Greiner, 02 Civ. 6122, 2005 WL 2665667, at *15 (S.D.N.Y.
Oct. 19, 2005) (internal citation omitted); see also United
States v. Roldan-Zapata, 916 F.2d 795, 807 (2d Cir. 1990)
(“In summation counsel Page 19 are free to make arguments
which may be reasonably inferred from the evidence
presented.”) (citations omitted).

The objections to the Government’s summation raised by
Brown and Goldenberg do not warrant Rule 33 relief; the
Defendants’ motions for a new trial on these grounds are
denied.

(f) Co-conspirator statements

Finally, Brown maintains that his Sixth Amendment right to
confrontation was violated by the admission at trial of
certain co-conspirator statements. Brown alleges that
admission of these statements, where the declarant did not
take the stand and therefore was not subject to cross
examination, violates the dictates of Crawford v.
Washington, 541 U.S. 36 (2004). This argument is wholly
without merit. Indeed, in the Crawford opinion itself, the
Court stated in dicta that statements “in furtherance of a
conspiracy” are “by their nature [] not testimonial,”
Crawford, 541 U.S. at 56, and the Second Circuit has
recently confirmed as much. The challenged statements are
part and parcel of co-conspirators’ statements made in the
course of and in furtherance of Defendants’ conspiratorial
plan to mislead investigators. See United States v.
Stewart, 433 F.3d 273, 291 (2d Cir. 2006). The Defendant’s
motion for a new trial on the basis of a Crawford violation
is denied. Page 20

III. Conclusion

For all the aforementioned reasons, the Defendants’
motions pursuant to Fed.R.Crim.P. 33 are hereby denied.

SO ORDERED.

[fn1] During the course of the trial, the 100 St. Mary’s
Avenue property was sold and the net proceeds from the sale
were placed in an escrow account pending resolution of the
trial. Thus, all references to the forfeited “property”
known as 100 St. Mary’s Avenue in fact refers to the
proceeds from the sale of that property.

[fn2] Mr. Lashley represented Vlad Goldenberg at trial.

[fn3] I note for the record, however, that I make no finding
as to whether the summation statements were proper or
improper. Page 1