United States of America v. Gatto

BRIEF, on behalf of Appellant James Gatto in 19-783, FILED. Service date 08/13/2019 by CM/ECF.[2631240] [19-783, 19-786, 19-788] [Entered: 08/13/2019 03:20 PM]

2nd Circuit Court of Appeals, ca2-2019-00783

Current View

Full Text

19-0783 L, () 19-0786(CON), 19-0788(CON) United States Court of Appeals for the Second Circuit UNITED STATES OF AMERICA, Appellee, – v. – JAMES GATTO, aka Jim, MERL CODE, CHRISTIAN DAWKINS, Defendants-Appellants. –––––––––––––––––––––––––––––– ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK REDACTED BRIEF FOR DEFENDANTS-APPELLANTS MICHAEL S. SCHACHTER ANDREW A. MATHIAS CASEY E. DONNELLY NEXSEN PRUET, LLC WILLKIE FARR & GALLAGHER LLP 55 East Camperdown Way, Suite 400 787 Seventh Avenue Greenville, South Carolina 29601 New York, New York 10019 (864) 370-2211 (212) 728-8000 Attorneys for Defendant-Appellant Attorneys for Defendant-Appellant James Gatto Merl Code STEVEN HANEY HANEY LAW GROUP, PLLC 3000 Town Center, Suite 2570 Southfield, Michigan 48075 (248) 414-1470 Attorneys for Defendant-Appellant Christian Dawkins TABLE OF CONTENTS Page INTRODUCTION ..................................................................................................... 1 JURISDICTIONAL STATEMENT .......................................................................... 9 ISSUES PRESENTED............................................................................................... 9 STATEMENT OF THE CASE ................................................................................ 12 STATEMENT OF FACTS ...................................................................................... 14 A. NCAA Division I Men's College Basketball ...................................... 14 B. The Appellants .................................................................................... 16 C. Payments to the Families of Elite High School Basketball Players ................................................................................................. 18 1. Payments to the Family of Dennis Smith Junior ...................... 19 2. Payments to the Family of Billy Preston .................................. 21 3. Payments to the Legal Guardian of Silvio DeSousa ................. 24 4. Payments to the Family of Brian Bowen Junior ....................... 27 D. The Government's Wire Fraud Theory ............................................... 33 E. Appellants' Defense ............................................................................ 35 SUMMARY OF ARGUMENT ............................................................................... 37 ARGUMENT ........................................................................................................... 42 I. APPELLANTS WERE CONVICTED OF A FRAUD THEY DID NOT KNOW ABOUT ................................................................................... 42 A. The Government Failed to Prove That Mr. Gatto Knew About the Certifications ................................................................................. 43 B. The Government Failed to Prove That Mr. Code Knew About the Certifications ................................................................................. 47 -i- C. The Government Failed to Prove That Mr. Dawkins Knew About the Certifications ...................................................................... 49 II. APPELLANTS' CONVICTIONS MUST BE REVERSED AND A NEW TRIAL ORDERED BECAUSE THE DISTRICT COURT GAVE MULTIPLE ERRONEOUS INSTRUCTIONS TO THE JURY ...... 50 A. The Conscious Avoidance Instruction Was Erroneous....................... 50 1. The Government Failed to Establish a Factual Predicate for a Conscious Avoidance Instruction ..................................... 51 2. The Conscious Avoidance Instruction Was Inappropriate Because the "Fact" at Issue Was the Knowledge that Certifications Would be Submitted in the Future By Persons Other than Appellants .................................................. 54 3. The Conscious Avoidance Instruction Was Inherently Inconsistent with the Government's Theory that Appellants "Willfully Caused" the Certifications to be Submitted to the Universities .................................................... 56 4. The Conscious Avoidance Instruction Was Not Harmless Error .......................................................................................... 57 B. The District Court Erred In Refusing to Instruct the Jury That Appellants Could Not Be Convicted Unless They Schemed To Obtain Money Or Property From The Universities ............................ 58 C. The District Court Erred When It Instructed the Jury That A Right to Control Scholarship Decisions Is A Property Interest Protected By The Wire Fraud Statute ................................................. 69 D. The District Court's Instructions to the Jury Regarding Appellants' Criminal Intent Were Erroneous, Incomplete and Had the Effect of Undermining Appellants' Defense ......................... 72 1. The District Court Erroneously Instructed the Jury That Appellants' Case Was "About" Whether the Universities Had Been "Misled." .................................................................. 74 -ii- 2. The District Court Did Not Follow This Court's Precedent When Instructing the Jury Regarding the Import of the Requests from the Universities' Coaches ........... 77 3. The District Court Erred in Refusing to Instruct the Jury that Appellants Could Not Be Convicted Simply Because They Understood That NCAA Penalties Were a Possible Consequence of Their Conduct................................................. 91 4. The District Court Gave an Unprecedented "Dual Intent" Instruction That Served No Purpose Other Than to Sideline Appellants' Defenses .................................................. 95 III. APPELLANTS' CONVICTIONS MUST BE REVERSED AND A NEW TRIAL ORDERED BECAUSE THE DISTRICT COURT ERRONEOUSLY EXCLUDED EVIDENCE CRITICAL TO APPELLANTS' DEFENSE .......................................................................... 97 A. The District Court Erroneously Excluded Expert Testimony and Evidence Regarding the Value of an Elite Athlete to a University ............................................................................................ 98 1. The Excluded Expert Testimony Was Critical to Appellants' Defense .................................................................. 98 2. The District Court Erred In Concluding that Dr. Rascher's Testimony Was Irrelevant. ..................................... 103 3. The District Court Erred in Concluding that Dr. Rascher's Testimony Would "Likely" Lead to Jury Nullification. ........................................................................... 108 4. The District Court Erroneously Excluded Evidence Relevant to Appellants' Argument That They Believed It Was "Worth It" for the Universities To Violate NCAA Rules When Recruiting Elite Athletes .................................... 113 B. The District Court Erroneously Excluded Evidence Relevant to Appellants' Argument That They Believed The Universities Wanted Appellants' Help In Recruiting Elite Athletes, Including Through Means That Violated NCAA Rules ................... 114 -iii- C. The District Court Erroneously Excluded Evidence Relevant to Contradicting the Compliance Witnesses' Claims About the Importance of NCAA Rule Compliance to the Universities............. 117 D. The District Court Erroneously Excluded Evidence Relevant to Contradicting the Claim by the Compliance Witnesses That The Universities Would Not Have Awarded An Athletic Scholarship to An Elite Athlete Who Was Ineligible Under NCAA Rules...................................................................................... 122 E. The District Court Erroneously Excluded Evidence Relevant to Proving that the Certifications That Constituted the Heart of the Alleged Fraud Were, In Fact, Not False ........................................... 125 F. The District Court's Evidentiary Errors Were Not Harmless ........... 129 CONCLUSION ...................................................................................................... 129 -iv- TABLE OF AUTHORITIES Cases Page(s) Am. Soc. of Mech. Engineers, Inc. v. Hydrolevel Corp., 456 U.S. 556 (1982) ............................................................................................ 83 Cameron v. City of New York, 598 F.3d 50 (2d Cir. 2010) ............................................................................... 103 Cameron v. Cmty Aid for Retarded Children Inc., 335 F.3d 60 (2d Cir. 2003) ............................................................................... 113 Carpenter v. United States, 484 U.S. 19 (1987) ..................................................................................63, 66, 71 Chambers v. Mississippi, 410 U.S. 284 (1973) .......................................................................................... 103 Cinema North Corp. v. Plaza at Latham Assocs., 867 F.2d 135 (2d Cir. 1989) ............................................................................... 77 Cleveland v. United States, 531 U.S. 12 (2000) .............................................................................................. 63 Connecticut Nat'l Bank v. Germain, 503 U.S. 249 (1992) ......................................................................................59, 60 Elonis v. United States, 135 S. Ct. 2001 (2015) ........................................................................................ 87 Glasser v. United States, 315 U.S. 60 (1942) .............................................................................................. 76 Global-Tech Appliances, Inc. v. SEB S.A., 563 U.S. 754 (2011) ......................................................................................52, 53 In re Goldman Sachs Grp., Inc. S'holder Litig., No. 5215-VCG, 2011 WL 4826104 (Del. Ch. Oct. 12, 2011) ........................... 89 Hedgpeth v. Pulido, 555 U.S. 57 (2008) .............................................................................................. 72 -v- Honeycutt v. United States, 137 S. Ct. 1626 (2017) ........................................................................................ 60 IMB Corp. v. BCG Partners, Inc., No. 10-cv-128 (PAC), 2013 WL 1775437 (S.D.N.Y. Apr. 25, 2013) ............. 108 Johnson Elec. N. Am. Inc. v. Mabuchi Motor Am. Corp., 103 F. Supp. 2d 268 (S.D.N.Y. 2000) ................................................................ 99 Kotteakos v. United States, 328 U.S. 750 (1946) .......................................................................................... 129 Lorentzen v. Curtis, 18 F. Supp. 2d 322 (S.D.N.Y. 1998) (Parker, J.)................................................ 67 Loughrin v. United States, 573 U.S. 351 (2014) ............................................................................................ 60 McNally v. United States, 483 U.S. 350 (1987) ............................................................................................ 70 Monterey Plaza Hotel Ltd. P'ship v. Local 483 of the Hotel Employees & Rest. Employees & Rest. Employees Union, 215 F.3d 923 (9th Cir. 2000) .............................................................................. 65 Neder v. United States, 527 U.S. 1 (1999) ....................................................................................59, 61, 62 Porcelli v. United States, 404 F.3d 157 (2d Cir. 2005) .........................................................................65, 66 Prudential Lines Inc., v. Exxon Corp., 704 F.2d 59 (2d Cir. 1983) ............................................................................... 122 Scheidler v. National Organization for Women, Inc., 537 U.S. 393 (2003) ............................................................................................ 71 Sekhar v. United States, 570 U.S. 729 (2013) ......................................................................................61, 71 Skilling v. United States, 561 U.S. 358 (2010) ...............................................................................