Case: 10-4774 Document: 003111482039 Page: 1 Date Filed: 12/13/2013 NOS. 10-4774, 11-4587, 12-2077 IN THE UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT UNITED STATES OF AMERICA, Appellee v. GEORGE GEORGIOU, Appellant APPEAL FROM JUDGMENT OF CONVICTION AND SENTENCE IN CRIMINAL NO. 09-88 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA BRIEF FOR APPELLEE UNITED STATES OF AMERICA ZANE DAVID MEMEGER United States Attorney ROBERT A. ZAUZMER Assistant United States Attorney Chief of Appeals LOUIS D. LAPPEN First Assistant United States Attorney 615 Chestnut Street, Suite 1250 Philadelphia, PA 19106 (215) 861-8551 Case: 10-4774 Document: 003111482039 Page: 2 Date Filed: 12/13/2013 TABLE OF CONTENTS JURISDICTIONAL STATEMENT ........................................................ 1 I. Subject Matter Jurisdiction ..................................................... 1 II. Appellate Jurisdiction ............................................................ 1 STATEMENT OF ISSUES .................................................................... 2 STATEMENT OF THE CASE ............................................................... 3 I. Procedural History .................................................................. 3 II. Statement of Facts .................................................................. 5 A. Introduction ............................................................. 5 B. Georgiou’s Criminal Activity with Undercover FBI Agent ................................................................. 7 C. Georgiou’s Criminal Activity with Kevin Waltzer ..................................................................... 9 D. Stock Fraud Victims ............................................... 13 1. Caledonia – Robert Dunkley ......................... 13 2. William Wright/Accuvest – Brad Jensen ........................................................... 15 3. Avicena – Michael Sullivan ........................... 16 4. Alex Barrotti .................................................. 17 E. Financial, Trading, and Computer Records Showing the Criminal Activity ............................... 18 F. Georgiou’s Story ..................................................... 21 - i - Case: 10-4774 Document: 003111482039 Page: 3 Date Filed: 12/13/2013 STATEMENT OF RELATED CASES .................................................. 23 SUMMARY OF ARGUMENT ............................................................. 24 ARGUMENT ....................................................................................... 27 I. THE DISTRICT COURT CORRECTLY DENIED GEORGIOU’S MOTIONS FOR A NEW TRIAL BASED ON ALLEGED DISCOVERY ERRORS ............... 27 A. No Exculpatory Evidence Was Suppressed ............ 29 B. No New Evidence Was Material ............................. 44 II. THE GOVERNMENT DID NOT VIOLATE BRADY OR THE JENCKS ACT IN CONNECTION WITH ITS DISCLOSURES CONCERNING SEC ACCOUNTANT DANIEL KOSTER ............................................................ 47 III. THE COURT PROPERLY DENIED GEORGIOU’S MOTION TO UNSEAL .................................................... 52 IV. THE DISTRICT COURT PROPERLY ADMITTED KOSTER’S TESTIMONY AND SUMMARY CHARTS .......................................................................... 54 V. THE DISTRICT COURT ACTED WITHIN ITS DISCRETION IN PRECLUDING ADDITIONAL CROSS-EXAMINATION OF WALTZER AND EXCLUDING EXTRINSIC EVIDENCE OF WALTZER’S ALLEGED OTHER MISCONDUCT ........... 61 VI. THE DISTRICT COURT DID NOT COMMIT PLAIN ERROR BY FAILING TO GRANT A JUDGMENT OF ACQUITTAL ON COUNTS TWO THROUGH NINE AND IN INSTRUCTING THE JURY ....................................................................... 69 - ii - Case: 10-4774 Document: 003111482039 Page: 4 Date Filed: 12/13/2013 VII. THE DISTRICT COURT DID NOT ERR AT SENTENCING ................................................................. 78 A. The District Court’s Loss Calculation Was Not Clearly Erroneous. ........................................... 78 B. The District Court’s Application of the Victim Enhancement Was Not Clearly Erroneous .............................................................. 85 C. Georgiou Waived His Objection to the Forfeiture Order ....................................................86 CONCLUSION ....................................................................................89 - iii - Case: 10-4774 Document: 003111482039 Page: 5 Date Filed: 12/13/2013 TABLE OF AUTHORITIES Cases Brady v. Maryland, 373 U.S. 83 (1963)....................................................................... passim Brown v. United States, 556 F.2d 224 (3d Cir. 1977) ................................................................ 34 Carter v. Hewitt, 617 F.2d 961 (3d Cir. 1980) ................................................................ 63 Duquesne Light Co. v. Westinghouse Electric Corp., 66 F.3d 604 (3d Cir. 1995) ..................................................................61 Dura Pharmaceuticals, Inc. v. Broudo, 544 U.S. 336 (2005) ..................................................................... 83, 84 Griggs v. Provident Consumer Discount Co., 459 U.S. 56 (1982) ............................................................................. 53 Henderson v. Kibbe, 431 U.S. 145 (1977) ............................................................................. 69 Hollman v. Wilson, 158 F.3d 177 (3d Cir. 1998) ................................................................ 36 Hook v. Ernst & Young, 28 F.3d 366 (3d Cir. 1994) ................................................................. 27 Kyles v. Whitley, 514 U.S. 419 (1995) ............................................................................ 29 Morrison v. National Australia Bank Ltd., 130 S. Ct. 2869 (2010) .................................................................. 71, 72 O'Brien v. Chaparro, 2005 WL 6011248 (S.D. Fla. 2005) ................................................... 44 - iv - Case: 10-4774 Document: 003111482039 Page: 6 Date Filed: 12/13/2013 Pasquantino v. United States, 544 U.S. 349 (2005) ........................................................................... 74 Pennsylvania v. Ritchie, 480 U.S. 39 (1987) ............................................................................. 49 People v. Bernaiche, 2008 WL 2627600 (Mich. App. 2008) .............................................. 43 SEC v. Ficeto, 839 F. Supp. 2d 1101 (C.D. Cal. 2011) ................................................ 72 SEC v. Treadway, 430 F. Supp. 2d 293 (S.D.N.Y. 2006) .......................................... 57, 58 Sanchez v. United States, 50 F.3d 1448 (9th Cir. 1995) .............................................................. 36 Schellinger v. Schellinger, No. 93-FA-939-763 (Milwaukee Cty. Cir. Ct. 1997) ........................... 43 United States v. Agurs, 427 U.S. 97 (1976) .............................................................................. 29 United States v. Ali, 508 F.3d 136 (3d Cir. 2007) ............................................................... 79 United States v. American Radiator & Standard Sanitary Corp., 433 F.2d 174 (3d Cir. 1970) ................................................................ 49 United States v. Andrus, 775 F.2d 825 (7th Cir. 1985) .............................................................. 48 United States v. Antico, 275 F.3d 245 (3d Cir. 2001) ............................................................... 69 United States v. Atherton, 936 F.2d 728 (2d Cir. 1991)................................................................ 66 - v - Case: 10-4774 Document: 003111482039 Page: 7 Date Filed: 12/13/2013 United States v. Bagley, 473 U.S. 667 (1985) ............................................................................ 29 United States v. Barel, 939 F.2d 26 (3d Cir. 1991) ................................................................. 69 United States v. Bender, 304 F.3d 161 (1st Cir. 2002) ............................................................... 36 United States v. Breland, 366 F. App’x 548 (5th Cir. 2010) ....................................................... 57 United States v. Casoni, 950 F.2d 893 (3d Cir. 1991) ......................................................... 62, 68 United States v. Console, 13 F.3d 641 (3d Cir. 1993) .................................................................. 63 United States v. Corbin, 734 F.2d 643 (11th Cir. 1984) ............................................................. 66 United States v. Dansker, 565 F.2d 1262 (3d Cir. 1977) .............................................................. 34 United States v. Dent, 149 F.3d 180 (3d Cir. 1997) ................................................................ 48 United States v. Flamer, 2009 WL 237084 (3d Cir. 2009) ....................................................... 53 United States v. George, 532 F.3d 933 (D.C. Cir. 2008) ........................................................... 44 United States v. Gordon, 290 F.3d 539 (3d Cir. 2002) .............................................................. 69 United States v. Jimenez, 513 F.3d 62 (3d Cir. 2008) ........................................................... 78, 79 - vi - Case: 10-4774 Document: 003111482039 Page: 8 Date Filed: 12/13/2013 United States v. Jordan, 236 F.3d 953 (8th Cir. 2001) ............................................................. 66 United States v. Joseph, 996 F.2d 36 (3d Cir. 1993) ................................................................. 36 United States v. Lockhart, 956 F.2d 1418 (7th Cir. 1992) ............................................................. 36 United States v. Lore, 430 F.3d 190 (3d Cir. 2005) .............................................................. 63 United States v. Mandell, 2011 WL 924891 (S.D.N.Y. 2011) ....................................................... 72 United States v. McMillan, 600 F.3d 434 (5th Cir. 2010) ............................................................. 57 United States v. McNeill, 887 F.2d 448 (3d Cir. 1989) ............................................................... 66 United States v. Merlino, 349 F.3d 144 (3d Cir. 2003) ............................................................... 35 United States v. Mix, 2013 WL 4780091 (E.D. La. 2013)..................................................... 30 United States v. Napier, 273 F.3d 276 (3d Cir. 2001) ............................................................... 78 United States v. Pelullo, 14 F.3d 881 (3d Cir. 1994) .................................................................. 27 United States v. Pelullo, 399 F.3d 197 (3d Cir. 2005) ......................................................... 29, 33 United States v. Perdomo, 929 F.2d 967 (3d Cir. 1991) ........................................................... 29, 31 - vii - Case: 10-4774 Document: 003111482039 Page: 9 Date Filed: 12/13/2013 United States v. Ramos, 27 F.3d 65 (3d Cir. 1994) ................................................................... 49 United States v. Rigas, 490 F.3d 208 (2d Cir. 2007) .............................................................. 57 United States v. Schwamborn, 2012 WL 6050561 (E.D.N.Y. 2012).................................................... 82 United States v. Scop, 846 F.2d 135 (2d Cir. 1988) ............................................................... 57 United States v. Serafini, 233 F.3d 758 (3d Cir. 2000) ......................................................... 54, 61 United States v. Starusko, 729 F.2d 256 (3d Cir. 1984) ............................................................... 33 United States v. Tadros, 310 F.3d 999 (7th Cir. 2002) ............................................................. 36 United States v. Thayer, 201 F.3d 214 (3d Cir. 1999) ................................................................ 69 United States v. Vampire Nation, 451 F.3d 189 (3d Cir. 2006) ............................................................... 87 United States v. Vitillo, 490 F.3d 314 (3d Cir. 2007) ............................................................... 79 Statutes and Rules 15 U.S.C. § 78j(b) ......................................................................................... 70 18 U.S.C. § 2 ................................................................................................. 3 18 U.S.C. § 371 ............................................................................................... 3 18 U.S.C. § 981(a)(1)(C) ............................................................................... 87 - viii - Case: 10-4774 Document: 003111482039 Page: 10 Date Filed: 12/13/2013 18 U.S.C. § 1343 ............................................................................................. 3 18 U.S.C. § 3231 .............................................................................................. 1 18 U.S.C. § 3500(b) ..................................................................................... 27 18 U.S.C. § 3663A(a)(1) ............................................................................... 88 18 U.S.C. § 3742.............................................................................................. 1 28 U.S.C. § 1291 .............................................................................................. 1 28 U.S.C. § 2461(c) ...................................................................................... 87 17 C.F.R. § 240.10b-5 ......................................................................... 3, 70-72 Fed. R. Crim. P. 32.2 ............................................................................. 86, 88 Fed. R. Crim. P. 33 ................................................................................ 53, 65 Fed. R. Evid. 608(b) ........................................................................ 25, 63, 65 Fed. R. Evid. 701 .......................................................................................... 56 U.S.S.G. § 2B1.1 ..................................................................................... 79, 85 Miscellaneous American Psychiatric Ass'n, Diagnostic & Statistical Manual of Mental Disorders 382 ........................................................................ 44 - ix -