Opinion
S3 98 CR 1238(SAS).
March 21, 2001.
Jonathan N. Halpern, Robert R. Strang, Assistant United States Attorneys, New York, New York, For the Government.
Diarmuid White, Esq., New York, New York, For Defendant.
OPINION AND ORDER
On August 2, 2000, following a jury trial, Edwin Tunick was convicted of Counts One through Three and Six through Twenty- three of a multi-count Indictment charging conspiracy to defraud the Medicare program, health care fraud, and making false statements. On December 21, 2000, he was sentenced to a year and a day in custody, to be followed by three years of supervised release. Significant restitution was also imposed in lieu of a fine. At the close of the sentencing proceedings, Tunick sought bail pending appeal and asked that he be permitted to address this request in writing.
Tunick's guideline range was 30 to 37 months, based on an offense level of 19 and a criminal history category of I. This offense level was lower than that recommended by the Probation Department for several reasons. I concluded that Tunick played a minor role in the offense, he did not qualify for an upward adjustment based on the use of a special skill as a certified public accountant, and the offense did not involve a misrepresentation that the defendants were acting on behalf of Medicare. I also granted a 6-level downward departure, to offense level 13, based on my conclusion that the amount of loss overstated Tunick's culpability. Thus, at offense level 13, criminal history category I, Tunick's guideline range was 12 to 18 months in custody.
Tunick submitted a lengthy letter in which he argues that he meets the standard for bail pending appeal because he raises a substantial question of law likely to result in reversal or a new trial. The Government responded in a detailed letter to which Tunick submitted a written response. Based on these submissions and the oral argument at the time of sentence, bail pending appeal is hereby granted.
The standard for granting bail pending appeal is not in dispute. A person who has been found guilty and sentenced to a term of imprisonment must be detained unless the district court finds:
(A) by clear and convincing evidence that the person is not likely to flee or pose a danger to the safety of any other person or the community . . . and (B) that the appeal is not for the purpose of delay and raises a substantial question of law or fact likely to result in —
(i) reversal,
(ii) an order for a new trial,
(iii) a sentence that does not include a term of imprisonment, or
(iv) a reduced sentence to a term of imprisonment less than the total of the time already served plus the expected duration of the appeal process.18 U.S.C. § 3143(b). Thus, the defendant has the burden of rebutting the strong presumption favoring detention. In its letter opposing bail, the Government stated that it does not oppose a finding that Tunick is not likely to flee or pose a danger to the safety of any other person or the community. The sole issue in dispute, therefore, is whether he has raised a "substantial" question of law likely to result in reversal or in a new trial.
Tunick is nearly 70 years old, has no criminal record and has significant health problems. See Presentence Report at ¶ 102.
In United States v. Randell, 761 F.2d 122 (2d Cir. 1985), the Second Circuit went to considerable lengths to instruct district judges on the meaning of the term "substantial" in the context of post-conviction bail. The court began by stating that "substantial" cannot be equated with "likely to result in reversal or a new trial" as that would render the word "substantial" superfluous. See 761 F.2d at 124. Rather, the court held that the term "substantial" goes to the issue's significance with respect to the ultimate disposition of the appeal. See id. at 125. The court provided three definitions from other Circuits, and expressed the following preference.
The [United States v.]Miller court defined a substantial question as `one which is either novel, which has not been decided by controlling precedent or which is fairly doubtful.' 753 F.2d [19] at 23 [3d Cir. 1985]. [United States v.]Giancola held that a substantial question `is one of more substance than would be necessary to a finding that it was not frivolous. It is a `close' question or one that very well could be decided the other way.' 754 F.2d [898] at 901 [11th Cir. 1985]. [United States v.]Handy defined substantial as `fairly debatable.' 753 F.2d [1487] at 1490 [9th Cir. 1985]. We do not believe that these definitions of `substantial' differ significantly from each other, but if we were to adopt only one, it would be language of Giancola.
Randell, 761 F.2d at 125.
Applying this standard, Tunick has raised a substantial question. Tunick asserts that this Court committed reversible error in giving the jury a conscious avoidance charge. Relying on United States v. Ferrarini, 219 F.3d 145 (2d Cir. 2000), Tunick argued at trial, and again in his bail application, that the Government did not establish a factual predicate for such a charge. He further argues that giving such a charge here could not and did not constitute harmless error.
There is no doubt that Tunick preserved this issue for appeal as he objected to this charge before it was given to the jury.
In Ferrarini, the court concluded that the error in giving a conscious avoidance charge was harmless because of the overwhelming proof that the defendant had actual knowledge of the fraudulent nature of the loans. See 219 F.3d at 157. Here, the evidence of Tunick's actual knowledge was not so overwhelming that any error in giving a conscious avoidance charge necessarily would be harmless.
Because the Ferrarini holding is conceptually difficult, as is the concept of conscious avoidance itself, it is best to quote extensively from that opinion.
We conclude that the evidence does not establish the requisite factual predicate for the [conscious avoidance] charge. The evidence shows [the defendant] actually knew of the frauds; it is not sufficient to permit a finding that he consciously avoided confirming them. The fact that a jury can — on the evidence — find actual knowledge does not mean that it can also find conscious avoidance. If conscious avoidance could be found whenever there was evidence of actual knowledge, a jury could be given a conscious avoidance instruction in a case where there was only equivocal evidence that the defendant had actual knowledge and where there was no evidence that the defendant deliberately avoided learning the truth. Under those circumstances, a jury might conclude that no actual knowledge existed but might nonetheless convict, if it believed that the defendant had not tried hard enough to learn the truth. Since we have held that conscious avoidance cannot be established when the factual context should have apprised [the defendant] of the unlawful nature of [his] conduct — and have instead required that the defendant have been shown to have decided not to learn the key fact — such a result might constitute reversible error. . . . Because the record does not show [the defendant] consciously voided learning of the fraudulent loans — and the government nowhere asserts that it does — the charge given was improper.
Ferrarini, 219 F.3d at 157 (emphasis in original, internal quotation marks and citations omitted). Tunick's argument, in a nutshell, is that because the Government's theory at trial and at sentencing was that he actually knew of the fraud, although he might not have understood all of its details, there was no basis for a conscious avoidance charge which requires a defendant to deliberately avoid or choose not to learn the key facts.
Tunick's argument "`is one of more substance than would be necessary to a finding that it was not frivolous. It is a `close' question or one that very well could be decided the other way.'" Randell, 761 F.2d at 125 (quoting Giancola, 754 F.2d at 901). The Government offered proof that Tunick asked one of the co-conspirators, Andrew Messana, what was going on in the Medicare funded clinic and program founded by co-defendant Alan Barton Nachamie. Messana responded that there were irregularities in the program and that he was leaving because of them. Tunick allegedly responded "[Y]es, I know Alan [Nachamie] is out of control, I thought you, being his friend for many years, could control him, I guess you really can't either." Trial Transcript at 2311-12. This provides some proof of actual knowledge.
The Government quotes the same testimony and draws an entirely different inference. The Government argues that this provides "direct evidence of his appreciation of the high likelihood of illegality . . .and a deliberate decision by Tunick to close his eyes to it. . . ." December 29, 2000 letter from Assistant U.S. Attorneys Jonathon Halpern and Robert Strang to the Court ("Gov't Let."). Whether this incident proves actual knowledge or conscious avoidance is a fine line — — precisely the type of fine line that makes the decision to give the conscious avoidance charge a "close" question. The Government also argued that Tunick's lawyer triggered the need for the charge by denying knowledge in his arguments to the jury. See Gov't. Let. at 3 (citing United States v. Civelli, 883 F.2d 191, 194 (2d Cir. 1989)). Civelli, however, is distinguishable on a number of grounds. First, the court gave the conscious avoidance charge in response to a direct request from the jury: "if [defendant] suspected that he was carrying cocaine, but didn't look in the package[,] would that have constituted conspiracy." Second, defendant failed to object to the charge and so it was reviewed for plain error. Third, defendant testified at his trial, placing his knowledge squarely at issue. Finally, this case pre- dates Ferrarini. For all of these reasons, while the Government may well be correct in its argument that Tunick's lawyer triggered the need for the charge through his arguments to the jury, the propriety of the charge remains a "close" question.
As noted in Randell, a court need not conclude that it is "likely to be reversed" before granting bail pending appeal. 761 F.2d at 124-25. Indeed, I decline to make any such finding. All that a district court need do is find a substantial question which, if decided favorably to the defendant on appeal, would likely result in reversal or a new trial. See Miller, 753 F.2d at 24. Here, the issue raised by Tunick is a "close" question in that it is "fairly debatable" and "very well could be decided the other way." Randell, 761 F.2d at 125 (internal quotation marks and citations omitted). Thus, Tunick has raised a substantial issue.
The next question, then, is whether the issue is "`so integral to the merits of the conviction on which defendant is to be imprisoned that a contrary appellate holding is likely to require reversal of the conviction or a new trial.'" Id. (quoting Miller, 753 F.2d at 23). Once again, the burden of proof rests on the defendant. Tunick has satisfied this prong. The conscious avoidance charge went to all counts of conviction, including the conspiracy charge. As noted earlier, there is some probability that if the appellate court finds that it was error to give this charge, that error would not be harmless. Under these circumstances, the issue raised could likely require a new trial.
For the reasons set forth above, Tunick's application for bail pending appeal is GRANTED.
SO ORDERED: