16‐2583‐cr United States v. Katsman
UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
August Term 2018
(Argued: September 20, 2018 Decided: October 10, 2018) Docket No. 16‐2583‐cr
UNITED STATES OF AMERICA, Appellee,
‐ against ‐
IGOR KATSMAN, Defendant‐Appellant.
ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NEW YORK
Before: CHIN and LOHIER, Circuit Judges, and KEENAN, District Judge.*
Appeal from an order of the United States District Court for the
Eastern District of New York (Johnson, J.), denying the governmentʹs motion
pursuant to Rule 35 of the Federal Rules of Criminal Procedure for a reduction of
* Judge John F. Keenan, of the United States District Court for the Southern District of New York, sitting by designation. sentence. Defendant‐appellant contends that, in denying the motion, the district
court erred by applying an incorrect legal standard and improperly considering
sentencing factors under 18 U.S.C. § 3553(a).
AFFIRMED.
MICHAEL H. WARREN, Assistant United States Attorney (Emily Berger, Assistant United States Attorney, on the brief), for Richard P. Donoghue, United States Attorney for the Eastern District of New York, Brooklyn, New York, for Appellee.
DONNA ALDEA (Alexander Klein, on the brief), Barket Marion Epstein & Kearon LLP, Garden City, New York, for Defendant‐Appellant.
PER CURIAM:
Defendant‐appellant Igor Katsman appeals from an order of the
district court entered July 12, 2016, denying, without explanation, the
governmentʹs motion pursuant to Rule 35(b) of the Federal Rules of Criminal
Procedure for a reduction of sentence. By order entered July 18, 2017, we
remanded the case to permit the district court to explain its decision. The district
court did so, issuing a seven‐page order on August 11, 2017. This appeal was
thereafter reinstated. We assume the partiesʹ familiarity with the underlying
facts, procedural history, and issues on appeal.
BACKGROUND
On November 17, 2010, Katsman pleaded guilty in the Eastern
District of New York (ʺEDNYʺ), pursuant to a plea agreement with the United
States Attorneyʹs Office for the Eastern District of New York (ʺUSAO‐EDNYʺ), to
charges related to his role in a fraudulent check‐cashing scheme. Katsman was
sentenced principally (Block, J.) to 84 monthsʹ imprisonment.
He thereafter moved to withdraw his guilty plea or, alternatively,
for resentencing before a different judge. The district court denied the motion to
withdraw the guilty plea but granted the request for resentencing before a
different judge. The case was reassigned (Johnson, J.). Katsman was resentenced
on November 30, 2012, to a total of 120 monthsʹ imprisonment. Katsman
appealed, and by summary order entered January 13, 2014, this Court affirmed
his sentence. United States v. Katsman, 551 F. Appʹx 601 (2d Cir. 2014).
In 2013, the Federal Bureau of Investigation and United States
Attorneyʹs Office for the Southern District of New York (ʺUSAO‐SDNYʺ)
approached Katsman about cooperating in a separate case pending in the
Southern District of New York (ʺSDNYʺ) related to a no‐fault insurance fraud
scheme and various investment frauds. See United States v. Zemlyansky, 945 F.
Supp. 2d 438 (S.D.N.Y 2013). Katsman proffered on several occasions in 2013
and mid‐2014, and again in January 2015.
On February 11, 2015, the government entered into a joint EDNY‐
SDNY cooperation agreement with Katsman, pursuant to which the government
agreed to make a Rule 35 motion in the EDNY to reduce Katsmanʹs sentence if
Katsman provided substantial assistance in ongoing matters. In connection with
that agreement, Katsman was required to plead guilty to uncharged criminal
conduct in the SDNY. Katsman pleaded guilty to a nine‐count information in the
SDNY on February 11, 2015.
On January 29, 2016, the USAO‐EDNY filed a letter motion pursuant
to Rule 35(b) in the EDNY, requesting that Katsman be resentenced based on his
substantial assistance in the prosecutions in the SDNY.
On January 29, 2016, the parties also appeared before the district
court in the EDNY for a hearing on the Rule 35 motion. The parties informed the
court that Katsman had pleaded guilty in the SDNY, and that the charges in the
SDNY were based entirely on information that Katsman had voluntarily
provided during proffer sessions. The matter before the EDNY was then
adjourned pending Katsmanʹs sentencing in the SDNY.
On June 7, 2016, the USAO‐EDNY alerted the district court in the
EDNY that Katsman had been sentenced in the SDNY (Batts, J.). Although he
had faced a sentence of up to 125 yearsʹ imprisonment, due to his substantial
cooperation, which included testifying in two trials, Katsman received a sentence
of time served.
On June 7, 2016, the USAO‐EDNY renewed its Rule 35(b) motion to
reduce Katsmanʹs sentence in the EDNY. On July 12, 2016, the district court
issued its order consisting of a minute entry summarily denying the motion. As
noted, following Katsmanʹs appeal and a remand from this Court, see United
States v. Katsman, No. 16‐2583 (2d Cir. July 18, 2017) (order granting motion to
remand), the district court issued its decision, which it sealed (ʺOp.ʺ), along with
a summary of its reasoning on the publicly available docket:
The decision to reduce a sentence pursuant to a Rule 35(b) motion is discretionary. In light of Mr. Katsman having already received the benefit of his cooperation [in the SDNY], his lies to this Court, his continued commission of the same criminal conduct while on pre‐sentencing release, his personal involvement in the Zemlyansky‐Danilovich conspiracy, the nature of the instant underlying
crimes, and the undersignedʹs consideration of the 3553(a) factors, this Court denies the Governmentʹs motion. A 120‐month sentence, the middle of the guidelines range, remains sufficient but not greater than necessary to comply with the purposes of Section 3553(a). As such, the Governmentʹs . . . Motion for Reconsideration as to Igor Katsman . . . is denied and Mr. Katsmanʹs original sentence stands.
D. Ct. Dkt. No. 103. This appeal was reinstated, and the parties submitted
supplemental briefing.
DISCUSSION
In seeking reversal of the district courtʹs denial of the governmentʹs
Rule 35 motion, Katsman argues that (1) ʺRule 35(b) motions require a two‐step
analysis ‐‐ but the District Court conflated these discrete steps into one,ʺ and (2)
the district court should not have considered the § 3553(a) factors in determining
whether to reduce Katsmanʹs sentence. Def.‐Appellantʹs Supp. Br. at 7‐8. We are
not persuaded as to either argument.
Rule 35(b)(2)(B) provides that on ʺthe governmentʹs motion made
more than one year after sentencing, the court may reduce a sentence if the
defendantʹs substantial assistance involved . . . information provided by the
defendant to the government within one year of sentencing, but which did not
become useful to the government until more than one year after sentencing.ʺ Fed
R. Crim. P. 35(b)(2)(B) (emphasis added).
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16‐2583‐cr United States v. Katsman
UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
August Term 2018
(Argued: September 20, 2018 Decided: October 10, 2018) Docket No. 16‐2583‐cr
UNITED STATES OF AMERICA, Appellee,
‐ against ‐
IGOR KATSMAN, Defendant‐Appellant.
ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NEW YORK
Before: CHIN and LOHIER, Circuit Judges, and KEENAN, District Judge.*
Appeal from an order of the United States District Court for the
Eastern District of New York (Johnson, J.), denying the governmentʹs motion
pursuant to Rule 35 of the Federal Rules of Criminal Procedure for a reduction of
* Judge John F. Keenan, of the United States District Court for the Southern District of New York, sitting by designation. sentence. Defendant‐appellant contends that, in denying the motion, the district
court erred by applying an incorrect legal standard and improperly considering
sentencing factors under 18 U.S.C. § 3553(a).
AFFIRMED.
MICHAEL H. WARREN, Assistant United States Attorney (Emily Berger, Assistant United States Attorney, on the brief), for Richard P. Donoghue, United States Attorney for the Eastern District of New York, Brooklyn, New York, for Appellee.
DONNA ALDEA (Alexander Klein, on the brief), Barket Marion Epstein & Kearon LLP, Garden City, New York, for Defendant‐Appellant.
PER CURIAM:
Defendant‐appellant Igor Katsman appeals from an order of the
district court entered July 12, 2016, denying, without explanation, the
governmentʹs motion pursuant to Rule 35(b) of the Federal Rules of Criminal
Procedure for a reduction of sentence. By order entered July 18, 2017, we
remanded the case to permit the district court to explain its decision. The district
court did so, issuing a seven‐page order on August 11, 2017. This appeal was
thereafter reinstated. We assume the partiesʹ familiarity with the underlying
facts, procedural history, and issues on appeal.
BACKGROUND
On November 17, 2010, Katsman pleaded guilty in the Eastern
District of New York (ʺEDNYʺ), pursuant to a plea agreement with the United
States Attorneyʹs Office for the Eastern District of New York (ʺUSAO‐EDNYʺ), to
charges related to his role in a fraudulent check‐cashing scheme. Katsman was
sentenced principally (Block, J.) to 84 monthsʹ imprisonment.
He thereafter moved to withdraw his guilty plea or, alternatively,
for resentencing before a different judge. The district court denied the motion to
withdraw the guilty plea but granted the request for resentencing before a
different judge. The case was reassigned (Johnson, J.). Katsman was resentenced
on November 30, 2012, to a total of 120 monthsʹ imprisonment. Katsman
appealed, and by summary order entered January 13, 2014, this Court affirmed
his sentence. United States v. Katsman, 551 F. Appʹx 601 (2d Cir. 2014).
In 2013, the Federal Bureau of Investigation and United States
Attorneyʹs Office for the Southern District of New York (ʺUSAO‐SDNYʺ)
approached Katsman about cooperating in a separate case pending in the
Southern District of New York (ʺSDNYʺ) related to a no‐fault insurance fraud
scheme and various investment frauds. See United States v. Zemlyansky, 945 F.
Supp. 2d 438 (S.D.N.Y 2013). Katsman proffered on several occasions in 2013
and mid‐2014, and again in January 2015.
On February 11, 2015, the government entered into a joint EDNY‐
SDNY cooperation agreement with Katsman, pursuant to which the government
agreed to make a Rule 35 motion in the EDNY to reduce Katsmanʹs sentence if
Katsman provided substantial assistance in ongoing matters. In connection with
that agreement, Katsman was required to plead guilty to uncharged criminal
conduct in the SDNY. Katsman pleaded guilty to a nine‐count information in the
SDNY on February 11, 2015.
On January 29, 2016, the USAO‐EDNY filed a letter motion pursuant
to Rule 35(b) in the EDNY, requesting that Katsman be resentenced based on his
substantial assistance in the prosecutions in the SDNY.
On January 29, 2016, the parties also appeared before the district
court in the EDNY for a hearing on the Rule 35 motion. The parties informed the
court that Katsman had pleaded guilty in the SDNY, and that the charges in the
SDNY were based entirely on information that Katsman had voluntarily
provided during proffer sessions. The matter before the EDNY was then
adjourned pending Katsmanʹs sentencing in the SDNY.
On June 7, 2016, the USAO‐EDNY alerted the district court in the
EDNY that Katsman had been sentenced in the SDNY (Batts, J.). Although he
had faced a sentence of up to 125 yearsʹ imprisonment, due to his substantial
cooperation, which included testifying in two trials, Katsman received a sentence
of time served.
On June 7, 2016, the USAO‐EDNY renewed its Rule 35(b) motion to
reduce Katsmanʹs sentence in the EDNY. On July 12, 2016, the district court
issued its order consisting of a minute entry summarily denying the motion. As
noted, following Katsmanʹs appeal and a remand from this Court, see United
States v. Katsman, No. 16‐2583 (2d Cir. July 18, 2017) (order granting motion to
remand), the district court issued its decision, which it sealed (ʺOp.ʺ), along with
a summary of its reasoning on the publicly available docket:
The decision to reduce a sentence pursuant to a Rule 35(b) motion is discretionary. In light of Mr. Katsman having already received the benefit of his cooperation [in the SDNY], his lies to this Court, his continued commission of the same criminal conduct while on pre‐sentencing release, his personal involvement in the Zemlyansky‐Danilovich conspiracy, the nature of the instant underlying
crimes, and the undersignedʹs consideration of the 3553(a) factors, this Court denies the Governmentʹs motion. A 120‐month sentence, the middle of the guidelines range, remains sufficient but not greater than necessary to comply with the purposes of Section 3553(a). As such, the Governmentʹs . . . Motion for Reconsideration as to Igor Katsman . . . is denied and Mr. Katsmanʹs original sentence stands.
D. Ct. Dkt. No. 103. This appeal was reinstated, and the parties submitted
supplemental briefing.
DISCUSSION
In seeking reversal of the district courtʹs denial of the governmentʹs
Rule 35 motion, Katsman argues that (1) ʺRule 35(b) motions require a two‐step
analysis ‐‐ but the District Court conflated these discrete steps into one,ʺ and (2)
the district court should not have considered the § 3553(a) factors in determining
whether to reduce Katsmanʹs sentence. Def.‐Appellantʹs Supp. Br. at 7‐8. We are
not persuaded as to either argument.
Rule 35(b)(2)(B) provides that on ʺthe governmentʹs motion made
more than one year after sentencing, the court may reduce a sentence if the
defendantʹs substantial assistance involved . . . information provided by the
defendant to the government within one year of sentencing, but which did not
become useful to the government until more than one year after sentencing.ʺ Fed
R. Crim. P. 35(b)(2)(B) (emphasis added).
We agree with Katsman that, in deciding a Rule 35(b) motion, a
district court makes two inquiries. First, it must determine whether the
defendant in fact provided substantial assistance. Second, if so, it must then
determine what, if any, reduction in sentence is warranted. United States v. Tadio,
663 F.3d 1042, 1047‐48 (9th Cir. 2011); United States v. Park, 533 F. Supp. 2d 474,
476 (S.D.N.Y. 2008).
As to Katsmanʹs first challenge, we are not persuaded that the
district court improperly conflated the two steps. In fact, the district court
disposed of the first inquiry, as it concluded that ʺKatsman clearly provided
substantial assistance.ʺ Op. at 5. The court then proceeded to the second
inquiry, explaining that, in light of the circumstances of this case, including, inter
alia, that Katsman had already received the benefit of his cooperation in the
SDNY, he continued to engage in criminal activity while on presentence release,
and he lied to the court with respect to his substantial additional criminal
conduct, ʺ[a] 120‐month sentence, the middle of the guidelines range, remains
sufficient but not greater than necessary to comply with the purposes of Section
3553(a).ʺ D. Ct. Dkt. No. 103; see also Op. at 7 (same). Katsmanʹs claim that the
district court ʺmerged Step One with Step Twoʺ in denying the motion to reduce
his sentence is therefore unavailing; the district court properly recognized that
Katsman had provided the government with substantial assistance, and only
then proceeded to consider whether to reduce his sentence, declining to do so in
the circumstances of this case.
As to Katsmanʹs second challenge, this Court has not yet addressed
whether a court may consider the 18 U.S.C. § 3553(a) factors in determining the
extent, if any, of a sentence reduction pursuant to a Rule 35(b) motion. Nothing
in the text of the rule, however, precludes the court from considering factors in
addition to a defendantʹs substantial assistance in deciding whether to reduce a
sentence, and, if so, to what extent. See Fed. R. Crim. P. 35(b)(1) (ʺ[T]he court may
reduce a sentence if the defendant . . . provided substantial assistance.ʺ). The
only limit to the courtʹs discretion under Rule 35(b) is the requirement that the
defendant provide ʺsubstantial assistanceʺ if he is to receive any benefit for his
cooperation. Id. (emphasis added).
Furthermore, we are not persuaded by Katsmanʹs claim that any
determination as to the extent of a reduction, if any, should be based solely on
the fact that the defendant provided the government with substantial assistance.
The use of ʺmayʺ in Rule 35 implies discretion, and discretion can best be
exercised by considering the various sentencing factors. Moreover, Section
3553(a) requires that courts ʺimpose a sentence sufficient, but not greater than
necessary,ʺ and that they consider the statutory factors ʺin determining the
particular sentence to be imposed.ʺ 18 U.S.C. § 3553(a). Section 3553(a) does not
limit the consideration of those factors to the original sentencing decision, nor
does it prohibit courts from considering them during a resentencing proceeding.
See Park, 533 F. Supp. 2d at 477.
Indeed, to read Rule 35(b) as requiring the court to resentence a
defendant, considering only substantial assistance in isolation from other factors,
ʺleaves too little discretion for the court to exerciseʺ in determining whether a
reduced sentence is warranted or prudent under the circumstances. United States
v. Manella, 86 F.3d 201, 204‐05 (11th Cir. 1996). A defendantʹs circumstances may
change post‐sentencing in such a way as to have a bearing on the
appropriateness of his sentence. A deterioration in a defendantʹs health, for
example, may weigh in favor of a greater reduction, see, e.g., Park, 533 F. Supp. 2d
at 476‐77, while additional criminal behavior, for example, would weigh in favor
of a smaller reduction. We are therefore not persuaded that the district court
erred in considering the § 3553(a) factors in step two in deciding whether to
reduce Katsmanʹs sentence in light of his cooperation.
Accordingly, we agree that the district court applied the proper two‐
step test in evaluating the Rule 35(b) motion and did not err in considering the
§ 3553(a) factors in concluding that Katsmanʹs original sentence should stand.
We have considered Katsmanʹs remaining arguments and find them
to be without merit. Accordingly, we AFFIRM the district courtʹs order.