20-1620 United States v. Kershner
UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
SUMMARY ORDER
Rulings by summary order do not have precedential effect. Citation to a summary order filed on or after January 1, 2007, is permitted and is governed by Federal Rule of Appellate Procedure 32.1 and this court’s Local Rule 32.1.1. When citing a summary order in a document filed with this court, a party must cite either the Federal Appendix or an electronic database (with the notation “summary order”). A party citing a summary order must serve a copy of it on any party not represented by counsel.
At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 29th day of October, two thousand twenty-one.
PRESENT: Dennis Jacobs, Steven J. Menashi, Circuit Judges Lewis J. Liman, District Judge. * ____________________________________________
UNITED STATES OF AMERICA,
Appellee,
v. No. 20-1620-cr
GARY KERSHNER,
Defendant-Appellant, SANDY WINICK, also known as JERRY
*Judge Lewis J. Liman of the United States District Court for the Southern District of New York, sitting by designation. SARRANO, also known as JOHN PETER SMITH, also known as ABDIEL VERGARA, also known as ROBIN CHEER, also known as GLEN FORMAN, also known as KYLE BENDFORD, also known as STEPHEN THOMPSON, GREGORY CURRY, KOLT CURRY, also known as MICHAEL EAST, GREGORY ELLIS, JOSEPH MANFREDONIA, also known as MAURIZIO, Defendants. †
____________________________________________
For Plaintiff-Appellant: ROBERT POLLACK, Assistant United States Attorney (David C. James, Mark E Bini, Assistant United States Attorneys, on the brief), for Breon S. Peace, United States Attorney, Eastern District of New York, Brooklyn, New York
For Defendant-Appellant: SYDNEY SPINNER (Steve Zissou, on the brief), Steve Zissou & Associates, Bayside, New York
Appeal from a judgment of conviction by the United States District Court
for the Eastern District of New York (Vitaliano, J.).
† The Clerk of Court is directed to amend the caption as set forth above.
2 Upon due consideration, it is hereby ORDERED, ADJUDGED, and
DECREED that the grant of summary judgment by the district court is
AFFIRMED.
Defendant-Appellant Gary Kershner appeals the judgment of conviction
entered by the district court on May 6, 2020. Kershner was convicted of five counts
of wire fraud and securities fraud and two counts of providing false statements to
the FBI. Kershner was found guilty of participating in a “pump and dump” stock
trading scheme in which he artificially inflated the value of penny stocks to be sold
later at a profit. He was sentenced to concurrent terms of thirty months in prison
on each count, a special assessment of $600, restitution in the amount of
$873,473.06, and two years of supervised release.
On appeal, Kershner argues that (1) his counsel was constitutionally
ineffective, (2) his counts of providing false statements to the FBI were improperly
joined with other charges in the indictment, and (3) he was denied a fair trial by
the admission of improper evidence. We assume the parties’ familiarity with the
underlying facts, the procedural history of the case, and the issues on appeal.
3 I
The record does not support the conclusion that Kershner’s counsel was
constitutionally deficient. Under Strickland v. Washington, 466 U.S. 668 (1984), and
its progeny, a criminal defendant must clear two bars to establish ineffective
assistance of counsel. First, the defendant must establish deficient performance by
showing that, “in light of all the circumstances, the acts or omissions of trial
counsel were outside the wide range of professionally competent assistance.”
United States v. Nolan, 956 F.3d 71, 79 (2d Cir. 2020). Second, the defendant must
establish prejudice by showing that there was “a reasonable probability that, but
for counsel’s unprofessional errors, the result of the proceeding would have been
different.” Id.
Kershner cannot meet either bar. First, his attorney’s representation did not
fall below an objective standard of reasonableness. Decisions about which
witnesses to call are typically matters of attorney strategy, and the defendant
therefore “must overcome the presumption that, under the circumstances, the
challenged action might be considered sound trial strategy.” Strickland, 466 U.S. at
689. Kershner does not overcome that presumption here. He speculates that
witnesses his trial counsel declined to call would have offered testimony helpful
4 to his case, but—as the district court properly determined in denying Kershner’s
motion for a new trial—he has not shown that those witnesses would necessarily
have done so or that the witnesses would not have incriminated him further in
cross-examination. Under these circumstances, Kershner has not established that
his attorney’s representation was unreasonable. 1
Second, even if Kershner could show that his attorney’s representation was
deficient, he cannot demonstrate that the representation prejudiced him. The
evidence against Kershner was substantial and included hours of recorded
telephone calls with co-conspirators and testimony by two cooperating witnesses.
The jury heard Kershner in recorded conversations describing his fraudulent
activities—such as forging signatures, creating fraudulent documents, and issuing
false press releases—that furthered the pump-and-dump scheme. Given this
1 Similarly, Kershner’s allegations that his attorney did not adequately prepare for trial are insufficient to establish ineffective assistance. Kershner acknowledges that his attorney met with him before trial but claims that the attorney failed to investigate exculpatory witnesses due to cost, and he objects that if his attorney had met with him more, he might have known to call certain witnesses or might have more aggressively cross-examined the government’s case. But Kershner provides no support for his claim that counsel chose not to act due to cost, and as the district court noted, this argument is highly speculative. By Kershner’s own admission, this was a “complex case.” Appellant’s Br. at 17. The attorney might have decided to spend more time with the evidence or otherwise directed efforts and funds toward a different strategy than Kershner now advocates in retrospect.
5 evidence, Kershner cannot establish that his trial attorney’s conduct altered the
outcome of his case.
Indeed, as the district court noted, even assuming Kershner is correct about
the testimony that other witnesses would have offered, such testimony would not
be exculpatory. Kershner argues that witnesses would have testified that the
relevant companies were legitimate businesses. But, as the district court explained,
“evidence of a bona fide business enterprise” is not “incompatible with a finding of
fraud” with respect to “Kershner's role in the charged misrepresentations in the
trading in securities of these companies.” Gov’t App’x 31-32.
II
Kershner argues on appeal that his counts were improperly joined. But he
did not raise the issue of misjoinder or move for severance in the district court.
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20-1620 United States v. Kershner
UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
SUMMARY ORDER
Rulings by summary order do not have precedential effect. Citation to a summary order filed on or after January 1, 2007, is permitted and is governed by Federal Rule of Appellate Procedure 32.1 and this court’s Local Rule 32.1.1. When citing a summary order in a document filed with this court, a party must cite either the Federal Appendix or an electronic database (with the notation “summary order”). A party citing a summary order must serve a copy of it on any party not represented by counsel.
At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 29th day of October, two thousand twenty-one.
PRESENT: Dennis Jacobs, Steven J. Menashi, Circuit Judges Lewis J. Liman, District Judge. * ____________________________________________
UNITED STATES OF AMERICA,
Appellee,
v. No. 20-1620-cr
GARY KERSHNER,
Defendant-Appellant, SANDY WINICK, also known as JERRY
*Judge Lewis J. Liman of the United States District Court for the Southern District of New York, sitting by designation. SARRANO, also known as JOHN PETER SMITH, also known as ABDIEL VERGARA, also known as ROBIN CHEER, also known as GLEN FORMAN, also known as KYLE BENDFORD, also known as STEPHEN THOMPSON, GREGORY CURRY, KOLT CURRY, also known as MICHAEL EAST, GREGORY ELLIS, JOSEPH MANFREDONIA, also known as MAURIZIO, Defendants. †
____________________________________________
For Plaintiff-Appellant: ROBERT POLLACK, Assistant United States Attorney (David C. James, Mark E Bini, Assistant United States Attorneys, on the brief), for Breon S. Peace, United States Attorney, Eastern District of New York, Brooklyn, New York
For Defendant-Appellant: SYDNEY SPINNER (Steve Zissou, on the brief), Steve Zissou & Associates, Bayside, New York
Appeal from a judgment of conviction by the United States District Court
for the Eastern District of New York (Vitaliano, J.).
† The Clerk of Court is directed to amend the caption as set forth above.
2 Upon due consideration, it is hereby ORDERED, ADJUDGED, and
DECREED that the grant of summary judgment by the district court is
AFFIRMED.
Defendant-Appellant Gary Kershner appeals the judgment of conviction
entered by the district court on May 6, 2020. Kershner was convicted of five counts
of wire fraud and securities fraud and two counts of providing false statements to
the FBI. Kershner was found guilty of participating in a “pump and dump” stock
trading scheme in which he artificially inflated the value of penny stocks to be sold
later at a profit. He was sentenced to concurrent terms of thirty months in prison
on each count, a special assessment of $600, restitution in the amount of
$873,473.06, and two years of supervised release.
On appeal, Kershner argues that (1) his counsel was constitutionally
ineffective, (2) his counts of providing false statements to the FBI were improperly
joined with other charges in the indictment, and (3) he was denied a fair trial by
the admission of improper evidence. We assume the parties’ familiarity with the
underlying facts, the procedural history of the case, and the issues on appeal.
3 I
The record does not support the conclusion that Kershner’s counsel was
constitutionally deficient. Under Strickland v. Washington, 466 U.S. 668 (1984), and
its progeny, a criminal defendant must clear two bars to establish ineffective
assistance of counsel. First, the defendant must establish deficient performance by
showing that, “in light of all the circumstances, the acts or omissions of trial
counsel were outside the wide range of professionally competent assistance.”
United States v. Nolan, 956 F.3d 71, 79 (2d Cir. 2020). Second, the defendant must
establish prejudice by showing that there was “a reasonable probability that, but
for counsel’s unprofessional errors, the result of the proceeding would have been
different.” Id.
Kershner cannot meet either bar. First, his attorney’s representation did not
fall below an objective standard of reasonableness. Decisions about which
witnesses to call are typically matters of attorney strategy, and the defendant
therefore “must overcome the presumption that, under the circumstances, the
challenged action might be considered sound trial strategy.” Strickland, 466 U.S. at
689. Kershner does not overcome that presumption here. He speculates that
witnesses his trial counsel declined to call would have offered testimony helpful
4 to his case, but—as the district court properly determined in denying Kershner’s
motion for a new trial—he has not shown that those witnesses would necessarily
have done so or that the witnesses would not have incriminated him further in
cross-examination. Under these circumstances, Kershner has not established that
his attorney’s representation was unreasonable. 1
Second, even if Kershner could show that his attorney’s representation was
deficient, he cannot demonstrate that the representation prejudiced him. The
evidence against Kershner was substantial and included hours of recorded
telephone calls with co-conspirators and testimony by two cooperating witnesses.
The jury heard Kershner in recorded conversations describing his fraudulent
activities—such as forging signatures, creating fraudulent documents, and issuing
false press releases—that furthered the pump-and-dump scheme. Given this
1 Similarly, Kershner’s allegations that his attorney did not adequately prepare for trial are insufficient to establish ineffective assistance. Kershner acknowledges that his attorney met with him before trial but claims that the attorney failed to investigate exculpatory witnesses due to cost, and he objects that if his attorney had met with him more, he might have known to call certain witnesses or might have more aggressively cross-examined the government’s case. But Kershner provides no support for his claim that counsel chose not to act due to cost, and as the district court noted, this argument is highly speculative. By Kershner’s own admission, this was a “complex case.” Appellant’s Br. at 17. The attorney might have decided to spend more time with the evidence or otherwise directed efforts and funds toward a different strategy than Kershner now advocates in retrospect.
5 evidence, Kershner cannot establish that his trial attorney’s conduct altered the
outcome of his case.
Indeed, as the district court noted, even assuming Kershner is correct about
the testimony that other witnesses would have offered, such testimony would not
be exculpatory. Kershner argues that witnesses would have testified that the
relevant companies were legitimate businesses. But, as the district court explained,
“evidence of a bona fide business enterprise” is not “incompatible with a finding of
fraud” with respect to “Kershner's role in the charged misrepresentations in the
trading in securities of these companies.” Gov’t App’x 31-32.
II
Kershner argues on appeal that his counts were improperly joined. But he
did not raise the issue of misjoinder or move for severance in the district court.
Even after he was represented by new counsel, Kershner did not argue that the
failure to raise the issue should be excused for “good cause.” Fed. R. Crim. P.
12(c)(3). Accordingly, his claim of improper joinder is waived. Even if it were not,
Kershner’s false statements to the FBI, made to cover up the pump-and-dump
scheme, were also “connected with or constitute[d] parts of a common scheme or
6 plan” or were part of “the same series of acts or transactions” as the underlying
fraud, and joinder was warranted. See generally Fed. R. Crim. P. 8.
Kershner’s claim of retroactive misjoinder is meritless. As our court has
explained, “‘Retroactive misjoinder’ arises where joinder of multiple counts was
proper initially, but later developments—such as a district court’s dismissal of
some counts for lack of evidence—render the initial joinder improper.” United
States v. Jones, 16 F.3d 487, 493 (2d Cir. 1994). In this case, no such developments
occurred.
III
Kershner argues that the district court abused its discretion by improperly
admitting evidence. In United States v. Winick—an appeal from the trial of
Kershner’s co-conspirator—our court held that the admission of testimony
regarding his co-conspirator’s role in the scheme and the structure of one of the
companies involved in the scheme was improper. 792 F. App’x 91, 93 (2d Cir.
2019). But our court concluded that the erroneous admission of that testimony was
harmless, given the substantial evidence of the co-conspirator’s guilt. Id. at 94. The
evidence was also harmless with respect to Kershner. The government “offered
substantial admissible evidence” supporting Kershner’s conviction. Id. at 95. Some
7 of the improper testimony—concerning the operations of Moneyline Brokers—
was not even relevant to Kershner. We conclude again that the “inadmissible
portions” of testimony were “cumulative of other properly admitted evidence,”
id., and it is “highly probable that the error did not affect the verdict,” United States
v. Dukagjini, 326 F.3d 45, 61 (2d Cir. 2003) (internal quotation marks omitted).
* * *
We have considered Kershner’s remaining arguments, which we conclude
are without merit. For the foregoing reasons, we AFFIRM the judgment of the
district court.
FOR THE COURT: Catherine O’Hagan Wolfe, Clerk of Court