United States v. Maharaj

• Court: Court of Appeals for the Second Circuit
• Decided: April 25, 2025
• Docket: 22-171
• Status: Unpublished

Opinion

22-171 United States v. Maharaj

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 25th day of April, two thousand twenty-five.

Present: JOHN M. WALKER, JR., MICHAEL H. PARK, STEVEN J. MENASHI, Circuit Judges. __________________________________________

UNITED STATES OF AMERICA,

Appellee,

v. 22-171

SHIVANAND MAHARAJ.

Defendant-Appellant,

ENRICO RUBANO, AKA RICK RUBANO,

Defendant. __________________________________________

FOR APPELLEE: MATTHEW D. PODOLSKY, Michael D. Maimin, Assistant United States Attorneys, for Danielle R. Sassoon, Acting United States Attorney for the Southern District of New York, New York, NY. FOR DEFENDANT-APPELLANT: JAMESA J. DRAKE, Drake Law LLC, Auburn, ME. Appeal from a judgment of the United States District Court for the Southern District of

New York (Koeltl, J.).

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND

DECREED that the judgment of the district court is AFFIRMED.

On July 11, 2019, a superseding indictment was filed charging Shivanand Maharaj with

four counts in connection with his false-invoicing scheme targeting the American Federation of

Television and Radio Artists (“AFTRA”) Retirement Fund and the Screen Actors Guild and

American Federation of Television and Radio Artists (“SAG-AFTRA”) Health & Retirement

Funds (together, the “Funds”). Count One charged Maharaj with participating in a conspiracy to

commit honest services wire fraud, in violation of 18 U.S.C. § 1349. Count Two charged

Maharaj with honest services wire fraud, in violation of 18 U.S.C. §§ 1343, 1346, and 2. Count

Three charged Maharaj with participating in a conspiracy to give and offer kickbacks because of

and to influence the operation of an employee benefit plan, in violation of 18 U.S.C. § 371. Count

Four charged Maharaj with giving and offering kickbacks because of and to influence the operation

of an employee benefit plan, in violation of 18 U.S.C. §§ 1954 and 2.

On July 29, 2019, after a two-week trial, a jury found Maharaj guilty on all four counts.

On January 12, 2022, the district court sentenced Maharaj to 44 months’ imprisonment, to be

followed by three years’ supervised release. The district court also imposed a mandatory special

assessment of $400, $1,846,665 in forfeiture, and $1,932,920.06 in restitution. Maharaj is

currently serving his term of supervised release.

On appeal, Maharaj makes two primary arguments. First, he contends that the district

court abused its discretion in allowing Zeynep Ekemen’s testimony about Maharaj’s prior

2 kickback scheme with Enrico Rubano. Second, Maharaj argues that Wharton’s Rule bars

punishment for his honest-services wire fraud conspiracy conviction. We assume the parties’

familiarity with the underlying facts, procedural history of the case, and issues on appeal.

I. Ekemen’s Testimony at Trial

Maharaj argues that the district court erred when it overruled his objection to Ekemen’s

testimony about Maharaj’s kickback scheme because it had little probative value and was unduly

prejudicial. “We review a trial court’s evidentiary rulings deferentially, and we will reverse only

for abuse of discretion,” which requires a determination “that the challenged evidentiary rulings

were arbitrary and irrational.” United States v. Quinones, 511 F.3d 289, 307-08 (2d Cir. 2007)

(internal quotation marks omitted). An evidentiary error is “harmless if we can conclude with

fair assurance that the jury’s judgment was not substantially swayed by the error.” United

States v. Paulino, 445 F.3d 211, 219 (2d Cir. 2006) (internal quotation marks omitted).

“Evidence is relevant if: (a) it has any tendency to make a fact more or less probable than

it would be without the evidence; and (b) the fact is of consequence in determining the action.”

Fed. R. Evid. 401. Relevant evidence may be excluded “if its probative value is substantially

outweighed by a danger of . . . unfair prejudice, confusing the issues, misleading the jury, undue

delay, wasting time, or needlessly presenting cumulative evidence.” Fed. R. Evid. 403. “The

term ‘unfair prejudice,’ as to a criminal defendant, speaks to the capacity of some concededly

relevant evidence to lure the factfinder into declaring guilt on a ground different from proof

specific to the offense charged.” Old Chief v. United States, 519 U.S. 172, 180 (1997); see also

United States v. Lyle, 919 F.3d 716, 737 (2d Cir. 2019) (holding that the probative value of certain

evidence “was not substantially outweighed by the risk of unfair prejudice as it did not involve

3 conduct any more sensational or disturbing than the crimes with which [the defendant] was

charged”) (cleaned up)).

The district court did not abuse its discretion in allowing Ekemen’s testimony. First, the

testimony was probative. Ekemen explained that she asked Maharaj to tell her “how long he

ha[d] been doing this with” Rubano, and Maharaj responded that “his first deal with [Rubano] was

back in college.” App’x at 45. Maharaj shared the basics of the IT-invoicing/kickback scheme

with Ekemen, and told her that the fruits of his scheme with Rubano had allowed him to afford a

“convertible sports car.” Id. at 48.

It is well-established that “statements between conspirators which provide reassurance,

serve to maintain trust and cohesiveness among them, or inform each other of the current status of

the conspiracy, further the ends of a conspiracy.” United States v. Simmons, 923 F.2d 934, 945

(2d Cir. 1991) (cleaned up). Maharaj’s statements fit that description. As the district court

noted, Maharaj made these statements “in order to encourage participation with the defendant in

the alleged unlawful conduct.” App’x at 44. The testimony thus helped the jury to understand

the formation of the conspiracy, how Maharaj and Rubano came up with the scheme, why they

trusted one another, and how Ekemen was induced to continue participating in the conspiracy.

See United States v. Roldan-Zapata, 916 F.2d 795, 804 (2d Cir. 1990) (holding that evidence of a

“pre-existing drug-trafficking relationship” between co-conspirators was admissible because it

“furthered the jury’s understanding of how the instant transaction came about and their role in it”).

Second, the probative value of the testimony was not substantially outweighed by a danger

of unfair prejudice. Ekemen testified that she had “asked [Maharaj] how long he has been doing

this” with his co-conspirator because she “was curious how long he had been involved.” App’x

4 45. She said that Maharaj had described a prior scheme which was so successful that it was the

only way he was able to afford his car in college. Id. at 47. Maharaj’s conduct in college was

remote in time from the charged conspiracy and did not involve the Funds at issue in the charged

offenses. It also did not “involve conduct any more sensational or disturbing than the crimes with

which [Maharaj] was charged.” Lyle, 919 F.3d at 737 (internal quotations marks omitted). The

district court’s decision to admit the evidence was not “arbitrary and irrational,” and it was not an

abuse of discretion. Quinones, 511 F.3d at 308 (internal quotation marks omitted).

II. Wharton’s Rule

Maharaj argues that his conviction for conspiracy to commit honest services wire fraud

violates Wharton’s Rule. Maharaj concedes that he did not raise this argument in the district

court, so we review for plain error. See, e.g., United States v. Miller, 954 F.3d 551, 557 (2d Cir.

2020). To establish plain error, a defendant must demonstrate that: “(1) there is an error; (2) the

error is clear or obvious, rather than subject to reasonable dispute; (3) the error affected the

appellant’s substantial rights, which in the ordinary case means it affected the outcome of the

district court proceedings; and (4) the error seriously affects the fairness, integrity or public

reputation of judicial proceedings.” United States v. Marcus, 560 U.S. 258, 262 (2010) (cleaned

up).

“It has been long and consistently recognized by the [Supreme] Court that the commission

of the substantive offense and a conspiracy to commit it are separate and distinct offenses,” and

“[t]he power of Congress to separate the two and to affix to each a different penalty is well

established.” Pinkerton v. United States, 328 U.S. 640, 643 (1946). At the same time, the

Supreme Court has recognized “Wharton’s Rule, a doctrine of criminal law enunciating an

5 exception to [that] general principle.” Iannelli v. United States, 420 U.S. 770, 771 (1975).

Wharton’s Rule—under certain conditions and “absent legislative intent to the contrary”—

“supports a presumption that the [conspiracy and substantive offense] merge when the substantive

offense is proved.” Id. at 785-86.

“The classic Wharton’s Rule offenses—adultery, incest, bigamy, duelling—are crimes that

are characterized by the general congruence of the agreement and the completed substantive

offense.” Id. at 782. Wharton’s Rule originates from the common law principle that “where

concert is a constituent part of the act to be done, as it is in fornication and adultery, a party

acquitted of the major cannot be indicted of the minor.” Shannon v. Commonwealth, 14 Pa. 226,

227-28 (1850). For such offenses, a “plurality of agents is logically necessary,” so a separate

offense of conspiracy, “which assumes the voluntary accession of a person to a crime of such a

character that it is aggravated by a plurality of agents, cannot be maintained.” 2 Francis Wharton,

A Treatise on the Criminal Law of the United States § 2289, at 634 (7th ed. 1874) (emphasis

added).

For Wharton’s Rule to apply, (1) the offense must “require concerted criminal activity, a

plurality of criminal agents”; (2) “[t]he parties to the agreement [must be] the only persons who

participate in commission of the substantive offense”; (3) “the immediate consequences of the

crime [must] rest on the parties themselves rather than on society at large”; and (4) “the agreement

that attends the substantive offense [must] not appear likely to pose the distinct kinds of threats to

society that the law of conspiracy seeks to avert,” such that it “cannot . . . readily be assumed that

an agreement to commit an offense of this nature will produce agreements to engage in a more

general pattern of criminal conduct.” Iannelli, 420 U.S. at 782–84, 785.

6 There is no error here because Maharaj fails to establish any of these requirements. First,

honest services wire fraud does not “require . . . a plurality of criminal agents.” Iannelli, 420

U.S. at 785. In United States v. Silver, we held that a defendant was “incorrect in arguing that

honest services fraud requires evidence of a meeting of the minds.” 948 F.3d 538, 552 (2d Cir.

2020). In other words, an individual can engage in a scheme to deprive a victim of his right to

honest services without engaging in a conspiracy. Second, Wharton’s Rule does not apply here

because Maharaj’s scheme involved not only Rubano but also Ekemen. See, e.g., Iannelli, 420

U.S. at 782 n.15 (“For example, while the two persons who commit adultery cannot normally be

prosecuted both for that offense and for conspiracy to commit it, the third-party exception would

permit the conspiracy charge where a ‘matchmaker’—the third party—had conspired with the

principals to encourage commission of the substantive offense.”). Third, the “immediate

consequences” of Maharaj’s scheme rested not on him and his coconspirators, but on “society at

large,” as Maharaj and his coconspirators stole millions of dollars from the Funds and their

members. Id. at 782-83.

Moreover, even if there were an error, it would not be one that is “obvious, rather than

subject to reasonable dispute.” Marcus, 560 U.S. at 262 (internal quotation marks omitted).

“For an error to be plain, it must, at a minimum, be clear under current law, which means that we

typically will not find such error where the operative legal question is unsettled, including where

there is no binding precedent from the Supreme Court or this Court.” United States v. Napout,

963 F.3d 163, 183 (2d Cir. 2020) (cleaned up). Maharaj fails to identify any binding precedent

holding that convictions for honest services wire fraud and conspiracy to commit honest services

wire fraud violate Wharton’s Rule. Nor is this “the ‘rare case’ where the error was ‘so egregious

7 and obvious as to make the trial judge and prosecutor derelict in permitting it, despite the

defendant’s failure to object.’” United States v. Esteras, 102 F.4th 98, 108 (2d Cir. 2024)

(quoting United States v. Whab, 355 F.3d 155, 158 (2d Cir. 2004)). So he cannot satisfy his

burden on plain-error review.

* * *

We have considered the remainder of Maharaj’s arguments and find them to be without

merit. For the foregoing reasons, we AFFIRM the judgment of the district court.

FOR THE COURT: Catherine O’Hagan Wolfe, Clerk of Court