United States v. Pasternak

• Court: Court of Appeals for the Second Circuit
• Decided: November 13, 2024
• Docket: 23-6316
• Status: Unpublished

Opinion

23-6316-cr United States v. Pasternak

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 TO 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 13th day of November, two thousand twenty-four.

PRESENT: BARRINGTON D. PARKER, BETH ROBINSON, Circuit Judges, VERNON D. OLIVER, District Judge. ∗ _________________________________________

UNITED STATES OF AMERICA,

Appellee,

v. No. 23-6316-cr

TAMAZ PASTERNAK, AKA TOMAS PASTERNAK, AKA THOMAS PASTERNAK,

Defendant-Appellant,

∗ Judge Vernon D. Oliver of the United States District Court for the District of Connecticut sitting by designation. INNA CHEBANENKO, ANDRII GERASYMENKO, GEORGY ZAKALYUGIN, AKA GEORGE ZAKALYUGIN,

Defendants. † _________________________________________

FOR APPELLEE: JONATHAN SIEGEL, Assistant United States Attorney (Jo Ann Navickas, Assistant United States Attorney, on the brief), for Breon Peace, United States Attorney for the Eastern District of New York, Brooklyn, NY.

FOR APPELLANT: DANIEL HABIB, Federal Defenders of New York, Inc., Appeals Bureau, New York, NY.

Appeal from a judgment of the United States District Court for the Eastern

District of New York (Vitaliano, Judge).

UPON DUE CONSIDERATION WHEREOF, IT IS HEREBY ORDERED,

ADJUDGED, AND DECREED that the judgment of the District Court is

AFFIRMED.

Defendant-Appellant Tamaz Pasternak appeals from a judgment of

conviction in the United States District Court for the Eastern District of New York

after a jury trial at which he was convicted of one count of conspiracy to commit

† The clerk’s office is directed to amend the caption as reflected above.

2 wire fraud, in violation of 18 U.S.C. § 1349, and three counts of wire fraud, in

violation of 18 U.S.C. § 1343.

This case centers around schemes to defraud used car buyers by hiding

those cars’ “salvage” histories. A car receives a salvage designation after an

insurance company buys it from the insured owner to settle a loss claim for the

vehicle—usually when the vehicle has been damaged. A salvage designation is

usually conspicuously branded on the car’s title. This is important because in

many states, including New York, salvage cars cannot be registered to drive.

But a salvage car can be registered to drive in New York if it receives a

“rebuilt” designation. In New York, that requires an in-person assessment at a

salvage examination site, to make sure that the car wasn’t rebuilt with stolen parts.

By contrast, Indiana does not require that a salvage car be brought to an

examination site; instead, the rebuilt title applicant can submit a certificate that a

law enforcement officer has physically inspected and approved the vehicle. See

Ind. Code § 9-22-3-15(a)(1).

Here, Pasternak’s convictions were based on evidence that he engaged in

two different schemes to conceal the salvage histories of cars he bought and sold.

First, in the “Indiana Title Scheme”—the basis for the conspiracy count—the

3 government adduced evidence that Pasternak mailed money and salvage titles to

co-conspirators, who returned Indiana rebuilt titles that were procured by

fabricating law enforcement inspection certificates.

Second, in the “Title Altering Scheme”—the basis for the substantive wire

fraud counts—trial evidence established that Pasternak physically altered the

“salvage” or “rebuilt” brands on the titles of cars he sold to customers. By covering

a brand with a sticker or scratching it off, Pasternak made it look like the cars had

clean titles. He also posted Craigslist ads for cars he said had clean titles; in reality,

those cars were salvage vehicles. Victims also testified that Pasternak

misrepresented the salvage histories of cars they ultimately bought.

On appeal, Pasternak challenges the district court’s jury instructions, certain

evidentiary rulings, and the calculation of his sentence. We address each

argument in turn. We assume the parties’ familiarity with the underlying facts,

procedural history, and the issues on appeal.

I. Jury Instructions

The district court instructed the jury that to convict Pasternak of wire fraud,

the government was required to prove, among other things, “that the alleged

4 scheme contemplated depriving another of money or property.” App’x at 769.

The court further explained,

Property includes intangible interests such [as] the right to control the use of one’s assets. Therefore, a scheme contemplates [depriving] the private purchasers of property if it contemplates depriving them of potentially valuable economic information such as information about the quality and adequacy of the goods offered for sale.

App’x at 769–70. The court thus presented two alternative theories of fraud

liability: (1) Pasternak deprived victims of actual money, and (2) he deprived

victims of the right to control property by denying them potentially valuable

economic information about the vehicles they purchased.

Although the district court’s right to control instruction was consistent with

Second Circuit law when given, the parties agree that it was incorrect in light of

the United States Supreme Court’s subsequent decision in Ciminelli v. United States,

598 U.S. 306, 308 (2023). In that case, the Supreme Court held that § 1343 does not

apply to intangible property. Pasternak first argues that reversal is required

because we cannot determine whether he was convicted on a valid or invalid

theory of wire fraud.

5 In the district court, Pasternak, not anticipating this change in the law, did

not object to the district court’s right to control instruction. We accordingly review

the instruction for plain error. United States v. Capers, 20 F.4th 105, 116 (2d Cir.

2021). 1

Where, as here, disjunctive theories of culpability are submitted to a jury

that returns a general verdict of guilty, and one of the theories was legally

insufficient, a defendant’s conviction must be vacated if the defendant has shown

“a reasonable possibility” that the jury may not have convicted had it not been

instructed under the legally insufficient theory. Capers, 20 F.4th at 123. 2 Pasternak

has not made this showing.

The trial record does not suggest a reasonable possibility that the jury could

have convicted him only on the basis that he deprived them of valuable economic

information about the quality and adequacy of the goods offered for sale and not

on the basis that he fraudulently induced them to give him their money. Every

1 To succeed under plain error review, Pasternak must establish “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).

2 In quotations from caselaw and the parties’ briefing, this summary order omits all internal quotation marks, alterations, footnotes, and citations, unless otherwise noted.

6 victim who was given false information about the state of a vehicle’s title also

parted with their money to buy the vehicle.

Moreover, at trial, the government never argued to the jury that Pasternak

should be convicted based on the right-to-control theory. To the contrary, the

government’s arguments focused solely on the deprivation-of-money theory. The

government adduced overwhelming evidence that Pasternak induced customers

to buy salvage or rebuilt cars by misrepresenting the nature of the cars’ titles. For

example, the jury heard from four victims who all testified that Pasternak denied

his vehicles had fraudulent titles, that they paid money for the vehicles without

knowing the salvage histories, and that they never would have knowingly

purchased a salvage vehicle. Given the government’s overwhelming evidence on

the deprivation-of-money theory, it was highly improbable that Pasternak was

convicted solely on the legally insufficient right-to-control theory.

Separately, even assuming he was not improperly convicted on the right-to-

control theory, Pasternak contends that the deprivation-of-money jury instruction

was defective. Specifically, Pasternak argues that because he sold the salvaged

cars for what they were actually worth, the district court committed error by

7 failing to instruct the jury that it could convict only if it found beyond a reasonable

doubt that he intended to sell cars for less money than they were actually worth. 3

We are not persuaded. The “scheme to defraud” language in the wire fraud

statute “demands neither a showing of ultimate financial loss nor a showing of

intent to cause financial loss.” Shaw v. United States, 580 U.S. 63, 67 (2016) (citing

United States v. Rowe, 56 F.2d 747, 749 (2d Cir. 1932)). Rather, it is enough for the

defendant to have contemplated a scheme “to injure another to [the defendant’s]

own advantage by withholding or misrepresenting material facts.” United States

v. Regent Office Supply Co., 421 F.2d 1174, 1182 (2d Cir. 1970). Pasternak did so by

misrepresenting the titles and inspection history of the vehicles he sold.

Accordingly, we reject Pasternak’s challenges to the District Court’s jury

instructions.

II. Expert Testimony

Pasternak argues that the district court exceeded its discretion by

preventing his expert witness, from testifying as to (1) Pasternak’s knowledge (or

lack thereof) of the Indiana Title Scheme, (2) Pasternak’s intent to cause economic

3 Because Pasternak raised this argument during the charge conference, we review it without

deference to the district court. United States v. Capers, 20 F.4th 105, 116 (2d Cir. 2021).

8 harm, and (3) whether salvage examinations and safety inspections are different.

We review a district court’s decision to exclude expert testimony for excess of

discretion. See Bustamante v. KIND, LLC, 100 F.4th 419, 426–27 (2d Cir. 2024).

First, Pasternak contends that his proffered expert testimony

(1) “discuss[ing] the legal means of transferring titles across states as a form of

lawful arbitrage” and (2) “explain[ing] that not all states require in-person

examinations,” was essential to his defense that he did not know the Indiana titles

were fraudulent. Appellant’s Br. at 44.

We disagree. The district court did not preclude Pasternak from offering

expert testimony concerning the transfer of titles from state to state; it simply

limited the testimony. The district court expressly acknowledged that “[e]xpert

testimony as to how honest title could be obtained to market such vehicles as road-

ready would be helpful and admissible under Rule 702,” as long as the testimony

was “limited to the requirements of the states of Indiana, New Jersey and New

York,” the states where all of the conduct at issue occurred. App’x at 96. The court

below acted well within its broad discretion in concluding that Pasternak’s expert

could testify concerning the three states at issue but not the rest of the country.

9 Next, Pasternak asserts that his expert should have been allowed to testify

about the wide variation in the level of damage that can justify a salvage label to

support Pasternak’s contention that he did not intend economic harm to the

buyers. But as we have explained, the government did not have to prove that

Pasternak sold the victims cars for more money than they were worth.

Finally, Pasternak contends that the district court exceeded its discretion by

preventing his expert from testifying about the differences between salvage

inspections—which are designed to make sure a car’s parts haven’t been stolen—

and safety inspections—which aim to ensure a car is safe to drive. But there was

no dispute during trial that a salvage examination is distinct from a safety

inspection, and that salvage examinations are designed to address anti-theft

concerns, not safety. See, e.g., App’x at 139–40, 160–61.

In short, the district court did not exceed its broad discretion in limiting the

scope of Pasternak’s proposed expert’s testimony.

III. Guidelines Calculation

Finally, Pasternak contests the district court’s application of U.S.S.G.

§ 2B1.1(b)(1)(F), which provides for a 10-level enhancement if the court’s loss

10 calculation exceeds $150,000. 4 The court treated the total amount of money spent

by the victims of Pasternak’s scheme as loss. It based that decision, in part, on

Application Note 3(F)(v)(III) to U.S.S.G. § 2B1.1, which states that, “loss” includes

“the amount paid for the property . . . with no credit provided for the value of

those items or services.”

Pasternak contends that the district court erred by applying Application

Note 3(F)(v)(III) because § 2B1.1(b)(1)’s text unambiguously limits the

enhancement to actual net loss. We review challenges to the district court’s

interpretation of the Guidelines without deferring to the district court. United

States v. Rainford, 110 F.4th 455, 475 (2d Cir. 2024). We defer to the Guidelines

commentary unless the application note “violates the Constitution or a federal

statute, or is inconsistent with, or a plainly erroneous reading of” the relevant

4 Although Pasternak has been released from prison and is serving a supervised release term,

his challenge to the term of his carceral sentence is not moot because the possibility that the district court would, on remand, alter his term of supervised release is more than “remote and speculative.” United States v. Chestnut, 989 F.3d 222, 224 (2d Cir. 2021); see also United States v. Mazza-Alaluf, 621 F.3d 205, 213 (2d Cir. 2010). Pasternak is currently serving a two-year term of supervised release, which is above the minimum Guidelines term of 1 year per count. U.S.S.G. § 5D1.2(a)(2). See also Mazza-Alaluf, 621 F.3d at 213 (“[A]s two years’ supervised release was not the statutory minimum for the crimes of conviction, the district court could presumably lower Mazza–Alaluf’s remaining, non-custodial sentence were we to remand.”)

11 Guideline. Rainford, 110 F.4th at 475 (quoting Stinson v. United States, 508 U.S. 36,

38 (1993)).

We see no such conflict in the application note here. As we recently

explained in Rainford, “[t]he term ‘loss’ in § 2B1.1 has no one definition and can

mean different things in different contexts.” 110 F.4th at 475. So the Guideline is

not in conflict with the commentary’s explanation that “loss” includes the total

amount paid for the cars. Accordingly, we reject Pasternak’s procedural challenge

to the district court’s sentence calculation.

We have considered Pasternak’s remaining contentions and conclude that

they are without merit. For the foregoing reasons, the judgment of the District

Court is AFFIRMED.

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