United States v. Zafar

291 F. App'x 425
CourtCourt of Appeals for the Second Circuit
DecidedSeptember 4, 2008
DocketNo. 07-4345-cr
StatusPublished
Cited by3 cases

This text of 291 F. App'x 425 (United States v. Zafar) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Zafar, 291 F. App'x 425 (2d Cir. 2008).

Opinion

SUMMARY ORDER

Defendant Faisal Zafar was convicted after jury trial of one conspiracy count and fifteen substantive counts of securities fraud. See 18 U.S.C. §§ 1348, 1349. Sentenced to concurrent terms of 57 months’ incarceration, five years of supervised release, $85,082.09 in restitution, and a $1,600 special assessment, Zafar challenges his conviction on grounds that the district court erred (1) at trial in limiting the testimony of defendant’s computer expert, and (2) at sentence in (a) applying a two-level enhancement to Zafar’s Guidelines calculation for “mass-marketing” pursuant to U.S.S.G. § 2Bl.l(b)(2)(A), (b) calculating loss pursuant to U.S.S.G. § 2Bl.l(b)(l) by reference to defendant’s trading gains, and (c) awarding restitution [427]*427pursuant to 18 U.S.C. § 3663A(a)(l) without consideration of victims’ contributory negligence. We assume the parties’ familiarity with the facts and the record of prior proceedings, which we reference only as necessary to explain our decision.

1. Trial Error

To the extent Zafar submits that the district court erred in limiting the testimony of his computer expert, Patrick O’Leary, he carries a heavy burden because, in this area, we accord trial judges considerable deference, and we will not reverse their rulings absent abuse of discretion. See United States v. Thompson, 528 F.3d 110, 120 (2d Cir.2008); United States v. Lombardozzi, 491 F.3d 61, 77 (2d Cir.2007) (holding that rulings regarding expert testimony will be set aside only if “manifestly erroneous”). We identify no such abuse in this case.

The district court precluded O’Leary from testifying about his ability to access Zafar’s computer network from outside his home because no evidence was adduced showing that the configuration of the network accessed by O’Leary was identical to the one Zafar used at the time of the charged crimes. The district court’s conclusion that, without that “critical missing link,” O’Leary’s testimony was irrelevant fell well within its discretion. See Fed. R.Evid. 403; see also Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 595, 113 S. Ct. 2786, 125 L.Ed.2d 469 (1993) (noting that, in conducting Rule 403 assessment, trial judge “exercises more control over experts than over lay witnesses” (citation and internal quotation marks omitted)).1

Similarly, the district court reasonably precluded O’Leary from demonstrating how certain stock-selection software worked in the absence of evidence indicating that defendant had, in fact, used the software for stock trading at the time of the charged crimes. See Daubert v. Merrell Dow Pharm., Inc., 509 U.S. at 595, 113 S.Ct. 2786. The mere presence of the software on Zafar’s computer and defendant’s post-arrest acknowledgment of general use did not compel a different conclusion. As the district court observed, defense counsel’s own proffer of this evidence indicated that its purpose was not to show the jury how the software worked but to insinuate what had happened with respect to the relevant stock trades, a subject on which O’Leary was not a competent witness.

Accordingly, we conclude that no trial error warrants reversal of Zafar’s conviction.

2. Sentencing Error

In the aftermath of United States v. Booker, we review sentences for “reasonableness,” 543 U.S. 220, 262, 125 S.Ct. 738, 160 L.Ed.2d 621 (2005), “a deferential standard limited to identifying abuse of discretion,” which proceeds in two steps: procedural and substantive. United States v. Jones, 531 F.3d 163, 170 (2d Cir.2008) (citing Gall v. United States, - U.S. -, 128 S.Ct. 586, 591, 169 L.Ed.2d 445 (2007)). On this appeal, our focus is procedural because Zafar claims that the district court erred in calculating his Guidelines sentencing range and statutory restitution obligation. See Gall v. United States, 128 S.Ct. at 597; United States v. Guang, 511 F.3d 110, 126 (2d Cir.2007). We review the district court’s factual findings on these [428]*428matters for clear error and its interpretations of law, including the Guidelines, de novo. See United States v. Fuller, 426 F.3d 556, 562 (2d Cir.2005).

a. Mass-Marketing Enhancement

Zafar submits that the district court erred in employing a “mass-marketing” enhancement in calculating his Guidelines, see U.S.S.G. § 2Bl.l(b)(2)(A), because his internet activities did not amount to “solicitation,” id. cmt. 4(A) (defining mass-marketing as “a plan, program, promotion, or campaign that is conducted through solicitation by telephone, mail, the Internet, or other means to induce a large number of persons to (i) purchase goods or services; (ii) participate in a contest or sweepstakes; or (iii) invest for financial profit”). Zafar asserts that to engage in solicitation a defendant must offer to sell something himself. This construction is flawed in several respects.

First, as the quoted commentary indicates, solicitations can reach beyond proffered sales to include inducements to participate in contests, sweepstakes, or financial investments. Even as to sales, nothing in the commentary requires the solicitor himself to be the seller of the proffered good or service for his pitch to constitute a solicitation.

Second, the common meaning of the word “solicit” is not limited to sales. Nor does it require that the solicitor be importuning something for himself directly. Rather, the word sweeps broadly to reach any conduct that petitions, urges, entices, or moves another to action, see Black’s Law Dictionary 1427 (8th ed.1999); Webster’s Third International Dictionary Unabridged 2169 (3d ed.1986). See generally United States v. Reaves, 253 F.3d 1201, 1204 (10th Cir.2001) (noting broad common meaning of solicit in declining to construe the term narrowly in U.S.S.G. § 2G2.1(b)(3) (addressing use of computer to “solicit” minor’s participation in sexually explicit conduct)).

Third, defendant’s conduct comfortably fits within this broad definition of solicitation because his internet messages did more than report materially false information about the stocks he schemed to pump and dump. One message specifically urged readers to “buy buy buy” the touted stock.

Fourth, the fact that Zafar was urging the purchase of touted stock in the open market rather than offering it for sale himself does not absolve him of solicitation. Indeed, the “pump” component of his fraud scheme depended on Zafar’s ability to induce a large number of persons to invest in particular publicly traded stocks.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

United States v. Butler
264 F.R.D. 37 (E.D. New York, 2010)

Cite This Page — Counsel Stack

Bluebook (online)
291 F. App'x 425, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-zafar-ca2-2008.