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United States v. Lebedev

United States v. Lebedev

United States Court of Appeals for the Second Circuit

December 5, 2018, Argued; July 26, 2019, Decided

Nos. 17-3691-cr(L), 17-3758-cr(Con), 17-3808-cr(Con)

Opinion

 [*45]  Droney, Circuit Judge:

This is a consolidated appeal of two defendants convicted in a joint jury trial of offenses arising out of their roles in an illegal Bitcoin exchange and a scheme to use a federal credit union for illegal purposes.2 Yuri Lebedev was convicted of wire fraud in violation of 18 U.S.C. § 1343, bank fraud in violation of 18 U.S.C. § 1344, conspiracy to commit wire and bank fraud in violation of 18 U.S.C. § 1349, and making corrupt payments with the intent to influence an officer of a financial institution in violation of 18 U.S.C. § 215(a)(1). Trevon Gross was convicted of receiving [**3]  corrupt payments as an officer of a financial institution in violation of 18 U.S.C. § 215(a)(2). Both Lebedev and Gross were  [*46]  also convicted of conspiracy in violation of 18 U.S.C. § 371.

Lebedev and Gross appeal their judgments of conviction, raising various constitutional and evidentiary challenges. Gross also appeals the district court's application of several provisions of the Sentencing Guidelines in imposing his sentence and his order of restitution.

I. BACKGROUND

The evidence presented by the government at trial concerned the activities of an internet-based Bitcoin exchange service located in Florida, known as "Coin.mx." Coin.mx's customers used the exchange to purchase Bitcoins, a digital currency, with traditional currency. Although the purpose of Coin.mx was to allow the purchase and sale of Bitcoins, Coin.mx concealed that fact from the banks and credit card companies processing its transactions.3 Coin.mx opened bank accounts in the name of "the Collectables Club," which falsely purported to be a private members' association dedicated to collecting and exchanging memorabilia. Coin.mx also processed credit card transactions listing the Collectables Club as the merchant. Neither Coin.mx nor the Collectables Club [**4]  registered with federal regulators as a money-transmitting entity or obtained state licensure for that purpose.

Coin.mx employed Lebedev to manage information technology operations. One of Lebedev's responsibilities was to set up various Internet Protocol ("IP") addresses to make it appear to banks and payment processors that Coin.mx's transactions were legitimate Collectables Club transactions.

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932 F.3d 40 *; 2019 U.S. App. LEXIS 22286 **; 2019 WL 3366714

UNITED STATES OF AMERICA, Appellee, v. YURI LEBEDEV and TREVON GROSS, Defendants-Appellants, ANTHONY R. MURGIO, also known as Sealed Defendant 1, MICHAEL J. MURGIO, JOSE M. FREUNDT, and RICARDO HILL, also known as Rico, Defendants.1

Subsequent History: US Supreme Court certiorari denied by Gross v. United States, 140 S. Ct. 1224, 206 L. Ed. 2d 219, 2020 U.S. LEXIS 1358 (U.S., Feb. 24, 2020)

Prior History:  [**1] Appeal from the United States District Court for the Southern District of New York. Nos. 15-cr-769-1, 15-cr-769-2, 15-cr-769-3 — Alison J. Nathan, Judge.

Appeal from the November 1, 2017 and November 16, 2017 judgments of the United States District Court for the Southern District of New York (Alison J. Nathan, Judge), convicting the Defendants-Appellants, after a jury trial, of multiple counts arising out of their roles in the operation of an illegal Bitcoin exchange and a scheme to use a federal credit union for illegal purposes. They argue, among other things, that the district court made various evidentiary errors, including improperly limiting the examination of a witness called to impeach a key government witness. Defendant Lebedev further argues that insufficient evidence was presented at trial to sustain his convictions, while defendant Gross argues that the evidence presented at trial so differed from the allegations of the superseding indictment that the government impermissibly constructively amended the indictment. Defendant Gross also challenges his 60-month prison sentence and order of restitution, arguing that the court misapplied certain sentencing enhancements in calculating [**2]  the Guidelines range, and abused its discretion in determining restitution. We AFFIRM.

United States v. Murgio, 209 F. Supp. 3d 698, 2016 U.S. Dist. LEXIS 131745 (S.D.N.Y., Sept. 19, 2016)

CORE TERMS

district court, transactions, credit union, conspiracy, indictment, Collectables, quotation, marks, financial institution, sentencing, processing, contends, convicted, witnesses, member of the board, challenges, wire fraud, withdrawal, donations, funds, co-conspirator, restitution, customers, wire, clearly erroneous, personal expenses, deprived, exposure, variance, bribery

Criminal Law & Procedure, Standards of Review, Substantial Evidence, Sufficiency of Evidence, Fraud, Wire Fraud, Elements, Criminal Offenses, Fraud, Abuse of Discretion, Evidence, Evidence, Admissibility, Expert Witnesses, Helpfulness, Types of Evidence, Documentary Evidence, Summaries, Appeals, Clearly Erroneous Review, Exemptions, Statements by Coconspirators, Statements During Conspiracy, Statements Furthering Conspiracy, Trials, Examination of Witnesses, Witnesses, Conduct Evidence, Prior Acts, Crimes & Wrongs, Accusatory Instruments, Indictments, Appellate Review, Amendments & Variances, Constructive Amendments, Variances, De Novo Review, Defendant's Rights, Right to Due Process, Clear Error Review, Sentencing, Sentencing Guidelines, Sentencing Guidelines, Adjustments & Enhancements, Abuse of Discretion, Restitution