u.s. v. galanis 477

477U.S. v. GALANISCite as 366 F.Supp.3d 477 (S.D.N.Y. 2018)

granted, and Plaintiff’s Complaint (Dkt. 1)is dismissed. The Clerk of Court is direct-ed to close this case.

SO ORDERED.

,

UNITED STATES of America,

v.

John GALANIS, Bevan Cooney, andDevon Archer, Defendants.

No. 16-CR-371 (RA)

United States District Court,S.D. New York.

Signed 11/15/2018

Background: Following jury trial, threedefendants were convicted of securitiesfraud and conspiracy to commit securitiesfraud. Defendants moved for judgment ofacquittal and new trial.

Holdings: The District Court, RonnieAbrams, J., held that:

(1) issue of whether first defendant willful-ly joined scheme to misappropriatecorporation’s bond proceeds was forjury;

(2) guilty verdict was not supported bysufficient evidence of second defen-dant’s intent;

(3) guilty verdict was supported by suffi-cient evidence of third defendant’s in-tent; and

(4) failure of court to grant severance af-ter introduction of prior-act evidenceagainst first defendant did not give riseto manifest injustice.

Motions granted in part and denied inpart.

1. Criminal Law O753.2(8)

On a motion for a judgment of acquit-tal, a court must view the evidence in alight that is most favorable to the govern-ment, and with all reasonable inferencesresolved in favor of the government. Fed.R. Crim. P. 29.


On a motion for a judgment of acquit-tal, the question is not whether the courtbelieves that the evidence at trial estab-lished guilt beyond a reasonable doubt, butrather, whether any rational trier of factcould have found the essential elements ofthe crime beyond a reasonable doubt.Fed. R. Crim. P. 29.


In a close case, where either of thetwo results, a reasonable doubt or no rea-sonable doubt, is fairly possible, the courtmust deny a motion for a judgment ofacquittal and let the jury decide the mat-ter. Fed. R. Crim. P. 29.


On a motion for a judgment of acquit-tal, it is not the trial court’s role to substi-tute its own determination of the weight ofthe evidence and the reasonable inferencesto be drawn for that of the jury. Fed. R.Crim. P. 29.


The strong deference to a jury verdicton a motion for a judgment of acquittal isespecially important when reviewing a con-viction of conspiracy because conspiraciesby their very nature are secretive and thusare rarely laid bare in court. Fed. R.Crim. P. 29.

6. Conspiracy O24(1), 47(2)

A conspiracy need not be shown byproof of an explicit agreement but can be

478 366 FEDERAL SUPPLEMENT, 3d SERIES

established by showing that the partieshave a tacit understanding to carry out theprohibited conduct, and can be shownbased on circumstantial evidence alone.

7. Conspiracy O48.1(3)

In prosecution for conspiracy to com-mit securities fraud, issue of whether de-fendant willfully joined scheme to misap-propriate corporation’s bond proceeds wasfor jury.

8. Criminal Law O913(1)

Courts have broad discretion to setaside a jury verdict and order a new trialto avert a perceived miscarriage of justice.Fed. R. Crim. P. 33.

9. Criminal Law O905

Motions for a new trial are disfavoredand should be granted only in the mostextraordinary circumstances. Fed. R.Crim. P. 33.


In deciding whether to grant a motionfor a new trial predicated on sufficiency ofthe evidence, a judge may weigh the evi-dence and determine the credibility of wit-nesses and is not required to view theevidence in the light most favorable to thegovernment. Fed. R. Crim. P. 33.


On a motion for a new trial, the trialcourt must be satisfied that competent,satisfactory, and sufficient evidence in therecord supports the jury verdict. Fed. R.Crim. P. 33.

12. Criminal Law O961

On a motion for a new trial, the dis-trict court must examine the entire case,take into account all facts and circum-stances, and make an objective evaluation.Fed. R. Crim. P. 33.


On a motion for a new trial, the courtmust strike a balance between weighingthe evidence and credibility of witnessesand not wholly usurping the role of thejury. Fed. R. Crim. P. 33.


The ultimate test on a motion for anew trial is whether letting a guilty verdictstand would be a manifest injustice. Fed.R. Crim. P. 33.


To grant a motion for a new trial,there must be a real concern that an inno-cent person may have been convicted.Fed. R. Crim. P. 33.

16. Conspiracy O47(4)

Criminal Law O935(1)

Jury’s guilty verdict on charge of con-spiracy to commit securities fraud was notsupported by sufficient evidence of defen-dant’s intent, such that manifest injusticewould result from permitting verdict tostand, and thus new trial was warranted;leader of conspiracy took measures to hidethat he was sending defendant moneyfrom misappropriated bond proceeds, lead-er’s e-mails to defendant were ambiguousas to whether conspirators planned tokeep clients’ money for themselves or toreinvest it on their behalf, neither of gov-ernment’s cooperating witnesses ever com-municated with defendant about scheme,defendant did not reap same illegal gainsas his alleged co-conspirators, and al-though defendant misled banks about lead-er’s involvement in investment, he couldhave done so because of leader’s checkeredpast, rather than because he had knowl-edge that leader was stealing bond pro-ceeds. Fed. R. Crim. P. 33.


17. Conspiracy O47(4) Criminal Law O935(1)

Jury’s guilty verdict on charge of con-spiracy to commit securities fraud wassupported by sufficient evidence of defen-dant’s intent, such that manifest injusticewould not result from permitting verdict tostand, and therefore new trial was notwarranted; defendant received funds di-rectly from account used to misappropriatecorporation’s bond proceeds without ap-parent basis for him to receive money forservices rendered, defendant participatedin backdating forms related to fake entity,and defendant lied to bank about his own-ership of bonds in order to obtain $1.2million loan. Fed. R. Crim. P. 33.

18. Criminal Law O622.7(3)Following proper joinder, severance is

required only where the prejudice is suffi-ciently severe to outweigh the judicialeconomy that would be realized by avoid-ing multiple lengthy trials.

19. Criminal Law O622.7(3)Severance should be granted only

where there is a serious risk that a jointtrial would compromise a specific trialright of one of the defendants or preventthe jury from making a reliable judgmentabout guilt or innocence.

20. Criminal Law O622.7(11)A defendant is not entitled to a sever-

ance merely because he may have a betterchance of acquittal at a separate trial.

21. Criminal Law O622.7(8)The introduction against one defen-

dant of prior-act evidence by no meansrequires severance. Fed. R. Evid. 404(b).

22. Criminal Law O914In prosecution of three defendants for

conspiracy to commit securities fraud, fail-ure of court to grant severance after intro-duction of prior-act evidence against one

defendant did not give rise to manifestinjustice necessary to grant new trial;there was no evidence that other two de-fendants enjoyed relationship with defen-dant against whom evidence was intro-duced during relevant time, and court gaverobust limiting instruction specifying thattwo defendants were not involved in oreven aware of other defendant’s conduct.Fed. R. Crim. P. 33; Fed. R. Evid. 404(b).


Conscious avoidance charges are ap-propriate where involvement in an offensewas so overwhelmingly suspicious that thedefendant’s failure to question the suspi-cious circumstances establishes the defen-dant’s purposeful contrivance to avoidguilty knowledge.

24. Conspiracy O24(2)

That a single conspiracy may havehad multiple components or spheres doesnot mean that the government instead al-leged the existence of two conspiracies.

25. Criminal Law O798(.5)

General unanimity instructions areconsidered sufficient unless there exists agenuine danger of jury confusion.

26. Criminal Law O798(.7)

That certain aspects of the record in acase are complex does not require a courtto give a specific unanimity instruction.


When the import of newly discoveredevidence supporting a motion for a newtrial is that a witness committed perjury,the threshold inquiry is whether the evi-dence demonstrates that the witness infact committed perjury. Fed. R. Crim. P.33.


If the prosecution was not aware of awitness’s perjury at the time of trial, a


defendant can obtain a new trial onlywhere the false testimony leads to a firmbelief that but for the perjured testimony,the defendant would most likely not havebeen convicted. Fed. R. Crim. P. 33.

29. Criminal Law O942(1)If the prosecution knew or should

have known about a witness’s perjury,then the conviction will be set aside on amotion for a new trial if there is anyreasonable likelihood that the false testi-mony could have affected the judgment ofthe jury. Fed. R. Crim. P. 33.

30. Criminal Law O942(1)Where newly discovered evidence is

impeachment material, a new trial may begranted only upon a showing that the evi-dence is not merely cumulative or im-peaching, and that the evidence would like-ly result in an acquittal. Fed. R. Crim. P.33.

Aimee Hector, Rebecca Gabrielle Mer-melstein, Brian Roger Blais, Andrea Mi-chelle Griswold, Brendan Francis Quigley,Negar Tekeei, Jeffrey Coffman, U.S. At-torney’s Office, SDNY, New York, NY, forPlaintiff.

David Touger Peluso & Touger JosephAaron Grob, Pro Hac Vice, Joseph A.Grob, P.C., Gerald M. Cohen, Cohen &Fitch, LLP, Eric P. Franz, Eric Franz,PLLC, Eugene Edward Ingoglia, Allen &Overy, LLP, Gregory Robert Morvillo,Caitlin Carey Sikes, Savannah Stevenson,Orrick, Herrington & Sutcliffe LLP(NYC), Neil Bruce Checkman, Law Officesof Neil B. Checkman, Matthew LaneSchwartz, Craig A. Wenner, Laura Eliza-beth Harris, Boies, Schiller & Flexner

LLP(NYC), Paula Jaclyn Notari, The LawOffice of Paula J. Notari, Abraham JabirAbegaz-Hassen, O’neill and Hassen, NewYork, NY, Daniel K. Streim, Orrick, Her-rington & Sutcliffe, LLP (DC), Washing-ton, DC, David Paul Nelson, Boies, Schil-ler & Flexner LLP (FL), Fort Lauderdale,FL, Diane H. Bang, Spertus, Landes &Umhofer, Los Angeles, CA, for Defendant.

OPINION AND ORDER

RONNIE ABRAMS, United StatesDistrict Judge

INTRODUCTION

Following a six-week jury trial, defen-dants John Galanis, Bevan Cooney, andDevon Archer were convicted of securitiesfraud and conspiracy to commit securitiesfraud. Now before the Court are the de-fendants’ motions for judgment of acquittaland a new trial pursuant to Rules 29 and33 of the Federal Rules of Criminal Proce-dure.1 After careful consideration and athorough review of the record, the Courtgrants Archer’s Rule 33 motion, but deniesthe others.

BACKGROUND

It is undisputed that a massive fraudwas perpetrated by Jason Galanis, the ad-mitted mastermind of the conspiracy and aserial fraudster. It is also not in disputethat these defendants undertook actionsthat had the effect of assisting Galanis inthis endeavor. The primary question forthe jury was whether the defendantsknowingly and willfully participated in thecharged scheme, or, as they each haveclaimed, were themselves deceived by Ja-son Galanis. As the Court will detail, therewas ample evidence demonstrating thatJohn Galanis and Cooney were willful par-

1. John Galanis initially moved only pursuantto Rule 29, but later submitted a supplemen-

tal Rule 33 motion predicated on newly dis-covered evidence.


ticipants. The Court harbors substantialconcern, however, that Archer lacked therequisite intent and is thus innocent of thecrimes charged in this indictment.

I. Overview of the Conspiracy

This single conspiracy had two compo-nents critical to its overall success, withdistinct groups of victims. First, the Wak-pamni Lake Community Corporation(‘‘WLCC’’) was induced into selling ap-proximately $60 million worth of bonds.Tr. 156:17–24. The bond proceeds were tobe invested in an annuity on behalf of theWLCC. Tr. 147:3–13. This investment wasintended to generate sufficient returns topay the interest and principal due to bond-holders, with additional revenue remainingfor the WLCC to fund certain economicdevelopment projects. Tr. 147:3–13. In-stead, all of the proceeds were misappro-priated at the direction of Jason Galanis, inpart for his personal benefit.

The second group of victims consisted ofcertain clients of two SEC-registered in-vestment advisers, Hughes Capital(‘‘Hughes’’) and Atlantic Asset Manage-ment (‘‘Atlantic’’). The conspirators gainedcontrol of Hughes and Atlantic, which inturn purchased approximately $40 millionworth of bonds on behalf of certain of theirclients. This purchase violated the terms ofcertain clients’ investor agreements andfurther failed to disclose that some individ-uals were involved on both sides of thetransactions. See Tr. 1610:5–1614:13,1617:3–13, 1680:9–1687:10; GX 927, GX2632, GX 4016. Because the bond proceedswere not invested as intended (with theexception of the initial interest payment onthe first set of bonds) these clients neverreceived the interest to which they wereentitled and never recovered their princi-pal. See Tr. 752:20–753:4. Furthermore, as

expected, there was no secondary marketfor the bonds and the clients of Hughesand Atlantic were thus unable to sell them.See Tr. 751:15–25.

II. The Relevant Entities and Individu-als

The WLCC scheme took place duringthe course of a legitimate plan by JasonGalanis, Bevan Cooney, Devon Archer, andJason Sugarman, among others, to conducta ‘‘roll up’’ of various businesses with thegoal of creating a financial services con-glomerate that could be sold for a sumlarger than the value of its parts. See Tr.906:9–15.2 One of the entities they soughtto acquire was Burnham Financial Group,which was intended to increase the valueof the conglomerate by virtue of its reputa-tion. See Tr. 1321:17–22; DX 4733 at 8.There is no indication that the roll up planitself was illegal or otherwise suspect. In-deed, in pursuit of this plan the defendantsand their business partners acquired nu-merous legitimate companies, which collec-tively managed assets in the billions ofdollars. See Tr. 1324:18–24. But the com-plexity of the evidence in this case stems,in part, from the tangled web of relatedtransactions involving the legitimate com-panies and those entities that were createdat the direction of Jason Galanis solely tofurther the bond scheme and which werepurposefully given names to make themappear related to the legitimate entities.

Before turning to the details of how theWLCC scheme was executed, the Courtwill provide an overview of the corporateentities and actors central to this case.Two companies, in particular, are implicat-ed in many of the transactions: BurnhamFinancial Group (‘‘Burnham’’) and WealthAssurance Holdings. Burnham was the

2. Although he was not charged in this case,Jason Sugarman has been characterized by

the government as an unindicted co-conspira-tor.


parent company of two other entities:Burnham Securities, Inc. (‘‘BSI’’), a regis-tered broker-dealer, and Burnham AssetManagement (‘‘BAM’’), an investment ad-viser with approximately $1.5 billion inassets during the relevant period. Tr.1071:24–1072:22. Wealth Assurance Hold-ings was a special holding company creat-ed specifically to acquire Wealth Assur-ance-AG (‘‘WAAG’’), a European insurancecompany. Tr. 911:13–16, 1327:17–20. Dur-ing the relevant period, Wealth AssuranceHoldings also acquired another insurancecompany, Valorlife, and was subsequentlyrenamed Valor Group. Tr. 1314:14–20. Forthe sake of clarity, the Court will refer tothe Wealth Assurance Holdings/ValorGroup entity only as Wealth AssuranceHoldings (‘‘WAH’’). There was another en-tity, COR Fund Advisers (‘‘CORFA’’), cre-ated by Jason Sugarman, the purpose ofwhich was to raise money for corporateacquisitions and which was intended toplay a role in the anticipated purchase ofBurnham. Tr. 1333:15–19,

As the Court will describe, many ofthese entities touched, at least tangential-ly, the WLCC scheme. There were also anumber of entities created at the directionof Jason Galanis for the sole purpose offurthering the scheme and which were giv-en names to make them appear related tothese companies, thus providing a veneerof legitimacy. For instance, one entity in-volved in the acquisitions of Hughes andAtlantic, BFG Socially Responsible Invest-ing (‘‘BFG SRI’’), was in no way related toBurnham or its subsidiaries despite itsname and was instead formed and ownedby WAAG. Tr. 1384:8–13, 1386:4–16.3 Simi-larly, the provider of the so-called annuityfor the WLCC was a company calledWealth Assurance Private Client Corpora-

tion (‘‘WAPC’’). Tr. 367:8–10. Again, itbore no relationship to WAH or WAAG,but was named to give a misleading im-pression. Tr. 1014:18–21. Galanis even cre-ated a fake subscription agreement toperpetrate the lie that WAPC was in factaffiliated with WAH. Tr. 1459:8–20. WhileDunkerley knew that WAPC and WAHdid not enjoy a legal relationship, to hisknowledge he was the only board memberof WAH, including Archer, who was aware.Tr. 1460:11–1461:12. A third entity, Cal-vert Capital (‘‘Calvert’’), was later createdto leave a paper trail of backdated, fraudu-lent documents in order to make certain ofthe WLCC transactions appear legitimate.Tr. 1057:14–1058:2.

Turning to the individuals who lie at thecenter of this case, Devon Archer was aprincipal of the Rosemont Group, a $2.4billion private equity firm. DX 4733 at 12.During the relevant period, he was alsothe Chairman of Burnham, sat on the in-vestment committee of BSI, and was onthe board of WAH. Tr. 1033:24–1034:1,1327:5–9, 1409:20–23. Jason Galanis, theadmitted mastermind of the criminalscheme who was the first of the defendantsto plead guilty in this case, did not have aformal role at any of the Burnham entitiesbut was nonetheless involved in their af-fairs. Tr. 1071:2–5. He was also consideredan adviser to the boards of WAH andWAAG. Tr. 912:8–10. Despite being in-volved in the roll up plan, including as aninvestor, see Tr. 907:3–9, Cooney, a friendof Galanis’, did not have a formal role atany of these entities, while John Galanis,Jason’s father, apparently was not involvedin any capacity.

The other members of the alleged con-spiracy were Michelle Morton, Gary Hirst,and Hugh Dunkerley. Morton, who plead-

3. The name given this entity was ‘‘BFG So-cially Responsible Investing’’—not ‘‘BurnhamFinancial Group Socially Responsible Invest-

ing’’ as Hugh Dunkerley initially testified be-fore correcting himself on cross-examination.Compare Tr. 936:5–6 with 1384:8–13.


ed guilty the week before trial, was re-cruited to purchase and operate the tworegistered investment advisers, Hughesand Atlantic. See Tr. 1032:20–24. Hirst,who also entered a guilty plea shortly be-fore trial, was installed as the Chief In-vestment Officer of Hughes following itsacquisition, created WAPC, and possessedsignatory authority over that entity’s bankaccount. Tr. 946:25–947:1, 1011:20–1013:12.Dunkerley, a cooperating witness, occupieda variety of roles. He sat on the Boards ofWAH and WAAG, was a director of COR-FA, and was the sole managing member ofboth WAPC and BFG SRI, the previouslydiscussed entities created solely to furtherthe criminal scheme. Tr. 897:23–898:3,937:21, 1327:10–16.4 He also became anemployee of BSI, the placement agent forthe bonds. 897:23–898:3. Hirst and Dunk-erley were responsible for transferring thebond proceeds out of the WAPC account.See Tr. 1020:1–13, 1022:5–7. The govern-ment’s case was also assisted by FranciscoMartin, who testified pursuant to a safepassage letter. His role was to advise theWLCC on the investments that wouldcomprise the annuity by virtue of his al-leged employment at an entity called Pri-vate Equity Management. Tr. 1015:13–21.He was also tasked with creating Calvert.Tr. 2181:14–19.

III. The Genesis of the WLCC BondOfferings

Jason Galanis and the defendants seemto have first contemplated becoming in-volved in the sale of Native Americanbonds in early 2014, with the intention, thegovernment argues, of obtaining liquiditynecessary to execute the roll up. On Feb-

ruary 12, 2014, Jason Galanis emailedArcher and Cooney to inform them that hehad been ‘‘brought a deal’’ involving a tax-free bond issuance by a Native Americantribe that ‘‘need[ed] an underwriter for TTT

municipal bonds.’’ GX 2003. The email at-tached a letter from an employee of theU.S. Department of Treasury to RaycenRaines, a member of the Oglala SiouxTribe, regarding its application to issuetribal economic development bonds. Id.The WLCC is operated by the WakpamniLake Community, a division of the OglalaSioux. Tr. 155:15–21.

In March 2014, John Galanis met Ray-cen Raines at a Native American develop-ment conference in Las Vegas, Nevada.Tr. 1834:9–1835:11. Raines had not previ-ously met John Galanis. Tr. 1834:22–23.5

Beginning at that meeting and continuingfor several months, John Galanis proposedthat the WLCC issue bonds, the proceedsof which would be placed in an annuity.See Tr. 1835:24–1835:17. Based on certainrepresentations made by John Galanis,Raines believed that the annuity ‘‘would belike an insurance wrapper that would pro-tect the principal investment and generateannual income to cover the interest on thebond as well as generate income’’ for theWLCC’s various development projects. Tr.1836:9–14. John Galanis initially informedRaines that WAAG, the subsidiary ofWAH, would serve as the annuity provid-er. Tr. 1840:7–14. Instead, the annuity pro-vider ended up being WAPC (Wealth As-surance Private Client), which, contrary toJohn Galanis’ representations to Raines,was in no way affiliated with WAH(Wealth Assurance Holdings) or WAAG

4. Dunkerley pleaded guilty to two counts ofsecurities fraud relating to the WLC scheme,as well as three counts for other crimes, in-cluding his production of fraudulent docu-ments to cover-up the WLCC scheme and forhis participation in a separate fraud relating

to an entity called Ballybunion. See Tr. 927:7–21.

5. Instead of using his legal name, John Galan-is introduced himself as ‘‘Yanni.’’ See Tr.1834:9–13.


(Wealth Assurance AG) despite its appar-ent affiliation based on its name. See Tr.897:25–898:1, 1014:18–21. John Galanis fur-ther represented (accurately) that theplacement agent for the bonds would beBSI, the previously mentioned subsidiaryof Burnham, and where Archer sat on theinvestment committee. Tr. 1838:8–14.

On June 16, 2014, John Galanis emailedTim Anderson, a lawyer representing BSI,copying Jason Galanis. GX 1304. Attachedto the email was a document setting forththe details of the anticipated transactionthat were very similar to the final terms:the bonds were intended to create a reve-nue stream for the WLCC to fund econom-ic development projects; BSI would be theplacement agent and a company called Pri-vate Equity Management the portfoliomanager; the initial offering was for $28million, with all but $500,000 of thatamount going to purchase an annuity fromWAPC; the WLCC would receive annualpayments ranging from $250,000 to$350,000 for the following twenty-fiveyears; and the bondholders would receiveannual interest payments, with the princi-pal being recovered at the ten-year markat which point the bonds would be retired.GX 1304; Tr. 170:13–177:9.

IV. The WLCC Issues Bonds and theProceeds are Misappropriated

The WLCC eventually conducted threeseparate bond issuances, worth differingamounts but otherwise structured similar-ly. The first and final issuances were pur-chased in their entirety by clients ofHughes and Atlantic, respectively. Thesecond issuance was purchased by Archerand Cooney using misappropriated pro-

ceeds provided by Jason Galanis. A centralissue at trial was whether Archer and Coo-ney knew that the money they used topurchase the second issuance was misap-propriated from the proceeds of the firstset of bonds.

At the time that John Galanis begandiscussions with Raines, the conspiratorsdid not yet control either Hughes or Atlan-tic. On May 9, 2014, Jason Galanis for-warded Archer and Cooney an email con-cerning the potential acquisition ofHughes, which he described as ‘‘possiblyuseful.’’ GX 2018; accord Tr. 1582:18–1583:7. The primary motivation underlyingthe acquisition was to secure purchasers ofthe first bond issuance. Tr. 933:8–11. JasonGalanis also attached the resumes of Mi-chelle Morton and Richard Deary. GX2018. The acquisition, financed by wiring$2.76 million to Hughes from WAAG,closed on August 11, 2014. GX 2034; Tr.1594:6–9. The funds went from WAAG toBFG SRI, which as previously discussedwas not related to Burnham, then to anentity called GMT Duncan, before finallybeing provided to Hughes. Tr. 935:25–936:25. As a result of this transaction,Hughes became wholly owned by GMTDuncan. See Tr. 1383:18–20.6 Hirst wasinstalled as Hughes’ Chief Investment Of-ficer. Tr. 946:20–947:1.

On August 22, 2014, Hirst signed tradetickets effecting the purchase of the entire-ty of the first WLCC bond offering onbehalf of clients of Hughes. See GX 813. Inthe following days, approximately $24 mil-lion from Hughes’ clients was depositedinto the WAPC account to fund the pur-chase of the annuity. GX 512 at 1; GX 4003

6. GMT Duncan was comprised of two classesof shareholders: voting Class A and non-vot-ing Class B. The Class A shareholders wereMorton and Deary while the sole Class Bshareholder was BFG SRI, see Tr. 1385:1–19,a wholly owned subsidiary of WAAG (Wealth

Assurance AG), Tr. 1386:14–20, which wasitself a subsidiary of WAH (Wealth AssuranceHoldings). As noted earlier, Archer sat on theboard of WAH and Dunkerley on the boardsof both WAH and WAAG.


at 4.7 Hughes’ clients were not informed ofthe purchase, which presented a conflict ofinterest in light of the presence of thesame parties on both sides of the transac-tion and which violated the terms of cer-tain clients’ investor agreements. See Tr.1610:5–1614:13, 1617:3–13, 1680:9–1687:10;GX 927, GX 2632, GX 4016. Upon learningof this transaction, Hughes’ clients re-sponded negatively, with many demandingthat the transaction be rescinded. Tr.2049:21–2050:2.

Once the funds reached the WAPC ac-count, they were not in fact used to pur-chase an annuity. Instead, through a seriesof transactions, the money was transferredto various individuals and corporations,with approximately $7 million being spentfor the personal benefit of Jason and JohnGalanis. See GX 4003 at 4. For example, $1million was sent to the law firm represent-ing the seller of a Tribeca apartment thatJason Galanis was in the course of pur-chasing. GX 512 at 2, GX 4013. An addi-tional $2.35 million was sent to a bankaccount belonging to Sovereign NationsDevelopment Corporation (‘‘Sovereign Na-tions’’), which was created at the directionof John Galanis days before the first bondissuance. GX 4013. The money wired tothat account, which John Galanis charac-terizes as a legitimate commission heearned for his work on the deal, was ulti-mately disbursed to him for the purchaseof luxury items, as well as to several of hisfamily members. Id. An additional $4 mil-lion was sent from WAPC to ThorsdaleFiduciary and Guaranty (‘‘Thorsdale’’), anentity controlled by Jason Galanis that was

a vehicle for investing his purported familymoney. GX 4003 at 4. Among other things,Jason Galanis distributed this money tomembers of his family and purchased luxu-ry cars and jewelry. Id.

The remaining proceeds were used topurchase the second tranche of WLCCbonds by Archer and Cooney. This moneywas transferred out of the WAPC accountat the direction of Jason Galanis, shuffledthrough various intermediaries, and finallytransferred to Archer and Cooney. See GX4006. On October 1, 2014, Archer pur-chased $15 million of bonds through anentity of which he was the sole managingmember, Rosemont Seneca Bohai (‘‘RSB’’).GX 4004 at 7. Cooney purchased the re-maining $5 million of the second issuanceon October 9, 2014. GX 4005 at 6. Thebonds purchased by Archer and Cooneywere eventually used by entities withwhich the two were associated to satisfynet capital requirements set by the Finan-cial Industry Regulatory Industry (‘‘FIN-RA’’). See GX 2075, GX 4004, GX 4005.8

As with the first offering, the proceedsfrom the second issuance were not invest-ed on behalf of the WLCC. In November2014, $3.8 million was wired from WAPCto Cooney, who allegedly intended to use itto purchase Jason Galanis’ home in BelAir. See GX 4007 at 4, GX 3224. Instead,the money was ultimately used by WAH topurchase the aforementioned Valorlife, asubsidiary of an entity called Vaudoise, infurtherance of the roll up. See GX 4007 at4. The remaining portion of the proceeds

7. An additional $4 million of the clients’ mon-ey was used to pay fees associated with thetransaction and to provide $2.25 million im-mediately to the WLCC, which was ear-marked for the construction of a warehouse.GX 4003 at 4.

8. FINRA ultimately determined, however,that bonds of this nature may not be used to

satisfy net capital requirements. Tr. 2093:1–2094:24. There is no evidence, however, thatanything was amiss with this aspect of thetransactions. The entities seemed to have en-gaged with FINRA in good faith and ceasedusing the bonds to satisfy net capital require-ments upon receipt of the agency’s final deci-sion. See Tr. 2117:16–2126:9


were transferred to Thorsdale, Jason Ga-lanis’ entity. See GX 4006. Archer did notreceive any transfers from the WAPC ac-count. See id.

Meanwhile, Jason Galanis was pursuingthe acquisition of another investment ad-viser, Atlantic. On August 28, 2014, JasonGalanis emailed Archer and Cooney, withthe subject line ‘‘we have a decent shot ofadding this one to the family.’’ GX 2303.Negotiations over this merger continuedthrough the fall and winter of 2014-2015.See GX 828 at 1. Again, the acquisition wasmotivated by a desire to facilitate the pur-chase of WLCC bonds, this time for thethird and final offering. See GX 2062; Tr.1037:20–25.

Atlantic was eventually purchased forapproximately $6.1 million in cash. See GX828 at 4; Tr. 1033:15–1035:10. The struc-ture was similar to the previous acquisitionof Hughes—with the exception that thefunds originated with WAH instead ofWAAG—and Atlantic was merged intoHughes, with the resulting combined enti-ty being known as Atlantic and remaininga subsidiary of GMT Duncan. See Tr.1032:18–1037:13, 1383:18–20. Furthermore,WAH agreed to provide a guarantee for anadditional $4,854,420 million of Atlantic’sdebts. Tr. 1035:5–10; GX 828 at 4. Duringthis time, John Galanis approached Rainesand suggested yet another bond issuance.Tr. 1858:13–21. On April 15, 2015, Mortonpurchased $16 million of the third and finalWLCC bond issuance on behalf of theOmaha School Employees Retirement Sys-tem (‘‘OSERS’’), which was a client of At-lantic. See GX 962; GX 4009. As withHughes’ clients, OSERS was not providedadvance notice of the purchase, which vio-

lated certain aspects of its agreement withAtlantic, and was unable to liquidate thebonds due to the absence of a secondarymarket. See Tr. 656:3–25, 746:5–753:4.

The proceeds of the final issuance weresimilarly misappropriated: Cooney re-ceived $75,000, GX 4009; Jason Galanisused approximately $5.4 million to pur-chase Fondinvest, a European fund offunds, with Dunkerley being installed asthe owner, see id., Tr. 1042:9–17; $4.6 mil-lion was sent to VL Assurance, anotherWAH subsidiary, GX 4009, Tr. 913:6–8;$305,000 went to Hughes, GX 4009; andmillions more went to Seymour Capitaland Thunder Valley, entities established atHirst’s direction and which were eventual-ly used to purchase shares of Code Rebelin that company’s IPO, see id., Tr.2160:19–2162:24. Again, Archer did not re-ceive any proceeds from WAPC. See GX4009.

V. Procedural History

The operative indictment in this casecharged each of the three defendants withtwo counts: substantive securities fraudand conspiracy to commit securities fraud.9

Trial commenced on May 22, 2018. Thegovernment rested on June 20, at whichpoint the Court reserved ruling on thedefendants’ motions for acquittal, pursuantto Rule 29(b). Tr. 3131:13–22. DefendantsArcher and Cooney then presented casesbefore resting on June 25. Following fiveweeks of testimony and nearly 800 docu-ments being admitted into evidence, thejury began deliberations on June 28. SeeTr. 4192:3–4. In spite of the undisputedcomplexity of this case, the jury did notask a single question or request that any

9. As noted previously, the initial indictmentcharged seven individuals, four of whompleaded guilty, including two, Michelle Mor-ton and Gary Hirst, who entered pleas theweek before trial. As a result of those two

pleas, the third and fourth counts of the in-dictment, which charged investment adviserfraud and conspiracy, were rendered mootbecause none of the three remaining defen-dants were charged in either of those counts.


testimony be read back before finding allthree defendants guilty of both counts. SeeTr. 4195:2–4196:11. In total, the jury delib-erated for less than three hours. See ECFNo. 541-4.

DISCUSSIONAs mentioned above, the defendants

were convicted of both securities fraud andconspiracy to commit securities fraud. Itwas clear that material misstatements andomissions were made in connection withthe sale of securities. The only seriouslydisputed element was thus the intent ofeach of the defendants.

With respect to the required mentalstate for the substantive securities fraudoffense, the Court charged the jury asfollows: ‘‘Knowingly means to act volun-tarily and deliberately rather than mistak-enly or inadvertently. Willfully means toact knowingly and purposefully, with anintent to do something the law forbids;that is to say, with bad purpose, either todisobey or to disregard the law. Intent todefraud in the context of the securitieslaws means to act knowingly and withintent to deceive.’’ Tr. 4153:8–17.10 Regard-ing intent in the context of the conspiracycharge, the Court further instructed: ‘‘Anact is done knowingly and willfully if it isdone deliberately and purposefully; that is,a defendant’s acts must have been theproduct of that defendant’s conscious ob-jective, rather than the product of a mis-take or accident, or mere negligence, orsome other innocent reasonTTTT [T]he gov-ernment must prove beyond a reasonabledoubt that the defendant knew that he wasa member of an operation or conspiracy to

accomplish that unlawful purpose [to com-mit the charged substantive securitiesfraud], and that his action of joining suchan operation or conspiracy was not due tocarelessness, negligence, or mistake.’’ Tr.4169:12–4170:4.

I. Rule 29

Each of the defendants challenges thesufficiency of the evidence pursuant toRule 29. These motions are denied.

[1–4] Rule 29 requires a court, ‘‘on thedefendant’s motion,’’ to ‘‘enter a judgmentof acquittal of any offense for which theevidence is insufficient to sustain a convic-tion.’’ Fed. R. Crim. P. 29(a). When a courtreserves its decision until after the juryreturns a verdict, ‘‘it must decide the mo-tion on the basis of the evidence at thetime the ruling was reserved.’’ Fed. R.Crim. P. 29(b). On such a motion, a court‘‘must view the evidence in a light that ismost favorable to the government, andwith all reasonable inferences resolved infavor of the government.’’ United States v.Anderson, 747 F.3d 51, 60 (2d Cir. 2014)(citation omitted). ‘‘The question is notwhether this Court believes that the evi-dence at trial established guilt beyond areasonable doubt, but rather, whether anyrational trier of fact could have found theessential elements of the crime beyond areasonable doubt.’’ United States v. MiSun Cho, 713 F.3d 716, 720 (2d Cir. 2013)(per curiam) (citations omitted). In a closecase, where ‘‘either of the two results, areasonable doubt or no reasonable doubt,is fairly possible, the court must let thejury decide the matter.’’ United States v.

10. The Court also instructed the jury on aid-ing and abetting liability: ‘‘In order to aid orabet another to commit a crime, it is neces-sary that you determine that he willfully,knowingly associated himself in some waywith the crime and that he willfully andknowingly would seek by some act to help

make the crime succeed. Participation in acrime is willful if action is taken voluntarilyor intentionally, or in the case of a failure toact, with a specific intent to fail to do some-thing the law requires to be done; that is tosay, with a bad purpose, either to disobey orto disregard the law.’’ Tr. 4159:15–23.


Autuori, 212 F.3d 105, 114 (2d Cir. 2000)(citation omitted). It is not the trial court’srole to ‘‘substitute its own determination ofTTT the weight of the evidence and thereasonable inferences to be drawn for thatof the jury.’’ United States v. Guadagna,183 F.3d 122, 129 (2d Cir. 1999) (ellipsis inoriginal) (citation omitted).

[5, 6] This strong ‘‘deference TTT to ajury verdict is especially important whenreviewing a conviction of conspiracy’’ be-cause conspiracies ‘‘by [their] very nature’’are ‘‘secretive’’ and thus are ‘‘rare[ly] TTT

laid bare in court.’’ Anderson, 747 F.3d at72–73 (citations omitted). ‘‘A conspiracyneed not be shown by proof of an explicitagreement but can be established by show-ing that the parties have a tacit under-standing to carry out the prohibited con-duct,’’ United States v. Samaria, 239 F.3d228, 234 (2d Cir. 2001), abrogated on othergrounds by United States v. Huezo, 546F.3d 174, 180 n. 2 (2d Cir. 2008), and canbe shown based on circumstantial evidencealone, United States v. Gordon, 987 F.2d902, 906–07 (2d Cir. 1993).

As noted earlier, at the time the govern-ment rested the Court reserved judgmenton the defendants’ motions pursuant toRule 29(b), with each of the defendantsfiling written submissions after the verdict,in which at least Archer also moves pursu-ant to Rule 29(c). The practical differenceis that Rule 29(c) permits the Court toconsider all of the evidence presented attrial as opposed to the evidence in therecord at the time the Court reserveddecision. See Fed. R. Crim. P. 29. TheCourt’s conclusion, however, is the sameunder either approach. With one exceptionpertaining to John Galanis, which the

Court will address in due course, the evi-dence introduced after the governmentrested either has no bearing on the analy-sis or was beneficial to the defense case.

A. John Galanis

[7] There is no basis to disturb thejury’s verdict with respect to John Galanis.In urging the Court to do so, he ignoresboth the governing legal standards and theevidence presented at trial, which over-whelmingly established his guilt.

The primary thrust of John Galanis’ ar-gument is that he only made two represen-tations to the WLCC, neither of which wasinaccurate in his view. As an initial matter,this argument mistakenly assumes that adefendant may only be liable if he person-ally made an actionable misrepresentation.But even assuming, arguendo, that JohnGalanis accurately states the law, his argu-ment is unavailing because he did in factmake material misrepresentations to mem-bers of the WLCC. First, John Galanisacknowledges discussing his son’s work atBurnham with members of the WLCC. Heclaims, however, that he merely said Jason‘‘had a position at Burnham wherein hehad great influence on deciding what in-vestment opportunities Burnham wouldbecome involved in.’’ Galanis Mot. at 2,ECF No. 564. It is of course true thatJason Galanis, despite not holding a formalposition at Burnham or its subsidiaries,was actively involved in their affairs. SeeTr. 1071:2–5. But the evidence at trialshowed that John Galanis made a differentand very specific representation to theWLCC: that Jason was an employee ofBurnham. Tr. 1838:15–17; see also Tr.154:3–8.11 This was indisputably false.12

11. John Galanis does not appear to contestthe materiality of this misstatement. Even ifhe did, however, the jury could have reason-ably concluded that it was material by provid-ing the representations made by John and

Jason Galanis to the WLCC some veneer oflegitimacy, particularly because it was Johnwho was so intimately involved in structuringthe deal in its early stages and he bore noformal relationship with Burnham. In any


There were additional misrepresenta-tions, moreover, which John Galanis doesnot acknowledge in his moving papers.Most notably, he told members of theWLCC that the proceeds from the bondofferings would be placed in an annuity onits behalf. Tr. 1839:10–1840:6. Indeed, thiswas the entire motivation for the WLCC toparticipate in the transaction in the firstplace. It is undisputed that no such annui-ty was ever purchased. Instead, the pro-ceeds were placed in the account of a shellcompany created specifically to facilitatethe ensuing misappropriation.13 Based onthis representation, therefore, the jurycould have easily concluded that John Ga-lanis was guilty.

But equally as important, Galanis ig-nores the requirements for liability. Therewas ample evidence presented at trial ofJohn Galanis’ central role in the criminalenterprise, on which the jury could have

concluded that he willfully participated inthe scheme.14

John Galanis asserts that the govern-ment’s case turned on the mere fact thathe was related to Jason. Not so. The gov-ernment even reminded the jury in itssummation of the obvious principle thatbeing related to a person who has commit-ted a crime does not give rise to criminalliability. Tr. 3619:23–24. Rather, the evi-dence established that they were a fatherand son working in tandem in the contextof this criminal scheme.

The jury could have reasonably inferredfrom the record that John Galanis did notby happenstance meet Raines in Las Ve-gas but specifically targeted him. Indeed,weeks earlier Jason Galanis had emailedArcher and Cooney about an opportunityto work with the WLCC, mentioningRaines by name. GX 2003. Moreover, therewas at least one occasion on which Tim

event, even if this statement was not material,as the Court will explain there were ampleother bases on which the jury could haveconvicted John Galanis.

12. The second representation identified byJohn Galanis is that he told the WLCC thatsovereign immunity would shield them fromany liability related to the bond offerings. It isunclear to the Court where in the record JohnGalanis made this representation, which, inany event, would not have been true in lightof the clause in the governing documents par-tially waiving the WLCC’s sovereign immuni-ty. See Tr. 207:3–208:1.

13. The government correctly notes that JohnGalanis initially told members of the WLCCthat WAAG would be the annuity provider,presumably because it had a positive reputa-tion. Tr. 1840:7–14. It is also undisputed,however, that John Galanis eventually in-formed members of the WLCC that insteadWAPC would serve as the annuity provider.Tr. 1852:15–23. Whatever probative value thisseries of events may have with respect to JohnGalanis’ intent, it cannot serve as the misrep-resentation of material fact giving rise to lia-bility.

14. Unlike his co-defendants, John Galanisdoes not argue that the indictment alleges twodistinct conspiracies. He does, however, makea related argument: that a prejudicial vari-ance ensued because the evidence at trialfailed to establish the single conspiracy al-leged by the government. This argument lacksmerit. It was well-established at trial that theconspirators made these two sets of misrepre-sentations—to the WLCC and the clients ofHughes and Atlantic—in a concerted effort inpursuit of a single goal: to steal the bondproceeds. See United States v. Payne, 591 F.3d46, 61 (2d Cir. 2010) (‘‘[A] single conspiracyis not transformed into multiple conspiraciesmerely by virtue of the fact that it may involvetwo or more phases or spheres of operation,so long as there is sufficient proof of mutualdependence and assistance.’’ (citation omit-ted) ). In any event, to the extent the evidencedid in fact establish two separate conspira-cies, any such variance did not affect JohnGalanis’ substantial rights. See United Statesv. Gonzalez, 399 F. App’x 641, 645 (2d Cir.2010).


Anderson, an attorney who helped struc-ture the WLCC issuances, contacted JasonGalanis seeking certain information aboutWAPC, a request to which John Galanisresponded. Tr. 184:16–20. Finally, whenRaines suggested that the WLCC explorealternative annuity providers in order tocompare rates, John Galanis discouragedhim from doing so. Tr. 1854:23–1855:10. Ifanother entity had served as the annuityprovider, it would not have been possibleto misappropriate the proceeds.15

John Galanis also grossly mischaracter-izes the record concerning the money hereceived for his assistance in executingthe WLCC scheme. It is undisputed thathe received $2.35 million, which he de-scribes as a commission. Galanis is ofcourse correct that commissions are notper se illegal. He also rightly notes thatBSI received $250,000 for its role as theplacement agent for the bonds. GX 214 at5. Raines even believed that Galanis mightreceive a portion of the payment due toBurnham. Tr. 1947:17–21. But the circum-stances under which John Galanis re-ceived this money belie the notion that itwas payment for anything but his partic-ipation in the criminal scheme.

First, unlike the payment to Burnham,the $2.35 million distributed to John Ga-lanis was not provided for in the schedulesetting forth the payments of expenses

owed at closing. See GX 214 at 5. Indeed,unlike the payment to BSI, which wasmade at closing, the funds given to JohnGalanis came at a later time out of theWAPC account. See GX 4013. At trial, hefailed to identify any authority for such adistribution to be made to him in the con-text of these transactions. Second, the sizeof the payment further undermines hisargument. It stands to reason that if BSIwas receiving $250,000 for its role as place-ment agent, John Galanis should not havereceived nearly ten times that sum forwhatever services he allegedly provided.To the extent John Galanis suggests thathis payment was a finder’s fee, that argu-ment is contradicted by the trial record,which, as previously discussed, establishedthat Jason Galanis and the other defen-dants at trial were aware of this potentialtransaction prior to John Galanis ever‘‘meeting’’ Raycen Raines. See GX 2303.Finally, the manner in which the fundswere disbursed to John Galanis is perhapsmost probative of the fact that this pay-ment was not legitimate. John Galanis wasnot simply wired the funds. Instead, meredays prior to the first issuance, he directedan associate to create Sovereign Nations.See Tr. 2820:1–2822:16; see also GX 623,GX 1112. The incorporation and accountopening documents for this company are

15. The one piece of evidence introduced afterthe Court reserved judgment on the Rule 29motions that harmed any of the defendantswas that regarding John Galanis’ partic-ipation in a prior securities fraud schemeorchestrated by his son. The Court had pre-cluded the government from introducing thisRule 404(b) evidence unless counsel for JohnGalanis argued that his client had been dupedby Jason in the context of this conspiracy. Inspite of the Court’s explicit warnings, counseldid just that in his summation, at which pointthe Court briefly re-opened the evidentiaryrecord to permit the government to introducea stipulation that John Galanis had pled guiltyto that previous fraud. Tr. 3829:2–16. The

Court provided a robust limiting instructionthat neither Archer nor Cooney were impli-cated in that conduct and that the jury waspermitted to consider the evidence onlyagainst John Galanis for the purpose of as-sessing his intent in the present case. Tr.3829:25–3831:11. Needless to say, this evi-dence was highly probative of whether JohnGalanis was a willing participant in thescheme at hand. But as the Court’s analysisdemonstrates, the jury had ample bases forconvicting him based on the evidence thathad been introduced at the time the govern-ment rested and the Court reserved judgmenton his Rule 29 motion.


bereft of any mention of John Galanis,even though he was the one effectivelyexercising control over the bank account.See GX 623, GX 1112, Tr. 2826:3–2828:1,2831:5–2837:5. The $2.35 million was wiredto Sovereign Nations, at which point JohnGalanis directed distributions, using a fakeemail account, to himself and family mem-bers. See GX 3400, GX 4009, Tr. 2822:23–2823:24.

On this record, the jury’s conclusion,supported by ample evidence, was emi-nently reasonable.

B. Devon Archer and Bevan Cooney

The Rule 29 motions submitted by Arch-er and Cooney are similarly denied. Withrespect to Archer, as will become clear inthe course of the forthcoming Rule 33analysis, when drawing all inferences inthe government’s favor, there is not a validbasis to grant his Rule 29 motion. As theCourt will further explain, Cooney’s insuf-ficiency of the evidence argument failseven under the more lenient Rule 33 stan-dard.

II. Rule 33

As mentioned above, Archer and Cooneyboth attack the sufficiency of the evidencein advancing motions for a new trial underRule 33.16 The defendants also make vari-ous other Rule 33 arguments. For reasonsthe Court will detail, Archer’s motionbased on the sufficiency of the evidence isgranted, while all others are denied.

[8, 9] Rule 33 permits courts to ‘‘vacateany judgment and grant a new trial if theinterest of justice so requires.’’ Fed. R.Crim. P. 33(a). Courts have ‘‘broad discre-tion TTT to set aside a jury verdict and

order a new trial to avert a perceivedmiscarriage of justice.’’ United States v.Ferguson, 246 F.3d 129, 133 (2d Cir. 2001)(ellipsis in original) (citation omitted). Mo-tions for a new trial pursuant to Rule 33‘‘are disfavored in this Circuit’’ and ‘‘shouldbe granted only in the most extraordinarycircumstances.’’ United States v. Figuer-oa, 421 F. App’x 23, 24 (2d Cir. 2011)(emphasis in original) (citations omitted).

A. Sufficiency of the Evidence

[10–15] ‘‘In deciding whether to granta Rule 33 motion [predicated on sufficiencyof the evidence], a judge may weigh theevidence and determine the credibility ofwitnesses’’ and ‘‘is not required to view theevidence in the light most favorable to theGovernment.’’ United States v. Tarantino,No. 08-CR-655 (JS), 2012 WL 5430865, at*2 (E.D.N.Y. Nov. 7, 2012) (citations omit-ted), aff’d, 617 F. App’x 62 (2d Cir. July 10,2015). ‘‘The trial court must be satisfiedthat competent, satisfactory and sufficientevidence in the record supports the juryverdict. The district court must examinethe entire case, take into account all factsand circumstances, and make an objectiveevaluation.’’ Ferguson, 246 F.3d at 134 (ci-tations omitted). The Court, however, must‘‘strike a balance between weighing theevidence and credibility of witnesses andnot wholly usurping the role of the jury.’’Id. at 133 (citation omitted). ‘‘The ultimatetest [on a Rule 33 motion] is whetherletting a guilty verdict stand would be amanifest injustice. To grant the motion,there must be a real concern that an inno-cent person may have been convicted.’’United States v. Aguiar, 737 F.3d 251, 264(2d Cir. 2013) (citations omitted).

16. As previously noted, John Galanis does notattack the sufficiency of the evidence underRule 33. Cooney has made several argumentsfor a new trial without explicitly attacking thesufficiency of the evidence, as he does under

Rule 29. Nonetheless, particularly to the ex-tent Cooney joins in Archer’s motions, theCourt construes Cooney’s papers as also argu-ing that the evidence is insufficient underRule 33.


1. Devon Archer

The Court has been mindful of the def-erence appropriately accorded juries anddoes not grant Archer’s motion for a newtrial lightly or absent careful consider-ation. As noted above, when drawing everyinference in the government’s favor, as theCourt is required to do under Rule 29, theCourt cannot conclude that no reasonablejury could have convicted him, particularlybecause the primary issue was intent andthe government presented a substantialamount of circumstantial evidence to thateffect.

The government’s reliance on circum-stantial evidence is of course perfectly ap-propriate. And the government’s caseagainst Archer is not without appeal atfirst blush. He did, after all, purchaseWLCC bonds using misappropriated pro-ceeds that he received from Jason Galanis.But when each piece of evidence in thisindisputably complex case is examinedwith scrutiny and in the context of all thefacts presented, the government’s caseagainst Archer loses much of its force.

First, the government’s overwhelmingreliance on circumstantial evidence is cou-pled with Jason Galanis’ deception, includ-ing of those who intentionally aided hiscrimes. His modus operandi was to com-partmentalize his schemes, such that eachparticipant knew only that which was es-sential to his or her narrowly definedrole. Indeed, the trial record is repletewith acknowledgements by accomplices ofJason Galanis that he was intentionallydeceptive, rendering them unaware ofvarious aspects of his illegal conduct—in-cluding those central to the WLCCscheme—and that sometimes they did notlearn the truth until they reviewed theindictment in this case or were otherwise

informed by the government. See Tr.932:7–14, 933:17–20, 1028:4–10, 1120:17–1121:10, 1126:5–1128:17, 1142:12–21,1311:24–1312:6, 1339:10–24, 1425:1–15,1557:2–6, 2142:6–13, 2144:1–22, 2159:8–21,2296:9–18, 2326:8–15, 2329:16–23, 2332:21–2333:17, 2335:2–4, 2336:5–7, 2345:15–2346:2.

This ignorance extended so far as tospecific transactions in which they wereinvolved. For example, the government’scooperating witnesses only learned thatthe WLCC deal was fraudulent by virtueof their independent observations. Dunker-ley, despite his close relationship with Ga-lanis and after already having performeddiscrete acts in furtherance of the conspir-acy, arrived at this realization only whenhe noticed that the bond proceeds in theWAPC account, to which he had access,were not being used to purchase an annui-ty. See Tr. 1310:13–21. There were no suchclues for Archer. Moreover, the evidencedemonstrated that Galanis viewed Archeras a pawn to be used in furtherance of hisvarious criminal schemes. See, e.g., DX4078. The role of Jason Galanis as it per-tains to the defendants’ intent is all themore vexing in light of the legitimate rollup plan, which involved many of the sameentities and actors. It is through this prismthat the evidence in this case must beassessed.

The Court’s concerns are further exac-erbated by the government’s inabilitythroughout trial to articulate a compellingmotive for Archer to engage in this fraud.Although the government is of course notrequired to prove motive, it is notable thatArcher never received money from thepurported annuity provider, nor did heprofit directly from the misappropriationof the bond proceeds.17 The theory on

17. At trial, the government advanced a theorythat Archer profited by way of $700,513 in

misappropriated proceeds he received fromThorsdale, the entity controlled by Jason Ga-


which the government now relies is thatArcher’s admitted interest in the roll upbeing successful—due, principally, to hisownership interest in Burnham and theshares of WAH stock he received for serv-ing on the board—created a motive forhim to participate in the WLCC fraud,which, the government contends, providedfunds critical to the roll up’s success. TheCourt cannot dismiss this possibility en-tirely, though it is mitigated by the factthat Archer’s commitment to the roll upalso resulted in him spending substantialamounts of his own money, with one calcu-lation offered by Archer estimating that helost approximately $800,000 during the rel-evant period. See Tr. 3567:21–23; DX 9003.Nonetheless, the fact that Archer did notprofit by virtue of retaining bond proceedsthat he received, either directly or indi-rectly, from the purported annuity provid-er is a significant distinction between himand his co-defendants. See GX 4013 (entitycontrolled by John Galanis received $2.35million directly from WAPC); GX 4009(Cooney received $75,000 directly fromWAPC); cf. GX 4012 (documenting themany millions of misappropriated fundsJason Galanis spent on himself); Tr.1005:14–18, 1096:1–5 (Dunkerley received$125,000 at close of first bond issuance forbeing the placement agent even though hedid not actually have to locate purchasersof the bonds); Tr. 2143:20–25, 2147:6–18,2149:3–8 (Martin received $150,000 forserving as the investment manager for theannuity even though one was never pur-chased).

[16] While some of Archer’s conduct istroubling—particularly his repeated failureto disclose his involvement with Jason Ga-lanis—the Court remains unconvinced thatArcher knew that Jason Galanis wasperpetrating a massive fraud. In short,when permitted to weigh the evidence onits own, as Rule 33 allows, the Court is leftwith an unwavering concern that Archer isinnocent of the crimes charged.

The government’s case as to Archer’sintent was comprised primarily of the fol-lowing evidence: (1) his purchase of $15million of WLCC bonds; (2) emails involv-ing him, Cooney, and Jason Galanis; (3)purported lies he told Morgan Stanley andDeutsche Bank in the course of custodyingthe WLCC bonds and to the Board ofTrustees of the Burnham Investors Trust(‘‘BIT Board’’); and (4) various alleged ef-forts to cover up the WLCC scheme. TheCourt will address each in turn.

i. Archer’s Purchase of theSecond Tranche

The primary aspect of the government’scase against Archer was his purchase ofWLCC bonds using proceeds from thefirst issuance. This $15 million representedapproximately one-fourth of the totalamount misappropriated during the courseof the conspiracy. It is undisputed thatArcher knew Jason Galanis supplied themoney. See GX 2228. What is disputed,however, is whether he knew the fundsGalanis gave him were misappropriatedbond proceeds.

It is imperative to understand the nu-ances of these transactions, which were

lanis. See GX 4012. Cross-examination estab-lished, however, that this was not the case.The evidence on which the relevant govern-ment chart was based consisted of two wiresfrom Thorsdale to RSB: one for $100,000and a second for $600,513. The transfer for$100,000 appears to have been repayment ofa loan made to Thorsdale by RSB one month

earlier while the second wire was soon there-after returned to Thorsdale. See Tr. 3002:25–3028:16. Indeed, the government seems tohave abandoned its argument that thesetransfers are evidence of motive, instead de-scribing the money as being ‘‘funneled’’through RSB’s account in the course of theconspiracy. See Govt Opp. at 51.


structured intricately by Jason Galanis,presumably, to aid his deception. It is clearfrom the record that Archer knew JasonGalanis was providing the money for himto purchase his portion of the secondtranche. But critically, the funds were nottransferred to Archer from WAPC, aswhen John Galanis received misappropri-ated proceeds. See GX 4013. Instead, themoney took a circuitous route. HughDunkerley, operating at the direction ofJason Galanis, transferred $15 million toThorsdale, the entity controlled by Galanis,at which point it was wired to CliffordWolff, an attorney who represented Galan-is in various transactions. See GX 4006. Itwas only then that Wolff sent the funds toan account belonging to RSB, an entitythat, as previously discussed, was con-trolled by Archer. See id. RSB in turnpurchased $15 million of WLCC bonds. Seeid.

Despite his involvement, the governmentpresented no evidence that Archer knewthat these funds came from WAPC, whichpresumably would have operated as a redflag. Moreover, the first transaction in thisseries was effected in a manner intendedto prevent anyone from realizing that thefunds were coming from the purportedannuity provider. Instead of merely wiringthe money, pursuant to an explicit instruc-tion by Jason Galanis, Dunkerley went to abank and withdrew $15 million from theWAPC account and then separately depos-ited it into Thorsdale’s account. Tr. 1514:1–12, 1516:10–1517:15. As opposed to when atransfer is effected by wire, it is onlypossible to connect these two transactionsby simultaneously examining the recordsfor the two accounts and because a bankemployee wrote on the withdrawal slipthat the money was being deposited intoThorsdale’s account. See GX 565; Tr.1525:12–24. This was the only occasion onwhich Dunkerley effected a transfer fromthe WAPC account in this manner. Tr.

1517:13–17. The transfer from Thorsdaleto the Wolff Law Firm was also accompa-nied by an email from Francisco Martin,ghost-written by Jason Galanis, in whichMartin ‘‘[t]hank[ed]’’ Wolff for his ‘‘assis-tance in helping to settle this investmentfor your client.’’ DX 4795; accord Tr.2339:24–2340:22.

Perhaps most critically, even Dunkerley,who the evidence showed was privy tomore aspects of Jason Galanis’ variouscriminal acts than virtually anyone else—including frauds in which Archer is notalleged to have played any role—did notrealize either (1) that the $15 million fromthe WAPC account was ultimately beingsent to Archer or (2) that Archer ultimate-ly purchased bonds with misappropriatedproceeds. See Tr. 1028:5–10, 1312:8–13. In-stead, Jason Galanis told Dunkerley, whowas an active participant in this series oftransactions, that Archer had a contractfrom China to make investments in theUnited States, which required him to usethe money by a certain date. See Tr.1025:2–7. Archer, according to Galanis,was going to buy the bonds in order to‘‘effectively park the money so that hecould use it for future investments as theycame up.’’ Tr. 1025:8–10. The fact thatDunkerley knew only the details of the onetransaction of this series in which he wasdirectly involved—sending the money fromWAPC to Thorsdale—counsels stronglyagainst concluding that Archer had insightinto the entire sequence, which would benecessary for him, as the recipient of thefinal transfer, to know where the moneyoriginated from, namely the WAPC ac-count.

In sum, there was no evidence presentedthat Archer was aware that the moneybeing provided by Jason Galanis constitut-ed proceeds from the first issuance. As theCourt has described, moreover, other as-pects of the record suggest that he did not


know. Indeed, Jason Galanis’ measures tohide that he was sending Archer moneyfrom the WAPC account stands in starkcontrast to other occasions on which JasonGalanis misappropriated proceeds, such aswhen money was sent directly to the ac-count of an entity effectively controlled byhis father and other funds were wireddirectly to Thorsdale. See GX 4003 at 4.And as previously noted, Dunkerley, whowas instrumental in transferring the fundsin question to Archer, only realized thatbond proceeds were being misappropriatedat all due to his access to the WAPCaccount, which obviously revealed that thefunds were not being used to purchase anannuity. See Tr. 1310:13–21. The evidenceindicates that Archer had no such access.See Tr. 1339:25–1340:3.18

ii. Emails Involving Jason Galanis,Archer, and Cooney

The government next argues that emailsbetween Archer, Cooney, and Jason Galan-is, particularly those sent by Galanis, dem-onstrate an intention to steal the bondproceeds and defraud the clients ofHughes and Atlantic. These emails wereread into evidence by law enforcementagents without any accompanying testimo-ny. Indeed, the government’s two wit-nesses who were participants in thescheme—Hugh Dunkerley and FranciscoMartin—were not parties to these mes-sages and could not interpret or explainthe statements made therein. The govern-ment is, of course, not required to offertestimony accompanying such evidence. Asthe Court will explain, however, the lan-guage in the emails is facially innocuousor, at best, most naturally subject to inno-cent interpretations. Thus, although the

government urged the jury to construethese emails as evidence of the defendants’intent to perpetrate fraud, the Court viewsthem as more probative of Archer’s inno-cence.

Broadly speaking, the emails concerntwo topics: (1) the genesis of the WLCCbond offerings, including planning the firstissuance, and (2) the acquisitions ofHughes and Atlantic. The Court will ad-dress each in turn.

As for the emails regarding the struc-turing of the WLCC bond deal, the gov-ernment points to terms such as ‘‘liquidity’’and ‘‘discretionary’’ as if they are neces-sarily evidence of criminal intent. But thegovernment interprets these communica-tions with the benefit of hindsight, know-ing that Jason Galanis in fact misappropri-ated the proceeds. Instead, the criticalquestion is what these emails say aboutArcher’s intent at the time they weremade. As the government rightly notes,evidence must be interpreted in context,which also requires the Court to considerthat these communications were sentamong three individuals attempting tocomplete the previously discussed roll upplan, a primary goal of which was to in-crease assets under management. See DX4733 at 13. That the defendants, by virtueof the WLCC bond deal, may have in-creased, or wanted to increase, the assetsover which they had discretion to invest isnot evidence of criminal intent. Further-more, the annuity was intended to includeprivate equity investments. See GX 209 at10, GX 210 at 11 (agreements providing forthe annuity to include private equity in-vestments); Tr. 370:17–19, 372:9–15,

18. Related to this transaction, the governmentasserts in a footnote in its opposition papersthat the letter submitted by Archer to theWLCC indicating that he was a sophisticatedinvestor could itself be an actionable misstate-ment. See Govt Opp. at 54 n.16 (citing GX

281). Assuming that the letter in fact con-tained a material misstatement, the govern-ment would still need to demonstrate that itwas made with the requisite intent and theCourt’s Rule 33 analysis thus remains appli-cable.


500:22–504:6 (Anderson, the attorney whorepresented BSI, the placement agent forthe bonds, understood that the bond pro-ceeds would be invested in private equity,agreeing that such investments ‘‘typicallyinvolve taking a substantial stake or evencontrol of a company’’). Therefore, thatcertain communications may indicate ahope or belief that the defendants wouldbenefit from the WLCC bond deal by vir-tue of it helping to advance the roll updoes not mean that such benefit was mutu-ally understood to result from stealing thebond money. In fact, consistent with theseagreements, Dunkerley and Galanis evenplanned to cover up the theft of the pro-ceeds by telling the WLCC that the bondmoney had been invested in various com-panies acquired in the course of the roll upand that the returns on their ownershipstake in these entities were sufficient forthe annuity to generate the expected re-turns. See Tr. 1057:5–10.

For instance, one of the first emailsconnecting Archer to the WLCC scheme,and on which the government places muchweight, is an April 2014 message fromJason Galanis regarding a transaction thatnever came to fruition, in which he wrote‘‘$20mm bond approved. Proceeds are15mm to us and 5mm to them for a wineryinvestment they want to make.’’ GX 2011.In the government’s view, Galanis wascommunicating that he and the defendantswere free do as they wished with the $15million. But a more reasonable interpreta-tion of this message is that Galanis wasconveying that $5 million of the bond pro-ceeds would be immediately distributed tothe WLCC while the remaining $15 millionwas to be invested on its behalf, therebyincreasing assets under management. In-deed, this was similar to the structure ofthe deal that was eventually consummated,where $2.25 million was distributed imme-diately to the WLCC and roughly $24 mil-lion was earmarked for investment. See

GX 4003. This interpretation also comportswith the opinion letter from a law firmattached to the message. See GX 2011.Moreover, Cooney replied, asking, ‘‘[w]hatdo we get to do with the 15mm.’’ GX 2120.While the government argues that this isfurther probative of criminal intent, amore natural inference is that Cooney didnot understand Galanis to mean that theywould steal the money but instead thatthere would be limitations of some sort onhow the funds could be used, presumablypursuant to the agreements that wouldgovern the contemplated transaction.

The Court is similarly concerned about apossible misinterpretation of Galanis’ re-sponse that the funds were ‘‘discretion-ary.’’ Id. Archer could easily have under-stood Galanis to be referring to the factthat the group would be able to invest themoney for the WLCC as they saw fit, solong as they complied with any restrictionsput in place by the client. This is not anovel concept. Discretionary liquidity isfrequently referenced in the course of dis-cussing perfectly legitimate transactionsand entities, including the sorts at issue inthe case at hand. See GX 2029 (noting thatHughes ‘‘manages $900 million on a discre-tionary basis for 29 institutional clients(pensions and endowments)’’ (emphasisadded) ); GX 2303 (noting that Atlantic‘‘managed on a discretionary basis approx-imately US $1.8869 billion of client assetsand provides advisory services on a non-discretionary basis with respect to US$7.1457 billion of client assets’’ (emphasisadded) ); DX 4733 at 13 (Burnham pitchdeck emphasizing its discretionary assetsunder management); Tr. 650:19–651:8;855:2–14; 1397:18–1398:4; 1605:20–1606:2;1635:22–1636:4; 1660:8–12; 1673:13–20.

The foregoing analysis similarly appliesto other emails in which Galanis empha-sized the need for discretionary liquidity.See GX 1221 (June 2014 email correspon-


dence in which Galanis informed Archerthat he was working with ‘‘dan and Hughon capital vehicles that result in us control-ling discretionary funds’’ which would pro-vide them with ‘‘money to invest,’’ to whichArcher responded that ‘‘[w]e need discre-tionary funds at our command soonest,’’and to which Galanis replied that he wasfocused on ‘‘discretionary’’); GX 2025 (Ga-lanis writing ‘‘with some dry powder in ourcontrol soon, we will be scary effective’’);GX 2026 (Galanis providing an update onthe progress towards closing the transac-tion, adding ‘‘shooting for the end ofmonth. lots to accomplish to finesse thisover the line, im not counting the moneyyet TTT my primary objective is to get us asource of discretionary liquidity. sick ofbegging.’’); GX 2031 (on eve of closing offirst issuance Galanis writes ‘‘[i]f I get this$28mm, I have 12-15mm to put into WAH[Wealth Assurance Holdings]’’); GX 2065(November 20, 2014 email from Galanis inwhich he lays out the details of a potentialfuture bond deal, including that proceedswould be placed in a WAH annuity, withreturns being ‘‘generated by a diversifiedprivate equity portfolio in order to growTribal assets’’); GX 2216 (‘‘Dan and Hughhave locked [Fondinvest] up and came tome for the money, which I have agreed toarrange/provide (probably Indians).’’).19

The Court’s concern is further exacer-bated when, as it must, the evidence isconstrued cumulatively and not in iso-lation. On June 20, 2014, Jason Galanis

emailed Archer and Cooney, writing‘‘Arch[,] the Indians signed two hours agoour engagement TTT Nothing for you to doat this point, but giving you a heads up.The use of the proceeds is to place thebond proceeds into a Wealth AssuranceannuityTTTT btw, annuity proceeds get in-vested by an appointed manager on a dis-cretionary basis on a 20 year contract.Hercules has been appointed.’’ GX 1235.Far from being inculpatory, this email ap-pears exculpatory because Galanis is spe-cifically representing that the bond pro-ceeds would be placed in an annuity. Itfurther seems clear that when these indi-viduals used the word discretionary in thiscontext they were referencing the abilityof an asset manager to exercise discretionin selecting investments for a client, in thiscase the WLCC. Galanis’ response sup-ports Archer’s argument that this is proba-tive of his belief that the proceeds could belegitimately invested on behalf of theWLCC while simultaneously advancing theroll up. Although Jason Galanis likely in-tended to steal the bond proceeds by thispoint, the Court remains unconvinced thathe communicated such intent in these mes-sages, or, more critically, that Archer un-derstood him so. As noted earlier, duringthis period even Dunkerley and Martinbelieved the WLCC deal was legitimate.See Tr. 1139:24–1140:5, 2296:9–18.

Other emails regarding the first bondissuance are simply status updates, whichappear facially innocuous. See GX 1220

19. The government rightly notes in its opposi-tion papers that Jason Galanis in fact laterused $5.4 million in proceeds from the finalbond issuance to purchase Fondinvest. SeeGX 4009. Archer contends that he plausiblyunderstood this to mean that proceeds wouldhave been used in the acquisition of Fondin-vest, with the WLCC enjoying a stake in thecompany, i.e., as a private equity investment.The government’s counter to this argumentappears to be the conclusory statement thatArcher knew he and his alleged co-conspira-

tors were instead using the bond proceeds forthemselves. See Govt Opp. at 33 n.13 (‘‘Therewas no annuity, and Archer knew that he andothers were using the proceeds of the bondissuances for themselves and not, as promisedto the WLCC, to an annuity.’’). But as theCourt has noted, it was specifically contem-plated that investments on behalf of theWLCC would include private equity. See GX209 at 10, GX 210 at 11; Tr. 370:17–19,372:9–15, 500:22–504:6


(Galanis forwarding email correspondencewith Tim Anderson and writing that hewas ‘‘moving the $20MM sovereign nationdebt issued’’); GX 1267 (‘‘closing soon’’ inreference to the first issuance); GX 2026(‘‘we got US Bank to act as trustee for thebond issue,’’ ‘‘GT is issuer counsel,’’ and‘‘Tribe counsel met and approved the is-sue’’); GX 2027 (Galanis writing that theywere ‘‘close’’ and ‘‘target close is July 31’’);GX 2031 (Galanis stating he was ‘‘in clos-ing docs on $28mm with GT. Close. Couldfall apart but close.’’); GX 2217 (‘‘WilmaStanding Bear and Geneva Lone Hill havefully executed the agreements’’).

Finally, the government cites to variousmessages from Archer and Cooney inwhich they express enthusiasm in responseto the information provided by Jason Ga-lanis. See GX 2024 (Cooney respondingwith a picture of a Jack playing card andwriting ‘‘The Greek! [which was a nick-name for Galanis]’’); GX 2026 (Archer re-sponding ‘‘Unreal! This is just a testamentto taking a portfolio approach to pursuingopportunity (aka the ping pong method).Unreal as you never know where the nug-gets pop up.’’); GX 2026 (Archer respond-ing ‘‘Appreciate that Jack! And completelycorrect!’’); GX 2028 (Archer writing‘‘[f]rom your lips to Gods ears! July 31 isright around the corner.’’); GX 2031 (Arch-er stating ‘‘I’m not sure I can take any-more of the precious. It’s incredibly capitalintensive greenfield work. But let’s discussbecause there’s also a lot of blue sky!’’). Inthe Court’s view, these emails simply donot give rise to the inference urged by thegovernment.

The same is true of the emails related tothe acquisitions of Hughes and Atlantic.There was nothing inherently illegal orillegitimate about these transactions, eventhough they were motivated by a desire tolocate purchasers of the WLCC bonds.20

Rather, the fraud as it pertains to theinvestment advisers is that bonds werepurchased for their clients without disclo-sure of all of the potential conflicts ofinterest and the bonds fell outside certainclients’ investment parameters.21

The emails relied on by the governmentmake it clear that Archer was aware ofthe acquisitions of Hughes and Atlantic, aswell as the goal that these transactionswould facilitate the sale of WLCC bonds.See GX 1229 (in reference to acquisition ofAtlantic closing, Galanis noting that it‘‘will be nice to have dry powder to fire’’);GX 2018 (Galanis emailing Archer, Coo-ney, and Andrew Godfrey regardingHughes, noting that firm has ‘‘$1.0 billionAUM [assets under management]. allfixed income. 52 clients. all institutional.’’);GX 2029 (Galanis forwarding executedterm sheet for acquisition of Hughes andnoting that it ‘‘manages $900 million on adiscretionary basis for 28 institutionalclients (pensions and endowments)’’); GX2034 (‘‘WAAG wired $2.78 million today toclose Hughes.’’); GX 2242 (discussing howacquisition of Atlantic would provide‘‘more liquidity and sources for the variousprojects’’ and that it could be used to pur-chase WLCC bonds, months before its ac-quisition); GX 2303 (email from Galanisindicating that ‘‘we have a decent shot of

20. The one caveat is that the acquisition ofHughes was financed through the so-calledBallybunion fraud, see DX 4060 at 2 (condi-tioning $2.76 million for acquisition ofHughes on release of Ballybunion proceeds),a separate crime committed by Jason Galanisand Hugh Dunkerley in which none of thesedefendants are implicated, see Tr. 1151:4–8

(Dunkerley was told by Jason Galanis not totell anyone else about the Ballybunion fraud).

21. The Court notes that certain of the con-flicts were apparently disclosed. See Tr.508:15–509:8 (Dunkerley’s involvement inboth WAAG and BSI was disclosed in privateplacement memorandum); GX1334.


adding [Atlantic] to the family’’); see alsoGX 1224, GX 1228, GX 1282, GX 2037, GX2063, GX 2076, GX 2078. There is no indi-cation, however, that the individuals incontrol of the investment advisers, Mortonand Hirst, would fail to disclose the con-flicts of interest or violate the terms of theclients’ investor agreements. Indeed, cer-tain emails to which the governmentpoints support the opposite inference,namely that there existed a hope thatclients of Hughes and Atlantic would pur-chase WLCC bonds, but no intent to uni-laterally foist the bonds upon them. SeeGX 2029 (Galanis writing that ‘‘[w]e haveagreed to give’’ Hughes ‘‘an opportunityto participate in Native American newbond issues’’ and asserting his belief thatit would take ‘‘$28 million of the Wakpam-ni/Ogala [sic ] Sioux issue’’ (emphasis add-ed) ).

The government, finally, places muchemphasis on two emails related to JasonGalanis’ purchase of a condominium inNew York City, which was made in partwith bond proceeds. On July 9, 2014, Clif-ford Wolff emailed Archer and his assis-tant, Sebastian Momtazi, that Galanis wasgoing to ‘‘purchase a condo using theabove name [Archer Diversified TRG,LLC] and Devon’s cache [sic ]. The compa-ny is using your office address.’’ GX 2122.Later that month, Galanis, in an emailthread in which he had previously specifiedthat the closing date for the WLCC dealwas July 31, commented ‘‘so close. Cliff isrunning the stall for me on nyc mansion[.]I want to be here and won’t live in a 1750square foot cage[.] Massively motivated.’’GX 2028. The inference urged by the gov-ernment is that Archer knew Galanis wasgoing to later use bond proceeds to pur-chase the condominium.

The Court is not convinced that thiscorrespondence leads to the inferenceurged by the government. It is true that

these emails suggest that Archer permit-ted Galanis, with whom he was working atthe time, to effectively trade on his namein attempting to purchase a condominium.But that misleading impression is not pro-bative of whether Archer knew Galaniswas going to steal the bond proceeds.Moreover, that Galanis expressed the de-sire to make this real estate purchase in anemail in which he also addressed theWLCC bond deal does not lead to theinference that he would ultimately financethis purchase, in part, with misappropriat-ed bond proceeds. As Archer notes, it canalso be read as merely affirming that Ga-lanis was going to purchase the property ifthe deal went through (e.g., in part usingmoney he might legitimately earn from thebond deal or fees later generated as aresult of the anticipated investment on be-half of the WLCC). Burnham, a subsidiaryof which was set to be the placement agentfor the bonds, also maintained its offices inManhattan, making the discussion of Ga-lanis’ anticipated move to New York Cityin the context of discussing the closing ofthe WLCC deal not illogical.

But the more critical point is this: be-cause this email was admitted with noaccompanying testimony or other evidenceprobative of its meaning, the Court (as thejury was) is left to speculate as to whetherGalanis was implicitly conveying criminalintent to Archer. The Court is hesitant toconclude from this correspondence thatGalanis was effectively stating that he in-tended to steal the bond proceeds, which issimply too large an inferential leap. Theinference urged by the government is fur-ther undercut by the fact that Galanisfinanced the rest of this purchase by di-verting money from Valorife, under thepretense that it was purchasing WLCCbonds. See GX 4015, DX 4127, DX 4824,Tr. 3539:4–3541:1. There is no indicationthat Archer was involved in that conduct.


One final point bears mentioning: thegovernment attempts to read nefarious in-tent into certain of these messages bysuggesting that the defendants knew thatJason Galanis intended to steal the bondproceeds because he was short on moneybut nonetheless discussed extravagant ex-penditures, such as a condominium in NewYork. This suggestion is unpersuasive,however, in light of the extensive evidencepresented at trial demonstrating that Ja-son Galanis successfully misled virtuallyevery person he met into thinking he wasimmensely wealthy and successful. See,e.g., Tr. 2306:1–2303:17.

In sum, the Court does not view thisbody of evidence as tending to show thatArcher was in fact aware of Galanis’ theft.Indeed, certain emails, most notably Gov-ernment Exhibit 1235, tend to show theopposite, namely that Archer had goodreason to believe the WLCC bond deal waslegitimate. At a bare minimum, the infer-ences urged by Archer are more closelytethered to the actual language used inthese communications.

iii. Purported Lies to MorganStanley, Deutsche Bank,

and the BIT Board

The most damaging evidence againstArcher, in the Court’s view, were the pur-ported lies he told three entities: MorganStanley, Deutsche Bank, and the BITBoard. While certain of these statementswere clearly misleading, as the Court willexplain the primary manner in which theywere deceptive—hiding the involvement ofJason Galanis—does not lead to the ulti-mate conclusion necessary for Archer’sguilt: that he was misleading because heknew Galanis was stealing the bond pro-ceeds.

Archer’s statements to Morgan Stanleyand Deutsche Bank occurred in the courseof identifying an institution to custody theWLCC bonds he purchased in the second

tranche, which simply entails storing them.See Tr. 833:3–11. The government arguesthat Archer lied about the source of the$15 million he used to purchase the bondswhen he told both entities that the moneywas generated via real estate sales. SeeGX 344, GX 1226. Archer contends thatthese statements were accurate in his viewat the time because he was merely repeat-ing lies Jason Galanis had told him aboutthe source of the funds. There were alsotwo pieces of evidence, however, that indi-cate the funds were generated by realestate sales specifically completed by RSB,as opposed to a third party, which wouldconstitute statements that Archer clearlyknew to be false. See GX 345, GX 352 at 4.Archer asserts that he did not actuallyprovide this information because the state-ments in question were made by a MorganStanley employee, who must have assumedthat any transactions generating the fundshad been completed by the entity on whosebehalf the bonds would be custodied, RSB.The appropriate inference, in the govern-ment’s view, is that Archer lied about thesource of the money because he knew thatit constituted bond proceeds recycled fromthe first issuance.

The communications with the BITBoard, on the other hand, were not relatedto the WLCC bond deal. Instead, thesestatements arose in the course of Archer’spursuit of the roll up plan. The BurnhamInvestors Trust, managed by the BITBoard, was the largest client of BAM,which, as previously discussed, was a sub-sidiary of Burnham. Tr. 2666:13–2667:9.Archer wished to retain the Trust as aclient. The BIT Board and Archer engagedin a prolonged negotiation, each advised bylegal counsel, in the course of which Arch-er made certain representations about theinvolvement of Jason Galanis, or rather,his lack of involvement in various entitiesrelated to Burnham. See GX 762 at 1–2,


GX 763 at 3, Tr. 2765:1–2778:20. The gov-ernment argues that Archer lied, which, itcontends, is probative of his intent withrespect to the WLCC scheme. Archercounters that the very technical state-ments with which he agreed to comply,with the advice of counsel, were in facttrue, despite the involvement of Jason Ga-lanis in certain capacities.

There are fair arguments by both thegovernment and Archer about the state-ments he made to these entities andwhether they were literally true, false, ortechnically true but nonetheless mislead-ing. At the very least, it is a fair inferencethat even if Archer’s various statementswere technically true, he misled these enti-ties and violated the spirit of his represen-tations. Indeed, when crediting Archer’sarguments as to the statements he madeto the banks, his failure to acknowledgethat a third party (Jason Galanis) providedthe money is what led to Morgan Stanley’sallegedly faulty assumption that the trans-actions generating the funds had beencompleted by RSB. The Court remainsunconvinced, however, that this evidence,even considered with the rest of the gov-ernment’s case, establishes the only issuethat matters for purposes of establishingArcher’s guilt: that he was misleading be-cause he knew that Jason Galanis wasstealing the bond proceeds.

With respect to Morgan Stanley andDeutsche Bank, there are two possible in-ferences to be drawn from Archer’s state-ments that the money used to purchasethe bonds came from real estate sales: (1)he hid the fact that the funds constitutedrecycled bond proceeds and (2) he hid theinvolvement of Galanis. The probative val-ue of the evidence with regard to the firstinference, however, hinges on the assump-tion of the very fact for which it is offered.It is undisputed that the funds constitutedmisappropriated proceeds, rendering the

statement false. It is only probative ofArcher’s intent, however, if he knew thestatement was false. For all the reasonsthe Court has and will articulate, it doesnot find that particular inference persua-sive. The inference is further weakened bythe fact that Galanis specifically held him-self out as having made money from realestate, bolstering the notion that Archermay well have repeated a lie told to him byGalanis. See Tr. 480:6–15; 924:3–14;1417:18–20; 1418:1–18; 2305:19–22. Morelikely, in the Court’s view, is that Archerwas hiding the involvement of Galanis,whose role in supplying the money wasindisputably a fact of which Archer wasaware. There were other reasons, however,Archer may not have wanted to discloseGalanis’ involvement that, while deceptive,are not probative of his intent with respectto the charged conspiracy.

Galanis, even during the relevant period,had a well-documented checkered past. Al-though he had never been charged crimi-nally, he had been barred by the SECfrom serving on the board, or as an officer,of a public company, though it had expiredby the time of these events. Tr. 1332:3–8.In spite of this, the evidence at trial dem-onstrated that Galanis had many admirersin addition to his critics. See Tr. 904:10–16(Dunkerley testifying that he had beentold by Jason Sugarman that Galanis ‘‘hada mixed reputation, that fifty percent ofthe people who knew him didn’t like himand fifty percent of the people who knewhim did like him’’). It is thus reasonable tobelieve that Archer misled the banks notbecause he knew Galanis was stealing thebond proceeds, but instead because he si-multaneously viewed Galanis as a businessasset while realizing that he was a highlycontroversial figure. Indeed, in an emailfrom Archer to Matt Nordgren on Decem-ber 19, 2014, Archer specifically noted, inregard to Galanis’ involvement in Burn-ham, that there were ‘‘regulatory issues


with [Galanis] so [he couldn’t] mention hisname.’’ GX 2066. Bolstering the strengthof this inference, the communications atissue occurred in October 2014 on theheels of the aforementioned negotiationswith the BIT Board, in which one of theprimary concerns expressed by the Boardwas the involvement of Jason Galanis. SeeGX 762 (Archer’s representation letterdated September 26, 2014).

The ultimate inference advocated by thegovernment—that Archer knew about Ga-lanis stealing the bond proceeds—is fur-ther undercut when Archer’s statementsare viewed in light of Dunkerley’s testimo-ny, the witness who provided the greatestinsight into Jason Galanis’ methods. Dunk-erley definitively established that even Ga-lanis’ co-conspirators were ignorant aboutthe details and import of transactions withwhich they were intimately involved. Asnoted earlier, Dunkerley had no idea thatproceeds were being recycled to buy morebonds or that proceeds were being sent toArcher. See Tr. 1028:5–10, 1312:8–13. Whatis clear from his testimony is that hisknowledge of the illegal nature of theWLCC scheme derived from what he per-sonally observed—not what Galanis com-municated to him. It was Dunkerley’s ac-cess to the WAPC account that informedhim of the bond misappropriation. See Tr.1310:13–21. Archer was not privy to suchinformation. See Tr. 1339:25–1340:3. Theinference advanced by the government,therefore, depends largely on the assump-tion that Galanis had a conversation orcorrespondence with Archer that he neverhad with Dunkerley (or Martin, the othercooperating witness) proactively informinghim that the WLCC deal was a fraudulentscheme. In light of the substantial evi-dence in the form of the government’s ownwitnesses undercutting that notion, as wellas the absence of any evidence that Galan-is ever admitted as much to Archer—notto mention the other reasons Archer had

for being deceptive, which are not proba-tive of his intent in the context of thecharged crimes—the Court remains con-cerned that Archer did not mislead Mor-gan Stanley and Deutsche Bank becausehe knew Galanis was misappropriatingbond proceeds.

The inference urged by the governmentis even less persuasive with respect to theBIT Board evidence, which, as the Courtnoted, did not concern the WLCC bonddeal. Assuming the factual predicate of thegovernment’s argument, Archer did notfully disclose the involvement of Jason Ga-lanis in various entities related to theBoard, primarily his role as an adviser tothe boards of WAH and WAAG and hisactively working with Archer on theWLCC deal. The probative value of thisevidence is that Archer was misleadingabout Galanis’ involvement. And yet againthe conclusion necessary to deem Archerguilty requires one more inferential leap:that Archer misled the BIT Board becausehe knew Galanis was stealing the bondmoney. As discussed above, there is sub-stantial evidence cutting against this infer-ence.

Relatedly, the government further alleg-es that Archer lied to the BIT Board whenhe denied being involved in the eventsdescribed in a complaint filed by the SECagainst Atlantic and being one of the anon-ymous defendants described therein. SeeGX 784 at 1–2. As an initial matter, thegovernment conceded at trial that Archeris not in fact one of the defendants de-scribed in the complaint. Tr. 3239:12–13.While the government alleges that Archerwas a member of the conspiracy here,which included defrauding the clients ofAtlantic, it has never alleged that he per-sonally failed to disclose the material con-flicts of interest or violated the clients’investor agreements. Those duties wereinstead within the province of other mem-


bers of the alleged conspiracy, namelyMorton and Hirst.

The Court recognizes that Archer madestatements intended to mislead these vari-ous entities, which is of course troubling.In light of the contexts in which Archerwas deceptive, however, this evidence isnot directly probative of his guilt withrespect to the crimes charged in this in-dictment. Particularly bearing in mind thevery plausible reasons for Archer to other-wise hide Galanis’ involvement and theunique features of this case stemmingfrom Galanis’ deception, the Court thuscontinues to harbor a concern that Archeris innocent.

iv. Archer’s Alleged Involvementin the Cover-Up

The government, finally, presented sev-eral pieces of evidence that, it claims, showArcher tried to cover up the scheme: (1)he made a $250,000 payment to the WAPCaccount shortly before the initial interestpayment was due on the first set of bonds;(2) he sent an email referencing a fakeentity, Calvert Capital, that was created tocover-up the bond scheme; and (3) he sentan email to Cooney and others discussingthe next steps forward in light of JasonGalanis’ arrest on unrelated charges inSeptember 2015. This evidence does notalter the Court’s doubt that Archer wasunaware of Jason Galanis’ fraud.

Archer does not dispute that he trans-ferred $250,000 to the WAPC account,which, again, belonged to the purportedannuity provider and was the account fromwhich proceeds were wired in the course ofthe misappropriation. See GX 4010. Theimport of this evidence, in the govern-

ment’s view, is that Archer provided thismoney so that it could be used to make theinitial interest payment to the bondholderswho acquired bonds in the first issuance,thus delaying discovery of the fraud. Butwhen construed in light of the roll up plan,the inference urged by Archer is equally ifnot more compelling.

Indeed, there are a variety of reasons,other than that the bond proceeds werebeing misappropriated, that could explainwhy Archer would make such a transfer.First, the evidence showed that it wasrelatively common for Archer to supplyliquidity to entities with which he was affil-iated. See DX 9003 at 5; Tr. 3562:12–3568:1. Critically, even Dunkerley testifiedthat although he knew WAPC was notactually affiliated with WAH, to the best ofhis knowledge he was the only member ofthe WAH Board, which included Archer, torealize this because Jason Galanis had cre-ated a fake subscription agreement be-tween the two companies. Tr. 1459:8–1461:12. And the governing documents ofthe bond transaction were unambiguousthat the anticipated investment on behalfof the WLCC entailed risk, as all invest-ments do. As noted earlier, this one pos-sessed an even greater risk profile than atypical annuity by virtue of including pri-vate equity investments. See GX 209 at 10,GX 210 at 11; Tr. 515:9–516:15. It is thusjust as consistent with Archer’s transfer ofmoney that he was intending to assist whathe believed to be a legitimate transactionby providing liquidity needed in the short-term.22

Next, the government places great em-phasis on an email in which Archer refer-

22. Of the amount that Archer and otherstransferred into the account in early Septem-ber 2015, $240,000 was transferred to Thors-dale, presumably for Jason Galanis’ personalaffairs. See GX 4010, GX 512 at 66. Theseevents serve to further illustrate that Jason

Galanis and Archer were not as closelyaligned as the government claims and alsofurther undercuts the notion that Archer wasaware that the money he supplied was beingused for illegitimate purposes because Galan-is was simultaneously stealing from Archer.


ences Calvert, a sham entity that wascreated by Hugh Dunkerley, FranciscoMartin, and Jason Galanis to assist in thecover-up of the WLCC scheme. In writingto Mark Waddington, who is not allegedto have been a member of the conspiracy,Archer noted that the bonds he pur-chased in the second tranche, then heldby VL Assurance, were ‘‘to be re-placed/returned to Calvert,’’ adding in asubsequent message in the exchange that‘‘the consensus is we would like to returnthese bonds to the lender and beneficialowner in the quickest orderly mannerpossible.’’ GX 2119. The inference urgedby the government is that Archer knewabout the Calvert cover up, which wouldobviously be probative of his intent withrespect to the WLCC scheme.

On this record, however, a single refer-ence to Calvert in an email does not estab-lish Archer’s knowledge that it was a shamentity and that he was thus a willful partic-ipant in the conspiracy. Indeed, the weightof the evidence undercuts the notion thatArcher was aware of the Calvert cover-up.Jason Galanis and Hugh Dunkerley cameup with the idea for the entity, Tr. 1450:2–1453:3, which Francisco Martin created,Tr. 2181:14–19. Dunkerley testified thatneither he nor anyone else discussed Cal-vert with Archer, Tr. 1464:1–13, 1509:6–8,whom Martin never even met, Tr. 2381:15–18. While Galanis, Dunkerley, and Cooneyall participated in backdating Calvertforms related to certain of the bond trans-actions, see Tr. 1464:17–1465:16, 2181:14–

17, GX 1577, GX 2298, Archer did notparticipate in this backdating even thoughthe conspirators created a fraudulent docu-ment describing a purported loan Calvertmade to RSB, see GX 1577. Tellingly, thisdocument was signed only by Dunkerley,see GX 1577, in contrast to other fraudu-lent forms relating to Calvert, see GX 2298(document signed by both Dunkerley andthe purported recipient of the ‘‘loan,’’ Coo-ney). Finally, it bears mentioning thateven Martin was unaware that Calvert wasa fake entity intended to deceive eventhough he was the one who created it. Tr.2295:10–25; 2348:2–7. This further high-lights the extent to which Galanis did notdisclose the true import of discrete acts hedirected others to take, even those whowere clearly willing participants in hiscriminal schemes.

The government’s final strand of evi-dence relates to Archer’s conduct afterJason Galanis’ arrest on unrelated charges.It cites an email Archer sent Cooney, Ja-son Sugarman, and Andrew Godfrey. GX2102. This email included a list of ‘‘immedi-ate issues’’ to address in light of Galanis’arrest. Id. But there is nothing nefariousabout the included items. See id. The im-port of this evidence, in the government’sview, appears to be that Archer was awareof certain aspects of the bond transactions.But he has never argued otherwise.23 Theissue, rather, is whether he knew thatJason Galanis was stealing the bond pro-ceeds.24

23. In a footnote, the government also remindsthe Court that Archer received an email fromGalanis after his arrest from the ‘‘clean’’email account set up for him by Dunkerley.See GX 1453, Tr. 2180:21–2181:13. The Courtdoes not deem this evidence to be especiallyprobative. The email did not concern any-thing inherently illegal—merely appointmentof directors to Atlantic’s board—and was alsosent to Andrew Godfrey, who is not alleged tohave been a member of the conspiracy. See

GX 1453. Moreover, there is no evidence thatArcher ever responded.

24. The government also urges an inferenceagainst Cooney on the basis that he respond-ed to Archer’s message, indicating that it wasa ‘‘[g]ood prelim checklist.’’ GX 2102. For thesame reasons as those discussed with respectto Archer, the Court does not rely on thisevidence in denying Cooney’s Rule 33 motion.


v. Final Considerations

Exacerbating the Court’s concern aboutArcher are two additional considerationsthat further weigh in favor of granting anew trial: (1) the unique considerationspertaining to his relationship with JasonGalanis and (2) potential juror confusionover a government summary chart admit-ted as an exhibit.

As the Court has previously described,Jason Galanis operated to keep people inthe dark, even those who were undoubted-ly willful participants in his various crimes.But his efforts as to Archer were evenmore concerted. Galanis, for instance, ex-plicitly instructed Dunkerley not to attendWAH board meetings where Archer wouldalso be present, a demand with whichDunkerley complied. Tr. 1328:19–23. Thisacknowledgement by Dunkerley is all themore striking because it was he—not Ja-son Galanis—who was on the board withArcher, and Dunkerley further testifiedthat he specifically wanted to meet Archerdue to his various business connections.See Tr. 1328:19–1330:13. Even more tellingis the manner in which those who weremembers of the conspiracy spoke of Arch-er when he was not present, burnishing hiscredentials to others and describing him,among other things, as ‘‘the biggest showpony of all time’’ whose involvement would‘‘add layers of legitimacy’’ to the variousdeals. See, e.g., DXs 4908–09 (Cooneybragging, while being surreptitiously re-corded, that Archer is ‘‘the biggest whaleof anyone,’’ the ‘‘biggest show pony of alltime,’’ and ‘‘a total fucking whale,’’ explain-

ing that ‘‘[y]ou don’t get any more politi-cally connected [than Archer is] and makepeople more comfortable than that,’’ andArcher’s involvement would thus provide‘‘layers of legitimacy with all the dealswe’re doing now’’); Tr. 1864:8–24 (RaycenRaines had heard from others ‘‘more thanonce or twice’’ that Archer was businesspartners with Hunter Biden); Tr. 1867:12–15 (Raines acknowledging that Galanis‘‘did in fact boast about Mr. Archer andMr. Biden’s involvement’’); DX 4078 (Ga-lanis writing to Cooney that ‘‘the alterna-tive is to pimp devon and see how quicklyhe stops responding TTT it will happen’’);DX 4836 (Galanis instructing Dunkerleythat it may be worthwhile to clarify inArcher’s bio that two of his business part-ners ‘‘are Chris Heinz and Hunter Biden,the step son of the Secretary of State JohnKerry and the son of the Vice PresidentJoe Biden, respectively’’); Tr. 2159:22–2160:3 (Martin testifying that Galanis hadtold him that Archer ‘‘was a business part-ner and a very well connected individualpolitically and also in the business world’’).

At the same time Archer was spoken ofin this manner, Galanis was simultaneouslyoperating to ingratiate himself with Arch-er. There was anecdotal evidence, for in-stance, of an elaborate dinner held in NewYork by Galanis and his then-wife wherehe presented a toast to Archer, his ‘‘new’’friend. See Tr. 3291:25–3293:7, 3299:6–12.This evidence further suggests that Archerwas not a party to this conspiracy but wasinstead being manipulated by a skillful conartist.25

25. The notion that Archer lacked the requisiteknowledge and intent is all the more plausiblein light of Archer’s numerous commitmentsduring the relevant time period. As the Courtdiscussed in the background section, Archer’sinvolvement in the WLCC deal came in thecontext of his substantial role in the overallroll-up, which involved numerous entities thatcollectively managed assets worth billions of

dollars. There was also evidence about hisother business—and personal—commitmentsduring this time. See, e.g., DX 4733 at 12; Tr.3287:18–3288:19. Archer’s relative lack of in-volvement in the WLCC deal is perhaps bestdemonstrated by the fact that none of thewitnesses who took part in the deal had sub-stantial interactions with Archer. While thisconsideration ultimately does not weigh


Second, the Court harbors some concernthat the jury was confused by the testimo-ny of the government’s final witness, FBISpecial Agent Kendall, who prepared andtestified about a number of summarycharts. The evidentiary portion of this trialwas protracted and tedious. The summarycharts gave the jury a relatively straight-forward view of the numerous relatedtransactions. There was one chart in par-ticular that troubled the Court: Govern-ment Exhibit 4011. This exhibit detailedthe interest payment on the secondtranche of bonds, those purchased byArcher and Cooney. As previously dis-cussed, RSB, the entity controlled byArcher, and Cooney transferred the bondsto other entities, meaning they were nolonger in possession of them at the timethe interest payment became due. Themoney to make this payment was trans-ferred from VL Assurance to Burnham,which then sent it to the WLCC. Due to aninternal error at Morgan Stanley, however,$903,000 was then accidentally wired toRSB. See Tr. 3063:22–3064:8; DX 4523 at6. Realizing the mistake, Morgan Stanleycorrected the error twelve days later, re-versed the wire, and then sent the moneyto the intended recipients, BSI and VLAssurance. See GX 301 at 190; DX 4523 at1. Agent Kendall agreed with the govern-ment that the chart depicted the conspira-tors ‘‘basically pa[ying] themselves the in-terest on the bonds[.]’’ Tr. 2970:20–21.

The issue arises because, although thechart had text indicating that the wire toRSB, Archer’s entity, was reversed, therewas no explanation as to what that meant

and the arrows indicating the flow of mon-ey from entity to entity showed that thefunds went directly from RSB to BSI andVL Assurance. See GX 4011. This gave theimpression that RSB was involved in thetransaction by which the conspirators wereallegedly paying themselves the interestdue on the second set of bonds. Indeed,immediately after Agent Kendall testifiedthat $903,000 went to RSB, she furtherexplained that at this point in time it nolonger owned any of the bonds, furthersuggesting impropriety on the part of RSBand by extension Archer. See Tr. 2969:25–2970:4.

Any prejudice was certainly mitigatedby the manner in which counsel for Archerelicited on cross-examination that the‘‘wire reversal’’ really meant that RSB hadreceived the money in error, accompaniedby Morgan Stanley emails showing that itwas an internal mistake later rectified bythe bank. See Tr. 3063:1–3080:16. Giventhe persuasive power of summary charts,however, particularly in a highly complex,tedious case such as this one, and themanner in which the flow of money wasvisually depicted in the government exhib-it, there is a real concern that the jury wasconfused by this aspect of Agent Kendall’stestimony. This concern is exacerbated bythe relatively limited nature of Archer’sinvolvement in the universe of relevanttransactions.26 While this consideration isby no means a sufficient basis on which togrant Archer’s motion, the Court of Ap-peals has recognized the power that suchsummary charts have on juries, even when,as here, they are not emphasized by the

heavily in the Court’s mind, it is relevant inlight of the nature of this case and Archer’sdefense.

26. Indeed, the acquisition of bonds in thesecond tranche aside, the primary other con-nection Archer had to the conspiracy, as dis-played in the government summary charts,

was the purported profit of $700,513 that hereceived from Thorsdale. As discussed earlier,however, while there were transfers of funds,Archer did not actually enjoy any profit, aspart of that money was repayment of a loanand the rest was returned to Thorsdale. Seesupra n. 17.


government on summation. See UnitedStates v. Groysman, 766 F.3d 147, 163 (2dCir. 2014).

vi. Conclusion

As is readily apparent, the governmentpresented a good deal of circumstantialevidence concerning Archer’s intent. Thisis, as the Court previously stated, a per-fectly appropriate way to prove a defen-dant’s guilt. The government is also rightto note that its case must be assessed as awhole, rather than taking each piece ofevidence in isolation. It is primarily forthis reason that the Court, when drawingevery inference in favor of the govern-ment, denies Archer’s Rule 29 motion.

After scrutinizing the evidence and giv-ing the various issues their due attention,however, the Court harbors substantialdoubt about Archer’s guilt. Neither of thegovernment’s cooperating witnesses evercommunicated with Archer about theWLCC scheme. Most of the government’switnesses never communicated with Arch-er at all. Unlike his co-defendants at trial,he never received misappropriated pro-ceeds directly from the purported annuityprovider for the WLCC. Indeed, althoughthe government need not prove motive, theCourt is left wondering why Archer wouldhave engaged in this scheme, especially inlight of the illegal gains reaped by hisalleged co-conspirators but not by him.

In hindsight, it now appears obvious thatit was Jason Galanis’ intent to misappro-priate the bond proceeds from the incep-tion of his plan to sell Native Americanbonds. And, as the evidence relating to thestatements made to Morgan Stanley andthe BIT Board demonstrates, Archer’s be-havior was troubling in some respects. Butbeing misleading in contexts unrelated tothe sale of securities does not render Arch-er guilty of the securities fraud offensesalleged in this indictment, unless such be-havior establishes that he knew of the

object to steal the bond money and/ordefraud the clients of Hughes and Atlantic.

In sum, when viewing the entire body ofevidence, particularly in light of the alter-native inferences that may legitimately bedrawn from each piece of circumstantialevidence, the degree to which Jason Galan-is manipulated even those who were mem-bers of the conspiracy together with hisdesire to benefit from Archer—the personwho ‘‘add[ed] layers of legitimacy’’—andthe intertwined web of legitimate and ille-gitimate transactions, the Court harbors areal concern that Archer is innocent of thecrimes charged and accordingly orders anew trial.

2. Bevan Cooney

[17] In many respects, Cooney is simi-larly situated to Archer. Indeed, there issubstantial overlap in the government’s ev-idence against them, namely their pur-chase of the second tranche of bonds andthe email communications involving themand Jason Galanis. The Court’s analysisabove with respect to those pieces of evi-dence is similarly applicable to Cooney. Itmay well be that Cooney—like Archer,Dunkerley, and Martin—was unaware ofthe criminal object of the WLCC deal atthe time he participated in the vast majori-ty of the email communications with Arch-er and Galanis. See supra Discussion, II.A.1.ii. But other evidence demonstratesthat—also like Dunkerley and Martin—heat some point became a member of theconspiracy. Indeed, the compelling consid-eration that requires the denial of Coo-ney’s Rule 33 motion is the other circum-stantial evidence unique to him, primarilyregarding his receipt of money from theWAPC account, his participation in theCalvert cover-up, and purported lies hetold various entities about subjects thatwere indisputably within his realm ofknowledge.


Specifically with respect to Cooney, thegovernment introduced the following addi-tional evidence: (1) his receipt of moneydirectly from the WAPC account, consist-ing of $75,000 from the final issuance and$4 million purportedly to purchase JasonGalanis’ home in Bel Air; (2) his partic-ipation in backdating forms related to thepreviously referenced fake entity, Calvert;and (3) his purported lies to City NationalBank (‘‘CNB’’) regarding his purchase ofthe second tranche of bonds.27 The Courtaddresses each in turn.

i. Cooney’s Receipt of Fundsfrom the WAPC

The flaw most fatal to Cooney’s motion,and which is the most substantial distinc-tion between the evidence against him andArcher, is that Cooney received moneydirectly from the purported annuity pro-vider for the WLCC. After the final bondissuance, Cooney was wired $75,000 direct-ly from the WAPC account, consisting ofmoney provided by OSERS, Atlantic’sclient. See GX 4009. While defendants haveargued that they believed WAPC to be asubsidiary of Wealth Assurance, which itwas not, there has never been any sugges-tion that they were unaware that WAPCwas to provide the annuity on behalf of theWLCC. Indeed, the only context in whichWAPC, legitimate or not, was referencedat trial was in the context of it being thepurported annuity provider.

It is unclear how Cooney could havereceived money from WAPC for legitimate

reasons. It is true that the mere receipt ofmoney from WAPC does not necessarilymean that such a transfer was part andparcel of the bond misappropriation. Forinstance, Tim Anderson received $50,000from the WAPC account when, followingthe closing of the deal, his law firm per-formed additional work that had not beencontemplated. Tr. 490:13–491:23. But thereis no such apparent basis for Cooney tohave received a payment for services ren-dered, nor has he suggested otherwise. Heeven argues throughout his moving papersthat he was only a passive investor inrelation to the bond offerings. Assumingthat Cooney was the beneficial owner ofthe bonds he purchased, it is of course truethat as an investor he would have beenentitled, as all bondholders were, to peri-odic interest payments. But this $75,000transfer occurred before any interest pay-ments on the second tranche of bondswere due, which he did not even own atthe time that particular payment wasmade. See GX 4005 at 6, GX 4011. Indeed,it occurred even prior to the first interestpayment on the initial tranche. CompareGX 4010 with GX 4011.28

Further probative of the illegitimate na-ture of this transfer are Cooney’s state-ments to his accountant concerning how toclassify the payment. On April 28, 2015,Cooney’s business manager at Fulton &Meyer emailed him, asking if the $75,000wire from WAPC was a loan. GX 3250.29

27. Cooney at times suggests that none of thisevidence may support a conviction becausethese acts did not constitute material mis-statements or omission in connection with thesale of a security. This is of course true.However, the government does not rely onthis evidence for that purpose, but rather be-cause it is probative of effectively the onlyquestion at issue in this case: whether Coo-ney acted with the requisite intent.

28. Moreover, while Cooney purchased thesecond tranche of bonds, any suggestion thathe would have been entitled to an interestpayment would be dubious as he was not thebeneficial owner of the bonds. As discussedabove, it is undisputed that Cooney knew themoney to purchase the bonds came from Ja-son Galanis. And as the Court will discussbelow, he later acknowledged that he did notactually own the bonds he acquired.

29. Consistent with Jason Galanis’ lie that


Cooney confirmed that it in fact was a loanand asked his manager to add up all of theloans from Wealth Assurance and Thors-dale from the previous couple of years. GX3250. Not only did Cooney lie, it beliesreason to suggest that WAPC could haveprovided legitimate loans to Jason Galanis’friends and business partners.

And this was not the only payment Coo-ney received directly from WAPC. On No-vember 12, 2014, he also received a wirefor $3.895 million. GX 4007 at 1. Thismoney was allegedly earmarked for thepurchase of Jason Galanis’ home in Bel Airbefore ultimately being used to acquireValorlife by WAH. See id. at 4, GX 3224.At trial and again in his moving papers,Cooney asserts that contrary to the gov-ernment’s contention, he genuinely intend-ed to use the money to purchase JasonGalanis’ home. The government rightlynotes evidence that undermines this argu-ment, namely that the day after the fundswere deposited into the escrow accountassociated with the purchase of Galanis’home, Cooney requested that they betransferred out. See GX 4007 at 2; DX3056(a). At the very least, it is not unrea-sonable to credit the government’s evi-dence on this point.

But even assuming, arguendo, that Coo-ney is correct about his intended use of thefunds, his argument remains unavailing. Infact, Cooney’s contention that he intendedto use the money to purchase Jason Galan-is’ home in certain respects is more dam-aging to his defense than the purpose forwhich the money was ultimately used, i.e.,

to acquire a subsidiary for WAH.30 Re-gardless, Cooney’s intent as to the use ofthe money is of no moment. The criticalpoint is that Cooney personally receivednearly $4 million in funds directly from theannuity provider for the WLCC. More-over, Cooney later falsely informed hisaccountant that this money was a loanfrom Thorsdale, the entity controlled byJason Galanis. See GX 3272; Tr. 2028:21–2029:2. On this record, as with the $75,000transfer, the natural inference to draw isthat Cooney knew this money constitutedmisappropriated bond proceeds.

ii. Cooney’s Participation inthe Calvert Cover-Up

Further probative of Cooney’s intent ishis use of fraudulent documents related toCalvert Capital, which, as discussed, wascreated in order to cover up the WLCCscheme. On February 28, 2016, Cooneyemailed his business managers at Fulton &Meyer a secured loan agreement purport-edly showing that Calvert Capital hadloaned the Bevan Cooney Trust $5 milliondays before he purchased the secondtranche. See GX 2298; Tr. 2028:21–2030:3.This occurred just two days after Cooneysimilarly provided a letter from Thorsdalepurporting to show that Calvert hadloaned him the roughly $4 million he re-ceived directly from WAPC and which wasultimately used to purchase Valorlife. SeeGX 3272; Tr. 2028:21–2030:3. Cooney doesnot dispute that Calvert was a fraudulententity created to cover up the scheme, norcould he credibly do so. Indeed, Calvert

WAPC was a subsidiary of Wealth Assurance,Cooney’s business manager refers to the loanas coming from ‘‘Wealth Assurance.’’ GX3205. Cooney, however, was aware that themoney came from WAPC, which as discussedabove, was the annuity provider for theWLCC regardless of whether Cooney honestlybelieved it to be a subsidiary of the legitimateWealth Assurance entity.

30. Indeed, it is probative of the relationshipenjoyed by Cooney and Jason Galanis that itwas Cooney whom Galanis asked to partici-pate in this transaction related to his resi-dence. Dunkerley also testified that they werethe ‘‘best of friends’’ who had known eachother since childhood. See Tr. 909:4–6,2171:13–21.


did not even exist on October 2, 2014 andNovember 12, 2014, when it allegedly pro-vided Cooney with these two ‘‘loans.’’ Com-pare GX 2298 and GX 3272 with Tr.2182:3–4. The backdated form regardingthe $5 million used to purchase a portionof the second tranche of bonds was signedby both Jason Galanis, the alleged manag-ing partner of Calvert, and Cooney. SeeGX 2298. Although Cooney did not signthe document regarding the loan for the $4million used to acquire Valorlife, he gave itto his accountant while clearly aware thatits substance was false because he receivedthat money from WAPC—not Thorsdale,the purported agent, or Calvert. CompareGX 4007 with GX 3272. Therefore, the factthat Cooney, unlike Archer, signed one ofthese fraudulent forms and later distribut-ed both of them is highly probative of hisintent.

iii. Cooney’s Purported Lies to CNB

The final category of evidence againstCooney concerns various statements hemade to CNB, specifically as they pertainto his ownership of the bonds he pur-chased. As the government rightly notes,upon his receipt of $5 million from Thors-dale he recognized the amount as a loan.See GX 3216. In January 2015 he thenapplied for a loan from CNB, in conjunc-tion with which he personally completed afinancial statement. See GX 405. He ac-knowledged owning the $5 million worth ofbonds while omitting any reference to aloan. See id. In May of that year, Cooneytransferred the bonds to an entity calledBonwick. Tr. 1741:15–19. The next month,in pursuit of a separate loan from CNB for$1.2 million, he signed an affirmation thatthe previously submitted financial state-ment remained accurate. See GX 414 at 2.

It was not until Cooney was unable torepay the $1.2 million loan that CNBlearned he no longer possessed the bondsand that he had financed their purchasewith a loan. Tr. 1749:12–17; 1813:3–13;1819:2–9.

On the basis of this evidence, the gov-ernment urges the following inferences:(1) Cooney lied about the source of thefunds used to purchase the bonds in orderto hide the fact that the transaction waseffected with recycled bond proceeds; (2)Cooney’s inconsistent statements regard-ing his ownership of the bonds reveal thathe was a strawman for the purchase; and(3) Cooney financially benefited from hisparticipation in the scheme. Although thefirst two inferences have some probativevalue, it is true that Cooney could justhave easily told these lies in order to mis-lead CNB into providing him a loan. Morecritically, in the Court’s view, is the finalinference. Although proof of motive is notlegally required, and Cooney obviously hadno burden at trial, this evidence under-mines one of the primary defenses ad-vanced by Cooney, namely that he did notprofit from this criminal scheme. It is clearfrom the trial record that Cooney’s ‘‘own-ership’’ of the bonds was one factor consid-ered by CNB in electing to provide himwith the $1.2 million loan, most of which henever repaid. See Tr. 1742:4–16.

Cooney asserts several arguments in anattempt to undermine this evidence: (1) hedid not personally complete the variousforms submitted to CNB; (2) a representa-tive of CNB completed a medallion guar-antee 31 effecting the transfer of theWLCC bonds to Bonwick; and (3) he madegood faith efforts to repay the $1.2 million

31. A medallion guarantee ‘‘is a signatureguarantee on a marketable security, a stock ora bond. So, similar to what a notary would doon real estate documents or other kinds of

documents where you are guaranteeing some-body’s signature, you use a medallion guaran-tee to guarantee somebody’s signature on astock or bond-related matter.’’ Tr. 1740:3–8.


loan after he defaulted.32 None of thesearguments is persuasive.

First, while Fulton & Meyer may havesubmitted these forms to CNB, the formswere personally signed by Cooney andwhatever information contained thereinwould have been provided by him. Theinaccuracies contained in the forms are notadministrative in nature but instead go tothe very heart of Cooney’s finances. Sec-ond, the issue relating to the medallionguarantee is a red herring. The import ofthis argument, in Cooney’s view, is thatprior to issuing the $1.2 million loan arepresentative of CNB guaranteed thedocument by which the WLCC bonds weretransferred to Bonwick. Therefore, accord-ing to Cooney, CNB was well aware thathe no longer possessed the bonds. ButSteven Shapiro, the CNB representativewho signed the medallion, testified at trialthat (1) he was unaware that it was theWLCC bonds being transferred and (2) hesimilarly was not required to verify wheth-er the bonds were being sold or, as wasthe case here because Cooney apparentlynever actually owned them, transferredabsent consideration. See Tr. 1742:17–22,1808:9–25. Finally, Cooney’s contentionthat he made good faith efforts to repaythe $1.2 million loan is irrelevant. The factremains that he repaid only approximately

$80,000 and it thus serves as powerfulevidence of one way in which he profitedfrom the scheme. See Tr. 1750:14–17.

Viewing the government’s entire case,therefore, the Court is not persuaded thata manifest injustice results from permit-ting this guilty verdict to stand and ac-cordingly denies Cooney’s motion.33

B. Remaining Rule 33 Arguments

The defendants also make various otherarguments under Rule 33. None have mer-it.

1. The Introduction of John Galanis’Guilty Plea in Gerova

First, Archer and Cooney each contendthat the introduction, following summa-tions of the government and John Galanis,of evidence of John Galanis’ prior partic-ipation in a securities fraud scheme withhis son prejudiced them. They rightly notethat the duty to sever a trial continuesthroughout its duration. But neither hasmade the requisite showing that a sever-ance was required in light of the introduc-tion of this evidence or that the manner inwhich it was introduced otherwise ranafoul of Rule 33.

[18–21] Following proper joinder,which is not contested, severance is re-

32. Cooney also re-iterates, in conclusory fash-ion, his arguments regarding the admissibilityof the CNB evidence, namely that unfair prej-udice and potential for juror confusion sub-stantially outweigh any probative value. TheCourt rejected this argument in permittingthe government to introduce this evidence,and Cooney offers no new arguments. TheCourt remains of the opinion that inaccuratestatements Cooney made regarding his own-ership of the bonds he purchased from thesecond tranche are probative of his intent,which is the critical issue in this case, andwere not substantially outweighed by the dan-ger of unfair prejudice, potential for jurorconfusion, or any other factor enumerated inRule 403.

33. The government also introduced testimonyby Francisco Martin that upon Jason Galanis’arrest for unrelated conduct in September2015, Cooney called Martin to inform himthat Jason Galanis had been arrested but thatit did not concern the WLCC bonds. See Tr.2176:17–2177:22. The obvious inference, ac-cording to the government, is that Cooney’sstatement evinced his knowledge that theWLCC bond scheme was illegal because hewas apparently concerned that Galanis mayhave been arrested for conduct relating to thebonds. The Court, however, did not view thisas an especially compelling inference anddoes not rely on this evidence in denyingCooney’s Rule 33 motion.


quired only where the prejudice ‘‘is suffi-ciently severe to outweigh the judicialeconomy that would be realized by avoid-ing multiple lengthy trials.’’ United Statesv. Page, 657 F.3d 126, 129 (2d Cir. 2011)(citation omitted). The Supreme Court hasinstructed that severance should be grant-ed only where ‘‘there is a serious risk thata joint trial would compromise a specifictrial right of one of the defendants orprevent the jury from making a reliablejudgment about guilt or innocence.’’ Zafirov. United States, 506 U.S. 534, 539, 113S.Ct. 933, 122 L.Ed.2d 317 (1993). Indeed,a defendant is not entitled to a severancemerely because he may have a betterchance of acquittal at a separate trial. Seeid. at 540, 113 S.Ct. 933. Notably, theintroduction against one defendant of Rule404(b) evidence by no means requires sev-erance:

Courts have distinguished between theadverse inference a jury may drawagainst a co-defendant because of hisassociation with a prior criminal convic-tion, which can typically be cured by alimiting instruction and the potential forunfair prejudice in instances in whichthe submission of prior-act evidenceagainst one defendant tends to provedirectly or implicate another defendant’sinvolvement in the prior act.

United States v. Catapano, No. 05-CR-229(SJ) (SMG), 2008 WL 2222013, at *19(E.D.N.Y. May 22, 2008) (citation omitted),adopted by 2008 WL 3992303 (E.D.N.Y.Aug. 28, 2008).

In the matter at hand, the Court hadbarred the government from introducingevidence of John Galanis’ prior guilty pleafor securities fraud due to his participationin a scheme orchestrated by his son be-cause, although probative of his intent inthis matter, it ran afoul of Rule 403. SeeTr. 7:25–8:1, May 16, 2018. The partiesagreed, however, that counsel for John

Galanis could open the door to such evi-dence if he argued that his client wasduped by his son in the context of theWLCC scheme. See Tr. 8:8–9:10, May 16,2018. On June 14, 2018, the governmentmoved to introduce this evidence, arguingthat the door had been opened. The Courtdenied this request, but warned counselfor John Galanis that he could still openthe door during his summation. See Tr.2457:9–2458:4. That is precisely what tran-spired.

Consistent with the procedure followedin United States v. Alcantara, 674 F.App’x 27 (2d Cir. Dec. 22, 2016), the Courtpermitted the government to briefly re-open the evidentiary record. See Tr.3829:2–5. The evidence of John Galanis’plea was introduced by way of stipulation:

It is hereby stipulated and agreed be-tween the parties that on July 20, 2016,John Galanis pled guilty to conspiringwith Jason Galanis and others to commitsecurities fraud in or about 2009 throughin or about 2011, in that John Galanisand others openly managed brokerageaccounts of an individual and effectedthe sale of Gerova stock, and receivedand concealed proceeds derived there-from, knowing that this activity was de-signed to conceal from the investingpublic the true ownership and control ofthat Gerova stock.

Tr. 3829:8–16.

The Court immediately gave the follow-ing limiting instruction as the evidencepertained to Archer and Cooney:

It is also important for you to know thatJohn Galanis’ guilty plea was to chargesstemming from the investigation that re-sulted in Jason Galanis’ arrest in Sep-tember 2015[,] which you have alreadyheard about. I reiterate to you now thatthe conduct for which Jason Galanis wasarrested and John Galanis pled guiltywas entirely unrelated to this case.


I further instruct you that Mr. Archerand Mr. Cooney were not subjects ofthat investigation, and there is no evi-dence that either of them knew aboutJason or John Galanis’ fraudulent con-duct in that matter or the investigationof it until after Jason Galanis was ar-rested in September of 2015. You arenot to consider this evidence in any wayagainst either Mr. Archer or Mr. Coo-ney.

Tr. 3830:23–3831:11. The Court also per-mitted the government and counsel forJohn Galanis to offer brief supplementalsummations, prior to proceeding with theremaining summations of counsel for Arch-er and Cooney, as well as the govern-ment’s rebuttal. See Tr. 3831:12–3837:20.

[22] Based on this record, the Court isnot persuaded that either Archer or Coo-ney were prejudiced, and certainly not tothe extent requiring severance or other-wise giving rise to a manifest injustice.While Archer accurately notes that theCourt had previously found the introduc-tion of this evidence to run afoul of Rule403, that was with respect to John Galan-is. See Tr. 7:25–8:1, May 16, 2018; cf. Tr.330:2–332:3. It is well-established that theintroduction of Rule 404(b) evidenceagainst a co-defendant does not requireseverance. See Catapano, 2008 WL2222013, at *19. That is especially truegiven the circumstances of the case athand. Although there had been evidenceabout Cooney’s friendship with Jason Ga-lanis, there was no evidence indicatingthat either Archer or Cooney enjoyed arelationship with John Galanis. The Courtalso gave a robust limiting instruction,specifying that Archer and Cooney werenot involved in the previous conduct andthat there was no evidence they wereeven aware of it until Jason Galanis wasarrested in September 2015. Therefore,the fact that John Galanis was also impli-

cated in one of Jason Galanis’ priorcrimes, which the jury was already awareof, did not operate to prejudice eitherArcher or Cooney. The Court remains ofthe view that this acted as a legitimatebasis on which Archer and Cooney coulddistinguish themselves from John Galanisin summations, aided by the Court specifi-cally instructing the jury that they werenot involved in that prior conduct. Thereis simply no basis to conclude that a sev-erance was required.

To the extent Archer and Cooney wereprejudiced by the specific manner of intro-duction of this evidence, it was by virtue ofthe fact that, they claim, their trial strate-gy would have been different. Most nota-bly, they argue that would have sought tointroduce evidence that Jason Galanis,John Galanis, and Hirst had previouslycommitted securities fraud together, thushighlighting who the ‘‘real’’ conspiratorswere in the context of the WLCC scheme.The Court is dubious of this argument, asthe mere fact that certain participants hadhistories of engaging in fraudulent activitywith Jason Galanis did not foreclose thepossibility that either Archer or Cooneywere guilty in the case at hand. The issuebefore the jury was whether they had therequisite intent with respect to the WLCCscheme, and this other evidence they mayhave presented, assuming its admissibility,would likely have been of limited probativevalue, if any. They also contend that theintroduction of this evidence exacerbatedthe prejudicial effect of earlier evidence ofJason Galanis’ September 2015 arrest andundercut the Court’s instruction that hisarrest in that instance was for conductunrelated to the case at hand. Such argu-ments, however, fly in the face of theCourt’s robust limiting instruction.

Accordingly, on this record no manifestinjustice occurred.


2. Challenges to Jury Instructions

Archer and Cooney fare no better withtheir various arguments as to the juryinstructions. The Court considered and re-jected each of these arguments prior togiving the charge. The defendants havenot raised any new considerations. More-over, they have not provided any authorityfor the proposition that alleged instruction-al errors of this sort are a valid basis onwhich to order a new trial under Rule 33.Indeed, in the current posture the questionis not whether the rulings were in errorbut whether any errors resulted in a mani-fest injustice. See United States v. Soto,No. 12-CR-556 (RPP), 2014 WL 1694880,at *5 (S.D.N.Y. Apr. 28, 2014), aff’d subnom., United States v. Ramos, 622 F.App’x 29 (2d Cir. 2015).

[23] First, contrary to Archer’s argu-ment, there was an adequate factual predi-cate to give a conscious avoidance charge.The entire thrust of Archer’s argument isthat there is no evidence that he ‘‘saw ared flag and took specific action to avoidlearning it.’’ Archer Mot. at 94, ECF No.567 (emphasis in original). The Court ofAppeals has instructed, however, that suchcharges are appropriate where involve-ment in an offense was ‘‘so overwhelminglysuspicious that the defendant’s failure toquestion the suspicious circumstances es-tablishes the defendant’s purposeful contri-vance to avoid guilty knowledge.’’ UnitedStates v. Svoboda, 347 F.3d 471, 480 (2dCir. 2003); accord United States v. Goffer,721 F.3d 113, 127–28 (2d Cir. 2013). Giventhe extensive involvement of Archer andCooney in transactions that were centralto the execution of the criminal conspiracyand in light of the various misleadingstatements they made, it was appropriateto provide such a charge to the jury.

[24] It similarly was not a manifestinjustice for the Court to decline to givethe requested multiple conspiracies

charge. Throughout this case, Archer andCooney have contended that the govern-ment has alleged the existence of two con-spiracies instead of one. Under their theo-ry, there was one conspiracy to defraudthe WLCC and another directed at theclients of Hughes and Atlantic. As theCourt previously reasoned in rejecting thisargument, however, the operative indict-ment was unambiguous in setting forth anoverarching conspiracy with a single goal:to misappropriate the WLCC bond pro-ceeds. That this single conspiracy mayhave had multiple components or spheresdoes not mean that the government in-stead alleged the existence of two conspir-acies. See Payne, 591 F.3d at 61 (‘‘[A]single conspiracy is not transformed intomultiple conspiracies merely by virtue ofthe fact that it may involve two or morephases or spheres of operation, so long asthere is sufficient proof of mutual depen-dence and assistance.’’ (citation omitted) ).

[25, 26] The final argument relating tothe charge is the Court’s decision not toprovide Archer’s requested unanimity in-struction or, in the alternative, a moredetailed verdict form. This argument isalso without merit. Tellingly, the defen-dants have not provided any authority forthe proposition that either of these stepswere required. Instead, general unanimityinstructions are considered sufficient un-less there exists ‘‘a genuine danger of juryconfusion.’’ United States v. Ferguson, 676F.3d 260, 279 (2d Cir. 2011) (citation omit-ted). On this record, the Court cannotconclude that a specific instruction wasrequired, particularly in light of the re-peated warnings to the jury that they wererequired to be unanimous in order to con-vict any of the defendants on either count.See Tr. 4123:23–25, 4183:7–10, 4185:6–9,4185:15–17. Moreover, that certain aspectsof the record in this case were complex did


not require the Court to give such aninstruction. See Ferguson, 676 F.3d at 280.

3. Newly Discovered Evidence

Finally, each of the defendants in theirreply briefs argues for a new trial on thebasis of newly discovered evidence thatwas produced to them after they filed theirinitial motions. Archer also argues, in thealternative, for an evidentiary hearing. TheCourt rejects these arguments.

[27–30] When the import of newly dis-covered evidence is that a witness commit-ted perjury, ‘‘the threshold inquiry iswhether the evidence demonstrates thatthe witness in fact committed perjury.’’United States v. White, 972 F.2d 16, 20 (2dCir. 1992). If the answer is yes, the stan-dard for assessing materiality differsbased on when the government learned ofthe material contradicting the witness’stestimony. ‘‘[I]f the prosecution was notaware of the perjury [at the time of trial],a defendant can obtain a new trial onlywhere the false testimony leads to a firmbelief that but for the perjured testimony,the defendant would most likely not havebeen convicted.’’ United States v. Stewart,433 F.3d 273, 296–97 (2d Cir. 2006). ‘‘Ifinstead the prosecution knew or shouldhave known about the perjury, then theconviction will be set aside if there is anyreasonable likelihood that the false testi-mony could have affected the judgment ofthe jury.’’ United States v. Torres, 128F.3d 38, 49 (2d Cir. 1997) (citation omit-ted). Where the newly discovered evidenceis impeachment material, however, a newtrial ‘‘may be granted only upon a showingthat TTT the evidence is not merely cumu-lative or impeaching; and TTT the evidencewould likely result in an acquittal.’’ UnitedStates v. Forbes, 790 F.3d 403, 406–07 (2dCir. 2015).

The purportedly newly discovered evi-dence consists of [Redacted],34 there is nota sufficient basis to grant a new trial forthe following reasons: (1) with respect tothe substance of the alleged perjury, thedefendants cannot make the requisiteshowing, even under the more forgivingstandard applicable when the governmentknew or should have known of the perjuryand (2) as impeachment material it wascumulative and would not have affectedthe jury’s verdict.

When considered as substantive testimo-ny, the defendants cannot carry their bur-den. [Redacted]

[Redacted]

[Redacted] Bearing these considerationsin mind, there is no basis to conclude thatthis additional material, if known to thedefendants at trial, would have had anypossibility to affect the jury’s verdict.

[Redacted]

Accordingly, the Court declines to granta new trial on the basis of newly discover-ed evidence. For substantially the samereasons, the Court also denies the requestsfor an evidentiary hearing.

CONCLUSIONFor the foregoing reasons, Archer’s mo-

tion for a new trial is granted, while allothers are denied. The Clerk of Court isrespectfully directed to terminate the mo-tions pending at docket entries 563, 564,565, and 566.

Archer and the government are directedto confer and propose next steps withinforty-five days of this opinion.SO ORDERED.

,

34. In light of an ongoing investigation, at thegovernment’s request, portions of this opinionare redacted. An unredacted copy of the opin-

ion will be provided to the parties and filedunder seal.

u.s. v. galanis 477

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