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2ND CIRCUIT SAYS NO DOUBLE-DIPPING ON RULE 35(b)

Igor Katsman was doing 10 years for a fraudulent check-cashing scheme when the FBI approached him about a different insurance fraud scheme in which he had been involved. He cooperated, leading to the government entering into a joint EDNY‐SDNY cooperation agreement with Igor, in which the government agreed to make a motion under Federal Rule of Criminal Procedure 35(b) to reduce his 10-year sentence if he provided substantial assistance in the insurance case. In connection with the deal, Igor was required to plead guilty to nine counts in the insurance fraud case.

Although Igor’s maximum sentence in the insurance case was 125 years, he was sentenced to time served. He then appeared before the EDNY court for a Rule 35(b) reduction on his check fraud sentence.

The district court was underwhelmed, holding that because Igor had been involved in the insurance fraud scheme while on presentence release in the check case, “the nature of the instant underlying crimes, and the undersignedʹs consideration of the 3553(a) factors,” convinced it to deny the Rule 35(b) motion.

Last week, the 2nd Circuit upheld the denial. The Court observed that “in deciding a Rule 35(b) motion, a district court makes two inquiries. First, it must determine whether the defendant in fact provided substantial assistance. Second, if so, it must then determine what, if any, reduction in sentence is warranted.”

Here, there was no question Igor was a big help to the government. However, in light of the circumstances of this case, including that Igor got a massive break in his “time served” sentence in the insurance case, that he had engaged in criminal activity while on presentence release, and that he lied to the district court about the additional criminal conduct, the district court was within its rights to deny the motion.

The Circuit admitted it had never considered whether 18 USC 3553(a) factors could be considered on a Rule 35(b) motion. However, the 2nd ruled, “nothing in the text of the rule precludes the court from considering factors in addition to a defendantʹs substantial assistance in deciding whether to reduce a sentence, and, if so, to what extent. The only limit to the courtʹs discretion under Rule 35(b) is the requirement that the defendant provide ʺsubstantial assistanceʺ if he is to receive any benefit for his cooperation.”

Despite his cooperation, Igor had nothing coming off his 10-year sentence.

United States v. Katsman, Case No. 16‐2583‐cr (2nd Cir. Oct. 10, 2018)

– Thomas L. Root