Judge Amalya Kearse
Morgan Stanley employee DeMizio was convicted of conspiracy to commit honest-services wire fraud and securities fraud in violation of 18 USC §§1343, 1346, 1348 and 1349. In addition to $1.2 million in restitution, he was sentenced to 38 months in prison. During appeal the Supreme Court decided Skilling v. United States, narrowly interpreting the scope of §1346′s prohibition against honest-services wire fraud. On remand, district court found the evidence supporting DeMizio’s wire-fraud conspiracy conviction sufficient in light of Skilling. Second Circuit affirmed, rejecting DeMizio’s claim of entitlement to acquittal because the evidence did not support conviction for conspiracy to commit wire fraud in light of Skilling. The evidence showed that DeMizio directed Morgan Stanley stock-loan business to companies that agreed to pay commissions to his father and/or brother. It could also be inferred that DeMizio benefitted from the payoffs. Thus the evidence permitted the trial jury to find DeMizio conspired to commit honest-services wire fraud by having intermediary firms pay kickbacks to his father and brother in connection with Morgan Stanley’s stock-loan transactions for which his father and brother performed little or no work.
