United States v. Gorski

2018 | Cited 0 times | First Circuit | January 18, 2018

United States Court of Appeals For the First Circuit

No. 16-2471

UNITED STATES OF AMERICA,

Appellee,

v.

DAVID E. GORSKI,

Defendant, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS

[Hon. F. Dennis Saylor, IV, U.S. District Judge]

Before

Thompson, Kayatta, Barron, Circuit Judges.

Tracy A. Miner, with whom Seth B. Orkand and Demeo LLP were on brief, for appellant. Randall E. Kromm, Assistant United States Attorney, with whom William D. Weinreb, Acting United States Attorney, was on brief, for appellee.

January 18, 2018

BARRON, Circuit Judge. A jury in the District of

Massachusetts convicted David Gorski of conspiring between late

2005 and 2010 to defraud the United States, in violation of 18

U.S.C. § 371, by knowingly procuring government contracts for his

construction company on the false premise that the company was

owned and controlled by military veterans who became disabled in

connection with their military service. The jury also convicted

Gorski of four counts of wire fraud, in violation of 18 U.S.C.

§ 1343. The District Court sentenced Gorski to thirty months of

imprisonment and entered an order of forfeiture, in the form of a

money judgment, in an amount exceeding $6.7 million, which the

District Court determined was the amount of the proceeds of

Gorski's crimes.

Gorski brings three challenges in this appeal. First,

Gorski seeks to reverse the convictions on the ground that the

government's evidence against him was insufficient. Second, he

contends that the District Court should have at least ordered a

new trial in light of certain statements that the prosecutor made

during closing arguments, which Gorski claims violated his

constitutional rights. Finally, Gorski challenges the forfeiture

order and money judgment. We affirm.

I.

The charges against Gorski pertain to his role as founder

and vice president of a general contracting and construction

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services company, Legion Construction, Inc. Gorski developed the

plan for the company in late 2005. From 2006 to 2010, Legion took

advantage of federal programs in which certain federal agencies

awarded government contracts on a preferential basis to small

businesses owned and controlled by military veterans who were

disabled in connection with their military service. To be eligible

for these programs, Legion, through Gorski in his role as the

company's vice president, certified in its bids for government

contracts that it was a "service-disabled veteran-owned small

business," or SDVOSB, within the meaning of the regulations

governing the programs.

To qualify as an SDVOSB under those regulations, an

SDVOSB had to be of a certain size and had to meet the following

two requirements.1 See 38 C.F.R. § 74.1 (2010); 38 C.F.R. § 74.1

1 The Small Business Act mandates a goal for the federal government of awarding "not less than 3 percent of the total value of all prime contract and subcontract awards for each fiscal year" to "small business concerns owned and controlled by service- disabled veterans." 15 U.S.C. § 644(g)(1)(A)(ii). The Act permits the government's contracting officers, under specified circumstances, to award no-bid contracts to SDVOSBs and to restrict competition for certain contracts to SDVOSBs. Id. § 657f(a)-(b). In 2004, then-President George W. Bush ordered all federal agencies to develop a strategy for using the no-bid and restricted- competition provisions to meet the three-percent goal. Exec. Order No. 13360, 3 C.F.R. 231 (2005). The Small Business Administration and the Department of Veterans Affairs separately promulgated regulations governing their SDVOSB programs pursuant in part to their respective rulemaking and contracting powers under their organic statutes. See 15 U.S.C. §§ 634(b)(6), 637; 38 U.S.C. §§ 501, 513. The Small Business Administration's regulations were in effect as of 2005,

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(2008); 13 C.F.R. § 125.8(g) (2005). First, one or more veterans

who had become disabled in connection with their military service

must have unconditionally owned at least fifty-one percent of the

business seeking the contract. See 38 C.F.R. § 74.3 (2010); 38

C.F.R. § 74.3 (2008); 13 C.F.R. § 125.9 (2005). Second, one or

more service-disabled veteran owners must have controlled the

business. See 38 C.F.R. § 74.4 (2010); 38 C.F.R. § 74.4 (2008);

13 C.F.R. § 125.10 (2005).

With respect to this latter requirement, the regulations

during all relevant time periods specified several criteria that

service-disabled veteran owners had to satisfy in order to

establish that they controlled the business. For example, a

service-disabled veteran owner must have held the highest officer

position in the business, and, while holding the position, that

service-disabled veteran owner, together with any others, must

have controlled "both the day-to-day management and long-term

decision-making" of the business. 38 C.F.R. § 74.4 (2010); 38

C.F.R. § 74.4 (2008); accord 13 C.F.R. § 125.10 (2005). In 2008,

the regulations added an additional criterion to establish

control: A service-disabled veteran had to be the highest

compensated employee in the business, absent a showing that it

and the regulations of the Department of Veterans Affairs were adopted in 2008 and then amended in 2010. The parties agree that those regulations governed the SDVOSB programs of all the federal agencies with which Legion contracted as an SDVOSB.

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would benefit the business for a non-veteran to earn more. 38

C.F.R. § 74.4 (2008); see also 38 C.F.R. § 74.4 (2010). And,

beginning in 2010, to establish control over the management of the

business, service-disabled veteran owners had to work full-time at

the business. 38 C.F.R. § 74.4 (2010).

Gorski, who is not himself a service-disabled veteran,

certified on behalf of Legion in its bids for government contracts

during the relevant time span that the company was compliant with

the SDVOSB requirements. Over the years, Legion bid on and won

over 200 government contracts based on Gorski's certifications

that Legion was an SDVOSB. Those contracts were valued at over

$110 million.

In 2010, however, a rival company filed a protest with

the Small Business Administration that challenged Legion's SDVOSB

status with respect to a contract that the government awarded to

Legion that year. Although the agency ruled in Legion's favor, a

subsequent criminal investigation by federal law enforcement

concluded that, from 2006 to 2010, Gorski had been unlawfully

certifying Legion as an SDVOSB in order to fraudulently obtain

government contracts for Legion.

In October of 2012, the government charged Gorski in the

United States District Court for the District of Massachusetts

with one count of conspiracy to defraud the United States, in

violation of 18 U.S.C. § 371, and four counts of wire fraud, in

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violation of 18 U.S.C. § 1343. With respect to the conspiracy

charge, the indictment alleged that between late 2005 and 2010

Gorski agreed with "other persons and entities" to defraud the

United States "by impairing, impeding, and defeating the lawful

governmental function of [various federal agencies] in the

implementation, execution, and administration of the SDVOSB

program." The indictment further alleged that the conspirators

carried out this agreement by, among other things, procuring

government contracts for Legion after Gorski, on behalf of the

company, falsely certified in the bids for those contracts between

2006 and 2010 that Legion was an SDVOSB.

With respect to the four counts of wire fraud, the

indictment alleged that, as part of this conspiracy to defraud the

United States, on four occasions Gorski faxed or emailed documents

in interstate commerce that were related to the fraudulent scheme.

Finally, the indictment provided notice of the government's

intention, upon a successful wire fraud conviction, to seek

forfeiture pursuant to 18 U.S.C. § 981(a)(1)(C) and 28 U.S.C.

§ 2461(c) of any property constituting the proceeds of Gorski's

crimes.

Gorski was tried over the course of twelve days in June

of 2016. At the close of the evidence, Gorski moved for acquittal

on all counts based on what he contended was the insufficiency of

the evidence against him. The District Court denied the motion,

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and the jury convicted Gorski on all counts. Gorski then renewed

his motion for acquittal on all counts on the ground that the

government had failed to put forth sufficient evidence that he had

intended to defraud the United States. He also moved in the

alternative for a new trial on the ground that certain statements

made by the prosecutor in closing arguments improperly drew the

jury's attention to his decision not to testify and thus also

improperly shifted the burden of proof to him.2

The District Court denied both motions. The District

Court then sentenced Gorski to thirty months of imprisonment and

fined him $1 million.

In addition, the government moved for an order of

forfeiture, in the form of a money judgment, in the amount of the

proceeds traceable to Gorski's crimes. The government submitted

that those proceeds consisted of all the money that Gorski and his

wife received from Legion since its formation, including payments

made to them after the end date of the charged conspiracy. The

government alleged that those proceeds amounted to more than $6

million. Gorski filed an opposition to the government's motion.

Gorski conceded that the proceeds of his crimes were subject to

forfeiture, but he contended that those proceeds excluded both the

2 Gorski's motion raised additional grounds for a new trial, but he has abandoned those other grounds on appeal.

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money received by his wife from Legion and money that Gorski

received from Legion after the end date of the charged conspiracy.

After a forfeiture hearing, the District Court agreed

with the government and entered a forfeiture order, in the form of

a money judgment, in the amount of $6,756,205.65. The District

Court then reduced Gorski's fine to $10,000. Gorski now brings

this appeal.

II.

Gorski first challenges the sufficiency of the evidence

against him with respect to his convictions for both conspiracy to

defraud the United States and wire fraud. Gorski preserved this

challenge below in his motion for acquittal. We review the denial

of that motion de novo, drawing all inferences in favor of the

government. United States v. George, 841 F.3d 55 , 61 (1st Cir.

2016) (citing United States v. Chiaradio, 684 F.3d 265 , 281 (1st

Cir. 2012)).

A.

To make out a case of conspiracy to defraud the United

States under 18 U.S.C. § 371 against Gorski, the government had to

prove that Gorski agreed with at least one other person to defraud

the United States, that an overt act was taken by one of the

conspirators in furtherance of that agreement, and that Gorski

knowingly participated in the conspiracy. See United States v.

Ngige, 780 F.3d 497 , 503 (1st Cir. 2015) (citing United States v.

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Serunjogi, 767 F.3d 132 , 139 (1st Cir. 2014)). A conspirator must

have not only an "intent to agree" but also an "intent to

effectuate the commission of the substantive offense." United

States v. Piper, 35 F.3d 611 , 615 (1st Cir. 1994).3

The government's theory at trial was that Gorski agreed

with others -- and then acted on that agreement -- to obtain

government contracts for Legion by certifying that the company was

an SDVOSB, even while knowing that Legion did not qualify as an

SDVOSB under the applicable regulations. To prove that theory,

the government introduced evidence to show that Legion was not

compliant with the SDVOSB regulations in several ways, and that

Gorski knew as much.

3 The District Court instructed the jury, as to conspiracy to defraud the United States (and wire fraud), that the government had to prove beyond a reasonable doubt that Gorski acted "with the specific intent" to defraud the United States -- "that is, with a bad purpose either to disobey or to disregard the law." The District Court further instructed the jury: "If the defendant acted in good faith, he cannot be guilty of the crime. If the defendant had a good faith belief that he was obeying the law, even if that belief was mistaken, he did not have the necessary knowledge and intent to commit the crime." Neither party objected to the instructions below. On appeal, Gorski purports to fault the District Court for not giving a good-faith instruction. But, the District Court plainly provided one. And, in any event, "we have held that [a] separate instruction on good faith is not required . . . where the court adequately instructs on intent to defraud," and Gorski does not challenge the instruction on intent to defraud. United States v. Berroa, 856 F.3d 141 , 161 (1st Cir. 2017) (alterations in original) (quoting United States v. Christopher, 142 F.3d 46 , 55 (1st Cir. 1998)).

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On appeal, Gorski does not contend that the government

put forth insufficient evidence to show that Legion failed to

comply with the SDVOSB regulations and that, accordingly, Gorski

certified that Legion was an SDVOSB on a false premise. For

example, Gorski does not challenge the sufficiency of the

government's evidence indicating that, although two service-

disabled veterans -- Joseph Steen and Peter Ianuzzi -- alone or

together held at least fifty-one percent of Legion's shares at all

relevant times, their ownership was not "unconditional," as

required under the SDVOSB regulations. 38 C.F.R. § 74.3 (2010);

38 C.F.R. § 74.3 (2008); 13 C.F.R. § 125.9 (2005). Nor does he

contend that the government's evidence was insufficient to support

its theory that it was Gorski who actually controlled "both the

day-to-day management and long-term decision-making" of the

business, notwithstanding that either Steen or Ianuzzi formally

occupied Legion's highest office as president at all relevant

times. 38 C.F.R. § 74.4 (2010); 38 C.F.R. § 74.4 (2008); accord

13 C.F.R. § 125.10 (2005).

Gorski does contend, however, that the government's

evidence was insufficient to prove that he intended to defraud the

United States. Accordingly, he contends that the evidence was

insufficient to show that he had the requisite mens rea to commit

the offense of which he was convicted, given that in his view the

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evidence showed at most only that he had certified that Legion was

an SDVOSB when it was not, conduct which is not itself criminal.

As an initial matter, we observe that the evidence

sufficed to permit a jury to find that Gorski was aware that there

were requirements under the SDVOSB program pertaining to a service-

disabled veteran's ownership and control over the business. For

example, an attorney whom Gorski had hired in 2007 to help

restructure the company testified that Gorski had told her that he

knew what the SDVOSB regulatory requirements were. Thus, the

question with respect to Gorski's mens rea turns on whether the

jury could have permissibly found that he also knew that Legion

did not comply with those regulatory requirements when he certified

that it did. And, we think the evidence was more than sufficient

to permit a jury reasonably to so conclude.

We begin with the government's evidence regarding the

requirement that the ownership of an SDVOSB by one or more service-

disabled veterans be "unconditional." The government submitted

agreements from 2007 between Legion and, separately, Steen and

Ianuzzi -- the two service-disabled veterans who held shares in

Legion -- showing that Legion maintained a right to purchase their

shares at a specified price before either of them could sell their

shares to someone else. Gorski acknowledges as much, and he makes

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no argument that such a restriction on their stock ownership was

permissible under the regulations.4

Gorski nevertheless contends that he could not be found

to have had the requisite mens rea to convict him because he

contends that the evidence showed that he imposed the restriction

only on the basis of the advice of his attorney who drafted "the

offending provisions." But, this argument fails because the

evidence showed that he had written a letter to the attorney

specifying that the restriction should be included in the terms of

the agreements. Thus, a jury would not have been required to

believe that Gorski imposed the restriction solely on the advice

of the attorney.

The government also put forth evidence from which a jury

could have permissibly inferred that it was implausible that Gorski

believed at the relevant times that Legion was compliant with the

other SDVOSB requirement -- namely, that one or more service-

disabled veterans control the business's day-to-day management and

long-term decision-making. See United States v. Serrano, 870 F.2d

1 , 7 (1st Cir. 1989) (reasoning that a defendant's knowledge of a

fraudulent scheme can be supported by circumstantial evidence

4 Gorski does point out, with respect to this evidence, that 13 C.F.R. § 125.9 permitted an SDVOSB to "change its ownership . . . so long as one or more service-disabled veterans own and control it after the change." But, the fact that the regulations permitted a change in ownership has no bearing on the government's evidence that Steen and Ianuzzi could not sell their shares freely.

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showing that lack of such knowledge would be "implausible"). From

Legion's founding until 2007, the evidence at trial showed, the

only service-disabled veteran owner of Legion was Steen. And, the

government offered testimony from multiple witnesses, as described

below, supporting the government's theory that Gorski recruited

Steen, who died in 2010, to serve as a president for Legion in

title only and without any real responsibilities.

For example, a veteran acquaintance of Gorski who was

also Steen's friend, Louis Cimaglia, testified that Gorski

identified Steen -- whom Gorski had not previously known -- to

serve as the president of the company Gorski was creating after

calling Cimaglia by phone and asking if he "knew a disabled

veteran." According to Cimaglia's testimony, Steen happened to be

sitting next to him at the time, so Cimaglia passed Steen the

phone, and thus began Gorski's and Steen's partnership.

Next, Steen's financial adviser, William Cole,

testified. He recounted that, during a lunch meeting to discuss

Gorski's business pitch to Steen, Gorski told the adviser that

Gorski needed Steen for the business because of "his veteran's

status," and that Steen would not have to invest any money or take

on any fiduciary responsibilities.

Finally, Steen's wife testified. She stated that Steen

had worked exclusively as an elevator mechanic and inspector since

serving in the Korean War and that, at the time Gorski reached out

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to Steen to start a construction company, Steen was retired and

already "very, very sick."

Gorski does assert in his appellate briefs that he had

intended for Steen to be a controlling partner and that, in light

of Steen's absence from Legion, he brought Ianuzzi aboard to "stay

in compliance" with the regulations. But, he identifies almost no

supporting evidence for this assertion, let alone evidence that

would have compelled the jury to find in his favor on this score.5

In addition to the evidence showing that Gorski had no

expectation that Steen would exercise control over Legion, the

government also offered substantial evidence that Steen did not in

fact exercise such control. Numerous former Legion employees

testified that they had never seen Steen at Legion. In fact,

Gorski himself concedes in his opening brief on appeal that Steen

was "absent" from Legion.

5 Gorski does point to Legion's initial indemnity agreement, in which Steen personally guaranteed Legion's performance on its contracts, and to bank records showing that Steen could withdraw money from Legion's bank accounts. But, Steen's decision to put his personal assets on the line for the company by means of the indemnity agreement does not necessarily indicate that Gorski intended for him to control the company. Nor does Steen's access to Legion's bank accounts necessarily indicate such. Indeed, Gorski's wife also had such access, yet no party has suggested that she controlled Legion. Finally, Gorski cites only Ianuzzi's testimony to support his claim that Gorski made Ianuzzi a partner to ensure Legion's regulatory compliance. But, Ianuzzi did not mention that reason when asked why he and Gorski entered into ownership discussions.

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Moreover, the government submitted evidence showing that

Gorski was aware that Steen, as an absentee president, played no

real role in Legion's management or decision-making. For example,

in a 2007 letter from Gorski to Steen that was admitted into

evidence, Gorski apprised Steen of several significant

developments at Legion that had occurred "over the past couple of

months." Those developments included Gorski's addition of Ianuzzi

as a new partner, the opening of a new office location, and the

fact that Gorski was "in the process of restructuring the company

to gain bonding capacity." A jury could reasonably conclude that

it would have been implausible for Gorski to have believed that,

whatever the precise meaning of the control requirement was, it

could be satisfied by being absent from the business and having no

real role in such significant decisions.

To be sure, the evidence showed that, in 2007, Ianuzzi

acquired an ownership stake in Legion, and it is undisputed that,

as an owner of Legion, Ianuzzi worked at the company and was more

involved in its day-to-day construction work than Steen was. In

fact, Ianuzzi, who was Gorski's chief witness, testified that he

was "always in the field getting the buildings built and project[s]

complete," while Gorski ran the administrative side of the

business. Ianuzzi further testified that management of Legion was

a "team effort," and specifically that he hired and fired employees

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along with Gorski and that they made decisions together regarding

projects on which to bid.

Nevertheless, even during the time period when Ianuzzi

was on board, the evidence more than sufficed to permit a jury

reasonably to conclude that Gorski knew that Legion was not in

compliance with the applicable control requirement. After all,

the jury could have found that Ianuzzi's testimony was not

credible. See United States v. Kantengwa, 781 F.3d 545 , 556 (1st

Cir. 2015) ("When examining sufficiency of the evidence, we . . .

resolve all credibility disputes in the verdict's favor." (quoting

United States v. Conley, 186 F.3d 7 , 19 (1st Cir. 1999)) (internal

quotation marks and footnote omitted)). For example, on appeal,

Gorski points to no testimony that corroborated Ianuzzi's account

of his managerial authority.6 And, four former employees at Legion

testified for the government that to their knowledge Gorski alone

was responsible for managerial decisions -- at least up until the

time of the bid protest challenging Legion's SDVOSB status in 2010.

Finally, the government submitted evidence that sufficed

to show that Legion failed to comply with heightened regulatory

requirements for establishing a service-disabled veteran's control

6At trial, Gorski called five former Legion employees (in addition to Ianuzzi) who testified that Ianuzzi served in a supervisory role on certain construction projects. However, the government contends that the testimony was "equivocal" with respect to Ianuzzi's management role, and Gorski does not suggest otherwise.

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over an SDVOSB, and that Gorski knew as much. These heightened

requirements were adopted in 2008 and 2010.

The government pointed in this regard to an SDVOSB rule

adopted in 2008, which required that, in order to establish the

requisite control over an SDVOSB, a service-disabled veteran

generally had to be the company's highest compensated employee.

See VA Veteran-Owned Small Business Verification Guidelines, 73

Fed. Reg. 29024, 29029 (May 19, 2008). With respect to this

requirement, Legion's outside accountant, Jeffrey Folan, testified

that, upon approaching Gorski about a federal grand jury subpoena

that he had received in November of 2010 regarding his work for

Legion, Gorski told him: "Well, I think I have a couple of black

eyes." According to Folan's testimony, Gorski told Folan that one

of the "black eyes" was Gorski's compensation in 2008, which Folan

testified Gorski remembered "might be out of alignment with what

the rules are for the federal program." In fact, tax filings

submitted by the government showed that in 2008 (and 2009) Gorski

earned compensation that was several magnitudes more than the

compensation of Legion's service-disabled veteran owners. Folan

further testified that in the summer of 2010 Gorski approached him

with various proposals for how Gorski could get money out of the

company other than through his salary in order "to alleviate red

flags."

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The government also pointed to a regulatory change in

February of 2010, which required that any service-disabled veteran

owner work full-time at the SDVOSB in order to establish control

over it. See VA Veteran-Owned Small Business Verification

Guidelines, 75 Fed. Reg. 6098, 6104 (Feb. 8, 2010). The

government's evidence sufficed to show that, despite this

regulatory change, Steen remained an absentee owner of the company

until a rival company filed the bid protest challenging Legion's

status as an SDVOSB in March of 2010. Only after the bid protest,

the evidence sufficed to show, did Steen transfer his remaining

shares to Ianuzzi, who replaced Steen as Legion's president. To

prove that Gorski sought to cover up Legion's failure to comply

with the new rule in the interim, the government offered evidence

that the documents prepared by Legion's outside counsel to execute

the buy-out were backdated to a date before the regulatory change.

To be sure, there was no direct evidence that Gorski himself caused

the documents to be backdated. There was, however, evidence

showing that Gorski sought (unsuccessfully) to backdate Legion's

revised indemnity agreement reflecting the company's new

structure. Thus, a jury could have permissibly inferred from that

evidence that Gorski sought to backdate the restructuring

documents as well to make it appear that Legion was in compliance

with the regulatory requirements, even if Legion's outside

attorneys were unaware that this was Gorski's aim.

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Despite all this evidence offered by the government with

respect to Gorski's mens rea, he nevertheless contends for one

additional reason that the jury could not have found beyond a

reasonable doubt that he intended to defraud the United States.

He points in this regard to evidence showing that he "consulted

with attorneys and accountants at two critical periods during the

purported conspiracy" -- specifically, when Legion was

restructured in 2007 and 2010. Gorski contends that his

willingness to seek the assistance of these professionals shows

unequivocally that he intended in good faith to comply with the

SDVOSB regulations.

However, as the government points out, none of this

evidence about what Gorski did in 2007 and thereafter required the

jury to find in Gorski's favor regarding whether he had the

requisite intent to defraud prior to 2007. Nor did this evidence

require the jury to find in his favor on this score with respect

to the rest of the charged conspiracy.

The mere act of seeking the help of attorneys and

accountants in restructuring the company does not necessarily

establish an intent to comply with the SDVOSB regulations. In

fact, the attorney whom Gorski hired to draft corporate

restructuring documents in 2007 testified that Gorski had not hired

her to advise him on Legion's compliance with the SDVOSB

regulations, that she was not familiar with those regulations, and

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that Gorski had told her that he knew what the regulatory

requirements were.7 And, although Gorski points to evidence

showing that he sought out specialists on federal contract set-

aside programs to execute the 2010 restructuring, a jury could

have reasonably found, in light of the government's other evidence

of Gorski's mens rea, that he was merely seeking to give a post

hoc patina of legitimacy to the fraudulent scheme.8

To the extent that Gorski is suggesting that he relied

in good faith on advice that he received from the attorneys and

accountants regarding Legion's compliance with the SDVOSB

regulations, and thus that he did not intend to fail to comply

with regulatory requirements, the record does not show that Gorski

provided the attorneys and accountants with accurate information

about Steen's and Ianuzzi's actual ownership of and involvement in

7 As Gorski points out, the attorney also testified that she drafted certain technical provisions in the restructuring documents, which provisions the government invoked to show Legion's non-compliance with the SDVOSB regulations. However, as we indicated above in connection with the government's evidence that Gorski knowingly violated the requirement that an SDVOSB be owned unconditionally by service-disabled veterans, the record contains a letter from Gorski to this attorney with an "outline of items" that he wanted her to address in the restructuring, including the key provisions at issue. 8Gorski does point out that Folan, Legion's outside accountant, testified that Gorski had told him around the time of the 2010 restructuring that Gorski intended to comply with the SDVOSB regulations and that Gorski believed that Legion was in fact compliant. However, Gorski's self-serving statements hardly required the jury to find in his favor regarding his mens rea, given the strength of the government's countervailing evidence.

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the firm. And, thus, the record does not establish that, on the

basis of his reliance on any advice that he received from those

professionals, he had a good-faith intent to comply with the

regulatory requirements even though the company in fact flouted

them.9

For these reasons, we conclude that there was more than

sufficient evidence for the jury to have found beyond a reasonable

doubt that Gorski had the specific intent to defraud the United

States, notwithstanding the role outside attorneys and accountants

played in the restructuring of Legion in 2007 and 2010. Gorski's

challenge to the sufficiency of the evidence of his conspiracy to

defraud the United States therefore fails, and we thus affirm the

denial of his motion for acquittal with respect to this conviction.

B.

Gorski also challenges the sufficiency of the evidence

to convict him on four counts of wire fraud. To convict Gorski of

wire fraud under 18 U.S.C. § 1343, the government had to prove

that he knowingly and willfully participated in a scheme to defraud

by means of false pretenses, and that he used interstate wire

9 Gorski does point to a response to the 2010 bid protest drafted by Legion's outside attorneys, which stated that "Legion has at all relevant times been a qualified and eligible [SDVOSB] and remains so today." But, the statement relied on information provided by Steen and Ianuzzi in affidavits, which the jury could have permissibly found that Gorski knew to have misrepresented their roles at Legion.

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communications in furtherance of the scheme. See United States v.

Cassiere, 4 F.3d 1006 , 1011 (1st Cir. 1993) (citing Serrano, 870

F.2d at 6).

Gorski does not dispute the sufficiency of the

government's evidence showing that he used interstate wire

communications on four occasions in connection with the alleged

fraudulent scheme. Nor, again, does he challenge the sufficiency

of the evidence showing that Legion procured those contracts on

the false premise that it was compliant with the SDVOSB

regulations. Rather, he challenges only the sufficiency of the

evidence showing that he intended to defraud the United States

because of what he says was his good-faith intent to comply with

the SDVOSB regulations. That challenge therefore fails for the

same reasons that his sufficiency challenge with respect to his

conspiracy conviction fails. Thus, we affirm the District Court's

denial of Gorski's motion for acquittal as to the wire fraud

convictions, too.

III.

Gorski next contends that, assuming the evidence against

him was sufficient, the District Court erred in denying his motion

for a new trial, given certain statements that the prosecutor made

to the jury during closing arguments. Gorski claims that the

statements improperly drew attention to his decision not to testify

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and also thereby improperly shifted the burden of proof to him,

such that his convictions must be vacated.

The statements at issue occurred during the rebuttal

portion of the closing arguments. The prosecutor sought to rebut

Gorski's good-faith defense by arguing to the jury: "Remember,

he's the one doing all these things, but he wants you to blame the

lawyers, blame the accountants, blame the brokers, blame the

contracting officers. That's what he wants because at the end of

the day he can't face the music. He can't stand in front of you."

Gorski's counsel objected. The District Court then gave

the following curative instruction to the jury: "Let me caution

the jury the defendant has a constitutional right not to testify,

and no inference of any kind can be drawn from the fact that he

did not testify." Gorski's counsel did not ask for a different

instruction.

After the jury returned a guilty verdict, Gorski moved

for a new trial on the ground that the prosecutor's statement to

the jury that Gorski "can't face the music" and "can't stand in

front of you" improperly drew the jury's attention to his decision

not to testify, thus violating his Fifth Amendment right against

self-incrimination, and also improperly shifted the burden of

proof to Gorski. At the hearing on that motion, the District Court

remarked that the statements were "unfortunate and should not have

been made" but did not order a new trial because the District Court

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found that the statements were harmless. The District Court

reasoned that it had immediately issued a curative instruction and

that it had "modified [its] standard instruction" on the

defendant's constitutional right not to testify during its charge

to the jury in order "to make it a little bit stronger."

We review the District Court's denial of a motion for a

new trial for abuse of discretion. United States v. Rodriguez,

675 F.3d 48 , 58 (1st Cir. 2012) (citing United States v. Boylan,

898 F.2d 230 , 262 (1st Cir. 1990)). A defendant is not entitled

to a new trial on the basis of a prosecutor's improper statements

to the jury unless they resulted in prejudice to the defendant.

Id. at 62 (citing United States v. Giorgi, 840 F.2d 1022 , 1037

(1st Cir. 1988)). With respect to whether a prosecutor's improper

statements during closing arguments resulted in such prejudice,

"[w]e afford the district court substantial deference . . . ,

reflecting the trial judge's familiarity with the case." United

States v. Carpenter, 494 F.3d 13 , 24 (1st Cir. 2007).

Where a defendant contends that statements by a

prosecutor violated the defendant's Fifth Amendment right against

self-incrimination and thereby also impermissibly shifted the

burden of proof to the defendant, we have said that the test for

prejudice is "whether the prosecutor's misconduct so poisoned the

well that the trial's outcome was likely affected, thus warranting

a new trial." Rodriguez, 675 F.3d at 62 (quoting United States v.

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Azubike, 504 F.3d 30 , 39 (1st Cir. 2007)) (internal quotation marks

omitted). The prejudice analysis turns on a three-part inquiry

into: (1) "whether the prosecutor's conduct was isolated and/or

deliberate"; (2) "whether the trial court gave a strong and

explicit cautionary instruction"; and (3) "whether it is likely

that any prejudice surviving the instruction could have affected

the outcome of the case."10 Id. (quoting United States v. Gentles

619 F.3d 75 , 81-82 (1st Cir. 2010)) (internal quotation mark

omitted).

Gorski does not suggest that the prosecutor's statements

were anything more than an isolated incident of prosecutorial error

in the course of the trial. But, he does contend that the error

constituted a deliberate attempt to violate his Fifth Amendment

right against self-incrimination because, in his view, the

prosecutor's statements to the jury that Gorski "can't face the

music" and "can't stand in front of you" obviously referred to

Gorski's decision not to testify.

The government disputes this point. The government

suggests that the prosecutor made the statements "in reference to

10 Gorski's opening brief refers to four, rather than three, factors that we indicated were relevant to the prejudice analysis in United States v. Balsam, 203 F.3d 72 , 87 n.19 (1st Cir. 2000). The government points out in its brief that those four factors are subsumed by our three-factor inquiry, and Gorski's reply brief does not press an alternative theory but rather refers exclusively to the three-factor inquiry.

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Gorski's decision to sit with his family in the gallery rather

than at counsel table" during the trial, which the District Court

had permitted him to do.

We need not decide who is right. The first factor is

not necessarily dispositive. See United States v. Zarauskas, 814

F.3d 509 , 516 (1st Cir. 2016). And, here, the District Court gave

a curative instruction immediately following the problematic

statements. The instruction did not specifically strike those

statements or instruct the jury to disregard them, as the

instruction in Rodriguez did. See Rodriguez, 675 F.3d at 63. But,

Gorski did not ask for a stronger instruction, and we have found

an instruction to be sufficiently curative in similar

circumstances where the instruction cautioned the jury of the

defendant's right not to testify without either striking them or

issuing a "disregard" directive. See Zarauskas, 814 F.3d at 516.

On appeal, Gorski does claim that the curative

instruction was insufficient because it was "calm and delivered in

a normal tone of voice," whereas the prosecutor's statements were

"delivered forcefully and dramatically, while shouting." Gorski

cites no authority, however, that indicates this difference should

matter, and we do not see why it should, given that "[i]t is a

well established tenet of our judicial system that juries are

presumed to follow [curative] instructions." Rodriguez, 675 F.3d

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at 63 (first alteration in original) (quoting Gentles, 619 F.3d at

82).

Gorski also contends that the curative instruction did

not address the risk that the prosecutor's statements shifted the

burden of proof to Gorski. But, to the extent that drawing

attention to Gorski's decision not to "face the music" or "stand

before" the jury can be construed as placing the burden of proof

on Gorski, Gorski's challenge on that ground is -- as the

government suggests -- derivative of his Fifth Amendment argument

that the statements improperly suggested that Gorski should have

testified. Thus, an instruction that cured any prejudice resulting

from drawing attention to Gorski's decision not to testify would

also necessarily cure any prejudice from burden-shifting

attributable to the prosecutor's remarks.

As to whether that instruction sufficed to ensure that

the "unfortunate" statements did not so poison the well as to

warrant a new trial, we conclude that, for the reasons elaborated

in Part II of our opinion, the government's case against Gorski

was too strong for it to have been an abuse of discretion for the

District Court to have determined that the prosecutor's statements

were harmless in light of the curative instruction. As we

explained, the government put forth a wealth of evidence in support

of its theory that Gorski certified Legion as an SDVOSB even though

he was well aware that it was not compliant with the SDVOSB

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regulations. And, while Gorski contends that his consultation

with outside attorneys and accountants in 2007 and 2010 established

his good-faith intent to comply with those regulations, the

evidence he puts forward on that score is far too minimal to

establish prejudice.

We did say in United States v. Hardy, 37 F.3d 753 (1st

Cir. 1994), on which Gorski relies, that an improper statement by

a prosecutor may still be significant enough to poison the well in

a "close" case, notwithstanding the provision of a curative

instruction. Id. at 759. But, in Hardy, in which the defendant

was convicted for unlawfully possessing firearms and ammunition,

id. at 756, we explained that the case was close because "the

government's case against [the defendant] largely rested on the

credibility of [the arresting officer]" and, even then, "the jury

was required to draw a number of inferences in order to convict

[the defendant]." Id. at 759. In particular, the arresting

officer was the only witness who testified with respect to the

defendant's possession of the firearms and ammunition, yet,

according to his testimony, he never saw the defendant with a

firearm or ammunition and merely heard a "soft thud" on the ground

near where the defendant had been standing and where a later search

discovered two firearms with ammunition. Id.

Here, by contrast, the verdict did not turn on the

credibility of one witness, who provided only circumstantial

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evidence. Far from it, as we have explained at some length. Thus,

in light of the strength of the evidence supporting the verdict,

we conclude that -- even assuming the prosecutor's statements were

improper and deliberate -- the District Court acted within its

discretion in ruling that its instruction likely cured any

prejudice, and that any surviving prejudice could not in this case

have so poisoned the well as to affect the jury's verdict.11 We

therefore conclude that the District Court did not abuse its

discretion in denying Gorski's motion for a new trial.

IV.

Finally, we turn to Gorski's remaining challenge, which

is to the forfeiture order and money judgment. The District Court

entered an order of forfeiture, in the form of a money judgment,

in an amount totaling more than $6.7 million, which it determined

were the "proceeds" traceable to Gorski's crimes, pursuant to 18

U.S.C. § 981(a)(1)(C) and 28 U.S.C. § 2461(c). Gorski challenges

the validity of the money judgment, as well as the amount of the

forfeiture. We review preserved legal challenges to forfeiture

11 As noted above, during its charge to the jury, the District Court also supplemented its immediate curative instruction with a stronger instruction on the defendant's constitutional right not to testify than it normally would have given during a jury charge. As Gorski points out, in Hardy we discounted the curative effect of a later instruction given during the charge to the jury that followed an immediate curative instruction because that later instruction did not specifically address the prosecutor's improper remark. Hardy, 37 F.3d at 757 n.3. But, a strengthened instruction during the jury charge certainly did no harm here.

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orders de novo, but we review unpreserved challenges for plain

error. United States v. Ponzo, 853 F.3d 558 , 589 (1st Cir. 2017).

A.

We begin by dispensing with Gorski's challenge to the

money judgment. In his reply brief, Gorski challenges the federal

courts' practice of issuing money judgments in forfeiture orders,

by which the government may seize future assets to satisfy the

forfeiture order. Gorski contends that the practice is no longer

valid under Honeycutt v. United States, 137 S. Ct. 1626 (2017),

which the Supreme Court issued after initial briefing in this case.

Honeycutt held that a defendant may not be held jointly

and severally liable under a certain forfeiture statute, 21 U.S.C.

§ 853, for property that a co-conspirator, but not the defendant,

acquired from the crime. Id. at 1630. The Court reasoned that

the forfeiture statute did not authorize joint and several

liability. Id. at 1632-34.

Gorski seizes on that reasoning to contend that money

judgments in forfeiture orders now must be considered invalid

because the forfeiture statutes do not expressly authorize money

judgments. However, by Gorski's own account, our existing

precedent is to the contrary. See United States v. Hall, 434 F.3d

42 , 59-60 (1st Cir. 2006). And, Honeycutt does not permit us to

reach a different result as a three-judge panel, given that -- as

Gorski himself acknowledges -- Honeycutt "did not rule on the

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issue" that he has presented to us. See United States v. Monteiro,

871 F.3d 99 , 108 (1st Cir. 2017) (citing United States v.

Mouscardy, 722 F.3d 68 , 77 (1st Cir. 2013)).

B.

With that issue out of the way, we turn to Gorski's

challenge to the forfeiture amount. The District Court found that

more than $6.7 million was subject to forfeiture as the proceeds

of Gorski's crimes. That amount represented all the money that

Gorski and his wife received from Legion, including dividends,

salary, bonuses, and corporate payment for personal goods such as

a swimming pool at Gorski's home. However, Gorski contends that

the District Court erred by not crediting against this amount

either (1) tax payments that Gorski made to the government on his

income from Legion or (2) the fair market value of his work on

construction projects that benefitted the government.

Gorski assigns this error based on alternative grounds.

First, he claims that the District Court misapplied the statutory

definition of the forfeitable "proceeds" under § 981. Second, he

contends that, assuming the forfeiture statute does not require

the credit, the forfeiture amount ordered by the District Court

violates the Eighth Amendment, because it is grossly

disproportionate to the gravity of Gorski's crimes and would

deprive him of his livelihood. He also contends that, in those

circumstances, the statute fails rational basis review under the

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Equal Protection and Due Process Clauses. The government disagrees

with Gorski as to whether he preserved these challenges below and

also defends the amount of forfeiture on the merits.

1.

We begin with Gorski's statutory challenge. Section

981(a)(1)(C) provides that "[a]ny property, real or personal,

which constitutes or is derived from proceeds traceable to a

violation of" certain specified statutes -- which the parties agree

include the wire fraud statute -- is subject to forfeiture to the

United States.12 Although § 981 pertains to civil forfeiture,

§ 2461(c) provides that the government may seek criminal

forfeiture whenever civil forfeiture is authorized in connection

with a criminal offense.

Section 981, as a whole, includes multiple definitions

of "proceeds." See Stefan D. Cassella, Asset Forfeiture Law in

the United States § 25-4, at 910–18 (2d ed. 2013 & Supp. 2016).

But, the parties agree that § 981(a)(2)(B)'s so-called "net

profits" provision provides the relevant definition of "proceeds"

in this case. That definition provides in full:

12 The specified crimes include "any offense constituting 'specified unlawful activity' (as defined in section 1956(c)(7) of this title)." 18 U.S.C. § 981(a)(1)(C). In turn, § 1956(c)(7) of Title 18 encompasses "any act or activity constituting an offense listed in section 1961(1) of this title," which includes a violation of § 1343, the wire fraud statute under which Gorski was convicted.

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In cases involving lawful goods or lawful services that are sold or provided in an illegal manner, the term "proceeds" means the amount of money acquired through the illegal transactions resulting in the forfeiture, less the direct costs incurred in providing the goods or services. The claimant shall have the burden of proof with respect to the issue of direct costs. The direct costs shall not include any part of the overhead expenses of the entity providing the goods or services, or any part of the income taxes paid by the entity.

18 U.S.C. § 981(a)(2)(B).

Gorski contends that the District Court erred in

applying this definition of "proceeds" by failing to credit either

the payments that Gorski made to the government for his personal

income taxes on the income that he drew from Legion or the fair

market value of his work on the government construction projects.

Gorski reasons that the statute's exclusion from the forfeiture

amount of "direct costs incurred in providing the goods or

services" applies to all defendants, whether individuals or

entities. And, he says, the provision then expressly specifies

that only an "entity" defendant's income taxes cannot constitute

"direct costs," which, in his view, implies that his personal

income tax payments on his income from Legion do constitute

excludable "direct costs." Belatedly at oral argument, Gorski

further argued that the fair market value of his work was also an

excludable "direct cost" on the theory that he had to pay for the

cost of labor -- whether performed by him or someone else -- in

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order to carry out the government construction projects that were

part of his fraudulent scheme.

We, however, agree with the government that Gorski did

not present this novel statutory argument concerning "direct

costs" to the District Court. Gorski did ask in the forfeiture

hearing -- albeit not in his papers opposing the government's

forfeiture motion -- for a credit of at least several hundred

thousand dollars that reflected both his income tax payments to

the government and his compensation from Legion for services

rendered on government projects. However, Gorski never argued in

the forfeiture hearing that his tax payments and compensation could

be credited as "direct costs" under § 981(a)(2)(B)'s definition of

"proceeds." Nor did he object when the District Court stated that

Gorski "incurred no direct costs" within the meaning of the

statute.

With respect to his income tax payments, Gorski

contended below only that "there should be some consideration" of

the fact that he paid his taxes because "the government got the

benefit of that." And, with respect to crediting his compensation,

he argued below for doing so only "because there's no dispute that

Mr. Gorski worked and that these buildings got built." Moreover,

there is no indication in the record that the District Court

understood those arguments to be tied to the statutory theory of

"direct costs" that Gorski raises on appeal. In fact, the District

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Court rejected Gorski's request to credit his tax payments and

compensation precisely because Gorski had not explained how such

credits would be tethered to § 981(a)(2)(B)'s definition of

"proceeds" (or any other source of law).13

Because Gorski failed to preserve this issue, our review

is for plain error. See United States v. Delgado-Sánchez, 849

F.3d 1 , 6 (1st Cir. 2017) (citing United States v. Sánchez-Berríos,

424 F.3d 65 , 74 (1st Cir. 2005)). And, we find no such error.

Gorski offers no clear supporting authority for his novel statutory

argument. Nor is it at all clear that it has any basis. Even if

income taxes paid by Legion in providing construction services to

the government might be considered a "direct cost[] incurred in

providing the . . . services," it is not plain how the personal

income taxes paid by Gorski on the income that he drew from Legion

could be a "direct cost" incurred in providing those services. 18

U.S.C. § 981(a)(2)(B). Similarly, even if we assume that

compensation paid by a business to an employee might be a "direct

cost" incurred by the business in providing its services, it is

13 Gorski did object at the end of the forfeiture hearing "that the statute only applies to entities, and Mr. Gorski is not an entity." However, in context, that objection seems to be a reference to the District Court's suggestion that the entirety of § 981(a)(2)(B) might apply only to entities, not individuals. Regardless of the nature of the objection, Gorski did not develop below the argument he presses on appeal -- namely, that the provision applies to both individuals and entities, but that "direct costs" has a different meaning for individuals.

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not plain how that compensation when received by the employee could

also be said to be a direct cost incurred by the employee. Nor

does Gorski make any argument as to how his theory could succeed

under the plain error standard.

2.

Gorski's constitutional arguments fare no better.

During the forfeiture hearing, the District Court noted its own

view that not crediting taxes that Gorski had paid to the

government on income from Legion that was subject to forfeiture is

"not proportionate or fair. There are possible constitutional

issues under the Eighth Amendment perhaps or perhaps due process

[or] equal protection." The District Court also stated that it

had "some reservations as to forfeiting Mr. Gorski's salary because

he did perform work. He provided value to the government, and

something about that seemed unfair as well, to forfeit everything

he was paid." However, despite its openness to the idea, the

District Court concluded that Gorski had not developed any

constitutional (or equitable) argument that would allow it to

credit Gorski's tax payments or his compensation.14

14 The District Court also concluded that, insofar as "equity" would permit a credit for such fair market compensation, Gorski had failed to identify any amount that would be a reasonable estimate of the market value of his services that the record would support. The District Court did note that there was evidence regarding the annual compensation of an executive project manager at Legion (around $50,000 to $85,000). And, the District Court also stated that fair market compensation for Gorski would probably

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Gorski points out that he did object at the close of the

forfeiture hearing that the forfeiture amount "has an Eighth

Amendment violation potential." But, he never developed any Eighth

Amendment argument during the forfeiture hearing. On that score,

he did not argue below, as he does on appeal, that the forfeiture

amount will deprive Gorski of his livelihood. Nor did he make any

equal protection or due process argument.

As with Gorski's statutory argument, Gorski also failed

to develop below the constitutional argument that he presses on

appeal -- namely, that a credit for his tax payments and

compensation is constitutionally required. Thus, our review is

for only plain error, a standard Gorski cannot meet. We are aware

of no clear supporting authority for this constitutional argument.

Nor does Gorski argue otherwise. Accordingly, we affirm the

District Court's forfeiture order and money judgment.

V.

For the foregoing reasons, the judgment of the District

Court is affirmed.

be around $100,000 to $120,000 per year. But, the District Court concluded that, in the end, it did not have any evidence of that compensation amount other than what the one project manager earned. Accordingly, the District Court ruled that, even if there was a legal basis for equitably crediting Gorski's compensation, Gorski had not established a necessary predicate for that equitable credit.

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