## Facts

- Certified Environmental Services, Inc. (CES) operated an asbestos air-monitoring business and accredited laboratory in upstate New York that performed post-abatement “clearance” sampling and reporting.
- The government alleged a long-running scheme in which CES employees and asbestos abatement contractors falsified air-sampling results and related documentation to show regulatory compliance when asbestos removal had not been properly completed.
- Trial evidence relied heavily on cooperating witnesses (former employees and contractors) who testified under plea, immunity, or cooperation agreements and described practices such as altering samples, reporting “passing” results, and falsifying chain-of-custody and sampling-location records.
- Defendants’ principal theory was lack of criminal intent: they claimed a good-faith belief that their methods conformed to New York asbestos regulatory practice and guidance, and that any irregularities reflected misunderstanding or accepted practice rather than intent to defraud or violate federal law.
- The district court excluded substantial evidence offered to show defendants’ good-faith understanding of state regulatory requirements and interactions with state regulators.
- The jury convicted CES and several individuals of multiple offenses, including conspiracy (Clean Air Act, mail fraud, and defrauding the United States), substantive Clean Air Act violations (including aiding and abetting), mail fraud, and false statements.
- On appeal, defendants challenged evidentiary exclusions and argued that pervasive prosecutorial misconduct deprived them of a fair trial; the government cross-appealed aspects of restitution and sentencing.

## Issues

1. Whether the exclusion of evidence supporting defendants’ good-faith belief of compliance with state regulatory practice improperly limited their ability to contest mens rea for Clean Air Act, mail fraud, and conspiracy charges.
2. Whether the government’s trial conduct—particularly vouching tied to cooperation agreements and improper argument—cumulatively denied defendants a fair trial.
3. Whether the restitution calculation and certain sentencing determinations were erroneous.

## Decision

- The Second Circuit vacated the convictions of CES, Nicole Copeland, and Elisa Dunn and remanded for a new trial.
- The court held that the district court erroneously excluded significant good-faith evidence relevant to intent and that the error was prejudicial in the context of the case.
- The court held that prosecutorial misconduct—including improper vouching and misleading argument—when considered with the evidentiary error, required reversal under a cumulative-effect analysis.
- The court vacated the restitution order as clearly erroneous and remanded for recalculation.
- The court vacated the sentences of Sandy Allen and Frank Onoff and remanded for resentencing based on factual and procedural errors, without reaching substantive-reasonableness challenges.

## Legal Principles

- When charged offenses require proof of knowing or intentional misconduct, defendants are generally entitled to present evidence bearing on state of mind, including a good-faith belief about regulatory compliance, even if state law does not alter federal requirements.
- Categorical exclusion of intent-related compliance evidence can improperly impair the defense and constitute prejudicial error, particularly in complex regulatory prosecutions.
- Prosecutors may not vouch for cooperating witnesses by implying the government has verified truthfulness or by urging the jury to rely on the government’s assessment of credibility based on cooperation-agreement “truthfulness” provisions.
- A new trial is required when prosecutorial misconduct, viewed in light of the whole record, renders the trial fundamentally unfair; cumulative-error review considers the combined impact of multiple errors.
- Restitution must be supported by a record-based loss calculation attributable to the offense conduct; clearly erroneous loss determinations require vacatur and remand.

## Conclusion

The Second Circuit ordered a new trial after concluding that the defense was unfairly constrained from presenting good-faith intent evidence and that the government’s repeated trial improprieties, taken together with the evidentiary error, denied a fair trial; it also vacated restitution and remanded for resentencing where the record did not support key findings.


United States v. Certified Env’tl Servs., Inc., 753 F.3d 72 (2d Cir. 2014)