## Facts

- Defendants conspired to obtain approximately $3 billion in purported financing for an oil pipeline project in Siberia.
- The defendants represented that a “Swiss syndicate” of wealthy investors would fund the project and used financial jargon and references to instruments such as standby letters of credit and “prime banks.”
- The supposed pipeline project and financing capability were fictitious; the scheme had little to no realistic prospect of success.
- The defendants solicited assistance from a broker whose interactions were recorded; the evidence included recorded conversations, documents, and testimony reflecting the defendants’ intent to secure the funds through misrepresentations.
- A jury in the Eastern District of New York convicted the defendants of conspiracy to commit mail and wire fraud under 18 U.S.C. §§ 1341, 1343, and 1349.
- At sentencing, the district court applied an intended-loss figure of $3 billion under the Sentencing Guidelines, yielding very high advisory ranges and lengthy prison terms.

## Issues

1. Whether the misrepresentations were “material” for mail and wire fraud purposes when the proposed transaction was so implausible that no reasonable financial professional would believe it.
2. Whether the sentences were procedurally unreasonable where the district court relied heavily on a $3 billion intended-loss calculation despite the scheme’s minimal likelihood of causing actual loss and provided an inadequate explanation under 18 U.S.C. § 3553(a).

## Decision

- The court affirmed the convictions and upheld the denial of the defendants’ motions for judgments of acquittal.
- The court held that sufficient evidence supported the jury’s finding of materiality and fraudulent intent.
- The court vacated the sentences as procedurally unreasonable and remanded for resentencing.
- The court directed resentencing to include a more reasoned consideration of the case-specific circumstances and the statutory factors, rather than a largely mechanical use of the intended-loss figure.

## Legal Principles

- A false statement is material in fraud prosecutions if it has a natural tendency to influence, or is capable of influencing, the decision of the decision-maker to whom it is addressed.
- Materiality is ordinarily a question for the jury, and a conviction may stand if the evidence permits a rational juror to find the misrepresentations capable of influencing a decision-maker.
- Fraud liability is not categorically defeated because a scheme appears implausible; the statutes focus on fraudulent intent and the capacity of the misrepresentation to influence if credited.
- In sentencing, a court commits procedural error when it treats the Guidelines as effectively mandatory or fails to adequately explain the chosen sentence in light of the § 3553(a) factors.
- When the Guidelines range is driven by an extraordinarily high intended-loss figure that may overstate the seriousness of the offense, the sentencing court must meaningfully consider whether the calculation reflects culpability and must provide a reasoned explanation for accepting or varying from the advisory range.

## Conclusion

The Second Circuit held that an implausible, financially grandiose scheme can still support a fraud-conspiracy conviction where the evidence shows intent and misrepresentations capable of influencing a decision-maker, but it required resentencing because the district court did not adequately justify severe, loss-driven sentences under § 3553(a) given the scheme’s lack of realistic prospects.


United States v. Corsey, 723 F.3d 366 (2d Cir. 2013)