## Facts

- Federal prosecutors charged Ira Rubin and others with conspiracies arising from processing payments for major internet-poker companies operating in the United States.
- The indictment alleged that poker companies used third-party payment processors to deceive U.S. banks into processing gambling-related transactions.
- As alleged, payment processors created phony e-commerce websites and opened bank accounts in those names, representing to banks that the accounts were for legitimate online sales while using them to route gambling payments.
- Rubin was charged with (1) conspiracy to violate the Unlawful Internet Gambling Enforcement Act (UIGEA), (2) conspiracy to commit bank and wire fraud, and (3) conspiracy to launder money.
- Rubin entered a knowing, voluntary, unconditional guilty plea to those conspiracy counts under a plea agreement.
- The advisory Sentencing Guidelines range was calculated at 18–24 months, but the district court imposed a 36-month sentence based on the seriousness of the conduct and Rubin’s criminal history and risk of recidivism relative to co-conspirators.

## Issues

1. Whether an indictment that allegedly charges conduct exempt from the UIGEA deprives a federal district court of subject-matter jurisdiction, such that the claim survives an unconditional guilty plea.
2. Whether the district court’s upward variance from 18–24 months to 36 months was substantively unreasonable, including in comparison to co-conspirators’ sentences.

## Decision

- The Second Circuit affirmed the judgment.
- The court held that the asserted “non-offense” defect was nonjurisdictional and therefore was waived by Rubin’s unconditional guilty plea.
- The court held the 36-month sentence was substantively reasonable and that the district court did not abuse its discretion in varying upward.

## Legal Principles

- Federal criminal subject-matter jurisdiction derives from 18 U.S.C. § 3231; alleged defects in an indictment, including claims that it fails to state an offense, generally do not eliminate jurisdiction.
- Under United States v. Cotton, an indictment’s failure to allege conduct that constitutes a statutory offense is not a jurisdictional defect.
- An unconditional guilty plea waives nonjurisdictional challenges, including later claims that the indictment charged conduct outside the statute’s scope.
- Substantive reasonableness review of sentencing applies an abuse-of-discretion standard; an upward variance may be justified by offense seriousness, deterrence, criminal history, and risk of recidivism, and disparity with co-defendants is not controlling where individualized factors support different sentences.

## Conclusion

The Second Circuit held that Rubin’s claim that the indictment charged a UIGEA “non-offense” challenged the merits rather than jurisdiction and was waived by his unconditional guilty plea, and it upheld the district court’s 36-month upward-variance sentence as substantively reasonable.


United States v. Rubin, 743 F.3d 31 (2d Cir. 2014)