Conscious Avoidance, “Custody or Control,” and Co‑Conspirator Loss: A Commentary on United States v. Bynum & Davis (2d Cir. 2025)

I. Introduction

This commentary examines the Second Circuit’s December 15, 2025 summary order in United States v. Bynum, Davis, Nos. 24‑1253 (L), 24‑1425 (Con), arising from a multi‑million dollar fraud scheme against the National Basketball Association (NBA) Players’ Health and Welfare Benefit Plan (the “Plan”).

Although issued as a summary order and therefore non‑precedential under the Second Circuit’s Local Rule 32.1.1, the decision is still citable under Federal Rule of Appellate Procedure 32.1 and offers useful insight on several recurring issues in federal criminal practice:

• When a conscious avoidance (willful blindness) instruction is appropriate, especially in financial and health‑care related schemes;
• The breadth of the federal health care fraud statute, 18 U.S.C. § 1347, particularly the phrase “money or property … under the custody or control of” a health care benefit program;
• The limits on presenting diminished-capacity-style evidence that does not meet the statutory insanity standard under 18 U.S.C. § 17;
• How courts attribute co‑conspirator losses at sentencing under the Sentencing Guidelines and evaluate sentencing disparities.

Former professional basketball players William Bynum and Ronald Glen Davis appealed from convictions in the Southern District of New York (Caproni, J.). Bynum challenged the jury instructions; Davis challenged the indictment, evidentiary rulings, and his sentence. The Second Circuit (Chin, Sullivan, and Kahn, JJ.) affirmed in all respects.

II. Factual and Procedural Background

A. The Underlying NBA Health Plan Fraud Scheme

The prosecutions arise from a larger conspiracy involving NBA players, doctors, and others, who:

• Submitted falsified invoices and reimbursement claims to the NBA Players’ Health and Welfare Benefit Plan;
• Sought reimbursement for medical and dental treatments that never occurred;
• Defrauded the Plan out of millions of dollars in benefits.

The Plan is a private benefit program that provides medical benefits to NBA players. As discussed by the court, the Plan qualifies as a “health care benefit program” under 18 U.S.C. § 24(b).

B. Charges, Trial, and Sentences

Following a jury trial:

• William Bynum was convicted of:
  • Conspiracy to make false statements relating to health care matters, 18 U.S.C. § 371.
  He received a sentence of 18 months’ imprisonment.
• Ronald Glen Davis was convicted of:
  • Health care fraud, 18 U.S.C. § 1347;
  • Wire fraud, 18 U.S.C. § 1343;
  • Conspiracy to commit health care fraud and to make false statements relating to health care matters, 18 U.S.C. §§ 1349, 371.
  He received a sentence of 40 months’ imprisonment.

On appeal:

• Bynum challenged the district court’s decision to instruct the jury on conscious avoidance with respect to the conspiracy count;
• Davis challenged:
  • The sufficiency of the health care fraud count in the indictment;
  • Evidentiary rulings that limited his ability to introduce evidence about his mental capacity and sophistication;
  • The procedural and substantive reasonableness of his sentence.

III. Summary of the Second Circuit’s Decision

The Second Circuit affirmed the judgments of conviction and sentence for both defendants. In brief:

1. Bynum – Conscious Avoidance Instruction
   The court held it was proper to give a conscious avoidance instruction where substantial “red flags” suggested Bynum was aware of a high probability of fraud yet deliberately avoided confirming it.
2. Davis – Motion to Dismiss the Health Care Fraud Count
   The court rejected Davis’s argument that the Plan’s money was not “money or property … under the custody or control of” a health care benefit program under 18 U.S.C. § 1347, holding the Plan plainly met the statutory definition.
3. Davis – Evidentiary Rulings on Mental Capacity
   Reviewing for plain error, the court found no reversible error in the district court’s handling of Davis’s attempts to introduce evidence of low sophistication or intellectual capacity; such evidence did not meet the statutory insanity standard and was not clearly excluded in a way that denied a valid defense.
4. Davis – Sentencing
   • Procedural reasonableness: The district court did not clearly err in attributing co‑conspirator losses to Davis based on foreseeability and his awareness of the broader scheme;
   • Substantive reasonableness: Davis’s 40‑month sentence was not “shockingly high” or otherwise unsupportable, even considering co‑defendant and national sentencing comparisons.

IV. Detailed Analysis

A. Bynum’s Challenge to the Conscious Avoidance Instruction

1. Legal Framework and Precedents

The Second Circuit reviews claims of instructional error de novo but reverses only if there is prejudicial error when the charge is viewed as a whole. The court cites:

• United States v. Tropeano, 252 F.3d 653 (2d Cir. 2001) – establishing the standard of review for jury instructions: de novo review, with reversal only for prejudicial error in the context of the whole charge.
• United States v. Aina‑Marshall, 336 F.3d 167 (2d Cir. 2003) – articulating when a conscious avoidance instruction is proper:
  1. The defendant disputes a particular aspect of required knowledge; and
  2. There is a factual predicate from which a rational juror could find beyond a reasonable doubt that:
     • the defendant was aware of a high probability of the fact in dispute; and
     • the defendant consciously avoided confirming that fact.
• United States v. Ferguson, 676 F.3d 260 (2d Cir. 2011) and United States v. Nektalov, 461 F.3d 309 (2d Cir. 2006) – holding that the presence of multiple “red flags about the legitimacy of a transaction” can justify a conscious avoidance instruction.

In Nektalov, for example, red flags included:

• Cash payments made in small bills;
• Suspicious statements about moving gold to Colombia and possessing money from street product sales.

These cases collectively establish that conscious avoidance instructions are permissible where circumstantial evidence suggests deliberate ignorance of an obvious risk of illegality.

2. Application to Bynum

The court notes that Bynum “clearly put his knowledge at issue” before the jury, satisfying the first Aina‑Marshall prong. The key question was whether there was an adequate factual predicate for the instruction.

The opinion identifies several powerful red flags:

• Bynum did not receive invoices directly from the rehabilitation center where he supposedly obtained services. Instead:
  • He obtained invoices from “Mr. Williams, a former NBA player,” rather than from medical providers;
  • The invoices totaled exactly $200,000, an unusually neat and round number.
• The rehabilitation center had “no record” of the services listed on the invoices.
• The invoices listed treatment dates in California during a period when Bynum was actually residing in Illinois.
• When submitting his fraudulent claim:
  • Bynum excluded his financial advisor from calls about the claim, even though he had previously included that advisor on “innocuous” calls regarding his health plan benefits.

Taken together, these facts strongly support the conclusion that:

• Bynum was aware of a high probability that the invoices and claims were fraudulent; and
• He took affirmative steps to avoid confirming that fraud (e.g., insulating his advisor from the suspicious transaction).

The court thus found “no error” in giving the conscious avoidance charge.

3. Significance

Even though this is a summary order, it reinforces several practical points:

• Red flags matter. When defendants receive invoices from non‑providers, in round amounts, disconnected from known treatment, and take steps to keep trusted advisors out of the process, they risk a conscious avoidance instruction.
• Deliberate ignorance vs. negligence. The court’s analysis emphasizes that what matters is not simple carelessness but behavior suggesting a choice not to know.
• Defense strategy implications. When a defendant claims “I didn’t know,” counsel must evaluate whether the circumstantial evidence will invite a conscious avoidance instruction that undercuts that very defense.

B. Davis’s Motion to Dismiss the Indictment (Health Care Fraud – 18 U.S.C. § 1347)

1. Statutory Background

Davis argued that the money he received was not “property belonging to another,” relying on a reading of the wire fraud statute, 18 U.S.C. § 1343, and attempting to apply that interpretation to the health care fraud statute, 18 U.S.C. § 1347. The court rejected this attempt for a straightforward statutory reason: § 1347 is textually broader.

Section 1347 criminalizes:

knowingly and willfully execut[ing], or attempt[ing] to execute, a scheme or artifice—
(1) to defraud any health care benefit program; or
(2) to obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any health care benefit program.

By contrast, the wire fraud statute, § 1343, refers more generically to schemes to defraud or obtain money or property by false pretenses, without the specific “custody or control” phrasing directed at health care benefit programs.

2. The Plan as a “Health Care Benefit Program”

The court notes that there “can be no doubt” that the NBA’s Plan qualifies as a “health care benefit program” under 18 U.S.C. § 24(b), which includes:

any public or private plan or contract, affecting commerce, under which any medical benefit, item, or service is provided to any individual.

The Plan is:

• A private plan;
• Designed to provide medical benefits, items, or services to NBA players.

The opinion further observes that the Plan’s funds were under its “custody or control”, citing the Plan Summary. Thus, even if the players are beneficiaries or contribute to the Plan, the Plan itself has control over the disbursement of funds.

3. Waiver of Wire Fraud Challenge

Davis also alluded, in his brief, to dismissal of the wire fraud count. The court held that argument was waived because he did not move to dismiss that count in the district court, citing:

• Fed. R. Crim. P. 12(b)(3)(B)(v) – requiring certain pretrial motions (including challenges to defects in the indictment) to be raised before trial; and
• United States v. Rodriguez, 556 F.2d 638 (2d Cir. 1977) – enforcing that requirement and treating untimely challenges as waived.

4. Significance

This aspect of the order underscores:

• The broad reach of § 1347. Defense attempts to narrow the statute by importing “property of another” concepts from wire fraud law are unlikely to succeed where funds are clearly held and disbursed by a health care benefit program.
• The importance of pretrial motion practice. Failure to challenge an indictment count at the proper time waives the argument on appeal, limiting appellate review to properly preserved issues.
• For benefit plans (including employer or union plans), the decision reinforces that funds they hold and administer are within the ambit of “custody or control” for federal health care fraud purposes.

C. Davis’s Evidentiary Challenges – Mental Capacity and Mens Rea

1. Standard of Review and Precedents

Because Davis did not preserve a specific objection at trial along the lines he later advanced on appeal, the court reviewed for plain error, citing:

• United States v. Simels, 654 F.3d 161 (2d Cir. 2011) – plain error review for unpreserved evidentiary claims.
• United States v. Mendonca, 88 F.4th 144 (2d Cir. 2023) – articulating the four‑part plain error test:
  1. There must be an error;
  2. The error must be plain (clear or obvious under current law);
  3. The error must affect the defendant’s substantial rights (usually meaning it affected the outcome);
  4. Even then, the court will correct the error only if it seriously affects the fairness, integrity, or public reputation of judicial proceedings.

2. The Nature of Davis’s Argument

At trial, Davis’s counsel explicitly disclaimed a diminished capacity defense. On appeal, however, Davis argued that he should have been allowed to present evidence of his lack of “sophistication and intellectual wherewithal” to recognize that the claims submitted on his behalf were false, essentially as a way to challenge the government’s proof of mens rea.

Crucially, Davis:

• Did not identify any specific piece of evidence he was prevented from introducing; and
• Did not identify a specific ruling that excluded such evidence. His own reply brief conceded “the issue here cannot be boiled down to a discrete evidentiary objection.”

The record showed that the district court had, at most, deferred ruling on the admissibility of some witness testimony about Davis’s mental state until it heard from the witnesses, a common and generally unobjectionable trial management practice.

3. Interaction with the Federal Insanity Statute – 18 U.S.C. § 17(a)

The panel emphasized the limitation in 18 U.S.C. § 17(a), which provides that:

It is an affirmative defense to a prosecution under any Federal statute that, at the time of the commission of the acts constituting the offense, the defendant, as a result of a severe mental disease or defect, was unable to appreciate the nature and quality or the wrongfulness of his acts. Mental disease or defect does not otherwise constitute a defense.

The court effectively treated Davis’s “lack of sophistication and intellectual wherewithal” argument as falling short of this statutory insanity standard and therefore not a standalone defense.

On this record:

• There was no clearly erroneous exclusion of admissible, non‑insanity mental‑state evidence; and
• No plain error affecting substantial rights, much less the fairness or integrity of the proceedings.

The court therefore upheld the district court’s evidentiary handling.

4. Significance

This section of the order sends several signals:

• Vagueness is fatal on appeal. Without a concrete proffer of specific excluded testimony or rulings, evidentiary challenges will fail, especially under plain error review.
• Insanity vs. “low sophistication.” Evidence that a defendant is unsophisticated, poorly educated, or has low IQ generally does not rise to the level of a “severe mental disease or defect” under § 17(a) and does not create an independent defense.
• Mens rea evidence must be carefully framed. While defendants may sometimes offer background evidence relevant to intent, courts will be wary when such evidence edges toward a de facto diminished capacity defense without satisfying the formal insanity standard.

D. Davis’s Sentencing Challenges

1. Procedural Reasonableness – Loss Calculation and Co‑Conspirator Conduct

a. Legal Standards and Precedents

The court sets out the governing standards:

• Procedural error at sentencing occurs when the court:
  • Fails to calculate or miscalculates the Guidelines range;
  • Treats the Guidelines as mandatory;
  • Fails to consider the 18 U.S.C. § 3553(a) factors;
  • Relies on clearly erroneous facts;
  • Fails to adequately explain the chosen sentence.
  (citing United States v. Alvarado, 720 F.3d 153 (2d Cir. 2013)).
• Standard of proof at sentencing: the district court may find facts by a preponderance of the evidence (more likely than not), as reaffirmed in United States v. Yannotti, 541 F.3d 112 (2d Cir. 2008).
• Appellate review of factual findings: findings relevant to sentencing enhancements are reviewed for clear error, a deferential standard, per United States v. Garcia, 413 F.3d 201 (2d Cir. 2005).

For attributing co‑conspirator conduct, the court relies on:

• United States v. Zichettello, 208 F.3d 72 (2d Cir. 2000) – approving aggregation of loss amounts from co‑conspirators where there is evidence the defendant was “well aware of the larger scheme.”
• United States v. Studley, 47 F.3d 569 (2d Cir. 1995) – requiring district courts to make a particularized finding that the co‑conspirator’s conduct was reasonably foreseeable to the defendant.

These principles are codified and elaborated in the Sentencing Guidelines, particularly:

• U.S.S.G. § 2B1.1(b)(1) – governing loss enhancements in fraud cases; and
• Application Note (C)(iv) – clarifying that it is enough if the defendant, “under the circumstances, reasonably should have known” of the potential losses resulting from the offense.

b. Application to Davis

Davis argued that the district court improperly attributed the fraud proceeds of his co‑conspirators to him merely because they used the same doctor. He contended those losses were not reasonably foreseeable to him.

The Second Circuit disagreed, emphasizing the record the district court relied on:

• All four players (Davis and three co‑conspirators) went to the same doctor for letters of medical necessity and fraudulent treatment records to support false claims.
• Davis’s own counsel conceded at sentencing that they all “went to the common doctor.”
• Evidence at trial showed:
  • Davis told a co‑defendant he had previously engaged in this type of fraud to get money from his health care account;
  • Davis and co‑defendants joked together in the parking lot after the sham appointment about the scheme, demonstrating mutual awareness;
  • Davis to the doctor, which the court interpreted as reflecting his awareness of shared involvement and potential liability;
  • Each of the four players subsequently used the fraudulent documentation to submit claims to the Plan.

On this record, the district court made the required:

• Particularized finding that the co‑conspirators’ claims were reasonably foreseeable to Davis; and
• Foreseeability finding that Davis “reasonably should have known” of the additional losses.

The Second Circuit held that, under the deferential clear‑error standard, these findings were well supported and not clearly erroneous. Therefore, there was no procedural error in aggregating co‑conspirator losses for sentencing.

c. Significance

This reinforces key points about federal fraud sentencing:

• Group schemes carry shared exposure. When defendants coordinate visits to a common doctor, jointly plan fraudulent claims, and acknowledge each other’s participation, they risk being held accountable for the total foreseeable loss.
• Foreseeability is an objective, not purely subjective, standard. The question is not whether Davis actually knew the exact dollar amounts of others’ claims, but whether, “under the circumstances, he reasonably should have known” that similar claims and losses would occur.
• Prior experience matters. Davis’s admission that he had done similar fraud before strengthened the inference that he understood the scale and nature of the broader scheme.

2. Substantive Reasonableness – Length of the Sentence

a. Legal Standards and Precedents

Substantive reasonableness addresses whether a sentence is too long or too short in light of the § 3553(a) factors. The Second Circuit’s standard, reiterated here, is highly deferential:

• A sentence is substantively unreasonable only if it is:
  • “Shockingly high”;
  • “Shockingly low”; or
  • “Otherwise unsupportable as a matter of law.”
  (citing United States v. Rigas, 583 F.3d 108 (2d Cir. 2009)).
• Defendants challenging the substantive reasonableness of a sentence bear a “heavy burden,” and review is “particularly deferential” (citing United States v. Broxmeyer, 699 F.3d 265 (2d Cir. 2012)).

Regarding national sentencing comparisons, the court cites:

• United States v. Sampson, 898 F.3d 287 (2d Cir. 2018) – holding that disparities between a defendant’s sentence and national averages or medians can be justified by case‑specific contextual factors that make the defendant’s crimes particularly serious.

b. Davis’s Disparity Arguments

Davis raised two principal disparity arguments:

1. Co‑defendant disparity. He argued that his 40‑month sentence was unreasonably higher than the sentences assigned to co‑defendants, especially Charles Watson Jr., who received a time‑served sentence.
2. National average disparity. He pointed to national sentencing statistics, asserting that fraud defendants with his offense level and criminal history typically receive lower sentences.

c. The Court’s Response

On co‑defendant disparity:

• The panel emphasized that defendants in the same conspiracy are not automatically similarly situated.
• Watson was a cooperating witness who provided substantial assistance and received a U.S.S.G. § 5K1.1 motion from the government, warranting a lower sentence.
• The district court specifically found Davis to be more culpable, noting that he “broadened the scheme to include another doctor,” thereby expanding the fraud.

On national sentencing disparity:

• The court accepted that Davis’s sentence might be higher than some national averages but treated that as not determinative. Under Sampson, what matters is whether the sentence is supported by a reasoned, individualized assessment of the § 3553(a) factors.
• The district court conducted a detailed analysis, emphasizing:
  • The seriousness of Davis’s conduct;
  • His efforts to cover up the crime, including:
    • Deceiving the Plan;
    • Calling the Plan to check on a claim in ways that the court viewed as attempts to conceal wrongdoing.

Given this record, the Second Circuit held that Davis’s 40‑month sentence was not shockingly high and was fully supportable under § 3553(a).

d. Significance

For practitioners, this confirms:

• Cooperation matters enormously. Co‑defendants who cooperate and receive § 5K1.1 letters are expected to receive substantially reduced sentences.
• Culpability is individualized. Expanding a scheme, lying to investigators, or engaging in repeat fraud justifies tougher sentences even when national averages are lower.
• National statistics are at best persuasive, not controlling. Courts can impose above‑average sentences when justified by the specifics of the case without being substantively unreasonable.

V. Complex Concepts Simplified

1. Conscious Avoidance (Willful Blindness)

Conscious avoidance, sometimes called willful blindness, is a doctrine that allows a jury to treat a defendant as having knowledge of a fact if two conditions are met:

1. The defendant was aware of a high probability that a fact was true (e.g., that invoices were fraudulent); and
2. The defendant deliberately avoided confirming that fact, instead of taking reasonable steps to find out.

It is not enough that the defendant was negligent or careless. There must be evidence of a conscious decision to avoid learning the truth, as in Bynum’s case where he accepted suspicious invoices from a non‑provider and excluded his advisor from key calls.

2. “Health Care Benefit Program” and “Custody or Control”

Under 18 U.S.C. § 24(b), a “health care benefit program” includes:

• Any public or private plan;
• That provides or pays for medical benefits, items, or services.

The NBA Plan clearly fits this definition. The phrase “under the custody or control of” in § 1347 means the Plan has authority over the funds – it can decide whether to pay claims, and how. Even if the funds come from player contributions or are for player benefit, they are under the Plan’s control when administered.

3. Wire Fraud vs. Health Care Fraud

• Wire fraud (18 U.S.C. § 1343):
  • Focuses on schemes to defraud or to obtain money or property via interstate wire communications (phone, email, electronic transfers);
  • More generic and not limited to health care.
• Health care fraud (18 U.S.C. § 1347):
  • Targets fraud involving health care benefit programs specifically;
  • Expressly covers money or property “owned by, or under the custody or control of” that program, giving it a broad reach.

4. Plain Error Review

Plain error review applies when a defendant did not object properly in the trial court. The appellate court will only reverse if:

1. There was an error;
2. The error was clear or obvious under current law;
3. The error affected the outcome (substantial rights); and
4. Leaving it uncorrected would seriously damage the fairness or integrity of the judicial process.

This is a difficult standard to meet, which is why Davis’s generalized evidentiary complaint failed.

5. Diminished Capacity vs. Insanity and Mens Rea Evidence

Under federal law:

• Insanity (18 U.S.C. § 17) is an affirmative defense requiring proof that, due to a severe mental disease or defect, the defendant could not appreciate the nature, quality, or wrongfulness of the act.
• Diminished capacity – a lesser mental impairment that falls short of insanity – generally does not constitute a standalone federal defense, given § 17’s language that “mental disease or defect does not otherwise constitute a defense.”

Defendants may attempt to introduce mental‑state evidence to show lack of specific intent (mens rea), but courts police the line between:

• Legitimate evidence that tends to show the defendant did not actually intend to commit the crime; and
• Improper attempts to present non‑insanity mental impairments as quasi‑defenses.

Davis’s “lack of sophistication” arguments were treated as falling into the latter category, especially since he had disclaimed a formal diminished capacity defense.

6. Sentencing Basics: Relevant Conduct, Loss, and 5K1.1 Motions

• Relevant conduct (U.S.S.G. § 1B1.3) includes not just the defendant’s own acts, but also certain acts of co‑conspirators that were:
  • Within the scope of the jointly undertaken criminal activity;
  • In furtherance of that activity; and
  • Reasonably foreseeable to the defendant.
• Loss calculation (§ 2B1.1) drives the offense level in fraud cases; higher loss typically means higher guideline ranges.
• 5K1.1 motions are government motions acknowledging a defendant’s substantial assistance (e.g., testifying against co‑conspirators), allowing courts to reduce sentences below the otherwise applicable guideline range.

In this case, Davis did not benefit from a 5K1.1 motion and was held liable for foreseeable co‑conspirator losses, while co‑defendant Watson, who cooperated, received a significantly lighter sentence.

VI. Potential Impact and Broader Significance

Although this decision is a non‑precedential summary order, it is citable and instructive in several respects:

• Health Care Fraud Prosecutions:
  • Reinforces that private employer or union health plans fall squarely within the definition of “health care benefit program.”
  • Emphasizes the broad reach of “custody or control” over funds for purposes of § 1347.
• Sports and Entertainment Benefit Plans:
  • Demonstrates a willingness of federal courts to sustain robust prosecutions where high‑profile beneficiaries (here, ex‑NBA players) abuse plan benefits.
  • Signals to professional athletes and similarly situated individuals that “everyone was doing it” and “I didn’t really understand” are weak defenses when there are clear indicators of fraud.
• Conscious Avoidance Instructions:
  • Confirms that sophisticated financial or benefit‑plan fraud schemes often justify willful blindness charges based on multiple red flags.
  • Encourages prosecutors to develop a detailed record of such red flags; conversely, it warns defense counsel about raising “lack of knowledge” defenses in the face of glaring suspicious circumstances.
• Mental Capacity Evidence:
  • Underscores the limited room federal defendants have to use mental impairments short of insanity to defeat mens rea.
  • Encourages careful pretrial consideration of whether to pursue formal mental health defenses, recognizing their legal and strategic implications.
• Sentencing in Fraud Conspiracies:
  • Reaffirms that co‑conspirator losses will often be attributed to any participant who was aware, or reasonably should have been aware, of the broader scheme.
  • Confirms that substantial assistance and relative culpability can justify major disparities between co‑defendants without rendering a sentence substantively unreasonable.

VII. Conclusion

United States v. Bynum, Davis offers a concise but rich application of several important strands of federal criminal law:

• The threshold for conscious avoidance instructions in benefit‑plan fraud cases, rooted in circumstantial evidence and “red flags” of illegality;
• The broad statutory scope of health care fraud under § 1347, including money or property held “under the custody or control” of health care benefit programs such as the NBA Players’ Health and Welfare Benefit Plan;
• The limits on diminished‑capacity‑style defenses in light of § 17(a)’s narrow insanity standard;
• The aggregation of foreseeable co‑conspirator losses under the Guidelines and the high bar for overturning sentences as substantively unreasonable, even in the face of co‑defendant and national disparities.

Although not binding precedent, the order provides a clear roadmap for how the Second Circuit will likely treat similar issues in health care and benefit‑plan fraud cases, especially those involving coordinated schemes, suspicious documentation, and attempts to disclaim knowledge in the face of obvious warning signs.