Deferral-as-Loss: Unpaid Bribery-Induced Lease Deferrals Count as Full “Loss/Benefit” Under U.S.S.G. § 2C1.1(b)(2), and Immunity-Testimony Prejudice Is Typically Cured by a Limiting Instruction

1. Introduction

United States v. Abdur Rahim Islam (3d Cir. Jan. 8, 2026) is a non-precedential decision affirming the defendant’s convictions and 84-month sentence arising from a multi-year scheme involving misuse of nonprofit funds, bribery tied to charter-school leases, and related fraud and tax offenses.

Islam, the CEO of “Universal Companies,” controlled two 501(c)(3) entities—Universal Community Homes (“UCH”) and Universal Education Companies (“UEC”). The Government alleged (and the jury found) that he diverted nonprofit resources for personal expenses and bribed Milwaukee Public School Board President Michael Bonds to obtain lease deferrals for UEC’s charter schools.

On appeal, Islam challenged: (1) an evidentiary ruling allowing testimony about why a witness obtained immunity; (2) the Sentencing Guidelines calculation—specifically the $1,000,000 “benefit/loss” used to enhance his offense level under U.S.S.G. § 2C1.1(b)(2); and (3) the denial of his double jeopardy motion, an issue the Third Circuit had already resolved in a prior precedential appeal.

2. Summary of the Opinion

The Third Circuit affirmed across the board:

Evidentiary issue: The court held the District Court did not abuse its discretion by permitting limited testimony that the witness requested immunity because she had lied to federal agents, particularly given a clear limiting instruction. Any error would be harmless.
Sentencing issue: The court upheld a 14-level enhancement under U.S.S.G. § 2C1.1(b)(2) based on approximately $1,000,000 as the “benefit” to UEC or “loss” to Milwaukee Public School Board (“MPS”). Because the deferred lease payments were never repaid and the deferral was “inextricably linked” to the bribery, the full amount was reasonably foreseeable pecuniary harm.
Double jeopardy: The court treated the issue as controlled by its prior precedential decision, United States v. Islam, 102 F.4th 143 (3d Cir. 2024), and rejected the renewed argument under circuit internal operating procedures.

3. Analysis

3.1. Precedents Cited

a) Standards of review

United States v. Serafini, 233 F.3d 758 (3d Cir. 2000): Cited for the abuse-of-discretion standard governing evidentiary rulings. This framing is outcome-significant: once the panel identifies a plausible evidentiary basis and a limiting instruction, reversal becomes difficult unless the ruling is arbitrary or irrational.
United States v. Grier, 475 F.3d 556 (3d Cir. 2007) (en banc): Cited for the sentencing framework—clear-error review of factual findings and plenary review of Guidelines interpretation. This division of labor mattered because Islam’s challenge largely attacked the factual valuation of “loss/benefit,” which is reviewed deferentially.
United States v. Islam, 102 F.4th 143 (3d Cir. 2024): The controlling prior decision rejecting Islam’s double jeopardy argument. The 2026 panel treated this as binding and therefore not open to re-litigation.

b) Immunity agreement testimony, prejudice, and curative instructions

United States v. Richardson, 421 F.3d 17 (1st Cir. 2005): Quoted for the caution that the Government might try to smuggle in inadmissible, prejudicial matter under the guise of impeachment. The Third Circuit acknowledged this risk but emphasized the standard remedy: limiting instructions and the overall evidentiary context.
United States v. Universal Rehab. Servs. (PA), Inc., 205 F.3d 657 (3d Cir. 2000): Central to the panel’s resolution. The court invoked its own precedent that prejudice from such evidence is “typically cured” through a curative instruction—supporting affirmance because the District Court issued a clear instruction narrowing the jury’s permitted use of the testimony.
United States v. Bailey, 840 F.3d 99 (3d Cir. 2016): Provided the harmless-error test: an evidentiary error is harmless if it is “highly probable” it did not contribute to the judgment. The panel used Bailey as the doctrinal bridge to an alternative holding even if the admission had been mistaken.
United States v. Zehrbach, 47 F.3d 1252 (3d Cir. 1995) (en banc): Supplied factors for assessing whether an error affected the verdict—scope of the challenged matter, relationship to the entire proceeding, curative instruction effect, and strength of the evidence. These factors allowed the panel to situate Dunkley’s immunity testimony as peripheral.
United States v. Gambino, 926 F.2d 1355 (3d Cir. 1991): Used to reinforce the “non-central witness” concept: where the witness is not central to the Government’s case, error is more readily deemed harmless.

c) Sentencing “loss” findings and deference

United States v. Williams, 898 F.3d 323 (3d Cir. 2018): Cited for the high bar to overturn factual findings on clear-error review. By invoking Williams’s formulation (findings must not be “completely devoid” of support and must bear a “rational relationship” to evidentiary data), the panel anchored its deference to the District Court’s $1,000,000 valuation.

d) Law-of-the-circuit / law-of-the-case within the circuit

3d Cir. I.O.P. 9.1: Not a case citation, but dispositive institutional authority: it provides that a holding of a panel in a precedential opinion is binding on subsequent panels. The panel relied on this to dispatch the renewed double-jeopardy claim without revisiting the merits.

3.2. Legal Reasoning

a) Evidence of immunity agreement: relevance, prejudice, and limiting instruction

The challenged testimony established that the witness (Dunkley) sought immunity because she had previously lied to federal agents. Islam argued the testimony implicitly introduced an uncharged “political contribution scheme,” inviting propensity reasoning despite not being part of the superseding indictment.

The Third Circuit’s reasoning proceeded in two steps:

No abuse of discretion: Even acknowledging the general risk highlighted in United States v. Richardson, the court applied United States v. Universal Rehab. Servs. (PA), Inc. to conclude the District Court’s prompt, specific limiting instruction adequately addressed prejudice. The instruction told jurors Islam was not on trial for illegal reimbursement of campaign contributions and the evidence was “background and context only.”
Harmless error as an independent backstop: Applying United States v. Bailey, and the contextual factors from United States v. Zehrbach, the court held it was “highly probable” the testimony did not contribute to the verdict. Dunkley was portrayed as marginal—“a cherry on top”—given other witnesses and the overall evidentiary strength, echoing the logic of United States v. Gambino.

Doctrinally, the decision illustrates how appellate courts often treat limiting instructions as an effective cure, and how harmless-error review can independently sustain affirmance when the Government’s case is strong and the challenged evidence is not central.

b) Sentencing: when a “deferral” becomes the full “loss/benefit”

The Guidelines provision at issue, U.S.S.G. § 2C1.1(b)(2), ties the enhancement to whichever is greatest: the bribe payment’s value, the benefit received/expected, the value obtained by a public official/others, or the loss to the government. The District Court selected approximately $1,000,000, finding either: (i) a roughly $1,000,000 benefit to UEC from the lease deferrals; or (ii) a roughly $1,000,000 loss to MPS once UEC left and never paid the deferred rent.

Islam’s argument attempted to re-characterize the harm as merely the “time value of money” during the deferral period—an approach that would dramatically reduce the enhancement.

The Third Circuit rejected that framing because the factual predicate was not a temporary delay followed by repayment. The panel emphasized:

Nonpayment transformed deferral into deprivation: Because UEC never repaid, the deferral functionally operated as a loss of the principal amount.
Proximate causation and foreseeability: The District Court found the departure and nonpayment “inextricably linked” to the bribes that caused the deferral. The panel connected this to the definition of “loss” under U.S.S.G. § 2B1.1 cmt. n.3(A)(i) (Nov. 2023): “reasonably foreseeable pecuniary harm that resulted from the offense.”
Opportunity costs as part of foreseeable pecuniary harm: The court highlighted that MPS was deprived not only of rent but of the opportunity to rent to others, because UEC retained control of the buildings under the promise of future payments that never arrived.
Clear-error deference: Under United States v. Williams, the panel refused to disturb the District Court’s valuation where the record supported the inference that the bribery-induced deferral proximately caused the ultimate nonpayment and associated losses.

The practical rule emerging from the court’s reasoning is straightforward: a bribery scheme producing “deferrals” may be scored at the full deferred amount when, as a matter of fact and foreseeability, the deferral becomes nonpayment and deprives the victim of both the payment and meaningful alternatives.

c) Double jeopardy: binding effect of the earlier precedential decision

Islam re-raised double jeopardy solely to preserve it for higher review, conceding the Third Circuit was bound to reject it. The panel invoked United States v. Islam, 102 F.4th 143, and the binding-panel rule reflected in 3d Cir. I.O.P. 9.1, and adhered to the prior holding without reopening the analysis.

3.3. Impact

Sentencing in bribery/benefit cases: Although non-precedential, the opinion offers a persuasive roadmap for district courts: “deferral” arguments may fail where the record shows the defendant used bribery to postpone an obligation while insolvency made ultimate nonpayment foreseeable, and where the victim’s lost alternatives (e.g., inability to rent to a different tenant) are a predictable consequence.
Trial management of immunity evidence: The decision reinforces the Third Circuit’s tendency (as reflected in United States v. Universal Rehab. Servs. (PA), Inc.) to rely on limiting instructions to manage prejudice when immunity agreements or related credibility evidence is disclosed. Appellants will face an additional hurdle where harmless-error analysis can characterize the witness as cumulative or non-central.
Institutional finality in repeat appeals: The double-jeopardy section underscores how strongly the Third Circuit enforces intra-circuit binding authority: once a precedential panel resolves an issue, later panels will not revisit it absent the court sitting en banc or intervening Supreme Court authority.

4. Complex Concepts Simplified

Immunity agreement: A promise by prosecutors not to use certain testimony (or not to prosecute) so a witness can testify without incriminating themselves. Here, the witness said she sought immunity because she had lied to agents—information relevant to credibility, but potentially prejudicial if it suggests other wrongdoing.
Curative/limiting instruction: A judge’s direction telling jurors how they may (and may not) use certain evidence. The appellate court often assumes jurors follow these instructions, reducing the chance of reversal.
Harmless error (“highly probable”): Even if the trial court made a mistake, the conviction stands if the appellate court is highly confident the mistake did not affect the verdict.
Honest services wire fraud: A fraud theory involving bribery or kickbacks that deprive the public of an official’s honest services. Here, it was based on bribes to a school board official to secure lease deferrals.
Guidelines “loss” and foreseeability: Under U.S.S.G. § 2B1.1 cmt. n.3(A)(i), “loss” includes reasonably foreseeable monetary harm caused by the offense. If nonpayment is a foreseeable end result of bribery-induced deferral—especially amid known financial crisis—the “loss” can be the unpaid principal, not just interest/time-value.
Clear error: A deferential appellate standard. A factual finding is not reversed just because the appellate judges might have decided differently; it must lack credible evidentiary support or rational connection to the record.
Double jeopardy: A constitutional protection against being tried twice for the same offense. Islam had already litigated—and lost—that claim in a prior precedential appeal, making it binding on the later panel.

5. Conclusion

The Third Circuit’s decision in United States v. Abdur Rahim Islam affirms a conviction and sentence while delivering three clear lessons: (1) limited testimony about a witness’s immunity posture will often be upheld when paired with a strong limiting instruction and supported by harmless-error analysis; (2) for U.S.S.G. § 2C1.1(b)(2), a “deferral” achieved through bribery can be treated as the full loss/benefit when the deferred amount is never repaid and that outcome is reasonably foreseeable; and (3) issues resolved in a prior precedential panel decision—such as Islam’s double jeopardy claim in United States v. Islam, 102 F.4th 143—remain binding on later panels.