Moslem (2d Cir. 2025): Harmless Ciminelli Instruction Error, Intended-Loss Sentencing, and Dubin’s “Who” Standard for Aggravated Identity Theft

Note on precedential status: The court labeled this a “Summary Order,” which does not have precedential effect under Second Circuit Local Rule 32.1.1. Nonetheless, the decision provides persuasive guidance on several recurring issues, including post-Ciminelli jury instructions, post-Dubin aggravated identity theft, and loss calculations under the Guidelines.

Introduction

This consolidated appeal arises from the convictions of a father and son, Mehdi and Saaed Moslem, following a jury trial in the Southern District of New York for a suite of fraud-related offenses. Both were convicted of conspiracies to commit tax and bank fraud. Additionally, Saaed was convicted of making false statements to a bank, bankruptcy fraud, and aggravated identity theft. The district court sentenced Mehdi to 40 months and Saaed to 8 years’ imprisonment.

On appeal, Defendants advanced a broad array of challenges spanning alleged outrageous government misconduct (based on the government’s use of their accountant, Stephen Strauhs, as a confidential informant), duplicity and multiple-conspiracy arguments, evidentiary rulings about repayment, jury-instruction error under Ciminelli, sufficiency under Dubin for aggravated identity theft, denial of post-trial appointment of counsel at a Fatico hearing, a battery of sentencing challenges (intended loss, tax-loss estimation methodology, victim count), restitution to New York State, motions for a new trial under Rule 33 based on post-trial materials, and recusal. Mehdi also raised a skeletal ineffective assistance claim.

Summary of the Opinion

The Second Circuit affirmed across the board, rejecting every claim of error. Key holdings include:

No outrageous government misconduct where the accountant-informant followed defendants’ directions and the fraud predated his cooperation.
No duplicity in charging conspiracies that encompassed multiple acts and entities as part of a single scheme; no entitlement to a multiple-conspiracies instruction.
Evidence of loan repayment was properly excluded as minimally relevant and confusing under Shaw v. United States; bank fraud does not require ultimate loss.
Although the jury was instructed on a now-invalid right-to-control theory, any error was harmless (reviewed for plain error) because the evidence on a traditional property theory was strong.
Sufficient evidence supported Saaed’s aggravated identity theft conviction; his use of the girlfriend’s identity without consent for a second application satisfied § 1028A under Dubin because the deception went to “who” was involved.
No abuse of discretion in denying Saaed’s post-trial request for counsel at a Fatico hearing; the request was a delay tactic and he had elected to proceed pro se after a Faretta colloquy.
No procedural sentencing error: intended loss remains a valid measure in the Second Circuit; the district court reasonably extrapolated tax loss; repayment after detection does not reduce loss; and the 10+ victim enhancement was supported.
Restitution to New York State was proper under the MVRA; the state is an identifiable victim of tax crimes.
Rule 33 motions based on a 5K1.1 letter and CPA registration forms failed for lack of materiality and diligence; the information was cumulative and would not likely have led to acquittal.
Recusal was correctly denied; a party cannot manufacture recusal via hostility and judge-shopping.
Ineffective assistance claims are better reserved for § 2255 proceedings; the court declined to address Mehdi’s on direct appeal.

Analysis

Standards of Review Framed the Outcome

Outrageous government misconduct: de novo (but an exceedingly high bar, rarely met).
Unpreserved claims (duplicity, multiple conspiracies instruction, Ciminelli instruction error, sufficiency without Rule 29, restitution objections): plain error under United States v. Marcus, requiring a showing that any error seriously affected the fairness, integrity, or public reputation of judicial proceedings.
Evidentiary rulings and denial of new counsel: abuse of discretion.
Sentencing procedure: abuse of discretion, with deference to Guideline applications and factual findings unless clearly erroneous (Gall, Chu).

I. No Outrageous Government Misconduct

Defendants argued that the government’s use of their longtime accountant, Stephen Strauhs, as a confidential informant “offended” common notions of fairness (United States v. Walters) and warranted dismissal. The panel emphasized how rarely courts find due-process “outrageous government misconduct” (United States v. Berkovich) and observed:

The charged fraud predated the informant’s cooperation.
Strauhs followed Defendants’ instructions and did not coerce them (United States v. Dyman).
Even if an informant “coached” the defendants, that is not enough (United States v. Cromitie).
Second Circuit has upheld sting operations more elaborate than this, including where an informant was an attorney (United States v. Williams).

The court rejected the notion that the mere status of the informant as an accountant transforms the investigation into due-process misconduct.

II. No Duplicity; No Multiple-Conspiracies Instruction

On plain-error review, the court rejected duplicity challenges to both conspiracy counts and the request for a multiple-conspiracies instruction.

Tax-fraud conspiracy (Count One): Allegations about Accel Motors (wholly owned by Mehdi) could be charged alongside underreporting at Exclusive Motor Sports (a joint enterprise). Evidence showed intertwined finances and mutual coordination with the accountant. Under United States v. Payne, separate “spheres of operation” can form a single scheme when tied by mutual dependence and a common goal (here, minimizing tax obligations).
Bank-fraud conspiracy (Count Two):
- Mehdi’s challenge to inclusion of a specific fraudulent loan tied to a car sold by Exclusive failed because a conspirator need not agree to every detail so long as he agrees to the essential nature of the plan (United States v. Geibel).
- Saaed’s argument that multiple loan applications over years were impermissibly combined failed; multiple acts can be charged as one count if part of a single scheme (United States v. Moloney; see also United States v. Tutino on narcotics conspiracies).
Multiple-conspiracies instruction: Denied because there was ample evidence of the single charged conspiracy (Payne) and no evidence supporting more than one conspiracy (United States v. Vazquez) or prejudice under Marcus.

III. Exclusion of Repayment Evidence Was Proper Under Shaw and Rule 403

Defendants sought to introduce evidence that some fraudulently obtained loans were later repaid. The court affirmed exclusion because:

Bank fraud does not require actual financial harm or an intent to cause harm; the scheme is “complete when the cash is taken” (Shaw v. United States).
Any marginal relevance to rebut intent was substantially outweighed by the risk of confusion under Rule 403, a ruling reviewed and affirmed for not being “manifestly erroneous” (United States v. McGinn).

IV. Right-to-Control Instruction Error Was Harmless Under Plain-Error Review

The district court instructed the jury on both a traditional property theory and a right-to-control theory of wire fraud in connection with the bank-fraud conspiracy. After Ciminelli v. United States invalidated the right-to-control theory, Defendants argued the general verdict could have rested on an invalid ground (Yates v. United States).

The panel found plain error harmless because the government primarily argued, and the evidence overwhelmingly supported, the traditional property theory—Defendants obtained money by submitting fabricated bank-loan documents. Given the strength of that evidence, the court was “confident the jury would have convicted in the absence of the error” (United States v. Laurent; see also Stone v. United States).

V. Sufficient Evidence for Aggravated Identity Theft Under Dubin

Under § 1028A, it is unlawful to knowingly use a “means of identification of another person” “without lawful authority” during and in relation to a predicate offense. The evidence showed that after a first loan application in the girlfriend’s name (with her participation) was denied, Saaed submitted a second application in her name to a different bank without her knowledge or consent.

Even if the girlfriend consented to the first application, she did not consent to the second; thus Saaed lacked “lawful authority” for the use of her identity in the second application.
The use of her identity was not ancillary. Under Dubin v. United States, § 1028A is implicated when the deception goes to “who” is involved—not merely “how” or “when” services are rendered. Here, the bank would have approved the loan on the false premise that the girlfriend herself applied; the identity use was “at the crux” of the bank-fraud offense.
On sufficiency, reviewed for plain error because no Rule 29 motion was made (United States v. Draper), the evidence easily supported the verdict under the deferential standard (United States v. Atilla).

VI. Denial of Post-Trial Appointment of Counsel at Fatico Hearing

At a Fatico hearing on tax loss, the district court denied Saaed’s request for new counsel, finding it a delay tactic. The court had previously conducted a Faretta colloquy and warned that he could not toggle between self-representation and representation. Given a pattern of adjournments and ample time (about 15 months) to prepare for sentencing, the Second Circuit found no abuse of discretion (United States v. Kerr), and no need for more formal inquiry because the rationale was apparent on the record.

VII. No Procedural Sentencing Error

The panel rejected a series of procedural challenges:

Intended loss: The court reaffirmed that intended loss is a valid metric under § 2B1.1’s application notes in the Second Circuit (United States v. Rainford; United States v. Zheng), and the district court properly used intended, rather than actual, loss.
Tax-loss estimation: The district court reasonably used Exclusive’s 2009 gross profit percentage to estimate later-year inventory values because later inventory entries were inaccurate. Such extrapolation is permissible when defendants’ own misreporting obscures precise calculation (United States v. Bryant; United States v. Uddin).
Relevant conduct and foreseeability: Attributing all tax loss to both co-conspirators was consistent with § 1B1.3(a)(1)(B) (jointly undertaken activity; reasonably foreseeable acts in furtherance).
Loss to Walden Bank: No reduction for repayment made after detection; credit applies only to money returned before the offense was detected (§ 2B1.1 app. n. 3(E)(i)).
10+ victims enhancement: A two-level enhancement under § 2B1.1(b)(2)(A) was proper; the Guideline does not exclude “nominal” or “minimal” losses. Saaed offered no evidence to rebut the government’s victim count or loss claims despite the opportunity to do so.

VIII. Restitution to New York State Was Proper

Applying an “extremely deferential” standard (United States v. Grant) and plain-error review (no objection below; United States v. Zangari), the court affirmed restitution to New York State as an “identifiable victim” directly harmed by the tax-fraud scheme under the MVRA, 18 U.S.C. § 3663A. The Second Circuit has long permitted restitution to governmental entities in tax cases (United States v. Helmsley), notwithstanding separate civil tax-collection remedies.

IX. Rule 33 Motions for New Trial Properly Denied

Defendants pointed to two items: (1) a § 5K1.1 letter noting “Additional Fraudulent Conduct” (redacted) and (2) the informant’s CPA registration forms omitting his guilty plea. To obtain a new trial, defendants must show diligence, materiality (not cumulative), and a probability of acquittal with the new evidence (United States v. Owen).

The redacted information had been disclosed pretrial under the Jencks Act two weeks before trial, defeating “newness” and diligence.
Given the weight of the trial evidence, the additional credibility material was cumulative and would not likely have produced an acquittal.

X. Recusal Denial Was Correct

Saaed sought recusal under 28 U.S.C. § 455(a), arguing his own hostile statements toward the judge undermined impartiality. The Second Circuit rejected this, noting that parties cannot create recusal grounds by expressing hostility or making threats—courts must avoid judge-shopping (In re Basciano). An informed, objective observer would not doubt the judge’s impartiality here, especially given the careful rulings the panel affirmed.

XI. Ineffective Assistance Reserved for § 2255

Mehdi’s conclusory ineffective assistance claim, relying on omissions and attorney-client communications, could not be resolved on the trial record and was therefore reserved for a collateral proceeding under 28 U.S.C. § 2255 (United States v. Adams; Billy-Eko v. United States; United States v. Salameh). The court declined to reach the claim on direct appeal.

Other Notable Rulings and Footnotes

Amendment 821 zero-point offender: The panel noted Saaed’s ineligibility for a § 4C1.1 reduction because he had one criminal history point for driving while impaired. The district court’s timing did not alter the outcome.
Panel recusal motion: Saaed’s late motion for a panel member’s recusal was denied; the described circumstances would not cause a reasonable observer to doubt justice would be done (In re Basciano).

Precedents Cited and Their Influence

Outrageous misconduct: Walters (standard), Berkovich (rarely found), Dyman (informant following instructions), Cromitie (coaching insufficient), Williams (informant-attorney context).
Conspiracy scope and duplicity: Payne (single scheme via mutual dependence/common goal), Geibel (agreement to essential nature), Moloney and Tutino (multiple acts in one scheme), Vazquez (multiple conspiracies instruction), Marcus (plain error).
Bank fraud and repayment: Shaw (no harm requirement; scheme complete when money is taken), McGinn (Rule 403 deference).
Jury instructions post-Ciminelli: Ciminelli (invalidates right-to-control), Yates (general verdict on mixed theories), Stone and Laurent (harmlessness where traditional property theory is strong).
Aggravated identity theft: Dubin (“who” vs. “how”), Atilla (sufficiency standard), Draper (plain error on unpreserved sufficiency).
Representation issues: Kerr (new counsel standard), Faretta (self-representation waiver).
Sentencing: Gall, Chu (procedural review), § 2B1.1 app. n. 3(A) (intended loss), Rainford and Zheng (intended loss remains viable in 2d Cir.), Bryant and Uddin (reasonable extrapolation), § 1B1.3 (relevant conduct), § 2B1.1 app. n. 3(E)(i) (repayment before detection), § 2B1.1(b)(2)(A) and app. n. 3(A)(iii) (victim count and pecuniary harm).
Restitution: Grant (deferential review), Zangari (plain error), Helmsley (government as tax-crime victim).
New trial: Owen (materiality, diligence, likely acquittal), Jencks Act (timely pretrial disclosure undermines “newness”).
Recusal: In re Basciano (no judge-shopping; objective observer test).
Ineffective assistance: Adams, Billy-Eko, Salameh, and Vilar (favor § 2255 for fact-intensive claims; need to exhaust direct appeal).

Impact and Practice Implications

Post-Ciminelli jury instructions: Prosecutors and courts should avoid right-to-control language. Yet, if a case was tried with mixed instructions and the property-based theory is strong, convictions may survive on harmless-error or plain-error review. Defense counsel must preserve instructional objections to avoid the demanding plain-error standard.
Aggravated identity theft after Dubin: Where identity deception concerns “who” is transacting (e.g., a bank loan applicant’s identity), § 1028A applies. Initial consent to one transaction does not confer “lawful authority” for later, unauthorized uses of the same identity.
Use of professional advisors as informants: The mere fact an informant is a fiduciary (e.g., accountant) does not constitute outrageous government conduct, particularly where the fraud predates cooperation and the informant follows defendants’ directions. Entrapment/duress-type evidence remains distinct from “outrageous misconduct.”
Conspiracy charging and duplicity: The Second Circuit continues to permit aggregation of multiple acts over time into a single conspiracy count where tied by a single scheme. If defendants seek a multiple-conspiracies instruction, they must identify concrete evidence of distinct conspiracies and prejudice.
Repayment evidence in bank-fraud trials: Repayment after the fact is generally irrelevant to liability and risks juror confusion. Defense arguments about lack of fraudulent intent should focus on contemporaneous evidence rather than later repayments.
Sentencing—intended loss in the Second Circuit: Despite ongoing debates elsewhere, the Second Circuit treats intended loss as valid under § 2B1.1. Practitioners should be ready with alternative, well-supported loss computations and evidence of detection timing for credit, plus argument on foreseeability and victim counts—with evidence, not assertions.
Restitution to state tax authorities: State tax agencies remain “victims” under the MVRA for tax-fraud restitution in the Second Circuit, notwithstanding the existence of civil tax remedies.
Self-representation and midstream counsel requests: Faretta waivers will be honored, and late-stage requests to reappoint counsel viewed skeptically if they appear tactical. Plan sentencing/Fatico strategy accordingly.
Post-trial “new evidence”: Materials already disclosed under the Jencks Act are not “new”; cumulative impeachment rarely meets the Rule 33 standard for a new trial.
Recusal motions based on party hostility: Courts will not reward judge-shopping via provocation. Recusal demands must satisfy the objective observer test with facts indicating actual bias or its appearance.

Complex Concepts Simplified

Outrageous government misconduct: A rare due-process defense requiring government behavior so shocking that it violates fundamental fairness—far beyond typical undercover or informant activity.
Duplicity: Charging two or more distinct crimes in one count. It risks jury unanimity problems. Not implicated where multiple acts further a single scheme or conspiracy.
Multiple-conspiracies instruction: A jury instruction given only if evidence supports more than one conspiracy and there is a real risk the jury will conflate them.
Plain error: A high bar for unpreserved issues. The appellant must show an error that is clear or obvious and that affects substantial rights and seriously affects the fairness, integrity, or public reputation of judicial proceedings.
Right-to-control (Ciminelli): The Supreme Court rejected the theory that deprivation of “potentially valuable economic information” is property for mail/wire fraud. Fraud must target traditional property interests.
Dubin’s “who” standard: Aggravated identity theft under § 1028A is implicated when the misrepresentation is about “who” is engaged in the transaction, not merely details about “how/when” services or events occurred.
Intended vs. actual loss (Guidelines): In the Second Circuit, courts may use the higher of actual or intended loss for § 2B1.1 calculations. “Detection” matters for crediting repayments: only amounts returned before detection reduce loss.
Fatico hearing: An evidentiary hearing at sentencing to resolve disputed facts (e.g., loss amounts). Named after United States v. Fatico.
Jencks Act: Requires disclosure of certain prior statements of government witnesses; timely pretrial Jencks disclosures undercut later “new evidence” claims.
MVRA victims: “Identifiable victims” directly harmed by the offense—including governments in tax cases—are entitled to restitution.

Conclusion

United States v. Moslem offers a comprehensive, if nonprecedential, reaffirmation of several Second Circuit positions and post-Supreme Court adjustments. The court:

Rejects “outrageous government misconduct” claims based solely on use of a professional advisor as an informant where the informant follows defendants’ lead and the fraud predates cooperation.
Continues to accept broad, single-scheme conspiracy charging spanning multiple acts and entities, and denies multiple-conspiracies instructions absent concrete evidence of distinct agreements.
Holds firm that repayment evidence is marginal in bank-fraud prosecutions under Shaw, and that right-to-control instructional error is harmless where robust property-based evidence exists post-Ciminelli.
Affirms § 1028A convictions aligned with Dubin where identity deception concerns “who” is involved in the transaction.
Confirms that intended loss remains valid for § 2B1.1 calculations in this Circuit, endorses reasonable extrapolation for tax loss, and applies victim-count enhancements as written.
Approves restitution to state tax authorities as MVRA victims and rejects recusal/judge-shopping gambits.

Practitioners should take from Moslem the critical importance of preserving objections; structuring conspiracy charges and defenses around scheme unity or fragmentation; calibrating trial strategies to Shaw, Ciminelli, and Dubin; and preparing evidentiary records for sentencing that meet the Second Circuit’s expectations on loss, detection timing, and victim impact. Ineffective-assistance claims hinging on materials outside the trial record remain best pursued via § 2255.