Second Circuit Reaffirms Braswell’s Act‑of‑Production Bar at Trial and Imposes Single‑Recovery Rule for Co‑Conspirator Forfeiture Under § 981

Introduction

United States v. Costanzo is a Second Circuit summary order arising from a public‑corruption prosecution centered on the sale of confidential Drug Enforcement Administration (DEA) information. After a jury convicted former DEA agent Manuel Recio and then‑senior DEA agent John Costanzo, Jr., of conspiracy and substantive counts of federal bribery and honest‑services fraud, both defendants appealed on multiple grounds.

The appeal presented six clusters of issues:

Whether grand jury and trial subpoenas to Recio’s LLC (Global Legal Consulting, “GLC”) and the government’s use of the subpoena returns at trial violated (i) Recio’s Fifth Amendment privilege against self‑incrimination, and (ii) Costanzo’s Sixth Amendment confrontation rights.
Whether the trial evidence was insufficient to prove a quid pro quo.
Whether prosecutorial summation remarks constituted misconduct requiring reversal.
Whether the district court erred under Federal Rule of Evidence 404(b) by admitting an email and attached memorandum involving a covert DEA operation.
Whether venue in the Southern District of New York (SDNY) was proper.
Whether the forfeiture orders complied with 18 U.S.C. § 981(a)(1)(C) and governing case law on co‑conspirator forfeiture.

The panel affirmed the convictions in all respects but vacated the forfeiture orders and remanded for further proceedings limited to forfeiture. Although issued as a nonprecedential summary order, the decision provides important guidance on two recurring issues: (1) the government’s trial use of a corporate custodian’s act of production under Braswell v. United States, and (2) how to structure forfeiture under § 981 to avoid impermissible double recovery when co‑conspirators each “acquire” tainted proceeds.

Summary of the Opinion

The Second Circuit held:

Fifth Amendment (Recio) — Subpoenas: No violation. Subpoenas were properly directed to GLC, a collective entity, and sought corporate records. Under the collective‑entity doctrine (Braswell), a custodian cannot refuse production on Fifth Amendment grounds.
Fifth Amendment (Recio) — Trial use of returns: The government’s attribution to Recio of GLC’s subpoena response and its argument that the response was “Recio’s admission” contravened Braswell’s mitigating evidentiary privilege. That was plain error but did not affect substantial rights in light of overwhelming independent evidence of guilt.
Sixth Amendment (Costanzo): Even assuming testimonial use of statements attributable to Recio as custodian and potential Bruton implications, any error was not prejudicial under plain‑error review given the ample independent evidence of Costanzo’s guilt.
Sufficiency: The evidence easily supported a quid pro quo. The temporal link between payments and the flow of DEA information, coupled with unsupported invoices, coded communications, and concealment efforts, sufficed.
Rule 404(b) / “Intrinsic” evidence: Admission of an email from Recio’s DEA account forwarding a covert‑operation memorandum to his personal account was proper both as intrinsic background “inextricably intertwined” with the scheme and, in the alternative, as Rule 404(b) proof of intent, plan, preparation, and knowledge. Any prejudice did not substantially outweigh probative value.
Venue: Proper in SDNY based on (a) a call Recio placed from SDNY to obtain confidential information and (b) Costanzo’s acceptance of Yankees tickets purchased by a co‑conspirator while in SDNY. Bribery, honest‑services fraud, and conspiracy are continuing offenses; the cited acts were overt acts and continuations of the charged schemes.
Forfeiture: The district court’s tracing determinations were largely sound. However, where both defendants “acquired” (at different points) the same tainted proceeds, the orders must be structured to ensure the Government recovers those amounts only once. The court vacated both forfeiture orders and remanded to apply the single‑recovery principle (e.g., by imposing joint and several liability for overlapping proceeds), consistent with Honeycutt and Tanner.

Analysis

Precedents Cited and Their Influence

Braswell v. United States, 487 U.S. 99 (1988): Establishes the collective‑entity doctrine and a “mitigating evidentiary privilege.” A corporate custodian must produce corporate records but the government may not use the custodian’s act of production or identity at trial to incriminate the custodian personally. The panel applied Braswell to reject Recio’s Fifth Amendment subpoena challenge yet found plain error in the prosecution’s summation and evidentiary framing that tied the subpoena return to “Recio’s admission.”
United States v. Hubbell, 530 U.S. 27 (2000): Reaffirms that compelled testimonial aspects of document production by an individual can implicate the Fifth Amendment. The panel distinguished Hubbell because the subpoenas here were directed to a corporate entity (GLC), not to Recio in his personal capacity.
Armstrong v. Guccione, 470 F.3d 89 (2d Cir. 2006) and United States v. Fridman, 974 F.3d 163 (2d Cir. 2020): Post‑Hubbell Second Circuit decisions confirming that Braswell remains controlling for corporate custodians and that the act‑of‑production privilege does not permit a custodian to withhold corporate records.
Crawford v. Washington, 541 U.S. 36 (2004); Melendez‑Diaz v. Massachusetts, 557 U.S. 305 (2009); Bruton v. United States, 391 U.S. 123 (1968): Define the Confrontation Clause’s limits on testimonial statements by non‑testifying witnesses and the Bruton problem with co‑defendant statements. The panel assumed arguendo potential issues but found no prejudice.
United States v. Silver, 948 F.3d 538 (2d Cir. 2020); United States v. Bruno, 661 F.3d 733 (2d Cir. 2011); United States v. Rutigliano, 790 F.3d 389 (2d Cir. 2015): Confirm that quid pro quo can be proven by circumstantial evidence, including timing, communications, and concealment. These cases undergird the sufficiency holding.
United States v. Quinones, 511 F.3d 289 (2d Cir. 2007); United States v. Diaz, 176 F.3d 52 (2d Cir. 1999); United States v. Roldan‑Zapata, 916 F.2d 795 (2d Cir. 1990): Clarify when uncharged conduct is “intrinsic” to the conspiracy and when Rule 404(b) evidence is admissible; used to uphold the admission of Recio’s email and the covert‑operation memorandum.
Fed. R. Crim. P. 18; 18 U.S.C. § 3237(a); United States v. Lange, 834 F.3d 58 (2d Cir. 2016); United States v. Rommy, 506 F.3d 108 (2d Cir. 2007); United States v. Royer, 549 F.3d 886 (2d Cir. 2008); United States v. Tang Yuk, 885 F.3d 57 (2d Cir. 2018): Provide the venue framework for continuing offenses and conspiracies; the panel relied on these to affirm SDNY venue.
Forfeiture statutes and cases:
- 18 U.S.C. § 981(a)(1)(C) and § 981(a)(2)(A) (proceeds forfeiture); 28 U.S.C. § 2461(c) (criminal forfeiture via civil forfeiture statutes).
- United States v. Uddin, 551 F.3d 176 (2d Cir. 2009) and United States v. Treacy, 639 F.3d 32 (2d Cir. 2011): Standard of proof and reasonable approximation.
- Honeycutt v. United States, 581 U.S. 443 (2017): Limits forfeiture to property the defendant actually obtained under § 853; used here for the principle that forfeiture cannot result in more than single recovery and to clarify the “acquisition” requirement. The panel, consistent with prior Second Circuit treatment, applies Honeycutt’s reasoning to § 981.
- United States v. Contorinis, 692 F.3d 136 (2d Cir. 2012): “Acquired” means having control over the proceeds at some point.
- United States v. Tanner, 942 F.3d 60 (2d Cir. 2019): Vacated duplicative forfeiture and required joint‑and‑several liability for overlapping proceeds to avoid double recovery; the lynchpin for the remand here.
- United States v. Mandell, 752 F.3d 544 (2d Cir. 2014): Recognizes joint and several forfeiture under § 981 to prevent double counting when each defendant acquired the proceeds.
Grand jury misuse: United States v. Calk, 87 F.4th 164 (2d Cir. 2023); United States v. Jones, 129 F.3d 718 (2d Cir. 1997). The panel found no abuse; the record showed ongoing investigative purposes beyond trial preparation.
Plain error and prejudice standards: United States v. Greer, 631 F.3d 608 (2d Cir. 2011); United States v. Mangano, 128 F.4th 442 (2d Cir. 2025). Applied to deny relief despite acknowledged error in the government’s trial use of the custodian’s act of production.
Prosecutorial misconduct standard: United States v. Certified Environmental Services, 753 F.3d 72 (2d Cir. 2014); United States v. Truman, 688 F.3d 129 (2d Cir. 2012). The panel found no substantial prejudice in context of the entire trial.

Legal Reasoning

1) Fifth Amendment: Corporate Subpoenas and the Act of Production

The court reaffirmed a two‑track approach. First, subpoenas to GLC did not violate Recio’s personal Fifth Amendment privilege because the privilege is “personal,” and a corporate custodian cannot resist production of corporate records. That remains true even if the custodian is the sole owner/employee of the entity and even after Hubbell.

Second, Braswell’s mitigating evidentiary privilege restricts what the government may do at trial with that compelled act of production. The government should not introduce to the jury that the subpoena was served on and the responsive records were collected or certified by “one particular individual, the custodian.” Here, the prosecutor’s summation did exactly that—repeatedly telling the jury that “Recio” pulled the responsive materials together and treating the production as “Recio … truthfully admitting” the payment’s purpose. The panel deemed this a clear Braswell violation. Because Recio had not preserved the trial‑use objection, the panel applied plain‑error review and, in light of overwhelming independent proof, found no effect on substantial rights.

2) Sixth Amendment: Confrontation and Bruton

Costanzo argued that the government’s use of GLC’s cover page and custodian certifications created testimonial statements attributable to non‑testifying co‑defendant Recio, raising Crawford/Bruton problems. The panel again applied plain‑error review (no objection below) and assumed arguendo potential error but found no prejudice given the robust, independent evidence of Costanzo’s guilt (including other co‑conspirators’ transfers and benefits).

3) Sufficiency: Proving Quid Pro Quo

The panel’s sufficiency analysis is notable for its pragmatic, circumstantial approach:

Temporal proximity: Payments (e.g., $10,000 and $10,750 from GLC to JEM) closely tracked Costanzo’s delivery of confidential DEA information (e.g., NADDIS searches, sealed indictments, and imminent arrests).
Sham documentation: Invoices lacked any supporting business records. The absence of legitimate documentation supported an inference of illicit purpose.
Communications: Contemporaneous messages (e.g., “Just made 2500”; discussions about “scheming … how we’re going to make money”) reinforced that the payments were compensation for leaks rather than benign networking or agency‑benefitting tips.
Concealment and intermediaries: Use of multiple entities (GLC, JEM, EBCO) and a middleman (Pagan) suggested consciousness of guilt and an effort to obfuscate the flow of value.
Receipt through a co‑owned entity: The court rejected the notion that the government had to prove Costanzo personally withdrew funds. Receipt through a co‑owned corporate vehicle (JEM) may satisfy the “received” element.

Viewed holistically and in the light most favorable to the verdict, a rational juror could find the requisite exchange of value for official action.

4) Evidentiary Ruling: Intrinsic Background vs. Rule 404(b)

The district court admitted an email Recio sent from his DEA account to his personal account attaching a sensitive memorandum about a covert operation (submitted by Costanzo and naming him as manager). The panel agreed the material was admissible:

Intrinsic to the conspiracy: The memorandum contextualized later charged communications (including discussions of named targets and sealed indictments). It was “part of the story” and “inextricably intertwined.”
Alternative 404(b) basis: Even if not intrinsic, the submission was probative of Recio’s intent, plan, preparation, and knowledge—particularly his plan (on the eve of retirement) to monetize insider law‑enforcement information for client recruitment.
Rule 403: Not unfairly prejudicial relative to the charged conduct.

5) Venue in SDNY for Continuing Offenses and Conspiracy

Venue may lie wherever a continuing offense is begun, continued, or completed, and wherever a conspirator commits an overt act. Two facts anchored venue in SDNY:

Recio, while physically located in SDNY, called Costanzo and obtained confidential information about an imminent federal arrest.
Costanzo attended a Yankees game in SDNY using tickets purchased for him by a co‑conspirator (Macey), an act consistent with receipt of a thing of value in the bribery/honest‑services scheme.

Both events were foreseeable and furthered the charged conduct.

6) Forfeiture Under § 981: Acquisition, Tracing, and Single Recovery

The court affirmed several key forfeiture propositions and then corrected the remedy to prevent double recovery:

Tracing and proceeds: The district court could find by a preponderance that certain payments were “proceeds” “obtained directly or indirectly” as a result of the offenses and traceable thereto, including:
- GLC to EBCO: $2,500 (Nov. 2018).
- GLC to JEM: $10,000 (Apr. 2019) and $10,750 (Jun. 2019).
- As to Costanzo alone: $5,000 paid by Macey to Costanzo’s contractor (Mar. 2019); $50,000 paid by Pagan to Costanzo’s father (Jan. 2019); and $20,000 paid by Pagan to Costanzo’s girlfriend (Jan. 2020). The district court permissibly relied on circumstantial indicators (Pagan’s salary, co‑ownership of JEM; Costanzo’s false statement to a lender) to find these transfers were illicit proceeds traceable to the scheme.
“Acquired” or “obtained” standard: Relying on Contorinis, the court held that a defendant “acquires” proceeds when he has control over them at any point—here, Recio had possession of the JEM amounts ($10,000 and $10,750) before paying them onward, so Honeycutt’s bar on forfeiture of proceeds never obtained did not apply.
Single‑recovery rule and joint‑and‑several liability: Citing Honeycutt and Tanner, the panel emphasized that the Government may recover the full value of tainted proceeds only once. When overlapping amounts are traceable to multiple defendants—because each “acquired” the proceeds at different times—orders must be structured (e.g., via joint and several liability) to avoid double counting. The district court erred by ordering each defendant to forfeit the same overlapping amounts (at least the two JEM transfers totaling $20,750) without making liability joint and several. The court therefore vacated both forfeiture orders and remanded to implement a single‑recovery structure.

Note: The opinion specifically identifies the two JEM payments ($20,750) as overlapping amounts requiring joint‑and‑several treatment. Because the panel vacated the forfeiture orders in their entirety for further proceedings consistent with its reasoning, the district court on remand will be positioned to ensure that any other overlapping proceeds (the parties may address the $2,500 EBCO payment) likewise comply with the single‑recovery principle.

Impact

Government trial practice: The opinion is a pointed reminder to prosecutors: even though the collective‑entity doctrine compels corporate custodians to produce records, Braswell restricts the government’s ability to attribute that act of production to the custodian at trial. Best practices include:
- Redacting custodian identifiers from business‑records certifications when the custodian is a defendant.
- Avoiding summation themes that recast a subpoena return as the custodian’s “admission.”
- Using neutral custodians (e.g., third‑party recordkeepers) where feasible.
Defense strategy: Defense counsel should preserve objections to the trial use of subpoena returns that risk exposing the identity of a defendant‑custodian. Although the panel found no prejudice on this record, preservation can move review from plain error to harmless‑error or de novo standards and increase the odds of relief.
Forfeiture architecture in multi‑defendant cases: District courts must avoid double recovery under § 981 when multiple defendants have, at different points, “acquired” the same proceeds. Joint‑and‑several liability remains the practical tool in the Second Circuit (post‑Honeycutt) to ensure single recovery when each defendant actually possessed the proceeds at some point.
Proof of quid pro quo: The case illustrates that the absence of direct admissions can be overcome with a mosaic of timing evidence, unsupported invoices, coded messages (“Just made 2500”), and concealment through layered entities and intermediaries. It also confirms that “receipt” can be satisfied by control over funds via a co‑owned entity.
Venue in the digital era: A single phone call placed from the district to obtain confidential information, combined with in‑district acceptance of benefits (e.g., tickets), suffices for continuing offenses and conspiracies. This reinforces the breadth of venue in complex, multi‑district schemes.
Scope of intrinsic evidence: The decision underscores the continuing viability of admitting uncharged but closely connected conduct as intrinsic to the narrative of the conspiracy, narrowing the cases in which Rule 404(b) is the sole path to admissibility.

Although nonprecedential, the order synthesizes and applies core Second Circuit and Supreme Court authorities in ways likely to be persuasive in future cases with similar fact patterns.

Complex Concepts Simplified

Collective‑Entity Doctrine (Braswell): A company can’t take the Fifth. If you’re the company’s record custodian, you must produce corporate records even if they might incriminate you personally. But at trial the government can’t tell the jury “you” produced them to suggest you confessed—only that the company produced them.
Act‑of‑Production Privilege: Producing documents can implicitly “say” things (these records exist; I control them) that are testimonial. Braswell’s “mitigating” rule prevents the government from using that implicit testimony against the custodian at trial.
Bruton Problem: Generally, a defendant has the right to confront witnesses. If one defendant’s out‑of‑court testimonial statement incriminates a co‑defendant and the declarant doesn’t testify, that raises Bruton concerns. Here, even assuming such concerns, they didn’t change the outcome.
Quid Pro Quo by Circumstantial Proof: You rarely get a signed contract for a bribe. Jurors can infer a corrupt exchange when money moves hand‑in‑glove with official favors, invoices don’t match real work, and people talk about making money from inside information.
“Proceeds” and “Acquired” in Forfeiture: Forfeiture reaches property obtained as a result of the crime, even indirectly. If you controlled the money at any point—before passing it along—you “acquired” it and can be ordered to forfeit it.
Single‑Recovery Rule: The Government gets the illicit money back only once. If multiple defendants each controlled the same dollars at different times, the court should make them jointly and severally liable for that amount (so payment by one reduces the other’s obligation).
Intrinsic Evidence vs. Rule 404(b): Some uncharged acts are so intertwined with the charged crime that they are part of the story (intrinsic) and admissible without 404(b). If not intrinsic, 404(b) can still allow them to show intent, plan, or knowledge—provided their probative value isn’t substantially outweighed by unfair prejudice.
Continuing Offense Venue: For crimes that unfold over time (bribery, honest‑services fraud, conspiracy), any district where part of the scheme happened—like making the incriminating call or enjoying the benefits—can be the right venue.

Conclusion

United States v. Costanzo delivers two principal takeaways. First, it sharply polices the line Braswell draws between compelled corporate production and trial use of the custodian’s act of production: prosecutors must not spotlight a defendant‑custodian’s role in responding to a subpoena to suggest guilt. While the error here was harmless given overwhelming proof, the opinion’s analysis will inform trial practice in future corporate‑records cases.

Second, the decision reinforces a disciplined approach to forfeiture under § 981. When multiple conspirators each acquire the same tainted funds at different times, district courts must structure forfeiture to ensure the Government recovers only once—typically by imposing joint‑and‑several liability for overlapping amounts. The vacatur and remand signal that double counting will not be tolerated, even when the underlying tracing findings are otherwise sound.

Beyond these focal points, the panel’s treatment of circumstantial quid pro quo evidence, intrinsic‑evidence admissibility, and venue for continuing offenses adheres to settled Second Circuit doctrine. Even as a nonprecedential disposition, the order offers concrete, practice‑oriented guidance for investigating agencies, prosecutors, defense counsel, and trial courts confronting corporate subpoenas, multi‑defendant forfeiture, and the proof architecture of public‑corruption cases.