United States v. Hild: No Actual-Loss Requirement, No Brady Duty to Highlight, and No Automatic Recusal for Spouse’s Law Firm Ties

Court: United States Court of Appeals for the Second Circuit

Date: October 15, 2025

Panel: Judges Calabresi, Park, and Nathan

Disposition: District court judgment AFFIRMED (Amended Summary Order)

Note on Precedent: This is a summary order and, under Second Circuit Local Rule 32.1.1, does not have precedential effect. It may be cited in accordance with Federal Rule of Appellate Procedure 32.1, with the “SUMMARY ORDER” notation.

Introduction

This appeal arises from the prosecution of Michael Hild, Chief Executive Officer of Live Well Financial, Inc., convicted of securities, wire, and bank fraud, and conspiracy, for orchestrating a multi-year scheme that inflated the value of bonds used as collateral to secure cash loans from lenders. On appeal, Hild challenged his conviction on multiple grounds. The Second Circuit addressed two sets of issues in separate writings released the same day: (1) sufficiency-of-the-evidence and jury-instruction challenges in a separate opinion; and (2) the remaining claims—newly discovered evidence, Brady violations, recusal, and ineffective assistance—in this amended summary order.

The Court rejected each of Hild’s remaining arguments and affirmed. Although non-precedential, the decision is instructive on four recurring areas of criminal practice: (i) Rule 33 “newly discovered evidence” motions and the diligence requirement; (ii) Brady obligations when disclosure occurs within a modest, timely production; (iii) recusal under 28 U.S.C. § 455 where a judge’s spouse is a partner at a firm representing non-parties with interests related to the case; and (iv) the proper forum for adjudicating newly raised ineffective assistance of counsel claims.

Summary of the Order

• Rule 33—Newly Discovered Evidence: The Court rejected two “new evidence” theories. First, post-trial affidavits showing that lenders received coupon payments on the collateral bonds were immaterial to guilt because the government need not prove actual pecuniary loss to sustain fraud convictions. Second, evidence that co-conspirator Dan Foster had influenced Bloomberg market pricing did not qualify as “newly discovered” because defense counsel could have unearthed it with due diligence in light of pretrial government notes indicating Foster’s advising role with Bloomberg on HECM securities.
• Brady Claim: No Brady violation occurred. The government disclosed the Foster interview notes in a small, timely § 3500 production several weeks before trial. The prosecution was not obligated to “highlight” the potential significance of a document that was plainly accessible and identifiable.
• Recusal: The district judge did not abuse her discretion by declining recusal despite her spouse’s partnership at a law firm representing two victim lenders and the parent of a data vendor involved in the case. Absent the spouse’s personal involvement and without a financial interest substantially affected by the case outcome, § 455 did not mandate disqualification.
• Ineffective Assistance: The panel declined to reach a newly framed ineffective-assistance claim regarding counsel’s failure to connect Foster’s notes to Bloomberg pricing, leaving it for potential collateral review under 28 U.S.C. § 2255 pursuant to Massaro. The panel otherwise affirmed the district court’s rejection of Hild’s other ineffective-assistance arguments.
• Cumulative Error: Rejected, as the Court found no individual errors warranting reversal.

Detailed Analysis

I. Standards of Review and Governing Doctrines

• Rule 33 New Trial: Denials reviewed for abuse of discretion. To win a new trial on newly discovered evidence, a defendant must show: (1) evidence discovered after trial; (2) due diligence; (3) materiality; (4) not merely cumulative or impeaching; and (5) likelihood of acquittal. See United States v. James.
• Abuse of Discretion: Applies when the district court commits a legal error, clearly erroneous factfinding, or makes a decision outside the range of permissible choices. See In re Bank of America ERISA Litig.
• Brady: The defendant must show favorable evidence, suppression by the government, and prejudice (materiality). There is no general duty to direct the defense to specific exculpatory items within disclosed materials. See Kirk Tang Yuk; Jimenez v. Stanford.
• Recusal: Under 28 U.S.C. § 455(a), disqualification is required where impartiality might reasonably be questioned; § 455(b)(4) addresses financial interests of a judge or spouse. Denials reviewed for abuse of discretion. See LoCascio; Bayless.
• Ineffective Assistance: New claims are typically litigated on collateral review where an evidentiary record can be developed. See Massaro.

II. Newly Discovered Evidence under Rule 33

A. Coupon Payments to Victim Lenders

Two years post-trial, lenders submitted affidavits supporting restitution that showed they had received millions in coupon payments from the collateral bonds. Hild argued this undermined the prosecution’s case by suggesting lenders were not harmed.

The Court held this evidence was not material to guilt and would not likely produce an acquittal. The government did not need to prove actual pecuniary loss to convict for securities, wire, or bank fraud. The panel cited the Supreme Court’s recent decision in Kousisis v. United States (2025) and the Second Circuit’s decision in United States v. Litvak (2015) to underscore that the absence or presence of actual monetary loss does not negate the existence of a fraudulent scheme or the making of material misstatements. Put differently, the crime is the deceit to obtain money or property; net profit or coupon receipts by victims do not erase the fraud.

Accordingly, because the coupon evidence had no bearing on elements the government was required to prove and would not likely alter the verdict, the Rule 33 claim failed on materiality and likelihood-of-acquittal prongs.

B. Evidence that a Cooperator Influenced Bloomberg Pricing

Hild next claimed that “newly discovered” information showed co-conspirator Dan Foster influenced Bloomberg pricing during the relevant period—purportedly undermining the government’s pricing-related proof. The district court found, and the panel agreed, that Hild failed the diligence requirement.

Key facts:

• The government disclosed notes of a Foster interview nearly a month before trial (March 19, 2021), apparently typed the day prior.
• The notes stated that Foster “still does consulting for Baird. Advising Bloomberg for HECM questions,” and that Bloomberg asked multiple contributors for quotes on HMBS, IOs, floaters, and inverse IOs. The notes added Foster’s quotes were not used “directly,” and he did not know Bloomberg’s internal process.
• The notes came in a short production of nine documents, each under three pages, not an overwhelming “document dump.”

Given this disclosure, reasonable diligence required defense counsel to investigate Foster’s Bloomberg involvement pretrial (e.g., by subpoena or targeted follow-up). Arguments that Foster could have refused to testify did not excuse doing nothing. On these facts, the district court acted well within its discretion in finding a lack of due diligence under United States v. Alessi and in denying Rule 33 relief.

C. Extension of the Rule 33 Deadline

The panel also upheld the district court’s denial of an extension of the three-year Rule 33 filing deadline. Under Rule 45(b)(1), extensions require “good cause.” Because Hild failed to show diligence in pursuing the Foster-related avenue before and during trial, the district court did not abuse its discretion in finding no good cause for extra time.

III. The Brady Claim

Hild argued that if the Foster notes were sufficient to put counsel on notice of Bloomberg pricing issues, then the government violated Brady by failing to highlight or segregate those notes. The panel rejected the claim:

• No suppression: The notes were disclosed weeks before trial in a small set of documents; the government had no duty to single out potentially exculpatory items within a reasonable production. See Kirk Tang Yuk.
• Distinguishing Gil: In United States v. Gil, the government produced a critical memo not even one full business day before trial, buried within five reams and a 41-page index of 600 exhibits. That is not this case. Here, counsel had time and an easily reviewable production to identify the notes’ significance.

Because the notes were timely and reasonably accessible, there was no Brady suppression, and thus no Brady violation.

IV. Recusal Under 28 U.S.C. § 455

Hild sought recusal because the district judge’s spouse is a partner at Davis Polk & Wardwell LLP, which represented two victim lenders and the parent company of Interactive Data Corporation (a data vendor in the case). The panel upheld the denial of recusal.

Principles applied:

• Objective test: Would a reasonable, informed observer question the judge’s impartiality? See Bayless.
• Spouse’s law firm: Absent the spouse’s personal involvement or a financial interest substantially affected by the case, § 455 does not require automatic recusal. See Pashaian v. Eccelston Properties and the Committee on Codes of Conduct Advisory Opinion No. 107 (recognizing the realities of large law firms).

The panel emphasized that a perceived inconsistency with the judge’s decision to recuse in a different case is not the legal test. Applying § 455(a) and (b)(4), the denial of recusal was within the district court’s discretion.

V. Ineffective Assistance of Counsel

Hild’s newly presented argument—that counsel was constitutionally ineffective for failing to connect the Foster notes to Bloomberg pricing—was not briefed below and was therefore not addressed on direct appeal. Under Massaro v. United States, such claims are best raised in collateral review where a factual record can be developed. The panel otherwise affirmed the district court’s denial of Hild’s remaining ineffective-assistance claims.

VI. Cumulative Error

Because the Court largely rejected the claimed errors, it also rejected the argument that their cumulative effect deprived Hild of a fair trial. See United States v. Certified Environmental Services, Inc.

Precedents and Authorities Cited

• United States v. James (2d Cir. 2013): Sets the five-part test for Rule 33 newly discovered evidence and the abuse-of-discretion review standard.
• In re Bank of America ERISA Litig. (2d Cir. 2014): Defines abuse of discretion as legal error, clear error, or decisions outside permissible range.
• Kousisis v. United States (U.S. 2025): Clarifies that the government need not prove actual pecuniary loss to secure fraud convictions; focus is on the fraudulent scheme/material misstatements.
• United States v. Litvak (2d Cir. 2015): Reinforces that criminal fraud liability does not hinge on the presence of actual loss to victims.
• United States v. Alessi (2d Cir. 1980): Due diligence requirement for “newly discovered evidence.”
• United States v. Kirk Tang Yuk (2d Cir. 2018): No Brady duty to direct the defense to particular items within disclosed materials; “buried-in-a-voluminous-file” caveat not implicated here.
• United States v. Gil (2d Cir. 2002): Brady violation where critical exculpatory memo was effectively unusable due to last-minute, voluminous production.
• LoCascio v. United States (2d Cir. 2007): Abuse-of-discretion standard for recusal denials.
• 28 U.S.C. § 455(a), (b)(4): Judicial disqualification for reasonable questions about impartiality and specified financial interests (including spouse).
• Pashaian v. Eccelston Properties, Ltd. (2d Cir. 1996): No automatic recusal based solely on spouse’s law firm affiliation in large-firm contexts when not personally involved.
• Committee on Codes of Conduct Advisory Opinion No. 107 (2009): Spouse’s business relationships and recusal guidance for modern law-firm settings.
• United States v. Bayless (2d Cir. 2000): Objective, informed observer standard for § 455(a).
• Massaro v. United States (U.S. 2003): Ineffective-assistance claims generally should be brought via § 2255, not direct appeal.
• United States v. Certified Environmental Services, Inc. (2d Cir. 2014): Cumulative error doctrine.
• Fed. R. Crim. P. 33(b)(1); 45(b)(1): Three-year deadline for new-trial motions based on newly discovered evidence; extensions require “good cause.”
• 18 U.S.C. § 3500: Jencks Act materials (witness statements) disclosure framework.

Impact and Practical Takeaways

Although non-precedential, this summary order provides clear, practice-oriented guidance in several areas:

• Materiality of post-trial “harm” evidence: Evidence that victims ultimately received interest or coupon payments is generally immaterial to guilt in fraud prosecutions. Defense strategies that hinge on demonstrating “no loss” will not typically undermine the conviction where the scheme and material misstatements are proven.
• Diligence is dispositive in Rule 33 claims: When government disclosures—even brief notes—flag a new line of inquiry (here, a cooperator advising Bloomberg), the defense must act pretrial (investigate, subpoena, or otherwise develop the record). Failure to do so can defeat “newly discovered evidence” claims later.
• Brady does not require “spotlighting”: Where the prosecution provides timely, manageable disclosures, it need not annotate or elevate specific documents. Defense teams should implement careful, rapid triage of all pretrial productions, including small § 3500 sets.
• Recusal is not automatic when a judge’s spouse’s firm appears in the case’s orbit: Absent personal involvement or a spouse’s financial interest substantially affected by the case, § 455 does not compel recusal simply because a large firm represents related entities.
• IAC claims should be preserved and often belong on collateral review: Newly framed ineffective-assistance arguments generally require an evidentiary record and will be deferred to § 2255 proceedings if not raised below.
• Extensions of Rule 33 deadlines require good cause linked to diligence: Courts will look hard at what the defense did when it first received leads suggesting new avenues of proof.

Complex Concepts Simplified

• Rule 33 (New Trial): A post-verdict mechanism allowing a new trial for reasons including newly discovered evidence. Success is rare; defendants must show diligence, materiality, and likely acquittal if the new evidence had been available.
• Materiality in criminal fraud: A statement is material if it has a natural tendency to influence or is capable of influencing the decisionmaker (e.g., lenders). Proof of actual monetary loss is not required to establish guilt.
• Brady obligations: The government must disclose materially favorable evidence to the defense. But when it produces records in a timely and manageable format, it is not required to highlight individual items or explain their significance.
• Due diligence (Rule 33): The defense must show it could not have discovered the evidence earlier with reasonable effort. If a disclosed document hints at the evidence, counsel must investigate.
• Recusal under § 455: Judges must step aside where impartiality might reasonably be questioned or where they (or their spouse) have certain financial interests. A spouse’s partnership at a large law firm, without personal involvement or a directly affected financial interest, generally does not mandate recusal.
• Jencks Act (18 U.S.C. § 3500): Requires the government to produce prior statements of witnesses after they testify; in practice, related witness materials may be produced before trial by agreement or order.
• HECM/HMBS/IO securities: HECM are Home Equity Conversion Mortgages (reverse mortgages); HMBS are bonds backed by such mortgages; IO (interest-only) and inverse IO tranches pay interest streams tied to underlying collateral. Bloomberg’s pricing services may aggregate contributed quotes in forming valuations.

Conclusion

The Second Circuit’s amended summary order in United States v. Hild affirms the convictions and offers practical guidance across several recurring litigation flashpoints. It underscores that actual victim loss is not an element of criminal fraud; that post-trial evidence of coupon income is immaterial to guilt; that defendants must exercise diligence when government disclosures hint at potential leads; that Brady does not impose a duty on prosecutors to spotlight specific items in timely, digestible productions; and that a judge’s spouse’s partnership at a large law firm representing related entities does not, without more, compel recusal.

For practitioners, the order is a reminder that the most promising opportunities to shape the evidentiary record occur before and during trial, not after verdict; that timely review and follow-up on even terse government notes can be outcome-determinative; and that recusal motions must be grounded in the statutory standards, not perceived inconsistencies across cases. While non-precedential, the Court’s analysis is likely to be persuasive in future disputes over Rule 33 diligence, Brady scope, and judicial disqualification in the context of modern law-firm affiliations.