United States v. Novis (Denkberg): Advice-of-Counsel Does Not Obviate Fraudulent Intent in Mail and Wire Fraud Schemes

Introduction

United States v. Novis (Denkberg), 23-6877-cr (2d Cir. June 2, 2025), arose from a lengthy mail-fraud operation run by partners Gary Denkberg and Sean Novis in Long Island, New York. Over more than a decade they dispatched millions of deceptive “prize notice” mailings promising multi-million-dollar winnings in exchange for small processing fees. The U.S. government charged them with mail fraud (18 U.S.C. § 1341), wire fraud (18 U.S.C. § 1343), use of fictitious names (18 U.S.C. § 1342), and aiding and abetting.

On appeal from convictions entered after a jury trial in the Eastern District of New York, the defendants challenged the sufficiency of the evidence (particularly their intent), supplemental jury instructions regarding the advice-of-counsel defense, and several evidentiary rulings. The Second Circuit affirmed in full, clarifying the limits of reliance on legal advice in fraud prosecutions.

Summary of the Judgment

Convictions Upheld: The Second Circuit held that there was ample evidence to prove fraudulent intent, material misrepresentation, and aiding and abetting.
Advice-of-Counsel: Evidence that defendants sought and followed counsel’s advice did not automatically negate fraudulent intent; it was properly submitted to the jury as one factor among many.
Jury Instructions: Supplemental instructions clarifying that a defendant cannot both intend to defraud and in good faith rely on counsel were correct and did not shift the burden of proof.
Evidentiary Rulings: Testimony by victims’ relatives and letters from state attorneys general were admitted not for their truth but to show defendants’ knowledge of complaints; no Confrontation Clause violation was plain error. Sanctioning defense counsel’s violation of a protective order by excluding certain emails was within the court’s discretion.

Analysis

1. Precedents Cited

Jackson v. Virginia, 443 U.S. 307 (1979) – standard for reviewing sufficiency of evidence: verdict must stand if any rational trier of fact could find guilt beyond a reasonable doubt.
United States v. Colasuonno, 697 F.3d 164 (2d Cir. 2012) – advice-of-counsel defense requirements, dating back to Williamson v. United States, 207 U.S. 425 (1908).
United States v. Thomas, 377 F.3d 232 (2d Cir. 2004) – “reasonable person” materiality standard in fraud cases; protecting the ignorant or gullible remains within reach of the mail-fraud statutes.
United States v. Scully, 877 F.3d 464 (2d Cir. 2017) – advice-of-counsel evidence does not create an affirmative defense but may raise a reasonable doubt about intent.

2. Legal Reasoning

Fraud under §§ 1341 and 1343 requires proof of a scheme to defraud (material misrepresentation with intent). The court found:

Intent to Defraud – The mailers’ elaborate design, fake seals and signatures, targeting of elderly victims, repeated mailings, and a USPS cease-and-desist order showed knowing deception.
Materiality – The false promise of large cash prizes, buried disclaimers, and receipt of fees proved the mailings were capable of influencing recipients’ decisions.
Advice-of-Counsel – Although defendants had solicited counsel’s opinions on advertising law, the jury properly weighed whether reliance was in good faith, complete, and reasonable. A finding of fraudulent intent necessarily negates good faith reliance.
Aiding & Abetting – Sharing lists and employees with related fraudsters and editing their mailings satisfied both participation and specific intent.

3. Impact

This decision reinforces that in mail and wire fraud cases:

Reliance on counsel is not a safe harbor; it simply becomes one factor in the jury’s intent analysis.
Courts may sanction counsel for procedural missteps (e.g., protective-order violations) by excluding evidence.
Evidentiary rulings that distinguish knowledge (notice) from hearsay or trial-rights infractions (Confrontation Clause) will be upheld absent plain error.

Future defendants cannot expect automatic acquittal based solely on proof that they sought legal advice; they must demonstrate complete good faith, full disclosure, and reasonable legal opinions.

Complex Concepts Simplified

Scheme to Defraud: A plan to trick someone out of money or property by false statements or pretenses.
Material Misrepresentation: A false statement “capable of influencing” a reasonable person’s decision. Even if recipients are gullible, the law protects them.
Advice-of-Counsel Defense: Not an automatic exoneration. The jury must decide if the defendant honestly sought and faithfully followed competent legal advice, disclosing all facts and believing the advice was correct.
Confrontation Clause: Criminal defendants have the right to cross-examine witnesses against them. Documents can be admitted for notice, not truth, and do not trigger confrontation concerns if not used to prove the assertions within.

Conclusion

United States v. Novis (Denkberg) affirms that mail and wire fraud prosecutions rest on a comprehensive inquiry into intent and materiality. Evidence of legal advice does not, by itself, negate fraudulent intent. The decision underscores the court’s discretion in jury instructions and evidentiary rulings, and it clarifies that professional conduct of counsel—even if not directly before the appellate court—may warrant disciplinary review. This case will guide trial courts and litigants on the proper treatment of advice-of-counsel evidence and reinforce robust protection against deceptive mailing schemes.