Using Real Identities to Overcome Due Diligence Is “At the Crux” Under § 1028A: The Second Circuit’s Application of Dubin in United States v. Colello

Court: U.S. Court of Appeals for the Second Circuit (Summary Order — nonprecedential)

Date: November 14, 2025

Panel: Judges Kearse, Wesley, and Kahn

Docket No.: 24-2080-cr

Introduction

United States v. Colello arises from a multimillion-dollar scheme to defraud an oil and gas company, Petron Energy, Inc. (“Petron”), and its CEO, Floyd Smith, through the use of fraudulent surety bonds and standby letters of credit. Michael Colello, using the aliases “Mike Greene” and “Stan Greene,” and acting with co-conspirators, supplied fabricated financial instruments to induce Petron to pay approximately $1.9 million, purportedly to reimburse financial institutions that had issued or collateralized those instruments. In fact, no such bonds or letters of credit existed; the conspirators split the proceeds among themselves.

A jury convicted Colello of conspiracy to commit wire fraud and aggravated identity theft under 18 U.S.C. § 1028A. Post-trial, Colello moved for a new trial under Rule 33 on the ground that the government violated Brady v. Maryland by failing to disclose (i) an unrelated guilty plea by co-conspirator Tommy Watts in another district and (ii) an unrelated civil complaint alleging fraud against Petron and Smith. The district court (Rakoff, J.) denied the motion.

On appeal, Colello advanced three principal arguments: (1) insufficient evidence supports the aggravated identity theft conviction, particularly after the Supreme Court’s narrowing construction of § 1028A in Dubin v. United States; (2) the government committed a Brady violation; and (3) trial counsel rendered constitutionally ineffective assistance.

In a summary order, the Second Circuit affirmed. Although nonprecedential, the decision is instructive in its careful application of Dubin to financial-instrument fraud, its reaffirmation of the “publicly available” corollary to Brady’s suppression prong, and its reiteration that ineffective assistance claims are usually better developed in a collateral proceeding.

Summary of the Opinion

Aggravated Identity Theft (18 U.S.C. § 1028A): The court held there was ample evidence that Colello knowingly used the identities of real people without authorization (including the names and purported signatures of Mike Haffar and Madelaine Licayan) to create and validate fraudulent surety bonds and letters of credit. Applying Dubin as elaborated in the Second Circuit’s own decision in United States v. Omotayo, the panel concluded that the identity misuse was “at the locus of the criminal undertaking” and a “but-for cause” of the fraud’s success.
Brady: No violation. The materials Colello cited — an unrelated guilty plea by co-conspirator Tommy Watts and an unrelated civil complaint naming Smith and Petron — were neither favorable nor material to the instant case, and they were publicly available, so they were not “suppressed.”
Ineffective Assistance: The record was insufficiently developed to decide the claim on direct appeal. Colello may raise it in a collateral proceeding under 28 U.S.C. § 2255.
Disposition: Judgment affirmed.

Key Facts Grounding the Court’s Decision

Petron paid approximately $1.9 million for two surety bonds and two standby letters of credit that were fabricated.
When concerns were raised about the legitimacy of the first surety bond’s signatory, Colello substituted a new bond signed by “Mike Haffar,” and he provided a link showing Haffar was a licensed insurance broker. He also introduced Smith to a purported “Mike Haffar” on a conference call.
Haffar testified that he had never heard of Petron or Colello and that the signature on the bond was not his.
Regarding a fraudulent letter of credit, Colello told a potential lender to use “Madelaine Licayan” at JPMorgan Chase as the point of contact to verify the instrument, and he supplied a false address for her — an address that turned out to be a parking garage. Licayan testified she was not authorized to endorse letters of credit for JPMorgan and had not signed the document.

Analysis

Precedents and Authorities Cited

18 U.S.C. § 1028A(a)(1) and (d)(7)(A): Aggravated identity theft requires that a defendant “knowingly transfers, possesses, or uses, without lawful authority, a means of identification of another person,” and “means of identification” includes an individual’s name.
Dubin v. United States, 599 U.S. 110 (2023): Section 1028A is violated only when the misuse of another’s identity is “at the crux of what makes the underlying offense criminal,” not when identity use is merely ancillary.
United States v. Omotayo, 132 F.4th 181 (2d Cir. 2025): Applying Dubin, the Second Circuit described qualifying identity use as being “at the locus of the criminal undertaking” and a “but-for cause” of the scheme’s success.
United States v. Johnson, 520 U.S. 461 (1997); United States v. Olano, 507 U.S. 725 (1993); Henderson v. United States, 568 U.S. 266 (2013): The panel framed the sufficiency argument within plain-error review principles, including Henderson’s clarification that an error can be “plain” based on the law at the time of appellate consideration.
Brady v. Maryland, 373 U.S. 83 (1963); Strickler v. Greene, 527 U.S. 263 (1999): Favorable and material evidence suppression standards.
United States v. Zackson, 6 F.3d 911 (2d Cir. 1993); United States v. Payne, 63 F.3d 1200 (2d Cir. 1995): Publicly available material is not considered “suppressed” under Brady when the defense could have obtained it with reasonable diligence.
United States v. Coppa, 267 F.3d 132 (2d Cir. 2001): Materiality/prejudice: a reasonable probability that the suppression affected the outcome.
United States v. Yauri, 559 F.3d 130 (2d Cir. 2009); United States v. Doe, 365 F.3d 150 (2d Cir. 2004): The Second Circuit’s “baseline aversion” to deciding ineffective assistance claims on direct appeal and the preference for § 2255 proceedings to develop the record.

Legal Reasoning

1) Sufficiency of the Evidence and the “Crux” Requirement Under Dubin

The panel began by reciting the plain-error framework, signaling that Colello’s sufficiency argument was not preserved at trial (e.g., by a timely Rule 29 motion). While Henderson makes clear that a legal development after trial (here, Dubin) can render an error “plain” at the time of appeal, the court found no error at all — let alone plain error.

On the merits, the court emphasized substantial trial evidence that Colello knowingly used the identities of real individuals — including the names and purported signatures of Mike Haffar and Madelaine Licayan — without authorization, to fabricate and validate surety bonds and letters of credit. Critically, the panel located this identity misuse at the heart of the fraud: Colello deployed Haffar’s identity precisely to quell investor concerns that had emerged during diligence when an initial signatory appeared not to be a registered insurance broker. Similarly, Colello funneled verification efforts for a letter of credit through Licayan’s name (a JPMorgan employee not authorized to sign LCs) and even supplied a fake address to bolster the ruse.

Under Dubin (and as expressed in Omotayo), this is identity use at the “locus of the criminal undertaking,” and, as the court put it, a “but-for cause” of the scheme’s success. The identity misuse was not an incidental label or background detail; it was the lever by which the conspirators overcame due-diligence checks and induced Petron to part with money. That satisfies § 1028A’s narrowed “crux” requirement.

2) Brady Claim: Favorability, Suppression, and Materiality

Colello argued the government violated Brady by withholding two items: (i) an unrelated guilty plea by co-conspirator Tommy Watts in another surety-bond fraud case in the Central District of California, and (ii) an unrelated civil complaint alleging fraud against Smith, Petron, and others.

The court rejected the claim on multiple, independent grounds:

Not favorable or material: Watts was not a witness at trial; his unrelated plea did not undercut the government’s proof here or exculpate Colello. The district court had found Watts a “minor player” in the Petron conspiracy who did not speak to Smith without Colello or co-conspirator Sayegh present. Likewise, the unrelated civil complaint’s allegations were “too untethered” to the charged conduct to be exculpatory or material under Strickler.
Not suppressed: Both items were part of public records and, in Watts’s case, publicized by the U.S. Attorney’s Office before trial. Under Zackson and Payne, publicly available materials that could have been obtained with diligence are not “suppressed.”
No prejudice: Given the “overwhelming evidence” of guilt, there was no reasonable probability that disclosure would have altered the outcome, defeating materiality under Coppa.

3) Ineffective Assistance: Reserved for § 2255

Echoing its “baseline aversion” to deciding ineffectiveness claims on direct review, the panel found the record insufficiently developed to evaluate Colello’s claims (e.g., when or whether trial counsel knew of Watts’s plea or the civil suit and whether any decision not to use those materials was strategic). The court noted a letter indicating that trial counsel had alerted Colello to the alleged Brady issue regarding Watts — a point that further highlighted factual disputes not well suited for resolution on direct appeal. The appropriate path is a collateral proceeding under 28 U.S.C. § 2255.

Impact and Practical Implications

A. Aggravated Identity Theft After Dubin: Financial-Instrument Fraud

Although nonprecedential, Colello provides concrete, fact-driven guidance on how Dubin applies to financial-instrument fraud:

Where a defendant appropriates a real person’s identity (such as a licensed broker’s or a bank employee’s) to validate forged instruments and to overcome investors’ or lenders’ due-diligence checks, the identity misuse can be “at the crux” of the fraud under § 1028A.
Prosecutors should frame the identity misuse as integral — the feature that induces trust, validates forged documents, and causes the victim to part with money — rather than as merely incidental to communications or recordkeeping.
Defense counsel, in turn, should probe whether the government’s proof actually shows that identity use was outcome-determinative. If the fraud would have succeeded even without the identity appropriation, Dubin suggests § 1028A should not attach.

B. Brady: Public Availability and Materiality

Publicly available evidence: The panel’s reliance on Zackson and Payne reaffirms that publicly accessible materials are ordinarily not “suppressed.” Defense teams must conduct diligent searches for criminal dockets involving co-conspirators and civil filings involving key witnesses.
Relevance and materiality: Unrelated criminal matters and civil complaints — even if they contain allegations of wrongdoing — will generally fail Brady’s materiality threshold unless they meaningfully undermine the government’s proof or a key witness’s credibility in the case at hand.

C. Ineffective Assistance: Build the Record

Ineffectiveness claims frequently turn on counsel’s knowledge and strategy. Absent an evidentiary record, appellate courts will defer the issue to § 2255 proceedings where facts can be developed through affidavits and hearings.
Practitioners should preserve and document strategic choices contemporaneously; doing so may either support or refute ineffectiveness claims later.

Complex Concepts Simplified

Aggravated identity theft (18 U.S.C. § 1028A): Adds a mandatory two-year prison term when, during and in relation to certain felonies (including wire fraud conspiracy), a defendant knowingly uses another person’s identifying information (e.g., name) without permission. After Dubin, the identity misuse must be central to the crime — not just a side detail.
Means of identification: Statutorily includes a person’s name. Using someone’s name as a signatory on a bond or letter of credit, or invoking their authority to validate an instrument, can qualify.
“Crux” of the offense (Dubin): The test asks whether the identity misuse is what makes the crime criminal — the engine of the fraud — as opposed to an incidental attribute of the conduct.
Plain-error review: When a claim wasn’t preserved in the trial court, an appellant must show (1) error, (2) that is clear or “plain,” (3) affecting substantial rights, and (4) seriously affecting the fairness, integrity, or public reputation of judicial proceedings.
Brady violation: Occurs when the government suppresses evidence favorable to the defense (including impeachment material) that is material to guilt or punishment. If the information is publicly available and reasonably discoverable, it is typically not deemed “suppressed.”
Rule 33 motion: A request for a new trial based on newly discovered evidence or serious trial errors; relief is granted sparingly.
Section 2255: A post-conviction procedure to challenge a federal conviction or sentence. It allows factual development essential for claims like ineffective assistance of counsel.
Surety bonds and standby letters of credit: Credit-enhancing instruments. A surety bond is a promise by a surety to pay if the principal defaults; a standby letter of credit is a bank’s promise to pay upon a beneficiary’s compliant draw. Falsifying such instruments can induce victims to pay fees or to rely on nonexistent credit support.

Conclusion

The Second Circuit’s summary order in United States v. Colello affirms convictions arising from a classic confidence scheme: forged surety bonds and letters of credit, validated through the unauthorized use of real identities to defeat routine due diligence. Applying Dubin (as informed by Omotayo), the court underscores that when a fraudster harnesses authentic identities to confer legitimacy on counterfeit instruments and to reassure skeptical investors or lenders, the identity misuse lies at the “crux” of the offense for § 1028A purposes.

The court also reiterates two recurring principles: Brady does not obligate the government to produce publicly available information or materials that are not favorable or material to the defense; and ineffective assistance claims often require factual development not available on direct appeal, making § 2255 the proper vehicle.

While nonprecedential, Colello offers clear guidance to prosecutors and defense counsel navigating aggravated identity theft charges in the wake of Dubin. The decision highlights how identity misuse can be outcome-determinative in financial-instrument frauds, and it serves as a reminder that public-record diligence is part and parcel of effective defense practice — both for Brady purposes and for developing strategic choices that may later be scrutinized under the Sixth Amendment.