Second Circuit Says Convicted Fraudster Can’t Claim Double Jeopardy in RICO Case

(CN) – The Second Circuit upheld the 2016 conviction of fraudster Mikhail Zemlyansky after he unsuccessfully argued that double jeopardy applied to his Racketeer Influenced and Corrupt Organizations Act case involving a multi-million dollar insurance and securities fraud scheme.

Zemlyansky, 41, was first tried in 2013 for healthcare fraud but was acquitted on all counts but one of conspiring to engage in racketeering under RICO, where the jury failed to reach a verdict. He was tried again in 2015 in the U.S. District Court for Southern New York for conspiracy counts related to insurance and securities fraud schemes and was again charged with violating RICO, “predicated in part on crimes of which he was acquitted at his first trial,” the ruling states.

Zemlyansky was convicted on March 19, 2016, and sentenced to 15 years in prison in what the U.S. Justice Department deemed “a sprawling racketeering conspiracy that engaged in the largest single no fault automobile insurance fraud scheme ever charged.” He was also convicted of securities fraud schemes resulting in losses of roughly $17 million, multiple money laundering operations and illegal gambling through a high-stakes poker ring.

On appeal, a three-judge panel rejected Zemlyansky’s arguments that his constitutional rights were violated under the Fifth Amendment’s double jeopardy clause. The panel decided that the District Court was not wrong in permitting the government to reuse evidence from Zemlyansky’s first trial to prove his guilt in the second trial “because the evidence was used to prove different, non‐precluded conduct.” Essentially, the ruling states, a jury finding an individual not guilty of certain crimes does not stop the government from later proving that the individual knowingly facilitated a racketeering scheme involving the same crimes.

He also claimed that prosecutors made improper comments to the jury about Zemlyansky crying in the courtroom during witness testimony. The panel found the comments inappropriate but the District Court took “prompt and appropriate action to ensure that Zemlyansky was not substantially prejudiced by the misconduct.”

Between 2007 through to 2012, Zemlyansky, along with his partner and co-defendant Michael Danilovich, operated two investment fraud schemes through Lyons Ward & Associates and the Rockford Group by creating fake documents and account statements. Cold-callers in boiler rooms scammed investors out of funds that were wired to shell companies in Eastern Europe, then converted into U.S. cash. The duo also defrauded auto insurance companies of hundreds of millions.

As part of his 2016 sentencing, Zemlyansky’s was ordered to pay a fine of $50,000 plus $29.5 million in restitution.

%d bloggers like this: