United States v. George Georgiou

PRECEDENTIAL

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
____________

Nos. 10-4774, 11-4587, 12-2077
____________

UNITED STATES OF AMERICA

v.

GEORGE GEORGIOU,
Appellant
______________

Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Crim. No. 2-09-cr-00088-001)
District Judge: Honorable Robert F. Kelly
______________

Argued March 19, 2014
______________

Before: CHAGARES, GREENAWAY, JR., and
VANASKIE, Circuit Judges.

(Opinion Filed: January 20, 2015)
Louis D. Lappen, Esq. [ARGUED]
Office of United States Attorney
615 Chestnut Street
Suite 1250
Philadelphia, PA 19106

Counsel for Appellee

Scott J. Splittgerber, Esq. [ARGUED]
Bachner & Associates
39 Broadway
Suite 1610
New York, NY 10006

Hope C. Lefeber, Esq.
1500 John F. Kennedy Boulevard
Two Penn Center Plaza, Suite 1205
Philadelphia, PA 19102

Counsel for Appellant

______________

OPINION
______________

GREENAWAY, JR., Circuit Judge.

A federal jury convicted Appellant George Georgiou
(“Appellant” or “Georgiou”) of conspiracy, securities fraud,
and wire fraud for his participation in planned manipulation
of the markets of four publicly traded stocks, resulting in

2
more than $55,000,000 in actual losses. The District Court
sentenced him to 300 months’ imprisonment, ordered him to
pay restitution of $55,823,398 and ordered that he pay a
special assessment of $900. The Court also subjected
Georgiou to forfeiture of $26,000,000.

For the first time on appeal, Georgiou argues that
under Morrison v. National Australia Bank Ltd., 561 U.S. 247
(2010), his securities and wire fraud convictions were
improperly based upon the extraterritorial application of
United States law. Thus, we must determine as a matter of
first impression whether the purchases and sales of securities
issued by U.S. companies through U.S. market makers acting
as intermediaries for foreign entities constitute “domestic
transactions” under Morrison. For the reasons set forth
below, we find that these transactions are “domestic
transactions,” and that his conviction was not based upon the
improper extraterritorial application of United States law.
Georgiou also argues that the District Court erred in denying
his motion for a new trial based on purported Brady and
Jencks Act violations. He also asserts that the District Court
erred on several evidentiary and sentencing issues. We find
no error. Thus, we will affirm the District Court’s Judgment
of Conviction.

I.

A. Factual Background

From 2004 through 2008, Georgiou and his
co-conspirators engaged in a stock fraud scheme resulting in
more than $55 million in actual losses. The scheme centered
on manipulating the markets of four stocks: Neutron
Enterprises, Inc. (“Neutron”), Avicena Group, Inc.

3
(“Avicena”), Hydrogen Hybrid Technologies, Inc.
(“HYHY”), and Northern Ethanol, Inc. (“Northern Ethanol”)
(collectively, “Target Stocks”). At all relevant times, the
Target Stocks were quoted on the OTC Bulletin Board
(“OTCBB”)1 or the Pink OTC Markets Inc. (“Pink Sheets”).2

In order to facilitate their scheme, Georgiou and his
co-conspirators opened brokerage accounts in Canada, the
Bahamas, and Turks and Caicos. Once opened, the
co-conspirators used these accounts to engage in manipulative
trading in the Target Stocks. Specifically, by trading stocks
between the various accounts they controlled, the
co-conspirators artificially inflated the stock prices and

1
The OTCBB is “[a]n interdealer quotation system for
unlisted, over-the-counter securities. The OTC Bulletin Board
or ‘OTCBB’ allows Market Makers to display firm prices for
domestic securities, foreign securities, and [American
Depository Receipts] that can be updated on a real-time
basis.” OTCBB Glossary, Financial Industry Regulatory
Authority (“FINRA”),
http://www.finra.org/Industry/Compliance/MarketTransparen
cy/OTCBB/Glossary/P126264 (last visited Jan. 5, 2015).
2
The Pink Sheets, now known as OTC Market Group Inc., is
“an electronic inter-dealer quotation system that displays
quotes from broker-dealers for many over-the-counter (OTC)
securities.” OTC Link LLC, SEC,
http://www.sec.gov/answers/pink.htm (last visited Jan. 5,
2015).

4
created the false impression that there was an active market in
each Target Stock.

As a result of this manipulation, Georgiou and his
co-conspirators were able to sell their shares at inflated
prices. In addition, these artificially inflated shares would be
used as collateral to fraudulently borrow funds on margin and
obtain millions of dollars in loans from Caledonia Corporate
Management Group Limited (“Caledonia”) and Accuvest
Limited (“Accuvest”), both brokerage firms based in the
Bahamas. Eventually, these accounts experienced severe
trading losses since the assets purportedly serving as
collateral proved to be worthless.3

In June 2006, unbeknownst to Georgiou, Kevin
Waltzer,4 one of his co-conspirators, began cooperating in an
FBI sting operation. Through Waltzer’s cooperation, the FBI
monitored Georgiou’s activities, including many of his
emails, phone calls and wire transfers.

3
Indeed, Caledonia was forced to liquidate its business,
resulting in approximately $25 million in losses. These losses
were sustained by the firm’s clients, many of whom lost their
entire retirement savings.
4
Waltzer pled guilty to one count of wire fraud, one count of
mail fraud, and one count of money laundering, pursuant to a
written plea agreement. He was sentenced to a term of
imprisonment of 132 months, followed by a term of
supervised release, and ordered to pay $40,675,241.55 in
restitution.

5
 1. Georgiou’s Four Manipulation
Schemes: Neutron, Avicena,
HYHY, and Northern Ethanol

Georgiou and his co-conspirators manipulated the
prices of the Target Stocks by creating matched trades,5 wash
sales,6 and misleading email blasts. They used various alias
accounts, nominees, and offshore brokerage accounts to
conceal both their ownership of the Target Stocks and their
involvement in the fraudulent scheme.

At least some of the manipulative trades were
transacted through market makers7 located in the United

5
“A ‘matched trade’ is an order to buy or sell securities that
is entered with knowledge that a matching order on the
opposite side of the transaction has been or will be entered for
the purpose of: (1) creating a false or misleading appearance
of active trading in any publicly traded security; or (2)
creating a false or misleading appearance with respect to the
market for any such security.” (Indictment ¶ 9.)
6
“A ‘wash sale’ is an order to buy or sell securities resulting
in no change of beneficial ownership for the purpose of: (1)
creating a false or misleading appearance of active trading in
any publicly traded security; or (2) creating a false or
misleading appearance with respect to the market for any
such security.” (Indictment ¶ 10.)
7
“A market maker is a firm that facilitates trading in a stock,
provides quotes [for] both a buy and sell price for a stock, and
potentially profits from the price spread.” (Indictment ¶ 33.);
see also 15 U.S.C. § 78c(38) (A “market maker means any
specialist permitted to act as a dealer . . . and any dealer who,

6
States. Georgiou communicated via phone and e-mail with
Waltzer about their plans, and also had occasional in-person
meetings with Waltzer and others in the United States about
these schemes. In these communications, Georgiou provided
direction on how to implement the manipulative schemes, and
demonstrated his role and culpability in orchestrating and
perpetrating the fraud. After fourteen months, Georgiou
wired $5,000 to the account of an undercover FBI agent as
part of a test transaction. Six days later, Georgiou was
arrested.

2. The Caledonia Fraud

In December 2006, Georgiou opened a margin-eligible
account in his wife’s name at Caledonia. As a result,
Georgiou was able to obtain loans and purchase stock without
using his own funds. Georgiou represented to the principals
at Caledonia that the margin in his account would be
collateralized by approximately $15 million worth of Avicena
and Neutron stock, but did not disclose that the value of these
securities had been artificially inflated.

In March 2007, Georgiou borrowed approximately
$3,394,000 from Caledonia to purchase 1,697,000 shares of
Avicena from Waltzer. That loan was secured by Avicena
and Neutron stock held in the name of Georgiou’s wife at
another brokerage firm, and was never repaid.

with respect to a security, holds himself out (by entering
quotations in an inter-dealer communications system or
otherwise) as being willing to buy and sell such security for
his own account on a regular or continuous basis.”)

7
 During the same month, Georgiou borrowed
approximately $2.8 million from Caledonia to purchase
Neutron stock and to provide financing to Neutron. The loan
was ostensibly secured by Avicena and Neutron stock held in
a different name at another brokerage firm. This loan was
also never repaid. Caledonia was unable to cover the
substantial deficits incurred as a result of Georgiou’s
activities. Ultimately, Caledonia suffered approximately $25
million in losses. The firm was later dissolved and liquidated.

3. The Accuvest Fraud

In June 2007, Georgiou met with representatives of
Accuvest in the Bahamas to discuss opening a brokerage
account. In September 2007, Georgiou opened an account at
Accuvest in a different name. The trading in the account was
handled through William Wright Associates (“Wright”), an
Accuvest affiliate based in California. From October 2007
through February 2008, Georgiou deposited HYHY and
Northern Ethanol stock into this account, and in return,
Accuvest provided a margin loan of ten percent of the value
of the account. Georgiou did not disclose that the value of
these securities had been artificially inflated. On several
occasions in 2008, Georgiou directed Wright, via email, to
wire cash from this account to Avicena, or Team One
Marketing, a Canadian company associated with Georgiou.

In August 2008, Georgiou instructed Wright to open a
second Accuvest account, which was funded with 10 million
shares of Northern Ethanol. As had happened before,
Georgiou did not disclose that the value of these securities
had been artificially inflated. Georgiou failed to repay the
money that he had borrowed on margin and in cash loans

8
from Accuvest. The artificially inflated stock did not cover
the loans and Accuvest lost at least $4 million.

B. Procedural History

Following a three-week trial, a jury found Georgiou
guilty of one count of conspiracy, in violation of 18 U.S.C. §
371, four counts of securities fraud, in violation of Section
10(b) of the Securities Exchange Act of 1934 (the “Act”), 15
U.S.C. §§ 78j(b) and 78ff, and four counts of wire fraud, in
violation of 18 U.S.C. §§ 1343 and 1349.

Georgiou was sentenced to 300 months’ imprisonment,
and ordered to pay over $55 million in restitution.

II.

The District Court had jurisdiction under 15 U.S.C. §
78aa and 18 U.S.C. § 3231. We have jurisdiction under 28
U.S.C. § 1291 and 18 U.S.C. § 3742(a).

III.

A. Extraterritorial Effect of United States Securities
Law

1. Standard of Review

For the first time on appeal, Georgiou argues that his
securities fraud convictions are improperly based on an
exterritorial application of United States law. He asserts that
without proof that any securities transactions occurred in the
United States, the jury lacked sufficient evidence upon which
to convict him. He further asserts that the District Court erred
in failing to require that the jury base it verdicts solely on

9
domestic transactions. Georgiou relies on Morrison, which
held that Section 10(b) of the Act only proscribes “deceptive
conduct [made] ‘in connection with the purchase or sale of
any security registered on a national securities exchange or
any security not so registered.’” 561 U.S. at 266 (quoting 15
U.S.C. § 78j(b)).

Because Georgiou raised neither argument below, we
review for plain error. Fed. R. Crim. P. 52(b); Henderson v.
United States, 133 S. Ct. 1121, 1124-25 (2013); United States
v. Riley, 621 F.3d 312, 321-22 (3d Cir. 2010).8 A finding of
“plain error” is warranted if: “(1) there is an ‘error’; (2) the
error is ‘clear or obvious, rather than subject to reasonable
dispute’; (3) the error ‘affected the appellant’s substantial
rights, which in the ordinary case means’ it affected the
outcome of the district court proceedings’; and (4) ‘the error
seriously affect[s] the fairness, integrity or public reputation
of judicial proceedings.’” United States v. Marcus, 560 U.S.

8
Although Morrison was decided after Georgiou’s trial, the
standard of review remains the same. See Griffith v.
Kentucky, 479 U.S. 314, 328 (1987) (“[A] new rule for the
conduct of criminal prosecutions is to be applied retroactively
to all cases, state or federal, pending on direct review or not
yet final, with no exception for cases in which the new rule
constitutes a ‘clear break’ with the past.”); see also United
States v. Vilar, 729 F.3d 62, 70 (2d Cir. 2013) (“Plain error
review applies equally where the defendant did not object
before the trial court because he failed to recognize an error,
and where the defendant did not object because the trial
court’s decision was correct at the time but assertedly became
erroneous due to a supervening legal decision.”); United
States v. Asher, 854 F.2d 1483, 1487 (3d Cir. 1988).

10
258, 262 (2010) (quoting Puckett v. United States, 556 U.S. 129,
135 (2009)); see also United States v. Andrews, 681 F.3d 509,
517 (3d Cir. 2012). Georgiou bears the burden of showing
that the error affected his substantial rights. Andrews, 681
F.3d at 517.

2. Morrison and Extraterritoriality

Georgiou was convicted of securities fraud pursuant to
Section 10(b) of the Act and Section 10(b)’s implementing
regulation, SEC Rule 10b-5 (“Rule 10b-5”). 15 U.S.C. §
78j(b); 17 C.F.R. § 240.10b-5; see also 15 U.S.C. § 78ff
(prescribing penalties for willful violations of the Act).
Section 10(b) makes it unlawful:

[t]o use or employ, in connection with the
purchase or sale of any security registered on a
national securities exchange or any security not
so registered . . . any manipulative or deceptive
device or contrivance in contravention of such
rules and regulations as the Commission may
prescribe as necessary or appropriate in the
public interest or for the protection of investors.

15 U.S.C. § 78j(b).9

9
Rule 10b-5, promulgated pursuant to Section 10(b), makes it
unlawful “for any person . . . (a) [t]o employ any device,
scheme, or artifice to defraud . . . or (c) [t]o engage in any act,
practice, or course of business which operates or would
operate as a fraud or deceit upon any person, in connection
with the purchase or sale of any security.” 17 C.F.R.
§ 240.10b–5. “Rule 10b-5 . . . was promulgated under

11
 The Supreme Court has limited the application of
Section 10(b) to actors who employ “manipulative or
deceptive device[s]” in two contexts: (1) transactions
involving “the purchase or sale of a security listed on an
American stock exchange,” and (2) transactions involving
“the purchase or sale of any other security in the United
States.” Morrison, 561 U.S. at 273. Indeed, Section 10(b)
has no extraterritorial reach. Id. at 262, 266-67 (determining
that Section 10(b) and Rule 10b-5 had no extraterritorial
effect in civil context); see also Vilar, 729 F.3d at 74 (making
the same determination in the criminal context, reasoning that
“[a] statute either applies extraterritorially or it does not”).
Thus, we consider here whether any of the relevant
transactions Georgiou is charged with have the requisite
nexus to the United States under Morrison to subject him to
liability under Section 10(b).

It is undisputed that the Target Stocks were listed or
traded on the OTCBB or Pink Sheets. However, whether the
OTCBB or the Pink Sheets constitute “national securities
exchange[s]” under Morrison, and whether the securities at
issue were purchased or sold in the United States, are both
disputed.10 The Supreme Court has not addressed either issue

§ 10(b), and ‘does not extend beyond conduct encompassed
by § 10(b)’s prohibition.’” Morrison, 561 U.S. at 261-62
(quoting United States v. O’Hagan, 521 U.S. 642, 651
(1997)).
10
The Indictment defines the Pink Sheets as “an inter-dealer
electronic quotation and trading system in the over-the-
counter (‘OTC’) securities market,” (Indictment ¶ 2) and
provides no definition of the OTCBB. The Indictment further
states that “[t]he United States Securities and Exchange

12
in this context, i.e., whether a foreign entity’s purchase of
securities listed on the OTCBB or Pink Sheets through
American market makers ought be considered a “domestic
transaction” for the purposes of Section 10(b).

a. “National Securities Exchange”

Under the first prong of Morrison, Section 10(b)
applies to “the purchase or sale of a security listed on an
American stock exchange.” Morrison, 561 U.S. at 273.
Securities listed on the OTCBB and the Pink Sheets are not
within these parameters. According to the SEC, there are
eighteen registered national security exchanges; the Pink
Sheets and the OTCBB are not among them.11 See SEC

Commission (the ‘SEC’) was an independent agency of the
United States which was charged by law with protecting
investors by regulating and monitoring, among other things,
the purchase and sale of publicly traded securities, including
securities traded on the Pink Sheets and the OTCBB. Federal
securities laws prohibited fraud in connection with the
purchase and sale of securities . . .” (Indictment ¶ 8.)
11
Indeed, the OTCBB is, by definition, a quotation service for
“securities which are not listed or traded on NASDAQ or any
other national securities exchange.” OTCBB Frequently
Asked Questions, FINRA,
http://www.finra.org/Industry/Compliance/MarketTransparency/O
TCBB/FAQ/index.htm (“OTCBB FAQ”) (emphasis added)
(last visited Jan. 5, 2015). Likewise, the Pink Sheets may
include securities that “[have] been delisted from an
exchange.” Frequently Asked Questions,
http://www.otcmarkets.com/learn/otc101-faq (last visited Jan.
5, 2015). Unlike companies listed on a national securities

13
Website,
http://www.sec.gov/divisions/marketreg/mrexchanges.shtml
(hereinafter “SEC Webpage on National Securities
Exchanges”) (last visited Jan. 5, 2015); see also 15 U.S.C.
§ 78f(b) (requiring that exchanges register with the SEC and
comply with various requirements to constitute a “national
securities exchange”).

Further, the stated purpose of the Act refers to
“securities exchanges” and “over-the-counter markets”
separately, which suggests that one is not inclusive of the
other. See Securities Exchange Act of 1934, 48 Stat. 881, as
amended, 15 U.S.C. § 78a et seq., (described as “[a]n Act [t]o
provide for the regulation of securities exchanges and of
over-the-counter markets . . . [and] to prevent inequitable and
unfair practices on such exchanges and markets”) (emphasis
added).

Given that a “national securities exchange” is
explicitly listed in Section 10(b)—to the exclusion of the
OTC markets—and coupled with the absence of the Pink
Sheets and the OTCBB on the list of registered national
security exchanges on the SEC Webpage on Exchanges, we

exchange, those quoted on the OTCBB and the Pink Sheets
are not subject to “listing and maintenance standards, which
are stringently monitored and enforced . . . . [and do not] have
reporting obligations to the market.” OTCBB FAQ.

14
are persuaded that those exchanges are not national securities
exchanges within the scope of Morrison.12

b. Domestic Transactions in Securities
not Listed on Domestic Exchanges

In this case, foreign entities purchased and sold
securities quoted on the OTCBB and the Pink Sheets. Several
of these purchases were executed by market makers operating
within the United States. In contrast, the Court in Morrison
considered a “foreign cubed action . . . in which (1) foreign
plaintiffs [were] suing (2) a foreign issuer in an American
court for violations of American securities laws based on
securities transactions in (3) foreign countries.” Morrison,
561 U.S. at 283 n.11 (Stevens, J., concurring in the judgment)
(internal quotation marks omitted).13 In that case, all aspects

12
But see SEC v. Ficeto, 839 F. Supp. 2d 1101, 1108 (C.D.
Cal. 2011) (“hold[ing] that Morrison does not bar the
territorial application of § 10(b) to manipulative trading on
the domestic over-the-counter market”); see also United
States v. Isaacson, 752 F.3d 1291, 1299 (11th Cir. 2013)
(securities traded on the OTCBB or Pink Sheets “meet[]
Morrison’s requirement for a U.S. nexus”).
13
In Morrison, Australian investors purchased shares of an
Australian bank whose stock shares were listed on the
Australian Stock Exchange Limited. 561 U.S. at 251-52. In
1998, the Australian bank purchased an American mortgage
servicing company and for three years touted the success of
the American company’s business in its annual reports and
public documents and statements. Id. at 251-52. But in 2001,
the Australian bank wrote down the value of the American
company’s assets by more than $2 billion, which resulted in a

15
of the trades at issue occurred abroad, and thus, it was
determined that Section 10(b) did not apply. There are two
key distinctions between Morrison and the instant case: (1)
the transactions in this case involve stocks of U.S. companies,
(2) that were executed through American market makers.

To determine whether the transactions at issue were
“domestic transactions,” under Morrison, id. at 267, we
consider “not . . . the place where the deception originated,
but [the place where] purchases and sales of securities”
occurred. Id. at 266. It is the “location of the transaction that
establishes (or reflects the presumption of) the [Security
Exchange] Act’s inapplicability.” Id. at 268.

Several of our sister circuits interpret this to mean that
“a securities transaction is domestic when the parties incur
irrevocable liability to carry out the transaction within the
United States or when title is passed within the United
States.” Absolute Activist Value Master Fund Ltd v. Ficeto,
677 F.3d 60, 69 (2d Cir. 2012); see also Quail Cruise Ship
Mgmt Ltd. v. Agencia de Viagens, 645 F.3d 1307, 1310-11
(11th Cir. 2011) (allegation that closing in Florida
precipitated transfer of title sufficient to satisfy Morrison at
motion to dismiss); SEC v. Levine, 462 Fed. App’x 717, 719
(9th Cir. 2011) (“[T]he Securities Act governs the [] sales
because the actual sales closed in Nevada when [a defendant]
received completed stock purchase agreements and
payments.”); United States v. Isaacson, 752 F.3d 1291, 1300

drop in the value of the Australian bank’s stock. Id. at 252.
The Australian investors sued the bank in the Southern
District of New York alleging violations of the Securities
Exchange Act, 15 U.S.C. §§ 78j(b) and 78t(a). Id. at 253-54.

16
(11th Cir. 2013) (fund at issue “was ‘run out of New York
City’ and [] [defendant’s] office was located in Florida, which
support[] the inference that the [] [f]und purchased the
securities in the United States.”)

We agree that “‘[c]ommitment’ is a simple and direct
way of designating the point at which . . . the parties obligated
themselves to perform what they had agreed to perform even
if the formal performance of their agreement is to be after a
lapse of time.’” Absolute Activist, 677 F.3d at 68 (quoting
Radiation Dynamics, Inc. v. Goldmuntz, 464 F.2d 876, 891
(2d Cir. 1972)) (internal quotation marks omitted). Thus,
“the point of irrevocable liability can be used to determine the
locus of a securities purchase or sale.” Id. Accordingly,
territoriality under Morrison turns on “where, physically, the
purchaser or seller committed him or herself” to pay for or
deliver a security. Vilar, 729 F.3d at 77 n.11.

Facts that demonstrate “irrevocable liability” include
the “formation of the contracts, the placement of purchase
orders, the passing of title, or the exchange of money.”
Absolute Activist, 677 F.3d at 69, 70; see also Vilar, 729 F.3d
at 78.14 In Vilar, the Second Circuit concluded that Section
10(b) applied where: (1) some victims entered into
investment agreements in the United States; (2) another

14
On the other hand, heavy marketing in the United States, a
party’s residency or citizenship, and the fact that the
deception may have originated in the United States were
insufficient to support a Section 10(b) claim. Absolute
Activist, 677 F.3d at 70.

17
victim “executed the documents necessary to invest . . . in her
own New York apartment and handed those documents to a
New York messenger”; and (3) one victim sent the money
required for opening her account from New York. 729 F.3d
at 76-78 (internal quotation marks and citation omitted).

Here, at least one of the fraudulent transactions in each
of the Target Stocks was bought and sold through U.S.-based
market makers. Government witness and SEC employee
Daniel Koster testified that all of the manipulative trades were
“facilitate[d]” by U.S.-based market makers, i.e., an
American market maker bought the stock from the seller and
sold it to the buyer. (App. 1890-96, 1904-05, 1968); see also
15 U.S.C. § 78c(38). Therefore, some of the relevant
transactions required the involvement of a purchaser or seller
working with a market maker and committing to a transaction
in the United States, incurring irrevocable liability in the
United States, or passing title in the United States. The
record also contains evidence of specific instances in which
the Target Stocks were bought or sold at Georgiou’s direction
from entities located in the United States.15

15
For instance: (1) on November 3, 2005, Waltzer, who was
located in Pennsylvania, sold 69,150 shares of Neutron stock
from one of his accounts to another of his accounts; (2) on
May 9, 2006, from within the United States, Waltzer sold
100,000 shares of Avicena stock from one of his accounts to
another of his; (3) Georgiou deposited 2.5 million HYHY
shares into an account in California; (4) on September 3,
2008, an undercover FBI agent purchased 16,000 shares of
Northern Ethanol stock from within the United States; and (5)
Georgiou wired $5,000 to a bank account in Philadelphia for

18
 We now hold that irrevocable liability establishes the
location of a securities transaction. Here, the evidence is
sufficient to demonstrate that Georgiou engaged in “domestic
transactions” under the second prong of Morrison, i.e.,
transactions involving “the purchase or sale of any [] security
in the United States.” See Morrison, 561 U.S. at 273. Thus,
the District Court’s application of Section 10(b) to
Georgiou’s transactions was proper.

c. Jury Instructions

Georgiou argues that under the District Court’s
instructions, all four of the securities fraud counts may have
been based exclusively on foreign margin loan transactions.
However, Georgiou fails to demonstrate that the jury relied
on a legally insufficient theory. The District Court’s jury
instructions track the statutory language of Rule 10b-5. See
United States v. Syme, 276 F.3d 131, 146-47 (3d Cir. 2002).
“[T]he longstanding rule [is] that general verdicts will stand
even if one of the possible grounds for conviction was
unsupported by the evidence.” Id. at 145. The “‘invalid legal
theory’ exception” to this rule applies “if the indictment or
the district court’s jury instructions are based on an erroneous
interpretation of law or contain a mistaken description of the
law.” Id. Here, there was no such deficiency in the
instruction.

the undercover FBI agent, in furtherance of the manipulative
trading scheme.

19
 Further, the District Court properly instructed the jury
on the elements of securities fraud pursuant to Section 10(b)
and Rule 10b-5, including the jurisdictional elements relating
to conduct in the United States. (App. 2972-73) (requiring
the jury to find beyond a reasonable doubt that “the defendant
used or caused to be used the facilities of a national securities
exchange or any means or instrumentality of interstate
commerce in furtherance of the fraudulent conduct”). The
District Court was not required to preclude the jury from
considering foreign activity in evaluating the evidence.
Furthermore, Georgiou’s fraudulent activity in the United
States is not rendered lawful because some transactions
occurred outside of the United States or because some victims
are located in foreign countries.

B. Extraterritoriality of United States Wire Fraud
Statute

Appellant also argues that his wire fraud convictions
are improperly based on the extraterritorial application of
United States law, and that these convictions are legally
insufficient because the Government failed to demonstrate
that his conduct violated foreign law. As Georgiou raises this
argument for the first time on appeal, we apply plain error
review. Henderson, 133 S.Ct. at 1124.

Unlike securities fraud, the statute governing wire
fraud “prohibits ‘any scheme or artifice to defraud,’—fraud
simpliciter, without any requirement that it be ‘in connection
with’ any particular transaction or event.” Morrison, 561
U.S. at 271-72 (quoting 18 U.S.C. § 1343). Thus, a wire
fraud offense is “complete the moment [a party] executed the
scheme inside the United States. . . .” Pasquantino v. United
States, 544 U.S. 349, 371 (2005). Moreover, unlike the

20
Securities Exchange Act, Section 1343 applies
extraterritorially. Id. at 371-72. Indeed, the explicit statutory
language indicates that “it punishes frauds executed in
‘interstate or foreign commerce,’” and “is surely not a statute
in which Congress had only domestic concerns in mind.” Id.
(quoting 18 U.S.C. § 1343).

Here, the record contains ample evidence that
Georgiou used interstate wires to effect a “scheme or artifice
to defraud.” 18 U.S.C. §1343. Georgiou regularly used e-
mail to direct Waltzer’s participation in the fraud and wired
money from a Canadian bank to an undercover FBI agent’s
account in Pennsylvania. (See, e.g., App. 3800-04, 3778-82,
3930-34, 4019.)

In addition, Appellant’s argument that Pasquantino
requires the Government to prove that Georgiou’s conduct
was illegal in the Bahamas fails. The footnote that Georgiou
relies on in Pasquantino references foreign tax law for the
sole purpose of determining whether the victim had “valuable
property interests as defined by foreign law.” 544 U.S. at 371
n.13. Here, it is undisputed that the foreign victims had a
property interest in the money and property that Georgiou
fraudulently obtained from them. Hence, the wire fraud
statute is properly applied.

Finally, Georgiou’s arguments that the District Court
erred because it did not require the jury to limit its
consideration to domestic transactions only and permitted the
jury to consider invalid legal theories, also fail with respect to
wire fraud. As discussed, the text of the relevant statute, 18
U.S.C. § 1343, does not expressly require that a verdict be
based on entirely domestic transactions. Pasquantino, 544
U.S. at 372-73 (Ginsburg, J., dissenting). Instead, the

21
statute’s only jurisdictional requirement is that a
communication be transmitted through interstate or foreign
commerce for the purpose of executing a scheme to defraud.
18 U.S.C. § 1343.

The District Court properly instructed the jury on this
issue, explaining that interstate or foreign commerce is “to
send from one state to another, or to or from the United
States . . . .” (App. 2985.) This instruction did not
impermissibly allow the jury to convict Georgiou based
solely on foreign activity. Thus, the District Court did not err
with respect to its jury instruction on wire fraud.

Georgiou’s argument that the jury may have relied on
a legally invalid theory also fails. Here, the District Court’s
instructions on the elements of wire fraud were proper, and
the evidence was sufficient to convict on the market
manipulation theory. Thus, the jury was not presented with a
legally invalid theory of guilt, and the District Court did not
err.

C. Violations of Brady and Jencks Act Disclosure
Requirements

Georgiou contends that the Government suppressed
evidence concerning cooperating witness Kevin Waltzer’s
history of mental illness and substance abuse, as well as
statements Waltzer made to the SEC, in violation of Brady v.
Maryland, 373 U.S. 83 (1963), and the Jencks Act, 18 U.S.C.
§ 3500.

22
 1. Brady Violations

“Our review of the denial of a motion for new trial on
the basis of a Brady argument is de novo with respect to the
district court’s conclusions of law and is based on the ‘clearly
erroneous’ standard with respect to its findings of fact.”
United States v. Milan, 304 F.3d 273, 286 (3d Cir. 2002)
(citing United States v. Perdomo, 929 F.2d 967, 969 (3d Cir.
1991)). Under Brady, the Government is required, upon
request, to produce “evidence favorable to an accused.” 373
U.S. at 87. The failure to do so will result in a due process
violation if the suppressed evidence “is material either to guilt
or to punishment, irrespective of the good faith or bad faith of
the prosecution.” Id. To establish a Brady violation, a
defendant must demonstrate that: “‘(1) evidence was
suppressed; (2) the suppressed evidence was favorable to the
defense; and (3) the suppressed evidence was material either
to guilt or to punishment.’” United States v. Pelullo, 399 F.3d
197, 209 (3d Cir. 2005) (quoting United States v. Dixon, 132
F.3d 192, 199 (5th Cir.1997)).

Evidence is favorable if it is impeaching or
exculpatory. Banks v. Dretke, 540 U.S. 668, 691 (2004);
Johnson v. Folino, 705 F.3d 117, 128 (3d Cir. 2013). “The
evidence is material only if there is a reasonable probability
that, had the evidence been disclosed to the defense, the result
of the proceeding would have been different. A ‘reasonable
probability’ is a probability sufficient to undermine
confidence in the outcome” of the trial. United States v.
Bagley, 473 U.S. 667, 682 (1985); see also Kyles v. Whitley,
514 U.S. 419, 441-54 (1995). Thus,

“[t]he materiality of Brady material depends
almost entirely on the value of the evidence

23
 relative to the other evidence mustered by the
state.” Suppressed evidence that would be
cumulative of other evidence or would be used
to impeach testimony of a witness whose
account is strongly corroborated is generally not
considered material for Brady purposes.
Conversely, however, undisclosed evidence that
would seriously undermine the testimony of a
key witness may be considered material when it
relates to an essential issue or the testimony
lacks strong corroboration.

Johnson, 705 F.3d at 129 (quoting Rocha v. Thaler, 619 F.3d
387, 396-97 (5th Cir. 2010)).

Georgiou argues that the Government suppressed
Waltzer’s bail report (“Bail Report”) and the minutes from
Waltzer’s arraignment and guilty plea (“Minutes”). Both the
Bail Report and the Minutes contain evidence of Waltzer’s
cocaine use and mental health history. Specifically, the Bail
Report references Waltzer’s history of treatment for
psychiatric disorders and substance abuse. The Minutes
include Waltzer’s statements about his treatment for
depression and anxiety and his use of Paxil, a prescription
medication, to treat those conditions.

a. Waltzer’s Substance Abuse

Georgiou argues that the Government failed to disclose
evidence of Waltzer’s substance abuse in the Minutes and the
Bail Report in violation of its Brady obligations. However,
Appellant received statements concerning Waltzer’s drug use
in the Government’s pretrial production, including notes
showing a statement from Waltzer that he “did drugs and

24
drank alcohol . . . and developed an addiction to cocaine . . .
[and] last used cocaine six months ago.” (Supp. App. 1338.)
Indeed, Waltzer testified on direct and cross-examination
about his cocaine use. (App. 502-04, 848-49.) Thus,
additional evidence of his substance abuse would have been
cumulative. Johnson, 705 F.3d at 129; see also United States
v. Barraza Cazares, 465 F.3d 327, 335 (8th Cir. 2006) (no
Brady violation where “all that was unknown to the defendant
and his attorney was the fact of Lopez’s statement, not the
content of that statement”). Because evidence of Waltzer’s
substance abuse was provided to Appellant prior to trial, this
material was not suppressed, and the first prong of Brady is
not satisfied.

Moreover, assuming arguendo that evidence of
Waltzer’s former drug use had been suppressed, such
evidence is not favorable to the Appellant for purposes of our
Brady analysis. At trial, Waltzer testified that his cocaine use
did not impact his ability to understand, remember or testify
about his interactions with Appellant. (App. 503.) Appellant
chose not to probe this issue more fully on cross-examination.
(App. 848-49.) There is no evidence—in the pretrial
discovery, trial testimony, Minutes, or Bail Report—to
suggest that Waltzer’s former substance abuse impacted the
reliability of his testimony. Thus, because this evidence
neither constitutes impeachment nor exculpatory material, it
is not favorable to the Appellant.

Finally, evidence of Waltzer’s substance abuse cannot
be deemed material because there is not a “reasonable
probability” that this evidence would have changed the
outcome of the trial. Bagley, 473 U.S. at 682; see also Kyles,
514 U.S. at 454. Indeed, evidence of Waltzer’s substance
abuse was considered at trial on both direct and cross-

25
examination. To the extent Appellant argues that additional
information about the intensity or duration of Waltzer’s
substance abuse may have impacted the trial’s outcome, he
explains neither why he did not probe these issues more fully
on cross examination, nor why such new information would
have changed the trial’s outcome when the substance abuse
evidence that was set out at trial did not. Thus, it cannot be
deemed material.

Because evidence of Waltzer’s substance abuse in the
Minutes and the Bail Report was neither suppressed,
favorable nor material, Appellant’s Brady arguments
concerning this evidence must fail.

b. Waltzer’s Mental Health History and
Treatment

Georgiou also argues that information regarding
Waltzer’s mental health was suppressed in both the Bail
Report and the Minutes. In the Minutes, Waltzer stated that
he had seen a mental health provider for depression and
anxiety, and was taking Paxil for depression. However, in
response to questioning from the court, he agreed that his
“head [has] always been clear,” and that his medication did
not affect “how [he] think[s].” (App. 4249-50, 4245, 4355.)
The Bail Report also includes information that Waltzer had
“been diagnosed in the past with Anxiety Disorder, Panic
Disorder and Substance Abuse Disorder.” (App. 4187.)

The Minutes and Bail Report were not suppressed
under the first prong of Brady because they were accessible to
Appellant. “Brady does not oblige the [G]overnment to
provide defendants with evidence that they could obtain from
other sources by exercising reasonable diligence.” Perdomo,

26
929 F.2d at 973. Indeed, Appellant “was in a position of
parity with the government as far as access to this material,”
United States v. Jones, 34 F.3d 596, 600 (8th Cir. 1994), and
thus, “the transcript [] was as available to [the defendant] as it
was to the Government.” United States v. Ladoucer, 573
F.3d 628, 636 (8th Cir. 2009) (finding no Brady violation
from the government’s failure to produce the transcript of its
witness’s state court testimony in an unrelated matter because
the defendant “could have obtained a copy of the transcript
himself”).

Here, as the District Court observed, “it is apparent
that with just minimal due diligence on the part of Georgiou,
he could have obtained a copy of [Waltzer’s] guilty plea
transcript because he certainly was aware that the main
witness against him had pled guilty before Judge Dalzell.”
(App. 58.) Likewise, the existence of the Bail Report was not
hidden from Appellant, and it could have been accessed
through his exercise of reasonable diligence. Accordingly,
the Minutes and the Bail Report cannot be deemed to have
been suppressed.

Further, evidence concerning Waltzer’s mental health
is neither favorable to the Appellant nor material. In this
case, this evidence neither undermines Waltzer’s reliability
nor calls into question his “‘ability to perceive, remember and
narrate perceptions accurately,’” and thus is not “clearly
relevant to his credibility.” Wilson v. Beard, 589 F.3d 651,
666 (3d Cir. 2009) (quoting Cohen v. Albert Einstein Med.
Ctr., 592 A.2d 720, 726 (Pa. Super. Ct. 1991)); see also 4
Jack B. Weinstein & Margaret A. Berger, Weinstein’s Federal
Evidence § 607.05[1] (Joseph M. McLaughlin ed., 2d ed.
2014) (“A witness’s credibility may always be attacked by
showing that his or her capacity to observe, remember, or

27
narrate is impaired. Consequently, the witness’s capacity at
the time of the event, as well as at the time of trial, is
significant.”).

The evidence at issue here shows that Waltzer had
been seeking medical attention for anxiety and depression for
several years, and had been taking medication to treat those
conditions. (App. 4187.) In the Minutes, Waltzer stated that
his medication did not affect his mental capacity, and the
District Judge, the Government, and Waltzer’s attorney all
agreed he was competent to plead guilty. (App. 4250.) Cf.
Wilson, 589 F. 3d at 666 (suppressing mental health evidence
found material under Brady where it showed that witness had
“an inability to form adequate perceptions, that he is easily
confused, has dissociative tendencies, blackouts, motor visual
problems, weak long and short term memory, poor judgment,
and distorted perceptions of reality.”) (internal quotation
marks omitted). Furthermore, evidence of Waltzer’s mental
illness was not material because, relative to the strength of the
evidence against Appellant, there is not a “reasonable
probability that, had the evidence been disclosed to the
defense, the result of the proceeding would have been
different.” Bagley, 473 U.S. at 682.

c. Documents from SEC Meetings with
Waltzer

Georgiou also argues that the Government violated
Brady in failing to produce documents from meetings
between the SEC and Waltzer. The Government produced
pretrial discovery from the SEC, including trading and
financial records of the Target Stocks. Subsequent to this
production, Georgiou withdrew his discovery motion as moot.
(Supp. App. 1228.) However, the Government had not

28
produced notes taken during two SEC interviews of Waltzer,
at which members of the prosecution team were present.
Subsequent to Appellant’s posttrial challenge, the
Government reviewed these notes and determined that they
did not contain any Brady material.

We agree with the District Court’s assessment that
there is no basis in the record to suggest that these notes
contained Brady material. Pure speculation that exculpatory
information might exist is insufficient to sustain a Brady
claim. See United States v. Andrus, 775 F.2d 825, 843 (7th
Cir. 1985) (“‘Mere speculation that a government file may
contain Brady material is not sufficient to require a remand
for in camera inspection, much less reversal for a new
trial.’”) (quoting United States v. Navarro, 737 F.2d 625 (7th
Cir. 1984), cert. denied, 469 U.S. 1020 (1984)). Thus,
Appellant has not set out a viable Brady claim based on these
documents.

***

In light of the extensive evidence in the trial record,
including recordings of Appellant discussing fraudulent
activities, emails between Appellant and co-conspirators
regarding manipulative trades, voluminous records of the
trades themselves, bank accounts and wire transfers,
Appellant’s argument that the evidence of Walter’s substance
abuse and mental illness, or his meetings with the SEC, is
material for our Brady analysis cannot stand. Waltzer’s
testimony is “strongly corroborated” by recordings of phone
calls and meetings, and records of actual trades. See Johnson,
705 F.3d at 129 (citing Rocha, 619 F.3d at 396-97). Thus,
this evidence would “generally not [be] considered material
for Brady purposes” because when considered “‘relative to

29
the other evidence mustered by the state,’” the allegedly
suppressed evidence is insignificant. Id. (quoting Rocha, 619
F.3d at 396). Moreover, for the foregoing reasons, the
evidence at issue had not been suppressed, nor is it favorable
to the Appellant. As such, Appellant’s Brady arguments must
fail.

2. Jencks Act Disclosures

The Jencks Act obliges the Government to disclose
any witness statement “in the possession of the United States
which relates to the subject matter as to which the witness has
testified.” 18 U.S.C. § 3500(b). This requirement is limited
to production of statements “possessed by the prosecutorial
arm of the federal government.” United States v. Reyeros,
537 F.3d 270, 285 (3d Cir. 2008) (quoting United States v.
Merlino, 349 F.3d 144, 154 (3d Cir. 2003)). However, unlike
Brady, “[t]he Jencks Act requires that any statement in the
possession of the government—exculpatory or not—that is
made by a government witness must be produced by the
government during trial.” United States v. Starusko, 729 F.2d
256, 263 (3d Cir. 1984).

Here, Appellant has failed to identify any statements
that were withheld in violation of the Jencks Act. Indeed,
Appellant does not dispute that the Government produced
boxes of impeachment evidence concerning Waltzer,
including records of Waltzer’s numerous prior frauds,
evidence of his plea and cooperation, trading and financial
records, and prior statements to law enforcement. The
additional statements Appellant seeks either were not within
the possession of the prosecutorial arm of the government,
i.e., those held by the SEC, or do not exist. Likewise, the
Government did not have possession of the Bail Report, and

30
thus was not obligated to provide it. (See App. 108-09.) (the
Government explained that it neither examined nor took
possession of the Bail Report, and the Report included
language indicating that it should not be removed from the
courtroom.)

D. Evidentiary Rulings

1. Koster’s Testimony and Summary Charts

After the jury returned its verdict, Georgiou moved for
a new trial, arguing, inter alia, that Government witness
Daniel Koster, an SEC employee, should not have been
permitted to testify as a lay witness under Federal Rule of
Evidence 701. The District Court denied this motion on the
grounds that Koster’s testimony was permissible under Rule
701.

On appeal, Georgiou again argues that the District
Court erred by allowing Koster to testify as an undeclared
expert and to offer opinions and legal conclusions that
usurped the role of the jury. He also argues that the District
Court admitted prejudicial charts into evidence without
providing cautionary instructions to the jury. The
Government responds that these arguments have been
waived,16 and lack merit.

16
The Government submitted a trial memorandum, including
the following stipulations reached by the parties: (1)
“[v]arious trading records and financial evidence relating to
the scheme will be introduced in the form of summary charts
and testimony pursuant to Rule 1006”; (2) Koster would
“present testimony and accompanying charts concerning the

31
 We review the denial of a motion for a new trial for
abuse of discretion. United States v. Brennan, 326 F.3d 176,
189 (3d Cir. 2003). “‘An abuse of discretion arises when the
District Court’s decision rests upon a clearly erroneous
finding of fact, an errant conclusion of law[,] or an improper
application of law to fact.’” Pineda v. Ford Motor Co., 520
F.3d 237, 243 (3d Cir. 2008) (quoting In re TMI Litig., 193
F.3d 613, 666 (3d Cir. 1999)).

manipulative trading activity charged in the indictment”; and
(3) Koster may further testify as a “summary fact witness to
explain the relevance of his trading analysis to the other
evidence presented in the case.” (App. 5593-94.) Georgiou
objected generally to the use of a summary witness, and to the
use of witnesses and charts to summarize anything other than
voluminous writings, recordings, or photographs, specifically
objecting to summary of oral testimony.

However, Georgiou did not dispute that the “charts and
the underlying records have been produced to defendant” and
that “defendant has stipulated that [they] are authentic and
qualify as business records under Rule 803(6).” (Id. at 5594.)
Before trial, Georgiou’s counsel indicated that he had
concerns about the proposed testimony of the Government’s
SEC witnesses and would be objecting if they “stray[ed] from
within [] legal limits,” specifically identifying “the issue of
opinion testimony or improper summary of things not
admissible in evidence.” Id. at 1520. However, counsel also
stated his concerns with the charts had been “resolved.” Id.
Furthermore, at trial, no objections were lodged by Appellant
with respect to Koster’s testimony, or the admission of charts.

32
 “A new trial should be ordered only when substantial
prejudice has occurred,” United States v. Armocida, 515 F.2d
29, 49 (3d Cir. 1975), and “if the interest of justice so
requires.” Fed. R. Crim. P. 33. To grant a new trial, a court
must determine that “the allegedly improper statements or
conduct make it ‘reasonably probable’ that the verdict was
influenced by the resulting prejudice.” Forrest v. Beloit
Corp., 424 F.3d 344, 351 (3d Cir. 2005) (quoting Greenleaf v.
Garlock, Inc., 174 F.3d 352, 363-64 (3d Cir. 1999)).

“We review the District Court’s decisions as to the
admissibility of evidence for abuse of discretion. To the
extent that these rulings were based on an interpretation of the
Federal Rules of Evidence, however, our review is plenary.”
United States v. Serafini, 233 F.3d 758, 768 n. 14 (3d Cir.
2000) (citing United States v. Pelullo, 964 F.2d 193, 199 (3d
Cir.1992)).

Under Federal Rule of Evidence 701, if a witness does
not testify as an expert, opinion testimony must be: “(a)
rationally based on the witness’s perception; (b) helpful to
clearly understanding the witness’s testimony or to
determining a fact in issue; and (c) not based on scientific,
technical, or other specialized knowledge within the scope of
Rule 702.” Fed. R. Evid. 701.

Under Federal Rule of Evidence 1006, a party may
“use a summary, chart, or calculation to prove the content of
voluminous writings [or] recordings . . . that cannot be
conveniently examined in court,” as long as the originals or
duplicates are made available for examination or copying by
other parties. Fed. R. Evid. 1006.

33
 Georgiou argues that Koster’s testimony was based on
specialized knowledge and thus inadmissible from a lay
witness. We agree with the District Court’s assessment that
Koster’s testimony, including comparisons of stock quantities
and prices did not require prohibited “scientific, technical, or
other specialized knowledge,” and thus was squarely within
the scope of Rule 701. (App. 40.) Koster’s testimony
provided factual information and summaries of voluminous
trading records that he had personally reviewed in his
capacity as an SEC employee and as part of the SEC’s
investigation of Georgiou. See SEC v. Treadway, 430 F.
Supp. 2d 293, 321-22 (S.D.N.Y. 2006) (rejecting challenge to
admissibility of testimony of SEC witness under Rule 701
because witness was “simply an SEC employee providing his
view of the facts as a summary of certain evidence and as an
aid to the Court,” and that witness’s declaration “was more
akin to a summary document than an expert analysis”).
Because Koster “present[ed] testimony and accompanying
charts concerning the manipulative trading activity charged in
the indictment . . . [and] explain[ed] the relevance of his
trading analysis to the other evidence presented in the case,”
within the scope of Rule 701 and the parties’ pretrial
stipulation, the District Court did not abuse its discretion in
admitting his testimony as a lay witness. (Gov’t Trial Mem.,
App. 5594.)

The District Court also did not abuse its discretion in
allowing Koster’s remaining testimony on re-direct because
Georgiou’s counsel first elicited Koster’s opinion on cross-
examination. Under the doctrine of curative admissibility,
i.e., “opening the door,” “when one party introduces
inadmissible evidence, the opposing party thereafter may
introduce otherwise inadmissible evidence to rebut or explain

34
the prior evidence.” Gov’t of the Virgin Islands v. Archibald,
987 F.2d 180, 187 (3d Cir. 1993) (citing C. McCormick, On
Evidence § 57 (4th ed. 1992)).

2. Exclusion of evidence pursuant to FRE
608(b)

Georgiou also argues that the District Court erred in
prohibiting testimony and extrinsic evidence regarding
allegations of a post-cooperation fraud perpetrated by
Waltzer.17 The District Court excluded this evidence as
collateral and cumulative under Federal Rules of Evidence
608(b) and 403. The District Court’s decisions regarding the
admissibility of evidence are reviewed for abuse of discretion.
Serafini, 233 F.3d at 768 n. 14 (citing Pelullo, 964 F.2d at
199).

Under Rule 608(b) of the Federal Rules of Evidence,
“extrinsic evidence is not admissible to prove specific
instances of a witness’s conduct in order to attack or support
the witness’s character for truthfulness.” Fed. R. Evid.
608(b). Further, Federal Rule of Evidence 403 authorizes a
district court to “exclude collateral matters that are likely to
confuse the issues.” United States v. Casoni, 950 F.2d 893,
919 (3d Cir. 1991); see also Fed. R. Evid. 403 (“The court
may exclude relevant evidence if its probative value is
substantially outweighed by a danger of . . . confusing the

17
Appellant sought to call a law enforcement agent to testify
about his investigation of Waltzer on unrelated crimes, and
seven lay witnesses to testify that they were victims of an
unrelated fraud perpetrated by Waltzer. He argued that this
testimony would show Waltzer’s bias and pattern of fraud.

35
issues . . . or needlessly presenting cumulative evidence.”). A
matter is collateral if it is “factually unrelated to [the] case”
such as an “unrelated criminal investigation.” Casoni, 950
F.2d at 919. Moreover, given the District Court’s “wide
discretion in limiting cross-examination[,] [a] restriction will
not constitute reversible error unless it is so severe as to
constitute a denial of the defendant’s right to confront
witnesses against him and it is prejudicial to substantial rights
of the defendant.” Id. (quoting United States v. Adams, 759
F.2d 1099, 1100 (3d Cir. 1985)).

Georgiou’s rights under the Confrontation Clause were
not implicated here, as the record reflects that the District
Court allowed Appellant to cross-examine Waltzer about his
alleged criminal acts, and limited further questioning only
after Waltzer denied engaging in misconduct. (App. 803-819;
835-846; 867-872.) See Casoni, 950 F.2d at 919 (“The
Supreme Court has said the Constitution’s Confrontation
Clause guarantees an opportunity for effective cross-
examination, not cross-examination that is effective in
whatever way and to whatever extent, the defense might
wish.”) (quoting Delaware v. Van Arsdall, 475 U.S. 673, 679
(1986)).

The District Court’s imposition of a reasonable limit
on the scope of cross-examination was permissible in order to
“strike a balance between the constitutionally required
opportunity to cross-examine and the need to prevent
repetitive or abusive cross-examination.” Casoni, 950 F.2d at
919. By the time Appellant sought to cross-examine Waltzer
on his involvement in post-cooperation fraudulent activities,
the record already contained evidence of Waltzer’s past
illegal conduct and his cooperation with the Government, all
of which is directly relevant to Appellant’s theory that

36
Waltzer was biased in favor of the government. (App. 835-
846; 867-872.) Indeed, Appellant directly questioned Waltzer
on whether he was untrustworthy and biased for the
Government. Id. Because “[t]he jury was in possession of
sufficient information to make a discriminating appraisal of
[the witness’s] possible motives for testifying falsely in favor
of the [G]overnment,” the District Court did not abuse its
discretion in excluding certain extrinsic evidence and limiting
the cross-examination of Waltzer. See U.S. v. McNeill, 887
F.2d 448, 454 (3d Cir. 1989).

3. Motion to unseal

We reject Georgiou’s argument that the District Court
erred in denying his motion to unseal. Georgiou filed the
motion after filing a notice of appeal with this Court,
appealing the District Court’s denial of his Motion for
Reconsideration and New Trial. “The filing of a notice of
appeal . . . confers jurisdiction on the court of appeals and
divests the district court of its control over those aspects of
the case involved in the appeal.” Griggs v. Provident
Consumer Discount Co., 459 U.S. 56, 58 (1982). Because the
District Court lacked jurisdiction at the time Appellant filed
his motion to unseal, there was no error in denying this
motion.

E. Sentencing

The District Court sentenced Georgiou to 300 months’
imprisonment, followed by a three-year term of supervised
release, and ordered restitution of $55,832,398, a special
assessment of $900, and forfeiture of $26,000,000. Georgiou
challenges this sentence as procedurally and substantively
unreasonable, arguing that the District Court erred

37
procedurally in failing to apply Dura Pharmaceuticals, Inc. v.
Broudo, 544 U.S. 336 (2005), to the Guidelines loss
calculation, resulting in substantive error.

Georgiou also challenges the sentence enhancements
on the grounds that the District Court did not require the
Government to properly establish the number of victims for a
six-point enhancement under U.S.S.G. § 2B1.1 (b)(2)(C).
Georgiou further argues that the District Court erred in adding
six levels to the Guidelines range due to the dissolution of
Caledonia and the sophisticated nature of the fraud. Finally,
Georgiou asserts that the District Court erred in basing
restitution on the Guidelines loss calculation, and in its
imposition of the forfeiture order.

The District Court determined that the total actual
losses amounted to $55,832,398. This calculation accounted
for the losses suffered by: (1) the three institutions Georgiou
defrauded through his use of manipulated stocks, namely,
Accuvest ($3,613,856), Alliance ($5,890,748), and Caledonia
($22,000,000) (see App. 5489); (2) Alex Barrotti
($16,000,000), to whom Georgiou made a false promise to
cover trading losses for trades made at Georgiou’s direction
(see App. 5488); and (3) numerous victim shareholders who
bought HYHY stock during Georgiou’s “pump and dump”
scheme ($8,327,794). (See App. 5491, Supp. App. 996.)

Based on these figures, Georgiou received a 24-level
increase to the base offense level of seven pursuant to
U.S.S.G. § 2B1.1(b)(1)(M) (providing for a 24 point
enhancement where the loss exceeds $50,000,000). (App.
5516-24; App. 5308.)

38
 Our “review of a district court’s decision regarding the
interpretation of the Sentencing Guidelines, including what
constitutes ‘loss,’ is plenary.” United States v. Napier,
273 F.3d 276, 278 (3d Cir. 2001) (quoting United States v.
Sharma, 190 F.3d 220, 226 (3d Cir. 1999). We review
factual findings for clear error. Id. (citing Sharma, 190 F.3d at
229).

1. Loss Calculation

Georgiou argues that the District Court incorrectly
calculated the total loss attributable to his offense, resulting in
a higher total offense level. He contends that the loss
calculation contained in the Presentence Investigation Report
(“PSR”) was grossly overstated because it ignored the impact
of market forces on the values of the Target Stocks.
Georgiou asserts that such an assessment is required under
Dura Pharmaceuticals, 544 U.S. 336.

Although it is undisputed that the District Court did
not consider the impact of market forces in its loss
calculation, it was not required to do so. Dura
Pharmaceuticals was decided in the context of a civil
securities fraud class action. Id. at 341. While some of our
sister circuits have applied the Dura Pharmaceuticals loss
calculation in the criminal sentencing context, we have not.
Thus, there is no basis on which to find the District Court’s
loss calculation clearly erroneous. Indeed, the record here
indicates that the accounts responsible for the losses in the
Target Stocks were controlled by the Appellant and his
co-conspirators. Appellant conceded as much in recorded
conversations. (See, e.g., App. 702-05, 725-32, Supp. App.
1101-11.)

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 Moreover, assuming arguendo that an error had
occurred in failing to assess the impact of market forces on
the Target Stocks, any such error would be harmless. In
applying Section 2B1.1(b), courts must use “the greater of the
actual or intended loss.” U.S.G.G. § 2B1.1 cmt. n.3(A).
During sentencing, the District Court found that Georgiou
was responsible for intended losses that “far exceeded a
hundred million [dollars]” based on his scheme involving
Northern Ethanol. (App. 5485-86, 5490.) However, the
District Court did not consider intended losses in its
calculation because Georgiou’s total offense level, 45, already
exceeded the guideline maximum of 43. (App. 5308.)
Therefore, under either calculation, Georgiou’s total offense
level would have been in excess of 43. Thus, his sentence was
not impacted by the District Court’s alleged error.

2. Victim Enhancements

Georgiou’s challenge to the six-level upward
adjustment for 250 or more victims under U.S.S.G
§2B1.1(b)(2)(C) also fails. The jury found that Appellant
participated in a “pump and dump” scheme with HYHY, and
had paid for a mailer on the stock to be sent to seven million
people. (Supp. App. 987.) Koster, the SEC witness,
identified 1,918 investor accounts that purchased the stock
during the period of the scheme, each of which lost over
$1,000. (App. 5427-29.) Thus, there were well over 250
victims, and the District Court’s upward adjustment based on
number of victims was not clearly erroneous.

3. Forfeiture

Georgiou did not object—though he had several
opportunities to do so—to the Court’s imposition of the

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forfeiture order, which had been submitted to the Court prior
to sentencing. Thus, any claims on the basis of this forfeiture
have been waived. Furthermore, even absent the waiver, the
forfeiture is proper under 18 U.S.C. § 981(a)(1)(C) and 28
U.S.C. § 2461(c) because the $26,000,000 subject to
forfeiture “constitutes, or is derived from proceeds traceable
to the offenses of which the defendant was convicted.” (See
App. 1355, 1378-79, 1392-1402, 1415, 1482-96, 1836-38,
5488-89, Supp. App. 995-96.) Because Appellant waived his
objections and because the order was, in fact, proper, there is
no basis for a finding of clear error with respect to the
forfeiture.

V.

For the reasons stated above, we will affirm
Georgiou’s Judgment of Conviction.

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