NEW YORK (Legal Newsline) – A federal appeals court reinstated a jury’s fraud verdict against Devon Archer, former business partner of presidential candidate Joe Biden’s son Hunter Biden, on Oct. 7.
A three-judge panel at the U.S. Court of Appeals for the Second Circuit found that when District Judge Ronnie Abrams granted Archer a second trial, she substituted her view of the evidence for that of her jurors.
Abrams briefly presided over a suit that Citizens for Responsibility and Ethics in Washington filed against President Trump alleging violation of the Foreign and Domestic Emoluments Clauses of the U. S. Constitution.
She recused herself when special prosecutor Robert Mueller hired her husband, Greg Andres, in his investigation of President Trump.
In 2018, jurors in Abrams’ court found Archer and two other defendants spent proceeds from bond issues of the Oglala Sioux of Nebraska for personal purposes.
Trial witnesses swore that they respected Archer’s connections but that in his absence they called him the “biggest show pony of all time.”
Abrams vacated the conviction only for Archer, finding the government failed to prove he intended to participate in a conspiracy.
Archer and Hunter Biden shared a room in college and stuck together.
They collected millions as board members of Burisma, a Ukrainian energy company, around the time of the Oglala bond issues.
In 2018, after jurors found Archer guilty, Abrams let him travel to Ukraine.
Abrams has let him chase global business as usual, permitting 38 foreign trips including eight to China and two to Russia.
She granted him a family vacation in Jamaica in 2018, and vacations in Turks and Caicos islands, Mexico, Jamaica, and United Arab Emirates in 2019.
This January, she granted a trip that combined vacation on the French Antilles with business in United Arab Emirates.
Grand jurors indicted Archer in 2016, along with John Galanis, Bevin Cooney, and others who pleaded guilty before trial.
At trial, jurors heard that defendants worked together to acquire companies they could roll up into a large conglomerate with Archer at the helm.
They first invested in Burnham Financial Group, a prominent name.
John Galanis’ son Jason told Archer and Cooney the Wakpamni community of the Oglala Sioux tribe brought him a deal for tax-free bonds.
John Galanis convinced a Sioux representative to issue bonds, saying they’d be placed in an annuity.
He said Wealth Assurance, a legitimate insurer, would provide the annuity.
Transaction documents identified the provider as Wealth Assurance Private Client Corporation, a shell entity.
The Wakpamwi issued $28 million of bonds in August 2014, and Hughes Asset Management bought it all.
Jason Galanis had installed Michelle Morton, one of the conspirators who pleaded guilty, as chief executive of Hughes Asset Management.
Proceeds went to Wealth Assurance Private Client, not to an annuity.
The Wakpamni issued $20 million a month later.
Archer bought $15 million through a real estate company he owned, with funds that originated in the Wealth Assurance Private Client account.
The Wakpamni issued $16 million in April 2015, and Morton arranged for Omaha’s teacher pension fund to buy it all.
Galanis spent about $1 million of the proceeds on a New York City condominium.
When interest came due later that year, Archer helped cover it by transferring $250,000 from one of his companies to Wealth Assurance Private Client.
Conspirators created an entity, Calvert Capital, and fabricated documents showing it lent Cooney and Archer the money for the second bond issue.
The scheme collapsed and, as the Second Circuit put it, the Wakpamni were left $60 million in debt and fund investors lost $40 million.
Jason Galanis, Morton, and two other defendants pleaded guilty before trial.
At trial, Archer’s lawyers painted him as an innocent victim of Jason Galanis.
Jurors convicted him, John Galanis, and Bevin Cooney.
All three moved for acquittal or another trial.
Abrams denied relief to John Galanis and Cooney but granted Archer another trial, finding Jason Galanis viewed him as a pawn in his schemes.
She found Jason Galanis kept Archer in the dark while touting his political and business connections.
She found the trial didn’t convince her that Archer knew Jason Galanis perpetrated a massive fraud.
She found the government couldn’t articulate a compelling motive for Archer to engage in fraud.
She found he never received money nor directly profited from misappropriation of the bond proceeds.
And, she found he lost a significant portion of funds he invested in the scheme.
The government appealed and won.
The Second Circuit held that a judge shouldn’t overturn a verdict unless evidence preponderates so heavily against it that letting it stand would be manifestly unjust.
Judge Richard Sullivan wrote that a court shouldn’t reweigh evidence and set aside a verdict simply because it feels another result was more reasonable.
“As the government argues, the idea that they could use bond proceeds however they chose stood in stark tension with the conservative annuity investment that the Wakpmani were promised and about which Archer was fully apprised,” Sullivan wrote.
He wrote that an electronic message Abrams found exculpatory could be read as Galanis instructing Archer on their cover story.
“Either way, it was not the province of the district court to reweigh the evidence in that regard,” he wrote.
Sullivan quoted a message about a Manhattan condo and wrote that Galanis bought it in the name of a corporation bearing Archer’s name and business address.
He wrote that it wasn’t for Abrams to second guess the jury’s choice of an inference that Archer knew Galanis diverted the money.
“The jury was entitled to credit the circumstantial evidence that Archer knew that his codefendants with whom he had worked to acquire these companies specifically to offload the Wakpamni bonds, would then place the bonds into their investors’ accounts without disclosing the conflicts of interest,” Sullivan wrote.
“The very nature of the transactions was surely suspect, particularly in light of Glanis’s questionable reputation and regulatory troubles of which Archer was well aware.”
He wrote that jurors were entitled to find that Archer knowingly purchased bonds from the second issue with proceeds from the first, and that Archer represented to the Wakpamni that he purchased the bonds for his own account and for investment only.
He wrote that the jury was entitled to endorse the government’s view that these statements were deceptive.
“The jury’s conclusion was amply supported by the fact that the funds used to purchase the bonds were not Archer’s at all,” he wrote.
He wrote that Archer told Deutsche Bank and Morgan Stanley his company came to own the bonds through a real estate sale, that Archer told Morgan Stanley he was a Burnham shareholder and that Archer misled Burnham about the involvement of Galanis.
He further wrote that Cooney told Archer to get out of Morgan Stanley, suggesting he should move the bonds to a bank that wouldn’t scrutinize them as closely.
He wrote that Archer’s payment of interest delayed disclosure of the fraud, and Galanis partly repaid him with proceeds of the third bond issue.
He wrote that while there was evidence that Galanis paraded Archer’s credentials, there was evidence that Archer knew this and willingly allowed it.
“The fraud had multiple motivations, and it was not necessary that Archer be fully versed in all of them,” he wrote.
Circuit Judge John Walker concurred. So did Southern District Judge Alison Nathan, sitting by designation.