17‐948 United States v. Zukerman UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

_______________

August Term, 2017

(Argued: January 17, 2018 Decided: July 27, 2018)

Docket No. 17‐948 _______________

UNITED STATES OF AMERICA,

Appellee,

‐‐ v. ‐‐

MORRIS E. ZUKERMAN

Defendant‐Appellant. _______________

B e f o r e:

KATZMANN, Chief Judge, KEARSE and POOLER, Circuit Judges.

_______________

Defendant‐Appellant Morris Zukerman appeals from a judgment of conviction entered on March 21, 2017, in the United States District Court for the Southern District of New York (Torres, J.). After pleading guilty to tax evasion and to corruptly endeavoring to obstruct and impede the due administration of the internal revenue laws in violation of

and 7212(a), Zukerman was sentenced to pay restitution of $37 million, serve a 70‐month term of imprisonment, and pay a $10 million fine. On appeal, Zukerman contends that the fine component of his sentence was procedurally and substantively unreasonable. We find that the district court did not err in calculating the fine range recommended by the Sentencing Guidelines; that Zukerman was given adequate opportunity to inform the district court of his financial condition and ability to pay a fine; and that imposing a $10 million fine was within the district court’s discretion. Accordingly, the judgment of the district court is AFFIRMED. _______________

STANLEY J. OKULA (Karl Metzner, on the brief), Assistant United States Attorneys, for Joon H. Kim, Acting United States Attorney for the Southern District of New York, New York, NY, for Appellee.

GREGORY G. GARRE (Roman Martinez and Graham E. Phillips, on the brief), Latham & Watkins LLP, Washington, DC, for Defendant‐ Appellant.

_______________

PER CURIAM:

Defendant‐Appellant Morris Zukerman appeals from a judgment of

conviction entered on March 21, 2017, in the United States District Court for the

Southern District of New York (Torres, J.). After pleading guilty to tax evasion

and to corruptly endeavoring to obstruct and impede the due administration of

the internal revenue laws, Zukerman was sentenced to pay restitution of $37

million, serve a 70‐month term of imprisonment, and pay a $10 million fine. On

2

appeal, this case calls on us to determine whether the fine imposed was

procedurally and substantively unreasonable. It was not. In particular, the

district court did not err in calculating the fine range recommended by the

Sentencing Guidelines; Zukerman was given adequate opportunity to inform the

district court of his financial condition and ability to pay a fine; and the

imposition of a $10 million fine was within the district court’s discretion.

Accordingly, the judgment of the district court is AFFIRMED.

***

Morris Zukerman is the founder of M.E. Zukerman & Co., an investment

management firm also known as “MEZCO.” In 2007, a MEZCO subsidiary sold

certain assets for $110 million, at which time Zukerman enacted a scheme to

avoid paying taxes on the proceeds of that sale, as well as on approximately $12

million of operating income MEZCO received as a result of its earlier ownership

of those assets. Zukerman falsified several documents in order to effectuate this

scheme, which allowed MEZCO to evade over $30 million in taxes. When aspects

of these transactions were audited by the Internal Revenue Service in 2008,

Zukerman lied to the tax professionals working for him and fabricated

documents relating to the transactions, causing several false statements to be

3

made to the IRS. See In re Grand Jury Subpoena Dated March 2, 2015,

, 14‐15 (2d Cir. 2015) (rejecting claims of attorney‐client privilege relating to

those false statements).

Separate and apart from those activities, Zukerman engaged in several

other schemes to avoid paying taxes and to throw the IRS off of his trail. He

avoided paying over $4.5 million in state taxes related to paintings used to

decorate his and his families’ living quarters, which were purchased, in part,

with his ill‐gotten gains from the MEZCO tax evasion. In addition, he provided

false information in connection with his personal tax returns, as well as those of

his family members and his household employees, causing each of them to file

false tax returns over the course of several years. When the personal taxes of both

Zukerman and his daughter were audited, Zukerman once again provided false

documentation and representations to the IRS. Finally, Zukerman also failed to

file several years’ worth of tax returns for the Zukerman Family Trust despite the

trust’s receipt of significant taxable income.

On June 27, 2016, Zukerman pleaded guilty to tax evasion, in violation of

, and to corruptly endeavoring to obstruct and impede the due

administration of the internal revenue laws, in violation of

(a). In

4

addition to requiring that he pay restitution in the amount of $37 million,

Zukerman’s plea agreement stipulated to a Sentencing Guidelines range of

between 70 to 87 months’ imprisonment and a fine of between $25,000 to

$250,000. On March 21, 2017, the district court principally sentenced Zukerman

to a 70‐month term of imprisonment, ordered $37 million to be paid in

restitution, and imposed a fine of $10 million. Judgment was entered that same

day, from which Zukerman appealed.

Following oral argument, we subsequently entered a summary order

pursuant to United States v. Jacobson,

(2d Cir. 1994), remanding this

matter to the district court for the limited purpose of elaborating on the rationale

for the fine imposed. United States v. Zukerman,

(2d Cir. 2018).

The district court provided such elaboration via a Supplemental Memorandum

dated May 4, 2018 (“Supp. Mem.”), after which the instant appeal was reinstated.

We now address Zukerman’s arguments.

On appeal, Zukerman contends that the fine component of his sentence

was procedurally and substantively unreasonable. Because Zukerman did not

raise any procedural objections below, his procedural arguments are “deemed

forfeited on appeal unless they meet our standard for plain error.” United States

5

v. Villafuerte,

(2d Cir. 2007). That standard requires Zukerman to

“establish (1) error (2) that is plain and (3) affects substantial rights,” only after

which will we “consider whether to exercise our discretion to correct it, which is

appropriate only if the error seriously affected the ‘fairness, integrity, or public

reputation of the judicial proceedings.’”

at 209 (quoting United States v. Doe,

(2d Cir. 2002)).

Zukerman’s first procedural argument is that the district court overlooked

U.S.S.G. § 5E1.2(h) in calculating the Guidelines’ recommended sentencing

range, which had the effect of doubling the recommended fine. That provision

states that an earlier version of the Guidelines should be applied “[f]or offenses

committed prior to November 1, 2015.” Count One of Zukerman’s indictment

alleges that his corrupt endeavors to obstruct and impede the due administration

of the internal revenue laws occurred “[f]rom in or about 2007 through in or

about 2015,” however, and Zukerman averred during his plea allocution that the

conduct underlying Count One took place “from 2007 through 2015.” Jt. App. 60,

99. One cannot reasonably interpret “through 2015” to mean only prior to

November 1, 2015. Moreover, Zukerman’s plea agreement expressly recognized

the applicability of the Guidelines range of which he now complains. That the

6

district court did not apply the pre‐November 1, 2015 Guidelines to Zukerman

was not an error, much less a plain error.

Nor is there any merit to Zukerman’s contention that inadequate

consideration was given to his ability to pay a $10 million fine. As soon as the

district court set a date for sentencing, it foreshadowed that a major fine was

possible, requesting information concerning “how fines have been calculated” in

“cases where you have this degree of violation of law.” Jt. App. 107. Zukerman

subsequently submitted an affidavit regarding his financial condition as of

August 2, 2016, at which time his net‐worth was in the eight‐figure range.

Zukerman now contends that the affidavit was outdated by time he was

sentenced in March 2017, but he declined to provide updated information in any

of several submissions he made to the district court after receiving a revised Pre‐

Sentence Report on November 9, 2016, which incorporated information

regarding his financial condition from his August 2016 affidavit. His failure to do

so continued even after the government expressly asserted that he could “pay a

substantial fine and should be ordered to do so—through a substantial variance

from the $25,000 to $250,000 Guidelines range” in February 2017. Id. at 322. At his

sentencing hearing, Zukerman objected neither specifically that he could not

7

afford to pay the fine imposed, nor more broadly that his financial condition had

materially changed since the submission of his affidavit. He was afforded ample

opportunity to attempt to show any limitations on his ability to pay a fine, yet he

failed to do so. See United States v. Elfgeeh,

, 136 (2d Cir. 2008)

(defendant must be given “at least a minimal opportunity to show that he lacks

the ability to pay the fine”). Accordingly, it was not plain error for the district

court to rely on the information that Zukerman himself had provided.1

We next address the substantive reasonableness of Zukerman’s fine, which

we review “under a ‘deferential abuse‐of‐discretion standard,’” United States v.

Thavaraja,

(2d Cir. 2014) (quoting Gall v. United States,

(2007)). We “identify[] as substantively unreasonable only those sentences

that are so shockingly high, shockingly low, or otherwise unsupportable as a

matter of law that allowing them to stand would damage the administration of

justice,” recognizing that although we “have a role to play in patrolling the

boundaries of reasonableness, we do so modestly, not substituting our own

judgment for that of the district courts.” United States v. Broxmeyer,

,

1 Zukerman’s third procedural argument—that the district court’s explanation of his

sentence was inadequate—is moot in light of our Jacobson remand.

8 289 (2d Cir. 2012) (internal quotation marks, citation and alteration omitted).

Under that lenient standard, Zukerman’s fine is not unreasonable.

First, the district court “put significant weight on the nature and

circumstances of [Zukerman’s] crimes” pursuant to

(a)(1),

explaining that “[t]ax crimes represent an especially damaging category of

criminal offenses,” which “strike[] at the foundation of a functioning

government.” Supp. Mem. at 5; cf. New York ex rel. Cohn v. Graves,

(1937) (“Enjoyment of the privileges of residence in the state and the

attendant right to invoke the protection of its laws are inseparable from

responsibility for sharing the costs of government.”); Compania Gen. de Tabacos de

Filipinas v. Collector of Internal Revenue,

(1927) (Holmes, J.,

dissenting) (“Taxes are what we pay for civilized society . . . .”). Accordingly, the

district court expressed deserved opprobrium for Zukerman’s “calculated

scheme to defraud the government of tens of millions of dollars for the sole

purpose of increasing his personal wealth,” executed through efforts that

“spanned fifteen years and involved submitting more than 50 falsified tax forms

for at least ten different individuals.” Supp. Mem. at 6.

9

Zukerman counters that these factors do not support an upward variance

from the recommended fine range because they were already addressed as part

of his offense level under the Sentencing Guidelines. But the district court was

not bound to conclude that the offense level adequately accounted for the

complexity and scope of Zukerman’s actions. To the contrary, “the historic role

of sentencing judges,” which “continue[s] to be exercised,” is to consider “the

judge’s own sense of what is a fair and just sentence under all the

circumstances.” United States v. Jones,

(2d Cir. 2006). Moreover,

“a district court’s decision to vary from the Guidelines ‘may attract the greatest

respect when the sentencing judge finds a particular case outside the heartland to

which the Commission intends individual Guidelines to apply.’” United States v.

Cavera,

(2d Cir. 2008) (en banc) (quoting Kimbrough v. United

States,

(2007)). In particular, the Guidelines related to tax offenses

“drastically vary as to the recommended sentence based simply on the amount of

money involved,” such that “a district court may find that even after giving

weight to the large or small financial impact, there is a wide variety of culpability

amongst defendants and, as a result, impose different sentences.”

Thus

sentences varying from the Guidelines in tax matters, “if adequately explained,

10

should be reviewed especially deferentially.”

We therefore accede to the

finding that an above‐Guidelines fine was necessary “to reflect the complexity,

scope, and extreme nature of [Zukerman’s] criminal activity.” Supp. Mem. at 7;

cf. Scott A. Schumacher, Sentencing in Tax Cases After Booker: Striking the Right

Balance Between Uniformity and Discretion, 59 VILL. L. REV. 563, 594 (2014) (noting

that the Guidelines “provide only a two‐point increase for a sophisticated means

adjustment,” which “can be cancelled out by an acceptance of responsibility

adjustment, making the defendant’s culpability and the manner in which the tax

loss was generated virtually irrelevant”).

Second, and again pursuant to

(a)(1), the district court

concluded that Zukerman’s “history and characteristics also pointed toward a

substantial above‐Guidelines fine.” Supp. Mem. at 7. This was based upon his

“history of uncharged criminal conduct” and his “repeated refusal to fess up,”

despite having “had ample opportunities to come clean,” as weighed against his

“role in the lives of his friends and family, as well as his philanthropy.”

.

Zukerman does not challenge the district court’s weighing of these factors, nor

could he. See Broxmeyer,

(“The particular weight to be afforded

aggravating and mitigating factors ‘is a matter firmly committed to the discretion

11

of the sentencing judge’ . . . .” (quoting United States v. Fernandez,

(2d Cir. 2006)).

Third, the district court “put the most weight” on the need for deterrence,

pursuant to

(a)(2)(B)‐(C). Supp. Mem. at 9. As regards general

deterrence, Zukerman asserts that his Guidelines‐minimum term of

imprisonment “is enough to make an example of him to others,” Def. Br. 44, but

the sentencing judge was by no means bound by such an argument. Instead, the

district court determined that general deterrence “has a particularly important

role” here “due to the significant resources required to monitor and prosecute tax

crimes,” which cost the government hundreds of billions of dollars annually.

Supp. Mem. at 9. Moreover, the district court explained that enforcement of tax

laws has “a ‘significant and positive deterrent effect’ on would‐be tax violators”

because, as compared to most criminals, “tax criminals are more likely to account

for the size of a fine and the likelihood that it will be imposed” and are therefore

more likely to eschew criminal conduct if it will be unprofitable.

at 10

(quoting Joshua D. Blank, In Defense of Individual Tax Privacy, 61 EMORY L.J. 265,

321 (2011), and citing Stephanos Bibas, White‐Collar Plea Bargaining and Sentencing

After Booker, 47 WM. & MARY L. REV. 721, 749 (2005)). That rationale is eminently

12

reasonable. Cf. Cavera,

(“Where the profits to be made from

violating a law are higher, the penalty needs to be correspondingly higher to

achieve the same amount of deterrence.”); United States v. Heffernan,

(7th Cir. 1994) (“Considerations of (general) deterrence argue for punishing

more heavily those offenses that either are lucrative or are difficult to detect and

punish, since both attributes go to increase the expected benefits of a crime and

hence the punishment required to deter it.”).

Zukerman also summarily argues that it is “obvious” his fine is not

necessary for purposes of specific deterrence in light of his prison term and the

“pain and humiliation his prosecution has caused.” Def. Br. 43‐44. Although

there can be little doubt Zukerman has suffered, we “must give due deference to

the district court’s decision” that specific deterrence justified an upward variance

in light of Zukerman’s long‐running tax evasion scheme, Gall,

. “It

was clear” to the district court “that simply being caught did not deter”

Zukerman, as his “criminal activities had only grown in size and scope” since

they first began at the turn of the century. Supp. Mem. at 11. Given that an earlier

“$233,000 slap‐on‐the‐wrist . . . proved useless in dissuading [Zukerman] from

evading his taxes” thereafter, the district court was entitled conclude that a

13

Guidelines‐range fine of up to $250,000 would be similarly inadequate, such that

“[a] significant penalty was required.”

at 11‐12. In light of Zukerman’s

enormous resources, the district court properly determined that a more onerous

fine was needed in order to deter future illegal conduct. See infra at 17‐19.2

Fourth, the district court recognized that there was some risk of an

unwarranted sentencing disparity, but it “assigned less weight than it might

typically have” to this factor because it found “few, if any, defendants” who

were similarly situated. Id. at 12. Although Zukerman’s fine is certainly an outlier

as compared to the fines typically imposed in tax cases, his arguments based on

aggregated sentencing data and vague summaries of other cases are

unconvincing. The relevant question is not simply whether there are disparities,

but whether there are “unwarranted sentence disparities” as between Zukerman

and others “with similar records who have been found guilty of similar

2 The district court noted that a longer incarceral term was not necessary in order to specifically deter Zukerman at his sentencing hearing, but it referenced the totality of his experience with the criminal justice system—including the fine imposed upon him—as necessary to achieving that end. See Special App. 38 (“I do not think that there is a need for a term of imprisonment at the higher end of the guidelines range in order to achieve the goal of specific deterrence. I have confidence that this experience

throughout this case has gotten that message across loud and clear.”).

14 conduct,”

(a)(6). “The point merits little discussion” because

Zukerman “failed to provide sufficient information to compel the district court to

find that these [other defendants] were so similarly situated to himself that any

disparity in sentence would be unwarranted.” Broxmeyer, 699 F.3d at 296‐97; see

also United States v. Irving,

(2d Cir. 2009) (“The district court was

not required to consult . . . statistics. Averages of sentences that provide no

details underlying the sentences are unreliable to determine unwarranted

disparity because they do not reflect the enhancements or adjustments for the

aggravating or mitigating factors that distinguish individual cases.” (internal

quotation marks and alteration omitted)).3

3 The only tax offender Zukerman discusses with specificity is Robert Pfaff, who was sentenced to 97 months’ imprisonment and fined $3 million. As explained by the district court, however, there are myriad distinctions between Zukerman and Pfaff: (1) Pfaff designed and implemented fraudulent tax shelters on behalf of others but was not a direct beneficiary of the tax loss he caused, whereas here the tax loss directly benefitted Zukerman and his family; (2) Pfaff was convicted alongside two co‐ defendants, whereas Zukerman was the sole director of the scheme at issue; (3) Pfaff had no history of uncharged criminal conduct, whereas Zukerman had been dodging taxes for year prior to the conduct for which he was ultimately indicted; and (4) Pfaff had lost his entire net worth by time of his sentencing, whereas Zukerman still enjoyed a $35 million net worth. But even assuming arguendo that Pfaff and Zukerman were similarly situated, the disparity in their sentences points in both directions: Pfaff’s fine may have been smaller, but he was also sentenced to an additional 27 months’ imprisonment as compared to Zukerman. As a result, we cannot say whose sentence

was more lenient. Cf. United States v. Rinaldi,

(7th Cir. 2006) (affirming

15 Fifth, the district court “looked to

(d), which permits a

court to set a fine that is ‘twice the gross loss.’” Supp. Mem. at 14. In light of the

estimated $45 million tax loss caused by Zukerman, that would allow for a fine

far larger than that which was actually imposed. The district court also

considered that Zukerman’s agreed‐upon restitution was $7.5 million lower than

the estimated tax loss and that several million dollars’ worth of interest would

have accrued in the years between the beginning of Zukerman’s charged

criminal conduct and his restitution payment. Taking these disparities into

account, the district court concluded that a $10 million fine was “sufficient, but

no greater than necessary,” to comply with the statutorily enumerated factors to

be considered in imposing a sentence.

at 15 (quoting

(a)). We

infer from the district court’s choice of language—i.e., that it “looked to” this

factor rather than “putting significant weight” on it—that this was a relatively

minor aspect of the district court’s analysis. Cf. Novella v. Westchester Cnty.,

(2d Cir. 2011) (“the presumption of consistent usage and

sentence where sentencing judge “chose not to increase [defendant’s] term of imprisonment, but opted instead to increase the fine; punishing the perpetrator with a

correlate of his own crime”).

16 meaningful variation, and the textual cannon of expressio unius est exclusio

alterius” suggest that “the presence of [a phrase] applicable to one [factor] makes

clear that the [phrase’s] omission” elsewhere “was deliberate”).

Although Zukerman now asserts that the district court erred in

considering the gap between his restitution and the estimated tax loss, as well as

the absence of interest in calculating the tax loss, he cites no authority for the

proposition that the district court could not take these factors into account.

Indeed, these seem pertinent considerations in ensuring that Zukerman would

not ultimately profit from his tax evasion. See

(a)(5) (“In

determining whether to impose a fine, and the amount, . . . the court shall

consider . . . the need to deprive the defendant of illegally obtained gains from

the offense . . . .”). Regardless, we need not definitively rule on the propriety of

these considerations because they were referenced in Zukerman’s Pre‐Sentence

Report, the district court’s adoption of which was unopposed by Zukerman.

Sixth, the district court “accorded significant weight to [Zukerman’s]

income and financial resources, as well as the limited burden of a $10 million

fine.” Supp. Mem. at 15. Zukerman contends that he is being unfairly punished

because of his wealth, but

(a) mandates that “[i]n determining

17

whether to impose a fine,” a sentencing judge “shall consider . . . the defendant’s

income, earning capacity, and financial resources,” as well as “the burden that

the fine will impose upon the defendant.” That is in accord with the Sentencing

Guidelines’ instruction that sentencing judges “shall consider,” among other

factors, “the defendant’s ability to pay the fine” and “the burden that the fine

places on the defendant and his dependents.” U.S.S.G. § 5E1.2(d)(2)‐(3).

It stands to reason that a defendant’s wealth is relevant in determining

whether a particular fine will deter illegal conduct. Zukerman implies that

sentencing judges should consider only whether a defendant is unable to pay a

given fine, but nothing in the text or history of the Guidelines, let alone common

sense, suggests that this is meant to be a one‐way ratchet. A fine can only be an

effective deterrent if it is painful to pay, and whether a given dollar amount hurts

to cough up depends upon the wealth of the person paying it. Indeed, as noted

above, a previous “$233,000 slap‐on‐the‐wrist” did not deter Zukerman, with his

extraordinary resources, from subsequently evading his taxes once again. Supp.

Mem. at 11. We therefore join our sister Circuits in holding that a defendant’s

wealth and earning capacity are pertinent considerations in assessing an

appropriate fine. See United States v. Teel,

(5th Cir. 2012) (“[T]he

18

court properly utilized its discretion to vary from the Guidelines by taking into

account [the defendant’s] financial resources when determining the

appropriately punitive fine in the first instance.”); United States v. Koestner,

(10th Cir. 2010) (“[T]he amount of the fine was reasonably related

. . . to Koestner’s ability to pay a fine . . . .”) United States v. Blackwell,

(6th Cir. 2006) (“[T]he district court committed no error . . . in considering

Defendant’s ability to pay.”); see also United States v. Adams,

(9th Cir. 2007) (“Socioeconomic status is different than financial resources. The

former has no place in sentencing, but the latter is required by statute.” (internal

citations omitted)).4

4 We see no inconsistency between our holding and United States v. Mancilla‐Mendez,

(5th Cir. 2006), or United States v. Graham,

(4th Cir. 1991), on which Zukerman relies. “Those cases deal with challenges to upward departures, not variances.” Teel,

. The former “‘is a term of art under the Guidelines and refers only to non‐Guidelines sentences imposed under the framework set out in the Guidelines,’” whereas the latter “refers to a non‐Guidelines sentence outside the Guidelines framework.” Pepper v. United States,

, 498 n.12 (2011) (quoting Irizarry v. United States,

(2008)). “The pertinent question in a departure case is whether ‘there exists an aggravating or mitigating circumstance of a kind . . . not adequately taken into consideration by the Sentencing Commission in formulating the guidelines that should result in a sentence different from that described.’” Teel,

(quoting

(b)). In contrast, we address “variances from Guidelines ranges that a district court may find justified under the sentencing factors set forth in

(a).” Irizarry,

. The district

court properly recognized that distinction, as it “d[id] not find any grounds warranting

19 Lastly, the district court “put substantial weight” on the payment of

restitution by “corporate entities,” as a result of which “only the fine would be

paid from [Zukerman’s] own pocket.” Supp. Mem. at 15. Zukerman responds

that restitution was properly paid by MEZCO because it was MEZCO’s tax

evasion that caused most of the tax losses at issue and, in any event, payments

made by MEZCO are tantamount to payments made by him. The latter point

appears to be somewhat disingenuous, as elsewhere Zukerman takes the

position that he no longer has any interest in MEZCO for purposes of asserting

that the district court overestimated his net worth. Zukerman cannot have it both

ways: if he no longer owns MEZCO and believes that its value is not attributable

to him, it follows that he should not be credited with MEZCO’s restitution

payments.5

a departure under the guidelines,” but nevertheless found “a variance pursuant to

(a) . . . appropriate” in this case. Special App. 6, 38. 5 Zukerman informed the district court that he transferred his interest in MEZCO to his

wife as a result of the publicity surrounding his prosecution. He subsequently argued that “Mrs. Zukerman’s assets are not relevant to assessing her husband’s ability to pay,” Def. Br. 18‐19 n.3, and that assets “belong[ing] exclusively to Zukerman’s wife” could

not “be fairly considered in assessing Zukerman’s ability to pay,” Def. Reply Br. 16.

20 Regardless of MEZCO’s current ownership, however, a more fundamental

principle remains: “Restitution is an effective rehabilitative penalty because it

forces the defendant to confront, in concrete terms, the harm his actions have

caused.” Kelly v. Robinson,

, 49 n.10 (1986); see also Paroline v. United

States,

(2014) (“The primary goal of restitution is remedial or

compensatory, but it also serves punitive purposes.” (internal citation omitted)).

The district court was charged with ensuring that Zukerman’s fine should be

“punitive” when “taken together with other sanctions imposed.” U.S.S.G.

§ 5E1.2(d). To the extent that the corporate payment of restitution reduced the

degree to which restitution personally punished Zukerman, which seems likely

given that it appears he owned only a 50% interest in MEZCO even prior to

transferring those interests to his wife, it was well within the district court’s

discretion to counteract that effect by increasing the fine it imposed on him. In

doing so, it “further[ed] the traditional sentencing goals of rehabilitation and

deterrence, by forcing [Zukerman] to directly witness the effect[] of [his] crimes.”

In re Silverman,

(9th Cir. 2010); cf. Kokesh v. S.E.C.,

(2017) (“[A] pecuniary sanction operates as a penalty only if it is

21

sought ‘for the purpose of punishment, and to deter others from offending in like

manner’ . . . .” (quoting Huntington v. Attrill,

(1892))).

Focusing on each facet of the district court’s reasoning individually, rather

than their totality, is to miss the forest for the trees. The district court concluded

that Zukerman, a very wealthy man who has repeatedly and brazenly committed

sophisticated tax fraud—a rarely caught and more rarely punished offense that

undercuts the functioning of state and federal governments—ought to pay a fine

hefty enough to take any financial benefit out of his crimes and to give pause to

others who might be tempted to commit similar crimes. The district court further

concluded that the Guidelines range did not encompass a fine necessary to

accomplish those ends. Instead, the district court calculated the size of the fine

based, in part, on an estimate of the tax loss Zukerman caused less the amount of

restitution he had agreed to pay. Zukerman’s fine thus “resulted from the

reasoned exercise of discretion.” Cavera,

. Under the “circumspect

form of review” we apply when the substance of a sentence is challenged,

we

need not find a district court’s reasoning compelling in order to affirm, so long as

“the sentence was reasonable,” Gall,

. Because we find that it was,

we see no reason to overturn Zukerman’s sentence in any respect.

22

For the foregoing reasons, we AFFIRM the judgment of the district court

and DENY Zukerman’s motion to stay his sentence pending this appeal as moot.

We have considered all of the defendant’s arguments and find in them no basis

for vacatur.

23