United States District Court, D. Connecticut
ORDER RE MOTION TO STAY
Jeffrey Alker Meyer, United States District Judge
Eddie Chan is at the mercy of a compulsive gambling disorder.
It led him to steal hundreds of thousands of dollars over the
course of three years from a company for whom he worked as
chief financial officer. He did not report his stolen money
to the Internal Revenue Service, and he pleaded guilty for
failing to do so.
sentencing Chan convinced me that his gambling disorder was a
mitigating condition that warranted a sentence of probation
rather than a Sentencing Guidelines range of imprisonment.
Chan is happy about that. But he is not happy that I also
concluded his employers should know about his conviction
before they entrust him with a finance job. I decided to
require notification to his employers because I took Chan and
his counsel at their word that Chan's decades-long
gambling disorder was “pathological, ” that it
was “insidious, ” that it involved self-delusion
about taking other people's money, and that it was
“always lurking” and subject to relapse
notwithstanding his significant efforts at rehabilitation.
now appealing this employer notification condition. He thinks
he should be free to work with his employers' finances
while keeping them in the dark about his conviction. And now
by moving for a stay of this condition pending appeal he
hopes to delay his employers' learning the truth for
however long it takes for his appeal to play out.
don't agree. In light of all the factors that govern a
court's authority to enter a stay pending appeal, I
conclude that Chan has not shown a likelihood of success on
the merits, that he has not shown that he will suffer
irreparable harm, and that he has not shown that the public
interest weighs in his favor. Accordingly, I will deny
Chan's motion to stay execution of the employer
notification condition pending the outcome of his appeal,
although I will temporarily extend the stay that is now in
place in order to allow Chan to promptly seek a stay pending
appeal from the court of appeals.
October 26, 2017, Chan appeared before the Court to enter a
plea of guilty to making and subscribing a false tax return,
in violation of 26 U.S.C. § 7206(1). His guilty plea
arose from his failure to report on his federal tax returns
hundreds of thousands of dollars that he stole from a fine
arts company in New York City, where he had been employed as
a bookkeeper and chief financial officer. All in all, Chan
embezzled $386, 362 from the art firm's accounts
beginning in 2013, continuing throughout 2014, and into 2015.
to Chan, he stole money to feed a pathological gambling
disorder that has plagued him for most of his life. Now
almost 60 years old, Chan first got hooked on gambling as a
teenager when he started betting on the horses. He dropped
out of high school to start working but “[a]s I started
working and making more money, my gambling got heavier,
” and “[o]ne time I was gambling and was losing
$1000 a day, ” and “I couldn't find money
fast enough to get to the next day.” PSR ¶ 46.
went on to wreck Chan's first marriage in 1991. According
to Chan, “[i]t destroyed my first marriage, ” and
“I had issues back then, ” and he “went and
got help and was good for 5 to 6 years.” Ibid.
But “[t]hen I got remarried and got complacent, ”
and once again “[a] little fun turned into full time,
full blown addiction.” Ibid.
gambling addiction raged on for the next 15 years or so until
he got caught stealing from his employer and faced the
criminal investigation and prosecution in this case. Chan not
only hid his gambling and thieving from his employer but he
hid all that from his family as well. According to Chan, his
family “always knew he gambled, but they did not know
the extent of his addiction until he pled guilty for the
instant offense.” PSR ¶ 46.
started gambling treatment again in November 2015. Yet
notwithstanding his participation in weekly treatment
sessions, he continued to gamble until before Thanksgiving
employer fired him from his job after learning that he had
been stealing money. Prior to pleading guilty in this case,
Chan secured three new financial accounting jobs, including
one full-time job with a company in New Canaan, Connecticut,
and two part-time jobs with companies in Stamford,
Connecticut. He did not tell his full-time employer about his
guilty plea and asked the probation officer who prepared his
presentence report not to do so.
described to the probation officer who wrote his presentence
report about how gambling had taken over his life: “The
reason that it got out of control is because I was helpless
and powerless over it. Gambling is such an insidious disease,
no different than drugs or alcohol. The only difference is
they need it for their physical issues, [while] for gamblers
it's a mental issue.” PSR ¶ 44. Chan also
wrote a letter to the Court for sentencing purposes
describing his life-long battle against gambling and noting
in part that he had relapsed because “this insidious
disease, compulsive gambling, is always lurking.” Doc.
#21-1 at 3.
sentencing, Chan faced a sentencing guideline range of
between 12 to 18 months of imprisonment. But he argued for a
downward departure on grounds of what his counsel described
as no less than a “mental illness” of
“pathological gambling.” Doc. #45 at 7; Doc. #21
at 9-10 (requesting “diminished capacity”
departure pursuant to USSG § 5K2.13). Among other
documents, Chan submitted a gambling “fact sheet”
attesting that “[u]p to half of persons with severe
gambling disorder commit illegal acts to support their
gambling” and that “[e]mbezzlement is rare, but
gambling-related fraud and embezzlement cases are growing
especially in regions close to casinos.” Doc. #21-7 at
own gambling treatment provider attested to the criminal
dangers that accompany severe gambling disorders:
“[T]his disease is so severe, that illegal acts such as
writing bad checks and stealing or ‘borrowing'
money, or goods from friends or relatives, with the intent of
returning these items is very common, ” and
“[e]mbezzlement cases, in fact, are growing within this
population.” Doc. #21-6 at 2.
counsel insisted at the sentencing hearing that Chan had
taken his employer's money believing that he would strike
it rich and pay it all back. I asked counsel “[s]o when
you say he believed he was going to pay it back, was he
essentially deluded about that by his sickness?”
Counsel replied: “I believe so, by the sickness,
” and he went on to describe the views of Chan's
treatment provider that “in a lot of people she treats
[for gambling disorder] that, you know, they have deluded
themselves into thinking that these are loans or I just am
this close to winning and everything is going to be
fine.” Doc. #45 at 8-9.
counsel also acknowledged that Chan had lied to law
enforcement agents when they initially questioned him about
his diversion of funds (calling the large amount of monies
deposited to his bank account a “bonus”).
Although he soon reached out to the agents to set the record
straight, he nonetheless continued to gamble even after
knowing that he was under investigation. See Doc.
#25 at 2-3, 7. During the course of the Government's
investigation, the Government was assured by Chan's
“gambling counselor” that Chan “had ceased
gambling and had excluded himself from all gambling
operations in the state, ” only for the Government to
learn later on its own “that was not the case, ”
and the Government “verified that his activity at
off-track-betting parlors had continued and continued
consistently.” Doc. #45 at 27.
explain the fact that Chan had kept on gambling even after
being confronted by law enforcement authorities, Chan's
counsel observed that “long-term addiction …
doesn't go away very easily.” Id. at 10.
He cited again the views of the treatment provider that
“[w]hat she would see in her patients and indeed with
Mr. Chan is that there's a resistance to thinking that
this is a problem, resistance to thinking that they need to
stop.” Id. at 10-11.
matter the risk of relapse, Chan's counsel stated at
sentencing that “our efforts at rehabilitation
don't have to be perfect, that what can happen is that we
have a lot of false starts, but really we're on an upward
trajectory now where Mr. Chan has excluded himself from all
of the gaming establishments in Connecticut and in New
York.” Id. at 11. When I asked about whether
Chan engages in internet gambling, Chan's counsel had no
reply: “I don't know, your Honor, off the top of my
head whether that includes internet gaming.”
sentencing I described at length to Chan's counsel my
concerns about the risk that Chan's gambling addiction
posed to any current or future employers in the event that
they unknowingly entrusted him with access to their assets
So you have somebody here who, by your description, is a
pathological gambler, doesn't go away easily, it's
been a lifelong issue for him. Although he is not-does not
have criminal history, he's not a criminal recidivist, he
is a gambling recidivist, right, because he's had times,
even by his own acknowledgement and his own letter to the
Court, where he addresses issues and then relapses.
He's very secretive, right, from what we know. His wife
didn't know about, according to the Presentence Report,
the extent of what he was doing even just until about the
time that he pled guilty last October.
When you combine all of those and a track record of having
taken hundreds of thousands of dollars from an employer here,
I can't see how it would be consistent with serving the
purposes of protecting the public not to require notification
to employers, any employers who trust him in some manner with
financial activities of some sort in which he might have
access to financial institutional assets or access to
confidential financial information, essentially access to
financial assets or ...