Here in Atlanta, the local federal Court of Appeals just affirmed a conviction in a mail fraud and bribery
white collar case out of Jacksonville, Florida. The case is but the latest saga in the long-running debate over the contours of "honest services fraud", the species of fraud so often used by federal prosecutors when they go after what they perceive to be "local corruption." In a 2-1 decision, the majority held that the Defendant's convictions should be affirmed, even though one of the two judges in the majority had real problems upholding the lower court's rulings. Judge Hill issued a blistering dissent, perhaps foreshadowing a more full review by the entire court. The case is US. v. Nelson, and can be found
here.
Mr. Nelson was the chairman of the board of Jaxport, the entity that basically oversaw the port authority in Jacksonville. The board members worked part-time, were not paid, and were prohibited from voting on any matter in which they had a financial interest.
Mr. Nelson lobbied on behalf of a company named SSI, received payments from SSI, and therefore did not vote on any SSI-related matters that came before the JaxPort board. He did urge staff members to help SSI on certain payment issues, but as noted by the dissent, "The evidence was that no economic harm befell JaxPort as the result of Nelson’s lobbying for SSI". At one point he got an opinion from the City's chief legal officer that he would have no problems in continuing his lobbying on behalf of SSI so long as he did not vote on anything that affected that company. His biggest problem was that he and SSI concealed the payments he received, the money was routed through a couple of other intermediary companies before it got to Nelson. The FBI got wind of the relationship between Nelson and SSI, they tapped their phones, and one morning agents showed up at Mr. Nelson's house for a "talk." He told them that once they arrived on his doorstep he then knew the payments were wrong, but did not say he previously was aware of the wrongfulness of his conduct.
Despite all this, the feds indicted Mr. Nelson for "honest services" mail fraud and federal services bribery. Many of us know the history of the honest services theory, a method of criminalizing what is basically the violation of a fiduciary duty. In the famous
Skilling case, the U.S. Supreme Court restricted the honest services theory to "core" cases involving bribery and kickbacks, and seemed to hold that concealing one's financial relationship is not the sort of conduct which can be prosecuted under these laws.
The majority in Nelson used a round-about way of deciding that he was guilty. Although he could lobby on behalf of SSI, and although he did abstain from voting on SSI business, the concealment of his payments from SSI meant that he had the intention to accept a bribe. Judge Hill's dissent seems to be far more on point: "[C]oncealment alone is legally insufficient to prove Nelson had corrupt intent to be bribed. If Nelson had no duty to disclose his financial relationship with SSI, as Skilling says, and the payments were permitted, as he was told, then the jury was not permitted to infer a corrupt intent to be bribed by his concealment. The government’s theory was that – although concealment is not a crime – it was evidence of corrupt intent and this mens rea turned lawful lobbying into unlawful bribery. I disagree. Bribery requires a corrupt agreement to perform an unlawful official act – an actus reus. In this case, Nelson agreed to perform a lawful act. The lobbying was permitted. An agreement to perform a lawful act is called a contract, not bribery."
The case also involved some serious problems with the jury instructions. Again, however, the trial lawyers failed to object, letting the appellate court use the "plain error" standard way of gutting the argument. As I have noted many times before, none of us is perfect, as trial lawyers we all make mistakes, but we also all need to remember to try and object as often as possible to any potential problem with jury instructions.
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Original Article03/14/2013
The start of the Third Circuit panel's lengthy opinion today in US v. Reynolds, No. 08-4747 (3d Cir. Mar. 14, 2013) (PDF available here), explains the current mess that is certain federal sex offender registration laws better than I could. Here goes (with footnotes removed):This case returns to us after the Supreme Court’s review in Reynolds v. United States, 132 S. Ct. 975 (2012). Remand requires that we reach the merits of Reynolds’s claim that the regulatory rule upon which his indictment was based was promulgated in violation of the Administrative Procedure Act (“APA”). This claim gives rise to three questions:(1) What is the appropriate standard of review of an agency’s assertion of good cause in waiving the APA’s notice and comment requirements?
(2) Did the Attorney General have good cause to waive these requirements in promulgating a rule governing the retroactivity of the Sex Offender and Registration Notification Act’s (“SORNA”) registration requirements?
(3) If the Attorney General lacked good cause to waive the requirements, was Reynolds prejudiced by the failure to comply with the APA’s notice and comment requirements?
The courts of appeals are divided on each of these questions. On the first question, the Fifth and Eleventh Circuits have determined that the arbitrary and capricious standard is the appropriate standard for reviewing the Attorney General’s actions, the Fourth and Sixth Circuits have not stated a standard but appear to use de novo review, and the Ninth Circuit has explicitly avoided the question. On the second question, the Fourth and Eleventh Circuits have held that the Attorney General had good cause to waive notice and comment, while the Fifth, Sixth, and Ninth Circuits have held that he did not. On the final question, the Fifth Circuit has held that the Attorney General’s lack of good cause does not prejudice defendants, while the Sixth Circuit has held that it is prejudicial. We conclude that we need not decide the appropriate standard of review today because the Attorney General’s assertion of good cause cannot withstand review even under the most deferential standard available. We also conclude that the Attorney General’s lack of good cause is prejudicial to Reynolds. Accordingly, we will vacate Reynolds’ conviction.© 2006-2013 | Sex Offender Issues
Tempe Police warn drivers to plan ahead.
Tempe Police Department announced this week that it will be working in cooperation with Scottsdale Police, Maricopa County Sheriff's Department, and the AZ Governor's Office of Highway Safety in a joint DUI Task Enforcement. It is scheduled to take place surrounding the 2013 St. Patrick's Day festivities, beginning Sunday March 17, 2013.
A command post will be set up at the Tempe Fire Training Facility located 1340 E. University Drive in Tempe AZ. The major cross streets are University Drive and Dorsey Lane, between Rural Road and McClintock Drive. Mobile Patrol units will increase presence throughout Scottsdale, and Tempe neighborhoods and city streets.
The increased enforcement is being funded as part of generous $7.5 million grant to police agencies throughout Arizona, by the Governor's Office of Highway Safety. The Governor announced last month that she is focusing on joint efforts to enforce, educate, and engineer safer roads throughout the state, and reduce fatal and serious accidents caused by impaired driving.
A majority of the funds are being allocated for DUI enforcement, patrols and 
