Criminal Justice Insider
An in-depth review and analysis and of emerging topics in both federal and New York State criminal law. This blog explores developments in substantive and procedural criminal law, providing practical insights to the latest case law and statutory changes.
Partial Silver Linings – The Second Circuit’s Holding in United States v. Silver Explained
On January 21, 2020, the Court of Appeals reversed three of seven counts of conviction of former New York State Assembly Speaker Sheldon Silver. This reversal is yet another twist on the legal rollercoaster that is the case of United States v. Silver, No. 18-2380, 2020 WL 284426 (2d Cir. Jan. 21, 2020).
Silver was first convicted in 2015 of accepting illegal bribes in violation of the mail and wire fraud statutes, 18 U.S.C. Sections 1341, 1343, and the Hobbs Act, 18 U.S.C. Section 1951, and of laundering the earnings from those kickbacks, in violation of 18 U.S.C. Section 1957. These charges related to two different schemes perpetrated by Silver while in office. The first was the “Mesothelioma Scheme” wherein Silver steered mesothelioma patients to a particular medical clinic and directed $500,000 in state grant funds to this clinic. The clinic subsequently referred these patients to Silver’s law firm where Silver earned millions of dollars in referral fees. The second scheme was the “Tax Certiorari Scheme” in which Silver steered real estate developers, many of whom were doing business with the state, to a law firm to seek real estate tax reductions. The law firm then paid referral fees to Silver.
It seems Silver’s proverbial goose was cooked, if not for the divine intervention of the Supreme Court. In 2016, the Supreme Court handed down its opinion in McDonnell v. United States, 136 S. Ct. 2355, 2371-72 (2016). Bribery requires the receipt of something of value in exchange for being influenced in the performance of an “official act.” In McDonnell, the Supreme Court reviewed precisely what conduct constituted an “official act.” The Supreme Court substantially narrowed the definition of “official act” to require the formal exercise of governmental authority. To qualify as an "official act," the public official must make a decision to take an action or agree to do so.
Armed with this new guidance, the Second Circuit reversed Silver’s conviction on all counts in July of 2017, finding that the District Court’s jury instruction failed to apply the new narrower definition of “official act” as set forth in McDonnell.
In May of 2018, following a retrial, the jury again convicted Silver on all counts.
Silver again appealed from the trial court setting forth two primary arguments. First, Silver argued that his fraud and extortion convictions should be reversed. Silver was convicted, in part, of “honest services fraud”. “Honest services fraud” is a theory of fraud wherein the defendant is alleged to have deprived the public of honest services through their receipt of an undisclosed payment or bribe. Silver argued on appeal that “honest services fraud” required evidence of an “agreement,” i.e.,a meeting of the minds between the alleged bribe payor and the receiver. The court rejected this argument finding instead that the official only needed to manifest a willingness to take payment for an official action and understand at the time of acceptance of the payment the particular matter to be influenced.
More saliently, Silver argued that the “as opportunities arise” theory of bribery was eliminated by McDonnell. The “as opportunities arise” theory of bribery is an apt name for the concept that a public official takes a bribe with the idea that he or she will assist the payor as relevant opportunities are presented, rather than influencing a particular and identifiable future decision. Silver argued that the holding in McDonnell eviscerated this entire theory of bribery as the prosecutors had not and could identify with sufficient particularity the specific acts he was to perform in return for accepting the bribe.
Although the Second Circuit disagreed with Silver’s interpretation of McDonnell insofar as he argued that the identification of a particular act of influence was required at the time the official accepts payment or makes a promise, the Court still decided that the government failed to meet its burden on the “as opportunities arise” theory. The Court stated that McDonnell did in fact require that a particular question or matter to be influenced be generally understood by the official at the time he accepted payment. The Second Circuit noted that an open-ended promise to undertake acts for the “benefit [of] the payor, without more . . . amounts to no promise at all.”
In its instruction to the jury during the retrial, the trial court instructed the jury that it could convict Silver of fraud with regard to the Mesothelioma Scheme only if it found that Silver believed that the payor expected him to take official action to benefit the payor as specific opportunities arose. The Second Circuit found this instruction to be improper. The court did not inform the jury that the government was required to identify the specific matter to be influenced or that Silver needed to understand what particular matter was to be influenced at the time he accepted the bribe.
The Second Circuit sustained all charges relating to the Tax Certiorari scheme and remanded the matter to the trial court for resentencing. Whether Silver will ultimately serve time in prison remains to be seen.
The decision in Silver significantly narrowed the “as opportunities arise” theory of liability in cases involving allegations of bribery. Though narrowed, Judge Lohier noted in a concurring opinion that the decision was not intended to dispose of the theory entirely and even went as far as to say, “as opportunities arise bribery remains alive and well.” While this ruling tallies a victory for Silver on the unique facts of his case, it is unclear what impact this decision will have on future federal cases involving the “as opportunities arise” theory of bribery. We will continue to monitor the legal impact of the court’s most recent holding in U.S. v. Silver.
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02.04.2020 | PRACTICE AREAS: Criminal Defense