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Media Alerts - USA v. Joseph Ferriero - Third Circuit
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August 10, 2017
  USA v. Joseph Ferriero - Third Circuit
Headline: Integrity-undermining intent is not required under the New Jersey bribery statute; New Jersey bribery statute is constitutional

Area of Law: RICO; Wire Fraud

Issue(s) Presented: Does the New Jersey bribery statute require integrity-undermining intent? Is the New Jersey bribery statute unconstitutionally vague? Does the Supreme Court decision in McDonnell impact the outcome of this case?

Brief Summary:

Joseph Ferriero was the chairman of the Bergen County Democratic Organization. He was involved in nominating Democrats in local elections and helped raise money for the Democratic Party. He also helped to connect vendors with elected Democrats. Ferriero made a deal with John Carrino, a vendor, to recommend his firm, C3, to local officials. In return, Ferriero would receive commissions on the contracts that hired the firm. Ultimately, Ferriero was convicted for violations of the Travel Act, RICO, and the federal wire fraud statute. The Third Circuit affirmed these convictions, finding the Travel Act and RICO did not require proof of integrity-undermining intent for an individual to be convicted. The Court further ruled that party officials were intended to be included under the Travel Act and Rico, that the New Jersey bribery statute was constitutional, and that the definition of "official act" determined in McDonnell v. United States did not impact the outcome of this case.

Extended Summary:

Joseph Ferriero was the chairman of the Bergen County Democratic Organization. As party chair, Ferriero was responsible for raising money for the Democratic Party, helping elect candidates, and connecting vendors with elected Democrats. Ferriero entered into a contract with John Carrino, who owned C3, a corporation that provided notification systems for local governments. Ferriero and Carrino agreed that Ferriero would recommend C3 to local officials and in return, Ferriero would receive commissions when Carrino's firm was hired. None of the local officials were aware of the agreement between Ferriero and Carrino. At least four towns hired C3 and Ferriero received at least $11,875 in commissions. Cliffside Park was one of the towns that Ferriero approached about hiring Carrino's firm. However, the mayor was concerned about Ferriero's role and sent an email inquiring into the owners of the corporation. Carrino responded to the email with no mention of Ferriero and Cliffside Park ultimately retained Carrino's services. Ferriero was indicted for violations of RICO, the Travel Act, and wire fraud statutes. Ferriero moved for acquittal, which the court denied. He was sentenced to prison and ordered to forfeit any profits that he made.

The Third Circuit affirmed Ferriero's conviction under the Travel Act and RICO, finding that the government did not need to demonstrate that Ferriero had the intent to undermine the integrity of a public action. The Court noted that the current New Jersey bribery statute should be applied to public officials or voters and "prohibits bribing those persons to secure a particular decision, opinion, recommendation, or vote." Ferriero's argument that the previous statutory language of integrity-undermining intent should be read into the current statute is not supported by any previous court decisions.

The Third Circuit affirmed that the District Court appropriately instructed the jury regarding the nexus element of the RICO charge. In order for the nexus element to be satisfied, there must be a strong connection between the defendant, his/her involvement in the enterprise's affairs, and the pattern of racketeering. The District Court correctly interpreted this statute and instructed the jury that Ferriero's participation in the enterprise's affairs by means of, by consequence of, by reason of, by agency of, or by instrumentality of a pattern of racketeering activity is sufficient to satisfy the nexus element.

The Court affirmed that a rational juror could conclude that the bribery scheme was a means by which Ferriero participated in the conduct of business. A rational juror could have determined that the BCDO's affairs extended further than the official duties. The bribery scheme did not have to occur in the official capacity because Ferriero's participation in the conduct of the party's affairs was sufficient. The Court further noted that there was sufficient evidence to demonstrate that Ferriero participated in the conduct of BCDO's affairs by means of a pattern of bribery.

The Third Circuit concluded that there was sufficient evidence for a rational juror to determine that the representation made in Carrino's email was materially false and fraudulent. Ferriero argued that the failure to specify his involvement in the contract was an omission that should not be considered a false representation because he did not owe a duty to disclose. The Court noted that most cases that use that standard have involved a situation where the defendant did not make an actual representation and instead, remained silent. Carrino's email involves an actual representation that was made to Cliffside Park and therefore, a jury is capable of determining whether the representation was false or fraudulent. The Court determined that there was sufficient evidence for a rational juror to make this determination.

The Third Circuit disagreed with Ferriero's argument that Congress did not intend for party officials to be punishable for bribery under RICO or the Travel Act. The Court found that the definition of bribery found in the Travel Act and RICO should be read broadly to include all relationships that involve a special trust, which should be protected from the corrupt influence of bribery. Party officials fall into this category of occupying a position of special trust and fall within the individuals who are punishable under RICO and the Travel Act.

The Court also concluded that New Jersey's bribery statute is not unconstitutionally vague or overbroad. The statute offers specificity in describing the acceptance of a benefit that would be considered bribery. Further, the statute gives public officials and party officials a reasonable opportunity to understand what conduct is prohibited. In addition, the Court determined that there are no applications of the bribery law that can be deemed unconstitutional. This statute does not punish First Amendment activity because it only punishes corrupt agreements that are not protected under the First Amendment. The Court concluded that there was no sufficient basis to deem the bribery statute as unconstitutional.

Finally, the Third Circuit concluded that the Supreme Court decision in McDonnell v. United States did not have an effect on the outcome of this case. In McDonnell, the Supreme Court held that setting up a meeting or talking to another official were not sufficient to be considered "official acts" under the federal bribery statute. The Supreme Court rejected a broad interpretation of this statute that would encompass almost all activities of a public official. The Third Circuit determined that statute interpretation used in McDonnell should not be applied to the New Jersey bribery statute in this case because the New Jersey statute already uses a narrow and specific interpretation.

The Third Circuit affirmed the judgments of conviction against Ferriero.

The full opinion can be found at http://www2.ca3.uscourts.gov/opinarch/154064p.pdf

Panel: Hardiman and Scirica, Circuit Judges; Rosenthal, District Judge

Argument Date: November 1, 2016

Date of Issued Opinion: August 4, 2017

Docket Number: No. 15-4064

Decided: Affirmed

Case Alert Author: Kristina Flatley

Counsel: Peter Goldberger, Counsel for Appellant; Mark Coyne and Bruce Keller, Counsel for Appellee

Author of Opinion: Circuit Judge Scirica

Circuit: Third Circuit

Case Alert Circuit Supervisor: Professor Susan L. DeJarnatt

    Posted By: Susan DeJarnatt @ 08/10/2017 11:43 AM     3rd Circuit  

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