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Criminal Law Section
2011 Crystal Drive,
Ste. 400
Arlington, VA 22202
Officers
Chair
Kevin McGrath
Seyfarth Shaw LLP
Boston, MA
617-946-4893
kmcgrath@seyfarth.com
Vice-Chair
Michael Sklaire
Williams Mullen
Tysons Corner, VA
703-760-5200 msklaire@williamsmullen.com
Secretary
Christopher Schmeisser
Department of Justice
Boston, MA
Christopher.Schmeisser@usdoj.gov
Treasurer
Kathy Massing
Fowler White Boggs Banker P.A. Tampa,
FL
813-222-2077
kathy.massing@fowlerwhite.com
Immediate Past Chair
Steve Goldsobel
Law Office of Steve Goldsobel
Los Angeles, CA
310-552-4848
steve@sgoldsobel.com
CLE Coordinator/Newsletter
Angela Wissman
Marine Forces Reserve, United States Marine Corps
New Orleans, LA
504-678-2619
angela.wissman@usmc.mil
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Message from the Chair
The Criminal Law Section's mission is to enhance the practice of criminal law in all federal courts (civilian and military), as well as to foster a productive and ongoing dialogue among the federal bench, defense bar, and prosecutors. A goal of the section is to have a defense bar coordinator and prosecutorial coordinator in each of the 94 federal districts to help enhance dialogue.
Calendar of Events
June 19,
2008
Fifth Annual CLE Conference, The Big Apple:
Hot Topics and Practical Advice
Sponsored by the Criminal Law Section
Keynote speaker: Michael Nachmanoff, Federal Public Defender for the Eastern
District of Virginia
Location: Seyfarth Shaw, LLP, New York, NY
Registration: Download brochure with registration
form or register online.
Recent Events
Criminal Law Conference
May 11-12, 2006
New Orleans, La.
Section News
New Crack Cocaine Sentencing Guidelines
As part of an ongoing effort to apprise the federal bar of new decisions and developments in the area of federal criminal law, the following is submitted on behalf of the Criminal Law Section, formerly the Administration of Justice Section.
That Scalpel’s Looking More and More Like a Meat Axe:
Federal District Judge Struggles with Decision to Send Gratuity Prosecution to
Jury on Scant Evidence of a Link Between "Thing of Value" and "Official Act"
By Kevin J. Cloherty and Seth L. Rodner
A district judge in Tampa, Florida recently delivered sharp criticism of the federal gratuity statute, questioning its scope and fairness, and calling for Congressional reform. The gratuity statute, 18 U.S.C. § 201(c)(1), generally prohibits the giving to, or receipt by, public officials of things of value for or because of their official acts.
In a written opinion issued last month in the matter of United States v. Evans, United States District Judge James S. Moody, Jr. reluctantly denied defendants’ post-trial motions for judgment of acquittal on gratuity charges, noting that there was evidence, "albeit scant," from which a reasonable jury could conclude that the payments in question constituted illegal gratuities.1 Stating that "[t]he gratuity statute . . . is a cause of great concern to this Court,"2 Judge Moody added -- remarkably -- a separate, multi-page section at the end of his opinion, discussing the potential over-breadth and unfairness of the statute, and indeed calling for legislative intervention. Notwithstanding the Supreme Court’s narrow construction of this same statute in the familiar Sun-Diamond decision,3 Judge Moody observed that it remains sufficiently expansive to lead to troubling outcomes. He therefore "strongly urge[d] Congress to rewrite the gratuity statute to provide a well-defined harbor for those dealing with public officials."4 Defendant Evans’ counsel commented to the Tampa Tribune about Judge Moody’s opinion, "This is the first time in 40 years of practice that I’ve seen a federal judge suggest that Congress should change a law."5
In the post-Sun-Diamond world, the gratuity statute is supposed to be, in the words of Justice Scalia, a "scalpel," not a "meat axe," so why all this talk of over-breadth, unfairness, and reform?
The Basic Facts of Evans
From August 1, 1988 through August 30, 1996, defendant Audley Evans was the executive director of the Tampa Housing Authority ("THA"), an entity created by the City of Tampa and which received funds from the United States Department of Housing and Urban Development. In this capacity, Evans was involved in awarding contracts and authorizing payments thereunder to various contractors and resident-owned businesses. Defendant C. Hayward Chapman was a principal in two firms that contracted with and received funds from THA, one of which was Concorde, Inc. ("Concorde").
Evans and Chapman were indicted in 2000 and charged with numerous counts of, inter alia, gratuity, bribery, conspiracy, money laundering, wire fraud, and making false statements to a federal agency. The gratuity counts at issue here charged Chapman with giving, and Evans with receiving, four identifiable things of value in violation of 18 U.S.C. § 201(c)(1)(A) and (B) respectively.6 First, in December 1995, Chapman (via Concorde) posted a $25,000.00 certificate of deposit ("CD") as collateral for a $50,000.00 bank loan secured by Evans. Additionally, on May 1, 1997, Chapman (again via Concorde) made a series of three mortgage payments totaling $125,000.00 to benefit a corporation owned by Evans, namely Caribbean Properties, Inc. ("Caribbean").
Sun-Diamond, the Evans Jury Charge, and the Verdict
In Sun-Diamond, the Supreme Court held that, "in order to establish a violation of 18 U.S.C. § 201(c)(1)(A), the Government must prove a link between a thing of value conferred upon a public official and a specific ‘official act’ for or because of which it was given."7 In so doing, the Court affirmed the D.C. Circuit’s reversal of Sun-Diamond’s conviction, because the jury below had been instructed that the Independent Counsel was not required to establish any nexus between the alleged gratuities from Sun-Diamond and an identifiable official act by Secretary of Agriculture Mike Espy. Rather, the jury was instructed that it was sufficient to convict if things of value were conferred simply because of Secretary Espy’s official position.8
Consistent with Sun-Diamond, Judge Moody charged the jury in Evans that defendants may be found guilty of violating the gratuity statute "only if it is proved beyond a reasonable doubt that there is a link between the thing of value conferred upon a public official and a specific act for or because of which it is given."9 In February 2001, a jury convicted Evans and Chapman on four counts each of violating the gratuity statute in connection with the $25,000.00 CD and the three mortgage payments totaling $125,000.00.10
Post-Trial Challenge to the Sufficiency of Evidence
In denying defendants’ post-trial Rule 29 motions, Judge Moody determined that, viewed in the light most favorable to the government, "there was evidence, albeit scant, from which a jury could conclude that these payments constituted gratuities."11 Reading the opinion suggests that, in essence, this evidence distilled to little more than the arguably-suspicious timing (such as it was) of these four transfers vis-à-vis when Chapman (Concorde) received certain THA contracts and certain profits thereunder.12
Concorde initially received three THA contracts, one in May 1995 and two more in October 1995. Chapman posted the $25,000.00 CD as collateral for Evans’ bank loan two months later, in December 1995. Similarly, Concorde received its first distributions of profits from the THA contracts in March and April 1997. These profits were deposited into Concorde’s Raymond James account, and on May 1, 1997 -- approximately eight months after Evans’ paid tenure with THA ended13 -- three payments totaling $125,000.00 were drawn on this account and applied to Caribbean’s mortgages. Thus, notwithstanding the unrebutted evidence that all of Chapman’s work was of good quality and all of his contracts for fair value (including the fact that, when competing bids were submitted, Chapman’s was the lowest), Judge Moody hesitantly noted that, in light of the deferential Rule 29 standard, "the timing of these transfers was a circumstance . . . from which the jury could infer a connection."14 Feeling constrained to reach this result but troubled that "[t]he potential breadth of the statute constitutes considerable danger to both public officials and unwitting citizens who deal with those officials,"15 Judge Moody concluded that "[t]he potential for unfairness in this statute cries for remedy."16
Proving the Link Between the "Thing of Value" and an "Official Act"
By insisting on a link between the alleged gratuity and a specific, official act for or because of which it was given, Sun-Diamond undeniably narrowed the scope of the federal gratuity statute. But was it enough? At present, as the judge observed, "it is unclear how far the Government must go towards demonstrating this link to support a conviction."17 Stated differently, "The quantum of proof . . . is the source of the problem."18
Judge Moody worried that Sun-Diamond leaves open the possibility that all the government need establish to send a gratuity prosecution to the jury is that something of value was transferred to a public official by someone who had or will have an identifiable business transaction with the official’s agency. As the government argued in Evans, "once this low threshold is met, the jury is free to find that a criminal violation occurred, even with no evidence of wrongdoing, inflated contract prices or other suspect dealings."19 Judge Moody rejected this position in Evans, granting at the close of defendants’ case the Rule 29 motion filed by a third defendant, Patrick Watson, who received funds from THA contracts during Evans’ tenure (from November 1993 through March 1995), but whose small transfers (less than $25,000.00 each) to Evans at sporadic intervals over a two-year period starting in May 1995 (two months after Watson last received THA funds) could not be construed by any reasonable jury as gratuities rather than legitimate business transactions.20 That said, the gratuity counts involving the four transfers from Chapman to Evans survived the Rule 29 challenge based on "only slight differences in proof," including the larger amounts of money involved, the somewhat more suspicious timing issues (not a self-evident conclusion, at least from the abbreviated chronologies recited in the opinion), and the apparent inconsistencies in the defense’s purported benign explanation for the mortgage payments.21
In conclusion, the strength or weakness of the link between Chapman’s transfers and Evans’ official acts is open to debate, as is the question of whether the gratuity statute under which they were convicted is overly-broad and unfair. As Judge Moody noted, "It would be easier for courts and individuals to discern criminal liability if Congress were to provide a bright line test for what constitutes a violation of the statute and clearly define the forbidden territory . . ."22 Short of such reform, one thing is clear: to paraphrase a popular television series, the defendants in Evans will not be the last to be convicted of a gratuity offense based upon a "weak[est] link" and forced to say "good-bye" to their families for up to two years.
Kevin Cloherty is a former federal prosecutor who is presently counsel to the litigation practice group at Testa, Hurwitz & Thibeault, LLP in Boston, Massachusetts. Seth Rodner is a former federal prosecutor and current associate in the firm’s litigation practice group. The Criminal Law Section welcomes input and contributions from all members of the Federal Bar Association with an interest in federal criminal law and related issues. For more information or to get involved, please contact Joseph F. Savage, Jr., Chair of the Criminal Law Section, at (617) 248-7000. Joe Savage is a former federal prosecutor and current partner at Testa, Hurwitz & Thibeault, LLP, where he directs the firm’s white collar criminal defense and government investigations work.
1. United States v. Evans, No. 8:00-CR-75-T-30-TGW, 2001 WL 823496, at *5 (M.D. Fla. July 16, 2001).
3. United States v. Sun-Diamond Growers of California, 526 U.S. 398 (1999).
5. Paula Christian, Housing Boss Conviction Stands, TAMPA TRIB., Metro Section, July 18, 2001.
6. Chapman was charged under € 201(c)(1)(A), which imposes criminal liability on a donor who "directly or indirectly gives, offers, or promises anything of value to any public official . . . for or because of any official act performed or to be performed by such public official . . ." 18 U.S.C. € 201(c)(1)(A). Evans was charged under € 201(c)(1)(B), which makes it a crime for a recipient who, "being a public official, . . . otherwise than as provided by law for the proper discharge of official duty, directly or indirectly demands, seeks, receives, accepts, or agrees to receive or accept anything of value personally for or because of any official act performed or to be performed . . ." 18 U.S.C. € 201(c)(1)(B).
10. Chapman was acquitted on all other counts, while Evans was found guilty on eleven other counts, including two other gratuity counts for which the donor was not Chapman, but rather Bill Williams, who testified at trial and (in contrast to the Chapman-Evans counts) provided direct evidence of the link between certain services provided for EvansŐ benefit and EvansŐ awarding of THA contracts to Williams. Id. at *2-4.
12. In response to defendantsŐ argument that the three mortgage payments made by Concorde for CaribbeanŐs benefit represented a legitimate business transaction whereby Chapman acquired a 50% interest in Caribbean, the government pointed out that there was tangible evidence of neither a deed nor a stock transfer. The government also introduced EvansŐ financial affidavit dated several months later wherein he still claimed to be the 100% owner of Caribbean. Together with the timing issue, Judge Moody referenced this apparent inconsistency in defendantsŐ theory in denying their Rule 29 motions. Id. at *5, 11.
13. Evans continued acting as an unpaid consultant for THA through December 1996. Id. at *1.