Beruflich Dokumente
Kultur Dokumente
UnitedStatesv.Silver
In the
United States Court of Appeals
for the Second Circuit
AUGUSTTERM2016
No.161615cr
UNITEDSTATESOFAMERICA,
Appellee,
v.
SHELDONSILVER,
DefendantAppellant.
OnAppealfromtheUnitedStatesDistrictCourt
fortheSouthernDistrictofNewYork
ARGUED:MARCH16,2017
DECIDED:JULY13,2017
Before:CABRANES,WESLEY,CircuitJudges,andSESSIONS,Judge.*
JudgeWilliamK.SessionsIII,oftheUnitedStatesDistrictCourtforthe
*
DistrictofVermont,sittingbydesignation.
2
challengesthesufficiencyoftheevidenceonallcountsofconviction,
arguing,amongotherthings,thathismoneylaunderingconviction
under 18 U.S.C. 1957 required the Government to trace dirty
fundscomingledwithcleanfunds.
ThoughwerejectSilverssufficiencychallenges,weholdthat
the District Courts instructions on honest services fraud and
extortiondonotcomportwithMcDonnellandarethereforeinerror.
We further hold that this error was not harmless because it is not
clear beyond a reasonable doubt that a rational jury would have
reachedthesameconclusionifproperlyinstructed,asisrequiredby
lawfortheverdicttostand.
STEVENF.MOLO,MoloLamkenLLP(Robert
K.Kry,JustinV.Shur,MoloLamkenLLP;
JoelCohen,Stroock&Stroock&Lavan
LLP,onthebrief),NewYork,NY,for
DefendantAppellant.
ANDREWD.GOLDSTEIN(HowardS.Master,
JamesMcDonald,KarlMetzner,onthe
brief),forJoonH.Kim,ActingUnitedStates
3
AttorneyfortheSouthernDistrictofNew
York,NewYork,NY,forAppellee.
JOSA.CABRANES,CircuitJudge:
136S.Ct.2355(2016).
1
4
proceeding or controversy involving a formal exercise of
governmentalpower.2
ThoughwerejectSilverssufficiencychallenges,weholdthat
the District Courts instructions on honest services fraud and
extortiondonotcomportwithMcDonnellandarethereforeinerror.
We further hold that this error was not harmless because it is not
clear beyond a reasonable doubt that a rational jury would have
reachedthesameconclusionifproperlyinstructed,asisrequiredby
lawforaverdicttostand.
Id.at237172.
2
Appx629.
3
5
BACKGROUND
I. OffenseConduct4
TheGovernmentschargesagainstSilverinvolvehisparttime
workasapracticinglawyer.5TheGovernmentsoughttoprovethat
Silver orchestrated two criminal schemes that abused his official
positionsforunlawfulpersonalgain.Eachoftheseallegedschemes
had the same premise: in exchange for official actions, Silver
receivedbribesandkickbacksintheformofreferralfeesfromthird
partylawfirms.Inonescheme,Silverperformedfavorsforadoctor
in exchange for the doctors referral of mesothelioma patients to
4Thefollowingfactsaredrawnfromtheevidencepresentedattrialand
described in the light most favorable to the Government. See United States v.
Litwok, 678 F.3d 208, 21011 (2d Cir. 2012) (Because this is an appeal from a
judgmentofconvictionenteredafterajurytrial,the...factsaredrawnfromthe
trialevidenceanddescribedinthelightmostfavorabletotheGovernment.).
NewYorkallowsstatelawmakerstopursueparttimeemployment.See
5
N.Y.Pub.Off.Law74(3)(a).
6
Silvers law firm (the Mesothelioma Scheme). In the other, Silver
performed favors for two real estate developers who had hired, at
Silvers request, a law firm that was paying referral fees to Silver
(theRealEstateScheme).Jointly,theseallegedschemesproduced
roughly $4 million in referral fees for Silver. The Government also
charged that Silver engaged in money laundering by investing the
proceedsoftheMesotheliomaandRealEstateSchemesintovarious
privateinvestmentvehicles(theMoneyLaunderingScheme).We
describethekeyaspectsofeachschemeinturn.
A. TheMesotheliomaScheme6
Inthefallof2002,Silverbecameofcounseltothelawfirm
Weitz&Luxenberg(W&L),whichmaintainedanactivepersonal
injury practice. Lawsuits for mesothelioma, a rare form of cancer
causedbyexposuretoasbestos,wereparticularlylucrativeforW&L.
While he was not expected to and did not perform any legal
workforW&Lsclients,Silverreceivedafixedsalaryforlendinghis
name to W&L, as well as referral fees for any case he brought into
thefirm.Silversreferralfeewasasetpercentageofthefeesearned
byW&Lonanycasethathereferredtothefirm.
ForatimelineoftheMesotheliomaScheme,seeAddendumA,post.
6
7
an event and asked him to encourage W&L to donate money to
mesothelioma research.7 Silver, without consulting anyone at the
firm,respondedthathecouldnotgetW&Ltodoso.
7Dr.Taubbelievedthatfirmsthatprofitfrommesotheliomacasesshould
donate to support mesothelioma research. And indeed, other law firms had
providedsuchcharitablecontributions.
SilverconveyedthisrequestthroughDanielChill,amutualfriendofDr.
8
TaubandSilver.
9TrialTranscript(Tr.)274.
8
Silver requesting state funding. While this grant was under
consideration, Dr. Taub continued to send Silver mesothelioma
leads. And over a year later, in March of 2005, Silver received his
firstreferralfeecheckfromW&Lintheamountof$176,048.02.
In2007,NewYorklawchangedtorequirepublicdisclosureof
HCRA grants, and disclosure of any potential conflicts of interest
10 Prior to the first grant approval, Silver invited Dr. Taub to the 2005
StateoftheStateceremonyattheNewYorkStateCapitolandputhimintouch
withastaffertodiscussthestatusofthegrant.ThoughtheGovernmentargued
at its summation that these were official acts by Silver, it no longer relies on
theseactionsonappeal.
WhileSilverapprovedthesecondgrantonAugust25,2006,thegrant
11
wasactuallymadeonNovember30,2006.
9
betweenlegislatorsandrecipientsoflegislativegrants.12Responding
tothischange,SilverinformedDr.Taubthatanyfurtherrequestsfor
state grants would not be approved.13 Nevertheless, Dr. Taub
continued to send mesothelioma client leads to Silver to maintain
theirrelationshipandkeepSilverincentivized.14
Silver continued to help Dr. Taub during this time with two
otheractions:
InJanuaryof2007,Silverhadhisofficestaffcallastatetrial
judgetoaskhimtohireDr.Taubsdaughter,astudentat
FordhamUniversityLawSchool,asanunpaidintern.
12 The record does not establish whether any other ethics obligations
applying to public officials in New York State required disclosure of potential
conflictspriortothe2007enactment.
Dr. Taub had previously sent a letter to Silver on October 11, 2007
13
requestingathirdgrantofHCRAfunding.
14Tr.340.
10
relationshipwithhimthatwouldpossiblyleadtofuturefundingfor
his mesothelioma research. As he noted in an email to a colleague
on the day of his meeting with Silver, I will keep giving cases to
Shelly[Silver]becauseImayneedhiminthefutureheisthemost
powerfulmaninNewYorkState.15
In fact, Silver would not approve any more grants for Dr.
Taub (and he had not done so since August of 2006). Silver diddo
threeadditionalfavorsforDr.Taub,however.
In2012,attherequestofDr.Taub,SilverhelpedDr.Taubs
son obtain a job with OHEL Childrens Home & Family
Services (OHEL), a nonprofit organization devoted
primarily to providing social services to Jewish
15SpecialAppx1009.
11
populations,16 that received millions in discretionary state
fundingcontrolledsolelybySilver.TohelpDr.Taubsson,
SilvercalledOHELschiefexecutiveofficertwiceandsent
him a letter on Assembly letterhead. Silver had not
previously asked, nor did he subsequently ask, OHEL to
hireanyoneelse.
B. TheRealEstateScheme17
SilverssecondallegedschemeinvolvedtwomajorNewYork
real estate developers: Glenwood Management (Glenwood) and
theWitkoffGroup(Witkoff)(jointly,theDevelopers).Ofcourse,
likeotherrealestateinterests,bothcompaniesdependedheavilyon
favorable state legislation, including rent regulation and tax
abatementlegislation.TheDevelopersalsodependedontaxexempt
financing, which must be approved by the Public Authorities
ControlBoard(PACB).
12
vetopoweroveralllegislationsincehecouldpreventanylegislation
thatheopposedfromcomingtoavote.Also,asavotingmemberon
the PACB, Silver had the power to unilaterally prevent the PACB
fromapprovingapplicationsforstatefinancing.18
AswiththeMesotheliomaScheme,Silverallegedlysoughtto
enrichhimselfthroughreferralfeesfromalawfirm.Inthisscheme,
however,thatlawfirmwasGoldberg&Iryami(G&I),thefirmof
JayArthurGoldberg,aformerstafferandfriendofSilver.Goldberg
specialized in tax certiorari work, which involves challenges to
property owners real estate tax assessments. The Developers
pursued tax certiorari cases to reduce the property taxes of their
buildings.
Toenrichhimself,SilverallegedlyinducedtheDevelopersto
hire Goldberg, who had agreed to pay Silver a percentage of the
resulting legal fees. In 1997, at a time when important real estate
legislation was due for renewal, Silver referred Glenwood to
Goldberg. In 2005, Silver did the same for Witkoff, stating that his
friend Goldberg needed business. In response, Glenwood and
Witkoff moved some of their tax certiorari work from other law
firmstoG&I,whichtheycontinuedtodoovertime.OfthefeesG&I
earned from its Glenwood and Witkoff matters, Silver received a
referral feetwentyfive percent of what G&I earned from
PACB bond approvals for taxexempt state financing are typically pro
18
formaandvotesmaybecastbyaproxy.OneGovernmentwitnesstestifiedthat,
inhisexperience,noPACBapplicationshadbeendenied.
13
Glenwood matters and fifteen percent of what G&I earned from
Witkoffmatters.
Inreturnfortheseallegedkickbacks,Silvertookanumberof
actionstobenefittheDevelopers:
14
Inalate2011phonecall,SilverinformedaGlenwoodlobbyist
of his feesharing arrangement with Goldberg. This disclosure was
prompted by G&Is decision to send new retainer agreements to
GlenwoodthatreferencedSilver.SilvertoldtheGlenwoodlobbyist
that he wanted his feesharing arrangement with Goldberg to
continue, and that the arrangement was not problematic since the
fees came from a Glenwood limited liability company. Glenwood,
despite its reservations, executed a confidential side letter
agreementwithG&Iseparatefromthefirmsretaineragreement
consenting to the fee arrangement. This letter was kept secret from
the public and from Glenwoods own chief financial officer.19
WitkofflearnedofthefeesharingarrangementinJuneof2014ona
call with Goldberg, who had received a grand jury subpoena in
connectionwiththeGovernmentsinvestigationofSilver.
C. TheMoneyLaunderingScheme
19 The record does not establish whether Silver was under any legal
obligation, as a public official or private lawyer, to disclose publicly this secret
sideletterwithG&I.
15
investor.20 At one point, Silver instructed Levy to place one half of
aninvestmentinhiswifesnametoavoidpubliclydisclosingthefull
amountoftheinvestment.
II. ProceduralHistory
A. Indictment
TheGovernmentstheoryunderlyingitshonestservicesfraud
andHobbsActextortionchargeswasthatSilverhadacceptedbribes
20LevywasunawareofthesourceofSilversfunds.
21Appx97.
See 18 U.S.C. 1341, 1343, 1346 (honest services fraud); id. 1951
22
(Hobbs Act extortion); id. 1957 (money laundering). Specifically, Counts One
and Two charged Silver with honest services mail fraud and wire fraud,
respectively, in connection with the Mesothelioma Scheme. Counts Three and
Four did the same as to the Real Estate Scheme. Counts Five and Six charged
Silver with Hobbs Act extortion in connection with the Mesothelioma Scheme
and Real Estate Scheme, respectively. And Count Seven charged Silver with
moneylaundering.
16
andkickbacksinexchangeforofficialacts.23Tosucceedonabribery
theory of honest services fraud and Hobbs Act extortion, the
Governmenthadtoprove,beyondareasonabledoubt,theexistence
of a quid pro quo agreementthat the defendant received, or
intended to receive, something of value in exchange for an official
act.24
B. TrialandJuryInstructions
SeeSkillingv.UnitedStates,561U.S.358,404(2010)(construinghonest
23
See United States v. Bruno, 661 F.3d 733, 74344 (2d Cir. 2011) (in a
24
prosecutionofhonestservicesfraudunderabriberytheory,[t]hekeyinquiryis
whether, in light of all the evidence, an intent to give or receive something of
value in exchange for an official act has been proved beyond a reasonable
doubt);UnitedStatesv.Ganim,510F.3d134,143(2dCir.2007)([T]heoffense[of
HobbsActextortion]iscompletedatthetimewhenthepublicofficialreceivesa
payment in return for his agreement to perform specific official acts . . . .
(quoting Evans, 504 U.S. at 268)); see also id. at 141 (honest services fraud and
HobbsActextortioncriminalize[],insomerespect,aquidproquoagreementto
wit, a government officials receipt of a benefit in exchange for an act he has
performed,orpromisedtoperform,intheexerciseofhisofficialauthority).
17
timebepending,orwhichmaybylawbebroughtbeforeanypublic
official, in such officials official capacity.25 The Governments
proposed instruction, in contrast, sought to define an official act
morebroadlyasanyacttakenundercolorofofficialauthority.26
25Appx188(trackingverbatimthelanguageof18U.S.C.201(a)(3)).
26Id.at190.
27Id.at591.
28Tr.278586(emphasisadded).
29Id.at2786.
18
kickbacks as part of a scheme to defraud.30 The District Court
explained:
InitsHobbsActextortioninstructions,theDistrictCourtalso
instructed that the Government must prove a quid pro quo
specifically, that property was sought or received by Mr. Silver,
directlyorindirectly,inexchangeforthepromiseorperformanceof
officialaction.32TheDistrictCourtdidnotredefineofficialactionin
its extortion charge, but did explicitly reference the earlier honest
services fraud charge when setting forth the quid pro quo
requirementasanelementofextortion.33
30Appx629.
31Id.(emphasisadded).
32Id.at635.
33Id.
19
The District Court also provided the following charge
regarding the fiveyear statute of limitations for honest services
fraudandHobbsActextortion:34
Thestatuteoflimitationsforeachofthechargedcrimes
is five years. If you find that Mr. Silver engaged in a
scheme to commit honest services fraud, extortion or
money laundering, but no aspect of the particular
schemeoccurredafterFebruary19,2010,thenyoumust
acquitonthatchargebecauseitisbarredbythestatute
of limitations. If, on the other hand, you find that any
aspectofthecrimeyouareconsideringcontinuedonor
afterFebruary19,2010,thenthestatuteoflimitationsas
tothatchargehasbeencompliedwith.35
3418U.S.C.3282.
35Appx644.
36UnderRule29,aftertheGovernmentclosesitscase,thecourtonthe
defendantsmotionmustenterajudgmentofacquittalofanyoffenseforwhich
theevidenceisinsufficienttosustainaconviction.Fed.R.Crim.P.29(a).Rule
33 states, in relevant part, that [u]pon the defendants motion, the court may
vacateanyjudgmentandgrantanewtrialiftheinterestofjusticesorequires.
Fed.R.Crim.P.33(a).Here,Silvermovedforajudgmentofacquittalattheclose
oftheGovernmentscase,andtheDistrictCourtreserveddecisionuntilafterthe
juryverdict.SilverrenewedhisRule29motionaftertheverdict,andmovedfora
newtrial,pursuanttoRule33,basedonvariousevidentiaryrulingsmadebythe
20
DistrictCourtdeniedthosemotionsinawrittenopiniononMay3,
2016.37
C. SentencingandPostSentencingMotions
OnMay4,2016,theDistrictCourtsentencedSilvertotwelve
yearsofimprisonment,tobefollowedbythreeyearsofsupervised
release.Italsoimposed$5.4millioninforfeiture,anda$1.75million
fine.ThecourtentereditsfinaljudgmentonMay10,2016.
On May 13, 2016, Silver moved to continue bail and stay the
financial penalties pending appeal. Silver relied largely on
argumentsraisedinMcDonnell,whichwasthenpendingbeforethe
SupremeCourtandwouldaddressthedefinitionofanofficialact
for honest services fraud and Hobbs Act extortion violations.38 On
June 27, 2016, the Supreme Court decided McDonnell. Soon
thereafter, on August 25, 2016, the District Court granted Silvers
motion for bail pending appeal.39 In a thoughtful opinion, the
DistrictCourtconcludedthatwhileSilverscaseisfactuallyalmost
District Court. See United States v. Silver, 184 F. Supp. 3d 33, 37, 52 (S.D.N.Y.
2016).
37Silver,184F.Supp.3dat54.
38 TheDistrictCourtinitiallyadjournedSilversdeadlinetobeginpaying
the fine and forfeiture to August 15, 2016, adjourned Silvers surrender date to
August31,2016,andmovedbriefingonSilversbailmotiontoaftertheSupreme
CourtdecidedMcDonnell.
39UnitedStatesv.Silver,203F.Supp.3d370(S.D.N.Y.2016).
21
nothinglikeMcDonnell[,]...thereisasubstantialquestionwhether,
in light of McDonnell, the [jury] charge was in error and, if so,
whethertheerrorwasharmless.40
DISCUSSION
I. SufficiencyoftheEvidence
Wereviewdenovochallengestothesufficiencyofevidence,
but must uphold the conviction if any rational trier of fact could
havefoundtheessentialelementsofthecrimebeyondareasonable
40Id.at380.
Silver also claims that the District Court improperly admitted certain
41
evidence.BecausewevacateandremandSilversjudgmentofconvictiononall
counts due to erroneous jury instructions, we do not reach this additional
argument.
42Def.Br.at45n.2;seealsoSilver,203F.Supp.3dat376n.6.
22
doubt.43Toconductthisreview,weviewtheevidenceinthelight
most favorable to the government, crediting every inference that
couldhavebeendrawninthegovernmentsfavor,anddeferringto
thejurysassessmentofwitnesscredibilityanditsassessmentofthe
weight of the evidence.44 Silver raises three challenges to the
sufficiencyoftheevidenceagainsthim,noneofwhichhavemerit.
A. HobbsActExtortion
First,SilverclaimsthattheGovernmentfailedtoproveHobbs
Act extortion because there was no evidence that that he deprived
anyoneofproperty.Thisargumentisbeliedbytherecord.
United States v. Vernace, 811 F.3d 609, 615 (2d Cir. 2016) (internal
43
quotationmarksomitted).
United States v. Babilonia, 854 F.3d 163, 174 (2d Cir. 2017) (internal
44
quotationmarksomitted).
4518U.S.C.1951(b)(2).
46Sekharv.UnitedStates,133S.Ct.2720,2724(2013)
TheGovernmentfurthercontendsthatadeprivationofpropertyisnot
47
anessentialelementofaHobbsActextortionviolation.Becauseadeprivationof
propertyoccurredontherecordbeforeus,wedonotreachthatquestionhere.
23
both the mesothelioma leads and the tax certiorari business from
whichSilverprofitedwerevaluableandtransferableproperty(albeit
intangible property). By engaging in the alleged schemes, Silver is
saidtohavedeprivedDr.Taub,theDevelopers,andotherlawfirms
ofproperty.
B. HonestServicesFraud
48561U.S.358,40911(2010).
49Id.at411,413.
24
thus bribes or kickbacks within the meaning of Skilling, not mere
undisclosedselfdealingbyapublicofficialasSilverargues.50
C. MoneyLaundering
50Id.at410.In...selfdealingcases,thedefendanttypicallycauseshisor
heremployertodobusinesswithacorporationorotherenterpriseinwhichthe
defendant has a secret interest, undisclosed to the employer. United States v.
Rybicki, 354 F.3d 124, 140 (2d Cir. 2003) (en banc). The evidence at trial
demonstrated that Silvers proven conduct, in colluding with Dr. Taub and the
Developers,wentfarbeyondundisclosedselfdealing.
5118U.S.C.1957(a)
25
tracecriminallyderivedproceedswhentheyhavebeencommingled
with funds from legitimate sources to prove money laundering
underSection1957.52Thisview,however,isaminorityone.53
We, on the other hand, adopt the majority view of our sister
Circuitsthat the Government is not required to trace criminal
fundsthatarecomingledwithlegitimatefundstoproveaviolation
of Section1957. Because money is fungible, once funds obtained
fromillegalactivityarecombinedwithfundsfromlawfulactivityin
a single account, the dirty and clean funds cannot be
distinguished from each other.54 As such, [a] requirement that the
government trace each dollar of the transaction to the criminal, as
opposed to the noncriminal activity, would allow individuals
effectively to defeat prosecution for money laundering by simply
52 See United States v. Loe, 248 F.3d 449, 467 (5th Cir. 2001) ([W]here an
account contains clean funds sufficient to cover a withdrawal, the Government
can not prove beyond a reasonable doubt that the withdrawal contained dirty
money.);UnitedStatesv.Rutgard,116F.3d1270,129293(9thCir.1997)(Section
1957 does not create a presumption that any transfer of cash in an account
tainted by the presence of a small amount of fraudulent proceeds must be a
transferoftheseproceeds).
See United States v. BraxtonbrownSmith, 278 F.3d 1348, 1354 (D.C. Cir.
53
26
commingling legitimate funds with criminal proceeds.55
Accordingly, we reject Silvers sufficiency challenge to his money
launderingconviction.
II. McDonnellv.UnitedStates
TheSupremeCourtinMcDonnelladdressedwhatqualifiesas
anofficial act inan honest services fraud orHobbs Act extortion
quid pro quo. Robert McDonnell, the former Governor of Virginia,
was charged with, among other things, honest services fraud and
Hobbs Act extortion.56 While McDonnell was in office, he and his
wife accepted $175,000 in loans, gifts, and other benefits from
businessmanJonnieWilliams,whowasthechiefexecutiveofficerof
Star Scientific, a Virginiabased company that developed a
nutritional supplement made from antabine, a compound found in
tobacco.57 Williams sought to have Virginias public universities
conduct research on the nutritional supplement, and sought
McDonnells help to make these studies happen.58 At trial and on
55Id.at977.
56McDonnell,136S.Ct.at2361.
57Id.
58Id.
27
appeal, the Government argued that McDonnell performed certain
official acts to help Williams in exchange for Williams loans and
gifts.59 These official acts included arranging meetings with state
government officials to discuss the supplement, hosting and
attending events at the Governors Mansion for Star Scientific, and
contacting other government officials to encourage antibine studies
atVirginiastateuniversities.60
59Id.at2365.
60Id.
61 ThisisthesamestatutequotedbySilverinhisproposedofficialact
juryinstructions.Appx188;seealsotextaccompanyingnote25,ante.
62McDonnell,136S.Ct.at236566.
63Id.at2366(internalquotationmarksomitted).
28
honest services fraud and extortion, and the U.S. Court of Appeals
fortheFourthCircuitaffirmed.64
64Id.at236667.
65Id.at2375.
66Id.
67 Id. at 2371. With its holding, the Supreme Court did not hold that
201(a)(3)ofthefederalbriberystatutemustnecessarilybetheexclusivesource
forthedefinitionofanofficialactionineveryhonestservicesfraudandHobbs
Act extortion case. Since the parties agreed that they would define honest
services fraud with reference to the federal bribery statute, the Court
incorporated201(a)(3)sdefinitionofanofficialactintothebriberyrequirement
forhonestservicesfraudandextortionwithoutexplanation.SeeMcDonnell,136
S.Ct.at236567.Inthiscase,however,whilethepartiesdidnotagreetoapply
201(a)(3)sdefinitionofofficialactattrial,theyeachapplytheofficialact
definition from McDonnell in support of their arguments on appeal. Neither
party argues for an alternative definition that would allay the constitutional
concerns expressed in McDonnell. Accordingly, we apply the McDonnells
definitionofanofficialact,asderivedfrom201(a)(3).
29
First, [t]he question, matter, cause, suit, proceeding or
controversymustinvolveaformalexerciseofgovernmentalpower
thatissimilarinnaturetoalawsuitbeforeacourt,adetermination
before an agency, or a hearing before a committee.68 The Court
furtherclarifiedthatthisquestion,matter,cause,suit,proceedingor
controversy must also be something specific and focused that is
pendingormaybylawbebroughtbeforeapublicofficial.69
Second,toqualifyasanofficialact,thepublicofficialmust
make a decision or take an action on that question, matter, cause,
suit,proceedingorcontroversy,oragreetodoso.70Suchanaction
or decision may include using [an] official position to exert
pressureonanotherofficialtoperformanofficialact,ortoadvise
anotherofficial,knowingorintendingthatsuchadvicewillformthe
basis for an official act by another official.71 Without more,
68Id.at2372.
30
setting up a meeting, talking to another official, or organizing an
event(oragreeingtodoso),arenotofficialacts.72
thatitmustidentifyaquestion,matter,cause,suit,proceeding
or controversy involving the formal exercise of governmental
power75;
thatthepertinentquestion,matter,cause,suit,proceedingor
controversy must be something specific and focused that is
72Id.
73Id.
74Id.at237273.
75Id.at2374.
31
pending or may by law be brought before any public
official76;and,
thatmerelyarrangingameetingorhostinganeventtodiscuss
amatterdoesnotcountasadecisionoractiononthatmatter.77
III. HonestServicesFraudandHobbsActExtortionCountsunder
McDonnell
76Id.
77Id.at2375.
78UnitedStatesv.Nouri,711F.3d129,138(2dCir.2013).
United States v. Quattrone, 441 F.3d 153, 177 (2d Cir. 2006) (internal
79
quotationmarksomitted).
32
A. TheJuryInstructionunderMcDonnell
Uponreviewofthejurychargeinthiscase,weconcludethat
the District Courtsjury instruction defining an official action in its
honest services fraud and Hobbs Act extortion charges was
erroneous under McDonnell. The District Courts charge,
encompassinganyactiontakenortobetakenundercolorofofficial
authority,82 was overbroad. Like the improper instruction in
McDonnell, the plain language of the instruction at Silvers trial
captured lawful conduct, such as arranging meetings or hosting
eventswithconstituents.Further,theDistrictCourtschargedidnot
containanyofthethreeinstructionsspecifiedinMcDonnell.
Itbearsrecallingthatthepurposeofaproperchargeistogive
the jury guideposts as to what would qualify as criminal
wrongdoingunderthelaw.Here,theinstructionsdidnotconveyto
the jury that an official action must be a decision or action on a
United States v. Finazzo, 850 F.3d 94, 105 (2d Cir. 2017) (internal
80
quotationmarksomitted).
81Quattrone,441F.3dat177(internalquotationmarksomitted).
82Appx629(emphasisadded).
33
matterinvolvingtheformalexerciseofgovernmentpowerakintoa
lawsuit, hearing, oragency determination. Nor did the instructions
prevent the jury from concluding that meetings or events with a
public official to discuss a given matter were official acts by that
publicofficial.TheGovernmentsownsummationconfirmsthatthe
juryinstructionsconveyedanerroneousunderstandingofthelawas
clarifiedbyMcDonnell.TheGovernmentexpresslyurgedthejuryto
convict because an official act is not limited to voting on a bill,
making a speech, passing legislation, it is not limited to that, but
rather, includes any action taken or to be taken under color of
official authority.83 The Government thus directly argued that the
DistrictCourtsinstructiondefininganofficialactwasbroaderthan
the formal exercise of government power described in McDonnell.
Accordingly, the jury could not have received a correct
interpretationofthelaw.84
83Tr.2857(emphasisadded).
84 In United States v. Boyland, we recently rejected overbroad jury
instructionsthatdidnotcomportwithMcDonnell.No.153118,F.3d,2017
WL 2918840 (2d Cir. July 10, 2017). Specifically, we rejected an honest services
fraud instruction defining an official act as decisions o[r] actions generally
expectedofapublicofficial,includingbutnotlimitedtocontactingorlobbying
othergovernmentalagencies,andadvocatingforhisconstituents,andaHobbs
Actextortioninstructionstatingthatthejuryneededtofindthatthedefendant
knew that any money he accepted was offered in exchange for a specific
exerciseof[thedefendants]officialpowers.Id.at*6,*8*9.Wesimilarlyreject
the official act instructions given at Silvers trial because of the constitutional
concerns stemming from the breadth of the interpretation advanced by the
government.Id.at*9.
34
TheGovernmentarguesthattheDistrictCourtscharge,taken
as a whole, was consistent with Silvers proposed additional
instructions and with McDonnell. To salvage the District Courts
instructions, the Government points to language requiring that
Silverintend[ed]tobeinfluencedintheperformanceofhispublic
duties;wasexpectedtoexerciseofficialinfluenceormakeofficial
decisionsasaresultofbribesorkickbacks;andintendedtodoso
as specific opportunities arose.85 We are not persuaded that the
terms public duties, official influence, and official decisions
convey the requisite specificity that, to qualify as an official act,
thegivenquestion,matter,cause,suit,proceedingorcontroversy
mustinvolvetheformalexerciseofgovernmentalpower;nordothese
terms specify that the question, matter, cause, suit, proceeding or
controversy must be specific and focused like a hearing or
lawsuit.86 Moreover, whatever limiting effect this language may
havehadwasundonebytheDistrictCourtsbroadinstructionthat
an official action included any action taken under color of official
authority.87
ThoughweconcludethatthejuryinstructionsatSilverstrial
were erroneous, we do not ascribe fault to the District Court or to
the Government. The instructions at the trial, given prior to the
Supreme Courts decision in McDonnell, were consistent with our
85Appx62930.
86SeeMcDonnell,136S.Ct.at237172.
87Appx629(emphasisadded).
35
precedent at the time.88 Indeed, we commend the District Courts
forthrightnessinacknowledging,afterMcDonnellwasdecided,that
itsinstructionsmighthavebeeninerror.89
B. Harmlessness
Asexplainedbelow,wecannotconclude,beyondareasonable
doubt, that a rational jury would have found Silver guilty if it had
been properly instructed on the definition of an official act. While
the Government presented evidence of acts that remain official
under McDonnell, the jury may have convicted Silver for conduct
See,e.g.,UnitedStatesv.Rosen,716F.3d691,700(2dCir.2013);seealso
88
Appx599(documentingthatSilverconcededthathisproposedinstructionwas
supportedonlybyoutofcircuitauthority).
89Silver,203F.Supp.3dat381.
90UnitedStatesv.Sheehan,838F.3d109,121(2dCir.2016)(quotingNeder
v.UnitedStates,527U.S.1,18(1999)).
91Quattrone,441F.3dat181.
36
that is not unlawful, and a properly instructed jury might have
reachedadifferentconclusion.92
1. MesotheliomaScheme
WithaMcDonnellinstruction,itispossiblethatarationaljury
would not find that Silver engaged in a quid pro quo to exchange
officialactsforDr.Taubsreferrals.
Inthiscase,thestatuteoflimitationsiscriticaltoouranalysis.
As previously noted, both honest services fraud and Hobbs Act
extortion charges have a fiveyear statute of limitations.93 Here it
only captures conduct occurring after February 19, 2010, five years
beforetheindictmentagainstSilver.94Onlythreeactsprovenbythe
Government fall within the statute of limitations: obtaining an
92InBoyland,weaffirmedthedefendantsconvictiondespitefindingthat
thejuryinstructionswereerroneousunderMcDonnell.Wenote,however,thatin
addition to the clear factual differences of that case, Boyland did not apply a
harmless error standard of review because the defendant in that case did not
objecttothejuryinstructions.Boyland,2017WL2918840,at*6*7,*9*10.
9318U.S.C.3282.
94 The other acts proven by the Governmentapproving the HCRA
grants, helping Dr. Taubs daughter obtain an unpaid internship with a state
court judge, and approving the grant to the Shalom Task Forceall occurred
well outside of the statute of limitations and by themselves cannot support
Silversconviction.SilverdoesnotdisputethattheHCRAgrantsandtheShalom
Task Force grant are official acts as defined by the Supreme Court in
McDonnell. Silvers intervention on behalf of Dr. Taubs daughter to secure an
unpaid internship, however, is not as clearly official. We need not reach that
questionsincethisinterventionoccurredoutsidethestatuteoflimitationsperiod.
37
AssemblyresolutionhonoringDr.Taub,agreeingtoassistDr.Taub
withacquiringpermitsforacharityrace,andhelpingDr.Taubsson
secureajobwithanonprofitreceivingstatefunding.95Ofthoseacts,
onlytheAssemblyresolutionclearlyremainsanofficialactunder
McDonnell. As such, the jury may have convicted Silver by relying
on acts within the statute of limitations period that are no longer
official under McDonnell. And a rational jury might not have
convictedhadthechargemorefullydescribedanofficialact.
First,arationaljurymighthaveconcludedthatSilverdidnot
engage in an official act when he agreed to help Dr. Taub with
permits for his charity race. The Governments evidence showed
that Dr. Taub, along with others, met with Silver at Silvers New
YorkCityofficeregardingtherace.SilverthensentDr.Taubaletter
on Assembly letterhead offering to help navigate the process if
needed.96 To conclude that this act was official under the
teachings of McDonnell, the jury would have to find that Silver
sought to us[e] his official position to exert pressure on another
officialtoperformanofficialactinthiscase,toissuepermitsto
Dr. Taub.97 We cannot conclude the jury would have done so.
Indeed, a rational jury with a proper jury instruction could have
found that Silvers letter offering general assistance with an event
occurringinhisdistrictabsentanyactualexert[ion][of]pressure
95SeeAddendumA.
96Appx706.
97McDonnell,136S.Ct.at2372.
38
on other officials regarding a particular matter under their
considerationdid not satisfy the standards for an official act as
definedbyMcDonnell.98
Similarly,arationaljurywithaproperMcDonnellinstruction
might find that Silvers letter to OHEL on behalf of Dr. Taubs son
did not rise to the level of an official act. In its summation, the
Government emphasized that Silver recommended Dr. Taubs son
on official Assembly letterhead.99 But using government
letterheadisnot,byitself,aformalexerciseofgovernmentpoweron
a matter similar to a hearing or lawsuit. Moreover, even assuming,
astheGovernmentcontends,thatSilverusedhisofficialpositionto
exertpressureonthechiefexecutiveofficerofOHEL,thereisno
evidence in the record that Silver or anyone else threatened to
withhold OHEL funding.100 To be sure, a rational juror might well
believehiringshouldbebasedsolelyonthemeritsratherthanon
McDonnell,136S.Ct.at2369.TheDistrictCourt,addressingtheOHEL
100
issue,statedthatusinganofficialpositiontopressureanongovernmentalentity
orpersoncouldconstituteanofficialact.Silver,203F.Supp.3dat379n.9,38384.
We need not address this question here since we merely conclude that, with a
properinstructionandonthisrecord,arationaljurycouldhaveconcludedthat
SilversactionswithOHELwerenotofficialactions.
39
the recommendations of successful, powerful, or informed figures,
and thus view negatively recommendation letters of the sort here.
Butviewingsomethingnegativelyisnotthesameasfindingthatthe
elements of a crime have been met. We cannot conclude, beyond a
reasonable doubt, that the jury would have found that Silvers
actionswithOHELmetthedefinitionofofficialactasdefinedin
McDonnell.
GovtBr.at30,36;OralArgumentTranscriptat6,8.
101
SeeTr.127879,128285,1287,128990.
102
See,e.g.,N.Y.Assemb.Res.86(2017)(CongratulatingBaileyHohwald
103
upontheoccasionofreceivingthedistinguishedrankofEagleScout....);N.Y.
Assemb. Res. 85 (2017) (Congratulating Hector Rios, Jr. upon the occasion of
40
high school sports teams,104 commended retirees,105 and
commemoratedtheretirementofajerseywornbyaStonyBrook
University athlete.106 A rational jury could thus conclude that,
though certainly official, the prolific and perfunctory nature of
theseresolutionsmakethemdeminimisquosunworthyofaquid.
receiving the distinguished rank of Eagle Scout . . . .); N.Y. Assemb. Res. 11
(2017) (Congratulating Daniel A. Molloy upon the occasion of receiving the
distinguishedrankofEagleScout....).
See,e.g.,N.Y.Assemb.Res.318(2017)(Honoringthe2007ThomasR.
104
Proctor High School Baseball Team upon the occasion of its induction into the
Greater Utica Sports Hall of Fame); N.Y. Assemb. Res. 244 (2017)
(CongratulatingtheBaldwinHighSchoolGirlsBasketballTeam...uponthe
occasion of capturing the New York State Public High School Athletic
AssociationClassAAChampionship....).
105 See, e.g., N.Y. Assemb. Res. 326 (2017) (Commending Fire Chief
Gerald J. VanDeWalle upon the occasion of his retirement after 40 years of
dedicatedservicetotheNewarkVolunteerFireDepartment);N.Y.Assemb.
Res. 305 (2017) (Congratulating The Reverend Gary W. Bonebrake, D. Min.,
upontheoccasionofhisretirementafter22yearsofdistinguishedserviceto
MainStreetBaptistChurchinOneonta,NewYork).
106See,e.g.,N.Y.StateAssemb.Res.46(Commemoratingtheretirement
oftheNo.20jerseywornbyStonyBrooksJameelWarney,athreetimeAmerica
East Player of the Year and the most decorated player in Seawolves
basketballhistory.).
41
intothestatuteoflimitationsperiod.107TheGovernmentaccordingly
contendsthatSilvertookactioninfurtheranceoftheschemewithin
the statute of limitations period, including demanding additional
referrals from Dr. Taub on May 25, 2010, continuing to receive
mesotheliomaleadsfromDr.Taub,andengaginginvariousphone
callsandmailingsinfurtheranceofthescheme.108TheGovernment
concludesthat,eveniftheonlyofficialactionsSilverevertookwere
the award of the HCRA grants and the Assembly resolution, it is
clearbeyondareasonabledoubtthattheschemecontinuedintothe
limitationsperiod.109
WeagreethattheGovernmentneednotprovethatanofficial
act occurred within the statute of limitations period. The
Governmentneedonlyprovethatsomeaspectoftheparticularquid
pro quo scheme continued into the statute of limitations period.110
Here,however,mostoftheactsrelieduponbytheGovernmentmay
no longer be official. Thus, it is entirely conceivable that a
107GovtBr.at3536.
108Id.at36;seealsoSpecialAppx1425.
109GovtBr.at36.
110 See United States v. Rosen, 716 F.3d 691, 700 (2d Cir. 2013) (Once the
quid pro quo has been established, . . . the specific transactions comprising the
illegal scheme need not match up this for that. (internal quotation marks
omitted)); United States v. Smith, 198 F.3d 377, 384 (2d Cir. 1999) (Hobbs Act
extortion is a continuing offense in the context of venue); cf. United States v.
Rutigliano, 790 F.3d 389, 40001 (2d Cir. 2015) (receipt of a payment within the
statute of limitations period was an overt act in furtherance of an ongoing
conspiracytocommitmail,wire,andhealthcarefraud).
42
properlyinstructedrationaljurywouldhaveviewedthequidproquo
schemeaslimitedtotheexchangeofreferralsforHCRAgrantmoney.
Assumingthatisthecase,itispossiblethatarationaljurycouldalso
find that this quid pro quo arrangement ended when Silver told Dr.
Taub that he would no longer provide him with HCRA grants,
whichoccurredwellbeforethestatuteoflimitationsperiodbeganto
run in 2010. Given this possibility, we cannot say, beyond a
reasonabledoubt,thatarationaljurywouldhaveconvictedSilverif
properlyinstructed.
2. RealEstateScheme
FortheRealEstateScheme,theGovernmentattrialcontended
that the following acts by Silver were official: his PACB proxy
votes for bond approvals; his meeting with Glenwood lobbyists
prior to the passage of the Rent Act of 2011; his approval of real
estate legislation benefiting the Developers, including the Rent Act
of2011;andhisoppositiontoamethadoneclinicnearaGlenwood
property.Itisnotclear,beyondareasonabledoubt,thataproperly
instructedrationaljurywouldhavefoundanofficialactquidproquo
basedontheseacts.
Assumingthejurywasproperlyinstructed,itispossiblethat
it would not have considered Silvers opposition to the methadone
clinicanofficialact.TheonlyactionSilvertookregardingtheclinic
was to draft a letter to be distributed publicly that expressed his
strongoppositiontotheclinic.Takingapublicpositiononanissue,
by itself, is not a formal exercise of governmental power, and is
43
thereforenotanofficialactunderMcDonnell.Therecorddoesnot
establish that Silver formally used his power as Speaker of the
Assemblytoopposetheclinicand,accordingly,arationaljurymight
nothavefoundhisoppositiontobeanofficialact.111
111 The Government and the District Court both state that there was
evidenceintherecordtosuggestthatSilversoughttotakecreditforcausingthe
clinic to be relocated, implying that he did or intended to take some action to
opposetheclinic.SeeSilver,203F.Supp.3dat384n.14(citingTr.160205,1752
53);GovtBr.at43n.6.Whilethatmaybe,arationaljurymightreachadifferent
conclusiongiventhattherewasnoevidencepresentedthatSilvertookanyaction
torelocatetheclinicotherthanpubliclystatinghisopposition.
Tr.289293.
112
44
votes qualify as official acts under McDonnell,113 a rational jury
might not view these acts as part of a quo exchanged for the
Developerstaxcertioraribusiness.
performedbyhim.Weneednotreachthisquestionofwhopossessedauthority
overtheactshere.
Silver, 184 F. Supp. 3d at 46. Indeed, the jury could have concluded,
114
easily,butmistakenly,thatthemeetingitselfsufficedtoshowanofficialact,and
gonenofurther.
45
controversial, and one Government witness even stated that, in his
experience,thePACBapprovedeveryfinancingrequest.115
IV. MoneyLaunderingCount
Tr.1957;seealsonote18,ante.
115
18U.S.C.1957.
116
46
trial is the honest services fraudandextortion verdictthatwe now
vacate.WethereforemustalsovacatetheconvictionofSilveronthe
moneylaunderingcount.
CONCLUSION
Tosummarize,weholdasfollows:
47
(3) the District Courts jury instruction on its honest services
fraudandHobbsActextortioncharge,defininganofficial
act as any action taken or to be taken under color of
officialauthority,waserroneousunderMcDonnell;
(4) aproperlyinstructedrationaljurymaynothaveconvicted
Silver, and accordingly the District Courts error was not
harmlessbeyondareasonabledoubt;and
48
ADDENDUMA:MesotheliomaSchemeTimeline1
49
SilverinvitesDr.TaubtoattendtheState NotOfficial
oftheStateceremonyattheNewYork
Jan.2005 StateCapitol.HethenputsDr.Taubin
touchwithoneofhisstafferstodiscuss
thestatusofDr.Taubsgrantrequest.
Silverreceivesfirstreferralfeecheckfrom NotOfficial
Mar.2005
W&Lfor$176,048.02.
Silverapprovesa$250,000stategrantto Official
ColumbiaUniversitytosupportDr.
July2005
Taubsresearch,fundedoutofthe
HRCAAssemblyPool.
Silverapprovesasecond$250,000state Official
Aug.2006 granttoColumbiaforDr.Taubs
researchoutoftheHCRApool.
SilverhashisAssemblystaffcallastate Official
Jan.2007 trialjudgetoaskhimtohireDr.Taubs
daughterasanunpaidintern.
Dr.TaubsendsSilveraletterrequestinga NotOfficial
thirdHRCAgrant.Respondingtoastate
lawchangerequiringdisclosureofHRCA
grantsanddisclosuresofanyconflictsof
Oct.2007
interest,SilvertellsDr.Taubthathe
cannotapproveanymorestategrants.
Dr.Taubnonethelesscontinuesreferring
patientstoSilver.
Silverawards$25,000instategrant Official
fundingtotheShalomTaskForce,a
May2008
nonprofitofwhichDr.Taubswifewas
aboardmember.
Statuteoflimitationsdate(5yearsfrom
Feb.19,2010
indictment)
50
SilverappearsinDr.Taubsofficeto NotOfficial
complainhehadbeenreceivingfewer
May25,2010 referrals.Followingthisconversation,Dr.
TaubcontinuestoprovideleadstoSilver
tomaintaintherelationship.
SilverhasstaffprepareanAssembly Official
resolutionandofficialproclamation
May2011
honoringDr.Taub,whichhelater
presentstoDr.Taubatapublicevent.
SilvermeetswithDr.Taubandothersto Official
discussaMilesforMesocharityrace
thatDr.Taubwastryingtoorganizein
Fall2011 Silversdistrict.SilverthensendsDr.
Taubaletterofferingtohelphim
navigatethepermittingprocess.The
raceultimatelydoesnotoccur.
Silvermakestwocallsandsendsaletter Official
tohelpDr.Taubssongetajobwith
Winter2012 OHEL,anonprofitorganization
receivingmillionsinstatefunding
controlledbySilver.
Feb.19,2015 Indictment
51
ADDENDUMB:RealEstateSchemeTimeline1
services mail fraud), Count Four (honest services wire fraud), and Count Six
(HobbsActextortion)oftheindictment.
thegiveneventwasanofficialact.AllofficialactsarguedbytheGovernment
aredenotedasofficialandbolded.
52
SilvermeetswithGlenwoodlobbyists Official
todiscusspendingrealestatelegislation
toensurethatGlenwoodissatisfied
June2011 withthelegislation.Laterthatmonth,
SilvervotesfortheRentActof2011and
taxabatementrenewallegislation,both
benefitingGlenwood.
Silverpubliclyopposesrelocationofa Official
methadoneclinicproposedtobelocated
Dec.2011
nearaGlenwoodbuildinginSilvers
district.
SilverinformsaGlenwoodlobbyistofhis NotOfficial
feesharingarrangementwithGoldberg
Dec.2011
sinceproposedretaineragreements
referencingSilverweresenttoGlenwood.
Glenwoodexecutessecretfeesharing NotOfficial
Jan.2012
sideletterwithSilver.
WitkofflearnsaboutSilversfeesharing NotOfficial
duringacallwithGoldberg,whohad
June2014 receivedagrandjurysubpoenain
connectionwiththeGovernments
investigationofSilver.
Feb.19,2015 Indictment
TwoRealEstateSchemeeventsoccurredrepeatedlybothbeforeand
duringtheperiodoftimecapturedbythestatuteoflimitations
period.TheGovernmentarguesbothareofficialacts.
Silverrepeatedlyvotes,throughaproxy,asoneofthree
vetowieldingmembersofthePACB,toapprove
Glenwoodsrequestsfortaxexemptfinancing.
53
Silverregularlyapprovesandvotesforrentandtax
abatementlegislationsoughtby,amongothers,
Glenwood.
54