2001 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

11-28-2001

USA v. Antico

Precedential or Non-Precedential:

Docket 00-1446

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Recommended Citation

"USA v. Antico" (2001). 2001 Decisions. Paper 278.

http://digitalcommons.law.villanova.edu/thirdcircuit_2001/278
Filed November 28, 2001 

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

NO. 00-1446 

UNITED STATES OF AMERICA 

v. 

FRANK ANTICO, 

 Appellant 

On Appeal From the United States District Court 

For the Eastern District of Pennsylvania 

(D.C. Crim. No. 98-242-01) 

District Judge: Honorable Jan E. DuBois 

Argued: April 5, 2001 

Before: SCIRICA, AMBRO AND GIBSON* 

Circuit Judges 

(Filed: November 28, 2001) 

_________________________________________________________________ 

*Honorable John R. Gibson, United States Circuit Judge for the Eighth 

Circuit, sitting by designation. 
 Thomas Colas Carroll, 

 Esquire (Argued) 

 Mark E. Cedrone, Esquire 

 Carroll & Cedrone 

 Suite 940 Public Ledger Building 

 150 S. Independence Mall West 

 6th and Chestnut Streets 

 Philadelphia, PA 19106 

 Attorneys for Appellant, 

 Frank Antico, Sr. 

 Michael R. Stiles, Esquire 

 United States Attorney, 

 Eastern District of 

 Pennsylvania 

 Robert E. Courtney, Esquire 

 Assistant United States Attorney 

 Chief, Organized Crime Division 

 Walter S. Batty, Jr., Esquire 

 Assistant United States Attorney 

 Richard P. Barrett, Esquire (Argued) 

 Assistant United States Attorney 

 615 Chestnut Street, Suite 1250 

 Philadelphia, PA 19106 

 Attorneys for Appellee, United States 

 of America 

OPINION OF THE COURT 

AMBRO, Circuit Judge: 

Frank Antico, Sr. ("Antico") appeals his conviction and 

sentence in the United States District Court for the Eastern 

District of Pennsylvania ("District Court") on one count of 

racketeering in violation of 18 U.S.C. S 1962(c)--part of the 

Racketeer Influenced and Corrupt Organizations Act 

("RICO"),1 nine substantive counts of extortion in violation 

_________________________________________________________________ 

1. Section 1962(c) provides that 

 2 
of 18 U.S.C. S 1951 (known as the Hobbs Act), and eight 

substantive counts of wire fraud in violation of 18 U.S.C. 

S 1343. 

On appeal, Antico asserts that he is entitled to a new 

trial for three reasons: (1) the District Court's failure to 

instruct the jury, during its charge on Hobbs Act extortion, 

of the necessity of finding an inducement or a quid pro quo; 

(2) the failure of the Government to prove a scheme to 

defraud the citizens of Philadelphia of their intangible right 

to his honest services; and (3) the insufficiency of the 

District Court's jury instruction on materiality as an 

element of wire fraud. We reject these allegations of error 

and affirm Antico's conviction on Counts One through 

Sixteen of the superseding indictment. 

Antico also argues that his conviction of wire fraud on 

Counts Seventeen and Eighteen, which involve his securing 

permits for a prostitution business after he left the City of 

Philadelphia's Department of Licenses and Inspections, 

should be reversed as a result of the Supreme Court's 

ruling in Cleveland v. United States, 531 U.S. 12 (2000), 

that such a permit does not constitute property within the 

meaning of the wire fraud statute. We agree, and reverse 

Antico's conviction on these counts. 

Finally, Antico challenges the District Court's 

enhancement of his sentence for a leadership role in an 

otherwise extensive criminal extortion activity and its loss 

computation on the wire fraud counts. In light of our 

reversal of conviction on two of the wire fraud counts, and 

_________________________________________________________________ 

 [i]t shall be unlawful for any person employed by or associated 

with 

 any enterprise engaged in, or the activities of which affect, 

interstate 

 or foreign commerce, to conduct or participate, directly or 

indirectly, 

 in the conduct of such enterprise's affairs through a pattern of 

 racketeering activity or collection of unlawful debt. 

In order to find a pattern of racketeering activity, the Government must 

prove that at least two of the sixteen racketeering acts charged were 

connected by a common scheme, plan or motive, and that at least two 

of the racketeering acts were committed within ten years of each other 

(one of which occurred within the five year statute of limitations). 

 3 
for other reasons stated in this opinion, we vacate Antico's 

sentence and remand to the District Court for resentencing. 

I. Factual and Procedural Background 

Antico's indiscretions, which we summarize in this 

section, expose a pervasive abuse of government services. 

In the following recitation of the schemes on which Antico's 

conviction was based, we construe the facts in the light 

most favorable to the Government, as we must following the 

jury's guilty verdict. Glasser v. United States , 315 U.S. 60, 

80 (1942). 

Between 1983 and January, 1996, Antico held various

positions at the Department of Licenses and Inspections 

("L&I") for the City of Philadelphia (the"City"). L&I's 

function is to administer and enforce the City's code 

requirements, including building, electrical, fire, health, 

housing, business, and zoning regulations. Officials of L&I 

are empowered to issue zoning and use permits and 

licenses according to a first-come-first-served policy, 

conduct inspections, and enforce applicable codes and 

regulations through citations and cease and desist orders. 

Persons aggrieved by these decisions may appeal to the 

Zoning Board of Adjustment ("ZBA"). Antico worked at L&I 

at various times as a Zoning Examiner, a Code 

Administrator, and the Business Regulatory Enforcement 

Director. In these positions, he had the discretionary 

authority to approve zoning and use permits and licenses, 

and to cite and close businesses for violations of the City's 

ordinances and the laws of Pennsylvania, particularly those 

governing adult cabarets and topless bars. The extortion 

and wire fraud schemes that Antico concocted while he was 

a public official at L&I and after he left its employ are 

detailed below. 

A. Extortion Schemes -- RICO Acts 1-13, 15, 16 and 

Extortion Counts 2-10 

1. Extortion of Westside Check Cashing 

On December 22, 1994, L&I closed for zoning violations 

one of Westside Check Cashing's stores, located at 5th and 

Lehigh Avenues in Philadelphia. The controller of the check 

 4 
cashing business met with Antico the next day to discuss 

reopening the business. Antico explained that Westside had 

to file a new application for a zoning and/or use 

registration permit and make other changes. 

Several days later, Antico called the controller and the 

owner of the business and told them he wanted a piece of 

jewelry to give to his wife for their anniversary. They 

selected some items, including a diamond pendant 

appraised at $3,275, and sent them to Antico's office by 

courier. The owner and his controller testified that they 

decided to send the jewelry to Antico and not bill him for it 

because of Antico's position with L&I. The zoning issue that 

led to the store closing on December 22 was still pending 

and they were concerned that Antico would use his position 

with L&I to keep the business closed. They understood from 

their conversation with Antico that he did not intend, nor 

did he ever offer, to pay for the jewelry. Once the conditions 

of the permit were satisfied, Antico permitted the store to 

reopen. 

2. Extortion of Maureen McCausland2 

Maureen McCausland met Antico in 1983 when Antico 

was working in L&I's zoning section. McCausland 

approached Antico to obtain a zoning and/or use permit 

registration for a prostitution business at 2132 Market 

Street in Philadelphia. Her zoning application read"nude 

modeling studio" and Antico advised her instead to call the 

business a "modeling studio" on the application. 

McCausland did so, and she received the license. She later 

paid Antico $500 for getting the permit for her. 

This began a pattern of Antico receiving payments from 

McCausland for approval of zoning and/or use registration 

permits for a number of other prostitution businesses she 

opened over the years. She paid Antico $500 when she 

applied for the permit and $500 when she received it. 

McCausland also paid Antico additional sums of money and 

had sex with him so that he would use his position at L&I 

_________________________________________________________________ 

2. The Maureen McCausland extortion scheme was charged as a 

racketeering act but not a separate, substantive Hobbs Act extortion 

count. 

 5 
to protect her business. For example, when Antico was 

placed in charge of enforcement, he alerted her to the police 

department's efforts to close her business. McCausland 

estimated that Antico extorted approximately $8,000 from 

her during the period covered by the superseding 

indictment. 

McCausland's testimony was corroborated by the 

applications for zoning and use registration permits 

introduced into evidence. These applications were prepared 

by Antico and listed the use as "modeling studio" or 

"physical therapy." 

3. Extortion of Adult Cabarets in Philadelphia-- 

 Wizzards, Pin Ups, Tattletales and Teazers 

Between 1993 and 1995, Antico served as the Business 

Regulatory Enforcement Director for L&I, supervising the 

unit that enforced compliance with the zoning code. Most 

pertinent to this scheme, Antico was responsible for 

regulating adult cabarets and their compliance with the 

zoning code. 

The Philadelphia Code defines an adult cabaret as"[a]n 

adult club, restaurant, theater, hall or similar place which 

features topless dancers, go-go dancers, exotic dancers, 

strippers, male or female impersonators or similar 

entertainers exhibiting specified anatomical areas or 

performing specified sexual activities." Philadelphia Code 

S 14-1605. A business that meets this definition is

considered a regulated use and is prohibited from operating 

within 1,000 feet of another regulated use or within 500 

feet of a residential area. According to L&I policies, all adult 

cabarets are required to be licensed or to receive a variance 

from the ZBA. In addition, the dancers at a licensed cabaret 

(or a cabaret permitted to operate as such while it sought 

a license) cannot perform in a lewd or obscene manner.3 

_________________________________________________________________ 

3. L&I incorporated the Philadelphia Code definition of obscenity in 

determining what constituted a lewd performance by a dancer. See 

Philadelphia Code SS 10-1100 through -1103. Dancers were thereby 

prohibited from touching patrons and participating in actual or 

simulated sexual acts on stage. Additionally, the dancers were required 

to wear bottoms and latex pasties to cover their breasts. 

 6 
a. Wizzards 

The scheme with respect to Antico's extortion of Wizzards 

began with John Messina, John Meehan, and Frank Antico, 

Jr. (Antico's son) forming Pan Enterprises, Inc. to operate 

Wizzards, an adult cabaret located at 38th and Chestnut 

Streets in Philadelphia. Initially, Messina provided the 

start-up money and held 89% of the corporation. Messina 

gave 10% and the manager position to Meehan because of 

his experience in operating topless clubs. Meehan, in turn, 

introduced Messina to Antico, Jr. 

Meehan and Antico, Jr. told Messina that if Antico, Jr. 

received a 1% interest in Pan Enterprises and a position as 

a weekend manager, defendant Antico would use his 

position with L&I to help Wizzards operate. Messina agreed 

to this arrangement and to paying Meehan and Antico, Jr. 

part of their weekly salaries in cash without reporting it to 

the taxing authorities. 

Antico guided Wizzards through the permitting and 

licensing process at L&I. In addition, when Wizzards 

opened for business on September 23, 1993, Antico 

arranged to have two competing clubs shut down for code 

violations. After Wizzards opened, Antico frequented the 

club and received complimentary drinks, food, and parties 

for himself and his friends. While Antico was present, the 

dancers violated the code restrictions on lewd dancing, yet 

Antico issued neither citations nor cease and desist orders. 

After operating Wizzards for a few months, Messina and 

other investors began to quarrel with Meehan and Antico, 

Jr. over the club's management. Although the club was 

crowded and appeared to be doing well, the books did not 

reflect this success. When Messina and the investors tried 

to take a more active role in the club's management, 

Meehan and Antico, Jr. objected and threatened to have 

L&I shut the club down. In fact, in March 1994, Antico 

came into the club and closed it down because the dancers 

were performing in a lewd manner. A former employee of 

Wizzards testified that Meehan told that employee that he 

knew the club would be shut down, but would be permitted 

to reopen the next day. According to this employee, Meehan 

was "flexing his muscles." 

 7 
In June 1994, Eugene Johnson took over Messina's 

ownership interest in Wizzards as repayment of a debt. 

Johnson brought in Dorothy Davis from his New Jersey 

establishment to observe how Meehan and Antico, Jr.

operated the club. Davis reported that most of the 

employees, including Meehan and Antico, Jr., were getting 

paid cash under the table, that Antico, Jr. was being paid 

a large salary for doing very little, and that the dancers 

were performing in violation of the L&I policies. Johnson 

instructed Davis to put all employees on the books, cut 

Antico, Jr.'s salary or fire him, and require all dancers to 

conform to L&I restrictions on dancing. 

When Davis informed Meehan of these instructions, 

Meehan responded that Antico, Jr.'s father was the head of 

L&I and that Wizzards was operating at his mercy. On June 

16, 1994, Meehan and Antico, Jr. resigned their 

employment with Wizzards. Within two hours defendant 

Antico closed Wizzards for lewd dancing. 

b. Pin Ups 

In August of 1995, Antico, Antico, Jr., and Meehan met 

with the owners of Pin Ups to discuss the sale of the club 

to Antico, Jr. and Meehan. At a follow-up meeting, the 

owners turned down the offer made by Antico, Jr. and 

Meehan. Two weeks later, on September 8, 1995, L&I 

inspectors arrived at Pin Ups, conducted an inspection and 

closed the club for electrical violations. 

Prior to the closure, some of the Pin Ups dancers knew 

the club was going to be shut down and arranged to dance 

at Tattletales, another topless club located nearby. The 

owners of Tattletales also knew that Pin Ups was going to 

be shut down and arranged for additional staffing and 

liquor for the night. 

On the night of the inspection, one of the owners of Pin 

Ups, suspecting that the closure was in response to their 

refusal to sell the club, told defendant Antico that if Pin 

Ups was not reopened the next day, he was going to"call 

the Feds." Antico permitted Pin Ups to reopen before the 

electrical violations were corrected. 

c. Tattletales 

Steve Owens and Greg Bertino opened Tattletales in July 

1995. Antico was a regular customer and advised the two 

 8 
on the Code and the obscenity rules. Antico took them to 

other topless clubs to view couch dancing and urged them 

to put a couch dancing room into Tattletales. Antico told 

them to call him if they ever had any problems. 

Despite Antico's advice, the dancers at the club did not 

follow the dancing restrictions or the Code. Antico, 

however, did not cite the club for violations. Instead, he 

was treated to free drinks, meals, and couch dances. 

Owens and Bertino did this to gain favor with Antico and to 

maintain good relations with L&I. The two also gave Antico 

$500. 

d. Teazers 

Thomas Killeen was an owner of Teazers, a topless club 

located at 20th Street and Oregon Avenue in Philadelphia. 

In connection with the opening on September 23, 1993 of 

Wizzards, Antico closed Teazers and another bar owned by 

Killeen because the dancers were violating L&I restrictions. 

Subsequent to its reopening, Antico began to patronize 

Teazers. Killeen would socialize with Antico and give him 

free drinks. Antico eventually asked Killeen for, among 

other things, the repeated use of one of Killeen's limousines 

from his limousine company. Killeen acquiesced because of 

Antico's position in L&I and never billed him for the use. 

Killeen ultimately hired limousines from other companies 

because he did not want Antico to be seen in one of his 

vehicles. In addition, Antico asked for, and Killeen let him 

use, six field-level box seats for several Phillies games. 

Antico gave Killeen a list of games he wanted to attend and 

sent an L&I employee to pick up the tickets. 

4. Beach Club 

Frank Cascerceri was the owner of the Beach Club, a

nightclub formerly located along the Delaware River in 

Philadelphia. Cascerceri testified that he built a pool at the 

club and hired an expediter4 to apply for permits from L&I. 

_________________________________________________________________ 

4. Expediters are independent contractors who, in exchange for a fee, 

represent individuals and businesses before L&I and the ZBA. Expediters 

typically prepare the paperwork required to obtain permits, licenses, or 

variances by L&I or the ZBA. Expediters may interact with employees of 

L&I during the process, and appear at public hearings before the ZBA. 

 9 
The expediter prepared the necessary application and filed 

it with L&I. Because the club was scheduled to open in the 

Spring of 1993, Cascerceri became frustrated when L&I 

delayed issuing the permit. He called Antico and explained 

the urgency of getting the permit. Antico told him that he 

was using the wrong expediter, and that he should hire 

Elizabeth Ricciardi5 to expedite his application for the 

permit. Antico spoke to Ricciardi before Cascerceri did and 

urged her to take the employment. 

To avoid the risk of not getting L&I approval, Cascerceri 

hired Ricciardi. He paid her $625 for her assistance, 

although Ricciardi testified that she did very little to obtain 

the permit. Shortly after he hired Ricciardi, Cascerceri 

received his approval from L&I. 

5. Extortion of Barbara Williams6 

Barbara Williams worked as an expediter in Philadelphia 

from 1984 to 1989. To circumvent L&I's first-come-firstserved rule of processing applications, Williams would turn 

to Antico on her urgent matters and pay him to process her 

paperwork ahead of others. She also paid Antico to prepare 

particularly complex zoning applications. Typically, 

Williams would give Antico batches of permits to process at 

one time, and paid him according to the number of 

applications he processed. The payments ranged from $30 

to $75 per application. Williams estimated that Antico 

extorted approximately $5,000 from her during her work as 

an expediter. 

B. Mail and Wire Fraud Scheme Involving Elizabeth 

 Ricciardi -- RICO Acts 14A-F and Wire Fraud Counts 

 11-16 

Antico's employment with L&I required him to refrain 

from using his position to secure advantages for himself or 

his family members. The Philadelphia Code provides that 

_________________________________________________________________ 

5. Ricciardi is the subject of the mail and wire fraud racketeering acts 

and the substantive wire fraud offenses in Counts 11-16. See the 

discussion of the Ricciardi mail and wire fraud schemes, infra at part 

I.B. 

6. The Barbara Williams extortion scheme was charged as a racketeering 

act but not a separate Hobbs Act extortion count. 

 10 
city employees must disclose publicly a conflict of interest 

and recuse themselves from taking any official action in a 

matter where they have a financial interest.7 In addition, 

state ethics laws prohibited him from using his employment 

for private pecuniary gain.8 See 65 Pa. C.S.A. SS 401-409, 

repealed by P.L. 729, No. 93, S 6(a)(2) (Oct. 15, 1998), and 

replaced with 65 Pa. C.S.A. SS 1101.1-1108. These code 

provisions are implicated by Antico's arrangement with 

Elizabeth Ricciardi. 

In the late 1980s, Ricciardi had two children by Antico. 

Initally, Antico failed to make child support payments, 

forcing Ricciardi to file a child support petition in the 

Philadelphia Court of Common Pleas, Family Court 

_________________________________________________________________ 

7. Section 20-607 of the Philadelphia Code, titled Conflict of Interest, 

states in relevant part: 

 Unless there is public disclosure and disqualification . . . , no 

City 

 officer or employee shall be financially interested in any 

legislation, 

 including ordinances and resolutions, award, contract, lease, case, 

 claim, decision, decree or judgment made by him in his official 

 capacity . . ., nor shall any financial interest be held by a 

parent, 

 spouse, child, brother, sister or like relative-in-law, or by any 

 person, firm, partnership, corporation, business association, 

trustee 

 or straw party for his or her benefit. 

8. The State Ethics Act provides that "[n]o public official or public 

employee shall engage in conduct that constitutes a conflict of interest." 

65 Pa. C.S.A. S 403. The Ethics Act defined a conflict of interest as 

follows: 

 Use by a public official or public employee of the authority of his 

 office or employment or any confidential information received 

 through his holding public office or employment for the private 

 pecuniary benefit of himself, a member of his immediate family or a 

 business with which he or a member of his immediate family is 

 associated. "Conflict" or "conflict of interest" does not include 

an 

 action having a de minimis economic impact or which affects to the 

 same degree a class consisting of the general public or a subclass 

 consisting of an industry, occupation or other group which includes 

 the public official or public employee, a member of his immediate 

 family or a business with which he or a member of his immediate 

 family is associated. 
65 Pa. C.S.A. S 402. The statute currently in effect is virtually 

identical 

to the provision cited above. See 65 Pa. C.S.A. S 1102. 

 11 
9. The Philadelphia Sign Company, located in New Jersey, was one of 

Ricciardi's clients. Telephone calls from Ricciardi in Philadelphia to the 

client in New Jersey on six separate occasions in December of 1993 

serve as the basis for the substantive wire fraud offenses in Counts 

Eleven through Sixteen. The use of the mails with respect to the same 

client constituted the mail fraud racketeering acts proven as predicate 

acts under the RICO Count. 

Division. The child support order at that time was $60 per 

week. Antico volunteered to pay child support if Ricciardi 

would withdraw the petition, which she agreed to do. He 

made three payments, then stopped. 

In lieu of the payments, Antico offered to establish 

Ricciardi as an expediter. She was reluctant to accept, 

knowing nothing about the expediting business, but Antico 

told her that he would take care of everything. This was not 

an empty promise. Antico referred clients to Ricciardi who 

needed licenses and permits from L&I. Ricciardi would call 

Antico when a client hired her. Antico would then tell 

Ricciardi how to fill out the applications or would complete 

them himself. Ricciardi was known to use Antico's office at 

L&I to do her work, and he would have city employees pick 

up and deliver her paperwork and watch her children. 

Antico personally worked on 564 of the 748 building

permit, and 288 of the 322 zoning permit, applications filed 

by Ricciardi and submitted them under her name. 9 

Moreover, Antico was the one who approved the permits 

and applications submitted by her business. Antico neither 

publicly disclosed a conflict of interest nor disqualified 

himself from taking official action in these matters, as 

required by Section 20-607 of the Philadelphia Code. As a 

result of this arrangement, Ricciardi admits to earning over 

$700,000 during the course of the arrangement. 

In 1993, upon discovering that Antico was signing permit 

applications on behalf of Ricciardi, L&I Commissioner Levin 

transferred Antico and moved the responsibility for permit 

approvals to a different manager. Antico was no longer the 

head of the zoning department, and his job responsibilities 

no longer included approving permit applications. 

 12 
C. Wire Fraud Scheme Involving Maureen McCausland 

 Counts Seventeen and Eighteen10 

In January 1996, Antico left L&I and established an

expediting business in Philadelphia under the name Frank 

P. Antico, Zoning Consultant, Advisor, and Technician of 

the Philadelphia Code. In 1997, Maureen McCausland 

requested Antico's services to reopen a prostitution 

business. Unbeknown to Antico, McCausland was 

cooperating with the Federal Bureau of Investigation ("FBI") 

at the time and this request was part of a Government 

operation. Antico assisted McCausland with her permit 

application, which declared the facility to be a modeling 

studio/physical fitness business at 1212 Walnut Street, 

Philadelphia.11 Antico attempted to hide his involvement by 

having another expediter submit the applications. 

* * * * * 

On September 30, 1998, a federal grand jury in the 

Eastern District of Pennsylvania returned an eighteen count 

superseding indictment. The Government charged Antico 

with sixteen racketeering acts under the umbrella of one 

RICO count (Count One), nine of which were also charged 

as substantive Hobbs Act extortion counts (Counts Two 

through Ten), and six of which were charged as substantive 

wire fraud counts (Counts Eleven through Sixteen). Antico 

was charged with two additional substantive wire fraud 

counts (Counts Seventeen and Eighteen) that do not fall 

under the RICO umbrella count. The jury convicted Antico 

of all eighteen counts in the superseding indictment. With 

respect to the RICO count, the jury concluded that fifteen 

of the sixteen predicate racketeering acts were proven.12 

_________________________________________________________________ 

10. The Maureen McCausland wire fraud scheme charged in Counts 

Seventeen and Eighteen is not part of the RICO Count. 

11. The two communicated via interstate phone calls to set up meetings 

to discuss the application and how to circumvent the L&I regulations. 

These conversations were taped by the FBI. 

12. The jury concluded that Racketeering Act 2 was not proven. This act, 

which occurred in March 1993, was the exchange of $500 for obtaining 

the zoning and/or use registration permit that falsely declared that 

McCausland operated a "modeling studio" at 2132 Market Street. 

However, this is not fatal to the conviction on the RICO count because 

the jury concluded that Racketeering Acts 3 through 6, which pertained 

to the same extortion scheme involving McCausland, as well as 

Racketeering Acts 7 through 16, were proven. 

 13 
On April 28, 2000, Antico was sentenced to terms of

sixty-three months imprisonment on Counts One through 

Ten (RICO and extortion) and to terms of sixty months 

imprisonment on Counts Eleven through Eighteen (wire 

fraud). All terms were to be served concurrently. 13 In 

addition, Antico was sentenced to three years supervised 

release, ordered to pay a fine of $10,000 and a special 

assessment of $1,000, and ordered to forfeit $52,900. 

II. Legal Discussion 

This Court has jurisdiction of an appeal from a judgment 

of conviction and sentencing pursuant to 28 U.S.C.S 1291. 

On appeal, Antico alleges three points of trial error and 

challenges his sentence on two grounds. We address each 

allegation of error in turn. 

A. Requirement of Inducement or Quid Pro Quo in Hobbs 

 Act Extortion 

Antico challenges the District Court's instructions to the 

jury with respect to Hobbs Act extortion under "color of 

official right." The Hobbs Act provides in relevant part: 

 (a) Whoever in any way or degree obstructs, delays, or 

 affects commerce or the movement of any article or 

 commodity in commerce, by robbery or extortion or 

 attempts or conspires so to do, or commits or threatens 

 physical violence to any person or property in 

 furtherance of a plan or purpose to do anything in 

 violation of this section shall be fined not more than 

 $10,000 or imprisoned not more than twenty years, or 

 both. 

 (b) As used in this section-- 

 . . . 

 (2) The term `extortion' means the obtaining of 

 property from another, with his consent, induced 

_________________________________________________________________ 

13. The District Court grouped for sentencing purposes the RICO and 

extortion counts in one group and the wire fraud counts in a second 

group. It then imposed a sentence based on the groups rather than on 

the individual counts. 

 14 
 by wrongful use of actual or threatened force, 

 violence, or fear, or under color of official right. 

18 U.S.C. S 1951 (emphasis added). Thus, the statute 

supports two classes of extortion: extortion induced by 

"wrongful use of force" and extortion "under color of official 

right."14 The latter is at issue in this case. 

Specifically, Antico argues that the District Court should 

have charged the jury to determine whether he induced his 

extortion victims into giving him gifts and favors with a 

promise or threat of an official act in return or, at a 

minimum, that a quid pro quo was reached between them. 

This Court exercises plenary review over the alleged failure 

of the District Court to charge the jury properly on a matter 

of law. United States v. Bradley, 173 F.3d 225, 230 (3d Cir. 

1999). 

1. Inducement 

With respect to Antico's claim that an inducement 

instruction should have been charged to the jury as per 

subsection (b)(2) of the Hobbs Act, the Supreme Court in 

Evans v. United States, 504 U.S. 255 (1992), clearly 

rejected inducement as an element of the offense of

extortion "under color of official right." Id. at 256. The 

Supreme Court affirmed the ruling of the Court of Appeals 

for the Eleventh Circuit, which held that 

 the requirement of inducement is automatically 

 satisfied by the power connected with the public office. 

 Therefore, once the defendant has shown that a public 

 official has accepted money in return for a requested 

 exercise of official power, no additional inducement 

 need be shown. The coercive nature of the official office 

 provides all the inducement necessary. 

_________________________________________________________________ 

14. See United States v. Jannotti, 673 F.2d 578 (3d Cir. 1982) (ruling 

Hobbs Act covers actions by public officials under color of official right 

even when the payment is not obtained by force, threats nor use of 

force); United States v. Margiotta, 688 F.2d 108, 130-31 (2d Cir. 1982) 

("The public officer's misuse of his office supplies the necessary element 

of coercion, and the wrongful use of official power need not be 

accompanied by actual or threatened force, violence or fear."). 

 15 
United States v. Evans, 910 F.2d 790, 796-97 (11th Cir. 

1990). Relying on the common law of extortion, the 

Supreme Court agreed and held that "the word`induced' is 

a part of the definition of the offense by the private 

individual, but not the offense by the public official. . . . 

The statute merely requires of the public official that he 

obtain `property from another, with his consent, . . . under 

color of official right.' " Evans, 504 U.S. at 265. Thus, 

Antico's claim that an inducement instruction should have 

been given fails. 

2. Quid Pro Quo 

Antico also asserts that the District Court should have 

charged the jury to find a specific quid pro quo . He cites to 

a trilogy of Supreme Court cases -- McCormick v. United 

States, 500 U.S. 257 (1991), Evans v. United States, 504 

U.S. 255, and United States v. Sun Diamond Growers of 

Cal., 526 U.S. 398 (1999) -- in support of his argument. 

Antico begins by citing to the cornerstone Supreme Court 

case on Hobbs Act extortion--McCormick, which held that 

an explicit quid pro quo is necessary for conviction under 

the Hobbs Act when a public official receives a campaign 

contribution. In McCormick, the Supreme Court ruled that 

the District Court erred by instructing the jury that such a 

quid pro quo was not necessary. McCormick 500 U.S. at 274.15 

The logic the Supreme Court employed in McCormick 

follows the fine line between what is legal campaign activity 

and the "forbidden zone of conduct." 

 [T]o hold that legislators commit the federal crime of 

 extortion when they act for the benefit of constituents 

 or support legislation furthering the interests of some 

 of their constituents, shortly before or after campaign 

 contributions are solicited and received from those 

_________________________________________________________________ 

15. The District Court's instructions in McCormick did not omit passively 

a quid pro quo element, as the District Court did in the case before us. 

Instead, the District Court affirmatively stated that "it is not necessary 

that the government prove that the defendant committed or promised to 

commit a quid pro quo, that is, consideration in the nature of an official 

action in return for the payment of the money not lawfully owed." Id. at 

261 n.4 (emphasis added). 

 16 
 beneficiaries, is an unrealistic assessment of what 

 Congress could have meant by making it a crime to 

 obtain property from another, with his consent,"under 

 color of official right." To hold otherwise would open to 

 prosecution not only conduct that has long been 

 thought to be well within the law but also conduct that 

 in a very real sense is unavoidable so long as election 

 campaigns are financed by private contributions or 

 expenditures, as they have been from the beginning of 

 the Nation. It would require statutory language more 

 explicit than the Hobbs Act contains to justify a 

 contrary conclusion. 

Id. at 272-73. 

Because the line is so subtle, the Supreme Court ruled in 

McCormick that an overt quid pro quo is a necessary proof 

in the context of campaign contributions. 

 The receipt of such contributions is also vulnerable 

 under the Act as having been taken under color of 

 official right, but only if the payments are made in 

 return for an explicit promise or undertaking by the 

 official to perform or not to perform an official act. In 

 such situations the official asserts that his official 

 conduct will be controlled by the terms of the promise 

 or undertaking. This is the receipt of money by an 

 elected official under color of official right within the 

 meaning of the Hobbs Act. 

Id. at 273. 

Antico appears to favor extending the McCormick explicit 

quid pro quo ruling to non-elected public employees outside 

the context of campaign contributions because the state of 

mind necessary to convict in the two contexts is the same. 

However, the Supreme Court noted that its holding was 

limited to campaign contributions. 

 McCormick does not challenge any rulings of the 

 courts below with respect to the application of the 

 Hobbs Act to payments made to nonelected officials or 

 to payments made to elected officials that are properly 

 determined not to be campaign contributions. Hence, 

 we do not consider how the "under color of official 

 17 
 right" phrase is to be interpreted and applied in those 

 contexts. 

Id. at 268-69. In light of this express limitation, we decline 

Antico's invitation to extend McCormick to apply to his 

situation. The quid pro quo can be implicit, that is, a 

conviction can occur if the Government shows that Antico 

accepted payments or other consideration with the implied 

understanding that he would perform or not perform an act 

in his official capacity "under color of official right." 

In Evans, decided one year after McCormick, the Supreme 

Court ruled that a jury instruction containing an implicit, 

as opposed to an explicit, quid pro quo requirement in the 

context of campaign contributions passed muster under 

McCormick. The Supreme Court stated: 

 We reject petitioner's criticism of the instruction, and 

 conclude that it satisfies the quid pro quo requirement 

 of McCormick v. United States, because the offense is 

 completed at the time when the public official receives 

 a payment in return for his agreement to perform 

 specific official acts; fulfillment of the quid pro quo is 

 not an element of the offense. . . . We hold today that 

 the Government need only show that a public official 

 has obtained a payment to which he was not entitled, 

 knowing that the payment was made in return for 

 official acts. 

Evans, 504 U.S. at 268. In other words, no"official act" 

(i.e., no "quo") need be proved to convict under the Hobbs 

Act. Nonetheless, the official must know that the payment 

-- the "quid"-- was made in return for official acts. 

Outside the campaign contribution context, where 

Antico's case falls, the line between legal and illegal 

acceptance of money is not so nuanced. The Hobbs Act 

simply states that use of one's office to obtain money or 

services not due is extortion: "the Government need only 

show that a public official has obtained a payment to which 

he was not entitled, knowing that the payment was made in 

return for official acts." Id. Antico would read into the 

phrase "knowing the payment was made in return for 

official acts" a requirement that the jury be instructed 

using the express words "quid pro quo." 

 18 
We echo the Supreme Court's satisfaction with an 

implicit quid pro quo requirement. In United States v. 

Bradley, 173 F.3d 225 (3d Cir. 1999), we considered the 

question of whether, in a non-campaign contribution Hobbs 

Act extortion case, an express agreement must be shown. 

Relying on Justice Kennedy's concurrence in Evans, we 

agreed that " `the official and the payor need not state the 

quid pro quo in express terms, for otherwise the law's effect 

could be frustrated by knowing winks and nods.' " Bradley, 

173 F.3d at 231 (citing Evans, 504 U.S. at 274). 

In addition, we rejected Antico's argument when we 

affirmed, in part, the District Court's holding in United 

States v. McDade, 28 F.3d 283 (3d Cir. 1994), affirming in 

part and dismissing on other grounds, 827 F. Supp. 1153 

(E.D. Pa. 1993). Analyzing both the McCormick and Evans 

cases, the District Court in McDade concluded that "[g]iven 

the language of the Supreme Court's opinion, I find that 

McCormick does not require a quid pro quo for extortion 

outside the context of campaign contributions." 827 F. 

Supp. at 1171; accord United States v. Davis, 967 F.2d 516 

(11th Cir. 1992). "[S]ince I can find no language in the 

Opinion of the Court in Evans which explicitly extends the 

quid pro quo requirement, and since the facts of Evans did 

not require the Court to extend McCormick, I respectfully do 

not interpret the Court's opinion so broadly as did those 

concurring and dissenting Justices [in Evans ]." McDade, 

827 F. Supp. at 1171 n.8. We reiterate our agreement with 

McDade. 

The relevant inquiry is whether the District Court's 

instruction satisfied the implicit quid pro quo requirement 

where non-campaign contribution Hobbs Act "color of

official right" extortion is charged. A closer look at Evans' 

language on quid pro quo, as well as Bradley and McDade 

and the District Court's decision, all of which dealt with 

"color of official right" Hobbs Act extortion outside the 

campaign contribution context, lead to the conclusion that 

the District Court did not err in its jury charge. The proper 

instruction, as per the Evans Court, is"that the 

Government need only show that a public official has 

obtained a payment to which he was not entitled, knowing 

that the payment was made in return for official acts." 504 

 19 
U.S. at 268. The jury instruction we affirmed in Bradley 

reads as follows: 

 So if a public official agrees explicitly or implicitly to 

 take or withhold some action for the purpose of 

 obtaining money for someone else, that constitutes 

 extortion. The public official need not fulfill the promise 

 of the payor to do or not to do an official act, although 

 the official's failure to influence may be considered 

 along with all of his conduct in determining whether or 

 not he possessed the intent to commit the crime. The 

 crime is completed at the time when the public official 

 knowingly accepts the benefit in return for his 

 agreement to perform or not to perform an act related 

 to his office. Moreover, the government does not have to 

 prove that there was an express promise on the part of 

 the public official to perform a particular act at the time 

 of the payment. 

 In sum then, it is sufficient if the public official 

 understands that he is expected, as a result of the 

 payment, to exercise particular kinds of influence or to 

 do certain things connected with his office as specific 

 opportunities arise. 

Bradley, 173 F.3d at 231 (emphasis added). 

The District Court's charge to the jury in Antico's case, 

after specifically reading the relevant portions of the Hobbs 

Act, was as follows: 

 Extortion under color of official right is the use of one's 

 position as a public official or the authority of public 

 office to obtain money or services not due the official or 

 his public office. Such extortion violates the Hobbs Act. 

 . . . 

 If you decide that the defendant was given money or 

 goods or services not due the office he represents, you 

 must then decide whether the defendant used the 

 authority of his office or position to obtain the money, 

 goods or services. The third element is wrongful 

 obtained consent of the giver. The Government must 

 prove beyond a reasonable doubt that these items were 

 20 
 given to the defendant in connection with his power and 

 authority as a public official. 

 The giver may have initiated the exchange and the 

 parties may be on friendly terms. These are factors to 

 be considered in deciding whether the giver gave the 

 payments, goods or services because he believed the 

 defendant would use his office for acts not properly 

 related to his official duty or whether instead the giver 

 was making a voluntary contribution. 

 Unless you decide beyond a reasonable doubt that the 

 defendant knew the giver's consent was wrongfully 

 obtained, that is, that the money, goods or services were 

 given in connection with the defendant's misuse of his 

 official position rather than being given voluntarily, you 

 cannot convict the defendant. 

(Emphases added). 

No specific instruction to find an express quid pro quo 

was given. Nor did the District Court specifically negate 

such a requirement as the trial court did in McCormick. As 

the District Court noted, "I didn't not grant the 

Government's points, by the way, . . . which asked me to 

charge that no quid pro quo was required and no 

inducement was required. I just didn't charge it." Antico 

argues that a jury instruction failing to mention quid pro 

quo falls short of the mark. 

We disagree with Antico's interpretation of the Supreme 

Court's intent. Considering the District Court's instructions 

as a whole, and the highlighted phrases in particular, 

which require a finding of Antico's knowledge of a 

"connection" between the payment and the misuse of his 

office, we find that they sufficiently convey the implicit quid 

pro quo approved in Evans and Bradley. As a result, the 

District Court did not err in its charge to the jury. If Antico 

knew that payments or other consideration were extended 

to him to secure unwarranted favorable treatment in his 

official capacity, he is guilty of Hobbs Act extortion under 

color of official right without the need to prove that the 

official action (or inaction) occurred. 

Lastly, Antico cites to the recent case of United States v. 

Sun Diamond Growers of Cal., 526 U.S. 398 (1999), as an 

 21 
affirmation that the Supreme Court has retreated from its 

holding in Evans and returned to the position in McCormick 

that an express quid pro quo must be found. Notably, 

however, the Sun Diamond case was brought under the

federal gratuity statute, 18 U.S.C. S 201(b)(2), not the 

Hobbs Act. The crime of illegal gratuity "requires a showing 

that something of value was given, offered, or promised to 

a public official (as to the giver), or demanded, sought, 

received, accepted, or agreed to be received or accepted by 

a public official (as to the recipient), for or because of any 

official act performed or to be performed by such public 

official." Id. at 404. The Supreme Court reasoned that "[t]he 

insistence upon an `official act,' carefully defined, seems 

pregnant with the requirement that some particular official 

act be identified and proved." Id. at 406. 

As a result, the Court held in Sun Diamond that, "in 

order to establish a violation of 18 U.S.C. S 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." Id. at 414. Again, 

noting the subtle distinction between what is legal

campaign activity and the "forbidden zone of conduct," the 

Supreme Court recognized the peculiar results if it were to 

convict without a finding of any connection between the 

public official's intent and a specific official act. "It would 

criminalize, for example, token gifts to the President based 

on his official position and not linked to any identifiable act 

-- such as the replica jerseys given by championship sports 

teams each year during ceremonial White House visits." Id. 

at 406-07. Thus, in the context of campaign contributions 

under the illegal gratuity statute, Sun Diamond requires 

proof of a specific "quo," which Antico argues necessitates 

an express quid pro quo jury instruction. 

In contrast to the illegal gratuity statute, the Hobbs Act, 

as interpreted by both the Supreme Court and our Court, 

contains no express quid pro quo requirement in the noncampaign contribution context. The concerns over illegal 

campaign contributions addressed by the gratuity statute 

and the Hobbs Act -- solved by an express quid pro quo 

requirement in those cases -- do not automatically carry 

over to the line of cases dealing with Hobbs Act extortion as 

 22 
it pertains to non-elected officials. Accordingly, we do not 

read Sun Diamond to require a heightened quid pro quo jury 

instruction, distinct from that outlined in Evans, in this 

case. Because the District Court's jury instruction comports 

with that in Evans and Bradley, we reject Antico's 

allegation of error in this respect. 

B. Intangible Rights of Honest Services 

1. Sufficiency of the Government's Proof 

The jury found that the Government had proven all of the 

mail and wire fraud racketeering acts under the RICO 

count and found Antico guilty of all of the substantive 

counts of mail and wire fraud. On appeal, Antico challenges 

the sufficiency of the evidence with respect to the

fraudulent schemes. Again, sufficiency of the evidence is 

reviewed in a light most favorable to the Government 

following a jury verdict in its favor. Glasser v. United States, 

315 U.S. 60, 80 (1942). "We must sustain the verdict if 

there is substantial evidence, viewed in the light most 

favorable to the government, to uphold the jury's decision. 

. . . We do not weigh evidence or determine the credibility 

of witnesses in making this determination." United States v. 

Beckett, 208 F.3d 140, 151 (3d Cir. 2000) (citations 

omitted). The scope of review is over the totality of the 

evidence, both direct and circumstantial. United States v. 

Czubinski, 106 F.3d 1069, 1073 (1st Cir. 1997). 

In relevant part, the mail and wire fraud statutes provide: 

 Whoever, having devised or intending to devise any 

 scheme or artifice to defraud, or for obtaining money or 

 property by means of false or fraudulent pretenses, 

 representations, or promises . . . [uses the mails or 

 wires, or causes their use] for the purpose of executing 

 such scheme or artifice . . . shall be fined under this 

 title or imprisoned not more than five years, or both. 

18 U.S.C. SS 1341 & 1343. To prove mail or wire fraud, the 

evidence must establish beyond a reasonable doubt (1) the 

defendant's knowing and willful participation in a scheme 

or artifice to defraud, (2) with the specific intent to defraud, 

and (3) the use of the mails or interstate wire 

communications in furtherance of the scheme. United

 23 
States v. Clapps, 732 F.2d 1148, 1152 (3d Cir. 1984). 

Identical standards apply to the "scheme to defraud" under 

both the mail and the wire fraud statutes. United States v. 

Boots, 80 F.3d 580, 586 n.11 (1st Cir. 1996). 

Courts have interpreted the term " `scheme or artifice to 

defraud' [to] include a scheme or artifice to deprive another 

of the intangible right of honest services," United States v. 

Woodward, 149 F.3d 46 (1st Cir. 1998) (citing United States 

v. Sawyer, 85 F.3d 713, 723-24 (1st Cir. 1996)), giving rise 

to the "intangible rights doctrine."16 This doctrine reaches 

public and private fraud at the state and local levels, 

including prosecutions of public officials or employees who 

have failed to provide honest services to the citizenry they 

_________________________________________________________________ 

16. The intangible rights doctrine gradually developed as courts of 

appeals interpreted the mail fraud statute since its origin in the late 

1800s. In 1987, the Supreme Court overturned decades of mail and wire 

fraud jurisprudence in McNally v. United States , 483 U.S. 350 (1987), 

when it held that the mail and wire fraud statutes do not prohibit 

schemes to defraud individuals of their intangible right to honest 

government services. In response, Congress enacted the honest services 

amendment the next year. It provides: "For the purposes of this chapter, 

the term `scheme or artifice to defraud' includes a scheme or artifice to 

deprive another of the intangible right of honest services." 18 U.S.C. 

S 1346 (effective Nov. 11, 1988). Section 1346 was enacted without much 

comment and little legislative history. However, commentary and judicial 

reflection indicate that the statute was enacted to overturn McNally and 

restore the evolution of mail and wire fraud to its pre-McNally status. 

See 134 Cong. Rec. H11,251 (daily ed. Oct 21, 1988) (statement of Rep. 

Conyers) ("This amendment restores the mail fraud provision to where 

that provision was before the McNally decision."); Id. at S17,376 (daily 

ed. Nov. 10, 1988) (statement of Sen. Biden) ("This section overturns the 

decision in McNally v. United States. . . . Under the amendment, those 

statutes will protect any person's intangible right to the honest services 

of another, including the right of the public to the honest services of 

public officials."); Cleveland v. United States, 531 U.S. 12, 20 (2000) 

(noting "Congress amended the law specifically to cover one of the 

`intangible rights' that lower courts had protected under S 1341 prior to 

McNally: `the intangible right of honest services' "); United States v. 

DeVegter, 198 F.3d 1324, 1327 (11th Cir. 1999) (noting that " `Congress 

passed [S 1346] to overrule McNally and reinstate prior law' ") 

(alteration 

in original); United States v. Grandmaison, 77 F.3d 555, 556 (1st Cir. 

1996) (same, citing cases). 

 24 
serve.17 Although our interpretation of the scope of the mail 

and wire fraud statutes is not boundless, we have 

construed a "scheme or artifice to defraud" to encompass 

intangible rights. Clapps, 732 F.2d at 1149-53 (affirming 

the conviction of a county political party chairman who 

defrauded nursing home residents of their absentee ballots 

and marked them in favor of the party's candidate); United 

States v. Frankel, 721 F.2d 917, 920-21 (3d Cir. 1983) 

("Schemes to defraud come within the scope of the statute 

even absent a false representation."); United States v. Boffa, 

688 F.2d 919, 931 (3d Cir. 1982) (concluding that a scheme 

to defraud employees "of the loyal, faithful, and honest 

services of their union official alleges a crime within the 

scope of the mail fraud statute"). Given Congress' clear 

intent in enacting S 1346, we join with those courts that 

recognize that the scope of the amendment includes the 

prosecution of state and local officials and public employees 

for depriving the citizens they serve of their right to honest 

services.18 

_________________________________________________________________ 

17. See, e.g., Woodward, 139 F.3d 46 (affirming the conviction for mail 

and wire fraud on the "theft of honest services" theory where legislator, 

serving on the Joint Committee on Insurance, accepted illegal gratuities 

from insurance industry lobbyist); United States v. Silvano, 812 F.2d 754 

(1st Cir. 1987) (applying the mail fraud statute to local political 

corruption and affirming the conviction of a Boston city official who 

secretly arranged for a friend to receive commissions from the city's 

choice of health insurance provider); United States v. Margiotta, 688 F.2d 

108, 112-13 (2d Cir. 1982) (affirming the conviction of the chairman of 

a local Republican committee who fraudulently arranged for his 

associates to receive insurance contracts with local governments); see 

also Daniel W. Hurson, Mail Fraud, The Intangible Rights Doctrine, and 

the Infusion of State Law: A Bermuda Triangle of Sorts, 38 Hous. L. Rev. 

297, 305 & n.34 (2001) (citing cases). 

18. Antico argues that extension of the mail fraud statute to local 

political corruption runs counter to the heightened federalism concerns 

recently raised by the Supreme Court. See Cleveland, 531 U.S. at 25 ("As 

we reiterated last Term, `unless Congress conveys its purpose clearly, it 

will not be deemed to have significantly changed the federal-state 

balance' in the prosecution of crimes."). However, Antico's argument is 

misplaced. While the Supreme Court recently voiced federalism concerns 

over the reach of mail fraud prosecutions in general in Cleveland, it 

acknowledged that Congress indeed spoke clearly when it restored the 

"intangible right of honest services" within the scope of S 1346. Id. at 

20. 

Moreover, we need not reconcile the principles of federalism with S 1346 

in this case because Antico owed a duty to the citizens of Philadelphia 

under state and local law. See Margiotta, 688 F.2d at 124. 

 25 
The Government's prosecutorial theory on this point is 

that Antico, by failing to disclose his personal interest in a 

matter over which he had discretionary decision-making 

authority, deprived the public of its right to disinterested 

decision-making and of its right to full disclosure of his 

potential motivation. The scheme to defraud involved 

Antico's setting Ricciardi up as an expediter, then preparing 

and approving her permits. Ricciardi received a fee for her 

"services" which, in turn, substituted for Antico's obligation 

to pay child support. The Government contends that the 

requisite intent to defraud was met, in light of this scheme, 

by Antico's failure to disclose the nature of his personal 

interest in Ricciardi's business and to recuse himself from 

reviewing approvals submitted by her. Finally, the 

Government contends, and Antico does not dispute on

appeal, that interstate phone calls and mailings were made 

in furtherance of the scheme. 

Antico argues that while "discharge of debt" of a family 

member may pose a conflict of interest, his "nepotistic 

gifting" to his girlfriend does not rise to an actionable 

deprivation of his honest services under the mail or wire 

fraud statutes. He denies that he had a financial interest in 

Ricciardi's business at the time alleged in the indictment 

because his debt, if any, had mathematically been 

discharged at the time of the indictment. With respect to 

his intent to defraud, Antico argues that he never actively 

concealed from his colleagues at L&I either that he had 

children with Ricciardi or that he set her up in the 

expediting business. Thus a requisite element of fraud is 

missing. We address each of these contentions in turn. 

Honest services fraud typically occurs in two scenarios: 

(1) bribery, where a legislator was paid for a particular 

decision or action; or (2) failure to disclose a conflict of 

interest resulting in personal gain. Woodward , 149 F.3d at 

54-55. This duty to disclose a conflict of interest arises in 

the private sector from the fiduciary relationship between 

an employer and an employee. In the public sector, the 

duty is oftentimes prescribed by state and local ethics laws. 

In the latter context, 

 [a] public official has an affirmative duty to disclose 

 material information to the public employer. See 

 26 
 Silvano, 812 F.2d at 759. When an official fails to 

 disclose a personal interest in a matter over which she 

 has decision-making power, the public is deprived of 

 its right either to disinterested decision making itself 

 or, as the case may be, to full disclosure as to the 

 official's potential motivation behind an official act. See 

 id. (upholding conviction of city fiduciary who failed to 

 disclose material information about unnecessary 

 spending of city money for secret enrichment of 

 fiduciary's friend). Thus, undisclosed, biased decision 

 making for personal gain, whether or not tangible loss 

 to the public is shown, constitutes a deprivation of 

 honest services. 

Sawyer, 85 F.3d at 724. 

We agree with the Government that Antico's duty to 

disclose material information with respect to his conflict of 

interest with Ricciardi arose from state and local law. 

Antico disagrees, arguing that the state and local conflict of 

interest laws that governed his conduct while at L&I 

contained a loophole for "girlfriends." 65 Pa. C.S.A. S 402 

(". . . for the private pecuniary benefit of himself, a member 

of his immediate family or a business with which he or a 

member of his immediate family is associated"); Philadelphia 

Code S 20-607 ("nor shall any financial interest be held by 

a parent, spouse, child, brother, sister or like relative-inlaw, or by any person, firm, partnership, corporation, 

business association, trustee or straw party for his or her 

benefit") (emphases added). We read the emphasized 

portions of these statutes to include Antico's scheme with 

Ricciardi. The expediting scheme with Ricciardi, while 

certainly benefitting her (and at least indirectly the two 

children she had with Antico), also provided a tangible 

benefit to Antico: it fulfilled his ongoing child support 

obligation and served as consideration in exchange for 

Ricciardi's forgoing court proceedings against him. 19 

_________________________________________________________________ 

19. Antico's mathematical contention that his child support obligation 

disappeared after Ricciardi had earned roughly $32,000 (based on the 

court-ordered payment in the 1980s) ignores the ongoing and dynamic 

nature of his obligation, as well as the fact that he also purchased 

Ricciardi's agreement not to pursue court sanctions against him as long 

 27 
Therefore, Antico owed the City a duty to disclose this 

financial arrangement, the failure of which constitutes 

honest services fraud. 

Antico correctly notes that "the broad scope of the mail 

fraud statute . . . does not encompass every instance of 

official misconduct that results in the official's personal 

gain." Czubinski, 106 F.3d at 1076 (citing Sawyer, 85 F.3d 

at 725) (reversing conviction of IRS employee on mail fraud 

charges for unauthorized browsing of taxpayer files absent 

a showing of impartial performance of public servant's 

duties); United States v. Holzer, 816 F.2d 304, 309 (7th Cir. 

1987) ("We do agree that the words `scheme or artifice to 

defraud' don't reach everything that might strike a court as 

unethical conduct or sharp dealing"). However, even if we 

were to read these conflict of interest provisions as 

restrictively as Antico suggests, we find that his conduct 

violated the fiduciary relationship between a public servant 

charged with disinterested decision-making and the public 

he serves. Id. at 307 ("Fraud in its elementary common law 

sense of deceit -- and this is one of the meanings that 

fraud bears in the [mail fraud] statute . . .-- includes the 

deliberate concealment of material information in a setting 

of fiduciary obligation. A public official is a fiduciary toward 

the public . . . ." ). Duties to disclose material information 

affecting an official's impartial decision-making and to 

recuse himself exist within this fiduciary relationship 

regardless of a state or local law codifying a conflict of 

interest. Id. at 309; Silvano, 812 F.2d at 759-60. Antico's 

exercise of his discretionary authority in both filling out 

and approving the applications submitted by Ricciardi 

without disclosing his interest in the scheme goes beyond 

the mere ministerial function excused in Czubinski and into 

the realm of interested decision-making. When coupled with 

the duty imposed by state and local conflict of interest 

_________________________________________________________________ 

as she cared for his children. Moreover, as we state later in this 

discussion, even if we were to disregard the child support arrangement, 

Antico's conduct in filling out the applications and then personally 

approving them for the financial benefit of Ricciardi deprives the public 

of the disinterested decision-making of one of its public servants, a 

breach of Antico's fiduciary duty to the citizens of Philadelphia. 

 28 
laws, Antico's failures to disclose his financial business 

arrangement with Ricciardi and to recuse himself from 

taking action with respect to her applications fall within the 

scope of honest services fraud. 

Antico also contends that "absent deceit, concealment, 

demonstrable public harm or other active fraud," his 

conviction for wire fraud cannot stand. We disagree. In the 

context of honest services fraud, where "undisclosed, biased 

decisionmaking for personal gain, whether or not tangible 

loss to the public is shown, constitutes a deprivation of 

honest services," Sawyer, 85 F.3d at 724, an active fraud or 

deceit is not necessary. 

 [T]he courts that have accepted the notion that a 

 deprivation of intangible rights is within the statute[ ] 

 recognize that an active misrepresentation is not 

 necessary. Instead, the prosecution need prove only a 

 recognizable scheme formed with intent to defraud 

 regardless of how that intent manifests itself in 

 execution. For example, a public official engaged in 

 bribery by mail need not actively make any 

 misrepresentations in order to violate section 1341. 

Frankel, 721 F.2d at 920-21. "The legal meaning of `fraud' 

is not limited to deceit or misrepresentation; it includes 

overreaching, undue influence, and other forms of 

misconduct." Holzer, 816 F.2d at 309. Nor is a showing of 

public harm required. Sawyer, 85 F.3d at 724 (". . . 

whether or not tangible loss to the public is shown"); 

Holzer, 816 F.2d at 308 ("It is irrelevant that . . . [Holzer's] 

conduct caused no demonstrable loss either to a litigant or 

to the public at large."); Silvano, 812 F.2d at 760 ("It is 

immaterial whether [the defendant] personally profited from 

the scheme or whether the City suffered a financial loss 

from it.") (citing United States v. Lemm, 680 F.2d 1193, 

1205 (8th Cir. 1982)); United States v. Mandel , 591 F.2d 

1347, 1358 (4th Cir. 1979) (approving the prosecution of 

allegedly corrupt politicians who did not deprive the citizens 

of anything of economic value); United States v. Keane, 522 

F.2d 534 (7th Cir. 1975) (same). 

In this case, Antico's failure to disclose his financial 

interest in the success of Ricciardi's expediting business 

 29 
and his failure to recuse himself from approving the permit 

applications he filled out constitute "deceit" for purposes of 

the mail fraud statute. "[A]n official's intentional violation of 

the duty to disclose provides the requisite `deceit'." Sawyer, 

85 F.3d at 732 (citing Silvano, 812 F.2d at 760). The fact 

that Antico did not conceal his relationship with Ricciardi 

from his co-workers does not vindicate his failure to 

disclose to his supervisors the conflict arising from their 

financial arrangement nor his failure to recuse himself from 

acting on the permit applications she submitted. 

It also does not preclude a jury from finding Antico 

possessed the requisite intent to defraud the citizens of 

Philadelphia. Woodward, 149 F.3d at 62 ("Woodward's

intent is . . . demonstrated by his failure to disclose his 

conflict of interest although he was required to do so."). The 

fact that Antico never reported any conflict of interest to his 

superiors while at L&I, despite his knowledge of the state 

and local conflict of interest laws, supports the jury's 

finding of intent to deceive necessary for a wire fraud 

conviction. In fact, Antico continued the fraudulent scheme 

even after L&I Commissioner Levin specifically instructed 

him in 1993 to have no involvement in approving Ricciardi's 

permit applications. Despite Levin's instructions, Antico 

urged Ricciardi to submit permits on behalf of the 

Philadelphia Sign Company, which he approved. Antico also 

prepared the permit application for Wizzards at this time on 

Ricciardi's behalf and prepared the appeal before the ZBA, 

signing Ricciardi's name. Finally, Antico told the owner of 

the Beach Club to use Ricciardi as his expediter, 

affirmatively promoting this scheme despite the warning of 

the conflict of interest. 

In sum, when we view this evidence in the light most 

favorable to the Government, we find that it has met its 

burden of proof. There was clearly sufficient legal support 

and factual evidence, both direct and circumstantial, on 

which a reasonable jury could rely to reach its verdicts. 

2. Materiality Instruction 

According to Antico, the District Court erred by omitting 

"materiality" from its jury instruction on the mail fraud 

racketeering acts. He relies on the Supreme Court's

 30 
declaration in Neder v. United States, 527 U.S. 1 (1999), 

that "materiality of falsehood is an element of the federal 

mail fraud, wire fraud, and bank fraud statutes." Id. at 25. 

This Court considers the totality of the jury instructions to 

determine "whether, viewed in light of the evidence, the 

charge as a whole fairly and adequately submits the issues 

in the case to the jury." United States v. Thayer, 201 F.3d 

214, 221 (3d Cir. 1999). Because Antico did not object to 

the District Court's treatment of materiality, we only review 

it for plain error. Johnson v. United States, 520 U.S. 461, 

465-67 (1997). Under Rule 52(b) of the Federal Rules of 

Criminal Procedure, "[p]lain errors or defects affecting 

substantial rights may be noticed although they were not 

brought to the attention of the court." Fed. R. Crim P. 

52(b). The Supreme Court in United States v. Olano, 507 

U.S. 725 (1993), articulated the limitations on appellate 

review under Rule 52(b): "The first limitation on appellate 

authority under Rule 52(b) is that there indeed be an 

`error.' " Id. at 732. The second is that the error be "plain" 

and the third is that the error "affect substantial rights." Id. 

at 734. Even if these requirements are met, the court 

should not exercise its discretion unless the error"seriously 

affect[s] the fairness, integrity or public reputation of 

judicial proceedings." Id. at 736. 

In light of the Supreme Court's holding in Neder , Antico 

argues that he is entitled to a new trial because, after the 

District Court instructed the jury on materiality with 

respect to the wire fraud counts and racketeering acts 

(Counts Eleven through Eighteen), it did not re-instruct the 

jury on materiality with respect to the mail fraud 

racketeering acts (Racketeering Acts 14A-D). In addition, 

Antico submits that the District Court should have 

specifically instructed the jury that materiality must be 

proven beyond a reasonable doubt. The question is whether 

this failure to re-instruct the jury on materiality when 

giving the mail fraud instruction constitutes plain error. 

The District Court's instructions were carefully crafted 

and lengthy, spanning over 100 pages. With respect to the 

wire fraud counts, the Court began by defining a scheme to 

defraud in the context of wire fraud. It explained that the 

Government must prove beyond a reasonable doubt that 

 31 
there was a "scheme or artifice to defraud," and defined a 

scheme to defraud as "any plan, device or course of action 

to obtain money or property or the intangible right of 

honest services by means of false or fraudulent pretenses, 

representations or promises reasonably calculated to 

deceive persons of average prudence." In describing "false 

and fraudulent representations," the District Court stated: 

"The false or fraudulent representation or failure to 

disclose[ ] must relate to a material fact or matter. A 

material fact is one which would reasonably be expected to 

be of concern to a reasonable and prudent person in relying 

upon the representation or statement in making a 

decision." Clearly the wire fraud instruction was adequate.20 

However, when discussing the racketeering acts of mail 

fraud under the RICO count, the Court did not instruct on 

false representations and materiality. 

Preliminarily, we find Antico's case to be unlike United 

States v. Gaudin, 515 U.S. 506 (1995), where the Court 

entirely failed to present the issue of materiality to the jury. 

In this case, both the wire fraud and the mail fraud 

offenses derived from the same scheme between Antico and 

Ricciardi. The material information that was not disclosed 

by Antico was the same in both counts. Therefore, a

reasonable jury, instructed to consider materiality with 

respect to this scheme, would logically do so in the context 

of both wire fraud and mail fraud. See United States v. 

Winstead, 74 F.3d 1313, 1319 (D.C. Cir. 1996) (concluding 

that where only one fraudulent scheme was at issue with 

respect to both mail fraud and false statement charges, the 

court's instruction to the jury that materiality was an 

element of the mail fraud charge ensured that the jury 

would have found this element existed with respect to the 

_________________________________________________________________ 

20. Antico takes issue with the wire fraud jury charge to say that 

"materiality" should have been instructed"beyond a reasonable doubt" in 

the same sentence. Because the District Court defined materiality as an 

element of the scheme to defraud, and explained that the scheme needed 

to be proven beyond a reasonable doubt, we conclude that the jury 

charge was sufficient in this respect. He also questions whether 

materiality should be subject to a "reasonable person" test in the 

circumstances. Neder instructs us that the reasonable person test is not 

error. 527 U.S. at 22. 

 32 
false statement charge had the jury been properly 

instructed). 

The District Court's instructions clearly informed the jury 

that, by definition, "a false or fraudulent representation or 

failure to disclose[ ] must relate to a material fact or 

matter." By convicting Antico of wire fraud, the jury found 

that Antico's failure to disclose was material, and"it is 

beyond doubt that the members of the jury would have 

reached the same conclusion had they explicitly considered 

materiality as part of their deliberations" on the mail fraud 

racketeering acts stemming from the same conduct. 

Winstead, 74 F.3d at 1321. Therefore, the District Court's 

jury instructions on materiality were not erroneous. 

C. Scheme to Defraud Philadelphia of Property -- 

McCausland's Zoning Permits 

In light of the Supreme Court's decision in Cleveland v. 

United States, 531 U.S. 12 (2000), the Government agrees 

that Counts Seventeen and Eighteen should be remanded 

to the District Court for entry of judgments of acquittal. In 

Cleveland, the Court reversed a mail fraud conviction of a 

defendant who obtained a video poker license from the 

state by making false representations on his license 

application. The Court held that an unissued video poker 

license was not property within the meaning of the mail 

fraud statute. Id. at 15. 

Counts Seventeen and Eighteen charged that 

 while Antico was working as a private expediter 

 following his retirement from L&I, he obtained a 

 zoning and/or use registration permit for Maureen 

 McCausland's putative prostitution business. He 

 obtained that permit by falsely stating on the permit 

 application that McCausland was going to operate a 

 "modeling studio/physical fitness business" in 

 Philadelphia. 

The prosecution of Antico on these two counts was 

premised on a zoning permit being property within the 

meaning of S 1343. Appellee's Supp. Br. at 2. Because the 

Supreme Court's ruling negates the Government's premise, 

we reverse Antico's conviction on these counts. 

 33 
D. Sentencing Challenges 

Antico alleges that the District Court erred by (1)

enhancing his offense level by four levels because it 

determined he was an organizer or leader of criminal 

activity that involved five or more participants or was 

otherwise extensive, and (2) inflating the loss attributable to 

the Ricciardi scheme to defraud to over $700,000, the 

amount earned by Ricciardi in her expediting business. We 

review for clear error a District Court's factual 

determinations underlying the application of the Sentencing 

Guidelines. United States v. Helbling, 209 F.3d 226, 242-43 

(3d Cir. 2000) (citing United States v. Ortiz , 878 F.2d 125, 

126-27 (3d Cir. 1989)). Our review of the District Court's 

legal interpretation of the Sentencing Guidelines is plenary. 

United States v. Yeaman, 194 F.3d 442, 456 (3d Cir. 1999). 

Once these tests are satisfied, we owe deference to the 

District Court's application of the Sentencing Guidelines to 

those facts, as required by 18 U.S.C. S 3742(e). Helbling, 

209 F.3d at 243. 

The District Court grouped Antico's convictions for

purpose of sentencing, placing the extortion activity in one 

group, U.S. Sentencing Guidelines Manual S 2(c)(1.1) 

(1999), and the mail and wire fraud activity in a second 

group, U.S. Sentencing Guidelines Manual S 2(c)(1.7). It 

then calculated the offense levels for each group. The 

extortion group led to an offense level of twenty-four and a 

sentence of sixty-three months, while the fraud group led to 

an offense level of twenty and a sentence of sixty months 

(to run concurrently). The District Court used the adjusted 

offense level of the highest group, extortion, to determine 

the sentencing range. Therefore, the ultimate sentence 

imposed by the District Court, sixty-three months, was not 

based on the amount of loss caused by the fraud activities. 

Antico's objection to his leading role adjustment pertains to 

the first group of extortion activities whereas his objection 

to the loss calculation pertains to the second group of fraud 

activities. The Government contends that the District 

Court's use of the extortion group to determine Antico's 

ultimate sentence renders Antico's objection to the loss 

calculation moot. 

 34 
1. Organizer or Leader of a Criminal Activity of Five or 

 More Participants or Otherwise Extensive Criminal 

 Activity 

We review for clear error the District Court's factual 

determinations that Antico was an organizer or leader and 

that his criminal activity involved five or more participants. 

Helbling, 209 F.3d at 242-43.In simple term s, we will 

vacate "only if we are left with a definite and firm conviction 

that a mistake has been made." United States v. Dent, 149 

F.3d 180, 189 (3d Cir. 1998). With respect to the extortion 

offenses, the District Court adjusted Antico's base offense 

level upward four levels for his aggravating role. Under 

S 3B1.1 of the Sentencing Guidelines, a District Court 

adjusts the offense level based on defendant's role as 

follows: 

 S 3B1.1. AGGRAVATING ROLE 

 Based on the defendant's role in the offense, increase 

 the offense level as follows: 

 (a) If the defendant was an organizer or leader of a 

 criminal activity that involved five or more participants 

 or was otherwise extensive, increase by 4 levels. 

U.S. Sentencing Guidelines Manual S 3B1.1."Participant" is 

defined as one "who is criminally responsible for the 

commission of the offense, but need not have been 

convicted." U.S. Sentencing Guidelines ManualS 3B1.1, 

cmt. n.1. Application note 3 adds gloss to what the District 

Court should consider when determining the defendant's 

role: 

 In assessing whether an organization is "otherwise 

 extensive," all persons involved during the course of 

 the entire offense are to be considered. Thus, a fraud 

 that involved only three participants but used the 

 unknowing services of many outsiders could be 

 considered extensive. 

U.S. Sentencing Guidelines Manual S 3B1.1, cmt. n.3. 

We agree with the District Court's conclusion that Antico 

was an organizer or leader of criminal activity. Application 

note 3 to S 3B1.1 identifies relevant factors in this 

determination: 

 35 
 Factors the court should consider include the exercise 

 of decision making authority, the nature of the 

 participation in the commission of the offense, the 

 recruitment of accomplices, the claimed right to a 

 larger share of the fruits of the crime, the degree of 

 participation in planning or organizing the offense, the 

 nature and scope of the illegal activity, and the degree 

 of control and authority exercised over others. 

Id. With respect to Meehan and Antico, Jr., the evidence 

supports the conclusion that he played a decision-making 

role in their activities with respect to extorting Wizzards 

and Pin Ups. Antico also supervised the Business 

Regulatory Unit at L&I, the unit charged with enforcing the 

adult cabaret ordinances. When Wizzards, Pin Ups and 

Teazers were shut down, Antico made the decisions and 

issued the orders. The District Court's findings in this 

regard are not clearly erroneous. 

Under the "five or more participants" prong ofS 3B1.1, 

the District Court counted the defendant and the 

unindicted co-conspirators of Antico, Jr. and Meehan 

because of their involvement in the scheme to extort 

Wizzards and PinUps of a financial interest in the 

businesses. The District Court also counted Maureen

McCausland and Barbara Williams because of their 

extortion payments to Antico to benefit their prostitution 

business and expediting business, respectively. The District 

Court also considered "at least some of the other victims 

and all of the unknowing persons at the Department of 

Licenses and Inspections . . . in determining whether there 

were five or more participants." Alternatively, under the 

"otherwise extensive" prong of S 3B1.1, the District Court 

ruled that "there were the functional equivalent of five 

participants by reason of the use of . . . L and I personnel" 

(citing to Helbling, 209 F.3d at 248 ("[T]he court must 

determine the extent to which the services of each 

individual, non-participant, were peculiar and necessary to 

the criminal scheme . . . [and] then consider whether the 

sum of the participants and countable non-participants is 

the `functional equivalent' of five participants.")).21 

_________________________________________________________________ 

21. The District Court apparently imported the"functional equivalency" 

test from the "otherwise extensive" prong into the "five or more 

 36 
We take issue with the District Court's inclusion of 

Maureen McCausland and Barbara Williams, victims of

Antico's extortion schemes, in the mix of five participants. 

Extortion victims, whether they operate legitimate or 

illegitimate businesses, are still victims. As this case 

demonstrates, owners of illegitimate businesses such as 

Maureen McCausland may be particularly vulnerable to an 

L&I official's abuse of power, but they are no more

criminally responsible for the offense of extortion than 

legitimate business owners. The same holds true for

expediters. The fact that their legitimate role in filling out 

and hastening permit applications to L&I was corrupted by 

Antico does not make them criminally responsible for being 

extorted by him. In this respect, the District Court's 

inclusion of both Maureen McCausland and Barbara 

Williams within the definition of participant is clearly 

erroneous. By its definition, only Antico, Meehan, and 

Antico, Jr. may be counted. 

Alternatively, the District Court ruled that Antico's 

criminal activity met the "otherwise extensive" prong of 

S 3B1.1, justifying a four level increase. With respect to 

what constitutes "otherwise extensive," we caution that "not 

every individual tangentially involved in the criminal 

activity can fairly be considered in the analysis. The 

purpose of the provision would rarely be achieved by 

counting the unknowing services of some actors in a

criminal scenario, a taxicab driver or bank teller, for 

instance." Helbling, 209 F.3d at 247 (citation omitted). To 

guard against such a broad brush, we adopted in Helbling 

the three-step test from United States v. Carrozzella, 105 

F.3d 796 (2d. Cir. 1997), to help determine whether the 

criminal activity is "otherwise extensive." 

 A sentencing court must first separate out the 

 "participants" as defined by Application Note 1 from 

 other individuals, non-participants, who were involved 

_________________________________________________________________ 

participants" determination by counting all of the unknowing persons at 

L&I. We note that the "five or more participants," by definition, must 

somehow be responsible criminally for the offense. Therefore, the 

unknowing L&I officials are more appropriately considered in the 

"otherwise extensive" determination. 

 37 
 in the criminal activity. . . . The defendant may be 

 considered as one of the participants. The court must 

 next determine whether the defendant used each non- 

 participants' services with specific criminal intent. 

 Third, the court must determine the extent to which 

 the services of each individual, non-participant, were 

 peculiar and necessary to the criminal scheme. 

Helbling, 209 F.3d at 247-48 (citations omitted). 

We add to this rule another consideration. The language 

of S 3B1.1 requires the court to consider the defendant's 

leadership role with respect to the particular offense 

charged. Although "all persons involved during the course 

of the entire offense are to be considered," this does not 

sanction a court taking the activities of non-participants 

from unrelated schemes and grouping them together to 

reach the "functional equivalent" of five persons. The 

actions or services of non-participants must all relate to the 

common criminal activity or scheme -- and to the offense 

charged. A sentencing court should take particular care in 

situations where like offenses have been grouped together 

for sentencing purposes, as was done in this case. 

Counting Maureen McCausland and Barbara Williams 

among the "functional equivalent" of five participants was 

clearly erroneous for this reason as well. 

In light of our ruling that victims may not be considered 

as participants, it is unclear from the record whether the 

District Court properly completed the "otherwise extensive" 

analysis. Assuming that Antico, Meehan, and Antico, Jr., 

were participants, the District Court next needed to 

determine whether Antico used each non-participant L&I 

officials' services with specific criminal intent and as part of 

a single criminal scheme. The District Court did not make 

explicit findings in this regard. Citing step three from 

Helbling, the District Court found that the services of those 

L&I officials mentioned in the Government's submissions -- 

Thomas Simmonds, Gary Adams, Steve Gibbs, Michael 

Shaughnessy, Dominic Verde, and Gerald Richards-- who 

were used by Antico to shut down Wizzards and Pin Ups, 

met the "peculiar and necessary" test. However, based on 

the record before us, we cannot say that the District Court 

undertook the proper legal and factual analysis when it 

 38 
made its "functional equivalency" determination. We

therefore vacate the sentence on the extortion charges and 

remand for re-sentencing in accordance with Helbling and 

this opinion. 

2. Loss Calculation 

Antico also challenges the District Court's loss 

calculation on the mail and wire fraud offenses. In

sentencing Antico on this group of offenses, the District 

Court employed S 2(c)(1.7)(b)(1)(A) of the Sentencing 

Guidelines, which reads: 

 (b) Specific Offense Characteristic 

 (1) (If more than one applies, use the greater): 

 (A) If the loss to the government, or the value of 

 anything obtained or to be obtained by a public 

 official or others acting with a public official, 

 whichever is greater, exceeded $2,000, increase by 

 the corresponding number of levels from the table 

 in S 2F1.1 (Fraud and Deceit). 

The Commentary to S 2F1.1 defines loss as"the value of the 

money, property, or services unlawfully taken." U.S. 

Sentencing Guidelines Manual S 2F1.1, cmt. n.7. The loss 

calculation need not be precise; the Sentencing Guidelines 

require only a "reasonable estimate" based on the 

information available. Id. at n.8. Generally, a defendant's 

gain may provide a reasonable approximation of a victim's 

loss and may be used when more precise means of 

measuring loss are unavailable in determining the sentence 

dealing with offenses involving fraud or deceit. Id.; see 

United States v. Anderson, 45 F.3d 217 (7th Cir. 1995). 

The District Court used the amount of $770,284 to 

adjust the offense level from ten to twenty in accordance 

with the table in S 2F1.1. The question presented on appeal 

is whether the District Court's loss calculation, based on 

the entire gain to another "acting with the public official" in 

honest services fraud, is clearly erroneous. The victim in 

this case, the citizenry of Philadelphia, lost something 

intangible: the honest services of one of its public officers. 

How should this loss be valued? Antico objects to 

calculating the loss from the gross receipts to Ricciardi in 

 39 
her expediting business. Instead, he argues that the loss 

should be at most the estimated $31,200 child support 

obligation that was the motivation behind his scheme to 

defraud, or arguably zero in light of our decisions in United 

States v. Maurello, 76 F.3d 1304 (3d Cir. 1996), and United 

States v. Hayes, 242 F.3d 114 (3d Cir. 2001), that actual 

loss or actual harm, as opposed to defendant's gain, was 

the appropriate basis for measuring the loss. 

In Maurello, this Court considered "whether money paid 

by clients for apparently satisfactory legal services 

performed by an unlicensed attorney is considered part of 

the `loss' from the attorney's fraudulent acts for purposes of 

S 2F1.1." 76 F.3d at 1308. "To the extent that the 

unauthorized services provided by defendant have not 

harmed their recipients, but to the contrary have benefitted 

them, we conclude that defendant's base offense level 

should not be enhanced." Id. at 1312. While not an exact 

fit, Maurello seems to reject the notion that what Ricciardi's 

clients paid her for her services, with which they were 

satisfied, is the appropriate measure of loss. 

Antico also cites to United States v. Hayes, wherein we 

approved the Maurello approach to loss calculation. The 

issue in Hayes was "whether the total salary paid to Hayes 

in all of her fraudulently obtained employment should have 

been assessed as the amount of loss . . . or whether, under 

the rule of Maurello [citation omitted], the court should 

have attempted to determine whether any of the services 

performed by defendant had value." Hayes, 242 F.3d at 

115. We held that Maurello controlled and vacated and 

remanded for resentencing "[b]ecause, had the District 

Court applied Maurello, it might have fixed a lower offense 

level resulting in a lesser sentence than the year and a day 

sentence imposed." Id. 

Antico argues that the District Court should have applied 

the Maurello/Hayes logic in this case. Inasmuch as none of 

Ricciardi's clients were harmed, he insists the loss should 

be zero and no enhancement be applied. We reject Antico's 

reliance on Maurello and Hayes, which did not decide the 

issue of loss from honest services fraud, in favor of the 

clear outcome mandated by the Sentencing Guidelines in 

this case. "If the loss to the government, or the value of 

 40 
anything obtained or to be obtained by a public official or 

others acting with a public official, whichever is greater, 

exceeded $2,000, increase by the corresponding number of 

levels from the table in S 2F1.1 (Fraud and Deceit)." U. S. 

Sentencing Guidelines Manual S 2(c)(1.7)(b)(1)(A). The 

amount Ricciardi received -- by "acting with the public 

official" -- is the correct measure of loss under this section. 

Therefore, the District Court's calculation of the loss at 

$770,284 was not clearly erroneous.22 

In summary, we vacate the sentence imposed by the 

District Court in this case and remand for three reasons. 

First, the District Court needs to determine whether our 

reversal of conviction on Counts Seventeen and Eighteen 

has any effect on its decision to sentence within the 

sentencing range on the fraud grouping of offenses. Second, 

we vacate and remand for the District Court to conduct the 

necessary inquiry with respect to Antico's aggravating role 

in the extortion scheme, as set forth in United States v. 

Helbling, 209 F.3d 226 (3d Cir. 2000), and this opinion. 

Finally, the District Court must reconsider its decision to 

sentence Antico based on the extortion grouping of offenses 

after recalculating the sentence for each of the wire fraud 

group and the extortion group in accordance with this 

opinion. 

* * * * * 

Accordingly, we affirm Antico's convictions on Count One 

(RICO),23 Counts Two through Ten (extortion), and Counts 

_________________________________________________________________ 

22. The Government contends that we need not reach the question 

because the ultimate sentence was based on the higher offense level 

generated by the extortion grouping, and did not rest on the lesser 

offense level under the fraud grouping. Thus, even if the District Court 

calculated the loss as something less, the ultimate sentence of 63 

months would have been imposed anyway based on the higher extortion 

sentence. We have addressed the fraud loss calculation because our 

remand to the District Court for reconsideration of Antico's sentence in 

light of our reversal on Counts 17 and 18 (wire fraud) and our ruling on 

Antico's aggravating role in the extortion scheme may affect the grouping 

chosen by the District Court in its ultimate sentence. 

23. Antico's conviction on the RICO Count is unaffected by our reversal 

of Counts 17 and 18 because the McCausland wire fraud scheme was 

not charged as predicate racketeering acts. 

 41 
Eleven through Sixteen (wire fraud). We reverse the

conviction on Counts Seventeen and Eighteen (wire fraud). 

Finally, we vacate Antico's sentence and remand to the 

District Court for resentencing in accordance with this 

opinion. 

A True Copy: 

Teste: 

 Clerk of the United States Court of Appeals 

 for the Third Circuit 

 42