Opinion ID: 3026413
Heading Depth: 4
Heading Rank: 4

Heading: Sufficiency of the Evidence for Bribery Theory

Text: Holck and Umbrell’s final challenge to their honest services wire fraud convictions is that the government presented insufficient evidence to sustain those convictions under a bribery theory. According to Holck and Umbrell, the government failed to prove: (1) that they made a payment to Kemp; (2) that they received a benefit from Kemp; and (3) that the two were directly connected. As noted above, we will “view the evidence in the light most favorable to the Government and sustain the verdict if any rational juror could have found the elements of the crime beyond a reasonable doubt.” United States v. Cartwright, 359 F.3d 281, 286 (3d Cir. 2004) (internal quotation marks omitted). As we held above, bribery requires a specific intent to give or receive something of value in exchange for an official act. We note that evidence of a “quid pro quo can be implicit, that is, a conviction can occur if the Government shows that [the defendant] accepted payments or other consideration with the implied understanding that he would perform or not perform an act in his official capacity.” Antico, 275 F.3d at 257. As we have recognized, “‘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.’”15 Id. at 258 (quoting United States v. Bradley, 173 F.3d 225, 231 (3d procedures applicable for similar loans, whether they intended to give a benefit or gift to defendant Kemp, whether the loans were commercially reasonable, made in the ordinary course of business, whether the loans were considered by defendant Kemp to be a benefit or gift, the terms of the loan and other factors . . . that you consider material.” (App. at 9651.) This appropriately conveyed to the jury the many-faceted issue. 15 While we made that statement while discussing the Hobbs Act, it is no less applicable in the present context. See, e.g., United States v. Woodward, 149 F.3d 46, 57 (1st Cir. 1998) (permitting similar form of proof in honest services fraud case). 41 Cir. 1999)). We first reject Holck and Umbrell’s argument that the benefits that they were accused of bestowing on Kemp – a variety of loans – cannot constitute bribes (or the quid of a quid pro quo) because they were made at the prevailing interest rates in the regular course of business. As a factual matter, a reasonable jury certainly could have found that these loans were not advanced in the usual course of business and were instead extended to Kemp and his friends solely because of Kemp’s position. For instance, Umbrell agreed to loan $7,500 unsecured to a person Kemp described as having “shaky credit” without even seeing an application or speaking to the borrower. Umbrell’s stated purpose for approving this loan was to make Kemp “look good.” Moreover, Kemp’s mortgage loans were approved by Holck and Umbrell before Kemp filed an application, and despite the fact that Commerce’s computer program and underwriter rejected the mortgages. Indeed, an underwriter from Commerce testified that the procedures used to approve this loan failed to comply with standard practice. This evidence is sufficient to support a jury’s conclusion that these loans were made available to Kemp only because he was the treasurer. Moreover, as a legal matter, we conclude that providing a loan to a public official (or his friends or family) that would have otherwise been unavailable to that official or available at a higher interest rate may constitute a bribe. This is consistent with our discussion in Antico where, concerning quid pro quo under the Hobbs Act, we broadly described a bribe as involving “payments or other consideration.” Id. at 257 (emphasis added). Further, the conclusion comports with the federal bribery statute, which refers to “anything of value,” and other general definitions of bribery. See, e.g., Black’s Law Dictionary 186 (7th ed. 1999) (defining “bribery” as “[t]he corrupt payment, receipt, or solicitation of a private favor for official action”). It also takes account of the commonsense notion that a loan may be of immense value to the recipient: for instance, here, Kemp’s mortgage loan allowed him to purchase a house. Our conclusion that a loan may constitute the quid in a 42 bribery prosecution is also supported by the relevant caselaw. Most notably, in United States v. Gorman, 807 F.2d 1299 (6th Cir. 1986), the defendant argued that a loan was not a “thing of value” under § 201 because he fully repaid the loan with interest. Id. at 1304. The Sixth Circuit rejected that argument, because at the time that the defendant received the loan he was having “severe financial difficulties” and it was unclear whether such a loan would have been available to him in the ordinary course of business. Id. at 1305. The court focused on the value that the recipient “subjectively attache[d] to the items received.” Id. A loan was also recognized as a potential quid in United States v. Williams, 705 F.2d 603 (2d Cir. 1983). There, a United States Senator was convicted under the federal bribery statute for “seeking funds for the financing and purchase of a mining venture in which he had an interest in exchange for his assistance in obtaining government contracts for the venture.” Id. at 612. One of the two sorts of funds that the senator sought was a $100 million loan that was to be repaid with interest. Id. at 620. The court never questioned that the loan could serve as a bribe, and termed the evidence against the senator “overwhelming.” Id. at 612; see also United States v. Crozier, 987 F.2d 893, 901 (2d Cir. 1993) (“[A]s we have held in connection with § 201, any payment that the defendant subjectively believes has value, including a loan, constitutes a thing ‘of value’ within the meaning of § 666(c)”). Thus, we conclude that loans, so long as they are granted in exchange for an official act, may drive a bribery prosecution.16 We also conclude that Holck and Umbrell’s assertion that they did not receive any benefit from Kemp is contradicted by the record evidence. Despite Holck and Umbrell’s protestations, a reasonable jury could undoubtably have concluded that Kemp provided a benefit to them when he rigged the bidding for the NTI line of credit in Commerce’s favor. The government showed that after Commerce submitted its bid, Kemp told White to tell Holck and Umbrell not to submit their bids first, because 16 Indeed, given that the government must also prove the loan was given in exchange for some official action, there is little danger that honest loans will trigger criminal liability. 43 then Kemp could tell White about the other bids. This alone permitted a reasonable jury to conclude that Kemp intended to benefit Commerce to the detriment of other banks. Then Kemp called Holck and gave him specific instructions about how Commerce could tweak its initial bid to guarantee that its bid would win – a courtesy that he did not extend to any other bank. Indeed, when Wachovia attempted to rebid, Kemp ignored its request. While a second round of bidding was instituted – on the orders of Kemp’s boss and against Kemp’s wishes – only Commerce was told exactly what to bid to ensure success. This evidence was plainly sufficient for the jury to conclude that Holck and Umbrell received a benefit from Kemp. Finally, we reject Holck and Umbrell’s contention that the government failed to present evidence of a pro demonstrating that Holck and Umbrell extended loans to Kemp in exchange for favorable treatment. Especially damaging to Holck and Umbrell’s position is the June 24, 2003 phone call between Umbrell and Kemp. There, Umbrell agreed to waive the $3,500 appraisal fee for the church loan, and then, while the two discussed the renewal of some of Philadelphia’s certificates of deposit with Commerce, Kemp told Umbrell that Umbrell could always speak to Kemp directly because “you are my f__king guy. . . . So you get special treatment.” While Kemp did not elaborate about why Umbrell was his “guy,” the jury certainly could have inferred that it was because of the consistent flow of loans and perks – including the waiver of the appraisal fee discussed moments before – that Holck and Umbrell extended. The evidence also showed that not only did Kemp say that Holck and Umbrell would get special treatment – they did. The NTI bidding process is a particularly egregious example. Further, the government showed that Holck and Umbrell believed that they would receive this special treatment, as illustrated by the phone call between White, Holck, and Umbrell, where Holck appeared surprised that any bank besides Commerce would get a second opportunity to bid, stating that “you know we made . . . the revised proposal to Corey? . . . And something’s not smelling right.” Similarly, Kemp’s explanation of the NTI transaction to his friend, in which Kemp stated that Commerce Bank had better take care of him because he hooked them up with the NTI deal, evinced his understanding that he 44 was giving Holck and Umbrell special treatment in exchange for loans. This course of conduct permitted the jury to infer that Kemp had agreed with Holck and Umbrell that he would take official action in their favor in exchange for their providing him loans and benefits. Accordingly, we conclude that the government presented sufficient evidence to support the jury’s verdict against Holck and Umbrell on the honest services wire fraud charge.17