Opinion ID: 697259
Heading Depth: 2
Heading Rank: 2

Heading: Challenges to Specific Counts of Conviction

Text: 26 McDonough challenges his conviction on Counts Four, Ten and Eleven. These counts respectively charged him with: extortion under color of official right with regard to the Town of Brunswick in violation of the Hobbs Act, 18 U.S.C. Secs. 1951 & 2 (Count Four); conspiracy to violate the Hobbs Act by extorting kickbacks on Rensselaer County insurance contracts under color of official right (Count Ten); and extortion of kickbacks on Rensselaer County insurance contracts (Count Eleven). 27
28 McDonough argues that the jury instructions on the extortion counts were inadequate because they lessened the government's burden of proof on the element of the extortion victim's state of mind. Although the government contends that McDonough failed to object properly to the challenged instruction, the record indicates otherwise. We therefore examine the jury instruction to determine if the charge as a whole prejudiced the defendant. United States v. Locascio, 6 F.3d 924, 939 (2d Cir.1993), cert. denied, --- U.S. ----, 114 S.Ct. 1646, 128 L.Ed.2d 365 (1994). 29 In order for a jury to find a defendant guilty of extortion under color of official right, the government must prove beyond a reasonable doubt that the victims were motivated to make payments as a result of the defendant's control or influence over public officials and that the defendant was aware of this motivation. United States v. Margiotta, 688 F.2d 108, 132-33 (2d Cir.1982), cert. denied, 461 U.S. 913, 103 S.Ct. 1891, 77 L.Ed.2d 282 (1983). As to the extortion counts in the present case, the district court instructed the jury that the government was required to prove beyond a reasonable doubt: 30 that defendant Edward F. McDonough, Jr., exercised official powers or exerted actual control over decision making.... [or that he] knew the motivation of the alleged victim named in each given count of the indictment to make any payment focused, at least in part, on the reasonably perceived ability of Edward F. McDonough, Jr., to influence official action.... A victim's belief that the defendant ... was able to influence official action must be reasonable.... 31 (emphases supplied). This portion of the instruction did not specifically identify the victims whose motivation was an element of the offense. In contrast, defendant had requested an instruction that named O'Connor and Petro as the only victims whose states of mind were relevant. Defendant contends that the court's instruction erroneously allowed the jury to find McDonough guilty even if individuals other than O'Connor or Petro believed McDonough had authority to appoint the Brokers of Record for the Town of Brunswick and Rensselaer County. This argument is without merit. 32 The presidents of the insurance agencies are not the only individuals whose motivation matters. See United States v. Dye Constr. Co., 510 F.2d 78, 82 (10th Cir.1975). Both the indictment and the jury charge as a whole clearly identified the O'Connor Agency and the R.J. Carignan Agency as the extortion victims. As the district court charged, a corporation can only act through natural persons as its agents or employees. Therefore, the jury was entitled to consider the states of mind, not only of O'Connor and Petro, but also of other corporate agents in determining the victims' motivation, and the jury charge was not improper. 33
34 McDonough also argues that the evidence was insufficient to convict him on the extortion counts. In particular, he claims that the evidence did not establish that O'Connor and Petro paid him kickbacks because of his ability to control public officials. He also maintains that the evidence did not establish that he was aware of any such motivation. 35 An appellant challenging the sufficiency of the evidence bears a very heavy burden. United States v. Rivera, 971 F.2d 876, 890 (2d Cir.1992) (citation and internal quotations omitted). We review the sufficiency of the evidence in the light most favorable to the government, United States v. Amato, 15 F.3d 230, 235 (2d Cir.1994), and draw all reasonable inferences in the government's favor. Glasser v. United States, 315 U.S. 60, 80, 62 S.Ct. 457, 469, 86 L.Ed. 680 (1942); United States v. Torres, 901 F.2d 205, 216 (2d Cir.), cert. denied sub nom. Cruz v. United States, 498 U.S. 906, 111 S.Ct. 273, 112 L.Ed.2d 229 (1990). The conviction must stand if any rational trier of fact could have found the essential elements of the crime established beyond a reasonable doubt. United States v. Moore, 54 F.3d 92, 100 (2d Cir.1995). 36 Considered in the light most favorable to the government, the evidence was clearly sufficient to convict defendant on the extortion charges. Count Four charged defendant with extortion of kickbacks from the O'Connor Agency on insurance contracts for the Town of Brunswick. O'Connor, who was one of the government's principal witnesses at trial, testified that he believed that McDonough controlled the insurance account for the Town of Brunswick and could broker that piece of business ... with any agency that he thought was capable of performing the job. He also said that if the payments were not made, McDonough would most likely take [the business] to another agency where he would receive the commission on it. He further testified that he believed that McDonough had the power to determine who would write the town's insurance policies because [h]e was the Democratic Chairman and was very, very close with Romeo Naples, the Brunswick Supervisor and Vice-Chair of the Rensselaer County Democratic Committee. 37 The government also submitted evidence that O'Connor's payments to McDonough amounted to nearly $100,000, for which McDonough performed almost no work. O'Connor's former business partner, Kim Julian-Brown, testified that she argued with O'Connor about these payments and McDonough's lack of work. O'Connor told her that if the payments were not made, McDonough would take the business away. O'Connor also told her that McDonough was in turn kicking back part of the commission money to Romeo Naples. Based upon this evidence, a rational juror could conclude that O'Connor believed that McDonough was able to control or influence public officials in the Town of Brunswick, and that this belief, at least in part, motivated the O'Connor Agency to pay kickbacks. Cf. Margiotta, 688 F.2d at 131-33. 38 Turning to Counts Ten and Eleven regarding Petro's payments of nearly $500,000 to Collar City, the evidence was also sufficient to show that Petro paid the money because he believed McDonough had the power to control and influence Rensselaer County public officials. Petro testified that if he had not made the payments, defendants just wouldn't place [Rensselaer County's insurance] business with us, we wouldn't write it.... I believe they would have taken the business to another agent. He further testified, I assume because of [defendant's] position with the party that he was able to determine where the insurance would be written. 39 Although Petro characterized his state of mind regarding McDonough's influence as an assumption, this does not render the evidence legally insufficient. The jury clearly could infer that Petro would not have paid defendant almost half a million dollars for performing virtually no insurance work unless he believed McDonough had the power to place insurance contracts. Cf. McCormick v. United States, 500 U.S. 257, 270, 111 S.Ct. 1807, 1815, 114 L.Ed.2d 307 (1991) ([M]atters of intent are for the jury to consider.). 40 McDonough argues that the jury improperly failed to credit parts of O'Connor's and Petro's testimony, which suggested that sharing commissions was a longstanding and customary industry practice and that Petro split fees with other insurance agents. Even if fee splitting were customary on non-municipal accounts, there was no persuasive evidence that either O'Connor or Petro customarily split fees on municipal insurance accounts. To do so, without McDonough's rendering insurance services, would have been unlawful. N.Y. Ins. Law Sec. 2128 (McKinney's). 41 Moreover, the government submitted evidence that O'Connor and Petro filed false and misleading disclosure documents, destroyed authentic documents and lied to newspapers and the public about the nature of their relationship with McDonough. Based upon this evidence, the jury could conclude that the payments were not innocently motivated. See Margiotta, 688 F.2d at 135. 42 In any event, the government was not required to show that the transactions had no valid purpose. The jury was only required to conclude that the payments were partially motivated by the victims' belief that McDonough would use his control or influence over public officials to award insurance business for the Town of Brunswick and Rensselaer County. See United States v. Coyne, 4 F.3d 100, 113 (2d Cir.1993), cert. denied, --- U.S. ----, 114 S.Ct. 929, 127 L.Ed.2d 221 (1994); United States v. Biaggi, 909 F.2d 662, 683 (2d Cir.1990), cert. denied, 499 U.S. 904, 111 S.Ct. 1102, 113 L.Ed.2d 213 (1991). As noted above, the evidence was sufficient for this purpose. 43 As to McDonough's awareness of the motives underlying the payments, the jury could infer such awareness without the benefit of direct testimony. Cf. United States v. Friedman, 854 F.2d 535, 554 (2d Cir.1988), cert. denied, 490 U.S. 1004, 109 S.Ct. 1637, 104 L.Ed.2d 153 (1989). As discussed above, the government produced evidence that McDonough received substantial payments from the O'Connor Agency and the R.J. Carignan Agency without rendering services and that these agencies were designated as Brokers of Record for the Town of Brunswick and Rensselaer County respectively. The government also presented evidence of McDonough's efforts to cover up the transactions when they began to come to light. This evidence was more than sufficient to permit a rational juror to find that McDonough was aware of the motives behind the payments.
44
45 Defendant argues that his mail fraud conviction should be reversed because the district court gave an erroneous instruction to the jury. Count Eight charged McDonough with obtaining kickbacks through a scheme or artifice in violation of 18 U.S.C. Sec. 1341. Specifically, the grand jury indictment charged that the purpose of the scheme was to defraud the citizens and government of Rensselaer County of 1) money, property, and other things of value ... and, 2) their right to control their money, property, and other things of value, (emphasis supplied). The district court charged the jury that it could convict if it found that the object of the plan was to deprive ... citizens and officials ... of money or the right to control their money or both, (emphasis supplied). McDonough argues that because the indictment charged him with two purposes in the conjunctive, the government was required to prove both at trial. This argument is meritless. 46 First, when defendant raised this argument in the district court, the government moved for and was granted permission to amend the indictment. In the amended indictment, the word or replaced the word and, clearly indicating that the jury could convict on either ground. On appeal, defendant has not challenged the ruling granting the amendment. 47 Even had the indictment not been amended, the conviction would stand. Where there are several ways to violate a criminal statute, as there are with the mail fraud statute, see United States v. Wallach, 935 F.2d 445, 462-63 (2d Cir.1991), cert. denied, --- U.S. ----, 113 S.Ct. 2414, 124 L.Ed.2d 637 (1993), [f]ederal pleading requires ... that an indictment charge in the conjunctive to inform the accused fully of the charges. United States v. McGinnis, 783 F.2d 755, 757 (8th Cir.1986). A conviction under such an indictment will be sustained if the evidence indicates that the statute was violated in any of the ways charged. United States v. Lemire, 720 F.2d 1327, 1345 (D.C.Cir.1983), cert. denied, 467 U.S. 1226, 104 S.Ct. 2678, 81 L.Ed.2d 874 (1984); see also Griffin v. United States, 502 U.S. 46, 50-51, 112 S.Ct. 466, 469-470, 116 L.Ed.2d 371 (1991). Defendant was charged with depriving citizens of money and the right to control money. Thus, he could have been convicted under either of these theories, and the district court did not give an erroneous instruction to the jury.b. sufficiency of evidence 48 Defendant also argues that the evidence was insufficient to support a conviction on Count Eight because there was no evidence that he intended to obtain money by false pretenses or that he intended to inflict financial harm on the Town of Brunswick or Rensselaer County. However, the government did not seek to prove only that McDonough acted with false pretenses. Rather, the government's primary theory appears to have been that McDonough defrauded Rensselaer County citizens and officials by means of nondisclosure and concealment of information about the kickback scheme that he had a duty to disclose. See, e.g., United States v. Bronston, 658 F.2d 920, 926-27 (2d Cir.1981), cert. denied, 456 U.S. 915, 102 S.Ct. 1769, 72 L.Ed.2d 174 (1982). 49 Regarding McDonough's intent to inflict financial harm, all that the government was required to show was that defendant contemplated some actual harm to the county, Wallach, 935 F.2d at 461, which may be inferred from the totality of the circumstances and need not be proven by direct evidence. United States v. Alston, 609 F.2d 531, 538 (D.C.Cir.1979), cert. denied, 445 U.S. 918, 100 S.Ct. 1281, 63 L.Ed.2d 603 (1980). 50 There was certainly sufficient evidence to permit a rational juror to conclude that McDonough contemplated such financial injury. For example, the government submitted evidence of McDonough's efforts to conceal the kickbacks, which included organizing Collar City, with his wife as nominal head, just prior to commencement of the kickbacks from Petro's R.J. Carignan Agency. As the district court observed at sentencing, the very creation of the Collar City Agency sp[eaks] ... volumes about the fact that it was a coverup and an attempt to hide what ... [defendant] believed[ ] to be an illegal venture. In addition, the jury could have relied upon evidence that McDonough participated in government decisions on insurance matters without disclosing his interest in receiving kickbacks on commissions. In particular, the government presented testimony that McDonough took part in negotiations with the Rensselaer County Executive during which he successfully opposed a proposal to adopt a new system of partial self-insurance that would have reduced costs. Without disclosing his conflict of interest, McDonough participated in preparing a report that recommended increasing insurance expenditures by $450,000. Finally, the jury could also have inferred the requisite level of intent from evidence that the county in fact paid lower insurance fees before and after the scheme began than it did while the scheme was ongoing.
51 McDonough challenges his racketeering conviction on the sole ground that the predicate acts--mail fraud and extortion--were not proved. Because we have already affirmed McDonough's conviction on these charges, we affirm the racketeering conviction as well. 52 We have considered all of defendant's arguments and find that they are without merit. The judgment of conviction is affirmed.