Opinion ID: 76294
Heading Depth: 3
Heading Rank: 1

Heading: The Consulting Contract: Counts 1, 3-6

Text: 37 Defendants assert that the government did not prove a deprivation of honest services with respect to Fisher's consulting contract. Defendants contend that the undisputed facts at trial reflect that, before Hasner recommended that the HFA enter into a consulting contract with Fisher, Hasner and Fisher had no conversations about a potential real estate commission from Chelsea Commons. Defendants assert that the only real estate related conversations occurred after the consulting agreement was approved, but before the HFA voted on the $2,500 cap for reimbursement of Fisher's potential expenses under the contract. Defendants further assert that the government presented no evidence that they had the specific intent to deprive the HFA of Hasner's honest services, no evidence that there was a cognizable harm, and no evidence that the mailings were made in furtherance of the scheme to defraud. 38 Section 1341 proscribes use of the mails as part of a scheme or artifice to defraud. 18 U.S.C. § 1341 (1994). Section 1346 defines scheme or artifice to defraud to include a scheme or artifice to deprive another of the intangible right of honest services. 39 Public officials inherently owe a fiduciary duty to the public to make governmental decisions in the public's best interest. deVegter, 198 F.3d at 1328. When a public official, instead, secretly makes decisions based on his own personal interests, the official defrauds the public of his honest services. See Lopez-Lukis, 102 F.3d at 1169. A defendant's breach of a fiduciary duty may be a predicate for a violation of the mail fraud statute where the breach entails the violation of a duty to disclose material information. Waymer, 55 F.3d at 571. 40 A reasonable jury could conclude that Hasner breached his fiduciary duties by voting on Fisher's consulting contract without disclosing the agreement he had with Fisher to receive a referral fee, if the Chelsea Commons real estate transaction was completed. Hasner proposed Fisher's consulting contract to the HFA in September 1996: before Fisher sought Hasner's help in locating property for the Chelsea Commons project. Fisher's contract, however, was not approved by the HFA in its final form until 18 November 1996: after the Chelsea Commons proposal had been submitted to the HFA and after Fisher and Fleming had agreed to pay Hasner a referral fee if the real estate transaction was completed. Because Hasner, by voting on Fisher's contract, was taking discretionary action that directly benefited Fisher, Hasner's agreement with Fisher to share the commission from the Chelsea Commons project was material. 41 Furthermore, the evidence at trial, including the wiretaps, indicated that Fisher and Hasner later took steps to conceal Hasner's interest in the Chelsea Commons project. When an HFA member expressed concern about potential conflicts on the Chelsea Commons project, Hasner did not disagree with Ellington's representation — made in Hasner's presence — to the HFA that the conflict had to do with Hasner's interest in his brothers' construction company. When Hasner's $9,000 referral fee was included in the HUD-1, Hasner's brother, calling Fisher on Hasner's behalf, commented to Fisher Lloyd thought everything was going to be quiet. Fisher later acknowledged that the inclusion of the referral fee was a major, major blunder. 42 In the light of the evidence and Hasner's failure to disclose the real estate commission he would receive if the property for the Chelsea Commons project was sold, a reasonable jury could conclude that Hasner possessed the requisite intent to deprive the HFA of his honest services by using his discretionary authority to vote in favor of Fisher's consulting contract. 43 A reasonable jury could also conclude that Fisher possessed the requisite intent to deprive the HFA of Hasner's honest services. Fisher testified that she had no clue that Hasner's vote on her consulting contract was subject to disclosure or recusal requirements and that she did not attempt to influence Hasner's vote. But the jury was free to reject this testimony. Based upon the evidence and Fisher's testimony, the jury was free to infer that the opposite of Fisher's testimony was true and conclude that Fisher intended to influence Hasner's honest services. See United States v. Mejia, 82 F.3d 1032, 1038 (11th Cir.1996) (A proper inference the jury can make from disbelieved testimony is that the opposite of the testimony is true); United States v. Brown, 53 F.3d 312, 314-15 (11th Cir.1995) (defendant's explanations at trial can actually increase amount of evidence supporting guilty verdict). 44 Although Defendants argue that the government failed to demonstrate a cognizable harm because the consulting contract and Chelsea Commons projects both furthered the public good, the harm was to the public's intangible (but very real) right to honest and impartial government. See Lopez-Lukis, 102 F.3d at 1168. 45 The government also established the requisite mailing to support Defendants' convictions. Although mailing is a required element of mail fraud, the use of the mails need not be an essential element of the scheme. See United States v. Paradies, 98 F.3d 1266, 1282 n. 29 (11th Cir.1996). Here, the fraud in this case did not achieve fruition until Fisher received the checks from the ill-obtained contract. Thus, the government established the required mailing element.