Court Opinion

ID: 803092
Source: CourtListenerOpinion
Date Created: 2012-06-26 14:48:16+00
Date Added: 2024-06-11T18:00:06.693127
License: Public Domain

11-4298
     United States v. Sekhar

 1                       UNITED STATES COURT OF APPEALS
 2
 3                             FOR THE SECOND CIRCUIT
 4
 5                                August Term, 2011
 6
 7
 8        (Argued: April 16, 2012            Decided: June 26, 2012)
 9
10                               Docket No. 11-4298
11
12   - - - - - - - - - - - - - - - - - - - -x
13
14   UNITED STATES OF AMERICA,
15
16                     Appellee,
17
18               - v.-
19
20   GIRIDHAR C. SEKHAR,
21
22                     Defendant-Appellant.
23
24   - - - - - - - - - - - - - - - - - - - -x
25
26         Before:             JACOBS, Chief Judge, B.D. PARKER and
27                             HALL, Circuit Judges.
28
29         Giridhar Sekhar appeals his conviction, following a

30   jury trial in the Northern District of New York (Thomas J.

31   McAvoy, Judge), for [i] attempted extortion of the General

32   Counsel of the New York State Comptroller’s Office in

33   violation of the Hobbs Act, 18 U.S.C. § 1951(a), and [ii]

34   interstate transmission of extortionate threats in violation

35   of 18 U.S.C. § 875(d).         Sekhar argues that his conduct did

36   not come within the statutory definition of extortion
1    because he did not “attempt to obtain property” from the

2    General Counsel.   See Scheidler v. Nat’l Org. for Women,

3    Inc., 537 U.S. 393, 409 (2003) (“Scheidler II”)

4    (interpreting 18 U.S.C. § 1951(b)(2)).    Sekhar argues that

5    [1] the General Counsel’s right to make recommendations was

6    not a property right, and [2] he did not attempt to

7    appropriate or exercise that right.    We affirm.

 8                                 PAUL A. CLYNE, Albany, N.Y., for
 9                                 Appellant.
10
11                                 RAJIT S. DOSANJH, Assistant
12                                 United States Attorney
13                                 (Elizabeth C. Coombe, Assistant
14                                 United States Attorney, on the
15                                 brief), for Richard S.
16                                 Hartunian, United States
17                                 Attorney for the Northern
18                                 District of New York, Syracuse,
19                                 N.Y., for Appellee.
20
21   DENNIS JACOBS, Chief Judge:

22       Giridhar Sekhar was convicted following a jury trial in

23   the United States District Court for the Northern District

24   of New York (Thomas J. McAvoy, Judge) of [i] attempted

25   extortion of the General Counsel of the New York State

26   Comptroller’s Office in violation of the Hobbs Act, 18

27   U.S.C. § 1951(a), and [ii] interstate transmission of

28   extortionate threats in violation of 18 U.S.C. § 875(d).

29   Sekhar had threatened to disclose gossip that the General

                                    2
1    Counsel was conducting an office affair unless the General

2    Counsel recanted a recommendation to the State Comptroller

3    to reject a proposal by Sekhar’s company.    On appeal, Sekhar

4    contends that his conduct did not come within the statutory

5    definition of extortion because he did not “attempt to

6    obtain property” from the General Counsel.   See Scheidler

7    II, 537 U.S. at 409 (interpreting 18 U.S.C. § 1951(b)(2)).

8    Sekhar argues that [1] the General Counsel’s right to make

9    recommendations was not a property right, and [2] he did not

10   attempt to appropriate or exercise that right.   We affirm.

11

12                             BACKGROUND

13       Investment Process.   The Common Retirement Fund

14   (“Pension Fund” or “Fund”) is the employee pension fund for

15   the State of New York and various of its local governments.

16   The State Comptroller is the sole trustee and has final

17   approval over all Fund investments.

18       If the Comptroller approves an investment, he issues a

19   Commitment.   Fund investments are sometimes contingent on a

20   company’s attracting other investors, and a Commitment

21   assists that process by signaling the backing of the Pension

22   Fund.   But a Commitment does not bind the Fund to invest;

                                   3
1    for that, the parties must execute and close on a limited

2    partnership agreement.

3        Proposed Investment with FA Technology.   In 2008, the

4    Comptroller issued a Commitment for a $35 million investment

5    in a fund managed by FA Technology Ventures (“FA

6    Technology”) known as “FA Tech II.”   The investment never

7    closed.   In October 2009, the Comptroller’s Office

8    considered another $35 million investment in two FA

9    Technology funds, known collectively as “FA Tech III.”

10   Based on the proposed terms, FA Technology would earn nearly

11   $7.6 million in management fees over ten years, and could

12   earn more depending on how the investment performed.

13       In April 2009, the Comptroller’s Office had prohibited

14   investments marketed by placement agents.   Although FA

15   Technology did not use a placement agent for FA Tech III, it

16   had used one for FA Tech II, and the Comptroller’s Office

17   questioned the FA Tech III investment on that ground because

18   the investment was “essentially the same” as FA Tech II.

19       While the General Counsel was considering the issue, he

20   was advised by the Office of the New York Attorney General

21   that it was investigating the placement agent involved in FA

22   Tech II and that the Pension Fund should avoid association

                                   4
1    with that agent.   The General Counsel’s internal memo

2    recommended that, “[b]ased on information provided by the

3    Office of the Attorney General . . ., it would be prudent,

4    from a legal perspective, to avoid moving forward” with the

5    FA Tech III investment and warned that the Pension Fund and

6    the Comptroller’s Office could be “in a vulnerable situation

7    if the investment were made and a report or other finding of

8    wrongdoing was subsequently issued by the [Office of the

9    Attorney General].”   The Comptroller, so advised, decided on

10   November 13 not to approve the investment.

11       The First Deputy Comptroller conveyed the decision to

12   George Hulecki, a managing partner of FA Technology.

13   Hulecki had previously been informed of the General

14   Counsel’s opposition to the investment and of rumors that he

15   was having an extramarital affair.

16       Sekhar’s Conduct.   On November 17, the General Counsel

17   received an anonymous e-mail to his work account requesting

18   a personal e-mail address to report “a serious ethical

19   issue.”   He advised the e-mailer to contact the Inspector

20   General, but also provided a personal address.   The e-mailer

21   replied to the personal address accusing the General Counsel

22   of “blackball[ing] a recommendation on a fund,” and

                                   5
1    threatening that if, by November 20, he did not tell the

2    Comptroller that he had a “change of heart” and “recommend

3    moving forward with this fund,” the e-mailer would disclose

4    that the General Counsel was having an office affair to the

5    General Counsel’s wife, as well as to the Comptroller, the

6    Attorney General, the press, and others.

7        That night, another e-mail warned the General Counsel

8    that he had “36 hours left . . . [t]o make the wrong right.”

9    The next day, a similar e-mail arrived, as well as an e-mail

10   attaching a draft letter to the Attorney General disclosing

11   the alleged affair.

12       On the advice of law enforcement, the General Counsel

13   asked the e-mailer for more time.   On Monday, November 23,

14   the e-mailer assured the General Counsel that he would

15   “never hear about this again” if he could “get this fixed by

16   Wednesday.”   On Tuesday, December 1, the e-mailer asked the

17   General Counsel what he thought about Tiger Woods:   “[W]ho

18   would have thought that a woman could get that upset . . .

19   and over what?” (ellipses in original).

20       The FBI traced some of the e-mails to the Brookline,

21   Massachusetts home of Sekhar, a managing partner of FA

22   Technology, and executed a search warrant.   Sekhar admitted

                                   6
1    to sending the e-mails, and forensics confirmed Sekhar’s

2    computer as the source.

3        Procedural History.   The indictment alleged that Sekhar

4    wrongfully attempted to obtain the General Counsel’s

5    recommendation to approve the Commitment, the Comptroller’s

6    approval of the Commitment, and the Commitment itself.

7    Sekhar was charged with one count of attempted extortion

8    under the Hobbs Act, 18 U.S.C. § 1951(a), and six counts of

9    interstate transmission of extortionate threats, id.

10   § 875(d).   Sekhar moved pro se to dismiss the indictment on

11   the ground (inter alia) that it failed to state an offense,

12   see Fed. R. Crim. P. 12(b)(3)(B), because a recommendation

13   is not property, an approval is not property, and the

14   indictment did not allege that Sekhar threatened a person

15   with power to issue the Commitment.   In denying the motion,

16   the court ruled that “the General Counsel’s right to make

17   professional decisions without outside pressure is an

18   intangible property right” and that the government need only

19   prove that Sekhar “believed that the General Counsel’s

20   recommendation was the determining factor in obtaining the

21   Commitment.”

22

                                   7
1        Sekhar, defending pro se, was convicted on the

2    extortion count and on five of the six counts of interstate

3    transmission of extortionate threats.1   For each count, the

4    jury indicated on a special verdict form that Sekhar

5    attempted to extort the General Counsel’s recommendation to

6    approve the Commitment.

7        Sekhar, with counsel, moved for a judgment of acquittal

8    or a new trial, based (inter alia) on the sufficiency of the

9    evidence.   See Fed. R. Crim. P. 29(c), 33(a).   The court

10   ruled that there was sufficient evidence that: Sekhar

11   attempted to exercise control over the General Counsel’s

12   right to make recommendations; Sekhar believed that this

13   exercise would result in a Commitment; and a Commitment

14   would benefit Sekhar financially.   Sekhar was sentenced to

15   fifteen months’ incarceration on each count, to be served

16   concurrently.

17

18                             DISCUSSION

19       On appeal, Sekhar contends that the indictment failed

20   to state an offense and that the evidence was insufficient

21   to sustain the conviction.   For both contentions, Sekhar’s

          1
            Sekhar was acquitted on the count based on the
     December 1 “Tiger Woods” e-mail.
                                   8
1    argument is the same: His conduct, as alleged in the

2    indictment and proven at trial, did not come within the

3    statutory definition of extortion because he did not

4    “attempt to obtain property” from the General Counsel.    See

5    Scheidler II, 537 U.S. at 409 (interpreting 18 U.S.C.

6    § 1951(b)(2)).   The standard of review for both contentions

7    is de novo.   United States v. Gotti, 459 F.3d 296, 320 (2d

8    Cir. 2006) (“[W]e evaluate the legal issue[] of whether the

9    indictment properly charged Hobbs Act extortion . . . under

10   a de novo standard.”); United States v. Madori, 419 F.3d

11   159, 166 (2d Cir. 2005) (“We review de novo a challenge to

12   the sufficiency of evidence and affirm if the evidence, when

13   viewed in its totality and in the light most favorable to

14   the government, would permit any rational jury to find the

15   essential elements of the crime beyond a reasonable doubt.”

16   (internal quotation marks omitted)).   Accordingly, we

17   analyze both contentions together.2

18       The Hobbs Act subjects to criminal liability “[w]hoever

          2
            The Court has sometimes reviewed arguments similar to
     Sekhar’s as challenging the sufficiency of the evidence, see
     United States v. Cain, 671 F.3d 271, 277 (2d Cir.), cert.
     denied sub nom. Soha v. United States, 132 S. Ct. 1872
     (2012), and sometimes as challenging the indictment, see
     United States v. Coppola, 671 F.3d 220, 233 (2d Cir.), reh’g
     denied, No. 10-0065-cr (2d Cir. May 14, 2012); Gotti, 459
     F.3d at 320.
                                   9
1    in any way or degree obstructs, delays, or affects commerce

2    or the movement of any article or commodity in commerce, by

3    robbery or extortion or attempts or conspires so to do.”    18

4    U.S.C. § 1951(a).   “The term ‘extortion’ means the obtaining

5    of property from another, with his consent, induced by

6    wrongful use of actual or threatened force, violence, or

7    fear, or under color of official right.”   Id. § 1951(b)(2).

8    The parties agree that this definition also applies to §

9    875(d), which subjects to criminal liability “[w]hoever,

10   with intent to extort from any person, firm, association, or

11   corporation, any money or other thing of value, transmits in

12   interstate or foreign commerce any communication containing

13   any threat to injure the property or reputation of the

14   addressee.”   See also United States v. Jackson, 180 F.3d 55,

15   70 (2d Cir. 1999) (“Given Congress’s contemporaneous

16   consideration of the predecessors of § 875(d) and the Hobbs

17   Act, . . . we infer that Congress’s concept of extortion was

18   the same with respect to both statutes.”).

19       The element of “obtaining . . . property” entails a

20   two-part inquiry: “whether the defendant is (1) alleged to

21   have carried out (or, in the case of attempted extortion,

22   attempted to carry out) the deprivation of a property right

                                   10
1    from another, with (2) the intent to exercise, sell,

2    transfer, or take some other analogous action with respect

3    to that right.”    Gotti, 459 F.3d at 324 (citing Scheidler

4    II).

5

6                                    I

7           “The concept of property under the Hobbs Act . . . is

8    not limited to physical or tangible property or things, but

9    includes, in a broad sense, any valuable right considered as

10   a source or element of wealth . . . .”    United States v.

11   Tropiano, 418 F.2d 1069, 1075 (2d Cir. 1969) (citations

12   omitted); accord Gotti, 459 F.3d at 323.

13          “The right to pursue a lawful business . . . has long

14   been recognized as a property right . . . .”    Tropiano, 418

15   F.2d at 1076.    There is a property right to “conduct a

16   business free from threats,” United States v. Arena, 180

17   F.3d 380, 394 (2d Cir. 1999), abrogated in part on other

18   grounds by Scheidler II, 537 U.S. at 403 n.8, and “to make

19   various business decisions . . . free from outside

20   pressure,” Gotti, 459 F.3d at 327.

21          The General Counsel’s job was to provide legal advice

22   to the Comptroller.    A “lawyer’s stock in trade is the sale

                                    11
1    of legal services.”   Massaro v. Chesley (In re San Juan

2    Dupont Plaza Hotel Fire Litig.), 111 F.3d 220, 237 n.19 (1st

3    Cir. 1997) (internal quotation marks omitted).   What is sold

4    is “time and advice.”   United States v. Bertoli, 994 F.2d

5    1002, 1023 (3d Cir. 1993) (internal quotation marks

6    omitted).   Accordingly, the General Counsel had a property

7    right in rendering sound legal advice to the Comptroller

8    and, specifically, to recommend--free from threats--whether

9    the Comptroller should issue a Commitment for FA Tech III.3

10       Sekhar argues that the General Counsel’s recommendation

11   to approve the Commitment--which the jury found was the

12   object of the attempted extortion--was not a property right

13   enjoyed by the General Counsel because it was not, for the

14   General Counsel, a “source or element of wealth.”   See

15   Tropiano, 418 F.2d at 1075.   According to Sekhar, the

16   government had to show that the General Counsel derived

17   wealth from his ability to make the recommendation or that

18   he would have suffered monetarily had Sekhar succeeded in

19   forcing him to change his recommendation.

          3
            The government has not argued, and we need not
     consider, whether the state and local employees whose money
     was invested in the Pension Fund had a property right to
     have the General Counsel make recommendations in the best
     interest of the Fund.
                                   12
1        The value and worth of a lawyer’s services may be said

2    generally to depend on freedom from conflict, including a

3    conflict created by personal blackmail.   Accordingly, the

4    General Counsel’s ability to give legal advice free from

5    threats--and, specifically, to make a recommendation on FA

6    Tech III--can be seen as a “source or element of wealth” for

7    the General Counsel.   In any event, as the district court

8    observed, a property right need not be a source of wealth to

9    the target of the extortion.

10       In Gotti, the Court held that the defendants--members

11   and associates of the Gambino Crime Family--deprived union

12   members of their rights under the Labor-Management Reporting

13   and Disclosure Act of 1959 (“LMRDA”), 29 U.S.C. § 501(a),

14   “to free speech[,] . . . democratic participation in union

15   affairs[, and] . . . loyal representation by their officers,

16   agents, and other representatives.”   459 F.3d at 325; accord

17   Coppola, 671 F.3d at 234-36; see also United States v.

18   Bellomo, 176 F.3d 580, 592-93 (2d Cir. 1999) (“The right of

19   the members of a union to democratic participation in a

20   union election is property . . . .”).   In considering

21   another count, the Court held that the defendants deprived

22   healthcare plan participants of their right to have the

                                    13
1    plan’s “trustees and fiduciaries discharge their duties in

2    [the plan’s] best interest.”   Gotti, 459 F.3d at 326.   The

3    Court did not analyze whether these rights were a “source or

4    element of wealth” for the targets of the extortion.

5    Instead, as discussed in Part II, the Court focused on the

6    value of the rights to the defendant extortionists.4

7

8                                   II

9        “[T]he extortion provision of the Hobbs Act . . .

10   require[s] not only the deprivation but also the acquisition

11   of property.”   Scheidler II, 537 U.S. at 404.   The question

12   becomes “whether the defendants . . . ‘pursued [or] received

13   something of value from [victims] that they could exercise,

          4
            Sekhar cites Town of W. Hartford v. Operation Rescue,
     915 F.2d 92, 102 (2d Cir. 1990), for the proposition that
     “the term ‘property’ cannot plausibly be construed to
     encompass altered official conduct.” In West Hartford, the
     Court held that anti-abortion protesters did not engage in
     extortion by (inter alia) resisting arrest and refusing to
     identify themselves to police: While these actions caused
     the town to expend additional resources, “[v]irtually any
     conduct that elicits a governmental response will require
     activity by one or more salaried governmental employees.”
     Id. Mere “governmental response to unlawful acts is not
     ‘property’ within the meaning of the Hobbs Act.” Arena, 180
     F.3d at 393 (citing W. Hartford, 915 F.2d at 101-02). In
     West Harford, unlike the present case, the governmental
     response was an exercise of the police power, which did not
     entail a channeling of value or advantage to the benefit of
     a defendant.
                                    14
1    transfer, or sell.’”    Gotti, 459 F.3d at 323 (brackets in

2    original) (quoting Scheidler II, 537 U.S. at 405).     The

3    defendants in Scheidler II, anti-abortion protesters who

4    aimed to shut down clinics, “‘may have deprived or sought to

5    deprive [the clinics] of their alleged property right of

6    exclusive control of their business assets,’” but “‘there

7    was no basis upon which to find that [the protesters]

8    committed extortion under the Hobbs Act’” because the

9    protesters “‘did not obtain or attempt to obtain property

10   from [the clinics].’”    Id. at 322-23 (quoting Scheidler II,

11   537 U.S. at 405, 409).

12       The protesters “would have satisfied the Scheidler II

13   Court’s definition of ‘obtaining’” had they “sought to take

14   further action after having deprived the clinics of their

15   right to conduct their business as they wished--by, for

16   example, forcing the clinic staff to provide different types

17   of services.”   Id. at 324.   In such an event, “the victim is

18   ordered to exercise his or her rights in accordance with the

19   extortionist’s wishes, such that the extortionist is

20   essentially controlling the exercise of those rights.”       Id.

21   at 324 n.9.

22

                                    15
1          Accordingly, in Gotti, the Court held that the

2    defendants, by controlling the decisions of union officials,

3    “caused the relinquishment of the union members’ LMRDA

4    rights . . . in order to exercise those rights for

5    themselves.”   Id. at 325; accord Coppola, 671 F.3d at 234-

6    38.   Addressing another count, the Gotti Court held that the

7    defendants, by dictating the healthcare plan that union

8    trustees selected, deprived the union members of their

9    rights to have the trustees act as fiduciaries and

10   “exercised the rights . . . in order to profit themselves.”

11   459 F.3d at 326; see also Cain, 671 F.3d at 282 (“[W]hether

12   the property that is the subject of the extortion is

13   valuable in the hands of the defendant . . . will rarely be

14   a problem in cases . . . in which the defendant seeks to

15   exploit the very intangible right that he extracts from the

16   victim.”).

17         Here, as the district court concluded, Sekhar attempted

18   to deprive the General Counsel of his right to make a

19   recommendation consistent with his legal judgment and

20   attempted to exercise that right by forcing the General

21   Counsel to make a recommendation determined by Sekhar.

22

                                   16
1        As Sekhar points out, a positive recommendation from

2    the General Counsel would not have guaranteed a Commitment,

3    and a Commitment would not have guaranteed an investment.

4    But “‘[t]he concept of property . . . does not depend upon a

5    direct benefit being conferred on the person who obtains the

6    property.’”    Gotti, 459 F.3d at 320 (quoting Tropiano, 418

7    F.2d at 1075-76).   An extortionist does not necessarily

8    profit by exercising the rights thus obtained; it is enough

9    that “defendants exercise[] the rights in question in order

10   to profit themselves.”   Id. at 326 (emphasis added).

11       The defendant in Cain, who used threats and violence to

12   drive his competitors from the market, argued that the

13   government “introduced no evidence that through [his]

14   coercive conduct [he] obtained specific tree service jobs or

15   a quantifiable portion of the tree-service market.”     671

16   F.3d at 279.   The Court held that the defendant had

17   committed extortion because his “purpose in using violence

18   against his victims was to acquire the market share held by

19   [his competitors] and to exploit it for his own enrichment.”

20   Id. at 283.    The Court expressed disagreement with the Ninth

21   Circuit’s holding in United States v. McFall, 558 F.3d 951,

22   957 (9th Cir. 2009), that “[i]t is not enough to gain some

                                    17
1    speculative benefit by hindering a competitor.”      671 F.3d at

2    283 n.4.

3        Here, the evidence showed that a positive

4    recommendation by the General Counsel would have increased

5    the chances the Comptroller would issue a Commitment; a

6    Commitment was necessary for FA Tech III to receive a

7    Pension Fund investment; and an investment would have

8    resulted in management fees for FA Technology and profit for

9    Sekhar, as a managing partner.       And the evidence showed that

10   Sekhar understood that line of causation.      Accordingly,

11   there was sufficient evidence to conclude that Sekhar, in

12   order to profit, attempted to exercise the General Counsel’s

13   property right to make recommendations.      The government was

14   not required to prove that Sekhar would actually have been

15   enriched had he succeeded in exercising that right.

16   Opportunities have value.

17

18                               CONCLUSION

19       For the foregoing reasons, we affirm the district

20   court’s judgment of conviction.

                                     18