Court Opinion

ID: 808875
Source: CourtListenerOpinion
Date Created: 2012-09-20 16:17:22+00
Date Added: 2024-06-11T18:00:32.389568
License: Public Domain

NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

                          ________

                         No. 11-2098
                         _________

              UNITED STATES OF AMERICA

                              v.

                        JOSEPH VAS,
                                Appellant

                          ________

        On Appeal from the United States District Court
                  for the District of New Jersey
                  (D.C. No. 2-09-cr-00370-001)
         District Judge: Honorable Susan D. Wigenton

                           _______

          Submitted Under Third Circuit LAR 34.1(a)
                     September 18, 2012

 Before: SLOVITER, RENDELL, and HARDIMAN, Circuit Judges

                 (Filed: September 20, 2012)

                           ______

                          OPINION
                           ______
SLOVITER, Circuit Judge.

       Appellant Joseph Vas was convicted of mail fraud, misapplication of funds

involving a local government receiving federal funds, making false statements to federal

law enforcement agents, and making contributions to a federal candidate through straw

donors.

                                              I.

       At the times relevant to the criminal charges at issue, Vas was the Mayor of Perth

Amboy, New Jersey, a New Jersey State Assemblyman, and a candidate in the 2006

Democratic primary election for New Jersey’s 13th U.S. Congressional District. Melvin

Ramos, Vas’ co-defendant, was Vas’ Mayoral Aide and Congressional Campaign

Treasurer. Vas and Ramos were charged with, and convicted of, two interrelated sets of

offenses. First, Vas and Ramos were convicted of a set of charges involving the abuse of

Vas’ authority as Mayor to misappropriate public funds in order to entice a contractor to

buy an apartment building in Perth Amboy from Vas at an inflated price.1 Second, Vas

and Ramos were convicted of charges related to the use of straw donors to evade

contribution limits to Vas’ congressional campaign (the “straw-donor scheme”).

       Vas purchased an apartment building on Dekalb Avenue in Perth Amboy (the

“DeKalb property”); held it for a brief period; and sold it to Evan Samouhos, a developer,

   1
     In keeping with the practice of the parties and the District Court, we will refer to
these counts collectively as the “property-flip scheme.”

                                              2
for $290,000 in profit.2 Samouhos bought the property on assurances from Vas and

Ramos that he would receive Regional Contribution Agreement (“RCA”) funds to

renovate the building.3 Vas used part of the profit from the sale of the DeKalb property

to fund his congressional campaign. After the sale, Vas, without disclosing his prior

ownership of the property, manipulated municipal procedures in an attempt to expedite

the approval of $360,000 in RCA funds for the rehabilitation of the DeKalb property.

Among other actions Vas took in this regard was misusing his authority to obtain a

$90,000 advance payment of RCA funds to the developer outside of the municipal

approval process for such a payment. Vas subsequently made false statements to FBI

agents about his involvement with the DeKalb property.

       The jury also convicted Vas of Count Twelve, which charged him with accepting

campaign contributions through straw donors, in violation of 2 U.S.C. §§ 441a(f) and

   2
     The Government refers to the following counts as part of the property-flip scheme:
Counts One through Four, which charged specific instances of mail fraud in violation of
18 U.S.C. § 1341, and on which the jury returned a verdict of not guilty; Counts Five and
Six which charged mail fraud in violation of 18 U.S.C. § 1341; Count Seven charging
fraud and intentional misapplication of funds involving a local government receiving
federal funds in violation of 18 U.S.C. § 666(a)(1)(A); and Count Eight charging Vas
with making false statements about the property-flip scheme to federal law enforcement
agents in violation of 18 U.S.C. § 1001(a)(2).
   3
     RCA funds are municipal funds available through a New Jersey state program
enabling municipalities to share funds for the development of low and moderate income
housing. That program was administered by the New Jersey Council on Affordable
Housing, the state agency responsible for monitoring municipal affordable housing
obligations.
                                             3
437g(d)(1)(A)(ii).4 In this scheme, city employees and other persons made donations to

Vas’ congressional campaign and were then reimbursed with cash received from other

donors.

       Following his convictions, the District Court sentenced Vas to 78 months

imprisonment, a fine of $73,200, and restitution of $90,000.

       Vas filed a timely notice of appeal.

                                              II.

       Vas makes numerous arguments on appeal. First, he argues that the jury’s verdicts

on various counts were against the weight of the evidence and that the District Court

erred in failing to grant a judgment of acquittal on those charges. Second, Vas contends

that his due process rights were violated by the Government’s misjoinder of the property-

flip counts and the straw-donor count and by the District Court’s refusal to sever them.

Vas next argues that he is entitled to a new trial because the District Court improperly

admitted evidence of other wrongful acts in violation of Federal Rule of Evidence 404(b).

Finally, Vas challenges the District Court’s sentencing guidelines calculation and its

imposition of $90,000 in restitution to the City of Perth Amboy.

                                              A.

       Vas argues that the jury’s verdicts on the various counts were against the weight of

the evidence and that the District Court erred by denying his Rule 33 motion for a new

   4
    Vas was not charged on Counts Nine through Eleven, which charged only co-
defendant Ramos.
                                         4
trial. This court reviews a district court’s denial of a motion for a new trial under Rule 33

for abuse of discretion. See United States v. Kelly, 539 F.3d 172, 181 (3d Cir. 2008).

Where, as here, a defendant’s Rule 33 motion is premised on the argument that the jury’s

verdict was against the weight of the evidence, the task of the district court is not to

“view the evidence favorably to the Government, but instead [to exercise] its own

judgment in assessing the Government’s case.” United States v. Brennan, 326 F.3d 176,

189 (3d Cir. 2003) (quoting United States v. Johnson, 302 F.3d 139, 150 (3d Cir. 2002)).

“A district court can order a new trial on the ground that the jury’s verdict is contrary to

the weight of the evidence only if it believes that there is a serious danger that a

miscarriage of justice has occurred – that is, that an innocent person has been convicted.”

Id.

       Vas bases many of his sufficiency of the evidence challenges on purported

inconsistencies in testimony that he believes made witnesses Evan Samouhos, Jeffrey

Gumbs, FBI Special Agent Edward Quinn, Raymond Geneske, and David Benyola not

credible. We reject these arguments.

       The determination of witness credibility is the province of jury. See Brennan, 326

F.3d at 191. After a careful review of the record, we agree with the District Court that,

while the testimony of the Government’s witnesses contained minor inconsistencies and

weaknesses – all of which were the subject of extensive cross examination by defense

counsel – the overall testimony was “very consistent with what the allegations stated in

the indictment.” Supp. App. at 417-18. Moreover, the challenged testimony was
                                              5
supported by considerable documentary evidence as well as by the testimony of other

witnesses whose credibility is not challenged on appeal.

       Vas makes two additional arguments that the Government failed to produce any

credible evidence supporting the property-flip counts. These arguments are easily

rejected.

       First, Vas argues that he had a good faith belief that he was acting lawfully with

regard to the property-flip scheme. This contention is contradicted by the record. First,

Kathleen McGlinchy, a state official, testified that she told Vas in advance that some of

his proposed actions were improper under state regulations. Second, Vas’ non-

disclosures, acts of concealment, and subsequent false statements to the FBI are all

circumstantial evidence from which the jury could have inferred that Vas knew his

actions were unlawful and acted with fraudulent intent. See United States v. Pearlstein,

576 F.2d 531, 541 (3d Cir. 1978).

       Vas makes a related argument that the Government failed to show that he made

material false statements. In Vas’ view, the Government only proved that Vas failed to

disclose certain facts, without producing evidence that Vas was under an affirmative

obligation to make any disclosures. Here again Vas’ contention is contradicted by the

record. The Government produced evidence showing that Vas engaged in affirmative

acts to conceal his interest in the DeKalb property, including, for example, evidence that

Vas went outside the normal channels for approval of Government payments and had

third parties make requests with respect to RCA funding for the DeKalb property in order
                                             6
to disguise his interest. This evidence is sufficient to support his convictions on the

challenged counts. See, e.g., United States v. Olatunji, 872 F.2d 1161, 1167 (3d Cir.

1989).

         In sum, we reject the suggestion that there was a miscarriage of justice, and hold

that the District Court did not abuse its discretion in denying Vas’ motion for a new trial.

                                              B.

         Vas, using the same arguments made in support of his motion for a new trial, asks

this court to reverse the District Court’s denial of his motion for a judgment of acquittal

on Counts Five, Six, Seven, Eight, and Twelve of the superseding indictment. “We

exercise plenary review over a district court’s grant or denial of a motion for judgment of

acquittal based on sufficiency of the evidence.” United States v. Starnes, 583 F.3d 196,

206 (3d Cir. 2009). That review “is governed by strict principles of deference to a jury’s

findings.” United States v. Anderskow, 88 F.3d 245, 251 (3d Cir. 1996) (internal

quotation marks and citation omitted). We will overturn a verdict only “if no reasonable

juror could accept the evidence as sufficient to support the conclusion of the defendant’s

guilt beyond a reasonable doubt.” United States v. Lacy, 446 F.3d 448, 451 (3d Cir.

2006) (quoting United States v. Coleman, 811 F.2d 804, 807 (3d Cir. 1987)).

         For the same reasons we rejected Vas’ argument that he was entitled to a new trial,

we conclude that the Government presented evidence sufficient to sustain Vas’

convictions on the challenged counts.

                                              C.
                                               7
       Vas next argues that the superseding indictment improperly joined the property-

flip counts and the straw-donor counts and that the District Court erred by declining to

sever the straw-donor counts.

       We make an “independent determination” as to whether the joinder of counts was

proper. United States v. McGill, 964 F.2d 222, 241 (3d Cir. 1992) (internal quotation

marks and citation omitted). Our inquiry focuses on the facts alleged in the indictment,

not upon the proofs made at trial. United States v. Irizarry, 341 F.3d 273, 287 (3d Cir.

2003). Under Rule 8(b), “[the] indictment or information may charge 2 or more

defendants if they are alleged to have participated in the same act or transaction, or in the

same series of acts or transactions, constituting an offense or offenses. The defendants

may be charged in one or more counts together or separately. All defendants need not be

charged in each count.” Fed. R. Crim. P. 8(b). Under Rule 8(b), joinder of counts is

proper if the indictment alleges a “transactional nexus” between the counts being joined.

McGill, 964 F.2d at 241 (quoting United States v. Eufrasio, 935 F.2d 553, 570 n.20 (3d

Cir. 1991)).

       The transactional nexus requirement is easily met in this case. The superseding

indictment alleges an overall scheme to fund Vas’ campaign coffers, of which the

property-flip scheme and the straw-donor scheme were parts. Specifically, the

superseding indictment alleges that Vas used part of the profits from the sale of the

DeKalb property to fund his congressional campaign. This allegation satisfies the

transactional nexus requirement. See, e.g., id. (approving joinder of bribery and tax
                                              8
evasion counts where the Government alleged an overall “enrichment scheme”

motivating both offenses).

          Vas next contends that even if joinder of the counts was proper under Rule 8(b),

the District Court should have exercised its discretion to sever the straw-donor counts

under Rule 14. We review the denial of a motion to sever for abuse of discretion. See

Eufrasio, 935 F.2d at 568. Even where a district court abuses its discretion, however,

“we need reverse a conviction only if the appellant shows specifically that the denial

caused . . . clear and substantial prejudice resulting in a manifestly unfair trial.” Id.

(internal emphasis, quotation marks, and citation omitted). It is not sufficient for a

defendant to allege merely that severance would have improved his chances for acquittal.

See id.

          Vas’ argument on appeal falls far short of showing the required prejudice. He

argues generally that “[h]earing about the alleged wide-ranging lawlessness involved in

the execution of both the real estate scheme and the separate and different campaign

scheme, likely led the jury to brand the defendants as individuals with entrenched

criminal propensities . . . .” Appellant’s Br. at 56-57. Contrary to this argument,

however, most if not all of the evidence related to the straw-donor count would have been

admissible to show Vas’ motive with respect to the property-flip scheme. See Eufrasio,

935 F.2d at 569 (holding that district court did not abuse its discretion in denying motion

for severance where the allegedly prejudicial evidence would have been admissible in

separate trials). Moreover, the District Court gave a careful limiting instruction, directing
                                               9
the jury to consider the evidence on each count and against each defendant separately.

See United States v. Walker, 657 F.3d 160, 171 (3d Cir. 2011) (“We presume that the jury

followed those instructions, and thus we regard the instructions as persuasive evidence

that refusals to sever did not prejudice the defendants.” (internal quotation marks and

citations omitted)). In sum, the record reveals no reason to believe that the jury would

have been unable to compartmentalize the evidence as to the separate counts and separate

defendants or that Vas suffered clear and substantial prejudice as a result of the District

Court’s refusal to sever. It follows that we will not reverse the District Court’s denial of

Vas’ motion to sever.

                                             D.

       Vas argues that the District Court improperly admitted evidence of his prior

crimes, wrongs, or acts in violation of Rule 404(b) of the Federal Rules of Evidence.

Specifically, Vas takes issue, first, with the admission of Raymond Geneske’s testimony

that before the actions charged in the superseding indictment, Vas had promised RCA

funds to another real estate developer, from whom Vas subsequently received a campaign

contribution. Second, Vas challenges the admission of testimony by Jeffrey Gumbs

relating to Gumbs’ guilty pleas to three crimes in state court. During that testimony,

Gumbs named Vas as a beneficiary of two of the crimes to which he pled guilty.

       We review a district court’s decision to admit evidence under Rule 404(b) for

“abuse of discretion, which may be reversed only when clearly contrary to reason and not

                                             10
justified by the evidence.” United States v. Butch, 256 F.3d 171, 175 (3d Cir. 2001)

(internal quotation marks and citations omitted).

       “Rule 404(b) is a rule of inclusion rather than exclusion.” United States v. Cruz,

326 F.3d 392, 395 (3d Cir. 2003). “[T]he purpose of Rule 404(b) is simply to keep from

the jury evidence that the defendant is prone to commit crimes or is otherwise a bad

person, implying that the jury needn’t worry overmuch about the strength of the

government’s evidence. No other use of prior crimes or other bad acts is forbidden by

the rule . . . .” United States v. Green, 617 F.3d 233, 249 (3d Cir. 2010) (internal

emphasis, quotation marks and citations omitted). A proper purpose for the admission of

evidence under Rule 404(b) includes “proof of motive, opportunity, intent, preparation,

plan, knowledge, identity, or absence of mistake or accident.” United States v. Cross,

308 F.3d 308, 319 (3d Cir. 2002) (quoting Fed. R. Evid. 404(b)). Even where a district

court erred in admitting evidence, we will not reverse if the error was harmless. Id. at

326.

       Our review of the record confirms that Geneske’s testimony was relevant for

proper purposes, including evidencing Vas’ intent and knowledge with respect to the

property-flip and straw-donor scheme, because it showed that Vas knew how to use

promises of RCA funds to obtain benefits for himself. See United States v. Mathis, 264

F.3d 321, 326-27 (3d Cir. 2001) (affirming admission of evidence of prior bank robberies

to show modus operandi of the charged offense). We note that this evidence was subject

to vigorous cross examination by Vas’ attorney and a thorough limiting instruction, both
                                             11
of which mitigated the risk of unfair prejudice. See id. at 328. As such, we conclude that

Geneske’s testimony was relevant for proper purposes under Rule 404(b) and that the

considerable probative value of that testimony was not substantially outweighed by the

risk of unfair prejudice.

       With regard to the testimony of Jeffrey Gumbs, Vas takes issue with the admission

of Gumbs’ statement that he pled guilty to charges related to “[u]sing city funds to pay

for sports camp for my son and Mayor Joseph Vas’ son.” App. at 1394.5 Even assuming

that this statement was improperly admitted, we conclude that its admission was

harmless. A non-constitutional error is harmless “if it is highly probable that the error did

not contribute to the judgment.” Cross, 308 F.3d at 326 (internal quotation marks and

citation omitted).

       It is highly probable that the admission of Gumbs’ single statement about using

city funds to pay for summer camp for Vas’ son did not contribute to the judgment. First,

the challenged testimony represents only a very small part of Gumbs’ testimony at trial,

and the Government did not refer to it in opening or summation. Second, the District

Court gave a careful limiting instruction worded to cure any improper prejudice caused

by Gumbs’ statement. Specifically the District Court instructed the jury that “[y]ou are to

   5
      In his Reply Brief, Vas contends additionally that the Government’s admission of
this evidence constituted unfair surprise in violation of a pre-trial agreement. However,
we need not consider this argument because Vas failed to raise it clearly in his opening
brief. See United States v. Pelullo, 399 F.3d 197, 222 (3d Cir. 2005) (“It is well settled
that an appellant’s failure to identify or argue an issue in his opening brief constitutes
waiver of that issue on appeal.”).
                                               12
draw no conclusions whatsoever about Mayor Vas’ involvement [in the misappropriation

of those city funds].” App. at 1403. We presume that the jury followed this instruction.

See Walker, 657 F.3d at 171. Finally, we note that the Government’s evidence in this

case was strong, based on the largely consistent testimony of numerous witnesses and

considerable documentary evidence. Accordingly, we conclude that any error the District

Court made in admitting Gumbs’ statement was harmless.

                                             E.

       At sentencing, the District Court applied a 12-level enhancement based on its

finding that Vas was responsible for $90,000 in actual loss and $360,000 in intended loss

to the City of Perth Amboy. The District Court ordered Vas to pay $90,000 in restitution

to the City of Perth Amboy. Vas challenges both of these rulings on appeal, arguing that

Perth Amboy actually received $90,000 worth of benefit because $90,000 worth of

rehabilitation was conducted on low income housing at the DeKalb property. Vas argues

further that there was no intended loss because the City would have received a full

$360,000 worth of rehabilitation had the entire amount of funds been issued.

       A district court’s factual findings are reviewed for clear error. See United States v.

Dullum, 560 F.3d 133, 140 (3d Cir. 2009). We review a district court’s application of the

Guidelines to the facts of a case for abuse of discretion. See United States v. Tupone, 442

F.3d 145, 149 (3d Cir. 2006).

       Vas’ arguments about loss miss the mark. Because of Vas’ improper manipulation

of the approval process, there is no way to know whether the City would have chosen to
                                             13
spend its scarce resources on another project had the proper legal processes been

followed. Because Vas deprived the City of the ability to decide what to do with its

funds, Vas is in no position to argue that it received some incidental benefit from his

misappropriation. See United States v. De La Cruz, 469 F.3d 1064, 1070 (7th Cir. 2006)

(“A sidewalk might have some objective value, but that does not mean the citizens of

East Chicago value it more than increased police protection or other improved city

services. The value of losing this decision-making ability offsets any gain in sidewalks

actually received.”). We thus reject Vas’ arguments about loss enhancement and the

imposition of $90,000 in restitution.

                                            III.

       In conclusion, we reject Vas’ arguments and affirm the judgment and sentence of

the District Court.

                                             14