U.S. v. Manzo

• Citation: 636 F.3d 56
• Decision Date: 17 February 2011
• Docket Number: No. 10–2489.,10–2489.
• Parties: UNITED STATES of America, Appellantv.Louis MANZO; Ronald Manzo.
• Court: United States Courts of Appeals. United States Court of Appeals (3rd Circuit)

636 F.3d 56

UNITED STATES of America, Appellant
v.
Louis MANZO; Ronald Manzo.

No. 10–2489.

United States Court of Appeals, Third Circuit.

Argued Jan. 11, 2011.Filed: Feb. 17, 2011.

[636 F.3d 58]

Mark E. Coyne, Esq., Office of United States Attorney, Newark, NJ, Glenn J. Moramarco, Esq. (Argued), Office of United States Attorney, Camden, NJ, for Appellant.John D. Lynch, Esq. (Argued), Union City, NJ, for Appellee, Louis Manzo.Samuel R. DeLuca, Esq., George T. Taite, Esq., DeLuca & Taite, Jersey City, NJ, for Appellee, Ronald Manzo.

[636 F.3d 59]

Before: RENDELL, AMBRO and FISHER, Circuit Judges.

OPINION OF THE COURT FISHER, Circuit Judge.

Defendants Louis Manzo (“Louis”) and Ronald Manzo (“Ronald”) were indicted as the result of a federal investigation into public corruption and money laundering in Hudson County, New Jersey. They were charged with, inter alia, conspiracy to commit extortion under color of official right in violation of 18 U.S.C. § 1951(a) (the “Hobbs Act”) and attempted extortion under color of official right in violation of the Hobbs Act. The District Court dismissed the conspiracy and attempt charges because it concluded that neither Louis, an unsuccessful mayoral candidate, nor Ronald, his brother and campaign manager, acted “under color of official right.” On appeal, the government argues that the conduct is within the scope of the Hobbs Act based on the principles underlying the inchoate crimes of attempt and conspiracy. For the reasons stated herein, we will affirm the judgment of the District Court. Specifically, we hold that acting “under color of official right” is a required element of an extortion Hobbs Act offense, inchoate or substantive, when that offense does not involve threatened force, violence or fear.

I.

The parties are in basic agreement on the facts. In May 2006, Solomen Dwek was arrested by the Federal Bureau of Investigation (“FBI”) on bank fraud charges. He subsequently agreed to become a cooperating witness for the FBI, assisting with an investigation into public corruption. In that role, Dwek posed as a real estate developer who was looking for assistance expediting his development projects through local government processes. Dwek surreptitiously recorded many of the meetings he attended. The investigation, dubbed “Bid Rig III,” resulted in the arrest of numerous Jersey City, New Jersey politicians on July 23, 2009.¹ Among those arrested were Louis and Ronald Manzo (collectively, the “Manzos”).

Louis was an unsuccessful Jersey City mayoral candidate in the election held on May 12, 2009. Although he had previously held public office in other capacities, he was not a public official at the relevant time here and did not pretend to be one. Ronald is the brother of Louis, and acted as his campaign manager and political advisor for the 2009 mayoral election.

Two individuals who previously accepted corrupt payments from Dwek, Edward Cheatam and Maher Khalil,² suggested that Dwek meet with Louis to protect his real estate development interests in Jersey City. Accordingly, the Manzos, Dwek and Cheatam participated in a series of six meetings, spanning from February 2009 to April 2009. Over the course of those meetings, Dwek agreed to make cash payments and illicit contributions to Louis's campaign in exchange for his future official assistance, action and influence. The Manzos accepted three cash payments from Dwek totaling $27,500 prior to the election. Dwek also agreed to pay the Manzos an additional $17,500 after Louis

[636 F.3d 60]

was elected, in exchange for Louis's official assistance as mayor.

The payments were made in furtherance of two separate schemes. First, Louis agreed to expedite approvals of a particular Jersey City real estate development project known as the “Garfield Development.” In exchange, Dwek paid the Manzos $20,000 before the election and promised to pay an additional $10,000 after Louis was elected. Second, Louis agreed to promote Khalil in exchange for a payment of $7,500 before the election and the promise of an additional $7,500 after the election.

The election was held on May 12, 2009, and Louis received 26% of the vote, finishing second in a five-candidate field. Mayor Jerramiah Healy received 53% of the vote and was re-elected. Because Louis was not elected mayor, he did not receive either of the two post-election payments that were agreed upon in furtherance of the two schemes.

On October 6, 2009, a grand jury in the District of New Jersey returned a six-count indictment, which charged the Manzos with: (1) one count of conspiracy to commit extortion under color of official right in violation of the Hobbs Act; (2) three counts of attempted extortion under color of official right in violation of the Hobbs Act; and (3) two counts of travel in interstate commerce to promote, carry on and facilitate bribery in violation of 18 U.S.C. §§ 1952(a)(3), 2. On April 20, 2010, the grand jury returned a superseding indictment with a seventh count, charging the Manzos with mail fraud in violation of 18 U.S.C. § 1341.

Louis Manzo filed a pretrial motion seeking dismissal of Counts One through Four, which charged the Hobbs Act conspiracy and attempt offenses. For the government to prove a violation of the Hobbs Act using the “under color of official right” theory, it “need only show that a public official has obtained a payment to which he was not entitled, knowing that the payment was made in return for official acts.” Evans v. United States, 504 U.S. 255, 268, 112 S.Ct. 1881, 119 L.Ed.2d 57 (1992). Louis argued that the government could not meet this burden because at all relevant times he was merely a candidate and did not act “under color of official right” as a public official. Ronald joined in the motion.

The District Court granted the Manzos' motion seeking dismissal of the Hobbs Act attempt and conspiracy charges. It applied the rule of lenity, and held that the conduct was “not clearly within the scope of the Hobbs Act even if only conspiracy or attempt [was] charged.” United States v. Manzo, 714 F.Supp.2d 486, 496 (D.N.J.2010). Specifically, the District Court held that because neither Louis nor Ronald held public office, they did not act “under color of official right.” Id. at 500. It therefore dismissed the conspiracy and attempt charges because the indictment insufficiently alleged the elements of the offense intended to be charged. The government timely appealed.

II.

The District Court had subject matter jurisdiction under 18 U.S.C. § 3231. We have jurisdiction under 18 U.S.C. § 3731.

We have plenary review over the sufficiency of an indictment to charge an offense. United States v. Yusuf, 536 F.3d 178, 184 (3d Cir.2008). An indictment is “sufficient so long as it (1) contains the elements of the offense intended to be charged, (2) sufficiently apprises the defendant of what he must be prepared to meet, and (3) allows the defendant to show with accuracy to what extent he may plead a former acquittal or conviction in the

[636 F.3d 61]

event of a subsequent prosecution.” United States v. Kemp, 500 F.3d 257, 280 (3d Cir.2007) (internal quotation marks omitted). We presume that the factual allegations in an indictment are true for the purpose of this analysis. United States v. Besmajian, 910 F.2d 1153, 1154 (3d Cir.1990).

III.

This case presents a significant and novel question, creatively framed and well-presented by the government. In essence, it asks us to consider whether an unsuccessful candidate for public office can attempt or conspire to obtain property from another with that person's consent induced under color of official right within the meaning of the Hobbs Act.³ Whether the Manzos can be charged with conspiracy or attempt to violate the Hobbs Act turns initially on whether they acted “under color of official right.” ⁴

The District Court concluded that the Manzos were not acting “under color of official right” because: (a) the Hobbs Act is ambiguous and the legislative history supports a narrow construction of the phrase; (b) the congressional purpose of the statute corresponds with a narrow construction; and (c) the rule of lenity applies to narrow the application of the ambiguous statute. Moreover, the District Court concluded that acting “under color of official right” was a requirement even for prosecution of an inchoate violation of the Hobbs Act that did not involve threatened force, violence or fear. We agree and conclude that, because the Manzos did not act “under color of official right,” they may not be charged with attempt or conspiracy to extort in violation of the Hobbs Act.

A.

To determine whether the Manzos' conduct falls within the Hobbs Act, we begin with the plain meaning of the “under color of official right” language. Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984) (“If the intent of Congress is clear, that is the end of the matter[.]”); United States v. Gregg, 226 F.3d 253, 257 (3d Cir.2000). The Hobbs Act provides, in pertinent part:

(a) Whoever in any way or degree obstructs, delays, or affects commerce or the movement of any article or commodity in commerce, by robbery or extortion or attempts or conspires so to do, or commits or threatens physical violence to any person or property in furtherance of a plan or purpose to do anything in violation of this section shall be fined under this title or imprisoned not more than twenty years, or both.

(b) As used in this section—

[636 F.3d 62]

...

(2) The term “extortion” means the obtaining of property from another, with his consent, induced by wrongful use of actual or threatened force, violence, or fear, or under color of official right.

18 U.S.C. § 1951.

The scope of the term “under color of official right” is not readily apparent from the face of the statute. Indeed, courts have grappled with ambiguity embedded in the text of the Hobbs Act, and in particular, the “under color of...