In re Ferriero, Docket No. DRB 18-343

• Decision Date: 01 May 2019
• Docket Number: Docket No. DRB 18-343
• Parties: In the Matter of Joseph Anthony Ferriero An Attorney At Law
• Court: United States State Supreme Court (New Jersey)

In the Matter of Joseph Anthony Ferriero

An Attorney At Law

Docket No. DRB 18-343

Supreme Court of New Jersey

Argued: January 17, 2019

May 1, 2019

Disciplinary Review Board

District Docket No. XIV-2013-0697E

Decision

Eugene A. Racz appeared on behalf of the Office of Attorney Ethics.

Robert Hille appeared on behalf of respondent.

To the Honorable Chief Justice and Associate Justices of the Supreme Court of New Jersey.

This matter was before us on a motion for final discipline filed by the Office of Attorney Ethics (OAE), pursuant to R. 1:20-13(c), following respondent's conviction, in the United States District Court for the District of New Jersey (USDNJ), of: one count of racketeering, in violation of the Racketeer Influenced and Corrupt Organization Act (RICO) (18 U.S.C. § 1962(c) and New Jersey's bribery in official and political matters statute (N.J.S.A. 2C:27-2)); one count of using the United States mail in aid of a racketeering enterprise, in violation of the Travel Act (18 U.S.C. § 1952(a)(1)-(3)); and one count of wire fraud (18 U.S.C. § 1343). We determine to recommend respondent's disbarment.

Respondent was admitted to the New Jersey bar in 1982, the District of Columbia bar in 1988, and the New York bar in 1993. He has no prior discipline in New Jersey. On July 21, 2015, he was temporarily suspended as a result of his conviction in this matter. In re Ferriero, 222 N.J. 34 (2015). He remains suspended to date.

On September 11, 2013, respondent was charged in a five-count federal grand jury indictment with racketeering, bribery, and wire fraud, arising out of a scheme that he devised while serving as the chairperson of the Bergen County Democratic Organization (BCDO).

John Carrino owned and operated a software development company, C3 Holdings, LLC. C3 sold emergency notification software systems to local governments. As head of the BCDO, respondent arranged with Carrino to exert pressure on officials in several Bergen County municipalities, over whom he had some political influence, to enter into government software contracts. Inturn, he would receive from C3 a percentage of the gross revenue derived from municipal contracts awarded to C3.

On April 16, 2015, a federal jury found respondent guilty of several acts that violated the RICO statute and the New Jersey bribery statute. Specifically, as alleged in count one of the indictment, respondent had repeatedly used his position as BCDO chairperson and his influence as a high-ranking party official¹ to convince municipal officials in the Borough of Dumont, Township of Teaneck, Borough of Wood Ridge, Township of Saddle Brook, and the Borough of Cliffside Park to enter into contracts with C3 for which respondent received "kickbacks" from C3. Respondent received $11,875 in kickbacks from C3 contracts with the above municipalities. He never disclosed to the public officials that he stood to profit financially if C3 entered into contracts with public entities as a result of respondent's influences and recommendations.

Under count three of the indictment, respondent was found guilty of a Travel Act violation for using the United States mail and its facilities ininterstate commerce to distribute the proceeds of, and to promote, state law bribery, in aid of the C3 racketeering enterprise. Respondent created SJC Consulting, LLC (SJC), a Nevada limited liability company of which he was the sole member, to receive payments from C3. Respondent executed SJC incorporation documents, and then used the United States mail to send them from New Jersey to Nevada. He also used the mail or its facilities in respect of two additional agreements involving SJC and others.

Finally, respondent was convicted of wire fraud under count five. On July 9, 2008, he transmitted e-mails from Carrino to Borough of Cliffside Park officials, identifying Carrino as the sole member of C3. That document deliberately failed to disclose to those public officials respondent's financial interest in C3's contract with the Borough.

On December 4, 2015, the Honorable Esther Salas, U.S.D.J., sentenced respondent to thirty-five months in prison on each of the three counts, to be served concurrently, and ordered him to pay $11,875 in restitution to the municipalities he victimized.

At sentencing, Assistant United States Attorney, Rachael Honig, emphasized the lack of distinction between a public bribery official and a party official, for purposes of respondent's bribery crimes:

[C]orruption in this state has had, and continues to have a fundamental and corrosive effect on politics, and on the way that politics and politicians are perceived in New Jersey, fairly or unfairly.

And that is no less true when the person who is taking bribes is a party chairman, rather than a public official. And that is why the New Jersey bribery statute treats those people in exactly the same way, and has since the late seventies.

Indeed, I would submit that corruption by a party chairman can have a more fundamental and more corrosive effect on New Jersey politics and the perception of politics in New Jersey than corruption by, for example, a very low-level public official. . . . A party chairman has the ability to raise and spend large amounts of money on political campaigns. A party official has fewer campaign finance reporting obligations and no, absolutely no financial disclosure obligations.

And most importantly, a party chairman can lurk in the shadows, as we saw in this case. . . . Party chairmen can stand behind the scenes operating the leaves [sic] of power rather than in the full glare of the public spotlight. That makes it a very powerful position. . . . We are talking about millions of dollars. That gives a party chairman tremendous influence over people who want to be in public office, and people who are in public office.

[OAEbEx.C32-3 to 34-1.]²

Respondent appealed his December 14, 2015 conviction to the United States Court of Appeals for the Third Circuit, which, on August 4, 2017, affirmed the jury conviction, holding in part as follows:

[Respondent's] Travel Act and RICO convictions both rest on the jury's determination that, as a party official, he violated New Jersey's prohibition against "[b]ribery in official and political matters." N.J. Stat. Ann. § 2C:27-2. According to that provision, "[a] person is guilty of bribery if he directly or indirectly offers, confers or agrees to confer upon another, or solicits, accepts or agrees to accept . . . [a]ny benefit as consideration for a decision, opinion, recommendation, vote or exercise of discretion of a public servant, party official or voter on any public issue or in any public election." Id.

The record contains sufficient evidence to support the jury's conclusion Ferriero violated New Jersey's bribery statute. He agreed to accept payments from John Carrino as consideration for a particular recommendation on a public issue - namely, his favorable recommendation to Democrats holding office in Bergen County on the public issue of whether their towns should contract to hire C3.

[OAEbEx.E,11.]³

The Third Circuit Court found that:

Since Carrino sought municipal contracts for C3, Ferriero was uniquely situated to influenceDemocratic municipal officials by virtue of his position as their county party chair. The two struck an agreement. Ferriero would recommend C3 to local governments in exchange for a 25- to 33-percent commission on contracts for the towns that ultimately hired the company . . . .

To that end, Ferriero had drawn up a list of target Bergen County municipalities with corresponding names of Democrats in local office, and over the course of about a year, he "pushed hard for C3." . . .

Ferriero made these recommendations at BCDO sponsored events, at local political fundraisers, at informal meetings, or simply over email.

[OAEbEx.E3 to 4]

Finally, the Third Circuit concluded that respondent's bribery scheme was directly related to his role as a party official:

Therefore, the question is whether a rational juror could conclude the C3 bribery scheme was one means by which Ferriero participated in the conduct of party business.

The record contains more than enough evidence for a rational juror to conclude that it was. A rational juror could conclude it was party business when Ferriero recommended vendors to party members holding local office. As the District Court observed, multiple witnesses testified Ferriero regularly recommended vendors to local Democratic officials. In fact, the BCDO hosted an annual gala at the municipal convention where local officials came to find vendors and providers of professional services.

And, as party chair, Ferriero's recommendations carried great weight. A rational juror could conclude that when Ferriero made certain recommendations to local Democratic officials (regarding vendors or otherwise), it was party business by virtue of the considerable influence he held over those officials' reelection and career prospects. Indeed, Ferriero's list of target officials and towns in Bergen County was almost entirely composed of Democratic officials and towns controlled by Democrats. A rational juror could conclude Ferriero conducted party business and the C3 bribery scheme in tandem when he carried out the scheme by recommending C3 to local Democratic officials and using his influence to urge that they award C3 contracts. A rational juror could therefore conclude the pattern of bribery was one means by which Ferriero participated in the conduct of the BCDO's affairs.

[OAEbEx.E18 to 19, footnote omitted.]

On February 20, 2018, the Supreme Court of the United States denied respondent's petition for a writ of certiorari. Ferriero v. Untied States, 138 S.Ct. 1031 (2018).

Following a review of the record, we determine to grant the OAE's motion for final discipline. Final discipline proceedings in New Jersey are governed by R. 1:20-13(c). Under that Rule, a criminal conviction is conclusive evidence of guilt in a disciplinary proceeding. R. 1:20-13(c)(1)...