U.S. v. Bryant

Decision Date05 June 2008
Docket NumberNo. 07-CR-267 (FLW).,07-CR-267 (FLW).
Citation556 F.Supp.2d 378
PartiesUNITED STATES of America, Plaintiff, v. Wayne R. BRYANT, et al., Defendants.
CourtU.S. District Court — District of New Jersey

Adam S. Lurie, Office of the US Attorney, Newark, NJ, Joshua Drew, William E. Fitzpatrick, Norman Joel Gross, Office of the US Attorney, Camden, NJ, for the Government.

Carl D. Poplar, Cherry Hill, NJ, Lisa Mathewson, Welsh & Recker, Esqs., Philadelphia, PA, for Wayne R. Bryant.

Jeremy D. Frey, Pepper Hamilton, LLP, Philadelphia, PA, Ralph A. Jacobs, Ralph A. Jacobs & Associates, LLC, Haddonfield, NJ, for R. Michael Gallagher.

Opinion

WOLFSON, District Judge:

Presently before the Court are the motions of Defendants, Wayne Bryant ("Bryant") and Michael Gallagher ("Gallagher") (collectively "Defendants"), to dismiss all counts of the Indictment against them, pursuant to Fed. R. Crim P. 12(b)(3), and to sever various sets of counts in the Indictment, as well as for separate trials on Counts 1-8. At all times relevant to the allegations in the Indictment, Bryant was a State Senator of New Jersey and Gallagher was the Dean of the School of Osteopathic Medicine ("SOM"), which operated within the University of Medicine and Dentistry of New Jersey ("UMDNJ"). Counts 1-6 allege that Bryant and Gallagher engaged in a scheme to defraud the New Jersey public of Bryant's honest services in violation of 18 U.S.C. §§ 1341, 1343, and 1346.1 Count 7 charges Bryant with solicitation and acceptance of a corrupt thing of value involving an organization receiving federal funds in violation of 18 U.S.C. § 666. Count 8 charges Gallagher with offering and giving a corrupt thing of value involving an organization receiving federal funds in violation of 18 U.S.C. § 666. Counts 9-14 allege that Bryant engaged in a scheme to defraud the New Jersey Division of Pensions and Benefits of money and property in violation of 18 U.S.C. § 1341. Counts 15-17 allege that Gallagher engaged in a scheme to defraud SOM and UMDNJ of his honest services and money and property in violation of 18 U.S.C. §§ 1341, 1343, and 1346. Finally, Counts 18-20 charge Gallagher with fraud involving an organization receiving federal funds in violation of 18 U.S.C. § 666.

Defendants have filed separate briefs, but have also joined in each other's motions and briefing. The Government has opposed the motions and oral argument was heard on March 11, 2008. For the reasons that follow, Defendants' motions to dismiss are denied, with the exception of Bryant's motion to dismiss Count 9, and Defendants' motion to dismiss the failure to disclose theory of honest services fraud plead in paragraph 18 of Counts 1-6. As to Defendants' severance motions, the Court finds that Counts 1-14 are appropriately tried in a single trial, Defendants are properly joined in Counts 1-6, and that Counts 15-20 require a separate trial. For clarity of presentation, the Court will summarize the pertinent factual background relating to each set of Counts within the separate sections analyzing those Counts.

I. Standard of Review

Defendants move to dismiss all Counts of the Indictment pursuant to Rule 12(b)(3). "Rule 7(c)(1) requires that an indictment contain only a `plain, concise, and written statement of the essential facts constituting the offense charged' and include the statute(s) that the defendant(s) are alleged to have violated." United States v. Delle Donna, 552 F.Supp. 475, 482, 2008 WL 1961485, *5 (D.N.J. Mar. 14, 2008) (citation omitted). As succinctly stated by the Third Circuit, the standard for evaluating the sufficiency of an indictment is as follows:

We deem an indictment 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 event of a subsequent prosecution." Moreover, "no greater specificity than the statutory language is required so long as there is sufficient factual orientation to permit the defendant to prepare his defense and to invoke double jeopardy in the event of a subsequent prosecution." United States v. Kemp, 500 F.3d 257, 280 (3d Cir.2007) (citations omitted). Dismissal under Rule 12(b)(3) "may not be predicated upon the insufficiency of the evidence to prove the indictment's charges," United States v. DeLaurentis, 230 F.3d 659, 661 (3d Cir.2000), and thus the Court must assume that the allegations in the Indictment are true. United States v. Besmajian, 910 F.2d 1153, 1154 (3d Cir. 1990). The Court will review the Indictment "using a common sense construction," United States v. Hodge, 211 F.3d 74, 76 (3d Cir.2000), "examine the [statutes at issue] as applied to the facts as alleged in the Indictment, and determine whether Defendants' conduct, as charged, `reflect[s] a proper interpretation of criminal activity under the relevant criminal statute[s].'" Delle Donna, 2008 WL 1961485 at *5 (quoting United States v. Wecht, No. 06-0026, 2007 WL 3125096, *5 (W.D.Pa. Oct. 24, 2007)).

II. Counts 1-8
A. Factual Background

Counts 1-6 allege that Bryant and Gallagher engaged in a scheme to defraud the New Jersey public of Bryant's honest services as a State Senator. Counts 7-8 allege that Bryant solicited and accepted, and Gallagher offered and gave, a corrupt thing of value involving an organization receiving federal funds. The following facts are based on the allegations relevant to these Counts of the Indictment.

From 2002 through 2006, Bryant was a State Senator representing New Jersey's Fifth Legislative District. Indictment, Counts 1-6, ¶ 2. In or about 2002 and 2003, Bryant was Assistant Democratic Leader and co-Chairman of the Senate Budget and Appropriation Committee. In or about 2004, 2005 and 2006, Bryant was the Deputy Majority Leader and sole Chairman of the Senate Budget and Appropriations Committee. Id. From in or about May 13, 2002 until April 30, 2006, Gallagher was Dean of SOM and the Chairperson of the Headache Center, a department within SOM. Id. at ¶¶ 8-9.

The honest services fraud scheme, Counts 1-6, centered around UMDNJ, the State of New Jersey's school of health sciences, which was a recipient of several hundred million dollars of annual funding from the State of New Jersey. One of UMDNJ's eight schools was SOM. Id. at ¶ 1. In early 2002, Gallagher was the Vice Dean of SOM. It is alleged that, in or about February 2002, Bryant and others assisted Gallagher in his effort to become the Dean of SOM, including arranging meetings between Gallagher and members of the state legislature, and drafting a letter, which was signed by Bryant and four other members of the legislature, and sent to the Governor of New Jersey and to the President of UMDNJ in support of Gallagher's bid to become Dean. Id. at ¶ 7. In or about May 2002, Gallagher was selected as interim Dean, and in November 2002, Gallagher became the permanent Dean of SOM.

In or about March 2002, the Governor created a Commission of Health Science, Education and Training, chaired by P. Roy Valegos ("the Vagelos Commission"), to evaluate the medical education offered by New Jersey's state funded universities, including UMNDJ and SOM. In or about October 2002, the Vagelos Commission submitted findings to the Governor, which identified numerous problems, found that UMDNJ failed to "achieve excellence," and recommended that Rutgers University, UMDNJ, and the New Jersey Institute of Technology merge into a single university system. This recommendation, if adopted, directly threatened the independence of SOM, as well as future funding for SOM. Id. at ¶¶ 10-12.

Additionally, in or about April 2003, Gallagher reported to SOM staff that since in or about July 2002, SOM had "been in the midst of unprecedented `financial strain' ... caused in large part by significant reductions in State funding." Id. at ¶ 13. As Dean, Gallagher was responsible for oversight of the budget and fiscal management of SOM, Id., and, in or about April 2003, he imposed budget cuts and other cost-cutting measures at SOM. Id. at ¶ 15. During this time, based upon his performance evaluation, including "administrative competency, leadership, and organizational/business development," Gallagher was eligible for annual incentive bonuses. Id. at ¶ 14.

It is alleged that Bryant and Gallagher devised and engaged in a scheme to defraud the New Jersey public of Bryant's honest services by agreeing to a quid pro quo bribery arrangement:

It was an object of [the] scheme and artifice to defraud that defendant R. MICHAEL GALLAGHER used his position as Dean of SOM to put defendant WAYNE R. BRYANT on the SOM payroll, and thereafter, with others, caused defendant BRYANT to receive a stream of corrupt payments and other financial benefits from SOM, in exchange for defendant BRYANT using his position as a State Senator to take official action to advocate on behalf of SOM, including (a) to protect the interests of SOM against the recommendations of the Vagelos Commission and (b) to obtain and attempt to obtain additional funding and other benefits from the State of New Jersey for SOM and its programs. It was a further object of this scheme and artifice to defraud that defendants BRYANT and GALLAGHER did not disclose and attempted to conceal material information regarding the nature of defendant BRYANT's corrupt arrangement at SOM.

Id. at ¶ 18.

Allegedly, in furtherance of the scheme, Gallagher created a paid position at SOM for Bryant entitled "Program Support Coordinator," which included "planning, directing, organizing and implementing" efforts "to improve University communications, image, receptivity and relationships with local governments, community and civic organizations, and local residents," and Bryant assumed that position in March 2003. Id. at ...

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