U.S. v. Holck
| Decision Date | 26 October 2005 |
| Docket Number | CRIM.A. No. 04-370-04.,CRIM.A. No. 04-370-03. |
| Citation | 398 F.Supp.2d 338 |
| Parties | UNITED STATES of America v. Glenn HOLCK Stephen M. Umbrell. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
Lawrence S. Lustberg, Crummy, Del Deo, Dolan, Griffinger and Vecchione, Newark, NJ, for Glenn Holck Stephen M. Umbrell.
Glenn Holck ("Holck") and Stephen M. Umbrell ("Umbrell") were convicted of participating in a conspiracy to commit honest services mail fraud and two counts of aiding and abetting honest services mail fraud. The extensive background of this case, which included a lengthy trial, is set forth this Court's prior Memorandum, U.S. v. Kemp, 379 F.Supp.2d 690 (2005), and other Memoranda identified therein. The Court issued an Order dated September 29, 2005 denying defendants' motions for acquittal under Rule 29, F.R.Crim. P. which the Court had held under advisement when first made at trial, and for new trial under Rule 33, F.R.Crim. P. The Court imposed sentence on Holck and Umbrell on October 6, 2005.
This Memorandum will review the sufficiency of the evidence as to Holck and Umbrell, and reasons for denial of their Motion for New Trial as to those grounds for which the Court has not yet explained its reasons.
Initially, Holck and Umbrell vigorously dispute this Court's prior interpretation of the crime of honest services fraud contained in the Court's Memorandum of October 29, 2004, 2004 WL 2612017. The Third Circuit not having issued any decisions on honest services mail fraud since that Memorandum, the Court will stand by its interpretation and apply it to the facts which were proved at trial, viewed in the light most favorable to the government. In summary, the Court finds that the evidence is sufficient under the first prong of honest services fraud, a quid pro quo bribery scheme, but insufficient under the second prong of honest services mail fraud, the so called conflict of interest prong.
Holck was President of Commerce Bank/Pennsylvania ("Commerce") and Umbrell was a Regional Vice President of the bank. Commerce had enlisted the services of Ronald White, Esquire, ("White"), originally a defendant in this case until his death prior to trial, to assist Commerce in obtaining business in the City of Philadelphia, which the indictment did not allege was unlawful, and the Court specifically charged the jury was lawful. See N.T. 4/7/05, at 252.
The evidence showed that Holck and Umbrell, on behalf of Commerce, aggressively sought increased business with the City of Philadelphia. Defendant Cory Kemp, ("Kemp"), as City Treasurer, had significant influence as to the placement of bank deposits. Commerce was also interested in making loans to, and increasing deposits by, the city or city-related entities.
The government's theory against Holck and Umbrell was that they used their lawful relationship with Ronald White to gain influence with Kemp, and gave Kemp significant and favorable loans, which deviated from the normal Commerce standards, both procedural and susbstantive standards, and were based on unusually and unwarrantedly generous credit standards; in return, Kemp gave preferential treatment to Commerce in getting city business in exchange for the benefits which Kemp received from White, Holck and Umbrell.
Holck and Umbrell, through their highly able counsel, aggressively contested the government's evidence at trial, and vigorously cross examined government witnesses in an attempt to rebut the government's arguments so that the jury would find that their clients had acted as rational, honest bankers in acting in the interest of their employer, Commerce, and had not joined the alleged conspiracy. Holck and Umbrell did not present any evidence. After carefully listening to approximately 27 days of testimony, including a large number of recorded conversations in which the vocal intonations and expressions may have made a distinct impression on the jury, plus four days of arguments, and after lengthy deliberations, the jury convicted Holck and Umbrell of conspiracy as charged in Count 1, and two counts of aiding and abetting honest services mail fraud, Count 19 relating to honest services wire fraud arising out of a January 29, 2003 e-mail from Holck to Commerce CEO Vernon Hill ("Hill") regarding city deposit accounts, Ex. 1058; and Count 21, honest services wire fraud arising out of a May 28, 2003 telephone call between White and Holck, Ex. 194. The jury acquitted Holck and Umbrell on several counts of aiding and abetting honest services wire fraud, and was unable to reach a verdict on several other counts.
The Court has reviewed the testimony at trial and the voluminous post-trial briefing submitted by Holck and Umbrell and the government, and has concluded that it would be legal error to overturn the jury's verdict. Although the evidence as to Holck and Umbrell is largely circumstantial, there is sufficient evidence in the record to sustain the verdict.
This Memorandum will merely summarize the voluminous evidence at trial. The government's evidence against Holck and Umbrell showed that they, often acting together, but sometimes separately, had made a conscious decision to give to Kemp, either personally or to other persons or entities for which he requested loans, a series of favorable loans and to ask for, and receive in return, preferential treatment from Kemp in awarding city-related business to Commerce. Some of these loans were made directly to Kemp, and some were made at Kemp's request to either Kemp's relatives or a church in which Kemp was active.
Kemp became the City Treasurer in April 2002. Shortly thereafter, on May 13, 2002, several Commerce executives arranged to meet with Kemp to promote additional business for Commerce, and reported on this meeting to Commerce's CEO Hill, in one of a series of regular reports called "Monday morning update" in which Umbrell states "Kemp is relatively new and we can position ourselves as a consultant to him." See Ex. 1026. White also helped Commerce set up a meeting with Kemp in early 2003. See Ex. 1058, which is also the subject of Count 19, see below. After this meeting, Holck reported to Hill that Kemp was favorable in increasing city business for Commerce. See Ex. 1126.
The first loan which the evidence showed that Commerce made at Kemp's request was to Paul Schnapp, related to Kemp by marriage, and also a close personal friend. This occurred...
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