U.S. v. Urciuoli

• Decision Date: 18 January 2008
• Docket Number: No. 07-1327.,No. 07-1297.,07-1297.,07-1327.
• Citation: 513 F.3d 290
• Parties: UNITED STATES of America, Appellee, v. Robert A. URCIUOLI, Defendant, Appellant. United States of America, Appellee, v. Frances P. Driscoll, Defendant, Appellant.
• Court: U.S. Court of Appeals — First Circuit

513 F.3d 290

UNITED STATES of America, Appellee, v. Robert A. URCIUOLI, Defendant, Appellant.

United States of America, Appellee, v. Frances P. Driscoll, Defendant, Appellant.

No. 07-1297.

No. 07-1327.

United States Court of Appeals, First Circuit.

Heard December 3, 2007.

Decided January 18, 2008.

Martin G. Weinberg with whom Kimberly Homan was on brief for appellant Robert A. Urciuoli.

John A. MacFadyen with whom B. Jean Rosiello and MacFadyen, Gescheidt & O'Brien were on brief for appellant Frances P. Driscoll.

Donald C. Lockhart, Assistant United States Attorney, with whom Robert Clark Corrente, United States Attorney, Luis M. Matos, First Assistant United States Attorney, and Dulce Donovan, Chief, Civil Division, were on consolidated brief for appellee.

Before BOUDIN, Chief Judge, TORRUELLA, Circuit Judge, and STAHL, Senior Circuit Judge.

BOUDIN, Chief Judge.

Robert Urciuoli and Frances Driscoll, defendants in the district court and now appellants, served respectively as CEO and Senior Vice President of Rhode Island's Roger Williams Medical Center ("RWMC"). Its subsidiaries included Roger Williams Hospital; a nursing home known as Elmhurst Extended Care Facilities; and Roger Williams Realty, which half-owned an assisted living facility called the Village at Elmhurst ("the Village"). During a legislative battle in which RWMC had an interest, the two executives became acquainted with Rhode Island state senator John Celona.

In Rhode Island's "citizen legislature," legislators serve part-time, are modestly paid and ordinarily have other jobs. Celona operated a lawnmower business. The lawnmower business ran into trouble, and (during or just after the legislative battle affecting RWMC) Celona approached Urciuoli about obtaining employment at RWMC. Ultimately, in February 1998, Celona signed a contract, disclosed in public filings, that purported to employ him as a consultant to the Village.

Thereafter Celona did engage in some work on behalf of the Village (e.g., making some referrals and highlighting the facility on his television program). But Celona also engaged in certain other activities between his hire in 1998 and the termination of the employment in early 2004. These activities, the subject of later criminal proceedings and this appeal, can be divided into three categories.

Celona communicated with Urciuoli and Driscoll about various pieces of legislation; defendants allegedly asked Celona to try to "kill" certain bills and otherwise to promote RWMC's interests with respect toy pending legislative matters;

Celona lobbied a number of municipal officials (mayors and fire chiefs) in order to increase the number of patients brought to Roger Williams Hospital by ambulance service ("rescue runs"); and

Celona facilitated meetings at his government office between Urciuoli and representatives of two major insurance companies, pressing the parties to resolve longstanding disputes about reimbursements owed to RWMC.

Celona did not disclose in any of these instances that he was acting on behalf of RWMC or its hospital. That alleged con= nection came to light after other, unrelated corruption charges involving Celona emerged.

Urciuoli, Driscoll, Peter Sangermano (the manager of the Village) and RWMC itself were thereafter indicted in the federal district court in Rhode Island on counts of conspiracy to commit "honest services" mail fraud and various counts of such mail fraud; 18 U.S.C. §§ 371, 1341, 1346 (2000). In substance, the government claimed that the executives had devised a scheme beginning in 1998, and ending in 2004, to offer Celona a disguised bribe in the form of a sham or largely sham job at one of RWMC's subsidiaries; in exchange, the government claimed, Celona advanced RWMC's financial interests by exploiting his public office in the three ways described above.

Celona pled guilty to mail fraud based in part on the conduct alleged. RWMC made its own plea bargain. The three remaining individual defendants went to trial. Each faced the conspiracy count and one or more mail fraud counts based on the premise of a single fraudulent scheme to deprive Rhode Island citizens of the honest services of Celona; individual mail fraud counts designated particular mailings as carrying out the scheme. Urciuoli was charged in most of these counts; Driscoll, who had left RWMC in 2000 and had nothing to do with the insurance phase of the case, was charged only in the conspiracy count and one of the substantive counts.

At trial, the prosecution contended that Celona's employment by the Village was a sham. It offered evidence that Celona's work for the Village was minimal given his ample salary ($700 per week at the start and eventually as much as $1,000 per week); that he reported to Urciuoli and Driscoll rather than to Village management; that his salary was covered by RWMC rather than the Village; and that his limited work for the Village decreased over the years. Celona was, on the prosecution's theory, being paid by RWMC for his influence on legislation, his lobbying of the mayors, and his pressuring of the insurance companies.

After deliberating for seven days, the jury found Urciuoli guilty on one count of conspiracy to commit mail fraud, 18 U.S.C. § 371, and on thirty-five counts of mail fraud, id. §§ 1341, 1346; Driscoll was convicted of a single count of mail fraud, on the theory that she aided and abetted Urciuoli. Sangermano was acquitted. Urciuoli was sentenced to 36 months in jail; Driscoll to 8 months in jail and 8 in home confinement. We stayed execution of the sentences pending these appeals.

The cloak of office instruction. On appeal, defendants do not dispute that the evidence was adequate to convict them of honest services mail fraud so far as the convictions may have rested on bribing Celona to influence legislation; but they say that the jury instructions wrongly allowed for conviction based on Celona's lobbying of mayors and his meetings with insurance companies, conduct that they claim does not constitute a federal crime.

This instruction issue, which we review de novo, United States v. Woodward, 149 F.3d 46, 68-69 (1st Cir.1998), cert. denied, 525 U.S. 1138, 119 S.Ct. 1026, 143 L.Ed.2d 37 (1999), turns on how broadly the statute should be read as to functions other than the enacting of legislation; closely related is the question whether the specific episodes in question (the lobbying of mayors and the insurance activities) fall within the statute, also a legal issue open to de novo review. Cf. United States v. Sawyer, 85 F.3d 713, 726-27 (1st Cir.1996) ("Sawyer I"). Defendants did not seek a directed verdict as to these episodes, presumably because the indictment did not assign the disputed conduct to distinct counts but bundled it into a single overall scheme along with the alleged buying of Celona's influence on legislation.

The federal mail fraud statute, 18 U.S.C. § 1341, is built upon a single, archaic 204-word sentence which, reduced to its essence, makes it unlawful to use the mails in relation to "any scheme or artifice to defraud." The statute has undergone "repeated periods of rapid expansion and contraction." Coffee, Modern Mail Fraud: The Restoration of the Public/Private Distinction, 35 Am.Crim. L.Rev. 427, 427 (1998). Its application to political misconduct and corruption, as opposed to ordinary private fraud (e.g., bank fraud, commercial scams), has been especially fraught.¹

Notably, after the Supreme Court held the statute inapplicable to cases of political corruption that involve no loss of money or tangible property, McNally v. United States, 483 U.S. 350, 358-60, 107 S.Ct. 2875, 97 L.Ed.2d 292 (1987), Congress overturned this construction by enacting section 1346; the new provision, passed with scant legislative history, defined the term "scheme or artifice to defraud" to include "a scheme or artifice to deprive another of the intangible right of honest services." 18 U.S.C. § 1346; see Sawyer I, 85 F.3d at 723-24. Prosecutors have sought to sweep much abusive political conduct within this proscription; in a number of cases courts have been more guarded.

The central problem is that the concept of "honest services" is vague and undefined by the statute. So, as one moves beyond core misconduct covered by the statute (e.g., taking a bribe for a legislative vote), difficult questions arise in giving coherent content to the phrase through judicial glosses. Closely related concerns are assuring fair notice to those governed by the statute, see Bouie v. City of Columbia, 378 U.S. 347, 350, 84 S.Ct. 1697, 12 L.Ed.2d 894 (1964), and cabining the statute—a serious crime with severe penalties—lest it embrace every kind of legal or ethical abuse remotely connected to the holding of a governmental position. Sawyer I, 85 F.3d at 725 (statute "does not encompass every instance of official misconduct that results in the official's personal' gain"); see also United States v. McNeive, 536 F.2d 1245, 1252 (8th Cir. 1976).

This court has wrestled with the statute in a number of cases. We have held that the obligations it imposes attach not only to formal official action like votes but also the informal exercise of influence on bills by a legislator, United States v. Potter, 463 F.3d 9, 18 (1st Cir.2006), and that it prohibits influence-buying short of formal bribes, United States v. Sawyer, 239 F.3d 31, 40 nn. 8-9 (1st Cir.2001) ("Sawyer II"); but our decisions also rejected a claim that the statute was violated merely by unlawful gratuities to a legislator, Sawyer I, 85 F.3d at 729, or by an IRS employee who accessed confidential computerized tax files for his own amusement and in violation of ordinary confidentiality restrictions, United States v. Czubinski, 106 F.3d 1069, 1077 (1st Cir.1997). Although one might prefer a more clearly drafted statute, the Supreme Court has regularly used judicial glosses to clarify and focus language in criminal statutes of even...