U.S. v. Vitillo

• Citation: 490 F.3d 314
• Decision Date: 25 June 2007
• Docket Number: No. 05-4331.,No. 05-4330.,No. 05-4332.,05-4330.,05-4331.,05-4332.
• Parties: UNITED STATES of America v. John VITILLO, Vitillo Corporation and Vitillo Engineering, Inc., Appellants.
• Court: U.S. Court of Appeals — Third Circuit

490 F.3d 314

UNITED STATES of America v. John VITILLO, Vitillo Corporation and Vitillo Engineering, Inc., Appellants.

No. 05-4330.

No. 05-4331.

No. 05-4332.

United States Court of Appeals, Third Circuit.

Argued December 11, 2006.

Filed: June 25, 2007.

Henry E. Hockeimer, Jr., Esquire, (Argued), Ballard, Spahr, Andrews & Ingersoll, Philadelphia, PA, Rebecca Y. Starr, Esquire, Hangley, Aronchick, Segal & Pudlin, Philadelphia, PA, for Appellants.

Peter D. Hardy, Esquire, (Argued), Office of the United States Attorney, Philadelphia, PA, Patrick L. Meehan, Esquire, Robert A. Zauzmer, Esquire, Robert E. Goldman, Esquire, Office of the United States Attorney, Allentown, PA, for Appellee.

Before: SMITH and ROTH, Circuit Judges,^* IRENAS, District Judge.

OPINION

ROTH, Circuit Judge:

In this white collar criminal case, we address the scope of 18 U.S.C. § 666, which prohibits theft from programs, receiving federal funds, by agents of the organizations which administer those programs. Specifically, we consider whether an independent contractor with managerial responsibilities may be an "agent" under § 666.

John Vitillo, Vitillo Corporation, and Vitillo Engineering, Inc., were charged with several counts of theft, in violation of § 666(a)(1)(A), and conspiracy. A federal jury convicted each defendant on all counts. Defendants filed a FED. R. CRIM. P. 33(a) motion for a new trial based on alleged prosecutorial misconduct. The District Court denied the motion on April 29, 2005. Through new counsel, and approximately six months after trial, defendants filed a Rule 12(b)(3)(B) motion to dismiss the indictment for failure to state an offense. The District Court denied this motion on July 19, 2005. On September 12, 2005, the District Court sentenced John Vitillo to imprisonment and the corporate defendants to probation, and ordered all defendants to pay $317,760 in restitution. Defendants appeal the restitution order, as well as the District Court's April 29 and July 19 orders.

Because we find that independent contractors such as John Vitillo and his corporations, Vitillo Corporation and Vitillo Engineering, Inc., are not excluded from the § 666(d)(1) definition of "agent" and because the indictment sufficiently states a federal offense, we will affirm the District Court's order denying defendants' motion to dismiss the indictment. Because we find no prejudice with regard to prosecutorial misconduct, as the evidence of guilt is overwhelming, we will affirm the District Court's order denying defendants' motion for a new trial. Finally, because we find the restitution figure sufficiently grounded in the evidence, we will affirm the judgment of sentence.

I. BACKGROUND

At the relevant times, 1997-2000, the Reading Regional Airport (the Airport or RRA), located in Berks County, Pennsylvania, was a small airport that provided services to private and commuter airplanes. The Airport was owned by the City of Reading and managed by the Reading Regional Airport Authority (the Authority or RRAA), a local government agency that received significant funding from the Federal Aviation Administration. One of the Authority's federally-funded projects was its Terminal Expansion Project. Of the approximately $3 million the Authority received from the federal government between 1997 and 2000, approximately $1.5 million was set aside for this project.

Because the RRA was a small, regional airport, the Authority did not have a primary engineer on staff. In 1997, the Authority appointed John Vitillo's company, the Vitillo Group, Inc. (later reorganized into the Vitillo Corp. and a subsidiary, Vitillo Engineering, Inc.), of which he was president, to serve as the Authority's "primary engineer and principal engineering consultant." Vitillo and his companies, which billed for their work at an agreed-upon hourly rate, worked for the Authority from 1997 through 2000. During this time period, Vitillo managed several projects at the Airport, the largest of which related to managing the Terminal Expansion Project, which took over two years to complete.

On June 19, 2002, Assistant United States Attorneys (AUSAs) Robert Goldman and Kathleen Rice accompanied several FBI agents as they executed a search warrant at the office of Vitillo Corporation. The government suspected that John Vitillo and his companies were engaged in a massive overbilling scheme to defraud the Authority. During this search, the FBI agents seized various time cards and billing records. Additionally, with the consent of Vitillo's attorney, whose presence had been requested, Special Agent Thomas Neeson interrogated John Vitillo about his companies' billing practices. The interview was not recorded but was conducted in the presence of the AUSAs, who later served as trial counsel.

A federal grand jury in the Eastern District of Pennsylvania returned an indictment¹ against Vitillo and his companies, charging each with three counts of theft from an organization receiving federal funds, in violation of 18 U.S.C. § 666(a)(1)(A), and one count of conspiracy to violate § 666, in violation of 18 U.S.C. § 371. Defendants pleaded not guilty to all counts. At trial, the government presented substantial evidence that Vitillo and his companies—which had been in dire financial condition prior to contracting with the Authority—systematically created fraudulent invoices for work that was never actually performed at the Airport, thus defrauding the Authority of hundreds of thousands of dollars. Agent Neeson testified against the Vitillo defendants, as did Vitillo's own employees, who described their involvement in the fraudulent billing scheme; corporate records—parallel sets of phony and real time cards seized from Vitillo Corporation's offices—corroborated their testimony.

During opening statements and witness examination, AUSA Goldman made the jury aware that he and his co-counsel, AUSA Rice, had been present when Agent Neeson interrogated John Vitillo. Defense counsel objected and unsuccessfully moved for a mistrial, alleging that the prosecutors were improperly vouching for Agent Neeson's credibility. Also, during cross-examination of Vitillo, AUSA Goldman repeatedly asked Vitillo to comment on the veracity of Agent Neeson, but no objections were lodged.

The jury returned a verdict, finding Vitillo and his companies guilty on all four counts. The Vitillo defendants filed post-trial motions for a new trial and to dismiss the indictment, but both motions were denied. They never filed a motion challenging the sufficiency of the evidence. The District Court sentenced John Vitillo to 36 months of imprisonment and two years of supervised release. The corporate defendants were sentenced to 5 years of probation. Defendants were also ordered to pay $317,760 in restitution, jointly and severally. The District Court based this figure on evidence of loss presented during trial and in the presentence investigation report.

II. DISCUSSION

The District Court had jurisdiction pursuant to 18 U.S.C. § 3231. Appeal was timely. We have appellate jurisdiction pursuant to 28 U.S.C. § 1291 and 18 U.S.C. § 3742.

A. Sufficiency of the Indictment

As a preliminary matter, the parties quibble over whether the Vitillo defendants' challenge to the indictment is a "jurisdictional" or "pleading" challenge. Their "Motion to Dismiss the Indictment for Lack of Jurisdiction" was filed pursuant to FED.R.CRIM.P. 12(b)(3)(B), which states that, "at any time while the case is pending, the court may hear a claim that the indictment or information fails to invoke the court's jurisdiction or to state an offense." The Vitillo defendants alleged in the District Court, as they do on appeal, that the indictment fails to set forth facts establishing that they are an "agent" of a local government agency receiving federal funds as that term is defined in 18 U.S.C. § 666(d)(1). They do not assert that we lack jurisdiction to consider the appeal. They cannot, as "defects in an indictment do not deprive a court of its power to adjudicate a case." United States v. Cotton, 535 U.S. 625, 630, 122 S.Ct. 1781, 152 L.Ed.2d 860 (2002); see also Lamar v. United States, 240 U.S. 60, 64, 36 S.Ct. 255, 60 L.Ed. 526 (1916) (rejecting claim that "the court had no jurisdiction because the indictment does not charge a crime against the United States"). Rather, they argue that the indictment fails to plead sufficient facts to establish a violation of a federal offense. We conclude that Vitillo's challenge to the indictment is more properly characterized as a "pleading" challenge than one of "jurisdiction." Cf. United States v. Panarella, 277 F.3d 678, 682 n. 1 (3d Cir.2002) ("Indeed, we are unsure whether use of the term "jurisdictional" to refer to challenges to the sufficiency of an indictment is anything more than simply a label used to announce the conclusion that a particular defense survives a guilty plea."). Plenary review applies. United States v. Whited, 311 F.3d 259, 262 (3d Cir.2002).

Another threshold issue is whether we should consider the factual record developed at trial in assessing the sufficiency of the indictment. This issue arises because of the unusual procedural posture of this case—the Vitillo defendants challenged the sufficiency of the indictment long after the jury returned its guilty verdict. Because the sufficiency of the evidence is, not an issue on appeal (the Vitillo defendants waived their right to challenge the jury's verdict by failing to do so within the 7-day time limit under Rules 29, 33 or 34), the government argues that our review should be confined to the four corners of the indictment. In contrast, the Vitillo defendants argue that it "defies logic to deny the court an opportunity to consider the complete record before it," but they cite no authority for this proposition. Specifically, they argue that we should consider the Engineering Consultant Agreement executed by the Vitillo Group, Inc., and the RRAA...