U.S.A. v. Zwick

• Decision Date: 15 July 1999
• Docket Number: No. 98-3641,98-3641
• Citation: 199 F.3d 672
• Parties: (3rd Cir. 1999) UNITED STATES OF AMERICA, v. JAMES J. ZWICK, Appellant Argued:
• Court: U.S. Court of Appeals — Third Circuit

Page 672

199 F.3d 672 (3rd Cir. 1999)

UNITED STATES OF AMERICA, v. JAMES J. ZWICK, Appellant

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

No. 98-3641

Argued: July 15, 1999

Filed December 15, 1999

On Appeal from the United States District Court for the Western District of Pennsylvania (Criminal Action No. 97-cr-00182-1) (District Judge: The Honorable William L. Standish) [Copyrighted Material Omitted]

[Copyrighted Material Omitted]

SHELLEY STARK, Esquire, [ARGUED], Office of Federal Public Defender 960 Penn Avenue, 415 Convention Tower, Pittsburgh, PA 15222, Counsel for Appellant

ROBERT S. CESSAR, ESQUIRE, [ARGUED], Office of U.S. Attorney, 633 U.S. Post Office & Courthouse, Pittsburgh, PA 15219, Counsel for Appellee

Before: ROTH, RENDELL, Circuit Judges, and POLLAK,^* District Judge

OPINION OF THE COURT

RENDELL, Circuit Judge.

In this appeal, we are asked to construe 18 U.S.C. S 666, a criminal provision entitled "Theft or bribery concerning programs receiving Federal funds" ("the Act" or "the statute"). Appellant James J. Zwick claims that the District Court misinterpreted the statute when it upheld his three- count conviction for bribery under S 666(a)(1)(B) without proof of a connection between the offense conduct and federal funds or programming. We conclude that the District Court erred in interpreting the statute in this respect and will therefore remand for further proceedings consistent with this opinion. Zwick also challenges the District Court's failure to reduce his offense level by an additional point for acceptance of responsibility pursuant to U.S.S.G. S 3E1.1(b). Because we find that the District Court erred in its application of this Guideline provision, we will vacate this aspect of the sentencing order and direct the District Court on remand to award the additional one-point reduction if it determines that Zwick timely provided complete information to the government or timely notified the government of his intent to plead guilty to enable the government and court to conserve their resources.¹

I.

Appellant James J. Zwick was an elected member of the Ross Township Board of Commissioners, the governing body of Ross Township, Pennsylvania. Zwick and his fellow commissioners made policy decisions for the Township, including fixing salary levels, executing contracts, authorizing bids, and adopting budgets. In November of 1997, the government accused Zwick of abusing his position to obtain illegal benefits and filed a five-count indictment charging him with three counts of theft or bribery concerning federal programs under 18 U.S.C. S 666, one count of mail fraud under 18 U.S.C. SS 2 & 1341, and one count of bank fraud under 18 U.S.C. SS 2 & 1344. The District Court had jurisdiction over Zwick's case pursuant to 18 U.S.C. S 3231.

Initial efforts at negotiating a guilty plea failed when the government declined to accept a conditional plea, which would have preserved Zwick's legal challenge to the application of S 666 when there is no connection between a defendant's conduct and federal funds or programming. After declining to accept the plea, the government filed a superseding indictment, which contained all of the charges in the original indictment, and added another count of theft or bribery under S 666, another count of bank fraud, and three more counts of mail fraud. Again, Zwick was willing to plead guilty to the bank fraud and mail fraud counts, but continued to seek a conditional guilty plea on the S 666 counts. During a status conference on January 27, 1998, Zwick informed the District Court of his intention to plead guilty to the fraud counts, and the District Court scheduled the plea hearing for February 2, 1998. Further plea negotiations were derailed, however, when articles appeared in the Pittsburgh Post Gazette and North Hills News Record on January 28, 1998 and January 29, 1998, declaring that Zwick would plead guilty to the fraud charges. Zwick filed a motion with the District Court to dismiss the indictment based on prosecutorial misconduct, alleging that, by providing information for the articles, the government had violated its obligation to refrain from making extrajudicial statements regarding the possibility of a guilty plea. The District Court denied Zwick's motion. Zwick ultimately entered a guilty plea to the fraud counts on March 9, 1998.

The case against Zwick on the S 666 charges proceeded to trial on March 10, 1998, after a brief continuance so that Zwick could enter treatment for his gambling addiction. Although Zwick waived his right to a jury trial and requested a bench trial, the government opposed this request, so the case was tried to a jury. Zwick was convicted on counts one, two, and three of the four S 666 charges.

Because Zwick makes several challenges to the sufficiency of the evidence to support his conviction under S 666, we will review the relevant facts adduced at trial regarding the alleged bribes. In count one, the government alleged that Zwick solicited a bribe from Christopher Kaclik, the owner and developer of the Shannopin Square II office building located in Ohio Township. Kaclik first became associated with Zwick in 1994, when he applied for sewer access for the predecessor to Shannopin Square II, Shannopin Square I. At that time, Kaclik testified that Zwick told him "anything you need to get done in the Township of Ross, I can help you out." In May or June of 1996, during the building of Shannopin Square II, Zwick met with Kaclik at the development site and offered to secure the necessary votes for approval of the sewer taps in exchange for a donation to the "Men's Summer League for Ross Township," a basketball league run by Zwick. Kaclik wrote a check for $5,000, made out to "James Zwick," with a notation reading "Men's Summer League 1996 Basketball." At Zwick's suggestion, Kaclik also provided Zwick with a blank check for $7,500, which Zwick falsely represented he would put toward the $17,500 required to reserve the sewer taps. When Kaclik discovered that Zwick had personally endorsed and cashed the checks, he asked that Zwick return the money. After repeated phone calls to Zwick, Kaclik received $2,500 from Zwick.

Count two involved Zwick's dealings with the Fosnights, who had obtained an option on property in Zwick's ward in Ross Township to build and operate an assisted living facility there. To complete their project, the Fosnights were required to obtain approval from the Ross Township Board of Commissioners for various permits, including a conditional use permit and site plan approval. On September 9, 1996, after the Township Planning Commission had already recommended approval of the conditional use permit, the Board of Commissioners voted to table the permit for further investigation. After that meeting, Zwick contacted Tim Fosnight and set up a meeting with him and his brother Aaron at the project site. Zwick offered to help them obtain the required permits in exchange for a $15,000 donation to construct a playground on the grounds of his "pet" project, North Hills Affordable Housing ("NHAH"). Zwick explained that he could require the Fosnights to pay for a new traffic light and traffic studies, which could involve significant costs of up to $100,000 and lead to considerable delay, but he would not do so if such a "donation" was made.

The Fosnights made four payments to Zwick totaling $10,500. Zwick directed them to make out the first two checks to "CSC"² and "Cash" totaling $4,500. Zwick cashed both, and the funds were never received by NHAH. The next two checks, totaling $6,000, were made out to NHAH. Nonetheless, upon receipt of the funds, Judith Eakin, Director of NHAH, wrote Zwick two checks for $6,000 as payment for the telephone system Zwick was installing for NHAH, the project Zwick told the Fosnights their contribution would fund. Two months later, Zwick informed Eakin that more money was needed to purchase equipment that would complete the telephone system. When Eakin told Zwick that NHAH had no additional funds available for the telephone system, as no additional funds were in hand, Zwick assured Eakin that a further donation would be forthcoming from the Fosnights, and that, if the anticipated donation were not to be received in timely fashion, Zwick would personally guarantee the sum in question. In reliance on Zwick's personal guarantee, Eakin was authorized by her board president to advance Zwick the money required to purchase the equipment. Accordingly, in the ensuing two weeks, Eakin issued Zwick two checks totaling $7,440 made out to "Jim Zwick" as payment for the phone system. Shortly thereafter, Eakin agreed to issue Zwick two "replacement" checks for $7,740 when Zwick informed her that his accountant said the earlier checks should have been issued to his company, Jim Zwick Communications Systems, and not to him personally. Although Zwick provided Eakin with a check for $7,740 to replace the check issued to him personally, when NHAH attempted to cash it, it was returned from the bank due to an irregular signature. NHAH never received these funds.

Zwick provided the Fosnights with a traffic study from his office so they would not have to finance their own, and the Fosnights did not make a contribution to the costs of constructing a traffic light. Zwick voted for the approval of the Fosnights' conditional use permit. He also moved to approve the Fosnights' final site permit but abstained from voting on it, explaining that he might put a bid on the telephone work for the project and did not want to create the appearance of a conflict of interest.

Count three charged that Zwick had solicited bribes from Justin Ruff, the owner of Admiral Lawn Service, when he asked Ruff for "performance bonds" in exchange for ensuring that Ruff was awarded landscaping contracts with Ross Township. Although bonds were required for contracts over $10,000, Ross Township commissioners were not authorized to...