United States v. Ferriero
| Decision Date | 15 January 2015 |
| Docket Number | Criminal Action No. 13-592 (ES) |
| Court | U.S. District Court — District of New Jersey |
| Parties | UNITED STATES OF AMERICA Plaintiff, v. JOSEPH A. FERRIERO Defendant. |
NOT FOR PUBLICATION
In a five-count indictment, Defendant Joseph A. Ferriero was charged with violating N.J.S.A. 2C:27-2(a) (the "New Jersey Bribery Statute"), the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1962(c), the Travel Act, 18 U.S.C. § 1952, and the mail and wire fraud statutes, 18 U.S.C. §§ 1341, 1343. Ferriero moves to dismiss Count One on the ground that the Indictment fails to allege a chargeable offense under the Racketeer Influenced and Corrupt Organizations Act. Ferriero also moves to dismiss Counts One, Two, and Three on the grounds that: (1) the New Jersey Bribery Statute is unconstitutionally overbroad, both facially and as applied to him, and (2) the New Jersey Bribery Statute is unconstitutionally vague as applied to him. For the reasons discussed below, the Court concludes that Ferriero's challenges lack merit. Therefore, the Court denies Ferriero's motion to dismiss Counts One, Two, and Three of the Indictment.
On September 11, 2013, a federal grand jury sitting in Newark, New Jersey returned a five-count indictment against Ferriero (the "Indictment"). (D.E. No. 1, Indictment ("Ind.") at 1). Count One of the Indictment alleges that Ferriero violated the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1962(c), by conducting the affairs of a political organization through a pattern of racketeering activity, including violating the New Jersey Bribery Statute. (Ind., Count One ¶ 77). Count Two alleges that Ferriero engaged in a conspiracy to violate the Travel Act and to commit mail and wire fraud. (Id., Count Two ¶¶ 2(a)-(b)). Count Three alleges that Ferriero violated the Travel Act. (Id., Count Three ¶ 2). Finally, Counts Four and Five respectively allege that Ferriero committed mail and wire fraud in violation of 18 U.S.C. §§ 1341, 1343. (Id., Counts Four-Five ¶ 4).
Ferriero was an attorney licensed to practice law in the state of New Jersey during the time frame alleged in the Indictment—December 2001 to October 2008. (Id., Count One ¶ 1A). In 1998, Ferriero was elected Chairman of the Bergen County Democratic Organization (the "BCDO"). (Id.). The position was unpaid, and Ferriero continued to practice law as a partner in various New Jersey law firms. ( ) at 1). He was re-elected to this position every two years until he resigned in January 2009. (Ind., Count One ¶ 1A). Ferriero maintains that, during all times relevant to the Indictment, he was a consultant, businessman, lawyer, and volunteer political official. (Def. Mov. Br. at 1).
The BCDO is a county committee of the Democratic political party.2 (Ind., Count One ¶ 1B). Its responsibilities include selecting candidates for federal, state, and local election ballots, coordinating fundraising and political campaigns, and determining the Democratic party's position on various issues. (Id.). As Chairman of the BCDO, Ferriero "provided opinions and recommendations to BCDO members and was in a position to influence, and did influence, the actions of BCDO members." (Id.).
From December 2001 to October 2008, Ferriero engaged in illegal activity through three schemes: (1) the Governmental Grants Consulting, LLC ("GGC") Kickback Scheme; (2) the Retail & Entertainment Project Bribery and Extortion Scheme; and (3) the SJC Consulting, LLC ("SJC") Bribery Scheme. (Id. at 8, 22, 37).
In December 2001, Ferriero decided to create GGC to capitalize on his access to and influence with democratic officials. (Id. ¶ 7). GGC assisted municipalities with obtaining grants and funding in exchange for a percentage of the awards. (Id.). Ferriero kept his ownership of the company concealed. (Id.). Around the same time that he developed the idea of GGC, Ferriero used his influence and authority as Chairman of the BCDO to have Dennis J. Oury appointed as Borough Attorney for the Borough of Bergenfield, New Jersey. (Id. ¶ 6). Once Oury was appointed as Borough Attorney, Ferriero gave Oury a concealed ownership interest in GGC, which entitled Oury to receive a share of GGC's profits. (Id. ¶ 8). Ferriero also offered a similar ownership interest in GGC to a Republican mayor in Bergen County. (Id. ¶ 9).
Based on Oury's advice, the Bergenfield Mayor and Council appointed GGC as the Borough's municipal grantsman.3 (Id. ¶ 14). Oury did not disclose his financial interest in GGC. (Id.). To maintain their concealed ownership in the company, and for the purposes of signing official documents, Ferriero, Oury, and the Bergen County mayor had an individual with a grant writing business in Bergen County sign official documents as GCC's President. (Id. ¶ 17). They also had Ferriero's secretary sign official documents as GGC's corporate secretary. (Id.).
In accordance with a monthly retainer agreement, Bergenfield paid GGC a total of $6,000 for the year of 2002. (Id. ¶¶ 18, 22). Furthermore, based on GGC's successful grant writing services, Bergenfield paid GGC a fee of $128,625. (Id. ¶ 28). The check for $128,625 was deposited into GGC's bank account and dispersed between Ferriero, Oury, and the other individuals involved in the GGC scheme. (Id. ¶¶ 30-31).
With respect to the Retail & Entertainment Project Bribery and Extortion Scheme, the Indictment alleges that Ferriero committed racketeering acts involving a development project at the New Jersey Meadowlands. The New Jersey Sports & Exposition Authority (the "NJSEA") was seeking redevelopment proposals for its Meadowlands site (the "NJSEA site"). (Id. ¶ 42). A Virginia-based Real Estate Investment Trust (the "Virginia REIT") had an interest in redeveloping the NJSEA site. (Id. ¶ 35). Knowing that public support would be an important factor, the Virginia REIT contacted Ferriero for his assistance as BCDO Chairman to garner public support from BCDO members, as well as to prevent him from opposing the project with those over whom he had influence. (Id. ¶¶ 34, 36).
At a meeting, Ferriero told an attorney acting on behalf of the Virginia REIT that Ferriero's law firm had been asked to represent one of the Virginia REIT's competitors and that the competitor intended to use "scorched earth" tactics to defeat the Virginia REIT's proposal for the NJSEA site. (Id. ¶ 43). However, Ferriero stated that he would work with the Virginia REIT, rather than the competitor, for a monthly fee of $35,000. (Id.). The Virginia REIT agreed to pay this fee in exchange for: (1) Ferriero's agreement not to publicly oppose, or cause other members of the BCDO to oppose, its proposal for the NJSEA site, and (2) Ferriero's assistance in obtaining endorsements, public support, and other official action regarding the proposal. (Id. ¶ 44).
In furtherance of this agreement, Ferriero used BCDO consultants to prepare talking points and draft press releases that benefited the Virginia REIT's proposal ideas. (Id. ¶ 47). Additionally, in his capacity as Chairman, Ferriero caused Bergen County officials to hold a press conference to discuss which NJSEA proposal ideas they would support—ideas that Ferriero had already conceived and discussed with the Virginia REIT prior to the press conference. (Id. ¶ 48). Ferriero also exercised his influence over a New Jersey State Senator who had introduced legislation that would hinder the Virginia REIT's proposal. (Id. ¶ 61). After speaking with Ferriero, the Senator withdrew the legislation. (Id.). The Virginia REIT was ultimately selected to develop the NJSEA site. (Id. ¶ 62).
From September 2002 until September 2006, the Virginia REIT paid a $35,000 monthly fee to Ferriero's company, Concept Realization, LLC.4 (Id. ¶¶ 50-55). However, these payments were routed through a New Jersey law firm. Essentially, the Virginia REIT would pay a New Jersey law firm the $35,000 monthly fee, and the law firm would then forward the fee to ConceptRealization. (Id. ¶ 55). During this time period, the Virginia REIT paid Ferriero approximately $1.7 million. (Id.).
The SJC Bribery Scheme involves five individual racketeering acts. According to the Indictment, in 2007, a software developer sought to obtain contracts between his companies, Xquizit and C3, and various New Jersey municipalities. (Id. ¶ 68). In August 2007, Ferriero and the software developer agreed that Ferriero would recommend and provide a favorable opinion of the developer, Xquizit, C3, and the services provided by Xquizit and C3 to government officials in Bergen County over whom Ferriero had influence. (Id.). In exchange for Ferriero's exercise of influence, the software developer paid Ferriero kickbacks, which corresponded to a percentage of the fees that the software developer received through contracts with the municipalities. (Id.).
In connection with this plan, Ferriero and the software developer incorporated SJC Consulting, LLC in Las Vegas, Nevada. (Id. ¶ 70). From August 2007 to July 2008, Ferriero used his official position as BCDO Chairman to recommend the software developer, the developer's companies Xquizit and C3, and the services provided by Xquizit and C3 to BCDO members. (Id. ¶ 73). Ferriero provided these recommendations to five municipalities without disclosing his personal financial interest. (Id. ¶¶ 73A-G). Four municipalities ultimately retained C3. (Id. ¶¶ 73B-C, 73E-F).
On at least one occasion, Ferriero recommended the software developer to a municipality at a BCDO-sponsored annual gathering of public officials. (Id. ¶ 73E). Furthermore, when one municipality failed to retain the software developer's services, Ferriero confronted the municipality's official at a...
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