United States v. Garrido

CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)
Citation713 F.3d 985
Docket NumberNos. 06–50717,06–50718.,s. 06–50717
PartiesUNITED STATES of America, Plaintiff–Appellee, v. George GARRIDO, aka Jorge Arturo Garrido, Defendant–Appellant. United States of America, Plaintiff–Appellee, v. Albert T. Robles, aka Albert Tzareih Robles; Alberto Del Tzareih, Defendant–Appellant.
Decision Date15 April 2013

OPINION TEXT STARTS HERE

Limitation Recognized

18 U.S.C.A. § 1346

Thomas Robert Kiley, I, Cosgrove, Eisenberg & Kiley, P.C., Boston, MA, for DefendantsAppellants.

Elana Shavit Artson and Curtis A. Kin, Assistant United States Attorneys, Los Angeles, CA, for PlaintiffAppellee.

Appeal from the United States District Court for the Central District of California, Stephen V. Wilson, District Judge, Presiding. D.C. Nos. CR–04–01594–SVW–4, D.C. No. CR–04–01594–SVW–1.

Before: HARRY PREGERSON, JOHN T. NOONAN, and RICHARD A. PAEZ, Circuit Judges.

OPINION

PREGERSON, Circuit Judge:

Albert T. Robles (Robles) appeals his convictions for honest services mail and wire fraud (18 U.S.C. §§ 1341, 1343, 1346), money laundering (18 U.S.C. § 1957), and bribery (18 U.S.C. § 666). George Garrido (Garrido) appeals his convictions for honest services mail fraud (18 U.S.C. §§ 1341, 1346). We have jurisdiction under 28 U.S.C. § 1291.

After Robles and Garrido were convicted and sentenced, and while their cases were on appeal, the Supreme Court in Skilling v. United States, –––U.S. ––––, 130 S.Ct. 2896, 177 L.Ed.2d 619 (2010), narrowed the scope of 18 U.S.C. § 1346 to include only honest services fraud based on bribery and kickback schemes. Id. at 2933. The Court prohibited prosecutions (such as those in this case) based on a failure to disclose a conflict of interest as unconstitutionally vague. Id. at 2932. In light of Skilling, we reverse Robles's and Garrido's honest services fraud convictions and reverse Robles's money laundering convictions. We affirm Robles's bribery convictions under 18 U.S.C. § 666 because such convictions do not require the defendant to be engaged in an official act. Accordingly, we remand for further proceedings consistent with this opinion.

I.

Following a jury trial, Robles was convicted of twenty-one counts of honest services mail and wire fraud (Counts 1–11, 13–17, 22–25, 27); four counts of money laundering (Counts 18–21); and five counts of bribery (Counts 33–37). Garrido was convicted of five counts of honest services mail fraud (22–25, 27).

Robles's and Garrido's convictions arose out of a series of events that took place while Robles was Treasurer of the City of South Gate, California. Robles was elected Treasurer in 1997 and reelected in 2001. He had previously served as Mayor and as an elected member of the South Gate City Council. Garrido was a local businessman and friend of Robles's. Robles and Garrido were implicated in two schemes to award city contracts to particular companies while reaping substantial benefits for themselves.

A. Sewer Repair and Housing Project Schemes (Counts 1–21)

The first scheme, charged against Robles alone, involved two corporate entities: the Southland Companies, comprised of several housing development corporations, and PSOMAS, an engineering consulting firm. The Southland Companies were developing housing projects in South Gate, and PSOMAS was interested in sewer repair contracts in South Gate.

The indictment alleged that Robles used his influence as Treasurer to induce the Southland Companies and PSOMAS into hiring Robles's friend Edward Espinoza (“Espinoza”) as a consultant; directed the city council to award contracts to the two companies; and concealed or failed to disclose that portions of the city's money paid to those companies was funneled to Robles and to Robles's friends and family.1

Counts 1 through 11 alleged that checks were mailed from the City of South Gate to PSOMAS and from PSOMAS to EM Ventures, a company that Espinoza owned and used to receive money from individuals and entities who did business with the City of South Gate. Counts 13 through 15 and 17 charged that wire transfers were made from three Southland housing development projects to Espinoza, EM Ventures, and ETE & Associates, a financial advisory firm that Espinoza owned and used to receive money from individuals and entities who did business with the City of South Gate.

Count 16 specifically alleged that Robles failed to disclose in a 2002 California Form 700, Statement of Economic Interests, that he received from Espinoza a $65,000 platinum membership in the Anthony Robbins Foundation, a self-help motivational organization, and that Robles caused that Form 700 “to be transmitted in interstate commerce by wire communications” by faxing it to Sacramento.2

Counts 18 through 21 charged Robles under 18 U.S.C. § 1957 with money laundering. Those counts alleged that Robles used the money gained from the honest services fraud to purchase property in Mexico and for a platinum membership in the Anthony Robbins Foundation.

B. Waste–Hauling Contract Scheme (Counts 22–37)

The second scheme, charged against both Robles and Garrido, alleged that Robles, while he was Treasurer, caused the City of South Gate to award improperly a waste-hauling contract to Michael Klistoff's (“Klistoff”) waste company, Klistoff & Sons.

Garrido and Klistoff had been friends for several years before Garrido introduced Klistoff to Robles. In 1999, at Robles's request, Klistoff began making campaign contributions and gifts 3 to Robles and Robles's general purpose committee, Citizens for Good Government.4 Klistoff agreed to make these contributions because he knew Robles had influence in South Gate and Klistoff was hoping to gain access to future waste-hauling contracts.

About ten days before the March 2001 election, Robles asked the then-current waste-hauling company for South Gate, Waste Management, whose contract with the city was set to expire in eight months, to pay $15,000 worth of printing bills that Robles was about to incur. Waste Management declined to pay the bills because it was too late to report them as a campaign contribution. After Robles was reelected Treasurer, Robles told Waste Management that they were not his friends and that, as far as Robles was concerned, Waste Management was “out of town.” Robles told Waste Management to go away quietly or he would hurt the company in other cities.

In 2001, Klistoff told Garrido that he wanted Klistoff & Sons to be awarded South Gate's ten-year waste-hauling contract, worth about $48 million. Garrido agreed to help Klistoff get the contract on the conditions that: (1) Klistoff hired Garrido as a consultant for $350,000 per year for the duration of the ten-year waste-hauling contract, and (2) Garrido's recycling business would be cut in on the contract if it was awarded to Klistoff & Sons.

Robles met with Klistoff before South Gate sent out its request for proposals for the waste-hauling contract. Robles showed Klistoff the draft request for proposals, which called for one company to perform residential services and three companies to perform commercial waste-hauling services. Klistoff suggested to Robles that one company could perform both waste-hauling services. The final request for proposals incorporated Klistoff's suggestion and called for a single company to perform both the residential and commercial services. Klistoff & Sons submitted its bid for the waste-hauling contract in June 2001.

In July 2001, Robles assigned his friend, Louis Moret, to work on the city's waste-hauling contract as the facilitator for the bidding process. Moret presented the staff recommendation for the contract to the city council and attended the meeting when the city council voted to award the contract. Robles told Moret that he had a horse in the race” and that horse was Klistoff & Sons. Robles was concerned about Klistoff's ability to make a persuasive presentation to the contract selection committee, so he asked Moret to recommend a consultant to help Klistoff & Sons prepare its oral presentation in support of its bid. Moret recommended Ray Garubo (“Garubo”) as a consultant. Shortly thereafter, Garrido contacted Klistoff and advised him to hire Garubo as a consultant to help Klistoff & Sons make an effective and convincing presentation to city officials. Klistoff retained Garubo as a consultant, but Garrido paid Garubo's consulting fees.5

Klistoff received information that no competing company was given. Robles showed Klistoff the other competing companies' bids, even though the bids were supposed to be confidential. Moreover, at Robles's request, Moret provided Robles and Garubo with a copy of the confidential questions that the selection committee would ask the bidders to answer during oral presentations. None of the other bidders were provided with these confidential questions in advance of their oral presentations.

After the oral presentations, the selection committee voted to recommend that South Gate engage in exclusive negotiations with Klistoff & Sons. The vote was in part based on Klistoff's oral presentation. The city council approved the selection committee's recommendation and ultimately awarded the $48 million waste-hauling contract to Klistoff & Sons.

Counts 22 through 25 and 27 charged Robles and Garrido with honest services mail fraud in connection with the waste-hauling contract scheme. Count 22 is based on California Form 700, Statement of Economic Interests, for calendar year 2000 in which Robles failed to disclose the payments received from Klistoff for a computer, software, and a telephone switchboard system. See supra note 3. The Form 700 was mailed. Counts 23 through 25 are based on three checks from Garrido's business, GWS Nursery and Supplies, Inc., received by Garubo for assisting Klistoff & Sons in its efforts to obtain the waste-hauling contract with South Gate.

Count 27 refers to a California Form 700, Statement of Economic Interests, for calendar year 2001, in which Robles failed...

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