United States v. Renzi
| Decision Date | 09 October 2014 |
| Docket Number | 13–10597.,Nos. 13–10588,s. 13–10588 |
| Citation | 769 F.3d 731 |
| Parties | UNITED STATES of America, Plaintiff–Appellee, v. Richard G. RENZI, Defendant–Appellant. United States of America, Plaintiff–Appellee, v. James W. Sandlin, Defendant–Appellant. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Dan Himmelfarb (argued), Kelly B. Kramer, Stephen Lilley, Joseph P. Minta, Mayer Brown LLP, Washington, D.C.; Chris S. Niewoehner, Steptoe & Johnson LLP, Washington, D.C., for Defendant–Appellant Richard G. Renzi.
Gary Udashen (argued), Sorrels, Udashen & Anton, Dallas, TX, for Defendant–Appellant James Sandlin.
David A. O'Neil, Acting Assistant Attorney General; David V. Harbach, II, Deputy Chief, Public Integrity Section; David M. Bitkower, Deputy Assistant Attorney General; Stephan E. Oestreicher, Jr. (argued), Attorney, Appellate Section, United States Department of Justice, Criminal Division, Washington, D.C.; John S. Leonardo, United States Attorney; Gary Restaino, Assistant United States Attorney, District of Arizona, for Plaintiff–Appellee United States of America.
Kerry W. Kircher (argued), General Counsel; William Pittard, Deputy General Counsel; Todd B. Tatelman, Mary Beth Walker, Eleni M. Roumel, and Isaac B. Rosenberg, Assistant Counsel, Office of General Counsel, United States House of Representatives, Washington, D.C., for Amicus Curiae Bipartisan Legal Advisory Group of the United States House of Representatives.
Appeal from the United States District Court for the District of Arizona, David C. Bury, District Judge, Presiding. D.C. Nos. 4:08–cr–00212–DCB–BPV–1, 4:08–cr–00212–DCB–BPV–2.
Before: RICHARD C. TALLMAN, CONSUELO M. CALLAHAN, and SANDRA S. IKUTA, Circuit Judges.
Congressmen may write the law, but they are not above the law. Former Arizona Congressman Richard Renzi learned this lesson the hard way when he was convicted by jury on charges of conspiracy, honest-services fraud, extortion, money laundering, making false statements to insurance regulators, and racketeering. Now Renzi and codefendant James Sandlin appeal their convictions and sentences, asserting that the evidence was insufficient to support the verdict. Renzi further argues that his convictions were predicated on serial violations of his constitutional rights, including violations of his Congressional Speech or Debate Clause privilege. We reject their arguments and affirm both convictions and sentences.
The United States brought insurance fraud charges against Renzi, public corruption charges against Renzi and Sandlin, and a racketeering charge against Renzi. The evidence showed that Renzi, who owned and operated an insurance agency, misappropriated clients' insurance premiums to fund his congressional campaign, and lied to insurance regulators and clients to cover his tracks.1 The public corruption charges were based on Renzi and Sandlin's involvement in a conspiracy to extort private businesses to purchase land owned by Sandlin in exchange for Renzi's promise to support favorable federal land exchange legislation. Finally, the evidence established that Renzi used his insurance business as an enterprise to conduct a pattern of racketeering activity by diverting clients' insurance premiums for his personal use, facilitating an extortionate land transfer, and laundering its proceeds.
In the early 2000s, Renzi owned and operated Renzi & Company (R & C),2 an insurance agency specializing in obtaining insurance coverage for non-profit organizations and crisis pregnancy centers.3 R & C obtained group insurance coverage for its clients through brokers who worked on behalf of insurance carriers. R & C used two primary brokers: (1) North Island Facilities, which secured insurance coverage through Safeco Insurance Company, and (2) Jimcor Agency, which secured insurance coverage through both United States Liability Insurance Company and Royal Surplus Lines Insurance Company. R & C collected yearly premiums from its clients and, after keeping a small percentage as a profit, remitted those premiums to the broker. After taking their commission, the broker (either North Island or Jimcor) remitted the remainder of the premium to the insurer—either Safeco, United States Liability, or Royal Surplus.
On December 10, 2001, Renzi publicly announced his candidacy for a seat in the United States House of Representatives serving Arizona's First Congressional District. The very next day, Renzi began diverting cash from R & C to fund his congressional campaign. Between December 2001 and March 2002, Renzi transferred over $400,000 from R & C to his “Rick Renzi for Congress” account. To avoid campaign disclosure regulations, Renzi claimed the money as a personal loan to the Renzi campaign. But most of the diverted funds were directly traceable to insurance premiums R & C had collected from clients.4
In April 2002, North Island sent R & C an invoice for $236,655.90 to bind annual Safeco coverage for R & C's clients. R & C had already collected the insurance premiums from its clients. But it had funneled those premiums to Renzi's congressional campaign. Because R & C no longer had the money, Renzi did not allow Aly Gamble, R & C's Senior Underwriter, to pay North Island.5 Two months later, Safeco warned R & C that it planned to cancel R & C's policies for nonpayment. Another month passed with no response from R & C.
In July 2002, Safeco began sending cancellation notices to R & C's clients. With cancellation notices in hand, worried clients began calling R & C. Gamble fielded these calls. To respond to client concerns, Renzi dictated a letter to Gamble, which she sent to clients later that month. The letter stated that, because “spiritual counseling was no longer covered” under Safeco's policy, R & C had “replaced” Safeco with “the Jimcor Insurance Company.” The letter promised that clients would experience “no lapse in coverage.” Attached to each letter was a new certificate of liability insurance ostensibly from “Jimcor Insurance Company.” The certificate listed a policy number, policy limits, and effective policy dates.
None of this was true: Jimcor was not an insurance company,6 and the new certificates were entirely fabricated. Gamble testified that at Renzi's request, she inserted random policy numbers, cut and pasted Safeco's policy limits, and chose Safeco's August 2002 cancellation date as the effective date of the new fake policy. Then, at Renzi's direction, Gamble sent out at least 74 of these letters and phony insurance certificates, but only to clients who had called R & C to voice concern.
North Island continued to formally demand payment of premiums from R & C. In October 2002, with no payments in hand and no response from R & C, North Island notified state insurance regulators in Virginia and Florida of R & C's nonpayment. Clients began receiving calls from these state insurance regulators.
In early November, R & C sent another letter to its clients, signed by Gamble on behalf of R & C's Interim President Andrew Beardall.7 The letter again reassured clients that they were “properly insured” with “no lapses in coverage.” These statements were also false—at that time clients had no insurance coverage at all. Instead, between August and November 2002, R & C adjusted all insurance claims internally, paying clients directly for any outstanding claims.
On November 5, 2002, Renzi was elected to the United States House of Representatives. A few weeks later, Renzi received a $230,000 gift from his father. That same day, R & C paid the full amount due to North Island: $236,655.90. After receiving full payment, Safeco decided to retroactively reinstate all of R & C's policies.
But R & C's troubles were just beginning. In early 2003, R & C received a letter from the Virginia State Corporate Commission Bureau of Insurance. In the letter, the Bureau of Insurance asked R & C to explain why it had collected client premiums but failed to remit them to North Island, and why it had issued certificates of insurance showing that coverage had been placed through Jimcor, which is not an insurance company. In March 2003, Renzi responded by letter on behalf of R & C. Renzi's letter attributed the withheld payments to an ongoing coverage dispute with Safeco, and claimed that “a member of the office staff” had “mistakenly typed ‘Jimcor’ ” when generating the certificates. The letter characterized the mistake as an “inadvertent computer slip.”
In early spring, R & C received another letter—this time, from the Florida Department of Insurance—inquiring as to why premiums collected by R & C had not been remitted to Safeco. R & C responded in a letter signed by Beardall. Again, R & C blamed the faulty certificates on a “computer error by a member of the office staff.” R & C stated that the Safeco insurance policies were “in force for the whole year without any lapses.” At trial, Gamble testified that there was no “inadvertent computer slip.” She confirmed that Renzi himself had instructed her to create the fake certificates, insert the false coverage information, and send the certificates to complaining clients.
In May 2003, R & C surrendered its Virginia insurance license to avert penalties. R & C chose not to renew its Florida license. As a result, the Florida Department of Insurance took no further action against R & C.
The public corruption counts arose out of Renzi and Sandlin's long-time friendship and business relationship.8 From 2001 to 2003, Renzi and Sandlin were partners in a real estate development company, Fountain Realty and Development, Inc., based in Kingman, Arizona. In February 2003, shortly after his election to Congress, Renzi sold Sandlin his share of the company. Sandlin paid Renzi in part with an $800,000 promissory note, payable in annual installments through September 2007 at five percent interest.
During this time, Sandlin also owned a 640–acre parcel (the “Sandlin tract”) in southeastern Arizona, near the San Pedro River and...
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