US v. Loftus, CR 83-00186.

Citation796 F. Supp. 815
Decision Date13 May 1992
Docket NumberNo. CR 83-00186.,CR 83-00186.
PartiesUNITED STATES of America, Respondent, v. Robert A. LOFTUS, Petitioner.
CourtUnited States District Courts. 3th Circuit. United States District Court of Middle District of Pennsylvania

Albert R. Murray, Jr., Asst. U.S. Atty., Lorna Graham, Scranton, Pa., for U.S.

Charles Gelso, Wilkes-Barre, Pa., for Robert A. Loftus.

MEMORANDUM

NEALON, District Judge.

In McNally v. United States, 483 U.S. 350, 107 S.Ct. 2875, 97 L.Ed.2d 292 (1987), the Supreme Court rejected the application of the mail fraud statute to schemes designed to defraud citizens of their intangible right to good and honest government. Id., 483 U.S. at 360, 107 S.Ct. at 2881-82 (Court limited § 1341 "in scope to the protection of property rights.") The petitioner Robert Loftus, in light of McNally, seeks to vacate his December 6, 1983 conviction by writ of coram nobis. In addition, Loftus requests the return of the $10,000 fine paid. The one count indictment, to which Loftus pleaded guilty, alleged that he willfully and knowingly conspired with one Sadie Cosgrove to sign a voter's name to an absentee ballot and then

used the mails of the United States for the purpose of executing a scheme and artifice to defraud the Luzerne County Board of Elections and the voters of Luzerne County by means of false and fraudulent pretenses and representations, contained on official absentee balloting materials cast in the May 19, 1981 Primary Election. In violation of 18 U.S.C. § 1341.

Indictment (filed November 1, 1983). An examination of the indictment demonstrated that it was not susceptible to a finding that an economic harm would result from Loftus' conduct. See United States v. Asher, 854 F.2d 1483, 1494 (3d Cir.1988) ("Essentially, ... where rights are involved whose violation would lead to no concrete economic harm, and where those rights are the only rights involved in the case, McNally's proscriptions would prevent upholding conviction on appeal."). Therefore, by Memorandum and Order dated January 9, 1992, this court determined that McNally rendered Loftus' conviction invalid inasmuch as "errors which result in a person's charge and conviction for something not a crime are fundamental," United States v. Stoneman, 870 F.2d 102, 105 (3d Cir.1989), and that, under the circumstances then existing, the petitioner's failure to appeal from his 1983 judgment of conviction for mail fraud did not bar coram nobis relief. However, notwithstanding the determination that Loftus' conviction was invalid, in order to obtain complete relief under existing law, the petitioner must establish that he continues to suffer collateral consequences as a result of the conviction. Accordingly, a final decision on the petition was held in abeyance pending supplemental submissions on this issue.

I.

Loftus filed three supplemental submissions. He enumerates several consequences attached to his mail fraud conviction, viz., that he suffers under the stigma of a felony fraud conviction; that he paid a $10,000 fine; that he is ineligible for a position in city government; that he cannot possess a firearm; that he will be subjected to an enhanced sentence if convicted of another offense; that he can be impeached as a witness in a criminal or civil trial; that he cannot serve as a director or officer of a federally insured bank; and, that he cannot obtain licenses to engage in his former occupation as an insurance agent and broker. In an affidavit accompanying his first supplemental brief, Loftus declares, in pertinent part:

4. Solely as a result of my ... conviction for mail fraud, on June 3, 1985, both my insurance agent and my broker licenses were revoked and I was ordered to pay a civil penalty of $1,000.00 to the Commonwealth of Pennsylvania....
5. At the time of my ... conviction for mail fraud, I was mayor of the City of Pittston ... as well as a director and senior vice president of the First Bank of Greater Pittston and as a result of my conviction, I was forced to resign from those positions. My business as an insurance agent and broker and my employment as the mayor of the City of Pittston and as a director and vice president of the bank formed my sole source of earned income all of which I lost as a result of the ... conviction.
6. Because of the ... conviction, I am no longer eligible to run for public office and a convicted felon cannot serve as an officer or director of a federally insured bank. However, at the present time, because of my age, I would not be eligible to serve as an officer or director of the bank nor do I have any desire to seek public office.
7. Because of my status as a convicted felon, I have not applied to the Insurance Commissioner of the Commonwealth of Pennsylvania for reinstatement of my insurance agent and broker licenses. I believe and therefore aver that as long as I remained a convicted felon the Insurance Commissioner ... would deny any application for reinstatement of said licenses.
8. If my petition is granted, I will reapply to the Insurance Commissioner ... for reinstatement of my insurance agent and broker licenses and I believe and therefore aver that if my conviction is removed, my licenses will be reinstated.
9. As is apparent from the Order and Adjudication of Insurance Commissioner ..., my licenses were revoked because of the fact of my conviction for mail fraud and not because of the conduct underlying that conviction.

Document 24 at ¶ 4-9.1

The petitioner points out that there is a dispute among the circuits with respect to what constitutes collateral consequences sufficient to warrant coram nobis relief and that the Third Circuit has not directly addressed this issue. The Ninth Circuit, in essence, presumes that "collateral consequences flow from any criminal conviction," Hirabayashi v. United States, 828 F.2d 591, 606 (9th Cir.1987) (citation omitted), while the Seventh Circuit "rejects coram nobis petitions except where there is a concrete threat that an erroneous conviction's lingering disabilities will cause serious harm to the petitioner." United States v. Craig, 907 F.2d 653, 658 (7th Cir.1990). Loftus urges the court to adopt the less exacting approach of the Ninth Circuit. In the alternative, he maintains that the revocation of his licenses as a broker and an agent satisfy the stringent requirements of the Seventh Circuit.2

In response, the Government argues that the approach of the Seventh Circuit is the law in the Third Circuit. Applying the Seventh Circuit's criteria, the Government argues that coram nobis relief is unjustified. With respect to Loftus' assertion that he is ineligible for a position in city government and that he cannot serve as a director or officer of a federally insured bank, the Government maintains that, inasmuch as he is not interested in seeking such positions,3 these factors are insufficient to satisfy the continuing consequences requirement. For a similar reason, the Government contends that the fact that he cannot possess a firearm fails to qualify as a collateral consequence since he does not allege either a desire or a need to possess a firearm. With regard to the petitioner's contentions that he will be subjected to an enhanced sentence if convicted of another offense and that he can be impeached as a witness in a criminal or civil trial, the Government asserts that such factors are speculative and that reliance thereon would undermine the civil disability requirement. Addressing Loftus' claim that he cannot obtain licenses as an insurance agent and broker, the Government advances the position that under the relevant Pennsylvania regulations, his 1983 conviction would not bar him from acquiring these licenses. Further, the Government notes that he has not reapplied for these licenses.

At the direction of the court, Loftus proffered additional submissions with respect to his prior bank position and his insurance licenses. Loftus states that the bank in which he served as a director has adopted a mandatory retirement policy. The bank, however, has "grandfathered" directors who were on the Board prior to the acceptance of the retirement policy to allow them to remain on the Board after reaching the mandatory retirement age. Contrary to Loftus' initial belief that he could not serve as a director because of his age, it appears that he could come within the scope of the "grandfather" policy and, therefore, he is now interested in such an appointment.4 With respect to the insurance licenses, Loftus acknowledges that his conviction does not constitute prima facie evidence of unfitness under the Pennsylvania insurance regulations since it is more than five years old. Nonetheless, as the Insurance Commissioner holds a "great deal of discretion", Loftus argues that the Insurance Department "is much more likely to grant reinstatement ... if he comes before the Department out from under the yoke of his unlawful conviction for conspiracy to defraud." Document 27 at ¶ 2-3.5 In addition, Loftus maintains that he

will not seek reinstatement of his insurance licenses because he reasonably anticipates that if local media holds true to form, his application would bring with it the type of publicity and heartache that attended his prosecution. Obviously, under those circumstances, the denial of his application would create another waive sic of publicity and heartache.

Id. at 3.

The Government responds that the facts underlying Loftus' conviction will always exist and that granting coram nobis relief does not assure Loftus of becoming a director or obtaining his insurance licenses. The pleadings have been closed, and the petition is ripe for disposition. For the reasons that follow, the petition will be granted.

II.

In the aftermath of McNally, the writ of coram nobis has attained newfound importance.6 As the Seventh Circuit Court of Appeals observed, however, "coram nobis is a phantom in the Supreme Court's cases, appearing occasionally but only in outline. Morgan (1954) says that it exists, but no case...

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