United States v. Antico ( 2001 )

Opinions of the United
2001 Decisions States Court of Appeals
for the Third Circuit
11-28-2001
USA v. Antico
Precedential or Non-Precedential:
Docket 00-1446
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Filed November 28, 2001
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
NO. 00-1446
UNITED STATES OF AMERICA
v.
FRANK ANTICO,
Appellant
On Appeal From the United States District Court
For the Eastern District of Pennsylvania
(D.C. Crim. No. 98-242-01)
District Judge: Honorable Jan E. DuBois
Argued: April 5, 2001
Before: SCIRICA, AMBRO AND GIBSON*
Circuit Judges
(Filed: November 28, 2001)
_________________________________________________________________
*Honorable John R. Gibson, United States Circuit Judge for the Eighth
Circuit, sitting by designation.
Thomas Colas Carroll,
Esquire (Argued)
Mark E. Cedrone, Esquire
Carroll & Cedrone
Suite 940 Public Ledger Building
150 S. Independence Mall West
6th and Chestnut Streets
Philadelphia, PA 19106
Attorneys for Appellant,
Frank Antico, Sr.
Michael R. Stiles, Esquire
United States Attorney,
Eastern District of
Pennsylvania
Robert E. Courtney, Esquire
Assistant United States Attorney
Chief, Organized Crime Division
Walter S. Batty, Jr., Esquire
Assistant United States Attorney
Richard P. Barrett, Esquire (Argued)
Assistant United States Attorney
615 Chestnut Street, Suite 1250
Philadelphia, PA 19106
Attorneys for Appellee, United States
of America
OPINION OF THE COURT
AMBRO, Circuit Judge:
Frank Antico, Sr. ("Antico") appeals his conviction and
sentence in the United States District Court for the Eastern
District of Pennsylvania ("District Court") on one count of
racketeering in violation of 18 U.S.C. S 1962(c)--part of the
Racketeer Influenced and Corrupt Organizations Act
("RICO"),1 nine substantive counts of extortion in violation
_________________________________________________________________
1. Section 1962(c) provides that
2
of 18 U.S.C. S 1951 (known as the Hobbs Act), and eight
substantive counts of wire fraud in violation of 18 U.S.C.
S 1343.
On appeal, Antico asserts that he is entitled to a new
trial for three reasons: (1) the District Court's failure to
instruct the jury, during its charge on Hobbs Act extortion,
of the necessity of finding an inducement or a quid pro quo;
(2) the failure of the Government to prove a scheme to
defraud the citizens of Philadelphia of their intangible right
to his honest services; and (3) the insufficiency of the
District Court's jury instruction on materiality as an
element of wire fraud. We reject these allegations of error
and affirm Antico's conviction on Counts One through
Sixteen of the superseding indictment.
Antico also argues that his conviction of wire fraud on
Counts Seventeen and Eighteen, which involve his securing
permits for a prostitution business after he left the City of
Philadelphia's Department of Licenses and Inspections,
should be reversed as a result of the Supreme Court's
ruling in Cleveland v. United States, 531 U.S. 12 (2000),
that such a permit does not constitute property within the
meaning of the wire fraud statute. We agree, and reverse
Antico's conviction on these counts.
Finally, Antico challenges the District Court's
enhancement of his sentence for a leadership role in an
otherwise extensive criminal extortion activity and its loss
computation on the wire fraud counts. In light of our
reversal of conviction on two of the wire fraud counts, and
_________________________________________________________________
[i]t shall be unlawful for any person employed by or associated
with
any enterprise engaged in, or the activities of which affect,
interstate
or foreign commerce, to conduct or participate, directly or
indirectly,
in the conduct of such enterprise's affairs through a pattern of
racketeering activity or collection of unlawful debt.
In order to find a pattern of racketeering activity, the Government must
prove that at least two of the sixteen racketeering acts charged were
connected by a common scheme, plan or motive, and that at least two
of the racketeering acts were committed within ten years of each other
(one of which occurred within the five year statute of limitations).
3
for other reasons stated in this opinion, we vacate Antico's
sentence and remand to the District Court for resentencing.
I. Factual and Procedural Background
Antico's indiscretions, which we summarize in this
section, expose a pervasive abuse of government services.
In the following recitation of the schemes on which Antico's
conviction was based, we construe the facts in the light
most favorable to the Government, as we must following the
jury's guilty verdict. Glasser v. United States , 315 U.S. 60,
80 (1942).
Between 1983 and January, 1996, Antico held various
positions at the Department of Licenses and Inspections
("L&I") for the City of Philadelphia (the"City"). L&I's
function is to administer and enforce the City's code
requirements, including building, electrical, fire, health,
housing, business, and zoning regulations. Officials of L&I
are empowered to issue zoning and use permits and
licenses according to a first-come-first-served policy,
conduct inspections, and enforce applicable codes and
regulations through citations and cease and desist orders.
Persons aggrieved by these decisions may appeal to the
Zoning Board of Adjustment ("ZBA"). Antico worked at L&I
at various times as a Zoning Examiner, a Code
Administrator, and the Business Regulatory Enforcement
Director. In these positions, he had the discretionary
authority to approve zoning and use permits and licenses,
and to cite and close businesses for violations of the City's
ordinances and the laws of Pennsylvania, particularly those
governing adult cabarets and topless bars. The extortion
and wire fraud schemes that Antico concocted while he was
a public official at L&I and after he left its employ are
detailed below.
A. Extortion Schemes -- RICO Acts 1-13, 15, 16 and
Extortion Counts 2-10
1. Extortion of Westside Check Cashing
On December 22, 1994, L&I closed for zoning violations
one of Westside Check Cashing's stores, located at 5th and
Lehigh Avenues in Philadelphia. The controller of the check
4
cashing business met with Antico the next day to discuss
reopening the business. Antico explained that Westside had
to file a new application for a zoning and/or use
registration permit and make other changes.
Several days later, Antico called the controller and the
owner of the business and told them he wanted a piece of
jewelry to give to his wife for their anniversary. They
selected some items, including a diamond pendant
appraised at $3,275, and sent them to Antico's office by
courier. The owner and his controller testified that they
decided to send the jewelry to Antico and not bill him for it
because of Antico's position with L&I. The zoning issue that
led to the store closing on December 22 was still pending
and they were concerned that Antico would use his position
with L&I to keep the business closed. They understood from
their conversation with Antico that he did not intend, nor
did he ever offer, to pay for the jewelry. Once the conditions
of the permit were satisfied, Antico permitted the store to
reopen.
2. Extortion of Maureen McCausland2
Maureen McCausland met Antico in 1983 when Antico
was working in L&I's zoning section. McCausland
approached Antico to obtain a zoning and/or use permit
registration for a prostitution business at 2132 Market
Street in Philadelphia. Her zoning application read"nude
modeling studio" and Antico advised her instead to call the
business a "modeling studio" on the application.
McCausland did so, and she received the license. She later
paid Antico $500 for getting the permit for her.
This began a pattern of Antico receiving payments from
McCausland for approval of zoning and/or use registration
permits for a number of other prostitution businesses she
opened over the years. She paid Antico $500 when she
applied for the permit and $500 when she received it.
McCausland also paid Antico additional sums of money and
had sex with him so that he would use his position at L&I
_________________________________________________________________
2. The Maureen McCausland extortion scheme was charged as a
racketeering act but not a separate, substantive Hobbs Act extortion
count.
5
to protect her business. For example, when Antico was
placed in charge of enforcement, he alerted her to the police
department's efforts to close her business. McCausland
estimated that Antico extorted approximately $8,000 from
her during the period covered by the superseding
indictment.
McCausland's testimony was corroborated by the
applications for zoning and use registration permits
introduced into evidence. These applications were prepared
by Antico and listed the use as "modeling studio" or
"physical therapy."
3. Extortion of Adult Cabarets in Philadelphia--
Wizzards, Pin Ups, Tattletales and Teazers
Between 1993 and 1995, Antico served as the Business
Regulatory Enforcement Director for L&I, supervising the
unit that enforced compliance with the zoning code. Most
pertinent to this scheme, Antico was responsible for
regulating adult cabarets and their compliance with the
zoning code.
The Philadelphia Code defines an adult cabaret as"[a]n
adult club, restaurant, theater, hall or similar place which
features topless dancers, go-go dancers, exotic dancers,
strippers, male or female impersonators or similar
entertainers exhibiting specified anatomical areas or
performing specified sexual activities." Philadelphia Code
S 14-1605. A business that meets this definition is
considered a regulated use and is prohibited from operating
within 1,000 feet of another regulated use or within 500
feet of a residential area. According to L&I policies, all adult
cabarets are required to be licensed or to receive a variance
from the ZBA. In addition, the dancers at a licensed cabaret
(or a cabaret permitted to operate as such while it sought
a license) cannot perform in a lewd or obscene manner.3
_________________________________________________________________
3. L&I incorporated the Philadelphia Code definition of obscenity in
determining what constituted a lewd performance by a dancer. See
Philadelphia Code SS 10-1100 through -1103. Dancers were thereby
prohibited from touching patrons and participating in actual or
simulated sexual acts on stage. Additionally, the dancers were required
to wear bottoms and latex pasties to cover their breasts.
6
a. Wizzards
The scheme with respect to Antico's extortion of Wizzards
began with John Messina, John Meehan, and Frank Antico,
Jr. (Antico's son) forming Pan Enterprises, Inc. to operate
Wizzards, an adult cabaret located at 38th and Chestnut
Streets in Philadelphia. Initially, Messina provided the
start-up money and held 89% of the corporation. Messina
gave 10% and the manager position to Meehan because of
his experience in operating topless clubs. Meehan, in turn,
introduced Messina to Antico, Jr.
Meehan and Antico, Jr. told Messina that if Antico, Jr.
received a 1% interest in Pan Enterprises and a position as
a weekend manager, defendant Antico would use his
position with L&I to help Wizzards operate. Messina agreed
to this arrangement and to paying Meehan and Antico, Jr.
part of their weekly salaries in cash without reporting it to
the taxing authorities.
Antico guided Wizzards through the permitting and
licensing process at L&I. In addition, when Wizzards
opened for business on September 23, 1993, Antico
arranged to have two competing clubs shut down for code
violations. After Wizzards opened, Antico frequented the
club and received complimentary drinks, food, and parties
for himself and his friends. While Antico was present, the
dancers violated the code restrictions on lewd dancing, yet
Antico issued neither citations nor cease and desist orders.
After operating Wizzards for a few months, Messina and
other investors began to quarrel with Meehan and Antico,
Jr. over the club's management. Although the club was
crowded and appeared to be doing well, the books did not
reflect this success. When Messina and the investors tried
to take a more active role in the club's management,
Meehan and Antico, Jr. objected and threatened to have
L&I shut the club down. In fact, in March 1994, Antico
came into the club and closed it down because the dancers
were performing in a lewd manner. A former employee of
Wizzards testified that Meehan told that employee that he
knew the club would be shut down, but would be permitted
to reopen the next day. According to this employee, Meehan
was "flexing his muscles."
7
In June 1994, Eugene Johnson took over Messina's
ownership interest in Wizzards as repayment of a debt.
Johnson brought in Dorothy Davis from his New Jersey
establishment to observe how Meehan and Antico, Jr.
operated the club. Davis reported that most of the
employees, including Meehan and Antico, Jr., were getting
paid cash under the table, that Antico, Jr. was being paid
a large salary for doing very little, and that the dancers
were performing in violation of the L&I policies. Johnson
instructed Davis to put all employees on the books, cut
Antico, Jr.'s salary or fire him, and require all dancers to
conform to L&I restrictions on dancing.
When Davis informed Meehan of these instructions,
Meehan responded that Antico, Jr.'s father was the head of
L&I and that Wizzards was operating at his mercy. On June
16, 1994, Meehan and Antico, Jr. resigned their
employment with Wizzards. Within two hours defendant
Antico closed Wizzards for lewd dancing.
b. Pin Ups
In August of 1995, Antico, Antico, Jr., and Meehan met
with the owners of Pin Ups to discuss the sale of the club
to Antico, Jr. and Meehan. At a follow-up meeting, the
owners turned down the offer made by Antico, Jr. and
Meehan. Two weeks later, on September 8, 1995, L&I
inspectors arrived at Pin Ups, conducted an inspection and
closed the club for electrical violations.
Prior to the closure, some of the Pin Ups dancers knew
the club was going to be shut down and arranged to dance
at Tattletales, another topless club located nearby. The
owners of Tattletales also knew that Pin Ups was going to
be shut down and arranged for additional staffing and
liquor for the night.
On the night of the inspection, one of the owners of Pin
Ups, suspecting that the closure was in response to their
refusal to sell the club, told defendant Antico that if Pin
Ups was not reopened the next day, he was going to"call
the Feds." Antico permitted Pin Ups to reopen before the
electrical violations were corrected.
c. Tattletales
Steve Owens and Greg Bertino opened Tattletales in July
1995. Antico was a regular customer and advised the two
8
on the Code and the obscenity rules. Antico took them to
other topless clubs to view couch dancing and urged them
to put a couch dancing room into Tattletales. Antico told
them to call him if they ever had any problems.
Despite Antico's advice, the dancers at the club did not
follow the dancing restrictions or the Code. Antico,
however, did not cite the club for violations. Instead, he
was treated to free drinks, meals, and couch dances.
Owens and Bertino did this to gain favor with Antico and to
maintain good relations with L&I. The two also gave Antico
$500.
d. Teazers
Thomas Killeen was an owner of Teazers, a topless club
located at 20th Street and Oregon Avenue in Philadelphia.
In connection with the opening on September 23, 1993 of
Wizzards, Antico closed Teazers and another bar owned by
Killeen because the dancers were violating L&I restrictions.
Subsequent to its reopening, Antico began to patronize
Teazers. Killeen would socialize with Antico and give him
free drinks. Antico eventually asked Killeen for, among
other things, the repeated use of one of Killeen's limousines
from his limousine company. Killeen acquiesced because of
Antico's position in L&I and never billed him for the use.
Killeen ultimately hired limousines from other companies
because he did not want Antico to be seen in one of his
vehicles. In addition, Antico asked for, and Killeen let him
use, six field-level box seats for several Phillies games.
Antico gave Killeen a list of games he wanted to attend and
sent an L&I employee to pick up the tickets.
4. Beach Club
Frank Cascerceri was the owner of the Beach Club, a
nightclub formerly located along the Delaware River in
Philadelphia. Cascerceri testified that he built a pool at the
club and hired an expediter4 to apply for permits from L&I.
_________________________________________________________________
4. Expediters are independent contractors who, in exchange for a fee,
represent individuals and businesses before L&I and the ZBA. Expediters
typically prepare the paperwork required to obtain permits, licenses, or
variances by L&I or the ZBA. Expediters may interact with employees of
L&I during the process, and appear at public hearings before the ZBA.
9
The expediter prepared the necessary application and filed
it with L&I. Because the club was scheduled to open in the
Spring of 1993, Cascerceri became frustrated when L&I
delayed issuing the permit. He called Antico and explained
the urgency of getting the permit. Antico told him that he
was using the wrong expediter, and that he should hire
Elizabeth Ricciardi5 to expedite his application for the
permit. Antico spoke to Ricciardi before Cascerceri did and
urged her to take the employment.
To avoid the risk of not getting L&I approval, Cascerceri
hired Ricciardi. He paid her $625 for her assistance,
although Ricciardi testified that she did very little to obtain
the permit. Shortly after he hired Ricciardi, Cascerceri
received his approval from L&I.
5. Extortion of Barbara Williams6
Barbara Williams worked as an expediter in Philadelphia
from 1984 to 1989. To circumvent L&I's first-come-first-
served rule of processing applications, Williams would turn
to Antico on her urgent matters and pay him to process her
paperwork ahead of others. She also paid Antico to prepare
particularly complex zoning applications. Typically,
Williams would give Antico batches of permits to process at
one time, and paid him according to the number of
applications he processed. The payments ranged from $30
to $75 per application. Williams estimated that Antico
extorted approximately $5,000 from her during her work as
an expediter.
B. Mail and Wire Fraud Scheme Involving Elizabeth
Ricciardi -- RICO Acts 14A-F and Wire Fraud Counts
11-16
Antico's employment with L&I required him to refrain
from using his position to secure advantages for himself or
his family members. The Philadelphia Code provides that
_________________________________________________________________
5. Ricciardi is the subject of the mail and wire fraud racketeering acts
and the substantive wire fraud offenses in Counts 11-16. See the
discussion of the Ricciardi mail and wire fraud schemes, infra at part
I.B.
6. The Barbara Williams extortion scheme was charged as a racketeering
act but not a separate Hobbs Act extortion count.
10
city employees must disclose publicly a conflict of interest
and recuse themselves from taking any official action in a
matter where they have a financial interest.7 In addition,
state ethics laws prohibited him from using his employment
for private pecuniary gain.8 See 65 Pa. C.S.A. SS 401-409,
repealed by P.L. 729, No. 93, S 6(a)(2) (Oct. 15, 1998), and
replaced with 65 Pa. C.S.A. SS 1101.1-1108. These code
provisions are implicated by Antico's arrangement with
Elizabeth Ricciardi.
In the late 1980s, Ricciardi had two children by Antico.
Initally, Antico failed to make child support payments,
forcing Ricciardi to file a child support petition in the
Philadelphia Court of Common Pleas, Family Court
_________________________________________________________________
7. Section 20-607 of the Philadelphia Code, titled Conflict of Interest,
states in relevant part:
Unless there is public disclosure and disqualification . . . , no
City
officer or employee shall be financially interested in any
legislation,
including ordinances and resolutions, award, contract, lease, case,
claim, decision, decree or judgment made by him in his official
capacity . . ., nor shall any financial interest be held by a
parent,
spouse, child, brother, sister or like relative-in-law, or by any
person, firm, partnership, corporation, business association,
trustee
or straw party for his or her benefit.
8. The State Ethics Act provides that "[n]o public official or public
employee shall engage in conduct that constitutes a conflict of interest."
65 Pa. C.S.A. S 403. The Ethics Act defined a conflict of interest as
follows:
Use by a public official or public employee of the authority of his
office or employment or any confidential information received
through his holding public office or employment for the private
pecuniary benefit of himself, a member of his immediate family or a
business with which he or a member of his immediate family is
associated. "Conflict" or "conflict of interest" does not include
an
action having a de minimis economic impact or which affects to the
same degree a class consisting of the general public or a subclass
consisting of an industry, occupation or other group which includes
the public official or public employee, a member of his immediate
family or a business with which he or a member of his immediate
family is associated.
65 Pa. C.S.A. S 402. The statute currently in effect is virtually
identical
to the provision cited above. See 65 Pa. C.S.A. S 1102.
11
9. The Philadelphia Sign Company, located in New Jersey, was one of
Ricciardi's clients. Telephone calls from Ricciardi in Philadelphia to the
client in New Jersey on six separate occasions in December of 1993
serve as the basis for the substantive wire fraud offenses in Counts
Eleven through Sixteen. The use of the mails with respect to the same
client constituted the mail fraud racketeering acts proven as predicate
acts under the RICO Count.
Division. The child support order at that time was $60 per
week. Antico volunteered to pay child support if Ricciardi
would withdraw the petition, which she agreed to do. He
made three payments, then stopped.
In lieu of the payments, Antico offered to establish
Ricciardi as an expediter. She was reluctant to accept,
knowing nothing about the expediting business, but Antico
told her that he would take care of everything. This was not
an empty promise. Antico referred clients to Ricciardi who
needed licenses and permits from L&I. Ricciardi would call
Antico when a client hired her. Antico would then tell
Ricciardi how to fill out the applications or would complete
them himself. Ricciardi was known to use Antico's office at
L&I to do her work, and he would have city employees pick
up and deliver her paperwork and watch her children.
Antico personally worked on 564 of the 748 building
permit, and 288 of the 322 zoning permit, applications filed
by Ricciardi and submitted them under her name. 9
Moreover, Antico was the one who approved the permits
and applications submitted by her business. Antico neither
publicly disclosed a conflict of interest nor disqualified
himself from taking official action in these matters, as
required by Section 20-607 of the Philadelphia Code. As a
result of this arrangement, Ricciardi admits to earning over
$700,000 during the course of the arrangement.
In 1993, upon discovering that Antico was signing permit
applications on behalf of Ricciardi, L&I Commissioner Levin
transferred Antico and moved the responsibility for permit
approvals to a different manager. Antico was no longer the
head of the zoning department, and his job responsibilities
no longer included approving permit applications.
12
C. Wire Fraud Scheme Involving Maureen McCausland
Counts Seventeen and Eighteen10
In January 1996, Antico left L&I and established an
expediting business in Philadelphia under the name Frank
P. Antico, Zoning Consultant, Advisor, and Technician of
the Philadelphia Code. In 1997, Maureen McCausland
requested Antico's services to reopen a prostitution
business. Unbeknown to Antico, McCausland was
cooperating with the Federal Bureau of Investigation ("FBI")
at the time and this request was part of a Government
operation. Antico assisted McCausland with her permit
application, which declared the facility to be a modeling
studio/physical fitness business at 1212 Walnut Street,
Philadelphia.11 Antico attempted to hide his involvement by
having another expediter submit the applications.
* * * * *
On September 30, 1998, a federal grand jury in the
Eastern District of Pennsylvania returned an eighteen count
superseding indictment. The Government charged Antico
with sixteen racketeering acts under the umbrella of one
RICO count (Count One), nine of which were also charged
as substantive Hobbs Act extortion counts (Counts Two
through Ten), and six of which were charged as substantive
wire fraud counts (Counts Eleven through Sixteen). Antico
was charged with two additional substantive wire fraud
counts (Counts Seventeen and Eighteen) that do not fall
under the RICO umbrella count. The jury convicted Antico
of all eighteen counts in the superseding indictment. With
respect to the RICO count, the jury concluded that fifteen
of the sixteen predicate racketeering acts were proven.12
_________________________________________________________________
10. The Maureen McCausland wire fraud scheme charged in Counts
Seventeen and Eighteen is not part of the RICO Count.
11. The two communicated via interstate phone calls to set up meetings
to discuss the application and how to circumvent the L&I regulations.
These conversations were taped by the FBI.
12. The jury concluded that Racketeering Act 2 was not proven. This act,
which occurred in March 1993, was the exchange of $500 for obtaining
the zoning and/or use registration permit that falsely declared that
McCausland operated a "modeling studio" at 2132 Market Street.
However, this is not fatal to the conviction on the RICO count because
the jury concluded that Racketeering Acts 3 through 6, which pertained
to the same extortion scheme involving McCausland, as well as
Racketeering Acts 7 through 16, were proven.
13
On April 28, 2000, Antico was sentenced to terms of
sixty-three months imprisonment on Counts One through
Ten (RICO and extortion) and to terms of sixty months
imprisonment on Counts Eleven through Eighteen (wire
fraud). All terms were to be served concurrently. 13 In
addition, Antico was sentenced to three years supervised
release, ordered to pay a fine of $10,000 and a special
assessment of $1,000, and ordered to forfeit $52,900.
II. Legal Discussion
This Court has jurisdiction of an appeal from a judgment
of conviction and sentencing pursuant to 28 U.S.C.S 1291.
On appeal, Antico alleges three points of trial error and
challenges his sentence on two grounds. We address each
allegation of error in turn.
A. Requirement of Inducement or Quid Pro Quo in Hobbs
Act Extortion
Antico challenges the District Court's instructions to the
jury with respect to Hobbs Act extortion under "color of
official right." The Hobbs Act provides in relevant part:
(a) Whoever in any way or degree obstructs, delays, or
affects commerce or the movement of any article or
commodity in commerce, by robbery or extortion or
attempts or conspires so to do, or commits or threatens
physical violence to any person or property in
furtherance of a plan or purpose to do anything in
violation of this section shall be fined not more than
$10,000 or imprisoned not more than twenty years, or
both.
(b) As used in this section--
. . .
(2) The term `extortion' means the obtaining of
property from another, with his consent, induced
_________________________________________________________________
13. The District Court grouped for sentencing purposes the RICO and
extortion counts in one group and the wire fraud counts in a second
group. It then imposed a sentence based on the groups rather than on
the individual counts.
14
by wrongful use of actual or threatened force,
violence, or fear, or under color of official right.
18 U.S.C. S 1951 (emphasis added). Thus, the statute
supports two classes of extortion: extortion induced by
"wrongful use of force" and extortion "under color of official
right."14 The latter is at issue in this case.
Specifically, Antico argues that the District Court should
have charged the jury to determine whether he induced his
extortion victims into giving him gifts and favors with a
promise or threat of an official act in return or, at a
minimum, that a quid pro quo was reached between them.
This Court exercises plenary review over the alleged failure
of the District Court to charge the jury properly on a matter
of law. United States v. Bradley, 173 F.3d 225, 230 (3d Cir.
1999).
1. Inducement
With respect to Antico's claim that an inducement
instruction should have been charged to the jury as per
subsection (b)(2) of the Hobbs Act, the Supreme Court in
Evans v. United States, 504 U.S. 255 (1992), clearly
rejected inducement as an element of the offense of
extortion "under color of official right." Id. at 256. The
Supreme Court affirmed the ruling of the Court of Appeals
for the Eleventh Circuit, which held that
the requirement of inducement is automatically
satisfied by the power connected with the public office.
Therefore, once the defendant has shown that a public
official has accepted money in return for a requested
exercise of official power, no additional inducement
need be shown. The coercive nature of the official office
provides all the inducement necessary.
_________________________________________________________________
14. See United States v. Jannotti, 673 F.2d 578 (3d Cir. 1982) (ruling
Hobbs Act covers actions by public officials under color of official right
even when the payment is not obtained by force, threats nor use of
force); United States v. Margiotta, 688 F.2d 108, 130-31 (2d Cir. 1982)
("The public officer's misuse of his office supplies the necessary element
of coercion, and the wrongful use of official power need not be
accompanied by actual or threatened force, violence or fear.").
15
United States v. Evans, 910 F.2d 790, 796-97 (11th Cir.
1990). Relying on the common law of extortion, the
Supreme Court agreed and held that "the word`induced' is
a part of the definition of the offense by the private
individual, but not the offense by the public official. . . .
The statute merely requires of the public official that he
obtain `property from another, with his consent, . . . under
color of official right.' " Evans, 504 U.S. at 265. Thus,
Antico's claim that an inducement instruction should have
been given fails.
2. Quid Pro Quo
Antico also asserts that the District Court should have
charged the jury to find a specific quid pro quo . He cites to
a trilogy of Supreme Court cases -- McCormick v. United
States, 500 U.S. 257 (1991), Evans v. United States, 504
U.S. 255, and United States v. Sun Diamond Growers of
Cal., 526 U.S. 398 (1999) -- in support of his argument.
Antico begins by citing to the cornerstone Supreme Court
case on Hobbs Act extortion--McCormick, which held that
an explicit quid pro quo is necessary for conviction under
the Hobbs Act when a public official receives a campaign
contribution. In McCormick, the Supreme Court ruled that
the District Court erred by instructing the jury that such a
quid pro quo was not necessary. McCormick 500 U.S. at 274.15
The logic the Supreme Court employed in McCormick
follows the fine line between what is legal campaign activity
and the "forbidden zone of conduct."
[T]o hold that legislators commit the federal crime of
extortion when they act for the benefit of constituents
or support legislation furthering the interests of some
of their constituents, shortly before or after campaign
contributions are solicited and received from those
_________________________________________________________________
15. The District Court's instructions in McCormick did not omit passively
a quid pro quo element, as the District Court did in the case before us.
Instead, the District Court affirmatively stated that "it is not necessary
that the government prove that the defendant committed or promised to
commit a quid pro quo, that is, consideration in the nature of an official
action in return for the payment of the money not lawfully owed." Id. at
261 n.4 (emphasis added).
16
beneficiaries, is an unrealistic assessment of what
Congress could have meant by making it a crime to
obtain property from another, with his consent,"under
color of official right." To hold otherwise would open to
prosecution not only conduct that has long been
thought to be well within the law but also conduct that
in a very real sense is unavoidable so long as election
campaigns are financed by private contributions or
expenditures, as they have been from the beginning of
the Nation. It would require statutory language more
explicit than the Hobbs Act contains to justify a
contrary conclusion.
Id. at 272-73.
Because the line is so subtle, the Supreme Court ruled in
McCormick that an overt quid pro quo is a necessary proof
in the context of campaign contributions.
The receipt of such contributions is also vulnerable
under the Act as having been taken under color of
official right, but only if the payments are made in
return for an explicit promise or undertaking by the
official to perform or not to perform an official act. In
such situations the official asserts that his official
conduct will be controlled by the terms of the promise
or undertaking. This is the receipt of money by an
elected official under color of official right within the
meaning of the Hobbs Act.
Id. at 273.
Antico appears to favor extending the McCormick explicit
quid pro quo ruling to non-elected public employees outside
the context of campaign contributions because the state of
mind necessary to convict in the two contexts is the same.
However, the Supreme Court noted that its holding was
limited to campaign contributions.
McCormick does not challenge any rulings of the
courts below with respect to the application of the
Hobbs Act to payments made to nonelected officials or
to payments made to elected officials that are properly
determined not to be campaign contributions. Hence,
we do not consider how the "under color of official
17
right" phrase is to be interpreted and applied in those
contexts.
Id. at 268-69. In light of this express limitation, we decline
Antico's invitation to extend McCormick to apply to his
situation. The quid pro quo can be implicit, that is, a
conviction can occur if the Government shows that Antico
accepted payments or other consideration with the implied
understanding that he would perform or not perform an act
in his official capacity "under color of official right."
In Evans, decided one year after McCormick, the Supreme
Court ruled that a jury instruction containing an implicit,
as opposed to an explicit, quid pro quo requirement in the
context of campaign contributions passed muster under
McCormick. The Supreme Court stated:
We reject petitioner's criticism of the instruction, and
conclude that it satisfies the quid pro quo requirement
of McCormick v. United States, because the offense is
completed at the time when the public official receives
a payment in return for his agreement to perform
specific official acts; fulfillment of the quid pro quo is
not an element of the offense. . . . We hold today that
the Government need only show that a public official
has obtained a payment to which he was not entitled,
knowing that the payment was made in return for
official acts.
Evans, 504 U.S. at 268. In other words, no"official act"
(i.e., no "quo") need be proved to convict under the Hobbs
Act. Nonetheless, the official must know that the payment
-- the "quid"-- was made in return for official acts.
Outside the campaign contribution context, where
Antico's case falls, the line between legal and illegal
acceptance of money is not so nuanced. The Hobbs Act
simply states that use of one's office to obtain money or
services not due is extortion: "the Government need only
show that a public official has obtained a payment to which
he was not entitled, knowing that the payment was made in
return for official acts." Id. Antico would read into the
phrase "knowing the payment was made in return for
official acts" a requirement that the jury be instructed
using the express words "quid pro quo."
18
We echo the Supreme Court's satisfaction with an
implicit quid pro quo requirement. In United States v.
Bradley, 173 F.3d 225 (3d Cir. 1999), we considered the
question of whether, in a non-campaign contribution Hobbs
Act extortion case, an express agreement must be shown.
Relying on Justice Kennedy's concurrence in Evans, we
agreed that " `the official and the payor need not state the
quid pro quo in express terms, for otherwise the law's effect
could be frustrated by knowing winks and nods.' " Bradley,
173 F.3d at 231 (citing Evans, 504 U.S. at 274).
In addition, we rejected Antico's argument when we
affirmed, in part, the District Court's holding in United
States v. McDade, 28 F.3d 283 (3d Cir. 1994), affirming in
part and dismissing on other grounds, 827 F. Supp. 1153
(E.D. Pa. 1993). Analyzing both the McCormick and Evans
cases, the District Court in McDade concluded that "[g]iven
the language of the Supreme Court's opinion, I find that
McCormick does not require a quid pro quo for extortion
outside the context of campaign contributions." 827 F.
Supp. at 1171; accord United States v. Davis, 967 F.2d 516
(11th Cir. 1992). "[S]ince I can find no language in the
Opinion of the Court in Evans which explicitly extends the
quid pro quo requirement, and since the facts of Evans did
not require the Court to extend McCormick, I respectfully do
not interpret the Court's opinion so broadly as did those
concurring and dissenting Justices [in Evans ]." McDade,
827 F. Supp. at 1171 n.8. We reiterate our agreement with
McDade.
The relevant inquiry is whether the District Court's
instruction satisfied the implicit quid pro quo requirement
where non-campaign contribution Hobbs Act "color of
official right" extortion is charged. A closer look at Evans'
language on quid pro quo, as well as Bradley and McDade
and the District Court's decision, all of which dealt with
"color of official right" Hobbs Act extortion outside the
campaign contribution context, lead to the conclusion that
the District Court did not err in its jury charge. The proper
instruction, as per the Evans Court, is"that the
Government need only show that a public official has
obtained a payment to which he was not entitled, knowing
that the payment was made in return for official acts." 504
19
U.S. at 268. The jury instruction we affirmed in Bradley
reads as follows:
So if a public official agrees explicitly or implicitly to
take or withhold some action for the purpose of
obtaining money for someone else, that constitutes
extortion. The public official need not fulfill the promise
of the payor to do or not to do an official act, although
the official's failure to influence may be considered
along with all of his conduct in determining whether or
not he possessed the intent to commit the crime. The
crime is completed at the time when the public official
knowingly accepts the benefit in return for his
agreement to perform or not to perform an act related
to his office. Moreover, the government does not have to
prove that there was an express promise on the part of
the public official to perform a particular act at the time
of the payment.
In sum then, it is sufficient if the public official
understands that he is expected, as a result of the
payment, to exercise particular kinds of influence or to
do certain things connected with his office as specific
opportunities arise.
Bradley, 173 F.3d at 231 (emphasis added).
The District Court's charge to the jury in Antico's case,
after specifically reading the relevant portions of the Hobbs
Act, was as follows:
Extortion under color of official right is the use of one's
position as a public official or the authority of public
office to obtain money or services not due the official or
his public office. Such extortion violates the Hobbs Act.
. . .
If you decide that the defendant was given money or
goods or services not due the office he represents, you
must then decide whether the defendant used the
authority of his office or position to obtain the money,
goods or services. The third element is wrongful
obtained consent of the giver. The Government must
prove beyond a reasonable doubt that these items were
20
given to the defendant in connection with his power and
authority as a public official.
The giver may have initiated the exchange and the
parties may be on friendly terms. These are factors to
be considered in deciding whether the giver gave the
payments, goods or services because he believed the
defendant would use his office for acts not properly
related to his official duty or whether instead the giver
was making a voluntary contribution.
Unless you decide beyond a reasonable doubt that the
defendant knew the giver's consent was wrongfully
obtained, that is, that the money, goods or services were
given in connection with the defendant's misuse of his
official position rather than being given voluntarily, you
cannot convict the defendant.
(Emphases added).
No specific instruction to find an express quid pro quo
was given. Nor did the District Court specifically negate
such a requirement as the trial court did in McCormick. As
the District Court noted, "I didn't not grant the
Government's points, by the way, . . . which asked me to
charge that no quid pro quo was required and no
inducement was required. I just didn't charge it." Antico
argues that a jury instruction failing to mention quid pro
quo falls short of the mark.
We disagree with Antico's interpretation of the Supreme
Court's intent. Considering the District Court's instructions
as a whole, and the highlighted phrases in particular,
which require a finding of Antico's knowledge of a
"connection" between the payment and the misuse of his
office, we find that they sufficiently convey the implicit quid
pro quo approved in Evans and Bradley. As a result, the
District Court did not err in its charge to the jury. If Antico
knew that payments or other consideration were extended
to him to secure unwarranted favorable treatment in his
official capacity, he is guilty of Hobbs Act extortion under
color of official right without the need to prove that the
official action (or inaction) occurred.
Lastly, Antico cites to the recent case of United States v.
Sun Diamond Growers of Cal., 526 U.S. 398 (1999), as an
21
affirmation that the Supreme Court has retreated from its
holding in Evans and returned to the position in McCormick
that an express quid pro quo must be found. Notably,
however, the Sun Diamond case was brought under the
federal gratuity statute, 18 U.S.C. S 201(b)(2), not the
Hobbs Act. The crime of illegal gratuity "requires a showing
that something of value was given, offered, or promised to
a public official (as to the giver), or demanded, sought,
received, accepted, or agreed to be received or accepted by
a public official (as to the recipient), for or because of any
official act performed or to be performed by such public
official." Id. at 404. The Supreme Court reasoned that "[t]he
insistence upon an `official act,' carefully defined, seems
pregnant with the requirement that some particular official
act be identified and proved." Id. at 406.
As a result, the Court held in Sun Diamond that, "in
order to establish a violation of 18 U.S.C. S 201(c)(1)(A), the
Government must prove a link between a thing of value
conferred upon a public official and a specific`official act'
for or because of which it was given." Id. at 414. Again,
noting the subtle distinction between what is legal
campaign activity and the "forbidden zone of conduct," the
Supreme Court recognized the peculiar results if it were to
convict without a finding of any connection between the
public official's intent and a specific official act. "It would
criminalize, for example, token gifts to the President based
on his official position and not linked to any identifiable act
-- such as the replica jerseys given by championship sports
teams each year during ceremonial White House visits." Id.
at 406-07. Thus, in the context of campaign contributions
under the illegal gratuity statute, Sun Diamond requires
proof of a specific "quo," which Antico argues necessitates
an express quid pro quo jury instruction.
In contrast to the illegal gratuity statute, the Hobbs Act,
as interpreted by both the Supreme Court and our Court,
contains no express quid pro quo requirement in the non-
campaign contribution context. The concerns over illegal
campaign contributions addressed by the gratuity statute
and the Hobbs Act -- solved by an express quid pro quo
requirement in those cases -- do not automatically carry
over to the line of cases dealing with Hobbs Act extortion as
22
it pertains to non-elected officials. Accordingly, we do not
read Sun Diamond to require a heightened quid pro quo jury
instruction, distinct from that outlined in Evans, in this
case. Because the District Court's jury instruction comports
with that in Evans and Bradley, we reject Antico's
allegation of error in this respect.
B. Intangible Rights of Honest Services
1. Sufficiency of the Government's Proof
The jury found that the Government had proven all of the
mail and wire fraud racketeering acts under the RICO
count and found Antico guilty of all of the substantive
counts of mail and wire fraud. On appeal, Antico challenges
the sufficiency of the evidence with respect to the
fraudulent schemes. Again, sufficiency of the evidence is
reviewed in a light most favorable to the Government
following a jury verdict in its favor. Glasser v. United States,
315 U.S. 60, 80 (1942). "We must sustain the verdict if
there is substantial evidence, viewed in the light most
favorable to the government, to uphold the jury's decision.
. . . We do not weigh evidence or determine the credibility
of witnesses in making this determination." United States v.
Beckett, 208 F.3d 140, 151 (3d Cir. 2000) (citations
omitted). The scope of review is over the totality of the
evidence, both direct and circumstantial. United States v.
Czubinski, 106 F.3d 1069, 1073 (1st Cir. 1997).
In relevant part, the mail and wire fraud statutes provide:
Whoever, having devised or intending to devise any
scheme or artifice to defraud, or for obtaining money or
property by means of false or fraudulent pretenses,
representations, or promises . . . [uses the mails or
wires, or causes their use] for the purpose of executing
such scheme or artifice . . . shall be fined under this
title or imprisoned not more than five years, or both.
18 U.S.C. SS 1341 & 1343. To prove mail or wire fraud, the
evidence must establish beyond a reasonable doubt (1) the
defendant's knowing and willful participation in a scheme
or artifice to defraud, (2) with the specific intent to defraud,
and (3) the use of the mails or interstate wire
communications in furtherance of the scheme. United
23
States v. Clapps, 732 F.2d 1148, 1152 (3d Cir. 1984).
Identical standards apply to the "scheme to defraud" under
both the mail and the wire fraud statutes. United States v.
Boots, 80 F.3d 580, 586 n.11 (1st Cir. 1996).
Courts have interpreted the term " `scheme or artifice to
defraud' [to] include a scheme or artifice to deprive another
of the intangible right of honest services," United States v.
Woodward, 149 F.3d 46 (1st Cir. 1998) (citing United States
v. Sawyer, 85 F.3d 713, 723-24 (1st Cir. 1996)), giving rise
to the "intangible rights doctrine."16 This doctrine reaches
public and private fraud at the state and local levels,
including prosecutions of public officials or employees who
have failed to provide honest services to the citizenry they
_________________________________________________________________
16. The intangible rights doctrine gradually developed as courts of
appeals interpreted the mail fraud statute since its origin in the late
1800s. In 1987, the Supreme Court overturned decades of mail and wire
fraud jurisprudence in McNally v. United States , 483 U.S. 350 (1987),
when it held that the mail and wire fraud statutes do not prohibit
schemes to defraud individuals of their intangible right to honest
government services. In response, Congress enacted the honest services
amendment the next year. It provides: "For the purposes of this chapter,
the term `scheme or artifice to defraud' includes a scheme or artifice to
deprive another of the intangible right of honest services." 18 U.S.C.
S 1346 (effective Nov. 11, 1988). Section 1346 was enacted without much
comment and little legislative history. However, commentary and judicial
reflection indicate that the statute was enacted to overturn McNally and
restore the evolution of mail and wire fraud to its pre-McNally status.
See 134 Cong. Rec. H11,251 (daily ed. Oct 21, 1988) (statement of Rep.
Conyers) ("This amendment restores the mail fraud provision to where
that provision was before the McNally decision."); Id. at S17,376 (daily
ed. Nov. 10, 1988) (statement of Sen. Biden) ("This section overturns the
decision in McNally v. United States. . . . Under the amendment, those
statutes will protect any person's intangible right to the honest services
of another, including the right of the public to the honest services of
public officials."); Cleveland v. United States, 531 U.S. 12, 20 (2000)
(noting "Congress amended the law specifically to cover one of the
`intangible rights' that lower courts had protected under S 1341 prior to
McNally: `the intangible right of honest services' "); United States v.
DeVegter, 198 F.3d 1324, 1327 (11th Cir. 1999) (noting that " `Congress
passed [S 1346] to overrule McNally and reinstate prior law' ")
(alteration
in original); United States v. Grandmaison, 77 F.3d 555, 556 (1st Cir.
1996) (same, citing cases).
24
serve.17 Although our interpretation of the scope of the mail
and wire fraud statutes is not boundless, we have
construed a "scheme or artifice to defraud" to encompass
intangible rights. Clapps, 732 F.2d at 1149-53 (affirming
the conviction of a county political party chairman who
defrauded nursing home residents of their absentee ballots
and marked them in favor of the party's candidate); United
States v. Frankel, 721 F.2d 917, 920-21 (3d Cir. 1983)
("Schemes to defraud come within the scope of the statute
even absent a false representation."); United States v. Boffa,
688 F.2d 919, 931 (3d Cir. 1982) (concluding that a scheme
to defraud employees "of the loyal, faithful, and honest
services of their union official alleges a crime within the
scope of the mail fraud statute"). Given Congress' clear
intent in enacting S 1346, we join with those courts that
recognize that the scope of the amendment includes the
prosecution of state and local officials and public employees
for depriving the citizens they serve of their right to honest
services.18
_________________________________________________________________
17. See, e.g., Woodward, 139 F.3d 46 (affirming the conviction for mail
and wire fraud on the "theft of honest services" theory where legislator,
serving on the Joint Committee on Insurance, accepted illegal gratuities
from insurance industry lobbyist); United States v. Silvano, 812 F.2d 754
(1st Cir. 1987) (applying the mail fraud statute to local political
corruption and affirming the conviction of a Boston city official who
secretly arranged for a friend to receive commissions from the city's
choice of health insurance provider); United States v. Margiotta, 688 F.2d
108, 112-13 (2d Cir. 1982) (affirming the conviction of the chairman of
a local Republican committee who fraudulently arranged for his
associates to receive insurance contracts with local governments); see
also Daniel W. Hurson, Mail Fraud, The Intangible Rights Doctrine, and
the Infusion of State Law: A Bermuda Triangle of Sorts, 38 Hous. L. Rev.
297, 305 & n.34 (2001) (citing cases).
18. Antico argues that extension of the mail fraud statute to local
political corruption runs counter to the heightened federalism concerns
recently raised by the Supreme Court. See Cleveland, 531 U.S. at 25 ("As
we reiterated last Term, `unless Congress conveys its purpose clearly, it
will not be deemed to have significantly changed the federal-state
balance' in the prosecution of crimes."). However, Antico's argument is
misplaced. While the Supreme Court recently voiced federalism concerns
over the reach of mail fraud prosecutions in general in Cleveland, it
acknowledged that Congress indeed spoke clearly when it restored the
"intangible right of honest services" within the scope of S 1346. Id. at
20.
Moreover, we need not reconcile the principles of federalism with S 1346
in this case because Antico owed a duty to the citizens of Philadelphia
under state and local law. See Margiotta, 688 F.2d at 124.
25
The Government's prosecutorial theory on this point is
that Antico, by failing to disclose his personal interest in a
matter over which he had discretionary decision-making
authority, deprived the public of its right to disinterested
decision-making and of its right to full disclosure of his
potential motivation. The scheme to defraud involved
Antico's setting Ricciardi up as an expediter, then preparing
and approving her permits. Ricciardi received a fee for her
"services" which, in turn, substituted for Antico's obligation
to pay child support. The Government contends that the
requisite intent to defraud was met, in light of this scheme,
by Antico's failure to disclose the nature of his personal
interest in Ricciardi's business and to recuse himself from
reviewing approvals submitted by her. Finally, the
Government contends, and Antico does not dispute on
appeal, that interstate phone calls and mailings were made
in furtherance of the scheme.
Antico argues that while "discharge of debt" of a family
member may pose a conflict of interest, his "nepotistic
gifting" to his girlfriend does not rise to an actionable
deprivation of his honest services under the mail or wire
fraud statutes. He denies that he had a financial interest in
Ricciardi's business at the time alleged in the indictment
because his debt, if any, had mathematically been
discharged at the time of the indictment. With respect to
his intent to defraud, Antico argues that he never actively
concealed from his colleagues at L&I either that he had
children with Ricciardi or that he set her up in the
expediting business. Thus a requisite element of fraud is
missing. We address each of these contentions in turn.
Honest services fraud typically occurs in two scenarios:
(1) bribery, where a legislator was paid for a particular
decision or action; or (2) failure to disclose a conflict of
interest resulting in personal gain. Woodward , 149 F.3d at
54-55. This duty to disclose a conflict of interest arises in
the private sector from the fiduciary relationship between
an employer and an employee. In the public sector, the
duty is oftentimes prescribed by state and local ethics laws.
In the latter context,
[a] public official has an affirmative duty to disclose
material information to the public employer. See
26
Silvano, 812 F.2d at 759. When an official fails to
disclose a personal interest in a matter over which she
has decision-making power, the public is deprived of
its right either to disinterested decision making itself
or, as the case may be, to full disclosure as to the
official's potential motivation behind an official act. See
id. (upholding conviction of city fiduciary who failed to
disclose material information about unnecessary
spending of city money for secret enrichment of
fiduciary's friend). Thus, undisclosed, biased decision
making for personal gain, whether or not tangible loss
to the public is shown, constitutes a deprivation of
honest services.
Sawyer, 85 F.3d at 724.
We agree with the Government that Antico's duty to
disclose material information with respect to his conflict of
interest with Ricciardi arose from state and local law.
Antico disagrees, arguing that the state and local conflict of
interest laws that governed his conduct while at L&I
contained a loophole for "girlfriends." 65 Pa. C.S.A. S 402
(". . . for the private pecuniary benefit of himself, a member
of his immediate family or a business with which he or a
member of his immediate family is associated"); Philadelphia
Code S 20-607 ("nor shall any financial interest be held by
a parent, spouse, child, brother, sister or like relative-in-
law, or by any person, firm, partnership, corporation,
business association, trustee or straw party for his or her
benefit") (emphases added). We read the emphasized
portions of these statutes to include Antico's scheme with
Ricciardi. The expediting scheme with Ricciardi, while
certainly benefitting her (and at least indirectly the two
children she had with Antico), also provided a tangible
benefit to Antico: it fulfilled his ongoing child support
obligation and served as consideration in exchange for
Ricciardi's forgoing court proceedings against him. 19
_________________________________________________________________
19. Antico's mathematical contention that his child support obligation
disappeared after Ricciardi had earned roughly $32,000 (based on the
court-ordered payment in the 1980s) ignores the ongoing and dynamic
nature of his obligation, as well as the fact that he also purchased
Ricciardi's agreement not to pursue court sanctions against him as long
27
Therefore, Antico owed the City a duty to disclose this
financial arrangement, the failure of which constitutes
honest services fraud.
Antico correctly notes that "the broad scope of the mail
fraud statute . . . does not encompass every instance of
official misconduct that results in the official's personal
gain." Czubinski, 106 F.3d at 1076 (citing Sawyer, 85 F.3d
at 725) (reversing conviction of IRS employee on mail fraud
charges for unauthorized browsing of taxpayer files absent
a showing of impartial performance of public servant's
duties); United States v. Holzer, 816 F.2d 304, 309 (7th Cir.
1987) ("We do agree that the words `scheme or artifice to
defraud' don't reach everything that might strike a court as
unethical conduct or sharp dealing"). However, even if we
were to read these conflict of interest provisions as
restrictively as Antico suggests, we find that his conduct
violated the fiduciary relationship between a public servant
charged with disinterested decision-making and the public
he serves. Id. at 307 ("Fraud in its elementary common law
sense of deceit -- and this is one of the meanings that
fraud bears in the [mail fraud] statute . . .-- includes the
deliberate concealment of material information in a setting
of fiduciary obligation. A public official is a fiduciary toward
the public . . . ." ). Duties to disclose material information
affecting an official's impartial decision-making and to
recuse himself exist within this fiduciary relationship
regardless of a state or local law codifying a conflict of
interest. Id. at 309; Silvano, 812 F.2d at 759-60. Antico's
exercise of his discretionary authority in both filling out
and approving the applications submitted by Ricciardi
without disclosing his interest in the scheme goes beyond
the mere ministerial function excused in Czubinski and into
the realm of interested decision-making. When coupled with
the duty imposed by state and local conflict of interest
_________________________________________________________________
as she cared for his children. Moreover, as we state later in this
discussion, even if we were to disregard the child support arrangement,
Antico's conduct in filling out the applications and then personally
approving them for the financial benefit of Ricciardi deprives the public
of the disinterested decision-making of one of its public servants, a
breach of Antico's fiduciary duty to the citizens of Philadelphia.
28
laws, Antico's failures to disclose his financial business
arrangement with Ricciardi and to recuse himself from
taking action with respect to her applications fall within the
scope of honest services fraud.
Antico also contends that "absent deceit, concealment,
demonstrable public harm or other active fraud," his
conviction for wire fraud cannot stand. We disagree. In the
context of honest services fraud, where "undisclosed, biased
decisionmaking for personal gain, whether or not tangible
loss to the public is shown, constitutes a deprivation of
honest services," Sawyer, 85 F.3d at 724, an active fraud or
deceit is not necessary.
[T]he courts that have accepted the notion that a
deprivation of intangible rights is within the statute[ ]
recognize that an active misrepresentation is not
necessary. Instead, the prosecution need prove only a
recognizable scheme formed with intent to defraud
regardless of how that intent manifests itself in
execution. For example, a public official engaged in
bribery by mail need not actively make any
misrepresentations in order to violate section 1341.
Frankel, 721 F.2d at 920-21. "The legal meaning of `fraud'
is not limited to deceit or misrepresentation; it includes
overreaching, undue influence, and other forms of
misconduct." Holzer, 816 F.2d at 309. Nor is a showing of
public harm required. Sawyer, 85 F.3d at 724 (". . .
whether or not tangible loss to the public is shown");
Holzer, 816 F.2d at 308 ("It is irrelevant that . . . [Holzer's]
conduct caused no demonstrable loss either to a litigant or
to the public at large."); Silvano, 812 F.2d at 760 ("It is
immaterial whether [the defendant] personally profited from
the scheme or whether the City suffered a financial loss
from it.") (citing United States v. Lemm, 680 F.2d 1193,
1205 (8th Cir. 1982)); United States v. Mandel , 591 F.2d
1347, 1358 (4th Cir. 1979) (approving the prosecution of
allegedly corrupt politicians who did not deprive the citizens
of anything of economic value); United States v. Keane, 522
F.2d 534 (7th Cir. 1975) (same).
In this case, Antico's failure to disclose his financial
interest in the success of Ricciardi's expediting business
29
and his failure to recuse himself from approving the permit
applications he filled out constitute "deceit" for purposes of
the mail fraud statute. "[A]n official's intentional violation of
the duty to disclose provides the requisite `deceit'." Sawyer,
85 F.3d at 732 (citing Silvano, 812 F.2d at 760). The fact
that Antico did not conceal his relationship with Ricciardi
from his co-workers does not vindicate his failure to
disclose to his supervisors the conflict arising from their
financial arrangement nor his failure to recuse himself from
acting on the permit applications she submitted.
It also does not preclude a jury from finding Antico
possessed the requisite intent to defraud the citizens of
Philadelphia. Woodward, 149 F.3d at 62 ("Woodward's
intent is . . . demonstrated by his failure to disclose his
conflict of interest although he was required to do so."). The
fact that Antico never reported any conflict of interest to his
superiors while at L&I, despite his knowledge of the state
and local conflict of interest laws, supports the jury's
finding of intent to deceive necessary for a wire fraud
conviction. In fact, Antico continued the fraudulent scheme
even after L&I Commissioner Levin specifically instructed
him in 1993 to have no involvement in approving Ricciardi's
permit applications. Despite Levin's instructions, Antico
urged Ricciardi to submit permits on behalf of the
Philadelphia Sign Company, which he approved. Antico also
prepared the permit application for Wizzards at this time on
Ricciardi's behalf and prepared the appeal before the ZBA,
signing Ricciardi's name. Finally, Antico told the owner of
the Beach Club to use Ricciardi as his expediter,
affirmatively promoting this scheme despite the warning of
the conflict of interest.
In sum, when we view this evidence in the light most
favorable to the Government, we find that it has met its
burden of proof. There was clearly sufficient legal support
and factual evidence, both direct and circumstantial, on
which a reasonable jury could rely to reach its verdicts.
2. Materiality Instruction
According to Antico, the District Court erred by omitting
"materiality" from its jury instruction on the mail fraud
racketeering acts. He relies on the Supreme Court's
30
declaration in Neder v. United States, 527 U.S. 1 (1999),
that "materiality of falsehood is an element of the federal
mail fraud, wire fraud, and bank fraud statutes." Id. at 25.
This Court considers the totality of the jury instructions to
determine "whether, viewed in light of the evidence, the
charge as a whole fairly and adequately submits the issues
in the case to the jury." United States v. Thayer, 201 F.3d
214, 221 (3d Cir. 1999). Because Antico did not object to
the District Court's treatment of materiality, we only review
it for plain error. Johnson v. United States, 520 U.S. 461,
465-67 (1997). Under Rule 52(b) of the Federal Rules of
Criminal Procedure, "[p]lain errors or defects affecting
substantial rights may be noticed although they were not
brought to the attention of the court." Fed. R. Crim P.
52(b). The Supreme Court in United States v. Olano, 507
U.S. 725 (1993), articulated the limitations on appellate
review under Rule 52(b): "The first limitation on appellate
authority under Rule 52(b) is that there indeed be an
`error.' " Id. at 732. The second is that the error be "plain"
and the third is that the error "affect substantial rights." Id.
at 734. Even if these requirements are met, the court
should not exercise its discretion unless the error"seriously
affect[s] the fairness, integrity or public reputation of
judicial proceedings." Id. at 736.
In light of the Supreme Court's holding in Neder , Antico
argues that he is entitled to a new trial because, after the
District Court instructed the jury on materiality with
respect to the wire fraud counts and racketeering acts
(Counts Eleven through Eighteen), it did not re-instruct the
jury on materiality with respect to the mail fraud
racketeering acts (Racketeering Acts 14A-D). In addition,
Antico submits that the District Court should have
specifically instructed the jury that materiality must be
proven beyond a reasonable doubt. The question is whether
this failure to re-instruct the jury on materiality when
giving the mail fraud instruction constitutes plain error.
The District Court's instructions were carefully crafted
and lengthy, spanning over 100 pages. With respect to the
wire fraud counts, the Court began by defining a scheme to
defraud in the context of wire fraud. It explained that the
Government must prove beyond a reasonable doubt that
31
there was a "scheme or artifice to defraud," and defined a
scheme to defraud as "any plan, device or course of action
to obtain money or property or the intangible right of
honest services by means of false or fraudulent pretenses,
representations or promises reasonably calculated to
deceive persons of average prudence." In describing "false
and fraudulent representations," the District Court stated:
"The false or fraudulent representation or failure to
disclose[ ] must relate to a material fact or matter. A
material fact is one which would reasonably be expected to
be of concern to a reasonable and prudent person in relying
upon the representation or statement in making a
decision." Clearly the wire fraud instruction was adequate.20
However, when discussing the racketeering acts of mail
fraud under the RICO count, the Court did not instruct on
false representations and materiality.
Preliminarily, we find Antico's case to be unlike United
States v. Gaudin, 515 U.S. 506 (1995), where the Court
entirely failed to present the issue of materiality to the jury.
In this case, both the wire fraud and the mail fraud
offenses derived from the same scheme between Antico and
Ricciardi. The material information that was not disclosed
by Antico was the same in both counts. Therefore, a
reasonable jury, instructed to consider materiality with
respect to this scheme, would logically do so in the context
of both wire fraud and mail fraud. See United States v.
Winstead, 74 F.3d 1313, 1319 (D.C. Cir. 1996) (concluding
that where only one fraudulent scheme was at issue with
respect to both mail fraud and false statement charges, the
court's instruction to the jury that materiality was an
element of the mail fraud charge ensured that the jury
would have found this element existed with respect to the
_________________________________________________________________
20. Antico takes issue with the wire fraud jury charge to say that
"materiality" should have been instructed"beyond a reasonable doubt" in
the same sentence. Because the District Court defined materiality as an
element of the scheme to defraud, and explained that the scheme needed
to be proven beyond a reasonable doubt, we conclude that the jury
charge was sufficient in this respect. He also questions whether
materiality should be subject to a "reasonable person" test in the
circumstances. Neder instructs us that the reasonable person test is not
error. 527 U.S. at 22.
32
false statement charge had the jury been properly
instructed).
The District Court's instructions clearly informed the jury
that, by definition, "a false or fraudulent representation or
failure to disclose[ ] must relate to a material fact or
matter." By convicting Antico of wire fraud, the jury found
that Antico's failure to disclose was material, and"it is
beyond doubt that the members of the jury would have
reached the same conclusion had they explicitly considered
materiality as part of their deliberations" on the mail fraud
racketeering acts stemming from the same conduct.
Winstead, 74 F.3d at 1321. Therefore, the District Court's
jury instructions on materiality were not erroneous.
C. Scheme to Defraud Philadelphia of Property --
McCausland's Zoning Permits
In light of the Supreme Court's decision in Cleveland v.
United States, 531 U.S. 12 (2000), the Government agrees
that Counts Seventeen and Eighteen should be remanded
to the District Court for entry of judgments of acquittal. In
Cleveland, the Court reversed a mail fraud conviction of a
defendant who obtained a video poker license from the
state by making false representations on his license
application. The Court held that an unissued video poker
license was not property within the meaning of the mail
fraud statute. Id. at 15.
Counts Seventeen and Eighteen charged that
while Antico was working as a private expediter
following his retirement from L&I, he obtained a
zoning and/or use registration permit for Maureen
McCausland's putative prostitution business. He
obtained that permit by falsely stating on the permit
application that McCausland was going to operate a
"modeling studio/physical fitness business" in
Philadelphia.
The prosecution of Antico on these two counts was
premised on a zoning permit being property within the
meaning of S 1343. Appellee's Supp. Br. at 2. Because the
Supreme Court's ruling negates the Government's premise,
we reverse Antico's conviction on these counts.
33
D. Sentencing Challenges
Antico alleges that the District Court erred by (1)
enhancing his offense level by four levels because it
determined he was an organizer or leader of criminal
activity that involved five or more participants or was
otherwise extensive, and (2) inflating the loss attributable to
the Ricciardi scheme to defraud to over $700,000, the
amount earned by Ricciardi in her expediting business. We
review for clear error a District Court's factual
determinations underlying the application of the Sentencing
Guidelines. United States v. Helbling, 209 F.3d 226, 242-43
(3d Cir. 2000) (citing United States v. Ortiz , 878 F.2d 125,
126-27 (3d Cir. 1989)). Our review of the District Court's
legal interpretation of the Sentencing Guidelines is plenary.
United States v. Yeaman, 194 F.3d 442, 456 (3d Cir. 1999).
Once these tests are satisfied, we owe deference to the
District Court's application of the Sentencing Guidelines to
those facts, as required by 18 U.S.C. S 3742(e). Helbling,
209 F.3d at 243.
The District Court grouped Antico's convictions for
purpose of sentencing, placing the extortion activity in one
group, U.S. Sentencing Guidelines Manual S 2(c)(1.1)
(1999), and the mail and wire fraud activity in a second
group, U.S. Sentencing Guidelines Manual S 2(c)(1.7). It
then calculated the offense levels for each group. The
extortion group led to an offense level of twenty-four and a
sentence of sixty-three months, while the fraud group led to
an offense level of twenty and a sentence of sixty months
(to run concurrently). The District Court used the adjusted
offense level of the highest group, extortion, to determine
the sentencing range. Therefore, the ultimate sentence
imposed by the District Court, sixty-three months, was not
based on the amount of loss caused by the fraud activities.
Antico's objection to his leading role adjustment pertains to
the first group of extortion activities whereas his objection
to the loss calculation pertains to the second group of fraud
activities. The Government contends that the District
Court's use of the extortion group to determine Antico's
ultimate sentence renders Antico's objection to the loss
calculation moot.
34
1. Organizer or Leader of a Criminal Activity of Five or
More Participants or Otherwise Extensive Criminal
Activity
We review for clear error the District Court's factual
determinations that Antico was an organizer or leader and
that his criminal activity involved five or more participants.
Helbling, 209 F.3d at 242-43.In simple term s, we will
vacate "only if we are left with a definite and firm conviction
that a mistake has been made." United States v. Dent, 149
F.3d 180, 189 (3d Cir. 1998). With respect to the extortion
offenses, the District Court adjusted Antico's base offense
level upward four levels for his aggravating role. Under
S 3B1.1 of the Sentencing Guidelines, a District Court
adjusts the offense level based on defendant's role as
follows:
S 3B1.1. AGGRAVATING ROLE
Based on the defendant's role in the offense, increase
the offense level as follows:
(a) If the defendant was an organizer or leader of a
criminal activity that involved five or more participants
or was otherwise extensive, increase by 4 levels.
U.S. Sentencing Guidelines Manual S 3B1.1."Participant" is
defined as one "who is criminally responsible for the
commission of the offense, but need not have been
convicted." U.S. Sentencing Guidelines ManualS 3B1.1,
cmt. n.1. Application note 3 adds gloss to what the District
Court should consider when determining the defendant's
role:
In assessing whether an organization is "otherwise
extensive," all persons involved during the course of
the entire offense are to be considered. Thus, a fraud
that involved only three participants but used the
unknowing services of many outsiders could be
considered extensive.
U.S. Sentencing Guidelines Manual S 3B1.1, cmt. n.3.
We agree with the District Court's conclusion that Antico
was an organizer or leader of criminal activity. Application
note 3 to S 3B1.1 identifies relevant factors in this
determination:
35
Factors the court should consider include the exercise
of decision making authority, the nature of the
participation in the commission of the offense, the
recruitment of accomplices, the claimed right to a
larger share of the fruits of the crime, the degree of
participation in planning or organizing the offense, the
nature and scope of the illegal activity, and the degree
of control and authority exercised over others.
Id. With respect to Meehan and Antico, Jr., the evidence
supports the conclusion that he played a decision-making
role in their activities with respect to extorting Wizzards
and Pin Ups. Antico also supervised the Business
Regulatory Unit at L&I, the unit charged with enforcing the
adult cabaret ordinances. When Wizzards, Pin Ups and
Teazers were shut down, Antico made the decisions and
issued the orders. The District Court's findings in this
regard are not clearly erroneous.
Under the "five or more participants" prong ofS 3B1.1,
the District Court counted the defendant and the
unindicted co-conspirators of Antico, Jr. and Meehan
because of their involvement in the scheme to extort
Wizzards and PinUps of a financial interest in the
businesses. The District Court also counted Maureen
McCausland and Barbara Williams because of their
extortion payments to Antico to benefit their prostitution
business and expediting business, respectively. The District
Court also considered "at least some of the other victims
and all of the unknowing persons at the Department of
Licenses and Inspections . . . in determining whether there
were five or more participants." Alternatively, under the
"otherwise extensive" prong of S 3B1.1, the District Court
ruled that "there were the functional equivalent of five
participants by reason of the use of . . . L and I personnel"
(citing to Helbling, 209 F.3d at 248 ("[T]he court must
determine the extent to which the services of each
individual, non-participant, were peculiar and necessary to
the criminal scheme . . . [and] then consider whether the
sum of the participants and countable non-participants is
the `functional equivalent' of five participants.")).21
_________________________________________________________________
21. The District Court apparently imported the"functional equivalency"
test from the "otherwise extensive" prong into the "five or more
36
We take issue with the District Court's inclusion of
Maureen McCausland and Barbara Williams, victims of
Antico's extortion schemes, in the mix of five participants.
Extortion victims, whether they operate legitimate or
illegitimate businesses, are still victims. As this case
demonstrates, owners of illegitimate businesses such as
Maureen McCausland may be particularly vulnerable to an
L&I official's abuse of power, but they are no more
criminally responsible for the offense of extortion than
legitimate business owners. The same holds true for
expediters. The fact that their legitimate role in filling out
and hastening permit applications to L&I was corrupted by
Antico does not make them criminally responsible for being
extorted by him. In this respect, the District Court's
inclusion of both Maureen McCausland and Barbara
Williams within the definition of participant is clearly
erroneous. By its definition, only Antico, Meehan, and
Antico, Jr. may be counted.
Alternatively, the District Court ruled that Antico's
criminal activity met the "otherwise extensive" prong of
S 3B1.1, justifying a four level increase. With respect to
what constitutes "otherwise extensive," we caution that "not
every individual tangentially involved in the criminal
activity can fairly be considered in the analysis. The
purpose of the provision would rarely be achieved by
counting the unknowing services of some actors in a
criminal scenario, a taxicab driver or bank teller, for
instance." Helbling, 209 F.3d at 247 (citation omitted). To
guard against such a broad brush, we adopted in Helbling
the three-step test from United States v. Carrozzella, 105
F.3d 796 (2d. Cir. 1997), to help determine whether the
criminal activity is "otherwise extensive."
A sentencing court must first separate out the
"participants" as defined by Application Note 1 from
other individuals, non-participants, who were involved
_________________________________________________________________
participants" determination by counting all of the unknowing persons at
L&I. We note that the "five or more participants," by definition, must
somehow be responsible criminally for the offense. Therefore, the
unknowing L&I officials are more appropriately considered in the
"otherwise extensive" determination.
37
in the criminal activity. . . . The defendant may be
considered as one of the participants. The court must
next determine whether the defendant used each non-
participants' services with specific criminal intent.
Third, the court must determine the extent to which
the services of each individual, non-participant, were
peculiar and necessary to the criminal scheme.
Helbling, 209 F.3d at 247-48 (citations omitted).
We add to this rule another consideration. The language
of S 3B1.1 requires the court to consider the defendant's
leadership role with respect to the particular offense
charged. Although "all persons involved during the course
of the entire offense are to be considered," this does not
sanction a court taking the activities of non-participants
from unrelated schemes and grouping them together to
reach the "functional equivalent" of five persons. The
actions or services of non-participants must all relate to the
common criminal activity or scheme -- and to the offense
charged. A sentencing court should take particular care in
situations where like offenses have been grouped together
for sentencing purposes, as was done in this case.
Counting Maureen McCausland and Barbara Williams
among the "functional equivalent" of five participants was
clearly erroneous for this reason as well.
In light of our ruling that victims may not be considered
as participants, it is unclear from the record whether the
District Court properly completed the "otherwise extensive"
analysis. Assuming that Antico, Meehan, and Antico, Jr.,
were participants, the District Court next needed to
determine whether Antico used each non-participant L&I
officials' services with specific criminal intent and as part of
a single criminal scheme. The District Court did not make
explicit findings in this regard. Citing step three from
Helbling, the District Court found that the services of those
L&I officials mentioned in the Government's submissions --
Thomas Simmonds, Gary Adams, Steve Gibbs, Michael
Shaughnessy, Dominic Verde, and Gerald Richards-- who
were used by Antico to shut down Wizzards and Pin Ups,
met the "peculiar and necessary" test. However, based on
the record before us, we cannot say that the District Court
undertook the proper legal and factual analysis when it
38
made its "functional equivalency" determination. We
therefore vacate the sentence on the extortion charges and
remand for re-sentencing in accordance with Helbling and
this opinion.
2. Loss Calculation
Antico also challenges the District Court's loss
calculation on the mail and wire fraud offenses. In
sentencing Antico on this group of offenses, the District
Court employed S 2(c)(1.7)(b)(1)(A) of the Sentencing
Guidelines, which reads:
(b) Specific Offense Characteristic
(1) (If more than one applies, use the greater):
(A) If the loss to the government, or the value of
anything obtained or to be obtained by a public
official or others acting with a public official,
whichever is greater, exceeded $2,000, increase by
the corresponding number of levels from the table
in S 2F1.1 (Fraud and Deceit).
The Commentary to S 2F1.1 defines loss as"the value of the
money, property, or services unlawfully taken." U.S.
Sentencing Guidelines Manual S 2F1.1, cmt. n.7. The loss
calculation need not be precise; the Sentencing Guidelines
require only a "reasonable estimate" based on the
information available. Id. at n.8. Generally, a defendant's
gain may provide a reasonable approximation of a victim's
loss and may be used when more precise means of
measuring loss are unavailable in determining the sentence
dealing with offenses involving fraud or deceit. Id.; see
United States v. Anderson, 45 F.3d 217 (7th Cir. 1995).
The District Court used the amount of $770,284 to
adjust the offense level from ten to twenty in accordance
with the table in S 2F1.1. The question presented on appeal
is whether the District Court's loss calculation, based on
the entire gain to another "acting with the public official" in
honest services fraud, is clearly erroneous. The victim in
this case, the citizenry of Philadelphia, lost something
intangible: the honest services of one of its public officers.
How should this loss be valued? Antico objects to
calculating the loss from the gross receipts to Ricciardi in
39
her expediting business. Instead, he argues that the loss
should be at most the estimated $31,200 child support
obligation that was the motivation behind his scheme to
defraud, or arguably zero in light of our decisions in United
States v. Maurello, 76 F.3d 1304 (3d Cir. 1996), and United
States v. Hayes, 242 F.3d 114 (3d Cir. 2001), that actual
loss or actual harm, as opposed to defendant's gain, was
the appropriate basis for measuring the loss.
In Maurello, this Court considered "whether money paid
by clients for apparently satisfactory legal services
performed by an unlicensed attorney is considered part of
the `loss' from the attorney's fraudulent acts for purposes of
S 2F1.1." 76 F.3d at 1308. "To the extent that the
unauthorized services provided by defendant have not
harmed their recipients, but to the contrary have benefitted
them, we conclude that defendant's base offense level
should not be enhanced." Id. at 1312. While not an exact
fit, Maurello seems to reject the notion that what Ricciardi's
clients paid her for her services, with which they were
satisfied, is the appropriate measure of loss.
Antico also cites to United States v. Hayes, wherein we
approved the Maurello approach to loss calculation. The
issue in Hayes was "whether the total salary paid to Hayes
in all of her fraudulently obtained employment should have
been assessed as the amount of loss . . . or whether, under
the rule of Maurello [citation omitted], the court should
have attempted to determine whether any of the services
performed by defendant had value." Hayes, 242 F.3d at
115. We held that Maurello controlled and vacated and
remanded for resentencing "[b]ecause, had the District
Court applied Maurello, it might have fixed a lower offense
level resulting in a lesser sentence than the year and a day
sentence imposed." Id.
Antico argues that the District Court should have applied
the Maurello/Hayes logic in this case. Inasmuch as none of
Ricciardi's clients were harmed, he insists the loss should
be zero and no enhancement be applied. We reject Antico's
reliance on Maurello and Hayes, which did not decide the
issue of loss from honest services fraud, in favor of the
clear outcome mandated by the Sentencing Guidelines in
this case. "If the loss to the government, or the value of
40
anything obtained or to be obtained by a public official or
others acting with a public official, whichever is greater,
exceeded $2,000, increase by the corresponding number of
levels from the table in S 2F1.1 (Fraud and Deceit)." U. S.
Sentencing Guidelines Manual S 2(c)(1.7)(b)(1)(A). The
amount Ricciardi received -- by "acting with the public
official" -- is the correct measure of loss under this section.
Therefore, the District Court's calculation of the loss at
$770,284 was not clearly erroneous.22
In summary, we vacate the sentence imposed by the
District Court in this case and remand for three reasons.
First, the District Court needs to determine whether our
reversal of conviction on Counts Seventeen and Eighteen
has any effect on its decision to sentence within the
sentencing range on the fraud grouping of offenses. Second,
we vacate and remand for the District Court to conduct the
necessary inquiry with respect to Antico's aggravating role
in the extortion scheme, as set forth in United States v.
Helbling, 209 F.3d 226 (3d Cir. 2000), and this opinion.
Finally, the District Court must reconsider its decision to
sentence Antico based on the extortion grouping of offenses
after recalculating the sentence for each of the wire fraud
group and the extortion group in accordance with this
opinion.
* * * * *
Accordingly, we affirm Antico's convictions on Count One
(RICO),23 Counts Two through Ten (extortion), and Counts
_________________________________________________________________
22. The Government contends that we need not reach the question
because the ultimate sentence was based on the higher offense level
generated by the extortion grouping, and did not rest on the lesser
offense level under the fraud grouping. Thus, even if the District Court
calculated the loss as something less, the ultimate sentence of 63
months would have been imposed anyway based on the higher extortion
sentence. We have addressed the fraud loss calculation because our
remand to the District Court for reconsideration of Antico's sentence in
light of our reversal on Counts 17 and 18 (wire fraud) and our ruling on
Antico's aggravating role in the extortion scheme may affect the grouping
chosen by the District Court in its ultimate sentence.
23. Antico's conviction on the RICO Count is unaffected by our reversal
of Counts 17 and 18 because the McCausland wire fraud scheme was
not charged as predicate racketeering acts.
41
Eleven through Sixteen (wire fraud). We reverse the
conviction on Counts Seventeen and Eighteen (wire fraud).
Finally, we vacate Antico's sentence and remand to the
District Court for resentencing in accordance with this
opinion.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
42