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UNITED STATES v. D'ALESSIO

June 2, 1993

UNITED STATES OF AMERICA
v.
THOMAS J. D'ALESSIO and JOSEPH THOR, Defendants.



The opinion of the court was delivered by: H. LEE SAROKIN

 Sarokin, District Judge

 Introduction

 One would consider it a given that the solicitation of private gifts by a public official would be a crime; and certainly that a misrepresentation as to the purpose of those gifts would make it moreso. There can be little doubt that soliciting funds purportedly for campaign purposes with the intent of using them personally is a fraud -- and using the mails for that purpose is mail fraud. But surprisingly the first premise is not so clear. Apparently, there are circumstances in New Jersey under which neither the solicitation nor the receipt of a gift by a public official is a crime.

 The defendants in this matter, Thomas J. D'Alessio and Joseph Thor, have moved to dismiss counts one through five of the indictment against them, in part because the grand jury was advised by the government that defendant D'Alessio, as a county sheriff, was prohibited by court rule from soliciting and receiving personal gifts. It is unclear (but probably doubtful) that the rule applies to sheriffs. The uncertainty renders it an inappropriate basis for criminal charges. Although there are other independent bases to sustain the charges, the court cannot ascertain the extent to which reliance on the rule motivated the grand jury's decision to indict these defendants. The court cannot speculate as to what the grand jury would have done absent reliance on the subject rule. That answer can only be derived by resubmission of the matter to a grand jury, if the United States Attorney chooses to do so, without reference to or reliance upon the rule.

 By this decision, the court makes no finding and reaches no conclusion as to the lawfulness of the conduct charged. Rather, the court concludes only that the court rule presented to the grand jury was not clearly imposed upon defendant D'Alessio so as to sufficiently inform him that its violation would provide the basis for criminal charges. Therefore, the inclusion of this rule in the grand jury's consideration and indictment is improper as a matter of law.

 Defendants have also moved to dismiss count six of the indictment on the basis that it incorporates a regulation which was improperly promulgated by a New Jersey administrative body. The regulation in question prohibits the use of political funds for private purposes. Until recently, the legislature charged with the authority and responsibility for enacting such a prohibition refused and failed to do so, while the agency which promulgated the regulation probably lacked the authority to do so.

 If there are to be restrictions on gifts to public officials and the use of campaign funds, they should be enacted with precision by those who have the obligation and power to do so. Otherwise, the acceptance of such gifts and the use of such money, no matter how offensive to common sense and public morality, cannot constitute a crime punishable by imprisonment.

 While ignorance of the law ordinarily is not an excuse or defense to criminal charges, one should be able to ascertain the law through reasonable inquiry and determine its scope and applicability. Persons should not be subject to criminal charges and potential punishment based upon rules and regulations which are ambiguous in their content or doubtful in their legitimacy. The court makes no determination as to the defendants' guilt or innocence or the propriety of their conduct. It merely imposes the traditional requirement upon the Government that, before a person can be charged with a crime, he or she is entitled to fair warning that the conduct which forms the basis of an indictment is prohibited, and that the source of such prohibition has the authority to enact it.

 Background

 Defendant Thomas J. D'Alessio ("D'Alessio") served as Sheriff of Essex County in New Jersey from January 1, 1983 to November of 1990. On November 6, 1990, he was elected to the position of County Executive for the County of Essex, New Jersey, which he holds to date. Defendant Joseph Thor ("Thor") is an attorney admitted to practice in the State of New Jersey. He has served as the treasurer of fundraising events sponsored on behalf of D'Alessio since 1982 and continuing to the present date. He specifically served as Campaign Treasurer for D'Alessio's campaign to become Essex County Executive. Thor also provided legal services to D'Alessio while he was in office. James D'Alessio, who is involved in this case as an unindicted coschemer, is D'Alessio's father.

 On October 7, 1992, a federal grand jury sitting in Newark, New Jersey returned a six count indictment against D'Alessio and Thor. The first three counts of the indictment charge defendants with mail fraud, in violation of 18 U.S.C. §§ 1341 and 1342. The indictment states that D'Alessio and Thor arranged for a dinner to be held in honor of D'Alessio on March 29, 1989, and that between January 31, 1989 and March 29, 1989, D'Alessio and Thor mailed invitations and tickets which sought a $ 100 contribution per ticket to citizens, residents, and taxpayers of Essex County and elsewhere. More specifically, count one charges that defendants mailed thirty invitations and tickets to companies which thereafter contributed; count two charges that defendants mailed eleven invitations and tickets to attorneys who later contributed; and count three charges that defendants mailed sixteen invitations and tickets to other taxpayers, citizens, and residents of Essex County and elsewhere who later contributed.

 Counts four and five charge defendants with money laundering and aiding and abetting, in violation of 18 U.S.C. § 1956(a)(1)(B)(i) and 18 U.S.C. § 2. Count four states that on December 28, 1988, defendant Thor, James D'Alessio and others, acting through a collective partnership called the "Rossmore Place Associates," purchased certain real property in Belleville, New Jersey known as the "Rossmore Property." Count four asserts that this purchase was funded in part by a $ 100,000 loan obtained by James D'Alessio from the Broad National Bank in Newark, New Jersey ("the Rossmore Place Loan"), and that D'Alessio was the guarantor for this transaction. Count four alleges that on April 29, 1989, under the guise of making a loan, Thor issued a check to James D'Alessio in the amount of $ 50,000 from the "Friends of Tom D'Alessio" bank account and that this money was thereafter used to reduce the Rossmore Place Loan. Count four charges that this transaction was designed in whole or in part to conceal and disguise the nature, source, ownership and control of the proceeds from the March 1989 fundraiser.

 Count five charges that on August 11, 1989, D'Alessio and James D'Alessio, acting through a joint partnership called the "Hilton Street Associates," purchased an interest in Gloria Lane Industrial Partners, Ltd., a partnership with real estate holdings in Fairfield, New Jersey. Count five asserts that this purchase was funded in part by a "loan" in the form of a $ 25,000 check given to James D'Alessio on July 25, 1989 from the "Friends of Tom D'Alessio" bank account by defendant Thor. *fn1" Count five charges that this "loan" was designed in whole or in part to conceal and disguise the nature, source, ownership and control of the proceeds from the March 1989 fundraiser. Both counts four and five seek forfeiture of funds and assets owned by D'Alessio, Thor, and James D'Alessio, including currency in the "Friends of Tom D'Alessio" bank account and property held by Rossmore Place Associates and Gloria Lane Industrial Partners, Ltd.

 The last count of the indictment was superseded and amended by an indictment returned February 3, 1993. It is unrelated to the March 1989 fundraiser. Count six charges defendants with mail fraud, in violation of 18 U.S.C. §§ 1341 and 1342. Count six alleges that following D'Alessio's November 1990 election to the office of County Executive, he vacationed in Aruba for seven days with a friend and used campaign funds to pay for his vacation expenses. Count six states that in January of 1991, Thor caused a check for $ 4,500.46 to be drawn from D'Alessio's County Executive campaign fund and sent to the American Express Company as payment, in part, of D'Alessio's vacation expenses. Count six also alleges that defendants falsely reported this disbursement to the New Jersey Election Law Enforcement Commission as a "car rental" expense. Count six charges that these actions constituted a scheme to obtain, divert and embezzle money and other things of value from D'Alessio's County Executive campaign fund; to convert such money to D'Alessio's personal use, enjoyment, and benefit; and to conceal such diversion and embezzlement.

 Defendants made their initial appearance before this court on October 20, 1992. The court set bail and issued a discovery order. Defendants now move to dismiss all counts of the indictment.

 I. Defendants' Motion to Dismiss Counts One Through Five

 A. The Indictment

 Defendants' attack on the indictment centers first on the facial validity of counts one through three and the sufficiency of the evidence supporting them. A close examination of the exact wording of these counts is necessary to the court's analysis. Counts one through three are collectively stated with the exception noted previously that each count refers to a different group of invitees. The first paragraph of these counts identifies the defendants and sets forth in two subparagraphs the "Duties of a Sheriff." Specifically, paragraphs 1(e) and 1(f) state as follows:

 
e. As the Sheriff of Essex County, the defendant Thomas D'Alessio, had a duty, imposed by New Jersey State Statute 40A:9-96 and other laws and regulations, to "faithfully, impartially and justly" perform all the duties of his office, including, among other things, to serve as an officer of the Courts of Essex County, New Jersey in the assignment and supervision of Court personnel and attendants, and in the service and execution of writs, warrants and other court process. *fn2"
 
f. As the sheriff of Essex County and an officer of its courts, the defendant Thomas J. D'Alessio, also had a duty, imposed by Rule 1:16-2 of the Rules Governing the Courts of the state of New Jersey, not to accept any personal gratuity or personal gift either directly or indirectly from any attorney or other person who has had or is likely to have any professional or official transaction with the Sheriff in his capacity as an officer of the courts of Essex County. The Rules, however, do not preclude the sheriff from soliciting and accepting political and campaign contributions. *fn3"

 Paragraphs 2 and 3 of the indictment then proceed to relate the central basis for the mail fraud charges. These paragraphs state as follows:

 
2. From at least October 1988 and continuing through the date of the filing of this Indictment, in Essex County in the District of New Jersey and elsewhere, the defendants Thomas J. D'Alessio and Joseph Thor knowingly, willfully and unlawfully did devise and intend to devise a scheme and artifice to defraud:
 
a. contributors to a fundraising event sponsored by the defendants of money and property; and
 
b. taxpayers, citizens and residents of Essex County and elsewhere, of their right to the honest and faithful services of their elected officials, including, specifically, Sheriffs,
 
by means of false and fraudulent pretenses, representations, and promises.
 
3. The object of this scheme and artifice to defraud was to obtain money and other things of value for the defendant Thomas J. D'Alessio and his father, James D'Alessio in the following manner:
 
a. by inducing taxpayers, citizens and residents of Essex County and elsewhere to contribute to a fundraising event through the deliberate failure to disclose that the funds would be used as gifts for the personal benefit of the defendant Thomas J. D'Alessio and his father, James D'Alessio, rather than for political and campaign expenses; and

 In its briefs submitted to this court, the Government explains that counts one through three allege a two-part fraud. First, the indictment charges "a classic fraud based on a tangible rights theory -- the defendants obtained money from their victims by leading them to believe that their money would be used for political purposes, when, in fact, the money was used for private enrichment." Govt. Mem. at 11. The Government states that "second, and independently, the Indictment charges that the public was defrauded of its nonpecuniary, i.e., intangible, right to honest government through the concealment of ...


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