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United States v. Bryant

May 27, 2009

UNITED STATES OF AMERICA, PLAINTIFF,
v.
WAYNE R. BRYANT; R. MICHAEL GALLAGHER, DEFENDANTS.



The opinion of the court was delivered by: Wolfson, United States District Judge

OPINION

This matter comes before the Court upon separate motions by Defendants Wayne Bryant ("Bryant") and Michael Gallagher ("Gallagher"), seeking a judgment of acquittal under Fed. R. Crim. P. 29 on all Counts of the Indictment that were tried before this Court. Counts 1-6 allege that Bryant and Gallagher engaged in a scheme to defraud the New Jersey public of Bryant's honest services, in violation of 18 U.S.C. §§1341, 1343, and 1346. Count 7 charges that Bryant solicited and accepted a corrupt thing of value involving an organization receiving federal funds in violation of 18 U.S.C. §666(1)(A). Count 8 charges Gallagher with offering and accepting a corrupt thing of value involving an organization receiving federal funds in violation of 18 U.S.C. §666(1)(B). Counts 9-13 charge Bryant with mail fraud in violation of 18 U.S.C. §1341 in connection with Bryant's scheme to defraud the New Jersey Division of Pensions and Benefits of money and property. A jury found Bryant guilty on Counts 1-7 and 9-13 and Gallagher guilty of Counts 1-3, 5, 6, and 8. Alternatively, both Defendants seek a new trial pursuant to Fed. R. Crim. P. 33. The Court has reviewed the parties' submissions, and for the reasons stated below, Defendants' Motions are denied.

I. FACTUAL BACKGROUND

The Court will give a brief summary of the Government's allegations. Defendants were indicted on March 29, 2007.*fn1 In Counts 1-6 of the Indictment, it is alleged that Bryant, a New Jersey State Senator from 2002 through 2006, and Gallagher, Dean of the School of Osteopathic Medicine ("SOM"), a school within the University of Medicine and Dentistry of New Jersey ("UMDNJ"), engaged in a scheme to defraud the New Jersey public of Bryant's honest services as a State Senator. Specifically, Defendants were alleged to have entered into a corrupt quid pro quo bribery arrangement whereby Gallagher hired Bryant for a "low-show" job at SOM, earning Bryant a salary, performance bonuses, and a credit towards his state pension, in exchange for Bryant's assistance and efforts as a State Senator to secure additional funding and other benefits from the State of New Jersey for SOM. Count 7 charges Bryant with violating 18 U.S.C. § 666(a)(1)(A), alleging that he solicited a paid position at SOM with the intent to be influenced by his salary and benefits at SOM. Count 8 charges Gallagher with violating 18 U.S.C. § 666(a)(1)(B), alleging that Gallagher offered and agreed to give Bryant a position at SOM and a series of corrupt payments intending to influence Bryant's actions as a New Jersey State Senator. As to Counts 9-13, Bryant was alleged to have sought out multiple public jobs, including a position at SOM in an effort to fraudulently inflate his pension benefits from the New Jersey Division of Pensions and Benefits (the "Division"). These counts also allege that Bryant, in his position with the Gloucester County Board of Social Services ("GCBSS"), a position he had held since early nineties, fraudulently submitted to the Division time reports that grossly exaggerated the amount of work Bryant did on behalf of GCBSS.

Over the course of an eight week trial commencing on September 8, 2008, the Government presented a number of witnesses and introduced documentary evidence which it contends demonstrate that Defendants were engaged in an elaborate scheme to use Bryant's position in the State Senate to further the purposes of SOM. On November 18, 2008, the jury found Bryant guilty on Counts 1-7 and 9-13 and Gallagher guilty on Counts 1-3, 5,6, and 8. The jury acquitted Gallagher on Count 4 of the Indictment, which charged Gallagher with honest services mail fraud arising from Bryant's 2003 mailing of his Legislator's Financial Disclosure Statement. On October 20, 2008, at the end of the Government's case-in-chief, Defendants both moved for a judgment of acquittal under Fed. R. Crim. P. 29 ("Rule 29"). The Court heard arguments at that time from counsel but reserved decision pursuant to Fed. R. Crim. P. 29(b). At the close of all the evidence at trial, both Defendants renewed their Rule 29 motions, and the Court again reserved decision. Now, both Defendants move for judgment of acquittal under Rule 29(c), or alternatively, for a new trial pursuant to Fed. R. Crim. P. 33 ("Rule 33").

II. DISCUSSION

A. Rule 29 Motion for a Judgment of Acquittal

According to Rule 29(a) of the Federal Rules of Criminal Procedure, "[a]fter the government closes its evidence or after the close of all the evidence, the court on the defendant's motion must enter a judgment of acquittal of any offense for which the evidence is insufficient to sustain a conviction." However, a court may reserve its decision on a Rule 29 motion until after the jury has reached a verdict. If so, the court still must decide the motion on the basis of the evidence at the time the ruling was reserved. United States v. Brodie, 403 F.3d 123, 133 (3d Cir. 2005). Hence, this Court must decide Defendants' Rule 29 motions based on the evidence at the end of the Governement's case in chief. See Id. at 134.

A Rule 29 motion requires a court to determine whether the government's evidence is sufficient, or stated another way, whether the record contains " substantial evidence from which any rational trier of fact could find guilt beyond a reasonable doubt." United States v. Lore, 430 F.3d 190, 203-04 (3d Cir. 2005); United States v. Smith, 294 F.3d 473, 476 (3d Cir. 2002); United States v. Wolfe, 245 F.3d 257, 261 (3d Cir. 2001). In weighing the evidence presented, the court must "review the record in the light most favorable to the prosecution," resolving all credibility determinations in the government's favor. Wolfe, 245 F.3d at 261; see also United States v. Leon, 739 F.2d 885, 891 (3d Cir. 1984) (court must look at the evidence presented by the Government taken as a whole).

Indeed, "[c]courts must be ever vigilant in the context of Fed. R. Crim. P 29 not to usurp the role of the jury by weighing credibility and assigning weight to the evidence, or by substituting its judgment for that of the jury." Brodie, 403 F.3d at 133 (citations omitted); United States v. Carmichael, 269 F. Supp. 2d 588, 595 (D.N.J. 2003) ("The defendant must also overcome the jury's special province in evaluating witness credibility and conflicting testimony"). That being said, a finding that the government's evidence is insufficient is reserved to those exceptional "cases where the prosecution's failure is clear," making "[t]he burden on a defendant who raises a challenge to the sufficiency of the evidence. . .extremely high." Smith, 294 F.3d at 476 (discussing post-trial Rule 29 motion); United States v. Serafini, 233 F.3d 758, 770 (3d Cir.2000) (same). The Court is obligated to "'draw all reasonable inferences in favor of the jury's verdict.'" Smith, 294 F.3d at 476 (quoting United States v. Anderskow, 88 F.3d 245, 251 (3d Cir. 1996)).

B. Rule 33 Motion for a New Trial

Federal Rule of Criminal Procedure 33 provides that "[u]pon the defendant's motion, the court may vacate any judgment and grant a new trial if the interest of justice so requires." Fed. R. Crim. P. 33. The authority to grant a new trial pursuant to Rule 33 is limited to those instances where the Court "believes that there is a serious danger that a miscarriage of justice has occurred-that is, that an innocent person has been convicted." United States v. Johnson, 302 F.3d 139, 150 (3d Cir. 2002) (internal citations and quotations omitted); United States v. Silveus, 542 F.3d 993, 1004-05 (3d Cir. 2008). Even in those cases where the court may feel that the verdict is contrary to the weight of the evidence, "[m]otions for a new trial based on the weight of the evidence are not favored" and should be limited to "exceptional cases." Silveus, 542 F.3d at 1005 (quoting Government of Virgin Islands v. Derricks, 810 F.2d 50, 55 (3d Cir. 1987)). However, if there is a reasonable possibility that a "trial error had a substantial influence on the verdict," a new trial must be granted. Virgin Islands v. Commission, 706 F. Supp. 1172, 1184 (D.V.I.1989) (quoting United States v. Mastro, 570 F. Supp. 1388, 1390 (E.D.Pa. 1983); Government of Virgin Islands v. Bedford, 671 F.2d 758, 762 (3d Cir. 1982)).

Besides challenging the sufficiency of the evidence in his Rule 33 Motion, Gallagher contends several discrete errors warrant a new trial. First, Gallagher asserts that the Government introduced false testimony with regards to SOM's pension policy and later attributed that erroneous understanding of the pension policy to Gallagher. Second, Gallagher further contends that the Government commented on the fact that he did not testify, permitting the jury to draw adverse and improper inferences from this fact, in violation of Gallagher's Fifth Amendment right not to testify. These errors, as stated supra, must have had a "substantial influence on the verdict" for this Court to grant a new trial.

C. Counts 1-6

a. Quid Pro Quo Arrangement

Initially, Defendants challenge the sufficiency of the evidence with respect to the alleged quid pro quo arrangement between Bryant and Gallagher, arguing that the Government failed to present sufficient evidence from which a rational jury could conclude that Gallagher, in hiring Bryant, intended to influence Bryant's official actions as a State Senator. Instead, both Defendants argue, although the evidence may show that Bryant did in fact take official acts that were beneficial to SOM, the evidence does not demonstrate a causal link between Bryant's position at SOM and the benefits he received while employed by SOM.

The elements of honest services fraud were recently set forth by the Third Circuit: To prove mail fraud, the government must establish "(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 ... in furtherance of the scheme." United States v. Antico, 275 F.3d 245, 261 (3d Cir.2001). Congress has clarified that "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. § 1346. Honest services fraud, in turn, typically occurs in either of two situations: "(1) bribery, where a [public official] was paid for a particular decision or action; or (2) failure to disclose a conflict of interest resulting in personal gain." Antico, 275 F.3d at 262-63.

United States v. Kemp, 500 F.3d 257, 279 (3d Cir. 2007). As alleged, the Indictment charged Defendants under both theories, failure to disclose and bribery. However, this Court struck those allegations that charged Defendants under the failure to disclose theory, holding "[b]ecause the conflict that the Indictment alleges that Bryant failed to disclose is the quid pro quo bribery arrangement, a jury could not convict Defendants under the failure to disclose theory without already finding that the Defendants committed quid pro quo bribery." 556 F. Supp. 2d at 421. Thus, "the Indictment's failure to disclose theory is not an alternative means by which Defendants committed honest services fraud; it is the same theory of criminal liability stated in different language." Id. At trial, the Government proceeded on a bribery theory, only.

In distinguishing between a bribery and a gratuity, the Supreme Court has stated that "[b]ribery requires 'intent to be influenced' in an official act. . .In other words, for bribery there must be a quid pro quo-a specific intent to give or receive something of value in exchange for an official act." United States v. Sun-Diamond Growers of California, 526 U.S. 398, 404-05 (1999) (emphasis in original). To prove a quid pro quo bribery arrangement, the Government must establish "that the benefit was offered in exchange for the official act." Kemp, 500 F.3d at 281 (quoting district court's jury instruction on bribery charge). However, the Government is not required to present evidence that attributes each official action to a corrupt payment. It is enough for the government to present "evidence that shows a 'course of conduct of favors and gifts flowing to a public official in exchange for a pattern of official actions favorable to the donor.'" Kemp, 500 F.3d at 282 (quoting United States v. Jennings, 160 F.3d 1006, 1014 (4th Cir. 1998)). Thus, "payments may be made with the intent to retain the official's services on an 'as needed' basis, so that whenever the opportunity presents itself the official will take specific action on the payor's behalf." Id. at 281. The evidence of a "quid pro quo can be implicit, that is, a conviction can occur if the Government shows that [the defendant] accepted payments or other consideration with the implied understanding that he would perform or not perform an act in his official capacity." United States v. Antico, 275 F.3d 245, 257 (3d Cir. 2001).

Based on the evidence presented at trial, a reasonable jury could conclude beyond a reasonable doubt that the timing of Bryant's official actions, which Defendants concede benefitted SOM, and his receipt of a pensionable salary and benefits were not mere coincidence. Contrary to Defendants' claims, the record contains evidence which demonstrates that Defendants sought to engage in a quid pro quo arrangement where Bryant would be hired by SOM and compensated for prospective official actions taken in his capacity as a New Jersey Senator. For instance, Robert Prodoehl, Director of Operations at SOM and later Gallagher's Chief of Staff, testified at length that Gallagher was concerned about the amount of state funding that SOM received, especially in light of what Gallagher perceived to be State Senator George Norcross's work for Cooper Hospital. 3 T 105. Prodoehl further testified that when he discussed Bryant's hiring with Gallagher, Gallagher "was concerned that [Bryant] would -- if [SOM] did not hire him, that he would work for Cooper; and he also stated we needed him on our side for our team." 3 T 102.

With respect to the parameters of Bryant's job at SOM, the Government presented testimony and documentary evidence from which a jury could infer that Bryant's primary duty was to secure additional funding for SOM. John W. Crosbie, Director of Strategic Planning Program Development at SOM, testified that he took part in a meeting with Defendants nine days after Bryant was hired, March 25, 2003, where Defendants discussed SOM's "supplemental funding," a strategy to be spearheaded by Bryant. 6 T 101-02 ("[W]e talked about a supplemental funding strategy; and at that time we discussed with the senator the opportunity to get supplemental funding in the upcoming budget that was then under way as what we would call a "Christmas tree item" or some people call it "pork barrel" -- whatever you want to call it, an item added to the budget at the end of the process."); Government Trial Exhibit (GTX) 304 (Crosbie's memo entitled "Honorable Wayne Bryant, Mach 25th meeting on Projects and Responsibilities" recounting March 25, 2003 meeting). During this meeting, Crosbie testified that Gallagher addressed his concerns about the lack of state funding for SOM, to which Bryant replied that he needed "supporting information that would allow him to pursue supplemental funding on behalf of the school in the budget cycle."

6 T 101-06.

The Government also demonstrated through several witnesses and documentary exhibits that prior to the March 25th meeting, the process surrounding the creation of the position at SOM and Bryant's predetermined hiring were indicative of the alleged scheme to defraud New Jersey of Bryant's honest services. Specifically, Prodoehl testified that months before candidates were interviewed for the position of Program Support Coordinator, Gallagher had already determined that Bryant was to be hired and sketched out several of his responsibilities. 3 T 139 (testifying that he received notes from Gallagher concerning Bryant's job description in December 2002); GTX 201 (Gallagher's December 2002 notes). Prodoehl also testified that Gallagher was instrumental in determining what was to be included in the public job description for Program Support Coordinator, and that throughout the hiring process, Gallagher was "excited" to have Bryant start at SOM and expressed that Bryant's hiring needed to happen quickly. 3 T 179.

When it finally came time to interview candidates, only two were chosen for interviews. Bryant's interview, however, was "to provide a paper trail, and [Gallagher] concurred with that," given that Gallagher had already determined he wanted to hire Bryant in December 2002 at a salary of $35,000. 3 T 170-72. In fact, the Government was able to demonstrate through Prodoehl's testimony that Gallagher had already signed off on the agreed-upon salary, $35,000, for Bryant, before Bryant had even interviewed for the position. 3 T 175-76; GTX 212 (Affirmative Action Form dated February 20, 2003, detailing the $35,000 salary Bryant was to receive). The fact that Gallagher had represented to Prodoehl that Bryant was only to work 7.5 hours a week, see 3 T 158, otherwise known as a .2 employee, which would not qualify Bryant for a $35,000 salary, and the fact that Gallagher signed off on Bryant's hiring at a salary of $35,000, could support a finding that Defendants had agreed to a certain salary, $35,000, and that certain misrepresentations needed to be made to ensure Bryant did indeed receive that amount in pay. In other words, Defendants backed into this decision to preserve the quid in their quid pro quo arrangement: Bryant's $35,000 pensionable salary, in exchange for his official influence in Trenton.

Further, several other witnesses, including Prodoehl, testified that once Bryant was awarded the position, he rarely was at his SOM office, a fact that underscores the Government's contention that Bryant was being paid for his influence and power in Trenton and not for the duties he undertook as Program Support Coordinator. Indeed, the testimony tends to demonstrate that Bryant's efforts at SOM could not possibly justify his $35,000 salary, which required that he work a total of 22.5 hours a week. 6 T 28. Certainly, the jury could infer from this evidence that the hiring process was one part of the corrupt arrangement between Bryant and Gallagher.

The Government also presented overwhelming evidence of those official acts taken by Bryant that it claims were influenced by his salary at SOM. David Rosen and George LeBlanc, state legislative employees, testified that Bryant was responsible for a change in the state's 2003-04 budget which called for a $2.325 million carve-out for SOM. 8 T 36-37; 9 T 92; GTX 14q. Prodoehl testified that Gallagher recognized that this unprecedented additional funding was a direct result of Bryant's employment at SOM. 4 T 14. In fact, upon hearing the news, Gallagher quipped that it was a "great return on [its] investment" in Bryant's SOM salary. Id. The Government also highlighted other official acts taken by Bryant, specifically $200,000 in funding for SOM's Institute for Successful Aging sometime in the fall of 2005. See GTX 909, 910. According to Dr. Thomas Cavalieri, Director of the Institute for Successful Aging, Gallagher informed him that the additional funding was, as Gallagher put it, "payback time." 11 T 9. Given these acts and others described at trial, the jury was entitled to find that Bryant was influenced by the salary he received at SOM. See United States v. Holck, 398 F. Supp. 2d 338, 348-51 (E.D. Pa. 2005) (finding that jury could infer from official action that benefitted the defendant that it was in return for favorable loans made to the public official).

Defendants further assert that the evidence merely demonstrates that Bryant's official acts and his employment at SOM were close in time, and thus, insufficient to sustain their convictions. Nevertheless, the Third Circuit has recently noted that the close ...


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