Circuit Court Finds Sufficient Evidence to Support Wire Fraud and Extortion Predicates in Affirming a RICO Conviction

United States v. Taylor, 2019 WL 5700359, __ F.3d __ (4th Cir., Nov. 5, 2019)

The Court affirmed the conviction of two Baltimore City police officers who submitted of overtime slips with false hours. The overtime slips were wired between [the Police Department] and ADP, the payroll provider for Baltimore City, from Maryland to South Dakota [where ADP’s servers for the payroll system were located].” The officers, who were members of the Police Department’s Gun Trace Task Force (“GTTF”), were also charged with robbing citizens during the course of their police service, taking money, jewelry, and other items. Defendants were convicted at trial of RICO conspiracy and substantive RICO.

 

Wire Fraud- Foreseeability

 

The two police officers, Taylor and Hersl, contend the government presented insufficient evidence in support of the necessary elements of wire fraud under 18 U.S.C. § 1343, one of the acts found by the jury. They argue that to show a violation of § 1343, the government had to prove that the use of interstate wires was “reasonably foreseeable” to at least one conspirator. They maintain that although “[t]he government proved without dispute that the process leading to paying overtime to … officers involved the use of interstate wires,” it “offered literally no evidence to prove that the use of the wires was foreseeable to Hersl, Taylor, or other conspirators.” More particularly, they assert that “the government introduced no evidence whatsoever that it was reasonably foreseeable to Hersl, Taylor, or coconspirators that the submission of overtime slips would lead to wire communications between [the Police Department] and ADP, let alone interstate wire transmissions from Maryland to South Dakota [where ADP’s servers for the payroll system were located].”
As the indictment charged and the jury found, the Police Department was the enterprise through which Hersl and Taylor conspired with other GTTF officers to enrich themselves by committing various racketeering acts. To establish a violation of the wire fraud statute, the government must prove (1) the existence of a scheme to defraud and (2) the fact that the defendant used or caused the use of wire communications in furtherance of that scheme. The court discussed at the outset that the interstate nexus required in § 1343 is a jurisdictional element — rather than a substantive element — of the crime of wire fraud. And while the government is generally required to prove a defendant’s mens rea with respect to substantive elements of a crime, such proof is not required for a jurisdictional element.
Thus, the Court concluded that the evidence in this case of the interstate nexus was sufficient to satisfy the jurisdictional element, finding the wire transmissions were in interstate commerce, and need not have been foreseeable to a defendant under an objective standard.
Hobbs Act Robbery
The Defendants then challenged their convictions for Hobbs Act robbery contending
that the evidence was insufficient to establish that their conduct met the statutory definition of robbery. Hersl also contended that the government failed to establish that his alleged robbery of two victims (Ronald and Nancy Hamilton) affected interstate commerce.*11. Hersl argued that even if he was involved in robbing the Hamiltons, a robbery of personal savings from a private home does not have the effect on interstate commerce required by the Hobbs Act. The Hamilton’s monies came from Hamilton’s business of purchasing cars at dealer auctions in Maryland and Pennsylvania and then sold them over the Internet or through word of mouth. Given [T]he jurisdictional predicate of the Hobbs Act requires only that the government prove a minimal effect on interstate commerce.” the government may satisfy the Hobbs Act’s jurisdictional requirement by showing a reasonable probability that the defendants’ actions depleted the assets of an entity engaged in interstate commerce, and “the effect [on interstate commerce] may be so minor as to be de minimis.” *12. While Hamilton did not quantify how much of his business he conducted out of state, a rational jury could have concluded that, since he testified to purchasing cars from only three locations, his purchases from Manheim, Pennsylvania, constituted a substantial portion of his inventory. The court stated that it had recognized that a business that purchases “a substantial portion of its inventory from out-of-state suppliers is engaged in interstate commerce for purposes of the Hobbs Act.” In addition, Hamilton specifically testified that some of the cash found in the bedroom came from selling cars, a portion of which came from Pennsylvania. Because there is no dollar-amount minimum under the depletion of assets theory, the Court concluded that the evidence was sufficient to satisfy the jurisdictional requirement of the Hobbs Act.
Ed. Note: Although this was a criminal RICO prosecution, the proof of the predicates in a civil RICO follows the same analysis, subject to a preponderance of evidence standard instead of beyond a reasonable doubt. The Court’s liberal interpretation of “foreseeability” for wire fraud, and “de minimis” for Hobbs Act may be directly applied to an analysis of these predicates in a civil RICO case.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s