Case: 11-3277 Document: 003110974892 Page: 1 Date Filed: 08/01/2012
IN THE UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
CASE NO. 11-3277
UNITED STATES OF AMERICA v. MARK A. CIAVARELLA, JR., Appellant
APPEAL FROM THE JUDGMENT OF CONVICTION ENTERED ON AUGUST 11, 2011, IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA BY THE HONORABLE EDWIN M. KOSIK, AT CRIMINAL NO. 3:09-CR-272-02
BRIEF OF APPELLEE
PETER J. SMITH UNITED STATES ATTORNEY
By: GORDON A.D. ZUBROD MICHAEL A. CONSIGLIO WILLIAM S. HOUSER ASSISTANT U.S. ATTORNEYS
Ronald Reagan Federal Building 228 Walnut Street P.O. Box 11754 Harrisburg, PA 17108-1754 717-221-4482 Case: 11-3277 Document: 003110974892 Page: 2 Date Filed: 08/01/2012
TABLE OF CONTENTS
TABLE OF AUTHORITIES ...... iii
STATEMENT OF JURISDICTION...... 1
STATEMENT OF ISSUES AND STANDARDS OF REVIEW...... 2
STATEMENT OF THE CASE...... 4
STATEMENT OF FACTS...... 6
STATEMENT OF RELATED CASES...... 18
SUMMARY OF ARGUMENT...... 19
ARGUMENT...... 24
THE DISTRICT COURT PROPERLY DENIED CIAVARELLA’S MOTION FOR RECUSAL...... 24
THE COURT DID NOT ABUSE ITS DISCRETION BY EXCLUDING EVIDENCE OF A PURPORTED ADMISSION BY GOVERNMENT COUNSEL...... 37
THE DISTRICT COURT DID NOT ABUSE ITS DISCRETION BY LIMITING CROSS- EXAMINATION...... 43
THE COURT DID NOT ABUSE ITS DISCRETION BY ADMITTING EVIDENCE OF CIAVARELLA’S FAILURE TO RECUSE HIMSELF FROM CASES INVOLVING MERICLE AND POWELL...... 47
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CIAVARELLA’S MAILINGS OF FRAUDULENT STATEMENTS OF FINANCIAL INTEREST WERE EXECUTIONS OF AN HONEST SERVICES MAIL FRAUD SCHEME...... 49
THE EVIDENCE WAS SUFFICIENT TO SUPPORT THE GUILTY VERDICTS ON RACKETEERING, RACKETEERING CONSPIRACY, HONEST SERVICES MAIL FRAUD AND MONEY LAUNDERING CONSPIRACY...... 51
THE RACKETEERING, HONEST SERVICES MAIL FRAUD (COUNT 7), RACKETEERING CONSPIRACY AND MONEY LAUNDERING CONSPIRACY CHARGES ARE NOT TIME-BARRED...... 56
THE DISTRICT COURT SUFFICIENTLY WEIGHED THE CREDIBILITY OF TRIAL WITNESSES AND EVIDENCE AT SENTENCING AND THE COURT’S FINDINGS RESULTED IN A SUBSTANTIVELY REASONABLE SENTENCE...... 61
CONCLUSION...... 66
CERTIFICATE OF COUNSEL
CERTIFICATE OF COMPLIANCE
IDENTICAL PDF & HARD COPY CERTIFICATE
VIRUS SCAN CERTIFICATE
CERTIFICATE OF SERVICE
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TABLE OF AUTHORITIES
FEDERAL CASES
Apprendi v. New Jersey, 530 U.S. 466 (2000)...... 61
Cheney v. United States District Court for the District of Columbia, 541 U.S. 913 (2004)...... 36
Community Bank of Northern Virginia, 418 F.3d 277 (3d Cir. 2005)...... 25
Davis v. C.I.R., 734 F.2d 1302 (8th Cir. 1984)...... 26
Delaware v. Fernsterer, 474 U.S. 15 (1985)...... 46, 47
Delaware v. Fensterer, 474 U.S. 15 (1985)...... 47
Delaware v. VanArsdall, 475 U.S. 673 (1986)...... 44, 47
Fiswick v. United States, 329 U.S. 211 (1946)...... 57
Gall v. United States, 552 U.S. 38 (2007)...... 65
Glasser v. United States, 315 U.S. 60 (1942)...... 3
Hoots v. Pennsylvania, 703 F.2d 722 (3d Cir. 1983)...... 63
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Johnson v. Trueblood, 629 F.2d 287 (3d Cir. 1980)...... 2
Kensington International Ltd., 353 F.3d 211 (3d Cir. 2003)...... 25
Kimbrough v. United States, 552 U.S. 85 (2007)...... 65
Liteky v. United States, 510 U.S. 540 (1994)...... 24, 25, 32, 30
Microsoft Corp. v. United States, 530 U.S. 1301 (2000)...... 36
Pivirotto v. Innovative Systems, Inc., 191 F.3d 344 (3d Cir. 1999)...... 38
Rhoades, Inc. v. United Air Lines, Inc., 340 F.2d 481 (3d Cir. 1965)...... 38
Salinas v. United States, 522 U.S. 52 (1997)...... 55
Skilling v. United States, 130 S. Ct. 2896 (2010)...... 49, 50
United States v. Bansal, 663 F.3d 634 (3d Cir. 2011)...... 2
United States v. Bertoli, 40 F.3d 1384 (3d Cir. 1994)...... 24
United States v. Bethancourt, 65 F.3d 1074 (3d Cir. 1995)...... 63
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United States v. Bobb, 471 F.3d 491 (3d Cir. 2006)...... 2, 3
United States v. Booker, 543 U.S. 220 (2005)...... 62
United States v. Cooper, 437 F.3d 324 (3d Cir. 2006)...... 65
United States v. Covert, 45 Fed. Appx. 100, 101 (3d Cir. 2002)...... 26
United States v. Grier, 475 F.3d 556 (3d Cir. 2007)...... 3, 62
United States v. Grinnell Corp., 384 U.S. 563 (1966)...... 25
United States v. Jake, 281 F.3d 123 (3d Cir. 2002)...... 57
United States v. Johnson, 165 F.2d 42 (3d Cir. 1947)...... 57
United States v. Karlin, 785 F.2d 90 (3d Cir. 1986)...... 3, 56
United States v. Kole, 164 F.3d 164 (3d Cir. 1998)...... 63
United States v. Matthews, 773 F.2d 48 (3d Cir. 1985)...... 64
United States v. McKeon, 738 F.2d 26 (2d Cir. 1984)...... 38
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United States v. Oliva, 46 F.3d 320 (3d Cir.1995)...... 3, 56
United States v. Pearlstein, 576 F.2d 531 (3d Cir. 1978)...... 48
United States v. Salerno, 937 F.2d 797 (2d Cir. 1991)...... 38
United States v. Silveus, 542 F.3d 993 (3d Cir.2008)...... 2
United States v. Vampire Nation, 451 F.3d 189 (3d Cir. 2006)...... 25
United States v. Watts, 519 U.S. 148 (1997)...... 63
FEDERAL STATUTES
26 U.S.C. § 7206(1)...... 5
28 U.S.C. § 1291...... 1
18 U.S.C. §§ 1341...... 5
18 U.S.C. § 1346...... 4, 50
18 U.S.C. § 1956(h)...... 5
18 U.S.C. § 1962(c)...... 5
18 U.S.C. § 1962(d)...... 5
18 U.S.C. §3231...... 1
18 U.S.C. § 371...... 5
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STATEMENT OF JURISDICTION
The District Court had subject matter jurisdiction pursuant to 18 U.S.C. §
3231. This Court has appellate jurisdiction pursuant to 28 U.S.C. § 1291. Case: 11-3277 Document: 003110974892 Page: 9 Date Filed: 08/01/2012
STATEMENT OF ISSUES AND STANDARDS OF REVIEW
Appellant’s issues I, II, III, and IV relating to whether the district court erred when it denied Ciavarella’s motion for recusal, when it excluded evidence of a purported admission by government counsel, when it limited his cross- examination, and when it admitted evidence of Ciavarella’s failure to recuse himself from cases involving Mericle and Powell, are reviewed for abuse of discretion. See Johnson v. Trueblood, 629 F.2d 287, 290 (3d Cir. 1980)(recusal motion); United States v. Bobb, 471 F.3d 491, 497 (3d Cir. 2006)(evidentiary rulings); United States v. Silveus, 542 F.3d 993, 1005 (3d Cir.2008)(limitation on cross-examination).
Issue V, whether Ciavarella’s mailings of fraudulent Statements of Financial
Interest were executions of an honest services mail fraud scheme, a challenge to sufficiency of the indictment, is subject to plenary review. United States v.
Bansal, 663 F.3d 634, 656 (3d Cir. 2011).
Issue VI is whether the evidence was sufficient to support the guilty verdicts on racketeering, racketeering conspiracy, honest services mail fraud and money laundering conspiracy. A claim of insufficiency of the evidence at trial places a very heavy burden on the proponent: the conviction must stand if a rational trier of fact could have found the defendant guilty beyond a reasonable doubt and if the
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verdict is supported by substantial evidence. United States v. Bobb, 471 F.3d 491,
494 (3d Cir. 2006), citing United States v. Coyle, 63 F.3d 1239, 1243 (3d Cir.
1995). When the sufficiency of the evidence at trial is challenged, a court must view the evidence in the light most favorable to the government. Glasser v.
United States, 315 U.S. 60, 80 (1942).
Issue VII is whether the racketeering, honest services mail fraud (count 7), racketeering conspiracy and money laundering conspiracy charges were time- barred. Where the defendant neither raised the statute of limitations as a defense before or at trial, nor asked for any jury instructions on the defense, the defense is waived and this court is prevented from reaching the issue on direct review.
United States v. Oliva, 46 F.3d 320, 325 (3d Cir.1995) citing United States v.
Karlin, 785 F.2d 90, 90-93 (3d Cir. 1986).
Issue VIII is whether the district court sufficiently weighed the credibility of trial witnesses and evidence at sentencing and the Court’s findings resulted in a substantively reasonable sentence. A court’s factual findings supporting application of guidelines enhancements are reviewed for clear error. United States v. Kennedy, 554 F.3d 415, 418 (3d Cir. 2009) citing United States v. Grier, 475
F.3d 556, 559 (3d Cir. 2007).
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STATEMENT OF THE CASE
On January 26, 2009, Mark Ciavarella, Jr. and his coconspirator Michael
Conahan were charged in an information with honest services wire fraud, in violation of Title 18, U.S.C. §§ 1343, 1346. (App. 47.) On February 12, 2009, the defendants pleaded guilty to the charges pursuant to binding plea agreements entered under Rule 11(c)(1)(C) of the Federal Rules of Criminal Procedure. The
Court reserved ruling on the proposed plea agreements pending review of a
Presentence Report (hereinafter “PSR”). (App. 48.)
On July 31, 2009, the Court rejected the binding plea agreements.
(App. 49.) The defendants moved to withdraw their pleas on August 24,
2009. (App. 49.)
On September 9, 2009, a grand jury returned a 48 count indictment charging
Conahan and Ciavarella with racketeering and other corruption and tax-related charges and seeking forfeiture of assets. (App. 53, 73-146.) Ciavarella pleaded
“not guilty” on September 15, 2009. (App. 54.)
On July 23, 2010, Conahan pleaded guilty to RICO conspiracy. On
September 29, 2010, a superseding indictment was returned against Ciavarella.
(App. 59, 73-146.)
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Ciavarella’s trial began on February 7, 2011 and ended on February 18,
2011. (App. 63.) The jury found Ciavarella guilty of 12 charges: racketeering (18
U.S.C. § 1962(c) - Count One); racketeering conspiracy (18 U.S.C. § 1962(d) -
Count Two); honest services mail fraud (18 U.S.C. §§ 1341 and 1346 - Counts
Seven through Ten); money laundering conspiracy (18 U.S.C. § 1956(h) - Count
Twenty-One); conspiracy to defraud the United States (18 U.S.C. § 371 - Count
Thirty-Five); and subscribing to a materially false tax return (26 U.S.C. § 7206(1)
- Counts Thirty-Six through Thirty-Nine). The verdict required forfeiture of
$997,600.00. (App. 183-96.)
On August 11, 2011, Ciavarella was sentenced to 336 months of imprisonment and 3 years of supervised release. Additionally, he was ordered to pay restitution of $1,173,791.94, to forfeit $997,600.00 and to pay assessments totaling $1,200. (App. 66-67.) The prison term consisted of concurrent 240 month terms on each of Counts One, Two, Seven through Ten and Twenty-one, a consecutive 60 months on Count Thirty-five, and a consecutive 36 months on
Counts Thirty-six through Thirty-nine, which ran concurrently with one another.
On August 17, 2011, Ciavarella filed a Notice of Appeal. (App. 67.)
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STATEMENT OF FACTS
1. Introduction
Mark A. Ciavarella, Jr. and his co-conspirator Michael T. Conahan were judges of the Court of Common Pleas for Luzerne County, Pennsylvania. From
January 2002 to January 2007, Conahan served as President Judge. Ciavarella served as Judge of the Juvenile Court beginning in 1996. (App. 1116.) He was named President Judge in January of 2007 and served in that capacity until
January of 2009, when he was removed as judge by the Pennsylvania Supreme
Court. (PSR p. 30.)
Between 2003 and 2006, Ciavarella and Conahan derived approximately
$2.9 million in kickbacks related to the construction and operation of two private juvenile detention facilities. In exchange, they did the following: entered agreements guaranteeing placement of juvenile offenders at the facilities; removed funding from the Luzerne County budget for the Luzerne County Juvenile
Detention Facility; facilitated construction of juvenile detention facilities and an expansion to one of those facilities; directed that juvenile offenders be lodged at those facilities; summarily granted motions to seal the record and for injunctive relief in a civil case related to the facilities; and, helped the facilities to secure agreements with Luzerne County worth tens of millions of dollars for the
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placement of juvenile offenders, including an agreement in late 2004 worth approximately $58,000,000.
Ciavarella and Conahan employed a number of schemes to hide the illicit income they received, including causing income to pass through intermediaries and causing false records to be created.
2. Construction of PA Child Care.
In 2000, Luzerne County officials began to evaluate alternatives to repairing the Luzerne County Juvenile Detention Facility which, although licensed by the state, was in disrepair. (App. 335-37.) Among the officials involved were Judges
Conahan and Ciavarella. (App. 1117-20.)
In 2000, Ciavarella asked Robert Powell, an attorney for the Luzerne
County Planning Commission, to participate in the evaluation. (App. 504-06.)
Powell enlisted the services of others, including Robert Mericle, owner of Mericle
Construction Company. Although the original plan was for Luzerne County to build its own facility, Powell and the others decided to build a private facility to be owned by PA Child Care, LLC and to sell it or lease it to Luzerne County. (App.
506-07, 512, 515.) Powell was 50 percent owner of PA Child Care. Ciavarella was actively involved in the planning of the private youth detention center. (App.
507.) This included pushing Powell to hire Mericle to build the facility. (App.
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506.) Conahan and Ciavarella received regular status reports from Powell. (App.
509.)
During 2001, Powell had trouble getting financing for the facility. (App.
510.) The bank told him he needed a lease with Luzerne County to get the loan.
(App. 511.) Powell discussed the problem with Conahan and Ciavarella. (App.
511.) They all agreed to wait until Conahan became President Judge in January of
2002, when he could bind the county on a lease. (App. 411, 513)
In January of 2002, Conahan became President Judge. On January 29,
2002, he signed a guaranty placement agreement with PA Child Care in which he agreed to pay $1,314,000 per year to PA Child Care to house juveniles. (App.
513-14.) The promise to pay was unconditional, not tied to whether or not any juveniles were sent there. (App. 514.) The placement agreement secured approximately $12 million in financing. Although Ciavarella saw the agreement,
Conahan would not let the county commissioners see it. (App. 514-15.)
Conahan and Ciavarella jointly announced that they would close the county youth detention center and that no funds would be included in the judicial budget to operate the county youth detention center. (App. 516.) Conahan indicated that juvenile offenders would be housed at the PA Child Care facility. (App. 409-10,
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517.) Conahan also returned the county’s youth detention center license to the state which effectively shut down the county center. (App. 518.) .
Likewise, Ciavarella worked to undermine the county’s attempt to build a youth detention center by actively campaigning in the press and behind the scenes for the building of PA Child Care. He had PA Child Care hire the best county employees from the county youth detention center. (App. 517.) This placed
Ciavarella and Conahan in direct conflict with the county commissioners. The commissioners gave up the fight since they could not fight the combined power of the President Judge and the juvenile court judge. (App. 518.)
PA Child Care was built by Mericle Construction, completed in January,
2003 and commenced operation in February, 2003. (App. 519-20.)
3. The Bribe and Kickback Scheme.
On Christmas Eve, 2001, Powell and Conahan drove to the PA Child Care site together. During this visit, Conahan indicated to Powell that Ciavarella was going to have to be compensated. (App. 520-21.) Powell understood Conahan to mean that Conahan and Ciavarella wanted money in exchange for Conahan’s assistance in closing the county-run detention facility and in exchange for
Ciavarella keeping the facility full of juvenile offenders. (App. 521.)
Around July of 2001, Mericle told Ciavarella that he would pay Ciavarella a
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$997,600 “finder’s fee” because Ciavarella had recommended him for the PA
Child Care construction project. (App. 414-15.) Ciavarella decided to pay half the “fee” to Conahan because Conahan “was able to make this thing happen.”
(App. 1203, 1209.) Ciavarella directed Mericle to disperse the fee to him through
Powell. (App. 416.) Powell was told by both Ciavarella and Conahan that
Mericle was paying the judges a “finder’s fee” and that the funds were to be dispersed through Powell. (App. 522.) Powell knew that the “finder’s fee” payment was “bogus” and was actually a kickback to Ciavarella and Conahan being disguised as a payment to Powell from Mericle. (App. 522-24.) Powell knew that he would be paying an illegal kickback, but went along anyway. (App.
524-25, 529.) He feared Conahan and Ciavarella could destroy his 5 years of effort if he refused to cooperate. (App. 525.) Thereafter, Mericle asked Powell to sign fraudulent paperwork relating to the payment of the Conahan and Ciavarella referral fee. The backdated paperwork made it appear as if the fee paid to the judges was being paid to Powell when in fact, Powell was being used by
Ciavarella and Conahan to disguise their payment and to make it untraceable.
(App. 523, 525, 529.)
On January 16, 2003, Powell signed the documents which called for the payment of $997,600 to Powell upon completion of the project. (App. 525.) At the
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direction of Conahan, Powell provided wire transfer instructions to Mericle.
(App. 420, 527.) Powell paid taxes on the $997,600. (App. 528.)
Powell arranged for an attorney to receive a wire transfer of $610,000 from
Mericle Construction Company. (App. 525-26.) The attorney wire transferred the
$610,000 to Beverage Marketing of PA, Incorporated, owned by Conahan. (App.
488-89.) Believing that it was a real estate transaction, the attorney would have refused if he had known it was a payment to a judge. (App. 487-88, 494-95.)
In an effort to disguise the funds transferred from the Beverage Marketing account, Conahan falsified the books and records of the company, including an entry that $610,000 was paid for “Consulting Fees Joe Smith.” (App. 923-24.)
On January 24, 2003, Mericle wire transferred another $387,600 -- the remaining balance of the $997,600 fee to be paid to the judges -- to an account controlled by Powell. (App. 526-27.) To disguise these funds, Conahan directed in August 2003 that Powell write a check for $326,000 to himself “for deposit only.” Conahan instructed Powell to endorse the check and to give it to Conahan.
(App. 528-31.) Powell was aware that he had become involved in money laundering. (App. 529-30.)
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Powell followed Conahan’s instructions and on August 29, 2003, Powell’s check, in the amount of $326,000, was deposited into Conahan’s wife’s account.
(App. 268-69.)
While denying the $997,600.00 was a quid pro quo, Ciavarella admitted that he received the money from Mericle via Powell and deliberately concealed the payments. (App. 1181-82, 1197, 1203, 1210-11, 1223, 1230-31, 1235.)
Mericle paid Ciavarella an additional $1 million when Mericle built a second youth detention center, Western PA Child Care, in 2005 and another
$150,000 when he expanded PA Child Care in 2006. Again, paperwork was prepared to make Powell appear to be the recipient of the money. The funds were transferred to a bank account controlled by Conahan and Ciavarella. Powell believed if he refused, Ciavarella and Conahan could destroy him by refusing to send juveniles to PA Child Care. (App. 263, 279-80, 284, 289-91, 422-30, 549-
57, 567, 1176-81) (Western PA Child Care Construction); (App. 431-33, 1150,
1220-21) (Expansion of PA Child Care).
Ciavarella admitted at trial that he received and disguised the $1 million and
$150,000 payments and paid half of the money to Conahan. (App. 1176-82, 1235-
36) (the building of Western PA Child Care); (App. 1150, 1220-21) (the expansion of PA Child Care).
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4. The Powell “Rent” ($590,000).
In January 2004, Conahan, Ciavarella and their spouses formed Pinnacle
Group of Jupiter, LLC, a corporation with the wives identified as the owners. The sole asset of the corporation was a condominium in Jupiter, Florida recently purchased for approximately $848,000. (App. 275, 535-36, 538.)
In October or November of 2003, Ciavarella and Conahan demanded that
Powell make kick-back payments in connection with the operation of the detention facility. (App. 532.) Ciavarella had a sheet of paper showing how much money had been paid to PA Child Care by Luzerne County for housing juveniles that
Ciavarella had ordered confined there. He told Powell that the records showed PA
Child Care was “doing very, very well” and that “I know what’s going on up there,
I know what’s happening, I want a part of it.” (App. 532-33.) Powell protested that the business was not turning a profit and that he could not pay them. (App.
535.) Ciavarella insisted to be paid. (App. 536.) The judges told Powell they were going to use Pinnacle Group and the Florida condominium as a means to conceal the “kick-back” payments. (App. 536, 538.)
Powell wrote kickback checks to Pinnacle Group of Jupiter from an account of Vision Holdings, Inc. (App. 538-39.) At the direction of Conahan, many of the checks bore fraudulent notations to make them appear to be payments for monthly
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rental of the condominium or boat slip fees. (App. 539-45.) Powell also made wire transfers of kick-back payments to the checking account of Pinnacle Group of
Jupiter per instructions received from Conahan and Ciavarella. (App. 544-45.)
The total paid by check and wire transfer was $590,000. (App. 539-45.)
Ciavarella admitted during his testimony that he and Conahan received the payments and concealed them, but maintained they were actual rent. (App. 1235-
36, 1255-57.) He acknowledged the condominium was a hollow shell when
Powell paid the “rent” money. (App. 1262-67.).
5. Cash Payments ($143,000).
Ciavarella and Conahan quickly spent the $2,497,600 given to them by
Mericle. (App. 559.) Shortly after the judges received the final $150,000 payment from Mericle, they began demanding cash from Powell. (App. 564-66.) When
Powell balked, Ciavarella and Conahan threatened ruin if he did not pay. (App.
567, 569-71.) Powell understood that the money being demanded was the quid pro quo for doing business with Luzerne County. (App. 568.) Powell, fearing financial ruin, paid the judges. To conceal the cash payments and prevent the filing of CTRs, Powell and others acting at his request obtained cash from
Powell’s bank accounts in amounts under $10,000. (App. 571-72.) Patrick
Owens, Powell’s CFO, accountant and bookkeeper, was involved in preparing and
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cashing checks to obtain $143,000 in cash. (App. 701-02, 704, 718.) Jill Moran, an attorney at Powell’s law firm, delivered at least three cash payments to
Conahan. (App. 756-60.) Additional cash payments were transferred to Conahan through Conahan’s tipstaff. (App. 740-42).
Owens kept meticulous records of every penny taken by Powell from PA
Child Care or any other corporation in which Powell had an ownership interest.
(App. 719-22.) Powell was not able to take money out of PA Child Care or
Western PA Child Care without it being recorded. (App. 722.) Draws by Powell were treated as income to him. (App. 724.)
6. Sentencing
The PSR recommended a total offense level of 43, Criminal History
Category I, and an advisory imprisonment range of life. (PSR ¶¶87, 90, 115.) The
PSR held Ciavarella responsible for $2,585,500 in loss (PSR ¶49, 65), vulnerable juvenile victims (PSR ¶¶48, 67), a large number of victims (PSR ¶¶ 48, 68) and obstruction (PSR ¶¶54, 70). Ciavarella objected to the report, arguing that the enhancements relied upon Powell’s credibility. (Defendant’s Objections to PSR, p.1.) Although conceding that the “preponderance of the evidence” applied,
Ciavarella objected on the ground that the jury purportedly rejected Powell’s
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testimony and that the court should not consider “acquitted conduct” in calculating the guidelines. (Defendant’s Objections to PSR p.1.)
The district court held a pre-sentence conference to consider the objections.
(Supplemental Appendix1 1.) The defense did not allege that the record was insufficient to support the enhancements, but rather that the court should not consider the purported acquitted conduct. (Supp. App. 3-4.) With references to trial testimony and facts elicited at trial (Supp. App. 8-16, 23-26), the parties argued the credibility of the witnesses (Supp. App. 4-5, 11-13, 16-17) and the inferences which could be drawn from the evidence and verdict (Supp. App. 3, 5-
10, 16-22). The court deferred ruling on the objections. (Supp. App. 22.) The defense offered no objection to this process and reported that it planned only to present testimony from family members and close friends at sentencing. (Supp.
App. 35.) Thereafter, the court issued a memorandum containing responses to the objections. (App. 44.1-44.2.) The court ruled that there “is a preponderance of the evidence and reliability in Powell’s testimony dealing with the acquitted counts, as well as, the convicted Counts.” (App. 44.1.) The court additionally found the following:
1The transcript of the Pre-Sentence Conference was not included in the appendix submitted by Ciavarella and is being submitted as a supplemental appendix (“Supp. App.”).
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While there was no evidence of the number of kids put away, there was evidence of the defendant’s financial interest, which remained undisclosed while he supported Mericle’s interest in the juvenile facility. Robert Powell testified that the defendant kept a record of the number of kids he put in the facility, as well as, the amount of money Powell was making. He made demands for money because the money from Mericle ended. Defendant allegedly told Powell ‘... so it’s not about me sending kids anymore. I know how much money you’re making, and it’s time to step up.’ There is other evidence, none direct, from which the same may be reliably inferred. For the foregoing reasons, the Objections are denied.
(App. 44.2)(Internal citations to record omitted).
At sentencing, the court noted there were no unresolved objections and the parties were given an opportunity to present evidence. (App. 1466.) The defense attempted to rebut accusations of Ciavarella’s judicial misconduct and argued for a downward variance from the advisory sentencing range. (App. 1469-72, 1475-79).
Ciavarella testified at the sentencing proceeding and denied taking any kickbacks or bribes. (App. 1480-94.) After reviewing the applicable § 3553(a) factors, the government requested that Ciavarella be sentenced “for the rest of his natural life.”
(App. 1494-1501.) After noting it considered the 3553(a) factors, the district court imposed a sentence of 336 months, $1,200 in special assessments, and three years of supervised release. (App. 1503-4.)
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STATEMENT OF RELATED CASES
This case has not been before this Court previously.
The following Middle District of Pennsylvania cases are related to this case:
United States v. Michael Conahan, 3:09-CR-000272;
United States v. Robert Powell, 3:09-CR-00189; and
United States v. Robert Mericle, 3:09-CR-00247.
Mericle is pending sentence. Conahan and Powell have been sentenced and neither appealed.
Appellee’s counsel is unaware of any other related cases or proceedings which are or have been pending before this or any other court or agency, state or federal.
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SUMMARY OF ARGUMENT
I. Ciavarella asserts that the Trial Court’s conduct conveyed a message that the court “loathed” Ciavarella. In support of his assertion, Ciavarella selectively offers only four short excerpts of letters from the court to members of the public, argument that the court relied upon ex parte material to reject a plea agreement, and alleged comments by the court to a reporter.
Ciavarella’s claims are overstated. The Court did not display deep-seated and unequivocal antagonism of the sort to cause a reasonable person to question the Court’s impartiality, did not rely upon information acquired outside the proceedings, and did not make comments to a reporter.
The Court did not abuse its discretion when it denied the recusal motion.
II. Ciavarella claims the District Court abused its discretion when it excluded statements made by a prosecutor during the guilty plea proceeding of
Robert Mericle, which Ciavarella offered as an admission under F.R.E. 801(d)(2).
The statements offered were not “clear and unambiguous statements of fact,” were not “[clearly] inconsistent” with assertions at trial and were not
“equivalent to testimonial statements.”
The Court did not abuse its discretion when it excluded the statements.
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III. Ciavarella claims the Court improperly limited his cross-examination of government witnesses Robert Powell and Patrick Owens and that he was prevented from demonstrating “Powell was stealing money from various companies, including PA Child Care, to support his lavish lifestyle.” Ciavarella made no offer of proof of a basis for the proposed Powell questions. The Court properly limited cumulative testimony of Owens.
The District Court did not abuse its discretion when it limited the cross- examination.
IV. Ciavarella argues the Court should not have permitted the government to introduce evidence of Ciavarella’s failure to recuse himself in cases involving
Mericle and Powell, claiming the evidence “was not relevant” or was “unfairly prejudicial.” Ciavarella’s failure to recuse himself from matters involving
Mericle and Powell constituted intrinsic evidence of the honest services fraud charges as it was material to prove knowing participation in a scheme and artifice to defraud.
The Trial ourt did not abuse its discretion when it permitted the testimony.
V. Ciavarella argues that the mailing of false statements of financial interests with the Administrative Office of the Pennsylvania Courts cannot form the basis of an honest services prosecution under Skilling v. United States.
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Each honest services mail fraud count charged Ciavarella with depriving the citizens and the Judiciary of their right to his honest and faithful services through
“bribery, kickbacks, and the concealment of material information.” Moreover, the
Trial Court explicitly instructed the jury that it could not return a guilty verdict on the mail fraud counts “if you do not find that the government proved beyond a reasonable doubt that a bribe or a kickback was paid in connection with the alleged...mail fraud counts.”
The government proved Ciavarella’s intent to defraud and that the scheme was furthered through the use of mails by showing he mailed false statements of financial interests to cover up the kickbacks through concealment.
VI. Ciavarella argues that there was insufficient evidence to establish that the payments which formed the basis for the three RICO predicate wire fraud charges, the honest services mail fraud counts, racketeering conspiracy and money laundering conspiracy were quid pro quo bribes, kickbacks or were derived from any illegal activity.
Ciavarella’s argument is based upon the flawed assumption that Mericle’s intent is the only relevant intent. Even without considering Mericle’s intent, the evidence established that Ciavarella participated in a criminal scheme with
Conahan and Powell to pay bribes and kickbacks.
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Ciavarella cannot meet his very heavy burden regarding insufficiency since the verdict was supported by the evidence taken in the light most favorable to the government. Moreover, the District Court’s jury instructions specifically set forth the meaning of “bribery,” “kickbacks,” “quid pro quo” and the need for proof beyond a reasonable doubt that a bribe or kickback was paid in connection with the scheme.
VII. Ciavarella argues that Counts One (RICO), Two (RICO Conspiracy) and Twenty-One (money laundering conspiracy) are barred by the statute of limitations. The statute of limitations is an affirmative defense that is waived if not raised in the District Court. Ciavarella waived it because he failed to raise it.
In any case, the statute of limitations did not run on any of the counts since the indictment was returned within five years of the last overt and/or predicate acts.
Ciavarella also claims that Count Seven (honest services mail fraud) is beyond the statute of limitations. However, he had previously waived the statute of limitations in a plea agreement he entered with the government.
VIII. Ciavarella objects that the District Court made findings of fact at his sentencing which Ciavarella believes were inconsistent with the jury verdict. He reasons that because he was acquitted of all offenses relating to Powell.
Therefore, he argues, Powell was not credible. This is simply inaccurate as
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Ciavarella was convicted of receiving kickbacks and failing to declare income during years where the only kickbacks paid were by Powell. In any event, a court may consider acquitted conduct as relevant sentencing conduct so long as it has been proven by a preponderance of the evidence. Moreover, credibility determinations are the province of the fact finder and are not reviewable. It is clear that the District Court relied on the record at trial and not on misinformation, as Ciavarella alleges. The District Court found that Ciavarella committed serious crimes and victimized numerous juveniles and litigants. The procedures used to sentence him below his guideline range were reasonable.
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ARGUMENT
I. The District Court properly denied Ciavarella’s motion for recusal.
Ciavarella asserts that “the totality of Judge Kosik’s pre-trial and trial conduct conveyed a message that he loathed Ciavarella and believed he accepted bribes, thus warranting disqualification under section 455(a).” See Brief for
Appellant (hereinafter “App. Brief”), p. 22. Ciavarella also asserts the judge’s
“conduct also demonstrated a personal bias warranting disqualification under section 455(b)(1).” Id.
None of the grounds identified by Ciavarella are sufficient to require recusal under the principles described by the Supreme Court in Liteky v. United States,
510 U.S. 540 (1994) and by this Court in its opinions discussing Title 28, § 455.
The judicial conduct Ciavarella complained of occurred during the routine administration of the Court’s duties, including answering correspondence, and in the course of issuing judicial rulings. None of the complained of conduct relied upon knowledge acquired outside of the proceedings nor displayed deep-seated and unequivocal antagonism of the sort to cause a reasonable person to question the Court’s impartiality.
This Court has held that under § 455, a judge must “disqualify himself in any proceeding in which his impartiality might reasonably be questioned.” United
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States v. Bertoli, 40 F.3d 1384, 1412 (3d Cir. 1994)(“‘The judge does not have to be subjectively biased or prejudiced, so long as he appears to be so.’”)(quoting
Liteky v. United States, 510 U.S. 540, 553 n. 2 (1994)); In re Kensington Int’l Ltd.,
353 F.3d 211, 220 (3d Cir. 2003). The Supreme Court has stated that beliefs or opinions that merit recusal generally must stem from an extrajudicial source,
Liteky, 510 U.S. at 554 (1994); “for example, if a judge has acquired a dislike of a litigant because of events occurring outside of the courtroom a duty to recuse might ensue.” United States v. Vampire Nation, 451 F.3d 189, 208 (3d Cir. 2006).
The reason for the extrajudicial source rule is that “[t]he judge who presides at trial may, upon completion of the evidence, be exceedingly ill disposed towards the defendant, who has been shown to be a thoroughly reprehensible person. But the judge is not thereby recusable for bias or prejudice, since his knowledge and the opinion it produced were properly and necessarily acquired in the course of the proceedings, and are indeed sometimes (as in a bench trial) necessary to completion of the judge’s task.” Litecky v. United States, 510 U.S. 540, 550-51
(1994). “Because the focus is on the source of the judge’s views and actions,
‘judicial rulings alone almost never constitute a valid basis for bias or partiality motion.’” In re Community Bank of Northern Virginia, 418 F.3d 277, 320 (3d Cir.
2005) quoting Liteky, 510 U.S. at 555; United States v. Grinnell Corp., 384 U.S.
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563, 583 (1966). A court has an affirmative duty to deny a motion to recuse if recusal is unnecessary. Davis v. C.I.R., 734 F.2d 1302, 1303 (8th Cir. 1984).
Excerpts of Letters
As evidence that the Court should have granted recusal, Ciavarella identifies only four excerpts of letters written by the Court as part of the Court’s handling of more than 170 letters received from members of the public.2
Wojack and Spohrer Letters
Shortly after Ciavarella and his co-defendant Michael Conahan entered guilty pleas, the Court received a letter from a citizen, Robert Wojack. (App.
1506.) In the letter, Mr. Wojack expressed his unfavorable opinion of the conduct of Ciavarella and Conahan. (App. 1506.)
The Court responded to the letter on the same day it was received:
Dear Mr. Wojack:
2Although a sentencing court, in a case of public interest, has discretion to ignore public sentiment expressed in letters from members of the public, the law does not require the court to do so. United States v. Covert, 45 Fed. Appx. 100, 101 (3d Cir. 2002)(pursuant to I.O.P. 5.7, this unreported opinion is cited for persuasive value only). The Court noted at sentencing that the Court responded to some letters from the public in the context of the Conahan and Ciavarella guilty pleas, but that there were an additional 170 or 171 letters from the public which were never responded to for “fear of the potential influence of people’s opinions on whatever judgment we have to have.” (App. 1465.)
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Thank you for your letter and expressed concerns over the corruption which has come to light in Luzerne County, and most seriously with the courts.
My personal opinions are in complete sympathy with those you express. The only difference is that my personal beliefs cannot guide my responsibility and judgments.
As you know, the government has entered into an agreement with the defense with regard to the sentence which is binding if neither side rejects it. According to the government, this resulted because of the legally questionable Count I of the Indictment. To proceed, it would result in litigation and appeals which could extend any finality in the case for at least one year. I need to determine if the government’s reasoning is correct, and I must do so as detached as possible...3
(App. 1507)(emphasis added).
On March 2, 2009, the Court received a letter from citizen George Spohrer who had recently retired from the practice of law. (App. 1508-09.) As evidence of the Court’s purported bias, Ciavarella cites the portion of the Court’s response in which the Court states: “...In 1949, when I first applied to law school, the
Luzerne County Bench was first among county courts in Pennsylvania. What a fall! Francis Bacon, in his essay on ‘Judicature,’ in writing about judges wrote
3The excerpt of the Court’s letter quoted in the Brief for Appellant Ciavarella fails to include the italicized references by the Judge to his obligation to set aside personal opinions and to be guided by the law. See App. Brief, p. 23.
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that above all things, integrity is their lot and proper virtue; the landmark, and he that removes it corrupts the fountain.” (See App. Brief, p. 23.)
When the judge responded to the Wojack and Spohrer letters, Ciavarella and
Conahan had already entered widely publicized guilty pleas to felony charges.
Although briefly referencing personal opinions, the Court’s responses to Wojack and Spohrer contained clear references to the fact that the Judge intended to be guided by the law and not by personal opinions: “my personal beliefs cannot guide my responsibility and judgments” (Wojak Letter, App. 1507); “[i]f personal opinions were our only guide...” (Spohrer Letter, App. 1510.) In addition, the
Court’s mention in the Spohrer letter that the Luzerne County Bench had suffered a fall did not reflect a personal bias against Ciavarella and would not suggest to a reasonable person that the Judge could not act impartially. Rather, the characterization was one that no reasonable person would dispute after entry of felony guilty pleas by two Luzerne County judges. Nothing in the Court’s response to either Wojack or Spohrer suggests that the Court had formed an opinion about Ciavarella based upon information obtained from an extra-judicial source.
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Koslek Letter
On February 24, 2010, the Court received a letter from Mary and Thomas
Koslek who wrote to the Court to complain about a decision of former Judge
Conahan. (App. 1511.) The letter addresses complaints against Conahan. The only reference to Ciavarella is a passing reference to “the recent legal problems of
Luzerne County Judges (Conahan and Ciavarelli)”(sic).
As evidence of the court’s purported bias, Ciavarella cites the following from the Court’s responsive letter: “...This is just another example of why Judge
Conahan and his cohort have been indicted.” (App. 1512.) That the Court compared the allegations of corruption made by the Kosleks to the allegations of corruption contained in the Indictment does not give rise to a conclusion that the
Court was biased against Ciavarella. The Court merely commented on the fact that the Kosleks’ allegations were similar to the allegations contained in the indictment. Nothing in the Court’s response suggests that the Court had formed an opinion about Ciavarella based upon information obtained from an extra- judicial source. At worst, the Court’s comparison of the Koslek’s allegations of impropriety to the allegations of the indictment imparts a tone of mild dissatisfaction. The law is clear that“[n]ot establishing bias or partiality, however are expressions of impatience, dissatisfaction, annoyance, and even anger, that are
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within the bounds of what imperfect men and women, even after having been confirmed as federal judges, sometimes display.” Litecky, 510 U.S. at 555-56
(emphasis in original).
Cressman Letter
The letter of Rosemarie Cressman, dated April 30, 2010 and excerpted at page 24 of the Brief for Appellant, was clearly prompted by the filing of the
Conahan plea agreement the previous day and is specifically directed at requesting a maximum prison sentence for Conahan, not Ciavarella: “[f]ind it in your heart to give him the maximum sentence. I realize there are guidelines but you have the discretion to heal so many wounds and restoring the faith of so many by making
Conahan serves [sic] the full twenty years which in my opinion is not nearly enough.” (App. 1513.)
Nothing in the Court’s response to Ms. Cressman even remotely suggests bias against Ciavarella. The Court’s entire response follows:
Dear Ms. Cressman,
Thank you for your letter dated April 30, 2010, and received by me on June 14, 2010. I am sorry justice is so slow, but ultimately I hope you find it to be true. Sincerely,
Edwin M. Kosik United States District Judge (App. 1514.)
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Reliance Upon Material from Probation Officers, PSRs and the Media to Reject the Initial Plea Agreement
The District Court declined to accept the binding plea agreement in this case, noting: “[w]e cannot accept the binding plea agreements’ stipulation and terms as to the sentence to be imposed, pursuant to the Court’s right of discretion as the sentencing court.” (App. 22.) The Court’s memorandum rejecting the plea agreement noted that:
Defendant Ciavarella...has resorted to public statements of remorse, more for his personal circumstances, yet he continues to deny what he terms ‘quid pro quo’ his receipt of money as a finder’s fee, notwithstanding the Government’s abundance of evidence of his routine deprivation of children’s constitutional rights by commitments to private juvenile facilities he helped to create in return for a ‘finder’s fee’ in direct conflict of interest with his judicial roles. Such denials are self serving and abundantly contradicted by the evidence the Government proffers as offense conduct. The Government is not required to show express or explicit promise to perform official acts in return for payment.
(App. 21.)
Ciavarella argues that these statements indicate that, in rejecting the plea agreement, the District Court relied upon “ex parte material from probation officers, presentence reports and the media” and that this material rested on
“hearsay and factually disputed evidence.” App. Brief, p. 24. Ciavarella further complains that the Court’s statement that “Ciavarella accepted quid pro quo bribes and that he engaged in the ‘routine deprivation of children’s constitutional rights’
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reflects his (the Court’s) degree of personal disdain for Ciavarella and conveys an appearance of partiality.” (App. Brief, p. 25.)
A review of the record reveals that the Judge’s reasons for rejecting the plea agreement were appropriate and arose entirely from the judicial record.
The law is clear that “opinions formed by the judge on the basis of facts introduced or events occurring in the course of the current proceedings, or of prior proceedings, do not constitute a basis for a bias or partiality motion unless they display a deep-seated favoritism or antagonism that would make fair judgment impossible.” Liteky 510 U.S. at 555. As the Supreme Court noted in Liteky: “not subject to deprecatory characterization as ‘bias’ or ‘prejudice’ are opinions held by judges as a result of what they learned in earlier proceedings. It has long been regarded as normal and proper for a judge to sit in the same case upon its remand, and to sit in successive trials involving the same defendant.” Litecky v. United
States, 510 U.S. 540, 551 (1994).
Contrary to Ciavarella’s claim, the Court’s statement that Ciavarella accepted quid pro quo bribes and engaged in routine deprivation of children’s constitutional rights, (App. 21), did not reflect the judge’s personal disdain for
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Ciavarella but rather merely restated undisputed facts which the Judge properly learned from the PSR disclosed in connection with Ciavarella’s guilty plea.4
At the time the guilty plea on the failure to disclose honest services fraud theory was rejected, the District Court was fully aware from the record that
Ciavarella did not accept responsibility for his acceptance of quid pro quo bribes.
Although the Information alleged that Ciavarella derived income “in exchange for official actions and anticipated actions,” (See Information p. 3), the written colloquy presented to the Court at the time of Ciavarella’s guilty plea contained no such admission and noted that “the government and the defendants are not in complete agreement at this time on all of the facts alleged in the Information.”
(See Supp. App., pp. 60-61.) The PSR for the guilty plea confirmed that Ciavarella and Conahan accepted quid pro quo bribes or kickbacks “[i]n exchange for official actions and anticipated official actions” that were delineated. (PSR, ¶ 7.)
Ciavarella did not object to these facts before the Court rejected the plea agreement. (App. 24.)
4Although he claims on appeal that the Judge relied upon “hearsay and factually disputed evidence” to reject the plea agreement, the facts from the PSR were undisputed since Ciavarella did not object to them. (App. 24.) The District Court highlighted this point in its opinion denying the recusal motion. (App. 27 n. 1.)
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The PSR also contained findings of Berks County Senior Judge Arthur
Grim that “there was routine deprivation of children’s constitutional rights to appear before an impartial tribunal and to have an opportunity to be heard.” (PSR
¶ 109.) Ciavarella also did not object to these facts. (App. 24.)
The PSR also referenced public statements of remorse made by Ciavarella after his plea agreement was filed: “On February 8, 2009, I publicly admitted that I disgraced my judgeship through a letter to the Court of Common Pleas of Luzerne
County.” (PSR ¶ 69.)
Alleged Extrajudicial Comments to a Reporter
Ciavarella asserts that “[o]n August 2, 2009, two days after Judge Kosik’s rejection of the plea agreement, the Citizens Voice newspaper published a story describing extrajudicial comments Judge Kosik made to a news reporter.” (See
App. Brief, p. 25.) Ciavarella cites authority for the proposition that recusal is necessary when a judge grants interviews to the press leading to published comments that create an appearance the judge is not acting impartially. Id. at 27.
Unlike the facts in the cited cases, there is no evidence Judge Kosik gave an interview or spoke directly to a reporter. The cited article states only that “U.S.
District Judge Edwin M. Kosik dissected the flawed logic of two disgraced former judges a few minutes after their partner in kickbacks, attorney Robert J. Powell,
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pleaded guilty early last month to corruption charges.” (App. 71.) 5 According to the article, after the Powell guilty plea, the judge “stood near an elevator outside his courtroom and casually discussed what had just happened therein”; the article does not indicate with whom the purported discussion took place. (App. 71.) The wording of the article suggests that it is based on something the reporter thinks he heard the judge say to someone else more than a month before the article appeared.6 The trial Judge, in his memorandum denying the recusal motion, states unequivocally that he gave no such interview in this case: “I do not deny ever speaking with media persons, but never to discuss any case or person charged.”
(App. 28-29.)7 In addition, as the District Court accurately noted in its opinion
5Powell entered a guilty plea on July 1, 2009, a month before the cited article was published. See Middle District of Pennsylvania Docket for case number 3:09-CR-189, docket entry #10.
6Ciavarella appears to characterize the Judge’s purported statements as having been made directly to the reporter, referring to them as “extrajudicial comments Judge Kosik made to a news reporter.” See App. Brief, p. 25. However, in his pre-trial motion for recusal, Ciavarella claimed the statements were made to the reporter “either directly or indirectly,” App. 68-69, suggesting that Ciavarella himself recognizes that there is no evidence to support the conclusion that the comments attributed to the Judge were spoken directly to the reporter.
7Remarkably, with no evidence the Court gave a statement to the press, made other extra-judicial statements, or attempted to conceal anything, Ciavarella nevertheless launches a baseless attack on the integrity of the Court asserting that the Judge’s “credibility was at issue,” that the Court “should have submitted to an
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denying the recusal motion, the cited article, with the exception of editorializing in the opening paragraph, appears to be based on comments made by the judge in open court and in the memorandum rejecting the binding plea agreement. (App.
30.)
“The decision whether a judge’s impartiality can ‘reasonably be questioned’ is to be made in light of facts as they existed, and not as they were surmised or reported.” Cheney v. United States District Court for the District of Columbia, 541
U.S. 913, 914 (2004) citing Microsoft Corp. v. United States, 530 U.S. 1301, 1302
(2000). There are no facts to establish that Judge Kosik made a statement to any reporter. The trial Judge, in denying the recusal motion, applied the correct legal standard noting that “although public confidence may be as much shaken by publicized inferences of bias that are false as by those that are true, a judge considering whether to disqualify himself must ignore rumors, innuendos, and erroneous information published as fact in newspapers.” See App. 31, quoting In re United States, 666 F.2d 690, 695 (1st Cir. 1981).
None of Ciavarella’s stated reasons warrant the trial Judge’s disqualification since no reasonable person, with knowledge of all the facts, would conclude that evidentiary inquiry about his personal bias and any other extra-judicial statements” and that such an inquiry “would have opened a door which...(the Judge) wanted to keep shut.” See App. Brief, p. 28.
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the Judge’s partiality might reasonably be questioned. Thus, the District Court did not abuse its discretion in denying the recusal motion.
II. The Court did not abuse its discretion by excluding evidence of a purported admission by government counsel.
Ciavarella argues that the Court should have permitted him to introduce evidence in his case-in-chief of statements made by government counsel during the guilty plea proceeding of Robert Mericle. See App. Brief, pp. 30-35.
Ciavarella claims the proffered statements amounted to an admission by a party opponent within the meaning of Federal Rule of Evidence 801(d)(2). Id. at 30.
The United States responds that the statement made at Mericle’s guilty plea was not inconsistent with the United States’ position throughout the prosecution of
Ciavarella and Conahan, namely, that there was a conspiracy between Ciavarella,
Conahan, Powell and others to pay, receive and disguise kickbacks in exchange for official action. Thus, the Court did not abuse its discretion by excluding the contested evidence since, as the Court properly ruled at trial, the statements of government counsel related only to the intent of Mericle and not to the intent of
Powell, Conahan and Ciavarella.8
8The Court properly found at trial that the statements of government counsel made during the Mericle plea colloquy were made to clarify the mental state of Mericle and did not relate to the intent of Powell or the other participants. (App.
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Statements of counsel offered under Rule 801(d)(2) must be “clear and unambiguous statements of fact.” See Pivirotto v. Innovative Systems, Inc., 191
F.3d 344, 358 (3d Cir. 1999), citing United States v. McKeon, 738 F.2d 26, 30 (2d
Cir. 1984), Rhoades, Inc. v. United Air Lines, Inc., 340 F.2d 481, 484 (3d Cir.
1965). One Court of Appeals has suggested a three-part test to determine whether prior statements by a prosecutor (from an opening statement in a prior trial) were admissible against the government:
First, “the district court must be satisfied that the prior argument involves an assertion of fact [clearly] inconsistent with similar assertions in a subsequent trial.” Second, the court must determine “that the statements of counsel were such as to be the equivalent of testimonial statements” made by [the party]. Last, the district court must determine by a preponderance of the evidence that the inference that the proponent of the statements wishes to draw “is a fair one and that an innocent explanation for the inconsistency does not exist.”
United States v. Salerno, 937 F.2d 797, 811 (2d Cir. 1991), rev’d on other grounds, 505 U.S. 317 (1992) (quoting United States v. McKeon, 738 F.2d 26, 33
(2d Cir. 1984).
1055-58.) Even assuming the statements should have been admitted, Ciavarella was not prejudiced by their exclusion. He quoted them in his opening statement (App. 239-242) and argued in closing that Mericle “acknowledged with a prosecutor standing there that this was not a bribe or a kickback.” (App. 1335). He further argued he was “fighting inconsistent positions taken by the government.” (App. 1336.)
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The statements of government counsel during the Mericle plea colloquy were not “clear and unambiguous statements of fact.” Similarly, the statements are not “[clearly] inconsistent with similar assertions in a subsequent trial” nor can government counsel’s statements be interpreted as “equivalent to testimonial statements.” Moreover, given the government’s consistently articulated position that Powell, Conahan and Ciavarella intended the Mericle payments as kickbacks/bribes is not inconsistent with Mericle’s stated belief that he didn’t think that what he was doing was illegal.
During the Mericle plea colloquy, government counsel had the following discussion with the Court: * * *
MR. ZUBROD: ...Referral fees are a common place practice. They are a legal practice in real estate and in the building market. Fee splitting between the parties, for example, between Judge Ciavarella and Mr. Powell, that kind of fee splitting is also a common practice in the real estate business. As the Court would know, if someone buys a house and there is a - - there is a realtor representing one party, a realtor representing the other, they split the fee which, is in essence a finder’s fee.
THE COURT: I don’t know that, but go ahead.
MR. ZUBROD: All right. This is not a kickback or a bribe in any sense. It is a common practice. It is not a legal (sic) quid pro quo. It is a common practice between businessmen in real estate transactions. Mr. Mericle simply paid a finder’ (sic) fee to the judges in accordance with standard practice. To him, his payment of the fee
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was what he had done hundreds of times before and was not related to the office that the judges held or any decisions by the judges. He had contracted with a private party, Mr. Powell, to build a business - - a private business. The judges steered Mr. Powell to Mr. Mericle because he can build the building cheaper than anyone else. In fact, he was the lowest bidder. That is why Mr. Powell chose him.
(App. 1536-37.)
The statements by government counsel did not constitute an admission that the payments by Mericle were not kickbacks or bribes as to the involvement of
Powell, Conahan and Ciavarella. It is noted that government counsel’s statement,
“this is not a kickback or a bribe in any sense,” refers to the “practice” of paying a finder’s fee, not to the specific payments in this case. This is clear from the context provided by the statement that immediately preceded it (“if someone buys a house and there is a – there is a realtor representing one party, a realtor representing the other, they split the fee which, is in essence a finder’s fee”) and the statement that immediately followed it (“It is a common practice.”)
Government counsel’s statement, “Mr. Mericle simply paid a finder’s fee to the judges in accordance with standard practice,” refers to the government’s understanding, on the date of the plea, of Mericle’s intent, as expressed by
Mericle, for making the payments. That the statement refers to Mericle’s intent only, and not to the intent of Powell, Ciavarella and Conahan, is evidenced by
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government counsel’s immediate reference to Mericle’s state of mind: “[t]o him, his payment of the fee was what he had done hundreds of times before and was not related to the office that the judges held or any decisions by the judges.” See
(App. 1537.) (emphasis added).
The fact that counsel’s statement referred to Mericle’s intent only, and not to the intent of Powell, Conahan and Ciavarella is also evidenced by a later exchange between government counsel and the Court:
THE COURT: What you’re suggesting is that any relationship Mr. Mericle had to the juvenile centers that were constructed by him or his company was entirely different than any relationship that may have existed between Mr. Powell and the two judges that you were referring to; is that correct?
MR. ZUBROD: That’s correct, Your Honor. In fact, Mr. Powell was paying money and he understood it to be a quid pro quo that he would not get juveniles anymore if he didn’t pay up the money. And he paid over $700,000 for that purpose.
(App. 1539.)
Notably, since Mericle was pleading guilty to misprision of a felony for failing to report a tax crime, the government did not have to prove Mericle’s intent to pay a kickback/bribe to the judges. For purposes of the plea, there was no need for the government to contest Mericle’s claims that he intended the payments as finders’ fees.
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The government has consistently taken the position that Powell, Conahan and Ciavarella intended the Mericle payments as kickbacks/bribes and that the convoluted financial transactions they initiated to hide the payments are evidence of their intent. For example, even the original Information filed in this case made clear the government’s position that the Mericle monies were part of a kickback/bribery scheme. See Information ¶ ¶ 4, 5, 11. The Information made clear that the official actions from which the judges derived improper income included “facilitating the construction of juvenile detention facilities and an expansion to one of those facilities by PA Child Care and Western PA Child Care,
LLC.” See Information, ¶ 5. The Indictment and Superseding Indictment continued this consistent theme. See Indictment, ¶¶ 4, 5, 11, 70 and 73;
Superseding Indictment, ¶¶ 4, 5, 11, 70, 72, and 75.
Finally, the evidence introduced at trial through the testimony of Mericle was that Mericle did not perceive the payments to be illegal kickbacks/bribes at the time he made them. (App. 462.) Thus, there was no inconsistency between the trial testimony and the statements of the government at Mericle’s guilty plea.
The government has consistently and clearly articulated a kickback/bribery theory of prosecution as it relates to the intentions of Powell, Conahan and
Ciavarella vis-a-vis the Mericle money and the statements of government counsel
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during the Mericle plea colloquy are consistent with that theory. Thus, Ciavarella was properly precluded from introducing the statements as admissions of a party opponent at trial.
III. The District Court did not abuse its discretion by limiting cross- examination.
Ciavarella argues the district court “erred in completely barring the cross- examination” of Powell and his accountant, Patrick Owens. See App. Brief, p. 35.
He makes this argument even though counsel’s wide-ranging cross-examination of
Powell consumes 45 pages of trial transcript. (App. 635-79, 689-90). Ciavarella claims on appeal that through limitation of his cross-examination of Powell and
Owens, he was prevented from demonstrating that “Powell was stealing money from various companies, including PACC, to support his lavish lifestyle.” App.
Brief, p. 35.
The United States responds that Ciavarella does not dispute that the challenged limitation placed on his cross-examination of Owens related solely to the “period when Powell claimed he was paying Conahan cash as part of this scheme.” App. Brief, p. 38. That Ciavarella was not prejudiced by the Court’s limitation of his cross-examination is reflected in the fact that Ciavarella was acquitted of all racketeering acts and counts of the Indictment relating to the
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alleged cash payments from Powell. (App. 187-90.). Thus, even if there was error in limiting cross-examination, it was harmless beyond a reasonable doubt. See
Delaware v. VanArsdall, 475 U.S. at 681-83 (harmless error analysis applies to
Confrontation Clause violations). Nevertheless, notwithstanding that the issue was rendered moot by reason of Ciavarella’s acquittal of all of the counts involving the cash payments (Ciavarella having admitted receiving all of the other funds from Powell and/or Mericle), a review of the evidence reveals that the
United States must prevail on the merits of Ciavarella’s claim.
During the cross-examination of Powell, defense counsel asked Powell about specific credit card expenditures he made. (App. 665-667). After approximately 15 questions, the Court interrupted and asked counsel the relevancy of how Powell spent his money. (App. 667). In response, defense counsel stated:
“we are trying to show that this is an individual who led a high lifestyle, who had a lot of money available to him, and that under these circumstances...he would not have been in a position to have been extorted,” (App. 667.) This illogical response prompted the Court to ask whether counsel was suggesting that rich people cannot be extorted. (Id.).
After the Court’s inquiry and defense counsel’s response, government counsel objected to the line of questioning and the Court sustained the objection.
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(App. 668.) Defense counsel made no additional offer of proof to suggest a legitimate basis for the proposed line of cross-examination of Powell nor did he claim, as Ciavarella now claims on appeal, that the line of questioning would show that Powell was stealing PACC money. See App. 667-68; App. Brief, p. 37.9
On direct examination, Patrick Owens testified that in the summer of 2006 and continuing into 2007, Powell became short-tempered, paranoid and appeared to be under stress. (App. 200-01). Owens had previously testified that all of
Powell’s withdrawals from his companies were properly accounted for, (App. 722-
24.), and on cross-examination indicated he did not have any concerns in his own mind about the amount of money Powell was withdrawing from the companies in which Powell was 50% owner. (App. 726). Defense counsel questioned Owens about Powell’s specific withdrawals from his companies. (App. 727.)
The Court asked defense counsel, “Why are we going into this? What’s it got to do with this case?” (App. 727-28.) Defense counsel responded that “it’s our intent to show that Mr. Powell and the way he was acting during that period of time was unrelated to any claims of extortion, that Powell’s real motivation for
9At no time during trial or on appeal has Ciavarella proffered even a scintilla of evidence to support a good faith basis to believe Powell embezzled PACC money. At no time was he prevented by the Court from presenting such evidence. Ciavarella did not present any such evidence because there was none.
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what he has done and what he was claiming was really to cover up that he was taking money from this company without authority, without the knowledge of his partner.” (App. 728).10 However, defense counsel had already proved through cross-examination of Owens that Powell’s partner did not know about Powell’s withdrawals, (App. 726-27), and the Court sustained an objection to the cumulative questioning. (App. 727-28.) 11
The Confrontation Clause protects a criminal defendant’s right to cross- examine adverse witnesses. Delaware v. Fernsterer, 474 U.S. 15, 20 (1985) (per curiam). However, trial judges retain wide latitude insofar as the Confrontation
Clause is concerned to impose reasonable limits on cross-examination based on concerns about, among other things, harassment, prejudice, confusion of the
10Counsel for the government concede that in the heat of trial, in the interest of leaving a “clean” record, they surmised that “the issue of paranoia...as a motive separate from the extortion may be marginally relevant” and suggested that the Court permit the proposed questioning. (App. Brief, pp. 39-40; App. 729-31). However, a careful review of defense counsel’s offer of proof and caselaw indicates the Court’s ruling was correct. That the testimony relating to “paranoia” was of marginal relevancy is highlighted by the fact that it was not mentioned in opening or closing arguments of either party.
11During a sidebar after ruling on this issue, the Court alluded to its responsibility not to permit repetitive testimony, even in the absence of a government objection, noting, “I think I have some responsibility in a trial, too, okay.” (App. 729). Defense counsel immediately responded, “You’re doing a very good job, Judge.” (App. 729.)
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issues, the witness' safety, or interrogation that is repetitive or only marginally relevant; “[t]he Confrontation Clause guarantees an opportunity for effective cross-examination, not cross-examination that is effective in whatever way, and to whatever extent, the defense might wish.” Delaware v. VanArsdall, 475 U.S. 673,
679 (1986) quoting Delaware v. Fensterer, 474 U.S. 15, 20 (1985) ( per curiam )
(emphasis in original).
IV. The Court did not abuse its discretion by admitting evidence of Ciavarella’s failure to recuse himself from cases involving Mericle and Powell.
Ciavarella argues the Court should not have permitted the government to introduce evidence of Ciavarella’s failure to recuse himself in cases involving
Mericle and Powell. See App. Brief, pp. 41-44. Ciavarella claims the evidence
“was not relevant” or, in the alternative, was “unfairly prejudicial.” See Brief of
Appellant, pp. 42-44.
The Court properly ruled at trial that Ciavarella’s failure to recuse himself from matters involving Mericle and Powell constituted intrinsic evidence of
Ciavarella’s guilt on the honest services fraud counts of the Superseding
Indictment.
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Ciavarella’s argument that the evidence was not relevant neglects the fact that, as part of the honest services fraud charges, the government was required to prove not only bribes or kickbacks but also a “scheme or artifice to defraud.”
Proof is required of specific intent and the defendant must either have devised the fraudulent scheme himself or have willfully participated in it with knowledge of its fraudulent nature. United States v. Pearlstein, 576 F.2d 531, 537
(3d Cir. 1978) (citations omitted). Thus, evidence of Ciavarella’s concealment of material facts, despite an affirmative duty to disclose them, was pertinent to prove his intent to defraud and was one of the ways the Government properly proved his willful participation in the scheme. The failure to disclose information may constitute a fraudulent representation if a defendant is under a duty to make such a disclosure, the defendant actually knew such disclosure ought to be made, and the defendant failed to make such disclosure with the intent to defraud. See, e.g.,
Third Circuit Model Jury Instruction 6.18.1341-1. Ciavarella admitted at trial that he had an affirmative duty to disqualify himself in cases involving Mericle and
Powell and that he made an intentional, conscious decision not to do so. (App.
1284-85.)
The admitted testimony also was material to prove Ciavarella and Conahan engaged in a scheme and artifice to defraud the citizens and the judiciary of their
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right to the honest services of Ciavarella by “knowingly soliciting, extorting and accepting bribes and kickbacks as part of a generalized agreement to improperly exert influence on behalf of the bribe and kickback payers as specific opportunities arose to do so.” See Superseding Indictment, ¶ 75. The testimony of the attorney witnesses revealed that Ciavarella and Conahan not only failed to recuse themselves, but also that they took improper action favorable to Powell and
Mericle such as improperly granting injunctive relief and ruling on only one party’s motions. See Testimony of Stephen Carpenito, (App. 849-60) ; Testimony of Deputy Attorney General Timothy Keating, (App. 860-70); Testimony of
Lawrence Durkin, (App. 877-88); Testimony of Jeffrey McCarron, (App. 889-
917).
V. Ciavarella’s mailings of fraudulent Statements of Financial Interest were executions of an honest services mail fraud scheme.
Ciavarella argues that the mailing of false statements of financial interests with the Administrative Office of the Pennsylvania Courts cannot form the basis of an honest services prosecution under Skilling v. United States. See, Brief of
Appellant, pp. 44-46.
In Skilling v. United States, 130 S. Ct. 2896 (2010), the Supreme Court held that the honest services fraud statute criminalizes “only the bribe-and-kickback
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core of the pre-McNally case law.” Skilling v. United States, 130 S. Ct. at 2905
(emphasis in original); 18 U.S.C. § 1346.
The government agrees that mere concealment of material information cannot form the basis of an honest services prosecution under Skilling.
Ciavarella’s argument, however, neglects the fact that each honest services mail fraud count of the Superseding Indictment explicitly charges him with depriving the citizens and the Judiciary of their right to his honest and faithful services through “bribery, kickbacks, and the concealment of material information.” See,
Superseding Indictment p. 42. His argument also neglects that the Court explicitly instructed the jury that it could not return a guilty verdict on the mail fraud counts “if you do not find that the government proved beyond a reasonable doubt that a bribe or a kickback was paid in connection with the alleged...mail fraud counts.” (App. 1380.) Moreover, the government was required to prove not only bribes or kickbacks, but also that the bribes or kickbacks were part of a
“scheme or artifice to defraud.” The government proved at trial that Ciavarella engaged in a scheme to defraud and furthered this scheme through the use of mails by showing that he mailed false statements of financial interests with the
Administrative Office of the Pennsylvania Courts to hide the bribes and kickbacks he and Conahan were paid.
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VI. The evidence was sufficient to support the guilty verdicts on racketeering, racketeering conspiracy, honest services mail fraud and money laundering conspiracy.
Ciavarella argues that the jury’s guilty verdicts on Counts One, Two, Seven through Ten and Twenty-One are not supported by the evidence. See App. Brief, pp. 46-50.
Ciavarella argues that there was insufficient evidence to establish that the payments which formed the basis for the three wire fraud charges alleged as
Racketeering Act One of Count One were quid pro quo bribes or kickbacks. See
App. Brief, p. 47.12 For the same reason he claims there is insufficient evidence to support a finding that he committed honest services mail fraud (counts 7, 9 and
10) and racketeering conspiracy (Count 2). See App. Brief, pp. 48-50. Ciavarella additionally posits that because “the proceeds transferred to Ciavarella were not derived from any illegality,” the evidence was insufficient to establish he was part of a money laundering conspiracy (Count 1, Racketeering Act 13 and Count 21).
Id. at 49-50.
12The jury found Ciavarella committed Racketeering Act One through three separate honest services wire fraud offenses. (App. 183-84). The commission of any one of those offenses is sufficient to establish the commission of Racketeering Act One.
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Ciavarella’s argument is based on the flawed premise that evidence of the acts and Mericle’s intent to pay a “finder’s fee” of $997,600 to Ciavarella in 2003, and to pay other “finder’s fees” in 2005 and 2006, was the only evidence relevant to the challenged convictions. In reality, even without considering Mericle’s intent, the trial evidence established that Ciavarella participated in a wire fraud/mail fraud/money laundering scheme with Conahan and Powell to pay bribes and kickbacks to Conahan.
In July, 2001, Mericle told Ciavarella that he deserved the $1,000,000 referral fee built into the PA Child Care construction costs. (App. 412-15.)
Ciavarella agreed and directed Mericle to pay the fee to him through Powell.
(App. 415-16.) Payment of the referral fee would occur only after Mericle received final payment for the completed facility. (App. 418.) Mericle had no intention to pay a fee to Conahan; Ciavarella admitted that Mericle did not even know Conahan received a portion of the “referral fee” and that Ciavarella alone decided to pay Conahan. (App. 1210-11.)
The trial evidence established that bribes and kickbacks were paid to
Conahan at the direction of Ciavarella in exchange for Conahan’s official acts which permitted Ciavarella to collect the “referral fee” from Mericle. These acts included Conahan’s official acts as President Judge that led to financing for the
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facility, (App. 510-14), and to the closure of the county-run facility. (App. 516-
18.)
Ciavarella admitted at trial that he paid money to Conahan because Conahan
“was the individual who made it happen. He was the individual who allowed this facility to be built.” (App. 1197.) Since Conahan had done nothing to deserve a
“finder’s fee” from Mericle, this evidence gives rise to a reasonable inference that
Conahan received a continuing kickback and reward from Ciavarella and Powell in the form of payments in 2004, 2005 and 2006 for official actions Conahan took in 2001 and 2002 to facilitate the construction of the PA Child Care detention facility and to close the competing county-run facility.
As to Conahan, the evidence was sufficient to establish that all payments to
Conahan at the direction of Ciavarella and facilitated by Powell were bribes or kickbacks.
There is another theory of the evidence which supports a finding that the
$387,600 wire transaction charged as Racketeering Act 1.2 of Count 1 involved a bribe or kickback. Powell’s undisputed testimony that he paid the taxes on the
$387,600 (App. 528), taxes that otherwise would have been due from Ciavarella and Conahan, and that he also paid $10,000 to an attorney for facilitating wire transfers from Mericle to the benefit of Conahan and Ciavarella, gives rise to a
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reasonable inference that these payments by Powell were bribes to Conahan and
Ciavarella to assure their future favorable official actions in connection with PA
Child Care, and/or in connection with Powell’s anticipated future appearances before the judges in his capacity as an attorney.13
It is noted that the jury was fully aware of the requirement that the offense required a finding that a bribe or kickback was paid; the trial judge gave a detailed instruction to the jury on the meaning of “bribery,” “kickbacks” and “quid pro quo” and instructed that the charge of honest services wire fraud required proof beyond a reasonable doubt that a bribe or kickback was paid in connection with the alleged wire fraud scheme. (App. 1371-74, 1380.)
13As to Mericle, Ciavarella argues “the evidence is insufficient to prove a quid pro quo, i.e. that Mericle’s intent was to affect the future judicial actions of Ciavarella and Conahan.” See App. Brief, p. 48. This argument ignores a separate theory under which the evidence established that Ciavarella committed honest services wire fraud in connection with the wire transfers of the $997,600 “referral fee.” The theory is that, even if Mericle viewed the payment as a lawful referral fee, Ciavarella’s instruction for Mericle to pay it through Powell was given to make it appear as if Mericle had no financial relationship with Ciavarella. The concealment of the financial relationship between Mericle and Ciavarella furthered an on-going bribery scheme between Mericle and Ciavarella under which Mericle paid a series of bribes to Ciavarella for favorable treatment when Mericle business entities appeared before Ciavarella in litigation. The evidence showed that Mericle paid Ciavarella $5,000 in cash every year at Christmas (App. 439), that Mericle entities received favorable treatment from Ciavarella in litigation (App. 849-60, 877-88), and that Ciavarella concealed his relationship with Mericle and his receipt of those payments. (App. 310-12, 849-60, 877-88.)
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Regarding the money laundering offenses of conviction, although Ciavarella himself was acquitted of the substantive wire fraud, bribery and extortion counts contained in Counts 3-6, 11-20 and 22-34 of the Indictment, the evidence in the light most favorable to the government was nevertheless sufficient to establish that
Conahan committed those offenses, thereby providing an independent basis to find that the financial transactions underlying the money laundering offenses involved the proceeds of “specified unlawful activity.”
With regard to the racketeering conspiracy charge alleged in Count 2 of the
Indictment, the Supreme Court has held that the RICO conspiracy charge does not require proof that Ciavarella “himself committed or agreed to commit the two predicate acts requisite for a substantive RICO offense under § 1962(c).” Salinas v. United States, 522 U.S. 52, 61 (1997).14 The same evidence that supports the jury’s verdict on Count One also supports the verdict on Count Two. The evidence is even more compelling as to Count Two since, under Salinas, the
Government did not have to prove that Ciavarella agreed to perform any of the
14At page 49 of his brief, Ciavarella incorrectly states the law as follows: “the Government must prove that Mark Ciavarella agreed to commit an illegal act.” The Supreme Court’s ruling in Salinas forecloses that argument: The government is not required to prove that he agreed to commit any predicate act himself.
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predicate racketeering acts and the evidence established that Ciavarella conspired with Conahan for Conahan to commit the charged racketeering activity.
VII. The racketeering, honest services mail fraud (count 7), racketeering conspiracy and money laundering conspiracy charges are not time- barred.
1. Waiver on Counts One, Two and Twenty-One
The statute of limitations in a criminal case does not go to the jurisdiction of the court, but is an affirmative defense that will be considered waived if not raised in the district court. United States v. Karlin, 785 F.2d 90, 92-93 (3d Cir. 1986).
When a defendant fails to raise the statute of limitations as a defense before or at trial nor asks for any jury instructions on the defense, the defense is waived and is not subject to direct review. See United States v. Oliva, 46 F.3d 320, 325 (3d Cir.
1995) citing United States v. Karlin, 785 F.2d 90, 90-93 (3d Cir. 1986).
Although Ciavarella’s pre-trial motions challenged some counts on statute of limitations grounds, at no time prior to trial or at trial did Ciavarella challenge
Counts 1, 2 or 21. Ciavarella also failed to request a jury instruction on statute of limitations and did not object to the charge the Court gave which did not contain one. Thus, Ciavarella waived the statute of limitations defense on those counts.
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2. The Statute of Limitations Did Not Run on Counts One, Two and Twenty-One
Even if Ciavarella had not waived the statute of limitations defense, his claim would lack merit since the statute of limitations had not run.
The statute of limitations on a charge of conspiracy runs from the last overt act during the existence of the conspiracy. Fiswick v. United States, 329 U.S. 211,
216 (1946). “Conspiracy is a continuing offense and a jury may consider each and all of a defendant’s actions in furtherance of the conspiracy so long as the
Indictment is brought within five years of the last overt act.” United States v.
Jake, 281 F.3d 123 n. 6 (3d Cir. 2002), citing United States v. Johnson, 165 F.2d
42, 45 (3d Cir. 1947).
The ongoing offense of money laundering conspiracy was charged as
Racketeering Act 13 of Count 1 and alleges that Ciavarella and Conahan engaged in the money laundering conspiracy “from in or about December, 2001 to on or about September 9, 2009.” See Superseding Indictment, p. 27-28. That offense was also one of the racketeering acts that was the object of the racketeering conspiracy charged in Count 2. Money laundering conspiracy was also charged in
Count 21 which alleges the offense occurred “[f]rom on or about January 1, 2001,
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and continuing up to on or about the date of this Superseding Indictment.” See
Superseding Indictment, p. 48.
The trial evidence established numerous acts committed by Conahan and
Ciavarella in furtherance of the money laundering conspiracy that were committed within five years of September 9, 2009, when a grand jury first charged Ciavarella with money laundering conspiracy. For example, after deposits of checks and wire transfers to the account of Pinnacle Group from Powell and Mericle which were, as noted above, partly the proceeds of bribes or kickbacks to Conahan, checks payable to Barbara Conahan were issued by Pinnacle and deposited to one or more bank accounts under Michael Conahan’s control. These payments included a total of $435,500 in 2005, all of the payments made well within the statute of limitations. (App. 284; Government Exhibit 4.36). Similarly, to conceal their receipt of a bribe/kickback, on February 3, 2006, Conahan and Ciavarella caused
Powell to issue a letter directing Mericle to transfer $150,000 to the account of
Pinnacle Group. (App. 558-60; Government Exhibit 7.4.) Likewise, to make it appear as if the $150,000 was rental income, Ciavarella and Conahan created false documents, including patently false tax forms that were signed in 2007.
Ciavarella, himself, admitted that he filed some of these forms with the IRS with full knowledge that they were false. These are just a few examples.
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3. Ciavarella waived a statute of limitations defense on Count 7
Ciavarella’s pretrial motion to dismiss Count 7 on statute of limitations grounds was denied. He cites the denial as error.
Ciavarella entered into a plea agreement that included a waiver of any statute of limitations defense. Once Ciavarella withdrew his guilty plea, the waiver permitted the government to file all charges against him that were not barred by the statute of limitations as of the date of the plea agreement.
In January 2009, Ciavarella signed a waiver through February 16, 2009 of any statute of limitations defense for any offenses for which the applicable statute of limitations had not run as of January 13, 2009. On January 26, 2009, the defendants entered plea agreements with the government.
The plea agreement noted “[t]he defendant and counsel for both parties agree that the United States Sentencing Commission Guidelines which took effect on November 1, 1987...will apply to the offenses to which the defendant is pleading guilty.”
The plea agreement contained a statute of limitations waiver:
The defendant agrees, however, that the United States may at its sole election prosecute any charges currently under investigation related to this matter in the event that the charge(s) to which the defendant has pleaded guilty pursuant to this agreement are subsequently vacated or set aside by the district court or any appellate court. The defendant further agrees to
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waive any defenses to the prosecution of these charges based upon laches, the assertion of speedy trial rights, any applicable statute of limitations or any other grounds in the event that the defendant successfully vacates or sets aside any conviction or sentence of incarceration imposed pursuant to this plea agreement. This waiver does not apply in the event that the statutes(s) under which this prosecution was brought is later declared unconstitutional.
(Supp. App., p. 41-42.)
The binding agreement contemplated a guilty plea proceeding that would be followed by a sentencing proceeding. Furthermore, the statute of limitations waiver refers to “any conviction or sentence of incarceration.” The word
“conviction”, as used in the plea agreement, referred to Ciavarella’s guilty plea, not to his sentence. This is consistent with the meaning of the word “conviction” as utilized in the United States Sentencing Commission Guidelines. See, e.g.
U.S.S.G. §§ 4A1.2(a)(4) (“[c]onvicted of an offense” means that the guilt of the defendant has been established, whether by guilty plea, trial, or plea of nolo contendere”) ; 4B1.2(c) (“The date that a defendant sustained a conviction shall be the date that the guilt of the defendant has been established, whether by guilty plea, trial, or plea of nolo contendere”).
Pursuant to his plea agreement, Ciavarella pleaded guilty on February 12,
2009, before five years had passed on the challenged count. On July 31, 2009, the
Court rejected the plea agreements. See MDPA Docket # 3:09-CR-0028, Doc.
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Entry 39. Thereafter, on August 24, 2009, Ciavarella withdrew his guilty plea.
See MDPA Docket#3:09-CR-0028, Doc. Entry 44 (Ciavarella) and 45 (Conahan).
By withdrawing his plea, Ciavarella “vacated and set aside” his conviction and, in accordance with his plea agreement, is foreclosed from asserting any statute of limitations defenses as to any charges that were not barred by the statute of limitations as of the date the plea agreement was entered.
VIII. The District Court sufficiently weighed the credibility of trial witnesses and evidence at sentencing and the Court’s findings resulted in a substantively reasonable sentence.
Ciavarella alleges that the District Court violated his Sixth Amendment right to a trial by jury because it made findings of fact at sentencing which
Ciavarella believes were inconsistent with the jury verdict. The claim fails for two reasons. First, the Sixth Amendment right to trial by jury is not implicated by factual findings made at sentencing unless those facts increase the statutory maximum punishment. Second, the findings made by the Court do not necessarily conflict with those of the jury.
The Constitution guarantees an accused the right to a trial by an impartial jury. U.S. Const. Amend VI. The right to a jury trial does not attach to sentencing; it only attaches to proof of elements of a crime. Apprendi v. New Jersey, 530 U.S.
466, 490 (2000). The Supreme Court has defined those facts, which constitute the
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elements of a crime, as those that increase the maximum punishment to which the defendant is exposed under governing law. Id. “Only if a jury of an individual’s peers concludes beyond a reasonable doubt that he or she committed each element of the charged offense, as defined by the legislature, may the court impose punishment.” United States v. Grier, 475 F.3d 556, 561-62 (3d Cir. 2007)(citing
United States v. Booker, 543 U.S. 220, 230 (2005). Once an individual has been convicted of a crime, the determination of those sentencing facts, which do not increase the maximum punishment, is the province of the court. Grier, 475 F.3d at
562.
Ciavarella argues that he was acquitted of all acts related to the testimony of
Powell and therefore the jury found Powell’s testimony not credible. (App. Brief p. 57.) Furthermore, he argues that since the jury did not find he committed the
Racketeering acts related to Mericle’s 2004 and 2006 payments, then the jury similarly rejected any evidence that those payments were bribes or kickbacks.
(App. Brief, p. 57-58.) Ciavarella does not suggest the Court’s guidelines findings were made without evidentiary support. Rather, he argues they conflict with his interpretation of what the jury found credible. (App. Brief p. 56-60.)
The Supreme Court has held that acquittal on a charge does not prevent a court from considering the underlying conduct as relevant conduct, as long as it
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has been proven by a preponderance of the evidence. United States v. Watts, 519
U.S. 148, 154 (1997).
The credibility determinations of a fact finder, including a judge at sentencing, are not reviewed by this Court. United States v. Bethancourt, 65 F.3d
1074, 1078 (3d Cir. 1995). “Credibility determinations are the unique province of a fact finder ... [w]here the record supports a credibility determination, it is not for an appellate court to set it aside” United States v. Kole, 164 F.3d 164, 177 (3d Cir.
1998). This Court reviews factual determinations only when those findings are
“completely devoid of minimum evidentiary support displaying some hue of credibility or bears no rational relationship to supportive evidentiary data.” Hoots v. Pennsylvania, 703 F.2d 722 (3d Cir. 1983).
The following is a summary of the record which supports the trial court’s guideline adjustments:
• Multiple bribes or extortions [U.S.S.G. § 2C1.1(b)(1)] - the trial
record reflects that Ciavarella directed multiple payments to Conahan.
(App. 532-46, 564-78; PSR ¶¶49, 66.)
• Loss amount in excess of $2,500,000 [U.S.S.G. § 2C1.1(b)(2)] - same
record referenced above supports dollar loss in excess of $2,500,000.
(PSR ¶49, 67.)
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• Vulnerable Victims [U.S.S.G. §3A1.1(b)(1)]- Ciavarella did not
recuse himself from any juvenile proceedings in which he placed, or
considered placing, juveniles in the PA Childcare facilities. (Supp.
App. 25-26).
Furthermore, the jury convicted Ciavarella of honest services mail fraud committed each year between 2004 and 2007, as well as a combination of conspiracy convictions that span the entire time of the alleged conduct. No
Mericle payments were made in 2004, a year Powell testified that he paid bribes/kickbacks to Ciavarella and Conahan. (App. 532-46, 564-78.) Since payment of a bribe or kickback is an essential element of mail fraud, the jury convictions on all mail fraud counts suggest a finding of bribe and kickback payments each year alleged, including 2004. The counts of conviction resulted in a potential aggregate punishment of 157 years, more than the sentence ultimately imposed by the District Court.
Ciavarella further complains, without reference to authority, that the District
Court improperly considered letters from the public critical of Ciavarella’s judicial decisions as relevant to his character and background. (App. Brief, p. 60.)
Ciavarella attempted to rebut the accusations of misconduct during the sentencing proceeding. (App. 1469-72, 1475-79,1480-94.) Without any evidence of misinformation, the claim of prejudice is unfounded. See United States v.
64 Case: 11-3277 Document: 003110974892 Page: 72 Date Filed: 08/01/2012
Matthews, 773 F.2d 48, 51 (3d Cir. 1985)(a sentence is acceptable unless it was reached in reliance upon misinformation of a constitutional magnitude).
Finally, Ciavarella argues in passing that this process resulted in a substantively unreasonable sentence. (App. Brief, p. 60.) “The fact that the appellate court might reasonably have concluded that a different sentence was appropriate is insufficient to justify a reversal of the district court.” Gall v. United
States, 552 U.S. 38, 51 (2007).
The sentencing guidelines in this case recommended an imprisonment range of life imprisonment. (PSR ¶118.) Although the sentence of 336 months is a significant sentence, it is nevertheless a below-guidelines sentence. As this court has held,“[a] within-guidelines range sentence is more likely to be reasonable than one that lies outside the advisory guidelines range.” United States v. Cooper, 437
F.3d 324, 331 (3d Cir. 2006) abrogated on other grounds by Kimbrough v. United
States, 552 U.S. 85 (2007). The record is clear:District Court found that
Ciavarella committed serious crimes and victimized numerous juveniles and litigants who appeared before him. (App. 44.2.) The procedure, which Ciavarella alleges violated his Sixth Amendment right to a jury trial, was reasonable and was well within the discretion of the trial judge, who heard all of the evidence and arguments of counsel, resulting in a substantively reasonable sentence.
65 Case: 11-3277 Document: 003110974892 Page: 73 Date Filed: 08/01/2012
CONCLUSION
It is respectfully requested that this Court enter an order affirming the conviction and sentence.
Respectfully submitted
PETER J. SMITH UNITED STATES ATTORNEY
BY: /s/ Gordon A.D. Zubrod GORDON A.D. ZUBROD ASSISTANT U.S. ATTORNEY
/s/ Michael A. Consiglio MICHAEL A. CONSIGLIO ASSISTANT U.S. ATTORNEY
/s/ William S. Houser WILLIAM S. HOUSER ASSISTANT U.S. ATTORNEYS
66 Case: 11-3277 Document: 003110974892 Page: 74 Date Filed: 08/01/2012
CERTIFICATE OF COUNSEL
I, Gordon A.D. Zubrod, certify that I am a member of the Bar of the United States Court of Appeals for the Third Circuit.
/s/ Gordon A.D. Zubrod GORDON A.D. ZUBROD ASSISTANT U.S. ATTORNEY Date: 08/01/2012
CERTIFICATE OF COMPLIANCE
I hereby certify that this brief consists of 13,980 words and does not exceed the 14,000 word limit. /s/ Gordon A.D. Zubrod GORDON A.D. ZUBROD ASSISTANT U.S. ATTORNEY
IDENTICAL PDF & HARD COPY CERTIFICATE
The undersigned hereby certifies that the PDF file and Hard Copies of this brief are identical. /s/ Gordon A.D. Zubrod GORDON A.D. ZUBROD ASSISTANT U.S. ATTORNEY Date: 08/01/2012
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This e-mail and the attached brief has been automatically scanned during preparation and upon sending by the following virus detection programs: OfficeProtect/Inoculan, ScanMail, and Viruswall, and no viruses were detected.
/s/ Gordon A.D. Zubrod GORDON A.D. ZUBROD ASSISTANT U.S. ATTORNEY Case: 11-3277 Document: 003110974892 Page: 75 Date Filed: 08/01/2012
IN THE UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
UNITED STATES OF AMERICA ) Appeal No. 11-3277 ) v. ) ) MARK A. CIAVARELLA, JR. )
CERTIFICATE OF SERVICE
The undersigned hereby certifies that she is an employee in the Office of the United States Attorney for the Middle District of Pennsylvania and is a person of such age and discretion as to be competent to serve papers.
That on this 1st day of August, 2012, she served a copy of the attached
BRIEF OF APPELLEE via Electric Case Filing and by placing two (2) copies in a postpaid envelope addressed to the person(s) hereinafter named, at the place and address stated below, which is the last known address, and by depositing said envelope and contents in the United States Mail at Harrisburg, Pennsylvania
William Ruzzo, Esq. Albert J. Flora, Esq. 590 Rutter Avenue 33 West South Street Kingston, Pennsylvania 18704 Wilkes-Barre, Pennsylvania 18701 [email protected] [email protected]
/s/ Carol A. Manies Carol A. Manies Legal Assistant