United States of America v. Silver
Filing
OPINION, vacating the district court judgment and remanding the case, by JAC, RCW, W.K. SESSIONS III, FILED.[2077539] [16-1615]
Case 16-1615, Document 90-1, 07/13/2017, 2077539, Page1 of 54
16‐1615‐cr
United States v. Silver
In the
United States Court of Appeals
for the Second Circuit
AUGUST TERM 2016
No. 16‐1615‐cr
UNITED STATES OF AMERICA,
Appellee,
v.
SHELDON SILVER,
Defendant‐Appellant.
On Appeal from the United States District Court
for the Southern District of New York
ARGUED: MARCH 16, 2017
DECIDED: JULY 13, 2017
Before: CABRANES, WESLEY, Circuit Judges, and SESSIONS, Judge.*
Judge William K. Sessions III, of the United States District Court for the
District of Vermont, sitting by designation.
*
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In 2015, the United States Government indicted Sheldon
Silver, the former Speaker of the New York State Assembly, on
charges of honest services fraud, Hobbs Act extortion, and money
laundering. The Government alleged that Silver abused his public
position by engaging in two quid pro quo schemes in which he
performed official acts in exchange for bribes and kickbacks, and
that he laundered the proceeds of his schemes into private
investment vehicles. After a jury trial of nearly one month in the
United States District Court for the Southern District of New York
(Valarie E. Caproni, Judge), a jury found him guilty on all counts. He
was sentenced to twelve years of imprisonment, to be followed by
three years of supervised release.
After Silver had been convicted and sentenced, the Supreme
Court issued its decision in McDonnell v. United States, 136 S. Ct. 2355
(2016), which clarified the definition of an “official act” in honest
services fraud and extortion charges. The Supreme Court, vacating
the conviction of former Governor Robert McDonnell of Virginia,
held that “an ‘official act’ is a decision or action on a ‘question,
matter, cause, suit, proceeding or controversy’” involving “a formal
exercise of governmental power.” Id. at 2371–72.
Silver now appeals from his judgment of conviction and
argues, primarily, that the District Court’s jury instructions defining
an official act as “any action taken or to be taken under color of
official authority” was erroneous under McDonnell. He additionally
2
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challenges the sufficiency of the evidence on all counts of conviction,
arguing, among other things, that his money laundering conviction
under 18 U.S.C. § 1957 required the Government to trace “dirty”
funds comingled with “clean” funds.
Though we reject Silver’s sufficiency challenges, we hold that
the District Court’s instructions on honest services fraud and
extortion do not comport with McDonnell and are therefore in error.
We further hold that this error was not harmless because it is not
clear beyond a reasonable doubt that a rational jury would have
reached the same conclusion if properly instructed, as is required by
law for the verdict to stand.
Accordingly, we VACATE the District Court’s judgment of
conviction on all counts and REMAND the cause to the District
Court for such further proceedings as may be appropriate in the
circumstances and consistent with this opinion.
STEVEN F. MOLO, MoloLamken LLP (Robert
K. Kry, Justin V. Shur, MoloLamken LLP;
Joel Cohen, Stroock & Stroock & Lavan
LLP, on the brief), New York, NY, for
Defendant‐Appellant.
ANDREW D. GOLDSTEIN (Howard S. Master,
James McDonald, Karl Metzner, on the
brief), for Joon H. Kim, Acting United States
3
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Attorney for the Southern District of New
York, New York, NY, for Appellee.
JOSÉ A. CABRANES, Circuit Judge:
In 2015, the United States Government indicted Sheldon
Silver, the former Speaker of the New York State Assembly, on
charges of honest services fraud, Hobbs Act extortion, and money
laundering. The Government alleged that Silver abused his public
position by engaging in two quid pro quo schemes in which he
performed official acts in exchange for bribes and kickbacks, and
that he laundered the proceeds of his schemes into private
investment vehicles. After a jury trial of nearly one month in the
United States District Court for the Southern District of New York
(Valarie E. Caproni, Judge), a jury found him guilty on all counts. He
was sentenced to twelve years of imprisonment, to be followed by
three years of supervised release.
After Silver had been convicted and sentenced, the Supreme
Court issued its decision in McDonnell v. United States,1 which
clarified the definition of an “official act” in honest services fraud
and extortion charges. The Supreme Court, vacating the conviction
of former Governor Robert McDonnell of Virginia, held that “an
‘official act’ is a decision or action on a ‘question, matter, cause, suit,
136 S. Ct. 2355 (2016).
1
4
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proceeding or controversy’” involving “a formal exercise of
governmental power.”2
Silver now appeals from his judgment of conviction and
argues, primarily, that the District Court’s jury instructions defining
an official act as “any action taken or to be taken under color of
official authority” was erroneous under McDonnell.3 He additionally
challenges the sufficiency of the evidence on all counts of conviction,
arguing, among other things, that his money laundering conviction
under 18 U.S.C. § 1957 required the Government to trace “dirty”
funds comingled with “clean” funds.
Though we reject Silver’s sufficiency challenges, we hold that
the District Court’s instructions on honest services fraud and
extortion do not comport with McDonnell and are therefore in error.
We further hold that this error was not harmless because it is not
clear beyond a reasonable doubt that a rational jury would have
reached the same conclusion if properly instructed, as is required by
law for a verdict to stand.
Accordingly, we VACATE the District Court’s judgment of
conviction on all counts and REMAND the cause to the District
Court for such further proceedings as may be appropriate in the
circumstances and consistent with this opinion.
Id. at 2371–72.
2
App’x 629.
3
5
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BACKGROUND
I.
Offense Conduct4
Silver was elected to the New York State Assembly (the
“Assembly”) in 1976, representing an Assembly District comprising
much of lower Manhattan. In 1994, he was elected Speaker of the
Assembly (“Speaker”)—a position he would hold for more than
twenty years until his resignation in 2015. As Speaker, Silver was
one of the most powerful public officials in the State of New York,
exercising significant control over the Assembly and state legislative
matters.
The Government’s charges against Silver involve his part‐time
work as a practicing lawyer.5 The Government sought to prove that
Silver orchestrated two criminal schemes that abused his official
positions for unlawful personal gain. Each of these alleged schemes
had the same premise: in exchange for official actions, Silver
received bribes and kickbacks in the form of referral fees from third‐
party law firms. In one scheme, Silver performed favors for a doctor
in exchange for the doctor’s referral of mesothelioma patients to
The following facts are drawn from the evidence presented at trial and
described in the light most favorable to the Government. See United States v.
Litwok, 678 F.3d 208, 210–11 (2d Cir. 2012) (“Because this is an appeal from a
judgment of conviction entered after a jury trial, the . . . facts are drawn from the
trial evidence and described in the light most favorable to the Government.”).
4
New York allows state lawmakers to pursue part‐time employment. See
N.Y. Pub. Off. Law § 74(3)(a).
5
6
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Silver’s law firm (the “Mesothelioma Scheme”). In the other, Silver
performed favors for two real estate developers who had hired, at
Silver’s request, a law firm that was paying referral fees to Silver
(the “Real Estate Scheme”). Jointly, these alleged schemes produced
roughly $4 million in referral fees for Silver. The Government also
charged that Silver engaged in money laundering by investing the
proceeds of the Mesothelioma and Real Estate Schemes into various
private investment vehicles (the “Money Laundering Scheme”). We
describe the key aspects of each scheme in turn.
A.
The Mesothelioma Scheme6
In the fall of 2002, Silver became “of counsel” to the law firm
Weitz & Luxenberg (“W&L”), which maintained an active personal
injury practice. Lawsuits for mesothelioma, a rare form of cancer
caused by exposure to asbestos, were particularly lucrative for W&L.
While he was not expected to and did not perform any legal
work for W&L’s clients, Silver received a fixed salary for lending his
name to W&L, as well as referral fees for any case he brought into
the firm. Silver’s referral fee was a set percentage of the fees earned
by W&L on any case that he referred to the firm.
Dr. Robert Taub, an acquaintance of Silver, was a physician
and researcher at Columbia‐Presbyterian Hospital who specialized
in mesothelioma. In the fall of 2003, Dr. Taub encountered Silver at
For a timeline of the Mesothelioma Scheme, see Addendum A, post.
6
7
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an event and asked him to encourage W&L to donate money to
mesothelioma research.7 Silver, without consulting anyone at the
firm, responded that he could not get W&L to do so.
Within two weeks, however, Silver asked Dr. Taub to refer
mesothelioma cases to W&L through him.8 Responding to that
request in November of 2003, Dr. Taub started referring
mesothelioma patients to Silver for legal representation. He also
provided Silver with names and contact information of
unrepresented mesothelioma patients seeking counsel. Dr. Taub
sought to develop a relationship with Silver that would help him
receive research funding, much of which came from state and
federal appropriations. Although unaware of the specifics of the
financial arrangement between Silver and W&L, Dr. Taub testified
that he believed Silver would benefit personally from the
mesothelioma leads. And indeed, Silver conveyed to Dr. Taub that
he was “pleased with the referrals that he was getting.”9
Dr. Taub was soon informed that Silver was considering
providing him with state funding for his mesothelioma research.
Shortly thereafter, in early January 2004, Dr. Taub sent a letter to
Dr. Taub believed that firms that profit from mesothelioma cases should
donate to support mesothelioma research. And indeed, other law firms had
provided such charitable contributions.
7
Silver conveyed this request through Daniel Chill, a mutual friend of Dr.
Taub and Silver.
8
Trial Transcript (“Tr.”) 274.
9
8
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Silver requesting state funding. While this grant was under
consideration, Dr. Taub continued to send Silver mesothelioma
leads. And over a year later, in March of 2005, Silver received his
first referral fee check from W&L in the amount of $176,048.02.
Silver soon secured two $250,000 state grants for Columbia
University to support Dr. Taub’s research. These grants originated
from the New York Health‐Care Reform Act (“HCRA”) Assembly
Pool, a pool of discretionary funds that Silver alone controlled as
Speaker. Silver approved the first grant in July of 2005, a few months
after receiving his first referral check.10 Silver approved the second
grant more than a year later, in August of 2006.11 Silver did not
publicly disclose the grants or his interactions with Dr. Taub, nor
did he ever inquire about the progress of Dr. Taub’s research. Dr.
Taub assumed that his mesothelioma referrals were a factor in
Silver’s decision to approve the grants, and sought to receive
additional grant money on an annual basis.
In 2007, New York law changed to require public disclosure of
HCRA grants, and disclosure of any potential conflicts of interest
Prior to the first grant approval, Silver invited Dr. Taub to the 2005
State of the State ceremony at the New York State Capitol and put him in touch
with a staffer to discuss the status of the grant. Though the Government argued
at its summation that these were “official acts” by Silver, it no longer relies on
these actions on appeal.
10
While Silver approved the second grant on August 25, 2006, the grant
was actually made on November 30, 2006.
11
9
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between legislators and recipients of legislative grants.12 Responding
to this change, Silver informed Dr. Taub that any further requests for
state grants would not be approved.13 Nevertheless, Dr. Taub
continued to send mesothelioma client leads to Silver to maintain
their relationship and keep Silver “incentivized.”14
Silver continued to help Dr. Taub during this time with two
other actions:
In January of 2007, Silver had his office staff call a state trial
judge to ask him to hire Dr. Taub’s daughter, a student at
Fordham University Law School, as an unpaid intern.
In May of 2008, Silver awarded $25,000 in state grant
funding to the Shalom Task Force, a non‐profit entity
devoted to helping victims of domestic violence, of which
Dr. Taub’s wife was a board member.
In 2010, Dr. Taub started sending mesothelioma leads to
another law firm that had started funding his research. In response,
on May 25, 2010, Silver went to Dr. Taub’s office to complain that he
was receiving fewer referrals. Their conversation prompted Dr.
Taub to continue to send referrals to Silver in order to maintain a
The record does not establish whether any other ethics obligations
applying to public officials in New York State required disclosure of potential
conflicts prior to the 2007 enactment.
12
Dr. Taub had previously sent a letter to Silver on October 11, 2007
requesting a third grant of HCRA funding.
13
Tr. 340.
14
10
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relationship with him that would possibly lead to future funding for
his mesothelioma research. As he noted in an e‐mail to a colleague
on the day of his meeting with Silver, “I will keep giving cases to
Shelly [Silver] because I may need him in the future—he is the most
powerful man in New York State.”15
In fact, Silver would not approve any more grants for Dr.
Taub (and he had not done so since August of 2006). Silver did do
three additional favors for Dr. Taub, however.
In May of 2011, Silver had his staff prepare an Assembly
resolution with an official proclamation commending Dr.
Taub. Silver sponsored the resolution on the floor of the
Assembly and presented it to Dr. Taub at a public event.
In the fall of 2011, Silver agreed to help Dr. Taub
“navigate” the process of securing permits for a proposed
New York City charity race in Silver’s district to benefit
mesothelioma research. Dr. Taub thought at the time that
Silver would likely want referrals in return for his help.
Ultimately, the law firm working with Dr. Taub to
organize the race decided not to pursue the event, and the
race never took place.
In 2012, at the request of Dr. Taub, Silver helped Dr. Taub’s
son obtain a job with OHEL Children’s Home & Family
Services (“OHEL”), a non‐profit organization devoted
primarily to providing social services to Jewish
Special App’x 1009.
15
11
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populations,16 that received millions in discretionary state
funding controlled solely by Silver. To help Dr. Taub’s son,
Silver called OHEL’s chief executive officer twice and sent
him a letter on Assembly letterhead. Silver had not
previously asked, nor did he subsequently ask, OHEL to
hire anyone else.
Dr. Taub continued to provide mesothelioma leads to Silver
through at least 2013. In total, over the course of ten years, Silver
received roughly $3 million in referral fees for cases referred to W&L
by Dr. Taub.
B.
The Real Estate Scheme17
Silver’s second alleged scheme involved two major New York
real estate developers: Glenwood Management (“Glenwood”) and
the Witkoff Group (“Witkoff”) (jointly, the “Developers”). Of course,
like other real estate interests, both companies depended heavily on
favorable state legislation, including rent regulation and tax
abatement legislation. The Developers also depended on tax‐exempt
financing, which must be approved by the Public Authorities
Control Board (“PACB”).
Silver held considerable control over legislation covering
these issues and over PACB approvals. As Speaker, he had de facto
While OHEL engages in many social services, the most prominent
service discussed at trial was a summer camp for disabled children.
16
For a timeline of the Real Estate Scheme, see Addendum B, post.
17
12
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veto power over all legislation since he could prevent any legislation
that he opposed from coming to a vote. Also, as a voting member on
the PACB, Silver had the power to unilaterally prevent the PACB
from approving applications for state financing.18
As with the Mesothelioma Scheme, Silver allegedly sought to
enrich himself through referral fees from a law firm. In this scheme,
however, that law firm was Goldberg & Iryami (“G&I”), the firm of
Jay Arthur Goldberg, a former staffer and friend of Silver. Goldberg
specialized in tax certiorari work, which involves challenges to
property owners’ real estate tax assessments. The Developers
pursued tax certiorari cases to reduce the property taxes of their
buildings.
To enrich himself, Silver allegedly induced the Developers to
hire Goldberg, who had agreed to pay Silver a percentage of the
resulting legal fees. In 1997, at a time when important real estate
legislation was due for renewal, Silver referred Glenwood to
Goldberg. In 2005, Silver did the same for Witkoff, stating that his
friend Goldberg needed business. In response, Glenwood and
Witkoff moved some of their tax certiorari work from other law
firms to G&I, which they continued to do over time. Of the fees G&I
earned from its Glenwood and Witkoff matters, Silver received a
referral fee—twenty‐five percent of what G&I earned from
PACB bond approvals for tax‐exempt state financing are typically pro
forma and votes may be cast by a proxy. One Government witness testified that,
in his experience, no PACB applications had been denied.
18
13
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Glenwood matters and fifteen percent of what G&I earned from
Witkoff matters.
The Developers did not know of Silver’s financial
arrangement with Goldberg at the time. Neither company, however,
wanted to alienate Silver, given their need for Silver’s approval of
favorable legislation. Both testified that they gave tax certiorari work
to Goldberg to influence Silver’s legislative work concerning real
estate. Witkoff also wanted access to Silver to discuss pending
legislation that affected its business.
In return for these alleged kickbacks, Silver took a number of
actions to benefit the Developers:
Through a proxy, Silver repeatedly voted as one of three
members of the PACB to approve Glenwood’s requests for
tax‐exempt financing for many of its projects. These votes
occurred repeatedly over the course of Silver’s tenure as
Speaker.
Silver regularly approved and voted for rent and tax
abatement legislation sought by Glenwood. In particular,
in June of 2011, Silver met with Glenwood lobbyists in
advance of negotiating pending real estate legislation to
ensure that Glenwood was satisfied with the terms of the
legislation. He then supported and voted in favor of the
Rent Act of 2011 and tax abatement renewal legislation
later that month, both of which benefited Glenwood.
Later in 2011, Silver publicly opposed the relocation of a
methadone clinic that was to be located near one of
Glenwood’s rental buildings in Silver’s district.
14
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In a late 2011 phone call, Silver informed a Glenwood lobbyist
of his fee‐sharing arrangement with Goldberg. This disclosure was
prompted by G&I’s decision to send new retainer agreements to
Glenwood that referenced Silver. Silver told the Glenwood lobbyist
that he wanted his fee‐sharing arrangement with Goldberg to
continue, and that the arrangement was not problematic since the
fees came from a Glenwood limited liability company. Glenwood,
despite its reservations, executed a confidential “side letter”
agreement with G&I—separate from the firm’s retainer agreement—
consenting to the fee arrangement. This letter was kept secret from
the public and from Glenwood’s own chief financial officer.19
Witkoff learned of the fee‐sharing arrangement in June of 2014 on a
call with Goldberg, who had received a grand jury subpoena in
connection with the Government’s investigation of Silver.
In total, over a period of about 18 years, Silver received
approximately $835,000 in fees from G&I for his referral of the
Developers.
C.
The Money Laundering Scheme
Silver allegedly laundered the proceeds of the Mesothelioma
and Real Estate Schemes by investing them in high‐yield, private
investment vehicles with the help of Jordan Levy, a private
The record does not establish whether Silver was under any legal
obligation, as a public official or private lawyer, to disclose publicly this secret
side letter with G&I.
19
15
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investor.20 At one point, Silver instructed Levy to place one half of
an investment in his wife’s name to avoid publicly disclosing the full
amount of the investment.
II.
Procedural History
A.
Indictment
In February of 2015, Silver was indicted for engaging in
schemes “to deprive the citizens of [New York State] of his honest
services as an elected legislator and as Speaker of the Assembly by
using the power and influence of his official position to obtain for
himself millions of dollars in bribes and kickbacks . . . .”21 The
charges against him consisted of four counts of honest service fraud,
two counts of Hobbs Act extortion, and one count of money
laundering.22
The Government’s theory underlying its honest services fraud
and Hobbs Act extortion charges was that Silver had accepted bribes
Levy was unaware of the source of Silver’s funds.
20
App’x 97.
21
See 18 U.S.C. §§ 1341, 1343, 1346 (honest services fraud); id. § 1951
(Hobbs Act extortion); id. § 1957 (money laundering). Specifically, Counts One
and Two charged Silver with honest services mail fraud and wire fraud,
respectively, in connection with the Mesothelioma Scheme. Counts Three and
Four did the same as to the Real Estate Scheme. Counts Five and Six charged
Silver with Hobbs Act extortion in connection with the Mesothelioma Scheme
and Real Estate Scheme, respectively. And Count Seven charged Silver with
money laundering.
22
16
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and kickbacks in exchange for official acts.23 To succeed on a bribery
theory of honest services fraud and Hobbs Act extortion, the
Government had to prove, beyond a reasonable doubt, the existence
of a quid pro quo agreement—that the defendant received, or
intended to receive, something of value in exchange for an official
act.24
B.
Trial and Jury Instructions
Before trial, Silver and the Government presented proposed
jury instructions to the District Court on how to define an “official
act.” Silver’s initial proposed instructions sought to define “official
act” by quoting 18 U.S.C. § 201(a)(3), the federal bribery statute:
“[a]n ‘official act’ means any decision or action on any question,
matter, cause, suit, proceeding or controversy, which may at any
See Skilling v. United States, 561 U.S. 358, 404 (2010) (construing honest
services fraud to forbid “fraudulent schemes to deprive another of honest
services through bribes or kickbacks”); Evans v. United States, 504 U.S. 225, 260
(1992) (construing Hobbs Act extortion to include “taking a bribe”).
23
See United States v. Bruno, 661 F.3d 733, 743–44 (2d Cir. 2011) (in a
prosecution of honest services fraud under a bribery theory, “[t]he key inquiry is
whether, in light of all the evidence, an intent to give or receive something of
value in exchange for an official act has been proved beyond a reasonable
doubt”); United States v. Ganim, 510 F.3d 134, 143 (2d Cir. 2007) (“[T]he offense [of
Hobbs Act extortion] is completed at the time when the public official receives a
payment in return for his agreement to perform specific official acts . . . .”
(quoting Evans, 504 U.S. at 268)); see also id. at 141 (honest services fraud and
Hobbs Act extortion “criminalize[], in some respect, a quid pro quo agreement—to
wit, a government official’s receipt of a benefit in exchange for an act he has
performed, or promised to perform, in the exercise of his official authority”).
24
17
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time be pending, or which may by law be brought before any public
official, in such official’s official capacity.”25 The Government’s
proposed instruction, in contrast, sought to define an official act
more broadly as “any act taken under color of official authority.”26
Silver’s trial began on November 2, 2015, and lasted nearly a
month. At the charge conference on November 19, 2015, the parties
once again addressed the definition of an “official act” in the jury
instructions. This time, Silver proposed a new “official act”
instruction: “To prove an ‘official act,’ the government must prove
the exercise of actual governmental power, the threat to exercise
such power, or pressure imposed on others to exercise actual
government power.”27 The Government urged a broader
instruction—that “[o]fficial action includes any action taken or to be
taken under color of official authority.”28
The District Court declined to include Silver’s proposed
instructions and ultimately adopted the Government’s official act
language in its final jury charge.29 The District Court instructed the
jury that to prove honest services fraud, the Government must
“prove, beyond a reasonable doubt, . . . that Silver received bribes or
App’x 188 (tracking verbatim the language of 18 U.S.C. § 201(a)(3)).
25
Id. at 190.
26
Id. at 591.
27
Tr. 2785–86 (emphasis added).
28
Id. at 2786.
29
18
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kickbacks as part of a scheme to defraud.”30 The District Court
explained:
To satisfy this element, the Government must prove
that there was a quid pro quo. Quid pro quo is Latin, and it
means “this for that” or “these for those.” The
Government must prove that a bribe or kickback was
sought or received by Mr. Silver, directly or indirectly,
in exchange for the promise or performance of official
action. Official action includes any action taken or to be
taken under color of official authority.31
In its Hobbs Act extortion instructions, the District Court also
instructed that the Government must prove a quid pro quo—
specifically, that “property was sought or received by Mr. Silver,
directly or indirectly, in exchange for the promise or performance of
official action.”32 The District Court did not redefine official action in
its extortion charge, but did explicitly reference the earlier honest
services fraud charge when setting forth the quid pro quo
requirement as an element of extortion.33
App’x 629.
30
Id. (emphasis added).
31
Id. at 635.
32
Id.
33
19
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The District Court also provided the following charge
regarding the five‐year statute of limitations for honest services
fraud and Hobbs Act extortion:34
The statute of limitations for each of the charged crimes
is five years. If you find that Mr. Silver engaged in a
scheme to commit honest services fraud, extortion or
money laundering, but no aspect of the particular
scheme occurred after February 19, 2010, then you must
acquit on that charge because it is barred by the statute
of limitations. If, on the other hand, you find that any
aspect of the crime you are considering continued on or
after February 19, 2010, then the statute of limitations as
to that charge has been complied with.35
After three days of deliberation, on November 30, 2015, the
jury found Silver guilty on all seven counts. Silver timely moved for
a judgment of acquittal or, in the alternative, a new trial pursuant to
Rules 29 and 33 of the Federal Rules of Criminal procedure.36 The
18 U.S.C. § 3282.
34
App’x 644.
35
Under Rule 29, after the Government closes its case, “the court on the
defendant’s motion must enter a judgment of acquittal of any offense for which
the evidence is insufficient to sustain a conviction.” Fed. R. Crim. P. 29(a). Rule
33 states, in relevant part, that “[u]pon the defendant’s motion, the court may
vacate any judgment and grant a new trial if the interest of justice so requires.”
Fed. R. Crim. P. 33(a). Here, Silver moved for a judgment of acquittal at the close
of the Government’s case, and the District Court reserved decision until after the
jury verdict. Silver renewed his Rule 29 motion after the verdict, and moved for a
new trial, pursuant to Rule 33, based on various evidentiary rulings made by the
36
20
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District Court denied those motions in a written opinion on May 3,
2016.37
C.
Sentencing and Post‐Sentencing Motions
On May 4, 2016, the District Court sentenced Silver to twelve
years of imprisonment, to be followed by three years of supervised
release. It also imposed $5.4 million in forfeiture, and a $1.75 million
fine. The court entered its final judgment on May 10, 2016.
On May 13, 2016, Silver moved to continue bail and stay the
financial penalties pending appeal. Silver relied largely on
arguments raised in McDonnell, which was then pending before the
Supreme Court and would address the definition of an “official act”
for honest services fraud and Hobbs Act extortion violations.38 On
June 27, 2016, the Supreme Court decided McDonnell. Soon
thereafter, on August 25, 2016, the District Court granted Silver’s
motion for bail pending appeal.39 In a thoughtful opinion, the
District Court concluded that while Silver’s case is “factually almost
District Court. See United States v. Silver, 184 F. Supp. 3d 33, 37, 52 (S.D.N.Y.
2016).
Silver, 184 F. Supp. 3d at 54.
37
The District Court initially adjourned Silver’s deadline to begin paying
the fine and forfeiture to August 15, 2016, adjourned Silver’s surrender date to
August 31, 2016, and moved briefing on Silver’s bail motion to after the Supreme
Court decided McDonnell.
38
United States v. Silver, 203 F. Supp. 3d 370 (S.D.N.Y. 2016).
39
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nothing like McDonnell[,] . . . there is a substantial question whether,
in light of McDonnell, the [jury] charge was in error and, if so,
whether the error was harmless.”40
DISCUSSION
On appeal, in addition to various arguments challenging the
sufficiency of the evidence against him, Silver primarily argues that
the District Court’s jury instructions on the definition of an “official
act” in its honest service fraud and extortion charges were erroneous
under McDonnell.41 He thus contends that we should vacate and
remand the honest services fraud and extortion counts against him
for a new trial. Silver also argues that if we vacate those counts, we
necessarily must vacate the money laundering count against him.42
I.
Sufficiency of the Evidence
“We review de novo challenges to the sufficiency of evidence,
but must uphold the conviction if any rational trier of fact could
have found the essential elements of the crime beyond a reasonable
Id. at 380.
40
Silver also claims that the District Court improperly admitted certain
evidence. Because we vacate and remand Silver’s judgment of conviction on all
counts due to erroneous jury instructions, we do not reach this additional
argument.
41
Def. Br. at 45 n.2; see also Silver, 203 F. Supp. 3d at 376 n.6.
42
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doubt.”43 To conduct this review, “we view the evidence in the light
most favorable to the government, crediting every inference that
could have been drawn in the government’s favor, and deferring to
the jury’s assessment of witness credibility and its assessment of the
weight of the evidence.”44 Silver raises three challenges to the
sufficiency of the evidence against him, none of which have merit.
A.
Hobbs Act Extortion
First, Silver claims that the Government failed to prove Hobbs
Act extortion because there was no evidence that that he deprived
anyone of property. This argument is belied by the record.
The Hobbs Act defines extortion, as applicable here, as
“obtaining . . . property from another, with his consent, induced . . .
under color of official right.”45 The “property” at issue in a Hobbs
Act extortion violation must be “something of value from the victim
that can be exercised, transferred, or sold.”46 Here, the evidence
supports a deprivation of property as to both schemes.47 Specifically,
United States v. Vernace, 811 F.3d 609, 615 (2d Cir. 2016) (internal
quotation marks omitted).
43
United States v. Babilonia, 854 F.3d 163, 174 (2d Cir. 2017) (internal
quotation marks omitted).
44
18 U.S.C. § 1951(b)(2).
45
Sekhar v. United States, 133 S. Ct. 2720, 2724 (2013)
46
The Government further contends that a deprivation of property is not
an essential element of a Hobbs Act extortion violation. Because a deprivation of
property occurred on the record before us, we do not reach that question here.
47
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both the mesothelioma leads and the tax certiorari business from
which Silver profited were valuable and transferable property (albeit
intangible property). By engaging in the alleged schemes, Silver is
said to have deprived Dr. Taub, the Developers, and other law firms
of property.
B.
Honest Services Fraud
Second, Silver argues that he engaged in mere “undisclosed
self‐dealing,” and that, accordingly, the Government failed to prove
a “paradigmatic bribe or kickback” for its honest services fraud
charges, as required by Skilling v. United States.48 This argument is
likewise contradicted by the record.
In Skilling, the Supreme Court in 2010 clarified that honest
services fraud “does not encompass conduct more wide‐ranging
than the paradigmatic cases of bribes and kickbacks,” and includes
instances where a defendant “solicited or accepted side payments
from a third party.”49 Here, both the mesothelioma leads and tax
certiorari business indisputably came from Dr. Taub and the
Developers, which resulted in payments to Silver from other third
parties, W&L and G&I. These payments, solicited by Silver, were
561 U.S. 358, 409–11 (2010).
48
Id. at 411, 413.
49
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thus bribes or kickbacks within the meaning of Skilling, not mere
“undisclosed self‐dealing by a public official” as Silver argues.50
C.
Money Laundering
Lastly, Silver argues that the Government failed to prove its
money laundering count because the proceeds of his two schemes
had been commingled into an account with untainted funds. To
convict Silver of money laundering under 18 U.S.C. § 1957, the
Government was required to prove that Silver “knowingly
engage[d] or attempt[ed] to engage in a monetary transaction in
criminally derived property of a value greater than $10,000,” and
that the property was “derived from specified unlawful activity.”51
Silver thus argues that because he deposited the proceeds of his
schemes into an account with legitimate funds, the Government
could not prove that the funds at issue were criminally derived.
We have not yet addressed whether the Government must
trace “dirty” funds comingled with “clean” funds in order to prove
money laundering under Section 1957. Silver relies on the view of
the Fifth and Ninth Circuits, which both require the Government to
Id. at 410. “In . . . self‐dealing cases, the defendant typically causes his or
her employer to do business with a corporation or other enterprise in which the
defendant has a secret interest, undisclosed to the employer.” United States v.
Rybicki, 354 F.3d 124, 140 (2d Cir. 2003) (en banc). The evidence at trial
demonstrated that Silver’s proven conduct, in colluding with Dr. Taub and the
Developers, went far beyond undisclosed self‐dealing.
50
18 U.S.C. § 1957(a)
51
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trace criminally derived proceeds when they have been commingled
with funds from legitimate sources to prove money laundering
under Section 1957.52 This view, however, is a minority one.53
We, on the other hand, adopt the majority view of our sister
Circuits—that the Government is not required to trace criminal
funds that are comingled with legitimate funds to prove a violation
of Section 1957. Because money is fungible, once funds obtained
from illegal activity are combined with funds from lawful activity in
a single account, the “dirty” and “clean” funds cannot be
distinguished from each other.54 As such, “[a] requirement that the
government trace each dollar of the transaction to the criminal, as
opposed to the non‐criminal activity, would allow individuals
effectively to defeat prosecution for money laundering by simply
See United States v. Loe, 248 F.3d 449, 467 (5th Cir. 2001) (“[W]here an
account contains clean funds sufficient to cover a withdrawal, the Government
can not prove beyond a reasonable doubt that the withdrawal contained dirty
money.”); United States v. Rutgard, 116 F.3d 1270, 1292–93 (9th Cir. 1997) (Section
1957 “does not create a presumption that any transfer of cash in an account
tainted by the presence of a small amount of fraudulent proceeds must be a
transfer of these proceeds”).
52
See United States v. Braxtonbrown–Smith, 278 F.3d 1348, 1354 (D.C. Cir.
2002) (Rutgard’s “holding that tracing is required under § 1957 is a minority
view” (citing United States v. Sokolow, 91 F.3d 396, 409 (3d Cir. 1996); United States
v. Moore, 27 F.3d 969, 976 (4th Cir. 1994); United States v. Johnson, 971 F.2d 562, 570
(10th Cir. 1992))); see also United States v. Haddad, 462 F.3d 783, 792 (7th Cir. 2006);
United States v. Pizano, 421 F.3d 707, 723 (8th Cir. 2005); United States v. Richard,
234 F.3d 763, 768 (1st Cir. 2000).
53
Moore, 27 F.3d at 976–77.
54
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commingling
legitimate
funds
with
criminal
proceeds.”55
Accordingly, we reject Silver’s sufficiency challenge to his money
laundering conviction.
II.
McDonnell v. United States
Having determined that the evidence was sufficient to prove
the counts of conviction against Silver, we now turn to Silver’s
challenge to the District Court’s jury instructions under McDonnell.
The Supreme Court in McDonnell addressed what qualifies as
an “official act” in an honest services fraud or Hobbs Act extortion
quid pro quo. Robert McDonnell, the former Governor of Virginia,
was charged with, among other things, honest services fraud and
Hobbs Act extortion.56 While McDonnell was in office, he and his
wife accepted $175,000 in loans, gifts, and other benefits from
businessman Jonnie Williams, who was the chief executive officer of
Star Scientific, a Virginia‐based company that developed a
nutritional supplement made from antabine, a compound found in
tobacco.57 Williams sought to have Virginia’s public universities
conduct research on the nutritional supplement, and sought
McDonnell’s help to make these studies happen.58 At trial and on
Id. at 977.
55
McDonnell, 136 S. Ct. at 2361.
56
Id.
57
Id.
58
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appeal, the Government argued that McDonnell performed certain
official acts to help Williams in exchange for William’s loans and
gifts.59 These official acts included arranging meetings with state
government officials to discuss the supplement, hosting and
attending events at the Governor’s Mansion for Star Scientific, and
contacting other government officials to encourage antibine studies
at Virginia state universities.60
The parties in McDonnell agreed that the jury charge should
define an “official act” by quoting the federal bribery statute, 18
U.S.C § 201(a)(3), which defines an official act as “any decision or
action on any question, matter, cause, suit, proceeding or
controversy, which may at any time be pending, or which may by
law be brought before any public official, in such official’s official
capacity, or in such official’s place of trust or profit.”61 The
McDonnell district court defined “official act” accordingly for the
jury,62 and further instructed it that official acts “encompassed acts
that a public official customarily performs, including acts in
furtherance of longer‐term goals or in a series of steps to exercise
influence or achieve an end.”63 The jury convicted McDonnell of
Id. at 2365.
59
Id.
60
This is the same statute quoted by Silver in his proposed “official act”
jury instructions. App’x 188; see also text accompanying note 25, ante.
61
McDonnell, 136 S. Ct. at 2365–66.
62
Id. at 2366 (internal quotation marks omitted).
63
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honest services fraud and extortion, and the U.S. Court of Appeals
for the Fourth Circuit affirmed.64
The Supreme Court, however, unanimously vacated the
Fourth Circuit’s judgment and remanded the case.65 The Court ruled
that the jury was incorrectly instructed on the meaning of an
“official act,” and that this error was not harmless because it may
have convicted McDonnell for conduct that is not unlawful.66
Relying on the federal bribery statute’s definition of “official
act,” the Court held that “an ‘official act’ is a decision or action on a
‘question, matter, cause, suit, proceeding or controversy.’”67 The
Court set forth a two‐part test to meet this definition.
Id. at 2366–67.
64
Id. at 2375.
65
Id.
66
Id. at 2371. With its holding, the Supreme Court did not hold that
§ 201(a)(3) of the federal bribery statute must necessarily be the exclusive source
for the definition of an official action in every honest services fraud and Hobbs
Act extortion case. Since “the parties agreed that they would define honest
services fraud with reference to the federal bribery statute,” the Court
incorporated § 201(a)(3)’s definition of an official act into the bribery requirement
for honest services fraud and extortion without explanation. See McDonnell, 136
S. Ct. at 2365–67. In this case, however, while the parties did not agree to apply
§ 201(a)(3)’s definition of “official act” at trial, they each apply the “official act”
definition from McDonnell in support of their arguments on appeal. Neither
party argues for an alternative definition that would allay the constitutional
concerns expressed in McDonnell. Accordingly, we apply the McDonnell’s
definition of an “official act,” as derived from § 201(a)(3).
67
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First, “[t]he ‘question, matter, cause, suit, proceeding or
controversy’ must involve a formal exercise of governmental power
that is similar in nature to a lawsuit before a court, a determination
before an agency, or a hearing before a committee.”68 The Court
further clarified that this question, matter, cause, suit, proceeding or
controversy “must also be something specific and focused that is
‘pending’ or ‘may by law be brought’ before a public official.”69
Second, “to qualify as an ‘official act,’ the public official must
make a decision or take an action on that ‘question, matter, cause,
suit, proceeding or controversy,’ or agree to do so.”70 Such an action
or decision “may include using [an] official position to exert
pressure on another official to perform an ‘official act,’ or to advise
another official, knowing or intending that such advice will form the
basis for an ‘official act’ by another official.”71 Without more,
Id. at 2372.
68
Id. The Supreme Court interpreted “pending” and “may by law be
brought” as “something that is relatively circumscribed—the kind of thing that
can be put on an agenda, tracked for progress, and then checked off as
complete.” Id. at 2359. In addition, the Supreme Court understood “may by law
be brought” to connote “something within the specific duties of an official’s
position.” Id.
69
Id. at 2372.
70
Id.
71
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“setting up a meeting, talking to another official, or organizing an
event (or agreeing to do so),” are not official acts.72
The Supreme Court emphasized that the Government’s
“expansive interpretation of ‘official act’ would raise significant
constitutional
concerns.”73
Those
concerns
included
the
criminalization of virtually all actions taken on behalf of
constituents, subjecting public officials to prosecution without fair
notice due to the vagueness of the Government’s definition, and
setting standards of good government for local and state official in
contravention of federalism principles.74
Applying these principles to McDonnell’s case, the Supreme
Court found that the district court’s jury charge did not include
three instructions that should have been given. Specifically, the
Court held that the district court should have instructed the jury:
that it “must identify a ‘question, matter, cause, suit, proceeding
or controversy’ involving the formal exercise of governmental
power”75;
that “the pertinent ‘question, matter, cause, suit, proceeding or
controversy’ must be something specific and focused that is
Id.
72
Id.
73
Id. at 2372–73.
74
Id. at 2374.
75
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‘pending’ or ‘may by law be brought before any public
official’”76; and,
that “merely arranging a meeting or hosting an event to discuss
a matter does not count as a decision or action on that matter.”77
III.
Honest Services Fraud and Hobbs Act Extortion Counts under
McDonnell
Based on McDonnell, Silver now challenges the District
Court’s jury instructions on the definition of “official act” in its
honest services fraud and Hobbs Act extortion charges. Where a
defendant has timely objected, as Silver did below, “we review a
district court’s jury charge de novo, and will vacate a conviction for
an erroneous charge unless the error was harmless.”78 It is well
settled that “[a]n erroneous instruction, unless harmless, requires a
new trial.”79
We first consider whether the instructions were indeed in
error, before turning to whether the Government met its burden of
proving beyond a reasonable doubt that any such error was
harmless.
Id.
76
Id. at 2375.
77
United States v. Nouri, 711 F.3d 129, 138 (2d Cir. 2013).
78
United States v. Quattrone, 441 F.3d 153, 177 (2d Cir. 2006) (internal
quotation marks omitted).
79
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A.
The Jury Instruction under McDonnell
We consider a jury instruction erroneous “if it misleads the
jury as to the correct legal standard or does not adequately inform
the jury on the law.”80 When conducting this review, “we examine
the charges as a whole to see if the entire charge delivered a correct
interpretation of the law.”81
Upon review of the jury charge in this case, we conclude that
the District Court’s jury instruction defining an official action in its
honest services fraud and Hobbs Act extortion charges was
erroneous under McDonnell. The District Court’s charge,
encompassing “any action taken or to be taken under color of official
authority,”82 was overbroad. Like the improper instruction in
McDonnell, the plain language of the instruction at Silver’s trial
captured lawful conduct, such as arranging meetings or hosting
events with constituents. Further, the District Court’s charge did not
contain any of the three instructions specified in McDonnell.
It bears recalling that the purpose of a proper charge is to give
the jury guideposts as to what would qualify as criminal
wrongdoing under the law. Here, the instructions did not convey to
the jury that an official action must be a decision or action on a
United States v. Finazzo, 850 F.3d 94, 105 (2d Cir. 2017) (internal
quotation marks omitted).
80
Quattrone, 441 F.3d at 177 (internal quotation marks omitted).
81
App’x 629 (emphasis added).
82
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matter involving the formal exercise of government power akin to a
lawsuit, hearing, or agency determination. Nor did the instructions
prevent the jury from concluding that meetings or events with a
public official to discuss a given matter were official acts by that
public official. The Government’s own summation confirms that the
jury instructions conveyed an erroneous understanding of the law as
clarified by McDonnell. The Government expressly urged the jury to
convict because an official act “is not limited to voting on a bill,
making a speech, passing legislation, it is not limited to that,” but
rather, includes “any action taken or to be taken under color of
official authority.”83 The Government thus directly argued that the
District Court’s instruction defining an official act was broader than
the formal exercise of government power described in McDonnell.
Accordingly, the jury could not have received a correct
interpretation of the law.84
Tr. 2857 (emphasis added).
83
In United States v. Boyland, we recently rejected overbroad jury
instructions that did not comport with McDonnell. No. 15‐3118, ‐‐‐ F.3d ‐‐‐‐, 2017
WL 2918840 (2d Cir. July 10, 2017). Specifically, we rejected an honest services
fraud instruction defining an official act as “decisions o[r] actions generally
expected of a public official, including but not limited to contacting or lobbying
other governmental agencies, and advocating for his constituents,” and a Hobbs
Act extortion instruction stating that the jury needed to find that the defendant
“knew that any money he accepted was offered in exchange for a specific
exercise of [the defendant’s] official powers.” Id. at *6, *8–*9. We similarly reject
the official act instructions given at Silver’s trial because of the “constitutional
concerns stemming from the breadth of the interpretation advanced by the
government.” Id. at *9.
84
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The Government argues that the District Court’s charge, taken
as a whole, was consistent with Silver’s proposed additional
instructions and with McDonnell. To salvage the District Court’s
instructions, the Government points to language requiring that
Silver “intend[ed] to be influenced in the performance of his public
duties”; “was expected to exercise official influence or make official
decisions” as a result of bribes or kickbacks; and “intended to do so
as specific opportunities arose.”85 We are not persuaded that the
terms “public duties,” “official influence,” and “official decisions”
convey the requisite specificity that, to qualify as an “official act,”
the given “question, matter, cause, suit, proceeding or controversy”
must involve the formal exercise of governmental power; nor do these
terms specify that the “question, matter, cause, suit, proceeding or
controversy” must be specific and focused like a hearing or
lawsuit.86 Moreover, whatever limiting effect this language may
have had was undone by the District Court’s broad instruction that
an official action included “any action taken under color of official
authority.”87
Though we conclude that the jury instructions at Silver’s trial
were erroneous, we do not ascribe fault to the District Court or to
the Government. The instructions at the trial, given prior to the
Supreme Court’s decision in McDonnell, were consistent with our
App’x 629–30.
85
See McDonnell, 136 S. Ct. at 2371–72.
86
App’x 629 (emphasis added).
87
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precedent at the time.88 Indeed, we commend the District Court’s
forthrightness in acknowledging, after McDonnell was decided, that
its instructions might have been in error.89
B.
Harmlessness
The Government contends that even if the jury instructions
were in error under McDonnell, the error was harmless. We will find
an erroneous jury instruction harmless “only if it is ‘clear beyond a
reasonable doubt that a rational jury would have found the
defendant guilty absent the error.’”90 The Government bears the
burden of establishing harmlessness.91
As explained below, we cannot conclude, beyond a reasonable
doubt, that a rational jury would have found Silver guilty if it had
been properly instructed on the definition of an official act. While
the Government presented evidence of acts that remain “official”
under McDonnell, the jury may have convicted Silver for conduct
See, e.g., United States v. Rosen, 716 F.3d 691, 700 (2d Cir. 2013); see also
App’x 599 (documenting that Silver conceded that his proposed instruction was
supported only by “out‐of‐circuit authority”).
88
Silver, 203 F. Supp. 3d at 381.
89
United States v. Sheehan, 838 F.3d 109, 121 (2d Cir. 2016) (quoting Neder
v. United States, 527 U.S. 1, 18 (1999)).
90
Quattrone, 441 F.3d at 181.
91
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that is not unlawful, and a properly instructed jury might have
reached a different conclusion.92
1.
Mesothelioma Scheme
With a McDonnell instruction, it is possible that a rational jury
would not find that Silver engaged in a quid pro quo to exchange
official acts for Dr. Taub’s referrals.
In this case, the statute of limitations is critical to our analysis.
As previously noted, both honest services fraud and Hobbs Act
extortion charges have a five‐year statute of limitations.93 Here it
only captures conduct occurring after February 19, 2010, five years
before the indictment against Silver.94 Only three acts proven by the
Government fall within the statute of limitations: obtaining an
In Boyland, we affirmed the defendant’s conviction despite finding that
the jury instructions were erroneous under McDonnell. We note, however, that in
addition to the clear factual differences of that case, Boyland did not apply a
harmless error standard of review because the defendant in that case did not
object to the jury instructions. Boyland, 2017 WL 2918840, at *6–*7, *9–*10.
92
18 U.S.C. § 3282.
93
The other acts proven by the Government—approving the HCRA
grants, helping Dr. Taub’s daughter obtain an unpaid internship with a state
court judge, and approving the grant to the Shalom Task Force—all occurred
well outside of the statute of limitations and by themselves cannot support
Silver’s conviction. Silver does not dispute that the HCRA grants and the Shalom
Task Force grant are “official acts” as defined by the Supreme Court in
McDonnell. Silver’s intervention on behalf of Dr. Taub’s daughter to secure an
unpaid internship, however, is not as clearly “official.” We need not reach that
question since this intervention occurred outside the statute of limitations period.
94
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Assembly resolution honoring Dr. Taub, agreeing to assist Dr. Taub
with acquiring permits for a charity race, and helping Dr. Taub’s son
secure a job with a non‐profit receiving state funding.95 Of those acts,
only the Assembly resolution clearly remains an “official act” under
McDonnell. As such, the jury may have convicted Silver by relying
on acts within the statute of limitations period that are no longer
“official” under McDonnell. And a rational jury might not have
convicted had the charge more fully described an “official act.”
First, a rational jury might have concluded that Silver did not
engage in an official act when he agreed to help Dr. Taub with
permits for his charity race. The Government’s evidence showed
that Dr. Taub, along with others, met with Silver at Silver’s New
York City office regarding the race. Silver then sent Dr. Taub a letter
on Assembly letterhead offering to “help navigate the process if
needed.”96 To conclude that this act was “official” under the
teachings of McDonnell, the jury would have to find that Silver
sought to “us[e] his official position to exert pressure on another
official to perform an ‘official act’”—in this case, to issue permits to
Dr. Taub.97 We cannot conclude the jury would have done so.
Indeed, a rational jury with a proper jury instruction could have
found that Silver’s letter offering general assistance with an event
occurring in his district—absent any actual “exert[ion] [of] pressure”
See Addendum A.
95
App’x 706.
96
McDonnell, 136 S. Ct. at 2372.
97
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on other officials regarding a particular matter under their
consideration—did not satisfy the standards for an official act as
defined by McDonnell.98
Similarly, a rational jury with a proper McDonnell instruction
might find that Silver’s letter to OHEL on behalf of Dr. Taub’s son
did not rise to the level of an “official act.” In its summation, the
Government emphasized that Silver recommended Dr. Taub’s son
“on official Assembly letterhead.”99 But using government
letterhead is not, by itself, a formal exercise of government power on
a matter similar to a hearing or lawsuit. Moreover, even assuming,
as the Government contends, that Silver used his official position to
“exert pressure” on the chief executive officer of OHEL, there is no
evidence in the record that Silver or anyone else threatened to
withhold OHEL funding.100 To be sure, a rational juror might well
believe hiring should be based solely on “the merits” rather than on
Id. at 2369. In Boyland, we affirmed in part because, in exchange for
money, “Boyland agreed to ensure that favorable governmental decisions would
be made, whether for licensing, work contracts, zoning, or funding.” Boyland,
2017 WL 2918840, at *10. That agreement, however, was far more explicit than
the offer made by Silver here to help Dr. Taub “navigate” the permit process.
98
Tr. 2859.
99
McDonnell, 136 S. Ct. at 2369. The District Court, addressing the OHEL
issue, stated that using an official position to pressure a non‐governmental entity
or person could constitute an official act. Silver, 203 F. Supp. 3d at 379 n.9, 383–84.
We need not address this question here since we merely conclude that, with a
proper instruction and on this record, a rational jury could have concluded that
Silver’s actions with OHEL were not “official” actions.
100
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the recommendations of successful, powerful, or informed figures,
and thus view negatively recommendation letters of the sort here.
But viewing something negatively is not the same as finding that the
elements of a crime have been met. We cannot conclude, beyond a
reasonable doubt, that the jury would have found that Silver’s
actions with OHEL met the definition of “official act” as defined in
McDonnell.
The only proven act remaining within the statute of
limitations is thus the resolution and proclamation honoring Dr.
Taub. The Government argues, and Silver concedes, that the
resolution is an “official act” under McDonnell.101 We agree, but it is
not clear beyond a reasonable doubt that a rational jury would have
found Silver guilty based on the resolution alone. The resolution
honoring Dr. Taub was a clear formal exercise of government power
on a specific matter: it was brought to the floor of the Assembly by
Silver and subsequently passed by the Assembly. The evidence at
trial, however, established that these honorary resolutions and
proclamations were routine, pro forma exercises rubber stamped by
Assembly members.102 Indeed, in the past year alone, the Assembly
has passed hundreds of honorary resolutions that, among other
things, congratulated newly designated Eagle Scouts,103 celebrated
Gov’t Br. at 30, 36; Oral Argument Transcript at 6, 8.
101
See Tr. 1278–79, 1282–85, 1287, 1289–90.
102
See, e.g., N.Y. Assemb. Res. 86 (2017) (“Congratulating Bailey Hohwald
upon the occasion of receiving the distinguished rank of Eagle Scout . . . .”); N.Y.
Assemb. Res. 85 (2017) (“Congratulating Hector Rios, Jr. upon the occasion of
103
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high school sports teams,104 commended retirees,105 and
commemorated the “retirement” of a jersey worn by a Stony Brook
University athlete.106 A rational jury could thus conclude that,
though certainly “official,” the prolific and perfunctory nature of
these resolutions make them de minimis quos unworthy of a quid.
The Government, citing the District Court’s statute of
limitations instruction, primarily argues that it need not prove that
Silver committed an official act within the statute of limitations
period, only that some aspect of the quid pro quo scheme extended
receiving the distinguished rank of Eagle Scout . . . .”); N.Y. Assemb. Res. 11
(2017) (“Congratulating Daniel A. Molloy upon the occasion of receiving the
distinguished rank of Eagle Scout . . . .”).
See, e.g., N.Y. Assemb. Res. 318 (2017) (“Honoring the 2007 Thomas R.
Proctor High School Baseball Team upon the occasion of its induction into the
Greater Utica Sports Hall of Fame”); N.Y. Assemb. Res. 244 (2017)
(“Congratulating the Baldwin High School Girls Basketball Team . . . upon the
occasion of capturing the New York State Public High School Athletic
Association Class AA Championship . . . .”).
104
See, e.g., N.Y. Assemb. Res. 326 (2017) (“Commending Fire Chief
Gerald J. VanDeWalle upon the occasion of his retirement after 40 years of
dedicated service to the Newark Volunteer Fire Department”); N.Y. Assemb.
Res. 305 (2017) (“Congratulating The Reverend Gary W. Bonebrake, D. Min.,
upon the occasion of his retirement after 22 years of distinguished service to
Main Street Baptist Church in Oneonta, New York”).
105
See, e.g., N.Y. State Assemb. Res. 46 (“Commemorating the retirement
of the No. 20 jersey worn by Stony Brook’s Jameel Warney, a three‐time America
East Player of the Year and the most decorated player in Seawolves
basketball history.”).
106
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into the statute of limitations period.107 The Government accordingly
contends that Silver took action in furtherance of the scheme within
the statute of limitations period, including demanding additional
referrals from Dr. Taub on May 25, 2010, continuing to receive
mesothelioma leads from Dr. Taub, and engaging in various phone
calls and mailings in furtherance of the scheme.108 The Government
concludes that, even if the only official actions Silver ever took were
the award of the HCRA grants and the Assembly resolution, it is
clear beyond a reasonable doubt that the scheme continued into the
limitations period.109
We agree that the Government need not prove that an official
act occurred within the statute of limitations period. The
Government need only prove that some aspect of the particular quid
pro quo scheme continued into the statute of limitations period.110
Here, however, most of the acts relied upon by the Government may
no longer be “official.” Thus, it is entirely conceivable that a
Gov’t Br. at 35–36.
107
Id. at 36; see also Special App’x 1425.
108
Gov’t Br. at 36.
109
See United States v. Rosen, 716 F.3d 691, 700 (2d Cir. 2013) (“Once the
quid pro quo has been established, . . . the specific transactions comprising the
illegal scheme need not match up this for that.” (internal quotation marks
omitted)); United States v. Smith, 198 F.3d 377, 384 (2d Cir. 1999) (Hobbs Act
extortion is “a continuing offense” in the context of venue); cf. United States v.
Rutigliano, 790 F.3d 389, 400–01 (2d Cir. 2015) (receipt of a payment within the
statute of limitations period was an overt act in furtherance of an ongoing
conspiracy to commit mail, wire, and health care fraud).
110
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properly instructed rational jury would have viewed the quid pro quo
scheme as limited to the exchange of referrals for HCRA grant money.
Assuming that is the case, it is possible that a rational jury could also
find that this quid pro quo arrangement ended when Silver told Dr.
Taub that he would no longer provide him with HCRA grants,
which occurred well before the statute of limitations period began to
run in 2010. Given this possibility, we cannot say, beyond a
reasonable doubt, that a rational jury would have convicted Silver if
properly instructed.
2.
Real Estate Scheme
For the Real Estate Scheme, the Government at trial contended
that the following acts by Silver were “official”: his PACB proxy
votes for bond approvals; his meeting with Glenwood lobbyists
prior to the passage of the Rent Act of 2011; his approval of real
estate legislation benefiting the Developers, including the Rent Act
of 2011; and his opposition to a methadone clinic near a Glenwood
property. It is not clear, beyond a reasonable doubt, that a properly
instructed rational jury would have found an official act quid pro quo
based on these acts.
Assuming the jury was properly instructed, it is possible that
it would not have considered Silver’s opposition to the methadone
clinic an official act. The only action Silver took regarding the clinic
was to draft a letter to be distributed publicly that expressed his
strong opposition to the clinic. Taking a public position on an issue,
by itself, is not a formal exercise of governmental power, and is
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therefore not an “official act” under McDonnell. The record does not
establish that Silver formally used his power as Speaker of the
Assembly to oppose the clinic and, accordingly, a rational jury might
not have found his opposition to be an “official act.”111
Similarly, because the District Court’s charge did not
specifically instruct the jury that a meeting on its own is not official
action, it is possible that the jury improperly concluded that the
meeting between Silver and Glenwood lobbyists was an official act.
This possibility is certainly “reasonable,” if not probable, in light of
the Government’s argument during its summation that this meeting,
by itself, was an official action.112 Simply meeting to discuss the
terms of the Rent Act of 2011, without more, does not qualify as a
“decision” or “action” under McDonnell.
The remaining acts proved by the Government—Silver’s
PACB proxy votes—may not have been enough for a rational,
properly instructed jury to conclude that there was a quid pro quo.
Assuming, arguendo, that Silver’s PACB and housing legislation
The Government and the District Court both state that there was
evidence in the record to suggest that Silver sought to take credit for causing the
clinic to be relocated, implying that he did or intended to take some action to
oppose the clinic. See Silver, 203 F. Supp. 3d at 384 n.14 (citing Tr. 1602–05, 1752–
53); Gov’t Br. at 43 n.6. While that may be, a rational jury might reach a different
conclusion given that there was no evidence presented that Silver took any action
to relocate the clinic other than publicly stating his opposition.
111
Tr. 2892–93.
112
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votes qualify as “official acts” under McDonnell,113 a rational jury
might not view these acts as part of a quo exchanged for the
Developers’ tax certiorari business.
First, a properly instructed rational jury might not have
concluded that Silver’s legislative votes were part of a quid pro quo
scheme. There is little else linking Silver’s passage of real estate
legislation to the Developers’ referral fees other than the 2011
meeting between Glenwood lobbyists and Silver. As the District
Court rightly noted, the Glenwood meeting was “the most
compelling evidence on which a rational jury could have relied to
conclude that Silver understood and intended there to be a quid pro
quo.”114 But even if the jury viewed the Glenwood meeting as
circumstantial evidence of a quid pro quo, we cannot say beyond a
reasonable doubt that a properly instructed jury would have found a
quid pro quo for legislative votes.
Further, a juror could reasonably conclude that the PACB
approvals were too perfunctory to be regarded as a quo—that is, not
part of any fraudulent scheme. There was no evidence adduced that
any of the PACB financing approvals were particularly
Silver questions whether votes by a proxy could be official acts
performed by him. We need not reach this question of who possessed authority
over the acts here.
113
Silver, 184 F. Supp. 3d at 46. Indeed, the jury could have concluded,
easily, but mistakenly, that the meeting itself sufficed to show an official act, and
gone no further.
114
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controversial, and one Government witness even stated that, in his
experience, the PACB approved every financing request.115
Accordingly, a rational jury with proper instructions could
conclude that Silver’s PACB and real estate legislation votes were
not part of any quid pro quo “scheme.” The Government characterizes
this conclusion—that a rational jury could have concluded that the
official acts proven were not part of a quid pro quo arrangement—as
one necessarily based on sufficiency of the evidence. We disagree.
The issue of whether the Government adduced sufficient evidence to
support the convictions is distinct from whether it is clear beyond a
reasonable doubt that a properly instructed jury would have
convicted. We conclude only that, in the matter of the Real Estate
Scheme counts against Silver, it is not clear beyond a reasonable
doubt that a rational jury would have convicted Silver if given
proper instructions under McDonnell.
IV.
Money Laundering Count
Silver also argues that, were we to vacate his honest services
fraud and extortion counts for a new trial, we would necessarily
need to vacate his money laundering count as well. As noted above,
18 U.S.C. § 1957 prohibits engaging in monetary transactions in
property “derived from specified unlawful activity.”116 Here, the
specified unlawful activity charged in the indictment and proven at
Tr. 1957; see also note 18, ante.
115
18 U.S.C. § 1957.
116
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trial is the honest services fraud and extortion verdict that we now
vacate. We therefore must also vacate the conviction of Silver on the
money laundering count.
CONCLUSION
We recognize that many would view the facts adduced at
Silver’s trial with distaste. The question presented to us, however, is
not how a jury would likely view the evidence presented by the
Government. Rather, it is whether it is clear, beyond a reasonable
doubt, that a rational jury, properly instructed, would have found
Silver guilty. Given the teachings of the Supreme Court in
McDonnell, and the particular circumstances of this case, we simply
cannot reach that conclusion. Accordingly, we are required to vacate
the honest services fraud and extortion counts against Silver, as well
as the money laundering count.
To summarize, we hold as follows:
(1) the evidence presented by the Government was sufficient
to prove the Hobbs Act extortion and honest services fraud
counts of conviction against Silver;
(2) the evidence presented by the Government was sufficient
to prove the money laundering count of conviction against
Silver because the Government was not required to trace
criminal funds that were commingled with legitimate
funds under 18 U.S.C. § 1957;
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(3) the District Court’s jury instruction on its honest services
fraud and Hobbs Act extortion charge, defining an official
act as “any action taken or to be taken under color of
official authority,” was erroneous under McDonnell;
(4) a properly instructed rational jury may not have convicted
Silver, and accordingly the District Court’s error was not
harmless beyond a reasonable doubt; and
(5) the verdict on the money laundering count against Silver
was predicated on the verdicts rendered on Silver’s honest
services fraud and extortion counts and must fall with
those verdicts.
Accordingly, we VACATE the District Court’s judgment of
conviction on all counts and REMAND the cause to the District
Court for such further proceedings as may be appropriate in the
circumstances and consistent with this opinion.
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ADDENDUM A: Mesothelioma Scheme Timeline1
Date
Event
Official Act or
Not, as
Argued by the
Government2
Not Official
Fall 2002
Silver, Speaker of the New York
Assembly since 1994, becomes ʺof
counselʺ at W&L.
Fall 2003
Dr. Taub, at an event, asks Silver to
Not Official
encourage W&L to donate money to
mesothelioma research. Silver responds
that he could not get them to do so.
Within two weeks, Silver asks Dr. Taub to
refer mesothelioma cases to W&L
through him.
Nov. 2003
Dr. Taub starts providing referrals to
W&L through Silver.
Not Official
Not Official
Jan. 2004
Dr. Taub sends a letter to Silver
requesting state funding for his research
after learning that Silver wanted him to
apply.
This timeline summarizes the events supporting Count One (honest
services mail fraud), Count Two (honest services wire fraud), and Count Five
(Hobbs Act extortion) of the indictment.
1
This column describes whether the Government argued on appeal that
the given event was an “official act.” All “official acts” argued by the
Government are denoted as “official” and bolded.
2
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Jan. 2005
Silver invites Dr. Taub to attend the State
of the State ceremony at the New York
State Capitol. He then puts Dr. Taub in
touch with one of his staffers to discuss
the status of Dr. Taub’s grant request.
Mar. 2005
Silver receives first referral fee check from Not Official
W&L for $176,048.02.
Official
July 2005
Silver approves a $250,000 state grant to
Columbia University to support Dr.
Taub’s research, funded out of the
HRCA Assembly Pool.
Official
Aug. 2006
Silver approves a second $250,000 state
grant to Columbia for Dr. Taub’s
research out of the HCRA pool.
Official
Jan. 2007
Silver has his Assembly staff call a state
trial judge to ask him to hire Dr. Taub’s
daughter as an unpaid intern.
Oct. 2007
Dr. Taub sends Silver a letter requesting a Not Official
third HRCA grant. Responding to a state
law change requiring disclosure of HRCA
grants and disclosures of any conflicts of
interest, Silver tells Dr. Taub that he
cannot approve any more state grants.
Dr. Taub nonetheless continues referring
patients to Silver.
May 2008
Silver awards $25,000 in state grant
Official
funding to the Shalom Task Force, a
non‐profit of which Dr. Taub’s wife was
a board member.
Feb. 19, 2010
Statute of limitations date (5 years from
indictment)
50
Not Official
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Silver appears in Dr. Taub’s office to
Not Official
complain he had been receiving fewer
May 25, 2010 referrals. Following this conversation, Dr.
Taub continues to provide leads to Silver
to maintain the relationship.
May 2011
Silver has staff prepare an Assembly
resolution and official proclamation
honoring Dr. Taub, which he later
presents to Dr. Taub at a public event.
Fall 2011
Silver meets with Dr. Taub and others to Official
discuss a “Miles for Meso” charity race
that Dr. Taub was trying to organize in
Silver’s district. Silver then sends Dr.
Taub a letter offering to help him
navigate the permitting process. The
race ultimately does not occur.
Winter 2012
Silver makes two calls and sends a letter Official
to help Dr. Taub’s son get a job with
OHEL, a non‐profit organization
receiving millions in state funding
controlled by Silver.
Feb. 19, 2015 Indictment
Official
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ADDENDUM B: Real Estate Scheme Timeline1
Date
Event
Official Act or
Not, as Argued
by the
Government2
Not Official
1994
Silver is elected Speaker of the Assembly
and in that capacity, he becomes one of
three voting members of the PACB.
1997
Silver refers real estate developer
Glenwood to his friend Jay Arthur
Goldberg for tax certiorari work.
Glenwood hires Goldberg’s firm, G&I.
2005
Silver tells real estate developer Witkoff
Not Official
that his friend Goldberg needed business.
Both Glenwood and Witkoff start to
move their tax certiorari work to G&I
over time.
Feb. 19, 2010
Statute of limitations date (5 years before
indictment)
Not Official
This timeline summarizes the events supporting Count Three (honest
services mail fraud), Count Four (honest services wire fraud), and Count Six
(Hobbs Act extortion) of the indictment.
1
This column describes whether the Government argued on appeal that
the given event was an “official act.” All “official acts” argued by the Government
are denoted as “official” and bolded.
2
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June 2011
Silver meets with Glenwood lobbyists
Official
to discuss pending real estate legislation
to ensure that Glenwood is satisfied
with the legislation. Later that month,
Silver votes for the Rent Act of 2011 and
tax abatement renewal legislation, both
benefiting Glenwood.
Dec. 2011
Silver publicly opposes relocation of a
Official
methadone clinic proposed to be located
near a Glenwood building in Silverʹs
district.
Dec. 2011
Silver informs a Glenwood lobbyist of his Not Official
fee‐sharing arrangement with Goldberg
since proposed retainer agreements
referencing Silver were sent to Glenwood.
Jan. 2012
Glenwood executes secret fee‐sharing
side letter with Silver.
Not Official
Not Official
June 2014
Witkoff learns about Silver’s fee‐sharing
during a call with Goldberg, who had
received a grand jury subpoena in
connection with the Government’s
investigation of Silver.
Feb. 19, 2015 Indictment
Two Real Estate Scheme events occurred repeatedly both before and
during the period of time captured by the statute of limitations
period. The Government argues both are “official acts.”
Silver repeatedly votes, through a proxy, as one of three
veto‐wielding members of the PACB, to approve
Glenwood’s requests for tax‐exempt financing.
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Silver regularly approves and votes for rent and tax
abatement legislation sought by, among others,
Glenwood.
54
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