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Third Circuit Opinion: United States v. Ferriero

Arseneault & Fassett, LLC

In United States v. Ferriero, No. 15-4064 (3d Cir. Aug. 4, 2017), the U.S. Court of Appeals for the Third Circuit upheld the convictions of a former county Democratic party chairman for violations of the Travel Act, the Racketeering Influenced and Corrupt Organizations (RICO) Act, and wire fraud. The defendant had a contract with a vendor of emergency notification services to receive commissions for business that he was able to generate from municipalities. Defendant then introduced high-ranking officials from several towns to the vendor and encouraged them to do business while failing to disclose that he stood to gain financially.

Defendant argued on appeal that his conviction under the Travel Act, 18 U.S.C. 1952, should be overturned because the Government failed to prove that by violating New Jersey’s bribery statute, he agreed “to undermine the integrity of the towns’ processes in considering whether to purchase the [vendor’s] product,” relying on United States v. Dansker, 537 F.2d 40 (3d Cir. 1976). The Court disagreed, reasoning that Dansker applied that additional requirement to a previous version of the bribery statute which has since been repealed and replaced. The Court found that the current version of the statute, N.J.S.A. 2C:27-2, is more narrow than the previous one, and thus does not require the additional element. The Court held that the evidence was sufficient to support defendant’s violation of 2C:27-2 and his conviction under the Travel Act.

Likewise, the Court upheld the defendant’s conviction under RICO, 18 U.S.C. §1962(c). Defendant argued that there was insufficient evidence of a “nexus” between the business of the “enterprise” (the party organization) and the pattern of racketeering (bribery). The Court concluded that a sufficient nexus did exist, because the party organization hosted networking events for vendors and municipal officials, and it was the defendant’s practice, if not his official duty, to advise municipal officials on hiring vendors. The Court held that a rational juror could conclude that the pattern of bribery was one means by which the defendant conducted party business.

Finally, the defendant appealed his conviction for wire fraud, 18 U.S.C. §1343. Ferriero argued that an email which his business partner sent in response to a municipal official’s inquiry about who owned the vendor was truthful as far as it went, and omission of Ferriero’s financial interest did not qualify as a “false representation.” The Court disagreed, holding that, in context, the email withheld “critical qualifying information.” The Court held that “whether a representation is false or fraudulent is a contextual inquiry that a jury is particularly well-suited to assess,” given its first-hand access to witness testimony. In this case, a rational jury could find that the omission of critical information alone was sufficient to support a conviction. Thus the Court rejected Ferriero’s appeal and upheld his conviction in its entirety.

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