United States v. Rodrigues
678 F.3d 693
9th Cir.2012Background
- Rodrigues, state director of UPW, negotiated UPW/insurance contracts with HDS and PGMA.
- He arranged for so-called consultant fees to be paid to designated consultants funded by UPW premiums.
- Consultants were Al Loughrin (Rodrigues's former ally) and Sabatini (Rodrigues's daughter via shell companies).
- Consultants performed no real work; funds were diverted for Rodrigues's personal use, including repaying a loan and buying a truck.
- HDS and intermediaries routed consultant fees through several entities (VEBAH, MAP, Four Winds, Auli`i, Inc.) before reaching Sabatini or Rodrigues; the scheme spanned 1992–1998, with ongoing concealment.
- Rodrigues was convicted by a jury on counts including honest services theft, conspiracy, embezzlement, money laundering, and health care fraud; on appeal, this court acknowledged an instructional omission later clarified by Skilling.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the omitted kickback element in the jury instruction was harmless | Skilling requires proper instruction on kickbacks; omission could prejudice | No substantial prejudice; evidence shows kickbacks beyond omission | Harmless error; no substantial prejudice; convictions affirmed |
| Whether the consultant-fee scheme constituted kickbacks under 18 U.S.C. §1346 | Fees improperly enriched Rodrigues and associates via UPW contracts | Payments went to consultants, circumventing direct receipt by Rodrigues; still kickbacks by conspiracy | Kickbacks proven; scheme satisfied Skilling standards; convictions affirmed |
Key Cases Cited
- Skilling v. United States, 130 S. Ct. 2896 (2010) (limits honest-services fraud to bribes/kickbacks; informs jury instruction)
- Neder v. United States, 527 U.S. 1 (1999) (harmlessness beyond a reasonable doubt standard for instructional omissions)
- Brecht v. Abrahamson, 507 U.S. 619 (1993) (harmless-error standard for appellate review)
- Hedgpeth v. Pulido, 555 U.S. 57 (2008) (pre/post-verdict harmlessness framework for instructional errors (per curiam))
- Padilla v. Terhune, 309 F.3d 614 (2002) ( Ninth Circuit on harmless error and evidentiary review)
- McNally v. United States, 483 U.S. 350 (1987) (kickback concept and wealth from public contracts referenced by Skilling)