203 F.Supp.3d 370
S.D.N.Y.2016Background
- Sheldon Silver, former NY Assembly Speaker, was convicted by a jury of honest-services mail and wire fraud, Hobbs Act extortion under color of official right, and money laundering for two schemes: (1) a Mesothelioma Scheme involving referral fees from Weitz & Luxenberg tied to favors to Dr. Taub and (2) a Real Estate Scheme involving referral fees tied to favorable actions for Glenwood and the Witkoff Group.
- In the Mesothelioma Scheme Silver received roughly $3 million in referral fees and used his office to secure state grants, internships, honorary resolutions, permit assistance, and placement of Dr. Taub’s son at a nonprofit that received state funding.
- In the Real Estate Scheme Silver received approximately $835,000 in referral fees and took official actions including PACB votes, opposition to a methadone clinic relocation, and influencing rent- and tax-related legislation.
- Silver was sentenced to 12 years (honest-services and extortion counts) and 10 years (money laundering) to run concurrently; court ordered a $1,750,000 fine and forfeiture of $5,393,976.63.
- Silver moved to continue bail and to stay the fine and forfeiture pending appeal, principally arguing that McDonnell v. United States narrowed what qualifies as an “official act,” making the jury charge potentially erroneous and non-harmless. The district court granted the motion in part.
Issues
| Issue | Plaintiff's Argument (Government) | Defendant's Argument (Silver) | Held |
|---|---|---|---|
| Whether the jury charge on “official action” was erroneous post-McDonnell | Charge as given, read as a whole, adequately conveyed lawful standards and any error was harmless because many acts were clearly official (grants, PACB votes, legislation) | McDonnell narrowed the meaning of “official act”; the jury charge omitted McDonnell’s three key requirements, so convictions rest on conduct that may not be criminal, warranting continued bail pending appeal | Court: Close question exists whether the charge omitted McDonnell’s required elements; substantial question raised and harmlessness is not clearly established — bail continued pending appeal in part |
| Whether actions like arranging meetings, issuing proclamations, assisting with permits, or helping a private nonprofit hire are “official acts” under McDonnell | Many of the contested acts (grants, PACB votes, legislation) are indisputably official; meetings/proclamations/permits were evidence of quid pro quo and harmless error | Such actions may fall outside McDonnell’s requirement of a specific, pending formal exercise of governmental power; jury may have relied on non-action conduct | Court: For some acts (PACB votes, grants, legislation) error would be harmless; for others (resolutions, meetings, internships, nonprofit hiring) substantial questions exist and could affect verdicts |
| Whether the statute-of-limitations instruction and application could render convictions invalid | Government contends evidence showed the scheme continued into limitations period via referrals/payments/wires, so limitations defense fails | Silver contends the jury may have convicted based on acts outside the limitations period or without clear instruction about what constitutes continuation into the period | Court: Statute-of-limitations instruction was less specific; combined with official-action issues, a substantial question exists whether convictions could have rested on time-barred conduct |
| Whether the fine and forfeiture should be stayed pending appeal | Government opposed full stay; argued forfeiture/fine should stand or be secured | Silver showed possible irreparable harm (forced sale of residences, liquidation of retirement) and a potentially meritorious appeal under McDonnell | Court: Stayed payment schedule in part (monthly payments ordered); preserved assets (freeze/no transfer) and stayed certain aspects of financial penalties pending appeal |
Key Cases Cited
- McDonnell v. United States, 136 S. Ct. 2355 (2016) (Supreme Court clarified narrow definition of “official act” for bribery/quid pro quo prosecutions)
- United States v. Randell, 761 F.2d 122 (2d Cir. 1985) (standard for what constitutes a "substantial question" warranting release pending appeal)
- United States v. Quattrone, 441 F.3d 153 (2d Cir. 2006) (standards for determining whether a jury charge adequately informed a jury of the law)
- United States v. Bah, 574 F.3d 106 (2d Cir. 2009) (harmless-error standard for erroneous jury instructions)