United States v. Silver
2017 U.S. App. LEXIS 12493
| 2d Cir. | 2017Background
- Sheldon Silver, long-time New York Assembly Speaker, was indicted (2015) on honest-services fraud, Hobbs Act extortion, and money‑laundering charges based on two alleged quid‑pro‑quo schemes: (1) mesothelioma‑referral fees from Weitz & Luxenberg tied to favors for Dr. Taub (≈ $3M), and (2) referral fees from Goldberg & Iryami tied to actions favoring two developers (≈ $835K).
- Government alleged Silver performed ‘official acts’ (grants, legislative votes, PACB proxy votes, letters, meetings, a resolution, and personnel interventions) in exchange for referral fees; he also invested proceeds in private vehicles.
- At trial (S.D.N.Y.) the district court instructed the jury that an “official action includes any action taken or to be taken under color of official authority.” The jury convicted on all counts; Silver was sentenced to 12 years.
- After conviction, the Supreme Court decided McDonnell v. United States, clarifying that an “official act” is a decision or action on a specific ‘‘question, matter, cause, suit, proceeding or controversy’’ involving a formal exercise of governmental power, and that merely arranging meetings or hosting events are not alone official acts.
- On appeal the Second Circuit held the district court’s jury instruction was erroneous under McDonnell, that the error was not harmless beyond a reasonable doubt (given statute‑of‑limitations and which proven acts remain “official”), and therefore vacated all convictions including the §1957 money‑laundering count (because it depended on the underlying convictions).
Issues
| Issue | Plaintiff's Argument (Government) | Defendant's Argument (Silver) | Held |
|---|---|---|---|
| Whether jury instruction defining “official act” was legally sufficient under McDonnell | Instruction allowing conviction for “any action under color of official authority” correctly captured official acts at trial | Instruction was overbroad and inconsistent with McDonnell; required reversal | Court: Instruction was erroneous under McDonnell and overbroad; vacated convictions |
| Sufficiency of evidence for honest‑services fraud and Hobbs Act extortion | Evidence (grants, PACB votes, legislation, meetings, letters, resolution, personnel help) established quid‑pro‑quo and deprivation of property | Many acts were non‑official (meetings, letters, routine resolutions); insufficient as quid‑pro‑quo under correct McDonnell standard | Court: Evidence was sufficient under pre‑McDonnell standard, but because instruction was erroneous and not harmless, convictions vacated |
| Whether Government must trace commingled funds for §1957 money‑laundering conviction | No tracing required; funds are fungible and tracing would permit easy defeat of prosecutions | Government had to trace criminal proceeds where commingled with legitimate funds | Court: Adopted majority view — tracing not required; §1957 conviction supportable on evidence, but money‑laundering vacated because it depended on vacated predicate convictions |
| Harmless‑error given McDonnell and statute of limitations | Even if some earlier acts were outside limitations, scheme continued into limitations period (e.g., continuing receipt of referrals) so error was harmless | Many acts within limitations (meetings, letters, resolution) are not official acts under McDonnell; a properly instructed jury might acquit | Court: Error was not harmless beyond a reasonable doubt — properly instructed jury might not have convicted given limited acts within limitations period |
Key Cases Cited
- McDonnell v. United States, 136 S. Ct. 2355 (2016) (defines “official act” as decision/action on a specific question, matter, cause, suit, proceeding, or controversy involving formal governmental power)
- Skilling v. United States, 561 U.S. 358 (2010) (honest‑services fraud limited principally to bribery and kickback schemes)
- Sekhar v. United States, 133 S. Ct. 2720 (2013) (definition of ‘‘property’’ in Hobbs Act/context on extortion elements)
- Neder v. United States, 527 U.S. 1 (1999) (harmless‑error standard for erroneous jury instructions)
- United States v. Rybicki, 354 F.3d 124 (2d Cir. 2003) (distinguishing undisclosed self‑dealing from bribe/kickback honest‑services liability)