UNITED STATES OF AMERICA, Appellee, υ. STEPHEN M. CALK, AKA, SEALED DEFENDANT 1, Defendant-Appellant.
No. 22-313
United States Court of Appeals For the Second Circuit
DECIDED: NOVEMBER 28, 2023
AUGUST TERM, 2022; ARGUED: MAY 17, 2023
Before: CALABRESI, LOHIER, NATHAN, Circuit Judges.
Defendant-Appellant Stephen Calk (“Calk“) appeals from his convictions following a jury trial in the United States District Court for the Southern District of New York (Schofield, J.). Calk was convicted under the financial institution bribery statute,
PAUL M. MONTELEONI, Assistant United States Attorney (Alexandra Rothman, Hagan Scotten, Thomas McKay, Assistant United States Attorneys, on the brief), for Damian Williams, United States Attorney for the Southern District of New York, New York, N.Y.
ALEXANDRA A.E. SHAPIRO (Daniel J. O‘Neill, Avery D. Medjuck, Shapiro Arato Bach LLP, New York, N.Y., Paul H. Schoeman, Darren A. LaVerne, Kramer Levin Naftalis & Frankel LLP, New York, N.Y., on the brief), for Defendant-Appellant.
CALABRESI, Circuit Judge:
This case asks us, as a matter of first impression, to interpret the scope of the financial institution bribery statute,
On appeal, Calk raises four challenges. First, Calk challenges (a) what constitutes “corrupt” conduct under
We hold:
First, that “corrupt” conduct describes actions motivated by an improper purpose, even if such actions (a) did not entail a breach of duty, and (b) were motivated in part by a neutral or proper purpose, as well as by an improper purpose.
Second, that a “thing of value” may cover subjectively valuable intangibles, such as political assistance, including endorsements, guidance, and referrals.
Third, that the “thing of value” may be measured by its value to the parties, by the value of what it is exchanged for, or by its market value.
We further hold that the jury instructions were proper and that the record includes sufficient evidence that would allow a jury to conclude that Calk, as Chief Executive Officer of a financial institution, improperly facilitated approval of several loan applications in exchange for Manafort‘s political assistance, which Calk valued at more than $1,000.
Moreover, we hold that the district court properly determined that Calk‘s conviction did not depend on testimony procured through the improper use of a grand jury subpoena.
Accordingly, we AFFIRM the judgment of conviction.
BACKGROUND
Calk was, until 2019, the Chairman and Chief Executive Officer of The Federal Savings Bank (“TFSB“), a federal savings association headquartered in Illinois with an office in Manhattan. National Bancorp Holdings, Inc. (the “Holding Company“) owns TFSB, and Calk is the principal shareholder of the Holding Company. TFSB keeps deposits insured by the Federal Deposit Insurance Corporation, and it is primarily in the business of extending residential, construction, and other commercial loans.
In 2016, Paul Manafort (“Manafort“), a lobbyist and political consultant, approached TFSB on several occasions to secure loans. By June 2016, Manafort had been appointed chairman of the presidential campaign of then-candidate Donald Trump (the “Trump Campaign“). Each of Manafort‘s loan applications presented some technical or regulatory challenge, but TFSB found a workaround to each obstacle, either at Calk‘s express instruction or with Calk‘s assent.
The Government alleged that, taking advantage of his position as an officer of TFSB, Calk sought to facilitate approval of Manafort‘s loan applications in exchange for assistance in securing an appointment to a position first with the Trump Campaign and later with the then-incoming presidential administration of Donald Trump (the “Trump Administration“). Because the Government did not specify which loan Calk facilitated in exchange for Manafort‘s political assistance, and because
I. The Loan Applications
A. The California Loan
In July 2016, Manafort sought a $5.7 million loan (the “California Loan“) to refinance a prior loan and to continue financing construction of a real estate development in California.1 The loan was to be secured by Manafort‘s property in Virginia and would be repaid from the sale of the completed real estate development. Calk joined, by video, an initial meeting between Manafort and Dennis Raico (“Raico“), a TFSB loan officer handling the Manafort account. At the end of that early meeting with Manafort, Calk expressed interest in serving on the Trump Campaign.
Within twenty-four hours of the meeting, TFSB conditionally approved the proposed California Loan. According to at least one TFSB staff member who was directly involved in the review process, Calk took a particular interest in ensuring swift approval of the California Loan.
After TFSB conditionally approved the California Loan, Calk and Manafort began to discuss Calk‘s interest in a role in the Trump Campaign. Within a week of the loan‘s conditional approval, in August 2016, Manafort contacted TFSB staff to ask for a copy of Calk‘s resume. Calk then sent Manafort an email with his resume, and Manafort replied with an offer for Calk to join the National Economic Advisory Committee (“NEAC“). NEAC was a body of prominent businessmen supporting then-candidate Trump. Calk accepted the offer. On August 5, 2016, the Trump Campaign announced NEAC‘s creation, and Calk was named as one of its fourteen members.
Over the two months following TFSB‘s conditional approval of the California Loan, however, TFSB officers uncovered problems with the proposed loan. Appraisals on properties proposed as collateral for the California Loan came out lower than expected. TFSB staff were unable to verify Manafort‘s reported income and found a $300,000 delinquency on one of Manafort‘s credit cards. A TFSB loan officer wrote a memorandum summarizing these concerns and suggesting that TFSB increase the origination fee and require additional collateral. Calk was not initially included in these exchanges, but, by August 2016, Calk had become directly aware of the problems with Manafort‘s loan application.
Despite these problems, in October 2016, at Manafort‘s request and with Calk‘s endorsement, TFSB approved an increase in the proposed loan amount to $9.2 million. In an email to Calk, Manafort expressed his gratitude for Calk‘s assistance in securing the loan increase, stating: “I also want to again thank you for fixing my issue. It means a lot to me. You are becoming a very good friend, and I look forward to building our relationship into both a deeper business and personal one.” Trial Tr. 479.
B. The Summerbreeze Loan
On October 19, 2016, shortly before its scheduled closing, Manafort backed out of
TFSB officers were, at first, reluctant to approve the Summerbreeze Loan. On October 20, 2016, Javier Ubarri (“Ubarri“), the president of TFSB, expressed to Raico and Calk doubts about the proposed loan, as it would significantly increase the risk to which TFSB would be exposed and TFSB did not generally renegotiate a loan that had been on the brink of closing. But Raico testified that, despite Ubarri‘s reluctance, Calk “was looking to move forward.” Trial Tr. 1029.
Raico, the loan officer handling Manafort‘s loan applications, then proposed that TFSB broker the Summerbreeze Loan to another lender, the Bank of the Internet (“BofI“). TFSB would earn a commission on the transaction without having to bear fully the loan‘s risk. On November 7, 2016, Raico emailed Calk and advised him that BofI would approve the loan purchase the next day, which was Election Day.
The following evening, election night, Calk sent Manafort a series of messages. The first related to the impending loan: “Paul, I hope you‘re having a great night. We should have your approval all wrapped up by tomorrow I am being told. Enjoy the rest of the evening and I‘ll speak to you then.” App. 530. The second referred both to the loan and the election: “Paul, I‘ve got press all day tomorrow. When can we speak to schedule a closing? Do you need me in New York? I‘m ready to support in any way.” App. 530.
BofI, however, did not approve the loan as early as Raico and Calk anticipated. Based, in part, on representations of Manafort‘s income made in his tax returns,2 Ubarri and other TFSB loan officers reconsidered whether TFSB should directly issue the Summerbreeze Loan. And, around November 11, 2016, with no response from BofI, Calk agreed TFSB should underwrite the loan directly, rather than selling the loan to BofI. TFSB sent Manafort a term sheet later that day. That same day, according to Raico‘s diary and his trial testimony, Calk asked Raico to call Manafort and ask whether Calk was in consideration for Secretary of the Treasury or other positions.
On November 12, 2016, Calk called Manafort directly and engaged him in an approximately eighteen-minute-long conversation. Two days later, Calk emailed Manafort a professional biography and a document titled “Stephen M. Calk Perspective Rolls [sic] in the Trump Administration.docx” that contained a list of official government positions desired by Calk. Supplemental App. 68. The list included ten sub-Cabinet secretary, deputy secretary, and under-secretary positions, ranked by order of preference. Calk further asked Manafort whether he was “aiding in the [presidential] transition in any type of formal capacity[.]” App. 496. Manafort answered: “Total background but involved directly.” Calk responded, in relevant part, “Awesome.” App. 495-96.
The next day, November 15, 2016, Calk sent Manafort an email with a document titled “Stephen M. Calk – Candidate for Secretary of the Army.docx” and wrote: “Will you please review the attached document
Calk also consulted with others regarding his desire to serve in the incoming administration, including Steven Cortes (“Cortes“), who had worked on the Trump Campaign, and General Bernard Banks (“Banks“), a friend and member of TFSB‘s board. Cortes told Calk that Manafort was unlikely to have any influence in hiring decisions and that advocacy by Manafort could even hurt Calk‘s candidacy. At the same time, Cortes advised Calk that he was well-suited for the position of Secretary of the Army because of his professional background. Banks suggested that Calk complete a list of roles in which he would like to serve if he were unconstrained by concerns about whether he could get the job. Calk took Banks‘s advice and sent Manafort a list of potential roles, focusing on Secretary of the Army. Calk also reached out to other former army officials and associates asking for advice and assistance.
The Summerbreeze Loan closed on November 16, 2016.
C. The Union Street Loan
In November 2016, Manafort presented TFSB with a proposal for an additional $6.5 million loan to refinance and renovate a townhouse in Brooklyn (the “Union Street Loan“). Like the earlier loan proposals, the Union Street Loan was to be issued at TFSB‘s standard terms and rates. But TFSB‘s lending limit barred TFSB from extending the $6.5 million Union Street Loan while the $9.5 million Summerbreeze Loan was still on the books. To comply with its lending limit, TFSB sought to sell the Summerbreeze Loan to BofI.
Around the same time, Manafort was promoting Calk for positions in the Department of Defense. On November 25, 2016, nine days after TFSB closed the Summerbreeze Loan and while TFSB was still considering the Union Street Loan, Calk emailed Manafort an updated version of the document titled “Stephen M. Calk Perspective Rolls [sic] in the Trump Administration.docx,” with Secretary of the Army listed as the first choice for a position in the incoming Trump Administration. Supplemental App. 79-80. On November 30, 2016, Manafort recommended Calk for Secretary of the Army to Jared Kushner (“Kushner“), a member of the Trump Presidential Transition Team (the “PTT“), and Kushner forwarded Manafort‘s recommendation to other members of the PTT for consideration.
That same day, Manafort emailed Raico, copying Calk, asking about the status of the Union Street Loan. Manafort wrote: “The clock is ticking and we are getting pressure on a number of fronts. [Please] advise today.” Trial Tr. 528. At that point, a foreclosure proceeding on a Manafort property in Brooklyn, the proposed collateral for the Union Street Loan, had been initiated, and foreclosures were scheduled on several other Manafort properties. By then, Calk had also been informed of the impending foreclosures on Manafort‘s properties and of the risk those foreclosures posed to Manafort‘s credit.
In early December 2016, Calk emailed Manafort regarding a potential meeting with the President-Elect. Calk also asked if Manafort was “making any progress re
On December 7, 2016, Manafort again emailed Raico regarding the status of the Union Street Loan, copying Calk. The email‘s subject line read: “Nervousness is setting in.” Supplemental App. 83. In the email, Manafort wrote that “the properties go to auction on Dec[.] 21” and that he would appreciate an update on the Union Street Loan. Supplemental App. 83.
Calk then emailed Raico, without copying Manafort, regarding the status of TFSB‘s efforts to sell the Summerbreeze Loan to BofI, which would have allowed TFSB to extend the Union Street Loan without violating its legal lending limit. Raico responded that BofI was still refusing to assume the full value of the Summerbreeze Loan.
In the second half of December 2016, Manafort repeatedly reached out to Anthony Scaramucci (“Scaramucci“), a member of the PTT directly involved in vetting candidates for sub-Cabinet level positions, to advance Calk‘s appointment. On December 15, 2016, while the Union Street Loan was still pending, Manafort contacted Scaramucci and asked Scaramucci to interview Calk for Secretary of the Army. Scaramucci advised Manafort that another candidate was likely to be nominated for Secretary of the Army but agreed to arrange for Calk to be interviewed for Under Secretary of the Army.
BofI did not agree to buy the Summerbreeze Loan. At first, Calk was hesitant about TFSB directly issuing the Union Street Loan, informing Manafort‘s lawyer that TFSB was “in no way scheduling a closing until th[e] loan is fully structured, underwritten and approved” and that “[TFSB was] working very hard to help find solutions to help [Manafort] out in his hour of need.” Supplemental App. 85; Trial Tr. 493-94.
On the evening of December 21, 2016, Scaramucci texted Manafort about Calk, asking: “Would he take under. [sic] Secretary of the Army? Are we double sure[?]” Supplemental App. 95. Scaramucci then added: “If so I think we can get it done.” Supplemental App. 95. Within minutes of Scaramucci‘s texts, Manafort and Calk were on the phone. After an eleven-minute call with Calk, Manafort informed Scaramucci via text: “Yes he will def [sic] take it.” Supplemental App. 95.
The next day, Calk called Raico and directed him to prepare to extend the Union Street Loan to Manafort, regardless of whether BofI would buy the Summerbreeze Loan. Calk explained to Raico that TFSB would fund the $6.5 million loan by causing the Holding Company to acquire part of the loan exposure. By doing so, TFSB could issue the Union Street Loan without exceeding the limits on amounts lent to a single client. Calk stated that Manafort was “influential” with “other people and a few other situations at hand.” Supplemental App. 50. Calk personally sent Manafort a term sheet that he described as a representation of their discussion on the eleven-minute call, along with an offer to close the next week.
After Scaramucci‘s exchange with Manafort, Scaramucci and Calk spoke by phone. Calk sent Scaramucci information about the work he had done on the Trump Campaign, and later, his resume, biography, and a list of potential roles for him in the Trump Administration. Calk was eventually offered an interview at Trump Tower with the team conducting the initial vetting of candidates for potential roles in the administration. Scaramucci stated that it
The Union Street Loan closed around January 4, 2017. As Calk had proposed, to comply with TFSB‘s lending limits, the Holding Company purchased a portion of the loan exposure. The Holding Company had never before made such a purchase.
On January 9, 2017, Calk flew to New York for an interview at Trump Tower with the PTT for the position of Under Secretary of the Army. Calk spent approximately $1,800 on the trip. Calk spoke with Manafort multiple times in the days leading up to the interview. Calk was interviewed by the PTT at the team‘s Manhattan offices the next day. Calk referred to Manafort by name in a thank you email he sent to one of his interviewers.
The Union Street Loan was funded on January 17, 2017, a week after Calk‘s interview. The next day, the foreclosure proceeding on Manafort‘s Brooklyn property was dismissed, as Manafort used the funds from the Union Street Loan to terminate the foreclosure action.
Calk was not selected for a position in the Trump Administration.
II. The OCC Investigation and Manafort Conviction
On March 29, 2017, the Wall Street Journal published an article regarding the $16 million in loans extended by TFSB to Manafort. An officer with the Office of the Comptroller of the Currency (the “OCC“) read the article and began to question whether the loans may have violated TFSB‘s statutory lending limits. The OCC convened a same-day meeting in person at TFSB. Calk attended, introduced himself as a “senior economic advisor to the President,” and accused the OCC examiners of political bias. Trial Tr. 975-76. During the meeting, the OCC officers asked Calk if he was aware that Manafort‘s properties had been in foreclosure. Calk denied knowing about the foreclosures.
In October 2017, Manafort was charged with federal crimes. Manafort was convicted of making fraudulent representations in his loan applications to TFSB. See United States v. Manafort, Crim. Action No. 17-0201-01 (ABJ) (D.D.C. Sept. 14, 2018).
In July 2018, TFSB asked for a meeting with senior OCC officials. Calk began the meeting by stating that he had not sought a position in the Trump Administration.
III. The Grand Jury Investigation and Calk‘s Indictments
A. The Initial Indictment
In May 2019, Calk was indicted on charges of financial institution bribery in violation of
B. The Rigby Subpoena
In May 2020, ahead of the original September 2020 trial date, the Government identified Major General Randall Rigby (“Rigby“), a member of TFSB‘s board, as a potential trial witness and served him with a trial subpoena. Before the September
Calk‘s trial date was repeatedly postponed because of COVID-19. After each delay, a new trial date was set, and the Government again subpoenaed Rigby and sought a preliminary meeting. Rigby consistently declined to meet with the prosecutors. In January 2021, the court postponed the trial until June 2021. The Government reconvened the grand jury and, on February 12, 2021, served Rigby with a subpoena requiring him to appear before the grand jury in New York. Rigby then moved to quash the subpoena or to modify it so that he could testify remotely and avoid travel.
C. Calk‘s Objection
Because Rigby‘s motion disclosed that the Government had issued the grand jury subpoena after repeated attempts to secure a pre-trial meeting with Rigby, Calk raised to the district court the impropriety of using the grand jury to compel a meeting with a trial witness and requested an opportunity to be heard. After the Government consented to take Rigby‘s testimony remotely by videoconference, the district court determined that Rigby‘s motion to quash or modify the subpoena was moot. During the proceeding, the prosecution offered assurances that it would question Rigby only as part of its investigation into whether there was a conspiracy to commit financial institution bribery and that Calk would be able to seek a proper remedy before trial if the questioning was improper.
D. The Reopened Grand Jury and Rigby‘s Testimony
On March 4, 2021, Rigby testified before the grand jury from his home in Illinois. The Government‘s questioning of Rigby addressed, among other things, information Calk had or had not shared with Rigby and the TFSB Board about the Manafort loans and Calk‘s efforts to secure an appointment in the Trump Administration, Rigby‘s knowledge of
The grand jury investigation closed soon after Rigby finished his testimony. Shortly after Rigby was excused, the prosecution called an FBI agent, James Hilliard (“Hilliard“), to summarize the investigation. To guide his grand jury testimony, Hilliard put on a PowerPoint presentation. The presentation made no reference to any of Rigby‘s testimony.
E. The Superseding Indictment
On March 4, 2021, the Government filed a two-count Superseding Indictment. Count One charged Calk with financial institution bribery in violation of
IV. The Trial
The trial against Calk began on June 22, 2021, and ended on July 13, 2021. Calk moved to preclude the Government from calling Rigby as a trial witness and from presenting any other evidence or testimony derived from Rigby‘s grand jury testimony, arguing it had been obtained through the improper use of a grand jury subpoena for the dominant purpose of preparing for trial. The Government opposed the motion, contending that, because a superseding indictment was returned after the grand jury heard Rigby‘s testimony, the subpoena was proper. The Government submitted an affidavit explaining that it had sought Rigby‘s testimony in support of its investigation of the conspiracy charge. The district court concluded that the Government had used the grand jury subpoena principally to support the conspiracy charge and not for trial preparation. The district court, therefore, denied Calk‘s pretrial motion to preclude Rigby‘s testimony and other evidence the Government derived from his grand jury testimony.
V. Verdict and Post-Trial Motions
The jury returned a verdict of guilty on all counts. At the end of trial, Calk renewed his motion for judgment of acquittal under
Calk then filed this appeal.
STANDARD OF REVIEW
I.
We review questions of the sufficiency of the evidence, including embedded questions of statutory interpretation, de novo. See United States v. Jones, 965 F.3d 190, 193-94 (2d Cir. 2020). A jury verdict must be upheld if, “after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.” Jackson v. Virginia, 443 U.S. 307, 319 (1979). We review challenges to jury instructions de novo as well, “reversing only where, viewing the charge as a whole, there was a prejudicial error.” United States v. Aina-Marshall, 336 F.3d 167, 170 (2d Cir. 2003).
II.
Although a district court‘s determination that a subpoena “does not constitute an abuse of the grand jury process” is entitled to some deference, the question is one of the “application of a legal standard” and is therefore subject to “more scrutiny than would be appropriate under the ‘clearly erroneous’ standard.” In re Grand Jury Subpoena Duces Tecum Dated Jan. 2, 1985 (Simels), 767 F.2d 26, 29 (2d Cir. 1985).
DISCUSSION
Calk appeals from his convictions for financial institution bribery in violation of
An officer convicted under the financial institution bribery statute “shall be fined not more than $1,000,000 or three times the value of the thing given, offered, promised, solicited, demanded, accepted, or agreed to be accepted, whichever is greater, or imprisoned not more than 30 years, or both.” Id. Moreover, “if the value of the thing given, offered, promised, solicited, demanded, accepted, or agreed to be accepted does not exceed $1,000,” a convicted defendant, “shall be fined . . . or imprisoned not more than one year, or both.” Id.
As relevant to Calk‘s appeal, the parties agree that to secure Calk‘s felony conviction under
Calk further asserts that his conviction under
I. “Corrupt” Conduct
A. Statutory Interpretation
We first address Calk‘s challenge to the meaning of “corruptly” as used in
On appeal, Calk contends that to prove he acted “corruptly” under
1. “Corrupt” Conduct Requires Improper Purpose
The district court interpreted “corruptly” consistently with our prior holdings in cases involving
Calk contends that the district court erred in relying on anti-bribery statutes such as
In Calk‘s view,
While “the meaning of a word cannot be determined in isolation, but must be drawn from the context in which it is used,” Yates v. United States, 574 U.S. 528, 537 (2015) (citation omitted), we see no reason why analogous anti-bribery statutes — and
The elements of
There is nothing that we have found that suggests that “corruptly” as used in
2. “Corrupt” Conduct Need Not Entail a Breach of Duty
Calk nonetheless contends that he acted “corruptly” under
Calk next argues that the history and purpose of
In 1986, Congress amended a prior version of
Moreover, when interpreting other statutes proscribing bribery that, like
Calk, however, may be taken to argue that he acted “corruptly” only if his actions were against the financial interests of the bank. Because the Summerbreeze Loan and Union Street Loan ultimately turned TFSB a profit, Calk appears to contend, his actions facilitating the loan applications should not be regarded as “corrupt.” We are unpersuaded.
As we have previously observed, a correct outcome does not cleanse a corrupt decision-making process. For instance, “if a party to litigation were to pay a judge money in exchange for a favorable decision, that conduct would — and should — constitute bribery, even if a trier of fact might conclude ex post that the judgment was on the merits legally proper.” Alfisi, 308 F.3d at 151.
A bank officer likewise can act “corruptly” if unduly influenced by an improper purpose to carry out a financial transaction, even if the financial transaction ultimately led to a profitable outcome for the bank. Calk‘s suggestion that
4. “Corrupt” Conduct May Be Partially Motivated by a Proper or Neutral Purpose
Calk further contends that “the ‘corruptly’ requirement is not satisfied if a bank officer charged with bank bribery believed he was acting in the bank‘s best interests.” Appellant‘s Br. 41. Thus, Calk argues, if by facilitating Manafort‘s loans, Calk sought even minimally to financially benefit the bank, he cannot be found to have acted corruptly. Again, we are not persuaded.
In the context of public official bribery, we have stressed that a “valid purpose that partially motivates a transaction does not insulate participants in an unlawful transaction from criminal liability.” United States v. Biaggi, 909 F.2d 662, 683 (2d Cir. 1990). Similarly, in a case involving a prosecution of a county executive for bribery, we affirmed instructions that required the jury to determine whether “the defendant accepted or solicited [a] thing of value, at least in part, . . . intending to be influenced” in connection to official business. United States v. Coyne, 4 F.3d 100, 113 (2d Cir. 1993) (emphasis added). On appeal, Calk does not develop any valid argument that we should treat defendants differently for purposes of
* * *
For these reasons, we conclude that Calk‘s statutory interpretation challenges as to what constitutes “corrupt” conduct for purposes of
B. Sufficiency of the Evidence
Calk separately contends that the Government failed to produce sufficient evidence that would lead a reasonable jury to conclude that he, in fact, acted “corruptly.” We disagree.
As an account of the granting of Manafort‘s loans indicates, there is much evidence in the record that Calk‘s efforts to influence TFSB‘s review and eventual approval of Manafort‘s loan applications were motivated by Calk‘s desire to build a political relationship with Manafort and to secure his assistance in seeking an appointment in the Trump Administration. Furthermore, the evidence shows that Calk intermingled and connected TFSB‘s expedited review and approval of Manafort‘s loan applications to Manafort‘s assistance in Calk‘s pursuit of an appointment in the Trump Administration. The evidence presented at trial, including witness testimony, also showed that Calk was aware that Manafort had defaulted on prior loans and that some of his properties were in foreclosure while TFSB was reviewing Manafort‘s loan applications. And the evidence shows that Calk nonetheless pushed repeatedly for Manafort‘s loans to be approved by TFSB. Such evidence readily allowed a reasonable jury to infer that Calk “corruptly” solicited or accepted a “thing of value” — Manafort‘s assistance and support of Calk‘s political aspirations — in exchange for facilitating certain financial transactions with TFSB.
II. “Thing of Value” Worth Over $1,000
A. Statutory Interpretation
Calk next contends that his convictions must be reversed because a “thing of value” under
Indeed, “anything of value” as used “in bribery and related statutes has consistently been given a broad meaning.” United States v. Williams, 705 F.2d 603, 623 (2d Cir. 1983). The words “thing of value” are “found in so many criminal statutes throughout the United States that they have in a sense become words of art.” United States v. Girard, 601 F.2d 69, 71 (2d Cir. 1979). Specifically, “the phrase is generally construed to cover intangibles as well as tangibles” and has been held to include “amusement,” “[s]exual intercourse, or the promise of sexual intercourse,” a “promise to reinstate an employee,” “an agreement not to run in a primary election,” and the “testimony of a witness.” Id.
“[A]nything of value,” as used in
B. Sufficiency of the Evidence — “Thing of Value”
Calk further argues that the Government failed to introduce sufficient evidence that would allow a jury to infer that Calk believed he was facilitating approval of Manafort‘s loans in exchange for a “thing of value.” We disagree. The evidence in the record is sufficient to permit a reasonable jury to conclude both that Calk sought to facilitate Manafort‘s loans in exchange for Manafort‘s political assistance in Calk‘s pursuit of an appointment to the Trump Administration and that Manafort‘s assistance, including his endorsement, had subjective value to Calk.
The evidence suffices to show that Calk solicited and received Manafort‘s political assistance — a “thing of value” — in exchange for facilitating Manafort‘s loans from TFSB. Manafort told Calk that he was “involved directly” with the presidential transition, App. 495, and Calk was aware that Manafort was highly influential and well-connected with both the Trump Campaign and the PTT. When Calk and Manafort discussed Manafort‘s loan applications, they both repeatedly referenced Manafort‘s connections with the Trump Campaign and Trump Administration, and Calk repeatedly sought out Manafort‘s guidance and endorsement in his attempts to join the Trump Administration.5
And the record shows that Calk assigned a high, subjective value to Manafort‘s political assistance. In pursuit of an appointment in the Trump Administration, Calk sought the advice and support of several people he thought had any connection with the incoming administration. But Calk especially valued Manafort‘s assistance. For example, Calk repeatedly sent Manafort his resume and list of preferred roles in the Trump Administration so that Manafort or other members of the PTT would “have [him] successfully chosen by the President-Elect.” Supplemental App. 72. Trial witnesses, including TFSB employees, also remarked that Calk regarded Manafort‘s assistance as highly valuable.
Calk‘s perception that Manafort‘s support was valuable was not groundless. For example, Scaramucci testified that Manafort was influential within the Trump Campaign and the PTT and that individuals with Manafort‘s endorsement would likely be offered an interview with the PTT.
Thus, there is sufficient evidence in the record that could lead a reasonable jury to conclude that Calk viewed Manafort‘s assistance, including his endorsement for an
C. Jury Instructions
Calk next challenges the adequacy of the district court‘s instructions to the jury regarding how to establish whether the “thing of value” that was solicited or accepted was worth over $1,000. The district court instructed the jury that the Government was required to “prove beyond a reasonable doubt . . . that the thing of value accepted, or agreed to be accepted, or solicited, or demanded by [Calk] had a value greater than $1,000.” Supplemental App. 16. The district court additionally noted that the “government need not prove the exact value of the thing of value, as long as there is proof beyond a reasonable doubt that the value exceeded $1,000” and that “[t]he value of the thing of value may be measured by its value to the parties, the value of what it is exchanged for or its market value.” Supplemental App. 16. We see no error in the district court‘s instructions. To sustain a felony conviction under
The conduct of the parties, and in particular the value of what the bribe recipient is willing to trade or facilitate in exchange for the bribe, can assist a jury in determining whether the monetary value of a “thing of value” exceeds $1,000. As other circuit courts have observed, to “establish the value of the intangible thing of value,” a court may look to “the conduct of the bribed defendant and her briber.” United States v. Townsend, 630 F.3d 1003, 1012 (11th Cir. 2011). For example, the Fifth Circuit found that conjugal visits were a “thing of value” under
Calk next contends that the evidence was not sufficient to allow a reasonable jury to conclude that Manafort‘s assistance was worth more than $1,000 to Calk. To prove that Calk valued Manafort‘s assistance at more than $1,000, the Government at trial pointed to the fact that Calk was willing to spend $1,800 traveling to his interview with the PTT. At trial, the Government also pointed to the fact that Manafort received loans totaling $16 million in exchange for his political assistance as evidence that Calk valued Manafort‘s assistance at more than $1,000. Calk argues that neither of these is sufficient to uphold the jury‘s finding that he solicited or received a “thing of value” worth more than $1,000.
To begin, we consider the $1,800 spent by Calk to travel to his interview with the PTT. The Government contends on appeal that the $1,800 is indicative of how much Calk valued Manafort‘s assistance. Calk, correctly, objects to such a conclusion, because the $1,800 does not indicate how much Calk valued Manafort‘s assistance. Instead, the $1,800 most clearly reflects how much Calk valued the interview and his travel preferences, including his choice to stay at a luxury hotel.
But the record includes other evidence that could lead a reasonable jury to conclude that Calk valued Manafort‘s assistance at more than $1,000. Calk was willing to put millions of dollars of TFSB‘s resources on the line by approving Manafort‘s loans. As the primary shareholder of the Holding Company that controlled TFSB, by risking TFSB‘s resources, Calk was indirectly putting his own assets on the line. At the time TFSB was reviewing the Union Street Loan, Calk was aware that Manafort was facing an imminent foreclosure on his Brooklyn townhouse, which was valued at several million dollars. By facilitating and expediting review of the Union Street Loan, Calk offered Manafort a lifeline that the evidence suggests, under the circumstances, few, if any, other banks would have been willing to undertake. And, in assisting Manafort‘s loan applications, Calk also risked incurring significant regulatory investigations or fines.
All this, clearly evident in the record, is sufficient evidence for a reasonable jury to conclude that Calk valued Manafort‘s assistance at more than $1,000.8
III. Grand Jury Proceedings
Lastly, we consider Calk‘s challenge to the propriety of the Government‘s grand jury subpoena against Rigby and the district court‘s admission of testimony by Rigby. Calk contends that the Government improperly issued a grand jury subpoena against Rigby. The grand jury subpoena was, Calk argues, designed impermissibly to facilitate trial preparation, instead of supporting an investigation into a superseding indictment for conspiracy. Calk claims that the district court further erred when it allowed Rigby to testify during trial. While Calk raises, with particularity, serious reasons to question the validity of the grand jury subpoena, the district court properly determined that the Government provided a sufficient bona fide justification for the issuance of a grand jury subpoena. Calk, in answer, provides no reason to find that the Government‘s justification was pretextual or otherwise invalid.
Nevertheless, courts may not ignore possible abuse of the grand jury process, as “the grand jury is not meant to be the private tool of a prosecutor.” United States v. Fisher, 455 F.2d 1101, 1105 (2d Cir. 1972). Ensuring the regularity of the grand jury process is especially important because of the risks for abuse that inhere in proceedings over which trial and appellate courts rarely have insight. Relative to defendants, prosecutors already have significantly greater powers and leverage to gather evidence in preparation for trial. And, without effective safeguards, prosecutors could otherwise abuse the grand jury subpoena and skirt the limits imposed on discovery by the Federal Rules of Criminal Procedure.
It is “improper for the Government to use the grand jury for the sole or dominant purpose of preparing for trial under a pending indictment.” United States v. Leung, 40 F.3d 577, 581 (2d Cir. 1994). See also United States v. Punn, 737 F.3d 1, 6 (2d Cir. 2013). A variety of factors may be relevant in assessing whether trial preparation is the dominant purpose for issuing a grand jury subpoena. We have noted, for instance, that “[t]he timing of the subpoena casts significant light on its purposes.” Simels, 767 F.2d at 29.
To determine whether trial preparation is the “sole or dominant purpose” for a grand jury subpoena, we have said that a burden-shifting framework applies. The defendant has the initial burden of presenting “concrete allegations of Government misconduct.” Leung, 40 F.3d at 582. Once a defendant has put forward such allegations, the Government must “come forward with evidence of specific grand jury activity in connection with the . . . investigation,” id., and thereby show that the subpoena was not motivated by an improper purpose. The defendant then has the burden of showing that the government‘s explanation was a pretext for abusing the grand jury process by “utiliz[ing] a [g]rand [j]ury for the sole or dominating purpose of preparing for already pending indictment for trial.” Punn, 737 F.3d at 6 (quoting Simels, 767 F.2d at 29).
So, as an initial matter, to overcome the presumption of regularity that attaches to a grand jury proceeding, the defendant, who bears the burden of persuasion, “must present particularized proof of an improper purpose.” Id. (quoting Salameh, 152 F.3d at 109). Therefore, at the initial stage, the defendant must identify concrete reasons for a court to question the Government‘s purpose for issuing a grand jury subpoena. See Leung, 40 F.3d at 582.
Calk satisfied this initial step by showing that the timing of the grand jury subpoena of Rigby raised serious questions regarding its validity. The Government had identified Rigby as a potential trial witness months earlier and had tried, for several months, to speak with him informally as the fourth trial date approached. Rigby consistently declined to meet with
Rigby‘s testimony, moreover, did not substantially change the course of the investigation. The Government alleges that it re-opened the grand jury and subpoenaed Rigby to bring a conspiracy charge against Calk. But the Government had already drafted a superseding indictment charging Calk with conspiracy in addition to substantive bank bribery prior to the subpoena. The Government conceded that it had been ready to file the draft superseding indictment charging Calk with conspiracy long before Rigby‘s testimony. Indeed, the Government presented the grand jury with the superseding indictment, including a conspiracy charge, very shortly after Rigby concluded his testimony and without directly incorporating any of Rigby‘s testimony.
Under these circumstances, Calk presented valid reasons to question the propriety of the grand jury subpoena. A subpoena that is clearly not designed to elicit testimony that will inform an indictment or the decision not to indict or to supersede the indictment could well reflect an improper purpose like trial preparation. To be sure, such a showing does not exhaust a district court‘s inquiry; it does, however, shift the burden to the Government.
The Government principally contends that an affidavit stating that the grand jury subpoena was served for the purpose of continuing its investigation is sufficient to rebut Calk‘s claim. The U.S. Attorney‘s Office filed an affidavit stating that the Government subpoenaed Rigby before a grand jury for legitimate reasons. Although “[i]n nearly every case of alleged grand jury abuse, the government can and does argue that it is investigating other individuals or other crimes,” Punn, 737 F.3d at 13, we need not decide whether the Government‘s representations, even in a sworn affidavit, can alone provide sufficient evidence that a subpoena was used for a legitimate purpose.
This is because here, the Government presented, and the district court properly considered, several factors that tended to show that the subpoena was, in fact, proper because it was connected to an ongoing investigation.
First, the Government offered evidence that the prosecution had hesitated to include a conspiracy charge until shortly before the trial date. The otherwise seemingly suspicious timing of the Rigby subpoena, therefore, reflected instead the prosecution‘s ongoing doubts regarding the viability of the conspiracy claim. At oral argument, the Government stated that, as there was evidence Manafort was actively defrauding Calk and TFSB in his loan applications, the prosecution was unsure that it could establish that there was the “meeting of the minds” between Manafort and Calk that is required for a conspiracy. The Government further specified what additional evidence it needed for a conspiracy count, and that it had acquired such evidence during the late grand jury proceedings, and presumably in part from Rigby‘s testimony. Moreover, in its affidavit, the Government averred that, because the district court had pushed back the trial date several times over Calk‘s objections, and because the Government did not wish to create a litigation
Second, the Government provided evidence that the content of Rigby‘s testimony before the grand jury was directly linked to the ongoing investigation into the conspiracy charge, even if Rigby‘s testimony did not significantly change or inform the indictment. The district court examined the grand jury transcript and determined, in fact, that the questions Rigby was asked pertained to the Government‘s ongoing investigation into the conspiracy charge. And the Government provided a plausible explanation for why it believed Rigby could have information pertaining to the conspiracy charge. Lastly, the issuance of a superseding indictment charging Calk with conspiracy, at the conclusion of the grand jury proceedings, while neither necessary nor sufficient to rebut Calk‘s assertions of impropriety, lends further plausibility to the Government‘s claim that the grand jury proceedings and the Rigby subpoena were part of a proper ongoing investigation.
All these constitute bona fide justifications given by the Government for issuing the Rigby subpoena. Calk did not, however, offer any evidence that might suggest that the Government‘s valid interest in expanding its investigation into a potential conspiracy charge through the grand jury was mere pretext. We therefore reject Calk‘s claim that the district court erroneously failed to preclude Rigby‘s testimony.
CONCLUSION
We have considered all Calk‘s challenges to his convictions and find them to be without merit. Accordingly, we AFFIRM the judgment of conviction.