United States v. Urciuoli

United States Court of Appeals
For the First Circuit

No. 09-1504

UNITED STATES OF AMERICA,

Appellee,

v.

ROBERT A. URCIUOLI,

Defendant, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF RHODE ISLAND

[Hon. Mary M. Lisi, U.S. District Judge]

Before
Boudin, Circuit Judge,
Souter,* Associate Justice,
and Howard, Circuit Judge.

Martin G. Weinberg with whom Kimberly Homan was on brief for
appellant.
Donald C. Lockhart, Assistant United States Attorney, with
whom Luis M. Matos, Assistant United States Attorney, Dulce
Donovan, Assistant United States Attorney, and Peter F. Neronha,
United States Attorney, were on brief for appellee.

July 20, 2010

*
The Hon. David H. Souter, Associate Justice (Ret.) of the
Supreme Court of the United States, sitting by designation.
 BOUDIN, Circuit Judge. Robert Urciuoli, the former chief

executive officer of Roger Williams Medical Center ("RWMC") in

Providence, Rhode Island, seeks review of his conviction following

his second trial for multiple counts of honest services mail fraud

and conspiracy to commit such fraud.1 He was convicted of the same

offense in an earlier trial, but that conviction was vacated on

appeal. United States v. Urciuoli ("Urciuoli I"), 513 F.3d 290,

300 (1st Cir. 2008). Urciuoli I describes some background facts of

this case, as well as the governing statute and case law.

The gravamen of the charge against Urciuoli was his role

in a scheme to bribe--in the guise of an employment contract--John

Celona, then a Rhode Island state senator. Insofar as Urciuoli

challenges the sufficiency of the evidence, the facts are to be

taken in the light most favorable to the jury's verdict. United

States v. Arroyo, 546 F.3d 54, 55-56 (1st Cir. 2008). The

pertinent events and proceedings are as follows.

In the summer of 1997, Celona--after discussion with

Urciuoli (CEO of RWMC) and Frances Driscoll (Senior Vice President

of RWMC)--spoke and voted against overriding the Rhode Island

1
The mail fraud statute, 18 U.S.C. § 1341 (2006), makes it a
federal offense to use the mails in connection with a scheme to
defraud and, after the Supreme Court declined to apply the statute
in political corruption cases where no loss of money or property
was proved, Congress amended the statute to include a scheme "to
deprive another of the intangible right of honest services," id. §
1346. See United States v. Sawyer ("Sawyer I"), 85 F.3d 713, 723-
24 (1st Cir. 1996).

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governor's veto of a bill that (if passed) would make it hard for

a for-profit entity to acquire a non-profit hospital. Urciuoli and

Driscoll opposed the bill (and supported its veto) because it would

prevent their desired sale of RWMC to another entity. Celona

failed by two votes to sustain the veto, so the bill became law.

Immediately after this effort, Celona asked Urciuoli for

employment, explaining that he was going through financial

difficulties. In February 1998, Celona signed a contract

purportedly employing him to market an RWMC-owned nursing home

called Elmhurst Extended Care and an assisted living facility--the

Village at Elmhurst ("the Village")--owned partly by an RWMC

subsidiary and partly by a separate entity owned by a man named

Peter Sangermano.

Although Celona did some marketing for the Village, his

efforts were fairly modest and his compensation substantial. In

the case that followed, the government charged that Urciuoli was in

substance employing Celona to use his office on behalf of RWMC in

two different respects:

•to support or oppose bills in accordance with
RWMC's interest, including attempts to "kill"
certain bills, and otherwise to promote RWMC's
interests with respect to pending legislative
matters;

•to conduct meetings at Celona's government
office with Urciuoli and representatives of
two major insurance companies in order to
resolve longstanding disputes about
reimbursements owed to RWMC.

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 Urciuoli, Driscoll, Sangermano and RWMC were indicted in

the Rhode Island federal district court, and RWMC entered into a

plea bargain but the three individual defendants went to trial.

Although Sangermano was acquitted, Urciuoli and Driscoll were

convicted on various counts of honest services mail fraud or aiding

or abetting such fraud, 18 U.S.C. §§ 2, 1341, 1346, and--in

Urciuoli's case--also conspiracy to commit honest services mail

fraud, id. § 371.

Urciuoli and Driscoll appealed and we held that certain

of the conduct presented to the jury in the first trial--namely,

Urciuoli and Driscoll's role in Celona's lobbying of municipal

officials to increase the number of patients brought to Roger

Williams Hospital by ambulance--was not a crime under the honest

services statute. Urciuoli I, 513 F.3d at 295-96. Because the

jury instructions permitted conviction for such conduct and the

jury might have convicted on that basis, a new trial was ordered.

Id. at 297.

In the new trial, the government presented much of the

evidence offered in the first trial, but Celona did not testify and

this time the government limited its theory to quid pro quo

bribery, eschewing any suggestion that--absent bribery--an

undisclosed conflict of interest on Celona's part was sufficient,

and avoiding reliance on Celona's lobbying relating to the

ambulance service. The theory thus fits within the Supreme Court's

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recent interpretation of the honest services provision in Skilling

v. United States, No. 08-1394, 2010 WL 2518587 (U.S. June 24,

2010), a decision to which we will return in due course

In the second trial, although Driscoll was acquitted,

Urciuoli was convicted on the same counts as in the first trial:

thirty-five substantive counts of honest services mail fraud

(corresponding to each payment check mailed to Celona) and one

conspiracy count. The district court denied Urciuoli's motion for

judgment of acquittal and his motion for a new trial, and sentenced

him to 36 months' imprisonment.

Urciuoli now appeals from his conviction on three

grounds, and we begin with his claim that the evidence was

insufficient to prove the crimes charged. Urciuoli says that the

government failed to provide sufficient evidence to establish

either the essential actus reus--an exchange of salary payments for

Celona's legislative action or forbearance--or the required mens

rea--Urciuoli's intent that the salary payments serve as a corrupt

quid pro quo bribe.

The government's evidence permitted the jury to find that

Celona's work for the Village was modest given his ample salary

(roughly $260,000 total between February 1998 and January 2004);

that his limited work for the Village decreased over the years

while his contract was renewed and his weekly fee rose (on

Urciuoli's orders) from $700 to $892 to $1000; that he reported

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more often to Driscoll and Urciuoli than to Village management; and

that his salary was covered by RWMC and not the Village.

The jury could also find that Urciuoli hired Celona

shortly after Celona had exerted legislative efforts in RWMC's

favor; that others at RWMC and the Village thought Celona lacked

the skills for the purported marketing work; and that Urciuoli

renewed Celona's contract and increased his pay shortly after

Celona's effort to, in Urciuoli's words, "crank around"--that is,

to exert pressure on--one of the insurance companies with whom RWMC

was negotiating about reimbursement. Evidence further showed that

Urciuoli sought to hide the extent of RWMC's relationship with

Celona.2

From this and other evidence, a rational jury could find

that Urciuoli's purpose was for Celona to use his office on behalf

of RWMC and that Celona did so, that the compensation nominally for

marketing was in reality for Celona's misuse of his powers, and

that the result was a conspiracy to deprive Rhode Island citizens

of Celona's honest services as a Rhode Island senator. Because

various mailings occurred in implementing the scheme, those

mailings triggered the mail fraud statute, which expressly extends

2
Urciuoli denied to police, the press, and RWMC's board that
Celona had participated in certain of the insurance company
negotiations and had lobbied for RWMC. Urciuoli also arranged for
Celona's contract with the Village to state that the Village would
compensate Celona when the reality was that Sangermano had insisted
that RWMC reimburse the Village for that compensation and RWMC in
fact did so.

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to honest services fraud. See note 1, above. The inferred

conspiracy between Urciuoli and Celona was also adequately proved.

Urciuoli's counter-arguments are not persuasive. That

Celona performed some marketing services did not prevent the jury

from regarding the payments as primarily intended by Urciuoli to

secure Celona's legislative help. Nor does it matter whether

Celona expressly agreed to help RWMC on specific bills, for the

jury could infer an understanding that he provide RWMC general

support in exchange for money (even if occasionally opposing

RWMC).3 Urciuoli was free to make such arguments to the jury, but

the jury could fairly reject them.

At greater length, Urciuoli argues that the jury should

have been instructed on the Rhode Island state law "class

exception" and that Urciuoli should be granted a new trial for the

court's failure to so instruct. The class exception is a Rhode

Island statute declaring that a state legislator privately employed

does not have a conflict of interest with his legislative duties if

the benefit that accrues to his employer from his actions is no

more than that obtained by other employers in the same class. R.I.

Gen. Laws § 36-14-7(b) (2010).

3
See United States v. Kincaid-Chauncey, 556 F.3d 923, 943-47
(9th Cir.) (quid pro quo bribe need not be evidenced by any express
agreement or statements of intent), cert. denied, 130 S. Ct. 795
(2009); United States v. Kemp, 500 F.3d 257, 284-85 (3d Cir. 2007)
(same), cert. denied, 128 S. Ct. 1329 (2008).

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 Urciuoli argues, first, that concerns about federalism,

fair notice, and the First Amendment right to petition the

government require that state law be considered in determining the

content of a state legislator's duties for which the failure to

perform constitutes the deprivation of honest services under

section 1346. But as we explained in Urciuoli I, "[n]othing in

Rhode Island law purports to authorize or protect" quid pro quo

bribery. 513 F.3d at 299; see also R.I. Gen. Laws §§ 11-7-3 to -4

(criminally prohibiting bribery of a state official). The class

exception does not protect the conduct charged by the government.

The theory that non-disclosure of a conflict of interest

was enough, even without a bribe, was advanced by the government in

the first trial; but, stripping down its case, the government

excluded any such theory from its opening argument, the revised

indictment and its closing argument. And this time the jury

instructions made it clear beyond peradventure that

the Government must prove beyond a reasonable
doubt that Defendant Urciuoli intended the
payment to cause John Celona to alter his
official acts, to change an official position
that he would otherwise have taken or to take
official actions that he would not have taken
but for the payment

and that

[t]he Government has charged honest services
mail fraud based on a claim that John Celona
was paid to perform certain official acts.
Paying a legislator to perform political acts
is not the same as employing a legislator in a
job which creates a conflict of interest

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 between the legislator's political duties and
his employment.

Urciuoli claims that the class exception was still

relevant to his defense that he (Urciuoli) acted in good faith

because he knew of the class exception (through his attorney's

advice and through a Rhode Island Ethics Commission opinion that

his attorney procured shortly after Celona signed his employment

contract with the Village). But Urciuoli had full opportunity,

which he used, to offer evidence of the opinion, the class

exception and related testimony in support of his good faith claim.

The instruction Urciuoli sought stated in part that the

class exception provision "expressly permits a legislator to take

action on legislation that would affect a private entity for whom

the legislator works as long as the legislation would affect that

entity to no greater extent than any other similarly situated

entities." This could easily have misled the jury into thinking

the class exception could excuse bribery. It was also unnecessary

to a fair presentation of Urciuoli's good faith defense. United

States v. Prigmore, 243 F.3d 1, 17 (1st Cir. 2001).

Urciuoli also argues that four other requested

instructions on state law should have been given, but his opening

brief did not directly address these instructions, instead merely

citing them, so claims of error are seemingly forfeited. Sandstrom

v. Chemlawn Corp., 904 F.2d 83, 86 (1st Cir. 1990). In any event,

the same objection applies as to the class exception instruction

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already addressed: the instructions were not necessary to the

defense and were quite likely to mislead the jury.

Finally, Urciuoli argues that Celona's facilitation of

the insurance company meetings was not a misuse of his official

powers and so was a legally insufficient basis for conviction.

This very issue was addressed and decided adversely to Urciuoli in

Urciuoli I, 513 F.3d at 296-97. But because the precise facts

matter to the legal question and the evidence in the second trial

differed from the first (mainly because Celona did not again

testify), we revisit the issue briefly.

The second trial's evidence showed that Celona, at the

time of the meetings, had become the chair of a committee with

considerable power over health care legislation, and that both

insurers--Blue Cross and United Healthcare ("United")--were

regularly concerned with bills that were within the committee's

purview. Looming in the background were proposed legislative

changes on issues relevant to RWMC's disputes with the insurers:

prompt reimbursement, "utilization review," and the legal status of

"most favored nation" contract clauses.

The implicit threat of legislative action was brought to

bear by Celona, who personally arranged for four of the meetings

(three for Blue Cross and one for United) to be held in his State

House office with Celona present. Urciuoli's and Celona's

communications reveal that Urciuoli knew of and requested these

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meetings and Celona's exertion of pressure on the insurers, and

that Celona sought to advance RWMC's interests by his actions.

Evidence also reflects that, on a couple of occasions, Celona

resorted to direct pressure on the insurers as well.

So the jury could conclude, as we said before in Urciuoli

I, that Celona was "misusing his official power over legislation--

part of the honest services he owed to the citizens--to coerce Blue

Cross and United into settlements with RWMC." 513 F.3d at 297.

Legislators can and do convene meetings of constituents and seek to

settle quarrels among them; but taking a bribe for the use of one's

governmental power is a different matter and within the ambit of

honest services fraud. Other precedent and legislative history

support our interpretation of the statute.4

What distinguishes this aspect of the case from some

others is that the bribe was not for Celona to press or oppose

legislation directly through his votes; rather, the purchased use

of official power was the implied threat of such action--and also

the potential use of influence over legislation in committee--that

Celona conveyed largely by implication through the orchestrated

4
See United States v. Carbo, 572 F.3d 112, 115 (3d Cir. 2009)
("The most obvious form of honest services fraud is outright
bribery of a public official."); H.R. 3050, 100th Cong. (1st Sess.
1987) (earlier proposed bill to amend the mail fraud statute would
have redefined "defraud" to include defrauding of citizens "of
their right to have the public business conducted honestly . . .
free from bribery" (emphasis added)); see also Urciuoli I, 513 F.3d
at 297.

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meetings. But the distance between this and paying outright for

legislative votes is not great: both involve the misuse of office.

Urciuoli insists that the fair warning required by due

process principles, Bouie v. City of Columbia, 378 U.S. 347, 350

(1964), and rule of lenity, United States v. Lanier, 520 U.S. 259,

266-67 (1997), require that the concept of "honest services" be

read more narrowly. Urciuoli's argument, however, rests primarily

on generalities; nothing cited to us in the statute's language,

history or case law suggests that the only honest services expected

of a legislator are his or her casted votes. We made this clear in

Urciuoli I. 513 F.3d at 294, 296-98.

Through an evolution endorsed by Congress, the mail and

wire fraud statutes have assumed a role in policing corruption in

state government, and federal prosecutors have been willing to test

the limits. This court has sought to check perceived excesses in

this case, see Urciuoli I, 513 F.3d at 294-96, and in others.5 But

the evidence here allowed the jury to find that the employment

contract payments were a bribe by which Urciuoli sought the misuse

of Celona's office, and there was no legal error.

Well after the argument in this case and shortly before

this decision was ready to issue, the Supreme Court decided

5
E.g., United States v. Sawyer ("Sawyer II"), 239 F.3d 31, 50
(1st Cir. 2001) (Boudin, J., concurring); United States v.
Czubinski, 106 F.3d 1069, 1076-77, 1079 (1st Cir. 1997); Sawyer I,
85 F.3d at 722-34;

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Skilling. Urciuoli then sought leave to file a supplemental brief

which we granted and a 15 page brief has been filed arguing that

Skilling helps Urciuoli's position. The government has offered to

file its own brief, but this is unnecessary: Skilling is harmful to

Urciuoli's position in certain respects and his attempt to use it

in his favor, although imaginative, is hopeless.

Urciuoli's main use of Skilling is based on language in

the opinion that he reads to narrow the mail fraud statute in

honest services cases to cover only the party to a bribe who owes

a fiduciary duty to the public (or some other entity entitled to

honest services). Skilling, 2010 WL 2518587, at *27 (noting that

core honest service cases involve "offenders who, in violation of

a fiduciary duty, participated in bribery or kickback schemes"

(emphasis added)). Urciuoli owes no fiduciary duty to the public,

he argues, and so he cannot violate the mail fraud statute.

That Urciuoli did not make this argument in the district

court is not necessarily fatal in a "change of law case" but we

need not decide the procedural issue, for Urciuoli's reading of

Skilling is wrong. Sections 1341 and 1346 by their terms cover

anyone who engages in a "scheme" to deprive others of the

intangible right to honest services. The courts, as we will see,

have consistently construed "scheme" in this context to mean that

those who bribe public officials take part in a scheme to deprive

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the public of the honest services of those they attempt to

influence.

The sentence in Skilling relied upon by Urciuoli was

merely identifying bribe and kickback cases as core honest services

violations, distinguishing some less established scenarios to which

some lower courts had extended the concept; nothing in Skilling's

language or context suggests that the Court was distinguishing

between the fiduciary who received the bribe and the non-fiduciary

who gave it, a distinction that would conflict with the statute's

language embracing those who participate in "any scheme . . . to

defraud." 18 U.S.C. § 1341; see also 18 U.S.C. § 2 (2006) (one who

induces a federal crime is liable as a principal).

Indeed, of the nine circuit court cases that Skilling

cites as exemplars of "core" honest service fraud cases, two

involve convictions of individuals who bribed another to violate

his fiduciary duties. 2010 WL 2518587 at *27.6 So, too, many of

the twenty-eight cases cited by the government to the Court, e.g.,

United States v. Boffa, 688 F.2d 919 (3d Cir. 1982); United States

6
United States v. Mandel involved the convictions of both the
Governor of Maryland and the private individuals who bribed him.
591 F.2d 1347, 1359 & n.7 (4th Cir. 1979). Shushan v. United
States, one of the earliest honest services cases, held that "[a]
scheme to get a public contract on more favorable terms than would
likely be got otherwise by bribing a public official would . . . be
a scheme to defraud the public." 117 F.2d 110, 115 (5th Cir.
1941). Skilling also cited United States v. Proctor & Gamble Co.,
convicting a company that bribed employees of its competitor to
divulge trade secrets. 47 F. Supp. 676, 678 (D. Mass. 1942).

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v. Lovett, 811 F.2d 979 (7th Cir. 1987), but we need not further

gild the lily.

In the supplemental brief, Urciuoli invokes Skilling as

he argues again that the government presented insufficient evidence

to convict him of bribery. But the bribery theory is the only one

pursued in the second trial here, the instructions conformed to it,

and the evidence (as already noted) amply supported the jury's

verdict. Urciuoli also reads Skilling as making state law relevant

to defining honest services duties owed by a legislator but,

however this may be, we have already explained that bribing a

legislator is also unlawful under Rhode Island law.

Both claims--lack of evidence and reliance on state law--

reflect Urciuoli's claim that he was not paying Celona for official

services and that Celona's conflict of interest was not itself

unlawful under Rhode Island law. But, as we have already noted

above, the well organized instructions given by the district judge

required the jury to find that Urciuoli "intended the payment to

cause John Celona to alter his official acts, to change an official

position which he would otherwise have taken, or to take official

actions that he would not have taken but for the payments."

Other language in the instructions made clear that

employment of Celona for other purposes, even if a conflict of

interest was thereby created, was not the basis for the

government's charge and that "[i]n order to prove honest services

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mail fraud the government must establish that the payments to John

Celona were made with the specific purpose of influencing his

actions on official matters." In short, this case is the core

bribery offense preserved by Skilling.

Affirmed.

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