United States v. C. Nagin

Case: 14-30841 Document: 00513334312 Page: 1 Date Filed: 01/07/2016
REVISED January 7, 2016
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 14-30841 United States Court of Appeals
Fifth Circuit
FILED
UNITED STATES OF AMERICA, January 7, 2016
Lyle W. Cayce
Plaintiff – Appellee Clerk
v.
C. RAY NAGIN, also known as Mayor Nagin,
Defendant – Appellant
Appeal from the United States District Court
for the Eastern District of Louisiana
Before BENAVIDES, DENNIS, and COSTA, Circuit Judges.
JAMES L. DENNIS, Circuit Judge:
A federal jury convicted Defendant C. Ray Nagin of bribery, “honest-
services” wire fraud, conspiracy to commit bribery and honest-services wire
fraud, conspiracy to commit money laundering, and filing false tax returns.
The district court sentenced Nagin to ten years in prison, imposed forfeiture in
the form of a personal money judgment, and ordered Nagin to pay restitution
to the federal government for unpaid taxes. On appeal, Nagin challenges the
district court’s jury instruction as to honest-services wire fraud as contrary to
the Supreme Court’s holding in Skilling v. United States, 561 U.S. 358 (2010).
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Nagin also claims that the personal money judgment the court imposed as
forfeiture was not authorized by statute and therefore constituted an illegal
sentence. Alternatively, he claims that the district court erred in failing to
specify that he was to bear liability for a portion of the forfeiture jointly and
severally with Mark St. Pierre, one of his co-conspirators. 1 We affirm the
judgment in all respects while confirming the district court’s authority to
correct any clerical error therein.
I
Nagin served as Mayor of the City of New Orleans from May 2002 to May
2010. In 2013, a grand jury returned a 21-count indictment against Nagin,
charging him with one count of conspiracy to commit honest-services wire
fraud and bribery, six counts of bribery, nine counts of honest-services wire
fraud, one count of conspiracy to commit money laundering, and four counts of
filing false tax returns.
According to the indictment, during his tenure in office, Nagin solicited
and accepted payments from contractors and business entities that sought
business opportunities, favorable treatment, and contracts from the city.
Pertinent to the honest-services wire fraud charges, in one instance, the
indictment alleged that Nagin asked city contractor Frank Fradella to arrange
a post-mayoralty consulting contract for Nagin in return for his support for a
city lighting project contract that Fradella was pursuing. After Nagin left
office, he signed a consulting contract with an affiliate of Fradella and
1 Nagin also argues that the district court violated his Sixth Amendment right to a
jury trial by imposing forfeiture and restitution based on the court’s own factual findings, but
he concedes that this argument is foreclosed by United States v. Rosbottom, 763 F.3d 408,
420 (5th Cir. 2014), and he raises the issue only to preserve it for possible further review.
2
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subsequently received nine wire payments, totaling $112,500, pursuant to that
contract. 2
At the close of trial, the district court instructed the jury on, inter alia,
the elements of honest-services wire fraud, without objection from Nagin. The
jury subsequently returned guilty verdicts on all counts of the indictment,
except for one count of bribery. The district court sentenced Nagin to ten years
in prison, imposed forfeiture in the form of a personal money judgment in the
amount of $501,200.56, and ordered Nagin to pay $84,264 in restitution to the
federal government for unpaid taxes. Nagin appealed.
II
A
Nagin did not object at trial to the district court’s relevant jury
instructions. We review jury instructions that were not objected to at trial for
plain error. United States v. Boyd, 773 F.3d 637, 644 (5th Cir. 2014). To meet
the plain-error standard, Nagin must show that (1) there was error; (2) the
error was clear and obvious, not subject to reasonable dispute; (3) the error
affected his substantial rights; and (4) the error seriously affects the fairness,
integrity, or public reputation of judicial proceedings. Puckett v. United States,
556 U.S. 129, 135 (2009). If those four prongs are satisfied, this court has the
discretion to remedy the error. Id.
“The first step in plain-error review is to determine whether there was
error.” United States v. Rodriguez-Escareno, 700 F.3d 751, 753 (5th Cir. 2012).
In reviewing jury instructions, we consider “whether the instruction, taken as
a whole, is a correct statement of the law and whether it clearly instructs jurors
as to the principles of law applicable to the factual issues confronting them.”
2 These nine wire payments that Nagin received after leaving office formed the
predicate for the nine charges of honest-services wire fraud in his indictment.
3
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United States v. Ebron, 683 F.3d 105, 151-52 (5th Cir. 2012) (citations and
internal quotation marks omitted).
On appeal, Nagin challenges only the part of the district court’s
instruction that stated, “It is not a defense to claim that a public official would
have lawfully performed the official action in question even without having
accepted a thing of value.” Nagin argues that this part of the jury instructions
was plainly erroneous in light of the Supreme Court’s decision in Skilling v.
United States, 561 U.S. 358. (2010). According to Nagin, Skilling held that a
conviction for honest-services fraud requires proof that the official accepted a
thing of value with the specific intent to be influenced by it in his official
actions, and the district court’s jury instructions negated this requirement.
Nagin misinterprets Skilling.
A conviction for honest-services wire fraud requires proof that the
defendant used wire communications in interstate commerce to carry out a
“scheme or artifice to defraud,” 18 U.S.C. § 1343, by depriving another of “the
intangible right of honest services,” id. § 1346. In Skilling, the Supreme Court
construed § 1346 narrowly and held that honest-services fraud encompasses
only bribery and kickback schemes. 561 U.S. at 408-09. To define the scope of
the honest-services statute’s proscription of bribes and kickbacks, the Skilling
Court directed courts to look to, inter alia, federal statutes defining similar
crimes, such as 18 U.S.C. § 201(b), the principal federal bribery statute. See
id. at 412-13 & n.45.
We follow the Supreme Court’s direction in Skilling and look to § 201(b)
to give substance to the prohibition on honest-services fraud. In United States
v. Valle, we held that an official may be convicted of bribery under § 201(b)(2)
“if he has corruptly entered into a quid pro quo, knowing that the purpose
behind the payment that he has . . . agreed to receive[ ] is to induce or influence
him in an official act, even if he has no intention of actually fulfilling his end
4
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of the bargain.” 538 F.3d 341, 347 (5th Cir. 2008). Accordingly, pursuant to
Valle, a conviction for bribery under § 201(b)(2) does not require proof that the
official intended to be influenced in his official actions. See id. Viewed through
Skilling’s lens, Valle instructs that honest-services fraud also does not require
such proof. See Skilling, 561 U.S. at 412; Valle, 538 F.3d at 347.
Nagin’s arguments that Skilling somehow overruled or superseded our
definition of bribery are unavailing. The Skilling Court did not undertake to
redefine the preexisting crimes of bribery or accepting kickbacks that must
underlie honest-services fraud; it merely held that to convict a person of
honest-services fraud the prosecution must prove a bribery or kickback scheme
as part of the crime. See 561 U.S. at 408-09. The district court’s jury
instruction was consistent with our circuit precedent as to the crime of bribery
under § 201(b)(2).
Nagin also contends that the district court’s instruction allowed the jury
to convict even in the absence of a quid pro quo exchange, contrary to Skilling.
This contention is meritless. The district court’s instructions as to honest-
services fraud, explaining the concept of public bribery, stated very clearly that
“bribery occurs when a public official accepts or offers to accept . . . anything of
. . . value . . . in return for being influenced in his performance of an official
act.” (Emphasis added). The instructions also explained, “[T]he public official
and the payor need not state the quid pro quo in express terms.” (Emphasis
added). The district court thus properly instructed the jury to convict only if it
found a corrupt quid pro quo exchange. 3 Accordingly, we find no error in the
district court’s jury instructions.
3 It is worth reemphasizing that this exchange need not involve the actual commission
of an official act by the bribed official; it is sufficient that the official promises to be influenced
by the bribe in his official actions, “even if he has no intention of actually fulfilling his end of
the bargain.” Valle, 538 F.3d at 347.
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B
As part of Nagin’s sentence, the district court rendered a personal money
judgment ordering Nagin to forfeit to the United States an amount of
$501,200.56. 4 Nagin contends that this personal money judgment, rather than
forfeiture of specific property, was not authorized by statute. Although Nagin
did not raise this objection at sentencing, we review it de novo because he
claims that this element of his sentence is illegal. See United States v. Nolen,
472 F.3d 362, 382 & n.52 (5th Cir. 2006) (“[A]n illegal sentence always
constitutes plain error.” (citing United States v. Del Barrio, 427 F.3d 280, 282
& nn. 3-4 (5th Cir. 2005)).
In imposing the money judgment on Nagin, the district court invoked
18 U.S.C. § 981(a)(1)(C), which authorizes civil forfeiture of the proceeds of
certain offenses, and 28 U.S.C. § 2461(c), which permits the government to
seek criminal forfeiture whenever a civil or criminal forfeiture is authorized by
statute and the defendant is found guilty of the relevant offense. 18 U.S.C. §
981(a)(1)(C) provides for the forfeiture of “[a]ny property, real or personal,
which constitutes or is derived from proceeds traceable to” certain offenses.
Nagin contends that this statute does not authorize personal money judgments
because it does not expressly provide for this form of forfeiture. We have
already rejected a similar argument, however, in the context of an analogous
statute.
In United States v. Olguin, we held that 21 U.S.C § 853 authorizes
personal money judgments as forfeiture for violations within the scope of that
statute. 643 F.3d 384, 395 (5th Cir. 2011). The text of 21 U.S.C. § 853(a) is
4 A personal money judgment is an in personam judgment against the defendant
rather than an in rem judgment against specified property. See, e.g., United States v. Casey,
444 F.3d 1071, 1075-76 (9th Cir. 2006) (discussing in personam nature of money judgment
forfeitures).
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substantively identical to that of 18 U.S.C. § 981(a)(1)(C), and it similarly does
not expressly provide for personal money judgments. Compare 21 U.S.C.
§ 853(a) (“any property constituting or derived from any proceeds the person
obtained, directly or indirectly as a result of the violation” is subject to
forfeiture), with 18 U.S.C. § 981(a)(1)(C) (“any property, real or personal, which
constitutes or is derived from proceeds traceable to [certain violations]” is
subject to forfeiture). In United States v. Monsanto, the Supreme Court
rejected a defendant’s argument that 21 U.S.C. § 853 does not authorize the
forfeiture of funds used to pay attorney’s fees. 491 U.S. 600, 607 (1989). The
Court explained, “Congress could not have chosen . . . broader words to explain
what was to be forfeited.” Id. In Olguin, we stated regarding 21 U.S.C. § 853,
“The text of the [statute] is plain and unambiguous, and we handle it according
to its plain meaning.” 643 F.3d at 395-96. Citing Monsanto and pointing to
21 U.S.C. § 853’s broad definition of “property” as “real property . . . [and]
tangible and intangible personal property,” we explained we were “reluctant to
create an exception for [the defendant’s] personal money.” Olguin, 643 F.3d at
396. Thus, we concluded that 21 U.S.C. § 853 authorized personal money
judgments. Id. at 396-97.
Our reasoning and holding in Olguin are readily applicable to 18 U.S.C.
§ 981(a)(1)(C). The Supreme Court’s statement in Monsanto that “Congress
could not have chosen . . . broader words to explain what was to be forfeited,”
491 U.S. at 607, applies with equal force to 18 U.S.C. § 981’s broad language.
Under 18 U.S.C. § 981(a)(1)(C), “personal property” is subject to forfeiture.
Personal property means “[a]ny movable or intangible thing that is subject to
ownership and not classified as real property.” Property, BLACK’S LAW
DICTIONARY (10th ed. 2014). Similar to the text of 21 U.S.C. § 853(a), nothing
in 18 U.S.C. § 981(a)(1)(C)’s text excludes personal money judgments. See
Olguin, 643 F.3d at 395-97.
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Moreover, the exclusion of personal money judgments would undermine
the purpose of criminal forfeitures. In United States v. Hall, the First Circuit
explained:
There are two primary reasons for permitting money
judgments as part of criminal forfeiture orders. First,
criminal forfeiture is a sanction against the individual
defendant rather than a judgment against the
property itself. Because the sanction follows the
defendant as a part of the penalty, the government
need not prove that the defendant actually has the
forfeited proceeds in his possession at the time of
conviction. Second, permitting a money judgment, as
part of a forfeiture order, prevents a [defendant] from
ridding himself of his ill-gotten gains to avoid the
forfeiture sanction.
434 F.3d 42, 59 (1st Cir. 2006) (citations and internal quotation marks
omitted). Thus, although neither 18 U.S.C. § 981(a)(1)(C) nor 28 U.S.C.
§ 2461(c) expressly refers to personal money judgments, our sister circuits
have uniformly agreed that personal money judgments are a proper form of
criminal forfeiture under these statutes. See, e.g., United States v. Newman,
659 F.3d 1235, 1242-43 (9th Cir. 2011); United States v. Padron, 527 F.3d 1156,
1162 (11th Cir. 2008); United States v. Day, 524 F.3d 1361, 1377-78 (D.C. Cir.
2008).
The amount of a personal money judgment is measured by the proceeds
of the defendant’s illegal activity, rather than the amount of assets he retains
at the time of sentencing. E.g., Day, 524 F.3d at 1377-78. Following Olguin’s
analysis, we join our sister circuits in holding that the combined operation of
18 U.S.C. § 981(a)(1)(C) and 28 U.S.C. § 2461(c) authorizes personal money
judgments as a form of criminal forfeiture. 5
5There is no consensus among the circuits over whether the government must make
a showing that satisfies the requirements of 21 U.S.C. § 853(p)(1)’s substitute-asset
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C
As a general matter, co-conspirators subject to criminal forfeiture are
held jointly and severally liable for the full amount of the proceeds of the
conspiracy. See United States v. Edwards, 303 F.3d 606, 643 (5th Cir. 2002).
The district court correctly stated the law, but both Nagin and the Government
agree that due to a clerical error the district court’s judgment does not
specifically state that Nagin is to bear liability for an $8,133.85 portion of the
amount forfeited jointly and severally with Mark St. Pierre, one of his co-
conspirators. Any clerical error relating to the joint and several liability
designation of any portion of Nagin’s forfeiture is correctable under Federal
Rule of Criminal Procedure 36. See FED. R. CRIM. P. 36 (“After giving any
notice it considers appropriate, the court may at any time correct a clerical
error in a judgment.”); see also United States v. Quintero, 572 F.3d 351, 353
(7th Cir. 2009) (“[T]he failure to include forfeiture in a judgment, that everyone
intended to be included, constitutes a clerical error, correctable under Rule
36.”). The parties may therefore move the district court to correct the judgment
in this respect.
III
For these reasons, we AFFIRM the judgment in all respects without
affecting the district court’s authority to correct any clerical errors therein.
provisions as a precondition to imposing a personal money judgment under 28 U.S.C.
§ 2461(c). Compare Newman, 659 F.3d at 1242-43 (Ninth Circuit holding no substitute-assets
showing required), with United States v. Abdelsalam, 311 F. App’x 832, 847 (6th Cir. 2009)
(holding “government must comply with the requirements of Section 853(p)(1)” to obtain a
personal money judgment). We need not decide this issue, however, because Nagin concedes
that the record evidence in his case would satisfy 21 U.S.C. § 853(p)(1)’s requirements.
9