Case Style: USA v. Sheldon Silver
Case Number: 15-CR-93
Judge: Valerie E. Caproni
Court: UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
Plaintiff's Attorney: Joseph L. Forstadt
Defendant's Attorney: Barta, James
Description: On April 23, 2015, the Government filed a Superseding Indictment (“SI”) charging Silver
with two counts of honest services mail fraud, 18 U.S.C. §§ 1341, 1346; two counts of honest
services wire fraud, 18 U.S.C. §§ 1343, 1346; two counts of extortion under color of official
right, 18 U.S.C. § 1951; and money laundering, 18 U.S.C. § 1957. SI ¶¶ 33-45. The
Superseding Indictment alleges three schemes that are relevant to this Motion: the “asbestos
scheme,” the “real estate scheme,” and the “money laundering scheme.”
In the asbestos scheme, Silver (in his capacity as Speaker of the New York State
Assembly) allegedly disbursed state funds to a research center with which a physician who
specializes in the treatment of mesothelioma (“Doctor-1”) was affiliated. Id. ¶¶ 16-18, 23.2 In
exchange, Doctor-1 transmitted his patients’ information (with their consent) to Silver, who
passed the information along to Weitz & Luxenberg, P.C., a law firm with which Silver was
affiliated. Id. ¶¶ 8(b), 20-23. Many of Doctor-1’s patients retained Weitz & Luxenberg, and the
firm paid Silver more than $3 million in referral fees. Id. ¶ 24.
In the real estate scheme, Silver allegedly used his position as Speaker of the New York
State Assembly to steer two real estate developers (“the Developers”) towards a particular law
firm (the “Real Estate Law Firm”) in which Silver’s former counsel is a partner. Id. ¶¶ 10-13. In
exchange, Silver regularly met with lobbyists and representatives from the Developers and
“supported legislative proposals favorable to [the Developers].” Id. ¶ 13(d). The Developers
had not previously engaged the Real Estate Law Firm, but both engaged the firm for their tax
certiorari business at Silver’s urging. Id. ¶ 13(a).3 The Real Estate Law Firm, in turn, paid
Mesothelioma is a cancer caused almost exclusively by exposure to asbestos.
3 “Tax certiorari” is the term used for the process by which property owners contest the assessment of property values for real estate tax purposes. SI ¶ 11.
Silver approximately $700,000, representing a percentage of the fees it obtained from the
Developers. Id. ¶ 14.
Finally, in the money laundering scheme, the Superseding Indictment charges that Silver
used his relationship with an investor (“Investor-1”) “to distribute his crime proceeds across
numerous high-yield investment vehicles not available to the general public,” typically featuring
high returns with minimal risk. Id. ¶¶ 29-30. Beginning around 2006, Silver transferred
approximately $642,000 from his bank account into one such investment (“Investment Vehicle
1”); these funds had grown to over $1.4 million by January 2015. Id. ¶ 32. In 2011, when it
became apparent that a change in law would require Silver to disclose his assets to the public,
Silver allegedly transferred more than $340,000 in Investment Vehicle-1 from his name into the
name of a family member to avoid public disclosure of the full amount of his investment. Id.
A defendant seeking to challenge the sufficiency of an indictment on a motion to dismiss
faces a high hurdle. “Pursuant to Federal Rule of Criminal Procedure 7, ‘the indictment or
information must be a plain, concise, and definite written statement of the essential facts
constituting the offense charged.’” United States v. Vilar, 729 F.3d 62, 80 (2d Cir. 2013)
(quoting Fed. R. Crim. P. 7(c)(1) (alterations omitted)). “An indictment is sufficient if it ‘first,
contains the elements of the offense charged and fairly informs a defendant of the charge against
which he must defend, and, second, enables him to plead an acquittal or conviction in bar of
future prosecutions for the same offense.’” United States v. Stringer, 730 F.3d 120, 124 (2d Cir.
2013) (quoting Hamling v. United States, 418 U.S. 87, 117 (1974)); see also United States v.
Resendiz-Ponce, 549 U.S. 102, 108 (2007). “‘Unless the government has made what can fairly
be described as a full proffer of the evidence it intends to present at trial[,] the sufficiency of the
evidence is not appropriately addressed on a pretrial motion to dismiss an indictment.’” United
States v. Perez, 575 F.3d 164, 166-67 (2d Cir. 2009) (quoting United States v. Alfonso, 143 F.3d
772, 776-77 (2d Cir. 1998) (alteration omitted)).
I. The Superseding Indictment Alleges that Silver Committed Hobbs Act Extortion
With the weight of case law against him, Silver nevertheless argues that the facts alleged
in the Superseding Indictment do not constitute extortion under the Hobbs Act, 18 U.S.C.
§ 1951. The Hobbs Act defines extortion as “obtaining  property from another, with his
consent, induced by wrongful use of actual or threatened force, violence, or fear, or under color
of official right.” 18 U.S.C. § 1951(b)(2). This statute has been clarified by two recent Supreme
Court cases, Scheidler v. National Organization for Women, Inc., 537 U.S. 393 (2003), and
Sekhar v. United States, 570 U.S. ---, 133 S. Ct. 2720 (2013). Although these decisions inform
the Court’s analysis and will shape the jury instructions that are given at trial, they do not lead to
the conclusion that the Superseding Indictment is legally insufficient. Cf. Alfonso, 143 F.3d at
The petitioners in Scheidler were abortion protestors found liable for civil racketeering
based on jury findings that they had “use[d] or threaten[ed] to use force, violence, or fear to
cause respondents ‘to give up’ property rights, namely, ‘a woman’s right to seek medical
services from a clinic, the right of the doctors, nurses or other clinic staff to perform their jobs,
and the right of the clinics to provide medical services free from wrongful threats, violence,
coercion and fear.’” 537 U.S. at 400-01 (quoting jury instructions). The Court held that Hobbs
Act extortion, like the New York provision on which it was modeled, “retained the requirement
that property must be ‘obtained.’” Id. at 403. Accordingly, even though intangible property
rights could, consistent with Scheidler, be extorted, because the protesters never “obtained” the
intangible rights that the clients, doctors, and clinic staff lost, the protestors did not commit
Hobbs Act extortion.
The Supreme Court returned to the issue of the scope of conduct prohibited by the Hobbs
Act in Sekhar, 570 U.S. ---, 133 S. Ct. 2720. The defendant in Sekhar had threatened the
General Counsel of the New York State Comptroller’s Office that he would disclose
embarrassing facts about the General Counsel unless he recommended that the Comptroller
“approve” an investment by the New York Common Retirement Fund in the defendant’s
company. 570 U.S. at ---, 133 S. Ct. at 2723. If the General Counsel had made such a
recommendation, and if the Comptroller had followed the recommendation and approved the
investment, the Common Retirement Fund would have been permitted to invest (but would not
necessarily have invested) in the defendant’s company. Id. Analogizing to a Pulitzer Prize
Committee member’s ability to recommend a recipient of that Prize, the Court acknowledged
that the right to make such a recommendation “must be valuable. But the point relevant to the
present case is that it cannot be transferred, so it cannot be the object of extortion under the
statute.” Id. at 2726 n.5 (emphasis in original);4 see, e.g., United States v. Carlson, 787 F.3d
939, 944 (8th Cir. 2015) (identifying the concern in Sekhar as the fact that defendant “had not
actually sought to deprive and/or obtain transferable property”) (emphasis in original); Kerik v.
Tacopina, 64 F. Supp. 3d 542, 561 (S.D.N.Y. 2014) (holding, after Sekhar, that a perpetrator
could not “extort” the victims’ “intangible right to publish an article about him” because it was
not a “‘transferable’ item of value”).
4 Linguistically, a committee member might “give” his vote or recommendation to the person he views as the most worthy recipient, but this does not make the vote or recommendation transferrable (absent proxy voting). Insofar as the committee member has “surrendered” property (the intangible right to vote for his choice of recipient) by recommending an award recipient, the recipient has not “obtained” the property given up by the committee member, and there was therefore no “transfer” of property.
A. The Asbestos Scheme
Silver argues that the asbestos scheme is analogous to the charged conduct in Sekhar,
because what Silver obtained in exchange for his allegedly extortionate conduct was a mere
recommendation, conveyed by Doctor-1 to his patients. Silver claims that Doctor-1’s decision to
refer his patients to Weitz & Luxenberg was not transferable property; even if such a
recommendation could be “intangible property,” it was clearly not “transferred” to Silver or to
Weitz & Luxenberg.
Silver’s argument addresses only one of the three ways that the events at issue could be
described.5 If Silver’s conduct led only to Doctor-1’s recommending Weitz & Luxenberg to his
patients, such a scenario would not constitute extortion, as Doctor-1’s recommendation is not
“transferrable” as defined by Sekhar.6
If, however, Silver’s conduct caused Doctor-1 to provide Silver with confidential,
transferable information, that intangible property is transferrable and thus can form the basis of a
Hobbs Act extortion charge. See, e.g., United States v. Atcheson, 94 F.3d 1237, 1243 (9th Cir.
1996) (affirming a Hobbs Act conviction where the defendants, inter alia, “extorted from [the
5 There appear to be three ways to describe Doctor-1’s end of this alleged arrangement. The Superseding Indictment alleges that Doctor-1 provided patient information to Silver (referred to as “Leads” in the Superseding Indictment). Silver passed that information on to Weitz & Luxenberg, which, in turn, was retained by Doctor-1’s patients with some regularity. SI ¶¶ 8(b), 23. The original indictment, on the other hand, alleged that Doctor-1 “referred patients with mesothelioma to Silver at Weitz & Luxenberg.” Indictment ¶ 21. Finally, the Government argues that Silver could also be guilty of extortion if Doctor-1 caused his patients to give a portion of their legal claims – typically 33 percent – to Weitz & Luxenberg, based on Silver’s extortion of Doctor-1. See Gov’t Mem. at 20-22.
6 This is more or less how the scheme was alleged in the original indictment. While the quid – Silver’s use of his official position to bestow favors upon Doctor-1 and his mesothelioma center – remained unchanged when the indictment was superseded, the quo in the initial indictment (“Doctor-1, at Silver’s request, referred patients with mesothelioma to Silver at Weitz & Luxenberg,” Indictment ¶ 21) morphed in the Superseding Indictment into the allegation that Doctor-1 “sent [his patients’ information] to Weitz & Luxenberg by, among other things, providing the Mesothelioma Leads to Silver, who in turn provided [them] to attorneys at Weitz & Luxenberg,” SI ¶ 23, and that Doctor-1 caused his patients to provide “the valuable legal claims connected” to their medical issues to Weitz & Luxenberg, id. ¶ 8(b).
victims] information about how much money the[y] had in their accounts”). That is precisely
what is alleged in the Superseding Indictment – the Government charges that Doctor-1 sent “the
names and identifying information of unrepresented patients with mesothelioma (the
‘Mesothelioma Leads’),” SI ¶ 8(b),7 “to Weitz & Luxenberg by, among other things, providing
the Mesothelioma Leads to Silver, who in turn provided [them] to attorneys at Weitz [&]
Luxenberg to evaluate and pursue the patients’ legal claims,” id. ¶ 23.8
The Superseding Indictment also alleges facts consistent with a theory of third-party
extortion – to wit, that Doctor-1 caused his patients to provide a stake in their “valuable legal
claims” to Weitz & Luxenberg. Id. Silver argues that he “cannot have obtained the claims from
Doctor-1, as the claims belonged to Doctor-1’s patients, not Doctor-1.” Def. Mem. at 12
(emphasis omitted). But under a third-party extortion theory, the Government could prove that
7 The Superseding Indictment goes to some length to allege that “Leads” regarding patients with mesothelioma who are not represented are assets with value. Though not a model of clarity in terms of what the evidence will show, the Superseding Indictment appears to allege that Doctor-1 gave Silver the names of patients who had mesothelioma and who were not represented. SI ¶ 8(b). Presumably, as alleged in the original indictment, Doctor-1 also recommended that the patients contact Weitz & Luxenberg for representation. The fact that two things may have occurred, one that is actionable under the Hobbs Act as part of an extortion scheme and one that is not – i.e., the Doctor provided names and identifying information of unrepresented mesothelioma patients to Silver (a potentially actionable transfer of property) and recommended that the unrepresented patients contact Weitz & Luxenberg (not an actionable transfer of property per Sekhar) – does not exempt the scheme from the reach of the Hobbs Act.
8 Insofar as Doctor-1 may have retained the Mesothelioma Leads in some form after he transferred them to Silver, Silver would nevertheless have obtained the leads “from another, with his consent, . . . under color of official right,” as prohibited by the Hobbs Act. 18 U.S.C. § 1951(b)(2); see also 3 Leonard B. Sand et al., Modern Federal Jury Instructions: Criminal, Instr. 50-19 (describing the elements of Hobbs Act extortion under color of official right). Although the Sekhar court indicated, in dicta, that Hobbs Act extortion “requires that the victim ‘part with’ his property,” 570 U.S. at ---, 133 S. Ct. at 2725 (quoting R. Perkins & R. Boyce, Criminal Law 451 (3d ed. 1982)), the Court does not read that language to add an element to Hobbs Act extortion. Intangible property, such as information, can often be “retained” in some sense even after it has been passed on to another. Cf. Atcheson, 94 F.3d at 1243.
This Court reads the Supreme Court’s language in Sekhar merely to underscore the requirement that the victim must transfer the extorted property to the perpetrator. This interpretation is more consistent with Perkins & Boyce, on which the Court relied, which does not discuss any requirement that the victim “lose” property but instead distinguishes between cases in which the perpetrator “obtained” property with wrongfully-obtained consent (extortion) or without consent (robbery). Perkins & Boyce, Criminal Law 451 & n.69.
Silver obtained the patients’ claims from the patients by extorting Doctor-1.9 Although Silver
points out that Doctor-1’s patients were presumably unaware of Silver’s “color of official right”
or any other coercive behavior, id., “Section 1951(b)(2) speaks of obtaining property ‘from
another’; it does not say that the ‘another’ must be the threat’s recipient,” Re v. United States,
736 F.3d 1121, 1123 (7th Cir. 2013); see also United States v. Lin Guang, 511 F.3d 110, 114 (2d
Cir. 2007) (“tour guides who were coerced by force and threats of force to steer business to [a
defendant’s] shop” were among the “victims of the extortion scheme,” even though they did not
directly transfer anything to the perpetrators); United States v. McDonough, 727 F.3d 143, 148,
155 (1st Cir. 2013) (upholding a Hobbs Act extortion conviction where the defendant’s “victim”
caused his employer to pay the defendant’s law partner a salary for a sinecure); accord United
States v. Coppola, 671 F.3d 220, 240-41 (2d Cir. 2012) (clarifying that the Hobbs Act does not
require that the “consent” leading to an extortionate transfer come from the property’s lawful
Finally, Silver’s argument that the mesothelioma patients did not “transfer” their legal
claims to Weitz & Luxenberg lacks merit. Legal claims have value, and their value may be
assigned or split pursuant to a contingent-fee agreement. See, e.g., Sprint Commc’ns Co. v.
APCC Servs., Inc., 554 U.S. 269 (2008). After agreeing to transfer her claim, a patient would no
longer possess 100 percent of the claim that she previously possessed; such a transfer would be
9 This theory is not clearly stated in the Superseding Indictment. Silver concedes, however, that the “superseding indictment does not specify from whom Mr. Silver allegedly obtained the ‘valuable legal claims’ – Doctor-1 or his patients.” Def. Mem. at 12 (emphasis in original). The Court concurs with Silver that the Superseding Indictment is susceptible to both readings.
10 Nothing in Sekhar is inconsistent with the theory of third-party extortion articulated by the Second Circuit in Lin Guang, 511 F.3d 110. In fact, the Supreme Court specifically noted that “[i]t may well be proper under the Hobbs Act for the Government to charge a person who obtains money by threatening a third party.” Sekhar, 570 U.S. at ---, 133 S. Ct. at 2725 n.2. Although the Seventh Circuit has denied an actual innocence challenge to a conviction based on a third-party extortion theory post-Sekhar, Re, 736 F.3d at 1123, the Second Circuit has not yet had occasion to revisit this issue.
sufficient to trigger Hobbs Act liability. United States v. Nedza, 880 F.2d 896, 898, 903 (7th Cir.
1989) (extortionist gained an ownership interest in the victim’s business); United States v. Rudaj,
No. 04-CR-1110(DLC), 2006 WL 1876664, at *6 (S.D.N.Y. July 5, 2006) (defendants sought
“to extort an [unspecified] ownership interest in Misale’s Bar”), aff’d on other grounds sub nom.
United States v. Ivezaj, 568 F.3d 88 (2d Cir. 2009); United States v. Biaggi, 705 F. Supp. 790,
800 (S.D.N.Y. 1988) (congressman extorted stock and “a 5% commission on all contracts”
relevant to his dealing with his victim), aff’d in relevant part, 909 F.2d 662 (2d Cir. 1990).
Transfer of part ownership of a legal claim is no different. The fact that the patients could have
engaged other law firms on a contingent-fee basis, which would also have required them to
surrender part of their claims, is irrelevant to the analysis of whether Silver extorted the property.
United States v. Cain, 671 F.3d 271, 282 (2d Cir. 2012) (rejecting challenge to an extortion
conviction where defendant obtained competitors’ business opportunities because “the subject of
the extortion [was] valuable in the hands of the defendant”); see also United States v. Renzi, 769
F.3d 731, 743-44 (9th Cir. 2014) (rejecting the argument “that an equal value exchange cannot
constitute ‘something of value’ because there was no net loss to the victim”).
In short, whether the Government will be able to prove, beyond a reasonable doubt, that
Doctor-1 (1) recommended that his patients contact Weitz & Luxenberg, (2) provided Weitz &
Luxenberg with “leads” that permitted the firm to obtain business,11 or (3) caused his patients to
provide their legal claims to Weitz & Luxenberg, is a question for the jury. Silver argues,
persuasively, that if the Government proves only the first, he would not be guilty of Hobbs Act
11 For purposes of this motion, the Court accepts that the Government will be able to prove that Doctor-1 gave “Mesothelioma Leads” to Silver and that such “Leads,” divorced from the Doctor’s recommendation to the Patient, had value. If there is no provable value to the Leads, divorced from any recommendation from the doctor, or if the evidence proves only that Weitz & Luxenberg received business and paid referral fees because of Doctor-1’s recommendation to his patients, this theory of liability will founder at trial on the holding in Sekhar.
extortion under Sekhar. Silver’s “inferences as to the proof that would be introduced by the
government at trial” are insufficient to merit dismissal of the count at this early stage, Alfonso,
143 F.3d at 776; the Court will, however, be particularly mindful of these distinctions when
drafting the jury charge and when determining whether the Government’s evidence at trial is
sufficient to overcome the Defendant’s likely motion pursuant to Federal Rule of Criminal
B. The Real Estate Scheme
Silver’s sole argument with respect to the real estate scheme is that the Developers were
not “deprived” of their legal claims when they hired the Real Estate Law Firm. Def. Mem. at 13
14. Allegedly as a result of Silver’s extortionate conduct, the Developers retained the Real
Estate Law Firm to pursue their tax certiorari claims. The Real Estate Law Firm, in turn, paid
Silver. The Superseding Indictment alleges that the Developers would otherwise have given
their business to another law firm. SI ¶ 13(a); see also Gov’t Mem. at 23.12 Obtaining business
(even if, to be paid, the defendant had to perform additional work) meets the Hobbs Act’s
requirement that the defendant obtain transferable property with the victim’s consent. Cain, 671
F.3d at 282-83. Accordingly, Silver’s Motion to Dismiss the Hobbs Act extortion claims is
II. The Superseding Indictment Alleges that Silver Committed Honest Services Fraud
The Superseding Indictment charges Silver with two counts each of mail fraud and wire
fraud, in violation of 18 U.S.C. §§ 1341 and 1343, respectively, pursuant to the theory of honest
12 This scenario is not different in kind from hundreds of Hobbs Act extortion cases brought against members of the mob. From a Hobbs Act perspective, there is no difference between this scheme and the scheme in United States v. Gotti, where an entity was extorted to contract with a particular contractor, which would pay kickbacks to the perpetrators. 459 F.3d 296, 326 (2d Cir. 2006); United States v. Santoni, 585 F.2d 667, 672-73 (4th Cir. 1978).
services fraud codified in 18 U.S.C. § 1346. SI ¶¶ 33-39. Pursuant to Section 1346, the mail and
wire fraud statutes include, among schemes to defraud, “a scheme or artifice to deprive another
of the intangible right of honest services.” Congress enacted § 1346 to respond to McNally v.
United States, 483 U.S. 350 (1987), which restricted wire and mail frauds to theft of tangible
property. Although Section 1346 seemingly swept a broad range of conduct back within the
fraud statutes, the Supreme Court held “that § 1346 criminalizes only the bribe-and-kickback
core of the pre-McNally case law.” Skilling, 561 U.S. at 409. “[T]he Government must prove
that the defendant had ‘a specific intent to give [or receive] something of value in exchange for
an official act.’” United States v. Rosen, 716 F.3d 691, 700 (2d Cir. 2013) (quoting United
States v. Alfisi, 308 F.3d 144, 149 (2d Cir. 2002) (emphasis and alteration omitted)). The Second
Circuit has clarified that bribery or kickback schemes do not require that “the defendant . . .
himself or herself,” as opposed to “family, friends, or others loyal to the defendant,” be the
intended recipient of the defendant’s illicit gain. United States v. DeMizio, 741 F.3d 373, 382
(2d Cir. 2014).
Silver argues that the Superseding Indictment charges only an undisclosed conflict-of
interest scheme, not a bribe-or-kickback scheme. Def. Mem. at 14-18. Silver’s argument misses
the distinction between the two categories of cases. “In the self-dealing cases, the defendant
typically causes his or her employer to do business with a corporation or other enterprise in
which the defendant has a secret interest, undisclosed to the employer.” United States v. Rybicki,
354 F.3d 124, 140 (2d Cir. 2003) (en banc); see Skilling, 561 U.S. at 409-10. If the Superseding
Indictment charged only that Silver caused the State to retain Weitz & Luxenberg or the Real
Estate Law Firm where otherwise the State would have shopped around for a different law firm,
then Silver would be correct that the Superseding Indictment alleged a scheme that is not within
the scope of honest services fraud.
But that is not what the Superseding Indictment alleges – instead, it charges that “Silver
used the power and influence of his official position to obtain millions of dollars in bribes and
kickbacks.” SI ¶¶ 33 and 35; see id. ¶¶ 37 and 39 (same, but substituting “hundreds of thousands
of dollars” for “millions of dollars” in the context of the real estate scheme).13 In the context of
the asbestos scheme, Silver allegedly accepted a bribe in the form of information leading to
business for Weitz & Luxenberg, from which he, in turn, received a referral fee.14 In exchange,
Silver took “actions under the color of his official authority and in his official capacity as an
elected legislator and as Speaker of the Assembly as the opportunities arose,” including (but not
limited to) directing State grants to Doctor-1’s Center and to not-for-profit organizations
associated with Doctor-1’s family; sponsoring and passing an official resolution honoring
Doctor-1; and securing employment for Doctor-1’s family members. Id. ¶¶ 23(a)-(e). In the
context of the real estate scheme, the Superseding Indictment alleges that in exchange for the
Developers’ payments to the Real Estate Law Firm (a portion of which was kicked back to Silver
as a bribe), Silver used his official position “as the opportunities arose.” Id. ¶ 13. Silver
“supported legislative proposals favorable to [the Developers],” regularly met with and received
13 Put differently, the Government is not charging Silver based on his undisclosed relationships with the law firms; it is charging him with misusing his official position to bestow benefits on parties that paid for his favor. Silver’s relationship with Weitz & Luxenberg and the Real Estate Law Firm are relevant only to understanding how Doctor-1 and the Developers allegedly funneled bribes to Silver to “compensate” him for the misuse of his official position.
14 It should be noted that, in the context of the fraud charges, Doctor-1’s referral of the patients to Weitz & Luxenberg (as opposed to the more complicated theory underlying the extortion charge that “Leads” regarding the patients were given to Silver) would be a sufficient quid pro quo for an unlawful “deprivation of honest services” fraud scheme. See, e.g., Rosen, 716 F.3d at 700.
lobbyists from both companies, and favorably exercised his power over the State Public
Authority Control Board to benefit the Developers’ interests. Id. ¶¶ 13(b)-(f).
The fact that the payments Silver allegedly received as “bribes” or “kickbacks” were
funneled through entities in which he had an undisclosed interest does not transform the bribery
or kickback schemes into “undisclosed conflict-of-interest” schemes. Cf. DeMizio, 741 F.3d at
381-82. Accordingly, Silver’s Motion to Dismiss the fraud charges against him pursuant to
Skilling is denied.
III. The Wire and Mail Fraud Charges Will Not Be Dismissed, but the Government Is Ordered to Explain Why it Ought Not Be Required to Provide a Bill of Particulars
Silver alleges that the Superseding Indictment should be dismissed because it does not
identify with specificity the particular mail or wire transmissions that form the basis for the
charges pursuant to 18 U.S.C. §§ 1341 and 1343. Silver does not identify any authority in
support of the argument that dismissal is the appropriate relief for such a complaint. See, e.g.,
United States v. Walsh, 194 F.3d 37, 45 (2d Cir. 1999); United States v. Reale, No. 96-CR
1069(DAB), 1997 WL 580778, at *14 (S.D.N.Y. Sept. 17, 1997), aff’d sub nom. United States v.
Zichettello, 208 F.3d 72 (2d Cir. 2000); United States v. Abrams, 539 F. Supp. 378, 383
(S.D.N.Y. 1982); United States v. Rizzo, 373 F. Supp. 204, 207 (S.D.N.Y. 1973); United States v.
Cobb, 397 F.2d 416, 417 (7th Cir. 1968). The Superseding Indictment provides Silver with more
than enough information to know “‘the charge against which he must defend’” and would
“‘enable him to plead an acquittal or conviction in bar of future prosecutions for the same
offense.’” Alfonso, 143 F.3d at 776 (quoting Hamling, 418 U.S. at 117). Accordingly, Silver’s
Motion to Dismiss on this basis is denied.
Silver correctly notes, however, that the Superseding Indictment is devoid of any specific
information regarding the dates of the allegedly offending mailings and wire transmissions, and
it includes language permitting the Government to rely on any mailing or wire transmission in
furtherance of Silver’s wide-ranging crimes to satisfy that element of the charges. SI ¶¶ 15, 25.
Given the exceptional volume of mailings and wire transmissions in this case, the potentially
relevant communications could easily number in the hundreds or thousands. Under those
circumstances, it is not unreasonable for the Defendant to want to know which mailings and wire
transmissions the Government will rely upon to prove its case. Accordingly, no later than
August 14, 2015, the Government is ordered to provide Silver with a limited Bill of Particulars,
or to show cause why it should not be ordered to provide such a Bill of Particulars, “identifying
the specific mailings and wire transfers” on which it will rely to prove the charges contained in
Counts One through Four. Reale, 1997 WL 580778, at *14; see also United States v. Ajemian,
No. 11-CR-1091(VM), 2012 WL 6762011, at *2 (S.D.N.Y. Dec. 27, 2012); accord United States
v. Scully, --- F. Supp. 3d ---, ---, No. 14-CR-208(ADS), 2015 WL 3540466, at *67 (E.D.N.Y.
June 8, 2015); United States v. Rajaratnam, No. 09-CR-1184(RJH), 2010 WL 2788168, at *3-4
(S.D.N.Y. July 13, 2010), aff’d on other grounds, 719 F.3d 139 (2d Cir. 2013); United States v.
Bin Laden, 92 F. Supp. 2d 225, 235 (S.D.N.Y. 2000).
IV. The Money Laundering Charge against Silver Will Not Be Dismissed or Stricken
Silver also moves to dismiss Count Seven of the Superseding Indictment, which alleges
that he “did engage and attempt to engage in monetary transactions in criminally derived
property of a value greater than $10,000 that was derived from specified unlawful activity,” in
violation of 18 U.S.C. § 1957(a). Silver’s argument is predicated on his assertion that the federal
money-laundering statute is unconstitutionally vague.15
Pursuant to the void-for-vagueness doctrine, “the Government violates [the Fifth
Amendment] by taking away someone’s life, liberty, or property under a criminal law so vague
that it fails to give ordinary people fair notice of the conduct it punishes, or so standardless that it
invites arbitrary enforcement.” Johnson v. United States, 576 U.S. ---, 135 S. Ct. 2551, 2556
(2015); see also Skilling, 561 U.S. at 402; Rosen, 716 F.3d at 699. “[T]he more important aspect
of vagueness doctrine ‘is . . . the requirement that a legislature establish minimal guidelines to
govern law enforcement.’” Kolender v. Lawson, 461 U.S. 352, 358 (1983) (quoting Smith v.
Goguen, 415 U.S. 566, 574 (1974)). “[E]ven if there might be theoretical doubts regarding”
whether a statute’s contours could be clearly understood in every context, a “defendant’s
vagueness challenge fail[s] [if] his ‘case presented no such problem.’” Holder v. Humanitarian
Law Project, 561 U.S. 1, 23 (2010) (quoting Scales v. United States, 367 U.S. 203, 223 (2010)
Silver points to no cases holding Section 1957 (a statute that has been on the books for
almost three decades) to be unconstitutionally vague and does not disagree with the
Government’s assertion that “every court to have considered the issue, including the Second
Circuit in an unpublished decision and other Circuits in published decisions, ha[s] rejected
materially identical vagueness challenges to Section 1957.” Gov’t Mem. at 34 (citing United
States v. Blarek, 166 F.3d 1202 (2d Cir. Dec. 23, 1998) (table); United States v. Bazazpour, 690
F.3d 796 (6th Cir. 2012); and United States v. Baker, 19 F.3d 605 (11th Cir. 1994)); see also
United States v. Gabriele, 63 F.3d 61, 65 (1st Cir. 1995); United States v. Ferguson, 142 F.
15 Silver’s argument that Count Seven must be dismissed if the other six counts are dismissed is moot.
Supp. 2d 1350, 1355 (S.D. Fla. 2000); United States v. Krenning, No. 91-CR-514, 1992 WL
178675, at *1 (E.D. La. July 17, 1992). This Court agrees with that unbroken line of authority;
the statute is not unconstitutionally vague on its face. Moreover, Silver’s challenge is predicated
on the Department of Justice’s guidance to federal prosecutors regarding so-called “receipt and
deposit” transactions.16 That advice is not relevant to the charges in the Superseding Indictment,
which allege that Silver engaged in complex and secretive transactions to conceal his ownership
of proceeds of his criminal activities. A “challenger ‘who engages in some conduct that is
clearly proscribed by the challenged statute cannot complain of the vagueness of the law as
applied to the conduct of others.’” United States v. Amer, 110 F.3d 873, 878 (2d Cir. 1997)
(quoting Vill. of Hoffman Estates v. Flipside, Hoffman Estates, Inc., 455 U.S. 489, 495 (1982)
Finally, Silver asks the Court to strike several of the specific money laundering
allegations in the Superseding Indictment, pursuant to Federal Rule of Criminal Procedure 7(d).
Silver appears to be primarily concerned with the Superseding Indictment’s claim that he “did
not pay any fee or remuneration to Investor-1 for Investor-1’s provision of advice regarding and
access to the high-yield private investments although Silver took certain official actions as
requested by Investor-1” and the claim that Silver never told Investor-1 the source of the funds
that Silver invested in the vehicle. SI ¶ 31.
16 The United States Attorneys’ Manual defines “receipt and deposit” cases as “those kinds of cases where a person obtains proceeds from specified unlawful activity, which that person committed, and then deposits the proceeds into a bank account that is clearly identifiable as belonging to that person.” United States Attorneys’ Manual tit. 9, Criminal Resource Manual § 105.330, 1997 WL 1944828, at *2. The Manual alludes to the concern “that ‘receipt and deposit’ cases should not be sentenced as severely as money laundering cases involving more active forms of concealment or promotion because, arguably, the money laundering activity in ‘receipt and deposit’ cases creates little or no additional harm to society above that which was caused by the commission of the underlying offense.” Id. That is not a concern in this case.
“‘Motions to strike surplusage from an indictment will be granted only where the
challenged allegations are not relevant to the crime charged and are inflammatory and
prejudicial.’” United States v. Mulder, 273 F.3d 91, 99-100 (2d Cir. 2001) (quoting United
States v. Scarpa, 913 F.2d 993, 1013 (2d Cir. 1990)). Factual allegations that could either be
innocent conduct or evidence of the charged malfeasance need not be stricken. United States v.
Montour, 944 F.2d 1019, 1027 (2d Cir. 1991) (“While the jury may have been free to
characterize the events [innocently], it could also readily conclude that [Defendant’s] acts
showed the existence of a conspiracy among [Defendant] and others . . . . It was thus not error
for the trial court to refuse to strike [the contested language] from the indictment.”).
Evidence that Silver went to lengths to conceal his allegedly ill-gotten gains is evidence
both of Silver’s knowledge that the money that he received constituted “criminally derived
property” – a requirement of 18 U.S.C. § 1957 – and evidence of Silver’s consciousness of guilt
regarding his allegedly fraudulent and extortionate activities. Cf. Rosen, 716 F.3d at 703; United
States v. Izzi, 427 F.2d 293, 295 (2d Cir. 1970). Moreover, although the longtime Speaker of the
Assembly contends that language regarding his access to investment opportunities that were not
available to the public will make him less accessible to the “average juror,”17 the Government
intends to adduce evidence of the secretive nature of the investment vehicle and the specific
manner in which Silver invested. Such evidence would appear to be direct evidence of Count
Seven and would likely be admissible. The allegations in the Superseding Indictment do not
make Silver look like a boy scout, but the Government is entitled to charge that which it can
prove by admissible evidence. United States v. Hernandez, 85 F.3d 1023, 1030 (2d Cir. 1996);
17 The allegations regarding Investor-1 and Investment Vehicle-1 are, with all due respect to the Defendant, bland in their likely impact on an average New York juror as compared to the far more sensational allegations regarding Defendant’s benefiting to the tune of millions of dollars for misuse of his official position and misappropriation of taxpayer dollars.
Scarpa, 913 F.2d at 1013. Accordingly, Silver’s Motion to Strike allegations in the Superseding
Indictment is denied.
Outcome: For the foregoing reasons, the Defendant’s Motion is DENIED. No later than August 14, 2015, the Government is ORDERED to provide the Defendant with a limited Bill of Particulars or to show cause why it should not be ordered to provide Defendant with a Bill of Particulars detailing the specific mailings and wire transmissions on which it will rely to prove the mail and
wire fraud charges. The Clerk of Court is respectfully requested to terminate the open motion at docket number 39.