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Date: 10-19-2021
Case Style:
United States of America v. James Davis
Case Number: 19-1604
Judge: Patty Shwartz
Court: UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
Plaintiff's Attorney: United States Attorney’s Office
Defendant's Attorney:
Description:
Philadelphia, PA - Criminal defense lawyer represented defendant with a honest services wire fraud and conspiracy charges.
Davis owned Reach Communications Specialists, Inc. (“Reach”), an advertising
company, and RCS Searchers, Inc. (“RCS”), a title search and deed preparation business.
Since 1989, Reach published property foreclosure notices for the Philadelphia Sheriff’s
Office. RCS conducted title searches and prepared deeds for those properties. This
arrangement yielded Davis’s businesses millions of dollars.
To secure that business, Davis bribed John Green, the elected Sheriff of
Philadelphia, with a stream of benefits, which took the form of non-campaign and
campaign contributions. For example, Green told Davis he had found a house that he
wanted. Davis then bought and repaired that home, allowed Green to live there rent-free,
then sold it to Green at a loss of over $39,000. In addition, Davis gave Green $62,000 to
purchase his Florida retirement home. For the closing, Davis wired $258,151.32 directly
to the title company. Although Green repaid Davis for the wire transfer, as well as an
3
additional $2,100, Green still netted more than $70,000 in cash from Davis during their
relationship. Davis also provided Green and his family other benefits. For example,
Davis hired Green’s wife to work at one of his companies, paying her over $89,000
between 2004 and 2010.
Davis also provided Green campaign benefits. For instance, Green initially did
not want to seek re-election in 2007, but Davis and others persuaded him to run.
According to Janet Pina, Green’s former chief deputy, Davis encouraged Green to run
because Davis wanted to “maintain [his] contracts” with the Sheriff’s Office. J.A. 776.
Similarly, Barbara Deeley, Green’s chief deputy after Pina, testified that “Mr. Davis was
worried about his company, and, you know, a new sheriff coming in.” J.A. 1237. Harold
James, a close friend of Green, also testified that Davis wanted Green to run because “he
was doing work for him.” J.A. 2559.
Green told Davis and Deeley that they would have to do “all of the work” for the
campaign. J.A. 1239. When Deeley told Davis that she could not handle the work alone,
Davis told her not to worry about it and worked on “almost everything” with Deeley.
J.A. 1239-40. In fact, when Green needed more money and advertising to fend off a
well-funded primary opponent, Davis helped with both. To that end, Reach provided
over $148,000 in unreported campaign advertising services, without charge, and Davis
instructed Deeley to falsely report the services on the Campaign Finance Report (“CFR”)
as a $30,000 debt, as well as to record false expenditures on the CFRs, including more
than $12,000 in payments to Reach.
4
Davis also contributed cash. Throughout the campaign, Deeley kept Green
apprised of the finances, and when the campaign needed money, Green told Deeley to
“talk to Davis.” J.A. 1278. Davis “always came through.” App. 1272. When the 2007
campaign was running out of money, Deeley approached Davis for help, and he told her
not to worry and thereafter deposited $50,000 into the campaign’s account. This
contribution was above the campaign contribution limits, and Davis instructed Deeley not
to record the deposit on the CFR. When the campaign needed more than $12,000 to
attend a charity event and purchase a related advertisement, Green again told Deeley to
“go talk to Davis.” J.A. 1284-85. Davis again paid the amount but hid the contribution
by making the check payable to Deeley and falsely indicating that it was to pay her for a
summer home rental. Deeley in turn deposited the check and provided the funds to the
campaign from her account. Davis again instructed Deeley not to record the payment on
the CFR. Davis also used his daughter to funnel funds to the campaign. Specifically, he
directed his daughter to donate $2,500 to the campaign, the maximum allowable
contribution under the 2007 campaign finance limits, and then repaid her.
In exchange for these noncampaign and campaign benefits, Green funneled
lucrative Sheriff’s Office business to Davis’s companies. With Green’s approval, from
2002 to 2010, Reach received over $22 million for Sheriff’s Office advertising work and
RCS received over $12 million for performing real estate services for Sheriff’s Office
5
sales. This business constituted about ninety percent of Davis’s approximately $1.9
million in net income from 2004 to 2010.
1
Davis sought continued access to the Sheriff’s Office when Green considered
retiring. Among other things, Davis paid for Harold James and Jewell Williams, a
candidate to replace Green, to fly to Florida to meet with him and Green to discuss who
would replace Green when he retired. James believed that Davis facilitated the meeting
to safeguard his business with the Sheriff’s Office upon Green’s retirement.
Like Davis, Green tried to conceal their arrangement. Green knew that he was
supposed to provide written contracts for professional services to the City Law
Department for its review, but he only began to put contracts in writing in 2003, and did
so only after a City Controller’s audit report criticized his practice of using oral
agreements. Even after Green began using written contracts, the contracts with Davis’s
companies did not include all the services that Davis provided to the Sheriff’s Office.
Green further sought to conceal his relationship with Davis by failing to disclose the gifts
and loans from Davis on his City of Philadelphia Statement of Financial Interest forms.
Following trial, a jury found Davis guilty of conspiracy to commit honest services
wire fraud and to obtain property under color of official right in violation of 18 U.S.C.
1 Davis also influenced who else got Sheriff’s Office work. For instance, Andrew
Miller owned a company that issued title insurance policies and distributed funds from
tax lien and delinquent sales for the Sheriff’s Office. Miller sought to obtain the more
lucrative mortgage foreclosure work. To get that business, Miller met with Green and
Davis. Similarly, Jacqueline Roberts owned a title agency and met with Green and Davis
before securing some of her work with the Sheriff’s Office.
6
§ 371 honest services wire fraud in violation of 18 U.S.C. §§ 1343, 1346, 1349;two
counts of filing a false tax return in violation of 26 U.S.C. § 7206(1); and three counts of
willful failure to file a tax return in violation of 26 U.S.C. § 7203. Based on Davis’s
Criminal History Category I, and the approximately $1.7 million in benefits Davis
received from the Sheriff’s Office in return for the multiple bribes to Green, his total
offense level was thirty-four, resulting in a Sentencing Guidelines range of 151 to 188
months. The District Court varied downward and sentenced Davis to 121 months’
imprisonment, ordered him to make a $872,395.83 tax payment, and entered a
$1,718,540 million forfeiture judgment. Davis appeals.
II2
A3
The jury found that Davis committed honest services wire fraud and conspiracy to
do so by, among other things, using campaign contributions to bribe Green.4 Davis
contends that there was insufficient evidence upon which the jury could conclude that an
explicit quid pro quo existed. We disagree.
When reviewing a sufficiency of the evidence challenge, we must determine
“whether, after viewing the evidence in the light most favorable to the prosecution, any
2 The District Court had subject matter jurisdiction under 18 U.S.C. § 3231. We
have jurisdiction under 28 U.S.C. § 1291 and 18 U.S.C. § 3742(a). 3 We review sufficiency challenges de novo. See United States v. Bruce, 405 F.3d
145, 149 (3d Cir. 2005).
4 The jury also heard evidence about non-campaign payments, but Davis only
challenges the finding that the campaign contributions constituted illegal quid pro quos.
7
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) (emphasis omitted).
5
Here, the jury found that Davis bribed Green with, among other things, campaign
contributions. In a political system based upon private campaign contributions, care must
be taken to ensure that a donor is not prosecuted based on only “proof of a campaign
donation followed by an act favorable to the donor.” United States v. Siegelman, 640
F.3d 1159, 1170 (11th Cir. 2011). Rather, a campaign contribution becomes an illegal
bribe “only if the payments are made in return for an explicit promise or undertaking by
the official to perform or not to perform an official act.”6 McCormick v. United States,
500 U.S. 257, 273 (1991).
7
Davis asserts that the words “express” and “explicit” mean the same thing, but he
is incorrect. See, e.g., Siegelman, 640 F.3d at 1171 (rejecting argument that explicit in
McCormick means express); United States v. Blandford, 33 F.3d 685, 696 (6th Cir. 1994)
(observing “that by ‘explicit’ McCormick did not mean ‘express’”); United States v.
5 The Government argues that Davis tries to embed a waived challenge to the jury
instructions in his sufficiency argument. The District Court instructed the jury that if it
relied on campaign contributions to convict Green, “[t]he agreement must be explicit, but
there is no requirement that it be express.” App. 5903, 5915. Davis does not challenge
the accuracy of the instruction. Furthermore, our review of a sufficiency challenge is
based upon the elements of the offense, and not how those elements are described in the
instructions. See Musacchio v. United States, 136 S. Ct. 709, 715 (2016).
6 The parties do not dispute that Green awarding Davis Sheriff’s Office contracts
constitutes an official act.
7 No party disputes that McCormick’s reasoning extends to honest services wire
fraud, and we will assume that it does. See, e.g., United States v. Ring, 706 F.3d 460,
466 (D.C. Cir. 2013); Siegelman, 640 F.3d at 1170.
8
Carpenter, 961 F.2d 824, 827 (9th Cir. 1992) (holding that the “explicitness requirement”
of McCormick does not require an official to “specifically state[] that he will exchange
official action for a contribution”). “Express” refers to something that is “declared in
terms; set forth in words . . . and not left to inference.” Blandford, 33 F.3d at 696 n.13
(emphasis omitted) (quoting Express, Black’s Law Dictionary 580 (6th ed. 1990)).
“Explicit,” on the other hand, means “[n]ot obscure or ambiguous, having no disguised
meaning or reservation. Clear in understanding.” Id. (alteration in original) (emphasis
omitted) (quoting Explicit, Black’s Law Dictionary 579 (6th ed. 1990)). Thus, an explicit
arrangement need not be “memorialized in a writing” or spoken aloud. Siegelman, 640
F.3d at 1171. “To hold otherwise . . . would allow defendants to escape criminal liability
through ‘knowing winks and nods.’” Id. (quoting Evans v. United States, 504 U.S. 255,
274 (1992) (Kennedy, J., concurring)). Indeed, “a quid pro quo with the attendant
corrupt motive can be inferred from an ongoing course of conduct,” or “implied from [the
parties’] words and actions.” Evans, 504 U.S. at 274 (Kennedy, J., concurring) (italics
omitted). Thus, “direct and circumstantial evidence,” including the context of the
arrangement, may be used to prove that there was a “clear and unambiguous” promise of
official action in exchange for payment. Carpenter, 961 F.2d at 827; cf. United States v.
Allen, 10 F.3d 405, 411 (7th Cir. 1993) (“Vague expectations of some future benefit
should not be sufficient to make a payment a bribe.”). Therefore, whether based on direct
or circumstantial evidence, the “Government need only show that a public official has
obtained a payment to which he was not entitled, knowing that the payment was made in
return for official acts.” Evans, 504 U.S. at 268.
9
Here, there is sufficient evidence from which the jury could have concluded that
Davis and Green entered into a corrupt bargain. On one side of that bargain, Davis
provided Green with a “stream of benefits.” See United States v. Wright, 665 F.3d 560,
568 (3d Cir. 2012) (“[Bribery] does not require that each quid, or item of value, be linked
to a specific quo, or official act. Rather, a bribe may come in the form of a ‘stream of
benefits.’” (emphasis omitted) (quoting United States v. Bryant, 655 F.3d 232, 240-41
(3d Cir. 2011))). For instance, during the 2007 campaign, Davis contributed more than
$65,000 in cash and over $148,000 in free advertising services. These contributions
came within the context of a larger stream of benefits that Davis provided to Green,
including arranging to provide Green a renovated house at a loss, giving Green
significant funds for Green’s retirement home, and supplying cash. Davis provided these
benefits in return for an explicit benefit: to receive multi-million-dollar contracts from the
Sheriff’s Office. Green had the power to award Sheriff’s Office business and gave Davis
over $35 million of it between 2002 and 2010. Continuity of this business was critical to
Davis as a significant amount of his companies’ work came from the Sheriff’s Office,
and this flow of steady and lucrative work provided strong motivation for Davis to
encourage Green to continue to serve as Sheriff in 2007. Witnesses testified that this was
indeed the reason why Davis wanted Green to run and why he had a strong interest in
Green’s eventual successor.
The pair also sought to conceal the scope of their relationship, which provides a
basis to infer that they understood that they had made a corrupt bargain. Davis’s work
for the Sheriff’s Office was based on an oral agreement which was reduced to writing
10
only after an audit disclosed its existence. Even after the agreements were reduced to
writing, they failed to disclose the full scope of the work Davis’s companies performed
and the fees they received. Similarly, Green did not disclose on his City Financial
Interest forms the gifts, loans, and funds Davis provided. Furthermore, Davis ensured
that the CFRs failed to disclose or falsely reported the funds he provided to Green’s
campaign. These acts of concealment provided the jury with a basis to conclude that
Davis and Green fully understood that Davis would provide Green with benefits in the
form of campaign contributions and Davis would receive millions of dollars in Sherriff’s
Office work, and that neither wanted their arrangement to be known. See United States
v. Terry, 707 F.3d 607, 615 (6th Cir. 2013) (“[T]he government never presented a formal
agreement between Russo and Terry stating that Russo’s gifts would control Terry’s
actions. But . . . there was ample evidence for the jury to infer that an agreement
nonetheless existed between the two men.”). Because there was sufficient evidence upon
which the jury could find that an explicit quid pro quo existed, we will affirm its
conspiracy and honest services fraud verdicts.8
B9
8 Because the evidence supported the conspiracy and honest services wire fraud
convictions, there was no spillover from any allegedly invalid convictions that could have
tainted Davis’s convictions for tax fraud and failure to pay taxes, and thus we will affirm
those as well.
9 We review interpretation of the Sentencing Guidelines de novo and factual
findings for clear error. United States v. Grier, 475 F.3d 556, 570 (3d Cir. 2007) (en
banc).
11
Davis also challenges the calculation of his Sentencing Guidelines offense level.
When a defendant is convicted of a bribery-related offense, the offense level may be
increased based on “the value of the payment, the benefit received or to be received in
return for the payment, the value of anything obtained or to be obtained by a public
official or others acting with a public official, or the loss to the government from the
offense, whichever is greatest.” U.S.S.G. § 2C1.1(b)(2). The “‘benefit received’ under
§ 2C1.1(b)(2) is the net value, minus direct costs, accruing to the entity on whose behalf
the defendant paid the bribe.” United States v. Lianidis, 599 F.3d 273, 275 (3d Cir.
2010). Direct costs are those “that can be specifically identified as costs of performing a
contract.” Id. at 281 (quoting United States v. Landers, 68 F.3d 882, 884 n.2 (5th Cir.
1995)).
The Probation Office calculated Davis’s “total profit/net income” for the period of
2004 to 2010 based on his reported profit from Reach/RCS and his net income from
Reach as determined by the IRS, resulting in a figure of $1,909,489. It then considered
that ninety percent of that business came from contracts with the Sherriff’s Office and
found $1,718,540.10 as the value Davis received. That benefit resulted in a sixteen-level
increase in Davis’s offense level. See U.S.S.G. § 2B1.1(b)(1).
Davis argues the District Court erred in calculating his offense level under the
Sentencing Guidelines because it considered all the funds from his business with the
Sheriff’s Office from 2002 to 2010, rather than determining exactly how much of that
business was “in return for” his bribes. According to Davis, at least some of that business
resulted from his existing relationship with Green, not the bribes.
12
“[T]he threshold for establishing a causal connection” under § 2C1.1(b)(2) “is
low.” United States v. McNair, 605 F.3d 1152, 1230 (11th Cir. 2010) (collecting cases).
“To show that the bribes benefited the people paying them . . . it is enough for the
government to show that the bribes facilitated the . . . operations.” United States v.
Sapoznik, 161 F.3d 1117, 1119 (7th Cir. 1998).
The bribe scheme facilitated Davis’s businesses. Davis provided Green benefits
for years, and, during that time, Davis received millions of dollars of Sherriff’s Office
business. Even if Davis’s initial business with the Sheriff’s Office occurred before the
bribery scheme took root, the evidence revealed that Green thereafter received a stream
of benefits, Davis received more and more business, and the pair sought to conceal their
arrangement. When Davis grew concerned that this pipeline for work would dry up if
Green were no longer the Sherriff, he actively persuaded Green to run for reelection and
provided funds and services to ensure Green was reelected. When Green ultimately
decided to retire, Davis sought to play a role in identifying Green’s successor to ensure
that he continued to receive Sheriff’s Office business. Thus, the District Court correctly
determined that the benefits Davis received were in return for the benefits he gave to
Green.
The District Court also assigned a conservative net value to the benefits Davis
received. Davis’s companies earned $35 million from the work performed for the
Sheriff’s Office. To assign a value, the Court used the amount received during the year
in which Reach received the lowest percentage of its income from the Sheriff’s Office,
and considered that ninety percent of Davis’s business came from that Office. This
13
calculation was tethered to the record and hence was not clear error. See Sapoznik, 161
F.3d at 1118-19 (rejecting argument that “the government failed to show how much of
[the bribers’ gambling revenue] was actually due to [the defendant’s] bribe-induced
efforts to protect the illegal gambling” as “too speculative an inquiry to force on the
sentencing process”). Thus, Davis’s sentencing challenge lacks merit.
Outcome: For these reasons, we will affirm the judgment of conviction.
Plaintiff's Experts:
Defendant's Experts:
Comments: