Third Circuit Clarifies Hobbs Act and Indictment Pleading Requirements

August 6, 2013Articles White Collar Defense & Compliance Blog

In Part I of an analysis of the recent Third Circuit case of United States v. Munchak, 2013 WL 2382618 (3d Cir. May 31, 2013), we discussed the court’s treatment of the issue of restitution for tax offenses under Title 26 — none is available — as contrasted with offenses under Title 18. Here, we conclude with a consideration of Munchak‘s treatment of important pleading requirements.

As a reminder, defendants Munchak and Cordaro, commissioners in Lackawanna County, Pennsylvania, had appealed their convictions for various offenses, stemming from their demands for money from contractors seeking county business. On appeal, Munchak argued that the District Court’s jury instructions allowed the jury to improperly convict him of extortion pursuant to the Hobbs Act. Because Munchak did not object to the jury instructions below, the Third Circuit reviewed using a plain error standard. This standard placed the burden on Munchak to show that the error affected the outcome of the district court proceedings and, therefore, affected his substantial rights.

Under the Hobbs Act, a public official is guilty of extortion if he receives a payment in return for his agreement to perform specific official acts. To be guilty of a crime under the Hobbs Act, the specific official acts do not have to be completed; the Government simply needs to 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.

The District Court’s jury instructions stated: “Passive acceptance of a benefit by a public official is a sufficient basis for this type of extor[t]ion if the official knows that he is being offered the payment in exchange for his ability to do official acts.” On appeal, Munchak argued that the words “his ability to do official acts” allowed the jury to convict him for receiving payment because of his mere status as a public official rather than in exchange for official acts.

However, the Third Circuit stated, following its own precedents, that jury instructions must be read as a whole. Read in that fashion, the lower court’s instructions properly conveyed the quid pro quo necessary to violate the Hobbs Act. The Third Circuit further held that the District Court unequivocally stated that payment must be received in return for official acts, and, therefore, the District Court did not clearly err.

Also, defendant Cordaro argued on appeal that the Second Superseding Indictment, charging him with three conspiracy offenses, did not allege essential elements of the conspiracy offenses. However, Cordaro had not challenged the sufficiency of the Second Superseding Indictment before the District Court. Because the indictment was “tardily challenged”, the Third Circuit construed the factual allegations in the indictment liberally in favor of validity, stating that, under this standard, the indictment must be so defective that it does not, by any reasonable construction, charge an offense.

Under Third Circuit precedent, an indictment charging a conspiracy offense does not have to plead all of the elements of the underlying substantive offense. Rather, to be legally sufficient, a conspiracy count in an indictment need only set forth the agreement and the specific intent to commit an unlawful act, as well as, when required by statute, an overt act. The Third Circuit held that, in this case, all three conspiracy counts alleged the agreement, the intent to commit an unlawful act, and, when necessary, overt acts. Therefore, the Third Circuit held that the Second Superseding Indictment alleged the necessary elements of the conspiracy counts.

Thus, despite these and other arguments by the defendants on appeal, the Third Circuit affirmed Munchak’s and Cordaro’s convictions.