United States v. Sekhar, No. 11-4298 (2d Cir. 2012)
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Defendant threatened to reveal office gossip that the General Counsel of the New York State Comptroller's Office was having an affair unless the General Counsel recanted a recommendation to the State Comptroller to reject a proposal by defendant's company. He was convicted of attempted extortion of the office under the Hobbs Act, 18 U.S.C. 1951(a), and interstate transmission of extortionate threats in violation of 18 U.S.C. 875(d). The Second Circuit affirmed, rejecting his argument that his conduct did not come within the statutory definition of extortion because he did not "attempt to obtain property" from the General Counsel.
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11-4298 United States v. Sekhar 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT August Term, 2011 (Argued: April 16, 2012 Decided: June 26, 2012) Docket No. 11-4298 - - - - - - - - - - - - - - - - - - - -x UNITED STATES OF AMERICA, Appellee, - v.GIRIDHAR C. SEKHAR, Defendant-Appellant. - - - - - - - - - - - - - - - - - - - -x Before: JACOBS, Chief Judge, B.D. PARKER and HALL, Circuit Judges. Giridhar Sekhar appeals his conviction, following a 30 jury trial in the Northern District of New York (Thomas J. 31 McAvoy, Judge), for [i] attempted extortion of the General 32 Counsel of the New York State Comptroller s Office in 33 violation of the Hobbs Act, 18 U.S.C. § 1951(a), and [ii] 34 interstate transmission of extortionate threats in violation 35 of 18 U.S.C. § 875(d). 36 not come within the statutory definition of extortion Sekhar argues that his conduct did 1 because he did not attempt to obtain property from the 2 General Counsel. 3 Inc., 537 U.S. 393, 409 (2003) ( Scheidler II ) 4 (interpreting 18 U.S.C. § 1951(b)(2)). 5 [1] the General Counsel s right to make recommendations was 6 not a property right, and [2] he did not attempt to 7 appropriate or exercise that right. 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 See Scheidler v. Nat l Org. for Women, Sekhar argues that We affirm. PAUL A. CLYNE, Albany, N.Y., for Appellant. RAJIT S. DOSANJH, Assistant United States Attorney (Elizabeth C. Coombe, Assistant United States Attorney, on the brief), for Richard S. Hartunian, United States Attorney for the Northern District of New York, Syracuse, N.Y., for Appellee. DENNIS JACOBS, Chief Judge: Giridhar Sekhar was convicted following a jury trial in 23 the United States District Court for the Northern District 24 of New York (Thomas J. McAvoy, Judge) of [i] attempted 25 extortion of the General Counsel of the New York State 26 Comptroller s Office in violation of the Hobbs Act, 18 27 U.S.C. § 1951(a), and [ii] interstate transmission of 28 extortionate threats in violation of 18 U.S.C. § 875(d). 29 Sekhar had threatened to disclose gossip that the General 2 1 Counsel was conducting an office affair unless the General 2 Counsel recanted a recommendation to the State Comptroller 3 to reject a proposal by Sekhar s company. 4 contends that his conduct did not come within the statutory 5 definition of extortion because he did not attempt to 6 obtain property from the General Counsel. 7 II, 537 U.S. at 409 (interpreting 18 U.S.C. § 1951(b)(2)). 8 Sekhar argues that [1] the General Counsel s right to make 9 recommendations was not a property right, and [2] he did not 10 On appeal, Sekhar See Scheidler attempt to appropriate or exercise that right. We affirm. 11 12 13 BACKGROUND Investment Process. The Common Retirement Fund 14 ( Pension Fund or Fund ) is the employee pension fund for 15 the State of New York and various of its local governments. 16 The State Comptroller is the sole trustee and has final 17 approval over all Fund investments. 18 If the Comptroller approves an investment, he issues a 19 Commitment. Fund investments are sometimes contingent on a 20 company s attracting other investors, and a Commitment 21 assists that process by signaling the backing of the Pension 22 Fund. But a Commitment does not bind the Fund to invest; 3 1 for that, the parties must execute and close on a limited 2 partnership agreement. 3 Proposed Investment with FA Technology. In 2008, the 4 Comptroller issued a Commitment for a $35 million investment 5 in a fund managed by FA Technology Ventures ( FA 6 Technology ) known as FA Tech II. 7 closed. 8 considered another $35 million investment in two FA 9 Technology funds, known collectively as FA Tech III. The investment never In October 2009, the Comptroller s Office 10 Based on the proposed terms, FA Technology would earn nearly 11 $7.6 million in management fees over ten years, and could 12 earn more depending on how the investment performed. 13 In April 2009, the Comptroller s Office had prohibited 14 investments marketed by placement agents. 15 Technology did not use a placement agent for FA Tech III, it 16 had used one for FA Tech II, and the Comptroller s Office 17 questioned the FA Tech III investment on that ground because 18 the investment was essentially the same as FA Tech II. 19 Although FA While the General Counsel was considering the issue, he 20 was advised by the Office of the New York Attorney General 21 that it was investigating the placement agent involved in FA 22 Tech II and that the Pension Fund should avoid association 4 1 with that agent. 2 recommended that, [b]ased on information provided by the 3 Office of the Attorney General . . ., it would be prudent, 4 from a legal perspective, to avoid moving forward with the 5 FA Tech III investment and warned that the Pension Fund and 6 the Comptroller s Office could be in a vulnerable situation 7 if the investment were made and a report or other finding of 8 wrongdoing was subsequently issued by the [Office of the 9 Attorney General]. 10 11 The General Counsel s internal memo The Comptroller, so advised, decided on November 13 not to approve the investment. The First Deputy Comptroller conveyed the decision to 12 George Hulecki, a managing partner of FA Technology. 13 Hulecki had previously been informed of the General 14 Counsel s opposition to the investment and of rumors that he 15 was having an extramarital affair. 16 Sekhar s Conduct. On November 17, the General Counsel 17 received an anonymous e-mail to his work account requesting 18 a personal e-mail address to report a serious ethical 19 issue. 20 General, but also provided a personal address. 21 replied to the personal address accusing the General Counsel 22 of blackball[ing] a recommendation on a fund, and He advised the e-mailer to contact the Inspector 5 The e-mailer 1 threatening that if, by November 20, he did not tell the 2 Comptroller that he had a change of heart and recommend 3 moving forward with this fund, the e-mailer would disclose 4 that the General Counsel was having an office affair to the 5 General Counsel s wife, as well as to the Comptroller, the 6 Attorney General, the press, and others. 7 That night, another e-mail warned the General Counsel 8 that he had 36 hours left . . . [t]o make the wrong right. 9 The next day, a similar e-mail arrived, as well as an e-mail 10 attaching a draft letter to the Attorney General disclosing 11 the alleged affair. 12 On the advice of law enforcement, the General Counsel 13 asked the e-mailer for more time. 14 the e-mailer assured the General Counsel that he would 15 never hear about this again if he could get this fixed by 16 Wednesday. 17 General Counsel what he thought about Tiger Woods: 18 would have thought that a woman could get that upset . . . 19 and over what? (ellipses in original). 20 On Monday, November 23, On Tuesday, December 1, the e-mailer asked the [W]ho The FBI traced some of the e-mails to the Brookline, 21 Massachusetts home of Sekhar, a managing partner of FA 22 Technology, and executed a search warrant. 6 Sekhar admitted 1 to sending the e-mails, and forensics confirmed Sekhar s 2 computer as the source. 3 Procedural History. The indictment alleged that Sekhar 4 wrongfully attempted to obtain the General Counsel s 5 recommendation to approve the Commitment, the Comptroller s 6 approval of the Commitment, and the Commitment itself. 7 Sekhar was charged with one count of attempted extortion 8 under the Hobbs Act, 18 U.S.C. § 1951(a), and six counts of 9 interstate transmission of extortionate threats, id. 10 § 875(d). Sekhar moved pro se to dismiss the indictment on 11 the ground (inter alia) that it failed to state an offense, 12 see Fed. R. Crim. P. 12(b)(3)(B), because a recommendation 13 is not property, an approval is not property, and the 14 indictment did not allege that Sekhar threatened a person 15 with power to issue the Commitment. 16 the court ruled that the General Counsel s right to make 17 professional decisions without outside pressure is an 18 intangible property right and that the government need only 19 prove that Sekhar believed that the General Counsel s 20 recommendation was the determining factor in obtaining the 21 Commitment. 22 7 In denying the motion, 1 Sekhar, defending pro se, was convicted on the 2 extortion count and on five of the six counts of interstate 3 transmission of extortionate threats.1 4 jury indicated on a special verdict form that Sekhar 5 attempted to extort the General Counsel s recommendation to 6 approve the Commitment. For each count, the 7 Sekhar, with counsel, moved for a judgment of acquittal 8 or a new trial, based (inter alia) on the sufficiency of the 9 evidence. See Fed. R. Crim. P. 29(c), 33(a). The court 10 ruled that there was sufficient evidence that: Sekhar 11 attempted to exercise control over the General Counsel s 12 right to make recommendations; Sekhar believed that this 13 exercise would result in a Commitment; and a Commitment 14 would benefit Sekhar financially. 15 fifteen months incarceration on each count, to be served 16 concurrently. Sekhar was sentenced to 17 18 DISCUSSION 19 On appeal, Sekhar contends that the indictment failed 20 to state an offense and that the evidence was insufficient 21 to sustain the conviction. For both contentions, Sekhar s 1 Sekhar was acquitted on the count based on the December 1 Tiger Woods e-mail. 8 1 argument is the same: His conduct, as alleged in the 2 indictment and proven at trial, did not come within the 3 statutory definition of extortion because he did not 4 attempt to obtain property from the General Counsel. 5 Scheidler II, 537 U.S. at 409 (interpreting 18 U.S.C. 6 § 1951(b)(2)). 7 is de novo. 8 Cir. 2006) ( [W]e evaluate the legal issue[] of whether the 9 indictment properly charged Hobbs Act extortion . . . under See The standard of review for both contentions United States v. Gotti, 459 F.3d 296, 320 (2d 10 a de novo standard. ); United States v. Madori, 419 F.3d 11 159, 166 (2d Cir. 2005) ( We review de novo a challenge to 12 the sufficiency of evidence and affirm if the evidence, when 13 viewed in its totality and in the light most favorable to 14 the government, would permit any rational jury to find the 15 essential elements of the crime beyond a reasonable doubt. 16 (internal quotation marks omitted)). 17 analyze both contentions together.2 18 Accordingly, we The Hobbs Act subjects to criminal liability [w]hoever 2 The Court has sometimes reviewed arguments similar to Sekhar s as challenging the sufficiency of the evidence, see United States v. Cain, 671 F.3d 271, 277 (2d Cir.), cert. denied sub nom. Soha v. United States, 132 S. Ct. 1872 (2012), and sometimes as challenging the indictment, see United States v. Coppola, 671 F.3d 220, 233 (2d Cir.), reh g denied, No. 10-0065-cr (2d Cir. May 14, 2012); Gotti, 459 F.3d at 320. 9 1 in any way or degree obstructs, delays, or affects commerce 2 or the movement of any article or commodity in commerce, by 3 robbery or extortion or attempts or conspires so to do. 4 U.S.C. § 1951(a). 5 of property from another, with his consent, induced by 6 wrongful use of actual or threatened force, violence, or 7 fear, or under color of official right. 8 The parties agree that this definition also applies to § 9 875(d), which subjects to criminal liability [w]hoever, 18 The term extortion means the obtaining Id. § 1951(b)(2). 10 with intent to extort from any person, firm, association, or 11 corporation, any money or other thing of value, transmits in 12 interstate or foreign commerce any communication containing 13 any threat to injure the property or reputation of the 14 addressee. 15 70 (2d Cir. 1999) ( Given Congress s contemporaneous 16 consideration of the predecessors of § 875(d) and the Hobbs 17 Act, . . . we infer that Congress s concept of extortion was 18 the same with respect to both statutes. ). 19 See also United States v. Jackson, 180 F.3d 55, The element of obtaining . . . property entails a 20 two-part inquiry: whether the defendant is (1) alleged to 21 have carried out (or, in the case of attempted extortion, 22 attempted to carry out) the deprivation of a property right 10 1 from another, with (2) the intent to exercise, sell, 2 transfer, or take some other analogous action with respect 3 to that right. 4 II). Gotti, 459 F.3d at 324 (citing Scheidler 5 6 7 I The concept of property under the Hobbs Act . . . is 8 not limited to physical or tangible property or things, but 9 includes, in a broad sense, any valuable right considered as 10 a source or element of wealth . . . . 11 Tropiano, 418 F.2d 1069, 1075 (2d Cir. 1969) (citations 12 omitted); accord Gotti, 459 F.3d at 323. 13 United States v. The right to pursue a lawful business . . . has long 14 been recognized as a property right . . . . 15 F.2d at 1076. 16 business free from threats, United States v. Arena, 180 17 F.3d 380, 394 (2d Cir. 1999), abrogated in part on other 18 grounds by Scheidler II, 537 U.S. at 403 n.8, and to make 19 various business decisions . . . free from outside 20 pressure, Gotti, 459 F.3d at 327. 21 22 Tropiano, 418 There is a property right to conduct a The General Counsel s job was to provide legal advice to the Comptroller. A lawyer s stock in trade is the sale 11 1 of legal services. 2 Dupont Plaza Hotel Fire Litig.), 111 F.3d 220, 237 n.19 (1st 3 Cir. 1997) (internal quotation marks omitted). 4 is time and advice. 5 1002, 1023 (3d Cir. 1993) (internal quotation marks 6 omitted). 7 right in rendering sound legal advice to the Comptroller 8 and, specifically, to recommend--free from threats--whether 9 the Comptroller should issue a Commitment for FA Tech III.3 10 Massaro v. Chesley (In re San Juan What is sold United States v. Bertoli, 994 F.2d Accordingly, the General Counsel had a property Sekhar argues that the General Counsel s recommendation 11 to approve the Commitment--which the jury found was the 12 object of the attempted extortion--was not a property right 13 enjoyed by the General Counsel because it was not, for the 14 General Counsel, a source or element of wealth. 15 Tropiano, 418 F.2d at 1075. 16 government had to show that the General Counsel derived 17 wealth from his ability to make the recommendation or that 18 he would have suffered monetarily had Sekhar succeeded in 19 forcing him to change his recommendation. See According to Sekhar, the 3 The government has not argued, and we need not consider, whether the state and local employees whose money was invested in the Pension Fund had a property right to have the General Counsel make recommendations in the best interest of the Fund. 12 1 The value and worth of a lawyer s services may be said 2 generally to depend on freedom from conflict, including a 3 conflict created by personal blackmail. 4 General Counsel s ability to give legal advice free from 5 threats--and, specifically, to make a recommendation on FA 6 Tech III--can be seen as a source or element of wealth for 7 the General Counsel. 8 observed, a property right need not be a source of wealth to 9 the target of the extortion. Accordingly, the In any event, as the district court 10 In Gotti, the Court held that the defendants--members 11 and associates of the Gambino Crime Family--deprived union 12 members of their rights under the Labor-Management Reporting 13 and Disclosure Act of 1959 ( LMRDA ), 29 U.S.C. § 501(a), 14 to free speech[,] . . . democratic participation in union 15 affairs[, and] . . . loyal representation by their officers, 16 agents, and other representatives. 17 Coppola, 671 F.3d at 234-36; see also United States v. 18 Bellomo, 176 F.3d 580, 592-93 (2d Cir. 1999) ( The right of 19 the members of a union to democratic participation in a 20 union election is property . . . . ). 21 another count, the Court held that the defendants deprived 22 healthcare plan participants of their right to have the 13 459 F.3d at 325; accord In considering 1 plan s trustees and fiduciaries discharge their duties in 2 [the plan s] best interest. 3 Court did not analyze whether these rights were a source or 4 element of wealth for the targets of the extortion. 5 Instead, as discussed in Part II, the Court focused on the 6 value of the rights to the defendant extortionists.4 Gotti, 459 F.3d at 326. The 7 8 9 II [T]he extortion provision of the Hobbs Act . . . 10 require[s] not only the deprivation but also the acquisition 11 of property. 12 becomes whether the defendants . . . pursued [or] received 13 something of value from [victims] that they could exercise, Scheidler II, 537 U.S. at 404. 4 The question Sekhar cites Town of W. Hartford v. Operation Rescue, 915 F.2d 92, 102 (2d Cir. 1990), for the proposition that the term property cannot plausibly be construed to encompass altered official conduct. In West Hartford, the Court held that anti-abortion protesters did not engage in extortion by (inter alia) resisting arrest and refusing to identify themselves to police: While these actions caused the town to expend additional resources, [v]irtually any conduct that elicits a governmental response will require activity by one or more salaried governmental employees. Id. Mere governmental response to unlawful acts is not property within the meaning of the Hobbs Act. Arena, 180 F.3d at 393 (citing W. Hartford, 915 F.2d at 101-02). In West Harford, unlike the present case, the governmental response was an exercise of the police power, which did not entail a channeling of value or advantage to the benefit of a defendant. 14 1 transfer, or sell. Gotti, 459 F.3d at 323 (brackets in 2 original) (quoting Scheidler II, 537 U.S. at 405). 3 defendants in Scheidler II, anti-abortion protesters who 4 aimed to shut down clinics, may have deprived or sought to 5 deprive [the clinics] of their alleged property right of 6 exclusive control of their business assets, but there 7 was no basis upon which to find that [the protesters] 8 committed extortion under the Hobbs Act because the 9 protesters did not obtain or attempt to obtain property 10 from [the clinics]. 11 The 537 U.S. at 405, 409). 12 Id. at 322-23 (quoting Scheidler II, The protesters would have satisfied the Scheidler II 13 Court s definition of obtaining had they sought to take 14 further action after having deprived the clinics of their 15 right to conduct their business as they wished--by, for 16 example, forcing the clinic staff to provide different types 17 of services. 18 ordered to exercise his or her rights in accordance with the 19 extortionist s wishes, such that the extortionist is 20 essentially controlling the exercise of those rights. 21 at 324 n.9. Id. at 324. In such an event, the victim is 22 15 Id. 1 Accordingly, in Gotti, the Court held that the 2 defendants, by controlling the decisions of union officials, 3 caused the relinquishment of the union members LMRDA 4 rights . . . in order to exercise those rights for 5 themselves. 6 38. 7 defendants, by dictating the healthcare plan that union 8 trustees selected, deprived the union members of their 9 rights to have the trustees act as fiduciaries and Id. at 325; accord Coppola, 671 F.3d at 234- Addressing another count, the Gotti Court held that the 10 exercised the rights . . . in order to profit themselves. 11 459 F.3d at 326; see also Cain, 671 F.3d at 282 ( [W]hether 12 the property that is the subject of the extortion is 13 valuable in the hands of the defendant . . . will rarely be 14 a problem in cases . . . in which the defendant seeks to 15 exploit the very intangible right that he extracts from the 16 victim. ). 17 Here, as the district court concluded, Sekhar attempted 18 to deprive the General Counsel of his right to make a 19 recommendation consistent with his legal judgment and 20 attempted to exercise that right by forcing the General 21 Counsel to make a recommendation determined by Sekhar. 22 16 1 As Sekhar points out, a positive recommendation from 2 the General Counsel would not have guaranteed a Commitment, 3 and a Commitment would not have guaranteed an investment. 4 But [t]he concept of property . . . does not depend upon a 5 direct benefit being conferred on the person who obtains the 6 property. 7 F.2d at 1075-76). 8 profit by exercising the rights thus obtained; it is enough 9 that defendants exercise[] the rights in question in order 10 11 Gotti, 459 F.3d at 320 (quoting Tropiano, 418 An extortionist does not necessarily to profit themselves. Id. at 326 (emphasis added). The defendant in Cain, who used threats and violence to 12 drive his competitors from the market, argued that the 13 government introduced no evidence that through [his] 14 coercive conduct [he] obtained specific tree service jobs or 15 a quantifiable portion of the tree-service market. 16 F.3d at 279. 17 committed extortion because his purpose in using violence 18 against his victims was to acquire the market share held by 19 [his competitors] and to exploit it for his own enrichment. 20 Id. at 283. 21 Circuit s holding in United States v. McFall, 558 F.3d 951, 22 957 (9th Cir. 2009), that [i]t is not enough to gain some 671 The Court held that the defendant had The Court expressed disagreement with the Ninth 17 1 speculative benefit by hindering a competitor. 2 283 n.4. 3 671 F.3d at Here, the evidence showed that a positive 4 recommendation by the General Counsel would have increased 5 the chances the Comptroller would issue a Commitment; a 6 Commitment was necessary for FA Tech III to receive a 7 Pension Fund investment; and an investment would have 8 resulted in management fees for FA Technology and profit for 9 Sekhar, as a managing partner. And the evidence showed that 10 Sekhar understood that line of causation. Accordingly, 11 there was sufficient evidence to conclude that Sekhar, in 12 order to profit, attempted to exercise the General Counsel s 13 property right to make recommendations. 14 not required to prove that Sekhar would actually have been 15 enriched had he succeeded in exercising that right. 16 Opportunities have value. The government was 17 18 19 20 CONCLUSION For the foregoing reasons, we affirm the district court s judgment of conviction. 18
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