United States v. Renzi, No. 13-10597 (9th Cir. 2014)
Annotate this CaseDefendant, Former Arizona Congressman Richard Renzi, appealed his conviction and sentence for conspiracy, honest-services fraud, extortion, money laundering, making false statements to insurance regulators, and racketeering. Co-defendant, James Sandlin, also appealed his conviction and sentence. The court concluded that the evidence was sufficient to convict Renzi of extortion and honest-services fraud and rejected Renzi's claim that the parties engaged in an equal value exchange; neither the pattern jury instruction nor any controlling precedent requires the district court to identify the thing of value, especially where variance from the indictment is not at issue; and, in this case, there was no error in the uncontested jury instructions. The court held that, if a member of Congress offers evidence of his own legislative acts at trial, the government is entitled to introduce rebuttal evidence narrowly confined to the same legislative acts, and such rebuttal evidence does not constitute questioning the member of Congress in violation of the Speech and Debate Clause; because Renzi was not impermissibly questioned in violation of the Clause, there was no Clause violation; Renzi's right to present a defense cannot override the Speech and Debate privilege of another Congressman; and the court carefully reviewed the classified materials filed with this case and concluded that the district court did not abuse its discretion by excluding them, pursuant to the Classified Information Procedures Act (CIPA), 18 U.S.C. App.3, section 6(a). The court rejected Renzi's claim under Napue v. Illinois where there is no "reasonable likelihood" that the statements at issue affected the jury's judgment; the court rejected Renzi's contentions regarding his insurance-fraud conviction and his Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1961, conviction; the court upheld the district court's calculation under U.S.S.G. 2C1.1(b)(2) of the value of a payment Renzi received in exchange for influence exerted to the sale of property; and the court concluded that there was sufficient evidence to support Sandlin's convictions for conspiracy to engage in wire fraud, Hobbs Act extortion, and engaging in monetary transactions with criminally derived funds. Accordingly, the court affirmed the judgment of the district court.
Court Description: Criminal Law. The panel affirmed the convictions and sentences of former Congressman Richard Renzi and his friend and business partner James Sandlin in a case in which Renzi, who owned and operated an insurance agency, misappropriated clients’ insurance premiums to fund his congressional campaign, and lied to insurance regulators and clients to cover his tracks. The panel rejected Renzi’s contention that the government failed to prove that he or Sandlin solicited or received “something of value” in exchange for Renzi’s promise to support land exchange legislation, and that the evidence was therefore insufficient to sustain his extortion and honest-services fraud convictions. Observing that the Ninth Circuit’s pattern jury instruction for bribery merely recommends that the district court specifically describe the thing of value, the panel found no error in the uncontested jury instructions. The panel held that, if a member of Congress offers evidence of his own legislative acts at trial, the government is entitled to introduce rebuttal evidence narrowly confined to the same legislative acts, and such rebuttal evidence does not constitute questioning the member of Congress in violation of the Speech and Debate Clause. The panel held that Renzi’s introduction of testimony concerning Renzi’s support for certain legislation opened the door for the government to introduce rebuttal evidence on these narrow points, and that Renzi was not impermissibly questioned about his legislative acts in violation of the Clause. The panel held that the district court properly declined to balance another congressman’s Speech or Debate Clause privilege against Renzi’s right to present a defense. The panel held that the district court did not abuse its discretion in excluding classified information, where Renzi introduced ample similar evidence supporting his theory of the case, the district court handled the issue appropriately in conformance with the Classified Information Procedures Act, and there was no constitutional violation. The panel held that no violation of Napue v. Illinois occurred during the government’s direct examination of two witnesses, where the statements at issue were not material. Regarding Renzi’s insurance-fraud conviction, the panel rejected Renzi’s contentions (1) that the government failed to prove that Renzi & Company, an insurance agency specializing in obtaining insurance coverage for non-profit organizations and crisis pregnancy centers, was “engaged in the business of insurance” within the meaning of 18 U.S.C. § 1033(f); (2) that two letters sent to insurance regulators do not qualify as “financial” documents within the meaning of 18 U.S.C. § 1033(a)(1)(A); and (3) that the district court erred in instructing the jury on the definition of “financial reports or documents.” Regarding Renzi’s RICO conviction, the panel held that the government was not required to show that Renzi & Company “misappropriated” funds held “in trust” for another in order to prove mail or wire fraud, this additional language in the indictment was surplusage, and the district court did not constructively amend the indictment by omitting the “in trust” language from the jury instructions. The panel upheld the district court’s calculation under U.S.S.G. § 2C1.1(b)(2) of the value of a payment Renzi received in exchanged for influence exerted to the sale of property. The panel rejected Renzi and Sandlin’s contention that the district court erred by concluding that the value of the payment was $200,000 (the amount of a debt to Renzi that Sandlin paid off) rather than zero (the net value to Renzi). The panel concluded that there was sufficient evidence to support Sandlin’s convictions for conspiracy to engage in wire fraud, Hobbs Act extortion, and engaging in monetary transactions with criminally derived funds, where there was powerful proof of criminal intent, and the jury rejected Sandlin’s defense that money he received was the result of a legitimate, innocent property sale. Specially concurring, Judge Ikuta disagreed with the majority’s overbroad reading of § 1033, which could impose criminal liability not just on an insurer but also on any third party who interacts with insurers. She agreed with the result because Renzi & Company engaged in a range of activities as an insurance broker, some of which may be evidence that it acted as an agent of the insurer.
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