Case 2:11-cr-00299-HH-FHS Document 127 Filed 08/10/12 Page 1 of 2 UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF LOUISIANA UNITED STATES OF AMERICA CRIMINAL ACTION VERSUS NO. 11-299 THOMAS G. WILKINSON SECTION HH (SHF) DEFENDANT WILKINSON S MOTION TO DISMISS COUNTS SEVEN THROUGH TWENTY-SEVEN, AND FOR PARTIAL DISMISSAL OF COUNT ONE OF THE SECOND SUPERSEDING INDICTMENT NOW INTO COURT, comes defendant, Thomas G. Wilkinson (Wilkinson), by and through counsel, and moves this Honorable Court to dismiss counts seven through twenty-seven and for partial dismissal of count one of the second superseding indictment (Rec. Doc. 117) for the reasons set forth in the accompanying memorandum in support of this motion. Respectfully submitted, /s/ Ralph S. Whalen, Jr. RALPH S. WHALEN, JR. (#8319) LAW OFFICES OF RALPH S. WHALEN, JR. 2950 Energy Centre 1100 Poydras Street New Orleans, Louisiana 70163 Tel.: (504) 525-1600; Fax: (504) 527-6156 Email: ralphswhalen@ralphswhalen.com 1
Case 2:11-cr-00299-HH-FHS Document 127 Filed 08/10/12 Page 2 of 2 RICHARD W. WESTLING (#20027) WALLER LANSDEN DORTCH & DAVIS, LLP 511 Union Street, Suite 2700 Nashville, Tennessee 37219 Tel.: (615) 850-8481; Fax: (615) 244-6804 Email: richard.westling@wallerlaw.com Attorneys for Thomas G. Wilkinson CERTIFICATE OF SERVICE I hereby certify that on August 10, 2012, a copy of the foregoing was served upon all counsel of record by electronic means through the Court s EM/ECF system. /s/ Richard W. Westling RICHARD W. WESTLING 9048341.1 2
Case 2:11-cr-00299-HH-FHS Document 127-1 Filed 08/10/12 Page 1 of 18 UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF LOUISIANA UNITED STATES OF AMERICA CRIMINAL ACTION VERSUS NO. 11-299 THOMAS G. WILKINSON SECTION HH (SHF) DEFENDANT WILKINSON S MEMORANDUM IN SUPPORT OF HIS MOTION TO DISMISS COUNTS SEVEN THROUGH TWENTY-SEVEN AND FOR PARTIAL DISMISSAL OF COUNT ONE OF THE SECOND SUPERSEDING INDICTMENT NOW INTO COURT, comes defendant, Thomas G. Wilkinson (Mr. Wilkinson), by and through counsel, and files this memorandum in support of his motion to dismiss counts seven through twenty-seven and for partial dismissal of count one of the second superseding indictment. (Rec. Doc. 117) In support of this motion, defendant states as follows. 1. Introduction The three indictments 1 that have been returned against Mr. Wilkinson involve fundamentally the same allegations. 2 They tell a typical story; one that plays out in governmental agencies and offices run by elected officials or political appointees regularly. The story is one in which a public 1 The original indictment (12/2/2011) (Rec. Doc. 1), the superseding indictment, (2/3/12)(Rec. Doc. 53), and the second superseding indictment (7/27/12)(Rec. Doc. 117). In this motion the term indictment refers to the second superseding indictment. 2 The second superseding indictment added a new bribery charge against Mr. Broussard and made that bribery an additional object of the conspiracy in which Mr. Wilkinson is also charged. Because the alleged bribery is new to the charges and because Mr. Wilkinson has not had sufficient time to analyze that charge or to review the discovery related to that charge, it will not be addressed in this motion. It may, however, be the subject of a separate filing in the future. 1
Case 2:11-cr-00299-HH-FHS Document 127-1 Filed 08/10/12 Page 2 of 18 employee is hired because of his or her connections to a powerful public official. The employee is hired to fill a discretionary post that does not require conformity with civil service requirements and, at times, strict compliance with job description specifics is overlooked based upon the discretion of the official. This patronage system, which allows successful political candidates, turned office holders, to hire trusted friends or loyal supporters, has been part of American political life for centuries. While this system is surely imperfect and may not be featured in the annals of good government practices, the protection of the citizenry from this type of conduct is the ballot box, not the federal prosecutor. If the public does not like the way an official handles his or her discretionary appointments, they can vote against him or her in the next election. Of course, if a state government or county or parish government wants to prevent hiring practices of this type, it can pass legislation or promulgate regulations against such practices. However, in the absence of state or local rules prohibiting this conduct, it is difficult to see how a federal prosecution avoids running afoul of serious federalism concerns. Despite this, the U.S. Attorney for the Eastern District of Louisiana has brought a grand jury indictment against former Jefferson Parish President Aaron Broussard and former Jefferson Parish Attorney Thomas Wilkinson based upon facts showing that the Parish President exercised his discretionary authority both to secure employment for Karen Parker and to grant an entirely permissible discretionary raise to Mr. Wilkinson. Whatever the U.S. Attorney s view of these 2
Case 2:11-cr-00299-HH-FHS Document 127-1 Filed 08/10/12 Page 3 of 18 actions may be, because the indictment does not allege cognizable federal offenses, it must be dismissed. 3 2. Factual Allegations The indictment alleges violations of the conspiracy, theft concerning programs receiving federal funds, and wire fraud statutes. 4 These alleged violations are based upon two separate sets of facts. First, the indictment alleges that Mr. Broussard, Mr. Wilkinson and Mr. Whitmer, the alleged conspirators, hired Karen Parker for the position of Paralegal Supervisor despite her lack of qualifications for the job. It further alleges that the conspirators arranged to transfer Ms. Parker from the Parish Attorney s Office to ID Management, but allowed her to retain the same position and salary even though she did not perform the essential functions of that position. Second, the indictment alleges that Mr. Wilkinson, a board member at a local private school, received a substantial discretionary pay raise based upon Mr. Broussard s belief that Mr. Wilkinson assisted Mr. Broussard s family member in securing admission to the private school. Notably, the indictment also alleges that these decisions regarding the employment of Ms. Parker and the raise for Mr. Wilkinson were discretionary. The indictment specifically alleges that Mr. Broussard was the chief administrative officer of the parish and was responsible for the 3 For purposes of this motion, only, Mr. Wilkinson treats the factual allegations of the indictment as true. He does so in order to adhere to the required standard applying to any motion to dismiss an indictment for failure to state an offense. See, e.g., United States v. Cadillac Overall Supply Co., 568 F.2d 1078, 1082 (5 th Cir 1978). In doing so, the defendant notes his position that many of the factual allegations in the indictment are either unsubstantiated or simply untrue. 4 As noted previously, the second superseding indictment also charges Mr. Broussard with bribery and adds bribery as an object of the conspiracy. 3
Case 2:11-cr-00299-HH-FHS Document 127-1 Filed 08/10/12 Page 4 of 18 administration and supervision of all parish departments, offices, agencies, and special districts. It further alleges that Mr. Broussard had the power to appoint and remove executive appointees responsible to him and [ ] had the authority to award discretionary salary increases to those employees. Indictment at 2. It also specifically alleges that Ms. Parker s position was unclassified and as a result the position did not require public advertisement or that applicants sit for the civil service examination. Indictment at 11. 3. Applicable Law and Argument a. Wire Fraud The wire fraud counts of the indictment allege that the conspirators devised a scheme and artifice to defraud the citizens of Jefferson Parish and to obtain money and property from Jefferson Parish. Indictment at 8. They further allege it was part of the scheme and artifice to defraud that Mr. Broussard and Mr. Wilkinson used their influence and positions in Parish government to make hiring decisions involving various friends, family members, and political allies and award pay increases that were contrary to the best interest of the citizens of Jefferson Parish. Indictment at 10. While it is unclear what, if any, federal criminal statute protects the best interest[s] of the citizens of Jefferson Parish; it is certainly not the wire fraud statute. The wire fraud statute, 18 U.S.C. 1343, criminalizes schemes to defraud victims of money or property where an interstate wire is used to carry out the scheme. While 18 U.S.C. 1346 also prohibits schemes under 1343 aimed depriving another of the intangible right of honest services, the Supreme Court recently limited the application of the 1346 definition of honest services to 4
Case 2:11-cr-00299-HH-FHS Document 127-1 Filed 08/10/12 Page 5 of 18 cases involving bribes or kickbacks. See Skilling v. United States, 130 S. Ct. 2896 (2010). As a result, in order to violate the wire fraud statute in this case, the alleged fraud must relate to a prohibited money or property scheme. The elements of a money or property wire fraud violation are set out in the Fifth Circuit Pattern Jury Instructions for wire fraud. In order to find someone guilty of wire fraud a jury must find the following essential elements: (1) that the defendant knowingly created a scheme to defraud; (2) that the defendant acted with an specific intent to defraud; (3) that the defendant used interstate wire communications facilities or caused another person to use interstate wire communications facilities for the purpose of carrying out the scheme; and (4) that the scheme to defraud employed false material representations. See Fifth Circuit 2001 Criminal Jury Instructions, Instruction No. 2.60 Wire Fraud (20001)(emphasis added); see also United States v. Ratcliff, 488 F.3d 639, 644 (5 th Cir. 2007). The necessity of a material false representation was underscored by the U.S. Supreme Court in Neder v. United States, 527 U.S. 1 (1999). The Neder Court held that materiality of falsehood is an element of the federal mail fraud, wire fraud, and bank fraud statutes. 527 U.S. at 25. In light of these standards, the wire fraud counts in the indictment must be dismissed because the government has failed to allege that the defendants made material false representations, in any respect, in order to obtain the money or property i.e., the salaries that were the object of the alleged fraud. 5 In fact, even accepting all of the allegations of the indictment as true, there is no 5 The indictment does make allegations relating to false documents submitted to (1) banks; (3) on certain government forms; and (3) to the Louisiana Ethics Board, by Mr. Broussard, not by Mr. Wilkinson. Notably, even assuming that 5
Case 2:11-cr-00299-HH-FHS Document 127-1 Filed 08/10/12 Page 6 of 18 allegation that substantiates the charge that AARON F. BROUSSARD personally enriched himself and financially benefited others by means of false pretenses, promises and representations thereby defrauding Jefferson Parish and its citizens of money or property. Indictment at 8 (emphasis added). The indictment lays out the alleged scheme in considerable detail (pages 8 13), but does not make a single allegation regarding any material false statement or false representation relating to the decision to employ Karen Parker, to give her pay increases, or to transfer her to ID Management. Similarly, there are no allegations that the raise given to Mr. Wilkinson, or the alleged reason it was given, involved a material false representation. Indeed, the only references to any false statements relate to documents allegedly provided by Mr. Broussard to other third parties, such as the Louisiana Board of Ethics, that related to Karen Parker s employment. Notably, while the indictment pleads that these alleged false statements were in furtherance of the scheme to defraud, it also expressly alleges that they were acts designed to conceal the scheme. 6 The indictment in this case makes boilerplate allegations of falsehoods, but does not allege any facts supporting that boilerplate. While the indictment includes pages of facts that the government alleges comprise the scheme to defraud, the government points to no material falsehoods that it intends to prove at trial. This failure results not from inartful pleading, but from the lack of any facts suggesting such falsehoods where employed in the alleged scheme. these are somehow false statements, they are not false representations or promises made in order to execute the alleged fraud scheme. They are, at best, alleged efforts to conceal Ms. Parker s employment status. 6 These concealment allegations make clear that the false statements did not assist in executing the alleged fraud. Clearly, they came after the scheme was already operating. More importantly, the alleged false statements seem to have nothing to do with the alleged fraud and were not made to the alleged victim Jefferson Parish. 6
Case 2:11-cr-00299-HH-FHS Document 127-1 Filed 08/10/12 Page 7 of 18 The Karen Parker employment issue, while possibly demonstrating mismanagement or even misfeasance, does not involve a fraud. This is not a case where Ms. Parker was hired for a paralegal supervisor position based upon some false claim that she had a paralegal certificate. Rather, even accepting the government s allegations as true, she was hired despite her lack of the technical qualifications for the job. Moreover, this was not hidden, but was known to various individuals in Jefferson Parish government. Similarly, while Ms. Parker was reassigned to ID Management, all the while retaining her paralegal supervisor position, again there was no falsehood. Whatever the evidence may be as to Ms. Parker s lack of qualifications for the position, or even of her lack of industry in carrying out her job, the indictment fails to adequately allege a scheme to defraud that was perpetrated using material falsehoods. To be sure, there are other patronage related cases in which mail or wire fraud verdicts have been upheld. For example, United States v. Sorich, 523 F.3d 702 (7 th Cir. 2008) 7 involved an illegal 7 Sorich involved an alleged scheme involving patronage hiring. Defendants were convicted of both honest services and money or property mail frauds. Their convictions were affirmed by the Seventh Circuit and defendants filed a petition for a writ of certiorari in the U.S. Supreme Court, which was denied over the dissent of Justice Scalia. See Sorich v. United States, 129 S. Ct. 1308 (2009). Justice Scalia noted: It is practically gospel in the lower courts that the statute does not encompass every instance of official misconduct. [ ] But why that is so, and what principle it is that separates the criminal breaches, conflicts and misstatements from the obnoxious but lawful ones, remains entirely unspecified. Without some coherent limiting principle to define what the intangible right of honest services is, whence it derives, and how it is violated, this expansive phrase invites abuse by headline-grabbing prosecutors in pursuit of local officials, state legislators, and corporate CEOs who engage in any manner of unappealing or ethically questionable conduct. Id at. 1310 (citations and internal quotations omitted). Going further and addressing the need to take up the constitutionality of the honest services statute, 18 U.S.C. 1346, Justice Scalia observed that [t]he Court of Appeals rebuffed petitioners' argument that if 1346 really criminalizes all conduct that is not in the public's best interest and that benefits someone, it is void for vagueness. Subsequently, in Skilling, the Supreme Court rejected this same theory of prosecution. Yet, despite that fact, in this case the government is attempting to resuscitate the not in the public s best interest theory of wire fraud by claiming it is money or property case. 7
Case 2:11-cr-00299-HH-FHS Document 127-1 Filed 08/10/12 Page 8 of 18 patronage scheme in the city of Chicago. In Sorich, the defendants worked in the mayor s Office of Intergovernmental Affairs, which informally coordinated a sizeable portion of the city s civil service hiring, ferreting out jobs to footsoldiers in the mayor s campaign organization and to other cronies. Id. at 705. The evidence at trial showed that the defendant s would hold sham interviews and falsify interview forms in favor of the pre-selected winners. The interview forms were often filled out weeks after the interviews, with one pile for the blessed applicants (to be given high scores), and another for everybody else (to be given low scores). Id. at 706. As the Seventh Circuit observed: Sorich, 523 F.3d at 706. This all went on despite the existence of multiple laws and personnel regulations forbidding the use of political considerations in hiring for civil service jobs, and mandating the awarding of those jobs on merit. These laws largely stem from the Shakman Decrees, which are two federal consent decrees banning the use of politics in City of Chicago hiring that came into being as a result of litigation in the 1970s and 80s. Members of the scheme falsely signed Shakman certifications, attesting that particular hiring sequences had not been influenced by political patronage. The facts in Sorich are clearly distinguishable from the allegations here. Unlike Sorich, which involved civil service jobs, falsified interviews, bogus ratings, fraudulent Shakman certifications, and a number of laws prohibiting political considerations in hiring, the hiring of Karen Parker did not violate any Jefferson Parish rule or policy. Nor are any of the facts substantiating a falsehood present here. Her position was unclassified exempting it from civil service rules and testing, while placing it within the discretionary authority of the Parish President or responsible department head. While, accepting the allegations of the indictment as true, she may 8
Case 2:11-cr-00299-HH-FHS Document 127-1 Filed 08/10/12 Page 9 of 18 have been hired to fill a position without the required qualifications, performed work other than the work set out in the job description, and even given less that her full effort to her work, it is hard to see how this type of activity constitutes a federal crime. The same problems plague the counts based upon Mr. Wilkinson s raise. There is simply no allegation in the indictment suggesting that the alleged fraud was executed using any material falsehood. In fact, while the government targets the Wilkinson pay raise alleging it was an improper reward for a personal favor, the government readily acknowledges that setting Mr. Wilkinson s salary was entirely within the discretion of Mr. Broussard. See Indictment at 2. Moreover, Mr. Wilkinson was not paid any more than the position of Parish Attorney could be paid under the Parish pay system. Mr. Broussard allegedly asked Mr. Whitmer to give Mr. Wilkinson the maximum possible salary for the parish attorney position. See Indictment at 21. Undersigned counsel have been unable to find another case in which the government has based a wire fraud claim on a public official s discretionary decision to pay a public employee an amount within the permissible range authorized for the job that employee is, in fact, performing. Obviously, the government s ire is the result of the motive it alleges was the basis for the exercise of discretion. Yet cases that target a public official s misuse of his authorized discretionary powers are precisely the kind of honest services fraud cases that the Supreme Court recently brought to an end in Skilling v. United States, 130 S. Ct. 2896 (2010). Indeed, the indictment here expressly reveals the government s error when it resorts to pre- Skilling style honest services language when alleging a scheme to defraud the citizens of Jefferson Parish, including allegations that the defendants acted in a manner contrary to the best 9
Case 2:11-cr-00299-HH-FHS Document 127-1 Filed 08/10/12 Page 10 of 18 interest of the citizens of Jefferson Parish. Indictment at 8 & 10. To be sure the government, while seeming to allege an honest services wire fraud as to the citizens of Jefferson Parish, understands its post-skilling burden. It knows that the facts in the indictment cannot support an honest services fraud in light of the Supreme Court s ruling in Skilling holding that honest services schemes are not covered by the mail fraud and wire fraud statutes in the absence of bribery or kickbacks. See Skilling, 130 S. Ct. 2896, 2931 (2010). As a result, it goes to great lengths to allege the required money or property nexus. 8 Finally, given the lack of any falsehoods made to the alleged victim Jefferson Parish it is unclear how the government s theory avoids the problem presented in United States v. Ratcliff, 488 F.3d 639 (5 th Cir. 2007). In Ratcliff, the Fifth Circuit upheld the pretrial dismissal of a money or property mail fraud case based upon alleged election fraud that, according to the indictment, was aimed at obtaining the salaries and benefits of the office of Parish President. In rejecting the salary theory of mail and wire fraud, the Fifth Circuit noted that salary and other financial employment benefits can constitute money or property under the statute... but that the real question is whether the indictment alleges a scheme to defraud the alleged victim Livingston Parish of that money. Id. at 644. According to the Court, in determining whether the indictment alleges a scheme to defraud Livingston Parish of money or property, we must look to whether the alleged scheme is one to deprive the parish of money or property through misrepresentations, thereby wronging the parish s property rights. The Fifth Circuit found the indictment failed to do so. Like 8 In doing so, however, it also keeps this honest services type language and references the citizens of Jefferson Parish and their best interest. The best interest of the citizens has no place in a post-skilling money or property indictment and that language should be stricken from the indictment. 10
Case 2:11-cr-00299-HH-FHS Document 127-1 Filed 08/10/12 Page 11 of 18 in the present case, the Ratcliff case involved the defendant receiving money in the form of salary and benefits from the parish. But the Ratcliff court found that this did not occur by means of Ratcliff s misrepresentations to the Louisiana Board of Ethics. Indeed, the Court held that because the salary of the parish president would be paid to whoever occupied the position, Livingston Parish had not been defrauded of any money or property. Id. at 645. The present case is analogous to Ratcliff. In the case of Mr. Wilkinson s raise, he received a pay increase that was available and permissible for the job he was performing and that could be awarded in the discretion of the Jefferson Parish President. No falsehoods were used to defraud the parish or to deprive the parish of this authorized salary. This is simply not a situation that falls within the ambit of the wire fraud statute. Likewise, even the Karen Parker employment matter seems to implicate the Fifth Circuit s decision not to adopt the salary theory of mail and wire fraud in Ratcliff. Id. at 646. 9 No falsehoods were used to secure her employment and the amount she received as pay was an amount that was available to pay someone in that position an unclassified position that could be filled without compliance with civil service rules. Importantly, the Ratcliff Court also noted that its analysis takes into account federalism concerns and in construing the meaning of the terms of the mail fraud statute, we are similarly guided by the principle that unless Congress conveys its purpose clearly, it will not be deemed to have significantly changed the federal-state balance in the prosecution of crimes. Id at. 648 (citations omitted). Like the approaches rejected by the Supreme Court in Cleveland v. United 9 The Ratcliff Court noted: [y]et even if the salary theory of mail fraud were accepted in this circuit, the cases discussing and accepting the theory involve situations in which a job applicant falsely represented his qualifications or skills in order to obtain a job, deceiving the employer into hiring or promoting someone that he would not have otherwise 11
Case 2:11-cr-00299-HH-FHS Document 127-1 Filed 08/10/12 Page 12 of 18 States, 531 U.S. 12, 121 S. Ct. 365 (2000)(Louisiana regulatory system governing video poker licensing) and by the Fifth Circuit in Ratcliff (Louisiana regulatory system governing campaign disclosures and elections), the government s indictment in this case invites [the Court] to approve a sweeping expansion of federal criminal jurisdiction in the absence of a clear statement by Congress. Ratcliff, 488 F.3d at 649. Here the invitation to the court is to find a scheme to defraud a government entity of the salaries of public unclassified non-civil service discretionary employees in the absence of any misrepresentation to Jefferson Parish. Like the Fifth Circuit in Ratcliff, this Court should reject this invitation. Mr. Wilkinson was the parish attorney. It is undisputed that he was in fact fully performing all duties of that job. He was paid a salary that was no more than was authorized for that position and which was within the discretionary power of the appointing official to set. There were no misrepresentations or false statements involved. Accordingly, the wire fraud counts must be dismissed. b. Theft from Programs Receiving Federal Funds Based upon the same factual allegations underlying the wire fraud counts, the indictment charges Mr. Broussard and Mr. Wilkinson with violating 18 U.S.C. 666, involving theft from federal programs. Essentially the government s theory is that by hiring Ms. Parker despite her alleged lack of qualifications and then transferring her to ID Management while paying her for the paralegal supervisor position and by giving Mr. Wilkinson a raise allegedly as a reward for his personal favor to Mr. Broussard, Mr. Brossard and Mr. Wilkinson violated 18 U.S.C. 666. The hired or promoted. Ratcliff, 488 F.3d at 646 (citations omitted). 12
Case 2:11-cr-00299-HH-FHS Document 127-1 Filed 08/10/12 Page 13 of 18 essential elements of a violation of 666 is: (1) whether a local body receives more than $10,000 under a federal program, (2) whether the defendant is an "agent" of the body, and (3) whether the defendant embezzles, steals, [or] obtains by fraud funds of the body. 10 United States v. Phillips, 219 F. 3d 404, 421(5 th Cir. 2000)(Garza, J., dissenting)(citations omitted). Count 25 of the indictment alleges a violation of 666(a)(1)(A) against Messrs. Broussard and Wilkinson based upon Mr. Broussard s decision to award Mr. Wilkinson a discretionary pay raise based upon BROUSSARD s belief that WILKINSON had helped his family member gain admission to a local private school. Indictment at 26. The indictment makes no effort to explain how the decision to award a discretionary pay raise that is within the power of the public official to award amounts to embezzlement, theft or fraud. While it alleges that Mr. Wilkinson was not entitled to the funds received as a result of the raise, again the government fails to explain why he was not entitled to a raise approved by and within the discretionary authority of the parish president to award. As with the fraud allegations under the wire fraud statute, the government s primary complaint appears to be that Mr. Broussard somehow misused the powers of his office in a manner the government has deemed inappropriate. Despite the government s attempt to criminalize this conduct, 666 was not designed to do so, and this count should be dismissed. 10 The government s theory is apparently that the wages received by Ms. Parker and the raise received by Mr. Wilkinson were the result of fraud. For the same reasons set out in the discussion of the wire fraud counts above the lack of any false statements or representations there is no fraud under 666(a)(1)(A) on the facts here. Nor is there any basis for a charge of theft or embezzlement. Theft requires a defendant to have taken property without the consent of the parish, while embezzlement requires a defendant, who has lawful custody of the parish s property, to act to deprive the parish of that property. The funds involved here were paid by the parish to both Ms. Parker and Mr. Wilkinson as part of their salaries and, therefore, do not amount to theft or embezzlement. 13
Case 2:11-cr-00299-HH-FHS Document 127-1 Filed 08/10/12 Page 14 of 18 Counts 25-27 of the indictment allege violations of 666 based upon the employment of Karen Parker. Specifically, they allege that the funds paid to Parker violate the statute because she received income that she was not entitled to because she did not perform the essential duties of a Paralegal Supervisor and because she was paid substantially more that the individual who held the position of ID/Security System Coordinator. Indictment at 27. If these allegations are sufficient to constitute violations of 666, the government s power to prosecute activities in state government offices is virtually unlimited. The government could prosecute any employee who does not perform the essential duties of their job, if the employee is being paid to do that job. Moreover, it also seems the government could prosecute mere poor management, i.e., any supervisor who does not ensure that employees they supervise perform the essential duties of their jobs. Because 666 was not designed to expand the reach of federal power to such personnel or employee management issues, the counts relating to the employment of Karen Parker must be dismissed. Finally, the statute itself includes a safeguard against this type of government overreaching. The statute expressly provides that it does not apply to bona fide salary, wages, fees or other compensation paid, or expenses paid or reimbursed, in the usual course of business. 18 U.S.C. 666(c). This provision has been the basis for pretrial dismissal of an indictment where employees worked fewer hours than their normal compensation required. United States v. Harloff, 815 F. Supp. 618, 619 (W.D.N.Y. 1993). The Fifth Circuit has observed that [p]revious decisions from other circuits demonstrate that a salary is not bona fide or earned in the usual course of business under 666(c) if the employee is not entitled to the money. United States v. Williams, 507 F.3d. 905, 908 (5 th Cir. 2007). The Williams Court stated that [w]hether wages are bona fide and earned in the 14
Case 2:11-cr-00299-HH-FHS Document 127-1 Filed 08/10/12 Page 15 of 18 usual course of business is a question of fact for the jury to decide. Id. at 909. While that may be true from a proof perspective, the question here is whether the allegations of the indictment if proven constitute a violation of the statute. Here, there is no dispute that the actions that provide the basis for the alleged offenses the employment of Karen Parker and the raise to Mr. Wilkinson were authorized by Mr. Broussard, who, as parish president, had the authority and discretion to employ and pay employees who were unclassified and outside the civil service. Again, Mr. Wilkinson as the parish attorney was fully performing all duties of that job and was paid a salary that was no more than was authorized for that position a salary that was within the discretionary power of the appointing official to set. In light of these facts, the 666 counts fail to state an offense as a matter of law because Mr. Wilkinson s only pecuniary gain was in fact bona fide salary. No jury could find otherwise beyond a reasonable doubt. Finally, the use of 666 to prosecute the employment practices at issue in this case presents serious and substantial vagueness problems as applied to the defendants conduct. The present indictment seeks to use 666 to criminalize practices by local officials that the prosecutors have deemed not in the best interest of Jefferson Parish citizens. On the facts presented here, which do not allege any false statements or representations to the parish for the purposes of accomplishing some fraud, the application of 666 is unconstitutionally vague as applied. The Supreme Court has stated that criminal statutes violate due process when either ordinary people can [not] understand what conduct is prohibited or they encourage arbitrary and discriminatory enforcement. Kolender v. Lawson, 461 U.S. 352, 357 (1983); see also, Smith v. Gougen, 415 U.S. 566, 574 (1974) ( Due process requires that all be informed as to what the State 15
Case 2:11-cr-00299-HH-FHS Document 127-1 Filed 08/10/12 Page 16 of 18 commands or forbids ) (internal citations omitted). The Supreme Court has described vague statutes as failing to provide a person of ordinary intelligence fair notice of what is prohibited, or [as being] so standardless that [they] authoriz[e] or encourag[e] seriously discriminatory enforcement. Skilling v. United States, 130 S Ct. 2896, 2935 (2010)(Scalia, J., dissenting)(quoting United States v. Williams, 553 U.S. 285, 304, 128 S.Ct. 1830 (2008). Applying these due process requirements to the use of 666 in this case, reveals a substantial vagueness problem. The statute utterly fails to give a person of ordinary intelligence fair notice of when the acceptance of a permissible pay raise from his employer may violate the federal criminal law or when allowing an individual receive a salary where they fail to perform the essential duties of their job, will constitute a violation of the federal criminal law. Mr. Wilkinson suggests that Congress express decision to include the bona fide salary provision into this statute was designed to prevent precisely the kind of vague and standard-less prosecution the government is pursuing in this case. Accordingly, based upon these arguments, the 666 counts must be dismissed. b. The Conspiracy Count Count One charges Mr. Wilkinson and Mr. Broussard with a multi-object conspiracy under 18 U.S.C. 371. Two of those objects wire fraud and theft from programs receiving federal funds are based upon the same facts and substantive offenses discussed in detail above. In each case, the core of the allegedly unlawful conduct is fraud. Because the indictment fails to state an offense under either the wire fraud or theft from federally funded programs statutes, it also fails to state a conspiracy offense insofar as those objects are concerned. 16
Case 2:11-cr-00299-HH-FHS Document 127-1 Filed 08/10/12 Page 17 of 18 It is well settled that [t]o convict [a defendant] of conspiracy to commit wire fraud, the Government [is] required to prove that (1) [the defendant] and at least one other person made an agreement to commit the crime of wire fraud; (2) at least one of the conspirators knowingly took an overt act in furtherance of that agreement during the existence of the conspiracy; and (3) [the defendant] acted with the specific intent to join the conspiracy and commit wire fraud. United States v. Curtis, 635 F.3d 704, 719 n.53 (5 th Cir. 2011). The government faces a similar burden in charging and proving a conspiracy to violate 18 U.S.C. 666(a)(1)(A). In either case the government must allege, and subsequently prove, that the alleged conspirators agreed to commit the alleged objections and had the intent to both join the conspiracy and to commit the crime charged as an object. Unfortunately for the government, the inability to allege any intentional material falsehoods in charging either the 1343 or 666 counts, also renders the alleged conspiracy infirm. The lack of any false material misrepresentation used in executing the scheme to defraud or in taking funds from a federally funded program by fraud, demonstrates that even taking the allegations of the indictment as true the indictment fails to adequately allege a conspiracy to violate 1343 or 666. As a result, the 1343 or 666 objects of count one should be dismissed and the factual allegations supporting those objects stricken from the indictment. 17
Case 2:11-cr-00299-HH-FHS Document 127-1 Filed 08/10/12 Page 18 of 18 WHEREFORE, for the foregoing reasons, Mr. Wilkinson asks that the second superseding indictment be dismissed. Respectfully submitted, /s/ Ralph S. Whalen, Jr. RALPH S. WHALEN, JR. (#8319) 2950 Energy Centre 1100 Poydras Street New Orleans, Louisiana 70163 Tel.: (504) 525-1600; Fax: (504) 527-6156 Email: ralphswhalen@ralphswhalen.com /s/ Richard W. Westling RICHARD W. WESTLING (#20027) WALLER LANSDEN DORTCH & DAVIS, LLP 511 Union Street, Suite 2700 Nashville, Tennessee 37219 Tel.: (615) 850-8481; Fax: (615) 244-6804 Email: richard.westling@wallerlaw.com Attorneys for Thomas G. Wilkinson CERTIFICATE OF SERVICE I hereby certify that on August 10, 2012, a copy of the foregoing was served upon all counsel of record by electronic means through the Court s EM/ECF system. /s/ Richard W. Westling RICHARD W. WESTLING 18
Case 2:11-cr-00299-HH-FHS Document 127-2 Filed 08/10/12 Page 1 of 1 UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF LOUISIANA UNITED STATES OF AMERICA CRIMINAL ACTION VERSUS NO. 11-299 THOMAS G. WILKINSON SECTION HH (SHF) O R D E R Considering the foregoing Defendant Wilkinson s Motion to Dismiss Counts Seven through Twenty-Seven and for Partial Dismissal of Count One of the Second Superseding Indictment, the Memorandum in Support, and the reasons stated therein; IT IS HEREBY ORDERED that the Motion is GRANTED and that Counts Seven through Twenty-Seven of the Second Superseding Indictment are DISMISSED. IT IS FURTHER ORDERED that Count One of the Second Superseding Indictment is DISMISSED IN PART and that the objects of Wire Fraud and Theft from Programs Receiving Federal Funds and the factual allegations relating thereto are stricken. This day of, 2012. UNITED STATES DISTRICT JUDGE 1
Case 2:11-cr-00299-HH-FHS Document 127-3 Filed 08/10/12 Page 1 of 2 UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF LOUISIANA UNITED STATES OF AMERICA CRIMINAL ACTION VERSUS NO. 11-299 THOMAS G. WILKINSON SECTION HH (SHF) NOTICE OF HEARING PLEASE TAKE NOTICE that defendant, Thomas G. Wilkinson, by and through undersigned counsel, will bring on for hearing his Motion to Dismiss Counts Seven through Twenty-Seven and for Partial Dismissal of Count One of the Second Superseding Indictment on the day of, 2012 at o clock.m. Respectfully submitted, /s/ Ralph S. Whalen, Jr. RALPH S. WHALEN, JR. (#8319) LAW OFFICES OF RALPH S. WHALEN, JR. 2950 Energy Centre 1100 Poydras Street New Orleans, Louisiana 70163 Tel.: (504) 525-1600; Fax: (504) 527-6156 Email: ralphswhalen@ralphswhalen.com RICHARD W. WESTLING (#20027) WALLER LANSDEN DORTCH & DAVIS, LLP 511 Union Street, Suite 2700 Nashville, Tennessee 37219 Tel.: (615) 850-8481; Fax: (615) 244-6804 Email: richard.westling@wallerlaw.com Attorneys for Thomas G. Wilkinson 1
Case 2:11-cr-00299-HH-FHS Document 127-3 Filed 08/10/12 Page 2 of 2 CERTIFICATE OF SERVICE I hereby certify that on August 10, 2012, a copy of the foregoing was served upon all counsel of record by electronic means through the Court s EM/ECF system. /s/ Richard W. Westling RICHARD W. WESTLING 9055217.1 2