Ex-New York Lawmaker Silver Appeals Vacated Convictions to SCOTUS

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By Madison Alder

Former New York State Assembly Speaker Sheldon Silver is asking the U.S. Supreme Court to review his corruption conviction, even though a federal appeals court overruled the verdict in July.

Silver’s 2015 conviction was thrown out by the U.S. Court of Appeals for the Second Circuit in light of a new, narrowed definition of “official act” handed down by the U.S. Supreme Court in McDonnell v. United States.

Silver primarily challenges the legality of his former money laundering conviction in his petition to the Supreme Court. He appealed to the high court in October before a new trial in the district court where he was originally found guilty could begin. The Justice Department response to Silver’s petition is due Dec. 13.

Jeffrey Bellin, a professor at the College of William and Mary Law School specializing in constitutional and criminal law, told Bloomberg Law that Silver is “focused on the money laundering count” because there is a conflict in circuit court decisions on money laundering, increasing his petition’s chances of being taken up by the high court.

The Supreme Court is interested in resolving cases that have a larger impact on the law, Bellin said, and without a circuit split, the case would be limited to Silver’s convictions.

Adam H. Schuman, a lawyer who prosecuted crimes related to the infamous “Wolf of Wall Street” securities fraud case, told Bloomberg Law in an email that Silver’s petition is “a savvy strategy to have the Supreme Court shave back the money laundering charge against Silver before the case is retried.”

Silver relied on the opinions from other circuits in arguing that his money laundering conviction could not stand post- McDonnell.

“Although the Second Circuit has adopted the majority view,” the split “opens the door for Silver’s petition to the Supreme Court,” Schuman said.

Schuman, who recently joined Perkins Coie LLP in New York as a partner, said the “the shifting legal landscape since McDonnell should make this an interesting case to watch.”

McDonnell’s Impact

Silver’s case is just one example of the effects the high court’s unanimous ruling in McDonnell has had. Former Rep. William Jefferson (D-Va.) and New York State Senate Majority Leader Dean Skelos (R-Nassau County), similarly had corruption convictions thrown out in light of the case.

Under McDonnell, an “official act” requires a formal exercise of governmental power, not merely arranging a meeting, talking to another official or setting up an event.

The instructions given to the jury in Silver’s trial did not comply with the definition in McDonnell, the Second Circuit said.

The ruling recently played a role in New Jersey Senator Bob Menendez’s corruption trial, which ended in a hung jury mistrial Nov. 16.

Criminal vs. Non-Criminal Funds

There isn’t a clear definition of what the government needs to prove in money laundering cases involving transfers from accounts that contain both criminally derived and non-criminally derived funds, Silver argues in his petition.

The Fifth and Ninth circuits have ruled that in order to find someone guilty of money laundering, the funds a defendant transfers must be traced to “criminally derived proceeds,” Silver said.

“The practical effect of that construction is to preclude the Government from obtaining a conviction where a commingled account contains sufficient clean funds to cover the withdrawal,” Silver argues.

The Second Circuit sided with the majority view in the courts,holding “that the Government is not required to trace criminal funds that are comingled with legitimate funds.” Requiring each dollar be traced back to criminal activity “would allow individuals effectively to defeat prosecution for money laundering by simply commingling legitimate funds with criminal proceeds,” the court said, quoting United States v. Moore, a Fourth Circuit decision.

Silver also asked the court to review his extortion and honest services fraud convictions, arguing the evidence against him wasn’t sufficient.

Scheme Involvement

Silver was found guilty of corruption in November 2015 for his involvement in two quid pro quo schemes while serving as Speaker of the New York State Assembly from 1994 to 2015.

He was convicted of honest services fraud, extortion, and money laundering, netting an estimated $4 million, according to court documents.

The government alleged Silver used his official position to reward those who sent potential clients to law firms who in turn would pay Silver referral fees.

Silver’s new trial in the U.S. District Court for the Southern District of New York is set for April 16, 2018, but is tentative based on the Supreme Court’s response to the petition, Judge Valerie E. Caproni said in a court document Aug. 15.

The Justice Department and Silver’s attorneys Steven Molo and Joel Cohen did not respond to Bloomberg Law requests for comment

The case is Silver v. United States, U.S., No. 17-562, response due 12/13/17 .

To contact the reporter on this story: Madison Alder in Washington at malder@bloomberglaw.com

To contact the editor responsible for this story: C. Reilly Larson at rlarson@bloomberglaw.com

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