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Greg E. Lindberg and John D. Gray were convicted of fraud with honest services and bribes with federal funds in connection with a series of payments and offerings of payment, in the form of campaign contributions, made to Mike Causey, the elected insurance commissioner for North Carolina. The jury found that these payments were made in exchange for Causey appointing another deputy commissioner to oversee the affairs of Lindberg’s insurance company.
IN United States of America v. Greg E. Lindbergno. 20-4470, 20-4473, United States Court of Appeals, Fourth Circuit (June 29, 2022) granted Fourth Circuit a new trial.
Greg E. Lindberg was chairman of Eli Global LLC, an investment company, and as owner of Global Bankers Insurance Group, an insurance management company, during the relevant period from April 2017 to August 2018. Lindberg owns several insurance businesses that are covered by regulation in North Carolina. John D. Gray worked as a consultant for Lindberg during the current period. Lindberg and Gray (“defendants”) were convicted of conspiracy to commit fraud with honest services and bribes with federal funds for offering millions of dollars in campaign grants to Mike Causey, the North Carolina Department of Insurance commissioner, in exchange for the redeployment of a chief commissioner who was commissioned to review Lindberg’s insurance company.
In November 2016, Mike Causey was elected North Carolina’s Commissioner of Insurance. Several weeks after he was elected, Causey was scheduled to meet with Lindberg and other members of Eli Global’s management. Prior to the meeting, he received a phone call from his campaign treasurer who informed him that he had received a donation of 10,000 dollars from Lindberg. Causey testified that he thought the donation was “unusual” due to both the size and the timing, and he decided to return the donation. At the meeting, Gray explained that Eli Global was in the process of buying another insurance company based in Michigan and asked Causey to call his counterpart in Michigan “to say a positive word.” Causey agreed and called.
Causey testified at the trial that Gray then called him to state that OFLindberg had donated $ 500,000 to the North Carolina Republican Party (“NCGOP”) with $ 110,000 to be sent to Causey’s campaign and that Gray and Lindberg wanted to host a fundraiser. for Causey in December. Causey later contacted the Federal Bureau of Investigation (“FBI”) to express concern about these donation offers and agreed to cooperate with an FBI investigation of Lindberg and his staff.
During several meetings, they discussed that Lindberg would create an independent spending committee and donate significant amounts, between $ 500,000 and $ 2,000,000 to Causey’s re-election campaign. The day after the meeting, Causey’s campaign received $ 230,000 from the NCGOP. In total, Causey received $ 250,000 in donations channeled through the party.
Upon completion of the investigation, the defendants were charged in March 2019 with a case of conspiracy to commit fraud with honest services, in violation of 18 USC § 1349, and a case of bribery of federal funds and aides to them, in violation of 18 USC §§ 666 (a) (2) and 2. The defendants pleaded not guilty and a jury trial was held from 18 February to 5 March 2020.
During the trial, both defendants and the U.S. District Court’s proposed jury instruction defining “official document.” Both parties agreed that the question of what qualifies as an “official document” should be referred to the jury.
The district court disputed both objections. Furthermore, the district court prevented defendants from arguing or presenting evidence that Obusek’s relocation was not an “official act”. After three days of deliberation, Gray and Lindberg were convicted on both counts. The accused Gray was sentenced to a prison term of thirty months and Lindberg was sentenced to a prison term of eighty-seven months.
Count one: Fraud with honest services
The district court stated in unequivocal terms “that the removal or replacement of a [S]older [D]eputy [C]commissioner of [C]missions would constitute an “official document”.
IN McDonnell v. USA579 US 550, 580 (2016), “the Supreme Court defined fraud with honest services with reference to § 201 of the Federal Bribery Charter. In particular, the court imported the requirement of” official action “in 18 USC § 201 and found that” the [g]transfer was required to show that Governor McDonnell committed (or agreed to commit) an “official act” in exchange for the loans and gifts. “
Section 201 (a) (3) defines the term “official document” and the Supreme Court has limited the definition of the term:
In summary, an “official document” is a decision or action on a “question, matter, cause, trial, procedure or controversy.” The “issue, question, cause, subpoena, procedure or controversy” must involve a formal exercise of state power which is similar in nature to a trial before a court, a decision before an agency or a hearing before a committee. There must also be something specific and focused that is “waiting” or “may be required by law” before a public official. To qualify as an “official document”, the public official must make a decision or take action in that “issue, question, cause, trial, procedure or controversy.” or agree to do so. McDonne11,579 US at 574 (emphasis added).
Although the district court correctly defined the term “official document” according to the directive of McDonnellit then instructed the jury in unequivocal terms “to remove or replace one [S]older [D]eputy [C]commissioner of [C]commissioner would constitute an official document. ” The Fourth Circuit found that by doing so, the district court unlawfully took part of the crime out of the hands of the jury and violated the defendant’s rights for the fifth and sixth additions.
However, the district court erred in interpreting the inquiry into “official action” as a purely legal matter.
The Supreme Court was clear in McDonnell that “[i]t is up to the juryin the circumstances of the case, to determine whether the public official agreed to perform an “official act” at the time of the alleged consideration. ” And that McDonnell The court clearly considered that it was the jury’s province to decide what constitutes an official document.
After finding that the district court had wrongly instructed the jury on the “official act” element, the fourth district was required to determine whether the error required convictions.
A constitutional error is harmless when it is stated beyond a reasonable doubt that the error did not contribute to the judgment being obtained. [Neder v. United States, 527 U.S. 1, 2 (1999) (emphasis added) (quoting Chapman v. California, 386 U.S. 18, 24 (1967)].
The fourth circuit decided that it could not conclude beyond a reasonable doubt that the jury’s judgment would have been the same without the error. As a result, the fourth circuit concluded that the instruction error was not harmless in the case of Count One and that the convictions of Count One had to be overturned.
Count two: Bribes from Federal Funds
The solicitation or acceptance of a promotional grant by an elected public official, the offer of money by an independent expenditure committee and the fact that a donor gives or offers a promotional grant to an elected public official does not in itself constitute a federal offense even though the donor is pending before the elected official; and even if the allowance is made shortly before or after the public official takes over official documents favorable to the donor. T
To satisfy elements of bribery in this case, the public official does not actually need to perform one official document, or even intend to do so. When the defendant is a person who is accused of having paid bribesit is sufficient if the defendant intends or urges the official to perform one official document in exchange for something of value.
The court’s erroneous “official document” instruction may therefore have bled effortlessly into the jury’s consideration of bribes from Count Two federal funds.
Instruction for “official law”.
The defendants also claimed that the district court erred because it did not instruct the jury that an “official document”, as defined by the Supreme Court, is part of bribes from federal funds.
Congress expressed its clear intent to achieve the construction of state and local officials (where such officials are agents of a covered entity that receives $ 10,000 or more annually in federal funds). Congress is within its privilege of protecting expenditure items from the threat of local administrators.
In summary, the district court erred in instructing the jury that an “official act” – part of the crime of fraud with honest services – was present by law. Furthermore, the error is not harmless and therefore the fourth circuit overturned the convicts’ convictions for indictment one and indictment two because it found that the judges were incorrectly infected by the instruction error on indictment one. The case is therefore referred to a new trial.
Lindberg’s and Grays’ actions raised serious concerns for the newly elected Insurance Commission, Mr Causey, due to the large sums of dollars from two people who supported and contributed to his opponents. He, in order to protect himself, called the FBI, which, in collaboration with him, got the American lawyer to prosecute Lindberg and Gray, put them before a jury and convicted them. The fourth circuit reversed. Lindberg and Gray are still serving time in prison and have moved to be released for the new trial. The court did not comment on their guilt, only that the district court’s error tarnished the judges. They could be sentenced again as long as the court uses appropriate instructions.
(c) 2022 Barry Zalma & ClaimSchool, Inc.
Barry Zalma, Esq., CFE, now limits his internship to the position of insurance consultant specializing in insurance coverage, insurance claims handling, insurance misconduct and insurance fraud almost equally for insurers and policyholders. He practiced law in California for more than 44 years as an attorney for insurance coverage and claims management and more than 54 years in the insurance industry. He is available at http://www.zalma.com and email@example.com.
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