What is Honest Services Fraud, what type of sentence could Dougherty and Henon receive, and why they will appeal their convictions
Recently, our criminal defense law firm with offices in Pennsylvania and New Jersey received a question regarding the federal crime of Honest Services Fraud (18 USC 1346) following the trial and conviction of union leader John Dougherty and Philadelphia City Councilman Bobby Henon. Both men were convicted on several counts following their jury trial and now face a substantial federal prison sentence. Sentencing is scheduled for February 2022, but it is very likely that their criminal defense lawyers will file an appeal following sentencing which could delay the start of that sentence.
What is Honest Services Fraud?
Honest Services Fraud is an allegation involving a scheme or artifice to deprive another of intangible right of honest services. It is an extension of mail or wire fraud but there is no clear definition of “honest services”. The purpose of this statute was to decrease government corruption but the law itself is not limited to government actions.
This crime requires the government prove the following beyond a reasonable doubt:
- A person pays a bribe
- A person accepts a bribe
- A person is harmed by a bribe
In the case of Dougherty, the allegation is that the bribe paid was Henon’s salary and those harmed were the citizens that Henon swore to serve in Philadelphia. Prior to 1997 this crime only pertained to “tangible property”, but Congress later altered the statute to include intangible property.
Intangible property includes the violation of a fiduciary duty that one has legally or ethically breached. Honest services intangible rights have no concrete definition. It isn’t necessary for the government to prove actual harm but only that harm is possible.
Why Dougherty & Henon will appeal their federal convictions in Philadelphia
These types of criminal charges are extremely broad, complicated, and based on a lack of definition, vague. Given these issues, it is highly likely, therefore, that Dougherty and Henon will file appeals of their convictions. This crime is a felony and the maximum penalty for fraud that does not involve a financial institution is up to 20 years in federal prison along with a fine of $250,000. If this crime involves a financial institution, like a bank, the maximum penalty is up to 30 years in prison.
Every separate transaction is a separate offense and the penalties apply to each conviction. Like in the case of Dougherty and Henon, prosecutors often charge several transactions even though it appears the bribe was Henon’s salary for his work done on behalf of Dougherty’s union.
What type of sentence could Dougherty & Henon receive following their convictions?
With regards to possible sentence, the offense gravity score for this crime is a 24. This number is significant because federal courts will use it to consider sentencing guidelines which are not mandatory, but a federal judge must consider during sentencing. Since neither Dougherty nor Henon have any criminal history whatsoever, they are not subject to increased prison terms based on prior criminal history.
The sentencing guidelines for each count alone are 53-64 months of federal incarceration. The judge is not obligated to run sentences concurrently and Dougherty and Henon were each convicted of several counts of these offenses. These men are not the first individuals charged and convicted with these types of crimes and former politicians convicted of this offense include:
- Don Siegelman—former governor of Alabama (7 years in federal prison)
- Mary McCarty—former county commissioner of Palm Beach County (guilty plea—21 months to 3 ½ years in federal prison)
- George Ryan—former governor of Illinois (5 years of federal prison followed by 7 months of home confinement)
Is Honest Services Fraud even constitutional?
The federal government prosecutes local, state, and federal officials to fight public corruption under the Honest Services Fraud statute as opposed to bribery because it is a broader type of crime and more open to jury interpretation.
Critics of the law, most notably the late US Supreme Court Justice Antonin Scalia, wrote that “the law was so poorly defined that it could be the basis for prosecuting a mayor for using the prestige of his office to get a table at a restaurant without a reservation”.
The law is opposed by many interest groups such as the conservative United States Chamber of Commerce, the Washington Legal Foundation, as well as the National Association of Criminal Defense Lawyers.
Former New York State senate majority leader Joseph Bruno was convicted of honest services fraud in 2009 but his conviction was later overturned on appeal. Bruno was subsequently retried and acquitted. Prior to the conviction he was sentenced to 2 years in federal prison. Judges on both sides have criticized the law as vague and that it has been used to wrongfully used to convict individuals on minor transgressions and mere ethical violations.
It will be very interesting to see what ultimately happens with these two cases given what we know about the law and how courts have interpreted it.
What you need to know about Federal Sentencing
Federal sentencing procedure require a firm understanding of the federal statutes and case law. Prior to the Supreme Court’s decision in U.S. v. Booker, federal judges were required to follow the sentencing guidelines and only permitted to depart from the guidelines in extreme situations. See 18 U.S.C.§3553(b)(1).
The judge was only permitted to depart from guidelines in cases where he/she found “an aggravating or mitigating circumstance…not adequately taken into consideration by the federal sentencing commission when it formulated the guidelines.”
The United States Supreme Court’s decision in United States v. Booker, however, specifically stated that federal sentencing guidelines are only advisory and that a court does not need to follow them. The Booker decision went on to say that a federal court is only required to impose a sentence which does the following:
- Reflect the seriousness of the offense, to promote respect for the law, and to provide just punishment for the offense;
- To afford adequate deterrents to criminal conduct;
- To protect the public from further crimes of the defendant; and
- To provide the defendant needed education or vocational training, medical care, or other correctional treatment in the most effective manner.
If a federal court chooses not to follow the guidelines specifically and imposes less of a sentence, an appellate court (a higher court) is only permitted to review the decision for “unreasonableness”. See United States v. Booker, 543 U.S.220(2005). It is very important to understand, however, that while the Booker decision permits federal courts to impose a sentence below the standard guidelines it does not change or alter federal law which requires a judge to impose mandatory minimum sentence for specific crimes for certain offenses. For instance, federal law imposes a minimum for drug offenses involving certain quantities, crimes with guns, or other firearms, and child sex offenses.
There are, however, exceptions to mandatory minimum sentences where the defendant cooperates and provides “substantial assistance” to the government or where the court finds that the defendant has a minimal criminal history, is not violent, or was not a key participant in the crime. Federal inmates usually serve almost their entire sentence. There is no parole in the federal system and “good time” credit is limited to a maximum forty-five (45) days per year. See 18 U.S.C. 3624(b). While there is typically not probation in the federal system courts usually impose supervised release following any prison sentence longer than a year.
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