United States v. Bahel

08-3327

United States v. Bahel

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

____________________

August Term, 2010

(Argued: July 8, 2009, and January 13, 2011 Decided: October 26, 2011)

Docket No. 08-3327-cr

____________________

UNITED STATES,

Appellee,

-v.-

SANJAYA BAHEL,

Defendant-Appellant.*

_____________________

Before: POOLER and RAGGI, Circuit Judges, and KORMAN, District Judge.**

Appeal from a judgment of conviction entered in the United States District Court for the

Southern District of New York (Griesa, J.), convicting Appellant Sanjaya Bahel of four counts of

use of the mail or wires in furtherance of fraud that deprived the United Nations, his former

employer, of its intangible right to his honest services in violation of 18 U.S.C. §§ 1341, 1343,

1346; one count of corrupt receipt of things of value with intent to be rewarded with respect to

official business in violation of 18 U.S.C. § 666; and one count of conspiracy in violation of 18

U.S.C. § 371. We hold that the United Nations expressly waived Bahel’s immunity, and even if

*

The Clerk of the Court is directed to conform the caption in accordance herewith.

**

Honorable Edward R. Korman of the United States District Court for the Eastern

District of New York, sitting by designation.

it had not, Bahel himself waived any claim of immunity by failing to raise the issue until the trial

was complete. We also hold that the United Nations Participation Act, which authorizes the

payment of the United States’ dues to the United Nations, is both a “federal program” and a

“benefit” within the meaning of Section 666, which encompasses bribes as well as illegal

gratuities. We further hold Section 1346 is broad enough to encompass honest services fraud

committed by a foreign worker at the United Nations, that Bahel was properly sentenced as a

“public official” under the United States Sentencing Guidelines, Section 2C1.1, and that the

district court committed no error in ordering Bahel to pay restitution in the form of remitting a

portion of his salary at the United Nations, which amounted to what Bahel was paid during the

time he was suspended pending investigation of the conduct underlying his conviction.

AFFIRMED.

____________________

HENRY E. MAZUREK, Clayman & Rosenberg LLP, New York,

NY, for Defendant-Appellant.

BRENT S. WIBLE (Daniel A. Braun, Alexander J. Willscher, of

counsel), Assistant United States Attorneys, for Preet Bharara,

United States Attorney for the Southern District of New York, New

York, NY, for Appellee.

POOLER, Circuit Judge.

This is an appeal from a judgment of conviction entered in the United States District

Court for the Southern District of New York (Griesa, J.), convicting Appellant Sanjaya Bahel of

four counts of use of the mail or wires in furtherance of fraud that deprived the United Nations,

his former employer, of its intangible right to his honest services in violation of 18 U.S.C. §§

1341, 1343, 1346; one count of corrupt receipt of things of value with intent to be rewarded with

respect to official business in violation of 18 U.S.C. § 666; and one count of conspiracy in

2

violation of 18 U.S.C. § 371. We hold that the United Nations expressly waived Bahel’s

immunity, and even if it had not, Bahel himself waived any claim of immunity by failing to raise

the issue until the trial was complete. We also hold that the United Nations Participation Act,

which authorizes the payment of the United States’ dues to the United Nations (“U.N.”), is both

a “federal program” and a “benefit” within the meaning of Section 666, which encompasses

bribes as well as illegal gratuities. We further hold Section 1346 is broad enough to encompass

honest services fraud committed by a foreign worker at the U.N., that Bahel was properly

sentenced as a “public official” under the Sentencing Guidelines Section 2C1.1, and that the

district court committed no error in ordering Bahel to pay restitution in the form of remitting a

portion of his salary at the U.N., which amounted to what Bahel was paid during the time he was

suspended pending investigation of the conduct underlying his conviction. For the following

reasons, the judgment of conviction is affirmed.

BACKGROUND

The following facts are drawn from the evidence presented at trial, and are presented in

the light most favorable to the government. See United States v. Ivezaj, 568 F.3d 88, 90 (2d Cir.

2009).

Sanjaya Bahel served as a Chief of the Commodity Procurement Section within the

U.N.’s Procurement Division from 1998 to 2003. Beginning around 1999, Nanak Kohli, a long

time friend of Bahel’s, began to seek business as a supplier to the U.N., with the assistance of his

sons, Nishan and Ranjit.3 As a section chief for the U.N. Procurement Division, Bahel assisted

3

Our convention is to refer to individuals by their surnames; however, because Nanak,

Nishan and Ranjit share a common surname, we employ their first names for ease of reference.

3

the Kohlis in their efforts to secure contracts as a U.N. supplier. In connection with the

prosecution of Bahel, Nishan Kohli, an indicted coconspirator, became a cooperating witness for

the government and the primary source of information regarding Bahel’s activities on behalf of

the Kohli family.4

Bahel’s work performance was subject to a variety of U.N. rules, which inform the

contours of the duty Bahel owed to his employer. These included (1) an obligation to discharge

his job duties with impartiality; (2) to work in the U.N.’s interests; (3) to avoid using his U.N.

position for gain; (4) to obtain approval from the Secretary General for gifts; (5) not to have an

association with an entity seeking U.N. business; and (6) to disclose any conflicts of interest or

be recused in such circumstances. The Government offered evidence at trial to show that Bahel

violated these requirements, and by extension, certain federal statutes by providing the Kohli

family with inside information on the bidding process for contracts; convincing U.N. employees

that the Kohli companies’ bids did not raise concerns; counseling the Kohlis on how to win

contracts; and assisting in the preparation of documentation to the U.N., without disclosing to the

U.N. Bahel’s long-term friendship with the Kohlis or the financial benefits that the Kohlis

provided to Bahel during the period that his assistance was given.

The Government focused on three U.N. contracts at trial: (1) a 1999 “digital trunking

contract”; (2) a 2000 “communications and information technology manpower contract”; and

(3) a 2002 “engineering manpower contract.” First, in 1999, the Kohli family’s company, TCIL,

bid for the 1999 digital trunking contract, but was found technically non-compliant. In response,

Bahel insisted that Peacekeeping officials hold tutorials with TCIL, which had provided the

4

Nishan was later sentenced to five years probation.

4

lowest bid, to see if it was possible to overcome technical deficiencies. When officials

determined the technical flaws could not be rectified, Bahel sent a letter objecting to the

determination. At trial, one official testified that “[i]t did appear to [him] and others within [his]

section at the time that [Bahel’s] involvement happened on a more regular basis with cases

related to TCIL.”

Next, in 2000, TCIL won a $30 million contract for manpower support, although the

company had no experience in that area. When Peacekeeping learned that TCIL was not

providing the Mission Subsistence Allowance (“MSA”) stipend to its employees, Peacekeeping

sought to cancel the contract. Bahel intervened. He had conversations with the Kohlis, during

which they discussed having workers sign letters of satisfaction stating that they had received the

MSA or its equivalent. Bahel, along with Nanak Kohli, then met with members of the U.N.’s

Office of Legal Affairs. During that meeting, Bahel never disclosed that he and Nanak were

“old friends” or that the two previously had “private conversations” regarding the contract.

Indeed, Bahel never told the other meeting participants that he “knew [Nanak] in any capacity

other than an official one.” Thus, the U.N. employees at the meeting believed that Bahel was

“acting on behalf of the United Nations” insofar as he was negotiating at the meeting. The

product of the meeting was that TCIL and the U.N. eventually agreed that these letters were

sufficient to avoid cancellation of the contract. Nishan Kohli would later testify that this

resolution did little more than maintain the status quo, because, pursuant to the plan the Kohlis

negotiated with Bahel, TCIL “put a lot of pressure on the workers” to sign the letters, by

“explain[ing] to them that if they continued to complain the contract could be canceled and they

would all be without jobs.” TCIL also threatened to “encash” the $2,000 “security deposit”

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required of all workers, “if they didn’t cooperate.”

Finally, in 2002, Peacekeeping asked the U.N. to provide engineers for its missions

around the world. Nishan testified that his family learned of this request from Bahel more than a

month before it was published on the U.N. website. He also testified that Bahel “notified [the

Kohlis] that it was coming . . . and that [they] should prepare for it.” Nishan testified that this

information was beneficial because the Kohli family’s new company, Thunderbird, “had not

actually registered with the UN so [they] had to go through that process which would take a bit

of time.” Nishan further testified that “in general early notification was helpful to [them]

because [they] weren’t really qualified or prepared to ultimately respond to this kind of

requirement, so any additional time that [they] could get was helpful.” In order to get

Thunderbird registered, Nishan stated that “[i]t was [their] intention . . . to basically fake

experience” with providing manpower services. Nishan testified that the Kohlis had discussed

this approach with Bahel, who they considered “an adviser.” Thunderbird’s registration was

thereafter approved.

When the Kohli family was preparing its bid, Bahel discussed with them the price to bid

in order to maximize the chances of obtaining the contract. Indeed, Nishan testified that “[t]he

very final numbers that I entered in by hand on the day of submission were read to me by Mr.

Bahel and I transcribed them over the telephone while talking to him.” In response to queries

from the Kohlis regarding their “lack of experience,” “Bahel advised [them] that [they] would

have to produce some form of experience or [they] wouldn’t be qualified.” Specifically, he told

them to “get, by whatever means, letters stating that [they] had, in fact, this experience.”

Later, when Peacekeeping raised concerns about Thunderbird’s references, Bahel “gave

6

[the Kohlis] the heads-up on that unofficially and advised [them] to get in touch with the

companies in advance and let them know that there would be a call coming from the U.N. and

. . . make sure [they] corroborate what [they] said in these letters.” Bahel instructed his

subordinates to check the references by sending faxes to the relevant addresses, but crippled their

ability to do so by allowing them to check on information provided only “on the letters of

reference themselves or in the Thunderbird financial proposal.” Bahel ultimately told

Peacekeeping that the references “checked [] out,” were “valid,” and that “this was a company

with vast international contracts of high dollar amount, and they were performing well around

the world.”

Bahel signed a request for audited financial statements, which Nishan Kohli testified

caused him some “concern,” because the Kohlis “didn’t have [audited financial] statements” for

Thunderbird. The Kohli family discussed the matter with Bahel, who recommended that the

Kohlis argue to the U.N. that Thunderbird was “a limited liability corporation and privately

owned and therefore not subject to requirements for audited statements.” Bahel repeated the

same argument internally to U.N. personnel, explaining that “U.S. law did not require limited

liability companies to furnish audited statements.” When Bahel eventually had to tell the Kohlis

that they would not be able to avoid submitting audited financial statements, he was

simultaneously working internally at the U.N. to limit their exposure to a full blown audit.

Although one of Bahel’s subordinates recommended that the U.N. request three years of

financial statements, on the ground that the U.N. “should have some history of Thunderbird

LLC’s financial performance, meaning financial audited statements (or tax return, if they don’t

have these),” Bahel requested only one year of audited statements from the company.

7

Nishan testified that he was away when the financial statements were due, so, he sent an

email to his brother, Ranjit Kohli, with “a draft cover letter . . . for Thunderbird, which [Nishan]

wanted [Ranjit] to put on top of the statements that [the Kohlis] would ultimately receive from

[the] account and sen[d] to the UN after discussing it with Mr. Bahel.” The email also contained

certain instructions regarding the submission of the statements. Specifically, Nishan instructed

Ranjit: “If possible check with SB if any changes need to be made” to the cover letter, before

submitting the statements.

On August 6, 2002, Peacekeeping sent a memo ranking Thunderbird “at the bottom of

the list of five” companies bidding for the engineering manpower contract. Peacekeeping found

that Thunderbird was only “marginally compliant” and “lack[ed] sufficient documentation as to

the company’s main product or line of work.” Among the concerns was the fact that

Thunderbird was not registered with Dun & Bradstreet. In response, Bahel “instructed [the

Kohlis] to immediately register with Dun & Bradstreet,” which they did.

Thunderbird was required to post a “performance bond” in order to qualify for the

contract. Ordinarily, a company would be required to post a $500,000 performance bond, which

was also what was specified in the U.N.’s request for proposals regarding this particular contract.

However, “when it came to[] Thunderbird the UN wanted an additional amount because [they]

were a new company fully registered with the UN and . . . were [only] marginally compliant with

the requirement[s]” for the contract. Nishan attended a meeting at the U.N. on this issue. He

testified that he “spoke to Mr. Bahel in advance of the meeting unofficially and [Bahel] briefed

[him] for what was going to happen in the meeting.” Specifically, Bahel “told [Nishan] that

[they] would be discussing the audited statements[,] that [they]’d be discussing an enhanced

8

performance bond.” Bahel also “gave [Nishan] a bit of insight on Ms. Redfren,” Bahel’s

subordinate, who was scheduled to attend the meeting, including on “her personality and her

work patterns.” After the meeting took place, Bahel called Nishan to say that the U.N. “had

asked for an additional $1 million bond.” Bahel also told Nishan “informally that [he] could

probably get away with 750 and said to offer half a million and to negotiate from there.”

Bahel received a number of financial benefits from the Kohli family in exchange for the

assistance he provided. Between 2001 and 2004, he received cash payments from $3,000 to

$5,000 on a near monthly basis. The Kohlis also gave Bahel a laptop computer worth more than

$2,500. An email sent by Ranjit to Nishan before Bahel had physically received the computer

stated “Sanjay doesn’t want [the laptop] to . . . mention Kohli anywhere.” Bahel received first-

class plane tickets to India and seats to the U.S. Open tennis tournament. The most significant

financial benefit was Bahel’s rental, between October 2003 and April 2005, and eventual

purchase, of the Kohli’s three-bedroom apartment a few blocks from the U.N. in the Dag

Hammarskjold Towers. The Kohlis initially charged Bahel $5,000 per month rent when he first

moved into the apartment, though the previous tenant had paid $8,600. Lowering the rent

further, Bahel paid no rent for three months of each year of the lease. After the Kohlis purchased

the apartment in 2003 for $1.24 million and invested $165,000 in renovations, they sold the

apartment to Bahel in May 2005 for $1.2 million. Bahel misrepresented both the amount of rent

and the purchase price of the apartment in communications to the board of the building. He also

later told the contractor who renovated the apartment to conceal the connection between Bahel

and the Kohlis. Nishan testified that, at that time, the market value of the apartment was

approximately $1.8 million.

9

Nishan Kohli received a federal subpoena in late 2005, at which point he “notified

[Bahel] of the subpoena,” who “expressed . . . concern.” Both then, and in subsequent

conversations, Bahel spoke with Nishan about ways to conceal their relationship. Specifically,

Bahel and Nishan “talked back and forth,” and Bahel “suggested that [the two] . . . get rid of a

few things that could be incriminating for [them],” including “files on [Nishan’s] laptop and

anything else that . . . might link [the two] together.” During these conversations, Bahel also

“suggested that [Nishan] just transfer the remaining files that [Nishan] would need from [his]

laptop to a new machine and dump the old one altogether, destroy it.”

In July 2006, the U.N.’s Procurement Fraud Task Force issued a report detailing a

financial relationship between Bahel and the Kohlis. The U.N. referred the report to the United

States Attorney’s Office. On October 6, 2006, a grand jury returned a sealed indictment against

Bahel and Nishan Kohli. The indictment contained six counts. Counts One and Two charged

Bahel with defrauding the U.N. of its intangible right to his honest services and using the mails

in furtherance of that scheme, in violation of 18 U.S.C. §§ 1341 and 1346. Counts Three and

Four charged Bahel with defrauding the U.N. of its intangible right to his honest services and

using interstate wire communications to further that scheme, in violation of 18 U.S.C. §§ 1343

and 1346. Count Five charged Bahel with participating in a conspiracy to commit mail and wire

fraud, and to corruptly accept things of value with an intent to be influenced or rewarded with

respect to the award of U.N. contracts to companies associated with the Kohlis, in violation of 18

U.S.C. § 371. Count Six charged Bahel with the substantive offense of corruptly accepting and

soliciting various things of value with the intent to be influenced or rewarded with respect to the

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award of U.N. contracts to the Kohli’s companies, in violation of 18 U.S.C. § 666(a)(1)(B).5

In an October 31, 2006 letter to the U.N., the U.S. Attorney’s Office stated that it had

“sufficient evidence to bring federal charges against [Bahel] relating to his receipt of things of

value from in or about May 2003 through in or about May 2005 with the intent to be influenced

and rewarded in connection with his duties as a procurement officer at the United Nations,” and

requested that the “United Nations waive immunity for United Nations employee Sanjaya

Bahel.” The United Nations agreed. In a November 1, 2006 letter from the U.N. Under-

Secretary-General for Legal Affairs, the organization stated:

In this case, the Secretary-General has no objection to the waiver of Mr. Bahel’s

immunity from legal process. . . . [T]he Secretary General has waived, Under Article

V, Section 20 of the [U.N.] Convention, the immunity from legal process of Mr.

Bahel for purpose of the criminal proceedings initiated by the United States Attorney

for the Southern District of New York, for crimes allegedly committed during his

employment as a procurement officer at the [U.N.] from in or about May 2003

through in or about May 2005.

A three-week trial in May and June 2007 resulted in Bahel’s convictions on all counts.

He was sentenced principally to 97 months’ imprisonment, ordered to pay $932,165.39 in

restitution, and to forfeit $103,500 in currency and title in the Manhattan apartment. The final

order of forfeiture was entered on April 20, 2010. Bahel satisfied the restitution portion of the

judgment as of July 1, 2011. Bahel has since been released on bail.

* * *

Bahel raises six principal issues on this appeal. In his moving brief, Bahel argues first

that the district court lacked jurisdiction to entertain his prosecution because the U.N. did not

5

All counts other than the conspiracy count also charged a violation of 18 U.S.C. § 2,

which sets forth certain conditions under which an individual may be held liable as a principal.

11

effectively waive his immunity under the Convention on Privileges and Immunities of the United

Nations (the “Convention”), 21 U.S.T. 1418, which was adopted by the U.N. General Assembly

on February 13, 1946, and acceded to by the United States on April 29, 1970. Bahel next argues

that he was improperly convicted under 18 U.S.C. § 666, because the United States’ treaty

obligation to the United Nations is not a “federal program” to which the United States provides

assistance “benefits” prerequisite to the statute’s application. Bahel further argues that district

court erred in its charge to the jury on Section 666, because the court failed to instruct the jury

that it had to find “corrupt intent” before it could adjudge Bahel guilty of violating the statute.

With respect to the honest services conviction, Bahel maintains that Congress’s definition of

“honest services” does not reach foreign workers at the United Nations, and even if it does, the

evidence was insufficient to support his conviction for honest services fraud. Finally, Bahel

believes that the district court committed error in enhancing his sentence upon a finding that he

was a “public official” and then miscalculated the value of the “rewards” he received as a result

of the offenses underlying the conviction.

Between the time Bahel filed his moving brief (December 23, 2008) and his reply brief

(July 15, 2009), the United States Supreme Court granted certiorari in United States v. Black,

530 F.3d 596 (7th Cir. 2008), cert. granted, 129 S. Ct. 2379 (May 18, 2009), to resolve the

question of whether a fact finder must find that a fraudulent scheme contemplated economic

harm to a victim prerequisite to a finding of liability for violating the honest services fraud

statute. Though he had not raised the underlying substantive arguments previously, Bahel

argued at length in his reply brief that the outcome in Black would bear on his appeal, because

there was some question as to whether the Government was required to prove that his scheme to

12

defraud the U.N. caused his victim economic harm. We first heard oral argument in this case on

July 8, 2009, but held the appeal in abeyance pending the Supreme Court’s determination of the

merits of Black.

In the meantime, the Supreme Court granted certiorari in two cases presenting related

issues: United States v. Weyhrauch, 548 F.3d 1237 (9th Cir. 2008), cert. granted, 129 S. Ct.

2863 (2009) (question presented: “Whether, to convict a state official for depriving the public of

its right to the defendant’s honest services through the non-disclosure of material information, in

violation of the mail-fraud statute (18 U.S.C. §§ 1341 and 1346), the government must prove that

the defendant violated a disclosure duty imposed by state law.”), and United States v. Skilling,

554 F.3d 529 (5th Cir. 2009), cert. granted, 130 S. Ct. 393 (2009) (question presented in relevant

part: “Whether the federal ‘honest services’ fraud statute, 18 U.S.C. § 1346, requires the

government to prove that the defendant's conduct was intended to achieve ‘private gain’ rather

than to advance the employer’s interests, and, if not, whether § 1346 is unconstitutionally

vague.”). The Supreme Court heard oral argument in Black, Weyhrauch and Skilling, but issued

an opinion only in connection with the substantive issue presented by Skilling v. United States.

See 130 S. Ct. 2896, 2912 n.9 (2010) (vacating and remanding Black and Weyhrauch in light of

Skilling). The thrust of that opinion, with respect to the honest services fraud holding, was that

honest services fraud under Section 1346 is limited to a bribery and kickback “core,” and thus

does not include undisclosed conflicts of interest, such as those held by Jeffrey Skilling. See 130

S. Ct. at 2907.

Following the Supreme Court’s decision, which issued on June 24, 2010, both parties

submitted supplemental briefing to this Court. Bahel, in particular, raised a number of new

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arguments for the first time in his supplemental brief. These related principally to the

sufficiency of the indictment and jury charge. With respect to the jury charge, Bahel argued that

the district court’s instruction was flawed, even though it was a bribery instruction, because it

omitted “the essence of bribery: corrupt intent and a quid pro quo agreement.” The Government

urged that Skilling had no impact on Bahel’s conviction, in part because the district court gave a

bribery instruction, and Bahel was clearly convicted on a bribery theory of liability. We heard

oral argument on January 13, 2011, regarding the impact of Skilling on this case. Concluding

now, as we do, that neither Skilling nor any other relevant precedent compels a contrary

conclusion, we affirm the judgment of conviction entered by the district court.

DISCUSSION

I. Immunity and Waiver

U.N. officials are granted immunity from prosecution pursuant to Article V, Section 18

of the Convention on Privileges and Immunities of the United Nations (the “U.N. Convention”),

Feb. 13, 1946, 21 U.S.T. 1418, entered into force with respect to the United States Apr. 29, 1970,

which states in relevant part that U.N. officials are “immune from legal process in respect of

words spoken or written and all acts performed by them in their official capacity.” Id. art. V,

§ 18(a). Section 20 of the Convention provides that: “Privileges and immunities,” such as

immunity from prosecution, “are granted to officials in the interests of the United Nations, and

not for the personal benefit of the individuals themselves.” Id. art. V, § 20. Only the Secretary

General may waive the immunity of a U.N. official. Id.

Bahel argued for the first time after his trial that the U.N. had not waived his immunity

for the subject matter of the prosecution. Bahel bases this claim in part on a contention that the

14

Diplomatic Relations Act (“DRA”), 22 U.S.C. § 254d, provides him with the right to raise a

claim of immunity. However, as the Government points out, the DRA applies only to diplomats,

and not to other officials, like Bahel. Instead, the International Organization Immunities Act

(“IOIA”), 59 Stat. 669, 22 U.S.C. §§ 288 et seq., governs Bahel’s right to raise a claim of

immunity—the IOIA expressly applies to “officers and employees of [international]

organizations,” and states that such individuals “shall be immune from suit and legal process

relating to acts performed by them in their official capacity and falling within their functions as .

. . officers, or employees except insofar as such immunity may be waived by the . . . international

organization concerned.” Id. § 288d(b).

Bahel further contends that Article II, Section 2 of the U.N. Convention would only

allow for his prosecution had there been an express waiver of his immunity by the U.N., which

he maintains never occurred. Article II, Section 2 provides that “[t]he United Nations . . . shall

enjoy immunity from every form of legal process except insofar as in any particular case it has

expressly waived its immunity.” U.N. Convention art. II, § 2, 21 U.S.T. 1422 (emphasis added).

Although the plain language of this provision suggests otherwise, Bahel contends that it applies

both to the U.N. as an organization and to its employees. But see id. art. V, § 18 (addressing

immunity for certain U.N. employees deemed “officials”). From this faulty assumption, Bahel

deduces that a waiver of immunity by the Secretary General as to an employee or official must

be express in order to be valid—because the U.N. as an organization may only waive its own

immunity (as conferred on the organization) expressly. While Bahel maintains that his immunity

was expressly waived as to conduct between May 2003 and May 2005, he also maintains that the

charges against him relate only to conduct that occurred prior to May 2003, for which there was

15

no express waiver, and accordingly, Bahel argues that those charges should have been dismissed

for lack of subject matter jurisdiction. We disagree.

As a threshold matter, we note that the plain language of Article II leaves no doubt that

the U.N. can only waive immunity for itself, as an organization, expressly. See id. art. II, § 2

(“The United Nations . . . shall enjoy immunity from every form of legal process except insofar

as in any particular case it has expressly waived its immunity.” (emphasis added)); see also

Brzak v. United Nations, 597 F.3d 107, 112 (2d Cir. 2010) (recognizing that the U.N. must

expressly waive immunity). However, Article V, which covers immunity for “officials,” lacks

that same plain language. Instead, Article V Section 20 states that: “Privileges and immunities

are granted to officials in the interests of the United Nations and not for the personal benefit of

the individuals themselves. The Secretary-General shall have the right and the duty to waive the

immunity of any official in any case where, in his opinion, the immunity would impede the

courts of justice and can be waived without prejudice to the interests of the United Nations.”

U.N. Convention art. V, § 20.

Bahel’s contention that an express waiver is required for officials is based largely on case

law interpreting Article II, which is limited to the U.N.’s immunity as an organization—not

Article V, which covers officials. See, e.g., Emmanuel v. United States, 253 F.3d 755, 756 (1st

Cir. 2001) (noting that Article II immunity would apply to the U.N. Mission in Haiti, in light of

the U.N.-Haiti Status of Forces Agreement that extended Article II immunity to the Mission);

Askir v. Boutros-Ghali, 933 F. Supp. 368, 371, 373 (S.D.N.Y. 1996) (dismissing the complaint

sua sponte as against the U.N. organization because Article II rendered the U.N. immune from

suit). Further, the only two cases cited by Bahel that directly analyze Article V are wholly

16

inapposite. One involved a situation where a party failed to argue that immunity had been

waived. See De Luca v. United Nations Org., 841 F. Supp. 531, 535 (S.D.N.Y. 1994) (“Here,

plaintiff has not alleged that the U.N. has waived the immunity of the[] four [individual]

defendants.”). The other involved a situation wherein the U.N. had expressly declined to waive

immunity for one of its employees. See McGehee v. Albright, 210 F. Supp. 2d 210, 218 n.7

(S.D.N.Y. 1999) (noting that the Under-Secretary-General for Legal Affairs for the United

Nations “informed the Court that the United Nations is not waiving its immunity in this action as

to defendant [Secretary-General Kofi] Annan.”).

The absence of an express waiver requirement in Article V, coupled with a lack of

precedent to the contrary, leaves us unable to conclude that Article V unequivocally requires an

express waiver in order to be effective. Accord Restatement (Third) of Foreign Relations Law §

456(1)(a), (2)(c) and cmt. b (1987) (explaining that in the absence of an express waiver

requirement, waiver by a state can be effected “either expressly or by implication”); compare

also IOIA, 22 U.S.C. § 288a(b) (“International organizations” are immune from suit in federal

courts “except to the extent that such organizations expressly waive their immunity. . . .”

(emphasis added)), with id. § 288d(b) (“[O]fficers and employees of [international] organizations

shall be immune from suit and legal process . . . except insofar as such immunity may be waived

. . . .” (emphasis added)). This determination, however, does not alter the outcome of this case,

because we conclude that the U.N. expressly waived Bahel’s immunity.

In response to the Government’s request that the U.N. “waive any claim of immunity,”

the U.N. sent a letter to the Government, dated November 1, 2006, stating: the “Secretary-

General has no objection to the waiver of Mr. Bahel’s immunity from legal process.” The letter

17

further stated that the U.N. waived “the immunity from legal process of Mr. Bahel for the

purpose of the criminal proceedings initiated by the United States Attorney for the Southern

District of New York, for crimes allegedly committed during his employment as a procurement

officer at the UN from in or about May 2003 through in or about May 2005.”

Although the letter did include specific dates, that is “in or about May 2003” to “in or

about May 2005,” we believe that the circumstances surrounding the U.N.’s participation in

Bahel’s investigation and prosecution make pellucid that reference to the dates in the letter was

intended only to identify the criminal proceedings that had been initiated by the United States

Attorney for the Southern District of New York—not to limit the scope of the waiver. It is

significant that the U.N. itself referred the matter of Bahel’s prosecution to the United States

Attorney’s Office and cooperated at all stages of the prosecution, including by providing relevant

documents and waiving immunity for several employees who testified at Bahel’s trial. Further,

in a second letter dated January 14, 2008, the U.N. confirmed that its first letter was intended

fully to waive Bahel’s immunity. Indeed, at no point did the U.N. object to the scope of the

proceeding.

Even if there had been no express waiver of Bahel’s immunity by the U.N., Bahel himself

impliedly waived any claim of immunity when he participated fully in the criminal proceedings

without raising the issue of immunity until after the trial. See Richardson v. Fajardo Sugar Co.,

241 U.S. 44, 46-47 (1916) (holding that a defendant who appeared, filed answers to an original

and several amended complaints, set a trial date, and first raised the defense of sovereign

immunity eights months after the action began had waived the defense). Though there is limited

case law addressing waiver under the U.N. Convention, which is the operable document in the

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case sub judice, we have previously stated that diplomatic immunity from prosecution may be

waived. See United States v. Lumumba, 741 F.2d 12 (2d Cir. 1984). In Lumumba, we

explained: “Even if by a stretch of the imagination one could assume the existence of such status

[diplomatic immunity], it was waived in this case. Lumumba, a member of the Michigan bar,

freely chose to appear pro hac vice in the United States District Court to represent a criminal

defendant. It would be anomalous to believe that he could participate in a trial as counsel . . .

without subjecting himself to the district court’s contempt procedures.” Id. at 15.

At least two of our sister circuits have expressed similar views. In Holloway v. Walker,

800 F.2d 479 (5th Cir. 1986), the Fifth Circuit explained that although it did not believe that

Appellant was entitled to plead diplomatic immunity, to the extent he was, “this right was

waived by his action in withholding such plea until the unsuccessful termination of such

litigation.” Id. at 481. More recently, in United States v. Campa, 529 F.3d 980 (11th Cir. 2008),

the defendant, as here, waited until after the trial to raise the issue of immunity, and then argued

that the district court had lacked jurisdiction to entertain an action against him in the first

instance. Id. at 1001. Although defendant’s argument in Campa was based on his purported

sovereignty under the Foreign Sovereign Immunities Act, 28 U.S.C. §§ 1330, 1332, 1391(f),

1441(d), 1602-11, which expressly states that waiver can be implied, id. § 1605(a)(1) (“A

foreign state shall not be immune from the jurisdiction of courts of the United States or of the

States in any case—(1) in which the foreign state has waived its immunity either explicitly or by

implication, notwithstanding any withdrawal of the waiver which the foreign state may purport

to effect except in accordance with the terms of the waiver . . . .”), the underlying conduct at

issue in Campa nevertheless informs our analysis. That is, in that case, the Eleventh Circuit

19

emphasized that the defendant had waived his right to invoke immunity through his “long and

active participation in the action.” 529 F.3d at 1001 (citing Richardson, 241 U.S. at 47). Here

too, Bahel was present throughout the pendency of his prosecution and never raised the defense

of immunity. The time to raise the issue has long since passed. Having participated fully in the

action, he is now bound by its outcome. Accordingly, although we find that the U.N. effectively

and expressly waived Bahel’s immunity in its letter to the Government, we also hold in the

alternative that Bahel waived his right to invoke immunity by waiting until after the trial to raise

the issue.

II. 18 U.S.C. § 666

Having resolved the question of immunity from prosecution, we turn to Bahel’s

substantive arguments regarding the bases of his conviction. Bahel was charged and convicted

under Count Six of violating 18 U.S.C. § 666(a)(1)(B) by accepting compensation as a “

reward” for the favors he provided to the Kohlis. With respect to this count, Bahel first argues

that “[n]o reading of [18 U.S.C. § 666] could plausibly be extended to the charges in this case,”

because “[t]he United States’ membership in the United Nations is not a ‘federal program’ under

[Section] 666(b), and the contributions made to the United Nations under the United States treaty

obligation in the U.N. Convention and Charter is not a ‘benefit’ or ‘form of Federal assistance’

under that same sub-section.” Bahel argues accordingly that Section 666 cannot reach the

conduct at issue in this case. We disagree.

A. Application of Section 666 to the U.N.

Title 18 U.S.C. § 666 makes it a crime for “an agent of an organization” to “corruptly

solicit[] or demand[] for the benefit of any person, or accept[] or agree[] to accept, anything of

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value from any person, intending to be influenced or rewarded in connection with any business,

transaction, or series of transactions of such organization . . . involving any thing of value of

$5,000 or more[.]” To prosecute an organization’s agent under 18 U.S.C. § 666, the organization

must “receive[], in any one year period, benefits in excess of $10,000 under a Federal program

involving a grant, contract, subsidy, loan, guarantee, insurance, or other form of Federal

assistance.” 18 U.S.C. § 666(b) (emphasis added). In United States v. Zyskind, 118 F.3d 113 (2d

Cir. 1997), we construed a “Federal program” to mean “there must exist a specific statutory

scheme authorizing the Federal assistance in order to promote or achieve certain policy

objectives.” Id. at 115 (internal quotation marks omitted) (holding that 38 U.S.C. §§ 301 et seq.

was a federal program insofar as it authorized payment of federal benefits to United States’

veterans). Thus, there is a “federal program” for the purposes of Section 666 whenever there is a

specific statutory scheme that authorizes payments thereunder for the purposes of promoting or

achieving the policy objectives of the United States.

The Supreme Court has provided additional guidance on determining what constitutes a

“benefit” for the purposes of Section 666. In Fischer v. United States, 529 U.S. 667 (2000), the

defendant was convicted under Section 666 for defrauding a hospital that had received Medicare

funds. Id. at 670. On appeal, the defendant argued that the Medicare program provided

“benefits” only to patients who received subsidized medical care, and not to hospitals, which

merely received reimbursements from the government for services rendered. Id. at 676. The

Supreme Court disagreed, noting that:

To determine whether an organization participating in a federal

assistance program receives “benefits,” an examination must be

undertaken of the program’s structure, operation, and purpose. The

inquiry should examine the conditions under which the organization

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receives the federal payments. The answer could depend, as it does

here, on whether the recipient’s own operations are one of the reasons

for maintaining the program.

Id. at 681. Applying this approach, the Supreme Court determined that Medicare payments

constituted a “benefit” because the federal funds provided an advantage for both the patient who

received the medical care, as well as for the hospital; such payments ensured the hospital’s

continued viability and thus advanced the policy objectives of the federal government. Id. at

679-80. The Court wrote: “the payments might have similarities to payments an insurer would

remit to a hospital quite without regard to the Medicare program,” id. at 679, in which case they

might be considered exempt under Section 666(c), which removes from the statute’s coverage

any “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). However, the Government would not make

any of the payments at issue in Fischer “unless the hospital complie[d] with its intricate

regulatory scheme,” 529 U.S. at 679. Thus, the Supreme Court noted, “[t]he payments are made

not simply to reimburse for treatment of qualifying patients but to assist the hospital in making

available and maintaining a certain level and quality of medical care, all in the interest of both

the hospital and the greater community.” Id. at 679-80. The payments, therefore, could be

considered “benefits” subject to the strictures of Section 666.

On the facts of this case, the United Nations Participation Act (“U.N. Participation Act”),

22 U.S.C. § 287e, which authorizes payment of the United States’ dues to the U.N., can be

considered to establish a “benefit” program much as the Medicare Act was considered to

establish a benefit program in Fischer. Through the U.N. Participation Act, Congress has

authorized appropriations of “such sums as may be necessary for the payment by the United

22

States for its share of expenses of the Organization as apportioned by the General Assembly.”

22 U.S.C. § 287e. Because Congress authorized payments through the U.N. Participation Act,

the United States’ payments to the U.N. are made are made under “a specific statutory scheme”

that aims to advance the government’s foreign policy objectives, specifically, the policy of

participating in collective endeavors to secure the benefits of world peace. Accord Zyskind, 118

F.3d at 115. Further indicative of a benefits program, the United States’ funding of the U.N.,

like the Medicare funding at issue in Fischer, is subject to several conditions designed in part to

promote broader objectives related to national security while ensuring that any money

contributed to the U.N. is responsibly expended and accounted for. Cf. Fischer, 529 U.S. at 677-

78. For example, through the United Nations Reform Act of 1999, see Consolidated

Appropriations Act 2000, Pub. L. No. 106-113, §§ 901-952, 113 Stat. 1501, 1501A-475-485

(1999), Congress established a number of restrictions that are imposed on the U.N. as a condition

of federal funding. These include (1) requiring that the U.N. maintain a balanced budget, see

§ 941(b)(3); (2) requiring that the U.N. conduct evaluations of its programs and make

recommendations about which programs should be terminated, see id. § 941(b)(4); (3) capping

the growth of the budgets of U.N. agencies, see id. § 941(b)(8), (10); (4) preventing the U.N.

from borrowing from outside lenders, see id. § 921(a)(7)(A); and (5) limiting the United States’

contribution to the U.N. to an amount below what the U.N. had assessed, see id. §§ 931(b),

941(b)(1).

The U.N. Reform Act also sets forth a host of anti-corruption measures that the U.N. is

required to implement. For example, (1) each U.N. agency must have an inspector general; (2)

the U.N. must maintain whistle-blower protections; (3) there must be procedures in place to

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ensure that the U.N. complies with the Inspector Generals; (4) the U.N. must permit member

states to access any report issued by the Inspector Generals; and (5) the U.N. must guarantee that

the United States General Accounting Office has access to the U.N.’s financial data in order to

perform audits of U.N. operations. See id. § 941(b)(2), (6). The U.N. Reform Act further

regulates the U.N.’s staff and requires the U.N. to implement policies to ensure that all staff are

appointed on the basis of merit, maintain a code of conduct, require senior employees to make

financial disclosures, impose rules against nepotism, and maintain a personnel evaluation

system. See id. § 941(b)(7).

Finally, in addition to the U.N. Reform Act, Congress has adopted certain other measures

designed to regulate the U.N.’s activities. These include the Kassebaum-Solomon Amendment

to the Foreign Relations Authorization Act for fiscal years 1986 and 1987, which required the

U.N. to change its internal voting mechanisms to ensure that voting rights were proportionate to

the financial contributions of each member state and to alter the previous requirement that U.N.

staff return their salaries to their home governments. See Foreign Relations Authorization Act,

Fiscal Years 1986 and 1987, Pub. L. No. 99-93, §§ 143, 151, 99 Stat. 405, 424, 428 (1985)

(codified as notes to 22 U.S.C. § 287e); see also Department of State Authorization Act, Fiscal

Years 1982 and 1983, Pub. L. No. 97-241, § 109, 96 Stat. 273, 276 (1982) (codified as note to 22

U.S.C. § 287r) (prohibiting contributions to the United Nations Educational, Scientific and

Cultural Organization “if that organization implements any policy or procedure . . . to censor or

otherwise restrict the free flow of information within or among countries . . . .”); Department of

State Authorization Act, Fiscal Years 1984 and 1985, Pub. L. No. 98-164, § 115, 97 Stat. 1017,

1021 (1983) (codified as note to 22 U.S.C. § 287) (providing that the United States shall not

24

participate in the U.N. if Israel is illegally expelled as a member organization); Departments of

Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 2002,

Pub. L. No. 107-77, § 404, 115 Stat. 748, 789 (2001) (codified as note to 22 U.S.C. § 287e)

(prohibiting the U.N. from establishing a system of taxation for the internet or international

currency transactions); Foreign Relations Authorization Act, Fiscal Years 1994 and 1995, Pub.

L. No. 103-236, § 410, 108 Stat. 382, 454 (1994) (codified as note to 22 U.S.C. § 287e)

(prohibiting the U.N. from granting diplomatic recognition to entities that do not meet the

internationally recognized attributes of statehood); Foreign Relations Authorization Act, Fiscal

Years 1990 and 1991, Pub. L. No. 101-246, § 414, 104 Stat. 15, 78 (1990) (codified as note to 22

U.S.C. § 287e) (providing that dues paid by the United States will not be available to the U.N. if

it accords the Palestine Liberation Organization the same standing as a member state).

The above restrictions, which are tied directly to funding, make clear that the United

States’ payment of dues to the U.N., similar to Medicare funding, “provide[s] benefits extending

beyond isolated, point-of-sale . . . transactions,” Fischer, 529 U.S. at 681 (emphasis added).

That is, the U.N. is not a contractor and funding to the U.N. is not merely payment for goods and

services provided to the United States. Rather, the funding provided to the U.N. by the United

States fulfills “significant purposes beyond performance of an immediate transaction,” including

the advancement of policy goals. Id. at 680. And here, as in Fischer, the “Government has a

legitimate and significant interest in prohibiting financial fraud or acts of bribery being

perpetuated” at the organization receiving federal funds. Id. at 681.

Bahel argues that, regardless of whether the United States’ payments to the U.N. can be

considered “benefits,” the payment of dues to the U.N. cannot constitute a “federal program” as

25

that phrase is used in Section 666, because the United States agreed in a treaty (i.e., the United

Nations Charter) to make such payments to the U.N. However, there is no question that a federal

statute duly enacted by Congress, the U.N. Participation Act, is what authorizes the payment of

the United States’ dues to the U.N. Under the principles articulated in Zyskind, this is sufficient

to classify the U.N. Participation Act as a “federal program.” See 118 F.3d at 115.

Moreover, as a constitutional matter, the United States cannot provide any funds to the

U.N. without an express and independent authorization by Congress. See U.S. Const. art. I, § 8,

cl. 1. Indeed, in order for a treaty to be self-executing, and thus not require independent action

from Congress, the treaty’s terms must reflect such an intention by both the President, who

negotiated it, and the Senate, which provided its advice and consent. See Medellin v. Texas, 552

U.S. 491, 519 (2008) (distinguishing Comegys v. Vasse, 1 Pet. 193 (1828), as “stand[ing] only

for the modest principle that the terms of a treaty control the outcome of a case”); accord Brzak

v. United Nations, 597 F.3d 107, 111 (2d Cir. 2010) (“In determining whether a treaty is self-

executing, we look to the text, the negotiation and drafting history, and the postratification

understanding of the signatory nations.”); Restatement (Third) of Foreign Relations Law § 111

cmt. i (“Constitutional restraints on self-executing character of international agreement: An

international agreement cannot take effect as domestic law without implementation by Congress

if the agreement would achieve what lies within the exclusive law-making power of Congress

under the Constitution. Thus, an international agreement providing for the payment of money by

the United States requires an appropriation of funds by Congress in order to effect the payment

required by the agreement.”).

The text of Articles 17 and 19 of the U.N. Charter reflect no such understanding. Article

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17 provides that “[t]he expenses of the [U.N.] shall be borne by the Members as apportioned by

the General Assembly.” U.N. Charter art. 17, para. 2. Article 19 provides that the remedy for a

breach of the obligation to pay dues is the loss of a member’s vote in the General Assembly. Id.

art. 19. As the Government points out, the fact that the U.N. Charter provides for a diplomatic

remedy in the event of a nation’s non-compliance with its Charter obligations strongly suggests

that the dues provision of the United Nations Charter was not meant to be self-executing.

Further, as the Supreme Court explained in Medellin v. Texas, the absence of mandatory

language (i.e., “must” or “shall”) indicates that a particular provision is not a self-executing

directive. 552 U.S. at 508 (failure to include mandatory terms in Article 94 of the U.N. Charter,

including incorporation of directives “shall” or “must,” indicated that Article 94 was not a

“directive”).

Accordingly, we conclude that the payment of the United States’ dues to the U.N. is a

“Federal program,” because there is a specific statutory scheme authorizing the assistance, i.e.,

the U.N. Participation Act. Further, the U.N. Participation Act plainly seeks to promote the

United States’ foreign policy objectives, and thus is properly considered a “benefit” subject to

the strictures of 18 U.S.C. § 666. Therefore, we reject Bahel’s argument that Section 666 cannot

reach employees of the United Nations.

B. Bahel’s As-Applied Challenge to Section 666

Bahel challenges Section 666 on as-applied constitutional grounds, arguing that the

statute is unconstitutional as applied to him because Congress did not exercise its spending

power to bind the United States to its treaty obligations under the U.N. Charter. As explained

above, Bahel’s as-applied challenge to Section 666 is a variation on his argument that the U.N.

27

does not receive benefits under a federal program because the United States is obligated by

treaty to pay U.N. dues. This argument fails for one fundamental reason: Congress has the

power to grant or revoke federal funding to the U.N. based on its independent policy judgments;

therefore, the allocation of federal funding to the U.N. is an exercise of the spending power. See

Sabri v. United States, 541 U.S. 600, 605 (2004). It is well-settled that “Congress has authority

under the Spending Clause to appropriate federal moneys to promote the general welfare, and it

has corresponding authority under the Necessary and Proper Clause to see to it that taxpayer

dollars appropriated under that power are in fact spent for the general welfare, and not frittered

away in graft or on projects undermined when funds are siphoned off or corrupt public officers

are derelict about demanding value for dollars.” Id. (internal citations omitted). Pursuant to this

principle, a number of officials of non-governmental organizations have been prosecuted under

Section 666 in various jurisdictions across the country. See, e.g., Fischer v. United States, 529

U.S. 667 (2000) (executive of medical consulting firm); United States v. Hildenbrand, 527 F.3d

466 (5th Cir. 2008) (president of construction company doing business with a non-profit housing

organization); United States v. Buck, 324 F.3d 786 (5th Cir. 2003) (executive of non-profit rural

development organization); United States v. Edgar, 304 F.3d 1320 (11th Cir. 2002) (executive

officers of hospital); United States v. Dubón-Otero, 292 F.3d 1 (1st Cir. 2002) (lawyer and

doctor who were directors for health services corporation); United States v. Neighbors, 23 F.3d

306 (10th Cir. 1994) (pharmacist at clinic run by charitable community health organization). We

see no principled basis on which to distinguish congressional authorization of the payment U.N.

dues from federal monies flowing to these non-governmental organizations. Accordingly,

Bahel’s as-applied constitutional challenge to Section 666 fails.

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III. Honest Services Fraud

Bahel next argues that he was improperly charged with honest services fraud for a

number of different reasons, each of which is outlined below. In relevant part, the indictment

included four counts of honest services fraud: Counts One and Two charged Bahel with

defrauding the U.N. of its intangible right to his honest services facilitated by his use of the mails

in violation of 18 U.S.C. §§ 1341 and 1346, and Counts Three and Four charged Bahel with

defrauding the U.N. of its intangible right to his honest services facilitated by his use of

interstate wire communications, in violation of 18 U.S.C. §§ 1343 and 1346.

In Skilling v. United States, 130 S. Ct. 2896 (2010), the decision for which we held this

appeal in abeyance, the Supreme Court considered the constitutionality of the honest services

fraud statute codified at 18 U.S.C. § 1346. That case involved the actions of Jeffrey Skilling, a

longtime Enron officer, and Enron’s chief executive officer from February until August 2001

(when he resigned). Id. at 2907. During his time at Enron, Skilling was alleged to have

“profited from the fraudulent scheme . . . through the receipt of salary and other bonuses, . . . and

through the sale of approximately $200 million in Enron stock, which netted him $89 million.”

Id. at 2934 (internal quotation marks). Less than four months after Skilling resigned from Enron,

the company declared bankruptcy. Id. at 2907. The indictment charged Skilling “with

conspiracy to commit securities and wire fraud; in particular, it alleged that Skilling had sought

to ‘depriv[e] Enron and its shareholders of the intangible right of [his] honest services.’” Id. at

2908. Relevant to the honest services charge, Skilling was alleged to have “conspir[ed] to

defraud Enron’s shareholders by misrepresenting the company’s fiscal health, thereby artificially

inflating its stock price.” Id. at 2934. Notably, however, “Skilling [never] solicited or accepted

29

side payments from a third party in exchange for making these misrepresentations.” Id.

In determining the scope and constitutionality of the honest services statute, the Supreme

Court adopted a limiting construction, explaining that “[t]o preserve the statute without

transgressing constitutional limitations,” Section 1346 could not reach Skilling’s conduct. Id. at

2931. Therefore, the Court held that Section 1346 criminalizes only “fraudulent schemes to

deprive another of honest services through bribes or kickbacks. . . .” Id. at 2928. Defining the

scope of “bribes and kickbacks,” the Supreme Court wrote that the statute’s “prohibition on

bribes and kickbacks draws content not only from the pre-McNally case law, but also from

federal statutes proscribing—and defining—similar crimes.”4 Id. at 2933 (citing 18 U.S.C. §§

201(b), 666(a)(2); 41 U.S.C. § 52(2)). In reaching this holding, the Supreme Court rejected the

Government’s argument that § 1346 should also encompass “undisclosed self-dealing by a

public official . . . [such as] the taking of official action by the [official] that furthers his own

undisclosed financial interests while purporting to act in the interests of those to whom he owes a

fiduciary duty.” Id. at 2932 (internal quotation marks and citation omitted). Because the

Government in Skilling did not allege that Skilling accepted bribes or kickbacks, but rather that

he was engaged in a pattern of self-dealing, the Supreme Court determined that Skilling’s honest

services fraud conviction was flawed and vacated the Fifth Circuit’s affirmance of Skilling’s

conspiracy conviction. Id. at 2934-35.

Bahel argues for the first time on appeal that Section 1346 cannot apply to foreign

4

In McNally v. United States, 483 U.S. 350 (1987), the Supreme Court invalidated the

long-accepted common law theory of mail and wire fraud relating to the deprivation of

“intangible rights.” The year after McNally was decided, Congress enacted Section 1346, which

effectively overruled McNally and reinstated the line of cases preceding it. See United States v.

Rybicki, 354 F.3d 124, 136-37 (2d Cir. 2003) (en banc).

30

employees of the U.N. Specifically, he asserts that Section 1346 has only been applied to

government or private sector employees, not employees of international organizations. See, e.g.,

United States v. Ganim, 510 F.3d 134 (2d Cir. 2007) (applying Section 1346 to former mayor of

Bridgeport, Connecticut). In support of his argument, Bahel cites United States v. Giffen, 326 F.

Supp. 2d 497 (S.D.N.Y. 2004), United States v. Lazarenko, No. 00 Cr. 284 (N.D. Cal. May 7,

2004), and this Court’s decision in United States v. Rybicki, 354 F.2d 124 (2d Cir. 2003) (en

banc). Although we agree with Bahel that Section 1346 is not limitless, we hold that it is broad

enough to encompass Bahel’s actions and neither Giffen nor Lazarenko nor Rybicki provides

otherwise.

Bahel argues that this Court’s holding in Rybicki stands for the proposition that honest

services fraud is effectively limited to the identity of the actors prosecuted in the pre-McNally

caselaw. That is, he states that because “[n]one of [the pre-McNally] cases extended an ‘honest

services’ theory of fraud to an international setting involving foreign nationals,” Rybicki means

that he, as a foreign national, cannot be prosecuted for honest services fraud under Section 1346.

We disagree. Rybicki, like Skilling, stands for the proposition that fraud actionable under

Section 1346 is limited to the nature of the offenses prosecuted in the pre-McNally cases (i.e.,

bribery and kickback schemes)—not the identity of the actors involved in those cases. See

Rybicki, 354 F.3d at 138-44; see also Skilling, 130 S. Ct. at 2931 (“To preserve the statute

without transgressing constitutional limitations, we now hold that § 1346 criminalizes only the

bribe-and-kickback core of the pre-McNally case law.” (emphasis in original)).

United States v. Giffen is equally unhelpful to Bahel’s position. That case involved a

United States citizen who was charged with honest services fraud for bribing a government

31

official from the Republic of Kazakhstan, resulting in the deprivation of honest services for

Kazakh citizens. 326 F. Supp. 2d at 499-500. The district court, finding a “total absence of . . .

precedent supporting the Government’s overseas application of the intangible rights theory,” id.

at 505, ruled that “Congress did not intend that the intangible right to honest services encompass

bribery of foreign officials in foreign countries,” id. at 506. Although Bahel urges to the

contrary, Giffen does not dictate the outcome of this case, not only because this Court has not

itself so construed Section 1346, but also because, unlike in Giffen, the conduct at issue in this

case took place within the territorial United States, and the victim was—not a foreign

government’s citizens—but the United Nations, an organization headquartered in the United

States, entitled to defendant’s honest services in the United States, and receiving its largest

financial contributions from the United States.

United States v. Lazarenko is also distinguishable. That case, which was cited in Giffen,

involved a former prime minister of the Republic of Ukraine, who was charged with depriving

Ukranian citizens of the honest services of their government officials. No. 00 Cr. 284, at *1-2.

At the close of evidence, the district court dismissed, inter alia, two counts of honest services

fraud charged in violation of 18 U.S.C. §§ 1343, 1346. Id. at *3-4. In so doing, the district court

stated that, in order to establish honest services fraud, the Government would have had to plead

and prove “an analogous violation of Ukraine law.” Id. at *4. This proposition has since been

rejected by the Ninth Circuit. See United States v. Weyhrauch, 548 F.3d 1237 (9th Cir. 2008),

vacated and remanded on other grounds by 130 S. Ct. 2971 (2010) (vacating in light of Skilling).

That is, the Ninth Circuit has rejected the notion that a deprivation of honest services requires a

underlying violation of state law in a domestic case. Id. at 1245 (“In short, we have never

32

limited the reach of the federal fraud statutes only to conduct that violates state law.”).

Lazarenko is also at odds with precedent in our Circuit. See United States v. Margiotta, 688

F.2d 108, 124 (2d Cir. 1982) (“At the outset, we reject the contention that absent a showing of a

violation of New York statute or a duty imposed by New York law, a defendant may not be

found guilty of using the mails in furtherance of a scheme to defraud on the basis of a breach of a

fiduciary duty to the citizenry.”), overruled on other grounds by McNally v. United States, 483

U.S. 350 (1987); see also United States v. Murphy, 323 F.3d 102, 115-16 & n.5 (3d Cir. 2003)

(discussing the different approaches to honest services fraud as between the circuits).

Accordingly, Lazarenko does not provide a basis on which to vacate Bahel’s conviction.

We note that Bahel’s conduct falls firmly within the ambit of the type of conduct that

violates the right to honest services as set forth in relevant precedent. See, e.g., United States v.

Hasenstab, 575 F.2d 1035 (2d Cir. 1978) (buyer for airline convicted of mail and wire fraud for

receiving kickbacks from a supplier of business forms and computer paper in return for the buyer

routing orders to the supplier, and giving the supplier advance information regarding its

competitors’ bids on contracts offered by the employer). Thus, we conclude that, on the facts of

this case, Section 1346 reaches Bahel’s conduct.

IV. Belated Challenges to the Indictment and Jury Charge

Bahel also appeals his conviction under both Section 1346 and Section 666 on the ground

that the indictment failed to charge Bahel with bribery, and the district court failed to adequately

instruct the jury on bribery, principally because the district judge omitted a “corrupt intent”

33

element prerequisite to a conviction for bribery.5 Specifically, Bahel argues for the first time on

appeal that without an instruction on “corrupt intent,” he was convicted on an “illegal gratuities”

theory rather than a bribery theory of liability. This was impermissible, Bahel argues, because

both Section 666 and 1346 reach only fraud that rises to the level of bribery.

At oral argument held after the Supreme Court issued is decision in Skilling, the

Government expressed its belief that Section 1346 does not encompass illegal gratuities, an

argument it concluded was foreclosed by Skilling. Accordingly, the question of whether honest

services fraud can be premised on a gratuity theory of liability is not before us and we do not

consider it. However, with respect to Section 666, the Government argues that Section 666

covers both illegal gratuities as well as bribery, and therefore to the extent that Bahel was

convicted under Section 666 as having accepted illegal gratuities, but not bribes, this is not a

basis on which to overturn his conviction.

Generally, “[w]e review challenged jury instructions de novo [and] will reverse only if all

of the instructions, taken as a whole, caused a defendant prejudice.” United States v. Bok, 156

F.3d 157, 160 (2d Cir. 1998). A “jury instruction is erroneous if it misleads the jury as to the

correct legal standard or does not adequately inform the jury on the law.” Id. Further, where a

defendant fails to make a specific and timely objection to a district court’s legal instructions, we

typically review those instructions only for plain error. See United States v. Middlemiss, 217

F.3d 112, 121 (2d Cir. 2000). However, where the source of alleged error is a supervening

5

Because the challenge to the indictment rests on the same facts and reasoning as

Bahel’s challenge to the jury instructions, and therefore, fails for the same reasons, we discuss

Bahel’s arguments only in the context of the jury charge, with the understanding that the logic

underlying our reasoning applies equally to both.

34

decision, as here with Skilling and the charge under Section 1346, we have previously employed

a “modified plain-error” rule, under which “the government, not the defendant, bears the burden

to demonstrate that the error . . . was harmless.” United States v. Henry, 325 F.3d 93, 100 (2d

Cir. 2003) (internal quotation marks omitted). The Government argues that our modified plain

error rule has not survived the Supreme Court’s decision in Johnson v. United States, 520 U.S.

461 (1997). We need not reach this issue, however, since we conclude there was no error in the

jury charge.

A. The Honest Services Jury Charge

Bahel first argues that the jury instructions were flawed because the district court’s

bribery charge omitted two important elements—corrupt intent and quid pro quo

agreement—thereby effectively converting it into a “gratuity instruction.” However, the district

court’s charge included language nearly identical to what the Supreme Court has described as the

core of honest services fraud. The charge read in relevant part as follows:

It is now essential that you understand specifically what is covered

by the third of these elements relating to the scheme to deprive the

United Nations of the intangible right to the defendant’s honest

services. What is referred to is that the United Nations had certain

fundamental rules and regulations specifying how activities by

United Nations employees were to be carried out. The government

charges that the scheme consisted of violation of these rules and

regulations in the following manner: The government charged that

the defendant [A] provided information to the Kohlis which was not

available to other prospective bidders for U.N. business; [B] provided

unofficial advice and guidance to the Kohlis when the Kohlis were

seeking U.N. business which was not available to other prospective

bidders; [C] advocated the position of the Kohlis on issues that arose

in connection with the Kohlis’ attempt to obtain or maintain business

with the U.N. in a manner the defendant did not use with other

bidders; [D] accepted financial benefits from the Kohlis in return for

these forms of assistance. . . . If the defendant violated the

fundamental rules and regulations of the United Nations through the

35

activities described above, and concealed such violations with the

intention of deceiving the United Nations, this would be the crime

covered by the statute.

In Skilling, the Supreme Court defined classic kickbacks as involving the receipt of

something of value from a third party “in exchange for” official action. 130 S. Ct. at 2926

(emphasis added). This language is strikingly similar to the district court’s instruction to the jury

that it could convict Bahel of honest services fraud if it found that he provided the Kohlis with

one or more specific forms of assistance in his capacity as a UN employee, and that he “accepted

financial benefits from the Kohlis in return for these forms of assistance.”

Further, the Supreme Court’s holding in Skilling was consistent with its prior holdings in

such cases as United States v. Sun-Diamond Growers of California, 526 U.S. 398 (1999), where

the Court distinguished bribes from gratuities. Sun-Diamond involved a trade association’s

illegal gifts to the Secretary of Agriculture, and in that case, the Supreme Court defined the

crime of bribery as requiring a specific intent to “give or receive something of value in exchange

for an official act.” Id. at 404-05 (emphasis in original). The Court explained that this

connection to an official act is what distinguishes bribery from gratuities; an illegal gratuity

“may constitute merely a reward for some future act that the public official will take (and may

already have determined to take), or for a past act that he has already taken.” Id. at 405

(emphasis added). The district court’s instruction on Section 1346 in this case did not

incorporate the word “reward” nor did it discuss an analogous concept. Indeed, the district court

did not even refer to Section 666 in the context of the Section 1346 instruction, which is

significant because Section 666 does cover illegal gratuities, as we explain below.

During the interval between the Supreme Court’s decisions in Sun-Diamond and Skilling,

36

this Circuit had an opportunity to consider the differences between bribery and gratuities as set

forth in Sun-Diamond. In United States v. Ganim, 510 F.3d 134 (2d Cir. 2007), we explained

that “in order to establish the quid pro quo essential to proving bribery, the government need not

show that the defendant intended for his payments to be tied to specific official acts (or

omissions).” Id. at 148 (internal quotation marks omitted, emphasis added). Rather, “bribery

can be accomplished through an ongoing course of conduct, so long as evidence shows that the

‘favors and gifts flowing to a public official [are] in exchange for a pattern of official actions

favorable to the donor.’” Id. at 149 (internal quotation marks omitted). Thus, contrary to

Bahel’s assertions, it is not necessary, though it may be advisable, for the district judge to use the

magic words “corrupt intent” or “quid pro quo” to effectively charge a jury on bribery.6 Rather,

6

Although there may be disagreements among the circuits as to whether honest services

fraud requires a showing of “quid pro quo” contemporaneous with the bribe—that is, whether a

specific act to be completed must be identified at the time of the promise to compensate the

actor, see Sun-Diamond, 526 U.S. at 406—our Circuit has adopted the view that any such

requirement is limited to bribery as codified 18 U.S.C. § 201, and therefore, has no application in

the honest services fraud context. See Ganim, 510 F.3d at 145-46; see also United States v.

Whitfield, 590 F.3d 325, 352-53 (5th Cir. 2009) (“Whether we adopt the Third and Ninth

Circuit’s conclusion that Sun-Diamond applies . . . to honest services fraud but that a particular

act need not be identified at the time of payment, or the Second Circuit’s conclusion that

Sun–Diamond does not apply to honest services fraud at all, we arrive at the same result.”).

While the Supreme Court discussed Sun-Diamond and also made reference to a number

of circuit splits in its opinion in Skilling, it did not resolve this particular issue. See Skilling, 130

S. Ct. at 2928 n.36 (noting circuit splits on whether Section 1346 “prosecutions must be based on

a violation of state law; whether a defendant must contemplate that the victim suffer economic

harm; and whether the defendant must act in pursuit of private gain” (citations omitted)). We

note, however, that even within circuits that impose a contemporaneous quid pro quo

requirement, courts have held that the magic words “quid pro quo” do not themselves need to be

used. See, e.g., Whitfield, 590 F.3d at 353. As the Fifth Circuit held in Whitfield, “The law only

requires that the Government prove the ‘specific intent to give or receive something of value in

exchange for an official act’ to be performed sometime in the future.” Id. (quoting Sun-

Diamond, 526 U.S. at 404-05). The charge in this case instructed the jury that it could convict if

it found that Bahel took money and other compensation from the Kohlis “in return for” certain

37

as we explained in United States v. Alfisi, 308 F.3d 144, 149 (2d Cir. 2002), “[t]he ‘corrupt’

intent necessary to a bribery conviction is in the nature of a quid pro quo requirement; that is,

there must be a ‘specific intent to give . . . something of value in exchange for an official act.”

Id. (emphasis added). In this vein, we find the “in return for” language in the district court’s

instruction rests comfortably within the statutory requirement.

B. The Section 666 Jury Charge

With respect to Bahel’s arguments regarding the failure of the indictment to charge

bribery under Section 666, and the district court’s omission of a “corrupt intent” instruction

thereunder, we find both arguments to be without merit. The crux of Bahel’s argument is that

the jury charge was flawed because without express mention of “corrupt intent,” the Section 666

charge instructed the jury only on an illegal gratuity theory, and Section 666, Bahel contends, is

limited to garden variety bribery. As set forth in full detail below, we find that the district court

adequately charged the jury on the elements of a violation of Section 666, and that to the extent

the verdict sheet indicated that Bahel had been convicted on a gratuities theory (i.e., “intent to be

rewarded” for official acts), Section 666 is broad enough to encompass an illegal gratuity theory

of liability.

Section 666(a)(1)(B) provides that an agent of an organization that receives benefits in

excess of $10,000 under a federal program, in any one year period, is guilty of an offense if he

“corruptly . . . accepts, or agrees to accept, anything of value from any person, intending to be

influenced or rewarded in connection with any business, transaction, or series of transactions of

enumerated official actions. We think this suffices for liability, even under the more exacting

limitations imposed by Sun-Diamond.

38

such organization . . . .” 18 U.S.C. § 666(a)(1)(B). We have held that Section 666 extends to

both bribes—where the thing of value is part of a quid pro quo, and gratuities—where the thing

of value is a “reward” rather than a bargained-for exchange. For example, in United States v.

Crozier, 987 F.2d 893 (2d Cir. 1993), we held that a prior version of Section 666, which is

identical in all material ways to the current version of the statute, applied to both illegal

gratuities and bribes. Id. at 898-99.

Although Congress amended Section 666 in 1986, those amendments had no effect on the

statute’s applicability to illegal gratuities, and we have continued to hold that the current version

applies to illegal gratuities as well as to bribes. See United States v. Bonito, 57 F.3d 167, 171

(2d Cir. 1995). Indeed, in Bonito, the appellant argued that the amendments to Section 666

warranted reconsideration of the scope of the statute and its relationship to illegal gratuities. Id.

We rejected that argument, noting that “the deleted language ha[d] been replaced with language

that is to the same effect.” Id. Specifically, we noted that under the former version of Section

666, the payment had to be “for or because of” official conduct, whereas the current version

provides that the payment must be “to influence or reward” the official conduct. Id. (citations

and internal quotation marks omitted).

Later, in United States v. Ford, 435 F.3d 204, 211 (2d Cir. 2006), we reiterated our

earlier holding that Section 666 applies to both bribes and gratuities, noting that the statute it was

designed to supplement, 18 U.S.C. § 201, criminalizes both. 435 F.3d at 210-11. In Ford, we

observed, among other things, the distinction between bribes and gratuities, noting that:

The distinguishing feature of each crime is its intent element.

Bribery requires intent “to influence” an official act or “to be

influenced” in an official act, while illegal gratuity requires only that

the gratuity be given or accepted “for or because of” an official act.

39

In other words, for bribery there must be a quid pro quo—a specific

intent to give or receive something of value in exchange for an

official act. An illegal gratuity, on the other hand, may constitute

merely a reward for some future act that the public official will take

(and may already have determined to take), or for a past act that he

has already taken.

Id. at 210 (quoting Sun-Diamond, 526 U.S. at 404-05 (emphasis in original)). Thus, we have

made clear that Section 666 extends to both bribes and gratuities.

The jury charge on Section 666 in this case provided in relevant part that “it is the law

that if an employee of the UN conducts certain UN business in a perfectly honest and proper

manner and later accepts a financial benefit intending to be rewarded for that past activity, this is

a violation of the law.” The district court further instructed: “In general, it would seem that the

intent to be influenced would apply to UN business, that is taking place or will take place in the

future. The normal meaning of intent to be rewarded would seem to be the intent to be rewarded

for conduct which has occurred in the past.” The jury was asked to fill out a special verdict form

for the Section 666 charge. This form bifurcated the bases on which a defendant could be found

guilty. The form provided that the jury was to identify whether the defendant was guilty because

he accepted payments and other compensation with “(A) Intent to be influenced,” or “(B) Intent

to be rewarded.” The jury did not indicate yes or no in response to criteria (A), but indicated

“yes” in response to criteria (B). We find the intent to be rewarded language to be sufficient to

indicate that the jury convicted Bahel under Section 666 at least on the ground that he accepted

illegal gratuities.7 See Alfisi, 308 F.3d at 149 (“The element of a quid pro quo or a direct

7

We note also that the fact that the Section 666 conviction was premised on an “intent to

be rewarded” rather than an “intent to be influenced” theory of liability does not, without more,

create an inconsistent verdict. To the extent that the Section 1346 verdict could only have been

premised on an intent to be influenced theory, the jury was silent on the verdict sheet as to

40

exchange is absent from the offense of paying an unlawful gratuity. To commit that offense, it is

enough that the payment be a reward for a past official act or made in the hope of obtaining

general good will in the payee’s performance of official acts off in the future.”).

Bahel argues that even on a gratuities theory, the jury charge was erroneous because it

provided for a conviction for receiving “gifts or ‘rewards’ without first having a corrupt

agreement.” In order for a conviction to have been proper, Bahel contends that the charge would

have had to specify that Bahel “had been corrupted at the time he acted in his official business.”

In support of his argument, Bahel cites a footnote in United States v. Jennings, 160 F.3d 1006

(4th Cir. 1998). In Jennings, the Fourth Circuit opined that a House Report accompanying a

narrowing amendment to 18 U.S.C. § 215, a provision parallel to Section 666 that prohibits the

fraudulent giving of payments rather than their receipt, had “an arguable implication for § 666

that Crozier did not mention: that Congress changed § 666, by adding the “corruptly . . . with

intent to influence or reward” language, to clarify that § 666 (like § 215) prohibits only bribes”

Id. at 1015 n.4 (citing George D. Brown, Stealth Statute-Corruption, the Spending Power, and

the Rise of 18 U.S.C. § 666, 73 Notre Dame L. Rev. 247, 308-11 (1998)). Bahel concedes that

the Fourth Circuit’s discussion in Jennings is dicta that was wholly ancillary to the central issue

in that case. Moreover, insofar as it is directly at odds with precedent in this jurisdiction, we find

it unpersuasive.

In United States v. Rooney, 37 F.3d 847 (2d Cir. 1994), we considered the meaning of the

whether it accepted or rejected this theory of liability with respect to the Section 666 verdict.

Further, the jury is presumed to follow the instructions given, see Richardson v. Marsh, 481 U.S.

200, 211 (1987), and we conclude there was no error in either the district court’s Section 1346 or

Section 666 instructions.

41

term “corrupt” as used in Section 666, concluding that “a fundamental component of a ‘corrupt’

act is a breach of some official duty owed to the government or the public at large.” Id. at 852.

We concluded that “[i]t is an obvious violation of duty and public trust for a public official or

some other person responsible for parceling out government benefits to accept or demand a

personal benefit intending to be improperly influenced in one’s official duties.” Id. at 853

(collecting cases). Although Rooney involved bribery, our analysis of Section 666 in that case,

coupled with the plain language and what we referred to as the “conspicuous breadth” of that

section, id. at 852, makes clear that, in the case of a gratuity, the corrupt intent required under

Section 666 refers to an individual’s state of mind at the time the payment is received—Section

666 makes it illegal, inter alia, “to corruptly . . . accept, anything of value from any person,

intending to be . . . rewarded in connection with any business, transaction, or series of

transactions of such organization.” 18 U.S.C. § 666(a)(1)(B) (emphasis added). Accordingly,

we find no error in the district court’s instructions to the jury insofar as they provided that the

jury could convict Bahel under Section 666 based on an illegal gratuity theory, and because we

conclude that Section 666 covers illegal gratuities, we also find no error in charges in the

indictment relating to Section 666 insofar as they were premised on a gratuity theory of liability.

V. Sufficiency of the Evidence

Bahel challenges his conviction with regard to sufficiency of the evidence on two

grounds. First, he argues that the Government failed to prove that he participated in a scheme to

materially deprive the U.N. of its right to honest services and that he acted with the specific

intent to defraud. Second, with respect to count three of the indictment, which charged wire

fraud, Bahel argues that the Government failed to prove beyond a reasonable doubt that an

42

August 6, 2002 interstate phone call made from Nishan to his father, Nanak, for the purpose of

“discuss[ing] a message from Bahel that Thunderbird needed to immediately register with Dun

& Bradstreet” was in furtherance of the honest services fraud scheme. (The Government alleged

that Bahel made an intrastate phone call to Nishan to warn him to immediately register with Dun

& Bradstreet, which led Nishan to make the interstate phone call to Nanak regarding registration

with Dun & Bradstreet, which, in turn, resulted in Nishan registering Thunderbird with Dun &

Bradstreet later that same day.) Viewing the evidence in this case in its totality, and in the light

most favorable to the Government, as we are obliged to do, see United States v. Temple, 447

F.3d 130, 136-37 (2d Cir. 2006), we are unable to conclude that no reasonable juror could have

found liability, see Jackson v. Virginia, 443 U.S. 307, 319 (1979).

A. Evidence of Honest Services Fraud

In the first instance, the evidence established that Bahel received financial benefits from

the Kohlis worth hundreds of thousands of dollars as a direct result of the assistance he provided

to them, including by advocating on behalf of TCIL with respect to certain stipends and by

providing advice regarding the falsification of references. The evidence also demonstrated that

Bahel repeatedly engaged in secretive and misleading conduct to prevent the U.N. from

discovering the existence and nature of his relationship with the Kohlis. This evidence included,

for example, proof that Bahel was integral in helping the Kohlis obtain the $30 million

Thunderbird engineering manpower contract, despite the fact that they “weren’t really qualified”

and were otherwise unprepared to incur the obligations thereunder. The Kohlis discussed their

lack of qualifications with Bahel, which rather than dissuade him, appears to have strengthened

his resolve. Bahel directed the Kohlis to “fake experience” and later submitted false reference

43

letters to the U.N. with respect to the Kohlis’ credentials. When U.N. officials were suspicious

of the authenticity of the letters, Bahel contacted the Kohlis, cautioning them that U.N.

representatives would be checking their references and that the Kohlis should ensure that those

vouching for them through the letters were prepared to “corroborate” the information. Bahel

then became involved with the reference checking process and imposed certain requirements that

insured that his fraud would not be discovered: he allowed his subordinates to verify the Kohlis’

references only by sending a fax to the number provided by the Kohlis; Bahel prevented his

subordinates from contacting the references directly via telephone. Bahel also falsely told

Peacekeeping officials, his supervisor, and the Headquarters Committee on Contracts, which

approved award of the contract, that the Kohlis references “checked [] out.”

Additionally, Bahel communicated a number of other lies and half truths to help the

Kohlis win the contract. For example, in order to allay the U.N.’s concerns about Thunderbird’s

ability to perform, Bahel staged a meeting between himself, a subordinate and Nishan Kohli.

Prior to that meeting, Bahel and Nishan “talked about the issues of our financials for the

company . . . the company financials . . . [and] the enhanced performance bond that was going to

be asked for.” At the meeting, Nishan discussed “those issues of the bond, of the financials”

with Bahel and his subordinate, who was not aware that Bahel had prepped Nishan for the

conversation. After that meeting, Bahel called Nishan to tell him that the U.N. had asked for an

enhanced performance bond in the amount of $1 million. Bahel then told Nishan “informally

that [he] could probably get away with 750,” and instructed him to “offer half a million and . . .

negotiate from there.”

Bahel later falsely promised Peacekeeping that the U.N. would require the winning

44

vendor to pass along the entire MSA payment to its employees. But as soon as Bahel had

secured the contract for Thunderbird, he instructed that the contract be drafted to permit

Thunderbird to keep the MSA. When questions were raised regarding Thunderbird, Bahel

prevented his subordinates from examining Thunderbird’s audited financial statements. And in

order to ensure that Thunderbird encountered limited competition in obtaining the contract, he

inserted a $15 million revenue requirement into the engineering manpower contract, even

though, at that time, the U.N. was “trying to promote competition” in order to “get the best

possible price.” Further, Bahel advised the Kohlis on a number of specifics regarding their

Thunderbird bid—he reviewed the bid prior to submission and helped the Kohlis formulate a

strategy for responding to the U.N.’s complaints regarding their lack of audited financial

statements.

With respect to TCIL, Bahel compelled Peacekeeping to provide tutorials to the

Kohlis/TCIL after their technical proposal on the digital trunking contract was found to be

wholly inadequate in that it gave “no detail of what they were offering” and “fail[ed] to meet the

majority of the criteria set out in the [request for proposals]. . . .” One official testified that

Bahel’s involvement with procurement “happened on a more regular basis with cases related to

TCIL,” and that it was uncommon for procurement officials to conduct the kind of tutorial that

had been conducted for the Kohlis. Bahel even drafted or reviewed a portion of the Kohlis’

correspondence with the U.N. before the Kohlis sent it.

Moreover, throughout the course of their relationship, Bahel passed significant amounts

of insider information to the Kohlis. This included revealing specific problems that

Peacekeeping had with the Thunderbird bid, and instructing the Kohlis to immediately register

45

Thunderbird with Dun & Bradstreet in order to placate certain U.N. employees who expressed

concern that Thunderbird was not registered. Bahel also revealed the identities of the other

likely bidders to the Kohlis, which gave them a tactical advantage in assessing the winning price

and then told them that their bid was the lowest, even though all of that information was to be

kept confidential.

The evidence demonstrated that Bahel was well compensated in exchange for his

assistance. He received a computer, loans and an option to purchase an apartment worth more

than one million at a severely discounted price. Bahel attempted to cover his tracks with respect

to these items. Bahel never disclosed his relationship with the Kohlis to any U.N. employee. He

used a secret cell phone that the Kohlis paid for in order to conceal his conversations with the

Kohlis. Bahel instructed the Kohlis to disguise their involvement when they bought him a laptop

computer; lent money in his name; and rented, and then sold, him the apartment. Bahel

misrepresented the amount of rent and purchase price of the apartment in communications to the

board of the building. He told the contractor who renovated the apartment to conceal the

connection between Bahel and the Kohlis. When Nishan Kohli was served a subpoena, Bahel

counseled him to destroy evidence of their relationship and suggested alternate false

explanations about their conduct. From this and other conduct the jury was entitled to infer that

Bahel violated his duty to provide the U.N. with his honest services.

Bahel asserts that the government failed to show that his misrepresentations or omissions

in discussing the Kohlis’ companies with U.N. personnel were material. There was significant

evidence to the contrary, and there is no serious question that the instances chronicled above

were material as we have defined that term—“they [had] the natural tendency to influence or

46

[were] capable of influencing the [U.N.] to change its behavior.” United State v. Rybicki, 354

F.3d 124, 147 (2d Cir. 2003). In particular, it is beyond cavil that U.N. personnel were less

inclined to investigate the Kohlis’ companies as a direct result of Bahel’s assurances and his

efforts to downplay the need for verifying the Kohlis’ past experience. This evidence, along

with substantial evidence of financial benefits received from the Kohlis, supports the conclusion

that Bahel intentionally participated in a scheme of honest services fraud at the U.N.

B. Evidence of Wire Fraud

With respect to Bahel’s second challenge to the sufficiency of the evidence, relating to

whether the Government proved beyond a reasonable doubt that the phone call between Nishan

and Nanak was in furtherance of the honest services fraud scheme, the relevant facts are as

follows. In July 2002, the Kohlis submitted their Thunderbird bid relating to a U.N. engineering

manpower contract. On August 6, 2002, Peacekeeping sent a memo to Bahel regarding the five

bids submitted for the contract. The memo listed a number of deficiencies with Thunderbird’s

bid, and recommended that Peacekeeping “undertake a legal review of [Thunderbird’s]

arrangement with [the Delhi State Industrial Development Corporation Limited], as well as a

Dun & Bradstreet report on Thunderbird Industries.” But Thunderbird was not registered with

Dun & Bradstreet. Accordingly, Bahel, who was in New York, called Nishan, who was also in

New York, to discuss the fact that “somebody within the evaluating team pointed out that

Thunderbird did not even have a Dun & Bradstreet registration.” During that conversation,

Bahel “instructed [Nishan] to immediately register with Dun & Bradstreet.” Contemporaneous

with the discussion Nishan had with Bahel, Nishan called his father, Nanak, who was in

Virginia, to discuss the Dun & Bradstreet issue. Nishan registered Thunderbird with Dun &

47

Bradstreet later that day. Bahel disputes none of these facts.

Rather, the basis for Bahel’s appeal relates to a call Nishan received from Diana Mills-

Aryee also on August 6, 2002. On that day, Mills-Aryee telephoned Nishan to inquire as to the

status of Thunderbird’s Dun & Bradstreet report. One of Bahel’s subordinates, Jane Redfern,

was with Mills-Aryee when Mills-Aryee made the call. Redfern testified that she recalled Mills-

Aryee relaying that Thunderbird was “in the process of registering.” Bahel argues that this

testimony fails to establish beyond a reasonable doubt that he had contacted Nishan before Mills-

Aryee, and therefore, calls into doubt whether he caused the interstate communication between

Nishan and Nanak. We disagree and instead conclude that a rational jury could conclude that

Bahel made a phone call to Nishan, instructing him to register with Dun & Bradstreet in relation

to the Thunderbird contract bid, and that the call in turn caused Nishan to make the interstate

phone call to Nanak.

To prove a charge of honest services wire fraud, the Government must show that the

defendant sent or caused to be sent an interstate or international wire communications and that

such wire communication occurred in furtherance of a fraudulent scheme. See United States v.

Slevin, 106 F.3d 1086, 1089 (2d Cir. 1996). To meet the “in furtherance” requirement, a wire

communication “need not be an essential element of the scheme. It is sufficient for the [wire

communication] to be incident to an essential part of the scheme or a step in [the] plot.”

Schmuck v. United States, 489 U.S. 705, 710-11 (1989) (internal citations and quotation marks

omitted). Further, it is not necessary for the defendant to participate personally in the wire

transmission, as long as it is reasonably foreseeable that the charged transmission would occur in

the execution of the scheme. See, e.g., United States v. Amico, 486 F.3d 764, 781 (2d Cir. 2007)

48

(applying the “reasonably foreseeable” standard in the context of a mailing).

Here, Redfern testified that she was with Mills-Aryee when Mills-Aryee telephoned

Nishan, and that Nishan told Mills-Aryee during that conversation that he was “in the process of

registering” Thunderbird with Dun & Bradstreet. “[C]rediting every inference that the jury

might have drawn in favor of the government,” Temple, 447 F.3d at 136-37 (internal quotation

marks omitted), Nishan’s testimony indicates that he was already aware that Thunderbird needed

to be registered with Dun & Bradstreet by the time Mills-Aryee made the call. Since the only

other source of this information was Bahel, the evidence establishes that

Bahel notified Nishan informally before Mills-Aryee called him in an official capacity.

On the facts of this case, however, the timing of the various phone calls is of only limited

importance, because even if Bahel had contacted Nishan after Mills-Aryee, it was reasonably

foreseeable to Bahel that, by contacting Nishan, the call between Nishan and Nanak would occur

in furtherance of the scheme. See Amico, 486 F.3d at 781 (“To prove that a defendant caused a

mailing, it is sufficient to prove that he could have reasonably foreseen that the mailing would

take place.”). The jury was thus entitled to find that the phone call from Bahel conveyed

precisely the type of internal assistance that Bahel provided to the Kohlis—and not to other

vendors—that violated U.N. procurement policies and formed the basis of his conviction for

honest services fraud.

VI. Sentencing

Bahel was sentenced to 97 months’ imprisonment, based on a total offense level of 30

and a criminal history category of I. Bahel’s base offense level was calculated as 14, because the

district court considered him to be a “public official” and therefore applied Sentencing

49

Guidelines Section 2C1.1(a)(1). The district court enhanced this base level by an additional 14

levels, applying Section 2C1.1(b)(2), because the district court found that the fraud involved

gains to Bahel in excess of $400,000, see U.S.S.G. § 2B1.1(b)(1)(H), at 80 (14 level

enhancement for loss exceeding $400,000). Finally, the district court enhanced his sentence by

two additional levels based upon a finding that Bahel had obstructed justice. The sentence range

for a total offense level of 30 is 97-121 months, and Bahel’s sentence of 97 months’

imprisonment falls at the low end of the Guidelines range. Bahel appeals only the calculation of

the base offense level under Section 2C1.1 and the imposition of a 14 level enhancement based

on the computed value of his crimes. He does not appeal the 2 level enhancement for

obstruction of justice. In addition to imprisonment, the district court ordered Bahel to pay

restitution, a judgment that he also appeals.

A. Application of the Sentencing Guidelines

When reviewing district court determinations as to the sentencing guidelines, we review

factual findings for clear error and legal interpretations de novo. United States v. Lenoci, 377

F.3d 246, 250 (2d Cir. 2008). A finding of fact is clearly erroneous only if, after reviewing all of

the evidence, a court “is left with the definite and firm conviction that a mistake has been

committed.” United States v. Cuevas, 496 F.3d 256, 267 (2d Cir. 2007) (internal quotation

marks omitted).

1. Fraud Involving Public Officials

Guidelines Sections 2B1.1 and 2C1.1 can both apply to mail and wire fraud convictions.

See U.S.S.G. app. A., at 546 (2008). Section 2B1.1 applies generally to mail and wire fraud and

carries a base offense level of 7. U.S.S.G. § 2B1.1, at 80 (“Theft, Embezzlement, Receipt of

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Stolen Property, Property Destruction, And Offenses Involving Fraud or Deceit”). Section

2C1.1, subtitled in relevant part, “Fraud Involving the Deprivation of the Intangible Right to

Honest Services of Public Officials” (emphasis added), is more narrowly tailored than Section

2B1.1 in that it carries a base offense level of 14 if the offender is a public official. U.S.S.G. §

2C1.1(a)(1), at 127. Because the district court determined that Bahel was a “public official” as

that phrase is used in the Sentencing Guidelines, it subjected Bahel to Section 2C1.1’s base

offense level rather than the lower offense level of Section 2B1.1.

In its definitions, Section 2C1.1 provides that the phrase “‘Public Official’ shall be

construed broadly.” U.S.S.G. § 2C1.1, cmt. n.1, at 128. A “public official” includes, inter alia, a

“member of a state or local legislature,” an “officer or employee or person acting for or on behalf

of a state or local government, or any department, agency, or branch of government thereof,” as

well as appointed officials and individuals who have been elected and are waiting to take office.

Id. Moreover, as relevant here, the definition includes a catchall provision that defines a “public

official” as “[a]n individual who, although not otherwise covered by [the other] subdivisions [of

the definition] . . . (i) is in a position of public trust with official responsibility for carrying out a

government program or policy; (ii) acts under color of law or official right; or (iii) participates so

substantially in government operations as to possess de facto authority to make governmental

decisions (e.g., which may include a leader of a state or local political party who acts in the

manner described in this subdivision).” Id.

Bahel argues that he should not have been sentenced under Section 2C1.1, because he

was not a “public official,” in that he (a) did not possess official authority to enter into contracts;

(b) was not involved in policymaking in working on contracts for goods and services, and

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otherwise did not hold a high-level position at the U.N.; and (c) as a U.N. employee, he did not

hold a position in government. We reject these arguments.

First, the fact that Bahel was at an international organization (i.e., the U.N.) does not

mean that he was not a “public official” for the purposes of Section 2C1.1. The district court

correctly noted that the closely analogous Guidelines provision found in Section 2B4.1, which

relates to commercial bribery offenses, demonstrates the applicability of Section 2C1.1 to this

case. The commentary to Section 2B4.1 states: “This guideline covers commercial bribery

offenses and kickbacks that do not involve officials of federal, state, or local government, foreign

governments, or public international organizations.” U.S.S.G. § 2B4.1, cmt. n.1, at 118

(emphasis added). As the district court noted, the commentary to Section 2B4.1 refers the reader

to part C, for “Offenses Involving Public Officials, if any such officials are involved.” Id. Part

C includes Section 2C1.1, which is the section under which Bahel was sentenced. The district

court further noted that insofar as Section 2B4.1 refers the reader to part C for offenses involving

public international organizations, this commentary plainly indicates that part C was meant to

encompass employees of the U.N., since the U.N. is undoubtedly a public international

organization.

Other provisions of the Sentencing Guidelines support this analysis. For example,

commentary to Section 2C1.1 provides that the term “‘Public official’ shall be construed

broadly.” U.S.S.G. § 2C1.1, cmt. n.1, at 128 Section 2C1.1 is not limited to those who work for

a federal, state or local government, but has been applied to leaders of political parties, officials

of Indian tribes, and foreign public officials. See U.S.S.G. § 2C1.1, cmt. n.1(E) & background,

at 129-31. Indeed, the phrase “public official” encompasses any individual who either (1) is in a

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position of public trust with official responsibility for carrying out a government program or

policy; (2) acts under color of law or official right; or (3) possess de facto authority to make

governmental decisions. See U.S.S.G. § 2C1.1, cmt. n.1(E), at 129.

Additionally, although Bahel argues to the contrary, it is difficult to imagine how he

could not be considered a high ranking U.N. official, since he was Chief of the Commodity

Procurement Section within the U.N.’s Procurement Division. While this position may not have

been the same as that of a representative of a member state, it is far from the “baggage porter” to

which Bahel now seeks to compare himself. That is, Bahel cites Krichman v. United States, 256

U.S. 363 (1921), in support of his argument that employees with purely ministerial jobs cannot

ever be subject to prosecution as public officials. This argument misapprehends the holding in

Krichman.

Krichman involved a defendant who was indicted under the 1909 bribery law for offering

a bribe to a baggage porter “to deliver to him [the defendant] certain trunks containing furs,

which were checked from the Pennsylvania station to points outside the state of New York.” Id.

at 364. At that time, the federal government was in control and operated the railroads, so the

porter was a federal employee. Id. at 363-64. As the Supreme Court noted, “In order to sustain

the conviction [under the 1909 bribery law] the bribe must have been given to an officer of the

United States, or to a person acting for or on behalf of the United States in an official function

under or by the authority of a department or office of the government.” Id. at 365. In holding

that the defendant could not be convicted for bribery under the 1909 statute, the Supreme Court

explained that neither Krichman nor the porter were officers of the United States. Thus, the only

question was whether the porter was “acting for the United States in an official function” when

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he was offered the bribe. Id. Noting that the government had conceded the statute’s ambiguity,

the Supreme Court concluded that the ambiguity regarding the statute’s scope, were “not to be

solved so as to embrace offenses not clearly within the law.” Id. at 368. The Supreme Court

was especially persuaded by the fact that the Congress could not have contemplated that the

statute would apply to railroad workers, because the United States did not control the railroads at

the time the statute was passed. Id. at 365-66.

Here, not only do the Guidelines expressly refer to the sentencing of individuals at public

international organizations as appropriately considered in the context of part C, but Bahel’s

position, at the U.N., as can be garnered from his title alone, was closer to that of a foreign

diplomat, political party official, or a tribal leader, all of whom are expressly covered by the

Guideline—than that of a baggage porter, window cleaner, doorkeeper or any of the other tasks

recounted in Krichman. See id. at 366. Our conclusion is further supported by the fact that the

Convention on Privileges and Immunities of the United Nations would have entitled Bahel to

invoke immunity in the first instance on the basis that he is an official. See U.N. Convention,

art. V, § 18 (“Officials”). Guidelines Section 2C1.1’s commentary also includes a note that

suggests its direct applicability to individuals like Bahel: “Section 2C1.1 also applies to offenses

under [the Foreign Corrupt Practices Act] . . . [which] generally involve a payment to a foreign

public official, candidate for public office, or agent or intermediary, with the intent to influence

an official act or decision of a foreign government or political party.” U.S.S.G. § 2C1.1, cmt.

background, at 131.

Bahel contends that Section 2C1.1’s definition of “public official” cannot be extended to

include “all employee of international non- or quasi-governmental organizations, such as the

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U.N., the World Trade Organization, or the Internal Monetary Fund.” However, as the district

court recognized, the Guidelines commentary specifically instructs that employees of such

“public international organizations,” fall under Section 2C1.1 and not Section 2B1.1.

Bahel also argues that even if “public official” extended to a broad range of organizations, he

could not have been considered a “public official,” because he “was not making policy decisions

or executing government programs.” The Guidelines reject this argument, providing in relevant

part that: “a state employee who improperly influenced the award of a contract and used the

mails to commit the offense may be prosecuted under 18 U.S.C. § 1341 for fraud involving the

deprivation of the intangible right of honest services. Such a case would be more aptly

sentenced pursuant to § 2C1.1.” See U.S.S.G. § 2B1.1, cmt. n.15, at 96. Further, Section 2C1.1

contains a four-level enhancement for those public officials who are in a “high-level decision-

making or sensitive position,” clearly indicating that the Section 2C1.1 was not meant to reach

only those high level officials. See id. § 2C1.1(b)(3), at 127.

Bahel argues for the first time on appeal that to the extent that he could be considered a

public official, he was sentenced under the wrong portion of the Sentencing Guidelines because

he was convicted only on a gratuity theory under Section 666, as indicated on the verdict form

returned by the jury, but he was sentenced under a bribery portion of the Guidelines. Bahel’s

argument ignores the fact that, in addition to violating Section 666, he was also convicted of

honest services fraud under 18 U.S.C. §§ 1341, 1343, 1346, and he was sentenced under the

portion of the Guidelines that applies to honest services fraud. Specifically, the Sentencing

Guidelines provide that violations of 18 U.S.C. § 666 may be sentenced under either Sections

2B1.1, 2B1.5, 2C1.1 or 2C1.2, the latter of which applies, inter alia, to receipt and solicitation of

55

gratuities, see U.S.S.G. app. A, at 543. The Guidelines also provide that violations of Sections

1341 and 1343 are to be sentenced under either Section 2B1.1 or 2C1.1. However, the

Guidelines do not provide that honest services fraud convictions under Sections 1341 and 1343

are to be sentenced under the 2C1.2 gratuities Guideline, see U.S.S.G. app. A, at 546.

Accordingly, we find no error in the district court’s application of Section 2C1.1 with a base

offense level of 14 to Bahel.

2. Proceeds from the Fraud

The district court enhanced Bahel’s sentence by 14 levels based on the court’s

observation that Bahel gained in excess of $400,000 from the fraud. See U.S.S.G. §§

2B1.1(b)(1)(H), 2C1.1(b)(2), at 80, 127. Bahel claims that this enhancement was in error

because the district court’s calculation of the benefits he received was based on speculative

evidence. We disagree.

Much of the case law relating to estimating the price of fraud relates to estimations of

losses suffered as a result of the fraud. In this case, however, the relevant measurement is how

much Bahel profited from his fraud. In calculating this number, the principles relating to

estimating losses are equally applicable to estimating gains. In estimating the cost of fraud, the

“Guidelines do not require that the sentencing court calculate the amount of loss with certainty

or precision.” United States v. Bryant, 128 F.3d 74, 75 (2d Cir. 1997). The sentencing court

“need only make a reasonable estimate of the loss, given the available information.” United

States v. Uddin, 551 F.3d 176, 180 (2d Cir. 2009) (internal quotation marks omitted); see also

U.S.S.G. § 2B1.1, cmt. n.3(C), at 87. Disputed facts relevant to sentencing determinations

should be supported by a preponderance of the evidence. See, e.g., United States v. Garcia, 413

56

F.3d 201, 220 n.15 (2d Cir. 2005). Because the sentencing court “is in a unique position to

assess the evidence and estimate the loss based upon that evidence,” its findings are “entitled to

appropriate deference” on appeal. U.S.S.G. § 2B1.1, cmt. n.3(C), at 87. “In reviewing a district

court’s application of the Guidelines to the specific facts of a case,” this Court will “accord de

novo review to issues of law, and accept its findings of fact unless they are clearly erroneous.”

United States v. Guang, 511 F.3d 110, 122 (2d Cir. 2007).

The district court estimated Bahel’s gains to be $514,126, by aggregating the following

(relevant values in bold):

• The difference between Bahel’s stated purchase price for the Manhattan

apartment, which had been approved by the condominium board ($1.5 million)

and what Bahel actually paid ($1.2 million), for a benefit of $300,000;

• The difference between Bahel’s stated purchase price of the Manhattan apartment

($1.5 million) and a conservative estimate of the apartment’s fair market value

($1.6 million), for a benefit of $100, 000;

• The value of the free rent Bahel received in connection with the Manhattan

apartment ($40,000);

• The difference between the fair market value of rent for the Manhattan apartment

and what Bahel paid ($38,000);

• Cash payments totaling $5,500;

• First-class plane tickets worth $16,000, as well as other plane tickets worth

$10,000;

• U.S. Open tickets worth $2,000;

• A laptop computer worth $2,626.

Bahel does not object to the district court’s findings regarding rent, plane tickets, cash or other

gifts. He objects only to the fair market valuation of the apartment, and argues that the district

court erred in (1) failing to take into account the $27,000 that Bahel paid in closing costs, (2)

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failing to consider the fact that the Condo Board was willing to sell Bahel its right of first

refusal, which Bahel argues indicated that the apartment was not sold at a “material discount”

(because otherwise the Condo Board would have exercised its right and bought the apartment

itself), and (3) failing to account for the $90,000 that the Kohlis saved by not having to pay

commission to a real estate broker.

To the extent that the fact that the Condo Board sold its right of first refusal to Bahel

instead of exercising it, this fact could be considered probative of the fair market value of the

apartment, because, as Bahel points out, it could indicate that the apartment was not valued much

(if at all) below market.8 However, in this case, the balance of the evidence indicates exactly the

opposite—that the apartment was worth far more than Bahel paid. The Dag Hammarskjold

Condo Board estimated that the apartment was worth $1.9-$2.05 million. The estimate, far from

speculative, was based on analysis of sales of comparable apartments in the building over a

number of years. Moreover, the Condo Board’s estimate was in line with other estimates,

including that of Nishan Kohli, who testified that he believed the apartment to be worth

approximately $1.8 million. Kohli based his estimate on the value of a similar apartment that he

had sold. Finally, the real estate market had appreciated significantly in the two years after the

Kohlis first purchased the apartment for $1.24 million and subsequently spent approximately

$165,000 improving it. For example, the price of a three bedroom apartment in Manhattan rose

roughly 23% in the first quarter of 2005 alone. While data about the real estate market, without

8

It is unclear that the Board’s failure to exercise its right of first refusal was related to

the price of the unit. Testimony from the Board revealed that the body did not exercise its right

of first refusal in part because doing so would have required the Board to hold a special meeting,

and they were unable to produce a quorum to convene such a meeting.

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more, might have been insufficient to support the imposition of the 14 level enhancement, the

totality of the evidence leaves no question that the apartment was worth at least $1.6 million and

Bahel therefore benefitted by at least $400,000. We agree with the district court that the

evidence established that the $1.6 million valuation was “very conservative.”

The district court also rejected Bahel’s argument that it should deduct from that amount,

the $27,500 that Bahel spent on closing plus the $90,000 that the Kohlis realized by avoiding the

payment of a real estate commission. In the first instance, the fact that the Kohlis avoided

paying a commission strikes us as wholly irrelevant to determining the benefit Bahel received

from the fraud. Further, even if we were to credit Bahel’s calculation that the total estimated

benefit should have subtracted his $27,500 payment, the subtraction of that value from the

district court’s estimation of Bahel’s gains still leaves Bahel above the $400,000 threshold and

therefore firmly places him within the ambit of Section 2C1.1(b)(2).

VII. Restitution

The Mandatory Victims Restitution Act (“MVRA”) requires a defendant to reimburse a

victim for, inter alia, “necessary . . . other expenses incurred during the participation in the

investigation or prosecution of the offense or attendance at proceedings related to the offense.”

18 U.S.C. § 3663A(b)(4). Attorneys’ fees are “other expenses” that are properly included within

a restitution award. See United States v. Amato, 540 F.3d 153, 159-60 (2d Cir. 2008). “Any

dispute as to the proper amount or type of restitution shall be resolved by the court by the

preponderance of the evidence.” 18 U.S.C. § 3664(e).

A. Legal Fees

The district court in this case ordered Bahel to reimburse the U.N. for $846,067.03 worth

59

of legal fees incurred in bringing this case as well as the $86,098.36 in salary Bahel was paid

while he was suspended following the indictment (total: $932,165.39). Bahel contends that the

U.N.’s legal fees were not “necessary” for the purposes of Section 3663A(b)(4) because the U.N.

retained a “major New York City law firm” to represent it in this matter when the U.N. “had in-

house counsel at its disposal,” which could have “provide[d] the same services at a much

reduced fixed cost.” Our decision in Amato forecloses this argument.

In Amato, the defendants’ fraud caused their employer to retain outside lawyers and

accountants to perform an internal investigation and to represent the employer in connection

with the Government’s investigation and prosecution of the defendants. See 540 F.3d at 159,

162. We affirmed the award to the employer of full restitution for the $3,088,466 expended on

attorneys’ fees and accounting costs. Id. at 163. As Amato intimates, nothing in our case law

limits restitution to cost of in-house counsel. Moreover, the law firm represented the U.N. at

times for 25-40% below its normal billing rates, and no one has contended (1) that the fees

themselves were unreasonable, or (2) that any specific task undertaken by the law firm was

unnecessary—aside from Bahel’s general and conclusory contention that in-house counsel could

have handled the investigation. Likewise, nothing in the record indicates that it is uncommon for

an organization to retain outside counsel in connection with investigations into internal fraud.

See id. at 159, 162.

Bahel also complains that the Government did not supply the supporting billing records

until two days prior to the restitution hearing. The record reveals that this is true but that Bahel

refused to consent to an adjournment in advance of the hearing. The record also reveals that

when the district court offered Bahel an opportunity to request an adjournment during the

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hearing, so that he could fully review the records before the district court made a determination,

but Bahel again refused to take the adjournment. For these reasons and those stated above, we

conclude that the district court committed no error in awarding the U.N. $846,067.03 in legal

fees.

B. Salary

Finally, Bahel claims for the first time on appeal that the district court erred in providing

the U.N. restitution for the amount of his salary, because he opines his salary w as beyond the

scope of the MVRA. Specifically, Bahel argues that 18 U.S.C. § 3663A(b)(1)(B)(i)(I) “requires

a restitution order to include ‘the value of the [victim’s] property on the date of loss,’” and

because “the U.N. does not claim that it suffered any specific pecuniary or financial loss

resulting from the conduct of Mr. Bahel,” it was incorrect for the district court to “speculate that

the U.N. somehow ‘lost’ services by Mr. Bahel and divine a portion of salary to be refunded and

represent it as ‘property’ lost to the U.N.”

Ordinarily, we review a restitution award for abuse of discretion. See United States v.

Boccagna, 450 F.3d 107, 113 (2d Cir. 2006). But where, as here, the issue was raised for the

first time on appeal, we review only for plain error. See United States v. Fiore, 381 F.3d 89, 98

(2d Cir. 2004). Under plain error review, “an appellate court may, in its discretion, correct an

error not raised at trial only where the appellant demonstrates that (1) there is an ‘error’; (2) the

error is ‘clear or obvious, rather than subject to reasonable dispute’; (3) the error ‘affected the

appellant's substantial rights, which in the ordinary case means' it ‘affected the outcome of the

district court proceedings’; and (4) ‘the error seriously affect[s] the fairness, integrity or public

reputation of judicial proceedings.’” United States v. Marcus, 130 S. Ct. 2159, 2164 (2010)

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(quoting Puckett v. United States, 129 S. Ct. 1423, 1429 (2009)).

There is one central problem with Bahel’s argument: it ignores the fact that the money

the U.N. paid in the form of his salary was plainly “property” that belonged to the U.N., at least

some of which the U.N. lost as a result of Bahel’s offense, since the U.N. paid him for his honest

services, which is what he failed to provide. There is no question that a portion of an

individual’s salary can be subject to forfeiture where, as here, an employer pays for honest

services but receives something less. See United States v. Crawley, 533 F.3d 349, 359 (5th Cir.

2008) (salary and pension procured through fraud is “within the . . . statutory language” of

Section 3663A(b)(1)); United States v. Sapoznik, 161 F.3d 1117, 1121 (7th Cir. 1998) (“We may

assume that [the employer] would not have hired [the defendant] had it known of his intentions,

and in that event it would not have paid him four years’ salary . . . . [W]hat [the employer] lost . .

. [was] the difference in the value of the services that [the defendant] rendered . . . and the value

of the services that an honest [employee] would have rendered.”).

The amount eligible for forfeiture under Section 3663A, however, appears to be a

question of first impression in this Circuit. In this context, some of our sister circuits have

contemplated the issue and their conclusions inform our analysis. In United States v. Crawley,

the Fifth Circuit affirmed a district court order awarding restitution to an employer in the amount

of the salary and pension awarded to the employee in the year after his fraud. 533 F.3d at 359.

Crawley involved voter fraud relating to the defendant’s election as president of a local union.

Id. at 351. The evidence at trial established that Crawley had falsified ballots in order to secure

his election, and unrelated to the voter fraud, he had received a $20,000 kickback in connection

with a union contract. Id. at 352. Crawley was charged with one count of mail fraud in violation

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of 18 U.S.C. §§ 1341, 1346; one court of embezzlement of an official ballot in violation of 29

U.S.C. § 501(c); one count of embezzlement from a labor organization for the kickback, also in

violation of 29 U.S.C. § 501(c); and one count of making a false entry in records required by the

Labor Management Reporting and Disclosure Act, in violation of 29 U.S.C. § 439(c). 533 F.3d

at 352. He was convicted of all counts. Id. at 353.

Crawley argued on appeal, similar to what Bahel argues here, that his salary should not

have been forfeited because the loss to the union, his employer, could not have been related to

his salary and pension, because the union would have had to pay an honest president the same

amount. Id. at 358-59. Rejecting this argument, the Fifth Circuit explained that the salary

obtained as a result of the fraud fell within the plain language of MVRA Section

3663A(b)(1)(A), which requires a defendant “(1) in the case of an offense resulting in damage to

or loss or destruction of property of a victim of the offense [to] (A) return the property to the

owner of the property . . . .” Id. at 359 (quoting 18 U.S.C. § 3663A(b)(1)(A)) (emphasis in

original). The Crawley court further explained that: “A contrary holding would allow Crawley

to benefit from his fraudulent conduct, a result which runs afoul of the principles on which

restitution is based.” Id.

We think the same principle applies here. However, we also note that there is one

distinguishing factor between the cases—namely, that Crawley obtained his position as union

president through fraud whereas the evidence at Bahel’s trial established only that he engaged in

a significant pattern of honest services fraud, not that he obtained his position through fraud in

the first instance. The Seventh Circuit confronted a similar set of facts in United States v.

Sapoznik. Sapoznik involved a police chief who was convicted of violating the Racketeer

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Influenced and Corrupt Organizations Act (“RICO”) by taking bribes to protect illegal gambling

in town bars and restaurants. 161 F.3d at 1118. Judge Posner, writing for the panel in Sapoznik,

explained: “The proper amount of restitution is the amount wrongfully taken by the defendant.”

Id. at 1121. The court continue: “The government argues that Sapoznik obtained his salary from

Northlake under the false pretense that he was honest. We may assume that Northlake would not

have hired him had it known of his intentions, and in that event it would not have paid him four

years’ salary, let alone one year’s.” Id. However, the court, noting that Northlake would still

have needed a police chief, then explained that Northlake was entitled to restitution in the

amount of “the difference in the value of the services that Sapoznik rendered Northlake and the

value of the services that an honest police chief would have rendered.” Id.

The district court had not calculated the value of that difference but instead had entered

an order requiring Sapoznik to pay back one year’s salary, which as the court of appeals noted,

comprised one-fourth of his total salary as police chief. Id. at 1121-22. The Seventh Circuit

noted that this was “an arbitrary fraction,” but despite that, the court upheld the award on the

ground that “it rather generously credit[ed] Sapoznik with being worth to the employer three-

fourths of his salary even though he was corrupt.” Id. at 1122.

Here, as in Sapoznik, the district court did not attempt to calculate the difference between

honest services and the services Bahel provided. Indeed, the district court explicitly noted that

the record showed that “it would be unduly complex to try to delineate which part of the

$876,000 [the amount Bahel earned in salary between 1999 and 2006, the period covered by the

fraud] was paid for honest services and which part was paid for the dishonest services.” As the

district court explained, it settled on $86,098.36, because that was the amount of salary Bahel

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received following his January 2006 suspension pending investigation into his fraud, and while

Bahel was suspended, he “performed no services at all,” a finding Bahel does not dispute. We

think requiring Bahel to repay the amount of the salary he received while providing no services

at all cannot be considered error on the part of the district court. This is especially true in light

of the fact that Bahel was ordered to repay less than 10% of the total salary he received while

working for the U.N.; that is, by implication, the district court estimated the outer calculable

worth of Bahel’s services to be 90% of his total salary. Insofar as the Seventh Circuit noted that

ascribing 75% of an honest police chief’s salary to Sapoznik’s corrupt provision of services was

a generous estimate of the value of his services, we likewise find that requiring Bahel to repay

less than 10% of his total salary was a conservative estimate of the cost of the fraud with respect

to his salary.

CONCLUSION

We have considered Appellant’s remaining arguments and find them to be without merit.

For the reasons stated herein, we AFFIRM the judgment of conviction in its entirety.

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