Respondents Brief — Henry P. Alfano and William Hird, Petitioners v. United States

No. 18-1552

=============================

IN THE

SUPREME COURT OF THE UNITED STATES

_______________

HENRY P. ALFANO et al.,

Petitioners,

v.

UNITED STATES OF AMERICA et al.,

Respondents.

=================

On Petition for Writ of Certiorari

To the United States Court of Appeals

for the Third Circuit

======================

BRIEF OF RESPONDENTS LOWRY,

MULGREW AND TYNES IN SUPPORT OF

PETITION FOR WRIT OF CERTIORARI

======================

(additional counsel

on reverse side)

July 2019

PETER GOLDBERGER

Counsel of Record

PAMELA A. WILK

50 Rittenhouse Place

Ardmore, PA 19003

(610) 649-8200

peter.goldberger@verizon.net

Attorneys for Respondents

Lowry, Mulgrew & Tynes

Additional counsel for respondents:

LISA A. MATHEWSON

Law Offices of Lisa A. Mathewson, LLC

123 So. Broad St., Ste. 810

Philadelphia, PA 19109

(215) 399-9592

lam@mathewson-law.com

Attorney for Respondent Tynes

MEREDITH A. LOWRY

Klehr Harrison Harvey Branzburg, LLP

1835 Market St., Ste. 1400

Philadelphia, PA 19103

(215) 569-2700

mlowry@klehr.com

Attorney for Respondent Lowry

QUESTION PRESENTED

Does a program of showing leniency in the adjudicatory process as a personal or political favor to

certain accused wrongdoers constitute a “scheme to

defraud” the local government, in violation of the mail

and wire fraud statutes, by “obtaining property” in

the form of potential fines and fees that might be

assessed if the underlying accusations of non-criminal

wrongdoing were sustained?

i

LIST OF ALL PARTIES

The petitioners are Henry Alfano and William

Hird. This brief is filed for Michael Lowry, Robert

Mulgrew and Thomasine Tynes, who are deemed to be

respondents (in addition to the United States) under

this Court’s Rule 12.6, because they were coappellants of Alfano and Hird in the court below and

did not join with them in this Court as petitioners.

Respondents have also filed their own petition,

raising a separate issue, which has been docketed at

No. 18-1581.

ii

TABLE OF CONTENTS

TABLE OF AUTHORITIES ................................... iii

STATEMENT OF THE CASE .....................................1

REASONS FOR GRANTING THE PETITION

1. The decision of the court below

disregards this Court’s precedent and

conflicts with the decisions of other

circuits ……………………………………..………... 4

2. This case offers an excellent vehicle

for clarifying the Cleveland rule limiting

overbroad application of the mail and

wire fraud statutes. …………….............…........ 12

CONCLUSION ....................................................... 4

TABLE OF AUTHORITIES

Cases

Bronston v. United States, 409 U.S. 352 (1973) ........ 2

Carpenter v. United States, 484 U.S. 19 (1987) ......... 6

Cleveland v. United States, 531 U.S. 12 (2000) passim

Empire Merchants, LLC v. Reliable Churchill LLLP,

902 F.3d 132 (2d Cir. 2018) .................................. 10

Loughrin v. United States, 573 U.S. 351 (2014) .. 5, 11

McNally v. United States, 483 U.S. 350 (1987) passim

iii

Neder v. United States, 527 U.S. 1 (1999) ................. 5

Nelson v. Colorado, 581 U.S. —,

137 S.Ct. 1249 (2017) ............................................ 11

Pasquantino v. United States, 544 U.S. 349 (2004) .. 7

Sekhar v. United States, 570 U.S. 729 (2013) ........... 5

Skilling v. United States, 561 U.S. 358 (2010) .. 5, 6, 9

United States v Bass, 404 U.S. 336 (1971) .............. 11

United States v. Ali, 620 F.3d 1062 (9th Cir. 2010) 10

United States v. Ashman,

979 F.2d 469 (7th Cir. 1992) ..................................... 9

United States v. Gimbel,

830 F.2d 621 (7th Cir. 1987) ..................................... 9

United States v. Griffin,

324 F.3d 330 (5th Cir. 2003) ................................... 10

Ward v. United States,

845 F.2d 1459 (7th Cir. 1988) ................................... 9

Constitution, Statutes and Rules

18 U.S.C. §§ 1341, 1343 .......................................... 1, 8

18 U.S.C. § 1346 ....................................................... 5, 9

18 U.S.C. § 1349 ........................................................... 1

18 U.S.C. § 1623 ......................................................... 2

75 Pa.Cons.Stat. §§ 3362, 6502(a) ............................. 7

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BRIEF OF ADDITIONAL RESPONDENTS

IN SUPPORT OF PETITION

FOR A WRIT OF CERTIORARI

Respondents Michael Lowry, Robert Mulgrew, and

Thomasine Tynes jointly suggest that this Court

grant the petition for a writ of certiorari filed by their

co-appellants below, Henry Alfano and William Hird,

to review the judgment and order of the United States

Court of Appeals for the Third Circuit affirming the

convictions and sentences of all of them.

STATEMENT OF THE CASE

Respondents Michael Lowry, Robert Mulgrew and

Thomasine Tynes were elected, non-lawyer judges of

the Philadelphia Traffic Court. A federal grand jury

indicted them, along with co-defendants Henry Alfano

and William Hird (among others), for devising and

executing a scheme to defraud the City and State of

revenues in the form of fines and penalties that would

potentially have become due had drivers been

convicted of the traffic offenses alleged in tickets that

local police had issued. The government’s theory was

that the judges of Traffic Court systematically gave

special “consideration” to favored litigants in their

court. (There was no accusation, however, nor any

evidence, that any of them took bribes or otherwise

profited from this alleged “scheme.”)

The present respondents filed or joined in pretrial

motions to dismiss the charges as failing to state a

cognizable theory of “property”-based mail and wire

fraud under 18 U.S.C. §§ 1341, 1343, and 1349. Their

pretrial motions were denied. Pet. Appx. 50–76.

1

Petitioners Henry Alfano and William Hird pleaded

guilty to the fraud charges under an agreement,

pursuant to Fed.R.Crim.P. 11(a)(2), allowing them to

preserve those issues for appeal. The appeal, however,

was unsuccessful. Pet. Appx. 1–23.

After a lengthy trial at which the particulars of

numerous alleged traffic violations were examined,

and at which the evidence showed that the judges had

wide discretion to show leniency to accused drivers

without strict regard for legal rules, the petit jury

acquitted the present respondents and the rest of

their co-defendants of all such charges. At the same

time, the jury convicted each of the respondents of one

or more instances of alleged false declarations before

the grand jury in violation of 18 U.S.C. § 1623, a kind

of perjury.

On appeal, respondents Tynes and Lowry argued

that the questions to which they allegedly responded

falsely were fundamentally ambiguous, and thus

immune from perjury prosecution under this Court’s

decision in Bronston v. United States, 409 U.S. 352

(1973), while Mulgrew argued that his responses were

literally truthful, measured against the ill-framed

questions he was asked. This, too, would require

reversal under Bronston. Tynes also invoked literal

truth as a defense for one of her answers.

The respondents further argued on appeal that the

overwhelming predominance of the fraud charges in a

trial that lasted more than a month, at which respondents were forced to confront and justify dozens of

past favorable dispositions of various minor traffic

tickets cherry-picked by the government to raise

suspicions about their integrity and fairness, prejudiced the jury’s ability to apply the rules of law to the

2

perjury charges, notwithstanding their eventual

acquittals on all the fraud counts. The Court of

Appeals did not reach this “prejudicial spillover”

argument, because it rejected on the merits the

Alfano-Hird argument for dismissal of the fraud

counts (referred to in the opinion below as “Sullivan’s

motion”). Pet. Appx. 26–27 n.24.1

In an amended opinion filed upon denial of

rehearing, the U.S. Court of Appeals for the Third

Circuit in a precedential opinion rejected all of the

respondents’ arguments challenging their perjury

convictions. Pet. Appx. 23–45. The court therefore

affirmed the two petitioners’ and three respondents’

convictions.

Petitioners Alfano and Hird petitioned this Court

for a writ of certiorari to challenge the rejection of

their attack on the mail fraud theory underlying this

case. Respondents Lowry, Mulgrew and Tynes petitioned separately (No. 18-1581), challenging the

____________________

Petitioner Tynes sought to participate with her codefendants in the pretrial dismissal motion by submitting a

proposed order allowing joinder. The court below held that

effort procedurally deficient and disallowed her attempt to

rely on it in support of the spillover prejudice argument on

appeal. See Pet. Appx. 27 n.25; but see Pet. Appx. 26–27 n.24

(accepting that Tynes joined the motion). If this Court grants

the instant Alfano-Hird petition and reverses, it should reject

the Third Circuit’s either self-contradictory or at least overly

punctilious refusal of Tynes’s joinder, and should remand her

case as well.

1

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affirmance of their perjury convictions.2 In that

petition (Point 3), they noted their standing to join

petitioner’s mail fraud arguments. They therefore

suggested that if this present petition is granted and

a reversal results, the affirmance of respondents’

convictions for perjury should also be vacated and

remanded to the Court of Appeals for further consideration of the merits of their spillover argument.

For the reasons discussed in this brief, supplementing those set forth in the petition itself, the

petition should be granted.

REASONS FOR GRANTING THE PETITION

1. The decision of the court below disregards

this Court’s precedent and conflicts with the

decisions of other circuits.

In case after case over the last 30 years, this Court

has reinforced the limiting construction that it placed

on federal mail and wire fraud prosecutions in

McNally v. United States, 483 U.S. 350 (1987), that is,

that a “scheme to defraud” requires a purpose to

obtain “property” from a victim by deceit or misrepresentation. If the object of a scheme is not to deprive

another of “money or property,” then there is no

____________________

The Solicitor General has waived response to the instant

petition. (As to the respondents’ separate petition, on the

other hand, No. 18-1581, the government requested an extension of time to respond.) For the reasons set forth in the

petition and those further reasons set forth herein, at the

very least this Court should reject the government’s waiver

and call for a response in petitioners’ case.

2

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offense under these laws.3 See Cleveland v. United

States, 531 U.S. 12 (2000).4 See also Loughrin v.

United States, 573 U.S. 351 (2014) (bank fraud);

Sekhar v. United States, 570 U.S. 729 (2013)

(extortion); Neder v. United States, 527 U.S. 1 (1999)

(mail and wire fraud).

The indictment in petitioners’ case charged “a

scheme to defraud the City of Philadelphia and

Commonwealth of Pennsylvania, and to obtain money

and property.” 2 CA3 Appx. 241a. The money in

question was alleged to be “funds to which the

Commonwealth and the City were entitled,” 2 CA3

Appx. 185a, that is, “money which would have been

properly due as fines and costs.” 2 CA3 Appx. 197a.

The indictment acknowledged that it was only

“[g]uilty adjudications” that “subjected a violator to

statutorily determined fines and costs of court ....” 2

CA3 Appx. 188a. From the “manner and means”

discussion and the overt act averments of the indictment’s introductory conspiracy count, see 2 CA3 Appx.

195–240a, it is apparent that the government did not

charge that fines and fees, once assessed and due to

the City or Commonwealth, were diverted elsewhere

(such as to the judges themselves). Rather, the theory

of the indictment is clearly that by failing, for

____________________

This case was not indicted under the “honest services”

extension enacted by Congress after McNally, see 18 U.S.C.

§ 1346, because there were no bribes or kickbacks. See

Skilling v. United States, 561 U.S. 358 (2010).

3

The mail fraud statute, despite some ambiguity in its

syntax, describes only one offense, which can be committed in

only this one way. See Loughrin v. United States, 573 U.S.

351, 359 (2014); Cleveland, 531 U.S. at 25–26; McNally, 483

U.S. at 358–59.

4

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improper reasons, to find certain drivers guilty of the

top charge, the judges fraudulently deprived the City

and Commonwealth of money.

As the Indictment states: “Traffic Court judges

had several options when disposing of citations,

including finding the ticketholder guilty of a different

offense, guilty, not guilty, not guilty in absentia,

guilty in absentia, guilty with reduction in speed, and

dismissal. In addition, the ticketholder could engage

in a plea bargain with the police officer or state

trooper or other law enforcement officer.” 2 CA3 Appx.

187a (italics per original). In other words, in each and

every case, there were at least five potential

dispositions, all facially lawful, that would result in

no money being due, or a lesser amount due, to the

City and Commonwealth, and only two (guilty and

“guilty in absentia”) that would produce the

maximum revenue.

The question – to put it in terms most favorable to

the government – is whether any fines and costs that

would have been assessed if the driver were found

guilty of the charge on the face of the ticket were

“property of” the City and Commonwealth before the

driver was adjudicated guilty.5 The indictment thus

sought to conceal its true gist, that is, an alleged

scheme to deprive the City and Commonwealth of the

judges’ “honest services” in the pre-McNally and preSkilling sense, that is, of the local governments’

supposed “right” to the benefit of a fair and impartial

____________________

5 Thus, the indictment in this case did not allege a scheme to

deprive local government of any sort of “right to control a

valuable asset, tangible or intangible,” that is also a kind of

property under such cases as Carpenter v. United States, 484

U.S. 19 (1987) (propriety business information is “property.”)

6

trial or hearing in each case. But of course that sort of

“right” is an intangible one, at best, and is certainly

not “money or property” that belonged to the City or

Commonwealth.

In Pasquantino v. United States, 544 U.S. 349

(2004), this Court elaborated on McNally and held (54) that a government’s “entitlement” to collect tax

revenues was a “property right” of which the

governmental entity could be deprived by a mail fraud

scheme. Pasquantino involved a scheme to smuggle

liquor into Canada without paying excise tax due to

Canada on the importation. The entitlement to the

tax was fixed when the liquor crossed the border, and

therefore already constituted “property” of which

Canada was to be deprived.

In Cleveland v. United States, 531 U.S. 12, 22–27

(2000), by contrast, the Court held that the state of

Louisiana was not deprived of “property” by a scheme

to corruptly obtain video poker licenses; the state had

no property interest in the licenses of which it was

deprived when the licenses were issued improperly.

Philadelphia and Pennsylvania likewise had no

“entitlement” to fines and costs, equivalent to that

involved in Pasquantino, until and unless a ticketed

driver was adjudicated guilty of some violation.

Although the Traffic Court was far from a formal

criminal tribunal, each accused driver was presumed

to be innocent until adjudicated or admitting otherwise. Pet. 15–16 (citing Pennsylvania case law).6 As a

result, the City and state had no established property

interest of the kind recognized in Pasquantino.

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6 Moreover, the Pennsylvania Vehicle Code expressly provides

that the various fines it establishes are due only in the event

of conviction. See, e.g., 75 Pa.Cons.Stat. §§ 3362, 6502(a).

7

These core principles cannot be reconciled with the

opinion of the court below. Petitioners’ scheme,

according to the Third Circuit, “obviate[d] judgments

of guilty that imposed the fines and costs,” thereby

“keeping (or taking) judgments out of the hands of the

Government to prevent the imposition of fines and

costs.” Pet. Appx. 20. But for the scheme, “money ...

would have been properly due as fines and costs.” Id.

(quoting indictment; emphasis amended). The court

below affirmed petitioners’ convictions on the impermissible basis that because the scheme, as alleged,

had the purpose of dishonestly preventing the City

from acquiring a property interest in the fines cognizable under Cleveland,7 the petitioners (and respondents) should be convicted to prevent them from

getting away with their (alleged) dishonesty. Pet.

Appx. 19 (“Appellants cannot rest on the very object of

their scheme (to work on behalf of favored individuals

to obviate judgments of guilt and the imposition of

fines and costs) as the basis to claim that there is not

fraud.”).

But the mail and wire fraud statutes address

schemes “for obtaining money or property,” 18 U.S.C.

§§ 1341, 1343, not for depriving or interfering with

the opportunity to acquire property. In other words,

the Court below reasoned, a “scheme” that did not

violate the statute should be a permissible basis of

____________________

7 The opinion notes that according to one overt act (a super-

fluous allegation under § 1349, which requires no overt acts),

a different defendant (not any of the petitioners or respondents) once undid an adjudicated ticket. Pet.App. 20 (citing 2

CA3 Appx. 228–29). Such misconduct, if it occurred, was

categorically different from the “scheme or artifice to defraud”

under the indictment’s charging language.

8

prosecution precisely because it has as its object

preventing a cognizable mail fraud crime from

occurring.

The standard applied below cannot be reconciled

either with this Court’s precedent or with the case

law of most of the circuits, thus requiring this Court’s

intervention. In particular, the decision of the court

below squarely conflicts with decisions of the Seventh

Circuit. In Ward v. United States, 845 F.2d 1459 (7th

Cir. 1988), the court of appeals affirmed the postconviction vacatur of a mail fraud decision based on

McNally. The defendant there was a lawyer who

bribed a judge to reach a favorable disposition of a

drunk driving case.8 As a result, Ward’s client’s bond

was refunded in full rather than after the deduction of

fines and costs. As the Seventh Circuit explained,

discussing Ward in a later case, “[T]hat a state might

have lost fines an honest judge might have imposed

had defendant not bribed [the] judge was insufficient

to establish a property right.” United States v.

Ashman, 979 F.2d 469, 479 (7th Cir. 1992) (failure to

execute trades at Chicago Board of Trades by open

outcry not deprivation of money or property within

fraud statute). See also United States v. Gimbel, 830

F.2d 621, 626 (7th Cir. 1987) (no property interest

where defendant deprived the Treasury Department

of accurate information and data that if properly

disclosed, “might have resulted in the Department

assessing tax deficiencies”).

The other circuits likewise properly focus their

analyses in similar cases on whether money or

____________________

8 As a post-McNally but pre-Skilling (and pre-§ 1346) case,

the “honest services” theory relied on by the government at

trial was not available to justify the conviction in Ward.

9

property is presently owing or legally due to the

victim, not whether money or property could or might

become due. The Second Circuit in a civil RICO case

based on alleged mail fraud similarly suggested that

it would reject the theory that “lost sales” could

constitute a property right in the victim’s hands

merely because it “may become property.”

To be clear, Empire's Amended Complaint also

alleges that its own lost sales were an “object of

the scheme.” We are skeptical that “lost sales”

in this context can constitute an object of the

scheme, however, because the “object of the

fraud” must be “ ‘property’ in the victim's

hands,” and “[i]t does not suffice ... that the

object of the fraud may become property in the

recipient's hands.” Cleveland, 531 U.S. at 15

(emphasis added). But our analysis of

proximate cause and thus the merits of the case

do not turn on this issue, so we decline to

resolve it.

Empire Merchants, LLC v. Reliable Churchill LLLP,

902 F.3d 132, 141 n.7 (2d Cir. 2018).

The Fifth Circuit has held similarly that unissued

tax credits are not “property” in the state’s hands

because the state “does not derive any benefit, gain,

or income from tax credits while it possesses them.”

United States v. Griffin, 324 F.3d 330 (5th Cir. 2003).

Likewise, the Ninth Circuit consistently holds that a

victim has property rights when money is legally due

to the victim, but not before. See, e.g., United States v.

Ali, 620 F.3d 1062 (9th Cir. 2010) (defendants’ scheme

to fraudulently obtain software for less than full

payment from third party distributors deprived

publisher of a property right because company had a

10

right to full payment if its software was sold outside

certain restrictions). While the state, in this case,

would have a property right to enforcement of a

judgment once entered by the judge, see Pet. Appx. 22

& n.20, it did not enjoy a property right to have any

particular judgment entered upon the later adjudication of a given ticket.

The opinion of the court below conflicts with this

Court’s precedent and with better-reasoned decisions

in several other circuits. It is also premised on a gross

intrusion of federal authority – wielding the bluntest

of instruments, a criminal indictment – into the

administration of a quintessentially local governmental institution, a traffic court. See Loughrin, 573

U.S. at 361–62; United States v Bass, 404 U.S. 336,

349 (1971). The indictment’s theory also presumes

that each ticket, once challenged, must be adjudicated

by a strict and rigid application of evidentiary rules

and literal construction of traffic laws, like some

idealized model of a felony trial in federal court. But

in fact the Philadelphia Traffic Court operated as a

“people’s court,” where leniency and mercy were regularly dispensed by non-lawyer judges assessing the

circumstances of ordinary citizens who may have

made forgivable mistakes in driving.

Worse yet, the indictment was premised on an

unconstitutional presumption of guilt, that upon

issuance of a ticket, without more, some fine or

penalty was automatically due to the city or state. See

Nelson v. Colorado, 581 U.S. —, 137 S.Ct. 1249 (2017)

(giving substantive constitutional effect to presump-

11

tion of innocence).9 This unacceptable presumption of

guilt as to the motorists was then echoed in the Third

Circuit’s decision, which appears to reason that the

defendants’ argument against the validity of the

indictment cannot be correct, simply because if it

were, then they would go free of conviction. Pet. Appx.

19.

Neither controlling precedent, nor constitutional

principles, nor fundamental fairness can tolerate such

a result. The petition should be granted.

2. This case offers an excellent vehicle for clarifying the Cleveland rule limiting overbroad

application of the mail and wire fraud statutes.

As shown under Point 1, the issues at stake in this

case are important, and the holding of the court below

conflicts with this Court’s precedent and the rulings

of other circuits. The record of the instant case also

offers a good vehicle for the discussion and resolution

of such questions. The petition arises upon the denial

of a motion to dismiss the indictment, and thus

presents a pure question of law on a closed record.

Moreover, after a lengthy trial, the jury entirely

rejected the government’s underlying theory of this

____________________

9 In legal terms, a traffic ticket is an accusation, no more. The

Third Circuit’s theory would convert every attempted obstruction of justice in a mandatory restitution case, for example,

into an indictable fraud on the alleged victim, regardless of

the defendant’s guilt or innocence of the offense with which

he was charged. For the same reason, almost any attempted

witness tampering in a drug case could be prosecuted as a

wire fraud with the object of depriving the United States of

the mandatory criminal forfeiture judgment that would result

from a conviction.

12

case, acquitting every defendant who stood trial of all

charges of mail and wire fraud. So far as the jury

could find, based on an extensive presentation of

direct and circumstantial evidence, there was no

fraud in the operation of the Philadelphia Traffic

Court,10 or at least not in these petitioners’ or

respondents’ courtrooms.

As the jury learned at trial, any tradition of

“consideration” that existed resulted not in corrupt

“ticket-fixing,” but only in the kind of lenient and

sympathetic outcomes in particular cases that might

eventuate anyway in such an informal, lawyerless,

minor local tribunal, simply from the accused drivers’

showing up and telling their stories. Protecting such

suspects from federal felony conviction is a basic goal

of the rule established by this Court in McNally and

applied in Cleveland.

The instant petition therefore presents an appropriate vehicle for resolution of the important question

presented.

____________________

Much less was there any bribery, as the government

appears to have suspected during the grand jury investigation but never charged, as the court below mentions. See Pet.

Appx. 32–33.

10

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CONCLUSION

For the foregoing reasons, in addition to those set

forth by petitioners Alfano and Hird, the petition for a

writ of certiorari should be granted.

Respectfully submitted,

PETER GOLDBERGER

Counsel of Record

PAMELA A. WILK

50 Rittenhouse Place

Ardmore, PA 19003

(610) 649-8200

peter.goldberger@verizon.net

Attorneys for Respondents

Lowry, Mulgrew & Tynes

LISA A. MATHEWSON

Law Offices of Lisa A. Mathewson, LLC

123 So. Broad St., Ste. 810

Philadelphia, PA 19109

(215) 399-9592

lam@mathewson-law.com

Attorney for Respondent Tynes

MEREDITH A. LOWRY

Klehr Harrison Harvey Branzburg, LLP

1835 Market St., Ste. 1400

Philadelphia, PA 19103

(215) 569-2700

mlowry@klehr.com

Attorney for Respondent Lowry

Dated: July 19, 2019

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