Argued: April 24, 2018
Appeal from the United States District Court for the District
of New Jersey (D.C. Nos. 2-15-cr-00193-001 and
2-15-cr-00193-002) District Judge: Honorable Susan D.
Y. Latifi Matthew J. Letten Michael A. Levy [ARGUED] Michael
D. Mann Nicholas M. McLean Sidley Austin LLP Counsel for
W. Asbill BuckleySandler Jacob M. Roth [ARGUED] Charlotte H.
Taylor Jones Day Michael D. Critchley Critchley, Kinum &
Denoia, LLC Counsel for Appellant Kelly.
E. Coyne Bruce P. Keller [ARGUED] Office of the United States
Attorney Counsel for Appellee.
Before: AMBRO, SCIRICA, and SILER, JR. [*] , Circuit Judges.
SCIRICA, Circuit Judge.
William E. Baroni, Jr. and Bridget Anne Kelly engaged in a
scheme to impose crippling gridlock on the Borough of Fort
Lee, New Jersey, after Fort Lee's mayor refused to
endorse the 2013 reelection bid of then-Governor Chris
Christie. To this end, under the guise of conducting a
"traffic study," Baroni and Kelly, among others,
conspired to limit Fort Lee motorists' access to the
George Washington Bridge-the world's busiest bridge-over
four days in early September 2013: the first week of Fort
Lee's school year. This scheme caused vehicles to back up
into the Borough, creating intense traffic jams. Extensive
media coverage ensued, and the scandal became known as
2015, a grand jury indicted Baroni and Kelly for their role
in the scheme. Each Defendant was charged with seven counts:
conspiracy to obtain by fraud, knowingly convert, or
intentionally misapply property of an organization receiving
federal benefits, 18 U.S.C. § 371, and the substantive
offense, id. § 666(a)(1)(A); conspiracy to
commit wire fraud, id. § 1349, and two counts
of the substantive offense, id. § 1343; and
conspiracy against civil rights, id. § 241, and
the substantive offense, id. § 242. A jury
convicted Defendants on all counts. They appeal only their
judgments of conviction.
reasons that follow, we will affirm Defendants' judgments
of convictions on the wire fraud and Section 666 counts but
will reverse and vacate their civil rights convictions.
2010, then-New Jersey Governor Chris Christie appointed
Baroni to serve as Deputy Executive Director of the Port
Authority of New York and New Jersey. That same year, David
Wildstein-a cooperating witness in this case-was hired to
serve as the Port Authority's Director of Interstate
Capital Projects, in which capacity he functioned as
Baroni's chief of staff.
its many functions, the Port Authority operates the George
Washington Bridge, a double-decked suspension bridge
connecting the Borough of Fort Lee, New Jersey, and New York
City across the Hudson River. On the bridge's upper deck,
twelve toll lanes carry traffic from New Jersey into New
York. During the morning rush hour, Port Authority police
place traffic cones to reserve the three right-most lanes-the
"Special Access Lanes"-for local traffic from Fort
Lee. This leaves the other nine lanes for drivers on the
"Main Line," which includes traffic from I-80 and
I-95. This practice of reserving Special Access Lanes was a
decades-long custom dating back to a political deal between a
former New Jersey governor and Fort Lee mayor.
testified he first became aware of the Special Access Lanes
in March 2011. He learned the three lanes were given to Fort
Lee by a former New Jersey governor to reduce local traffic
and "immediately thought that this would be . . . a
potential leverage point with [Fort Lee] Mayor [Mark]
Sokolich down the road." Joint App'x (J.A.) 1596.
Wildstein shared this observation with Baroni, Governor
Christie's then-Chief of Staff Bill Stepien, and Kelly,
then the Deputy Chief of Staff for New Jersey's Office of
Intergovernmental Affairs (IGA). Wildstein did not, however,
use the Special Access Lanes as leverage at that time.
the same time that Wildstein realized the Special Access
Lanes could be used as leverage, IGA officials-including
Kelly-were discussing a plan to solicit endorsements from
Democratic elected officials to generate bipartisan support
for Governor Christie's 2013 re-election bid. IGA
officials rewarded potential endorsers with, among other
things, "Mayor's Days" (meetings with top
departmental and agency staff) and invitations to sporting
events, breakfasts and parties at Drumthwacket (the
Governor's Princeton residence), and the Governor's
State of the State address.
Governor's Office and IGA used the Port Authority
similarly to bestow political favors on potential endorsers.
As Wildstein explained at trial, the Port Authority "was
viewed as the economic engine of the region" and
"had an ability to do things for Democratic officials
that would potentially put the Governor in a more favorable
position." J.A. 1522-23. Baroni and Wildstein were thus
asked "to assist the Governor's Office in
identifying opportunities that would be helpful." J.A.
1523. The Port Authority gave benefits ranging from gifts
(e.g., steel from the original World Trade Center towers,
flags that had flown over Ground Zero, framed prints) and
tours, to jobs, to large economic investments (e.g., the $250
million purchase of the Military Ocean Terminal at Bayonne).
Democratic endorsement sought by the Governor's Office
was that of Mayor Sokolich. IGA invited Sokolich to a New
York Giants game, several holiday parties, and one of
Governor Christie's budget addresses. And, as early as
2010, the Governor's Office and IGA directed Wildstein to
leverage the Port Authority's resources to obtain
Sokolich's endorsement. Sokolich received benefits
ranging from the sort of gifts described above to substantial
Port Authority assistance for Fort Lee (e.g., Port Authority
Police assistance directing traffic in Fort Lee, a $5, 000
contribution to the Fort Lee fire department for an equipment
purchase, and over $300, 000 in funding for four shuttle
buses providing Fort Lee residents with free transport
between ferry and bus terminals). Despite that, Sokolich
informed IGA in 2013 that local political considerations
precluded him from endorsing the Governor's reelection
2013, Kelly told Wildstein that she was disappointed Sokolich
would not be endorsing Governor Christie, and Wildstein
reminded her "if she want[ed] the Port Authority to
close down those Fort Lee lanes to put some pressure on Mayor
Sokolich, that that c[ould] be done." J.A. 1605. On
August 13, 2013, Kelly sent an email to Wildstein that read:
"Time for some traffic problems in Fort Lee."
Supplemental App'x (S.A.) 42. Wildstein "understood
that to mean it was time to change the lane configurations,
the upper level of the George Washington Bridge in order to
create traffic in the Borough of Fort Lee." J.A. 1612.
Wildstein testified that, on a follow up telephone call,
Kelly told him that "Mayor Sokolich needed to fully
understand that life would be more difficult for him in the
second Christie term than it had been [i]n the first."
J.A. 1620. Wildstein admitted at trial that he agreed to
change the lane configuration "[f]or the purpose of
causing-of punishing Mark Sokolich, of creating a traffic jam
that would punish him, send him a message," and that
there was no other reason for the change. J.A. 1621.
testified he told Baroni he "received an email from Miss
Kelly that [he] viewed as instructing [him] to begin to put
leverage on Mayor Sokolich by doing a lane closure."
J.A. 1618. He also testified he told Baroni "that Miss
Kelly wanted the Fort Lee lanes closed . . . [f]or the
purpose of punishing Mayor Sokolich . . . [b]ecause he had
not endorsed Governor Christie" and that "Mr.
Baroni was fine with that." J.A. 1623.
to Wildstein, he decided "to create the cover of a
traffic study" and shared his plan with both Baroni and
Kelly. J.A. 1624. Wildstein believed "calling it a
traffic study would provide a cover story for the true
purpose of changing and realigning that traffic pattern at
the bridge" and "to have a public policy reason for
doing so as opposed to saying it was political and it was
punitive and revealing the true purpose." J.A. 1632. In
furtherance of Defendants' traffic study cover story,
Wildstein contacted Peter Zipf, the Port Authority's
chief traffic engineer, and told him he wanted to take away
the cones that created the Special Access Lanes "so that
New Jersey could determine whether those three lanes given to
Fort Lee would continue on a permanent basis." J.A.
1657-58. Zipf responded later that day with various proposals
but recommended that at least one segregated lane be left in
place to prevent sideswipe crashes.
to Wildstein, he and Baroni discussed when to implement the
lane closure at the end of August 2013, and they selected
Monday, September 9, 2013-the first day of school in Fort
Lee. But Wildstein waited to give the instruction until
Friday, September 6. He testified "[i]t was a deliberate
effort on [his] part to wait until the last minute to give a
final instruction so that nobody at the Port Authority would
let Fort Lee know, would communicate that to Fort Lee or
anyone else within the Port Authority," including
Executive Director Patrick Foye. J.A. 1684. According to
Wildstein, he discussed waiting to give the instruction with
both Baroni and Kelly, who agreed. This directly contravened
normal Port Authority protocol, with any lane closures
announced to the public weeks, and even months, in advance.
gave the instruction to Zipf and two other Port Authority
managers, Bob Durando (the general manager of the George
Washington Bridge) and Cedric Fulton (the director of
Tunnels, Bridges & Terminals), again claiming that New
Jersey wanted to see whether the Special Access Lanes would
remain permanent. When Fulton asked if Foye knew, Wildstein
lied and said he did. Wildstein later told the same lie to
explained that because only one Special Access Lane would
remain open, the Port Authority needed to pay an extra toll
collector to be on relief duty for that sole toll collector.
Wildstein discussed this with Baroni and Kelly, and none of
the three saw a problem with this extra cost. Wildstein and
Zipf also discussed collecting data on the ensuing traffic,
and Wildstein testified he understood it would require
"some staff time." J.A. 1688.
morning of Monday, September 9, Port Authority police placed
traffic cones two toll booths to the right of where they were
customarily placed on the upper deck, thereby reducing the
number of Special Access Lanes from three to one, and
increasing the number of Main Line lanes from nine to eleven.
This realignment meant that Fort Lee's sole remaining
Special Access Lane had to accept both cash and E-ZPass,
further delaying traffic. As discussed, Fort Lee received no
advance warning of the change-contrary to the Port
Authority's standard procedures.
result of this change, cars attempting to cross the George
Washington Bridge during the morning commute backed up into
Fort Lee and gridlocked the entire town. Mayor Sokolich
repeatedly attempted to contact Baroni and IGA to have the
two other Special Access Lanes reinstated, but Baroni
deliberately did not respond. Wildstein testified "that
was the plan that [he] had come up with along with Mr. Baroni
and Miss Kelly, which is that all calls would be directed to
Mr. Baroni. And that Mr. Baroni would be radio silent.
Meaning any-all the calls would come to him, and he
wasn't planning on returning any of them." J.A.
morning of September 9, Mayor Sokolich called Baroni's
office about an "urgent matter of public safety in Fort
Lee," but received no response. S.A. 51. The Fort Lee
borough administrator also called to say Fort Lee police and
paramedics had difficulty responding to a missing child and a
cardiac arrest. The next day, the mayor called again, saying
the traffic was a "life/safety" issue and that
paramedics had to leave their vehicle and respond to a call
on foot. S.A. 54. Receiving no response to his calls, he then
sent Baroni a letter on September 12 detailing the negative
impact on public safety in Fort Lee. Kelly was similarly
unmoved by the traffic and the anger it generated, reportedly
smiling when a colleague at IGA informed her of the
Director Foye first learned of the realignment on the evening
of Thursday, September 12. The following morning, he sent an
email to Baroni and others, criticizing the "hasty and
ill-advised" realignment and ordering the restoration of
the prior alignment with three Special Access Lanes. J.A.
1100-02, 5809. Baroni went to Foye's office and asked
that the realignment be put back into effect, with only one
Special Access Lane for Fort Lee. Foye testified Baroni said
the issue was "important to Trenton," which Foye
understood to reference the Governor's Office. J.A.
1107-08. Foye refused to do so. Baroni returned to Foye's
office later that day, again asked that two of Special Access
Lanes be taken away from Fort Lee, and said the issue was
"important to Trenton" and "Trenton may
call." J.A. 1109. Foye held firm and continued to
refuse. Wildstein testified Baroni reached out to David
Samson, the New Jersey-appointed Chairman of the Port
Authority, to "overrule Mr. Foye and talk to others on
the New York side," but Samson ultimately declined to do
so, instead recommending Baroni "let it go." J.A.
response to significant public backlash, Baroni and Wildstein
began preparing a report that would describe what happened as
"a traffic study to determine whether it was fairer to
give three lanes to Fort Lee." J.A. 1870. The report
would also have admitted that the Port Authority had failed
to give Fort Lee appropriate notice due to an alleged
"communications breakdown." J.A. 1870. But the
report was never released because Port Authority staff were
asked to testify before the New Jersey State Assembly.
See J.A. 1879-80. Wildstein helped Baroni prepare
his testimony, which was based on the draft report and the
traffic study and "fairness" rationale.
Christie fired Wildstein on December 6 and Baroni on December
12. Kelly was fired on January 9, 2014. A federal criminal
investigation followed and resulted in the underlying
April 23, 2015, a federal grand jury returned a nine-count
indictment, charging Defendants with seven counts each.
Count 1, the grand jury charged Defendants with conspiracy to
obtain by fraud, knowingly convert, or intentionally misapply
property of an organization receiving federal benefits. 18
U.S.C. § 371. As charged, "[t]he object of the
conspiracy was to misuse Port Authority property to
facilitate and conceal the causing of traffic problems in
Fort Lee as punishment of Mayor Sokolich." J.A. 96. In
Count 2, Defendants were charged with the substantive offense
of that conspiracy. The grand jury alleged Defendants,
through Port Authority agents Baroni and Wildstein,
"obtained by fraud, otherwise without authority
knowingly converted to their use and the use of others, and
intentionally misapplied property owned by and under the
care, custody, and control of the Port Authority, with a
value of at least $5, 000." J.A. 119; 18 U.S.C.
§§ 666(a)(1)(A), 2.
Count 3, Defendants were charged with conspiracy to commit
wire fraud. 18 U.S.C. § 1349. The charged "object
of the conspiracy was to obtain money and property from the
Port Authority and to deprive the Port Authority of its right
to control its own assets by falsely representing and causing
false representations to be made that the lane and toll booth
reductions were for the purpose of a traffic study."
J.A. 120. In Counts 4 through 7, the grand jury charged each
Defendant with two substantive wire fraud violations. 18
U.S.C. §§ 1343, 2. Count 4 pertained to Kelly's
August 13, 2013 email informing Wildstein it was "[t]ime
for some traffic problems in Fort Lee," and Count 6 to
her September 9, 2013 email thanking Wildstein for confirming
there would be "[r]adio silence" from Baroni in
response to Mayor Sokolich's inquiries. J.A. 123 (second
alteration in original). Counts 5 and 7 related to
Baroni's September 9 and 12, 2013 emails to Wildstein
concerning complaints from Mayor Sokolich.
Count 8, the grand jury charged Defendants with conspiracy
against civil rights. 18 U.S.C. § 241. The charged
"object of the conspiracy was to interfere with the
localized travel rights of the residents of Fort Lee for the
illegitimate purpose of causing significant traffic problems
in Fort Lee to punish Mayor Sokolich." J.A. 124. In
Count 9, Defendants were charged with the substantive
violation. 18 U.S.C. §§ 242, 2.
outset, Defendants moved to dismiss all the charges.
See Fed. R. Crim. P. 12(b)(3)(B). The District Judge
held oral argument and denied the motions. After a six-week
trial, the jury found Defendants guilty on all counts.
Defendants moved for judgments of acquittal, see
Fed. R. Crim. P. 29, and for a new trial, see Fed.
R. Crim. P. 33. Again, the trial judge denied the motions.
She then sentenced Baroni to 24 months' imprisonment and
Kelly to 18 months' imprisonment. Defendants, who are
free on bail pending this appeal, challenge only their
judgments of conviction.
challenge the sufficiency of the evidence supporting their
wire fraud and Section 666 convictions.
exercise plenary review over a district court's grant or
denial of a motion for judgment of acquittal based on the
sufficiency of the evidence," United States v.
Willis, 844 F.3d 155, 164 n.21 (3d Cir. 2016), and we
apply the same standard as the district court, see United
States v. Ferriero, 866 F.3d 107, 113 n.4 (3d Cir. 2017)
(citing Jackson v. Virginia, 443 U.S. 307, 319
(1979)). "A judgment of acquittal is appropriate under
Federal Rule of Criminal Procedure 29 if, after reviewing the
record in a light most favorable to the prosecution, we
determine that no rational jury could have found proof of
guilt beyond a reasonable doubt." Willis, 844
F.3d at 164 n.21. Where sufficiency arguments give rise to
questions of statutory interpretation, our review is also
plenary. See Ferriero, 866 F.3d at 113 n.4.
challenge the sufficiency of the evidence underlying their
wire fraud convictions. "A person violates the federal
wire fraud statute by using interstate wires to execute
'any scheme or artifice to defraud, or for obtaining
money or property by means of false or fraudulent pretenses,
representations, or promises.'" Ferriero,
866 F.3d at 120 (quoting 18 U.S.C. § 1343). Conspiracy
to commit wire fraud is a separate crime subject to the same
penalties as the substantive offense. See 18 U.S.C.
Government's theory at trial was that Defendants sent
emails in furtherance of, and to execute, a scheme to defraud
the Port Authority of physical property (i.e., the Special
Access Lanes and toll booths) and money (i.e., public
employee labor) in order to carry out the lane reductions. In
summation, the Government explained this was the "same
money, the salaries, the same property, the lanes, the toll
booths," that it alleged Defendants fraudulently
obtained, knowingly converted, or intentionally misapplied in
violation of 18 U.S.C. § 666. J.A. 5195. The Government
The physical property that was misused were the local access
lanes, themselves, and the toll booths. . . . The defendants
agreed to use these Port Authority assets, that property, to
purposely create a traffic jam in Fort Lee. That agreement
was not a legitimate use of the George Washington Bridge, the
Port Authority's property.
J.A. 5193-94. The Government identified the "money"
as "the salaries of each of the employees who wasted
their time in furtherance of the defendants'
scheme," including "the salary paid to the overtime
toll booth collectors for the one remaining toll booth that
was accessible to Fort Lee," "the money paid to
Baroni and Wildstein themselves while they . . . [were]
wasting their time in furtherance of this conspiracy,"
and "money paid to the engineers who wasted time-and
Port Authority professional staff, who wasted time collecting
data that no one ever wanted." J.A. 5194. The Government
also invoked the costs the Port Authority incurred in redoing
a legitimate traffic study-at Center and Lemoine Avenues in
Fort Lee-that was spoiled by the gridlock and "would not
have been ruined without these lane reductions." J.A.
to the Government, Defendants' untruthful claim they were
conducting a traffic study was what allowed them to carry out
the lane reductions and to obtain the Port Authority property
and money necessary to do so. The Government also contended
Defendants conspired with each other and Wildstein in
furtherance of this fraudulent scheme.
argue the evidence was insufficient to prove a scheme to
defraud because (1) Baroni possessed unilateral authority
over Port Authority traffic patterns and any resources
necessary to implement his decisions, and (2) the Port
Authority was not deprived of any property right. In addition
to these challenges, Defendants contend the Government has
disguised an impermissible honest services fraud case as a
wire fraud case in an attempt to circumvent the Supreme
Court's decision in Skilling v. United States,
561 U.S. 358 (2010).
reasons that follow, we hold the Government presented
evidence sufficient to prove Defendants violated the wire
fraud statute by depriving the Port Authority of, at a
minimum, its money in the form of public employee labor.
principally argue they could not have committed fraud because
Baroni possessed the unilateral authority to control traffic
patterns at Port Authority facilities and to marshal the
resources necessary to implement his decisions.
previously raised this argument in moving both to dismiss the
indictment and for judgments of acquittal or a new trial.
Before trial, the District Judge declined to dismiss the wire
fraud counts on this basis, holding the existence and scope
of Baroni's authority was a question of fact for the
jury. After trial, the judge denied Defendants' motions
because that question was "one that the jurors resolved
in favor of the prosecution." J.A. 60. Carefully
reviewing the relevant witness testimony, the judge held
"the Government presented evidence at trial from which
the jury could reasonably have found that Baroni did not have
the authority to change the lane configurations, and in fact,
did defraud the Port Authority." J.A. 59. We agree.
rely on our opinion in United States v. Zauber, 857
F.2d 137 (3d Cir. 1988). There, the defendants were pension
fund trustees who received kickbacks for investing in a
mortgage company. See id. at 140-41. We held the
indictment failed to charge violations of the mail and wire
fraud statutes because it did not allege "an actual
money or property loss to the pension fund."
Id. at 147-48. In so holding, we observed, among
other things, that the defendants, "as trustees of the
pension fund, had the power and the authority to invest the
fund's monies with others." Id. at 147.
Likening Baroni to the pension fund trustees in
Zauber, Defendants argue "the undisputed
evidence showed that Baroni's position as co-head of the
Port Authority gave him authority to make unilateral
decisions about the alignment of traffic patterns at Port
Authority facilities, and to command the resources needed to
carry those decisions out." Baroni Br. at 42. We
preliminary matter, Zauber is inapposite because
here the grand jury alleged, and the Government proved at
trial, that the Port Authority was actually deprived of its
money and property. In any event, the evidence refutes the
notion Baroni possessed "unilateral" authority to
realign the bridge's lanes. To the contrary, it reveals
Defendants would not have been able to realign the lanes had
Baroni and Wildstein provided the actual reason or no reason
at all. They had to create the traffic study cover story in
order to get Port Authority employees to implement the
realignment. And, as we described above, Wildstein lied to
Port Authority officials Durando and Fulton about whether
Executive Director Foye knew of the realignment. This lie was
necessary to keep Foye in the dark and prevent him from
putting an immediate end to the scheme. In fact, that is
exactly what happened when he finally learned of the
realignment. Foye ordered the three Special Access Lanes be
restored to the use of Fort Lee motorists and refused
Baroni's repeated entreaties to reinstate the
realignment. Baroni then appealed to Chairman Samson, who
declined to intervene and overrule Foye's decision. This
evidence belies Defendants' assertion Baroni had anything
approaching "authority to make unilateral decisions
about the alignment of traffic patterns at Port Authority
facilities." Baroni Br. at 42. If that were so, Baroni
could have reinstated the realignment on his own without
needing to appeal to Foye and then Samson. That Baroni was
countermanded shows he lacked the unencumbered authority he
claims he possessed, and that he needed to lie to realign the
traffic patterns. The record contains overwhelming evidence
from which a rational juror could have reached these
conclusions. Indeed, it is difficult to see how any rational
juror could have concluded otherwise. The jury's verdict
necessarily reflects its rejection of Defendants'
argument that Baroni possessed unilateral authority to
control the bridge.
contend we cannot draw this inference because the trial judge
declined to give a jury instruction based on
Zauber. We disagree. The judge instructed the jury
[i]n order to establish a scheme to defraud, the Government
must also prove that the alleged scheme contemplated
depriving the Port Authority of money and property. An
organization is deprived of money or property when the
organization is deprived of the right to control that money
or property. And one way the organization is deprived of the
right to control that money and property is when the
organization receives false or fraudulent statements that
affect its ability to make discretionary economic decisions
about what to do with that money or property.
J.A. 5121-22. This instruction forecloses the possibility the
jury convicted Defendants of fraud without finding Baroni
lacked authority to realign the lanes. For Baroni could not
deprive the Port Authority of money and property he was
authorized to use for any purpose. Nor could he deprive the
Port Authority of its right to control its money or property
if that right to control were committed to his unilateral
discretion. In finding the existence of a scheme to defraud,
the jury necessarily concluded Baroni lacked authority to
order the realignment.
also argue the Port Authority was not deprived of any
tangible property and challenge the Government's and
District Court's invocation of the "right to
control" theory of property.
trial, the trial judge rejected Defendants' related
argument the charges should be dismissed because they did not
"obtain" money or property. Relying on our decision
in United States v. Al Hedaithy, 392 F.3d 580 (3d
Cir. 2004), the judge ruled "it [wa]s enough that they
prevented the Port Authority from exercising 'its right
to exclusive use of' its property, which here allegedly
includes toll booths and roadways, in addition to money in
the form of employee compensation and the costs of redoing a
traffic study." J.A. 36-37.
their post-trial motions, however, Defendants raised no
sufficiency arguments respecting the property at issue.
Rather, they contended only that Baroni possessed the
authority to realign the lanes. We note Defendants arguably
forfeited their right to raise these issues on appeal by not
presenting them to the District Court. But we need not
decide that question because Defendants' arguments are
unpersuasive under any standard of review.
wire fraud statute proscribes "scheme[s] or artifice[s]
to defraud, or for obtaining money or property by means of
false or fraudulent pretenses." 18 U.S.C. § 1343.
As Defendants note, the federal fraud statutes require the
defendants to scheme to defraud a victim of "property
rights." See McNally v. United States, 483 U.S.
350, 359-60 (1987) (holding that the mail fraud statute is
"limited in scope to the protection of property
rights"). Those property rights, however, need not be
tangible. See Carpenter v. United States, 484 U.S.
19, 25 (1987) ("[Confidential business
information's] intangible nature does not make it any
less 'property' protected by the mail and wire fraud
statutes. McNally did not limit the scope of §
1341 to tangible as distinguished from intangible property
rights."); United States v. Henry, 29 F.3d 112,
113- 14 (3d Cir. 1994) ("Carpenter made clear,
however, that although a property right is required under
McNally, it need not be a tangible one.").
argue they "did not deprive the Port Authority of any
tangible property." Kelly Br. at 40. "After
all," they say, "the Port Authority still owns all
of the lanes and tollbooths (and always has)."
Id. But even assuming arguendo Defendants
are correct, the federal fraud statutes are not limited to
protecting tangible property rights. "[T]o determine
whether a particular interest is property for purposes of the
fraud statutes, we look to whether the law traditionally has
recognized and enforced it as a property right."
Henry, 29 F.3d at 115; see also United States v.
Evans, 844 F.2d 36, 41 (2d Cir. 1988) ("That the
right at issue here has not been treated as a property right
in other contexts, and that there are many basic differences
between it and common-law property[, ] are relevant
considerations in deciding whether the right is property
under the federal fraud statutes.").
Government introduced ample evidence Defendants obtained by
false or fraudulent pretenses, at a minimum, public
employees' labor. Their time and wages, in which the Port
Authority maintains a financial interest, is a form of
intangible property. Cf., e.g., United States v.
Pintar, 630 F.2d 1270, 1282 (8th Cir. 1980)
("[T]here was evidence of concealment in connection with
the diversion of employee services. Assuming proof of fraud
is necessary, this suffices.").
testified that, on the Friday before the lane reductions, he
called Durando, the general manager of the George Washington
Bridge, and said he wanted to study traffic patterns and see
the effect of taking two lanes away from Fort Lee. Wildstein
told Durando the New Jersey side of the Port Authority wanted
to be able to "make a determination down the road as to
whether those [Fort Lee] lanes would stay on a permanent
basis." J.A. 1685. Of course, as Wildstein admitted at
trial, the traffic study rationale offered to Durando was not
the real reason for the realignment.
other things, Durando told Wildstein he would need to have a
relief toll worker on duty because all of Fort Lee's
traffic would be going through one lane. Wildstein testified
he "understood that the Port Authority would have to pay
for an extra toll collector to be on relief duty for that
first toll collector," J.A. 1686, and discussed this
cost with both Defendants. According to Wildstein, both
Baroni and Kelly found it humorous that the Port Authority
would have to "pay a second toll collector to sit and
wait in case the first toll collector had to go to the
bathroom," and they had no problem with the extra cost.
J.A. 1687. On Sunday, September 8, 2013, Wildstein emailed
Durando to say he would "be at [the] bridge early Monday
[morning] to view [the] new lane test." S.A. 49. Durando
replied that he would also be present, and that he had
"also brought a toll collector in on overtime to keep
toll lane 24 (the extreme right hand toll lane Upper level)
in the event the collector assigned to TL 24 needs a
personal." S.A. 49. Wildstein forwarded the email to
Baroni. On cross- examination, Baroni admitted he had
received the email and did not object to bringing in overtime
toll booth workers.
Government also called Theresa Riva, a Port Authority
employee who served as an Operations Planning Analyst for the
George Washington Bridge during the relevant time period. In
that capacity, Riva supervised time keeping for operations
staff and managed scheduling and coverage for toll
collectors. Riva testified she learned of the lane reductions
the Friday before, and Bob Durando "asked [her] to staff
one additional toll collector" on the upper level toll
plaza twenty-four hours a day. J.A. 2897. Because toll
collectors work eight-hour shifts, this meant "three
toll collectors a day to be an excess toll collector in the
toll house." J.A. 2897. Riva testified all these
additional toll collectors were paid an overtime rate
"[b]ecause they either worked on their regular day off
or in excess of eight hours, a double [shift]." J.A.
2898. Riva testified these employees would not have been paid
absent the lane realignment.
addition to the overtime toll workers, Wildstein discussed
with Zipf using Port Authority professional staff to track
data, which would include "numbers on how-how many cars
were involved and how far back the traffic was delayed."
J.A. 1688. Wildstein understood Zipf "would have to use
some staff time." J.A. 1688. At trial, the staff members
testified to the significant amount of time they spent
performing unnecessary work related to the realignment.
Hwang, Senior Operations Planning Analyst for the Port
Authority, testified she collected data on traffic at the
bridge and compared it to traffic on the same date the year
before. Hwang testified she spent two hours working on the
traffic study per day from Monday, September 9, through
Friday, September 13, for a total of 10 hours.
Chung, Senior Transportation Planner for the Port Authority,
was asked to forecast the impact of reducing Fort Lee's
Special Access Lanes from three to one. Chung testified he
spent a little over eight hours doing this analysis on the
Friday before the reductions went into effect. During the
week of the reductions, Chung was asked to compare travel
times approaching the bridge's upper-level toll plaza
during peak hours and to compare it to historical travel
times. Chung testified he spent about six hours on this
analysis, for a total of 14 hours spent on unnecessary work.
Umang Patel, Staff Service Engineer in the Port
Authority's Traffic Engineering department, downloaded
and analyzed data relating to travel time on the Main Line
during the lane reductions. Patel testified he spent two
hours discussing the lane reductions on Monday, September 9,
and four hours per day analyzing data on Tuesday, September
10, through Thursday, September 12, for a total of fourteen
Wildstein estimated he spent twenty-five to thirty hours
working on the lane reductions, and that Baroni spent fifteen
to twenty hours, for a total of forty to fifty hours. Their
compensation is plainly "money" for the purposes of
the wire fraud statute.
Government's evidence that Defendants fraudulently
conscripted fourteen Port Authority employees into their
service, and that Baroni and Wildstein accepted compensation
for time spent conspiring to defraud the Port Authority, is
alone sufficient for a rational juror to have concluded
Defendants deprived the Port Authority of its money or
we need not reach or decide Defendant's arguments on the
"right to control" theory in light of our holding, we
recognize this traditional concept of property provides an
alternative basis upon which to conclude Defendants defrauded
the Port Authority. As Baroni notes, "[i]ncluded within
the meaning of money or property is the victim's
'right to control' that money or property."
Baroni Br. at 41 (citing Al Hedaithy, 392 F.3d at
601-03); see Carpenter, 484 U.S. at 26-27 (holding
"[t]he [Wall Street] Journal had a property right in
keeping confidential and making exclusive use, prior to
publication, of the schedule and contents of the
'Heard' column" and that "it is sufficient
that the Journal has been deprived of its right to
exclusive use of the information, for exclusivity is an
important aspect of confidential business information and
most private property for that matter" (emphasis
added)); Al Hedaithy, 392 F.3d at 603 ("[T]he
deprivation in this case is identical to that asserted in
Carpenter, i.e., the deprivation of
ETS's right to exclusive use of its
property."); 2 William Blackstone, Comme ...