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United States v. Baroni

United States Court of Appeals, Third Circuit

November 27, 2018

UNITED STATES OF AMERICA
v.
WILLIAM E. BARONI, JR., Appellant UNITED STATES OF AMERICA
v.
BRIDGET ANNE KELLY, Appellant

          Argued: April 24, 2018

          On 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. Wigenton

          Syed Y. Latifi Matthew J. Letten Michael A. Levy [ARGUED] Michael D. Mann Nicholas M. McLean Sidley Austin LLP Counsel for Appellant Baroni.

          Henry W. Asbill BuckleySandler Jacob M. Roth [ARGUED] Charlotte H. Taylor Jones Day Michael D. Critchley Critchley, Kinum & Denoia, LLC Counsel for Appellant Kelly.

          Mark E. Coyne Bruce P. Keller [ARGUED] Office of the United States Attorney Counsel for Appellee.

          Before: AMBRO, SCIRICA, and SILER, JR. [*] , Circuit Judges.

          OPINION

          SCIRICA, Circuit Judge.

         Defendants 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 "Bridgegate."

         In 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.

         For 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.

         I.[1]

         In 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[2]-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.

         Among 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.

         Wildstein 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.

         Around 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.

         The 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).

         One 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 bid.

         In June 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.

         Wildstein 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.

         According 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."[3] 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.

         According 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.

         Wildstein 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 Durando.

         Durando 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.

         On the 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.

         As a 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. 1687-88.

         On the 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 situation.

         Executive 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. 1832.

         In 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.

         Then-Governor 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 prosecution.

         II.

         On April 23, 2015, a federal grand jury returned a nine-count indictment, charging Defendants with seven counts each.

         In 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.

         In 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.

         In 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.

         At the 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.[4]

         III.

         Defendants challenge the sufficiency of the evidence supporting their wire fraud and Section 666 convictions.

         "We 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.

         A.

         Defendants 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. § 1349.

         The 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 explained:

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. 5296.

         According 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.

         Defendants 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).

         For 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.

         1.

         Defendants 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.

         They 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.

         Defendants 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 disagree.

         As a 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.

         Defendants contend we cannot draw this inference because the trial judge declined to give a jury instruction based on Zauber.[5] We disagree. The judge instructed the jury that

[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.

         2.

         Defendants 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.

         Before 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.

         In 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.[6] But we need not decide that question because Defendants' arguments are unpersuasive under any standard of review.

         The 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.").

         Defendants 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.").

         The 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.").[7]

         Wildstein 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.

         Among 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.

         The 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.

         In 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.

         Amy 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.

         Victor 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.

         And 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 hours.

         Moreover, 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.[8]

         The 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 property.

         Although we need not reach or decide Defendant's arguments on the "right to control" theory[9] 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 ...


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