United States v. Gordon

183 F. App'x 202
CourtCourt of Appeals for the Third Circuit
DecidedJune 8, 2006
Docket05-3927
StatusUnpublished
Cited by3 cases

This text of 183 F. App'x 202 (United States v. Gordon) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Gordon, 183 F. App'x 202 (3d Cir. 2006).

Opinion

OPINION

McKEE, Circuit Judge.

The government appeals the District Court’s dismissal of counts of an indict- *204 merit that was returned against Thomas P. Gordon and Sherry L. Freebery charging them with honest services fraud. 1 Gordon is the County Executive for New Castle County, Delaware, and Freebery is that county’s County Chief Administrative Officer (“CAO”). The counts dismissed refer to conduct the government alleges was part of a scheme it refers to as the “Field-stone Conflict of Interest Cover-Up Scheme” (“Fieldstone Scheme”). 2 The court also struck allegations pertaining to the scheme from the remaining counts of the indictment, and the government filed this appeal.

For the reasons set forth below, we conclude that the District Court erred in ruling that the government had not properly alleged honest services fraud. Accordingly, we will reverse the order dismissing counts of this indictment and remand to the District Court for further proceedings consistent with this opinion with instructions to reinstate those portions of the indictment that the court dismissed.

I. FACTS AND PROCEDURAL HISTORY

As alleged in the relevant portions of the indictment, defendants Gordon and Freebery devised and participated in a scheme to defraud New Castle County and its citizens of the intangible right to their honest services. Freebery allegedly was “loaned” millions of dollars by Lisa Dean Moseley when Moseley was developing the Fieldstone golf course in New Castle County (“Fieldstone Project”). Indictment, Count I, 1119. The project needed various County approvals, including a permanent certificate of occupancy. According to the indictment, after Freebery received the “loan” from Moseley:

Freebery ... used the powers of her office to assist [Moseley] in connection with the Fieldstone Project and then Freebery and Gordon caused the removal of County records relating to the Fieldstone Project from County files, the falsification of County records relating to the Fieldstone Project, the use of the services of County employees, and the expenditure of more than $44,000 in County funds to hire lawyers to prevent the discovery of Freebery’s financial relationship with [Moseley] and her involvement in the County’s review of the Fieldstone Project.

Indictment, Count 1,1Í19.

Specifically, Paragraph 20 of Count I charges that on or about October 4, 2000, Freebery caused her son, Patrick Duffy, to receive $500,000 from Moseley, in return for which, Duffy executed an interest-free, unsecured promissory note in that amount that was payable on demand. The note contained no schedule for repayment of principal. On or about October 5, 2000, Duffy allegedly gave Freebery a check for $400,000 of the $500,000 he had received from Moseley. According to the government, on January 1, 2001, Freebery caused Duffy to execute a second unsecured promissory note for $500,000, which was also payable on demand, and required no scheduled repayment of principal. However, unlike the first note, this note purportedly required an annual interest payment *205 at the rate of 5.9% payable on December 31 of each successive year.

Paragraph 20 of the indictment also charges that on or about January 26, 2001, Freebery executed a promissory note for $2.3 million that she knew she would receive from Moseley. Like Duffy’s second promissory note, it was unsecured, payable on demand, and required no scheduled repayment of principal. It also provided for annual interest payments at the rate of 5.9%. On or about January 26, 2001, Freebery purportedly received a wire transfer from Moseley of $1.3 million, and on or about February 1, 2001, she purportedly received another in the amount of $1 million.

Paragraph 21 charges that, as part of the scheme to defraud, Freebery “would and did intervene in the County’s review of the Fieldstone Project.” According to the indictment, on or about March 29, 2001, Freebery received a handwritten telephone message from a County employee, stating, “ ‘SOS’ Please call asap — needs help w/Fieldstone. Did not want me to act as intermediary. Wanted to hear from you.” In May, 2001, Freebery allegedly directed “C.B.,” a County employee in the Land Use Department, to find out why the Fieldstone Project had not yet received a permanent certificate of occupancy for its clubhouse. She also allegedly directed the Land Use Department to help the Field-stone Project obtain the permanent certificate of occupancy. On or about May 29, 2001, Freebery allegedly caused “J. S.” and “G.H.,” two Land Use Department employees, to issue the certificate for Fieldstone. G.H. provided Freebery with the County’s copy, on which he had written: “Chief, We Deliver, [G.].” Indictment, Count 1,1121.

According to the indictment, in furtherance of the scheme, Freebery failed to disclose that she had received more than $5,000 from Moseley through Duffy on her May, 2001 Statement of Financial Interests (“SFI”). Indictment, Count I, 1122. The indictment further alleges that, from about September, 2001 through May, 2002, knowing Freebery would have to disclose her financial relationship with Moseley on her 2001 SFI that was to be filed in May of 2002, Gordon and Freebery used County resources, including County funds, to retain outside lawyers in an attempt to avoid disclosing the relationship. Freebery purportedly caused the County Law Department to argue before the County Ethics Commission that it should adopt an interpretation of the Ethics Code which would have made her SFI unavailable to the public. Indictment, Count I, 1123. Gordon and Freebery also caused “K.V.,” a member of the County Council, to send a letter to the Ethics Commission to persuade it not to disclose the CAO’s SFI to the public. Indictment, Count I, H 23.

The government further alleged that Gordon and Freebery engaged in efforts to cause County employees to undermine an investigation by the News Journal, a local newspaper. The paper was investigating Freebery’s financial relationship with Fieldstone’s owner and whether Freebery had intervened in the County’s review of the Fieldstone Project. According to the indictment, Gordon and Freebery directed J.S. and C.B. to remove a memo dated March 24,1999 addressed to Freebery and outlining the chronology of the County’s review of the project from the County’s Fieldstone file. That allegedly was done “in response to [Freebery’s] request.” Indictment, Count I, 1124. On January 18, 2002, Freebery allegedly caused J.S. to create a memorandum for the News Journal falsely stating that J.S. did not recall conversations with Freebery and suggesting Freebery was not involved in any decision J.S. made regarding the Fieldstone *206 Project. It is further alleged that, on January 29, 2002, Freebery caused J.S. to prepare another memo for the News Journal stating: “there was no influence on any decisions [J.S.] made on the Field-stone application.” Indictment, Count I, H 24. Gordon and Freebery then allegedly used outside lawyers retained by the County for a fee in excess of $30,000, to threaten the News Journal

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Cite This Page — Counsel Stack

Bluebook (online)
183 F. App'x 202, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-gordon-ca3-2006.