United States v. Morosco

822 F.3d 1, 2016 U.S. App. LEXIS 8753, 2016 WL 2756000
CourtCourt of Appeals for the First Circuit
DecidedMay 12, 2016
Docket15-1802P
StatusPublished
Cited by83 cases

This text of 822 F.3d 1 (United States v. Morosco) is published on Counsel Stack Legal Research, covering Court of Appeals for the First 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. Morosco, 822 F.3d 1, 2016 U.S. App. LEXIS 8753, 2016 WL 2756000 (1st Cir. 2016).

Opinion

THOMPSON, Circuit Judge.

Stage-Setting

Years back, Michael McLaughlin, James Fitzpatrick, and Bernard Morosco worked for the Chelsea Housing Authority (“CHA”), a public agency principally responsible for providing low-income housing in Chelsea, Massachusetts. McLaughlin served as CHA’s executive director, Fitzpatrick as CHA’s director of modernization, and Morosco as CHA’s paid consultant.

The federal Department of Housing and Urban Development (“HUD”) funds three of CHA’s properties — properties that have a combined total of about 350 housing units. As required by regulation, HUD periodically inspects a randomly-selected, “statistically valid sample of [ ] units” to help ensure that CHA’s federally-funded housing is “decent, safe, sanitary ... and in good repair.” See 24 C.F.R. §§ 902.22(e), 902.20(a). The Real Estate Assessment Center (“REAC”) — an agency within HUD — performs these evaluations, though it usually has REAC-trained independent contractors do the inspecting. Getting a high inspection score (90 or above) meant CHA would be considered a “high performer,” which meant fewer inspections (every two years rather than every year), less oversight, and more capital funding (a 3% annual increase). And CHA got designated a “high performer” in three consecutive inspections — in 2007, 2009, and 2011.

But not all was right at CHA, it turns out. McLaughlin abruptly resigned his post in 2011 after a newspaper reported that he made about $360,000 a year, even though he told state officials that he made $160,000. As he left, McLaughlin wrote *5 himself checks from CHA’s account for $200,000, supposedly for unused leave— talk about throwing gasoline on a fire!

McLaughlin’s salary scandal sparked a criminal investigation that led agents to Vitus Shum, CHA’s finance director. Shum copped to helping McLaughlin with the salary scheme. Receiving immunity, Shum also later told agents about how he and others at CHA had rigged the HUD inspections. And his revelations helped a grand jury indict McLaughlin, Fitzpatrick, and Morosco for “knowingly and unlawfully” conspiring to defraud the United States and its agency, HUD — a violation of 18 U.S.C. § 371, which makes it a crime for “two or more persons [to] conspire either to commit any offense against the United States, or to defraud the United States, or any agency thereof in any manner or for any purpose.” As for the indictment’s allegations, all you need to know is this: Morosco was a REAC-inspection consultant — though he principally advised housing authorities on how to handle the REAC-inspection process. And using his REAC-inspector status, he (the indictment added) accessed the REAC database and software, figured out the sample of CHA units to be inspected, and passed the information on to Fitzpatrick, McLaughlin, or both — allowing CHA employees to get those units up to snuff before the inspectors came a-ealling.

McLaughlin pleaded guilty and got a 12-month prison sentence and a $3,000 fine, on top of the 36 months he previously got for pleading guilty to charges stemming from his salary chicanery. He did not testify at Fitzpatrick and Morbsco’s seven-day trial — Fitzpatrick did, but Morosco did not. A jury found them guilty as charged. And a judge later sentenced Fitzpatrick to 3 months in prison, plus 1 year of supervised release, and Morosco to 6 months in prison, followed by 1 year of supervised release.

Fitzpatrick and Morosco now appeal. Between them, they raise a battery of arguments — though not every one requires a lot of analysis. To make the opinion easier to follow, we organize our discussion thematically, issue-by-issue, providing more background as needed. And — spoiler alert — after working through their claims, we affirm.

Void-for-Vagueness Claim

Fitzpatrick and Morosco complain that section 371’s defraud clause— criminalizing any conspiracy “to defraud the United States, or any agency thereof in any manner or for any purpose” — is unconstitutionally vague as applied to them. For those not in the know, a law is unconstitutionally vague if it fails to give ordinary people fair notice of what is forbidden, or if it fails to give the designated enforcers (police, prosecutors, judges, and juries) explicit standards (thus creating a risk of arbitrary enforcement). See Welch v. United States, — U.S.-, 136 S.Ct. 1257,-, 194 L.Ed.2d 387, at *3 (2016). Of course the requisite fair warning can come from judicial decisions construing the law. See, e.g., United States v. Lanier, 520 U.S. 259, 266, 117 S.Ct. 1219, 137 L.Ed.2d 432 (1997). And judges have no business junking a statute simply because we could have written it “with greater precision.” Rose v. Locke, 423 U.S. 48, 49, 96 S.Ct. 243, 46 L.Ed.2d 185 (1975).

Helpfully, both sides agree — rightly— that Fitzpatrick and Morosco preserved their vagueness claim below (via a motion to dismiss the indictment) and that our review is de novo. See, e.g., United States v. Hussein, 351 F.3d 9, 14 (1st Cir.2003). Also helpfully, both sides concede that *6 binding precedent squarely forecloses this claim. 1 And we second that assessment.

Start with Fitzpatrick’s and Mor-osco’s most loudly trumpeted point. As they tell it, section 371’s “defraud” clause only bans conspiracies to deprive the government of property and money by dishonest schemes, a reading (they add) that jibes with the common-law understanding of “defraud.” And such a reading would help them (they continue) because they never scammed the government out of property or money. Unhappily for them, years’ worth of Supreme Court precedent holds that section 371 “is not confined to fraud as that term has been defined in the common law,” see Dennis v. United States, 384 U.S. 855, 861, 86 S.Ct. 1840, 16 L.Ed.2d 973 (1966); that defrauding the government under section 371 means obstructing the operation of any government agency by any “deceit, craft or trickery, or at least by means that are dishonest,” see Hammerschmidt v. United States, 265 U.S. 182, 188, 44 S.Ct. 511, 68 L.Ed. 968 (1924); and that the conspiracies need not aim to deprive the government of property or money, see id., because the act is written “broad enough ... to include any conspiracy for the purpose of impairing, obstructing, or defeating the lawful function of any” government “department,” see Haas v. Henkel, 216 U.S. 462, 479, 30 S.Ct. 249, 54 L.Ed. 569 (1910). Ever faithful to high-Court holding, our caselaw rejects the idea that section 371 only bars conspiracies to defraud the government out of property or money. See United States v. Barker Steel Co.,

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Cite This Page — Counsel Stack

Bluebook (online)
822 F.3d 1, 2016 U.S. App. LEXIS 8753, 2016 WL 2756000, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-morosco-ca1-2016.