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United States v. Post

United States District Court for the Southern District of New York

May 31, 2013, Decided

Case No. 08-CR-243 (KMK)

Opinion

 [*522]  OPINION AND ORDER

KENNETH M. KARAS, District Judge:

Defendants Constance G. Post and Wayne Charles ("Defendants") were convicted in this Court, following a four-week jury trial, of one count each of mail fraud or honest services fraud and conspiracy to commit mail fraud or honest services fraud, in violation of 18 U.S.C. §§ 1341, 1346, and 1349. Defendant Charles was also convicted of one count of making false statements relating to the alleged schemes in violation of 18 U.S.C. § 1001. Defendants have filed a motion to dismiss the Indictment as to the mail fraud and conspiracy counts pursuant to Federal Rule of Criminal Procedure 12(b)(3), arguing that the Supreme Court's decisions in Skilling v. United States, 561 U.S. 358, 130 S. Ct. 2896, 177 L. Ed. 2d 619 (2010) and Black v. United States, 561 U.S. 465, 130 S. Ct. 2963, 177 L. Ed. 2d 695 (2010),  [**2] decided after their trial, undermine the basis for their convictions on the so-called "honest services"  [*523]  theory of mail fraud. Charles also seeks a new trial on the false statements count. For the reasons stated herein, the motion is granted in part and denied in part.

I. Background

A. Facts

1. The Indictment

From 1998 through 2005, Constance G. Post was the Commissioner of the Mount Vernon Department of Planning and Community Development and Executive Director of the Mount Vernon Department of Planning and Urban Renewal Agency ("MVURA") in Mount Vernon, New York ("the City"). (Indictment ¶ 1.) Her duties included, among other things, the supervision of these agencies; controlling, disbursing, and accounting for the funds the agencies received from the U.S. Department of Housing and Urban Development ("HUD"); making recommendations to the MVURA board for the allocation of MVURA's spending; and reviewing invoices submitted to the agencies by vendors and outside contractors. (Id.) During this time, Wayne Charles was an owner of investment properties in Mount Vernon. (Id. ¶ 4.) Post and Charles had a close personal and financial relationship. (Id. ¶ 5.)

The Indictment outlined three schemes  [**3] allegedly committed by the two Defendants, whereby Post helped Charles acquire funds her agencies had received from HUD or other business with the City of Mount Vernon. (Id.) First, between 1998 and 2002, Charles submitted proposals to provide computer services to the City through a company called "Micros Only," and Post recommended that the MVURA board accept the Micros Only bids (the "Micros Only scheme"). (Id. ¶ 7.) Unbeknownst to the MVURA board, however, "Micros Only," though at one time an actual computer services company, allegedly was a front company for another company created by Charles to receive payments on the City contracts, a company that had no experience in the computer industry. (Id. ¶ 8.) Post and Charles concealed from the City Charles's personal relationship with Post and also Charles's involvement with Micros Only. (Id. ¶ 9.) Second, in 1999 Post recommended that MVURA loan The Charles Group, a real estate development entity owned by Charles, $500,000 to develop a property it had purchased (the "$500,000 loan scheme"). (Id. ¶ 11.) Though the loan had various terms, including a requirement of interest payments, The Charles Group did not make the interest payments  [**4] until after federal investigators contacted Post in 2005, and Post did not enter the loan into MVURA's books and records until that time. (Id. ¶¶ 11-13.) Third, from 1999 to 2002, Post approved the disbursement of $40,000 of HUD money for services rendered by third parties on properties owned by Charles-controlled entities, again without disclosing her relationship with Charles. (Id. ¶¶ 14-15.)

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950 F. Supp. 2d 519 *; 2013 U.S. Dist. LEXIS 85698 **; 2013 WL 2934229

UNITED STATES OF AMERICA -v- CONSTANCE G. POST and WAYNE CHARLES, Defendants.

CORE TERMS

honest, convicted, Indictment, counts, deprive, mail fraud, cases, harmless, jury instructions, pecuniary, invalid, intangible right, instructions, spillover, false statement, vacated, fraudulent, bribe, fraud theory, kickback, artifice to defraud, prejudicial, conspiracy, bribery, plain error, kickback scheme, obtain money, overwhelming, undisclosed, contracts

Criminal Law & Procedure, Trials, Motions for Acquittal, Postconviction Proceedings, Motions for New Trial, Common Characteristics, Contents, Challenges, Content Requirements, Sufficiency of Contents, Indictments, Fraud Against the Government, Mail Fraud, General Overview, Governments, Courts, Judicial Precedent, Jury Instructions, Particular Instructions, Standards of Review, Harmless & Invited Error, Jury Instructions, Requests to Charge, Plain Error, Elements, Constitutional Law, Fundamental Rights, Procedural Due Process, Grand Jury Requirement, Criminal Offenses, Fraud, Surplusage, Evidence, Inferences & Presumptions, Presumptions, Creation, Appeals, Constitutional Rights, Joinder & Severance, Defective Joinder & Severance, Severance of Offenses