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State Senator’s Conviction Upheld but Resentencing Ordered by the Court

August 25, 2011

State Senator's Conviction Upheld But Resentencing Ordered By The Court

On August 23, 2011, the U.S. Court of Appeals for the Third Circuit upheld the political corruption conviction of high-profile Pennsylvania State Senator Vincent Fumo, but ordered that he must be resentenced.  The Court's ruling is yet another chapter in the eight-year saga of Senator Fumo's investigation and prosecution, which the Court called "one of the largest political scandals in recent state history".  During his 30 years in the Pennsylvania Senate, Senator Fumo became one of the most powerful figures in the state.  Senator Fumo frequently used publicly paid Senate employees to organize his political fundraisers and mailings, process bills for business accounts and handle various aspects of his personal finances.  Senator Fumo's aides acted as his housekeeper, drove him from place to place, managed the refurbishment of his 33-room house, ran his personal errands and even drove his daughter to school.  Senator Fumo also founded a non-profit organization known as Citizen's Alliance for Better Neighborhoods, which he used for his personal benefit.  On July 14, 2010, a United States District Court Judge sentenced Senator Fumo to 55 months imprisonment, a $411,000.00 fine and $2,340,839.00 in restitution arising from his jury conviction on 137 counts of fraud, tax evasion and obstruction of justice.  The sentencing sparked wide-spread criticism because the trial judge departed downward from the applicable federal Sentencing Guidelines in calculating how much time Senator Fumo should spend in prison.  The trial judge cited Senator Fumo's charitable service and good works on behalf of the public in imposing a more lenient sentence.  The government appealed Senator Fumo's sentence arguing that the trial judge made numerous procedural errors.  Senator Fumo also appealed seeking to have his conviction overturned.

The Court of Appeals rejected Senator Fumo's arguments that he was entitled to a new trial based on jury partiality and the trial judge's admission of certain evidence.  Regarding Senator Fumo's sentence, however, the Court of Appeals concluded that the trial judge committed several errors in determining the proper sentence.  Specifically, the Court of Appeals determined that the calculation of the loss attributable to Senator Fumo's fraud was not $2.5 million dollars but closer to $4 million dollars.  Also, the Court found that the trial judge should have enhanced Senator Fumo's Sentencing Guidelines offense level by two levels because he acted on behalf of a charitable organization, and two more levels for using sophisticated means in carrying out his fraud.  As a result, the Court of Appeals remanded Senator Fumo's case to the trial judge for resentencing. 

Senator Fumo has already served two years of the sentence originally imposed by the trial judge.  Although it is not a foregone conclusion that the judge will now impose a longer sentence for Senator Fumo, the consequences of the Court of Appeals decision could be just that.     

Third Circuit Upholds "Judicial Immunity" In Fraud Case

Last week, the U.S. Court of Appeals for the Third Circuit in Philadelphia upheld the decision by the U.S. district court to grant judicial immunity to a defense witness in the largest affirmative-action fraud case in Pennsylvania history.  Judicial immunity permits a judge to grant a critical witness immunity on behalf of the defense.  Significantly, the Third Circuit Court of Appeals is the only federal appeals court that recognizes this power. 

The Court's decision occurred in the context of a case involving an alleged $119 million dollar minority contracting fraud.  The indictment, returned in 2008, alleges that between 1992 and 2007, Schuylkill Products, a family business that manufactured concrete beams used for highway bridges and overpasses, used a shell company owned by a Filipino immigrant to comply with the federal requirement that a certain percentage of highway, bridge, and mass transit projects be contracted to small or minority-owned companies.  During the trial of Joseph Nagle, the president of Schuylkill Products, his lawyers subpoenaed a co-defendant to testify who had previously pleaded guilty.  The co-defendant invoked his Fifth Amendment privilege against self incrimination as he was yet to be sentenced in the case.  When the prosecutor refused to grant the co-defendant immunity to testify, Mr. Nagle's lawyers asked the U.S. district court to grant the co-defendant immunity as his testimony was critical.  The district court granted the immunity request and compelled the co-defendant to testify.  The Court of Appeals ruled that the district court did not abuse its discretion in granting the immunity. The appellate court's ruling is consistent with its earlier ruling in Government of the Virgin Islands v. Smith, 615 F.2d 964 (3d Cir. 1980), and  is expected to result in more such immunity requests in the future from criminal defense counsel.