It’s all over the newspaper today, with headlines like “BombShel” and “Silver Lining Crook Book,” that the long-time Speaker of the New York State Assembly, Sheldon Silver, has been hit with fraud and corruption charges by U.S. Attorney for the Southern District of New York, Preet Bharara. Everyone is talking about the accusations – Silver allegedly received millions of dollars over about a dozen years from two law firms for referrals in exchange for political favors. But what, exactly, is Silver charged with?
Silver has been charged with five counts in a criminal complaint. First, keep in mind that a criminal complaint is merely the beginning of a criminal prosecution in federal court. In order for the U.S. Attorney’s Office to pursue this case, they will have to present evidence before a grand jury, which would have to vote an indictment. Only then could the case proceed to trial. Many have said that the government could indict a ham sandwich – and in this case, given the details in the criminal complaint, appears to be a likely scenario.
One other possibility is that Silver could enter into a plea bargain with the U.S. Attorney’s Office and plead guilty to what is called an Information. It has the same legal power and effect as an indictment, but would not require the U.S. Attorney to present evidence to a grand jury. Only time will tell which way it will go.
But as for the charges, here’s what Silver currently faces. The U.S. Attorney’s Office has charged him with:
Honest Services Wire Fraud under Title 18, United States Code, Sections 1343 and 1346;
Honest Services Mail Fraud under Title 18, United States Code, Sections 1341 and 1346;
Conspiracy to Commit Honest Services Mail Fraud under Title 18, United States Code, Section 1349;
Hobbs Act Extortion under Title 18, United States Code, Section 1951; and
Conspiracy to Commit Hobbs Act Extortion under Title 18, United States Code, Section 1951.
Let’s break that down.
First, what is “honest services” fraud? Well, under Section 1346 of Title 18, the term “scheme or artifice to defraud” includes “a scheme or artifice (a plan to deceive) to deprive another of the intangible right of honest services.” This provision was enacted in 1988 to combat rampant political corruption throughout the country. At its core, it means that anyone who owes the public a duty because of an oath or affirmation cannot deceive or defraud anyone in violation of that oath, thereby failing to abide by their public duty.
In other words, politicians, elected officials, and other public officials (who work for the government) cannot lie, cheat, or steal to gain political favor, or to benefit themselves by fraudulent means which include the use of their public office to commit the offense.
So here, the government’s theory in the first two counts (Wire and Mail Fraud) is that Silver used or cause the use of “wires” and the “mail” (basically, he used, or caused another to use the internet and the U.S. mail) during the course of his fraudulent scheme and that his fraudulent scheme involved his “selling” of his public office for his personal, economic, benefit.
And assuming the allegations to be true, that is exactly what Silver is accused of. First, it is alleged that he traded New York State funds ($500,000) in exchange for legal referrals so that he could get millions of dollars from legal settlements. Second, it is alleged that he traded political favors, in the form of beneficial legislation, to real estate developers in exchange for legal referrals, again, so he could get hundreds of thousands of dollars from legal proceedings.
To fulfill the elements of the Mail Fraud and Wire Fraud counts, the government has to allege that Silver, during the course of his fraud, he used, or caused someone else to use some form of wire communication (such as the internet) in interstate commerce (such as an email from one state to another) and that he used, or caused someone else to use the mail. Importantly, the government does not have to prove that the wire or the mailing itself was fraudulent, or illegal. It merely has to prove that they were used during the course of the fraudulent scheme.
Silver is also charged with Conspiracy to Commit Mail Fraud. This relates to the second named scheme, involving the real estate developers. Interestingly, Silver was not charged with a Conspiracy to Commit Wire Fraud, which related to the New York State funds transfers. This is likely because the government was able to identify (and use the information of) a co-conspirator – namely the real estate lawyer who received the referrals from Silver. Conspiracy is what is known as an inchoate crime – a person is guilty merely if he agrees with another to commit a federal offense. Here, Silver is accused of agreeing with that attorney to deprive the public of the knowledge of Silver’s deal to refer cases to the attorney in exchange for favors to the real estate developers who sent the work Silver’s way.
Finally, Silver is charged with what is known as Hobbs Act Extortion and Conspiracy to Commit Hobbs Act Extortion. At first glance, one might wonder, who did Silver “extort?” How could he be guilty of extortion if everyone involved agreed to and approved of his conduct?
Well, Section 1951 indicates that anyone who “obstructs, delays, or affects commerce” by “extortion” or “conspires to do so” is guilty of a crime. It further details, in Section 1951(b)(2), that “extortion” means “the obtaining of property from another, with his consent, induced…under color of official right.”
According to that definition, assuming the allegations in the complaint to be true, that is exactly what Silver did – he persuaded people to transfer money in commerce in exchange for political favors; in other words, under color of official right – that Silver had a “right” do it.
Hopefully this helps explain in more detail, not just what Silver is accused of doing, but what the charges against him truly mean. One more bit of information. For each of these offenses, Silver faces up to 20 years in jail.