Second Circuit Doubles Down on Expansive Application of Federal Fraud Statutes
In United States v. Percoco, the Second Circuit (Raggi, Chin, Sullivan) the Second Circuit affirmed the convictions of several defendants involved in the so-called “Buffalo Billion” scandal. The charged crimes included three distinct schemes. One involved bid rigging by a lobbyist, his clients, and an individual with sway over awarding contracts under the project. The other two involved a former aide to Governor Andrew Cuomo, Joseph Percoco, who was charged with helping two companies achieve their business goals by using his influence over state officials. While the allegations are redolent of public corruption in New York State government, these schemes do not comfortably sit within the traditional purview of federal wire, mail, and honest services fraud. In two separate, lengthy opinions, the Circuit upheld the convictions in their entirety, stretching the federal fraud statutes to their limits in order to affirm. Although there is nothing more destructive to a democracy than the public’s loss of faith in its elected officials’ willingness to put the public good over private interests, we express some concerns about the approach taken by the Court in these decisions.