In the Courts

On appeal, defendants challenged, among other things, the sufficiency of the indictment. They argued that the indictment was insufficient because it failed to specify the money or property of which Fulton County was deprived. The indictment alleged that the defendants 'did knowingly and willfully devise and intend to devise a scheme and artifice to defraud Fulton County, Georgia, and its citizens of money and property and the good, faithful and honest services of defendant Michael DeVegter.' (emphasis added). The indictment further referred to ” 1343 and 1346, the money and property and the honest services wire fraud provisions, respectively.

According to the indictment, deVegter 'had a duty not to disclose confidential information received in his capacity as a financial advisory without Fulton County's permission.' The indictment specified that deVegter faxed a copy of Fulton County's early draft request for proposal to Poirier, and later faxed a copy of its nearly-final draft request for proposal to a third party, who in turn faxed it to Poirier. Moreover, the indictment alleged that deVegter obtained a copy of the proposal submitted by one of Lazard's competitors, which he faxed to Poirier.

Although the indictment did not expressly allege that the documents deVegter obtained and transferred were confidential, the Court of Appeals applied a 'common-sense' approach. The court explained, 'Anyone with a modicum of understanding about bidding processes knows that those kind of documents are confidential. Moreover, the indictment's charge that the conduct violated ' 1343 also indicates that they were.' Id. at *2.

In addition, the court also rejected the defendants' contention that the indictment was insufficient because the specified documents did not constitute property and therefore could not support a ' 1343 wire fraud conviction. The court explained that the confidential information had commercial value. Fulton County had an interest in keeping its draft requests for proposals confidential until they were issued, and it had an interest in keeping submitted bids confidential until all of them had been received. The court thus held that the indictment sufficiently alleged a deprivation of money and property under ' 1343.

Eleventh Circuit Rejects Challenge to Indictment in Bid-Rigging Scheme

United States v. Poirier, No. 01-15989, 2003 WL 302262 (11th Cir. Feb. 13, 2003).

Defendants Michael deVegter and Richard Poirier, Jr. appealed their conviction for money and property wire fraud in connection with their participation in a scheme to defraud Fulton County, GA. Defendants were indicted for their roles in corrupting the process by which Fulton County selected an underwriter for a bond refunding project. Fulton County hired deVegter to serve as its independent financial advisor as it solicited and evaluated proposals from competing underwriters for the project. Poirier was a partner with Lazard Freres & Co. (Lazard), which eventually was awarded the underwriting contract. In exchange for deVegter's secret assistance in ensuring that Lazard's proposal was selected, Poirier through an intermediary paid deVegter over $40,000.00. A grand jury indicted both deVegter and Poirier for conspiracy to commit wire fraud in violation of 18 U.S.C. ' 371; money-and-property wire fraud in violation of 18 U.S.C. ' 1343; and honest-services wire fraud in violation of 18 U.S.C ' 1346. The jury found both defendants guilty of conspiracy and of ' 1343 wire fraud.

On appeal, defendants challenged, among other things, the sufficiency of the indictment. They argued that the indictment was insufficient because it failed to specify the money or property of which Fulton County was deprived. The indictment alleged that the defendants 'did knowingly and willfully devise and intend to devise a scheme and artifice to defraud Fulton County, Georgia, and its citizens of money and property and the good, faithful and honest services of defendant Michael DeVegter.' (emphasis added). The indictment further referred to ” 1343 and 1346, the money and property and the honest services wire fraud provisions, respectively.

According to the indictment, deVegter 'had a duty not to disclose confidential information received in his capacity as a financial advisory without Fulton County's permission.' The indictment specified that deVegter faxed a copy of Fulton County's early draft request for proposal to Poirier, and later faxed a copy of its nearly-final draft request for proposal to a third party, who in turn faxed it to Poirier. Moreover, the indictment alleged that deVegter obtained a copy of the proposal submitted by one of Lazard's competitors, which he faxed to Poirier.

Although the indictment did not expressly allege that the documents deVegter obtained and transferred were confidential, the Court of Appeals applied a 'common-sense' approach. The court explained, 'Anyone with a modicum of understanding about bidding processes knows that those kind of documents are confidential. Moreover, the indictment's charge that the conduct violated ' 1343 also indicates that they were.' Id. at *2.

In addition, the court also rejected the defendants' contention that the indictment was insufficient because the specified documents did not constitute property and therefore could not support a ' 1343 wire fraud conviction. The court explained that the confidential information had commercial value. Fulton County had an interest in keeping its draft requests for proposals confidential until they were issued, and it had an interest in keeping submitted bids confidential until all of them had been received. The court thus held that the indictment sufficiently alleged a deprivation of money and property under ' 1343.