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Gratuities and Honest Services Fraud
As noted in Part One of this article, in Skilling v. United States, 130 S.Ct. 2896 (2010), the U.S. Supreme Court limited the scope of the honest services fraud statute (18 U.S.C. ' 1346) to “bribery and kickback” schemes, yet did not define what a “bribery” or “kickback” scheme must entail. So the question becomes this: Must a “bribe or kickback” involve a quid pro quo ' a specific intent to give or receive something in exchange for favorable official action? Or will payment of a gratuity as a reward for official action suffice to support a prosecution for honest services fraud? The debate continues.
Post-Skilling Uncertainty
In reviewing challenges to honest services fraud convictions after Skilling , some courts have referenced the broad definition of “kickback” under the Anti-Kickback Act and found that the government is not required to establish that an official act was taken in exchange for a payment. In United States v. Nicolo, 421 Fed. Appx. 57, 64 (2d Cir. 2011), the defendant, a town assessor, had pleaded guilty pre- Skilling to receiving money in connection with tax assessments, but in his allocution he had expressly disclaimed that the money was a quid pro quo for favorable treatment. The Second Circuit ' in a non-precedential opinion ' rejected his post-Skilling argument that his plea lacked a sufficient factual basis, holding that because the defendant “freely acknowledged receiving money in connection with the assessment reductions that he had arranged,” such conduct amounted to “kickbacks” sufficient to warrant prosecution under ' 1346. See also United States v. Yaron, 2011 WL 3279054, at *4 (S.D.N.Y. July 28, 2011) (stating that gratuities fall within the definition of a kickback under Skilling).
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