Facing Honest Services Fraud Charges in New York?

Honest services fraud is a federal crime that occurs when a public official or private employee deprives someone of their right to honest services through bribery or kickbacks.

Pursuant to 18 U.S.C. § 1346, the government must prove beyond a responsible doubt:

1. A Scheme to Defraud Through Bribes or Kickbacks
   
   1. The defendant participated in a plan to deprive someone of honest services
   2. The scheme involved bribes or kickbacks (not just conflicts of interest or self-dealing)
2. Intent to Defraud
   
   1. The defendant acted knowingly and with specific intent to deceive
   2. For public officials: They accepted something of value intending to be influenced in their official duties
   3. For private employees: They accepted bribes or kickbacks intending to breach their duty to their employer
3. Use of Mail or Wires
   
   1. The defendant used the U.S. mail, email, phone, or other wire communications to carry out the scheme
   2. The mailing or wire transmission must be in furtherance of the fraud

Who Can Be Charged?

Example 1: The Hospital CEO and the State Legislator

A hospital CEO creates a fake "consulting" job for a state legislator and pays him $40,000 per year through the hospital's payroll. In exchange, the legislator uses his position as chairman of the state budget committee to secure millions of dollars in state funding for the hospital, sponsors legislation that benefits the hospital, and arranges meetings between the CEO and powerful state officials.

What Makes This Honest Services Fraud?

• The Bribe: The legislator receives a salary for a fake consulting job (the quid)
• The Official Acts: The legislator directs state funding to the hospital, sponsors favorable legislation, and uses his official position to help the hospital (quo)
• The Exchange: The salary is paid in exchange for the legislator's official actions (quid pro quo)
• The Concealment: The legislator fails to disclose his payments from the hospital on required financial disclosure forms and doesn't tell other legislators he's being paid by the hospital when he advocates for it
• Use of Wires/Mail: Paychecks are mailed; emails are sent arranging meetings; the legislator mails false disclosure forms to state ethics officials

Example 2: The City Treasurer and the Waste Company Owner

A city treasurer accepts campaign contributions, gifts (like computers and copying services), and agrees to hire a friend as a highly-paid "consultant" from a waste management company owner. In exchange, the treasurer:

• Shows the owner the city's draft request for proposals before it's released
• Changes the request to favor the owner's company
• Gives the owner confidential information about competing bids
• Provides the owner with the secret questions that will be asked during the bidding process
• Assigns his friend to oversee the bidding process and tells him "my horse in the race" is the waste company

The waste company wins the $48 million contract.

What Makes This Honest Services Fraud?

• The Bribes: Campaign contributions, gifts, and a promise of a lucrative consulting contract (the quid)
• The Official Acts: Using his influence as treasurer to rig the bidding process in favor of the waste company (quo)
• The Exchange: The gifts and consulting contract are given in exchange for the treasurer's use of his official influence (quid pro quo)
• The Concealment: The treasurer doesn't disclose the gifts on required state disclosure forms
• Use of Mail/Wires: Checks are mailed; the false disclosure forms are mailed or faxed to state officials

What These Scenarios Have in Common

Both scenarios involve:

1. A public official (legislator, city treasurer): who owes a duty of honest services to the public
2. Payments or benefits: the salary, gifts, campaign contributions, consulting contracts
3. Official actions: directing state funding and  rigging a bidding process
4. A quid pro quo agreement: the payments are made in exchange for the official actions
5. Concealment: the official hides the payments or the true nature of the arrangement
6. Use of mail or wires: checks are mailed, emails are sent, forms are faxed

How We Fight Honest Services Fraud Charges in New York

Challenge Lack of Corrupt Intent / Good Faith Defense

Honest Services Fraud is a specific intent crime, requiring the government to prove the defendant acted knowingly, intentionally, and corruptly with the intent to defraud. The defense of good faith serves as a complete defense, as it directly negates this required intent; if the defendant genuinely believed their actions were proper, they lacked the corrupt state of mind necessary for conviction, even if they were mistaken. Thus, the legal focus is solely on the defendant's intent to deceive or cheat, not merely on whether they were careless, unwise, or technically breached a duty.

• Document your honest belief: Collect every email, text, meeting note, and internal communication showing you genuinely believed your actions were proper. The government must prove corrupt intent beyond a reasonable doubt, you don't have to prove good faith. 
• Prove you had no intent to deprive anyone of honest services: The government must prove you intended to deprive another of the intangible right of honest services. 
• Distinguish mistakes from fraud: Honest mistakes about business practices, regulatory requirements, or ethical obligations are not criminal. Being wrong is not a crime, lying is.

Challenge the Quid Pro Quo Requirement

This defense strategy directly challenges the necessary element of Honest Services Fraud that requires proving a bribe or kickback. The government must demonstrate a quid pro quo. This is an explicit agreement where a payment was exchanged for a specific "official act." The defense works by arguing that the interaction was merely legal access and influence (e.g., political favors or generalized appreciation) rather than a corrupt, explicit exchange. By showing the lack of a clear agreement for a specific official act, the defense negates the required corrupt intent needed to prove a bribe and secure a conviction.

• Separate legitimate relationship-building from bribery: Demonstrate actions (i.e., receiving gifts, setting up meetings, or attending events) as legitimate, common, and necessary relationship-building activities inherent to their role as an official or executive. Highlight the absence of any document, email, or testimony establishing a direct, explicit agreement ("I will vote for X if you give me Y"). If the communication only suggests a general hope for future support or assistance, it supports the argument that the action was based on vague influence, not a corrupt bargain.
• Challenge the specificity of the alleged quid pro quo: Arranging meetings, making phone calls, hosting events, and providing information are not official acts standing alone. See McDonnell, 579 U.S. at 572-74. The government must prove you made a decision or took action on a specific matter involving formal governmental power.
• Show no agreement existed: The quid pro quo can be express or implied, but there must be evidence of an understanding between you and the alleged briber. If you never promised to take specific action in exchange for benefits, there's no quid pro quo.
• Prove you would have taken the same actions anyway: It's no defense that an official would have taken certain actions regardless of any alleged bribe, but it's powerful evidence that no corrupt agreement existed. If you can show you consistently supported certain policies or took certain actions before receiving any benefits, it undermines the quid pro quo.
• Attack the "stream of benefits" theory: If the government relies on an "as opportunities arise" theory, demand proof that you understood, at the time you accepted benefits, the particular question or matter you were expected to influence.

Challenge the "Official Act" Element

• Show your actions were not “official acts’’: Arranging meetings, making phone calls, hosting events, and providing information are not official acts standing alone. The government must prove you made a decision or took action on a specific matter involving formal governmental power.
• Prove you had no authority over the matter: You can't commit an official act on a matter outside your control. If you lacked authority to make the decision the alleged briber sought, your actions weren't official acts.
• Distinguish advocacy from official acts: Merely advocating for a position, providing advice, or expressing support is not an official act unless you're using your position to exert pressure on another official to perform an official act.
• Challenge vague allegations: The government must identify the specific question or matter that was the subject of your alleged official act. If the indictment or evidence only shows you took actions “for the benefit of" someone without identifying a specific matter, it's insufficient.

Possible Sentencing & Penalties in New York

Maximum Penalties

• Prison Time: Up to 20 years
• Fine: Up to $250,000 (for individuals) or $500,000 (for organizations)
• Supervised Release: Up to 5 years (after you get out of prison)

Enhanced Penalties (if affects financial institution):

• If your honest services fraud "affects a financial institution," the penalties increase dramatically. You could face up to 30 years in federal prison and a fine of up to $1,000,000.

Key Points:

• Each separate use of mail or wire communications (email, phone call, text message, letter) can be charged as a separate count.
• Sentences for multiple counts can run consecutively (stacked on top of each other), not just concurrently (at the same time).
• You don't have to complete the fraud to be convicted; an "attempted" honest services fraud carries the same penalties as a completed one
• The government doesn't have to prove anyone actually lost money, depriving someone of honest services is enough.

Examples and Related Cases

Federal prosecutors in New York and elsewhere have always had a keen interest and robust investigations arm as it relates to honest services fraud and public corruption. Indeed, these two go hand in hand.

Our office recently represented an individual who was charged alongside a handful of others as it related to the public corruption taking place in and around Rikers Island in New York City. From a legal standpoint, our office was successful in pushing back on federal prosecutors’ characterization of our client’s specific title and role while also pushing back on several elements including the requisite “quid pro quo.” In doing so, we found a successful disposition for our client which avoided federal prison time.

Your Defense Begins Now

If you or a loved one is facing a subpoena, indictment, or investigation related to honest services fraud, contact The Law Offices of Jason Goldman immediately. We understand both the legal complexities and the human impact of these allegations. Having a strategic, creative, and relentless defense attorney can be the difference in protecting your rights, assets, and your future.