by Van Smith
Published by City Paper, Nov. 16, 2011
Seventeen years after his 1994 convictions for mail fraud, Maryland lobbyist Bruce Bereano is looking to clear his name. He’s doing so based on last year’s U.S. Supreme Court ruling in Skilling v. United States, which found that the provision of the federal mail-fraud statutes that formed the basis of his prosecution—known as “honest services” —was unconstitutional. The now-stricken statute said it was fraud to deprive the public of honest services—in Bereano’s case, by fraudulently billing his firm’s clients. Fraud that results in loss of money or property is still a crime.
Bereano’s trial and sentencing were major political spectacles in the 1990s, as he rallied his supporters, including some of the biggest players in Maryland’s political class, in an unsuccessful attempt to avert convictions and a jail sentence. Charged with stealing from his clients by fraudulently charging them for “legislative services” and using the money to make disguised contributions to politicians through his political-action committee, Bereano claimed the crimes were victimless. After his convictions were upheld on appeal, in 1998 he was sentenced to spend five months incarcerated and five months in home detention, and to pay a $30,000 fine. He was disbarred as result of his convictions, but has continued to be an important lobbyist, representing powerful interests in Annapolis and elsewhere.
Attorneys Timothy Maloney and Matthew Bryant filed Bereano’s petition to overturn his convictions in April, and, at first, it appeared that the U.S. Attorney’s Office in Maryland may have been willing to negotiate a deal. Assistant U.S. Attorney Michael Leotta initially was handling the case, and in July he requested an extension to reply to the petition “so that the government and defense can explore whether there is a way to resolve the matter by agreement.” In August, after assistant U.S. Attorney Leo Wise took over the case from Leotta, he raised the same possibility in a second request for an extension.
Ultimately, in late September, Wise submitted his opposition brief, writing that the jury found not only that Bereano committed now invalid “honest services” fraud, but also “traditional pecuniary fraud” that “defrauded his clients of money.” In their legal briefs, though, Bereano’s attorneys argue that “all of the alleged ‘victims’ testified that they were not victimized and did not suffer losses,” so at trial prosecutors instead emphasized to the jury that Bereano had deprived people of “honest services,” which is no longer illegal.
Should Bereano’s petition prevail, and his convictions be overturned, he would be entitled to have the $30,000 fine returned, with interest. According to his attorneys’ interest worksheets of the fine, the total amount to be returned would come to nearly $60,000.
“This is an extremely interesting case,” says University of Maryland Law School adjunct professor Frank Razzano, who uses Bereano’s case in his business-law classes. Bereano is arguing that “he was convicted of something that is not a crime,” Razzano says, but “the government says he also was convicted of something that still is a crime—he stole $100 from four clients [via billing], so he’s a bad guy.” The judge, Razzano says, “is going to decide whether the jury was instructed on honest-services fraud as the overall theory of the case.”
Razzano cautions that he’s “only read the briefs, not the original jury instructions” in Bereano’s case, but, based on what he knows, he thinks “Bereano has the better of the arguments.”
Former assistant U.S. Attorney Steven Levin, now a criminal-defense attorney with the firm Levin and Curlett, says Bereano and his lawyers “have made a valiant effort to right a perceived wrong.” The issue for the judge, Levin contends, “boils down to whether or not Mr. Bereano stole the money. If the court concludes that he did, the court will likely find that the erroneous instruction to the jury was harmless. If the court concludes otherwise, the conviction should be reversed.
Bereano’s attempt to overturn his convictions based on the Skilling decision harkens back to the case of another famous Marylander whose convictions were overturned in 1987: former Gov. Marvin Mandel. Ten years after he was convicted of 17 counts of mail fraud and one racketeering count, Mandel cited a then recent Supreme Court ruling against the “honest services” fraud charge, and cleared his name. Congress then passed an “honest services” statute in 1988, which was used liberally by federal prosecutors until last year’s Skilling decision put an end to its use once again. (The federal corruption case against Maryland state Sen. Ulysses Currie—which ended recently with acquittals on all charges for the Prince George’s County Democrat—initially included seven honest-services charges that prosecutors dropped after the Skilling ruling.)
Razzano says Bereano’s attorneys “have pretty sound precedent in the Mandel case” in arguing their client’s case. Razzano was no fan of the “honest services” provision, saying it was “an incredibly vague statute” and that “I was delighted to see the Supreme Court of the United States finally strike it down.”
Bereano’s attorneys and the Maryland U.S. Attorney’s Office declined to comment on the case, which is before U.S. District Judge William Nickerson. A court hearing for oral arguments in the case has been requested by Bereano’s attorneys, but has yet to be scheduled, according to the court docket.