Case 1:09-cr-00029-GLS Document 204 Filed 01/14/10 Page 1 of 18

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF NEW YORK
------------------------------------------------------- x
UNITED STATES OF AMERICA :
: 09-CR-29 (GLS)
v. :
:
JOSEPH L. BRUNO, :
:
Defendant. :
:
------------------------------------------------------- x

DEFENDANT JOSEPH L. BRUNO’S BRIEF IN SUPPORT OF HIS MOTION FOR

JUDGMENT OF ACQUITTAL AND FOR A NEW TRIAL

Defendant Joseph L. Bruno, through undersigned counsel, submits the following

supplemental brief in support of his motion for judgment of acquittal and for a new trial pursuant

to Federal Rules of Criminal Procedure 29 and 33, previously filed on December 7, 2009.

INTRODUCTION

After three weeks of testimony and seven days of deliberations, the trial jury acquitted

Mr. Bruno on five of the eight counts in the Indictment, convicted on two counts, and were

unable to decide the remaining count. Prior to the jury verdict, the Court reserved Mr. Bruno’s

rights under Federal Rule of Criminal Procedure 29 at the conclusion of the government’s case,

11/20/09, PM Session, Tr. at 134, and Mr. Bruno moved for judgment of acquittal under Rule 29

at the conclusion of his own case, 11/20/09, PM Session, Tr. at 295-300. The Court denied those

motions without prejudice to be reconsidered, if necessary, after the jury returned its decision.

Id.

The government’s charge, its theory of wrongdoing, and the evidence it produced on the

two convicted counts were no different than in those counts that resulted in acquittals. For the

reasons the jury acquitted Mr. Bruno in Counts 1, 2, 5, 6 and 7, the Court should enter judgments
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of acquittal on Counts 4 and 8. In the alternative, with the clarity that comes from the evidence

that was produced and the ability to review the legal rulings and instructions given after the

conclusion of a trial, the Court should order a new trial on these counts.

LEGAL STANDARD

When passing upon a motion for judgment of acquittal, Federal Rule of Criminal

Procedure 29 requires the Court to “determine whether upon the evidence, giving full play to the

right of the jury to determine credibility, weigh the evidence, and draw justifiable inferences of

fact, a reasonable mind might fairly conclude guilt beyond a reasonable doubt.” United States v.

Taylor, 464 F.2d 240, 243 (2d Cir. 1972) (quoting Curley v. United States, 160 F.2d 229, 232-33

(D.C. Cir. 1947)). Acquittal is required where “there is no evidence upon which a reasonable

mind might fairly conclude guilt beyond a reasonable doubt.” Id.

Federal Rule of Criminal Procedure 33 states that, on motion of a defendant, the court

may “grant a new trial to that defendant if required in the interest of justice.” See, e.g., United

States v. Vicaria, 12 F.3d 195, 198 (11th Cir. 1994). A new trial is warranted in cases where the

trial court failed to properly instruct the jury regarding the law. See United States v. Dunn, 779

F.2d 157, 158 (2d Cir. 1985) (affirming trial court order of new trial due to failure to properly

instruct inducement element of entrapment defense). In such cases, a new trial may be justified

even if the trial court’s original instructions were not legally erroneous. See Vicaria, 12 F.3d at

198 (affirming trial court order of new trial due to failure to issue theory-of-defense instruction,

regardless of whether trial court erred in not initially giving such an instruction).

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ARGUMENT

I. Mr. Bruno’s Indictment and Subsequent Convictions Are Invalid Because 18

U.S.C. § 1346 Is Unconstitutional.

In his pre-trial Motion to Dismiss the Indictment, Mr. Bruno explained in detail that

Section 1346 is (1) unconstitutional in all public-sector applications, both because of its

impenetrable vagueness and its conflict with constitutional federalism principles, and

(2) unconstitutional as-applied to the failure-to-disclose theory charged in this case, as the statute

failed to give Mr. Bruno adequate notice of what information he was required to disclose. (See

generally Dkt. Nos. 22, 32.) Mr. Bruno also preserved the argument that Section 1346 was

facially unconstitutional. (See Dkt. No. 22 at 11–12 n.3.) Mr. Bruno now reiterates this

argument that his indictment, prosecution, and now conviction for “honest services fraud” are

barred due to the constitutional invalidity of the federal honest services fraud statute, 18 U.S.C.

§ 1346.

First, Mr. Bruno’s arguments remain in full force given the actual course of the trial. Mr.

Bruno’s constitutional challenges to Section 1346 have all focused on a common defect—neither

the statutory text nor the explanatory case law provide any clear notice that the statute imposes

specific and identifiable federal disclosure obligations upon state government officials. As a

result, even if the statute could be constitutionally applied to conduct such as quid-pro-quo

bribery, the law simply is too vague when applied to non-disclosure cases (e.g., what did the jury

convict Mr. Bruno for in Count 4: for working too little for the funds he was paid? for using

official staff to help with his consulting? for not listing the names of individual clients of his

consulting firm?). The government’s evidence and arguments at trial reinforce this fact, as the

government disclaimed any obligation to prove that Mr. Bruno lied in any of the disclosure

statements he filed pursuant to New York state law, 11/23/09, PM Session, Tr. at 35 (Gov’t

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Closing Statement) instead arguing more generally that Mr. Bruno simply did not adequately

disclose (what is adequate disclosure: not listing the business names of his consulting clients?

not listing those who owned or had interests in those businesses? how much interest would

trigger disclosure?) his alleged conflicts of interest, 11/23/09, PM Session, Tr. at 39-40 (Gov’t

Closing Statement). Although the government has consistently argued that such a free-floating

federal obligation exists, it has never established how Section 1346 clearly establishes such a

requirement, nor has it established how Mr. Bruno received constitutionally sufficient notice of

any such obligation.

Second, further legal developments only underscore the validity of these arguments. As

this Court is aware, the Supreme Court has now heard arguments in two cases, and is soon to

hear a third, challenging Section 1346’s constitutionality and meaning: Black v. United States,

No. 08-876; Weyhrauch v. United States, No. 08-1196; and Skilling v. United States, No. 08-

1394. That the Supreme Court has granted certiorari in three cases challenging the same statute

in the same term, devoting 21% of its criminal docket this Term to the issue, 1 demonstrates the

breadth of the Court’s concern regarding the statute’s viability. 2 Although oral arguments do not

always indicate how the Supreme Court will rule, they are nevertheless instructive. The justices’

statements during the Black and Weyhrauch oral arguments reflect that almost all the justices

believe that Section 1346 is deeply flawed, presenting a strong probability that such concerns

will lead the Court to strike down the statute entirely. 3 At the very least, it seems likely that the

1
The Court has granted certiorari in 14 criminal cases this Term. If you include the additional 12 habeas
cases granted by the Court this Term, the three cases discussed above make up approximately 12% of all of this
Term’s criminal cases.
2
Similarly significant is the fact that the Supreme Court accelerated oral argument in the third of these cases,
rescheduling it for March 1, 2010.
3
Available at http://www.supremecourtus.gov/oral_arguments/argument_transcripts.html.

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Supreme Court will rein in the statute’s applications, limiting it to require a good deal more for a

case to be brought and instructions given to a trial jury than the government sought and the Court

provided in this case. 4 See generally Black and Weyhrauch, Tr. of Oral Argument, Nos. 08-876

and 08-1196.

As a result, the Court should reconsider its prior rulings, reject the government’s reliance

upon Section 1346, and order a judgment of acquittal on the remaining counts.

II. Even If the Section 1346’s Non-Disclosure Theory of Honest Services Fraud
Survives Constitutional Scrutiny, the Jury Was Not Correctly Instructed.

Even if Section 1346 remains intact, the government’s theory of the case in this trial far

expanded the boundaries courts have given the statute. The Court’s jury instructions facilitated

this unwarranted expansion by erroneously informing the jury at least twice that it should convict

upon a mere finding of the “appearance of a conflict of interest,” rather than requiring it to find

that Mr. Bruno took specific action favoring his private employers because of his consulting

interests. 11/23/09, PM Session, Tr. at 59-60 (Jury Charge). As Mr. Bruno’s timely objections

to these instructions argued, this “appearance” language, combined with language included

4
Even if the statute can be saved by application of some limiting principle, the jury’s verdict in this case
must be vacated. At the government’s request, this Court’s instructions to the jury did not require the jury to find an
underlying state law violation to convict—the limiting principle at issue in the Weyhrauch case. Similarly, if the
statute is instead limited to bribery and kickback cases, as was discussed during the Black oral argument, see, e.g.,
No. 08-876, Tr. of Oral Arg., at 5:13–18, 8:1–9:20, then Mr. Bruno’s indictment would have to be dismissed and his
convictions vacated because Section 1346 would no longer embrace the failure-to-disclose theory that serves as the
entire basis for this prosecution. In any event, the Supreme Court’s decisions will likely undermine the basis of the
government’s prosecution in this case under the theory it proposed or the instructions the Court gave the jury. Given
how close a Supreme Court decision is likely to be, this Court, as others have done in similar situations, can take this
motion under consideration pending the imminent decision of the Supreme Court. See, e.g., United States v. Inzunza,
580 F.3d 894, 905, 913 (9th Cir. 2009) (citing its decision in Weyhrauch and staying a portion of the case regarding
a defendant’s “contention that a state law violation must be alleged and proved” in honest services fraud cases
“pending the decision of the Supreme Court in United States v. Weyhrauch”); see also United States v. Ring, 628 F.
Supp. 2d 195 (D.D.C. 2009) (retrial regarding a series of honest services fraud charges against former congressional
staffer Kevin Ring postponed until June 2010); United States v. Hill, No. 3:07-CR-289-M (N.D. Tex. Dec. 7. 2009)
(criminal action, including Rule 29, delayed pending Supreme Court decision).

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elsewhere in the instructions regarding the purposes of Section 1346 5 both misstated the law and

invited the jury to convict based on the statute’s purported purposes, rather than its actual

prohibitions. 11/23/09, PM Session, Tr. at 7–10. Such a charge contradicted the law of honest

services fraud.

The Court’s faulty instructions—that a conflict of interest exists whenever a public

official’s public duties and private financial interests “clash or appear to clash”—have their

roots in the Government’s Proposed Jury Instruction No. 4, which pressed the argument that Mr.

Bruno’s alleged failure to disclose information suggesting the appearance of a conflict of

interest, standing alone, sufficed to support the charges made in this case. Through its statements

to the jury, the government has similarly disclaimed any obligation to establish any actual

conflict of interest—i.e., that Mr. Bruno’s private employment had any effect upon his official

decision-making. 11/2/09, PM Session, Tr. at 12 (Gov’t Opening Statement); 11/23/09, AM

Session, at 24-25, 55 (Gov’t Closing Statement).

Not a single honest services case supports the government’s aggressive interpretation of

the failure-to-disclose theory. The government’s footnote supporting its argument does not cite a

single honest services fraud case. See Dkt. No. 29 at n.5. Rather, the government attempted to

cobble together an appearance-of-corruption standard based solely on discussions of conflicts of

interest in other contexts, involving statutes or regulations that explicitly regulate such

conflicts—a far cry from Section 1346, which only regulates nondisclosure of conflicts of

interest, if at all, through an implicit general prohibition against the fraudulent concealment of

material information. Furthermore, although the government elsewhere has cited honest services

fraud cases discussing conflicts of interest, the government has not cited, and cannot cite, any

5
See Dkt. No. 120; 11/20/09, PM Session, Tr. At 329 – 32; 11/23/09, AM Session, Tr. At 7 – 8.

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case upholding a conviction solely upon the failure to disclose an apparent conflict. Rather, the

few relevant Second Circuit authorities each involve an actual conflict of interest. See, e.g.,

United States v. McDonough, 56 F.3d 381, 391 (2d Cir. 1995) (affirming “conflict of interest”

conviction in case where committee chairman concealed scheme in which he received kickbacks

from friends’ insurance companies in exchange for using his position to influence county

government to retain the insurance companies). The leading cases in other circuits have

similarly echoed the requirement that an actual conflict exist, 6 with the First Circuit going so far

as to expressly recognize the distinction between actual corruption and the appearances thereof.

See Sawyer, 85 F.3d at 728. Thus, prevailing precedent directly contradicts both the

government’s interpretation of Section 1346 and the instructions given to the jury.

The government’s position in this case even contradicts the government’s own briefing

before the Supreme Court in Weyhrauch. 7 In response to the argument that Section 1346 is

unconstitutionally vague, the Solicitor General argued that the statute is sufficiently tailored

because honest services fraud “contains three basic non-jurisdictional elements: (a) a breach of

the duty of loyalty; (2) [sic] intent to deceive; and (c) materiality.” No. 08-1196, Weyhrauch v.

6
See, e.g., United States v. Panarella, 277 F.3d 678, 695 (3d Cir. 2002) (holding that “a public official
commits honest services fraud if he takes discretionary action that he knows directly benefits a financial interest that
the official concealed”). Although dicta in some cases reference a more general disclosure concept, any convictions
were supported by the showing of an actual conflict of interest, evidenced by the public official having taken
specific official acts on behalf of/in order to benefit the undisclosed interest. See, e.g., United States v. Woodward,
149 F.3d 46, 54 (1st Cir. 1998) (scheme in which “Woodward accepted, from individuals . . . representing Hancock
and LIAM, golf, meals, tickets, and other entertainment and benefits, in violation of Massachusetts law; that
Woodward filed false Statements of Financial Interest (“SFI”) under oath, in which he unlawfully failed to report to
the State Ethics Commission his receipt of the gratuities; that Sawyer on behalf of Hancock and LIAM was given
greater access to the Insurance Committee and to Woodward as House Chair than was available generally to the
citizenry; and that, from 1984 through 1990, Woodward repeatedly performed official acts on behalf of Hancock
and LIAM.” (emphasis added)); United States v. Sawyer, 85 F.3d 713, 728 (1st Cir. 1996) (statute embraces cases
“in which an official . . . took official action based on a secret conflict of interest” (emphasis added)).
7
The government has to speak with one voice always, but the Assistant U.S. Attorneys in this case gave
media interviews in December 2009 in which they stated that they were involved in the briefing of and attended the
arguments in the Supreme Court’s cases.

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United States, Br. for the United States at 44. With respect to this first element, the Solicitor

General’s Brief takes the position that “Section 1346 . . . does not target all manner of dishonesty

but rather criminalizes only schemes in which an employee or public officer takes official action

to further his own interests while pretending to act in the interests of those to whom he owes a

duty of loyalty.” Id. at 45 (emphasis added). The government, when it was trying to assure the

concerns of the Supreme Court that Section 1346 was not vague and overbroad, argued that the

statute is limited to actual-conflict cases: cases in which the public officer takes specific official

action, for the purpose of furthering his private interest, while instead pretending to act in the

public interest.

But, in this case, to get as much extension of the law as it could to seek a conviction, the

government made no effort to respect these purported limits on Section 1346. Rather, in its

oppositions to motions to dismiss, pre-trial meetings, opening statement, and closing statement,

the government expressly urged the jury that it need not find an actual conflict of interest in

order to convict Mr. Bruno of the counts related to Mr. Abbruzzese, even if Mr. Bruno never

took official action to advance his personal interests:

What is the issue is [Mr. Bruno] needed to disclose that he was getting money
from a particular entity that was—that he decided to fund. So, we’re not looking
for a link between what he did and the payments . . . .

The reason for this is that the public has a right to know the potential motivations
behind a public official’s actions. It’s not enough to know that Senator Bruno
decided to give $250,000 to Evident Technologies and his statement this is good
for Troy, this will bring business. That’s not enough. The public is entitled to
know that at the same time, he was getting paid by Mr. Abbruzzese, who had a
strong financial interest in Evident being funded, that’s an important fact to know.
Whether or not it motivated, finally, Senator Bruno to do what he did, doesn’t
matter. It’s knowledge of the fact that’s important.

11/23/09, AM Session, Tr. at 55 (Gov’t Closing Statement) (emphasis added). The jury charge

reinforced this point, by instructing the jury that the appearance of conflict alone violated Section

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1346. 11/23/09, PM Session, Tr. at 59-60 (Jury Charge). The contradiction between the

government’s arguments here and before the Supreme Court highlights the inaccuracy of the

Court’s appearance-of-conflict instruction, as well as the ongoing confusion regarding what

Section 1346 actually encompasses. The government should not be allowed to take

contradictory positions to save the statute on one hand and then broaden its reach on the other.

These errors were then compounded by the Court’s instructions regarding the underlying

theories supporting the regulation of conflicts of interest. 11/23/09, PM Session, Tr. at 61 (Jury

Charge) (“Conflicts of interest must be disclosed because the public has the right to know the

potential motivations behind a public official’s actions . . . . One reason why the law mandates

disclosure of conflicts of interest, however, is that it is often difficult or impossible to know for

sure whether a public official has acted on a conflict of interest.”)(emphasis added)). By

presenting the jury with the various reasons why apparent conflicts of interest may raise public

concerns, the Court further diverted the jury’s focus from the specific question of what Section

1346 actually criminalizes. See 11/23/09, AM Session, Tr. at 7-10.

In short, whether the issue is viewed as part of the definition of “honest services” or an

aspect of Section 1346’s “materiality” element, the statute requires the government to prove that

Mr. Bruno concealed an actual and substantial conflict of interest, not merely the appearance of

one. Nothing in United States v. Rybicki, 354 F.3d 124 (2d Cir. 2003), or any other honest

services case supports the government’s “appearance” instruction—perhaps the government’s

most apparent effort to misconstrue and expand the law. By instead instructing the jury that

appearance alone would satisfy the statute, and then further inviting the jury to convict based on

general justifications for regulating conflicts of interest rather than Section 1346’s actual

requirements, the Court’s instructions misdefined the crime charged and invited the jury to reach

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an erroneous verdict. If the Court is not willing to reject the prosecution entirely based on

Section 1346’s defects, it should now order a new trial in which Section 1346’s requirements are

more narrowly and correctly instructed. Given that the government’s aggressive interpretation of

Section 1346 is unsupported by either prevailing precedent or the Solicitor General’s articulation

of the statute’s limits, Mr. Bruno’s conviction on two counts should not be allowed to stand. 8

III. The Jury Verdicts of “Guilty” On Counts 4 and 8 Are Not Supported By
Sufficient Evidence.

Finally, in addition to the defects described above, the evidence at trial was insufficient to

support the jury’s verdicts on Counts 4 and 8. First, Mr. Bruno’s alleged failure to disclose his

personal contacts with Mr. Abbruzzese’s companies cannot constitute the concealment of either

a conflict-of-interest or an unlawful gift—or, at minimum, the government failed to prove that

any such nondisclosure was “material,” as required under Section 1346. Second, the

government’s evidence was not sufficient to undermine Mr. Bruno’s advice-of-counsel defense,

which negates any argument that Mr. Bruno acted with criminal intent.

A. Count 4 Was Not Supported By Sufficient Evidence.

At trial, the government’s argument regarding Count 4 was that Mr. Bruno had an illegal

scheme by having a conflict or a gift (compensation paid by so-called Abbruzzese Companies

CTA and C&TA) while Mr. Bruno was promoting a different Abbruzzese Company (Evident

Technologies) that was improperly concealed. 11/2/09, PM Session, Tr. at 10-11 (Gov’t

Opening Statement); 11/23/09, AM Session, Tr. at 23, 51, 55, 73-74, 84-87, 106-107 (Gov’t

Closing Statement). This was precisely the government’s theory with respect to Counts 5 and 6

8
The Court’s willingness to instruct on “appearance” also should have caused the Court to allow evidence of
how other legislators handled the same conflict and disclosure issues. When the Court denied the introduction of
that evidence, 11/20/09, PM Session, Tr. at 291–295, it prevented Mr. Bruno from adequately addressing the
“appearance” standard it had injected into the trial.

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for which the jury acquitted Mr. Bruno. To unanimously find Mr. Bruno not guilty, the jury

would have had to decide that the payments from other Abbruzzese Companies (Motient and

TerreStar) were not a conflict, were not a gift and/or were properly disclosed. The same can be

said for the relationship in Count 4, and therefore Count 4 has to suffer from one or another

failure of evidence from which a jury could find guilty beyond a reasonable doubt.

First, the evidence cannot support any claim that Mr. Bruno’s compensation was a

conflict or a gift. The evidence was that Mr. Bruno did provide consulting to Mr. Abbruzzese

that Mr. Abbruzzese found valuable. 11/20/09, AM Session, Tr. at 79 (Abbruzzese). The

government never even attempted to offer the jury any evidence as to what compensation was

excessive or what was not allowed in these types of consulting relationships. Mr. Bruno’s type

of consulting relationship and the type of work he did is indistinguishable from many of the other

consultants used by Mr. Abbruzzese, 11/18/09, AM Session, Tr. at 126 (Barr), 11/20/09, AM

Session, Tr. at 24 (Abbruzzese), and also from his work alleged in other counts for which the

jury acquitted. Indeed, the only evidence at trial even suggesting that Mr. Bruno did not perform

adequate work related to the Motient and Terrestar counts (G-U-23), counts for which the jury

acquitted him.

Second, there was no sufficient evidence of any conflict. Evident Technologies, the

company with dealings with New York on which the government based its conflict theory,

11/2/09, PM Session, Tr. at 10-11 (Gov’t Opening Statement), 11/23/09, PM Session, Tr. at 49

(Gov’t Closing Rebuttal), did not hire Mr. Bruno and was an entity in which Mr. Abbruzzese had

a small interest. 9 The funds it received from New York had been committed earlier than any

9
It should be noted that the government elicited a good deal of testimony about warrants for potential stock
that Mr. Abbruzzese had from Evident, 11/20/09, AM Session, Tr. at 6-9, 14-19 (Abbruzzese), but not one time
(continued…)

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work done by Mr. Bruno and the government offered no evidence that the two events – funds

from New York (initially committed by Governor Pataki) or consulting by Mr. Bruno were ever

connected in any fashion. 11/18/09, AM Session, Tr. at 127 (Barr). The actual trial testimony

was that Mr. Bruno carried forth what had been committed and only then after he had Senate

staff review the company and the grants “on the merits” and relied on the staff’s

recommendations as to whether to proceed. 11/19/09, PM Session, Tr. at 253, 258, 269

(Mallick). In addition, the uncontested trial evidence was that Mr. Abbruzzese and others at

Evident sought more funds than Mr. Bruno ever helped to provide, 11/20/09, AM Session, Tr. at

18-19 (Abbruzzese), 11/20/09, PM Session, Tr. at 218-219 (Ballinger). Together, all of this

evidence indicated and supported the fact that Mr. Bruno showed his “independent judgment” in

dealing with Evident Technologies, and this evidence of “independent judgment” belies any

notion of a conflict of interest under the count as literally stated in the Indictment as well as the

N.Y. Public Officers Law on which the case was based. 10 Moreover, Mr. Bruno never worked

for or received any funds from Evident. Mr. Abbruzzese’s interest in Evident was the same

during Mr. Bruno’s relationship with CTA and C&TA as it was during his relationship with

Motient and TerreStar. Those latter two were equally unconnected to Evident and thus the same

lack of linkage should have been found with respect to Count 4.

Third, the disclosures Mr. Bruno made with respect to his relationship with CTA and

C&TA were the same as they were for all the companies for which he did consulting. He listed

his own firm Capital Business Consultants and not any of its clients. That was the way

sought or received any evidence that Mr. Bruno was aware of such warrants (whether the warrants had value or not).
This gap in the evidence chain reveals a serious lack of proof.
10
To make matters worse, by failing to require the jury find a violation of state law (e.g., Sections 73(3)(a)
and (d) of New York’s Public Officers Law, the Court allowed the jury to convict when there was not a single shred
of evidence that Mr. Bruno failed to exercise his independent judgment on the Evident grant or on any other official
action in the case or that Mr. Bruno had a “substantial conflict of interest.”

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disclosures were done, and its lack of criminal basis is the same in Count 4 as it was in Counts 1,

2, 5, 6, and 7. Furthermore, any additional disclosures regarding his work on behalf of CTA and

C&TA would have had no impact on the public’s knowledge of or consideration of the Evident

Technologies grant. 11/18/09, AM Session, Tr. at 125-126 (Barr); 11/20/09, AM Session, Tr. at

77-78 (Abbruzzese). Listing “CTA” or “C&TA” would not list “Abbruzzese” and even listing

“Abbruzzese” would not list “Evident Technologies”. Indeed, the jury verdict reflects this truth,

as the jury acquitted Mr. Bruno of honest services fraud with respect to all the other so-called

“Abbruzzese Companies,” with respect to whom Mr. Bruno did the identical type of work that

was disclosed in an identical manner. Although inconsistent verdicts are not in-and-of

themselves grounds to vacate Mr. Bruno’s convictions, see United States v. Powell, 469 U.S. 57

(1984), the same evidentiary failings that lead the jury to acquit Mr. Bruno for Counts 5 and 7

undermine Mr. Bruno’s conviction under Count 4.

Fourth, no reasonable jury could have found the requisite criminal intent necessary to

convict in light of Mr. Bruno’s reliance upon the advice of counsel. At trial, it was undisputed

that Mr. Bruno consulted counsel regarding what he was required to disclose his consulting work

on behalf of CTA and C&TA in the same fashion he did do for Motient and TerreStar (and the

other companies unrelated to Abbruzzese), and that his counsel advised him on each of these

matters. 11/19/09, AM Session, Tr. at 13-14 (Gluchowski). More specifically, Mr. Bruno’s

lawyers approved both Mr. Bruno’s private employment contracts and the content of his annual

disclosure forms. (See, e.g., 11/19/09, AM Session, Tr. at 13-15 (Gluchowski); 11/19/09, AM

Session, Tr. at 97-106 (Gluchowski)). The government’s only contrary argument—a claim that

Mr. Bruno failed to provide his lawyers with full information regarding his work on behalf of

CTA/C&TA, (see 11/23/09, AM Session, Tr. at 13-15 (Gluchowski))—is belied by the fact that

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the lawyers had full access to any such information. (See, e.g., 11/19/09, AM Session, Tr. at

105-106 (Gluchowski)) (acknowledging that Mr. Bruno’s lawyers were aware of the relationship

between Mr. Abbruzzese and CTA/C&TA).) Given the uncontradicted evidence that Mr.

Bruno’s counsel was aware of Mr. Abbruzzese’s relationship to CTA and C&TA, id., Mr.

Gluchowski advised Mr. Bruno that his consulting agreements were permissible and drafted the

relevant contracts, 11/18/09, AM Session, Tr. at 14, 115-116 (Barr), 11/18/09, AM Session, Tr.

at 17 (Gluchowki), and instructed Mr. Bruno as to what he was required to disclose, 11/19/09,

AM Session, Tr. at 21-22, 99-103 (Gluchowski), no reasonable jury could find beyond a

reasonable doubt that Mr. Bruno intended any fraud.

B. Count 8 Was Not Supported By Sufficient Evidence.

The jury’s guilty verdict under Count 8, regarding Mr. Bruno’s sale of his interest in the

horse Christy’s Night Out to Mr. Abbruzzese, is similarly flawed.

First, the evidence before the jury was insufficient to support a finding that the horse sale

was part of any scheme to defraud the public of Mr. Bruno’s honest services. The government

argued that the horse sale was a vehicle through which Mr. Abbruzzese reimbursed Mr. Bruno

for fees owed under a terminated TerreStar consulting agreement, which Mr. Bruno then

concealed by listing Mountain View Farms as his source of income for the profits he realized

from the sale. 11/23/09, AM Session, Tr. at 86–87 (Gov’t Closing Statement). Yet the jury

absolved Mr. Bruno of any wrongdoing with respect to his work on TerreStar’s behalf, through

its acquittal on Count 6. As a result, the evidence at trial is necessarily insufficient to support the

government’s theory of the scheme to defraud, which extended across both counts (indeed was

the government’s entire theory for why the horse sale occurred). If there was no scheme in

Count 6 (for any reason – not a conflict, not a gift and/or no failure to properly disclose), then

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there was no scheme in Count 8. This is not an argument of a simple inconsistent verdict; it was

the whole basis for the government’s charge and theory that the horse sale made up for the

scheme for consulting work.

Second, no reasonable jury could have found the requisite criminal intent necessary to

convict on Count 8 in light of Mr. Bruno’s reliance upon the advice of counsel. At trial, it was

undisputed that Mr. Bruno consulted counsel regarding the horse sale, and that his counsel

advised him that he did not need to disclose any financial relationship between Mountain View

Farms (Mr. Bruno’s horse entity) and Bazaguma (Mr. Abbruzzese’s entity), because the

relationship was a joint venture and not a partnership. 11/16/09, PM Session, Tr. at 197

(Stackrow); 11/19/09, AM Session, Tr. at 30-33 (Gluchowski). Given that Mr. Gluchowski had

access to the facts of the financial relationship (even more material than Mr. Gluchowski said he

had in other situations), did research on the issue, had experience in the ethics process and rules,

and then advised that nondisclosure of any relationship between Mountain View Farms and

Bazaguma was wholly consistent with the law, Mr. Bruno could not be found, beyond a

reasonable doubt, to have had criminal intent merely by following this advice. 11

Mr. Bruno sought a separate and clearer “advice of counsel” instruction than the Court

gave. Such an instruction might have made his reliance clearer and conformed to the law on this

issue as applied to the facts of the case. But, even under the instruction as given by the Court,

whatever the propriety or not of the horse sale between Messrs. Bruno and Abbruzzese might

11
On one of the occasions where the Court made comments on the record as to what the Court believed the
correct interpretation of the law was or whether it agreed or disagreed with the legal advice Mr. Bruno as given by
Messrs. Collins, Riddett or Gluchowski, it stated it disagreed that a joint venture and partnership were not the same
thing for disclosure purposes. Under New York law, however, these entities simply are not the same. 16 NY Jur.
Business Relationships § 2086 (discussing distinctions between joint ventures and partnerships); Hoskin v. New
Grovetown Assocs., 129 Misc. 2d 222 (N.Y. Sup. Ct. Monroe County 1985) (statute requiring partnerships to file
certain paperwork did not apply to joint venture). Even if they were the same, and Mr. Gluchowski’s advice
concerning the horse transaction was wrong, Mr. Bruno certainly had the right to rely on that advice without
forming the basis for a finding of criminal intent beyond a reasonable doubt.

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have been, there could be no proper finding of guilt beyond reasonable doubt on the issue of

intent to defraud given Mr. Gluchowski’s advice that either listing the transaction or not listing it

was proper. As a result, no reasonable jury could find that Mr. Bruno intended to defraud the

public when he followed his lawyers’ advice, and a judgment of acquittal should be entered or a

new trial ordered.

Finally, no reasonable jury could find that Mr. Bruno’s reporting of the sale of his interest

in Christy’s Night Out constituted the concealment of a “gift” from Mr. Abbruzzese. At trial,

there was no testimony that the horse was valueless. (See, e.g., 11/20/09, AM Session, Tr. at 58

(Abbruzzese) (Christy’s Night Out was not worthless), id. at 70-71 (Abbruzzese)). Rather, the

evidence stated both that horse valuation is a very subjective process, 11/18/09, PM Session, Tr.

at 207 (Morris), 11/19/09, AM Session, Tr. at 117(Gluchowski), and that the conclusion that

Christy’s Night Out would not be a profitable racehorse was only reached after Mr. Abbruzzese

invested additional funds to have the horse “broken.” 11/18/09, PM Session, Tr. at 227 (Crupi);

11/20/09, AM Session, Tr. at 70 (Abbruzzese). No reasonable jury could conclude beyond a

reasonable doubt that Christy’s Night Out was worthless at the time Mr. Bruno sold his interest

in the horse such that it could be the basis of a criminal fraud (a conflict or a gift, let alone an

illegally undisclosed conflict or gift) based solely upon the after-the-transaction knowledge of

the results of that process.

CONCLUSION

Section 1346’s meaning has always been a moving target, but the government’s theory of

prosecution and the Court’s instructions in this case constituted an unsupported extension of the

statute’s reach. The jury acquitted Mr. Bruno on the majority of these counts despite these

errors, but then inexplicably convicted him on two counts that raised the same issues, supported

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by the same evidence as existed in counts on which the jury acquitted. The two convictions are

thus fundamentally flawed, given the lack of sufficient evidence to establish any scheme to

defraud, any intent to defraud, or any material misrepresentation. Both fairness to Mr. Bruno

and a preservation of judicial resources (in this Court and potentially appellate courts) would be

served by the Court addressing the issues by dismissing the case now. Alternatively, the Court

could order a new trial on the convicted counts to correct the issues identified in this motion, or

the Court could wait for a decision by the Supreme Court that will inform whether this case

should or could have been brought in the first place or how it might have to proceed now.

Date: January 14, 2010 Respectfully submitted,

s/ Abbe David Lowell

Abbe David Lowell, Bar Number 106642
Paul M. Thompson
McDermott Will & Emery LLP
600 13th Street, NW
Washington, DC 20005
Phone: 202-756-8001
Facsimile: 202-756-8087
adlowell@mwe.com

William J. Dreyer, Esq.

Dreyer Boyajian LLP
75 Columbia Street
Albany, NY 12210
Phone: 518-463-7784
Facsimile: 518-463-4039

Attorneys for Defendant Joseph L. Bruno

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF NEW YORK
------------------------------------------------------- x
UNITED STATES OF AMERICA :
:
v. :
: Case No. 09-CR-29 (GLS)
JOSEPH L. BRUNO, :
:
Defendant. :
:
------------------------------------------------------- x

CERTIFICATE OF SERVICE

I hereby certify that on January 14, 2010, I electronically filed the foregoing with the
Clerk of the District Court using the CM/ECF system, which sent notification of such filing to
the following:

1. Rick Hartunian, Esq.

Acting United States Attorney
Office of the United States Attorney – Albany
445 Broadway
218 James T. Foley U.S. Courthouse
Albany, NY 12207-2924

2. Elizabeth C. Coombe, Esq.

Assistant U.S. Attorney
Office of the United States Attorney – Albany
445 Broadway
218 James T. Foley U.S. Courthouse
Albany, NY 12207-2924

3. William C. Pericak, Esq.

Assistant U.S. Attorney
Office of the United States Attorney – Albany
445 Broadway
218 James T. Foley U.S. Courthouse
Albany, NY 12207-2924

/s Abbe David Lowell