First Circuit Overturns Conspiracy Convictions in Varsity Blues College Admissions Case

• The First Circuit applied a narrow definition of “bribery” for honest services fraud under 18 U.S.C. § 1346. Payments made to the purportedly harmed party in the alleged bribery scheme—here, the universities—cannot constitute bribery.
• By contrast, the First Circuit interpreted the text of 18 U.S.C. § 666, the statute that addresses bribery related to federal programs, expansively.
• Defendants were prejudiced by the government’s decision to charge an overbroad conspiracy, which increased the risk the jury was exposed to irrelevant and prejudicial evidence.

Background

Since erupting into the headlines in 2019, the Varsity Blues college admissions scandal yielded bribery charges against more than 50 individuals—including numerous affluent and powerful parents seeking to obtain admission for their children to some of the country’s most prestigious institutions, including Harvard, Stanford, and USC—as well as multiple books and a Netflix movie.

While many of the parents elected to plead guilty, Gamal Abdelaziz and John Wilson went to trial. Charged with conspiracy to commit federal programs bribery and conspiracy to commit mail and wire fraud on both honest services fraud and property fraud theories, the jury convicted them on both counts. Defendant Wilson was also charged with, and convicted of, substantive counts of federal programs bribery, and with filing a false tax return.¹ Last week, the U.S. Court of Appeals for the First Circuit threw out their bribery convictions in their entirety.²

The First Circuit’s Decision

The Court overturned the convictions under 18 U.S.C. §§ 1341, 1343, and 1346 for honest services fraud and property fraud, and for conspiracy under 18 U.S.C. § 666, on the following grounds:

• The Court vacated the honest services fraud theory convictions under § 1346, finding that its requirements cannot be met where a bribe is paid to the party purportedly deprived of honest services in the alleged bribery scheme.³ In reaching this determination, the Court described the history of the mail and wire fraud statutes and considered the defendants’ argument that the conduct charged did not involve the core honest services doctrine described in Skilling v. United States, 561 U.S. 358 (2010), which “involved fraudulent schemes to deprive another of honest services through bribes or kickbacks supplied by a third party who had not been deceived.”⁴ The Court also emphasized the narrow meaning of bribery for purposes of honest services fraud embodied in Skilling, rejecting the government’s attempt to incorporate into the statute broader language from § 666 or other federal statutes targeting particular classes of misconduct.⁵ The Court also noted that construing bribery broadly under § 1346 would not provide sufficient notice of what conduct is prohibited, as “[a]n ordinary person would not be on notice that a payment to a purportedly betrayed party was bribery.”⁶ By comparison, the Court relied on the Supreme Court’s decision in Salinas v. United States, 522 U.S. 52, 56–57 (1997), to construe § 666’s reference to “any person” expansively to encompass payments made by an agent (the employees at the universities) to the agents’ principals (the universities).⁷
• The Court also vacated the mail and wire fraud convictions under 18 U.S.C. § 1341 and § 1343 based on the government’s property fraud theory, finding that the trial court erred in instructing the jury that admissions slots are property as a matter of law.⁸ The Court rejected the government’s argument that admission slots are always property for purposes of the mail and wire fraud statutes—to hold otherwise based on their exclusivity and economic value would “sweep[] too broadly,” “criminalize a wide swath of conduct,” and conflict with case law in other circuits finding the contrary.⁹ The Court also rejected defendants’ argument that admissions slots can never qualify as property. Instead, it held that whether they constitute property is a question that requires legal and factual development.¹⁰ Based on the insufficiently developed arguments and record before the Court, the trial court’s categorical instruction that the admissions slots in question invariably constituted “property” was improper.¹¹ Declining to delineate what circumstances might render admissions slots property, the Court found it appropriate to consider traditional notions and attributes of property, dictionary definitions, and historical recognition in case law and other legal sources.¹²
• Finally, the Court agreed with defendants that the trial court erred in its decision to charge them with, and to introduce evidence of, a broader conspiracy.¹³ Defendants analogized their case to a “rimless wheel,” derived from the Supreme Court’s decision in Kotteakos v. United States, 328 U.S. 750 (1946), where there were several spokes meeting at the center, but no rim to tie all the spokes together.¹⁴ In such a case, the Court noted, there is a “danger of prejudice to defendants [] where the government charges a broad conspiracy but proves only a collection of narrower ones, as the overbroad charge increases the risk that a jury will be exposed to and weigh against a defendant evidence that is actually relevant only to a separate conspiracy in which the defendant was not a participant.”¹⁵ Defendants argued this same pattern existed in this case—Rick Singer, the college admissions counselor running the show, was the hub and each individual parent was a spoke, but there was little to no connection other than Singer between any of the families.¹⁶ Assessing this argument, the Court employed a highly factual analysis of connections between the defendants and other parents allegedly part of the conspiracy, including their goals, interdependence, and overlap.¹⁷ Concluding such connections were insufficient, the Court then found defendants were prejudiced by the spillover effect of evidence relevant to the other parents and other unrelated conspiracies but irrelevant to their own alleged conspiracy, including evidence that other parents paid Singer’s staff to take tests for their children.¹⁸ Finding that “the government introduced powerful evidence of culpable intent on the part of other parents that presented a pervasive risk of prejudicing the jury’s assessment of each defendant’s own intent,” the Court vacated all of the bribery-related convictions.¹⁹

Conclusions

The First Circuit’s decision to overturn the convictions of both men in this high-profile case, particularly on the basis of “spillover” evidentiary prejudice, should serve as a warning to federal prosecutors that courts will closely scrutinize whether unrelated actors have been charged together for the purpose of improper evidentiary advantage. In this case, because the prosecutors charged too broad a conspiracy and introduced evidence at the trial related to other parents’ conduct, the court deemed the prejudice significant enough that the convictions were overturned. Notably, the defendants’ spillover argument was supported by an amicus brief from eleven former U.S. Attorneys.²⁰

Additionally, this decision, in conjunction with the Supreme Court’s recent reversals of the convictions of Joseph Percoco, a former aid to former Governor Andrew Cuomo, convicted of conspiracy to commit honest services fraud for taking illicit payments,²¹ and Louis Ciminelli, the owner of a Buffalo construction firm, convicted of wire fraud and conspiracy to commit the same in a bid-rigging scheme,²² indicates a healthy skepticism and judicial movement to limit the reach of the mail and wire fraud statutes. Notable as well is that, like Abdelaziz and Wilson’s convictions, Ciminelli’s conviction was also overturned based on the lower court’s overbroad definition of “property.”²³

1. United States v. Abdelaziz, 578 F. Supp. 3d 110, 113 (D. Mass. 2021).
2. United States v. Abdelaziz, No. 22-1138, 2023 WL 3335870 (1st Cir. May 10, 2023). Defendant Wilson’s conviction for filing a false tax return under 26 U.S.C. § 7206(1) was affirmed. Id. at *44–53.Id. 1:19-20; 15:1-2..
3. Id. at *14–19.
4. Id. at *16 (citing Skilling v. United States, 561 U.S. at 404, 407).
5. Id. at *14–19.
6. Id. at *19.
7. Id. at *10–14.
8. Id. at *20–25.
9. Id. at *22–23.
10. Id. at *20.
11. Id. at *20–25.
12. Id. at *21.
13. Id. at *25–43.
14. Id. at *25.
15. Id.
16. Id. at *26.
17. Id. at *27–36.
18. Id. at *37.
19. Id. at *38; see also id. at *2.
20. Id. at 25 n. 23.
21. Percoco v. United States, 598 U.S. ----, No. 21-1158, 2023 WL 3356527 (May 11, 2023).
22. Ciminelli v. United States, 598 U.S. ----, No. 21-1170, 2023 WL 3356526 (May 11, 2023).
23. Id. at *2 (holding that “potentially valuable economic information” “necessary to make discretionary economic decisions” is not a traditional property interest, and therefore “the right-to-control theory is not a valid basis for liability under § 1343”).