The opinion of the court was delivered by: Eduardo C. Robreno, J.
Before the Court are plea agreements between Defendants Christopher Wright, Ravinder Chawla, Andrew Teitelman, and the Government pursuant to Rule 11(c)(1)(C) of the Federal Rules of Criminal Procedure. The Rule allows the Government and a defendant to enter into a plea agreement that provides for a specific sentence. The agreement is subject to the approval of a district judge. If the district judge rejects the plea agreement, the defendant is allowed to withdraw his or her plea and proceed to trial. For the reasons that follow, the Court will reject the guilty-plea agreements proposed by Defendants and the Government.
Defendant Wright was chief of staff to former Philadelphia City Councilman At-Large John "Jack" Kelly.*fn2
Defendant Chawla was a principal contributor to the election campaign of Councilman Kelly. Defendant Teitelman was a lawyer representing Defendant Chawla's businesses who actively participated in Councilman Kelly's election campaign.
Defendants were charged in a 14-count indictment. Following a jury trial, the jury returned the following verdict.
All Defendants were convicted of Count One, which charged them with conspiracy to commit honest services fraud. Defendant Chawla alone was convicted of Count Three (honest services wire fraud), which charged all three with devising a scheme to exchange a thing of value for Defendant Wright's official action in connection with the River City development project. The scheme allegedly involves Defendants Chawla and Teitelman seeking Defendant Wright's assistance in thwarting the Philadelphia City Council's proposed building-height restriction. It also involved an email from Defendant Chawla to Defendants Wright and Teitelman offering to engage Defendant Wright as "our consultant" to handle liaison work regarding the Philadelphia River City Project.
All Defendants were convicted of Count Ten (honest services mail fraud), which charged them with devising a scheme to exchange Defendant Teitelman's free legal services, combatting Defendant Wright's eviction, for his official acts. It involved a letter by mail from Defendant Teitelman's law-firm associate to a lawyer at PBRG, the real estate company pursuing the eviction, with the knowledge and approval of Defendants Teitelman and Chawla, which included an answer to the eviction complaint against Defendant Wright.
All Defendants were convicted of Count Twelve (traditional mail fraud), which charged them with devising a scheme to deprive PBRG of money and property by concealment. It involved Defendants Chawla and Teitelman as they arranged to provide Defendant Wright the free use of an apartment and an associated parking space. The mailing in question was the same letter mentioned in the description of the facts surrounding Count Ten.
All Defendants were acquitted of Count 2 (honest services wire fraud). Defendants Chawla and Teitelman were acquitted of Count 3, and all Defendants were acquitted of Counts 4 through 9 (honest services wire fraud) and Count 11 (honest services mail fraud). Defendant Chawla was acquitted of Count 13 (bribery), and Defendant Wright was acquitted of Count 14 (also bribery).*fn3
The Court then sentenced Defendant Wright to 48 months imprisonment, Defendant Chawla to 30 months imprisonment, and Defendant Teitelman to 24 months imprisonment. Defendants appealed. Subsequent to the Court's sentencing and when the case was on appeal, the U.S. Supreme Court decided Skilling v. United States, 130 S. Ct. 2896 (2010), wherein the Court held that the honest services fraud statute, 18 U.S.C. § 1346, only covered bribery and kickback schemes. 130 S.Ct. at 2927-35. It found that honest-services-fraud theories based on a public servant's failure to disclose a conflict of interest resulting in personal gain were impermissible, because they rendered the statute unconstitutionally vague. Id.
Applying Skilling to this case, the Third Circuit found that, although the evidence was sufficient to sustain all of Defendants' convictions, United States v. Wright, 665 F.3d 560, 570, 575 (3d Cir. 2012), Skilling made the Court's honest services fraud instruction, which instructed the jury that liability may lie under a "conflict-of-interest" theory or "bribery" theory, incorrect, Id. at 570-72. Furthermore, because evidence of honest services fraud overlapped with the evidence submitted on the traditional fraud counts, "prejudicial spillover" tainted the traditional fraud convictions. Id. at 577. Therefore, the Third Circuit vacated all four counts and remanded for a new trial. Id. at 577-78. Defendants moved for a rehearing en banc, which the Third Circuit denied. On March 20, 2012, the Third Circuit issued its mandate ordering a new trial on all convicted counts.
In preparation for retrial, which has been scheduled for March 18, 2013, and with the view of narrowing the proofs the Government may offer at the retrial, Defendants filed a Motion to Limit the Scope of Retrial (ECF No. 360). The Government responded (ECF No. 361), and, shortly thereafter, Defendants filed a reply memorandum. In the Court's Order of February 4, 2013, the Court granted in part and denied in part Defendants' Motion, rejecting their constructive-amendment argument and their double jeopardy/issue preclusion arguments as they related to all but one of the issues surrounding the substantive honest services counts. See ECF No. 385. The only issue the Court precluded from trial was Hardeep Chawla's $1000 check given to Defendant Wright at a Christmas party. Defendants moved to extend the time to file an interlocutory appeal on the issue-preclusion matters, and the Court granted the motion, extending the time to March 18, 2013, the day of trial. See Order, Feb. 14, 2013, ECF No. 387.
Defendants have since entered into "C" plea agreements with the Government, which were presented to the Court on March 12, 2013, two hours prior to the final pretrial conference and without any explanatory memorandum.*fn4 The Court held a hearing to consider the plea agreements on Friday, March ...