NEW YORK, July 2 (Reuters) - An attorney's legal counsel can
be considered "property" to justify an extortion charge, a
federal appeals court has ruled.
The 2nd Circuit U.S. Court of Appeals last week upheld the
conviction of investment adviser Giridhar Sekhar for having
attempted to extort Luke Bierman, the former general counsel for
the New York State Comptroller.
Sekhar was convicted of attempted extortion and related
federal crimes by a jury in 2011 for trying to blackmail Bierman
into recommending that the comptroller invest $35 million worth
of pension funds in a fund managed by Sekhar's company,
Boston-based FA Technology Ventures.
Sekhar claimed to have evidence of Bierman's involvement in
an extramarital affair with a co-worker and threatened to expose
Under the Hobbs Act, extortion means the "obtaining of
property from another, with his consent, induced by wrongful use
of actual or threatened force, violence, or fear, or under color
of official right." Courts have found that "property" can be any
valuable right, such as the right to conduct business freely,
that represents a "source or element of wealth," according to
the appeals court's ruling.
Sekhar argued that Bierman's recommendation to the
comptroller, which was not binding, could not be considered
property, because it did not represent a source of wealth for
But the court unanimously rejected that contention, ruling
that Bierman's job was to provide legal counsel to the
comptroller and that the value inherent in his advice would be
compromised if delivered under threat.
"According to Sekhar, the government had to show that the
General Counsel derived wealth from his ability to make the
recommendation or that he would have suffered monetarily had
Sekhar succeeded in forcing him to change his recommendation,"
wrote Chief Judge Dennis Jacobs for the three-judge panel. "The
value and worth of a lawyer's services may be said generally to
depend on freedom from conflict, including a conflict created by
Sekhar's lawyer, Paul Clyne, said the decision was simply
"wrong" and that his client would appeal to the Supreme Court.
According to Clyne, the decision was the first to find that a
lawyer's advice could be construed as property.
"It's a complete overreach," he said. "It has no pecuniary
effect on (Bierman) whatsoever."
Elizabeth Coombe, one of the assistant U.S. attorneys who
handled the prosecution, said the government was "pleased" with
Sekhar's company stood to earn at least $7 million from the
investment, according to court papers. He represented himself
during his trial and was sentenced to 15 months in prison by
U.S. District Judge Thomas McAvoy.
Judges Peter Hall and Barrington Daniels Parker joined
The case is U.S. v. Giridhar Sekhar, U.S. Court of Appeals
for the Second Circuit, No. 11-4298.
For the prosecution: Elizabeth Coombe and Rajit Dosanjh,
assistant U.S. attorneys for the Northern District of New York.
For Sekhar: Paul Clyne.
(Reporting by Joseph Ax)
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