A member of the Arizona House of Representatives was charged last Wednesday by a federal grand jury in the District of Arizona with bribery, fraud, attempted extortion and false statements in connection with receiving more than $6,000 in tickets to sporting and special events while serving as a Tempe City Council councilmember and member-elect of the Arizona House.

The indictment charges Paul Ben Arredondo, 63, of Tempe, with one count of federal programs bribery, two counts of honest services mail fraud, one count of attempted Hobbs Act extortion and one count of making false statements. Arredondo will be arraigned on May 30, 2012, in U.S. District Court for the District of Arizona before U.S. Magistrate Judge Lawrence O. Anderson.

Honest services fraud has been an evolving area in federal criminal prosecutions since its addition to 18 U.S.C. 1346, the mail and wire fraud statute, in 1988. The question lower courts have grappled with is what type of specific conduct, in the private and public sector, falls under the purview of “honest services” fraud. Without any indication of Congressional intent in the statute itself, lower courts approached the law broadly, which lead to little limitation as far as federal prosecutors were concerned.

However, in 2010, three cases made their way to the U.S. Supreme Court on this exact issue. The most notable of the three is Skilling v. U.S., where the former CEO of Enron, Jeffrey Skilling, was convicted of honest services fraud. Holding that honest services fraud is limited to bribery and kickback schemes, the Supreme Court overturned Skilling’s conviction under the statute because he did not engage in such behavior. The other two cases were remanded in order for the lower courts to evaluate each case based on the holdings of Skilling.

According to the indictment, Arredondo was a councilmember in Tempe for 16 years, until July 2010. He was elected to the Arizona House of Representatives in November 2010. The indictment alleges that from February 2009 to November 2010, Arredondo accepted, agreed to accept and solicited things of value, mainly sporting tickets, from representatives of a company whose purported business objective was to acquire city-owned property in Tempe for real estate development purposes. Allegedly, in return for those tickets, Arredondo took and agreed to take action in his capacity as a Tempe city councilmember and as a member of the Arizona House of Representatives to facilitate the purported purchase of city-owned property and development project. The representatives were, in fact, undercover agents with the FBI, and no development project actually existed.

Although this case seems to involve a bribery scheme, it was initiated by undercover government agents. Entrapment is a viable defense if Arredondo can raise a reasonable doubt as to whether he had any intent to commit the crime had it not been for inducement or persuasion on the part agents.

In addition to the fraud and bribery charges, Arredondo must also prepare a defense for attempted extortion, which is somewhat of a catchall bribery provision for a public official acting under color of official right. To prove attempted extortion under the Hobbs Act, the government simply has to prove that Arredondo attempted to agree to take some official action in exchange for payment as opportunities arose to do so. Arredondo’s actual intent to follow through with the agreement is irrelevant.

The author of this blog is Erich Ferrari, an attorney specializing in Federal Criminal Defense matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrari-legal.com.

Bookmark and Share