United States of America v. Thomas D. Carbo

The Honorable A. Wallace Tashima, Senior United States*
Circuit Judge for the Ninth Circuit, sitting by designation.
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PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
____________
NO. 07-3576
____________
UNITED STATES OF AMERICA,
Appellant
v.
THOMAS D. CARBO,
Appellee
____________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. No. 05-CR-418-3)
District Judge: The Honorable J. Mary A. McLaughlin
Argued October 30, 2008
BEFORE: SLOVITER, STAPLETON and TASHIMA ,*
Circuit Judges,
(Filed: July 9, 2009)
Robert A. Zauzmer, Chief of Appeals
Richard J. Zack
Paul L. Gray (Argued)
Assistant United States Attorneys

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615 Chestnut Street, Suite 1250
Philadelphia, PA 19106
Counsel for Appellant
Robert J. Donatoni (Argued)
17 West Gay Street
West Chester, PA 19380
Counsel for Appellee
OPINION
TASHIMA, Circuit Judge:
Thomas D. Carbo was convicted of conspiracy and honest
services mail fraud for his role in a scheme to conceal conflicts
of interest in the awarding of government contracts by an official
of the Borough of Norristown, Pennsylvania (the “Borough”).
The District Court overturned the conviction and granted a
judgment of acquittal on the ground that the prosecution failed to
produce sufficient evidence of Carbo’s specific intent to defraud.
We reverse.
I. JURISDICTION & STANDARD OF REVIEW
The District Court had jurisdiction pursuant to 18 U.S.C.
§ 3231, and we have appellate jurisdiction pursuant to 28 U.S.C.
§ 1291. The grant of a motion for judgment of acquittal under
Federal Rule of Criminal Procedure 29 is reviewed de novo.
United States v. Bobb, 471 F.3d 491, 494 (3d Cir. 2006). In
determining whether evidence is sufficient to sustain a
conviction, a court “must view the evidence in the light most
favorable to the government, and will sustain the verdict if any
rational trier of fact could have found the essential elements of
the crime beyond a reasonable doubt.” United States v. Smith,
294 F.3d 473, 478 (3d Cir. 2002) (internal quotation marks
omitted).

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As it happened, Biondi’s concern was unfounded.1
The mayor was reelected, and Biondi remained in office
throughout the events at issue here. Biondi was ultimately
removed from office in 2004 shortly after Norristown enacted a
new Home Rule Charter and the position of mayor was eliminated.
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II. FACTUAL AND PROCEDURAL BACKGROUND
The fraud at issue in this case began with Anthony
Biondi, who as Borough administrator was responsible for the
day-to-day operations of Norristown government. Among
Biondi’s responsibilities was contracting for basic services on
behalf of the Borough. For most of the time period relevant to
this case, Borough contracts were not awarded by a formal
bidding process. Instead, when making contracts worth $10,000
or more, Biondi was authorized to choose from a list of approved
contractors. In cases of smaller contracts, Biondi could select
any contractor he wanted.
In 2001, Biondi became nervous that a new mayor of
Norristown would be elected and would appoint a new Borough
administrator to replace Biondi. In order to establish a financial1
safety net for himself, Biondi decided to buy a used Mack truck
that he could hire out to local contractors. The ownership of a
second business was not forbidden under either state or local
ethics laws, but his business venture did subject Biondi to
disclosure requirements designed to avoid conflicts of interest by
public officials. The Pennsylvania Public Official and Employee
Ethics Act requires state and local employees to file annual
statements disclosing all outside employment and income in
excess of $1,300. 65 PA. CONS. STAT. § 1104(a). The violation
of this act is a misdemeanor. Id. § 1109(b). Similarly, the Home
Rule Charter of the Borough of Norristown in effect at the time
of the events in this case required all Borough employees to
disclose any financial interest they had with entities proposing to
contract with the Borough, and to recuse themselves from
decisions involving such contracts. 346 PA. CODE § 41.10-
1002(B).

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Biondi failed to disclose his new business as required and
engaged in flagrant conflicts of interest, renting his truck out to
some of the same contractors to whom he awarded Borough
contracts. His primary partner in this enterprise was Lawrence
Mazzerle, the co-owner of Pottstown Contracting, a company
that was on the list of approved Borough contractors that Biondi
hired to do paving and snow-removal work for the Borough.
Biondi and Mazzerle shared the cost of the truck and, in the hope
of avoiding detection by local and state officials, kept the truck
titled and insured in the name of Pottstown Contracting.
Mazzerle kept the truck at his business and would generally pay
Biondi $460 per day for use of the truck. Biondi insisted that
Mazzerle pay him in cash, and he also told Mazzerle not to use
the truck inside the Borough, so that others who knew that
Biondi owned the truck would not think that Biondi was engaged
in self-dealing by awarding business to contractors that hired his
truck. On at least two occasions, Biondi told Mazzerle that he
(Biondi) was not allowed to have an extra source of income in
addition to his Borough salary. He also told Mazzerle that he
was required to report any additional source of income.
Carbo played a similar, but lesser, role to Mazzerle in
assisting Biondi’s illegal scheme. Carbo, like Mazzerle, owned
a contracting business called Tommy’s Paving and Excavating.
Tommy’s contracted with the Borough, but its contracts were on
a smaller scale because it was not on the list of approved
Borough contractors that were eligible to receive contracts worth
more than $10,000. Carbo’s company was also employed at
times as a subcontractor for Mazzerle’s business. In a
conversation with Carbo that was secretly recorded by a
government informant, Carbo denied that he had given Biondi
any improper payments or favors in return for work, but at the
same time he recognized the need for secrecy in dealing with
Biondi in order to avoid attracting government attention. When
Carbo rented Biondi’s Mack truck, he apparently paid Biondi in
cash and did not enter the information of payments to Biondi in
the Quickbooks software he otherwise used to manage the
accounting for his business. In the records Carbo did keep
regarding his payments to Biondi, he did not refer to Biondi by
name, instead filing the payments under the name “Number 1

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Contracting Corp.”
Eventually, when Biondi decided to trade up to a newer
Peterbilt truck, Carbo offered to buy the older Mack truck from
Biondi. Carbo appears to have tried to disguise the price he paid
for the truck and the identity of the recipient of those payments.
Only $500 in cash went directly to Biondi. Carbo paid up to
$4,500 in cash and $10,000 in a bank check to Pottstown
Contracting, Mazzerle’s company. In addition, Carbo paid over
$2,400 to a truck painting company to have Biondi’s new
Peterbilt truck repainted. These payments either did not appear
in Carbo’s books at all, or were identified under misleading
names that would not indicate that they were used to purchase a
truck or paid for the benefit of Biondi. Carbo was aware that
Biondi kept his new Peterbilt truck titled in the name of
Pottstown Contracting.
In late 2003, the Pennsylvania State Ethics Commission
began investigating Biondi’s failure to report his outside income,
and, ultimately, Carbo, Biondi, and Mazzerle were charged with
honest services mail fraud. Biondi and Mazzerle both pled
guilty, while Carbo went to trial and was convicted of honest
services mail fraud in violation of 18 U.S.C. §§ 1341, 1346, and
conspiracy to commit honest services mail fraud in violation of
18 U.S.C. § 371. Carbo moved for a judgment of acquittal
pursuant to FED. R. CRIM. P. 29, which the District Court
granted. The government timely appealed.
III. ANALYSIS
Honest services mail fraud is a specific form of mail
fraud, 18 U.S.C. § 1341, in which an offender uses the mails to
engage in a “scheme or artifice to deprive another of the
intangible right of honest services.” 18 U.S.C. § 1346. The
most obvious form of honest services fraud is outright bribery of
a public official. But because it is often difficult to prove
bribery directly, courts have recognized a second form of honest
services fraud, involving the failure by a public official to
disclose a conflict of interest. United States v. Antico, 275 F.3d
245, 262-63 (3d Cir. 2001). The danger of the second form of

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Because conspiracy and aiding and abetting both2
require that the defendant specifically intend to further the
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honest services fraud is that it may be overly broad: minor
conflicts of interest that an elected official cannot help but
encounter could conceivably subject the official to criminal
liability for honest services fraud. See, e.g., United States v.
Kincaid-Chauncey, 556 F.3d 923, 940 (9th Cir. 2009); United
States v. Bloom, 149 F.3d 649, 654 (7th Cir. 1998). Thus, this
court has suggested, without unequivocally deciding, that a
public official is guilty of honest services fraud only if his failure
to disclose a conflict of interest violated state law. United States
v. Panarella, 277 F.3d 678, 698-99 & n.9 (3d Cir. 2002).
Panarella came close to providing a definition of the second
form of honest services fraud when it stated that,
where a public official conceals a financial interest in
violation of state criminal law and takes discretionary
action in his official capacity that the official knows will
directly benefit the concealed interest, the official has
deprived the public of his honest services, regardless
whether the concealed financial interest improperly
influenced the official’s actions.
Id. at 680. Under this definition, only a public official could be
the principal offender in the second form of honest services
fraud, but a private citizen may be guilty of honest services fraud
for aiding and abetting a public official in committing the
offense. See United States v. Kemp, 500 F.3d 257, 292-93 (3d
Cir. 2007).
Three elements must be met for a defendant to be found
guilty of either form of honest services mail fraud. The
government must prove beyond a reasonable doubt “(1) the
defendant’s knowing and willful participation in a scheme or
artifice to defraud, (2) with the specific intent to defraud, and (3)
the use of the mails or interstate wire communications in
furtherance of the scheme.” Antico, 275 F.3d at 261. At issue in
this case is the second element. Carbo argued, and the district2

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substantive offense, see Salinas v. United States, 522 U.S. 52, 65
(1997); United States v. Dixon, 658 F.2d 181, 189 n.17 (3d Cir.
1981), our analysis is the same for both.
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court agreed, that he lacked the requisite specific intent to
defraud because he did not know enough about Biondi’s
disclosure requirement to have acted with the intent to further a
scheme to evade it.
The government objects to the premise of Carbo’s
argument. According to the government’s view, the extent of
Carbo’s knowledge of the state ethics laws is irrelevant because
ignorance of the law is no excuse. Even if Carbo was entirely
unaware of Biondi’s disclosure requirements, he was still guilty
of honest services fraud as long as he aided and abetted the
scheme to disguise Biondi’s conflicts of interest. We cannot
accept the government’s position. It is true that, with respect to
most specific-intent crimes, including mail fraud in most
circumstances, ignorance of the law is no excuse. See United
States v. Paradies, 98 F.3d 1266, 1285 (11th Cir. 1996) (“In mail
fraud cases, the government need only prove that the defendant
had the intent to deceive, and ignorance of the law is no
defense.”) There is an exception to this rule, however, when
intent to violate a legal duty is an element of a crime. As an
example, consider United States v. Rhone, 864 F.2d 832 (D.C.
Cir. 1989), in which the D.C. Circuit overturned a conviction for
mail fraud because the judge erroneously instructed the jury that
ignorance of the law was no excuse. The alleged fraud in Rhone
consisted of the defendant’s scheme to continue to collect
unemployment benefits after she had obtained a new job. Id. at
833. The trial court instructed the jury that mail fraud was a
specific intent crime, but that “ignorance of the law is no
excuse.” Id. at 834. The Court of Appeals overturned the
conviction because the defendant’s conduct could constitute
fraud only if she knew that it was illegal for her to continue to
receive benefits. See id. at 836-37. Without that knowledge, she
could not have formed the intent to defraud, which was an
element of the crime. See id.

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The defendant in Panarella was actually a private3
citizen accused of being an accessory to honest services fraud after
the fact, but because he conceded that he would be guilty if the
public official were guilty, the court analyzed the case from the
perspective of the public official. 277 F.3d at 689.
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The same principle applies to Carbo’s alleged offense.
To understand why, it is necessary to examine the limitation on
honest services mail fraud in Panarella. See 277 F.3d at 697-99.
In Panarella, this court was required to decide whether a public
official could be convicted of honest services fraud even if there
was no allegation that the conflict of interest had affected the
official’s actions. See id. at 690-91. The court recognized that3
the statute forbidding honest services fraud lacks detail, and that,
without some refinement, it might subject an official to criminal
liability for ordinary conduct of daily life. See id. at 699. In
order to avoid this problem, the court adopted a requirement
imposed by state law as a limiting principle. Id. at 692-93.
Because the official’s failure to disclose his conflicts of interest
violated state ethics laws, the Panarella court was satisfied that
the misconduct rose to the level of criminal fraud. See id. at
695-96. Specific intent was not at issue in Panarella, and the
opinion does not address whether a defendant must knowingly
violate a legal disclosure requirement in order to be guilty of
honest services fraud. This is unsurprising: when a case deals
with honest services mail fraud committed by a public official,
the knowledge requirement will not normally be an issue,
because public officials like Biondi will almost always be aware
of the requirement imposed on them by state ethics laws to
disclose conflicts of interest. When, as here, however, the
defendant is a private citizen who has not been entrusted with a
position in service of the public and who may very well have no
understanding of ethics laws, the question of the defendant’s
knowledge of the law becomes much more important.
Although Panarella did not deal with the issue of specific
intent directly, the court’s principle of avoiding the
criminalization of innocent conduct is readily applicable to the
question. Panarella held that a violation of a state law ethics

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Panarella held that a state-law violation was4
sufficient to prove honest services fraud, but declined to decide
whether such a violation was necessary. See 277 F.3d at 699 n.9
We likewise decline to resolve this question. It might be possible,
for example, that a local ethics law like the one contained in the
Norristown Home Rule Charter could answer the concerns of the
court in Panarella by distinguishing clearly between innocent and
impermissible conflicts of interest. In the current case, we
conclude that Carbo did knowingly violate state law, and thus we
need not decide whether anything other than a state law violation
could suffice for a conviction for honest services fraud. Regardless
of whether a conviction may be based only on state law, or on some
other source, knowledge of that law or other source is required for
specific intent.
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requirement was sufficient to support a conviction for honest
services mail fraud in part because the illegality of the conflict of
interest under state law drew a clear distinction between
innocent behavior and criminal activity. See id. at 699.
Knowledge that an undisclosed conflict of interest is illegal
places a private citizen on notice that, by assisting the public
official to disguise the conflict, he is not merely lobbying, but is
engaged in a criminal conspiracy. If a defendant could be
convicted of honest services fraud without knowing that his
actions violated state ethics law, criminal liability for honest
services fraud might expand in exactly the way the Panarella
court meant to avoid. We hold that, when a private citizen is
charged with aiding and abetting or conspiracy to commit honest
services fraud by a public official, the prosecution must prove
that the defendant knew that the public official was required by
law to disclose the conflict of interest. Without the knowledge4
that the failure to disclose the conflict of interest is illegal, we
cannot be certain that the defendant formed the specific intent to
defraud the public.
Our conclusion is merely an application of the rule that,
“in order to convict a defendant of aiding and abetting, the
government must prove that ‘the defendant charged with aiding
and abetting that crime knew of the commission of the

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substantive offense and acted with the intent to facilitate it.’”
Kemp, 500 F.3d at 293 (quoting Dixon, 658 F.2d at 189 n.17).
The key phrase for our purposes is “knew of the commission of
the substantive offense.” Because the violation of state law is
critical to distinguishing between acceptable political deal-
making and criminal deprivation of the public’s right to the
honest services of public officials – in other words, between
normal politics and fraud – a defendant who does not know of
the state law cannot be said to have known of the commission of
the substantive offense. This need not create an insurmountable
obstacle to prosecutors. In order to satisfy Panarella’s concerns
about overbreadth, it is not necessary to demonstrate that the
defendant knew the fine details of an official’s reporting
requirements. If the evidence is sufficient for a reasonable jury
to conclude that the defendant participated in a scheme to assist
a public official in hiding a conflict of interest, and that the
defendant knew that the law forbade the official from engaging
in that form of undisclosed conflict of interest, a conviction for
honest services mail fraud should be upheld.
The District Court was correct to hold that the doctrine of
“ignorance of the law is no excuse” does not apply to this case,
but it erred by imposing too high of a standard of proof on the
prosecution. The District Court justified its decision to grant a
judgment of acquittal by pointing to cases like United States v.
Wexler, 838 F.2d 88 (3d Cir. 1988), in which a conviction was
overturned because the evidence was insufficient to show that
the defendant meant to aid and abet a specific offense. In
Wexler, the prosecution produced evidence that strongly
suggested that the defendant knew he was involved in a plot to
transport some sort of contraband. Id. at 91-92. Nevertheless,
we held that the defendant could not be convicted of aiding and
abetting the distribution of drugs because the evidence was
equally consistent with the possibility that the defendant
believed he was transporting some other form of contraband. Id.
at 92.
But the government need not conclusively eliminate every
other possibility before the jury may reasonably infer that a
defendant was guilty of aiding and abetting a particular offense.

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See Kemp, 500 F.3d at 293. In Kemp, a case involving multiple
defendants in a conspiracy to bribe Corey Kemp, the Treasurer
of Philadelphia, one of the defendants argued that he was not
guilty of aiding and abetting or conspiracy because he did not
know that he was assisting in the commission of honest services
fraud, rather than some other illegal activity. Id. at 292. The
defendant was accused of assisting a lawyer in bribing Kemp.
Id. at 293. He wrote a check and transferred money to Kemp at
the lawyer’s behest, while knowing about the public official’s
position and that the lawyer was politically connected. Id. The
defendant argued that his actions were equally consistent with
aiding and abetting money laundering or with tax evasion, and
that therefore the jury could not reasonably conclude that he
meant to aid and abet the offense of honest services fraud. Id.
Nevertheless, we upheld the conviction, pointing out that “the
government’s theory [of honest services fraud] specifically
accounts for Kemp’s position as a public official in a way that
[the defendant’s] other proposed crimes do not.” Id.
Under this standard, the prosecution presented sufficient
evidence to convict Carbo. The jury could reasonably conclude
that Carbo knew not only that his dealings with Biondi were
somehow inappropriate, but that the illegality was directly
connected to Biondi’s role as Borough administrator. Carbo
may well have had an innocent explanation for paying Biondi in
cash – particularly because he paid others in cash as well – but it
is not easy to find an innocent explanation for his practice of
listing Biondi in his own records under a code name and keeping
the payments to Biondi, but not to other payees, secret from even
his own employees. In particular, the secretly recorded
conversation with a government informant demonstrated that
Carbo knew that the need for secrecy was due to Biondi’s
position with the Borough. Carbo worried that Biondi and
Mazzerle were creating a “paper trail to hell” by being indiscreet
in their dealings and that auditors would uncover the scheme.
These comments were made in the context of a discussion about
Biondi’s conflict of interest in assigning work to contractors.
The evidence supports one theory much more strongly than any
other: that Carbo acted in order to assist Biondi in keeping his
conflict of interest secret. Furthermore, the level of secrecy and

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misdirection with which Carbo conducted his dealings with
Biondi, coupled with the statements Carbo made in the recorded
conversation, strongly suggest that Carbo knew that Biondi’s
embrace of these conflicts of interest was illegal and could
potentially have dire consequences for Biondi if they were
discovered.
The evidence indicated that Carbo acted with the intent to
further what he knew to be an illegal scheme and, as in Kemp,
the evidence more strongly supported the inference that Carbo
intended to assist Biondi in disguising his conflict of interest
than any other crime. While it may be that Carbo did not know
the details of Biondi’s reporting requirements under state law,
the jury could have reasonably inferred that he did know that he
was assisting Biondi to violate a legal duty to avoid undisclosed
conflicts of interest. The evidence was not overwhelming, but
all that was required was that “any rational juror could have
found the elements of the crime beyond a reasonable doubt.”
United States v. Cartwright, 359 F.3d 281, 286 (3d Cir. 2004)
(internal quotation marks omitted). Under this highly deferential
standard, the jury’s verdict must be upheld, and the District
Court’s judgment of acquittal overturned.
IV. CONCLUSION
Even if Carbo did not know the details of Biondi’s
disclosure requirements, the evidence was sufficient for a
reasonable jury to conclude that Carbo had the specific intent to
aid and abet honest services mail fraud, and to conspire to
commit honest services mail fraud. Therefore, the order of the
District Court acquitting defendant will be REVERSED, and the
case REMANDED with instructions to reinstate the verdict and
for further proceedings in accordance with this opinion.

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