United States of America v. James J. Peperno, Jr

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
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No. 23-1389
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UNITED STATES OF AMERICA
v.
JAMES J. PEPERNO, JR.,
Appellant
_____________________________________
On Appeal from the United States District Court for the
Middle District of Pennsylvania
(District Court No. 3-21-cr-00287-001)
District Judge: Honorable Malachy E. Mannion
______________
Submitted Pursuant to Third Circuit L.A.R. 34.1(a)
September 12, 2024
______________
Before: CHAGARES, Chief Judge, ROTH and RENDELL,
Circuit Judges.
(Filed: October 18, 2024)

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Christian T. Haugsby
Office of United States Attorney
Middle District of Pennsylvania
Sylvia H. Rambo United States Courthouse
1501 N 6th Street,
2nd Floor
P.O. Box 202
Harrisburg, PA 17102
Counsel for Appellee
Gino A. Bartolai, Jr.
238 William Street
Pittston, PA 18640
Counsel for Appellant
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OPINION OF THE COURT
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RENDELL, Circuit Judge.
A jury found Defendant-Appellant James Peperno, Jr.
guilty of nine counts of conspiracy to commit bribery and wire
fraud and related charges. At sentencing, the District Court
applied two sentencing enhancements to reflect that multiple
bribes were paid and that the total value of the bribes exceeded
$15,000. Peperno was sentenced to 72 months’ imprisonment
and has appealed, urging that the District Court wrongly denied
his request for a jury instruction on his entrapment defense and
erred in applying the sentencing enhancements. Because the
District Court’s decision to deny the request for an entrapment
jury instruction and its application of the relevant sentencing

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enhancements are supported by the record and applicable law,
we will affirm.
I
There are three key players in this case and in the
underlying bribery scheme. First, Walter Stocki, who was
engaged in litigation with the borough of Old Forge,
Pennsylvania, regarding his scrapyard and construction
equipment business’s zoning violations. Next, Robert
Semenza, Jr., Old Forge Borough Council President, who
agreed to influence Stocki’s zoning litigation in return for
bribes. Last but not least is James Peperno, Jr., the defendant-
appellant and a friend of Semenza, who, in January 2019,
devised a scheme whereby he would convince Stocki to pay
him and Semenza bribes in exchange for favorable progress in
Stocki’s zoning litigation.
A
In January 2019, Peperno owed nearly $400,000 in
restitution from a previous case in which he was found guilty
of federal mail fraud. At the same time, Walter Stocki was
engaged in litigation with Old Forge over his scrapyard and
construction machinery business’s zoning violations. When
Peperno learned about the lawsuit against Stocki, he saw an
opportunity to solve both of their problems and hatched a plan
to help Stocki with his litigation by “act[ing] as a liaison
between the borough council and the courts.” Appx 968. This
plan was to be paid by Stocki to influence the Old Forge
Borough Council—through bribery—to come to an agreement
on Stocki’s litigation. Though he had no prior relationship with
Stocki, he reached out to Stocki to discuss his proposal.

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At their initial meeting on January 10, Peperno asked
Stocki for a $20,000 up-front cash payment, plus a monthly
retainer fee. Unbeknownst to Peperno, Stocki had recorded this
initial meeting on his cellphone. During that meeting, Peperno
told Stocki that he had spoken with Semenza about Stocki’s
litigation, and that Semenza could “turn the tide” in Stocki’s
favor. Appx 1987. When Stocki asked Peperno what he needed
to do, Peperno told him, “[I]t’s not going to be cheap . . . .”
Appx 1992. Peperno also told Stocki they would need to use
Peperno’s consulting firm to make the deal look legitimate and
requested $20,000 up front. Stocki told Peperno that he would
not commit to paying that much without a guarantee, so
Peperno called Semenza on speakerphone and told him,
“[W]e’re going full force with what we talked about before
. . . . [W]hatever we have to do with him you are going to take
care of okay . . . .” Appx 1995.
Again, Peperno insisted Stocki enter a contract with
Peperno’s consulting firm to make it “official,” and proposed
a $10,000 monthly consulting fee. Appx 1996-97. While their
talks continued, Semenza called Peperno back and told
Peperno, “[L]et me know what you need and what you want
me to do and I’ll do whatever you need.” Appx 1999. After
hanging up, Peperno told Stocki they could get four (out of
seven) votes on the Borough Council to influence the zoning
litigation, agreeing with Stocki about the need to “take care of”
the councilmembers. Appx 2008. Peperno offered to arrange a
meeting between Stocki and Semenza. The meeting did not
happen immediately, and Stocki did not pay Peperno that day.
The following day, Stocki contacted the FBI to tell them
about the meeting with Peperno.

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Peperno and Stocki subsequently broke off
communication. However, in the spring of 2019, Semenza
began contacting Stocki directly to request money. In May
2019, one of Stocki’s employees told the FBI that he and Stocki
had been making payments to Semenza, which ultimately
totaled approximately $10,000.1 Around the same time,
Semenza accused Stocki of violating an injunction that had
been entered in the zoning litigation. Then, Semenza contacted
Stocki frequently via text message to ask him for “loan[s]” and
implied that he would continue to help Stocki with the Borough
Council. Appx 226-46. Stocki provided Semenza with
thousands of dollars in cash in response to these requests for
“loans” but did not obtain a promissory note or repayment
schedule and did not expect to be repaid. Appx 245-46.
Stocki’s employee recorded two of his interactions with
Semenza where he paid Semenza in cash. Semenza’s direct
contact with Stocki and his employee ended in July 2019.
In August 2019, Stocki and his employee agreed to meet
with the FBI to report their dealings with Semenza and
Peperno. That fall, at the FBI’s direction, Stocki began
recording his conversations with Peperno and paying him with
serialized cash that the FBI provided. During those recorded
conversations, Peperno told Stocki that he had influence over
other councilmembers and the judge presiding over the zoning
litigation, who Peperno warned Stocki could impose up to
$500,000 in fines.
1 Stocki testified to an amount between $5,000 and $10,000.
Appx 354. At sentencing, Peperno’s counsel agreed the PSR
was “accurate” when it gave the total as approximately
$10,000. Appx 2104.

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On October 21, 2019, Stocki paid Peperno $1,500 in
cash provided by the FBI. Peperno told Stocki that whatever
happened previously between Stocki and Semenza had been a
mistake. Peperno asked for $2,500, and Stocki sought
assurances about what Peperno could do to help him. In
response, Peperno called Old Forge Councilmember James
Hoover and left a message. He also told Stocki he needed
another $1,000 to start putting a deal together. On October 28,
2019, Stocki gave Peperno another $1,000. Peperno deposited
portions of each of these payments into his parents’ bank
account.
On October 30, 2019, Peperno met Stocki in person
because he was concerned about saying too much over the
phone. Stocki told Peperno that he had paid Semenza a “loan,”
but that he did not expect to be repaid. Appx 1586. Stocki told
Peperno that he wanted to continue a contempt hearing in the
zoning litigation that was scheduled for the following week.
Peperno told Stocki that the next time he met with Semenza,
“[T]here is no way he’s going to do anything without money I
know that.” Appx 1588. Peperno agreed to speak with
Semenza and let Stocki know what it would cost to get the
hearing postponed.
Later that day, Peperno told Stocki that Semenza agreed
to try to get the hearing continued in exchange for $5,000.
Appx 1593, 1610.
On the recording, Peperno acknowledged that the deal
was illegal.
In an exchange of text messages from October 31,
Peperno told Semenza that if he “could pull this off,” Peperno
would get Semenza “steady extra work” on his payroll, and

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asked Semenza to keep his distance from Stocki. Appx 1848.
He also told Semenza that they had control of Stocki: “[W]e
have the gun and he’s under pressure[.]” Appx 1849. The next
day, Peperno texted Semenza to ask if he wanted “to be
included in anything I do,” to which Semenza replied, “Yes[.]”
Appx 1853.
On November 1, Peperno told Stocki that he had
worked out a deal for the hearing, and that Semenza needed
$5,000 and Peperno needed $1,000 for the deal to work. Appx
1610. Peperno called Semenza to say they were moving
forward and asked to meet with Semenza. He told Semenza he
wanted to see him “with a little bit of green.” Appx 1612.
Peperno hung up and told Stocki that he wanted to “take care
of” Semenza, and Peperno and Stocki agreed that Stocki would
give Peperno $3,500 the following day, and that Peperno
would give Semenza “the other [$]2,500 when it’s done.”
Appx 1613-14, 1634. Peperno also suggested they pay another
councilmember and the Common Pleas Court’s President
Judge, whom Peperno could “see . . . taking cash.” Appx 1615-
18.
That same day, Peperno told Stocki it was a bad idea for
him to meet directly with Semenza and urged that Stocki use
him as a buffer. Appx 1625-26. He referenced a Lackawanna
County Commissioner who had been convicted of public
corruption because he accepted illicit payments without using
a middleman. Appx 1626.
On November 2, 2019, Stocki provided Peperno with
$2,500 in FBI prerecorded funds—Peperno chastised him for
not bringing $3,500. Appx 1643-44. Stocki asked Peperno to
call Semenza for reassurances. Appx 1644. Peperno called
Semenza and told him that Stocki was following through on

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his end of the deal, and Semenza “ha[d] to really perform[.]”
Appx 1644-45. Semenza agreed. Appx 1645. Afterward,
Peperno was observed meeting with Semenza. Peperno
deposited $2,000 of Stocki’s $2,500 into his parents’ bank
account.
On November 4, Peperno sent an email to Semenza
containing a resolution proposal for Semenza to present to the
Borough Council. Peperno told Semenza to get the proposal to
the Borough’s solicitor but not to forward the email containing
it. Peperno later deleted the email from his own account. The
proposal was ultimately rejected.
On November 5, Stocki paid Peperno another $1,000,
again in prerecorded funds from the FBI. Peperno was
recorded telling Stocki about a proposed meeting the following
day where Semenza would be present to “protect” Stocki and
ensure he would not get “jammed up,” but instructed Stocki to
avoid Semenza and “[p]retend he’s your enemy.” Appx 1656-
57. He showed Stocki a copy of the resolution he had emailed
Semenza the day before but would not allow Stocki to keep it
or photograph it, to avoid “implicat[ing] people” with
“hardcore evidence.” Appx 1656-58. Peperno again deposited
much of the FBI funds into his parents’ bank account.
Ultimately, Peperno and Semenza were unsuccessful in
their efforts to influence the zoning litigation against Stocki.
B
In September 2021, a federal grand jury returned an 11-
count indictment charging Peperno with bribery, wire fraud,
money laundering, perjury offenses, and conspiracy to commit
bribery and wire fraud. Appx 22-52. Peperno pleaded not

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guilty and, following an eight-day trial, Peperno was found
guilty on all counts except for two counts of money laundering.
Appx 2065-78.
The PSR calculated that Peperno’s total offense level
was 25 and that his criminal history category was III, yielding
an advisory guideline range of 70 to 87 months’ imprisonment.
At sentencing, Peperno objected to the PSR’s recommendation
that the District Court apply two sentencing enhancements: the
first because his offenses involved more than one bribe under
Section 2C1.1(b)(1) of the Guidelines, and the second because
the total value of the bribes paid was more than $15,000 and
less than $40,000 under Section 2C1.1(b)(2). Appx 2110-11,
2103-06. The District Court overruled both objections, finding
both recommendations for enhancement to be supported by the
evidence.
After discussing the factors prescribed by § 3553(a) and
finding that Peperno’s “utterly fraudulent” intent was “very
clear” and that he was motivated by “greed and power,” the
District Court sentenced him to 72 months’ imprisonment.
Appx 2129-32.
Peperno timely appealed.
II
The District Court had jurisdiction under 18 U.S.C.
§ 3231. This Court has jurisdiction under 28 U.S.C. § 1291 and
18 U.S.C. § 3742(a).
III
Peperno first urges that the District Court erred when it
denied his request for a jury instruction on his entrapment

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defense. We review a district court’s decision not to provide an
entrapment instruction de novo. United States v. Baker, 928
F.3d 291, 295 n.7 (3d Cir. 2019).
“Entrapment is a relatively limited defense that may
defeat a prosecution only when the Government’s deception
actually implants the criminal design in the mind of the
defendant.” United States v. Wright, 921 F.2d 42, 44 (3d Cir.
1990) (emphasis added) (cleaned up). The entrapment defense
contains two elements: “(1) government inducement of the
crime, and (2) a lack of predisposition on the part of the
defendant to engage in the criminal conduct.” Id. The defendant
bears the initial burden of production. Id. To present an
entrapment defense and receive an entrapment instruction, the
defendant must “produc[e] evidence of both inducement and
non-predisposition to commit the crime.” Id. Once the
defendant satisfies his initial burden, the burden shifts to the
Government to prove beyond a reasonable doubt that it did not
entrap the defendant. Id.
Here, Peperno did not satisfy his burden on either
element.
Inducement can take different forms: “persuasion,
fraudulent representation, threats, coercive tactics, harassment,
promises of reward or pleas based on need, sympathy or
friendship.” Id. at 45 (quoting United States v. Fedroff, 874
F.2d 178, 184 (3d Cir. 1989)). “[M]erely opening an
opportunity for a crime is insufficient.” United States v.
Dennis, 826 F.3d 683, 690 (3d Cir. 2016). Rather, “the
government’s actions must have overpowered the defendant.”
United States v. James, 928 F.3d 247, 256 (3d Cir. 2019).
Peperno failed to meet this standard. The evidence at trial,
which included many recorded conversations between Peperno

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and Stocki, made clear that Peperno proposed the bribery
scheme during his first meeting with Stocki in January 2019
and continued proposing bribery payments throughout the fall
of 2019. Peperno—not the Government—first initiated contact
with Stocki on January 10, 2019, and suggested that Stocki
come up with money to resolve the zoning litigation. Peperno
first suggested that Stocki make payments to Semenza. And it
was Peperno who called Semenza in Stocki’s presence to tell
him that they were “going full force with what [they] talked
about before,” referencing their plan to obtain money from
Stocki in exchange for Semenza’s influence over the litigation.
Appx 1995.
Semenza confirmed at trial that he and Peperno agreed
on their bribery plan prior to January 2019 and before the FBI
began its investigation into Peperno. Appx 672-73. This alone
supports the District Court’s denial of an entrapment
instruction.
Peperno focuses on the fall of 2019 when he directly
received money from Stocki and urges that “Stocki was
directed to contact Peperno by the FBI for the purpose of
inducing him to solicit or accept a bribe” in the fall of 2019.
Br. for Appellant 23. This ignores both that Peperno hatched
the scheme and first pitched it to Stocki in January 2019 as well
as Peperno’s continued role in directing Stocki to pay bribes to
both him and Semenza. One recorded conversation is
characteristic of Peperno’s leading role in the scheme:
Okay. Here’s what I need, not negotiable, this is
the way it has to be it’s the best I could do for
you. I need five for Bobby [Semenza] his debt
with you is clean okay if you want to give him
25 now and 25 when it’s done that’s fine but I

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can’t ask him to do any more than he’s already
done without any money.
…
I need about $1,000 of money I may have to, I
may have to juice Russell [Rinaldi] a little bit. I
may have to juice Junior a little bit for this thing
to, those are the, that’s the one vote that I need. I
may need about a, I need about $1,000 for that. I
need it now.
Appx 1610. Peperno was not induced or “overpowered” by the
Government. James, 928 F.3d at 256. While it may be the case
that the FBI and Stocki presented Peperno with an opportunity
in the fall of 2019 to complete his bribery scheme, the scheme
was his and Semenza’s, not the Government’s.
Peperno cannot satisfy his burden on the predisposition
element, either. Predisposition is the defendant’s “inclination
to engage in the crime for which he was charged, . . . measured
before his initial exposure to government agents.” Wright, 921
F.2d at 45. We use five factors when considering a defendant’s
predisposition: character or reputation, including any criminal
record; whether the suggestion of criminal activity was initially
made by the government; whether the defendant was engaged
in the criminal activity for profit; whether the defendant
evidenced reluctance to commit the offense; and the nature of
the inducement or persuasion. Id.
Here, Peperno failed to produce evidence to support any
factor. First, as to his predisposition, he was previously
convicted of federal mail fraud. He was in desperate financial
circumstances—owing nearly $400,000 in restitution from his

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previous conviction—when he first approached Stocki. And he
admitted that he lied to Stocki to convince him to pay him for
his “consulting business” that did not have employees, a
website, a bank account, or an office. Appx 1066. As to the
second factor, and as described above, Peperno first proposed
the criminal activity, not the Government or Stocki. Third,
regarding whether he was motivated by profit, Peperno
admitted as much to the jury. Appx 960 (“I was in financial
distress.”); Appx 967 (“I was looking for employment. I wanted
a job, and I knew Mr. Stocki was making a lot of money at the
landfill . . . .”). Fourth, there was no evidence indicating that
Peperno was reluctant to commit the offense. Rather, he
repeatedly attempted to contact Stocki and Semenza in 2019
and proposed many ideas for how to influence the litigation.
See Appx 1077 (“I was incessantly calling Walter Stocki when
he hired me, and I couldn’t get a hold of him . . . . I needed
money.”). Fifth and finally, the nature of the inducement or
persuasion the Government engaged in did not support a
finding that Peperno was not predisposed to commit the
offenses. The FBI authorized Stocki to record his
conversations with Peperno in the fall of 2019 and provided
Stocki with serialized cash to track the bribe money. However,
no evidence supports Peperno’s argument that the
Government’s participation went beyond merely authorizing
Stocki to record conversations and providing him money to pay
to Peperno.
Because Peperno failed to present evidence to satisfy
either element of the entrapment defense, the District Court
correctly denied his request for a jury instruction.
III

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Peperno next urges that the District Court committed
procedural error by incorrectly calculating his sentencing
guideline range based on both the number and the value of the
bribes under U.S.S.G. § 2C1.1. This Court exercises plenary
review over a district court’s interpretation of the Sentencing
Guidelines but reviews a district court’s factual findings,
including whether “the facts ‘fit’ within what the Guidelines
prescribe,” for clear error. United States v. Caraballo, 88 F.4th
239, 243 (3d Cir. 2023) (quoting United States v. Richards, 674
F.3d 215, 219 (3d Cir. 2012)).
A
First, Peperno argues that the District Court incorrectly
found that the offense involved multiple bribes, and thus erred
in increasing his offense level by two. Section 2C1.1(b)(1) of
the Sentencing Guidelines instructs that “[i]f the offense
involved more than one bribe or extortion, increase [the
offense level] by 2 levels.” The Sentencing Commission’s
commentary adds that “[r]elated payments that, in essence,
constitute a single incident of bribery or extortion (e.g., a
number of installment payments for a single action) are to be
treated as a single bribe or extortion, even if charged in separate
counts.” U.S.S.G. § 2C1.1, Application Note 2. However,
“multiple payments meant to influence more than one action
should not be merged together for purposes of § 2C1.1 merely
because they share a single overall goal or are part of a larger
conspiracy to enrich a particular defendant or enterprise.”
United States v. Arshad, 239 F.3d 276, 281 (2d Cir. 2001).
We have previously assessed a non-exhaustive list of
relevant factors, enumerated by the Second Circuit, when
determining if a payment or payments constitute multiple
bribes. United States v. Weaver, 175 F. App’x 506, 509-10 (3d

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Cir. 2006) (not precedential). Those factors are: (1) “whether
the payments were ‘made to influence a single action’ ”; (2)
“whether the pattern and amount of the payments bear the
hallmarks of installment payments, such as a regular schedule
of payments over a finite period of time toward a fixed final
sum, rather than a series of intermittent and varied bribes”; and
(3) “whether the method for making each payment remains the
same.” Id. (quoting Arshad, 239 F.3d at 280-82). No one factor
is dispositive. See Arshad, 239 F.3d at 282. We apply these
factors regularly when considering whether payments
constitute one or multiple bribes, United States v. Grosso, 658
F. App’x 43, 46 (3d Cir. 2016) (not precedential); United States
v. Marino, 316 F. App’x 99, 103 (3d Cir. 2008) (not
precedential), and we formally and precedentially join the
Second Circuit and adopt these Arshad factors now.
Here, the undisputed evidence demonstrates that Stocki
paid Peperno on four separate occasions in varying amounts.
Stocki and his employee also made multiple payments directly
to Semenza, in varying amounts, in response to a slew of
requests that Semenza made for varying reasons. While the
payment was always in cash, the amount varied, there was no
payment schedule, and payments were made in a variety of
ways. Peperno’s argument ignores the fact that even if the
payments were all made in furtherance of influencing the
zoning litigation, the payments were sought under various
pretexts for different political favors.2 Thus, under the Arshad
2 These varying goals included ensuring that Stocki did not
encounter further difficulties, interceding on Stocki’s behalf
with both the zoning officer and the Old Forge Borough
solicitor, postponing various meetings regarding the litigation,
and attempting to continue Stocki’s contempt hearing. In

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factors, the District Court did not err in finding that multiple
bribes were paid during the conspiracy and properly applied a
two-level enhancement under the Sentencing Guidelines.
B
Second, Peperno disputes the District Court’s
application of a four-level increase based on the value of the
bribes. The Sentencing Guidelines establish a tiered
enhancement based on “the value of the payment, the benefit
received or to be received in return for the payment, [or] the
value of anything obtained or to be obtained by a public official
or others acting with a public official . . . whichever is
greatest[.]” U.S.S.G. § 2C1.1(b)(2). The Guidelines provide a
table that identifies the number of levels by which a district
court should increase the defendant’s offense level, based on
that value. Id. §§ 2B1.1(b)(1), 2C1.1(b)(2).
Here, the District Court took a “conservative” approach
to calculating the total value of the bribes paid during the
conspiracy, finding it to be approximately $16,000. Appx
2108-09. This was comprised of $10,000 that Stocki and his
employee paid Semenza during the spring and summer of 2019
and $6,000 that Stocki paid Peperno in the fall of 2019. The
District Court also noted that Peperno had attempted to have
Stocki pay $20,000 and had suggested that Stocki could be
subject to $500,000 in contempt fines if the bribes were not
paid. Id.
Peperno insists that the $10,000 Stocki paid directly to
Semenza should not be “bootstrap[ped]” with the bribes paid
addition, the bribes were also intended to influence multiple
councilmembers and other individuals.

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directly to Peperno. Br. for Appellant 29. But the Guidelines
instruct that in calculating a defendant’s offense level in cases
involving jointly undertaken criminal activity—including
conspiracy—relevant conduct shall include all acts and
omissions of others that were “(i) within the scope of the jointly
undertaken criminal activity, (ii) in furtherance of that criminal
activity, and (iii) reasonably foreseeable in connection with
that criminal activity[.]” U.S.S.G. § 1B1.3(a)(1)(B). Thus, a
defendant may be held accountable for bribes and things of
value provided both to him and to his coconspirators where the
bribes to the coconspirators were reasonably foreseeable
during the course of the conspiracy. United States v. Whiteford,
676 F.3d 348, 364 (3d Cir. 2012). Peperno was convicted of
jointly undertaken criminal activity (i.e., conspiracy to commit
bribery and wire fraud), and the District Court did not clearly
err in finding that the $10,000 paid directly by Stocki to
Semenza was both part of the greater conspiracy and
reasonably foreseeable, given Peperno’s role in setting up the
relationship between Stocki and Semenza and later using the
$10,000 payment as a “bargaining chip,” even if Peperno did
not facilitate that particular transaction. Appx 2108-09. Thus,
the District Court correctly applied a four-level enhancement
for a bribe exceeding $15,000 but less than $40,000. U.S.S.G.
§ 2B1.1(b)(1)(C).
IV
In light of the above, we will affirm the District Court’s
judgment of sentence.

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