Prosecution's Summary of Case Against Don Hill, Etc

Case 3:07-cr-00289-M Document 989 Filed 09/20/2009 Page 1 of 30
IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
UNITED STATES OF AMERICA §

§
v. § No. 3:07-CR-289-M
§
DONALD W. HILL (01) § ECF
a/k/a “Don Hill” §
D’ANGELO LEE (02) §
SHEILA D. FARRINGTON (03) §
a/k/a “Sheila Hill” §
DARREN L. REAGAN (07) §
a/k/a “Dr. Darren L. Reagan” §
RICKEY E. ROBERTSON (10) §
a/k/a “Rick Robertson” §
Government’s Response to Defendants’ Motions for Judgment of Acquittal
For the reasons stated below, the Court should deny the defendants’ oral and
written motions for judgment of acquittal.1 The evidence supports each of the charges,
which are based on valid legal theories.
A district court must deny a motion for judgment of acquittal as long as “a rational
jury could have found the defendant guilty beyond a reasonable doubt.” United States v.
Barlow, 568 F.3d 215, 218 (5th Cir. 2009). This standard “does not require that the
1
Hill and Lee made oral motions for judgment of acquittal on all counts except those
relating to bribery (Counts 10-14). Farrington Hill filed written motions as to Counts 16 and 18
(see Docket #969, 970) and moved orally as to Count 19. Reagan and Robertson filed written
motions as to all of the charges against them. (See Docket #973; Reagan’s motion (not yet filed
on PACER)).
Response to M otions for Judgment of Acquittal – Page 1

evidence exclude every reasonable hypothesis of innocence or be wholly inconsistent
with every conclusion except that of guilt.” United States v. Loe, 262 F.3d 427, 432 (5th
Cir. 2001). Moreover, in making the determination, the court does not assess the
credibility of witnesses or weigh the evidence, since the jury “retains the sole authority to
weigh any conflicting evidence and to evaluate the credibility of the witnesses.” Id.
1. Count 10: Conspiracy to commit bribery
Count 10 charges Hill, Lee, Farrington Hill, and Robertson with conspiring to
commit bribery under 18 U.S.C. § 371. To establish a conspiracy, the government must
prove “(1) an agreement between two or more persons to [commit bribery]; (2) the
defendant’s knowledge of the unlawful objective and voluntary agreement to join the
conspiracy; and (3) an overt act by one or more of the members of the conspiracy in
furtherance of the objective of the conspiracy.” United States v. Floyd, 343 F.3d 363, 370
(5th Cir. 2003). To be guilty of bribery, a defendant must “corruptly solicit[] or demand[]
for the benefit of any person, or accept[] or agree[] to accept, anything of value from any
person, intending to be influenced or rewarded in connection with any business,
transaction, or series of transactions of such ... government[] or agency involving any
thing of value of $5,000 or more,” or “corruptly give[], offer[], or agree[] to give anything
of value to any person, with intent to influence or reward an agent of ... local ...
government, or any agency thereof, in connection with any business, transaction, or series
of transactions of such ... government[] or agency involving anything of value of $5,000

or more.” 18 U.S.C. § 666(a)(1)(B) & (2).
Robertson, the only defendant to have moved for judgment of acquittal on this
count, asserts that the evidence is insufficient to show he conspired to commit bribery.
Instead, he argues, he was simply a car salesman who sold a used BMW, at fair market
value, to Farrington Hill and who looked for a Lexus for Lee. The evidence, however,
shows more.
Brian Potashnik and Bill Fisher testified that Robertson, working with Lee,
attempted to obtain construction work with SWH and with ORH in the summer of 2004.
The jury heard evidence that one of the reasons Fisher initially contacted the FBI was that
Lee was attempting to have Fisher hire Robertson, an unqualified subcontractor.
Email traffic shows that Matt Martin from SWH sent its subcontractor
qualification and bid sheet to Robertson on September 21, 2004. Robertson forwarded
the paperwork to co-defendant Ron Slovacek. Slovacek was actively seeking the
concrete work on Arbor Woods, through Lee, during the same time frame.
In February 2005, Robertson purchased and sold the 1998 BMW that found its way
to Hill. He was paid with a $15,000 certified check purchased by Farrington &
Associates. The jury heard substantial evidence of Robertson’s involvement with Lee in
the extortion scheme against Fisher and that information is relevant to Robertson’s
knowledge of Lee given that Lee and/or Farrington & Associates began spending large
sums of money with him for the purchase of vehicles.

The vehicle purchases continued into March and April 2005 with the purchase of a
Lexus and a Mercedes for Lee. In each instance, Lee paid cash down on the vehicle.
Additionally, Robertson endorsed and deposited a check on Slovacek’s Millennium Land
Development account made payable to Farrington & Associates – the same entity to
which Robertson and Lee discussed registering Hill’s 1998 BMW.
Finally, in a series of intercepted conversations on April 26, 2005 between Hill,
Potashnik, Lee, Slovacek, and Spencer, Lee discussed with Slovacek the prospect of
using Robertson as the front for a framing contract on two SWH developments, Rosemont
at Scyene and Rosemont at Laureland. Two days later, Lee told Robertson he had a
framing contract for him.
This evidence supports the government’s theory that Robertson participated in the
bribery scheme.
2. Count 15: Conspiracy to commit extortion
Count 15 charges Hill, Lee, Reagan, and Robertson with violating the Hobbs Act
by conspiring to “obstruct[], delay[], or affect[] commerce or the movement of any article
or commodity in commerce, by ... extortion,” which is defined as “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.” 18 U.S.C. § 1951(a) & (b)(2).
“Extortion by wrongful use of fear includes fear of economic harm.” United States v.
Edwards, 303 F.3d 606, 635 (5th Cir. 2002).

A. Hill’s and Lee’s oral motions
Contrary to the defendants’ claims, there was ample evidence to support
convictions on this count. On or about November 4, 2004, Lee left a message for Fisher
seeking a $2,500 contribution/sponsorship for Hill’s birthday party. In the same recorded
message, Lee told Fisher that his deal (a zoning vote on Dallas West Village pending
before the City Plan Commission) would be held-over two weeks. The vote was
postponed again on November 8, 2004, and December 2, 2004, and was finally approved
on December 16, 2004. Prior to its approval, Fisher apologized for not contributing to the
birthday party and told Lee that he was ready to do what was required of him to get his
deals across the finish line. Fisher also met with Robertson and Rashad and agreed to use
RA-MILL if Robertson and Rashad could prove they had the necessary qualifications to
do the work. Fisher also paid money to Reagan on December 16, 2004, and Reagan
spoke in favor of Dallas West Village at the CPC meeting on that date.
Fisher later met Lee at a Starbucks and Hill was nearby having lunch. Lee patted
down Fisher and then took Fisher to meet Hill. Hill told Fisher he was in favor of the
Dallas West Village development and that Fisher would get his zoning vote.
Untrue to his word, Hill postponed the zoning vote on Dallas West Village
numerous times even though Fisher continued to make payments to BSEAT and meet
with contractors that Lee and Reagan wanted to use as fronts. Hill did not approve the
zoning change until Fisher signed a contract requiring him to pay $250,000 and use

KDAT as a subcontractor and also allow KDAT to control leasing of the commercial
portion of the development.
Numerous recorded phone calls, meetings, and documentary evidence establish
that Hill, Lee, and others engaged in a conspiracy to extort Fisher.
B. Robertson’s written motion
Robertson separately contends, first, that he had “no political influence so he had
no ability to instill any fear in Developer Fisher that he could do [Fisher] any economic
harm.” (Motion/5.) Yet Robertson told Fisher in a consensually recorded videotaped
meeting that his silent partner was CPC Lee and in other recordings told Fisher that his
deal was not going to get approved. Robertson also lied to Fisher about the RA-MILL
construction manager. He likewise participated with Lee, Reagan, and Rashad in
preparing the $180,000 invoice at the Superbowl party.
Fisher’s initial representation to Lee that he would use RA-MILL as long as they
were qualified was instrumental to the December 18, 2004 passage at the CPC of his
zoning issue on Dallas West Village. Fisher’s failure to hire Lee and Reagan’s
unqualified subcontractors – including RA-MILL – caused, at least in part, his zoning
case to be postponed over and over again. The electronic evidence in this case shows that
Robertson was aware of this. Recorded conversations demonstrate his knowledge of
when the matter was coming before the City Council and his knowledge that the matter
was going to be postponed again.

There was also ample evidence by which the jury could conclude that Robertson,
Rashad, and RA-MILL were completely unqualified to do any of the work they were
seeking. Altogether, this evidence demonstrates a conspiracy to extort Fisher.
Robertson also asserts that “because all of the money Fisher allegedly paid was
provided by government agents, the Government has failed to prove that the allegedly
extortionate transactions had any impact on interstate commerce.” (Motion/6.) However,
all of the defendants stipulated to the interstate commerce elements on all of the charged
offenses; thus, Robertson waived this argument.
C. Reagan’s written motion
Reagan argues that there is no evidence a public official obtained payment to
which he was not entitled or that any public official was involved in the extortionate
scheme. Reagan ignores the evidence that shows that, with the help of Hill, he extorted
$22,500 from Fisher on February 22, 2005, and then placed $10,000 of that money “in the
Councilman’s hand.” Of those funds, it is uncontroverted that Lee received $2,500.
Reagan also claims that the evidence shows he was engaged merely in “hard-
bargaining,” not extortion – that he offered legitimate services in exchange for
compensation. However, both Fisher and Kathy Nealy testified that Fisher’s Pecan Grove
project and Memorial Park Town homes development had the full support of Councilman
Hill. Not until relatively late in the process did Fisher begin to see his developments “go
down in flames.”

This culminated in Fisher losing all of his projects that were voted on during the
October 27, 2004 DCC meeting. Fisher’s remaining project, Homes of Pecan Grove, was
postponed until November 10, 2004, and was directly competing against another SWH
development (Simpson Villas).
Reagan called Fisher on November 10, 2004, and told him that his development
did not have the necessary support to pass but that if Fisher agreed to pay $100,000,
Reagan could get it done. Fisher signed a contract in the City Hall parking lot with
Reagan on the Homes of Pecan Grove development. Reagan then entered City Hall and
Fisher’s project was approved that day.
Contrary to his claim, Reagan offered no legitimate services to Fisher. Fisher paid
some invoices for phone bill usage and vehicle allowances. However, as both Fisher and
Allen McGill testified, neither Reagan nor anyone else from BSEAT did any real work.
What Reagan offered were increasingly exorbitant extortionate demands on Fisher,
demands that could not be met. Requiring Fisher to hire unqualified subcontractors at
above-market rates so kickbacks could be paid to Reagan was not “hard bargaining in an
effort to provide legitimate services.” See United States v. Vigil, 523 F.3d 1258, 1265
(10th Cir. 2008) (reasoning that a defendant’s demand that someone hire a “specific and
unwanted individual” for a price set by the defendant is not a “legitimate objective or
genuine contract term”).

Of course, this is not all Reagan demanded: He also demanded an increased
ownership in the project and an increased percentage of income (over that which Fisher
agreed to pay on November 10, 2004, when the company he worked for was on the brink
of financial ruin). The jury could easily conclude that Reagan’s actions were nothing sort
of extortionate.
Finally, Reagan asserts that Fisher did not have a fear of economic loss because
the FBI provided some of the money Fisher used to pay off the defendants. (Motion/7.)
Reagan appears to believe that the economic loss at issue is Fisher’s payments to Reagan.
To the contrary, the relevant economic loss is Fisher’s financial ruin 2 if Hill continued to
postpone or vote down his projects. See 18 U.S.C. § 1951(b)(2) (“The term ‘extortion’
means the obtaining of property from another, with his consent, induced by wrongful use
of actual or threatened ... fear [of economic loss], or under color of official right.”).
In sum, Reagan has proffered nothing to support a judgment of acquittal here.
3. Counts 16-17: Extortion
Hill, Lee, Farrington Hill, and Reagan are also charged with substantive counts of
extortion. Based on the facts outlined in Section 2, the Court should deny Hill’s oral
motion as to Counts 16 and 17 and Lee’s oral motion as to Count 16. The remaining
motions, by Farrington Hill and Reagan, are addressed below.
2
For instance, Fisher had expended large sums of money pre-development on the Dallas
West Village project. He needed to get the zoning changed so he could come back in the future
and build a tax credit project on the site.

A. Farrington Hill’s written motion
With regard to Count 16, Farrington Hill argues that her connection to the $22,500
at issue was too attenuated to support an aiding and abetting theory on that count. She
claims that “[t]he only facts ... that even involve Mrs. Hill are that she received $5,000
from Darren Reagan, and that a BSEAT invoice was found at her apartment.”
(Motion/1.) It is the government’s theory, and a rational jury could certainly find based
upon the evidence, that the Farrington & Associates bank account was used virtually
exclusively in a criminal venture wherein public officials sought or demanded things of
value for themselves and their associates in connection with official actions as related to
tax credit affordable housing developments in the City of Dallas.
Indeed, the account was established on October 22, 2004, with a check from one of
the developers. By May of 2005, checks from seven different business entities
(Southwest Housing Development Corporation, TX Laureland LP, TX Scyene LP, Bright
III, Dallas Urban League, Millennium Land Development, and The LKC Dallas) had
been deposited into the account, with most of the proceeds withdrawn in cash.
Additionally, and specifically pertinent to this argument, Farrington Hill deposited at least
$5,000 in extortion proceeds into this account on February 22, 2005. And, as specifically
directed by Hill when he gave Farrington Hill the $5,000, she gave $2,500 to Lee.
Farrington Hill was the only person who could withdraw the bribes, kickbacks, and
extortion proceeds from the Farrington & Associates account. Clearly, she knowingly

participated in the criminal venture charged in Count 16 and sought by her own action to
make it successful.
B. Reagan’s written motion
Reagan argues that the evidence is insufficient as to Count 17 because it fails to
establish any “connection with or knowledge of KDAT, Kevin Dean, or John Lewis,” and
“Lewis testified that [he] was not a participant in this scheme.” Reagan’s argument
ignores the facts of the case. First, he ceased interaction with Fisher around March 10,
2005. The extortionate scheme did not end and new players approached Fisher about
getting his deal approved.
However, in that process, the new players, specifically Kevin Dean, were
instructed to make sure Reagan had no unresolved issues with Fisher. Reagan, in an
intercepted phone call, admitted to Dean (and also to Lewis, who was listening) that
Fisher had no contractual obligations with BSEAT. This was because Fisher had refused
to comply with the ever-increasing BSEAT extortionate demands.
Nonetheless, Reagan left a message for Hill telling him not to approve Fisher’s
deal. Ultimately, Hill approved it, but only after it had been continued again at Reagan’s
request, after $50,000 was paid and another contract was signed, and after Reagan and
Lewis had a conversation from Hill’s office on May 11, 2005. The evidence clearly
shows that Reagan was a participant in the $50,000 extortionate payment.

4. Count 18: Honest services fraud
Hill, Lee, and Farrington Hill are charged with conspiring to commit honest
services wire fraud. “Wire fraud is (1) the formation of a scheme or artifice to defraud,
and (2) use of the wires in furtherance of the scheme.” United States v. Brown,
459 F.3d 509, 518-19 (5th Cir. 2006). “Violation of the wire-fraud statute requires the
specific intent to defraud, i.e., a ‘conscious knowing intent to defraud[’] ....
Honest-services wire fraud is wire fraud in which the scheme or artifice to defraud
deprive[s] another of the intangible right of honest services.” Id.
In her written motion, Farrington Hill3 asserts that the government’s honest-
services fraud theory is invalid because the government has not shown that Hill or Lee
took any official action for personal gain or that Farrington Hill participated in any
conspiracy to do so. She also claims that an honest-services fraud conviction must rest on
the violation of a state, rather than a local, law, and that it must also be a penal law.
Farrington Hill’s arguments are wrong both factually and legally.
A. The government’s honest-services fraud theories.
The government has proven that Hill, Lee, and Farrington Hill conspired to
commit honest-services fraud by having Hill and Lee take official actions to benefit The
LKC and related entities, including Kiest Blvd. In taking these actions, Hill’s intent was
3
Although only Farrington Hill filed a written motion on this point, her arguments also
apply to Hill and Lee. Therefore, the government’s response to her arguments defeats Hill’s and
Lee’s oral motions on this charge.

not to further the public good but to enrich himself through kickbacks. Similarly, Lee’s
actions were motivated by the fact that he was a hidden owner in The LKC and Kiest
Blvd.
i. Hill and Lee took official actions to advance their own interests.
Farrington Hill ignores the evidence in claiming that neither Hill nor Lee took any
official acts in furtherance of the conspiracy. The following are examples of acts Hill
took that are clearly within the scope of his official responsibilities:
• On December 8, 2004, Hill moved the City Council to authorize an amendment to

the City’s review criteria for multi-family project applications that made
construction or substantial rehabilitation of “a mixed use development that
includes a minimum 10,000 square feet of retail space” a higher priority than “new
construction of housing for low and moderate income households.” The
government’s theory is that this was intended to skew the criteria in favor of
developments like The LKC.
• On February 23, 2005, Hill voted to approve the consent agenda that (1) approved
a resolution authorizing the City to disburse $883,250 in 2003 General Obligation
Bond Funds to Kiest Blvd. for Cedar Crest Square and that (2) approved a
resolution authorizing the City to make a Residential Development Acquisition
Loan Program loan of $150,000 to Kiest Blvd. Kiest Blvd. was another of
Slovacek and Spencer’s entities in which Lee was a silent partner.
• On March 14, 2005, Hill sent an email instructing a city employee to prepare a
memorandum to the mayor requesting that a resolution to approve and/or set for
public hearing the creation of the Lancaster Kiest Corridor TIF be placed on the
City Council’s April 13, 2005 agenda. Hill then signed the memorandum as
Council member for District 5.
• On April 5, 2005, Hill pledged to Lee that he would give $1 million of his
discretionary bond money to The LKC.

• On May 21, 2005, Hill, in his official capacity as mayor pro tem, met with U.S.
Representative Johnson to request federal funding for The LKC’s development of
the Dallas Lancaster Station project.
The evidence showed that Hill took these actions, among others, in return for
kickbacks from The LKC that were funneled through Farrington Hill. Although
Farrington Hill claims that Hill did not expect any money in return for his actions, the jury
could infer from the evidence that Hill, through the Farrington & Associates bank
account, had already received kickbacks from Spencer and Slovacek under the Arbor
Woods subcontract. Against this background, Hill took an active role in attempting to
make The LKC a reality, telling Lee at one point, “Bring me in[,] whatever you need me
to do, wherever I need to go ....”
In return for his support, Hill instructed Farrington to “have the conversation with”
Lee. The day after Farrington Hill “ha[d] that conversation with him,” Lee instructed
Slovacek to write a $5,000 check to Farrington & Associates, stating: “We need to take
care of, of Don via Sheila.” The same day, Hill told Farrington Hill how to contact
Slovacek and Spencer so that Farrington Hill could “get it in the bank today.” Hill then
asked her to withdraw $1,000 of that money for him. Farrington Hill promised to meet
with Slovacek and Spencer and “take it straight to the bank.”
On May 26, 2005, Spencer did indeed give Farrington Hill a $5,000 check from
The LKC account,4 and followed that up with a check for $9,500. A few days later, Lee
4
At the same time, Farrington Hill received a $500 check from Spencer on her LCG
account – the same entity that executed the Arbor Woods subcontract that resulted in the 10%

asked Hill whether Hill had received “that package” and Hill responded, “I think they
ended up getting about 15 total ... I think the second day they did 95, or something.”
This evidence, coupled with Hill’s official acts on behalf of The LKC and Kiest
Blvd., is more than sufficient to show that he violated state and local law, including Texas
Penal Code § 26.02(a)(1), which prohibited him from “intentionally or knowingly ...
accept[ing], or agree[ing] to accept from another ... any benefit as consideration for the
recipient’s decision, opinion, recommendation, vote, or other exercise of discretion as a
public servant.”
Similarly, as Plan Commissioner, Lee took the official act of writing a letter of
recommendation for Herb Frison of Frison Development LLC for Frison’s proposed
development, Dilworth Estates. Lee wrote the letter in his capacity as Plan
Commissioner, on Donald Hill’s City letterhead, at the request of Maurice Williams, who
needed a document for a lender that showed official City support for the development.
Lee required in return that Frison obtain a proposal from Spencer for The LKC to provide
“development and construction services” for a fee of $55,000. Lee even had Spencer
draft the actual support letter for Frison, which Lee signed. Spencer’s services, as listed
in her consulting proposal, included acting as a “liaison to local and state agencies” and
“facilitat[ing] all necessary City Council, Planning and Zoning and related meetings.”
kickbacks to Farrington & Associates.

As with Hill, Lee’s official action violated, among other things, Texas Penal Code
§ 26.02(a)(1), which prohibits someone from “intentionally or knowingly … solicit[ing]
… any benefit as consideration for the recipient’s … recommendation … or other
exercise of discretion as a public servant.”
. ii. Farrington Hill actively participated in the conspiracy.
Contrary to her claim, the evidence shows that Farrington Hill participated in the
conspiracy by associating herself with The LKC to further the conspiracy and to facilitate
payments to herself and Hill. On March 17, 2005, Hill told Farrington Hill that she was a
business partner in The LKC and that she needed to go to a meeting because she
represented The LKC. On April 8, 2005, Hill told Lee that the LKC in its “broadest
form” included Farrington Hill. This evidence, along with the above evidence that
Farrington Hill had “the conversation” with Lee and soon after received $15,000 from
The LKC, support her participation in the conspiracy.
B. The honest-services fraud conviction can rest on local as well as state

law.
Farrington Hill’s motion also urges the Court to reconsider its decision to allow the
government to pursue allegations relating to the defendants’ violation of local laws. The
Court should refuse the invitation.
The government alleges that both state law, such as Texas Penal Code § 36.02
(regarding bribery), and local law, such as City Charter Chapter III, § 10 (regarding
conflicts of interest) and City Code of Ethics Chapter II, § 12A-3 (regarding conflicts of

interest),5 imposed duties upon Hill and Lee that they conspired to violate. Relying on
United States v. Brumley, 116 F.3d 728 (5th Cir. 1997) (en banc), Farrington Hill asserts,
however, that the government cannot rely on the City Charter or the City Code of Ethics
because governing authority allows only a “state law” passed by a “state legislature” to
serve as the basis for an honest services conviction.
This argument errs in several respects. First, it ignores that, in Texas, local laws
have the force of state law. See Seay v. Hunt, 55 Tex. 545, 1881 WL 9811, at *5 (Tex.
1881) (“The council, or governing body of a municipal corporation, is ... the legislature of
the corporation, with its charter as a constitution. A city council is a miniature general
assembly, and their ordinances have the force of laws passed by the legislature of the
state.”); Perry v. Greanias, 95 S.W.3d 683, 693-94 (Tex. App.-Houston [1st Dist.] 2002)
(“A home-rule city’s charter is ... the fundamental law of the municipality just as a
constitution is the fundamental law of a state.”).
Second, it misreads Brumley. Brumley addressed whether the government’s proof
that an employee of a state agency, the Texas Industrial Accident Board, violated a state
law that applied to state employees like him was sufficient to uphold his honest services
conviction. As the court explained: “Under the most natural reading of the statute, a
federal prosecutor must prove that conduct of a state official breached a duty respecting
5
The Code of Ethics was enacted by ordinance number 24316 and amended by ordinance
number 24720. See http://www.amlegal.com/nxt/gateway.dll/Texas/dallas/
volumei/chapter12acodeofethics?f=templates$fn=altmain-nf.htm$3.0#JD_12A-3.

the provision of services owed to the official’s employer under state law.” Brumley, 116
F.3d at 734 (emphasis added). Had Brumley been a local official, as is the case here,
there is no reason to doubt the Brumley court would have substituted the word “local” for
“state” in the above sentence. Indeed, the opinion suggests that the court used the words
“state law” not to the exclusion of local law, but as a contrast to federal law –
specifically, the federal common law that had grown to define the duties a defendant
could violate to commit honest services fraud. Id. at 734 (“We find nothing to suggest
that Congress was attempting in § 1346 to garner to the federal government the right to
impose upon states a federal vision of appropriate services – to establish, in other words,
an ethical regime for state employees.”) (emphasis added). Thus, Farrington Hill errs in
interpreting Brumley’s use of the term “state law” as excluding local law.
Third, although the Fifth Circuit has not spoken on the specific issue of whether an
honest-services fraud conviction can be predicated on a violation of local law, the Third
Circuit – which, like the Fifth, applies the state-law limiting principle – has indicated in
two cases that it can. First, in United States v. Gordon, 183 Fed. App. 202 (3d Cir. 2006),
the prosecution, to support an honest-services fraud count, alleged the violation of state
and local law. Id. at 211-12. The court held that the government had pleaded the charge
sufficiently, reasoning: “The indictment sets forth the schemes in which the defendants
allegedly participated .... and the defendants’ official duties and responsibilities under
state and local law.” Id. at 214 (emphasis added).

Additionally, in United States v. Antico, 275 F.3d 245, 262 (3d Cir. 2001), the
court explained that “[h]onest services fraud typically occurs in two scenarios: (1)
bribery, where a legislator was paid for a particular decision or action; or (2) failure to
disclose a conflict of interest resulting in personal gain. This duty to disclose a conflict of
interest .... is oftentimes prescribed by state and local ethics laws.” Id. (emphasis added).
It then affirmed the defendant’s honest-services fraud conviction on the basis that he
violated duties imposed by a Pennsylvania state ethics statute and by a Philadelphia ethics
ordinance regarding conflicts of interest that is similar to the Dallas Charter and Code
provisions. Id. These cases suggest that the umbrella of “state law” encompasses local
law.
Because the Fifth Circuit has not held otherwise and case law from the Third
Circuit supports the government’s theory of prosecution, this Court should not grant a
motion for judgment of acquittal on this basis.
C. The conviction need not be based on a state or local criminal law.
Farrington Hill concedes that the Fifth Circuit has left open the question whether
the state or local law must be criminal to support an honest-services fraud conviction.
She argues, however, that this Court should conclude that violation of a state criminal law
is required based on principles of federalism, adequate notice, and the rule of lenity.
However, all of these concerns are sufficiently addressed by the limits Brumley already
placed on the honest-services statute, which require that a conviction be grounded in a

violation of state (or local) law. See United States v. Weyhrauch, 548 F.3d 1237, 1244-45
(9th Cir. 2008) (“The Fifth Circuit’s state law limiting principle ... addresses all of these
concerns. It limits how much control federal prosecutors have over state public affairs by
restricting federal criminal liability to conduct prohibited by the states themselves and sets
a clear outer limit to the reach of the federal statute by tying liability to violations of
specific state statutes, thereby allaying concerns over fair notice.”).
Moreover, as other courts have noted, the Fifth Circuit’s approach to honest-
services fraud is already the strictest of all the circuits’. See id. at 1243-45. If this Court
added another layer to that approach – one that requires violation of a state (or local)
criminal law – it would do what no circuit court in the country has done. Indeed, the
Third Circuit, which is the closest to the Fifth in terms of its strictures on honest services
fraud, see Weyhrauch, 548 F.3d at 1244-45, has explicitly held that violation of a state
criminal law is not necessary. Cf. United States v. Gordon, 183 Fed. App. 202, 211 (3d
Cir. 2006) (“[A]lthough a violation of a state criminal law may be sufficient to lay the
foundation for honest services fraud, it is clear from our analysis of the requisite fiduciary
duty that honest services fraud does not require a violation of criminal law ....”).
Finally, Farrington Hill’s suggestion that it would be unfair to impose federal
criminal liability on the basis that the defendants violated a noncriminal state or local law
oversimplifies the crime of honest-services fraud. Indeed, to convict under the statute,
the jury must not only find a violation of the state or local law at issue, but also the other

elements of fraud, including an intent to defraud another of the right to the honest and
faithful services of the public official. Here, the government’s theory is not simply that
Hill or Lee violated a local conflict-of-interest law and therefore is guilty of a federal
criminal offense; instead, it is that Hill and Lee did not disclose their conflicts of interest
– which they were required to do under local law - and engaged in self-dealing,
defrauding the City and their constituents of the right of their honest services. Thus, as
required by Brumley, the government’s honest-services fraud theory is tied to a violation
of state or local law, but it is not simply the federal criminalization of a state or local law
violation.
D. The conviction can rest on violations of ethics laws.
Farrington Hill last asserts, erroneously, that Brumley held that an honest-services
fraud conviction can never be tied to violation of an “ethics” law. She relies upon
statements in Brumley such as: “Although the district court found clear evidence of
ethical violations, it did not rely on them to make its decision. Instead, the district court
found a scheme to defraud that included conduct that violated Texas penal law.”
Brumley, 116 F.3d at 735-36. In interpreting this phrase, however, it is important to note
that the “ethical violations” to which the court was referring were not ethics laws – they
were violations of the Industrial Accident Board and Texas Worker’s Compensation
Committee regulations. (See Brumley Indictment at 20 (“Brumley violated IAB and
TWCC regulations and State law regarding benefits provided by attorneys to Brumley”).)

In light of this fact, Brumley should be read only as suggesting that violations of
uncodified ethics rules such as the IAB and TWCC regulations – as opposed to violations
of actual laws – would likely not support an honest-services fraud conviction.
Farrington Hill also points to Brumley’s statement that
a violation of state law that prohibits only appearances of corruption will not
alone support a violation of [the honest-services statute.] See United States v.
Sawyer, 85 F.3d 713, 728-29 (1st Cir.1996).... Thus, the mere violation of a
gratuity statute, even one closer to bribery than the Texas statute, will not
suffice. Sawyer, 85 F.3d at 729-30.
Brumley, 116 F.3d at 734.
Farrington Hill reads this passage far too broadly in asserting that it forecloses an
honest-services fraud theory based on an ethics law intended to prevent appearances of
corruption, such as the conflict-of-interest laws at issue here. In fact, a review of United
States v. Sawyer, 85 F.3d 713 (1st Cir. 1996), upon which this passage relies, shows that
such ethics laws can serve as the basis of an honest-services fraud conviction, as long as
the jury is instructed properly on the requisite intent:
To establish the scheme to defraud through [violation of an ethics law

like one prohibiting gifts to legislators by lobbiests], it must also have been
charged and shown that the intent behind the violations was the deprivation of
honest services. Thus, this case required a separate instruction that, to prove
the intent to commit honest services fraud, the jury had to find that[, in paying
the illegal gratuities,] Sawyer intended to influence or otherwise improperly
affect the official’s performance of duties, not merely that he intended to
violate the state statute.
Id. at 729. The conviction in Sawyer was reversed because the district court had
instructed the jury that it was to find the defendant guilty of honest services fraud if it

found that he violated the state illegal gratuities statute – it did not require the jury also to
find that the defendant possessed any corrupt intent in violating the law. Id.; cf. Brumley,
116 F.3d at 734 (“[A] violation of state law that prohibits only appearances of corruption
will not alone support a violation of [the honest-services statute].”) (emphasis added).
Here, in contrast, a breach of ethics laws is but one finding the jury must make to
convict the defendants. It must also find that, in conspiring for the public official to
violate the ethics law at issue, the defendants had an “intent to defraud,” defined in the
Court’s instructions as “an intent to deceive or cheat someone” of the services “that
would be rendered by a totally faithful employee.” In other words, these instructions –
unlike those at issue in Sawyer – prevent the jury from convicting the defendant based on
a mere “appearance of corruption.” Thus, the instructions and the government’s theory
satisfy Brumley and Sawyer.
Indeed, interpreting Brumley as proscribing the government’s reliance on codified
ethics laws such as those prohibiting conflicts of interest would run afoul of a more recent
Fifth Circuit case, United States v. Brown, 459 F.3d 509, 521 (5th Cir. 2006), which
recognized that self-dealing cases are, along with bribery, the paradigmatic honest-service
fraud crimes. Id. (reasoning, “Turning to the case law, ... cases upholding [honest
services fraud] convictions ... can be generally categorized in terms of either bribery and
kickbacks or self-dealing,” and listing self-dealing/conflict-of-interest cases going back to
1949) (emphasis added). Preventing reliance on state or local laws prohibiting conflicts

of interest would virtually eliminate the possibility of obtaining public-official
convictions for self-dealing.
Moreover, the Third Circuit, which is the closest to the Fifth in terms of its
approach to honest-services fraud, has expressly recognized that
[h]onest services fraud typically occurs in two scenarios: (1) bribery, where a
legislator was paid for a particular decision or action; or (2) failure to disclose
a conflict of interest resulting in personal gain. This duty to disclose a conflict
of interest arises in the private sector from the fiduciary relationship between
an employer and an employee. In the public sector, the duty is oftentimes
prescribed by state and local ethics laws.
United States v. Antico, 275 F.3d 245, 261 (3d Cir. 2001); see also United States v.
Woodward, 149 F.3d 46, 62 (1st Cir. 1998) (“[N]ondisclosure of a conflict of interest is a
second way in which a public official can steal his honest services.”).
In Antico, the Third Circuit endorsed a similar conflict-of-interest theory to the one
under which the government is proceeding here and affirmed the defendant’s convictions
for violating state and local ethics laws prohibiting conflicts of interest. Antico, 275 F.3d
at 253-54, 260-65. Antico was an employee of the City of Philadelphia zoning and permit
department. In lieu of paying child support to his girlfriend, he offered to refer clients to
her so that she could earn money as an “expediter” – an independent contractor who, in
exchange for a fee, represented individuals and businesses before Antico’s department.
Antico then prepared and approved her permits. Through this position, the woman earned
$700,000. Id.

In concluding that the jury properly found Antico guilty of honest services fraud,
the Third Circuit reasoned:
Antico’s employment with [the City] required him to refrain from using
his position to secure advantages for himself or his family members. The
Philadelphia Code provides that city employees must disclose publicly a
conflict of interest and recuse themselves from taking any official action in a
matter where they have a financial interest. In addition, state ethics laws
prohibited him from using his employment for private pecuniary gain.
....
We agree with the Government that Antico’s duty to disclose material

information with respect to his conflict of interest with [his girlfriend] arose
from state and local law.... Antico owed the City a duty to disclose this
financial arrangement, the failure of which constitutes honest services fraud.
Antico correctly notes that the broad scope of the mail fraud statute ...
does not encompass every instance of official misconduct that results in the
official’s personal gain.... Antico’s exercise of his discretionary authority in
both filling out and approving the applications submitted by [his girlfriend]
without disclosing his interest in the scheme goes ... into the realm of
interested decision-making. When coupled with the duty imposed by state and
local conflict of interest laws, Antico’s failures to disclose his financial
business arrangement with [the girlfriend] and to recuse himself from taking
action with respect to her applications fall within the scope of honest services
fraud.
Id. at 253, 263-64.
As in Antico, the government here is proper in tying its theory to Hill’s and Lee’s
violations of local laws prohibiting conflicts of interest. Their self-dealing, which
violated those laws, deprived the City and its citizens of their right to honest services.
Farrington Hill’s motion for judgment of acquittal on this count should be denied.

5. Count 19: Conspiracy to commit money laundering
Hill, Lee, Farrington Hill, and Robertson are charged with conspiring to commit
money laundering under 18 U.S.C. § 1956(a)(1)(A)(i) and (B)(i)-(ii), which prohibit a
defendant who “know[s] that the property involved in a financial transaction represents
the proceeds of some form of unlawful activity” from “conduct[ing] or attempt[ing] to
conduct such a financial transaction ... with the intent to promote the carrying on of
specified unlawful activity,” or from conducting or attempting to conduct the financial
transaction “knowing that the transaction is designed in whole or in part ... to conceal or
disguise the nature, the location, the source, the ownership, or the control of the proceeds
of specified unlawful activity; or ... to avoid a transaction reporting requirement under
State or Federal law.”
As the evidence has shown, the defendants conspired to launder money in several
ways. For instance, the defendants attempted to conceal the receipt of proceeds by
requiring Potashnik to make payments through Farrington & Associates. Additionally,
the defendants withdrew funds in cash from the Farrington & Associates account to use
for the benefit of Hill and Lee. $15,000 from the account was also used to purchase a
1998 BMW and plans were made to not register the vehicle in Hill’s name even though
he used it.
Moreover, the defendants laundered the 10% kickbacks on the Arbor Woods
concrete contract. SWH contracted with LCG/RON-SLO to do concrete work at an

inflated price, and the construction draws were deposited into the RON-SLO account.
Slovacek opened a new bank account called Millennium Land Development (MLD) and
then paid 10% of the construction draws out of the MLD account either directly to the
Farrington & Associates account or through The LKC Dallas and then into the Farrington
& Associates account.
Finally, the defendants laundered funds by inserting, at Hill’s direction,
Community Housing Development Corporations (CHDOs) into the ownership of the
properties. Payments went from SWH to the CHDOs (Bright III and Urban League) and
then to Farrington & Associates.
Additionally, on at least one occasion, Hill instructed Farrington Hill not to
withdraw $10,000 or more from the Farrington & Associates account because it would
trigger a currency transaction reporting requirement. Hill told Farrington that there was
no need to bring her up on the radar like that.
This evidence defeats the defendants’ factual insufficiency claims. Farrington Hill
and the other defendants also moved for a judgment of acquittal based on the legal
arguments made her Motion to Dismiss Count Nineteen. (Docket #875.) For the reasons
stated in the Government’s Response to that motion (Docket #987), the Court should
deny the defendants’ motion for judgment of acquittal on that count.

6. Count 20: Conspiracy to commit money laundering
A. Hill’s and Reagan’s oral motions
The evidence was also sufficient on this count. Essentially, proceeds from the
extortion were laundered through one or more BSEAT accounts and efforts to
“legitimize” the extortionate payments were made through contracts and invoices. The
thrust of the money laundering evidence presented to the jury are payments of $22,500 on
February 22, 2005 (discussed above on page 7), and a payment on March 7, 2005, for
$40,000. On each occasion, the checks were deposited into a BSEAT bank account at
Wells Fargo. On February 22, 2005, Reagan withdrew $12,000 and then paid at least
$10,000 of it to Hill. On March 7, 2005, Reagan withdrew over $18,000 in cash and then
met with Lee and gave him $7,000.
Hill attempted to legitimize his receipt of the $10,000 by calling it partly a
campaign contribution from several individuals, including four co-defendants, and by
calling it partly payment for services rendered, or to be rendered, by Farrington &
Associates. Based on this evidence, the Court should deny the motions on this count.
B. Reagan’s written motion
Reagan also argues that he is entitled to a judgment of acquittal on this count
because the government failed to prove he is guilty of the predicate counts, 16 and 17.
For the reasons stated in Section 3, the Court should reject Reagan’s argument.

Conclusion
The government respectfully requests that the Court deny the motion.
Respectfully submitted,
JAMES T. JACKS
UNITED STATES ATTORNEY
/s/ Chad Meacham

CHAD MEACHAM
Assistant United States Attorney
Texas State Bar No. 00784584
1100 Commerce Street, Third Floor
Dallas, Texas 75242
Telephone: 214.659.8600
Facsimile: 214.767.4104
/s/ Leigha Simonton

LEIGHA SIMONTON
Texas State Bar No. 24033193
1100 Commerce Street, Third Floor
Dallas, Texas 75242
Telephone: 214.659.8600
Facsimile: 214.659.8800

CERTIFICATE OF SERVICE
I hereby certify that on September 20, 2009, I electronically filed the foregoing
document with the clerk of the court for the U.S. District Court, Northern District of
Texas, using the electronic case filing system of the court. The electronic case filing
system sent a “Notice of Electronic Filing” to all attorneys of record who have consented
in writing to accept this Notice as service of this document by electronic means.
I hereby certify that I have served the foregoing document by mailing a copy to the
following individuals: N/A.
/s/ Leigha Simonton

LEIGHA SIMONTON

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Case 3:07-cr-00289-M Document 989 Filed 09/20/2009 Page 1 of 30

IN THE UNITED STATES DISTRICT COURT

UNITED STATES OF AMERICA §

Government’s Response to Defendants’ Motions for Judgment of Acquittal

which are based on valid legal theories.

Response to M otions for Judgment of Acquittal – Page 1

evidence exclude every reasonable hypothesis of innocence or be wholly inconsistent

1. Count 10: Conspiracy to commit bribery

person, intending to be influenced or rewarded in connection with any business,

transaction, or series of transactions of such ... government[] or agency involving any

of transactions of such ... government[] or agency involving anything of value of $5,000

Response to M otions for Judgment of Acquittal – Page 2

or more.” 18 U.S.C. § 666(a)(1)(B) & (2).

Lee was attempting to have Fisher hire Robertson, an unqualified subcontractor.

sums of money with him for the purchase of vehicles.

Response to M otions for Judgment of Acquittal – Page 3

Additionally, Robertson endorsed and deposited a check on Slovacek’s Millennium Land

which Robertson and Lee discussed registering Hill’s 1998 BMW.

Finally, in a series of intercepted conversations on April 26, 2005 between Hill,

framing contract for him.

2. Count 15: Conspiracy to commit extortion

by conspiring to “obstruct[], delay[], or affect[] commerce or the movement of any article

or commodity in commerce, by ... extortion,” which is defined as “the obtaining of

Edwards, 303 F.3d 606, 635 (5th Cir. 2002).

Response to M otions for Judgment of Acquittal – Page 4

A. Hill’s and Lee’s oral motions

Contrary to the defendants’ claims, there was ample evidence to support

Response to M otions for Judgment of Acquittal – Page 5

portion of the development.

Numerous recorded phone calls, meetings, and documentary evidence establish

that Hill, Lee, and others engaged in a conspiracy to extort Fisher.

B. Robertson’s written motion

harm.” (Motion/5.) Yet Robertson told Fisher in a consensually recorded videotaped

construction manager. He likewise participated with Lee, Reagan, and Rashad in

preparing the $180,000 invoice at the Superbowl party.

unqualified subcontractors – including RA-MILL – caused, at least in part, his zoning

Robertson was aware of this. Recorded conversations demonstrate his knowledge of

was going to be postponed again.

Response to M otions for Judgment of Acquittal – Page 6

seeking. Altogether, this evidence demonstrates a conspiracy to extort Fisher.

extortionate transactions had any impact on interstate commerce.” (Motion/6.) However,

offenses; thus, Robertson waived this argument.

C. Reagan’s written motion

Reagan argues that there is no evidence a public official obtained payment to

Councilman’s hand.” Of those funds, it is uncontroverted that Lee received $2,500.

bargaining,” not extortion – that he offered legitimate services in exchange for

Response to M otions for Judgment of Acquittal – Page 7

development (Simpson Villas).

Fisher’s project was approved that day.

What Reagan offered were increasingly exorbitant extortionate demands on Fisher,

genuine contract term”).

Response to M otions for Judgment of Acquittal – Page 8

Of course, this is not all Reagan demanded: He also demanded an increased

In sum, Reagan has proffered nothing to support a judgment of acquittal here.

3. Counts 16-17: Extortion

motions, by Farrington Hill and Reagan, are addressed below.

Response to M otions for Judgment of Acquittal – Page 9

A. Farrington Hill’s written motion

exclusively in a criminal venture wherein public officials sought or demanded things of

tax credit affordable housing developments in the City of Dallas.

(Southwest Housing Development Corporation, TX Laureland LP, TX Scyene LP, Bright

Response to M otions for Judgment of Acquittal – Page 10

B. Reagan’s written motion

Reagan argues that the evidence is insufficient as to Count 17 because it fails to

Prosecution's Summary of Case Against Don Hill, Etc

Prosecution's Summary of Case Against Don Hill, Etc