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Federal extortion charges cannot be brought where the only connection to interstate commerce is that the victim worked for a company that does business out of state, the 2nd U.S. Circuit Court of Appeals has ruled. Joining its sister circuits “in drawing a distinction between the extortion of an individual and the extortion of a business,” the court reversed the conviction of a man who allegedly plotted to have a former partner beaten by a thug. Andrew Perrotta was charged under � 1951(a) of the Hobbs Act, which makes it a federal crime to commit extortion that affects interstate commerce. The indictment on which Perrotta was ultimately convicted said he was affecting commerce through a conspiracy to extort money from “an employee of FHB Funding Corp.,” a mortgage banking firm that included a telemarketing unit run by Gregg Marcus. Extortion was charged because Perrotta allegedly contacted a man named Santo Sirico to arrange an assault on Marcus. The aim of the assault was to persuade Marcus to settle a lawsuit over shares in a company in which the two men had been partners. But the man hired to attack Marcus, Vincent Scafidi, opted to tell the Federal Bureau of Investigation about the plan. Scafidi later testified in federal court in Brooklyn that he was told by Sirico his job was to make sure that Marcus “gets a beating” and he was to “break his legs.” Perrotta’s motion before Eastern District of New York Judge David Trager to set aside the conviction based on a lack of jurisdiction under the Hobbs Act was denied. But Perrotta’s argument received a more favorable response at the 2nd Circuit, where he contended that the proof at trial showed only that he conspired to extort an employee of a company, not the company, and that his alleged actions had no connection to the company’s trade across state lines. Judge Rosemary S. Pooler, writing for the court, agreed that the connection between the alleged crime and interstate commerce did not meet the minimum standard for establishing federal Hobbs Act jurisdiction. The best the government could do, she said, was to call witnesses to testify that “even a one-day absence by Marcus would affect FHB’s business.” Judge Pooler said the link between the crime and interstate commerce was “simply too attenuated to support federal Hobbs Act jurisdiction,” even though “a showing of a very slight effect” on interstate commerce usually suffices to transform the “quintessential state crimes of robbery and extortion into federal crimes.” And even under “this flexible standard,” the judge said, Perrotta could not have been convicted for violating the Hobbs Act. “Merely showing employment with a company that does business in interstate commerce, without more, stretches the Hobbs Act too far,” she said. “Under such a theory, the extortion or assault of anyone who worked in any capacity at any company that participates in interstate commerce would suffice for federal jurisdiction, blurring the boundaries between state and federal jurisdiction.” In this case, she said, the evidence at trial only showed that Perrotta arranged the assault on Marcus “because the two were embroiled in a bitter personal dispute.” The “narrow indictment” sought by the government, she said “effectively foreclosed any possibility of a direct link between the dispute and Marcus’s employment at FHB.” Senior Judge Ralph K. Winter and Judge Fred I. Parker joined in the opinion. Gerald L. Shargel, Marc Fernich and Maurice Sercarz represented Perrotta. Assistant U.S. Attorneys Cynthia M. Monaco, David C. James and Peter A. Norling represented the government.

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