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Appeals Court Tosses Some Fraud Counts Against Schools Chief

A federal appeals court has reversed the conviction of a former Maryland school district chief for "honest-services fraud," but upheld counts involving evidence and witness tampering and obstruction of justice.

The decision came in a case involving Andre J. Hornsby, who was chief executive officer of the Prince George's County, Md., school system in 2004 when he was investigated regarding the award of a contract for educational technology. Hornsby was in a romantic relationship with a saleswoman for the contractor, LeapFrog SchoolHouse, and was charged with steering the $956,000 contract to her and later covering up e-mails and other evidence.

Hornsby was convicted in 2008 on six of 22 charges, including three of honest-services fraud, two of evidence and witness tampering, and one of obstruction of justice.

In a Jan. 25 decision in United States v. Hornsby, a three-judge panel of the U.S. Court of Appeals for the 4th Circuit, in Richmond, Va., unanimously reversed the convictions on the three fraud counts but upheld the other three counts. The court set aside Hornsby's six-year prison sentence on each count, which were to be served concurrently, and ordered that he be re-sentenced on the three counts involving tampering and obstruction of justice.

The appeals court said the convictions on the honest-services fraud counts could not be upheld in light of the U.S. Supreme Court's 2010 decision in Skilling v. United States, which narrowed the scope of the federal honest-services statute. The high court said the statute was largely confined to fraudulent schemes involving bribes and kickbacks, and did not cover conflicts of interest.

"In light of Skilling, the government concedes that the district court erred when it instructed the jury that it could convict Hornsby for honest-services fraud based on a conflict of interest," the 4th Circuit court said. The court rejected arguments by federal prosecutors that Hornsby's lawyers had failed to raise and preserve objections to evidence and jury instructions centering on the conflict-of-interest theory.

The court added that while there was evidence of a kickback--the girlfriend gave Hornsby $10,000, or half of her commission on the sale, as a "thank you" for helping her with the contract--it could not be discerned whether the jury convicted him on that basis.

"While a reasonable jury could infer from this evidence that Hornsby's scheme to defraud was all along a scheme with [the girlfriend] to receive a kickback from the LeapFrog contract, we cannot say with fair assurance that the jury convicted Hornsby on this basis alone," the appeals court said.

The Washington Post reported on Thursday that federal prosecutors could re-try Hornsby on the charges that were tossed out, but they had not decided whether they would do so.

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