## Facts

- The City of New Brunswick, New Jersey agreed to buy a garage property from Richard Malouf; undisclosed financial interests by city officials were involved in Malouf’s purchase financing.
- At the May 5, 1983 closing, the city paid Malouf $305,000; the proceeds were deposited into the city attorney Gilbert Nelson’s trust account.
- Nelson prepared a closing statement reflecting that $96,695.56 was due to Malouf but issued Malouf a check for $91,695.56, creating an unexplained $5,000 discrepancy.
- After federal authorities began investigating corruption related to the transaction and issued subpoenas, Nelson altered the closing statement to characterize the $5,000 as a deduction for legal fees allegedly owed to attorney George Shamy.
- Shamy supplied a letter purportedly instructing Nelson to withhold Malouf’s funds to pay Shamy; the letter was fabricated after the fact.
- In response to a grand jury subpoena, Nelson produced the altered closing statement and fabricated letter to federal authorities.
- At trial, the defense sought to cross-examine the Assistant U.S. Attorney who obtained the subpoenas to show the matter was not actually before the grand jury (e.g., no scheduled grand jury time and uncertainty whether records reached the grand jury).
- The district court curtailed that cross-examination and treated the existence of an empaneled grand jury as sufficient to establish a “pending” proceeding for purposes of 18 U.S.C. § 1503.
- A jury convicted Nelson and Shamy of conspiracy to obstruct justice (18 U.S.C. § 371) and substantive obstruction of justice (18 U.S.C. § 1503) based on the document fabrication and production.

## Issues

1. Whether the trial court’s limitation of cross-examination about the status of the grand jury inquiry violated the Sixth Amendment and improperly removed from dispute § 1503’s “pending judicial proceeding” element.
2. Whether the evidence was sufficient to sustain convictions for conspiracy to obstruct justice under 18 U.S.C. § 371.
3. Whether the substantive obstruction convictions under 18 U.S.C. § 1503 could stand given the restricted ability to contest whether a grand jury proceeding was pending.
4. Whether alleged spillover prejudice or confusion from other charges required reversal of the conspiracy convictions.

## Decision

- The Third Circuit affirmed the conspiracy convictions under 18 U.S.C. § 371.
- The Third Circuit reversed the substantive obstruction convictions under 18 U.S.C. § 1503 and remanded for a new trial on those counts.
- The court held the trial judge unreasonably limited cross-examination on whether a grand jury proceeding was actually pending, an essential element of § 1503.
- The court rejected claims that other charges or alleged jury confusion warranted disturbing the conspiracy verdict.

## Legal Principles

- A conviction under 18 U.S.C. § 1503 requires proof that a relevant judicial proceeding (including a grand jury proceeding) was pending when the obstructive act occurred.
- The mere existence of a sitting grand jury does not automatically establish that a proceeding tied to the defendant’s conduct was pending; the defense must be permitted to test that element.
- Trial courts may impose reasonable limits on cross-examination, but may not restrict inquiry in a way that prevents meaningful testing of an essential element of the offense and thereby infringes Sixth Amendment confrontation rights.
- For conspiracy to obstruct justice under 18 U.S.C. § 371, the government need not prove the conspirators used every means alleged in the indictment; it is enough to prove an agreement to obstruct justice by one charged means and an overt act in furtherance.
- A conspiracy to obstruct justice may be formed in anticipation of future proceedings if conspirators expect proceedings and commit an overt act after proceedings begin.

## Conclusion

The Third Circuit held that defendants charged with substantive obstruction must be allowed meaningful cross-examination on whether a grand jury proceeding was actually pending, reversing § 1503 convictions where that inquiry was improperly cut off, while sustaining § 371 conspiracy convictions supported by evidence of an agreement and overt acts to obstruct in contemplation of federal proceedings.


United States v. Nelson, 852 F.2d 706 (3d Cir. 1988)