By Jonathan Stempel
NEW YORK (Reuters) - An appeal by former New York state Senate Majority Leader Joseph Bruno was rejected by a federal court on Tuesday, upsetting his bid to dismiss a second indictment and clearing the way for a new fraud trial.
Lawyers for Bruno, whose 2009 conviction had previously been thrown out, had argued that a second trial over whether the upstate Republican deprived people of his "honest services" violated his constitutional right against being tried twice for the same crime, known as double jeopardy.
But a panel of the 2nd U.S. Circuit Court of Appeals said prosecutors could retry Bruno on a new theory, that $440,000 of payments he allegedly solicited between 2004 and 2006 from an Albany, New York businessman constituted a bribe or kickback.
It also rejected the 84-year-old Bruno's argument that the government could not relitigate his intent to defraud because jurors had acquitted him on some counts addressing that issue.
"While Bruno argues that the now-vacated convictions should be considered a non-event and the jury's determinations on those counts should be ignored, there is no legal or factual support for this proposition," the three-judge panel said.
U.S. Attorney Richard Hartunian in a statement said Bruno will face a retrial, and a status hearing before U.S. District Judge Gary Sharpe will take place on August 13.
William Dreyer, a partner at Dreyer Boyajian in Albany who represents Bruno, did not respond to requests for comment.
Following Bruno's original conviction on two counts of honest services fraud, the U.S. Supreme Court redefined that crime to require proof of bribery or kickbacks, in a case against former Enron Corp Chief Executive Jeffrey Skilling.
That prompted the 2nd Circuit in November 2011 to throw out Bruno's conviction, even as it concluded that double jeopardy did not bar a new trial because of insufficient evidence.
Prosecutors filed a new indictment accusing Bruno of two counts of honest services mail fraud in May 2012. He has pleaded not guilty.
Bruno was the Senate majority leader for nearly 14 years. He resigned from that body in 2008 while under investigation.
The case is U.S. v. Bruno, 2nd U.S. Circuit Court of Appeals, No. 13-152.
(Editing by Dan Grebler, Bernard Orr)