Former Office of Management and Budget Director Jenifer O’Neal has placed four challenges to her federal corruption convictions before the U.S. Court of Appeals for the Third Circuit, asking the appellate court to vacate her convictions and direct an acquittal or new trial, or alternatively return the case to District Court for resentencing.
Ms. O’Neal’s appeal was docketed in the Third Circuit in June as United States v. Jenifer O’Neal, following her conviction alongside former V.I. Police Commissioner Ray Martinez. A federal jury found Ms. O’Neal guilty of two counts of honest-services wire fraud, federal-program bribery and money-laundering conspiracy, and she was subsequently sentenced to seven years in prison.
Her opening brief now attacks the verdict and sentence on four fronts, beginning with what her attorney characterizes as a constructive amendment of the indictment.
According to the brief, the grand jury charged Ms. O’Neal with an honest-services wire-fraud count tied to a $216,000 payment to Mon Ethos identified as occurring on January 26, 2023. At trial, however, the jury was asked to determine guilt based on a payment occurring “on or about January 26, 2024.”
Prosecutors previously characterized the discrepancy as a “clear transcription error,” but the defense argues that changing the year effectively altered the charge returned by the grand jury. Ms. O’Neal relies on the Supreme Court’s 1960 decision in Stirone v. United States, which held that an indictment cannot be broadened after it is returned except by the grand jury itself.
The defense argues that the discrepancy is not an insignificant clerical mistake because the payment date is tied directly to the conduct supporting the count. On that basis, Ms. O’Neal contends that the conviction associated with that charge cannot stand.
Defense Again Challenges Bribery Evidence
The second major argument is that Ms. O’Neal’s convictions depend on a bribery theory that the evidence did not adequately establish.
Her attorney focuses in part on the $17,730 payment made toward obligations associated with her Java Grande coffee shop. Government witness David Whitaker testified at trial that he made that payment, but the appeal emphasizes his acknowledgment that he told Ms. O’Neal the money had come from Mr. Martinez.
The defense argues there was no testimony establishing that Ms. O’Neal had agreed to “exchange anything for anything.” Instead, the brief says, “a rational juror could find, at most, an after-the-fact benefit conferred by a colleague.”
The timing is also central to the argument. The $17,730 payment occurred in April 2024, months after the Government of the Virgin Islands made the January payment to Mon Ethos that prosecutors linked to the alleged scheme.
Ms. O’Neal also challenges the money-laundering theory, arguing that “The Government identified no agreement by O’Neal to conduct a monetary transaction and no evidence that she knew the specific funds were criminally derived.”
At trial, however, the government presented evidence that Mr. Whitaker and Ms. O’Neal discussed the coffee-shop lease and that the $17,730 payment was ultimately made from an account Mr. Whitaker described as containing proceeds from the inflated $70,000 invoice line item. In denying Ms. O’Neal’s post-trial motions in May, U.S. District Judge Mark Kearney said the jury had heard sufficient evidence to sustain the challenged convictions and characterized the overall proof as “overwhelming.”
The appellate brief additionally disputes whether Ms. O’Neal exercised the type of governmental authority necessary to support the prosecution’s bribery theory. Her attorney argues prosecutors failed to prove that she was “pressuring, advising, and directing OMB officials,” emphasizing testimony from an OMB employee who said she was not pressured, saw no fraudulent invoice and was never asked to approve one.
According to the defense, Ms. O’Neal’s instruction that outstanding invoices in a particular category be processed — without identifying a specific contractor or invoice — does not amount to the “formal exercise of governmental power” over a specific and focused matter discussed by the Supreme Court in McDonnell v. United States. The Supreme Court’s 2016 ruling narrowed what qualifies as an “official act” under the federal bribery statute considered in that case.
Judge Kearney rejected a similar argument at the post-trial stage. His May opinion said the Third Circuit had not resolved whether McDonnell’s “official act” requirement applies to federal-program bribery under 18 U.S.C. § 666 and concluded that the statute did not require proof of such an act. The court said the jury instead had to find that Ms. O’Neal corruptly accepted or agreed to accept something of value intending to be influenced or rewarded in connection with Virgin Islands government business.
Recorded Conversations Challenged
The third issue concerns recordings admitted during the trial.
Ms. O’Neal’s appeal argues that the District Court committed a “foundation error” by allowing the jury to hear numerous recorded conversations in which she was not a participant and then permitting those recordings to be used against her.
“The error was not harmless,” the brief argues. “The Government’s proof of O’Neal’s state of mind was thin, and the recordings that were never admissible against her supplied the atmosphere that filled the gap.”
Recordings played a substantial role in the government’s trial presentation. The District Court’s post-trial memorandum recounts recorded discussions involving Mr. Whitaker, Mr. Martinez and, in some instances, Ms. O’Neal concerning invoice amounts, payments and use of proceeds. The lower court ultimately concluded that the evidence, taken together, supported the jury’s verdict.
The Third Circuit will now be asked to decide whether the disputed recordings were properly admitted against Ms. O’Neal and, if not, whether their admission affected the verdict sufficiently to require a new trial.
Seven-Year Sentence Also Under Attack
Ms. O’Neal’s fourth challenge targets the calculation of her 84-month prison sentence.
The appeal argues that a six-level sentencing enhancement tied to the value involved in the offense improperly attributed the entire $70,000 alleged slush fund to Ms. O’Neal even though the benefit she personally received was $17,730. According to the defense, the sentencing calculation should therefore have increased her offense level by four levels rather than six.
The brief also disputes a two-level enhancement based on Ms. O’Neal’s role in the scheme. That adjustment, the defense argues, rested on her supervision of OMB grants manager Jamie Gaston, “whom no one has ever suggested was criminally responsible for anything.”
The consequences extended beyond the two-level increase itself, according to the appeal. Because the role enhancement was imposed, Ms. O’Neal was also denied the sentencing-guideline reduction available to certain defendants with no criminal-history points. The brief therefore argues that the disputed role determination “costs four levels rather than two.”
The Justice Department said after sentencing that Ms. O’Neal received seven years in prison for her role in what prosecutors described as a procurement-fraud, bribery and money-laundering scheme involving Mon Ethos.
The Third Circuit is now being asked to determine whether any of the four alleged errors requires disturbing that result. Ms. O’Neal is seeking the most substantial relief available: vacation of her convictions and judgments of acquittal, while also asking, depending on how the appellate panel resolves the issues, for a new trial or resentencing in District Court.
