Federal Crimes Outline - Professor Bolitho - Campbell Law - Part 8

a. 18 U.S.C. §§ 1341 and 1343 Mail/Wire Fraud

1. Jurisdictional Requirements
   1. Mail—All that needs to occur is for the D to use OR cause another to use the mail in furtherance of the scheme.
   2. Wire—Transfer via a wire, phone, or other telecommunication pathway.
2. Elements
   1. D knowingly participated in, devised, or intended to devise a scheme to defraud in order to obtain money or property (that he is not entitled to)
      1. “Obtain money or property” (SEE P. 32)
   2. The scheme included a material misrepresentation or concealment of a material fact
      1. Material—Has a natural tendency to influence the decision of a RPP
   3. D had the intent to defraud
      1. Specific intent
         1. Must have the intent to cheat another out of his property.
      2. Determined at the time the agreement is made
   4. D used the mail or caused another to use the mail or a wire in furtherance of the scheme
   5. Additional Elements Using § 1346 Honest Services Prong (see p. 30-32)
3. 3 Things that are NOT Required
   1. Central to the scheme
   2. Need not be false information
   3. Mailing was by the D
4. § 1341 Definition of “Fraud”
   1. Durland v. U.S. (Brewer) (1896)
      1. Fraud, whether criminal or civil, must be the misrepresentation of a material existing or past fact, and cannot consist of the mere intention not to carry out a K in the future. HOWEVER, making a promise with absolutely no intention of paying it back in the future is fraud.
         1. Having no future intent suffices as a “scheme or artifice to defraud.”
      2. Purpose of § 1341—To protect the public of intentional efforts to despoil and prevent the post office from being used to carry these schemes into effect.
      3. Defense—The D had the real intent to pay the money back but was frustrated in that end.
   2. Neder—may signal a rollback of Durland. Holding—Charges of fraud require the use of the mail/wire to be material. Could later lead to a more conservative approach to fraud. But this seems to have been narrowed to the misrepresented fact, not materiality in the use of the mail.
5. Penalties
   1. Standard = 20yr max
   2. During a Presidentially declared emergency = 30 year max

b. § 1346—Further defines “scheme or artifice to defraud” as a scheme to deprive another of the intangible right of honest services.

1. Intangible Rights Theory (IRT)
   1. Only applies to (1) public officials and (2) commercial officers.
   2. After Skilling, the IRT contemplated in § 1346 has been narrowed to only apply to kickbacks and bribery, but does NOT criminalize undisclosed self-dealing.
   3. Overall, it is not a crime for public officials to enjoy the accoutrements of making connections with wealthy people who want their ear.
   4. Skilling v. U.S. (Ginsburg) (2010)
      1. Holding— § 1346 only applies to kickbacks and bribes.
      2. NO requirement for the victim to be directly deprived of anything of value
      3. Elements of Honest Services— (1) fiduciary duty is violated (2) by participating in a bribery or kickback scheme
      4. Kickback—any money, fee, commission, credit, figt, gratuity, thing of value, or compensation of any kind, which is provided, directly or indirectly, to D for the purpose of improperly obtaining or rewarding favorable treatment in connection with SUA. i.e., It is a bribe to be collected from the profit made off the official act.
      5. Scalia (concurring in part)
         1. Rejects the use of severance to save a full vacating of the law. States that this reading is an overextension of judicial power because it effectively creates new crimes. Thus, the whole law should be struck.
         2. His primary issue with the § 1346 is that it does not provide a criterion of guilt.
      6. Deus ex machina—an unexpected power or event saving a seemingly hopeless situation
      7. Essentially, the Court has construed § 1346 to be a specialized fraud statute for bribes and kickbacks that is applicable to both state and federal defendants.
2. Operation of IRT outside “honest services”
   1. Without engaging in the IRT definition of “honest services,” the statute can also be used to prosecute fraud in the realm of intellectual property rights since they are intangible rights.