Tuesday, June 13, 2006

State Conflicts as a Federal Crime

In a "Not Precedential" ruling of the Third Circuit, the court reinstated a mail fraud indictment that had been dismissed by the district court.  The case was brought by the government under the "honest services" provision of mail fraud (18 USC 1346). The court holds here that a failure to disclose a conflict of interest can be the basis of a mail fraud charge. Affirming a prior decision in United States v. Panarella, 277 F.3d 678 (3rd Cir. 2002), the courts states that "'where a public official takes discretionary action that the official knows will directly benefit a financial interest that the official has concealed in violation of a state criminal law, that official has deprived the public of his honest services under 18 USC s. 1346.'"

What does this mean?  In part it means that a failure to disclose pursuant to a state law may be charged as federal offense of mail fraud.

The decision can be found here - Download 053927np.pdf

(esp) (with a hat tip to Steve Sanders)


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Is there anything not covered by Honest Services Mail Fraud? Is sleeping in the lunch room constitute a violation?

Posted by: John Haster | Jun 14, 2006 8:22:04 AM

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