Friday, February 6, 2009

Mail Fraud - A Statute of Continual Issues

The 1872 mail fraud statute has been the subject of numerous Court decisions and much commentary. It has changed over time, with Court rulings that have served as the impetus for legislative changes. And in these sad economic times, it is a statute that prosecutors are clinging to in order to prosecute cases that might have no other basis in the criminal law. As described by Hon. Jed Rakoff in a law review article in 1980 - mail fraud is the "prosecutor's Stadivarius or Colt 45."

In its early years the focus was on the mailing. Today, the scheme to defraud element serves as the emphasis for prosecutions under this statute.

But even today, so much remains at issue. Judge Jacobs in a dissenting opinion in United States v. Rybicki noted the differences in interpreting the honest services provision that often attaches to a mail fraud prosecution:

In sum, the circuits are fractured on the basic issues: (1) the requisite mens rea to commit the crime, (2) whether the defendant must cause actual tangible harm, (3) the duty that must be breached, (4) the source of that duty, and (5) which body of law informs us of the statute's meaning. This lack of coherence has created "a truly extraordinary statute, in which the substantive force of the statute varie[s] in each judicial circuit." Brumley (Jolly, J., dissenting).

One also finds several Supreme Court decisions ruling on a variety of mail fraud issues, such as finding a requirement of "money or property" in the generic 1341 statute, holding that licenses were not property, and requiring proof of materiality in these fraud prosecutions. Seeing the variance in different issues under the mail fraud statute, it is not surprising to see the Eleventh Circuit deciding not to follow a prior panel ruling that required " a scheme reasonably calculated to deceive persons of ordinary prudence and comprehension." But the real question may be whether the defense will proceed to a higher court on the Svete case and what that Court will say. (For the Svete decision and holding, see here). See also Alyson M. Palmer, Fulton County Daily Report, law.com, 11th Circuit Tosses Fraud Precedent .

(esp)

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