August 6, 2010
Honest Services Hypo
“[I expect] to see future litigation surrounding efforts by prosecutors to wedge their cases into the ‘bribe or kickback’ paradigm to which the Court has now limited this statute.”
NACDL President Cynthia Hujar Orr commenting upon the Supreme Court's decision in Skilling v. United States.
Consider the following hypothetical:
X is a well-known insurance industry executive who has had affiliations with many different insurance and reinsurance companies over the years. X has a relationship with ACME Credit Life Reinsurance, a company that re-insures the credit life insurance offered to purchasers of new and used boats. The policies are typically marketed through retail boat dealerships. Dealerships keep a portion of each premium and send a portion to the primary insurer. The primary insurer in turn sends a portion of the premium to ACME. Although X is not listed as an officer of ACME, he has a hidden interest in the company and receives a commission on every policy re-insured through ACME.
X accepts a job as President of Sterling Insurance.
The Sterling Board is unaware of X's relationship with ACME when it hires X.
Reinsurance obtained through ACME is a quality product that is competitively priced. Payments made by
Q: Are X's ACME commissions "kickbacks" in the post-Skilling world?
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Wow a Freed mind into the realm of quagmire hypotheticals.
Posted by: Laser Haas | Aug 6, 2010 9:17:16 AM