Saturday, July 2, 2022
The Supreme Court accepted two cases that provide questions related to how to interpret current fraud statutes, specifically mail and wire fraud.
In Percoco v. United States, the question presented is "[d]oes a private citizen who holds no elected office or government employment, but has informal political or other influence over governmental decisionmaking, owe a fiduciary duty to the general public such that he can be convicted of honest-services fraud?" (see here).
In the second case, Ciminelli v. United States, the question presented is " "[w]hether the Second Circuit's "right to control" theory of fraud-which treats the deprivation of complete and accurate information bearing on a person's economic decision as a species of property fraud states a valid basis for liability under the federal wire fraud statute, 18 U.S.C. § 1343. (see here)
These cases offer an opportunity to the Court to provide better clarity to "honest services" fraud and also to how the "right to control" theory may apply. The decisions could affect a wide range of cases, such as those that are part of the Varsity Blues prosecutions. Leaving fraud as a "stop-gap device" until particularized legislation, is not the way to proceed with criminal prosecutions that could result in years of incarceration. It is time to provide clarity as to what is criminal and what is not when it comes to fraud related offenses. We don't need a statute for every imaginable type of fraud (e.g., we don't need a Beanie Baby fraud statute here). But we do need clarity in the areas of honest services fraud and the right to control. Mail fraud was an 1872 statute and even with its 1909 amendment, more is clearly needed.
See my prior article on Criminal Fraud here.
(esp)(h/t Peter Goldberger)