Source: cases/18usc1343/f3d-333-1264-us-v-hasson.case
Case source: https://www.neochart.com/catalog/cases/f3d/volume_333/1264_01/index.html
That is, not all misrepresentations or omissions constitute a scheme, to defraud; the misrepresentation or omission must be material and it must be one on which a person of ordinary prudence would rely.
Puffery, for example, is not part of a scheme to defraud because a person of ordinary prudence would not rely on it; nor would a person of ordinary prudence engaged in an arm’s-length purchase rely on the seller’s representations regarding the market value of the property when the market value can be, and should be, easily verified by consulting other sources.
Has-son’s conduct simply cannot be analogized to the mere misrepresentation of accessible market values which, as we held in Brown, could not be reasonably calculated to induce purchase by a person of ordinary prudence.
A material misrepresentation is one having a natural tendency to influence, or capable of influencing, the decision maker to whom it is addressed.
The record in this case is replete with evidence of material misrepresentations regarding the physical and objective characteristics of the gems and jewelry sold.
To “cause” the interstate wires to be used, the use of the wires need not be actually intended; it need only be reasonably foreseeable.
It was foreseeable that these customers would at some point make use of the interstate wires to transfer large sums of money to complete some of their many expensive purchases.
An interstate wire transmission is “for the purpose of executing” the scheme to defraud if it is “incident to an essential part of the scheme” or “a step in the plot.”
This wire transfer was an interstate transmission over the wires caused for the purpose of executing the scheme to defraud.
To violate the wire fraud statute, it is not necessary that the transmitted information include any misrepresentation.
We readily conclude that the use of the wires to make payment for the two pieces of jewelry whose purchase was fraudulently induced was “for the purpose of executing” the scheme to defraud.
casedsl 1
case /f3d/333/1264-01
name United States v. Hasson
cite 333 F.3d 1264 (2003)
court United States Court of Appeals for the Eleventh Circuit
date 2003-06-12
url catalog/cases/f3d/volume_333/1264_01/index.html
source ir/caselaw/f3d_333.jsonl sha1=05b9f46c731c219243dad4c3db7fbf5c5cfdd0ad chars=45272
law 18usc1343
role applied
posture criminal; jury conviction of a jeweller on three wire fraud counts, § 371 conspiracy to commit wire fraud, money-laundering and obstruction conspiracies; direct appeal challenging sufficiency (scheme to defraud; foreseeability and purpose of the wires) and the forfeiture and restitution orders; affirmed
result claimant-won
element scheme : satisfied [proved]
theory misrepresentations reasonably calculated to deceive a person of ordinary prudence (not mere market-value puffery)
variant fraudulent-inducement/misdescribed-goods-backed-by-sham-independent-verification
fact @10221..10502 [supports] | There was also ample testimony regarding the special training and equipment required to evaluate the physical qualities of fíne gems and jewelry from which the jury could reasonably conclude that the misrepresentations were not easily verifiable by the person of ordinary prudence.
fact @10503..10876 [supports] | Furthermore, Hasson prepared false appraisals and arranged for false appraisals prepared by co-conspirator posing as an independent appraiser, creating the impression that his representations were independently verified and making it unlikely that a person of ordinary prudence would invest the time and expense to obtain second or third evaluations of the items purchased.
fact @16023..16336 [supports] | The con included paying co-conspirators to play the roles of the Sultan’s nephew and the nephew’s entourage at a meeting between Johnson and the “nephew” held on Hasson’s private jet, disguised as the nephew’s jet, in late 1995, and at a similar meeting held in a limousine at the Palm Beach airport in late 1996.
rule @8193..8395 | That is, not all misrepresentations or omissions constitute a scheme, to defraud; the misrepresentation or omission must be material and it must be one on which a person of ordinary prudence would rely.
rule @8657..9019 | Puffery, for example, is not part of a scheme to defraud because a person of ordinary prudence would not rely on it; nor would a person of ordinary prudence engaged in an arm’s-length purchase rely on the seller’s representations regarding the market value of the property when the market value can be, and should be, easily verified by consulting other sources.
held @9677..9896 | Has-son’s conduct simply cannot be analogized to the mere misrepresentation of accessible market values which, as we held in Brown, could not be reasonably calculated to induce purchase by a person of ordinary prudence.
gloss Defendant argued he had only overstated market value, which a prudent buyer could check. Rejected: the lies went to physical characteristics a lay buyer cannot verify, and sham "independent" appraisals and staged meetings discouraged checking.
element materiality : satisfied [proved]
variant objective-characteristics/grade-weight-authenticity-and-provenance-of-goods-misstated
fact @9207..9568 [supports] | The government established that Hasson repeatedly misrepresented the carat weight, color grading, and clarity grading of gems; misrepresented semi-precious gems, synthetic gems, or simulants as natural gems and diamonds; misrepresented stones that had been color- or clarity-treated as natural stones; and misrepresented the history or provenance of items sold.
fact @39782..39940 [supports] | In sales to Aben and Joan Johnson, Hasson misrepresented the type of gems or stones in 314 items and the history and provenance of at least 80 items and gems.
rule @8396..8542 | A material misrepresentation is one having a natural tendency to influence, or capable of influencing, the decision maker to whom it is addressed.
held @9044..9206 | The record in this case is replete with evidence of material misrepresentations regarding the physical and objective characteristics of the gems and jewelry sold.
element wire : satisfied [proved]
count three substantive counts (wire transfers of March 6, 1995; May 14, 1996; July 11, 1996)
theory "causes to be transmitted": foreseeability that the victim would pay by interstate wire
variant foreseeable-causation/victim-payment-wired-from-out-of-state-bank
fact @11499..11717 [supports] | The interstate wires which were the subject of the substantive counts were three wire transfers made by Aben Johnson, the principal victim of the scheme, from his Michigan bank account to Hasson’s Florida bank account.
fact @12404..12641 [supports] | Mr. and Mrs. Johnson maintained homes in both Florida and Michigan during the time when they purchased gems and jewelry from Hasson and, as was clear from many of the checks written by the Johnsons, maintained out-of-state bank accounts.
rule @6197..6332 | To “cause” the interstate wires to be used, the use of the wires need not be actually intended; it need only be reasonably foreseeable.
held @12642..12818 | It was foreseeable that these customers would at some point make use of the interstate wires to transfer large sums of money to complete some of their many expensive purchases.
gloss The victim, not the defendant, sent the wires; causation rests on what the seller knew about where his customers banked.
element furtherance : satisfied [proved]
count wire transfer of March 6, 1995 ($300,000)
variant payment-for-induced-sale/item-with-misstated-physical-characteristics
fact @13897..14093 [supports] | The March 6, 1995, wire transfer was for the purchase of two items, one of which was represented to the Johnsons as a diamond ring featuring a flawless 22.11-carat diamond with a color grade of D.
fact @14202..14302 [supports] | This ring in fact featured an 11.37-carat diamond with a clarity grade VS2 and a color grade L to M.
fact @14094..14201 [supports] | These representations were supported with an appraisal prepared by a co-conspirator and provided by Hasson.
rule @13672..13839 | An interstate wire transmission is “for the purpose of executing” the scheme to defraud if it is “incident to an essential part of the scheme” or “a step in the plot.”
held @14571..14694 | This wire transfer was an interstate transmission over the wires caused for the purpose of executing the scheme to defraud.
element furtherance : satisfied [proved]
count wire transfers of May 14 and July 11, 1996 ($577,500 for a necklace and pin)
variant payment-for-induced-sale/genuine-item-bought-on-false-resale-story
fact @15394..15530 [cuts-against absent] | the government introduced no evidence that the physical and objective characteristics of these two pieces of jewelry were misrepresented
fact @15006..15296 [supports] | Hasson later induced the Johnsons to repurchase these two pieces, falsely representing that a potential buyer of the Johnsons’ gem and jewelry collection, the Sultan of Brunei, was interested in completing this very substantial purchase only if these items were included in the transaction.
fact @16806..16980 [supports] | Hasson specifically represented that the Sultan wanted these two pieces of jewelry included in the Johnsons’ collection because they had been stolen from the Sultan’s mother.
rule @13343..13461 | To violate the wire fraud statute, it is not necessary that the transmitted information include any misrepresentation.
held @17070..17259 | We readily conclude that the use of the wires to make payment for the two pieces of jewelry whose purchase was fraudulently induced was “for the purpose of executing” the scheme to defraud.
gloss The goods paid for by these wires were not themselves misdescribed; the purchase was induced by an invented buyer who supposedly required these pieces, and that lie was material to the decision to buy.
element interstate : not-reached
gloss Michigan-to-Florida bank transfers; the interstate character of the charged wires was not contested (the fact sits in the `wire` block).
element intent : not-reached
gloss Not separately contested; the court folds "intentional participation" into its statement of the scheme element.
element property : not-reached
gloss The object was customers' purchase money; not in issue.
misfit The court fuses three declared elements: its "scheme to defraud" test is material misrepresentation (materiality) plus reasonable calculation to deceive a person of ordinary prudence (no declared id; parked in `scheme`), and the second `furtherance` block turns on a materiality finding about the inducing lie. Relations between elements remain prose (known item 3). The ordinary-prudence requirement itself is a circuit-specific sub-test with no law-side id.
misfit Sufficiency on the § 371 conspiracy count is decided on the same reasoning (agreement to join a scheme in which wire use is foreseeable), and the money-laundering conspiracy depends on the funds being wire-fraud proceeds; neither has a declared id.
misfit Forfeiture (§ 982) and restitution (§ 3663A) are measured by the whole scheme, including uncharged wires and the mail-fraud counts on which the jury acquitted, proved by a preponderance. That is a ruling about the scope of `scheme` under a different standard of proof and for a sentencing purpose; not expressible, not recorded.
misfit One `wire` block covers three counts while `furtherance` splits by count; `count` values are free text (known item 8). The source itself is inconsistent about the dates ("May 14 and July 11" vs "May 11 and July 14, 1996") and miscites the charging statute as "18 U.S.C. § 1348" (OCR), which would defeat citation-keyed loading.
misfit Sufficiency review: facts are stated in the light most favourable to the verdict; a `fact` line cannot say so (known item 6).