Cleveland v. United States

531 U.S. 12 (2000) Supreme Court of the United States 2000-11-07

criminal; motion to dismiss mail fraud counts denied, jury conviction on two mail fraud counts (1994 and 1995 video poker license renewals) plus RICO and money laundering counts predicated on them, affirmed by CA5; certiorari on whether an unissued state license is "property" of the State (result: claimant-lost)

Facts

  1. 2 Traditional money or property as an object not law
    It does not suffice, we clarify, that the object of the fraud may become property in the recipient’s hands; for purposes of the mail fraud statute, the thing obtained must be property in the hands of the victim.
  2. 2 Traditional money or property as an object not law
    Louisiana law allows certain businesses to operate video poker machines. La. Rev. Stat. Ann. §§27:301 to 27:324 (West Supp. 2000). The State itself, however, does not run such machinery.
  3. 2 Traditional money or property as an object not law
    The indictment alleged that Cleveland and Goodson had violated § 1341 by fraudulently concealing that they were the true owners of TSG in the initial license application and three renewal applications mailed to the State.
  4. 2 Traditional money or property as an object not law
    Without doubt, Louisiana has a substantial economic stake in the video poker industry.
  5. 2 Traditional money or property as an object not law
    The State receives the lion’s share of its expected revenue not while the licenses remain in its own hands, but only after they have been issued to licensees. Licenses pre-issuance do not generate an ongoing stream of revenue.
  6. 2 Traditional money or property as an object not law
    Tellingly, as to the character of Louisiana’s stake in its video poker licenses, the Government nowhere alleges that Cleveland defrauded the State of any money to which the State was entitled by law.
  7. 2 Traditional money or property as an object not law
    Indeed, there is no dispute that TSG paid the State of Louisiana its proper share of revenue, which totaled more than $1.2 million, between 1993 and 1995.
  8. 2 Traditional money or property as an object not law
    these intangible rights of allocation, exclusion, and control amount to no more and no less than Louisiana’s sovereign power to regulate.
  9. 2 Traditional money or property as an object not law
    Because a video poker license is property in the hands of the licensee, the Government says, Cleveland “obtained] . . . property” and thereby committed the second offense even if the license is not property in the hands of the State.
  10. 2 Traditional money or property as an object not law
    Although we do not here question that video poker licensees may have property interests in their licenses, we nevertheless disagree with the Government’s reading of §1341.
  11. 2 Traditional money or property as an object not law
    But we rejected that construction of the statute, instead concluding that the second phrase simply modifies the first by “ma[king] it unmistakable that the statute reached false promises and misrepresentations as to the future as well as other frauds involving money or property.”
  12. 2 Traditional money or property as an object not law
    We conclude that § 1341 requires the object of the fraud to be “property” in the victim’s hands and that a Louisiana video poker license in the State’s hands is not “property” under § 1341.
  13. 2 Traditional money or property as an object not law
    Our holding means that Cleveland’s § 1341 conviction must be vacated.