Supreme Court of the United States · 1999-06-10
Case and law context
Role: rule-announced; posture: criminal; jury conviction on 9 mail fraud counts (with wire fraud, bank fraud and tax counts) under instructions that omitted materiality, affirmed by CA11; certiorari on whether materiality is an element of the fraud statutes; the Court holds it is and remands for harmless-error review of the fraud counts; result: remanded; claim:
Instances and excluded annotation blocks
| Case | Element | Holding and scope | Variant | Exact source quotations |
|---|---|---|---|---|
| /us/527/0001-01 — Supreme Court of the United States · 1999 | Material deception | not_reached Excluded from merits counts rule-announced / meritsThe Court construes "scheme or artifice to defraud" to carry the common-law materiality requirement, but does not decide whether Neder's misstatements to the lenders were material or whether omitting the element was harmless on the fraud counts; that goes back to CA11. The fact lines are the Court's background recital of the lending schemes (and the instruction given), not findings on materiality; the absent-tagged line is a procedural fact, not conduct. Materiality standard: footnote 5 quotes the Restatement (Second) of Torts 538 definition (reasonable person would attach importance, or maker knows the recipient does); the Part II Gaudin "natural tendency to influence" formulation is stated for the tax counts. | common-law-fraud-incorporation/materiality-omitted-from-jury-instruction | In so doing, he concealed from lenders that he controlled the shell corporations, that he had purchased the land at prices substantially lower than the inflated resale prices, and that the limited partnerships had not made substantial down payments as represented.Source: docroot/ir/caselaw/us_527.jsonl#/us/527/0001-01; Unicode character offsets [1174:1438] (end exclusive); SHA-256 e0a4af797b1293eb68136f29db1ed43b57bd1627cee70ab67e5a05c81288e673.To obtain the loan, he falsely represented to the lender that he had satisfied a condition of the loan by making advance sales of 20 condominium units.Source: docroot/ir/caselaw/us_527.jsonl#/us/527/0001-01; Unicode character offsets [2094:2245] (end exclusive); SHA-256 e0a4af797b1293eb68136f29db1ed43b57bd1627cee70ab67e5a05c81288e673.Between September 1987 and March 1988, he submitted numerous requests based on false invoices, the lender approved the requests, and he obtained almost $8 million unrelated to any work actually performed.Source: docroot/ir/caselaw/us_527.jsonl#/us/527/0001-01; Unicode character offsets [2926:3130] (end exclusive); SHA-256 e0a4af797b1293eb68136f29db1ed43b57bd1627cee70ab67e5a05c81288e673.In instructing the jury on mail fraud and wire fraud, the District Court did not include materiality as an element of either offense.Source: docroot/ir/caselaw/us_527.jsonl#/us/527/0001-01; Unicode character offsets [4518:4651] (end exclusive); SHA-256 e0a4af797b1293eb68136f29db1ed43b57bd1627cee70ab67e5a05c81288e673.Thus, under the rule that Congress intends to incorporate the well-settled meaning of the common-law terms it uses, we cannot infer from the absence of an express reference to materiality that Congress intended to drop that element from the fraud statutes.Source: docroot/ir/caselaw/us_527.jsonl#/us/527/0001-01; Unicode character offsets [34460:34716] (end exclusive); SHA-256 e0a4af797b1293eb68136f29db1ed43b57bd1627cee70ab67e5a05c81288e673.Accordingly, we hold that materiality of falsehood is an element of the federal mail fraud, wire fraud, and bank fraud statutes.Source: docroot/ir/caselaw/us_527.jsonl#/us/527/0001-01; Unicode character offsets [38141:38269] (end exclusive); SHA-256 e0a4af797b1293eb68136f29db1ed43b57bd1627cee70ab67e5a05c81288e673.we remand this case to the Court of Appeals for it to consider in the first instance whether the jury-instruction error was harmless.Source: docroot/ir/caselaw/us_527.jsonl#/us/527/0001-01; Unicode character offsets [38417:38550] (end exclusive); SHA-256 e0a4af797b1293eb68136f29db1ed43b57bd1627cee70ab67e5a05c81288e673. |
| /us/527/0001-01 — Supreme Court of the United States · 1999 | Scheme or artifice to defraud | not_reached Excluded from merits counts rule-announced / meritsStated as a step in the materiality reasoning (not everything in common-law fraud is incorporated): actual reliance and damage are not elements because the statute punishes the scheme, not the completed fraud. Not applied to Neder's facts. Also restates Durland: the statute reaches promises as to the future, beyond common-law false pretenses. | common-law-fraud-incorporation/reliance-and-damage-not-required | The common-law requirements of “justifiable reli-anee” and “damages,” for example, plainly have no place in the federal fraud statutes.Source: docroot/ir/caselaw/us_527.jsonl#/us/527/0001-01; Unicode character offsets [37212:37347] (end exclusive); SHA-256 e0a4af797b1293eb68136f29db1ed43b57bd1627cee70ab67e5a05c81288e673.By prohibiting the “scheme to defraud,” rather than the completed fraud, the elements of reliance and damage would clearly be inconsistent with the statutes Congress enacted.Source: docroot/ir/caselaw/us_527.jsonl#/us/527/0001-01; Unicode character offsets [37779:37953] (end exclusive); SHA-256 e0a4af797b1293eb68136f29db1ed43b57bd1627cee70ab67e5a05c81288e673. |
Court interpretations recorded from this case
interpretation
By prohibiting the “scheme to defraud,” rather than the completed fraud, the elements of reliance and damage would clearly be inconsistent with the statutes Congress enacted.
/us/527/0001-01 — Supreme Court of the United States · 1999
By prohibiting the “scheme to defraud,” rather than the completed fraud, the elements of reliance and damage would clearly be inconsistent with the statutes Congress enacted.Source:
docroot/ir/caselaw/us_527.jsonl#/us/527/0001-01; Unicode character offsets [37779:37953] (end exclusive); SHA-256 e0a4af797b1293eb68136f29db1ed43b57bd1627cee70ab67e5a05c81288e673.A fraudulent plan, including a deliberately false promise, is required; an unsuccessful scheme can qualify. Do not convert a mere breach of contract into fraudulent intent.
interpretation
Accordingly, we hold that materiality of falsehood is an element of the federal mail fraud, wire fraud, and bank fraud statutes.
/us/527/0001-01 — Supreme Court of the United States · 1999
Accordingly, we hold that materiality of falsehood is an element of the federal mail fraud, wire fraud, and bank fraud statutes.Source:
docroot/ir/caselaw/us_527.jsonl#/us/527/0001-01; Unicode character offsets [38141:38269] (end exclusive); SHA-256 e0a4af797b1293eb68136f29db1ed43b57bd1627cee70ab67e5a05c81288e673.Judge-made incorporation of common-law fraud, not an express word in this statute. Petlechkov supplies the Sixth Circuit's ordinary-prudence formulation, not a uniform national definition. Kousisis leaves unresolved the parties' competing formulations of the materiality standard; it does not adopt an essence-of-the-bargain test as an additional universal element.
interpretation
By prohibiting the “scheme to defraud,” rather than the completed fraud, the elements of reliance and damage would clearly be inconsistent with the statutes Congress enacted.
/us/527/0001-01 — Supreme Court of the United States · 1999
By prohibiting the “scheme to defraud,” rather than the completed fraud, the elements of reliance and damage would clearly be inconsistent with the statutes Congress enacted.Source:
docroot/ir/caselaw/us_527.jsonl#/us/527/0001-01; Unicode character offsets [37779:37953] (end exclusive); SHA-256 e0a4af797b1293eb68136f29db1ed43b57bd1627cee70ab67e5a05c81288e673.A fraudulent plan, including a deliberately false promise, is required; an unsuccessful scheme can qualify. Do not convert a mere breach of contract into fraudulent intent.
interpretation
Accordingly, we hold that materiality of falsehood is an element of the federal mail fraud, wire fraud, and bank fraud statutes.
/us/527/0001-01 — Supreme Court of the United States · 1999
Accordingly, we hold that materiality of falsehood is an element of the federal mail fraud, wire fraud, and bank fraud statutes.Source:
docroot/ir/caselaw/us_527.jsonl#/us/527/0001-01; Unicode character offsets [38141:38269] (end exclusive); SHA-256 e0a4af797b1293eb68136f29db1ed43b57bd1627cee70ab67e5a05c81288e673.Judge-made incorporation of common-law fraud, not an express word in this statute. Kousisis leaves unresolved the parties' competing formulations of the materiality standard; it does not adopt an essence-of-the-bargain test as an additional universal element.