18 U.S.C. § 1341 · C relations

Case identity unavailable — citation unavailable · United States District Court for the Eastern District of Louisiana · 2012 (18usc1341: author: unavailable · not independently reviewed)

1. Scheme or artifice to defraud
   ✗ not satisfied · pleaded Not counted: background/merits

   fact · supports According to Plaintiffs, SnoWizard filed a patent application for the entirety of the ice-shaving machine in 1942, which was denied; however, the words “patent pending” were displayed on the door of the machines from 1942 to 1984, at which time the molding on the door was altered to read “patented,” and SnoWizard’s promotional literature also claimed the machine was patented.

   fact · supports SnoWizard then sent cease and desist letters to manufacturers and distributors on the basis of its registered trademarks.

   fact · supports Based on the patents SnoWizard claimed on its ice-shaving machines, Plaintiffs allegedly stopped purchasing, distributing, selling, and using ice-shaving machines that were not of the SnoWizard brand.

   rule This position is further buttressed by the general rule that fraud cannot be predicated upon misrepresentations of law.

   rule However, Plaintiffs must still plead a scheme to defraud upon which the predicate acts of mail or wire fraud may be based.

   held Therefore, since the underlying alleged fraud on the USPTO does not constitute mail or wire fraud, SnoWizard’s representations to customers and competitors regarding its intellectual property rights cannot constitute RICO violations.

   ✗ not satisfied · pleaded Not counted: background/merits

   fact · supports Although the owners of “FLAVOR SNOW” and Southern Snow .claimed a trademark in “SILVER FOX” by affixing a “TM” to the term in promotional materials, SnoWizard began using the “SILVER FOX” trademark in commerce without authorization, claiming it as a “SnoWizard Original.”

   fact · cuts-against Likewise, the Court notes that Plaintiffs were unable to cite any cases where patent or trademark infringement constituted mail or wire fraud, for purposes of the predicate act requirement.

   rule Johnson Electric suggests that ordinary infringement claims cannot constitute mail or wire fraud because there is no deceptive element, which is required to establish a scheme to defraud.

   held Thus, ordinary trademark infringement in conjunction with fraud on the USPTO cannot constitute the scheme to defraud required by the mail and wire fraud statutes.

2. Traditional money or property as an object
   ✗ not satisfied · pleaded Not counted: background/merits

   fact · supports In 2004, Sciortino applied for a patent on the ratchet linkage, allegedly listing only himself as the inventor and failing to disclose the parts’ public use and sale for more than one year before the application was filed.

   fact · supports According to Plaintiffs, SnoWizard copied the flavor without authorization, used the flavor with no claim of exclusivity for approximately five years, and then applied for and received federal trademark registration in May 2004.

   fact · supports According to Plaintiffs, Defendants made numerous false representations to the USPTO in order to obtain patents and trademark registrations to which they were not entitled.

   rule Even if these allegations are all true, which the Court must assume when deciding a motion to dismiss, controlling authority clearly states that “inequitable conduct before the PTO cannot qualify as an act of mail fraud or wire fraud for purposes of the predicate act requirement,” because such conduct did not “ ‘defraud’ the government of any ‘property.’”

   held But, Semiconductor Energy Laboratory Co. precludes a finding that Defendants committed mail and wire fraud on the basis of fraudulent statements to the USPTO.

3. Material deception
   ○ not reached · basis not recorded Not counted: background/meritsNo source quotation linked.
4. Knowing participation with intent to defraud
   ✗ not satisfied · pleaded Not counted: background/merits

   fact · supports In 2010, SnoWizard’s ice-shaving machine allegedly fell out of compliance with ETL and its certification lapsed. However, as of August 5, 2011, Plaintiffs maintain that SnoWizard ice-shaving machines still displayed stickers indicating ETL certification.

   rule Therefore, both RICO mail fraud and wire fraud “require evidence of intent to defraud, i.e., evidence of a scheme to defraud by false or fraudulent pretenses.”

   rule The Fifth Circuit requires that the allegations of fraud be plead with particularity, including “the who, what, when, where, and how.”

   held These allegations are insufficient to plead the requisite “evidence of intent to defraud” with the particularity required to state a claim for RICO mail or wire fraud.

5. Statutory mailing or carrier act
   ○ not reached · basis not recorded Not counted: background/meritsNo source quotation linked.
6. Mailing for execution of the scheme
   ○ not reached · basis not recorded Not counted: background/meritsNo source quotation linked.

Not addressed: elements 7

Case identity unavailable — citation unavailable · United States District Court for the Eastern District of Missouri · 1989 (18usc1341: author: unavailable · not independently reviewed)

1. Scheme or artifice to defraud
   ○ not reached · basis not recorded Not counted: applied/meritsNo source quotation linked.
2. Traditional money or property as an object
   ✗ not satisfied · pleaded

   fact · supports (4) Property of the Normandy School District being the exclusive control of who it hires to drive its children to and from school,

   fact · supports The school district then hired defendant as a school bus driver, which the government claims would not have been the case had the school district known of defendant’s prior murder conviction.

   fact · cuts-against Rather, they express only a desire for control over their general affairs; indeed, they seem to express a desire for control alone.

   rule This involves inquiring not only whether the asserted interest enjoys some ascertainable value, but also whether it is capable of being marketed, and whether the interest is a commodity that is generally exchanged for value in the open market.

   rule As the Court notes above, however, the interest in control must be focused upon some corresponding property right. Nothing in Carpenter suggests that control is in and of itself a property interest.

   held The Court finds that the remaining intangible interests alleged in the indictment are “too ethereal” to warrant the protection of the mail fraud statute.

   ✗ not satisfied · pleaded

   fact · supports (3) Property of the Normandy School District being the exclusive control of how its money is spent,

   fact · cuts-against The school district certainly must have allocated a certain amount of money for the purpose of paying bus drivers.

   fact · cuts-against The district does not, in fact, object to how its money was spent. They wanted a bus driver, and that is precisely what they got. The district objects to who they got.

   held This Court concludes that to find that the school district enjoyed a cognizable property right in controlling what type of person it paid wages would stand McNally on its head. The district enjoys no such property right.

   ✗ not satisfied · pleaded

   fact · supports (3) Property of the State of Missouri being the exclusive control of distribution of school bus operator permits,

   fact · supports On August 27, 1988, the Department of Revenue mailed defendant’s bus operator’s permit to the Normandy School District.

   rule If the state has no proprietary interest in bus operator’s permits, then it can have no property right in controlling their distribution.

   held The state, however, enjoys no property interest in licenses.

   held Likewise, the government’s claim that the state enjoyed any appreciable property interest in the piece of paper upon which defendant’s license was printed is patently absurd.

   ✗ not satisfied · pleaded

   fact · supports (2) Money of the State of Missouri in the form of expenses and costs of processing a fraudulent school bus operator permit application,

   fact · cuts-against In the case at bar, the state had allocated resources for the purpose of processing bus operator’s permits long before defendant submitted his application.

   fact · cuts-against Defendant certainly did not “obtain”, nor does the government suggest that defendant sought to “obtain”, the state’s processing expenses.

   fact · cuts-against The government fails, however, to suggest an amount representing the expenses incurred by the state or even that the cost incurred by a government agency in processing a single application of this sort is susceptible of calculation.

   held Processing this single permit did not deprive the state of its control over the allocation of resources.

   held This Court cannot conclude that the effort exerted by the Missouri Department of Revenue in processing a single application for a bus operator’s permit in the regular course of business has any measurable value for the purposes of qualifying as “property” meriting the protection of the mail fraud statute.

   ✗ not satisfied · pleaded

   fact · supports (1) Money from the Normandy School District in the form of wages paid,

   fact · cuts-against It is irrefutable that the school district suffered no financial injury. The school district paid wages for the services of a bus driver; defendant provided these services.

   fact · cuts-against The government does not suggest that defendant did not perform the service of driving a bus for Normandy School District in return for the wages he received.

   fact · cuts-against Nor does the government suggest that defendant was so poorly qualified to perform the service of driving school buses that the district somehow received less than it paid for.

   rule To summarize, this Court concludes that McNally and Carpenter stand for the proposition that a deprivation of property or an important right appurtenant thereto is required under the mail fraud statute.

   rule If the property itself is not lost, however, there must at least be some deprivation of an important right that accompanies the property, whereby the property holder’s use and enjoyment of the property is diminished.

   held In the case at bar, the government makes no allegation that suggests that the school district was “deprived” of the wages paid to defendant.

   held Hence, this Court concludes that the indictment alleges no property deprivation under McNally and Carpenter and that it, therefore, fails to allege a violation of the mail fraud statute.

3. Material deception
   ○ not reached · basis not recorded Not counted: applied/meritsNo source quotation linked.
4. Knowing participation with intent to defraud
   ○ not reached · basis not recorded Not counted: applied/meritsNo source quotation linked.
5. Statutory mailing or carrier act
   ○ not reached · basis not recorded Not counted: applied/meritsNo source quotation linked.
6. Mailing for execution of the scheme
   ○ not reached · basis not recorded Not counted: applied/meritsNo source quotation linked.

Not addressed: elements 7

Case identity unavailable — citation unavailable · United States Court of Appeals for the Ninth Circuit · 1967 (18usc1341: author: unavailable · not independently reviewed)

1. Scheme or artifice to defraud
   ✓ satisfied · proved

   fact · supports Lustiger caused the company to advertise its property in newspapers and other publications throughout the country. Those who answered were sent an “Investor’s Kit,” consisting of a thirty-two page color brochure, a “Fact Sheet,” and a land reservation form.

   fact · supports In fact, no city or community of residents, or building improvements of any kind, were in existence up to March, 1963, except for a small field office used by the company and a temporary dwelling occupied by a guide and caretaker.

   fact · supports There was no plan to construct or provide housing or shopping facilities, or provide the utilities necessary to the development of a planned city or community.

   fact · supports Moreover, here prospective buyers were expected to rely almost entirely on the advertising materials in making their purchase. Only a few buyers saw the property before signing the purchase contract.

   fact · cuts-against Although the accompanying “Fact Sheet” warned that no streets were presently available, prospective customers were not told that the terrain in many of the units made actual construction of a road physically impracticable or unreasonably expensive.

   rule If a scheme is devised with the intent to defraud, and the mails are used in executing the scheme, the fact that there is no misrepresentation of a single existing fact is immaterial. It is only necessary to prove that it is a scheme reasonably calculated to deceive, and that the mail service of the United States was used and intended to be used in the execution of the scheme.

   rule While it is true that exaggeration within reasonable bounds under the circumstances will not support a finding of a scheme to defraud, a substantial deception, as evidenced here, is sufficient.

   held The trial court was warranted in finding that the use of the words “Lake Mead City” in the subdivision name, taken in conjunction with the phrases quoted above were intended to mislead prospective customers into believing that a planned city or community had already been started and was rapidly growing.

   held We conclude that the evidence is sufficient to support a finding that Lustiger intentionally engaged in a scheme to defraud.

2. Traditional money or property as an object
   ○ not reached · basis not recorded Not counted: applied/meritsNo source quotation linked.
3. Material deception
   ✓ satisfied · proved

   fact · supports Another picture shows a large metal water tank lying horizontally alongside a windmill, with the printed declaration: “IMPORTANT! Plenty of Water.”

   fact · cuts-against It is true that, measured by a straight line, Lake Mead is only five miles from the boundary of Lake Mead City.

   fact · supports However, Lustiger did not reveal that by existing roads Lake Mead is fifteen miles from the nearest and forty miles from the farthest Lake Mead City unit.

   fact · supports Undisclosed to the prospective purchaser, however, was the fact that none of the pictured bodies of water were on land owned or optioned by Lustiger’s company.

   fact · supports Lustiger failed to disclose that the only source of water on the property owned by the company and available to purchasers during the period charged in the indictment was the Clearwater Well, located in the far northwest corner of the Lake Mead City units, a distance of twenty-eight miles from some subdivision units.

   rule Moreover, deceitful statements of half truths or the concealment of material facts is actual fraud violative of the mail fraud statute.

   held Our examination of Lustiger’s advertising materials reveals that the statements, photographs and maps, unaccompanied by true statements concerning the lack of available water, could reasonably have led a person of average intelligence and experience to believe that all parcels offered for sale had reasonable access to a water supply.

   held While the statements in the advertising materials may not have been literally false, taken as a whole they were fraudulently misleading and deceptive.

   ✓ satisfied · proved

   fact · supports The brochure stated that all Lake Mead City properties “are within the franchised area of Citizen’s Utilities Company, with regard to power and telephone.” This statement is literally true.

   fact · cuts-against Although the “Fact Sheet” stated that utilities were not presently available, Lustiger failed to disclose that the nearest existing electric power lines and telephone lines are approximately twenty-one miles from the nearest, and thirty-eight miles from the farthest of the Lake Mead City subdivision units.

   fact · supports Customers were not informed that the company owned only the odd-numbered sections, the even-numbered sections belonging to the federal government for grazing, mining and recreational purposes.

   fact · supports Finally, customers were not told that large washes, rocky hills, and steep cliffs separated many of the subdivision parcels, making reasonable travel between them in the future highly unlikely.

   held The evidence is overwhelming that Lustiger’s advertising materials were in some respects false and, apart from falsity were, when considered as a whole, fraudulently deceptive and misleading, exhibiting an intent and purpose to defraud.

4. Knowing participation with intent to defraud
   ✓ satisfied · proved

   fact · cuts-against Under the refund policy, if for any reason a customer changed his mind or was not completely satisfied within thirty days, his money was returned without question.

   fact · cuts-against Under the exchange policy, customers who had purchased lots in the ten units within which the company had not installed roads, staked lots, or provided parcel identification markers, could trade for property in the “improved” building area.

   fact · supports Here the exchange policy was conditioned on building within a certain period of time, and the refund policy was limited to thirty days.

   fact · supports Land which cost Lustiger from $33.20 to $125 an acre was in this way sold in one and a quarter acre parcels for from $395 to $495.

   rule As long as a sufficient number of the statements were shown to be knowingly false, deceptive or misleading to permit the trial court to infer that defendant intentionally engaged in a scheme to defraud, the conviction must be affirmed.

   rule While such policies may be evidence of good faith, they do not necessarily negate a finding of bad faith.

   held Lustiger also argues that his refund and exchange policies negate any finding of fraudulent intent. We disagree.

5. Statutory mailing or carrier act
   ✓ satisfied · conceded

   fact · supports It was stipulated prior to trial that appellant used the mail in connection with his land sales.

   fact · supports The company, through Lustiger, informed all customers that mail should be sent to the company at P.O. Box 13349, Phoenix, Arizona.

6. Mailing for execution of the scheme
   ○ not reached · basis not recorded Not counted: applied/meritsNo source quotation linked.

Not addressed: elements 7

Case identity unavailable — citation unavailable · United States Court of Appeals for the Seventh Circuit · 1981 (18usc1341: author: unavailable · not independently reviewed)

1. Scheme or artifice to defraud
   ✓ satisfied · proved

   fact · supports The evidence at trial established odometer rollbacks on thirteen automobiles purchased by Wisconsin residents from retail dealers.

   fact · supports The evidence at trial indicated that the higher wholesale cost of automobiles resulting from the odometer tampering was reflected in higher prices at the retail level.

   fact · cuts-against All these automobiles had been sold to retail dealers by Galloway, primarily through the Greater Chicago Auto Auction, although a few had been sold directly to a dealer whom Galloway had come to know personally.

   rule The starting point for analysis of a conviction under the mail fraud statute is determining the scope of the alleged scheme.

   held we find that the jury had sufficient evidence from which it could conclude, as the court below noted, “that the defendant’s scheme was not complete until the cars had been resold to retail customers in Wisconsin.”

5. Statutory mailing or carrier act
   ✓ satisfied · conceded

   fact · supports These title applications constituted the requisite mailings which supported the mail fraud indictment.

   rule As the district court noted, the evidence supported the finding that Galloway caused the mailings at issue, in the sense that he could reasonably have foreseen their occurrence. This, of course, is the only causation required by the mail fraud statute.

6. Mailing for execution of the scheme
   ✓ satisfied · proved

   fact · supports In order to finalize this purchase, the Wisconsin dealer would apply for title on behalf of the retail purchaser by mailing the required documents to the State Department of Transportation.

   fact · supports This essential transaction was not complete until the title documents were mailed to the responsible state agency, which then transferred title from the dealer to the retail purchaser.

   fact · cuts-against The fact that Galloway received his money before these mailings does not change our conclusion, for “a fraudulent scheme may depend on a mailing even after the defrauders have received the sought-after money or documents.”

   fact · cuts-against Galloway admits this fact by emphasizing that nowhere on the title document is an odometer reading required.

   rule Ohrynowicz has been interpreted to hold that where a mailing was a “normal concomitant of a transaction that was essential to the fraudulent scheme, [the mailing] was made for the purpose of executing that scheme.”

   rule Thus, Shryock stands for the proposition that where a sale to a retail customer is the final object of a scheme to defraud, mailings of title documents necessary to complete the sale are made “for the purpose of executing” the scheme.

   held These mailings were thus wore than “normal concomitants” of an essential transaction, they were an integral part of that transaction. They were essential to executing the scheme to defraud.

   held In this case, therefore, the mailings may fairly be said to have been for the purpose of executing the scheme to defraud.

   ✓ satisfied · proved

   fact · supports Thus, for example, evidence was introduced of odometer rollbacks on automobiles that were not subjects of the indictment, in order to demonstrate that Galloway’s scheme extended beyond individual sales.

   fact · supports Any failure in the title application process would have endangered Galloway’s scheme by discouraging the retail dealer from making further purchases of his automobiles.

   fact · supports Furthermore, the evidence at trial suggested that those attending the auction frequently knew and spoke with each other.

   fact · cuts-against While it is true, as the trial court noted, that failure to pass title would not necessarily have resulted in discovery of the scheme, it would have endangered its continued success.

   held Thus, the title application procedure, from Galloway’s provision of the title documents to their mailing to the state agency, was an essential step in Galloway’s scheme.

   ✗ not satisfied · no-evidence Not counted: applied/superseded

   fact · cuts-against The court found that the mailings alleged did nothing to further Galloway’s scheme of obtaining more money for the cars, since the transfer of title accomplished by the mailings would have occurred at whatever price the automobiles were sold.

   held The court ruled, however, that the jury did not have sufficient evidence from which to find that the use of the mails was “for the purpose of executing” Galloway’s scheme to defraud.

   ✗ not satisfied · no-evidence Not counted: applied/dissent

   fact · cuts-against It must be remembered that Galloway had nothing to do with the cars after he delivered them to the Auction.

   fact · cuts-against They did not affect the price paid for the car, conceal the alteration of the odometer, cause any benefits to flow to Galloway, or cause any further harm to the retail purchasers of the car.

   fact · cuts-against The transfer of the automobile titles through the post office was a routine mailing performed by Wisconsin dealers as a service to their customers.

   fact · supports I agree that the mailings in this appeal are a normal concomitant of the retail sale of the car.

   rule Thus determining that a mailing is a normal concomitant of an essential transaction is only the beginning of the inquiry.

   held I respectfully dissent because I do not believe that the mailings in this case furthered, in any way, the scheme to defraud.

Not addressed: elements 2, 3, 4, 7

Case identity unavailable — citation unavailable · United States Court of Appeals for the Ninth Circuit · 2000 (18usc1341: author: unavailable · not independently reviewed)

1. Scheme or artifice to defraud
   ✓ satisfied · conceded

   fact · supports Lo then prepared new loan applications which she submitted to Greater Suburban Mortgage (“GSM”) for the purchase of the Hugo property. The new applications contained numerous false statements about the Bau-tistas’ financial circumstances.

   fact · cuts-against This time, the lending institution discovered the fraud in its review of the application and notified Lo that it would not grant the loan.

   rule Mail fraud includes two general elements: first, the government must prove that a defendant devised or intended to devise a scheme to defraud a victim of his money or property; second, it must prove that in executing the scheme, the defendant made use of or caused the use of the mails.

   held There was more than sufficient evidence to prove that the scheme was fraudulent, and Lo does not contend otherwise.

2. Traditional money or property as an object
   ○ not reached · basis not recorded Not counted: applied/meritsNo source quotation linked.
3. Material deception
   ○ not reached · basis not recorded Not counted: applied/meritsNo source quotation linked.
4. Knowing participation with intent to defraud
   ○ not reached · basis not recorded Not counted: applied/meritsNo source quotation linked.
5. Statutory mailing or carrier act
   ✗ not satisfied · no-evidence

   fact · supports The GSM witnesses explained that when the mortgage company receives an application, it generates the document and, within three days from receipt of the application, sends it to the borrower.

   fact · supports The GSM witnesses also testified that because the law requires this document, GSM has a series of provisions in place to insure that it is mailed, including cross-checks by other loan departments.

   fact · cuts-against No copy of the Truth in Lending notice in question was introduced at trial.

   fact · cuts-against No GSM witness testified that he or anyone else at the company had ever seen the specific, critical document, that there was any record that it had ever existed, that it was ever in GSM’s loan files (whether at the time of trial or earlier) or that the loan file was ever complete.

   fact · cuts-against Moreover, although the Bautistas, the putative borrowers, also testified at trial, they did not state that they had ever received the document, and they, also, did not produce a copy of it.

   rule Obviously, as the chain of inferences based on usual practices gets longer, the probability that nothing went wrong in administering those practices lessens. At some point, a reasonable doubt arises concerning whether, as Murphy’s Law predicts, that which can go wrong did go wrong.

   rule Yet, the mailing is, of course, an essential element of the crime, and is the gatekeeper for separating those cases that are the exclusive province of the states from those that may be tried in federal court under the mail fraud statute.

   held We therefore conclude that in this case the evidence of the required mailing is far too tenuous to be sufficient, and reverse Lo’s conviction on Count Thirteen accordingly.

   ✓ satisfied · conceded

   fact · supports After the “sales” closed, the Alameda County Recorder’s office mailed the original grant deeds to Aglibot and Bosnich, the original deeds of trust to CMS and BHSC, and, some time later, a grant deed from Elma Aglibot to Jayson Bryant.

   fact · supports Lo does not dispute that the County Recorder mailed deeds to the lenders and to the owners, real and sham, of the two Oakland properties.

   fact · supports Printed at the top of the recording documents were specific instructions to the Recorder to mail the deed to the appropriate party when recorded.

   held . That Lo did not herself specifically plan the mailing is immaterial.

6. Mailing for execution of the scheme
   ✓ satisfied · proved

   fact · cuts-against These mailings occurred after the loans had been funded and after the deeds had been recorded in the Recorder’s office.

   fact · supports Lo’s plan was structured to make it appear that the properties had been sold, when in fact the sales were a sham.

   fact · supports The mailings could serve to “lull the victims” — in this case, the loaning banks — “into a false sense of security, postpone their ultimate complaint to the authorities, and therefore make the apprehension of the defendants less likely,” by assuring them that the conveyance of the property had gone forward in accordance with the usual procedures of the Recorder’s office and providing them with documentary proof thereof.

   rule The general principle upon which Lo relies is correct, for the government may not prevail without demonstrating that the mailings were incident to the execution of the scheme, rather than part of an after-the-fact transaction that, although foreseeable, was not in furtherance of the defendant’s fraudulent scheme.

   rule Rather, as in Sampson and Schmuck, the mailing can occur after the defendant has obtained her fee, if “the mailing is part of the execution of the scheme as conceived by the perpetrator at the time.”

   held From the foregoing analysis we conclude that there was sufficient evidence to sustain the convictions on Counts Four, Five and Nine, the counts alleging mailing of a grant deed attesting to one of the original sham “sales,” and of the deeds of trust.

   ✓ satisfied · proved

   fact · supports He testified that he was not expected to contribute any money toward the mortgage payments and that after a year he planned to quitclaim his interest in the property back to the Bryants.

   fact · cuts-against Bosnich did not, however, quitclaim his interest in the MacArthur property a year later, but did so only after another several months, after the FBI approached him with questions about the fraudulent loan applications and informed him that his name was listed on the 79th Avenue property.

   held There is, however, sufficient evidence of a prior understanding that Bosnich would quitclaim the MacArthur deed back to the Bryants to permit the jury properly to find that the transfer of the MacArthur property to AgliboN-Bryant was part of the execution of Lo’s original plan, whether the precise timing was influenced by the FBI investigation or not.

   ✗ not satisfied · no-evidence

   fact · cuts-against Both Bosnich and Aglibot-Bryant denied knowing that their names were on the 79th Avenue property.

   fact · cuts-against Neither they nor anyone else testified to a prior plan to deed back that property.

   fact · cuts-against Nor is there any evidence that Lo ever told, or intended to tell, Bosnich or Agli-bot-Bryant that she had used their names on the 79th Avenue property loan.

   held This being the state of the evidence, no reasonable juror could conclude beyond a reasonable doubt that it was part of Lo’s fraudulent plan that Bosnich or Aglibot-Bryant would deed back the 79th Avenue property.

   ✗ not satisfied · no-evidence

   fact · supports To this end, money from Brubaker was placed in an account in Aglibot-Bryant’s name. Brubaker was then repaid out of the escrow account before the MacArthur transaction closed. No mailings are charged with respect to that transaction.

   fact · cuts-against It appears that Brubaker subsequently made a second loan to the Bryants which he secured with a deed of rents on the MacArthur property and which led to the mailing at issue in Count Six.

   held There is no basis in the evidence, however, for concluding that this second loan was part of Lo’s fraudulent scheme.

Not addressed: elements 7

Case identity unavailable — citation unavailable · United States Court of Appeals for the Third Circuit · 1994 (18usc1341: author: unavailable · not independently reviewed)

1. Scheme or artifice to defraud
   ○ not reached · basis not recorded Not counted: background/meritsNo source quotation linked.
2. Traditional money or property as an object
   ✗ not satisfied · pleaded Not counted: background/merits

   fact · supports According to the indictment, on ten occasions Henry disclosed bid information to Mike and another individual in the Auditor General’s office, who in turn disclosed it to a representative of one bank, Bank A.

   fact · supports Bank A was thus allegedly able to narrowly outbid the other banks by offering a slightly higher rate of interest and, as a result, received deposits of $34,278,000 in Commission funds.

   fact · cuts-against Here, however, the money had not yet been deposited, and there is no way of knowing to which, if any, of the bidding banks it would have gone. Even in a fair process, Bank A might still have won the deposits.

   fact · cuts-against Just as the insurance commissions in McNally were not from the Commonwealth, the benefits Bank A and Mike received were not from the competing banks, and therefore those benefits cannot save the indictment here.

   rule Thus, to determine whether a particular interest is property for purposes of the fraud statutes, we look to whether the law traditionally has recognized and enforced it as a property right.

   rule Violation of this condition may have affected each bidding bank’s possible future receipt of property, but that does not make the condition property.

   held The issue, therefore, is whether the competing banks’ interest in having a fair opportunity to bid for something that would become their property if and when it were received is in itself property. We conclude that it is not.

   held In sum, we conclude that the indictment against Henry and Mike does not allege a scheme to defraud its victims of a property right and therefore does not state offenses under the federal fraud statutes.

   ✓ satisfied · pleaded Not counted: background/dissent

   fact · supports The allegations in the indictment make it clear that in each instance the bank that submitted the highest legitimate bid would have received the Commission’s money, but for the defendants’ fraud.

   fact · supports This is demonstrated by the fact that the unsuccessful bidder would have had a civil remedy against these defendants and Bank A for the tortious interference with prospective contractual relationships.

   rule The fraudulent deprivation of a reasonable expectation to secure an economic advantage falls within the proscriptions of the federal fraud statutes.

   held Unlike the majority, I believe that the unsuccessful banks had a sufficient property interest in a legitimate bidding process to support the fraud charges here.

   ○ not reached · basis not recorded Not counted: background/procedural

   fact · cuts-against Bid-rigging by public officials typically results in a government entity paying more than it otherwise would have for goods or services, see, e.g., United States v. Osser, 864 F.2d 1056, 1062-63 (3d Cir.1988), United States v. Asher, 854 F.2d 1483, 1495-96 (3d Cir.1988), cert. denied, 488 U.S. 1029, 109 S.Ct. 836, 102 L.Ed.2d 969 (1989), but the Commission allegedly made money here, receiving a higher interest rate on its deposits as a result of the scheme.

   held The government now argues that Henry’s and Mike’s scheme also defrauded the Commission of.its confidential business information and the right to control how its money was invested, but these theories were not advanced in the indictment and cannot save it on appeal.

   held .Because the loss of control theory was not alleged, we need not decide whether such a deprivation satisfies McNally.

3. Material deception
   ○ not reached · basis not recorded Not counted: background/meritsNo source quotation linked.
4. Knowing participation with intent to defraud
   ○ not reached · basis not recorded Not counted: background/meritsNo source quotation linked.
5. Statutory mailing or carrier act
   ○ not reached · basis not recorded Not counted: background/meritsNo source quotation linked.
6. Mailing for execution of the scheme
   ○ not reached · basis not recorded Not counted: background/meritsNo source quotation linked.
7. Separate section 1346 theory; outside property-fraud claim
   ○ not reached · basis not recorded Not counted: background/procedural

   fact · supports The indictment asserted that in rigging the bids, “Henry violatefd] his fiduciary duty and Commission custom, practices and policies”

   fact · cuts-against It did not become effective until November 18, 1988, well after the bid-rigging alleged in the indictment ceased, and it is not retroactive.

   rule Under McNally and Carpenter, a government official’s breach of his or her obligations to the public or an employee’s breach of his or her obligations to an employer cannot violate the fraud statutes.

   held Therefore, to state an offense under the federal fraud statutes, the indictment against Henry and Mike must allege a scheme that meets McNally’s standards.

Case identity unavailable — citation unavailable · United States Court of Appeals for the Seventh Circuit · 2010 (18usc1341: author: unavailable · not independently reviewed)

1. Scheme or artifice to defraud
   ○ not reached · basis not recorded Not counted: rule-announced/procedural

   fact · supports A few days after that incident, Greer went to Troutman’s office and spoke with Boone, who informed him that for a $10,000 cash payment he would be allowed to proceed without a permit.

   fact · supports Boone then stated that in order to obtain the letter Greer would have to pay $15,000 to the office.

   fact · supports Hall informed Plomin that she had to make a campaign contribution of $1,500 in order to obtain a letter of support from Troutman. Plomin ultimately decided against paying that money, and she did not obtain the letter of support.

   fact · supports Once the checks were cashed, Pattison received the letter of support from Troutman.

   rule The mailing is a jurisdictional prerequisite which must be satisfied in order to invoke federal criminal prosecution, but it does not constitute an endpoint beyond which the government may not provide evidence of the scheme.

   rule Moreover, the definition of the scheme itself is a limiting principle, in that only evidence of the same scheme as opposed to a related or distinct scheme, is admissible.

   held Because that evidence was directly relevant to establish a critical component of the scheme, it was admissible as direct evidence of the offense.

2. Traditional money or property as an object
   ○ not reached · basis not recorded Not counted: applied/meritsNo source quotation linked.
3. Material deception
   ○ not reached · basis not recorded Not counted: applied/meritsNo source quotation linked.
4. Knowing participation with intent to defraud
   ○ not reached · basis not recorded Not counted: rule-announced/procedural

   fact · supports In that capacity, one of Boone’s jobs was to issue the aforementioned letters of support for the alderman, and those letters bore his name as the contact person should the recipients have any concerns, and also bore both his and Troutman’s initials.

   fact · supports That evidence again established that the requests for money were not made in a secretive manner, but rather that such business was openly conducted in the presence of others in the office, and that such requests were made in the first or second contacts with the victims seeking the letters of support.

   fact · cuts-against She did not identify Boone as one of the individuals that she remembered at that meeting.

   rule Therefore, the government could prove knowledge by demonstrating that Boone must have known of the scheme to defraud.

   rule In order to prove mail fraud, the government was required to establish: (1) that Boone participated in a scheme to defraud; (2) that he did so knowingly and with the intent to defraud; and (3) that Boone used or caused the use of the mails in furtherance of the scheme.

   held Accordingly, evidence of the blatant and open nature of the requests for payments, and of the large number of individuals in the office who were participants in the scheme, was relevant to demonstrate that Boone must have known of the scheme.

5. Statutory mailing or carrier act
   ○ not reached · basis not recorded Not counted: applied/meritsNo source quotation linked.
6. Mailing for execution of the scheme
   ○ not reached · basis not recorded Not counted: applied/meritsNo source quotation linked.
7. Separate section 1346 theory; outside property-fraud claim
   ✓ satisfied · conceded

   fact · supports Pursuant to that scheme, developers who wanted to build or rehabilitate property in the 20th Ward were required to pay a bribe to Troutman’s office in order to gain support that they needed to proceed, such as letters of support from her for zoning changes, alley access, and curb cutting.

   fact · supports The allegations were that a payment was made in order to obtain the services that the alderman’s office is supposed to provide.

   rule Accordingly, the Court held that in order to avoid vagueness problems, § 1346 must be read as criminalizing only bribery and kickback schemes.

   held Thus, the allegations underlying the honest services conviction in this case involved the type of bribery conduct that the Court preserved in Skilling, and which constitutes criminal conduct under § 1346.

Case identity unavailable — citation unavailable · Supreme Court of the United States · 1999 (18usc1341: author: unavailable · not independently reviewed)

1. Scheme or artifice to defraud
   ○ not reached · basis not recorded Not counted: rule-announced/merits

   rule The common-law requirements of “justifiable reli-anee” and “damages,” for example, plainly have no place in the federal fraud statutes.

   rule 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.

3. Material deception
   ○ not reached · basis not recorded Not counted: rule-announced/merits

   fact · supports 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.

   fact · supports 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.

   fact · supports 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.

   fact · cuts-against In instructing the jury on mail fraud and wire fraud, the District Court did not include materiality as an element of either offense.

   rule 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.

   rule Accordingly, we hold that materiality of falsehood is an element of the federal mail fraud, wire fraud, and bank fraud statutes.

   held we remand this case to the Court of Appeals for it to consider in the first instance whether the jury-instruction error was harmless.

Not addressed: elements 2, 4, 5, 6, 7

Case identity unavailable — citation unavailable · Supreme Court of the United States · 2000 (18usc1341: author: unavailable · not independently reviewed)

1. Scheme or artifice to defraud
   ○ not reached · basis not recorded Not counted: applied/meritsNo source quotation linked.
2. Traditional money or property as an object
   ✗ not satisfied · law

   fact · cuts-against 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.

   fact · cuts-against 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.

   fact · supports Without doubt, Louisiana has a substantial economic stake in the video poker industry.

   fact · cuts-against 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.

   fact · cuts-against 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.

   fact · cuts-against 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.

   rule 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.

   rule these intangible rights of allocation, exclusion, and control amount to no more and no less than Louisiana’s sovereign power to regulate.

   held 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.

   held Our holding means that Cleveland’s § 1341 conviction must be vacated.

   ✗ not satisfied · law

   fact · supports 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.

   rule 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.”

   held 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.

7. Separate section 1346 theory; outside property-fraud claim
   ○ not reached · basis not recorded Not counted: rule-announced/merits

   rule Significantly, Congress covered only the intangible right of honest services even though federal courts, relying on McNally, had dismissed, for want of monetary loss to any victim, prosecutions under § 1341 for diverse forms of public corruption, including licensing fraud.

Not addressed: elements 3, 4, 5, 6

Case identity unavailable — citation unavailable · Supreme Court of the United States · 2009 (18usc1341: author: unavailable · not independently reviewed)

2. Traditional money or property as an object
   ○ not reached · basis not recorded Not counted: comparator/merits

   fact · supports In 2002 he was indicted for conspiring to commit mail fraud, wire fraud, bank fraud, and money laundering. 18 U. S. C. §§371, 1341, 1343, 1344, 1956(h). A jury found him guilty.

   fact · cuts-against But because none of these statutes requires a finding of any particular amount of victim loss, the jury made no finding about the amount of the loss.

   rule We have found no widely applicable federal fraud statute that contains á relevant monetary loss threshold.

Not addressed: elements 1, 3, 4, 5, 6, 7