Federal Criminal Law
Outline – Welling – Fall 2008
Substantive Crimes Covered:
Mail and Wire Fraud
Extortion, Bribery, & Gratuities
Scope of Federal Criminal Laws
Bases for Federal Criminal Jurisdiction:
Direct Federal Interest:
Ex: Counterfeiting, Crimes on Federal Lands, False Statements to the Government
Indirect Federal Interests:
Ex: Mail Fraud, Tax Fraud
Commerce power – basis for most crimes
Item literally crosses state lines
Affects interstate commerce
Transportation In Interstate Commerce – What is covered?
Crossing of a state boundary by communications and electronic signals
Person knows or has reason to know that the material will be transported in interstate commerce
Statutes now written to focus on the jurisdictional hook instead of the crime
Gaps in legislative coverage
Statutes written to broaden federal coverage.
Lopez v. US
Law makes it illegal to posses a gun at school
US SC found the law unconstitutional because there is no jurisdictional basis
Congress failed to make any findings to support how the criminal activity would affect interstate commerce when they passed the act
Mail & Wire Fraud
18 USC § 1341
Having Devised on Intending to Devise
Any Scheme to Artifice (Defraud)
To Defraud or
To obtain property by false representations or
To deal in counterfeit material
For the purpose of executing such scheme (or artifice) – (relationship between mailing and the fraud)
Causes to be mailed
Receives from the mail
Private commercial interstate carriers (mailing doesn’t have to cross state lines but the service has to serve an interstate area)
(Nader Case Adds) – Is Material Misrepresentation
Is guilty of Mail/Wire Fraud
Other Fraud Statutes:
18 USC § 13 43- Fraud by wire, Radio, or TV
18 USC § 1346 – Scheme or Artifice to Defraud
Scheme to deprive one of the intangible right to honest services
Scheme to Defraud:
Durland v. US – 1896
First case based on Mail Fraud Act
Fraud not limited to scope of fraud, as defined by the state laws
Fraud constitutes a wide variety of conduct involving a material falsity
Under the common law, misrepresentations as to the future are not fraud.
Mail Fraud is not limited by the common law definition of fraud.
Fraud – requires no showing of a violation of the any underlying law
Scheme to defraud applies to representations about the past, present, or promises about the future.
Needer v. US
Materiality requirement –
Reasonable man would attach importance to its existence in determining the choice of his transaction.
Maker of the representation knows that the recipient regards the matter as important in determining his course of action.
Why? – Lies made should be meaningful not trivial – to warrant prosecution.
Durland – governs only false representations, not to defraud generally.
Intangible Rights Doctrine:
McNally v. US
SC rejects intangible rights doctrine
Mail fraud reaches only to deprivation of property rights.
Case – based on statutory interpretation
Retroactive – because there is a change in statutory interpretation
18 USC § 1346
Congress wrote a new statute in response to McNally
“Scheme or artifice to defraud” includes the scheme to defraud another of the intangible rights to honest services
Not retroactive – broadens illegality – ex post facto clause.
Three Categories of Intangible Rights Cases:
Public Cases – Officials fail to disclose information and receive money
Ex: official has a persona stake in a decision and doesn’t disclose this conflict. The citizens are deprived on honest services
Election Fraud Cases
Private Cases – Commercial Entities
Ex: kickback cases – not a lie – but a failure to disclose – company looses right to bargain.
ud Today – must find loss of honest services or property
Carpenter v. US
Reporter for Wall Street Journal gave information to others who traded on it.
D omitted to disclose
Duty – employee relationship with Journal
Victim – Journal – didn’t lose money but lost intellectual property
D had a duty to keep information confidential
Confidential business information is property – even when no loss of money is attributed to it.
Cleveland v. US
D lied in applications to state to receive license for gambling machines.
Court: licenses aren’t property
Federal government can’t prosecute something that falls in the scope of the state police powers.
US v. Walters
Property has to be deprived from the actual victims.
Use of the Mails:
Each piece of mail is a separate count
No matter how many counts, they are grouped and combined for sentencing purposes
Stacking – is permitted regardless of severity, size, duration, or complexity of the scheme.
RICO – must have two counts of mail fraud to make the charge accessible – one scheme but two mailings.
Schmuck v. US
The use of mails need not be an essential element in the scheme or step in the plot.
A mailing that is incident to an essential part of the scheme satisfies the mailing element.
Was the mailing conceived by the perpetrator as part of the scheme?
A mailing that is incident to the essential part of the scheme is sufficient.
US v. Maze
Mailings were not in furtherance of the underlying crime
D’s scheme had reached fruition when the mails were