harge. See United States v. Regent Office Supply Co., 421 F.2d 1174, 1182 (2d Cir. 1970). More generally, a new vein of “fraudulent inducement” wire fraud prosecutions would be swimming against the tide of numerous Supreme Court cases, going back to the late 1980s, that have reined in overly-expansive federal property fraud prosecutions.Abdelaziz BackgroundIn January 2020, the government filed a fourth superseding indictment in the U.S. District Court for the District of Massachusetts against two “Varsity Blues” parents, Gamal Abdelaziz and John Wilson, who had hired Rick Singer, a college admissions consultant, allegedly to secure their children’s admissions as athletic recruits to various universities, including Harvard, Stanford and the University of Southern California, through Singer’s so-called “side door.” Abdelaziz and Wilson were charged, along with 13 other parents and Singer, with one count of conspiracy to commit mail and wire fraud and honest services mail and wire fraud (18 U.S.C. §§ 1341, 1343, 1346, 1349), and 12 other counts of related offenses including substantive mail and wire fraud (18 U.S.C. §§ 1341, 1343). The government alleged that the defendants conspired to commit two types of mail and wire fraud: honest services fraud, by using their payments to deprive the universities of the honest services of their employees, and property fraud, by depriving the universities of property in the form of admission slots.In the fall of 2021, a jury convicted Abdelaziz and Wilson on all counts. They subsequently appealed their convictions.Abdelaziz 1st Circuit DecisionOn May 10, 2023, in an opinion authored by Judge Sandra L. Lynch, a three-judge panel of the 1st Circuit unanimously vacated Abdelaziz’s and Wilson’s convictions of mail and wire fraud and the related conspiracy convictions.Significantly, the 1st Circuit found that the government’s honest services fraud theory under 18 U.S.C. § 1346 failed as a matter of law. Under that theory, the government was required to p

pting into the headlines in 2019, the Varsity Blues college admissions scandal yielded bribery charges against more than 50 individuals—including numerous affluent and powerful parents seeking to obtain admission for their children to some of the country’s most prestigious institutions, including Harvard, Stanford, and USC—as well as multiple books and a Netflix movie.While many of the parents elected to plead guilty, Gamal Abdelaziz and John Wilson went to trial. Charged with conspiracy to commit federal programs bribery and conspiracy to commit mail and wire fraud on both honest services fraud and property fraud theories, the jury convicted them on both counts. Defendant Wilson was also charged with, and convicted of, substantive counts of federal programs bribery, and with filing a false tax return.1 Last week, the U.S. Court of Appeals for the First Circuit threw out their bribery convictions in their entirety.2The First Circuit’s DecisionThe Court overturned the convictions under 18 U.S.C. §§ 1341, 1343, and 1346 for honest services fraud and property fraud, and for conspiracy under 18 U.S.C. § 666, on the following grounds:The Court vacated the honest services fraud theory convictions under § 1346, finding that its requirements cannot be met where a bribe is paid to the party purportedly deprived of honest services in the alleged bribery scheme.3 In reaching this determination, the Court described the history of the mail and wire fraud statutes and considered the defendants’ argument that the conduct charged did not involve the core honest services doctrine described in Skilling v. United States, 561 U.S. 358 (2010), which “involved fraudulent schemes to deprive another of honest services through bribes or kickbacks supplied by a third party who had not been deceived.”4 The Court also emphasized the narrow meaning of bribery for purposes of honest services fraud embodied in Skilling, rejecting the government’s attempt to incorporate into the statute broader language from § 666

In this case, the Circuit expands this theory beyond public officials to private citizens who exert some level of control over government decisions.To get there, the Court relied on Margiotta, a Second Circuit case from almost forty years ago, decided under a different statutory framework. In that case the Circuit held (over a forceful dissent by the late Judge Ralph K. Winter) that honest services fraud, under 18 U.S.C. § 1341, did not require a formal employment contract between the defendant and the government, so long as the defendant exercised “domination” over government. In deciding Margiotta, the Circuit relied not on the statutory language of section 1341 or on federal case law, but rather on agency principles of New York common law.

civil forfeiture and civil penalty matters arising under laws relating to liquor, narcotics, gambling, and firearms);Criminal proceedings arising under the internal revenue laws, except proceedings pertaining to misconduct of Internal Revenue Service personnel, to taxes on liquor, narcotics, firearms, coin-operated gambling and amusement machines, and to wagering, forcible rescue of seized property, corrupt or forcible interference with an officer or employee acting under the Internal Revenue laws, unauthorized disclosure of information, and counterfeiting, mutilation, removal, or reuse of stamps;Enforcement of tax liens, mandamus, injunctions, and other special actions or general matters arising in connection with internal revenue matters;Appellate proceedings in connection with civil and criminal cases enumerated in connection with (1) through (3) above and petitions to review decisions of the United States Tax Court.Mail and Wire Fraud. The federal crime of mail fraud is located in 18 U.S.C. § 1341. Generally, there are two elements in a mail fraud case: (1) having devised or intending to devise a scheme to defraud (or to perform specified fraudulent acts) and (2) use of the mail for purposes of executing, or attempting to execute, the scheme (or specified fraudulent acts).

If not, mark holders may be barred from recovering lost profits or other damages under 15 U.S.C. § 1111, even though the licensee may still be liable under 18 U.S.C. § 2320.VI. Other Charges to ConsiderIn the alternative, prosecutors may also consider the following charges as well:Conspiracy and aiding-and-abetting under 18 U.S.C. §§ 2, 371;Mail and wire fraud under 18 U.S.C. §§ 1341, 1343;Copyright infringement under 17 U.S.C. § 506 and 18 U.S.C. § 2319;Trafficking in counterfeit labels, illicit labels, or counterfeit documentation or packaging under 18 U.S.C. § 2318;Trafficking in misbranded food, drugs, and cosmetics under 21 U.S.C. §§ 331(a), 333, 343, 352, 362, and 841(a)(2); andTampering with consumer products under 18 U.S.C. § 1365.Theft of Commercial Trade SecretsI. GenerallyThe Economic Espionage Act (EEA), codified in 18 U.S.C. § 1831-1839, makes the theft or trafficking in trade secrets for foreign governments, instrumentalities, or agents a criminal act.

While these circumstances are unusual, those accused of making false statements to the government now have a better basis to argue that the government has failed to show that the alleged false statements were material. Materiality is a common element in many types of false statement charges, including 18 U.S.C. § 1001 (false statements to the government), 18 U.S.C. § 1341 (mail fraud), 18 U.S.C. § 1343 (wire fraud), 18 U.S.C. § 1344 (bank fraud), and more. Materiality also is an element of the False Claims Act (FCA).

While these circumstances are unusual, those accused of making false statements to the government now have a better basis to argue that the government has failed to show that the alleged false statements were material. Materiality is a common element in many types of false statement charges, including 18 U.S.C. § 1001 (false statements to the government), 18 U.S.C. § 1341 (mail fraud), 18 U.S.C. § 1343 (wire fraud), 18 U.S.C. § 1344 (bank fraud), and more. Materiality also is an element of the False Claims Act (FCA).

And using the mail or interstate electronic communications to obtain a loan by means of false or fraudulent pretenses could violate the federal mail and wire fraud statutes. 18 U.S.C. §§ 1341, 1343.Prosecutors also could pursue civil actions against alleged fraudsters. The False Claims Act allows the government to recover damages from any person who presents a false claim for payment by the government, or who makes a false statement in order to avoid or decrease an obligation to the government.

The government presented no evidence that any of the Key Individuals were involved in the negotiation or execution of these contracts, nor did it present evidence that any of them communicated with either GSE regarding the loans sold; in fact, Defendants elicited testimony from GSE witnesses to the contrary. The provision of FIRREA under which Defendants were found liable provides for civil penalties against "[w]hoever" violates or conspires to violate, inter alia, the federal mail or wire fraud statutes, see 18 U.S.C. §§ 1341, 1343, in a manner "affecting a federally insured financial institution." 12 U.S.C. § 1833a(a), (c)(2).

Hawkins and Racasi were employed as analysts on the staff of a member of the Cook County Board of Review when they accepted money from a undercover agent to arrange for lower assessed valuation for property owners. A jury found both men guilty of theft or bribery concerning programs receiving federal funds (18 U.S.C. § 666) and mail fraud (18 U.S.C. § 1341). The Court rejected their arguments against convictions for the § 666 counts but reversed the § 1341 convictions because treating a gratuity as a bribe is not consistent with the Supreme Court’s holding in Skilling because bribery requires a quid pro quo, planned or realized, not just the receipt of money.