In The Courts

One victim filed a writ of mandamus, asserting that the CVRA granted him the right to speak in open court. The district court has held in response that the CVRA gives only the right to be “reasonably heard,” and that those words vest the sentencing judge with discretion to limit victims to written statements or to rely on their prior statements. While agreeing that both interpretations are plausible, the Ninth Circuit held that the legislative history of the CVRA reveals that Congress intended to give victims the right to speak at sentencing hearings and that speaking at a co-defendant's hearing does not vindicate that right. Judge Freeman wrote dubitante, concurring in the result on the facts presented but doubting whether the CVRA grants an absolute right to speak at sentencing regardless of the circumstances.

Accepting a Bribe Requires an Intent to Be Influenced

In United States v. Ford, 2006 WL 137118 (2d Cir. Jan. 19, 2006), the Second Circuit held that merely accepting something of value knowing that the giver is intending the gift to influence does not establish the crime of accepting a bribe. The prosecution must show that the recipient intended to be influenced by the gift.

The Defendant was an elected union official who was charged with accepting free support for her election campaign and a post-election cash retainer. The court held that although the evidence presented in the case was sufficient to sustain a conviction, the jury instructions were flawed. The jury was charged that “[a] person acts corruptly when the person acts with the understanding that something of value is to be offered or given to influence her in connection with her organizational duties.” The instructions also indicated that “intending to be influenced” describes “the intention conveyed by the recipient.” The court held that while the intention of the giver and what is conveyed by the recipient are powerful indicators of the recipient's intent, neither is sufficient to establish the crime. Rather, accepting a bribe requires that the jury find that the recipient actually intended to be influenced. Because the jury instructions did not convey the intent requirement properly, the conviction was vacated.

Deceiving Issuer of Security Sufficient to Sustain Forgery Conviction in Sixth Circuit

In United States v. Blood, 2006 WL 162830 (6th Cir. Jan. 24, 2006), the Sixth Circuit held, in a case of first impression in the Circuit, that deceiving only the purported issuer of a security is sufficient to sustain a conviction for counterfeit and forgery under 18 U.S.C. ' 513(a).

Defendants' scheme was to present approximately $2 million in forged cashier's checks and money orders to the purported issuer of the securities for payment. Defendants argued that the statute's language, which requires an “intent to deceive another person, organization, or government” exempted forgeries that only targeted the issuer of the security because the issuer was not “another” entity. The court held that “another” did not refer to an entity distinct from the issuer, but rather an entity distinct from the forger and upheld the convictions.

Seventh Circuit Upholds Honest-Services Fraud As Predicate Offense for Money Laundering

In United States v. Boscarino, 2006 WL 287405 (7th Cir. Feb. 6, 2006), the Seventh Circuit held that a mail fraud that deprived a person of “honest services” could serve as a predicate offense for a money-laundering charge.

The fraudulent scheme at issue involved causing the City of Rosemont to overpay for insurance services, with part of that overpayment transferred to the Defendant as a kickback. The money laundering statute, 18 U.S.C. ' 1956, criminalizes engaging in financial transactions with the proceeds of certain predicate offenses including mail fraud. The mail fraud charge in the case relied on the scheme's use of the mail to deny the city honest services. The defense argued that only the proceeds of the predicate offense were subject to the money laundering laws and that because honest services are not “proceeds” the mail fraud count could not serve as the required predicate offense for the money laundering charge. The court agreed that honest services are not proceeds, but noted that the offense did yield proceeds in the form of kickbacks to the Defendant. The jury was entitled to find that the kick-back payments were the proceeds of the fraud, and the court upheld the conviction.

Bank Fraud Requires Evidence of Attempt to Cause a Loss By a Financial Institution

In United States v. Staples, 2006 WL 155251 (8th Cir. Jan. 23, 2006), the Eighth Circuit reversed the convictions of two defendants, holding that to be found guilty of bank fraud there must be evidence of a loss or an attempt to cause such a loss by a financial institution.

The defendants engaged in a scheme to defraud a title company. As part of the scheme, defendants deposited legitimate, albeit fraudulently obtained, checks in a bank. The court held that because there was no evidence that defendants intended to or in fact did defraud the bank, the mere fact that the scheme involved obtaining funds under the control of a bank was insufficient to sustain a conviction for bank fraud.

Ninth Circuit: Crime Victims' Rights Act Requires That Victims Be Given Opportunity to Speak At Sentencing

In Kenna v. United States District Court for the Central District of California, 05-73467 (9th Cir. Jan. 20, 2006), the Ninth Circuit held that it was error for the district court to refuse to allow the victims of a fraudulent scheme to speak at the perpetrator's sentencing hearing. Writing for the majority in the first circuit court case to interpret the Crime Victims' Rights Act (CVRA), 18 U.S.C. ' 3771, Judge Kozinski noted that although historically victims were treated like Victorian children — to be seen but not heard — the CVRA makes victims “independent participants in the criminal justice process.” The court issued a writ of mandamus directing the district court to hear petitioner's motion to reopen the hearing so that he may be heard.

The Defendant in the underlying case was the son in a father-and-son team that perpetrated a large-scale wire fraud involving purported investments in foreign currency. Scores of victims were identified in the case, with combined losses totaling nearly $100 million. More than 60 victims submitted victim-impact statements, and several spoke at the father's sentencing. At the son's sentencing, the district court denied the victims the opportunity to speak, explaining that it had heard from the victims at the father's hearing and that it believed there was nothing more of value to be added. The victims objected, asserting that there had been additional impacts on them in the 90 days since the father's hearing.

One victim filed a writ of mandamus, asserting that the CVRA granted him the right to speak in open court. The district court has held in response that the CVRA gives only the right to be “reasonably heard,” and that those words vest the sentencing judge with discretion to limit victims to written statements or to rely on their prior statements. While agreeing that both interpretations are plausible, the Ninth Circuit held that the legislative history of the CVRA reveals that Congress intended to give victims the right to speak at sentencing hearings and that speaking at a co-defendant's hearing does not vindicate that right. Judge Freeman wrote dubitante, concurring in the result on the facts presented but doubting whether the CVRA grants an absolute right to speak at sentencing regardless of the circumstances.

Accepting a Bribe Requires an Intent to Be Influenced

In United States v. Ford, 2006 WL 137118 (2d Cir. Jan. 19, 2006), the Second Circuit held that merely accepting something of value knowing that the giver is intending the gift to influence does not establish the crime of accepting a bribe. The prosecution must show that the recipient intended to be influenced by the gift.

The Defendant was an elected union official who was charged with accepting free support for her election campaign and a post-election cash retainer. The court held that although the evidence presented in the case was sufficient to sustain a conviction, the jury instructions were flawed. The jury was charged that “[a] person acts corruptly when the person acts with the understanding that something of value is to be offered or given to influence her in connection with her organizational duties.” The instructions also indicated that “intending to be influenced” describes “the intention conveyed by the recipient.” The court held that while the intention of the giver and what is conveyed by the recipient are powerful indicators of the recipient's intent, neither is sufficient to establish the crime. Rather, accepting a bribe requires that the jury find that the recipient actually intended to be influenced. Because the jury instructions did not convey the intent requirement properly, the conviction was vacated.

Deceiving Issuer of Security Sufficient to Sustain Forgery Conviction in Sixth Circuit

In United States v. Blood, 2006 WL 162830 (6th Cir. Jan. 24, 2006), the Sixth Circuit held, in a case of first impression in the Circuit, that deceiving only the purported issuer of a security is sufficient to sustain a conviction for counterfeit and forgery under 18 U.S.C. ' 513(a).

Defendants' scheme was to present approximately $2 million in forged cashier's checks and money orders to the purported issuer of the securities for payment. Defendants argued that the statute's language, which requires an “intent to deceive another person, organization, or government” exempted forgeries that only targeted the issuer of the security because the issuer was not “another” entity. The court held that “another” did not refer to an entity distinct from the issuer, but rather an entity distinct from the forger and upheld the convictions.

Seventh Circuit Upholds Honest-Services Fraud As Predicate Offense for Money Laundering

In United States v. Boscarino, 2006 WL 287405 (7th Cir. Feb. 6, 2006), the Seventh Circuit held that a mail fraud that deprived a person of “honest services” could serve as a predicate offense for a money-laundering charge.

The fraudulent scheme at issue involved causing the City of Rosemont to overpay for insurance services, with part of that overpayment transferred to the Defendant as a kickback. The money laundering statute, 18 U.S.C. ' 1956, criminalizes engaging in financial transactions with the proceeds of certain predicate offenses including mail fraud. The mail fraud charge in the case relied on the scheme's use of the mail to deny the city honest services. The defense argued that only the proceeds of the predicate offense were subject to the money laundering laws and that because honest services are not “proceeds” the mail fraud count could not serve as the required predicate offense for the money laundering charge. The court agreed that honest services are not proceeds, but noted that the offense did yield proceeds in the form of kickbacks to the Defendant. The jury was entitled to find that the kick-back payments were the proceeds of the fraud, and the court upheld the conviction.

Bank Fraud Requires Evidence of Attempt to Cause a Loss By a Financial Institution

In United States v. Staples, 2006 WL 155251 (8th Cir. Jan. 23, 2006), the Eighth Circuit reversed the convictions of two defendants, holding that to be found guilty of bank fraud there must be evidence of a loss or an attempt to cause such a loss by a financial institution.

The defendants engaged in a scheme to defraud a title company. As part of the scheme, defendants deposited legitimate, albeit fraudulently obtained, checks in a bank. The court held that because there was no evidence that defendants intended to or in fact did defraud the bank, the mere fact that the scheme involved obtaining funds under the control of a bank was insufficient to sustain a conviction for bank fraud.