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Monday, May 15th, 2023

Supreme Court Reverses Two Second Circuit Fraud Decisions

On May 11, 2023, the Supreme Court decided Ciminelli v. United States, 21-1158 and Percoco v. United States, No. 21-1158, reversing the Second Circuit in two fraud decisions  resulting from the multi-defendant trial of alleged corruption surrounding the Cuomo administration. The Supreme Court continues its curtailment of amorphous theories of federal fraud to prosecute government corruption cases.

In Ciminelli, the Supreme Court rejected the Second Circuit’s “right to control” theory of  federal fraud, in which “property” under the fraud statutes “includes intangible interests such as the right to control the use of one’s assets.” Under this theory, Ciminelli was convicted of wire fraud for a bid-rigging scheme on the theory that he deprived the victim of “potentially valuable economic information” “necessary to make discretionary economic decisions.” Op. at 1-4. The Court reversed his conviction.

The Supreme Court reiterated the rule of Cleveland v. United States, 531 U.S. …

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Categories: honest services fraud, property, wire fraud

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Monday, April 24th, 2023

Appellant’s submission of (three) “forged letters” of support, to the sentencing court, results in a 5-level increase in offense level: a two level upward adjustment for obstruction of justice (U.S.S.G. § 3C1.1) and the denial of a 3-level reduction for acceptance of responsibility (id. § 3E1.1). United States v. Strange, No. 21-2923, __ F.4th ____ (2d Cir. Apr. 17, 2023) (C.J.J.’s Pooler, Wesley, and Menashi).

Background

Appellant worked for a company that (generously) matched the charitable donations of its employees “up to $25,000 in donations per employee annually.” Opinion (“Op”) at 2. From 2015 to 2019, Appellant he “carried out a scheme to defraud” by “submitt[ing] fake documentation purporting to show that he, as well as some of his coworkers, had made significant charitable donations to an entity that Strange himself controlled.” Op at 2-3. The coworkers “had no knowledge of the submissions.” Op at 3. Appellant received about $600,000 from the company’s matching program, which he used “for personal expenses.” Id.

Appellant ultimately pleaded guilty to one count of wire fraud (18 U.S.C. § 1343). And his initial Guidelines range was “33 to 41 months incarceration.” Op at 3.

But a few days before sentencing, he submitted three letters “each encouraging the imposition of a probationary sentence rather than imprisonment.”Op at 3. The government …

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Categories: acceptance of responsibility, obstruction of justice, wire fraud

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Categories: acceptance of responsibility, obstruction of justice, wire fraud

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Monday, May 11th, 2020

Unanimous Supreme Court Tosses Bridgegate Conviction

Kelly v. United States concerns New Jersey’s well-known Bridgegate scandal, where officials with ties to Gov. Chris Christie decided to punish the residents of Ft. Lee because their mayor would not endorse Christie for reelection in 2013.  So, beginning on the first day of school, and under the guise of a traffic study, the defendants arranged for the three toll lanes of the George Washington Bridge usually reserved for Ft. Lee traffic to be reduced to one.  This created a traffic armageddon in Ft. Lee, jeopardizing community safety.

The defendants were fired, federally indicted, and convicted of crimes involving wire fraud and federal program fraud.  The convictions were affirmed by the Third Circuit.

On May 8, the Supreme Court unanimously reversed the convictions in an opinion by Justice Kagan.  The Court agreed that corruption and abuse of power occurred in this case, but “not every corrupt act by state or …

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Categories: fraud, wire fraud

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