Monday, April 21, 2008

Split Noted: What Principles Should Limit the Boundaries of Public Honest Services Fraud?

Per United States v. Sorich, 2008 WL 1723670, *6-*9 (7th Cir. Apr. 15, 2008)

The facts of this case, which arises from the city of Chicago’s perennially troubled civil-service hiring practices, are irrelevant to the split at issue. The mail fraud statute criminalizes the use of the mail in furtherance of a scheme or artifice to defraud another of various interests, including, in relevant part, “of the intangible right of honest services.” 18 U.S.C. § 1346. This statute, however, does not limit the range of possible meanings of honest services, raising constitutional vagueness concerns.

No court has invalidated the statute for want of definition. Instead, the circuits have recognized the problem and offered their own limiting understandings to apply in public-fraud cases. The CAs 3,5 require a violation of state law. The CA 1 requires more than a mere violation of state ethics law. The CA 7 has required ‘private gain’ in order to find an instance of honest-services fraud. It continues to apply this understanding in the present case, though recognizing that the CA 10 has expressed a legitimate disagreement. Several additional splits have emerged in the private honest-services fraud context. See generally 172 A.L.R. Fed. 109.

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