When the FBI Comes Calling…®
MAIL FRAUD (Continued)
Case Law Interpreting Section 1341
As is plainly obvious, section 1341 is quite confusing. Thankfully, case law has narrowed the elements of what constitutes the elements of a violation of section 1341. Generally, the elements of an offense of mail fraud under section 1341 are a scheme or artifice to defraud, combined with a mailing for the purpose of executing the scheme. VanDenBroeck v. CommonPoint Mortg. Co., 210 F.3d 696, 701 (6th Cir. 2000). Furthermore, just like the wire fraud statute, where materiality is not facially a required element, the Supreme Court has determined that materiality is indeed a requirement for conviction. A matter is material if "a reasonable man would attach importance to its existence or nonexistence" in determining a course of action, or "the maker of the representation knows or has reason to know that its recipient regards or is likely to regard the matter as important" in determining a course of action, even though a reasonable man might not. Neder v. United States, 527 U.S. 1, 22 n.5 (1999) (quoting RESTATEMENT (SECOND) OF TORTS § 538 (1976)). The court explains that based "solely on a 'natural reading of the full text,' materiality [is] not an element of the fraud statutes." Id. at 21 (1999) (internal citations omitted). However, because a statute is presumed to incorporate common-law understanding of an issue when it is codified, and fraud required a material misrepresentation in the common law, "under the rule that Congress intends to incorporate the well-settled meaning of the common-law terms it uses, [the Court] cannot infer from the absence of an express reference to materiality that Congress intended to drop that element from the fraud statutes." Id. at 21-23. Therefore, materiality is a requirement.
Furthermore, a number of courts require a specific intent to defraud. See United States v. Tarallo, 380 F.3d 1174, 1181 (9th Cir. 2004). The government, however, does not need to show intent to cause harm or injury; all that is required is simply an intent to defraud, which the government can establish in a number of manners. See United States v. Welch, 327 F.3d 1081, 1105 (10th Cir. 2003). Because direct proof of fraudulent intent is often unavailable, "courts have long permitted fact finders to rely on a variety of circumstantial evidence, including evidence of actual or contemplated harm, to infer such intent." Id. Reckless indifference to the truth of a representation may establish the intent to defraud. Id.
United States v. Frank, 354 F.3d 910 (8th Cir. 2004).
One of the defendants in this case were convicted on twenty-two counts of mail fraud. The court gives a slightly different, but still acceptable, statement of the required elements for conviction under section 1341. "These convictions require proof that [the defendant] voluntarily and intentionally devised or participated in a scheme to defraud the United States by concealing his assets, that he entered into the scheme with the intent to defraud, that he knew it was reasonably foreseeable that the mails would be used, and that he used the mails in furtherance of the scheme." Frank at 916. Seventeen of the defendant's mail fraud counts charged him with executing a scheme to defraud the United States, inhibiting its ability to collect on a financial judgment against the defendant, by mailing the probation office financial reports which did not accurately reflect his assets or income. Id. at 917. The defendant reported "virtually no assets" but the government had evidence that he actually had significant assets and income. Id. Because he used the mails to execute this scheme, the evidence "was sufficient to sustain [the defendant's] conviction" on those counts. Id. Three additional counts of mail fraud charged the defendant with mail fraud cased upon letters he sent to the United States Attorney's Office in which he asserted that a man, who allegedly owed the defendant a debt, did not have the money to pay the defendant. Id. However, the government introduced evidence that the defendant actually purchased vehicles with the money he allegedly lent the other man. Id. Again, by using the mails to defraud the United States-in this instance, the government, based on the letters sent by the defendant, "pursued the wrong avenue of collection and was impeded in its ability to garnish his income"-the court determined that the evidence showed mail fraud. Id. The final two mail fraud counts relate to the use of the mail to transfer titles for two vehicles which the defendant acquired under fraudulent pretenses. The court found that the elements of wire fraud had been met in these instances as well. Id. at 917-18.