Honest services fraud is “a scheme or artifice to deprive another person of the intangible right to honest services,” as defined in the related federal statute. it is an extension of postal or electronic fraud. As there is no clear definition of “honest services”, the courts reserve the right to define and limit the statute. the original intent behind the federal statute was to decrease government corruption. however, the language of the law does not set a limit on who can be charged with honest services fraud.
Honest services fraud generally requires three people.
- the person who pays a bribe
- someone who accepts a bribe
- the person who is harmed by a bribe
For example, consider a college admissions scandal. someone’s parents offer a college football coach a bribe for admission to that college. the coach accepts the bribe and fraudulently promotes the student’s admission, despite having no athletic ability. the coach does the college a disservice, as they have violated their duty to the college to find good athletes.
honest services fraud according to the supreme court
mcnally v. United States (1987), the Supreme Court held that honest services fraud only applied to “tangible property.” however, congress modified the statute to include “intangible property” as well. after this decision, prosecutors used the honest services fraud more frequently.
later in skilling v. united states (2010), the court held that to be honest services fraud, there must be a bribe or kickback.
what are intangible rights?
If someone violates a fiduciary duty, they have legally or ethically violated a trust agreement between themselves and the victim. to violate a fiduciary duty is to deprive someone of their intangible rights, that is, rights that lack physical substance. for example, these rights include permissions, licenses, intellectual property, patents, or even money.
Honest services and intangible rights do not have concrete definitions. there is no limitation on the scope of the related statute, and no provision for due process. Because of this, the language of the statute can be used to prosecute a multitude of different people for different reasons.
what should you do if you are accused of honest services fraud?
Prosecutors treat this similarly to mail fraud or wire fraud. To prove someone’s guilt, a prosecutor must prove the following.
- the person implemented “a scheme or artifice intended to deprive another of the intangible right of honest services.”
- the scheme could have caused significant monetary harm to another person. the damage need not have occurred, but it must have been possible.
- the scheme involved the use of mail or wire transfers.
Because these cases are so broad, complicated, and vague, we highly recommend that an experienced criminal defense attorney help you with your case. At Weeden Law, we handle acts that constitute white collar crimes in Colorado with the same seriousness as any other case. we know he will not take these charges lightly, and neither do we.
what are the penalties for honest services fraud?
Honest services fraud is not necessarily one of the most common white-collar crimes in Colorado, but it is still very evident. Because honest services fraud is a serious crime, the penalties can be very serious. the maximum penalties for fraud not involving financial institutions are up to 20 years in prison, along with fines of up to $250,000. for cases involving financial institutions, the maximum penalties are up to 30 years in prison.
each separate transaction is a separate offence. Specifically, penalties apply to every instance of fraud, every related email, every letter, and every phone call. Because of this, in addition to the higher sentence assignment for honest services fraud compared to mail fraud, prosecutors will charge honest services fraud more often than traditional mail fraud. theoretically, he could face more than 100 years in prison.
contact the denver white collar crime defense attorneys at weeden law today
Since 2005, Denver criminal defense attorney Jeff Weeden has fought for the rights of Colorado citizens. His tenacity and creative defense strategies allow him to help countless clients charged with white collar crimes in Colorado.
Contact our office today for a free consultation. The sooner you contact Weeden Law, the sooner we can fight for you and build your case. Call us at (720) 307-4330 to discuss your options and get the strongest Colorado criminal defense possible against white collar crime charges.