Honest services fraud is “a scheme or artifice to deprive another of the intangible right of honest services,” as defined in the related federal statute. It is an extension of mail or wire 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 lessen government corruption. However, the law’s language does not place a limit on who can be charged with honest services fraud.
Generally, honest services fraud requires three people.
- The person who pays a bribe
- Someone who accepts a bribe
- The person who is harmed by a bribe
For example, let’s consider a college admissions scandal. Someone’s parents offer a bribe to a college football coach for admission to that college. The coach accepts the bribe, and fraudulently promotes the student for admission, despite having no athletic ability. The coach harms the college, as they have violated their duty to the university 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 altered the statute to include “intangible property” as well. After this decision, prosecutors used honest services fraud more often.
Later, in Skilling v. United States (2010), the Court held that, in order to be honest services fraud, a bribe or kickback must be involved.
What are Intangible Rights?
If someone violates a fiduciary duty, they have legally or ethically breached a trusted agreement between themselves and the victim. To violate a fiduciary duty is to deprive someone of their intangible rights, meaning rights that lack physical substance. For example, these rights include permits, licenses, intellectual property, patents, or even money.
Honest services and intangible rights have no 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 charged with 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 put in place “a scheme or artifice intended to deprive another of the intangible right of honest services.”
- The scheme could have caused noticeable monetary harm to someone else. It is not necessary that harm did occur, but it must have been possible.
- The scheme involved the use of mails or wires.
Because these cases are so broad, complicated, and vague, we highly recommend an experienced criminal defense attorney to help with your case. At Weeden Law, we handle acts that constitute white collar crimes in Colorado as seriously as any other case. We know you won’t take these charges lightly, and neither will 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 apparent. Because honest services fraud is a felony, the penalties can be very serious. The maximum penalties for fraud that does not involve financial institutions are up to 20 years in prison, along with up to $250,000 in fines. For cases that do involve financial institutions, the maximum penalties are up to 30 years in prison.
Every separate transaction is a separate offense. Specifically, penalties apply to each instance of fraud, each related email, each letter, and each phone call. Because of this, plus the allowance of higher sentencing for honest services fraud compared to mail fraud, prosecutors will charge honest services fraud more often than traditional mail fraud. Theoretically, you might face over 100 years of prison time.
Contact Experienced Denver White Collar Crime Defense Attorneys at Weeden Law Today
Since 2005, Denver criminal defense attorney Jeff Weeden has fought for Colorado citizens’ rights. His tenacity and creative defense strategies allow him to help countless clients accused of white-collar crimes in Colorado.
Reach out to our office today for a free consultation. The sooner you contact Weeden Law, the sooner we can fight for you and build your case. Give us a call at (720) 307-4330 to discuss your options and get the strongest possible Colorado criminal defense against white-collar crime charges.