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Friday, 24 May 2019 09:31

What is honest services fraud?

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Prosecutions of college admissions activities involving celebrity children have focused attention on a surprising crime involving daily and arguably inappropriate conduct with private businesses and organizations. In many cases, federal fraud charges attorneys must deal with an unclear honest fraud services crime.

This offense is related to mail and wire fraud. It is defined as an intentional scheme to defraud including a material deception while using public or private mail carriers or interstate wires which resulted with the derivation of the intangible right to honest services.

Defining these criminal elements has been confusing. However, convictions can lead to imprisonment for up to 20 years.

Cases may include conduct that should be resolved in civil courts or employment actions or other private means. These included taking a standardized test for another student, violating procedures and rules contained in an employee manual, employees accepting gratuities from suppliers selling products to their employers, attorneys having a conflict of interest when representing clients and providing a friend with a copy of a magazine before its release to the distributor and not disclosing detailed expenditure information to an employer.

In one Wisconsin case, an employee was prosecuted under this law for awarding a travel agency contract to the lowest bidder because the prosecutor charged that this conduct violated the state's administrative code. However, this conviction was ultimately reversed by an appeals court.

The law's ambiguity have led to inconsistent court decisions. Some federal courts require charges under related state laws before there can be a prosecution under this federal law. Courts disagree on whether a fraudulent intent is needed instead of an intent to obtain personal gain. Courts also split on whether actual harm or that a misrepresentation must be material.

The lack of a uniform national standard, according to defense attorneys, violated due process rights and is unconstitutionally vague. Critics argue that a prosecutor's views on morality determine whether charges are filed across the county.

A person being investigated for honest services fraud should seek legal representation. An attorney can help protect their rights and mount a defense in these cases.

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