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Skilling Added to the Mix of Honest Services Fraud Cases to Be Heard by the Supreme Court

Kish Law LLC

Earlier this week, the Supreme Court granted certiorari in another honest services fraud case: Skilling v. United States. Jeffrey Skilling, of Enron notoriety, is challenging his conviction for honest services fraud and the venue of his trial.

The honest services fraud statute, 18 U.S.C. § 1346, expands the definition of a scheme or artifice to defraud under the mail and wire fraud statutes to encompass schemes that “deprive another of the intangible right of honest services.” This federal criminal case will address whether the statute requires the government to prove that the defendant’s conduct was intended to achieve “private gain” rather than to advance the employer’s interests, and, if not, whether the statute is unconstitutionally vague. A second issue in the case involves when a presumption of jury prejudice arises.

We have previously discussed two other honest services fraud cases, Black v. United States and Weyhrauch v. United States, that the Court will also hear this term. Our discussion of Black is here and of Weyhrauch is here.
The differences between the three cases are:
Black: A corporate executive’s use of a fraudulent scheme to increase his own compensation that caused no harm to the corporation.
Skilling: A corporate executive’s use of a fraudulent scheme with no personal gain or benefit to the corporation.
Weyhrauch: A state legislator’s failure to disclose conflict of interest where state law does not require such disclosure.
Although these three cases have not been consolidated, we hope that the Court takes a comprehensive approach and straightens out the myriad issues plaguing interpretation of this law.

In its amicus brief in support of Skilling’s petition for a writ of certiorari, the National Association of Criminal Defense Lawyers (NACDL) encouraged the Court to resolve three principal issues: whether courts have the power to engraft limiting principles on the vague language of § 1346; if courts do not have that power, whether § 1346 is void for vagueness; and if they do, the content of those limiting principles. In addition to addressing these three issues, we hope that the Court takes the opportunity to create some meaningful and clear distinctions between public sector and private sector honest services fraud.

For an interesting analysis of the potential outcomes from these cases, see this post at the SCOTUSblog.
For more detail on the chaos plaguing interpretation of this statute, see this New York Times article. (A favorite tidbit of ours quotes Justice Scalia carrying it to its logical extreme, saying, “it would seemingly cover a salaried employee’s phoning in sick to go to a ballgame.”)
The briefs filed in Skilling are available at the SCOTUSblog.

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