In the

United States Court of Appeals

For the Seventh Circuit

No. 06-2883

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

JACK HARGROVE,

Defendant-Appellant.

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 03 CR 779—James B. Moran, Judge.

ARGUED OCTOBER 20, 2008—DECIDED AUGUST 26, 2009

Before BAUER, KANNE and WILLIAMS, Circuit Judges.

BAUER, Circuit Judge. Jack Hargrove was charged with

seven counts of mail and wire fraud in violation of

18 U.S.C. §§ 1341 and 1343; a single count of conspiracy

to commit mail fraud in violation of 18 U.S.C. § 371;

three counts of filing false tax returns in violation of

26 U.S.C. § 7206; and a single count of income tax evasion

in violation of 26 U.S.C. § 7201. Before trial, Hargrove

moved to dismiss the mail fraud charges on the ground
2 No. 06-2883

that the honest-services provision of the mail fraud

statute, 18 U.S.C. § 1346, is unconstitutionally vague. The

district court denied the motion and the case proceeded

to trial. Hargrove was convicted of all charges except

income tax evasion and one count of filing false tax

returns, on which he was acquitted. On appeal, Hargrove

renews his challenge to the constitutionality of the

mail fraud statute; we affirm.

I. BACKGROUND

Hargrove and Laurence Capriotti were co-owners of

Intercounty Title Company of Illinois (“Intercounty”), a

Chicago-based title insurance and escrow agent. The

company sold title insurance policies issued by Stewart

Title Guaranty Company.

By the late 1980s, Intercounty was running an annual

deficit in the millions as the result of a price war in the

title insurance market. To cover its losses, Intercounty

invested in junk bonds in the hopes that the bond yield

would outperform their real estate obligations. The plan

backfired, and Intercounty got itself into a hole from

which it never recovered.

Over a ten-year period beginning in 1990, Hargrove and

other executives at Intercounty engineered numerous

fraudulent schemes under which the title company’s

deficits were covered by thefts from its escrow account.

In total, the fraudulent practices robbed Intercounty of

more than $60 million.

Before trial and again at the close of evidence, Hargrove

challenged the mail fraud charge on the basis that
No. 06-2883 3

18 U.S.C. § 1346 was unconstitutional on its face and as

applied. Hargrove argued that the statute is void for its

vagueness because it fails to provide adequate notice of

what conduct is proscribed. The district court rejected

Hargrove’s challenges. The jury was allowed to consider whether Hargrove had committed mail fraud; it

determined he had and returned a conviction. Hargrove

appealed.

II. DISCUSSION

On appeal, Hargrove initially raised two arguments,

but he has since withdrawn one. In his brief, Hargrove

raised an ineffective assistance of counsel claim, contending that his primary trial attorney suffered from

either a potential or actual conflict of interest. However,

at oral argument, Hargrove requested to withdraw this

claim. As he correctly noted, claims of ineffective assistance of counsel are disfavored on direct appeal because

the factual foundation for such claims is often undeveloped. Hargrove requested the opportunity to build a

more complete record for his claim and we granted

his request to do so.

Hargrove’s remaining claim is a challenge to the constitutionality of the mail fraud statute under which he

was convicted. He contends that 18 U.S.C. § 1346 is void

for vagueness because it does not define the criminal

offense with sufficient definiteness such that ordinary

people can understand what conduct is prohibited and,

moreover, it encourages arbitrary and discriminatory

enforcement. According to Hargrove, he could not have
4 No. 06-2883

known that the conduct underlying his convictions

could be considered to have deprived another of the

“intangible right of honest services” under § 1346.

The constitutionality of a statute is an issue of law

which we review de novo. United States v. Olofson, 563

F.3d 652, 659 (7th Cir. 2009). As Hargrove acknowledges,

this Court has soundly rejected the claim that the mail

fraud statute, as applied to an intangible-rights theory,

is void for vagueness. United States v. Hausman, 345 F.3d

952, 958 (7th Cir. 2003); United States v. Warner, 498 F.3d

666, 697 (7th Cir. 2007). In Hargrove’s brief, he argues

that the issue may be ripe for reconsideration in light of

United States v. Thompson, 484 F.3d 877 (7th Cir. 2007).

However, he fails to posit any reason why Thompson

conceivably could undermine Hausman. Thompson did

nothing to disturb the central holding of Hausman,

which is that the mail and wire fraud statutes, §§ 1341,

1343 and 1346, are not unconstitutionally vague, as

applied under the intangible-rights theory.

At oral argument, Hargrove informed this Court that

he has raised the claim solely for the purposes of preserving the issue in the event that the Supreme Court

chooses to consider it at some future date. Fair enough.

For the foregoing reasons, we AFFIRM the judgment of

the district court.

8-26-09