Opinion ID: 3001508
Heading Depth: 3
Heading Rank: 2

Heading: Traditional mail fraud

Text: In addition to challenging the government’s theory of honest services mail fraud, the defendants attack the alternate theory that they committed what might be called traditional mail fraud. We review de novo their contention that the indictment insufficiently alleged a deprivation of money or property. See United States v. Moore, 446 F.3d 671, 676 (7th Cir. 2006). By setting up a false hiring bureaucracy the defendants arguably cheated the city out of hundreds of millions of dollars. The defendants argue that since the city would have filled these jobs and paid these salaries anyway, it has not suffered a loss. But we rejected this argument in United States v. Leahy, 464 F.3d 773, 787-89 (7th Cir. 2006), in which we upheld the conviction of a Chicagoan who obtained millions of dollars in city contracts by falsely certifying his businesses as minority-owned enterprises. We were unpersuaded by his contention that since the city would have awarded the contracts to someone, no harm was done: the “object was money, plain and Nos. 06-4251, 06-4252, 06-4253 & 06-4254 19 simple, taken under false pretenses from the city in its role as a purchaser of services.” Id. at 788; see also Hausmann, 345 F.3d at 957 (the lawyer who referred clients to a chiropractor buddy in return for kickbacks “deprived his clients of their right to know the truth about his compensation”); Welch, 327 F.3d at 1108; Bush, 522 F.2d at 648. In Leahy the city paid for, and was cheated out of, minority-owned enterprises, and here the city paid for, and was cheated out of, qualified civil servants. Jobs are a lot like contracts. Neither is a bag full of money but both are immensely valuable: a contract is a promise to pay for services rendered, while a job is the exchange of labor for a paycheck. Hence just as Leahy held that fraudulently obtained contracts are property, courts have found that salaries fraudulently obtained, United States v. Doherty, 867 F.2d 47, 56, 60 (1st Cir. 1989) (Breyer, J.), and job opportunities fraudulently denied, United States v. Douglas, 398 F.3d 407, 417-18 (6th Cir. 2005); United States v. Granberry, 908 F.2d 278, 280 (8th Cir. 1990), represent property for purposes of mail fraud. The defendants argue that the right to give out jobs is a mere regulatory interest of the kind that Cleveland v. United States, 531 U.S. 12, 20-21 (2000), said cannot give rise to a property right. But the Court in Cleveland held that a video poker license granted by the state is not property, and we think the jobs at issue here are much closer to contracts than poker licenses. The defendants also point to United States v. Walters, 997 F.2d 1219 (7th Cir. 1993), which they say counsels that if the money or property doesn’t go to the defendants, it doesn’t amount to mail fraud. In Walters, we reversed the conviction of a sports agent who signed college athletes, in contravention of NCAA rules. The theory of 20 Nos. 06-4251, 06-4252, 06-4253 & 06-4254 prosecution for mail fraud was that since the agent caused the players to become ineligible (college athletes aren’t allowed to have agents), he committed mail fraud every time the universities subsequently sent scholarship checks to the athletes by mail. We stated that the universities “were not out of pocket to Walters; he planned to profit by taking a percentage of the players’ professional incomes, not of their scholarships.” Id. at 1224. But this was not a requirement that the defendant receive the money or property, but rather a way of illustrating a deeper problem with the case. The scholarship money that the university sent the athletes was incidental, rather than the target of the scheme. See id. at 1224-25 (mail fraud statute punishes “schemes to get money or property by fraud rather than methods of doing business that incidentally cause losses”). Here, however, getting the city to award jobs to political workers and cronies was the very object of the defendants’ scheme. In sum, we hold that jobs are property for purposes of mail fraud, and that the indictment sufficiently alleged a deprivation of property.