Document: 483 U.S. 350 107 S.Ct. 2875 97 L.Ed.2d 292 Charles J. McNALLY, Petitioner,v.UNITED STATES. James E. GRAY, Petitioner, v. UNITED Nos. 86-234, 86-286. Argued April 22, 1987. Decided June 24, Syllabus The federal mail fraud statute, 18 U.S.C. § 1341, prohibits the use of mails to execute "any scheme or artifice defraud, for obtaining money property by means false fraudulent pretenses, representations, promises." Petitioners Gray, a former Kentucky official, and McNally, private individual, along with one Howard Hunt, chairman Commonwealth's Democratic Party, were charged violating §1341 devising defraud citizens government their "intangible right" have affairs conducted honestly, obtain pretenses concealment material facts. After informing jury charges, District Court instructed that defendants' alleged could be made out either finding: (1) Hunt had de facto control over award workmen's compensation insurance contract; he obtained commission payments from company awarded this contract which mailed owned controlled petitioners, without disclosing his ownership interest commonwealth officials; petitioners aided in scheme; (2) Gray supervisory authority when received payments; did not disclose McNally abetted him. convicted Appeals affirmed, relying on line decisions holding 1341 proscribes schemes intangible rights honest impartial government. Held: charge permitted conviction conduct within reach 1341. Pp. 356-361. (a) language legislative history demonstrate it is limited scope protection rights, does extend right citizenry good argument that, because statutory phrases "to defraud" "for promises" appear disjunctive, they should construed independently so "a may include designed deprive parties persuasive. words commonly refer wronging dishonest methods, there nothing indicate Congress meant depart common understanding enacted its present form. Rather, statute was amended second phrase simply make clear reaches promises misrepresentations as future well other frauds involving property. 356-360. (b) A state officer violate if chooses an agency provide State's but specifies must share commissions another has hence profits commissions. Here, no required find Commonwealth itself defrauded any would paid lower premium secured better absence scheme. In fact, money. Nor convict deprived how spent. Indeed, some agency, asserted might otherwise payment Moreover, although Government relies part assertion representations contract, such finding. 360-361. 790 F.2d 1290 (CA 6 1986), reversed remanded. WHITE, J., delivered opinion Court, REHNQUIST, C.J., BRENNAN, MARSHALL, BLACKMUN, POWELL, SCALIA, JJ., joined. STEVENS, filed dissenting opinion, all Part IV O'CONNOR, joined, post, p. 362. Carter G. Phillips, Washington, D.C., petitioners. Donald B. Ayer, Sacramento, Cal., respondents. Justice WHITE Court. 1 This action involves prosecution petitioner public official Kentucky, violation 1341.1 prosecution's principal theory case, accepted courts below, petitioners' participation self-dealing patronage certain rights," honestly. We consider whether statute. 2 accept sake Government's view evidence, follows. third P. "Sonny" politically active Party during 1970's. Democrat Julian Carroll elected Governor 1974, given selecting agencies purchase policies. 1975, Wombwell Insurance Company Lexington, (Wombwell), since 1971 acted agent securing policy, agreed exchange continued relationship resulting excess $50,000 year specified question large companies coverage Commonwealth. 3 From 1975 1979, funneled $851,000 21 separate designated Hunt. Among recipients these Seton Investments, Inc. (Seton), nominally operated McNally. 4 served Secretary Public Protection Regulation 1976 1978 also Governor's Cabinet 1977 1979. Prior appointment, established sole purpose sharing distributed Wombwell. $200,000 between used benefit Pursuant Hunt's direction, Snodgrass Agency, turn gave 5 On account foregoing activities, pleaded guilty tax sentenced three years' imprisonment. count conspiracy seven counts fraud, six dismissed before trial.2 remaining based mailing check State. devised obtain, directly indirectly, things value facts.3 conspired through just described United States obstructing collection taxes. charges indictment,4 two sets findings: 1979; directed Seton, entity interest, persons whose actions deliberations been affected disclosure; them, appointed positions, regarding at time commissions; (the latter finding going only McNally's guilt). 7 both counts, affirmed convictions. (CA6 1986). affirming substantive conviction, court relied Courts See, e.g., Mandel, 591 1347 (CA4 1979), aff'd relevant part, 602 653 (en banc), cert. denied, 445 961, 100 1647, 64 236 (1980). Under cases, owes fiduciary duty public, misuse office gain fraud. Also, individual formal held others rely him " 'because special government' fact makes governmental decisions. F.2d, 1296 (quoting Margiotta, 688 108, 122 (CA2 1982), 461 913, 103 1891, 77 282 (1983)). "substantially participated exercised significant, exclusive, awarding monetary kick-backs Seton." 1296. 8 granted certiorari, 479 1005, 642, 93 698 (1986), now reverse. 9 clearly protects As first 1872, recodification postal laws, contained general proscription against using initiate correspondence furtherance defraud." sponsor stated, apparent reference antifraud provision, measures needed prevent are mostly gotten up cities . thieves, forgers, rapscallions generally, deceiving fleecing innocent people country."5 Insofar sparse reveals anything, indicates original impetus behind protect them 10 Durland States, 161 306, 16 508, 40 L.Ed. 709 (1896), case meaning defraud," interpreted broadly insofar concerned, more extensive reach. rejected "the cases as, law, come definition 'false pretences,' order misrepresentation existing mere promise future." Id., 312, S.Ct., 511. Instead, "includ[e] everything past present, suggestions 313, Accordingly, defendant's sell bonds intend honor explained "[i]t protecting intentional efforts despoil, post being carry into effect, passed. ." 314, 11 codified 1909, doing further indication statute's rights.6 amendment added "or after Act Mar. 4, ch. 321, 215, 35 Stat. 1130.7 new statement "everything U.S., However, instead "[any artifice] property." 12 therefore, criminalized artifices representation, promises. Because identifying proscribed arguable money-or-property requirement limit those aimed causing deprivation approach taken each addressed issue: individuals, people, officials perform duties Clapps, 732 1148, 1152 (CA3 1984); 488 761, 764 (CA8 1973). 13 long ago however, methods schemes," "usually signify something trick, deceit, chicane overreaching." Hammerschmidt 265 182, 188, 44 511, 512, 68 968 (1924).8 codification 1909 departing understanding. we see it, adding unmistakable reached 14 believe Congress' intent passing schemes. often stated rational readings criminal harsher than other, choose spoken definite language. Bass, 404 336, 347, 92 515, 522, 30 (1971); Universal C.I.T. Credit Corp., 344 218, 221-222, 73 227, 229-230, 260 (1952). See Rewis 401 808, 812, 91 1056, 1060, 28 493 (1971). said years ago: "There constructive offenses; can punished, shown plainly statute." Fasulo 272 620, 629, 47 200, 202, 71 443 (1926). Rather construe manner leaves outer boundaries ambiguous Federal setting standards disclosure local officials, read rights. If desires go further, speak has. 15 For purposes action, assume officer. issue thus violates State named agencies, receives note comes us, It insurance. what assert agent.9 Although Wombwell, Brief 20-21, n. 17, hold, instruction concedes convictions reversed. 36, 28. 17 judgment reversed, remanded proceedings consistent opinion. ordered. whom O'CONNOR joins Parts I, II, III, dissenting. 19 prohibited presented prohibition restricted property, includes individuals entitled. Specifically, decide embraces secret agreement place particular company's major portion list agents provided including sham under themselves. 20 same construction arisen variety contexts few decades. sector, judges, Governors, chairmen political parties, cabinet officers, city aldermen, Congressmen many defrauding services officials.1 most secretly objective benefiting themselves promoting own interests, fulfilling legal commitment loyal service Similarly, campaign workers falsify votes, election.2 purchasing agents, brokers, union leaders, employers unions found accepting kickbacks selling confidential information.3 defendants privacy nonmonetary rights.4 All common—they involved refers rights." They else common. confronted sorts constitute "scheme uniformly consistently same, sensible way. realized justifies limiting application intended victims * forth prohibitions. executing 22 "[1] [2] promises, [3] sell, dispose of, loan, exchange, alter, give away, distribute, supply, furnish procure unlawful counterfeit spurious coin, obligation, security, article, anything represented intimated article. (emphasis brackets added). 23 clear, restrictions independent. One clause—obtaining pretenses—even though clause—counterfeiting. clause—devising defraud—without counterfeiting provision. Until today obvious clause even seeking victim pretenses. Cf. Streep 160 128, 132-133, 244, 246, 365 (1895). Every matter held.5 Yet, today, practical purposes, rejects longstanding imposing unless someone I am loss understand source justification holding. Certainly canon requires us ignore plain 24 considering essential remember enacting it. sought integrity allowing "instruments crime." Brewer, 528 492, 498 1975). (1896); Parr 363 370, 389, 80 1171, 1182, 1277 (1960); Gouled 273 F. 506, 508 (CA2), aff'd, 255 298, 41 261, 65 647 (1921). "The focus upon Postal Service, regulation affairs, regulate mails. Badders 240 391 [36 367, 60 706] (1916)." 767 1973), 417 909, 94 2605, 212 (1974). Once considered, becomes adopts senseless. Can purge willing tolerate government, unbiased officials? Is wanted ensure petty crimes, prohibit election accomplished fictitious ballots? Given "broad purpose," "find difficult believe, absent history, undercut sharply hobbling prosecutors effort combat" McElroy 455 655, 102 1332, 1339, 522 (1982). 25 limitation shows fidelity purpose. recognizes "money property" actually apply prosecutions clause. ante, 358. But where derived from? examples types prosecuted reveal "fraud" every sense word, plays indispensable role effectuating goal preserving Service. 26 supra, candidates running Committeeman St. Louis, Missouri, voter registration affidavits write-in fill names addresses, making sure addresses accessible campaign. Applications absentee ballots filed, arrived mail, filled candidates' back. aides having voters, residents, Board Election Commissioners. convictions, rejecting arguments anyone never term "defraud" "construed statute; namely, enterprises." 764. 27 Rauhoff, 525 1170 (CA7 1975), defendant facilitate paying Illinois approximately return Secretary's license plate company. response reaping profits, nobody defrauded, "people Illinois, who business free bribery." 1175. proved lost money, There scores which, depriving nn. 1-5, supra. Discussing peculiar facts confirm observation "as old falsehood versable human ingenuity." Weiss 675, 681 (CA5), 314 687, 62 300, 86 550 (1941). But, whole, prove unwise today's judicial is. II 29 discussed above "fraud," analogous way enactment; scant history. reason, upset settled, endorsed. unique Another 371, uses identical prohibiting conspiracies "defraud States," virtually dispositive here. Haas Henkel, 216 462, 249, 54 569 (1910), dealing predecessor contemplated loss. broad enough terms impairing, defeating lawful function department Government." 479, 253. Again, (1924), "cheat interfere obstruct functions craft trickery, least dishonest." 512.6 require evidence suffered pecuniary Barnow, 239 74, 79, 36 19, 21, 155 (1915). 31 basis concluding different (first 1872) 371 1867). "in modify underlying act—fraud, nonproperty interests then our interpretation unjustified. event, expansive 32 nonetheless suggests interpreting statutes differently justified applies exclusively while benefits individuals. Ante, 358—359, 8. wide mark. and, explained, ludicrous think Service narrow allow mailings merely is, reason 371.7 correct pointing beyond common-law word 371. 8, citing Keitel, 211 393, 123, 130, 53 230 (1908). confines (1896). 33 Examination defined, defined enactment, showed Saint Francis College Al-Khazraji, 481 604, 2022, 95 582 (1987) (looking contemporaneous dictionary definitions construing "race"). example, Story cites "applied person another," cunning, deception, circumvent cheat, deceive another." Story, Equity Jurisprudence 186, pp. 189-190 (1870). law dictionaries era type subject action. leading "[t]o withhold justly due him, deception artifice." Bouvier's Law Dictionary 530 (1897). cheat; deceive; act right, W. Anderson, 474 (1893). Burrill's 658-659 (1859).8 34 "tangible remarkably similar services. Trial Valentine Jones, How.St.Tr. 251 (1809). abstracted follows: "A, commissary-general stores West Indies, contracts B supply stores, condition divide A. commits misdemeanor." Stephen, Digest Criminal Law, Art. 121, 85 (3d ed. 1883). By token, crime included deceptive seduction, Parker, 114 Wash. 428, 195 229 (1921); cf. Condolon, 600 1979) (fraudulent seduce women supported wire conviction). Of course, expansively went Durland, 313-314, 37 recent decision upholding judge, despite proof tangible Seventh Circuit reaffirmed "defraud." Holzer, 816 304 (1987). Writing court, Judge Posner explained: 38 "Fraud elementary deceit—and meanings bears Dial, 757 163, 168 (7th Cir.1985)—includes deliberate information obligation. toward including, litigants deliberately conceals When judge busily soliciting loans counsel party, telling opposing (let alone public), concealing obligations. 39 "Second, systematic long-continued receipt bribes coupled conceal bribe-taking authorities (again quite possibly senses well), rather kept dark. irrelevant far appears, Holzer ruled lawyer's willingness unwillingness caused demonstrable litigant large. Keane, 534, 541, 546 Cir.1975); Lovett, 811 979, 985 Cir.1987); Manton, 834, 846 (2d Cir.1939). How bribed?" 307-308. support, much less compel, decision. 42 Even historical Court's reflect strange legislation congress 19th Century. Statutes like Sherman Act, civil legislation, written latitude achieve remedial identified. open spaces appropriately implicit delegations gaps tradition case-by-case adjudication. notion frozen conception recognized 1872 manifestly untenable. put it: 43 depends mail-fraud framers passed back nineteenth century. seems opposite equally untenable extreme arguing whatever strikes bad, event 'intangible rights' concept attacks too appeals disturb." 310. Finally, narrower originally class prohibition: 335, 301, 323. clause, promises," 1909. 1130. codify qualify law. 312-314, 510-511. suggest prohibition, disjunctive "or" demonstrates to, modifying, prohibition. Reiter Sonotone 442 330, 339, 99 2326, 2331, 931 (1979); 246. 45 Reviewing reactions courts' supports reading attributed repeatedly cover novel species ways support basic thrust. That accurately summarized following observations: 46 "First together lineal descendant, characterized 'first defense' area develop Its applications, numerous catalog, full range consumer frauds, stock land bank commodity extended areas blackmail, counterfeiting, bribery. areas, legislatures sometimes slow enact specific prohibitory frequently instrument justice wielded ever-innovative practitioners deceit. "During century, Supreme placed stamps approval five revisions enlarge coverage." Rakoff, Mail Fraud Statute, Duquesne L.Rev. 772-773 III 48 To crabbed straightforward unpersuasive argument. Since explicit, unambiguous rights" explains, ambiguity resolved favor lenity. doctrine lenity sound, citizen entitled fair notice sort rise punishment. reliance misplaced several reasons. 49 begin with, "although 'criminal strictly mean narrowest possible complete disregard legislature.' 658, quoting Bramblett, 348 503, 509-510, 75 504, 594 (1955). Especially light purpose, unambiguously mails—whether involve 50 "defraud," ever existed, removed ago. Chief Taft's sufficient perfectly need series Appeals' opinions applying very faithful notwithstanding loss, Surely knew Kentucky's hundreds thousands dollars available relatives, paramours. indeed, lenity.9 51 recognize overly applications past. With guidance struggled define unethical criminal. instances, voting criminality clearer. exercise excuse entire sound Congress. 52 Perhaps distressing aspect casual—almost summary—rejection accumulated wisdom distinguished judges thoughtfully considered correctly answered present. quality work suspect stands alone, so, tide well-considered issued courts. convinced understood persuaded, join rejection longstanding, Commissioner Internal Revenue Fink, 89, 101, 2729, 2736, 74 (STEVENS, dissenting); Citicorp Industrial Credit, Brock, 27, 40, 2694, 2702, Runyon McCrary, 427 160, 189, 96 2586, 2603, 415 (1976) concurring). run, grave ramifications will be. can, negate amending congressional corrupt continue property.10 immune prosecution. possibilities decision's impact mitigated do moderate my serious mistake. erase lingering questions about why particularly receptive dramatically elite powerful respectfully dissent. Section provides pertinent part: "Whoever, intending devise attempting do, [uses causes used], shall fined $1,000 imprisoned years, both." Seton's returns. cannot liability documents false, (1960), properly indictment allege returns false. review aware write policy. instruct subsumed deny "Count Indictment to: "(a)(1) departments, employees impartially, corruption, bias, dishonesty, misconduct, fraud; "(2) (directly indirectly) value, "And aforesaid scheme, defendants, 'Sonny' Jr., others, cause authorized deposit matter, matters sent take receive therefrom knowingly thereon addressed, things. "(b) Defraud impeding, Treasury Department America ascertainment, computation, assessment taxes." 9-10, error instruction, id., 11, 9, effect issue. Cong.Globe, 41st Cong., 3d Sess., (1870) (remarks Rep. Farnsworth). These remarks debate H.R. 2295, introduced Representative Farnsworth proceeded describe whereby solicit greedy unwary bills, delivered. bill Congress, reintroduced 42d section intact. §§ 149 302 add expressly reaching period, nature mentioned 1870, 5, pretending deal currency "green coin" cigars." 2, 1889, 1, 873. addition appears reconfirmation face disagreement among narrowly read. 771, 790-799, 808-809 Some 1889 1948 (Act 25, 1948, 645, 763) remove surplusage changing H.R.Rep. No. 304, 80th 1st A100 (1947). Post-1948 amendments technical nature. last then, changes here, suggested Report Commission Revise Codify Penal Laws cited margin Report. S.Doc. 68, 57th pt. 63, (1901). address significance language, stating self-explanatory. Cong.Rec. 1026 (1908) Sen. Heyburn). concerned thereof purpose." indicates, regard conspire primarily cheat 512. Other interests. 480, 254, (1910) (predecessor bribing advance cotton crop report); Glasser 315 60, 457, 680 (1942) attorney). consideration applicable Curley 130 (CA1 1904), stated: "Quite likely 'defraud,' ordinarily English states, object communities municipal governments, exist largely administering financial relating F., 6-7. concluded, "[a] members civic body, thing; welfare exists [is] 7. alone; indicated, origin desire derives holder. STEVENS affirm requiring violated not. illegal profit arrangement, disclosed worth observing reported gain. failure disclosure. criminalize officer's empowered authority, proscribing profiteering forbid handling insurance, clearer evidences convince defrauds forbidden 1987) (county judge); Silvano, 812 754 (city budget director); Barber, 668 778 (CA4) (State Alcoholic Beverage Control Commissioner), 459 829, 66, 67 (1982); 108 1982) (party leader), (1983); Diggs, 198 U.S.App.D.C. 255, 613 988 (1979) (Congressman), 446 982, 2961, 838 (1980); (Governor Maryland), Brown, 540 364 1976) building commissioner); Bush, 641 1975) Director Relations), 424 977, 1484, 748 (1976); 534 alderman), 976, 1481, 746 Staszcuk, 502 875 1974) 423 837, 65, 56 (1975); Isaacs, 1124 (CA7) (ex-Governor ex-Director Revenue), 3184, 1146 (1974); Classic, F.Supp. 457 (ED La.1940) (election commissioner). servants public. 979 (bribing mayor); Alexander, 741 962 1984) judge), overruled grounds Ginsburg, 773 798, 802 1985) banc); State); Faser, 303 380 La.1969) (scheme bribe officials). Shushan 117 110 313 574, 61 1085, 1531 (1941), Fifth upheld member Louisiana parish levy board receiving underwriters plan refund outstanding district. Explaining actual occurred refunding operation profitable board, "No trustee sacred advantage corrupting 115. Girdner, 877 (CA10 (candidate legislature); Odom, 736 104, 116, (sheriff); 1153 (CA3) chairman), 469 105 589, 83 699 (1984); 761 1973) (candidates office), Price, 788 234 pending sub nom. McMahan 86-632; Boffa, 919, 930-931 1982); Curry, 406 (CA5 (chairman committee); Bronston, 658 920 1981) (attorney), 456 915, 1769, 72 174 Von Barta, 635 999 1980) (securities trader), 450 998, 101 1703, 199 (1981); Bohonus, 628 1167 (CA9) (insurance manager), 447 928, 3026, 1122 Bryza, 414 (purchasing agent), 426 912, 2237, 837 George, 477 827, 155, (1973); Procter & Gamble Co., 676 (Mass.1942) (attempt competitor's employee). (wire related bogus talent women); Louderman, 576 1383 fraudulently personal information), 439 896, 257, 58 243 (1978); Castor, 558 379, 383 1977) liquor license), 434 1010, 98 720, 752 (1978). 1152; 764; Frankel, 721 917, 1983); Scott, 701 1340, 1343-1344 (CA11), 464 856, 104 175, 78 158 121; Halbert, 640 1000, 1007 (CA9 1981); La.1940); "To dishonest. necessary subjected legitimate defeated misrepresentation, overreaching carrying intention." extraordinary presents Hammerschmidt, ----, itelf goes reject interference employing device, connection transactions National Securities Exchange similarly losses. SEC Texas Gulf Sulphur 833, 848 1968), denied Coates SEC, 394 89 1454, 756 (1969). terms, "reach engaged scheme." Chiarella 222, 240, 1108, 1121, 63 (1980) (Burger, dissenting). Myzel Fields, 386 718, 739 1967), 390 951, 88 1043, 1143 (1968); A.T. Brod Co. Perlow, 375 397 1967). surely commentaries manner, none brought attention broader interpretations doubt referring conflict weight accord lenity, appropriate identify ruling today. uneducated, average, citizens. sophisticated art us. element fiction presumption responsibility know array executives, legislators accused, convicted, well-settled renounces unquestionably unlawful. Nash 373, 377, 780, 781, 57 1232 (1913). salary services, breach loyalty employer—who getting for. Additionally, "[i]f result principal, deliver proceeds, principal." Restatement (Second) Agency 403 (1958). fulfill kickback determine proscriptions Edwards, 458 875, 880 Huie 409 891, 118, 148 (1972). 124; 1361; 374, 7; 646, 6. self-contained enactments force. 1952(b) (defining "unlawful activity" law). lack forbidding immunize she

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