This is THE debate in white collar circles over the past few years. Takhalov (the B-girls case) got the discussion going again in the 11th Circuit. Interestingly, the Supreme Court keeps reversing convictions based on strange new theories that district judges and appellate courts allow. The latest question hails from the Third Circuit -- is it federal wire fraud for a college dean to lie in order to increase U.S. News Rankings? From Law360:
The former dean of the Fox School of Business at Temple University has asked the Third Circuit to throw out his conviction on charges that he falsely inflated the school's stats to boost its ranking in U.S. News & World Report, arguing that students still got a good education in exchange for their tuition.
In an appellate brief filed Friday, Moshe Porat — who was sentenced to 14 months in prison and a $250,000 fine after being convicted on mail and wire fraud charges last year — said the government failed to show how falsely inflating the school's numbers constituted a deprivation of students' "property," as required by federal fraud statutes.
"Imagine that an excellent but unheralded lawyer procures false nominations to be named a 'Super Lawyer.' A client hires the lawyer based on the honor, and the lawyer provides top-notch counsel," Porat's brief said. "The lawyer's conduct is dishonest and morally questionable, but has the lawyer committed federal property fraud? The answer is plainly no—even if the client later learns the truth about the fake honor, and even if the client feels duped and would have hired a different lawyer had he known the truth."
Philadelphia federal prosecutors urged the Third Circuit on Friday to reject a bid by the former dean of Temple University's business school to toss his conviction for falsely inflating the school's stats to boost its U.S. News & World Report ranking, slamming his argument that the conduct didn't amount to property fraud.
In its response brief, the government called Moshe Porat's appeal "an exercise in straw man advocacy," rejecting his argument that the falsely inflated stats given to U.S. News didn't deprive students at Temple's Fox School of Business of a good education.
"Porat was charged with and convicted of defrauding business school applicants, students, and donors out of money," the government's brief said. "He accomplished this, in part, by giving false information to U.S. News, knowing that this information would result in false rankings that students and donors valued, and knowing that Fox would then broadcast these rankings far and wide in order to gather tuition money and donations from the people who were the targets of the fraud."
4 comments:
What is [fraud]?
Oh, baby don't hurt me.
Don't hurt me.
No more.
Seems to me that this boils down to a simple question. To be convicted does the fraudulent statement/act have to proximately cause injury to someone? In the hypothetical posited the lawyer made a material misrepresentation that did not cause the client harm. In the civil world there would be no actionable case, as causation/injury are elements of the tort. So question is again simple: Does criminal statute punish fraudulent conduct or only fraudulent conduct that proximately causes harm?
Seems like in civil fraud matters this argument would be that there were minimal or no damages to the victim. Which may be a good point for sentencing but not usually the measure of whether a crime occurred. We have "attempt" crimes involving no harm. But the mind is so guilty there needs to be some measure of punishment.
@1226 - the distinction between "attempt" crimes and their competed partners proves the rule (i.e., that there must be harm, and in the absence of harm, there should be a separate "attempt" crime cause). As far as I know, the defendant is not being prosecuted for "attempted" fraud.
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