Practice Areas

Honest Services Fraud

Honest Services Fraud

What is Honest Services Fraud?

Under 18 U.S.C. § 1346, honest services fraud is defined as a scheme to defraud another of the intangible right to honest services using a scheme to violate a fiduciary duty by bribery or kickbacks.

A fiduciary duty is a duty to act solely for the benefit of the public, employer, shareholders, or a union.

Congress added § 1346 to the federal mail and wire fraud statute in 1988, broadening the government’s ability to pursue charges where the fraud at issue was more intangible. It is a favorite of federal prosecutors because the language of the statute is vague enough to include corporate “crime” and public officials’ unethical behavior that does not otherwise fall into specific categories, such as bribery or extortion.

Honest Services Fraud in the Media

Honest services fraud charges were at the heart of charges against several celebrities, college admissions officers and school administrators, and college athletic personnel – over 30 people in all – in the 2019 “Varsity Blues” scandal, whereby parents paid bribes to secure college admissions for their children.

Other notable and successful honest services fraud prosecutions include cases against former Alabama state legislator Sue Schmitz, former Ohio congressman Bob Ney, and former California Congressman Duke Cunningham.

How is Honest Services Fraud Charged?

Honest services fraud is charged pursuant to 18 U.S.C. § 1346.  To secure a conviction, a prosecutor must prove beyond a reasonable doubt that:

  • The defendant owed a fiduciary duty;
  • The defendant knowingly devised or participated in a scheme to defraud;
  •  The scheme was meant to deny “the intangible right of honest services;
  • It was reasonably foreseeable that the scheme to defraud could cause more than minimal monetary harm, even if it did not; and
  • The scheme used the mail or wires.

Penalties for Honest Services Fraud

The maximum penalty under 18 U.S.C. § 1346 is 20 years in federal prison and $250,000 in fines.

Irvine, California Honest Service Fraud Attorney

The first and most important decision a defendant or anyone facing an honest services fraud investigation must make is to retain the right defense attorney. Responding to an honest services fraud investigation or charges requires a proactive, coordinated, and proactive approach. White collar federal defense attorney Peter Hardin has a long and outstanding track record of establishing clear communication with federal law enforcement agents and prosecutors and responding swiftly and accurately to search warrants and subpoenas. Because Peter Hardin has prosecuted and defended against criminal cases, such as honest services fraud, for nearly 20 years, he understands not just the law, but the way federal authorities investigate cases and the prosecutorial tactics that follow. It is essential that anyone who may be under investigation for honest services fraud, or who has been charged with honest services fraud, act quickly to build a strong defense and protect their rights. Contact Peter Hardin now for a free and confidential consultation.

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