WCC (3/17/21)

Monday’s Class – Corey Amundson

• Chief of the Public Integrity Section of the DOJ
• https://www.justice.gov/criminal-pin/leadersh
ip
 “Fighting White Supremacy in the 21st
Century”
• Friday (3-5 pm)
• Webinar panel of 5 legal scholars
• Their presentations will be published in the
first issue of the LSU Journal for Social Justice
& Policy.
• Registration link:
https://www.law.lsu.edu/ljsjpsymposium/
 2Ls – Sign Up for Clinics!
Clinics offer two distinct advantages over regular courses
and seminars:
1. Excellent practical experience – specifically, the various
tasks required to handle a case: drafting, working
cooperatively with others, client management, time
management, and courtroom presentation.
2. Clinical experience will help open up job opportunities.
All else being equal, more doors will open for a student who
has clinical experience – and a positive recommendation
from a clinical professor – than for a student who does not.
 Assignment
• For today, you should have read pp. 279-95
(Ch. 7 – Bribery & Gratuities)
• Next assignment will be pp. 297-317 (Ch. 7 –
Bribery & Gratuities)
 Issues
• Ch. 4 – Mail and Wire Fraud (pp. 109-89)
– Computer Fraud
• U.S. v. Czubinski (pp. 181-82)
– Bank Fraud
• Loughrin v. U.S. (pp. 184-88)
• Ch. 7 – Bribery and Gratuities (pp. 279-317)
– 5 Hypos
– 4 Possible Relationships Between Bribery and Extortion
Under Color of Official Right
– 18 U.S.C. § 201 (federal bribery and gratuities statute)
– U.S. v. Arroyo (p. 295)
– Dixson v. U.S. (pp. 281-87)
– U.S. v. Sun-Diamond Growers of California (pp. 289-94)
– 18 U.S.C. § 666 (pp. 297-98)
– Salinas v. U.S. (pp. 298, 300)
 Issues
• Ch. 7 – Bribery and Gratuities (pp. 279-317)
– Sabri v. U.S. (pp. 298-301)
– Foreign Corrupt Practices Act (pp. 305-07)
– U.S. v. Kay (pp. 307-12)
– McDonnell v. U.S. (not in casebook)
U.S. v. Czubinski, 106 F.3d 1069 (1st Cir. 1997)
(pp. 181-82)
 Central Legal Question
• Does an IRS employee who (a) breaches IRS
rules by doing unauthorized computer
searches for confidential information (b) but
does not use or transfer this information in
any way, commit wire fraud?
 Facts
• Czubinski was employed as a Contact
Representative in the Boston office of the
Taxpayer Services Division of the IRS.
• To perform his official duties, which mainly
involved answering questions from taxpayers
regarding their returns, Czubinski routinely
accessed information from one of the IRS's
computer systems known as the Integrated
Data Retrieval System (“IDRS”).
• In 1992, Czubinski carried out numerous
unauthorized searches of IDRS files.
• Some testimony that he wanted to use this
information to create dossiers about people in
the white supremacist movement, which he
was a part of.
• But no evidence that Czubinski created
dossiers, took steps toward making dossiers
(such as by printing out or recording the
information he browsed), or shared any of the
information he accessed with third parties.
• He knowingly disregarded IRS rules by looking
at confidential information obtained by
performing computer searches that were
outside of the scope of his duties as a Contact
Representative.
• Nothing in the record indicates that Czubinski
did anything more than knowingly disregard
IRS rules by observing the confidential
information he accessed.
 Case History
• The government pursued two theories of wire
fraud in this prosecution:
– first, that Czubinski defrauded the IRS of its
property, under section 1343, by acquiring
confidential information for certain intended
personal uses;
– second, that he defrauded the IRS and the public
of their intangible right to his honest services,
under sections 1343 and 1346.
• The wire fraud indictment, therefore,
articulated particular personal ends to which
the unauthorized access to confidential
information through interstate wires was
allegedly a means.
• Czubinski was convicted of wire fraud.
• Appealed.
 Court's Decision
• Convictions reversed.
• We agree [with Czubinski] ... that his searches
of taxpayer return information did not satisfy
the statutory requirement that he obtain
‘anything of value.’
Court's Reasoning
 18 U.S.C.A. § 1030 (Before Oct. 11, 1996)

(a) Whoever--
... (4) knowingly and with intent to defraud,
accesses a Federal interest computer without
authorization, or exceeds authorized access, and
by means of such conduct furthers the intended
fraud and obtains anything of value,
unless the object of the fraud and the thing
obtained consists only of the use of the
computer;
 18 U.S.C. § 1030(e)(6)
(e) As used in this section --
... (6) the term “exceeds authorized access”
means to access a computer with authorization
and to use such access to obtain or alter
information in the computer that the accesser is
not entitled so to obtain or alter[.]
 18 U.S.C. § 1030(e)(2)
(e) As used in this section –
(2) the term “Federal interest computer” means a
computer--
(A) exclusively for the use of a financial institution or
the United States Government, or, in the case of a
computer not exclusively for such use, used by or for
a financial institution or the United States
Government and the conduct constituting the
offense affects the use of the financial institution's
operation or the Government's operation of such
computer ...
 Argument #1: Czubinski Did Not Obtain
“anything of value”
• The value of information is relative to one's
needs and objectives;
• here, the government had to show that the
information was valuable to Czubinski in light
of a fraudulent scheme.
• The government failed, however, to prove that
Czubinski intended anything more than to
satisfy idle curiosity.
• The plain language of section 1030(a)(4)
emphasizes that more than mere
unauthorized use is required: the “thing
obtained” may not merely be the
unauthorized use.
• It is the showing of some additional end—to
which the unauthorized access is a means—
that is lacking here.
• The evidence did not show that Czubinski's
end was anything more than to satisfy his
curiosity by viewing information about friends,
acquaintances, and political rivals.
• No evidence suggests that he printed out,
recorded, or used the information he
browsed.
• No rational jury could conclude beyond a
reasonable doubt that Czubinski intended to
use or disclose that information, and merely
viewing information cannot be deemed the
same as obtaining something of value for the
purposes of this statute.
Argument #2: Congressional Intent (18 U.S.C.
§ 1030(a)(4))
• [A 1986] Senate Committee Report ... underscores
the fact that [§ 1030(a)(4)] should apply to those
who steal information through unauthorized access
as part of an illegal scheme:
• ‘The Committee remains convinced that there must
be a clear distinction between computer theft,
punishable as a felony [under section 1030(a)(4)],
and computer trespass, punishable in the first
instance as a misdemeanor [under a different
provision].
• The element in the new paragraph (a)(4),
requiring a showing of an intent to defraud, is
meant to preserve that distinction, as is the
requirement that the property wrongfully
obtained via computer furthers the intended
fraud.’
 Argument #3: Defendant Needed to Use
Information in Order to Deprive Victim
• Binding precedents, and good sense, support the
conclusion that to “deprive” a person of their
intangible property interest in confidential
information under section 1343, either
– some articulable harm must befall the holder of the
information as a result of the defendant's activities,
or
– some gainful use must be intended by the person
accessing the information, whether or not this use is
profitable in the economic sense.
• Here, neither the taking of the IRS' right to
“exclusive use” of the confidential
information, nor Czubinski's gain from access
to the information, can be shown absent
evidence of his “use” of the information.
 My Reaction to Argument #3
• I can see court’s point that articulable harm to
victim is sufficient to constitute deprivation.
• I don’t understand court’s point that intended
gainful use is sufficient to constitute
deprivation.
 Argument #4: No Intent to Deprive IRS of
Property
• [A]n intent to deprive cannot be proven, and,
a fortiori, a scheme to defraud is not shown.
• … All that the government was required to
prove was the intent to follow through with a
deprivation of the IRS's property and the use
… of interstate wire transmissions pursuant to
the accomplishment of the scheme to
defraud.
• In the case at bar, the government failed to
make even this showing.
• [I]t was not proven that [Czubinski] intended
to deprive the IRS of their property interest
through either disclosure or use of that
information.
 Next Few Arguments Deal with Honest
Services Fraud, Not Computer Fraud
• Keep in mind that this case was decided in
1997, when some courts were still broadly
defining honest services to include self-
dealing.
• U.S. v. Skilling in 2010 narrowed the scope of
honest services to bribes and kickbacks.
 Argument #5: No Honest Services
Deprivation (not in casebook)
• ‘[A]lthough a public official might engage in
reprehensible misconduct related to an official
position, the conviction of that official cannot
stand where the conduct does not actually
deprive the public of its right to her honest
services, and it is not shown to intend that
result.’
• Applying these principles to Czubinski's acts, it
is clear that his conviction cannot stand.
• [T]his case falls outside of the core of honest
services fraud precedents.
• Czubinski was not bribed or otherwise
influenced in any public decisionmaking
capacity.
• Nor did he embezzle funds.
• He did not receive, nor can it be found that he
intended to receive, any tangible benefit.
• [T]he government simply did not prove that
Czubinski deprived, or intended to deprive,
the public or his employer of their right to his
honest services.
• Although he clearly committed wrongdoing in
searching confidential information, there is no
suggestion that he failed to carry out his
official tasks adequately, or intended to do so.
 Argument #6: Self-Dealing Here Not Serious
Enough (not in casebook)
• [T]he pre-McNally honest services convictions
involving private fraud victims indicate that
there must be a breach of a fiduciary duty to
an employer that involves self-dealing of an
order significantly more serious than the
misconduct at issue here.
• [T]he government has failed to prove that
Czubinski intended to use the IRS files he
browsed for any private purposes, and hence
his actions, however reprehensible, do not
rise to the level of a scheme to defraud his
employer of his honest services.
 Argument #7: Congressional Intent (again)
(not in casebook)
• We find no evidence that Congress intended
to create what amounts to a draconian
personnel regulation.
• We hesitate to imply such an unusual result in
the absence of the clearest legislative
mandate.
 Argument #8: Slippery Slope (not in
casebook)
• “To allow every transgression of state
governmental obligations to amount to mail
fraud would effectively turn every such
violation into a federal felony; this cannot be
countenanced.”
• Here, the threat is one of transforming
governmental workplace violations into
felonies.
 Court’s Dicta: Legality Principle
• The broad language of the mail and wire fraud
statutes are both their blessing and their
curse.
• They can address new forms of serious crime
that fail to fall within more specific legislation.
• On the other hand, they might be used to
prosecute kinds of behavior that, albeit
offensive to the morals or aesthetics of federal
prosecutors, cannot reasonably be expected
by the instigators to form the basis of a federal
felony.
• The case at bar falls within the latter category.
 More Dicta: Prejudicial Evidence
• Also discomforting is the prosecution's
insistence, before trial, on the admission of
inflammatory evidence regarding the
defendant's membership in white supremacist
groups purportedly as a means to prove a
scheme to defraud ...
• [W]e caution that the wire fraud statute must
not serve as a vehicle for prosecuting only
those citizens whose views run against the
tide, no matter how incorrect or uncivilized
such views are.
Note: 18 U.S.C. § 1030(a)(4) Was Modified (as
of Oct. 1996)
(a) Whoever—
... (4) knowingly and with intent to defraud,
accesses a protected computer without
authorization, or exceeds authorized access, and by
means of such conduct furthers the intended fraud
and obtains anything of value, unless the object of
the fraud and the thing obtained consists only of
the use of the computer and the value of such use
is not more than $5,000 in any 1-year period[.]
Note: Provisions 18 U.S.C.A. § 1030 (2) and
(3) Cover Frauds Less Than $5000
Bank Fraud
Loughrin v. U.S., 134 S. Ct. 2384 (2014) (J.
Kagan) (pp. 184-88)
 18 U.S.C. § 1344 (first passed in 1984)
Whoever knowingly executes, or attempts to execute, a scheme or
artifice—

(1) to defraud a financial institution; or

(2) to obtain any of the moneys, funds, credits, assets, securities, or

other property owned by, or under the custody or control of, a
financial institution, by means of false or fraudulent pretenses,
representations, or promises;

shall be fined not more than $1,000,000 or imprisoned not more than
30 years, or both.
 Central Legal Question
• Must the Government prove that a defendant
charged with violating 18 U.S.C. § 1344(2)
intended to defraud a bank?
 Facts
• Petitioner Kevin Loughrin executed a scheme
to convert altered or forged checks into cash.
• Pretending to be a Mormon missionary going
door-to-door in a neighborhood in Salt Lake
City, he rifled through residential mailboxes
and stole any checks he found.
• Sometimes, he washed, bleached, ironed, and
dried the checks to remove the existing writing,
and then filled them out as he wanted;
• other times, he did nothing more than cross out
the name of the original payee and add another.
• And when he was lucky enough to stumble upon a
blank check, he completed it and forged the
accountholder's signature.
• Over several months, Loughrin made out six of
these checks to the retailer Target, for
amounts of up to $250.
• His modus operandi was to go to a local store
and, posing as the accountholder, present an
altered check to a cashier to purchase
merchandise.
• After the cashier accepted the check (which,
remarkably enough, happened time after
time), Loughrin would leave the store, then
turn around and walk back inside to return the
goods for cash.
• Each of the six checks that Loughrin presented
to Target was drawn on an account at a
federally insured bank, including Bank of
America and Wells Fargo.
• Employees in Target's back office identified
three of the checks as fraudulent, and so
declined to submit them for payment.
• Target deposited the other three checks.
• The bank refused payment on one, after the
accountholder notified the bank that she had
seen a man steal her mail.
• Target appears to have received payment for
the other two checks, though the record does
not conclusively establish that fact.
 Case History
• The Federal Government eventually caught up
with Loughrin and charged him with six counts
of committing bank fraud—one for each of the
altered checks presented to Target.
• The District Court allowed the case to go to
the jury under § 1344(2).
• Loughrin argued that the jury had to find that
he acted with “intent to defraud a financial
institution” – that is, with specific intent to
deceive a bank.
• The court rejected Loughrin’s argument.
• The jury convicted Loughrin on all six counts.
• The 10th Circuit also rejected Loughrin's
argument on the grounds that intent is
necessary only under the bank fraud law's first
clause because of “the plain language of the
statute.”
 Court’s Decision
• Affirmed.
• The Government need not prove that a
defendant charged with violating 18 U.S.C. §
1344(2) specifically intended to defraud the
bank.
• Unfortunately, J. Kagan doesn’t say much else
about the mens rea requirement for 1344(2).
 Argument #1: Congressional Intent Was to Fill
Bank Fraud Gap in Mail Fraud Statute
• One of the decisions prompting enactment of
the bank fraud law involved a defendant who
used a stolen credit card to obtain food and
lodging.
• (Substitute a check for a credit card and Maze
becomes Loughrin.)
• ... [T]he Court held those mailings insufficiently
integral to the fraudulent scheme to support
the conviction.
• Hence, Maze created a “serious gap[ ] ... in
Federal jurisdiction over frauds against banks.”
• Congress passed § 1344 to fill that gap,
enabling the Federal Government to
prosecute fraudsters like Maze and Loughrin.
• We will not deprive that enactment of its full
effect …
 Argument #2: Statutory Language
• § 1344(2) ... focuses, first, on the scheme's
goal (obtaining bank property) and, second,
on the scheme's means (a false
representation).
• ... [N]othing in the clause additionally
demands that a defendant have a specific
intent to deceive a bank.
 Argument #3: “or” Does Not Mean
“including”
• [T]he first clause of § 1344 ... includes the
requirement that a defendant intend to
“defraud a financial institution”; indeed, that
is § 1344(1)'s whole sum and substance.
• To read the next clause, following the word
“or,” as somehow repeating that requirement,
even while using different words, is to
disregard what “or” customarily means.
 18 U.S.C. § 1344 (first passed in 1984)
Whoever knowingly executes, or attempts to execute, a scheme or
artifice—

(1) to defraud a financial institution; or

(2) to obtain any of the moneys, funds, credits, assets, securities, or

other property owned by, or under the custody or control of, a
financial institution, by means of false or fraudulent pretenses,
representations, or promises;

shall be fined not more than $1,000,000 or imprisoned not more than
30 years, or both.
• As we have recognized, that term's “ordinary
use is almost always disjunctive, that is, the
words it connects are to be given separate
meanings.”
• ... Loughrin's construction thus effectively
reads “or” to mean “including”—a definition
foreign to any dictionary we know of.
 Argument #4: “or” in Mail Fraud Statute Is
Different
• [Mail fraud statute], which served as a model
for § 1344, prohibits using the mail to further
“any scheme or artifice to defraud, or for
obtaining money or property by means of
false or fraudulent pretenses, representations,
or promises.”
• Loughrin rightly explains that, despite the
word “or,” McNally understood that provision
as setting forth just one offense—using the
mails to advance a scheme to defraud.
• But the two statutes, as an initial matter, have
notable textual differences.
• The mail fraud law contains two phrases strung
together in a single, unbroken sentence.
• By contrast, § 1344's two clauses have separate
numbers, line breaks before, between, and after
them, and equivalent indentation—thus placing
the clauses visually on an equal footing and
indicating that they have separate meanings.
• The legislative structure thus reinforces the
usual (even if not McNally 's) understanding of
the word “or” as meaning ... well, “or”—
rather than, as Loughrin would have it,
“including.”
Argument #5: Loughrin’s Mail-Fraudish Interpretation of
“or” Would Make § 1344(2) Redundant

• [Loughrin’s] interpretation would make §

1344's second clause a mere subset of its first:
• If, that is, § 1344(2) implicitly required intent
to defraud a bank, it would apply only to
conduct already falling within § 1344(1).
Argument #6: Reductio ad Absurdum (Loughrin’s
Statutory Interpretation → Absurd Result)
• [Requiring that a defendant have a specific
intent to deceive a bank] would prevent §
1344(2) from applying to a host of cases falling
within its clear terms.
• In particular, the clause covers property
“owned by” the bank but in someone else's
custody and control (say, a home that the
bank entrusted to a real estate company after
foreclosure);
• thus, a person violates § 1344(2)'s plain text
by deceiving a non-bank custodian into giving
up bank property that it holds.
• Yet under Loughrin's view, the clause would
not apply to such a case except in the
(presumably rare) circumstance in which the
fraudster's intent to deceive extended beyond
the custodian to the bank itself.
 Argument #7: Deceit Must Be Proximate Cause
of Bank’s Loss of Money
• § 1344(2) [does not] cover every pedestrian
swindle happening to involve payment by
check, but in no other way affecting financial
institutions.
• ... [There is] a significant textual limitation on
§ 1344(2)'s reach.
• Under that clause, it is not enough that a
fraudster scheme to obtain money from a
bank and that he make a false statement.
• The provision as well includes a relational
component: The criminal must acquire (or
attempt to acquire) bank property “by means
of” the misrepresentation.
• That phrase typically indicates that the given
result (the “end”) is achieved, at least in part,
through the specified action, instrument, or
method (the “means”), such that the
connection between the two is something
more than oblique, indirect, and incidental.
• In other words, not every but-for cause will
do.
• If, to pick an example out of a hat, Jane traded
in her car for money to take a bike trip cross-
country, no one would say she “crossed the
Rockies by means of a car,” even though her
sale of the car somehow figured in the trip she
took.
• The relation between those things would be
(as the Government puts it) too “tangential[ ]”
to make use of the phrase at all appropriate.
• Section 1344(2)'s “by means of” language is
satisfied when, as here, the defendant's false
statement is the mechanism naturally inducing
a bank (or custodian of bank property) to part
with money in its control.
• That occurs, most clearly, when a defendant
makes a misrepresentation to the bank itself—
say, when he attempts to cash, at the teller's
window, a forged or altered check.
• In that event, the defendant seeks to obtain
bank property by means of presenting the
forgery directly to a bank employee.
• But no less is the counterfeit check the
“means” of obtaining bank funds when a
defendant like Loughrin offers it as payment to
a third party like Target.
• After all, a merchant accepts a check only to
pass it along to a bank for payment; and upon
receipt from the merchant, that check triggers
the disbursement of bank funds just as if
presented by the fraudster himself.
• So in either case, the forged or altered check
—i.e., the false statement—serves in the
ordinary course as the means (or to use other
words, the mechanism or instrumentality) of
obtaining bank property.
Ch. 7 – Bribery and Gratuities (pp. 279-317)
 See My Brilliant Op-Ed: “The Right’s Selective
Enforcement of Criminal Law” (Counterpunch)
• https://www.counterpunch.org/2017/04/07/t
he-rights-selective-enforcement-of-criminal-la
w/

• And here’s a critical response by Harvard Law

Prof. Matthew Stephenson:
https://globalanticorruptionblog.com/2017/0
5/09/is-it-a-crime-to-promise-to-support-a-leg
islator-who-votes-the-way-you-want/
Five Hypos
 Hypo #1
• I tell you that students in past who didn’t give
me several thousand $ tended to get very bad
grades.
• One of you gives me $6,000 before exam.
• You receive a 3.5 for the course.
• What crime?
• Modification: What if you still received a 1.5?
 Hypo #2
• I tell you that students in past who gave me
several thousand $ tended to get very good
grades.
• One of you gives me $6,000 before exam.
• You receive a 3.8 for the course.
• What crime?
• Modification: What if I gave you a 1.5?
 Hypo #3
• After learning that you received a 4.0 for the
course, you give me $6,000 and thank me for
doing such a great job.
• Crime?
 Hypo #4
• One of you confides to me that you are
cheating on your spouse.
• I respond by suggesting that it will cost you
$6,000 to keep me from spilling your secret.
• What crime?