SW Legal Educational Publishing

Federal Mail Fraud Does Not Apply to Most State-Issued Licenses
Description Supreme Court held that federal mail fraud charges for theft of property via the mails did not apply to state-issued licenses to operate video poker machines. The applicants for the licenses did not steal any property from the state if they violated the license application procedure. They are subject to state law sanctions, but not federal mail fraud charges.
Topic Criminal Law
Key Words Mail Fraud; Property; State Licenses
C A S E   S U M M A R Y
Facts Cleveland, a lawyer, helped TSG, a company owned by Goodson, prepare applications to the state of Louisiana to receive licenses to operate video poker machines. The licenses were approved and renewed for several years. Cleveland and Goodson were then indicted on numerous charges in connection with a scheme to bribe state legislators to vote in a manner favorable to the video poker industry. The indictment included counts of mail fraud related to using the mails for the licenses. The defendants moved to have those charges dismissed on the ground that the alleged fraud in applications did not deprive the state of "property" under the mail fraud statute. They were convicted on these counts and the appeals court upheld the conviction for mail fraud, holding that video poker licenses were "property" of the state. Defendants appealed.
Decision Reversed. State and municipal licenses in general do not rank as "property" for purposes of federal mail fraud. Mail fraud is largely limited to the protection of money and property. That does not include the kind of license involved here. Otherwise, mail fraud would cover drivers' licenses, medical licenses, and other licenses that are regulatory. The defendants did not defraud the state of any money. To allow the state's view to stand would be a sweeping expansion of federal criminal jurisdiction. Equating the issuance of licenses or permits with the deprivation of property would subject to federal mail fraud prosecution a wide range of conduct traditionally regulated by state and local authorities, something Congress did not intend to do.
Citation Cleveland v. U.S., 121 S.Ct. 365 (2000)

Back to Criminal Law Listings

©1997-2002  SW Legal Studies in Business. All Rights Reserved.