April 5, 2012

Phone Calls From Africa To Kentucky Cannot Be Prosecuted In Virginia, Even If Virginia Is Where You Thought About The Fraud You'd Do On The Phone Call


Former Congressman William Jefferson, a son of New Orleans, will perhaps be best known for having been found with cash - cold, hard, cash - in his freezer.

He was convicted in the United States District Court for the Eastern District of Virginia of eleven charges in connection with a bribery scheme involving his role as a member of Congress and officials in Africa. In a major coup for his lawyer, he was not convicted of the offense involving the cash found in his freezer.

IMG_3793.jpgHe was convicted, alas. And, the Fourth Circuit affirmed 10 of his 11 counts of conviction in United States v. Jefferson.

The one count they reversed on, though, is exceptionally interesting (to me).

Count 10 - Wire Fraud

Count ten of the indictment against Mr. Jefferson alleged that he violated the federal wire fraud statute, 18 U.S.C. § 1343.

This count was based on a telephone call from Africa to Kentucky on July 6, 2005. The government alleged that the call was in furtherance of a scheme that was hatched, in part, in the Eastern District of Virginia.

His lawyers challenged whether there was venue for such a call in the Eastern District of Virginia. After all, the call was started in Africa and accepted in Kentucky. That doesn't look like it affects the folks who live near the federal courthouse in Alexandria.

The district court rejected the venue challenge.

A Bit Of Background on Venue in a Criminal Case

In a criminal case, a person's right to proper venue is Constitutional - it's in article III, section 2, clause 3; "The Trial of all Crimes . . . shall be held in the State where the said Crimes shall have been committed." It's also contained in Federal Rule of Criminal Procedure 18.

For many federal criminal statutes, Congress has expressly said where venue lies. Money laundering, under 18 U.S.C. § 1956 is a good example. Congress has said that a money laundering prosecution can go forward in any jurisdiction where the money laundering transaction happened, or where the illegal act that requires money to be laundered was done (assuming the person accused did the laundering).

But, for many federal statutes, there's no explicit venue provision. Wire fraud, as it happens, is one of those statutes.

In that case, the Supreme Court has said that a person can be prosecuted in the jurisdiction where the conduct that is prohibited by the statute took place.

Venue in a Wire Fraud Case

Simple enough. What's the conduct in wire fraud?

Mr. Jefferson's lawyers argued that the conduct for wire fraud is the making or receiving of the wire. That's what "wire fraud" is about - using a wire.

The government, on the other hand, said that the elements of wire fraud are (1) the use of a wire that is (2) in furtherance of a scheme to defraud. Either one of those elements is an act necessary to complete the offense, argued the government. As a result, the government said that if either happened in the Eastern District of Virginia, the prosecution was proper there.

In fairness to the government, the Seventh Circuit has said basically the same thing in United States v. Pearson, 340 F.3d 459 (7th Cir. 2003).

Thinking Up A Fraud Scheme Is Not Conduct

The Fourth Circuit sided with Mr. Jefferson. It held that,

The scheme to defraud is clearly an essential element, but not an essential conduct element, of wire (or mail) fraud.

Picking up the phone and making a call is an act. Similarly, for mail fraud, putting a letter in a mailbox is an act. But planning a fraud scheme, not so much. Quoting a Second Circuit case, United States v. Ramirez, 420 F.3d 134, 144-45 (2005), the court of appeals held that,

devising a scheme to defraud is not itself conduct at all (although it may be made manifest by conduct), but is simply a plan, intention or state of mind, insufficient in itself to give rise to any kind of criminal sanctions.

Because Mr. Jefferson only had a state of mind in the Eastern District of Virginia, and didn't use the phone there - Count 10 was dismissed for improper venue.

The moral of the story is that you can think about fraud where ever you'd like. Just only answer the phone where you want to face a jury.

About This Blog

The Federal Criminal Appeals Blog is published by The Kaiser Law Firm PLLC in Washington, DC. The Kaiser Law Firm represents people who have been charged with federal crimes, are under federal investigation, or have a federal criminal appeal.

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