Criminal Fraud and the “Nature of the Bargain”

White collar crimes, such as wire and mail fraud, are based on a “scheme or artifice to defraud.” Basically, if you use deception to deprive a person of their money or property, that is fraud. This requires the government to prove that the defendant (1) knew they were making false statements or acted with reckless indifference to the truth and (2) intended to misrepresent the “nature of the bargain” offered to the victim.

Florida Defendants Convicted of Falsely Inflating the Value of Iraqi Currency

When we say “the nature of the bargain,” we refer to the fact that many fraudulent schemes involve misrepresenting certain characteristics about the product or service offered. It is not that the seller is not selling an actual product. It is that the seller lies about some aspect of the product or service that would lead a “reasonable” person to make the deal.

A recent decision from the United States Court of Appeals for the 11th Circuit, United States v. Bell, provides a good example of this principle. In this case, a federal grand jury indicted three defendants on various charges related to mail fraud and wire fraud. According to prosecutors, the defendants ran an online currency exchange business that sold Iraqi dinar between 2004 and 2015. During this time, the defendants allegedly used online forums and other means to spread false rumors that the Iraqi government was about to revalue the dinar. This “belief,” along with other alleged false representations, helped convince the defendants’ customers to buy dinar as a speculative investment.

A jury convicted the defendants of conspiracy to commit fraud, mail fraud, wire fraud, and making false statements. On appeal, they argued the government failed to prove there was any intent to defraud. The 11th Circuit squarely rejected that argument. The evidence at trial showed that the defendants actions were “no different from a lottery scam.” Essentially, investors were lured into buying the dinar based on a false belief of an imminent revaluation. It was as if the defendant sold a lottery ticket promising odds of 1-in-10 when they were actually 1-in-1,000,000. Sure, the defendants’ customers purchased legitimate dinar, the Court of Appeals said, but they were still “duped” by the defendants’ “falsehoods about the revaluation.”

The 11th Circuit also pointed to evidence that the defendants lied about their plans to open physical airport kiosks. This lie “went to the core of the bargain with investors.” That is, investors testified at trial that they chose to buy dinar from the defendants “because” of these promised airport locations. The 11th Circuit compared this lie to a car dealer who “falsely promise[s] roadside assistance to customers” to get them to buy a vehicle.

Contact the Joshi Law Firm Today

One of the defendants in the above case received 15 years in federal prison. So you can see that crimes like mail and wire fraud carry significant consequences. If you are facing similar charges and need legal advice and representation from a skilled Orlando white collar criminal defense attorney, call the Joshi Law Firm, PA, today at 844-GO-JOSHI or contact us online to schedule a free initial consultation.

Source:

scholar.google.com/scholar_case?case=522136796253987069