Supreme Court Rules for Enron's Jeff Skilling and Conrad Black on "Honest Services" Fraud
Some good news for Enron's Jeff Skilling and for Conrad Black: The Supreme Court has ruled in their favor on their challenge to the "honest services" portion of the fraud statute.
Section 1346, which proscribes fraudulent deprivations of “the intangible right of honest services,” is properly confined to cover only bribery and kickback schemes. Because Skilling’s alleged misconduct entailed no bribe or kickback, it does not fall within the Court’s confinement of §1346’s proscription.
But, the court did not throw out the statute entirely, and it didn't reverse Skilling or Black's convictions, finding the error might be harmless and it will be up to the lower court or appeals court whether to overturn them. Justices Scalia, Thomas, and Kennedy would have found the statute unconstitutional.
But the justices, in an opinion by Justice Ruth Bader Ginsburg, said prosecutors may continue to seek honest services fraud convictions in cases where they put forward evidence that defendants accepted bribes or kickbacks. "Because Skilling's misconduct entailed no bribe or kickback," Ginsburg said, "he did not conspire to commit honest-services fraud under our confined construction" of the law. [More...]
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