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United States v. George - 477 F.2d 508 (7th Cir. 1973)

Rule:

Since the gravamen of the offense of mail fraud under 18 U.S.C.S. § 1341 is a scheme to defraud, it is unnecessary that the government allege or prove that the victim of the scheme was actually defrauded or suffered a loss.

Facts:

From June 1967 through January 1971, defendant Yonan, a cabinet buyer in the Purchasing Department of Zenith Radio Corporation, defendant Geroge, d/b/a A & G Woodworking Co., and defendant Greensphan, president of Accurate Box Corporation, devised a scheme to defraud Zenith Radio Corporation, whereby Yonan received kickbacks on Accurate Box corporation’s sales of cabinets to Zenith. To accomplish this, George allegedly submitted fictitious “commission” invoices of A & G Woodworking Co. to Greensphan’s company. After these invoices were paid, George supposedly paid part of the proceeds to Yonan. The kickbacks were not disclosed to Zenith. The indictment alleged that the scheme deprived Zenith of its lawful money and property and of the honest and faithful performance of its employee Yonan's duties. Thereafter, the defendants were charged with and convicted of violating 18 U.S.C.S. § 1341, which required a scheme to defraud and use of the mails in furtherance of the scheme. On appeal, defendants argued that there was no evidence establishing a scheme to defraud because Zenith was not actually defrauded.

Issue:

Can defendants be convicted of mail fraud under 18 U.S.C.S. § 1341, even if the victim of the scheme was bot actually defrauded or suffered a loss.?

Answer:

No.

Conclusion:

The court rejected the defendants’ argument, holding that the gravamen of the offense under § 1341 was a scheme to defraud, and that defendants' actions were against the best interests of employer and constituted the requisite scheme to commit fraud. According to the Court, the fact that the employer may not have actually been defrauded was irrelevant; hence, the Court upheld the conviction of defendants.

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