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Honest services fraud can be hard to define and defend

On Behalf of | May 31, 2023 | Criminal Defense, Economic Crimes |

The term “honest services” describes what is commonly called bribery or embezzlement. An extension of mail or wire fraud, it was initially created in 1988 to hold public officials and public servants accountable for their actions. In this case, it could be politicians or people in government who conspire for their self-interests at the expense of the people they serve. Lawmakers broadened it to include people in all kinds of private businesses. The bottom line is that these offenses are fraudulent schemes or economic crimes where two parties attempt to deprive a third party of honest services.

Some common examples

These are schemes that move beyond a legal business relationship, and the victims will not initially know the true nature of the arrangement:

  • Politicians or administrators who receive payment or perks to steer government spending in an advantageous or self-serving direction.
  • Parents pay coaches or admissions people through an intermediary to get kids into a school because of non-existent skills or contributions, such as the 2019 college admissions scandal.
  • Doctors who recommend patients to specific specialists or facilities in return for money or other benefits.
  • People who use the U.S. mail system, UPS or Fed Ex, email, phone, internet or text to commit the subterfuge.

There are severe consequences for convictions

It is common for people who work together to see each other outside of office hours; moreover, these relationships can last years or decades. So, the “honest services” issue may reside in a grey area of a strong and ongoing working relationship between two entities that serve a third entity. The prosecution must prove that there were bribes or kickbacks rather than the good faith belief that the referral or work involved an honest opinion with no financial gain or benefit.

Fraud by mail or wire is a federal crime tried in federal courts. Prison sentences can be steep, and there may also be financial repayment to the harmed parties. Since the law leaves much room for interpretation, working with an attorney who handles these cases is often essential.