946
Tangible Versus Intangible Property Rights
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In Carpenter, 484 U.S. 19, 25 (1987), the Court confirmed
that
"McNally did not limit the scope of § 1341 to tangible as
distinguished from intangible property rights." The Court held that the
intangible nature of "confidential business information" does not make it
any
less "property" protected by the mail and wire fraud statutes. Id.
Carpenter accordingly distinguished intangible property rights, which
were
still protected by the mail and wire fraud statutes, and intangible
non-property
rights, which were not protected. Cf. United States v.
Lemire, 720
F.2d 1327, 1336 (D.C. Cir. 1983) ("[A]lthough the scheme to defraud must
threaten
some cognizable harm to its target, that harm need not be a deprivation of
tangible property or money; criminal fraud encompasses schemes to defraud
persons
of significant intangibles as well."), cert. denied, 467 U.S. 1226
(1984).
QUERY: Whether interests such as contract rights, licenses,
permits,
trade secrets, franchises, government grants, goodwill, market share, etc.,
are
intangible or tangible property rights that can be the subject of a mail or
wire
fraud violation. See, e.g., Carpenter, 484 U.S. at 25
(suggesting
that contractual right to honest and faithful services is too ethereal in
itself
to fall within the protection of the mail fraud statute); United States
v.
DeFries, 43 F.3d 707, 709-11 (D.C. Cir. 1995) (union ballots are
tangible
property); United States v. Henry, 29 F.3d 112, 114-15 (3d Cir. 1994)
(fair bidding opportunity is not a property right); United States v. F.J.
Vollmer & Co., 1 F.3d 1511, 1521 (7th Cir. 1993) ("It is well
established
that the government's regulatory interests are not protected by the mail
fraud
statute.") (citing cases concerning licenses and permits), cert.
denied,
114 S.Ct. 688 (1994); United States v. Loney, 959 F.2d 1332, 1336
(5th
Cir. 1992) (flight award coupons are property); United States v.
Madeoy,
912 F.2d 1486, 1492 (D.C. Cir. 1990) (a FHA insurance commitment, by which
the
Government promises to pay the lender if the borrower defaults on the loan,
is
a "property interest," not an "intangible right" because it involves the
Government's "control over how its money [is] spent."), cert. denied,
498
U.S. 1105 and 498 U.S. 1110 (1991). The United States Court of Appeals for
the
District of Columbia's decision in DeFries provides a brief survey of
cases finding property interests in permits, city liquor licenses, medical
licenses and other items. See generally, 43 F.3d at 709-10 and n. 2;
see also Laura A. Eilers & Harvey B. Silikovitz, Mail and Wire
Fraud, 31 Am. Crim. L. Rev. 703, 706-11 (1994) (discussing "traditional
frauds" and "frauds involving intangible rights").
QUERY: How to determine whether an interest is property? See,
e.g., United States v. D'Amato, 39 F.3d 1249, 1258 (2d Cir. 1994)
(shareholder's property rights to information are defined by state law and
the
law of fraud); cf. Henry, 29 F.3d at 115 ("[T]o determine
whether
a particular interest is property for purposes of the fraud statutes, we
look to
whether the law traditionally has recognized and enforced it as a property
right."); see also Eilers & Silikovitz, 31 Am. Crim. L. Rev. at 706
n. 19
(case cited).
[cited in USAM 9-43.100] | |