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Seventh Circuit Review

Abstract

Public officials, as well as public employees, owe the public the fiduciary duty of providing their honest services. The mail fraud statute, 18 U.S.C. § 1341, proscribes using the mails to carry out “any scheme or artifice to defraud.” It further defines, in § 1346, “any scheme or artifice to defraud” to include “a scheme or artifice to deprive another of the intangible right of honest services.” In passing these statutes, Congress never defined the terms “scheme or artifice,” “intangible right” or “honest services.” Because of this failure, the appellate courts have adopted limiting principles to prevent minor breaches of fiduciary duties from becoming federal crimes. The Seventh Circuit adopted the limiting principle “misuse of office for private gain” in United States v. Bloom. Recently, the court refined the Bloom standard in United States v. Thompson holding that “neither an increase in salary for doing what one's superiors deem a good job, nor an addition to one's peace of mind, is a ‘private benefit.’” This holding conflicts with previous case law from the District Court for the Northern District of Illinois, concluding that one’s job or the prospect of future employment can be a private gain under Bloom. Because the Seventh Circuit appears to have distinguished Thompson from the cases in the Northern District of Illinois rather than overruling them, the court may have inadvertently created a loophole through which public employees can engage in “subtle schemes” and not be punished under § 1346. This Note concludes that the Seventh Circuit could have distinguished Thompson from the Northern District cases on the grounds that a “scheme,” as defined in its normal usage, existed is those cases, but did not exist in Thompson. The Note further argues that had the court made a threshold determination of whether or not a “scheme” existed in Thompson, it would not have had to reach the private gain issue, thereby preventing the problems raised after Thompson.

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