Eleventh Circuit Holds that United States Must Be Target of 18 U.S.C. § 371 Conspiracy to Defraud

The Eleventh Circuit Court of Appeals has held that the United States must be the ultimate target of a conspiracy to defraud under 18 U.S.C. § 371. Jildardo Mendez wanted a Florida commercial drivers license (CDL), but spoke very poor English. Mendez contacted Steven Baez, a member of the Florida Army National Guard, who was illegally selling DA-348E forms, which were Department of the Army Operator Qualification Records which would allow an individual to waive completion of Florida CDL testing. Mendez paid Baez $1,000 for the form and obtained a Class A CDL, but was arrested during a subsequent investigation of Baez, and charged and convicted of conspiracy to defraud the United States in violation of § 371, and unlawful production of a Florida CDL in violation of 18 U.S.C. § 1028.

Mendez appealed, arguing that the evidence was insufficient to support his conviction pursuant to § 371 because there was no evidence that he was aware of any connection between a Florida CDL and the federal government, and the Eleventh Circuit agreed with him and reversed in United States v. Mendez, No. 07-13443, 2008 WL 2117607, *5 (11th Cir. May 21, 2008) (per curiam). The Court observed that § 371, which provides that it is a crime to “conspire either to commit any offense against the United States, or to defraud the United States, or any agency thereof in any manner of for any purpose…,” contains two clauses. Id. at *2. Under the “any offense” clause, the government does not have to allege that the United States was the intended victim of the conspiracy, however under the “defraud” clause, “‘the government must prove that the United States was the ultimate target of the conspiracy,” whereas under § 371's “any offense…’” Id. at *2 (quoting United States v. Harmas, 974 F.2d 1262 (11th Cir.1992)). The Court then discussed the United States Supreme Court’s decision in Tanner v. United States, 483 U.S. 107 (1987), in which the Supreme Court reversed the defendants’ convictions for conspiracy to defraud under § 371 where the victim of the conspiracy, the federal Rural Electrification Administration, was a private corporation which merely received financial assistance from, and was supervised by, the United States. Id. The Eleventh Circuit held:

Mendez’s § 371 conviction is precisely what the Tanner Court meant to prevent. The facts to which the parties stipulated do not show that Mendez even knew the federal government was in involved in the issuance of Florida CDLs, let alone that the United States was the ultimate intended target of Mendez’s conduct. Accordingly, under Tanner, there was no basis for the district court to find that Mendez was guilty beyond a reasonable doubt of defrauding the United States under 18 U.S.C. § 371.

Id. at *3.

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