United States v. Kieffer
2012 WL 2087190, 2012 U.S. App. LEXIS 11797, 681 F.3d 1143 (2012)
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Rule of Law:
For a wire fraud conviction under 18 U.S.C. § 1343, evidence that a website's content was uploaded to a server in one state and accessed by users in multiple other states is sufficient to establish the required 'interstate commerce' element. Furthermore, a transmission is made for the 'purpose of executing' a fraudulent scheme if the website is an integral part of luring and deceiving victims.
Facts:
- Howard Kieffer, who was not a licensed attorney, operated a business called Federal Defense Associates out of Santa Ana, California, holding himself out as a criminal defense lawyer.
- In May 2004, Kieffer registered the domain name boplaw.com and created a website hosted on servers in Virginia to promote his fraudulent legal services.
- The website described his firm's attorneys as being 'bound by the Rules of Professional Responsibility' and listed Kieffer as 'Executive Director.'
- In June 2007, Stephen Bergman viewed boplaw.com from his residence in Tennessee and, believing Kieffer was a lawyer, hired him to represent his sister, Gwen Bergman, in a criminal case in Colorado.
- To represent Gwen Bergman, Kieffer falsely told the clerk for the District of Colorado that he was licensed to practice law in the District of Columbia.
- Edward Pluss, Gwen Bergman's court-appointed public defender, also viewed boplaw.com from his computer in Colorado before withdrawing from the case.
- Stephen Bergman ultimately paid Kieffer a total of $65,750 for the fraudulent legal representation of his sister.
- Kieffer’s scheme was exposed when a court in North Dakota began investigating false statements he made on a separate application for admission to practice there.
Procedural Posture:
- A grand jury in the U.S. District Court for the District of Colorado returned a superseding indictment charging Howard Kieffer with wire fraud, making false statements, and contempt of court.
- At trial, Kieffer moved for a judgment of acquittal on the wire fraud count at the close of the government's case, which the district court (the trial court) denied.
- A jury found Kieffer guilty on all counts.
- The district court sentenced Kieffer to 57 months imprisonment on the wire fraud and false statements counts, to run consecutively to a prior 51-month sentence from a separate case in the District of North Dakota.
- Kieffer (Appellant) appealed his convictions and sentence to the U.S. Court of Appeals for the Tenth Circuit, arguing insufficiency of the evidence for the wire fraud conviction.
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Issue:
Is evidence that a defendant operated a fraudulent website hosted in one state, which was then accessed by users in at least two different states to whom he sold fraudulent services, sufficient to prove the 'interstate commerce' and 'purpose of executing a scheme' elements of federal wire fraud under 18 U.S.C. § 1343?
Opinions:
Majority - Baldock, Circuit Judge.
Yes, this evidence is sufficient to prove the elements of wire fraud. The interstate commerce requirement is met because a website's content, hosted on an origin server in one state, must be transmitted across state lines to be accessed by users on computers in multiple other states. The 'purpose' element is satisfied because the website was not merely incidental to the fraud; it was an integral part of the scheme, used to attract and deceive victims into paying for fraudulent services. The court distinguished its prior precedent in United States v. Schaefer, which held that a single user accessing the internet within one state was insufficient proof of an interstate transmission. Here, the evidence showed users in multiple states (Tennessee and Colorado) accessed the website hosted in another state (Virginia), creating a necessary interstate link. The court reasoned that Kieffer 'set forces in motion which foreseeably would involve' the use of interstate wires by creating a website to promote his nationwide fraudulent practice. The website's deceptive content was essential to convincing victims like Bergman that Kieffer was a legitimate attorney, thus making the transmission of that content a direct furtherance of the fraudulent scheme.
Analysis:
This decision provides a clear and practical standard for establishing the interstate commerce element of wire fraud in cases involving websites. By holding that access from multiple states creates a reasonable inference of an interstate transmission, the court supplied prosecutors with a straightforward evidentiary path for online fraud cases. The ruling distinguishes modern, multi-state internet fraud from purely local internet activity, clarifying that the architectural nature of the internet (centralized servers delivering content across borders) makes nationwide schemes inherently interstate. This precedent solidifies the application of the wire fraud statute to online criminal enterprises, ensuring that perpetrators cannot evade federal jurisdiction by claiming their actions were not provably interstate.
