United States v. Leo Christy Condolon
600 F.2d 7, 1979 U.S. App. LEXIS 14207 (1979)
Rule of Law:
The federal wire fraud statute, 18 U.S.C. § 1343, applies to schemes to defraud that deprive victims of intangible interests like time, effort, money, and expectations, even if the scheme does not aim to obtain tangible property or involve the breach of a fiduciary relationship.
Facts:
- Leo Christy Condolon rented an apartment suite, obtained a business license, and placed numerous newspaper advertisements under the name Cinema Enterprises.
- Condolon posed as a talent agent and producer connected with major movie companies.
- He falsely represented to women who contacted him that he could place them in legitimate and well-paid modeling and acting jobs.
- Condolon also told certain women that their employment depended upon their willingness to submit to his sexual advances.
- As a result of Condolon's activities, a number of women spent time, effort, and money in taking leave from their jobs, hiring baby-sitters, travelling to his office, and memorizing scripts.
- Some women yielded to Condolon's sexual advances.
- Condolon at no time intended to secure jobs for any of the women; his enterprise was solely a scheme to gratify his sexual desires.
- Condolon used a telephone in connection with his operation of this bogus talent agency.
Procedural Posture:
- Leo Christy Condolon was convicted in a federal trial court for wire fraud in violation of 18 U.S.C. § 1343.
- Condolon, as appellant, appealed his conviction to the United States Court of Appeals for the Fourth Circuit.
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Issue:
Does a scheme involving an elaborate commercial facade and misrepresentations to induce women to spend time, effort, and money, and some to submit to sexual advances, for the sole purpose of gratifying the defendant's sexual desires, constitute a 'scheme to defraud' under the federal wire fraud statute (18 U.S.C. § 1343), even if it does not seek tangible property or involve a breach of fiduciary duty?
Opinions:
Majority - Butzner, Circuit Judge
Yes, a scheme involving an elaborate commercial facade and misrepresentations to induce women to spend time, effort, and money, and some to submit to sexual advances, for the sole purpose of gratifying the defendant's sexual desires, constitutes a 'scheme to defraud' under the federal wire fraud statute (18 U.S.C. § 1343), even if it does not seek tangible property or involve a breach of fiduciary duty. The court reasoned that Condolon’s actions constituted an elaborate commercial facade surrounding a completely fraudulent enterprise, as he never intended to provide the advertised career opportunities. The gravamen of the wire fraud offense is the misuse of interstate communication facilities to execute 'any scheme or artifice to defraud,' and it concerns itself with neither the victim's loss nor the defendant's gain, nor does it require a design to obtain money or property or involve a breach of a fiduciary relationship. The court found that the time, effort, money, and expectations of which Condolon defrauded the women are comparable to the intangible interests protected in cases like United States v. Louderman (depriving privacy) and United States v. States (depriving intangible civil rights through voter fraud). The court also rejected Condolon's constitutional claims, stating that the application of the statute was foreseeable due to the broad concept of fraud, and the prosecution did not infringe on his right to privacy, as it targeted the fraudulent enterprise and use of the telephone, not private sexual activities.
Analysis:
This case significantly broadens the interpretation of 'scheme to defraud' under federal fraud statutes, establishing that the offense is not limited to schemes involving tangible property or fiduciary breaches. It clarifies that depriving victims of intangible interests like time, effort, money, and expectations, even for a defendant's non-pecuniary gain, falls within the statute's scope. This ruling reinforces the idea that the fraudulent nature of the scheme and the use of interstate communications are the critical elements, making federal wire fraud a powerful tool against various deceptive practices beyond traditional financial crimes.
