United States v. Sampson
1962 U.S. LEXIS 150, 371 U.S. 75, 9 L. Ed. 2d 136 (1962)
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Rule of Law:
A mailing that is part of a fraudulent scheme, designed to lull victims into a false sense of security and prevent detection of the fraud, can be considered 'for the purpose of executing' the scheme under the federal mail fraud statute, even if the mailing occurs after the money has been obtained.
Facts:
- The defendants, who were officers and employees of a nationwide corporation, operated a scheme where they purported to help businessmen obtain loans or sell their businesses.
- The defendants promised clients extensive services for an 'advance fee' but had no intention of providing any substantial help.
- Salesmen were trained to use deceptive tactics to convince prospects to sign applications and pay the fee, with the false assurance that the fee was refundable if the application was not accepted.
- As part of the scheme, salesmen immediately converted victims' checks into cashiers' checks and forwarded them with the applications to a regional office.
- The company systematically accepted all applications that were accompanied by the correct fee and immediately deposited the money.
- After securing the money, the defendants mailed an accepted application and a form letter to the victim.
- The scheme, from its inception, included these post-payment mailings for the specific purpose of lulling the victims into believing services would be performed, thereby preventing complaints and delaying detection of the fraud.
Procedural Posture:
- The defendants were indicted in a United States District Court for mail fraud under 18 U.S.C. § 1341 and conspiracy to commit mail fraud.
- The defendants filed a motion to dismiss the charges.
- The District Court dismissed 34 substantive counts and the conspiracy count, holding that because the mailings occurred after the defendants had obtained the money, they could not have been 'for the purpose of executing' the scheme.
- The United States Government, as the appellant, made a direct appeal of the dismissal to the Supreme Court of the United States.
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Issue:
Does the use of the mails to send victims 'lulling letters' after money has already been obtained from them constitute a mailing 'for the purpose of executing' a fraudulent scheme in violation of the federal mail fraud statute, 18 U.S.C. § 1341?
Opinions:
Majority - Mr. Justice Black
Yes. The use of the mails to send lulling letters after money has been obtained can constitute a mailing 'for the purpose of executing' a fraudulent scheme if it is an integral part of that scheme. The Court reasoned that the mail fraud statute does not create an automatic rule that a scheme is fully executed the moment money is obtained. Here, the indictment alleged that the defendants' plan, from the start, contemplated using the mails to lull victims into a false sense of security. Unlike in Kann v. United States and Parr v. United States, where mailings were incidental or performed by third parties after the scheme had reached fruition, these mailings were a deliberate and crucial part of the defendants' ongoing fraudulent enterprise, designed to prevent its discovery and ensure its continuation. Therefore, a jury could properly find that such mailings were 'for the purpose of executing' the scheme.
Dissenting - Mr. Justice Douglas
No. The use of mails solely to tranquilize existing victims after the money is obtained is not 'for the purpose of executing' a scheme to obtain money. The dissent argues that the objective of the scheme described—obtaining money by false pretenses—was fully accomplished before the mails were used. Once the money was obtained, the scheme, as defined by the statute, had reached its conclusion. Mailing letters to lull already-defrauded victims does not further the execution of the scheme to get money from them. This decision improperly qualifies the precedent set in Parr v. United States and encourages federal prosecution in fields of fraud that are essentially local matters.
Analysis:
This decision formally establishes the 'lulling letter' doctrine within mail fraud jurisprudence, significantly broadening the scope of the statute. The Court clarified that a fraudulent scheme's execution does not necessarily end when the schemer obtains the money. By recognizing that post-fraud communications intended to delay detection are an integral part of the overall scheme, the ruling makes it easier for prosecutors to secure indictments in complex, long-running frauds where concealment is a key component. This precedent has become a cornerstone for mail and wire fraud prosecutions involving subsequent communications that facilitate the continuation or concealment of the criminal enterprise.
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