Good Faith Defense in Mail and Wire Fraud Cases

The most common defense to mail or wire fraud is that the defendant lacked any intent to defraud. This is known as the good faith defense. This is a complete legal defense, which means it shows an absence of fraud and therefore must result in acquittal.

There is a current split of authority regarding jury instructions on the good faith defense, and the issue is an important one. On one hand, some courts instruct the jury that the government must disprove good faith beyond a reasonable doubt; in others, the courts hold that the jury instruction on specific intent is sufficient to ensure good faith has been disproved.

Honest Belief vs. False Representation

It is important to note that honest belief in the ultimate success of the undertaking doesn’t negate false representations. Thus, for example, even if you believe that an investment will be successful, it is still fraud to misrepresent earnings or customer base.

As many courts have stated in analyzing this defense to wire fraud and mail fraud, one cannot purify a scheme that is in fact fraudulent.

Evidence Supporting a Good Faith Defense

Various forms of evidence and testimony are permitted to establish the good faith defense. Examples include:

• Evidence that no one was in fact defrauded
  
  
• Compliance with state law requirements
  
  
• Reliance on advice of counsel
  
  
• Lack of financial motive by the defendant
  
  
• Payment of refunds or expected returns to some (if not all) customers
  
  

Fiduciary Duty and Higher Due Diligence Standard

An important caveat that tends to cause significant jury confusion is the fiduciary relationship, which entails a standard of utmost good faith between the parties. Depending on the jurisdiction, this can increase the amount of due diligence required prior to making a representation to a client, which in turn might raise the threshold for a successful good faith defense.

Serving Clients Across the Southeast

Our legal team helps individuals facing mail or wire fraud charges throughout the Southeast, including:

Alabama: Birmingham, Montgomery, Huntsville, Mobile, Tuscaloosa, Dothan, Anniston
Georgia: Atlanta, Augusta, Albany, Columbus
Florida: Pensacola, Tallahassee, Panama City
Mississippi: Jackson, Gulfport, Biloxi
Tennessee: Memphis, Nashville, Chattanooga, Knoxville, Greenville