White Collar and Government

Investigations Attorneys


Privileged Relationships

A final context in which fiduciary breaches implicate the mail and wire fraud statutes is in the realm of privileged relationships such as attorney-client and doctor-patient. IS THIS TRUE POST SKILLING? It is (see below). The use of the fiduciary position in such a way as to threaten the potential of pecuniary loss will be sufficient to find the required “scheme to defraud” in these contexts. As in most fiduciary mail/wire fraud cases, mere breaches will not suffice without at least posing the threat economic harm to the other party. Some breaches have been characterized as a deprivation of the right to privacy (e.g. the right to keep an address secret). The issue here is whether such privacy is economically valuable, though some courts have found such a deprivation to be enough by itself. Other courts will enter the “property interest” analysis, and stretch the concept to fit nearly any deprivation. The outlying example is the case of the con artist who used his phony talent agency to meet women. In analyzing what property interests the women had been deprived of, the court considered their time, effort, travel expenses, as well as general privacy rights.

Of course, as is true with most honest services fraud questions, the privileged relationship context was affected by Skilling. The Skilling decision mandated the requirement of a fiduciary relationship, which is certainly present in a privileged relationship such as a client and his attorney. It is less clear whether Skilling limited the applicability of the statute to only bribery and kickback schemes in this setting. Certainly a plaintiffs attorney who took kickbacks from a corporation in exchange for a lower settlement would be eligible for prosecution. On the other extreme, the honest services statute would never be construed to outlaw all non-disclosures between an attorney and his client. The question is yet to be resolved by the high courts, but it is clear that bribery and kickback schemes are prohibited by the statute, along with most likely any failure to disclose information for purposes of illicit financial gain.