Outrage rippled across the country this month when news broke that wealthy, and in some cases, famous, parents were allegedly bribing school officials to admit their children into prestigious universities. Many of these parents are now facing criminal charges, but prosecutors in several states are struggling to pin down a strategy that will lead to convictions of conspiracy to commit mail or wire fraud.
As pointed out in a recent article in the Los Angeles Times, fraud charges depend on proving that someone was deprived of a specific property through deception or misrepresentation. When the "property" in question is as amorphous as a spot in a top-tier college, there is an opportunity for creative defense.
Is admission to college "property?"
In general, laws relating to mail and wire fraud require the person or entity that has been defrauded to suffer a loss because of a misrepresentation of an important fact. So, prosecutors must answer the question: What loss did the universities suffer?
Various courts have found that schools do in fact have a property interest in the decision power relating to admitting students. But, a creative defense could lead juries down a different path. With no property interest at stake, a fraud charge is unlikely to stick.
Why wire fraud?
Wire fraud, defined as using any electronic communication in a fraudulent scheme, is used by prosecutors as a way to federalize certain conduct. Given widespread calls for those who allegedly paid off school officials to be punished, prosecutors are doing everything they can to get these charges into federal court.
Wire and mail fraud charges come with high stakes
Since they are federal crimes, wire and mail fraud charges can result in significant fines and up to twenty years in prison. Penalties become even more severe when financial institutions are involved.
As these college admissions cases move forward, case law will likely create more specific guidelines when it comes to what constitutes "property." In the meantime, the defense side faces a unique opportunity to shape the rules in a way that protects their clients' rights.