"Stop the Steal" Meets the Fraud Statute
Donald Trump's pending case in Washington, DC involves his alleged efforts to overturn the 2020 election results. While the facts are against him, there is a possibility that the law is on his side.
Justice Briefs is a weekly newsletter devoted to federal criminal prosecution. The federal government’s evolution over the last 230 years has given federal prosecutors significant discretion. Few realize it exists and even fewer know how it is used. Justice Briefs aims to make federal prosecutions and prosecutors more accessible to the general public. Please help me in this endeavor by subscribing and sharing with others.
Justice in Brief
*In a mass shooting case in Colorado from November, the shooter was charged with a hate crime as the shooting was motivated by the perceived sexual orientation or gender identity of the victims.
*In Hawaii, a person received a 63-month sentence for violating the Resource Conservation and Recovery Act. The defendant removed 35 drums of waste from a dry cleaning facility without the proper storage precautions and the required permits. He then falsely stated the disposition of the drums.
*A woman who ran a tax preparation service in Maryland entered a guilty plea to preparing false tax returns. She admitted to inflating the income due her clients, receiving over $400,000 from the IRS, and obtained $83,000 by fabricating claims under the Paycheck Protection Program in effect during the COVID pandemic.
Fraud and “Stop the Steal”
Last week’s issue discussed how federal prosecutors, especially in fraud cases, interpret the law broadly to encompass as much conduct as possible. The Supreme Court, in turn, limits these broad interpretations. The Court has ruled consistently, nearly always unanimously, and across ideological lines in these cases. The ongoing criminal case against former President Donald Trump, charging him with conspiring to defraud the United States in the weeks following the 2020 Presidential election, is on a potential collision course with the Court’s line of cases. The only thing that could divert it (assuming the former President is convicted) is a 100-year old Supreme Court case.
The basic facts of the District of Columbia federal case against Donald Trump are relatively undisputed. Even before the November 2020 election, President Trump asserted that the only way he would lose was if the election was stolen from him. When the election results demonstrated he had lost, he began his “Stop the Steal” campaign. He and his supporters brought law suits, cajoled election officials in various states, presented alternative slates of electors, contrived constitutional arguments, and lobbied the Vice President to reject electoral votes all in the name of electorcal fraud. In reality, there was no significant electoral fraud in the 2020 Presidential election and many of Trump’s own attorneys and officials told him this. Despite this he continued pressing his “Stop the Steal” campaign and it resulted in his supporters storming the Capitol building on January 6, 2021.
A long and multi-faceted investigation began that culiminated in an indictment in July 2023. Special counsel Jack Smith and his team obtained a four-count indictment against former President Trump. The first count alleges a violation of Title 18, United States Code, Section 371. It criminalizes frauds against the United States, reading:
If two or more persons conspire either to commit any offense against the United States, or to defraud the United States, or any agency thereof in any manner or for any purpose, and one or more of such persons do any act to effect the object of the conspiracy, each shall be fined under this title or imprisoned not more than five years, or both.
Special Counsel Jack Smith, in the indictment, modified and expanded upon the statute’s language. The indictment reads:
From on or about November 14, 2020, through on or about January 20, 2021, in the District of Columbia and elsewhere, the Defendant, DONALD J. TRUMP, did knowingly combine, conspire, confederate, and agree with co-conspirators, known and unknown to the Grand Jury, to defraud the United States by using dishonesty, fraud, and deceit to impair, obstruct, and defeat the lawful federal government function by which the results of the presidential election are collected, counted, and certified by the federal government.
Smith’s wording derived from a century-old Supreme Court case interpreting the statute. In Hammerschmidt v United States (265 US 182, 1924), the Court decided:
To conspire to defraud the United States means primarily to cheat the government out of property or money, but it also means to interfere with or obstruct one of its lawful governmental functions by deceit, craft or trickery, or at least by means that are dishonest. It is not necessary that the government shall be subjected to property or pecuniary loss by the fraud, but only that its legitimate official action and purpose shall be defeated by misrepresentation, chicane, or the overreaching of those charged with carrying out the governmental intention.
By tracking the languarge from Hammerschmidt, Smith hopes to show that his interpretation of the statute is supported by Supreme Court precedent. This is important because there is no evidence Donald Trump defrauded the United States government out of anything. Instead, according to Smith, the President used deceit to prevent the electoral college votes from being counted.
Smith needs to emphasize this precdent because his charging decision runs head-long into a constantly growing line of precedent that construes fraud statutes narrowly. During its 2022-2023 term the Court added two cases to its line. In United States v Dubin, the Court narrowly construed the meaning of “use” in connection with identification documents. More significantly, the Court also ruled in Percoco v United States, that when someone owes a duty of honest services should be narrowly construed to include only those who actually advise those in government. These cases built upon Kelly v United States, a case interpreting the same statute used to prosecute Donald Trump.
Kelly resulted from the so-called “Bridgegate” scandal that occured in 2013. The government charged two of New Jersey Governor Chris Christie’s staff for their actions to close the George Washington Bridge that connected Fort Lee, New Jersey to Manhattan. They did this to punish the Fort Lee mayor who refused to endorse Christie’s re-election efforts. The defendants close the bridge by shutting down several lanes for a fake traffic study. The government argued that the scheme deprived the New York Port Authority of tolls and labor costs. The Supreme Court decided it was not sufficient for a conviction under Title 18, United States Code, Section 371. In doing so, it said
The evidence the jury heard no doubt shows wrongdoing—deception, corruption, abuse of power. But the federal fraud statutes at issue do not criminalize all such conduct…The realignment of the toll lanes was an exercise of regulatory power—something this Court has already held fails to meet the statutes’ property requirement. And the employees’ labor was just the incidental cost of that regulation, rather than itself an object of the officials’ scheme.
The Court ruled that deception, corruption, and abuse of power were not sufficient. The government must show that the purpose of the fraud was to deprive the government of property or something of value.
This brings Kelly and Hammerschmidt into apparent conflict. Kelly limits Section 371 to property whereas Hammerschmidt indictates that Section 371 can include impeding a lawful government function. Should the Court hear the Trump case, it would have to decide whether to continue its decades-long endeavor to narrowly interpret criminal statutes or adhere to the broader reading given to Hammerschmidt. Given that Hammerschmidt is 100 years old, the Court will likely adhere to its present line of decisions.
Adhering to its line of precedent would also be consistent with Hammerschmidt. In Hammerschmidt, the defendants
willfully and unlawfully conspired to defraud the United States by impairing, obstructing, and defeating a lawful function of its government, to-wit, that of registering for military service all male persons between the ages of 21 and 30, as required by the Selective Service Act of May 18, 1917, c. 15, 40 Stat. 76, through the printing, publishing, and circulating of handbills, dodgers, and other matter intended and designed to counsel, advise, and procure persons subject to the Selective Act to refuse to obey it.
The Court, based on these facts, concluded there is no precedent for the position that “the legal definition of a conspiracy to defraud the United States [includes] a mere open defiance of the governmental purpose to enforce a law by urging persons subject to it to disobey it.” Based on this, the former President could assert that his condct was, at best, defiance of the government’s efforts to enforce the law. Simply stated, he disagreed with the results and he called on people to protest.
While it is likely that the special counsel’s team has considered this issue, they have proceeded with the charge. Whether they prevail remains to be seen. This is not the first time Jack Smith has approached a case in this manner. As next week’s issue will discuss, when Smith led the Justice Department’s Public Integrity Section, he pursued several of the cases that the Supreme Court ultimately rejected.
I hope you enjoyed this issue and that it made you stop and think. I would love to hear any comments, questions, concerns, or criticisms that you have. Leave a comment or send a message! Also, if you enjoyed this or if it challenged your thinking, please subscribe and share with others!