Carrie Cohen authored an article for New York University School of Law’s Program on Corporate Compliance and Enforcement discussing the recent U.S. Supreme Court decisions in Percoco v. United States and Ciminelli v. United States, which narrow the scope of honest services fraud and eliminate the so-called “Right to Control” theory in federal fraud cases, respectively.
“The issue in Percoco was whether the jury was properly instructed that under the honest services fraud statute, private persons could owe a fiduciary duty to the public if they exercised control in and with the government,” Carrie wrote. “In finding this jury instruction impermissibly vague, the Supreme Court reasoned that such an instruction potentially could create a fiduciary duty to the public for a wide range of private individuals including ‘wise counselors,’ ‘lobbyists,’ and ‘political party officials’ on whom public officials have long relied. In reversing Percoco’s conviction and remanding the case back to the district court, the Court did not foreclose the possibility that a person nominally outside public employment could have a fiduciary duty to the public but gave little guidance on what factors would create such a duty other than citing traditional notions of agency.”
Read the full article.