(A)  Elements of the Aggravated Felony Category.  A conviction is an aggravated felony for immigration purposes if the offense involves “fraud or deceit in which the loss to the victim or victims exceeds $10,000.”[606]  This ground therefore requires the following elements:

 

            (1)  a conviction for an offense

            (2)  that involves fraud or deceit

            (3)  for which the loss to the victim(s) exceeds $10,000.

 

The INA does not define either the term “fraud” or “deceit,” but an offense requiring an intent to defraud will fall within this aggravated felony ground.[607]

 

            (1)  Requirement of an Intent to Defraud or Deceive.  The Third Circuit examined the scope of this ground in Valansi v. Ashcroft,[608] and held that any offense with either an intent to defraud or an intent to deceive will qualify.  The conviction there was for misapplication of bank funds under 18 U.S.C. § 656, which requires an intent to injure or defraud.  Recognizing that an intent to injure, as opposed to an intent to defraud, was insufficient to establish an element of fraud or deceit, the court held that the statute was divisible for aggravated felony purposes.[609] 

            The court held that the language “an offense that — involves fraud or deceit” should be interpreted as requiring an intent to defraud or deceive as an element of the offense before the offense will be considered an aggravated felony.[610]

The word “involves” means “to have within or as part of itself” or “to require as a necessary accompaniment.” Webster’s Third New International Dictionary at 1191. Thus, an offense that “involves fraud or deceit” is most naturally interpreted as an offense that includes fraud or deceit as a necessary component or element. It does not require, however, that the elements of the offense be coextensive with the crime of fraud.

 

Thus, the use of the word “involves” expands the scope of § 1101(a)(43)(M)(i) to include offenses that have, at least as one element, fraud or deceit.[611]

 

            Although there is little authority, it thus appears that an intent to defraud or deceive is a necessary element to give rise to the aggravated felony ground of deportation.  No cases expanding the ground to allow for application without an intent to deceive or defraud were found.[612] 

 

The label given an offense is not, by itself, determinative of whether the offense involves fraud or deceit.  A conviction of securities fraud, for example, may be made without an express intent to defraud, and thus may not constitute an offense involving fraud for purposes of this aggravated felony category.[613]

            (2)  Definition of Fraud.  The Valansi court set forth the definition of fraud and deceit.  The Court noted that the BIA has held that “fraud” should be defined “in the commonly accepted legal sense, that is, as consisting of false representations of a material fact made with knowledge of [their] falsity and with intent to deceive the other party.  The representation must be believed and acted upon by the party deceived to his disadvantage.”[614] 

            (3)  Definition of Deceit.  The Valansi court set forth its own definition of “deceit:”

 

The term “deceit” also is not defined in the INA. However, it is commonly             perceived as “[t]he act of intentionally giving a false impression,” Black’s Law Dictionary 413 (7th ed.1999), or “the act or process of deceiving,” which is in turn defined as “to cause to believe the false.” Webster’s Third New International Dictionary of the English Language Unabridged 584 (3d ed.1993).[615]

 

(4)  Relationship with Other Aggravated Felony Categories.  There are occasions where a single conviction may fall within more than one section of the aggravated felony definition.  If a conviction for perjury[616] or theft,[617] for example, involved an act of fraud or deceit, and there was a loss of $10,000, the INS might charge the perjury conviction under the fraud or deceit ground even if the sentence imposed was less than one year.  However, because the courts may not look beyond the record of conviction to establish the elements of the offense, see § 6.21, supra, counsel may be able to protect a defendant with a conviction of theft with a loss in excess of $10,000, but no one-year sentence imposed, by ensuring that the record of conviction does not establish that the offense “involve[d]” fraud or deceit.

 

If the offense was in federal court, treatment under the U.S. Sentencing Guidelines may serve as evidence that, for example, an offense involving theft should not be charged as fraud.  For example, if there was no enhancement of the sentence for an offense involving fraud under USSG § 2Fl.1(b), then the offense should be held not to have included fraud.[618]

 

The Ninth Circuit has held — in a now vacated opinion — that a federal tax evasion conviction constituted a conviction of an offense involving fraud, for purposes of this ground of deportation, even though the statute was not listed in the aggravated felony “tax evasion” ground.[619]  This decision was incorrect, and hopefully the error will not be repeated when the issue surfaces again.

[606] INA § 101(a)(43)(M)(i), 8 U.S.C. § 1101(a)(43)(M)(i).

[607] Valansi v. Ashcroft, 278 F.3d 203 (3d Cir. 2002); Matter of Onyido, 22 I. & N. Dec. 552 (BIA 1999) (submitting a false claim with intent to defraud insurance company held aggravated felony); Matter of Ayala-Arevalo, 22 I. & N. Dec. 398 (BIA 1998) (conspiracy in violation of 18 U.S.C. § 371 (1994) (conspiracy to defraud the United States by making false statements to a department of the United States).

[608] Valansi v. Ashcroft, 278 F.3d 203 (3d Cir. 2002).

[609] But see Moore v. Ashcroft, 251 F.3d 919 (11th Cir. 2001) (conviction under 18 U.S.C. § 656, misapplication of bank funds, falls within fraud/deceit aggravated felony definition because jury must find the defendant knowingly participated in a deceptive or fraudulent transaction.)  This decision does not address the defining issue in Valansi that an intent to injure does not establish fraud or deceit, and is therefore not persuasive on the question of the statute’s divisibility.

[610] Valansi v. Ashcroft, 278 F.3d 203 (3d Cir. 2002).

[611] Valansi v. Ashcroft, 278 F.3d 203, 209 (3d Cir. 2002).

[612] Ferreira v. Ashcroft, 390 F.3d 1091 (9th Cir. Dec. 1, 2004) (California conviction of welfare fraud, in violation of Welf. & Inst. Code § 10980(c)(2), as interpreted by California judicial decisions defining the elements of the offense, invariably requires an element of fraud or deceit, and therefore constitutes an offense involving fraud or deceit for purposes of qualifying as an aggravated felony as defined under INA § 101(a)(43)(M)(i), 8 U.S.C. § 1101(a)(43)(M)(i) triggering deportation); Sharma v. Ashcroft, 2003 U.S. App. LEXIS 3642 (3d Cir. Feb. 27, 2003) (federal conviction of bank fraud, in violation of 18 U.S.C. § 1344, held to be conviction of a crime involving fraud or deceit, and therefore an aggravated felony under INA § 101(a)(43)(M)(i), 8 U.S.C. § 1101(a)(43)(M)(i)).

[613] United States v. Tarallo, 380 F.3d 1174 (9th Cir. Aug. 20, 2004) (defendant may commit securities fraud “willfully” in violation of 15 U.S.C. § § 78 ff and 17 C.F.R. § 240.10b-5 even if he did not know at the time of the acts that the conduct violated the law if s/he intentionally acted with reckless disregard for the truth of material misleading statements).

[614] Matter of GG, 7 I. & N. Dec. 161, 164 (BIA 1956).

[615] Valansi v. Ashcroft, 278 F.3d 203, 209 (3d Cir. 2002).

[616] INA § § 101(a)(S), 8 U.S.C. § § 1101(a)(S).

[617] INA § § 101(a)(G), 8 U.S.C. § § 1101(a)(G).

[618] See K. Brady, California Criminal Law And Immigration, § 9.20 (2004).

[619] Abreu-Reyes v. INS, 292 F.3d 1029 (9th Cir. June 10, 2002) (federal conviction of subscribing to a false tax return, in violation of 26 U.S.C. § 7206(1), fell within the definition of aggravated felony as a fraud offense under INA § 101(a)(43)(M)(i), 8 U.S.C. § 1101(a)(43)(M)(i), even though the statute of conviction was not listed in the “tax fraud” section of the aggravated felony statute, INA § 101(a)(43)(M)(ii), 8 U.S.C. § 1101(a)(43)(M)(ii)), earlier mandate withdrawn, petition for rehearing granted, prior opinion withdrawn, petition for review granted, 350 F.3d 966 (9th Cir. November 21, 2003) (the entire opinion was vacated, including the holding that 26 U.S.C. § 7206(1) is an aggravated felony under INA § 101(a)(43)(M)(i))

AGGRAVATED FELONY - FRAUD
Dulal-Whiteway v. US Dep't of Homeland Sec., 501 F.3d 116 (2d Cir. Sept. 19, 2007) (federal conviction of using unauthorized access devices to obtain things of value aggregating $1000 or more, in violation of 18 U.S.C. 1029(a)(2), may be an aggravated felony under INA 101(a)(43)(M)(i), 8 U.S.C. 1101(a)(43)(M)(i)).

Lower Courts of Second Circuit

SAFE HAVEN - AGGRAVATED FELONY - FRAUD OFFENSES -- INTRODUCING MISBRANDED DRUG INTO INTERSTATE COMMERCE
Zhang v. United States, ___ F.Supp.2d ___, 2005 WL 3086840, 2005 U.S. Dist. LEXIS 28404 (E.D. N.Y. Nov. 18, 2005) (introducing a drug that had been misbranded with the intent to defraud and mislead, into interstate commerce, in violation of 21 U.S.C. 331(a), did not constitute a fraud offense aggravated felony under INA 101(a)(43)(M)(i), 8 U.S.C. 1101(a)(43)(M)(i)).

Fourth Circuit

AGGRAVATED FELONY THEFT - FRAUD IS NOT ALWAYS THEFT
Soliman v. Gonzalez, 419 F.3d 276 (4th Cir. Aug. 22, 2005) (although not mutually exclusive, it is not the case that all fraud offenses are necessarily also theft offenses; "theft" is a taking without the consent of the owner, "fraud" is a taking with consent that has been unlawfully obtained).

AGGRAVATED FELONY - FRAUD - DIFFERS FROM THEFT
Soliman v. Gonzales, __ F.3d __ (4th Cir. Aug. 22, 2005) (fraudulent use of a credit card," in violation of Virginia Code 18.2-195, with intent to obtain $200.00 in property, is not an aggravated felony theft offense; the BIA erred in finding that fraud offenses necessarily included theft; theft is distinguishable from fraud, in that theft requires the taking of property without consent, while fraud requires an intent to deprive through consent obtained through misrepresentation).
http://caselaw.lp.findlaw.com/data2/circs/4th/041990p.pdf

AGGRAVATED FELONY - THEFT - FRAUD - DIVISIBILITY - NUGENT ARGUMENT
California Penal Code 484(a) is a divisible statute covering both fraud and theft offenses, which are nearly mutually exclusive. If a fraud victims loss did not exceed $10,000, but a sentence of a year or more was imposed, the government might charge a fraud offense as an aggravated felony under the theft category. The government should be required to prove that the record clearly establishes the elements of theft, the definition of which includes a taking of property without consent. For a useful discussion of the difference between the elements of fraud and theft, see Soliman v. Gonzales, 419 F.3d 276, 282-284 (4th Cir. 2005). There the Court observed that: When a theft offense has occurred, property has been obtained from its owner "without consent"; in a fraud scheme, the owner has voluntarily "surrendered" his property, because of an "intentional perversion of truth," or otherwise "acted upon" a false representation to his injury. The key and controlling distinction between these two crimes is therefore the "consent" element -- theft occurs without consent, while fraud occurs with consent that has been unlawfully obtained. Id. at 282.      Under this definition Cal. P.C. 484(a) would be held divisible, since it includes both fraud and theft offenses.      The Third Circuit held that where an offense constitutes both theft and fraud, it must meet both requirements in order to be an aggravated felony: a years sentence must be imposed and loss to the victim must be greater than $10,000. Nugent v Ashcroft, 367 F.3d 162 (3rd Cir. 2004).

Fifth Circuit

AGGRAVATED FELONY - FRAUD - LOSS TO THE VICTIM
United States v. Love, __ F.3d __, 2005 WL 3164303 (5th Cir. Nov. 29, 2005) (court can order that a defendant pay unpaid restitution previously ordered as part of a sentence by another federal court in another federal case).
http://caselaw.lp.findlaw.com/data2/circs/5th/0430944cr0p.pdf

AGGRAVATED FELONY - FRAUD & DECEIT DEFINED
Omari v. Gonzales, __ F.3d __, 2005 WL 1714364 (5th Cir. July 25, 2005) (defining "fraud" as a "knowing misrepresentation of truth or concealment of a material fact to induce another to act to his or her detriment" and "deceit" as "the act of intentionally giving a false impression" as defined in Blacks Law Dictionary).
http://caselaw.lp.findlaw.com/data2/circs/5th/0361014p.pdf

FRAUD - TRANSPORTATION OF STOLEN PROPERTY
Omari v. Gonzales, __ F.3d __, 2005 WL 1714364 (5th Cir. July 25, 2005) (federal conviction for interstate transportation of stolen, converted, and fraudulently obtained property, in violation of 18 U.S.C. 2314, is not an aggravated felony under INA 101(a)(43)(M)(i) (fraud) for immigration purposes, as not all parts of 18 U.S.C. 2314 necessarily involve fraud or deceit).
http://caselaw.lp.findlaw.com/data2/circs/5th/0361014p.pdf

Seventh Circuit

AGGRAVATED FELONY - FRAUD - LOSS TO THE VICTIM - FEDERAL RELEVANT CONDUCT FROM DISMISSED COUNTS CANNOT BE INCLUDED IN LOSS CALCULATION OF CONVICTION
Knutsen v. Gonzales, 429 F.3d 733 (7th Cir. Nov. 22, 2005) (federal conviction of bank fraud, in violation of under 18 U.S.C. 1344, did not constitute aggravated felony fraud offense under INA 101(a)(43)(M)(i), 8 U.S.C. 1101(a)(43)(M)(i), since losses stemming from dismissed second count of two-count bank fraud indictment against alien could not be added to the losses from the first count, to which the guilty plea was entered, for purpose of showing that the loss to the victim exceeded $10,000, as required for the offense to constitute an aggravated felony, because neither the first count nor the plea agreement alleged a single scheme with a loss over $10,000, and stipulations in plea agreement did not amount to a concession that the total loss amount of fraudulent scheme exceeded $10,000), distinguishing Khalayleh v. INS, 287 F.3d 978 (10th Cir. 2002).

Ninth Circuit

AGGRAVATED FELONY - FRAUD OFFENSE - AGGRAVATED FELONY FRAUD IS COMMITTED WITH THE CONSENT OF THE VICTIM
Carrillo-Jaime v. Holder, 572 F.3d 747 (9th Cir. Jul.15, 2009) (California conviction of owning and operating a chop shop, in violation of Vehicle Code 10801 ("premises where any person has been engaged in altering, destroying, disassembling, dismantling, reassembling, or storing any motor vehicle or motor vehicle part known to be illegally obtained by theft, fraud, or conspiracy to defraud"), did not constitute a theft aggravated felony within the meaning of INA 101(a)(43)(G), 8 U.S.C. 1101(a)(43)(G), under the categorical approach, since the offense permits exercising control over property obtained by fraud, which is necessarily committed with the consent of the owner, and the conviction therefore does not require that the exercise of control over the property be "without consent" as required by the generic definition of theft aggravated felony).

AGGRAVATED FELONY - THEFT - THEFT BY FALSE PRETENSES
Carrillo-Jaime v. Holder, 572 F.3d 747 (9th Cir. Jul. 15, 2009) ("theft by false pretenses may be accomplished with the owner's consent. Theft by false pretenses has three elements: "(1) a false pretense or representation, (2) the intent to defraud the owner of his or her property, and (3) the false pretense or representation materially influenced the owner to part with the property." People v. Levine, 2007 WL 4248775 at *10 (Cal.Ct.App. Dec. 5, 2007) (citing People v. Ashley, 42 Cal.2d 246, 267 P.2d 271, 279 (1954)). "Theft by false pretenses does not require that the defendant take the property; it requires that the defendant use false pretenses to induce the other to give the property to him." Shannon, 78 Cal.Rptr.2d at 179. . . . Under California law, a person's false pretenses do not necessarily vitiate the owner's consent.").

AGGRAVATED FELONY - FRAUD - RESTITUTION - CALIFORNIA
"California law provides that a restitution order in favor of a government agency shall be calculated based on the actual loss to the agency." In considering a California welfare fraud conviction, the Ninth Circuit cited California Penal Code 1202.4(f) (providing that a victim of crime shall receive restitution directly from a defendant "in an amount established by court order, based on the amount of loss claimed by the victim or victims or any other showing to the court") and People v. Crow, 6 Cal.4th 952, 954-55, 26 Cal.Rptr.2d 1, 864 P.2d 80 (1993) for the proposition that under California law, a restitution order must equal the loss to the victim. Ferreira v Ashcroft, 390 F.3d 1091, 1099-1100 (9th Cir. 2004).      To be sure of avoiding an aggravated felony conviction, counsel should get a Chang v. I.N.S., 307 F.3d 1185 (9th Cir. 2002)-style written plea agreement to plead guilty to a count (say, one month of welfare) in which the loss to the victim is set at $10,000 or less. This distinguishes Ferreira so it is not completely on point, but leaves open the possibility that immigration or federal court would feel the second distinguishing feature identified by Ferreira - the assertion that under California law restitution equals loss to the victim -- would be sufficient to distinguish Changs result and find that the conviction is an aggravated felony. The following are initial suggestions.      (1) If a plea can be put off until the person pays back enough of the money so that the plea agreement can reflect a loss to the victim and restitution payment of under $10,000, the court would not order restitution in excess of $10,000, and the record of conviction would not establish the conviction as a fraud aggravated felony.      (2) Sometimes judges order restitution "in an amount as determined by probation." See California Penal Code 1202.4(f) ("If the amount of loss cannot be ascertained at the time of sentencing, the restitution order shall include a provision that the amount shall be determined at the direction of the court." See also People v. Lunsford, 67 Cal.App.4th 901 (1998) (restitution order directing agency to determine amount of restitution was enforceable, where proper amount of restitution could not be ascertained at time of sentencing.)  Defense counsel can insist that in return for a plea, the amount of restitution shall be determined by the probation officer. It is at least arguable that the subsequent determination by the probation officer would not be part of the "record of conviction" and not be reviewable in a subsequent immigration or federal proceeding.      (3) Except for a specific statute covering a specific type of fraud, many crimes involving fraud or deceit might possibly also be considered theft offenses in that someone is deprived of property. A plea to the first clause of California Penal Code 484 "... who shall feloniously steal, take, carry, lead, or drive away the personal property of another" does not have fraud or deceit as an element. If restitution was ordered in an amount exceeding $10,000, for a conviction based on the first clause of Penal Code 484, there would be no fraud aggravated felony, provided no sentence of one year or more was imposed.      (4) To avoid an aggravated felony for crimes of theft with a sentence imposed of one year or more, a defendant can plead to Penal Code 484 "in the exact language of the statute" or simply add a new count to the complaint to state merely "violation of Penal Code 484" without any other verbiage. Under United States v. Corona-Sanchez, 291 F.3d 1201, 1207-08 (9th Cir. 2002) (en banc), this would not be an aggravated felony even with a sentence imposed of one year or more because it is overbroad. To the extent that the charge to which a plea is entered alleges the separate clauses in the statute in the disjunctive, a defendant could even be ordered to pay restitution of $10,000 or more, and this would not be an aggravated felony.       (5) If a civil suit had been brought, a restitution order in a criminal case could provide that restitution would be paid according to the civil suit settlement.      Thanks to Kathy Brady and Michael Mehr for this analysis.

Eleventh Circuit

AGGRAVATED FELONY - FRAUD - EMBEZZLEMENT - GOVERNMENT AS VICTIM
Balogun v. U.S. Attorney Gen., 2005 WL 2333840 (11th Cir. Sept. 26, 2005) (Alabama conviction for embezzlement of moneys belonging to the United States is an aggravated felony fraud offense under INA 101(a)(43)(M)(i); the United States may be considered the victim for purposes of INA 101(a)(43)(M)(i)).
http://caselaw.lp.findlaw.com/data2/circs/11th/0412507p.pdf

Other

AGGRAVATED FELONY - FRAUD OFFENSES
David H. Angeli & Per A. Ramfjord, Reexamining "Loss" and "Gain" in the Wake of Dura Pharmaceuticals v. Broudo - New Ammunition for Securities Fraud Defendants, 30 THE CHAMPION 10 (May 2006).

AGGRAVATED FELONY - FRAUD OFFENSE - FOOD STAMP FRAUD
"Food Stamp Fraud," despite what its name sounds like, may be neither an Aggravated Felony nor a Crime of Moral Turpitude.  In some jurisdictions, the elements of the offense do not include any of the key elements that define common law fraud; instead, the offense is basically a strict-liability regulatory offense.