(C)  Requirement of an Intent to Defraud or Deceive.  Where a statute requires as an element a specific intent to defraud, a conviction under that statute will trigger removal as an aggravated felony if the loss requirement is met.[735]

 

In Valansi v. Ashcroft,[736] the Third Circuit 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.[737]  Recognizing that the federal offense of misapplication of bank funds,[738] included intent to injure in addition to an intent to defraud, the court held that the statute did not necessarily “involve” fraud or deceit:[739]

 

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.[740]

 

At least one court has found that “willfully” committing a fraud offense qualified as an aggravated felony, even where the actor 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.[741]

[735] 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); Sharma v. Ashcroft, 2003 U.S. App. LEXIS 3642 (3d Cir. Feb. 27, 2003) (unpublished) (federal conviction of bank fraud, in violation of 18 U.S.C. § 1344, held to be conviction of a crime involving fraud or deceit, and therefore an aggravated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); 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).

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

[737] Ibid.

[738] 18 U.S.C. § 656.

[739] 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 or 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.

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

[741] United States v. Tarallo, 380 F.3d 1174 (9th Cir. Aug. 20, 2004) (securities fraud in violation of 15 U.S.C. § § 78 ff and 17 C.F.R. § 240.10b-5).

CRIMES OF MORAL TURPITUDE " FRAUD OFFENSES " DEFINITION AGGRAVATED FELONIES " FRAUD OFFENSES " DEFINITION
The Supreme Court has held that "[T]he well-settled meaning of 'fraud' require[s] a misrepresentation or concealment of material fact" and "materiality of falsehood is an element of the federal mail fraud, wire fraud, and bank fraud statutes." Neder v. United States, 527 U.S. 1, 23, 25 (1999). Since Neder, the federal circuits have uniformly ruled that schemes criminalized by the mail or wire fraud statutes must involve material false representations, material omissions of fact, or both. Federal prosecutors in the Ninth Circuit recently have advanced the proposition that the federal wire and mail fraud statutes criminalize two different types of schemes: (1) those involving the common law element of material false statements and omissions; and (2) those covered by the term "scheme to defraud," as used in those fraud statutes, which omits this common law requirement and requires only an intent to deceive; nothing deceptive need actually ever be said or done. In a recent case in the Central District of California, the defendant was charged with obtaining funds by means of fraudulent representations and omissions, an allegation necessary to adequately state a fraud offense under Neder. But at trial the government argued that the wire fraud statute reaches "schemes" involving an intent to deceive or cheat, even absent the making of a material falsehood or omission. Over Namvar's objection, the district court took the unprecedented step of redacting from the Circuit's model instruction the element of a material misrepresentation and/or omission of fact, and Namvar was convicted. In an unpublished opinion, a three judge panel affirmed. In fact, the term "scheme to defraud," has always been interpreted to incorporate the core element of fraud at common law: "everything designed to defraud by representations as to the past or present, or suggestion, or promises as to the future." McNally v. United States, Id. 483 U.S. 350, 358 (1987) (quoting Durland v. United States, 161 U.S. 306, 313 (1896)) (emphasis added). Neder rejected the argument that the federal fraud statutes can be read to require no more than an intent to deceive. 527 U.S. at 23-24 (emphasis in original) That a panel decision could approve a sea change in the law of fraud in an unpublished opinion is deeply disturbing, not least of all because unpublished opinions rarely are reviewed by the Circuit sitting en banc. A group of ex-federal prosecutors, however, has taken the highly unusual step of filing an amicus in support of Namvar's petition for rehearing en banc. The amicus support provides hope that the Namvar opinion will receive reconsideration. If it does not, more fraud-less fraud prosecutions can be expected in the Ninth Circuit, and defense counsel will need to be prepared to counter them on the basis of Neder and McNally. Thanks to Dennis Riordan.

AGGRAVATED FELONY"TAX EVASION"FRAUD OFFENSE
Kawashima v. Holder, 132 S.Ct. 1166 (Feb. 21, 2012) (federal conviction of willfully making a false tax return, in violation of 26 U.S.C. 7206(a), and aiding and assisting in the preparation of a false tax return, under 26 U.S.C. 7206(2), constituted fraud offense aggravated felonies, under INA 101(a)(43)(M)(i), 8 U.S.C. 1101(a)(43)(M)(i), because they are crimes involv[ing] fraud or deceit in which the loss to the victim(s) exceeds $10,000, even though they are not listed as aggravated felonies under INA 101(a)(43)(M)(ii), 8 U.S.C. 1101(a)(43)(M)(ii), which lists certain tax evasion aggravated felonies).

AGGRAVATED FELONY"FRAUD OFFENSE"AIDING PREPARATION OF A FALSE TAX RETURN
Kawashima v. Holder, 132 S.Ct. 1166 (Feb. 21, 2012) (federal conviction of aiding and assisting in the preparation of a false tax return, under 26 U.S.C. 7206(2), constituted a fraud offense aggravated felony, under INA 101(a)(43)(M)(i), 8 U.S.C. 1101(a)(43)(M)(i): We conclude that Mrs. Kawashima's conviction establishes that, by knowingly and willfully assisting her husband's filing of a materially false tax return, Mrs. Kawashima also committed a felony that involved deceit.).

AGGRAVATED FELONY"FRAUD OFFENSE"AIDING PREPARATION OF A FALSE TAX RETURN
In Kawashima v. Holder, 132 S.Ct. 1166 (Feb. 21, 2012), the Supreme Court held that federal convictions of willfully making a false tax return, in violation of 26 U.S.C. 7206(a), and aiding and assisting in the preparation of a false tax return, under 26 U.S.C. 7206(2), constituted fraud offense aggravated felonies, under INA 101(a)(43)(M)(i), 8 U.S.C. 1101(a)(43)(M)(i). Justice Thomas, writing for a six-member majority, held that those two offenses did involv[e] fraud or deceit, as required by (M)(i), and also rejected the argument that Congress action in specifically listing other tax evasion offenses, under 26 U.S.C. 7201, as aggravated felonies under INA 101(a)(43)(M)(ii), 8 U.S.C. 1101(a)(43)(M)(ii), meant that Congress did not mean for tax offenses that were not listed in (M)(ii) to be considered as aggravated felonies. Justice Ginsburg filed a dissenting opinion, in which Justices Breyer and Kagan joined. In doing so, the court specifically reaffirmed the categorical analysis that looks to the elements of the offense, rather than to the underlying facts of the offense, to determine whether the offense of conviction falls within the boundaries of the fraud or deceit offense portion of the conviction-based ground of removal. To determine whether the Kawashimas' offenses involv[e] fraud or deceit within the meaning of Clause (i), we employ a categorical approach by looking to the statute defining the crime of conviction, rather than to the specific facts underlying the crime. See Gonzales v. Duenas"Alvarez, 549 U.S. 183, 186, 127 S.Ct. 815, 166 L.Ed.2d 683 (2007) (applying the approach set forth in Taylor v. United States, 495 U.S. 575, 599"600, 110 S.Ct. 2143, 109 L.Ed.2d 607 (1990)). If the elements of the offenses establish that the Kawashimas committed crimes involving fraud or deceit, then the first requirement of Clause (i) is satisfied. (Id. at 1172 [footnote omitted].) The court made it clear that it was here considering only the fraud or deceit offense portion of this aggravated felony, rather than the loss requirement. (Id. at n.3.) The court reasoned that an offense could fall within the fraud or deceit aggravated felony definition, even though fraud or deceit themselves were not formal elements of the offense: Although the words fraud and deceit are absent from the text of 7206(1) and are not themselves formal elements of the crime, it does not follow that his offense falls outside of Clause (i). The scope of that clause is not limited to offenses that include fraud or deceit as formal elements. Rather, Clause (i) refers more broadly to offenses that involv[e] fraud or deceit"meaning offenses with elements that necessarily entail fraudulent or deceitful conduct. (Id. at 1172.) The courts general test for whether the conviction was for an offense involving fraud or deceit was whether it was an offense with elements that necessarily entail fraudulent or deceitful conduct. (Id. [emphasis supplied].) In this context, therefore, the court interpreted the word involve to mean possess formal elements that necessarily entail fraudulent or deceitful conduct. Addressing Mr. Kawashimas conviction of willfully making a false tax return, in violation of 26 U.S.C. 7206(a), the court stated: When subparagraph (M) was enacted, the term deceit meant a the act or process of deceiving (as by falsification, concealment, or cheating). Webster's Third New International Dictionary 584 (1993). Mr. Kawashima's conviction under 7206(1) establishes that he knowingly and willfully submitted a tax return that was false as to a material matter. He therefore committed a felony that involved deceit. (Id. at 1172.) The same analysis leads to the same conclusion with respect to the similar offense committed by Mrs. Kawashima: aiding and assisting in the preparation of a false tax return, under 26 U.S.C. 7206(2): We conclude that Mrs. Kawashima's conviction establishes that, by knowingly and willfully assisting her husband's filing of a materially false tax return, Mrs. Kawashima also committed a felony that involved deceit. (Id. at 1173.) The court also rejected the argument that the specific listing of one tax evation offense in (M)(ii) indicated a congressional intent to exclude other tax evastion offenses from (M)(i), because otherwise (M)(ii) would be add nothing to the law. In doing so, the court reasoned: Moreover, 7201 includes two offenses: the offense of willfully attempting to evade or defeat the assessment of a tax as well as the offense of willfully attempting to evade or defeat the payment of a tax. Sansone v. United States, 380 U.S. 343, 354, 85 S.Ct. 1004, 13 L.Ed.2d 882 (1965) (emphasis in original). As the Government notes, it is possible to willfully evade or defeat payment of a tax under 7201 without making any misrepresentation. For example, 7201 can be violated by a taxpayer who files a truthful tax return, but who also takes affirmative steps to evade payment by moving his assets beyond the reach of the Internal Revenue Service. Although the Government concedes that evasion-of-payment cases will almost invariably involve some affirmative acts of fraud or deceit, it is still true that the elements of tax evasion pursuant to 7201 do not necessarily involve fraud or deceit. (Id. at 1175.) The court thus provides an excellent example of an argument that a given offense does not necessarily involve fraud or deceit, because it can be committed by other means: it is possible to willfully evade or defeat payment of a tax without making any misrepresentation. (Ibid.) Justice Ginsburg, joined by Justices Breyer and Kagan, dissented. She summarized her reasoning as follows: The Court's construction of the statute is dubious, as I see it. For one thing, it effectively renders Clause (ii) superfluous. Further, the Court's reading sweeps a wide variety of federal, state, and local tax offenses"including misdemeanors"into the aggravated felony category. In addition, today's decision may discourage aliens from pleading guilty to tax offenses less grave than tax evasion, thereby complicating and delaying enforcement of the internal revenue laws. I conclude that Clause (i) does not address tax offenses, and would therefore hold that making a false statement on a tax return in violation of 7206 is not an aggravated felony. (Id. at 1176.)

BIA

AGGRAVATED FELONY - FRAUD - WELFARE FRAUD
Matter of Garcia-Madruga, 24 I&N Dec. 436 (BIA Jan. 17, 2008) (Rhode Island conviction of welfare fraud, in violation of R.I. 40-6-15, is not an aggravated felony theft offense, because a "theft" offense, for aggravated felony purposes, requires "the taking of, or exercise of control over, property without consent, and with the criminal intent to deprive the ownership of the rights and benefits of ownership, even if such deprivation is less than total or permanent" (emphasis added); welfare fraud is a fraud offense, in that it requires a taking with consent, obtained by fraud).

NOTE: When faced with a plea to a fraud offense involving a loss of over $10,000, counsel may wish instead to plea to a "theft" offense with a sentence imposed of 364 days or less. This may avoid issues regarding a finding of loss and "extra element" analysis under Matter of Babiaskov.

Second Circuit

AGGRAVATED FELONY " FRAUD OFFENSE " PLEA DID NOT ESTABLISH OFFENSE WAS COMMITTED WITH SPECIFIC INTENT TO DEFRAUD
Akinsade v. Holder, 678 F.3d 138 (2d Cir. May 1, 2012) (federal conviction for embezzlement by a bank employee under 18 U.S.C. 656, did not categorically constitute a fraud aggravated felony, for purposes of deportation, where none of the facts to which the petitioner actually and necessarily pleaded to establish whether that offense was committed with a specific intent to defraud).

AGGRAVATED FELONY - FRAUD OFFENSES - ATTEMPT
Ljutica v. Holder, 588 F.3d 119 (2d Cir. Dec. 3, 2009) (federal conviction of attempted bank fraud, in violation of 18 U.S.C. 2, 1344, constitutes a fraud aggravated felony, under INA 101(a)(43)(U), 8 U.S.C. 1101(a)(43)(U), even though defendant was caught before any loss occurred), following Matter of Onyido, 22 I. & N. Dec. Dec. 522 (BIA 1999).

Third Circuit

AGGRAVATED FELONY " FRAUD OR DECEIT " PERJURY
Singh v. Att'y General, 677 F.3d 503 (3d Cir. Apr. 16, 2012) (federal conviction of knowingly making a false statement under penalty of perjury in a bankruptcy proceeding in violation of 18 U.S.C. 152(3), could properly be charged in removal proceedings either as an aggravated felony perjury offense, under INA 101(a)(43)(S), or as an offense involving fraud or deceit under INA 101(a)(43)(M)(i)).

Fourth Circuit

AGGRAVATED FELONY " THEFT OFFENSE " FRAUD LACKS THE WITHOUT CONSENT ELEMENT OF THEFT OFFENSE
Salem v. Holder, ___ F.3d ___, 2011 WL 1998330 (4th Cir. May 24, 2011) (Virginia conviction for petit larceny under Va.Code Ann. 18.2"96, did not categorically qualify as a an aggravated felony theft offense, because the statute might encompass either fraud or theft, and fraud did not constitute a theft offense); Soliman v. Gonzales, 419 F.3d 276, 282-83 (4th Cir.2005) (theft for purposes of the INA does not include fraud, because fraud lacks the without consent element of the taking that is essential to a finding of theft).

Fifth Circuit

AGGRAVATED FELONY - FRAUD - MISPRISON OF A FELONY
Patel v. Mukasey, 526 F.3d 800 (5th Cir. Apr. 29, 2008) (federal conviction for violation of 8 U.S.C. 4, misprision of a felony was an aggravated felony under INA 101(a)(43)(M)(i), 8 U.S.C. 1101(a)(43)(M)(i) because it necessarily entails deceit; in this particular case the loss to the victim, which exceeded $10,000, was not disputed by the parties).

AGGRAVATED FELONY - FRAUD - FRAUD OFFENSE
Arguelles-Olivares v. Mukasey, 526 F.3d 171 (5th Cir. April 22, 2008), revised opinion, (5th Cir. Feb. 5, 2009) (federal conviction of knowingly filing a false tax return, in violation of 26 U.S.C. 7206(1), constituted a fraud offense aggravated felony, under INA 101(a)(43)(M)(i), 8 U.S.C. 1101(a)(43)(M)(i), if the loss to the victim is in excess of $10,000, for purposes of triggering deportability); accord, Kawashima v. Gonzales, 503 F.3d 997, 1000-01 (9th Cir. 2007); contra, Lee v. Ashcroft, 368 F.3d 218, 220 (3d Cir. 2004).

AGGRAVATED FELONY - FRAUD OFFENSE - THEFT OFFENSE - BANK FRAUD IS NOT A HYBRID FRAUD-THEFT OFFENSE, AND SO DOES NOT HAVE TO MEET THE REQUIREMENTS OF BOTH AGGRAVATED FELONY DEFINITIONS
Martinez v. Mukasey, 519 F.3d 532 (5th Cir. Mar. 11, 2008) (federal bank-fraud conviction, in violation of 18 U.S.C. 1344, with restitution order of about $313,000, constituted an offense involving fraud or deceit under INA 101(a)(43)(M)(i), 8 U.S.C. 1101(a)(43)(M)(i), but not a theft offense under INA 101(a)(43)(G), 8 U.S.C. 1101(a)(43)(G), because here the taking was with consent, and so did not need to meet the requirements of both definitions), distinguishing Nugent v. Ashcroft, 367 F.3d 162 (3d Cir. 2004).

AGGRAVATED FELONY - FRAUD OFFENSE - THEFT OFFENSE -- FRAUD AND THEFT HAVE DIFFERENT DEFINITIONS, SUGGESTING CONGRESS DID NOT INTEND ANY OVERLAP
Martinez v. Mukasey, 519 F.3d 532 (5th Cir. Mar. 11, 2008) ("We must assume that, by giving separate definitions to offenses "involving fraud and deceit" and "theft", Congress intended them to be different. See, e.g., United States v. Nordic Village, 503 U.S. 30, 36, 112 S.Ct. 1011, 117 L.Ed.2d 181 (1992). In this regard, we are mindful not to construe a definition within 101(a)(43) to be "so broad that it is inconsistent with its accompanying words, thus giving unintended breadth to the [INA]". Gustafson, 513 U.S. at 575, 115 S.Ct. 1061 (quoting Jarecki v. G.D. Searle & Co., 367 U.S. 303, 81 S.Ct. 1579, 6 L.Ed.2d 859 (1961)) (internal quotation marks omitted).").

AGGRAVATED FELONY - FRAUD OFFENSE - BANK FRAUD
Martinez v. Mukasey, 519 F.3d 532 (5th Cir. Mar. 11, 2008) (federal bank-fraud conviction, in violation of 18 U.S.C. 1344, with restitution order of about $313,000, constituted an offense involving fraud or deceit under INA 101(a)(43)(M)(i), 8 U.S.C. 1101(a)(43)(M)(i), rejecting argument that because bank fraud does not require proof of two common-law elements of fraud [reliance and damage], it is not a fraud aggravated felony), following James v. Gonzales, 464 F.3d 505, 509 (5th Cir. 2006) ("The plain language of 1344 ... necessarily entails fraud or deceit.").

Seventh Circuit

AGGRAVATED FELONY - FRAUD OFFENSE - IDENTITY THEFT
Eke v. Mukasey, 512 F.3d 372 (7th Cir. Jan. 7, 2008) (Illinois conviction of conspiracy to violate the Illinois identity theft statute, 720 ILCS 5/16G-15(a) (using another person's identity information "to fraudulently obtain credit, money, goods, services, or other property."), constituted an aggravated felony fraud offense, under INA 101(a)(43)(M)(i), 8 U.S.C. 1101(a)(43)(M)(i), for purposes of supporting an expedited removal order under INA 238(b), 8 U.S.C. 1228(b), rejecting an argument that this conviction required an actual loss in excess of $10,000, as opposed to an intended loss).

Eighth Circuit

AGGRAVATED FELONY " FRAUD OFFENSE " UNAUTHORIZED USE OF FOOD STAMP BENEFITS
Mowlana v. Lynch, ___ F.3d ___, ___, 2015 WL 5730791 (8th Cir. Sept. 30, 2015) (federal conviction for unauthorized use, transfer, acquisition, and possession of food stamp benefits, under 7 U.S.C. 2024(b)(1), was fraud and deceit aggravated felony in which the loss to the victim or victims exceeds $10,000, 8 U.S.C. 1101(a)(43)(M)(i), since this offense requires knowing that conduct was contrary to statutes or regulations); see Liparota v. United States, 471 U.S. 419, 433 (1985) (elements of 7 U.S.C. 2024(b)(1)). Note: At least one of the four categories of violation of this statute does not invariably involve deceit, it is merely likely: The third category of violations involves bartering of benefits by trading SNAP benefits for goods or money, or vice versa. See, e.g., United States v. Parson, 288 F.3d 818, 819 (6th Cir.2002); United States v. Gibbens, 25 F.3d 28, 30 (1st Cir.1994). The fourth category involves stealing benefits from eligible households. See United States v. Williams, 97 F.3d 1463 (9th Cir.1996) (unpublished table decision). In these situations, an offender makes no false representation to the government at the time of the violation, but a false representation is likely to occur later if an ineligible person"having obtained SNAP benefits through barter or theft"redeems the benefits at a retailer's Point of Sale device. Id. at 927. The concurring opinion finds that this offense is not categorically a fraud or deceit offense, but finds the conviction in this case is a fraud aggravated felony under the modified categorical approach. Id. at 931 (concurring opinion).

Ninth Circuit

AGGRAVATED FELONY - FRAUD - FALSE TAX RETURN
Kawashima v. Holder, 615 F.3d 1043 (9th Cir. Aug. 4, 2010) (remanding case to BIA to determine, in light of Nijhawan which documents may be considered to determine the loss to the Government), superseding prior opinion at 593 F.3d 979 (9th Cir. Jan. 2010).

AGGRAVATED FELONY - FRAUD
Carlos-Blaza v. Holder, 611 F.3d 583 (9th Cir. Jun. 30, 2010) (federal conviction for violation of 18 U.S.C. 656, stealing, embezzling, and misapplying bank funds, is an aggravated felony fraud offense since knowing misapplication of funds necessarily involves fraud).

AGGRAVATED FELONY - FRAUD - WHERE FRAUD NOT AN EXPLICIT ELEMENT, BUT IMPLICIT IN NATURE OF OFFENSE
Blanco v. Mukasey, 518 F.3d 714 (9th Cir. Mar. 3, 2008) ("Our cases hold that intent to defraud is implicit in the nature of the crime when the individual makes false statements in order to procure something of value, either monetary or non-monetary. See id. (holding that fraud is not inherent where crime "does not involve the use of false statements ... nor does the defendant obtain anything" of value); see also Navarro-Lopez, 503 F.3d at 1076 (Reinhardt, J., concurring); cf. Notash v. Gonzales, 427 F.3d 693, 698 (9th Cir.2005) (holding fraud not inherent where statute "did not require an intent to deprive the United States of revenue"). Fraud therefore does not equate with mere dishonesty, because fraud requires an attempt to induce another to act to his or her detriment. See Black's Law Dictionary 685 (8th ed.2004). One can act dishonestly without seeking to induce reliance. . . .").

Eleventh Circuit

AGGRAVATED FELONY " FRAUD " UTTERING FORGED INSTRUMENT
Walker v. U.S. Atty. Gen., ___ F.3d ___, 2015 WL 1782677 (11th Cir. Apr. 21, 2015) (Florida conviction of uttering a forged instrument, under Fla. Stat. 831.02, is categorically an aggravated felony fraud or deceit offense, under INA 101(a)(43)(M)(i), 8 U.S.C. 1101(a)(43)(M)(i), because the violator utters and publishes as true something that the violator know[s] to be false, whether this is done with intent to injure or intent to defraud).