United States v. Raza

The Fourth Circuit affirmed defendants' convictions of wire fraud and conspiracy to commit wire fraud. The court rejected defendants' request to utilize Universal Health Services v. United States ex rel. Escobar, 136 S. Ct. 1989 (2016), to rule that the Supreme Court has clarified its earlier cases to say that materiality — in any criminal fraud context — requires proof that the false statements and misrepresentations were subjectively material. Therefore, the district court did not err in failing to require the misrepresentations in the SunTrust loan applications to be material to SunTrust as the fraud victim. The court reasoned that the correct test for materiality — as the district court recognized — is an objective one, which measures a misrepresentation's capacity to influence an objective "reasonable lender," not a renegade lender with a demonstrated habit of disregarding materially false information. Therefore, the challenged jury instructions regarding the materiality element were not erroneous. Furthermore, the district court did not erroneously instruct the jury on the element of intent to defraud. Finally, the district court did not abuse its discretion by failing to instruct the jury prior to the deliberations and by permitting the jury to find guilt by association. View "United States v. Raza" on Justia Law