Cite as 795 F.Supp. 639 (S.D.N.Y. 1992)
that the scheme deprived it of “money or property” within the meaning of the statute.
The Money or Property Requirement.
In McNally v. United States, the Supreme Court held that to state a violation of the mail fraud statute, the scheme to defraud must be intended to deprive another of money or property. 483 U.S. 350, 107 S.Ct. 2875, 97 L.Ed.2d 292 (1987) (reversing a mail fraud conviction that was predicated on the charge that the defendant had defrauded the citizens of a state of their intangible right to “honest and impartial government”); see also Carpenter v. United States, 484 U.S. 19, 108 S.Ct. 316, 98 L.Ed.2d 275 (1987) (applying McNally to the wire fraud statute). Although McNally has been overruled by the enactment of 18 U.S.C. § 1346,[1] which became effective on November 18, 1988, it applies here because all of the alleged acts of mail fraud occurred prior to its enactment. See Corcoran, 886 F.2d at 19 n. 4 (§ 1346 has no retroactive application). Thus, Peacock must plead facts demonstrating deprivation of a property right or interest in order to support the predicate acts of mail fraud.
We have construed Peacock’s allegations with respect to the mail fraud scheme liberally, taking into account all possible targets of the alleged scheme as well as the fact that a property interest need not be “tangible” to satisfy McNally. See Carpenter, 484 U.S. at 25, 108 S.Ct. at 320; Wallach, 935 F.2d at 461. Nowhere do we find support for the requirement that MAJ’s alleged scheme had as its object the deprivation of a property right.
We begin with Peacock’s apparent attempt to assert that the Copyright Office was defrauded of property, by stating that each of MAJ’s mailings constituted a “ ‘scheme or artifice to defraud the Register of Copyrights and the Library of Congress to obtain for MAJ the valuable property of a United States copyright registration….’ ” ¶ 132. In evaluating the sufficiency of that allegation, we consider McNally’s requirement that “any benefit which the Government derives from the [mail fraud] statute must be limited to the Government’s interests as property holder.” 483 U.S. at 359 n. 8, 107 S.Ct. at 2881 n. 8. In order for such a scheme to come within the purview of the mail fraud statute, therefore, the Register of Copyrights must have a property interest in the copyright registrations it disburses.
Evaluating Peacock’s contention in light of several Second Circuit decisions exploring the scope of the Government’s interest as a property holder, we reject the notion that the Register of Copyrights has any such property interest. In United States v. Evans, for example, the Second Circuit addressed a scheme to deceive the United States about the true destination of arms sold to Iran. According to the mail and wire fraud counts of the indictment, the Government contended that the “property” at issue were the arms themselves, and that the Government’s property interest was the ability to control the transfer of the arms to foreign nations. The Court rejected the notion that the Government had any property interest in the arms, however, finding that because it neither manufactured nor owned them, its interest was only “ancillary to a regulation, not to property.” Evans, 844 F.2d at 40–42. In Corcoran v. American Plan Corp., similarly, the Second Circuit determined that the New York State Superintendent of Insurance, as regulator of the insurance industry, had no property interest in money stolen from private insurance companies. 886 F.2d at 16, 20–21.
The situation presented by Peacock’s alleged scheme to defraud is analogous. While the Register of Copyrights does have an interest in regulating the intellectual property rights of private parties, it has no property interest of its own in either the matter underlying the copyright or in the copyright registration once issued. As such, Peacock’s mail fraud acts cannot be predicated on any scheme to deprive the Register of Copyrights of money or property.
- ↑ Section 1346 provides, “For purposes of this chapter, the term ‘scheme or artifice to defraud’ includes a scheme or artifice to deprive another of the intangible right of honest services.”
