Overzealous U.S. Attorneys are trying to turn everyday conduct into federal felony offenses, according to attorneys representing embattled power couple Lori Loughlin and Mossimo Giannulli, and other parents charged in the college cheating scandal.
In the latest defense filing over the long running “Operation Varsity Blues” scandal, Loughlin’s legal team seeks to have the charges related to conspiracy, mail fraud and wire fraud tossed for the government’s failure to allege that any actual crime was actually committed.
The wealthy duo allegedly worked to have their daughters admitted to the University of Southern California (USC) as members of the crew team when neither woman was a rowing athlete at all. Alleged bribes were paid; USC personnel were involved; and fake rowing profiles were constructed for both Olivia Jade Giannulli and Isabella Rose Giannulli in service of the scheme.
But the defense argues none of that qualifies as a crime.
“At its core, the Government’s theory in…the indictment is that [Loughlin and Giannulli] made misrepresentations to help their children obtain offers of admission to certain universities,” the filing reads. “That alleged misconduct may be unethical and improper, but it does not violate the federal mail or wire fraud statutes. Accepting the Government’s theory would massively expand criminal fraud liability beyond anything authorized by Congress or the Supreme Court.”
The crux of the defense’s argument is that university admission slots are not a form of property that any court–or really anyone, ever–has recognized. The government’s attempts to claim that such slots qualify as property is a brand new line of legal thinking and, the defense argues, a dangerously broad concept that would ensnare far too many quotidian bits of subterfuge.
The filing notes, at length:
[M]ost importantly, treating a misrepresentation on a college application as an effort to deprive the college of “property” leads to absurd results that would massively expand criminal liability beyond anything Congress intended. Under the Government’s theory, it is a federal crime—punishable by up to 20 years in prison—to embellish a letter of recommendation; plagiarize a high-school term paper; overstate the emergency of a plumbing problem to secure an earlier appointment; or obtain a reservation at a favorite restaurant by falsely claiming a birthday celebration. None of those activities is praiseworthy, but no one (except maybe the Government) thinks they violate federal criminal law.
“[A]ny misrepresentation in a college application would place the applicant at the mercy of federal prosecutors,” the filing notes later on. “The same goes for any exaggeration or fib in any other kind of application—or letter of recommendation—whether written to a university, a preschool, an employer, a civic organization, or any other entity accepting applications for limited membership or participation slots. It also presumably criminalizes any act of cheating or plagiarism that helps a high-school or college student earn a diploma or get accepted into a school, program, or club.”
“Because of its breadth, the Government’s expansive property theory would cloud the boundary between lawful and criminal conduct, thereby bestowing vast, unchecked discretion on prosecutors and opening the door to arbitrary and discriminatory enforcement of the law,” the filing ominously warns.
But it’s not all rhetoric and bluster in the name of civil liberties against the slippery slope of government overreach.
The filing also notes that the Supreme Court has been decidedly averse to novel government theories of what qualifies as “property” for the purposes of criminal prosecutions.
“Since 1987, the Supreme Court has issued a series of rulings defining the statutes’ property limitation,” the filing continues. “As the Court has explained, that limitation must be strictly enforced to avoid overcriminalization and to take account of federalism and due process concerns. Those rulings have emphasized that the scope of the fraud statutes is limited to traditional forms of property.”
Loughlin’s attorneys then noted several relatively recent–post-1987–Supreme Court cases which eschewed government efforts to expand the traditional definition of property.
Two of those cases focused on whether the honest services of government officials or fiduciaries or a state’s video poker licenses qualified as property and the high court answered in the negative. One case questioned whether a newspaper’s confidential business information qualified as property and answered yes.
On each occasion, however, the Supreme Court noted that, for the purposes of the federal mail and wire fraud statutes, the question is whether the thing of value had “long been recognized as property.”
“In all of its various filings and hearings related to this alleged conspiracy, the [U.S. Attorneys office] has yet to identify a single source that supports its offer-as-property theory,” the filing said. “The reason for that is plain. An offer is not property, but rather an invitation to engage in a future transaction in which various interests—property or money or services—will be exchanged.”
“Here, each university’s offer of admission was not property but rather an invitation to engage in a future transaction in which the university would provide services (an education) in exchange for money (tuition payments),” the defense argument continued. “Moreover, the Government does not allege that Defendants defrauded the universities in that subsequent education-for-tuition transaction. Nor could it. Defendants paid full price for educational services, and the universities suffered no pecuniary harm.”
The filing tidily summed up Loughlin’s argument [emphasis in original]:
For at least four reasons, an “admission slot” is not a traditional form of property cognizable under the mail and wire fraud statutes. First, the relevant historical record is bereft of any affirmative evidence that an admission slot has ever been considered property. Second, to the extent the historical record addresses anything analogous to admission slots, it shows that lying on an application was not considered a deprivation of property. Third, fraudulent statements made to induce a subsequent transaction in which the fraudster then pays full price is not fraud to obtain property. And fourth, the universities here provided Defendants’ children with educational services—but services were not classified as property under the common law.
Notably, the Thursday filing were strikingly similar to arguments that have been consistently made by Fox News Judicial Analyst Andrew Napolitano.
“[T]his is not a crime–no one was harmed,” he said earlier this year. “A study was done to see if anyone was bumped from the admissions because these students got in because the parents did the bribing, and nobody was because there’s an elasticity in the admission classes in these schools. I think this is a gross overreaching on the part of the prosecutors and a misguided sentence.”
[image via Paul Marotta/Getty Images]