In the past few years, several high profile politicians and individuals, including impeached former Illinois Governor Rod Blagojevich, former New York State Majority Leader Joseph Bruno, newspaper magnate Conrad Black, and former CEO of Enron, Jeffrey Skilling, have all been prosecuted under a key provision of the federal anti-fraud statute that makes it a crime to deprive citizens or corporate shareholders of “honest services.”
Prosecutors use the broad honest services provision of the federal anti-fraud statute to charge defendants with depriving a general group of people, such as shareholders of a public company or residents of a state or city, of the honest fiduciary duties or government services owed to them. While the statute is often used by prosecutors to shore up other fraud charges, it is increasingly being used as a primary count as well. Violators of honest services fraud face up to 20 years in prison and a maximum fine of the greater of (a) twice the gross gain, (b) twice the gross loss resulting from the offense, or (c) $250,000.1
