18 U.S.C. § 1346 – Honest Services Fraud
18 U.S.C. § 1346 defines honest services fraud as a scheme to deprive another of the intangible right to honest services.
This federal statute is commonly used in bribery and kickback cases involving public officials, corporate executives, and individuals who owe fiduciary duties.
Honest services fraud became widely known during the 2019 college admissions scandal, in which high-profile defendants were prosecuted for bribery schemes designed to gain unfair admissions advantages.
If you are under federal investigation for honest services fraud, the potential penalties are severe, including lengthy prison sentences and substantial fines.
Your best chance for a favorable outcome is with an experienced criminal defense attorney at the Hedding Law Firm in Los Angeles. To schedule a consultation, call (866) 986-2092 or use the contact form here.
What Is Honest Services Fraud?
Under 18 U.S.C. § 1346, a scheme to defraud includes schemes that deprive another of the intangible right to honest services.
In practical terms, honest services fraud occurs when someone in a position of trust:
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Accepts bribes
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Accepts kickbacks
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Engages in corrupt conduct for personal gain
The victim is typically:
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The public
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An employer
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A corporation
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Shareholders
The Role of Bribery and Kickbacks
The United States Supreme Court has limited the scope of honest services fraud to cases involving bribery or kickbacks.
This means that:
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Mere conflicts of interest are not enough
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Poor business decisions are not enough
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Ethical lapses alone are not enough
There must be a bribe or kickback arrangement tied to a breach of fiduciary duty.
Who Can Be Charged with Honest Services Fraud?
Honest services fraud cases typically involve:
Public Officials
Government officials who accept bribes in exchange for official acts.
Corporate Executives
Officers or employees who accept kickbacks that harm their employer.
Private Individuals with Fiduciary Duties
Professionals such as consultants, agents, or financial managers who breach duties of loyalty through corrupt payments.
What Must a Federal Prosecutor Prove?
To convict a defendant under 18 U.S.C. § 1346, federal prosecutors must prove beyond a reasonable doubt:
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The defendant owed a fiduciary duty
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The defendant engaged in a scheme to defraud
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The scheme involved bribery or kickbacks
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The defendant acted knowingly and with the intent to defraud
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The scheme involved the use of mail or wire communications
Honest services fraud is usually charged in conjunction with mail fraud under 18 U.S.C. § 1341 or wire fraud under 18 U.S.C. § 1343.
Relationship to Other Federal Fraud Statutes
Honest services fraud is a definitional extension of the federal mail and wire fraud statutes.
Related federal statutes often charged together include:
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18 U.S.C. § 1341 – Mail Fraud
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18 U.S.C. § 1343 – Wire Fraud
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18 U.S.C. § 1344 – Bank Fraud
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18 U.S.C. § 1347 – Health Care Fraud
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18 U.S.C. § 1348 – Securities Fraud
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18 U.S.C. § 1349 – Attempt and Conspiracy
Federal prosecutors frequently combine these charges to increase exposure and sentencing risk.
Penalties for Honest Services Fraud
The penalties mirror those for mail and wire fraud.
Standard Penalties
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Up to 20 years in federal prison
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Fines up to $250,000 for individuals
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Restitution
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Forfeiture of assets
Enhanced Penalties
If the fraud affects a financial institution or involves certain emergency benefits:
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Up to 30 years in federal prison
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Fines up to $1 million
Sentencing is also influenced by the Federal Sentencing Guidelines, which consider:
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Loss amount
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Number of victims
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Role in the offense
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Obstruction of justice
Common Defense Strategies
Federal fraud prosecutions are complex and fact-intensive. Potential defenses may include:
No Bribe or Kickback
If no corrupt payment or quid pro quo existed, the statute may not apply.
Lack of Intent
The government must prove intent to defraud. If you believed the transaction was legitimate, this may defeat criminal intent.
No Fiduciary Duty
If no fiduciary duty existed, honest services fraud cannot be sustained.
Legitimate Business Practices
Some payments may be lawful consulting fees or bonuses rather than illegal kickbacks.
Insufficient Evidence
Federal prosecutors must prove every element beyond a reasonable doubt. Challenging documentation, communications, or witness credibility can be critical.
Frequently Asked Questions
Is honest services fraud the same as bribery?
Not exactly. Honest services fraud often involves bribery, but it is charged under the federal mail and wire fraud framework.
Can private employees be charged?
Yes. Private individuals who owe fiduciary duties can be prosecuted.
Does a conflict of interest automatically qualify?
No. The Supreme Court has limited the statute to bribery and kickback schemes.
Is prison mandatory?
There is no mandatory minimum in most cases, but sentencing guidelines can result in significant prison exposure.
Federal Investigations and Early Intervention
Honest services fraud cases often begin with:
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Federal grand jury subpoenas
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FBI investigations
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Search warrants
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Target letters from the U.S. Attorney's Office
If you are under investigation, early legal intervention is critical. Speaking to federal agents without counsel can significantly harm your defense.
Speak With a Federal Criminal Defense Attorney
Federal fraud prosecutions are aggressively pursued and heavily resourced. Convictions can lead to long prison terms, massive financial penalties, and permanent reputational damage.
If you are under investigation or charged under 18 U.S.C. § 1346, immediate consultation with an experienced federal criminal defense attorney is essential. Strategic early defense can affect charging decisions, plea negotiations, and sentencing outcomes.
The Hedding Law Firm is here to help. Schedule your consultation today. Our law firm is based in Los Angeles, CA
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