By: Derek Hawkins//April 11, 2016//
7TH Circuit Court of Appeals
Case Name: United States of America v. David Weimart
Case No.: 15-2453
Officials: BAUER, FLAUM, and HAMILTON, Circuit Judges.
Focus: Criminal Wire Fraud
Executive’s lack of candor to the board in sale of equity interest in real estate development deal did not amount to wire fraud.
“To take a simple example based on price, suppose a seller is willing to accept $28,000 for a new car listed for sale at $32,000. A buyer is actually willing to pay $32,000, but he first offers $28,000. When that offer is rejected and the seller de‐ mands $32,000, the buyer responds: “I won’t pay more than $29,000.” The seller replies: “I’ll take $31,000 but not a penny less.” After another round of offers and demands, each one falsely labeled “my final offer,” the parties ultimately agree on a price of $30,000. Each side has gained from deliberately false misrepresentations about its negotiating position. Each has affected the other side’s decisions. If the transaction involves interstate wires, has each committed wire fraud, each defrauding the other of $2,000? Of course not. But why not? The government’s answer at oral argument was the absence of “intent to defraud.” That answer begs the question. How do we recognize “intent to defraud” if a party has gained a better deal by misleading the other party about its”
Reversed