Cleveland v. United States, 531 U.S. 12 (2000)

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certiorari to the united states court of appeals for the fifth circuit

No. 99-804. Argued October 10, 2000—Decided November 7, 2000

Louisiana law authorizes the State to award nontransferable, annually renewable licenses to operate video poker machines. License applicants must meet suitability requirements designed to ensure that they have good character and fiscal integrity. The State itself does not run any video poker machinery. In 1992, Fred Goodson and his family formed a limited partnership, Truck Stop Gaming, Ltd. (TSG), to participate in the video poker business in Louisiana. Petitioner Carl W. Cleveland, a lawyer, assisted Goodson in preparing TSG's initial and subsequent video poker license applications, each of which identified Goodson's children as the sole beneficial owners of the partnership. The State approved the initial application, and TSG successfully renewed its license in 1993, 1994, and 1995. In 1996, Cleveland and Goodson were charged with money laundering under 18 U. S. C. 1957 and racketeering and conspiracy under 1962 in connection with a scheme to bribe state legislators to vote in a manner favorable to the video poker industry. Among the predicate acts supporting these charges were four counts of violating the mail fraud statute, 1341, which proscribes use of the mails in furtherance of "any scheme or artifice to defraud, or for obtaining . . . property by means of . . . fraudulent . . . representations." The indictment alleged that, because Cleveland and Goodson had tax and financial problems that could have undermined their suitability to receive a video poker license, they fraudulently concealed that they were the true owners of TSG in the license applications they had mailed to the State. Before trial, Cleveland moved to dismiss the mail fraud counts on the ground that the alleged fraud did not deprive the State of "property" under 1341. The District Court denied the motion, concluding that licenses constitute property even before they are issued. A jury found Cleveland guilty on two mail fraud counts and on other counts predicated on the mail fraud. The Fifth Circuit affirmed the conviction, considering itself bound by an earlier decision holding that Louisiana video poker licenses constitute "property" in the State's hands.

Held: State and municipal licenses in general, and Louisiana's video poker licenses in particular, do not rank as "property," for purposes of 1341, in the hands of the official licensor. Pp. 18-27.

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