## Facts

- Carl W. Cleveland, a lawyer, assisted Fred Goodson and Truck Stop Gaming, Ltd. (TSG) in applying for and renewing Louisiana video poker licenses.
- Louisiana issued nontransferable, annually renewable video poker licenses under suitability requirements aimed at applicant character and fiscal integrity.
- License applications required disclosure of owners and financial information and affirmed that listed partners were the sole beneficial owners, not nominees.
- The applications listed Goodson’s adult children as the only beneficial owners, allegedly concealing Cleveland’s and Goodson’s ownership interests.
- Louisiana approved TSG’s initial application and renewals during the early-to-mid 1990s.
- Federal prosecutors charged Cleveland (and others) with multiple offenses, including mail fraud based on mailing the license applications to the State.
- Cleveland sought dismissal of the mail-fraud counts, arguing the alleged scheme did not deprive Louisiana of “property” under the mail fraud statute.
- The district court denied dismissal; a jury convicted Cleveland on mail-fraud counts and on other counts dependent on mail fraud; the Fifth Circuit affirmed.

## Issues

1. Whether a scheme to obtain a state video poker license by misrepresentation involves “obtaining money or property” from the State within 18 U.S.C. § 1341.
2. Whether an unissued state or municipal license constitutes “property” in the hands of the issuing sovereign for purposes of the federal mail fraud statute.

## Decision

- The Supreme Court unanimously reversed.
- The Court held that Louisiana’s unissued video poker licenses were not “property” in the State’s hands for purposes of 18 U.S.C. § 1341.
- Because the mail-fraud theory failed as a matter of law, Cleveland’s mail-fraud convictions and any convictions predicated on those counts could not stand.

## Legal Principles

- For § 1341, the relevant “money or property” is what the alleged victim is deprived of; the statute protects property rights, not generalized interests in proper administration.
- A State’s interest in issuing, denying, and revoking licenses is ordinarily regulatory (an exercise of police power), not a proprietary property interest in the unissued licenses.
- An item may be valuable property to a private holder after issuance, yet still not be “property” of the government before issuance for § 1341 purposes.
- Statutory interpretation of federal criminal laws avoids readings that would substantially expand federal criminal jurisdiction into areas of traditional state and local regulation absent clear congressional authorization.

## Conclusion

The Court concluded that a fraudulent attempt to obtain Louisiana video poker licenses does not satisfy the “money or property” element of the federal mail fraud statute because the State’s pre-issuance licensing interest is regulatory rather than proprietary, requiring reversal of mail-fraud-based convictions.


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