## Facts

- Educational Testing Service (ETS) designed and administered the TOEFL exam, which U.S. schools used to assess English proficiency for admissions; TOEFL scores could affect students’ visa-related enrollment eligibility.
- ETS maintained copyrights in TOEFL exam content and trademarks in ETS/TOEFL branding and score reports, and restricted access to its exam materials, score reports, and testing/scoring services.
- TOEFL registrants received an appointment number, presented identification at a test center, and signed a confidentiality statement and certifications regarding personal information.
- The government alleged a scheme involving numerous foreign nationals in which paid imposters took TOEFL for registered candidates using false identities.
- After testing, score reports were mailed to an intermediary who allegedly replaced the imposter’s photograph with the registered candidate’s photograph and mailed the altered score reports to schools in counterfeit ETS envelopes.
- A federal grand jury returned superseding indictments charging conspiracy to commit mail fraud against both defendants and substantive mail-fraud counts against Al Hedaithy.
- Al‑Aiban entered an unconditional guilty plea to conspiracy; Al Hedaithy proceeded to a bench trial on stipulated facts and was convicted of conspiracy and mail fraud.
- On appeal, both defendants challenged the indictments’ legal sufficiency under the mail-fraud statute; Al Hedaithy also challenged the evidence supporting his convictions and the denial of discovery to pursue a selective-prosecution claim based on race/ethnicity.

## Issues

1. Whether an unconditional guilty plea waives appellate review of a claim that the indictment fails to state an offense under the mail-fraud statute.
2. Whether the indictments alleged a scheme to obtain “money or property” under 18 U.S.C. § 1341 by targeting ETS’s confidential test content, testing/scoring services, and goodwill.
3. Whether the stipulated facts were sufficient to support Al Hedaithy’s conspiracy and mail-fraud convictions.
4. Whether Al Hedaithy made the required threshold showing to obtain discovery on a selective-prosecution claim (discriminatory effect and discriminatory intent).

## Decision

- The Third Circuit held that Al‑Aiban’s unconditional guilty plea did not bar his claim that the indictment failed to state an offense.
- The court held the superseding indictments adequately alleged mail fraud because they charged a scheme to obtain ETS “property,” including confidential exam materials, secure testing/scoring services, and goodwill connected to ETS’s reputation for integrity.
- The court held the stipulated facts were sufficient for a rational factfinder to find that Al Hedaithy knowingly participated in a scheme to defraud and that mailings furthered the scheme.
- The court affirmed denial of selective-prosecution discovery because Al Hedaithy did not make a credible showing of discriminatory effect and discriminatory purpose.
- The court affirmed the convictions.

## Legal Principles

- A defendant may challenge on appeal whether an indictment states an offense even after an unconditional guilty plea, because a valid charge is a prerequisite to a lawful conviction.
- Mail fraud under 18 U.S.C. § 1341 requires (1) a scheme to defraud or obtain money or property by false pretenses and (2) use of the mails to execute the scheme.
- “Property” under § 1341 includes certain intangible interests with economic value, such as confidential business information and related goodwill, when those interests are the object of the fraudulent scheme.
- To obtain discovery on a selective-prosecution claim, a defendant must make a credible threshold showing of both discriminatory effect (similarly situated persons of another group not prosecuted) and discriminatory intent.

## Conclusion

The Third Circuit affirmed mail-fraud convictions arising from TOEFL impersonation and altered score reporting, holding that ETS’s confidential exam materials, testing services, and goodwill qualified as “property” under § 1341 and that the defendants’ charging and evidentiary challenges failed, including the request for selective-prosecution discovery.


United States v. Al Hedaithy, 392 F.3d 580 (3d Cir. 2004)