## Facts

- The United States prosecuted Wayne Stephens for wire fraud under 18 U.S.C. § 1343 based on his use of his employer Accenture’s computerized payroll/expense system.
- Accenture’s system included an “add to/deduct from” function that could be used to adjust an employee’s pay, including entries styled as expense reimbursements.
- Over several months in 2000, Stephens submitted a string of “add to” requests seeking reimbursement for business expenses he did not incur, totaling about $67,395.
- At the time, Accenture had no written policy that expressly addressed misuse of the “add to” function, but it did have general expense controls, including supervisor review of expense submissions and a credit-card policy permitting personal cash advances only if repaid at month’s end.
- Stephens initially submitted expense reports for supervisor review, but after a supervisor proved lax in checking submissions, Stephens stopped sending his reports for review.
- Stephens entered his own name in the supervisor-approval field, making it appear that a supervisor had approved the expense submissions.
- Stephens began with small requests, believing he could later claim any questioned entry was a clerical error, and then increased the amounts over time.
- A large “add to” entry (approximately $22,980) drew the attention of auditors, and an internal audit uncovered the pattern of false reimbursements.
- A jury convicted Stephens on wire-fraud counts. Stephens appealed, arguing the evidence did not show a scheme to defraud or intent to defraud, and also raising a Batson challenge to the government’s peremptory strikes.

## Issues

1. Whether the evidence was sufficient for a reasonable jury to find wire fraud under 18 U.S.C. § 1343—specifically, a scheme to defraud and intent to defraud—where Stephens argued he made no actionable misrepresentation and no written policy expressly barred his use of the payroll system’s “add to” function.
2. Whether Stephens made a prima facie showing under Batson v. Kentucky such that the district court was required to proceed to Batson steps two and three regarding the government’s peremptory strikes of minority veniremembers.

## Decision

- The Seventh Circuit affirmed Stephens’s wire-fraud convictions, holding that the trial evidence permitted a reasonable jury to find a deceptive scheme and the required intent to defraud.
- The court rejected the argument that the absence of an express written policy or an express verbal lie defeated the “scheme to defraud” element; the jury could treat the electronic “reimbursement” submissions and self-approval as deceptive conduct aimed at obtaining money to which Stephens was not entitled.
- The court held the jury could infer intent to defraud from the totality of Stephens’s conduct, including submitting reimbursements for non-existent expenses, switching to self-approval, beginning with small amounts to preserve a “clerical error” excuse, and then increasing the amounts until auditors noticed.
- On jury selection, the court held Stephens established a prima facie Batson claim and remanded for the district court to complete Batson steps two and three by requiring race-neutral explanations and determining whether purposeful discrimination occurred.

## Legal Principles

- Wire fraud under 18 U.S.C. § 1343 requires proof of: (1) a scheme to defraud, (2) use of interstate wires in furtherance of the scheme, and (3) participation with intent to defraud.
- A “scheme to defraud” can be shown by deceptive conduct designed to obtain money or property; the government need not prove an express false statement if the defendant’s submissions and conduct create a false impression of entitlement.
- Intent to defraud may be proven with circumstantial evidence, including concealment, bypassing approval processes, a pattern of repeated false submissions, and escalating conduct inconsistent with mistake.
- Under Batson, once a defendant makes a prima facie showing that peremptory strikes were based on race, the prosecution must provide race-neutral reasons and the trial court must decide whether the reasons are a pretext for purposeful discrimination; failure to complete these steps requires further proceedings.

## Conclusion

The Seventh Circuit affirmed Stephens’s wire-fraud convictions because a rational jury could find that his false “add to” reimbursement entries and self-approval were deceptive acts intended to obtain company funds, but it remanded for the district court to complete the remaining Batson steps after concluding Stephens made a prima facie showing of discriminatory peremptory strikes.


United States v. Stephens, 421 F.3d 503 (2005)