## Facts

- David W. Svete and Ron Girardot controlled companies that marketed viatical-settlement investments tied to life-insurance policies of terminally ill insureds.
- The companies obtained more than $100 million from over 3,000 investors; over one-third were older than 65.
- Sales agents and written materials made false statements about life expectancies, insurance contract status, and investment risks, including claims of independent medical review that were incomplete or nonexistent.
- Evidence indicated Svete directed the preparation of sham life-expectancy opinions and the forging of physician signatures.
- An employee testified that Svete and Girardot instructed her to alter signed contracts without investor consent.
- Many investors testified they did not read or did not understand the contracts and relied on oral representations.
- Investors signed contracts stating they relied only on contract terms, were financially sophisticated with access to professional advice, and that projected death dates were estimates.
- The defendants argued these acknowledgments showed that an ordinarily prudent person would not have been deceived.

## Issues

1. Whether 18 U.S.C. § 1341 requires the government to prove the fraudulent scheme was reasonably calculated to deceive a person of ordinary prudence and comprehension.
2. Whether the district court erred by using the Eleventh Circuit pattern mail-fraud instruction and refusing a defense instruction incorporating an “ordinary prudence” requirement.

## Decision

- The en banc Eleventh Circuit held § 1341 does not require proof that a scheme would deceive an ordinarily prudent person.
- The court overruled prior circuit precedent imposing an “ordinary prudence” element.
- The court affirmed the district court’s use of the pattern mail-fraud instruction and its refusal to give the defendants’ proposed instruction.
- The case was remanded to the original panel to address remaining appellate issues not resolved en banc.

## Legal Principles

- The phrase “any scheme or artifice to defraud” in 18 U.S.C. § 1341 is broad and does not limit liability to schemes that would mislead a reasonable person.
- Mail fraud focuses on the defendant’s deceptive conduct and fraudulent intent and the use of the mails in execution of the scheme, not on the victim’s prudence or sophistication.
- A victim’s gullibility, carelessness, or sophistication may be relevant evidence but is not an element the government must disprove.
- Contractual disclaimers and acknowledgments do not categorically bar criminal mail-fraud liability where the government proves a deceptive scheme and fraudulent intent.
- A materiality instruction tied to what would matter to a reasonable person may be used without converting mail fraud into a “reasonable victim” offense.

## Conclusion

The Eleventh Circuit, sitting en banc, ruled that federal mail fraud does not require proof that a scheme would deceive an ordinarily prudent person, overruled contrary circuit precedent, and upheld the pattern jury instruction without an “ordinary prudence” requirement.


United States v. Svete, 556 F.3d 1157 (11th Cir. 2009) (en banc)