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Honest Services Fraud

A government official who fails to do his job engages in Honest Services Fraud. Yes, when a government employee accepts his salary and benefits as pay for doing a job, but then willfully fails to perform that job, then the government (and we taxpayers) are defrauded. You can't say you will do something for money, take the money and not do the work. Fraud is a crime. Honest Services Fraud is also a crime:

Title 18 of the U.S. Code § 1346

Definition of a scheme or artifice to defraud¯

"For the purposes of this chapter, the term, scheme or artifice to defraud includes a scheme or artifice to deprive another of the intangible right of honest services."

There is a mechanism in place now that will enable tax payers to demand that our public officials are held accountable for doing their jobs!
When a public officials fails to do his job, he is breaking the law.

This type of crime is particularly evil when the corrupt public official, or her relation, benefits from the fraudulent services. Like when a corrupt SEC enforcement chief protects her husband's law firm's associations with hedge fund clients engaged in illegal activies. When any government official engages in honest services fraud and other parties benefit from this fraud, the activities as a whole are a form of Organized Crime and are additionally subject to the tremendously powerful RICO statutes.

Direct & Indirect Corruption

Corruption requires the direct or indirect participation of people in the government. Direct Corruption is when a government official directly takes something of value for himself or a relation. Direct corruption is usually easy to spot and as a result tends to be rare in countries with a genuine free press and freedom of speech.

Indirect Corruption is when a government official indirectly receives something of value by abusing his official powers. Since the official does not receive something directly, it is very difficult to spot. One of the most sinister forms of indirect corruption is when a public official intentionally "looks the other way" in the face of some criminal conduct, organized crime, or activity which fails to conform to regulations.

Regulators and Prosecutors may become Corrupt

Honest Services Fraud is found within the most deeply entrenched corruption in our government that is also the most damaging to our nations economic survival: the indirect corruption of DOJ & SEC officials through their abuse of Prosecutorial Discretion.

Our dominant news media has a narrow focus on corrupt officials as being solely elected officials working within the Legislative and Executive branches of government. But readers of BankruptcyMisconduct know that Honest Services Fraud includes conduct of corrupted officials empowered with Regulation and Criminal Prosecution.

Corrupt officials of our justice and financial regulatory systems have easy access to a power which can be abused so as to benefit private entities - these private entities later return these "favors" as indirect corruption, which can also be described as quid pro quo. Officials charged with enforcement of our laws are granted the power to decide who they actually want to enforce laws and regulations against - prosecutorial discretion. It doesn't take a rocket scientist to realize that once an ordinary human being - with the usual frailties, ego, and desire for riches - could easily fall sway to corruption.



How might a prosecutor defraud us of his honest services by failing to prosecute a crime?


Just ask Eliot Spitzer. If he were to answer honestly, Spitzer would say that engaging in a frenzy of prosecutions of entities who were unaffiliated with the corrupted official was quite effective, indeed. Spitzer was dishonest in his focus on parties who should not have been prosecuted during his prolific reign of high profile threatened prosecutions, as he dutifully failed to prosecute big players in organized crime.

Spitzer's protection of Andrew Cuomo shares much in common as far as defrauded New York citizens of honest services. Sadly, the honest services of our public officials devolves into a commodity which is sold by corrupted public officials and bought by their associates in organized crime.