Honest Services Fraud Can Require Jail Time

Public employees who take bribes or otherwise receive cash or other gifts in exchange for taking an action within their official exercise of power may be subject to prosecution under 18 U.S.C. § 1346, which could result in jail time.  This type of crime is called "Honest Services Fraud."

The Seventh Circuit Court of Appeals held in U.S. v. Bloom, 149 F.3d 649 (7th Cir. 1998), that the misuse of office for private gain is the line that separates run of the mill breaches of fiduciary duty from a federal crime.  Put another way, this line separates a civil lawsuit (a breach of fiduciary duty) from a federal lawsuit with the potential for jail time.

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