USA v. Weaver
Contractual Disclaimers of Reliance Do Not Render Oral Misrepresentations Immaterial
July 01, 2017 at 12:00 AM
2 minute read
PER CURIAM
Weaver was CEO of Vendstar, which sold valueless vending-machine business opportunities to its victims. He was convicted of conspiracy and substantive charges of mail and wire fraud. Vendstar's sales force routinely promised its customers unrealistic profits and made other false claims. On appeal Weaver argued that because Vendstar's customers signed purchase agreements disclaiming reliance on extra-contract representations, the oral misrepresentations of Vendstar's salespeople were immaterial. Second Circuit affirmed conviction. Agreeing with the Fifth, Seventh and Eleventh Circuits, it held that contractual disclaimers of reliance on prior misrepresentations do not render those misrepresentations immaterial under the criminal mail and wire fraud statutes. Further, under 18 USC §§1341 and 1343, the crimes were committed when, with fraudulent intent, Vendstar employees used the wires or mail in furtherance of a scheme to extract money form their victims via material misrepresentations. No customers had to be tricked into buying the vending-machine opportunities for Weaver and his team to be criminally charged. The government need not prove that an intended victim was actually defrauded to establish guilt of mail or wire fraud.
PER CURIAM
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