On June 22, 2020, the US Court of Appeals for the Second Circuit upheld the honest services wire fraud conspiracy convictions of Juan Ángel Napout and José Maria Marin, former officials in the Fédération Internationale de Football Association (FIFA). Napout and Marin principally argued that their convictions should be overturned because (1) the presumption against extraterritoriality requires that honest services wire fraud only applies to fraudulent conduct that occurs on U.S. soil and (2) honest services wire fraud was unconstitutionally vague as applied in this case. The Second Circuit denied both arguments.
In 2017, Napout and Marin were convicted at trial in the US District Court for the Eastern District of New York of multiple counts of conspiracy to commit honest services wire fraud, as well as other charges. Napout, the former president of the Paraguayan national soccer federation, Asociaciόn Paraguaya de Fútbol (APF), and Marin, the former president of the Brazilian soccer federation, Confederaçᾶo Brasileira de Fútbol (CBF), collected millions of dollars in bribes in exchange for awarding broadcasting and marketing contracts.
With respect to the presumption against extraterritoriality argument, the Second Circuit stated that wire fraud is considered sufficiently domestic if the use of the wires is “essential rather than merely incidental” to the scheme. The Second Circuit held that the government presented “ample evidence” that the fraudulent schemes made use of American wires and financial firms. The evidence demonstrated that Marin often received bribes via an account he had with a bank in New York. Marin also used a debit card connected to this bank account to make purchases at stores in the United States. With respect to Napout, the evidence showed that he was “often bribed with American banknotes from U.S. bank accounts that” were wired to a money changer in Argentina and then ultimately handed to Napout. Napout also received entertainment and luxury items that were paid for with money wired from a US bank account. The Second Circuit found that the use of the US wires and US financial institutions were central to the scheme. The court noted that of the $3.3 million in bribes received by each defendant, Marin received $2.4 million in his New York bank account and Napout received $2.5 million paid in US dollars generated by wire transfers originating in the US.
With respect to the void for vagueness argument, the defendants noted a violation of a fiduciary duty is an element of honest services fraud. They argued they did not have “fair notice” that a foreign employee violating a fiduciary duty to a foreign employer could satisfy this element. The Second Circuit, applying a plain error standard of review because the argument had not been raised at the district court level, determined that there was no clear precedent or law as to whether defendants’ argument was correct, requiring a rejection of their argument under the plain error standard.