Aggravated Felonies

(C)  Requirement of an Intent to Defraud or Deceive.  Where a statute requires as an element a specific intent to defraud, a conviction under that statute will trigger removal as an aggravated felony if the loss requirement is met.[420]

In Valansi v. Ashcroft,[421] the Third Circuit held that the language “an offense that — involves fraud or deceit” should be interpreted as requiring an intent to defraud or deceive as an element of the offense before the offense will be considered an aggravated felony.[422]  Recognizing that the offense of misapplication of bank funds, under 18 U.S.C. § 656, included intent to injure in addition to an intent to defraud, the court held that the statute did not necessarily “involve” fraud or deceit:[423]

The word “involves” means “to have within or as part of itself” or “to require as a necessary accompaniment.” Webster’s Third New International Dictionary at 1191. Thus, an offense that “involves fraud or deceit” is most naturally interpreted as an offense that includes fraud or deceit as a necessary component or element. It does not require, however, that the elements of the offense be coextensive with the crime of fraud.

Thus, the use of the word “involves” expands the scope of § 1101(a)(43)(M)(i) to include offenses that have, at least as one element, fraud or deceit.[424]

At least one court has found that “willfully” committing a fraud offense qualified as an aggravated felony, even where the actor did not know at the time of the acts that the conduct violated the law if s/he intentionally acted with reckless disregard for the truth of material misleading statements.[425]

[420] Ferreira v. Ashcroft, 390 F.3d 1091 (9th Cir. Dec. 1, 2004) (California conviction of welfare fraud, in violation of Welf. & Inst. Code § 10980(c)(2), as interpreted by California judicial decisions defining the elements of the offense, invariably requires an element of fraud or deceit, and therefore constitutes an offense involving fraud or deceit for purposes of qualifying as an aggravated felony); Sharma v. Ashcroft, 2003 U.S. App. LEXIS 3642 (3d Cir. Feb. 27, 2003) (federal conviction of bank fraud, in violation of 18 U.S.C. § 1344, held to be conviction of a crime involving fraud or deceit, and therefore an aggravated felony); Matter of Onyido, 22 I. & N. Dec. 552 (BIA 1999) (submitting a false claim with intent to defraud insurance company held aggravated felony); Matter of Ayala-Arevalo, 22 I. & N. Dec. 398 (BIA 1998) (conspiracy in violation of 18 U.S.C. § 371 (1994) (conspiracy to defraud the United States by making false statements to a department of the United States).

[421] Valansi v. Ashcroft, 278 F.3d 203 (3d Cir. 2002).

[422] Ibid.

[423] But see Moore v. Ashcroft, 251 F.3d 919 (11th Cir. 2001) (conviction under 18 U.S.C. § 656, misapplication of bank funds, falls within fraud/deceit aggravated felony definition because jury must find the defendant knowingly participated in a deceptive or fraudulent transaction.)  This decision does not address the defining issue in Valansi that an intent to injure does not establish fraud or deceit, and is therefore not persuasive on the question of the statute’s divisibility.

[424] Valansi v. Ashcroft, 278 F.3d 203, 209 (3d Cir. 2002).

[425] United States v. Tarallo, 380 F.3d 1174 (9th Cir. Aug. 20, 2004) (securities fraud in violation of 15 U.S.C. § § 78 ff and 17 C.F.R. § 240.10b-5).