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McNally v. United States
United States Supreme Court
483 U.S. 350 (1987)
Gray and McNally (defendants) were prominent members of the Democratic Party in the Commonwealth of Kentucky in the 1970s, and Gray was also a commonwealth-government official. Along with Howard Hunt, the state’s Democratic-Party chairman, Gray and McNally engaged in various schemes through which commissions paid by insurance companies for doing business with the commonwealth were funneled to entities controlled by Gray, McNally, and Hunt. These commissions were not drawn from the commonwealth’s money and would have been paid to some insurance agent regardless of Gray’s or Hunt’s involvement, but the men ensured that some of the commissions were directed to their own benefit. Large amounts of money went to the three men through these self-dealing patronage schemes. Hunt was charged and pleaded guilty to mail and tax fraud and was sentenced to three years in prison. Gray and McNally were eventually each tried for one count of conspiracy and one count of mail fraud. The mail-fraud charge was based upon a commission check from an insurance company that had been sent through the mail, and it alleged that Gray and McNally had devised a scheme to defraud the commonwealth and its citizens of the right to have government business conducted honestly. The conspiracy charge alleged that the men had conspired to violate the mail-fraud statute and defraud the United States by obstructing tax collection. Gray and McNally were convicted on both counts, and the court of appeals affirmed the convictions. The United States Supreme Court granted certiorari.
Rule of Law
Holding and Reasoning (White, J.)
Dissent (Stevens, J.)
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