United States Court of Appeals for the Eighth Circuit
792 F.2d 102 (1986)
Donald Clausen (defendant) opened a trading account with Conti-Commodity Services, Inc. (Conti). Clausen called Conti and placed an order for five contracts of silver futures. At the time, Clausen was experiencing financial troubles and was expecting to profit through the silver trade. However, the price of silver fell, and a Conti broker told Clausen that he now owed $22,500 as a result of the loss. Clausen brought a check for $22,500 to Conti’s office, knowing that he did not have enough money in his account to cover the check. Clausen then placed another order for five contracts of silver futures, expecting that the price of silver would rise and that he could earn all of his money back. Instead, the price of silver continued to fall, and Clausen faced another debt of $31,900. Clausen called his Conti broker days later and told the broker that the $22,500 check for the first debt payment would not clear and that he also could not make the second debt payment. The transaction resulted in a $47,883 loss for Conti. Clausen was indicted for wire fraud based on three phone calls made by Clausen while carrying out the scheme. The wire-fraud statute under which Clausen was charged provided that a defendant is guilty of wire fraud if the defendant: (1) devises any scheme or artifice to defraud or to obtain money or property by means of fraudulent pretenses or representations, or (2) transmits by wire any writings for the purpose of executing such a scheme. After a jury trial, Clausen was convicted. Clausen appealed, arguing that passing an insufficient-funds (NSF) check did not constitute a misrepresentation as required by the statute.
Rule of Law
Holding and Reasoning (Lay, C.J.)
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