United States v. Svete
United States Court of Appeals for the Eleventh Circuit
2009 WL 225254 (2009)
- Written by Sharon Feldman, JD
Facts
Svete, Girardot (defendants), and their agents sold financial interests in viatical settlements. A viatical settlement is a type of investment in which an investor purchases an interest in the life-insurance policy of someone who is terminally ill for less than the death benefit and receives the policy benefits upon the terminally ill person’s death. Each investor signed a contract acknowledging that the investor had not relied on any representations other than those made in the contract, the investor was sophisticated in financial matters, the investor had sought or had access to professional advice, and the projected death dates were only estimates. Svete and Girardot were indicted for mail fraud in connection with the sales of these investments. At trial, investors testified that the sales agents made false statements and provided materials that contained false statements about the investments and the risks associated with them. Several investors testified that they did not read or understand the contracts and relied on the sales agents’ statements. Svete and Girardot argued that a person of ordinary prudence would have read the contract, and asked the district court to instruct the jury that fraud requires proof that a reasonable person of average prudence and comprehension would have acted on the fraudulent representations made by the defendant. Instead, the district court defined a material fact as one that would be important to a reasonable person in deciding whether or not to engage in a particular transaction. Svete and Girardot were convicted of mail fraud and appealed.
Rule of Law
Issue
Holding and Reasoning (Pryor, J.)
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