Scheme or Artifice to Defraud Law and Legal Definition

A scheme or artifice to defraud is not capable of precise definition, but generally is a plan or trick to deprive another of the intangible right of honest services or obtain, by false or fraudulent pretenses, representations, or promises, money or property from someone. It is the deprivation of something of value by trick, chicane, or overreaching. The concept of 'fraud' includes the act of embezzlement, which is the fraudulent appropriation to one's own use of the money or goods entrusted to one's own care by another. A ‘scheme to defraud’ connotes some form of planning or pattern.

In the context of mail fraud, a "scheme or artifice to defraud," as used in the forner mail fraud statute, was "limited in scope to the protection of property rights" and the courts found the statute did not prohibit schemes to deprive people of the intangible right to good government and honest services. In response, Congress enacted 18 U.S.C. Section 1346 (1994), which states that "[f]or the purposes of this chapter, the term`scheme or artifice to defraud' includes a scheme or artifice to deprive another of the intangible right of honest services."