District Court Finds that Conduct in the U.K. Resulted in a Domestic U.S. Violation of the Wire Fraud Statute Because U.S. Telecommunications Were Used To Implement the Conspiracy

The World in U.S. Courts: Spring 2016 - White Collar Criminal Law | February.16.2016

U.S. v. Allen, U.S. District Court for the Southern District of New York, February 16, 2016

The defendants were convicted of conspiracy to commit wire fraud and bank fraud, as well as several substantive counts of wire fraud, in connection with a scheme to rig the LIBOR interest rate. Among other issues, they argued after trial that the Wire Fraud statute could not be applied extraterritorially to the conduct they had been found to have committed.

The District Court in New York decided that it did not need to address the extraterritoriality issue because a domestic U.S. violation had occurred. Specifically, the Court observed that "wires" in New York were used to publish the illegal LIBOR rates to subscribers in New York, and to settle payments under contracts tied to the LIBOR rates, both actions being the anticipated effects of the conspiracy. Those facts were determinative, and it did not matter that the violation was based on conduct by the defendants in the U.K.

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