United States v. Takhalov, 827 F.3d 1307

Background

Defendants owned Miami bars that employed "B-girls" to pose as tourists and lure businessmen into the clubs; defendants admitted knowing the B-girls concealed their bar relationships.
Government presented additional allegations that club staff spiked drinks, hid prices, forged credit-card signatures, and otherwise cheated patrons after they arrived.
Defendants asserted a theory of defense that, even if they used B-girls to induce patrons, those inducements alone were not wire fraud because patrons received the goods/services they paid for.
Defendants requested a jury instruction that nondisclosure of the B-girls’ financial relationship to the bar, by itself, was insufficient to convict; the district court refused and the jury convicted on multiple wire-fraud and money-laundering counts.
On appeal, the Eleventh Circuit reviewed (de novo for law, abuse-of-discretion for refusal to instruct) whether the requested instruction was a correct statement of law, whether it addressed a central trial issue, and whether it was substantially covered by the instructions actually given.

Issues

Issue	United States' Argument	Defendants' Argument	Held
Whether § 1343 reaches mere deceit that induces a transaction	Concealment of B-girls’ bar ties was a material misrepresentation sufficient for wire fraud	Deceiving patrons into entering an otherwise legitimate transaction is not a "scheme to defraud" unless the deception altered the nature/value of the bargain	The wire-fraud statute requires deception that intends to deprive a victim of money/property or misrepresents an essential element of the bargain; mere inducement alone is insufficient
Whether the requested jury instruction was a correct statement of law	Instruction would improperly place conduct outside § 1343	Instruction accurately stated law: must lie about nature/price/quality of bargain to commit wire fraud	The requested instruction was a correct statement of law
Whether the instruction related to a critical trial point (prejudice)	N/A: government emphasized other fraudulent acts beyond inducement	Instruction was central because defense theory depended on it; failure seriously impaired defense	Instruction addressed a sufficiently important point and its absence prejudiced defendants
Whether the requested instruction was substantially covered by the court's instructions	Given elements/good-faith instructions adequately covered the defense	Given instructions did not plainly tell jurors that mere inducement without altering the bargain is not wire fraud	The district court's instructions did not substantially cover the requested instruction; refusal was an abuse of discretion

Key Cases Cited

United States v. Shellef, 507 F.3d 82 (2d Cir. 2007) (distinguishes deceit that merely induces transactions from misrepresentations that alter the bargain)
United States v. Starr, 816 F.2d 94 (2d Cir. 1987) (misrepresentations amounting only to deceit are insufficient for mail/wire fraud)
United States v. Regent Office Supply Co., 421 F.2d 1174 (2d Cir. 1970) (defendant intended to deceive but not to defraud because falsity did not affect nature/value of bargain)
United States v. Bradley, 644 F.3d 1213 (11th Cir. 2011) (scheme to defraud requires intent to deprive of something of value via trick or deceit)
Neder v. United States, 527 U.S. 1 (1999) (harmless-error standard for omitted elements in jury instructions; error harmless only if it did not contribute to verdict beyond a reasonable doubt)
Chapman v. California, 386 U.S. 18 (1967) (harmless-error doctrine for constitutional errors)
United States v. Svete, 556 F.3d 1157 (11th Cir. 2009) (wire fraud may be found even if deception would not fool a person of ordinary prudence when misrepresentation concerns nature of bargain)
United States v. Martinelli, 454 F.3d 1300 (11th Cir. 2006) (instructional coverage analysis: small logical inference from given instruction may render requested instruction unnecessary)
United States v. Hill, 643 F.3d 807 (11th Cir. 2011) (similar principle regarding willfulness and belief in truth covering requested instruction)