United States v. Clausen

Donald Clausen (defendant) opened a commodities trading account and ordered silver futures contracts he expected to profit from, but the price fell and he came to owe Conti-Commodity Services (Conti) $22,500. Clausen wrote Conti a check for that amount knowing his account lacked sufficient funds, then placed another silver futures order hoping to recoup his losses; instead the price fell further, leaving him owing $31,900 more. Clausen later told his broker neither check would clear, causing Conti a total loss of $47,883. He was indicted for wire fraud based on three phone calls made during the scheme and convicted at trial; on appeal, he argued that writing an insufficient-funds check was not a 'misrepresentation' under the wire-fraud statute.