United States v. Timothy James Lyons, United States of America v. Gabriel Sanchez

Rare is the person who relishes getting calls from those great patrons of the telephone, telemarketers. Yet many charities, especially small, obscure or unpopular ones, could not fund their operations without telemarketers. Some professional telemarketers take the lion’s share of solicited donations, sometimes requiring and receiving commission rates of up to 85%. Most donors would probably be shocked or surprised to learn that most of their contributions were going to for-profit telemarketers instead of charitable activities. But the Supreme Court has held that, under the First Amendment, the bare failure to disclose these high costs to donors cannot, by itself, support a fraud conviction. Madigan v. Telemarketing As socs., Inc., 538 U.S. 600, 606 , 123 S.Ct. 1829 , 155 L.Ed.2d 793 (2003). Evidence of high fundraising costs may, nonetheless, support a fraud prosecution when “nondisclosure is accompanied by intentionally misleading statements designed to deceive the listener.” Id.

In this appeal we consider, among other things, under what circumstances the government may introduce high commission rates as evidence in a criminal fraud case. Timothy Lyons and Gabriel Sanchez…