Another example of the rich having more power than the rest of us.

Say you see and respond to an advertisement for brand new iPhones. After calling to check on the availability of a new phone and then sending in your money, one was is delivered to you. After a month you go to the Apple store to investigate because the battery is running out of power around lunch time each day. The man at the Genius bar lets you know that your phone is dying because it is not in fact new, but very old. You might then go see the fraud squad at the police department and complain.

Well, if you are in Vermont, New York, or Connecticut, you might not get very far, because the Second Circuit just ruled that fraud requires lying. You might think that your case does indeed involve lying but according to this recent ruling, it’s not that simple. Promising to send something and then sending something else might be an intentional breach of an agreement, but it does not count as lying (unless the government can prove that the seller had already decided to send you a used iPhone before you talked to them).

Now of course the Second Circuit was not concerned about a seller of iPhones, they were overturning the conviction of Bank of America and Rebecca Mairone who caused the government billions of dollars in losses by delivering mortgage loans which they knew were not properly underwritten. They knew at the time the loans were delivered but the government can’t prove that they knew at the time they signed the documents because the documents were signed before the loans existed.

And people ask why none of the bankers who have caused the financial crisis have gone to jail… The bankers (and their lawyers) are a lot better at finding loopholes in the law than are the rest of us.