In the

United States Court of Appeals
               For the Seventh Circuit

No. 06-2883

U NITED S TATES OF A MERICA,
                                                    Plaintiff-Appellee,
                                  v.

JACK H ARGROVE,
                                               Defendant-Appellant.


             Appeal from the United States District Court
        for the Northern District of Illinois, Eastern Division.
               No. 03 CR 779—James B. Moran, Judge.



    A RGUED O CTOBER 20, 2008—D ECIDED A UGUST 26, 2009




 Before B AUER, K ANNE and W ILLIAMS, Circuit Judges.
  B AUER, Circuit Judge. Jack Hargrove was charged with
seven counts of mail and wire fraud in violation of
18 U.S.C. §§ 1341 and 1343; a single count of conspiracy
to commit mail fraud in violation of 18 U.S.C. § 371;
three counts of filing false tax returns in violation of
26 U.S.C. § 7206; and a single count of income tax evasion
in violation of 26 U.S.C. § 7201. Before trial, Hargrove
moved to dismiss the mail fraud charges on the ground
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that the honest-services provision of the mail fraud
statute, 18 U.S.C. § 1346, is unconstitutionally vague. The
district court denied the motion and the case proceeded
to trial. Hargrove was convicted of all charges except
income tax evasion and one count of filing false tax
returns, on which he was acquitted. On appeal, Hargrove
renews his challenge to the constitutionality of the
mail fraud statute; we affirm.


                   I. BACKGROUND
  Hargrove and Laurence Capriotti were co-owners of
Intercounty Title Company of Illinois (“Intercounty”), a
Chicago-based title insurance and escrow agent. The
company sold title insurance policies issued by Stewart
Title Guaranty Company.
   By the late 1980s, Intercounty was running an annual
deficit in the millions as the result of a price war in the
title insurance market. To cover its losses, Intercounty
invested in junk bonds in the hopes that the bond yield
would outperform their real estate obligations. The plan
backfired, and Intercounty got itself into a hole from
which it never recovered.
  Over a ten-year period beginning in 1990, Hargrove and
other executives at Intercounty engineered numerous
fraudulent schemes under which the title company’s
deficits were covered by thefts from its escrow account.
In total, the fraudulent practices robbed Intercounty of
more than $60 million.
  Before trial and again at the close of evidence, Hargrove
challenged the mail fraud charge on the basis that
No. 06-2883                                              3

18 U.S.C. § 1346 was unconstitutional on its face and as
applied. Hargrove argued that the statute is void for its
vagueness because it fails to provide adequate notice of
what conduct is proscribed. The district court rejected
Hargrove’s challenges. The jury was allowed to con-
sider whether Hargrove had committed mail fraud; it
determined he had and returned a conviction. Hargrove
appealed.


                    II. DISCUSSION
  On appeal, Hargrove initially raised two arguments,
but he has since withdrawn one. In his brief, Hargrove
raised an ineffective assistance of counsel claim, con-
tending that his primary trial attorney suffered from
either a potential or actual conflict of interest. However,
at oral argument, Hargrove requested to withdraw this
claim. As he correctly noted, claims of ineffective assis-
tance of counsel are disfavored on direct appeal because
the factual foundation for such claims is often undevel-
oped. Hargrove requested the opportunity to build a
more complete record for his claim and we granted
his request to do so.
  Hargrove’s remaining claim is a challenge to the consti-
tutionality of the mail fraud statute under which he
was convicted. He contends that 18 U.S.C. § 1346 is void
for vagueness because it does not define the criminal
offense with sufficient definiteness such that ordinary
people can understand what conduct is prohibited and,
moreover, it encourages arbitrary and discriminatory
enforcement. According to Hargrove, he could not have
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known that the conduct underlying his convictions
could be considered to have deprived another of the
“intangible right of honest services” under § 1346.
  The constitutionality of a statute is an issue of law
which we review de novo. United States v. Olofson, 

, 659 (7th Cir. 2009). As Hargrove acknowledges,
this Court has soundly rejected the claim that the mail
fraud statute, as applied to an intangible-rights theory,
is void for vagueness. United States v. Hausman, 

, 958 (7th Cir. 2003); United States v. Warner, 

, 697 (7th Cir. 2007). In Hargrove’s brief, he argues
that the issue may be ripe for reconsideration in light of
United States v. Thompson, 

(7th Cir. 2007).
However, he fails to posit any reason why Thompson
conceivably could undermine Hausman. Thompson did
nothing to disturb the central holding of Hausman,
which is that the mail and wire fraud statutes, §§ 1341,
1343 and 1346, are not unconstitutionally vague, as
applied under the intangible-rights theory.
  At oral argument, Hargrove informed this Court that
he has raised the claim solely for the purposes of preserv-
ing the issue in the event that the Supreme Court
chooses to consider it at some future date. Fair enough.
  For the foregoing reasons, we A FFIRM the judgment of
the district court.




                          8-26-09