Second Circuit asked if Canadian con man’s ‘failure to provide magic’ is a crime

Manhattan — Public defender Allegra Glashausser told a panel of federal appellate judges Wednesday morning, “The failure to provide magic is not criminal fraud.”

It’s almost certainly the first time such an argument has been uttered to the Second Circuit Court of Appeals, but a necessary claim to make on behalf of Glashausser’s client: Patrice Runner, a Canadian man who last year was sentenced to 10 years in federal prison for swindling mostly elderly mail recipients with his astrology business.

For roughly 20 years, prosecutors say Runner sent letters to millions of people, professing the sender to be well-known purported psychic Maria Duval, and promising recipients great wealth and fortune in exchange for a fee. The notes were falsely personalized with handwritten annotations, when in reality had been mass-produced and sent weekly by the tens of thousands.

The scam ran from 1994 to 2014 and raked in $175 million from more than 1.3 million victims in the United States alone, according to prosecutors. In 2023, a federal jury in Brooklyn found Runner guilty of 14 counts including mail fraud, wire fraud and other crimes related to the scheme.

But on Wednesday, Glashausser told a panel of Second Circuit judges that the jury got it wrong. Her client ran a legitimate astrology business, she said, which sent its customers booklets, recordings, talismans, rings and other supernatural trinkets that provided legitimate value.

If the customers believed in the “magic” Runner was selling in the psychic letters, that’s on them, Glashausser said.

“They have a First Amendment right to believe that, to engage with a company who sells that,” the public defender said. “The Supreme Court is clear that the intangible loss of some belief is not criminal fraud.”

Glashausser largely cited the Supreme Court decision Ciminelli v. United States, a unanimous ruling from 2023 that raised the bar for wire fraud and overturned the conviction of Louis Ciminelli, a close aide to former New York Governor Andrew Cuomo.

But all three appellate judges expressed some skepticism from the jump. U.S. Circuit Judge Denny Chin, a Barack Obama appointee, chimed in that Runner’s letters appeared to be fraudulent because customers thought they were getting letters from esteemed psychics.

“Instead, they got computer-generated letters by somebody in an office,” Chin said.

Glashausser shot back that if customers were harmed because of this, the harm would be intangible. There is no objective difference in property value between what customers were sent and what the government says they should have been sent, she claimed.

“The difference between those items is merely the magic,” Glashausser said.

John Burke, the assistant director of the Justice Department’s Consumer Protection Branch, disagreed. He told the judges that while Runner wants to claim that the only loss suffered by the victims was “the loss of magic,” they actually suffered real harms that justify his conviction and 10-year prison sentence.

“This case is not about whether magic or psychics are real,” Burke said. “This case is about Patrice Runner lying to his victims about every important aspect of the bargain he was offering and doing so in order to take their money.”

Several victims testified at trial saying they were defrauded by Runner, that they wouldn’t have paid his company if they knew they weren’t getting real psychic services, Burke said. He added that one swindled customer said they discovered a “personal awakening” after getting the psychic services, which never actually occurred.

Glashausser contended that such an awakening is an “intangible benefit,” just as intangible as the harm suffered by the more unsatisfied consumers. She held that Runner’s customers got what they paid for.

“The government only points to the lack of psychic magic as what they didn’t receive,” Glashausser said. “There is no evidence that they didn’t get something of value.”

Prosecutors say most of the customers who believed in the scam were elderly and low-income recipients of the letters, many of whom suffered from dementia. According to the Justice Department, Runner and his co-conspirators collaborated with other mail fraudsters by sharing and trading mailing lists that contained personal information to better target the letters.

Some victims lost thousands of dollars as a result.

Chin heard Wednesday’s arguments alongside U.S. Circuit Judge Sarah Merriam, a Joe Biden appointee, and U.S. Circuit Judge Guido Calabresi, a Bill Clinton appointee. The panel didn’t immediately issue a ruling.