Tenth Circuit Clarifies Wire Fraud “Property”: Creditor’s Collection Right and Escrow Possession Qualify; Internet Use Alone Does Not Satisfy Interstate Element; Grand Jury May Initiate §401 Contempt

Introduction

In United States v. Baker, the Tenth Circuit (per Judge Hartz, with Judge Phillips concurring in part and dissenting in part) issued a published decision that meaningfully develops several areas of federal criminal law. The panel:

Affirmed one wire-fraud conviction on the theory that a private creditor’s enforceable right to be paid is “property” under 18 U.S.C. § 1343 and that a scheme to thwart collection can satisfy the statute’s “money or property” requirement;
Recognized an escrow agent’s protectable property interest in escrowed funds based on possessory and beneficial rights akin to those discussed in Shaw v. United States (bank-fraud context);
Reversed a second wire-fraud count because the Government failed to prove that an internet communication actually crossed state lines—reaffirming that mere internet use does not, by itself, establish § 1343’s “interstate” element in the Tenth Circuit;
Upheld the use of a grand-jury indictment to initiate criminal contempt under 18 U.S.C. § 401, confirming that U.S. Attorneys may prosecute contempt as “offenses against the United States” under 28 U.S.C. § 547;
Rejected a Second Amendment challenge to 18 U.S.C. § 922(g)(1) in line with circuit precedent for nonviolent felons.

The case arises from a dispute between two brothers, Matthew and Shane Baker, following real estate dealings that generated a substantial assignment fee. Matthew was convicted for:

Wire fraud based on lies to an escrow officer to divert funds (Count I);
Wire fraud based on altering state business records online (Count II);
Criminal contempt (Count III); and
Felon-in-possession of ammunition (Count IV).

On appeal, Matthew attacked the “property” element under § 1343, the admission of a state interpleader judgment, the interstate transmission proof for the internet-based count, the initiation of contempt by grand jury, and the constitutionality of § 922(g)(1). The majority largely rejected these challenges but reversed Count II for failure of proof on the interstate element. A partial dissent would have also reversed Count I on jury-theory grounds and on a narrower view of what the wire-fraud “property” element encompasses when the alleged victim is an unsecured private creditor.

Summary of the Opinion

Wire Fraud – “Property” as to Shane (creditor): The Court held that a creditor’s right to be paid is “property” under § 1343. A scheme to frustrate collection—here, deceiving an escrow agent and concealing an asset to keep a creditor from recovering on a debt—can satisfy the statute’s property requirement (relying on Pasquantino v. United States and related principles from the common law of fraud).
Wire Fraud – “Property” as to Old Republic (escrow agent): The Court held that an escrow agent has a protectable property interest in funds it holds, based on its possessory and “collateral benefits” rights, aligning the analysis with Shaw v. United States’s recognition of bank property rights.
Wire Fraud – Interstate Element for Internet Use (Count II): The Court reversed because the Government did not prove that the online alteration of Utah corporate records crossed state lines. Citing Schaefer and Kieffer, the panel reiterated that internet use alone is insufficient to establish the interstate element; evidence must show actual cross-border transmission.
Evidentiary Ruling: The Court rejected the argument that the district court should have sua sponte admitted a state interpleader judgment. The issue was unpreserved, effectively invited error, and the document was irrelevant to the wire-fraud scheme as charged.
Sentencing: No error in loss calculation; because the “property” was the debt owed to Shane (not a security interest in the assignment fee), no collateral-offset applied. Remand for resentencing was ordered solely because Count II was vacated.
Criminal Contempt: § 401 grants courts the power to punish contempt; it does not preclude prosecutors from initiating contempt charges. U.S. Attorneys are obligated to prosecute offenses, and contempt is such an offense; a grand jury may indict for criminal contempt.
Felon-in-Possession: The Court reaffirmed circuit precedent (Vincent v. Bondi) that § 922(g)(1) as applied to nonviolent felons does not violate the Second Amendment.

Analysis

Precedents Cited and Their Influence

1) Pasquantino v. United States (544 U.S. 349 (2005))

Pasquantino held that a scheme depriving a government of excise taxes owed is a scheme to obtain “money or property” because the right to be paid taxes due is “property.” The Court emphasized common-law fraud principles: a right to be paid money is a “species of property,” and concealing assets to evade debts constitutes fraud because “money in hand” and “money legally due” are economically equivalent.

Baker extends—clearly and expressly—this property concept to the private creditor context. The Tenth Circuit held that a creditor’s entitlement to collect on a debt is property for § 1343 purposes, and that a deceptive scheme to thwart collection can satisfy the statute. The panel rejected the argument that only a judgment, lien, or specific collateralization would create a qualifying property interest.

2) Shaw v. United States (580 U.S. 63 (2016))

Shaw, interpreting the bank-fraud statute, recognized that a bank retains property rights in deposited funds—either as owner (when deposits are debts owed to the bank) or as bailee with a right to possession against all but the bailor. Although Shaw involved § 1344, the Tenth Circuit reasoned that the notion of “property” is comparable across the bank-, mail-, and wire-fraud statutes, given their parallel language and lineage.

Baker imports Shaw’s logic to escrow agents: Old Republic’s escrow instructions gave it both a possessory interest (exclusive control until lawfully disbursed) and beneficial interests (e.g., “collateral benefits” from holding funds). Misleading an escrow agent to release funds improperly therefore targets the agent’s property interests, satisfying § 1343.

3) United States v. Schaefer (501 F.3d 1197 (10th Cir. 2007)) and United States v. Kieffer (681 F.3d 1143 (10th Cir. 2012))

Schaefer and Kieffer govern proof of § 1343’s “interstate” element in the internet context. Schaefer held that internet use alone is not enough to show an interstate transmission; the Government must prove a cross-border communication (e.g., by server-location evidence). Kieffer found sufficient proof where the Government established that the same website’s content was accessed from computers in multiple states and that host servers were out-of-state.

Baker reaffirms this line: the Government must connect the dots and prove that the charged communication actually crossed state lines. Evidence that a website is publicly accessible nationwide (or that changes would be visible anywhere) is insufficient if the specific charged communication could have remained intrastate. The panel declined to take judicial notice of the “ubiquitous interstate nature of the Internet,” preserving Schaefer’s rule.

4) Additional Authorities

Cleveland v. United States and Kelly v. United States: confirm that the object of the fraud must be property in the victim’s hands; incidental effects are not enough.
Cedar Point Nursery v. Hassid: supports emphasis on exclusion/possession as core property sticks, relevant to escrow possession.
United States v. Ali, United States v. Jones, United States v. Van Doren, United States v. Stewart, United States v. Capps: inform the boundary between mere nonpayment and fraudulent interference with an entitlement to money due.
McCormick v. United States and Ciminelli v. United States: inform the dissent’s concern about affirming on theories not presented to the jury; the majority distinguishes those scenarios here.
Pendergast v. United States; Ex Parte Grossman; United States v. Mohsen; United States v. Williams; United States v. Morales; Yates v. United States; Fed. R. Crim. P. 7: collectively support the holding that contempt may be prosecuted by indictment.
Vincent v. Bondi: binds the panel on § 922(g)(1) post-Bruen challenges involving nonviolent felonies.

Legal Reasoning

A) Wire Fraud – What counts as “property” under § 1343

The majority framed the Government’s theory as targeting two property interests:

Shane’s creditor interest in the debt owed by Matthew (not an ownership interest in the specific assignment fee); and
Old Republic’s property interest in escrowed funds, predicated on possessory and beneficial sticks recognized by the escrow instructions and analogous to Shaw’s bank analysis.

As to Shane, the panel leaned on Pasquantino’s core proposition: the right to be paid money is “property,” and common-law fraud encompassed schemes to thwart creditors through concealment. The Court stressed the difference between mere nonpayment (not a federal fraud crime) and an affirmative, deceptive scheme designed to impair collection (which is). The record showed Matthew told lies to the escrow officer (claiming an assignment from Shane that did not exist), submitted falsified organizational paperwork inconsistent with the State’s records, and arranged an online change to Cap Fund’s listed manager immediately after being refused a wire to his personal account—all to keep Shane from learning of an asset that could satisfy a $445,000 debt.

As to Old Republic, the Court relied on the escrow agreement’s text to evidence two independent property sticks: (i) the right to possess the funds—exclusive of buyer/seller control until contractual conditions are met (with a duty to hold funds in a trust account and the right to interplead upon conflicting demands); and (ii) the right to “collateral benefits” from holding the funds (e.g., bank services, accommodation, interest, loans), with no obligation to account for such benefits to the parties. On those facts, the escrow agent had a property interest targeted by Matthew’s lies aimed at diverting funds contrary to the escrow instructions.

B) Wire Fraud – The interstate element for internet communications

The Tenth Circuit reaffirmed that § 1343’s “in interstate commerce” language requires proof that the charged communication actually crossed state lines. The Government’s evidence—showing that Matthew altered Utah corporate records online, that Utah-based escrow employees viewed the Utah website, and that the site is publicly accessible nationwide—did not establish that the particular charged communication traveled out of Utah. The Court declined to make broad assumptions about the internet’s interstate architecture and confirmed that Schaefer remains controlling absent en banc or Supreme Court intervention.

C) Evidence and invited error

The defense argued that a later state interpleader judgment declared Matthew entitled to the assignment fee and faulted the district court for not admitting that judgment sua sponte. The panel rejected the claim:

The defense never offered the judgment at trial after the court reserved ruling, constituting invited error and limiting review to plain error.
No plain error occurred; courts are “capable but not clairvoyant” and need not sua sponte introduce evidence for a party.
The judgment would have been irrelevant or confusing in any event—the charged fraud was about concealing an asset to thwart collection, not about ultimate entitlement to the fee in a later civil interpleader.

D) Sentencing

Because the “property” at issue supporting Count I was the debt, not the assignment fee, no collateral-offset applies under U.S.S.G. § 2B1.1 (cmt. n.3(E)(ii)). The vacatur of Count II requires resentencing procedurally, but the Court rejected any claim that the offense level for Count I was miscalculated.

E) Criminal contempt may be initiated by grand jury

Section 401 empowers courts to punish contempt; it does not deny executive power to prosecute. By statute, U.S. Attorneys must prosecute “offenses against the United States” (28 U.S.C. § 547(1)), and criminal contempt is such an offense. Numerous authorities recognize that contempt may be brought by indictment. The panel thus affirmed Matthew’s contempt conviction following a bench trial.

F) Second Amendment

Applying circuit precedent (Vincent v. Bondi), the court upheld the constitutionality of § 922(g)(1) as applied to a nonviolent felon. The ammunition conviction and sentence were affirmed.

The Dissent’s Concerns and the Majority’s Response

Judge Phillips dissented in part, focusing on Count I. He argued that:

The Government tried the case on the theory that Shane had a property interest in the assignment fee via Cap Fund management—not on the creditor-right-to-payment theory embraced on appeal. Affirming on a different theory violates the defendant’s right to a jury determination under McCormick and Ciminelli.
Even if the creditor-right theory were preserved, the majority’s approach expands wire fraud by treating an incidental consequence (nonpayment of an unrelated debt) as the scheme’s target, contrary to Cleveland and Kelly.
Shane’s loans might not have been legally enforceable (e.g., potentially gifts, indefinite terms, no interest or consideration), undermining any “money legally due” premise drawn from Pasquantino.

The majority replied that the Government’s opening and the record as a whole put the jury on notice that Matthew was scheming “to not pay his brother back the money that he owed him,” and neither the indictment nor the instructions limited “property” to the assignment fee. The jury simply had to find that the scheme sought to deprive someone of “money or property.” On enforceability, the defense repeatedly labeled the transfers “loans” and conceded on appeal they were legally enforceable. As to Cleveland/Kelly, the majority framed Shane’s creditor right as a direct target, not an incidental byproduct, because the lies were designed to impede collection on a known debt by concealing a readily available asset.

Impact

Wire fraud prosecutions involving debts and escrow funds

Creditors as “victims”: Baker cements in the Tenth Circuit that a private creditor’s right to be paid is “property” and that deceptive efforts to impair collection can satisfy § 1343. Prosecutors can charge schemes where the defendant lies or conceals assets to keep a creditor from getting paid.
Escrow agents as “victims”: By extending Shaw’s logic, the decision confirms escrow companies may be direct “property” victims of fraud. Misrepresentations aimed at changing disbursement directions can be charged as schemes to obtain escrow property.
Boundary maintained: The Court sensibly preserves the line between mere nonpayment (not a federal crime) and affirmative deception aimed at defeating collection (potential wire fraud).

Proof of interstate element for internet-based counts

Renewed emphasis on proof: The Government must adduce evidence that the specific charged transmission crossed a state line (e.g., server logs, host locations, routing paths, domain registration/hosting evidence, out-of-state access to the same content at the relevant time).
No “internet presumption”: Prosecutors should not rely on generalized internet architecture or website accessibility. Defense counsel can and should scrutinize the interstate element where all actors and servers may be in one state.

Charging criminal contempt

Grand-jury route confirmed: U.S. Attorneys may initiate § 401 contempt via indictment, removing any doubt that prosecutors, not just courts, can commence criminal contempt proceedings.
Separation-of-powers clarity: The holding harmonizes § 401’s grant of “power to punish” to courts with § 547’s mandate that U.S. Attorneys prosecute offenses.

Second Amendment litigation

Stability for § 922(g)(1): Within the Tenth Circuit, nonviolent felons remain within § 922(g)(1)’s ambit post-Bruen (per Vincent v. Bondi). Baker aligns with that precedent.

Complex Concepts Simplified

“Property” under the fraud statutes: Not just physical things or bank balances; includes legally enforceable rights to payment (Pasquantino). If you have a right to be paid, and someone’s scheme aims to defeat that right by lying or concealing assets, your “property” can be the object of wire fraud.
Escrow agent’s property interest: Even though an escrow agent doesn’t “own” the funds, it has a right to possess them until conditions are met, and may have other beneficial interests under the escrow agreement. Deceiving the agent to release funds improperly targets the agent’s property rights.
Interstate element for internet transmissions: Section 1343 requires actual crossing of a state line. Internet use alone doesn’t prove that. Think of it like proving where a phone call or email traveled—you need evidence the data passed through another state.
Invited error: If a party fails to offer evidence after the court invites them to do so, they generally cannot complain on appeal that the court failed to admit it sua sponte.
Criminal contempt initiation: Courts punish contempt, but prosecutors can charge it. A grand jury indictment is a valid way to start a criminal contempt case.

Conclusion

United States v. Baker delivers several notable clarifications. Most prominently, it confirms in the Tenth Circuit that a private creditor’s right to collect on a debt is “property” under § 1343 and that a deceptive scheme to frustrate collection can constitute wire fraud. The decision also recognizes escrow agents’ protectable property interests in escrowed funds—bringing escrow practice under the protective umbrella of federal fraud statutes much as banks are under Shaw. Equally important, the Court reasserts that prosecutors must prove actual interstate transmission for internet-based wire-fraud counts, refusing to dilute Schaefer/Kieffer with a broad “internet presumption.” Finally, the Court confirms that criminal contempt may be initiated by a grand jury and that § 922(g)(1) remains enforceable against nonviolent felons in this circuit.

Practically, Baker will influence how fraud cases are charged and tried in the Tenth Circuit. Prosecutors should carefully develop proof of interstate communications in internet-based counts and consider explicitly instructing juries on the precise “property” at issue. Defense counsel should scrutinize interstate proof and press for clear property-element instructions where appropriate. In the broader legal landscape, Baker offers a coherent synthesis of Supreme Court and circuit precedents, fortifying the traditional-property core of federal fraud while maintaining meaningful limits on its reach.