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A friend and I were discussing a hypothetical situation (taking place in the U.S.). It seems like one party has committed a misdeed, but we were not able to identify the specific crime or tort that took place.

Here is the situation. Alice and Bob make a deal. Alice pays Bob now, and Bob agrees that by tomorrow, he will acquire or create a controlled substance and deliver it to Alice. But before tomorrow, Bob changes his mind and backs out of the deal. He keeps the money Alice gave him.

What crime(s) or tort(s) has Bob committed in this situation?

Our naive legal analysis:

  • Bob did not commit fraud because he entered into the verbal contract with Alice in good faith.

  • Bob is not guilty of breach of contract, because a contract requiring an illegal act is unenforceable.

  • Bob never possessed or distributed a controlled substance.

  • Possibly this is a conspiracy to deliver a controlled substance. But at a criminal trial, it might very hard to prove that Bob ever intended to provide a controlled substance, rather than just to cheat Alice out of money.

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    For one, Bob stole Alice’s money – vol7ron May 7 '20 at 21:20
  • Bob can enter into a contract to commit an illegal act in good faith, assuming Bob knows it is illegal. – TylerH May 8 '20 at 13:56
  • What "friend and I"? Is either of you a lawyer, law student or anything relevant? Whether Bob commits fraud includes how and when and why he broke the contract. From the point of Alice's contract, how could it matter whether Bob ever possessed or distributed a controlled substance? There is no Question but that there was a conspiracy to deliver a controlled substance. How hard it might be to prove that Bob intended to provide a controlled substance, rather than just to cheat Alice out of money, is up to the judge and jury. – Robbie Goodwin May 8 '20 at 20:23
  • This sounds awfully similar to the Tiger King scenario... – WELZ May 8 '20 at 22:06
  • To confirm, Bob knew that what he agreed to was illegal at the time he agreed to it, right? – Nat May 9 '20 at 0:51
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What Crimes Were Committed?

The acts would constitute solicitation to manufacturer a controlled substance by Alice, attempted manufacture of a controlled substance by Bob, and conspiracy to commit a controlled substance by both of them. All of these are serious felony offenses.

The payment of money by Alice and acceptance of money by Bob to carry out the production of a controlled substance would be a sufficient overt act to support the charges of solicitation, conspiracy and attempt, even though the crime was not carried out.

All of these offenses are what are known in the criminal law as "inchoate offenses".

Affirmative Defenses

Would Bob or Alice have any affirmative defenses if prosecuted for these crimes?

The two main offenses are impossibility and abandonment. We can assume, given Bob's good faith, that it was not impossible for him to manufacture the controlled substances, but he simply decided not to do it.

A defendant may plead and prove, as an affirmative defense, of abandonment (typically under typical U.S. criminal statutes) by showing that he:

  1. Stopped all actions in furtherance of the crime or conspiracy
  2. Tried to stop the crime as it was ongoing
  3. Tried to convince the co-conspirators to halt such actions, or reported the crime to the police or other authorities.

Bob did shop all actions in furtherance of the crime and tried (successfully) to stop the crime as it was ongoing.

But, by not returning the funds and not making clear to Alice that he wanted nothing to do with the plan, Bob may not have met the third prong of an abandonment defense.

Alice certainly does not have an abandonment defense. She took no overt acts abandoning the plan.

Civil And Criminal Liability For Non-Drug Offenses

Also, Bob might have criminal liability for theft, and civil liability to Alice on charges of civil theft or on a claim for restitution.

First, a small technicality. Bob did breach a verbal contract. He has an affirmative defense of illegality to civil liability for breaching the verbal contract, but that doesn't change the fact that he did breach the contract.

Anyway, while a contract to carry out an illegal act is unenforceable, and Bob would have no right to sue Alice in court if he performed the contract and then Alice failed to pay, it is less clear in this fact pattern where the illegality that bars the contract doesn't actually happen.

Retaining property obtained on the basis of a contract that is disavowed that is not carried out, or when the funds are obtained on the basis of a criminal act, might constitute theft for which there might be criminal and civil penalties available, even though it was not fraud.

Restitution to put the parties back where they would have been had a contract not be entered into might be available as a remedy. Restitution is often available even when the underlying contract itself fails when people have taken affirmative acts based upon a contract that cannot be legally performed. This wouldn't be a strong case for restitution, and state case law would answer the question, but it wouldn't be a frivolous one either.

Of course, since Alice would be admitting to committing a crime is she brought suit (waiving her 5th Amendment right to be silent by doing so) she might be well advised not to sue. And, Bob would still have a strong "unclean hands" defense in an restitution or civil theft lawsuit.

The Low Chance Of Charges Being Brought Considered

It is true that if no one told anyone that the likelihood of criminal charges being brought is small.

But, one can easily imagine hypothetically, that a third party saw what went down in person, or via surveillance video and audio, or that one of the parties told someone what happened and was reported (ex-lovers and mistreated trusted professional aids are notorious for doing things like this), or that someone confessed (often people do things like this when joining a twelve step program or a converting to a new religion), or one of them might testify truthfully at trial despite having a 5th Amendment right not to do so.

What If The Jury Doesn't Believe Bob?

If the criminal jury thinks that Bob was lying in the first place about good faith, he would have criminal liability for theft and Alice would have liability for solicitation of and conspiracy to commit the manufacture of controlled substances. Alice would be on the hook for the same felonies. Bob would be guilty of a crime the severity of which would depend upon how much money he took from Alice.

If Bob doesn't think he can show the facts necessary to establish an abandonment defense, he might be smart to lie and say he was just stealing from Alice if the dollar amount was reasonably small, since the consequences would probably be less severe if he was convicted.

It would be very hard to prove that he was truly agreeing to the verbal contract in good faith when he never performed it, but did take the money and not try to return it.

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    I would think there would be no contract as it would be void ab initio for illegality of purpose. We are not talking here about a contract with incidental illegality - it has illegality at its core. – Dale M May 8 '20 at 2:13
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    @DaleM The question does not exclude the possibility that the substance was an obscure one, and Bob only realized it was controlled at a later point. Not to mention there are legal ways of handling controlled substances. – Roman Odaisky May 8 '20 at 13:08
  • @RomanOdaisky: It would be neat to see an answer address that scenario. I assume that the above answer is based on Bob having agreed to what he did while knowing that it was illegal; I assume that there's an alternative defense for people who back out after realizing that the thing they agreed to was illegal. – Nat May 9 '20 at 1:14
  • The contract would be illegal and therefore void, no matter when Bob realises it is illegal. Since there is no contract, receiving payment from Alice doesn’t create any legal obligation for Bob. Even if Bob knew the contract was illegal and never had any intent to keep his side of the bargain. – gnasher729 May 9 '20 at 21:30

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